State Claims Sovereign Immunity, Failure to Notify, Statute of Limitations Kill EB-5 Lawsuit

Bollen Says Blame Everyone Else!

Once the 35 Chinese investors suing South Dakota and Joop Bollen for EB-5 visa investment trickery get their lawyer situation straightened out, their attorney’s will face some hard arguments from the state about why the court should even hear the plaintiffs’ case. In a motion to dismiss filed January 6, 2016, in Case #32CIV15-000312, the state says the LP6 Claimants have no case due to South Dakota’s sovereign immunity, the LP6 Claimants’ failure to properly notify the state of this lawsuit, and the expiration of a one-year statute of limitations. Former EB-5 czar and co-defendant Bollen coattails with the state’s arguments, demands that the state pay for his defense, and blames his old partners James Park and Richard Benda for any deceit.

The state (that’s us, remember) contends that the EB-5 investors who lost their shirts (well, their extra socks—folks who can buy green cards aren’t hurting for money) can’t sue South Dakota. Article 3, Section 27 of the South Dakota Constitution says that only Legislative action can waive the state’s immunity to law suits. The Legislature has never waived the sovereign immunity of the Governor’s Office of Economic Development, the Department of Tourism, or the department from which those two entities emerged and which ran EB-5 at the time of the EB-5 deception alleged by the LP6 Claimants. Thus, the Chinese investors can’t sue the state, unless they can demonstrate that the state violated either its own constitution or the United States Constitution.

Now the state does recognize that it can be sued—that’s why Chapter 3-22 creates a liability coverage program for public entities. But even if the court decides that sovereign immunity does not get South Dakota out of Dutch with the Chinese, South Dakota contends that the Chinese didn’t file proper notice ot launch the lawsuit. Check out SDCL 3-21-2:

3-21-2.   Notice prerequisite to action for damages–Time limit. No action for the recovery of damages for personal injury, property damage, error, or omission or death caused by a public entity or its employees may be maintained against the public entity or its employees unless written notice of the time, place, and cause of the injury is given to the public entity as provided by this chapter within one hundred eighty days after the injury. Nothing in this chapter tolls or extends any applicable limitation on the time for commencing an action [South Dakota Codified Law 3-21-2, amended 2007].

The plaintiffs allege injury between late 2009 and mid-2013. The defendants claim the state (specifically, the Attorney General and the commissioner of administration) has received no statutory notice of said injury.

Finally, the state says the plaintiffs waited too long. SDCL 21-32-2 sets the statute of limitations “on any claim on contract or tort against the state” at one year. The plaintiffs claim fraud. SDCL 15-2-3 says the clock starts ticking on a fraud case from the time that the aggrieved parties discover they’ve been defrauded. The state points to the Chinese investors’ filings as pegging their awareness of fraud to July 2013, when Northern Beef Packers declared bankruptcy. Their deadline to sue the state for fraud, says South Dakota, was July 2014 (right in the middle of Mike Rounds’s Senate campaign! Oh, what could have been!). The LP6 Claimants filed their suit on December 2, 2015.

Joop Bollen’s response to the plaintiffs’ complaint, filed January 8, 2016, is more of a mishmash, with allegations that the plaintiffs aren’t the real parties in interest, that the investors agreed to indemnify the defendants, and that he and his corporate alias-web went above and beyond their duties to help the investors get their green cards. Things get fun when Bollen claims that his status as a state employee entitles him to immunity and obliges us to pay for his defense, even for claims arising after he left state employment six years ago:

Joop Bollen, Answer and Counterclaim, LP6 Claimants v. South Dakota DTSD et al., Case #32CIV15-000312, filed 2016.01.08, p. 3.
Joop Bollen, Answer and Counterclaim, LP6 Claimants v. South Dakota DTSD et al., Case #32CIV15-000312, filed 2016.01.08, p. 3.

Bollen’s counterclaim stakes out a back-up position: if anyone did anything wrong, Bollen says his fault is “passive or secondary compared to the active primary fault of the Crossclaim State Defendants,” entitling him to complete indemnification from the state. Translation: Joop Bollen will have none of the state treating him the way the state treated its current fall guy, the deceased Richard Benda.

Ah, speaking of Bollen’s old partner, loan monitor, and travel buddy Benda:

Joop Bollen, Answer and Counterclaim, LP6 Claimants v. South Dakota DTSD et al., Case #32CIV15-000312, filed 2016.01.08, p. 4.
Joop Bollen, Answer and Counterclaim, LP6 Claimants v. South Dakota DTSD et al., Case #32CIV15-000312, filed 2016.01.08, p. 4.

Translation: if everything goes south, Bollen is ready to blame his old pal Richard Benda and the Korean lawyer buddy who helped save the original EB-5 pitchers from jail and then helped make a mess of Northern Beef Packers, James Park, for writing the allegedly fraudulent pitches on which the Chinese investors base their case.

Last I checked, the Chinese investors had not filed responses, and the state had not filed a response to Bollen’s counterclaim.

13 Responses to State Claims Sovereign Immunity, Failure to Notify, Statute of Limitations Kill EB-5 Lawsuit

  1. The federal government needs to get off its arse and lower the boom on the Joopster and on Mike Rounds, and the press needs to tell the public how Daugaard and Jackley have covered this whole thing up for Rounds by blaming the dead guy. These GOP cover-uppers didn’t even sue the live guy until it became clear the federal government was still on the case – forcing Daugaard/Jackley to do something besides simply looking the other way. If the federal government does what it should do, Rounds’s senate seat should become vacant this year, and Jackley’s governor campaign will be over before he ever announces. And I like Jackley personally, but he’s badly mismanaged the public trust he’s been given. All to cover up Rounds’s mismanagement of the public trust.

  2. The federal government, usins, needs to get off its arse and create a boom so that crooks and liars like Rounds and Joop have no place to be able to get away with this kind of fraud. If we could shed light on these shenanigans, that would be fine. Speaking of shining the light on things, here is what a real government can do for its people. I know I know, if France is so good, why don’t you move there, or something like that. We have an interstate that runs the length of this state and back again, twice. Why don’t we do something like this and make some moolah rather than letting con men like Rounds and the Dutchman flim flam our good state for their deep pockets?

  3. Justice delayed is justice denied. This has been the SDGOP game plan since that fatal day in October 2013. Run down the clock. You win the election. Keep running down the clock and you whoosh past the statute of limitations.

    The state’s defenders of justice are a pack of con artists. The feds are dolts. Maybe mere millions wasn’t enough money to draw the heat from the feds. It’s got to involve much higher stakes.

  4. this is kinda the reason rounds, daugaard, jackley and their lawyer minions at AG, NSU, Regents, GOED, dropped the ball and covered it up getting those three re-elected. The buck stops with those three. Joop deserves to be in jail.

  5. Eve Fisher

    When in doubt, always blame the dead guy.

  6. mike from iowa

    the LP6 Claimants’ failure to properly notify the state of this lawsuit,

    Seems to me one of the defendants failed to notify another of the defendants that the state was being sued and Bollen,hisownself,was lawyering for the state w/o proper credentials. Guess that doesn’t count against cronys,eh?

  7. John Wrede

    Somebody needs to remind South Dakota’s Office of Risk Management that there is such a thing as sovereign immunity. That office contracts with private law firms on a weekly basis to defend liability law suits of varying magnitude.

  8. Douglas Wiken

    The SD Republicans are like cats scratching dirt to cover up their crap.

  9. john-wasn’t rounds brother head of the risk department who didn’t notice the California federal suit against the state MFI referred to above?

    We WANT the Chinese lawsuit to move forward to expose rounds, daugaard and jackley’s lack of oversight, abetting, and cover-up. rounds does not deserve his seat as is true for the other two given their duplicity. sovereign immunity impunity!!! these three have already cost the state so much over EB5 that one more suit might rub their faces in it. we need a just civil verdict, at least. imo

  10. Roger Elgersma

    One year statute of limitations sounds to short, but in a conservative state that wants business to get by with any thing, what should we expect.

  11. in a similar matter where an elected official hides malfeasance, evidence and political duplicity to avoid bad press prior to election like rounds, jackley and daugaard apparently did;

    Their corollary is Presidential hopeful, CHRIS CHRISTIE also a republican lawyer like two of our three politicians, likely costing the state millions to keep secrets hidden;

    “”It’s been investigated [THE TRAFFIC CLOSURE IN NEW JERSEY] by three different agencies, two of them led by Democrats, they all concluded the same thing: that I had nothing to do with it,” he said, according to the Newark Star-Ledger.

    In fact, as the newspaper pointed out this week, neither of the official inquiries into the scandal – one by US attorney Paul Fishman, the other by the state legislature – has announced any such conclusion.

    The one report that did clear Christie was a review by his own lawyers, which cost New Jersey taxpayers an estimated $8million.”

  12. Guardian, today