1) ABA/BNA Lawyers' Manual on Professional Conduct

Court Decisions

May 26, 1999

TRIAL CONDUCT: FIRST CIRCUIT HOLDS FAST TO ITS POSITION AGAINST QUICK

APPEALS

OF SANCTION ORDERS

. Federal district court order that imposes sanctions on attorneys for

misconduct falling short of contempt is not immediately appealable.

A $4,000 sanction levied against lawyers who violated a district court's

order to refrain from uncivil conduct may not be appealed before the

litigation

in which the misconduct occurred is resolved, the U.S. Court of Appeals for

the

First Circuit made clear May 7 (United States v. Kouri-Perez,1st Cir., No.

98-

1612, 5/7/99).

Dismissing the lawyers' interlocutory appeal for lack of jurisdiction,

the

court concluded that the sanctions order was neither an appealable "final

judgment" under 28 U.S.C. Section 1291 nor was it immediately appealable

under the collateral order doctrine set forth in Cohen v. Beneficial

Industries

Loan Corp., 337 U.S. 541 (1949).

'Civility Order' Violated.

In what the federal district court characterized as an "acrimonious"

criminal prosecution, defense lawyers Benny Frankie Cerezo, Joaquin

Monserrate-

Matienzo, Francisco Rebollo-Casalduc, and Yolanda Collazo were ordered to

pay

an aggregate monetary fine of $4,000 for violating the district court's

order

to refrain from making disparaging personal remarks or engaging in

"acrimonious

conduct."

The lawyers were sanctioned for announcing in a pretrial motion that was

broadcast by the local media that a potential witness had been threatened by

the prosecutor and that the witness was afraid of the prosecutor because she

was the granddaughter of a former Dominican Republic dictator. The

objectionable motion also suggested that the prosecutor was using an assumed

name.

The district court emphasized that it was not exercising its criminal or

civil contempt powers but was instead imposing the sanction pursuant to

either

its inherent powers or else 28 U.S.C. Section 1927.

The lawyers were directed to pay the $4,000 within 10 days, under penalty

civil contempt. After they paid the sanction, they initiated their

interlocutory appeal.

Circuits Split Over Issue.

The court of appeals, in an opinion by Judge Conrad K. Cyr, acknowledged

split in the circuits on the issue of whether monetary sanctions leveled

against lawyers are sufficiently "final" to be immediately appealable, but

sided with those courts that do not allow immediate appeal. This position,

Cyr

pointed out, is consistent with the First Circuit's stance in In re Licht &

Semonoff, 796 F.2d 564 (1st Cir. 1986), where the court held that a

discovery sanction against a law firm was not final for purposes of appeal

under Section 1291 or Cohen.

The lawyers argued that the sanction was final and immediately appealable

because it was, in essence, a criminal contempt order. But the court

rejected

this argument, pointing out that the district court expressly relied on its

"inherent powers" to manage cases and handle litigation.

The court also rejected the lawyers' effort to distinguish Licht on

the ground that Licht was a civil case and the instant litigation was

criminal.

Federal district courts exercise their inherent power to impose sanctions

both civil and criminal actions, the court said. Moreover, the court added,

is arguable that prohibiting time-consuming interlocutory appeals in

criminal

cases is far more compelling than barring such appeals in civil cases, given

the premium that is placed on speedy resolution of criminal trials.

EP{3}appellate panel noted. Moreover, the fine did not cause financial

hardship to

the lawyers and was paid into the court fund--thus eliminating the risk of

dissipation.

. Harm not irreparable. The lawyers argued that they would suffer

irreparable harm if the sanction appeals were delayed until final judgment

because the order placed a professional stigma on them, created a chilling

effect on their ability to advocate vigorously for the client, and put them

a potential conflict of interest if the case resulted in acquittal. But the

court found none of these arguments persuasive.

Stigma naturally attends a sanctions order, the court observed, in part

because that is what the order is designed to do. Further, the court was not

persuaded that the public and legal profession did not understand that an

appellate court could overturn a sanctions order. As for the chilling effect

vigorous advocacy, the court reminded counsel of their ethical obligation to

represent clients energetically. Finally, the court found no reason why the

lawyers could not effectively challenge the sanction order once the case was

over--even if the case was terminated without a final appeal.

. No significant or unsettled issues. Lastly, the court rejected the

lawyers' contention that the sanction appeals involved important legal

issues

such as the possible violation of their procedural due process rights.

Adopting

this definition of "significant" issues, the court explained, would allow

sanctioned counsel to avoid Section 1291's finality requirement by merely

tacking on a due-process violation claim.

15 LMPC 214

2) ABA/BNA Lawyers' Manual on Professional Conduct

News

April 28, 1999

TRIAL CONDUCT: SUPREME COURT HEARS ARGUMENT ON WHETHER SANCTION ORDERS ARE

IMMEDIATELY APPEALABLE

For years the federal courts of appeals have been in disagreement as to

when

a lawyer who has been sanctioned for litigation misconduct may appeal the

sanctions order. Some say immediately; others say immediately, but only if

the

lawyer drops out of the case or if the appeal doesn't present issues about

the

merits of the underlying litigation; and some make the sanctioned lawyer

wait

until the case has concluded.

Now the U.S. Supreme Court may finally clear the way to a uniform answer

this question, hearing argument April 19 in a Sixth Circuit case that denied

attorney the opportunity to appeal a sanction order that had been entered

against her until final judgment was rendered in the client's litigation

(Cunningham v. Hamilton County, Ohio,U.S., No. 98-727, argued 4/19/99).

Thomas C. Goldstein of the Washington, D.C., firm Boies & Schiller urged

the

Supreme Court to adopt a consistent rule that would allow lawyers to appeal

court-ordered sanctions immediately. Arguing on behalf of the sanctioned

lawyer, Goldstein suggested that it makes no sense to permit lawyers to seek

immediate appeal when their misconduct leads to a contempt order but to

refuse

to allow interlocutory appeal when the misconduct is punished with a

sanction.

But John J. Arnold, an assistant prosecuting attorney for the respondent

Hamilton County, Ohio, advised against carving out yet another exception to

the

general prohibition against interlocutory appeals. Arnold warned that

allowing

interlocutory appeal of attorney sanctions orders would not only needlessly

clog appellate dockets but also "hinder, delay, and disrupt" the underlying

trials.

'Better View' to Wait Until Final Judgment.

The petitioner, attorney Teresa L. Cunningham, filed a civil rights

action

against Hamilton County and some of its correctional facility staff alleging

that they were responsible for the wrongful death of her client's son, who

committed suicide while in the defendants' custody.

The case quickly degenerated into a series of discovery squabbles, and

the

district court ordered Cunningham to pay the defendants more than $3,800 in

fees and costs as a sanction for discovery violations. Finding that

Cunningham

was a potential witness in the case, the court also disqualified her from

continuing to represent the plaintiff. The court stayed its sanctions order

while Cunningham appealed.

A divided panel of the U.S. Court of Appeals for the Sixth Circuit

dismissed

Cunningham's appeal for lack of jurisdiction. The court acknowledged a split

among the circuits on the issue, but concluded that the "better view" is to

compel a sanctioned lawyer to wait until final judgment before filing an

appeal

of the sanctions order. 144 F.3d 418, 14 Law. Man. Prof. Conduct 249 (6th

Cir. 1998).

The majority conceded that the collateral order doctrine carves out a

limited exception to the final judgment rule for certain interlocutory

orders

that finally determine claims of right collateral to the action and that are

too important to defer. See Cohen v. Beneficial Industrial Loan Corp.,

337 U.S. 541 (1949). But the court concluded that the instant situation did

not fit

within the Cohen exception because Cunningham's claim for relief was not

sufficiently independent from the underlying case.

Responding to the dissent's insistence that this case was "lexically

different" because Cunningham had been disqualified, the majority said that

there should be no distinction between a participating and nonparticipating

attorney. Under Richardson-Merrell Inc. v. Koller, 472 U.S. 424 (1985), the

majority pointed out, the disqualification order itself would not be

immediately appealable.

Finally, the Sixth Circuit suggested that Cunningham's appeal did not

meet

Cohen 's third factor--a showing that the sanctions order would be

effectively

unreviewable absent interlocutory review.

Allow Immediate Review.

Arguing on Cunningham's behalf before the Supreme Court, Goldstein

asserted

that the sanction imposed on her was immediately appealable because it was

final and collateral to the merits of the case, and was effectively

unreviewable on appeal from the final judgment because Cunningham was not a

party to the suit and therefore was prohibited from appealing the final

judgment.

Justice Ruth Bader Ginsburg reminded Goldstein that "lots of orders are

not

immediately reviewable." That's true, Goldstein conceded, because

interlocutory

orders directed at the litigants effectively merge into the final judgment.

But, Goldstein continued, interlocutory orders directed at nonparties are

different because they do not merge into the final judgment.

In this case, Goldstein said, forcing the lawyer to wait until the final

judgment makes the sanction order "effectively unreviewable." For one thing,

added, it is not clear that there ever will be a final disposition. The

client's case might be settled or it may simply "languish." In the meantime,

he said, the attorney suffers very real injury.

But wasn't the sanctions order stayed? asked Chief Justice William H.

Rehnquist. A stay would remove some of the injury, he observed.

Goldstein agreed that it would be less of an injury if the order was

entered

at the end of the case but suggested that it is more burdensome on the

lawyer

if the order is entered immediately.

"Why should we make it so complicated?" Justice Steven G. Breyer asked.

Courts of appeal, he said, have enough to do without trying to figure out

when

or whether to allow lawyers to appeal mid-trial sanctions. "Why not have a

simple rule for everybody," Breyer added, that requires the appeal to be

taken

at the end of the case? If the lawyers don't like it, he continued, they

should

just ask for a stay.

Exploring other alternatives available to the sanctioned lawyer, Justice

Anthony M. Kennedy wanted to know whether a lawyer couldn't just seek a writ

mandamus in extreme cases where, for example, the lawyer was fined $1

million.

Goldstein replied that this was not a feasible alternative since writs of

mandamus are used only in extraordinary situations in which it is necessary

confine a lower court to a lawful exercise of its jurisdiction.

Ginsburg wondered if the issue of appealing sanctions orders could be

better

sorted out through traditional rulemaking. Goldstein responded that the

"dozen

splits" in the circuit courts on this issue warranted the court's

intervention.

Justice Antonin Scalia wanted to know what "textual authority"

Goldstein was asking the court to rely on. Goldstein noted that

28 U.S.C. Section 1292(b) permits an appeal from an interlocutory order if

the trial

court certifies that the order raises a controlling question of law as to

which

there is substantial ground for difference of opinion, and if the appellate

court exercises its discretion to hear the appeal. Moreover, Goldstein

suggested that Cunningham's situation satisfied the criteria set out in

Cohen.

Cohen is merely "judicial elaboration," Scalia responded; the Cohen

factors

really have more to do with practicality. Goldstein agreed, but added that

issues of practicality favored Cunningham.

Do you acknowledge a Cohen problem? Kennedy asked. "We believe we fit

within

Cohen," Goldstein replied.

Contempt Versus Sanctions.

Justice John Paul Stevens asked Goldstein to elaborate on the difference

between contempt and sanction orders.

If it had been a contempt order, Goldstein stated, there is no question

that

Cunningham could have appealed it immediately. It is our position, he added,

that there is no practical distinction between contempt and sanctions.

Indeed, Goldstein continued, it seems like "bad policy" to tell

sanctioned lawyers that the only way to get immediate relief is to go "one

step further"

and misbehave even more so that they can get held in contempt and then

appeal.

Both Rehnquist and Scalia ridiculed the idea that a lawyer might put

herself

in contempt just so she could take an immediate appeal. I suppose the lawyer

might commit suicide too, Scalia gibed.

Breyer asked about the problems implicated when the merits of the case

are

entangled with the issues surrounding the sanction. For example, he said,

suppose the lawyer is sanctioned "for asking too many questions." On appeal,

his defense is going to be: Your honor, "if you really understood the case,"

would be clear that the conduct was not opprobrious. Then the lawyers would

inevitably start arguing over what the underlying case was about, Breyer

predicted.

Goldstein suggested that the concern regarding entanglement of issues was

overstated. The issue on the sanctions, he said, is discrete: did the lawyer

act unreasonably? According to Goldstein, most circuits that have

entertained

the question have concluded that the merits were not too intertwined with

the

sanctions issues.

Case Not Within Collateral Order Exception.

Presenting the case for the respondent Hamilton County, Arnold insisted

that an order imposing sanctions on a party's attorney is neither a final

order that

can be appealed pursuant to 28 U.S.C. Section 1291 nor eligible for the

Cohen collateral order exception.

Justice Sandra Day O'Connor inquired about the effect Cunningham's

removal

from the case had on the analysis. Arnold replied that the lawyer's removal

should not affect the jurisdictional question.

Responding to Goldstein's suggestion that a case could remain in limbo

and might never result in a final disposition, Arnold declared it his

experience that every case becomes final at some point.

That may be true, O'Connor responded, but a lawyer who is removed would

not

necessarily receive notice of the final disposition.

Arnold agreed, but said that the burden is properly on the sanctioned

lawyer

to monitor the progress of the case, "with, perhaps, a tickler system to

check

the case every so often." Conceding that this was a burden on counsel,

Arnold

argued that as a policy matter it was less burdensome than forcing courts of

appeal to review multiple interlocutory appeals.

Isn't a sanctions case really analogous to a contempt order? Ginsburg

asked.

And if that is the case, she added, why shouldn't Hickman v. Taylor,

329 U.S. 495 (1947), control? (Hickman allowed an immediate appeal by a

lawyer who

had been cited for contempt for refusing to answer an interrogatory.)

Arnold reiterated his belief that there is a compelling interest in

finality

and the avoidance of multiple appeals.

Do you acknowledge that contempt is immediately appealable? Scalia asked.

Not always, Arnold replied. So you are arguing against immediate appeals of

interlocutory contempt orders too, Scalia said, adding: "I'm inclined to

agree."

Contempt is not always immediately appealable, said Arnold. For example,

claimed, in some situations the two interests are so congruent that the

contempt issue and the merits should not be heard separately.

Kennedy suggested that there must be some relief for those situations in

which "the court's patience runs out" and the judge imposes an unfair

penalty.

There may be some financial hardship, Arnold acknowledged, but in the long

run

it is more practical and efficient to impose the rule of finality.

But there has to be some end to it, Stevens said. Say, for instance, a

lawyer asserts a privilege in response to a court order and is repeatedly

sanctioned each time the privilege is asserted; there must be a way to

review

it. That may be one factor to balance, Arnold conceded.

Breyer asked Arnold whether any judges have ever refused to stay

execution

of a sanction pending appeal. Arnold said he knew of none. Well, said

Breyer,

suppose the judge does refuse to stay, could you get a writ? Yes, Arnold

replied.

Fair Hearing After Trial?

Addressing Arnold's contention that Cunningham's route of appeal should

come

through 28 U.S.C. Section 1292(b), Ginsburg pointed out that the scope of

Section 1292(b) is very limited. That's right, Arnold agreed. But that makes

even clearer, he said, that Congress did not think this was the type of

right

that needs to be immediately addressed.

According to Arnold, the ultimate question under Cohen and its progeny

is:

Can the petitioner get a fair hearing if she has to wait until the trial

comes

to an end?

"I don't see the harm in adopting the petitioner's position," Scalia

commented. Then judges would know to wait until the end of trial before

imposing a sanction.

Arnold said he didn't think the mere threat of a sanction was very

effective. "It's not a threat," Scalia said, "it's a promise." The judge is

saying I will sanction you at the end of the case, Scalia explained.

I think a lot of lawyers would listen, Stevens interjected; I know I

would.

However, Arnold remained skeptical that this would deter many lawyers from

misbehaving.

Arnold further suggested that allowing the lawyer to appeal the sanctions

order immediately would inevitably lead to appeals in countless

subcategories

of cases involving sanctions imposed against the parties, solely against

counsel, or jointly against the parties and counsel. If the client and the

lawyer are jointly sanctioned, he added, you would have the incongruous

result

of the lawyer being allowed to appeal immediately but the client having to

wait

until the end of trial.

He further suggested that the immediate appeal rule would deprive the

court

of the ability to limit the appeal of trivial nonmonetary orders.

The more rational approach, Arnold said, is to refuse to expand the

narrow

exception recognized in Cohen and to continue to adhere strictly to the

final

judgment rule.

'Parade of Horribles.'

During rebuttal, Rehnquist asked Goldstein what cases he relied on for

the

proposition that immediate appeal is always available in contempt cases.

Hickman, Goldstein replied. But Hickman says nothing about jurisdiction,

Rehnquist observed. When Stevens suggested that there are many cases

standing

for the proposition that contempt orders are immediately reviewable,

Rehnquist

asked again: "What cases?"

There are cases, Stevens replied, but I just can't give you the names

right

now. That sounds like a law school exam answer, Rehnquist quipped.

Goldstein finished by pointing out that the "parade of horribles" Arnold

predicted had not come to pass in those circuits that allow immediate appeal

attorney sanction orders.

15 LMPC 169

END OF DOCUMENT

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3) University of Chicago Law Review

61 UCHILR 1627

Fall 1994

Comment

*1627 THE SETTLED Search Term Begin SANCTION: Search Term End

POST-SETTLEMENT Search Term Begin APPEAL Search Term End AND VACATUR OF

ATTORNEY

Search Term Begin SANCTIONS Search Term End PAYABLE TO AN OPPONENT

David Scharf [FNd]

4) Wayne Law Review

46 WAYNLR 289

Spring, 2000

Notes

*289 HOW LONG SHOULD BAD ATTORNEYS HAVE TO WAIT? THE IMMEDIATE APPEAL OF

ATTORNEY SANCTIONS UNDER THE COLLATERAL ORDER DOCTRINE

Laura C. Baucus