Defendant accused in Madison County bid rigging scheme calls proposed class notice 'incorrect and confusing'

By Heather Isringhausen Gvillo | Nov 9, 2018


Several tax-buyer defendants have joined auctioneer James Foley’s objection and motion to strike the proposed class notice in a suit alleging the defendants participated in a bid rigging conspiracy with former Madison County Treasurer Fred Bathon.

The proposed notice was filed Oct. 23 and describes the litigation and lists options for potential class members.

“This notice tells you about the class, the lawsuit, your right to participate in, and your right to opt out of, the class,” the notice states.

Foley filed an objection and motion to strike the plaintiffs’ notice of the pending class action on Oct. 30 through attorneys Ann Barron, Patrick Cloud and Michael Schag of Heyl Royster Voelker & Allen in Edwardsville.

Foley argues that the notice is “incorrect and confusing.”

“Mr. Foley requests that this motion be granted and that plaintiffs be required to correct and clarify the notice to ensure that it comports with due process,” the motion states.

Foley alleges the plaintiffs used a different class definition in their notice than the one that was certified by the court. Specifically, the approved class definition is directed to property owners with a penalty rate bid of 12 percent or higher while the proposed class notice lowers it to a penalty rate bid in excess of 0 percent.

The class certified by the court is defined as “all persons who owned any parcel of property that was sole at a Madison County tax sale auction in the years 2005, 2006, 2007 and/or 2008 and with respect to which a Certificate of Purchase was obtained at such auction in response to a penalty rate bid of 12 percent or higher. This class does not include any property owners whose property was not bid upon at the relevant tax sale and was therefore forfeited to the State of Illinois.”

The class definition provided in the plaintiffs’ notice is directed to “all persons who owned any parcel of property that was sold at a Madison County Tax sale auction in the years 2005, 2006, 2007, and/or 2008 with respect to which a Certificate of Purchase was obtained at such auction in response to a penalty rate bid in excess of 0 percent.”

Foley also argues that Dawn Bueker, Jason Moss and Christine Moss were withdrawn as named class representatives in December 2014, but they were included as plaintiffs in the notice.

“There is no indication in the notice of the correct parties and that the Moss’s are (presumably) again pursuing this matter as plaintiffs, but not as class representative plaintiffs,” the motion states.

Foley further argues that the notice fails to include “clear, concise, plain and easily understood language of the matters at hand.”

Foley claims the plaintiffs “imply that the class will be certified in the future with respect to ‘the determination of damages’ when in fact the Illinois Appellate Court directed that ‘we partially decertify the class for the individual damages determination in light of the need for individualized proof.’”

He also claims the notice implies “that there is a class pending against Madison County, when in fact, there is not. Moreover, the notice implies that Mr. Foley has records which suggest the recipient might be a class member. As plaintiffs know, Mr. Foley does not have such records.”

Foley also argues that the notice did not include a plan for how it will be provided to absent class members.

“And it is not clear if plaintiffs intend to give notice to all individuals whose property taxes were available for sale at the tax sales in 2005, 2006, 2007, and 2008 or only those individuals who meet the class definition,” the motion states.

Joe Vassen, John Vassen and VI Inc. filed a motion to join Foley’s objection on Oct. 31 through attorney Paul Slocomb of Hoffman & Slocomb LLC in St. Louis.

John Scott, Scott McLean, Land of Lincoln Securities LLC and Prairie State Securities Inc. also filed a motion to join the objection on Nov. 5 through attorney Mark McLean of McCarthy Leonard & Kaemmerer LC in Town and Country, Mo.

Plaintiff attorney Nelson Mitten of St. Louis filed the bid-rigging suit on behalf of a class of individuals who allege Bathon arranged for tax buyers to charge interest at the maximum legal limit of 18 percent at auctions of delinquent property taxes from 2005 to 2008.

The plaintiffs allege Bathon conspired with each tax purchaser defendant to establish a “no trailing bid” policy, meaning the process required one-time, simultaneous bidding. Rather than allowing a series of bids, all bidders had to bid at once, with the auctioneer accepting the lowest bid that was heard.

The defendants allegedly then made an agreement with Bathon to bid the maximum of 18 percent in the simultaneous bidding.

Bathon was charged in February 2013 with violating the Sherman Antitrust Act. He pleaded guilty the same day. Defendants Scott McLean, Barrett Rochman and Joe Vassen also entered guilty pleas to federal antitrust charges in October 2013.

Mitten filed the third amended complaint Sept. 25 after Kelly of Fayette County granted their request to re-join Madison County and Madison County Board Chairman Kurt Prenzler as defendants.

They had been previously excused by the Fifth District Appellate Court on an appeal regarding class certification.

Since the plaintiffs’ third amended complaint had been filed, several defendants have filed motions for summary judgment.

The defendants have made various arguments in their motions, including allegations that the plaintiffs’ claims are barred by the statute of limitations and that several defendants were not involved in a conspiracy with respect to sales of delinquent property taxes in Madison County.

Madison County Circuit Court case number 13-L-276

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