McCaffrey v. Gatekeeper USA, Inc

Background

Timothy Andrew McCaffrey brought the action against Gatekeeper USA, Inc., Asgard International, Inc., Ares Ventures Inc., A. John Leontakiankos, and John Seetoo. The opinion states that McCaffrey alleged securities fraud and negligent misrepresentation. McCaffrey was proceeding without a lawyer.

The corporate defendants’ lawyer withdrew in September 2018, and the defendants did not retain new counsel. Because corporations cannot represent themselves without lawyers, the court entered default judgment against the corporate defendants on liability on December 13, 2018. On March 28, 2022, the court entered summary judgment against all defendants. The court stated that punitive damages could not be resolved on summary judgment. The parties elected to proceed to a jury trial limited to punitive damages.

At a May 10, 2022 conference, Leontakianakos and Seetoo expressed interest in obtaining volunteer lawyers for that limited trial. They later filed a joint request and submitted forms seeking permission to proceed without paying court fees. The court treated the joint request as two separate requests because joint representation could create a conflict of interest.

Legal standard

Under 28 U.S.C. § 1915(e)(1), a court may ask a lawyer to volunteer to represent a person who cannot afford counsel. In a civil case, the court is not required to provide a lawyer, and it cannot force a lawyer to accept the representation or pay the lawyer’s fees. The court must exercise its discretion and request volunteer counsel sparingly.

The court applied factors from Hodge v. Police Officers. First, the person must show an inability to afford counsel. The court then considers whether the person’s position appears likely to have substance and examines factors such as the ability to investigate facts, the need for cross-examination, the complexity of the legal issues, and the person’s ability to present the case.

Court’s analysis

The court found that both individual defendants were unable to afford counsel. Leontakianakos reported serious medical problems, that he had not worked since 2016, less than $500 in cash, checking, or savings, and a home in foreclosure. Seetoo reported limited recent freelance earnings, $2,500 in cash, checking, or savings, monthly rent and utilities of $4,200, and more than $400,000 in debt. The defendants also reported that they had contacted four law firms but could not afford new retainer fees.

The court treated the requirement that the defendants’ defenses appear likely to have substance as satisfied. It reasoned that experienced lawyers would be better able than the defendants to identify substantial defenses, particularly because the trial would proceed whether or not the defendants had representation.

The court also found that volunteer lawyers would be more likely to produce a fair result. It identified the concern that a plaintiff proceeding without a lawyer would be trying the case against defendants also proceeding without lawyers. The court found that the individual defendants, as nonlawyers, had limited ability to present the case to a jury and that conflicting evidence requiring cross-examination would be important at trial.

Order and scope of representation

The court directed the Clerk of Court to attempt to locate one volunteer lawyer for Leontakianakos and a different volunteer lawyer for Seetoo. The order did not guarantee that a lawyer would accept the case. The court also stated that the requested representation would cover only the matters described in the order, would not include an appeal, and would end when judgment was entered on punitive damages or when counsel filed a notice of completion.

The court directed the clerk to seek the volunteer lawyers; it did not state that lawyers had already agreed to represent either defendant.