Williams, In re

• Decision Date: 05 June 1998
• Docket Number: 97-2438,Nos. 97-2437,s. 97-2437
• Citation: 156 F.3d 86
• Parties: In re: Lawrence G. WILLIAMS, Debtor. Lawrence G. WILLIAMS, Plaintiff, Appellee, v. UNITED STATES of America, Defendant, Appellee. William L. Blagg, Appellant. In re: Lawrence G. WILLIAMS, Debtor. Lawrence G. WILLIAMS, Plaintiff, Appellee, v. UNITED STATES of America, Defendant, Appellee. Charles J. Cannon, Appellant. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 86

156 F.3d 86

In re: Lawrence G. WILLIAMS, Debtor.

Lawrence G. WILLIAMS, Plaintiff, Appellee, v. UNITED STATES of America, Defendant, Appellee.

William L. Blagg, Appellant.

In re: Lawrence G. WILLIAMS, Debtor.

Lawrence G. WILLIAMS, Plaintiff, Appellee, v. UNITED STATES of America, Defendant, Appellee.

Charles J. Cannon, Appellant.

Nos. 97-2437, 97-2438.

United States Court of Appeals, First Circuit.

Heard June 5, 1998.

Decided Sept. 11, 1998.

Robert B. Mann, with whom Mann & Mitchell was on brief, for appellant Blagg.

Carter G. Phillips, with whom Nathan A. Forrester and Sidley & Austin were on brief, for appellant Cannon.

Michael J. Tuteur and Epstein Becker & Green, P.C. on brief for National Association of Assistant United States Attorneys, amicus curiae.

Donald B. Verrilli, Jr. and Jenner & Block on brief for Federal Bar Association, amicus curiae.

Loretta C. Argrett, Assistant Attorney General, Gilbert S. Rothenberg and Thomas J. Clark, Attorneys, Tax Division, Department of Justice, on brief for the United States, amicus curiae.

Before SELYA, Circuit Judge, ROSENN ^* and CAMPBELL, Senior Circuit Judges.

SELYA, Circuit Judge.

This case presents a question of first impression in this circuit: Are a trial court's published findings of attorney misconduct, originally rendered in support of monetary sanctions, independently appealable, notwithstanding that the monetary sanctions imposed by the court for that conduct have been nullified? Our sister circuits are divided on this important question. Compare Bolte v. Home Ins. Co., 744 F.2d 572, 572-73 (7th Cir.1984), with Walker v. City of Mesquite, Tex., 129 F.3d 831, 832-33 (5th Cir.1997). We conclude that the court's findings, simpliciter, are not appealable. Hence, we dismiss the instant appeals for want of appellate jurisdiction.

I. BACKGROUND

In 1990, Lawrence G. Williams filed a voluntary petition in bankruptcy. During the bankruptcy proceeding, the United States filed proofs of claim seeking roughly $6,500,000 in unpaid federal taxes (resulting primarily from the disallowance of deductions claimed by the debtor). Williams responded that an offer of settlement made by the Internal Revenue Service (IRS) and accepted by him in 1989 substantially reduced his tax liability from the amount stated in the proofs of claim. As Williams described it, the settlement proposal was coincident with the resolution of Tax Court proceedings involving the Arbitrage Management Partnerships (the partnerships), a group of tax shelters in which he had invested.

To test the parties' competing positions, and to fix the amount and dischargeability of his outstanding federal income tax liability, Williams filed an adversary action against the United States within the bankruptcy proceeding. Following the initiation of this action, the parties undertook discovery. At about this time, Charles J. Cannon, an attorney in the Tax Division of the United States Department of Justice, entered his appearance on behalf of the United States. On April 30, 1991, Williams served a formal demand for production of documents. The United States had thirty days to respond to this demand, see Fed.R.Civ.P. 34(b), but failed to take timely action. On June 10, Williams moved to compel production. At that point, the government produced some documents and objected to the production of others. The bankruptcy court (Votolato, J.) convened a hearing on the motion to compel, overruled the government's objections, and ordered it to produce the remainder of the disputed documents within forty-five days.

The government produced some, but not all, of the specified documents within the allotted time. In April 1992, the debtor filed a motion for partial summary judgment claiming that, for several of the relevant tax years, the government had not produced documents relating to either (1) extensions of the statute of limitations, or (2) the partnerships' tax audits. The bankruptcy court denied the motion.

The debtor then moved, on much the same grounds, to preclude the government from introducing certain documents at trial. See Fed.R.Civ.P. 37(b)(2)(B). In its response, the government argued that it had provided all documents in its possession relating to the statute of limitations. The government admitted that it had not produced the partnerships' audit files, but maintained that the debtor had never formally requested them. Because the parties were trying to settle the adversary action, the bankruptcy court did not schedule a hearing on the preclusion motion until January 1995. At that session, the court heard considerable evidence (much of it conflicting), entertained oral argument, and reserved decision.

In an opinion dated April 14, 1995, the bankruptcy court denied the preclusion motion, but imposed Rule 37(b) sanctions on the government, Cannon, and William L. Blagg (an IRS attorney who had assisted Cannon in endeavoring to respond to Williams's discovery requests) for failing timely to produce the partnerships' audit files and certain other documents. See In re Williams, 181 B.R. 1, 5 (Bankr.D.R.I.1995) (Williams I ). In the course of this opinion, Judge Votolato harshly criticized Blagg and Cannon, characterizing their conduct as obstructionist and unjustified. Among other things, he referred to Blagg's testimony as "pure baloney," id. at 4, and ranked Cannon's "performance and credibility at about the same level as [Blagg's]," id. at 5. As a sanction, the judge ordered Blagg and Cannon each to pay $750 (and not to seek indemnity from their employer), and ordered the government to reimburse Williams for attorneys' fees incurred in obtaining the documents. See id.

Blagg, Cannon, and the government moved for reconsideration. Judge Votolato issued another opinion on October 24, 1995, in which he vacated the monetary sanction against Blagg, but refused to vacate either the sanction imposed on Cannon or his findings with respect to the lawyers' conduct. See In re Williams, 188 B.R. 721, 725-28 (Bankr.D.R.I.1995) (Williams II ). He did, however, order that Cannon pay the sanction amount ($750) to the debtor as a reimbursed expense, rather than to the registry of the court. See id. at 731.

Blagg, Cannon, and the government appealed to the United States District Court for the District of Rhode Island. The district court (Lisi, J.) agreed that Blagg and Cannon had conducted themselves improperly, but found for technical reasons that sanctions could not be imposed under Rule 37(b)(2). ¹ In re Williams, 215 B.R. 289, 301-02 (D.R.I.1997) (Williams III ). The district court therefore annulled the monetary sanction against Cannon. See id. at 302. The district court nonetheless refused to vacate the bankruptcy court's factual findings, i.e., criticisms of the attorneys made in the course of its opinion. See id. at 303. These appeals ensued. In them, Blagg and Cannon seek vacation of the bankruptcy court's findings--nothing more.

II. ANALYSIS

The threshold question in this matter is whether the bankruptcy judge's published findings of fact, attributing misconduct to Blagg and Cannon, are appealable. The answer depends on whether the findings, simpliciter, comprise a decision, order, judgment, or decree. See 28 U.S.C. § 158(d) (1994) (conferring appellate jurisdiction over "all final decisions, judgments, orders, and decrees" rendered by a district court on appeal from a bankruptcy court); id. § 1291 (1994) (granting jurisdiction over "appeals form all final decisions of the district courts"). We conclude that they do not, and therefore dismiss the attorneys' appeals.

At the outset, it bears reemphasis that, while the bankruptcy court's opinions, including its criticism of the attorneys, remain intact, there are no longer any monetary sanctions extant in this case. The bankruptcy court itself vacated the monetary sanction imposed on Blagg, see Williams II, 188 B.R. at 728, and the district court annulled the monetary sanction levied against Cannon, see Williams III, 215 B.R. at 302. The instant appeals thus hinge on the legal significance of the bankruptcy court's published findings of fact. ² In the district court, Blagg and Cannon argued, inter alia, that these findings in themselves operated as a sanction (particularly since the bankruptcy judge memorialized them in published opinions). The appellants therefore requested that the findings be stricken, both because they received insufficient process and because their conduct was not sanctionable. Judge Lisi assumed arguendo that the findings operated as a sanction, but found neither a procedural nor a substantive defect. See Williams III, 215 B.R. at 303. She harbored "no qualms" about the bankruptcy court's findings, having satisfied herself that they were supported by the record. Id. Before us, the appellants purport to appeal these linguistic "sanctions" on much the same bases that they advanced below and ask that we vacate the relevant findings of both lower courts.

Imposing sanctions against counsel is a serious matter. Hence, when a federal court deems such a course appropriate, it must make specific findings in support of its order. See, e.g., Navarro-Ayala v. Nunez, 968 F.2d 1421, 1427 n. 5 (1st Cir.1992); Foster v. Mydas Assocs., 943 F.2d 139, 142-43 (1st Cir.1991). Such findings serve a variety of salutary purposes; among other things, they enable a reviewing court to determine whether the sanctions imposed have sufficient grounding in law and in fact. See Foster, 943 F.2d at 141-42. In this case, the bankruptcy court's findings were both explicit and unflattering, and the appellants understandably take issue with the court's depiction of their conduct.

Still, it is an abecedarian rule that federal appellate courts review decisions, judgments, orders, and decrees--not opinions, factual findings, reasoning, or explanations. See Navieros Inter-Americanos, S.A. v. M/V Vasilia Express, 120 F.3d 304, 316 (1st Cir.1997); Sun-Tek Indus. v....