New Federal Rules Create New Discovery Environment

Not much time for discussion although this probably be discussed on radio show.

The issue is that most judges in Federal State court were ruling on discovery (interrogatories, requests to produce, request for admissions etc) from the perceptual standpoint of whether the requested information would itself be admissible at trial. This was always wrong but judges, particularly in foreclosure litigation, made the error repeatedly. It is probably an excellent point on appeal when this has happened.

The new federal rules, disabuse the judges of their notions that they can do that in order to “speed things along.” The new rules assume correctly that if the discovery is allowed, then the relative positions of the parties will become clearer and more settlements or dismissals will occur. This is just like the Jesinoski decision that disabused judges of the notion that they could over-ride the express wording of the statute and make willy-nilly insertions of language and conditions in TILA rescission. This is important. The new rules have been effective since December 1, 2015.

The standards for discovery have long been litigated. These rules set forth the real standards and will heavily favor homeowners in Federal court and will probably produce a substantial effect on State court because most states already have a body of common law decisions that already say the same thing.

The one point I would make here is that it might be better, for effect, to submit a detailed memorandum in support of your discovery, with citations to case law. Once you do it in one case you pretty much have it for all cases. I would suggest citing to the Federal Rules as well state rules.

Bottom Line: This should make it easier to ask for the evidence of the money trail that supposedly is underlying all that paper the banks are using. My experience is that as soon as the order is entered telling them to open their books, even in a limited way, the case settles under seal of confidentiality. There are reports of some huge settlements that I cannot confirm under exactly those circumstances. Other cases, in which I was a consultant, I actually have the results of settlements but I can’t share them because the client signed a confidentiality agreement.

So try it out for yourself, lawyers, and see what happens. If, as we already know, we have a path to show that the money trail and the paper trail diverged, then we have fabricated false instruments being used in court and used for recording in county records. And the argument that the identity of the real creditor is “privileged” will be revealed as obfuscation of false and fraudulent facts being represented to the courts. Federal law requires this disclosure and the continued failure to give it represents a continuing failure to comply with TILA disclosure and could mean that the loans are still not consummated.

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see http://www.lexology.com/library/detail.aspx?g=d34b6e33-fae9-4568-9ccd-355150323775

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“Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within the scope of discovery need not be admissible in evidence to be discoverable.”

Tags: disclosure, discovery, foreclosure defense, foreclosure offense, fraud, securitization
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