Failure to Report Foreign Discipline as Aggravation Warranting an Upward Departure in Reciprocal Proceedings – Commentary on Matter of Osterbye (2025 NY Slip Op 03254)

1. Introduction

Matter of Osterbye is a disciplinary decision of the Appellate Division, First Department, rendered on 29 May 2025, concerning New York attorney Raymond C. Osterbye. The Attorney Grievance Committee (AGC) sought reciprocal discipline after the Supreme Court of New Jersey issued a six-month suspension against the respondent for a series of record-keeping, trust-account, and non-cooperation violations. The central issue was whether New York should simply mirror the foreign sanction or impose a more severe penalty, taking into account Mr. Osterbye’s failure to notify the New York authorities of earlier New Jersey reprimands as required by 22 NYCRR 1240.13(d). Ultimately, the Court suspended him for one year – an “upward departure” from the six-month New Jersey suspension – thereby crystallising a principle that deliberate or reckless non-reporting of foreign discipline constitutes an aggravating factor justifying harsher sanctions in New York.

2. Summary of the Judgment

The respondent had twice been publicly reprimanded in New Jersey (2020, 2022) and was later suspended for six months (effective 21 Aug 2024) for continuing non-compliance and lack of cooperation.
He failed to inform New York’s AGC of the reprimands, contravening 22 NYCRR 1240.13(d).
In reciprocal-discipline proceedings, the respondent offered no viable defence under the limited exceptions of 22 NYCRR 1240.13(b) (due process, infirmity of proof, or non-misconduct under New York law).
While New York generally accords “significant weight” to the sanction imposed where the misconduct occurred, the Court found “rare” circumstances warranting departure: the undisclosed reprimands and respondent’s pattern of disregard for disciplinary bodies.
Invoking precedent (notably Matter of Gilbert), the Court imposed a one-year suspension, commencing 30 days after the order, and denied the respondent’s request to delay discipline until reinstatement in New Jersey.

3. Analysis

3.1 Precedents Cited

The decision is anchored in a line of First Department cases outlining the standards for reciprocal discipline and circumstances justifying deviation from the foreign sanction.

Matter of Blumenthal, 165 AD3d 85 (1st Dept 2018) – affirms the “significant weight” rule but recognises discretionary departure.
Matter of Jaffe, 78 AD3d 152 (1st Dept 2010) – articulates the comity principle: New York usually mirrors the foreign sanction.
Matter of McHallam, 160 AD3d 89 (1st Dept 2018) & Matter of Lowell, 14 AD3d 41 (1st Dept 2004) – describe “rare instances” permitting a harsher penalty.
Matter of Milara, 194 AD3d 108 (1st Dept 2021) – lists the three exclusive defences under 22 NYCRR 1240.13(b).
Matter of Gilbert, 268 AD2d 67 (1st Dept 2000) – pivotal authority holding that failing to report foreign discipline itself warrants an upward departure; directly relied upon here.

3.2 Legal Reasoning

The Court followed a two-step analytical path:

Threshold Reciprocity Test. It confirmed that the respondent had no viable defence under 22 NYCRR 1240.13(b). He had notice, there was no infirmity of proof, and the underlying conduct (bookkeeping failures, non-cooperation) is also misconduct under New York’s Rules of Professional Conduct (Rules 1.15(d)(2) & 8.4(d)).
Sanction Calibration. Normally, New York would impose the same six-month suspension. However, the Court identified aggravating factors:
- Two prior reprimands were never disclosed.
- Pattern of non-cooperation with both New Jersey’s OAE and New York’s AGC.
- Prior New York administrative suspension for failure to register (2022).
Relying on Gilbert, the panel ruled that non-reporting “frustrates New York oversight” and justifies a stiffer penalty – one year.

3.3 Impact of the Judgment

The decision bolsters an emerging doctrine: the duty to self-report foreign discipline in New York is not a mere procedural formality; breach of that duty is substantive aggravation that can increase sanctions beyond those imposed elsewhere. Consequences include:

Practitioners admitted in multiple jurisdictions must implement compliance protocols to track and notify New York within 30 days of any foreign discipline (22 NYCRR 1240.13(d)).
Attorney‐discipline defence counsel will need to address potential “Gilbert/Osterbye aggravation” early, possibly negotiating joint filing of reports to mitigate exposure.
Future reciprocal cases may see more frequent departures where non-reporting is shown, signalling stricter enforcement against “disciplinary hiding.”
Grievance Committees may proactively search foreign rulings to identify unreported discipline.

4. Complex Concepts Simplified

Reciprocal Discipline – A mechanism whereby disciplinary action taken against an attorney in one jurisdiction is recognised in another. New York’s rule (22 NYCRR 1240.13) generally mirrors the foreign sanction unless specific defences are proven.
Upward Departure – Imposing a harsher sanction than that ordered by the originating jurisdiction.
Commingling / Negligent Misappropriation – Mixing client funds with personal or office funds, or mishandling them through neglect rather than intent to steal; nevertheless a serious trust-account violation.
Bookkeeping Rule (NY RPC 1.15) – Requires attorneys to maintain detailed, contemporaneous records of all client and escrow funds.
Non-Cooperation (RPC 8.1(b)) – Failure to respond to lawful demands for information from disciplinary authorities.

5. Conclusion

Matter of Osterbye cements a salient principle in New York disciplinary jurisprudence: an attorney who neglects the mandatory duty to report foreign discipline risks a sanction more severe than the one imposed elsewhere. By extending a six-month New Jersey suspension to one year, the First Department sends a clear deterrent message and clarifies that transparency with disciplinary bodies is vital to the integrity of the profession. Lawyers practising across state lines must treat the reporting obligation as a compliance imperative, failing which they may encounter the heightened penalties now forewarned by Osterbye.