UNITED STATES OF AMERICA, Plаintiff-Appellee, v. WILLARD JOHNSON, Defendant, and H. WESLEY ROBINSON and NATIONAL LEGAL PROFESSIONAL ASSOCIATES, Appellants.
No. 02-1334
United States Court of Appeals For the Seventh Circuit
ARGUED OCTOBER 30, 2002—DECIDED APRIL 24, 2003
Appeal from the United States District Court for the Southern District of Illinois. No. 00 CR 30024—G. Patrick Murphy, Chief Judge.
BAUER, Circuit Judge. Hugh Wesley Robinson and National Legal Professional Associates (“NLPA“) appeal a district court order imposing monetary sanctions after the court determined that Robinson and NLPA (together, “Appellants“) were engaged in the unauthorized practice of law in the Southern District of Illinois. For the reasons set forth below, we find that the district court properly
BACKGROUND
Willard Johnson, the named defendant in this appeal, was represented by court-appointed counsel, Philip J. Kavanaugh III, during pretrial proceedings in the Southern District of Illinois for federal drug-trafficking charges. After Kavanaugh refused Johnson‘s request that Kavanaugh hire NLPA to assist him in the preparation of Johnson‘s defense, Johnson filed a complaint with the Attorney Registration and Disciplinary Commission of Illinois (“ARDC“). Consequently, Kavanaugh moved to withdraw as Johnson‘s counsel.
At all times relevant for purposes of this appeal, NLPA was an Ohio-based firm providing pretrial, sentencing, and post-conviction consulting services, and Robinson served as NLPA‘s Administrative Director and Director of Case Analysis and Research. In 1985, the Ohiо Supreme Court permanently disbarred Robinson from the practice of law following a federal criminal conviction for mail fraud.1 Robinson is not licensed to practice law in any other jurisdiction. In order to market its paralegal services, NLPA routinely provided criminal defendants with literature explaining those services and the method by which a defendant‘s legal counsel might hire NLPA. Since
Johnson contacted NLPA in early 2000 after learning of the organization from a fellow inmate at the St. Clair County Jail, and Robinson replied by lеtter containing a promotional brochure entitled, “Helpful tips you should know when you‘ve been BUSTED!” Convinced of the necessity of Appellants’ services to the success of his defense, Johnson insisted that Kavanaugh enlist NLPA‘s assistance. Relying on his own professional judgment, however, Kavanaugh declined to associate himself with Appellants, prompting Johnson‘s disciplinary complaint against Kavanaugh and Kavanaugh‘s subsequent motion to withdraw as Johnson‘s counsel.
In June 2000, Chief Judge G. Patrick Murphy2 heard Kavanaugh‘s withdrawal motion. Prior to excusing Kavanaugh, the court inquired of, and Kavanaugh confirmed, Appellants’ involvement in the case. Concerned that Appellants might have interfered with Kavanaugh‘s representation of Johnson, the court reacted as follows:
Well I‘ll tell you. This is about—there is a group from Cincinnati, and frankly, I‘ve had them before, and
they‘re, at best, dimwits, and they give advice to these defendants, who, God bless them, don‘t know any better, and they muck up the cases, and they‘re never here when you need them, and I‘m full of it, and I‘m going to prepare the necessary orders, and I‘m going to have whoever they are in Court for practicing law here in Illinois through the mail. I‘m going to have them here, and they‘re going to be sitting right in front of me, and I‘m going to have some questions of them.
On July 11, 2000, pursuant to the district court‘s inherent powers, Chief Judge Murphy filed an order to show cause why Appellants should not be held in contempt of court for engaging in the unauthorized practice of law and why the court should not issue a cease and desist order against their practicing law in the Southern District of Illinois. He further ordered Robinson to appear personally at a hearing on the order to show cause and to bring with him a list of all cases in the Southern District of Illinois in which Appellants had advised criminal defendants or contacted incarcerated defendants.3
At the September 6, 2000, hearing on the order to show cause, the district court heard evidence of Appellants’ conduct in connection with Johnson‘s case and others before the U.S. District Court for the Southern District of Illinois. Ultimately, the district court did not hold Appellants in contempt, but it did determine that they had engaged in the unauthorized practice of law in cases other than Johnson‘s. Chief Judge Murphy reasoned that the practical effect of Appellants’ unsolicited marketing activities targeting criminal defendants was to interfere with
In an order entered on October 22, 2001, the district court placed restrictions on Appellants’ permitted paralegal activities in the Southern District of Illinois and required Appellants to file a signed declaration of fees received in exchange for unauthorized legal services, totaling $22,177.00, to be paid into the court as a monetary
Appellants contest the district court‘s finding that they engaged in the unauthorized practice of law and its imposition of the monetary sanction.
I. Invocation of Inherent Powers
Appellants challenge the district court‘s authority and jurisdiction, pursuant to its inherent powers, to determine that they engaged in the unauthorized practice of law and to impose sanctions therefor. They argue that the court‘s investigation of and imposition of sanctions for unauthorized practice unrelated to defendant Johnson‘s case exceeded the scope of its subject matter jurisdiction, since any issue outside Johnsоn‘s case did not amount to a live case or controversy. Appellants further contend that, in making a finding of unauthorized practice of law outside Johnson‘s case, the district court usurped the state statutory procedure for regulating the practice of law and improperly assumed the “roles of complainant, prosecutor, judge and jury.”
Whether the district court properly invoked its inherent powers is a question of law reviewable de novo. Kovilic Constr. Co., Inc. v. Missbrenner, 106 F.3d 768, 771 (7th Cir. 1997). The Supreme Court has characterized the inherent powers of a federal court as follows:
It has long been understood that “[c]ertain implied powers must necessarily result to our Courts of justice from the nature of their institution,” powers “which cannot be dispensed with in a Court, because they are necessary to the exercise of all others.” For this reason, “Courts of justice are universally acknowledged to be vested, by their very creation, with power to impose silence, respect and decorum, in their presence, and submission to their lawful mandates.” These powers are “governed not by rule or statute but by the control necessarily vested in the courts to manage their own affairs so as to achieve the orderly and expeditious disposition of cases.”
Key among the inherent powers incidental to all courts is the authority to “control admission to its bar and to discipline attorneys who appear before it,” id. at 43 (citing Ex parte Burr, 22 U.S. 529 (1824)), and, as we have noted previously, “a federal court has the inherent power to sanction for conduct which abuses the judicial process.” Barnhill v. United States, 11 F.3d 1360, 1367 (7th Cir. 1993). It follows logically that a federal court‘s power to regulate and discipline attorneys appearing before it extends to conduct by nonlawyers amounting to practicing law without a license.8 Moreover, considеring the serious threat that the unauthorized practice of law poses both to the integrity of the legal profession and to the effective administration of justice, resort to the inherent powers (which, as we stated in United States v. Giannattasio, 979 F.2d 98, 101 (7th Cir. 1992), are “rooted considerations of institutional self-defense“) is an appropriate remedial measure.
Despite Appellants’ arguments to the contrary, the fact that state law provides penalties for the unauthorized practice of lаw does not limit by itself a federal court‘s
II. Unauthorized Practice Finding
Appellants also challenge the sufficiency of the evidence upon which the district court based its finding that they engaged in the unauthorized practice of law. The issue of whether Appellants engagеd in the unauthorized practice of law requires us to examine, as a preliminary matter, what constitutes the practice of law.10 In Illinois, the
What the district court found problematic about Appellants’ activities was not the performance of those permitted paralegal functions. The preparation of pretrial motions and other services offered by Appellants, including recommendations vis-a-vis litigation strategy, might have been permissible if performed at the request and under the direction of a lawyer.11 Rather, what troubled Chief Judge Murphy was the reality that Appellants operated without—and, in some cases, in contravention of—attorney oversight. Appellants’ promotional literature alone, while not the only evidence uрon which the district court relied, is a sufficient evidentiary basis for finding that Appellants’ conduct improperly inverted the at-
III. Imposition of Sanctions
Having determined the propriety of the district court‘s invocation of its inherent powers and its finding of unau-
Because the inherent powers are so broad in scope, they аre to be narrowly tailored in their application. Chambers, 501 U.S. at 44-45 (stating that discretion requires a court “to fashion an appropriate sanction for conduct which abuses the judicial process.“); see also Diettrich v. Northwest Airlines, Inc., 168 F.3d 961, 964 (7th Cir. 1999) (stating that, when resorting exercise of the inherent power, “as in all cases, the punishment must fit the crime.“). In other words, a federal court‘s wide discretion as to whether to invoke the inherent powers is tempered by its rather limited discretion as to how it exercises them. Careful, case-specific consideration is owed therefore not only to the character of the sanctionable conduct, but also to the nature and purpose of the sanctions.
Of particular relevance here is the apparent absence of any bad faith on the part of Appellants, despite the dubiousness—both legally and ethically—of their “paralegal” activities. Generally, the harshest of sanctions based on inherent powers have been upheld оnly in situations involving bad faith, contumacy, or egregious misconduct. Chambers, 501 U.S. at 45-46; see also Kovilic, 106 F.3d at 773. Conversely, misconduct that is merely questionable warrants a less severe sanction (no matter how “dimwitted” the offenders or how badly they “muck up the cases“). In its finding that Appellants were engaged in the unauthorized practice of law, the district court did not indicate that they acted in bad faith; nor do we discern any such indication. Moreover, we note that the record of the district court proceedings reflects Aрpellants’ sustained cooperation throughout. These factors militate in favor of imposing more moderate sanctions and, in fact, may
Appellants argue, and we agree, that the imposition of punitive sanctions is inconsistent with a finding that they were not in contempt of court. This argument begs the central question of our inquiry into the purpose and nature of the sanctions: Are the monetary sanctions imposed here punitive in nature?13 Had Chief Judge Murphy held Appellants in contempt of court, as he might have, this Court could have inferred some punitive intent on his part.14 Instead, as we noted above, he placed prospective restrictions on their activities and ordered the return of fees received. To the extent that these measures are remedial in nature, we find that the district court acted within its discretion. The restrictions and the return of fees to clients or their families are consistent with this finding. However, we regard the order to disburse certain fees to the Fund, insofar as it does not compensate the individuals who paid for unauthorized legal services, and in light of the purpose of the Fund, to be punitive in nature. In short, the fees to be disbursed to the Fund amount to a $7000 fine. Considering that (i) the district court made no contempt finding, (ii) Appellants’ misconduct was not in bad faith, and (iii) the sanctions imposed tend to be more remedial than punitive with the exception of
CONCLUSION
The district court properly invoked its inherent powers to determine that Appellants were engaged in the unauthorized practice of law in the Southern District of Illinois and to impose remedial sanctions therefor. However, the court abused its discretion in imposing punitive sanctions in thе amount of $7000. For these reasons, we AFFIRM the orders of the district court in part, and REVERSE that portion of its order directing Appellants to pay into the court, and the Clerk of Court to disburse to the Fund, $7000 in fees received.
A true Copy:
Teste:
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Clerk of the United States Court of Appeals for the Seventh Circuit
USCA-02-C-0072—4-24-03
Notes
Any person practicing, charging or receiving fees for legal services within this state, either directly or indirectly, without being licensed to practice as herein required, is guilty of contempt of court and shall be punished accordingly, upon complaint being filed in any Circuit Court of this State. Such proceedings shall be conducted in the Courts of the respective counties where the alleged contempt has been committed in the same manner as in cases of indirect contempt and with the right of review by the parties thereto.
The provisions of this Act shall be in addition to other remedies permitted by law and shall not be construed to deprive courts of this State of their inherent right to punish for contempt or to restrain the unauthorized practice of law.
Comment, Unauthorized Practice of Law: Remedial Procedures, 1 DEPAUL L. REV. 108 (1952) (internal citation omitted).Decisions indicate that the practice of law generally includes not only the conduct of litigation and appearances in court, but also the preparation of pleadings and other papers incident to any аction or special proceeding in any court or other judicial body; conveyancing, the preparation of all legal instruments of all kinds whereby a legal right is secured, the rendering of opinions as to the validity or invalidity or the title to real or personal property, the giving of any legal advice, and any action for others in any matter connected with the law.
(Emphasis in original).A word of warning: If, after having reviewed this information, you are interested in having [NLPA] assist your counsel with your case, keep in mind that many attorneys become extremely paranoid when they know that their client is considering asking NLPA to become involved in working on the “defense team.” [I]f your attorney appears reluctant to have NLPA become involved, or if he tells you he “knows everything” and that therе is nothing NLPA could bring to your defense team, you need to give serious thought to his real motive for making such a statement . . . . Keep in mind, this is your life and you as the defendant have every right to have as much assistance from any source that you deem appropriate. [sic] Your attorney works for you, you do not work for him. Therefore, should you decide to have NLPA assist you, when you speak with your attorney about this matter, be firm in explaining to him that although you appreciate all that he is doing tо try and help, you want to have NLPA involved in the case and that you, as his client, are instructing him to work with us.