Sometimes, the best defense is a good offense.

That seems to be the approach that notorious robo-signing firm Nationwide Title Clearing has taken in responding to some of its critics.

If you are unfamiliar with their name, you might recall earlier this Fall when depositions of several Nationwide robo-signers employees went viral on YouTube (We mentioned these here and here).

This, amongst other perceived sleights has upset Nationwide Title, who has sued a St. Petersburg foreclosure defense lawyer, Matthew Weidner, for alleged libel and slander.

This is likely to be a terrible, terrible idea.

For those of you who are not attorneys, I need to point out a few things out about Libel and Slander laws in the United States. These are Constitutional issues, as the First Amendment protects speech, opinion, arguments, viewpoints, etc. In these cases, (capital “T”) Truth is an absolute defense. So if any defendant can demonstrate that the damaging statements were indeed, accurate, they win.

This case turns on the bizarre claim that the term robo-signer so libels the plaintiffs that they are entitled to damages. Given that Truth is a defense, the defendant will prevail if they can demonstrate Nationwide’s approach was robotic. Not literally machines doing the work, but any showing of assembly line manufacturing, for profit, of a streamlined document production that failed to review the documents, evaluate them, analyze the contents should qualify.

Here’s where things get very very interesting: In civil litigation, the discovery process provides lots of opportunities for a defendant to gather information related to the accusations to prove they are true. This is a very broad standard, and it means nearly anything relevant is fair game. Depositions of senior executives, the firm’s accounting and records, balance sheets, low level employees are all legitimate aspects of pre-trial discovery.

Why any private firm would subject themselves to this degree of scrutiny is quite baffling to me.

And so the executives who run Nationwide just gave carte blanche to a very angry, well connected, deep-pocketed, web & media savvy attorney who wants their blood. Weidner’s blog is widely read amongst the foreclosure congescetti. Why they would choose to subject themselves to this is hard for rational beings to fathom.  In the annals of litigation foolishness, on a scale of 1 to 10, I’d give this a 978.

My advice to Weidner is to immediately file a counter-suit for harassment and abuse of legal process before the morons who run Nationwide come to their senses and withdraw their nuisance suit. The counter-suit preserves the litigation claim, and allows the defendant to continue the action. (In some jurisdictions, it also allows the continued defense of the original claim, in anticipation of future actions. I do not know what the procedural Florida laws are).

Beyond that act of brazen stupidity, what makes this legal action so egregious is what else Nationwide has done: They asked for, and actually got, a Court order to gag another lawyer from posting depositions of their robo-signers employees online. The court ordered injunction, against Sarasota lawyer Christopher Forrest. First amendment be damned, the injunction ordered him to remove videotaped depositions of three Nationwide Title employees. The videos show the employees describing the assembly-line process of robo-signing mortgage and foreclosure-related documents.

The Forrest Law firm’s YouTube page is now down, but mirrors of the depostion are all over the web.  See for example, DinSFL’s page.

The ACLU of Florida filed an emergency appeal of the injunction, which it called a “gag order” and a restraint of free speech.

Here is additional coverage from the St. Petersburg Times:

“The legal action marks another chapter in a storm over the validity of documents used to foreclose on millions of American homes. Earlier this fall, Bank of America and other lenders temporarily halted foreclosure proceedings because of evidence that many documents contained errors and fraudulent statements.

One of the most outspoken critics of the foreclosure process is Weidner, who writes a widely read blog in which he has criticized not only banks, but judges, lawyers and companies like Nationwide Title that process mortgage-related documents.

Nationwide Title does not prepare foreclosure papers. However, lenders have authorized several of its employees to sign for them on assignments of mortgage, which transfer ownership of a loan from one party to another and are key in determining who has the legal right to foreclose.

In a suit filed in Pinellas-Pasco Circuit Court, the company says Weidner has “deliberately and maliciously” used the term robo-signers “to vilify NTC for signing documents … when (Weidner) knew that it is entirely legally and appropriate to do so.”

Talk about an accurate and descriptive phrase: The term “robo-signers” perfectly sums up the mass produced, un-reviewed, assembly-line document production.

My only question is why criminal charges have not been brought against these employees and their supervisors for perpetrating a fraud on the courts. Even in Florida, Perjury is a felony, and if these documents were intended for use in court, its time for the local District Attorneys to start doing their jobs . . .

>

Sources:
Nationwide Title goes on attack against vocal critics
Susan Taylor Martin
St. Petersburg Times, December 10, 2010
http://www.tampabay.com/news/nationwide-title-goes-on-attack-against-vocal-critics/1139169

YouTube postings set off legal furor
Todd Ruger
Sarasota Herald Tribune, December 10, 2010
http://www.heraldtribune.com/article/20101210/ARTICLE/12101034/2055/NEWS?p=all&tc=pgall&tc=ar

See also:
Matt Weidner Law Firm
http://mattweidnerlaw.com/

The Forrest Law FIrm
http://www.sarasotaforeclosurelawfirm.com/Firm-Overview.aspx

Category: Foreclosures, Legal, Really, really bad calls

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

27 Responses to “When Robosigners Attack!”

  1. Petey Wheatstraw says:

    The law is what the judges say it is. The Judges are corporatists. That’s another price we pay for unchecked, unaccountable, faux “conservative” government.

  2. Julia Chestnut says:

    LMAO. You did, in fact, nail the strategy that Weidner should pursue. They also just succeeded in making him a national name, if he wasn’t before. One can just imagine Mr. Weidner smiling “Oh, don’t throw me in that briar patch.”

    The only thing better from the point of view of wide-ranging discovery would be an antitrust lawsuit. Too bad Mr. Weidner isn’t a competitor of NTC’s. What I want to know is what complete moron (just an opinion!) filed this lawsuit on behalf of NTC without thinking these little questions through first.

    Now what Mr. Weidner needs is the entire staff of a first-amendment law clinic from some local law school to start doing untold man hours on processing the discovery for him. It’s great experience, kids! Sign up!

  3. Scott F says:

    You mean to tell me that some sun-addled corrupt, venal, Florida judge gave a douchebag company a 1st amendment violating injunction?

    Who would have guessed . . .

  4. In fact, the First amendment is so important in American Jurisprudence that public figures, and even some private entities involved in public matters, can be defamed without recourse if a factual error was not made maliciously.

  5. droubal says:

    The whole issue of corrupt judges needs to be looked at. Judges need to receive much more attention for really bad, partisan judgments. This has done a lot of damage to the country.
    Judges usually come from some law practice that has never lost a case in front of them.
    Just one more reason the country is screwed.

  6. constantnormal says:

    “My only question is why criminal charges have not been brought against these employees and their supervisors for perpretating a fraud on the courts.”

    So naive, BR … follow the money. That’s the only way to get at the Truth. Yes, the path to Truth is made of money.

  7. So perhaps some locals in Florida might want to look into the District Attorneys campaign funds, and seeif local banks and others made donations

  8. doug says:

    BR, this is the funniest thing I have read in a while. What dumb asses. Perhaps they were getting the advice of a robo corporate lawyer?

  9. Ltdata says:

    What was the popular definition of insanity? Seems to fit.

  10. “In fact, the First amendment is so important in American Jurisprudence that public figures, and even some private entities involved in public matters, can be defamed without recourse if a factual error was not made maliciously…” — BR, above

    with that, We may do well to wonder..

    “…Section 215 also provides: “No person shall disclose to any other person (other than those persons necessary to produce the tangible things under this section) that the Federal Bureau of Investigation has sought or obtained tangible things under this section.” This gag order would prevent a library, for example, from ever notifying its patrons that the government has requested information from it under Section 215.

    In legal papers in its lawsuit, the ACLU wrote that this “gag provision is manifestly inconsistent with the First Amendment.” In an earlier publication, Unpatriotic Acts: The FBI’s Power to Rifle Through Your Records and Personal Belongings Without Telling You, the ACLU wrote: “If the First Amendment means anything, it means that the government cannot impose an indefinite gag order without reference to the particular facts of the particular case.”

    Others contended the ACLU’s attack against Section 215 was overblown. Heather Mac Donald, a fellow with the Manhattan Institute, argued in an August 2003 column in The Washington Post that “Section 215 merely gives anti-terror investigators the same access to such records as criminal grand juries, with the added protection of judicial oversight.” She rejects the staunch opposition to the provision by many in the library community, writing: “By publicly borrowing library books, patrons forfeit any constitutional protections they may have had in their reading habits.”

    However, Jameel Jaffer, an ACLU staff attorney at the national office, insisted that Section 215 violated the First Amendment. “If people think that the government is looking over their shoulders to see what books they are reading or what Web sites they are visiting, many are not going to read those books or visit those Web sites,” he says. “Some of this speech that will be silenced is speech that is important to an open democracy.”…”
    http://www.firstamendmentcenter.org/speech/libraries/topic.aspx?topic=patriot_act

    “How Liberty Dies: The Patriot Reauthorization Act”
    by John W. Whitehead

    “…At a massive 342 pages, the Patriot Act violates at least six of the ten original amendments known as the Bill of Rights—the First, Fourth, Fifth, Sixth, Seventh and Eighth Amendments—and possibly the Thirteenth and Fourteenth as well.

    The Patriot Act was rushed through Congress, even though the majority of our representatives admitted to not reading it, reassured perhaps by the inclusion of a five-year sunset provision. But that sun does not seem to be setting on this chilling piece of legislation. Instead, the Senate Intelligence Committee is not only working to make the Patriot Act permanent, but also to expand its reach.

    Among some of the widely cited concerns about the Patriot Act are that it redefines terrorism so broadly that many non-terrorist political activities such as protest marches or demonstrations and civil disobedience can be considered a terrorist act; grants the FBI the right to come to your place of employment, demand your personal records and question your supervisors and fellow employees, all without notifying you; allows the government access to your medical records, school records and practically every personal record about you; allows the government to secretly demand to see records of books or magazines you’ve checked out in any public library and Internet sites you’ve visited (at least 545 libraries received such demands in the first year following passage of the Patriot Act); and most egregious of all, it allows the FBI to enter your home through the use of a special warrant, search your personal effects and confiscate your personal property without informing you that they have done so…”
    http://www.rutherford.org/articles_db/commentary.asp?record_id=343

    http://epic.org/privacy/terrorism/usapatriot/default.html
    http://www.activistpost.com/2010/12/government-by-fascists-for-fascists.html

  11. Andy T says:

    Isn’t the business “news cycle” funny?

    What seems like a “huge deal” one week gets forgotten within a few months.

    Anyone else remember when the Gulf of Mexico was going to explode and bp stock was going to zero?

  12. bobabouey says:

    Barry,

    What you say is generally true, but the extent of the discovery is exaggerated. I recently dealt with a libel / slander case that was part of a two-jurisdiction federal litigation (we did exactly what you described, counter-sued in our own federal jurisdiction). We had the same theory you did about using the truth as a defense and discovery strategically. There was a fair amount of discovery, but it was tailored to the claim and limited – blanket demands to depose senior executives were rejected, open-ended document requests were were limited in scope, etc. I’m not saying it wasn’t full disclosure, but it is more limited than you may imply.

    So in the present case, I don’t see the same downside as you do. Nationwide’s approach is simply to bully and distract a small practitioner and send that same message to other practitioners. Further, isn’t Nationwide already tied up in a variety of robo-signer litigation? They are already incurring the cost and hassle of similar discovery. And, as you know, US law unlike UK law provides very limited opportunities for recovering attorneys fees.

    And as for reputational issues if Nationwide loses, because it is “true” that they are a robosigner, so what… Their reputation is already crap to anyone with a brain.

    So its just standard, deep pocket intimidation and distraction. They have more time and money than Weidner, and there isn’t much more downside than they already face. Meanwhile, every minute Weidner spends on this is a minute he can’t spend on other foreclosure litigation and blogging…

  13. NeutralObserver says:

    Yves Smith of NakedCapitalism.com gives a wonderful hour long interview with Harry Shearer on the whole curruption negative feedback story of banks, mortgage servicers, robosigners, MERS, etc.:

    http://www.kcrw.com/media-player/mediaPlayer2.html?type=audio&id=ls101205le_show_-_december_5

    Don’t miss it. Very entertaining… and depressing. Perhaps it is time to short some banks.

    ~~~

    BR: Cool — I added that to the video tab

    http://www.ritholtz.com/blog/2010/12/yves-smith-on-harry-shearers-le-show/

  14. Darkness says:

    “Even in Florida, Perjury is a felony,”

    Oh man, you are on fire this morning.

  15. Jack Damn says:

    Interesting thoughts, Barry. Thanks.

  16. Transor Z says:

    Their reputation is already crap to anyone with a brain.

    When you’re litigating defamation, never forget to also root discovery requests in DAMAGES, not only Truth of statements. If you’re an asshole with a shit reputation, good luck proving defamation damages.

    cf. Roger Clemens

  17. Julia Chestnut says:

    I gotta say, bobabouey, I’m heartened to hear that discovery in your case was kept in check by the Federal judge. I hope that both sides had the same treatment and the case was fairly conducted. My experience is the same: Federal judges know the rules, and are very comfortable refereeing ugly discovery disputes. I love that – and I like to use it. I stay completely above-board, and I just demand that discovery be complete and truthful. You wind up with a reputation with the judge that stands your client in good stead. My approach is to tailor narrowly, know why I want each thing I’ve asked for, and demand what I can tell that they haven’t turned over that falls within the scope of what I requested.

    What Mr. Weidener might consider, along with needing some pro bono help with the lawsuit so that he can continue to devote his time to his practice, is to delve into the popular definition of “robo-signing.” I’d have a couple of theories: (1) if everybody is doing it, it isn’t defamatory; and (2) what is encompassed in the practices commonly called “robosigning.” I’m thinking that’s going to require some third-party depositions, don’t you think? Third party discovery, too. Of course, under the rules you have to pay for the discovery of entities that are not party to the suit – that’s a deterrent. Also never forget under the rules to inform the plaintiff before you send the discovery. But then you just start inquiring of NTC’s competitors and clients what their practices are, what they know, when they knew it, and what they pay on what kind of price schedule.

    Again, it would be nice if someone with pockets would help out Mr. Weidener. Let’s hope that the ACLU is listening, or at least the constitutional law clinic at whatever law schools they have in his area. . . .he might also want to talk to the career services office at the law schools near him, and inquire whether anyone who doesn’t have a job yet would like to do some pro bono work and gain some valuable skills.

  18. Sechel says:

    I enjoyed your take on this, none of which should be construed as free advice of course.
    I’ll enjoy watching this suit blow up.

  19. MIRTTB says:

    I get all my legal advice from Spiderman Movies:

    Peter Parker: Spider-Man wasn’t trying to attack
    the city, he was trying to save it. That’s slander.

    J. Jonah Jameson: It is not. I resent that.
    Slander is spoken. In print, it’s libel.

    http://www.ryanteaguebeckwith.com/eng214/libel.html

  20. philipat says:

    Those First Amendment rights will presumably be receiving another going over shortly in the case of whatever against Julian Assange?

    Rumour has it that he will be awarded next year’s Nobel Peace Prize and, as he will still be otherwise occupied, the Chinese will send Liu Xia0bo to collect it on his behalf as a gesture of goodwill.

  21. rip says:

    Most Americans, like I used to be, held the courts up as some sort of special. Kind of like church.

    I learned.

    Courts are about money and power, not justice.

    Most have no concept how much money flows through courts. The smallest circuit court can do more than $40M a year in fees and fines. Not to mention the parasitic lawyers and their fees. Which a certain percentage of will flow back into the system.

  22. Sechel says:

    Barry,
    Never know what to expect from the courts or our gov’t anymore. How can wikileaks be demonized as criminal, unpatriotic , etc but the release of the Pentagon papers , be praised and deemed proper?

  23. NealG says:

    “For those of you who are not attorneys, I need to point out a few things out about Libel and Slander laws in the United States. These are Constitutional issues, as the First Amendment protects speech, opinion, arguments, viewpoints, etc. In these cases, (capital “T”) Truth is an absolute defense. So if any defendant can demonstrate that the damaging statements were indeed, accurate, they win.”

    Silly BARRY!!

    Yeah, like the first amendment means anything anymore in this country.” See: Assange, Julian, Amazon, Paypal, Columbia University, anyone else deemed a threat by Joe Lieberman.

  24. [...] defense attorney Matt Weidner for libel and slander. There’s already a lot of commentary on that here, here, here and here, so I’m not going to add anything to that discussion except to say that I [...]

  25. PaulaZ says:

    I’ve been following this robo thing a bit. Your statement, following, seems at the core here:

    “This case turns on the bizarre claim that the term robo-signer so libels the plaintiffs that they are entitled to damages. Given that Truth is a defense, the defendant will prevail if they can demonstrate Nationwide’s approach was robotic. Not literally machines doing the work, but any showing of assembly line manufacturing, for profit, of a streamlined document production that failed to review the documents, evaluate them, analyze the contents should qualify.”

    There’s no doubt that Nationwide had an assembly line here. And no doubt the final signer failed to review the documents, evaluate them and analyze the content, he wasn’t charged to by Nationwide. You seem to take as given in this case that the documents were not reviewed, evaluated and analyzed at all. But Bly speaks of relying on his team. Everything is centered on this guy at the end of the assembly line whose only, if bleak, job is to assure the document has gone through the line and then affirm it with his authorized signature. I can’t see the point has been made in the depositions I’ve seen that it’s been shown the documents weren’t reviewed, evaluated and analyzed as part of a team action. Perhaps Nationwide’s suit isn’t totally without basis.

  26. PaulaZ says:

    I just came across Matt Weidner’s retraction of the posts on his blog regarding this matter. It includes his apologies about not having his facts straight. It includes, in part, “The purpose of signing mortgage assignments is to complete the transaction, and the purpose of notarization of the signature on the mortgage assignment is to prove it was signed. I have been advised that before the mortgage
    assignments are signed in the presence of a notary, numerous NTC employees have researched, reviewed, and verified the information in the mortgage assignment to ensure accuracy. Assignments are normally and customarily researched and prepared by people other than the person who signs them. There is nothing wrong with this practice.”

    And, “In summary, I regret and retract any statement that implies that NTC has falsified any documents or that NTC is involved in foreclosures. These statements were based on general misinformation that appeared elsewhere in the press and on the internet. I apologize to NTC and its employees for any harm caused by my posts.”

    Enough said.