IN THE

SUPREME COURT OF THE STATE OF ARIZONA

GRAEME HANCOCK,

Petitioner,

v.

HON. WILLIAM J. O’NEIL, PRESIDING DISCIPLINARY JUDGE,

Respondent Judge,

STATE BAR OF ARIZONA,

Real Party in Interest.

No. CV-21-0145-SA

Filed August 29, 2022

Special Action from the Office of the Presiding Disciplinary Judge

No. PDJ2019-9040

JURISDICTION ACCEPTED, RELIEF GRANTED

COUNSEL:

Dominic E. Draye (argued), Andrew F. Halaby, William E. Eye, Greenberg 

Traurig, LLP, Phoenix, Attorneys for Graeme Hancock

David L. Sandweiss, Senior Bar Counsel (argued), Kelly J. Flood, David E. 

Wood, State Bar of Arizona, Phoenix, Attorneys for State Bar of Arizona

J. Scott Rhodes, In Propria Persona, Phoenix, Attorney for Amicus Curiae J. 

Scott Rhodes

CHIEF JUSTICE BRUTINEL authored the Opinion of the Court, in which 

VICE CHIEF JUSTICE TIMMER and JUSTICES BOLICK, LOPEZ, BEENE,

MONTGOMERY, and PELANDER (RETIRED) joined.

*



Justice Kathryn Hackett King has recused herself from this case. Pursuant 

to article 6, section 3 of the Arizona Constitution, Justice John Pelander 

(Ret.), was designated to sit in this matter.
 GRAEME HANCOCK v. HON. O'NEIL/STATE BAR OF ARIZONA

Opinion of the Court

2

CHIEF JUSTICE BRUTINEL, Opinion of the Court:

¶1 In this special action, we are asked to decide whether 

offensive issue preclusion applies in attorney disciplinary proceedings. The 

Arizona Rules of the Supreme Court governing attorney discipline give

preclusive effect to two types of prior judgments in attorney disciplinary

matters: (1) criminal convictions, Rule 54(g), and (2) attorney discipline 

imposed in other jurisdictions, Rule 54(h). Because our rules dictate when 

a prior judgment may have preclusive effect in attorney disciplinary

proceedings, we hold that offensive issue preclusion does not apply. 

Therefore, a sanctions order in a prior lawsuit does not have preclusive 

effect in an attorney disciplinary proceeding.

I. BACKGROUND

¶2 This case arises from one of many lawsuits concerning 

Goodyear’s G159 tire. The plaintiffs in the underlying action, the Haegers, 

suffered serious injuries when the front tires to their motor home failed. 

The Haegers sued Goodyear in state court, and Goodyear subsequently 

removed the case to federal district court.

¶3 Goodyear appointed Basil Musnuff, an Ohio lawyer, as 

“national coordinating counsel” on all G159 cases across the country to 

oversee discovery requests, coordinate the search for documents, and draft 

responses. Goodyear hired Arizona attorney Graeme Hancock as local 

counsel.

¶4 During discovery, the Haegers requested test records for the 

G159, but Goodyear, through its counsel, repeatedly denied the existence 

of such tests and otherwise refused to produce them. The Haegers and 

Goodyear settled on the first day of trial after extensive pre-trial litigation.

¶5 Almost a year after the Haeger settlement, a newspaper article 

reporting on another G159 case mentioned testing data, the same data 

Goodyear and its counsel denied existed. The Haegers filed a motion for 

sanctions alleging discovery fraud. Following sanctions proceedings, the 
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Opinion of the Court

3

district court issued a lengthy sanctions order against Goodyear, Musnuff, 

and Hancock, detailing each party’s involvement in defrauding the court.1

¶6 Subsequently, the State Bar of Arizona (the “Bar”) initiated an 

investigation into Hancock’s conduct. Upon completing the investigation, 

the Bar recommended an Order of Probable Cause to the Attorney 

Discipline Probable Cause Committee. The committee found probable 

cause, and the Bar filed a formal complaint against Hancock. See Ariz. R. 

Sup. Ct. 47 (outlining attorney discipline procedural matters).

¶7 At the disciplinary proceeding, the Presiding Disciplinary 

Judge (“PDJ”) granted the Bar’s motion for partial summary judgment, 

applying offensive non-mutual issue preclusion to prevent Hancock from 

relitigating the district court’s fact findings.

¶8 Hancock filed a petition for special action in this Court 

challenging the applicability of issue preclusion in Bar disciplinary 

proceedings. We have jurisdiction under article 6, section 5(3) of the 

Arizona Constitution.

II. DISCUSSION

¶9 “Application of issue preclusion is an issue of law, which we 

review de novo.” Picaso v. Tucson Unified Sch. Dist., 217 Ariz. 178, 180 ¶ 6 

(2007).

A.

¶10 Issue preclusion is a judicial doctrine that, when applicable, 

prevents a party from relitigating an issue of fact decided in a prior 

judgment. Crosby-Garbotz v. Fell ex. rel. Cnty. of Pima, 246 Ariz. 54, 55 ¶ 1

(2019).

2 Offensive issue preclusion occurs when the party invoking the 

doctrine uses it as a sword against another party who lost on the issue in a 

prior judgment. See id. at 60 ¶ 26. Our Court, as well as the United States 

Supreme Court, has noted that offensive issue preclusion is “a situation 

that . . . present[s] different considerations” beyond the four elements state 

1 Haeger v. Goodyear Tire & Rubber Co., 906 F. Supp. 2d 938 (D. Ariz. 2012), 

aff’d, 813 F.3d 1233 (9th Cir. 2016), rev’d and remanded, 581 U.S. 101 (2017).

2 Issue preclusion is also known as collateral estoppel. Id.
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4

and federal law require for defensive issue preclusion.3 Id.; see Parklane 

Hosiery Co. v. Shore, 439 U.S. 322, 329–31 (1979).4

¶11 The law of the jurisdiction of the court from which the 

underlying initial judgment issues determines whether that judgment has 

preclusive effect. In re Gen. Adjudication of All Rts. to Use Water in Gila River 

Sys. & Source, 212 Ariz. 64, 69 ¶ 13 (2006). But in federal diversity cases,

such as the Haeger case, federal law incorporates “the law that would be 

applied by state courts in the State in which the federal diversity court sits.”

Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 508 (2001). As a result, 

Arizona law governs the preclusive effect of a judgment from a District of 

Arizona federal court sitting in diversity. And this Court is the ultimate 

authority on Arizona law, to which the federal courts must defer. See Erie

R. Co. v. Tompkins, 304 U.S. 64, 79 (1938). Thus, it is our duty to decide 

whether Arizona law would give effect to such a judgment.

3 For defensive issue preclusion, federal and state law require that: (1) The 

issue at stake must be the same in both proceedings; (2) the issue must have 

been actually litigated and decided in the prior proceedings; (3) the party 

against whom the doctrine is to be invoked must have had a full and fair 

opportunity to litigate the issue; and (4) the issue must have been necessary 

to decide the merits of the prior action. Janjua v. Neufeld, 933 F.3d 1061, 1065 

(9th Cir. 2019) (quoting Oyeniran v. Holder, 672 F.3d 800, 806 (9th Cir. 2012), 

as amended (May 3, 2012)); Chaney Bldg. Co. v. City of Tucson, 148 Ariz. 571, 

573 (1986).

4 Because offensive, non-mutual use of the doctrine may lead to perverse 

outcomes, federal courts employ a four-factor “fairness” test before giving 

a judgment preclusive effect on an issue when the parties are not identical 

in both suits and the party invoking the doctrine uses it offensively, that is

as a sword, not a shield. See Parklane, 439 U.S. at 330–32; Off. of Disciplinary 

Couns. v. Kiesewetter, 889 A.2d 47, 52 (Pa. 2005) (“(1) [W]hether the plaintiff 

could have joined the earlier action; (2) whether the subsequent litigation 

was foreseeable and therefore the defendant had an incentive to defend the 

first action vigorously; (3) whether the judgment relied upon as a basis for 

collateral estoppel is inconsistent with one or more previous judgments in 

favor of the defendant; and (4) whether the second action would afford the 

defendant procedural opportunities unavailable in the first action that 

could produce a different result.”) (summarizing Parklane fairness factors).
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¶12 This Court is not only the ultimate authority on Arizona law, 

but also “the ultimate body wielding the State’s power over the practice of 

law.” Bates v. State Bar of Ariz., 433 U.S. 350, 360 (1977); see also Ariz. Const. 

art. 6, § 3 (entrusting this Court with administrative supervision over state 

courts); Scheehle v. Justices of the Sup. Ct. of the State of Ariz., 211 Ariz. 282, 

290 ¶ 31 (2005) (concluding that article 6, section 3 provides for this Court’s 

“constitutional power over attorneys as officers of the court”). We are 

therefore not required to give preclusive effect to any prior judgment in an 

attorney disciplinary matter, other than that which is already provided 

under our rules or caselaw. Thus, in the exercise of our regulatory authority 

over the practice of law in this state, we hold as a matter of Arizona law that 

the doctrine of offensive issue preclusion does not apply to attorney 

disciplinary proceedings. Instead, our rules determine the preclusive effect 

of prior judgments in attorney disciplinary proceedings.

B.

¶13 The Arizona Supreme Court Rules governing attorney 

disciplinary matters do not explicitly reference issue preclusion. But the 

rules do enumerate grounds for discipline, and two grounds arise from 

prior judgments: (1) discipline for the conviction of a crime, Rule 54(g), and 

(2) discipline imposed by other jurisdictions, Rule 54(h). The practical effect 

of these subsections is that, if an attorney is convicted of a crime or 

disciplined by another jurisdiction, the attorney is precluded from 

relitigating whether he or she committed the underlying crime or ethical 

violation, subject to the provisions of Rule 57(b) in the context of discipline 

by another jurisdiction.

¶14 Although the practical effect of these subsections is effectively 

issue preclusion, Rules 54(g) and 54(h) do not apply the doctrine of issue 

preclusion. Rather, the rules prescribe the procedure. If an attorney is 

convicted of a crime or disciplined in another jurisdiction, then the attorney 

may be disciplined. The rules provide further instruction for recognizing 

and imposing discipline ordered in another jurisdiction:5

5 The findings that would prevent the imposition of discipline stemming 

from discipline in another jurisdiction are in large part akin to the Parklane

fairness factors. See Parklane, 439 U.S. at 330–32. Though we note these 

similarities, we refrain from characterizing our rules as permitting issue 
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[T]he presiding disciplinary judge shall impose the identical 

or substantially similar discipline, unless bar counsel or 

respondent establishes by a preponderance of the evidence, 

through affidavits or documentary evidence, or as a matter of 

law by reference to applicable legal authority, or the presiding 

disciplinary judge finds on the face of the record from which 

the discipline is predicated, it clearly appears that:

A. the procedure was so lacking in notice or opportunity to be 

heard as to constitute a deprivation of due process; or

B. there was such infirmity of proof establishing the 

misconduct as to give rise to the clear conviction that the 

presiding disciplinary judge could not, consistent with its 

duty, accept as final the other jurisdiction’s conclusion on that 

subject; or

C. the imposition of the same discipline would result in grave 

injustice; or

D. the misconduct established warrants substantially 

different discipline in this state.

Ariz. R. Sup. Ct. 57(b)(3). Thus, when a United States District Court avails 

itself of the federal attorney disciplinary process, see D. Ariz. LRCiv 83.2, 

we will recognize and impose its decision so long as the attorney has the 

opportunity to explain why he or she should not be bound by the federal 

court’s disciplinary order.

6 But the judgment here was not an exercise of 

disciplinary authority by the district court; this is an order for sanctions in 

a civil case.

preclusion in certain cases. Issue preclusion is a well-studied doctrine with 

its own body of caselaw, which has no bearing on our rules.

6 Federal and state courts have independent disciplinary authority. See 

Chambers v. NASCO, Inc., 501 U.S. 32, 43 (1991) (“[A] federal court has the 

power to control admission to its bar and to discipline attorneys who 

appear before it.”); In re Smith, 189 Ariz. 144, 146 (1997) (explaining that this 

Court determines who can practice law in Arizona and under what 

conditions).
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¶15 Under the interpretive canon expressio unius est exclusio 

alterius, “the expression of one item implies the exclusion of others.” City 

of Surprise v. Ariz. Corp. Comm’n, 246 Ariz. 206, 211 ¶ 13 (2019). Our rules 

provide only two instances in which a prior judgment would effectively 

prevent an attorney from relitigating the underlying facts in a disciplinary 

hearing. Therefore, under our rules, the doctrine of issue preclusion is not 

applicable to attorney disciplinary hearings in Arizona; rather, our rules 

define when a prior judgment has preclusive effect.

¶16 Our caselaw’s requirement for independent fact finding in 

attorney disciplinary proceedings supports this conclusion. In re Levine, 

174 Ariz. 146, 150 (1993) (“In reviewing disciplinary proceedings[,] . . . [this 

Court is] an independent trier of both fact and law . . . .”); In re Wolfram, 

174 Ariz. 49, 52 (1993) (“In disciplinary proceedings, this [C]ourt acts as an 

independent trier of fact and law in the exercise of our supervisory 

responsibility over the State Bar.”). Giving a prior judgment preclusive 

effect, other than as provided by our rules, abrogates this Court’s authority

and duty to act as an independent trier of fact.

¶17 Moreover, if the Bar relied on a state court sanctions order to 

discipline Hancock, such an order would not have preclusive effect under 

our rules because it is neither a criminal conviction nor discipline from 

another jurisdiction. It is incongruous to apply offensive issue preclusion 

to a federal court order where we would not apply it to an identical state 

court order, especially in a matter where state law applies.

¶18 The Bar nonetheless contends that rejecting issue preclusion 

here breaks from Arizona courts’ treatment of issue preclusion in 

disciplinary proceedings of other regulated professions, positing that 

today’s holding “exempt[s] lawyers from a rule that applies to everyone 

else.” The Bar warns that this will “create a public perception that lawyers 

form a clubby group of elitists who rig laws in our self-interest, knowing 

we can count on friendly courts for shelter.”

¶19 But any differential treatment of lawyers, if it exists, comes 

from our constitutional authority under article 6, section 3 of the Arizona 

Constitution. We have administrative supervision over the courts, id., and 

lawyers are officers of the court, Scheehle, 211 Ariz. at 290 ¶ 31. Under this 

authority, we have crafted rules governing the attorney disciplinary

process—rules that, of course, are inapplicable to other professions. The 

rules governing disciplinary matters are the result of a carefully crafted 
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Opinion of the Court

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rulemaking process. This process benefits greatly from public input and 

can readily be modified when appropriate.

¶20 Furthermore, nothing in our decision today precludes the Bar 

from pursuing its prosecution and using the sanctions proceeding in the 

district court as evidence. The inapplicability of the issue preclusion 

doctrine in attorney disciplinary matters does not render collateral 

proceedings irrelevant to the resolution of disciplinary proceedings. A PDJ 

is not bound by the rules of evidence and “may conduct the hearing in any 

manner that will achieve substantial justice.” Ariz. R. Sup. Ct. 61(c)(2)(B). 

Although the Bar cannot prevent an attorney from relitigating issues 

determined in a sanctions order, a PDJ is permitted to admit transcripts and 

other evidence of collateral proceedings and credit the persuasiveness of 

such evidence, so long as the PDJ affords an attorney the opportunity to 

contest such evidence and introduce additional evidence as appropriate.7

¶21 Moreover, we reject the Bar’s assertion that our holding

exempts lawyers from a rule that applies to everyone else. The Bar cites 

two cases involving the use of issue preclusion in disciplinary proceedings 

for other regulated professions to support this argument: In re Marquardt, 

161 Ariz. 206 (1989), and Wetzel v. Ariz. State Real Est. Dep’t, 151 Ariz. 330 

(App. 1986). Both cases are inapposite.

¶22 In Marquardt, an Arizona superior court judge was convicted 

in a Texas state court of possessing marijuana. 161 Ariz. at 207. In a 

subsequent judicial misconduct case, this Court ruled that the judge was 

bound by the criminal conviction and was precluded from arguing that he 

did not intend or know that he was in possession of the drug. Id. at 213. 

Judicial disciplinary proceedings are different from attorney disciplinary

proceedings and are subject to different rules. See Ariz. Const. art. 6.1, 

§§ 1–3 (establishing a judicial conduct commission and prescribing 

parameters for suspension or disqualification of state judges); Ariz. 

Comm’n on Jud. Conduct R. 20–34. Nevertheless, if attorney disciplinary

rules governed, this Court would still have given the criminal conviction 

preclusive effect because Rule 54(g) allows for the use of a criminal 

7 As to the admissibility of the collateral court order finding improper 

attorney conduct and conclusive reliance thereon, because a PDJ is not 

bound by the order, we struggle to imagine a scenario in which admitting 

the order achieves substantial justice when the evidence from the 

proceeding is available.
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conviction as a basis for attorney discipline. See Ariz. R. Sup. Ct. 54(g). 

Thus, Marquardt’s criminal conviction would have had the same preclusive 

effect under our rules if he was facing attorney discipline rather than 

judicial misconduct charges.

¶23 Wetzel involved a real estate broker who was also a recently 

disbarred lawyer. 151 Ariz. at 332. The Arizona State Department of Real 

Estate (the “Department”) revoked the broker’s real estate license based 

solely on this Court’s disbarment orders. Id. After exhausting his 

administrative remedies, the broker challenged the Department’s use of 

offensive non-mutual issue preclusion in court. Id. The court of appeals 

affirmed. Id. at 333–34.

8

¶24 The hearing officer gave the disbarment orders preclusive 

effect pursuant to Department rules. Id. at 332. This is markedly different 

from the PDJ here who felt obliged to apply issue preclusion under federal 

law. Other administrative agencies are free to adopt procedural rules or 

apply judicial doctrines in their discretion; here the issue is the PDJ’s 

application of our rules for attorney disciplinary proceedings.

¶25 Unlike Marquardt and the case at hand, Wetzel involved an 

administrative proceeding in a profession over which we have no 

regulatory authority. Here, we are vested with authority over attorney 

disciplinary proceedings. Ariz. Const. art. 6, § 3; Scheehle, 211 Ariz. at 290 

¶ 31. And our rules speak on the matter. We hold that under our rules, 

issue preclusion is not applicable in attorney disciplinary proceedings; only 

criminal convictions and disciplinary orders from other jurisdictions may 

be given preclusive effect.

8 Although Wetzel approved the use of offensive, non-mutual issue 

preclusion, the court noted that in Arizona, non-mutual issue preclusion 

“has been limited to the defensive use of the doctrine.” Id. (citing Standage 

Ventures, Inc. v. State, 114 Ariz. 480 (1977)). Indeed, in Standage Ventures, 

this Court expressly prohibited offensive use of issue preclusion. 114 Ariz. 

at 484. Other courts have noted that the law is unclear in Arizona. Am. 

Fam. Mut. Ins. Co. v. Clancy, 512 F. App’x 674, 676 (9th Cir. 2013) (noting 

disagreement between Standage and Wetzel). Because our rules, rather than 

the issue preclusion doctrine, govern here, this case does not require us to 

clarify this point.
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Opinion of the Court

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III. CONCLUSION

¶26 We accept jurisdiction and grant relief, vacating the PDJ’s

order and remanding for further proceedings.