In re Schuchardt
| Decision Date | 10 December 2019 |
| Docket Number | No. 3:18-MC-39,3:18-MC-39 |
| Parties | IN RE: ELLIOTT J. SCHUCHARDT |
| Court | U.S. District Court — Eastern District of Tennessee |
This is an attorney disciplinary matter regarding Elliott J. Schuchardt ("Schuchardt"). On June 22, 2018, then Chief United States District Judge Thomas A. Varlan received information suggesting that Schuchardt "violated the Rules of Professional Conduct as adopted by the Supreme Court of Tennessee" or "engaged in unethical conduct tending to bring the Court or the bar into disrepute." E.D. TENN. L.R. 83.7(a). The Court issued a Show Cause Order requiring Schuchardt to demonstrate why disciplinary action should not be taken against him. [D. 7]. Upon Schuchardt's responses [D. 9, 13] and motion to vacate prior sanction orders [D. 11], the matter was referred to the Honorable H. Bruce Guyton, Chief United States Magistrate Judge, for review and recommendation. E.D. TENN. L.R. 83.7(h).
This matter is now before the Court on the Report and Recommendation ("R&R") filed by Judge Guyton [D. 14], regarding the disposition of the attorney discipline matter and Schuchardt's motion to vacate prior sanction orders [D. 11]. Schuchardt has raised eight objections to the R&R [D. 18] and has filed additional motions to unseal the case [D. 19], for oral argument [D. 20], and for a hearing [D. 21]. The R&R recommends that Schuchardt be found in violation of the Tennessee Rules of Professional Conduct and the Federal Rules of Bankruptcy Procedure. Further, the R&R recommends that this Court (1) reprimand Schuchardt for his accusations against Judge Bauknight (2) suspend Schuchardt from the practice of law in the United States District Court for the Eastern District of Tennessee and all of its divisions and units for a period of two years, and (3) permit Schuchardt to apply to this Court for early reinstatement pursuant to several application requirements after the expiration of one year.
For the reasons that follow, the Court finds Schuchardt's objections to be without merit and all eight objections are overruled. The R&R will be adopted. Schuchardt's motion to vacate prior sanction orders will be denied. Schuchardt's motion to unseal the case will be granted. Schuchardt's motion for oral argument and a hearing was untimely, and will be denied as waived.
Further, the Court finds that Schuchardt has violated the Tennessee Rules of Professional Conduct, the Federal Rules of Bankruptcy Procedure, the Local Rules for the Eastern District of Tennessee, and has "engaged in unethical conduct tending to bring the Court or the bar into disrepute." Consequently, the Court has determined that disciplinary action is warranted.
This Court has the inherent power and responsibility to oversee the conduct of attorneys that practice in the Eastern District of Tennessee. See In re Moncier, 550 F. Supp. 2d 768, 772 (E.D. Tenn. 2008); see also In re Landstreet, 490 F. App'x 698, 701-02 (6th Cir. 2012) (). Attorney disciplinary proceedings are part and parcel of that solemn responsibility. "A disciplinary proceeding is neither criminal nor civil; rather, it is an investigation into the lawyer's conduct to determine whether the lawyer may continue to practice a profession that is imbued with the public interest and trust." In re Landstreet, 490 F. App'x at 702 (quotations omitted).
At a minimum, attorneys appearing before courts of the Eastern District of Tennessee bear the responsibility of adhering to the standards for all attorneys practicing in Tennessee. E.D. TENN.L.R. 83.6. Even still, federal courts have their own distinct requirements and standards for attorneys appearing before them. These standards are not necessarily greater or lesser than courts of the state bar, but reflect the different nature of federal courts. To that end, "[a]ttorneys practicing law in the Eastern District of Tennessee are held to certain requirements and standards separate from those imposed by state regulatory bodies." In re Cowan, 620 F. Supp. 2d 867, 868 (E.D. Tenn. 2009) (citing In re Moncier, 550 F. Supp. 2d at 769-70). When the professional standards for Tennessee attorneys, for attorneys in the Eastern District of Tennessee, or both, are violated, this Court bears the unwelcome, but necessary, task of imposing discipline upon the offending attorney.
When discipline must be imposed, courts have inherent authority to suspend or disbar lawyers due to the lawyer's role as an officer of the court which granted admission. In re Snyder, 472 U.S. 634, 643 (1985). When an attorney transgresses both the standards of the bar of the Eastern District of Tennessee and the professional standards for all Tennessee attorneys without contrition, as is the case here, this Court must solemnly and soberly impose an appropriate sanction for that attorney's misconduct.
On August 3, 2017, Schuchardt made an allegation in open court during an August 3, 2017 hearing in the case In re Jennifer N. Roberts, No. 3:17-bk-31543, that the Honorable Suzanne Bauknight, Bankruptcy Judge for the Eastern District of Tennessee, had engaged in ex parte communications with the Chapter 13 Trustee, Gwendolyn Kerney ("Kerney"). On August 10, 2017, Judge Bauknight conducted a show cause hearing regarding Schuchardt's accusation. Prior to the hearing, Schuchardt, at Judge Bauknight's direction, filed an affidavit containing the basisfor his accusation. As a basis for his accusation, Schuchardt pointed to conversations he had with Edward Shoemaker ("Shoemaker"), Maurice Guinn ("Guinn"), and Kevin Chern ("Chern"), present and former law partners of UpRight Law, Schuchardt's firm. Likewise, Schuchardt claimed that the "odd timing" of certain orders issued by Judge Bauknight sanctioning his misconduct "created an inference that [Tiffany] DiIorio" ("DiIorio"), Trial Attorney for Region 8 of the United States Trustee Program, "and/or Kerney might be discussing issues from the [UpRight] litigation with the court."
At the hearing, Judge Bauknight stated that Schuchardt's accusation violated Tennessee Rule of Professional Conduct 8.2, but permitted Schuchardt to present evidence supporting his position. Schuchardt's first two witnesses, Shoemaker and Guinn testified to conversations that they had with Schuchardt and others related to Schuchardt's accusation against Judge Bauknight. Both contradicted certain factual assertions Schuchardt had made and interpreted the content and meaning of prior conversations differently than Schuchardt. Trustee Kerney took the stand, unequivocally denying ex parte communications with Judge Bauknight, and testified that she reported a previous inappropriate confrontation by Schuchardt to the clerk and deputy clerk of the Court, not Judge Bauknight. Schuchardt testified, rehashing his accusations and asserting that he had evidence to support the existence of ex parte communications. At the conclusion of the hearing, Judge Bauknight ordered Schuchardt to attend further professionalism training, pay for and acquire the transcripts and recordings of several hearings, and forward the transcripts and recordings to the Board of Professional Responsibility. Further, Judge Bauknight put Schuchardt on notice that continued incivility would result in further sanctions.
After a November 15, 2017 hearing in the case In re Perry L. Dupree, No. 3:17-bk-32158, regarding Schuchardt's fees, Judge Bauknight made a finding that Schuchardt was continuing ininappropriate conduct. On January 9, 2018, Judge Bauknight issued a show cause order in seventeen cases outlining the Court's concern about Schuchardt's conduct and competency. Schuchardt and a United States Trustee proposed an agreement, and, after further modification, an "Agreed Order Resolving the Order to Show Cause Dated January 9, 2018" ("Agreed Order") was signed by Schuchardt and issued. The Agreed Order, dated February 9, 2018, placed a moratorium on Schuchardt's practice before the Knoxville Division of the United States Bankruptcy Court for the Eastern District of Tennessee for six months. Specifically, Schuchardt could not "undertake new representation or continue to represent any party in any bankruptcy case or proceeding currently pending or to be filed" before the Court. Likewise, if approached by clients or prospective clients, Schuchardt was directed to "immediately refer any such prospective clients to another attorney/attorneys to properly handle such matter." Certain other requirements were also imposed related to specific cases before Judge Bauknight.
In May of 2018, Judge Bauknight became aware that Schuchardt had possibly violated the Agreed Order in two cases, issuing show cause orders for Schuchardt to demonstrate why he should not be held in contempt for violating the Agreed Order. Schuchardt responded that he provided free legal advice to the two parties, but did not "represent" them as prohibited by the Agreed Order. Specifically, Schuchardt prepared the schedules and forms in In re Tressa L. Webb, No. 3:18-bk-31418, further advising her after the filing, and completed reaffirmation forms in In re Jason A. & Linda C. Edington, No. 3:18-bk-30299. Schuchardt had not referred Ms. Webb or the Edingtons to other attorneys. Schuchardt further moved to disqualify Judge Bauknight, making further accusations against Judge Bauknight, claiming that she demanded that Schuchardt withdraw a separate civil suit against Trustee Kerney and appeals of bankruptcy cases.
After the June 7, 2018 hearing, Judge Bauknight found that Schuchardt's representation of Ms. Webb and the Edingtons violated the Agreed Order, citing Tennessee Code Annotated § 23-3-101 and the Tennessee Rules of Professional Conduct. Further, Judge Bauknight found that Schuchardt's accusations in his recusal motion were additional violations of...
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