In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 06-1878

MICHAEL WADE,

Plaintiff-Appellant,

v.

SOO LINE RAILROAD CORPORATION and

CANADIAN PACIFIC RAILWAY COMPANY,

Defendants-Appellees.

GEORGE T. BRUGESS,

Appellant.

____________

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 03 C 3922—James B. Zagel, Judge.

____________

ARGUED MAY 23, 2007—DECIDED AUGUST 29, 2007

____________

Before EASTERBROOK, Chief Judge, and BAUER and

MANION, Circuit Judges.

EASTERBROOK, Chief Judge. Michael Wade alleged that

he was permanently injured while operating a handbrake

on the Soo Line Railroad. (The Soo Line is a subsidiary of

the Canadian Pacific Railway. It is not clear from the

record which company is Wade’s employer; because

nothing turns on the issue, we refer to both collectively

as the Soo Line.) Wade brought this action under the

Federal Employees Liability Act, 45 U.S.C. §§ 51–60,
2 No. 06-1878

seeking damages for medical expenses, lost wages, and

pain and suffering. The district court never reached the

merits of Wade’s claims, however; it dismissed the suit,

with prejudice, as a sanction for misconduct by Wade’s

lawyer, George Brugess. It also ordered Brugess to pay

more than $110,000 to reimburse Soo Line’s fees and costs.

Wade was treated for his injuries by Michael R. Treister

and Chang Sun Kim, two orthopedic specialists at Treister

Orthopedic Services (TOS). Wade listed Dr. Treister as a

treating physician in an answer to Soo Line’s interrogatories. That made him a potential fact witness, and Soo Line

accordingly subpoenaed TOS, seeking its “entire file

pertaining to Michael Wade”. TOS produced what purported to be its entire file, but at Dr. Kim’s deposition Soo

Line’s attorney Daniel Mohan noticed that Kim’s copy of

the file was thicker than the one that had been produced

in discovery. Mohan examined Kim’s file, saw several

documents that had not been produced, and requested a

copy of the complete file. The attorneys took a 20-minute

break. An aide from Kim’s office took the file for copying

and, when the file was returned, some of the previously

missing documents were included in the copy—but two

had disappeared from Kim’s file and were not in the

copy made for Mohan. The record does not show who

removed these documents from the file, but we do know

that Brugess was at the deposition and that Wade’s

counsel had the opportunity to control the events.

Soo Line promptly subpoenaed Dr. Kim and all staff

members who had been on duty during the deposition,

seeking the missing documents. On January 4, 2005, six

days after the deposition, TOS faxed the missing documents to Brugess—but not to Soo Line, the party that had

subpoenaed them. Brugess sat on them. When a week had

passed with no answer to its subpoena, Soo Line filed a

motion to compel production (miscaptioned as a motion for

a “protective order”). The district court granted this mo-
No. 06-1878 3

tion on January 10 and sent the order to TOS and to

Brugess on January 13. Brugess did not turn over the

documents until January 25, well after the deadline.

Five documents were at issue: three that TOS had not

revealed until Dr. Kim’s deposition, and two that TOS

and Brugess withheld even after Soo Line learned of

their existence. These were highly probative records

that should have been produced much earlier. The district

court called them “smoking guns”. One was an intake

form on which Wade checked “no” in answer to the questions “Was the condition being treated the result of an

accident or injury?” and “Do you feel that another party

is responsible for this accident or injury?” Two more of

the documents related to an undisclosed physical examination that Dr. Treister performed at the request of

Wade’s law firm, Hoey & Farina; in one Dr. Treister

stated, “I do not on physical examination see any evidence

of objective pathology requiring treatment at this time.”

The two documents removed from the file during

Dr. Kim’s deposition were particularly damaging. One

was a “collections system detail report” detailing billing

activity on Wade’s file. It included an entry, signed by

Dr. Treister, reading:

Atty Brugess called, states he is aware that we are

just making penny for a dollar billed thru United

Health which we have a contract with, he make a

proposal to bill him for the balance showing that

we did review of record for such $ amt. then he

will include that in the settlement or pay us up

front for that charge. Asked him for the risk that

we might encounter (fraud) in the future. He

states it happened so many times, & that is the

only way we will get our bills paid in full. He will

provide proper documentation like he will request

for record review then we charge him & he will

pay.
4 No. 06-1878

Brugess’s proposal was problematic in part because,

according to a contract with United Healthcare that TOS

produced in discovery, TOS had agreed to accept a reduced rate and not to collect further amounts from anyone

else. The document also included a statement that “Patient

was referred to TOS by Atty Downes office”, which contradicted Wade’s statement that he had been referred by a

friend.

The other particularly damaging document was a note

from Dr. Treister to an employee at TOS. It began:

George Brugess from Hoey & Farina sent me a

disability form to fill out on Michael Wade.

This is a real problem. Can you call him and read

him this unofficial note???? I don’t think I will

have time until late in the week.

I have gone through the chart really carefully.

Then, after summarizing Wade’s treatment history at TOS,

the note concluded (second ellipses in original):

Problem here—how do I indicate disability when

basically examination is normal and there is no

atrophy or any other really objective findings?

. . .

So I just don’t think there is anything that I can

write down which would be helpful rather than

harmful. Does George Brugess have any ideas?

I think it is best that I just file the chart and he

try to resolve the case. . . I probably cannot get

back to him until later in the week, but wanted

you to report my thoughts. This note can be

staple[d] unofficially to the outside of the chart. It

is NOT a report and NOT a progress note.

Once Soo Line finally received copies of these documents,

it moved for sanctions pursuant to Fed. R. Civ. P. 37(c)(1).
No. 06-1878 5

Soo Line argued, first, that Brugess and his firm made

improper payments to TOS to influence its diagnosis of

Wade, and, second, that Wade had tried to conceal these

damaging documents and, even after being caught, tried to

conceal them again and, when their absence was detected

once more, tarried in turning them over. The district

court concluded that the money was payment for an

independent medical examination rather than a kickback,

and while “not per se improper”, was “certainly an unsavory ‘sweetening of the deal.’ ” The court ruled that,

although the payments did not themselves merit sanctions,

failure to turn over highly relevant documents justified

not only dismissal with prejudice but also an order requiring Brugess to pay Soo Line’s fees and costs. In the

district court’s view, the dismissal would not hurt Wade,

because “[g]iven the documents uncovered by Mohan, the

grant of summary judgment for Soo Line is almost a

foregone conclusion.”

The main argument on appeal is that $110,000 is too

much. Soo Line sought sanctions on account of Wade’s

failure to disclose damaging documents as well as the

payments to TOS, but it prevailed on the first argument

only. Brugess argues that the district court had to “apportion” any sanction between the successful and unsuccessful

grounds. Hensley v. Eckerhart, 461 U.S. 424 (1983), holds

that attorneys’ fees awarded pursuant to 42 U.S.C. §1988

must be apportioned: if a plaintiff brings two distinct

claims in one lawsuit but prevails on only one, the court

must award only the fees incurred in prosecuting the

successful claim. Divane v. Krull Electric Co., 319 F.3d 307

(7th Cir. 2003), applies this principle to attorneys’ fees

awarded as sanctions under Fed. R. Civ. P. 11. A plaintiff

who brings distinct claims, one of which is sanctionable,

can be ordered to pay attorneys’ fees incurred in defending

the frivolous claim—but not those incurred in defending

non-sanctionable claims. Sanctions in the form of attor-
6 No. 06-1878

neys’ fees are analogous to damages in a tort case, so the

party that misbehaved pays for the injury caused by the

misconduct. When a factually independent part of the

case is entirely legitimate, there is no justification for

extending the sanction to cover that part. See also

Maynard v. Nygren, 332 F.3d 462, 471 (7th Cir. 2003)

(applying the causation principle to attorneys’ fees

awarded under Rule 37(c)).

It’s one thing to distinguish between factually unrelated

claims brought in a single suit because the federal rules

permit joinder of unrelated claims, and quite another to

apply this principle to related accusations of misconduct

concerning one claim. Soo Line advanced two theories in

support of one goal: dismissal of the litigation. It achieved

this goal. Brugess asserts that the multiple grounds on

which Soo Line sought sanctions are different “claims” as

Hensley and Divane use that term, but that’s not so. A

separate “claim” is an argument for additional relief for

a distinct wrong.

Soo Line thought that Hoey & Farina was making underthe-table payments to Dr. Treister and TOS; the evidence

for this accusation came from the documents TOS and

Brugess avoided turning over. The harm caused by

Brugess’s failure to turn over documents is not readily

distinguishable from the harm that would have been

caused by side payments to TOS: both would delay resolution of the lawsuit and cause Soo Line to incur unnecessary fees. That the district court saw only one kind of

misconduct in the withheld documents does not excuse

Wade or Brugess from paying for the harm caused by the

misconduct.

This assumes that the entire $110,000 is attributable to

the misconduct. That amount was Soo Line’s entire cost

of defending the case until the entry of the sanctions order,

and Wade and Brugess assert that it cannot represent the
No. 06-1878 7

actual harm. Indeed, the district court had found that

the harm was limited to expenses incurred after the date

when the documents should have been handed over. The

district court entered three orders concerning the amount

of sanctions. The first granted the motion for sanctions,

leaving the amount open until Soo Line submitted a

statement of its fees and costs. Soo Line did so, and in

the second order the court held that Soo Line was entitled

to fees and expenses incurred only after January 4, 2005.

The district court gave Wade’s counsel time to file objections to specific items in Soo Line’s requests. Brugess

squandered this opportunity, arguing yet again that

sanctions were inappropriate but not addressing any of

Soo Line’s line items. The district court then ordered

Brugess to pay all $110,000—a sum that included expenses

from before January 4 (when TOS gave him copies) and

indeed before they should have been furnished in response

to the original discovery request for the medical file.

(January 4 was already long past time for disclosure.)

The district court had ruled that Soo Line was not

entitled to expenses incurred before January 4, which may

explain why Brugess did not object to earlier entries in Soo

Line’s itemization, though it is hard to fathom why he

would have failed to remind the judge that Soo Line had

not followed the court’s instructions. For its part, Soo Line

did not resubmit a list of expenses limited to those incurred after January 4—but then, no one asked it to.

Brugess did object to the way some of the expenses had

been calculated, and the district court ruled on those

objections, but the court never mentioned its 180-degree

turn on pre-January 4 expenses. Maybe there is a good

explanation: perhaps the court decided that the suit

itself was frivolous or vexatious. See Kapco Manufacturing Co. v. C&O Enterprises, Inc., 886 F.2d 1485 (7th Cir.

1989). But the court had rejected these possibilities in the

second order, and nothing obvious had happened in the
8 No. 06-1878

meantime that might explain the change. An equally

plausible explanation is that the judge simply lost track

of the need to calculate a subset of the fees. Since we

have no way of knowing whether the district court intended to award Soo Line fees for the entire case, and if so

what its justification was, this part of the sanctions order

must be revisited on remand.

As for the dismissal of the suit: the district court observed that “the dismissed claim appears to have had

little merit or chance of success.” Wade takes this to mean

that the district court reached the merits and concluded

that he could not show an injury; he responds that,

although the withheld documents may show that he is not

entitled to damages for permanent injuries, they do not

foreclose the possibility that he might recover for loss

during the year in which he now says that he was temporarily disabled. Yet the district court did not reach the

merits; it dismissed the case as a sanction for misconduct.

The quoted statement was little more than an aside. If

Wade has a claim, his remedy now is a malpractice suit

against Brugess and his law firm.

The district court recognized that dismissal should not

be used lightly. The punishment should fit the crime, so

fees and fines—which can be scaled as appropriate—often

are the best sanctions. Maynard, supra; Ball v. Chicago,

2 F.3d 752 (7th Cir. 1993); cf. Greviskes v. Universities

Research Association, Inc., 417 F.3d 752 (7th Cir. 2005).

Maynard held that dismissal is an appropriate sanction

for a violation of Rule 37 only when there is “clear and

convincing evidence of willfulness, bad faith or fault”, 332

F.3d at 468. We doubt that “clear and convincing” evidence

is required; the Supreme Court held in Grogan v. Garner,

498 U.S. 279 (1991), that heightened burdens of proof do

not apply in civil cases unless a statute says so or the

Constitution requires an elevated burden. See also Herman
No. 06-1878 9

& MacLean v. Huddleston, 459 U.S. 375 (1983). Soo Line

has not, however, asked us to revisit Maynard (which did

not discuss the Supreme Court’s decisions) and use the

preponderance-of-the-evidence standard, perhaps because

the evidence of bad faith is manifest. As the district court

put it: “If the faxed documents were not enough to get

[Brugess’s] attention, the point should have been brought

home when he received a copy of Defendant Soo Line’s

motion for a protective order in which Mohan accurately

described [the missing documents].”

Wade didn’t assert a privilege or even say that the

documents had been withheld by mistake. The district

court could and did conclude that Brugess (or someone

else on the plaintiff’s legal team) deliberately concealed

documents known to favor the adversary; that’s sufficient

evidence of bad faith. Attorneys’ actions are imputed to

their clients, even when those actions cause substantial

harm. A litigant bears the risk of errors made by his

chosen agent. E.g., Pioneer Investment Services Co. v.

Brunswick Associates L.P., 507 U.S. 380, 396–97 (1993);

Johnson v. McBride, 381 F.3d 587 (7th Cir. 2004); United

States v. 7108 West Grand Avenue, 15 F.3d 632 (7th Cir.

1994). Sanctions for misconduct are within the discretion

of district judges, National Hockey League v. Metropolitan

Hockey Club, 427 U.S. 639 (1976); In re Golant, 239 F.3d

931 (7th Cir. 2001), and dismissing this case was not

an abuse of discretion.

Finally we come to Brugess’s argument that he should

not have to pay any of Soo Line’s fees because he, as an

attorney rather than a party, is not liable under Fed. R.

Civ. P. 37(c). That rule permits fee shifting when a party

fails to make disclosures required by various parts of Fed.

R. Civ. P. 26. Insurance Benefit Administrators, Inc. v.

Martin, 871 F.2d 1354, 1360 (7th Cir. 1989), held that

because Rule 37(c) “by its express terms applies only to
10 No. 06-1878

parties, and not to attorneys, [ ] it may not be the basis

for sanctions against an attorney.” Accord, Maynard,

332 F.3d at 470. Brugess did not make this argument

in the district court, however; had he done so, the judge

could have given a different justification for holding him

personally liable. Several alternative bases are plausible:

the district court might have used its inherent authority to

sanction attorneys, see Chambers v. NASCO, Inc., 501 U.S.

32, 49 (1991); Dotson v. Bravo, 321 F.3d 663, 667–69 (7th

Cir. 2003), or relied on 28 U.S.C. §1927 (unreasonable and

vexatious multiplication of proceedings) or Fed. R. Civ. P.

26(g)(3) (false certification of compliance with the discovery rules). Because he never raised the issue, Brugess has

forfeited the benefit of appellate review on the issue; at

oral argument he also expressly withdrew the argument.

So we need not consider the application of Rule 37(c).

A corollary of Brugess’s argument, however, is that Wade

must pay the fees personally. That argument puts

Brugess’s interests (and, indirectly, his law firm’s) in

conflict with his client’s, which puts Brugess and his firm

on the wrong side of their professional obligations. Local

Rule 83.51.7(b) of the Northern District of Illinois provides:

A lawyer shall not represent a client if the representation of that client may be materially limited

by the lawyer’s responsibilities to another client or

to a third person, or by the lawyer’s own interests,

unless:

(1) the lawyer reasonably believes the representation will not be adversely affected; and

(2) the client consents after disclosure.

Accord, Illinois Rule of Professional Conduct 1.7(b). (All of

Wade’s attorneys are members of the Illinois Bar.)

It is not possible to believe that Brugess’s and his firm’s

representation of Wade “will not be adversely affected” by
No. 06-1878 11

their own conflicting interests when Brugess and his firm

are making arguments that go directly against their

client’s interests. This issue is zero-sum: if Brugess

prevails, the monetary sanction is shifted to Wade. And

Brugess conceded at argument that Wade did not consent to the making of an argument that, if accepted, would

have saddled him with a $110,000 judgment. His lawyers

just ignored the conflict and argued in their own interests.

Maybe Wade could have shifted the expense to Brugess

in turn. A lawyer whose misconduct results in sanctions

against his client has committed malpractice; if Wade

did end up liable on account of Brugess’s misconduct, he

would have a claim against Brugess for (at least) the

amount of the sanctions. (Why make the argument in the

first place, then? Does it affect whether Hoey & Farina’s

malpractice insurer pays?) The possibility that Wade could

shift the cost of the sanctions back onto Brugess, however,

does not mean that Wade has nothing at risk from his

lawyers’ argument. If Brugess had agreed to indemnify

Wade for any sanctions assessed against him (and Brugess

were sure to be solvent), then there would be no conflict,

but that doesn’t seem to have happened. We learned after

argument that Wade and Hoey & Farina had negotiated

toward a settlement of Wade’s possible malpractice claim,

but apparently no settlement was reached. For all we know

Brugess intends to fight any attempt to collect the monetary sanction from him.

When we asked Brugess at oral argument about the

conflict of interest, he noted that Wade had additional

representation after the district court’s decision. Wade’s

supplemental lawyer, Robert A. Montgomery, apparently

engaged to negotiate toward settlement of Wade’s potential

malpractice claim, told us by an affidavit filed after

argument that Wade had consented to the filing of a joint

brief with Brugess. Yet the only lawyers listed on Wade’s

two briefs are Steven P. Garmisa, George T. Brugess,
12 No. 06-1878

Richard A. Haydu, and Frank E. Van Bree, all of Hoey &

Farina. Circuit Rule 26.1 requires all attorneys representing a private party to file a disclosure statement giving,

among other things, the names of all firms that represented that party in the trial court or are expected to do

so in the court of appeals. While four attorneys from Hoey

& Farina filed statements under the Rule, none of them

listed any other firm. And while the Rule requires that

“[e]very attorney for a non-governmental party or amicus

curiae . . . must file a statement under this rule”, Cir. R.

26.1(a), Montgomery did not file a disclosure statement.

Fortunately his role, at last revealed, has not caused a

belated recusal.

Montgomery’s affidavit stated that he had read the final

brief—complete with an argument that would leave Wade

personally responsible for any financial sanction—and “did

not feel that corrections, deletions, or additions needed

to be made.” His affidavit does not say that he consented

on Wade’s behalf to this conflict of interest (or had authority to do so), that he discussed the brief’s contents with

Wade, or that he thought the brief’s arguments to be in

Wade’s best interests. Montgomery’s failure to look after

his client’s welfare, however, does not excuse Brugess’s

and his partners’ violation of their duty to place their

client’s well-being above their own. His negligence doesn’t

justify their misconduct.

The Northern District of Illinois has specific rules for the

practice of law. This court has not enacted similarly

detailed regulations, but Fed. R. App. P. 46 permits us to

discipline an attorney for violation of any court rule or for

any other conduct unbecoming a member of the bar. E.g.,

In re Bagdade, 334 F.3d 568 (7th Cir. 2003); cf. United

States v. Johnson, 327 F.3d 554, 559–61 (7th Cir. 2003)

(discussing a court’s authority to control admission to

its bar and discipline attorneys who appear before it).

This authority to regulate membership in the court’s bar
No. 06-1878 13

protects litigants from careless or unethical acts by their

attorneys. See In re Cook, 49 F.3d 263 (7th Cir. 1995).

Arguments designed to protect the attorney at the expense

of the client are precisely the sort of acts that invite

discipline. An attempt to defraud the court (and the

defendant) by withholding vital documents has been

compounded by an effort to make the client bear the

consequences.

The judgment of the district court is affirmed except for

the amount of fees and costs awarded to Soo Line; that

portion of the judgment is vacated and remanded for

recalculation. Wade’s attorneys, Steven P. Garmisa,

George T. Brugess, Richard A. Haydu, Frank E. Van Bree,

and Robert A. Montgomery, are ordered to show cause

by September 19, 2007 why they should not be disciplined

by this court pursuant to Fed. R. App. P. 46(b)–(c) for

conduct unbecoming members of the bar. We will forward

a copy of this opinion to the Northern District of Illinois

and the Attorney Registration and Disciplinary Commission of Illinois for such consideration as they deem appropriate.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—8-29-07