In Charleston, West Virginia, The West Virginia Record reports:
- One of West Virginia's largest banks has asked that a lawsuit brought against it for predatory lending be moved to a federal court(1). Earlier this month, Huntington National Bank submitted an eight-page notice of removal to have the suit transferred to the U.S. District Court for the Southern District of West Virginia.
- Plaintiff Gary Miller sued the bank, its mortgage group and three other defendants in Kanawha County Circuit Court in December 2011. Miller accused them of "flipping," or using inflated appraisals and other unlawful practices to induce "unsophisticated" consumers into a series of unwise and expensive loans.
- Flipping maximizes fee income to banks, but strips homeowners of equity in their homes, pushing them into default and, in some cases, foreclosure.
(1) An ABA Journal article (see Judge Says Firm Must Explain ‘Fraudulent’ Removals or Pony Up $25K) offers this observation on the legal maneuver used in this story by Huntington National Bank to find a friendlier forum to defend against this lawsuit, one commonly used in civil cases by big-time corporate defendants and their white-shoe law firms in lawsuits brought by (possibly under-financed) individuals and other plaintiffs on behalf of individuals, of moving a case from a state to a federal court:
- [I]t is widely believed that plaintiffs, particularly individuals rather than corporations, fare better in state courts where they have greater likelihood of getting to a jury and often benefit from more favorable interpretations of law. Defendants in turn tend to prefer the federal courts. Thus removals can become a cat-and-mouse game in which a plaintiff names a party having nothing to do with the matter as one of the defendants to prevent the other side from removing the matter to federal court. That court can find fraudulent joinder and keep the case or remand it.
- But studies have shown a greater increase in recent years of defendants removing cases to federal court, only for them to be dispatched back to state court for erroneous removal. One researcher, a third-year student at New York University School of Law, found that most often in such situations, the plaintiffs are individuals. And the rate of their cases being remanded back to state court is higher, too, wrote Christopher Terranova in last summer’s edition of the Willamette Law Review (PDF).
- He adds that “the delays and costs of that extra procedural step to federal court are more costly and burdensome for most individual plaintiffs than they are for bigger defendants with more assets."
For the above-referenced Willamette Law Review article, see Erroneous Removal As A Tool For Silent Tort Reform: An Empirical Analysis Of Fee Awards And Fraudulent Joinder (article also available at http://ssrn.com/abstract=1073402).
For an example of one Federal judge excoriating a lawyer and law firm for, according to the judge, their history of fraudulent removal requests of cases from state court to Federal court, see Hollier v. Willstaff Worldwide, Case 6:08-cv-01382-TLM-CMH (W.D. La. 2009):
- Sadly, the Court is not surprised by G.W. Premier’s counsels’ tactics in this proceeding as Ungarino & Eckert, L.L.C.’s reputation proceeds it. This case is but one in a long line of fraudulent and improper removals that Ungarino & Eckert, and more specifically Matthew Ungarino, have filed in this and other districts. [...] [For more, see Hollier v. Willstaff Worldwide (pp. 4-9).]