Seventh Circuit Disqualifies Conflicted Counsel

It’s not often that a court disqualifies one of the lawyers who appears before it. That’s what makes the Seventh Circuit’s recent decision in Doe v. Nielsen, No. 17-2040 (7th Cir. Feb. 26, 2018), one for the history books. The decision, written by Judge Diane Sykes, took the “drastic measure” of disqualifying counsel who appeared for a plaintiff seeking lawful-permanent residence under the EB-5 program—a visa program that allows immigrant investors to apply for a green card if they can prove that they have invested a minimum amount in a “new commercial enterprise.”

The court’s power to disqualify a lawyer of a client’s choosing, the Seventh Circuit explained, stems from its duty to “maintain public confidence in the legal profession and assist[] in protecting the integrity of the judicial proceeding.”  Slip op. 3. The facts of this case, as the court put it, “force[d its] hand.” Id.

Continue reading this entry

SCOTUS Raises an Interesting Question for Appeals in Consolidated Cases in Wisconsin

The U.S. Supreme Court today decided unanimously that, when cases are consolidated under Fed. R. Civ. P. 42(a), they nevertheless remain separate cases. In Hall v. Hall, No. 16-1150, two separate cases had been consolidated and were tried together to a jury, but the district court granted a new trial in one of the cases and entered a final judgment in the other. After the losing party in the decided case took an appeal, the Court of Appeals for the Third Circuit held that, because of the consolidation, the judgment appealed from was not a “final decision” under 28 U.S.C. § 1291. It dismissed the appeal for lack of jurisdiction.

In an opinion by Chief Justice Roberts, the Supreme Court reviewed the history of consolidation in federal practice, beginning with a statute enacted in 1813, which remained in effect in some form until replaced by Rule 42(a) in 1937. It concluded from the cases interpreting the statute that consolidation was not intended to effect a merger of the consolidated cases. Relying largely on that history to determine the meaning of the undefined word “consolidate” in the rule (“the court may . . . consolidate the actions”), the Court decided that consolidated cases are not merged into a single action and that a party aggrieved by the judgment entered in one of the cases may appeal, although there will be further proceedings in the other case. And, indeed, though the issue did not arise in Hall, failure to take a timely appeal from the judgment would preclude taking an appeal from that judgment later, when the “rest of the case” comes to an end.
Continue reading this entry

Wisconsin’s Court of Appeals Holds That a Nonlawyer Personal Representative May Not Initiate an Appeal

It is not exactly a novel proposition of law in Wisconsin that a nonlawyer cannot represent a separate legal entity (as opposed to appearing pro se) in a Wisconsin court. The Wisconsin Supreme Court considered this issue over 50 years ago in State ex rel. Baker v. County Court of Rock County, 29 Wis. 2d 1, 138 N.W.2d 162 (1965), when the county court had refused to act on filings from a nonlawyer executor of an estate. The Supreme Court addressed a similar question more recently in Jadair Inc. v. U.S. Fire Ins. Co., 562 N.W.2d 401, 209 Wis.2d 187 (1997) , where a nonlawyer signed a notice of appeal on behalf of a corporation. The filings in both cases were ineffective; the court’s rationale was that these nonlawyers were engaged in the unauthorized practice of law.

Given that history, our readers should not be surprised by the result in Ditech Financial LLC v. Estate of Stacey, No. 2016AP2371 (Wis. Ct. App. Feb. 15, 2018), a recent per curiam decision issued by District IV of Wisconsin’s Court of Appeals. The appellant, Michael Stacey, who was not a lawyer, was the personal representative of the Estate of James G. Stacey. He sought to appeal the sheriff’s sale of the decedent’s former residence.

Continue reading this entry

Seventh Circuit Explains Unique Feature of Diversity Statute

A feature of 28 U.S.C. § 1332, the diversity-jurisdiction statute, may make you scratch your head and wonder why it’s there. In the Seventh Circuit’s March 15, 2018 decision in Hyland v. Liberty Mutual Fire Ins. Co., No. 17-2712, Judge Frank Easterbrook explained the origin of § 1332(c)(1) and the role that Wisconsin law played in its adoption. The statute is an exception tacked onto the familiar rule that a corporation is deemed to be a citizen of every state by which it has been incorporated and of the state in which it has its principal place of business. But, the text continues:

in any direct action against the insurer of a policy or contract of liability insurance, whether incorporated or unincorporated, to which action the insured is not joined as a party-defendant

the insurer is also deemed to be a citizen every state of which the insured is a citizen. § 1332(c)(1)(A).

The Hyland case arose in Illinois. The plaintiff’s son (on whose behalf she sued), was a passenger in a vehicle driven by Smith and was severely injured when Smith drove into two parked cars. Plaintiff’s state court action against Smith resulted in a default judgment for $4.6 million. The uncollectible Smith—arguably entitled to a defense of the action by Liberty Mutual, which had insured the owner of the car Smith was driving—assigned any claim that she had against Liberty Mutual to the plaintiff. Plaintiff sued Liberty Mutual in federal court for failure to defend Smith, and the district court awarded judgment for the whole $4.6 million.

Continue reading this entry

Seventh Circuit Sanctions an Appellant for Failing To Include the District Court’s Rulings with Its Opening Brief

Seventh Circuit Rule 30(a) requires an appellant to “append to [its] opening brief[] the judgment under review and its adjoining findings of fact and conclusions of law.” Rule 30(b) further requires an appellant to include any other opinions or orders that bear on the issues on appeal, and subparagraph (d) requires an appellant to certify that it has met the requirements of the rule.

Let Jaworski v. Master Hand Contractors, Inc., No. 16-3601 (7th Cir. Feb. 15, 2018), serve as a warning to any would-be scofflaws of Circuit Rule 30. The decision, written by Judge Diane Sykes, sanctioned the appellant, Master Hand Contractors, for failing “to submit critical district-court opinions with its opening brief.” Slip op. 2.  “The purpose of an appeal,” the court explained, “is to evaluate the reasoning and result reached by the district court.” Id. at 4. The court cannot “do this job,” however, “if the written orders and transcript pages containing the appealed decision are not before [it].” Id.

Continue reading this entry