Grievance Administrator v. August

475 N.W.2d 256, 438 Mich. 296

• Court: Michigan Supreme Court
• Decided: August 29, 1991
• Docket: Docket 88132; Calendar 6
• Status: Published

Opinions

Boyle, J.

We are asked to review the Attorney Discipline Board’s order reinstating the license of Irving August to practice law in the State of Michigan. We vacate the Attorney Discipline Board’s order of reinstatement, and remand to the board for reconsideration in light of this opinion.

FACTS

On June 28, 1983, petitioner was convicted of conspiring to defraud the United States of the due administration of justice in violation of 18 USC 371, impeding the due administration of justice in violation of 18 USC 1503, and attempting to influence a court clerk in the discharge of her official duties in violation of 18 USC 1503. These convictions stemmed from Mr. August’s collaboration with a clerk of the court to manipulate the blind-draw system for assigning judges in the United States Bankruptcy Court for the Eastern District of Michigan. The object was to avoid assignment of cases to Judge George Brody, who, of the three judges sitting on the bankruptcy court, was known to scrutinize and reduce attorney fees. In affirming August’s conviction, the United States Court of Appeals for the Sixth Circuit detailed the facts and circumstances surrounding the convictions:

The relevant period of time is that covered by the counts of the indictment related to this appeal —from October 3, 1979 to October 30, 1980. During this period, three bankruptcy judges sat in the Eastern District of Michigan, Southern Division: Judge Hackett, Judge Brody, and Judge Patton. Judge Patton took all of the Chapter 13 cases. A blind draw system was designed to assign to him approximately 30% of the Chapter 7 and Chapter 11 cases. The system was operated by using decks of 100 3" X 5" index cards, each typically containing 30 marked for Judge Patton and 35 marked for each of Judges Brody and Hackett. The cards were shuffled, numbered, and sealed on three sides so that the judge’s name was not visible. In eighteen of the seventy-two packs used while Bo-goff was an intake clerk, the order of the cards was adjusted so that no two cards bearing the same judge’s name were next to each other; in other cases, the cards were randomly mixed. When a bankruptcy petition was filed, the intake clerk removed the top card from a judge assignment deck, turned it over to reveal the name of the judge to whom the case was assigned, and stamped that judge’s name on the petition.

August’s law firm filed about one-half of the Chapter 11 cases in the Eastern District of Michigan during the period here involved. August had a romantic relationship during this period with intake clerk Bogoff.² Although she was not the only clerk in the office and filed only about half of all bankruptcy petitions, she arranged matters so that she handled almost all of the judge assignments in cases involving August’s firm. She allowed members of that firm to come behind the counter to drop off filings without waiting in line. She permitted August to leave on her desk his briefcase containing filings.

The government’s theory was that Bogoff would take several petitions to the counter, draw a card and look at the judge’s name. If Judge Patton’s or Judge Hackett’s name appeared, she would file the Chapter 11 petition presented by the August firm.³ Sixty-eight Chapter 11 cases were filed by August’s firm during this period, of which 92% were handled by Bogoff and only nine initially were assigned to Judge Brody. If multiple petitions were filed involving the same parties, the cases were eventually consolidated and assigned to the judge to whom the first of the petitions had been assigned. After consolidations, only four Chapter 11 cases filed by the August firm remained assigned to Judge Brody.⁴

At trial, the government adduced circumstantial evidence that it was possible to manipulate the blind draw system; that Bogoff had filed almost all of August’s cases; and that a disproportionately low percentage of August’s cases were assigned to Judge Brody. Professor David Doane, an expert statistician, testified that there was a 99.97% chance that more August cases would have been assigned to Judge Brody if the blind draw system were truly random.

[United States v August, 745 F2d 400, 402-403 (CA 6, 1984).]

On the same day that the judgments of conviction were entered, petitioner was automatically suspended from the practice of law pursuant to GCR 1963, 969.1(b).¹ On July 20, 1984, following public hearings, a Wayne County hearing panel ordered the license of Irving August revoked.

Meanwhile, in November, 1984, following the affirmance of his convictions,² petitioner began serving his concurrent two-year sentences at the federal prison in Marion, Illinois. In the fall of 1985, he was transferred to a half way house in the City of Detroit. He remained there until November 19, 1985, when district court Judge Ralph Freeman reduced the sentence to time already served. Thus, August served approximately one year of incarceration.

The petition for reinstatement of his license to practice law was filed October 28, 1988. Hearings were held for four days, and on August 17, 1989, the Wayne County hearing panel issued its report and order denying reinstatement. The three-member panel was split, with Chairman Harry A. Carson favoring reinstatement. The two-member majority adopted Chairman Carson’s findings of fact, which summarized the testimony. The majority also accepted the dissenter’s conclusion that petitioner had shown by clear and convincing evidence that he had fulfilled the requirements for reinstatement set forth in MCR 9.123(B), with one crucial exception: The majority found that the petitioner had not established by clear and convincing evidence that he could be safely recommended to the public, the courts, and the legal profession as a person fit to be consulted by others and to represent them and otherwise act in matters of trust and confidence, and, in general, to aid in the administration of justice as a member of the bar and as an officer of the court as required by MCR 9.123(B)(7). The majority stated that "[t]he nature and seriousness of [petitioner’s] acts must be considered in assessing the ability to safely recommend the petitioner to the public, the courts and the legal profession.” Ultimately, the reinstatement panel was not convinced "that petitioner’s subsequent conduct, no matter how exemplary, has sufficiently ameliorated the taint placed upon the legal profession, by his commission of the crimes in question, to the extent that he could now be safely recommended as a person of trust.”

On review, the Attorney Discipline Board posed its inquiry as "whether there is proper evidentiary support in the record for the conclusion of the hearing panel majority that the nature of [petitioner’s] criminal conduct constitutes a bar to his reinstatement, regardless of his subsequent exemplary behavior.” In the view of the discipline board, affirmance of the panel’s denial of reinstatement would require a ruling that certain types of professional misconduct are so egregious that reinstatement should never be granted. Noting that the Michigan Supreme Court had never so ruled, the discipline board found that petitioner had established his eligibility for reinstatement in accordance with the present rules. On December 22, 1989, the Attorney Discipline Board entered an order reversing the hearing panel’s denial of reinstatement, and granted the petition for reinstatement.

This Court granted the grievance administrator’s application for leave to appeal on December 6, 1990. 437 Mich 1202.

STANDARD OF REVIEW

It has been stated many times that the findings of the hearing panel and the Attorney Discipline Board are to be reviewed for proper evidentiary support on the whole record. In re Freedman, 406 Mich 256; 277 NW2d 635 (1979); In re Grimes, 414 Mich 483; 326 NW2d 380 (1982). In this case, there is no challenge to the factual findings of the hearing panel,³ but rather to the panel’s ultimate determination that petitioner should not now be reinstated. While the board reviews that judgment for adequate evidentiary support, the board at the same time possesses a measure of discretion with regard to its ultimate decision. MCR 9.118(D), In re Daggs, 411 Mich 304, 318-319; 307 NW2d 66 (1981). The power to regulate and discipline members of the bar rests ultimately with this Court pursuant to constitutional mandate. Const 1963, art 6, § 5; In re Schlossberg v State Bar Grievance Bd, 388 Mich 389; 200 NW2d 219 (1972).

Because the board applied an erroneous interpretation of the standards for reinstatement, we vacate its order, and remand to the board for further consideration in light of this opinion.

ANALYSIS

An attorney whose licence has been revoked bears the burden of showing by clear and convincing evidence that the conditions of eligibility for reinstatement have been met. Those conditions are set forth in MCR 9.123(B)(l)-(7), as follows:

(1) he or she desires in good faith to be restored to the privilege of practicing law in Michigan;

(2) the term of the suspension ordered has elapsed or 5 years have elapsed since revocation of the license;

(3) he or she has not practiced or attempted to practice law contrary to the requirement of his or her suspension or revocation;

(4) he or she has complied fully with the order of discipline;

(5) his or her conduct since the order of discipline has been exemplary and above reproach;

(6) he or she has a proper understanding of and attitude toward the standards that are imposed on members of the bar and will conduct himself or herself in conformity with those standards;

(7) he or she can safely be recommended to the public, the courts, and the legal profession as a person fit to be consulted by others and to represent them and otherwise act in matters of trust and confidence, and in general to aid in the administration of justice as a member of the bar and as an officer of the court ....

(Subrules 8 and 9 are not relevant to this case.)

The focus in this case has narrowed to the criterion set forth in subrule 7: Can petitioner "safely be recommended to the public, the courts, and the legal profession as a person fit to be consulted by others and to represent them and otherwise act in matters of trust and confidence, and in general to aid in the administration of justice as a member of the bar and as an officer of the court”?

Petitioner concedes, but we find it appropriate to emphasize, that the nature of the misconduct for which an attorney was disbarred must be considered in the proceedings for reinstatement. In In re Brown, 166 W Va 226, 234; 273 SE2d 567 (1980), the court observed:

It is generally agreed that in assessing an application for reinstatement consideration must be given to the nature of the original offense for which the applicant was disbarred. Obviously, the more serious the nature of the underlying offense, the more difficult the task becomes to show a basis for reinstatement. [Emphasis added.]

In In re Keenan, 313 Mass 186, 218; 47 NE2d 12 (1943), the court sought evidence sufficient to outweigh the adjudicated fact of the petitioner’s guilt of corruptly influencing jurors, an offense "of the gravest character.” The court in In re Gordon, 385 Mass 48, 54; 429 NE2d 1150 (1982), recognized the need to "look behind subjective testimonials as to the present good character of the petitioner, and the most relevant objective fact is the public record of the conduct which caused the disbarment in the first place.” See also In re Cantrell, 785 P2d 312 (Okla, 1989) (the worse the offense, the heavier the burden to obtain reinstatement).

It is also generally recognized that the passage of time is relevant to the question of rehabilitation. A long time period in which the petitioner’s conduct has been exemplary will reinforce a claim of rehabilitation. In re Hiss, 368 Mass 447; 333 NE2d 429 (1975). The court in In re Ansley, 241 Ga 394; 245 SE2d 657 (1978), similarly held that the petitioner had not proved that the seriousness of his offense (bribery) had been offset by a sufficiently long period of rehabilitation.

We agree with the frequently stated principle that the essence of the decision to reinstate is a balancing process. The essential considerations were well articulated in the Maryland case, In re Raimondi, 285 Md 607, 618; 403 A2d 1234 (1979), cert den 444 US 1033 (1980):

On one side of the scale is placed the seriousness of the misconduct which produced disbarment and the court’s duty to society at large to see that only those persons who are worthy of the faith and confidence of the general public are permitted to handle the affairs of others. . . . On the other side are placed the subsequent conduct and reformation of such individual, his present character, his present qualifications and competence to practice law, and the fact that the very nature of law practice places an attorney in a position where an unprincipled individual may do tremendous harm to his client.

The hearing panel expressly recognized the relevance of the nature of the offense as well as the time elapsed when it stated: "We, as members of the reinstatement panel are . . . very concerned about the nature of the crimes committed by the petitioner. We are not convinced that petitioner’s subsequent conduct, no matter how exemplary, has sufficiently ameliorated the taint placed upon the legal profession, by his commission of the crimes in question, to the extent that he could now be safely recommended as a person of trust.” (Emphasis added.)

On review of the panel’s decision, the board looked for evidentiary support in the record for what it characterized as the panel’s conclusion that the nature of petitioner’s criminal conduct constituted a bar to his reinstatement. The board viewed the panel’s decision as a permanent disbarment. In the board’s view, "[ajffirmation of the denial of reinstatement in this case demands a ruling that there are certain types of professional misconduct which are so egregious that reinstatement should never be granted.” The board found a fundamental incongruity between the panel’s conclusion that petitioner had established by clear and convincing evidence that he had fulfilled the terms of subrule 6,⁴ but that petitioner nevertheless could not safely be recommended to the public, the courts, and the profession as a person fit to be consulted by others and to represent them and otherwise act in matters of trust and confidence, and, in general, to aid in the administration of justice as a member of the bar and as an officer of the court, as required by subrule 7.

We discern in the board’s reasoning a suggestion that reinstatement is automatic upon satisfaction of the criteria set forth in MCR 9.123(B)(l)-(6), that the passage of time is not a relevant consideration beyond the terms of subrule 2,⁵ and that denial of reinstatement now is tantamount to permanent disbarment. These implications flow from the board’s statement that "the Court Rules have extended to Mr. August the promise that he could file a petition for reinstatement after five years.” The board approved similar reasoning from the dissenting opinion of hearing panel Chairman Carson:

As serious as August’s crimes were, the Court rules, have at all times since his disbarment, led the petitioner to believe that he could file a petition for reinstatement after five years. Nowhere is it stated in the rules that a person convicted of a heinous crime, or manipulating the justice system, or committing homicide, or some other crime, shall be permanently disbarred. Had the Supreme Court wished to preclude certain offenders from ever applying for reinstatement, it would have said so pursuant to its rule making powers.

The rules do indeed promise that a disbarred attorney may apply for reinstatement after five years. However, we perceive this temporal milepost as fixing the minimum time after which a disbarred attorney may be declared rehabilitated.⁶ We reject the implication that if five years have elapsed, the passage of time is otherwise irrelevant to the determination of present fitness for reinstatement. The determination whether the disbarred attorney may be safely recommended to the position of public trust held by members of the state bar necessarily requires consideration of the time elapsed since disbarment and since the commission of the acts resulting in disbarment. This is only consonant with the established principle that each attorney misconduct case is to be considered on its own facts. Grimes, 414 Mich 490; State Bar Grievance Administrator v Del Rio, 407 Mich 336, 350; 285 NW2d 277 (1979). Obviously, the question whether an attorney may be safely recommended to the public is a different inquiry in the case of an attorney disbarred for corrupting the administration of law than in the case of an attorney whose disbarment resulted from conduct unrelated to the practice of law. It is also obvious that a showing of present fitness may require a lengthier period of rehabilitation where an attorney has engaged in a repeated or calculated series of acts designed to corrupt the administration of justice than in the case of an attorney whose disbarment resulted from a single instance of similar conduct. Thus, the five-year period described in MCR 9.123(B)(2) should be interpreted as a minimum period in which rehabilitation may occur following revocation. of the license to practice law; the passage of five years in no way guarantees eligibility for reinstatement.

Next we turn to the board’s suggestion that if the hearing panel found that subrule 6 was met, it could not consistently find that subrule 7 was not satisfied. This reasoning would render MCR 9.123(B)(7) wholly superfluous. The criteria set forth in subrules 1-9 are designed to achieve an appropriate balance between the duty of this Court to protect the public and the profession, and the interests of the attorney in a fair evaluation of his petition to regain his livelihood. The petitioner must satisfy each requirement, and while the factors are interrelated, each has independent significance. We find that subrule 6 is primarily directed to the question of the applicant’s ability, willingness and commitment to conform to the standards required of members of the Michigan State Bar. Subrule 7 shifts the focus to the public trust which this Court has the duty to guard. The purpose of this Court’s disciplinary power is to protect the public, the courts, and the legal profession. MCR 9.102(A). The license to practice law is "a continuing proclamation by the Supreme Court that the holder is fit to be entrusted with professional and judicial matters and to aid in the administration of justice as an attorney and counselor and as an officer of the court.” MCR 9.103(A). Subrule 7, with its reference to whether the applicant may be safely recommended to this position of trust, necessarily involves the discretionary question whether this Court is willing to present that person to the public as a counselor, member of the state bar, and officer of the court bearing the stamp of approval from this Court.

We recognize that the foregoing discussion implies an element of subjective judgment in the application of MCR 9.123(B). We find this appropriate for two reasons.

First, several of the requirements for reinstatement eligibility set forth in MCR 9.123(B) are of an inherently subjective nature.⁷ Determining whether the applicant desires in good faith to be restored to the privilege of practicing law, MCR 9.123(B)(1) requires subjective judgment, as does the determination whether the applicant has a proper understanding of and attitude toward the standards imposed on members of the bar and will act in conformity with those standards, MCR 9.123(B)(6), and whether the applicant can safely be recommended to the public and the legal profession as a person fit to be consulted by others and to represent them and otherwise act in matters of trust and confidence, and, in general, to aid in the administration of justice as a member of the bar and as an officer of the court, MCR 9.123(B)(7).

Second, the reinstatement process offers the sole opportunity for distinguishing between dissimilar acts of misconduct which may have resulted in a suspension of more than 119 days⁸ or the revocation of the license to practice law.⁹ While there are a number of disciplinary measures less than license revocation,¹⁰ there are none more severe. The most severe sanction which may be imposed for a single violation of a serious nature is the same sanction available for multiple instances of the same misconduct. The most severe sanction for misconduct corrupting the administration of justice is the same sanction for severe misconduct unrelated to the practice of law. Without considering the nature of the misconduct, the panel or board has no basis to determine whether an attorney whose license was revoked has become fit to hold the public trust by practicing law.

Finally, we do not agree with the board’s assessment that the reinstatement criteria allow only two possibilities: that petitioner be now readmitted or forever barred from the practice of law in this state. A third alternative is illustrated in this case, where the hearing panel determined that petitioner "could not now be safely recommended as a person of trust.” (Emphasis added.) A determination that sufficient time has not passed to allow the panel or board to declare petitioner rehabilitated and confidently hold him out as a person of trust is not a declaration that petitioner will never be rehabilitated and can never regain the privilege of practicing law in this state. A number of jurisdictions hold that there is conduct so egregious that it should preclude reinstatement to the practice of law. See In re Russo, 244 Kan 3; 765 P2d 166 (1988).¹¹ We need not rule on that question because we are not prepared to say that this is such a case. While we can hypothesize a situation in which repeated denials of reinstatement might amount to permanent disbarment, this clearly is not that case. We remand to the Attorney Discipline Board to reexamine whether, in light of the seriousness of petitioner’s crimes and the time elapsed, petitioner can now be confidently recommended to the position of trust that is held by members of the state bar. On remand, the board either may affirm the order of the hearing panel or take such other action as it deems appropriate, including the taking of further testimony. MCR 9.118(C)(2), (D).

CONCLUSION

We hold today that the nature of the offense and the time elapsed since its commission and since disbarment are relevant and important considerations in determining whether a disbarred attorney should be recommended to the position of public trust that is held by members of the Michigan State Bar. Moreover, an attorney may be denied readmission on the grounds that sufficient time has not passed to determine the present fitness of the applicant for readmission. Such a denial should not be deemed a permanent disbarment. The order of the Attorney Discipline Board is vacated and the matter remanded to the Attorney Discipline Board for consideration in light of this opinion.

Brickley, Riley, Griffin, and Mallett, JJ., concurred with Boyle, J.

2 August contributed significantly to Bogoff’s support. In 1980, he deposited directly into her personal bank account checks from his law firm clients totalling more than $11,000.

3 Defendants’ theory was that members of August’s firm would wait outside the intake window until Judge Brody was assigned to another case, then step up to the window, assuming that no judge’s name appeared on two consecutive cards. But only eighteen of the seventy-two decks used while Bogoff was an intake clerk were arranged so that no judge’s name appeared twice in sequence. This theory was refuted conclusively at trial on a number of grounds, including the fact that the mathematical odds against Judge Brody’s assignment to so few August cases were 99 to 1 even if members of the firm behaved in the manner appellants suggest.

4 August considered Judge Brody a difficult judge before whom to practice. Specifically, August thought that Judge Brody awarded smaller attorney fees. In 1978, August told Judge Brody in chambers that he could not afford to handle such cases if Judge Brody continued to reduce his fee awards so much. He asked Judge Brody to transfer all of the August firm cases to which Judge Brody had been assigned to Judge Hack-ett (a personal friend of August). Judge Brody refused to do so.

1 GCR 1963, 969.1(b) provided for the automatic suspension of an attorney convicted of a felony until the effective date of an order filed by a hearing panel. GCR 1963, 969.1(b) was replaced by MCR 9.120(A)(1).

2 745 F2d 400 (CA 6, 1984).

3 Primary fact-finding responsibility is entrusted to the hearing panel, which is required by MCR 9.111(B)(2) to "[r]eceive evidence and make written findings of fact.” The board does not itself possess fact-finding powers; however, it may on review of a panel decision order testimony taken, which will be done by a panel or master who is then required to make a supplemental report. MCR 9.118(C)(2).

4 [H]e or she has a proper understanding of and attitude toward the standards that are imposed on members of the bar and will conduct himself or herself in conformity with those standards. [MCR 9.123(B)(6).]

5 [T]he term of the suspension ordered has elapsed or 5 years have elapsed since revocation of the license. [MCR 9.123(B)(2).]

6 In California it is held that although an attorney may seek reinstatement after five years, reinstatement is not automatic. In re Nevill, 39 Cal 3d 729; 217 Cal Rptr 841; 704 P2d 1232 (1985).

7 Obviously, some of the eligibility requirements may be verified objectively, for example, whether the term of suspension has elapsed or five years have elapsed since revocation of the license, MCR 9.123(B)(2). The requirements set forth in subrules 3 (the applicant has not practiced or attempted to practice law during period of suspension or revocation), 4 (the applicant has complied fully with the order of discipline), and 5 (the applicant’s conduct since the order of discipline has been exemplary and above reproach) may be verified objectively as well, but may in some instances require judgments on the basis of the evidence.

8 See MCR 9.123(B).

9 Justice Levin in In re Albert, 403 Mich 346; 269 NW2d 173 (1978), criticized MCR 9.123 (then State Bar Rule 15) for failing to separate the substantive criteria for reinstatement in cases of disbarment and suspension. Justice Levin opined that the structure of the rule "causes doubt about the character and quantum of proof appropriate in each case, leading to uneven application of the rule.” Id. at 355. Despite Justice Levin’s criticism in Albert, we have retained the rule essentially unchanged over the intervening thirteen years. This is consonant with our holding today that the rule envisions the use of discretion in the application of its standards to varying factual situations. While the quantum of proof remains in each case the same —clear and convincing evidence — the factual showing required to carry that burden necessarily and appropriately depends on the facts of the particular case.

10 See MCR 9.106(2)-(6).

11 See also In re Kerr, 424 A2d 94 (DC App, 1980) (the statute requiring an attorney convicted of an offense involving moral turpitude to be stricken from the roll of the members of the bar required permanent disbarment); People v Buckles, 167 Colo 64; 453 P2d 404 (1969) (the statute providing that one shall be disqualified from practicing law if convicted of a felony requires permanent disbarment); Office of Disciplinary Counsel v Klunk, 17 Ohio St 3d 43; 476 NE2d 1051 (1985).