Friday, July 21, 2017

Money for UC Law Schools

UC Law Schools Win Bid to Intervene in Case Awarding $45M for Botched Mortgage

Karen Sloan, The Recorder, July 20, 2017

University of California law schools and two consumer rights legal organizations have won a bid to intervene in a lawsuit where they stand to receive a collective $40 million in punitive damages from Bank of America. U.S. Bankruptcy Judge Christopher Klein of the Eastern District of California found that the law schools and consumer protection groups acquired standing in the suit when they were unexpectedly made third-party beneficiaries of the total $45 million in punitive damages awarded in a case where Bank of America severely botched its handling of a Sacramento-area couple's mortgage.

Klein ruled in March that a large damage award was necessary to garner the attention of the bank's board of directors and spotlight its poor treatment of mortgage holders. He also ruled that the bulk of the $45 million in damages should go to groups—such as the five law schools affiliated with the University of California—that can help prevent banks from taking advantage of consumers. It's an unorthodox provision and unlike the more common cy pres award, whereby entities such as law schools receive funds from class action lawsuits.

"If the punitive damages award is later reduced or disapproved, then [the intervening entities] will be adversely and pecuniarily affected within the meaning of conventional understandings of standing," Klein wrote in his July 13 opinion allowing the schools and the National Consumer Law Center and National Consumer Bankruptcy Rights Center to intervene in the suit...

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