JPMorgan Sues Fla. Law Firm For Risking Clients’ Privacy
Law360, San Francisco (December 22, 2016, 4:57 PM EST) — JPMorgan Chase Bank NA hit law firm Korte & Wortman PA with a lawsuit in Florida federal court Wednesday, accusing the firm of making invalid requests for customers’ personal information and putting that information at risk in violation of the Gramm Leach Bliley Act.
The suit accuses the West Palm Beach firm of launching an “unethical” and “aggressive” campaign to file hundreds of “frivolous” lawsuits against mortgage loan providers like JPMorgan. The suits accuse the banks of violating the Real Estate Settlement Procedures Act and the Truth in Lending Act by not responding to clients’ personal information requests, when in fact those requests were made by the law firm and were not authorized by the clients in violation of consumer protection laws, the suit alleged.
“This case presents the epitome of attorney abuse of a consumer protection statute,” the complaint said.
JPMorgan is asking the court to issue a declaration that it doesn’t have to respond to the firm’s requests for customer information under the RESPA and the TILA and seeks an injunction that would bar the firm from making similar requests in the future.
The law firm, which describes itself as a “foreclosure-defense” firm, has repeatedly submitted forms, purportedly signed by JPMorgan mortgage loan borrowers, that ask JPMorgan to release borrowers’ information and records to the firm, according to the complaint. However, JPMorgan alleges the forms aren’t signed by the individual customers, but rather they’re all signed by the same member of the firm, making them invalid.
JPMorgan asserts that if the bank were to respond to the unauthorized requests, the bank could be violating the Gramm Leach Bliley Act, which requires banks to safeguard customer personal information, the suit said.
JPMorgan is concerned that if it doesn’t respond to the requests by the statutory deadlines, Korte & Wortman will file lawsuits alleging it violated RESPA and TILA, as the firm has done “hundreds of times” throughout Florida, JPMorgan said, adding that it has spent “significant amounts” defending itself against such lawsuits.
Additionally, RESPA doesn’t provide an award of prevailing party attorneys’ fees if mortgage loan providers like JPMorgan successfully defend those suits, the suit said. As a result, the firm is forcing the bank into a “catch-22”: either ignore the requests and risk getting sued, or respond to them and potentially violate Gramm Leach, the complaint said.
“As such, [the law firm] uses this statute as both a sword and a shield to insulate their ‘client’ and themselves from fee exposure,” the suit said.
At least one federal judge in Florida has sanctioned Korte & Wortman for filing such a lawsuit, saying that the firm has created a cottage industry of filing frivolous RESPA-based lawsuits, while failing to inform their clients of the nature of the suits or of the requests for personal information that are being submitted, according to the complaint.
“These recent findings only reaffirm JPMorgan’s belief that [the firm] engages in unethical practices,” the suit said.
A representative for JPMorgan declined to comment Thursday.
Representatives for Korte & Wortman did not respond Thursday to requests for comment.
JPMorgan is represented by Brendan I. Herbert, Derek E. León, Alec H. Schultz, Brendan I. Herbert and Jeremy L. Kahn of Leon Cosgrove LLC.
Counsel information for the law firm was not available Thursday.
The case is JPMorgan Chase Bank NA v. Korte & Wortman PA, case number 9:16-cv-82029, in the U.S. District Court for the Southern District of Florida.