Hawaii is investigating mainland firms accused of violating solicitation moratorium

Following the Palisades Fire, a woman standing in line at a supermarket was reportedly approached by a lawyer's runner with a clipboard, hoping to sign her up to sue whoever was responsible.

And as the Lahaina Fire still smoldered on Maui, solicitation letters from mainland law firms are said to have started appearing in residents' mailboxes.

Though officially unverified, accounts of illicit attorney overreach in pursuit of clients circulated widely following recent disasters and provoked reform legislation now headed for Gov. Gavin Newsom's desk.

"There's a fog-of-war effect that may be distorting these stories somewhat," acknowledged ethics attorney Ryan S. Little, who practices in Hawaii and California, "but I represent firms that do disaster litigation, and when something happens, and there's a defendant with resources in sight, law firms want to sign up as many clients as possible."

But they have to do it in the right way. Runners or cappers practice the kind of fee-based ambulance-chasing that is illegal in California. In Hawaii, professional conduct rule 7.3e-1 forbids lawyers from making direct contact with prospective clients in personal injury or wrongful death cases during a 30-day post-event moratorium.

"A lot of mainland firms didn't know that rule, and they tried to operate out of the same playbook they use at home," Little said, adding that Hawaii's legal discipline agency has opened investigations. More than a dozen complaints about attorneys lacking Hawaii licenses who nevertheless quickly solicited fire survivors reached the agency's chief counsel, according to a published report. "Nobody's been busted so far, but Hawaii has taken a very protectionist approach," Little added.

Some mainland firms, mindful of potential ethics pitfalls, approached him for counsel before they went to work on Maui, Little said. "And some got in touch after they learned they broke the rules."

Little is a former prosecutor at Hawaii's Office of Disciplinary Counsel who now has his own firm in Honolulu. He spoke Thursday at the California Lawyers Association annual meeting in Universal City.

"I suspect the ODC is still gathering evidence. They'll pick the most odious examples and try prosecuting them," he predicted in an interview on Friday. If sanctions are imposed, many state bars elsewhere, including California, have reciprocal discipline processes based on actions taken in other jurisdictions.

Little's subject last week at the CLA confab: "Ethics in an Hour (Not Quite)." Among his chief topics was the California Legislature's anticipated enactment of SB 37, an overhaul of legal advertising rules.

The measure passed the day after Little spoke and, following a pause for a technical adjustment, will soon be ready for Newsom's signature, a spokeswoman for its sponsor, Sen. Tom Umberg, D-Santa Ana, said on Friday.

Little saw SB 37 as a direct reaction to the January 2025 Southern California Wildfires. "As the disaster litigation sector has become more sophisticated, firms have mounted a full court press on outreach," he said. "And there's been a lot of public backlash to that. Umberg's bill is meant to curb the worst of it."

Umberg concurred. "It's always been an issue, but after the fires that was brought to my attention by a lot of folks," the chair of the Senate Judiciary Committee said earlier this month.

Among his bill's features: an upgrade to penalties for lawyers whose advertisements cross the line. Although false and misleading attorney self-promotion has been prohibited in California ever since 1977, when the U.S. Supreme Court green-lighted attorney advertising in Bates v. State Bar of Arizona, cases were tried somewhat below the radar in State Bar Court. There, the penalties were limited to fines, restrictions on the respondent's law license or, in extreme cases, disbarment.

Now, SB 37 creates a private right of action in cases involving attorney false advertising and illegal lawyer referral services. Private citizens can sue in state court, with statutory damages ranging from $5,000 to $100,000.

"The aim is to bring attorney advertising practices out of State Bar Court and into the public arena," Little said.