Steve Harvey Law Turns Two; Federal Rules Amendments Take Effect

Wow! It’s been two years to the day since I opened Steve Harvey Law LLC, and we are still here, representing clients in diverse matters, and growing the client base and the team.

If there’s one thing I have learned in the past two years, it’s that the key to law firm success over time is keeping true to core principles: integrity, service to clients, respect, collegiality, and the pursuit of excellence. By adherence to these principles we deliver great value to our clients.

As I begin my third year at Steve Harvey Law, I am grateful for the many friends and clients I have worked with, and the many I continue to work with! I wish you all the best and happiest times as we get ready to close out 2015.

As if to commemorate our law firm anniversary, the federal judiciary rolled out the newest set of amendments to the Federal Rules of Civil Procedure effective December 1, 2015. Originally enacted in 1938, the Rules govern civil proceedings in United States federal courts. Many state courts also look to them for guidance. They are of great interest to those of us who represent clients in lawsuits for business or principle.

Over the years, the Rules have been amended 37 separate times in varying degrees of importance to address issues affecting federal litigation. This most recent set (affecting Rules 1, 4, 16, 26, 30, 31, 33, 34, 37, 55, and 84) attempts to fix some of what is perceived to be wrong with the discovery process, i.e., exchange of written information, documents, and electronic materials between parties in litigation. Discovery is widely viewed as the most expensive part of litigation.

Speaking very broadly, plaintiffs generally want more and defendants (such as corporations) generally want less discovery. These interests had a chance to influence the amendments, through comments ranging from civil rights advocates like the NAACP to business interests such as the U.S. Chamber of Commerce.

The biggest thing in the new Rules is “proportionality” in discovery. Except that it isn’t new; federal courts were always able to disallow discovery not proportionate to the needs of the case. But proportionality is now being given much more emphasis. Indeed, the scope of discovery in Rule 26 has been revised to put proportionality on a par with relevance.

New Rule 26 provides: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.

Everything in italics is new to Rule 26, but these are familiar concepts in federal litigation. The question is whether the proportionality emphasis will make much of a difference in practice. Many commentators are skeptical that the new emphasis will have any significant effect, because most courts and litigators have long taken these factors in consideration.

Another change to Rule 26 is the elimination of the concept that relevant information need not be admissible to be discoverable as long as it is “reasonably calculated to lead to the discovery of admissible evidence.” That famous legal phrase used to settle many a discovery dispute is no more. The Rule now simply provides, after the language quoted two paragraphs above: “Information within this scope of discovery need not be admissible in evidence to be discoverable.”

Rule 26 as amended also permits a party to serve Rule 34 discovery requests more than 21 days after service of the summons and complaint and well in advance of the Rule 26(f) conference, but the time for responding does not begin until the Rule 26(f) conference. The thinking is that serving Rule 34 requests early could ensure productive Rule 26(f) conferences. No other discovery requests may be served before the Rule 26(f) conference.

If the changes to Rule 26 favor parties opposing greater discovery, changes to Rule 34 should make it harder for them to hide behind a smoke screen of objections. New Rule 34 provides that objections must be stated with “specificity” and “the production must then be completed no later than the time for inspection specified in the request or another reasonable time specified in the response.” In an effort to eliminate the last great refuge of scoundrels, new Rule 34(b)(2)(C) provides that “[a]n objection must state whether any responsive materials are being withheld on the basis of that objection.” These changes should cut down on discovery deficiency letters.

Rule 16 includes several common sense changes, including elimination of the provision for consulting at a scheduling conference by “telephone, mail, or other means.” Courts and parties are now expressly required to confer in person, by phone, or other means of direct simultaneous communication.

New Rule 37 authorizes and specifies measures a court may employ if information that should have been preserved is lost, and specifies the findings necessary to justify these measures. This sounds more severe than it is in reality. It requires a finding of “prejudice to another party from loss of the information,” as a condition to any sanctions for failing to preserve electronically stored information, and then no “greater than necessary to cure the prejudice.” It reserves the more drastic sanctions of adverse inferences, jury instructions, and dismissals and defaults “only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation.” These standards are new to Rule 37, but well known to practitioners as the legal standard in effect through the case law for years.

Other changes are made to Rules 1, 4, 30, 31, 37, 55, and 84. Anyone who wants a good overview of all the changes should read the memorandum submitted on September 26, 2014, by Judge John D. Bates of the Judicial Conference of the United States to the Supreme Court. It includes the relevant commentary from the Committee on Rules of Practice and Procedure of the Judicial Conference.  A copy of Judge Bates’ memo can be found here.

For those of you who just can’t get enough of the new amendments to the Federal Rules, the American Bar Association Section of Litigation and the Duke Law Center for Judicial Studies are jointly presenting a 13-city series of three-hour presentations, which you can read about here. The next session is December 3 in St. Louis.

Or you can call me and I will be happy to discuss your questions. Better yet, stop by for a coffee and help me celebrate the start of my third year at Steve Harvey Law.

 

Steve Harvey

SHL-HARVEY PORTRAIT3IMG_3499

December 2, 2015

 

A Student Loan Bill of Rights

In an effort to address the ongoing student loan crisis, Connecticut has become the first state to enact a student loan bill of rights. This law will serve as way to more closely monitor the lenders in this industry, as well as provide student borrowers with necessary education and resources.

The law creates a Student Loan Ombudsman who will resolve complaints, analyze data, and provide more education to borrowers. Education courses will be created for borrowers so they are better able to understand their rights and responsibilities associated with the debt.

It is abundantly clear that we need more education on student loans, but we also need to shut down unscrupulous lenders and education institutions. This law will provide a centralized way to do just that.

Borrowers must be better informed about their rights and options so they can make sound financial decisions as they embark on the path to higher education. This law is a good example of what can be done at the state level to better understand and address the problem of runaway student loan debt.

Hopefully other states will follow Connecticut’s lead. The student loan crisis will not solve itself and it’s critical that the government start taking action to find workable solutions to a problem that has the potential to affect the lives of tens of millions of Americans.

 

RG-3Rachel Gallegos

Lead Consumer Advocate, Steve Harvey Law

 

 

Student Loans Plague Senior Citizens

Some senior citizens face an alarming amount of student loan debt. As a result, those already on a limited fixed income are facing even greater financial stress. A recent article in Money magazine detailed this trend in the student loan universe. Money reports that “over the past decade, people over the age of 60 had the fastest growing educational loan balances of any age group, according to the Federal Reserve Bank of New York.”

Facing student loan debt as you enter retirement is daunting, and yet this population accounts for approximately $58 billion of the total student loan debt in the United States. For these unhappy borrowers, a percentage of tax refunds, wages, and Social Security can all be garnished to collect on federal student loans. In a household with a fixed income, this can be devastating.

Philadelphia’s own Joanna Darcus of Community Legal Services works with low income clients facing student loan debt. She stated that her clients viewed education as “a pathway out of poverty and toward financial stability, but their reality is much different from that,” As Money reports.

While there are government initiatives to ease student loan debt by providing income based repayment plans and the option to discharge federal student loan debt in bankruptcy, it is unclear how this will affect older borrowers.

Retirement should be a time when a lifetime of work is rewarded. Instead, a growing number of people are faced with a debt that is crippling their ability to meet basic needs.

 

RG-3Rachel Gallegos

Lead Consumer Advocate, Steve Harvey Law

 

 

Photo credit: CREATISTA/Shutterstock.com

Student Loan Revolt: What Happens If I Don’t Pay?

A recent New York Times op-ed piece discussed one man’s decision to not pay back his student loans. It seems a growing number of graduates are choosing to follow suit. The reasons vary, but regardless of the justification there are still consequences, and ultimately graduates must make an informed choice.

There is certainly a moral debate to be had about whether a graduate is entitled to refuse to pay back what they promised to borrow, but what are the actual ramifications of simply refusing to pay, and more specifically, not seeking out any discharge options either?

Refusing to pay your student loans means facing lifelong financial ramifications in virtually every area of your life. Defaults on student loans are reported to the credit bureaus, and as a result, your credit score will be negatively affected. A negative credit score can affect your ability to start your own business, obtain a job, rent an apartment, or buy a house.

In addition, when you refuse to pay your loans, both federal and private lenders will attempt to collect the debt. You will face endless calls from collection agencies attempting to extract payments, and the cost of the collection can be added to your outstanding balance. Further, the Education Department can withhold money from your tax refund, social security, and other federal payments in an effort to collect on this debt.

Both federal and private lenders also have the option to garnish wages. The federal government does not need a judgment to garnish wages, but a private lender must initiate a lawsuit in order to proceed with garnishment.

While refusing to pay your student loans certainly is your choice, the consequences of that choice will be far reaching, making it incredibly difficult to lead a financially stable life.

 

RG-3Rachel Gallegos

Lead Consumer Advocate, Steve Harvey Law

 

Supreme Court Rules in Favor Of Muslim Woman Who Wore Head Scarf to Job Interview

Employers must continue to ensure that applicant’s religious practices are not a factor in hiring decisions. So said the Supreme Court this week. The Court ruled Monday in favor of a Muslim woman whom Abercrombie & Fitch refused to hire because she had worn a hijab—a traditional Muslim head scarf—when she interviewed for a salesperson position at a retail store in Tulsa.[1] Then-17-year-old Samantha Elauf did not mention the hijab or her religion in her interview, but the interviewer assumed she was Muslim and that she wore the hijab for religious reasons.  Evidence suggested the hijab influenced the decision not to hire her because it conflicted with Abercrombie’s “look policy,” which required sales persons to wear “classic East Coast collegiate style of clothing.”

The EEOC initially won summary judgment on Ms. Elauf’s behalf, but the Tenth Circuit Court of Appeals reversed that decision, reasoning that Ms. Elauf had failed to notify Abercrombie of her need for a religious accommodation.

Writing for the majority, Justice Scalia confirmed that an applicant need not make a specific request for religious accommodation to obtain relief under Title VII of the Civil Rights Act of 1964, which prohibits religious discrimination in hiring: “Title VII forbids adverse employment decisions made with a forbidden motive, whether this motive derives from actual knowledge, a well-founded suspicion, or merely a hunch.”

Justice Scalia called it a “really easy decision.”

The decision reconfirms that an employee’s religious practices may not be a factor in employment decisions—whether or not the employer has actual knowledge, or merely presumes or suspects, that those practices are based on religious beliefs.

The Court’s vote was 8-1, with Justice Clarence Thomas dissenting. The decision is in line with the Court’s recent broad view of religious rights, following last year’s Burwell v. Hobby Lobby[2] decision in which the Court found broad religious freedom rights for corporations, and Holt v. Hobbs,[3] in which the court found that a ban on beards infringed on the religious rights of prisoners earlier this year.

 

Therese K. Dennis

Counsel, Steve Harvey Law

 

 

[1] EEOC v. Abercrombie & Fitch Stores, Inc., Docket No. 14-86 (June 1, 2015)

[2] Docket No. 13-254 (June 30, 2014).

[3] Docket No. 13-6827 (January 20, 2015).

Survey Shows Mortgage Servicing Still a Problem

For those facing foreclosure, problems persist in dealing with servicers. A recent National Consumer Law Center survey of consumer advocates and housing counselors about their experiences with the mortgage servicing industry revealed ongoing problems. These problems have been present since the financial crisis began in 2008 and unfortunately continue on today.

Successors in interest (heirs, widows, and orphans) often have trouble getting even basic information about the loan as the lender does not view them as valid parties of interest. There are unnecessary hurdles in place that prevent these cases from reaching simple resolutions that would allow the successor to resume payments, keep the home, and ensure that the loan remains performing. Resolving this problem is a win-win situation for the lender and successor, and it can be accomplished with basic changes to the system and more education to all stakeholders about current regulations and requirements.

Repeated requests from servicers for documents from the homeowner is another consistent complaint. It can be an endless cycle for the homeowner and can prevent resolutions for homeowners with the capacity to pay. The definition of a “complete package” can vary depending on a borrower’s financial circumstances, and it can be difficult to get a clear answer from a servicer about which documents are needed. Servicers often ask for documents in a piecemeal fashion, or ask for the same document repeatedly with no explanation as to why.

Mortgage foreclosure suffers from issue fatigue, but it’s important that we continue to work on this problem in an effort to stabilize families and communities. A homeowner dealing with foreclosure should seek help from an experienced advocate (housing counselor or lawyer) to assist in navigating what still proves to be a complicated process.

 

RG-3Rachel Gallegos

Lead Consumer Advocate, Steve Harvey Law

 

Consumer Financial Protection Bureau Takes on Student Loan Servicing

We are in the midst of graduations across the nation and it can be a bleak picture for graduates looking for employment. Finding a job in a specific field can be difficult, but students must also take into account looming student loan payments. Large student loan payments prevent students from making other financial investments and this has long-term repercussions for the student borrower as well as the entire economy.

The Consumer Financial Protection Bureau recently announced that it is soliciting comments from the public about borrower experiences with student loan servicing. CFPB Director Richard Cordray stated that “[t]he inquiry seeks to determine if the student loan servicing industry is doing things that make repayment more complicated and more costly for consumers.

The CFPB has taken an active role in monitoring and regulating various consumer industries such as payday loans, mortgage servicing, and credit cards. It is not surprising to learn that in light of the staggering statistics about student loan debt, the CFPB is now taking action.

There is a lot of room for improvement in terms of regulating lenders and servicers. It is good to know that the voices of student borrowers are finally being heard. Hopefully those facing crushing debt loads will soon find some relief.

 

Rachel Gallegos

Rachel Gallegos

Lead Consumer Advocate, Steve Harvey Law

The Corinthian Colleges Closure and Debt Cancellation Debacle

Any discussion about student loan rip-offs should begin with Corinthian Colleges. The recent closure of this for-profit company left thousands of students stranded with no way to complete the education they had been promised and for which they took on crushing debt loads.

The Department of Education has announced that students who were enrolled or recently withdrew from school will be forgiven their federal loans but only if they forego credits they already earned. Students who have already graduated get no such relief. According to US News & World Report, some of the former students are also now challenging repayment of their student loans based on claims of fraud.

The closing of Corinthian Colleges brings up the issue of debt cancellation in the student loan context. If you have federal student loans, in certain circumstances such as school closings your debt can be canceled. You must be enrolled at the time of closing or have withdrawn from the school within 120 days of the closing.

Prior to the closure of Corinthian Colleges, the Consumer Financial Protection Bureau announced that $480 million in loan forgiveness will be made available for students who took out Corinthian Colleges high-cost private student loans. This is highly unusual as the protections and safeguards offered for federal loans normally do not exist for private loans. Loan forgiveness and debt cancellation are rare in the private loan context. Students are ordinarily left to negotiate directly with the private lender in hopes that the payments can at least be an amount that is affordable each month.

Corinthian Colleges is the tip of the of the student loan crisis iceberg. The student loan program in this country is not serving us well and cries out for reform.

 

RG-3Rachel Gallegos

Lead Consumer Advocate, Steve Harvey Law

 

The Foreclosure Crisis: It’s Not Over Yet, and Not Even Close in NJ

The Philadelphia Inquirer reports that 1 in every 234 homes is in some stage of foreclosure in New Jersey. This is a 17% increase over 2014 and clearly shows that the crisis in not over yet. While New Jersey is unique in its rate of foreclosure, the issue still plagues many homeowners nationwide.

In New Jersey, the high rate of foreclosures is also due to “robo-signing” issues in recent years. Those legal issues created a back-log of foreclosures and the flood gates have since opened. Homeowners in New Jersey and nationwide are also still fighting against decreased property values, unemployment, illness, and mounting debt.

Foreclosures destroy communities and do not benefit the homeowner or the lender. A resolution in which the homeowner stays in the home and continues to make payments is in everyone’s best interest. There are many options available for homeowners to resolve a foreclosure but the process can be overwhelming. Families facing foreclosure should immediately contact an attorney or housing counselor to seek assistance.

 

RG-3Rachel Gallegos

Lead Consumer Advocate, Steve Harvey Law

 

Education at a Cost

Student loan debt plagues the nation. Over 40 million people in the United States have student loans and approximately 7 million borrowers are in default. Higher education leads to higher paying and more satisfying work for life, but a crushing debt load can consume the pay and kill the satisfaction.

In this article, the New York Times highlights the problems with student loan counseling offered to students. Research has found the information currently provided to students to be confusing and irrelevant. It also assumes a knowledge base that simply isn’t there.

Students need to be educated on the ins and outs of student loans before being asked to take on tens of thousands of dollars in debt. Much time is spent telling students that higher education is crucial to their success, but too often the crushing debt incurred to achieve that education drastically alters the future for students after graduation.

The system needs an overhaul. There are basic changes that can be made in this arena such as more financial counseling while student are in school, face-to-face contact with experts, and different ways of communicating needed information such as videos. Schools and lenders must do a better job educating students about the debt they are taking on and what it means for their future. Because their future is our future.

 

– Rachel Gallegos