Update (March 29, 2102): U.S. District Court Judge Patrick J. Schiltz gave fair warning (see below). The “show me the note” foreclosure defense is now officially not only a losing defense but a sanction-triggering one.
Original Post (under Subject Line:Pied Piper or Consumer Advocate Sticking Up for Underdogs?) (March 1, 2012): The pied piper of Hamelin from old fairy tales, some may recall, was a frightening and deceitful menace that is said to have victimized the German town of Hameln (the correct spelling) back in the middle ages. Hired by the towns folk to rid the town of a rat infestation, instead, he stole all of the town’s children, who according to some renditions were never to return.
Is William Butler of Butler Liberty Law LLC a heroic figure doing battle against some of our economy’s largest and most powerful interests or is he exploiting the downtrodden, appearing to offer help (for a small fee) when he has none to offer (and worse)?
That would depend on whom you ask.
The advocates for his adversaries portray an “unrepentant” Butler exploiting vulnerable people who have defaulted on their mortgage loans, who face certain foreclosure and eviction, and who nevertheless scrape together money to give to Butler so they can stay in their homes (which Butler has no power to effect).
U.S. District Court Judge Patrick J. Schiltz (D. Minn.) has plainly made clear to Butler that in Judge Schiltz’s view, Butler’s “show me the note” defense to foreclosure actions has no legal merit in cases in which Butler invokes the argument, that this is not a matter open to dispute, and that lawyers cannot just make stuff up (Judge Schiltz’s disapproval is reflected in transcript here).
Butler and Erik Kaardal, the lawyer Butler appears to have retained to avoid being sanctioned (more on Kaardal here and here), argue that the “show me the note” argument may be viable even if the Court has expressly and repeatedly pronounced it dead.
Butler and his “sanctions counsel” conclude their brief in a manner that is rhetorically somewhat deflating. They argue, in essence, “if the Court does punish Butler, please be gentle.” Lawyers call that “arguing in the alternative” and it is a very common strategy in argument (“I did not commit the crime but, if you find I did, you should find I was insane at the time”) but perhaps it is not without risk.
If one is “all in,” taking a position that the Court has rejected after express instruction from the Court one’s claims have no merit, conceding the Court may be correct that this conduct is sanctionable but asking for mercy regardless might not actually be a successful strategy.
What is your sense of whether this opinion is fair warning to the clients themselves – that they will be next if they choose to continue? If ever there were a client profile that is uninterested in what the law really is, it’s the “foreclosure victim community.”
Page 47 may create some very interesting results.
Bringing attention to page 47 of Judge Schiltz’s discussion of Butler’s “business model” is a good thing. I expect that this severe sanction, to the extent it is disseminated and absorbed by the “foreclosure victim community,” would constitute a fair warning to that community (if there could be said to be such a community). But the premises (dissemination/absorption among that “community”) is dubious and, furthermore, the more likely audience for Judge Schiltz’s sanction — Minnesota litigators — are also the most in need of the warning.