Court Opinion

ID: 2996325
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:27:34.526813+00
Date Added: 2024-06-11T11:45:29.398826
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                       ____________

No. 02-1334
UNITED STATES OF AMERICA,
                                          Plaintiff-Appellee,
                             v.

WILLARD JOHNSON,
                                                  Defendant,
                            and

H. WESLEY ROBINSON and NATIONAL
LEGAL PROFESSIONAL ASSOCIATES,
                                                  Appellants.
                       ____________
           Appeal from the United States District Court
               for the Southern District of Illinois.
       No. 00 CR 30024—G. Patrick Murphy, Chief Judge.
                       ____________
    ARGUED OCTOBER 30, 2002—DECIDED APRIL 24, 2003
                    ____________

 Before FLAUM, Chief Judge, and BAUER and DIANE P.
WOOD, Circuit Judges.
  BAUER, Circuit Judge. Hugh Wesley Robinson and
National Legal Professional Associates (“NLPA”) appeal
a district court order imposing monetary sanctions after
the court determined that Robinson and NLPA (together,
“Appellants”) were engaged in the unauthorized practice
of law in the Southern District of Illinois. For the reasons
set forth below, we find that the district court properly
2                                                  No. 02-1334

invoked its inherent power to investigate and sanction
Appellants’ conduct, but that it abused its discretion in
directing that certain fees paid for Appellants’ services
be returned and disbursed to a charity of the district
court’s choosing.

                      BACKGROUND
   Willard Johnson, the named defendant in this ap-
peal, was represented by court-appointed counsel, Philip
J. Kavanaugh III, during pretrial proceedings in the
Southern District of Illinois for federal drug-trafficking
charges. After Kavanaugh refused Johnson’s request that
Kavanaugh hire NLPA to assist him in the preparation
of Johnson’s defense, Johnson filed a complaint with the
Attorney Registration and Disciplinary Commission of
Illinois (“ARDC”). Consequently, Kavanaugh moved to with-
draw as Johnson’s counsel.
   At all times relevant for purposes of this appeal, NLPA
was an Ohio-based firm providing pretrial, sentencing,
and post-conviction consulting services, and Robinson
served as NLPA’s Administrative Director and Director
of Case Analysis and Research. In 1985, the Ohio Supreme
Court permanently disbarred Robinson from the practice
of law following a federal criminal conviction for mail
fraud.1 Robinson is not licensed to practice law in any
other jurisdiction. In order to market its paralegal ser-
vices, NLPA routinely provided criminal defendants with
literature explaining those services and the method by
which a defendant’s legal counsel might hire NLPA. Since

1
   Robinson was sentenced to three years in prison and five years
of probation for his role as the “mastermind” of a loan-placement
scam that defrauded its victims of over $720,000 during a three-
month period in 1980. United States v. Robinson, 774 F.2d 261
(8th Cir. 1985).
No. 02-1334                                                   3

NLPA was not a law firm, nor was Robinson (nor any
of NLPA’s consultants under his direction) a licensed at-
torney, NLPA’s services could comprise only part of the
client’s defense team under the supervision of a licensed
attorney. Though NLPA marketed itself directly to crim-
inal defendants as potential clients, and clients or their
families bore sole responsibility for paying NLPA’s fees,
only a defendant’s attorney had the ultimate authority
and discretion to hire NLPA.
  Johnson contacted NLPA in early 2000 after learning
of the organization from a fellow inmate at the St. Clair
County Jail, and Robinson replied by letter containing a
promotional brochure entitled, “Helpful tips you should
know when you’ve been BUSTED!” Convinced of the neces-
sity of Appellants’ services to the success of his de-
fense, Johnson insisted that Kavanaugh enlist NLPA’s
assistance. Relying on his own professional judgment,
however, Kavanaugh declined to associate himself with
Appellants, prompting Johnson’s disciplinary complaint
against Kavanaugh and Kavanaugh’s subsequent motion
to withdraw as Johnson’s counsel.
   In June 2000, Chief Judge G. Patrick Murphy2 heard
Kavanaugh’s withdrawal motion. Prior to excusing
Kavanaugh, the court inquired of, and Kavanaugh con-
firmed, Appellants’ involvement in the case. Concerned
that Appellants might have interfered with Kavanaugh’s
representation of Johnson, the court reacted as follows:
    Well I’ll tell you. This is about—there is a group from
    Cincinnati, and frankly, I’ve had them before, and

2
   Though Chief Judge Murphy was not installed as Chief Judge
of the United States District Court for the Southern District of
Illinois until October 2000, we refer to him here and throughout
as “Chief Judge Murphy.”
4                                                   No. 02-1334

    they’re, at best, dimwits, and they give advice to these
    defendants, who, God bless them, don’t know any
    better, and they muck up the cases, and they’re never
    here when you need them, and I’m full of it, and I’m
    going to prepare the necessary orders, and I’m going
    to have whoever they are in Court for practicing law
    here in Illinois through the mail. I’m going to have
    them here, and they’re going to be sitting right in front
    of me, and I’m going to have some questions of them.
   On July 11, 2000, pursuant to the district court’s inher-
ent powers, Chief Judge Murphy filed an order to show
cause why Appellants should not be held in contempt
of court for engaging in the unauthorized practice of law
and why the court should not issue a cease and desist or-
der against their practicing law in the Southern District
of Illinois. He further ordered Robinson to appear person-
ally at a hearing on the order to show cause and to bring
with him a list of all cases in the Southern District of
Illinois in which Appellants had advised criminal defen-
dants or contacted incarcerated defendants.3
   At the September 6, 2000, hearing on the order to show
cause, the district court heard evidence of Appellants’
conduct in connection with Johnson’s case and others be-
fore the U.S. District Court for the Southern District of
Illinois. Ultimately, the district court did not hold Appel-
lants in contempt, but it did determine that they had
engaged in the unauthorized practice of law in cases other
than Johnson’s. Chief Judge Murphy reasoned that the
practical effect of Appellants’ unsolicited marketing activi-
ties targeting criminal defendants was to interfere with

3
  On September 5, 2000, this Court denied Appellants’ (i) ap-
plication for a writ of mandamus to challenge the district court’s
July 11, 2000, order and (ii) emergency motion to stay further
district court proceedings.
No. 02-1334                                                       5

the attorney-client relationship.4 By making procedural
and strategic recommendations to clients, Appellants indi-
rectly pressured defense attorneys to pursue certain courses
of legal action. An attorney who refused to comply with
Appellants’ legal advice risked losing the confidence (and,
consequently, the employ) of his client.5 Chief Judge
Murphy characterized the situation as one “where the
NLPA is foisting their services on an unwilling attorney,”
effectively hijacking the professional decision-making
authority of defense counsel. The district court concluded
that, insofar as they created a practical reversal of the
traditional roles of supervising attorney and subordinate
paralegal, Appellants’ activities exceeded the scope of
their permitted paralegal function and reached the level
of practicing law.
  In an order entered on October 22, 2001, the district
court placed restrictions on Appellants’ permitted para-
legal activities in the Southern District of Illinois and
required Appellants to file a signed declaration of fees
received in exchange for unauthorized legal services,
totaling $22,177.00, to be paid into the court as a monetary

4
  Chief Judge Murphy further declared that “the business of
marketing to these defendants directly, who then come to their
lawyer and say, we want to file this, these days are over. I believe
that is a blatant practice of law.”
5
  In fact, Appellants’ marketing strategy is founded upon the
introduction into the mind of potential clients doubt as to
the competence of their attorneys. For example, one of NLPA’s
promotional brochures warns defendants that “you, and perhaps
even your attorney, are now sailing into previously uncharted
waters,” and suggests that NLPA’s services will protect defen-
dants from “mistakes most often made by defendants under
pressure from their own lawyers and the government.”
6                                                    No. 02-1334

sanction.6 In January 2002, the district court denied Ap-
pellants’ request for a reduction of the monetary sanction
and directed the Clerk of Court to disburse the returned
funds to family members of all but two of the defendants
listed in Appellants’ declaration of fees. For the remain-
ing two, either family members were unavailable or Ap-
pellants had not been retained by family members or an
attorney of record. The court directed that those funds,
totaling $7000, be disbursed to the Greater East St. Louis
Community Fund.7 The district court also discharged the
order to show cause and directed the Clerk to forward a
copy of the Memorandum and Order to the Disciplinary
Counsel of the Supreme Court of Ohio.
  Appellants contest the district court’s finding that they
engaged in the unauthorized practice of law and its im-
position of the monetary sanction.

6
  The order prohibited Appellants from (i) directly soliciting
criminal defendants or their families; (ii) sending promotional
materials to criminal defendants or their families; (iii) provid-
ing research or consulting services to any criminal defendant
without an authentic and bona fide request from defense coun-
sel; and (iv) supervising or purporting to supervise decisions of
defense counsel. The order further required Appellants, prior
to providing any services, (i) to obtain signed authorization
from defense counsel and (ii) to disclose fully to the defendant
and his family NLPA’s limited role as a strictly paralegal service.
7
   The Greater East St. Louis Community Fund was established
by U.S. District Judge William D. Stiehl in 1991 as a pecuniary
community service alternative to traditional criminal fines.
Money paid into the Fund is used to provide educational, health,
and other community services to citizens of greater East St. Louis,
Illinois. Judge Stiehl retains jurisdiction over the Fund.
No. 02-1334                                               7

                       ANALYSIS
  I. Invocation of Inherent Powers
  Appellants challenge the district court’s authority and
jurisdiction, pursuant to its inherent powers, to determine
that they engaged in the unauthorized practice of law
and to impose sanctions therefor. They argue that the
court’s investigation of and imposition of sanctions for
unauthorized practice unrelated to defendant Johnson’s
case exceeded the scope of its subject matter jurisdiction,
since any issue outside Johnson’s case did not amount to
a live case or controversy. Appellants further contend that,
in making a finding of unauthorized practice of law out-
side Johnson’s case, the district court usurped the state
statutory procedure for regulating the practice of law and
improperly assumed the “roles of complainant, prosecutor,
judge and jury.”
  Whether the district court properly invoked its inherent
powers is a question of law reviewable de novo. Kovilic
Constr. Co., Inc. v. Missbrenner, 106 F.3d 768, 771 (7th
Cir. 1997). The Supreme Court has characterized the in-
herent powers of a federal court as follows:
    It has long been understood that “[c]ertain implied
    powers must necessarily result to our Courts of justice
    from the nature of their institution,” powers “which
    cannot be dispensed with in a Court, because they
    are necessary to the exercise of all others.” For this
    reason, “Courts of justice are universally acknowledged
    to be vested, by their very creation, with power to
    impose silence, respect and decorum, in their presence,
    and submission to their lawful mandates.” These
    powers are “governed not by rule or statute but by the
    control necessarily vested in the courts to manage
    their own affairs so as to achieve the orderly and ex-
    peditious disposition of cases.”
8                                                No. 02-1334

Chambers v. NASCO, 501 U.S. 32, 43 (1991) (quoting
United States v. Hudson, 11 U.S. 21, 23 (1812); Anderson v.
Dunn, 19 U.S. 93, 103 (1821); Link v. Wabash R.R. Co., 370
U.S. 626, 630-631 (1961)). Though they are broad in scope,
“because of their very potency, inherent powers must
be exercised with restraint and discretion.” Chambers,
501 U.S. at 44.
  Key among the inherent powers incidental to all courts
is the authority to “control admission to its bar and to
discipline attorneys who appear before it,” id. at 43 (citing
Ex parte Burr, 22 U.S. 529 (1824)), and, as we have noted
previously, “a federal court has the inherent power to
sanction for conduct which abuses the judicial process.”
Barnhill v. United States, 11 F.3d 1360, 1367 (7th Cir.
1993). It follows logically that a federal court’s power to
regulate and discipline attorneys appearing before it
extends to conduct by nonlawyers amounting to practic-
ing law without a license.8 Moreover, considering the
serious threat that the unauthorized practice of law poses
both to the integrity of the legal profession and to the
effective administration of justice, resort to the inherent
powers (which, as we stated in United States v. Gian-
nattasio, 979 F.2d 98, 101 (7th Cir. 1992), are “rooted
considerations of institutional self-defense”) is an appropri-
ate remedial measure.
  Despite Appellants’ arguments to the contrary, the fact
that state law provides penalties for the unauthorized
practice of law does not limit by itself a federal court’s

8
   This logical extension of the inherent powers is consistent
with the Supreme Court’s reasoning in Roadway Express, Inc. v.
Piper, 447 U.S. 752, 766 (1980) (“The power of a court over the
members of its bar is at least as great as its authority over
litigants.”). This power must also extend to nonmembers of the
bar who nonetheless engage in unauthorized activities impact-
ing matters pending before a court.
No. 02-1334                                                         9

exercise of the inherent power to address the same
problem.9 This Court has suggested that the inherent
powers are proscribed to the extent that their exercise
conflicts with available constitutional and statutory provi-
sions. See, e.g., Corley v. Rosewood Care Ctr., Inc., 142 F.3d
1041, 1059 (7th Cir. 2002). The existence of controlling
statutory or constitutional authority alone, however, does
not preclude the court’s invocation of its inherent powers.
Chambers, 501 U.S. at 48. So long as the inherent pow-
ers are exercised in harmony with applicable statutory
or constitutional alternatives, then the latter need not
displace the former. G. Heileman Brewing Co. v. Joseph
Oat Co., 871 F.2d 648, 652 (7th Cir. 1989) (en banc). Here,
we find no conflict between the district court’s imposition
of sanctions pursuant to the exercise of its inherent power
and the state means of enforcing the requirement that
one obtain a license in order to practice law in Illinois,
noting the state provision explicitly reserving Illinois courts’
“inherent right to punish for contempt or to restrain the
unauthorized practice of law.” 705 ILL. COMP. STAT. 205/1-1
(1990).

9
    Illinois statute provides, in relevant part, as follows:
      Any person practicing, charging or receiving fees for legal
      services within this state, either directly or indirectly, with-
      out being licensed to practice as herein required, is guilty
      of contempt of court and shall be punished accordingly,
      upon complaint being filed in any Circuit Court of this State.
      Such proceedings shall be conducted in the Courts of the
      respective counties where the alleged contempt has been
      committed in the same manner as in cases of indirect con-
      tempt and with the right of review by the parties thereto.
      The provisions of this Act shall be in addition to other reme-
      dies permitted by law and shall not be construed to deprive
      courts of this State of their inherent right to punish for
      contempt or to restrain the unauthorized practice of law.
705 ILL. COMP. STAT. 205/1-1 (1990) (emphasis added).
10                                                     No. 02-1334

  Finally, we find no fault with the district court’s assump-
tion of the roles of complainant, prosecutor, judge, and jury
in reaching its determination that Appellants were en-
gaged in the unauthorized practice of law, since the court’s
inherent authority includes the “power to conduct inde-
pendent investigations in order to determine whether the
court has been the victim of fraud or deceit.” Winkler v. Eli
Lilly & Co., 101 F.3d 1196, 1200 n.2 (7th Cir. 1996). Any
unauthorized practice of law impacting federal court
proceedings necessarily raises the specter of interference
with that court’s function in a manner effectively indis-
tinguishable from fraud or deceit. The inherent power of
the federal courts is thus a proper basis for the imposition
of sanctions for the unauthorized practice of law.

     II. Unauthorized Practice Finding
  Appellants also challenge the sufficiency of the evidence
upon which the district court based its finding that they
engaged in the unauthorized practice of law. The issue
of whether Appellants engaged in the unauthorized prac-
tice of law requires us to examine, as a preliminary mat-
ter, what constitutes the practice of law.10 In Illinois, the

10
   One commentator has aptly described the practice of law in the
following general terms:
      Decisions indicate that the practice of law generally includes
      not only the conduct of litigation and appearances in court,
      but also the preparation of pleadings and other papers
      incident to any action or special proceeding in any court
      or other judicial body; conveyancing, the preparation of all
      legal instruments of all kinds whereby a legal right is
      secured, the rendering of opinions as to the validity or
      invalidity or the title to real or personal property, the giving
      of any legal advice, and any action for others in any mat-
      ter connected with the law.
                                                        (continued...)
No. 02-1334                                                   11

practice of law includes, at a minimum, representation pro-
vided in court proceedings along with any services ren-
dered incident thereto, even if rendered out of court. In re
Herrera, 194 B.R. 178 (Bankr. N.D. Ill. 1996); People v.
Peters, 141 N.E.2d 9 (Ill. 1957). More generally, providing
any advice or other service “requiring the use of any legal
skill or knowledge, . . . the legal effect of which, under the
facts and conditions involved, must be carefully deter-
mined,” amounts to practicing law. Peters, 141 N.E.2d at
11. Only under the direct supervision of a licensed attor-
ney may certain of these functions be performed by a
paralegal. Absent the imprimatur of meaningful attorney
supervision, any legal advice or other legal service pro-
vided by a nonlawyer constitutes the unauthorized prac-
tice of law.
  What the district court found problematic about
Appellants’ activities was not the performance of those
permitted paralegal functions. The preparation of pretrial
motions and other services offered by Appellants, includ-
ing recommendations vis-a-vis litigation strategy, might
have been permissible if performed at the request and
under the direction of a lawyer.11 Rather, what troubled
Chief Judge Murphy was the reality that Appellants
operated without—and, in some cases, in contravention
of—attorney oversight. Appellants’ promotional literature
alone, while not the only evidence upon which the dis-
trict court relied, is a sufficient evidentiary basis for find-
ing that Appellants’ conduct improperly inverted the at-

10
  (...continued)
Comment, Unauthorized Practice of Law: Remedial Procedures, 1
DEPAUL L. REV. 108 (1952) (internal citation omitted).
11
  In fact, the prospective restrictions on Appellants’ conduct in
the Southern District of Illinois set forth in the October 2001
order suggest as much.
12                                                    No. 02-1334

torney-client-paralegal dynamic.12 Once Appellants, through
their aggressive marketing techniques, undermined a
defendant’s confidence in his or her counsel, and then
exploited those doubts to make strategic recommenda-
tions to—and, in the words of the district court, “to foist
their services upon”—both client and counsel, any appear-
ance of attorney supervision became meaningless. The
district court therefore properly determined that Appel-
lants were engaged in the unauthorized practice of law.

     III. Imposition of Sanctions
  Having determined the propriety of the district court’s
invocation of its inherent powers and its finding of unau-

12
   The following passage from NLPA’s promotional materials is
illustrative:
      A word of warning: If, after having reviewed this infor-
      mation, you are interested in having [NLPA] assist your
      counsel with your case, keep in mind that many attorneys
      become extremely paranoid when they know that their
      client is considering asking NLPA to become involved in
      working on the “defense team.” [I]f your attorney appears
      reluctant to have NLPA become involved, or if he tells you
      he “knows everything” and that there is nothing NLPA could
      bring to your defense team, you need to give serious
      thought to his real motive for making such a statement . . . .
      Keep in mind, this is your life and you as the defendant
      have every right to have as much assistance from any
      source that you deem appropriate. [sic] Your attorney
      works for you, you do not work for him. Therefore, should
      you decide to have NLPA assist you, when you speak with
      your attorney about this matter, be firm in explaining to
      him that although you appreciate all that he is doing to
      try and help, you want to have NLPA involved in the case
      and that you, as his client, are instructing him to work
      with us.
(Emphasis in original).
No. 02-1334                                               13

thorized practice of law, we now review the sanctions
specifically imposed, which we will set aside only upon a
finding that the district court abused its discretion. Cleve-
land Hair Clinic, Inc. v. Puig, 200 F.3d 1063, 1066 (7th
Cir. 2000).
  Because the inherent powers are so broad in scope, they
are to be narrowly tailored in their application. Chambers,
501 U.S. at 44-45 (stating that discretion requires a
court “to fashion an appropriate sanction for conduct
which abuses the judicial process.”); see also Diettrich v.
Northwest Airlines, Inc., 168 F.3d 961, 964 (7th Cir. 1999)
(stating that, when resorting exercise of the inherent
power, “as in all cases, the punishment must fit the
crime.”). In other words, a federal court’s wide discretion
as to whether to invoke the inherent powers is tempered
by its rather limited discretion as to how it exercises them.
Careful, case-specific consideration is owed therefore not
only to the character of the sanctionable conduct, but
also to the nature and purpose of the sanctions.
  Of particular relevance here is the apparent absence of
any bad faith on the part of Appellants, despite the
dubiousness—both legally and ethically—of their “para-
legal” activities. Generally, the harshest of sanctions based
on inherent powers have been upheld only in situations
involving bad faith, contumacy, or egregious misconduct.
Chambers, 501 U.S. at 45-46; see also Kovilic, 106 F.3d
at 773. Conversely, misconduct that is merely question-
able warrants a less severe sanction (no matter how
“dimwitted” the offenders or how badly they “muck up the
cases”). In its finding that Appellants were engaged in the
unauthorized practice of law, the district court did not
indicate that they acted in bad faith; nor do we discern
any such indication. Moreover, we note that the record of
the district court proceedings reflects Appellants’ sustained
cooperation throughout. These factors militate in favor
of imposing more moderate sanctions and, in fact, may
14                                                     No. 02-1334

have influenced the district court’s decision to discharge
the order to show cause without a contempt finding.
  Appellants argue, and we agree, that the imposition of
punitive sanctions is inconsistent with a finding that they
were not in contempt of court. This argument begs the
central question of our inquiry into the purpose and na-
ture of the sanctions: Are the monetary sanctions im-
posed here punitive in nature?13 Had Chief Judge Murphy
held Appellants in contempt of court, as he might have,
this Court could have inferred some punitive intent on
his part.14 Instead, as we noted above, he placed prospec-
tive restrictions on their activities and ordered the return
of fees received. To the extent that these measures are
remedial in nature, we find that the district court acted
within its discretion. The restrictions and the return of
fees to clients or their families are consistent with this
finding. However, we regard the order to disburse certain
fees to the Fund, insofar as it does not compensate the
individuals who paid for unauthorized legal services, and
in light of the purpose of the Fund, to be punitive in na-
ture. In short, the fees to be disbursed to the Fund amount
to a $7000 fine. Considering that (i) the district court
made no contempt finding, (ii) Appellants’ misconduct
was not in bad faith, and (iii) the sanctions imposed tend
to be more remedial than punitive with the exception of

13
  Rather than raise this question, Appellants simply argue
that the imposition of punitive sanctions in the absence of a
contempt finding amounts to a violation of their constitutional
right to due process. However, because we find that the punitive
sanctions exceed the discretion of the district court, and modify
them accordingly, we need not reach the constitutional issue.
14
  Leaving aside for the moment the various distinctions in the
law of contempt of court (civil, criminal, direct, constructive,
etc.), we note only that contempt is a possible indicator of a court’s
intent to punish.
No. 02-1334                                               15

the $7000 ordered to be disbursed to the fund, we find that
the district court abused its discretion with respect to that
amount. In a manner consistent with the disposition of
this appeal, the Clerk of Court for the Southern District
of Illinois is hereby directed to return $7000 to Appellants.

                     CONCLUSION
  The district court properly invoked its inherent powers to
determine that Appellants were engaged in the unautho-
rized practice of law in the Southern District of Illinois
and to impose remedial sanctions therefor. However, the
court abused its discretion in imposing punitive sanctions
in the amount of $7000. For these reasons, we AFFIRM the
orders of the district court in part, and REVERSE that
portion of its order directing Appellants to pay into the
court, and the Clerk of Court to disburse to the Fund, $7000
in fees received.

A true Copy:
      Teste:

                        ________________________________
                        Clerk of the United States Court of
                          Appeals for the Seventh Circuit

                   USCA-02-C-0072—4-24-03