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Friday, September 26, 2014

Ind. Decisions - 7th Circuit decides one today; oral argument was 9/22, just four days ago

In Scott Ian Richardson v. The Koch Law Firm, P.C. (SD Ind., Mangus-Stinson), a 5-page opinion, Judge Easterbrook writes:

Scott Richardson incurred an educational debt in 1988 but did not pay. Indiana University, the creditor, filed suit in May 1998, in state court, and a trial was scheduled for September 7, 2000. Richardson filed a bankruptcy petition on September 1 but did not tell the state court, the University, or The Koch Law Firm, P.C., its coun sel. Nor did he appear for trial. The state judge entered a default judgment, which the Law Firm tried unsuccessfully to collect. Now Richardson says that the Law Firm should pay him for violating two sections of the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692e, 1692f, by trying to enforce a judgment that had been entered in violation of the automatic stay under the Bankruptcy Code, 11 U.S.C. §362.

After learning about the bankruptcy, the Law Firm stopped trying to collect the judgment. The bankruptcy end ed in June 2001, and the Law Firm went back to work, rely ing on 11 U.S.C. §523(a)(8), which makes most educational debts nondischargeable. Richardson filed a second bank ruptcy proceeding in January 2002. It lasted until April 2007. Once again the Law Firm desisted during the bankruptcy’s duration and tried to collect after its end. Those post-­2007 efforts form the basis of Richardson’s current claim.

The district court treated this suit as a collateral attack on the state court’s judgment and dismissed it for want of juris diction, invoking the Rooker-­‐‑Feldman doctrine. * * *

After the bankruptcy judge’s decision, Indiana University asked the state court to vacate its own judgment. On January 28, 2014, the state court obliged. As a result, the basis for the district court’s dismissal under Rooker-­Feldman no longer exists.

Demonstrating appalling judgment, neither side brought this development to our attention, although both sides filed their appellate briefs after the state court vacated its judgment. Because that step affects subject-­matter jurisdiction, counsel for both sides—Ruberry, Stalmack & Garvey, LLC, representing the Law Firm, and Richardson, a member of the bar representing himself—had an ethical duty to alert the court. Yet until the judges asked pointed questions at oral argument, neither side was forthcoming. Richardson even professed not to know the status of the state judgment to which he was a party. That assertion is hard to credit, for the state court’s order shows that it was sent to Richardson. But apportioning blame gets us nowhere. What matters now is that the rug has been pulled out from under the district court’s decision. * * *

Richardson did not pay his debt when it was due in 1988 (and still has not done so, although it has not been dis-­‐‑ charged); he did not alert the Law Firm (or the state court) to his bankruptcy petition in 2000; he did not appear for trial; he filed a motion to vacate the state judgment and lost be-­‐‑ cause he did not show up to argue when it was scheduled for presentation; he did not appeal the bankruptcy court’s decision of August 2013; he did not file a reply brief; he did not tell us about the vacatur of the state court’s judgment. It is hard to see how someone so deficient in the defense of his own interests could be an effective advocate for the interests of clients. And it turns out that he has not been; Indiana has suspended Richardson from practice at least three times. See In re Richardson, 875 N.E.2d 700 (Ind. 2007) (suspension for abandoning clients; recounting earlier discipline); In re Rich ardson, 792 N.E.2d 871 (Ind. 2003) (suspension for lying in discovery, hiding assets, and abuse of legal process). Rich ardson is on notice: misfeasance or nonfeasance in federal litigation will lead to professional discipline. See Fed. R. App. P. 46(c).

The judgment of the district court is modified to be on the merits, rather than for lack of subject-­‐‑matter jurisdiction, and as modified is affirmed.

ILB: I'm told the oral argument is worth a listen, before CJ Wood, and Judges Easterbrook and Sykes.

Posted by Marcia Oddi on September 26, 2014 06:04 PM
Posted to Ind. (7th Cir.) Decisions