Both big banks and big-bank-hating judges have been acting with increasing wackiness lately, as The New York Times' Gretchen Morgenson recently explored. In one case, a Massachusetts judge claimed that he bought the argument of Wells Fargo that a borrower's predatory law claims against the bank were barred by federal preemption principles, but then made the bizarre demand that the bank provide the court with a resolution of the bank's board, signed by a majority of the bank's directors, that stated that the board is not waiving its right to claim federal preemption. The judge believed that the bank's public advertising that it is consumer-friendly raises the issue as to whether or not it has waived its right to claim federal preemption. Naturally, knowledgeable observers, including the counsel for the borrower, had never heard of such a judicial demand. The bank is appealing the requirement, which appeal, unless the judge backs down, the bank will win.
While the judge labels the bank's alleged conduct to be "outrageous," a commenter in an ABA Journal article on the decision made a telling observation.
This judge has gotten too big for his britches and is stepping beyond his constitutional role as a neutral jurist. It makes no difference whether he personally finds Wells Fargo’s conduct to be “outrageous” or out of sync with the company’s public image, conclusions that are legally irrelevant and do not entitle the judge to dictate what the company must do to raise a legitimate defense. Justice is supposed to be blind to personal sympathies such as this; he is displaying prejudicial and unprofessional bias toward a party, and he should be recused or sanctioned.
It's Massachusetts, pal. He'll be neither recused nor sanctioned. He'll be hailed as a lion of the bench.
On the flip side, Gretchen also recounts a case where Bank of America and its assignee hounded a homeowner repeatedly for payment of a debt that had been discharged in bankruptcy. Apparently, repeated contact by collectors continued even after the bank was sued. Determining whether or not a debt has been validly discharged in bankruptcy is not the equivalent of discovering the cure for cancer. The bank that can't shoot straight on the foreclosure trail apparently has no better aim when it comes to general debt collection.
The phone calls and letters continued even after Mr. Schwartz went back to court to ask that Bank of America be sanctioned for illegal attempts to collect the debt. During this time, Bank of America sold the servicing rights on the first mortgage to another company, which soon began sending its own demand letters to the Ramoses.
This month, the matter came before Robert D. Drain, a federal bankruptcy judge in New York. Judge Drain found Bank of America in contempt of the debt discharge order protecting the Ramoses and required the bank to pay Mr. Schwartz’s legal bills in the case. The judge also ordered the bank to pay $10,000 a month in sanctions to the Ramoses until it stopped making the repayment demands.
Judge Drain acknowledged that it wasn’t a lot of money to Bank of America. But, he said, he hoped that its lawyers would get the message. “This is not just a stupid mistake” by the bank, the judge said. “This is a policy.”
A Bank of America spokeswoman said the bank was working to resolve the court’s issues and “researching and investigating what transpired.”
"Researching and investigating" what? Did they call and/or write or didn't they? You need a drug-sniffing dog and an electron microscope for that task, America's Bank?
We all know why the people with pitch forks and torches want to burn down the banks. Now, it appears, the cumulative effect of years of this type of moonbattery by big banks is driving even respected jurists batty.
The borrower's lawyer in the Bank of America case thinks that the bank has a deliberate policy of ignoring the law and is willing to fork over the occasional sanction as the price it pays to squeeze blood out of turnips. Personally, I think that gives them too much credit. I subscribe to the "Too Big To Think" theory. If it's a choice between Professor Moriarty and Alfred E. Neuman, I vote for the "What, Me Worry?" explanation.