Would the Middle Class have been Destroyed if Courts had allowed borrowers their constitutional Right to a Jury Trial?

Thomas Jefferson

Thomas Jefferson


For most of our history lawyers have thought of themselves as the unofficial fourth “arm” of the government. Hurst, pp. 598-601. This view is more understandable from lawyers’ past role as “trial advocates”; than from the present relationship between the bench and bar, which reduces the significance lawyers have with regard to the administration of justice.


Under  the law in effect in most colonies at the time our Constitution was written, lawyers were advocates who had the right to argue the merits of their client’s cases directly to a jury.  Juries, not judges, had the right to decide most cases as they saw fit both with regard to the facts and law. “In 1789, juries occupied the principal place in the administration of justice. They were frequently in both criminal and civil cases the arbiters not only of fact but of law.” Galloway, at 399.

The King’s denial of the right to a trial by jury was one of the reasons  stated by the colonists in the Declaration of Independence  justifying separation from England.

Many believed the right to a jury trial was not adequately guaranteed in Article III, § 2 of the Constitution.  Anti-federalists urged rejection Constitution unless it was amended to include a Bill of Rights, which secured the right to trial by jury in both criminal and civil cases.  Patrick Henry, a lawyer and well known patriot at that time argued: “Trial by jury is the best appendage of freedom. . . . No appeal can now be made as to fact in common law suits. The unanimous verdict of impartial men cannot be reversed.”  This result was not because the jury would always be right, but because the result the result came from impartial members of the community.

Significantly, our constitutional history shows jury trials were intended to be a structural check on the power of the judicial branch to resolve disputes involving citizens’ liberties and properties.  In this regard, Thomas Jefferson wrote:  “I consider trial by jury as the only anchor ever yet imagined by man, by which a government can be held to the principles of its constitution.”

Over the years judges appeared to forget (or decided to ignore) the fact that trials decided by a jury, rather than the sovereign’s judges, was a constitutional mechanism intended to keep the administration of law by the Judicial Department consistent with the wishes and feelings of the community. Wolfram,at 671-672.  The framers of our Constitution contemplated that juries could reach a result that a judge could or might not decide.  Juries were there to provide “protection for litigants in general, and for debtors in particular…” Parklane Hosiery Co., Rehnquist dissent, at 344, note 11 citing Wolfram.

By mid-twentieth century, the right to a trial by jury was under continual attack by judges. In 1941 Justice Hugo Black, joined by Justices Marshall and Murphy, complained in their dissent in Galloway that the “gradual process of judicial erosion … has slowly worn away a major portion of the essential guarantee of the Seventh Amendment.”  Id.

A little more than three decades later, Justice Rehnquist dissenting in Parklane Hosiery Co. echoed these same words, quoting Hugo Black.  Rehnquist, who was not known for being a liberal justice, question whether the right to a jury trial had been gutted to the extent it no longer provided a constitutional check on the power of the judicial branch of government.

The majority in Parklane was not moved as it unabashedly observed that it frequently engage in rule making which resulted in court rules which interfered with access to jury trials.  Parklane, at 336.

“[M]any procedural devices developed since 1791 that have diminished the civil jury’s historic domain have been found not to be inconsistent with the Seventh Amendment. … (directed verdict does not violate the Seventh Amendment); … (retrial limited to question of damages does not violate the Seventh Amendment even though there was no practice at common law for setting aside a verdict in part); (summary judgment does not violate the Seventh Amendment).

Early on in this century  the Supreme Court continued to wage war against the constitution’s guarantee to a jury trial in civil cases.  In  Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal the Supreme Court held that trials (jury or not) were not necessary where a federal judge did not find the allegations of a plaintiff’s complaint “plausible”.  The word “plausible” is problematic to some because it implies a “judge-centric” subjective standard, as opposed to the more objective one it replaced.

The Supreme Court’s grant of pretty much unfettered discretion to federal judges to dismiss cases based on each judge’s belief that a complaint is not “plausible” has been heavily criticized by some state supreme courts and academic commentators.  For example, Stephen B. Burbank and Stephen N. Subrin in an article entitled “Litigation and Democracy: Restoring a Realistic Prospect of Trial” criticize the new “plausibility” standard not only because it is not consistent with the Seventh Amendment, but also because the Supreme Court changed “motion to dismiss procedure” by judicially interpreting the rule.

By claiming to merely interpret the meaning of Federal Rule of Procedure 12(b)(6) (which, if true, would have violated the principle of stare decisis), the Supreme Court bypassed the rule-making process for creating rules of procedure.   By doing so, a majority of the court bypassed any notice and comment to the bar with regard to this change in procedure.  More importantly, the Courtdeprived Congress of the opportunity to review, and if necessary to block, any prospective policy choices before the rule became effective.  Id.

Iqbal/Twombley announces to the Bar, as well as Congress, that this Supreme Court will not be deterred by those constitutional checks by which our framers intended to deter abuses by the judicial department.  This disdain by the Court for any check on the power of the Judicial Department has been felt most acutely today by the poor, middle, and upper middle class which do not have the resources to litigate or resist litigation.

In 2011 the Federal Judicial Center commissioned a report to determine the effect of Iqbal/Twombley on dismissals.  With regard to borrowers and homeowners the effects of these decisions appeared devastating.  Over 91% of complaints dealing with financial instruments were dismissed based on the “plausibility” standard.  Id, Table 4, p. 14. Significantly, this percentage includes only those complaints filed by lawyers.  If pro se complaints are factored in (and there would have been a lot of them) federal judges likely would have dismissed close to 100% of borrowers/homeowners’ complaints against the lending industry based on Iqbal’s “plausibility” standard.  Such a high dismissal rate seems implausible itself given the plethora of studies and settlements, which substantiate that most county land filings are wrong and, in many cases, illegal.  See e.g. Foreclosure in California: A Crisis in Compliance

It is difficult for most of us (lawyer and lay person alike) to understand why the rest of the world knows of lender/servicer illegal misconduct (by way of Congressional Investigations, case settlements, and anecdotal reports) and yet federal judges still do not believe complaints by borrowers and homeowners alleging this same documented conduct are plausible.

Those few cases which have been tried before a jury suggest that, unlike judges, juries would have no trouble finding lender/servicer conduct actionable and awarding large damages to injured homeowners.

Now, of course, there will be those that will attribute these large verdicts to juror fallibility; but more likely they reflect deep public outrage.  It is these types of verdicts which our founders foresaw would prevent this type of crisis from occurring.  While the rich may have undue influence over public officials and judges; their influence over a jury will be determined by the facts which are presented to these impartial people.

Our founders were smart.  In hindsight, they seem a lot sharper than those judges who have tried so hard to avoid the common sense of the average American.  Had there been a likelihood in 2008 that most cases of this type would be tried to a jury, with the possibility of the multi-million dollar verdicts against the lenders, this crisis would have over before it began.  Instead, we now have the next wave of vultures purchasing toxic debt which the expect the courts to enforce to the detriment of society.

The Constitution contemplated that jurors might make mistakes, and that it they did such mistakes would accrue to the common good.  This, of course, would have been the case if America had avoided the devastation of its communities, which was a proximate cause of judges refusing to follow the constitution and allowing citizens their right to a trial before a jury of their peers in civil cases.


Article Summary
Article Name:
A Proximate Cause of the Current Foreclosure Crisis
Author: Scott E. Stafne, JSD
Over the years judges appeared to forget (or decided to ignore) the fact that trials decided by a jury, rather than the sovereign’s judges, was a constitutional mechanism intended to keep the administration of law by the Judicial Department consistent with the wishes and feelings of the community. - The framers of our Constitution contemplated that juries could reach a result that a judge could or might not decide. Juries were there to provide “protection for litigants in general, and for debtors in particular…”
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About Scott . Stafne

Mr. Stafne is very experienced in property rights, including banking wrongs and foreclosure prevention; Constitutional Law (under the United States and Washington State Constitution); Appellate law; land use law; personal injury law. Scott has recently become a media focal point as his win record of foreclosure defense cases against the largest financial institutions, servicers, trustees as well as MERS have blazed the trail toward ending the foreclosure crisis and representing the rights of the homeowner above the profits and secret dealings of corporations.   Scott sees law as a foundation for establishing a system of twenty first century liberties for the people; and for removing that corruption of power within our government which makes the achievement of real purpose beholden to only money.   Scott Stafne has been an attorney since graduating from the University of Iowa in 1974. He worked for a large law firm in Indianapolis (Baker & Daniels) for two years. Thereafter, he moved to Seattle Washington in order to obtain a Masters of Law degree from the University of Washington, which he obtained in 1977. Scott practiced law while going to graduate school and has practiced ever since.   This is a personal blog, and does not constitute legal advice in any form, and is not necessarily reflective of the policies or opinions of Stafne Law Firm. Visit the Law Firm: https://stafnelaw.com Visit the Google+ Page: https://plus.google.com/+ScottStafne Visit the Facebook Page: https://www.facebook.com/scott.stafne.75   *Web Developer: David J. Posel
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