NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Friday, January 4th, 2019

Federal judge: Campaign finance enforcement lawsuits against Tim Eyman can proceed

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.

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