Catherine Cortez Masto
The foreclosure processor sued by Nevada Attorney General Catherine Cortez Masto in last year’s robosigning cases has now retaliated, suing Masto and alleging due process violations.
In December, Masto’s office sued Lender Processing Services Inc. (LPS) of Jacksonville, Fla., claiming it was involved in widespread fraud involving mass document-signing procedures in which foreclosure documents were fraudulently notarized by the thousands. That suit remains active in Clark County District Court.
The investigation that led to her suit also resulted in criminal charges against several notaries and two LPS officers.
On Wednesday, attorneys for LPS sued Masto in federal court in Las Vegas charging its due process rights were violated in the investigation.
Their suit suggests that by hiring an outside law firm with a profit motive to investigate and litigate against LPS, Masto has violated the company’s rights.
‘’By illegally deputizing (law firm) Cohen Milstein and permitting them to stand in her shoes and exercise the state’s sovereign power, not only for the state’s purposes, but also for Cohen Milstein’s own private benefit and ends, the attorney general has violated plaintiff’s constitutional rights and Nevada law,’’ the suit says.
''By ceding and outsourcing authority for the investigation of and litigation against plaintiff to Cohen Milstein pursuant to the contingency fee agreement, the attorney general has caused a personal financial interest to be injected into the targeting of plaintiff in this matter and created a powerful incentive for Cohen Milstein to focus single-mindedly on maximizing the amount of monetary penalties recovered from plaintiff, rather than focusing on the public interest the attorney general is charged with serving,’’ the suit says.
A request for comment was placed with Masto’s office.
The isn’t the first time the law firm, known for representing plaintiffs in class-actions and formally called Cohen Milstein Sellers & Toll PLLC, has been hired by Masto. Cohen Milstein has offices in Washington, New York and other major cities.
In 2010, homebuilding giants Pulte Homes Inc. and Lennar Corp. sued Masto, charging she improperly hired the firm to investigate predatory mortgage lending allegations against the companies.
Their suits complained Cohen Milstein was associated with unions that had been trying to organize subcontractors to the home builders.
Separately, U.S. District Judge James Mahan on June 21 dismissed a homeowners’ class-action lawsuit filed against LPS and other companies involved in the foreclosure process locally.
That suit was based on the same robosigning allegations as are alleged in Masto’s lawsuit filed on behalf of the state.
Mahan said in his ruling that while the class-action suit sought to void allegedly fraudulent foreclosure actions, most of the homeowner plaintiffs had not had their homes foreclosed on so the suit was premature for them.
Mahan also ruled that alleged violations of the Nevada Deceptive Trade Practices act couldn’t be asserted by the homeowners in the suit.
He ruled that’s because the act applies to the sale of goods and services, but not real property transactions.
The state’s criminal charges against two LPS title officers, Gerri Sheppard and Gary Trafford, are pending in Clark County District Court with an April trial date set.