The State of Washington has a green light to move ahead with its campaign finance enforcement lawsuits against Tim Eyman despite his recent filing for bankruptcy, a federal judge ruled today after a hearing in the Seattle federal courthouse.
After hearing presentations by Linda Dalton of Attorney General Bob Ferguson’s campaign finance unit and attorneys for Tim Eyman, the Honorable Marc Barreca agreed that the State’s cases against Eyman fall within the police or regulatory power exception to the provision of the United States Code that automatically pauses civil proceedings against a person or entity that files for bankruptcy.
The relevant federal statute is 11 U.S. Code § 362 (Automatic Stay). This provision states that an action such as the State of Washington’s lawsuits against Tim Eyman are exempted from the automatic stays granted to bankruptcy filers.
… the commencement or continuation of an action or proceeding by a governmental unit … to enforce such governmental unit’s or organization’s police and regulatory power, including the enforcement of a judgment other than a money judgment, obtained in an action or proceeding by the governmental unit to enforce such governmental unit’s or organization’s police or regulatory power …
11 U.S.C. §362(b)(4)
Eyman’s November 28th bankruptcy filing caused Ferguson’s office to cancel depositions and pause its work to hold the disgraced initiative promoter accountable. Thankfully, that work can now resume.
“Mr. Eyman has engaged in a pattern of seeking to avoid accountability,” said Attorney General Bob Ferguson in a statement provided to NPI.
“From refusing to fully cooperate with our investigation, repeatedly failing to comply with court orders, not answering questions under oath, and now using the bankruptcy process in a bad-faith effort to delay our case, Mr. Eyman continues to engage in a pattern of stall tactics to avoid accountability to the people and the State for his misdeeds. It’s not going to work.”
Stonewalling in the extreme is how we have characterized Eyman’s legal defense strategy here on the Cascadia Advocate and at Permanent Defense, our project that fights right wing initiatives. It’s an apt characterization considering the elaborate measures Eyman has taken to slow the case down and drag it out.
Eyman and his lawyers conceded in advance of the judge’s ruling that the state’s suits fell within the police and regulatory power exception.
They did try to buy Eyman more time, arguing that since Eyman has just switched his legal counsel again (the disgraced initiative promoter is now on his third set of attorneys), it would be unfair to Eyman for the state’s lawsuits to resume before the bankruptcy court signed off on the appointments of Eyman’s new legal team.
But Judge Barreca didn’t go for it.
“That’s just a risk he is going to have to take,” the judge said to attorney Joel Ard after Ard explained that Eyman is in between lawyers. Eyman’s original attorney, Mark Lamb, no longer represents Eyman in any matters, Ard said.
Ard is taking over as one of Eyman’s new attorneys, but he will not officially be part of Eyman’s bankruptcy team at the federal level until Barreca approves his appointment. Barreca directed Ard to submit an amended application by January 10th, and set a hearing date for January 17th.
Barreca also read from the bench a proposed comfort order requested by the State of Washington, which he approved with slight modifications.
A comfort order, as elegantly defined by Federal Judge Karen S. Jennemann back in 2006, is “a bankruptcy term of art for an order confirming an undisputed legal result, and often is entered to confirm that the automatic stay has terminated.”
Barreca’s order is thus a confirmation that there is no automatic stay preventing the State of Washington from moving forward in its long-running efforts to hold Tim Eyman accountable for his lawbreaking.
(Although Eyman has whined that he is being “persecuted” by Ferguson, the cases against him were not instigated by the Attorney General. Rather, they all stem from complaints filed by Keep Washington Rolling, Washingtonians For Ethical Government, and WFEG’s individual governing members… like me!)
While the State will be able to resume working on its campaign finance enforcement suits, Eyman’s attorneys noted correctly that the exemption from the stay does not allow the state to collect monetary judgments without the approval of the bankruptcy court during the duration of the bankruptcy proceedings.
NPI will continue monitoring this complex, multilayered litigation in the weeks and months ahead. It may seem like Tim Eyman is akin to a slippery eel, but he has by no means escaped justice. He’s in a lot of trouble and is up against a lawman who is just as tough as he is… the esteemed, hardworking Bob Ferguson.