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Naked Capitalism Article by yves Smith, december 11, 2010

From Naked Capitalism

Saturday, December 11, 2010

New Tactic to Silence Foreclosure Abuse Critics: Sue Them

I suppose the latest efforts taken by the members of the foreclosure industry to silence and neuter critics represent a perverse form of progress. If you go by the Ghandi timeline, “First they ignore you, then they ridicule you, then they fight you, then you win,” opponents of bad foreclosure practices seem to have done enough damage as to now be worth fighting.

But what is telling are the desperate-looking but nevertheless potentially effective measures being deployed to hamstring the opposition. The vanguard of this effort are foreclosure defense attorneys, many of whom are solo or small firm operators, with not hugely lucrative practices or doing pro bono work (you don’t make a lot of money defending people who have no money).

Suing someone like that, even with a suit that seems spurious, throws a wrench in their operation. It takes time to deal with litigation, and often money, plus the stress is also a considerable distraction. And of course, the hope is no doubt that this sort of risk will also deter other lawyers and critics.

The first example is a lawsuit filed by National Title against Matthew Weidner, a Florida attorney who blogs about foreclosure fraud. The suit charges him with slander and libel.

As most readers no doubt know, in the US, slander and libel are false and malicious statements that damage the reputation of the subject. Thus the most effective defense in a slander or libel case is to establish that the remarks made were accurate (note that remarks that are narrowly accurate but misleading can be deemed to be slanderous).

The cause celebre is that Weidner included a four-part YouTube video of a deposition of Crystal Moore, a robo signer at National Title, and also provided some commentary about the video in his post.

Note that Weidner had NOT posted the video on YouTube, and this deposition was not one taken as part of a suit he was involved in. A different lawyer, Christopher Forrest, had put videos of three National Title employee depositions he had taken on YouTube. National Title secured an injunction on Wednesday ordering Forrest to remove the videos, but the Crystal Moore videos still seem to be up, and Forrest said he had removed his videos but others reposted them. The ACLU filed an emergency appeal on Thursday, calling the injunction a “gag order”.

Per the St. Petersburg Times (hat tip April Charney):

In a suit filed in Pinellas-Pasco Circuit Court, the company says Weidner has “deliberately and maliciously” used the term robo-signers “to vilify NTC for signing documents … when (Weidner) knew that it is entirely legally and appropriate to do so.”

The “gist” of statements on Weidner’s blog, the suit says, is that Nationwide Title is an “unethical company” that manufactures false evidence used to foreclose. The statements have permanently damaged the company’s reputation and subjected it to “public hatred, scorn and ridicule,” according to the suit, which seeks damages in excess of $15,000…

Because of the postings, Nationwide Title said, the three had to endure veiled death threats and “highly offensive” comments about their appearance.

I have a sneaking suspicion that the mental health of its employees is not the main reason National Title has taken action against Weidner.

Note that this effort to take down the videos comes as part of a broader battle in Florida over the transparency of court proceedings. Some Florida judges had taken to barring members of the public from watching foreclosure court proceedings, contrary to Florida law, which led the ACLU, some First Amendment groups, and several media outlets to write to the Florida chief justice and one of its circuit court judges. The chief justice, Charles Canaday, responded quickly and ordered judges to open their hearings to the public.

The robo-signing video depositions fall in a grey area, and it is possible that Florida courts may decide to restrict their release. However, it is separately pretty difficult to see what in the Weidner post rises to the level of defamation (I searched by name to see if he had posts on the other two National Title employee depositions, and did not find any). He clearly signals his doubts about the accuracy of Moore’s testimony as opinion (opinion, per Wikipedia, is not actionable). The simple fact is that the raw deposition material is damaging:

16:00 What good and valuable consideration did Citimortgage get for this assignment? I don’t know. Do you know what good and valuable consideration is? No

17:00 Did you read this assignment. No. Do you ever read any of the documents before you sign them? No. How much time do you spend on the assignments? A few seconds.

19:34 Did Ameriquest Mortgage give you permission to sign this document? I don’t know.

21:45 Did you verify the information in this document? No. Do you ever take steps to verify information you sign? No.

28:00 How many documents would you sign a day? About 3,000 a day. When you signed the assignment, the notary didn’t actually physically see you sign the document right? Right.

The remarkable part of the lawsuit is the claim that Weidner aimed to “to vilify NTC for signing documents … when (Weidner) knew that it is entirely legally and appropriate to do so.” As reader ella pointed out:

An affidavit is a legal document which can substitute for live witness testimony in court. All testimony in court is governed by the rules of evidence or by statute. All testimony requires that the witness swears to tell the truth, is competent and has personal knowledge of the facts they are testifying about. An affidavit is no different, in most if not all jurisdiction, the affiant swears to tell the truth by being placed under oath by the notary, the affiant states in the affidavit that they were sworn, are competent and that they have personal knowledge of the facts in the affidavit. The notary attests to the oath of the affiant and that the affiant is who they claim to be.