Attorney Grievance Commission of Maryland v. Rheinstein

Filing 86

MEMORANDUM AND ORDER RE: REMAND Granting 68 Emergency Motion to Remand to State Court. Signed by Judge Marvin J. Garbis on 9/20/2017. (bas, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

ATTORNEY GRIEVANCE
COMMISSION OF MARYLAND

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Plaintiff

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VS.

* CIVIL ACTION NO. MJG-17-2550

JASON EDWARD RHEINSTEIN

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Defendant
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MEMORANDUM AND ORDER RE: REMAND
The Court has before it Plaintiff Attorney Grievance
Commission of Maryland’s Motion to Remand for Lack of Federal
Jurisdiction [ECF No. 68] and the materials submitted relating
thereto.

The Court has held a telephonic hearing and has had

the benefit of the arguments of counsel.

I.

BACKGROUND
This Court has previously granted a Motion to Remand in

this case.

Attorney Grievance Commission of Maryland v.

Rheinstein, Civ. No. MJG-16-1591, ECF No. 30 (Mar. 17, 2017)
(“First Remand Order”).

Defendant alleges that the existence of

new facts warrant the filing of a successive Notice of Removal.
The underlying cause of action remains the same.

On

February 17, 2016 the Attorney Grievance Commission of Maryland
(“AGC”) filed, in the Maryland Court of Appeals, a Petition for

Disciplinary of Remedial Actions against Jason Edward Rheinstein
(“Rheinstein”).

On February 19, 2016, the Court of Appeals of

Maryland transmitted the Petition to the Circuit Court for Anne
Arundel County to hold a judicial hearing pursuant to Maryland
Rule 16-757.
On May 23, 2016, Rheinstein filed his first Notice of
Removal, contending that this Court can exercise subject matter
jurisdiction over the case under 28 U.S.C. § 1441 (federal
question jurisdiction) and 28 U.S.C. § 1442 (federal officer
jurisdiction).

Civ. No. MJG-16-1591, ECF No. 1.

AGC filed a

Motion to Remand, which this court granted on March 17, 2017.
In its First Remand Order, this Court found no federal
jurisdiction based on a federal question, no jurisdiction based
on federal officer standing, and that federal abstention
principles favored a remand.

Following the Order, trial was set

in the Circuit Court for Anne Arundel County for September 5,
2017.
On Friday, September 1, 2017, Rheinstein filed a second
Notice of Removal in this Court, contending that AGC’s recent
interrogatory responses and deposition testimony gave rise to
new and different grounds for removal.
ECF No. 1.

Notice of Removal ¶ 4,

The state court proceeding was stayed on September

5, 2017, the next business day.

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In this instant motion, the AGC once again seeks remand for
lack of federal jurisdiction.

II.

JURISDICTIONAL PRINCIPLES
The party invoking federal jurisdiction has the burden of

establishing that removal is proper and that the Court has
subject matter jurisdiction.

Mulcahey v. Columbia Organic

Chemicals Co., 29 F.3d 148, 151 (4th Cir. 1994).

Removal

statutes should be strictly construed, and if “federal
jurisdiction is doubtful, a remand is necessary.”

Id.

Indeed,

a federal court is to “presume . . . that a case lies outside
its limited jurisdiction unless and until jurisdiction has been
shown to be proper.”

United States v. Poole, 531 F.3d 263, 274

(4th Cir. 2008) (emphasis in original).
“A successive removal petition is permitted only upon a
‘relevant change of circumstances’ — that is, ‘when subsequent
pleadings or events reveal a new and different ground for
removal.’”

Reyes v. Dollar Tree Stores, Inc., 781 F.3d 1185,

1188 (9th Cir. 2015) (emphasis in original).

The phrase

“different grounds” can mean “a different set of facts that
state a new ground for removal” or “new facts in support of the
same theory of removal.”

Cain v. CVS Pharmacy, Inc., 2009 WL

539975, at *2 (N.D.W. Va. Mar. 4, 2009).

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Even if there is federal jurisdiction, federal courts must
abstain from interfering in state proceedings “absent
extraordinary circumstances.”

Middlesex Cty. Ethics Comm. v.

Garden State Bar Ass’n, 457 U.S. 423, 431 (1982).

If an ongoing

state proceeding exists, “‘reinstituting the action in the
federal courts’ is impermissible; indeed to do so would involve
a loss of time and duplication of effort.”

Telco Commc'ns, Inc.

v. Carbaugh, 885 F.2d 1225, 1228 (4th Cir. 1989).

III. DISCUSSION
Rheinstein has failed to establish a new and different
basis for his second attempt at removal under either the federal
officer or federal question doctrines.

Moreover, even if the

Court were to have jurisdiction, the Court would abstain and
remand the case to state court so that the trial may proceed.
A.

Federal Question Jurisdiction

Under 28 U.S.C. § 1331, to determine whether federal
question jurisdiction exists, a court must look to the complaint
to decide whether the cause of action is created by federal or
state law.

Mulcahey, 29 F.3d at 151.

If the cause of action is

created by state law, “federal question jurisdiction depends on
whether the plaintiff’s demand ‘necessarily depends on

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resolution of a substantial question of federal law.’”

Id.

(emphasis in original).
This Court has already found that the instant suit presents
claims arising under the Maryland Lawyer’s Rules of Professional
Conduct (“MLRPC”), and that the Maryland Court of Appeals is the
“ultimate arbiter” of claims against attorney misconduct in the
State of Maryland.

First Remand Order at 3-4.

The Maryland

Court of Appeals “has original and complete jurisdiction over
attorney discipline proceedings in Maryland.”

Attorney

Grievance Comm'n of Maryland v. O'Leary, 433 Md. 2, 28 (2013).
Thus, the cause of action is created by state law.

The fact

that some of Rheinstein’s alleged unethical actions occurred in
a number of federal cases “does not render the instant case one
presenting claims based upon federal law.”

First Remand Order

at 4.
However, Rheinstein argues that this second Notice of
Removal “presents different grounds for removal” based on (1)
AGC’s responses to Defendant’s interrogatories, and (2) AGC’s
corporate deposition testimony from August 7, 2017.

Notice of

Removal ¶¶ 4, 28, ECF No. 1.
First, Rheinstein argues that AGC’s interrogatory responses
show that AGC intends to litigate a federal qui tam case in
state court.

Specifically, AGC’s response to Interrogatory No.

19 incorporates a document entitled “Petitioner’s Schedule A,”
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which provides a list of Averments stating details about when
and how Rheinstein allegedly violated MLRPC rules.
at 16, ECF No. 1-4.

ECF No. 1-3

Rheinstein contends that seven of these

Averments in Schedule A raise questions of federal law which
render his case removable to federal court:
36, 54, 56, 57, 66, and 67.

Averment Nos. 32,

Def.’s Opp. to Mot. for Remand at

9, ECF No. 76.
These Averments list instances in which Rheinstein was
alleged to have frivolously filed a suit in violation of MLRPC
Rule 3.1.1

For example, Averment No. 32 states that Rheinstein

filed United States of America Ex rei. Charles E. Moore v.
Cardinal Financial Company, L.P et al. (“Qui Tam I”), in
violation of MLRPC 1.1, 3.1, 8.4(a) and 8.4(d), and Averment No.
36 states that Rheinstein filed United States of America ex rei.
Charles E. Moore v. Robert S. Svehlak, et al. (“Qui Tam II”), in
violation of the same provisions.

Id.

Rheinstein argues that these Averments do not provide any
information about the bases for ACM’s allegations regarding
these qui tam cases.

Rather, he concludes, these Averments can

only “conclusively establish” that “Plaintiff is actually making
claims about the merits of those [qui tam] cases.”
Removal ¶ 26, ECF No. 1.

Notice of

Under Rheinstein’s reasoning, “[a]

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MLRPC Rule 3.1 states that “[a]n attorney shall not bring . . .
a proceeding, or assert or controvert an issue therein, unless
there is a basis for doing so that is not frivolous.”
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claim that an action is ‘frivolous’ or violates MLRPC 3.1 is
inherently a claim about its merits.”

Id. at 17 n 21.

Thus, he

argues that Schedule A and the response to Interrogatory No. 19
necessarily show that ACG is inappropriately attempting to
litigate a federal qui tam action in state court.2

Id. ¶ 26.

Second, Rheinstein offers corporate deposition testimony
from AGC purporting to show that AGC intended to litigate the
merits of a federal qui tam action in state court.
to Mot. for Remand at 12-13, ECF No. 76.

Def.’s Opp.

Rheinstein quotes

testimony in which AGC’s corporate designee, when asked about
the “facts” that rendered the filing of the attorney misconduct
complaint, referred to the “facts as provided in the pleadings”
of the Qui Tam I action.

Id. at 13.

Thus, Rheinstein reasons,

AGC is “asserting [that] the filing of Qui Tam I violated MLRPC
3.1,” and that AGC’s testimony conclusively established that it
is “seeking to litigate the merits of Qui Tam I because there is
no way that Plaintiff can prove its claim . . . unless Qui Tam I
was ‘frivolous.’”

Id. at 15.

Rheinstein’s attempt to conflate his attorney misconduct
proceeding with the underlying federal cases is improper.

The

Averments referenced in the interrogatory responses and Schedule
A simply allege that the filing of the qui tam actions is part

2

The same argument appears to apply for the remainder of the
Averments at issue. ECF No. 1 at ¶ 34-42; ECF No. 76 at 9-11.
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of the conduct constituting a violation of several MLPRC Rules,
including the rule regarding frivolous pleadings by attorneys.
Attorney misconduct proceedings do not litigate the merits
of the underlying cases that gave rise to those proceedings.
Indeed, courts are able to evaluate whether a filed claim is
frivolous without making a ruling on the merits of the
underlying case, and without providing a remedy to the parties
in that case.

See, e.g., Attorney Grievance Comm'n of Maryland

v. Ucheomumu, 450 Md. 675, 711 (2016) (finding a violation of
MLRPC 3.1 without resolving the underlying defamation
litigation); Attorney Grievance Comm'n v. Worsham, 441 Md. 105,
128 (2014) (finding a violation of MLRPC 3.1 without resolving
the underlying tax litigation).
AGC argues that the Averments simply “correlate the factual
allegations in the Petition with the Rules of Professional
Responsibility and identify the cases[] in which violations are
alleged to have occurred.”
1.

Pl.’s Mem. Of Law at 6, ECF No. 68-

Moreover, AGC argues, the Averments are presented to

“establish a course of conduct by which the Respondent used the
threat of lawsuits and the filing of [the] same as leverage to
attempt to obtain settlement funds.”
5, ECF No. 70.

Pl.’s Supp. Mem. Of Law at

See also Pl.’s Reply Mem. at 2-3, ECF No. 81.

According to AGC, the Averments are part of a story, and
allegedly show specific instances in which Rheinstein “exceeded
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the bounds of zealous advocacy” by “filing multiple meritless
motions, filing multiple qui tam actions . . ., threatening to
sue a law firm, threatening to file a complaint with the
Attorney Grievance Commission if an appeal was not dropped,
repeatedly filing motions that did not comply with the Rules,
accusing counsel of unethical conduct and then suing him and
using coercive and offensive means in an attempt to effect a
settlement.”3

Pl.’s Reply Mem. at 4, ECF No. 81.

The plain purpose of these Averments is to demonstrate the
existence or pattern of attorney misconduct, not to litigate the
merits of a federal qui tam action.4

To follow Rheinstein’s

reasoning would mean that state courts would not be able to
exercise jurisdiction over most, perhaps all, alleged attorney
misconduct where the misconduct occurred in relation to
proceedings in federal court.
Rheinstein also argues that his claims present a federal
question because the interpretation and application of state
ethical rules in federal court is a question of federal law,

3

Rheinstein’s argument that each of these Averments constitutes
a distinct claim that should be evaluated for separate federal
jurisdiction is irrelevant. ECF No. 76 at 2. The Court does
not find federal jurisdiction in any of the seven Averments.
4
Rheinstein also argues that because the Qui Tam I case is
supposedly “pending,” ACM’s decision to bring a disciplinary
proceeding prior to its conclusion is a “transgression from its
own policy of abjuring involvement in on-going litigation.” ECF
No. 1 at ¶ 27. This argument is irrelevant to the analysis of
whether a federal question exists in the instant case.
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citing In Re Snyder, 472 U.S. 634, 645 (1985).
on this case is unavailing.

But his reliance

In Re Snyder involved a federal

court disciplining a lawyer under Rule 46 of the Federal Rules
of Appellate Procedure – a federal court sanction.

It did not

involve a state attorney disciplinary agency petitioning a
lawyer under the state’s own professional conduct rules.

The

case simply states that a federal court should look to federal
standards for issuing federal sanctions.

It does not remove a

state court’s ability to rely upon its own professional
responsibility rules and interpretations for disciplining its
own attorneys.

See Attorney Grievance Comm. v. Pak, 400 Md.

567, 600 (2007); see also Md. Rule 19-308.5 (“[A]n attorney
admitted by the Court of Appeals to practice in this State is
subject to the disciplinary authority of this State, regardless
of where the attorney’s conduct occurs.”).
Finally, Rheinstein argues that with regard to the Qui Tam
I and Qui Tam II cases, he has federal defenses relating to
“procedural due process, substantive due process, and equal
protection.”

Notice of Removal ¶ 46, ECF No. 1.

However, “’a

case may not be removed to federal court on the basis of a
federal defense’ . . . even if the complaint begs the assertion
of the defense” and even if “the defense is the only question
truly at issue in the case.”

Pinney v. Nokia, Inc., 402 F.3d

430, 446 (4th Cir. 2005), citing Franchise Tax Bd. of State of
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Cal. v. Constr. Laborers Vacation Tr. for S. California, 463
U.S. 1, 13 (1983).
Accordingly, the Court does not have federal question
jurisdiction over the instant case.
B.

Federal Officer Removal

Under 28 U.S.C. § 1442(a), a “civil action or criminal
prosecution” may be removed to federal court when filed against
“any officer (or any person acting under that officer) of the
United States or of any agency thereof, in an official or
individual capacity, for or relating to any act under color of
such office . . . .”
For reasons discussed more fully in the First Remand Order,
this Court has found that it does not have federal officer
jurisdiction over the instant case.

First Remand Order at 5-6.

In short, Rheinstein’s role as a relator in the qui tam actions
cannot be equated to that of a federal prosecutor or federal
agent taking direction from a Government officer.

Id. at 6.

For the same reasons, his role in assisting a “Bankruptcy
Trustee” in Bankruptcy Court is also insufficient to confer
federal jurisdiction.

Def.’s Opp. to Mot. for Remand at 23, ECF

No. 76.
Rheinstein’s attempt to revive this federal officer removal
argument does not rest on a different basis for removal, nor

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does it contain new facts that would now support the prior
theory of removal.

Cain, 2009 WL 539975, at *2 (N.D.W. Va. Mar.

4, 2009).5
Accordingly, the Court does not have federal question
jurisdiction over the instant case.
C.

Federal Abstention Principles

For reasons discussed more fully in the First Remand Order,
even if this Court were found to have the ability to exercise
jurisdiction over the instant case, it would abstain to exercise
that jurisdiction because of the State’s “extremely important
interest” in “maintaining and assuring the professional conduct
of the attorneys it licenses.”
U.S. at 433-34.

Middlesex Cty. Ethics Comm., 457

So long as Rheinstein’s claims can be

determined in state proceedings, and “so long as there is no
showing of bad faith, harassment, or some other extraordinary
circumstance that would make abstention inappropriate,” the
federal courts should abstain.6

Id. at 435.

5

Rheinstein’s reliance on Kolibash is unavailing. In Kolibash,
the 4th Circuit held that removal to federal court in an attorney
discipline proceeding was proper because it was brought against
a U.S. Attorney and implicated a “colorable claim of [official]
immunity.” Kolibash v. Comm. on Legal Ethics of W. Virginia
Bar, 872 F.2d 571, 575 (4th Cir. 1989). Kolibash does not stand
for the proposition that all attorney discipline proceedings are
removable to federal court.
6
That AGC withdrew its abstention argument in the supplemental
briefing does not bear on whether this Court can rely on
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No extraordinary circumstances exist in this case, and no
new allegations have been raised to change the Court’s prior
conclusion that it should abstain and remand the case.

See

First Remand Order at 7-8.
Indeed, the case for abstention is stronger on this second
Motion to Remand because exercising jurisdiction now would
involve a severe “loss of time and duplication of effort.”
Telco Commc'ns, Inc., 885 F.2d at 1228.

Defendant’s instant

Notice of Removal was filed on 11:49 PM on Friday, September 1,
2017, before the Labor Day holiday.

Trial was set to begin in

state court the very next business day, Tuesday, September 5,
2017.

To restart all proceedings in federal court on the eve of

trial would result in a waste of judicial and party resources.
Accordingly, even if this Court has federal jurisdiction,
this Court will apply federal abstention principles to abstain
from exercising jurisdiction.

abstention principles to decline to exercise jurisdiction in
this case, even if jurisdiction exists. ECF No. 70 at 13.
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IV.

CONCLUSION
For the foregoing reasons:
1. Plaintiff Attorney Grievance Commission of Maryland’s
Motion to Remand for Lack of Federal Jurisdiction [ECF
No. 68] is GRANTED.
2. By separate Order the Court shall remand the case to
state court.

SO ORDERED, on

Wednesday, September 20, 2017

/s/__________
Marvin J. Garbis
United States District Judge

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