Court Opinion

ID: 9352365
Source: CourtListenerOpinion
Date Created: 2023-01-05 21:00:42.096879+00
Date Added: 2024-06-11T17:01:43.419833
License: Public Domain

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                                              UNPUBLISHED

                                   UNITED STATES COURT OF APPEALS
                                       FOR THE FOURTH CIRCUIT

                                                No. 20-9505

        In the Matter of Jason Edward Rheinstein, Esquire,

                                Respondent.

                                                No. 21-1176

        In re: JASON EDWARD RHEINSTEIN,

                                Appellant.

        ------------------------------

        LYDIA E. LAWLESS,

                       Court-Assigned Amicus Counsel.

        Appeal from the United States District Court for the District of Maryland, at Baltimore.
        James K. Bredar, Chief District Judge. (1:20-mc-00053)

        Argued: October 27, 2022                                       Decided: January 4, 2023

        Before DIAZ, THACKER, and QUATTLEBAUM, Circuit Judges.

        Unpublished per curiam opinion imposing reciprocal disbarment in No. 20-9505 and
        affirming district court decision to impose reciprocal discipline in No. 21-1176.
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        ARGUED: Lydia E. Lawless, ATTORNEY GRIEVANCE COMMISSION OF
        MARYLAND, Annapolis, Maryland, for Court-Assigned Amicus Counsel. Jason E.
        Rheinstein, Severna Park, Maryland, for Respondent.

        Unpublished opinions are not binding precedent in this circuit.

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        PER CURIAM:

               Jason Edward Rheinstein, who was disbarred from the practice of law in Maryland,

        appeals the district court’s decision reciprocally disbarring him in that court.         We

        consolidated his appeal with an original action in this court, in which we consider whether

        we should impose our own reciprocal disbarment. Finding no due-process violation,

        infirmity of proof, or other “grave reason” for ignoring the state bar’s decision, Selling v.

        Radford, 243 U.S. 46, 51 (1917), we reciprocally disbar Rheinstein. And we hold that the

        district court didn’t abuse its discretion in doing the same.

                                                      I.

                                                      A.

               We begin by summarizing Rheinstein’s disciplinary proceedings in Maryland.

                                                      1.

               On April 22, 2016, Rheinstein was served with the Attorney Grievance

        Commission’s Petition for Disciplinary or Remedial Action. The Commission filed the

        Petition in Maryland’s Court of Appeals (now named the Supreme Court of Maryland),

        and that court assigned the matter to the Circuit Court for Anne Arundel County, per

        Maryland’s disciplinary procedures. We discuss the Petition in some detail because the

        Maryland courts found that Rheinstein admitted its allegations by default.

               Before they became Rheinstein’s clients, Charles and Felicia Moore executed a loan

        agreement with Imagine Capital, Inc. The Moores defaulted and Imagine enforced a

        “confessed judgment” clause that entitled it to practically automatic judgments. At first,

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        the Moores tried to challenge the confessed judgments and Imagine’s collection efforts pro

        se, but they eventually hired Rheinstein.

               According to the Petition, Rheinstein soon “developed an elaborate conspiracy

        theory involving Imagine, its principals, attorneys, lenders and other associates,” and then

        “embarked on a crusade to prove his theory. His conduct exceeded the bounds of zealous

        advocacy.” J.A. 109–10.

               Rheinstein first filed a complaint with the Attorney Grievance Commission against

        Imagine’s counsel.      Citing Rheinstein’s grievance, that counsel withdrew from

        representing Imagine, which then hired new outside counsel.

               Later, the Maryland trial court in the confessed-judgment action held a hearing.

        “During the hearing [Rheinstein] interjected irrelevant and unsubstantiated accusations

        against Imagine and its members regarding an elaborate fraud scheme. [Rheinstein] leered

        at [Imagine’s officer] during the proceeding and led the court to believe that Imagine and

        its officers were under investigation by the Department of Justice.” J.A. 110. Imagine’s

        officer then “invoked his Fifth Amendment right to remain silent. At the conclusion of the

        hearing, the court vacated the confessed judgments.” Id.

               Imagine hired new counsel once again, Matthew Hjortsberg of the firm Bowie &

        Jensen, to appeal. Rheinstein repeatedly emailed Bowie & Jensen personnel, threatening

        to sue the firm, Hjortsberg, and another attorney, and to report them to the Attorney

        Grievance Commission if they didn’t drop the confessed-judgment appeal. As a result,

        Bowie & Jensen notified its insurance carrier and hired outside counsel.

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               Over the next months, Rheinstein filed various rule-violating documents in the

        confessed-judgment appeal, including a “frivolous Petition for Writ of Certiorari,” “a

        frivolous motion to dismiss the appeal,” a “second frivolous Motion to Dismiss Appeal,”

        multiple “frivolous” briefs and exhibits, and a “frivolous ‘Motion to Resume Proceedings

        and Renewed Motion to Dismiss Appeal.’” J.A. 111–14.

               Rheinstein also “filed a [separate] frivolous complaint,” naming 28 defendants and

        alleging that “Imagine, acting in concert with other defendants, engaged in an elaborate

        fraud scheme.” J.A. 115. The next month, Rheinstein filed a federal qui tam action on

        behalf of Mr. Moore under the False Claims Act, alleging that Imagine’s officer engaged

        in mortgage fraud.

               In the meantime, Rheinstein emailed Hjortsberg and Bowie & Jensen’s outside

        counsel, requesting that Imagine settle the lawsuits Rheinstein filed for $5 million.

        Rheinstein also asked Hjortsberg and his firm to withdraw from representing Imagine,

        alleging that they were conspiring with Imagine to commit crimes and fraud. Rheinstein

        sent one particularly profanity-laced email in which he again threatened to sue Hjortsberg,

        accused him of fraud, and requested a $5 million “global settlement.” J.A. 118. After

        Bowie & Jensen’s outside counsel told Rheinstein his email was unacceptable, Rheinstein

        “apologize[d] for the unprofessional tone” and said that “the profanity, while regrettable,

        was a figure of speech.” J.A. 119.

               Rheinstein also sent a 16-page letter to the Chief Judge of the Maryland Court of

        Special Appeals, accusing Hjortsberg and his firm of improper ex parte communications

        to “manipulate the trial court record” and “manufacture arguments.” J.A. 121.

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               The Moores subsequently filed for bankruptcy. Their filing stayed the confessed-

        judgment appeal and made it part of the bankruptcy estate. But Rheinstein still contacted

        Hjortsberg to set up depositions of Imagine’s officers, not mentioning that his clients had

        filed for bankruptcy or that the appeal was stayed.

               Rheinstein also filed five proofs of claim against the Moores’ bankruptcy estate, for

        attorney’s fees and costs, totaling $85,604.61. The trustee and the Moores objected to

        Rheinstein’s claims. The trustee then agreed to assign the qui tam claims to Rheinstein in

        exchange for withdrawing his bankruptcy claims.

               Based on Rheinstein’s conduct, the Commission’s Petition alleged that he violated

        Maryland Lawyers’ Rules of Professional Conduct 1.1 (Competence); 3.1 (Meritorious

        Claims and Contentions); 3.2 (Expediting Litigation); 3.4(c) and (e) (Fairness to Opposing

        Party and Counsel); 4.4(a) (Respect for Rights of Third Persons); and 8.4(a), (c), and (d)

        (Misconduct).

                                                     2.

               Rheinstein moved to dismiss the Petition and removed the case to federal court. But

        the district court granted the Commission’s motion to remand, holding that it lacked

        subject-matter jurisdiction and that even if it had jurisdiction, it “would nevertheless have

        abstained and remanded the case to proceed in the state court.” Att’y Grievance Comm’n

        v. Rheinstein, No. CV MJG-16-1591, 2017 WL 1035831, at *3 (D. Md. Mar. 17, 2017).

        The state court denied Rheinstein’s motion to dismiss.

               At the motion-to-dismiss hearing, there was a long colloquy about Rheinstein’s

        failure to respond to the Commission’s discovery requests, which were served with the

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        Petition. The court directed that all discovery be completed within 60 days after the

        hearing, and that any motions to compel be filed before that deadline. It also set a six-day

        trial beginning in September 2017.

               Before the 60-day deadline, the Commission moved for sanctions and an order of

        default because Rheinstein still hadn’t answered the Petition or responded to the discovery

        requests. The Commission requested that all the Petition’s allegations be deemed admitted

        and that Rheinstein be precluded from presenting documents or witnesses at trial. The next

        day, Rheinstein filed a 99-page answer and affirmative defenses to the Petition, but he

        didn’t respond to the Commission’s discovery requests. A few days later, he propounded

        his own discovery requests on the Commission. Rheinstein also opposed the motion for

        sanctions, arguing that the Commission’s discovery requests were “nullified” when he tried

        to remove the case to federal court. J.A. 547.

               The court denied the Commission’s motion for a default since Rheinstein had filed

        his answer the next day. The court said it would take up the motion for sanctions at trial.

        The next week, the Commission served its responses to Rheinstein’s discovery requests.

               Four days before the trial was to begin, Rheinstein filed a new notice of removal.

        This time, he asserted that the Commission’s discovery responses showed an “illicit

        strategy” to discipline him for uncharged conduct and litigate the merits of his qui tam case.

        J.A. 1672. The district court granted the Commission’s emergency motion to remand,

        again finding no grounds for removal.

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               Rheinstein appealed that decision and we affirmed. See Att’y Grievance Comm’n

        v. Rheinstein, 750 F. App’x 225 (4th Cir. 2019) (per curiam).              Rheinstein then

        unsuccessfully petitioned for certiorari.

               Back in state court, the original presiding judge had retired, and in June 2019, a new

        judge set a trial for the next month. The Commission filed a “Motion for Sanctions and/or

        Motion in Limine,” again asserting Rheinstein’s continued failure to respond to the

        discovery requests that were served more than three years ago. The Commission again

        asked for a sanction of default and an order precluding Rheinstein from presenting trial

        evidence.

               The next day, Rheinstein served written responses to the discovery requests. In

        response to one interrogatory, he provided what the Maryland Court of Appeals later called

        “an extensive list of individuals he intended to call as non-expert witnesses.” Att’y

        Grievance Comm’n v. Rheinstein, 223 A.3d 505, 517 (Md. 2020). He designated an

        attorney expert to testify that Rheinstein’s various documents and positions weren’t

        frivolous. And he stated that he was “endeavoring to locate a mental health expert to opine

        on Respondent’s attention deficit disorder (‘ADHD’) disability and why it was the root

        cause of certain matters at issue.” Id. at 518. But he served no documents in response to

        the Commission’s discovery requests.

               Rheinstein then filed a 25-page opposition to the Commission’s motion for

        sanctions, plus exhibits. Although he’d responded to the discovery requests, he again

        argued that “the removal nullified the Pre-Removal Discovery Requests.” J.A. 900. While

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        he asserted other arguments, he didn’t suggest that ADHD affected the timing of his

        responses.

                 In the meantime, the court took judicial notice of eleven documents (dockets and

        filings from the various cases involving the Moores and Imagine); Rheinstein didn’t object.

        The court also directed the Commission to submit proposed findings of fact and

        conclusions of law based on the Petition’s allegations.

                 The court convened a hearing on the motion for sanctions and held that discovery

        sanctions were warranted. It found Rheinstein’s June 2019 discovery efforts to be “the

        very first glimmer of compliance with the discovery rules. It was too little and much too

        late.”       J.A. 1282. The court struck Rheinstein’s answer and held that the Petition’s

        allegations were admitted. It also precluded Rheinstein from presenting evidence at trial.

                 The court then held a hearing on the Commission’s proposed findings of fact and

        conclusions of law. The court re-affirmed the discovery sanctions and entered its own

        findings of fact and conclusions of law, finding that Rheinstein had violated Rules 1.1, 3.1,

        3.4, 4.4, and 8.4 as alleged in the Petition. 1

                 Rheinstein appealed, filing 155 pages of exceptions to the trial court’s decision. But

        the Maryland Court of Appeals affirmed the circuit court’s discovery sanctions, factual

        findings, and conclusions of law in an 80-plus-page opinion. See Rheinstein, 223 A.3d

        505. The court also determined that disbarment was appropriate.

                 1
                     The Commission had withdrawn its allegation that Rheinstein violated Rule 3.2.

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                                                      B.

               The U.S. District Court for the District of Maryland entered an Order of Reciprocal

        Disbarment. Rheinstein timely appealed, and that appeal was consolidated with the

        original action to determine whether we should impose reciprocal discipline under our own

        local rules.

               We issued Rheinstein a notice to show cause, allowing him an opportunity to present

        any reasons under Selling v. Radford, 243 U.S. 46, 51 (1917), why we should decline to

        reciprocally disbar him. Rheinstein requested a hearing under Local Rule 46(g)(9). The

        matter has been fully briefed and argued. 2

                                                      II.

               We begin our analysis with the original reciprocal-discipline action in this court.

        Under our local rules, we may discipline an attorney if another bar has disciplined the

        attorney or if the attorney violates rules of professional conduct in the state in which the

        attorney maintains his principal office. 4th Cir. R. 46(g)(1)(b)–(c); accord Fed. R. App. P.

        46(c). Our rule also provides that the same “discipline imposed by another court is

        presumed appropriate for discipline” in this court. 4th Cir. R. 46(g)(2).

               2
                 Rheinstein has also submitted multiple motions, including a motion that we request
        complete copies of the judicial records of Maryland’s courts, and a motion that we take
        judicial notice of the same eleven documents of which Maryland’s courts took judicial
        notice in his disciplinary proceedings. Given our decision, we deny the pending motions
        as moot.

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               “Although state disbarments are not binding upon federal courts, they are entitled

        to great respect.” Wrighten v. United States, 550 F.2d 990, 991 (4th Cir. 1977). So we

        won’t “re-adjudicate [] factual matters” decided in state disciplinary cases. In re Mitrano,

        335 F. App’x 297, 299 (4th Cir. 2009) (per curiam). Rather, we presumptively order the

        same discipline imposed by an attorney’s home-state bar, provided “(1) the state must have

        given the attorney notice of the charges and an opportunity to be heard; (2) the evidence

        must support the findings made; and (3) there must be no other ‘grave reason’ for ignoring

        the actions taken.” In re Fallin, 255 F.3d 195, 197 (4th Cir. 2001) (cleaned up) (citing

        Selling, 243 U.S. at 51). Rheinstein raises arguments on all three Selling grounds. We find

        none persuasive.

                                                     A.

               First, we hold that Rheinstein’s disciplinary proceedings satisfied due process. He

        received fair notice and wasn’t disbarred for uncharged conduct. Nor was he denied a

        meaningful opportunity to be heard.

                                                     1.

               Rheinstein appears to concede that he admitted the allegations within the Petition’s

        four corners. But he argues that the Maryland courts disbarred him based on uncharged,

        “new allegations” that weren’t in the Petition, implicating his due-process right to adequate

        notice. But what Rheinstein calls “new allegations” are findings about his litigation

        conduct during the disciplinary proceedings (which will always be absent from the

        charging document that initiates the disciplinary proceedings) and inferences that can

        reasonably be drawn from his admissions and the record before the Maryland courts.

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               To illustrate, Rheinstein contends the Maryland courts’ main reason for disbarring

        him was that he “misrepresented facts” at the confessed-judgment hearing, and that this

        wasn’t charged in the Petition. Opening Br. of Resp’t/Appellant at 25. While the Petition

        says Rheinstein “interjected irrelevant and unsubstantiated accusations against Imagine” at

        the hearing and “led the court to believe that Imagine and its officers were under

        investigation by the Department of Justice,” J.A. 110, it never says his accusations were

        “false,” he argues.

               Even so, the Petition put Rheinstein on notice that his conduct during the hearing—

        and specifically his actions leading the state court to believe that Imagine was subject to a

        DOJ investigation—was one of the subjects of the Commission’s charge. And as In re

        Ruffalo, 390 U.S. 544 (1968), illustrates, that’s what due process requires. There, the state

        disbarred an attorney only after adding a new charge in the middle of the hearing (relating

        to Ruffalo’s hiring of an employee)—after both Ruffalo and the employee had testified.

        Ruffalo, 390 U.S. at 546, 550–51.

               The Supreme Court held that disciplinary proceedings present “a trap when, after

        they are underway, the charges are amended on the basis of testimony of the accused. He

        can then be given no opportunity to expunge the earlier statements and start afresh.” Id. at

        551; see also Nell v. United States, 450 F.2d 1090, 1093 (4th Cir. 1971) (reversing, on

        direct appeal, suspension of attorney’s license when he didn’t learn the government sought

        disciplinary action, as opposed to reopening of an old case, until the hearing).

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               But no such thing happened here. Rheinstein didn’t face moving-target charges.

        Rather, he was disbarred because of his default admissions to the Petition’s allegations. 3

               Nor is the court’s conclusion that Rheinstein made “misleading statements at the

        [confessed judgment] hearing,” J.A. 1363, anything but a reasonable inference drawn from

        his admissions. As Maryland’s Court of Appeals has repeatedly held, there’s nothing

        mysterious—much less unconstitutional—about drawing reasonable inferences from a set

        of facts.   See, e.g., Rheinstein, 223 A.3d at 525 n.17; Att’y Grievance Comm’n v.

        McDonald, 85 A.3d 117, 128 (Md. 2014) (courts “routinely apply their common sense,

        powers of logic, and accumulated experiences in life” to draw reasonable inferences “from

        demonstrated sets of facts” (cleaned up)). At bottom, we reject Rheinstein’s contention

        that he was disbarred for uncharged conduct.

               We turn next to a point that arose at oral argument and bears on Rheinstein’s

        pending motions.     He contends that some of the “new allegations” came from the

        documents related to underlying litigation involving the Moores and Imagine, of which the

               3
                 We’re not alone in rejecting Rheinstein’s argument on this front. See, e.g.,
        Rheinstein, 223 A.3d at 546 (Maryland Court of Appeals’ rejection of same argument); see
        also In re Rheinstein, 242 A.3d 1089, 1089–90 (D.C. 2020) (per curiam) (reciprocally
        disbarring Rheinstein in D.C. and rejecting the “similar arguments” he made “to the Court
        of Appeals for the state of Maryland,” including that he was disbarred “for uncharged
        actions”); In re Rheinstein, 173 N.Y.S.3d 693, 696–97 (N.Y. App. Div. 2022) (per curiam)
        (reciprocally disbarring Rheinstein in New York after being “unpersuaded by respondent’s
        contention that he was found guilty of misconduct for which he was not properly charged”).
        Along with Maryland, D.C., and New York, Rheinstein has also been disbarred in Florida.
        See Fl. Bar v. Rheinstein, No. SC20-1614, 2022 WL 1598898, at *1 (Fl. May 20, 2022).

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        Maryland courts took judicial notice. But, he argues, the Maryland courts never properly

        took notice of any specific facts from those documents.

               Under Maryland law, courts can take judicial notice only of indisputable facts. See

        Abrishamian v. Wash. Med. Grp., P.C., 86 A.3d 681, 697 (Md. Ct. Spec. App. 2014) (facts

        subject to judicial notice fall “into either the ‘everybody around here knows that’ category,

        or the ‘look it up’ category” (cleaned up)). But after reviewing these “new allegations,”

        we’re not convinced there was any judicial-notice impropriety here. The Maryland courts

        didn’t take judicial notice of contested facts—indeed, they didn’t need to, given

        Rheinstein’s admissions. To the contrary, when the courts referenced these documents,

        they weren’t citing them as proof of the (disputed) statements they contained.

               And even if there were a procedural foot fault here, Rheinstein had the opportunity

        to object in the Maryland courts. Indeed, at the court’s hearing on the Commission’s

        proposed findings of fact and conclusions of law, Rheinstein’s attorney could—and did—

        argue about judicial-notice issues. See, e.g., J.A. 1144–46. Rheinstein also filed extensive

        objections to the court’s findings of fact and conclusions of law.         And he had the

        opportunity to argue the issue on direct appeal to the Maryland Court of Appeals.

               Our review, in contrast, isn’t for legal error, but for the Selling grounds. And

        Rheinstein’s argument on this point doesn’t amount to a due-process violation or another

        basis under Selling to disregard the disbarment. That’s because the Petition’s admitted

        allegations were, standing alone, sufficient to justify Rheinstein’s disbarment, as we

        explain below. So we reject Rheinstein’s arguments about the “new allegations,” whether

        under judicial-notice principles or otherwise.

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                                                     2.

               We also hold that the Maryland courts afforded Rheinstein with an adequate

        opportunity to be heard. Rheinstein argues he was entitled to a trial, even though he

        defaulted, because of the “new allegations.”       Even setting aside the problems with

        Rheinstein’s argument about the “new allegations,” he did receive a post-default hearing

        about the proposed findings of fact and conclusions of law. And if he contends he should

        have been given an evidentiary hearing, due process doesn’t go so far. See In re Evans,

        834 F.2d 90, 91 (4th Cir. 1987) (“The district court’s failure to hold an evidentiary hearing

        is irrelevant because procedural due process in a disbarment proceeding does not require a

        hearing of that nature be given to the attorney.”).        Due process requires only an

        “opportunity” to be heard, not that every point be “actually litigated.” In re Kivisto, 493

        F. App’x 762, 765–66 (7th Cir. 2012) (affirming district court’s reciprocal disbarment after

        he defaulted in state disciplinary proceedings).

               Rheinstein has raised other arguments about whether the Maryland courts afforded

        him due process. But we find none have merit. So Rheinstein has failed to rebut the

        presumption of reciprocal disbarment under the first Selling ground.

                                                     B.

               Turning to the second Selling ground, we also reject Rheinstein’s contentions that

        his disbarment rested on an infirmity of proof. To the contrary, his admissions to the

        allegations within the Petition’s four corners, standing alone, support the Maryland courts’

        decision. Under Maryland law, his default admissions amount to proof by clear and

        convincing evidence sufficient to warrant disbarment. See Att’y Grievance Comm’n v.

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        Thomas, 103 A.3d 629, 645 (Md. 2014) (“Based on the deemed admissions, we conclude

        that the admitted facts are sufficient, to a clear and convincing standard, to warrant

        concluding that Respondent violated [multiple rules].”).

               And while the admissions themselves suffice, we also take no issue with Maryland

        courts drawing reasonable inferences from those admissions, as we explained above.

               Rheinstein’s remaining arguments here are essentially the kinds of defenses he

        might have raised if he hadn’t defaulted. But by defaulting, he waived his opportunity to

        disprove rule violations and present mitigating evidence.        If we were to hold that

        Rheinstein’s after-the-fact proffer showed an infirmity of proof under Selling, we’d

        undermine the deference we afford to state bars’ decisions. This we decline to do.

                                                    C.

               Finally, after reviewing the record and considering Rheinstein’s arguments, we

        conclude that there’s no “grave reason” under Selling to disregard Maryland’s decision to

        disbar him.

                                                    III.

               In sum, Rheinstein has shown no grounds under Selling to prompt us to ignore

        Maryland’s decision to disbar him. Without an adequate reason to depart from our

        presumption that Maryland’s disposition should apply here, we reciprocally disbar

        Rheinstein from practice in this court. And we separately affirm the district court’s

        decision to impose reciprocal discipline.

                                                                   SO ORDERED AND AFFIRMED

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