Clinton Co. judge says he will certify bid rigging class action; Denounces defendants' 'can't prove damages' theory

Visiting judge William Becker has declared his intention to turn a civil suit about bid rigging in the Madison County courthouse into a class action.

He signed an order on May 6, stating that he would certify a class of taxpayers whose properties were sold for delinquent taxes from 2005 to 2008.

“The numbers vary but it is generally agreed that a significant number of properties were sold in those years,” he wrote.

He compared the allegations of the suit to thieves rushing into his court and stealing the belongings of the lawyers.

Becker, a Clinton County associate judge, was appointed to preside to avoid the appearance of conflicts of interest.

The suit seeks restitution from the county and from buyers of delinquent taxes who profited from the bid rigging.

Former county treasurer Fred Bathon led the conspiracy, which artificially inflated interest on delinquent taxes to the legal limit of 18 percent.

Bathon and tax buyers Barret Rochman, Scott McLean, and John Vassen pleaded guilty of antitrust violations in 2013.

The civil suit accuses other tax buyers of profiting from Bathon’s conspiracy, but U.S. Attorney Stephen Wigginton has not charged any of the others.

Wigginton could have pursued restitution but chose not to do it.

In 2013, he wrote that available data could not identify which properties experienced inflated tax bills or what interest rate would have been bid.

He wrote that subjective factors would be required to determine if the interest rate on any property was a product of collusion, market forces, or both.

Madison County’s brief against class certification quoted Wigginton and noted that U.S. District Judge David Herndon agreed with him.

The county’s brief pleaded that, “questions unique to individual class members swirl around the issues of causation and damages, prohibiting the use of the class action device.”

Becker rejected that logic, writing that multiple trials for the same essential issue would do nothing but create multiple possibilities for inconsistent results.

“If each person whose property was sold for delinquent taxes in the alleged fraudulent tax sales filed a separate suit alleging various theories of liability, this court, in the absence of a motion to consolidate, would likely consolidate the separate claims of the separate plaintiffs for trial on its own motion,” Becker wrote.

“The defendants argue that each property needs to be analyzed separately because some of the properties would have been sold at the 18 percent rate for valid economic reasons and myriad other individualized reasons.

“The problem is that if the alleged tax sale scheme is proved true, all or some of the defendants created a system whereby it is difficult if not impossible for an individual plaintiff to prove that a lower rate would have been bid and what that rate would have been for a particular piece of property.

“The court fails to understand how the defendants, if liable, can essentially rig the game so that they can illegally obtain the money and then say, ‘We know we got the money illegally, we know that it belongs to the group or portions of the group, we don’t know which ones of the group are the owners, and because you, the owners, can’t prove your damage, we get to keep the money.’

“Imagine if on the day of the arguments, January 22, several people in concert ran into the courtroom full of people and in concert stole the briefcases, wallets, purses, jewelry, papers, pens, and other items in the courtroom.

“Can it really even be seriously considered that the culprits get to keep the items because not everyone remembers how much money they had or what was in their briefcase?

“Plaintiffs do have to prove damages but liable defendants do not get to keep the money because their conduct makes it difficult to determine the amount of damage.

“The court is satisfied that an appropriate method to determine damages can be reached.”

County treasurer Kurt Prenzler welcomed Becker’s decision.

In a press release on May 8, he wrote, “It only makes sense. From the beginning I have believed that the victims should receive restitution.”

Voters elected Prenzler in 2010, and he automated auctions to eliminate the oral bidding that made Bathon’s scheme possible.

Although Prenzler shares the views of the plaintiffs, they included him as a defendant due to his position as a successor to Bathon.

State’s Attorney Tom Gibbons represents Prenzler, but Prenzler has petitioned Becker to let him hire his own lawyer.

Becker denied the petition without prejudice on May 6, but advised Prenzler that he can ask for a hearing in chambers.

A federal civil suit alleging similar bid rigging in St. Clair County remains pending.