In the 

United States Court of Appeals 

For the Seventh Circuit ____________________

No. 16‐3430

CORNELL D. REYNOLDS,

Petitioner‐Appellant,

v.

RANDALL HEPP,

Respondent‐Appellee.

____________________

Appeal from the United States District Court for the

Eastern District of Wisconsin.

No. 16‐CV‐508 — William C. Griesbach, Chief Judge.

____________________

ARGUED JANUARY 4, 2018 — DECIDED AUGUST 30, 2018

____________________

Before WOOD, Chief Judge, and HAMILTON and BARRETT,

Circuit Judges.

HAMILTON, Circuit Judge. Petitioner‐appellant Cornell

Reynolds seeks a writ of habeas corpus under 28 U.S.C.

§ 2254. In 2002, a Wisconsin jury convicted Reynolds in a fatal

carjacking. He seeks habeas relief based on two alleged viola‐

tions of his Sixth and Fourteenth Amendment right to coun‐

sel. First, he argues that Wisconsin violated his right to coun‐

sel when it stopped paying his state‐appointed lawyer during
2 No. 16‐3430

his direct appeal. In the alternative, he argues that he received

ineffective assistance from his counsel during his direct ap‐

peal and trial. The district court denied relief. We affirm.

I. Factual & Procedural Background

In May 2001, two young men approached a group of teen‐

agers in a parking lot in Milwaukee. One of the men shot two

of the teenagers, killing one of them. The two men drove away

in the car the two teenage victims had been driving. Reynolds

was arrested two days later after he was identified as the

shooter. Wisconsin indicted him for carjacking resulting in

death, carjacking resulting in bodily harm, and possessing a

firearm as a felon. A jury convicted Reynolds on all three

charges. Reynolds sought relief through a direct appeal, a

state post‐conviction proceeding, and a state habeas corpus

petition. Finding no relief in the state courts, he filed his fed‐

eral habeas corpus petition. We start by summarizing the rel‐

evant facts at each stage of Reynolds’s case.

A. Trial & Direct Appeal

Before trial, Reynolds raised an equal protection challenge

to Wisconsin’s felony carjacking statute. The trial court re‐

jected the challenge, and the case proceeded to trial. The main

issue at trial was identification. The prosecution called four

eyewitnesses, including the surviving gunshot victim. Each

identified Reynolds as one of the two carjackers and as the

shooter of at least one victim. Reynolds did not testify and did

not call any witnesses. The jury convicted Reynolds of car‐

jacking resulting in death, carjacking resulting in bodily

harm, and possession of a firearm by a felon.

The Wisconsin State Public Defender’s Office appointed

attorney Terry Williams as Reynolds’s post‐conviction and
No. 16‐3430 3

appellate counsel. With his counsel’s help, Reynolds moved

for a new trial on the basis that his trial counsel provided in‐

effective assistance and should have raised an alibi defense.1

Reynolds submitted two affidavits describing his wherea‐

bouts on the night of the shooting. The trial court found that

the affidavits did not help Reynolds since they placed him just

a few minutes from the crime scene around the time of the

shooting. The court denied Reynolds’s motion without an ev‐

identiary hearing, concluding that he had failed to raise facts

showing ineffective assistance or prejudice to his defense.

On direct appeal, Reynolds argued that he was entitled to

an evidentiary hearing on his ineffective assistance claim and

added an argument that his trial counsel failed to cross‐

examine the eyewitnesses adequately. The Wisconsin Court

of Appeals reversed and remanded with instructions to hold

what Wisconsin courts call a Machner hearing. See State v.

Machner, 285 N.W.2d 905 (Wis. App. 1979). On remand, the

trial court held an evidentiary hearing, considered both

arguments, and denied Reynolds’s motion for a new trial.  

Reynolds appealed again. At some point after the eviden‐

tiary hearing—and while Reynolds’s appeal was pending—

staff at the Wisconsin State Public Defender’s Office told at‐

torney Williams that he had spent too much time on his cases.

The State Public Defender’s Office informed Williams that

they would not pay him for some of the work he had com‐

pleted on Reynolds’s appeal and that they would not pay him

for any more work on the case. They also told Williams that

they would no longer assign cases to him. Handling such a

                                                 

1 In Wisconsin, defendants generally begin their direct appeals by

moving for a new trial in the trial court. See Wis. Stat. § 809.30(2)(h).
4 No. 16‐3430

management issue by cutting off attorney Williams without

taking concrete steps to ensure that his clients would continue

to be represented would seem highly unusual and troubling.

The record before us simply does not show what efforts the

staff might have made to protect Reynolds’s interests.

Reynolds did not immediately learn that the State Public

Defenders had stopped paying his attorney. But when he

asked Williams to pursue in the second appeal the equal pro‐

tection challenge to the carjacking statute—which trial coun‐

sel had unsuccessfully raised before trial—Williams told him

that the State was not paying him anymore and that he could

not afford to investigate that additional question. Reynolds

could not afford to pay for additional work, even assuming

that Williams could have accepted private payments on top of

the earlier public defender payments. The result was that Wil‐

liams did not investigate the equal protection challenge as a

possible argument on appeal. Nevertheless, Williams com‐

pleted briefing in the Wisconsin Court of Appeals on the inef‐

fective‐assistance claims and later filed a petition for review

with the Wisconsin Supreme Court. The Court of Appeals af‐

firmed the denial of a new trial, and the Wisconsin Supreme

Court denied review.

B. Collateral Post‐Conviction Relief

In October 2010, Reynolds filed a pro se collateral post‐

conviction motion in the trial court under Wis. Stat. § 974.06.

As relevant here, Reynolds argued that he received ineffective

assistance of appellate counsel because attorney Williams

failed to argue that his trial counsel should have challenged

the jury instructions on carjacking. The formal charging in‐

strument had said that Reynolds took the vehicle “by use of”

a dangerous weapon, but the jury was instructed to convict
No. 16‐3430 5

even if it found that he took the car by only “threat of the use

of a dangerous weapon.” Reynolds argued that the jury

should have been instructed using the language in the formal

charges and that Williams was ineffective for not raising this

argument on appeal.

The trial court denied the motion without a hearing, and

the Wisconsin Court of Appeals affirmed. The appellate court

first found that Reynolds’s claim for ineffective appellate

counsel was conclusory and, therefore, procedurally barred

under State v. Escalona‐Naranjo, 517 N.W.2d 157 (Wis. 1994). In

the alternative, the court found that the jury instructions were

sufficient to support a conviction under Wisconsin law be‐

cause the carjacking statute establishes a single offense that

can be committed by using or threatening to use a weapon.

See Wis. Stat. § 943.23(1g) (defining carjacking as intentionally

taking “any vehicle without the consent of the owner” by “the

use of, or the threat of the use of, force” or a dangerous

weapon). The court also found that even if the jury instruc‐

tions were improper, Reynolds could not prove prejudice.

The central issue at trial was identification, not the difference

between using a gun and threatening to use a gun—after all,

the carjacker shot two victims, and one died. The Wisconsin

Supreme Court again denied review.

C. State Habeas Corpus Proceedings

Reynolds next filed a state habeas corpus petition in the

Wisconsin Court of Appeals under State v. Knight, 484 N.W.2d

540 (Wis. 1992). In it, he alleged that Wisconsin violated his

Sixth and Fourteenth Amendment right to counsel when the

State Public Defender’s Office stopped paying his appellate

attorney. Reynolds claimed that the State interfered with his

representation, created a conflict of interest between him and
6 No. 16‐3430

his lawyer, and caused his lawyer to forgo investigating the

equal protection challenge. The Court of Appeals once again

denied relief. The court relied on two cases that applied the

conflict‐of‐interest standard in Cuyler v. Sullivan, 446 U.S. 335

(1980)—Freeman v. Chandler, 645 F.3d 863, 869 (7th Cir. 2011),

and State v. Love, 594 N.W.2d 806, 810–11 (Wis. 1999)—and

found that Reynolds had not shown that the alleged conflict

adversely affected his lawyer’s representation of him. The

court found as a matter of state law that Reynolds had for‐

feited the equal protection challenge by failing to raise it be‐

fore the Machner evidentiary hearing. That means the forfei‐

ture occurred before the State stopped paying his lawyer. Any

effort to bring the equal protection claim after that point

would have been frivolous, the Wisconsin Court of Appeals

found, so the conflict of financial interest could not have ad‐

versely affected Williams’s representation of Reynolds.

D. Federal Habeas Corpus Proceedings

Reynolds then filed his federal habeas corpus petition un‐

der 28 U.S.C. § 2254. He argued that the State deprived him of

counsel when it created a conflict of interest during his direct

appeal, and that his appellate counsel was constitutionally in‐

effective for failing to object to the jury instructions.2 The dis‐

trict court denied relief. The court found that there was suffi‐

cient evidence to convict Reynolds of either using force or

threatening to use force, and thus any mistake in the jury in‐

structions could not have prejudiced him. The court also

found that Reynolds had not shown that a conflict adversely

                                                  2 Reynolds raised several additional arguments about how his trial

and appellate attorneys were ineffective, but he does not pursue those ar‐

guments in this appeal.
No. 16‐3430 7

affected his appellate representation because Reynolds ar‐

gued only that the conflict prevented his lawyer from pursu‐

ing a procedurally barred claim. The district court declined to

grant a certificate of appealability, but we granted a certificate

to review Reynolds’s claims surrounding his representation

after the State Public Defender’s Office stopped paying his

lawyer.

II. Denial of Effective Counsel

The Sixth and Fourteenth Amendments guarantee crimi‐

nal defendants the effective assistance of counsel during their

first appeals as of right. Evitts v. Lucey, 469 U.S. 387, 393–94,

396–97 (1985); Douglas v. California, 372 U.S. 353, 356–57

(1963). The two‐prong analysis in Strickland v. Washington, 466

U.S. 668 (1984), governs most ineffective assistance claims.

Strickland requires a petitioner to show: (1) that the attorney

provided constitutionally deficient performance; and (2) that

the deficient performance prejudiced the defense. Id. at 687.

Prejudice under Strickland means “a reasonable probability

that, but for counsel’s unprofessional errors, the result of the

proceeding would have been different.” Id. at 694.

Although Strickland states the general rule, the Supreme

Court has recognized some exceptions for situations in which

prejudice is either presumed or easier to show. Bell v. Cone,

535 U.S. 685, 695–96 (2002) (explaining three circumstances

when prejudice is presumed). Reynolds argues that two of

these exceptions apply here: a complete denial of counsel and

an actual conflict of interest.

A. Complete Denial of Counsel

Reynolds first argues that the State caused Williams to

abandon his role as an advocate when it stopped paying him,
8 No. 16‐3430

causing a complete denial of counsel under United States v.

Cronic, 466 U.S. 648 (1984). Cronic recognized three “circum‐

stances that are so likely to prejudice the accused” that they

amount to a complete denial of counsel and prejudice is pre‐

sumed. The first is when a defendant is denied the presence

of counsel at a critical stage of the proceedings. The other two

involve performance along those lines: counsel “entirely” fail‐

ing “to subject the prosecution’s case to meaningful adversar‐

ial testing,” and circumstances that are likely to prevent any

lawyer, “even a fully competent one,” from providing effec‐

tive assistance. Id. at 658–60; see also Bell, 535 U.S. at 695–97

(summarizing the three Cronic scenarios in which prejudice is

presumed and emphasizing that counsel’s failure “must be

complete” to trigger presumption). Reynolds refers to the lat‐

ter two situations as “constructive” denial of counsel and ar‐

gues that one occurred here. He also likens his case to Penson

v. Ohio, 488 U.S. 75 (1988), in which the Court found a com‐

plete denial of counsel when appellate counsel withdrew after

submitting only a bare assertion that the appeal was meritless.

Id. at 88–89.

The Wisconsin Court of Appeals did not reach this denial‐

of‐counsel question, which leads Reynolds to argue that de

novo review applies. But the Wisconsin court failed to reach

this issue for a reason: Reynolds did not raise it in state court.

He procedurally defaulted this claim, and we cannot consider

it on the merits.

Before pursuing habeas relief in federal court, a state pris‐

oner must exhaust available state‐court remedies. 28 U.S.C.

§ 2254(b)(1). In addition, the federal claims “must be fairly

presented to the state courts” so that the state has a “fair op‐

portunity to consider” the issues “and to correct that asserted
No. 16‐3430 9

constitutional defect.” Picard v. Connor, 404 U.S. 270, 275–76

(1971). Fair presentation generally requires the petitioner to

raise both the operative facts and controlling legal principles

in the state courts. Ellsworth v. Levenhagen, 248 F.3d 634, 639

(7th Cir. 2001). If the petitioner fails to present a claim to the

state courts, that claim is procedurally defaulted, and a fed‐

eral habeas court cannot review it absent “cause and preju‐

dice” or a miscarriage of justice (meaning conviction of an in‐

nocent person). E.g., Thomas v. Williams, 822 F.3d 378, 384, 386

(7th Cir. 2016), citing Coleman v. Thompson, 501 U.S. 722, 750

(1991).

Even liberally construed, Reynolds’s pro se petition to the

Wisconsin Court of Appeals did not fairly present this claim

for denial of counsel. He argued only that Wisconsin denied

him the “effective assistance of counsel” by creating “an ac‐

tual conflict of interest” between him and his counsel. The ar‐

gument that he was denied counsel altogether is a different

legal theory governed by a different legal rule—one that the

Wisconsin courts did not have the chance to apply. By refor‐

mulating his claim in this appeal, Reynolds seeks to benefit

from a less stringent standard for deciding prejudice: Cronic’s

presumption of prejudice rather than Sullivan’s adverse‐effect

standard. This tactic does not work. See Boyko v. Parke, 259

F.3d 781, 788 (7th Cir. 2001) (reformulation “should not place

the claim in a significantly different legal posture by making

the claim stronger or more substantial”). A petitioner is not

bound to his state court presentation word‐for‐word, and he

may provide further support for his claim. But he still must

have presented the governing legal principles and “the sub‐

stance of a federal habeas corpus claim” to the state court. Pi‐

card, 404 U.S. at 278; see also Duncan v. Henry, 513 U.S. 364,
10 No. 16‐3430

366 (1995) (per curiam) (“mere similarity of claims is insuffi‐

cient to exhaust”).

Even though Reynolds did not describe the issue in so

many words as a complete denial of counsel, he might have

fairly presented this claim if he had cited relevant cases and

alleged facts that were “well within the mainstream of consti‐

tutional litigation” of that right. Ellsworth, 248 F.3d at 639.

Reynolds did not do so. He did not rely on cases addressing

complete denials of counsel. Instead, he cited Strickland, Sulli‐

van, and Walberg v. Israel, 766 F.2d 1071 (7th Cir. 1985), a case

applying the Sullivan conflict‐of‐interest standard. Reynolds

also cited Douglas v. California, 372 U.S. 353 (1963), and Evitts

v. Lucey, 469 U.S. 387 (1985)—two cases that established the

right to effective assistance of counsel on direct appeal. But a

single reference to these cases was insufficient, especially in

light of the facts Reynolds described. Nowhere did Reynolds

assert that his lawyer abandoned his case. Although he said

that his lawyer “had in essence been fired,” he also wrote that

“Williams felt that it was his professional responsibility to

complete the current briefing process” and that he petitioned

the Wisconsin Supreme Court for further review as well.

When describing his lawyer’s deficient performance, Rey‐

nolds argued only that his lawyer declined to investigate one

argument: the equal protection claim. Asserting that his law‐

yer failed to make that single argument did not fairly notify

the state court that Reynolds claimed a complete denial of

counsel. See Penson, 488 U.S. at 88–89 (distinguishing between

failing “to press a particular argument” and being “entirely

without the assistance of counsel on appeal”).

The fair presentment rule is not so rigid that a pro se peti‐

tioner needed to cite Cronic or any other denial‐of‐counsel
No. 16‐3430 11

case by name. For example, a petitioner could exhaust a de‐

nial of counsel claim by describing facts that amount to a com‐

plete denial of counsel and citing Strickland, which summa‐

rized: “Actual or constructive denial of the assistance of coun‐

sel altogether is legally presumed to result in prejudice.” 466

U.S. at 692. Still, the petitioner must describe facts and legal

principles that fairly notify the court of what it should decide.

Because Reynolds (1) did not rely on cases addressing the

complete denial of counsel, (2) framed the violation as a con‐

flict of interest under Sullivan, and (3) did not allege that he

lacked an attorney, this abandonment claim was not fairly

presented to the state courts. Moreover, even if the denial‐of‐

counsel claim were not procedurally barred or if we were in‐

clined to consider it as sufficiently related to the claims Rey‐

nolds did raise, the record makes clear that attorney Williams

simply did not abandon Reynolds. Even after being told by

the State Public Defender that he would not be paid any more

for working on Reynolds’s case, Williams continued to repre‐

sent Reynolds forfree in the state court of appeals, completing

the briefing there, and then filing a petition for review with

the Wisconsin Supreme Court. That fact does not immunize

his work from scrutiny, but this was not an abandonment that

could lead to the presumption of prejudice.

B. Conflict of Interest

In the alternative, Reynolds argues that he was denied the

effective assistance of counsel when the State Public De‐

fender’s Office created a conflict of interest by ceasing to pay

his lawyer for work on Reynolds’s case while also informing

him that he would no longer receive new case assignments.

Reynolds properly exhausted this claim, and the Wisconsin

Court of Appeals decided it on the merits. We cannot issue a
12 No. 16‐3430

writ of habeas corpus on this basis unless the decision “was

contrary to, or involved an unreasonable application of,

clearly established Federal law, as determined by the Su‐

preme Court of the United States.” 28 U.S.C. § 2254(d)(1).

The first question under § 2254(d)(1) is the scope of clearly

established federal law on a defendant’s Sixth Amendment

right to conflict‐free counsel. The Supreme Court has held

that concurrent multiple representation—for example, repre‐

senting co‐defendants in a single trial—violates the Sixth

Amendment if it “gives rise to a conflict of interest.” Sullivan,

446 U.S. at 348, citing Holloway v. Arkansas, 435 U.S. 475, 482

(1978).

Reynolds argues that his lawyer’s financial interest kept

the lawyer from zealously representing him. We reject this ar‐

gument for two independent reasons. First, the Supreme

Court has not yet extended its multiple‐representation deci‐

sions to financial conflicts of interest between attorney and cli‐

ent, let alone provided clear guidance as to whether or under

what circumstances a financial conflict of interest between at‐

torney and client violates a defendant’s right to counsel. That

silence presents a nearly insurmountable obstacle to this

claim on a federal petition for a writ of habeas corpus. Second,

the Supreme Court has not given lower courts much guidance

as to what counts as an “adverse effect” under Sullivan, as dis‐

tinct from a reasonable probability of a different outcome un‐

der Strickland. Without clearer guidance from the Supreme

Court, the state court decision here was not contrary to or an

unreasonable application of clearly established Supreme

Court law.

In cases where defense counsel represents multiple clients

with conflicting interests, the Supreme Court holds that the
No. 16‐3430 13

standard for reversal depends on whether anyone objected to

the conflict during the representation: “absent objection, a de‐

fendant must demonstrate that ‘a conflict of interest actually

affected the adequacy of his representation.’” Mickens v. Tay‐

lor, 535 U.S. 162, 168 (2002), quoting Sullivan, 446 U.S. at 349.

If no party raises a timely objection to a conflict of interest

arising from multiple representation, the accused must show

that “an actual conflict of interest adversely affected his law‐

yer’s performance.” Sullivan, 446 U.S. at 348. If the defendant

shows a conflict and a lapse in representation, prejudice is

presumed. Id. at 349–50. Reynolds argues that the logic of Sul‐

livan should apply to the financial pressure on his appellate

lawyer, which caused the lawyer to decline to investigate the

equal protection challenge and adversely affected his perfor‐

mance.

The Wisconsin Court of Appeals accepted Sullivan as stat‐

ing the controlling federal rule. That court found that even if

the State interfered with the lawyer’s representation, that po‐

tential interference came after the lawyer had forfeited the

equal protection claim. Afterthe Machner evidentiary hearing,

the scope of the appeal was limited by the lawyer’s earlier fil‐

ings, and the equal protection claim was no longer available.3

The Wisconsin court then concluded that the financial conflict

                                                 

3 Reynolds argues that Wisconsin law did not actually limit the scope

of the appeal at this point. The state courts treated the failure to raise the

issue properly as a waiver. In habeas corpus litigation, federal courts or‐

dinarily defer to state courts’ applications of state procedural rules and

doctrine to proceedings in state courts, at least as long as the relevantrules

or doctrines are firmly established and consistently followed. E.g., Mar‐

tinez v. Ryan, 566 U.S. 1, 9–10 (2012). We see no reason to question the state

courts’ routine conclusion that Reynolds failed to raise the equal protec‐

tion claim in a timely way.  
14 No. 16‐3430

had no adverse effect on Williams’s representation. See Sulli‐

van, 446 U.S. at 349–50. The state court reasoned that even if

attorney Williams had investigated the equal protection the‐

ory, he should have concluded that the theory could not

properly be presented to the court of appeals. It had been for‐

feited because it had not been raised in Reynolds’s first ap‐

peal. Sep. App. 71–72.

The Wisconsin court’s conclusion may or may not be cor‐

rect in the end, but it did not unreasonably apply Sullivan. The

Supreme Court itself simply has not extended Sullivan, or any

constitutional analysis of conflicts of interest, to financial con‐

flicts between attorney and client. Sullivan dealt with one team

of lawyers who represented three men who were accused of

the same murders but were tried in three separate trials. The

Court vacated habeas relief for Sullivan, the one client who

had been convicted. The Court held that, in the absence of a

timely objection, the accused was required to show that the

potential conflict of interest (a) had ripened into an actual con‐

flict of interest that (b) adversely affected the adequacy of his

lawyers’ representation of him. 446 U.S. at 348.

The Supreme Court has not yet held that Sullivan extends

even from multiple, conflicted concurrent representations to

multiple, conflicted successive representations, Mickens, 535

U.S. at 174–76, let alone to financial conflicts of interest. Mick‐

ens affirmed the denial of habeas relief where the lawyer rep‐

resenting the accused in a murder case had been representing

the murder victim on unrelated, undisclosed (and confiden‐

tial) juvenile charges at the time he was murdered. The Mick‐

ens opinion noted that the case had been argued on the as‐

sumption that the Sullivan would extend to conflicted succes‐
No. 16‐3430 15

sive representations, but that the Court was not actually en‐

dorsing that assumption. Id. at 175. Mickens expressly left that

successive representation question open. Id. at 176.

Under 28 U.S.C. § 2254(d)(1), the scope of the Sullivan rule

is a critical issue here. Mickens acknowledged that the federal

courts of appeals had applied Sullivan to “all kinds of alleged

attorney ethical conflicts,” including financial conflicts, as

well as attorney’s interests in getting a job with the prosecutor

or romance with the prosecutor. 535 U.S. at 174. But Mickens

pointedly did not endorse those extensions of Sullivan. Id.

Cautioning the lower courts more broadly, the Court wrote

that “Not all attorney conflicts present comparable difficul‐

ties.” 535 U.S. at 175.4  

This circuit has said that the “precise scope of claims to

which the Cuyler [v. Sullivan] standard applies has not been

definitively stated by the Supreme Court.” Spreitzer v. Peters,

114 F.3d 1435, 1451 n.7 (7th Cir. 1997) (denying habeas relief).

Since before Mickens, we have at least assumed that Sullivan

extends to financial conflicts of interests. United States v. Mar‐

rera, 768 F.2d 201, 206–07 (7th Cir. 1985) (attorney and defend‐

ant agreed to share movie rights to story of crime). Mickens

makes it very difficult, though, to take that step in a habeas

corpus challenge to a state conviction governed by

                                                 

4 The cited financial conflict of interest case was United States v. Hearst,

638 F.2d 1190, 1193 (9th Cir. 1980) (remanding for hearing on whether at‐

torney F. Lee Bailey’s book contract regarding the defense of Patty Hearst

adversely affected his representation of her). But Mickens also noted the

Fifth Circuit decision in Beets v. Scott, 65 F.3d 1258, 1269–72 (5th Cir. 1995)

(en banc), which declined to extend Sullivan to a financial conflict of inter‐

est (also involving media contracts) and instead applied the Strickland v.

Washington standard to the claim of ineffective assistance of counsel.
16 No. 16‐3430

§ 2254(d)(1). To prevail here, Reynolds needs to show that it

would be unreasonable for the state court to fail to extend Sul‐

livan to financial conflicts between attorney and client and that

the state court applied Sullivan unreasonably. That extension

would be a significant new development, with effects far

more sweeping than its extension from concurrent to succes‐

sive representations. Extension to financial conflicts of inter‐

ests would pose a range of challenging problems. It would not

be unreasonable within the meaning of § 2254(d)(1) for lower

courts to refrain from making that extension themselves.

A wide range of fee arrangements can create at least some

tension between attorneys and clients. For example, it is not

unusual in criminal defense for a lawyer to insist on a sizable

up‐front retainer against which the lawyer can bill, often with

little hope of replenishing the retainer if the case takes more

work than the lawyer initially expected. Nor is it unusual for

clients to fall behind in paying their lawyers. In those and

many other circumstances, lawyers may face more or less se‐

rious financial conflicts of interest as the client and case may

call for additional work that will be essentially unpaid. View‐

ing the lawyer’s incentives through a narrow and short‐term

economic lens, these situations give a lawyer a financial in‐

centive to minimize non‐essential work, much like attorney

Williams’s incentives here. Nor is it unusual for underpaid

and overworked public defenders to have to allocate a finite

number of hours in a month or year among different clients.

If such routine incentives, combined with an admission by

a lawyer that his or her judgments about which additional

work to carry out were affected at the margin by those incen‐

tives, were enough to find an actual conflict and “adverse ef‐

fect” that demonstrated ineffective assistance of counsel,
No. 16‐3430 17

many convictions would become vulnerable to collateral at‐

tack. Yet we know that lawyers facing such incentives and

choices are also motivated by their sense of professional duty

and pride, and an interest in their professional reputations, to

continue to do good work for a client even if no more money

will be paid in the particular case. Those realities underlie

Rule of Professional Conduct 1.16. A client’s failure to pay as

agreed can provide good cause for a lawyer to terminate a

representation. But Rule 1.16 provides that a lawyer in that

situation must continue the representation if ordered to do so

by a court. When that happens, there is a financial conflict of

interest not unlike what has happened here. We have not been

directed to any cases treating such conflicts as showing a de‐

nial of effective counsel, let alone to a controlling Supreme

Court case holding as much.

These considerations help to show that how to apply

conflict‐of‐interest doctrine, which so far has developed in the

Supreme Court to address loyalties to multiple clients, to

financial conflicts raises challenging questions that the

Supreme Court simply has not addressed. Under § 2254(d)(1),

we may not use a federal habeas proceeding to extend

Supreme Court precedents into new fields where there is

room for fair‐minded disagreement, as there is here. See

generally Harrington v. Richter, 562 U.S. 86, 101 (2011).

Still, Reynolds argues that a conflict of interest is a conflict

of interest. From his point of view, the fact that the attorney’s

loyalties or interests ran in his personal favor rather than in

favor of another client should not matter. After all, attorney

Williams acknowledged that it was finances that led him to

refuse Reynolds’s request that he look into the equal protec‐

tion challenge to the carjacking statute, and perhaps also to a
18 No. 16‐3430

challenge to the jury instructions on carjacking. Reynolds re‐

lies on the language in Sullivan teaching, in the context of mul‐

tiple, concurrent representations, that an actual conflict of in‐

terest that adversely affected the lawyer’s performance vio‐

lates the Sixth Amendment right to counsel. 446 U.S. at 348–

49.

Assuming that the Sullivan standard applies to this finan‐

cial conflict of interest, which would be consistent with both

the state appellate court’s approach here and our opinion in

Marrera, Reynolds has shown some effect on Williams’s repre‐

sentation: a failure to investigate at least the additional equal

protection claim. An adverse effect seems to be a lower stand‐

ard than the Strickland reasonable probability of a different re‐

sult. But what does it take to show an adverse effect? The Wis‐

consin court concluded there was no adverse effect from the

conflict of interest because any new claims or theories that

Reynolds asked Williams to pursue, including the equal pro‐

tection claim, were already forfeited by the time the conflict

arose. Yet effective lawyers can sometimes overcome proce‐

dural hurdles in criminal appeals and habeas cases. And by

asking whether Williams could have raised the equal protec‐

tion claim after Reynolds asked him to, the Sullivan “adverse

effect” standard begins to slide toward the Strickland standard

of prejudice, gauged in terms of the outcome of the case. The

Sullivan analysis seems to focus more on the conflict’s effect

on the attorney’s actions than on the outcome of the case.

Yet Sullivan still requires not just an effect but an adverse

effect on attorney performance. 446 U.S. at 348. The Supreme

Court has not clarified what counts as an adverse effect. See

Beets v. Scott, 65 F.3d 1258, 1265 (5th Cir. 1995) (en banc) (“The
No. 16‐3430 19

precise nature of [Cuyler v. Sullivan’s] ‘actual conflict’ and ‘ad‐

verse effect’ elements is rather vague ... .”). Nor has the Court

clarified where this standard lies between any effect on attor‐

ney performance and an effect that rises to Strickland preju‐

dice.

We have written broadly that a defendant shows an ad‐

verse effect “if, but for the attorney’s actual conflict of interest,

there is ‘a [reasonable] likelihood that counsel’s performance

somehow would have been different.’” Stoia v. United States,

22 F.3d 766, 771 (7th Cir. 1994), quoting Frazer v. United States,

18 F.3d 778, 787 (9th Cir. 1994) (Beezer, J., concurring). We

used that language in a most unusual case, and one that did

not involve the forfeiture problem that the state court found

decisive here. The lawyer in Stoia who had directed the de‐

fense strategy had entered his own plea agreement with the

federal government. The lawyer was probably violating his

plea agreement by directing the defense strategy in Stoia’s

case, and at the same time the lawyer was under investigation

for soliciting perjury and obstructing justice in his represen‐

tation of one of Stoia’s co‐defendants. 22 F.3d at 771–72. In

Stoia, the defendant’s other lawyers identified a number of

specific ways in which the strategist made decisions that hurt

Stoia’s defense. Id. at 773.  

That situation in Stoia is not readily comparable to a cli‐

ent’s (or state public defender agency’s) more quotidian re‐

fusal or inability to pay. And in any event, the broad Stoia lan‐

guage is not binding on state courts. Under § 2254(d)(1), we

cannot grant habeas relief based on only our own precedent

when a state court has ruled on the merits of a claim.

Even if our language in Stoia were binding precedent in

this case, state courts interpreting it would still need to decide
20 No. 16‐3430

what it means for counsel’s performance to be “different,” let

alone “adverse.” “Adverse” can be read fairly to require a

showing of at least some sort of negative consequence for the

client. It would not be unreasonable for a state court consid‐

ering this question to peek at the merits of the claim that the

attorney did not investigate and raise. Why would failure to

raise a sure loser of an issue necessarily amount to an “ad‐

verse effect” requiring a new trial?

The Wisconsin carjacking statute does not rely on any dis‐

tinctions that implicate suspect classes or fundamental rights.

An equal protection challenge would have to show the legis‐

lature drew a line that bore no rational relationship to a legit‐

imate governmental purpose, e.g., Armour v. City of Indianap‐

olis, 566 U.S. 673, 681 (2012), a standard that is very difficult to

satisfy. This is not the sort of argument that moves courts to

overlook procedural failures to free wrongly convicted de‐

fendants. The state court did not unreasonably apply Su‐

preme Court precedent in holding that a missed opportunity

to raise such an argument in an already untimely fashion was

not an “adverse effect” within the meaning of Sullivan. Rey‐

nolds’s claim cannot meet the stringent standard of

§ 2254(d)(1).5

                                                 

5 Our dissenting colleague proposes as a remedy that Reynolds’s con‐

victions be set aside. That remedy would not fit the argued violation of his

right to counsel on appeal. If the financial conflict produced an “adverse

effect” within the meaning of Sullivan, that effect was counsel’s refusal to

investigate an already‐forfeited equal protection challenge to Wisconsin’s

carjacking statute. That potential challenge still has not been shown to

have any arguable merit. If there were a constitutional violation here in

the appellate representation, the remedy would seem to be a fresh appeal,

not a new trial based on the assumption that the equal protection theory

not only was not forfeited but would have produced a victory on appeal.
No. 16‐3430 21

III. Ineffective Assistance of Appellate Counsel

Finally, Reynolds claims that he received ineffective assis‐

tance of appellate and trial counsel because both attorneys

failed to challenge the jury instructions on his carjacking

counts. This issue is outside the scope of the certificate of ap‐

pealability. We certified Reynolds’s claim that the State vio‐

lated his right to the effective assistance of counsel “when the

state public defender’s office allegedly informed Reynolds’s

appointed counsel that he would not be paid for future work

on Reynolds’s case and when counsel, citing this reason, de‐

clined to conduct additional investigation that Reynolds re‐

quested.” We did not certify any questions related to the jury

instructions, and Reynolds did not request permission to ar‐

gue any non‐certified claims. See Welch v. Hepp, 793 F.3d 734,

737 (7th Cir. 2015). Also, since we know (a) that the state stat‐

ute authorizes conviction for either use or threatened use of a

weapon, see Wis. Stat. § 943.23(1g), and (b) that a deadly

weapon was certainly used in this case, we see no reason to

consider expanding the scope of our certificate of appealabil‐

ity. We therefore decline to review this issue. Welch, 793 F.3d

at 737–38.  

                                                 

See, e.g., Shaw v. Wilson, 721 F.3d 908, 919 (7th Cir. 2013) (ordering new

appeal where appellate counsel had been ineffective); see generally Roe v.

Flores‐Ortega, 528 U.S. 470, 484 (2000) (where appellate counsel abandoned

defendant by failing to file notice of appeal, and defendant otherwise

would have taken appeal, defendant is entitled to new appeal); Penson v.

Ohio, 488 U.S. 75, 87 (1988) (where state appellate court found several ar‐

guable issues in record, remedy for denial of counsel on appeal was new

appeal); Dodd v. Knight, 533 F. Supp. 2d 844, 854 (N.D. Ind. 2008) (ordering

new appeal where appellate counsel was ineffective).
22 No. 16‐3430

The district court’s judgment denying a writ of habeas

corpus is  

AFFIRMED.
No. 16-3430 23

WOOD, Chief Judge, dissenting. Few would doubt that financial conflicts of interest can destroy the integrity of a relationship. That is why, in Tumey v. Ohio, 273 U.S. 510 (1927), 

the Supreme Court found that due process was violated when 

a local judge’s salary depended on the fines that resulted from 

convictions in cases before him. See also Connally v. Georgia, 

429 U.S. 245 (1977) (due process violated by local law providing that judge was compensated only when he issued search 

warrants, not when he denied them). It is why judges must 

give extra scrutiny to the performance of counsel in class actions, lest the lawyer sell out the class and walk away with an 

enormous fee. See RICHARD A. POSNER, ECONOMIC ANALYSIS 

OF LAW 803–04 (9th ed. 2014); Jack B. Weinstein, Ethical Dilemmas in Mass Tort Litigation, 88 NW. U. L. REV. 469, 502–03 

(1994). And it is why the Rules of Professional Conduct for 

Attorneys in Wisconsin, which are based on the American Bar 

Association’s Model Rules with some additions not material 

here, state that “a lawyer shall not represent a client if the representation involves a concurrent conflict of interest.” 

SCR 20:1.7(a). One way in which a forbidden conflict can arise 

is if “there is a significant risk that the representation of one 

or more clients will be materially limited by ... a personal interest of the lawyer.” Id. at 20:1.7(a)(2). The lawyer is relieved 

of this responsibility only if, among other things, the “affected 

client gives informed consent, confirmed in a writing signed 

by the client.” Id. at 20:1.7(b)(4). In addition, lawyers may not 

limit the scope of their representation of a client unless “the 

client gives informed consent,” again in writing. Id. at 

20:1.2(c). 

The obvious concern is that, faced with a conflict between 

one’s own financial interest and the interests of another person, the former will win out. If the lawyer puts his or her own 
24 No. 16-3430

interest first, the client is the loser. This is precisely what Cornell Reynolds says happened to him in the course of the criminal prosecution the State of Wisconsin brought against him 

in the early 2000s. 

The key events in the case can be summarized quickly. In 

May 2001, Reynolds was charged with carjacking resulting in 

death. The primary issue at the trial was identification. A jury 

convicted him, and he was sentenced in early 2002. As Wisconsin law permits, Reynolds then filed a direct appeal and a 

post-conviction motion simultaneously. At that point, the 

Wisconsin State Public Defender’s Office appointed attorney 

Terry Williams to serve as Reynolds’s post-conviction and appellate counsel. Williams filed a motion for a new trial on the 

ground that Reynolds’s trial counsel had been ineffective in 

failing to raise an alibi defense. The state trial court denied the 

post-conviction motion without holding an evidentiary hearing. 

Still with Williams’s help, Reynolds appealed to the Wisconsin Court of Appeals, which reversed and remanded the 

ruling on the post-conviction motion so that the trial court 

could hold an evidentiary hearing on the ineffectiveness 

point. The trial court obliged, but it again concluded that 

Reynolds was not entitled to a new trial. 

So far, so good. The problem now before us arose when 

Williams filed a new appeal on Reynolds’s behalf. While that 

appeal was pending, someone on the staff of the Wisconsin 

State Public Defender’s Office told Williams that he had spent 

too much time on the case. The consequences were serious for 

Williams: (1) he would not be paid for some of the work he 

already had done; (2) he would not be paid for any more work 

on Reynolds’s case; and (3) he would no longer receive case 
No. 16-3430 25

assignments from the Public Defender. At that point, Williams 

halted all further work on the case. Reynolds asked him to 

pursue an equal protection challenge to the car-jacking statute, but Williams refused to do so. Importantly, his stated reason had nothing to do with the potential merit of such an argument. Williams frankly said that he was shutting down his 

work because the state was not paying him. He told Reynolds 

that he would do additional work if Reynolds paid him for it, 

but Reynolds was unable to do so. Williams simply filed the 

brief he already had prepared, and after the court of appeals 

affirmed the trial court’s order, he later filed a petition for review on Reynolds’s behalf in the Wisconsin Supreme Court. 

After some additional state proceedings, Reynolds filed a 

petition for habeas corpus under 28 U.S.C. § 2254 in the federal court. He presented several arguments: first, that he was 

constructively denied counsel after the Public Defender’s Office cut off Williams’s pay, in violation of United States v. 

Cronic, 466 U.S. 648 (1984); second, that Williams had an actual financial conflict of interest, which resulted in the denial 

of effective assistance of counsel under the standards of Cuyler 

v. Sullivan, 446 U.S. 335 (1980); and third, that his appellate 

counsel was ineffective pursuant to Strickland v. Washington,

466 U.S. 668 (1984), for failing to object to trial counsel’s own 

failure to object to certain jury instructions. While I am persuaded that the state courts’ decisions fell within the generous 

boundaries provided by section 2254 with respect to the first

and third of these arguments, I conclude that the state courts, 

as well as the majority here, have failed to apply Cuyler 

properly and that Reynolds is entitled to issuance of the writ 

on this ground.
26 No. 16-3430

In Cuyler, the Supreme Court addressed the question 

“whether a state prisoner may obtain a federal writ of habeas 

corpus by showing that his retained defense counsel represented potentially conflicting interests.” 446 U.S. at 337. In the 

case before the Court, two lawyers had represented three codefendants in a murder prosecution. The Court accepted that 

this amounted to multiple representation. Id. at 342. But it 

clarified that “multiple representation does not violate the 

Sixth Amendment unless it gives rise to a conflict of interest.” 

Id. at 348.

The burden on a defendant who seeks to establish a violation of the Sixth Amendment in such cases, the Court held, is 

to “demonstrate that an actual conflict of interest adversely affected his lawyer’s performance.” Id. (emphasis added). Such a 

showing might rest on a failure to cross-examine a witness, or 

a failure to object to the introduction of certain evidence. Id.

at 348–49. Critically, it is the lawyer’s performance that is the 

focus of the inquiry, not the ultimate outcome of the trial. The 

Court expressly declared that once unconstitutional multiple 

representation has been demonstrated—that is, once the defendant has shown an actual conflict and an adverse effect on 

the lawyer’s performance—there “is never harmless error.” Id.

at 349 (emphasis added). Underscoring that fact, the Court 

continued as follows:

Thus, a defendant who shows that a conflict of 

interest actually affected the adequacy of his 

representation need not demonstrate prejudice 

in order to obtain relief.

Id. at 349–50. Because the court of appeals had used a different 

standard, the Court remanded the case for further proceedings.
No. 16-3430 27

As my colleagues note, some conflicts and ethical violations do not present difficulties akin to multiple representation. Ante at 17. But we must not lose sight of the fact that 

Cuyler created a standard to be applied not just when one attorney represents clients with competing interests, but “in situations where Strickland itself is evidently inadequate to assure vindication of the defendant’s Sixth Amendment right to 

counsel.” Mickens v. Taylor, 535 U.S. 162, 176 (2002). The existence of an actual conflict of interest between attorney and client is one of those instances. Cf. United States v. Gonzalez-Lopez, 

548 U.S. 140, 146 (2006) (finding structural error in the deprivation of the right to counsel of choice, rejecting harmless error, and holding that “no additional showing of prejudice is 

required to make the violation ‘complete’”).

Reynolds has established the two elements required by 

Cuyler: he has shown that there was an actual conflict of interest between him and his lawyer, and he has shown that the 

conflict had an adverse effect on his lawyer’s performance, insofar as the lawyer limited the scope of his representation to 

the matters he already had researched and flatly refused to 

look into anything else. The Supreme Court has not distinguished between an actual conflict of interest arising out of 

multiple representation, as was present in Cuyler, and a more 

direct conflict of interest between attorney and client based on 

financial considerations. (Indeed, the latter situation involves 

a form of multiple representation: Williams was trying to represent both himself and Reynolds.) Nor can there be any 

doubt that the conflict between Reynolds and Williams affected Williams’s performance. Without obtaining Reynolds’s 

permission, as contemplated by professional ethics norms 

and over Reynolds’s direct objection, Williams froze his work 

for Reynolds and did nothing but file what he already had 
28 No. 16-3430

completed, following up on the same limited points with the 

state supreme court. 

At the state post-conviction stage, Reynolds presented this 

conflict-of-interest claim to the state courts. The Wisconsin 

court of appeals agreed that “a conflict of interest may also 

arise when an attorney and his client have divergent interests.” Sep. App. at 70 (quotation marks omitted). The court 

then correctly noted that the claimant had to show an actual 

conflict and an adverse effect on the lawyer’s performance. Id.

It then discussed Williams’s performance for a bit, but it pivoted over to the ultimate result in the case, when it said that 

had Williams not had the conflict, he would have determined 

that the issue Reynolds wanted to raise was not properly before the court in any event. That is the language of harmless 

error, not a reference to Williams’s own performance. It says, 

in essence, that the conflict affected Williams’s performance 

insofar as he failed to raise the issues that Reynolds wanted to 

see explored, but that Williams’s failure could not have affected the outcome.

That reasoning is contrary to the holding of Cuyler, which 

cannot have been more clear in rejecting a harmless-error approach. At the very least, it is an unreasonable application of 

Cuyler, since it shifts from a focus on Williams’s performance 

to one on the ultimate impact of Williams’s decisions in a 

manner that Cuyler forbids. See also Mickens, 535 U.S. at 170 

(2002) (stressing that the conflict must affect counsel’s performance, rather than be merely a theoretical division of loyalties). Tempting as it may be to engage in harmless-error analysis in every case, the Supreme Court has decided that there 

are some situations in which it is off the table. 
No. 16-3430 29

The only remaining question is what the appropriate remedy is in this case. A common remedy for a failure of counsel 

at the appellate stage would be, as my colleagues have noted, 

a fresh appeal with unconflicted counsel. See Shaw v. Wilson,

721 F.3d 908, 919 (7th Cir. 2013). But nothing in the statute restricts the district court’s options to only that remedy. To the 

contrary, the law provides that “[t]he court shall summarily 

hear and determine the facts, and dispose of the matter as law 

and justice require.” 28 U.S.C. § 2243, ¶ 8. The Supreme Court 

has recognized that “a court has broad discretion in conditioning a judgment granting habeas relief.” Hilton v. Braunskill, 481 U.S. 770, 775 (1987). The question here is thus what 

remedy would suffice to redress the serious miscarriage of 

justice suffered by Reynolds.

In my view, this is a situation that demands more than a 

fresh appeal. The state courts have already decided—in the 

absence of a proper adversary presentation on Reynolds’s behalf—that any additional points that may have been raised on 

appeal were forfeited or meritless. I have no reason to believe 

that they would not simply reiterate that point, if we were to 

limit the remedy to a new appeal. (Principles of law-of-thecase might even require them to do so.) Because a new appeal 

would not redress the constitutional violation in Reynolds’s 

case, I would issue a conditional writ granting him a new trial 

(if the state chooses to take that step). This is well within the 

scope of the statute, as our sister circuits have recognized. See, 

e.g., Ramchair v. Conway, 601 F.3d 66, 78 (2d Cir. 2010) (petitioner deprived of effective appellate counsel entitled to new 

trial as remedy); Turner v. Bagley, 401 F.3d 718, 727 (6th Cir. 

2005) (granting unconditional writ requiring new trial for 

deprivation of access to appellate process because of undue 

delay); Eagle v. Linahan, 279 F.3d 926, 943–44 (11th Cir. 2001) 
30 No. 16-3430

(appellate counsel’s failure to raise Batson claim remedied by 

grant of new trial). 

In this respect, I agree with the observations of the Tenth 

Circuit in Clayton v. Jones, 700 F.3d 435 (10th Cir. 2012), a case 

in which the defendant was denied his right to appeal because 

of ineffective assistance of counsel. As that opinion put it, 

“[c]ertainly a district court is not confined to only granting an 

appeal out of time when a petitioner has been denied his right 

to a direct appeal. It is not unprecedented for a district court 

to fashion a remedy for ineffective assistance of counsel on 

appeal that goes beyond an appeal out of time.” Id. at 443–44. 

The only problem in Clayton was that the district court had 

not sufficiently explained why a new appeal would not suffice. I have indicated why I believe this case is a proper candidate for a broader remedy. Reynolds has tried hard to navigate the habeas corpus process—no mean feat for even an experienced lawyer—and in my view he has shown that he 

should receive a new trial.

I therefore respectfully dissent.