Milton I. Shadur, Senior United States District Judge.
When this multiparty declaratory judgment action brought by Chicago lawyer Merle Royce ("Royce") came to this Court's calendar via this District Court's computer-driven random assignment system, the case did not appear to pose an unduly daunting task. To be sure, it called for three determinations as to various individuals' and entities' rights to share in the $4.2 million proceeds of a mediation-produced settlement of a RICO case before this Court's colleague Honorable John J. Tharp, Jr.:
But those determinations appeared quite straightforward, for all were governed by a carefully drafted and crafted "Fee Agreement"
This Court's anticipations were soon shattered when Needle sought to assert a claim to half or more of the total pot of $4.2 million for his services alone, laying claim at various points to sums of $2 million, $2.2 million and even $2.5 million, while each of those claims was in direct conflict with the unambiguous provisions of the Fee Agreement that Needle himself had drafted. Indeed, that conflict coincided with the inherent conflict of interest that exists whenever a lawyer engages in a dispute with a client over the fees that should be paid to the lawyer where the litigation has been the subject of legal representation that has proved successful in monetary terms. In this instance Needle exacerbated that conflict by seeking to justify his claim in part through assertions that what was left over after his claimed share would leave the clients with more than was needed to make them whole.
Regrettably the pace of Needle's continuing — and continuous — intransigence and of his obstructionist tactics was not slowed after he found himself hoist by his own petard (defeated by the express terms of the Fee Agreement that he himself had authored) in his unsuccessful effort to obtain a huge financial benefit at the expense of his former clients. In conjunction with
Lest the pejorative characterizations of Needle contained in this opinion be viewed mistakenly as suggesting any judicial mindset directed toward Needle himself rather than toward the sanctionable conduct that he has exhibited in this litigation, a small sample from the proceedings before Judge Tharp that followed the mediation-produced settlement in the underlying RICO action provides some added insight into Needle. With the Settlement Agreement in that case having resulted in the delivery of the settlement proceeds to Royce as escrow agent, Needle launched a full-bore attack on Royce, his co-counsel for the plaintiffs in that case. Some notion of that attack, which produced three submissions totalling just short of 40 pages, may be gleaned from Needle's heading of his initial submission (Dkt. No. 1215) in that case:
Judge Tharp gave that effort short shrift in his memorandum order denying, for lack of subject matter jurisdiction, Needle's motion to disqualify Royce and for other relief. That order labeled Needle's charges as "salacious" and stated that Needle had inappropriately sought to embroil Judge Tharp in the lawyers' and parties' disagreements about division of the settlement proceeds that has become the gravamen of this action.
So this Court is not alone in finding that Needle's approach to litigation can be highly problematic, though the problems that he has posed here dwarf those that he presented to this Court's able colleague. But to return to the issues at hand, it is really unnecessary to detail the distortions on Needle's part that gave rise to the pending motion in this case for sanctions against him — that subject has been well-covered in Royce's extensive submissions in Dkt. Nos. 288, 387 and 422. They amply demonstrate the propriety of sanctioning Needle, under both 28 U.S.C. § 1927 and this Court's inherent power, in the full amount sought by Royce — the sum of $24,480 sought in Royce's Fee Petition.
For his part Needle's attempted response to Royce's sanction motion is entirely unpersuasive. Needle's Memorandum in Opposition (Dkt. No. 407) is in principal part (four pages out of its six plus pages of text that follow the page 1 introduction identifying Royce's sanctions motion are non-responsive to the issues posed by those, being devoted instead to a misleading rehashing of an earlier-disposed-of issue in the case. Then the remaining two pages that purport to respond to the sanctions motion itself distort the state of the record as to this Court's designation of 28 U.S.C. § 1927 as a basis for sanctions, as well as providing no input to challenge the quantification of relief tendered by Royce's counsel.
What
It is of course a universal truth that it is individual members of the bar and not their law firms that are admitted in any case to ply their wares in the litigation. Here is this District Court's LR 83.16(c), which in this Court's understanding is exemplary of the principle governing the law practice and its practitioners everywhere in this country:
In the underlying litigation before Judge Tharp, Needle quite properly practiced (and filed his written submissions) as an individual, having been granted leave to proceed pro hac vice, just as was true in this case. But in this action Needle has since sought to sow confusion by injecting a meaningless differentiation between his individual persona and that of "Michael R. Needle P.C." the entity of which (as stated earlier) he is the sole member and owner.
From that warped approach Needle appears to believe that, and he styles his presentations as though, a termination of his own pro hac vice status somehow enables his professional corporation to have — still — some amorphous standing in the case. Not so — with Needle's pro hac vice status having been rescinded on separate occasions for more than one reason, that rescission contemporaneously deprived his wholly owned corporation of any standing independently of Needle himself.
In that regard this Court has been confronted by extended delays by Needle in obtaining outside counsel for Michael R. Needle P.C. (meaning, in real world terms, for Needle individually), and those months of delay on Needle's part have stymied this Court's and the other litigants' efforts to move the case forward. But that subject, though it bears mention as otherwise relevant to the case overall, is not covered by the limited sanctions dealt with here.
To return to the latter subject, this Court finds that the egregiousness of Needle's conduct is addressed inadequately by simply requiring, as this Court does, his payment of the requested amount of $24,480 to Royce in partial recompense for the services rendered by his counsel. This Court finds instead that a further sanction is in order to deal with the burdens thrust on the judicial system by Needle's conduct, and it therefore orders that a like sum — again $24,480 — be paid by Needle to the Clerk of Court for that reason.
Finally, although this opinion has resolved the sanctions issue posed by Royce's submissions identified here, it may well remain for another day whether other aspects of this case — either past or future or both — may bring that subject into play again. If that were to come about, the subject would deserve — and get — separate treatment.