868 N.W.2d 243
Minn.2015Background
- William B. Butler, admitted 1992, was the subject of a disciplinary petition after a multi-year pattern (40+ matters) of litigation misconduct revealed by federal-court proceedings and sanctions.
- Butler repeatedly filed mortgage-foreclosure cases asserting that a foreclosing mortgagee must hold the promissory note; he persisted after Minnesota and federal precedent rejected that theory.
- He repeatedly argued that federal courts should apply a looser "possibility" pleading standard rather than the Iqbal/Twombly plausibility standard in federal courts.
- Butler fraudulently joined Minnesota attorneys and law firms in ~20 cases to defeat federal diversity jurisdiction and repeatedly moved to remand those cases.
- He dismissed removed cases and refiled them in state court within days, a tactic the referee found intended to delay or avoid federal assignment.
- Butler failed to pay multiple court-ordered sanctions and attorney fees (totaling about $299,238.47), was found in contempt in federal court, and testified he would not pay on principle.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Butler filed frivolous claims in foreclosure litigation (Rule 3.1) | Butler advanced legally baseless foreclosure theories and pleading-standard arguments contrary to controlling precedent | Butler contends his filings sought extension/modification of law and were in good faith | Court held Butler’s foreclosure and pleading-standard theories lacked any good-faith basis and violated Rule 3.1 |
| Whether Butler fraudulently joined local attorneys to defeat federal jurisdiction (Rule 3.1) | Butler joined Minnesota firms/attorneys without factual basis to obstruct federal jurisdiction | Butler argued joinder was legally supportable | Court held joinder was fraudulent in numerous cases and violated Rule 3.1 |
| Whether dismissing removed cases and promptly refiling in state court was improper delay (Rule 3.2) | Butler dismissed and quickly refiled to evade federal jurisdiction or certain judges, causing delay and harassment | Butler denied intent to delay; claimed other motives | Court found the pattern intended to delay/avoid federal process and violated Rule 3.2 |
| Whether Butler’s failure to pay court-ordered sanctions/fees violated tribunal obligations (Rule 3.4(c)) | Butler knowingly disobeyed court orders to pay substantial sanctions and fees | Butler asserted inability and principled refusal to pay; claimed inability to pay | Court concluded Butler knowingly failed to pay, was not credible on inability, and violated Rule 3.4(c) |
Key Cases Cited
- Jackson v. MERS, 770 N.W.2d 487 (Minn. 2009) (rejected rule that mortgagee must hold promissory note to foreclose)
- Stein v. Chase Home Finance, LLC, 662 F.3d 976 (8th Cir. 2011) (adopted Jackson holding)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (articulated federal plausibility pleading standard)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (established plausibility pleading standard)
- In re Murrin, 821 N.W.2d 195 (Minn. 2012) (pattern of frivolous filings and reliance on court orders in disciplinary context)