Crowe v. Smith

have although procedure we find GIBSON,* R. JOLLY Before JOHN repri- adequate suspended as to been GARZA, Judges. M. Circuit EMILIO defendants, manded we also hold court abused its as to all of discretion district JOLLY, Judge: E. GRADY Circuit defendants, save the defendant Casualty Reading, Company of American in Berry, finding they engaged in bad (“CNA”1), Tone, P. Pennsylvania Michael by failing the D&O faith conduct to disclose Fiedler, Burns, B. Robert Anne W. Glenn is a Policy. finding Because a of bad faith Jr., Bieck, Wright, Judy E. L. William a court’s in- prerequisite to the exercise of Burnthorn, (collectively, Berry and James W. power, we reverse the dis- herent therefore defendants”) impo- appeal the the “sanctions judgment as to defendants trict Judge against by them sition of sanctions Bieck, Fiedler, Burns, Burnt- Wright, of District Nauman S. Scott the Federal addition, as to defendants horn as well. of Louisiana. for the Western District Court Fiedler, Burnthorn, Tone, CNA, we also except attorneys All of the defendants are completely record is insufficient that the hold an under- for After the settlement of CNA. finding of As support a bad faith conduct. attorneys in civil action which these lying defendants, proceeding the sanctions to those either counsel involved as defense respect With to defendants is dismissed. counsel, was ad- the district court insurer’s Bieck, Burns, Wright, record we find the applicable in- plaintiffs that an vised finding of support sufficient potentially (the policy issued “D&O surance CNA conduct, the case faith and remand bad them, al- not been Policy”) had disclosed in for consideration the district court further long had been known though its existence opinion. affirm the light of our defendants. The district the sanctions imposed against Berry. in plaintiffs appointed the for the pres- underlying investigate case to the offense. ent court of evidence I trial, of bench the conclusion a civil After proceeding in this case con- The sanctions opin- extensive court entered an attorneys dur- actions of cerned the several ion, findings included numerous which signa- stated, period leading up of time ing a Briefly conclusions law. fact and in a civil agreement of a settlement court held the sanctions ture the district * Circuit, Continuing sitting by Compаny “A" "CNA.” Judge Eighth Circuit —the court, we designation. parties practice and the district Casualty Company CNA refer to American will acronym group insurance is an 1. “CNA” opinion. in this Casualty companies, one of which American significance suit. To understand the policy

RICO2 was a policy, “claims made” and car- actions, necessary it is briefly those general liability ried a limit of million. It $5 review expired the circumstances of that case. but Larry not before Crowe brought against Peoples suit under a In December as the latest install- theory conversion in February year.3 of that long tangled saga ment of a partner- thereafter, Shortly Peoples directors of ship litigation, Larry D. Crowe and the Suc- began corresponding with regarding CNA (the “Crowes”) Coody cession of Reba Crowe correspondence Crowe’s claims.4 It was this brought suit “Sonny” James W. that Bieck discovered March 1994. He Smith the Federal District Court for the conveyed findings his immediately almost Western District of Louisiana. The Crowes Burnthorn. alleged, Smith, among things, who partner later, was a former business Larry Three weeks the Crowes issued cer- Crowe, conspired Peoples discovery tain requests Homestead to counsel for each of Savings Monroe, and Loan Association of the director defendants and one of the attor- Louisiana, (“Peoples”) defendants, ney to defraud the Johnny Crowes Dollar.5 Dollar was of their represented, interest certain agri- commercial significantly, by Wright and property cultural in violation of RICO. Also Burnthorn. discovery requests ques- made defendants in this suit were Russell tion production were for the of certain de- Hart, president Peoples, the former scribed documents. Two are relevant to this Peoples’s several of former directors and out- case: attorneys. Eventually, side the case was set 5. Ail claims or notices of claim that were 12, 1994, July Monroe,

for trial on Louisi- any transmitted to your insurance ana. carriers in relation to of the claims Larry Crowe the Succession and/or Most of the sanctions defendants served as of Reba Crowe. defense counsel the 1992-94 litigation. indemnity 8. All Berry represented agreements four former related to directors of officer, Bieck, director, service as Peoples. bank Wright, Burnthorn, attor- and ney, representative. represented Burns various of the outside at- torneys. The remaining individual sanctions important It is to note that discovery defendants, Fiedler, represented Tone and requests very significant ones in the CNA coverage as counsel and were not di- Western District 1994. Although Fed. rectly involved in the case. The following 26(a)(1)(D) R.Civ.P. generally provides for chronology traces the activities of these at- the automatic disclosure of relevant insur- torneys in leading up the months to the trial. policies, ance the Western opted District had It is on findings based the factual provision out of that in its local rules. See court, which in all respects relevant (1994). time, ULLR 6.06W At undisputed. way party for a to find out about insurance policies in the Western by way District was litigation Late into the March 1994— —in properly of a propounded discovery request. part of trial, his research for the upcoming Bieck discovery made a fateful among 27, April Berry On responded to the dis- files of one of defendants. covery requests He on behalf of three of his four 1983, learned that CNA had issued a director clients. He Requests answered directors’ and officers’ errors and omissions and 8 with the words “none” or “none policy D Policy & 0 Peoples. This known.” On day, that same Burnthorn —the faxed —to Corrupt time, Racketeer Influenced Organiza- and 4. At about opened this CNA a file for the Act, (“RICO"). § seq. tions 18 U.S.C. 1961 et litigation. Crowe 3. This suit was chapter an earlier same 5. Dollar request was included in this because he epos litigation to which the 1992 suit be- subsequently had Peoples's served on board of longed. A eventually successor to the 1986 suit directors. settled, funds, resulting complex in a transfer of property rights, Peoples and liabilities between Larry and Crowe. specimen deny policy A was at- correspondence coverage. the CNA Berry copy responses.. point, tached to the by Bieck. At first discovered began preparing a letter to Burnthorn also Bieck, Wright, July week of During the indemnification requesting defense and CNA attempted negotiate a and Burns settle- Dollar, client, the D&O for her under their and two other ment on behalf of clients Berry copy Policy. April she faxed On rejected, insurers.6 Their offer was where- well, could so that he use of this letter as upon among themselves the they discussed behalf of his model letters written on as a coverage Policy D&O possibility of under the Berry’s one director April On clients. feasibility bringing CNA Ber- Letters sent such a letter to CNA. clients ry’s global clients into a settlement. director followed soon from two of the other directors July Wright informed Bieck that he On thereafter. representatives speaking would with CNA day possibility the next about the CNA May 1, responded to Burnthorn On July contributing global to a settlement. On Dollar. discovery requests on Her behalf place took telephone conference Request as follows: response read Tone, scheduled, Berry, Wright, with England # 5: In- Response request New During the conversa- Fiedler in attendance. Company and the Home Insur- surance tion, yet stated that he had received Tone plain- Company have been notified ance any money to a settle- authority to commit request objects Dollar to the tiffs lawsuit. fund, one should raise the ment attorney-client privilege and grounds on with the possibility of a CNA contribution immunity. product work relayed the Wright subsequently Crowes. 5,May Berry responded to the discov- On to Bieck. substance of this conversation ery requests of his fourth and final on behalf day July began, the trial On before Requests 5 His answers to director client. Berry informing Wright Tone wrote to to the and 8 for this client were identical to a willing them was to contribute that CNA sent the week before behalf ones day, same package. settlement On (cid:127) negative. of the other directors —in the letter, receiving Wright, obviously before May Fiedler wrote to Burnthorn On Bieck, possibili- met and Burns to discuss advising proceeding under a that CNA offer, which ty making global settlement rights respect reservation CNA, prior would commence- include Policy, requesting certain addition- D&O conversation, trial. In this ment of the pro- Burnthorn al information. On June Wright Burns and Bieck that CNA reminded vided information. its inclusion in a requested possible that had nearer, Later nego- global be disclosed. As the trial drew settlement settlement Burns, Bieck, Berry afternoon, Wright, and On June made tiations intensified. along attorney, met with a written offer to settle on behalf with Smith’s $10,000. The emphasized He in this settlement. Crowes’ counsel discuss directors for insured, Burns offer of million. that his clients were not Crowes made an $6.2 letter beyond any figure for was far replied not have access substantial funds that this did No theory coverage. counter- one at purposes. The Crowes of insurance settlement $25,000. objected for to this statement. meeting offered July on 12. response began The as scheduled formal trial On June CNA made a thereafter, Shortly spoke to re- Berry Tone sent Ber- to the notice of lawsuit letters On garding payment of his fees CNA. clients. advised ry’s and Burnthorn’s CNA Berry advising July 13, a Tone sent letter to Policy was million indem- that the D&O a $5 $25,000 pay for the him would policy might provide coverage that CNA nity same reasons, legal his clients. Later that fees of several and that CNA would $10,000 pursue his day, Berry rights continued proceeding a reservation under discovery response. above-quoted Company and in Burnthorn's England Insurance Home 6. New Company, the two insurers referenced Insurance prior offer with the counsel. offer of million. settlement Crowes’ settlement Back $2.25 discussions, camp, subject one of During the Crowes’ the defense disclosure lawyers surprised Wright was remarked that he arose one last time. told Tone that Berry thought had no insurance. re- contribution directors CNA’s should be plied policy, apparently that there was an old but that it revealed. Tone concurred. Tone departed lapsed had and his clients were not covered Fiedler Monroe. then by it. accepted The Crowes million of- $2.25 point, At this Burns became the chief set- fer, agreement and the substance of the was negotiator tlement for all defendants. day by recited the court that same Burns. Berry July On Burns received word from the trial that a The recessed so final given authority had Tone make CNA agreement prepared written could be $100,000 a contribution settlement. signеd. subsequently Bieck drafted that Berry relayed that Tone had reiterated it, agreement. “American name Casu- $100,000 request his that the source of the once, alty Company” appeared along with anonymous. remain insurers, long in a several section titled agreement “Settling Defendants.” The was meeting Wright July At a on reminded signed July day, On that Berry same request Bieck ano- and Burns of CNA’s informing sent letter to Tone him that the matter, nymity. The three discussed language agreement final spe- did not agreed participation ought that CNA’s to be cifically say subsequently “CNA.” CNA made They discovery revealed. also decided that promised payment anonymously through responses anyone should be checked to see if Wright and Burnthorn. duty had breached to disclose the D&O Policy. particular Bieck raised concern Smith, respect With Hart the trial discovery Berry’s responses. about conclusion, jury continued. At its re- meeting adjourned was then to check those turned a favor verdict of the Crowes for responses. Wright consulted with Burnt- figure million. subsequently This $8.5 responses they horn about the given, had trebled in with accordance the statute. Both Bieck, they adequate. concluded that were appealed judgment Hart and Smith Wright, attempted and Burns each to check this court.8 Berry’s responses, apparently but none During pendency appeal, of that Jo- brought them along. those documents Ward, Jr., seph R. principal the Crowes’ up No Berry. one followed on this with attorney throughout litigation, the 1992-94 July On Tone Fiedler arrived judgment conducted debtor examination of progress Monroe to monitor the settlement examination, Hart. As a result Ward they directly. day, thisOn to have able Policy. discovered the D&O number of discussions various during ongoing defense counsel breaks in the II First, Berry trial. asked Tone to increase 15, 1994, the amount CNA’s contribution. Tone had On November the district court this, authority upped to do accordingly received a from letter Ward addressed to $150,000. CNA’s Tone offer then raised eleven of the It defense counsel. stated that subject the recently disclosure was informed he had become aware the D&O attorney Policy, Hart’s7 that the settlement and that he there believed have apart would fall if Af- CNA revealed. been number of instances where the de- ter exchanges, Burns attorneys discovery informed the fense violated their obli- attorney gations by Crowes’ counsel that the revealing policy and di- the to him. gave rector defendants would meet that preparing the Crowes’ He notice he was however, 26, 1996, Peoples’s Again, president, 7. February former and one of and on this court principal the underlying the defendants in suit. reversed the verdict and rendered his favor. Smith, 94-41205, Crowev. No. subsequently As we shall Hart settled with see. Cir.1996) (unpublished). the pressed appeal, Crowes. Smith on with his title, designating him for “the court” and sane- motion to set aside the settlement instead “the United States.” tion the directors. letter, had the the court receiving After procured and its counsel On June CNA in an parte with Ward several ex contacts Crowes,9 new the who settlement with be

attempt what action should to determine then, feared, stopped as the district court the the As taken the matter of sanctions. on of their motion. The prosecution repeatedly emphasized, it was court has since for sanc- court then entered its own motion quandary it nor Ward in a because neither power.10 its pursuant tions inherent Ward might facts knew that substantiate dutifully investigated the facts of the settle- allegations of Ward refute the misconduct. negotiations presented them to the ment motion, however, his subsequently brought during a bench trial. court rescheduled then that it would and the court decided on the Based its conversations with U.S. meeting with all of the conduct an informal office, Attorney’s because it was con- attorneys the situation. to discuss defense possibility cerned with the that Ward would meeting, full- At it was decided that a “prosecutor,” erroneously as a the be viewed the fledged be to resolve trial would held times, him, expressly court limited at all to a question. originally This was scheduled trial gathering presenting the evi- role on conversations September for 6. Based “kept its particular, the court own dence. Ward, however, already with the court theoriеs, legal the counsel” as relevant at the time of the informal become convinced defendants, designation of and the overall likely the enter meeting that directors would sanctions, appropriateness of with the sole Crowes, the into a with renewed settlement exception the were allowed might well be waived that sanctions present legal The briefs on the issues. judicial in- for therein. Concerned its own however, did, engage court a few addition- bringing tegrity, began the court consider during ex with Ward al contacts itself, on proceeding an alternate sanctions investigation period, in an effort to resolve and, need investigate its own motion. To if relating repre- his action, procedural questions be, prosecute appointed court subjects sentation and to ensure attorney for the States Ward as United court found most relevant were ade- The court made this choice matter. It existing familiarity discovery. was quately investigated based on Ward’s lack viable Ward case and a alternatives. testified at trial case Ward accepted appointment, attorney. and informed as the court’s serving in addition to Attorney District of defendants, part, U.S. Western were at all The their his counsel, new status. Louisiana represented were able times respond all the evidence accu- to hear and thereafter, Attorney’s civ- Shortly After extensive dis- mulated them. paid il and a visit to criminal section chiefs trial, July covery days of and some five chief the court to discuss the case. civil court the conduct found himself, pursue the matter declined The court raised defendants sanctionable. consider the sanctions to be civil did not liability, multiple but the essential theories chief that he nature. The criminal indicated judgment finding that all basis for its willing pursue would the matter as willfully con- of the sanctions defendants had case, if to be criminal declared it by concealing spired to the Crowes defraud such. The court declined his offer on Policy despite having them D&O grounds that it not consider the defen- “did ethical, discovery-related, duties to criminals,” employ- its dants and continued finding, it. the court reveal Based on this reflecting on the meet- ment of Ward. After (1) however, for change following sanctions: CNA ing, Ward’s ordered the the court ‍​‌​​​‌​‌​‌‌​​​​​‌‌‌‌​​​​​​​‌​‌​‌‌‌‌‌‌​​‌​​‌‌​​‌​‍did power $4 opposed under Fed.R.Civ.P. In 10.As to its 9.For an additional million. addition 11,which against implicated the Crowes’ claims attorney clients here. is not defendants, this settlement Hart, also the Crowes' claims terminated Policy. he D&O as was covered 226 (2) court; process pay imposing million to Tone to for due criminal sanctions $5 (3) court;11 $75,000

pay Berry manifestly on via a process. for them civil Sec- ond, practice they clearly from West- suspended argue be before the that the court erred period for in making required finding ern of Louisiana nine of bad faith District (4) Burns, months; for Wright, and Bieck to conduct. We each address contention practice suspended be from before the West- turn. period

ern for a District Louisiana of three (5) months; and for Fiedler and Burnthorn A reprimanded. to be The sanctions defen- argue The sanctions appeal judgment multiple dants defendants first on deprived right the district court grounds. them of their process by imposing due criminal sanc- particular, a civil proceeding. tions In III they process rights contend that their due imposi We review a district court’s infringed ap- because district court power tion of sanctions under its inherent for pointed “prosecute” Ward to their sanctions. discretion. abuse of Dawson v. United that, They insist because Ward’s other States, (5th Cir.1995); 68 F.3d clients, Crowes, purported were the vic- Inc., NASCO, 32, 55, Chambers v. 501 U.S. fraud, private tims and maintained (1991). 111 S.Ct. 115 L.Ed.2d 27 rights wrongdoing, action for he was Nonetheless, “the use threshold prosecutor, required disinterested as power high.” inherent Elliott v. prosecution for the of criminal sanctions. In (5th Cir.1995). Tilton, 64 F.3d regard, they also note that Ward had a power inherent “is not broad reservoir personal in finding interest their conduct power, ready imperial hand, at an but a sanctionable, that, in the sense if the conduct source; implied power limited an squeezed opponents his former had been found to be from the need to make the court function.” unobjectionable, poten- would have faced Chambers, U.S. at S.Ct. 2123 mаlpractice liability tial for his own failure NASCO, (quoting Televi Inc. Calcasieu Policy. earlier locate D&O addition Radio, Inc., sion and problems to these associated with Ward serv- Cir.1990)). reason, Perhaps for this we have “prosecutor,” ing as the sanctions defendants that, emphasized repeatedly where inher “ separate process also assert violations involved, ent power is ‘our review is not ” based fact Ward both testified Dawson, perfunctory.’ 68 F.3d at 896 attorney, and served as fact that he (quoting Shepherd Broadcasting v. American had ex contacts After court. (D.C.Cir. Companies, 62 F.3d consideration, lengthy we find substantial 1995)). Supreme “As the Court has ex process merit arguments these due ‘[bjecause plained, powers inherent Tone, applied to defendants CNA and but controls, shielded direct democratic Bieck, Burns, not as to Wright, defendants they must exercised with restraint and Fiedler, Burnthorn, ” Berry. discretion.’ Shepherd, 62 F.3d Roadway (quoting Express, Piper, Inc. v. 752, 764, L.Ed.2d 488 (1980)). As the correctly sanctions defendants out, point Supreme and as the Court has IV explained, initial often touchstone de The sanctions argue termining process rights the due of a sanc district court abused its discretion in two tions defendant lies the characterization of main First, respects in they this case. assert particular contempt “civil” either deprived right the court them of their “criminal”: might One what pay appointed prose- wonder the district court the court could counsel to money. intended do throughout with this It seems cute this and other sanctions actions general plan the a fund which was to create from the Western District.

227 829, at 114 Bagwell, 512 S.Ct. 2552 are U.S. contempt civil Because Workers, avoidable, (quoting v. Mine 330 United States fewer nonpunitive as and viewed 258, 303-04, 91 L.Ed. 67 S.Ct. 884 U.S. such sanctions protections for procedural . SEC, (1947), and Co Cal. v. 330 the required. To extent have been Penfield 585, 590, 918, 91 67 S.Ct. L.Ed. U.S. contempts punitive charac- take on a such (1947), re respectively); In Terrebonne however, ter, justified are other not cf. Inc., Lube, Fuel and contempt to the central considerations Cir.1997) (“If purpose is of the order to procedural proteсtions power, criminal punish party question conduct is whose may inbe order. court, authority or vindicate the Union, Mine International United Workers If, is as criminal. on order viewed 831,114 Bagwell, v. America hand, contempt is purpose of the order (1994); 2552, 129 see also L.Ed.2d 642 S.Ct. or compliance with a court order coerce Feiock, 624, 632, 108 S.Ct. Hicks v. 485 U.S. compensate party for the contem- another (1988) (in contempt a 99 L.Ed.2d violation, nor’s is considered order other, action, penalties “criminal as civil.”). in this case Because fines were imposed has on who not be someone court, compen payable they were not Con- protections that the been afforded they were flat fines satory. Because also requires proceed- of such criminal stitution an opportunity purge, not afford did ings”). they criminal in To the were character. to the extent that the district court concluded Supreme As the Court has made clearly contrary, it in error. was clear, about the civil or criminal “conclusions properly contempt sanction are nature of Having determined that fines char ... 'from an examination of the drawn character, question be were criminal ” Bagwell, itself.’ 512 U.S. acter of relief procedures applied whether the comes Hicks, (quoting S.Ct. con adequate were criminal case, 635, 108 1423). In this we U.S. at S.Ct. ex tempt. Young States rel. United principal types presented S.A., with two 804, 107 Vuitton et 481 U.S. Fils for CNA payable “relief’: fines to the court (1987), the Su 95 L.Ed.2d Tone, suspensions practice private attorney preme that “[a] Court held Bums, Bieck, Wright, reprimands for contempt official appointed prosecute a criminal Burnthom, Fiedler, Berry. public We consider ... be as disinterested as should prosecu of relief turn. prosecutor each class such a who undertakes case, repre

tion.” In this Ward’s concurrent Crowes, who sub retained sentation private recovery possibilities stantial imposed fines begin with the defendants, coupled his own against the regard to sanc CNA and Tone. With liability for events potential malpractice tions, difficulty finding have little issue, any contention that combine to belie they criminal character. As the public prosecu “as disinterested Supreme expressly Court has stated: that, There therefore be no doubt tor.” can ... if contempt A is civil remedial fine that Ward was fact at least to the extent into com the defendant eoerce[s] “either “prosecutor,” the district to serve as allowed order, pliance [or] with the court’s Young. court failed follow the command compensate^] complainant Furthermore, for Tosses argument that Ward was compen fine is not prosecutor sustained.” Where the actually acting as a the—in present if is satory, only investigated it is civil the contemnor that he sense Thus, purge. evidence, judge opportunity leaving an afforded ed the “flat, totaling entirety legal argu even as unconditional fine” finding of moment in this context. As announced after a ment —is of no little $50 expressly past, in the has held where contempt is criminal if the contemnor we have involved, contempt there must subsequent opportunity to reduce or criminal independent prosecutor of actually be through compliance. an the fine avoid 228 kind, contempt authority pinnacle the district court is not the

some because for is at its constitutionally competent fulfill role that where contumacious conduct threatens a LeGrand, ability pro own. court’s on its See FDIC v. 43 F.3d immediate conduct (5th Cir.1995); 832, 163, ceedings.” Bagwell, n. 512 U.S. at 114 169 & 6 see 42(b); exception “pet S.Ct. 2552. The second is for Young, 481 Fed.R.Crim.P. U.S. cf. fines, 798-99, ty” which the district court has been (noting general 107 2124 S.Ct. other traditionally impose summary allowed to in a requirements procedure of criminal in the 838-39, id. at n. 5 context, manner. See & 114 contempt including presumption innocence, Although S.Ct. 2552. our own recent deci beyond-a-reasonable-doubt the Jaques Admiralty sion v. The CaiToll Law proof, right burden the self-incrim- Firm, P.C., 290, Cir.1997) ination, notice, right light the the to be (Jones, J.), appear to would indicate either counsel, heard, right right call “petty,” fine is or that $7000 “direct witnesses, right judge, to an unbiased contempt” disruption includes ongoing, jury right and the to a trial where con- discovery,12nothing out-of-court serious). case Thus, way tempt is in whatever Bagwell saying can be read as that there characterized, is situation any might justi is “other consideration” that appear would to have violated CNA and fy procedures curtailed criminal the im for right process by denying Tone’s them $75,000 position of million and fines to $5 independent prosecutor impartial an for punish discovery a months-old violation in a manifestly criminal im- sanctions that it long-settled Indeed, case. Bagwell posed. quite Court was clear that for “indirect response reasoning might One to this be contempts” involving, example, [criminal] for Supreme Bagwell stopped that the Court in injunc “out-of-court to complex disobedience saying range short that the full of tradi- tions,” protections clearly criminal “nec procedural protections tional criminal is man- essary appropriate protect the due every contempt proceeding. dated in criminal process rights parties prevent above, As noted rule of case was arbitrary judicial power.” exercise of Id. at simply procedures “criminal be 833-34, 2552; S.Ct. Green United cf. order,” imposition if contempt is States, n. U.S. S.Ct. “justified by other considerations central to (1958) (Black, J., L.Ed.2d 672 dissenting) contempt power.” Bagwell, (“Alleged contempts beyond committed added). Thus, (emphasis 114 S.Ct. 2552 presence judge where the has no might perhaps argued it the lack of personal knowledge material facts are impartial prosecutor an independent and especially by jury. suited for trial A hearing justified somehow in this case such “other held, called, must be witnesses must be considerations.” evidence taken event. often ... And however, Upon inspection, closer re dispute.”). crucial facts are close For this sponse Bagwell lacks merit. The Court reason, justification we see no here for a identified con two classes of criminal departure Young, from the mandate of tempt in which the “other considerations” therefore conclude that the district court might degree procedural indicate a lesser clear committed a violation of CNA and protection. The first is the case of the “di right process in Tone’s to due this case when contempt” rect presence committed “in the imposed determinative criminal fines on court,” and the is quite rationale them affording without the benefit of an in necessity justification one that dependent sensible impartial prosecutor.14 “[t]he Bagwell, 12. suggested, See also 512 U.S. at strongly deciding, Court without regard proper procedure for individuals, appropriate $5000 limit was an ongoing discovery such violations. $10,000 corporations. Bagwell, See U.S. at 837 n. 114 S.Ct. 2552. today precise need what We not decide fine, $75,000 "petty” limit is for a because 14.And, course, potentially in a number of individual, manifestly non-petty in the case of an well, respects majority as the just $5 non-petty as million is in the of a case protections other standard criminal noted note, corporation. however, Bagwell that the

229 (1883) that (stating 27 L.Ed. 552 a disbar- therefore reversed sanctions must These proceeding requires no indict- ment formal and vacated.15 ment, purpose not for the because “is 3 purpose preserv- punishment, but for the ing justice the courts the official suspensions repri- to and turn next We practice persons unfit to in ministration of out sanctions defendants mands meted to them”); 585, Cunningham Ayers, v. 921 F.2d Burnthorn, Bieck, Fiedler, Burns, Wright, Cir.1991) J.) (“‘Disbar- (5th (Wisdom, 586 pres- Berry. Although and proceedings purpose not for the ment ultimately very question, we are ent a close to punishment, but rather seek determine precedents they persuaded by our clear con- fitness of an official the court to in character as to render are not so criminal protect capacity to tinue and procedures faulty. chosen district court’s public from courts and the the official minis- however, concede, must an initial im ”) persons practice.’ (quot- tration of unfit appears to pression Bagwell mandate 874, ing Derryberry, 72 B.R. 881 In re opposite result. In addition the above- 1987)). (Bankr.N.D.Ohio recently As we re- analysis civil of criminal versus discussed Dailey Vought Air- stated the matter context, the Court character in the fine noted (5th Co., Cir.1998), 224 141 F.3d “dis- craft matter, that, general sanc in that case as a protect public” is barment intended authority that serve “vindicate tions penalty being ‘punishment “a addition Bag criminal in the court” are character. ” imposed it is lawyer,’ on the therefore well, 2552; 828, 114 see 512 U.S. at S.Ct. “quasi-criminal (quot- at 229 nature.” Id. (“If Terrebonne, purpose 108 at 612 F.3d 544, 550, ing Ruffalo, In re 390 U.S. 88 S.Ct. party punish is to whose the order (1968)). 1222, Although 20 117 both L.Ed.2d question is in or to vindicate the conduct Supreme court have often' Court court, authority is of the order viewed as “quasi-criminal” relied on this characteriza- criminal.”). Suspensions reprimands attorney tion is entitled to to hold that “an accomplish goal surely serve to of vindi process procedural which includes notice due cation, appear would they so to that extent opportunity to be heard in disbar- and an be criminal in character. see, Dailey, e.g., 141 proceedings,” ment 550, however, 229; ease, S.Ct. Ruffalo, our investi 390 U.S. at 88 In this 1222, gone only rarely farther.16 gation simplistic an we have cannot be limited to so Cf. (7th 1352, 1355 Cir. likely Ming, In re 469 F.2d analysis. the other Unlike some 1972) (“ sanctions, their contempt requisite [disbar- ‘All that is candidates use that, validity when not attorney discipline proceedings] ment that address have those court, open decidedly placed occurring in a taken for matters squarely been different judges, notice should be Supreme presence Court grayer area both the See, given charges made past e.g., Cam and our own decisions. 399, 7, States, explanation n. him for opportunity 408 afforded mer v. United 350 U.S. defence.’”) (1956) (‘“The Brig- Randall v. (quoting 100 L.Ed. 474 S.Ct. (7 Wall.) 523, 540,19 ham, upon L.Ed. 285 power attorney proceeds 74 U.S. to disbar an (1868)). Indeed, in the limited instanc- grounds’ which even very different from those specific has punish es where this court mandated power for con support Robinson, manner in which protections, the Ex Parte 86 additional tempt.”) (quoting (19 Wall.) 505, 512, (1873)); unmistakable so leaves the L.Ed. 205 have done U.S. Wall, “less impression “quasi-criminal” means Ex Parte 798-99, Young, $6.8 determinative fine without ben- U.S. at 107 S.Ct. of a million Court in protections procedural to violate ignored efit of criminal case well. ). Bagwell process and Hicks due under judgment passing that on this 15. We note in our case, obviously reasoning no contention point In this there is accords in both result with provide either court failed to in In re E.I. Du the Eleventh Circuit's decision opportuni- Litigation, adequate sanctions or an notice De Nemours & Co. Benlate Pont Cir.1996) ty (finding imposition be heard. F.3d 363 (3d Cir.1962) CJ., process purposes. (Biggs, dissenting)); than criminal” for Thalheim, See, Co., In re 388 n. e.g., Cystoscope Woodham v. American (5th Cir.1988) ‍​‌​​​‌​‌​‌‌​​​​​‌‌‌‌​​​​​​​‌​‌​‌‌‌‌‌‌​​‌​​‌‌​​‌​‍(5th Cir.1964) (requiring “elear-and-con- F.2d (referencing offense, of a vincing” evidence disbarrable noting appropriate Gamble and “modes proof “beyond than rather reasonable discipline against attorney might in- doubt,” application (1) of full court, (2) as a blind criminal reprimand by clude: a a procedure suggest).17 (3) Fur contempt finding contempt, would prohibition of or a thermore, Cammer, and noted in the im against practicing for a limited time before position impli disciplinary sanctions itself neglected court or whose dis- order and, duty independent cates an Comment, fundamental regarded”) (quoting at Sanctions the,.supervision of the district of the Stages, 819, Pre-Trial 72 Yale L.J. 830 court — attorneys practice who as members of its (1963)); Roadway Express, Piper, Inc. v. 447 ways simply bar —in that other sanctions 752, 12, 2455, U.S. 766 n. 100 S.Ct. 65 336, Bright, cannot. v. 6 F.3d 340 RTC (1980) (citing Cf. L.Ed.2d 488 Judge Chief (5th Cir.1993) (“It beyond dispute is a Biggs’s approval). dissent Gamble may suspend federal court or an dismiss Thus, might implications whatever be attorney as an exercise the court’s inher general Bagwell— more statements in Texas, powers.”);- v. Bar Howell State ent note, record, we also that Bag- (5th Cir.1988) (“Since 205, 843 206 F.2d directly did well address status of law, early days English common it has disciplinary disbarments or other sanctions— widely recognized possess been that courts light in the disciplinary extensive case power regulate inherent conduct of cited, law we have we are constrained practice attorneys who them and to before binding precedent reject the sanctions de- attorneys discipline or such of those disbar apply fendants’ invitation in this case to a conduct.”); unprofessional guilty are requirement blunt procedure full criminal Co., Flaksa v. River Little Marine Constr. every disbarment that the district courts (5th Cir.1968) (“ 885, 389 F.2d 889 n.10 ‘The of this circuit choose tо issue in the exercise power a discipline of court to members of its power. of their surely, inherent Even more scarcely seriously. own bar can be doubted precedent emphatically our dismisses such obligation An is under seek procedural hoop-jumping extensive for the admission to the of a dis bar United States disciplinary far less serious sanctions of sus- liberty trict court. He is abstain pension reprimand. In resolving membership any other bar. But case, simply we must remain content re- apply when he does and is admitted he se vague, “quasi-criminal” designation tain the privileges cures certain assumes precedents our expressly have chosen to obligations. power definite of a court sanctions, upon place such and conduct our impose appropriate and reasonable sanctions process analysis due on that basis. upon those admitted to its bar is a familiar phenomenon lies within rely the inherent doing, may In so on the ”) power any (quoting record.’ propositions established “[t]he well fun Talbot, Inc., Pope 729, Gamble v. & 307 F.2d damental requirement process of due is the Thalheim, (also But see 853 F.2d 388 re- disciplinary such rules of enforcement as it has created, Thalheim, quiring disciplinary that the court's read rules be see 853 at 388—is not strictly, resolving ambiguity case, in favor of the implicated in this because the Western Dis- person charged, unexplained obviously Louisiana, in an but District, trict of unlike the Eastern did application intentional of criminal law's rule of not have rules at such the time these sanctions lenity). response point, to that we can (1994). imposed. were such, ULLR 83.2.10E As Cf. question lenity note that the whether rule of only analyze procedures we need actu- requirement pro- is a even fundamental of due ally employed they require- to see if meet the settings cess in more traditional criminal process. Ming, ments of due 469 F.2d at Cf. question complexity. of some (“The adopt courts free to their defining grounds own.local major We should also that the rules note addi- disbarment procedural procedures protection specifi- suspension tional thаt we have and the to be fol- cally mandated require- for disbarment cases—the re- lowed. But these rules must meet the quirement strictly process.”). that the district court abide ments of due ” ‘only procedural safeguards.’ meaningful time the most basic heard ‘at a opportunity ” manner,’ 543, Young v. n. 3 meaningful Herring, Mathews v. J.) Cir.1991) 319, 333, 893, 47 (King, (quoting Patterson v. Eldridge, S.Ct. U.S. (1976) York, (quoting Armstrong L.Ed.2d 18 New U.S. S.Ct. 546, 552, (1977)). Manzo, 380 U.S. 53 L.Ed.2d (1965)), very na that “[t]he L.Ed.2d 62 said, just procedural That which “basic any concept of process negates ture safeguards” generally implicated by will be universally applicable procedures inflexible imposition “quasi-criminal” sanction of situation,” imaginable & every Cafeteria question. ais close and vexatious disbarment McElroy, Union v. Restaurant Workers not, however, question requires It is 6 L.Ed.2d 1230 81 S.Ct. thorough present juncture, answer at so (1961). “ way, process, due Stated another focused, surely long as we remain rules, legal is a technical ‘unlike some not must, by specific alleged faults the on the conception to with a fixed content unrelated in the instant case: sanctions defendants ” Matheivs, time, place, and circumstances.’ First, “prosecutor”; Ward’s service as sec- 334, (quoting 424 at 96 S.Ct. 893 McEl- U.S. ond, fact he testified in addition to the 1743). 895, roy, 81 In each 367 U.S. at S.Ct. third, serving attorney; ex and his case, specific the individual identification of in contacts with the court. We address each “guided by a process of due is Math dictates turn. Eldridge balancing requires v. which the ews by weighing private of the interests affected a action, the the of de official risk erroneous to regard With Ward’s service as existing procedure, privation through the and NASCO, in v. prosecutor, our decision Inc. government’s minimizing in its interest Inc., Radio, Television and 894 Calcasieu financial burdens.” Met administrative and (5th Cir.1990) J.), (Higginbotham, is F.2d 696 FDIC, Title; 883, County ro Inc. v. 13 F.3d case, In that largely dispositive of issue. Cir.1994) (5th Mathews, 424 U.S. (citing 887 imposed, among the district court other 334-35, 893); Santosky v. at S.Ct. cf. compensatory civil of attor things, a sanction 753-54,102 1388, Kramer, S.Ct. U.S. a ney’s expenses, “quasi-crimi and and fees (1982) (applying the Mathews L.Ed.2d disbarment, three-year nal” sanction of a requiring “fundamentally fair test and a Chambers, of Russell the owner G. procedure” for the to state terminate Television, Gray, his A.J. chief and Calcasieu wеighty rights parentage); Burnett rather of attorney, “long response a and arduous Collins, v. 928 n. 8 Cir. harassment, fraud, deceit, delay, campaign of 1993) J.) (Garwood, that, (noting in a even litiga oppression expense” Calcasieu’s have evidentiary criminal ease where errors brought against of claim tion a contract occurred, requires nothing more process due NASCO, NASCO. See Inc. v. Calcasieu trial”); fundamentally v. than “a fair Link Radio, Inc., 124 F.R.D. Television Co., 626, 632, Wabash Railroad U.S. (W.D.La.1989). The motion mon 143-45 (1962) (noting S.Ct. L.Ed.2d 734 brought by etary had been NAS- hearing respect “adequacy of notice and CO, by way one-day it was resolved party’s ing proceedings that affect in which each side was allowed extent, bench trial turns, rights on the to considerable the merits its present argue evidence knowledge which the circumstances show disbarment, Gray’s position. on party may such be taken have of court, hand, conduct”). legal brought Further consequences of his own more, issue was limited that, argument on the even where it is well established “[ujnless criminal, briefs as the court’s own research and such an patently the sanction on hearing after the parties chose submit specific provision action violates a of the Con response stitution, monetary process requires sanctions.18 the due clause finally proce- decided that NASCO’s counsel 18. As the district court itself described application certainly for sanctions would make dure: expenses. attorney's in the form fees and appeal Gray’s argument on that he been any authority support unable to find process, deprived right Gray’s of his due points contentions and he us to particular right pros- to a Further, his disinterested none. we conclude that the dan- ecutor the “criminal” sanction of disbar- ger present private in Young, that counsel ment, we stated: contempt pro- would be overzealous persuaded an ceedings NASCO’s effort to [W]e further the interest client, “prosecution” proceeding present his was not here. The Young violated the arguments strictures United at hearing counsel States, 107 S.Ct. entirely monetary devoted to the issue of (1987). L.Ed.2d 740 There Court held sаnctions. The court later relied appointment opposing research, counsel own by any par- aided briefs the litigation prosecute underlying file, determining pro- ties wished to contempt proceeding criminal violated priety nonmonetary sanctions. process. The Court reasoned counsel F.R.D. at n. 10. The court thus avoid- adequately represent could the inter- placing ed NASCO’s counsel in the role of government ests interests prosecutor for the proceedings. disbarment private his client the same time. 107 NASCO, 894 F.2d 707-08. Gray argues 2135-2139. that be- cause we have read standing characterized disbarment NASCO as proceeding proposition quasi-criminal, Young as In re Thal- the that infringed, is not heim, (5th Cir.1988), the even where the district on court relies inter reasoning Young apply. opposing present should We are ested counsel to the facts19 rely application The Court would on that and knew his client had no defenses. He misused oppositions by injunction the given by filed defendants for the investi- notice NASCO. He gation appropriateness and the illegal of that kind of devised a fraudulent and scheme de- prive rely jurisdiction sanction. The Court this would on own Court of the which it its had at the research and additional research we time NASCO’snotice was delivered on Friday, might request parties regarding the October of the im- 1983. The sale to the position types attempted of Trust as an ap- other of was absolute sanctions. On simulation totally incomplete peal, and void and the NASCO's counsel is to defend time it the entire Court, was judgment recorded. It was recorded including of in haste for the this purpose rendering injunction attorney's impending of the expenses. other than fees and If final, ineffective. He not failed to disclose es- they sanctions are found and become facts, pertinent actively sential and he misled attorney's expenses shall include the and fees the Court and his recorded conversation with of representing NASCO's counsel in NASCO disclosing the Court without to the Court his public phase and the the sanction of this By intent so. to do the actions Court suit. delay was forced to on the action merits until it NASCO, F.R.D. 137. by was again determined trial the Court jurisdiction. During delay Gray this uti- Although Judge Higginbotham's description lead, experience legal lized his skills and on might ambiguity, point leave some room for of Chambers, campaign behalf of of harass- fact there can be no doubt the district court ment, oppression delay and sufficient force primarily in NASCO relied on the extensive factu- spend NASCO to over a million dollars in development monetary pro- al the of attorney’s expenses and fees to defend its Gray ceeding finding disbarrable. fol- As the rights performance perfectly legal to the of a clear, lowing excerpt findings of its makes the amazing, enforceable contract. More this Gray court disbarred on the basis of a wide accomplished was without introduction variety culpable of actions and de- mental states of single defendants one item of evidence rived from the whole of course Chambers’s against validity Agreement. of the Purchase scheme, including plotting much out-of-court unique. This case is The manner in which it activity possi- that the court could not by Gray disgrace was conducted is a bly have known save about for the trial: legal profession. duty It is our reluctant as a case, ... Gray In his conduct ac- has Gray practice sanction disbar as an tively every violated almost one of ethical [his] attorney in the Western District of Louisiana professional responsibilities. accepted He explicit purpose and tried a case for the NASCO, of regard, 124 F.R.D. at 144-45. In this i.e., doing injustice, every might used means at his description also be noted that the above disposal perfectly legal Gray’s part parcel defeat and enforce- conduct of the court’s purchase able description well contract which he unified and consistent of Chambers's charged, “kept the court its quasi- imposition an rise to giving disbarment, long exception so as own counsel.” With criminal sanction (as sup- attorney testimony own ex court relies issues research below, briefing separately by appropriate we can plemented contacts discussed legal issues regard proce- to relevant from the parties) with find no serious deviation21 NASCO,22 appropriateness of disbar- expressly approved overall dure that, by logic appear employment to be ment. The would therefore conclude posi- opposing in the avoiding putting counsel “prosecutor” not violate the did Ward as making legal argument in favor of right tion to due remaining sanctions defendants’ plac- disbarment, avoids sufficiently the court process. prosecutor role so

ing him in the Young.20 Whatever escape mandate of b reasoning as a de novo might think of this we question We turn next to the matter, prior by our of course bound we are point, attorney testimony. On this we precedent accept and must NASCO’s circuit precedent, argu with less but an confronted Johnson, Hogue v. case. See rule ably Although 3.7 of clearer answer. Rule Cir.1997) J.) (Garwood, Rules of Professional Conduct Louisiana (“One overrule panel of this Court attorneys practicing (applicable to before (absent an decision to intervening another (1994)) District, see ULLR 83.2.4W Western contrary by Supreme Court or en lawyer shall not act is clear “[a] ).”)(cid:127) Furthermore, were banc court lawyer is at a in which the advocate trial afresh, we would question to consider (with necessary excep likely to be witness” “compromise” nature note here), applicable local ethical rales tions not highly rule seems to us to be consis- NASCO authority governing mo are “not the ‘sole’ “quasi- aspects murky tent with other disqualify FDIC v. tions to counsel.” United character, in- criminal ness” disbarment’s (5th Co., 1304, 50 1312 States Fire Ins. F.3d cluding particularly use of “clear-and- the Cir.1995). such mo Federal courts decide (as opposed “beyond-a-reason- convincing” to federal, state, law, tions the not basis able-doubt”) proof, and the fact burden of “ governed by the and ‘consider the motion requirement that that the normal criminal pro the national ethical rules announced prosecutor actually separate be a does there public of the light fession in the interest appear apply disciplinary in the con- re (quoting In litigant’s rights.’” the Id. text. (5th Indus., 540, F.2d 543 Cir. Dresser 972 ease, this applying In the rule to NASCO 1992)). rules cer Although local ethical are casts no doubt on our review record they analysis, are not tainly relevant to that that, in express assurance the district court’s dispositive. “ independent to ‘preserve the court’s order Furthermore, courts and and as numerous thought,’ was a statement Ward restricted to jus- recognized, only commentators have investigations, He “conducted facts.” testimony evidence, attorney rule that tification for the depositions, took collected witnesses,” rights might affecting be but he “was viewed and cross-examined party that derived from the fear opposing is present argument, submit le- not allowed trial, such testimo- jury that the will either accord suggest after or gal authorities matters, weight, will unable to distin- imposed.” ny be be On those undue sanctions to testimony, of- attorney’s particular guish between the well as on the selection Ward, Indeed, surely unlike NAS- "campaign," 21. extent that would not have entire which attorneys, arguing a live Gray was not afforded the benefit CO’s been case had been presenting the development independent his own while evidence the mone- motion of of factual disbarment, argu- forming this case tary proceeding. the basis for presents problematic ably far less scenario. not, course, 20.Young apply to civil sanc does See, surprising, given proceedings. e.g., that not in the least Feminist A fact is tions Portland Inc., very judge Life, Judge was the Scott Center v. Advocates Women's Health 1989). (9th procedures we in NASCO. affirmed 790 whose Cir. 234 oath, 501-02, legal his argument, App.3d Cal.Rptr. under 148 (noting

fered 704 support in rhetorical of his client’s offered attorney only that “where the ... will be See, e.g., v. case. Dawson Orkin Extermi testifying pretrial hearings where the trier (D.Col. Co., nating F.Supp. 736 1054 is a judge, jury, of fact not a danger th[e] 1990) (noting designed pri rule “is exist”); does Greenebaum-Mountain marily preclude unseemly situation (“Because Co., Mortgage F.Supp. at 1354 lawyer argue which the must his own credi court, ease trial involves a rather bility jury”); Whitney- before the In re jury, to a than we confident Inc., (Bankr.N.D.Ill. Forbes, 31 B.R. necessary of fact finder can make the distinc- 1983) (“The danger principal results which tions.”). having participation by attor active an light opinion of this wide swath ney jury who will be a is that will witness particular profes- on this rule the “national disproportionate weight accord a to his testi sion,” and in light of the additional fact People Superior mony.”); v. San Court of attorney testimony rule has been Obispo County, Cal.App.3d Luis completely inapplicable attorney held be Cal.Rptr. (Cal.Ct.App.1978) (noting pro litigants, se Duncan Poythress, see that “the reluctance of courts to such allow Cir.1985) (also testimony 1515 n. danger ... a jury is the noting, cases, that, consistent with the above would believe the ... more witness”); fact, “a ordinary judge than because credible an Green was trier of Mortgage danger ebaum-Mountain Co. v. Pioneer there the trier fact Co., F.Supp. Title Ins. distinguish testimony National could not between (D.Col.1976) (citing advocacy”), the “fear that the no merit find to the conten- closing arguments statements counsel in allowing testify tion that Ward to at the might weight jury, bear too much with the trial bench in this infringed case could have jury previously since the observed the attor remaining right pro- defendants’ ney truth”); taking an oath to tell cess.23 cf. Co., United States Fire Ins. 50 F.3d at 1311 (generally rule); noting the reasons c (1940 ed.) Wigmore § on Evidence come, then, alleged final (same). majority As the of these have courts procedural defect: Ward’s ex contacts recognized, justification inapplica research, with the court. where, here, After extensive testimony ble as the is made to locate Orkin, could no Fifth Circuit judge, a case that found jury. F.Supp. not a See 736 (“Here, parte ex “contacts” to at 1054 ... constitute a counsel in a reversible testified process. violation of hearing before due judge].... [a rule is What we did find The a inapplicable.”); therefore were vast Whitney-Forbes, holding number cases the (“That problem contrary 31 B.R. at 842 does exist in not far more criminal serious —often trial.”); Court, in a Superior bench deportation Cal. 84 and contexts.24 courts Other that, matter, practical 23. We also note a implicate specific as such case does not a constitutional testimony that, necessary. provision, will often be [the defendant] One of the must demonstrate primary justifications circumstances, allowing opposing for on all based prevented the the instruction present to receiving just counsel evidence in him these is the a and cases fair already hearing.’’) (citing Widgery, fact that will be United States familiar with the v. 778 events, (7th Cir.1985)); underlying F.2d having part pro- 330 taken in United States v. Patterson, (5th Cir.1987) (“The ceedings allegedly 809 F.2d in which improper con- argue by opponent defendants duct that district court's ex his occurred. In these circum- stances, parte, procedure in rights camera foregone it is violated their an almost conclusion that process under the confrontation and due counsel will claus- also have relevant evidence of those es.... need consider proceedings. not these claims be- by If we are to abide NASCO and any possible by cause errors made the district allow way the district court a workable inves- parte, in matters, court connection ex in with its camera tigate accept we must admit- harmless.”); Estelle, inquiry would be v. Vardas tedly part testimony unusual fact of as (5th Cir.1983) (“The F.2d district bargain. denying corpus court habeas in this case de- See, e.g., J.) Heiring, (King, parte F.2d at procedure termined that the ex followed (“Because parte procedures, ex instant instruction in the here violated state but was not in remaining eeeding, such that the similarly.25 such claims treat to a are also entitled reversal their sanc- rather extensive tradition Based on this argued regard that It has been this tions. ex affording weight or no to isolated little process ruling must be made on the our due contacts, light of the fact and parte whole, proceeding not as to individu- our of the record reveals review al defendants. case have been limited contacts this procedural most minimis harmless de LeGrand, In we were confronted with the (such ascertaining whether Ward matters question single far more serious defen- prosecute a sanctions motion would indeed subjected who was to both criminal and dant behalf, the court could on the Crowes’ so stated; contempt civil sanctions. We consider bring- it need whether even decide contempt case order involves motion, directing that discov- ing its own of both criminal civil true mixture areas ery be certain conducted it Accordingly, relief. should be character- particularly to be court itself determined purposes appeal. as criminal for relevant), ized to the we find no merit contention permits the This characterization review pro- parte that the ex contacts rendered contempt orders which “fundamentally civil would other- ceeding unfair” such as appealable. not final and remaining right wise Howev- defendants’ violate er, that, necessarily it does not follow even process. due ease, if this is a true “mixed relief’ a Court d pro- must vacate and remand whole ceeding comply for failure criminal Having remain concluded Corp. v. Financial In Lamar[ procedure. process rights ing due defendants’ Adams, (5th Cir.1990) ], 918 F.2d by the themselves violated reviewing and remanded question re vacated procedures, potential portion the criminal of the order but af- maining is the violation whether CNA portion finding the rights pro- “tainted” the firmed the civil after Tone’s somehow government process. parte due A state material submitted violation of constitutional reviewed in camera the court violated procedural rules court's failure to follow its own rights process subsequent pro- in a witness's due ceeding raise a does of itself federal constitutional contempt refusing hold him corpus."); question cognizable re in habeas testify, procedure does not occur "while Eisenberg, Unit B 654 F.2d Cir. justified”); frequently, when is not forbidden 1981) Sept. (finding process no due violation Witness, (2d Jury In re Grand discovery questions); parte hearings Chan ex Cir.1987) ("Appellant during the next asserts that INS, (5th Cir.1981) ("[The government presented contempt hearing immigration judge, deportee] argues that the affidavit, parte district court with sealed ex reopen, motion the time of his violated robing adjourned to discuss it out- room engaged process in ex when he communi- counsel, presence of ... ... [and] side the deportation officer.... Chan has cations with a right his to a fair this submission denied him alleged allegation that the ex failed make hearing.... procedures by the [T]he followed immigration parte communications between appellant adjudicating in in civil district court contempt deportation judge at time of and the officer deprive pro- him either of due did reopen prejudiced the of his the motion to merits hearing.”); Fitzgerald a or of fair cess law Therefore, may due not claim that his case. (D.Mass. F.Supp.2d Kingston, 124 v. 13 violated.”). process rights were 1998) ("[The alleges defendant] that the ... parte receipt ... of the additional information ex See, Lutz, 95-17040, e.g., v. No. United States process procedural ... ... his due violated (9th Cir.1996) F.3d 711435 WL rights.... parte receipt addi- the ex of [W]hile ("[The (unpublished) that defendant] contends subject suspen- on of tional information process rights course due were violated in the his (even con- culpable the Town's counsel sion this because the district section motion argument was not ceded at oral that omission government] [the ... to file ex court allowed practice), good it did not rise to constitutional parte [T]he district court did not motions.... judicial-type hearings re- are not level. Full authority granting engage exceed when allowed or quired its in when local boards motions.”); cases, this, government permits, ex In re revoking to file [even] in such (2d professional Jury Subpoena, occupational 72 F.3d 276-77 Grand the revocation of omitted) (em- 1995) license.") discussing (quotations (stating, in and citations Cir. the context of added). phasis provide ex failure to a witness with whether the that, finding had not its discretion court abused noted where the of bad district the civil relief. granting faith is on “an view based erroneous clearly law or on a erroneous assessment of LeGrand, at light 169-70. evidence,” imposition of the “ sanctions is precedent, we are confident we have ” ‘necessarily [an] [of] abuse discretion.’ path by making an the correct indi- followed Dawson, F.3d at (quoting Cooler & right of each vidual evaluation defendant’s 384, 405, Corp., Gell v. Hartmarx 496 U.S. process, analysis and concludе that our (1990)). 2447, 110 110 S.Ct. L.Edüd 359 procedural Tone’s claims is CNA and irrel- evant to the outcome for the defen- case, In this at we note the outset proce- dants.26 we found the Because have facially the district court make a did individually dure sufficient as defendants finding sufficient when it ruled that all of the Bieek, Fiedler, Burns, Burnthorn, Wright, sanctions engaged defendants had a con Berry, we therefore decline reverse spiracy willfully by defraud the Crowes process, their want of due concealing Policy the D&O them. proceed arguments. to their other question sole for this court is whether that B finding was based on “an erroneous view of clearly the law or on a erroneous assessment very last, Turning, long substance of the evidence.” case, of this the sanctions defendants next argue clearly that the district court erred in Dawson, As indicated when sanc required making finding its bad faith con- imposed power, tions are under the inherent regard duct. With to sanctions defendants investigation legal our evidentiary suf Bieck, Burns, Fiedler, Wright, Burnthorn, ficiency particularly probing. is The hand of obviously Berry, must we consider this court, district as we are reminded argument, procedural as we have found Court, Supreme is sometimes wont to be basis for a reversal those defendants’ sanc- imperial, dips and when the question tions. We also consider this merits into power, its reservoir of inherent the at Tone, however, as to CNA torneys practicing likely at its bar are to be us to because it allows determine whether setting. their most vulnerable Because them, proceeding can be dismissed as to direct democratic controls available thereby avoiding potentially vexatious guard against power the inherent of indi jeopardy double concerns would be must, judges, appeal, vidual we assure by remand in light raised the crimi- power is exercised the most nal their nature of sanctions. . careful manner This means we will probe get the record detail underlying legal facts and ensure the suffi above, noted “the threshold for As ciency support of their for the district court’s power the use of inherent high.” sanctions is generalized finding more faith.” “bad Elliott, impose at 217. “In order F.3d defendant] under in [a power, herent specific court must make a

finding acted [defendant] ‘bad The basis for the district court’s Star, faith.’” finding Chaves Medina faith in bad this case was an M/V (5th Cir.1995). attempt Where the to defraud. two There were distinct disbarment, sanction required have sup classes of conduct cited court in the finding First, that port theory. this be on primarily, based “elear-and- of this Medrano, convincing” re evidence. See In district court found that all of the sanctions (5th Cir.1992). willfully We have defendants failed to disclose the 26. Obviously, proceeding in proceeding dure sanctions involv- in a mixed not does constitute here, ing (or, quasi- both criminal ‍​‌​​​‌​‌​‌‌​​​​​‌‌‌‌​​​​​​​‌​‌​‌‌‌‌‌‌​​‌​​‌‌​​‌​‍civil reversible as to the error civil defendants. As to criminal) defendants, defendants, procedure proper simply is those there is no to entitlement provide safeguards throughout. heightened procedure, criminal preju- full to and therefore no merely proper proce- deprivation. note that a lack of criminal dice in its in this case could be Policy despite having a the Crowes D&O to Second, duty respond accurately to premised it. the district on duty known to reveal directly im- discovery requests, either found some of the defen- to court misrepresenta- theory aiding a engaged plicated in affirmative or under dants reason, misrepresentations in an at- near For this we will constrain abetting.29 tions or Clearly, a policy prong secret. tempt keep analysis to failure-to-disclose our grounds duty.30 theory, would be sufficient to theory either of these this to Under this finding a of bad faith conduct. The support question becomes whether the record is the record is sufficient to question finding whether supports a that the sanctions defen- support them. knowingly response a false dants either made discovery request, knowingly to a or assisted respect to the first asserted With false making concealing or a someone else dispute particular no ground, there is response. thorough After a of the review to failed disclose the sanctions defendants record, have that it is com- we determined however, clear, is the Policy. the D&O Lеss pletely point on this as to all of insufficient a to which this omission constituted extent except Berry. defendants duty known to act. In willful breach of some to respect With the second asserted opinion, court theorized two its the district misrepresentations, ground, affirmative First, duty a principal general duties: 4.1(a) complex. dispute less Rules is applicable policies prior to insurance reveal 8.4(c) settlement;27 second, quite Louisiana Rules31 are of the specific duty a more attorneys lie clear in mandate that discovery requests.28 their respond accurately to representation. ques- however, in the argument, conceded course At oral War'd they trailblazing subject to the sanctions of Based on somewhat case of would Zimmerman, court. Spaulding v. 263 Minn. discovery gave (1962), progeny. Mr. Ward: I think the devices and its dubious N.W.2d duty. prob- But this is the rise to initial Spaulding, the court held that a defendant had have, you you is when move over to lem settlement, duty greater knowledge of the extent to reveal his gentlemen clients their plaintiff's injuries of a in the context settle- parties duty aware that certain become approval. requiring at 709. Id. ment something. getwe And into disclose globo problem glo an in ... settle- an duty need 28. A that should no further clarifica- know, the record’s ment. All 3.3(a)(2) Rule Rules of tion. Louisiana clear; very every very defendant knows ... expressly provides that "[a] Professional Conduct questions discovery that I have asked knowingly lawyer shall ... fail to disclose So, give ... rise to duties to disclose. what reveal,” required by that which he is law to you duty you when do have know what expressly power have held that inherent sanc- fraud, you perpetrating a as- someone’s discovery appropriate response are an tions sist, you’re going achieve benefit from or Carroll, (noting at 293 violations. See F.3d it? discovery disruption pro- that "intentional recognized that is in the [is] cess misconduct matter, general we will not consider 30. As a sense, rules, respect for the common and in urged par arguments by the that have not been processes”) Thompson v. appeal. ex rel. ties on United States Corp., 125 Healthcare Columbia/HCA me, is, problem, uh like 29. The Court: The 1998). passing, Cir. We note in 903 n. 3 negotiations, just general proposition, as a no we, constrained, however, that, were so we not everything lawyer obligated tell that he has Ward, find it difficult to like would nonetheless puts it the table. before any non-discovery-related duty identify that re ap quired to reveal all the sanctions defendants Absolutely. right. Ward: Mr. That’s policies plicable opposing counsel insurance mean, So, here, just uh ... let’s The Court: I Spaulding was an case case. unusual proper interroga- assume there was no range applicability, and with a narrow of factual request tory, proper production, for (when broadly applied) extreme more rather there have been no obli- seems to me would support jurisprudence rule finds no lawyers gation reveal existence circuit. policy. you agree with Do that? CNA percent, agree you 100 Mr. Ward: I every profes- provisions Judge. parallel I 31. And That’s true. think there would be See, code, responsibility argument— matter. an sional example, 8.4 of ABA’s Rules 4.1 and if these for The Court: So then each of defen- rule, Responsibility. discovery Model of Professional dants some ... Rules violated some sup- discovery whether the simply request, any knowing tion becomes record or of assis- any ports finding response.35 of tance34 of an a de- incorrect There was, however, implicit actually finding misrepre- with an respect lied of fendants Policy. thorough of sentation. The district court held that Burns D&O After a review the willfully a record, misleading made also at statement we have determined that it is July meeting a when he declared settle- partially point on as to least insufficient this proposal $6.2 ment million to be far be- Berry. except all of the sanctions defendants any yond theory coverage. of insurance Fur- thermore, a the court held that Bieck and Wright knowing a during maintained silence CNA, Tone, Fiedler, respect With to this statement. Burnthorn, no or finding there was evi 32 any any supports dence The incorrect answer to dis record the district court’s events, rеquest all, covery willfully much less a characterization of and we unable Furthermore, say to response. clearly false was no the court was error in there declaring any July the facts of the finding meeting, or evidence that defen these anyone even under the willfully making heightened dants clear-and-convine- aided else ing evidentiary concealing response, applicable standard or an incorrect even or sanction of disbarment. Whether the anyone actions they knew that had made an Burns, Bieck, Wright constituted response. Finally, mis- incorrect was no there representation purposes Tone, Fiedler, of the Louisiana finding evidence that or or question, Rules is a better but one which we any engaged Burnthorn ever affirmative juncture. not reach need at this misrepresentations respect D&O CNA, Tone, Fiedler, Policy. As to regardless For “misrepresentation,” of this Burnthorn, the finding district court’s bad purported the district court base find- faith clearly conduct was in error therefore ing exclusively of bad faith conduct on a imposition and its of sanctions an abuse duty breach of the Policy. to reveal the D&O discretion. clarified, just however, As we there was no proper finding foundation a

b. duty defendants a breached known to dis- Burns, Bieck, respect Wright, close, With as the district court finding made no finding there clearly also no or was convinc- that these defendants ever made assisted ing any response33 evidence incorrect to a discovery response. a false As to these three Burnthorn, respect discredited, 32.With essentially we should note evidence was and we initially that there was some evidence of discov- purposes therefore decline to consider it for ery making abuse. her client Dollar's claim of appeal. this privilege response Request Burnthorn (as privileged required by identified the material regard Wright, 33. With see the discussion of 26(b)(5)) Fed.R.Civ.P. as notifications of claim discovery responses preced- Burnthom’s England Company sent to New Insurance ing note. Company only. barely Home Insurance Yet before, week had herself Burnthorn drafted 34. Thе closest that these defendants came to notification of claim to be sent to CNA as well. aiding abetting meeting willful was the identify appear failure to this notice would July meeting, 26. At that it became clear that all conspicuous be an error so that a reasonable possibility three concerned about the justified trier of fact have been in conclud- Berry’s responses discovery were inaccurate. Al- (and-, her, ing through Wright) Burnthorn though the was clear evidence that none of these amade willful omission. appropriate an exercised amount of noted, however, As the district court made no investigating possibility, care neither did finding, though such clearly even it aware of they knowingly Berry perpetrating assist Indeed, response. the nature of the the district fraud. expressly disclaimed on al- reliance leged discovery finding as a violations basis for finding bad part There was a of bad faith failure Wright faith conduct on Burnthorn, assessing Spaulding disclose under the now and in abandoned them, theory duty. Spaulding duty exclusively court relied As the on a breach of case, Spaulding duty. now light longer purposes abandoned In the viable one for of this we treatment, of this disregard finding. conclude that the cited findings the dis- well, finding proceedings, factual the district court’s clearly respect unless court are was therefore trict entitled bad faith conduct Berry’s purported inter- clearly erroneous. error. pretation discovery of his duties was neither c rationally It was proper nor even consistent. decide, silencio, which him sub not for case. Berry a different presents by discovery facially covered documents that he specifically found The district court important, would be and we are cer- request blatantly deliberately knowingly and made make competent no would tain that Requests 5 discovery responses to incorrect presumption. The district court found this seriously dispute that Berry not and 8. does Berry’s explanation inherently be incredi- false, and, with in fact responses his ble, them,36 say finding that this was and we cannot to at one of the record respect least clearly wrоng. conclude that We therefore supports inference clearly the district court’s clearly court err find- the district did knew to be incorrect that he his answer Furthermore, part faith on the of James ing bad conduct time it was offered. Berry. attempt Berry W. court also found district decep up lapse outright with

ed to cover his the Crowes’ repeatedly when he assured tion d paying for would be counsel his clients clearly court erred Because district pockets. of their any settlement out own making required finding of faith con- its bad too, finding, adequate support in the This has part on the of defendants Fiedler duct find specific of these light record. Burnthorn, we and vacate the must reverse court say that the district ings, we cannot defen- imposition of sanctions those Berry concluding en clearly erred in Furthermore, be- because the record dants. conduct, or that the evi gaged in bad faith evidentiary basis possible fore us indicates no to overcome dence was not sufficient faith on proper finding of bad conduct for a clear-and-convincing hurdle. or CNA part of either those defendants swayed from view the We are not Tone, pro- we will dismiss sanctions explana- there have been other fact that no Because we find ceeding as them. Berry’s Berry argues, tions for actions. bad regard finding with clear error instance, D&O not disclose the he did Berry, will part we faith conduct be- past correspondence Policy or the claims lack eviden- his not disturb there simply cause he did not realize sufficiency. tiary policy actual- possibility that the would was a essentially pleads ly cover his He clients. Burns, Bieck, Wright present a respect, stemming from incompetence in this stands, the As it intriguing question. more law. experience his lack insurance finding of bad faith conduct court’s district supported in re- explanation is some This part clearly error because on their finding spects the district in the specific support assigned basis finds Poli- Berry actually mentioned the D&O once above, the As record. noted counsel, referring to it cy to the Crowes’ Bieck, Burns, acted Wright found thаt contradicted, soundly howev- “lapsed.” It is duty they breached bad faith because er, Berry sought by the fact that defense Policy. Yet record D&O disclose poli- clients for his under indemnification no breach of that there was reveals purported conclu- cy with his simultaneous indicates, duty. The record also relevant them. sion that did not cover however, supportable find that there was constitute that would ing of conduct if Even we were content characterize faith, review, misrepresenta in the form bad bungler in a novo Berry as a mere de July meeting. Because case. tion offered authority in this we would have that misrepresentation, which purported perfunctory re- than Even under the more lightly, could a sufficient power not take applicable inherent do view response director client. his fourth sent on behalf of imposition independent an upon basis for the of sanc- would encroachment constitute tions,37 we must ask whether would be court’s con- discretion unwarranted simply proper for this court to affirm the necessity cerns for and in order inherent imposed against these defendants sanctions their use. district court in this case The theory. Because this alternate under imposed duty sanctions breach of a discretionary decision to district court’s sanc- disclose, have now and we clarified that this irreparably these was tion inter- defendants, basis is insufficient as to these breach-of-duty theory twined with the basis, although misrepresentation, another fraud,38 may we have we concluded situation, might In be. this we believe the simply arguably affirm it based on another better course is reverse and vacate the theory. sufficient original imposition district court’s sanc- tions, and, error, any in the absence of other imposition of The sanctions un in light remand for reconsideration of our power particu the inherent is decision der clarification.39 larly committed to the sound discretion of power district court. inherent The was “ expressly derived from that ‘control neces V sarily manage vested courts to their own reasons, For the foregoing we hold that orderly аffairs so as to expe achieve and ” the district court violated CNA Tone’s Chambers, and disposition of ditious cases.’ right process by imposing serious (quoting U.S. S.Ct. Link v. process. criminal fines on them via a Co., civil 630-631, R.R. Wabash U.S. (1962)). procedural We find no regards fault as L.Ed.2d 734 When a “quasi-criminal” suspension reprimand and imposes court district sanctions under the sanctions out to meted the other sanctions power, it is inherent because court has hold, discretion, however, determined, defendants. partic We also that the that the necessary required finding court’s of bad faith ular sanctions are effectuate important clearly in goals particular as to the conduct was error these as to all theory Berry. sanctions particular defendants under its defendants save there- We For fore pow case. this court to affirm inherent REVERSE VACATE the district grounds imposition er sanctions than those sanctions all of expressly imposing Furthermore, chosen these defendants. because the note, regard, 37. We also this rather fine biased than is natural and where unavoidable Bums, Bieck, power distinction between the evidence of inherent The sanctions involved. Wright's "misrepresentation,” mere bring which we fact that court sees fit sanc- consider, Wright give and the evidence of tions motion will rise Burnt- to an inference of abuse, States, discovery improper horn’s which we do not. As bias. See Lemaster v. United above, (6th Cir.1989). expressly 891 F.2d discussed the district court 120-21 dis- any discovery claimed reliance on Burnthorn’s Second, Berry argues that his sanction was sanctions, responses as a basis for which we read clear, unnecessarily severe. think it howev- rejection point. as a misrepresentation of the evidence on that er, particular that the amount of an inherent evidence, hand, on the other power uniquely sanction is to the committed court, rejected by never the district was imposing sound discretion of court. figured impresses having prominently us as case, we are content that the ade- district court background of its decision. quately stances, all of considered the relevant circum- Berry’s apprоpri- and that sanction was Spaulding theory And now abandoned ate there thereunder. Lest doubt on this duty. circumstances, point, again, those were a delib- deception leading potential $5 erate to a million dispense, juncture, say 39. We suspen- with loss. We cannot that a nine-month arguments the Burns, Bieck, practice additional miscellaneous sion from not the least severe sanc- First, Wright, Berry. necessary all tion deter such conduct the fu- remaining Pipeline defendants make several ture. unclear See Gas Am. v. Natural Co. of Inc., undeveloped arguments regarding improper Energy Gathering, Cir.1996) They point bias (noting district court. can us that the "sanction must chosen expressed employ power towards no partiality, possible adequate motive for or evidence of ‘the least however, Dunn, ”) (quoting proposed’ and we can see no end indication Anderson v. (6 Wheat.) (1821)). district court was either more or less 5 L.Ed. 242 with support extensive ex communications insufficient completely evidence Ward, Ward not to disclose the sub- imposed against defendants ordered Burnthorn, Tone, CNA, Fiedler, DIS- stance the communications the defen- dants, testify proceeding them. as a fact and allowed Ward MISS Bieck, Burns, and respect to defendants witness cross-examine other witnesses and With potentially Using we the record suffi- Wright, during proceedings.1 find these un- sanctions, support REMAND to to and precedented procedures operating cient and under for further consideration the district court powers,” its the district im- “inherent court opinion.40 AFFIRM the light our quasi-crimi- posed criminal fines and serious imposed Berry. disbarment, sanctions suspension, reprimand nal and sanctions on the defendants. judgment of the district Accordingly, the and RENDERED as is court REVERSED evaluating proceedings, In the ma- Casualty American sanctions defendants jority correctly proce- concludes that Company Reading, Pennsylvania, Michael comport principles with basic dures failed Fiedler, Tone, Judy L. Burnt- Anne and P. process respect with to the criminal Judgment and RE- is REVERSED horn. imposed fines CNA and Tone. Burns, MANDED as to defendants W. Glenn conclusion, notwithstanding this Ironically, Jr., Bieck, Wright. B. and E. Robert William majority holds that the same defective Judgment is AFFIRMED as to defendant process procedures not did violate due Berry.41 W. James disbarment, quasi-criminal respect part, part, REVERSED in AFFIRMED reprimand suspension, and of defendants REMANDED with instructions. and Burns, Fiedler, Burnthorn, Bieck, Wright, respectfully disagree. I The Berry. and GARZA, Judge, M. Circuit EMILIO powers majority cites no case where inherent part: concurring part dissenting and upheld or imposed have been under sanctions I find In- only appointed procedures, similar and can none. The district court below not deed, thorough of our ease law attorney prosecute Ward review plaintiffs’ and va- same time demonstrates that we have reversed court’s sanctions motion at the disbarment, suspension, reprimand and private own cated that Ward had his sanctions (as troubling in far less circumstances pending the court well as motion before case hand.2 engaged posed than proceedings), civil but also those related decision, adequate provide opportunity reaching failed notice In its the district court 40. Inc., heard); specifically Air the manner which to be v. Associated Center should address Scaife Bums, and, 406, (5th 1996) importantly, (reversing the actions of more 100 412 Cir. F.3d Wright, equated misrepre- attorney reprimand Bieck and can be vacating sanction because purposes of the Louisiana Rules. sentation for was and excessive in relation to the overbroad particular pay Brown, doing, conduct); court In so should alleged 25, v. 72 F.3d United States 1995) attention our command in Thalheim such (5th (reversing dismissing 29 Cir. strictly, resolving ambigu- all rules are be read disciplin suspension attorney because sanction id., attorney. ities in favor See 853 F.2d at ary resolving strictly am must be construed rule 388. charged); biguities person Elliott in favor F,3d 213, Tilton, (5th 1995) (revers Cir. v. 64 217 Judge outstanding regard 41. With Scott's mo- ing remanding attorney sanction because judgment, file an amended tion for leave to finding failed to make of bad district courl faith); bearing that it on the have determined has Star, 153, v. Chaves Medina M/V appeal. issues outcome of motion (5th Cir.1995) (reversing attorney 156 sanction therefore DENIED AS MOOT. magistrate judge failed to exercise because assessing restraint before sanc mandated ultimately Although denied 1. the district court court); power tions the inherent under private week motion one before 336, Corp. Bright, 6 340- Trust v. F.3d Resolution case, issuing opinion in this Ward’s motion 1993) (5th attorney (reversing Cir. disbarment during pending the court the court’s before support record the district because the did investigation entirety hearings Medrano, finding); re bad faith In court's played which Ward such vital role. Cir.1992) (5th (reversing attor F.2d 103-05 Co., See, applied e.g., Vought ney district Dailey because the court v. F.3d disbarment Aircraft (5th 1998) preponderance evidence than (reversing vacating rather Cir. standard); convincing Cun- evidence clear and because the court disbarment Moreover, Supreme Court’s decisions in power eourt’s inherent is that the trial Union, International United Mine Workers may accuser, act as fact finder and 821, 837-38, Bagwell, v. 512 U.S. 114 S.Ct. sentencing judge, subject to restrictions 2563-64, (1994), 129 L.Ed.2d 642 any procedural code and at times not States, 787, 800, Young v. United U.S. by any limited rule of law governing the 2133-34, 107 S.Ct. 95 L.Ed.2d 740 severity of imposed. sanctions that (1987), warnings as our own as well NAS The absence of procedures limitations and CO, Radio, Inc. v. Calcasieu Television & abuse.”) (internal can lead to unfairness or Inc., Cir.1990), 707-08 omitted). addition, citation “[t]o the ex- NASCO, Inc., ‍​‌​​​‌​‌​‌‌​​​​​‌‌‌‌​​​​​​​‌​‌​‌‌‌‌‌‌​​‌​​‌‌​​‌​‍sub nom. Chambers aff'd tent that such contempts punitive take on a L.Ed.2d justified character and are not [] (1991),mandate a reversal of quasi-crimi considerations central contempt pow- imposed nal sanctions under such defective er, procedural protections criminal may be in procedures. 831, 2552, order.” Id. at 114 S.Ct. 114 S.Ct. Accordingly, I majority’s dissent from the at 2559. suspension affirmance of the of attorney-de- Significantly, Supreme both the Court and Berry. fendant I judgment concur our own emphasized court have that disbar- disbarment, reversing suspension, punishment ment is a punitive charac- reprimand Burns, Bieck, Wright, Fiedler, See, e.g., teristics. Ruffalo, In re 390 U.S. Burnthorn, majority’s as well the rever- 544, 550, 1222, 1226, 88 S.Ct. 20 L.Ed.2d 117 imposed sal of the criminal fines on CNA and (1968) (“Disbarment, designed protect Tone; however, I disagree, majori- with the public, punishment is a penalty imposed or ty’s approval unprecedеnted proce- lawyer.”); on the Dailey Vought v. dures that the district court impose used to Aircraft Co., (5th 224, Cir.1998) (“Al- 141 F.3d 229 disbarment, suspension, reprimand though protect disbarment is intended to powers. sanctions under its inherent public, ‘punishment it is a penalty imposed ”)

I lawyer.’ on the (quoting Ruffalo, In re 390 550, 1226). U.S. 88 S.Ct. at We have must, course, “A court exercise caution further concluded that proceed- disbarment in invoking powers, its inherent and it must ings are quasi-criminal adversarial and comply process, with the mandates of due Thalheim, nature. 383, See In re 853 F.2d both in determining requisite bad (5th Cir.1988) 388 (“Attorney disbarment and faith in assessing exists and fees.” See NAS suspension cases CO, quasi-criminal are char- 501 U.S. at 111 S.Ct. at 2136. More acter.”); Medrano, over, In re 956 F.2d 102 “the threshold for the use of inherent (5th Cir.1992) (“A power disbarment high.” proceeding is sanctions is Chaves v. M/V Star, 153, 156 (5th Cir.1995). quasi-criminal adversarial and Medina F.3d nature and law, moving party “Unlike most areas of bears the legisla prov- burden of where ing violation.”); all ture elements of a defines both the sanctionable see also In conduct Ruffalo, penalty re imposed, and the to be contempt civil U.S. at 88 S.Ct. at 1226 (“These proceedings judge adversary leave the offended are solely proceedings qua- of a nature.”). responsible identifying, si-criminal prosecuting, adju Consequently, while dicating, sanctioning disbarment proceedings “quasi-criminal,” contumacious Bagwell, 831, 114 conduct.” criminal, 512 U.S. at rather purely than we have consis- 2559; Productions, tently rejected see also Mackler Inc. procedural claims that civil Cohen, (2d 1998) v. protections 127-29 Cir. are adequate process meet due (“A aspect troublesome of a trial pow See, requirements. Medrano, e.g., In re er impose pursuant sanctions ... to the F.2d at (rejecting the district court’s ningham Ayers, (5th Thalheim, v. 921 F.2d tempt 383, proceeding”); Cir. in re 853 F.2d 1991) (reversing bankruptcy (5th Cir.1988) court's decision to (reversing attorney sus- suspend attorney practice pension "a because rea- because the district court violated due person sonable would have a process by failing reasonable basis for requirements to follow its own questioning judge’s] impartiality [the concerning in the proper disciplinary con- proceedings). procedural protections” sanc- greater when preponderance the evi- application of (as they punitive tions have characteristics do proceeding); standard a disbarment dence here) Brown, giving and where the conduct rise to 72 F.3d States United Cir.1995) (“Because presence the sanctions occurs outside the attorney suspension ais factfinding character, requires the court elaborate punishment in quasi-criminal (as here). Supreme it did id. The Court impose See this sanc- disciplinary rules used to explained partic- a district court strictly must attorneys construed must be tion ularly circumspect exercising its inherent ambiguities person resolving in favor powers proceedings require when the elabo- charged.”). factfinding: rate Furthermore, closely scrutinize must category For discrete indirect con- powers its inherent court’s use of the district however, tempt, procedural protec- civil pow- such to insure that court exercised Contempts tions be insufficient. “Indeed, with restraint and discretion. ers involving out-of-court disobedience Supreme cautioned that ‘[b]e- Court has complex injunctions often elabo- require inherent very potency, powers their cause of Green, factfinding. rate and reliable Cf. must be exercised with restraint discre- n. at 217 S.Ct. at 660 Chaves, (quoting at 156 tion.’” (citation (Black, dissenting) n. 33 J. NASCO, 2132); 111 S.Ct. at 501 U.S. at omitted) (“Alleged contempts committed Pipeline Energy Natural Co. see also Gas beyond presence the the court’s where Inc., Gathering, 2 F.3d 1406-07 judge personal of the knowledge has no Cir.1993) (inherent powers must be exercised especially are for material facts suited only spar- with restraint and discretion held, hearing A jury. trial must be so). being very the seri- ingly “Disbarment called, witnesses must be and evidence is, ample opportunity ous business that And ... cru- taken in event. often why show cause an must be afforded to dispute”). cial facts are close Such not practitioner should be dis- accused contempts court’s do obstruct the States, Theard barred.” v. United U.S. ability adjudicate proceedings the be- to 1274, 1276-77, 278, 282, 77 S.Ct. L.Ed.2d it, depri- the risk of erroneous fore Robinson, (1957); parte see Ex fact- vation from the lack of a neutral Wall.) (19 (1873) 22 L.Ed. 205 U.S. finder substantial. (“Before judgment disbarring attorney an a ample ... oppor- have 833-34, is rendered should at Bagwell, at 114 S.Ct. 512 U.S. defence.”). (alteration tunity explanation At rock original). 2560-61 bottom, “ample present opportunity” Here, majority’s recitation of as the must in- charge defense to of disbarment demonstrates, court was facts and, impartial maker if one clude an decision fac- elaborate detailed required to make See, needed, prosecutor. disinterested presentation con- after the findings tual 831-38,114 Bagwell, 512 at S.Ct. at e.g., U.S. proceed- flicting testimony at the sanctions 2559-64; 800-06, Young, at 481 U.S. testimony ings (including the 2124; NASCO, at 707-08. S.Ct. Ward). attorney giving rise to The conduct from a of com- stemmed series

II off-the-record, out-of-court, plicated, during disputed events that occurred much A fact, negotiations. the district settlement prior to the sanction Supreme explained Bag- court conceded As the Court executive, well, proceedings, “the court knew none legislative, fusion “[the] justi- attempted court judicial powers powers pro- facts.” The district inherent [in attorney plaintiffs’ fy appointment ceedings] prospect ... summons forth appointment that “the by explaining tyrannical is Ward the most licentiousness” and be- important more Bagwell, attorney an was even “uniquely to abuse.” [] liable absolutely knowledge 831-33, According- cause court at 2559-61. at any charges for sane- basis for jurisprudence requires “progressively factual ly, our Accordingly, Bagwell, Young, under at tions.”3 806 n. S.Ct. at terms, 17. In precise type unambiguous 2137 n. the Court proceedings sanction practice appointing condemned a self- depri- the “risk of situation where erroneous prosecutor power interested in inherent con- lack of a vation from the neutral factfinder” tempt Department proceedings: “If a Moreover, Justice id. I See substantial.4 attorney pursued contempt prosecution below, ap- where the district discuss injunction benefiting any of an violation prosecutor pointed a whо con- self-interested attorney client of involved the under- plaintiffs, private represent tinued to litigation, attorney lying open would be (and parte secretly) with communicated ex charge felony.... to a of committing a Fur- prosecutor, court-appointed and allowed thermore, such conduct would violate the prosecutor testify as a fact witness provisions, ABA ethical since during powers proceedings, the inherent “the discharge obligation could of undivid- Chaves, lacking.” [was] mandated restraint loyalty to ed both clients where both have a 47 F.3d at 156. Young, direct interest.” at 481 U.S. principles S.Ct. at The rule and set B Young, particularly light out in of Ward’s sanctions, pending private motion for his ex- States, In Young v. United facts under ex tensive communications with the hand, decidedly similar case at court, witness, testimony and his aas fact Supreme explained appoint- Court that “the directly applicable ease at hand. party ment of counsel for an interested majority attempts “escape the man- contempt bring prosecution at a min- Young,” Op. by asserting date of see opportunities imum ereate[s] conflicts NASCO, decision in that our where we al- arise, and appearance create[s] least the opposing present lowed the use of counsel impropriety.” Young, 481 U.S. at fees, attorneys’ evidence on the amount of is rejected at explicitly S.Ct. 2137. The Court dispositive” “largely regard with to Ward’s argument, the similar the one made the prosecutor. Op. as service at I See 231. accepted by majority, district court and the First, disagree. in attempting to draw a n.23, Op. see at appointment that hand, parallel majority the case at the opposing justified that counsel because asserts that court in “the district NASCO person familiar underlying was most with the primarily on relied the extensive factual de- explained events. The Court that: velopment monetary pro- the potential The for misconduct that is creat- in ceeding finding Gray disbarrable.” See appointment ed the of an interested Op. record, at 232 n.19. The both here and in prosecutоr outweighed by not the fact NASCO, completely refutes this assertion. for beneficiary counsel the of the Indeed, in Judge opinion Scott’s in own this court order often be familiar case, most explicitly in states that NASCO the allegedly the contumacious conduct. rely any court did have to factual familiarity may put That be in to use as- development already because the court knew sisting prosecutor pursu- a disinterested in proceed- all of the facts before the sanction contempt action, ing justify the but cannot ings started: “This was a more serious case permitting private party counsel for the than NASCO Chambers where the court prosecution. be in control of the knew all the facts trial.”5 Judge before II.B, precisely 3. proceedings, Op. As I at Part discuss it is for the see disbarment at infra knowledge because the district court had no majority approves very pro- nonetheless the any the factual basis for the ex- sanctions that process cedures that it concludes violate for Ward, tended ex communications with the criminal fines. testimony well as Ward’s as a witness at factual proceedings, Young, violated the strictures notes, majority Judge Scott 5.As was also the Bagwell,and NASCO. presiding judge proceedings in the in NASCO; thus, his own concession that he knew Although majority "an concedes that initial impression Bagwell appears proceedings all facts of the before the sanctions [of] to mandate" (and faulty procedures reversal of the district court's in NASCO that he knew none of them the in majority at time. states that the ease at the same explicitly distinguished Scott then NASCO, this explaining “arguably presents a far “[i]n hand from case here less .... none facts case knew the court problematic scenario” than NASCO be- absolutely knowledge no private [and] merely Ward’s motion was cause any sanctions.” charges for for factual basis during investiga- pending course of his testimony tion and for the court’s sanctions illuminates the opinion Our own NASCO Op. agree at cannot motion. See 233 n.21.1 case, fundamental distinction between problematic presents “far less occurred out where the sanctionable conduct NASCO, opposing coun- factfinding, scenario.” required elaborate court and NASCO, appropri- testimony to the where did not: “Since sel’s related court, award; alleged in the attorneys’ occurred misconduct ate amount fees proof no need for elaborate there was proceedings not involve an did interested facts, parties NAS- offered none.” private party arguing the sanctions motion CO, 707; id. at 708 see also for district court he had his own while (“There dispute appellants that the did is no motion, pro- private related civil well as did.”). they everything the district court said ceedings, pending before the court. The fun- conclusion, Thus, contrary majority’s Supreme problem that Court damental support cannot read as NASCO recognized appointment with the of an inter- appointment of an interested contempt party prosecute a serious ested simultaneously who testifies opposing counsel the inter- simply is not diminished because out- much-disputed, as a witness to the fact private party argued his yet ested has judge which has no of-court conduct of Young prohibits con- motion. the inherent personal knowledge. interest, importantly, flict of and more Additionally, upholding the when appearance impropriety, that arises NASCO, suspensions specifically distin- private prosecutes party an interested guished Young on the that “the grounds contempts. Young, See 481 U.S. Young, private coun- danger present (“Regardless of whether the at 2137 contempt sel in the would be overzealous private appointment of counsel this case inter- proceedings in an effort to further the (an prosecutorial impropriety resulted present. was not NAS- est of his client” See express opinion), on which we issue CO, explained at 707. potential pri- appointment illustrates hearing at the arguments “[t]he counsel discharge interest to influence the vate entirely mone- to the issue of were devoted public duty.”). tary relied on its sanctions court [and][t]he Moreover, compounded the district court propri- in determining own the research appearance impropriety the its error and [i.e., ety nonmonetary suspen- by having parte extensive NASCO, ex communications at sion disbarment].” plaintiffs attorney in with Ward. See Model Code Because the 707-08. Judicial (“A 3(B)(7) judge a in the played such limited role Canon (1990) NASCO CONDUCT initiate, proceedings, permit, parte that “[t]he sanction we held or consider ex shall not placing communications, avoided counsel court thus NASCO’s or other communi- consider prosecutor in the role of for the disbarment pres- the the judge made to outside cations Here, proceedings.” Id. at 708. we cannot pending parties concerning a ence of the Indeed, if the same conclusion. there make Although impending proceeding....”). the Young ap- is case to which rule majority ex-parte contacts in states plies, one. it is this most de minim- this case were limited “to the matters,” Op. see procedural harmless is and First, undoubtedly had an interest Ward contention. The at the record belies this proceedings because court’s sever- opinion court’s own documents represent plaintiffs in relat- continued to parte the ex between private al of communications proceedings ed civil had his own court: pending the court and the motion for sanctions before Ward hand) majori- than the assertion to case at is more contrary. persuasive ty’s Thereafter, long majority’s several conversa- The citation to the we had “extensive affording little or trying weight tradition of no Ward determine tions with Mr. contacts,” parte Op. isolated ex see at 234- addressing be taken what action should n.25, support n.24 provides & emphasizing the fact this matter and approving parte the extensive and secret ex absolutely nothing the court knew in the case at Signifi- communications hand. alleged fraud in the settlements.... cantly, by majori- cited none of the cases Naturally we called Ward several occa- ty involve the district exercise of its support sions but he of no facts to knew Furthermore, powers. inherent none of the allegations his of fraud. pаrte cases involve ex communications with considering experi- We both felt that attorney private as a acting prosecutor attorneys court; ence and character in this for the of the cases none involve ex suit, given chance should those who parte attorney with an communications who were not clear themselves private involved to with- sanctions motion civil court; being openly out pending accused and forced to claims before and none parte defend in court. themselves cases include ex communications attorney with an who testified as a ma- Smith, 92-2164, slip. op. See Crowe v. No. at jor proceedings. fact-witness in the (W.D.La. 25, 1996). July 32-33 Finally, prosecuted although Ward Moreover, gave the district court Ward court, sanctions on behalf of the he also explicit instructions not disclose the nature during testified as a fact-witness the disbar- parte the ex communications to the defen- reasons, ment For proceedings. obvious dants and denied several motions prohibit Rules of Professional Conduct attor- seeking apprised to be ney testimony under most circumstances. nature of In light these communications. of See Louisiana Rules Professional Con- by plaintiffs’ attorney the three hats worn ed.) 3.7(a) (1995 (“A lawyer duct Rule shall (i.e., witness, prosecutor, fact pri- Ward not act as at a trial in advocate which the attorney opposing party), vate for the lawyer likely necessary be a wit- parte district court’s secret ex communica- ness-”). again, majority Once at- prosecutor private tions with the create an tempts analyze independently, this error overwhelming appearance impropriety. instead of in of Young, Bagwell, the context 833-34, Bagwell, 512 S.Ct. at Cf majority and NASCO. The cites a “wide (setting 2560-61 forth the circumstances un- bankruptcy swath” of district court deprivation der which the risk of erroneous proposition general cases for the from the lack of a neutral factfinder is sub- barring testimony rule ap- does not stantial). majority attempts to avoid ply testimony judge, when is “made to a by analyzing conclusion the ex jury.” Op. 38-40. significant See It is independently, they communications as if did note, however, that none of the eases cited not occur in pow- the context the inherent majority testifying attorney involve contempt proceeding ers where Ward was appointed who is prosecutor also the acting prosecutor as the testifying well as court. The same fear leads us to bar (“With Op. before the court. at See attorney jury testimony trials —ie. exception attorney testimony issues (the jury) the factfinder would tend to be- parte and ex separately contacts discussed lieve testifying more than an below, we can find no serious deviation from ordinary applies when testify- witness — procedure expressly approved in (here, NASCO ing attorney represents the factfinder ”).— powers court) (as Because normal) inherent “must be private rather than discretion,” exercised with restraint party. Supreme As Court in Bag- noted NASCO, 2132, well, at at U.S. S.Ct. deprivation “the risk of erroneous from the majority failing errs in to consider the ex the lack greatest of a neutral factfinder” is appropriate when, here, in the judge communications con- personal like has no text conjunction proce- and in with the knowledge of the material facts that are the dural Bagwell, deficiencies. basis for the sanctions. See 2560-61; 834, 114 id. at see also at S.Ct. 831-32, (“Contumacy ENTERTAINMENT, Gerry INC., at at POWER Griggs, Thurmond, hu most vulnerable and Robert often strikes temperament, and judge’s Plaintiffs-Appellants, qualities of a man executive, judi legislative, fusion of it’s prospect powers summons forth cial NATIONAL FOOTBALL LEAGUE licentiousness.”) (in tyrannical the most PROPERTIES, INC., Defendant- omitted) (al and citations quotations ternal Appellee. original). terations

No. 97-20812. Ill Appeals, United States Court Fifth Circuit. thorough search the relevant After law, Aug. in which a I found case case have ones procedures court like the district used sanctions, impose powers let

here to inherent procedures upheld on

alone where such Particularly where the court

appeal. district attorney to

appoints opposing the interested contempt, engages in secret ex

prosecute the attorney, with the

parie communications testify attorney to a fact wit-

allows the

ness, condoning court district errs powers. inherent NAS-

court’s use See (“Be-

CO, 111 S.Ct. at 2132 U.S,. very potency, powers of their inherent

cause

must be with restraint and discre- exercised

tion.”). unprecedented light of these procedures, I that the

unparalleled conclude provide process court failed to

district disbarment,

imposing suspension,

reprimand sanctions. In direct contradiction NASCO, ‍​‌​​​‌​‌​‌‌​​​​​‌‌‌‌​​​​​​​‌​‌​‌‌‌‌‌‌​​‌​​‌‌​​‌​‍warning our role “plac[ed] [plaintiffs] in the

here counsel proceed- prosecutor for the disbarment NASCO, According-

ings.” F.2d at 708. majority’s I

ly, respectfully dissent suspension attorney-de-

affirmance Berry approval pro- and its

fendant

ceedings used in case.

Case Details

Case Name: Crowe v. Smith

Court Name: Court of Appeals for the Fifth Circuit

Date Published: Aug 12, 1998

Citation: 151 F.3d 217

Docket Number: 96-30851

Court Abbreviation: 5th Cir.