Saturday, November 2, 2024

Sanction against Northwestern law prof affirmed by 10th Circuit

By Debra Cassens Weiss

A federal appeals court has affirmed a $5,000 sanction against a professor at the Northwestern University Pritzker School of Law for seeking to remove a state court motion to federal court, finding no abuse of discretion by a federal judge who imposed it.

In an Oct. 30 unpublished opinion, the 10th U.S. Circuit Court of Appeals at Denver said it discerned no reversible error by U.S. District Judge Daniel D. Domenico of the District of Colorado.

Domenico had sanctioned professor Bernard S. Black for seeking to remove the state court motion that sought to oust him as a trustee for the conservatorship estate of his sister. The sister is mentally ill and unable to manage her affairs.

Lawyers for Black’s sister filed the motion to remove him after a Colorado probate court found that Black improperly diverted some funds from his sister while serving as executor of his mother’s estate.

Domenico said the removal attempt was improper because motions can’t be removed to federal court and because the underlying probate matter couldn’t be heard in federal court.

The $5,000 sanction represented the sister’s attorney fees plus costs. A magistrate judge had found that the claimed fees were reasonable, “particularly in light of the 269 pages of briefing Mr. Black had filed in the matter,” the 10th Circuit said.

Black told the ABA Journal that he is “frankly shocked that I didn’t get a serious hearing before the 10th Circuit.”

The whole purpose of removal, he says, is to allow a party to escape from a state court judge who might be biased.

The probate judge, he says, is “running what can only be described as a racket that extracts wealth from people subjected to guardianship or conservatorship.”

Black had contended that removal was proper because his sister’s motion to oust him as conservator initiated an independent controversy, essentially constituting a new civil action.

The appeals court summarizes other arguments.

Black “contends that it was improper to impose a bar referral sanction in addition to a monetary award; that the district court failed to give him adequate notice that in considering whether to impose sanctions, the court would consider his conduct in other cases; that the district court misunderstood those other cases; that the sanctions were punitive and therefore warranted ‘criminal-type procedural protections;’ … and that it was improper to judge his conduct in cases where he acted in a different legal capacity.”

The 10th Circuit rejected the arguments “upon review of the record, the briefs, and the district court’s well-reasoned orders, and in light of the appropriate review standards.”

In the probate case, Black contended that he was carrying out his mother’s estate plan to put two-thirds of her estate into a special needs trust for Black’s sister and one-third into a trust for Black and his children. To do that, he disclaimed payable-on-death benefits in his mother’s brokerage account that sent nearly all the funds directly to the sister.

A probate judge ordered Black to reimburse his sister $1.5 million and trebled the damages, which required Black to come up with an additional $3 million.

Black told the Journal that the Colorado probate judge wrongly decided that he stole money from his sister.

“I didn’t,” Black says. “All the money is in trust. Nothing is stolen.”

In his 10th Circuit brief, Black said the dispute has led to “cascading travesties of justice.” The Denver probate court repeatedly ruled against him, “often without notice, jurisdiction or evidence,” he wrote in the brief.

Black said in the brief his sister has lived in New York since 2013, and she was found competent by a New York court in 2016. Yet the Denver probate judge refused to terminate the conservatorship.

Then the federal courts relied on the Denver probate judge’s findings, he says.

“This is another instance in which I have been truly stunned at the extent to which you get one judge who says bad things about you, and no other judge will take a serious look at the merits,” Black told the Journal. “The district court didn’t, and now, the 10th Circuit has not. That’s not the way our justice system is supposed to work.”

“We need more willingness in our system to understand that not everything a judge says is true. In another case, a second judge has to be willing to have an open mind,” he says.

Black maintains that Domenico wrongly concluded that the case shouldn’t be in federal court because of the probate exception. The exception doesn’t appy, Black says, because the Colorado court was not administering a decedent’s estate.

His appeal in state court maintains that there should be no conservatorship in Colorado because his sister no longer needs it. He has not paid $4.5 million “because I don’t have it,” he says.

What happens next?

“I wait and see if the New York bar wants to do anything with the referral” for alleged ethics violations, he says. “If they do, I defend.”

Hat tip to Law360, which covered the 10th Circuit’s decision.

Full Article & Source:
Sanction against Northwestern law prof affirmed by 10th Circuit

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