Hearing Held on Constitutionality of Nevada Mediation Program

Justice Pickering

A hearing was recently held on the Renslow Case in Nevada.  This case involves a Constitutional challenge to the Nevada Foreclosure Mediation Program.  In particular, Wells Fargo has asserted that the FMP violates Nevada’s separation of powers provision because the Supreme Court is not adjudicating actual cases and controversies.  The UTA filed an amicus brief, drafted by Brooks Bauer, LLP, joining in Wells Fargo’s arguments.

On the day of the hearing, the Las Vegas Review Journal published an editorial that called on the justices to recuse themselves.

Michael Brooks, Esq., Brooks Bauer, LLP summarized the hearing:  “Wells Fargo’s counsel began the hearing arguing that the sanctions imposed (i.e., $30K plus attorneys fees plus a rewrite of the note down to 2% fixed interest) constituted an unconstitutional taking and violation of the contracts clause of the United States and Nevada State Constitutions.  Most of the questions related to whether or not Wells Fargo owned the note and whether it had standing to even argue the issue over sanctions. Notably, Wells Fargo’s opening argument did not touch on the Separation of Powers argument and Justice Kristina Pickering specifically requested that the matter was addressed in counsel’s rebuttal argument. Renslow’s counsel relied upon the usual deference given to the findings of a lower court in arguing that the sanctions were appropriate.  However, she was not able to offer a meaningful defense of the foreclosure mediation program.  On rebuttal Wells Fargo’s counsel argued at length, without interruption or questions from the justices, about how the program was a violation of the Separation of Powers clause.”

Brooks concluded:  “Ultimately, there is no way to handicap the likely outcome.  However, it appears that the Court is inclined to remand the matter back to the District Court on all or some of the issues presented for further consideration of both legal and factual issues.   At the lower court, the matter may be decided by Judge Patrick Flanagan who has already decided this issue or rendered moot because of a legislative fix.”

Read the Las Vegas Review Journal’s Editorial