Settlements of sex-abuse cases at issue in State Bar complaint.

The Oregon Supreme Court has suspended Salem lawyer Daniel J. Gatti in connection with settlements he brokered for a group of sex-abuse victims several years ago.

The lawsuits were against the Catholic Church, the state of Oregon and Father Michael Sprauer. He was the chaplain at MacLaren School in Woodburn — now MacLaren Youth Correctional Facility — when the 15 plaintiffs alleged that Sprauer molested them as boys. Sprauer has denied the allegations, saying that they were fabricated by ex-convicts as part of a money-making scheme.

Some of the lawsuits go back to 2001.

The complaint by the Oregon State Bar alleges that Gatti misled clients about how the lawsuits were settled with the church and state and how the $1.6 million in settlement money was allocated.

The high court, which has the ultimate authority in disciplining lawyers, released its decision Thursday in a case going back seven years. The opinion was unsigned, as is usual in disciplinary cases.

The court suspended Gatti from law practice for 90 days. The suspension takes effect Oct. 20. It was half the time recommended by a trial panel of the State Bar’s Disciplinary Board back in January 2013.

Gatti had asked the court to dismiss the charges or simply issue a public reprimand.

The justices heard the arguments on Nov. 8, 2013. Justices Rives Kistler and Virginia Linder did not take part in the arguments or decision.

Gatti underwent open-heart surgery in 2009 and has been dealing with related health problems.

Gatti, a long-standing personal injury lawyer, has been prominent in pursuing sex-abuse lawsuits.

The dispute

After the settlements negotiated by Gatti — $600,000 from the Portland Archdiocese in 2006 and $1.05 million from the state in 2007 — one of the plaintiffs filed a complaint with the Oregon State Bar.

Earl New acknowledged that his claim of $7,500 would be less than those allocated to other plaintiffs, given his status. Since 1994, New has been housed at the Snake River Correctional Institution in Ontario on convictions for burglary, kidnapping, sodomy and menacing. He is scheduled for release in 2021.

Before the $1.05 million settlement with the state, a jury had awarded $595,000 to one plaintiff and $590,000 to another. The high court decision referred to them only by their initials.

But in his ethics complaint to the State Bar, New said Gatti failed to respond to his requests for a detailed accounting and by Gatti’s “less than forthright and evasive handling of this matter.”

Long process

After an investigation by the State Bar, the Bar’s Professional Responsibility Board — which consists of eight lawyers and two public members — decided there was probable cause in New’s complaint for the State Bar to proceed against Gatti.

A trial panel of the Bar’s Disciplinary Board, consisting of two lawyers and one public member, then found Gatti in violation of four counts of professional conduct.

Among them were Gatti’s failure to explain matters to the extent “reasonably necessary” to allow his clients to make informed decisions, to secure their informed consent before he took part in the settlement talks with the church and state, and to secure their informed consent before representing them despite a potential conflict of interest.

The high court upheld those counts against Gatti.

“These are significant violations that, in light of the accused’s (Gatti’s) disciplinary history, warrant more than a 30-day suspension,” the court concluded.

The panel also found that Gatti also engaged in deceit in representation, but the Supreme Court disagreed and struck down that count.

Prior discipline

Gatti has been disciplined by the Supreme Court before.

In 2000, the justices issued a public reprimand after he posed as a chiropractor while he attempted to obtain information about medical reviews by an insurance company that denied injury claims of workers.

The court held that he violated a State Bar rule against deceit, but Gatti said he used deceit as an investigative tool.

Gatti claimed victory when the high court modified the rule in 2002, after federal prosecutors said it would hamper their investigative efforts when they directed others to engage in deceit.

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