McCabe, Matter of

• Decision Date: 23 December 1991
• Citation: 583 N.E.2d 233,411 Mass. 436
• Parties: In the Matter of Edwin A. McCABE.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 233

583 N.E.2d 233

411 Mass. 436

In the Matter of Edwin A. McCABE.

Supreme Judicial Court of Massachusetts Suffolk.

Argued Oct. 7, 1991.

Decided Dec. 23, 1991.

Terence M. Troyer, Asst. Bar Counsel, Boston.

Edwin A. McCabe, Richard W. Renehan, Boston (Martha M. Born, with them), for respondent.

Before LIACOS, C.J., and WILKINS, LYNCH, O'CONNOR and GREANEY, JJ.

LYNCH, Justice.

In this case, here on a reservation and report by a single justice, we are asked to decide whether an attorney, Edwin A. McCabe (Mr. McCabe), should receive reciprocal discipline pursuant to S.J.C. Rule 4:01, § 16, as amended, 402 Mass. 1302 (1988). The United States District Court for the Western District of Louisiana found Mr. McCabe guilty of misconduct and declared him ineligible to practice in the Western District of Louisiana for a period of five years. NASCO, Inc. v. Calcasieu Television & Radio, Inc., 124 F.R.D. 120, 146 (W.D.La.1989). The Fifth Circuit Court of Appeals affirmed but remanded for reconsideration of the length of the sanction. NASCO, Inc. v. Calcasieu Television & Radio, Inc., 894 F.2d 696, 708 (5th Cir.1990), aff'd sub nom. Chambers v. NASCO, Inc., 501 U.S. 32, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991) (The United States Supreme Court decision noted, but did not review, sanctions imposed on Mr. McCabe and other members of the bar. That decision was concerned only with the sanctions imposed on G. Russell Chambers). On reconsideration, the District Court imposed the same sanction.

The underlying action involved the enforcement of a purchase and sale agreement and subsequent attempts to evade specific performance by Chambers, Calcasieu Television and Radio, Inc. (CTR) (collectively, clients), and Calcasieu TV and Radio, Inc. (CAL-TV). While we are concerned here only with Mr. McCabe's conduct, an overview of the prior litigation is necessary. For an expanded recitation of the history of the litigation, see Chambers v. NASCO, Inc., 111 S.Ct. at 2128-2130, from which the following synopsis is taken.

1. Facts.

A. History prior to Mr. McCabe's appearance.

On August 9, 1983, clients entered into an agreement with NASCO, Inc., for the purchase and sale of a television station (KPLC-TV), which they failed to perform. On Friday, October 14, 1983, NASCO told clients that NASCO was filing suit the following Monday, seeking specific performance and a temporary restraining order (TRO). Clients and their attorney at that time, A.J. Gray, III, then set up a sham sale of the properties at issue. Mr. Gray participated in a conference on Monday, October 17, 1983, with the Federal District Court judge, without disclosing the purported sale despite the judge's queries concerning a possible sale to third parties. The judge issued a TRO and informed Mr. Gray of its contents over the telephone. The next morning Mr. Gray informed the judge by letter of the recordation of the sham sale and that his failure to disclose that information earlier was intentional.

Subsequently, the judge granted a preliminary injunction and a second TRO to prevent any further sale of the properties at issue. The judge warned that Mr Gray's and Chambers' conduct had been unethical. Thereafter, clients' refusal to allow inspection of corporate records, in defiance of the preliminary injunction, resulted in contempt proceedings. Clients also proceeded with "a series of meritless motions and pleadings and delaying actions," including deposing bankers to learn whether NASCO could afford to pay for the station. ¹

On the eve of trial, clients stipulated that the purchase agreement was enforceable and that Chambers had breached the agreement. The only defense presented at trial was the public records doctrine. ² Before the judge rendered his opinion and judgment, clients took various steps to subvert the purchase agreement which NASCO was able to avert only by seeking contempt sanctions. Once judgment was rendered, clients filed numerous appeals and motions to stay judgment pending appeal. When these were denied, CTR officials filed formal oppositions to NASCO's pending Federal Communications Commission application. Again, NASCO sought contempt sanctions, and all opposition was withdrawn.

On June 24, 1986, the parties attended a meeting in Atlanta, Georgia, ostensibly moving toward closing the sale. One of the issues which came up at the meeting concerned a disagreement over which equipment was to be transferred with the station. Because of this and other disagreements, NASCO moved for judicial assistance on July 1, 1986. A hearing was scheduled for July 16, 1986.

B. Mr. McCabe's actions.

The record shows that Mr. McCabe was hired by clients in early summer 1986 to represent them at the July 16, 1986, hearing. On July 15, 1986, Mr. McCabe filed two motions. ³ On the morning of July 16, 1986, he filed a pleading opposing the motion for judicial assistance. ⁴ Later that day, he was admitted pro hac vice to the United States District Court for the Western District of Louisiana and participated in the hearing. ⁵

On July 18, 1986, at Mr. McCabe's suggestion, clients unplugged certain equipment from service, but did not remove it from the premises. ⁶ On July 28, 1986, Mr. McCabe's firm sent a letter to NASCO stating CTR was prepared to close on August 4, 1986, strictly in accordance with the agreement. ⁷

On August 5, 1986, Mr. McCabe filed a motion for relief from judgment and two appeals. ⁸ On August 6, 1986, the appellate court affirmed the November 27, 1985, judgment in a per curiam opinion. Mr. McCabe terminated his representation and immediately withdrew the motion for relief and both notices of appeal. ⁹

C. The hearing.

At the July hearing NASCO claimed certain equipment, including equipment subject to leases, was replacement equipment used directly in the operation of the station. Therefore, they claimed, such equipment should be transferred to them for the original purchase price. They had conducted an inventory in October, 1983, and updated it in April, 1986. They claimed that certain pieces of equipment which were used in the operation of the station were not listed on Exhibit B. They wanted to use their updated inventory to close the sale.

Clients claimed that only equipment listed on Exhibit B, or items they deemed replaced Exhibit B items, were part of the original purchase. Any other equipment in the station had no bearing on the original purchase and sale. Thus, it was not transferable to NASCO--or at least not for the original purchase price.

As a secondary matter, clients argued that certain of the equipment claimed by NASCO as replacement or "necessary" equipment was purchased after the 1983 agreement had been signed, and was owned by CAL-TV, a wholly-owned subsidiary of CTR.

2. Supreme Judicial Court Rule 4:01, § 16.

Supreme Judicial Court Rule 4:01, § 16(5), as amended, 402 Mass. 1302 (1988), states: "A final adjudication in another jurisdiction that an attorney has been guilty of misconduct may be treated as establishing the misconduct for purposes of a disciplinary proceeding in the Commonwealth" (emphasis added). Given the permissive language emphasized above, we will examine the record below to determine whether Mr. McCabe should receive reciprocal discipline. ¹⁰

3. Sanctionable Acts.

A. "Removal" of equipment from service.

In its sanctioning opinion dated January 23, 1989, the District Court judge found as follows:

"During a three day recess after the 16th [of July], all of the equipment at issue in the hearing was removed and taken off line and the worn-out or outmoded equipment described in the 1983 Purchase Agreement was placed in operation. This was done on the admitted advice of McCabe without the consent of the Court or opposing counsel and, indeed without informing either of them. We deemed this to be an act of arrogance, in direct violation of the warning by the Court, and we ordered the immediate reinstallation of the equipment which had been removed." NASCO, Inc. v. Calcasieu Television & Radio, Inc., 124 F.R.D. 120, 145 (W.D.La.1989).

The equipment at issue was not removed from the premises, but rather unplugged and "removed from service" on Friday, July 18, 1986. The judge learned of this on Monday morning, July 21, when the hearings resumed. The judge commented on this action only at the end of the hearing, in the afternoon of July 22, 1986. ¹¹

The record does not disclose a specific "warning" of which Mr. McCabe's action was "in direct violation." When the judge was summarizing the history of the litigation on the morning of July 16, 1986, he mentioned unacceptable behavior by prior defense counsel. He stated:

"[I]t was not up to defense counsel to interpret [orders] independently, that it was incumbent upon defense counsel to have the matter thrashed out in court and determine what was and was not allowed at the hearing before the Court, not by the unilateral action of defendant and his attorneys."

This comment was part of a long soliloquy by the court prior to the allowance of local counsel's motion for admittance of Mr. McCabe, pro hac vice. Perhaps this is the warning to which the judge was referring.

The language of his August 7, 1986, opinion, in regard to the July hearing, is ambiguous and confusing. On the one hand, he deems removal of the equipment to be calculated and deliberate. ¹² On the other hand, he drops a footnote that "[t]here is nothing wrong with that purpose," given Mr. McCabe's explanation of why the equipment was removed. ¹³

When the Fifth Circuit reviewed the matter on appeal, it characterized the removal of equipment as follows:

"During the hearing, from July 16-22, Chambers and CTR, at McCabe's direction, removed all of the disputed equipment from service at the station. McCabe now argues that this was to prove that the equipment was not necessary to the station's operations and thus not subject to the contract. Whatever the reason, removing the equipment, without any...