### In the



# United States Court of Appeals

For the Seventh Circuit

____________________

No. 16

‐ 3430

C ORNELL D. R EYNOLDS

,

Petitioner

‐ Appellant

,

v.

R ANDALL H EPP

, Respondent

‐ Appellee

.

____________________

Appeal from the United States District Court for the

Eastern District of Wisconsin.

No. 16

‐ CV

‐ 508

— William C. Griesbach

, Chief Judge

.

____________________

A RGUED J ANUARY 4, 2018

— D ECIDED A UGUST 30, 2018

____________________

Before W OOD

, Chief Judge

, and H AMILTON and B ARRETT

,

Circuit Judges

.

H AMILTON

, 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 during2 No. 16

‐ 3430

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

ine ff ective assistance from his counsel during his direct ap

‐ peal and trial. The district court denied relief. We a ffi rm.

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 identi fi ed as the

shooter. Wisconsin indicted him for carjacking resulting in

death, carjacking resulting in bodily harm, and possessing a

fi rearm 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 fi led 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 identi fi cation. The prosecution called four

eyewitnesses, including the surviving gunshot victim. Each

identi fi ed 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 fi rearm by a felon.

The Wisconsin State Public Defender’s O ffi ce appointed

a tt orney Terry Williams as Reynolds’s post

‐ conviction andNo. 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

‐

e ff ective assistance and should have raised an alibi defense. 1

Reynolds submi tt ed two a ffi davits describing his wherea

‐

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

the a ffi davits 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 ine ff ective assistance or prejudice to his defense.

On direct appeal, Reynolds argued that he was entitled to

an evidentiary hearing on his ine ff ective 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—

sta ff at the Wisconsin State Public Defender’s O ffi ce told at

‐

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

The State Public Defender’s O ffi ce 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 cu tt ing o ff a tt orney 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 e ff orts the

sta ff might have made to protect Reynolds’s interests.

Reynolds did not immediately learn that the State Public

Defenders had stopped paying his a tt orney. 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 a ff ord to investigate that additional question. Reynolds

could not a ff ord 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 brie fi ng in the Wisconsin Court of Appeals on the inef

‐

fective

‐ assistance claims and later fi led a petition for review

with the Wisconsin Supreme Court. The Court of Appeals af

‐

fi rmed the denial of a new trial, and the Wisconsin Supreme

Court denied review.

B. Collateral Post

‐ Conviction Relief

In October 2010, Reynolds fi led a pro se collateral post

‐

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

As relevant here, Reynolds argued that he received ine ff ective

assistance of appellate counsel because a tt orney 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 convictNo. 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 ine ff ective for not raising this

argument on appeal.

The trial court denied the motion without a hearing, and

the Wisconsin Court of Appeals a ffi rmed. The appellate court

fi rst found that Reynolds’s claim for ine ff ective 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

su ffi cient to support a conviction under Wisconsin law be

‐

cause the carjacking statute establishes a single o ff ense that

can be commi tt ed by using or threatening to use a weapon.

See Wis. Stat. § 943.23(1g) (de fi ning 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 identi fi cation, not the di ff erence

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 fi led 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 O ffi ce stopped paying his appellate

a tt orney. Reynolds claimed that the State interfered with his

representation, created a con fl ict of interest between him and6 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

con fl ict

‐ 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 con fl ict

adversely a ff ected his lawyer’s representation of him. The

court found as a ma tt er 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

e ff ort to bring the equal protection claim after that point

would have been frivolous, the Wisconsin Court of Appeals

found, so the con fl ict of fi nancial interest could not have ad

‐ versely a ff ected Williams’s representation of Reynolds.

D. Federal Habeas Corpus Proceedings

Reynolds then fi led 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 con fl ict of interest during his direct

appeal, and that his appellate counsel was constitutionally in

‐

e ff ective for failing to object to the jury instructions. 2 The dis

‐

trict court denied relief. The court found that there was su ffi‐

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 con fl ict 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

a ff ected his appellate representation because Reynolds ar

‐ gued only that the con fl ict prevented his lawyer from pursu

‐ ing a procedurally barred claim. The district court declined to

grant a certi fi cate of appealability, but we granted a certi fi cate

to review Reynolds’s claims surrounding his representation

after the State Public Defender’s O ffi ce stopped paying his

lawyer.

II. Denial of E ff

ective Counsel

The Sixth and Fourteenth Amendments guarantee crimi

‐

nal defendants the e ff ective assistance of counsel during their

fi rst appeals as of right. Evi tt s 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 ine ff ective assistance claims.

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

provided constitutionally de fi cient performance; and (2) that

the de fi cient 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 di ff erent.” 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 con fl ict of interest.

A

. Complete Denial of Counsel

Reynolds fi rst 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 fi rst 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 e ff ec

‐

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

submi tt ing 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 assertedNo. 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 “e ff ective assistance of counsel” by creating “an ac

‐

tual con fl ict of interest” between him and his counsel. The ar

‐

gument that he was denied counsel altogether is a di ff erent

legal theory governed by a di ff erent 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 bene fi t

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

presumption of prejudice rather than Sullivan ’s adverse

‐ e ff ect

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 signi fi cantly di ff erent 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 insu ffi‐

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 con fl ict

‐ of

‐ interest standard. Reynolds

also cited Douglas v. California

, 372 U.S. 353 (1963), and Evi tt s

v. Lucey

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

right to e ff ective assistance of counsel on direct appeal. But a

single reference to these cases was insu ffi cient, 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 fi red,” he also wrote that

“Williams felt that it was his professional responsibility to

complete the current brie fi ng process” and that he petitioned

the Wisconsin Supreme Court for further review as well.

When describing his lawyer’s de fi cient 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

‐ counselNo. 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

‐

fl ict of interest under Sullivan

, and (3) did not allege that he

lacked an a tt orney, 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 su ffi ciently related to the claims Rey

‐

nolds did raise, the record makes clear that a tt orney 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 for free in the state court of appeals, completing

the brie fi ng there, and then fi ling 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. Con fl ict of Interest

In the alternative, Reynolds argues that he was denied the

e ff ective assistance of counsel when the State Public De

‐

fender’s O ffi ce created a con fl ict 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 a12 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 fi rst question under § 2254(d)(1) is the scope of clearly

established federal law on a defendant’s Sixth Amendment

right to con fl ict

‐ 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 con fl ict of interest.” Sullivan

,

446 U.S. at 348, citing Holloway v. Arkansas

, 435 U.S. 475, 482

(1978).

Reynolds argues that his lawyer’s fi nancial 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 fi nancial con fl icts of interest between a tt orney and cli

‐

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

what circumstances a fi nancial con fl ict 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 e ff ect” under Sullivan

, as dis

‐

tinct from a reasonable probability of a di ff erent 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 con fl icting interests, the Supreme Court holds that theNo. 16

‐ 3430 13

standard for reversal depends on whether anyone objected to

the con fl ict during the representation: “absent objection, a de

‐

fendant must demonstrate that ‘a con fl ict of interest actually

a ff ected 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 con fl ict of interest

arising from multiple representation, the accused must show

that “an actual con fl ict of interest adversely a ff ected his law

‐ yer’s performance.” Sullivan

, 446 U.S. at 348. If the defendant

shows a con fl ict and a lapse in representation, prejudice is

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

‐

livan should apply to the fi nancial pressure on his appellate

lawyer, which caused the lawyer to decline to investigate the

equal protection challenge and adversely a ff ected 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. After the Machner evidentiary hearing,

the scope of the appeal was limited by the lawyer’s earlier fi l

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

The Wisconsin court then concluded that the fi nancial con fl ict

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 relevant rules

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 e ff ect on Williams’s representation. See Sulli

‐

van

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

a tt orney 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 fi rst 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 con fl icts of interest, to fi nancial con

‐

fl icts between a tt orney 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 con fl ict of interest (a) had ripened into an actual con

‐

fl ict of interest that (b) adversely a ff ected 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, con fl icted concurrent representations to

multiple, con fl icted successive representations, Mickens

, 535

U.S. at 174–76, let alone to fi nancial con fl icts of interest. Mick

‐

ens a ffi rmed 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 con fi den

‐ 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 con fl icted 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

a tt orney ethical con fl icts,” including fi nancial con fl icts, as

well as a tt orney’s interests in ge tt ing 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 a tt orney con fl icts present comparable di ffi cul

‐

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

de fi nitively stated by the Supreme Court.” Sprei tz er 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 fi nancial con fl icts of interests. United States v. Mar

‐

rera

, 768 F.2d 201, 206–07 (7th Cir. 1985) (a tt orney and defend

‐

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

makes it very di ffi cult, 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 fi nancial con fl icts between a tt orney and client and that

the state court applied Sullivan unreasonably. That extension

would be a signi fi cant new development, with e ff ects far

more sweeping than its extension from concurrent to succes

‐

sive representations. Extension to fi nancial con fl icts 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 a tt orneys 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

li tt le 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 fi nancial con fl icts 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 fi nancial in

‐

centive to minimize non

‐ essential work, much like a tt orney

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

and overworked public defenders to have to allocate a fi nite

number of hours in a month or year among di ff erent 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 a ff ected at the margin by those incen

‐

tives, were enough to fi nd an actual con fl ict and “adverse ef

‐

fect” that demonstrated ine ff ective 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 fi nancial con fl ict of

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

directed to any cases treating such con fl icts as showing a de

‐

nial of e ff ective counsel, let alone to a controlling Supreme

Court case holding as much.

These considerations help to show that how to apply

con fl ict

‐ of

‐ interest doctrine, which so far has developed in the

Supreme Court to address loyalties to multiple clients, to

fi nancial con fl icts 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 fi elds 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 con fl ict of interest is a con fl ict

of interest. From his point of view, the fact that the a tt orney’s

loyalties or interests ran in his personal favor rather than in

favor of another client should not ma tt er. After all, a tt orney

Williams acknowledged that it was fi nances 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 a18 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 con fl ict of in

‐

terest that adversely a ff ected 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 fi nan

‐

cial con fl ict of interest, which would be consistent with both

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

Marrera

, Reynolds has shown some e ff ect on Williams’s repre

‐

sentation: a failure to investigate at least the additional equal

protection claim. An adverse e ff ect seems to be a lower stand

‐

ard than the Strickland reasonable probability of a di ff erent re

‐

sult. But what does it take to show an adverse e ff ect? The Wis

‐

consin court concluded there was no adverse e ff ect from the

con fl ict 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 con fl ict

arose. Yet e ff ective 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

e ff ect” 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 con fl ict’s e ff ect

on the a tt orney’s actions than on the outcome of the case.

Yet Sullivan still requires not just an e ff ect but an adverse

e ff ect on a tt orney performance. 446 U.S. at 348. The Supreme

Court has not clari fi ed what counts as an adverse e ff ect. See

Beets v. Sco tt

, 65 F.3d 1258, 1265 (5th Cir. 1995) (en banc) (“TheNo. 16

‐ 3430 19

precise nature of [ Cuyler v. Sullivan ’s] ‘actual con fl ict’ and ‘ad

‐

verse e ff ect’ elements is rather vague

... .”). Nor has the Court

clari fi ed where this standard lies between any e ff ect on a tt or

‐

ney performance and an e ff ect that rises to Strickland preju

‐

dice.

We have wri tt en broadly that a defendant shows an ad

‐

verse e ff ect “if, but for the a tt orney’s actual con fl ict of interest,

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

somehow would have been di ff erent.’” 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 identi fi ed a number of

speci fi c 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 decide20 No. 16

‐ 3430

what it means for counsel’s performance to be “di ff erent,” 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

a tt orney did not investigate and raise. Why would failure to

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

‐

verse e ff ect” 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 di ffi cult 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 e ff ect” 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. Ine ff

ective Assistance of Appellate Counsel

Finally, Reynolds claims that he received ine ff ective assis

‐

tance of appellate and trial counsel because both a tt orneys

failed to challenge the jury instructions on his carjacking

counts. This issue is outside the scope of the certi fi cate of ap

‐ pealability. We certi fi ed Reynolds’s claim that the State vio

‐

lated his right to the e ff ective assistance of counsel “when the

state public defender’s o ffi ce 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

‐ certi fi ed 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 certi fi cate 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

W OOD

, C hief 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 lo cal 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

e normous fee. See R ICHARD A. P OSNER

, E CONOMIC A NALYSIS

OF L AW 803

– 04 (9th ed. 2014); Jack B. Weinstein

, Ethical Dilemmas in Mass Tort Litigation , 88 N W

. U. L. R EV

. 469, 502

– 03

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

Attorneys in Wisconsi n, 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 concur rent conflict of interest. ”

SCR 20:1.7(a). One way in which a f orbidden 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, am ong 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, ” a gain in writing. Id. at

20:1.2(c).

The obvious concern is that, faced with a conflict between

one ’ s own fi nancial interest and the interests of another person, the former will win out. If the lawyer puts his or her own24 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 brough t against him

in the early 2000 s.

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

May 2001, Reynolds was ch arged 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

- co nviction 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 ineff ective 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

r uling 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 bef ore 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 caseNo. 16

- 3430 25

assignments from the Public Defender. At that point, Williams

halted al l 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 frankl y 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,

bu t Reynolds was unable to do so. Williams simply filed the

brief he already had prepared, and af ter 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. § 225 4 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 a ctual 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 ’ decision s 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,

a s 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 address ed 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 co

defendants in a murder prosecution. The Court accepted that

this amounted to multiple representation

. I d. at 342. But i t

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 mig ht rest on a failure to cross

- examine a witness, or

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

at 34 8

– 4 9. Critically, it is the lawyer ’ s performance that is the

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

Court ex pressly 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 cou rt 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 sig ht 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 i n 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 t hat 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 resea rched 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 an d 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 had28 No. 16

- 3430

completed, followin g 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 whe n 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 c ourt 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 shif ts 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 th an 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 appr opriate 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 su ffered 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 reit erate that point, if we were to

limit the remedy to a new appeal. (Principles of law

- of

- the

case 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 gra nting 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 (1 1th 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 de nied 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 un precedented 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 f or even an experienced lawyer

— and in my view he has shown that he

should receive a new trial.

I therefore respectfully dissent.