Court Opinion

ID: 4512448
Source: CourtListenerOpinion
Date Created: 2020-03-04 01:00:27.264202+00
Date Added: 2024-06-11T09:38:52.687311
License: Public Domain

Case: 19-10875     Document: 00515330710     Page: 1   Date Filed: 03/03/2020

        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT
                                                                United States Court of Appeals
                                                                         Fifth Circuit

                                                                       FILED
                                  No. 19-10875                     March 3, 2020
                                                                  Lyle W. Cayce
In re: RYAN EUGENE RAY,                                                Clerk

             Appellant

                 Appeal from the United States District Court
                      for the Northern District of Texas

Before WIENER, STEWART, and WILLETT, Circuit Judges.
CARL E. STEWART, Circuit Judge:
      Attorney Ryan Eugene Ray appeals his permanent disbarment from the
U.S. District Court for the Northern District of Texas. The district court
imposed this sanction after determining that Ray engaged in fraudulent and
other misconduct in a wrongful termination case involving one of his clients.
We AFFIRM.
                     I. Facts & Procedural Background
      On July 15, 2013, Jose Hernandez, a United States Army reservist who
worked for Results Staffing, Inc. (“RSI”), failed to report to work and instead
went to the emergency room (“ER”) complaining of a headache and back pain.
Hernandez v. Results Staffing, Inc., 907 F.3d 354, 357 (5th Cir. 2018). RSI fired
Hernandez for violating its “no call/no show” policy, which required employees
to report to their employer four hours prior to their scheduled shift if they were
unable to come to work. Id. Hernandez hired Ray to represent him and, in
2014, filed suit against RSI alleging violation of his rights under the Uniformed
Services Employment and Reemployment Rights Act (“USERRA”) of 1994. Id.
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Hernandez claimed that his ER visit was for treatment of an aggravation of a
back condition that he suffered while on military duty the preceding weekend.
Id. at 359. Thus, under USERRA’s convalescence provision, his reporting
period was extended to July 16, on grounds that he sustained an injury during
his military service on July 15. See 38 U.S.C. § 4312(e)(2)(A) (“A person who is
hospitalized for, or convalescing from, an illness or injury incurred in, or
aggravated during, the performance of service in the uniformed services shall,
at the end of the period that is necessary for the person to recover from such
illness or injury, report to the person’s employer[.]”).
      During the discovery period, RSI served Hernandez with requests for
production of all medical records from July 2013, including those from the July
15 ER trip, as well as any records relating to treatment for his injuries alleged
in his suit against RSI. Id. at 357–58. In response, Hernandez turned over a
doctor’s note from his attending physician stating that Hernandez was under
his care on July 15 and could return to work the following day. Id. at 358. On
March 12, 2015, RSI obtained Hernandez’s signature on an authorization to
obtain relevant medical records but did nothing with the signed document
thereafter. Id. Then, at some point between May 15 and May 18, 2015, Ray
received copies of Hernandez’s medical records from the July 15 ER trip and
claimed to have faxed the records to opposing counsel but later discovered that
the fax failed to transmit. Id.
      A bench trial was held and the district court denied Hernandez’s claims
and rendered judgment in favor of RSI. Id. Hernandez appealed and this court
reversed and rendered judgment in his favor, remanding for the district court’s
calculation of damages. See Hernandez v. Results Staffing, Inc., 677 F. App’x
902, 908 (5th Cir. 2017) (per curiam) (unpublished). While the case was
pending on remand, RSI learned that Ray had Hernandez’s July 15 ER records
in his possession prior to trial but failed to disclose them. Hernandez, 907 F.3d
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at 358. RSI also contended that Hernandez and his wife gave false testimony
at trial as to the true reason for Hernandez’s ER trip. Id. RSI filed a Rule 60(b)
motion for relief from judgment, 1 attaching the July 15 records revealing that
Hernandez visited the ER with the primary complaint of a migraine-type
headache, with back pain as only an associated symptom resulting from a
chronic non-disabling condition that he had for many years. Id. at 358–59. RSI
complained that these records proved that Hernandez’s ER trip was not for
treatment of an aggravation of a back condition that he suffered while on
military duty the previous weekend as he had testified at trial and argued on
appeal. Id. at 359.
       Agreeing with RSI, the district court granted the Rule 60(b) motion. Id.
at 358–59. The district court determined that Hernandez and his wife
intentionally gave false testimony to mislead RSI in its trial preparation and
that this testimony ultimately misled the Fifth Circuit on appeal. Id. at 359.
The district court also concluded that Ray failed to take the appropriate steps
to supplement an incomplete discovery response by providing the July 15 ER
records to opposing counsel once they came into his possession. Id.
       On interlocutory appeal, this court affirmed the district court’s judgment
granting RSI’s Rule 60(b) motion. Id. at 366. We explained that:
              We do not need to reach the more difficult question
              whether the signing of an authorization for release of
              protected health information is sufficiently responsive
              to a Rule 34 request for production, because once
              Hernandez’s counsel obtained physical possession of
              the records, he had a continuing obligation under Rule
              26(e) to disclose them to RSI. By declining to do that,
              Hernandez failed to meet his obligations under the
              federal rules, which include a duty to supplement prior

       1See FED. R. CIV. P. 60(b) (“[T]he court may relieve a party or its legal representative
from a final judgment, order, or proceeding [due to] fraud[,] . . . misrepresentation, or
misconduct by an opposing party[.]”).
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              disclosures “in a timely manner” if they are incomplete
              and “if the additional . . . information has not
              otherwise been made known to the other parties
              during the discovery process or in writing.” FED. R.
              CIV. P. 26(e).

Id. at 362. We held that “[t]he district court correctly applied our two-pronged
test for Rule 60(b)(3) motions, finding, by clear and convincing evidence, that
Hernandez engaged in fraud or other misconduct that prevented RSI from fully
and fairly litigating its case.” 2 Id. at 365.
       Hernandez filed a motion for reconsideration of the district court’s final
order granting RSI’s Rule 60(b) motion. RSI filed a response brief in support of
its motion for sanctions requesting that the district court sanction both Ray
and Hernandez by awarding RSI attorney’s fees and litigation expenses
incurred since May 2015 and dismissing all pending litigation with prejudice.
The district court denied Hernandez’s motion for reconsideration. In April
2019, Hernandez and RSI settled and filed a joint stipulation for dismissal with
prejudice of all pending claims pursuant to Rule 41. See FED. R. CIV. P.
41(a)(1)(A)(ii). The district court entered final judgment accordingly, but the
proceedings did not end there. Less than a month later, the district court
ordered Ray to file a response “relative to his conduct [in the Hernandez case]
and the possibility that the court might issue an order imposing discipline on
him for his inappropriate conduct, including the possibility of an order
directing the court clerk to remove Ray’s name from the role of attorneys
authorized to practice law before this court.” Ray filed a response arguing
against the district court’s imposition of sanctions. Ray also declined the

       2 See Hesling v. CSX Transp., Inc., 396 F.3d 632, 641 (5th Cir. 2005) (establishing that
to prevail on a Rule 60(b)(3) motion, the movant must show “(1) that the adverse party
engaged in fraud or other misconduct, and (2) that this misconduct prevented the moving
party from fully and fairly presenting his case”).
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                                     No. 19-10875
district court’s offer of a hearing as well as its solicitation of the details of any
financial burden Ray had incurred as a result of the settlement entered into
with RSI.
      The district court severed Ray’s disciplinary proceedings from the
Hernandez case and filed a memorandum opinion and order directing the clerk
to remove Ray’s name from the list of attorneys authorized to practice law in
the U.S. District Court for the Northern District of Texas. See In re Discipline
of Ray, No. 4:19-MC-015-A, 2019 WL 3082523, at *1 (N.D. Tex. July 15, 2019).
In its 26-page order, the district court explained that it imposed this sanction
under Local Civil Rule 83.8(b)(1),(3), and (4), which provides that a presiding
judge may impose appropriate discipline against a member of the bar for
“conduct unbecoming a member of the bar[,]” “unethical behavior[,]” and the
“inability to conduct litigation properly[.]” Id. The district court stated:
             Contrary to the expectations of Dondi,[3] Ray’s conduct
             on behalf of Hernandez fueled unnecessarily the costs
             to [RSI] of this litigation to the point of causing it to
             expend something in excess of $340,000 before it was
             all over with. Ray’s behavior as attorney for
             Hernandez was of a pattern that tended to be
             destructive of the administration of justice in this
             action. He engaged in fraud, misrepresentation, and
             misconduct that created a false record and provided
             fodder for false arguments by Hernandez and his
             counsel to this court and to the Fifth Circuit in the
             initial appeal. Ray sat silently by when, at oral
             argument in the Fifth Circuit during the initial
             appeal, one of the panel members asked the attorney
             for [RSI] if there was any evidence in rebuttal to
             [Hernandez’s] claim that his trip to the emergency
             room the morning of July 15, 2013, was to receive

      3 Dondi Props. Corp. v. Commerce Sav. & Loan Ass’n, 121 F.R.D. 284, 287–88, 291
(N.D. Tex. 1988) (en banc) (establishing and adopting standards of litigation conduct to be
observed in civil actions in the U.S. District Court for the Northern District of Texas,
including candor, diligence, respect, personal dignity, and professional integrity).
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            medical attention for a back injury he sustained over
            the weekend, to which the attorney for [RSI] was
            forced to respond “there is no other real evidence one
            way or the other[]” . . . Only an attorney completely
            devoid of an ethical or moral sense of right and wrong
            would have sat quietly by as [RSI]’s attorney was
            required to make that sort of answer, bearing in mind
            that Ray had in his possession documents, which he
            had withheld from [RSI], showing that the real reason
            Hernandez went to the hospital that morning was for
            a condition that was unrelated to his military service
            the preceding weekend.

Id. at *7. The district court continued that if it “were to order less than removal
of Ray’s right to practice law before this court as discipline on Ray, the
expectations of Dondi would be sorely disappointed.” Id. at *9. The district
court determined that Ray’s conduct squarely qualified under the factors this
court considers in evaluating whether an attorney’s disbarment is warranted.
See In re Sealed Appellant, 194 F.3d 666, 674 (5th Cir. 1999).
The district court ordered Ray’s removal from the list of attorneys authorized
to practice in the Northern District determining that Ray was “unfit to practice
in this court, and that his disbarment from such practice [would] protect the
court and the public from his ministrations as such an unfit person.” In re
Discipline of Ray, 2019 WL 3082523, at *10. Ray filed this appeal.
                           II. Standard of Review
      “Sanctions imposed against an attorney by a district court are reviewed
for abuse of discretion.” In re Mole, 822 F.3d 798, 801 (5th Cir. 2016). We will
determine that the district court has abused its discretion if “its ruling is based
on an erroneous view of the law or on a clearly erroneous assessment of the
evidence.” Id. Disbarment of an attorney by a federal court is proper “only upon
presentation of clear and convincing evidence sufficient to support the finding

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of one or more violations warranting this sanction.” Sealed Appellant, 194 F.3d
at 670.
                                 III. Discussion
      On appeal, Ray argues that the district court abused its discretion in
imposing disbarment because its findings were not supported by clear and
convincing evidence. Specifically, Ray challenges the district court’s findings
that Hernandez and his wife committed perjury and that Ray intentionally
withheld evidence. Ray also argues that the district court erred in failing to
consider a lesser sanction than disbarment. Ray posits, however, that even a
lesser sanction would be inappropriate since he should not be sanctioned at all.
According to Ray, he only withheld “significant evidence” from opposing
counsel prior to trial because he was “an inexperienced attorney, and not due
to fraud[.]” We disagree.
      This court has already upheld the district court’s judgment granting
RSI’s Rule 60(b) motion on grounds that RSI established “by clear and
convincing evidence, that Hernandez engaged in fraud or other misconduct
that prevented RSI from fully and fairly litigating its case.” See Hernandez,
907 F.3d at 365. There, we observed that “once [Ray] obtained physical
possession of the records, he had a continuing obligation under Rule 26(e) to
disclose them to RSI” and in not doing so “failed to meet his obligations under
the federal rules.” Id. at 362. We further underscored the district court’s
extensive findings that “[Hernandez], often through his attorney [Ray],
engaged in fraud, misrepresentation, and misconduct in [his] presentations,
verbally and in writing, to the court in pretrial matters, during the trial, and
in his presentations to the Fifth Circuit in support of his appeal from [the
district] court’s dismissal of his claims[.]” Id. at 364.
      Thus, the only question before us now is whether the district court’s
imposition of disbarment as a sanction for Ray’s adequately documented
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                                 No. 19-10875
misconduct was an abuse of discretion. The answer is no. As we observed in
Sealed Appellant, “[d]isbarment is generally appropriate when a lawyer
engages in intentional conduct involving dishonesty, fraud, deceit, or
misrepresentation that seriously, adversely reflects on the attorney’s fitness to
practice.” 194 F.3d at 674. We explained in that case that
            [w]hen acting under an inherent power to disbar an
            attorney, a district court must make a specific finding
            that an attorney’s conduct “constituted or was
            tantamount to bad faith.” When bad faith is patent
            from the record and specific findings are unnecessary
            to understand the misconduct giving rise to the
            sanction, the necessary finding of “bad faith” may be
            inferred.

Id. at 671. Here, the district court’s thorough and lengthy opinion reveals that
it closely followed Sealed Appellant’s parameters when it concluded that Ray’s
disbarment was the proper sanction. As the district court stated:
            The court can infer Ray’s mental state when he
            repeatedly engaged in his inappropriate conduct. A
            fair inference from his repeated violations of his
            ethical and moral obligations over a period of years is
            that he intentionally did what he did, knowing that it
            was wrong. The actual and potential injury of his
            misconduct included hundreds of thousands of dollars
            of financial loss to the opponent in his litigation and
            untold hours of time devoted by this court and the
            Fifth Circuit to evaluation of the records of the
            underlying action, ruling on motions, and otherwise
            resolving issues that were presented by reason of Ray’s
            misconduct. Aggravating factors include those
            mentioned above, and the obvious stress that the
            owners and managers of [RSI] have undoubtedly
            suffered by reason of the developments in the
            underlying litigation.
                                     ...

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              The court finds that Ray engaged in intentional
              conduct, involving dishonesty, fraud, deceit, and
              misrepresentation.

In re Discipline of Ray, 2019 WL 3082523, at *9. Given the district court’s
detailed analysis that is supported by the record and this court’s holding in
Hernandez, 907 F.3d 365–66, we conclude that the district court did not abuse
its discretion in ordering Ray’s disbarment. See Mole, 822 F.3d at 801. 4 Ray’s
secondary argument that the district court erred in failing to consider a lesser
sanction is also meritless. As the district court explained:
              The court has considered, but has decided against,
              imposition of lesser sanctions, having concluded that
              no lesser sanction will adequately and appropriately
              address the seriousness of Ray’s misconduct. The court
              considered financial sanctions, but was frustrated in
              the court’s attempt . . . to obtain information [from
              Ray] that would enable the court to make an informed
              decision as to an appropriate financial sanction to be
              imposed.

In re Discipline of Ray, 2019 WL 3082523, at *5. The district court’s language
above derives from its attempted solicitation of any financial payment Ray
made in settling with RSI. The district court stated that it would take into
account that information in deciding whether further sanctions should be
imposed. As noted, however, Ray declined to reveal the details of the
settlement, so the district court determined that attempting to craft an
alternative lesser, i.e., a financial, sanction without this information would be
a fruitless endeavor. Id. It is clear from this part of the record that the district

       4 Ray’s suggestion that his withholding of “significant evidence” from opposing counsel
was due to his inexperience is belied by the record. As the district court observed in its
judgment imposing disbarment, Ray has been in practice since 2009 and was in his fifth year
of practice when Hernandez’s original suit was filed against RSI.

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                                 No. 19-10875
court did consider a lesser sanction and simply decided against it. Thus, Ray’s
assertion that the district court “failed to consider a lesser sanction” and
instead “jumped directly to the most severe sanctions available” is, once again,
an inaccurate portrayal of the facts.
                               IV. Conclusion
      For the foregoing reasons, the district court’s order imposing against
Attorney Ryan Eugene Ray the sanction of disbarment from the U.S. District
Court for the Northern District of Texas is affirmed.

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