Monday, June 3, 2013

Bankster Moves Forward With State Court Judicial Foreclosure In Case Where Constitutional Challenge To Colorado's Non-Judicial/Public Trustee Proceeding Remains Open; Judicial Review-Evading Bankster To Federal Judge: 'You Must Dismiss This Action - The Case Is Moot!'

In Denver, Colorado, The Denver Post reports:

  • Amid confusion over whether a federal judge can still decide if an Aurora woman's constitutional rights are violated by Colorado foreclosure laws, U.S. Bank has filed a lawsuit in state court to take the house.

    A flurry of documents filed in the federal lawsuit Lisa Kay Brumfiel brought against the bank and some of the state's top foreclosure lawyers indicate that a giant question mark remains: whether Colorado foreclosure law violates the 14th Amendment right to due process and whether a federal judge can still take on the issue even if it doesn't affect Brumfiel anymore.

    U.S. Bank, the trustee for the investment trust that bought Brumfiel's note shortly after she signed the loan in 2006, argues that the entire issue is moot since it dropped its public-trustee case against her.

    And even though U.S. Bank filed a lawsuit Thursday in Arapahoe County District Court to take the house, Brumfiel's challenge involved only the public-trustee foreclosure process.

    While U.S. District Judge William J. Martínez last week agreed that at least one matter was resolved — and issued a permanent injunction against the bank from starting a new public-trustee foreclosure against Brumfiel — he indicated the constitutional matter remained unresolved.

    That came May 14 in an order allowing a pair of advocacy groups — the Colorado Center on Law and Policy and the Colorado Progressive Coalition — to file a brief, called an amicus curiae, in support of Brumfiel's constitutional argument.

    "The court has not issued any decision regarding the constitutional questions about which (the groups) seek to intervene," Martínez wrote in allowing the briefs. There remain "constitutional questions at issue in this case," he wrote.

    The groups filed the 19-page brief May 20 outlining how the state's public-trustee process is fraught with constitutional pitfalls.

    U.S. Bank on Thursday filed a response that simply said the issue is dead — it canceled the public-trustee foreclosure.(1) Brumfiel has said in another filing that thousands of Coloradans facing foreclosure are subject to the same problems, although she stopped short of asking Martínez to stop all public-trustee foreclosures until her case is decided.

    "Plaintiff's constitutional challenges to the Rule 120 public trustee foreclosure process are moot," U.S. Bank said in a brief filed with the court.

    Attorney Larry Castle, whose law firm filed the foreclosure against Brumfiel and helped draft the law in question, said in a court filing that Brumfiel "cannot be harmed by the process of which she complains."

    At issue is a state court hearing, known as a Rule 120 for the procedure that governs it, in which a judge signs the final order for a county public trustee to auction a piece of property, usually a house.

    Brumfiel challenges the law that governs the Rule 120 process, saying a bank's right to foreclose is never firmly established, which is a requirement of due process. Instead, a lawyer can sign a statement declaring that his client, usually a bank or other lender, owns the note and deed of trust but need only provide a photocopy.
For the story, see Constitutionality question in Colorado foreclosures remains open.

(1) From the bankster's 5-page response to the 19-page amicus brief filed by the Colorado Center on Law and Policy and the Colorado Progressive Coalition:
  • [T]he constitutional issues addressed by the Amici Brief are not justiciable in this matter.

    There is no longer any case or controversy regarding the constitutionality of the public trustee foreclosure process under C.R.S. § 38-38-101 or C.R.C.P.120 (“Rule 120 Public Trustee Foreclosure”) that affects Plaintiff.

    Each of Plaintiff’s nine causes of action has been rendered moot by: (1) Trust’s withdrawal of its Rule 120 Public Trustee Foreclosure against Plaintiff as affecting the Property, and (2) the Trust’s consent to a permanent injunction prohibiting any future Rule 120 Public Trustee Foreclosure against Plaintiff under the operative Note and Deed of Trust affecting the Property. See Doc. 126 at 9 (capitalized terms defined in Doc. 126).

    Consequently, and with no case or controversy remaining, “the federal court must dismiss the action for want of jurisdiction.” Jordan v. Sosa, 654 F.3d 1012, 1023 (10th Cir. 2011) (internal quotation marks and citations omitted); see also Doc. 126 at 6-9 (fully incorporated herein by this reference).
Editor's Note: Not surprisingly, in its brief, the bankster failed to address the voluntary cessation doctrine (or any of the 10th Circuit Court of Appeals cases - the federal appeals court that would hear any appeal in this litigation - recognizing the existence of the doctrine), much less why it is inapplicable here. I suspect that the amici will respond to the bankster's assertion that the case is moot by raising this issue.

See United States v. WT Grant Co., 345 US 629 (1953), in which the U.S Supreme Court made these comments regarding the 'voluntary cessation doctrine' and its effect in making a case moot, particularly in a case where there is a public interest in having the legality of the challenged practice settled:
  • Both sides agree to the abstract proposition that voluntary cessation of allegedly illegal conduct does not deprive the tribunal of power to hear and determine the case, i. e., does not make the case moot. United States v. Trans-Missouri Freight Assn., 166 U. S. 290 (1897); Walling v. Helmerich & Payne, Inc., 323 U. S. 37 (1944); Hecht Co. v. Bowles, 321 U. S. 321 (1944).

    A controversy may remain to be settled in such circumstances, United States v. Aluminum Co. of America, 148 F. 2d 416, 448 (1945), e. g., a dispute over the legality of the challenged practices. Walling v. Helmerich & Payne, Inc., supra; Carpenters Union v. Labor Board, 341 U. S. 707, 715 (1951).

    The defendant is free to return to his old ways.[4] This, together with a public interest in having the legality of the practices settled, militates against a mootness conclusion. United States v. Trans-Missouri Freight Assn., supra, at 309, 310.
See also, ACLUM v. Conference of Catholic Bishops, 705 F. 3d 44 (1st Cir. January 15, 2013) (discussing the 'voluntary cessation doctrine which provides for an exception to mootness):
  • The voluntary cessation exception "traces to the principle that a party should not be able to evade judicial review, or to defeat a judgment, by temporarily altering questionable behavior." City News & Novelty, Inc. v. City of Waukesha, 531 U.S. 278, 284 n. 1, 121 S.Ct. 743, 148 L.Ed.2d 757 (2001).

    This is to avoid a manipulative litigant immunizing itself from suit indefinitely, altering its behavior long enough to secure a dismissal and then reinstating it immediately after. See Already, LLC v. Nike, Inc., ___ U.S. ___, ___, 133 S.Ct. 721, ___ L.Ed.2d ___, 2013 WL 85300, No. 11-982, slip op. at 4 (U.S. Jan. 9, 2013); Brown, 613 F.3d at 49; see also United States v. W.T. Grant Co., 345 U.S. 629, 632, 73 S.Ct. 894, 97 L.Ed. 1303 (1953) (noting that if a court declares the case moot, "[t]he defendant is free to return to his old ways").

    As the Supreme Court stated last term, "[s]uch ... maneuvers designed to insulate a decision from review ... must be viewed with a critical eye" and, as a result, "[t]he voluntary cessation of challenged conduct does not ordinarily render a case moot." Knox v. Serv. Emps. Int'l Union, Local 1000, ___ U.S. ___, 132 S.Ct. 2277, 2287, 183 L.Ed.2d 281 (2012) (citation omitted).

    However, even in circumstances where the voluntary cessation exception applies, a case may still be found moot if the defendant meets "the formidable burden[[9]] of showing that it is absolutely clear the allegedly wrongful behavior could not reasonably be expected to recur." Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 190, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) (citing United States v. Concentrated Phosphate Exp. Ass'n, Inc., 393 U.S. 199, 203, 89 S.Ct. 361, 21 L.Ed.2d 344 (1968)); Parents Involved in Cmty. Sch. v. Seattle Sch. Dist. No. 1, 551 U.S. 701, 720, 127 S.Ct. 2738, 168 L.Ed.2d 508 (2007).

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