1

United States Court of Appeals,

Fifth Circuit.

No. 97-10030.

Debra WALKER, et al., Plaintiffs,

Debra Walker; Jeanette Washington; Hazel Williams; Zelma Lang;

Renita Brown, Lillie Thompson; Tracey Smith; PlaintiffsAppellees,

Thomas H. Peebles, Appellant,

v.

MESQUITE TX., CITY OF, et al., Defendants.

HIGHLANDS OF McKAMY IV and V Community Improvement Association,

et al., Plaintiffs,

v.

The HOUSING AUTHORITY OF THE CITY OF DALLAS, Defendant.

Dec. 10, 1997.

Appeal from the United States District Court for the Northern

District of Texas.

Before POLITZ, Chief Judge, and BENAVIDES and PARKER, Circuit

Judges.

POLITZ, Chief Judge:

Thomas Peebles, an attorney with the Department of Justice,

appeals an order of the district court sanctioning him for improper

litigation tactics. Concluding that we have appellate jurisdiction

and finding insufficient evidence to warrant the sanctions imposed,

we reverse.

Background

The underlying litigation is a suit against local and federal

authorities for violation of federal fair housing laws. Thomas

Peebles was principal trial counsel for the Department of Housing
 

1878 F.2d 899 (5th Cir.1989). 

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and Urban Development. As a result of litigation tactics employed

by Peebles the plaintiffs filed an unsworn document entitled

"Suggestion of Improper Conduct." In a memorandum opinion issued

on June 2, 1994 the trial court found the DOJ attorneys guilty of

"blatant misconduct." The DOJ filed a response on behalf of the

sanctioned attorneys. There was no further action until October of

1996 when the court deleted the findings of misconduct against all

attorneys except Peebles, restating its conclusion that Peebles

violated his obligation of candor. The court specifically declared

that no further action would be taken as relates to the sanction.

A formal order was filed on December 12, 1996 and Peebles timely

appealed.

Analysis

At the threshold we must determine whether we have appellate

jurisdiction. If we do, we must then determine whether the trial

court abused its discretion in sanctioning Peebles herein for a

lack of candor.

 As a general rule an attorney must await the end of

litigation in the district court to appeal a sanction. In Markwell

v. County of Bexar,1 however, we recognized an exception to this

rule in those situations in which the sanctioned attorney is no

longer involved in the case and an appeal of the sanctions order

would not impede the underlying litigation. The record reflects

that Peebles no longer is counsel in this action; he is now

assigned to a different division in the Justice Department.
 

2Clark Equipment Co. v. Lift Parts Manufacturing Co., Inc.,

972 F.2d 817, 820 (7th Cir.1992). 

 

3See Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 412, 110

S.Ct. 2447, 2464, 110 L.Ed.2d 359 (1990), where Justice Stevens,

concurring in part and dissenting in part, wrote: "Despite the

changes that have taken place at the bar since I left the active

practice 20 years ago, I still believe that most lawyers are wise

enough to know that their most precious asset is their professional

3

Consequently, Peebles need not defer until the end of this

litigation to appeal the district court's finding that he abused

his duty of candor.

Appellees contend that there is no Article III case or

controversy, and thus no jurisdiction, because the only possible

damage is to Peebles' reputation and that a diminished reputation

is not a cognizable injury under the fourteenth amendment. Because

the district court imposed no fine, service, or other punishment on

Peebles, it is appellees' contention that Peebles has not been

injured. In support of this proposition they cite an opinion from

a sister circuit stating: "[W]e have already decided that an

attorney may not appeal from an order that finds misconduct but

does not result in monetary liability, despite the potential

reputational effects."2

Stripped to essentials this proposition would maintain that an

attorney has more of a reason and interest in appealing the

imposition of a $100 fine than appealing a finding and declaration

by a court that counsel is an unprofessional lawyer prone to engage

in blatant misconduct. We reject this proposition out of hand,

being persuaded beyond peradventure that one's professional

reputation is a lawyer's most important and valuable asset.3 We
reputation." 

 

4See, for example, United States v. Schrimsher, 493 F.2d 842

(5th Cir.1974). In Schrimsher, an attorney appealed a contempt

conviction entailing a sentence to jail for two hours. No monetary

penalties were assessed and at the time of appeal the two hour

sentence had been served. In finding that the appeal should go

forward we said, "The conviction might damage [the attorney's]

reputation in the legal community, and this in turn might affect

his ability to attract clients and to represent them

effectively...." Id. at 844. 

 

5In addition, we have a strong interest in hearing cases such

as this because of our duty to assure that lawyers, as officers of

the court, live up to their ethical responsibilities. In the Rules

Enabling Act, Congress recognized the authority of the Judicial

Branch to control attorney discipline by giving the Supreme Court

the authority to prescribe the general rules of practice and

procedure in the federal court system. While this grant of

authority cannot be used to expand Article III power, it recognizes

the need for judicial power in the sanctions area. 28 U.S.C. §

2072 (1992). See also, David Scharf, The Settled Sanction: Post

Settlement Appeal and Vacatur of Attorney Sanctions Payable to an

Opponent, 61 U.Chi.L.Rev. 1627 (1994). When judicial power

imposing sanctions is exercised at the district level, review of

that exercise of power appropriately vests at the appellate level.

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have heretofore held that monetary penalties or losses are not an

essential for an appeal.4

In the case at bar Peebles was reprimanded sternly and found

guilty of blatant misconduct. That reprimand must be seen as a

blot on Peebles' professional record with a potential to limit his

advancement in governmental service and impair his entering into

otherwise inviting private practice. We therefore conclude and

hold that the importance of an attorney's professional reputation,

and the imperative to defend it when necessary, obviates the need

for a finding of monetary liability or other punishment as a

requisite for the appeal of a court order finding professional

misconduct.5 This appeal presents a reviewable appellate issue.
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 Our close review of the record in this somewhat troublesome

action persuades that although Peebles' tactics pushed the

litigation envelope to its outer limits, we are not prepared to say

that his litigation tactics descended to the level of professional

misconduct. The order of the district court holding to the

contrary is therefore REVERSED.