Wednesday, November 17, 2010

BofA Seeks To Dodge State Court Adjudication In Ohio Robosigner Suit; Requests Removal To Federal Court

In Sandusky, Ohio, The Morning Journal reports:
  • A lawsuit brought by a Sandusky woman, who lost her home to foreclosure and is suing the bank, claiming the paper work was done improperly, could be moved to federal court. Rhonda McLaughlin filed the lawsuit against the Bank of America claiming a “robosigner” signed an affidavit during the foreclosure process, thus violating the law.

  • Bank of America wants the case moved to federal court because McLaughlin and her attorney, Daniel McGookey, are claiming the bank violated the Fair Debt Collections Practices Act, the Ohio Consumer Sales Practices Act, Ohio’s RICO Act and Ohio common law, which are all federal offenses. Bank of America also states because the judgment of the suit is more than $75,000, the action should be shifted to federal court. McGookey said [] he believed the case should remain in Erie County Common Pleas Court.(1)

For the story, see Robosigner suit should be moved, bank says.

For the lawsuit, as filed in Erie County Common Pleas Court, see McLaughlin v. Bank of America, et al.

(1) An ABA Journal article (see Judge Says Firm Must Explain ‘Fraudulent’ Removals or Pony Up $25K) offers this observation on the legal maneuver reported in this story, one commonly used in civil cases by big-time corporate defendants and their white-shoe law firms in lawsuits brought by individuals and other (possibly under-financed) plaintiffs, 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

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).]