Nevada Judge Sanctions State AG In Robosigning Suit

Foreclosure Mortgage Servicing State Attorney General

On January 30, Nevada’s Clark County District Court ordered the State AG to pay attorneys’ fees in connection with a mortgage servicing vendor’s attempts to obtain discovery in the state’s case alleging the company facilitated fraudulent residential foreclosures, including through so-called “robosigning” tactics. Nevada v. Lender Processing Svcs., Inc., No. A-11-653289-B, (Nev. Dist. Ct. Jan. 30, 2014). The company asserted that the AG abused the discovery process by repeatedly failing to produce materials sufficient to support its claims under the Nevada Deceptive Trade Practices Act. The court rejected the AG’s defense, among others, that the alleged discovery deficiencies simply reflect disagreements between the parties over the evidence necessary to support a claim under state law. Although not a direct issue in this case, the company’s brief repeatedly calls out the AG’s use of outside counsel and notes a challenge to the AG’s use of an outside firm on a contingency fee basis, which is pending before the state supreme court.