good afternoon i'm told we have a little problem with our sound system and what i told ms dolan is that we'll try it if it doesn't work we'll turn it off i'm ask you to please speak up ok thank you your honor and may it please the court in this case is about the simple choice that iowa law presents to anyone who acquires the mortgage note they can either register record their interest with the county recording office thereby ensuring the priority of their interest or they may do nothing and risk losing priority to a subsequent purchaser as played below the mortgage electronic registration systems or murders represents an attempt by the defendant banks to have their cake and eat it too by using murs the defendant banks have avoided paying over eight billion dollars in recording these two counties like plymouth county walk into a new wing to enjoy the benefits of priority that recording mortgage interest provides defendants have been unjustly enriched at the expense of these counties and this unjust enrichment serves as a valid basis under iowa law for the claims at issue here in holding otherwise the district court committed to critical errors first the district court incorrectly found that plaintiff's claims were founded on a purported requirement under iowa law to record all mortgage assignments which they were not and second the district court in correctly held that under iowa law recordings are not needed to maintain first lien priority on mortgages even if the slam is not recorded but that is not the law address the first error first the district court's dismissal order rested on a misapprehension of plaintiff's claims that they relied on what the district court called an alleged nonexistent legal requirement to record documents limit county readily acknowledges that there is no requirement under iowa law to record mortgage assignments but that is not what this case is about this distinction is important and undermines much of the support that the defendants rely upon in this appeal one example is the decision of this circuit in brown versus mergers which the defendants submitted this court via rule twenty eight say from that case that the operative language was because arkansas law does not impose a duty on  assignees a real estate mortgage just record those assignments brown state law unjust enrichment and a t p a claim to not state a claim so you see there that the basis for that decision was the lack of a recording requirement under arkansas law did initially record with the county recording office using mers as the mortgagee this was a misleading legal fiction under iowa law the mortgage follows the note every time a notice transferred the purchaser of that note also becomes the new mortgagee mers is listed only as what the tenants call a nominee but this reflects a drastic departure from what has been centuries practice in iowa county recording offices ordinarily the mortgagee him or herself must record in order to preserve firstly in priority this is illustrated by two how someone who acquired no could lose their interest if they failed to record i guess i don't understand why if you're not required to file a what do you care whether they're a nominee or the they are they don't file it at all what difference does it make if they had chosen not to record their interests at all then they do so at their own peril what they did do is misuse the county recording office as a way to get priority for their no assignments but through what was honestly a sham using mers an entity that has very few employees very few assets whose actions are  actually you can only act through it's what they call its officers and executives who are really just employees of the defendant banks that are members of mergers this harm to the county have no remedy when the remedy be that defeating of their priority to avoid their filing if it's some sort of illegal act or or conspiratorial illegal act they just lose or priority well the iowa recording  clients lose already somehow on some kind of real state matter because of the system our client suffered too harms one is failing to collect the recording fees that were paid back when recordings were made using the actual mortgagee rather than mers which is not the true mortgage easy and second the county is injured because property records no longer show who the this what difference does that make to the county because what if they just chose not to file and the whole point of the notice recording system under iowa law is to encourage recording and this is a standard universal practice for you know the whole twentieth century up and i told you said there's no requirement of filing so what if they did they just don't file how are you they're not required to file how are you harmed because the say well we're not going to file what if everybody in iowa from now on decide we're going to file mortgage but the law does not require them to file but the banks investors certainly demand that they present mortgages that have clear and good title these investments in these you know mortgage backed securities are sold on the basis that every mortgage has a good and clear title and the only way that that can be assured is through the recording offices of each of the the counties understanding that everyone has been operating on for the last twenty years or do you represent any of these banks or investors mean my worthy adversaries represent those banks but how can you speak for them or assert any kind of claim or reich that that they may that they may have i just don't see how your clients are  in any way involved in any kind of discussion along the lines of what you're describing well what we allege and are not impacted a dollar under this argument that you're making the county is not impacted the county is impacted because it doesn't get the recording fees that it would have been about that brings us that brings us in a circular fashion back to the original premise which you've already acknowledged that there is no requirement under iowa law that that these documents be filed and that and that those fees be paid well it's not it's not a requirement but it is a choice that iowa law demands of each acquire of a mortgage you know that they either record and pay that recording fee or not record and risk losing to someone else right it's a choice but what if they make the choice not to file and they come up with this other system or system or whatever it is and turns out somewhere down the long you're right they don't they don't get priority the banks don't have priority for whatever reason well that's their problem how how they made the choice to go into th system how does it how does that make any difference to the county that they could have made the choice not to record it all and simply contract among themselves not to challenge the priority of the assignments that they make to each other that's not what they chose and as we have ledge in the complaint they could not have been able to make that choice and continue to sell these investments as though risk your investment and what they did instead was their records are now no longer accurate they do not show who the actual mortgagee is and this is a problem not only for the county but for the county's residents who want to know who do i need to deal with if i have a problem with my mortgage it's a problem for the state or the county you may want to investigate predatory lending practices they have no idea you know who is actually acquiring these mortgages what if the person wants to do that goes to murderers and says i see you have recorded th mortgage well as disclosed to them which bank first of all i was set up a system in the county recording office and so that someone can go to the government rather than to a private entity for something of public concern second of all they go to the government and they see murders so they can get that information from the county but the second point is that mers is proven to be incredibly unreliable for many mortgages even m can't tell you exactly who because not all of mers members register their assignments properly either well so but whose power how does that affect the county the county has i mean you may have some assamese out there that may end up not having their security having their mortgages valid or whether they're simons they may be stuck but that's their problem the county has an interest in protecting the interests of its residents in the interest of its residents are in having one clean set of property records in which they can investigate chain of title and it isn't that kind of what the i was supreme court wouldn't throw out this system i could see where the legislature might stop it and maybe the i was supreme court might drop it but i don't see how the how anybody else could do anything about it but i would just like your has stopped it by passing statutes that present the choice that i described at the very beginning of my presentation and i'll reserve the remainder my comments for a bottle with the influence of the court thank you very much thank afternoon mr heffer a please the court before i make a few remarks about our position i would like to address the last question that came up with guarding the position of the county that it's little bit first of all if in fact that was the law of iowa we would not have a permissive system but we do have a permissive system the judgments been made that the system is not going to be a complete mandated chain of title for things like mortgages secondly the question arose as to what borrowers can do and borrowers can find out about their loan first of all they can contact mergers and find out who is the current owner of their mortgage secondly under federal law the truth in lending act they can contact the person who's servicing their loan that i collecting the payments and under federal law the servicers required to identify who actually owns the loan so with respect to that issue that came up there is certainly recourse for the borrowers and to scent that the county or others would like a complete system  that is a complete chain of title that would be a question that have to address the legislature asking for iowa to abandon the permissive system and instead adopt the mandatory system we expect of the merits of the claim i would just make a few observations of the as a district court correctly found here there is no unjust enrichment because the only thing my clients are accused of doing is doing something that the oil iowa law permits them to do which is choose not to record the pla concede that we have no obligation to record and so our choice not to record is simply one that's permitted and so if a consequence flows from that it is not unjust and as the court correctly found that is sufficient to dispose of the case this is entirely consistent with the brown opinion that judge sheppard authored recently involving arkansas law but in that case as the court as this court correctly held when there is no duty to record and quoting quote the lenders have retained nothing of value to which they are not entitled and there is nothing that could be required to restore to the county the district court properly dismissed the unjust enrichment climb there's no assertion there was no assertion in response to the rule twenty eight a letter that arkansas law of unjust enrichment is any different than iowa law of unjust enrichment and in fact if you go look at the cases cited for arkansas law and the brown case is fully consistent with the cases under iowa law and in particular the case the district court relied on called lakeside feeders and so at a minimum under the park panel role there's serious question about whether the court ought to simply just apply brown and and move on even without delving into the details that we've gone up in briefs the briefs were done before brown was decided in so we didn't argue the case that way but after brown play if i may not identified any basis for his distinguishment of brown as a different more in the just in richmond area but and the need to record and so forth but let me ask you was that argued in the district court i mean what are these arguments of the we've heard here argued to the district judge your honor the arguments first of all brown was a case where the county was arguing there was a mandatory duty to record this court court there in that this court here found there was no mandatory duty to record but then as you see from the opinion this court went on and said since there is no mandatory duty there is no unjust enrichment because you're doing simply what you're allowed to do we argued the brown district court opinion in the district court it had already come down the arguments in the district court were consistent with the arguments we're presenting here i would point out that they're really the plaintiffs really the plaintiffs did not really argue that the unjust aspect of this case turned on brown the question is if you want to try to identify an unjust enrichment this court's decision in icon kovar says jensen provides the useful standard in this is in the brief that is in order to determine whether an enrichment to a defendant is unjust the court needs to ident under iowa law the court would need to identify some standard some norm of fairness and justice which was violated so for example someone violated a law or someone tricked a third party into paying money to him rather than to the plaintiff there is no standard here that the plaintiff has identified the counties identified that my client's choice not to record somehow violated  we had stead my client had a right not to report and so actually the shoe is on the foot not only is there no standard of justice and fairness to violate in the congo sense we actually are permitted to do what we did and that's why the district court relied on the livestock feeders case in life stuck feeders the defendant was able to prevail in an unjust enrichment claim under under the law because it had a contractual right to keep the money so this court held as every court that i'm familiar with another states hold that you can't be sued in unjust enrichment if you did something you're allowed to do my clients were permitted to not record and therefore it was proper for the district court to find that there was no one just enrichment fully consistent with brown even though the argument as to whether there was a duty to record was certainly much stronger there but this court certainly can find a firm based on brown to confirm based upon the application of a con cocoa and livestock feeders either either way the court can get  there quite easily now we have i think another of no other series of arguments set forth in brief and and i won't do all very much on it or leave us to the briefs but let me just make an observation about a lot of what the plaintiff says a lot of what the plaintiff says is that my clients have done something that perhaps unexpected which is they have chosen not to record and that may be that something different from how people operated for many many years we have to assume that fact to be true because it's alleged it was a motion to dismiss but that does not make the enrichment extent there's enrichment for for not having paid fees  does make the does not make the enrichment unjust most of the plaintiffs argument is to talk about how somehow my clients have been enriched because we haven't had to pay any fees but clearly emersed system benefits my been disadvantaged by the system in a way that is unjust even though my clients clearly have benefited from the system they set the system up it is not a recording system it's a system whereby the recording the recording the county mortgages the county is simply disappointed that the legislature has not required recording that's something that if they wanted to remedy they have to go to the legislature and this court certainly should not find that my clients acted on justly i just make a couple quick observations as well there are a number of tagalong claims that his claims that were derivative conspiracy injunctive relief those clearly were correctly dismissed because they were entirely derivative there was a declaratory judgment claim that the plaintiff makes an argument in the reply brief i'd like to address briefly they claim while the court erred just a court erred in dismissing the declaratory judgment claim because the counties were not looking to get recording fees to the declar judgment claim gives a standalone right to bring a cause of action if you don't otherwise have a claim furthermore there can't be any claim for a declaration with respect to gaps in the title because this permissive system assumes that there may be gaps of title do you acknowledge that there's a case in controversy or do you the court go through a standing analysis before we get to everything they spend discussed today we do your honor urged the court to go through a standing analysis of rest on my briefs in that regard well no i don't want you to rest because you're saying we have to take on a threshold issue whether there's a case in condors if you're not serious about it you could waive it and then we can go to the merits of it if you're serious about it i think you should argue it i'd like you to argu i'm happy to great yeah absolutely judge under iowa law a county recorder is only entitle to be paid fees if it renders a service of recording a document that is as you might imagine someone goes into the recording  the county must show that that it has suffered the invasion of a legally protected interest it does not have a legally protected interest in the recording fees until my clients present an instrument for recording so they could not sue conflates the merits with standing question you're saying they don't have standing because they don't have any right to a fee but their claim is that under rules of equity they should be entitled to a fee even though while a law does require the recording that would trigger the fee the question does have to consider whether they have a legally  there is i don't think they've pointed out any basis on which they could say they could be paid a fee unless they actually tender an instrument and so i wouldn't say conflates the merits because they're tempting to read obtain payment for recording i think measured by recording fees but they haven't they can't get a recording fee and less they actually were tendered instrument so they have they have not argued the standing not argued that they have a right to obtain a fee through any method other than the tender of an instrument and so so we would say that that there is an article three problem here because they can record a can't get a fee unless it actually is a argument is that through this sham mechanism that mirza set up your own voiding the necessity of presenting the instrument and if you didn't have the sham then they would you would have to present the instruments and they would get the fees and i understand your argument is not a sham and so forth but i just wonder whether that goes to standing out of the merit so that's why i wanted to hear and i guess i would just i would just say that  that the the it's undisputed as far as as far as the briefing goes that the payment of a fee in and the law is the payment of a fee and i owe it is predicated upon the rendering of service  so we could win the case on the grounds that they can't get that if we went to the merits we could win the case by arguing as well that issue on the merits but the specter standing it's a separate standing problem because they have not that there is a legally put another way i guess judge called the question is is there a invasion of a legally protected interest in some sense that's always a merits question there has to be a legally protected interest a county recorder we claim under iowa law has no legally protected interest in a fee without rendering a service and so it completes the merits in the sense that it requires the court to consider whether there's a legally protected interest but on this you should brown have been dismissed for lack of jurisdiction is that pretty much the plaintiff points out the cases i have decided the district court case of decided since you have decided against us but i'm brown in our court were you involved in that case and did you argue standing there i don't know all the briefs and i don't recall the briefs in the brown case have a legally protected interest in the other thing they're complaining about which is the injury to the to the county records and we again argue there's no legally protected interest in that because they don't purport there's nothing in the statute nor in any case it says they own the records they maintain the records but they don't on the record so they have no legally protected interest in and if there's any problem with the records they have no legally protected interest that is infringed by the action of the defendant it's kind of a chicken thank you your honor just to briefly respond on the article three standing point we're not aware of any single authority that has adopted the defense argument on this point and we do believe that the economic harm  the recording fees and the non economic harm in their records is sufficient to control the standing here as courts of unanimously found i want to correct the way that the defendants have been mis framing this case this case is not about a failure to record if the defendants had simply failed to record their mortgages then we wouldn't be here today what it's about is the defendants taking advantage of the county recording system and much of this is alleged in the proposed amended complaint the district court erroneous lee rejected it's about the defense taking advantage of the county recording system and recording want to get priority for that mortgage in a way that was improper by listing murderers rather than the  these excessive assignments that would have been record that would have needed to been recorded under the i was dr torrey scheme it would have been irresponsible and imprudent for the defendants not to record it all because of the investors demands on the mortgage interest being secure what they did do however was record ones and then avoid the recording fees that they would have needed to pay for successive assignments through the use of murders an argument is that that is unjust enrichment under question before you finish and it's not about the merits of the case it's based on my interest in the rules of appellate procedure i noticed in your brief you used a technique that i haven't seen before and that is that throughout the brief you abbreviate or use an acronym of d c for district court and i assume that's done because that minimizes number of words you have to put into the brief and therefore you can make your brief longer than what the rules permit if you spell out district court so my question is whether that's an regular practice of your firm and whether you've seen it used by other parties  and whether it's been questioned by any clerk i have seen it used before by other firms besides our own it's not our firm's universal practice but since we refer to the district court so often in this brief we felt that it was simply a convenient way to abbreviate it so that people didn't have to read out disparate court every single time that was a safe space and it certainly wasn't an attempt to try to evade it was not using th well you thought it was just easier for the reader that that's correct your honor i'm not sure you might get a debate from some people about whether acronyms are easier on the reader than words but i understand the sentiment