The United States District Court for the District of New Jersey recently granted jurisdiction, severed and dismissed a complaint filed by 103 plaintiffs claiming that a group of lenders and mortgage servicers conspired to injure them through their mortgage assignment and servicing procedures. See Haley v. AMS Servicing, LLC, 2014 WL 2602044 (D.N.J. June 11, 2014). The Court addressed a number of issues in its decision. First, the Court held that it had jurisdiction under the Class Action Fairness Act of 2005 (“CAFA”), which gives federal courts jurisdiction over certain plaintiffs in actions asserting common questions of law and in which there are at least 100 plaintiffs, at least some individual claims exceed $75,000 and the cumulative claims exceed $5,000,000. See 28 U.S.C. § 1332. Second, because the claims consisted of alleged wrongdoings by different defendants against different plaintiffs, the Court held that the claims of each plaintiff should be pled separately rather than as a class, and severed the named plaintiff’s claim from all others. If any of the plaintiffs other than the named plaintiff wanted to file their own individual action, they could do so within 30 days if they paid the requisite filing fees. Finally, the Court dismissed the complaint of the named plaintiff, whose sole allegation was “As a direct and proximate result of the deceptive and wrongful practices of Defendants, including but not limited to the use of the MERS system, Plaintiff has suffered financial damages and/or other injuries as herein described.” The Court found these “naked assertions,” which did not even refer to a specific defendant, insufficient and dismissed the complaint. The two law firms who represented the plaintiffs in this action are currently being sued by the attorneys general in their respective states for misleading the plaintiffs. See http://www.nytimes.com/2014/08/24/realestate/a-crackdown-on-law-firms.html?_r=0.
For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com.
