United States v. Wabash Environmental Technolog ( 2008 )

In the
United States Court of Appeals
For the Seventh Circuit
Nos. 07-3874, 07-3875
U NITED STATES OF A MERICA,
Plaintiff-Appellee,
v.
D ERRIK H AGERMAN and W ABASH ENVIRONMENTAL
TECHNOLOGIES, LLC,
Defendants-Appellants.
Appeals from the United States District Court
for the Southern District of Indiana, Indianapolis Division.
No. 1:06CR00139—David F. Hamilton, Chief Judge.
SUBMITTED N OVEMBER 13, 2008—D ECIDED D ECEMBER 5, 2008
Before POSNER, ROVNER, and EVANS, Circuit Judges.
POSNER, Circuit Judge. The defendants, Wabash Environ-
mental Technologies, LLC, and its president, Hagerman,
were convicted of making false statements in violation of
the Clean Water Act, and they appeal. We affirm the
judgments in an unpublished order issued today, and
2 Nos. 07-3874, 07-3875
limit this opinion to a threshold issue that happens to be
the single point of novelty in the appeals.
In previous appeals by these parties in a related civil case,
we ruled that a limited liability company (which Wabash
is), like a corporation, cannot litigate in a federal court
unless it is represented by a lawyer. United States v.
Hagerman, 545 F.3d 579, 581-82 (7th Cir. 2008) (“the right
to conduct business in a form that confers privileges, such
as the limited personal liability of the owners for tort or
contract claims against the business, carries with it obliga-
tions one of which is to hire a lawyer if you want to sue
or defend on behalf of the entity. Pro se litigation is a
burden on the judiciary, and the burden is not to be
borne when the litigant has chosen to do business in
entity form. He must take the burdens with the benefits”
(citations omitted)). See generally Jones v. Niagara Frontier
Transportation Authority, 722 F.2d 20 (2d Cir. 1983). In the
present case Wabash was represented by a lawyer both
in the district court and in this court. The lawyer filed both
an opening brief and a reply brief on behalf of the company.
But then Hagerman fired the lawyer, who moved us for
leave to withdraw from the case, which we granted. The
question is whether, even though Wabash’s appeal has
been fully briefed, we should dismiss it because Wabash
is no longer represented and, not being a natural person,
cannot litigate in federal court unless it is represented.
We cannot find a case that has addressed this issue. The
nearest is Dial-A-Mattress Franchise Corp. v. Page, 880 F.2d
675 (2d Cir. 1989). The district court had entered a pre-
liminary injunction against trademark infringement and
Nos. 07-3874, 07-3875 3
related business torts by the defendant, Page. A week before
the appeal was argued, Page incorporated his business.
While noting that corporations are not permitted to appear
pro se and that ordinarily “this would preclude Page, who
is not an attorney, from pursuing this appeal on behalf of”
the corporation, the court of appeals ruled that because the
injunction was “targeted at Page personally” and not his
company, and “because Page has a right to appear on his
own behalf to appeal an injunction that orders him person-
ally to take specific action,” the appeal could proceed
without counsel. Id. at 677. He was, after all, the appellant,
and the incorporation was irrelevant to the appeal.
The usual course when a litigant not entitled to litigate
pro se loses its lawyer in the midst of the case is to give it a
reasonable opportunity to find a new one, Pecarsky v.
Galaxiworld.com Ltd., 249 F.3d 167, 171-73 (2d Cir. 2001);
Bristol Petroleum Corp. v. Harris, 901 F.2d 165, 166-68 (D.C.
Cir. 1990); United States v. 9.19 Acres of Land, 416 F.2d 1244(6th Cir. 1969) (per curiam), and, if it fails, either to dismiss
the case, Scandia Down Corp. v. Euroquilt, Inc., 772 F.2d 1423,
1427 (7th Cir. 1985); In re Bigelow, 179 F.3d 1164 (9th Cir.
1999); Palazzo v. Gulf Oil Corp., 764 F.2d 1381, 1386 (11th Cir.
1985), or enter a default judgment. Employee Painters’
Trust v. Ethan Enters., Inc., 480 F.3d 993, 998 (9th Cir. 2007);
Grace v. Bank Leumi Trust Co., 443 F.3d 180, 192 (2d Cir.
2006). Hagerman fired Wabash’s lawyer, who was also his
lawyer, months ago, and by now it is clear that he has
no intention of hiring a new one. Since Wabash (controlled
by Hagerman) has therefore refused without excuse to
find a new lawyer, we would be justified in dismissing
its appeal.
4 Nos. 07-3874, 07-3875
Justified, but not compelled. One way to treat a willful
act by an appellant that constitutes a ground for dismissal
is to treat the act as if it were a motion for a voluntary
dismissal of the appeal, which the court can grant upon
terms fixed by it, Fed. R. App. P. 42(b)—but doesn’t have to
grant at all. Wisconsin v. Ho-Chunk Nation, 463 F.3d 655, 658
(7th Cir. 2006); Albers v. Eli Lilly & Co., 354 F.3d 644, 646
(7th Cir. 2004) (per curiam); Michael v. Horn, 459 F.3d 411,
418 (3d Cir. 2006); Shellman v. United States Lines, Inc., 528
F.2d 675, 677-78 (9th Cir. 1975). In this case, with the appeal
fully briefed and the merits free from doubt, we would be
mistaken to grant the (imputed) motion. For that would
allow Wabash to argue in future regulatory proceedings
that the merits of its defense had never been fully adjudi-
cated. We have thought it best, therefore, to affirm the
judgment of the district court in order to lay to rest any
doubt about the company’s guilt. But it bears emphasis that
at any point in a federal litigation at which a party that is
not entitled to proceed pro se finds itself without a
lawyer though given a reasonable opportunity to obtain
one, the court is empowered to bar the party from
further participation in the litigation.
A FFIRMED.
12-5-08