No Need to Mail Process to the Government on a Saturday, Even if the Post Office Is Open

closed

In Wisconsin, a party seeking judicial review of an administrative decision must, within 30 days of service of the agency decision, file a petition for review in the trial court and serve the agency with a copy of the petition. If the 30th day falls on a Saturday and the agency is closed on Saturday, the party can wait until Monday to personally serve the agency. But what if the party is serving the agency by mail? Can it wait until Monday to mail the petition even though the post office is open on Saturday? Yes, it can, according to a recent published decision by District 4 of Wisconsin’s court of appeals. Madison Metro. Sch. Dist. v. Evers, 2014 WI App 109.

Continue reading this entry

Seventh Circuit Chides Plaintiffs’ Lawyers for Selling Out Class Members, Shedding “Crocodile Tears” in Class Action Settlement

court_sky

In most settlement negotiations, it is taken for granted that the parties’ self-interest will lead them to advocate aggressively for their positions and against their opponents. After all, every dollar that the plaintiff obtains is one more dollar that the defendant must give up.

But in settlement of class action litigation, the calculus is different. Unlike in normal litigation, where the plaintiff is likely to receive the lion’s share of the recovery, named plaintiffs in class litigation are just one of thousands (or in some cases, millions) of class members who stand to take a very small share of any recovery. Because of this, class action attorneys typically choose the class representatives with an eye toward directing the litigation themselves. The interest of these plaintiffs’ attorneys (maximizing attorneys’ fees) is directly at odds with the interest of the absent class members (maximizing the class’ recovery).

Likewise, the defendants have no concern for the absent class members. Their interest is to keep total settlement costs down; they have no personal interest in how those funds are allocated (i.e., to the named plaintiffs or to the plaintiffs’ lawyers, as opposed to the class itself). As the Seventh Circuit has written, a class action defendant “has no reason to care about the allocation of its cost of settlement between class counsel and class members; all it cares about as a rational maximizer of its net worth is the bottom line—how much the settlement is likely to cost it.”

Because none of the parties litigating a class action have any interest in protecting the interests of the absent class members, the Federal Rules establish an in-depth process for review of class action settlements. Not only do absent class members receive notice of the settlement and an opportunity to object, but the court must also make an affirmative finding that the settlement is “fair, reasonable and adequate.” Fed. R. Civ. P. 23(e)(2).

The Seventh Circuit takes this responsibility seriously, routinely rejecting class settlements whose benefits inure to the parties and their attorneys at the expense of the absent class members. Most recently, the court rejected a settlement that it described as “a selfish deal between class counsel and the defendant [that] disserves the class.” Pearson v. NBTY, Inc., Nos. 14-1198, -1227, -1245, & -1389 (7th Cir Nov. 19, 2014).

Continue reading this entry

When Serving Process by Mail, You Can't Send It to the Wrong Address

return to sender

If personal service of a summons and complaint cannot be accomplished, a plaintiff in Wisconsin is permitted to serve process by publication. A plaintiff serving by publication must also mail a copy of the summons and complaint to the defendant’s address when known or ascertainable. Wis. Stat. § 801.11.

In O’Donnell v. Kaye, No. 13AP2651 (Ct. App. Dec. 3, 2014), the latest foray by Wisconsin’s court of appeals into the service-by-publication rule, the court held that pleadings must be sent to the correct address when served by publication and mail.

Continue reading this entry

Seventh Circuit Interprets Wisconsin's Mediation Privilege

dirksen

When Wisconsin’s legislature enacted the state’s so-called “mediation privilege” in Wis. Stat. § 904.085, it expressly sought, in subsection (1) of that provision, “to encourage the candor and cooperation of disputing parties, to the end that disputes may be quickly, fairly, and voluntarily settled.” The privilege itself provides that “no oral or written communication relating to a dispute in mediation” is admissible in evidence or discoverable in any judicial or administrative proceeding. Wis. Stat. § 904.085(3)(a).

Exceptions to the privilege exist, but they are few in number and relatively narrow—a point driven home in the Seventh Circuit’s recent decision in Doe v. Archdiocese of Milwaukee, No. 13-3783 (7th Cir. Nov. 5, 2014), authored by Judge Ann Claire Williams.

Continue reading this entry

Death By Typo: Seventh Circuit Confirms That Security Agreements Must Be Error-Free

Tractor

The most common, or at least the most preventable, way for a security interest to perish involuntarily is a drafting error made by the author of the security instrument. The Seventh Circuit recently confirmed a security agreement’s demise by this method in State Bank of Toulon v. Covey (In re Duckworth), Nos. 14-1561 and 14-1650 (7th Cir. Nov. 21, 2014).

Duckworth, a bankruptcy debtor later charged with money laundering and bankruptcy fraud, borrowed $1.1 million from the State Bank of Toulon in 2008. The loan was evidenced by a promissory note dated December 15, 2008, and the parties intended to secure it with certain crops and farm equipment. However, the Agricultural Security Agreement the bank prepared didn’t provide the intended security. The agreement stated that it secured a note “in the principal amount of $_________ dated December 13, 2008.” Not only was the amount left blank, but the referenced note, dated two days before the actual note, did not exist.

The bankruptcy trustee sought to avoid the bank’s security interest using his strongarm powers under 11 U.S.C. § 544. Both the bankruptcy court and the district court denied the trustee’s claim, enforcing the bank’s lien. The bank had submitted uncontested evidence that the security agreement was in fact meant to secure the December 15 promissory note, and that the December 13 date was merely a typographical error. The lower courts simply gave effect to the intent of the parties. Continue reading this entry