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Lassiter Notwithstanding: the Right to Counsel in Foreclosure Actions

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Lassiter Notwithstanding: the Right to Counsel in Foreclosure Actions NONPROFIT ORG. U.S. POSTAGE PAID January–February 2010 CHICAGO, IL Volume 43, Numbers 9–10 PERMIT #7706 50 East Washington Street Suite 500 Clearinghouse REVIEW Chicago, Illinois 60602 Taking action to end poverty Volume 43, Volume Numbers 9–10 January–February 2010 405–496 Framing a Persuasive Advocacy Message COMMENTS? We invite you to fill out the comment form at povertylaw.org/reviewsurvey. Thank you. —The Editors Medicare’s “Improvement Standard” Remote Communication for Persons with Hearing Disabilities Financial Obligations in Illinois’s Criminal Justice System Right to Counsel in Foreclosure and the Due Process State-Action Requirement Recovering Shriver’s Vision for Poverty Law “Fugitive Felon” Provision Settlement Lassiter Notwithstanding: The Right to Counsel in Foreclosure Actions By John Pollock John Pollock s I write, 250,000 new ABA Section on Litigation Civil Right to Counsel Fellow households are going into foreclosure every three Public Justice Center A 1 1 N. Charles St. Suite 200 months. In the first three months Baltimore, MD 21201 last year, 22 percent of homeown- 334.956.830 ers were “underwater” (i.e., owed [email protected] more than their homes were worth), while a third of home sales in the previous year were either short sales or purchase of bank-repossessed proper- ties.2 Few signs of improvement are on the horizon: 1.5 million foreclosures occurred in the first half of 2009 alone, and some estimate that 8.1 million mortgages will be in foreclosure over the next four years.3 The result is a tidal wave of cases swamping the state and federal courts—cases whose sheer volume and procedural irregularities strain the promise of due process. The shortage of legal assistance during this crush of “foreclosure actions” compounds the due process concerns: no state provides a statutory right to counsel in any fore- closure proceedings, and consequently more than half of foreclosed homeowners are handling their cases without counsel.4 Yet having an attorney is critical: while even a delinquent borrower may have a variety of options (e.g., mediation, modification, relief under federal law, various state-law claims and defenses) only an attorney can evaluate the options properly and advise the homeowner as to the most efficacious strategy. Establishing a Fourteenth Amendment right to counsel in foreclosure actions re- quires an advocate to contend with the U.S. Supreme Court’s decision in Lassiter v. De- partment of Social Services.5 Where there is no threat to “physical liberty,” by which the Court meant incarceration, Lassiter created a presumption against the right to counsel in civil cases.6 Overcoming this presumption requires application of the three-factor 1Mortgage Bankers Association data from NeighborWorks America, http://bit.ly/8124yk. 2Reuters, More than One in Five Homeowners Underwater, May 6, 2009, http://bit.ly/7v6pXb. 3Nick Timiraos, Foreclosure Filings Hit 1.5 Million Homes in First Half of ’09, WA LL STREET JOURN A L BLOGS July 16, 2009, http://bit.ly/4YFy9d; John Rao & Geoff Walsh, National Consumer Law Center, Foreclosing a Dream: State Laws Deprive Homeowners of Basic Protections 8 (2009), http://bit.ly/83lshF. 4In judicial-foreclosure states, mortgage lenders or servicers must file a court action in order to foreclose on a mortgage. In nonjudicial-foreclosure states, lenders or servicers may foreclose through the mortgage or lending contract by exercising a power-of-sale clause. Judicial proceedings in nonjudicial-foreclosure states are initiated only when a debtor seeks a permanent injunction against foreclosure or files for bankruptcy, the latter triggering an automatic stay of the foreclosure. I use the term “foreclosure actions” to cover both traditional foreclosure filings by the lender or servicer and foreclosure- related judicial proceedings initiated by the debtor. Regarding the lack of counsel in foreclosure actions, see Melanca Clark & Maggie Barron, Brennan Center for Justice, Foreclosures: A Crisis in Legal Representation 12, 14 (2009), http:// bit.ly/4sQxML. 5Lassiter v. Department of Social Services, 452 U.S. 18 (1981). 6Id. at 26-27. 448 Clearinghouse REVIEW Journal of Poverty Law and Policy n January–February 2010 Lassiter Notwithstanding: The Right to Counsel in Foreclosure Actions test from Mathews v. Eldridge: the private Presumption Against Counsel Except interests at stake, the state’s interest, and Where Physical Liberty at Stake the risk that the procedures used will lead to erroneous decisions.7 The Lassiter dissent and subsequent com- mentators have questioned whether the Fortunately, even the Lassiter Court ac- Court created out of whole cloth the pre- knowledged that due process “is not a sumption against the right to counsel technical conception with a fixed content in civil cases unless physical liberty is unrelated to time, place and circum- at stake.11 In practice, some courts have stances.”8 Here I explain how the current wrongly treated the presumption as a national epidemic of foreclosure actions complete bar to the right in nonincarcer- passes the Lassiter test, even absent any ation cases, skipping the Mathews analysis threat of incarceration.9 I do not take up entirely.12 Conversely many post-Lassiter the threshold requirement of proving courts finding a state constitutional right “state action” so as to trigger due pro- to counsel in termination of parental cess guarantees; for that discussion, see rights proceedings have rejected the pre- my Going Public: The State-Action Require- sumption either explicitly or sub silentio.13 ment of Due Process in Foreclosure Litiga- The presumption’s primary flaw is its tion in this issue. Nor do I here tap state downplaying of all nonincarceration in- constitutional due process clauses as be- terests; as one commentator put it, “Las- ing broader and therefore more fertile siter, for all practical purposes, stands for ground for pursuing a due process right the proposition that a drunken driver’s to counsel in foreclosure actions.10 night in the cooler is a greater deprivation of liberty than a parent’s permanent loss of rights in a child.”14 7Id. at 27 (citing Mathews v. Eldridge, 424 U.S. 319, 335 (1976)). 8Lassiter, 452 U.S. at 24 (citation omitted). 9Some commentators suggest that the deprivation of housing can implicate a liberty interest because many of those deprived of housing become homeless and consequently subject to arrest and incarceration for vagrancy or (if mentally ill) institutionalization. See, e.g., Andrew Scherer, Gideon’s Shelter: The Need to Recognize a Right to Counsel for Indigent Defendants in Eviction Proceedings, 23 HA RV A R D CIVIL RIGHTS –CIVIL LI B ERTIES LA W REVIEW 557, 567 (1988). 10See, e.g., Matter of Kimber Petroleum, 539 A.2d 1181, 1187 (N.J. 1988) (“[T]he doctrine of fundamental fairness, which has roots in the New Jersey Constitution and in New Jersey common law, has been applied to grant persons procedural protections that may exceed those offered by the due process clause of the federal constitution.”); Matter of K.L.J., 813 P.2d 276, 282 n.6 (Alaska 1991) (in private involuntary adoption case, court finds right to counsel under Alaska Constitution’s due process clause; court “reject[s] the case-by-case approach set out by the Supreme Court in Lassiter. Rather, our view comports more with the dissent …”). 11Lassiter, 452 U.S. at 40 (Blackmun, J., dissenting); Michael Millemann, The State Due Process Justification for a Right to Counsel in Some Civil Cases, 15 TEM P LE POLITIC A L & CIVIL RIGHTS LA W REVIEW 733, 741–42 (2006) (“The Court created this presumption without justifying it …. In the physical liberty cases … the Court had no occasion to decide whether or not there should be a presumption against the appointment of counsel in state-initiated [termination-of-parental-rights] proceedings.”). 12See, e.g., Wilson v. Department of Rehabilitation and Corrections, 1991 WL 54191, at *1 (Ohio Ct. App. 1991) (unpublished) (“ an indigent litigant is entitled to appointed counsel only where the litigant may lose his physical liberty if he loses the litigation”); Bejaran v. California Department of Corrections and Rehabilitation, No. Civ. S-08-00817, 2009 WL 2365550, at *7 (E.D. Cal. 2009) (citing Lassiter for proposition that “[t]here is no right to counsel in a civil case, although 28 U.S.C. § 1915(d) authorizes courts to appoint counsel to represent indigent prisoners”). See also Clare Pastore, Life After Lassiter: An Overview of State-Court Right-to-Counsel Decisions, 40 CLE A RINGHOUSE REVIEW 186, 187 (July–Aug. 2006) (describing courts that misconstrue the presumption). 13See, e.g., South Carolina Department of Social Services v. Vanderhorst, 340 S.E.2d 149, 153 (S.C. 1986) (“under our interpretation of Lassiter, cases in which appointment of counsel is not required should be the exception”); Matter of K.L.J., 813 P.2d 276, 285 (Alaska 1991) (Alaska courts “do not weigh the factors in a due process analysis against a ‘presumption’ that appointed counsel is required only if a person’s physical liberty is at stake”); In Interest of E.H., 609 So. 2d 1289, 1290 (Fla. 1992) (reaffirming holding of In re D.B., 385 So. 2d 83 (Fla. 1980) that “a constitutional right to appointed counsel arises where the proceedings can result in permanent loss of parental custody”); In re A.S.A., 852 P.2d 127, 129 (Mont. 1993) (quoting approvingly from Lassiter dissent). 14Douglas J. Besharov, Terminating Parental Rights: The Indigent Parent’s Right to Counsel After Lassiter v. North Carolina, 15 FA MILY LA W QU A RTERLY 205, 219, 221 (1981). See also In re Luscier, 524 P.2d 906, 909 (Wash. 1974) (“Surely, the reasoning … which requires the appointment of counsel if there is the possibility of even a 1-day jail sentence, must also extend to a proceeding where a parent may be deprived of a child forever.”).
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