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8th Circuit Threatens to Sanction Rogue 'Show Me the Note' Lawyer

By Aditi Mukherji, JD on July 18, 2013 | Last updated on March 21, 2019

The (fed up) Eighth Circuit Court of Appeals threatened to impose its own sanctions on a rogue “show me the note” attorney in Minneapolis for continuing to file appeals, using legal arguments that have been repeatedly rejected by the district court in Minnesota as well as the federal appeals court.

Foreclosure attorney William B. Butler is already in the disciplinary hot seat with the federal district court in Minnesota and the Minnesota Lawyers Professional Responsibility Board, reports the Minneapolis Star Tribune.

This is the third time in five days that the Eighth Circuit appeals panel has upheld the dismissal of a Butler lawsuit. As it turns out, the third time is not the charm.

The three-judge appeals court panel upheld a decision by U.S. District Judge Patrick Schiltz, who dismissed a case filed by Butler last year.

The panel called Butler's continued rehashing of arguments "troubling," and said his actions reveal "the intention of deceiving or misleading the court into ruling in his favor." At the very least, the court went on to say, "it suggests he lacks a non-frivolous basis for appeal. Such conduct may provide a basis for this court to impose its own sanctions in the future."

In his August ruling, Schiltz imposed sanctions totaling $79,766. Not surprisingly, Butler went rogue and said he will not pay the sanctions, insisting that his position is correct, the courts are wrong and that he will eventually prevail. The sanctions now total well over $300,000, according to the Star Tribune.

The appeals court quoted Schiltz and his "dozen or so" rhetoric to sum up Butler's strategy:

First, Butler collects a group of "a dozen or so" people who are facing foreclosure. He then gins up "a dozen or so" claims against "a dozen or so" defendants grounded mostly on his characteristic "show me the note argument" -- that the foreclosing entity no longer possesses the original foreclosure borrowing note, making the foreclosure invalid. He makes sure to fraudulently join a single non-diverse defendant (typically a law firm that represented one of the lenders in a foreclosure proceedings) in an attempt to block removal to federal court.

Generally, the defendants remove the cases to federal court, and Butler then moves to remand. If the judge denies Butler's motion, he has a habit of voluntarily dismissing it and re-filing in state court within a day or two, which is a sneaky way of starting the process all over again. To hide his conduct, Butler will reorder the named plaintiffs or substitute a new plaintiff for one of the old plaintiffs, so that the re-filed case will have a different caption.

When Butler's claims are finally challenged on the merits, he "makes false representations" and "[uses] absurd arguments in the hope that their sheer weight and number, multiplied by the number of parties and claims, will overwhelm his opponents and the court ..."

As the old saying goes: If at first you don't succeed, try, try again -- unless, that is, you're going to get sanctioned.

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