Attorneys – Pro Hac Vice – Revocation – Motion to Recuse

Belue v. Leventhal (Lawyers Weekly No. 11-01-0519, 23 pp.) (Wilkinson, J.) No. 10-1300, May 13, 2011; USDC at Spartanburg, S.C. (Anderson, J.) 4th Cir. Click here for the full-text opinion.

Holding: The 4th Circuit vacates a South Carolina trial judge’s order revoking temporary admission to practice for three Miami lawyers who asked the judge to recuse himself from hearing a suit involving supplemental cancer insurance policies.

Transamerica Life Insurance Company and its predecessor, Life Investors Insurance, issued supplemental cancer insurance policies. In 2007, buyers of these supplemental policies filed putative class action suits alleging the insurers had breached the policies. Three lawyers from the Miami office of Jorden Burt LLP – Markham Leventhal, Julianna McCabe and Irma Solares – represented the insurers. Two lawsuits were filed in Arkansas: Pipes v. Life Investors Ins. Co. of America, and Runyan v. Transamerica Life Ins. Co. The underlying suit here, Belue v. Aegon USA Inc., was filed in South Carolina, where a local lawyer successfully moved to have the three Jorden Burt lawyers temporarily admitted to practice in the S.C. district court under the pro hac vice rule.

In May 2009, the lawyers for defendants filed a notice of settlement and a motion to stay class-related proceedings pending an Arkansas court’s approval of a settlement in Runyan. Defendants said the Runyan settlement encompassed S.C. claims alleged in Belue, the S.C. case.

At a hearing in Belue, the S.C. federal judge characterized the Runyan settlement as potentially collusive, possibly one “of those buddy settlements that we have to watch out for.” The court noted the Pipes case from Arkansas, made less than favorable comments about the Arkansas district court, and criticized defendants’ approach to the litigation. The court said the settlement on the table was “considerably” less than a settlement the court presided over that involved the same issues, and suggested the settlement was improper. The judge denied defendants’ motion to stay the class-related proceedings, advised plaintiffs to quickly file for class certification before the Arkansas court approved the Runyan settlement and expedited a hearing on the class-certification motion.

The Miami lawyers filed several motions, including a motion asking the judge to recuse himself under 28 U.S.C. §§ 144 and 455 because he had demonstrated prejudice and bias. The court did not respond favorably. The judge expressed frustration and said the defense had “los[t] the case and attack[ed] the judge.” He accused defense counsel of being “highly incompetent” and said the lawyers filed their motions in bad faith. At a hearing, the judge said he allowed “those people to come in as a matter of grace, a matter of discretion,” but he would not allow them to stay. He revoked their pro hac vice status. The 4th Circuit vacates the revocation order. The court announced several reasons for the revocation, but there is ample basis to think the principal reason was the recusal motion.

While recusal motions serve as an important safeguard against truly egregious conduct, they cannot become a form of brushback pitch for litigants to hurl at judges who do not rule in their favor. In their motion for recusal, the lawyers cited four reasons, but none of the asserted rationales provides a basis for the drastic remedy of recusal. To argue that judges must desist from forming strong views about a case is to blink the reality that judicial decisions inescapably require judgment. The recusal motion here was decidedly ill-founded.

Although the recusal motion lacked merit, the lawyers did not receive due process prior to revocation of their status. While pro hac vice status was at one time considered to be granted and held at the grace of the court, this approach does not accord with modern law practice. The legal profession has become a national one, and justice in any true sense must transcend the parochial. We agree some modicum of due process should attach to pro hac vice revocation. The three lawyers played different roles with regard to the motions, and they were not given a chance to explain the circumstances or to express whatever level of contrition may have been appropriate.

None of this is to suggest that either party to this whole affair conducted itself nobly. The underlying case has now been resolved; we vacate the revocation order and remand the case with directions to conclude the matter forthwith.

Vacated and remanded.