Introduction

In In re Petition for Disciplinary Action against Ana L. Pena, 23 N.W.3d 548 (Minn. July 16, 2025), the Minnesota Supreme Court disbarred a Minnesota-licensed attorney for extensive misappropriation of employer funds and failure to cooperate with disciplinary authorities, committed while she was already under suspension for prior misappropriation. The respondent, Ana L. Pena, practiced immigration law in Texas on the basis of her Minnesota license. Following her 2020 suspension in Minnesota for misappropriating client funds and related misconduct, she remained employed by a Texas law firm in a non-lawyer role. Between 2021 and 2023, she misappropriated over $94,000 from the firm and a partner, admitted the conduct to a human resources investigator, and then failed to respond to the Director’s investigation and to the petition for discipline.

The opinion addresses key issues at the intersection of cross-jurisdictional practice, the discipline of suspended lawyers, and sanctions for misappropriation not charged or framed as a criminal violation. Central questions included: (1) the appropriate sanction for misappropriating employer (as opposed to client) funds through deceptive payroll manipulation and false representations; (2) the effect of prior, similar discipline and the commission of new misconduct while suspended; and (3) the sanctioning consequences of noncooperation in the disciplinary process when the allegations are deemed admitted by default under Minnesota’s procedural rules.

The court held that disbarment is warranted given the magnitude, duration, and deceitfulness of the misappropriation; the aggravating weight of prior similar discipline; the fact that the new misconduct occurred during a suspension; and the respondent’s failure to cooperate with the Director’s investigation and with the court’s process.

Summary of the Opinion

The court disbarred Ana L. Pena from the practice of law in Minnesota, effective immediately. The governing facts were deemed admitted under Rule 13(b) of the Rules on Lawyers Professional Responsibility (RLPR) because Pena did not answer the petition. Those admitted facts established that:

• After her 2020 indefinite suspension (without the right to seek reinstatement for 18 months) for misappropriating client funds and related violations under Texas ethics rules, Pena remained employed by a Texas law firm in a non-lawyer capacity.
• From January 2021 to November 2023, she misappropriated $87,597.18 from the firm by: (a) retaining 74 overpayments after a payroll schedule change; (b) secretly increasing her own base wage; and (c) taking $31,200 in pay advances without repayment. In July 2023, she also induced a partner to loan her $7,200 on false assurances of swift repayment, which she never intended to honor. Total misappropriation: $94,797.18.
• She admitted the misconduct in a meeting with a human resources investigator and was terminated, after signing over her final paycheck. A criminal investigation in Texas is pending.
• She failed to maintain updated contact information in Minnesota’s registration system and did not respond to multiple communications from the Director. She did not answer the disciplinary petition.

The court applied Minnesota law in determining the sanction (RLPR 15(a); In re Overboe), and evaluated the misconduct using Minnesota’s four-factor framework: nature of misconduct; cumulative weight of violations; harm to the public; and harm to the profession. Although the petition did not allege a criminal-acts violation (the analogue of Minn. R. Prof. Conduct 8.4(b)), the court concluded that disbarment was nevertheless warranted due to the scope and duration of the dishonest misappropriation, the absence of any mitigation, the aggravating weight of prior similar discipline, the fact that the misconduct occurred while suspended, and the respondent’s noncooperation, which independently aggravates sanctions and undermines the disciplinary system. The court ordered compliance with RLPR 26 (notice obligations) and assessed $900 in costs under RLPR 24.

Detailed Analysis

Precedents and Authorities Cited

• Choice of law and sanctioning authority:
  • In re Overboe, 745 N.W.2d 852, 866–67 (Minn. 2008): Minnesota applies its own law to determine sanctions even when underlying conduct involves multiple jurisdictions. Here, the court recognized Texas rules (TDRPC) for the substantive violations, but used Minnesota law to set the sanction.
  • Minn. R. Prof. Conduct 8.5(b): For non-tribunal conduct, apply the rules of the jurisdiction where conduct occurred, or the rules of the jurisdiction with the predominant effect. The court had done so previously in In re Garza Peña, 942 N.W.2d 751 (Minn. 2020) (order), suspending Pena based on Texas rules because her prior misconduct occurred in and had predominant effects in Texas.
• Purpose and framework for attorney discipline:
  • In re Rebeau, 787 N.W.2d 168, 173 (Minn. 2010); In re Plummer, 725 N.W.2d 96, 98 (Minn. 2006): Discipline protects the public and the justice system and deters future misconduct; it is not punitive.
  • In re Nelson, 733 N.W.2d 458, 463 (Minn. 2007): Four-factor sanctioning test—nature of misconduct, cumulative weight, harm to public, harm to the legal profession.
  • In re Rooney, 709 N.W.2d 263, 268 (Minn. 2006): Strive for consistency with similar cases.
• Noncooperation with the disciplinary process:
  • In re Schulte, 869 N.W.2d 674, 678 (Minn. 2015); In re Cartwright, 282 N.W.2d 548, 551 (Minn. 1979): Attorneys must cooperate with disciplinary authorities. Noncooperation alone can justify indefinite suspension and increases sanctions when coupled with other misconduct.
  • In re Brost, 850 N.W.2d 699, 705 (Minn. 2014); In re Pitera, 827 N.W.2d 207, 212 (Minn. 2013); Ulanowski, 834 N.W.2d 697, 703 (Minn. 2013): Noncooperation harms the public and profession by undermining disciplinary integrity and public confidence in self-regulation.
• Cumulative misconduct and temporal scope:
  • In re Oberhauser, 679 N.W.2d 153, 160 (Minn. 2004): Multiple, severe rule violations can compel severe discipline even if a single act might not.
  • Ulanowski, 834 N.W.2d at 703; In re Fairbairn, 802 N.W.2d 734, 743 (Minn. 2011): Distinguish brief lapse/single incident from multiple acts over substantial time; misappropriation of any kind harms the public at large.
• Prior discipline and misconduct while suspended:
  • In re Weems, 540 N.W.2d 305, 309 (Minn. 1995): After discipline, the court expects renewed commitment to ethics.
  • In re Rhodes, 740 N.W.2d 574, 580 (Minn. 2007): Prior discipline is relevant in setting new sanctions.
  • In re Hulstrand, 910 N.W.2d 436, 444 (Minn. 2018); In re Tigue, 900 N.W.2d 424, 432 (Minn. 2017): Prior discipline weighs heavily if it is for similar misconduct.
  • In re De Rycke, 707 N.W.2d 370, 375 (Minn. 2006); Brost, 850 N.W.2d at 705: Misconduct while suspended is an aggravating factor.
• Comparative sanctions for misappropriation absent a criminal-acts charge:
  • In re Koble, 827 N.W.2d 765 (Minn. 2013) (order); In re McFarland, 652 N.W.2d 536 (Minn. 2002) (order): Short suspensions (30 days) imposed for misappropriation of relatively small amounts from a firm when framed as dishonesty (Rule 8.4(c)) rather than a criminal act (Rule 8.4(b)). The court distinguishes those cases here due to the far greater amount and aggravating context.
• Procedural and rule references:
  • RLPR 9(a)(1) (commencement by petition), 13(b) (allegations deemed admitted if no answer), 15(a) (Minnesota law governs discipline), 24 (costs), 26 (post-sanction notice duties).
  • Substantive rules violated: TDRPC 8.04(a)(3) (fraud/dishonesty); MRPC 8.1(b) and RLPR 25 (failure to cooperate).
  • Note on criminal-acts analogue: The petition did not allege TDRPC 8.04(a)(2)/MRPC 8.4(b); the court notes an argument could be made for felony theft by swindle under Minn. Stat. § 609.52 but finds disbarment appropriate without reaching that issue.

Legal Reasoning

The court’s analysis proceeds from a settled framework and arrives at disbarment by layering seriousness, repetition, and aggravation on top of dishonesty-based misappropriation.

• Nature of misconduct:
  • Pena violated TDRPC 8.04(a)(3) (the analogue of MRPC 8.4(c)) by engaging in fraud and dishonesty to misappropriate funds through multiple modalities: exploiting a payroll schedule change to retain 74 overpayments, secretly elevating her own base wage (with consequential retirement plan matches), taking pay advances on false assurances of repayment, and inducing a personal loan from a partner based on a misrepresentation of intent and ability to repay. These are not mere accounting errors; they reflect extended, intentional deceit for personal gain.
  • The court emphasizes that although the petition did not charge a criminal-acts violation (the analogue of Rule 8.4(b)), the scale and persistence of the misconduct—and the context of a prior misappropriation suspension—place this case beyond the short suspensions sometimes seen in non-8.4(b) misappropriation cases such as Koble and McFarland.
  • Pena also violated MRPC 8.1(b) and RLPR 25 by failing to cooperate with the Director’s investigation, an independent wrong that aggravates discipline in its own right.
• Cumulative weight of violations:
  • The misconduct was serial and systematic, spanning nearly three years and involving multiple methods of deception. The court explicitly characterizes the conduct as neither an isolated incident nor a brief lapse in judgment, invoking Ulanowski and Fairbairn to underscore how repetition over time compels harsher sanctions.
  • Added to these repeated dishonest acts is the compounding violation of noncooperation, further increasing the cumulative weight (Taplin).
• Harm to the public and to the profession:
  • Though no clients suffered direct loss, Fairbairn teaches that misappropriation of any kind harms the public at large by eroding trust. Here, the financial harm to the firm and its partner (over $94,000 total) is concrete, and the reputational harm is systemic.
  • Noncooperation undermines the integrity of the disciplinary system and weakens confidence in the profession’s ability to self-regulate (Brost; Pitera; Ulanowski), providing an independent basis for increasing the sanction.
• Aggravating factors and absence of mitigation:
  • Prior similar discipline: Pena was suspended in 2020 for misappropriating client funds. The present misconduct—misappropriation from her employer—though different in victim identity, is fundamentally similar and “weighs heavily” as an aggravator (Hulstrand; Tigue; Rhodes).
  • Misconduct committed while suspended: Engaging in new misconduct during a suspension shows a lack of renewed commitment to ethical practice (Weems; De Rycke; Brost).
  • Mitigation: None appeared in the record, and the court, following Matson, cannot consider mitigation not presented where the respondent defaults.
• Consistency and proportionality:
  • While Koble and McFarland imposed short suspensions for dishonest misappropriation not framed as criminal acts, the court distinguishes those cases based on the amount (here, six figures when including retirement match consequences), the prolonged duration, and the aggravating context of a prior, similar suspension and noncooperation. The opinion thus harmonizes precedent while clarifying that non-8.4(b) misappropriation of employer funds can merit disbarment when these aggravators are present.
• Procedural posture and admissions:
  • The facts were deemed admitted under RLPR 13(b) due to the absence of an answer. This underscores the importance of participation in the disciplinary process: default not only concedes the factual allegations but also deprives the respondent of the opportunity to present mitigation or context.

Impact and Significance

The decision carries several forward-looking implications for attorney discipline and law practice management across jurisdictions:

• Disbarment for employer-fund misappropriation without an 8.4(b) charge:

  The opinion clarifies that disbarment is an appropriate sanction for large-scale, prolonged misappropriation of employer funds grounded in dishonesty (Rule 8.4(c)/TDRPC 8.04(a)(3)), even when the petition does not allege a criminal-acts violation. This is particularly so when accompanied by prior similar discipline and noncooperation. Future respondents cannot assume that the absence of an explicit 8.4(b) charge insulates them from disbarment in non-client misappropriation cases.

• Weight of prior similar discipline and misconduct during suspension:

  The court strongly reaffirms that prior discipline for similar misconduct “weighs heavily,” and that committing new violations while suspended is a powerful aggravator. Together, these factors can elevate discipline to disbarment even where earlier cases might have imposed suspension for similar rule violations without such aggravating context.

• Noncooperation as an aggravator and systemic harm:

  This opinion continues a clear line of Minnesota cases treating noncooperation as sanction-enhancing both because it obstructs the investigatory function and because it erodes public trust in the profession’s ability to self-regulate. Lawyers facing investigation should regard cooperation not as optional but as a core professional duty.

• Cross-jurisdictional practice and sanctioning:

  The case illustrates that Minnesota will apply the professional responsibility rules of the jurisdiction where the conduct occurred (here, Texas) to assess violations, but will apply Minnesota law to determine sanctions. Minnesota-licensed lawyers practicing outside Minnesota remain accountable to Minnesota’s disciplinary authority and sanctioning standards, even when not licensed locally.

• Law firm risk management when employing suspended lawyers:

  The firm’s experience (retaining a suspended lawyer in a non-lawyer role and then suffering a substantial misappropriation) highlights the need for robust internal controls, segregation of financial duties, auditing of payroll access, and careful evaluation of risk when employing disciplined attorneys—even in non-legal capacities. While not a legal holding, the facts underscore organizational vulnerabilities and the importance of oversight.

Complex Concepts Simplified

• Misappropriation:

  Using, taking, or diverting funds that belong to someone else (client, firm, partner, or third party) without authorization. In disciplinary contexts, misappropriation is a grave ethical breach, regardless of whether criminal charges are filed.

• MRPC 8.4(b) vs. 8.4(c) (and Texas analogues):

  8.4(b) concerns criminal acts that reflect adversely on fitness; 8.4(c) addresses conduct involving dishonesty, fraud, deceit, or misrepresentation. A case can result in severe discipline under 8.4(c) based on dishonesty alone, even without a criminal charge under 8.4(b).

• Deemed admitted (RLPR 13(b)):

  If a respondent does not answer a disciplinary petition on time, all factual allegations are treated as true. This procedural default streamlines the case to the sanction phase and forecloses presentation of mitigation unless the respondent participates.

• Failure to cooperate (MRPC 8.1(b); RLPR 25):

  Lawyers must respond to lawful demands for information in disciplinary investigations. Noncooperation is itself misconduct and increases the severity of discipline for other violations.

• Aggravating and mitigating factors:

  Aggravators (e.g., prior similar discipline, misconduct while suspended, noncooperation) increase the sanction; mitigators (e.g., remorse, restitution, cooperation) can reduce it. Here, the court considered no mitigation because the respondent defaulted.

• Choice of law in lawyer discipline:

  For conduct not before a tribunal, the rules of the jurisdiction where the conduct occurred (or where its predominant effect was felt) guide the violation analysis. But the disciplining jurisdiction applies its own law to set the sanction.

• Disbarment vs. suspension:

  Suspension temporarily removes a lawyer’s right to practice (often with conditions for reinstatement). Disbarment is the profession’s ultimate sanction, typically requiring a lengthy waiting period and an exacting reinstatement process, or barring reinstatement altogether depending on jurisdictional rules.

Conclusion

The Minnesota Supreme Court’s decision in Pena sets a clear and consequential marker: extensive, intentional misappropriation of employer funds carried out over an extended period, committed by a lawyer already suspended for similar conduct, and compounded by noncooperation with disciplinary authorities, warrants disbarment—even when the petition does not allege a criminal-acts violation. The ruling harmonizes and extends prior case law by clarifying that the absence of an 8.4(b) charge does not preclude disbarment where the dishonest conduct’s scope, duration, and aggravating context are severe.

Key takeaways:

• Misappropriation “of any kind” harms the public and, when prolonged and deceitful, can merit the ultimate sanction.
• Prior, similar discipline and misconduct while suspended weigh heavily toward disbarment.
• Noncooperation independently aggravates discipline and undermines the integrity of the self-regulatory system.
• Minnesota will apply out-of-state rules to assess the violation but will apply Minnesota law to determine sanction; Minnesota-licensed attorneys remain fully answerable to Minnesota discipline for out-of-state conduct.

The opinion thus strengthens Minnesota’s disciplinary jurisprudence by emphasizing public protection, reinforcing the centrality of honesty to the legal profession, and signaling zero tolerance for repeated misappropriation and disregard of the disciplinary process.