Tortdeform

Kia Franklin

News Show Puts Human Face to Predatory Mortgage Lending

Perhaps this is Spokesperson Day or something. If the Chamber has found a Granny for arbitration, maybe the Civil Gideon and economic justice folks have a candidate for a poster-Granny, too. Predatory lending has disparately affected the elderly. A news show put a human face to this situation by interviewing Margaret Meyers, an elderly woman facing loss of her home who told reporters, “All I want to do is be able to stay here for the remainder of my lifetime.”

From the news show:

Here’s a case where a woman’s lawyer called KUSI’s Michael Turko when her client was too embarrassed to ask for help herself. Turko says it’s an ugly case of predatory lending by a mortgage broker, and the victim is about to lose her home. Turko?
Several cases winding their way through the courts on this very issue, whether the mortgage lender is resposnible for the actions of the mortgage broker who may have stepped out of line. Well my investigation shows this woman was taken advantage of by a fast talking mortgage broker who played fast and loose with the facts. In fact, she says some of those facts were simply made up out of whole cloth. Well, now she’s trying to get some relief from her lender who accepted the whole deal without question. But they’re trying to foreclose, and she says her pleas are falling on deaf ears.

Margaret Meyers has lived in Logan Heights most of her life. She raised 11 kids and 6 grandkids in this modest home. She says she was getting by until she got a telemarketing call from an Orange County mortgage broker.

Margaret Meyers: “He told me that he could refinance my loan, and that he could get me a good rating and he asked me my score for my credit, and I told him it was five-something, that I’m sure it wasn’t that great. And he said, ‘Well, that’s no probelm because after 3 months we can redo your score and get it up.’”

Turko: “Now she hasn’t worked for years, but the broker told her ‘no problem,’ and listed her income as over four grand a month.”

MM: “I faxed these people how much I get a month, I’m only on social security and disability—that’s all I get.”

T: “How much do you get a month?”

MM: “Eighteen a month…”

T: “1800 dollars?”

MM: “Yes.”

T: “But this says you make over four thousand bucks a month from a fabric business…”

MM: “I know! But they didn’t show me that…”

T: “The home is all she has, but she said she never understood all the paperwork. Now her new payment is $2700 a month…That was two years ago, she says she never heard from the broker again…”

Meyers got a lawyer from the Elder Law Center, but her lawyer told the reporter that the lenders are over-loaded with requests to restructure loans. The lawyer says she’s been trying since last August to speak with someone in customer service to help her client restructure.

Who should be responsible for the actions of the— as the reporter calls it— “fast talking mortgage broker” that dupes clients into burdensome predatory loans? Should it be the lenders that accept these loan applications without asking any questions and have the most sophisticated understanding of what these loans mean? Or should it be the individual borrower himself/herself? Well, in instances in which the client has been defrauded, someone should certainly bear the cost.

Here’s the video of the interview with Meyers.

Posted at 4:27 PM, May 13, 2008 in Housing | Permalink | Comments (1) | TrackBack (0)

Kia Franklin

On MoJo Blog… Seriously, is this the best big biz could do?

Stephanie Mencimer looks at the Chamber of Commerce’s latest poster child (or, poster-Granny) for arbitration. As she puts it, it’s a great story about a burned consumer getting redress, but does it effectively make the case for why we should keep pre-dispute binding mandatory arbitration clauses in consumer contracts? Mm, not so much. Check it out here.

Posted at 11:33 AM, May 13, 2008 in Arbitration | Permalink | Comments (0) | TrackBack (0)

Kia Franklin

Who knew EPA stood for “Ensuring Profits for Agribiz”?

An EPA spokesman told reporters that the agency’s mission is “to protect the environment and human health”. Then why are its decisions dictated by the Safety Is Too Expensive Business Model?

It looks like the agency’s decisions undermine its purported mission. Advocates for farm workers and the environment are challenging EPA decisions in 2006, allowing continued use of 4 pesticides in California fruit/veggie fields, even though the agency knew the toxic chemicals posed signifant threats to the health of human beings and animals. The EPA’s justification? The benefit$ to grower$ outweighed the costs to individuals working in the fields, and their children, pets, and neighbors. The Bush Administration now faces a lawsuit related to these EPA decisions. Jo Hartley writes for NaturalNews.Com:

The suit challenged the Environmental Protection Agency’s 2006 decision to reauthorize the four pesticides used on fruit and vegetable fields in California.

A 1996 federal law required the EPA to reassess the safety of all pesticides used on foods. Based on this reassessment, the EPA was to decide whether to approve their use. The EPA found that four substances posed substantial risks to human health but they concluded that the cost savings to growers outweighed the dangers to humans.

These four pesticides reportedly put thousands of farm workers and their families at risk of serious illness.

EPA spokesman Tim Lyons stated that the agency would review the lawsuit and respond in court. However, they did say: “Our mission is to protect the environment and human health.”

California officials have officially classified one of the pesticides (ethoprop) as a carcinogen.

On the other side of the U.S., the EPA is AWOL in its NYC lead clean-up duties.

Kia Franklin

Justice for Jamie Leigh Jones

Those of you who, unlike me, were not under a rock this weekend already know the wonderful news: A federal judge has decided that Jamie Leigh Jones’ assault-related claims against KBR cannot be arbitrated, despite her former employer’s insistence that any and all claims against it stay out of the public court system. As confirmed by a rape kit, Jones was sexually assaulted while in Iraq working for KBR. Jones believes her perpetrators were coworkers and contends that KBR confined her to a large shipping container after she informed them of her assault, threatening to fire her if she were to leave Iraq for treatment.

KBR insists that the pre-dispute, binding mandatory arbitration clause Jones signed in her employment contract binds her to take this claim to arbitration, where “there is no public record nor transcript of the proceedings and Jones’ claims would not have been heard before a judge and jury.”

U.S. District Court Judge Keith Ellison knows better than that. According to ABC:

Ellison, however, wrote in his order Friday that Jones’ claims of sexual assault, battery, rape, false imprisonment and others fall beyond the scope of her employment contract.
“The Court does not believe that Plaintiff’s bedroom should be considered the workplace, even though her housing was provided by her employer,” Ellison wrote.

Ellison did, however, rule that a sexual harassment claim that Jones included in her case against her supervisor in Texas would have to be decided in arbitration.

Jones and her attorney have conceded to take other claims against KBR to arbitration, but they have a right to access the civil justice system for her assault claims. This notable civil justice victory comes after months of media coverage, two congressional hearings, and an outcry by individuals who didn’t know corporations could do this.

I’m so glad that the judge decided this issue in accordance with principles of fairness and equity. However, wouldn’t it be great if there were a law that expedited the process of obtaining access to the civil justice system? A law that prevented corporations from getting you to sign away your right to take critical claims like Jones’ to court, rather than to arbtiration? Hmmm, if only…

Kia Franklin

Lessons Sen McCain has learned from Pres Bush—part I

Sen. John McCain has officially earned an A in Prof. Bush’s course on Tort Reform Tropes, 101. Maybe that’s why they’re embracing in this photo (source).

The Senator and presumed Republican party Presidential nominee spoke in Rochester, Mich., the other day. (Thanks, Matt at ThinkProgress, for pointing out and analyzing McCain’s statements and his track record on women’s rights).

According to the Washington Post:

Although the Michigan audience was largely supportive, cheering McCain’s pledge to provide easy health care access for veterans, the meeting started out with a few tough questions. McCain singled out a 14-year-old girl who questioned why he opposes eliminating the statute of limitations on lawsuits over workplace discrimination, arguing it amounted to opposing “equal rights for women.”
“If you eliminate the statutes of limitations, and you make it unending, you may be violating the rights of the individuals who are being sued, whether they’re a man or a woman,” the senator responded. “ I don’t think you’re doing anything to help the rights of women, except maybe help trial lawyers and others in that profession.” (My emphasis added)

Haven’t we heard this before? It’s déja-vu all over again. McCain is using the same tactics Bush used to get elected: when in doubt, blame the trial lawyers.

When faced with a tough question about why people are being denied access to justice, say it’s because that’s the only way to stop the trial lawyers. Oh, and this will work no matter how inherently flawed, inane, or even insane your argument is at its substance. And for good measure you can sprinkle in some references to “evil in this world” to appeal to peoples’ morals, thus creating the inference that all of your political stances are directed at combating that evil.

McCain’s appeal to the breached rights of individual employers is strained from the start. First, the law does not create an unending statute of limitations—it clarifies that the statute starts running afresh with every new discriminatory act, such as the issuance of an inequitable paycheck based upon discrimination. Second, the defendant in employment discrimination claims is often a corporation and not an individual.

But even in cases in which the defendant is an individual, what is the right which McCain asserts is being violated? Is it the right not to be sued for discriminating against someone without getting caught within 180 days, even if you then discriminate over and over again after the 180 days are up? Even if it can be more cleverly articulated than this, does McCain really think one can compare the obstruction of some unsavory interest in evading responsibility to the infringement of a highly cherished right not to be victimized by discrimination and economic injustice? That’s ridiculous.

So, McCain’s not smarter than a twelve year old… but neither was Bush, and he got elected. The rhetoric works.

The “trial lawyers are evil” mantra addresses none of the values McCain touted in his speech to the Michigan audience. He told supporters that “evil still exists in the world” and “assails the great, animating truths we believe to be self-evident — that all people have a right to life, liberty and the pursuit of happiness — by subjecting countless human beings to abuse, persecution and even slavery.” He observed that the “failure to [confront this evil] affects even those who are complacent with our own blessings and secure in our human rights,” and pointed to this country’s founding “belief in the inherent dignity of all human life [which] can only be preserved through shared respect and shared responsibility.”

Of course that sounds great, but a true belief in those words would require McCain to recognize that discrimination is a form of persecution, and that the court system is a way for individuals to demand the “respect we are morally obliged to pay each other.” As someone unlikely to face workplace discrimination, he would nonetheless feel called to confront the evil of discrimination and economic inequity. And his call for “shared respect and shared responsibility” would compel him to acknowledge the assault to human dignitiy that is an unvindicated act of discrimination.

But it appears as though McCain has learned from Bush that matching your professed values with the political decisions you make would be no good at all. After all, It might help the trial lawyers.

Posted at 4:43 PM, May 08, 2008 in Civil Justice | Permalink | Comments (7) | TrackBack (0)

Kia Franklin

On DMI Blog—Exploting Borrowers Amidst the Foreclosure Crisis

By Antoine Morris, Cross-posted from DMI Blog:

On Tuesday, May 6th, a Senate Judiciary subcommittee held a hearing on abusive practices perpetuated by mortgage lenders in the bankruptcy court system. Businesses and consumers often turn to bankruptcy courts as they liquidate their assets in an effort to workout reasonable payment plans with their creditors. For families on the brink of losing their homes, bankruptcy courts play a key role in allowing at-risk homeowners one last chance to keep their homes.

In recent months, however, some mortgage services such as Calabasas, California based Countrywide Financial Corporation have come under intense scrutiny by the Department of Justice for foreclosing homes prematurely only to pile on unnecessary and costly fees on borrowers during bankruptcy proceedings.

But Steve Bailey, the Chief Executive for Loan Administration at Countrywide, disputed those allegations. In a prepared statement before the Senate Judiciary Committee’s Subcommittee on Administrative Oversight and the Courts, he said, “Countrywide is committed to helping our borrowers avoid foreclosure whenever they have a reasonable source of income and a desire to remain in the property.”

He also claimed, “Recent media reports alleging that mortgage servicers are systematically charging excessive fees and using the bankruptcy process to push borrowers into foreclosure or abusing the process more generally are inaccurate.” Bailey attributed any perceived abuses to no more than run of the mill “individual employee errors.”

But Countrywide’s track record of overcharging borrowers facing foreclosure and during bankruptcy proceedings suggests otherwise. One New Jersey couple who owned their home for the last 10 years were served with foreclosure papers by Countrywide and were inexplicably charged expensive flood insurance that they could not afford and did not need. It took months to resolve the error. Meanwhile, she fell behind on her mortgage payments.

In several other cases, the mortgage company has repeatedly been accused by the attorneys of the borrowers and U.S. Trustees in bankruptcy courts of inflating overdue mortgage payments and fabricating documents to bolster their claims and collect more money in bankruptcy court.

Robin and John Atchley’s experience with Countrywide seems to be emblematic of these very same abuses. In 2004, the Atchley’s moved from a mobile home to what Atchley described as her family’s dream home in Waleska, Georgia. After securing a home loan from American Freedom Mortgage her mortgage was sold to Countrywide. During Mrs. Atchley’s grieving period after her sister’s death, she took unpaid leave from her job at the U.S. Postal Service. Soon afterwards, the Atchleys fell behind on their mortgage payments by about three months worth.

Apparently, that was enough for Countrywide to initiate foreclosure proceedings against the Georgia family and create what Atchely called a “tug of war” over her home she said in her testimony. The Atchleys hoped the bankruptcy court would allow her and her husband pay off her debts and keep her house, but, according to Atchley, “to take advantage of our predicament and to profit from our struggle.” At one point, Countrywide alleged that the Atchley’s owed an extra $14,000 on her home loan and $2,250 for other unspecified fees.

Neither of those extra charges were substantiated once they were vigorously challenged by her attorney.

Katherine Porter, a bankruptcy law expert who has studied 1700 bankruptcy cases, told the Subcommittee that the Atchleys suffered an all too common fate. Proter said she found that in bankruptcy cases “mortgage servicers disregard bankruptcy law in more than half” the time.

Mortgage services frequently misapply payments during the bankruptcy case or fail to disclose post-bankruptcy attorneys fees and property inspection or simply not itemized their fees at all to overcharge borrowers. Porter contends that such a pattern of falsifying or withholding documentation demonstrates a deliberate attempt to manipulate a system intended to help those trying to aviod financial ruin.

An unpersuasive defense from Bailey of Countrywide’s treatment of the Atchleys led Senator Chuck Schumer, chairman of the Subcommittee, to conclude “Companies know that the hapless homeowner is too poor, too unsophisticated or too overwhelmed to challenge often blatantly fraudulent demands for payment.”

The Atchleys eventually lost their home and are currently living with other family members until they can save enough money to rent a place of their own.

Posted at 9:53 AM, May 08, 2008 in Civil Justice | Housing | Permalink | Comments (0) | TrackBack (0)

Kia Franklin

You got ID, sister?

As Stephanie Mencimer points out, maybe I shouldn’t complain about getting carded at CVS for my allergy meds. After all, the plight of people who could be negatively affected by the recent Supreme Court case upholding Indiana’s voter ID law (Crawford v. Marion County Election Board) is really nothing to sneeze at.

Okay, that was a bit cheesy.

But my point is that access to the ballot is just as important as access to the courts, and this recent Supreme Court decision may make it more difficult for elderly and poor Indiana voters to vote if they don’t have i.d.’s and face significant difficulties obtaining one.

Need proof? Well, the Court didn’t get any. Proponents of the Voter ID law claimed the law would prevent voter fraud but could not find one instance of voter fraud; opponents to the law also failed to provide proof that people would be prevented from voting as a result of the law.

But yesterday’s primary election fills that evidentiary gap with a human interest story compelling enough to be summed up in two words: elderly nuns. Elderly nuns, for God’s—please excuse me—for Goodness sakes, were turned away because they did not have updated identification. From the article:

About 12 Indiana nuns were turned away Tuesday from a polling place by a fellow bride of Christ because they didn’t have state or federal identification bearing a photograph.
Sister Julie McGuire said she was forced to turn away her fellow sisters at Saint Mary’s Convent in South Bend, across the street from the University of Notre Dame, because they had been told earlier that they would need such an ID to vote.

The nuns, all in their 80s or 90s, didn’t get one but came to the precinct anyway.

Regressive court rulings and terrible judicial appointments illuminate the importance of being able to elect the right representatives and pass the right laws. This, obviously, requires that people be able to actually cast their ballot.

For some great opinions on the Supreme Court decision, go here (subscription may be required).

Posted at 12:06 PM, May 07, 2008 in Elections/Voting | Permalink | Comments (2) | TrackBack (0)

Kia Franklin

Mitigating the Potential Damage of Being Stuck in Arbitration

As TortDeform regulars know, we debate about binding mandatory arbitration a lot on this site (i.e., see the comments section for this prior post). I thought I’d pass along some great reads I’ve come across, thanks to others’ tips and my own digging, for those who have yet to decide how they will weigh in on the debate. So…

First, thanks to Paul Bland of Public Justice for a tip on two interesting reads on binding mandatory arbitration: an article advancing the case for bma in securities cases, and an article scrutinizing bma’s appropriateness when applied to parties of unequal bargaining power, giving special attention to bma’s impact on large, complex, and class action claims.

Next, moving from the bigger policy questions to the practical question of what to do once you’ve already been sucked into bma, thanks to Daniel de Bonis at Public Citizen’s WatchDog blog, who offers this informative post, and cites to CreditCards.com’s 6 tips for dealing with binding mandatory arbitration.

Happy reading!

Posted at 12:21 PM, May 06, 2008 in Arbitration | Permalink | Comments (0) | TrackBack (0)

Kia Franklin

Muy Bizzarro…

Talk about bizzarre: A racist 1931 law banning “Spanish or Mexican” people from certain buildings in a small Texas town was just abolished. To add to the absurdity, the 2000 census recorded that the South Texas town was 97% Latino. An anti-Latino ordinance in a predominantly Latino town…

Clearly this obscure racist law has sat on the books without notice for quite some time. But I consider it a marker of both how far we’ve come and how far we still have yet to go that this law managed to survive (albeit in technicality only) for so long.

What do you think? How do you think the existence of laws like this affect our perception of the legal system?

Update—While I’m at it, I might add that while overtly anti-Latino ordinances are being taken off the books, the racial overtones of many anti-immigrant laws and policies keep this sentiment alive. For starters, check out: Immigration 101 and MALDEF’s publications on anti-immigrant ordinances.

Kia Franklin

Corps of Engrs. Can Be Sued for “Hurricane Highway”

A federal judge wrote on Friday that the Army Corps of Engineers can be sued for Hurricane Katrina flood damage caused by a navigation channel called “a hurricane highway.”

Judge Stanwood Duval is the same judge who in February found that, despite signs of clear wrongdoing, the Corps of Engineers could not be sued for flood control projects gone wrong. But this case is different from the February claim because the channel at issue, the Mississippi River-Gulf Outlet, or MRGO, was “clearly a ship channel and not a flood control project.”

From his opinion:

“The United States should not be immunized for a tort which occurred from an activity unrelated to a flood control project… Taken to its logical conclusion, such a policy would yield absurd results.” [Read the article here]

(Thanks to CJ&D for the alert)

Posted at 11:24 AM, May 05, 2008 in Hurricane Katrina | Permalink | Comments (0) | TrackBack (0)