Jeffrey Stone, Labatt’s lead lawyer for settlement negotiations, told Radler that my potential representation of other orange juice claimants was an important issue for his clients to resolve in the negotiations over Grove Fresh’s claims.  They wanted me to agree not to represent other claimants.  I was unwilling to restrict my right to practice law, however.  By early November the negotiations had stalemated, and a rift had developed between Radler and me over how Grove Fresh should respond to the demand for a restriction on my right to practice law. (See §C, below.)

In the meanwhile, Judge Zagel issued an order denying the Coalition’s access claims.  His result-oriented ruling (see §F, below), coupled with his refusal to release the 90c5009 case file to the clerk of court (see §XXIII-Q, below) set the stage for the defendants to “buy” the sealed records after he entered the settlement negotiations. 

A. October 1-26: The fruitless settlement meetings; Radler’s demand for exclusive bargaining authority. 

Radler had four settlement meetings with defense counsel—on October 1, October 19, October 26, and November 4. 

At the October 1st meeting Radler opined that Grove Fresh’s case was worth $4 million, though he stopped short of making a formal demand for that amount.  To my recollection, defendants offered either $750,000 or $1 million to settle. 

On October 2, Radler demanded, and received from Mr. Troy, “full authority to conduct negotiations on behalf of Grove Fresh and to settle all of the orange juice cases.”

At one of the later October meetings Radler told Stone that Grove Fresh would not make any proposals regarding my involvement in other lawsuits, and that if the issue was important to the defendants, they would have to make the initial proposal. 

B. October 14, 1992: The Coalition’s motion for a ruling. 

In the meanwhile, on October 14, 1992, the Coalition presented a motion for a ruling by a date certain or for certification for interlocutory appeal of its refusal to rule.  Judge Zagel made the following comment:

Frankly, the matter had escaped my attention.  I frankly had assumed that it was not particularly urgent.  I will try to rule by writing no later than five weeks from today and I hope to do it earlier than that time. (emphasis added)

(10/14/92 Tr. of Proceedings, p. 3.)

C. November 4: The stalemate. 

After the November 4th meeting Stone told Radler that the defendants would make no more settlement offers until after a conference with Judge Zagel. The initial conference was scheduled for December 2, but Judge Zagel canceled at the last minute and rescheduled it to January 27. 

D. November 9-23: The dispute over the appropriate response to the demand for a restriction on my right to practice law.

By November 1992 Radler and I sharply disagreed over how to respond to the defendants’ demand for a restriction on my right to practice law. 

After researching the issue I concluded that I would have a conflict of interest if I negotiated with the defendants over a restriction on my practice prior to a settlement of Grove Fresh’s claims.  I concluded that a consulting agreement, negotiated after the settlement of Grove Fresh’s claims, was the only ethical way for the defendants to restrict my practice. G. Hazard, Jr. & W. Hodes, vol. 2, The Law of Lawyering §5.6:301.  A consulting agreement that established an attorney-client relationship between the defendants and me would, by virtue of the conflict of interest rules, bar me from representing consumers who had claims against the defendants.[1] 

In a memo dated November 9, 1992, I gave Radler my view of the conflict of interest problem.  I told him that I would not discuss any consulting arrangement with the defendants until after Grove Fresh’s claims were settled.  See In re Conduct of Brand, 10 P.3d 906, 918 (Or. 2000) (holding that Rule 5.6(b) prohibits a consulting agreement if made as a condition to, or in connection with, a settlement). 

I also told Radler that I would not consider a consulting arrangement even then, unless the defendants settled Grove Fresh’s claims for the full amount of Grove Fresh’s most recent demand of $4,000,000.  I took this position because I was concerned that a settlement for any lesser amount, coupled with a separate payment to me under the guise of a consulting fee, would subject me to conflict-of-interest charges.  See R. Rotunda & J. Dzienkowski, Legal Ethics: The Lawyer’s Deskbook on Professional Responsibility 2006-07 §5.6-2, pp. 977-78. 

Finally, I told Radler that while I believed that the settlement conference he had recently arranged with Judge Zagel was potentially useful, such a conference would be necessary only if the defendants insisted on settling Grove Fresh’s claims for less than the full amount of Grove Fresh’s current demand.  Therefore, I told Radler “[i]f the defendants proceed with such a conference, I will not thereafter entertain any proposals for a consulting agreement.” 

Radler refused to communicate my position to the defendants.  Because Grove Fresh had previously designated Radler as its exclusive agent for purposes of negotiating a settlement, I was not free to go over his head and tell the defendants myself.  However, I did notify Radler in a letter dated November 23, 1992, that his “authority to speak for me on any proposal that would directly or indirectly restrict my right to practice law, is hereby revoked.”[2] 

E. November 12: Radler’s knowledge of the law governing the discharge of contingent fee lawyers. 

Meanwhile, on August 12, 1992, in the unrelated case Grove Fresh Distributors Inc. v. New England Apple Products Co., No. 89c1115, the Seventh Circuit affirmed the jury’s $125,000 verdict for Grove Fresh.  After the mandate issued, Jeffrey Hines, whom Grove Fresh had discharged in November 1989 for a conflict of interest,[3] filed an Emergency Motion to Vacate and Disburse Funds Jointly to Plaintiff and Original Counsel.  His motion sought to enforce an alleged attorney’s lien on a portion of the proceeds.

On November 12, Dale Crider, Radler’s partner in the Grove Fresh litigation, filed Response to Emergency Motion to Vacate and Disburse Funds Jointly to Plaintiff and Original Counsel, in which Grove Fresh opposed Hines’s claim.  At p. 7, Crider made the following legal points regarding Illinois common law:

  • A contingent fee attorney who is discharged without cause has a claim in quantum meruit for the value of the services rendered up to the date of discharge.  In re Estate of Callahan, 144 Ill. 2d 32, 578 N.E.2d 985 (1991); Anderson v. Anchor Organization, 274 Ill. App. 3d 1001, 654 N.E.2d 675, 681 (1st Dist. 1995). 
  • A contingent fee attorney who is discharged for cause has no right to compensation.  See Rhoades v. Norfolk & Western Ry. Co., 78 Ill 2d 217, 227-28, 399 2d 969, 974 (1979) (“the rule in Illinois has been that the attorney is entitled to full contract fees if the dismissal was without cause.” (emphasis added).

In March 1993, Judge Hart ruled that Hines had been discharged for cause and denied his motion for an alleged lien. 

Radler’s knowledge of the rules governing the discharge of contingent fee lawyers is relevant to a letter he drafted for Mr. Troy’s signature on January 21, 1993.  The intent behind that letter, which is discussed below in §XXIII-E, became a pivotal issue in the post-settlement proceedings—whether Grove Fresh and I had an attorney-client relationship after January 21, 1993.

F. November 20, 1992: The ruling on the Coalition’s claims for access. 

In a five-page Memorandum Order dated November 20, 1992, (“11/20/92 Order”), Judge Zagel ruled on the Coalition’s access claims.  In a straightforward, discretionary ruling, he denied the Coalition’s claim for public access to discovery materials in 89c1113 and 90c5009.  The substance of this ruling holds no great significance to the estate’s claims and warrants no further discussion. 

The balance of the 11/20/92 Order was anything but straightforward. 

1. The omission to disclose the reason for the seal that would be articulated in the Contempt Order.

The 11/20/92 Order omitted to disclose the reason for sealing 90c5009 that the Contempt Order would articulate three years later—Zagel’s belief that “[Mr. Messina] would go to any lengths to try his case on the courthouse steps rather than in the courtroom itself,” and that I had a personal agenda “to hurt [the defendants] by disseminating information for the purposes of damaging them outside the walls of the courtroom.”[4] 

If this reason was truly the reason why Judge Zagel sealed 909c5009, it was dishonest for him not to disclose it in the 11/20/92 Order.  The omission to disclose this alleged reason precluded the Seventh Circuit from evaluating the legal and factual sufficiency of this purported reason in a timely manner. 

2. The omission to address facts and arguments adverse to Judge Zagel’s ultimate conclusion.

A principled decision, according to Judge Posner, is one that addresses the facts and issues in the case that are adverse to the opinion’s ultimate conclusion.[5]  By this measure, the 11/20/92 Order was unprincipled for omitting to address the following facts and issues presented in Grove Fresh’s briefs supporting the Coalition’s claims for access:[6]

  • The 11/20/92 Order omitted to address the procedural history of the emergency motion for the seal.  That history showed that in March 1991, Judge Zagel had rejected the grounds for the seal alleged by the defendants in August 1990, when the seal was first imposed.[7] 
  • The 11/20/92 Order omitted to address unchallenged evidence that 235 of the 238 paragraphs in the amended complaint came from public sources. (Three of the paragraphs included references to the Powell affidavit, which was in the public files as of the date the complaint was filed. See §XIV-D, above.)
  • The 11/20/92 Order omitted to address an unchallenged affidavit describing the negotiations over the 89c1113 Confidentiality Order.  The unchallenged testimony showed that defense counsel acceded to Grove Fresh’s demand that the Order not require the automatic sealing of papers that made references to business records designated as confidential. 

3. The publicly stated reasons for sealing the 90c5009 case file.

The 11/20/92 Order (at p. 3) gave three justifications for maintaining the seal on the 90c5009 case file all of which were problematic.[8] 

First, Judge Zagel stated that the seal “serve[d] to effectuate the purposes of the protective order entered in [89c1113],” implying that the 90c5009 complaint contained information subject to that order.  This justification was flawed in four respects:

  • It contradicted the defendants’ judicial admissions[9] that the 90c5009 complaint was based entirely on public information.[10] 
  • It contradicted Judge Zagel’s March 1991 finding that “the information used to [draft the 90c5009 complaint] was obtained from public agencies without help from the defendants or a court order.”[11] 
  • It ignored unrefuted evidence that 235 of the 238 paragraphs in the amended complaint came from public sources.
  • It ignored unimpeached testimony that the 89c1113 protective order neither required nor authorized the sealing of papers that referred to business records designated as confidential.  

Second, Judge Zagel stated that “the complaint … contains allegations which would, ifnot filed in court and ifuntrue, be libelous.”  This hypothetical finding implied that the complaint was not well-grounded in fact, in violation of Rule 11. 

This justification for the seal was belied by papers Grove Fresh had filed in support of its motion to overrule the objections to the time period for discovery, which Grove Fresh had called to the court’s attention during the briefing on the Coalition’s motions..  Those papers included statements of fact totaling 24 pages; the statements were supported by 100 specific citations to deposition transcripts and documents.[12]   

Third, Judge Zagel stated that “[t]he existence of the seal may have led some parties to believe that they could file papers containing discovery material that would not properly be put before the Court.”  The 11/20/92 Order did not cite any examples of this alleged problem, however.  To my recollection, none of the 90c5009 parties had ever complained that discovery materials had been filed improperly. 

4. The circular reasoning underlying the deferral of the Coalition’s law right of access to records that refuted the publicly stated reasons for the seal.   

In Smith v. U.S. District Court, 956 F. 2d 647, 650 (7th Cir. 1992), the Seventh Circuit defined the scope of the federal common law right of access to judicial records.  Smith held that the right of access is not limited to items admitted in evidence but extends to transcripts of proceedings and “materials on which a court relies in determining the litigants’ substantive rights.” 

Citing Smith, the 11/20/92 Order acknowledged (at p. 3) that the Coalition’s right of access “entitled [it] to certain documents in the file, those which are properly before the court upon which the court relied and of course, the court’s decision.” (emphasis added)  In order to grant that access, however, “the Court [would] have to consider which documents, or parts of documents, are or should be properly part of the record,” which Zagel was unwilling to do just yet: 

This is a process requiring time and effort which would not be spent wisely before this case comes to a conclusion in this Court. If this case is tried, intervenors will be able to see and hear all the evidence in the proceeding, and the need to consider relevance, materiality and admissibility twice--now and at trial--will be avoided. If this case is resolved short of trial, then the Court will rule, again only once, on what is properly in the record. Intervenors have... shown no reason why any disclosure is required now rather than later. (emphasis added)

The 90c5009 records that fell within the scope of the right of access defined by Smith, but which remained suppressed, included three sets of papers that, if disclosed, would have refuted the publicly stated reasons for the seal:

Set 1.   The 8/28/90 minute order granting the stipulated motion for leave to file under seal.  The judicial records underlying this order included (a) the 8/24/90 emergency motion in 89c1113 to require that the 90c5009 complaint be filed under seal, and (b) the 8/24/90 transcript of the hearing on that motion.

Set 2.   The 3/20/91 Memorandum Opinion and Order denying the motions to dismiss the amended complaint.  The judicial records underlying this order included the amended complaint, the motion to dismiss that complaint, and the briefs filed for and against that motion. 

Set 3.   The 7/23/92 minute order overruling the defense’s objections to the time period for discovery in 90c5009.  The judicial records underlying this motion included the briefs supporting and opposing the motion. 

The records in Set 1, if disclosed, would have identified the grounds for the seal that were alleged when the seal was first requested; the records in set 2, if disclosed, would have shown that those grounds were no longer viable because they had been realleged in support of the motion to dismiss and had been rejected by Judge Zagel. 

The records in Set 2 also included judicial admissions that the 90c5009 complaint was based on information in the public domain.[13]  If disclosed, these records would have refuted any claim that the 90c5009 complaint contained information subject to the 89c1113 protective order. 

The records in Set 3 outlined the evidence that, if disclosed, would have refuted the hypothetical finding that “the complaint … contains allegations which would, ifnot filed in court and ifuntrue, be libelous.”

G. December 14: The Coalition’s appeal from the 11/20/92 Order, and the unexplained problems with the record in that appeal.   

The Coalition filed a notice of appeal on December 14, 1992.  The next day, it filed a jurisdictional statement identifying two grounds for appellate jurisdiction—28 U.S.C. §1291, and the collateral order doctrine.  The statement cited two precedents for applying the collateral order doctrine to appeals by the press from orders denying the press access to court files. 

As of December 14-15, there was no docket for 90c5009.  Under normal circumstances, the clerk of court would have created a docket manually and transmitted it to the Court of Appeals along with the case file, under seal.[14]  For reasons that have never been officially explained, however, the clerk did not create a docket for 90c5009. 

[1]  Radler is the one who first introduced the idea of a consulting agreement as the answer to the defendants’ demand for a restriction on my practice.  He introduced the idea on September 29, 1992, when he first told me about their demand for a restriction. 

[2] The May 1990 Retainer Agreement created a joint venture between Radler and me.  In re Johnson, 133 Ill. 2d 516, 525-26, 552 N.E.2d 703, 707 (1989).  Consequently, Radler, as my co-venturer, had apparent authority to represent my interests during the settlement negotiations.

[3] Hines’s conflicted relationship with Grove Fresh is discussed in Memorandum 3-B §VII, and Memorandum 3-C, §IX-E.

[4] 888 F. Supp. at 1430.

[5] R. Posner, The Federal Courts: Challenge and Reform 351-52 (1995).

[6] The briefs supporting the Coalition’s claims for access are summarized above in §§XIX-A-4, 9, 11.

[7] See Memorandum No. 3-C, §XIX-G-2.

[8] Grove Fresh had disputed each of these three reasons during the briefing on the Coalition’s motion, but, as we just noted, the 11/20/92 Order didn’t acknowledge Grove Fresh’s contentions, much less address the facts Grove Fresh marshaled in support of them.

[9] “Judicial admissions” are statements of fact made in papers filed with the court.  Unlike admissions made in out-of-court statements, judicial admissions are binding and may not be controverted.  Cleary & Graham’s Handbook of Illinois Evidence §802.11 (5th ed. 1990). 

[10] The defendants had made these admissions twice—in the fall of 1990, when they moved to dismiss the complaint (see Memorandum 3-C, §XVI-F) and in June 1992, when the 89c1113 defendants filed the Rule 11 motion that Judge Zagel had invited them to file.  See Memorandum 3-C, §XXI-H.

[11]  Judge Zagel made this finding in the Memorandum Order denying the defendants’ motions to dismiss the amended complaint. See Memorandum 3-C, §XIX-G-1.

[12] See §XIX-B, above.

[13] See, e.g., 10/2/90 Memorandum of American Citrus Products Corp. In Support of its Motion to Strike the Complaint as an Unauthorized and Prejudicial Amendment, p. 10 (“the information that is contained in the [90c5009] complaint was drawn from public sources of information.”); 1/16/91 Everfresh Inc.'s Reply Memorandum in Support of its Motion to Dismiss the Complaint, p. 10 (“the information used to [draft the 90c5009] RICO claims was obtained from public agencies without help from the defendants or a court order and therefore was available at the time the original complaints were filed.”)

[14] See Memorandum 3-C, §XVII-C.