by Frank Thomas
Regarding the possibility of foreclosure lawsuits against the banks by individual homeowners, an obvious way people can afford to do this is by bringing a class action lawsuit or, perhaps better still, the same is first done by a 50 state attorney generals' class action suit on behalf of all citizen plaintiffs.This is exactly what occurred in the 1998 46 state successful class action suit precedent against the major tobacco industry firms on behalf of those who get sick from tobacco smoke. This case ended in a court damage ruling for a +$200 billion award to the 46 states (paid over 25 years).
During the prior period 1954-1992, individual and small class action tobacco case suits based on negligence, deceit, failure to warn, breach of express warranties, strict liability were lost. Plaintiffs went broke legally fighting the rich tobacco firms that took thousands of dispositions, filed every conceivable motion and legal delay tactic, eventually bleeding dry plaintiffs' financial and emotional resources.
Then came a stronger class action suit filed by flight attendants in Florida claiming personal medical injury and costs related thereto from second-hand smoke in planes. This resulted in over 3000 individual lawsuits and a major settlement in 1997. This was part of a wave of smaller class action lawsuits in the 90s brought by those injured by tobacco products as well as medical reimbursement suits brought by states'attorney generals and insurance firms of a few states (which led to 46 state class action suit).
Medical, legal and criminal theories were used successfully in the flight attendants' case -- most of which would have a direct application in a possible class action suit against the illegal mortgage documentation acts of major U.S. banks. Legal theories used included fraud, intentional and negligent misrepresentation (sound familiar to banks' prior knowledge of illegal non-transfer of proper mortgage documentation/property title to suck in investors for pooled mortgages faster -- driven by banks' fee greed), unjust enrichment or indemnity (sound familiar to banks' quick buck actions), and criminal theories under the RICO Act ... criminal law that also has direct application possibilities against banks' massive illegal mortgage documentation, false documentation, and subsequent possible criminal homeowner foreclosure acts.
Thus, as the tobacco firms were forced to seek a national settlement in late 90s under the 1998 medicare-related class action U.S. Master Agreement involving 46 states, so should the banking industry be forced to negotiate a class action settlement for their gross misdemeanors and deceit around the mortgage closure and foreclosure casino stings perpetuated on millions of homeowners. If this also means ultimately applying existing legislation to break up the big banks on the basis their behavior has posed and is posing a threat to U.S. financial or economic security, then so be it.
