In Re Peters

09-90098-am
In re Kristan Peters

_

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT
August Term, 2010

(Decided: April 25, 2011)

Docket No. 09-90098-am

_____________________________________

In re Kristan Peters,

Attorney.

_____________________________________

For Kristan Peters: Steven D. Ecker, Cowdery, Ecker, &
Murphy, L.L.C., Hartford, CT.

Before: Cabranes, Sack, and Wesley, Circuit Judges.

PER CURIAM:

Kristan Peters, an attorney admitted to the bars of both New

York and Connecticut,1 and formerly a partner at the law firm of

Dorsey & Whitney, appeals from an order of the Committee on

Grievances for the United States District Court for the Southern

1
Peters is registered in New York as “Kristan Peters”
and in Connecticut as “Kristan Peters-Hamlin.”
District of New York (the “Grievance Committee”) suspending her from

practicing before that court for a period of seven years. The

Grievance Committee found that she had engaged in the following

misconduct:

(1) instructing a junior attorney, Jordan Brackett, to deface

transcripts in order to render them, under the guise of the

attorney work-product privilege, unreturnable to the district

court (“the Brackett allegation”); and

(2) violating a confidentiality order issued by the district

court by filing, in a Massachusetts action, transcript excerpts

encompassed by that order(“the Confidentiality Order

allegation”).2

See In re Peters, 543 F. Supp. 2d 326, 331-34 (S.D.N.Y. 2008)

(interim suspension order); In re Peters, M-2-238, doc. 125 at 3-4

(S.D.N.Y. Jun. 5, 2009)(disbarment order, based on the findings and

reasoning of the interim suspension order); In re Peters, M-2-238,

doc. 192 at 5 (S.D.N.Y. Aug. 6, 2009)(order reducing penalty from

disbarment to seven-year suspension, based on mitigating factors).

2
In the Grievance Committee’s January 2008 order
directing Peters to show cause why she should not be
disciplined, she also was charged with “participat[ing] in a
conference with the [district court] to adjourn a TRO hearing
and discuss future depositions at a time when [Peters] knew
that those depositions and the TRO hearing would not take
place,” and “cop[ying] transcripts and order[ing] additional
copies of transcripts in intentional disregard of court
orders.” In re Peters, M-2-238, doc. 51 at 2 (SPA4) (S.D.N.Y.
Jan. 30, 2008). However, since Peters’s suspension was not
based on those charges, they are not addressed here.

2
The Grievance Committee concluded that Peters’s misconduct had

violated: New York Disciplinary Rule (“DR”) 1-102(a)(5), which

prohibited conduct prejudicial to the administration of justice; DR

1-102(A)(4), which prohibited a lawyer from engaging in conduct

involving dishonesty, fraud, deceit, or misrepresentation; and DR

7-106(A), which prohibited a lawyer from disregarding, or advising

a client to disregard, a ruling of a tribunal made in the course of

a proceeding.3 See Peters, 543 F. Supp. 2d at 334-35; Peters, M-2-

238, doc. 125 at 4.

In her brief, Peters argues, inter alia, that the Grievance

Committee’s failure to hold an independent hearing, and its reliance

on a prior sanctions hearing conducted by Judge Baer in the

underlying litigation, violated her due process rights and the

district court’s local rules. She also argues that the two charges

of misconduct now at issue do not, as a matter of law, support the

Grievance Committee’s imposition of discipline. Although this Court

already has affirmed the underlying sanctions order entered by Judge

Baer to the extent he reprimanded Peters, the two charges upon which

the Grievance Committee’s suspension is based were not addressed in

that prior appeal, since this Court limited its review of Judge

Baer’s order to three other charges. See Wolters Kluwer Fin.

3
Effective April 1, 2009, the New York Disciplinary
Rules were replaced with the New York Rules of
Professional Conduct (“RPC”). The text of DR 1-102(a)(5),
DR 1-102(A)(4), and DR 7-106(A) can now be found in,
respectively, RPC 8.4(d), RPC 8.4(c), and RPC 3.4(c).

3
Servs., Inc. v. Scivantage, 564 F.3d 110, 118-19 (2d Cir. 2009),

affirming, in part, 525 F. Supp. 2d 448 (S.D.N.Y. 2007) (Judge

Baer’s sanctions decision). Except as discussed below, we assume

the parties’ familiarity with the underlying facts and procedural

history of this case.

This Court’s review of an original disciplinary order entered

by a district court is governed by the abuse of discretion standard,

although the issue of whether a disciplinary rule prohibits the

conduct in question is reviewed de novo. See In re Edelstein, 214

F.3d 127, 130-31 (2d Cir. 2000). A district court has abused its

discretion if its imposition of sanctions was based on “an erroneous

view of the law or on a clearly erroneous assessment of the

evidence,” or “cannot be located within the range of permissible

decisions.” Wolters Kluwer, 564 F.3d at 113 (internal quotation

marks omitted). However, “when the district court is accuser, fact

finder and sentencing judge all in one,” as was essentially the case

here, this Court’s review is “more exacting than under the ordinary

abuse-of-discretion standard.”4 Id. at 113-14 (internal quotation

marks omitted). Thus, even under the deferential abuse-of-

discretion standard of review, this Court must be careful to “ensure

that any [decision to impose sanctions] is made with restraint and

4
Although we are not reviewing Judge Baer’s reprimand
decision, we nonetheless apply the “more exacting” abuse of
discretion standard since the Grievance Committee relied on
Judge Baer’s sanctions proceeding and adopted his findings.

4
discretion.” Schlaifer Nance & Co. v. Estate of Warhol, 194 F.3d

323, 334 (2d Cir. 1999).

Because an attorney disciplinary proceeding is quasi-criminal

in nature, the Due Process Clause entitles the charged attorney to,

inter alia, adequate advance notice of the charges, and the

opportunity to effectively respond to the charges and confront and

cross-examine witnesses. See In re Ruffalo, 390 U.S. 544, 550-51

(1968); Erdmann v. Stevens, 458 F.2d 1205, 1209 (2d Cir. 1972) (“[A]

court’s disciplinary proceeding against a member of its bar is

comparable to a criminal rather than to a civil proceeding.”).

In examining the Grievance Committee’s decision not to hold a

full evidentiary hearing, this Court “consider[s] the private

interest affected by the action of the [Grievance Committee] in

following [Judge Baer’s sanctions decision] without [holding] an

[independent] evidentiary hearing, the risk of erroneous deprivation

of that private interest, and the [Grievance Committee’s] interest

in foregoing an evidentiary hearing.” In re Jacobs, 44 F.3d 84, 90

(2d Cir. 1994) (citing Mathews v. Eldridge, 424 U.S. 319, 335

(1976)). This Court has held that a district court grievance

committee’s decision not to hold a full evidentiary hearing did not

violate the charged attorney’s due process rights when the risk of

erroneous deprivation of the attorney’s interest in practicing

before the district court was “extremely low,” and there was an

“important public interest in not expending judicial resources on a

5
proceeding that would largely duplicate a prior . . . proceeding,”

given that the attorney “had made no showing that such a hearing

would reveal an infirmity of proof or lack of due process in the

[prior] proceeding or risk of grave injustice from suspending [the

attorney] on the basis of [a prior] order.” Id. at 90-91 (holding

that a district court grievance committee’s reliance on a state

court’s findings, without holding an independent hearing, did not

violate the attorney’s due process rights).

With respect to the Brackett allegation, an independent

evidentiary hearing would not have been duplicative of Judge Baer’s

sanctions proceeding since, in that prior proceeding, Peters was not

provided adequate prior notice of that allegation or adequate

opportunity to respond and to cross-examine adverse witnesses. With

respect to the Confidentiality Order allegation, although Peters had

adequate notice and opportunity to respond to the allegation during

the prior proceeding, the evidence concerning the allegation was not

adequately developed during that prior proceeding so as to permit

the Grievance Committee to forego an independent evidentiary hearing

in the present matter. We therefore vacate the Grievance

Committee’s suspension order and remand the matter for the Committee

to hold further proceedings consistent with our decision.

I. Brackett Allegation

A. Collateral Estoppel, Res Judicata, and Law of the Case

First, this Court never reviewed the particular charges on

6
which the Committee based its discipline. Instead, in the appeal

from Judge Baer’s sanction order, this Court stated that it “need

only review a sampling of Peters’s conduct to affirm the district

court’s imposition of sanctions,” and then discussed three charges

not now at issue. Wolters Kluwer, 564 F.3d at 116, 118-19. The

Court then concluded as follows:

Having reviewed these three instances, we see no need
to consider the other sanctions for which the district
court issued reprimands. No likely argument has been
advanced as to why the other nineteen sanctions are
defective, and because the sanctions are all non-monetary,
the subtraction of one or another from the whole course of
conduct would not alter the nature or tenor of the
district court's rulings.

Id. at 119. Although the Court saw no “likely argument” concerning

the sanctioned conduct presently at issue, the Court nonetheless

made clear that appellate review had been limited to the sampling of

conduct explicitly discussed in the opinion. We therefore disagree

with the Grievance Committee’s statements that “Judge Baer’s

conclusions regarding the incident involving Mr. Brackett . . . have

been affirmed by the Second Circuit,” In re Peters, M-2-238, doc.

193 at 5, and that “[t]he Second Circuit affirmed all of the

sanctions on Ms. Peters,” id. at 7. Thus, the Committee was

incorrect to rely on such preclusion doctrines as collateral

estoppel and res judicata in finding that it need not hold its own

hearing. See Niagara Mohawk Power Corp. v. Tonawanda Band of Seneca

Indians, 94 F.3d 747, 754 (2d Cir. 1996) (“It is a well-established

principle of federal law that if an appellate court considers only

7
one of a lower court’s alternative bases for its holding, affirming

the judgment without reaching the alternative bases, only the basis

that is actually considered can have any preclusive effect in

subsequent litigation.”); Gelb v. Royal Globe Ins. Co., 798 F.2d 38,

45 (2d Cir. 1986) (“[I]f an appeal is taken and the appellate court

affirms on one ground and disregards the other, there is no

collateral estoppel as to the unreviewed ground.”); Restatement

(Second) of Judgments § 27 cmt. o (1982).

The Committee also relied on the law of the case doctrine in

finding that it need not hold its own hearing. The law of the case

doctrine, although not binding, “counsels a court against revisiting

its prior rulings in subsequent stages of the same case absent

‘cogent’ and ‘compelling’ reasons,” including, inter alia, “the need

to correct a clear error or prevent manifest injustice.” Ali v.

Mukasey, 529 F.3d 478, 490 (2d Cir. 2008) (quoting United States v.

Tenzer, 213 F.3d 34, 39 (2d Cir. 2000)). We need not address

whether the present matter is the “same case” as Judge Baer’s

sanctions proceeding because, even assuming arguendo that the

doctrine could apply, the present issues are sufficiently compelling

to warrant revisiting the Brackett allegation. See id.

B. Notice and Opportunity to Respond

Second, this Court’s due process analysis in Wolters Kluwer is

of limited aid in the present appeal because the notice Peters

received in Judge Baer’s sanctions proceeding concerning the Brackett

8
allegation, and her opportunity to respond, differed significantly

from the notice and opportunity to respond she had concerning the

three charges discussed in this Court’s Wolters Kluwer decision. As

an initial matter, the Brackett allegation was not included in the

defendants’ sanctions motion, see Peters’s App. (“App.”) at A68-A100,

although Judge Baer noted in his sanctions order that he had

“specifically reiterated at the beginning of the hearings that the

[district court] was only considering the same issues raised by [the]

sanctions motion,” Wolters Kluwer, 525 F. Supp. 2d at 452 n.8; see

also App. at A287 (Letter from Judge Baer, copied to all attorneys,

concerning sanctions hearing) (“The scope of the hearing will

encompass the relief requested by Defendants in their motion for

contempt, sanctions, and fees.”)), A374 (similar statement by Judge

Baer at beginning of the hearing). While that description of the

scope of the sanctions hearing may not be controlling, since an

attorney may receive adequate notice of a misconduct charge by means

other than a sanctions motion served prior to the sanctions hearing,

see Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314

(1950) (explaining that due process requires only notice “of such

nature as reasonably to convey the required information”), it does

not appear, on the present record, that Peters received adequate

notice of, and opportunity to respond to, the Brackett charge by any

9
means.5

The sanctions motion charged Peters with, inter alia, failing

to deliver all deposition transcripts to the district court, in

violation of Judge Baer’s protective order, which required her firm

to deliver all of the transcripts to him. See App. at A73, A82-85.

Although the Brackett allegation was related to Peters’s alleged

intention to retain transcripts in violation of Judge Baer’s order,

the sanctions motion contained nothing that would suggest to a

reasonable person that the Brackett allegation might be a basis for

sanctions. There is a simple explanation for this: the sanctions

motion was signed and served on April 24, 2007, see id. at A100;

S.D.N.Y. Docket 07-cv-2352, Doc. 124, item 200 at 143 (Cert. of

Service),6 while the Brackett allegation concerned an event that

occurred on April 26, 2007, see App. at A714-15 (Brackett Decl.).

5
At the beginning of the hearing, Judge Baer stated:

Any sanctions or contempt imposed, should that come to
pass, will be based solely on the conduct of this matter,
although I might add that knowledge by [the] plaintiff[]
of any prior improprieties of Ms. Peters at the time it
engaged her and initiated this lawsuit may be pertinent.

App. at A374. Although this statement arguably warned Peters
that additional charges were possible, it did not constitute
notice of the Brackett allegation.
6
A number of sealed documents that are part of the
district court record for the Wolters Kluwer action were
placed on a single disc that was filed as document 124. In
the present decision, a citation to “Doc. 124, item x” refers
to the document numbered “x” on the disc filed as document
124.

10
 The Brackett allegation did not surface during the sanctions

proceeding until September 4, 2007, the third day of the five days

of hearings before Judge Baer, when a witness testified that he had

been told that Peters had directed Brackett to write “attorney notes”

on clean copies of deposition transcripts. See id. at A657-59.

However, the focus at that point remained whether the law firm or

Peters had possessed transcripts that previously should have been

delivered to the court. See generally id. at A655-72. In fact,

Peters’s cross-examination of that witness barely touched on his

mention of the Brackett allegation — in that regard, Peters simply

asked if the witness had himself heard the conversation between

Brackett and Peters, and whether the witness had participated in the

decision not to call Brackett as a witness in the sanctions hearing,

at which point Judge Baer stated, “We can fix that.” Id. at A670.

At that time, it appears that the Brackett allegation was regarded

as evidence relevant to whether Peters intended to deliver all of

the transcripts covered by the protective order to the district

court, and not as a separate charge of misconduct.

By letter dated September 5, 2007, Judge Baer requested Brackett

to submit a declaration regarding his involvement in the litigation,

“particularly regarding his involvement in activities relating to the

allegations that he [had been] directed to alter transcripts provided

to [the district court].” Doc. 124, item 409. Judge Baer also

stated that, after reviewing Brackett’s declaration, he would decide

11
if Brackett would be called as a witness. Id. The declaration

itself is dated September 9, 2007, see App. at A716; it was emailed

to Judge Baer’s law clerk and Peters’s attorney, among others, on

September 10, 2007, see Doc. 124, item 413; and both Peters and her

attorney acknowledged receipt of the declaration on that day, see id.

at items 414, 416; App. at A719, A767.

Upon Peters’s receipt of the Brackett declaration, one arguably

might conclude that she was then on notice that the transcript

defacement allegation constituted a disciplinary charge that could

subject her to sanctions. However, Judge Baer did not explicitly

characterize it as such, and other attorneys intimately involved in

the proceedings apparently still did not recognize it as a charge.

After Peters responded to Brackett’s declaration by requesting an

opportunity to cross-examine Brackett and several other persons, see

Doc. 124, item 414, an opposing attorney objected to Peters’s “last-

ditch and blatant effort to protract [the] proceedings,” and listed

the six issues that the attorney believed were before the district

court, a list which did not include the Brackett allegation, see id.

at item 420. Despite these ambiguities, for purposes of this

decision, we assume that Peters had notice of the Brackett charge as

of September 10, 2007, but find that, for the reasons that follow,

she nonetheless did not have adequate time to respond to that charge.

It is not clear how much time Peters had, after receipt of the

Brackett declaration on September 10, to prepare for her cross-

12
examination of Brackett on September 12. While Peters may have had

some preparation time on September 10, she and her counsel were

occupied for substantial portions of the next two days by the hearing

itself: on September 11, the hearing ran from approximately 10:35

a.m. to approximately 8:00 p.m., see App. at A718, A796, and, on

September 12, it began at 9:30 a.m., see id. at A804. Additionally,

any preparation time Peters may have had on September 10 and 11 also

had to cover four witnesses other than Brackett who were to testify

on September 11 and 12, and Peters’s own testimony on September 11.

Peters also may have spent some of her available time preparing for

several other possible witnesses who ultimately did not testify. See

id. at A638 (Peters requesting testimony of three attorneys), A719

(plaintiff’s counsel noting possible need to call three defendants),

A827 (Peters requesting testimony of five witnesses). However, even

if we assume that Peters had to prepare only for four potentially

adverse witnesses, and not for her own testimony, those four

witnesses were relevant to a number of the charges in the sanctions

motion, and not simply the Brackett allegation.

Furthermore, Judge Baer informed the attorneys on September 11

that the September 12 hearing would run from 9:30 a.m. to 11:00 a.m.,

see id. at A801, with Brackett taking “no more than 15 or 20

minutes,” id. at A775, clearly requiring Peters to prioritize her

preparation time, presumably giving greater priority to the witnesses

and allegations directly relevant to the known charges. But, as

13
discussed above, it is not clear when the Brackett allegation became

a known “charge” — one that independently exposed her to possible

sanction in that proceeding — or, if it was a known charge by

September 10, a charge important enough to warrant reallocating

scarce resources and time away from the issues that, up to that

point, had been treated as the central issues.

Since the Brackett allegation was, at the very least, an

important basis for the seven-year suspension, we assume that Peters

would have cross-examined him on it if she had had unlimited time for

cross-examination. See id. at A732 (Peters requesting another

witness to provide the “exact words” used by Brackett “for

impeachment purposes”), A887 (Mem. of Law in Supp. of Mot. to Compel

Discovery (filed Sept. 24, 2007) (objecting to, inter alia, the

“truncated opportunity for cross examination” of witnesses “such as

Jordan Brackett who have brought what [Judge Baer] has indicated [he]

deems the most serious allegations against Peters”)). Of course, no

lawyer is permitted unlimited cross-examination; rather, “[t]he scope

and extent of cross-examination are generally within the sound

discretion of the trial court, and the decision to restrict cross-

examination will not be reversed absent an abuse of discretion.”

United States v. Rosa, 11 F.3d 315, 335 (2d Cir. 1993); see also

United States v. Elfgeeh, 515 F.3d 100, 125 (2d Cir. 2008). Although

the trial court may, under proper circumstances, impose a time limit

on cross-examination, see United States v. Casamento, 887 F.2d 1141,

14
1173 (2d Cir. 1989) (upholding time limit when defense counsel had

adequate time to elicit evidence of witness’s motive for testifying

falsely and counsel had not identified other areas of inquiry they

wished to pursue), such limits should be imposed with caution, cf.

United States v. Vest, 116 F.3d 1179, 1187 (7th Cir. 1997)(stating

that a trial judge’s “rigid adherence to time limitations” would

prevent the judge from making the necessary “particularized judgment”

as to the proper length of cross-examination).

Here, we are not directly reviewing Judge Baer’s decision to

limit Peters’s cross-examination of Brackett; instead, we are

reviewing the Grievance Committee’s reliance on the procedures

employed by Judge Baer, which included that limitation. That

distinction may be highly relevant here since Judge Baer only imposed

a reprimand, and specifically declined to suspend Peters, finding it

more appropriate to refer Peters to the Grievance Committee “because

of the procedural protections inherent to that process.” Wolters

Kluwer, 525 F. Supp. 2d at 550. It is not known which specific

“procedural protections” Judge Baer had in mind; however, that

statement suggests that the very judge who conducted the hearing did

not believe that the procedures employed were necessarily sufficient

for purposes of a suspension.

During the September 12, 2007 hearing, Judge Baer stated that

Peters would have fifteen minutes to cross-examine Brackett, see App.

at A814, and then kept a close eye on the clock, announcing when only

15
five minutes remained, id. at A822, and when only two minutes

remained, id. at A823, and stopping Peters mid-question,7 id. The

transcript defacement issue, which was not covered by Peters’s cross-

examination, was first mentioned during opposing counsel’s redirect

examination of Brackett, with Judge Baer asking the only question

relevant to the present proceeding — soliciting from Brackett that

he did not believe that Peters’s statement that he should scribble

on the transcripts was said in jest. Id. at A824. After that, Judge

Baer immediately excused Brackett from the stand. Id.

Under these circumstances, we do not agree that Peters “‘chose

not to directly cross-examine Brackett about the [defacement

allegation].’” In re Peters, 543 F. Supp. 2d at 332 (quoting Wolters

Kluwer, 525 F. Supp. 2d at 521 n.277). Instead, the record strongly

suggests that Peters simply ran out of time as a result of the strict

time limit imposed by Judge Baer. Furthermore, although the

Grievance Committee noted that the Brackett cross-examination

“spann[ed] 19 pages of the transcript” and that one of Peters’s

lawyers was present, id., neither of those facts suggests that Peters

7
Peters’s questioning of other witnesses was similarly
truncated. See, e.g., App. at A813 (Peters: Your Honor, I
must tell the Court that I have some critical questions
[remaining for Mr. Herman].” Judge Baer: “Well you should have
gotten them out ... in the time table that I ... have
prescribed”), A818 (stating, that Peters, in questioning Eric
Epstein, had “had [her] 10 minutes”). Further, at the
termination of the sanctions hearing, Peters was denied the
opportunity to call two additional witnesses who, she stated,
could attest that she had not opposed returning transcripts to
the district court. See id. at A827.

16
had adequate time to question Brackett on the defacement issue, given

that his declaration covered a number of topics relevant to several

of the misconduct charges.

Additionally, the limited advance notice of the Brackett

allegation severely restricted Peters’s ability to investigate and

obtain impeachment evidence relevant to that charge, beyond the

evidence and witnesses already scheduled for presentation to Judge

Baer. We do not, however, comment on whether Peters was prejudiced

by that particular limitation, which may be mooted in whole or part

by the further proceedings to be held by the Grievance Committee.

In light of the “more exacting” standard that applies to this

matter, Wolters Kluwer, 564 F.3d at 113-14 (quoting Perez, 347 F.3d

at 423), we conclude that Peters was denied due process with respect

to the Brackett allegation and vacate the Grievance Committee’s

suspension order to the extent it was based on that allegation.

However, the Grievance Committee is free, on remand, to hold further

proceedings concerning that charge, providing Peters with sufficient

opportunity to respond and cross-examine adverse witnesses. In those

further proceedings, the Grievance Committee should decide, in the

first instance, what evidence Peters should be permitted to present

in her defense, and, if the Grievance Committee declines to consider

particular proffered evidence, it should provide detailed findings

in support of that decision. For example, regarding the Committee’s

finding that Peters had unreasonably delayed in presenting certain

17
evidence from Peters’s former secretary, see In re Peters, M-2-238,

doc. 193 at 6 (SPA-45) (S.D.N.Y. Aug. 6, 2009), it is not clear to

us what prior opportunity Peters had to present that evidence, or how

it substantially altered her position. However, since the scope of

any new proceedings will be decided by the Grievance Committee, any

further discussion of potential evidence would be speculative.

We also decline to consider, at this juncture, whether Peters’s

suspension may be based on a conclusion that Peters’s statements to

Brackett evidenced, at a minimum, a “reckless disregard of the

prohibitions of the New York Disciplinary Code.” In re Peters, 543

F. Supp. 2d at 332; see Peters’s Br. at 72-77. If that issue remains

relevant on remand, Peters should present her argument on that point

to the Grievance Committee for its consideration in the first

instance.

II. Confidentiality Order Allegation

A. Notice of Charge

We reject Peters’s argument that she had inadequate notice of

the Confidentiality Order allegation prior to Judge Baer’s hearing.8

See Peters’s Br. at 55-57. First, Peters’s argument that this

allegation was not “included in any way, shape or form in the

Sanctions Motion,” id. at 55, is incorrect. Although the defendants

8
The confidentiality order is entitled “Confidentiality
Stipulation and Protective Order,” see App. at A43, but is
usually referred to in the record as either the
“confidentiality order” or the “protective order.” In this
decision, we refer to it as the “Confidentiality Order.”

18
did not, in a separate count, charge Peters with violating the

Confidentiality Order, that allegation was made in several sections

of the motion:

(1) as part of the charge that Peters had improperly
refused to return discovery and had attempted to use
discovery from the New York action in the Massachusetts
action, see App. at A84 (“The unmistakable inference from
plaintiff’s conduct is that it intends to use the
discovery it tricked the [defendants] into providing in
this matter in the Massachusetts Action or otherwise, for
its own improper benefit. . . . Now that the New York
action has concluded, the only reason for [plaintiff’s
counsel’s request for leave to share transcripts with its
client] is to misappropriate defendants’ information,
either in the Massachusetts Action or for plaintiff’s
anti-competitive business purposes. Meanwhile, the
Complaint in the Massachusetts Action . . . clearly
utilizes information gleaned from the depositions in this
case, in further violation of the Confidentiality Order
issued in this case.” (emphasis in original)), A82-83
(stating that, after the plaintiff argued that “plaintiff
needed to retain a copy of the [discovery] documents for
the Massachusetts Action,” the district court “indicated
that the plaintiff would have to take discovery anew in
any such action and ordered plaintiff to return all
discovery to the Court. . . . This directive also was
consistent with the Confidentiality Order issued in the
case, which unambiguously prohibited the use of material
marked CONFIDENTIAL or HIGHLY CONFIDENTIAL in connection
with any other proceeding.” (citations omitted));

(2) as part of the request that the district court bar the
use in any other action of any materials covered by the
Confidentiality Order, see id. at A95 (“Plaintiff and its
counsel breached the [Confidentiality] Order’s express
prohibition on using discovery information in other cases
by utilizing information gleaned from Attorneys’ Eyes Only
depositions in the Massachusetts Complaint and necessarily
sharing it with their Massachusetts counsel. The Court
should thus enforce the [Confidentiality] Order and bar
plaintiff, its affiliates, its employees, and its counsel,
from using discovery from this case in the Massachusetts
Action.”);

(3) as part of the request that plaintiff’s counsel be

19
 disqualified from prosecuting the Massachusetts action,
see id. at A96 (“Pursuant to the [Confidentiality] Order
. . ., the parties were required to treat confidential
information or information exchanged on an ‘Attorneys Eyes
Only’ basis as ‘Protected Material,’ as defined therein.
As such, this material was ordered ‘not to be used ... in
any other litigation proceeding.’ [Confidentiality] Order
¶ 7(a) at 11. Despite this [Confidentiality] Order,
plaintiff’s counsel has already shown its willingness to
use such information in the Massachusetts Action.”); and

(4) as part of their argument that the plaintiff should be
held in civil contempt, see id. at A99 (stating that
plaintiff’s Massachusetts complaint “utiliz[ed]
information obtained in discovery in this action
designated as ‘Attorneys’ Eyes Only,’ despite this Court’s
[Confidentiality] Order on April 12, 2007, which provides,
inter alia, that material so designated ‘shall not be used
...in any other litigation proceeding.’ Protective Order
¶ 7(a) at 11.” ).

Through the above-noted portions of the defendants’ sanction

motion, a reasonable person would have been on notice that the

Confidentiality Order allegation, if proved, could lead to

sanctions. See Mullane, 339 U.S. at 314; In re Jacobs, 44 F.3d at

90. Peters herself appears to have reached that very conclusion as

of May 24, 2007, when she signed an affidavit and a memorandum of law

in support of her firm’s opposition to the sanctions motion. See

App. at A122-64 (Mem. of Law), A165-237 (Peters Aff.). In that

affidavit and memorandum, Peters explicitly treated the

Confidentiality Order allegation as an asserted ground for sanctions.

Id. at A155-64, A232-37. The relevant portion of the memorandum

begins as follows:

Defendants contend that sanctions are warranted in this
case due to Plaintiff’s use of the deposition transcripts
from the New York Action, which Defendants had designated

20
 as “Attorneys’ Eyes Only,” in motion papers filed under
seal in the Massachusetts Action. Defendants assert that
this use of the transcripts constituted a violation of the
Confidentiality Order warranting sanctions. Dorsey
strenuously opposes this grounds [sic] for sanctions.

Id. at A155.

In her brief, Peters argues that “the Sanctions Motion could not

have included the Confidentiality Order Allegation, because the

transcript excerpts were filed in Massachusetts after the Sanctions

Motion was delivered to Dorsey’s offices on April 24, 2007.”

Peters’s Br. at 55 (emphasis in original). However, the allegations

in the sanctions motion concerning violation of the Confidentiality

Order were broad enough to encompass both violations that had already

occurred and violations that were anticipated. See App. at A84 (“The

unmistakable inference from plaintiff’s conduct is that it intends

to use the discovery . . . in the Massachusetts Action or

otherwise[.]”). In any event, a reasonable person could not read the

defendants’ request for sanctions based on the prior filings in

Massachusetts violating the Confidentiality Order without realizing

that similar subsequent filings in Massachusetts would likely also

be at issue. Additionally, a defense against sanctions for the post-

April 24 filings in Massachusetts did not require different

preparation than a defense against sanctions for the pre-April 24

filings — the primary issue was not whether particular filings were

improper, but whether the Massachusetts action was the same action

as the New York action for purposes of the Confidentiality Order.

21
 Peters also received adequate advance notice of the charge

through the district court’s May 2007 order, in which the district

court made clear that the Confidentiality Order allegation

constituted a ground for sanctions that would be considered during

the sanctions proceeding. See Wolters Kluwer Fin. Servs., Inc. v.

Scivantage, 07-cv-2352, 2007 WL 1498114, at *9 (S.D.N.Y. May 23,

2007)(“Plaintiff’s counsel also suggested that following Plaintiff’s

voluntary dismissal, this Court’s repeated orders to return discovery

forthwith concomitantly modified the [Confidentiality] Order and

granted her the ability to use transcripts of these ‘attorneys’ eyes

only’ depositions in the Massachusetts action. Such a contention

strains credulity. I will address Plaintiff’s actions, however, in

a future opinion regarding Defendants’ motion for contempt and

sanctions, once such motion is fully briefed. . . . I will decline,

at this time, to direct Plaintiff to redact from its filings in the

Massachusetts action the ‘attorneys’ eyes only’ transcripts of

depositions taken in this action. . . . I will reserve decision on

that sanction, as well as the more serious sanctions, including

contempt, requested by Defendants. . . . These sanctions, as well

as the branch of Defendant’s motion that seeks disqualification of

Plaintiff’s counsel from the Massachusetts action, will abide the

fully briefed motion and any hearings that are warranted.” (internal

citations and footnote omitted)).

Thus, Peters had ample notice of this charge prior to the

22
commencement of Judge Baer’s sanctions proceeding.

B. The Confidentiality Order Was Violated

Although we do not find the Confidentiality Order to be, in all

relevant respects, “crystal clear,” In re Peters, 543 F. Supp. 2d at

333, we conclude that it barred the use, in the Massachusetts action,

of New York discovery materials covered by the order.

The Confidentiality Order states, in various provisions, that

it governs the handling of confidential documents in “this action”

(used at least nineteen times), “the action” (used once), “this

lawsuit” (used twice), “the above-entitled litigation” (used thrice),

“this litigation” (used once), “the litigation” (used once), and

“this case” (used once).9 App. at A43-47 (Confidentiality Order).

The order also references “these actions” and “each action,” id. at

A53, A57, which appear to be errors and, in any event, are not

relevant to the present issue. Although use of these different

phrases introduced a degree of ambiguity, the context makes apparent

that all of these phrases were meant to be synonymous and refer to

the same legal proceeding. However, we agree with Peters that such

phrases may, depending on the circumstances, refer to a group of

separate, but related, legal proceedings before more than one court

9
According to the Grievance Committee, “[t]he
Confidentiality Order says several times that protected
material shall not be used in any litigation other than the
captioned proceeding.” In re Peters, 543 F. Supp. 2d at 333
(emphasis omitted). However, while the order does refer to
“the above-entitled litigation,” it does not use the phrase
“the captioned proceeding.”

23
or judge, rather than a single action with a single docket number in

a single court. Since these phrases are not defined in the order,

and are susceptible to different definitions, most of them are of

little use in interpreting the scope of the order.

We focus on two portions of the order. First, paragraph 4 of

the order contains the following language:

(b) Access to Confidential Information. In the absence of
written permission from the Producing Party or Designating
Party, as applicable, or an order of the Court, any Protected
Material consisting of or containing CONFIDENTIAL INFORMATION
shall be used solely for purposes of the prosecution and defense
of the above-entitled litigation[.]

Confidentiality Order ¶ 4(b). Paragraph 4(c)is identical to 4(b),

except that the phrase, “ATTORNEYS’ EYES ONLY INFORMATION,” is used

in place of “CONFIDENTIAL INFORMATION.” Although one can argue over

the precise meaning of “above-entitled litigation,” there is no

plausible definition of that phrase that would encompass both the New

York action and the Massachusetts action. “Above-entitled” refers

to the “title” appearing on the first page of the Confidentiality

Order itself; however, every conceivable part of that litigation

“title” differs from the comparable portion of the Massachusetts

action’s “title”: (a) the names of the parties differ, in that the

Massachusetts action involved one additional plaintiff and one

additional defendant; (b) the name of the court differs; and (c) the

docket number differs.

Second, after defining “Court” as referring to the United States

District Court for the Southern District of New York, see

24
Confidentiality Order ¶ (2)(l), the order states that: the “Court”

may overrule a party’s confidentiality designation, id. ¶ 4(a); the

“Court” may permit the use of confidential material for purposes

beyond the “above-entitled litigation,” id. ¶ 4(b)-(c); “Court”

employees owe no duty to the parties to maintain the confidentiality

of documents filed with the “Court,” id. ¶ 6(a); applications and

motions to the “Court” appending confidential materials are to be

filed under seal with the “caption of this case” appearing on the

outside of the envelope, id. ¶ 6(b); the parties may move the “Court”

to resolve disputes over the sealing of documents, id. ¶ 6(c); the

party challenging a confidentiality designation may seek relief from

the “Court,” id. ¶ 8; and “[t]he Court shall retain jurisdiction,

even after termination of this lawsuit, to enforce this Order and to

make such amendments and modifications to this Order as may be

appropriate,” id. ¶ 13. These procedures and remedies, limited

exclusively to the Southern District of New York, would make no sense

if the order were read as (a) permitting any party, without leave,

to file confidential documents in any other court, and/or (b) giving

the Southern District authority over filings and other proceedings

in other courts. The order clearly anticipates that the Southern

District, and no other court, would control all matters of

confidentiality covered by the order. An essential component of that

control is the requirement that confidential documents be used only

25
in that case in that court.10

To the extent that Peters argues that the Confidentiality Order

was orally modified by Judge Baer in some fashion relevant to the

present issue, see Peters’s Br. at 88-90, we reject the argument.

Although Judge Baer addressed the treatment of discovery materials

on several occasions, Peters has not cited any oral order, or

comment, altering any provisions governing the filing of documents

in any other litigation or court. We agree with the Grievance

Committee that Judge Baer’s instruction that Peters’s firm could

“keep” certain transcript excerpts did not alter the Confidentiality

Order’s bar on the use of those excerpts elsewhere, including in

Massachusetts. See In re Peters, 543 F. Supp. 2d at 334.

Thus, Peters’s submission of confidential materials to the

Massachusetts court, without the prior leave of Judge Baer, violated

the Confidentiality Order.

C. Proof of Culpable Mental State

Although Peters violated the Confidentiality Order, an

attorney’s violation of a court order does not, by itself,

necessarily constitute sanctionable misconduct. To be sanctionable,

10
In her brief, Peters argues that the provision of the
order preserving the right “to seek judicial modification or
amendment of th[e] Order” permitted the parties to seek relief
from a court other than the Southern District of New York.
See Peters’s Br. at 87 (quoting Confidentiality Order ¶ 9).
Even if that interpretation is accurate, that provision did
not override, and no other court ever modified, the provisions
of the Confidentiality Order limiting the use of confidential
material.

26
the attorney’s violation must be accompanied by a culpable state of

mind. See, e.g., ABA Standards for Imposing Lawyer Sanctions, R.

6.21-6.24 (1986, amended 1992)(outlining range of sanctions for

violating a court order or rule, depending on the lawyer’s mental

state and other factors); In re Ryan, 189 A.D.2d 96, 104 (1st Dep’t

1993) (stating that “venal intent” is element of DR 1-102(A)(4)); In

re Cohn, 194 A.D.2d 987, 990-91 (3d Dep’t 1993)(stating that “venal

intent” is “apparent element” of DR 1-102(A)(4) and holding that,

although venal intent was lacking, “the same specifications ...

supported charges of conduct prejudicial to the administration of

justice involving misstatements in official documents misleading to

judicial and other governmental agencies”). For the following

reasons, we find that, on the present record, there is insufficient

evidence that Peters acted with a culpable state of mind when she

violated the Confidentiality Order.

First, the record created by Judge Baer does not make clear the

degree of Peters’s familiarity with the Confidentiality Order during

the relevant time period. The record contains evidence, presented

by Peters, that: other attorneys in Peters’s firm had taken the lead

in negotiating that order; the order had been issued by the district

court on April 12, 2007; Peters had left the country the following

day and did not have a copy of the order during her time abroad; she

had not reviewed the order prior to her departure (although she had

discussed it briefly with others); and she had relied on the advice

27
of other attorneys in her firm as to the order’s requirements. See

App. at A792, A907, A923-24; see also A840 (Brackett research email

dated Apr. 19, 2007) (“I think that we can construe the Massachusetts

Action as a continuation of the previous matter.”).

Zachary Carter and Jonathan Herman, two of the attorneys upon

whom Peters claims to have relied, see id. at A769, A811, testified

that they had not read the Confidentiality Order during the relevant

time period, see id. at A727, A731, A733, A811. However, Herman, who

had been assigned by the firm to supervise Peters’s conduct of the

litigation, see id. at 731, 804, had asked Carter on April 24,

apparently on Peters’s behalf, whether use of transcript pages from

the New York action in an exhibit to an anticipated Massachusetts

filing would violate “any existing court order of [Judge] Baer,” id.

at A846. In response, Carter advised that, although there was an

outstanding motion requesting the return of transcript pages,

republishing them in the exhibit would be “fair game.” Id.

According to Carter’s testimony, however, he was not familiar with

the Confidentiality Order at the time he gave that advice, as “the

only orders that [he] had been . . . exposed to[] were those that had

been issued” from April 16 through the time he gave that advice. Id.

at A731. The record does not indicate whether Peters knew, or should

have known, the limited nature of Carter’s advice.

As for Marc Reiner, Deidre Sheridan, and Brackett, the Dorsey

attorneys who Peters alleged were the most familiar with the

28
Confidentiality Order, see id. at A792, A907, A923-24; cf. id. at

A697 (Reiner testifying that he had read the order carefully), their

testimony and declarations do not cover the issue of Peters’s

familiarity with the Confidentiality Order, see id. at A239-43, A244-

50, A680-706, A708-16, A819-24, although they were presumably the

most knowledgeable about that point, aside from Peters herself. In

fact, Sheridan never testified at all. Although Reiner’s testimony,

and an email, indicate that he had informed Peters of Judge Baer’s

April 16 instruction that her firm “should seek new discovery” in the

Massachusetts action, see id. at A686, A835, he did not mention the

Confidentiality Order in relation to that instruction.

Judge Baer and the Grievance Committee rejected Peters’s

assertion that she had acted in good faith as demonstrated by her

reliance on Brackett’s research on whether the Massachusetts and New

York cases were the same litigation within the meaning of the

Confidentiality Order. See In re Peters, 543 F. Supp. 2d at 334;

App. at A839-41. However, a rejection of that evidence requires a

finding as to her familiarity with the Confidentiality Order, i.e.,

whether she knew, or should have known, that the Confidentiality

Order barred the filing in Massachusetts of material covered by that

order. Furthermore, if the Grievance Committee concludes, on remand,

that Peters did not know that the Massachusetts filing was barred by

the Confidentiality Order, but should have known, a finding as to the

degree of her culpability is necessary since mere negligence might

29
not warrant severe, or any, disciplinary measures. See ABA Standards

for Imposing Lawyer Sanctions, R. 6.23-6.24 (stating that reprimand

or admonition is generally appropriate for negligent failure to

comply with court order or rule). On the other hand, it is possible

that Peters would warrant discipline for violating the

Confidentiality Order even if she was not familiar with its terms —

if, for example, her failure to familiarize herself with the order

was in bad faith. However, such a conclusion would require detailed

factual findings.

Second, we disagree with the Grievance Committee’s conclusion

that Peters’s “good faith” defense is undermined by provisions of the

Confidentiality Order that “provide[] a mechanism for seeking

guidance from the Court on its scope,” In re Peters, 543 F. Supp. 2d

at 334 (citing Confidentiality Order ¶¶ 9, 10, 13), and by the

asserted “fact that her own client did not agree with her use of the

transcripts in the Massachusetts action,” id. (citing Wolters Kluwer,

525 F. Supp. 2d at 514 n.254). Paragraph 9 of the Confidentiality

Order permits “any person to seek judicial modification or amendment

of [the] [o]rder”; paragraph 10 requires that notice be given to a

party if disclosure is sought of that party’s “Protected Material”;

and paragraph 13 provides that the obligations created by the order

would survive the termination of the lawsuit “unless ... modified by

the respective Court in each action” and that the district court

would retain jurisdiction to enforce, amend, or modify the order.

30
None of those provisions contain an explicit mechanism for seeking

guidance on the scope of the Confidentiality Order. While such

guidance could be sought, with or without reference to any provision

of the Confidentiality Order, no provision mandates that a party seek

guidance as to the meaning of a term or provision of the order or

suggests that failure to seek guidance is necessarily unreasonable

or in bad faith.

The record also does not contain clear evidence that Peters’s

client disagreed with her use of the New York transcripts in

Massachusetts. At one point, the relevant witness, in-house counsel

for the client, testified that he had instructed Peters to make an

argument to the district court about the use of New York depositions

in the Massachusetts action. See App. at A460-61. However, in

response to a question about whether he understood that the district

court had made a “further ruling on these issues,” he testified that

there had been “additional communications on that,” without

describing that ruling or those communications. See id. at A461.

That witness also testified that he had authorized Peters to request

the Massachusetts court to order the defendants to again produce the

documents that Judge Baer had ordered be returned to him, see id. at

A464, and that he had been consulted prior to the filing of New York

transcripts in the Massachusetts action, had been advised that the

Confidentiality Order did not cover the anticipated filing, and,

31
apparently, had not objected, see A518-19.11

Third, in finding that Peters had violated the Confidentiality

Order in bad faith, the Grievance Committee adopted Judge Baer’s

conclusion that

Peters used the transcripts [in the Massachusetts action]
in a bad-faith effort for the improper purpose of gaining
advantage (and expedient relief) in a new court after she
had ‘judge-shopped,’ and after she had gained extensive
discovery without providing any discovery of her own, and
in an effort to have [the Massachusetts] Court eviscerate
the Confidentiality Order that this Court had entered to
govern discovery produced in this litigation.

In re Peters, 543 F. Supp. 2d at 334 (first alteration in original)

(citing Wolters Kluwer, 525 F. Supp. 2d at 548). This conclusion,

however, links the Confidentiality Order allegation to several other

allegations made in the defendants’ sanction motion, without separate

analysis of those other allegations. Additionally, part of Judge

Baer’s conclusion was rendered questionable by this Court’s opinion

in the appeal from Judge Baer’s reprimand order.

In that appeal, this Court reversed the district court’s

reprimand against Peters’s law firm for voluntarily dismissing the

11
The testimony concerning in-house counsel’s failure to
object to the Massachusetts filing is ambiguous. Peters asked
in-house counsel the following question: “And you didn’t say
anything to me about not filing that pleading with the - -
with transcripts attached, correct?” App. at A518. In-house
counsel answered, “No,” id. at A519, which might be
interpreted as “No, you are not correct,” or the opposite,
“No, I didn’t say anything to you about not filing that
pleading.” The context appears to favor the latter
interpretation. At the very least, the testimony relevant to
whether the client disagreed with the filing of the
transcripts is too ambiguous to reach any firm conclusion.

32
Wolters Kluwer litigation, stating that the firm was “entitled to

file a valid Rule 41 notice of voluntary dismissal for any reason,”

and rejecting Judge Baer’s conclusion that the dismissal was an

improper attempt to judge-shop, or that the filing of the Rule 41

notice itself was sanctionable. Wolters Kluwer, 564 F.3d at 114-15;

see also id. at 115 (“It follows that Dorsey was entitled to file a

valid Rule 41 notice of voluntary dismissal for any reason, and the

fact that it did so to flee the jurisdiction or the judge does not

make the filing sanctionable.”). Furthermore, the record shows that

there were legitimate reasons supporting dismissal, as both the

client’s in-house counsel and certain Dorsey attorneys, Peters

included, had become aware of a possible lack of personal

jurisdiction in New York; indeed, the defendants had filed a motion

to dismiss on that basis. See App. at A648, A832 (e-mail exchange

between Peters and opposing counsel discussing the issue).

Additionally, there does not appear to be a dispute that Peters

initially had opposed dismissal under Rule 41 and had instead

attempted, unsuccessfully, to have the district court rule on her

motion to have the case transferred to Massachusetts.12 See, e.g.,

12
In his May 2007 order, Judge Baer stated that, had
Peters’s client moved under 28 U.S.C. § 1404 to transfer
venue, its argument that the Massachusetts action represented
“continuing litigation” would have been stronger. See Wolters
Kluwer, 2007 WL 1498114, at *8. However, Peters’s firm had
made such a motion in April 2007, and, as Judge Baer
acknowledged in his later sanctions order, he had “declined to
address the [venue] issue at that time.” Wolters Kluwer, 525
F. Supp. 2d at 495.

33
id. at A202 (Peters Decl. ¶ 132), A239-41 (Reiner Decl. ¶¶ 2-6),

A680-81 (Reiner testimony), A833-34 (emails, between Peters and

other attorneys, discussing issue).

For the forgoing reasons, we also vacate the portion of the

Grievance Committee’s order sanctioning Peters based on the

Confidentiality Order allegation. On remand, however, the

Grievance Committee is free to make a new determination, based

on detailed factual findings, of whether Peters acted with a

culpable state of mind when she violated the Confidentiality

Order and, if so, to discipline her accordingly.

III. Seven-Year Suspension

The preceding conclusions, by themselves, necessitate

vacatur of the seven-year suspension imposed by the Grievance

Committee. Thus, at this juncture, we need not address whether

that suspension was excessive. However, if the Grievance

Committee determines, after additional proceedings, that

suspension or disbarment is warranted, the Committee should

explain its rationale for the severity of the sanction imposed,

with a discussion of: mitigating and aggravating factors;

Peters’s state of mind and motive; any prejudice caused by her

conduct to the parties, public, and district court; and the

relevant case law and other authorities supporting its

34
determination.

IV. Conclusions

For the foregoing reasons, the judgment of the district

court is VACATED and the matter is REMANDED for further

proceedings consistent with this decision. In vacating the

Grievance Committee’s determination, we do not intend to

suggest that the charges against Peters were improperly

brought, only that certain procedures and findings were

inadequate. We therefore deny Peters’s request that the

Grievance Committee be directed to terminate its disciplinary

proceeding against her. All remaining issues raised by Peters

in her brief either are rendered moot by this decision or

should be raised in the first instance on remand.

35