The very fact that this item “LPS fires back with motion seeking sanctions against Alabama attorney,” was treated as a news story by Housing Wire is further proof that Housing Wire is above all committed to promoting client and mortgage industry interests and only incidentally engages in random acts of journalism.
LPS is desperate to create a shred of positive-looking noise in the face of pending fines under a Federal consent decree, mounting private litigation, and loss of client business under the continued barrage of bad press. Housing Wire, who has LPS as one of its top advertisers, is clearly more than willing to treat a virtual non-event as newsworthy to help an important meal ticket.
If you know anything about litigation, particularly when small fry square off against large companies, it’s standard for the well funded party to engage in a war of attrition against the underdog. One overused device is to threaten or file for sanctions. Even when they are weak or groundless, they still waste opposing counsel’s time and energy.
In this case, anyone with even a smidge of familiarity with the matters at hand would know the charges by LPS against attorney Nick Wooten, who has launched a series of cases charging LPS with impermissible fee sharing and other violations of bankrutpcy court rules, is a sign of weakness, not strength.
The background is pretty simple. Wooten filed a case against LPS in which he included a series of LPS contracts as exhibits. LPS settled the case and had Wooten sign a confidentiality agreement. Now LPS is trying to claim that the confidentiality agreement extends to the exhibits filed in the earlier case.
This is pathetic. You can’t contract to make public information confidential. If you get me to sign an agreement that the fact that water boils at 212 degrees Farenheit at sea level is confidential, and then you sue me because I mention that later in a public setting, you’d be laughed out of court if you tried to enforce that provision. The same idea applies here.
So this part of the article, which sound logical unless you understand the rules of the road, is nonsensical:
Wooten and LPS entered into a confidentiality agreement in the Wood case in May 2010, according to the court filing. That agreement stated that any material in the case deemed proprietary, private or commercially sensitive by either party would be kept secret.
This confidentiality provision was not imposed by the judge (as in “sealing the records” which would have been the normal route to try to protect sensitive LPS material), but entered into later pursuant to settlement discussions.
When Wooten filed the case, he made the contracts public. He was under no obligation to keep LPS material confidential at that juncture. The party for LPS to have pursued legally was whoever violated their confidentiality agreement with LPS by providing those contracts to Wooten. LPS can’t use the later confidentiality agreement to turn the clock back. Wooten makes an argument based on this logic in regards to a deposition LPS arguing Wooten has to exclude from his current case:
Wooten claims that the Newland deposition was distributed to over 2,000 lawyers a year before anyone asked for confidentiality, noting that it was taken in June 2009. “They knew and have known that deposition has been all over the country. It’s got more frequent flier miles than Delta airlines and every passenger they have booked,” he said.
Consider the idiocy of the LPS position. Let’s say they manage to push Wooten out of the picture. Any Joe admitted to the bar in any state where he has filed the litigation can refile the same case. word for word, exhibit for exhibit (once they locate and sign up the client). And the next guy might well have deeper pockets. If LPS thinks they are going to make this litigation go away by huffing and puffing, they are smoking something very strong.
It’s rather ironic that LPS accuses Wooten of disparagement, when its blowhard lawsuit looks to be a long form effort to use litigation as an excuse to dump every bit of information it can spin to put Wooten in a bad light and make it look more meaningful by including it in a court filing.
The Housing Wire story also suffers from a want of fact gathering. The article makes hay out of a Wooten loss in the US v. Congress case, which Adam Levitin and this site dismissed as narrow and of no precedential value. It fails to mention that Congress is being appealed (by Wooten’s co-counsel) and that Wooten subsequently won a case that is far more significant as a precedent.
Another sign of bias in the reporting is the amusing internal contradiction of LPS asserting that its agreements with lawyers are a state secret, as contrasted with an analyst at Stevens asserting that it’s impossible that 200 attorneys are “in cahoots” with LPS on fee splitting. He’s basically arguing that the arrangement set forth in the contracts that LPS is belatedly trying to call confidential couldn’t possibly be secret. Wooten could have a lot of fun calling this guy as an expert witness.