HEATHER L. WELK, SUSIE B. JONES, WILLIAM BIGELOW, CHRISTINE HEINZMAN, MARK HEINZMAN, SIGMOND SINGRAMDOO, TROY FORTE, LYNN M. FORTE, DAVID J. ROSTER, CHARITY ROSTER, PATRICK RUCCI, GARY G. KLINGNER, REBECCA A. ALBERS, IAN PATTERSON, JAMES WILLIS KONOBECK, JR., ALISON KONOBECK, AMY B. TIBKE, DANE A. TIBKE, TRACY J. MIKLAS, and MICHELLE L. MIKLAS, Plaintiffs,
GMAC MORTGAGE, LLC; ALLY FINANCIAL, INC.; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; MERSCORP, INC.; U.S. BANK, N.A.; DEUTSCHE BANK TRUST COMPANY AMERICAS; SHAPIRO & ZIELKE, LLP; U.S. BANK NATIONAL ASSOCIATION ND; DEUTSCHE BANK NATIONAL TRUST COMPANY; THE BANK OF NEW YORK MELLON, f/k/a The Bank of New York, Defendants.
William B. Butler, BUTLER LIBERTY LAW, LLC; Susanne M. Glasser, GLASSER LAW LLC, for plaintiffs.
Charles F. Webber, FAEGRE BAKER DANIELS LLP, for defendants GMAC Mortgage, LLC; Ally Financial, Inc.; MERSCORP, Inc.; Deutsche Bank Trust Company Americas; and The Bank of New York Mellon.
Charles F. Webber, FAEGRE BAKER DANIELS LLP; Bryan A. Welp, LINDQUIST & VENNUM PLLP, for defendant Mortgage Electronic Registration Systems, Inc.
Charles F. Webber, FAEGRE BAKER DANIELS LLP; Brian L. Vander Pol, DORSEY & WHITNEY LLP, for defendants U.S. Bank, N.A.; U.S. Bank National Association ND.
Bryan A. Welp, LINDQUIST & VENNUM PLLP; Jared D. Kemper, FOLEY & MANSFIELD, PLLP, for defendant Deutsche Bank National Trust Company.
PATRICK J. SCHILTZ, District Judge.
On August 8, 2012, this Court ordered plaintiffs' attorney, William B. Butler, to pay a $50, 000 sanction to the Court and a total of $29, 766.70 in attorney's fees to defendants. ECF Nos. 140, 141; see also Welk v. GMAC Mortg., LLC, 850 F.Supp.2d 976, 999-1006 (D. Minn. 2012). The Court assessed these sanctions after finding that Butler had engaged in "extraordinarily egregious and brazen" misconduct, 850 F.Supp.2d at 1004, including making numerous frivolous arguments in this case, creating a "cottage industry of filing frivolous showme-the-note claims, " id. at 999, engaging in "brazen delay tactics and judge-shopping, " id., and making "misrepresentations" to this Court, id. at 1003. The United States Court of Appeals for the Eighth Circuit affirmed this Court's judgment and issued its mandate on August 7, 2013. On August 12, 2013, this Court ordered Butler to pay the sanctions by August 30, 2013.
Butler did not pay any part of the sanctions. Instead, Butler filed a letter stating that he was financially unable to pay the sanctions. The Court thereafter ordered Butler to appear at an evidentiary hearing to show cause why he should not be held in contempt. On December 17, 2013, the Court held an evidentiary hearing, at which the Court received a great deal of evidence about Butler's financial condition. The Court then took the matter under advisement.
Nine days later, Butler was suspended from practicing law before the Eighth Circuit. In re Butler, No. 13-9013 (8th Cir. Dec. 26, 2013) (order of suspension). As a result, Butler was automatically suspended from practicing law before this Court. See Local Rule 83.6(b)(1) ("Unless otherwise ordered by this Court, any such attorney who has been temporarily or permanently prohibited from practicing law by order of any other court, whether by suspension, revocation, or disbarment, shall automatically forfeit his or her right to practice law before this Court during the same period that such attorney has been prohibited from practicing law by such other court.")
Based on the record before the Court, and for the reasons explained below, the Court finds that Butler is in contempt. As discussed below, however, the Court will not take action against Butler until it can determine whether his suspension from the practice of law succeeds in compelling him to make a good-faith effort to pay the sanctions. The Court will, however, ask the United States Attorney to pursue collection of the sanctions from Butler and to investigate whether Butler should be charged with criminal contempt.
A. Legal Standard
"[C]ourts have inherent power to enforce compliance with their lawful orders through civil contempt." Shillitani v. United States, 384 U.S. 364, 370 (1966). For a court to hold a party in civil contempt, there must be clear and convincing evidence of a violation of a court order. Chicago Truck Drivers v. Bhd. Labor Leasing, 207 F.3d 500, 505 (8th Cir. 2000) ( Chicago Truck Drivers I ). Once a violation is proven, the burden shifts to the violator to show that compliance is presently impossible. United States v. Santee Sioux Tribe of Neb., 254 F.3d 728, 736 (8th Cir. 2001). To meet this burden, violators must demonstrate "(1) that they were unable to comply, explaining why categorically and in detail, (2) that their inability to comply was not self-induced, and (3) that they made in good faith all reasonable efforts to comply.'" Id. (quoting Chicago Truck Drivers I, 207 F.3d at 506).
1. Evidence of Inability to Comply
There is no dispute that Butler did not comply with the Court's August 12, 2013 order. Accordingly, Butler bears the burden of demonstrating that it was impossible for him to comply. Butler offers no evidence of his inability to comply, however, save for the following testimony, which the Court quotes in its entirety:
The very short answer to the question of whether or not - or why I haven't paid $80, 000 in sanctions is that I am unable to comply. At no time since this Court's order have I had $80, 000 or anywhere near $80, 000. I've given opposing counsel all of my bank records, all of my financial records. There's no - I don't think there's any evidence that I've ever had $5, 000 accumulated, and that's not any kind of intent to avoid any sanctions. The way I operate my life is money comes through and comes ...