Grievance Adm'r v. August

• Decision Date: 29 August 1991
• Docket Number: Docket No. 88132
• Citation: 438 Mich. 296,475 N.W.2d 256
• Parties: GRIEVANCE ADMINISTRATOR, Attorney Grievance Commission, State of Michigan, Respondent-Appellant, v. Irving A. AUGUST, Petitioner-Appellee.
• Court: Michigan Supreme Court

Page 256

475 N.W.2d 256

438 Mich. 296

GRIEVANCE ADMINISTRATOR, Attorney Grievance Commission State of Michigan, Respondent-Appellant, v. Irving A. AUGUST, Petitioner-Appellee.

Docket No. 88132.

Supreme Court of Michigan.

Argued April 2, 1991.

Decided Aug. 29, 1991.

[438 Mich. 299] Philip J. Thomas, Grievance Adm'r by Murray J. Muscat, Associate Counsel, Attorney Grievance Com'n, Detroit, for respondent-appellant.

F. Philip Colista, Detroit, for petitioner-appellee.

Michael Franck, Counsel of Record, Marcia L. Proctor, Lansing, for State Bar of Mich.

OPINION

BOYLE, Justice.

We are asked to review the Attorney Discipline Board's order reinstating the license of Irving August to practice law in the State of Michigan. We vacate the Attorney Discipline Board's order of reinstatement, and remand to the board for reconsideration in light of this opinion.

Facts

On June 28, 1983, petitioner was convicted of conspiring to defraud the United States of the due administration of justice in violation of 18 U.S.C. § 371, impeding the due administration of justice in violation of 18 U.S.C. § 1503, and attempting to influence a court clerk in the discharge of her official duties in violation of 18 U.S.C. § 1503. These convictions stemmed from Mr. August's collaboration with a clerk of the court to manipulate the blind- draw system for assigning judges in the United States Bankruptcy Court for the Eastern District of Michigan. The object was to avoid assignment of cases to Judge George Brody, who, of the three judges sitting on the bankruptcy court, was known to scrutinize and reduce attorney fees. In affirming August's conviction, the United States Court of Appeals for the Sixth Circuit detailed the facts and circumstances surrounding the convictions:

"The relevant period of time is that covered by the counts of the indictment related to this appeal--from October 3, 1979 to October 30, 1980. During this period, three bankruptcy judges sat in the Eastern District of Michigan, Southern Division: Judge Hackett, Judge Brody, and Judge Patton. Judge Patton took all of the Chapter 13 cases. A blind draw system was designed to assign to him approximately 30% of the Chapter 7 and Chapter 11 cases. The system was operated by using decks of 100 3"' X 5"' index cards, each typically containing 30 marked for Judge Patton and 35 marked for each of Judges Brody and Hackett. The cards were shuffled, numbered, and sealed on three sides so that the judge's name was not visible. In eighteen of the seventy-two packs used while Bogoff was an intake clerk, the order of the cards was adjusted so that no two cards bearing the same judge's name were next to each other; in other cases, the cards were randomly mixed. When a bankruptcy petition was filed, the intake clerk removed the top card from a judge assignment deck, turned it over to reveal the name of the judge to whom the case was assigned, and stamped that judge's name on the petition.

"August's law firm filed about one-half of the Chapter 11 cases in the Eastern District of Michigan during the period here involved. August had a romantic relationship during this period with intake clerk Bogoff.2 Although she was not the only clerk in the office and filed only about half of all bankruptcy petitions, she arranged matters so that she handled almost all of the judge assignments in cases involving August's firm. She allowed members of that firm to come behind the counter to drop off filings without waiting in line. She permitted August to leave on her desk his briefcase.

"The government's theory was that Bogoff would take several petitions to the counter, draw a card and look at the judge's name. If Judge Patton's or Judge Hackett's name appeared, she would file the Chapter 11 petition presented by the August firm.3 Sixty-eight Chapter 11 cases were filed by August's firm during this period, of which 92% were handled by Bogoff and only nine initially were assigned to Judge Brody. If multiple petitions were filed involving the same parties, the cases were eventually consolidated and assigned to the judge to whom the first of the petitions had been assigned. After consolidations, only four Chapter 11 cases filed by the August firm remained assigned to Judge Brody.4

"At trial, the government adduced circumstantial evidence that it was possible to manipulate the blind draw system; that Bogoff had filed almost all of August's cases; and that a disproportionately low percentage of August's cases were assigned to Judge Brody. Professor David Doane, an expert statistician, testified that there was a 99.97% chance that more August cases would have been assigned to Judge Brody if the blind draw system were truly random."

United States v. August, 745 F.2d 400, 402-403 (CA 6, 1984).

On the same day that the judgments of conviction were entered, petitioner was automatically suspended from the practice of law pursuant to GCR 1963, 969.1(b). ¹ On July 20, 1984, following public hearings, a Wayne County hearing panel ordered the license of Irving August revoked.

Meanwhile, in November, 1984, following the affirmance of his convictions, ² petitioner began serving his concurrent two-year sentences at the federal prison in Marion, Illinois. In the fall of 1985, he was transferred to a halfway house in the City of Detroit. He remained there until November 19, 1985, when district court Judge Ralph Freeman reduced the sentence to time already served. Thus, August served approximately one year of incarceration.

The petition for reinstatement of his license to practice law was filed October 28, 1988. Hearings were held for four days, and on August 17, 1989, the Wayne County hearing panel issued its report and order denying reinstatement. The three-member panel was split, with Chairman Harry A. Carson favoring reinstatement. The two-member majority adopted Chairman Carson's findings of fact, which summarized the testimony. The majority also accepted the dissenter's conclusion that petitioner had shown by clear and convincing evidence that he had fulfilled the requirements for reinstatement set forth in MCR 9.123(B), with one crucial exception: The majority found that the petitioner had not established by clear and convincing evidence that he could be safely recommended to the public, the courts, and the legal profession as a person fit to be consulted by others and to represent them and otherwise act in matters of trust and confidence, and, in general, to aid in the administration of justice as a member of the bar and as an officer of the court as required by MCR 9.123(B)(7). The majority stated that "[t]he nature and seriousness of [petitioner's] acts must be considered in assessing the ability to safely recommend the petitioner to the public, the court, and the legal profession." Ultimately, the reinstatement panel was not convinced "that petitioner's subsequent conduct, no matter how exemplary, has sufficiently ameliorated the taint placed upon the legal profession, by his commission of the crimes in question, to the extent that he could now be safely recommended as a person of trust."

On review, the Attorney Discipline Board posed its inquiry as "whether there is proper evidentiary support in the record for the conclusion of the hearing panel majority that the nature of [petitioner's] criminal conduct constitutes a bar to his reinstatement, regardless of his subsequent exemplary behavior." In the view of the discipline board, affirmance of the panel's denial of reinstatement would require a ruling that certain types of professional misconduct are so egregious that reinstatement should never be granted. Noting that the Michigan Supreme Court had never so ruled, the discipline board found that petitioner had established his eligibility for reinstatement in accordance with the present rules. On December 22, 1989, the Attorney Discipline Board entered an order reversing the hearing panel's denial of reinstatement, and granted the petition for reinstatement.

This Court granted the grievance administrator's application for leave to appeal on December 6, 1990. 437 Mich. 1202, 466 N.W.2d 281.

Standard of Review

It has been stated many times that the findings of the hearing panel and the Attorney Discipline Board are to be reviewed for proper evidentiary support on the whole record. In re Freedman, 406 Mich. 256, 277 N.W.2d 635 (1979); In re Grimes, 414 Mich. 483, 326 N.W.2d 380 (1982). In this case, there is no challenge to the factual findings of the hearing panel, ³ but rather to the panel's ultimate determination that petitioner should not now be reinstated. While the board reviews that judgment for adequate evidentiary support, the board at the same time possesses a measure of discretion with regard to its ultimate decision. MCR 9.118(D), In re Daggs, 411 Mich. 304, 318-319, 307 N.W.2d 66 (1981). The power to regulate and discipline members of the bar rests ultimately with this Court pursuant to constitutional mandate. Const.1963, art. 6, § 5; In re Schlossberg v. State Bar Grievance Bd., 388 Mich. 389, 200 N.W.2d 219 (1972).

Because the board applied an erroneous interpretation of the standards for reinstatement, we vacate its order, and remand to the board for further consideration in light of this opinion.

Analysis

An attorney whose licence has been revoked bears the burden of showing by clear and convincing evidence that the conditions of eligibility for reinstatement have been met. Those conditions are set forth in MCR 9.123(B)(1)-(7), as follows:

"(1) he or she desires in good faith to be restored to the privilege of practicing law in Michigan;

"(2) the term of the suspension ordered has elapsed or 5 years have elapsed since the revocation of the license;

"(3) he or she has not practiced or attempted to practice law contrary to the requirement of his or her suspension or revocation;

"(4) he or she has complied fully with the order of discipline;

"(5) his or her conduct since the...