Court Opinion

ID: 4248401
Source: CourtListenerOpinion
Date Created: 2018-02-26 22:00:24.266492+00
Date Added: 2024-06-11T07:48:10.362544
License: Public Domain

In the

    United States Court of Appeals
                 For the Seventh Circuit
                     ____________________
No. 17-2040
JOHN DOE,
                                                    Plaintiff-Appellant,
                                  v.

KIRSTJEN M. NIELSEN, Secretary of the
U.S. Department of Homeland Security;
JAMES W. MCCAMENT, Deputy Director,
U.S. Citizenship and Immigration
Services; and NICHOLAS COLUCCI, Chief,
Immigrant Investor Program Office,
U.S. Citizenship and Immigration Services,
                                       Defendants-Appellees.
                     ____________________

             Appeal from the United States District Court
        for the Northern District of Illinois, Eastern Division.
                No. 15-cv-01387 — John Z. Lee, Judge.
                     ____________________

                       FEBRUARY 26, 2018
                     ____________________

   Before RIPPLE, MANION, and SYKES, Circuit Judges.
  SYKES, Circuit Judge. Plaintiff John Doe seeks lawful per-
manent residence in the United States under the
2                                                    No. 17-2040

Employment-Based Immigration: Fifth Preference category
(“EB-5”). This visa program requires applicants to demon-
strate that they have invested or are currently investing
capital in a “new commercial enterprise” within the United
States. 8 U.S.C. § 1153(b)(5)(A). To that end, Doe invested
$500,000 in Elgin Assisted Living EB-5 Fund, LLC. That
entity then loaned funds to Elgin Memory Care, LLC, so it
could build and operate a memory care facility in Elgin,
Illinois.
    Despite this investment, the U.S. Citizenship and Immi-
gration Services (“USCIS”) denied Doe lawful permanent
resident status. The USCIS expressed particular concern that
the Elgin memory care center had not been built since it was
first proposed in 2011. Doe objected to the decision and filed
a lawsuit against the USCIS alleging that the denial of his
application violated the Administrative Procedure Act.
5 U.S.C. §§ 701 et seq. The district court entered summary
judgment in the government’s favor and Doe appealed.
    Doe is represented in this appeal by the Kameli Law
Group, LLC. The law firm has three attorneys. John R. Floss
is one of two associates and also Doe’s counsel of record.
Taher Kameli is the firm’s principal. TAHER KAMELI LAW
GROUP, Our Attorneys, http://www.kamelilawgroup.com/
our-attorneys/ (last visited Feb. 14, 2018). Illinois records list
Kameli as the sole manager of the LLC. OFFICE OF THE ILL.
SEC’Y OF STATE, http://www.ilsos.gov/corporatellc/.
    While briefing in this appeal was underway, the Securi-
ties and Exchange Commission brought a civil action against
Kameli for violating the Securities and Exchange Acts.
Complaint, SEC v. Kameli, No. 17-cv-04686 (N.D. Ill. June 22,
2017). The agency filed an amended complaint late last
No. 17-2040                                                     3

month. First Amended Complaint, Kameli, No. 17-cv-04686
(N.D. Ill. Jan. 29, 2018). The SEC accuses Kameli of defraud-
ing at least 226 immigrant investors who participated in the
EB-5 immigrant investor program. Id. ¶¶ 1–2. More specifi-
cally, the SEC alleges that Kameli solicited over $88 million
to invest in a number of new commercial enterprises, only to
squander and misappropriate some of those funds. Id. ¶¶ 9–
11.
    There is significant overlap between the SEC’s claims
against Kameli and the facts in this case. Kameli is alleged to
have misappropriated funds that were invested in the Elgin
memory care center. Id. ¶¶ 159–167, 169. This supposedly
left the project in debt and unfinished. Id. ¶¶ 195–96, 200–01.
The SEC alleges that Kameli’s actions have “jeopardized
investors’ chances at obtaining permanent U.S. residency
through the EB-5 visa program.” Id. ¶ 13. Doe is one of those
investors. This raises a serious question of conflict of interest.
   Accordingly, we ordered the parties to submit supple-
mental briefs regarding the possible conflicts of interest the
Kameli Law Group may have in representing Doe. The briefs
are now in. We conclude that disqualification is appropriate.
    It is our duty to “maintain public confidence in the legal
profession and assist[] in protecting the integrity of the
judicial proceeding.” Freeman v. Chi. Musical Instrument Co.,
689 F.2d 715, 721 (7th Cir. 1982). Disqualifying conflicted
counsel is “a drastic measure” toward this end, but we must
take this step when necessary to “protect[] the attorney-
client relationship.” Id. The facts of this case force our hand.
   The Illinois Rules of Professional Conduct prohibit repre-
sentation if “there is a significant risk that the representation
4                                                        No. 17-2040

of one or more clients will be materially limited by the
lawyer’s responsibilities to another client, a former client or
a third person or by a personal interest of the lawyer.” ILL. R.
PROF’L CONDUCT R. 1.7(a)(2). Client consent can sometimes
resolve such a conflict, but it is not a panacea. See Owen v.
Wangerin, 985 F.2d 312, 317 (7th Cir. 1993). The lawyer must
always “reasonably believe[] that [he] will be able to provide
competent and diligent representation to each affected
client.” ILL. R. PROF’L CONDUCT R. 1.7(b)(1). Put slightly
differently, representation is prohibited notwithstanding
informed client consent if the court “cannot reasonably
conclude that the lawyer will be able to provide competent
and diligent representation.” Id. cmt. [15].
    This case presents at least two concurrent conflicts of in-
terest, neither of which can be waived by informed client
consent. 1 No lawyer could reasonably continue the represen-
tation under these circumstances.
   First, a conflict of interest arises when an attorney has an
incentive to reject lines of inquiry or argument that might
help his client’s case. See, e.g., United States v. Algee, 309 F.3d
1011, 1014 (7th Cir. 2002) (finding conflict when “ethical
constraints would prohibit [counsel] from cross-examining
[witnesses] in any meaningful way”); People v. Taylor,
930 N.E.2d 959, 971–72 (Ill. 2010) (“[T]he defendant must
point to some specific defect in his counsel’s strategy tactics,
or decision making attributable to the conflict.”) (internal

1 In response to our order for supplemental brieﬁng, the Kameli Law
Group submitted an aﬃdavit from Doe purporting to waive any conﬂict
of interest. As we explain, the two conﬂicts at issue here are not wai-
vable.
No. 17-2040                                                    5

quotation marks omitted). Kameli has precisely this motiva-
tion. He and Doe might share an interest in proving that the
Elgin investment was not a sham, but that is where their
alliance begins and ends. Kameli would not advise Doe to
litigate his case any other way, such as by alleging fraud and
seeking reconsideration of the USCIS’s decision. It therefore
strains credulity to think that Kameli would be diligent in
Doe’s case. Indeed, a diligent lawyer must take “whatever
lawful and ethical measures are required to vindicate a
client’s cause or endeavor.” ILL. R. PROF’L CONDUCT R. 1.3
cmt. 1 (emphasis added). Kameli’s self-interest inhibits him
from carrying out this duty.
    Second, a lawyer owes his client a duty of “undivided
fidelity.” Pelham v. Griesheimer, 440 N.E.2d 96, 100 (Ill. 1982).
Having a duty to someone else obviously “interfere[s] with
the undivided loyalty [that] the attorney owes his client”
and ultimately “detract[s] from achieving the most advanta-
geous position for his client.” Id. Kameli’s divided obliga-
tions to his various investors and clients put him in precisely
this position. The SEC alleges that Kameli “has remained in
total control” of the relevant EB-5 projects he created. First
Amended Complaint, ¶ 12, Kameli, No. 17-cv-04686. Many of
these projects evidently “lack money to complete construc-
tion,” id. ¶ 196, meaning Kameli must decide which projects
to shore up with the limited funds he has. His duty of loyal-
ty to Doe would require him to complete the Elgin project
because that would best position him to obtain lawful
permanent residence. His obligations to his other investors,
on the other hand, require him to invest in their respective
enterprises. This catch-22 is the epitome of divided loyalty
and thus makes Kameli’s continued representation untena-
ble.
6                                                 No. 17-2040

    Having identified the relevant conflicts of interest, we
have the final issue of whether Kameli’s conflicts can be
imputed to his associate and Doe’s counsel of record, John
Floss. The Illinois rules provide that no lawyer associated in
a firm “shall knowingly represent a client when any one of
them practicing alone would be prohibited from doing so by
Rules 1.7 or 1.9.” ILL. R. PROF’L CONDUCT R. 1.10(a). This
language on its own would bar Floss from representing Doe.
An exception arises, however, when “the prohibition is
based on a personal interest of the prohibited lawyer and
does not present a significant risk of materially limiting the
representation of the client by the remaining lawyers in the
firm.” Id. Kameli’s conflict is plainly personal to him—he
alone is in the SEC’s crosshairs—so we must determine
whether Kameli’s civil case presents a significant risk of
materially limiting Floss’s continued representation of Doe.
    We conclude that it does. As discussed, the Kameli Law
Group is a small law firm with just three attorneys. Kameli is
the only principal, so Floss reports directly to him. This
presents an unacceptably high risk of materially limiting
Doe’s representation. There is virtually no chance Floss
would do anything to upset Kameli’s case. In fact, Floss’s
briefing on the conflict-of-interest issue suggests that he
would champion Kameli’s cause. The brief goes out of its
way to describe the allegations against Kameli as “sala-
cious.” It also lauds the district judge in the SEC’s civil
action for “denying the SEC’s motion for a preliminary
injunction” against Kameli. None of this is relevant to Doe’s
case, and unfortunately, it suggests that Floss’s priority
would be to protect Kameli.
No. 17-2040                                               7

   It is therefore ORDERED that the Kameli Law Group is
disqualified from representing Doe in this case. The appeal
will be held in abeyance for 60 days to permit Doe to secure
substitute counsel.