A Rejected Theory Draws Sanction For Frivolous Litigation
The Minnesota Supreme Court imposed discipline for frivolous litigation and related violations
the referee found that Butler pursued a pattern of frivolous litigation, fraudulently joined law firms and attorneys as defendants, refiled previously dismissed matters, and failed to pay sanctions imposed by the United States District Court for the District of Minnesota, in violation of Minn. R. Prof. Conduct 3.1, 3.2, and 3.4(c). The referee recommended that we indefinitely suspend Butler from the practice of law for a minimum of 2 years. We conclude that the referee did not clearly err in his findings of fact and conclusions that Butler violated the Minnesota Rules of Professional Conduct. We also agree with the referee’s recommended discipline. We, therefore, indefinitely suspend Butler from the practice of law with no right to petition for reinstatement for a minimum of 2 years.
The litigation
The referee found that Butler filed more than 40 lawsuits on behalf of homeowners, claiming that the foreclosures of their properties were invalid. A main theory of Butler’s mortgage litigation was that, in order to foreclose on a property, the mortgagee (frequently a bank or the Mortgage Electronic Registration System (MERS)) must hold both the mortgage, which allows the mortgagee to foreclose, and the underlying promissory note, which grants the mortgagee (or other payee) the right to receive payments from the mortgagor. The referee found that Butler’s theory is contrary to Minnesota law and was expressly rejected by our court in Jackson v. MERS, 770 N.W.2d 487, 501 (Minn. 2009), as well as by the Eighth Circuit and the federal district court.
On sanction
Butler brought frivolous lawsuits, fraudulently joined parties, or refiled dismissed cases in more than 40 matters. This misconduct occurred over approximately 3 years, until Butler’s suspension from practice before the Eighth Circuit and the District of Minnesota in 2013. We have held that such an abuse of the litigation process constitutes “serious” misconduct and warrants a suspension…
Butler also has failed to pay approximately $300,000 in court-ordered sanctions and attorney fees. Failure to pay court-ordered sanctions also warrants discipline…
The cumulative weight of Butler’s misconduct is substantial. Butler’s misconduct involved more than 40 matters and occurred over a 3-year period, despite the federal court’s deterrent efforts.
(Mike Frisch)