Cook, Matter of, D-217

• Decision Date: 30 January 1995
• Docket Number: No. D-217,D-217
• Citation: 49 F.3d 263
• Parties: In the Matter of Rufus COOK, Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 263

49 F.3d 263

In the Matter of Rufus COOK, Respondent.

No. D-217.

United States Court of Appeals, Seventh Circuit.

Argued Oct. 6, 1994.

Decided Jan. 30, 1995.

Before EASTERBROOK, RIPPLE, and KANNE, Circuit Judges.

Attorney Disciplinary Proceeding.

EASTERBROOK, Circuit Judge.

Rufus Cook, a member of this court's bar, represented the plaintiff class in a long-running action against the City of Chicago. After losing a number of preliminary skirmishes, see Alexander v. Chicago Park District, 709 F.2d 463 (7th Cir.1983), Alexander v. Chicago Park District, 773 F.2d 850 (1985), Cook entered into a settlement on behalf of one subclass, with 19 members, and abandoned efforts to obtain relief for the remaining plaintiffs. Chicago agreed to pay $500,000, a sum that included all costs and attorneys' fees, in exchange for a release. Because this was a class action, Fed.R.Civ.P. 23(e) required approval of the settlement and all claims to the fund.

Cook waived any claim for attorneys' fees but sought to recover $350,000 in expenses, which would have left just $150,000 for distribution to the class. Judge Rovner disapproved this allocation of the proceeds, observing that the expenses were inflated--and suspect as well, because much of the work for which reimbursement was claimed had been done by firms in which Cook or his former wife had an ownership interest. Judge Rovner concluded that the combination of unusually high expenses and self-dealing was intolerable and curtailed the award accordingly. Both sides took appeals--Cook in search of a larger award, and Chicago in search of assurances that it could withhold payment until the details of distribution had been worked out. Before we could decide the appeal, another settlement was reached. This agreement, reproduced in Alexander v. Chicago Park District, 927 F.2d 1014, 1019-21 (7th Cir.1991), called for both sides to dismiss their appeals, for the district court to vacate its opinion (which had been highly critical of Cook's ethics and performance), and for the district court to approve the original settlement. The agreement, which the district court entered as a judgment, provided: "Plaintiffs' counsel is hereby awarded statutory costs of $128,705.68", the same amount Judge Rovner originally had approved.

Chicago then disbursed the funds. Cook remitted $150,000 to the class members, keeping $350,000 for himself. When she found out what Cook had done, Judge Rovner was appalled. She ordered Cook to pay the residue, and when he did not pay she held him in contempt of court. We affirmed this decision, rejecting both procedural and substantive defenses. Cook's procedural defense was that Judge Rovner had not afforded him the hearing he requested; we held that no factual hearing was necessary (there had been plenty of argument), because Judge Rovner was in possession of the documents and Cook had not identified any disputed issue of material fact requiring an evidentiary hearing. Cook's substantive defense was that he kept the $350,000 not under the court's order but under contingent-fee contracts with the plaintiffs, contracts that entitled him to full reimbursement for costs. We concluded that Judge Rovner was entitled to find that she had never been notified of these agreements. Moreover, it appeared to us, as it had to Judge Rovner, that Cook "has demonstrated that when [he] disagrees with the Court's rulings, [he] believes [he] has the right to ignore them." 927 F.2d at 1022. When told to pay the correct amount, Cook neither paid nor sought a stay; he simply disobeyed the order. (He has since asserted that, by the time the judge instructed him to pay the additional $221,294.04 to the class, he had spent the money and could not comply. But he did not tell this to Judge Rovner, let alone request an evidentiary hearing on this subject in a timely fashion, even though impossibility would have been a defense to the contempt citation. For current purposes, then, ability to comply at the critical time is established. United States v. Rylander, 460 U.S. 752, 103 S.Ct. 1548, 75 L.Ed.2d 521 (1983).)

At the conclusion of the opinion affirming the order holding Cook in contempt of court appears the passage that gives rise to the current proceeding:

This opinion sets forth in some detail the unprofessional manner in which Cook Partners has prosecuted this litigation. Although many of the issues raised by Cook are frivolous, we see no point in heaping further sanctions on a lawyer and law office facing large contempt fines. However, a copy of this opinion will be submitted to the Illinois Attorney Registration and Disciplinary Commission with a suggestion that it investigate the conduct of Rufus Cook and Cook Partners in this litigation. Circumventing and ignoring district court orders in the manner described above will not be condoned.

927 F.2d at 1025. The state's disciplinary commission (the ARDC) opened an investigation and compiled a large record. But it did not reach a decision. Cook objected to any consideration of Judge Rovner's findings, and the ARDC issued a subpoena requiring Judge Rovner to appear and submit to cross-examination about the proceedings in her court and the rationale for her findings. Not surprisingly, she declined, observing that federal judges speak through their opinions, and that their mental processes are not subject to examination. Fayerweather v. Ritch, 195 U.S. 276, 306-07, 25 S.Ct. 58, 67-68, 49 L.Ed. 193 (1904). The ARDC's hearing panel then excluded from evidence the district court's findings of fact and conclusions of law, its opinions, and even the transcript of proceedings in the federal case. Following this decision, the Administrator of the ARDC withdrew the complaint, and the inquiry petered out. The failure of the ARDC to complete its investigation led us to open a disciplinary proceeding of our own. We have received the evidentiary record compiled by the ARDC and have held oral argument. Fed.R.App.P. 46(b), (c). Cook was offered an opportunity to make a statement but declined to do so. The case is ready for decision.

On observing what appears to be misconduct by a member of the bar, this court traditionally has referred the matter to state officials. Although it may seem incongruous for federal judges to ask state officials to inquire into conduct in federal proceedings, three reasons underlie our approach. First, state bars are much larger than federal bars, and with size has come the development of the means to investigate charges of misconduct and resolve factual disputes. Second, for most attorneys federal cases represent a small portion of their practices, and what appears to the federal court to be an isolated incident may appear to the state bar to be part of a pattern of conduct with darker overtones. Or the reverse--what appears serious to the federal court may be the only blot on a clean record and therefore may not deserve discipline. Either way, the state bar has the superior perspective. Third, because principles of cooperative federalism have led the federal courts to extend members of the state bar an almost automatic right to practice in federal court, acts in federal court ought to be as salient to the state disciplinary officials as acts in state court. Cooperative federalism is reciprocal.

The response of the ARDC to the reference in this case gives us pause about the continuing vitality of our practices. New evidentiary proceedings were not necessary. Findings of fact and law had been made (and affirmed) in the federal litigation. Obtaining the broader picture was potentially much more important. But the ARDC did not attempt to place Cook's delicts in the context of his career; it viewed them in isolation. And having begun an independent factual inquiry, it failed to carry through. It must have been obvious to everyone involved in the ARDC's proceedings that Judge Rovner would not appear as a witness. Inquiry beneath the surface of a judge's opinion is forbidden. If the ARDC thought that it needed to make an independent assessment of the facts, it could have proceeded using the documents and depositions it had collected. Whether Cook violated his fiduciary responsibility to the class, whether he violated the terms of the judgment--these and other issues lay open to determination on the record. But the ARDC refused to decide them. Taking the position that unless the judge appears as a witness it will not adjudicate a charge of misconduct, in federal court, by a member of its bar, is equivalent to taking the position that it will disregard misconduct in federal court, period. This cannot be described as a cooperative approach.

Indeed, the ARDC's belief that the questions of fact and law resolved in the contempt proceedings were open to reexamination is worth some thought. Cook understandably wanted to avoid the force of these findings, and he sought to wage a collateral attack on them. Ordinarily a suspicion of misconduct is just that: the court observes questionable practices by an attorney, but the attorney, not a party to the case, is entitled to an independent factual inquiry. Cook, however, was a...