Property owners in bid rigging class action seek to re-join Madison County following Bathon’s deposition

By Heather Isringhausen Gvillo | Aug 30, 2017

EDWARDSVILLE – After Madison County was dismissed by the Fifth District Appellate Court from a class action alleging several tax buyers participated in a bid rigging scheme with former Treasurer Fred Bathon, the class of property owners filed a motion to amend their complaint to re-join Madison County to the action.

EDWARDSVILLE – After Madison County was dismissed by the Fifth District Appellate Court from a class action alleging several tax buyers participated in a bid rigging scheme with former Treasurer Fred Bathon, the class of property owners filed a motion to amend their complaint to re-join Madison County to the action.

In a motion filed Aug. 24, the plaintiffs argue that Bathon’s deposition was taken May 11 after he was released from incarceration.

During his deposition, Bathon allegedly testified that numerous Madison County officials knew of, and participated in, the alleged conspiracy.

The plaintiffs now wish to amend their complaint to add the new facts from Bathon’s testimony and re-join Madison County to the action.

They claim the other defendants will not be prejudiced as they will allege no new counts against them.

No details of the alleged new information were provided in the motion to amend.

After the Fifth District was directed by the Illinois Supreme Court to hear an appeal filed by Madison County, tax buyer defendants and auctioneer James Foley on class certification, the appellate court excused Madison County and Madison County Board Chairman Kurt Prenzler from the proceedings.

Justice Thomas Welch wrote that nothing in statutory language allows a delinquent property tax owner to bring a statutory sale in error cause of action against the county.

On March 31, Associate Judge William Becker, who presided over the case by special assignment as a visiting judge from Clinton County, entered an order dismissing with prejudice count II of the second amended complaint for Madison County and count VIII pursuant to the appellate court’s direction.

In their complaint, the plaintiffs claim Bathon arranged for tax buyers to charge interest at the maximum legal limit of 18 percent at auctions of delinquent property taxes from November 2005 to November 2008.

Bathon served a sentence after pleading guilty in 2013 to violating the Sherman Antitrust Act. Tax buyers Scott McLean, Barrett Rochman and John Vassen also served sentences.

The defendants signed a stipulation of facts stating that Bathon implemented a “no-trailing bid” policy at the tax auctions to reward campaign contributors. The tax buyers also reached “an implicit mutual understanding” to submit collusive and noncompetitive bids for the maximum rate at the tax auctions in question.

On Aug. 21, defendant Dennis Ballinger Jr. filed a motion for summary judgment through attorneys Gordon Nash and Daniel Delaney of Drinker Biddle & Reath LLP in Chicago.

Ballinger is held liable for claims that the plaintiffs’ paid higher penalty amounts on their property taxes.

Ballinger argues that there is no genuine issue as to any material fact on multiple elements of each of the plaintiffs’ claims. He claims he is entitled to judgment as a matter of law.

In a memorandum in support of Ballinger’s motion for summary judgment, Delaney wrote that Ballinger “neither attended any of the allegedly rigged auctions, nor had anyone purchase delinquent taxes at such auctions on his behalf, nor made any campaign contributions to Bathon.”

“After years of discovery, Plaintiffs have also failed to adduce any evidence that Ballinger had a single communication of any kind with any tax buyer or Madison County employee about how these auctions would be conducted or what any tax buyer would bid at such auctions,” he added.

Delaney explains that Ballinger is an officer and owns a partial interest in Empire Tax Corporation and Vista Securities Inc., “which are each corporations with other shareholders and employees and engaged in the real estate investment business, including the purchase of delinquent taxes.”

However, he wrote that Ballinger did not personally purchase any delinquent taxes at any of the Madison County auctions or anywhere else at any time and did not even attend the allegedly rigged auctions.

Ballinger’s brother, father or mother may have bid at the Madison County auctions in question on behalf of Empire or Vista, but the defendant allegedly had no communications with any of them about the auctions either, the memorandum states.

"In short, after years of discovery in this case, Plaintiffs have no viable basis to hold Ballinger liable for any civil conspiracy claim concerning the Madison County tax auctions,” Delaney wrote.

“Even if Plaintiffs could show that someone acting for Empire or Vista at those auctions had done something wrong – and they have not done that either – such conduct would not make Ballinger liable for civil conspiracy simply because he was an officer in Empire and Vista and owned some of their stock,” he added.

Delaney also argues that the plaintiffs fail to prove that Ballinger received any money of any kind from any plaintiff or class member, making summary judgment on their money had and received claim appropriate.

Further, Delaney argues that the plaintiffs’ Antitrust Act claims fail.

“The undisputed evidence shows that Ballinger neither has monopoly power nor made any attempt to acquire it. Indeed, Ballinger has no share of the relevant market and did not try to get any.

“It is undisputed that Ballinger did not even attend the Madison County tax auctions at issue and never purchased any delinquent taxes anywhere. Any alleged ‘monopoly power’ of Empire or Vista is irrelevant to Ballinger.

“There is utterly no basis to conclude that Ballinger either established, maintained or used monopoly power over those auctions or that he attempted to acquire such monopoly power there,” Delaney wrote.

Associate Judge J. Marc Kelly of the Fourth Judicial Circuit Court in Fayette County was assigned to the case on April 19.

A jury trial is currently scheduled for January 2018.

Madison County Circuit Court case number 13-L-276

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Drinker Biddle & Reath LLP Madison County Madison County Circuit Court

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