Butler v. Biocore Med. Tech.

• Decision Date: 04 November 2003
• Docket Number: No. 00-3181.,00-3181.
• Citation: 348 F.3d 1163
• Parties: Timothy F. BUTLER, Movant-Appellant, v. BIOCORE MEDICAL TECHNOLOGIES, INC.; Biocore, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

348 F.3d 1163

Timothy F. BUTLER, Movant-Appellant, v. BIOCORE MEDICAL TECHNOLOGIES, INC.; Biocore, Inc., Defendants-Appellees.

No. 00-3181.

United States Court of Appeals, Tenth Circuit.

November 4, 2003.

COPYRIGHT MATERIAL OMITTED

Timothy F. Butler, pro se.

Before HENRY, HOLLOWAY and LUCERO, Circuit Judges.

HOLLOWAY, Circuit Judge.

I

This case is an appeal from an order of the District Court for the District of Kansas, finding that Appellant, attorney Tim Butler, violated the Kansas Code of Professional Conduct and the Kansas Rules of Professional Conduct. Biocore Med. Techs., Inc. v. Khosrowshahi, 181 F.R.D. 660 (D.Kan., 1998). Butler asks this court to vacate these findings. For the reasons detailed below, we decline to do so.

The challenged district court order arose in the context of a dispute between Biocore Medical Technologies and Biocore, Inc. (collectively, "Biocore") on one side and Hamid Khosrowshahi ("Khosrowshahi") and Margaret Callaci on the other. Khosrowshahi sued his former employer, Biocore, alleging that he was owed stock and deferred compensation. Biocore sued Khosrowshahi for alleged misappropriations of trade secrets. Biocore filed suit in the District of Kansas, while Khosrowshahi filed in the Southern District of New York. The two actions were consolidated in the District of Kansas.

On April 8, 1992, the district court entered an order allowing Butler, a member of the New York and Connecticut bars, to appear pro hac vice, representing Khosrowshahi, with Ruth Benien as local counsel. Biocore moved to disqualify Butler and to revoke his pro hac vice admission, alleging that Butler violated the Federal Rules of Civil Procedure, the Kansas Canons of Professional Responsibility ("CPR"), the Kansas Model Rules of Professional Conduct ("MRPC"), and the District of Kansas' local rules.¹ Specifically Biocore claimed that Butler violated Fed.R.Civ.P. 45(b)(1) (requiring notice to all parties of subpoenas) and 5(d) (requiring the filing of papers that have been served on a party be given to the court clerk); D. Kan. Rules 83.5.4 (pro hac vice requirements for involvement of local counsel) and 26.3 (requiring the filing of notice of service of discovery disclosures, requests, or responses); MRPC 3.4(b) (prohibiting attorneys from offering improper inducements to witnesses), 4.2 (prohibiting communications of the subject matter of representation with a represented party), and 8.4(g) (providing that it is professional misconduct for a lawyer to "engage in any ... conduct that adversely reflects on the lawyer's fitness to practice law");² and Canon 9 of the CPR (requiring attorneys to avoid the appearance of impropriety). The district court made specific findings of fact regarding Butler's conduct and concluded that he had violated all these rules except MRPC 3.4(b) and 4.2. Biocore, 181 F.R.D. at 666-75.

Nonetheless, the district court denied the motion to disqualify Butler and instead ordered him to remedy all outstanding violations of Fed.R.Civ.P. 5(d) and Local Rules 26.3 and 83.5.4. The district court also ordered the clerk to mail a copy of the order containing the district court's findings that Butler had violated rules of professional conduct to every court where Butler had been admitted to practice. Approximately two months later, in November of 1998, the district court issued an order disqualifying Butler for violation of a protective order and reprimanding him for continued ethical violations. Biocore Med. Techs., Inc. v. Khosrowshahi, Nos. Civ.A. 98-2031-KHV & Civ.A. 98-2175-KHV, 1998 WL 919126 (D.Kan. Nov.6, 1998).

Butler filed an interlocutory appeal that was dismissed on April 5, 1999. The district court then issued a final order on May 4, 2000. BioCore v. Khosrowshahi, 96 F.Supp.2d 1221 (D.Kan.2000). Butler now appeals only the first order-the one mailed to every court to which Butler had been admitted.

II

Butler explicitly appeals only the District Court's finding that he violated Canon 9 and MRPC 8.4(g). Appellant's Brief at 2-3. As Butler later explains, he is appealing only the findings of "ethical violations," claiming that they "impact heavily on Butler's stature as an attorney." Id. at 8. Implicitly, however, Butler also disputes all the district court's findings since they form the basis of the MRPC 8.4(g) violation.

A Jurisdiction

Before reaching the merits of this appeal, we must first ascertain whether we have jurisdiction. Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94-95, 118 S.Ct. 1003, 140 L.Ed.2d 210 (U.S.1998). "This question the court is bound to ask and answer for itself, even when not otherwise suggested, and without respect to the relation of the parties to it." Id. at 94, 118 S.Ct. 1003. This threshold requirement is "inflexible and without exception." Id. at 95, 118 S.Ct. 1003. Pursuant to 28 U.S.C. § 1291 as limited by Article III, we have jurisdiction to hear appeals from the final orders of district courts, including post-judgment appeals by attorneys of orders that "directly aggrieve them." Weeks v. Indep. Sch. Dist., 230 F.3d 1201, 1207 (10th Cir.2000). We, therefore, have jurisdiction to hear this appeal only if the order Butler challenges has "directly aggrieve[d]" him. Id. In other words, we have jurisdiction only if Butler has been "injured in the legal sense," by the order being appealed. United States v. Gonzales, 344 F.3d 1036, 1039 (10th Cir.2003). For the reasons detailed below, we hold that he has.

Here, Butler appeals, post-judgment, portions of a district court order that found him to have committed "ethical violations." Other than making the finding of attorney misconduct, this order neither expressly identified itself as a reprimand nor imposed any sanction, monetary or otherwise. The order was, however, mailed to every court in which Butler had been admitted to practice. Thus, the injury Butler may claim is the damage widely done to his professional reputation. The question of whether we have jurisdiction to hear this appeal, therefore, distills to the question of when, if ever, an order thus affecting an attorney's professional reputation imposes a legally sufficient injury to support appellate jurisdiction. For the reasons detailed below, we hold that it does.

Heretofore we have not directly addressed this question. See id. at 1040 (recognizing that we have "not decided whether an attorney is `directly aggrieved' by an order simply finding misconduct" and declining to decide the question). Instead, we have held that damage to an attorney's professional reputation is legally sufficient in connection with a disqualification order, Weeks, 230 F.3d at 1207, and that such damage is sufficient to sustain an appeal of a disqualification order even though the underlying case was settled, Johnson v. Board of County Comm'rs, 85 F.3d 489, 492-93 (10th Cir.1996). Other circuits, however, have directly addressed whether an order damaging only an attorney's professional reputation and not accompanied by any other form of sanction can be appealed and have come to one of three results: never appealable, always appealable, and appealable only if the order is "expressly identified as a reprimand."

The Seventh Circuit is the only circuit falling into the first category and considers an order only damaging an attorney's professional reputation as never appealable. Clark Equip. Co. v. Lift Parts Mfg. Co., Inc., 972 F.2d 817, 820 (7th Cir.1992) ("[A]n attorney may not appeal from an order that finds misconduct but does not result in monetary liability, despite the potential reputational effects."). In reaching its conclusion, the Seventh Circuit balanced the severity of the harm of damage to an attorney's professional reputation-characterizing it as a "speculative contingency" rather then a concrete injury, id., — against the practical considerations of "congested appellate dockets and ... the difficulty of assuring an adversary contest in most such appeals." Id. The result of this balancing test, the Seventh Circuit concluded, is that an order damaging only an attorney's professional reputation, while potentially a significant enough injury to satisfy the case or controversy requirements of Article III, is not a "final decision" for the purposes of § 1291 and, therefore, not appealable. Id.; Bolte v. Home Ins. Co., 744 F.2d 572, 573 (7th Cir.1984). The Seventh Circuit did, however, leave open the possibility that an attorney damaged by an order finding misconduct alone could seek relief by a writ of mandamus. Clark, 972 F.2d at 820.

The Fifth and District of Columbia Circuits fall into the second category and both allow attorneys to appeal orders that find misconduct alone. Walker v. City of Mesquite, 129 F.3d 831, 832-33 (5th Cir.1997) (holding that "the importance of an attorney's professional reputation, and the imperative to defend it when necessary, obviates the need for a finding of monetary liability or other punishment as a requisite for the appeal of a court order finding professional misconduct"); Sullivan v. Committee on Admissions and Grievances, 395 F.2d 954, 956 (D.C.Cir.1967) (holding that a finding of professional misconduct not accompanied by other sanctions is analogous to a defendant found guilty but given a suspended sentence and is appealable). The Ninth Circuit also falls into this category, though through a slightly different approach. It allows attorneys to appeal orders that are "inordinately injurious to a lawyer's reputation" but does not allow appeals from orders that are properly considered "routine judicial commentary." United States v. Talao, 222 F.3d 1133, 1137 (9th Cir.2000). The Ninth Circuit, however, considers an order finding a knowing and wilful violation of an ethical rule as, per se, "inordinately injurious" and, therefore, appealable. Id. at 1337-38. These circuits base their decisions primarily on how severe they consider an injury to an attorney's reputation. The Fifth Circuit, for...