A Rhode Island federal judge reluctantly followed an appellate court’s order to lift a blanket injunction against foreclosures in a consolidated docket of 825 cases and took other steps to move the litigation forward.
“The Court takes this action reluctantly because it continues to believe that, consistent with the law and proper procedure, it is in all parties' and the Court's best interest to have the parties talk to each other in a meaningful way and to attempt to amicably resolve these matters, without the threat and/or negative consequences of having Plaintiffs' homes taken away from them due to foreclosure or eviction,” U.S. District Judge John McConnell Jr. wrote on Tuesday.
His order followed a June U.S. Court of Appeals for the First Circuit ruling that the stay on foreclosures ran afoul of the Federal Rules of Civil procedure.
However, McConnell temporarily continued a stay on filings in the consolidated docket until both sides can discuss how to best coordinate the court's mandatory mediation for the foreclosures and the litigation.
Finally, he gave the parties until Monday to chose two test cases each. McConnell plans to hold a hearing in those cases, issue an order, then “meet with representatives of the parties to determine how to proceed with the consolidated docket,” he wrote.
The homeowners claim the banks and other institutions that own their mortgages conducted wrongful foreclosure or eviction proceedings. Defendant banks in 143 of the cases joined a First Circuit appeal that claimed McConnell’s stay on foreclosures represented an abuse of discretion.
The plaintiffs were disappointed that the blanket injunction was dissolved, but confident because McConnell must examine the individual facts and make case-specific determinations about whether there should be an injunction in each case, said Corey Allard of the Law Office of George E. Babcock in Pawtucket, R.I. Allard also represented the plaintiffs in the First Circuit.
“We’re confident that we’ll prevail on the facts and the law,” Allard said.
William McBride, an Atlanta partner at Baker, Donelson, Bearman, Caldwell & Berkowitz who represents numerous loan servicers and trustees for the mortgages, said that, procedurally, McConnell’s ruling was not unexpected. As for the other parts of the order, McBride said, “The court seems to be prudently trying to resolve this in an orderly fashion. I have found the mediation process to be quite helpful.”
Maura McKelvey, a Boston partner at Hinshaw & Culbertson who represented the defendant banks and institutions before the First Circuit, declined to comment. Defense lawyers from the some three dozen additional firms, including Boston’s Goodwin Procter and K&L Gates, also declined to comment or did not immediately respond to requests for comment.
Sheri Qualters can be contacted at firstname.lastname@example.org.