UNITED STATES v. VAGUE

The opinion of the court was delivered by: Grady, District Judge.

MEMORANDUM DECISION AND ORDER

The question presented here is whether a judge should take action, sua sponte, when it appears that a defendant in a criminal case has been charged a clearly excessive fee by his privately retained attorney. A statement of the facts will put the matter in focus.

THE FACTS

The indictment names two defendants, Steven A. Vague and Gerald E. McDermott, Jr., both of whom have now been sentenced after pleas of guilty. Vague received 90 days on work release, followed by five years probation, and McDermott received four years probation under the Youth Corrections Act, 18 U.S.C. § 5010. The fee question arises only in the case of the defendant Vague.

The indictment, which concerns the possession of freight stolen at O'Hare International Airport in Chicago, is in five counts. Count I charges that Vague and McDermott violated 18 U.S.C. § 371, the federal conspiracy statute, by conspiring to receive and possess various items of freight which were stolen from interstate and foreign air shipments moving through O'Hare, in violation of 18 U.S.C. § 659. It was charged that the goods were stolen from the possession of AM Air Freight, Inc. and consisted of such things as leather coats, fur coats, cameras, and watches. The remaining four counts of the indictment alleged substantive violations of § 659, charging the defendants with unlawful possession of specific stolen items on particular dates.

The facts of the case, as disclosed by the defendants' admissions when they entered their pleas of guilty and by the subsequent presentence investigation conducted by the Probation Office, are simple. Steven Vague, age 23, worked as a truck driver for AM Air Freight Company, a trucking company which carried freight to and from O'Hare Airport. The company was owned by Vague's parents. The other defendant, Gerald E. McDermott, Jr., age 22, was a partner in Sunrise Air Freight, a similar business. In April 1980, McDermott was arrested in Carpentersville, Illinois, for unlawfully discharging a firearm. McDermott's gun was confiscated and Officer Dwight Willenius of the Carpentersville Police Department told him the gun might not be returned. McDermott volunteered that if he could get the gun back they might be able to work something out, since there was always "a lot of stuff floating around the airport." Thereafter, McDermott and Willenius discussed the possibility of obtaining stolen cameras. McDermott obtained some stolen cameras from Steven Vague and asked Willenius if he was interested. Willenius said he would have to check with "Frank S." Shortly thereafter, McDermott, Willenius and Frank S. had a meeting, at which it was agreed that Frank S. would "get rid of" anything McDermott could obtain. McDermott then introduced Vague to Willenius and Frank S. On August 6, 1980, McDermott obtained three fur coats from Vague and sold them to Frank S. for $125.00 each. These coats were stolen out of a shipment from Poland which had been picked up by AM Air Freight at O'Hare Airport for delivery to the consignee in Chicago. Thereafter, during the summer of 1980, McDermott and Vague sold to Frank S. various items described in the indictment, all of which had been stolen from foreign shipments handled by AM Air Freight.

"Frank S." was, unknown to Vague and McDermott, an agent of the United States Customs Service. He was also wired for sound during many of his conversations with the defendants. Not surprisingly, these conversations are highly incriminating to the defendants. On one tape, for instance, Steven Vague is heard to say, "If there's ever anything taken off that airport, it does not go by my vision. I've heard about everything. . . . That's why I'm out there. I'm not out there to make a living, I'm out there to set things up."

On December 1, 1980, Vague invited Frank S. to inspect some merchandise at Vague's residence. The agent went there and Vague displayed 75 leather coats and some photographic lenses and digital watches, all of which had been stolen from foreign shipments. At this point, Vague was placed under arrest by other agents who descended upon the premises. The items in his possession at that time were seized and are the subject of Count V of the indictment.

The next day Officer Willenius telephoned McDermott and told him to turn himself in, along with any stolen merchandise he possessed. Pursuant to these instructions, McDermott surrendered at the office of the Customs Service and turned in some additional stolen articles.

On December 2, 1980, the defendant Vague was brought before a United States magistrate for the purpose of setting bail. Attorney Robert DeMeo, whose fees are in question here, filed his appearance on behalf of Vague at that time. Vague, who lives with his parents and has no prior criminal record, was released on his own recognizance. The case was continued to December 9, 1980, for a probable cause hearing.

On December 9, the magistrate conducted a preliminary hearing and made a finding of probable cause. The defendants were held to the district court.

The indictment was returned on December 23, 1980, and the defendants were arraigned on January 9, 1981. Both defendants entered pleas of not guilty. The parties were ordered to hold a pretrial conference pursuant to our local Rule 2.04 (a self-executing rule which requires the parties to turn over all discovery materials which would be appropriate under Fed.R. Crim.P. 16 and Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215) within 5 days after arraignment. The order also provided that any pretrial motions were to be filed by January 19, 1981, and the case was set for a status report on February 3, 1981.

On January 21, 1981, Attorney DeMeo filed five separate motions on behalf of the defendant Vague. They were as follows:

1. "Motion to Discover Use of Electronic Devices." This motion, which is described in its title, sought information which the government was already required to turn over pursuant to our Local Rule 2.04. As noted later in this opinion, the government was willing to produce the tape recordings and apparently had already done so.

2. "Motion for Discovery and Inspection." This was a boilerplate motion seeking discovery of the items the government is required to turn over pursuant to Rule 2.04, such as evidence favorable to the defendant and any written statement of the defendant. The motion also requested items the government is rarely required to produce and are routinely denied, e. g., a written list of the names and addresses of all prospective government witnesses.

3. "Motion to Inspect Grand Jury Minutes." The principal purpose of this motion, consisting of a little over one page, was ". . . to determine whether there was in fact the requisite number of Grand Jurors concurring in the findings of the true bill under Rule 6(e) of the Federal Rules of Criminal Procedure. . . ." The motion set forth no grounds for believing that there was any irregularity in the Grand Jury proceeding, nor any other reason which would justify making an exception to the usual rule of Grand Jury secrecy.

4. "Motion to Dismiss Indictment." The best way to describe this motion is to quote it in its entirety:

The indictment in this case was more than sufficient to meet the pleading requirements of Rule 7(c)(1), Fed.R.Crim.P., which states that an indictment "shall be a plain, concise and definite written statement of the essential facts constituting the offense charged. . . ." Count I alleges the conspiracy in more detail than would be necessary, and each of the substantive counts alleges in specific terms that on a particular date the defendants possessed described property which had been stolen from foreign shipments, knowing it to have been stolen. The motion to dismiss was entirely specious. That there was obviously no argument to be made in support of the motion may explain why Mr. DeMeo ignored our local criminal rule 2.05(c), which requires that all contested motions be "accompanied by a short, concise brief in support of the motion, together with citations of authority." No brief was filed in support of any motion.

It may be significant that none of these motions was ever served on the government. Mr. DeMeo simply filed them in the Clerk's office. When the attorney for the government appeared at the status call on February 3, he was surprised to learn, when informed by the court, that motions had been filed. Mr. Louis Aldini, an associate of Mr. DeMeo, appeared on that date because Mr. DeMeo was out of town. The status call as to the defendant Vague was continued until February 5. At the status call of February 3, the defendant McDermott entered a plea of guilty to Counts I and IV of the indictment. The plea was pursuant to a written agreement whereby the government undertook to dismiss the remaining counts against McDermott, and, for his part, McDermott agreed to cooperate with the government in any investigation of the case. His cooperation was to "include his truthful testimony if called upon to testify, before any federal grand jury and United States District Court proceeding." The case as to McDermott was referred to the Probation Office and set for sentencing on March 13, 1981. Trial of the defendant Vague was set for February 17, 1981.

On February 5, the case was called again as to the defendant Vague. Mr. DeMeo stated that all discovery he desired had been furnished by the government. The three discovery motions, as well as the motion to dismiss the indictment, were thereupon denied.

On February 11, the government filed a motion to continue the trial date for defendant Vague from February 17 to March 16 due to the engagement of government counsel. The government also requested that the time the defense motions had been pending — January 21 to February 5 — be excluded under the Speedy Trial Act. The motions were allowed without objection.

By March 16, the parties had entered into a written plea agreement for Vague similar to that of McDermott, and on that date Vague entered a plea of guilty to Counts I and V of the indictment. His case was referred to the Probation Office for a pre-sentence investigation and sentencing was set for April 23.

It is customary in this district for the presentence report of the Probation Office to describe the defendant's assets and liabilities, including, among the latter, the amount of the fee he is paying his attorney. The presentence report in this case disclosed that Mr. DeMeo's fee was $12,000.00. The defendant had paid $11,000.00 and was intending to pay the remaining $1,000.00.

When the case was called for sentencing on April 23, 1981, I asked Mr. DeMeo to explain the basis for his $12,000.00 charge. He responded that when he had originally set the fee he had anticipated the case would go to trial. I inquired whether he believed that some adjustment was appropriate in view of the fact that there had been no trial. He replied that he did. I asked how much Mr. DeMeo thought the fee should be reduced, and he responded that he had not given the matter any thought. I then indicated that he should give the matter some thought and discuss it with his client and the client's father (who, it developed, had actually advanced the money). Sentencing was continued to May 12.

On May 12, Mr. DeMeo reported that he had decided to reduce the fee to $8,000.00. I stated that I believed $8,000.00 was too much for a plea of guilty and that a further reduction was necessary. Mr. DeMeo replied, "Your Honor, that is a matter between my client and myself," thus succinctly stating the issue with which this opinion deals. I expressed the view that the court has a responsibility in the matter and then proceeded to make inquiry as to the amount of time Mr. DeMeo, had spent on the case. All of the knowledgeable persons were before the court — Mr. DeMeo, the defendant, the defendant's father and the Assistant United States Attorney who had handled the case from the outset — and they all answered the questions put to them.

Mr. DeMeo stated that he had spent ten or twelve hours in conferences with his client, Steven Vague. Steven Vague said that he believed he had spent about eight hours in conference with Mr. DeMeo, and Steven's father said he had spent about 1 1/2 hours in conference with the attorney.

Mr. Robert J. Hackman, the Assistant United States Attorney, estimated that he had spent a total of 60 to 90 minutes with Mr. DeMeo, and Mr. DeMeo agreed. Mr. Hackman stated that he had turned over to Mr. DeMeo 37 sound tapes with playing time of 45 minutes each. Most of the tapes had been made before Vague had any conversations with the undercover agent and concerned only the defendant McDermott. Mr. DeMeo stated that he had listened to each of the tapes. This would be 27 3/4 hours playing time if he had listened to all of them. He stated he had spent at least an hour on each tape, which would come to 37 hours.

Mr. DeMeo said he had spent 3 to 4 hours in connection with the appearances before the magistrate for the setting of bond and the preliminary hearing. There were six appearances before the district court, and my own estimate is that this would have involved another 3 to 4 hours. No estimate was given for the time spent preparing the four pretrial motions referred to above. Mr. DeMeo stated that he had no time records and that his estimates were necessarily approximate. At the conclusion of this colloquy, I took the matter of Mr. DeMeo's fee under advisement and proceeded to impose sentence.

The value of legal services is not, of course, a simple function of the time spent by the attorney. Other factors are involved, and I turn now to a discussion of whether the $8,000.00 fee is excessive when considered in the light of all relevant criteria.

The applicable standards for determining the propriety of Mr. DeMeo's fee are set forth in the Illinois Code of Professional Responsibility, which has been made a part of the disciplinary rules of the Illinois Supreme Court. These rules, derived largely from the disciplinary rules drafted by the American Bar Association and the Illinois State Bar Association, were adopted as rules of the Illinois Supreme Court effective July 1, 1980. Mr. DeMeo was admitted to the Illinois Bar in 1970 and enjoys his privilege to practice in this court by reason of his Illinois admission. This court has adopted no independent disciplinary standards.

Rule 2-106 of the Illinois Code of Professional Responsibility ("DR 2-106") ...