A couple of years ago (has it been that long? Has it only been a couple of years?) I wrote about Sidney Powell (of Kraken election lolsuit fame) and her attempt to join a legal defense team for January 6 insurrectionists, and also crowdfund her 501(c)(4)*–which may or may not have been connected to that effort. I was skeptical then (and spent most of the blog entry talking about crowdfunding legal services, generally).

I couldn’t find any information about what may have happened to this 501(c)(4) or the defense team effort, but Attorney Powell herself remains in limbo. She continues to face disciplinary problems in Michigan, but earlier this year her Texas disciplinary case was thrown out.

Anyway, while Powell’s troubles remain simmering in the background, litigation crowdfunding has recently resurfaced as an issue, as lawyers for Daniel Penny, the man charged with killing Jordan Neely on a New York subway, has have raised nearly $2.5 million dollars (as of this posting) to support his defense fund. (By contrast, Neely’s family has raised $140,000 on a GoFundMe.)

Nerd friend Brian Faughnan beat me to this with his own thoughts. Take a look, they are very very good thoughts. After that, come back here. I’ll wait.

Okay. The GiveSendGo fundraising page (which I do not wish to link to) offers this description of the matter:

Daniel Penny is, a twenty-four-year-old college student and decorated Marine veteran, facing a criminal investigation stemming from him protecting individuals on a NYC subway train from an assailant who later died. Funds are being raised to pay Mr. Penny’s legal fees incurred from any criminal charges filed and any future civil lawsuits that may arise, as well as expenses related to his defense. All contributions are greatly appreciated. Any proceeds collected which exceed those necessary to cover Mr. Penny’s legal defense will be donated to a mental health advocacy program in New York City.

***All funds will be sent to and managed by the law offices of Raiser & Kenniff, P.C***

As I wrote in 2021, regarding the Powell matter, lawyers can be directly involved in crowdfunding, but it’s “slipper[y]”:

Several rules are implicated here—in Wisconsin, these include SCR 20:1.8(f) (which imposes requirements for accepting funds from third parties); SCR 20:1.6 (confidentiality); SCR 20:1.5 (particularly the provisions about communicating a fee, handling unearned fees, and handling refunds); and SCR 20:4.1 , 7.1, and 8.4(c) (yep, truthfulness again). [State Bar Ethics Counsel Aviva] Kaiser also warns lawyers who manage crowdfunding to keep a close eye on it, and have a plan for ending a campaign once funding is sufficient.

That paragraph still holds here (with the caveat, as always, that this is a Wisconsin-specific analysis and New York’s rules are a little different, both in wording and in case law). Let’s look at this a little more closely.

Third-party funding of litigation is covered, in part, by SCR 20:1.8(f):

A lawyer shall not accept compensation for representing a client from one other than the client unless:

(1) the client gives informed consent or the attorney is appointed at government expense; provided that no further consent or consultation need be given if the client has given consent pursuant to the terms of an agreement or policy requiring an organization or insurer to retain counsel on the client’s behalf;

(2) there is no interference with the lawyer’s independence of professional judgment or with the client-lawyer relationship; and

(3) information relating to representation of a client is protected as required by SCR 20:1.6.

SCR 20:1.8(f)(2) and (3) present interesting questions. In a vacuum, I would expect someone dropping $50 into a random crowdfund account to just do so and then that’s the end. They would not be bugging the lawyer for information or trying to influence the representation (beyond, perhaps, yelling on social media about it).

But we’re not in a vacuum, and those of us who have accepted third-party, non-insurance funds know that a lot of people think that contributing money gives them a say in the representation. I’m not always aware of when my clients’ cases are funded by others (if a parent gives their child money to pay for legal bills, I will likely never hear about it), but when I do know about it, I’m very clear in both my fee agreement (to the client) and in a separate writing (to the funder) about their roles. Sometimes I do get the client’s informed consent to speak with the funder about the bills, or about the case in a broader sense, but that’s driven by the specifics of the case. My default is that they’re free to pay but that’s it.

Brian asked some thoughtful questions about this too—it is perfectly reasonable for a funder to ask about hourly rates, and whether these are higher or lower than typical rates, and who decides which charity gets the extra funds. Will the law firm be willing to answer these questions? Will this $2.5 million windfall (which is certainly orders of magnitude higher than an advanced or flat fee on a typical felony case) affect the rates, or the work that is being performed?

The GiveSendGo page does not contain any disclaimers or explanation, and I doubt that Penny has given the go-ahead for his lawyers to talk to whatever randos call in seeking an audience. So, I hope that the law firm has a good receptionist.

The pitch itself is interesting to me as wordcraft—not only is this an astonishing example of the exonerative tense (“protecting individuals on an NYC subway train from an assailant who later died” is not how prosecutors have characterized the matter—the complaint is reproduced here), but the rest is incredibly vague. What future civil lawsuits may arise? People donating may think they could be funding a civil wrongful death suit, but if Penny is exonerated, could they be funding a defamation suit against the media, or the Neely family, or something wholly unrelated that Penny wants to undertake? (And would the crowdfunders care?)

What does “mental health advocacy program” mean? Who gets to choose? Will these funds end up with the local chapter of a reputable national organization, or some fringe group? GiveSendGo, the fundraising platform Raiser & Kenniff PC has used, also hosted campaigns for January 6 defendants, the Canadian trucker convoy, and Kyle Rittenhouse. Will the “advocacy program” be cut from that cloth, and again, will the crowdfunders care? Do these statements create truthfulness issues under SCR 20:8.4(c) or other rules?

Finally, the whole issue of SCR 20:1.8(f)(1) in the first place. New York also requires informed consent in this situation, so, presumably, here, the client has been counseled as to the material risks of and reasonably available alternatives to this course of conduct. (See SCR 20:1.0(f).) And what are the alternatives? I am assuming that Penny does not qualify for public defender representation (though if he did, that would be one alternative). But good criminal defense is expensive, and more so in a highly publicized homicide case; here, the “reasonably available alternatives” are variations on self-funding and perhaps borrowing from friends and family.

This does speak to a broader point–individuals facing criminal prosecution do not qualify for a public defender, but don’t have the means to put together even a $5,000 payment to a private attorney. And plenty of folks not involved in the criminal justice system but who have life-altering legal issues such as divorce, eviction, or immigration can’t afford counsel. Crowdfunding is difficult when your case doesn’t “go viral.” One’s access to justice shouldn’t depend on whether they capture the zeitgeist. But, I suppose, that’s a blog for another day.