ILLINOIS POLLUTION CONTROL BOARD
July 22,
1993
PEOPLE OF THE STATE
)
OF ILLINOIS,
)
Complainant,
v.
)
PCB 92—164
(Enforcement)
BERNIECE KERSHAW and DARWIN
)
DALE
KERSHAW
d/b/a KERSHAW
)
MOBILE
PARK
HONE,
)
Respondents.
ORDER OF THE BOARD
(by G.
T. Girard):
On October 29,
1992,
the Attorney General, on behalf of the
People of the State,
filed this enforcement proceeding against
the respondents Berniece and Darwin Kershaw.
The complaint
alleges violations of §~12and 18 of the Illinois Environmental
Protection Act,
415 ILCS 5/12,
5/18
(1992)
pertaining to water
treatment and discharges.
On February 17, 1993,
complainant
moved for summary judgment on its complaint.
No appearance was
filed on behalf of the Kershaws, who did not respond to the
motion.
On April
8,
1993, the Board granted the complainant’s Notion
for
Summary
Judgment
and
levied
a
$250,000
penalty,
the
sum
requested by the Complainant.
1
On April 27,
1993, Attorney Richard N. Kuntz filed an
appearance on behalf of the Kershaws, and on Nay 12,
1993 Mr.
Kuntz
filed a motion for reconsideration of the summary judgment
order.
On Nay 24,
1993,
the Complainant filed a motion for
extension of time to file a response to the motion for
reconsideration as well as a motion to disqualify Mr.
Kuntz from
representing the Kershaws in this proceeding.
The motion
correctly states that Mr.
Kuntz has served and continues to serve
1
As detailed in the Board’s order,
respondents
could have
been assessed seven hundred sixteen million one hundred thousand
dollars
($716,100,000),
based on the maximum penalties allowed by
the Environmental Protection Act
(415
ILCS
5/31
(1992)
for the
number and duration of the violations alleged.
(Order of April
8,
1993,
p.
4).
2
as a hearing officer for the Board in other cases
2•
The
Complainant asserts that “Mr. Kuntz’s simultaneous employment by
the Board and the Respondents creates a conflict of interest that
requires Kuntz to be disqualified as Respondent’s attorney in
this proceeding”.
The Board granted the People’s motion for
extension of time by order of Nay 27,
1993, which granted a 14—
day extension from the date of the order disposing of the motion
for reconsideration.
On June 8,
1993 Mr. Kuntz filed a memorandum,
supported by
affidavit,
in opposition to the motion to disqualify by and
through his attorney, Lee R. Cunningham.
Pursuant to leave
granted by the Board on June 17,
1993, the Complainant filed
a
reply in response to Mr. Kuntz memorandum on June 25,
1993
~.
For the reasons stated below, the Board denies the
Complainant’s motion to disqualify Mr. Kuntz from representing
the respondents in this case.
In summary, the Board finds that
there is no conflict of interest in Mr. Kuntz’s representation of
the Kershaws in this case and his service to the Board as hearing
officer in other,
unrelated cases.
FACTUAL BACKGROUND
There
is no disagreement between the parties as to the
factual circumstances
in this case, but onl~ras to the
interpretation to be placed on those facts
.
Mr. Kuntz was
2
The
Board
hearing
officer
in
this
case,
since
its
inception,
has
been
Edwin
H.
Benn.
Mr.
Kuntz
has
had
no
involvement in this case on behalf or at the behest of the Board.
~
The People’s May
24,
1993
motion to disqualify will be
cited a “Motion”, Mr.
Kuntz June
8,
1883 memorandum in opposition
as “Resp. Memo”,
and the People’s June 25,
1993 reply in response
as “Reply”.
‘~
The Board notes that the factual circumstances concerning
Mr. Kuntz’s employment as
a hearing officer with the Board were
provided by Board staff to the Office of the Attorney General (AGO)
at its request prior to the filing of the motion.
While the motion
might
appear
to
indicate
that
this
occurred
through
a
formal
Illinois Freedom of Information Act
(FOIA)
(Ill.
Rev.
Stat.
ch.
116,
par.
201 et seq.
_________
ILCS
_________)
request/response
process
(Motion,
p.
2),
such was not the case.
As this type of
information related to the disbursement of public funds is clearly
“public information”, the information was provided by staff to the
AGO and to Mr.
Kuntz once a telephone
inquiry was followed by
a
written
request.
As
the Board
and
members
of
its
staff
have
repeatedly stated
at conferences
and
other public meetings,
the
3
appointed by the Board as a hearing officer
in December of 1991.
He has served as hearing officer in nine cases:
four underground
storage tank reimbursement appeals, three air permit appeals, an
administrative citation case, and a citizens’ noise enforcement
case.
Mr. Kuntz stated in the affidavit accompanying his motion
that none of these cases were anticipated to go to hearing,
having been closed,
the subject of open waivers, or voluntary
motions to dismiss.
(Resp.
Memo. Affidavit, par.
7).
The
complainant was not a party to, nor did the Attorney General
appear in,
any of those proceedings.
(~
at par.
4).
As of the
date of the Complainant’s motion,
the Board had paid Mr. Kuntz
$1,885.13 for his services in these nine cases since his
appointment as hearing officer.
(Motion,
p.
2).
The relationship of a hearing officer with the Board
is
governed by contract, which also fixes rates of compensation per
case accepted and per day of hearing.
A copy of Mr. Kuntz
contract
is attached as Exhibit 1 to his affidavit
~.
The
hearing officer
is not an employee of the Board,
but
is instead
an independent contractor.
As Kuntz correctly notes, the
contract for July
1,
1992 through June 30,
1993 “does not place
any restrictions on his ability to represent clients before the
Board or otherwise”.
(Resp.
Memo.
p.
2).
The duties of a hearing officer are specified in the Board’s
procedural rules at 35
Ill. Adm. Code 101.220 and 103.200.
Unlike the practice at many other agencies,
the Board’s hearing
officers do not make rulings or recommendations concerning the
merits or outcome of any case.
As Mr. Kuntz states, the hearing
officers’ primary functions is to “provide that a clear and
concise
hearing
record
is made available to the Board”.
(Resp.
Memo.
p.
3).
Duties include scheduling and conducting of pre-
hearing conferences and hearings, receiving and ruling on the
admissibility of evidence, on—record assessment of the
credibility of witnesses,
and establishment of briefing
schedules.
All rulings and orders of the hearing officer are
appealable to the Board.
The Board additionally notes that
hearing officers receive procedural and administrative
instructions during the course of a case from Board staff, and
are invited to call Board staff for any needed procedural and
administrative advice during the course of a case.
As to the circumstances surrounding his involvement in this
Board does not require,
and indeed disfavors, that information be
requested by use of formal FOIA procedures.
~ The Board notes that it uses only one standard contract and
compensation schedule.
Contracts are for one year periods, running
from July
1 through June 30
to coincide with the state’s fiscal
year.
4
case,
Mr.
Kuntz states in his motion that:
When
respondents sought to retain Mr. Kuntz to
represent them in this proceeding,
Mr. Kuntz,
after
disclosing to respondents his status as a part-time
hearing officer and obtaining their consent to his
representation of them,
reviewed the Illinois
Environmental Protection Act, Board regulations and his
contract with the Board and could find no provisions
concerning a hearing officer serving as counsel in an
unrelated proceeding before the Board.
(Kuntz Aff.
at
pars.
4,
6,
7).
Mr. Kuntz then telephoned
an
unnamed
Board attorney to determine whether the Board had any
rules or policies concerning
a hearing officer
representing a private client in a proceeding before
the Board which is unrelated to the cases over which
the hearing officer has presided or is presiding.
(Kuntz Aff. at par.
7).
The staff attorney informed
Mr.
Kuntz that there were no regulations,
rules,
or
policies prohibiting such representation.
(Kuntz Aff.
at par.
7).
On the contrary, the staff attorney told
Mr.
Kuntz that other hearing officers have previously
represented private clients before the Board in
proceedings unrelated to matters in which they acted as
hearing officer.
(Kuntz Aff. at par.
7).
Mr. Kuntz goes on to note that on May 24,
1993, Board staff
provided him with a copy of an opinion of the Committee on
Professional Responsibility of the Illinois State Bar Association
(ISBA) ~
As noted
in ISBA Opinion No.
88-9,
that opinion specifically
overruled the Committee’s Opinion No.
408
(July 13,
1974) which
indicated that a private attorney who serves as a hearing officer
for a state board should not accept employment from a defendant—
respondent in unrelated actions instituted before the Board
during the time he
is acting as hearing officer and for a period
of one year thereafter.
In ISBA Opinion No. 88-9, the Committee
noted that its overruling Opinion No.
408 was consistent with
Opinion No.
557, dated November
5,
1976,
in which the Committee
concluded that an attorney who represents private clients before
this Board in unrelated matters is not precluded from
representing the Board in appellate matters on a case by case
basis.
The Board affirms that the advice Mr. Kuntz received from
the unnamed staff attorney is consistent with the Board’s policy
6
A copy of this opinion was also furnished to the AGO by
Board staff prior to the filing of its motion to disqualify.
5
and practice.
Prior to issuance of ISBA Opinion No. 88-9 in
March of 1989, the Board did not allow its hearing officers to
represent private clients before it in reliance on Opinion No.
408.
Upon receipt of the Opinion No.
88—9 from the hearing
officer who brought the question to the ISBA Committee,
the Board
began to allow its hearing officers to appear before it on behalf
of private clients.
Mr. Kuntz is not the only hearing officer
currently on the Board’s roster who is appearing before the Board
on behalf of clients in cases unrelated to those
in which he
serves as hearing officer.
The Board further observes that this
is the first case in which the Board’s policy and practice in
this area has been challenged.
STANDARDS FOR MOTION TO DISQUALIFY
Mr. Kuntz asserts, and the Complainant does not challenge,
that the standard of proof required for the granting of a motion
to disqualify is
a high one.
Mr. Kuntz states that the granting
of a motion to disqualify
is a drastic measure which courts should hesitate to
impose except when absolutely necessary.
A
disqualification of counsel, while protecting the
attorney-client relationship, also serves to destroy a
relationship by depriving a party of representation of
its
own choosing....
ISJuch motions should be viewed
with extreme caution for they can be viewed as
techniques for harassment.
Freeman
V.
Chicago Musical Instrument Co.,
689 F.2d 715, 722—723
(7th Cir.
1982)
(emphasis added).
Accord SK Handtool Corp.
v.
Dresser Industries,
Inc.,
1993 Ill. App. LEXIS 549,
39
(1st Dist.
1993); Miller v. Norfolk
& Western Ry.
Co.,
183 Ill.
App.
3d 261,
538 N.E.2d 1293,
1297
(4th Dist.
1989).
Because of the drastic
nature of a motion to disqualify, the movant must make a strong
showing that disqualification is necessary.
~.;
Schiessle v.
Stephens,
717 F.2d 417,
420
(7th Cir.
1983).
THE BASES FOR THE MOTION TO DISQUALIFY
The Complainant asserts that Mr. Kuntz should be
disqualified from representing respondents
in this case due to
alleged violation of Rule 1.7(a)
and 1.7(b)
of the Illinois Rules
of Professional Conduct and in furtherance of the public interest
of preservation of public confidence
in the integrity of the
Board’s deliberative process.
Rule of Professional Conduct 1.7(a)
Rule 1.7(a) of the Illinois Rules of Professional Conduct
6
provides:
A lawyer shall not represent a client if the
representation of that client will be directly adverse
to another client, unless:
(1)
the lawyer reasonably believes the representation will
not adversely affect the relationship with the client;
and
(2)
each client consents after disclosure.
Illinois Supreme Court Rules, Art. VIII, Rule of Professional
Conduct 1.7(a).
The Complainant asserts that the Board,
as a governmental
body cannot consent to dual representation.
an attorney may not represent both a
governmental body and a private client even
if disclosure is made and the parties agree
to such dual representation.
“Where the
public interest is involved, disclosure alone
is not sufficient since the attorney may not
represent conflicting interests even with the
consent of all concerned”.
In re LaPinska,
72 Ill.2d 461,
471,
381 N.E.2d 700,
704
(1978),
quoting In re A.
&
B..,
209 A.2d 101,
103
(N.J.
1965).
In
furtherance of this contention, the Complainant states that:
The Board is a client of Kuntz in that the
Board has employed and currently employs him
as a hearing officer.
Kuntz’s employment by
the Board clearly would be adverse to the
Respondents.
As an employee of the Board,
Kuntz
is
a paid agent of the State of
Illinois.
The Complainant in this proceeding
is the People of the State of Illinois.
(Motion,
p.
2-3).
Mr.
Kuntz responds, however, that the Complainant’s reliance
on this rule is misplaced.
He asserts that no attorney—client
relationship exists between the Board and its hearing officers,
and that this rule applies only when there is an already-existing
attorney-client relationship which will conflict with a new
representation that the attorney seeks to undertake.
(Resp. Memo.
p.
6).
Among other authorities,
Mr. Kuntz cites ISBA Opinion No.
88-9.
In the ISBA Opinion, as in this case,
a private
practitioner who served as a part—time hearing officer for the
7
Board sought to represent a private client in
a proceeding before
the Board.
As in this case, the private client had never
appeared before the lawyer in his capacity as a hearing officer.
As in this case,
there was nothing in the practitioner’s contract
with the Board limiting his ability to practice law.
As in this
case,
the practitioner,
in his capacity as a hearing officer,
made no decisions on the merits of the cases over which he
presided and made no recommendations to the Board regarding the
merits of those cases.
The ISBA Committee concluded that the
predecessor of Rule 1.7(a)
(which was substantially similar to
current Rule 1.7(a)) did not preclude the practitioner from
representing the private client before the Board because “~g
Hearing Officer does not have an attorney-client relationship
with the Board, but rather is employed on an independent
contractor basis”.
(ISBA Opinion No. 88-9 at 2, emphasis added).
The Complainant attempts to distinguish this opinion on the
grounds that the instant case involves an enforcement action and
the opinion involved a variance petition.
(Mot.
pp.
6-7)
However, this is a “distinction without a difference” to the
determination of whether an attorney—client relationship exists
between the Board and its hearing officers.
The Board does not
consider its employment relationship with its hearing officers to
be an attorney-client relationship.
The undisputed facts of this
case are identical to those presented to the ISBA Committee.
The Board finds that Rule 1.7(a)
does not apply in this
case.
Rule of Professional Conduct 1.7(b)
Rule 1.7(b)
provides:
A lawyer shall not represent a client if the
representation of that client may be materially limited
by the lawyer’s responsibilities to another client or
to a third person,
or by the lawyer’s own interests,
unless:
(1)
the lawyer reasonably believes the representation will
not be adversely affected; and
(2)
the client consents after disclosure.
Illinois Supreme Court Rules, Art.
VIII, Rule of Professional
Conduct 1.7(b).
The Complainant asserts, without more, that:
“Mr.
Kuntz’s representation of the
Respondents may be materially limited by
8
Mr.)
Kuntz’s duties to the State of Illinois
by virtue of his status as a Board hearing
officer”.
(Motion at 4).
Mr.
Kuntz argues that the Complainant does not explain how
his representation of Respondents in this enforcement proceeding
“may be” materially limited by his record-compiling duty as a
hearing officer in unrelated cases which bear ~
relationship
whatsoever to this enforcement proceeding.
He notes that “vague
and general inconsistencies giving rise to hypothetical conflicts
in the mind of an opposing party will not justify so drastic a
measure as disqualification”.
Miller v. Norfolk & Western Ry.
~
538 N.E.2d at 1297 (citation omitted).
Mr.
Kuntz believes that he has already demonstrated that he
will vigorously represent Respondents in this proceeding.
He
notes that he has already filed a Motion to Reconsider the
Board’s April 8,
1993 order and another motion in opposition to
the Attorney General’s petition to recover its fees.
Finally,
Mr. Kuntz argues that Complainant has no standing to assert a
Rule 1.7(b) violation as a basis for disqualification in this
case in any event.
The attorney-client relationship protected by
Rule 1.7(b)
in this case is the relationship between Mr.
Kuntz
and Respondents.
He argues that Complainant
is a stranger to
this relationship,
and
as such,
has no standing to complain about
a contrived “material limitation” of that relationship.
Evink
V.
Pekins Ins.
Co.,
122 Ill. App.
3d 246,
460 N.E.2d 1211,
1214
(2d
Dist.
1984)
;
In the Matter of Joel
E. Sandahl,
980 F.2d 1118
(7th
Cir.
1992)
(same); Pacific Dunlop Holdings Inc.
v.
Barosh,
1993
U.S. Dist.
LEXIS 955,
13
(N.D.
Ill.
1993)
(same).
The Board
is persuaded by Mr. Kuntz arguments and finds that
the Complainant’s pleading fails to demonstrate any “material
limitation” on his ability to represent the Kershaws in this
case.
The Public Interest
The most troublesome to the Board of the Complainant’s
challenges is the more general charge that,
in various ways,
the
public interest
is not well served by the Board’s policy and
practice of allowing its hearing officers to appear before it as
the attorney for private clients in cases unrelated to those in
which it serves as hearing officers.
The essence of this
argument is twofold, that:
1)
“Mr.
Kuntz’s relationship with the Board may cause
the Board to favor the Respondents, thereby undermining the
Board’s impartiality.. .prejudicing
the Complainant, the People
of the State of Illinois”,
(Motion,
pp.
7—8)
,
and
9
2)
“Mr.
Kuntz’s representation of the Respondents before
the Board for which Kuntz serves as a hearing officer, creates
the appearance of a conflict of interest and cannot be permitted.
Impartiality is an intrinsic and indispensable feature of the
Board’s role, and Kuntz’s dual representation may frustrate that
necessary impartiality.
(Motion,
p.
9).
In support of these contentions, the Complainant cites InRe
La Pinska, 72 Ill.
2d 462,
381 N.E.2d 700 (1978), Miller
v..
Norfolk & Western Rv. Co.,
183 Ill. App.3d 261,
538 N.E.
3d 1293
(4th Dist.
1989),
and In Re Vrdolyak,
137 Ill.
2d 407,
560 N.E.2d
840
(1990).
The complainant suggests that in this context the ISBA
Opinion is:
of no precedential value,
and the Board
should not rely on it.
Complainant does not
question the sincerity or intentions of the
members of the Committee.
The Committee
members, however,
are not accountable to the
public and to the People of the State of
Illinois.
Rather, that duty belongs to the
Board and to the Office of the Attorney
General.
Complainant believes that the ISBA
opinion is significantly distinguishable from
the instant case.
Further, complainant
disagrees with the findings and conclusions
in that opinion.
(Reply,
p.
4—5)
Respondents distinguish two of the cases cited by
complainant, La Pinska and Vrdolyak as being attorney
disciplinary cases involving situations in which the attorneys in
question accepted private employment found to be in direct
conflict with their public duties as either attorneys for their
governmental client,
or as an elected official of a governmental
entity being sued by the private client.
In the third case,
Miller,
the appellate court found that disqualification was not
proper where the city and a private client waived a potential
conflict of interest
in a case in which a law firm retained by a
city represented the private client in a case with respect to the
same subject matter as it had previously represented the city.
(Resp.
Memo.
pp. 12-14).
While the Board believes that the cases cited by the
Complainant are not controlling here, the Board certainly agrees
with the general proposition that “i)f
we are to maintain public
confidence in our system of government and the legal profession,
attorneys who serve as public officials must avoid not only
direct conflicts
of interests,
but also any situation which might
appear to involve a conflict of interest”.
In re Vrdolvak,
137
Ill.2d 407,
425,
560 N.E.2d 840, 847
(Ill.
1990), quoting Hiqqins
10
v. Advisory Commission on Professional Ethics,
372 A.2d 372,
373
(N.J.
1977).
In this case Mr. Kuntz, acting on advice from the Board
staff consistent with an ISBA ethics opinion relied upon by the
Board, has not committed any impropriety in appearing in this
case as the attorney for the Kershaws, who consented to the
representation after full disclosure of Mr. Kuntz’s situation.
The Board has no doubt that Mr. Kuntz will vigorously represent
his clients.
The Board cannot and will not find that the
possibility of creation of public misunderstanding generally of
the impartiality of the Board and the relationship of the Board
and its Hearing Officers amounts to the “strong showing”
necessary to deprive a party of the attorney of its choice.
~‘
The Board is not, however, unheeding of the concern
expressed by the AGO.
The Board, and its newly appointed
Chairman, are in the process of reevaluating many of the Board’s
historic policies and practices.
While the Board does not commit
to conducting regulatory hearings concerning this issue
(Resp.
Memo. p.
16, par.
2), the Board will state that its consideration
of these issues will not end with the disposition of these
motions.
Again,
in conclusion,
the Complainant’s motion to disqualify
is denied.
Complainant’s response to respondents’ motion to
reconsider
is due to be filed on or before August
6,
1993.
IT IS SO ORDERED.
I,
Dorothy
M.
Gunn, Clerk of the Illinois Pollution Control
Boari~, hereby certifythat the above order was adopted on the
-~‘
day of
I
,
1993,
by a vote of
7~
/
~
Dorothy N. ,~Gunn, Clerk
Illinois Pollution Control Board
~
Indeed,
the
Board
notes
that
the
Kershaws
have,
by
handwritten letter received by the Board on July 3,
1993, expressed
their desire to have Mr.
Kuntz represent them and belief that the
Complainant’s instant motion is part of a pattern of harassment by
government.
(See esp.
p.
6).
(This letter was mailed to the Board,
whereupon the Clerk made service of the letter on counsel for the
parties.)
