October 4, 2013
Reuters ran a story that provides the next chapter to my post, Federal Judge Declares War on Wells Fargo. The Reuters story is Massachusetts Judge Challenges Wells Fargo, Sparks Legal Fight (behind a paywall) and it reads in part:
A legal battle is heating up over an unusual challenge by a Massachusetts federal judge to banking giant Wells Fargo to waive what the judge called a technical defense in a mortgage lawsuit and to argue its case at trial.
Calling the judge’s order “unauthorized and unprecedented,” Wells Fargo has asked a federal appeals court to overturn it before it sparks “copycat” demands across the country.
It seems to me that Wells Fargo is right to be concerned about “copycat” demands across the country. My sense from reading many of the upstream and downstream cases that I blog about is that many judges have internalized the populist critique of financial institutions that has crystallized during the financial crisis. This came about, no doubt, in large part because of the relentless headlines about actionable and non-actionable misconduct by these institutions.
That being said, judges must apply the law impartially, so the First Circuit’s review of this case, Henning v. Wachovia Mortgage, F.S.B., n/k/a Wells Fargo Bank, N.A., No. 11-11428 (Sept. 17, 2013), will be of particular interest. The transcript of yesterday’s District Court hearing on a motion to stay the Henning case during the pendency of the appeal can be found here. Judge Young makes clear that he is not budging on the requirement that Wells Fargo produce a corporate resolution, although that order is stayed until the First Circuit decides the appeal.| Permalink