Conticommodity Services, Inc. v. Ragan
| Decision Date | 06 August 1987 |
| Docket Number | 87-1761,Nos. 87-1760,s. 87-1760 |
| Citation | 826 F.2d 600 |
| Parties | CONTICOMMODITY SERVICES, INC., et al., Plaintiffs-Appellees, v. David J. RAGAN, et al., Defendants. Appeal of William F. TUETING, Alan S. Gilbert and Sonnenschein, Carlin, Nath & Rosenthal. In the Matter of William F. TUETING and Alan S. Gilbert, Petitioners. |
| Court | U.S. Court of Appeals — Seventh Circuit |
William F. Tueting, Sonnenschein Carlin Nath & Rosenthal, Chicago, Ill., for petitioners.
David T. Pitikin, Sidley & Austin, Chicago, Ill., for plaintiffs-appellees.
Before POSNER, FLAUM, and EASTERBROOK, Circuit Judges.
This is an interlocutory appeal, cast alternatively as a petition for mandamus under 28 U.S.C. Sec. 1651. The appellant-petitioner is Sonnenschein, a Chicago law firm, and two of its members (but we shall suppress that detail to simplify the opinion). Judge Hart ordered the firm, against its will, to represent an individual, David Ragan, in Ragan's multidistrict litigation (which had been transferred to the Northern District of Illinois) against Conticommodity Services, Inc. The appeal and petition challenge that order.
Ragan's lawsuit involves both a multimillion-dollar claim against Conticommodity and a multimillion-dollar counterclaim. Sonnenschein had represented Ragan in one part of the litigation but had withdrawn. While the litigation with Conticommodity was pending, Ragan filed a petition for bankruptcy in the Eastern District of Kentucky. The filing was under Chapter 11 of the Bankruptcy Code, and at first no trustee was appointed. In his capacity as debtor in possession Ragan asked the bankruptcy court to appoint Sonnenschein to represent the bankrupt estate in the Conticommodity litigation. Before the court acted on this request, a trustee in bankruptcy was appointed. The bankruptcy court lifted the automatic stay to permit the litigation to go forward notwithstanding Ragan's bankruptcy, but refused to appoint Sonnenschein, because a majority of Ragan's creditors thought the firm was demanding too high a retainer. Nevertheless, Judge Hart, presiding over the Conticommodity litigation in the Northern District, decided that it would be unfair if Ragan were not represented in the litigation. So, invoking 28 U.S.C. Sec. 1915(d) and N.D.Ill. Rules 3.82(c), (e), the judge appointed Sonnenschein to represent Ragan. No doubt the judge intends to award Sonnenschein fees and costs for its services from time to time; and Sonnenschein will be able to submit any such award to the trustee, where it will enjoy a high priority as an administrative claim. But Sonnenschein would prefer not to participate in the Conticommodity litigation on these terms.
The initial question is whether we have jurisdiction of the appeal. This is a difficult question, though fortunately one unnecessary to answer. The order is in effect a mandatory injunction commanding Sonnenschein to undertake costly legal services with an uncertain prospect of remuneration, and as such might seem to be appealable, irrespective of finality, under 28 U.S.C. Sec. 1292(a)(1). Courts are reluctant, however, to construe judicial orders as mandatory injunctions for purposes of section 1292(a)(1), even when the orders are orders "to do" and traditionally equitable. See, e.g., In re City of Springfield, 818 F.2d 565, 567 (7th Cir.1987); United States v. Hansen, 795 F.2d 35, 38-39 (7th Cir.1986); Uehlein v. Jackson Nat'l Life Ins. Co., 794 F.2d 300, 303 (7th Cir.1986). Interlocutory appeals are disfavored because generally they interrupt litigation and burden appellate courts unduly.
The order directing Sonnenschein to represent Ragan can be likened to an order refusing to disqualify a law firm from representing a litigant; the analogy is reinforced by Sonnenschein's earlier representation of Ragan. And an order refusing to disqualify a law firm, as well as an order disqualifying a law firm, neither is deemed an injunction (despite its form) nor is appealable under the "collateral order" doctrine. See Richardson-Merrell, Inc. v. Koller, 472 U.S. 424, 105 S.Ct. 2757, 86 L.Ed.2d 340 (1985); Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 101 S.Ct. 669, 66 L.Ed.2d 571 (1981). These cases may be distinguishable from the present one, however. Both involved an appeal by a party, and if the order disqualifying or refusing to disqualify counsel was both incorrect and prejudicial it could be rectified upon the losing party's appeal from the final judgment in the litigation, simply by reversing that judgment. There was no urgency about an immediate appeal. But appealing from the final judgment would not be a remedy for Sonnenschein, a nonparty. In Palmer v. City of Chicago, 806 F.2d 1316, 1318-20 (7th Cir.1986), we allowed a defendant to appeal immediately an order that it pay attorney's fees to persons unlikely to be financially capable of returning them if the order was later held invalid. If Sonnenschein renders legal services to Ragan for which it never gets reimbursed, it will, like the defendant in Palmer, have suffered an irreparable harm--unjustly so, if the order compelling it to render those services against its will was unlawful.
However, we need not resolve the issue of appealability. For although mandamus may not be used to get around the limitations on interlocutory appeals, Allied Chemical Corp. v. Daiflon, Inc., 449 U.S. 33, 101 S.Ct. 188, 66 L.Ed.2d 193 (1980) (per curiam); Mulay Plastics, Inc. v. Grand Trunk W.R.R., 742 F.2d 369, 371 (7th Cir.1984), "confining courts to the lawful exercise of their jurisdiction is the traditional use of the writ" (Bailey v. Sharp, 782 F.2d 1366, 1367 (7th Cir.1986) (per curiam); see also Roche v. Evaporated Milk Ass'n, 319 U.S. 21, 26, 63 S.Ct. 938, 941, 87 L.Ed. 1185 (1943)), and this language precisely describes its invocation in this case.
In appointing counsel for Ragan, Judge Hart proceeded on the assumption that Ragan needed counsel in the litigation...
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