Salem’s Lot: A Case Of First Impression

An attorney not admitted in Illinois should be censured in that jurisdiction, according to a recent report of the state bar Review Board. 

Respondent is an Illinois resident who holds a New York law license but not an Illinois law license. Based upon Respondent’s practice of law in Illinois, the Administrator brought a four-count complaint against Respondent, charging him with engaging in the unauthorized practice of law in Illinois, falsely holding himself out as an Illinois attorney, and making false statements to two judges, in violation of 2010 Illinois Rules of Professional Conduct 5.5(a), 5.5(b)(1), 5.5(b)(2), 7.1, 7.5(a), 3.3(a), and 8.4(c).

The Hearing Board found that Respondent violated Rule 5.5(b)(2) by holding himself out as an Illinois attorney to a Cook County Circuit Court judge. It found that the Administrator had not proved the remaining charged misconduct. It recommended that, for his misconduct, Respondent be censured.

The Administrator filed exceptions to the Hearing Board’s findings that Respondent did not violate Rules 5.5(b)(2) and 8.4(c) by dishonestly holding himself out to the public as an Illinois attorney. He also challenged the Hearing Board’s sanction recommendation, and asked this Board to recommend a suspension of 90 days and until further order. On cross-appeal, Respondent argued that he should receive a lesser sanction than censure.

A majority of the review panel affirmed the Hearing Board’s finding that Respondent violated Rule 5.5(b)(2) in connection with his appearance before a Cook County judge but engaged in no other misconduct. The majority agreed with the Hearing Board’s reasoning that Rule 5.5(b) did not clearly prohibit Respondent’s conduct. It also found no basis for overturning the Hearing Board’s finding that Respondent testified credibly, and consequently found no basis for overturning the Hearing Board’s finding of no dishonesty. The majority agreed with the Hearing Board’s recommendation that Respondent be censured for his misconduct.

A dissenting member believed that Respondent violated Rules 5.5(b) and 8.4(c) because of the breadth and length of his legal activities in Illinois, and recommended that he be suspended for 30 days for his misconduct.

The attorney had practiced in federal court and when admitted pro hac vice in state courts. The board concluded that such conduct was not clearly improper.

In sum, we find that the Hearing Board thoroughly analyzed the evidence that was presented to it; made findings of fact that were fully supported by that evidence; and engaged in a well-reasoned application of the law to the facts in reaching its findings regarding misconduct. The Administrator has given us no basis to overturn those findings. We therefore affirm the Hearing Board’s finding that Respondent violated Rule 5.5(b)(2) in connection with his appearance before Judge Feerick but engaged in no other misconduct.

Benedict Schwartz dissented

I believe it is clear, based upon the evidence in the record, that Respondent has been circumventing the intent of the Character and Fitness Committee for 15 years by effectively practicing in Illinois after being denied a license. Respondent acknowledged that 10 percent of his practice is comprised of pro hac vice cases in Illinois. This is a significant amount of legal work, and surely not what the Character and Fitness Committee intended after it denied him a license to practice in Illinois. I find the extent of Respondent’s Illinois practice troubling, particularly considering that Respondent has lived in Illinois since 2003 and his letterhead and business cards had an Illinois address. Based upon the length and extent of his practice in Illinois, I would find that Respondent violated Rule 5.5(b) by establishing a continuous and systematic presence in Illinois and holding himself out to the public as an Illinois attorney.

However, while I agree with the Administrator that the Hearing Board erred in not finding that Respondent engaged in additional misconduct, I disagree with the Administrator’s suggested sanction of a suspension of 90 days and until further order. The Administrator acknowledged at hearing that this is a case of first impression. (See Report of Proceedings at 23.) Given the novelty of the issues raised in this matter and the lack of any Supreme Court precedent on the subject, combined with the ambiguity of the rules as applied to Respondent’s practice and the fact that Respondent complied with the letter if not the spirit of them, I believe a short suspension is sufficient to achieve the goals of attorney discipline in this matter. Anything more strikes me as unfairly punitive.

Accordingly, I would recommend that Respondent be suspended for 30 days for his misconduct.

He was just sanctioned by the United States Court of Appeals for the Seventh Circuit as reported by Big Law Business

An attorney who relentlessly made an “absurd” argument concerning court jurisdiction was properly sanctioned, the U.S. Court of Appeals for the Seventh Circuit said Nov. 1, in an unpublished opinion.

Maurice Salem represents Terri Zausa in her effort to collect a multi-million dollar state judgment from her ex-husband, Jack. Both Terri and Jack live in Illinois.

Jack’s former business partner, Michael Pellin, lives in Indiana, and allegedly owes Jack $1.8 million.

Federal diversity jurisdiction requires that the parties live in different states.

Salem filed Terri’s suit against Jack in a federal district court in Illinois and named Pellin as a third party who could pay Terri’s judgment. Salem claimed diversity was complete because, although Terri and Jack lived in the same state, Pellin didn’t.

The suit was dismissed for lack of jurisdiction because the two parties, Jack and Terri, both live in Illinois.

Making the same diversity argument, Salem filed another suit in a federal district court in Indiana. That court said Salem’s diversity argument was nearly impossible to follow and frivolous. The suit was dismissed and Salem was ordered to pay Pellin’s attorneys’ fees.

Salem’s argument is that federal subject matter jurisdiction exists based on the state in which the federal court sits, the appeals court said. That argument is baseless, is directly contrary to the diversity statute, and conflicts with case law interpreting that statute, it said.

Salem didn’t bring a novel legal theory, “he brought a wrong-headed enforcement action replete with standing and subject-matter jurisdiction defects,” the court said.

Judges Daniel A. Manion, David F. Hamilton, and Michael B. Brennan were on the panel.

Salem represented himself. Hinshaw & Culbertson LLP represented Pellin.

The case is Zausa v. Zausa, 2018 BL 404286, 7th Cir., No. 18-1896, 11/1/18

(Mike Frisch)