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LLCs must have attorneys in federal court

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Owners of limited liability companies must be represented by an attorney to appeal a decision in federal court, ruled the 7th Circuit Court of Appeals today. Because a company and its president appealed a District Court's decision without an attorney, the appellate court dismissed the appeal.

In United States of America v. Derrik Hagerman and Wabash Environmental Technologies, LLC, No. 08-2670, Wabash and its president, Derrik Hagerman, appealed the District Court's dismissal of the government's petition for relief after Wabash agreed to start paying restitution and furnish specific financial information. The defendants were convicted of criminal violations of the Clean Water Act and ordered to pay $250,000 in restitution and placed on five years of probation.

The 7th Circuit dismissed Hagerman's appeal because he wasn't a party to the probation-violation proceeding and no order naming him was entered, wrote Judge Richard Posner. Wabash's appeal also must be dismissed because they are proceeding pro se with the appeal, which can't be done in a federal court.

Hagerman claimed, as president and "member" of Wabash, he can represent the company in proceedings. But corporations aren't permitted to litigate in federal court unless represented by an attorney who is licensed to practice in that court, and the same applies to LLCs, wrote the judge. Even though the appellate court hadn't ruled on whether an LLC can litigate only if represented by a lawyer, the same rule applies.

The right to conduct business confers privileges, and one of those is the obligation to hire an attorney if you want to sue or defend on behalf of the company, Judge Posner wrote.

"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," he wrote.

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  1. Your article is a good intro the recent amendments to Fed.R.Civ.P. For a much longer - though not necessarily better -- summary, counsel might want to read THE CHIEF UMPIRE IS CHANGING THE STRIKE ZONE, which I co-authored and which was just published in the January issue of THE VERDICT (the monthly publication of the Indiana Trial Lawyers Association).

  2. Thank you, John Smith, for pointing out a needed correction. The article has been revised.

  3. The "National institute for Justice" is an agency for the Dept of Justice. That is not the law firm you are talking about in this article. The "institute for justice" is a public interest law firm. http://ij.org/ thanks for interesting article however

  4. I would like to try to find a lawyer as soon possible I've had my money stolen off of my bank card driver pressed charges and I try to get the information they need it and a Social Security board is just give me a hold up a run around for no reason and now it think it might be too late cuz its been over a year I believe and I can't get the right information they need because they keep giving me the runaroundwhat should I do about that

  5. It is wonderful that Indiana DOC is making some truly admirable and positive changes. People with serious mental illness, intellectual disability or developmental disability will benefit from these changes. It will be much better if people can get some help and resources that promote their health and growth than if they suffer alone. If people experience positive growth or healing of their health issues, they may be less likely to do the things that caused them to come to prison in the first place. This will be of benefit for everyone. I am also so happy that Indiana DOC added correctional personnel and mental health staffing. These are tough issues to work with. There should be adequate staffing in prisons so correctional officers and other staff are able to do the kind of work they really want to do-helping people grow and change-rather than just trying to manage chaos. Correctional officers and other staff deserve this. It would be great to see increased mental health services and services for people with intellectual or developmental disabilities in the community so that fewer people will have to receive help and support in prisons. Community services would like be less expensive, inherently less demeaning and just a whole lot better for everyone.

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