Thalheim, Matter of

Citation853 F.2d 383
Decision Date30 August 1988
Docket NumberNo. 87-3683,87-3683
PartiesIn the Matter of Richard A. THALHEIM, Jr., Plaintiff-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Lawrence N. Curtis, Lafayette, La., for plaintiff-appellant.

Richard A. Thalheim, Jr., Thibodaux, La., pro se.

Robert L. Picou, Houma, La., appellee.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before THORNBERRY, WILLIAMS and SMITH, Circuit Judges.

PER CURIAM:

Appellant, Richard A. Thalheim, Jr., appeals an order by the United States District Court for the Eastern District of Louisiana suspending him from practicing law before it for consecutive three-month and two-year periods. Appellee is the Disciplinary Committee for the United States District Court for the Eastern District of Louisiana.

I. Facts and Prior Proceedings

Pursuant to proceedings before its Committee on Professional Responsibility commenced in 1985, the Louisiana State Bar Association found appellant guilty of neglecting to deliver a client's funds to him promptly, commingling and converting those funds, and charging a client an excessive attorney's fee. Louisiana State Bar Association v. Thalheim, 504 So.2d 822, 827 (La.1987). Viewing the record and weighing both mitigating and aggravating circumstances, the Louisiana Supreme Court found Mr. Thalheim's conduct negligent rather than intentional, and imposed a three-month suspension from the practice of law in the State of Louisiana. Id. at 827-28. This period of suspension was effective from June 18, 1987, to September 18, 1987.

Subsequently, certain judges of the United States District Court for the Eastern District of Louisiana complained that appellant had engaged in possible misconduct in proceedings before them. In accordance with Rule V of the Rules of Disciplinary Enforcement of the Eastern District of Louisiana, the court appointed a panel of three attorneys to investigate and recommend whether or not disciplinary proceedings should be instituted. Appellant avers that the panel recommended that disciplinary proceedings were not warranted. 1

Notwithstanding the panel's recommendation or lack of recommendation, a judge was assigned to conduct a disciplinary proceeding against appellant. 2 A two-and-a-half-hour hearing was held, during which the court considered two questions. The first was whether the federal court should impose sanctions on the basis of the Louisiana determination. The second was the charge that had earlier been made to the disciplinary panel and had been considered by it. This charge was that appellant should also be disciplined for violating Local Rule 2.5 3 by failing to disclose the existence of cases related to some of those he had tried before the court, for improperly splitting the causes of action in those cases, and for misrepresenting related matters to three of the district court's judges. 4

Subsequently, the hearing judge issued a memorandum dated August 12, 1987, to all members of the Eastern District bench stating that he had found the allegations of misconduct true. The memorandum recommended that appellant be suspended from practice before the Eastern District for three months on the basis of his Louisiana misconduct, this suspension to run concurrently with the Louisiana suspension, and that he be suspended from practice in the Eastern District for a consecutive one-year period on the basis of his misconduct in the federal court. On August 13, 1987, pursuant to action by a majority of its members, the court suspended appellant for three months on the basis of and concurrent with the Louisiana suspension, and increased the sanction for the federal infractions over the recommended one-year suspension to two years. The August 13th order did not include any factual findings or conclusions of law.

II. Issues on Appeal and Analysis

Appellant on oral argument expressly abandoned his appeal of his three-month suspension from practice before the district court that was based upon incidents giving rise to disciplinary action by the Louisiana Supreme Court. We summarily affirm the three-month suspension.

Appellant contests his two-year suspension from practice before the Eastern District which was based on his charged violations of the court's local Rule 2.5 and, perhaps, related infractions. Although he raises several issues on this appeal, two of them are dispositive. We find it unnecessary to consider the substantive merits of the charges against appellant.

A. Proceeding despite absence of recommendation by attorney panel

First, appellant contends that the court violated procedural due process by failing to follow its own requirements concerning proper disciplinary procedure when it instituted proceedings with respect to the alleged federal infractions despite the attorney panel's recommendation. We must agree. It is well-settled that federal district courts are bound by their own disciplinary rules when proceeding against attorneys for violation of ethical standards. See United States v. Stoneberger, 805 F.2d 1391, 1393 (9th Cir.1986); Matter of Abrams, 521 F.2d 1094, 1104-05 (3d Cir.), cert. denied, 423 U.S. 1038, 96 S.Ct. 574, 46 L.Ed.2d 413 (1975). Rule V of the Rules of Disciplinary Enforcement of the United States District Court for the Eastern District of Louisiana, reads, in relevant part:

(B) The Court shall appoint a standing committee of 42 members of the bar of this Court from which the Chief Judge of the Court shall designate a panel of at least three members thereof to investigate, in a given case, misconduct, or allegations thereof, to which Rules I(F) and IV relate, coming to the attention of a judge of the Court by complaint or otherwise, which, if substantiated, would warrant discipline of an attorney admitted to practice before this Court....

(C) 1. The panel shall complete its investigation with reasonable dispatch and shall make a report thereon in writing to the judge to whom the matter was allotted with a recommendation limited to whether or not a disciplinary proceeding should be instituted against the attorney who is the subject of the investigation....

2. If the recommendation be for institution of formal disciplinary proceedings, the Court shall designate a member or members of the bar of this Court, who need not be members of the standing committee or of the investigatory panel, to initiate and prosecute proceedings as provided in Rule V(C).

3. In any case in which these rules do not require designation of counsel to initiate a disciplinary proceeding, or in which no such designation has been made, designation of counsel to prosecute such a proceeding shall be made by the Court as the necessity therefore appears.

Neither party refers us to prior decisions by this Court construing Rule V. 5 In reviewing the interpretation and application of ethical rules or norms, we "apply the 'clearly erroneous' test to the findings of fact while carefully examining the District Court's application of relevant ethical standards." Cossette v. Country Style Donuts, Inc., 647 F.2d 526, 530 (5th Cir.1981); Brennan's, Inc., v. Brennan's Restaurants, Inc., 590 F.2d 168, 171 (5th Cir.1979); Woods v. Covington County Bank, 537 F.2d 804, 810 (5th Cir.1976). In the present case, there were no findings of fact, and the facts are not before us. The only matters before us are questions of law.

1. Possible authorization under Rule V(C)(3)

First, we consider whether the district court was justified in going forward with formal disciplinary proceedings, despite the lack of recommendation by the investigatory attorney panel, under authority alleged to be found in Rule V(C)(3). A thorough examination of this language in the context of the court's Rules of Disciplinary Enforcement as a whole convinces us that Rule V(C)(3) does not provide such justification.

It is a basic principle of statutory construction that specific words within a statute may not be read in isolation from the remainder of the entire statutory scheme. Sutton v. United States, 819 F.2d 1289, 1293 (5th Cir.1987). Rule V(B) specifies the types of alleged misconduct that are to be referred to an investigative attorney panel for recommendation, namely, those described in Rules I(F) and IV. Rule I(F) provides for referral to an investigatory attorney panel where the court has received a certified copy of judgment of an attorney's conviction "for a crime not constituting a 'serious crime.' " Rule IV encompasses other specific types of misconduct for which attorneys may be disciplined, namely, for acts or omissions which violate: the laws of any states, territories of the United States, or the District of Columbia; the court's rules relating to the professional conduct of lawyers; or the Code of Professional Responsibility adopted by the court.

The wording of the court's regulatory scheme as it applies to this proceeding is in mandatory terms throughout. The word is "shall" not "may." First, the Chief Judge is required to designate a panel of at least three attorneys from the standing committee of 42 bar members to investigate alleged misconduct of the types characterized in Rules I(F) and IV. Rule V(B). If this panel recommends institution of formal disciplinary proceedings, the court must then designate counsel "to initiate and prosecute disciplinary proceedings as provided in Rule V(C)." Rule V(C)(2). Rule V(D) is crucial. It states that "[b]efore any final discipline is imposed for any misconduct to which the provisions of Rules I(F) and IV relate, a disciplinary proceeding shall be instituted by counsel designated for such purpose ..." (Emphasis added.) Rule V(C)(3) provides that in cases where "these rules do not require designation of counsel to initiate a disciplinary proceeding ..., designation of counsel to prosecute such a proceeding shall be made by the Court as the necessity therefore [sic ] appears." (Emphasis added.)

It follows, then, that the only cases in...

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