Petition for Writ of Certiorari — Stern v. Nix

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87-2077

NO.

IN THE

Supreme Court U.S,

FILED

MAY 28 1988

YOBEPH F. SPANIOL, UR,

CLERK

SUPREME COURT OF THE UNITED STATES

TERM 1988

PETER M. STERN,

Petitioner

HONORABLE ROBERT N.C. NIX,

INDIVIDUALLY AND AS CHIEF

JUSTICE OF THE SUPREME COURT

OF PENNSYLVANIA, HONORABLE ROLF LARSEN,

HONORABLE JOHN P. FLAHERTY,

HONORABLE JAMES T. McDERMOTT,

HONORABLE WILLIAM D. HUTCHINSON,

HONORABLE STEPHEN A. ZAPPALA and

HONORABLE NICHOLAS P. PAPADAKOS,

INDIVIDUALLY AND AS JUSTICES OF THE

SUPREME COURT OF PENNSYLVANIA,

Respondents

Petition For Writ Of Certiorari To The

United States Court Of Appeals

For The Third Circuit

Arthur W. Lefco,

Alan C. Milstein,

MESIROV, GELMAN,

Esquire

JAFFE,

CRAMER & JAMIESON

15th Floor,

lelphia,

15) 893-5000

torneys for Petitioner

idelity Building

PA 19109

STATEMENT OF QUESTION PRESENTED

i Whether the federal district

courts have the power to hear a

generalized constitutional attack by a

disbarred attorney, on behalf of himself

and others similarly situated, on the

rules by which the Supreme Court of

Pennsylvania disbarred him?

zs Whether state court rules may

constitutionally allow a state supreme

court to reverse a crucial finding of

material fact and credibility by the only

tribunal which heard the evidence and, on

the basis of that reversal, to disbar an

attorney, where such rules make no

provision for an evidentiary hearing

before the state supreme court?

(1)

TABLE OF CONTENTS

STATEMENT OF QUESTION PRESENTED.

TABLE OF AUTHORITIES

REFERENCE TO OFFICIAL AND

UNOFFICIAL REPORTS.

STATEMENT OF JURISDICTION.

STATEMENT OF FACTS

ARGUMENT

CONCLUSION

APPENDIX

OPINION OF UNITED STATES COURT

OF APPEALS FOR THE THIRD CIRCUIT.

OPINION OF THE UNITED STATES

DISTRICT COURT.

OPINION OF SUPREME COURT OF

PENNSYLVANIA IN IN RE STERN

(11)

TABLE OF AUTHORITIES

PAGE(S)

Brennan v. Grisso, 198 F.2d

Denise, GAk. 2952)... «© « 39

District of Columbia Court

of Appeals v. Feldman,

ew wam. Boe (1963) .... .15, %,

eo es

y: io 2

{ Por: P

a0, JV,

Ex parte Secombe, 60 U.S. 9,

ne eee See (1656) .... .33, 36

Gershenfeld v. The Justices

of the Supreme Court of

Pennsylvania, 641 F.Supp.

1419 (E.D.Pa. 1986) ..... 25

Holiday v. Johnston, 313 U.S.

aaa, G1 S.Ct. 1015, 85

ammo aewa (L941) ...... 40

Howell v. State Bar of

Texas, 710 F.2d 1075

CTeees eee e . . .,. «.. 24, 25

Laurie v. Golden Hersh,

716 F.2d 401 (7th Cir.

EES ee 25

Louis v. Blackburn, 630 .

®&.2G4 1105 (Sth Cir. 1980) . 44, 49

(111)

PAGES

Mattas v. Supreme Court

of Pennsylvania, 576 F.Supp.

1178 (W.D.Pa. 1983) ... aa, 420, 22

Mathews v. Eldridge, 424

U.S. 319, 96 §.Ct. 893,

7 &. BS. 28 28 -€4976)s 2 x 42, 44, 47

In Re Ming, 469 F.2d

agae (7th Cir. 1972) ....2.2.-e«6. 38

In Re Ruffalo, 390 U.S.

544 20 L.Ed.2d 117,

Se S.Ce. 1222 (2968). . « . as 2 os > 3

Morgan v. United States,

298 U.S. 468, 56 S.Ct. 906,

OO LL.B. i266 (19396) ... :. 2. 1% 36

N.A.A.C.P. v. Button, 371 U.S.

4i3, 83 §.Ct. 3228,

9 &.84.26 405 (1963)... 26. ss 33,39

Queen v. Bertrand, 16 Eng. Rep.

391 (1867) (quoted with approval

in United States v. Raddatz,

447 U.S. 667, 100 S.Ct. 2406,

65 L.Ed.2d 424 (1980)). ...... 37

Razatos v. Colorado Supreme

Court, 746 F.2d 1429 (10th Cir.

BUGS)» «1 6 ss s Bey ae, 26, 33, SS 47

48, 49

Rogers v. Supreme Court of

Pennsylvania, 641 F. Supp. 1419

(Sa... Fa. 3968)... ... = 2 28. 26. 86

(iv)

PAGES

Schwiser v. Brady, 438 U.S.

204, 98 S.Ct. 2699,

>/ &.BG.426 705 (1978). «5 « «> 40

spevack v. Klein, 385 U.S. 511,

S/7 S.Ct. 625, 17 L.Ed.2d

Pie. Geer es « ¢.4 oe & «ow aa

stern v. Nix, 840 F.2d 208

(3d Cir. 1988) » os 19

Toffano v. Supreme Court of

Nevada, 718 F.2d 313

(9th Ci 1983) . 25

United States ex. rel. Graham

v. Mancusi, 457 F.2d 463

fis: } Ae Pe bee ee 39

United States v. Nugent,

100 F.2d 215 (6th Cir. 1938),

cert denied, 306 U.S. 648, 59

S.Ct. 591, 83 L.Ed. 1046 (1939) 39

United States v. Oregon Medical

society, 343 U.S. 326, 72

S.Ct. 690, 96 L.Ed. 978 (1952) 38

United States v. Raddatz,

447 U.S. 667, 100 S.Ct.

2406, 65 L.Ed.2d 424

(1980) 37, 41, 42, 47, 48,

PAGES

STATUTES

Federal Magistrates Act,

28 U.S.C. §636, et seg. ..... 41

Bemecwavens 2aCG), BSat@)t2). s 2.6 38

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STATEMENT OF JURISDICTION

Jurisdiction of this Court is

invoked by virtue of 28 U.S.C. §1254 and

by Supreme Court Rule 17. Petitioner

seeks review of an order of The Third

Circuit dated February 29, 1988.

(viii)

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O'Farrell. An FBI agent, as an aside to

other business, mentioned to a then

partner of Stern that it nad been sug-

gested that Stern had delivered funds to

' rot

OQ Farrell. The FBI had no usable evi-

dence to sustain the allegation.

Nevertheless, upon inquiry by federal

agents, without requesting immunity,

Stern readily discussed his contacts with

O '

fry

arrell including his delivery of the

$5,000 gift at meetings attended by

attorneys with the United States

Attorneys Office and agents of the FBI.

The government, however, could not and

would not have prosecuted Stern because

it had no usable evidence that the

transaction had occurred, and because it

considered the offense to be merely a

violation of the anti-gratuity provisions

of the Taft-Hartley Act and not a bribe.

Moreover, if the government had brought

(2)

an indictment, Stern knew he could have

invoked his Fifth Amendment privilege

(tor which he could not suffer attorney

discipline as a matter of constitutional

law) and prevailed. Nonetheless, Stern

+, } -+ y+ ) ~ rI3i+ } ¥ .

rforthrightly cooperated with the federal

Department informed the Pennsylvania

Disciplinary Board of Stern's statements

LS DR1-102(A) provides:

A lawyer shall not

(1) Engage in

illegal conduct involving moral

turpitude

(2) Engage in

conduct involving dishonesty,

fraud, deceit, or misrepre-

sentation.

—

B. THE PENNSYLVANIA DISCIPLINARY PROCESS

Pursuant to the Pennsylvania Rules

of Disciplinary Enforcement ("Pa.R.D.E."),

matters of discipline relating to

attorneys admitted to practice in

Pennsylvania are subject to action by

the Disciplinary Board of the Supreme

Court of Pennsylvania ("Disciplinary

Board"), with final action being taken by

the Supreme Court. The Pennsylvania

Supreme Court appoints the members of the

(contd. )

(3) Engage in any

other conduct that adversely

reflects on the protective of

law.

DR7-102(A) provides:

In his representation of a

Client, a lawyer shall not:

(7) Counsel or assist

his client in conduct that the

lawyer knows to be illegal or

fraudulent.

(4)

Various hearing committees, which are

empowered to conduct hearings on

discipline-related matters, and to submit

)

re)

CQ,

containing findings and recommendations.

a a> | e * q 4 e294 +

system which actually hear the witnesses

| ge er de _ aes 3

and preside over the admission of

evidence. Ta... 8. 205, 208. The

ay, a NVI r 1

ra... 205, 20 At the conclusion of

an investigation, Disciplinary Counsel

matters before the hearing committee.

Fa. R.D.E. 208(a).

The hearing committee hears the

evidence and testimony presented by both

the Disciplinary Counsel and the attorney,

files a report containing its findings

and recommendations and transmits the

report with the record of the proceedings

to the Disciplinary Board. Pa.R.D.E.

Z2Z08(c). The Disciplinary Board reviews

the hearing committee's report and the

record and briefs, if any, filed by the

parties with the Disciplinary Board. The

members of the Disciplinary Board then

prepare their own findings and recom-

mendations which, together with the

briefs of Disciplinary Counsel and the

subject attorney and the entire record,

are transmitted to the Pennsylvania

supreme Court. Pa.R.D.E. 208(d). In the

event the Disciplinary Board recommends

(6)

that the matter should be concluded by

disbarment, the attorney may submit to

the Court a request to present oral

argument. Pa. R.D.E. 208(e).

In the event the Disciplinary Board

recommends a sanction less than disbar-

ment, the Pennsylvania Supreme Court may,

either by motion by Disciplinary Counsel

Or sua sponte, upon consideration of the

recommendation issue a rule to show cause

why the attorney should not be disbarred.

If the Court issues such an order, the

attorney has the right upon request to

file a brief and for oral argument. The

attorney, however, has no right to

present testimony or other evidence to

the Pennsylvania Supreme Court before it

takes action contrary to the recommen-

dation of the hearing committee.

Fa. 8.0.8. &206te).

(7)

In determining whether an attorney

should be disbarred, notwithstanding the

absence of such a recommendation by the

hearing committee, the Disciplinary Board

or Disciplinary Counsel, the Pennsylvania

Supreme Court's review of attorney

discipline is de novo; though it acts

solely upon a review of the transcribed

record, and the briefs and oral argument

of Disciplinary Counsel and the subject

attorney, the Court may reject the

hearing committee's findings including

findings on credibility and may order the

attorney be disbarred.

C. THE PROCEEDINGS AGAINST STERN

After the filing of the petition for

discipline, Stern and Disciplinary

Counsel entered into a comprehensive

stipulation of facts, including Stern's

acknowledgment that he violated Disci-

(8)

plinary Rule 7-102(A)(7), which prohibits

a lawyer from counseling or assisting

clients in conduct the lawyer knows to be

illegal or fraudulent. A hearing was

held before a hearing committee on

September 26, 1985, in which Stern

presented mitigation and other evidence.

At the hearing, Stern presented

the testimony of Robert Welsh, the

Assistant U.S. Attorney who prosecuted

the O'Farrell case. Welsh testified that

the actions of Stern could not be charac-

terized as a bribe because there was no

expectation that the money delivered by

Stern was intended for any quid pro quo.

Stern testified on his own behalf and the

hearing committee heard evidence about

Stern's dire financial straits. At the

hearing, Disciplinary Counsel stated it

would recommend no sanction greater than

public censure.

The hearing committee filed its

report on February 27, 1986, dismissing

the charges based on DR 1-102(A)(3)(4) &

(6) and recommending discipline of

private informal admonition or, at most,

private reprimand. In reaching this

conclusion, the hearing committee expli-

citly found that the $5,000 payment

by Stern was made with neither the

xpectation nor intention to influence

O'Farrell and is “the oniy blemish on the

personal and professional record of an

otherwise honest and honorable man, an

able and competent practitioner of law.

The hearing committee also placed

great weight on the fact that, but for

the voluntary statement by Peter Stern to

the federal authorities, "these disci-

plinary proceedings would have no founda-

tion." Accordingly, the hearing

committee concluded that because Stern

(10)

could have easily escaped discipline by

refusing to make any statement, it could

not "penalize Mr. Stern for his admis-

sion, as the first step towards rehabili-

tating his conduct."

On July 7, 1986, the Disciplinary

Board issued its report and recommenda-

tion to the Supreme Court of

Pennsylvania. After reviewing the

recommendation, findings of fact and

conclusions of law of the hearing com-

mittee, the record and the briefs of

the respective parties, the Disciplinary

Board concluded that the appropriate

sanction in this matter was public

censure. While it did not accept the

hearing committee's recommendation of

private admonition, the Disciplinary

Board stated that Stern's considerable

and compelling evidence in mitigation

(11)

"may appropriately shield him from

suspension."

On October 9, 1986, the Supreme

Court of Pennsylvania, without any action

on the part of Disciplinary Counsel,

entered a rule upon Stern to show cause

why he should not be disbarred. On

November 3, 1986, Stern requested an oral

argument and an evidentiary hearing.

Stern stated in his request for an

evidentiary hearing that the hearing was

necessary "so that this Court may have

the same opportunity as the hearing

committee to judge his demeanor, credi-

bility, candor and contrition, as well as

his fitness to practice law." On

November 10, 1986, the Supreme Court of

Pennsylvania granted Stern's request for

oral argument but denied his request for

an evidentiary hearing.

Both Stern and Disciplinary Counsel

submitted briefs in response to the Rule

to Show Cause. In his brief, Stern

emphasized that the Supreme Court of

ennsylvania should adopt the recommen-

Gation of the hearing committee which

recommended a sanction of private disci-

pline because it was the hearing com-

mittee alone which had the opportunity

to hear the evidence. Disciplinary

Counsel also asked in its brief that the

Court not disbar Stern. Oral argument

was conducted on January 29, 1987.

On June 3, 1987, the Supreme Court

of Pennsylvania issued its Opinion and

Order disbarring Stern. In its Opinion,

the Court emphasized that it considered

the intent to influence "a crucial

factor” in its discussion. With respect

(13)

record and concluded that the Hearing

Committee's finding with respect to

Stern's intent in delivering Frankford

Quaker's funds was “supported by no

credible evidence." After rejecting this

finding on credibility by the Hearing

Committee, the Supreme Court of

Pennsylvania then concluded -- solely

upon the cold record before it -- that

tern's delivery of money to O'Farrell

was a bribe.

In footnote 2 of the opinion, the

Supreme Court of Pennsylvania acknowl-

edged that Stern had requested an evi-

dentiary hearing but that his request

was denied because this was a “procedure

for which the rules of Disciplinary

Enforcement make no provision."

D. STATEMENT OF THE CASE

On June 17, 1987, Stern filed this

action in the United States District

Pennsylvania. The gravamen cf Stern's

Complaint was that the rules and pro-

cedures promulgated by the Supreme Court

= _- + a - ~ - — --

hearing committee s findings of material

- * .

Pennsyivania moved to dismiss the

Sleluwtel i Teas araquir s"rar y . ~s — -+hea

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= 7 ~ — —_ :

federai courts had no jJuriasaiction uneer

r ? - s | ¥

' at end ae - a on » .

wiStract of TVOLUumMoiIa LCOUrt of Appeals Vv

—_ - — — ~

(15)

Feldman, 460 U.S. 462 (1983). The

district court denied the motion.

After a nonevidentiary hearing

before the Honorable Marvin Katz, Judge

Katz denied Stern's motion for preli-

minary injunction on the grounds that

Stern had not shown a reasonable likeli-

hood of success on the merits. There-

after, on August 14, 1987, Judge Katz

issued an Order and Opinion holding

that the Pennsylvania Supreme Court did

not violate Stern's rights to due process

of law.

Stern timely filed an appeal to

the United States Court of Appeals for

the Third Circuit. After all of the

judges of the Third Circuit had recused

themselves, by Order of the Chief Justice

a panel from the Court of Aopeals for the

Second Circuit then sat as the Court of

Appeals for the Third Circuit by designa-

(16)

tion. In reviewing the facts, the Court

of Appeals agreed with Stern that the

hearing committee, which had heard the

evidence, conciuded that neither Stern

nor his client intended the money as a

bribe, and that the Supreme Court of

Pennsylvania, upon review of the cold

record and after denying Stern the

opportunity for an evidentiary hearing

before it, rejected this finding and

found the payment was a bribe, on the

basis of which it disbarred Stern.

The Court of Appeals concluded,

however, that Stern was seeking by this

action to reverse the Supreme Court of

Pennsylvania's decision to disbar him.

On that basis, the Court of Appeals held

that the federal courts had no jurisdic-

tion under this Court's ruling in

District of Columbia Court of Appeals v.

— - ee eer

deserve

under t

(a,c),

United

of Appe

courts

ARGUMENT

deral Courts Have Subject Matter

risdiction Over This Matter Which

serts A Generalized Challenge To

e Disciplinary Rules Of The

ommonwealth Of Pennsylvania.

e issues presented by this case

review on a writ of certiorari

Dp)

he criteria set forth in Rule 17.1

Rules of the Supreme Court of the

States. The decision of the Court

als conflicts directly with other

of appeals on the same issue, and

ts directly with the Court's

nin District of Columbia Court

of Appeals v. Feldman, 460 U.S. 462

ern s general constitutional

ge to provisions of the

Procedure under which he was disbarred,

on the basis that his claim really

addressed his own disbarment and was

therefore merely a disguised attempt to

obtain federal review of the final

oan!

judgment of a state court. the court

stated that, despite Stern's "skillful

attempt to mask the true purpose of the

the Rooker-Feldman doctrine," it was

convinced that Stern sought essentiaily

to reverse the judicial decision of the

Pennsylvania Supreme Court. Stern v.

Nan, G40 F.2aqa. 208, 212 (3d Cir. 1988).

Besides requesting a permanent injunc-

veneer ... became increasingly thin"

because he requested a preliminary

injunction and because the headings in

+-4

—

not to other attorneys similarly situ-

ated. Id. at 212-13.

The application of this Court's

decision in Feldman does not depend on

genuflection, the thickness of one's

veneer, or the phrasing of headings in

appellate briefs. Moreover, Stern's

right to have a federal court adjudicate

his constitutional claims does not depend

on whether he requested an injunction;

the availability of that remedy, or its

denial, cannot determine whether there is

jurisdiction to address the underlying

federal claim.

On the contrary, Feldman teaches

that it is the essence of the claim which

controls jurisdiction. Under the lower

court's drawing of the Feldman line, it

s likely that Mr. Feldman himself would

ho.

have heen denied access to the federa

courts. The lower court's decision is

_—

flatly at variance with Feldman, and

review should be granted to prevent other

federal courts from relying on the Court

of Appeals' misapprehension.

In Feldman, this Court expressly

recognized federal district court juris-

diction in cases such as this one.

Feldman had been denied admission to the

District of Columbia Bar, which had

refused to waive the requirement of

law school graduation. Feldman claimed

this refusal violated his constitutional

rights in five respects. Two of the five

allegations asked the federal district

court to review not simply the challenged

bar admission rules but the District of

Columbia Court of Appeals application of

those rules to Feldman. Feidman claimed

that the District of Columbia Court of

Appeals had applied these rules in an

arbitrary, capricious and discriminatory

(21)

manner. This Court concluded that the

district court had no subject matter

jurisdiction over these two claims which

were "inextricably intertwined" with the

state court's decision denying admission

to the bar and, thus, required the Court

"to review a final judicial decision of

[a jurisdiction's] highest court ... in

a particular case." Id. at 482, 486.

Upon review of the remaining three

allegations in Feldman's Complaint,

however, this Court held that these were

subject to federal subject matter juris-

diction. In these claims, Feldman had

contended not that the rule was applied

unconstitutionally, but that the rule

itself was unconstitutional. Because

these claims "involve[d} a general attack

on the constitutionality of [the state

rule}]," this Court held that subject

(22)

matter jurisdiction existed. Id. at

487.

This Court reasoned:

We have recognized that state

supreme courts may act ina

nonjudicial capacity in promul-

gating rules regulating the

bar. . . . Challenges to the

constitutionality of state

bar rules, therefore, do not

necessarily require a United

States District Court to review

a final state-court judgment in

a judicial proceeding. Instead,

the District Court may simply

be asked to assess the validity

of a rule promulgated in a

nonjudicial proceeding. If

this is the case, the District

Court is not reviewing a

state-court judicial decision.

In this regard, 28 U.S.C.

§1257 does not act as a bar to

the District Court's considera-

tion of the case and because

the proceedings giving rise to

the rule are nonjudicial the

policies prohibiting United

States District Court review of

final state-court judgments are .

not implicated. United States

District Courts, therefore,

have subject-matter jurisdic-

tion over general challences to

state bar rules, promulgated by

state courts in nonjudicial

proceedings, which do not

require review of a final

(23)

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generalized claim was not since it

required review not of the Supreme

'@)

decision but of the disciplinary

Accordingly, since Feldman and

Howell II, in a body of case law directly

at odds with the Court of Appeals' view

in this case, federal courts have not

hesitated to assert subject matter

jurisdiction over such generalized

1984); Toffano v. Supreme Court of

Nevada, 718 F.2d 313 (9th Cir. 1983);

Laurie v. Golden Hersh, 716 F.2d 401 (7th

of the Supreme Court of Pennsylvania,

Court of Appeal s erroneous interpreta-

tion in this case is an anomaly whic!

> |

capacity, may promulgate

regulations, adopt polic

hic

icies or

authorize practices which, in

and of themselves, violate the

S90 F. Supp. at 106.

The Court of Appeals in this case

declined jurisdi

Stern had sought review of a final

judgment of the Supreme Court of

Pennsylvania. Because no evidentiary

* . . . + ~

hearing was held before the district

court, the Court of Appeals based this

4 . . rT . _ , » al

conclusion solely on the Compiaint and

ty o

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based on contested credibility assess-

ments and, on the basis thereof, made

recommendations of discipline. There-

after, the Supreme Court of Colorado,

upon review of the record, adopted the

findings of the hearing committee as well

as its recommendation. Razatos com-

plained that this procedure violated his

right to due process in that the Colorado

rules did not afford him the right to an

evidentiary hearing before the Colorado

Supreme Court, irrespective of whether

the Court adopted or rejected the hearing

committee s findings.

After reviewing the facts and

holdings in Feldman, the Tenth Circuit

concluded that the district court had

jurisdiction over Razatos' claim. The

court stated:

In the case at bar, Razatos

contends that under the Colcrado

rules, the Colorado Supreme

Court is the final arbiter of

(30)

fact in disciplinary proceed-

ings. He argues from that

premise that Colo.R.Civ.P.252

therefore violates the Due

Process Clause because it

fails to require the final

arbiter of fact to observe the

witnesses personally in cases

where credibility is a critical

facter. In order to evaluate

this claim, the district court

need not review the decision

of the Colorado Supreme Court.

t need only lock at Rule 252

as promulgated, and as con-

strued by state case law.

Razatos framed his consti-

tutional challenge in such a

way as to allow district court

subject matter jurisdiction.

We therefore reverse the

district court's decision that

it lacked jurisdiction.

Id. at 1434 (emphasis supplied).

As in Razatos, Stern's Complaint is

a generalized constitutional attack on

the Rules of Disciplinary Enforcement

which do not afford a disciplined

attorney the right to an evidentiary

hearing before the Pennsylvania Supreme

Court; Stern's claim differs from that in

Razatos only to the extent it is limited

(31)

to those cases where the Pennsylvania

Supreme Court rejects the findings of the

hearing committee and, on the basis

thereof, disbars the attorney. Thus,

Stern does not ask the federal courts to

review the decision of the Pennsylvania

Supreme Court in his particular case;

instead, he asks only for a review of the

Rules of Disciplinary Enforcement as

promulgated to decide whether they

comport with due process. Accordingly,

the federal district court had juris-

diction over Stern's claim.

The rules promulgated by

the Pennsylvania Supreme Court violate

the essential guarantee of due process of

law. Stern has been disbarred by the

operation of those rules. It cannot be

that such rules may evade review

precisely because Stern has suffered

disbarment under them. On the contrary,

(32)

this Court should exercise its discretion

and direct the lower courts that it is

their job to undertake such review, and

to declare such rules unconstitutional if

THE RULES OF DISCIPLINARY ENFORCE-

MENT BY WHICH THE SUPREME COURT OF

PENNSYLVANIA DISBARRED STERN

VIOLATE THE DUE PROCESS CLAUSE OF

THE 14TH AMENDMENT.

Since the early days of the

Republic, this Court has stood guardian

over the right of attorneys to practice

law under constitutional standards.

See, e.g., In Re Ruffalo, 390 U.S. 544

(1968); Spevack v. Klein, 385 U.S. 511

(1967); NAACP v. Button, 371 U.S. 415

(1963); Ex parte Secombe, 60 U.S. 9

(1856).

tate courts have traditionally

exercised virtually unlimited authority

over attorneys admitted to practice

(33)

before them, unchecked even by state

legislatures under the doctrine of

separation of powers. Unlike civil

litigants or criminal defendants,

attorneys have no right to appeal from

arbitrary, capricious, or simply unfair

decisions of those courts affecting their

very right to earn a living. This Court,

and the inferior federal courts, are the

only bodies which have the power to

ensure that at least the rules applied to

attorneys do not violate fundamental

constitutional guarantees.

The importance of the power of

the federal courts to ensure that the

attorney disciplinary process comports

with due process cannot be understated.

While a state court has exclusive power

to promulgate regulations and impose

discipline in supervising its licensed

attorneys, this power may not be exer-

(34)

cised in violation of federally protected

rignts. H.A.A.C.P. ¥. Button, 371 U.S:

415, 83 $.Ct. 328, 9 L.Ed.2d 405 (1963);

in Re Ming, 469 &€.2€ i332 (/th Cir.

1972); Mattas v. Supreme Court of

Pennsylvania, 576 F.Supp. 1178 (W.D.Pa.

19383). As the United States District

Court for the Western District of

Pennsylvania stated in Mattas, supra,

"even a lawyer has the right to enjoy

first class citizenship." 576 F.Supp. at

1182 (quoting In Re Ming, 469 F.2d at

i334).

More than 100 years ago, the United

States Supreme Court declared:

The power [to disbar] .. . is

not an arbitrary and despotic

one, to be exercised at the

pleasure of the court, or from

passion, prejudice or personal

hostility; but it is the duty

of the court to exercise and

regulate it by a sound and just

judicial discretion, whereby

the rights and independence of

the bar may be as scrupulously

guarded and maintained by the

(35)

court, as the rights and

dignity of the court itself.

Ex parte Secombe, 60 U.S. 9, 13,

15 L.Ed. 365 (i856).

The risks of an erroneous depriva-

tion if attorneys are not permitted an

evidentiary hearing before The Supreme

Court of Pennsylvania in circumstances

where the Supreme Court on the basis of a

cold record rejects a hearing committee's

material findings of fact or credibility

and orders disbarment, are self-evident.

The procedural safeguards against such

risks are among the basic tenets in

American jurisprudence, succinctly

described by Chief Justice Hughes as:

"The one who decides must hear." Morgan

v. United States, 298 U.S. 468, 481, 56

S.ct. 906, 80 L.Ed. i288 (i93¢7.

More than one hundred years ago,

Lord Coleridge explained the risks of

(36)

making credibility determinations ona

cold record:

The most careful note must

often fail to convey the

evidence fully in some of its

most important elements

It cannot give the look or

manner of the witness: his

hesitation, his doubts, his

variations of language, his

confidence or precipitancy, his

caimness or consideration ;

the dead body of the evidence,

without its spirit, which is

supplied, when given openly and

orally by the ear and eye of

those who receive it.

Queen v. Bertrand, 16 Eng. Rep. 391, 399

(1857) (quoted with approval in United

tates v. Raddatz, 447 U.S. 667, 679,

100 S.Ct. 2406, 65 L.Ed.2d 424 (1980)).

The principle that due process

prohibits a court from making factual or

credibility determinations on a cold

record while it disregards the findings

of the body which heard the evidence is

reflected in a variety of contexts. For

instance, the Federal Rules of Civil

(37)

Procedure provide that the findings of

fact of the body which heard the evi-

dence, whether a trial court or a master,

may be reversed only when "clearly

erroneous." F.R.Civ.P. 52(a), 53(e)(2).

As Justice Jackson explained, these rules

reflect the common understanding that:

Face to face with living

witnesses, the original trier

of facts holds a position of

advantage from which appellate

judges are excluded. In

doubtful cases, the exercise of

his power of observation often

proves the most accurate method

of ascertaining the truth...

How can we say the judge is

wrong? We never saw the

witnesses.

United States v. Oregon Medical Society

343 0.8. 326, 339; 72 3.Ct. 890, 96 L.ma.

978 (1952).

Similarly, where a trial judge

either resigns or dies after the con-

clusion of a trial, courts have uniformly

held that due process bars the successor

judge from resolving factual disputes on

(38)

the basis of a cold record. See, e.g.,

Brennan v. Grisso, 198 F.2d 532 (D.C.

Cir. 1952); United States v. Nugent,

100 F.2d 215 (6th Cir. 1938), cert

denied, 306 U.S. 648, 59 S.Ct. 591,

83 L.Ed. 1046 (1939).

In United States ex. rei. Graham

v. Mancusi, 457 F.2d 463 (2d Cir. 1972),

Judge Friendly applied this principle to

invalidate a procedure whereby a state

appellate court entered a conviction for

a lesser offense when reversal of the

Original conviction was required. Judge

Friendly declared:

Due process forbids that, when

an issue of fact is presented,

a man should be sent to prison

without the trier of facts

having seen and heard his

accusers and himself, if he

desires to testify, and weigh-

ing the credibility in the

light of their demeanor on the

stand.

Id. at 469.

(39)

“9

ely on a review of the cold record of a

hearing before a United States

(@)

169)

67)

‘)

determining “crucial

facts. Holiday v. Johnston, 313 U.S.

342, 61

.Ct. 1015, 85 L.Ed. 1392 (1941).

In so holding, the Court emphasized:

ess

nhac pe of crucial

plained, while the holding in Holiday

..went to the fundamental

nature of the kind of factfind-

ing on which many judicial

determinations must rest

Most analogous to the issues pre-

sented here are the cases concerning

the constitutionality of the procedures

under the Federal Magistrates Act, 28

U.S.C. §636, et seg. The procedures set

forth in this Act, and those utilized by

the Pennsylvania Supreme Court in dis-

ciplinary proceedings, both provide

for the referral of the matter to a

hearing body (magistrate or hearing

committee) before which the litigant

presents testimony and other evidence.

Thereafter, that hearing body issues a

report and recommendation to the court

which is then empowered to make a

"de novo determination" of the hearing

body's findings. Compare 28 U.S.C.

§636(b)(1)(B)(C) and Pa.R.D.E. 208.

In United States v. Raddatz,

447 U.S. 667, 100 S.Ct. 2406, 65 L.Ed.2d

424 (1980), this Court considered whether

(41)

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bility findings on a cold record, noting:

Neither the statute nor its

legislative history reveals any

specific consideration of

the situation where a district

judge after reviewing the

record in the precess of makin

a de novo "determination" has

doubts concerning the credibil-

ity findings of the magistrate.

The issue is not before us, but

we assume it is unlikely that a

district judge would reject a

magistrate's proposed find: ngs

on credibility when those

findings are dispositive and

substitute the judge's own

appraisal; to do so without

seeing and hearing the witness

Or witnesses whose credibility

is in question could well give

rise to serious questions which

we do not reach.

447 U.S. at 680, n. (emphasis in

Original).

This issue left open by this Court

was squarely faced by the Fifth Circuit

in Louis v. Blackburn, 630 F.2d 1105 (Sth

Cir. 1980). In Louis, the district court

rejected a magistrate's recommendation to

grant a writ of habeas corpus based

solely on a reading of the transcript of

the hearing. The Fifth Circuit, again

under an Eldridge analysis, held that the

action of the district court violated

fundamental rights to due process

gQuaranteed by the Fourteenth Amendment.

630 F.2d at 1110. The court reasoned

that to determine credibility of a

witness the fact finder must observe that

witness. This, the court stated, could

be accomplished either by the district

judge accepting the recommendation of the

magistrate or by rejecting that recom-

mendation after hearing additional

testimony and viewing the witnesses.

(44)

Anything less, the court held, did not

comport with due process.

In Razatos, supra, the Tenth Circuit

addressed this issue in the context of

the attorney disciplinary process.

Razatos challenged the constitutionality

of the disciplinary rules of the State of

Colorado because they did not provide an

opportunity for a de novo evidentiary

hearing before the Colorado Supreme Court

irrespective of whether the court adopted

or rejected the hearing committee's

findings of fact and its recommendations

of discipline. One significant dif-

ference exists between the Colorado rules

and the Pennsylvania rules which Stern

attacks here. As the Tenth Circuit

noted, the Colorado rules do not preclude

the Supreme Court from holding a de novo

evidentiary hearing. The Tenth Circuit

stated:

(45)

Although we have found no case

in which the Court has chosen

to hold a de novo hearing, we

cannot say that the Court does

not have the power to do so.

This plenary power is con-

sistent with the Court's

inherent power apart from rule

or statute, as well as the duty

to discipline attorneys.

It includes the discretionary

right to hold de novo hearings

whenever necessary to provide

due process.

Id. at 1434.

The Pennsylvania Supreme Court's

rules, however, provide for no such

discretionary power. As the Pennsylvania

t--

Supreme Court noted

n the opinio

Gdisbarring Stern, the rules of disci-

plinary enforcement "make no provision"

for the hearing Stern requested.

Notwithstanding that the Colorado

Supreme Court could have granted Razatos

an evidentiary hearing, Razatos claimed

he rules were unconstitutional because

he did not have the absolute right to

such a hearing. The Tenth Circuit

(46)

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hearing. Raddatz, 447 U.S. at 682;

Razatos, 746 F.2d at 1434-1436.

Based on these facts, the Tenth

Circuit in Razatos concluded that, as in

Raddatz, due process rights are ade-

quately protected where the court

accepts the recommendation of the hearing

body, notwithstanding that the court

which acts as the ultimate decision maker

has not personally seen and heard the

testimony. Raddatz, 447 U.S. at 682;

Razatos, 746 F.2d at 1437.

Significantly, however, as in

Raddatz, the court in Razatos expressly

reserved decision on the question of

whether due process would require the

right to such a hearing if the court were

to reject the hearing body's findings of

material fact and credibility, as the

Supreme Court of Pennsylvania did in

tern's case. Moreover, the Tenth

(48)

Circuit implied it would seriously

question the constituticnality of a

reviewing court rejecting such findings

on a cold record, stating:

Our decision is limited to the

Situation presented by this

case. Here, the Colorado

Supreme Court evaluated the

recommended findings of fact of

the Hearings Panel, found

them supported by clear and

convincing evidence, and

adopted them. We do not reach

the question whether due

process would have required a

de novo hearing if the Court

had rejected or modified

findings of fact based on

contested credibility assess-

ments. See Raddatz, 447 U.S.

at 660, i. 7.

Razatos v. Colorado Supreme Court, 746

£.24 8t. 1437.

As the Fifth Circuit in Louis

squarely faced the issue left open by

this Court in Raddatz, the question left

open by the Tenth Circuit in Razatos must

be squarely faced by the federal courts

in Stern's case. Using Louis as a guide,

(49)

the federal courts should similarly

conclude that the Pennsylvania Supreme

Court violated Stern's right to due

process when it rejected findings of

material fact and credibility of the

hearing committee and disbarred Stern on

the basis of its substituted findings

which it reached upon review of a cold

record, all without affording Stern the

right to an evidentiary hearing. More-

over, the federal courts have the power

to make this determination and to ensure

that a state's procedures respecting the

bar do not violate the Constitution. As

the district court said in Rogers, that

was the very point of Feldman. 590

F.Supp. at 106.

(50)

CONCLUSION

For the above stated reasons, a

Writ of Certiorari should issue to review

the judgment and opinion of the Thir

ircuit Court of Appeals.

Respectfully submitted,

_— me.

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ARTHUR W. LEFCO, ESQUIRE

ALAN C. MILSTEIN, ESQUIRE

‘

Attorneys for Plaintiff

Of Counsel:

MESIROV, GELMAN, JAFFE,

CRAMER & JAMIESON

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Philadelnhia, PA 1910

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UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 87-1519

PETER M. STERN,

Appellant

Vv.

HONORABLE ROBERT N.C. NIX, JR,,

Individually, and as Chief Justice

of the Supreme Court of Pennsylvania;

HONORABLE ROLF LARSON, Individually, and

as Justice of the Supreme Court of

Pennsylvania; HONORABLE JOHN P. FLAHERTY,

Individually, and as a Justice of the

Supreme Court of Pennsylvania; HONORABLE

JAMES T. MC DERMOTTT, Individually, and

as a Justice of the Supreme Court of

Pennsylvania; HONORABLE WILLIAM D.

HUTCHINSON, Individually, and as a

Justice of the Supreme Court of

Pennsylvania; HONORABLE STEPHEN A.

ZAPPALA, Individually, and as a Justice

of the Supreme Court of Pennsylvania;

HONORABLE NICHOLAS P. PAPADAKOS,

Individually, and as a Justice of the

Supreme Court of Pennsylvania,

Appeliee

ON APPEAL FROM THE UNITED STATES DISTRICT

COURT FOR THE EASTERN DISTRICT OF

PENNSYLVANIA

(D.C. Civil No. 87-3664)

Argued: February 5, 1988

Betore: TIMBERS, WINTER

and ALTIMARI, Circuit Judges*

(Filed: Feb 29 1988)

ARTHUR W. LEFCO, ESQ. (Argued)

HAROLD CRAMER, ESQ.

ALAN C. MILSTEIN, ESQ.

MESIROV, GELMAN, JAFFE, CRAMER &

JAMIESON

15th Floor, The Fidelity Building

Philadelphia, PA 19109

HOWLAND W. ABRAMSON, ESO. (Argued)

CHARLES W. JOHNS, ESQ.

1515 Market Street

Suite 1414

Philadelphia, PA 19102

Attorneys for Appellees

*This panel of Second Circuit

judges is cir egriak as a panel cf the

Third Circuit pursuant to designation

and sanicnmant ey the Chief Justice of

the United Stat 20 U.S.6. $8 29i¢a)

and 294(d) (1 982). following

certification by the Chief Judge of the

Third Circuit that there is a necessity

for the designation and assignment of

udges of another circuit to perfor m

iuties as a panel

lil the judges of

having recused t

nstant appeal.

mre

Appellant Peter M. Stern, a

former member of the Pennsylvania bar

until he was disbarred by the Supreme

Court of Pennsylvania, appeals from a

judgment entered August 17, 1987 in the

Eastern District of Pennsylvania, Marvi

Katz, District Judge, denying Stern s

application to stay the order of the

Supreme Court of Pennsylvania which

disbarred him. Appellees are the

Honorable Robert N.C. Nix, Jr., Chief

Pennsylvania, and the six other vustic

= + ‘ea )

of tnat Court

On appeal, Stern ciaims that

the Supreme Court of Pennsylvania

violated his right to due process under

the Fourteenth Amendment because the

Court substituted its own findings for

those of a disciplinary hearing

committee. Appellees, aside from other

arguments, assert that the district

court, under the doctrine of Rooker v.

Fidelity Trust Co., 263 U.S. 413 (1923),

and District of Columbia Court of

—

Appeals v. Feldman, 460 U.S. 462 (1982),

lacked subject matter jurisdiction.

We will enter a judgment

ordering that the district court judgment

be vacated and remanded with instructions

to dismiss the complaint.

(A-4)

We shall summarize only those

facts and prior proceedings believed

necessary to an understanding of the

issues raised on appeal.”

Stern was admitted to the

Pennsylvania bar on November 21, 1966.

In 1980, the year in which the incidents

underlying his disbarment took place,

Stern had been a partner in the

Philadelphia firm of Blank, Rome, Comisky

& McCauley ("BRCM") since 1972. One of

1/ This summary of the facts is based

in part on a stipulation of facts

entered into between Stern and the

("Disciplinary Counsel”) of the

Disciplinary Board ("Disciplinary

Board" or "Board") of the Supreme

Frankford Quaker began having

difficulty with its employees when

layoffs resulted in work slow-downs and

retaliatory vandalism. Frankford Quaker

approached Teamsters Union, Local 500

(the union representing its employees),

with a request that it control its

members. When the union refused to

cooperate, Frankford Quaker "pressured"

Stern into "carrying" $5,000 to the

President of the Union, William

O'Farrell. Stern initially refused

because he believed it would be an

illegal “pay off". Nevertheless, when

Frankford Quaker threatened to dismiss

a : "tng -

him as its attorney, Stern agreed to

1-4 a + ~ : 15 —

deliver the money and did so.

‘a_i an a, te a .

sont d

t of Pennsylvania in

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The first time Stern approached

O'Farrell the union president refused to

accept any money. Stern asserts that

O'Farrell said he would make no

concessions in consideration of any

payment. When Stern returned to

Frankford Quaker he was told to deliver

the money anyway "couched in terms of a

Christmas gift", as Stern put it. This

time, O'Farrell accepted the money.

According to Stern, O'Farrell made it

clear that he would not be influenced in

any way by the funds. Stern says that he

believed the money actually was a gift.

Indeed, the retaliating employees did not

change their behavior.

In early 1982, the Federal

Bureau of Investigation ("FBI'

") began to

investigate O'Farrell's extortion

activities. Upon learning of Stern s

dealings with O'Farrell, the FBI

(A-7)

requested the Justice Department to

inform the Disciplinary Board of Stern's

involvement with O'Farrell. The

Department did so.

On January 14, 1985, the

Disciplinary Counsel of the Disciplinary

Board filed a petition for discipline

against Stern. The Disciplinary Counsel

charged him with violations of various

Pennsylvania Disciplinary Ruies of the

Code of Professional Responsibility

("DR"). Specifically, he was charged

with violating DR 1-102(A)(3)

(prohibiting lawyers from engaging in

illegal conduct involving moral

turpitude); DR 1-102(A)(4) (prohibiting

lawyers from engaging in conduct

involving dishonesty, fraud, deceit or

fitness to practice law); and DR

7-102(A)(7) (prohibiting lawyers from

counseling or assisting clients in

conduct they know to be fraudulent or

illegal).

In September 1985, Stern and

the Disciplinary Counsel entered into a

comprehensive stipulation of facts, in

which Stern stipulated, among other

things, that he had violated DR

7-102(A)(7).

The Hearing Committee ("Hearing

Committee") of the Disciplinary Board

held an evidentiary hearing on September

26, 1985. The Hearing Committee filed

its report on February 27, 1986,

including findings of fact and

conclusions of law. The report

recommended, first, dismissal of the

charges brought under DR 1-102(A)(3), (4)

and (6); and, second, a private informal

(A-9)

admonition or private reprimand (two

relatively lenient sanctions) with

respect to the charges brought under DR

7-102(A)(7). The Hearing Committee

explicitly found that, when Stern made

expected to influence O'Farrell. The

Hearing Committee stated, "[w]le find that

the payor's (i.e. [Stern's] and/or his

client['s]) intent was to make a gift and

not buy a result.

The Board reviewed the Hearing

Committee's report and the record. On

(9)

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O' Farrell. Moreover it stated that

there was no doubt that Stern '

"knowingly

delivered the questioned payment" and

that the payment violated the law.

On October 9, 1986, the Supreme

Ht)

Court of Pennsylvania ordered Stern to

show cause why he should not be

disbarred. Stern requested a hearing and

Oral argument. On November 10, 1986, the

Supreme Court denied the request for a

hearing, but granted the request for oral

argument. Stern and the Disciplinary

Counsel submitted briefs. The

Disciplinary Counsel requested that Stern

not be disbarred.

heard oral argument on January 29, 198

it had independently reviewed the record,

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relimin

(1983), stating that a district court has

"no authority to review final judgments

of a state court in judicial proceedings"

and "[rJjeview of such judgments may be

had only in this Court." Id. at 482.

The Feldman Court stated, however, that a

district court would have subject-matter

jurisdiction over "general challenges to

State bar rules, promulgated by state

courts in nonjudicial proceedings, which

do not require review of a final

State-court judgment in a particular

case." Id. at 486. A district court

"may simply be asked to assess the

validity of a rule promulgated in a

nonjudiciai proceeding." Id. The Court

emphasized, however, that a district

court still does not have jurisdiction

over "challenges to state-court decisions

in particular cases arising out of

judicial proceedings even if those

(A-16)

challenges allege that the state court's

action was unconstitutional." Id.

(emphasis added). It is undisputed that

the instant case arises out of a judicial

proceeding.

Having drawn this distinction

between general and particular

challenges, the Feldman Court also stated

that a particular challenge would not be

saved by the mere fact that the plaintiff

had failed to raise the constitutional

challenge in the state court; and that,

as a result, the state court never

adjudicated the issue and Supreme Court

review therefore would be unavailable.

The Fifth Circuit had reasoned, in

Dasher v. Supreme Court of Texas,

658 F.2d 1045 (Sth Cir. 1981) (cited in

reldman, 460 U.S. at 482 n.16),

Gert.

jenied sub nom. Howell v. State

since Supreme Court review would be

unavailable and the state court had not

adjudicated the federal issue, the

trict court would have jurisdiction

over the constitutional claims in such a

case. The Feldman Court, however, stated

that "[i]f the constitutional claims

court are inextricably intertwined with

}

the state court's denial in

proceeding of a particular plaintiff s

state-court decision. This the district

460 U.S. at 482 n.16. "By failing to

raise his claims in state court a

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order and a preliminary injunction, both

of which required him to demonstrate the

likelihood of success on the merits and

irreparable harm to himself, thus

shifting the focus to the actions of the

Supreme Court of Pennsylvania in his

particular case. The complaint and the

stipulation of facts contained extensive

exposition of the specific facts in

Stern's case, which hardly would have

been necessary if the district court were

being asked only to "assess the validity"

of the rule in its general application.

the time of his appellate briefs,

169)

Stern had become completely focused on

his own case. in his brief headings

Stern asserted that in disbarring hin,

the Supreme Court, pursuant to its rules

ected the Hearing

to due process cf law" (emphasis added).

Dropping the reference to other “similary

situated" attorneys, Stern, in the

conclusion to his brief, requested an

order "permanently enjoining the Supreme

Court of Pennsylvania's Order disbarring

Stern from the practice of law. "3/

In short, a close examination

of Stern's case demonstrates that,

despite his attempt to draft hi

))

. ie es a) ts ae - ee

complaint in the form of a general

court judgment in his particuiar case

3 The fact that Stern did not raise

his constitutional claims in the

state court does not change the

analysis As stated above, Feldman

held that failure te raise

constitutional claims in the state

court means only that the plaintiff

may have waived his right to raise

those claims in any court see

supra pp. 8-9

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coextensive with those required in a

criminal case, Razantos, supra at 1435.

4. The Pennsylvania Supreme

Court did not challenge the factual

findings of the Hearing Committee or the

Disciplinary Board, but rather, came to a

different conclusion as to the

appropriate sanction. Therefore, the

probable value of an additional

evidentiary hearing is minimal; and since

there is not a question of conflicting

facts or testimony, the risk of an

erroneous deprivation is also low. Thus,

the practical concern for accurate

results that is the focus of the Due

Process Clause, U.S. v. Raddatz, 447 U.S.

667, 684 (Blackmun, J. concurring) is not

threatened here.

2 The Pennsylvania Supreme

Court also has a strong interest in

maintaining a high standard of

(A-30)

professional conduct among attorneys

practicing in Pennsylvania, and in

enforcing Disciplinary Rules diligently.

While the Supreme Court may rely on some

conclusions of the Disciplinary Board, it

is not bound by the Board's findings or

recommendations. The Supreme Court also

has a valid interest in putting its

resources to the best use and in not

burdening itself with an additional

evidentiary hearing that the Supreme

Court determines would not be useful in

this case. Requiring such a hearing in

this case would be too great a burden on

the court and would run counter to the

Committee and Board's purpose of freeing

the court from developing the entire

record independently. Razantos, supra at

1437.

6. There has been no denial

of due process under the flexible

(A-31)

balancing test in this case. The Supreme

Court's exercise of its discretion to

deny an evidentiary hearing in this

matter does not offend the Constitution.

The strong government interest combined

with the low risk of error and low

probable vaiue of additional procedures

in this particular matter outweigh the

private interest in obtaining an

additional hearing.

wa The findings and

conclusions in my Order of June 26, 1987

are incorporated herein.

S. The Clerk shall file the

attached letter dated August 12, 1987,

reflecting the agreement of the parties.

BY THE COURT:

MARVIN KATZ, J.

(A-32)

[ J-16-1987]

IN THE SUPREME COURT OF PENNSYLVANIA

EASTERN DISTRICT

OFFICE OF DISCIPLINARY

COUNSEL, :

Petitioner:

PETER M. STERN, :

Respondent:

(Philadelphia)

OPINION

NIX, C. J. FILED:

No. 353i

Disciplinary

Docket

No. 551

Disciplinary

Docket

No. 2

Disciplinary

Board

No. 2 DB&5

Attorney

Registration

No. 03314

ARGUED:

January 29,

1987

June 3, 1987

This Court, in response to the

Report and Recommendation filed in this

matter by the Disciplinary Board of the

Supreme Court of Pennsylvania ("Board"),

has issued a Rule to Show Cause why

(A-33)

Respondent, Peter M, Stern, should not be

disbarred from the practice of law in the

Commonwealth of Pennsylvania. Having

considered the pleadings and briefs filed

by Respondent and the Office of

Disciplinary Counsel, having heard oral

rgument and after a full review of the

record submitted by the Board, we are

constrained to conclude that the Rule to

Show Cause must be made absolute and

Respondent disbarred.

The Office of Disciplinary

Counsel filed a Petition for Discipline

on January 14, 1985, in which it alleged

that Respondent had violated four

provisions of the Disciplinary Rules of

the Code of Professional Responsibility,

specifically:

(A-34)

(1) DR 1-102(A)(3),

prohibiting an attorney

from engaging in illegal

conduct involving moral

turpitude;

(2) DR 1-102(A)(4),

prohibiting an attorney

from engaging in conduct

involving dishonesty,

fraud, deceit or

misrepresentation;

(3) DR 1-102(A)(6),

prohibiting an attorney

from engaging in other

conduct which adversely

reflects on his fitness to

practice law; and

(4) DR 7-102(A)(7),

prohibiting an attorney

from counselling or

assisting a client in

conduct the attorney knows

to be illegal or

fraudulent.

The immediate predicate for the Petition

for Discipline was a letter in response

to a request from the Office of

Disciplinary Counsel, from the United

States Attorney for the Eastern District

of Pennsylvania. That letter stated that

Respondent had been one of the principal

(A-35)

government witnesses in the prosecution

of William O'Farrell, President of

Teamsters’ Union Local 500, for

attempting to extort a Fifteen Thousand

Dollar ($15,000.00) bribe from one of

Reavondent's clients. The United States

Attorney further related of Investigation

that Respondent had made an unrelated

payment of that he had been aware of an

allegation made by the Federal Bureau of

Investigation that Respondent had made an

unrelated payment of Five Thousand

Dollars ($5,000.00) to O'Farrell on

behalf of another client, and that

Respondent made admissions concerning

that allegation.

The Petition for Discipline was

referred to a Hearing Committee on

(A-36)

February 14, 1985.4 That Committee

conducted a hearing on September 26,

1985, during which a detailed stipulation

of facts was adopted, and filed its

Report on February 27, 1986. The Hearing

Committee found that Respondent had

violated only DR 7-102(A)(7), and

recommended a private informal admonition

4/ At an early stage of the proceedings

before the Hearing Committee,

Respondent argued that the corpus

delicti rule employed in criminal

prosecutions should be applicable

Disciplinary Board proceedings. A

majority of the Hearing Committee

assigned to this matter rejected

that contention. That argument was

not subsequently raised before the

Board. Respondent has attempted to

revive his corpus delicti theory

before this Court. Having entered

into a stipulation of facts to

obviate the need for testimony to

establish his culpability and to

improve his chances for lenient

treatment, Respondent will not now

be heard to complain that his

admissions are insufficient evidence

to prove his transgressions.

b+.

’

(A-37)

by Disciplinary Counsel cr, at most, a

private reprimand by the Board. See Pa.

R.D.E. 204(a)(5), (6). Exceptions were

filed by the Office of Disciplinary

Counsel and, on April 9, 1986, the matter

was referred to the Board. In its Report

and Recommendation, transmitted to this

Court on July 7, 1988, the Board

concluded that Respondent had violated

DR 1102(A)(3), DR 1-102(A)(4),

DR 1-102(A)(6), and DR 7-102(A)(7), and

recommended the imposition by this Court

of a public censure, see Pa. R.D.E.

204(a)(3), and the payment of costs, see

Pa. R.D.E. 208(g)(1).

Upon consideration of the

Board's Report and Recommendation, this

Court issued upon Respondent a Rule to

Show Cause why he should not be

disbarred. Respondent's request for oral

(A-38)

argument was granted. >/ Raving been

briefed and argued, this matter is now

ripe for disposition.

Our scope of review and the

criteria which guide us in evaluating the

evidence in attorney disciplinary matters

have been recently set forth in Office

of Disciplinary Counsel v. Keller, 509

Pa. 573, 506 A.2d 872 (1986):

Before analyzing the

testimony offered in

support of the charges it

S/ Pursuant to Pa. R.D.E. 208(e)(3),

Respondent had an absolute right to

Oral argument upon request.

Respondent, however, also requested

an evidentiary hearing before this

Court, a procedure for which the

Rules of Disciplinary Enforcement

make no provision. This writer

denied that request on November iO,

1986.

must be noted that this

Court's review of attorney

discipline is a de novo

one. Thus, we are not

bound by the findings of

either the Hearing

Committee or the

Discipiinary Board.

Matter of Green, 470 Pa.

164, 368. A.2d 245,

(1977); Office of

Disciplinary Counsel v.

Walker, 469 Pa. 432,

366 A.2d 563 (1976);

Office of Disciplinary

Counsel v. Campbell, 463

Pa. 472, 345 A.2d 616

(1975), cert. denied,

424 U.S. 926, 96 S.Ct.

1139, 47 L.Ed. 2d 336

(1976). Although we are

free to evaluate the

evidence presented before

the Hearing Committee,

In re Silverberg, 459 Pa.

107, 327 A.2d 106 (1974),

cert. denied, 456 U.S.

975, 102 $.Ct. 2240,

72 L.Ed. 2d 849 (1982), we

may be enlightened by the

decisions of these triers

of fact who had the

Opportunity to observe the

demeanor of the witnesses

during their testimony.

Matter of Green, supra;

Office of Disciplinary

Counsel v. Walker, supra;

Office of Disciplinary

counsel v. Campbell,

supra. ....Nor is the

petitioner required to

(A-20)

establish the misconduct

through direct evidence.

The ethical violations may

be proven solely by

circumstantial evidence.

Office of Disciplinary

Counsel v. Grigsby, supra;

Lemisch's Case, 321 Pa.

110, 184 A. 72 (1936);

Salus's,Case, 321 Pa. 106,

184 A. 70 (1936).

Id. at 579-80, 506 A.2d at

875.

We will first consider the

findings of fact made by the Hearing

matter, Respondent and the Office of

Disciplinary Counsel entered into

Getailed stipulations which were

ultimately adopted by the Hearing

Committee as findings of fact. The

relevant facts as set forth in those

stipulations are as follows. °/

Respondent was born in 1941 in

Philadelphia. He graduated from

Cheltenham High School, where he was

editor-in-chief of the school newspaper.

Respondent then attended Dartmouth

College, where he was vice-president of

his class and managed the campus radio

station. While at Dartmouth Respondent

won a fellowship which enabled him to

work for academic credit at the National

Labor Relations Board in Washington, D. C.

Respondent graduated from Dartmouth with

high honors in 1963 and subsequently

entered the University of Pennsylvania

Law School, where he was an editor of its

6/ Facts omitted from the Stipulations

will be provided in footnotes and in

subsequent text.

(A-42)

labor clients, including numerous clients

in the food and paper converting

industries. One of the largest of those

clients was the Frankford Quaker Grocery

Company ("Frankford Quaker"), which

served a local supermarket chain. In

1980 Frankford Quaker experienced

financial difficulties due to a shrinkage

in volume and sought the cooperation of

Local 500 of the Teamsters Union, which

represented Frankford Quaker's employees,

with regard to work assignments.

Officers of Frankford Quaker asked

respondent to deliver Five Thousand

Dollars ($5,000.00) to William O'Farrell,

President of Local 500, in the hope that

O'Farrell would not oppose the requested

assistance. Respondent initially refused

to deliver the money but eventually

acceded to his client's demands when

Frankford Quaker threatened to retain

(A-44)

other counsel. Respondent met with

O'Farrell on two occasions, successfully

delivering the Five Thousand Dollars

($5,000.00) on the second occasion.

Some time later O'Farrell

demanded that another of Respondent's

clients, Data File, Inc., pay O'Farrell a

Fifteen Thousand Dollar ($15,000.00)

bribe. Respondent refused and advised

Data File not to make such a payment,

whereupon he was discharged as counsel.

In early 1982 the Federal Bureau of

Investigation ("FBI") began investigating

bribes allegedly extorted by O'Farrell.

Respondent met with two Assistant United

States Attorneys and an FBI agent in or

about January, 1983. During the meeting,

Respondent acknowledged his delivery of

Frankford Quaker's funds to O'Farrell. //

Based on the information provided by

Respondent concerning O'Farrell's alleged

attempt to extort money from Data File,

Inc., the federal government obtained the

indictment of O'Farrell in the United

tates District Court for the Eastern

District of Pennsylvania. Respondent

7/ The FBI had learned of Respondent's

payment to O'Farrell from a

confidential source and had

furnished the United States Attorney

with that information. See N.T.

Sept. 2, 1985 at 9-10, 14, 47. The

prosecution was concerned that the

information concerning Respondent's

prior involvement with O'Farrell was

subject to disclosure to the defense

under Brady v. Maryland, 373 U.S. 83

(1963), as exculpatory evidence. We

find it disturbing, however, that

the United States Attorney's office

did not, upon acquiring that

information, also immediately

communicate it to the Disciplinary

Board pursuant to DR1-103.

-==- «SO

(A-46)

served as the principal prosecution

witness.

In Paragraph 11 of the

Stipulations Respondent admits that his

delivery of the funds to O'Farrell in

violation of the Labor Management

Relations Act violated DR7-102(A)(7).

The Stipulations also include various

evidence in mitigation, which shall be

discussed later.

In addition to ado ting the

tipulations summarized above, the

Hearing Committee made two additional

findings of fact:

8/ Respondent did not request immunity,

but the prosecution nevertheless

immunized him as a precaution.

While the stipulations do not

address the outcome of the S8183, it

appears from the record of the

instant matter that O'Farrell was

acquitted. N.T. Sept. 26, 1985 at

122.

(A-47)

O'Farrell

Board did, however,

6.1 On the second

occasion, when O'Farrell

accepted the $5,000

profterred by Respondent,

O'Farrell told respondent

that he, O'Farrell([, ]

considered it a gift and

that he did not intend to

do anything for it.

6.2 On the second

occasion when Respondent

proferred and O'Farrell

accepted the $5,000.00,

Respondent did not expect

or intend that O'Farrell

would be influenced in

respect to any of his

actions, decisions, or

duties as a representative

of Frankford Quaker

employees.

The Disciplinary Board in its

Report and Recommendation to this Court

questicned these two findings but did not

decide whether Respondent's payment to

was a bribe or a gift. The

type of payment would violate federal

(A-48)

recognize that either

law. This Court considers the intent

to influence a crucial factor in

determining the gravity of Respondent's

breach of our ethical standards.

Accordingly, we have independently

examined the record before us, aS is our

right and obligation, and have concluded

that the Hearing Committee's findings

with respect to Respondent's delivery of

Frankford Quaker's funds to O'Farrell are

Supported by no credible evidence.

The Hearing Committee's finding

that Respondent's payment to O'Farrell

was a mere "gift" is at odds with

af Section 302 of the Labor Management

Relations Act, 2 U.S.C. §186, is

"a criminal provision, maium

prohibitum, which outlaws all

payments, with stated exceptions,

between employer and

representative." United States v.

Ryan, 350 U.S. 229, 305 (1956).

evidence furnished by the United States

Attorney's office and with Respondent's

own testimony. In its letter to the

Board dated December 19, 1983, the United

States Attorney's Office states:

Stern explained that

he represented a client

named "Frankford-Unity,

Inc.," as labor lawyer.

The client had a dispute

with its employees, who

were represented by Local

500 of the Teamsters

Union, Stern explained

that the company was

having financial problems

and that it needed some

concessions from the union

in terms of work rules, or

in terms of having work

done by outside

contractors. The precise

nature of the dispute is

not clear to either of us

but, in any event, it [is]

clear that the following

events occurred. Stern

explained that his

clients, whose names he

did not give requested

that he give $5,000 to

O'Farrell so that

O'Farrell would

"backoff" from his

position opposing

any concessions.

(Emphasis added. )

(A-50)

The testimony of Assistant United States

Attorney Robert E. Welsh, Jr., during

September 26, 1985, hearing is to the

Same effect:

Mr. Stern told us

that he had represented a

client, and it is my

memory that he said

Frankford-Unity,

Incorporated, as a labor

lawyer. And that this

client was some sort of

trucking company that had

a labor problem. It was

represented by Teamsters

Local 500. This is in

1980 that this labor

problem occurred. The

labor problem dealt with a

dispute over work rules in

that--or job security

might be a better way to

Say ite--in that the

company wished to farm out

certain work. I don't

know what kind of work, we

did not get into that.

But the point is that the

Teamsters 500 was

resisting, Claiming and

arguing that its employees

Or its members were

entitled to the work.

This is not an uncommon

type of labor dispute.

At this point,

according to Mr.

(A-51)

Lne

Stern, his clients

developed the idea of

attempting to influence

a [sic] O'Farrell with

a payment of some form

of consideration.

(Emphasis added. )

N.T. September 26, 1985,

at a3.

At the hearing Respondent

characterized his discussion wit!

Frankford Quaker's representatives

nceerning the payment as follows:

Well, they cast

around for something tec do

and in a discussion with

me, they said, if you

can't help us by

discipline and fighting

them, and we're paying you

this retainer, and more

than the retainer

sometimes, we are going to

have to take another tack.

We are going to have to do

something else. There was

discussion about--I don't

remember the words or the

give and take) but they

said something to the

effect, we want to see

if paying him softens

his attitude. (Emphasis

added. )

N.T. September 26, 1985,

at 141.

From the foregoing it is clear

that the purpose of the payment to

O'Farrell was to influence him in his

Capacity as President of Local 500 ana

that Respondent was well aware of that

fact. O'Farrell's initial unwillingness

to cooperate serves as additional

evidence of Respondent's full

appreciation of the character of the

transaction. The impact of Respondent's

seli-serving testimony with regard to his

intent as to the effect of the payment

pales before the overwhelming evidence to

the contrary. We conclude, therefore,

that Respondent facilitated an attempt by

Frankford Quaker to bribe O'Farrell.

Respondent's testimony

establishes that he knew such a payment

would be illegal and so informed his

client: "I said, don't do it, it's

(A-53)

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setback to his career. His ethical

judgment was compromised by purely

selfish financial considerations. On

this record we must conclude that

Respondent committed a serious breach of

the Disciplinary Rules, violating DR

1-102(A)(3), which prohibits an attorney

from engaging in illegal conduct

invoiving moral turpitude; 22/

DR 1-102(A)(6), which prohibits an

attorney from engaging in other conduct

which adversely reflects on his fitness

to practice law; and DR 7-102(A)(7),

which prohibits an attorney from

11/ In our recent decision in Office of

Disciplinary Counsel v. Simon, 5

Pa. 312, 307 A.24@ iz (1966), tnis

Court defined "moral turpitude" as

"to J.anything done knowingly

contrary to justice, honesty,

principle, or good morals.'" Id. at

320, 507 A.2d at 1220, quoting Muniz

v. State, 575 S.W.2a 408, 411 (Tex.

1978).

counselling or assisting a client in

conduct the attorney knows to be illegal

12/

or .trauduient.)-——

We do not agree with the Office of

Disciplinary Counsel that a

violation of DR 1-102(A)(4), which

prohibits an attorney from engaging

in conduct involving dishonesty,

fraud, deceit or misrepresentation,

is established by the record. We

recently interpreted that rule in

Office of Disciplinary Counsel v.

Simon:

Although there is, in the

broadest sense, dishonesty

involved in every crime, we do

not (nor did the Board) find

that respondent's conduct

involved dishonesty, fraud,

deceit, or misrepresentation.

To charge respondent with a

violation of this rule under

the facts presented in this

case would be to make this rule

too broad and all encompassing.

The rule should be construed in

its normal sense and

"dishonesty" should not be

taken out of context. Rather,

it should be considered as it

is commonly associated with

those violations involving

theft, misappropriation, etc.

see, €.g.,

Office of Disciplinary Counsel v.

(A-59)

Having ascertained that

Respondent has committed multiple serious

violations of our Disciplinary Rules, we

(cont'd)

Lewis, 493 Pa. 519, 426 A.2d

1138 (1981).

510 Pa. at 320 n.7, 507 A.2d

at 1219-1220 n.7.

The common element in dishonesty,

fraud, deceit and misrepresentation

is deviation from the truth, as is

illustrated by our prior

disciplinary decisions. See, e.g.,

Office of Disciplinary Counsel v.

Wittmaack, Pa. , wae A. 2G

522 (1987) (failure to inform

clients of conflicts of interest;

fabrication of evidence; false

testimony); Office of Disciplinary

Counsel v. Tumini, 499 Pa. 284,

453 A.2d 310 (1982) (false swearing

before grand jury); Office of

Disciplinary Counsel v. Grigsby, 493

Pa. 194, 425 A.2d 730 (1981)

(filing sworn pleading known to be

false); Office of Disciplinary

Counsel v. Walker, 469 Pa. 432,

366 A.2d 563 (1976) (failure to

inform client of adverse influences

and conflicting interests); Berlant

Appeal, 458 Pa. 439, 328 A.2d 471

(1974) (attempted solicitation of

perjury); Montgomery County Bar

(A-60)

must now determine the appropriate

discipline to be imposed. t should be

noted first that disciplinary sanctions

are not primarily designed for their

punitive effects. Office of

Disciplinary Counsel v. Tumini, 499 Pa.

284, 288, 453 A.2d 310, (1982).

Rather, as explained in Office of

Disciplinary Counsel v. Kelier, supra:

The primary purpose

of our system of lawyer

discipline is to protect

the public from unfit

attorneys and to maintain

the integrity of the legal

system. See In re Oxman,

496 Pa. 534, 437 A.zd

1169 (1981), cert.

denied, 456 U.S. 3975,

102 S.Ct. 2240, 723

L.Ed.2d 849 (1982);

Office of Disciplinary

(cont'd)

Association v. Hecht, 456 Pa. 13,

317 A.2d 597 (1974) (false

swearing). We find that element

absent from Respondent's conduct.

(A-61)

4 9

20 A.24 Lise (3

ce of Disciplina

ounsel v. Grigsby,

Pa. i194, #25 A.2a 73

(1981). Disciplinary

procedures have been

established as a catharsis

for the profession and a

prophylactic for the

public. Office of

Disciplinary ares Vv.

Lewis, supra 493 Pa. at

528, 426. hoa at 1142.

Id. at 579, 506 A.2d at

75.

In addition to protecting the public, it

is our responsibility to seek to preserve

public confidence in the legal profession

and the judicial system. See Office of

Disciplinary Counsel v. Le

‘=

09)

319, S27, 426 A. 26 1138, i142 (1981).

The public position

of one who is a member of

the legal profession is

one of great

responsibility. Integrity

and the exercise of good

faith in an attorney's

professional engagements

are essential for the

protection of the public,

the courts and the

profession itself. it

must be fully appreciated

that each member of the

bar is an officer of the

Court. Consequently, it

is the solemn duty of the

judiciary to insure that

the proper standing of its

officers is preserved.

See Johnson Disbarment

Case, 421 Pa. 342, 345,

219 A.2da 593, 395 (1966);

In re Davies, 93 Pa. 116,

Lae (1880).

Matter of Lecpold, 469 Pa.

364, 392, 366 A.2da 227,

230-231 (1976) (footnote

omitted).

Rule 204 of the Rules of

Disciplinary Enforcement specifies six

types of discipline ranging from private

informal admonition by Disciplinary

Counsel to disbarment by this Court.

Pa.R.D.E. 204(a). The nature of the

sanction of disbarment was recently

described in our decision in Office of

Disciplinary Counsel v. Keller, supra:

Disbarment is an

extreme sanction which

must be imposed only in

the most egregious cases,

Office of Disciplinary

(A-63)

Counsel v. Kissel, supra;

Matter of Leopold, 469 Pa.

384, 366 A.2d 227 (1976),

because it represents a

termination of the license

to practice law without a

promise of its restoration

at any future time. It

has been deemed

appropriate: where the

misconduct involves the

types of breach of trust

exhibited in this case.

As noted in Johnson

Disbarment Case, 421 Pa.

342, 219 A.2d 593 (1966):

It is the duty

of the courts to

maintain the

integrity of the Bar

and to see that

courts and its

members "do not fall

into disrepute with

the general public

through the

unprofessional or

fraudulent conduct"

of attorneys

(Forman's Case, 321

Pa. 47, 164 A. 73}.

"The power of a court

to disbar an attorney

should be exercised

with great caution,

but there snould be

no hesitation in

exercising it when it

clearly appears that

it is demanded for

the protection of the

(A-604)

public. The court by

admitting an attorney

to practice endorses

him to the public as

worthy of confidence

in his professional

relations, and if he

becomes unwortny, it

is its duty to

withdraw its

endorsement...."

Johnson Disbarment

Case, supra 421 Pa.

at 345-46, 218 A.2d

at 595 (citation

omitted).

Id. at 588-87, 506 A.Zd at

879.

Having fully considered

Respondent's serious transgressions

against our standards of conduct for

attorneys, we are satisfied that

disbarment is the only appropriate

remedy. Respondent's actions represent a

dual injury to the public. First,

motivated solely by pride and greed, he

permitted himself to be corrupted by his

own client, discarding his proper role as

legal advisor and becoming a mere conduit

disrupting proper labor-management

¢; } ~ ~f ~~ + 7 ~ - a =~ }

Such conduct will not be countenancec by

As the United States

Supreme Court stated in

Ex Parte Wall, 107 U.S.

265, 2/4, 22 $.Ct&. 369,

576, 27 L.Ed. 552 (1882)

"Of all classes and

professions, the lawyer is

most sacredly bound to

uphold the laws. He is

their sworn servant; and

for him,...argues

recreancy to his position

and office.... It

manifests a want of

fidelity to the system of

lawful government which he

has sworn to uphold and

preserve." Where one who

has sworn to uphoid the

law actively conspires to

breach it, his fitness to

practice is unquestionably

destroyed

Pa. 472, 483, 345 A.2da

616, 622 (1975), cert.

denied, 424 U.S. 9326

(1876).

Accord, Office of Disciplinary Counsel

v. Casety, 511 Pa. 177, 182-183,

512 A.2d 607, 610 (1986). Respondent has

grossly abused the privileges entrusted

to him and has debased not only himself

but also the entire Bar of this

Commonwealth, and his continued practice

would be inimical to the public interest.

In his pleadings submitted to

this Court Respondent has attempted to

mitigate the severity of his misconduct.

Respondent emphasizes his outstanding

| success as a labor attorney and his

otherwise unblemished disciplinary

record. He also points to his contrition

and his cooperation with federal law

enforcement officials. In addition,

Respondent stresses his active

participation in professional, community

(2-67)

a aa alee

and religious programs in th

Philadelphia area. Finall

details the economic hardship, loss of

social and professional standing and

strain on his health and family life he

has endured in the wake of his own

misbehavior. We find that these factors

do not offset the seriousness of

Respondent's disciplinary violations or

support his contention that he remains

fit to practice law. As to Respondent's

much emphasized cooperation with the

federal authorities, the record refle

that he made his admissions only after

being confronted by federal law

enforcement officials aware of his

misconduct. Cooperation at that point

was clearly in his own seif-interest.

The same is, of course, true with respect

to the subsequent disciplinary

proceedings. We also note that the

stipulations into which Respondent

entered, while admitting misconduct, were

hardly a model of candor, and attempt to

paint as favorable a picture as possible

under the circumstances. Respondent's

involvement in professional, civic and

religious activities, while laudable is

not relevant to our basic inquiry,

| Respondent's fitness to practice law in

this Commonwealth. Moreover, without

denigrating Respondent's extracurricular

endeavors, we note that such activities

are widely employed as a means of

professional advancement. Finally, as to

the disastrous personal consequences of

Respondent's well-publicized misconduct,

we must conclude that pleas for sympathy

must not obscure this Court's

responsibility to protect the public from

unscrupulous lawyers. Respondent's

downfall is entirely of his own making

(A-69)

———————

. " *

and prominence in the legal community

serve to magnify his ethical breaches.

It is entirely apprcepriate to expect the

most meticulous adherence to ethical

standards from those with exceptional

ability. Such attorneys should serve as

models for the other members of the Bar

and as public symbols of the highest

professional ideals. When a member of

the elite, such as Respondent, debases

himself and violates the law for sheer

personal gain, public confidence in the

legal profession is destroyed.

Respondent has no right to

expect less than disbarment.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.