U.S.A. v. 1948 South Martin Luther King Drive, Springfield, IL

• Decision Date: 05 November 2001
• Docket Number: Nos. 00-2103,00-2351,s. 00-2103
• Citation: 270 F.3d 1102
• Parties: (7th Cir. 2001) United States of America, Plaintiff-Appellee, v. 1948 South Martin Luther King Drive, Springfield, Illinois, et al., Defendants, Appeals of Bruce D. Locher and Marvin Logan, Prince E. Logan, and Cleveland Logan, Claimants-Appellants
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1102

270 F.3d 1102 (7th Cir. 2001)

United States of America, Plaintiff-Appellee, v. 1948 South Martin Luther King Drive, Springfield, Illinois, et al., Defendants, Appeals of Bruce D. Locher and Marvin Logan, Prince E. Logan, and Cleveland Logan, Claimants-Appellants.

Nos. 00-2103, 00-2351

United States Court of Appeals Seventh Circuit

Argued March 1, 2001

Decided November 5, 2001

Appeals from the United States District Court for the Central District of Illinois, Springfield Division. No. 97-3022--Richard Mills, Judge. [Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Before Wood, Jr., Manion, and Diane P. Wood, Circuit Judges.

Manion, Circuit Judge.

The United States filed a civil forfeiture action against 18 defendant real estate properties, and an amended complaint added 13 vehicles as defendant properties. Claimants Marvin Logan, Cleveland Logan and Prince Ella Logan filed claims to the properties and answers to the amended complaint.¹ After a bench trial, the district court ordered 15 real estate properties and three vehicles forfeited to the United States. The claimants filed a consolidated direct appeal of the judgment of forfeiture, and their attorney, Bruce Locher, appeals an order imposing sanctions against him. We affirm with respect to the order of forfeiture and remand the matter for the limited purpose of providing Locher with a hearing on the issue of sanctions.

I.

According to the First Amended Complaint, Melvin Logan was involved in the distribution of marijuana, cocaine and crack cocaine in the Springfield, Illinois area from 1982 through 1997. According to the complaint, Melvin used his drug proceeds to purchase numerous parcels of real estate and vehicles, including the defendant properties. To avoid detection by the authorities, he bought the property using friends' and family members' names. An investigation by the Drug Enforcement Administration and the Internal Revenue Service revealed that Melvin himself did not hold title to any real property or any vehicles except two used cars. Besides purchasing homes with the drug proceeds, Melvin also remodeled them, paying for the construction supplies with cash and paying the workers in cash or cocaine. He then rented the properties as Section 8 rental properties, thereby guaranteeing himself receipt of government rents. Melvin was indicted on July 10, 1998 on a number of drug charges, and he eventually pleaded guilty to conspiracy to distribute cocaine and crack cocaine and conspiracy to launder money by purchasing properties with drug proceeds and placing properties in the names of his family members.

Prior to the conviction, on January 27, 1997, the United States government filed a civil forfeiture complaint against 18 pieces of real estate that Melvin allegedly purchased with his drug proceeds or which were used to facilitate his drug transactions. In response, the claimants filed pro se claims to their respective properties. They also filed answers to the forfeiture complaint. On May 15, 1997, the government filed an amended complaint, adding 13 vehicles as defendant properties. The claimants, now represented by counsel, each filed another claim and answer to the amended complaint.

On March 3, 1998 the court entered a Rule 16 scheduling order, directing the parties to complete discovery by August 31, 1998 and to file dispositive motions by September 14, 1998. The court also set a trial date for December 1, 1998. On November 3, 1998, appellant Bruce Locher was substituted as an attorney for Melvin. On November 17, 1998, at the final pretrial conference, Locher made an oral motion to reopen discovery and to continue the entire trial. The court gave Locher until March 19, 1999 to conduct discovery, but only as to Melvin's claim, and allowed Locher to amend Melvin's answer to reflect any relevant factual matters discovered during discovery. The court also postponed the trial date until April 6, 1999.

Locher did not file any dispositive motions by the March 19, 1999 deadline; instead, he waited until April 1, 1999 to seek leave to file a motion to dismiss. The district court denied Locher's motion stating "the Federal Rules of Civil Procedure allow for modification of schedules 'on good cause and by leave of' the Court. Fed. R. Civ. P. 16(b). No real excuse has been offered for the very long delay in seeking to file the motion to dismiss the Complaint. . . . The extended discovery period is no excuse for the delay since discovery is utterly irrelevant to the simple task of reading the complaint to determine if it was sufficiently specific."² Then, on April 30, 1999, Melvin filed a motion to compel answers to interrogatories. Even though it was also untimely, the court granted it in part, directing the government to provide more specific answers to certain interrogatories.

On May 26, 1999, Locher filed a motion for leave to file a motion for production of probation and parole records (including pre-sentence reports) of all identified government witnesses. The court denied this motion because it was an untimely discovery request and because Melvin had failed to show good cause why the district court should deviate from its scheduling deadline.

In response to Locher's most recent untimely motion, the district court also stated that "[f]urther piecemeal, dilatory conduct may justify the imposition of sanctions." Nevertheless, on June 30, 1999, Locher orally moved again for leave to file an amended answer. This request was denied as untimely. Locher then filed another motion to reopen discovery and to exclude certain evidence. The court denied both motions. On July 1, 1999, Locher filed a Motion for Judgment on the Pleadings, raising issues identical to those raised in his proposed motion to dismiss. The district court denied this motion, stating "as was the case with several other motions, it was filed well after the dispositive motion deadline and is therefore late." The court also denied the motion on its merits.

The district court rescheduled the trial date several times before it finally commenced on August 24, 1999. On the first day of trial, the government moved to amend the complaint (to correct a technical error regarding the proper code citation authorizing the forfeiture of automobiles) and the court granted the motion. Locher then sought leave to file a motion to dismiss the newly amended complaint, which the court granted. Locher then re-filed his same motion to dismiss (which had already been denied by the court). The district court rejected this approach stating "I will not permit another bite at the apple where I've already ruled." But, upon Locher's further request, the court allowed him to file a motion to dismiss relating only to the government's amendment. However, on October 15, 1999, Locher filed the motion to dismiss the amended complaint, essentially restating his arguments from his prior motions to dismiss, rather than focusing on the government's most recent amendment as directed by the court. The court denied his motion, concluding that the government's amendment had nothing to do with the adequacy of the portions of the complaint Locher challenged in his motion. The district court further stated that "it was incredible that they would attempt to file this latest motion to dismiss, given the Court's earlier denial of similar motions based on exactly the same paragraphs of the amended complaint." The court then directed Locher to show cause why he should not be held in contempt of court under Fed. R. Civ. P. 11 for filing frivolous and untimely motions and raising issues which had already been raised to and rejected by the court. In response, Locher, while avoiding a direct answer to the court's rule to show cause order, asked the court not to impose sanctions and sought to withdraw as Melvin's counsel because "the threat of those sanctions interferes with his ability to vigorously represent his client in this matter." On November 12, 1999, the court fined Locher $1,000 for his conduct.³ The district court also denied Locher's motion to withdraw as Melvin's counsel.

As the forfeiture proceedings continued, Locher appeared before another district court judge, Judge Jeanne E. Scott, the presiding judge over Melvin's criminal sentencing proceeding, and requested that she release Melvin's pre-sentence report for use in the forfeiture proceeding. Locher did not advise Judge Scott that Judge Mills (the judge presiding over the forfeiture action) had previously denied his May 26, 1999 motion to obtain probation records. Because neither the Assistant U.S. Attorney nor Melvin objected to Locher's request, Judge Scott granted Locher's request for the PSR. Locher's methods were exposed on August 31, 1999 at the forfeiture trial before Judge Mills during the claimants' cross- examination of IRS Agent Sue Roderick. At that time it became apparent that the claimants' attorney (not Locher) was using the PSR. When the attorney explained to Judge Mills that Locher had given it to him, Judge Mills then asked Locher how he obtained the PSR and Locher explained what he had done. Locher also admitted that he had not told Judge Scott that he had previously been denied probation and parole records, but he asserted that his prior motion did not seek Melvin's PSR because it was only "directed towards Government's witnesses. The Government had indicated that they weren't going to call Melvin Logan as a witness in this case."⁴ Judge Mills then opined that Locher "appears to have at the least dissembled with Judge Scott and tried to go in the back door and get what he could not get in through the front in this case. Now, dissuade me of that conclusion, Mr. Locher." Locher again argued that his prior motion only involved a request for the records of government informant witnesses, not for Melvin's PSR.⁵

Judge Mills allowed further argument between Locher and the government and then...