*1 8) mitigating factors. aggravating other however, are not guidelines,
The sanction only as a and serve mechanical
rigid and determining proper
starting point In the Matter Ste- disciplinary action. Goodman, 62607 at *5 2001 WL
ven D. 2001).
(S.E.C. Jan. funds with comingled Smith’s
Otto personal for the sake of his own
his own op deprived her of
convenience and legiti funds
portunity to invest those Further, concealed he
mate investment. Although he from Smith.
this use of funds funds, put her ultimately return
did year’s. than risk for more two
funds at her Otto to return Smith asked
When her, attempt
money, he continued to he money her to leave her
ed to convince account,
invested the fictitious WBC months. money her after six
only returned deception in the face of ongoing
Given funds and for the return of her request accept responsibility
Otto’s refusal to funds, agree with
his misuse of Smith’s the NASD’s approve decision to
the SEC’s
imposition sanctions. order is
The SEC’s Affirmed. AUSTIN, Plaintiff-Appellant,
Donald C. OF
AMERICAN ASSOCIATION SURGEONS,
NEUROLOGICAL
Defendant-Appellee.
No. 00-4028. Appeals, Court of
United States
Seventh Circuit. 9, 2001.
Argued April June 2001.
Decided *2 Krasnow,
Henry (argued), C. Krasnow Hobbs, IL, Sanberg, Chicago, Cornblath & plaintiff-appellant. for Chabraja (argued), Michael J. Ross & Hardies, IL, Chicago, defendant-appel- lee. Quinn, Hubert,
Carolyn Fowler & Quinn, IL, Chicago, for amici curiae. POSNER, EVANS, Before WILLIAMS, Judges. Circuit POSNER, Judge. Circuit Austin, neurosurgeon, Donald C. suspended by for six months the American of Neurological Surgeons, Association voluntary incorporated association under not-for-profit Illinois law as a corporation, (he belonged to which he has since re- signed). He brought against this suit Association claiming he had been sus- pended “revenge” having testified as an expert plaintiff witness for the brought medical suit Association, another member of a Dr. argues suspen- Ditmore. Austin that the (federal sion jurisdic- violated Illinois law parties’ tion is based on being citizens states) damages of different and seeks expert- measured the decline witness income a consequence suspension. injunction He also seeks expunging suspension, the record of the but he does not seek reinstatement membership.
Ordinarily
dispute
between a
voluntary association and one of its mem
contracts,
governed by
bers is
the law of
parties’
obligations
contractual
being
charter,
bylaws,
any
defined
other
or regulations
rules
of the associa
tion that
legally
are intended to create
See,
obligations.
e.g.,
enforceable
Head v.
Hospital,
Lutheran
Ill.App.3d
General
682,
766,
921,
114 Ill.Dec.
516 N.E.2d
(1987);
Chicago
High
Perkaus v.
Catholic
604,
Neb.App.
Lodge, 9
619 N.W.2d
League,
Ill.App.3d
Athletic
School
(1986);
(2000),
Employees’
Ass’n
94 Ill.Dec.
Benefit
— So.2d -, -,
Walker,
(Ala.
Grissett,
Dawkins v.
732 So.2d
(Ala.
at *5
1998))
2001 WL
too,
No.
illegality
the latter
since
—and
*3
2001);
16,
v. Kаnsas
Robinson
March
a conventional basis in contract
is
law
Ass’n, Inc.,
Activities
High School
State
contract, see,
rescinding
e.g.,
a
E. Allan
136,
836,
(1996); 2
844
Kan.
917 P.2d
260
(3d
Farnsworth,
5.1,
§§
Contracts
5.8
ed.
Phelan,
Enterprises:
Nonprofit
Marilyn E.
1999), including
bylaw
provi-
a
or charter
Trusts,
Associations
Corporations,
pursuant
sion
to which a member of a
(2000).
14:03,
§
14-12
Austin does
p.
voluntary
expelled.
has been
association
him the
suspending
that in
Associa
argue
See, e.g.,
High
Crandall v. North Dakota
any of its contraсtual
violating
tion was
Ass’n,
921,
School Activities
261 N.W.2d
recognizing
to him. But
obligations
(N.D.1978).
925-26
“bad faith” adds
What
standing
profes-
in a
membership
good
obscure;
litany
grounds
to
is
it can
the
a
may be essential
to
sional association
component
regarded
either as
of the
livelihood, Illinois like other
professional’s
process analysis, analogous to
re-
due
legal rights
has conferred additional
states
in an
quirement
impartial
of an
tribunal
(not
voluntary associations
on members of
case,
ordinary
implied
or as an
process
due
associations). A
limited to
term the contract between the associa-
can show that
the associa
member who
tion and its members.
complains
sub
tion’s action of which
procedural irregularities
There were no
stantially impaired
economic
here —Austin received notice and a full
procedural
of his can
suit on
interest”
base
(denial
(with counsel)
process”)
panel
of “due
or
before a
irregularities
contractu
faith as well as on the usual
in his
implicated
bad
Association members not
Vinci,
Daele v.
51 Ill.2d
grounds.
al
Van
dispute
complaint
with Ditmore. The
is
(1972);
389,
728,
National
731-32
282 N.E.2d
acted in bad
rather
the Association
Sporting
oc.
Goods Wholesal
Ass
disciplines
faith
it never
members
because
ers,
Marketing Corp.,
Inc.
F.T.L.
779
v.
testify
malpractice
on behalf of
defen-
who
Cir.1985)
1281,
(applying
F.2d
1285
plain-
from
dants as distinct
law);
v. New York Rac
Illinois
Jacobson
against public policy
tiffs and that
is
Ass’n,
144, 350 N.Y.S.2d
ing
33 N.Y.2d
discipline
association to
765,
(1973);
Falcone
768
testimony
of trial
member on
basis
County
Society,
Medical
v. Middlesex
intentionally
unless the
(1961);
A.2d
796-97
N.J.
false.
America,
Sports
Freeman v.
Car Club of
testify
to
Austin had been retained
(7th Cir.1995)
Inc.,
51 F.3d
laryn-
of a woman whose recurrent
behalf
law);
v. Gold-
(applying Indiana
NAACP
damaged in
geal
permanently
nerve was
(1996);
ing, 342 Md.
679 A.2d
fusion
of an anterior cervical
course
Phelan,
14:03,
14-
supra,
pp.
§
14-10 to
Ditmore,
resulting
Dr.
performed by
grounds
list of
11. The cases add to the
cord,
paralyzed
difficulty
vocal
swallow-
a suit violation of the association’s
for such
breath that ultimate-
ing, and shortness of
bylaws and contravention of
charter or
tracheostomy.
undergo
ly required her
(viola-
ground
public policy, but the former
operation
An anterior cervical fusion is an
just
bylaws)
another
tion of charter
spinal disc at the
repair
a herniated
voluntary-association
way
assimilating
operation
The
is called
(see,
back of the neck.
contract
besides the cases
law to
law
into
earlier,
surgeon
cuts
Valkenburg
Liberty
“anterior” because
Van
cited
front,
is,
prevention
injuries
traction
to the
through
[re-
spine
(“re-
neck,
push
aside
being
careful
laryngeal]
current
nerve is not to retract
tract,”
in front
lingo)
in medical
the tissues
Although
into the
tissues.”
vigorously
soft
According
spine.
lawyer appears
neither side’s
to have been
trial,
give
at
permitted
that Austin was
fact,
reprint-
aware of the
both articles are
majority of neurosur-
he believes and “the
appellate
ed in full in the
record—in fact
plaintiff
geons”
concur that
would
Ralph
twice. The citations are
B. Clo-
permanent inju-
could not have suffered
ward, “Complications of Anterior Cervical
laryngeal nerve unless
ry to her recurrent
Treatment,”
Operation
Disc
and Their
careless,
had
because
Dr. Ditmore
(1971);
Surgery
Robert G. Wat-
abnormality that
no anatomical
she had
*4
kins, “Cervical, Thoracic, and Lumbar
injury to
might have
such an
re-
enabled
Complications
Approach,”
—Anterior
surgeon’s
on the
negligence
sult without
Complications
Spine Surgery
though
disciplinary hearing
in the
it
—
(Steven
1989).
R. Garfin ed.
that,
laryn-
emerged
because the recurrent
supports
Neither article
Austin’s testi-
see,
geal
is difficult to
and often is
nerve
mony.
making
gеneral
Cloward was
operation, may
during
not seen
be
statement
reassurance about the avoid
par-
impossible to determine whether
unusually
ability
patient’s
suscep-
complications
pet
ticular
nerve is
of serious
of his
injury.
tible to
Austin testified that Dit-
operation,
anything specifically
not
to do
operation
more must have rushed the
permanent
with the risk of
to
damage
no
evidence of
(though there was
other
laryngeal
recurrеnt
nerve. Watkins never
that) and as a result retracted the tissues
suggested
injuries
that all traction
to the
adjacent
laryngeal
to the recurrent
nerve
laryngeal
pre-
recurrent
nerve could be
roughly.
pointed
too
As Ditmore
out at
by gentle
vented
retraction. Austin admit-
however,
hearing,
hardly
Austin could
that
ted
he hadn’t discussed the matter
expert
be considered an
on anterior cervi-
any
professionals.
with
other medical
Ex-
fusion,
performed оnly
cal
having
25 to 80 pert
contrary
evidence
giv-
to Austin’s was
years
practice,
of them in
than 30
more
jury
en and the
returned a verdict for
although
performed
large
he had
number Ditmore. That was in 1995. Ditmore
operations.
of other cervical
Ditmore in
promptly complained to the Association
performed
had
contrast
anterior cervi-
suspended
and Austin was
in 1997 follow-
exactly
per-
cal fusions—with
one case of
ing
hearing
at which he and Ditmore
damage
patient’s
manent
to a
recurrent
testified, the
to the
latter
effect
Aus-
nerve,
laryngeal
namely the case of the
tin
testifying
had no basis for
that most
patient
him.
who had sued
neurosurgeons agreed with his view. This
hearing
Dr. Austin
at the
claimed
quickly
suit followed
on the heels of the
opinion
by
he had based his
on an article
suspension,
granted
and the district court
Cloward,
by
Ralph
Dr.
described Austin as
summary judgment in favor of the Associa-
fusion,
the “father” of аnterior cervical
tion.
compli-
which had concluded
“serious
article,
Oddly, apart from Cloward’s
prevented
can
cations are avoidable and
prove-
the Watkins article of unknown
surgeon adhering strictly
(unknown
is),
lawyers,
nance
surgical technique
for” an
described
ante-
no literature on anterior cervical fusion or
fusion;
article,
rior cervical
and on another
injuries
laryngeal
to the recurrent
nerve
date,
identify
which Austin did not
or
oth-
presented
author, was
either to the Association’s
er than
the last name of the
kins,
court,
key
which states that “the
Wat
board
to the district
al-
liability
surgeon,
financial or
for the
literature had
sense
some additional
though
malpractice trial
plainly
attempted
at the
not
presented
and since Austin
had
up-to-date
is an abundance
and there
opinion
profession
to sound the
of his
easily
literature
retrievable
relevant
determine whether a
of the na-
discover
There we
the World Wide Web.
neurosurgeons
tion’s
thousand
several
dam-
cursory
permanent
search that
view,
agree
unorthodox
there is
with his
is a
laryngeal nerve
age to the recurrent
irre-
little doubt that his
fortunately
complica-
rare
though
known
sponsible and that it violated a number of-
(a
anterior cervical fusion
tion of
sensible-seeming provisions of the Associa-
paralysis
52 cases of
study found
provi-
еthical code. These include
tion’s
70,000
laryngeal nerve in
the recurrent
requiring that a
appearing
sions
member
percent)
operations
such
—.07
testify “pru-
as an
witness should
See,
patient
should be warned.
which
such,
dently,”
“identify
personal
must
decision.com, http://www.in-
e.g., informed
generally
by other
opinions
accepted
formeddeeision.com/options/cervi-
neurosurgeons,”
“provide
and should
wvneuro.com,
cal/crvfusna.htm;
court with accurаte and documentable
http://www.wvneuro.com/anterior_cervi-
opinions on the matters at hand.”
headpain.com,
cal_fusion_page_l.htm;
*5
neu-
http://www.headpain.com/p_acf.htm;
of
The dismissal Austin’s suit
rosurgery.org,
http://www.neurosur-
with,
begin
unquestionably correct. To
nt/detail.asp? Disor-
gery.org/health/patie
failed to show that an
economic
derID=36. Asked on cross-examination
interest,”
interpret
as the Illinois cases
the
why the
malpractice
explаin
at the
trial to
term,
in
Membership
is at stake.
the
not confirm his view
medical literature did
Neurological
of
Sur
American Association
think,
neurosurgeons
a
of
what
precondition
practice
a
geons is not
lamely that the “medi-
responded
Austin
neurosurgery.
The AANS is not even
in
colegal atmosphere
we’re
these
only
surgeons,
of such
the
association
days”
surgical
had deterred the
communi-
though
were told without contradiction
particular
ty
acknowledging
from
that this
premier
Austin contin
that it is the
one.
fusion
complication of anterior cervical
practice neurosurgery
to
notwithstand
ues
only through
surgeon’s
could occur
the
suspension
subsequent
volun
ing his
negligence.
Association, and
tary resignation from the
aside,
But that is an
as we do not under-
even
he doesn’t
seek reinstatement —
contending that
the
stand Austin to be
record
expungement
of the
damages
support
an infer-
inadequatе
record is
Indeed, de
disciplinary suspension.
of his
that his
was indeed irre-
ence
to testi
spite
suspension,
the
he continues
sponsible.
neither article on which
Since
in med
fy extensively
expert
as an
witness
(for, just
disciplinary
he relies
as
the
True,
income
ical
cases.
his
court,
district
he cites
hearing and
percent of
testifying has fallen to 35
from
court)
no other literature
this
states
it
suspension,
what it was before the
when
injury
the recurrent
permanent
$220,000 year. Austin’s
was more than
laryngeal
patient
nerve of a
with a normal
drop in income as “di
brief describes this
negligence
never occurs without
neck
that is a
“catastrophic,” but
sastrous” and
surgeon,
and since his
Thirty-five
hyperbolic characterization.
would,
accepted
by making
if
position
$77,000—
$220,000
healthy
is a
percent of
surgeon
against any
an insurer
serious
merely
it were Dr. Austin’s
and this is
fusion,
cervical
mishaps in an anterior
income,
from a side-
risky
moonlighting
income
operation exceptionally
make the
plaintiff
for the
that the defen-
profession, which is
primary
line to his
expert
an
wit
neurosurgeon,
not
natural
irresponsible,
that of
dant believes is
(he
title of
not claim the dubious
ness
does
complain
for the defendant to
to the Asso-
witness”).
expert
That is
“professional
ciation;
irresponsibly
a fellow member has
body blow that the
kind of
him
If a
negligent.
member
labeled
they
mind
speak
when
cases have
plaintiff
testifies for a
Association who
jeopardized
interest”
“important economic
happens to believe
defendant’s
voluntary
association.
by the action of
expert
irresponsible,
witness was
he is
Vinci, supra,
Daele v.
Compare Van
likely
complain,
much
because that
less
731-32,
expulsion from an
N.E.2d at
where
(and
of the Associa-
fellow member
independent
grocers
retail
association of
tion)
negligеnce
has not accused him of
plaintiff grocer
potentially
at a
placed the
him
practice
harmed him in his
or forced
disadvantage by
catastrophic competitive
him
gotten
to stand trial or
into trouble
him access to the volume dis
denying
liability
asymmetry
with his
insurer. The
counts that the association obtained
points
that Austin
to as
of bad
evidence
least,
very
the associ
suppliers.
its
At the
all;
faith is thus no evidence of bad faith at
jeopardize
principal
must
ation’s action
and he has no other evidence of bad faith.
livelihood,
professional’s
source of the
Compare Falcone v.
not a mere sideline.
support
In
further claim that
County
Society, supra,
Medical
Middlesex
against public policy
it is
for a
170 A.2d at
where
refusal of
association to sanction one of its members
society
duly
to admit a
li
local medical
(as
irresponsible
distinct from know
physiсian membership prevented
censed
false)
ingly
testimony,
argues
Austin
practical
practicing
him as a
matter from
the threat of such sanctions is
deterrent
*6
by denying
surgeon
as a
and obstetrician
expert
so a
giving
to the
of
evidence and
hospitals.
him
local
access to
Where
to,
with,
indeed an interference
disservice
(or
membership
optional, expulsion
sus
is
justice.
disagree
the cause of civil
We
and
admission)
pension, or denial of
is not
likewise;
think the courts of Illinois would
important
deemed the invasion of an
eco
professional self-regulation
kind of
this
nomic interest.
Treister v. American
impedes
than
of
rather furthers
the cause
Academy Orthopaedic Surgeons, 78 Ill.
of
justice. By becoming a member of the
501,
746,
App.3d
33 Ill.Dec.
396 N.E.2d
prestigious American Association of Neu
(1979);
Beverly
Finn v.
1231-32
rological Surgeons, a fact he
not ne
did
Club,
565, 225 Ill.
Country
Ill.App.3d
in
glect
to mention
his
in the
(1997);
1191, 1193
Dec.
683 N.E.2d
Ditmore,
malpractice
against
suit
Austin
Snyder,
Ill.App.3d
Lee v.
220 Ill.
(1996).
credibility
expert
Dec.
wit
boosted
as
The Association had an interest—
ness.
But there is much more that
is
community
large
at
had an interest —in
no
for
wrong with this suit. There is
basis
being
Austin’s not
able to use his member
Austin’s claim that the Association enter
juries
ship
judges
to dazzle
and deflect
only complaints against
tains
members
skeptical scrutiny
the close and
that shod
testify
plain
who
of malpractice
behalf
dy testimony deserves.
It is no answer
tiffs.
is
that
all
What
true is
date
keep
judges
can be trusted to
out
few)
(but
complaints
very
there have been
testimony. Judges
experts
are
in
such
members;
have
such
but
us,
any
except
escapes
field
law. Much
reason is at
If
once obvious and innocent.
field,
especially
highly
such
technical
a member of the
is
Association
sued
malpractice
gives
neurosurgery.
and another member
When a member of
if a judge
association makes
and concede that
rules that a
professional
prestigious
absurd,
proposed expert’s testimony
not on their face
is inadmissi-
representations
neurosurgeons
irresponsible,
ruling
that a
because
is a
such as
ble
particular type mishap
is proper predicate
believe that
disci-
surgical negligence,
result of
invariably
pline.
enough;
judge
Fair
a surgi-
is not
judge may
question-
no basis for
have
cal expert
ruling
and his
on the admissibil-
bеlief,
if
ex-
ing the
even
the defendant’s
ity
expert’s
may
of an
witness
in error.
contrary.
pert
testifies
ruling
But
token the judge’s
same
expert testimony
is admissible should
rule,
true, requires
Daubert
it is
The
not be taken as conclusive evidence that it
judges
proposed expert
to screen
wit
responsible testimony.
is
carefully
nesses
to make sure
their
responsible,
will be
Daubert v.
great
skepticism
There is a
deal of
about
Pharmaceuticals,
Inc.,
Dow
Merrell
exрert evidence.
It
is well known that
579, 113 S.Ct.
tion interest, Dr. Austin important economic Associ
may challenge not the courts the procedure private, internal under
ation’s Vinci, v.
Illinois law. Van Daele Ill.2d (1972). As that case, in
holding dispositive my of this proceed predict
view we need Ilhnois would find the
whether Associa procedure public policy.
tion’s violation Res., Inc., Disher v. 873 F.2d
Cf. Info. (7th Cir.1989) (“We are reluctant
opine unnecessarily questions of state Sales,
law.”); Graphic Sperry Inc. v. Uni Div., Sperry Corp.,
vac 824 F.2d
(7th Cir.1987) (“As a federal court whose
jurisdiction diversity is based on of citizen
ship, particularly arewe hesitant to decide questions
unsettled of state law unneces
sarily.”).
Roger HOLMAN, Petitioner, D.
UNITED RAILROAD STATES BOARD,
RETIREMENT
Respondent.
No. 00-3816. Appeals, States
United Court
Seventh Circuit.
Argued April 2001. 13, 2001.
Decided June