Lawyers accused of trashing judge appeal $5,000 fines

Pioneer Press, Minnesota/January 20, 2012

Two lawyers associated with a Wisconsin religious group are appealing the twin $5,000 fines a bankruptcy judge slapped on them this month for accusing the judge and others of being part of a Roman Catholic conspiracy.

But as other judges, lawyers and parties to lawsuits could tell U.S. Bankruptcy Judge Nancy Dreher, she shouldn't hold her breath waiting for attorneys Naomi Isaacson and Rebekah Nett to pay up, even if they lose the appeals.

"They just don't pay their bills. They don't pay the judgment. If you want to call it 'winning by losing,' that is their strategy," said Thomas Wickham Schmidt, an attorney in Green Bay, Wis., who represented a client who sued a racetrack owned by the Dr. R.C. Samanta Roy Institute of Science and Technology Inc., or SIST, a group with which Isaacson and Nett are connected.

Former members call the group a religious cult.

A SIST subsidiary still hasn't paid Schmidt's client the $190,000 judgment that a federal jury in Wisconsin awarded it in September 2008 and an appeals court later upheld.

Although the judge in that case fined Nett $5,000 for "badgering and harassment" and comments similar to those that got her in trouble with Dreher, she has paid only $500.

On Jan. 4, Dreher fined Nett and Isaacson $5,000 each for religious slurs and accusations they included in a motion they filed in a bankruptcy case involving Yehud-Monosson USA Inc., a wholly owned subsidiary of SIST.

The judge also issued a warrant ordering Isaacson's arrest, but U.S. marshals haven't located her. The judge found Isaacson in contempt of court for refusing to give the court-appointed bankruptcy trustee records from the bankrupt business.

Isaacson, 37, of Minneapolis did not reply to phone messages or emails seeking comment. She was president of the bankrupt business and is CEO of SIST. That nonprofit educational group grew from the Disciples of the Lord Jesus, which was founded in Shawano, Wis., in the 1970s by an Indian immigrant who now goes by the name Avraham Cohen.

Nett, 36, of St. Paul did not reply to phone messages or an email. She represents Yehud-Monosson in its bankruptcy and has represented SIST subsidiaries in other bankruptcies and lawsuits.

Martin Cole, director of the Minnesota Lawyers Professional Responsibility Board, has confirmed that both lawyers are under investigation.

Nett filed notices of appeal of the two sanctions and the contempt order Wednesday evening. She also filed notices that she wants the appeals heard by a U.S. district judge.

A bankruptcy appellate panel usually handles appeals from bankruptcy court. But those filing an appeal can opt to have it heard by a U.S. district judge.

A spokeswoman for the district clerk's office said they don't keep records on which lawyers have been sanctioned or how much they've been ordered to pay. But S. Steven Prince, a Minneapolis lawyer who handles bankruptcies, said such discipline is rare in bankruptcy court.

"In my experience, sanctions in the Minnesota bankruptcy court are unusual, but so are parties who so steadfastly refuse to do what the court directs them to do," said Prince, of the firm Leonard, Street and Deinard.

Last week, Prince was a panelist on a Hennepin County Bar Association continuing legal education course titled, "The Intersection of the First Amendment, the Rules of Professional Conduct and the Limits of Zealous Advocacy: The Yehud-Monosson USA Inc. Bankruptcy Case."

Dreher gave Isaacson and Nett 90 days to pay their fines. But in March, U.S. District Judge William Griesbach in Green Bay gave Nett 21 days to pay a $5,000 sanction for "gratuitous and offensive comments" she made in filings in a case in his court.

In that case, Nett represented a SIST subsidiary, Midwest Amusement Park LLC. A Canadian company, MMG Financial Corp., sued Midwest Amusement, claiming it refused to pay for go-karts it had purchased and MMG financed.

As she would do later in Dreher's court, Nett filed pleadings accusing Griesbach of being part of a conspiracy out to get SIST. She likened the judge's rulings to the Nazis' treatment of Jews.

Griesbach wrote that Nett's claims "are not worthy of any professional, because no one with a high-school education could suppose that losing a civil case about go-karts would have any relationship to the things Jews suffered under Hitler."

Nett contested that sanction, too, but the 7th U.S. Circuit Court of Appeals told her the sanction wasn't appealable. The appeals court also upheld the jury verdict awarding MMG Financial $190,000, but Schmidt said the company's president, Malcolm McMaster, hasn't seen a penny.

"It's sort of an international embarrassment," Schmidt said of McMaster. "It's embarrassing to explain to him how somebody can lose a case and just ignore the judgment. He's gotten pretty frustrated about the whole U.S. legal system."

As in the Yehud-Monosson case, the lawyers opposite Nett and Isaacson complained that the two weren't turning over records they were required to provide.

"Getting documents out of them is like pulling teeth, if not more difficult," said Schmidt. "They simply don't turn stuff over, even if a court orders it."

He said he and Nett had "an ongoing discovery dispute about records. We'd ask for records and she simply wouldn't give them to us."

Nauni Manty, the court-appointed trustee in the Yehud-Monosson bankruptcy, has made the same complaint to Dreher and her predecessor in the case, U.S. Bankruptcy Judge Dennis O'Brien.

Although both judges have ordered Nett and Isaacson to turn over numerous documents - including records Isaacson has admitted under oath existed - they have refused.

At times, those refusals have been defiant, such as when Isaacson refused a court order to provide Manty with Cohen's address, replying, "I am not her clerk or secretary. She has staff that can obtain Dr. Cohen's address rather than asking me to do her dirty job."

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