In the
United States Court of Appeals
For the Seventh Circuit

No. 98-4051

Sylvia A. Lipson,

Petitioner-Appellant,

v.

United States of America,

Respondent-Appellee.



Appeal from the United States District Court
for the Southern District of Illinois.
No. 97-CV-891-WDS--William D. Stiehl, Judge.


Argued April 26, 2000--Decided November 7, 2000




  Before Bauer, Rovner, and Diane P. Wood, Circuit
Judges.


  Diane P. Wood, Circuit Judge. Sylvia Lipson,
along with a number of other people, was charged
and convicted of conspiring to distribute crack
cocaine in violation of 21 U.S.C. sec. 846 and of
using her home to store and distribute crack
cocaine in violation of 21 U.S.C. sec. 856. She
received stiff sentences for those convictions,
of 360 months and 240 months respectively, which
run concurrently. After both her convictions and
sentences were affirmed on direct appeal, see
United States v. Smith, 26 F.3d 739 (7th Cir.
1994), she filed the present motion under 28
U.S.C. sec. 2255. (The case was remanded on other
grounds, see 26 F.3d at 760, and later affirmed
on a subsequent appeal. United States v. Smith,
No. 96-2724, 1997 WL 58804 (7th Cir. Feb. 7,
1997).)


  Her argument for relief has shifted during the
course of these proceedings, but it is very
generally an ineffective assistance of counsel
claim based on conflict of interest. We conclude
that, under the circumstances, further
proceedings are necessary in the district court
before it will be possible for that court to
decide whether Lipson’s Sixth Amendment rights
were violated because her lawyer was paid by one
of her co-defendants.

I


  The underlying basis for Lipson’s claim of
ineffective assistance rests on her allegation
that her representation was tainted by a conflict
of interest because of the relationship between
her lawyer and her co-defendant, Greg Collins.
Collins was the ringleader of the conspiracy.
Lipson (whose version of the facts on these
points we accept, given the lack of an
evidentiary hearing) was an indigent single
parent. She was romantically involved with, and
habitually battered by, Collins. Eventually,
Lipson, Collins, and eight other individuals were
charged in the multi-count indictment that
produced the convictions Lipson is now trying to
challenge.

  A careful reading of the original pro se sec.
2255 motion that Lipson filed reveals that she
raised two complaints about her representation at
trial that related to conflicts of interest.
Specifically, her motion made the following
assertions:

This request [i.e. for an order appointing
counsel and setting an evidentiary hearing on the
sec. 2255 motion] to the court is based on the
ineffective assistance of counsel, namely, Ricky
Black. Black should not have been allowed to
represent Collins and Lipson, due to the conflict
of interest and others violations of
Constitutional and Due Process Rights. Lipson
simply did not have the ’baggage" that Collins
and the other conspriators [sic] were found
guilty or convicted.

Black was paid his attorneys fees by Collins who
was interested in controlling the defense in his
favor in this case.

Other portions of the same memorandum make it
clear that she was asserting that Collins had
selected Black to be her lawyer and that he was
paying Black, so that he could control Lipson’s
representation. Her motion also raised numerous
other grounds for relief, including recanted
testimony of a witness, the government’s failure
to prove that the substance was really crack, a
claim that her sentence should be reduced because
she had been abused, and so on.


  We focus here on the ineffective assistance
claim, because this is the only one on which a
certificate of appealability has been granted.
This court granted that certificate after the
trial court denied Lipson’s request, and it
identified the following issue for appeal:
"Whether trial counsel was ineffective due to a
conflict in representing both petitioner and her
co-defendant, Greg Collins." We also appointed
appellate counsel for Lipson.


  Unfortunately, the precise theory of ineffective
assistance identified in our certificate of
appealability does not appear to have been the
theory--or at least the only theory--before the
district court, as Lipson’s original motion
demonstrates. Furthermore, it is clear from a
reading of the district court’s opinion that the
judge understood what Lipson was trying to say.
After rejecting a number of specific instances of
ineffective counsel that Lipson had alleged, that
related to failures to investigate her claim or
to communicate with her, the court wrote the
following:


  Petitioner further alleges that counsel had a
conflict of interest. Specifically, petitioner
argues that counsel neglected her interests to
benefit a co-defendant, Gregory Collins, her boy
friend and co-defendant who paid for attorney’s
fees.

Lipson v. United States, No. 97-CV-891-WDS, Mem.
& Order at 6 (S.D. Ill. August 26, 1998). After
reciting the standard established by Strickland
v. Washington, 466 U.S. 668 (1984), and noting
that Lipson was relying on Strickland rather than
Cuyler v. Sullivan, 446 U.S. 335 (1980) (which
would have permitted her to demonstrate an actual
conflict of interest which, if shown, would have
lightened the burden of demonstrating ineffective
assistance), the court rejected her argument with
the following explanation:

. . . To demonstrate prejudice [under
Strickland], petitioner must demonstrate that
counsel’s errors were so serious as to deprive
her of a fair trial, that is, of a trial whose
result is reliable. . . . At trial, the
government provided extensive evidence
demonstrating petitioner’s deep involvement to
amply support her conviction. . . . Her counsel
certainly participated in the trial on her
behalf, not on behalf of any co-defendant. This
case involved a joint defense of a lack of
conspiracy. That commonality does not rise to the
level of conflict.


  Similarly, the mere fact that a co-defendant
footed the bill for her defense counsel does not,
in and of itself, create a conflict of interest.
This is not a situation like that presented in
Stoia [v. United States, 109 F.3d 392 (7th Cir.
1997)] or similar conflict cases. The Court finds
that petitioner’s claims of conflict are wholly
unsupported by the record.

Lipson, Mem. & Order at 7.


  It is therefore clear that, until the
certificate of appealability issued from this
court, everyone knew that this case was about the
type of conflict that can arise when one
co-defendant retains, pays, and controls the
lawyer representing another co-defendant.
Unfortunately, matters became confused in part
because of our order and in part because counsel
for Lipson must not have investigated the record
very carefully. Lipson’s opening brief in this
court relies solely on the proposition that the
issue was joint representation of her and
Collins. The government correctly responded in
its brief that the record clearly showed that no
such thing occurred. Lipson was represented by
attorney Richard R. Black, of East St. Louis,
Illinois, while Collins was represented by
attorney Robert H. Rice of Belleville, Illinois
at the pre-trial, trial, and appellate stages,
and attorney Burton H. Shostak of St. Louis,
Missouri, after remand and on the new appeal.
Lipson’s reply brief concedes the error, in
effect, and argues that her right to effective
counsel was nonetheless infringed by the
financial arrangements between Collins and Black.

  There is plenty of blame to spread around for
this confused state of affairs, but none of it in
our view properly goes to Lipson. In fact, the
government fully briefed the question whether
Black labored under a conflict of interest
because of the fact that Collins paid for his
services to Lipson, and Lipson’s appointed
counsel also briefed that issue (albeit in the
reply brief). In these somewhat unusual
circumstances, we think it best to expand the
certificate of appealability to include the
actual conflict theory Lipson originally alleged,
the district court decided, and the parties
addressed. We hereby do so, and now turn to the
merits of this claim.

II


  As we recently explained in Cabello v. United
States, 188 F.3d 871 (7th Cir. 1999), defendants
who wish to raise claims of ineffective
assistance of counsel based on conflicts of
interest may proceed under either of two
theories. If the defendant can establish that the
trial judge knew or should have known that a
potential conflict of interest existed, then we
presume that the defendant was prejudiced by that
conflict if the judge made no inquiry into it.
Id. at 875. If, on the other hand, the trial
judge was not put on notice of a potential
conflict, we will find prejudice "only if the
defendant demonstrates that her counsel actively
represented conflicting interests and that the
conflict adversely affected the counsel’s
performance." Id., citing Cuyler, 446 U.S. 335,
350 (1980).


  Both parties claim that Cabello entitles them
to prevail, and so we take a moment to review the
facts and holding of that case. In Cabello, the
petitioner (Maria Cabello) argued that her trial
counsel provided ineffective assistance because
he had been retained and paid by her boyfriend,
the alleged ringleader of the drug conspiracy in
which she was accused of participating. Like
Lipson, Cabello also argued that her indigence
should have put the district court on notice of
the likelihood that the boyfriend was paying for
the lawyer, when the lawyer showed up ready to
participate in the proceedings without any
request for granting Cabello IFP status.
Importantly, the court considering Cabello’s sec.
2255 motion held an evidentiary hearing on her
allegations at which it heard testimony from both
Cabello and the retained lawyer. On this record,
we concluded in Cabello that there was nothing
that should have alerted the trial court to the
potential for a conflict, and that nothing in the
record indicated that Cabello had been actually
prejudiced by her lawyer’s performance.


  We see no distinction between Cabello’s case
and Lipson’s with respect to the first of these
points. As far as the trial court knew, Lipson
and Collins were represented by different
lawyers, and the judge specifically found in his
sec. 2255 memorandum and order that Lipson’s
lawyer gave her adequate representation. Lipson
suggests that the court should have seen red
flags in the facts that she and Collins were
being tried together, that they had a romantic
relationship, and that Collins had abused her in
the past--all of which were known at the time of
trial. But we see no reason why the existence of
the romantic relationship should have triggered
the thought that Collins was paying for Lipson’s
lawyer, much less why a history of abuse should
have supported such an inference. We must turn,
therefore, to the second question identified in
Cabello--whether Lipson can show an actual
conflict of interest and an adverse effect on her
representation, and, in her case, whether the
district court abused its discretion in failing
to hold a hearing to explore these points./1


  Lipson alleged in her motion that Black allowed
Collins to dictate her legal defense because
Collins was paying his fees. If true--and because
there was no hearing we must assume that it is--
this would be enough to demonstrate an actual
conflict of interest. Stoia v. United States, 22
F.3d 766, 771 (7th Cir. 1994) ("An actual
conflict of interest results if the defense
attorney was required to make a choice advancing
his own interests to the detriment of his
client’s interests." (Quotations and citation
omitted.)). See also Ciak v. United States, 59
F.3d 296, 307 (2d Cir. 1995).


  But demonstrating the actual conflict is not
enough by itself. Lipson must also show that
Black’s conflict adversely affected his
performance. She must suggest something that he
did that he should not have done, or something
that he failed to do that should have been done,
that had a negative impact on her case. To the
extent she implies that Black should have raised
the point that she was effectively under
Collins’s control and thus not responsible for
her actions in furtherance of the conspiracy, our
examination of the record shows that he did bring
out this evidence. At trial, Black argued that
Lipson was an unwilling participant in the
conspiracy--the precise theory of innocence that
she is now asserting in her sec. 2255 motion. She
was entitled to put this argument before the
jury, and in fact, the jury evidently took it
quite seriously. At one point during its
deliberations, the jury sent a note to the trial
judge explaining that they felt that Lipson had
participated in the conspiracy "only because of
love, fear, and concern for her children," and
"in much the same way one would be [willing] with
a knife to their throat." The jury asked in its
note whether this concern was sufficient reason
to find a reasonable doubt, but the judge
responded without objection from Black that it
was to follow the instructions that had already
been given. See Smith, 26 F.3d at 748.

  The record reveals that those instructions did
not include a possible duress defense. Instead,
counsel tendered an instruction defining the term
"willful" for the jury, which would have told
them that willfully means voluntarily and
intentionally acting with bad purpose either to
disobey or disregard the law. The judge rejected
that instruction, but that was not counsel’s
fault. Furthermore, we note that duress is an
extremely difficult defense on which to succeed.
Counsel’s decision to try to use Collins’s
overbearing influence on Lipson as a way of
negating Lipson’s criminal intent was a
respectable strategy, and one that might have
succeeded. See United States v. Madoch, 149 F.3d
596, 598-600 (7th Cir. 1998). See also United
States v. Fiore, 178 F.3d 917, 922 (7th Cir.
1999); United States v. Otis, 127 F.3d 829, 835
(9th Cir. 1997).


  Her lawyers on appeal now suggest that another
adverse effect of Black’s relationship with
Collins was Black’s failure to pursue a plea
agreement on Lipson’s behalf. If true, and if the
evidence showed that she had told him at the time
she might be interested in cooperating, that
might qualify as an adverse effect resulting from
the conflict of interest. Compare Paters v.
United States, 159 F.3d 1043, 1047-48 (7th Cir.
1998); Johnson v. Duckworth, 793 F.2d 898, 902
(7th Cir. 1986). Had there been such a plea
agreement, Lipson might have agreed to testify
against Collins in exchange for a reduced
sentence; Collins certainly had every incentive
to prevent such an outcome, and to instruct Black
not to pursue that strategy. We think it
significant that this is exactly what happened
with about half of the defendants, who testified
against those who remained and who received
lighter sentences. The presence of these other
turncoats meant that joint denial was a weak
strategy at best for Collins and Lipson. The
possibility that Lipson was trying to game the
system--first cooperating with her co-defendant
Collins in the denial strategy, and then claiming
that she might have pleaded guilty and helped the
government--seems unlikely enough on the present
facts that it should not defeat her right to a
hearing as a matter of law. The fact that the
government accepted guilty pleas from some
defendants indicates that it might have been open
to negotiating with Lipson as well.


  Lipson herself alluded to the lost chance at a
guilty plea in her sec. 2255 motion, where she
wrote "because of Black’s loyalty to Collins was
inspired to prevent Lipson from receiving any
representation at all from Black, because Black
and Collins knew or should have known if Lipson,
plead guilty, she would have to testify against,
Collins, as Black’s paymaster, rather than Lipson
who was also his client." This statement appears
to be her only effort to bring this point to the
district court’s attention. Nevertheless, she was
at that time proceeding pro se, and her statement
appeared in the sec. 2255 motion itself; it was
not buried in the middle of a large stack of
discovery materials or otherwise difficult to
find.

III


  We cannot tell without an evidentiary hearing
whether Black really did fail to pursue a plea
agreement on Lipson’s behalf, whether Lipson had
any interest in pleading guilty at the time, or
whether the government would have offered an
agreement to her in any event. The judgment of
the district court is therefore Reversed and the
case is Remanded for further proceedings consistent
with this opinion.



/1 Our dissenting colleague is concerned about what
a trial judge might do to prevent the kind of
complaint that Lipson is now raising. But that
point assumes that we are criticizing the trial
judge for failing to do something at the original
trial, which is not the case. As we explain in
the text, this is not a case in which the trial
judge either knew or should have known about the
potential conflict of interest. Because it is
not, the defendant must satisfy the strict
requirements of Cuyler, 446 U.S. at 335, 350.
This kind of claim, just like many other
ineffective assistance of counsel claims that a
trial judge would similarly be unable to
anticipate, sometimes requires an exploration of
the facts at the sec. 2255 stage. We hold here
only that Lipson has alleged enough to entitle
her to such an exploration.




  BAUER, Circuit Judge, dissenting. I respectfully
dissent. The return of this case for purposes of
deciding whether the defendant would have been
amenable to a "plea agreement" (and, I take it,
whether the prosecution would have even
entertained such an agreement), or what
bargaining chips the defendant had to expend,
adds a totally new dimension to what a trial
judge should do to avoid just this sort of up-
and-down program before or after trial. Should
the district court inquire of each defense
counsel as to whether he or she attempted a "plea
bargain"? Does the court have to inquire as to
whether the government would enter into such
negotiations? And what precisely would trigger
such an inquiry; jointly indicted defendants? Or
is every defendant to be questioned?
  The majority agrees that nothing in the record
would have alerted the trial court to inquire or
question the independence of the defendant’s
representation. The defendant insisted that she
was a victim of the co-defendant’s coercion and
went to trial on that issue.


  The drowning man clutches at hairs; I don’t
blame this defendant for her late defense,
attacking her attorney. I do object to requiring
an inquiry into a matter that would seem to
assume the defendant’s guilt (or why "bargain"?)
or assume a lawyer’s malpractice. This record
shows that the defendant was well represented and
fairly convicted. That should end the inquiry. I
would affirm.
