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JUDGE DISMISSES MORTGAGE CLASS ACTION PHILADELPHIA — In a victory for the mortgage industry, a federal judge has dismissed a nationwide consumer class action against GMAC Mortgage Group after finding that the Real Estate Settlement Procedures Act does not prohibit mortgage brokers from “marking up” the fees charged by third-party services providers, such as underwriters, unless there is evidence of an illegal kickback. “Congress did not construct an elaborate regulatory structure of price controls over the mortgage industry. Instead, Congress sought the elimination of kickbacks or referral fees that tend to increase unnecessarily the costs of certain settlement services,” U.S. District Judge James Knoll Gardner wrote in Santiago v. GMAC Mortgage Group Inc. Gardner found that, in passing RESPA, “Congress decided to address areas of misconduct rather than to impose itself on the whole market.” Significantly, Gardner rejected the U.S. Department of Housing and Urban Development’s contrary reading of the law. Instead, Gardner followed decisions from the Fourth, Seventh and Eighth Circuits that likewise rejected HUD’s interpretation. The ruling is a victory for attorneys Robert Nicholas, Leonard Bernstein and Kevin Toth of Reed Smith who argued that HUD’s interpretation of the law was entitled to no deference because it conflicted with the plain meaning of an unambiguous statute. — The Legal Intelligencer 2ND CIRCUIT VACATES LAW FIRM SANCTIONS NEW YORK — Finding that a district court judge abused his discretion, the Second Circuit U.S. Court of Appeals vacated a decision to impose $18,000 in sanctions against two New York lawyers in a cybersquatting dispute. The Second Circuit ruled Thursday that lawyers Scott Mollen and John Sheridan of Herrick Feinstein had acted in good faith in pursuing a cybersquatter in arbitration after Southern District Judge Denny Chin had dismissed their client’s earlier court action with prejudice with the understanding the dispute had been settled. Judge Sonya Sotomayor held in Storey v. Cello Holdings, 02-7281, that the district court “abused its discretion in labeling Cello’s arguments unwarranted.” “Although all of Cello’s arguments may not ultimately have prevailed, none are patently contrary to existing law, especially as it existed at the time the papers were signed,” the court wrote. Mollen said he was “extremely grateful” for the Second Circuit’s ruling. “We believed we had a professional obligation to zealously advance our client’s non-frivolous claims and a right to present arguments in an area of the law that was in its infancy,” he said. — The New York Law Journal RELIGIOUS ISSUES HEAT UP FLORIDA JUDICIARY MIAMI — The battle over a state trial court judgeship in Fort Lauderdale, Fla., is turning into a religious and partisan war. The race pits Broward County Circuit Judge Cheryl Aleman against criminal defense attorney Robert Malove. Aleman is a conservative Christian and former president of the Broward County chapter of the Christian Legal Society. Malove is a Jew who worships at an ultra-orthodox Lubavitcher synagogue, does not use electricity on the Sabbath and quotes Old Testament passages to other lawyers. Malove, a former Broward County assistant public defender, says he will file to run for Aleman’s seat in the September 2004 judicial election. He has the backing of Public Defender Alan Schreiber, one of Broward’s judicial kingmakers. Malove vows to keep his religion separate from his rulings — something he claims Aleman has not done. “I think it’s great that a person has faith,” Malove said. “But it’s private. I have an obligation to follow the law. That will be my priority if I am elected. I’m not running as an observant Jew.” Even though it’s long been considered taboo in Broward County to challenge an incumbent judge, Broward criminal defense lawyers and Democrats have vowed for months to find someone to run against Aleman. They say Aleman, who was appointed by Gov. Jeb Bush in January of last year, has allowed her fundamentalist religious and political views to influence her rulings. Aleman did not return calls for comment. At her formal robing in January 2002, she shocked judges and lawyers who were present by talking in detail about her personal religious views and practices and saying that God called her to be a judge. — Miami Daily Business Review

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