On April 30, New York Chief Judge Jonathan Lippman, speaking before an audience in Albany in commemoration of the Court of Appeal’s annual Law Day, announced a set of reforms to promote equal justice for New York consumers in debt collection litigation cases. The transcript of Judge Lippman’s remarks can be found here.
The proposed changes to court rules and procedures covers three areas found only in debt collection cases: affidavits in support of default judgment, proof of service upon the consumer debtor and forms for filing answers and petitions to vacate judgment. The proposed reforms can be found here.
The proposals are nothing new, in fact they are in line with what the New York Department of Financial Services proposed last fall. However, it was clear that those regulations focused on pre-litigation activity and that jurisdiction over attorney debt collectors was questionable. The proposals are also a further expansion of similar or even identical rules currently implemented in New York City.
More striking than the proposed rules and reforms were the inflammatory and biased remarks by the chief judge, who in fact was advocating for one party over the other, while at the same time implying his own judges have been unable to perform their jobs of adjudicating debt collection cases.
As an example, the judge acknowledged that “many debtors receive court papers and fail to appear,” but blamed the high rate of default judgments to “sewer service” or a debtor’s lack of understanding about the debt. That a chief judge would condone a party for not coming to court despite receiving proper notice is quite shocking. Further, the judge pointed to examples of default judgments improperly entered, either by the amount or against the wrong person, but pointed to no statistic or data showing any rise in motions to vacate such judgments which would otherwise support that claim. Finally, the judge announced a series of forms consumers can use to “answer” the complaint but which also provides the consumer the ability to assert a counterclaim even if the claim is not otherwise valid. So in effect the New York Courts are now giving legal advice to consumers.
The New York Rules of Judicial Conduct, Section 100.3 states that a judge shall perform his duties of judicial office impartially and diligently. Section (C) speaks to administrative responsibilities and subsection (1) states that, “A judge shall diligently discharge the judge’s administrative responsibilities without bias or prejudice and maintain professional competence in judicial administration.”
Nowhere in Judge Lippman’s remarks does it indicate that the creditors’ bar participated in or was invited to participate in the development of these proposed rules. Further, there is only a 30-day comment period until May 30, with full implementation by June 15. Opposing views and comments will therefore only be given 15 days consideration, while I am sure the development of these proposed rules were months in the making.
That the court wants to enhance its judicial process and procedures to ensure fairness amongst all parties, including the unrepresented, is commendable. Certainly this is the appropriate forum in which to regulate courtroom activity and attorney conduct, rather than it being pushed down from federal level and even the CFPB. However, the court system has inherent protections for any person who comes into the courthouse and attorneys are bound by the Rules of Professional Conduct. The rampant misconduct described in Judge Lippman’s remarks would warrant immediate referrals to any state disciplinary board and the judge offered no data or instances of same in his courts. Nor do his remarks suggest, for example, that prior affidavits submitted in support of any default judgment were ever rejected upon review by any judge.
The founding principles of our legal system ensure a level playing field. A judge’s role as final arbiter ensures that the interests of both sides are balanced and access to justice is not denied. As the chief judge, Judge Lippman’s remarks set the tone for the court and suggest an inherent bias against those who represent creditors and debt buyers seeking the repayment of legitimate debts, a bias that will likely be followed by other judges within his court. The greatest consumer protection is a healthy and fair court system, not one that looks favorably upon one side over the other.
This post originally appeared on the Consumer Financial Services Blog, run by ARM defense firm Maurice & Needleman.