Clinite, Barbara J. v. Cherry, Leland ( 2005 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 04-3562
PAULA JOHNSON,
Plaintiff,
v.
LELAND CHERRY and
JAMES MISTER,
Defendants-Appellees.
APPEAL OF:
BARBARA J. CLINITE,
Appellant.
____________
Appeal from the United States District Court
for the Southern District of Illinois.
No. 02-1231-DRH—David R. Herndon, Judge.
____________
ARGUED MAY 4, 2005—DECIDED SEPTEMBER 6, 2005
____________
Before RIPPLE, ROVNER, and WOOD, Circuit Judges.
ROVNER, Circuit Judge. When a motion was filed on
behalf of plaintiff Paula Johnson seeking leave for John-
son’s former attorney, appellant Barbara J. Clinite, to
withdraw and for her new counsel to file his appearance,
Clinite moved to strike the motion, averring that her
signature on the motion had been forged. Following a
hearing called to investigate the forgery allegation, the
district court found that Clinite had, in fact, signed the
2 No. 04-3562
motion. Based in part on that finding, the court on its own
motion imposed monetary sanctions on Clinite. Clinite
appeals, contending that the finding is clearly erroneous.
Although we agree with Clinite that the record hints rather
strongly that she did not sign the substitution motion, we
need not resolve that question. Rather, because the court
imposed sanctions on Clinite without first notifying her that
it was contemplating that step and giving her an adequate
opportunity to respond, we vacate the sanctions order and
remand for reconsideration. The court also ordered Clinite
to turn over her case file to Johnson’s new counsel, notwith-
standing the fact that Johnson has not yet compensated
Clinite for her time and expenses nor provided security for
that obligation. Clinite contends that in this respect the
order disregarded her common-law retaining lien. We direct
the court to revisit this issue on remand as well.
I.
In this civil rights action, which remains pending in the
district court, plaintiff Johnson alleges that the two defen-
dant police officers are liable pursuant to 42 U.S.C. § 1983for arresting her without probable cause. Clinite filed the
action on Johnson’s behalf in 2002; she also represented
Johnson in two other cases in state court and she repre-
sented Johnson’s mother in another federal suit. A prelimi-
nary round of written and oral discovery in the instant case
was complete by the summer of 2004, when the events
pertinent to this appeal occurred.
Following a settlement conference in June 2004, Johnson
advised Clinite that she and her mother were engaging
a new attorney, Jeffrey Hammel, to represent them in their
two respective federal lawsuits. Clinite contacted Hammel,
who told her that he might be taking her place in both cases
but could not be sure until he met with Johnson’s mother to
verify her wishes. That meeting did not take place until
No. 04-3562 3
July. In the meantime, Johnson sent Clinite substitution of
counsel forms which, according to Clinite, she did not sign.
Clinite instead prepared her own forms and sent them
unsigned to Hammel along with an itemization of her
expenses to date. On or about July 23, Hammel left Clinite
a voicemail advising her that he would be seeking leave to
replace her as counsel for both Johnson and her mother.
Hammel also indicated that he had misplaced the substitu-
tion forms Clinite had sent him. On or about July 26,
Clinite prepared another set of substitution forms and sent
them to Hammel along with another itemization of her time
and expenses to date. Clinite avers that she did not place
her signature on those forms.
On July 27, Hammel’s office electronically filed a substi-
tution motion that bore what appeared to be
Clinite’s written signature in addition to Johnson’s;
Hammel had signed the document electronically using the
symbol “/s/” followed by his typewritten name. R. 17.1
Clinite received a copy of the motion by mail on or about
1
In the Southern District of Illinois, most documents are
now filed with the court electronically. Southern District of
Illinois, E-Filing Rule 1. “When a document has been filed
electronically, the official record is the electronic recording of the
document as stored by the court, and the filing party is bound
by the document as filed.” E-Filing Rule 3. Attorneys may
sign electronically submitted documents in one of two ways. First,
an attorney may sign the document by typing the symbol “/s/”
followed by his typewritten name, as Hammel did on the motion
to substitute. Alternatively, an attorney may affix his signature
in ink to a printed or “hard” copy of the document and then use a
scanner to create an electronic version of the signed document for
filing. Either way, the attorney’s signature is electronic in the
sense that only an electronic version of the document is filed with
the court. Pursuant to E-Filing Rule 7, an attorney who files a
document electronically automatically endorses his or her
electronic signature.
4 No. 04-3562
July 28. On that same day, the district court granted the
motion. R. 18.
On August 5, Clinite filed a motion to strike the substitu-
tion motion, averring that the signature on the motion
purporting to be hers was not genuine. Specifically, Clinite
alleged that the motion “contains a xeroxed copy of my
signature taken from another document and inserted on the
motion.” R. 19 at 3 ¶ 16.
The district court immediately granted the motion to
strike and vacated its prior order approving the substitution
of attorney Hammel for attorney Clinite. R. 20. In addition,
the court directed the person responsible for the apparent
forgery of Clinite’s signature to explain himself or herself:
The Court hereby demands an accounting from the
responsible party regarding the reason Ms. Clinite’s
unauthorized signature was used in a document filed
with this Court. If this accounting is not received on
or before August 16th, this Court will call a hearing and
sanctions, more severe than any that would be meted
out pursuant to voluntary compliance with this order,
will be forthcoming.
Id. at 1-2.
Both attorney Hammel and Johnson herself filed state-
ments in response to the court’s demand for an explanation.
Both denied having improperly inserted Clinite’s signature
into the motion to substitute. R. 21, 23.
In his response, Hammel acknowledged that he had
received a draft (unsigned) motion to substitute from
Clinite, a copy of which he attached to the response. R.23 at
2 ¶ 11 & Ex. A. He further disclosed that he also had
received motions to substitute from Johnson for both her
case and her mother’s suit, and that the motions already
contained what purported to be the signatures of Clinite,
Johnson, and her mother. Id. at 2 ¶¶ 13-15. Once Hammel
had met with Johnson’s mother, Parks, and confirmed
No. 04-3562 5
that Parks wished for him to represent her, Hammel
directed his secretary to file the motions to substitute that
he had received from Johnson. Id. at 3 ¶¶ 18-24. Hammel
attached to his response a copy of the signed substitu-
tion motion for Johnson’s suit that Johnson had delivered
to his office. Id. at 2 ¶ 14 & Ex. B. Interestingly, that
version of the motion differs in significant respects from the
version that was actually filed. We take note of two promi-
nent differences. First, although the content of the two
versions is identical, the text of the filed motion is entirely
in capital letters, see R. 17, whereas the text of the version
attached to Hammel’s response is not, R. 23 Ex. B. More-
over, on the second page of the filed version, the text of the
final sentence of the motion runs eccentrically down the
page in a narrow column to the immediate left of the
(purported) signatures of Clinite and Johnson. R. 17 at 2.
By contrast, in the version attached to Hammel’s response,
the text of the final paragraph is entirely above the signa-
tures, within margins that are consistent with the rest of
the motion. R. 23 Ex. B at 2. No explanation for the differ-
ences between the two versions is supplied in Hammel’s
response; indeed, Hammel’s response did not even acknowl-
edge that the version attached to his response was different
from the one his office filed with the court.
Johnson stated in her own response that she “ha[d] never
signed the signature of: Attorney Barbara Clinite,” R. 21 at
2, that the substitution of counsel forms had been sent to
her in East Saint Louis by mail from Chicago, Illinois, id. at
4 (from whom her statement did not make clear, but
presumably from Clinite), and that any suggestion that she
herself may have forged Clinite’s signature was
“[f]raudulent” and “unfounded,” id. at 5, 6. Johnson also
alleged that Clinite owed her the sum of $2,700 “for services
as a legal clerk.” Id. at 7. In apparent support of that
allegation, Johnson submitted a series of letters that Clinite
had written to her. R. 21 (sealed attachments); see also R.
6 No. 04-3562
25 (sealed attachments). That correspondence revealed that
Clinite, who apparently lacked the ability to file documents
electronically from her own outdated computer, occasionally
had relied on Johnson and others to electronically file
documents on her behalf. See R. 21 (sealed attachments).
In an order dated August 18, 2004, in which the dis-
trict court denied a request for recusal filed by Johnson, the
court took the opportunity to schedule a hearing regarding
the unauthorized signature of Clinite on the substitution
motion. The court noted that at that hearing, it would also
address Clinite’s use of Johnson and others to file docu-
ments electronically, which the court found “troubling.” R.
26. at 7.
In advance of that hearing, Clinite filed a document that,
in part, responded to the court’s concern about her having
used Johnson and others to file documents on her behalf.
Clinite indicated that when the Southern District of Illinois
had adopted the electronic filing system and had denied her
request for an extension of time to comply with the require-
ments of that system, she had begun to file documents
electronically by scanning paper or “hard” copies into the
system at the Clerk’s offices in Benton and East St. Louis.
Because of the distance between her office in Chicago and
the Southern District, however, Clinite had in certain
instances recruited Johnson to do this task for her. R. 27 at
1 ¶¶ 2-3. Accordingly to Clinite, most if not all of the
documents that she asked Johnson to file for her in this
manner were documents that were filed in Johnson’s own
case, her mother’s case, or a case involving a cousin of
Johnson’s. Id. ¶ 3. Clinite indicated that she never gave
Johnson a document to file that she (Clinite) had not
already signed. Id. ¶ 4. Clinite further averred that she had
never explained to Johnson how to affix a typewritten “/s/”
version of Clinite’s signature to a document, nor had she
ever instructed Johnson to affix such a signature to a
document. Id. at 1-2 ¶¶ 4-6. Clinite pointed out that the
No. 04-3562 7
signature purporting to be hers on the substitution motion
appeared to be an actual handwritten signature rather than
a typewritten signature. Id. at 6 ¶ 33.
On August 31, 2004, the district court conducted a
hearing to resolve who had affixed Clinite’s signature to the
substitution motion. Johnson and Hammel were present at
the hearing, and each of them reiterated that they had not
inserted or otherwise forged Clinite’s signature. Clinite
similarly reiterated that she had not signed the motion.
When questioned by the court, Clinite conceded that the
signature on the substitution motion looked like her own
signature, but she suggested that someone must have
photocopied her signature from another document and
inserted it into the substitution motion. R. 49 at 12-13.
Initially, the court seemed to agree that Clinite’s signa-
ture might have been copied and inserted into at least
one of the two versions of the substitution motion that
(purportedly) bore her signature (i.e, the version attached
to Hammel’s response, and the different version that
was actually filed). See R. 49 at 12 (referring to a version of
the motion “that’s obviously a cut and paste job”). Indeed,
the court appeared to suspect that it was Johnson who had
copied Clinite’s signature and affixed it to the motion. See
R. 49 at 16 (court admonishes Johnson “to tell me with a
straight face here what happened,” because “everything
looks like you’re the person that submitted these forged
signatures”).
However, after hearing from Johnson, who insisted
that she had received the motion from Clinite with Clinite’s
signature already on it, the court voiced the suspicion that
Clinite herself had, in fact, signed at least one version of
the motion that the court referred to as the “original.” R. 49
at 26. By “original,” we assume that the court was referring
to the version that Hammel had attached to his response,
rather than the version that actually was filed. “Are you
8 No. 04-3562
really serious in [your] denial?” the Court asked Clinite. R.
49 at 26. The court continued:
I mean, I’m looking at the exhibit. I don’t know how
that could have been Xeroxed from some other ex-
hibit. It certainly doesn’t look like it’s a cut and paste
job on the original motion. Certainly it is on the
other one but doesn’t look like it on the original.
Id. at 26. Clinite again insisted that she had not signed
either version, pointing out as she did so the differences
between the two versions of the motion. Id. at 28. Clinite
added that if she had signed the substitution motion and
forwarded it to Johnson, as Johnson asserted, then someone
ought to be able to produce an original with her signature
in ink. Id. (As nearly all documents are now
filed electronically in the Southern District of Illinois, the
official court file for a given case no longer contains the
original paper versions of filed documents, signed in ink, as
it did in the past. Rather, the electronic recording of each
document as stored in the court’s Electronic Case Files
system is considered to be the “official” record of
that document. Southern District of Illinois, E-Filing
Rule 3. See n.1, supra.) The court, thinking Clinite’s point to
be reasonable, asked Hammel whether a signed original
could be produced. Id. at 29. Hammel’s attorney confessed
that “[w]e do not have an original in our possession . . . .”
Id. at 30.
Faced with denials all around, the court in the end
concluded that Clinite had, in fact, signed the substitu-
tion motion. Although the court recognized that there
were two different signed versions of the motion and that no
explanation for that fact was forthcoming, the court evi-
dently believed that Clinite had signed both of them:
I quite frankly believe that the signatures are in fact
Ms. Clinite’s. Ms. Clinite, I know you said that you
didn’t sign these things. I don’t know—I’m not sure
No. 04-3562 9
what your motivation is. I wish we had an original copy
that I could . . . do the smear test on,2 but frankly I just
cannot see how that signature can be replicated. I
cannot for the life of me explain why we have two
separate motions in different fonts. There just doesn’t
seem to be any answer for that. . . .
***
I don’t find that Ms. Johnson bears any responsibility
here. These documents, I’m quite sure, were forwarded
by you, that they were signed by you, that there was no
forgery, and that your suggestion to the Court that
some hoax had been played on the Court was a false
suggestion. And I don’t know whether it was, as Ms.
Johnson suggested, motivated by some desire to delay
the proceedings. I don’t pretend to know what the
motivation was. I think the motivation, frankly, was
more likely to extract your fees and expenses to date.
But only you know that. So there will be no sanctions
[against Mr. Hammel or Ms. Johnson].
Id. at 35-37.
In the course of the hearing, the court addressed two
other matters that had arisen during the briefing on who
was responsible for placing Clinite’s signature on the
substitution motion. First, as the court had noted in its
August 18 order denying Johnson’s request for recusal, the
briefing had revealed that Clinite had relied on Johnson
to file certain documents electronically in the instant
2
A smear test is a simple but effective way of identifying the
original copy of a document signed in ink. As explained by
Hammel’s counsel at the August 31 hearing, one conducts
such a test by wetting one’s thumb or finger and rubbing it on
the signature. If the document is the original copy, the ink of
the signature will smear; if the document is a photocopy, the
signature will not smear. R. 49 at 30.
10 No. 04-3562
case as well as the cases filed by Johnson’s mother and
cousin. For that purpose, Clinite had disclosed her login
name and password to Johnson. The court indicated at
the August 31 hearing that the disclosure violated Southern
District’s E-Filing Rule 2, which in relevant part provides
that “[n]o Filing User or other person may knowingly
permit or cause to permit a Filing User’s password to be
used by anyone other than an authorized agent of the Filing
User.” R. 49 at 4, 14-16.
The briefing as to the validity and source of Clinite’s
signature had also revealed that Clinite was seeking
recompense for her accumulated fees and expenses before
she turned over Johnson’s file to Hammel. Clinite asserted
that under Illinois law, a discharged attorney has a right to
a retaining lien, and thus may hold a client’s papers, until
such time as her fees and expenses are paid or sufficient
security is provided. R. 27 at 6 ¶ 31. The court took note of
this assertion at the hearing. R. 49 at 35. The court sug-
gested that it was unethical of Clinite to refuse to turn over
Johnson’s file until she was paid, and that the cases Clinite
had cited in support of her retaining lien did not, in fact,
support her position. Id. at 35-36.
On September 1, 2004, the day after hearing, the court
issued an order sanctioning Clinite on three grounds. R. 32.
The court found first that Clinite had violated Rule 2 of the
Electronic Filing Rules of the Southern District of Illinois
by supplying her login and password to Johnson. For that
transgression, the court ordered Clinite to pay a sanction of
$500 to the District Court Clerk. R. 32 at 2. Second (and
third), the court found that Clinite had lied to the court in
two instances: Clinite had falsely represented that the
signature on the motion to withdraw was not hers, and she
had also claimed falsely in the ensuing briefing never to
have told Johnson how to sign a document with a typewrit-
ten signature (when correspondence between Clinite and
No. 04-3562 11
Johnson showed that she had). For those misrepresenta-
tions, the court sanctioned Clinite in the amount of $500,
again payable to the Court. Id. at 2-3. To partially reim-
burse Hammel for the time he had spent in responding to
Clinite’s allegations, the court also ordered Clinite to pay
him $300. Id. at 3. These sanctions came to a total of
$1,300, which Clinite was to pay within two weeks. Id.
Finally, the court directed Clinite to promptly turn over
Johnson’s file to Johnson’s new counsel or to Johnson
herself . Id. at 3-4.
Clinite timely appealed the September 1 order. R. 40.
II.
A. Sanctions
As we have noted, there were three bases for the im-
position of sanctions against Clinite: (1) Clinite’s breach
of Rule 2 of the Southern District’s E-Filing rules, by giving
her password to Johnson; (2) Clinite’s false representation
to the court that she had not instructed Johnson how to
sign documents electronically; (3) Clinite’s false representa-
tion, in her motion to strike the substitution motion, that
she did not sign the motion. Only the second and third of
these grounds are at issue in this appeal; Clinite does not
challenge the sanctions imposed for her violation of the E-
Filing rules.
We note at the outset that the district court did not
specify on what authority it was sanctioning Clinite. There
are three possibilities. First, Federal Rule of Civil Proce-
dure 11 permits a court to sanction an attorney for a
pleading or other document that (among other potential
transgressions) is presented for an improper purpose
or makes factual representations that are without rea-
sonable evidentiary support. See Fed. R. Civ. P. 11(b)(1) and
(3), (c). Second, under 28 U.S.C. § 1927, an attorney “who so
12 No. 04-3562
multiplies the proceedings in any case unreasonably and
vexatiously” may be held to account for the excess fees and
other costs resulting from her improper conduct. Finally, a
court has the inherent authority to impose sanctions for
actions taken “in bad faith, vexatiously, wantonly, or for
oppressive reasons.” Chambers v. NASCO, Inc., 501 U.S. 32,
45-46, 111 S. Ct. 2123, 2133 (1991) (internal quotation
marks and citations omitted); see also G. Heileman Brewing
Co. v. Joseph Oat Corp., 871 F.2d 648, 651-52 (7th Cir.
1989) (en banc).
Generally, we review a district court’s decision to sanction
an attorney for abuse of discretion. E.g., Kovilic Constr. Co.
v. Missbrenner, 106 F.3d 768, 771 (7th Cir. 1997). Although
this standard of review is deferential, it is not toothless. As
we have observed with respect to sanctions imposed
pursuant to Rule 11:
Rule 11 sanctions have significant impact beyond the
merits of an individual case. Concerns for the effect
on both an attorney’s reputation and for the vigor and
creativity of advocacy by other members of the bar
necessarily require that we exercise less than total
deference to the district court in its decision to im-
pose Rule 11 sanctions.
Mars Steel Corp. v. Continental Bank N.A., 880 F.2d 928,
936 (7th Cir. 1989) (en banc) (internal quotation marks and
citations omitted); see also Bilharz v. First Interstate Bank
of Wisconsin, 98 F.3d 985, 989 (7th Cir. 1996).
Clinite contends that the district court’s sanctions order
represents an abuse of discretion in two senses. First, the
sanctions order rests in part on the factual finding that
Clinite lied when she claimed not to have signed the
substitution motion. Clinite contends that this finding
was clearly erroneous. A sanctions award that rests on a
clearly erroneous assessment of the evidence amounts to an
abuse of discretion. Cooter & Gell v. Hartmarx Corp., 496
U.S. 384, 405, 110 S. Ct. 2447, 2461 (1990). Second, Clinite
No. 04-3562 13
contends that the district court failed to give her adequate
notice of its intent to sanction her for the misrepresenta-
tions it believed her to have made. “[T]he imposition of
sanctions requires that the party to be sanctioned receive
notice of the possible sanction and the opportunity to be
heard.” Larsen v. City of Beloit, 130 F.3d 1278, 1286 (7th
Cir. 1997). A district court’s decision to impose sanctions
sua sponte without adequate notice to the sanctioned party
also represents an abuse of the court’s sanctions power. See,
e.g., Johnson v. Waddell & Reed, Inc., 74 F.3d 147, 151-52
(7th Cir. 1996) (per curiam).3
After a thorough review of the record, we conclude that
the sanctions award must be vacated for the second of
the two reasons Clinite has advanced. Although the rec-
ord, in our view, lends substantial support to Clinite’s
assertion that someone photocopied her signature and
affixed it to the substitution motion, and that the dis-
trict court therefore clearly erred in finding otherwise,
we need not resolve that question. For we agree with Clinite
that the court, in deciding to impose sanctions on its own
initiative, was required to give Clinite notice of the specific
conduct for which it was contemplating sanctions and to
afford her the opportunity to show cause why sanctions
were not in order. This the court did not do. Had it done so,
the court’s findings might well have been different.
The record before us reveals rather strong clues that
Clinite did not sign the substitution motion filed with the
court. Without undertaking to discuss these clues
3
We note that in her written response to the district court’s
inquiry regarding Clinite’s signature, Johnson did ask the court to
sanction Clinite (as well as defense counsel) for conduct that
Johnson considered unlawful. R. 21 at 8. Johnson did not elabo-
rate on the grounds for her request, however. That cursory
request consequently did not serve to put Clinite on notice of
her potential liability for sanctions.
14 No. 04-3562
exhaustively, we take note of the following points.
First, it is undisputed that after learning of her client’s
wish for Hammel to take her place, Clinite prepared her
own version of the substitution motion and forwarded it
(without her signature) to Hammel. Hammel himself
acknowledged receipt of Clinite’s version and attached it to
the memorandum he filed with the court. R. 23 at 2 ¶ 11 &
Ex. A. The motion that was filed, however, differs in
substantial respects from the version that Clinite admit-
tedly prepared: the text of the filed version is different from,
and more lengthy than, the text of the version Clinite sent
to Hammel; the fonts of the two versions are markedly
different; the version that Clinite prepared is a single page,
whereas the filed motion is three pages long; and Clinite’s
version includes her name and contact information as the
preparer of the document. Compare R. 17 with R. 23 Ex. A.
Second, certain aspects of the filed version of the mo-
tion are so crude as to be almost comical. The second
page of the motion, which contains the purported handwrit-
ten signatures of Clinite and Johnson, presents a veritable
collage of fonts: (1) the text of the motion is typed in one
font; (2) under the line for her signature, Clinite’s name,
and a portion of her contact information as well as the
notation that she was the attorney for the plaintiff, appear
in a second font; (3) some of this same information (i.e.,
Clinite’s contact information and status as the plaintiff’s
counsel) has been completed in a third font which at points
runs over the information in the second font; and (4) under
the line for Johnson’s signature, Johnson’s typewritten
name appears in yet a fourth and oddly spaced font. R. 17
at 2. Moreover, as we noted earlier, the last sentence of the
text of the motion runs strangely down the left-hand side of
the page in a narrow column, as if to make room for the
No. 04-3562 15
signature block to its right. Id.4 The suggestions of tamper-
ing are so transparent in this document that even the
district court appeared to agree, until almost the end of the
August 31 hearing, that it was an obvious “cut and paste
job.” R. 49 at 26; see also id. at 12, 20.
There is, in addition, the unexplained fact that there is
yet another version of the motion, identical in text to the
filed version but without the gross abnormalities in the
fonts and the text wrapping around the signature block.
R. 23 Ex. B. This was the version that Hammel attached to
his submission. Clinite purportedly signed that version as
well, along with Johnson; and yet there is no apparent
reason why Clinite would have prepared and signed more
than one version of the same motion.5
Finally, there is the fact that Hammel, whose office
filed the substitution motion by scanning it into the elec-
tronic document management system, could not produce the
original copy of the motion that was purportedly signed in
ink by both Johnson and Clinite. The original copy likely
would have made it a relatively simple matter to confirm
that Clinite had, in fact, signed the motion and to dispel
any notion of tampering.
What seems to have taken the district court part of the
way to finding that Clinite did sign the motion was the
fact that she had a unique signature that would be diffi-
4
By “signature block,” we mean both the signature and the
typewritten identifying information below the signature line.
5
Clinite acknowledged having sent Hammel a second set of
substitution motions after he misplaced the original set; however,
she averred that she sent both sets to Hammel unsigned. See
R. 19 at 2 ¶¶ 6-7, 10-11; R. 27 at 3 ¶¶12-13, 16-17, and id. at 5
¶¶ 28-29. Hammel’s own statement, which attaches a copy of
one of the substitution forms Clinite sent to him, confirms that
Clinite did not sign that form. See R. 23 at 2 ¶ 11 & Ex. A.
16 No. 04-3562
cult for anyone to imitate convincingly. R. 49 at 30. We
readily agree with the court that the signature on the
filed motion looks quite like hers. Indeed, it is the fact that
the signature on the filed motion looks identical to Clinite’s
signature on other documents which so strongly hints of
tampering.
With the benefit of time, Clinite has identified four
documents that appear to have the identical signature block
with her signature. These include: (1) the substitution
motion filed in the instant case; (2) the different version of
the same motion that Hammel attached to his memoran-
dum; (3) a separate substitution motion filed in Parks v.
Harrison, the federal lawsuit brought by Johnson’s mother;
and (4) a proposed report and discovery plan prepared for
filing in Love v. Miller, the federal lawsuit brought by
Johnson’s cousin. What is remarkable about these docu-
ments is not only that the signature itself appears to be
identical in all four instances—one can hold the copies up
to the light and see that the match is nearly exact, with any
variations apparently due to photocopying—but that the
signature intersects with the typewritten identifying
information below the signature line in exactly the same
spots and exactly the same ways in all four cases. The signs
could not be more clear that the entire signature block was
lifted from the earliest of the documents (the proposed
discovery plan) and pasted into the various substitution
motions before they were scanned for electronic filing.
In this regard, we have the advantage of a record that
is more developed than the one before the district court
at the time it imposed sanctions on Clinite. It was only after
the court found that Clinite signed the substitution motion
and sanctioned her for claiming otherwise that Clinite was
able to assemble the documents prepared and/or filed in the
various lawsuits and back up her contention that someone
had copied and inserted her signature into the substitution
No. 04-3562 17
motion.6 To our mind, this exposes the most fundamental
problem with the sanctions order.
As we have noted, before a court may impose sanctions
sua sponte, it must give the offending party notice of its
intent to do so and the opportunity to be heard. This is true
whether the court is sanctioning a party pursuant to its
authority under Rule 11, section 1927, or its inher-
ent authority. Larsen v. City of Beloit, supra, 130 F.3d at
1286-87; see also United States v. 1948 South Martin Luther
King Drive, 270 F.3d 1102, 1115-16 (7th Cir. 2001); In re
Rimsat, Ltd., 212 F.3d 1039, 1045-46 (7th Cir. 2000).
“Providing such notice and a hearing prevents misunder-
standings between the offending party and the sanction-
ing judge, provides an orderly manner and calm forum in
which each party has had time to prepare adequately, and
certainly aids our review on appeal.” 1948 South Martin
Luther King Drive, 270 F.3d at 1116. A general notice
that the court is contemplating sanctions is insufficient;
rather, the offending party must be on notice of the
specific conduct for which she is potentially subject to
sanctions. See Rimsat, 212 F.3d at 1045-46.
The district court did not comply with the notice re-
quirement. As relevant here, the court sanctioned Clinite
for making two statements to the court that the court
believed to be false: (1) in asking the court to strike the
substitution motion, Clinite had averred that she did not
sign the substitution motion; and (2) in the follow-up
briefing as to who might be responsible for the signature
other than Clinite, Clinite had represented that she never
6
Clinite presented that proof when the district court subse-
quently ordered her to show cause why she had not yet com-
plied with the sanctions order. See R. 36, 39. Clinite did not
ask the court to reconsider the sanctions order at that time,
however, nor did the district court do so of its own initiative.
18 No. 04-3562
instructed Johnson how to indicate that a document
was being signed electronically. Prior to the August 31
hearing, the court did not warn Clinite that it was con-
sidering sanctions against her on these grounds. It was
not until the end of that hearing that the court deter-
mined that Clinite had, in fact, signed the substitution
motion. And it was not until the following day, when the
court issued its written sanctions order, that it found
Clinite was untruthful about telling Johnson how to sign a
document with a typewritten signature. Thus, Clinite was
never given the opportunity to demonstrate why she should
not be sanctioned on those particular grounds.
Of course, the court did convene the August 31 hear-
ing—which is labeled in the record as a “show cause”
hearing (R. 49 at 1)—for the purpose of ferreting out
who was responsible for the signature on the substitu-
tion motion that Clinite claimed was not hers; and the court
had issued a general warning that it would sanction the
individual who was responsible. The written memoranda
that Hammel, Johnson, and Clinite herself filed in advance
of that hearing, and the statements they made at the
hearing itself, reflect a common awareness that each of
them had some amount of explaining to do and
that sanctions were in the offing. Clinite, like the others,
was given the opportunity before and at the hearing to
recount her own version of events. This was not, then, a
case in which the court made use of its power to sanction
without any forewarning and without first hearing the
parties involved.
But the August 31 hearing was convened to determine
who was responsible for improperly affixing Clinite’s
signature to the substitution motion, and not until that
hearing was nearly at an end could Clinite reasonably have
appreciated that she herself might be subject to sanctions
No. 04-3562 19
in that regard.7 Prior to the hearing, the district court
plainly accepted as true Clinite’s representation that she
did not sign the substitution motion. The court ordered the
motion stricken and vacated its order allowing the substitu-
tion on the strength of that averment. See R. 20 at 1. It
simultaneously “demand[ed] an account from the responsi-
ble party regarding the reason Ms. Clinite’s unauthorized
signature was used in a document filed with this Court.” Id.(emphasis ours). When, after receiving written memoranda
from the parties on the subject, the court issued its order
scheduling the August 31 hearing in which it again referred
to Clinite’s signature as “unauthorized.” R. 26 at 7. In
advance of the hearing, then, Clinite had no reason to think
that the court might reverse itself and conclude that she
actually had signed the substitution motion. Nor had
Clinite reason to suspect that she might be sanctioned for
making a misstatement as to whether or not she had given
Johnson instructions as to how to sign a document by
typing Clinite’s name with the “/s/” symbol. This was a
subject that happened to come up in the parties’ memo-
randa regarding Clinite’s signature. It was not central to
that question, as the signature on the substitution motion
was (purportedly) a traditional ink signature rather than a
typewritten one. More to the point, the court gave no
indication when it convened the hearing (or at any point
prior to its sanctions order) that Clinite’s representation
was a potential basis for sanctions; the subject was not even
discussed at the August 31 hearing.
7
An argument could be made that Clinite was on notice prior
to the hearing that the court might discipline her for having
used Johnson and others to file documents electronically in
her stead. When the court set the hearing for August 31, it
noted that it would address this revelation, which it found
“troubling.” R. 26 at 7 & n.3. We need not decide whether this
statement, which did not mention the possibility of sanctions,
constituted sufficient warning, as Clinite has not appealed the
sanctions imposed for her violation of the E-Filing Rules.
20 No. 04-3562
Clinite therefore was deprived of the opportunity to
confront the court’s belief that she had engaged in
sanctionable conduct and to convince the court (or to try)
that she should not be sanctioned. The case that Clinite has
mustered on appeal demonstrates that she was prejudiced,
at least in part, by the lack of such an opportunity: once
apprised of the court’s basis for imposing sanctions, she has
been able to demonstrate that one of the principal grounds
for sanctions was based on a factual finding (that she
actually signed the substitution motion) that quite possibly
was clearly erroneous.8 Clinite presumably could have made
the same case to the district court directly by filing a motion
to reconsider the sanctions order (she did make similar
arguments in her response to the rule to show case). But
the opportunity to make her case after the court has
imposed sanctions is not an adequate substitute for an
opportunity to be heard in full before sanctions are ever
imposed. Johnson v. Waddell & Reed, Inc., supra, 74 F.3d
at 151.
We must therefore vacate the award of sanctions insofar
as it was based on the two grounds that Clinite has chal-
lenged on appeal. Respecting the district court’s role as the
finder of fact, we leave it to that court whether it still
wishes to contemplate sanctions against Clinite on these
two grounds. Any further proceedings as to potential
sanctions must, however, afford Clinite notice of the specific
bases on which the court is contemplating sanctions and an
adequate opportunity to respond.
8
By contrast, Clinite concedes that she did misstate the facts
when she averred that she had never instructed Johnson how
to sign a document with a typewritten signature. Clinite Br. 21.
She argues, however, that had she been given the opportunity
to show cause why she should not be sanctioned for that misstate-
ment, she would have explained to the court that the misstate-
ment was inadvertent rather than a deliberate lie and she would
have formally withdrawn the representation. Id. at 21-22, 23.
No. 04-3562 21
B.
In the briefing on the motion to substitute, it emerged
that Johnson had not yet paid Clinite for her accumulated
fees and expenses and that Clinite, relying on her retaining
lien over the documents in her possession, was waiting until
she was paid before she produced Johnson’s file to Hammel
as Johnson’s new attorney. R. 27 at 5-6 ¶¶ 30-31. The
district court acknowledged Clinite’s position at the August
31 hearing and suggested that it was unethical for Clinite
not to turn over the file to Hammel. R. 49 at 35-36. In the
sanctions order issued on the following day, the court
ordered Clinite “to promptly deliver her client’s file to her
new attorney, whoever that may be, or to her client, if she
proceeds pro se.” R. 32 at 3-4. The court added that “[i]n
order . . . to protect her fees and expenses, Ms. Clinite
should perfect her attorney’s lien.” Id. at 4. The court’s
reference to perfecting her “attorney’s lien” was evidently
not a reference to Clinite’s retaining lien but rather to a
distinct lien she might assert under section 1 of the Illinois
Attorney’s Lien Act, 770 ILCS 5/1. That act provides that
“[a]ttorneys at law shall have a lien upon all claims . . .
which may be placed in their hands for suit or collection . . .
for the amount of any fee which may have been agreed upon
by and between such attorneys and their clients . . . .” In
order to enforce such a lien, the statute requires the
attorney to first perfect it by serving written notice on the
party against whom her client is asserting the underly-
ing claim. Id.; see People v. Philip Morris, Inc., 759 N.E.2d
906, 911 (Ill. 2001).
Clinite challenges the district court’s order that she
produce Johnson’s file before she has been adequately
compensated for her services. Clinite contends that Illi-
nois law recognizes a retaining lien that entitles her to
retain the file until she is paid. She adds that the statutory
22 No. 04-3562
lien to which the district court referred does not adequately
protect her right to reasonable compensation. We review the
court’s order to produce the file for abuse of discretion. See
First Wisconsin Mortgage Trust v. First Wisconsin Corp.,
571 F.2d 390, 396 (7th Cir.), rev’d in part on other grounds
on reh’g, 584 F.2d 201 (7th Cir. 1978) (en banc).
Under Illinois law, when an attorney-client relationship
terminates for a reason other than professional mis-
conduct and the attorney has a claim against the client
for unpaid fees and expenses, the attorney may assert a
retaining lien in furtherance of her right to compensation.
E.g., Twin Sewer & Water, Inc. v. Midwest Bank & Trust
Co., 720 N.E.2d 636, 639-40 (Ill. App. Ct. 1999); Upgrade
Corp. v. Michigan Carton Co., 410 N.E.2d 159, 161 (Ill. App.
Ct. 1980). The retaining lien is a common-law lien that
attaches to documents or other property that come into the
attorney’s possession in the course of her professional
relationship with the client. Twin Sewer & Water, 720
N.E.2d at 640; Upgrade, 410 N.E.2d at 161. The reach of
the lien extends to the client’s file. In re Coronet Ins. Co.,
698 N.E.2d 598, 601 (Ill. App. Ct. 1998). As its name
suggests, the retaining lien permits the attorney to retain
the file in her possession until such time as the client has
either satisfied her claim for fees and expenses or supplied
security adequate to protect the attorney’s interest. In re
Browy, 527 F.2d 799, 801 (7th Cir. 1976) (per curiam)
(applying Illinois law); Twin Sewer & Water, 720 N.E.2d at
640; Upgrade, 410 N.E.2d at 161.
The retaining lien is to be distinguished from what is
known as a charging or special lien. Although a charg-
ing lien also secures an attorney’s right to compensation, it
attaches only to the proceeds that the client might recover
in pursuit of a claim for which the attorney was engaged to
represent the client. See Twin Sewer & Water, 720 N.E.2d
at 639-40; Upgrade, 410 N.E.2d at 161. This is this type of
lien that the Illinois Attorneys’ Lien Act recognizes and
No. 04-3562 23
regulates. Twin Sewer & Water, 720 N.E.2d at 639-40.
Although the charging lien has the advantage of being an
“active” lien that an attorney may take affirmative steps to
enforce against his client, see id., its utility depends on the
client succeeding on his underlying claim for relief. Conse-
quently, the charging lien is not viewed as an adequate
substitute for the retaining lien, which the attorney may
assert regardless of the success his former client achieves
on the claim. Upgrade, 410 N.E.2d at 162.
By contrast, the retaining lien is a “passive” lien that
the attorney cannot foreclose upon or otherwise use of-
fensively to wrest payment from his client. See Browy, 527
F.2d at 801; Twin Sewer & Water, 720 N.E.2d at 640;
Upgrade, 410 N.E.2d at 161. The lien, however, can be
asserted defensively when the client demands production of
her file. Browy, 527 F.2d at 801. And the possessory right
it confers effectively enables the lawyer to “hold[ ] the
client’s property hostage until fees are paid.” Twin Sewer &
Water, 720 N.E.2d at 640 (quoting Stephanie W. Kanwrit,
Attorneys’ Liens: When Can You Retain a Client’s Files? 79
Ill. Bar J. 274, 274 (1991)). The retaining lien thus gives the
attorney significant leverage in his demand for compensa-
tion.
The possessory right conferred on the attorney by the
retaining lien is not unbounded, however. Under certain
circumstances, an unpaid attorney’s right to hold on to
his former client’s documents may yield when the client or a
third party demonstrates a need for access to those docu-
ments. See Upgrade, 410 N.E.2d at 161 (“the courts have
exercised their inherent power to order an attorney to
release property in his possession in the interest of equity
and fairness”); see also, e.g., Browy, 527 F.2d at 801-02(allowing bankruptcy trustee to inspect corporate records in
attorney’s possession so that trustee could properly admin-
ister the estate); Jernryd v. Nilsson, 117 F.R.D. 416, 417-18
24 No. 04-3562
(N.D. Ill. 1987) (allowing third parties access to documents
in law firm’s possession in order to facilitate complete
discovery and equitable administration of justice); but see
Anthony v. Bitler, 911 F. Supp. 341, 343 (N.D. Ill. 1996)
(denying former client’s motion to compel production of
documents in attorney’s possession that client alleged were
necessary to support his claim in pending litigation, where
plaintiff “ha[d] not persuaded the court that the documents
are central to his claim or that the administration of justice
requires production”).
So far as the record in this case reveals, the district court
ordered Clinite to surrender Johnson’s file without consider-
ing whether, as Clinite alleged, she was owed fees and
expenses, without determining the validity of Clinite’s
retaining lien, without assessing Johnson’s need for access
to her file, and without balancing that need with Clinite’s
interest in securing her right to compensation. The record
does bespeak the court’s concern with the ethics of retaining
a former client’s file, and the court’s admonition that Clinite
perfect her attorney’s lien suggests that the court believed
her statutory lien sufficient to secure her right to compensa-
tion. For the reasons that follow, we believe the court must
give this issue further attention on remand.
As a general matter, a lawyer’s ethical duties to her client
do not preclude an attorney from invoking her retaining lien
in furtherance of her right to compensation. See Ill. Rule of
Professional Conduct 1.8(i)(1); see also American Bar
Association’s Model Rules of Professional Conduct 1.8(i)(1),
1.16(d) (2000). This is not to say that retaining liens are
beyond criticism. See John Leubsdorf, Against Lawyer
Retaining Liens, 72 Fordham L. Rev. 849 (2004) (urging
abolition of retaining lien). But the lien has been recognized
and enforced in Illinois for more than 100 years. See
Sanders v. Seelye, 21 N.E. 601, 603 (Ill. 1889).
Second, the distinct charging lien that Clinite may pursue
No. 04-3562 25
under the Illinois Attorneys’ Lien Act does not displace her
retaining lien, nor does it permit a court to disregard the
latter lien. There is no certainty that Johnson will recover
anything in this suit; only if she does would a charging lien
be of any use to Clinite. The charging lien therefore is not
an adequate substitute for the possessory right that the
retaining lien bestows on Clinite. Upgrade, 410 N.E.2d at
162.
Third, there has not yet been a showing of the kind that
would justify an order directing Clinite to surrender
possession of her file. For example, Johnson has not
established a need for access to the documents in her file,
nor has she presented evidence that she lacks the means
either to pay Clinite’s reasonable fees and expenses or
to post adequate security.9 She may well be able to make
both showings, but until she does, the district court may not
simply disregard the retaining lien Clinite has asserted.
In short, the court has not engaged in the requisite
analysis and balancing of the respective rights of Clinite
and Johnson. We leave it to the district court on remand
to accomplish that task, following an appropriate develop-
ment of the record. We note that if Johnson disputes owing
any fees or expenses to Clinite or the amount of those fees
and expenses, the district court may also determine the
amount that Clinite is owed. See Twin Sewer & Water, 720
N.E.2d at 642; Upgrade, 410 N.E.2d at 162.
III.
9
Johnson did make an abbreviated attempt to make such a
showing in a pro se filing alerting the district court to Clinite’s
non-compliance with the sanctions order. See R. 35 at 1. But so far
as the record reveals, the district court has not yet made
any determination as to Johnson’s need for access to the docu-
ments in Clinite’s possession.
26 No. 04-3562
Because the district court did not provide adequate notice
to Clinite of the grounds on which it decided to sanction her
and the opportunity to show cause why she should not be
sanctioned on those grounds, we vacate the sanctions order
in part. Because the court did not adequately consider
Clinite’s retaining lien and balance Clinite’s right to
compensation for her fees and expenses with Johnson’s
interests, we also vacate the court’s directive that Clinite
produce Johnson’s file to Johnson and/or Johnson’s new
counsel.
As we have indicated, the underlying litigation is still
pending in the district court. Circuit Rule 36 shall not apply
to the underlying litigation.
However, as to the sanctions and the possession of
Clinite’s file, Circuit Rule 36 shall apply on remand. In its
decision to sanction Clinite, the district judge made cer-
tain findings, including the finding that Clinite had lied
to the court, that necessarily depend on the judge’s assess-
ment of her credibility. Having concluded that a fresh
assessment of the evidence is in order both as to the
decision to sanction Clinite for what the district judge
believed were her deliberate misrepresentations to the court
and as to the order that Clinite surrender Johnson’s file
without compensation or security, we believe that assess-
ment must be made by a judge who has not already resolved
questions of credibility against Clinite.
The sanctions matter and the dispute over the production
of Johnson’s file shall therefore be assigned to a different
judge, and that judge shall conduct such further proceed-
ings as are consistent with this opinion.
Clinite shall bear her own costs of appeal.
VACATED AND REMANDED WITH DIRECTIONS.
No. 04-3562 27
28 No. 04-3562
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—9-6-05