Court Opinion

ID: 9467355
Source: CourtListenerOpinion
Date Created: 2023-08-05 01:46:35.381595+00
Date Added: 2024-06-11T17:40:18.212278
License: Public Domain

WALD, Circuit Judge,
concurring in part, dissenting in part:
I concur in Parts I, III and IV of Judge Tamm’s opinion for the court. I disagree only with footnote 6 and with the discussion in Part II of the applicability of the doctrine of collateral estoppel in the unusual circumstances of this case.
While I agree with Part III of the opinion, the impossibility of McCord’s demonstrating injury only disposes of one potential cause of action based on the facts alleged in his complaint, that of malpractice based on negligence. I cannot concur in the conclusion expressed in the majority’s footnote 6 that McCord’s complaint is so limited. It does not require an indulgent reading of the complaint to draw from McCord’s allegations something more than mere negligence, though much of the language is cast in that light. McCord specifically alleges that his lawyers “knowingly and intentionally failed ... to inform [him] of pertinent facts and factors,” “failed to pursue certain avenues of investigation of matters vital to [his] defense,” and that “at all relevant times hereto, the interests of the Defendants were in unrevealed conflict with the interests of the Plaintiff [McCord].” Furthermore, in Count II, he charges that the acts arose out of a conspiracy with the chief Watergate co-conspirators. A claim of disloyalty or conflict of interest on the part of an attorney is an actionable tort, recognized in our Circuit,1 and described in the Restatement (Second) of Torts § 874 as a “breach of fiduciary duty.” McCord’s allegations of disloyalty, if proved, constitute a legally cognizable “wrong” separate and apart from the adequacy of his representation at trial.2
*619Furthermore, I would conclude that an allegation of deliberate and willful disloyalty and conflict of interest states a claim without an allegation of actual damages; the cause of action vindicates a legal wrong rather than seeking to compensate injury.3 Of course, even assuming that on a generous reading McCord’s complaint alleges a tort claim which is not predicated on harm, collateral estoppel would serve as a barrier, according to the majority’s discussion of that doctrine in Part II. I cannot agree with that conclusion, given the facts of this case.
The doctrine of collateral estoppel, reduced to its essence, provides that our judicial system will provide a party with only one “full and fair opportunity” to litigate an issue. “Collateral estoppel, like the related doctrine of res judicata, has the dual purpose of protecting litigants from the burden of relitigating an identical issue with the same party or his privy and of promoting judicial economy by preventing needless litigation.” Parklane Hosiery Co. v. Shore, 439 U.S. 322,326, 99 S.Ct. 645, 649, 58 L.Ed.2d 552 (1979).
I agree with the majority that it may be perfectly acceptable for a party to be held bound by a determination made in a prior criminal proceeding in which he or she was the defendant. And of course, the fact that an issue is settled in the course of a summary proceeding, without an evidentiary hearing, does not necessarily mean that estoppel cannot apply, so long as a final judgment was entered on the merits. Many cases recognize the collateral estoppel effect of a final judgment based on insufficiency of a complaint or on summary judgment.
Nevertheless, I have difficulty with holding McCord totally estopped from asserting all claims of disloyalty and conflict of interest under the circumstances of this case. And I note other courts have had similar difficulties when faced with occasional unfair results which might be wrought by too broad an application of the doctrine of collateral estoppel. Some have gone so far as to describe the doctrine as dangerous, in that it could result in “utter disaster” as a result of a “trivial controversy,” subjecting litigants to “extravagant hazards.” The Evergreens v. Nunan, 141 F.2d 927, 929 (2d Cir.), cert. denied, 323 U.S. 720, 65 S.Ct. 49, 89 L.Ed. 579 (1944) (Learned Hand, J.). Traditionally, courts relied on a variety of approaches to avoid the necessity of holding a litigant bound when to do so would be unfair or unwise under the circumstances.4
*620These analyses led to a conclusion that collateral estoppel could not apply because its prerequisites had not been met. I do not believe that such a restrictive ruling is necessary here, however. A more straightforward and flexible analysis has recently been commended to us by the Supreme Court. Parklane Hosiery, supra, 489 U.S. 322, 99 S.Ct. 645, 58 L.Ed.2d 552, struck down the last vestiges of mutuality of estoppel, which had provided that neither party could use a prior judgment against the other party unless both parties were bound by the same judgment. The Court recognized, however, that as traditional restrictions on the use of collateral estoppel were eased, the possibility of unfairness increased. I would add that the possibility of the frustration of the important public benefit of having issues fully aired and finally decided also increases. The solution, declared the Court, was not to impose strict limitations on when collateral estoppel may apply, but to grant broad discretion to determine that it should not apply in a particular case. Id. at 331, 99 S.Ct. at 651.
I therefore turn to the question of whether an unusual combination of circumstances in this case might justify providing James McCord with an opportunity to prove that he is entitled to recover damages for malpractice from his former attorneys. There are a variety of such circumstances in this case. First of all, there is the important factor that this case involves the sensitive yet critically important relationship between a criminal defendant and his attorneys. Ensuring the strictest integrity in discharging this trust is a matter of as much concern to this court as it is to defendants. Furthermore, no finder of fact has ever considered the evidence, heard the testimony and cross-examination of witnesses, judged the credibility of witnesses, and concluded that Gerald Alch and F. Lee Bailey were representing McCord with undivided loyalty and protecting his interests alone. In the interests of the courts’ duty to supervise the practice of law in this jurisdiction, it would be wise that such a determination be made before this chapter of the Watergate conspiracy is finally closed.
Furthermore, one of the principal purposes of collateral estoppel, “to protect litigants from the burden of relitigating an identical issue with the same party,” Parklane Hosiery, supra, at 326, 99 S.Ct. at 649, is not a factor in this case. Alch and Bailey have never previously been party to any suit brought by McCord; calling them to answer in a judicial forum for the first time works no more of an injustice against them than a lawsuit may against any litigant.5 Mutuality may not be a requirement of collateral estoppel any more, but lack of mutuality certainly eliminates much of the potential unfairness of deciding not to apply the doctrine.
When preventing unfairness to litigants is not a factor in deciding whether collateral estoppel should apply, we are left with the goal of conserving judicial resources. In such a case, the court’s discretion to decide that the benefits of an evidentiary hearing to finally resolve this issue are greater than the detriment to its resources is appropriately broader. This case should not involve the “staggering expense and typical length” of a patent case, for example, where collateral estoppel is particularly valuable. Id. at 328-329 n. 10, 99 S.Ct. at 650.
Finally, and particularly noted by the Supreme Court in Parklane Hosiery as a fac*621tor to be considered in exercising discretion to decide whether collateral estoppel should apply, there were practical and procedural disadvantages suffered by McCord in presenting his claims to this court before. He was “unable to engage in full-scale discovery or call witnesses,” id. at 331, 99 S.Ct. at 651, and indeed he alleges that some witnesses were unwilling to talk with him because they were still subject to criminal prosecution. He was also in the process of attempting to pursue his appeal with new counsel, allegedly with a notable lack of cooperation from Alch. All of these are factors which I believe should be considered before the district court decides to foreclose McCord’s tort claims, though I would leave initial determination of the balance of equitable considerations to it.6
All of this is not to say, of course, that McCord has proved his case of disloyalty and breach of fiduciary duty, even under this limited rationale. Rather, he has presented a plausible sequence of events, supported at key points by uncontested facts and affidavits from third parties, which I believe would give rise to a cause of action for tortious breach of fiduciary duty. Since motive, state of mind and how much of what Alch did was done at McCord’s bidding or with his knowledge are critical factors, summary judgment is inappropriate, so long as collateral estoppel does not raise an absolute bar, just as it would be, for instance, in an antitrust or race discrimination case in which the sequence of events alleged by the plaintiff could be either innocent behavior or carefully disguised misconduct. Summary judgment should be used sparingly when motive and intent play a leading role, when proof is likely to be largely in the hands of alleged conspirators, and when a plaintiff is faced with hostile witnesses. Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962). The fact that McCord may have a difficult time proving his case, however, is not relevant; it is the litigant’s choice whether pursuit of an issue difficult to prove and promising only meager relief is justified.
While I am in total agreement with Judge Tamm’s able discussion of the underpinnings of a section 1985 action, so that it appears McCord will indeed have his day in court, I would not read his complaint so stringently as to eliminate a potential tort claim. Nor do I believe collateral estoppel is or should be the barrier erected by the majority. I concur therefore in the remand of this case for further proceedings, but would not so circumscribe the scope of those proceedings as has the majority.

. In Fielding v. Brebbia, 399 F.2d 1003 (D.C.Cir.1968), the plaintiff sued his attorney for breach of the fiduciary relationship, alleging that the attorney had counseled him to resign his position as president of a corporation, in order to help another client replace him and take over the business. In spite of the fact that in its factual allegations supporting the claim the complaint was conclusory and vague in the extreme, this court held that its dismissal for failure to state a claim was improper, noting that “this jurisdiction has been outstandingly alert to the delicacy of the status of attorneys who undertake to counsel a client.” Id. at 1005. The court further justified its hesitancy to bar the plaintiff from his opportunity to prove his claim by noting that the confidential relationship “presents so many opportunities for the reaping of special benefits at the expense of the client by an attorney so disposed.” Id.

. The right to the undivided loyalty of one’s attorney is “absolute” in the sense that it does not depend on one’s guilt or innocence. That duty of loyalty is a crucial factor in the success of our adversary system of justice.- It is strongly stated in Ethical Consideration 5-1 of the ABA Code of Professional Responsibility:
The professional judgment of a lawyer should be exercised, within the bounds of the law, solely for the benefit of his client and free of compromising influences and loyalties. Neither his personal interests, the interests of *619other clients, nor the desires of third persons should be permitted to dilute his loyalty to his client.
Of particular relevance to this case is Disciplinary Rule 5-107(B):
A lawyer shall not permit a person who . .. pays him to render legal services for another to direct or regulate his professional judgment in rendering such legal services.

. The Supreme Court has recently observed: Common-law courts traditionally have vindicated deprivations of certain “absolute” rights that are not shown to have caused actual injury through the award of a nominal sum of money. By making the deprivation of such rights actionable for nominal damages without proof of actual injury, the law recognizes the importance to organized society that those rights be scrupulously observed; but at the same time it remains true to the principle that substantial damages should be awarded only to compensate actual injury or, in the case of exemplary or punitive damages, to deter or punish malicious deprivations of rights. Carey v. Piphus, 435 U.S. 247, 266, 98 S.Ct. 1042, 1053, 55 L.Ed.2d 252 (1978).

. For example, some decisions define the “issue” determined in the prior proceeding very narrowly, and then conclude that the new issue is different, albeit only slightly. See Brubaker v. King, 505 F.2d 534 (7th Cir. 1974); Williams v. Liberty, 461 F.2d 325 (7th Cir. 1972). Other courts have held that if the prior determination decided more than was “necessary,” the bar should not apply. Haize v. Hanover Ins. Co., 536 F.2d 576 (3d Cir. 1976). Still other courts have strictly applied the requirement that a question be “distinctly put in issue and directly determined,” especially in cases involving prior criminal proceedings. Kauffman v. Moss, 420 F.2d 1270 (3d Cir.), cert. denied, 400 U.S. 846, 91 S.Ct. 93, 27 L.Ed.2d 84 (1970).
Any of these theories could support a refusal to conclude that McCord is collaterally barred here. The issue in our prior decision was, after all, whether the assistance provided by McCord’s counsel was so ineffective as to impair his right to a fair trial. Here, on the other hand, the question is whether Bailey and Alch *620violated the fiduciary duty owed to their client; the effect of that alleged breach on McCord’s conviction or on the fairness of his trial is no longer the issue. As the Seventh Circuit has noted, “[T]he standard of proof in a malpractice action might not be as strenuous as it is when questioning the constitutional adequacy of counsel.” Walker v. Kruse, 484 F.2d 802 (7th Cir. 1973). It could be argued that this court’s conclusion on appeal that McCord’s allegations “taken as true do not make a case for disloyalty or conflict of interest” was more broadly worded than it need have been to dispose of the case, since all the court needed to decide was whether McCord had alleged a “substantial” deprivation of his right to effective assistance of counsel, which in turn affected his right to a fair trial.

. In fact, because of the court’s ruling on the civil rights issues in this case, the defendants will in fact be called to defend their conduct in this case.

. Parklane Hosiery establishes that the applicability of the doctrine of collateral estoppel rests within the discretion of the court, taking into account the equitable considerations of a particular case. A reading of the district court’s opinion in this case reveals that it believed dismissal to be mandated, once the prerequisites of collateral estoppel are established. This difference in approach would not require reversal if there were no unique equitable considerations involved in this case, but there are very unusual circumstances involved here which I believe should be considered before further judicial exploration of McCord’s claims is foreclosed.