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A Judge's Impact on the Bar: Reflections on Judge Peterson

Thursday, December 7, 2017  
Posted by: Joe Menden
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Following the passing of Bankruptcy Judge John L. “Jack” Peterson, a long recitation of his achievements was included in the Montana Lawyer. This recitation chronicled his education, law practice, appointment to the bench as Montana’s first bankruptcy judge, and other numerous professional accomplishments. Although each of the referenced accomplishments was worthy of mention, the list omitted any reference to the individual and significant impact Judge Peterson had on the bankruptcy lawyers that appeared before him shortly after he was appointed to the bench in 1985. To illustrate this impact, following are the anecdotes and reflections of lawyers who appeared before Judge Peterson during formidable periods in their careers.[1]

- - -

He taught me and a generation of lawyers about effective courtroom practice. The lessons were often taught in a non-user-friendly fashion. But we learned to know the facts and study the law of our case, and to be following the right procedure or we would get our heads handed to us in open court. We learned fast. And sometimes it was painful. But I often saw a twinkle in his eye when the lessons were being taught. I also began to appreciate that JLP enjoyed a bit of repartee in courtroom argument, which made it fun if you were up to it.

We were having hearings in the Billings courtroom. I had several cases, numerous clients and witnesses. The line to get through security moved slowly. I figured JLP would hold off on starting court. I was wrong. By the time I got my gang noisily into the courtroom. Not only had he started court, but he had called my case. I was mortified and trying to figure out how I was going to avoid a malpractice suit. As I sat down JLP called my name. "Mr. Guthals, good to see you. Where have been? I already called your case, but you weren't here. That matter has been decided." I apologized and was about to beg him to reconsider when he said, "do you want to know how you did?" "Yes your honor." My knees were quaking. JLP announced: "The court ruled in your favor." All I could say was "Thank you your honor."

– Joel Guthals

– – –

Judge Peterson treated individual debtors, with respect. He understood, and vigorously implemented, the mandate of the Bankruptcy Code that everyone is entitled to a fresh start, as long as they are honest with the Court, trustee and creditors. However, he did not suffer poor lawyering well; he held the bankruptcy bar to a high standard at all times.

I suspect that this high standard stemmed from his concern that people appearing in his court were in real distress, whether as a result of medical debt, credit card bills or commercial debt in the millions of dollars. Therefore, he required that debtor counsel should be both empathetic with their client, and competent in their representation, in order to do their best to alleviate that distress. On the other hand, he made sure that creditor counsel recognize both the human element of the case at bar and that the Code provides relief to which debtors are entitled, whether creditor counsel might agree or not.

I recall one incident involving an attorney who was often less than prepared and in the habit of submitting “unusual” legal theories, usually to the detriment, if not outright harm, to his clients. At one hearing (which was this attorney’s last bankruptcy hearing), Judge Peterson became so irate at him in the poor presentation of his client’s case that the attorney abruptly left the courtroom (and the courthouse) visibly shaking. That attorney never appeared in bankruptcy court again, as far as I can recall.

When I left the Crowley Firm in May 2000 to go out on my own, shortly thereafter I received a personal handwritten letter from the Judge congratulating me on going into solo practice and telling me that, based upon his years as a solo practitioner, I would come to enjoy my new life on my own. He encouraged me to remain in the practice of bankruptcy law, which I have done to this day. I keep his letter close to me in my desk to this day. I use his high standards and respect for the individual as my guideposts.

He educated and trained a generation of Montana bankruptcy attorneys in the proper and efficient presentation of cases, many times under his intense and unrelenting scrutiny. As a result, those attorneys can practice before any court, regardless of the jurisdiction. He will be sorely missed.

– Malcolm Goodrich

– – –

My first legal experience as a new law school graduate was against Judge Peterson in the highly contentious Colstrip Units 3 and 4 permitting proceedings. I was a wet-behind-the ears staff attorney for the Northern Plains Resource Council and jumped into the middle of the highly contentious regulatory approval of Units 3 and 4. Judge Peterson, who was at the time not yet a judge but a bankruptcy referee, was known among the Colstrip opponents as “Black Jack” Peterson. Judge Peterson earned this nick-name through his “take no prisoners” approach to obtaining the required permits for Units 3 and 4. My introduction to the practice of law was to battle with “Black Jack” in the Colstrip hearings.

While Judge Peterson fulfilled his nick-name while we were before the Boards of Health and Natural Resources, he had an out of the courtroom attribute that I have since tried to emulate. In one of my first hearings before the Board of Health, which had jurisdiction over the air quality permit for Units 3 and 4, Judge Peterson was fully engaged in his combative courtroom conduct. When a recess was called, we walked out of the hearing room together but once outside his persona changed; he patted me on the back in a friendly fashion and asked how I was doing. This was followed with a collegial conversation about something other than Colstrip. Judge Peterson’s split personality this day wasn’t a one-time thing, but was repeated throughout the Colstrip permitting proceedings. I learned that there were two Judge Petersons, one in courtroom, and a different one outside the courtroom.

As a baby lawyer I believed that opposing attorneys were supposed to be oppositional in all respects, whether in or out of the courtroom. Judge Peterson disabused me of that notion. I learned from observing Judge Peterson that while the courtroom could be, and with him it was, akin to a bar brawl, that behavior could and should be left at the courthouse door. I have done my best to follow what Judge Peterson unwittingly taught me and as a result I still have a law practice that I can enjoy. I am grateful to Judge Peterson for this valuable lesson on how to conduct myself as a lawyer.

– J. Andrew Patten

– – –

Judge Peterson’s time on the bench spanned nearly half of my now 34 years as a creditor’s rights attorney. His influence on my development as a practitioner in the 1980’s and 90’s is immeasurable. He taught me and my colleagues now comprising the “geriatric” members of the Bankruptcy Section the importance of being prepared, concise, and most importantly, to be “tuned in” to that was actually happening, in real time, in the courtroom. Most of us learned what it meant when Judge Peterson took his glasses off [be careful, tread lightly], or when he stopped you to ask his own questions of your witness [you were done], or if he asked you if you were done [yes, you really were done]. I learned those lessons early, often the hard way. The others who did have gone on to have successful practices in the Montana Bankruptcy Court.

In the 18 or some odd years following Judge Peterson’s retirement he stayed active with the Bankruptcy Court as mediator and senior-status judge for many of them. During those years, I came to appreciate that the twinkle in his eye meant that he liked and appreciated you, and your work.

– William D. Lamdin III

– – –

The only trial I had in front of Bankruptcy Judge (“Black”) Jack Peterson involved Montana’s Dangerous Drug Tax Act. The measure was not really a “tax” but more like a criminal “penalty.” In the early ’90’s, my client, Richard Kurth, ironically a Republican Central Committee Chairman, was apprehended with his family and criminally charged for conducting a major marijuana grow operation on their ranch outside of Fort Benton.

After guilty pleas, Richard Kurth was sentenced to 20 years, 15 suspended and his wife, Judith, to five years, four suspended. After their criminal prosecution, the Montana Department of Revenue tried to collect a major tax bill ($800,000) based on the recently-enacted Montana Drug Tax. I challenged the tax as being essentially a criminal penalty and unconstitutional under the Federal Double Jeopardy Clause. We won at all levels, starting with Judge Peterson, affirmed by the Montana District Court, affirmed by the 9th Circuit, ultimately affirmed by the U.S. Supreme Court in a 5-4 vote. Montana Department of Revenue v. Kurth Ranch, 611 U.S. 767 (1994).

The Montana tax was based on the value of the drug. In preparing for the Bankruptcy Court trial, both the State and I faced a difficult time trying to find valuation experts who could testify as to the street value of the Kurths’ marijuana. This was not an easy task because marijuana was a black-market activity.

I finally settled on Ed Rosenthal. Ed was a writer for High Times Magazine and wrote about quality and price of marijuana in regions around the country. The state’s attorney vigorously cross-examined Mr. Rosenthal attempting to elicit an admission that Rosenthal had used marijuana in the United States—a crime. Rosenthal dodged the admission, testifying that his marijuana use was outside the United States.

To Judge Peterson’s credit, he ruled in our favor on the case. However, I always chuckle about his side note on our expert:

Plaintiff’s witness, Rosenthal, states the material (the “shake”) was not saleable. But I reject Rosenthal’s testimony on grounds that Rosenthal is not a credible witness. Rosenthal is a drug culture author who promotes the cultivation of marijuana and other controlled substances through his writings. He testified that he never used marijuana, but his writings are replete with a contrary story. His bias and prejudice in favor of drug culture related activities such as Kurth’s is obvious for that is how he makes his living. I therefore disregard all of his testimony as I find he is not a credible witness.

Id. at 72. This is the only expert in my memory who I have ever put on the stand who has been so roundly criticized.

– Jim Goetz

– – –

There is much I can say about my years in Judge Peterson’s courtroom but one hearing I attended illustrates four important lessons I learned from him. Bankruptcy Court in Billings in the recessionary years of the 1980s was held in the small courtroom on the fifth floor of what was then the federal courthouse. It was near the elevators allowing latecomers easy access in the days before security became the norm and, more importantly sometimes, quick departures. The small room was packed with debtors, creditors and lawyers on the morning in question. The jury box overflowed with bankruptcy lawyers waiting to appear in multiple hearings that day.

The occasion was a contested hearing on confirmation of a Chapter 12 plan to reorganize a family farm or ranch. Judge Peterson called the case and came straight to the point. What, he asked was the debtor’s response to the creditor’s “absolute priority rule” objection to confirmation? This is the first lesson of life in Judge Peterson’s courtroom: Be prepared for anything. He had read the plan and the objection, knew the law and had immediately zeroed in on a weakness of the debtor’s case.

Unfortunately, debtor’s counsel was not ready for the question and, seemingly, did not know the absolute priority rule. He gulped, said something like, “I think I have it right here”, and started fumbling through his brief case. It should be said at this point that Judge Peterson was not always a patient man. Rather than wait for a response, he turned to counsel for the creditor and asked him to explain the rule, again illustrating the first lesson. The startled lawyer rose, recited the rule in two or three sentences and quickly sat down, thus illustrating lessons two (know the law) and three (be brief in your remarks to the court). Brevity was required above all else in Judge Peterson’s court. Keeping one’s head down was not a bad idea, either.

The story could’ve ended there as another anecdote about an unprepared lawyer flayed by an overbearing judge, but that’s not my recollection. Instead, the judge merely asked the debtor’s counsel to review the rule, amend the plan, if necessary, and come back for a rescheduled hearing. This is lesson number four: learn from your mistakes and try not to repeat them. This is one lesson I would revisit over and over with Judge Peterson’s assistance.

I understand only now after all these years that he viewed courtroom exchanges as teaching moments and not as occasions to embarrass lawyers to the detriment of their clients. Though his methods may sometimes have seemed harsh (or even scary), I am very grateful for the lessons Judge Peterson taught those of us who appeared regularly in his court. He made us all better lawyers and for that I will never forget him.

– Chuck Hingle

– – –

Judge Peterson was always prepared, and frequently knew the underlying facts, arguments and law better than the attorneys arguing before him. He was not interested in peripherals or tangential issues. He was heard to say “you just get started and I’ll help you out”. Helping out was telling lawyers in a concise and direct fashion that they needed to get to their point. I always thought he liked vigorous exchanges between the bench and the bar. He could chew us out in the courtroom and then make a point of bumping into us after the hearing and pat us on the back in the hallway.

Judge Peterson was a pioneer. He supported the Bankruptcy Section and its educational efforts from its inception. He pioneered video conferencing of court appearances. Chapter 12 was newly enacted in the 1980s. Judge Peterson plowed new ground with his opinions interpreting that new section of the bankruptcy code. He mentored many of us novices through that busy period for the bankruptcy court. He molded us into better lawyers and better people.

– Robert G. Drummond

– – –

My first experience with Judge Peterson was when I was just a baby lawyer in 1987. Chapter 12 cases were handled in a side room of the Federal Court Building in Great Falls. It did not matter, as the Judge had a very demanding presence that overcame the informal setting. I watched as lawyer after lawyer, seasoned as they might be, were humbled by the judge’s character and, most importantly, his knowledge.

I really started to question my career choice when I saw him ask a white-haired lawyer, who obviously was quite knowledgeable, if that was his client seated behind him. When the lawyer acknowledged it was, Judge Peterson told him to give the name of the lawyer’s E&O carrier to him as the client was going to need it.

After years of practice in front of the judge, I did realize that he strived for fairness even if his brusque nature hid it. If you could withstand the questions and weather the storm, he eventually acknowledged you as knowing what you were talking about and the storm (occasionally) subsided. The judge never worried about perceptions that he was favoring one lawyer over another as you could have a drink with him one night, and get chewed out the very next day in Court.

I have told many lawyers that since I “grew up” in Judge Peterson’s court, I felt I could go into any other court and be prepared. Once you survived his court, it was hard to imagine another judge that might rattle you like Judge Peterson. He was an intelligent man who knew the law extremely well and you had better be on your game or suffer the consequences. While lawyers certainly did not always agree with him, they all respected him as a person and a Judge. –

– Gary Deschenes

– – –

I met Judge Peterson when he served on the Board of Regents. Because of his service, higher education became possible and affordable for many more Montana citizens. His service changed lives and made Montana a better state. I was privileged to practice in bankruptcy court before Judge Peterson. In the early days, things were much less formal than they are today. When Judge Peterson arrived at the courthouse, he often invited me and other attorneys to join him for breakfast or a cup of coffee in the courthouse cafeteria. After visiting, we would return to the courtroom where inevitably, the Judge would rule against me. Over the years, I actually won very few cases. When I commented once at a seminar that Judge Peterson had ruled in my favor in the previous year, the Judge offered that his ruling must have been a mistake.

– Doug James

– – –

I attended my first Bankruptcy Section Seminar in Billings in November 1989. During the seminar, Judge Peterson engaged in a question-answer session with the attorneys present. One of the questions posed to Judge Peterson was “what is the most important thing an attorney can do when preparing for a hearing before the court?” Without hesitation, Judge Peterson’s response to the question was short and succinct – “read the Code.”

About six months later, I had several short matters scheduled for hearing before Judge Peterson during his monthly court calendar in Missoula. The courtroom was crowded with attorneys patiently/nervously waiting for their respective cases to be called. One of the first matters that Judge Peterson took up that day involved an adversary proceeding in which a creditor had filed a complaint seeking to have the debtor’s discharge denied in his Chapter 7 case. When the case was called, the creditor’s attorney walked up to the podium with his file in hand and before he could speak, Judge Peterson leaned forward and asked him in a very stern tone, “Counsel, I just have one question – under what section of the bankruptcy code are you proceeding with in this case”? The creditor’s attorney stood stoic before the podium, shuffled through papers in his file and then actually stared at the ceiling for a few moments, possibly hoping that the correct answer to Judge Peterson’s question would come to him from on high.

After what seemed like hours, but was probably no more than 30 seconds, the attorney finally looked at Judge Peterson and said, “Your Honor, I’m not entirely certain.” Possibly trying to throw the attorney a lifeline, Judge Peterson responded, “Well, are you proceeding under section 523 or 727?” Again there was more silence, paper shuffling and staring at the ceiling. Finally, creditor’s counsel looked up and softly responded, “Your Honor, I’m not sure.”

Having obtained that admission from creditor’s counsel, Judge Peterson leaned forward and said, “Counsel, after reviewing your pleading filed in this case, I agree with you in that regard and since your complaint fails to state a claim under either sections 523 or 727, the case is dismissed.” It was at that moment in Judge Peterson’s court room in the summer of 1990 that I finally had a full appreciation of his admonition to all attorneys who practiced before him to “read the Code.”

– Richard J. Samson

– – –

I appeared in front of Judge Peterson many times, almost always representing a creditor, and had great respect for him. While I considered his approach to generally be that the Bankruptcy Court was there to assist debtors, and that most debtors didn’t want to be there any more than the creditors, he always treated me and other counsel fairly as long as you knew the law, the rules, and stuck to them. One particular example stands out in my mind.

A fellow named John Love of Cut Bank had cornered the rare coin market. He first bought up as many silver dollars as he could when they were going out of circulation. He then expanded his business to rare coins. His business took off, primarily because he published a monthly pamphlet extolling the increasing value of rare coins. Of course, the increasing value was because Love would sell a $5 gold coin to a friend for $20 and then report the next month that coin had increased 400 percent! The friend would sell to another crony for $30 and John Love would report another amazing gain. Then Love would buy the coin back for $50 and Love would again point out the fantastic gains to be made. However, one day in October in the 1990s, someone said, “Wait a minute! That $5 gold coin is only worth $5.” Black October for John Love. The rare coin market collapsed like the Ponzi scheme it was. Love filed a Chapter 11 proceeding to fend off creditors.

I represented a Havre bank that had lent Love a lot of money. Other banks had as well. I was asked to also represent the Unsecured Creditors Committee. I agreed and filed a number of adversary cases to recover assets (not coins) or avoid preferences. I was pretty successful, even recovering several million dollars based on a contract written on a Las Vegas bar napkin. I eventually filed my application for approval of my fees. However, I hadn’t made periodic applications and advised the court of all that I had done until that one and final filing. In a lengthy ruling Judge Peterson chastised me for not following the rules. He disallowed some of my fees as well. I was pretty discouraged given the language he’d used in the order.

Then I received a call from his law clerk. He said the judge had asked him to call and tell me he thought the work I’d done on the case was some of the finest he’d seen. He may have liked what I accomplished, but he still insisted that I play by the rules. And for that lesson I’ve always been grateful.

– Ward Taleff

– – –

With so many contributions being made, I will limit my remarks to a few of my personal memories of Judge Peterson, with a perspective that his professional and judicial colleagues might not have, unless they spent time with him on a golf course or at a card table.

He was by far the best golfer I ever played with, and with my being such a hopeless golfer, since 1991 I don't think we played more than three rounds of golf together. But my second finest golf moment ever was matching his drive at a CLE tournament at Fairmont. On the long drive contest hole, by sheer coincidence I happened to hit my drive straight. He followed with his drive. When we got to our balls, he walked from one to the other and back again, thought about it and pronounced that we were dead even (we weren’t – I was a bit longer).

Judge Peterson was a complex man. He was competitive at almost everything he did, whether it was practicing law, golf, pinochle, pan, cribbage, sports betting, handball, or racquetball. We played racquetball from 1991 until probably 2010, at the Butte Country Club, several times per week over lunch. He was 22 years older than I, and 20 or 30 pounds heavier. Naturally, he was slower, playing racquetball was a welcome distraction to our work, so I was happy to do it. But it was not competitive without a handicap, and he wasn't interested unless there was a wager. So I would spot him 8, or 9, or 10 points in a 15 point game, and we would play for steak dinners, or for $5 per game in a three-game match.

He would run around as fast as he could, and he would “hinder” me as often as he could get to me, even if that meant he put himself directly in front of me in the line of fire for my kill shot. He would be polka dotted afterwards from getting hit by balls. A few times over the years he took full force shots directly in his face. At least twice I expected him to fire me on the spot from those. For his part, if he could hear you breathing he would call a hinder (if he missed his shot). Even with the handicap, I would hit the ball right to him so that he got a good workout every day. Finally it made him too tired to play, and we stopped playing when he was in his mid-70s.

He had figured out much earlier in his life that if he could get an opponent rattled, it gave him an advantage. So if he found an effective way to needle you or put pressure on you during a competition to throw you off your game, he used it. But after the game or case was over, bygones were always bygones. He often shared a quotation with attorneys about litigation that went something like: "Vie greatly, but afterwards eat and drink as friends." He always picked up the check, unless it was a special occasion like his birthday. He was the most generous man I have ever known, but he did not broadcast it.

– Terry Healow

– – –

Judge Peterson was first a boss and mentor who taught me so much about the practice of the law. Judge Peterson held his law clerks to the same standards he held the parties who appeared before him: Know the applicable law and rules, and be prepared for every eventuality. As many attorneys may have experienced, and as I too have experienced, Judge Peterson could bark, and sometimes that bark felt like a bite. But what I learned, was that while he did bark, he never held a grudge and underneath that bark was one of the kindest and most caring individuals I have ever met.

– Kelli Harrington

– – –

When I worked for Jack he instituted the 60-day rule. It required practitioners to contact the court if anything under advisement had not been decided. His stance, repeated often, was, “make the best decision you can, and make it quick. If you’re wrong, an appeals court will fix it.” He truly believed clients had the right to a decision as soon as possible.

– Wayne Harper

*****

One can take from the foregoing as much or as little as they choose, but at a minimum these anecdotes illustrate the enduring impact Judge Peterson had on the lawyers that appeared before him and the clerks that worked with him in chambers. Although times have changed, Judge Peterson impressed upon a generation of bankruptcy lawyers in the mid-1980s the importance of: reading the code; being prepared when one enters the courtroom; leaving the fight at the courthouse door; resisting the temptation to hold a grudge; learning from one’s mistakes; playing by the rules; and, being kind to your colleagues. Not surprisingly, these norms of conduct continue to be the foundation for bankruptcy practice in Montana. Although the role these precepts play in the work done by lawyers and judges is obvious, the importance of taking a moment, revisiting them, and striving to faithfully adhere to them, as a generation of bankruptcy lawyers learned to do, cannot be overstated.

The Honorable Benjamin Hursh was appointed as the chief bankruptcy judge for the United States Bankruptcy Court, District of Montana in February of 2017.



[1] With the exception of minor editing, the anecdotes appear as their authors wrote them, including where necessary, the facts and details related to a particular case or experience.