Legal News for Tues 10/15 - Litigation Financing Decision in NJ, Upcoming Judicial Reforms in 3 States, Boies Schiller Defense in Mortgage Class Action and Election Related Lawsuits

Minimum Competence

This Day in Legal History: Black Panther Party for Self-Defense Founded

On October 15, 1966, the Black Panther Party for Self-Defense was founded in Oakland, California, by Huey P. Newton and Bobby Seale. Although primarily thought of as a political and social movement, its founding also had significant legal implications. The Black Panther Party was established to address systemic racism, police brutality, and economic inequality faced by Black communities, particularly in the legal system and law enforcement practices.

One of the key legal aspects of the Black Panther Party’s activities was their use of California’s open carry gun laws. Members of the Party would patrol Black neighborhoods while armed to monitor police interactions, invoking their constitutional right to bear arms. This practice was known as "copwatching" and sought to hold law enforcement accountable. The Panthers' visible use of firearms and legal knowledge led to heightened tensions between them and law enforcement, prompting legislative responses, such as the Mulford Act in 1967, which was designed to outlaw the public carrying of loaded firearms in California and was supported by then-Governor Ronald Reagan.

The Black Panther Party's actions brought attention to issues of police misconduct and unequal treatment of African Americans within the legal system, making October 15 a key date in both the civil rights movement and the history of legal rights advocacy in the U.S.

In a boon to litigation financing in the Garden State, the New Jersey Superior Court Appellate Division ruled that litigation finance deals do not constitute "loans" under state law, protecting the industry from claims that high-interest rates violate lending regulations. The case originated from a traffic accident plaintiff who received $9,600 in funding from Covered Bridge Capital to support her litigation.

After partially repaying the company and discharging the remaining debt in bankruptcy, she sued, alleging violations of consumer protection laws. The court dismissed her claims, stating she lacked standing as an "aggrieved consumer," given that she financially benefited from the agreements. The panel referenced federal court precedent to classify litigation finance as contracts for recovery interests, rather than traditional loans. Both plaintiff and defense attorneys acknowledged the significance of the ruling, with the defense celebrating the clarification of the legality of these deals, while the plaintiff's lawyer expressed concern over its impact on consumer fraud statutes. New Jersey lawmakers continue to debate potential regulations, including a 40% cap on interest rates for litigation finance deals.

Litigation Finance Wins With NJ Court Rejecting Usury Claims (1)

In the upcoming November election, voters in New Hampshire, Arizona, and Colorado will consider significant judicial reforms. New Hampshire's proposal (CACR 6) would raise the mandatory retirement age for judges from 70 to 75, allowing experienced judges to serve longer. This change has bipartisan support, with proponents arguing that judges often start later in life, and the current retirement age cuts short their careers.

Arizona voters will decide whether to eliminate judicial term limits and retention elections with Proposition 137. This move, driven by the state legislature, follows controversy over justices upholding an old abortion law, with opponents concerned about reduced voter oversight. Meanwhile, Colorado voters will determine whether to create a new judicial discipline board in response to a scandal involving the former Chief Justice. The amendment would transfer authority from the state Supreme Court to the board, aiming for more transparency in judicial misconduct cases.

Each state’s proposal reflects broader questions about judicial accountability and the balance between independence and oversight in the legal system; questions that, at the federal level, have no answer coming in the foreseeable future.

Voters to Weigh Judicial Retirement Age, Term Limits, Discipline

Boies Schiller Flexner is defending itself against allegations of collusion with a hedge fund in a class action lawsuit accusing United Wholesale Mortgage (UWM) of conspiring with brokers to overcharge homebuyers. UWM recently requested that the case be dismissed and the law firm sanctioned, claiming Boies Schiller is working with hedge fund Hunterbrook Capital, which is shorting UWM stock. In response, Boies Schiller denied any involvement with Hunterbrook’s stock trades or funding of the lawsuit, calling UWM's accusations a "side-show" aimed at distracting from the case’s core issues.

The lawsuit, filed in April, stems from an investigation by Hunterbrook Press that raised concerns about UWM’s practices. Boies Schiller acknowledged receiving data from the nonprofit Hunterbrook Foundation but maintained full control over the case. UWM accuses the plaintiffs and the firm of attempting to damage its business and stock value, but Boies Schiller has dismissed these claims as unfounded. The case, Escue v. United Wholesale Mortgage LLC, continues in Michigan federal court.

Law firm Boies Schiller denies hedge fund collusion in home buyer class action | Reuters

In the lead-up to the 2024 U.S. presidential election, voters in various states are turning to the courts to address voting accessibility issues. Ericka Worobec, a Pennsylvania voter, successfully sued to ensure that voters are notified if mail-in ballots have errors after hers was rejected due to an incomplete date. Her case is one of nearly 100 election-related lawsuits in key battleground states like Arizona, Michigan, and Wisconsin.

These lawsuits often focus on expanding or restricting voting rights. In Wisconsin, voters with disabilities are seeking electronic ballot access. Some cases have seen partial victories, while others remain unresolved, as courts navigate issues like polling place access, ballot marking, and voter registration. These legal battles highlight the ongoing tension between protecting voter access and ensuring election integrity though it should be noted in all elections, actual voter fraud is exceedingly rare.

Some US voters head to court before they head to the polls | Reuters

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