Sadly, as Judge Posner tells it, those huge verdicts apparently did not purchase perfect contentment for our justice-seeking, do-gooder plaintiff attorneys. Rather, they commenced "mortal combat" over division of fees. Carr, 2010 WL 92487 at *1. The law firm ceased to engage in the practice of law in 2003, but "continued a twilight existence to administer the allocation of fees." Id. (Throughout the opinion, Posner's prose rises to the majesty of the subject matter.) There were "a flurry of lawsuits" filed by the ex-partners against each other in Illinois state court. Id. In one Madison County proceeding, the judge shooed a newspaper reporter out of the courtroom while the ex-partners duked it out over dollars. Those ex-partners seemed to have resolved their disputes via a "Memorandum of Understanding" drafted by Carr. Id. Not quite. Carr later added a counterclaim that he had been fraudulently induced to sign that Memo of Understanding. Id. (Yes, the one he drafted.) The Illinois courts rejected Carr's counterclaim and dismissed the lawsuits, pursuant to the Memorandum of Understanding, in 2006. The dismissals were affirmed by the Illinois Appellate Court in 2007 and Carr did not seek review by the Illinois Supreme Court. Id.
Since we're reading a Seventh Circuit opinion, that means somehow this fee dispute made its way into federal court. Carr was now accusing his ex-partners of, inter alia, violating RICO (where the "R" stands for racketeering -- that sort of thing really reduces the chance of a kumbaya ending). Carr wanted his share of the fees -- pegged at $20 million -- as well as punitive damages. Id. The defendants sought dismissal of the case, because, well, how do we put this, it's over. The district court agreed, granting a 12(b)(6) motion to dismiss the federal claim and the supplemental state law claim on the ground of res judicata. Posner could not resist pointing out that res judicata is an affirmative defense and that the defendants should have filed under 12(c). Thus, the district court "jumped the gun in dismissing the case under Rule 12(b)(6)." No worries, though, because "plaintiff does not complain of the error." Id.
So the first thing the opinion decides is that Judge Posner is smarter than the litigants and the district judge. (Honestly, Your Honor, we already knew this. We always will.)
So the Seventh Circuit agrees with the defendants, who groused about their ex-partner's parade of lawsuits. (Yes, we should have posted an Irony Alert. These defendants are, after all, plaintiff class-action lawyers.)
At this point Posner engages in an almost metaphysical discussion of whether the RICO complaint is so frivolous as to deprive the court of federal jurisdiction -- which would engender "a certain perversity" because Carr would be permitted to refile his case.
But Posner to the rescue. Just in the nick of time, he concludes that the RICO claim is "weak, indeed feeble" and a "nonstarter," but -- unluckily for Carr -- not yet so frivolous as to warrant dismissal on jurisdictional grounds. Id. at *5-7. Posner is torturing the plaintiff at this point, isn't he?
By the way, if you think you have heard this jurisdictional discussion before, then you have really been paying attention. Our recent summary of the earlier Posner opinion in the Nightingale case goes over similar ground. Let's just say that Posner opinions are rife with certain jurisdictional leitmotifs.
- motive to harass, evinced by the "vitriolic tone of the complaint," and the character of the briefing and oral argument;
- failure to cite a controlling case on the "single refiling" rule
- "disingenuous efforts at distinguishing" that case in the reply brief;
- false statement in the brief that "Carr does not seek to relitigate issues from the 2004 litigation;"
- improper attempt to raise issues in the reply brief that had not been mentioned in the opening brief; and
- failure to attempt to rebut the cross-appeal on sanction.
These facts, and others, convinced Judge Posner that the "litigation is groundless," that "plaintiff is out of control," and that "his lawyers are neglecting their duties as officers of the state and federal courts by failing to rein him in." Id. at *9. Consequently, the Seventh Circuit orders the district court to impose monetary sanctions on the plaintiff. Posner also throws out a tease by noting that the defendants had not sought sanctions "for misconduct in the proceedings in this court." Id. (When you litigate before Judge Posner, you lose even when you win.) Lastly, the Seventh Circuit directs the district court to consider "whether to enjoin Carr from conducting further litigation arising from actions by the defendants of which he has complained in his voluminous filings to date." Such injunctions would "complement" monetary sanctions, and seem appropriate because of the unlikelihood that the plaintiff "will accept defeat gracefully." Id.