No. 98-956
In the Supreme Court of the United States
OCTOBER TERM, 1998
CHARLES J. CANNON AND
WILLIAM L. BLAGG, PETITIONERS
v.
LAWRENCE G. WILLIAMS
ON PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
BRIEF FOR THE UNITED STATES
AS AMICUS CURIAE SUPPORTING PETITIONER
SETH P. WAXMAN
Solicitor General
Counsel of Record
LORETTA C. ARGRETT
Assistant Attorney General
GILBERT S. ROTHENBERG
THOMAS J. CLARK
Attorneys
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217
QUESTION PRESENTED
Whether an attorney who is publicly rebuked in findings entered in a sanctions
proceeding may appeal the order containing those findings in the absence
of a monetary or other formal coercive sanction.
In the Supreme Court of the United States
OCTOBER TERM, 1998
No. 98-956
CHARLES J. CANNON AND
WILLIAM L. BLAGG, PETITIONERS
v.
LAWRENCE G. WILLIAMS
ON PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
BRIEF FOR THE UNITED STATES
AS AMICUS CURIAE SUPPORTING PETITIONER
INTEREST OF THE UNITED STATES
This case addresses a question of importance on which the courts of appeals
are divided. Whether an attorney who is publicly rebuked in findings entered
in a sanctions proceeding may appeal the order containing those findings
in the absence of a monetary or other formal coercive sanction is a question
of recurring importance to the United States. As this Court has noted, "the
Government is a party to a far greater number of cases on a nationwide basis
than even the most litigious private entity." United States v. Mendoza,
464 U.S. 154, 159 (1984). The government's lawyers appear in court more
frequently than attorneys for any other litigant. Because it is not unusual
for disgruntled litigants to vent their frustrations at government counsel,
the United States has a strong interest in ensuring that the professional
reputations of its attorneys-such as the petitioners in this case-are not
harmed by unreviewable and unremediable public rebukes set forth in formal
findings entered in sanctions proceedings.
STATEMENT
1. Petitioners Cannon and Blagg are federal employees who, as attorneys,
represent the United States in tax litigation (Pet. App. 93a). In a published
order entered on April 14, 1995, the bankruptcy court imposed fines of $750
on each of the petitioners in connection with their representation of the
United States in a tax dispute in that court (id. at 88a, 98a). Although
the order was entered in response to a sanctions motion filed by the debtor,
the court ordered the fines to be paid to the clerk of the court (id. at
98a). The court further decreed that petitioners were not to seek reimbursement
for the fines from the United States (ibid.).
In findings entered in the published order that imposed the fines, the bankruptcy
court concluded that Blagg had an "attitude problem," that some
of his testimony was "pure baloney," that he had done "his
best * * * to obstruct the Plaintiff's discovery," and that his conduct
was "intentional, unprofessional, and unjustified" (Pet. App.
94a, 95a). The court similarly found that Cannon had shown a "disdain
for the Federal and Bankruptcy Rules of Procedure, his adversaries, and
Courts alike," and that his conduct in this case "places his performance
and credibility at about the same level as that of his colleague, William
Blagg" (id. at 97a). The court stated that the "egregious conduct
of the Defendant's agents" constituted "government lawyer misbehavior"
and concluded that their "actions were specifically calculated to impede
Plaintiff's attempts to obtain discovery material to which it was clearly
entitled" (id. at 96a-97a & n.9). The court stated that the personal
fines that it imposed on petitioners were necessary "to discourage
these and other government agents from engaging in 'big brother' abuses
of private sector litigants" (id. at 97a-98a).
In a second published opinion dated October 24, 1995, the bankruptcy court
vacated the $750 fine imposed on Blagg. Since Blagg was not a counsel of
record in the case, the court acknowledged that it lacked personal jurisdiction
to assess a fine against him (Pet. App. 69a, 78a). In vacating the fine,
however, the court stated that its "findings and conclusions regarding
Mr. Blagg's conduct and demeanor remain intact" (id. at 78a).
At the same time, the court altered its order with respect to Cannon. The
court concluded that, under Rule 37(b) of the Federal Rules of Civil Procedure,
the $750 fine that it had entered against Cannon in response to the debtor's
motion for sanctions should be paid to the debtor rather than to the Clerk
of the Court. The court reiterated its prior directive that Cannon was not
to seek reimbursement for this fine from the government (Pet. App. 86a).
2. The district court accepted jurisdiction over petitioners' appeal under
28 U.S.C. 158(a)(3) and vacated the $750 sanction against Cannon (Pet. App.
40a, 68a). The court noted that a discovery sanction may not be imposed
under Rule 37(b) unless a discovery order issued pursuant to Rule 37(a)
has been violated by the party to be sanctioned. Because no pertinent discovery
order issued under Rule 37(a) had been violated in this case, the sanctions
imposed by the bankruptcy court were invalid (Pet. App. 63a-64a).
The district court declined, however, to vacate the findings and the public
reprimand of petitioners in the bankruptcy court orders. The district court
justified the reprimand as an exercise of the bankruptcy court's "inherent
* * * ability" to "discipline the attorneys appearing before it"
(Pet. App. 65a). According to the district court, "[f]undamentally,
what the bankruptcy court heard was substantial evidence that Cannon and
Blagg, among others, made promises that they did not keep" (ibid.).
The district court concluded that "[w]hether conduct is in violation
of a standing discovery order or in breach of an informal agreement, the
evidence before the bankruptcy court fully supports the finding that appellants'
conduct was 'intentional, unprofessional, and unjustified'" and "justif[ied]
the bankruptcy court's finding of bad faith" (id. at 67a). In thus
"sustain[ing]" the findings of the bankruptcy court, the district
court concluded that "[p]ublishing specific findings of bad faith is
but one remedy the bankruptcy court had available." Pet. App. 65a-66a
(citing Bank of Nova Scotia v. United States, 487 U.S. 250, 263 (1988)).
3. A divided panel of the First Circuit declined to reach the merits of
petitioners' appeals (Pet. App. 2a-16a).1 Because the monetary sanctions
against both Blagg and Cannon had been vacated, the court held that there
was no appealable final order left for review (id. at 8a). The court concluded
that unless the lower court "expressly identified" its findings
of bad conduct by an attorney "as a reprimand" (id. at 13a), the
court of appeals would have no jurisdiction to review the underlying findings.2
In thus declining to accept jurisdiction, the court noted that the Fifth
Circuit has concluded that an attorney may appeal findings of misconduct
entered in a disciplinary proceeding even if a formal sanction was not entered
in such a proceeding (id. at 14a n.6 (citing Walker v. City of Mesquite,
129 F.3d 831 (1997))). The court, however, "respectfully decline[d]
to follow" the Fifth Circuit rule (ibid.).
Petitioners filed a timely petition for rehearing with a suggestion for
rehearing en banc, which the court denied (Pet. App. 35a-38a). Three of
the six active judges dissented from the denial of en banc review. The dissenting
judges noted that "[a] published reprimand is a punishment that is
in many cases far more serious than the imposition of monetary sanctions"
(id. at 36a) and that, if an appeal were not permitted in this context,
the aggrieved lawyer may "end up with a blot on his or her record that
will never be erased" (id. at 37a). The dissenting judges concluded
that it is "especially inappropriate" to make appealability turn
on the empty formalism of whether the trial judge has "expressly identified"
its formal public rebuke of an attorney as a "reprimand" (ibid.).
They further noted that mandamus relief is available only in "exceedingly
narrow" circumstances and therefore cannot function as a suitable "check
on judges who may be too free to issue unwarranted reprimands" (id.
at 38a).
DISCUSSION
In holding that an attorney may not obtain appellate review of a public
censure issued by a federal trial court unless the court accompanied that
censure with a coercive sanction or "expressly identified" the
censure "as a reprimand" (Pet. App. 13a), the decision in this
case directly conflicts with decisions of other circuits on an issue of
substantial recurring importance. Review by this Court is therefore warranted.
1. The "most precious asset" of attorneys "is their professional
reputation." Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 413
(1990) (Stevens, J., concurring in part and dissenting in part). By issuing
formal findings that discredit a lawyer's reputation, a federal judge may
inflict harm on an attorney that is far greater than the merely transient
injury that results from monetary sanctions. As the three dissenting members
of the court of appeals stated in this case, "[b]eing branded unethical
or incompetent by a federal judge can essentially destroy a lawyer's career"
(Pet. App. 36a).3
This Court concluded in Bank of Nova Scotia v. United States, 487 U.S. 250,
263 (1988), that such a public "branding" of an attorney in a
published reprimand is a permissible sanction for violation of a rule of
practice. Courts have consistently recognized that such published findings
that reprimand or chastise a lawyer constitute a "serious sanction"
(United States v. Isgro, 974 F.2d 1091, 1099 (9th Cir. 1992), cert. denied,
507 U.S. 985 (1993)) that is more injurious than any modest monetary fine.
See Martin v. Brown, 63 F.3d 1252, 1260 (3d Cir. 1995) ("the dollar
amounts of the sanctions imposed * * * are insignificant in comparison to
their stigmatic effect"); Walker v. City of Mesquite, 129 F.3d 831,
832 (5th Cir. 1997) (rejecting "out of hand" the idea that "an
attorney has more of a reason and interest in appealing the imposition of
a $100 fine than appealing a finding and declaration by a court that counsel
is an unprofessional lawyer prone to engage in blatant misconduct");
Pet. App. 36a ("Reputational damage alone may be worse for a lawyer
than any monetary sanction."). The courts of appeals are in disagreement,
however, as to whether an attorney may appeal a decision that contains formal
findings of censure unless the lower court has, in addition, imposed some
monetary or other coercive sanction against the attorney.
Most of the courts of appeals that have addressed the issue have held that
a lawyer may appeal a lower court's public declaration that the lawyer has
engaged in professional misconduct. For example, in Sullivan v. Committee
on Admissions & Grievances, 395 F.2d 954 (D.C. Cir. 1967), the court
of appeals allowed an appeal from a decision of the district court that
had found that an attorney had violated several ethical rules but which,
because the ethical issue was one of first impression, had not imposed any
formal sanctions against the attorney. Id. at 956. In an opinion by then-Judge
Burger, the attorney was permitted to appeal from that portion of the district
court's opinion "reflect
ing unfavorably on his professional conduct." Ibid. As the court of
appeals explained (ibid.):
[T]he District Court has determined that Appellant was guilty of proscribed
conduct and this determination plainly reflects adversely on his professional
reputation. In a sense Appellant's posture is not unlike that of an accused
who is found guilty but with penalties suspended. We conclude this gives
him standing to appeal.
Other courts of appeals have similarly permitted lawyers to appeal from
a public judicial censure of their professional conduct even in the absence
of a monetary or other coercive sanction. In Walker v. City of Mesquite,
129 F.3d at 832, a government attorney was permitted to appeal when he had
been "reprimanded sternly and found guilty of blatant misconduct."
The court stated that such a public reprimand of the attorney (id. at 832-833)
must be seen as a blot on [his] professional record with a potential to
limit his advancement in governmental service and impair his entering into
otherwise inviting private practice. We therefore conclude and hold that
the importance of an attorney's professional reputation, and the imperative
to defend it when necessary, obviates the need for a finding of monetary
liability or other punishment as a requisite for the appeal of a court order
finding professional misconduct.
Nothing in the Walker opinion suggests that the findings of misconduct in
the trial court's opinion had been formally or "expressly identified
as a reprimand" (Pet. App. 13a).4 Instead, the Fifth Circuit reasoned
that the trial "court order finding professional misconduct" by
itself constituted a sufficient public reprimand to permit appellate review
even in the absence of "a finding of monetary liability or other punishment"
(129 F.3d at 832-833).
Similarly, in Fromson v. Citiplate, Inc., 886 F.2d 1300, 1304 (Fed. Cir.
1989), the court of appeals allowed an attorney to appeal even though the
only "sanction" that had been entered was the trial court's finding
of professional misconduct.5 The court specifically noted in allowing the
appeal that there was "no judgment imposing any monetary or other sanction
on him." Ibid.
The Seventh Circuit, to the contrary, has held that a public judicial reprimand
of an attorney in a written decision does not provide a basis for appellate
review unless a monetary or other coercive sanction has been imposed. In
Bolte v. Home Insurance Co., 744 F.2d 572 (1984), the Seventh Circuit stated
that, if such appeals were allowed, "a breathtaking expansion in appellate
jurisdiction would be presaged." Id. at 573. The court concluded that,
"especially in an age of congested appellate dockets, * * * we do not
think they are within the scope of section 1291." Ibid. The court applied
that same reasoning in holding that it lacked jurisdiction to consider a
similar appeal in Clark Equipment Co. v. Lift Parts Manufacturing Co., 972
F.2d 817 (7th Cir. 1992).
In the present case, the court of appeals chose a course that falls between
the conflicting rules of the Seventh Circuit in Bolte and of the Fifth and
Federal Circuits in Walker and Fromson. Recognizing that "[s]anctions
are not limited to monetary imposts," the First Circuit concluded in
the present case that "[w]ords alone may suffice if they are expressly
identified as a reprimand" (Pet. App. 13a). The court held, however,
that an attorney may not appeal formal findings of misconduct entered by
the trial court if that court does not label its public censure "as
a reprimand" (ibid.). This intermediate rule adopted by the First Circuit
in this case has been adopted by no other court. It thus further splinters
the circuits on this recurring issue.
In adopting its unique rule, the court of appeals expressed a concern that,
if attorneys were permitted to appeal from anything less than a formal censure
that the trial court had expressly labeled as a "reprimand," the
result "would be tantamount to declaring open season on trial judges"
(Pet. App. 12a). But lawyers in the District of Columbia, Federal, and Fifth
Circuits have been permitted to appeal from a trial court's public findings
of professional misconduct, and there has been no "open season on trial
judges" in those circuits. Moreover, contrary to the fears expressed
by the Seventh Circuit in Bolte, 744 F.2d at 573, there has also been no
"breathtaking expansion" of litigation concerning the public censure
of lawyers in these circuits. As the dissenting judges in this case explained
in refuting a similar concern expressed by the majority below (Pet. App.
38a):
Any lawyer appealing a reprimand takes the risk that [the court of appeals],
reaching the merits, will agree that the sanction is justified-thus giving
the sanction far more force than it would have had if it had come from a
trial judge unendorsed by a reviewing court. Accordingly, the lawyer's self-interest
dictates that an appeal be taken only in cases in which the sanction is
particularly damaging to the lawyer's reputation and particularly undeserved.
When a court publicly rebukes a lawyer, the censure inflicts a lasting harm
to the lawyer's professional standing and reputation. That harm is palpable
whether or not the public rebuke is formally labeled, or "expressly
identified," as a "reprimand" by the lower court. The line
that the court sought to draw between appealable and non-appealable orders
is not related either to whether fundamental harm was inflicted on the attorney
or to the question whether a "final decision" was entered by the
lower court. When, as in the present case, the order was entered as the
court's final decision in a sanctions proceeding that is collateral to the
main action, the attorney injured by that order should be permitted to appeal.
Whether that final decision contains a sanction that the lower court formally
labeled and "expressly identified as a reprimand" (Pet. App. 13a)
or, instead, contains formal findings of professional misconduct that (however
labeled) represent a "sanction" for professional misconduct, the
injury in fact suffered by the attorney from that final decision on this
collateral matter supports appellate jurisdiction.6
We do not advocate a rule that expands the jurisdiction of the courts of
appeals by ignoring the requirement of a "final decision[]" under
28 U.S.C. 1291. Instead, it is our view that this fundamental requirement
of appellate jurisdiction is satisfied when (as in the present case) a published
reprimand that functionally operates as a sanction is issued as a final
decision in a sanctions proceeding.
2. The recurring question presented in this case has created confusion among
the lower courts and has resulted in no fewer than three different rules
in the courts of appeals. Both the majority and the dissenting judges recognized
that the jurisdictional issue presented in this case is an "important
question" of federal law that has "exceptional importance"
(Pet. App. 2a, 36a).7 Review by this Court is warranted to resolve the continuing
conflict among the courts of appeals on this important and recurring jurisdictional
issue.
CONCLUSION
The petition for a writ of certiorari should be granted.
Respectfully submitted.
SETH P. WAXMAN
Solicitor General
LORETTA C. ARGRETT
Assistant Attorney General
GILBERT S. ROTHENBERG
THOMAS J. CLARK
Attorneys
JANUARY 1999
1 The courts of appeals have appellate jurisdiction over district court
decisions in bankruptcy cases under 28 U.S.C. 158(d) and 28 U.S.C. 1291.
See Connecticut Nat'l Bank v. Germain, 503 U.S. 249, 251-254 (1992).
2 On the merits, petitioners sought to dispute the basic findings of the
bankruptcy court and to contend that they had been denied due process in
the issuance of sanctions without sufficient particularized notice of the
conduct alleged to be sanctionable or the standard by which their conduct
would be judged. See, e.g., Ted Lapidus, S.A. v. Vann, 112 F.3d 91, 96 (2d
Cir.), cert. denied, 118 S. Ct. 337 (1997).
3 "A lawyer's reputation for integrity, thoroughness and competence
is his or her bread and butter." FDIC v. Tekfen Constr. & Installation
Co., 847 F.2d 440, 444 (7th Cir. 1988).
4 In Walker, the trial court had entered an order making findings of serious
professional misconduct by three Department of Justice lawyers and inviting
those attorneys to respond before a final order concerning sanctions was
to be imposed. After further submissions, the trial court announced at a
hearing that it was deleting the findings against two of the three lawyers,
but the court refused to vacate the prior opinion or otherwise exonerate
one of the lawyers. The court then entered a final order in which it reaffirmed
the findings of misconduct against that lawyer but stated that no further
action would be taken. The Fifth Circuit treated the trial court's written
findings, by themselves, as constituting the court's "reprimand."
See 129 F.3d at 832.
5 In the Fromson case, the Federal Circuit relied on Penthouse International,
Ltd. v. Playboy Enterprises, Inc., 663 F.2d 371, 373 (1981), in which the
Second Circuit allowed an attorney (along with his client) to appeal a formal
sanction of dismissal that had been entered by the district court for discovery
abuse and misrepresentation of material facts. The court in Penthouse upheld
the formal sanction of dismissal and remanded the case for "further
consideration" of "whether reasonable costs and expenses should
be awarded" to the defendant. Ibid.
6 As Judge Rosenn stated in dissent in this case, "the substance of
the published reprimand and the circumstances attending its declaration
by the court give it all of the characteristics of an order imposing a sanction"
(Pet. App. 16a).
7 The possible availability of mandamus is not a suitable alternative to
appeal. Mandamus is "a drastic remedy" to be applied only in the
most egregious circumstances "amounting to a judicial usurpation of
power." In re Chambers Dev. Co., 148 F.3d 214, 223 (3d Cir. 1998).
The standard for review in a mandamus case is far "narrower than in
an ordinary appeal." In re Sandahl, 980 F.2d 1118, 1120 (7th Cir. 1992).
As the First Circuit noted in In re Bushkin Associates, Inc., 864 F.2d 241,
245 (1989), "mandamus does not lie to control run-of-mine misuses of
judicial discretion." The utility of mandamus as a remedy is further
undermined by the fact that "it is within a court's discretion to refrain
from issuing the writ even when the requirements for mandamus are technically
satisfied." In re Chambers Dev. Co., 148 F.3d at 223.