Limited Liability Company Must Have A Lawyer To Prosecute Appeal

Wabash Environmental Technologies, a limited liability company, was convicted of violating the Clean Water Act. The company was ordered to pay restitution and was placed on probation. After Wabash failed to make payments under the original restitution order, the company agreed to another payment schedule with the government.

The case then was dismissed, and Wabash appealed. But Wabash was represented in the appeal by one of its members, who was not a lawyer. The issue was whether, like a corporation, Wabash was prohibited from proceeding without a lawyer. The Seventh Circuit Court of Appeals dismissed Wabash’s appeal and ruled that it could not appeal without a lawyer.

There are many small corporations and corporation substitutes such as limited liability companies. But the right to conduct business in a form that confers privileges, such as the limited personal liability of the owners for tort or contract claims against the business, carries with it obligations one of which is to hire a lawyer if you want to sue or defend on behalf of the entity. 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 … From that standpoint there is no difference between a corporation and a limited liability company, or indeed between either and a partnership, which although it does not provide its owners with limited liability confers other privileges, relating primarily to ease of formation and dissolution. That is why the privilege of pro se representation is, as we noted, denied to partnerships too.

Read the whole case, U.S. v. Hagerman, No. 08-2670 (9/26/08), by clicking here.