The Kentucky Supreme Court denied a motion by the Office of Bar Counsel to indefinitely suspend Louisville attorney Arthur Joseph McLaughlin III from practicing law, despite his failure to initially respond to disciplinary charges filed against him.
In an opinion and order issued in case 2024-SC-0496-KB, the court ruled that McLaughlin's subsequent response to the suspension motion provided a feasible basis for why he did not respond to the original charges as required by Supreme Court Rule 3.164.
McLaughlin, whose Kentucky Bar Association membership number is 90218 and who maintains a bar roster address at 302 Iola Road, Louisville, was admitted to practice law in Kentucky on May 4, 2004. He has previously received two private admonitions from the bar association, one for not returning unearned fees and another for not returning unearned bond monies. The court noted that he properly complied with the KBA's orders in those earlier matters.
The current disciplinary action stems from a complaint filed by Terry Miller on Jan. 2, 2024, alleging that McLaughlin failed to return a $5,000 retainer fee after their attorney-client relationship ended. According to the complaint, Miller hired McLaughlin to represent him in a child custody matter but alleged that the attorney took no action on his behalf and failed to return phone calls for weeks.
Miller stated that seven months after he first requested a refund of his retainer, McLaughlin only agreed to provide the refund after Miller threatened to file a complaint with the Kentucky Bar Association. However, when McLaughlin wrote a check to Miller from his personal checking account, the check did not clear due to insufficient funds.
McLaughlin was served with the bar complaint on Feb. 8, 2024, but failed to file a response as required by bar rules. This failure to respond prompted the Office of Bar Counsel to seek indefinite suspension under Supreme Court Rule 3.167.
On May 6, 2024, the Inquiry Commission authorized charges against McLaughlin for six violations based on Miller's complaint. These charges included violations of SCR 3.130 (1.3) for diligence by allegedly abandoning his representation of Miller, SCR 3.130 (1.4)(a)(4) for communication by waiting weeks to return Miller's telephone calls, and SCR 3.130 (1.5)(a) for fees by failing to safekeep Miller's retainer in a separate account from his personal accounts.
The case highlights the Kentucky bar's disciplinary process, which requires attorneys to respond to formal charges within specified timeframes. When attorneys fail to respond, the Office of Bar Counsel can seek indefinite suspension as a sanction for non-compliance with procedural requirements, separate from any underlying substantive violations.
However, the Supreme Court's denial of the suspension motion indicates that McLaughlin was able to provide an acceptable explanation for his initial failure to respond. The court's opinion states that his response to the suspension motion included "a feasible basis for why he did not respond to the charges."
This case demonstrates the Kentucky Supreme Court's approach to attorney discipline, balancing the need for compliance with procedural rules against circumstances that may explain an attorney's failure to respond timely. While the court denied the motion for indefinite suspension, the underlying disciplinary charges against McLaughlin regarding his handling of Miller's retainer fee remain pending.
The matter also underscores the importance of proper client trust account management in legal practice. Kentucky's Rules of Professional Conduct require attorneys to maintain client funds separate from their personal accounts and to return unearned fees promptly when representation ends.
McLaughlin's case adds to the ongoing efforts by state bar associations to enforce professional conduct standards and protect client interests. The Kentucky Bar Association's disciplinary system includes various sanctions ranging from private admonitions to indefinite suspension or disbarment, depending on the severity of violations and an attorney's history of compliance with professional standards.
The Supreme Court's decision to deny the suspension motion allows McLaughlin to continue practicing law while the underlying disciplinary charges proceed through the bar's adjudication process. The outcome of those substantive charges will determine what, if any, additional disciplinary action may be taken regarding his handling of the Miller retainer fee matter.