United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

Submitted November 6, 2007∗

Decided November 8, 2007

Before

Hon. FRANK H. EASTERBROOK, Chief Judge

Hon. ILANA DIAMOND ROVNER, Circuit Judge

Hon. DIANE S. SYKES, Circuit Judge

Nos. 07-1689 and 07-2604

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff-Appellee,

v.

MICHAEL SPADACCINI and RAYMOND J.

MCNAMEE,

Defendants-Appellants.

Appeals from the United

States District Court for the 

Northern District of Illinois,

Eastern Division.

No. 05 C 4259

Milton I. Shadur, Judge.

Order

These appeals are successive to one resolved earlier this year. Our opinion,

SEC v. McNamee, 481 F.3d 451 (7th Cir. 2007), rejected a challenge to a

preliminary injunction requiring McNamee to comply with the Securities Act of

1933 and limiting his ability to participate in offerings of penny stocks. It also 

affirmed the district court’s decision that McNamee is in contempt of court but

 

∗ These successive appeals have been submitted to the original panel under Operating 

Procedure 6(b). After examining the briefs and the record, we have concluded that oral argument is

unnecessary. See Fed. R. App. P. 34(a); Cir. R. 34(f).

NONPRECEDENTIAL DISPOSITION

To be cited only in accordance with Fed. R. App. P. 32.1

To be cited only in accordance with Fed. R. App. P.

32.1Not to be cited per Circuit Rule 53
Nos. 07-1689 & 07-2604 Page 2

remanded for further proceedings concerning the remedy. Our opinion noted that a

separate appeal, No. 07-1351, had been filed from the permanent injunction and

would be dealt with separately.

McNamee failed to pay the filing and docket fees for that appeal, which was

dismissed. But he did file in the district court a motion for relief from judgment

under Fed. R. Civ. P. 60(b) and has appealed from the denial of that motion.

Another of the defendants, Michael Spadaccini, appeals directly from the entry of

the permanent injunction.

Both McNamee and Spadaccini failed to file timely answers to the SEC’s

complaint, and the district court defaulted each of them. Both defendants say that

the district court should have allowed them further opportunities to answer; they

maintain that judges should tolerate slipshod litigation because they represented

themselves. The premise of this argument is incorrect. Although federal judges give 

indulgent readings to documents filed by pro se litigants, everyone is bound by the 

rules of procedure concerning what must be filed, and when. So the Supreme Court

held in McNeil v. United States, 508 U.S. 106, 113 (1993) (“we have never suggested

that procedural rules in ordinary civil litigation should be interpreted so as to 

excuse mistakes by those who proceed without counsel”). We see no reason to 

disregard not only the Rules of Civil Procedure but also the views expressed in

McNeil.

To obtain relief from a default, a defendant must establish a good reason for

the failure to file on time, prompt action to correct the problem, and a plausible 

defense on the merits. See, e.g., Pretzel & Stouffer v. Imperial Adjusters, Inc., 28

F.3d 42, 46 (7th Cir. 1994). McNamee flunks all of these requirements: his failure to 

file a timely answer to the SEC’s complaint reflects (at best) carelessness by one of

his employees; he did not try to correct the problem for more than six months (and

did not show up in court at proceedings held in the interim), and he lacks a

plausible defense, as our prior opinion shows. In arguing that he has a good defense,

McNamee just repeats arguments that were rejected in our prior opinion—which

his brief does not mention.

Spadaccini acted with more dispatch after his failure to file a timely answer

was brought to the court’s attention, but the district judge did not abuse his

discretion in concluding that Spadaccini lacks a plausible defense on the merits.

Indeed, when asked repeatedly what defense he has, Spadaccini offered none;

everything he said concerned the remedy, not the wrong. Spadaccini had every

opportunity to address remedial issues (he was defaulted on the merits, not with

respect to relief), so there was no need to set aside the default.

Appellants’ other arguments are frivolous and need not be addressed

separately.

AFFIRMED