Circuit Split Watch: When Sanctioned Attorneys Can't Pay

This article first appeared in the August 29, 2012, issue of the National Law Journal’s Supreme Court Insider.

Federal appellate courts are split over whether money sanctions issued against an attorney can be reduced when he cannot afford to pay. The question has also split conservative and liberal thought leaders, in unexpected ways. The Supreme Court, which recently decided another costs case, could be asked to resolve the split.

Under 28 U.S.C. § 1927, an attorney “who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.”

Chief Judge Frank Easterbrook of the U.S. Court of Appeals for the 7th Circuit, a respected conservative jurist, has at least two suggestions for errant attorneys who cannot afford to pay: Take it up with the bankruptcy court and possibly find a new career.

In 2009, Easterbrook, writing for a unanimous three-judge panel in Shales v. General Chauffeurs Local Union No. 330, explained that a § 1927 violation “is a form of intentional tort….Damages depend on the victim’s loss, not the wrongdoer’s resources.” If the attorney cannot pay the sanction, he could seek relief in bankruptcy. Further, if the attorney “is poor because people are not willing to pay much, or at all, for his services, then he should turn from the practice of law to some other endeavor where he will do less harm.”

Last month, 9th Circuit Judge Stephen Reinhardt, who has been called a “liberal lion,” rejected the 7th Circuit’s conclusion in Haynes v. City & County of San Francisco. The statute says that the court “may” require an attorney to pay costs, not “must” or “shall”—a clear signal to Reinhardt and the other two panel members that the lower court has discretion to order and adjust costs. He noted that the 2nd Circuit also adopted this “plain meaning” in Oliveri v. Thompson, a 1986 case.

Ordering “sanctions in an amount many times greater than the attorney will ever be able to pay” can be “a futile gesture that does little” to make victims whole, Reinhardt reasoned.

Ironically, the Reinhardt and Easterbrook approaches could be seen as an ideological swap, with the liberal Reinhardt playing the role of textualist and the conservative Easterbrook looking for context outside the words.

While costs will never grab the headlines in the way that affirmative action, same-sex marriage, and other cases in the Supreme Court’s current inbox will, they have gotten the Court’s attention as a day-to-day part of litigation that affects many people.

In May, the Supreme Court decided a costs case involving a different statute. Taniguchi v. Kan Pacific Saipan, Ltd. clarified that costs awarded for interpreters include only oral translation expenses. Like the pending attorney-costs split, Taniguchi also involved a split between the 7th and 9th Circuits—resolved in the 7th Circuit’s favor. (This column previously highlighted Taniguchi.)

Before the attorney-costs issue can reach the Supreme Court, though, there may be a rehearing en banc.

The sanctioned attorney has indicated that he intends to seek rehearing. Although he won on the possible reduction of costs (to be determined on remand by the district court), the 9th Circuit opinion also said that he “engaged in a wide variety of incompetent and unprofessional actions.” The circuit issued a separate unpublished memorandum opinion to that effect.

The 9th Circuit has set an October deadline for his petition.

Circuit Split Watch: Help Wanted for Crack Sentencing Appeals?

This article first appeared in the October 17, 2011, issue of the National Law Journal’s Supreme Court Insider.

Congress passed the Fair Sentencing Act of 2010 to reduce the vast and heavily criticized disparity between crack cocaine and powder cocaine sentences.

Implementing the FSA has not been easy, though, as federal appeals courts have split over when it applies. Two of these cases could reach the Supreme Court soon as petitions for certiorari, and a third is already there.

In July, the 7th Circuit decided United States v. Holcomb, a consolidation of appeals involving four defendants. Each committed crack offenses before the FSA became law, but was sentenced after, receiving lower FSA sentences. For one defendant, the difference was 33 months (within the FSA range) versus 120 months (pre-FSA mandatory minimum).

A three-judge 7th Circuit panel, citing prior circuit precedent, found that the FSA only applies to offenses committed after it became law and that the sentencing date is irrelevant. As a result, the defendants would get the higher sentences. This had been the federal government’s position.

About a week later, though, Attorney General Eric Holder issued a “Memorandum for All Federal Prosecutors” that rejected this approach. Originally, prosecutors had been told that the FSA only applied to post-FSA offenses. However, as Holder explained, confusion in the courts and “the serious impact on the criminal justice system of continuing to impose unfair penalties” had caused him to review and change the policy. Going forward, the FSA would apply to post-FSA sentences, regardless of the offense date.

After the government notified the 7th Circuit of the policy change, the court denied rehearing en banc sua sponte. The vote was a tie, 5-5, leaving the earlier decision intact.

Chief Judge Frank Easterbrook, writing for the four other judges opposed to rehearing en banc, focused on 1 U.S.C. § 109. Under that section, repealing a statute does not “extinguish any penalty” of the old statute, except where expressly stated in the “repealing Act.” Put another way, the FSA is not retroactive unless it says so. And it doesn’t, Easterbrook concluded. He also saw no implied retroactivity.

Judge Ann Claire Williams, joined by the four other judges who voted for rehearing, called this result “wrong” and “nonsensical.” Judge Richard Posner, who joined Williams, but also wrote a separate individual dissent, went further, deeming it “gratuitously silly” and “perverse.”

The FSA, Williams noted, gives the Sentencing Commission “emergency authority” to promulgate guidelines consistent with the FSA “as soon as practicable.” Also, the FSA states that it is “restor[ing] fairness to Federal cocaine sentencing.” Williams questioned why Congress would rush to replace admittedly unfair sentences, only to continue imposing them.

As both sides pointed out, there is a 3-2 split among the federal appellate courts on when to apply the FSA. The 1st, 3rd and 11th Circuits are in sync with Williams’ opinion, while the 8th Circuit squares with the 7th Circuit holding defended by Easterbrook.

The 7th and 8th Circuit cases are likely to be appealed to the Supreme Court soon. Like the 7th Circuit, the 8th Circuit recently denied rehearing en banc. Also, an earlier 7th Circuit case on FSA retroactivity, Fisher v. United States, is already pending before the Court as a petition. It was distributed for the September 26 conference, but the Court took no action, perhaps waiting in anticipation of further petitions. (See also Dorsey v. United States, consolidated with Fisher below.)

Because of the circuit split, and the practical implications for many defendants, the Supreme Court may decide to grant certiorari. If so, the scenario will be different than most, since the winner in the 7th and 8th Circuits, the government, now disagrees with those decisions. In such cases, the Court can appoint an attorney to defend the judgments below. Often, as Legal Times has reported, former Supreme Court clerks get this nod.

The government has not appealed its losses in the 1st, 3rd and 11th Circuits, but the latter is still pending. On October 4, the 11th Circuit ordered rehearing en banc sua sponte.

Judges Series: Chief Judge Frank Easterbrook

*Seventh Circuit Bar Association website (for more video clips of Chief Judge Easterbrook, and other judges, click here)

Chief Judge Frank Easterbrook of the U.S. Court of Appeals for the Seventh Circuit is one of the best known and most respected federal appellate judges. He has written and been written about extensively, e.g., here, here, here, here, and here-first page only, and given many speeches and presentations, e.g., here and here-at 29-34, 37-42 (17-43).

Chief Judge Easterbrook's career path as an appellate attorney, and now appellate judge, is enviable. Following graduation from the University of Chicago Law School, Easterbrook clerked for First Circuit Judge Levin Campbell and then joined the U.S. Solicitor General's Office, briefing and arguing cases before the Supreme Court for five years. After returning to Chicago Law, this time as a professor, Easterbrook was confirmed to the Seventh Circuit, serving there since 1985 and as its chief judge since 2006.

Also of note:

Born 1948 in Buffalo, NY and grew up there.

Defines himself as a textualist who has no interest in legislative intent (see video embedded above).

Identifies his legal interests as "antitrust law, criminal law and procedure, and other subjects involving implicit or explicit markets."

Recommends reading prose, as well as Strunk & White's The Elements of Style and Bryan Garner's The Elements of Legal Style, to improve legal writing. Also, has a particular interest in a brief's physical format (e.g., Times New Roman font was designed for newspaper articles, not briefs; do not use).

Worked under Solicitors General Robert Bork and Wade McCree.

Nominated in his mid-thirties to the Seventh Circuit by President Reagan. Would have liked "15 years or so" more as a professor (with consulting and practice), but did not want to turn down the judgeship opportunity.

Enjoys Alaska and opera, outside of the law.

Holds annual "reunions/Star-Wars-movie events," for his clerks.

To reach this post later, or to read about other judges, go to Resources, Judges Series, on Appellate Daily's right sidebar, linked here.

Something from the Vaults for SG Nuts

In 2002, Brigham Young University held a conference, named for its law school's founding dean, former Solicitor General Rex Lee.  The conference, which was about the Office of the Solicitor General, is linked here (first item).

Presenters included former Solicitors General Charles Fried, Ken Starr, Drew Days, Walter Dellinger (acting), Seth Waxman, and Ted Olson, as well as prominent individuals who had worked in the SG's office; among them, Chief Justice John Roberts, Judges Frank Easterbrook and Daniel Friedman, former Judge Michael McConnell, Michael Dreeben, Maureen Mahoney, Donald Ayer, and the list goes on.  The conference records are not a quick skim (180+ pages), but are filled with historical and humorous information.  A must-read for SG nuts.

One Rex Lee anecdote quoted during the conference:

I remember seeing [Chief Justice Burger] one night at a social event . . . . And he told me, very seriously, "Some of your lawyers have been appearing in button-down shirts. That’s not appropriate.  They should not wear button-down collars with their black frock coats."  I told him I’d get someone on it right away.  But I didn’t know of anyone other than me who had ever appeared in a button-down shirt!  I got the message.

Seventh Circuit: Video Interviews of Judges

A few months ago, Appellate Daily reported on a series of video interviews posted on the Seventh Circuit Bar Association website.  At the time, the videos were only available to bar members, but now are open to the public, linked here.

The interviews, which feature the Seventh Circuit judges listed below (bios linked), as well as federal district court judges, magistrates, and others, are organized into short snippets, making it possible to glean valuable information whether you have five minutes or five hours.

William J. Bauer

Frank H. Easterbrook (Chief Judge)

David F. Hamilton

John Daniel Tinder

Ann Claire Williams

Diane P. Wood