Firm battles state probe

The Law Offices of David J. Stern took its fight against the attorney general's investigation to court on Tuesday, moving to quash the state's subpoena.

By TOLUSE OLORUNNIPA
tolorunnipa@MiamiHerald.com
The battle between Attorney General Bill McCollum and four law firms accused of shoddy foreclosure practices continued in Broward County Court on Tuesday, with the Law Offices of David J. Stern challenging the state's subpoena.

Jeffrey Tew, legal counsel for Stern's Plantation-based firm, argued that the attorney general's office does not have jurisdiction to investigate law firms under the Federal Deceptive and Unfair Trade Practices Act, or FDUTPA.

That statute -- the basis of McCollum's case -- only applies in cases where goods and services are being transferred between the accused and the alleged victim, Tew said.

``The alleged quote-unquote `victims' in this case are the borrowers,'' said Tew, presenting a motion to ``quash'' the subpoena. ``FDUTPA requires that the law firm be exchanging goods and services of monetary value with the borrowers.''

Tew said that the law firm was exchanging its services with the banks, not the borrowers.

The judge, Eileen O'Connor, said she would rule in a couple of days.

The case is crucial to the state's investigation, because it comes on the heels of another ruling in which a Palm Beach judge quashed the state's subpoena of the Shapiro & Fishman law firm. That judge said the Florida Bar and the Supreme Court have jurisdiction to sanction lawyers, not the attorney general.

O'Connor indicated that she would judge independently.

``That's not your better argument,'' she told Tew after he referenced the Palm Beach case.

Lawyers for the attorney general's office challenged Tew's tactic, arguing that the state had full jurisdiction to investigate the law firm through its role as a consumer advocate.

``We are authorized as a consumer protection agency to [investigate], and that's what we're doing,'' said Theresa Edwards, counsel for the attorney general's office.

Presenting one of the lead investigators on the case, the state attorneys made the case that the probe is already under way, and serious allegations of fraud are being substantiated by sworn testimony. It has received more than 200 complaints against the firms under investigation.

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