Source: https://claimsissues.typepad.com/insurance_claims_and_issu/journalism-in-the-21st-century/
Timestamp: 2019-04-25 06:45:30+00:00

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THE FINAL INSTALLMENT: BANK DEREGULATION GROWS INTO MASSIVE "CROSS-SELLING."
This is the final installment of an article on the effects of secret financial and credit practices on us all.
Proposed secrecy orders in the 2015-2016 California lawsuit filed by the L.A. City Attorney. Many of the changes made by the secrecy agreements in the California lawsuit were made earlier in previous lawsuits, as noted. Other Rules changes in the agreements signed in this case have not often appeared in other cases, however.
There are three main ways in which the January secrecy agreement validated by the judge in February changes the Rules. Each change protects the secrecy of just how big the catastrophe really is. Even as these words are written in this book, it is uncertain whether the full extent of the man-made disaster of alleged cross-selling is known even now.
Again, the Rules were changed by agreement in this case to relieve the L.A. City Attorney's Office and Wells Fargo of any obligation to follow many Rules in this case which apply to other lawsuits.
The secrecy agreements and proposed orders define "confidential" to mean what the lawyers say it means. One of the familiar features of secrecy agreements in private litigation is that the definition of exactly what is "confidential" is always what the lawyers say it is. The agreements do not give much of a definition.
What guidance the agreements do give on what is going to be "confidential" in the present case is certainly not based on judges' decisions in past cases. The agreements and proposed orders generally say that "confidential" means simply whatever evidence the lawyers choose to mark with the word, "confidential." This includes documents and testimony in all such cases.
In the case of People of California v. Wells Fargo, a judge signed a proposed order which made this proposed agreement into the judge's ruling. The February order validating the January secrecy agreement was likely written by the bank. The judge did not rewrite it. To the contrary, she took the proposed order, crossed out the word, "proposed," and signed it. At that point, the stipulation that lawyers wrote became the judge's ruling.
The February order which validates the January secrecy stipulation in the People of California v. Wells Fargo case continues down the foggy road of secrecy by adding that "confidential" means any documents or testimony that a party (including its lawyers) "believes in good faith ... is entitled to confidential treatment under applicable law."
This includes giving the bank and the L.A. City Attorney in that case "the right to designate as 'Confidential'" any "non-public information," including documents and testimony.
There is no such thing in the Rules as "non-public information." The Rules do not even use that term. Making "non-public information" mean the same thing as protected "confidential" evidence makes it clear that the parties in this case were rewriting the Rules for their own use and, intentionally or not, keeping the evidence away from the eyes of the public.
The people writing the secrecy stipulations in these cases removed any requirement that concealment depends on "good cause shown." As we have previously discussed on this blog, participants in civil lawsuits in most courts in the United States, including in California, can ask a judge to protect them from such things as annoyance, embarrassment, oppression, or undue burden or expense. However, they cannot ask a judge to protect them under any of the Rules from "non-public information" that may find its way into documents and testimony just because the "information" is "not public," as the participants in the People v. Wells Fargo lawsuit wrote here.
Rather, as we have already seen, the Rules generally governing civil litigation require a party withholding documents during discovery to show "good cause" not to disclose them. Judges ordinarily rule that the party withholding evidence during litigation has to show that the evidence is privileged or protected from disclosure in some legally recognized way. Trade secrets "or other confidential research, development, or commercial information" are examples. "Non-public information" is not.
Over all, the stipulation adopted by a judge's order in February, 2016 in People v. Wells Fargo lines up behind many other secrecy stipulations and orders used in many other jurisdictions. It restricts the use of any evidence marked "confidential," to the lawsuit in which the stipulation is filed. It provides that such evidence may not be used for any other purpose "whatsoever." This was pretty obviously intended to be taken literally. It would mean that the only people who can use evidence marked "confidential" in the People of California v. Wells Fargo case in California are the people involved in that case. No-one else can ever use it, or even see it. Even the people involved in the case named People of California v. Wells Fargo cannot use such "confidential" evidence anywhere else.
So, perhaps it is wrong, after all, to assume without evidence that the L.A. City Attorney's Office shared Wells Fargo's forbidden special interrogatory answers with the federal agencies, or with anyone else. This is a much more certain way of keeping a secret than asking a judge to apply the law.
In the names of the Bank and of the People, the parties to this case made "competitively sensitive" documents, testimony, and information all secrets they could keep without admitting that any of it was really "competitively sensitive." By grafting the concept of keeping "competitively sensitive" secrets to the overall idea of court protection, the parties rewrote the Rules to benefit themselves, or perhaps more accurately, one of them did and the other agreed to it. The Rules say nothing about keeping evidence from the public because the evidence might be "competitively sensitive," of course.
What evidence Wells Fargo may have had in the People of California v. Wells Fargo lawsuit is something we may never know. Wells was granted the "right" in this case by this stipulated secrecy order to conceal whatever it knew.
When the judge signed this stipulation into an order, Wells Fargo's "right" became a ruling and not just an agreement.
Under Secrecy agreements and Secrecy orders like the ones in this case, what was marked "confidential" stays "confidential" even if it is put in front of the judge. California Rules of Court 2.550 and 2.551 were written to cover the case of what evidence can be sealed and how someone can go about asking a judge to seal that evidence. However, neither of these Rules applies to the evidence exchanged between the parties as a lawsuit goes forward, which again is called discovery.
Under the law of discovery, everybody else drops the argument that they have a "right" to conceal evidence, once they argue that previously concealed evidence is a part of their case. This includes when they give the judge the evidence they previously marked "confidential" in an effort to get a favorable ruling from the judge on one of their motions.
Secrecy agreements and their secrecy orders like the ones in this case make the exchange of evidence during litigation more of a joint exercise in concealment than a concerted effort at discovering the truth, or at least discovering evidence. Using these agreements and orders, people can show concealed evidence to a judge, but not to the public, just by putting the evidence into an envelope marked "CONFIDENTIAL--FILED UNDER SEAL PURSUANT TO PROTECTIVE ORDER AND WITHOUT ANY FURTHER SEALING ORDER REQUIRED." This simply could not be done without the secrecy agreements and their orders rewriting the Rules.
Keeping control over the evidence marked "confidential." The secrecy stipulations in this case, and the January, 2016 agreement in particular, were also written to keep control of the "confidential" evidence after the case was over. The January stipulation provides that it shall always be "binding" unless the party that designated the evidence as confidential, or a judge, says otherwise.
It apparently was not enough to make the January stipulation in this case endless, however, even after it became a judge's order in February, 2016. The agreement and its order also add a provision typically found in secrecy stipulations-turned-into-secrecy-orders in many other cases, to the effect that once the case ends, "confidential" evidence must either be returned to the party that designated it "confidential," or it must be destroyed. In short, the people that possess the evidence marked confidential are required to give it up at the end of that case. They cannot make the evidence public. The evidence can only be used for that one case. When that one case ends, then the way that the thinking goes behind the secrecy here, there is no longer any reason to hold onto the evidence. The public has no interest in it, according to the lawyers who write these agreements, it seems, and the public seemingly has no dog in this fight either, according to the judges who enable this behavior by validating these secrecy agreements.
 Stipulation and Protective Order ¶ 1.c., at page 1, entered and filed on February 2, 2016 in People v. Wells Fargo & Co., Case No. BC 580778 (Los Angeles County Superior Court).
 Id., ¶ 2, at page 2.
(b) The court, for good cause shown, may make any order that justice requires to protect any party or other person from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense.
 Federal Rule of Civil Procedure 26(c)(1)(G).
 Stipulation and Protective Order ¶ 9, at page 6, entered and filed on February 2, 2016 in People v. Wells Fargo & Co., Case No. BC 580778 (Los Angeles County Superior Court).
 See id., ¶ 11.a, at p. 6.
 Id., ¶ 18, at p. 8.
 Id., ¶ 21, at p. 8.
 Id., ¶ 22, at p. 9.
THE NEXT INSTALLMENT: BANK DEREGULATION GROWS MASSIVE "CROSS-SELLING CLAIMS."
This is the second of three articles in a series revealing secret financial and credit practices that affect us all.
"Cross-selling" or selling new products to existing customers has been called "the core of modern-day banking[.]" Wells Fargo in particular led the way in cross-selling "mortgages, credit cards and auto loans," thereby saving all the costs of acquiring new customers which would have to be incurred before the bank would even have the opportunity to sell them additional products.
A reporter, E. Scott Reckard, broke the story of what went wrong when he reported in a newspaper article that in order to meet their sales quotas, Wells Fargo employees opened accounts and ordered credit cards for customers that the customers did not request, did not need, and did not even know about.
Mr. Reckard's reporting was based, as he himself wrote, on reviewing "internal bank documents and court records" and interviewing "28 former and seven current Wells Fargo employees who worked at bank branches in nine states, including California." Even a casual reader would also have taken note that the article mentioned at least 10 lawsuits against Wells Fargo as a result of the "cross-selling" quotas Wells imposed on its employees and inflicted on its customers.
The complaint filed by the City Attorney's Office against Wells Fargo in May, 2015 alleged essentially the same things that were reported in the newspaper a year-and-a-half before.
Administrative actions opened by two federal agencies, the Consumer Financial Protection Bureau ("CFPB") and the Office of the Comptroller of the Currency ("OCC"), were similarly based on what was reported in the newspapers.
Both of these federal agencies opened their administrative actions with "Consent Orders" in which they announced their respective settlements with Wells Fargo.
In the settlements in September 2016, Wells Fargo only put numbers on "unauthorized deposit accounts" and "unauthorized credit cards," however. According to Wells Fargo in late 2016, 1,534,280 deposit accounts were opened at Wells Fargo in the names of Wells customers that had not authorized them, between May, 2011 and July, 2015. The Wells Fargo customers had no idea that this was happening. It was all done in secret.
Continuing to put numbers on some of these practices, Wells Fargo also told the regulators in September 2016 that "roughly 85,000 of those accounts incurred about $2 million in fees, which [Wells Fargo] is in the process of refunding."
Wells Fargo was to say later that even more of its customers may have been affected. Wells wrote later that its internal investigation and reform of cross-selling practices "could lead to, among other things, an increase in the identified number of potentially impacted customers."
Second, Wells Fargo also informed the regulators that there were 565,443 credit card applications supposedly made by Wells Fargo customers. Wells's customers did not actually authorize those credit card applications. At the time the credit card applications were made, hardly any of Wells's customers knew what was going on.
Later, after the settlements of September 2016 with the regulators were all final, Wells announced that it had found another possibly 1 million to 1.5 million more fake accounts, for a total of approximately 3.5 million sham accounts, "a nearly 70 percent increase over the bank's initial estimate" which it had previously stated to the government agencies before it settled with them.
In September 2016, Wells Fargo agreed with the three government regulators -- the L.A. City Attorney's Office, the CFPB and the OCC -- to pay a total of $185 million in fines and penalties. As one person described it: "Wells is paying what amounts to a couple of parking tickets for each of the 1.5 million accounts."
In a somewhat unusual twist, the information available to the public about Wells Fargo's conduct in this matter was essentially what was reported in the newspapers in the first place. Wells Fargo did not admit to any wrongdoing in any of its settlements. Wells Fargo did not admit to any wrongdoing in its settlement with the Los Angeles City Attorney, or with the CFPB, or with the OCC.
The allegations that the government regulators made against Wells Fargo tell nothing apart from what was already in the newspapers. The unusual fact of these settlements is that the alleged perpetrator admitted anything.
However, the City Attorney's Office, at least, had more evidence against Wells Fargo. Presumably, the City Attorney's Office would have been willing to extend professional courtesy to the CFPB and OCC and share the evidence. That would have given evidence against Wells Fargo to two federal agencies investigating Wells Fargo in this matter as well as the City Attorney.
We do not know for certain whether the City Attorney shared the evidence. Nor do we know what the evidence was. It was kept secret. The City Attorney agreed with Wells Fargo to keep the evidence secret. The City Attorney and Wells Fargo further agreed to ask a judge to approve their secrecy agreement.
The court's electronic docket is a record of everything that was filed in the case. These events are all listed on that record, such as Wells Fargo's motion to keep its interrogatory responses (written questions with written answers) a secret in June, 2016. On the other hand, none of the actual materials is publicly available from the court. The author has sent EMails to the City Attorney's Office requesting copies. As of the date of this publication, the author has received copies of two Stipulations and two Protective Orders approving them in the case. One of the orders was entered on February 2, 2016, and the other order was entered on June 14, 2016. Wells Fargo and the City wrote some of their own rules of procedure especially for themselves particularly on the subject of keeping evidence secret in this case.
It is reasonably certain that Wells Fargo was served with written questions to which it would ordinarily be required to respond. In the Los Angeles City Attorney's case, the questions came in special interrogatories.
No-one outside of the City Attorney's Office and Wells Fargo, perhaps, knows much about what was in the special questions that the City Attorney served on Wells Fargo in this case. The City Attorney's special interrogatories must have been very "special." These questions were specially crafted by the City Attorney's Office to serve on Wells Fargo in this particular case.
Both sides agreed on keeping much of the evidence a secret. Both sides presented the proposed order to the judge. Both sides asked the judge to sign it.
The City Attorney's Office and Wells Fargo agreed a second time on keeping the evidence secret. It may be that Wells Fargo was not convinced that the February Secrecy Order went far enough to keep all of the evidence secret. For whatever reason, both sides again agreed on keeping evidence a secret, both sides presented another proposed secrecy order to the judge, and both sides asked the judge to sign this one, too. She did. Again without changing anything that was proposed to her.
The agreements and the secrecy orders are not available in the Court file. The author received copies only because the City Attorney's Office provided me with copies of the orders, which no-one can make sense of without having the stipulations too, since the orders did nothing more than approve the stipulations and make them the judge's rulings.
In fact, nothing in the Court file is available that was filed after August, 2015. It is a fact nonetheless that various documents were filed with the Court in that case from August, 2015 until the case was closed thirteen months later with a judgment agreed upon by the parties.
We do not know what Wells Fargo said or how Wells Fargo answered the questions. Instead, first Wells Fargo asked for confidentiality of its answers and then the City Attorney stipulated to keep this evidence a secret.
The author could not access the motion on the Court's electronic docket, as noted. The City Attorney's Office sent me copies of the orders and stipulations, but they did not send me copies of Wells Fargo's motion or of Wells Fargo's answers to the special interrogatories, either. They believed that they could not make Wells's motion publicly available since it might be different from the copy that Wells filed in the Court file. This is certainly a pickle, to say the least. Needless to say, perhaps, but the L.A. City Attorney's Office also refused to make Wells Fargo's answers publicly available including to the author.
To be continued later this week with THE FINAL INSTALLMENT: BANK DEREGULATION GROWING MASSIVE "CROSS-SELLING CLAIMS."
 See Michael Corkery, "DealBook / Wells Fargo Fined $185 Million for Fraudulently Opening Accounts" (New York Times Online posted September 8, 2016).
 "In May, 2015, following an extensive investigation precipitated by this [December, 2013] report in the Los Angeles Times, the Office of City Attorney Mike Feuer sued Wells Fargo over allegations of opening unauthorized accounts." Press Release by Mike Feuer, Los Angeles City Attorney, "Protecting Consumers" (undated), available online at http://www.lacityattorney.org/allegations-against-wells-fargo.
 There were a few scattered news reports that the OCC was investigating Wells Fargo, along with the Federal Reserve, another agency of the federal government. There was also rank speculation that if other federal agencies were investigating Wells Fargo, then the CFPB might also be investigating Wells Fargo. There were no details offered in any of these news reports. See, e.g., Dan Freed, "U.S. Regulators Probe Wells Fargo Sales Practices - WSJ" (Reuters Online, posted at www.reuters.com on Monday, November 30, 2015); Catherine Phillips, "Wells Fargo Faces Federal Investigation Over Sales Tactics" (posted in the "Northern Californian," posted on Tuesday, December 1, 2015 at www.northerncalifornian.com/local/california); "Wells Fargo's Sales Tactics Are Reportedly Under Investigation" (posted by Bay Area News Group online at www.bayareanewsgroup.com, on Tuesday, December 1, 2015).
 See the OCC's "Statement Regarding Revocation of Relief to Wells Fargo Bank, N.A., from Certain Regulatory Consequences of Enforcement Actions," dated November 18, 2016, posted online at www.occ.gov/topics/laws-regulations/enforcement-actions/statement-wellsfargo-111816.pdf. This "Statement" was not easy to find and, to the author's knowledge, it will not be found anywhere else, other than online on the OCC's website.
 Consent Order signed September 4, 2016, filed September 8, 2016, in In re Wells Fargo Bank, N.A. (United States of America Consumer Financial Protection Bureau Administrative Proceeding No. 2016-CFPB-0015, paragraph 16 on page 5. The Consent Order is available online at http://files.consumerfinance.gov/f/documents/092016_cfpb_WFBconsentorder.pdf .
 Laura J. Keller, "Wells Fargo Warns it May Find More Clients Bilked" (Bloomberg News posted on March 2, 2017), quoting an unidentified Wells Fargo "annual regulatory filing."
 Stacey Cowley, "DealBook / Wells Fargo Review Finds 1.4 Million More Suspect Accounts" (New York Times Online, August 31, 2017). In addition, see, e.g., James Rufus Koren, "Wells Fargo May Have Created 1.4 Million More Unauthorized Accounts Than We Thought, Attorneys Say" (Los Angeles Times Online, May 12, 2017); Kartikay Mehrotra and Laura J. Keller, "Wells Fargo's Fake Accounts Grow to 3.5 Million in Suit" (Bloomberg.com, May 12, 2017); Brian Tayan, "The Wells Fargo Cross-Selling Scandal" (Harvard Law School Forum on Corporate Governance and Financial Regulation, posted on December 19, 2016), available at https://corpgov.law.harvard.edu/2016/12/19/the-wells-fargo-cross-selling-scandal.
 The author takes sole responsibility for the calculations in the text; they are his alone. The quote is from Cornell Law School Professor Robert Hockett, quoted by Michael Corkery, "DealBook / Wells Fargo Offers Regrets, But Doesn't Admit Misconduct" (New York Times Online, posted on September 9, 2016).
 [Proposed] Stipulated Final Judgment signed by the City Attorney and by Wells Fargo on September 1, 2016 in People v. Wells Fargo & Co., Case No. BC 580778 (Los Angeles County Superior Court), at ¶ 5 on page 3, & ¶ 49 on page 13.
 Stipulation and Consent to the Issuance of a Consent Order, filed on September 8, 2016 in In re Wells Fargo Bank, N.A. (United States of America Consumer Financial Protection Bureau Administrative Proceeding No. 2016-CFPB-0015), ¶ 2, on page 2.
 September 6, 2016 Consent Order for a Civil Money Penalty in In re Wells Fargo Bank, N.A., OCC #2016-079, at 1; Stipulation and Consent to the Issuance of a Consent Order in OCC No. AA-EC-2016-66, signed by the Wells Fargo Board of Directors and dated September 1, 2016, but signed by the OCC on September 6, 2016, "Article II / Consent," ¶ (1) at p. 2.
 Stipulation and Protective Order entered and filed on February 2, 2016 in People v. Wells Fargo & Co., Case No. BC 580778 (Los Angeles County Superior Court).
 Stipulation signed May 26, 2016 with Order entered on June 14, 2016, filed together on June 14, 2016 in the same case.
 See EMail from the Los Angeles City Attorney's Office to the author, Wednesday, March 1, 2017, on file with the author.
REPORTING CONTRADICTED BY FACTS ON THE GROUND: WOMEN'S MARCH 2019.
I watched and listened to the Women's March yesterday on YouTube. As these words are written, yesterday was Saturday, January 19, 2019.
I am glad that I watched the Women's March on YouTube. As far as my untrained eye could see, it was a big success and there were lots of people marching.
I could see and hear for myself what went on, or at least what was uploaded and televised. On the other hand, if I had waited for the corporate media accounts, I would not know much at all. To read the reporting is the opposite of the photographs of the attendance at the Women's March this year, sort of the opposite of hearing certain huge crowd estimates of the inauguration the day before the first Women's March and comparing those estimates to the actual photographs.
The marchers and the speakers that I saw and heard embraced everyone: Jews, Christians, atheists, agnostics, Black, White, Hispanic, straight people, gay people -- everyone. They were united in their affirmation of democracy and their rejection of autocracy for all people.
They overcame their differences at the Women's March in 2019. Just as they overcame all their differences in 2017 and in 2018.
The corporate media did not overcome their differences, though. They refused to admit their own shortcomings as usual. This year, they buried their accounts deep in their reporting which mostly confirmed their tired and untrue storylines, repeated without a lot of evidence once again. In fact, much of the reporting published after the March looks like it was written before the March.
A Washington Post report estimated the crowd size at 100,000 in the cold and in the shutdown which meant that snow was still on the ground because there were no snowplows to remove it. Supporting marches in dozens of other U.S. cities were called "parallel marches." See Ashraf Khalil, Associated Press / A Scaled-Down, But Still Angry, Women’s March Returns, published in The Washington Post Online, January 19, 2019.
For an alternative example, The New York Times report repeated its previous storylines and led with a new claim, which was that crowds appeared to be smaller than at the first March in 2017. However, the Times avoided reporting any crowd estimates. At least the NYT report noted that turnout increased as the morning went on. Supporting marches in other U.S. cities were reported as "rival marches." See Michael Wines and Farah Stockman, Smaller Crowds Turn Out for Third Annual Women’s March Events, New York Times Online, January 19, 2019.
Thank the good Lord for the evidence of our own senses. Thank the good Lord for the Women's March for democracy for all of our country's people.

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