United States v. Kouri Perez, 187 F.3d 1, 1st Cir. (1999)
United States v. Kouri Perez, 187 F.3d 1, 1st Cir. (1999)
1999)
Defense counsel appeal the sanction imposed upon them below for filing a
vexatious discovery request. We dismiss for lack of appellate jurisdiction.
I.
BACKGROUND
2
Appellants' clients were indicted in 1997 for theft of federal property and
money laundering. Dealings between the prosecution and defense teams were
acrimonious from the start. For present purposes, we focus upon the skirmish
which began when Assistant United States Attorney ("AUSA") Maria
Dominguez informed the court that she had reason to believe that one
defendant had paid the retainer for co-defendants' counsel. The defense then
charged that AUSA Dominiguez had violated the Sixth Amendment by
deliberately infiltrating the defense camp.
Although the district court ultimately found no evidence for the infiltration
theory advanced by the defense, it entered a civility order "remind[ing]
[counsel] that civility in litigation is a value that this court will protect and
enforce[,]" and directed both sides thenceforth to refrain from "[d]isparaging
personal remarks or acrimonious conduct."
Round two began in March 1998, when AUSA Dominguez submitted a Brady
report which disclosed that during March 1997 the prosecution had interviewed
a Dr. Joaquin Perez-Mendez in the Dominican Republic and that Dr. Perez
possessed information favorable to the defense but refused to be deposed in
Puerto Rico. Appellants then sought to depose Perez at the United States
Embassy in the Dominican Republic. Absent opposition by the government, the
district court directed that the deposition be taken at the United States
Embassy.
AUSA Dominiguez promptly denied any improper threats against Dr. Perez or
his spouse and moved for sanctions against appellants. She objected to any
implication that she used the surname Dominguez to conceal her ancestry,
noting that she had been legally adopted in Florida as an infant. She questioned
appellants' failure to contact her before filing their second motion to change the
location of the deposition, particularly since the government never objected to
appellants' unilateral choice of location. Finally, she contended that the only
conceivable purpose served by the second motion was to harass or humiliate
her, in direct violation of the civility order.
7
The district court issued a show-cause order, which appellants claimed violated
due process because it failed to provide adequate notice of the precise bases
upon which the court was considering the imposition of sanctions. Appellants
suggested in addition that their duty to represent their clients required that the
basis for Dr. Perez's subjective fears be reported, in order that the merits of
their motion might be cogently assessed by the district court, even if those fears
appeared irrational or baseless.
DISCUSSION
9
First, we must determine our jurisdiction. See Petralia v. AT&T Global Info.
Solutions Co., 114 F.3d 352, 353-54 (1st Cir. 1997); In re Licht & Semenoff,
796 F.2d 564, 569-70 (1st Cir. 1986) (noting the "regrettable" fact that many
interlocutory appeals from attorney-sanction orders have been entertained
without considering appellate jurisdiction). Normally, appellate jurisdiction
depends upon the existence of a "final judgment," see 28 U.S.C. 1291, that
conclusively "disposes of all the rights of all the parties to an action," Licht,
796 F.2d at 569, "leav[ing] nothing for the [trial] court to do but execute the
judgment," Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 709 (1996)
(citation omitted). Thus, the "final judgment" rule minimizes dilatory,
piecemeal litigation, and promotes judicial efficiency. See Licht, 796 F.2d at
569 (citing Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 374 (1981)).
10
11
On the question whether monetary sanctions against attorneys are "final," either
under section 1291 or Cohen, the courts of appeals remain divided. See Chaves
v. M/V Medina Star, 47 F.3d 153, 155 n.7 (5th Cir. 1995) (outlining circuit
split); compare, e.g., Frazier v. Cast, 771 F.2d 259, 261-62 (7th Cir. 1985)
(permitting interlocutory appeal); Cheng v. GAF Corp., 713 F.2d 886, 888-90
(2d Cir. 1983) (same), with Click v. Abilene Nat'l Bank, 822 F.2d 544, 545 (5th
Cir. 1987) (dismissing interlocutory appeal); Eastern Maico Distribs., Inc. v.
Maico-Fahrzeugfabrik, 658 F.2d 944, 950-51 (3d Cir. 1981) (same).1
12
In siding with the latter authorities some time ago we held that a discovery
sanction against a law firm pursuant to Federal Rule of Civil Procedure 26(g)
meets neither the section 1291 nor the Cohen finality requirements. See Licht,
796 F.2d at 569-73 (dismissing law firm's interlocutory appeal). Rule 26(g)
forbids the interposition of a discovery request by counsel "for any improper
purpose, such as to harass," Fed. R. Civ. P. 26(g); see Licht, 796 F.2d at 567
(noting that district court expressly found that attorneys' "primary purpose in
deposing [witnesses] was to harass"), and empowers the court to impose an
"appropriate sanction" for its violation. Since we are bound by First Circuit
precedent closely on point, see Institut Pasteur v. Cambridge Biotech Corp.,
104 F.3d 489, 493 n.8 (1st Cir. 1997), appellants face an uphill battle given the
clear parallels between Licht and the present case.
13
Appellants argue that the sanction order essentially bears the attributes of a
criminal contempt, rather than a civil contempt.2 By apportioning the entire
universe of district court sanctions into but two categories, however, appellants
impermissibly presume that any sanction that does not proceed from the district
court's civil-contempt power necessarily proceeds from its criminal-contempt
power. As Licht itself establishes, the dichotomy proposed by appellants is
demonstrably mistaken. Instead, the pertinent distinction in the present context
is between punitive contempt sanctions and punitive non-contempt sanctions.
15
Thus, Congress enacted 28 U.S.C. 401, which codified the district court's
implicit power to hold litigants in criminal contempt. See also 28 U.S.C. 1927
(authorizing imposition of "excess costs" upon counsel who "unreasonably and
vexatiously" multiply proceedings). Further, the Federal Rules of Civil
Procedure include provisions empowering district courts to punish counsel for
various pleading and discovery abuses. See, e.g., Fed. R. Civ. P. 11 (imposing
sanction on counsel who signs pleading or motion intended "for any improper
purpose, such as to harass"); Chambers, 501 U.S. at 42 n.8 (listing procedural
rules prescribing attorney sanctions). In each instance, the sanctions are
punitive in nature, see Horn, 29 F.3d at 765 n.13 ("[C]ontempt . . . continues to
serve essentially `the same purpose' as do sanctions imposed under the
supervisory power.") (citation omitted), in that the court intends to penalize
counsel for an earlier failure to conform to some threshold of professional
conduct imposed by court order, statute or rule. See, e.g., Peterson v. BMI
Refractories, 124 F.3d 1386, 1395 (11th Cir. 1997) (noting that 28 U.S.C.
1927 is "penal in nature"); Cooper v. Salomon Bros., 1 F.3d 82, 85 (2d Cir.
1993) ("Rule 11 sanctions are often punitive or aimed at deterrence.");
Hamilton v. Ford Motor Co., 636 F.2d 745, 747 (D.C. Cir. 1980) ("The
principal purpose of Rule 37(b) is punitive, not compensatory.").
17
The federal district courts nonetheless retain their inherent power to impose
sanctions unless its exercise directly conflicts with subsequently promulgated
rules or enactments. See Chambers, 501 U.S. at 46, 50 ("[T]he court ordinarily
should rely on the Rules rather than the inherent power . . . [b]ut if in the
informed discretion of the court, neither the statute nor the Rules are up to the
task, the court may safely rely on its inherent power[s]," which "must continue
to exist to fill in the interstices."); Mark Indus. v. Sea Captain's Choice, Inc., 50
F.3d 730, 733 (9th Cir. 1995); cf. John's Insulation, Inc. v. L. Addison and
Assocs., Inc., 156 F.3d 101, 108 (1st Cir. 1998) (courts invoking inherent
powers may be guided by analogy to the Rules). Thus, to say that the sanctions
imposed below are punitive in nature is not to suggest that they are tantamount
to de facto criminal contempt adjudications.
18
Thus, the criminal contempt power is to be reserved for conduct that bespeaks a
criminal mens rea (i.e., intentional or reckless conduct) and has been proven
beyond a reasonable doubt, whereas non-contempt sanctions normally suffice
in circumstances involving less culpable states of mind. See Chambers, 501
U.S. at 47 (noting that Rule 11 sanctions may be imposed even where attorney
conduct falls short of "reasonableness" standard); Cruz v. Savage, 896 F.2d
626, 631-32 (1st Cir. 1990) (same); see also United States v. Claros, 17 F.3d
1041, 1047 n.4 (7th Cir. 1994) (Rule 11 . . . impos[es] a negligence standard,"
and Rule 37 violations are sanctionable even where attorney did not act in "bad
faith"); Harlan v. Lewis, 982 F.2d 1255, 1260 (8th Cir. 1993) (noting, in dicta,
that "inherent powers" sanction may be imposed for ethical-rule violations
absent "bad faith" on part of counsel).
20
21
Thus, we reject the contention that the sanction imposed against appellants
First, appellants suggest that Licht should govern only if the underlying
proceeding is civil, as distinguished from criminal. We do not agree. Federal
district courts not only exercise their inherent power to impose sanctions in both
civil and criminal cases, see Claros, 17 F.3d at 1042, but their contempt powers
"developed most robustly in the area of criminal procedure," see Horn, 29 F.3d
at 759, where the codified rules leave more interstices. And, of course,
interlocutory appeals in criminal cases are the exception. See, e.g., Kane, 955
F.2d at 111 (noting Supreme Court authority restricting Cohen appeals in
criminal cases to three narrow categories: refusals to dismiss indictments for
violations of double jeopardy clause or speech and debate clause or to reduce
bail); D&H Marketers, Inc. v. Freedom Oil & Gas, Inc., 744 F.2d 1443, 1445
(10th Cir. 1984). Were it otherwise, trial counsel would be diverted from their
primary responsibility - their clients' upcoming trials - while pursuing their own
interlocutory appeals. Such distractions are even less appropriate in criminal
cases than in civil actions. See Kane, 955 F.2d at 110 ("As a result of the
`compelling interest in prompt trials,' the requirements of the collateral order
doctrine have been interpreted `with the utmost strictness' in criminal
prosecutions.") (citation omitted).
23
Next, appellants observe that the Licht sanction issue was not entirely separable
from other matters to be litigated in the main action. Thus, should the evidence
sought during discovery in Licht have proven irrelevant to any issue litigated at
trial, counsel's discovery-related conduct would not have supported the
monetary sanctions imposed. Cf. Licht, 796 F.2d at 572 (noting that delayed
appeal would allow appellate court to view case as a whole). In contrast,
appellants argue, no valuable insights can be gained by postponing the present
appeal until final judgment, since the propriety of their conduct vel non cannot
be elucidated by developments at trial.
24
25
Appellants next contend that the district court announced its intention never to
reconsider its sanction, thus satisfying the second - "conclusiveness" - criterion
under Cohen. Although the district court did decline immediate reconsideration
of its sanction, there is no barrier to a future reconsideration. Moreover, in Licht
we simply observed that "the sanction may never be finally imposed." Id.
(emphasis added). We did not base our decision on the announced intention by
the district court to keep an open mind, but rather on the well-settled principle
that the district court retains the inherent power to modify or rescind monetary
sanctions at any time, as circumstances warrant. Id. at 570 ("We are not
suggesting that any of these possibilities should or will be followed in this case,
but their existence detracts from the finality of the order.") (emphasis added).
Finally, the prospect for canceling the fine may be somewhat better where the
monetary sanction imposed by the court remains in the court registry.
26
Appellants argue that the monetary sanction in Licht reflected the opposing
party's corresponding losses, and therefore was compensatory, whereas the
instant sanction was calculated solely for its punitive and deterrent effect. See
id. at 567 (sanction made payable to opposing parties). As already noted,
however, see supra, most non-contempt monetary sanctions - including the
Licht sanction - are at least partially punitive in purpose, designed to penalize
counsel for a discrete violation of a court order or rule. See, e.g., Media
Duplication Servs., Inc. v. HDG Software, Inc., 928 F.2d 1228, 1242 (1st Cir.
1991) ("[T]he focus of any sanction need not be limited to compensation of
opposing counsel."); Mark Indus., 50 F.3d at 733 (refusing to disturb sanction
because "the amount of an inherent powers sanction is meant to do something
Appellants complain also that their sanction was made immediately payable,
unlike the sanction in Licht. See Forgay v. Conrad, 47 U.S. (6 How.) 201
(1848). This thrust fails as well. First, Licht did not indicate whether or not the
Rule 26 sanction was immediately payable, nor suggest in any way that it
would be material to appellate jurisdiction. Further, appellants vastly overstate
the Forgay "practical finality" doctrine, which merely permits interlocutory
appeals from "immediate payment" orders which threaten a special risk of harm
to the appellant. See, e.g., Schaffer v. Iron Cloud, Inc., 865 F.2d 690, 691-92
(5th Cir. 1989) (dismissing interlocutory appeal of sanction order, even though
court directed immediate payment); Eastern Maico, 658 F.2d at 948 (dismissing
interlocutory appeal, and noting that normal risks attending immediate payment
cannot satisfy Cohen's third prong since "the same risk is present to some
degree in almost every order for sanctions where execution precedes review").
Thus, for example, appellants would need to establish financial inability to pay
the fine, or that the party to whom the payment must be made is in so
precarious a financial condition that it may be impossible to recover the
payment should the sanction order be reversed on final appeal. See Cleveland
Hair Clinic, Inc. v. Puig, 104 F.3d 123, 126 (7th Cir. 1997); Ortho Pharm. Corp.
v. Sona Distribs., 847 F.2d 1512, 1516 (11th Cir. 1988); ODC Communications
Corp. v. Wenruth Invs., 826 F.2d 509, 513-14 (7th Cir. 1987); In re Stable
Mews Assocs. (Stable Mews Assocs. v. Togut), 778 F.2d 121, 124 (2d Cir.
1985).
28
These appellants, all practicing attorneys, collectively remitted the $4,000 fine
to the district court prior to their appeal, and do not suggest that their remittance
has caused undue financial hardship. See Robinson v. Tanner, 798 F.2d 1378,
1381-82 (11th Cir. 1986) (no appeal permitted where appellant did not allege
that he was financially unable to make immediate payment of monetary
sanction); Ortho Pharm., 847 F.2d at 1515-16 (noting that size of sanction $35,000 - could be material to whether appellant would suffer significant
liquidity problems). Furthermore, as the fine was paid into the court, see supra
note 5, rather than to an opposing party, appellants need fear no dissipation of
the monies pending final appeal.6
29
Appellants reserve their most fervent arguments for the third prong in the
Cohen analysis, which requires them to demonstrate irreparable harm in the
event their appeals were delayed until final judgment. Three distinct harms are
identified: (1) the significant professional stigma attending the allegedly
unjustified public reprimand delivered by the district court; (2) the untested
civility order, if allowed to remain in place pending final judgment, would
intimidate them into less vigorous advocacy, thus depriving their clients of their
constitutional entitlement to the effective assistance of counsel; and (3)
eventually they may be placed in a conflict of interest with their clients, who
may not be interested in pursuing an appeal from a final judgment in the
criminal case (e.g., an acquittal).
30
The "irreparable harm" prong is the most crucial among the four Cohen criteria,
and frequently proves fatal to appellants. See Licht, 796 F.2d at 571. Clearly,
"irreparable harm" contemplates much more than that an appellant possess
reasons for preferring immediate appellate review, or deem it more convenient
or exonerative. Rather, an appellant must demonstrate that "denial of an
immediate appeal would make effective [appellate] review `impossible,' or
would `destroy' the `legal and practical value' of the appellant's right to appeal."
Id. (emphasis added) (quoting Firestone Tire, 449 U.S. at 376-77); see United
States v. Ryan, 402 U.S. 530, 533 (1971). Normally, even the prospect that
pretrial error might necessitate a retrial is insufficient to establish irreparable
harm. See D&H Marketers, 744 F.2d at 1445 ("Mere error in the [sanction]
order does not satisfy the requirement that the order be effectively
unreviewable on [a final] appeal.") (citing Firestone Tire, 449 U.S. at 378).
Given its demanding regimen, appellants cannot distinguish Licht.
31
A risk of professional stigma surely attends most sanction orders, since sanction
either explicitly or implicitly impugns counsel's professional ethics or
competence. After all, trial counsel are not sanctioned for exemplary conduct.
Accordingly, the Licht sanction inarguably cast counsel in an unfavorable light,
and although one might debate the relative harshness of a particular obloquy,
jurisdictional determinations cannot be made to turn on such subjective
vagaries.
32
33
Similarly, we believe the alleged chilling effect the sanction may have on
appellants' advocacy during the interim is not material to the present analysis.
Notwithstanding the risk of sanctions, defense counsel are obligated to
represent their clients vigorously, within the bounds of all applicable ethical
codes, particularly in a criminal case where the stakes may be much greater
than in civil cases. Cf. Licht, 796 F.2d at 572 (noting that despite delay in
appeal of sanction order, "[t]he firm's ethical obligation is to its client's best
interests"); Chambers, 501 U.S. at 47 n.11 ("[T]here is little risk that courts will
invoke their inherent power `to chill the advocacy of litigants attempting to
vindicate all other important federal rights.'") (citation omitted).
34
35
Upon appeal from a final judgment, of course, sanctioned counsel may argue
with equal vigor that the sanction order improperly constrained effective
advocacy, and if successful, an adequate remedy would lie. See Cooper, 872
F.2d at 5 ("Lawyers using professional care, circumspection and discretion in
exercising that right need not be apprehensive of chastizement (sic) or penalties
for having the advocative courage" to represent their clients vigorously.). But
though the fact that trial counsel would have drawn the line differently than the
trial Judge may be grist for an appeal, it does not follow that it enables an
interlocutory appeal. See D&H Marketers, 744 F.2d at 1445.8
36
Most cases, civil as well as criminal, end in a final judgment of some sort. Thus,
should appellants' clients be acquitted, or enter a plea, an independent appeal
would lie from the sanction order. Similarly, should their clients be convicted,
their appeals can proceed in tandem with appellants, thereby promoting judicial
efficiency, an important goal of the "final judgment" rule.
38
Finally, focusing on Cohen's final prong, appellants argue that their appeal
involves very important legal issues, such as the alleged violation of their right
to procedural due process by the district court. While we have no doubt that
these constitutional rights are weighty, the reality is that the district court
cannot impose any enforceable sanction, even a Licht-type sanction, absent
compliance with all applicable procedural due process requirements. See
Chambers, 501 U.S. at 50; Roadway Express, 447 U.S. at 767; Societe
Internationale Pour Participations Industrielles et Commercialesv. Rogers, 357
U.S. 197, 209 (1958); United States v. 789 Cases of Latex Surgeon Gloves, 13
F.3d 12, 15 (1st Cir. 1993) ("The `[l]ack of fair notice is fatal to [the court's]
exercise of inherent power.'") (citation omitted). Moreover, appellants'
argument would permit sanctioned counsel to evade section 1291 simply by
alleging a due-process violation, thereby rendering Licht a dead letter. Just as
importantly, appellate courts frequently turn away interlocutory appeals
involving the weightiest constitutional questions unless the appellant has met
the remaining Cohen criteria. See, e.g., Starcher, 144 F.3d at 423 ("The
Supreme Court has declined to extend the [Cohen] collateral-order doctrine to
cover appeals from judgments of even the most sweeping import."). Thus, if
appellants' due-process rights were violated, there is no reason to assume they
cannot be fully vindicated on final appeal.
III.
CONCLUSION
39
40
Notes:
1
Likewise, as here, the district court may fix the amount of the monetary
sanction through reference to its deterrent effect. See John's Insulation, 156
F.3d at 110 ("[T]he purpose of sanctions, moreover, is not merely to penalize
violations of court procedures, but also to deter future violations by other
parties, and thus sanctions do not have to be strictly proportional to the severity
of a given party's violations."); Jones v. Winnepesaukee Realty, 990 F.2d 1, 6
(1st Cir. 1993) ("Deterrence is a widely recognized basis for determining the
amount of a monetary sanction" imposed under court's inherent powers.).
For the same reason, we reject appellants' attempt to distinguish Licht on the
ground that the sanction was paid to the opposing party, rather than into the
court registry. See Jones, 990 F.2d at 5 (noting that court "is necessarily vested
with considerable discretion . . . in determining what form the sanctions should
take"). Where a monetary sanction is primarily punitive, the opposing party
may not have suffered any loss, or may receive an unjustified windfall, or may
itself have unclean hands. Thus, courts frequently have grounds for directing
payment of non-contempt fines into the registry of the court. See, e.g., Silva v.
Witschen, 19 F.3d 725, 729 n.5 (1st Cir. 1994) ("[U]nder amended Rule 11, `if
a monetary sanction is imposed, it should ordinarily be paid into court as a
penalty.'") (citation omitted); Jones, 990 F.2d at 6 n.10 ("inherent power"
monetary sanction was paid into district court registry); see also RTC v.
Dabney, 73 F.3d 262, 267 (10th Cir. 1995) ("inherent power" sanctions may be
payable to court account to compensate for court's time); Mark Indus., 50 F.3d
at 733 ("inherent power" sanction properly made payable to court); Riverhead
Sav. Bank v. National Mortgage Equity Corp., 893 F.2d 1109, 1112 (9th Cir.
1990) ("Sanctions under Rule 11 can be made payable either to the clerk of the
court or to the opposing party").
6