Attorney Fined $75,000 for “Absurd” MERS Lawsuits

Federal Judge Issues Scathing Rebuke of Minnesota Lawyer


CONTACT: Jason Lobo
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Reston, Virginia, July 12, 2012—MERSCORP Holdings, Inc. announced today that United States District Court Judge for the District of Minnesota, Ann D. Montgomery, has severely sanctioned Minnesota-based attorney William B. Butler of the Butler Liberty Law, LLC for continuing to file and litigate frivolous, meritless “show-me-the-note” lawsuits designed to thwart foreclosure proceedings in Minnesota. Judge Montgomery joined three other judges in Minnesota who have sanctioned Butler. She ordered him to personally pay the sum of $75,000, plus an additional undetermined reimbursement of legal costs incurred by counsel for MERS and its co-defendants.

In Blaylock v Wells Fargo Bank, N.A., Judge Montgomery found that “sanctions are warranted because of Butler’s repeated attempts to assert the rejected ‘show me the note’ theory, as well as his baseless quiet title claims and meritless slander of title arguments.” Judge Montgomery added that the $75,000 sanction was further justified against attorney Butler due to “his cruel arousal of unrealistic hope in his clients, all of whom face foreclosure and for whom this is an extremely emotional issue.”

“Butler’s insistence on re-litigating losing arguments is staggering, and it comes with a cost, because it multiplies the expense of litigation and monopolizes scarce judicial resources,” Judge Montgomery wrote. “Moreover, no one, not even Butler, can reasonably or competently believe in the merits of any of these arguments. Butler’s persistent filing of frivolous arguments is egregious and merits sanctions…”

“Judge Montgomery adds a powerful voice to other judges who are warning attorneys not to take advantage of foreclosed borrowers and give them false hope when they file baseless lawsuits against MERS,” said MERSCORP Holdings Vice President of Corporate Communications, Janis L. Smith. “We hope this steep penalty will finally be a sufficient deterrent to Butler and others choosing to pursue claims like this.”

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MERSCORP Holdings, Inc. is a privately held corporation that owns and manages the MERS® System and all other MERS® products. It is a member-based organization made up of approximately 3,000 lenders, servicers, sub-servicers, investors and government institutions. Mortgage Electronic Registration Systems, Inc. (MERS) serves as the mortgagee in the land records for loans registered on the MERS® System, and is a nominee (or agent) for the owner(s) of the promissory note. The MERS® System is a national electronic database that tracks changes in mortgage servicing and beneficial ownership interests in residential mortgage loans on behalf of its members.