* Circuit Judge for the Eighth Circuit, sitting by designation.

1 “CNA” is an acronym for a group of insurance companies, one

of which is American Casualty Company--the “A” in “CNA.”

Continuing the practice of the parties and the district court, we

will refer to American Casualty Company as CNA in this opinion.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 96-30851

_____________________

LARRY D. CROWE, ET AL.,

Plaintiffs,

versus

JAMES W. SMITH, ET AL.,

Defendants,

MICHAEL P. TONE; ANNE FIEDLER;

ROBERT B. BIECK, JR.; JAMES W.

BERRY; WILLIAM E. WRIGHT;

JUDY L. BURNTHORN; W. GLENN

BURNS; AMERICAN CASUALTY COMPANY

OF READING, PENNSYLVANIA,

Appellants.

_________________________________________________________________

Appeals from the United States District Court for the

Western District of Louisiana

_________________________________________________________________ August 12, 1998

Before JOHN R. GIBSON, * JOLLY, and EMILIO M. GARZA, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

American Casualty Company of Reading, Pennsylvania (“CNA” 1 ),

Michael P. Tone, Anne Fiedler, W. Glenn Burns, Robert B. Bieck,

Jr., William E. Wright, Judy L. Burnthorn, and James W. Berry(collectively, the “sanctions defendants”) appeal the imposition of

sanctions against them by Judge Nauman S. Scott of the Federal

District Court for the Western District of Louisiana.

All of the defendants are attorneys except for CNA. After the

settlement of an underlying civil action in which these attorneys

were involved as either defense counsel or insurer’s counsel, the

district court was advised by the pl aintiffs that an applicable

insurance policy issued by CNA (the “D&O Policy”) had not been

disclosed to them, although its existence had long been known to

the sanctions defendants. The district court appointed the

attorney for the plaintiffs in the underlying case to investigate

a nd present evidence to the court of the offense. After the

conclusion of a civil bench trial, the district court entered an

extensive opinion, which included numerous findings of fact and

conclusions of law. Briefly stated, the district court held that

the sanct ions defendants willfully conspired to defraud the

plaintiffs by concealing the D&O Policy despite having discoveryrelated, ethical, and other duties to disclose it. Acting under

its inherent power, the court then imposed sanctions consisting of

fines, reprimands, and suspensions from the practice of law. In

particula r, it imposed fines of $5 million on CNA and $75,000 on

Tone. All fines were made payable to the district court.

We hold that the district court a bused its discretion by

imposing serious criminal sanctions on CNA and Tone via a

manifestly civil process. The sanctions against those defendants

are therefore reversed. Furthermore, and although we find the

procedure to have been adequate as to the suspended and reprimanded2 Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.

§ 1961 et seq. (“RICO”).

3 defendants, we also hold that the district court abused its

discretion as to all of the sanctions defendants, save the

defendant Berry, in finding that they engaged in bad faith conduct

by failing to disclose the D&O Policy . Because a finding of bad

faith is a prerequisite to the exercise of a court’s inherent

power, we therefore reverse the district court’s judgment as to

defendants Burns, Bieck, Wright, Fiedler, and Burnthorn as well.

In addition, as to defendants CNA, Tone, Fiedler, and Burnthorn, we

also hold that the record is completely insufficient to support a

finding of bad faith conduct. As to those defendants, the

sanctions proceeding is dismissed. With respect to defendants

Burns, Bieck, and Wright, we find the record potentially sufficient

to support a finding of bad faith conduct, and remand the case to

the district court for further consideration in the light of our

opinion. We affirm the sanctions imposed against Berry.

I

The sanctions proceeding in this case concerned the actions of

several attorneys during a period of time leading up to the

signature of a settlement agreement in a civil RICO 2 suit. To

understand the significance of those actions, it is necessary

briefly to review the circumstances of that case.

In December 1992, as the latest installment of a long and

tangled saga of partnership litigation, Larry D. Crowe and the4

Succession of Reba Coody Crowe (the “Crowes”) brought suit against

James W. “Sonny” Smith in the Federal District Court for the

Western Distri ct of Louisiana. The Crowes alleged, among other

things, that Smith, who was a former business partner of Larry

Crowe, conspired with Peo ples Homestead Savings and Loan

Association of Monroe, Louisiana, (“Peoples”) to defraud the Crowes

of their interest in certain commercial agricultural property in

violation of RICO. Also made defendants in this suit were Russell

Hart, the former president of Peoples, and seve ral of Peoples’s

former directors and outside attorneys. Eventually, the case was

set for trial on July 12, 1994, in Monroe, Louisiana.

Most of the sanctions defendants served as defense counsel in

the 1992-94 litigation. Berry represented four former directors of

Peoples. Bieck, Wright, Burnthorn, and Burns represented various

of the outside attorneys. The remaining individual sanctions

defendants, Tone and Fiedler, represented CNA as coverage counsel

and were not directly involved in the case. The following

chronology traces the activities of these attorneys in the months

l eading up to the trial. It is based on the factual findings of

the district court, which in all relevant respects are undisputed.

Late into the litigation--in March 1994--as part of his

research for the upcomin g trial, Bieck made a fateful discovery

among the files of one of the attorney defendants. He learned that

in 1983, CNA had issued a directors’ and officers’ errors and

omissions policy--the D&O Policy--to Peoples. This policy was a3 This suit was an earlier chapter in the same epos of

litigation to which the 1992 suit belonged. A successor to the

1986 suit eventually settled, resulting in a complex transfer of

funds, property rights, and liabilities between Peoples and Larry

Crowe.

4 At about this time, CNA opened a f ile for the Crowe

litigation.

5 Dollar wa s included in this request because he had

subsequently served on Peoples’s board of directors.

5 “claims made” policy, and carried a general liability limit of $5

million. It expired in 1986, but not before Larry Crowe had

brought suit against Peoples under a conversion theory in February

of that year. 3 Shortly thereafter, the directors of Peoples began

corresponding with CNA regarding Crowe’s claims. 4 It was this

correspondence that Bieck discovered in March 1994. He conveyed

his findings almost immediately to Burnthorn.

Three weeks later, the Crowes issued certain discovery

requests to counsel for each of the director defendants and one of

the attorney defendants, Johnny Dollar

. 5 Dollar was represented,

significantly, by Wright and Burnthorn. The discovery requests in

quest ion were for the production of certain described documents.

Two are relevant to this case:

5. All claims or notices of claim that were

transmitted to any of your insurance carriers in

relation to any of the claims of Larry Crowe and/or

the Succession of Reba Crowe.

8. All indemnity agreements related to service as bank

officer, director, attorney, or representative.6

It is important to note that these discovery requests were very

significant ones in the Western District in 1994. Although Fed. R.

Civ. P. 26(a)(1)(D) generally provides for the automatic disclosure

of relevant insurance policies, the Western District had opted out

of that provision in its local rules. See ULLR 6.06W (1994). At

the time, the onl y way for a party to find out about insurance

policies in the Western District was by way of a properly

propounded discovery request.

On April 27, Berry responded to the discovery requests on

behalf of three of his four director clients. He answered Requests

5 and 8 with the words “none” or “none known.” On that same day,

Burnthorn faxed Berry a copy of the CNA correspondenc e first

discovered by Bieck. At this point, Burnthorn also began preparing

a letter to CNA requesting defense and indemnification for her

client, Dollar, under the D&O Policy. On April 28, she faxed Berry

a copy of this letter as well, so that he could use it as a model

for letters written on behalf of his clients. On April 29, one of

Berry’s director clients sent such a letter to CNA. Letters from

two of the other directors followed soon thereafter.

On May 1, Burnthorn responded to the di scovery requests on

behalf of Dollar. Her response to Request 5 read as follows:

Response to request #5 : New England Insurance Company

and the Home Insuranc e Company have been notified of

plaintiff’s l awsuit. Dollar objects to the request on

grounds of attorney-client privilege and work product

immunity.6 New England Insurance Company and Home Insurance Company, the

two insurers referenced in Burnthorn’s above-quoted discovery

7 On May 5, Berry responded to the discovery requests on behalf

of his fourth and final director client. His answers to Requests

5 and 8 for this client were identical to the ones he had sent the

week before on behalf of the other directors--in the negative.

On May 12, Fiedler wrote to Burnthorn advising that CNA was

proceeding under a reservation of rights with respect to the D&O

Policy, and requesting certain additional information. On June 7,

Burnthorn provided this information.

As the trial drew nearer, settlement negotiations intensified.

On June 23, Berry made a written offer to settle on behalf of the

directors for $10,000. He emphasized in this letter that his

clients were not insured, and did not have access to substantial

funds for settlement purposes. The Crowes counter-offered for

$25,000.

On June 30, CNA made a formal response to the notice of

lawsuit letters sent by Berry’s and Burnthorn’s clients. CNA

advised that the D&O Policy was a $5 million indemnity policy that

might not provide coverage for several reasons, and that CNA would

b e proceeding under a reservation of rights to deny coverage. A

specimen policy was attached to the responses.

During the week of July 4, Wright, Bieck, and Burns attempted

to negotiate a settlement on behalf of their clients and two other

insurers. 6 Their offer was rejected, whereupon they discussedresponse.

8

among themselves the possibility of coverage under the D&O Policy

and the feasibility of bringi ng CNA and Berry’s director clients

into a global settlement. On July 7, Wright informed Bieck that he

would be speaking with CNA representatives the next day about the

possibility of CNA contributing to a global settlement. On July 8,

the telephone conference took place as scheduled, with Berry,

Wright, Tone, and Fiedler in attendance. During the conversation,

Tone stated that he had not yet received authority to commit any

m oney to a settlement fund, and that no one should ra ise the

possibility of a CNA cont ribution with the Crowes. Wright

subsequently relayed the substance of this conversation to Bieck.

On July 11, the day bef ore the trial began, Tone wrote to

Wright and Berry informing them that CNA was willing to contribute

to a settleme nt package. On this same day, and obviously before

receiving the letter, Wright, Bieck, and Burns met to discuss the

possibility of making a global se ttlement offer, which would

include CNA, prior to the commencemen t of the trial. In this

conversation, Wright reminded Burns and Bieck that CNA had

requested that its possible inclusion in a global settlement not be

disclosed. Later that afternoon, Wright, Bieck, and Burns, along

with Smith’s attorney, met with the Crowes’ counsel to discuss

settlement. The Crowes made an offer of $6.2 million. Burns9

replied that this figure was far beyond any theory of insurance

coverage. No one at the meeting objected to this statement.

The trial began as scheduled on July 12. Shortly thereafter,

Berry spoke to Tone regarding the payment of his fees by CNA. On

July 13, Tone sent a letter to Berry advising him that CNA would

pay $25,000 for the legal fees of his clients. Later that same

day, Berry contin ued to pursue his $10,000 settlement offer with

the Crowes’ counsel. During these discussions, one of the Crowes’

lawyers remarked that he was surprised that the directors had no

insurance. Berry replied that there was an old policy, but that it

had lapsed and his clients were not covered by it.

At this point, Burns b ecame the chief settlement negotiator

for all of the defendants. On July 21, Burns received word from

Berry that CNA had given Tone authority to make a $100,000

contribution to the settlement. Berry also relayed that Tone had

reiterated his request that the source of the $100,000 remain

anonymous.

At a meeting on July 26, Wright reminded Bieck and Burns of

CNA’s request for anonymity. The three discussed the matter, and

agreed that CNA’s participation ought to be revealed. They also

decided that discovery responses should be checked to see if anyone

had breached a duty to disclose the D&O Policy. Bieck raised

particular concern about Berry’s discovery responses. The meeting

was then adjourned to check those responses. Wright consulted with

Burnthorn about the respo nses they had given, and concluded that7 Again, Peoples’s former president, and one of the principal

defendants in the underlying suit.

10 they were adequate. Bieck, Wright, and Burns each attempted to

check Berry’s responses, but apparently none of them had brought

those documents along. No one followed up on this with Berry.

On July 27, Tone and Fiedler arrived in Monroe to monitor the

settlement progress directly. On this day, they were able to have

a number of discussions with various of the defense counsel during

breaks in the ongoing trial. First, Berry asked Tone to increase

the amount of CNA’s contribution. Tone had authority to do this,

and accordingly upped CNA’s offer to $150,000. Tone then raised

the subject of disclosure and was informed by Hart’s 7 attorney that

the settlement would fall apart if CNA were revealed. After these

exchanges, Burns informed the Crowes’ counsel that the attorney and

director defendants would meet the Crowes’ prior settlement offer

of $2.25 million. Back in the defense camp, the subject of

disclosure arose one last time. Wright told Tone that he thought

CNA’s contribution should be revealed. Tone apparently concurred.

Tone and Fiedler then departed Monroe.

The Crowes accepted the $2.25 million offer, and the substance

of the agreement was recited to the court that same day by Burns.

The court recessed the trial so that a final written agreement

could be prepared and signed. Bieck subsequently drafted that

agreement. In it, the name “American Casualty Company” appeared

once, along with several other insurers, in a long section titled8 As we shall see, Hart subsequently settled with the Crowes.

Smith pressed on with his appeal, however, and on February 26,

1996, this court reversed the verdict and rendered in his favor.

Crowe v. Smith

, No. 94-41205, 81 F.3d 155 (5th. Cir. 1996)

(unpublished).

11 “Settling Defendants.” The agreement was signed on July 28. On

that same day, Berry sent a letter to Tone informing him that the

language in th e final agreement did not specifically say “CNA.”

CNA subsequently made its promised payment anonymously through

Wright and Burnthorn.

With respect to Hart and Smith, the trial continued. At its

conclusion, the jury returned a verdict in favor of the Crowes for

$8.5 million. This figure was subsequently trebled in accordance

with the statute. Both Hart and Smith appealed that judgment to

this court. 8

During the pendency of that appeal, Joseph R. Ward, Jr., the

Crowes’ principal attorney throughout the 1992-94 litigation,

conducted a judgment debtor examination o f Hart. As a result of

that examination, Ward discovered the D&O Policy.

II

On November 15, 1994, the district court rece ived a letter

from Ward addressed to eleven of the defense counsel. It stated

that he had recently become a ware of the D&O Policy, and that he

believed there may have been a number of instances where the

defense attorneys violated their discovery obligations by not12

revealing the policy to him. He gave notice that he was preparing

a motion to set aside the settlement and sanction the directors.

After receiving the l etter, the court had several ex parte

contacts with Ward in an attempt to determine what action should be

taken on the matter of the sanctions. As the court has since

repeatedly emphasized, it was in a quandary because neither it nor

Ward knew any facts that might subst antiate or refute the

allegations of misconduct. Ward subsequently brought his motion,

however, and the court then decided that it would conduct an

informal meeting with all of the defense attorneys to discuss the

situation. At that meeting, it was decided that a full-fledged

t rial would be held to resolve the question. This trial was

originally scheduled for September 6. Based on its conversations

with Ward, however, the court had already become convinced at the

time of the informal meeting that the directors would likely enter

into a renewed settlement with the Crowes, and that sanctions might

well be waived therein. Concerned for its own judicial integrity,

the court began to consider brin ging an alternate sanctions

proceeding itself, on its own motion. To investigate and, if need

be, prosecute that action, the court appointed Ward as attorney for

the United States in the matter. The court made this choice based

on Ward’s existing familiarity with the case and a lack of viable

alternatives. Ward accepted the appointment, and informed the U.S.

Attorney for the Western District of Louisiana of his new status.9 For an additional $4 million. In addition to the Crowes’

claims against the clients of t he attorney sanctions defendants,

this settlement also terminated the Crowes’ claims against Hart, as he was also covered by the D&O Policy.

1 0 As opposed to its power under Fed. R. Civ. P. 11, w hich is

not implicated here.

13 Shortly thereafter, the U.S. Attorney’s civil and cri minal

section chiefs paid a visit to the court to discuss the case. The

c ivil chief declined to pursue the matter himself, as he did not

consider the sanctions to be civil in nature. The criminal chief

indicated tha t he would be willing to pursue the matter as a

criminal case, if the court declared it to be such. The court

declined his offer on the grounds th at it “did not consider the

defendants criminals,” and continued its employment of Ward. After

reflecting on the meeting, however, the court d id change Ward’s

title, designating hi m attorney for “the court” instead of “the

United States.”

On June 10, CNA and its counsel procured a new settlement with

the Crowes, 9 who then, as the district court feared, stopped

prosecution of their sanctions motion. The court then entered its

own motion for sanctions pursuant to its inherent power. 1 0 Ward

dutifully investigated the facts of the settlement negotiations and

presented them to the court during a rescheduled bench trial.

Ba sed on its conversations with the U.S. Attorney’s office, and

because it was concerned with the possibility that Ward would be

erroneously viewed as a “prosecutor,” the court expressly limited1 1 One might wonder what the district court intended to do with

this money. It seems that the general plan was to create a fund

14 him, at all times, to a role of g athering and presenting the

evidence. In particular, the court “kept its own counsel” as to

relevant legal theories, the designation of defendants, and the

overall appropriateness of sanctions, with the sole exception that

the defendants were allowed to present briefs on the legal issues.

The court did, however, engage in a few additional ex parte

contacts with Ward during the investigation period, in an effort to

resolve procedural questions relating to his representation and to

ensure that the subjects that the court found most relevant were

adequately investigated in discovery. It was also the case that

Ward testified at the trial in addition to serving as the court’s

attorney. The defendants, for their part, were at all times

represented by counsel, and were able to hear and respond to all

the evidence accumulated against them. After extensive discovery

and some five days of trial, on July 25, 1996, the court found the

conduct of the defendants sanctionable. The court raised multiple

theories of liability, but the essential basis for its judgment was

the finding that all of the sanctions defendants had willfully

conspired to defraud the Crowes by concealing the D&O Policy from

them despite having discovery-related, ethical, and other duties to

reveal it. Based on this finding, the court ordered the following

sanctions: (1) for CNA to pay $5 million to the court; (2) for Tone

to pay $75,000 to the court; 11 (3) for Berry to be suspended fromfrom which the court could pay appointed counsel to prosecute this

and other sanctions actions throughout the Western District.

15 practice before the Western District of Louisiana for a period of

nine months; (4) for Wright, Burns, and Bieck to be suspended from

practice before the Western District of Louisiana for a period of

three months; and (5) for Fiedler and Burnthorn to be reprimanded.

The sanctions defendants appeal this judgment on multiple grounds.

III

We review a district court’s imposition of sanctions under its

inherent power for abuse of discretion. Dawson v. United States

,

68 F.3d 886, 895 (5th. Cir. 1997); Chambers v. NASCO, Inc. , 501

U.S. 32, 55 (1991). Nonetheless, “the threshold for the use of

inherent power sanctions is high.” E lliot v. Tilton

, 64 F.3d 213,

217 (5th Cir. 1995). The inherent power “is not a broad reservoir

of power, ready at an imperial hand, but a limited source; an

implied power squeezed from the need to make the court function.”

Cha mbers , 501 U.S. at 42 (quoting N ASCO, Inc. v. Calcasieu

Television and Radio, Inc.

, 894 F.2d 696, 702 (5th Cir. 1990)).

Perhaps for this reason, we have repeatedly emphasized that, where

the inherent power is involved, “‘our review is not perfunctory.’”

Dawson , 68 F.3d at 896 (quoting Shepherd v. American Broadcasting

Companies , 62 F.3d 1469, 1475 (D.C. Cir. 1995)). “As the Supreme

Court has explained, ‘[b]ecause inherent powers are shielded from

direct democratic controls, they must be exercised with restraint16

and discretion.’” S hep herd , 62 F.3d at 1475 (quoting R oadway

Express, Inc. v. Piper , 447 U.S. 752, 764 (1980)).

IV

The sanctions defendants argue that the district court abused

its discretion in two main respects in th is case. First, they

assert that the court deprived them of their right to due process

by imposing c riminal sanctions on them via a manifestly civil

process. Second, they argue that the court clearly erred in making

its required finding of bad faith conduct. We address each

contention in turn.

A

The sanctions defendants first argue that the district court

deprived them of their right to due process by imposing criminal

sanctions in a civil proceeding. In particular, they contend that

their due process rights were infringed because the district court

appointed Ward to “prosecute” their sanctions. They insist that,

because Ward’ s other clients, the Crowes, were the purported

victims of the fraud, and maintained private rights of action for

any wrongdoing, he was not a disinterested prosecutor, as required

for the prosecution of criminal sanctions. In this regard, they

also note that Ward had a personal interest in finding their

conduct sanctionable, in the sense that, if the conduct of his

former opponents had been found to be unobjectionable, he would

have faced potentia l malpractice liability for his own failure

earlier to locate the D&O Policy. In addition to these problems17

associated with Ward serving as “prosecutor ,” the sanctions

defendants also assert separate due process violations based on the

fact that Ward both testified and served as attorney, and the fact

that he had ex parte contacts wit h the court. After lengthy

consideration, we find substantial merit in these due process

arguments as appl ied to defendants CNA and Tone, but not as to

defendants Burns, Bieck, Wright, Fiedler, Burnthorn, and Berry.

1

As the sanctions defendants correctly point out, and as the

Supreme Court has often explained, the initial touchstone for

determining the due process rights of a sanctions defendant lies in

the characterization of the particular contempt as either “civil”

or “criminal”:

Because civil contempt sanctions are viewed as nonpunitive and avoidable, fewer procedural protections

for such s anctions have been required. To the extent

that such contempts take on a punitive character,

however, and ar e not justified by other considerations

central to the contempt power, criminal procedural

protections may be in order.

International Union, United Mine Workers of America v. Bagwell

, 512

U.S. 821, 831 (1994); see also Hicks v. Feiock , 485 U.S. 624, 632

(1988) (in a contempt action, as in any other, “criminal penalties

may not be imposed on someon e who has not been afforded the

protection s that the Constitution requires of such criminal

proceedings”).18

As the Supreme Court has also made clear, “conclusions about

the civil or criminal nature of a contempt sanction are properly

drawn

. . . ‘from an examination of the character of the relief

itself.’” B agwell

, 512 U.S. at 828 (quoting Hicks

, 485 U.S. at

635). In this case, we are presented with two principal types of

“relief”: fines payable to the court for CNA and Tone, and

suspensions from practice or official reprimands for Burns, Bieck,

Wright, Fiedler, Burnthorn, and Berry. We consider each class of

relief in turn.19 2

We begin with the fines imposed on CNA and Tone. With regard

to these sanctions, we have little difficulty in finding that they

were criminal in character. As the Supreme Court has expressly

stated:

A contempt fine

. . . is civil and remedial if it “either

coerce[s] the defendant into compliance with the court’s

order, [or]

. . . compensate[s] the complainant for

losses sustained.” Where the fine is not compensatory,

it is civil only if the contemnor is afford ed an

opportunity to purge. Thus, a “flat, unconditional fine”

totaling even as little as $50 announced after a finding

of contempt is criminal if the contemnor has no

subsequent opportunity to reduce or avoid the fine

through compliance.

Bagwell

, 512 U.S. at 829 (quoting United States v. Mine Workers

,

330 U.S. 258, 303-04 (1947), and Penfield Co. of Cal. v. SEC , 330

U.S. 585, 590 (1947), respectively); cf. In re Terrebonne Fuel and

Lube, Inc. , 108 F.3d 609, 612 (5th Cir. 1997) (“If the purpose of

the order is to punish the party whose conduct is in question or to

vindicate the authority of the court, the order is viewed as

criminal. If, on the other hand, the purpose of the contempt order

is to coerce compliance with a court order or to compensate another

party for the contemnor’s violation, the order is considered to be

civil.”). Because the fines in this case were payable to the

court, they were not compensatory. Because they were also flat

fines that did not afford an opportunity to purge, they were

criminal in character. To the extent that the district court

concluded to the contrary, it was clearly in error.20

Having determined that the fines were criminal in character,

the question becomes whether the procedures applied by the district

court were adequate for criminal contempt. In Y oung v. United

States ex rel. Vuitton et Fils S.A.

, 481 U.S. 787, 804 (1987), the

Supreme Court held that “[a] private attorney a ppointed to

prosecute a criminal contempt . . . should be as disinterested as

a public prosecutor who undertakes such a prosecution.” In this

case, Ward’s concurrent representation of the Crowes, who retained

substantial possibilities for private recovery against the

defendants, coupled with his own potential malpractice liabil ity

for the events at issue, combine to belie any contention that he

was “as disinterested as a public prosecutor.” There can therefore

be no doubt that, at least to the e xtent that Ward was in fact

allowed to serve as “prosecutor,” the district court failed to

follow the command of Young . Furthermore, the argument that Ward

was not actually acting as a prosecutor--in the sense that he only

investigated and presented the evidence, leaving to the judge and

defendants the entirety of the legal argument--is of no moment in

this context. As we have expressly held in the past, where

criminal cont empt is involved, there must actually b e an

independent prosecutor of some kind, because the district court is

not constitutionally com petent to fulfill that role on its own.

See FDIC v. LeGra nd , 43 F.3d 163, 169 & n.6 (5th Cir. 1995); s ee

also Fed. R. Crim. P. 42(b); cf. Young

, 481 U.S. at 798-99 (noting

other general requirement s of criminal procedure in the contempt21

context, including a presumption of innocence, the beyond-areasonable-doubt burden of proof, the right again st selfincrimination, the right to notice, the right to be heard, the

rig ht to counsel, the right to call witnesses, the right to an

unbiased judge, and the right to a jury trial where the contempt is

serious). Thus, in whatever way the situation is characterized,

the district court would appear to have violated CNA and Tone’s

right to due process by denying them an independent and impartial

prosecutor for the manifestly criminal sanctions that it imposed.

One response to this reasoning might be that the Supreme Court

in Bagwell stopped short of saying that the full range of

traditional criminal procedural protections is mandated in every

criminal contempt proceeding. As noted above, the rule of that case

was simply that “crimin al procedures m ay be in order,” if the

imposition of contempt is not “justified by other considerations

central to the contempt power.” B agwell

, 512 U.S. at 831 (emphasis

added). Thus, it might perhaps be argued that the lack of an

independent and impartial prosecutor was somehow justified in this

case by such “other considerations.”

Upon closer inspection, however, this response lacks merit.

The Bagwell Court identified only two classes of criminal contempt

in which the “other considerations” might indicate a lesser degree

of procedural protection. The first is the case of the “direct

contempt” committed “in the presence of the court,” and the

rationale is the quite sensible one that “[t]he ne cessity1 2 See also Bagwell

, 512 U.S. at 833, with regard to the proper

procedure for such ongoing discovery violations.

1 3 We need not decid e today what the precise limit is for a

“petty” fine, because $75,000 is manifestly non-petty in the case

of an individual, just as $5 million is non-petty in the case of a corporation. We note, however, that the B agwell Court strongly

suggested, without deciding, that $5000 was an approp riate limit

for individuals, and $10,000 for corpor ations. S ee Bagwell

, 512

U.S. at 837 n.5.

22 justification for the contemp t authority is at its pinnacle . . .

where contumacious conduct threatens a court’s immediate ability to

conduct its proceedings.” B agwell

, 512 U.S. a t 832. The second

exce ption is for “petty” fines, which the district court has been

traditionally allowed to impose in a summary manner. S ee id. at 837

n.5 & 838 -39. Although our own recent decision in C arroll v. The

Jaques Admiralty Law Firm, P.C.

, 110 F.3d 290, 293 (5th Cir. 1997)

(Jones, J.), w ould appear to indicate either that a $7000 fine is

“petty,” or that “direct contempt” includes the disruption of

ongoing, out-of-court discovery, 1 2 nothing in that case or Bag well

can be read as saying that there is any “other consideration” that

might justify curtailed criminal procedures for the imposition of

$5 million and $75,000 13 fines to punish a months- old discovery

violation in a long-settled case. Indeed, the B agwell Cou rt was

quite clear that for “indirect [criminal] contempts” involving, for

example, “out- of-court disobedience to complex injunctions,”

criminal protections are clearly “necessary and appropriate to

protect the due process rights of parties and prevent the arbitrary

exercise of judicial power.” I d. at 833-34; c f. Green v. United1 4 And, of course, potentially in a number of other respects as

well, as the majority o f the other standard criminal protections

noted by the Court in Y oung

, 481 U.S. at 798-99, were ignored in

this case as well.

1 5 We note in passing that our judgment on this p oint accords

in both reasoning and result with the Eleventh Circuit’s decision

in In re E.I. Dupont de Nemours & Co.-Benlate Litigation , 99 F.3d

363 (11th Cir. 1996) (finding the imposition of a $6.8 million

determinative fine without benefit of criminal procedural

protections to violate due process under Bagwell and Hicks ).

23 Stat es , 356 U.S. 165, 217 n.33 (1958) (Black, J., dissenting)

(“Alleged contempts committed beyond the court’s presence where the

judge has no personal knowledge of the material facts are especially

suit ed for trial by jury. A hearing must be held, witnesses must

be called, and evidence taken in any event. And often . . . crucial

facts are in close dispute.”). For this reason, we see no

justification here for a departure from the mandate of Y oung

, and

therefore conclude that the district court committed a clear

violation of CNA and Tone’s right to due process in this case when

it imposed determin ative criminal fines on them without affording

the benefit of an independent and impartial prosecutor. 14 These

sanctions must therefore be reversed and vacated. 15

3

We turn next to the suspen sions and reprimands meted out to

sanctions defendants Burns, Bieck, Wright, Fiedler, Burnthorn, and

Berry. Although these sanctions present a very close question, we

are ultimately persuaded by our clear precedents that they are not24

so criminal in character as t o render the district court’s chosen

procedures faulty.

We must concede, however, an initi al impression that B agwell

appears to mandate the opposite result. In addition to the abovediscussed analysis of criminal versus c i vil character in the fine

context, the Court noted i n that case that, as a general matter,

sanctions that serve to “vindicate the authority of the court” are

criminal in character. B agwell

, 512 U .S. at 828; s ee also

Terrebonne

, 108 F.3d at 612 (“If the purpose of the order is to

punish the party wh ose conduct is in question or to vindicate the

authority of the cour t

, the order is viewed as criminal.”).

Suspensions and repriman d s surely serve to accomplish the goal of

vindication, so to that extent they would appear to be criminal in

character.

In this case, however, our investigation cannot be limited to

so simplistic an analysis. Unlike some of the other likely

candidates for use as contempt sanctions, those that a d dress

attorney discipline have been squa r ely placed in a decidedly

different and grayer area by both the Supreme Court and our own past

decisions. S ee, e.g.

, Cammer v. United Stat es , 350 U.S. 399, 408

n.7 (1956) (“‘The power to disbar an attorney proceeds upon very

different grounds’ from those which support a co u rt’s power to

punish for contempt.”) ( q uoting Ex Parte Robinson

, 86 U.S. (19

Wall.) 505, 512 (1873)); Ex Parte Wall , 107 U.S. 265, 288 (1883)

(stating that a disbarment proceeding requires no formal indictment,1 6 In this case , there is obviously no contention that the

district court failed to provide either adequate notice of the

sanctions or an opportunity to be heard.

25 beca use it “is not for the purpose of punishment, but for the

purpose of preserving the courts of justice from the official

ministration of persons unfit to practice in them”); J ohns on v.

Ayers

, 921 F.2d 585, 586 (5th Cir. 1991) (Wisdom, J.) (“‘Disbarment

proceedings are not for the purpose of punishment, but rather seek

to determine the fitness of an official of the court to continue in

that capacity and to protect the courts and the public from the

official ministration of persons unfit to practice.’”) (quoting In

re Der r yberry

, 72 B.R. 874, 881 (Bankr. N.D. Ohio 1987)). As we

recently restated the matter in Dailey v. Vought Aircraft Co.

, 141

F.3d 224 (5th Cir. 1998), “disbarment is intended to protect the

public” in addition to b eing “a ‘punishment or penalty imposed on

the lawyer,’” and it is therefore “quasi-criminal in nature.” I d.

at 229 (quoting In re Ruffalo

, 390 U.S. 544, 550 (1968)). Although

b oth the Supreme Court and this court have often relied on th i s

“quasi -criminal” characterization to hold that “an attorney is

entitled to procedural due process which includes notice and an

opportunity to be he ard in disbarment proceedings,” s ee, e.g.

,

Dailey

, 141 F.3d at 229; Ruffalo , 390 U.S. at 550, we have only

rarely gone farthe r

. 16 C f. In re Ming

, 469 F.2d 1352, 1355 (7th

Cir. 1972) (“‘All that is requisite to their [disbarment

proceedings] validity is that, when not taken for matters occurring1 7 But see Tha lheim , 853 F.2d at 388 (also requiring that the

court’s disciplinary rules be read strictly, resolving any ambiguity in favor of the person charged, in an unexplained but

obviously intentional application of criminal law’s rule of

l enity). In response to that point, we can only note that the

que stion whether the rule of lenity is even a fundamental

requirement of due process in more traditional criminal settings is

a question of some complexity.

We should also note that the other major additional procedural

protection that we have specifically mandated for disbarment

cases--the requirement that the distr ict court strictly abide by

such rules of discipl inary enforcement as it has created, s ee

Thalheim

, 853 F.2d at 388--is not implicated in this case, because

the Western District of Louisiana, unlike the Eastern District, did

not have such rules at the time these sanctions were imposed. C f.

ULLR 83.2.10E (1994). As such, we need only analyze the procedures

actually employed to see if they meet the requirements of due

process. C f. Ming

, 469 F.2d at 1355 (“The district courts are free

to adopt their own local rules defining grounds for disbarment and

suspension and the procedures to be followed. But these rules must

meet the requirements of due process.”).

26 in open court, in the presence of the judges, notice should be given

to the attorney of the charges made and opportunity afforded him for

explanation and defence.’”) (quoting Randall v. Brigham

, 74 U.S. (7

Wall.) 523, 540 (1868)). Indeed, even in the limited instances

where this court has mandated specific additional protections, the

manner in which we have done so leaves the unmistakable impression

that “quasi-criminal” means “less than criminal” for due proce s s

purposes. S ee, e.g.

, In re Thalhe i m

, 853 F.2d 383, 388 n.9 (5th

Cir. 1988) (requiring “clear-and-convincing” evidence of a

disbarrable offense, rather than proof “beyond a reasonable doubt,”

as a blind app lication of full criminal contempt procedure would

suggest). 17 Furthermore, and as noted in C ammer

, the imposition of

disciplinary sanctions itself implicates an independent and27

fundamental duty of the district court--the supervision of the

attorneys who practice as members of its bar--in ways that other

sanctions simply cannot. C f. RTC v. Bright , 6 F.3d 336, 340 (5th

Cir. 1993) (“It is beyond dispute that a federal court may suspend

or dismiss an attorney as an exercise of the court’s inherent

powers.”); Howell v. State Bar of Texas

, 843 F.2d 205, 206 (5th Cir.

1988) (“Since the early days of English common law, it has been

widely recognized that courts possess the inherent power to regulate

the conduct of attorneys who practice before them and to discipline

or disbar such of t hose attorneys as are guilty of unprofessional

conduct.”); Flaksa v. Little River Marine Constr. Co.

, 389 F.2d 885,

889 n.10 (5th Cir. 1968) (“‘The power of a court to discipline

members of its own bar can scarcely be doubte d seriously. An

attorney is under no obligati on to seek admission to the bar of a

U nited States district court. He is at liberty to abstain from

membership in that or any other bar. But when he does apply and is

admitted he secures certain privileges and also assumes definite

obligations. The power of a court to impose appropriate and

reasonabl e sanctions upon those admitted to its bar is a familiar

phenomenon an d lies within the inherent power of any court of

record.’”) (qu oting Gamble v. Pope & Talbert, Inc. , 307 F.2d 729,

735 (3d Cir. 1962) (Biggs, CJ., dissenting)); Woo d ham v. American

Cystoscope Co.

, 335 F.2d 551, 557 (5th Cir. 1964) (referencing

Gamble and noting that appropriate “modes of discipline against the

attorney might include: (1) a reprimand by the court, (2) a finding28

of contempt, or (3) a prohibition against practicing for a limited

time befor e the court whose order was neglected or disregarded”)

(quoting Comment, Sanctions at Pre-Trial Stages

, 72 Yale L. J. 819,

830 (1963)); Roadway Express, Inc. v. Piper

, 477 U.S. 752, 766 n.12

(1980) (citing Chief Judge Biggs’s dissent in Gamble with approval).

Thus, whatever might be the implic ations of the more general

statements in Bagwell --and we also note, for the record , that

Bagwell did not directly address the status of disbarments or other

disciplinary sanctions--in the light of the extensive disciplinary

case law we have cited, we are constrained by binding precedent to

reject the sanctions defendants’ invitation in this ca s e to apply

a blunt requirement of full criminal procedure to every disbarment

that the district courts of this circuit choose to issue in the

exercise of their inherent power. Even more surely, our precedent

emphatically dismisses such extensive procedural hoop-jumping fo r

the far less serious disciplinary sancti ons of suspension and

repr imand. In resolving this case, we must simply remain content

to retain the vague, “quasi-criminal” designation th at our

precedents have expressly chosen to place upon such sanctions, and

conduct our due process analysis on that basis.

In so doing, we may rely on the well established propositions

that “[t]he fundamental requirement of due process is the

opportunity to be h eard ‘at a meaningful time and in a meaningful

manner,’” M athews v. Eldridge

, 424 U.S. 319, 333 (197 6) (quoting

Armstrong v. Manzo

, 380 U.S. 545, 552 (1965)), and that “[t]he very29

nature of due process negates any concept of inflexible procedures

universally applicable to every imaginable situation,” Cafeteria &

Restaura n t Workers Union v. McElroy

, 367 U.S. 886, 895 (1961).

Stated another way, due process, “‘unlike some legal rules, is not

a technical conception with a fixed content unrelated to time,

place, and circumstances.’” M athews

, 424 U.S. at 334 (quoti n g

McElroy

, 367 U.S. at 895). In each individual case, identification

of the specific dictates of due process is “guided by a Mathews v.

Eldridge ba lancing which requires the weighing of the private

interests affected by the official action, the risk of erroneous

deprivation through the existing procedure, and the government’s

interest in minimizing i ts administrative and financial burdens.”

Metro County Title, Inc. v. FDIC

, 13 F.3d 883, 887 (5th Cir. 1994)

(citing Mathews

, 424 U.S. at 334-35); c f. Santosky v. Kramer

, 455

U.S. 745, 753-54 (1982) (apply ing the M athews test and requiring

only a “fundamentally fair procedure” for the state to terminate the

rath e r weighty rights of parentage); Burnett v. Collins

, 982 F.2d

922, 928 n.8 (5th Cir. 1993) (Garwood, J.) (noting that, even in a

criminal case where evidentiary errors have occurred, due process

requires nothing more than “a fundamentally fair trial”); L ink v.

Wabash Rai lroad Co. , 370 U.S. 626, 632 (1962) (noting that the

“adeq uacy of notice and hearing respecting proceedings that may

affect a party’s rights turns, to a consid erable extent, on the

knowledge which the circumstances show such party may be taken to

have of the consequences of his own conduct”). Furthermore, it is30

well established that, even where the sanction is patently criminal,

“[u]nless an action violates a specific pr o vision of the

Constitution, the due process clause requires ‘only the most basic

proc edural safeguards.’” Y oung v. Herring

, 938 F.3d 543, 557 n.3

(5th Cir. 1991) (King, J.) (quoting Patterson v. New York

, 432 U.S.

197, 210 (1977)).

That said, just which “basic proce d ural safeguards” will be

generally implicated by imposition of the “quasi-criminal” sanction

of disbarment is a close and vexat ious question. It is not,

however, a question that requires a thorough answer at the present

juncture, so long as we remain focused, as we surely m ust, on the

specific faults alleged by the sanctions defendants in the instant

case: First, Ward’s service as “prosecutor”; second, the fact that

he testified in addition to serving as attorney; and third, his ex

parte contacts with the court. We address each in turn.

a

With regard to Ward’s service as prosecutor, our decis i on in

NASCO, Inc. v. Calcasieu Television and Radio, Inc. , 894 F.2d 696

(5th Cir. 1990) (Higginbotham, J.), is largely dispositive of the

issue. In that case, the district court imposed, among other

things, a compensatory civil sanct i on of attorney’s fees and

expenses, and a “quasi-criminal” sanction of a three-year

disbarment, against G. Russell Chambers, t he owner of Calcasieu

Television, and A. J. Gray, his ch ief attorney, in response to a

“long and arduous campaign of fraud, deceit, delay, h arassment,18 As the district court itself described the procedure:

. . . We finally decided that NASCO’ s counsel would

certainly make application for sanctions in the form of

attorney’s fees and expenses. The Court would rely on

that application and the oppositions filed by defendants

for investigation and the appropriateness of that kind of

sanction. The Court would rely on its own research and

any additional research that we might request of the

parties regarding the imposition of other types of

sanctions. On appeal, NASCO’s counsel is to defend the

entire judgment of this Court, including sanctions other

than attorney’s fees and expenses. If sanctions are

found and become final, they shall include the attorney’s

fees and expenses of NASCO’s counsel in representing

NASCO and the public in the sanction phase of this suit.

NASCO , 124 F.R.D. at 137.

31 oppression and expense” in Calcasieu’s litigati on of a contract

claim brou ght against it by NASCO. S ee NASCO, Inc. v. Calcasieu

Television and Radio, Inc.

, 124 F.R.D. 120, 143-45 (W.D. La. 1989).

The motion for monetary sanctions had been brought by NASCO, and it

was resolved by way of a one-day bench trial in which each side was

allowed t o present evidence and argue the merits of its position.

Gray’s disbarment, on the other hand, was brought by the court, and

legal argument on the issue was limited to the court’s own research

and such briefs as the parties chose to submit after the hearing on

the monetary sanctions. 18 In response to Gray’s argument on appeal

that he had been deprived of his right to due process, and in

partic ular of his right to a disinterested prosecutor for the

“criminal” sanction of disbarment, we stated:

[W]e are not persuaded that NASCO’s “prosecution” of the

sanctions proceeding violated the strictures of Young v.

United States , 481 U.S. 787, 107 S.Ct. 2124, 95 L.Ed.2d1 9 Although Judge H igginbotham’s description might leave some

room for ambiguity, in point of fact there can be no doubt that the

district court in NASCO relied primarily on the extensive factual

development of the monetary sanctions proceeding in finding Gray

disbarrable. As the following excerpt of its findings makes clear,

the court disbarred Gray on the basis of a wide variety of actions

and culpable mental states derived from the whole course of

Chambers’s scheme, including much out-of-court plotting and other

activity that the court could not possibly have known about save

for the trial:

. . . In his conduct in this case, Gray has actively

violated almost every one of [his] ethi cal and

professional responsibilities. He accepted and tried a

case for the explicit purpose of doing injustice, i.e.,

he used every means at his disposal to defeat a perfectly

legal and enforceable purchase contract against which he

32 740 (1987). There the Court held the appointment of the

opposing counsel in the underlying litigation to

prosecute a criminal contempt proceeding violated due

process. The Court reasoned that counsel could not

adequately represent the interests of the government and

the interests of his priva te client at the same time.

107 S.Ct. at 2135-2139. Gray argues that because we have

characterized a disbarment proceeding as quasi-criminal,

In re Thalheim

, 853 F.2d 383, 388 (5th Cir. 1988), the

reasoning in Young should apply. We are unable to find

any authority to support Gray’s contentions and he points

us to none. Further, we conclude that the danger present

in Young

, that private counsel wo uld be overzealous in

the contempt proceedings in a n effort to further the

interest of his client, was not p resent here. The

arguments of counsel at the hearing were devoted entirely

to the issue of monetary sanctions. The court later

r elied on its own research, aided by any briefs the

parties wished to file, in determining the propriety of

nonmonetary sanctions. 124 F.R.D. at 137, n.10. The

court thus avoided placing NASCO’s counsel in the role of

prosecutor for the disbarment proceedings.

NASCO , 894 F.2d 707-08.

We read NASCO as standing for the proposition that Young is not

infringed, e ven where the district court relies on interested

opposing counsel to present the facts 19 giving rise to an impositionwell knew his client had no defenses. He misused the

injunction notice given by NASCO. He devised a

fraudulent and il legal scheme to deprive this Court of

the jurisdiction which it had at the time NASCO's notice

was delivered on Friday, October 14, 1983. The sale to

the Trust as attempted was an absolut e simulation and

totally void and incomplete at the time it was recorded.

It was recorded in haste for the purpose of rendering the

impending injunction ineffective. He not only failed to

disclose essential and pertinent facts, he actively

misled the Court and recorded his conversation with the

Court without disclosing to the Cou rt his intent to do

so. By these actions the Court was forced to delay

action on the merits until it was determined by trial

that the Court again had jurisdiction. During this delay

Gray utilized his legal skills and experience to lead, on

behalf of Chambers, a campaign of harassment, oppression

and delay sufficient to force NASCO to spend over a

million dollars in attorney’s fees and expenses to defend

its rights to the performance of a perfectly legal and

enforceable contract. More amazing, this was

accomplished without the introduction by defendants of

one single item of evidence against the validity of the

Purchase Agreement. This case is unique. The manner in

which it was conducted by Gray is a disgrace to the legal

profession. It is our reluctant duty as a sanction to

disbar Gray from practice as an attorney in the Western

District of Louisiana . . .

NASCO

, 124 F.R.D. at 144-45. In this regard, it might also be

noted that the above description of Gray’s conduct was part and

parcel of the court’s unified and consistent descri ption of

Chambers’s entire “campaign,” which surely would not have been the

case had Gray been afforded the benefit of factual development

independent of the monetary sanctions proceeding.

33 of the quasi-criminal sanction of disbarment, so long as the court

relies on its own research (as supplemented by appropriate briefing

by the parties) with regard to relevant legal issues and the overall

appropriateness of disbarment. The logic would appear to be that,

by avoiding putting opposing counsel in the position of making legal

argument in favor of disbarment, the court sufficiently avoids2 0 Young does not, of course, apply to civil sanctions

proceedings. S ee, e.g.

, Portland Feminist Women’s Health Center v.

Advocates for Life, Inc. , 877 F.2d 787, 790 (9th Cir. 1989).

34 placing him in the role of pr osecutor so as to escape the mandate

of Young

. 20 Whatever we might think of this reasoning as a de novo

matter, we are of course bound by our prior circuit precedent and

must accept N ASCO ’s rule in this case. S ee Hogue v. Johnson

, 131

F.3d 4 66, 491 (5th Cir. 1997) (Garwood, J.) (“One panel of this

Court may not overrule another (absent an intervening decision to

the contrary by the Supreme Court or the en banc court . . .).”).

Furthermore, were we to consider the question afresh, we would note

that t h e “compromise” nature of the NASCO rule seems to us to be

highly consistent w i th other aspects of the murky “quasi-ness” of

disbarment’s criminal character, including particularly the use of

a “clear-and-c onvincing” (as opposed to “beyond-a-reasonable-doubt”)

burden of proof, and the fact that the normal criminal requirement

that there actually be a separate prosecutor does not appear to

apply in the disciplinary context.

In applying the NASCO rule to this case, our review of the

record ca sts no doubt on the district court’s express assurance

that, in order to “‘preserve the court’s independent thought,’ Ward

was restricted to a statement of the facts.” He “conducted

investigations, took depositions, collected other evidenc e

, and

cross-examined witnesses,” but he “was not allowed t o present

argument, submit legal authorities after trial, or suggest the2 1 Indeed, to the extent that Ward, unlike NASCO’s attorneys,

was not arguing a live sanctions motion of his own while presenting

the evidence forming the basis for disbarment, this case arguably

presents a far less problematic scenario.

2 2 A fact that is not in the least surprising, given that Judge

Scott was the very district judge whose procedures we affirmed in

NASCO

.

35 sanctions to be imposed.” On those matters, as well as on the

selection of the part icular defendants to be charged, the court

“kept its own counsel.” With the exception of the issues of

attorney testimony and ex parte contacts discussed separately below,

we can find no serious deviation 2 1 from the procedure expressly

approved in NASCO

, 22 and therefore conclude that the emplo yment of

Ward as “prose c utor” did not violate the remaining sanctions

defendants’ right to due process.

b

We turn next t o the question of attorney testimony. On this

point, we are confronted wit h less precedent, but an arguably

clearer answer. Although Rule 3.7 of the Louisiana Rules of

Professional Conduct (applicable to attorneys practicing before the

Western District, see ULLR 83.2.4W (1994)) is clear that “[a] lawyer

shall not act as advocate at a trial in which the lawyer is likely

to be a necessary witness” (with e x ceptions not applicable here),

local ethical rules are “not the ‘sole’ authority governing motions

to disqual ify counsel.” F DIC v. United States Fire Ins. Co.

, 50

F.3d 1304, 1312 (5th Cir. 1995). Federal courts decide such motions

on the basis of federal, not state, law, and “‘consider the motion36

governed by the ethical rules announced by the national profession

in the lig ht of the public interest and the litigant’s rights.’”

Id. (quo ting In re Dresser Indus. , 972 F.2d 540, 543 (5th Cir.

1992)). Although local ethical rules are certainly relevant to that

analysis, they are not dispositive.

Furthermore, and as numerous co urts and commentators have

recognized, the only justification for the attorney testimony rule

that might be viewed as affecting the rights of the opposing party

is that derived from the fear that the jury will either accord such

testimony undue weight, or will be unable to distinguish between the

attorney’s testimony, offered under oath, and his lega l argument,

offered in rh etorical support of his client’s case. S ee, e.g.

,

Dawson v. Orkin Exterminating Co.

, 736 F.Supp. 1049, 1054 (D. Col.

1990) (noting that the rule “is designed primarily to preclude the

unseemly situation in which the lawyer must argue his own

credibility before the jury”); In re Whitney-Forbes, Inc.

, 31 B.R.

836, 842 (Bankr. N .D. Ill. 1983) (“The principal danger which

results from having active participation by an attorney who will be

a witness is that a jury will accord a disproportionate weight to

his testimony .”); P eople v. Superior Court of San Luis Obispo

County

, 84 Cal. App. 3d 491, 501 (Cal. Ct. App. 1978) (noting that

“the reluctance of courts to allow such testimon y . . . is the

danger that a jury would believe the . . . attorney to be more

credible than an ordinary witness”); Greenebaum-Mounta i n Mortgage

Co. v. Pioneer National Title Ins. Co.

, 421 F.Supp. 1348, 1354 (D.37

Col. 1976) (citing the “fear that the statements of counsel in

closing arguments might bear too much weight with the jury, since

the jury previously observed the attorney taki ng an oath to tell

only the truth”); cf. United States Fire Ins. Co.

, 50 F.3d at 1311

(generally noting the reasons for the rule); 6 Wigmore on Evidence

§ 1911 (1940 ed.) (same). As the majority of these courts have also

recognized, this justification is inapplicable where, as here, the

testimony is m ade to a judge, not a jury. S ee Orkin

, 736 F.Supp.

at 1054 (“Here,

. . . counsel testified in a heari n g before [a

ju dge] . . . . The rule is therefore inapplicable.”); W hitneyForbes

, 31 B.R. at 842 (“That problem d oes not exist in a bench

trial.”); Superior Court

, 84 Cal. App. 3d at 501-0 2 (noting that

“where the

. . . attorney will only be testif ying at pretrial

hearings where the trier of fact is a judge, not a jur y

, th[e]

danger does not exist”); Green ebaum-Mountain Mortgage Co. , 421

F.Supp. at 1354 (“Because this case involves a trial to the court,

rather than to a jury, we are confident that the finder of fact can

make the necessary distinctions.”).

In the light of this wide swath of opinion on this particular

rule of the “nationa l profession,” and in the light of the

additional fac t that the attorney testimony rule has been held to

be completely inapplicable to attorney pro se litigants, see Duncan

v. Poyth ress , 777 F.2d 1508, 1515 n.21 (11th Cir. 1985) (also

noting, consistent with the above cases, that, because “a judge was

the trier of fact,

. . . there was no danger that the trier of fact2 3 We also note that, as a practical matter, such testimony will

often be necessary. One of the primary justifications for allowing

opposing counsel to present evidence in these cases is the fact

that he will already be familiar with the underlying events, having

taken part in the proceedings in which the allege dly improper

conduct by his opponent occurred. In these circumstances, it is an

almost foregone conclusion that counsel will also have relevant

evidence of those proceedings. If we are to abide by N ASCO and

allow the district court a workable way to investigat e these

matters, we must accep t the admittedly unusual fact of attorney

testimony as part of the bargain.

38 could not distinguish between testimony and advocacy”), we find no

merit to the contention that allowing Ward to testify at the bench

trial in this case could have infr i nged the remaining defendants’

right to due process. 23

c

We come, then, to the final alleged procedural defect: Ward’s

ex parte contacts with the court. After extensive research, we

could locate n o Fifth Circuit case that found ex parte “contacts”

to constitute a reversible violation of due proce ss. What we did

find were a vast number of cases holding the contrary--often in far2 4 See, e.g.

, Herring

, 938 F.2d at 557 (King, J.) (“Because the

ex parte instruction in the instant case does not implicate a specific constitutional provision, [the defendant] must demonstrate

that, based on all the circumstances, the instruction prevented him

from receiving a fair and just hearing.”) (citing United States v. Widgery

, 778 F.2d 325, 330 (7th Cir. 1985)); United States v.

Patterson

, 809 F.2d 244, 248 (5th Cir. 1987) (“The defendants argue

that the district court’s ex parte, in camera procedure violated

their rights under the confrontatio n and due process

clauses

. . . . We need not consider these claims because any

possible errors made by the district court in connection with its

ex parte, in camera inquiry would be harmless.”); Vardas v.

Estelle

, 715 F.2d 206, 208 (5th Cir. 1983) (“The district court in

denying habeas corpus in this case determined that the ex parte

procedure followed here violated state procedures, but was not in

violation of constitutional due process. A state court’s failure

to follow its own procedural rules d oes not of itself raise a

federal constitutional question cognizable in habeas corpus.”); In

re Eisenberg , 654 F.2d 1107, 1112 (5th Cir. Unit B Sept. 4, 1981)

(finding no due process violation f or ex parte hearings on

discovery questions); Chan v. INS

, 634 F.2d 248, 258 (5th Cir.

Jan. 15, 1981) (“[The deportee] argues that the immigration judge,

at the time of his motion to reopen, violated due process when he

engaged in ex parte communications with a deportation

offi cer . . . . Chan has failed to make any allegation that the

alleged ex parte communications between the immigration judge and

the deportation officer at the time of the motion to reopen prejudiced the merits of his case. Therefore, he may not claim

that his due process rights were violated.”).

2 5 See, e.g.

, United States v. Lutz

, No. 95-17040, 103 F.3d 142,

1996 WL 711435 (9th Cir. 1996) (unpublished) (“[The defendant]

contends that his due process rights were violated in the course of

this section 2255 motion because the district court . . . allowed

[the government] to fil e ex parte motions . . . . [T]he district

court did not exceed its authority when it

. . . allo wed the

government to file ex parte motions.”); I n re Grand Jury Subpoena

, 72 F. 3d 271, 276-77 (2d Cir. 1995) (stating, in the context of

discussing whether the failure to provide a witness with ex parte

material submitted by the government and reviewed in camera by the

cou rt violated that witness’s due process rights in a subsequent

proceeding to hold him in contempt for refusing to testify, that

“while this procedure doe s not occur frequently, it is not

forbidden when justified”); In re Grand Jury Witness

, 835 F.2d 437,

39 more serious criminal and deportation contexts. 24 Other courts

treat such claims similarly. 25441 (2d Cir. 1987) (“Appellant next asserts that during the

contempt hearing the government presented the district court with

a sealed ex parte affidavit, and adjourned to the robing room to

discuss it outside the presence of

. . . counsel,

. . . [and] that

this submission . . . denied him his right to a fair hearing. . .

. [T]he procedures followed by the district court in adjudicating

appellant in civil contempt did not deprive him either of due

process of the law or of a fair hearing.”); Fitzgerald v. Kingston

, 1998 WL 372763, *5 (D. Mass. 1998) (“[The defendant] alleges that

the

. . . the ex parte receipt of the additional

. . . information

. . . viol ated his procedural due process . . . rights. . . .

[W]hile the ex parte receipt of additional information on the

subject of the suspensio n was culpable (even the Town’s counsel

conceded at oral argument that the omission was not good practice),

it did not rise to a constitutional level. Full judicial-type

hearings are not required when local boards engage in granting or

revoking permits, [even] in cases, such as this, of the revocation

of a professional or occupational license .” ) (quotations and

citations omitted) (emphasis added).

40 Based on this rather extensive tradition of affording little

or no weight to isolated ex parte contacts, and in the light of the

fact that our review of the record reveals the contacts in this case

to have been limited to the most de minimis and harmless procedural

matters (such as ascertaining whether W ard would indeed prosecute

a sanctions motion on the Crowes’ behalf, so the court could decide

whether it need even consider bringing its own motion, and directing

t hat discovery be conducted in certain areas that the court had

itself determined to be particularly relevant), we find no merit to

the contention that the ex parte contacts rendered the proceeding

“fundamentally unfair” such as to violate the remaining defendants’

right to due process.

d41

Having concluded that the remaining defendants’ due process

rights were not themselves violated by the district court’s

procedures, the only potential question remain i ng is whether the

violation of CNA and Tone’s rights somehow “tainted” the proceeding,

such that the remaining defendants are also entitled to a reversal

of their sanctions. It has been argued in this regard that our due

process ruling must be made on the proceedin g as a whole, and not

as to individual defendants.

In LeGrand

, we were confronted with the far more serious

question of a singl e defendant who was subjected to both criminal

and civil contempt sanctions. We stated:

The contempt order in this case involves a true mixture

of both criminal and civil relief. Accordingly, it

should be characterized as criminal for purpo s es of

appea l. This characterization permits the review of

civil contempt orders which would otherwise not be final

and appealable. However, it does not necessarily follow

that, even if this is a true “mixed relief” case, a Court

must vacate and remand the whole proceeding for failure

to comply with criminal procedure. In Lamar[ Financial

Corp. v. Adams , 918 F.2d 564, 567 (5th Cir. 1990)], the

reviewing court vacated and remanded the criminal portion

of the order but affirmed the civil portion after finding

the district court had not abused its discretion in

granting the civil relief.

LeGrand

, 43 F.3d at 169-70. In the light of this precedent, we are

c onfident that we have followed the correct path by making an

individual evaluation of each defendant’s right to due process, and

conclude that our a nalysis of CNA and Tone’s procedural claims is2 6 Obviously, in any sanctions proceedi ng involving both

criminal and civil (or, as here, quasi-crimin al) defendants, the

proper procedure is to provide full criminal safeguards throughout.

We merely note that a lack of proper criminal procedure in a mixed

proceeding does not constitute reversible error as to the civil

defendants. As to those defendants, there is simply no entitlement

to heightened procedure, and therefore no prejudice in its

deprivation.

42 irrelevant to the outcome for the other defendants. 2 6 Because we

have found the procedure individually sufficient as to defendants

Burns, Bieck, Wright, Fiedler, Bur nthorn, and Berry, we therefore

decline to reverse their sanctio ns for want of due process, and

proceed to their other arguments.

B

Turning, at very long last, to the substance of this case, the

sanctions defendants next argue that the district cour t clearly

erred in making its required finding of bad faith conduct. With

regard to sanctions defendants Burns, Bieck, Wrigh t, Fiedler,

Burnthorn, and Berry, we must obviously consider this argument, as

we h ave found no procedural basis for a reversal of those

defendants’ sanctions. We also consider this merits question as to

defendants CNA and Tone, however, because it allows us to determine

whether the proceeding can be dismissed as to them, thereby avoiding

th e potentially vexatious double jeopardy concerns that would be

raised by a remand in the light of the criminal nature of their

sanctions.

143

As noted above , “the threshold for the use of inherent power

sanctions is high.” E lliot

, 64 F.3d at 217. “In order to impose

sanctions against [a defendant] un d er its inherent power, a court

must make a specific finding tha t the [defendant] acted in ‘bad

faith. ’” Chaves v. M/V Medina Star , 47 F.3d 153, 156 (5th Cir.

1995). Where the sanction is disbarment, we have required that this

finding be based on “clear-and-convincing” evidence. S ee In re

Medrano

, 956 F.2d 101, 102 (5th Cir. 1992). We have also noted

that, where the finding of bad faith is based on “an erroneous view

of the law or on a clearly erroneous assessment of the evidence,”

the imposition of sanctions is “‘necessarily [an] abus e [of]

discretion.’” D awson

, 68 F.3d at 896 (quoting Cooter & Gell v.

Hartmarx Corp. , 496 U.S. 384, 405 (1990)).

In this case, we note at the outset that the district court did

make a facially sufficient fin ding when it ruled that all of the

sanctions defendants had engaged in a co nspiracy to willfully

defraud the Crowes by concealing the D&O Policy from them. The sole

question f or this court is whether that finding was based on “an

erroneous view of the law or on a clearly erroneous assessment of

the evidence.”

As indicated in Dawson

, when sanct i ons are imposed under the

inherent power, our investigation of legal and evidentiary

sufficiency is particula r ly probing. The hand of the district

court, as we are reminded by the Supreme Court, is som etimes wont

to be imperial, and when the district court dips into its reservoir44

of inherent power, the attorn eys practicing at its bar are likely

to be in their most vulnerable setting. Because direct democratic

controls are not available to guar d against the inherent power of

individual judges, we must, on appeal, assure that this power is

exercised in the most careful manner. This means that we will probe

the record in detail to get at the underlying facts and ensure the

legal sufficiency of their support for the district court’s more

generalized finding of “bad faith.”

2

The basis for the district court’s finding of bad faith in this

case was an attempt to defraud. There were two distinct classes of

conduct cited by the cou rt in support of this theory. First, and

primarily, the district court found that all of the sanctions

defendants willfully failed to disclose the D&O Policy to the Crowes

d espite having a known duty to reveal it. Second, the district

court found that some of the attorney defendants engaged in

affirmati v e misrepresentations or near misrepresentations in an

attempt to keep the policy a secret. Clearly, either of these

grounds would be sufficient to supp ort a finding of bad faith

conduct. The question is whether the record is sufficient to

support them.

With respect t o the first asserted ground, there is no

particular dispute that the sanctions defendants failed to disclose

the D&O Policy. Less clear, however, is the extent to which this

omissi on constituted a willful breach of some known duty to act.2 7 Based on the somewhat trailblazing case of S paulding v.

Zimmerman

, 116 N.W.2d 704 (Minn. 1962), and its dubious progeny.

In Spaulding

, the court held that a defendant had a duty to reveal

his greater knowledge of the extent of a plaintiff’s injuries in

the context of a settlement requiring court approval. I d. at 709.

2 8 A duty that should need no further clarification. Rule

3.3(a)(2) of the Louisiana Rules of Professional Conduct expressly

provides that “[a] lawyer shall not knowingly . . . fail to

disclose that which he is required by law to reveal,” and we have

expressly held that inherent power sanctions are an appr opriate

response to discovery violations. S ee Carroll

, 110 F.3d at 293

(noting that “intentional disruption of the discovery process [is]

misconduct that is recognized in the rules, in common sense, and in

respect for the court’s processes”)

29 The Court: The problem, to me, is, uh

. . . like in

negotiations, just as a general proposition,

no lawyer is obligated to tell everything that

he has before he puts it on the table.

Mr. Ward: Absolutely. That’s right.

The Court: So, I mean, here, uh

. . . let’s just assume

that there was no proper interrogatory, or no

proper request for production, it seems to me

there would hav e been no obligation for the

lawyers to reve al the existence of the CNA

policy. Do you agree with that?

Mr. Ward: I agree with you 100 pe rcent, Judge. That’s

true. I think there would be an argument--

The Court: So then only if each of these defendants

45 In its opinion, the district court theorized two principal duties:

First, a general duty to reveal applicable insurance policies prior

to settlement; 27 second, a more specific duty to respond accurately

to discovery requests. 28 At oral argument, however, Ward conceded

that the sanctions in this case could only be premised on the duty

to respond accurately to discovery requests , either as directly

implicated or under a theory of aiding and abetting. 2 9 For thisviolated some

. . . some discovery rule, would

they be subject to the sanctions of the court.

Mr. Ward: I think the discovery devices gave rise to the

initial duty. But this is the problem you

have, is when you move over to settlement,

these gentlemen and their clients become aware

tha t certain parties had a duty to disclose

something. And we get into the problem of an

in glo . . . an in globo settlement. All the

defendants know, the record’s very . . . very

clear; every defendant knows that I have asked

questions in discovery that give rise to

duties to disclose. So, what . . . what duty

do you have when you know someone’s

perpetrating a fraud, and you assist, or you’re going to achieve a benefit from it?

3 0 As a general matter, we will not consider arguments that have

not been urged by the parties on appeal. U nited States ex rel.

Thompson v. Columbia/HCA Healthcare Corp. , 125 F.3d 899, 903 n.3

(5th Cir. 1998). We note in passing, however, that, were we not so

constrained, we, like Ward, would nonetheless find it difficult to

identify any non-discovery-related duty that required the sanctions

defendants to reveal all applicable insurance policies to opposing

counsel in this case. S paulding was an unusual case with a narrow range of factual applicability, and its rather extreme (when more

broadly applied) rule finds no support in the jurisprudence of this

circuit.

46 reason, we will constrain our analysis of the failure-to-disclose

prong to t his theory of duty. 3 0 Under this theory, the question

becomes whether the record supports a finding that the sanctions

defendants either knowingly made a false response to a discovery

request, or knowingly assisted someone else in making or concealing

a false r esponse. After a thorough review of the record, we have

determined that it is completely insufficien t on this point as to

all of the sanctions defendants except Berry.3 1 And parallel provisi ons of every other professional

responsibility code, for that matter. See, for example , Rules 4.1

and 8.4 of the ABA’s Model Rules of Professional Responsibility.

3 2 With respect to Burnthorn, we should note that there was initially some evidence of discovery abuse. In making her client

Dollar’s claim of privilege in response t o Request 5, Burnthorn

identified the privileged material (as required by Fed. R. Civ. P.

26(b)(5)) as notifications of claim sent to New England Insurance

Company and Home Insurance Company only. Yet barely a week before,

Burnthorn had herself drafted a notification of claim to be sent to

CNA as well. The failure to identify this notice would appear to

be an error so conspicuous that a reasonable trier of fact may have

been justified in concluding that Burnthorn (and, thr ough her,

Wright) had made a willful omission.

As noted, however, the district court made no such finding,

even though it was clearly aware of t he nature of the response.

Indeed, the district cou rt expressly disclaimed any reliance on

alleged discovery violations as a basi s for finding bad faith

conduct on the part of Wright and Burnthorn, and in assessing

sanctions against them, the court relied exclusively on a breach of

the now abandoned Spaulding duty. In the light of this treatment,

we conclude that the cited evidence was essentially discredited,

and we therefore decline to consider it for purposes of this

47 With resp e ct to the second asserted ground, affirmative

misrepresentations, the dispute is less complex. Rules 4.1(a) and

8.4(c) of the Louisiana Rules 31 are quite clea r in their mandate

that attorneys not lie in the course of representation. The

question simply becomes whether the record supports a finding that

any of the attorney defendants actually lied with respect to the D&O

Policy. After a thorough review of the record, we have determined

that it is also at least partially insufficient on this point as to

all of the sanctions defendants except Berry.

a

With respect to CNA, Tone, Fiedler, and Burnthorn, the r e was

no finding or evidence 32 of any incorrect answer to any discoveryappeal.

33 W ith regard to Wright, see the discussion of Burnthorn’s

discovery responses in the preceding note.

3 4 The closest that these defendants came to willful aiding and

abetting was the meeting on July 26. At that meeting, it became

clear that all three were concerned about the possibility that

Berry’s discovery responses were inaccurate. Although the evidence

was clear that none of these defendants exercised an approp riate

amount of care in investigating this possibility, neither did they

knowingly assist Berry in perpetrating a fraud.

3 5 There was a find ing of bad faith failure to disclose under

the now abandoned Spaulding theory of duty. As the S paulding duty

is no longer a viable one for purposes of this case, we disregard

this finding.

48 request at all, much less a willfully false response. Furthermore,

there was no finding or evidence that any o f these defendants

willfully aided anyone else in making or conce aling an incorrect

response, or even that they knew that anyone had made an incorrect

respon se. Finally, there was no finding or evidence that Tone,

F i edler, or Burnthorn ever engaged in any affirmative

misrepresentations with respect to the D&O Policy. As to CNA, Tone,

Fiedler, and B u rnthorn, the district court’s finding of bad faith

conduct was therefore clearly in e rror and its imposition of

sanctions an abuse of discretion.

b

Wit h respect to Burns, Bieck, and Wright, there was also no

finding or clearly convincing ev idence of any incorrect response 3 3

to a discovery request, or of any knowing assistance 34 of an

incorrect response. 3 5 There was, however, an implicit finding of49

misr epresentation. The district court held that Burns made a

willfully misleading statement at the July 11 meeting when he

declared a settlement proposal of $6.2 million to be far beyond any

theory of insurance coverage. Furthermore, the court held that

Bieck and Wright maintained a knowing silence during this statement.

The record supports the district c ourt’s characterization of

events, and we are unable to say that the court was clearly in error

in declaring the facts of the Jul y 11 meeting, even under the

heightened clear-and-convincing evidentiary standard applicable to

the sanction of dis barment. Whether the actions of Burns, Bieck,

and Wright constituted misrepresentation for purposes of the

Louisiana Rul es is a better question, but one which we need not

reach at this juncture.

For regardless of this “misrepresentation,” the district court

purported to base its finding of bad faith conduct exclusively on

a breach of the duty to re veal the D&O Policy. As we just

clarified, however, there was no prope r foundation for a finding

that these defendants breached a known duty to disclose, as the

district court made no finding that these defendants ever made or

assisted a false discovery response. As to these three defendants

as well, t he district court’s finding of bad faith conduct was

therefore clearly in error.

c

Be rry presents a different case. The district court

specifically found that he knowingly and deliberately made blatantly36 The response sent on behalf of his fourth director client.

50 incorrect discovery responses to Requests 5 and 8. Berry does not

seriously dispute that his responses were in fact false, and, with

respect to at least on e of them, 3 6 the record clearly supports the

district court’s inference that he knew his answer to be incorrect

at the time it was offered. Furthermore, the district court also

found that Berry attempted to cover up his lapse with outright

deception when he repeatedly assured the Cro w es’ counsel that his

clients would be paying for any settlement out of their own pockets.

This finding, too, has adequate support in the record. In the light

of these specific f indings, we cannot say that the district court

clearly erred in concluding that Berry engaged in bad faith conduct,

or that the evidence was not sufficient to overcome the clear-andconvincing hurdle.

We are not swayed from thi s view by the fact that there may

have been other explanations for Berry’s actions. Berry argues, for

instance, that he did not disclose the D&O Policy or the past claims

corr espondence because he simply did not realize that there was a

possibility that the policy would actua lly cover his clients. He

essentially pleads incompetence in this respect, stemming from his

lack of experience with insurance la w

. This explanation is

supported in some respects by t he district court’s finding that

Berry once actually mentioned the D&O Policy to the Crowes’ counsel,

referring to it as “lapsed.” It is soundly contradicted, however,51

by the fact that Berry sought defense and indemnification for his

clients under the policy simultaneous with his purported conclusion

that it did not cover them.

Even if we were content to characterize Berry as a mere bungler

in a de novo review, we would not have that authority in this case.

Even under the more than perfunctory review applicable to inherent

power sanctions proceedings, the factual fin dings of the district

court are entitled to respect unle ss clearly erroneous. Berry’s

purported interpretation of his discovery duties was neither proper

nor even rationally consistent. It was not for him to decide, sub

silencio, which documents facially covered by a discov ery request

would be important, and we are certain that no competent attorney

would make this presumption. The district court found Berry’s

explanation to be inherently incredible, and we cannot say that this

finding was clearly wrong. We therefore conclude that the district

court did not clearly err in finding bad faith conduct on the part

of James W. Berry.

d

Because the district court clearly erred in making its required

finding of bad faith conduct on the part of defendants Fiedler and

Burnthorn, we must reverse and vacate the imposition of sanctions

against those defendants. Furthermore, because the record before

us indicates no possible evidentiary basis for a proper finding of

bad faith conduct on the part of either those defendants or CNA and

Tone, we will dismiss the sanctions proceeding as to them. Because3 7 We also note, in this regard, the rather fine distinction

between the evidence of Burns, Bi eck, and Wright’s

“misrepresentation,” which we consider, and the evidence of Wright

and Burnthorn’s discovery abuse, which we do not. As discussed

above, the district court expressly disclaimed any reli ance on

Burnthorn’s discovery responses as a basis for sanctions, which we

read as a rejection of the evidence on that point. The

misrepresentation evidence, on the other hand, was never rejected

by the district cou rt, and impresses us as having figured

prominently in the background of its decision.

52 we find no clear error with regard to the finding of bad faith

conduct on the part of Berry, we will not disturb his sanctions for

lack of evidentiary sufficiency.

Burns, Bieck, and Wright present a more intriguing question.

As it stands, the district court’s finding of bad faith conduct on

their part was clearly in error because its assigned basis finds no

specific support in the record. As noted above, the district court

found that Burns, Bieck, and Wright acted in bad faith because they

breached a duty to disclose the D&O Policy. Yet the record reveals

that there was no breach of the only relevant duty. The record also

indicates, however, that there was a supportable findi n g of other

con duct that would constitute bad faith, in the form of the

misrepresentation offered at the July 11 meeting. Because this

purported misrepresentation, which we do not take lightly, could be

a sufficient independent basis for the imposition of sanctions, 37 we

must ask whether it would be proper for this court simply to affirm

the sanctions imposed against these defendants under this alternate

theory. Because the district court’s discretionary decision to

s anction these defendants was irreparably intertwined with the38 And the now abandoned Spaulding theory of duty.

53 breach-of-duty theory of fraud, 38 we have concluded that we may not

simply affirm it based on another arguably sufficient theory.

The imposition o f sanctions under the inherent power is a

decision particularly committed to the sound d iscretion of the

district court. The inherent power was expressly derived from that

“‘control necessarily vested in courts to manage their own affairs

so as to achieve the orderly and expeditious disposition of cases.’”

Chambers

, 501 U.S. at 43 (quoting Link v. Wabash R.R. Co.

, 370 U.S.

626, 630-631 (1962)). When a district court imposes sanctions under

the inherent power, it is because the court has determined, in its

discretion, that the particular sanctions are ne cessary to

effectuate these important goals as to the particu l ar defendants

under its particular theory of the case. For this court to affirm

inherent power sanctions on grounds other than those e xpressly

chosen by the imposing court would constitute an encroachment upon

that court’s discretion unwarrante d by the concerns for order and

nece ssity inherent in their use. The district court in this case

imposed sanctions for breach of a duty to disclose, and we have now

clarified that this basis is insufficient as to these defendants,

although anot her basis, misrepresentation, might be. In this

situation, we believe the better course is to reverse and vacate the

district court’s original imposition of sanction s, and, in the39 We may also dispense, at this juncture, with the additional

miscellaneous arguments of Burns, Bieck, Wright, and Berry. First,

all of these remaining defe ndants make several unclear and

undeveloped arguments regarding improper b i as in the district

court. They can point us towards no motive for or evidence of

expressed partiality, however, and we can see no indication that

the district court was either more or less biased than is natural

and unavoidable where inherent power sanctions are involved. The

mere fact that the court sees fit to bring a sanctions motion will

not give rise to an inference of improper bias. S ee Lema ster v.

United States , 891 F.2d 115, 120-21 (6th Cir. 1989).

Second, Berry argues that his sanctio n was unnecessarily

severe. We think it clear, however, that the particular amount of

an inherent power sanction is uniquely committed to th e sound

discretion of the imposing court. In this case, we are content

that the district court adequately considered all of the relevant

circumstances, and that Berry’s sanction was appropriate

thereunder. Lest there be any doubt on this point, those

circumstances, again, were a deliberate deception leading to a $5

million potential loss. We cannot say that a nine-month suspension

from practice was not the least severe sanction necessary to deter

such conduct in the future. S ee Natural Gas Pipeline Co. of Am. v.

Energy Gathering, Inc.

, 86 F.3d 464, 467 (5th Cir. 1996) (noting

that the “sanction chosen must empl oy ‘the least possible power

adequate to the end proposed’”) (quoting Anderson v. Dunn

, 19 U.S.

(6 Wheat.) 204, 231 (1821)).

54 absence of any other error, remand for reconsideration in the light

of our clarification. 394 0 In reaching its decision, the district court should address

specifically the manner in which the actions of Burns, and, more importantly, Bieck and Wright, ca n be equated to a

misrepresentatio n for purposes of the Louisiana Rules. In so

doing, the court should pay particular attention to our command in

Thalheim that such rules are to be read strictly, resolving all

ambiguities in favor of the attorney. See id. , 853 F.2d at 388.

55 V

For the foregoing reasons, we hold that the district court

violated CNA and Tone’s right to due process b y imposing serious

criminal fines on them via a civil process. We find no procedural

fault as regards the “ quasi-criminal” suspension and reprimand

sanctions meted out to the other sanctions defendants. We also

hold, however, that the district court’s required finding of bad

faith conduct was clearly in erro r as to all of the sanctions

defendants save Berry. We therefore REVERSE and VACATE the district

court’s imposition of sanctions against al l of these defendants.

Furthermore, because the evidence is co mpletely insufficient to

support the sanctions imposed against defendants CNA, Tone, Fiedler,

and Burnthorn, we DISMISS the sanctions proceeding as to them. With

respect to defendants Burns, Bieck, and Wright, we find the record

potentially sufficient to supp ort sanctions, and REMAND to the

district court for further consideration in the light of our

opinion. 40 We AFFIRM the sanctions imposed against Berry.

Accordingly, the judgment of the district court is REVERSED and

RENDERED as to sanctions defendants American C a sualty Company of

Reading, Pennsylvania, Michael P. Tone, Anne Fiedler, and Judy L.4 1 With regard to Judge Scott’s outstanding motion for leave to

file an amended judgment, we have determined that it has no bearing

on the issues or outcome of this appeal. The motion is therefore

DENIED AS MOOT.

56 Burnthorn. Judgment is REVERSED and REMANDED as to defendants W.

Glenn Burns, Robert B. Bieck, Jr., and William E. Wright. Judgment

is AFFIRMED as to defendant James W. Berry. 41

REVERSED in part, AFFIRMED in part, and

REMANDED with instructions.

ENDRECORD4 2 Although the district court ultimately denied the private

sanctions motion one week before issuing its opinion in this case,

Ward’ s motion was pending before the court during the court’s

investigation and the entirety of the hearings in which Ward played

such a vital role.

57 -57- EMILIO M. GARZA, Circuit Judg e

, concurring in part and dissenting

in part:

The district court below not only appointed plaintiffs’

attorney Ward to prosecute the court’s sanctions motion at the same

time that Ward had his own private sanctions motion pending before

the court (as well as related civil proceedings), but also engaged

in extensive ex parte communications with Ward, ordered Ward not to

disclose the s ubstance of the communications with the defendants,

and allowed Ward to testify as a fact witness and cross-examine

other witnesses during the proceedings. 42 Using these unprecedented

procedures and operating under its “inherent powers,” the district

court imposed serious criminal fines and quasi-criminal disbarment,

suspension, and reprimand sanctions on the defendants.

In evaluating these proceedings, the majorit y correctly

concludes that the procedures failed to co mport with basic

principles of due process with respect to the criminal fines imposed

on defendants CNA and Tone. Ironically, notwithstanding this

conclusion, the majority holds that the same defective procedures

did not violate due process with respect to the quasi-crim i nal

disbarment, suspension, and reprimand of def endants Burns, Bieck,

Wright, Fiedler, Burnthorn, and Berry. I respectfully disagree.43 See, e.g., Dailey v. Vought Aircraft Co. , 141 F.3d 224,

229 (5th Cir. 1998) (reversing and vacating attorney disba rment

because the distric t court failed to provide adequate notice and

opportunity to be heard); Scaife v. Associated Air Center Inc.

, 100

F.3d 406, 412 (5th Cir. 1996) (reversing and vacating attorney

reprimand sanction because it was overbroad and excessive in

relation to the alleged conduct); United States v. Brown , 72 F.3d

25, 29 (5th Cir. 1995) (reversing and dismissing attorney

suspension sanction because disciplinary rule must be strictly

construed resolving ambiguities in favor of the p erson charged);

Elliott v. Tilton

, 64 F.3d 213, 217 (5th Cir. 1995) (reversing and

remanding attorney sa nction because the district court failed to

make a finding of bad faith); C haves v. M/V Medina Star

, 47 F.3d

153, 156 (5th Cir. 1995) (reversing attorney sanction because the

magistrate judge failed to exercise the mandated restraint before

assessing sanctions under the in herent power of the court);

Resolution Trust Corp. v. Bright

, 6 F.3d 336, 340-41 (5th Cir.

1993) (reversing attorney disbarment be cause the record did not

support the district court’s bad faith finding); In re Medrano

, 956

F.2d 101, 103 -05 (5th Cir. 1992) (reversing attorney disbarment

because the district court applied the prepond erance of the

evidence r a ther than clear and convincing evidence standard);

Johnson v. Ayers

, 921 F.2d 585, 586 (5th Cir. 1991) (reversing

bankruptcy court’s decision to suspend attorney f r om practice

because “a reasonable person would have a reasonable basis for

questioning [the judge’s] impartiality in the contempt

proceeding”); In re Thalheim

, 853 F.2d 383, 388 (5th Cir. 1988)

(reversing attorney suspension because the district court violated

due process by failing to follow its ow n requirements concerning

proper disciplinary proceedings).

58 -58- The majority cites no case where inherent powers sanctions have been

imposed or upheld under similar procedures, and I can find none.

Indeed, a thorough review of our case law demonstrates that we have

reversed and vacated disbarment, suspension, and reprimand sanctions

in far less troubling circumstances than those posed by the case at

hand. 43 Moreover, the Supreme Court’s decisions in I nternational

Union, United Mine Workers v. Bagwell

, 512 U.S. 821, 837-38, 114 S.

Ct. 2552, 2563-64, 129 L. Ed. 2d 6 4 2 (1994), and Young v. United

States

, 481 U.S. 787, 800, 107 S. Ct. 2124, 2133- 34, 95 L. Ed. 2d59 -59- 740 (1987), as well as our own warnings in NASCO, Inc. v. Calcasieu

Television & Radio, I nc. , 894 F.2d 696, 707-08 (5th Cir. 1990),

aff’d sub nom. Chambers v. NASCO, Inc.

, 501 U.S. 32, 111 S . Ct.

2132, 115 L. Ed. 2 d

. 27 (1991), mandate a reversal of the quasicriminal sanctions imposed under such defective procedures.

Accordingly, I dissent from the ma jority’s affirmance of the

suspension of attorney-defendant Berry. I concur in the judgment

reversing th e disbarment, suspension, and reprimand of Wright,

Burns, Bieck, Fiedler, and Burntho r n, as well the majority’s

reversal of the criminal fines imposed on CNA and Tone; I disagree,

however, with the majority’s approval of the unp recedented

procedures that the dist r ict court used to impose the suspension,

disbarment, and reprimand sanctions under its inherent powers.

I

“A court must, of course, exercise caution in invoking its

inherent power s, and it must comply with the mandates of due

process, both in determining that the requisite bad faith exists and

in assessing fees.” See NASCO

, 501 U.S. at 50, 111 S. Ct. at 2136.

Moreover, “the threshold for the use of inherent power sanctions is

high.” Chaves v. M/V Medina Star , 47 F.3d 153, 156 (5th Cir. 1995).

“Unlike most areas of law, wher e a legislature defines both the

sanctionable conduct and the penalty to be imposed, civil contempt

proceedings leave the offended judge sole ly responsible for

identifying, prosecutin g, adjudicating, and sanctioning the

contumacious conduct.” B agwell

, 512 U.S. at 831, 114 S. Ct. at60 -60- 2259; see also Mackler Productions, Inc. v. Cohen

, No. 97-7789, 1998

WL 325233, *2-3 (2d Cir. June 22, 1998) (“A troublesome aspect of

a trial court’s power to impose sanctions . . . pursuant to the

court’s inherent power

. . . is that the trial court may act as

accuser, fact finder and sentencing judge, no t subject to

restrictions of any procedural code and at times not limited by any

rule of law governing the severity of sanctions that may be imposed.

The absence of limitations and procedures can lead to unfairness or

abuse.”) (internal citation omitted). In addition, “[t]o the extent

th at such contempts take on a punitive character [] and are not

justified by o t her considerations central to the contempt power,

criminal procedural protections may be in order.” I d. at 831, 114

S. Ct. at 2559.

Significantly, both the Supreme Court and our own cour t have

e mphasized that disbarment is a punishment with puniti v e

characteristics. See, e.g., In re Ruffalo , 390 U.S. 544, 550, 88

S. Ct. 1222, 1226, 20 L.Ed.2d 117 (1968) (“Disbarment, designed to

protect the public, is a punishment or penalty imposed on the

lawyer.”); Dailey v. Vought Aircraft Co.

, 141 F.3d 224, 229 (5th

Cir. 1998) (“Although disbarment is intended to protect the public,

it is a ‘punis hment or penalty imposed on the lawyer.’”) (quoting

In re Ruffalo

, 390 U.S. at 550, 88 S. Ct. at 1226). We have further

concluded that disbarment proceedings are adversarial and quasicriminal in nature. S ee In re Thalheim

, 853 F.2d 383, 388 (5th Cir.

1988) (“Attorney disbarment and suspension cases are quasi-criminal61 -61- in character.”); In re Medran o , 956 F.2d 101, 102 (5th Cir. 1992)

(“A disbarment proceeding is adv ersarial and quasi-criminal in

nature and the moving party bears the burden of proving all elements

of a violation.”); s ee also In re Ruffalo

, 390 U.S. at 551, 88 S.

Ct. at 1226 (“These are adversary proce e dings of a quasi-criminal

nature.”). Consequently, while disbarment proceedings are “quasicriminal,” rat h er than purely criminal, we have consistently

rejected claim s that civil procedural protections are adequate to

meet due process requirements. See, e.g., In re Medrano

, 956 F.2d

at 102 (rejecting the district c ourt’s application of the

preponderance of the evidence standard in a disbarment proceeding);

United States v. Brown

, 72 F.3d 25, 29 (5th Cir. 1 995) (“Because

attorney suspension is a quasi-criminal punishment in character, any

disciplinary rules used to im p ose this sanction on attorneys must

be strictly construed resolving ambiguities in favor of the person

charged.”).

Furthermore, we must closely scrutinize the district c ourt’s

use of its inherent powers to insure that the court exercised such

powers wi t h restraint and discretion. “Indeed, the Supreme Court

has cautioned that ‘[b]ecause of their very potency, inherent powers

must be exercised with restraint and discretion.’” Chaves

, 47 F.3d

at 156 (quoting NASCO

, 501 U.S. at 44, 111 S. Ct. at 2132); see also

Natural Gas Pipeline Co. v. Energy Gathering, Inc. , 2 F.3d 1397,

1406-07 (5th Cir . 1993) (inherent powers must be exercised with

restraint and discretion and only sparingly so). “Disbarment being62 -62- the very serious business that it is, ample opp ortunity must be

afforded t o show cause why an accused practitioner should not be

disbarred.” T heard v. United States

, 354 U.S. 278, 282, 77 S. Ct.

1274, 1276-77, 1 L. Ed. 2d 1342 (1957); see also Ex parte Robinson

,

86 U.S. (19 Wall.) 505, 511, 22 L. Ed. 205 (1873) (“Be f ore a

judgment disbarring an att orney is rendered he should have . . .

ample opportunity of explanation and defence

. ”). At rock bottom,

“ample opportunity” to present a defense to a charge of disbarment

must include an impartial decision maker and, if one is needed, a

disinterested prosecutor. S ee, e.g., Bagwell

, 512 U.S. at 831-38,

114 S. Ct. at 2559-64; Young

, 481 U.S. at 800-06; NASC O , 894 F.2d

at 707-08.

II

A

As the S upreme Court explained in B agwell

, “[the] fusion of

legislative, executive, and judicia l powers [in inherent powers

proceedings] summons forth

. . . the prospect of the most tyrannical

licentiousness” and is “uniquely [] liable to abuse.” B agwell

, 512

at 831-33 , 114 S. Ct. at 2559-61. Accordingly, our jurisprudence

requires “progressively greater procedural protections ” when

sanctions have punitive characteristics (as they do here) and where

the conduct giving rise to the sanctions occurs outside the presence

of the court and re quires elaborate factfinding (as it did here).

See id. The Supreme Court explained that a district court must be63 -63- particularly circumspect in exercising its inherent powers when the

proceedings require elaborate factfinding:

For a discrete category of indirect contempt, however,

civil procedural protections may b e insufficient.

Contempts involving out-of-court disobedience to complex

injunction s often require elaborate and reliable

factfinding. C f. Green

, 356 U.S. at 217 n.33, 78 S. Ct.

at 660 n.33 (Black, J. dissenting) (citation omi tted)

(“Alleged contempts committed beyond the court’s presence

where the judge has no personal knowledge of the material

facts are especially suited for trial by jury. A hearing

must be he ld, witnesses must be called, and evidence

taken in any event. And often . . . crucial facts are in

close dispute”). Such contempts do not obstruct the

court’s ability to adjudicate the proceedings before it,

and the risk of erroneous deprivation from the lack of a neutral factfinder may be substantial.

Bagwell

, 512 U.S. at 833-34, 114 S. Ct. at 2560-61 (al teration in

original).

Here, as the majority’s recitation of the facts demonstrates,

the district court was required to make elaborate and detailed

factual findings after the presentation of conflicting testimony at

the sanctions proceedings (includi ng the testimony of the court’s

atto rney Ward). The conduct giving rise to the sanctions stemmed

from a series of complicated, out-of-court, off-the-record, and much

disputed events that occurred during settlement negotiations. In

fact, the district court conceded that prior to the sanction

proceedings, “the court knew none of the facts.” The district court

attempted to justify the appointment of plaintiff s’ attorney Ward

by explaining that “the appointment of an attorney was even more

i mportant because the court had absolutely no knowledge of the4 4 As I discuss infra at Part II.B, it is precisely because

the district court had no knowledge o f the factual basis for any

sanctions that the extended ex parte communications with Ward, as

well as Ward’s testimony as a factual witness at the proceedings,

violated the strictures of Young

, Bagwell , and NASCO

.

45 Although the majority concedes that “an initial

impression [of] Bagwell app ears to mandate” a reversal of the

district court’s faulty procedures for the disbarment proceedings,

see Op. at 25, the majorit y nonetheless approves the very

procedures that it concludes violate due process for the criminal

fines.

64 -64- factual basis for any charges for sanctions.” 44 Accordingly, under

Bagwell

, these sanction proceedings were the precise t y pe of

situation where the “risk of erroneous deprivation from the lack of

a ne utral factfinder” was substantial. 4 5 S ee id. Moreover, as I

discuss below, where the district court appointed a self-interested

prosecutor who c ontinued to represent the private plaintiffs,

c ommunicated ex parte (and secretly) with the court-app ointed

prosecutor, and allowed the prosecutor to testify as a fact witness

during the inherent powers p roceedings, “the mandated restraint

[was] lacking.” Chaves , 47 F.3d at 156.

B

In Young v. United States

, under facts decidedly similar to the

case at hand, the Supreme Court explained that “the appointment of

counsel for an interested par t y to bring the contempt prosecution

. . . at a minimum create[s] opportunities for conflicts to arise,

and create[s] at least the appearance of impropriety.” Y oung

, 481

U.S. at 806, 107 S. Ct. at 2137. The Court explicitly rejected the

argument, similar to the one made by the district court and accepted65 -65- by the majority, see Op. at 4 0 n.23, that appointment of opposing

counsel was justified because that person was most familiar with the

underlying events. The Court explained that:

The potential for misconduct that is created by the

appointment of an interested prosecutor is not outweighed

by the fact that counsel for the beneficiary of the court

order may often be most familiar with the allegedly

contumacious conduct. That familiarity may be put to use

in assisting a disinterested prosecutor in pursui ng the

contempt actio n

, but cannot justify permitting counsel

for the private par ty to be in control of the

prosecution.

Young , 481 U.S. at 806 n.17, 107 S. Ct. at 2137 n.17. In

unambiguous terms, the Court condemned the practice of appointing

a self-interested prosecutor in inherent power contempt proceedings:

“If a Justice Department attorney pursued a contempt prosecution for

violation of an injunction benefiting any client of that at t orney

involved in the underlying litigation, that attorney would be open

t o a charge of committing a felony . . . . Furthermore, such

conduct would violate the ABA ethical provisions, since the attorney

could not discharge the obligation of undivided loyalty to both

clients where both have a direct interest.” Y oung

, 481 U.S. at 805,

107 S. Ct. at 2136. The rule and principles set out in Y o ung

,

particularly in ligh t of Ward’s pending motion for private

sanctions, his extensive ex parte communications with the court, and

his testimony as a fact witness, are directly applicable to the case

at hand.

The majority attempts to “escape the mandate of Young ,” see Op.

at 36, by asserting that our decision in NASCO

, where we allowed the4 6 As the majority notes, Judge Scott was also the presiding

judge in the sanctions proceedings in NASCO ; thus , his own

concession that he knew all of the facts before the sanctions

proceedings in NASCO (and that he knew none of them in the case at

hand) is more persuasive than the majority’s assertion to the

contrary.

66 -66- use of opposin g counsel to present evidence on the amount of

attorneys’ fees, is “ largely dispositive” with regard to Ward’s

service as prosecutor. S ee Op. at 32. I disagree. First, in

attempting to draw a parallel to the case at hand, the majority

asserts that “the district court in NAS CO relied primarily on the

extensive factual development of the monetary sanctions proceeding

in finding Gray disbarrable.” S ee Op. at 35 n.19. The record, both

here and in NA SCO , completely refutes this assertion. Indeed, in

Judge Scott’s own opinion in this case, he explic itly states that

in NASCO the court did not have to rely on any factual development

because the court already knew all of the facts before the sanction

proceedings started: “This was a more serious case than NASCO v.

Chambers where the court knew all the facts before trial.” 46 Judge

Scott then explicitly distinguished the case at hand from NASCO

,

explaining that “[i]n this case the court knew none of the facts.

. . . [and] had absolutely no knowledge of the factual basis for any

charges for sanctions.”

Our own opinion in NASCO illuminates the fundamental

distinction between this case, wher e the sanctionable conduct

occurred out of court and required elaborate factfinding, and NASCO

,

where it did not: “Since the mi sconduct alleged occurred in the67 -67- court, there was no need for elaborate proof of the facts, and the

parties offered none.” N ASCO

, 894 F.2d at 707; see also id. at 708

(“There is no dispute that the app ellants did everything the

district court said they did.”). Thus, contrary to the majority’s

conclusion, NASCO cannot be read as support for the district court’s

appointment of an interested opposing counsel who simultaneously

testifies as a fact witness to the m uch-disputed, out-of-court

conduct of which the judge has no personal knowledge.

Additionally, in upholding the attorney suspensions in NASCO

,

we specifically distinguished Young on the grounds that “the danger

present in Young

, that private counsel would be overzealous in the

contempt proceedings in an effort to further the i nterest of his

client” was not present. S ee NASCO

, 894 F.2d at 707. We explained

that “[t]he arguments of counsel at the hearing were devoted

entirely to the issue of monetary sanctions [and] [t]he court relied

on it s own research . . . in determining the propriety of

nonmonetary sanctions [ i.e., suspension and disbarment].” N ASCO

,

894 F.2d at 707-08. Because the plaintiff’s attorney in N ASCO

played such a limited role in the sanction proceedings, we held that

“[t]he court thus avoided placing NASCO’s counsel in the role of

prosecutor for the disbarment proceedings.” I d. at 708. Here, we

cannot make the same conclusion. Indeed, if there is any case to

which the rule in Young applies, it is this one.

First, Ward undoubtedly had an interest in the court’s

sanct ions proceedings because he continued to represent the68 -68- plaintiffs in related civil proceedings and had his own private

motion for sanctions pending before the court at the same time. The

majority states that the case here “arguably p resents a far less

prob lematic scenario” than in N ASCO because Ward’s private motion

was merely pending during the course o f his investigation and

testimony for the court’s sanctions motion. See Op. at 37 n.21.

I cannot agree that this presents a “far less problematic scenario.”

In NASCO

, th e opposing counsel’s testimony related only to the

appropriate amount of attorneys’ fees to award; the proceedings did

not involve an interested private party arguing the sanctions motion

for the district court while he had his own private motion, as well

as related civil proceedings, pend ing before the court. The

fundamental prob lem that the Supreme Court recognized with the

appointment of an interested party to prosecute a serious contempt

is not diminished simply because the interested party has not yet

argued his private motion. Y oung prohibits the inherent conflict

of i nterest, and more importantly, the appearance of impropriety,

that arises w hen an interested private party prosecutes the

contempts. S ee Young

, 481 U.S. at 8 0 7, 107 S. Ct. at 2137

(“Regardless of whether the appointment of private counsel in this

case resulted in any prosecutorial impropriety (an issue on which

we express no opinion), that appointment illustrates the potential

for private interest to influence the discharge of public duty.”).

Moreove r, the district court compounded its error and the

appearance of impropriety by having extensiv e ex parte69 -69- communicati ons with Ward. S ee M ODEL C ODE OF J UDICIAL C ONDUCT Canon

3(B)(7) (1990) (“A judge shall not initiate, permit, or consider ex

parte communications, or consider other communications made to the

judg e outside the presence of the parties concerning a pending or

impending proceeding

. . . .”). Although the majority states that

the ex-parte contacts in this case were lim ited “to the most de

minimis and harmless procedural matters,” see Op. at 43, the record

belies this contention. The district court’s own opinion documents

several of the ex parte communications between Ward and the court:

Thereafter, we had several long conversations with Mr.

Ward trying to determine what action should be taken

addressing this matter and emphasizing the fact that the

court knew absolutely nothing of the alleged fraud in the

settlements . . . .

Naturally we called Ward on several occasions but he knew

of no facts to support his allegations of fraud.

We both felt that considering the experience and

character of the attorneys in this suit, a chance should

be giv en to those who were not involved to clear

themselves without being openly accuse d and forced to

defend themselves in court.

See Crowe v. Smith

, No. 92-2164, slip. op. at 32-33 (W.D. La. July

25, 1996).

More over, the district court gave Ward explicit instructions

not to disclose the nature of the e x parte communications to the

defendants and denied several motions by the defendants seeking to

be apprised of the nature of these communications. In light of the

three hats worn by plaintiffs’ attorney Ward ( i.e.

, prosecutor, fact

witness, and private attorney for the opposing party), the district70 -70- court’s secret ex parte communications with the private prosecutor

create an overwhelming appearance of impropriety. C f. Bagwell

, 512

U.S. at 833-34, 114 S. Ct. at 2560-61 (setting forth the

circumstances under which the risk of erroneous deprivation from the

lack of a neutral factfinder is substantial). The majority attempts

to avoid this conclusion by analyzing the e x parte communications

independently, as if they did not occur in the context of the

inherent powers contempt proceedin g where Ward was acting as the

prosecutor as well as testifying before the court. S ee Op. at 37-38

(“ With the exception of the issues of attorney testimony and e x

parte contacts discussed separately below, we can find no serious

deviation from the procedure expressly approved in NASCO

. . . .”).

Because inherent powers “must be exercised wi th restraint and

discretion,” NASCO

, 501 U.S. at 44, 111 S. Ct. at 2132, the majority

errs in failing to consider th e ex parte communications in the

ap p ropriate context and in conjunction with the other procedural

deficiencies.

The majority’s citation to the “extensive trad ition of

affording little or no weight to isolated e x parte contacts,” see

Op. at 41-43, n.24 & n.25, provides no support for approving the

extensive and secret ex parte communications in the case at hand.

Significantly, none of the cases cited by the majority involve the

district court’s exercise of its inherent powers. Furthermore, none

o f the cases involve ex parte communications with the attorney

acting as a private prosecutor for the court; none of the cases71 -71- involve ex parte communications with an attorney who had a private

sanctions motion and civil claims pending before the court; and none

of the cases include ex parte comm unications with an attorney who

also testified as a major fact-witness in the proceedings.

Finally, although Ward prosecuted the sanctions on beh alf of

the court, he also testified as a fact-witness during the disbarment

proceedings. For obvious reasons, the Rules of Professional Conduct

prohibit attorney testimony under most circumstances. S ee L OUISIANA

R ULES OF P ROFESSIONAL C ONDUCT Rule 3.7(a) (1995 ed.) (“A lawyer shall not

act as advocate at a trial in which the la wyer is likely to be a

necessary witness

. . . .”). Once again, the majority attempts to

analyze this error independently, instea d of in the context of

Young

, Bagwell

, and NA SCO . The majority cites a “wide swath” of

district court and bankruptcy cou rt cases for the general

proposition that the rule barring attorney testimony does not apply

when testimony is “made to a judge, not a jury.” S ee Op. at 38-40.

It is significant to note, however, that none of the cases cited by

the majority involve a testifying attorney who is al so the

prosecutor appointed by the court. The same fear that leads us to

bar attorney testimony in jury trials )) i.e. that the factfinder (the

jury) would tend to believe the testifying attorney mo re than an

ordinary witness )) applies when the testifying att orney represents

the factfinder (here, the court) rather than (as normal) a private

party. As the Supreme Court noted in B agwell

, “the risk of

erroneous deprivation from the lack of a neutral fact finder” is72 -72- greatest when, like here, the judge has no personal knowledge of the

material facts that are the basis for the sanctions. S ee Bagwell

,

512 U.S. at 834, 114 S. Ct. at 2560-61; see also id. at 831-32, 114

S. Ct. at 2559 (“Contumacy often strikes at the most vulnerable and

human qualities of a judge’s temperament, and it’s fusion of

legislative, executive, and judicial powers summons forth

. . . the

prospect of the most tyrannical li c entiousness.”) (internal

quotations and citations omitted) (alterations in original).

III

After a thorough search of the relevant case law, I have found

no case in which a district court used procedures like the ones here

to impose inherent powers sanctions, let alone where such procedures

were upheld on appeal. Particularly where the district court

appoints the interested opposing attorney to prosecute the contempt,

engages in secret ex parte communications with the attorney, and

allows the attorney to testify as a fact witness, this court errs

in condoning the district court’s use of its inherent powers. S ee

NASCO

, 501 U.S. at 44, 111 S. Ct. at 21 32 (“Because of their very

potency, inherent powers must be ex ercised with restraint and

discretion.”). In light of these unprecedented and unparalleled

procedures, I conclude that the district court failed to provide due

process in imposing the disbar ment, suspension, and reprimand

sanctions. In direct contradiction of our warning in N ASCO

, t h e

district court here “plac[ed] [plaintiff’s] counsel in the role of

prosecutor for the disbarment proceedings.” N ASCO

, 894 F.2d at 708.73 -73- Accordingly, I respectfully dissent from the majority’s affirmance

of the suspension of attorney-defendant Berry and its approval o f

the proceedings used in this case.