versus wells fargo number twelve one nine seven three this case is one of several actions where distrust him owner is attempting to enforce the mortgage servicers obligation to provide a loan modification under the government's him affordable modification program otherwise known as hand these cases started back in two thousand and nine when the hand program began when mortgage servicers agreed to abide by the program but systematically did not abide by their obligations often ninety percent of the time the u s treasury statistics that they report online show by simple math simple division that if you take the number of homeowners that the mortgage servicers admit are most likely entitled to a loan modification of this program and then if you take a look at the number of modifications that are actually granted if you do simple division it comes out to build ninety percent of the time they're just slightly ignoring the one big argument that is repeatedly made in these cases is that there is no private right of action under him to be made and repeatedly successfully  but there are still cases that go forward although there is no private right of action underhand the law does not say if there is no private right of action there is not any type of action the only way that you can make that argument is if preemption applies and i believe that the seventh circuit and we god acknowledged that wells fargo's argument that state law causes of action or just an end run around a private right of action for hand that argument is actually an end run around preemption it's a flawed preemption argument basically the argument is that state consumer protection actions and state common law is preempted by hand because it does not provide for a private right of action the problem with that is that it's inconceivable that the government and then acting and  i don't see why that would mean a really big difference that the whole underlying theory of these cases is for negligence you have a standard of care well first you have a duty right and i will get to that i guess i should probably start with the promissory estoppel or misrepresentation cases you have statements or promises that are you're saying they did not intend to keep as seen in their start of kids that they send out to distressed homeowners that before the homeowner actually applies for the hamp modification the promise is if you take time out of your life to fill out this paperwork that you don't have to fill out under the data trust or other mortgage documents and if you qualify under the rules governing hamp which were implicitly promising to follow you will get a t v pay and if you make three successful finally payments on that it will be converted and we will offer you a permanent modification which you can then accept and then that p v p becomes a permanent modification what do you say about the case law  an application doesn't do that there isn't a simple application is not enough the application does not constitute a promise it's what precedes the application that constitutes the promise t your clients didn't reach that point we contend that they did and the complaint alleges us to hand guidelines are incredibly specific there are two hundred pages of their online we provided a very brief e mean it is almost close to saying that you will get to a mathematical formula in terms of a few hundred of care so the complaint alleges that they did qualify under these guidelines and at the pleading stage that should be sufficient the other wells fargo has produced no guidelines showing that they did not qualify so at this point the complaint should be deemed true and the case should proceed to discovery can we assume from your argument that we don't have to decide the threshold issue that you that comes about in this whole area of whether there is a private right of action and so here again i think it's a flawed preemption argument i really think it is a red herring so you don't think we need to reach the no i mean every court even the courts that allow these cases to go forward again in the post d period they start out by saying there is no private right of action under him but then they say there are state common law causes of action and there's state consumer protection causes of action which if the elements are met regardless of whether or not there's a allowing the negligence claim in this case would not necessarily make a potential negligence claim whenever any consumer applies for a loan modification under any circumstances what's special here person who is just applying for a loan right not a loan modification that person put up a ten thousand dollar deposit a duty was found in that case to use due care and reviewing the person whether they were eligible for a loan in this case and all of these cases we don't just have a ten thousand dollar deposit we have a whole house that can be lost or wait a minute see that's what you tell the judge davis that if i understood your answer you really don't care about whether there's a private cause back in under the federal and i take it by your answer you mean to say that you do not rely in any way here on the existence of a federally rooted duty wrong ok so that's what good so we're we're on the same page you want to sue or state cause of action based on the existence of a federal law of duty and you're claiming that's not a federal cause action arising from the breach of a federally imposed duty not be a federal cause of act because it's stated in terms of the elements of the state law cause of action are the elements of the state consumer protection cause of action well doesn't that make it a state duty in other words if you're saying yes state law borrows a federal standard i can follow that so is that what you say yes it's a state law will do to you that is defined by  actions right the state law says that if there's a standard of care there you know that's the standard that you should abide by if you're operating and you care it is no different from an industry standard case would be very hard pressed to find an expert who cares about is for eventually to come in in an on hand case and say there's an industry wide standard of care governing when a mortgage servicer has to give a loan modification because that's bogus before hand it was just left up to the servicers discretion they could do whatever they wanted there is no written industry standard here these cases are special because we have two hundred pages of an industry standard spelled out on the internet for anyone in the public to look at so since we had the standard of care and sense like in the jake's case the homeowner is at the mercy of the mortgage servicer not just losing ten thousand dollars losing their entire  out on the street the argument for eight b n position of the duty is greater that's in the run isn't that enron around congress is suppose a decision not to create a private cause of action hundreds of years of common law or and you know decades of consumer protection cases in the states since a consumer protection case can apply to any misrepresentation not just by a mortgage service again i just don't see how one can credibly argue that hampel was designed to preempt that mistake on a law causes of action you have medical malpractise you have all kinds of negligence second come up so since the negligence as the seven circuit pointed out these are my words and we're god the argument that there is no private right of action is in itself a flawed and run to try to get around the lack of a preemption argument it looks like i'm running out of time i guess the last thing i want to say is that there have been some articles lately showing that the supreme court has been using the term floodgates in a lot of its opinions more frequently a lot of distrust homeowners are really trying to save their investment and there's this program that says that they're entitled to a  modification if they can assert the elements of a state cause of action especially since it was the same homeowners these taxpayers who gave the bail out to the banks in the first place that obligated them into this program there it please the court my name is virginia barnhart along with my colleagues there are meyer who is visiting the four circuit for the first time today we're here to represent wells fargo in this appeal my voice is a little light today because lamest contention that they were improperly denied a temporary placement payment plan under the guidelines that are issued to mortgage servicers under the hamp program as this court has recognized in your questions this morning congress did not provide for a private cause of action under that statute and it is indeed an end run around congress as decision not to do that to assert the claims that have been asserted in this case there are three steps before you can get a t v temporary payment plan one is to make application to is to be eligible for consideration and three is to have a plan extended and signed by two parties that are bound by it the plainest do not contend here as was the case and we're good on which the plaintiff's rely that they were ever granted a t p p what they are clearly attempting to do here as the district or found is use their interpretation of the hamp guidelines to force a t p p where one was not granted which is in effect seeking to enforce those guidelines they cannot do that because congress has not recognized to call a private cause of action here but they also can't do that based on the specific facts in this case i should point out to the extent that who are its seeks to speak more broadly than to the particular facts in this case but there's another important issue here well fargo is a mortgage servicer and the guidelines on which the plaintiffs rely and i might point out the ones attached to the complain are actually not applicable in time period the plaintiff claims but even still they're not complete the hamp guidelines that the plaintiff's attempt to rely upon to make their claim under different labels leave open the determination on eligibility is based on an investor standards when i say investor i mean the holder of the loan here in this case the record reflects that wells fargo was not the holder of this loan but a mere service or so we are here with a claim trying to force a service or not an investor to honor the plaintiff interpretation of guidelines which reserve to the exact to the investor discretion whether to participate here and that's an important note for the larger case but here what we also have is a case that fails on the theories advanced and on the particulars in this case in this case we have a factual record based on the exhibits that accompany of the complaint that show that the plaintiffs made application for a cheapie that they submitted certain documents with that than wells fargo as the mortgage servicer here acknowledged that application and asked for more documents by a specific time so was that the appellant as i understand it for proof of income submitted to pace sperry twelfth and night why was that wells fargo to honor its obligation to its investor asked for those but that's not in the record in this but to the hand guidelines specified give that discretion to the to the investor as to what is sufficient to meet the proof of income it always gives the discretion to the investor even whether to participate in him here if the investor is not one that has signed on to a purchase a patient agreement but specifically and this is why the period of guidelines is important in the more global discussion of these issues there are different times where the guidelines are more specific about what kind of proof of income is acceptable and the period but that is for those that participate in the carrot for people for them to participate under or the investor to purchase care of the carrot is that there can be an a of funds under the emergency economic stimulus act to cover certain mortgage losses here and while wells fargo is a mortgage servicer it's also a holder of many of its own longs that it services and it signed on to that and did receive funds albeit under tarp in this case again we're going slightly beyond the record but to answer your honor's question  there it's important in this case to know that when they were asked for additional documentation they were asked to provided by a date certain they neglected to do so their own exhibits reflect that and on that basis they were denied a t v here what's also important to note is what the cases that are binding upon this court have said here and i'm going to direct the court's attention to the supreme court's decision in astor usa versus santa clara county california that's a case that's very similar here although it doesn't involve hamp it involves a similar program that was adopted by a federal agency exercising authority general thirty given it to it by statute to adopt such programs in that case it's a program by the health resources and services administration by which drug manufacturers opted into what was called the three forty b program in that case and signed a pharmaceutical pricing agreement that's similar to the participation agreement here that agreement was between that federal agency and the pharmaceutical companies just like the agreement here is between wells fargo acting as mortgage servicer and the department of the treasury it's notable here as we talk about a cause of action and what duties arise under federal law that we don't even have a congressionally adopted act that specifically states any duty visa via mortgage servicer it states a duty or or grants authority i should say to the department of the treasury to adopt a program that's what the emergency economic stimulus act did and what's noteworthy in doing so and i'm going to direct the court's attention to language from an eleventh decision in the miller case which is cited is that in doing so the neither the department of treasury nor congress suggested that these kinds of programs which treasury might adopt were intended for the benefit of mortgage or such as the appellant's in this case the way in the miller case the court discusses whether there's any discernible legislative intent to create a private  cause of action and notes in that case that there is none because the emergency economic stimulus act and hamp were both designed quote to provide authority and facilities that the secretary of the treasury can to restore liquidity and stability to the financial system of the united states we all can recall that rather doubt dicey time in our economy that's what the stimulus act was intended to do keep banks from failing are there other provisions in acted by congress that are about mortgage relief yes but in terms of the hamp program adopted under the authority given to treasury under that act the intention there was to save the banks here and there is nothing expressed or implied within e s a or hamp which suggests that they are that congress is intention was if treasury adopted a program to help the banks that it would give a direct or and run cause of action to mortgage oars so for all of those people who are who are in a pre t p p context and i i see a lot of these claims at the dish record level about nobody returning phone calls how difficult it is to get through that here process for all those people that are in a pretty t p context as a practical matter there is no relief available for a broken down negotiation because i know the bank is overwhelmed doesn't get back to people in a timely fashion whatever the allegation it's your honor the answer to that would be yes i think that's a choice that congress made and it's interesting that you bring that up one hand has a some set provision it was a test to see whether this worked ok and i think that's significant in terms of the overall intent of treasury here that it was in effect an experiment here too though was the treasury wanted by and from servicers he and i think that's why the answer to your question is yes judge davis because of the fact that is recognized in miller to create a duty to do what my opposing counsel would suggest be done in these kinds of cases would have been to contravene as the miller court said the purposes of ham because it would have chilled service or  program based on the fear of the expense of litigation and i think that's a notable point that is made by your colleagues in the eleventh circuit with respect to the underlying purposes of this in effect experiment  sunsetting experiment here but going beyond the eleventh circuit i think we have to go to the well of our precedent which is the supreme court here in the astor case and one in the astra case the supreme court found that there was no private cause of action emanating from the participation agreements and the federal program in that case it didn't just stop there it noted that and i quote it would make scant sense to allow them these are parties that are not under those agreements to sue on a form contract implementing the statute setting out terms identical to those contained in the statute the label differently suits to enforce and they reference the program number there and suits to enforce participation agreements are in substance one and the same their treatment therefore must be the same no matter the clothing in which the plaintiffs blow their dress their claims there is no one so the supreme court is in effect already spoken here it doesn't matter about the label it matters what the program was intended to do and as has been acknowledged by the plaintiffs in their brief here there is no private cause of action error go you cannot really label it to create a federal duty to give a state law label to a claim there is no duty that can give rise to a private cause of action under hamp in appraise t p piece an area now the underlying district or here the district court for the district of maryland and the wicked case did recognize that things change when a contract has been entered into and signed and that's what the wicked case pertains to as i believe judge backor noted in her question this morning if the court disagrees with my analysis of ham it matters not in the confines of this case because as the lower court correctly found here has been no misrepresentation the statements relied upon were not misrepresentations the alleged  promise on which the plaintiffs rely here to process their hamp application was as the district court found in looking at the plaintiff's complaint met it was processed here they asked for additional information that information was not forthcoming that letter and we often encourage that kind of seemingly for impenetrable barrier and then you make a phone call or you pay a visit or something and people say ok i'll make an exception but it wasn't passed and there's no such allegation but your honor i would suggest that even if there were such an allegation in another case and you have several of these cases that are coming before you here several of which are being handled by my office now it wouldn't make a difference because that's that enron too imposing a duty where one does not exist here but the promise made here if there was a promise and we contend there wasn't a promise to other than the treasury department to give this a shot under the participation agreements but not a promise that runs to these accounts here if there was it was honored and it was processed information was arrested deadline was not met and it was denied on that basis the misrepresentations on which the plainest rely briefly are also not misrepresentations as the lower court found here the statement to process was matt and the two statements that  show up in the notice of intent to foreclose are were found by the court to be neutral to be accurate on their face the plaintiffs admit they were in default and the plaintiffs admit that their mortgage document enabled the hint the hymn guidelines do outline what employment information what financial information is required contrary to the contention of my opponent those that portion of the hand guidelines was not attached they complain and at the motion to dismiss stage you just go with the allegations of the complaint so since the allegations in the complaint say they have guidelines were satisfied we've met our burden at this stage going forward we will certainly introduce i think it's chapter four something that they have guidelines that say that all you need is your two most recent paystubs which is what was supplied in this case which is why we alleged it in the complaint which is the end all be all at this stage into the camp program was enacted to save banks but it wasn't called the save the bank program it was called the emergency economic stabilization act in addition to saving the banks government wanted to put cash in the hands of consumers because as anyone who has even a small understanding of the con realizes consumer cash flow is what drives the economy when consumers have money to spend they spend it which makes profits for business for business and consumers have cash when they're not losing their home they have equity they still have some kind of  interest in their biggest investment most of their lives so it wasn't just to protect the banks it was to try to stimulate some cash flow in that drastic two thousand he economic period wesley my colleague mention of the word god case and alan b citi mortgage where ham cases were allowed to go forward i don't like saying the hand guidelines i just like to say the industry standards because that's essentially what they are for purposes of our negligence action but the way god and alan case they didn't just have a breach of contract they actually had what lease the alan case did i can't remember exactly what claims off the top of my head right now we're in the wig on case but i know that alan the city mortgage included state consumer protection claims  claims other than just pure breach of contract so the contention that these cases stand for the proposition that only a but the t p p cases can only go forward because they have a contract is false since they weren't just be sure breach of contract cases