Legal Aid Funding Is Not “Wasted Money”

starkeyby Carol A. Starkey

President’s Page

“No more wasted money,” is how President Trump has characterized his proposal to cut $54 billion from the federal budget. To get there, the administration has placed the Legal Service Corporation (LSC) and its approximate $366 million in federal appropriations on the chopping block. The President’s budget – released in March – eliminates this program entirely, a proposal that attempts to carve out the backbone of civil legal aid to the poor in this country.  The consequences of such a proposal would, at best, render those most vulnerable amongst us unable to properly access our courts for daily needs such as housing, health care or safety, and at worst, keep them from exercising their basic rights to survive in this country.

Last month, I once again had the privilege as your Bar Leader to travel to Washington, DC to meet with members of the Massachusetts delegation and advocate for the reinstatement of funds as part of a larger lobbying effort with the American Bar Association. Shortly after those visits, a deal was struck in Congress to fund LSC through October 1st. This is good news in the short term, but when it comes to access to justice, short term solutions are not nearly enough.

Quite simply, LSC provides necessary legal aid to low income individuals and families in Massachusetts and throughout this country at large.  The LSC is an independent nonprofit established by Congress in 1974 to provide financial support for civil legal aid to low-income Americans. LSC is a grant-making organization, distributing more than 93% of its federal appropriation to eligible nonprofits delivering civil legal aid. It is the largest single funder of civil legal aid in the country, including $5 million annually to Massachusetts-based legal services organizations.

The need for this essential service is undeniable. In the United States, 80 percent of qualified applicants – those who meet the income eligibility requirements and face serious legal problems – are turned away simply because there isn’t adequate funding to take them on as clients. This figure is unacceptably high. These are people, amongst others, who are our neighbors being wrongfully evicted from homes, women and children in our communities already made vulnerable by poverty trying to safely escape abusive partners, parents trying to advocate for a beloved child with special needs, and veterans, many of whom come home struggling with serious mental and physical health issues, trying to secure the benefits that are rightfully theirs, so as not to end up homeless.

This urgent need alone is enough to justify keeping this line item, which represents about one hundredth of one percent of the entire federal budget.  But what if Congress and the President also knew that preserving LSC would actually save taxpayer money and support the economy? That’s just what three independent economists conducting separate evaluations have found.

In 2014, the Boston Bar Association (BBA) released Investing in Justice, a report which showed that taking a preventive approach to legal issues would help families, save government funds and ensure fairness in our justice system. Simply put, investing in civil legal aid programs pays dividends by avoiding back-end costs.

The BBA report – representing the work and opinions of legislators, judges, business leaders, academics, and legal services representatives – is the result of 18 months of intensive research into the problems and unseen costs that arise when people do not have access to adequate legal assistance.

For example, in Massachusetts, when studying the impact on state expenditures of representation by a civil legal aid attorney in eviction and foreclosure cases, economists at The Analysis Group concluded that for every dollar spent on civil legal aid in eviction and foreclosure cases, the state stands to save $2.69 on the costs of other state services, such as emergency shelter, health care, foster care, and law enforcement.

In addition, the firm Alvarez & Marsal analyzed the costs of domestic violence and what savings could occur if additional civil legal aid representation was available in such cases.  They determined that every $1 spent on legal aid yields $2 in medical and mental health care savings, including $1 to the state and $1 to the federal government.

The Boston Bar Association has long argued that legal assistance is an essential service for those who are struggling to deal with the issues that go to the heart of their families and livelihoods, like housing and personal safety. But we can also make the case that it is the fiscally prudent thing to do.

Others can, too. We need our leaders – both in Washington and here at home – to understand that advocating for every American to have access to justice is not only a just cause, but a sound investment that is worth our resources.

As lawyers, you have a valuable perspective to bring to this issue, one that lawmakers will find substantive and relevant.  To that end, I’m pleased to share the Boston Bar Association’s podcast: How to Talk to Your Legislators About Civil Legal Aid, featuring an interview with Equal Justice Coalition Chair Louis Tompros of WilmerHale.

I hope you enjoy it, and then reach out to both your state representative and your senator in support of increased funding for legal aid.  Your voice is needed to tell legislators and others how much we care about legal aid funding, backed up by our findings that investing in civil legal aid actually saves money while improving people’s lives.

Carol A. Starkey is the president of the Boston Bar Association. She is a partner at Conn, Kavanaugh, Rosenthal, Peisch & Ford. 


Enhancing Families Through Literature: An Innovative Way To Decrease Conflict

fosterby Hon. Richard A. Simons

Voice of the Judiciary

As trial court judges, we sit in a unique position to place the litigants who appear before us on a path toward changing behaviors that have previously led to poor decision making.  For example, in the context of the Probate and Family Court, judges routinely issue orders to (a) coerce a recalcitrant parent to honor his/her financial obligations toward his/her children; (b) create incentives for a parent suffering from substance abuse disorder to obtain treatment by predicating access to children upon engaging in treatment; and (c) address issues of violence in the home by ordering enrollment in intimate partner violence prevention programs.  At times, these interventions have been successful in changing the trajectory of an entire family’s life.

A unique feature in the Probate and Family Court is that many of our cases go on for years.  While we may be successful in resolving the issues in a divorce or unmarried custody case, we often times see the parties again and again on subsequent complaints for modification or complaints for civil contempt.  Not only do these frequent case filings crowd our busy dockets and drain valuable court resources, but they also foment inter-parental conflict which adversely impacts their children’s emotional adjustment and development.  In my time on the bench, I have even begun to hear the disputes of grown children born of parents over whose custody cases I have presided.  The cycle of poor decision-making and ineffective conflict resolution continues unabated.

In the fall of 2013, my Chief Probation Officer, Amy Koenig, and I attended a Judicial Institute training program for courts considering starting a Changing Lives Through Literature (“CLTL”) program in their court.  We arrived curious yet somewhat skeptical.  A few hours later however, we left the program energized and inspired.  We heard from Judges Robert Kane, Rosalind Miller and Kathe Tuttman, who passionately shared their observations of how the study of literature was used as a tool by probationers to change their behavior.  College professors and probation officers joined the chorus of describing the success of this alternate sentencing program.

On the car ride back to the Berkshires, Chief Koenig and I began to brainstorm how we could make this program work in the Probate and Family Court.  We faced unique challenges in our court that those in other trial court departments did not have to confront.  We do not have litigants “on probation” in the Probate and Family Court.  How would we mandate attendance?  Who should attend the program?  Mothers? Fathers?  Should the parties attend together?  If they were to attend the program together, what child care coverage should be made available for their children?  What time of day could we have such a program when time is at such a premium for young working families?

These challenges provided opportunities to explore and create a meaningful program for young families who find themselves in the midst of a child custody dispute in the Probate and Family Court.  Holding onto the essential ingredients of the successful program of CLTL, we developed a twelve week intervention program called, Enhancing Families Through Literature (“EFTL”). The court issues an Order requiring the parties to attend the program along with their children.  Monetary sanctions (or community service orders for indigent litigants) are imposed for any non-compliance with the court’s Order.  Chief Koenig and I participate with the families in each of the sessions.

The program takes place at our local library once per week for twelve weeks, from 5:00 p.m. to 7:00 p.m.  The evening begins with parents enjoying a catered meal together with their children.  At 5:30, the parents retire to one area of the library, and the children go to a separate area.  For the first eight weeks, the parents participate in a traditional “CLTL” formatted program.  Our facilitator, Professor Matthew Müller, from Berkshire Community College, leads a discussion on assigned readings, including works by Raymond Carver, William Faulkner and Franz Kafka.  While the parents are studying literature, the children are participating in a program led by four certified Head Start Teachers called “Every Child Ready To Read Program” developed by the Association for Library Service to Children and the Public Library Association.

The final four weeks of the program consist of an interactive program among parents and children led by the early childhood educators.  They teach about the importance of the word in parenting.  Reading to children is modeled for parents.  Parents and children work on projects together.  At the conclusion of each of the twelve sessions, each child is given a book, so that by the end of the program the child’s library has increased by 12 books.

The program culminates in a graduation ceremony at the courthouse.  In addition to gifts of books awarded to all participants and children, Berkshire Community College issues a transcript to each parent documenting an earned college credit.  Participants speak and share what the program meant to them and their family.  One of the speakers at last years’ graduation proudly shared the following:

My time in the literature segment with Professor Müller gave me a chance to experience literature that I’ve never read before.  His approach, great personality brought the words of those stories to life.  Admittedly I couldn’t understand why our selected readings were so dark and almost never had the traditional “happy ending” or resolution.  Then it dawned on me recently; Perspective.  Perspective is everything, not only in literature but it applies to real life in many ways by giving us a dose of allegorical reality.  Never judge a book by its cover, and never judge a person too quickly or you might miss out on someone that could change your life forever.          

The study of literature within this magic framework of classes with a judge, probation officer and college professor challenges participants to see the world through different eyes. During class, participants hear differing views and interpretations of the same stories from classmates.  Imagining how each character in a story feels often leads to eye-opening discussions.  The discussions lead to listening.  Listening leads to tolerance.  Tolerance leads to acceptance.  Acceptance leads to communication.  Communication leads to better conflict resolution.

People share their thoughts, without judgment, and in doing so provide themselves and their co-parent with important insights and understanding.  One year, we were a discussing the short story, “Bodies” by Phil Klay, an American writer and Iraq veteran.  One of the participants was a man who was deployed several times to the Middle East and rarely displayed any emotions other than anger.  He began to open up and shared how his feelings toward deployments changed after the birth of his son.   What I did not realize at the time was that this statement broke the ice between him and his child’s mother.  She confided in the instructor that she never knew he prioritized his son in that fashion.  From that point, on they began to talk and compare notes about their son.

The benefits of this program continue to unfold.  Parents begin to see themselves as a team raising their child rather than adversaries in a courtroom.  In addition, the wonder of reading to children is spread to families that might not have experienced this joy before.  Parents experience how snuggling and reading with a child opens up communication between parent and child as well.  Most important, the overwhelming majority of these families resolve their pending cases by agreement as they begin the journey of resolving future conflicts through communication and negotiation.

As with other worthwhile programs offered in the Trial Court, Enhancing Families Through Literature empowers litigants to make lasting changes in their behavior, leading to better decisions for them and for their children.

Judge Simons is the First Justice of the Berkshire Division of the Probate and Family Court. In 2016, he and Chief Koenig were recognized by AFCC for innovation in a court-connected program. 


“We Bear a Responsibility to be Vigilant”

starkey_carolby Carol A. Starkey

President’s Page

I have always seen the practice of law as one of the most significant means of participating in our unique American democracy. As lawyers, we are accustomed, by training and practice, to embracing an adversarial role while still advancing a principled position.

Still, many of us in the bar could not help but be deeply troubled by the implications of some of the rhetoric in this year’s election campaign upon our long-held principles of American jurisprudence, including respect for the rule of law, due process, equal rights, and access to justice. Like so many of you, I have been angered and saddened to hear comments, and learn of events, that disrespect individuals who identify as minorities, or come from diverse backgrounds, beliefs and cultures. Such conduct erodes our Constitutional democracy, resulting in divisiveness, fear, and anxiety, all of which are felt acutely not only by adults, but perhaps most disturbingly, by our children as well.

In this context, I wanted to reach out to my colleagues at the bar to let you know that I believe the work of the Boston Bar Association, and its mission, have rarely been more relevant.

The BBA has a strong record of rising above division, finding common ground, and inspiring diverse groups to overcome disagreement to advance access to justice and excellence in the practice of law. We are – and will continue to be – a solutions-oriented convener that welcomes all stakeholders to exchange ideas and build relationships. But we also bear a responsibility, to one another and in the service of our communities, to be ever watchful and vigilant in ensuring that individual and due process rights remain valued and protected as bedrock principles in the implementation of our laws.

I write to our members now, to assure you that the BBA stands ready, willing and able to answer any necessary call to action resulting from this climate of uncertainty and ever changing events.

Over the past week, we have heard many expressions of concern, – both from our members and from local organizations with whom we partner.  But we have also experienced a true sense of inspiration by the commendable desire of those same members and organizations to become actively engaged. We recognize that as lawyers, we are at our best when we are dealing with well-defined issues and actual cases and controversies. I want to state — unequivocally — that we remain committed to our work on the following fronts:

Immigration:

  • The BBA is committed to protection of due process rights for all, as enumerated in the United States Constitution, with its Bill of Rights, and our Massachusetts Constitution, with its Declaration of Rights. Yet it is not enough for us to remain watchful. We will be empowering others to do the same through “Know Your Rights” programs in our communities and schools.
  • We must remain cognizant of deportation as a potential collateral consequence of involvement with the justice system. Just this week, the SJC heard arguments on a case regarding the so-called Annie Dookhan defendants, in which the BBA filed an amicus brief asking the Court to vacate all remaining convictions without prejudice. The risk that any of these individuals might face deportation proceedings on the basis of a conviction supported by tainted drug-lab evidence adds greatly to our argument for a “global remedy.”

Harassment, discrimination, and hate crimes:

  • I share the concern of many of our members over the recent spike in acts of violence and intimidation against members of minority populations. Such actions must never be tolerated. We will continue to work with our partners at the six local affinity bar associations – and seek ways to engage with other, similar organizations – to defend individuals and groups that are under threat, and to educate people about their rights.

Access to justice:

  • Our advocacy on behalf of access to justice for all residents will not waver. Join me on January 26th at Walk to the Hill as we once again make the case to the Governor and the Legislature, for a substantial increase in funding for civil legal aid, building on the BBA’s Investing in Justice task-force report. Providing all with access to justice is more important than ever.
  • In addition, we are working with Attorney General Maura Healey and other legal services organizations to identify emerging legal needs in the community, particularly as they pertain to the increase in Hate Crimes and Immigration issues.

The BBA will continue to do everything we can to support the core values of meaningful access to justice and of diversity and inclusion that are at the heart of who we are as an organization of lawyers. Now is the time for all of us at the BBA to show Boston, the country, and the world that we can continue to advance respectful, innovative, and common-ground solutions to big challenges. But that must start at home with listening to one another and getting involved. I am proud and grateful to work with all of you, and I have no doubt that you will continue the great tradition in this Commonwealth during times of change or uncertainty, by rolling up your sleeves and asking the simple question, “How can I help?”

Carol A. Starkey is the president of the Boston Bar Association. She is a partner at Conn, Kavanaugh, Rosenthal, Peisch & Ford. 


Foreword from the Editors

The Supreme Judicial Court issued a number of influential decisions in its most recent term. The Boston Bar Journal Board of Editors thought it would be fitting to release a special edition of the Journal dedicated to summarizing several of these cases. In addition to the articles that appear in this special edition, we encourage readers to look at our past articles featuring decisions from the 2015-2016 term: Kace vs. Liang and Maling v. Finnegan, Henderson, Farabow, Garrett & Dunner, LLP.

– The Boston Bar Journal Board of Editors


“Racing In the Right Direction:” Specialty Courts in Massachusetts

Burroughs_Allisonby BBA President Lisa Arrowood

President’s Page

It was a graduation, but no one was wearing a cap or gown. Judge Serge Georges’ robes were the only ceremonial garb in the courtroom at the Dorchester Division of Boston Municipal Court on a recent Thursday, where a young woman was about to graduate from the Drug Court Program.

Judge Georges spoke of the “butterfly effect,” a scientific theory which says that even small occurrences can result in big changes. Each participant in the program, he said, is a butterfly. They create change in each other’s lives, and in the lives of their loved ones. The graduate echoed Georges’ sentiment; she spoke of finding the will to stay clean through acts of support, big and small, by the program’s staff and fellow participants.

The session was the first of four visits I would make to the Commonwealth’s specialty courts: Drug Court, Veterans Court, Homeless Court and Mental Health Court.

As a non-criminal lawyer, I had never had the occasion to see or take part in any of the specialty courts. I knew of them, of course; I knew they had a reputation for getting to the root cause of criminal behavior, and for taking a sensible approach towards treating that cause rather than sending the offenders off to prison. And while visiting these courts was something that I was looking forward to doing during my term as BBA President, I wasn’t prepared for how moved, impressed and inspired I would be by the time I had visited the fourth.

The very fact that entire teams of professionals – judges, probation officers, substance abuse and mental health clinicians, public defenders, and assistant district attorneys – are working collaboratively for the betterment of our most vulnerable citizens was a powerful thing to witness. So powerful, in fact, that when my visits had concluded, I knew that I had to find a way to recognize their invaluable contributions to our system of justice.

In that regard, I’m very pleased to announce that I will be awarding the four Specialty Courts with the BBA’s President’s Award at our Law Day Dinner on May 12th.  I can’t think of a more fitting team of recipients to honor on a day that’s set aside to reflect on the role of law and its importance for society.

I think part of what makes these courts so effective is how each judge – in his or her own unique way – establishes an authentic connection with program participants. Judge Georges, for example, grew up in the Dorchester community where he currently serves. And he makes each graduation a community event, inviting other Drug Court participants to attend, and even recruiting his father to supply home cooked dishes for the post-ceremony celebration.

When I visited a Veterans Court graduation, I saw the same caring and supportive process played out in a different way. Judge Eleanor Sinnott – a veteran herself – spoke of courage, perseverance, and camaraderie as the things that carried one veteran successfully through the program at the Edward W. Brooke Courthouse in Boston.

“You’re a platoon,” she told the veterans in attendance. “And I’m your commanding officer.” It was this environment of support that helped the graduate – despite a temporary relapse – secure a job and complete the terms of his agreement with the court.

At Homeless Court – which is designed to resolve misdemeanor offenses, non-violent felonies, and outstanding warrants for homeless individuals with support and dignity – seven cases were considered. Judge Kathleen Coffey asked all defendants to share their stories of how they became homeless and what aspect of life on the streets was most challenging.  Her genuine warmth and interest in each person’s circumstances empowered the defendants to describe the difficult, and varied, life circumstances that led to hitting rock-bottom. They also shared their motivations for self-improvement, which included the knowledge that they could do better, the need to escape the isolation and constant turmoil of homelessness, and in several instances, a strong desire to make their young children proud.

Judge Coffey encouraged positive progress, telling one defendant they were “racing in the right direction,” and District Attorney Christina Miller did the same, telling another defendant that she was “amazed and encouraged” by their progress.

For many of these people, it was the first time something good was happening to them in a courtroom. I looked around and thought that this is what they need – support, not incarceration.

In Judge Coffey’s words, Homeless Court “is based upon the premise that there is room for treatment, compassion and for recovery within the court system.  It recognizes that homelessness presents a complicated challenge to the courts demanding alternative approaches in the administration of justice. The court seeks to make the justice system more accessible, accountable and responsive to the needs and challenges faced by this most vulnerable population.”

Judge Coffey also presides over Mental Health Court – or Recovery with Justice (RwJ) – which began in Massachusetts nearly a decade ago out of a recognition that an estimated 70 percent of men and women in the criminal justice system suffer from mental illness.

Working with a mental health clinician from the Boston Medical Center, the probation officer assigned to the Mental Health session identifies the particular mental health and social needs of each participant, and creates a service plan which includes referrals to mental health treatment, substance abuse treatment when appropriate, as well as housing, educational and employment opportunities. National studies place recidivism rates for mental health courts in the high teens (17-20%), less than half of the rate for traditional courts.

Like the other specialty courts, Mental Health sessions are largely focused on support and guidance.  When one RwJ participant told of a recent relapse, Judge Coffey recognized the slip-up but told the individual she was proud of the progress made since then, explaining that the Court was interested in providing options for success without overburdening the participants.  Her words hit home, prompting the individual to announce to the courtroom, “See all the people here who care about me?  It’s great.”

Having experienced these courts at work firsthand, I am especially gratified to know that Specialty Courts are accessible nearly statewide and that the Trial Court is committed to their expansion and continued improvement.  To help make that a reality, the BBA is advocating in the Legislature for more funding. Despite the Judiciary being a co-equal branch of government, funding for the Trial Court has grown only 7.9% from FY08 to FY16, while the overall state budget has increased 43.3% in that same time period.  I urge lawmakers to decrease this gap.

I am grateful to Judges Kathleen Coffey, Serge Georges and Eleanor Sinnott for welcoming me to their courtrooms. After sitting in on the sessions, I am inspired not only by the profound impact the programs had on the lives of the graduates, but on its potential to meaningfully tackle complex issues underlying criminal behavior.

Having witnessed firsthand the dedication, excellence and impact that these amazing teams are having across Massachusetts; I am thrilled that our Law Day Dinner program is honoring them. I hope you’ll join me in celebrating their work.

You can read about the history of specialty courts, as well as more compelling stories from Drug Court and Homeless Court in earlier issues of the Boston Bar Journal.

Lisa is a founding partner of Arrowood Peters LLP, whose practice concentrates on business litigation, employment disputes, medical malpractice, personal injury, and legal malpractice. At the BBA, Lisa has served as the President-Elect, Vice President, and Secretary of the Council, the Co-Chair of the BBA Torts Committee, and a member of the Executive Committee, as well as various other committees. She is a Fellow of the American College of Trial Lawyers (ACTL), a Fellow of the International Academy of Trial Lawyers and immediate past Chair of the ACTL Massachusetts State Committee as well as a member of the Boston Bar Foundation’s Society of Fellows. 


When Is Hacking A Crime? Potential Revisions to the CFAA

Nutter Web Page Mockup.ppt Nutter Web Page Mockup.ppt Nutter Web Page Mockup.pptby Allison D. Burroughs, Benjamin L. Mack, and Heather B. Repicky

Viewpoint

In the wake of the much-publicized federal criminal prosecution and suicide of Aaron Swartz, the Computer Fraud and Abuse Act (“CFAA”) (codified at 18 USC §1030) has drawn deserved criticism from legal commentators and lawmakers.  Indeed, the CFAA is an outdated, patchwork statute, in need of revision.

Swartz, a computer programmer, entrepreneur, and activist, was accused of accessing restricted portions of MIT’s computer network in order to download millions of journal articles from a digital library.  He faced as much as 35 years in prison and a $1 million fine under the CFAA and related statutes.

Prominent critics, like Congresswoman Zoe Lofgren (D-CA), contend that the CFAA imposes substantial criminal liability and punishment for relatively innocuous conduct.  In 2011, in the wake of the Swartz case, Congresswoman Lofgren introduced “Aaron’s Law” to prevent arguably disproportionate penalties for certain CFAA violations.  However, the proposed statute would also seemingly insulate “authorized users” of computers from prosecution, regardless of the nature of their conduct or the harm it causes.  Congress should not seek to fix the CFAA by opening unnecessary gaps in the statute.  Instead, a more careful revision would ensure that violations of, for example, terms of service agreements would not trigger criminal liability for users, while also giving law enforcement means to punish malicious, damaging conduct by even “authorized” computer users.

The Computer Fraud and Abuse Act

The CFAA criminalizes many activities done after “knowingly access[ing] a computer without authorization or exceeding authorized access.”  Generally speaking, the seven provisions of the CFAA punish: (1) obtaining national security information; (2) obtaining information of a government agency or of a confidential nature (e.g., financial information); (3) trespassing in a government computer; (4) accessing a computer to commit a fraud; (5) damaging a computer (e.g., by worm, virus, or denial of service attack); (6) trafficking in computer passwords; and (7) threatening to damage a computer.

The CFAA punishes computer access “without authorization” or “exceeding authorized access.”  Penalties under the CFAA range from a misdemeanor (imprisonment for not more than one year) to 20 years incarceration, with the majority of offenses carrying a penalty of five years incarceration for a first offense and ten years for a second.  There is a jurisdictional requirement of $5,000 worth of damage which is, in effect, a technicality since that amount can be satisfied by investigative and administrative costs related to understanding and assessing an intrusion.

Aaron Swartz

Late in 2010, Swartz entered a restricted network wiring closet in the basement of an MIT building.  He then rigged a laptop and external hard drive to retrieve 4.8 million articles from JSTOR, a not-for-profit digital library that offered paid subscribers access to 2,000 academic journals.  Swartz was apprehended and arrested on January 6, 2011, as he sought to retrieve the laptop and hard drive, while obscuring his identity with a bicycle helmet.

The operative 13 count indictment was returned against Swartz on September 12, 2012 and included five counts charging violations of §1030(a)(4) (computer fraud, 5 year maximum penalty), five counts charging violations of §1030(a)(2) (unlawfully obtaining information from a protected computer, 5 year maximum penalty), one count charging a violation of §1030(a)(5) (recklessly damaging a protected computer, misdemeanor), and two wire fraud counts.

The original CFAA counts against Swartz were premised on Swartz accessing protected computers without authorization and in excess of authorized access.  In the superseding indictment, the United States alleged only that Swartz accessed protected computers without authorization.

Circuit Split

The Courts have long debated the meaning of both “without authorization” and “exceed[ing] authorized access” under the CFAA.  There have been inter and even intra circuit splits on this issue for some time.  The Fifth, Seventh and Eleventh Circuits all have held that the CFAA broadly covers violations of corporate computer use restrictions.  See U.S. v. Rodriguez, 628 F.3d 1258 (11th Cir. 2010); U.S. v. John, 597 F.3d 263 (5th Cir. 2010); and Int’l Airport Ctrs. LLC v. Citrin, 440 F.3d 418 (7th Cir. 2006).

In contrast, more recently the Ninth and Fourth Circuits have narrowly interpreted “exceeds authorized access” as not to include mere violations of corporate computer restrictions.  In the leading case, United States v. Nosal, 676 F.3d 854 (9th Cir. 2012), the Ninth Circuit en banc dismissed the indictment of David Nosal, a former employee of a search firm, who convinced his former colleagues to download and provide him with confidential firm information.  The CFAA counts against Nosal were grounded in a theory that he aided and abetted his former colleagues to “exceed [their] authorized access” with intent to defraud.  In other words, he was alleged to have violated the CFAA by persuading his former co-workers to use a company computer in a way prohibited by company policy.  The court expressed great concern over the government’s attempt to “transform the CFAA from an anti-hacking statute into an expansive misappropriation statute.”  It ultimately held that there was no liability under the CFAA because it covers only the “unauthorized procurement or alteration of information, not its misuse or misappropriation.”  Thus, violating company policy regarding computer use is not an actionable offense, according to the Ninth Circuit, under the CFAA.  See also WEC Carolina Energy Solutions LLC v. Miller, 687 F.3d 199, 202, 207 (4th Cir. 2012) (affirming the dismissal of a complaint for failure to state a claim under the CFAA).

It is clear that the meanings of “without authorization” and “exceeding authorized access” are subject to varying interpretations.  The trend among courts, however, appears to be narrowing the scope of the CFAA rather than broadening it.

Aaron’s Law

The latest version of Aaron’s Law dates to June 20, 2013 and has been stalled in the House Subcommittee on Crime, Terrorism, Homeland Security, and Investigations since July 2013.

Aaron’s Law would make changes to both the CFAA and the wire fraud statute (18 U.S.C. §1343).  In substance, the proposal would eliminate the “exceeds authorized access” language.  It would further define “access without authorization” to include only obtaining “information on a protected computer,” that the “accesser lacks authorization to obtain,” by “knowingly circumventing one or more technological or physical measures that are designed to exclude or prevent unauthorized individuals from obtaining or altering that information.”

With the prohibition on “exceed[ing] authorized access” abolished, Aaron’s Law would decriminalize violations of an agreement, policy, duty, or contractual obligation regarding Internet or computer use, such as an acceptable use policy or a terms of service agreement.  No longer would use of a computer service by a 16-year-old arguably create criminal liability where the operative service agreement provides that the user must be over 18.  This change would bring the statute in line with the cases like Nosal that have construed the CFAA narrowly.

By limiting the applicability of the CFAA to outside computer hacking, Aaron’s Law would re-write the CFAA such that even malicious, destructive conduct by a person with legitimate access to information on a computer would not seem to be prohibited.  By eliminating “exceeding authorized access” as a basis for criminal liability, Aaron’s Law might be going too far in its efforts to limit criminal liability only to hackers.

Although Nosal and some other cases focus on whether violations of terms of service agreements should be a basis for criminal liability, “exceeding authorized access” covers a much broader swath of conduct, including users with authorized access who steal or destroy valuable information.  Under Aaron’s Law there would arguably be no liability for even the most serious misconduct undertaken by legitimate users like subscribers or employees.

The CFAA should, instead, differentiate authorized users who access immaterial, non-sensitive information from authorized users who exceed their access rights in a malicious and destructive way.  A more comprehensive amendment to the CFAA would (i) define what types of information are worthy of greater protection and (2) ensure that benign activities such as violations of terms of service agreements would not risk criminal liability.  The CFAA must still allow prosecution both of true hackers, regardless of content accessed, and authorized users who access or compromise a defined subset of sensitive or valuable information and thereby cause meaningful harm.

Finally, even had they been in place in 2010, the amendments proposed by Aaron’s Law may not have shielded Swartz from prosecution.  After all, the superseding indictment charged Swartz with “unauthorized access” of the MIT network and he allegedly circumvented both technological and physical measures to obtain JSTOR information.  Such conduct is very likely prohibited by the current version of CFAA and would have been explicitly prohibited by Aaron’s Law.

 

Allison D. Burroughs, a partner in the Litigation Department at Nutter McClennen & Fish LLP, focuses her practice on white collar criminal defense and government investigations, computer fraud and abuse and complex civil litigation.

Benjamin L. Mack, a partner in the Litigation Department at Nutter McClennen & Fish LLP, focuses his practice on securities litigation, government investigations, commercial business disputes, bankruptcy litigation and intellectual property litigation.

Heather B. Repicky, a partner in the Litigation Department at Nutter McClennen & Fish LLP, focuses her practice on civil litigation, with an emphasis on IP and complex commercial matters.


Foreclosure in the Aftermath of Securitization

Moriarty_Thomasby Thomas O. Moriarty

Legal Analysis

The creation and subsequent collapse of mortgage-backed securities had far reaching impacts on both the housing and stock markets.  Not coincidentally, as reflected in numerous appellate decisions over the past three years, attempts to exercise the statutory right of sale with regard to such securitized loans have been complicated and led to fundamental changes in the mortgage foreclosure process in the Commonwealth.  Experience has revealed that the assignment of securitized loans has been poorly documented and carried out with little concern for who maintained the interest in the underlying mortgage note secured by the mortgage.  Prior to these cases, it had been accepted practice for foreclosing mortgagees to receive post-foreclosure assignments and to foreclose without a documented interest in the mortgage note.  The Supreme Judicial Court (“SJC”) has now held that, to foreclose under G.L. c. 244 and G.L. c. 183, a foreclosing mortgagee must – at the time of notice and foreclosure – hold both the mortgage and the underlying note or act on behalf of the note holder.  The foreclosure of many securitized mortgages failed to meet such requirements.  While recent decisions of the SJC and Appeals Court have placed some outside limits on this rule, many titles have been clouded and remain clouded by these developments.

In U.S. Bank National Association v. Ibanez, the SJC held that, under the plain language of G.L. c. 183, § 21 and G.L. c. 244, § 14, a purported assignee of a mortgage could exercise the power of sale contained in the mortgage only if it possessed the mortgage at both the time of the notice of sale and the subsequent foreclosure sale.  458 Mass. 637, 648 (2011).  U.S. Bank brought a quiet title action in Land Court pursuant to G.L. c. 240, § 6, seeking a declaration that it held title to certain land it bought back at its own foreclosure sale, alleging that it had become the holder of the subject mortgages by way of an assignment made after the foreclosure sale.  Id. at 638-639.[1]  The Land Court entered judgment against U.S. Bank finding that a post-notice and post-foreclosure assignment resulted in an invalid foreclosure.  Id. at 639.

The SJC affirmed and found that a mortgage that contains a power of sale permitting foreclosure refers to and incorporates the statutory requirements of G.L. c. 183, § 21 and G.L. c. 244, §§ 11-17C.  The SJC concluded that a foreclosing mortgage holder must strictly follow the requirements of these statutes or any resulting sale will be “wholly void.”

The SJC held that post-notice, post-foreclosure mortgage assignments failed the strict adherence standard on two counts.  First, pursuant to G.L. c. 183A, § 21 and G.L. c. 244, § 14, as relevant to the facts presented, the statutory power of sale can only be exercised by the mortgagee.  Second, G.L. c. 244, § 14 provides that a statutory sale is ineffectual unless notice has been provided to the mortgagor and also published.  Id. at 647.  The SJC reasoned that because only the “present holder of the mortgage is authorized to foreclose” and “because the mortgagor is entitled to know who is foreclosing,” a notice lacking such accurate information is defective, and a foreclosure sale relying on such deficient notice is void.  Id. at 648.  Importantly, the SJC held that strict adherence to the statute does not require that an assignment be in recordable form at the time of the notice of sale or the foreclosure sale.  Id. at 651.[2]

The SJC rejected plaintiffs’ request to apply the decision prospectively, noting that prospective application is warranted only where a “significant change in the common law” is made.  Ibanez, 458 Mass. at 654.  Ibanez observed that the law had not changed as a result of the decision, rather “[a]ll that has changed is the plaintiffs’ apparent failure to abide by those principles and requirements in the rush to sell mortgage-backed securities.”  Id. at 655.

In Bevilacqua v. Rodriguez, the SJC was presented with the question of whether a plaintiff has standing to maintain a try title action under G.L. c. 240, §§ 1-5 when he is in physical possession of property but his foreclosure deed is a nullity under the SJC’s holding in Ibanez.  460 Mass. 763 (2011).  A try title action is fundamentally different from other civil actions involving disputed title.  It allows a plaintiff – upon the satisfaction of jurisdictional prerequisites – to compel an adverse party either to abandon a claim to the plaintiff’s property or to bring an action to assert the claim in question.  Id. at 766.  Before an adverse party can be summoned and compelled to either disclaim or try its title, the plaintiff must establish two jurisdictional facts:  (1) that it is a person in possession, and (2) that it holds a record title to the land in question.  Id. at 766-767 (citing Blanchard v. Lowell, 177 Mass. 501, 504 (1901); Arnold v. Reed, 162 Mass. 438, 440-441 (1894)).  Unlike a quiet title action, which requires a plaintiff to prove a sufficient title to succeed, a plaintiff in a try title action may defeat an adverse claim by default or by showing its title is superior to that of the respondents.  Id. at 767 n.5.

Bevilacqua argued that the mortgage, which was purportedly foreclosed, constituted a cloud on the title he claimed to possess as the result of a void foreclosure sale.  Id. at 765-766.  The SJC held that Bevilacqua did not have standing to advance a try title action.  Id. at 780.  While the SJC accepted that Bevilacqua was “a person in possession,” it rejected his claim that a foreclosure deed from a defective foreclosure gave him the record title required by G.L. c. 240, § 1.  Id. at 770.

The decision in Eaton v. Federal National Mortgage Association, which as discussed further below was given prospective application, addressed a question that was not presented in Bevilacqua: whether a mortgage holder may foreclose the equity of redemption without also holding the mortgage note or acting on behalf of the note holder.  462 Mass. 569 (2012).  Eaton concluded that under G.L. c. 183, § 21 and G.L. c. 244, § 14, to be a “mortgagee authorized to foreclose pursuant to a power of sale, one must hold the mortgage and also hold the note or act on behalf of the note holder.”  Id. at 571.

Eaton filed a complaint in Superior Court to enjoin a summary process eviction.  Id. at 570-571.  The trial court granted the plaintiff a preliminary injunction.  Id. at 571.  After a single justice of the Appeals Court denied a petition by the defendant and reported same to a full panel, the SJC transferred the case on its own motion.

The SJC observed that a real estate mortgage has two distinct but related aspects: (1) it is a transfer of title, and (2) it serves as security for an underlying obligation (and is defeasible when the debt is paid).  Id. at 575.  While the Court recognized that a mortgage and an underlying note can be separated or “split,” it found that in such circumstances the mortgage is a mere technical interest.  Id. at 576.  Relying upon its analysis in Ibanez, Eaton found that under Massachusetts common law, when a mortgage is split from the underlying note, “the holder of the mortgage holds the mortgage in trust for the purchaser of the note,” which purchaser has an equitable right to an assignment of the mortgage.  Id. at 576-577 (quoting U.S. Bank Nat’l Ass’n v. Ibanez, 458 Mass. 637, 652 (2011)).   Eaton thus held that at common law, “a mortgagee possessing only the mortgage was without authority to foreclose . . . .”  Id. at 577-578.

The defendant’s statutory arguments fared no better.  Eaton held that a foreclosure sale conducted pursuant to a power of sale in a mortgage must comply with all applicable statutory provisions, including G.L. c. 183, § 21 and G.L. c. 244, § 14.  Id. at 571, 579-581.  G.L. c. 244, § 14 provides, in relevant part:

The mortgagee or person having his estate in the land mortgaged, or a person authorized by the power of sale, . . . may, upon breach of condition and without action, do all the acts authorized or required by the power.

Id. at 581 (emphasis in original).  The SJC held that the term “mortgagee” in § 14 was ambiguous and concluded that the Legislature intended that a “mortgagee” must also hold the mortgage note.[3]  Id. at 581-582, 584.  However, Eaton made clear that a foreclosing mortgagee need not have physical possession of the mortgage note to validly foreclose.  Recognizing the application of general agency principles in this context, the SJC interpreted the statutes to permit “the authorized agent of the note holder, to stand ‘in the shoes’ of the ‘mortgagee’ as the term is used in these provisions.”  Id. at 586.

In giving Eaton prospective application, the SJC considered several factors including the fact that the term “mortgagee” in the statute was ambiguous.  Id. at 587.  The Court also noted that Eaton’s ruling differed from prior interpretations which, if retroactive, could create difficulties in ascertaining the validity of certain titles.  Id. at 588.

The scope of Eaton’s prospective application was recently clarified in Galiastro v. Mortgage Electronic Registration Systems, Inc., 467 Mass. 160 (2014).  On direct appellate review to the SJC, the Galiastros argued that, because their appeal of the same issue was stayed pending the decision in Eaton, the Eaton decision should apply to their claims.  Id. at 167.  The SJC agreed, holding that the Eaton decision would apply to cases that were on appeal at the time Eaton was decided (June 22, 2012) and in which a party claimed a foreclosure sale was invalid because the holder of the mortgage did not hold the note.

As many post-foreclosure challenges to the validity of the foreclosure process arise in connection with summary process proceedings (Eaton among them), it is not surprising that the Housing Court has been confronted with these issues.  But, as a court of limited jurisdiction, a preliminary issue was presented as to the scope of the Housing Court’s authority.  In Bank of America, N.A. v. Rosa, the SJC held, inter alia, that the Housing Court has jurisdiction to consider defenses and counterclaims challenging a bank’s right to possession and title, including those premised upon the validity of a prior foreclosure sale.  466 Mass. 613, 615 (2013).  The case did not, however, extend Housing Court authority to original actions to set aside a foreclosure.  Id. at 624 n.10.

The SJC’s recent decision in U.S. Bank National Association v. Schumacher limits the Court’s broad holding in Eaton.  467 Mass. 421 (2014).  Schumacher held that a mortgagee’s failure to provide notice of a ninety-day right to cure, as required by G.L. c. 244, § 35A, did not affect the validity of a foreclosure sale because § 35A is not part of the foreclosure process and, therefore, strict compliance was not required to validly foreclose.[4]  Id. at 422.  The SJC rejected Schumacher’s attempt “to engraft” the requirements of § 35A onto the power of sale because it properly viewed § 35A as a mechanism that gives a mortgagor an opportunity to cure a payment default before the foreclosure process is commenced.  Id. at 431.  As the § 35A notice procedure was viewed as a “preforeclosure undertaking,” it is not one of the statutory requirements with which a mortgagee must strictly comply in exercising its statutory power of sale.

In a concurring opinion in Schumacher, Justice Gants provided guidance to homeowners facing foreclosure.  Justice Gants opined that when a mortgage holder fails to provide notice pursuant to § 35A, a homeowner may file an equitable action in the Superior Court seeking to enjoin the foreclosure.  In a post-foreclosure proceeding, Justice Gants suggested that while a violation of § 35A may not alone be relied upon to defeat an eviction, if a defendant can prove that the violation “rendered the foreclosure so fundamentally unfair,” it may be sufficient to set aside a foreclosure sale “for reasons other than failure to comply strictly with the power of sale provided in the mortgage.”  Id. at 433 (Gants, J., concurring) (quoting Rosa, 466 Mass. at 624).

In the recent case of Sullivan v. Kondaur Capital Corporation, the Appeals Court had an opportunity to address two questions of first impression in this arena – one on standing and one regarding registered land – and a chance to rein in efforts to extend Ibanez and its progeny.  85 Mass. App. Ct. 202 (2014).  The Sullivans owned registered land and executed a mortgage conveying legal title to MERS, which mortgage was thereafter filed for registration with the Land Court.  The mortgage was assigned to Kondaur Capital, which also filed for Land Court registration.  Kondaur Capital thereafter foreclosed and filed a summary process action in the District Court.  The case for possession settled with the Sullivans reserving rights to challenge Kondaur Capital’s title, which they did by subsequently filing an action in the Superior Court based upon Ibanez.  Because the dispute involved registered land, the case was transferred to the Land Court, which has exclusive jurisdiction of such claims.  Id. at 204.

The Appeals Court first addressed Kondaur Capital’s argument that the Sullivans had no standing to challenge defects in the assignments to which they were not a party.  While acknowledging that a party who does not benefit from a contract could not enforce it, the Court concluded that the plaintiffs were not attempting to enforce rights under the contract.  Rather, the Court found the Sullivans were challenging Kondaur Capital’s claim that it owned the subject property which, but for the foreclosure, the Sullivans would still own.  The Appeals Court held that, to protect its ownership interest, a property owner has standing to challenge the bank’s authority premised upon the validity of the assignment.  Id. at 205-206.

Kondaur Capital also claimed that the plaintiffs were precluded from challenging the validity of its title because the mortgage had been registered with the Land Court, and a transfer certificate of title had issued in its name prior to the filing of plaintiffs’ action.  The Court rejected the contention, noting that there are numerous exceptions to the conclusiveness of registration.  The Appeals Court concluded that Kondaur Capital was not an innocent third-party purchaser but a mortgagee required to establish its title by reference to various instruments of assignment following the plaintiffs’ mortgage to MERS.  The Court held that Kondaur Capital was “fairly charged” with knowledge of the deficiencies in its chain of title, and its certificate of title could be challenged based upon any break in that chain.  Id. at 208.

The Appeals Court also rejected the argument that because MERS had no ownership interest in the underlying note, it could not assign the mortgage unless authorized by the debt’s owner.  The Court noted that the Eaton decision was prospective and not available to the plaintiffs and, in any case, did not require that a mortgagee hold legal and equitable title at the time of an assignment of the mortgage.  Id. at 208-210.  The Court correctly observed that “nothing in Massachusetts law requires a foreclosing mortgagee to demonstrate that prior holders of the record legal interest in the mortgage also held the note at the time each assigned its interest in the mortgage . . . .”  Id. at 210.  In fact, as the Court noted, Eaton confirmed that a mortgage could be separated from the debt it secured and, even at the time of foreclosure, the mortgage holder simply needs to demonstrate it holds the note or acts as the note holder’s authorized agent.  Sullivan, 85 Mass. App. Ct. at 210.

The Appeals Court ultimately found that the Sullivans’ challenge to the signature on the assignment to Kondaur Capital should have survived the motion to dismiss and remanded the case.  The Court ruefully observed that the circumstance presented a further illustration of “the utter carelessness with which the [foreclosing lenders] documented the titles to their assets” described in the Ibanez concurrence.  Id. (quoting U.S. Bank Nat’l Ass’n v. Ibanez, 458 Mass. 637, 655 (2011) (Cordy, J., concurring)).

These cases have had a profound and immediate impact on the foreclosure process in the Commonwealth.  Fortunately, the cases have provided direction with regard to how a mortgagee can both comply with the applicable statutes and demonstrate its compliance in the face of subsequent challenge.  Unresolved at this stage, however, is how titles clouded by deficiencies in earlier foreclosures will be cleared – a remedy which now appears to be left to the Legislature.  Unless and until some curative legislation is signed into law, the carelessness with which securitized mortgages were documented and tracked over the last decade will deprive thousands of innocent purchasers at foreclosure of good, clear and marketable titles to their homes and properties.

 

Thomas Moriarty is a partner in the firm of Marcus, Errico, Emmer & Brooks, P.C. and chair of its Litigation Department.  He served as 2010 President of the Real Estate Bar Association, is a past co-chair of REBA’s Litigation Committee, and currently serves as Co-Chair of both the Residential Conveyancing and the Unauthorized Practice of Law Committees and as a member of the organization’s Board of Directors and its Executive Committee.  

 

Footnotes

[1] The Ibanez mortgage, like many securitized mortgages, followed a complex and tortuous path of assignments ultimately reaching U.S. Bank.  Ibanez, 458 Mass. at 641.

[2] Justice Cordy, in a concurring opinion, noted “that what is surprising about these cases” is not the statements of law “but rather the utter carelessness with which the plaintiff banks documented the titles to their assets.”  Ibanez, 458 Mass. at 655 (Cordy, J., concurring).

[3] The Eaton Court analyzed G.L. c. 244, §§ 17B, 19, 20 & 23 in detail in reaching its holding regarding the meaning of the term “mortgagee” in § 14, noting the terms “holder of mortgage note” and “mortgagee” are used interchangeably.  Eaton, 462 Mass. at 582.  Additionally, the Court points to the same conflation of meanings in G.L. c. 183, §§ 20-21.  Id. at 584 n.23.

[4] At all times relevant in Schumacher, G.L. c. 244, § 35A gave a mortgagor of residential real estate a ninety-day right to cure a payment default prior to the commencement of foreclosure and required a foreclosing mortgagee to provide notice of such right to the mortgagor.  Schumacher, 467 Mass. at 430.