Several defendants accused of participating in a Madison County bid-rigging scheme object to the plaintiffs’ proposed class notice, arguing that they have not been found liable and should not be required to bear the burden of the notice costs.
Attorney Steven Giacoletto of Collinsville filed the motion to approve class notice on behalf of the plaintiffs on July 9.
In the motion, Giacoletto argues that because the class action was certified by the circuit court and the Fifth District Appellate Court, except as to damages, “it should be the responsibility of defendants to arrange for class action notice to be served on potential class members by way of direct mailings, electronic mail, a website, newspaper publications, and any other manner deemed appropriate by the court, and that the defendants likewise bear the financial costs of said notices being served.”
Defendant James Foley filed an objection to the plaintiffs’ motion to approve class action notice on July 30 through attorney Ann Barron of Heyl Rosyter Voelker & Allen PC in Edwardsville.
“For the second time plaintiffs have requested that this court approve their proposed class notice,” the motion states. “While plaintiffs have corrected some of the deficiencies in their original October 2018 proposed notice, they have not corrected all.”
Barron wrote that the class notice contains misstatements. She explains that Foley previously raised concerns that the original class notice implied that he maintained records suggesting who is a class member. Foley again denies having such records.
“Plaintiffs know that such a blanket statement is incorrect,” the motion states. “Before notice goes to absent class members, this misstatement must be corrected.”
Barron also seeks to delete a reference to “realtors & use plaintiffs” because those groups were not certified as a class.
Barron argues that the plaintiffs have failed to include a notice plan “other than to say that the defendants should give notice and bear the financial costs in any manner deemed appropriate by the court.”
“Neither case law nor statutes supports shifting the burden and cost of notice to defendants,” the motion states.
Barron adds that switching the burden to the defendants is “not consistent with plaintiffs’ requirements of being adequate class representatives.”
“Mr. Foley, as a defendant, should not be forced to determine what notice is appropriate or constitutional under the circumstances,” the motion states.
Barron wrote that a defendant has only been required to bear the costs of notice when liability of the defendant has been established.
“In this case, liability certainly has not been established,” the motion states. “This is particularly evident given Mr. Foley’s motion for summary judgment and his lack of presence at the 2008 tax sale.”
“The fact that Mr. Foley is a defendant does not mean that he should be forced to bear the costs of class notice and do plaintiffs’ work for them,” it continues.
Barron also noted that the plaintiffs failed to provide a hearing date in the notice regarding the defendants’ motions for summary judgment.
Several motions for summary judgment and replies in support of those motions were filed in January 2019.
The defendants seeking summary judgment 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.
The plaintiffs responded by filing memorandums in opposition to the defendants’ motions for summary judgment, arguing that there is “ample” evidence for the jury to find that the defendants agreed to the collusion and participated in the conspiracy.
Defendants Joe Vassen, John Vassen, V.I. Inc., Barrett Rochman, SI Securities LLC, Sabre Group LLC, CDBR LLC, Blue Sky Vinyards LLC, Kenneth Rochman, Land of Lincoln Securities LLC, Prairie State Securities Inc., Scott McLean, and John Scott have filed notices of joinder in Foley’s objection to the class action notice.
In Foley’s objection to the original notice, he argued that it was “incorrect and confusing.”
Foley argued that the plaintiffs used a different class definition in their notice than the one that was certified by the court. Specifically, the approved class definition includes a penalty rate bid of 12 percent or higher while the proposed class notice includes 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.”
Plaintiff attorney Nelson Mitten of St. Louis filed an amended bid-rigging suit on Sept. 25 on behalf of the class after Fayette County Judge Mark Kelly granted the plaintiffs leave to rejoin Madison County and former treasurer Kurt Prenzler as defendants.
They had been previously excused by the Fifth District Appellate Court on an appeal regarding class certification. Madison County has since been dismissed again from the class action.
In their complaint, the plaintiffs allege former treasurer Fred 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.
Mitten wrote that Bathon used a seating chart to ensure that the tax purchaser defendants would be recognized by the auctioneer and the Madison County employees conducting the sales as the winning bidders.
The plaintiffs allege that as the actions of the tax purchaser defendants became evident, other purchasers also began bidding higher than they otherwise would have.
“Because there was no or virtually no competitive bidding, the bidding was rigged, prices were fixed, and almost every single property was sold at the statutory maximum penalty percentage of 18%,” Mitten wrote.
The plaintiffs allege that in return for rigging the tax sales, Bathon received campaign contributions and support from tax purchasers
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.
Madison County Circuit Court case number 13-L-276