338 F. Supp. 3d 722
N.D. Ill.2018Background
- Mac Naughton, an attorney, and his company Casco Bay purchased an RMG judgment against Shai Harmelech (from a prior case in which Mac Naughton had represented Shai) and sued Shai, his son Etan, and others alleging fraud to collect on that judgment.
- Judge Holderman previously disqualified Mac Naughton from representing Casco Bay in pursuing the RMG judgment, ordering Mac Naughton to have "no further action" in Casco Bay's efforts and barring use of information obtained during his prior representation of Shai/USA Satellite.
- Mac Naughton later caused the RMG judgment to be assigned to himself and proceeded pro se to pursue that same judgment in this lawsuit; he also sought to enforce a separate New Jersey breach-of-contract judgment he had obtained against Shai.
- Defendants moved to dismiss: (a) seeking dismissal/sanctions for Mac Naughton's violation of Judge Holderman’s disqualification/order as to the RMG judgment; and (b) arguing lack of subject-matter jurisdiction/standing to pursue the New Jersey judgment because that judgment was paid.
- The district court found Mac Naughton knowingly violated the prior disqualification order by acquiring the RMG judgment and proceeding pro se, and dismissed the RMG-based claims with prejudice as a sanction.
- The court dismissed the claims based on the New Jersey breach-of-contract judgment for lack of Article III standing because Shai had paid the judgment and Mac Naughton had no presently enforceable fee award.
Issues
| Issue | Mac Naughton (Plaintiff) Argument | Defendants' Argument | Held |
|---|---|---|---|
| Whether Mac Naughton’s pro se pursuit of the RMG judgment violated Judge Holderman’s disqualification order and warrants sanction | He implied the prior order was limited and contended pro se activity or new evidence might avoid the Rule 1.9 bar | He knowingly disobeyed the disqualification/order and insulated himself by taking the judgment and proceeding pro se | Court: Mac Naughton willfully violated the order; dismissed RMG-based claims with prejudice as sanctions |
| Whether Mac Naughton has Article III standing to enforce the New Jersey breach-of-contract judgment (including pending fee claim on appeal) | He argued his pending appeal for attorney fees creates a live claim and thus standing to pursue collection | Shai paid the judgment in full and no present enforceable award remains; a speculative successful appeal does not create present standing | Court: No standing; claims predicated on the NJ judgment dismissed for lack of subject-matter jurisdiction |
Key Cases Cited
- Chambers v. NASCO, Inc., 501 U.S. 32 (inherent power to sanction for contempt and protect judicial authority)
- Maness v. Meyers, 419 U.S. 449 (must comply with court orders regardless of belief about their correctness)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (Article III injury-in-fact requirements)
- Ramirez v. T & H Lemont, Inc., 845 F.3d 772 (standard for sanctions under court's inherent authority in Seventh Circuit)
- Remijas v. Neiman Marcus Grp., LLC, 794 F.3d 688 (standing/jurisdiction discussion relied upon by the court)
- Watkins v. Trans Union, LLC, 869 F.3d 514 (attorney proceeding pro se may be constrained from using former-client confidential information)