Jesinoski Update: TILA Rescission in a Post-Jesinoski World

Introduction

A little over one year ago, the US Supreme Court issued its ruling in Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (2015), which resolved a circuit court spit regarding how a mortgage borrower may exercise the right of rescission under the Truth-in-Lending-Act (TILA).

The right of rescission provided by TILA(15 USC. sect; 1635) gives borrowers an extended right to rescind within three years if the lender has failed to provide to the borrower either the notice of rescission or accurate material disclosures.

Prior to Jesinoski, there was a circuit court split regarding whether, in order to exercise the extended right of rescission, borrowers only had to provide written notice of rescission or file a lawsuit within the three-year deadline.

The Supreme Court in Jesinoski found that Section 1635 le[ft] no doubt that rescission is effected when the borrower notifies the lender of his intention to rescind, and that so long as [a] borrower notifies [the lender] within three years after the transaction is consummated, the rescission is timely. The Supreme Court noted that [n]othing in [TILA] suggests that a borrower need also file a lawsuit within th[e] three year period and rejected the argument that written notice of rescission does not suffice if the lender disputes the availability of the rescission remedy, finding Section 1635 of TILA draws no distinction between disputed and undisputed rescissions.

While conclusively determining that rescission may be affected upon written notice, Jesinoski left open a number of issues regarding how rescission operates in practice after notice of rescission is provided. Subsequent cases have provided some clarity with respect to this.

Timing of Rescission Process

Among the issues left open by Jesinoski is how the timing of the rescission process works. Section 1026.23(d) of Regulation Z, which implements TILA, provides that upon rescission: (1) the security interest giving rise to the right of rescission becomes void and the borrower has no liability for any amount, including any finance charge; (2) within 20 calendar days after receipt of a notice of rescission, the creditor must return any money or property that has been given to anyone in connection with the transaction and shall take any action necessary to reflect the termination of the security interest; and (3) when the creditor has complied with the requirements outlined in (2), the borrower must tender the money or property to the creditor (or, where the latter would be impracticable or inequitable, tender its reasonable value). It also provides that the procedures outlined in (2) and (3) may be modified by court order.

Prior to Jesinoski, courts in many jurisdictions had exercised discretion in determining whether to require a rescinding borrower to repay the loan proceeds (ie, to tender) before the lender is required to release its mortgage. Cases decided subsequent to Jesinoski have continued to find that a court may require borrowers to produce evidence of an ability to tender as a condition to enforcing rescission.

For example, in Deutsche Bank Natl Trust Co. v. Gardner, 125 A. 3d 1221 (Pa. 2015), the court noted that while the default procedure upon notice of rescission is ordinarily for the lender to take steps necessary to reflect termination of the security interest and to return any property or money given by the borrower before the borrower must tender, Section 1026.23(d) empowers the court to alter or reorder the procedure of the rescission. The court held that rescission may be conditioned on tender by the borrower because a debtors inability to tender the funds delivered by the lender would render termination of the security interest inappropriate.

Other courts have held, as some did before Jesinoski, that borrowers can state a claim for rescission without pleading that they have tendered or that they have the ability to tender. See, eg, Obeng-Amponsah v. Chase Home Finance, LLC, 624 Fed. Appx. 459 (9th Cir. 2015).

Rescission in the Bankruptcy Context

Jesinoski also raised concerns for lenders in the bankruptcy context, given the possibility of a bankruptcy court affirming the validity of a rescission without requiring a borrower to tender, and invalidating a lenders mortgage lien as a result (which would in turn benefit unsecured lenders). Subsequent decisions may ameliorate such concerns.

In In re Brown, 538 BR 714 (Bankr. ED Virginia 2015), the court noted that there is a difference between giving notice of rescission and determining whether the loan is properly rescinded and that [g]iving notice of rescission does not . . . mean that the transaction must be unwound, nor does it automatically void the loan or cause the lender to ipso facto forfeit its loan. The court stated that a transaction will not be unwound [i]f a borrower cannot tender [a] rescission payment within a reasonable time, finding that it would be inequitable to allow a debtor to achieve rescission without meeting his tender obligation and thereby reduce the lender to an unsecured creditor.

Another bankruptcy court decision, In re Kelley, 2016 WL 281467 (Bankr. ND Cal. Jan. 21, 2016), similarly found that courts can modify the sequence of events in th[e] rescission process provided by Section 1635 and can refuse to enforce rescission when a borrower lacks capacity to tender.

Defenses to Rescission: Creditors Burden

Jesinoski also left open issues regarding the ability of creditors to assert defenses to rescission claims and their burden with respect to asserting such defenses. One case that touched upon the issue of a creditors defense to rescission claims was Middleton v. Guaranteed Rate, Inc., 2015 WL 3934934 (D. Nev. June 25, 2015). The court in this case rejected the argument that a creditor waves any defense to a TILA claim or lacks standing to defend against one if the creditor fails to file its own lawsuit for declaratory judgment as to the ineffectiveness of the rescission, finding the plaintiffs cite[d] no authority for the proposition that one may waive a defense by electing not to affirmatively seek a declaratory judgment affirming the defense.

Regarding the effect of the TILA statute of limitations on rescission claims and defenses to those claims, Jesinoski did not address whether a borrower must bring an action to remove a recorded lien within TILAs general one-year statute of limitations or whether a lender must comply with any TILA time limitations to return funds paid by a rescinding borrower regardless of whether the borrower brings a lawsuit. At least one post-Jesinoski court decision has provided support for the former. In Jackson v. Bank of America, NA, 2015 WL 5684121 (MD Ga. Sep. 28, 2015), the court found that TILAs one year statute of limitations for violations of rescission under [Section 1635] . . . runs from twenty days after a [borrower] provides notice of rescission, and where a borrower does not file a lawsuit to enforce rescission within this time, the borrower cannot state a viable claim for rescission.

Another post-Jesinoski decision, however, indicates that even when a borrower fails to bring a lawsuit within the TILA statute of limitations, rescission may be effective as a matter of law if the creditor also fails to take action. In Paatalo v. JPMorgan Chase Bank, 2015 WL 7015317 (D. Or. Nov. 12, 2015) the court noted that Jesinoski does not amount to a holding that the process of unwinding a loan is automatic and complete upon a borrowers written notice of rescission. However, the court found that under Section 1635, once notice of rescission has been provided, the creditor must either begin the unwinding process by returning the borrowers money and taking action to reflect the termination of the security interest, or filing a lawsuit to dispute the plaintiffs right to rescind. If neither occurs within the TILA statute of limitations, the court concluded that the rescission and voiding of the security interest are effective as a matter of law as of the date of the notice. Thus, according to this decision, the burden of filing suit is upon creditors if they believe a borrowers rescission is improper or invalid.

Conclusion

Thus far, Jesinoski appears to have had limited impact in modifying preexisting case law regarding issues such as the timeline for rescission, whether borrowers can be required to tender as a prerequisite for enforcing rescission, and a creditors burden with respect to disputing the validity of rescission. Decisions subsequent to Jesinoski have addressed such issues, though none appear to have reversed pre-Jesinoski precedent as of yet. Nonetheless, the Jesinoski decision may still have some future impact in changing prior law regarding the rescission process and a creditors burden in disputing rescission. Though the ultimate ramifications of the Jesinoski decision remain unclear, future decisions will likely continue to provide some clarity regarding how TILA rescission works in the post-Jesinoski world.

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Bunch and Brock, PSC, Attorneys at Law, Release Instructive Infographic Addressing Personal Bankruptcy

Lexington, KY (PRWEB)
January 30, 2016

Bunch and Brock, PSC, a well-known Central Kentucky bankruptcy law practice, has published a new infographic to help educate consumers from across the state about the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Conveying important information in a highly accessible, easy-to-share format, the infographic is a great place to start for those individuals who have questions about personal bankruptcy basics.

“Consumers are bombarded these days with radio, television, online and print ads offering quick fixes for debt relief. We thought it was essential to give people who are struggling with debt the opportunity to inform themselves about how a Chapter 7 bankruptcy differs from a Chapter 13 bankruptcy – and how they each affect property, taxes, student loans, child support and maintenance,” said Bunch amp; Brock, PSC, original founder W. Thomas Bunch, Sr. He added, “We value our community connections, and embrace using this unique way to get useful information out to those who may be overwhelmed and unsure where to turn.”

Accompanied by engaging imagery, the infographic shares facts about common personal bankruptcy causes and the number of consumer bankruptcies filed in 2013. Its primary focus is on explaining how the two main bankruptcy chapters differ from one another. Visually broken down into a user-friendly list, comparisons are made as to the circumstances under which each chapter becomes the preferable option, how long a filing under each chapter stays on a credit report, how often each chapter can be used to invoke protection, and how the debtor’s income is used after filing. Sections are devoted to how each of the two chapters affects exempt property versus non-exempt property as well as the ability to discharge tax debt, student loan debt, maintenance debt and child support debt.

The firms new infographic covering consumer bankruptcy is now live at its website, and those interested may also read about Bunch amp; Brock’s highly personal and dedicated approach to bankruptcy matters.

About Bunch amp; Brock, PSC, Attorneys at Law

For almost four decades, Bunch amp; Brock, PSC, has been one of the Lexington areas most prominent and successful bankruptcy law firms. Long committed to serving the community and recognized with many professional awards, Bunch amp; Brock, PSC, also represent those who need help with legal business matters, estate planning, and trusts. As of January 1, 2016, Bunch amp; Brock, PSC, has incorporated with its family members.

Litigation. Major Russian legislation changes for 2015

1. Adoption and entry into force of the Russian Federation Code of Administrative Procedure dated March 8, 2015, No. 21-FZ

The Russian Federation Code of Administrative Procedure (the Administrative Procedure Code) entered into force on September 15, 2015. It is important that this legal act governs only procedure in the courts of general jurisdiction; disputes arising out of public relationships, which are under the jurisdiction of the commercial (arbitrazh) courts, continue to be considered according to the rules of the RF Commercial Procedure Code. The Code also does not apply to administrative offense cases. Among important disputes that will be considered according to the rules of the Administrative Procedure Code we may note practically all cases challenging regulatory acts (other than cases challenging acts concerning exclusive rights, which are under the jurisdiction of the Intellectual Property Court), cases challenging cadastral valuations, and also cases collecting mandatory payments and penalties from individuals.

We note that in a number of instances the Administrative Procedure Code has combined the most successful legislative solutions contemplated by the effective procedural legislation (the RF Commercial Procedure Code, the RF Civil Procedure Code and the RF Criminal Procedure Code). For example, the Code provides for an alternative procedure for sending administrative statements of claim (by the court or by the plaintiff itself); issues of proof, including with regard to using audio and video recordings, etc., are regulated in considerable detail. The rules on provisional remedies and procedural compulsion are also elaborated on.

At the same time, practitioners also see a number of deficiencies in the Administrative Procedure Code that could make it difficult to apply its provisions. For example, the wording on sending an administrative statement of claim allows for divergent interpretations; there is quite an extensive list of grounds for refusing to accept and for returning an administrative statement of claim.

In addition, we cannot help but note that in light of the overall course of court reform a number of innovations that were initially planned have not been fully implemented. In particular, provisions on establishing additional requirements to representatives (a higher education requirement) are debatable; and the provisions on mandatory audio recording of the court record have not yet gone into effect. The justification for removing the procedure for administrative offense cases from the domain of the Administrative Procedure Code is also questionable, as well as other provisions resulting in dissimilarity of procedural regulation (eg, separate regulation of public-law relationships, which are under the jurisdiction of the commercial courts, terminology that differs from the other procedural codes).

In any event, it is too early to tell whether the Administrative Procedure Code will be successfully applied because the results will be determined to a considerable extent by the interpretation of new provisions of the law developed by law enforcement practice.

2. The adoption of Federal Law No. 382-FZ on Arbitration (Arbitration Proceedings) in the Russian Federation of December 29, 2015

A law reforming the system of arbitration proceedings was adopted and published at the very end of 2015.
One of the key novelties of the law is that it has become considerably more difficult to form arbitration courts. Permanent arbitration institutions can now be created only at nonprofit organizations and will be able to engage in their activity only provided those organizations get the right to act as a permanent arbitration institution granted by an act of the Russian Federation Government. Such an act will be adopted on the basis of a recommendation of the Council on Arbitration Development.

As compared to the Federal Law on Arbitration Courts in the Russian Federation, the new law regulates in more detail the procedure for considering arbitration disputes, changes the procedure for appointing arbitrators, and clarifies the requirements to arbitrators, in particular, by setting an age requirement of 25.

The law expressly provides that the state courts in a number of cases exercise not only oversight, but also provide assistance to arbitration in performing certain functions. For example, a party to arbitration proceedings may file applications with a state court to grant the recusal of an arbitrator or stating that the arbitration court does not have competence; the arbitration court or party to the arbitration proceedings, with the consent of the arbitration court, may file a request for assistance in obtaining evidence, etc., with the competent court.

It is extremely important that simultaneously with this law amendments were made to a number of other legal acts (Federal Law No. 409-FZ on Amendments to Certain Legislative Acts of the Russian Federation and Repealing Article 6(1)(3) of the Federal Law on Self-Regulatory Organizations in connection with the adoption of the Federal Law on Arbitration (Arbitration Proceedings) in the Russian Federation dated December 29, 2015).

Specifically, the relevant amendments are being made to the RF Commercial Procedure Code. For example, Article 33 of the Code, which establishes the rule of special jurisdiction of cases under commercial courts, is being amended. As soon as the law enters into force it will determine the list of disputes that cannot be referred to an arbitration court for consideration.

Rules are also being introduced to the Commercial Procedure Code regulating the procedure for providing assistance to arbitration courts, in particular, concerning the fulfillment of requests to obtain evidence, to consider matters of the recusal, appointment and dismissal of an arbitrator.

Similar amendments connected with the reform of arbitration procedure are being made to the Russian Federation Civil Procedure Code, as well as to the Law on International Commercial Arbitration and other regulatory acts.

Both of the above-mentioned laws enter into force on September 1, 2016.

3. Amendments to the Federal Law on Insolvency (Bankruptcy) in the Russian Federation about personal bankruptcy

Federal Law No. 154-FZ on the Regulation of the Specifics of Insolvency (Bankruptcy) on the Territories of the Republic of Crimea and the City of Federal Significance Sebastopol and Amendments to Certain Legislative Acts of the Russian Federation of June 29, 2015 amended the Federal Law on Insolvency (Bankruptcy) in the Russian Federation. Paragraph 1.1 regulating the procedure for personal bankruptcy in detail was introduced to the Bankruptcy Law.

These amendments entered into force on October 1, 2015, and, thus, as of that date it became possible for individuals who do not have the status of sole proprietor to be declared bankrupt.

The process of personal bankruptcy consists of two main procedures: debt restructuring and sale of property. The process of selling property starts if the commercial court renders a decision declaring the person bankrupt. A third procedure is also provided for: the amicable settlement agreement.

It has been determined that a debtor may also file a bankruptcy petition, and formally an individual is not only entitled but also required to file a petition themselves if they meet the relevant bankruptcy criteria.

Any creditor may also file a petition; however, generally to do this the creditor needs a court decision that has entered into force, and the debt amount must be at least RUB500,000. Some creditors may file a petition even without a court decision, such as banks under loan agreements, and also creditors under monetary obligations which the debtor acknowledges but is not discharging, etc.

The bankruptcy procedure itself can impose quite serious restrictions on the debtor. For example, the individual is required to provide a financial manager, at its request, with any information about the individuals assets, the location of those assets, the makeup of the individuals obligations, creditors and other information relevant to the personal bankruptcy case within 15 days of receiving the request. If the individual is declared bankrupt, the court may issue a ruling temporarily restricting the persons right to exit Russia.

When selling the individuals assets, the financial manager manages the individuals funds on accounts and deposits with lending institutions in his or her name, and also handles cases concerning his or her property rights in the courts. That said, the individual is required to hand over all of their bank cards to the financial manager not later than one business day after the decision declaring him or her bankrupt is rendered.

Once the bankruptcy procedure is over, the debtor is released from further settlements with creditors. However, this rule has a number of exceptions such as, for example, personal debts, debts over the application of the consequences of invalid transactions challenged on the basis of the bankruptcy law, etc.

It is important that almost immediately after the law entered into force Resolution No. 45 of the Plenum of the RF Supreme Court on Certain Issues Connected with the Introduction of Procedures Applicable in Cases of Personal Insolvency (Bankruptcy) of October 13, 2015 was adopted. That resolution clarifies many arguable points that may arise in connection with considering personal bankruptcy cases.

4. The adoption by Federal Law No. 409-FZ of December 29, 2015 of the new version of Article 225.1 of the RF Commercial Procedure Code with respect to the arbitrability of cases in corporate disputes (the amendments enter into force as of September 1, 2016)

The new version of Articles 225.1 and 33 of the RF Commercial Procedure Code are worthy of separate attention as part of the reform of arbitration proceedings. The clarifications made are intended to resolve an issue that has provoked many disputes: the issue of whether it is permissible to refer corporate disputes to an arbitration court.

Lawmakers have approached the issue of the arbitrability of such disputes on a case-by-case basis. On the whole, a general rule is provided that it is possible to refer them to an arbitration court; however, a number of disputes are expressly prohibited. For example, the following disputes cannot be referred to an arbitration court:

disputes related to challenging non-regulatory legal acts, the actions and decisions of public-law authorities (and quasi-public bodies which have certain authorities), and the activity of notaries to certify transactions involving participatory interests;

  • disputes over convening a general meeting of participants of a corporation;
  • disputes over excluding participants of legal entities;
  • disputes concerning the activities of strategic business entities;
  • disputes related to the acquisition and purchase of shares by a joint stock company and the acquisition of more than 30 percent of the shares of a public joint stock company.

In addition, for the majority of disputes (other than disputes over the ownership of shares and participatory interests of a corporation and disputes related to the activity of securities holders registrars), the possibility of referring a corporate dispute to an arbitration court for resolution is dependent on complying with a number of terms and conditions.

Firstly, the parties to the arbitration clause must be the legal entity itself, all of its participants, and also all other participants of a specific corporate dispute. Secondly, only a permanent arbitration institution with its seat of arbitration in Russia which, in addition, has adopted and published on its website special rules for adjudicating corporate disputes may be an arbitration court.

It is important that the amendments are intended to eliminate the previous uncertainty and ambiguity of court practice on this issue. Also, the possibility of using arbitration proceedings for business participants was expanded, and special rules and restrictions were provided by lawmakers and intended to eliminate abuses in that area.

5. The adoption of new rules for out-of-court debt collection via a notarys writ of execution (Federal Law No. 391-FZ on Amendments to Certain Legislative Acts of the Russian Federation of December 29, 2015)

Starting December 29, 2015 new rules have applied in the Russian Federation for the collection of debt, recovery of property and out-of-court foreclosure on collateral on the basis of a notarys writ of execution. These amendments were made to the legislation by Federal Law No. 391-FZ on Amendments to Certain Legislative Acts of the Russian Federation of December 29, 2015.

It is important that in Article 12 of the Federal Law on Enforcement Proceedings amendments have been made classifying any notarys writ of execution as an enforcement document, while the previous version could be interpreted as treating only a notarys writ of execution for foreclosure on mortgaged property as such a document.

As compared to the regulation that was previously in effect, the procedure for obtaining the writ of execution is now described in more detail. In order to do this the recoveror needs to submit to the notary such documents as an estimate of the debt under monetary obligations, a copy of the notice of debt sent to the debtor at least 14 days before applying to the notary, and a document confirming that the notice was sent. If performance of an obligation is dependent on an event or a deadline occurring, then the recoveror also needs to submit confirmation that the event has occurred or the deadline has fallen due.

The notary is required to tell the debtor about a writ of execution not more than three days from when it was made. The content of the writ is also regulated in more detail. For example, in addition to the name and address of the recoveror and the debtor, the following information must be stated for those persons: if it is a legal entity, then the physical address, main state registration number, date of registration and taxpayer identification number; however, if it is an individual, then the recoverors passport data and, if such information is available, the debtors passport data and place of work.

Now it is no longer required to submit an extract from the unified state register of rights to real estate and transactions in order to make a writ of execution to foreclose on mortgaged real estate.

It is important to note that according to the amendments to the Federal Law on Enforcement Proceedings, now it is not mandatory to have an agreement on out-of-court foreclosure on mortgaged property to initiate enforcement proceedings on the basis of a notarys writ of execution.

Thus, considering the amendments that have been made, the possibilities of using a notarys writ of execution as a tool for out-of-court collection of debt, recovery of property or foreclosure have been considerably expanded. At the same time, the very procedure of making the writ of execution has been regulated in more detail.

6. A new basis for relief from the burden of proof in the Russian Federation Commercial (Arbitrazh) Procedure Code: confirmation of the facts by a notary when a notarization has been done

Federal Law No. 391-FZ of December 29, 2015 introduced to Article 69 of the RF Commercial Procedure Code (grounds for relief from the burden of proof) a part five, according to which facts confirmed by a notary if a notarization has been done do not need to be proved, if the authenticity of the notarized document has not been refuted by filing an application concerning falsification of evidence, or if the notarization has not been canceled according to the procedure of Chapter 37 of the RF Civil Procedure Code (consideration of statements of completed notarizations or refusal to complete them). The law entered into force on December 29, 2015.

The establishment of a new ground for relief from the burden of proof, a notarys confirmation of the relevant fact if a notarization has been done, is a legislative reinforcement of the presumption that a notarization is credible. This presumption is contained in the Basic Principles of the Latin Notary System and the notary community has long and actively promoted its enshrinement in the Russian legislation. As a result, on January 1, 2015, a similar provision was introduced to the RF Civil Procedure Code (Article 61(5) of the RF Civil Procedure Code), and one year later the new ground for relief from the burden of proof appeared in the RF Commercial Procedure Code.

When analyzing Article 69(5) of the RF Commercial Procedure Code, first of all one should note the limits of evidentiary effect of the notarization. Based on a literal interpretation of the law, the parties are relieved from proving all circumstances confirmed by a notary if a notarization has been done.

Nevertheless, in our opinion, the literal interpretation of that provision of law is questionable, and in future we should expect clarifications from the higher courts and, first of all, from the RF Supreme Court on limiting the scope of facts confirmed by a notary which the parties can be relieved from proving.

The literal interpretation of this provision of the law is flawed because, when doing a notarization the notary confirms many facts, but not all of them should be considered circumstances that do not need to be proved.

The circumstances which the parties are relieved of proving should only include those facts that were personally witnessed by the notary as a qualified witness, in particular:

  • the date and place where the act was drawn up;
  • the fact that the parties were present, their identities, the fact that they signed the document;
  • the fact that the parties made certain statements;
  • the fact that amounts of money, things and other property were transferred.

It is important to note that these circumstances do not need to be proved either in court proceedings in which the parties present before the notary take part, or in proceedings with other parties.
Therefore, the limits on the parties that are typical for other circumstances that do not need to be proved according to Article 69 of the RF Commercial Procedure Code (circumstances established by a judicial act shall not be proved when considering another case only if the same parties participate in it) should not apply to that category of circumstances.

On the contrary, circumstances established by a notary as a result of checking, for example, the authority of the representative, or that the seller owns the property, etc., may be refuted according to the general rules, because Article 69(5) of the RF Commercial Procedure Code should not apply to them. This is because a notary has limited authority when doing a notarization, and because the notary acts only within an indisputable jurisdiction.

7. The adoption of Federal Law No. 297-FZ on Jurisdictional Immunities of a Foreign State and Property of a Foreign State in the Russian Federation of November 3, 2015 and the relevant amendments to the procedural codes (the introduction of Chapter 33.1 to the RF Commercial Procedure Code and Chapter 45.1 to the RF Civil Procedure Code)

Federal Law No. 297-FZ on Jurisdictional Immunities of a Foreign State and Property of a Foreign State in the Russian Federation of November 3, 2015 entered into force on January 1, 2016. In accordance with this law Russia enshrined in its legislation its refusal to apply the model of absolute jurisdictional immunity in favor of the model of limited (functional) immunity.

The key difference between the two existing approaches is that absolute jurisdictional immunity supposes that it is possible to join a foreign state to litigation in the Russian courts, to apply injunctions to it and to enforce court awards against it only if such state agrees. The model of limited jurisdictional immunity, for its part, supposes that it is possible to refuse to grant a foreign state immunity from prosecution in the courts, from injunctions and the enforcement of court awards in certain cases.

One of the most important innovations is the proclamation of the principle of reciprocity in matters of applying jurisdictional immunity in the Russian Federation, in accordance with which the jurisdictional immunities of a foreign state may be limited if it is determined that limitations concerning the jurisdictional immunity of the Russian Federation and its property exist in that foreign state.

This law also discusses cases where immunity is not granted to foreign states, in particular, with respect to disputes connected with participation in civil-law transactions, entrepreneurial and other economic activity, labor disputes, disputes for compensation of harm, disputes related to intellectual property or property rights.

Immunity against injunctions and enforcement of a court award is granted to a foreign state in all cases other than situations where the foreign state clearly expressed its consent to injunctions and/or enforcement of a court award, and if the foreign state set aside (designated) property in the event of injunctions and/or if the court were to grant a claim.

In connection with the adoption of the above-mentioned federal law, new chapters were added to the RF Civil Procedure Code and the RF Commercial Procedure Code. These chapters set forth the specifics of proceedings involving foreign states (Chapter 33.1 of the RF Commercial Procedure Code and Chapter 45.1 of the RF Civil Procedure Code). Other than those that were borrowed from Federal Law No. 297-FZ of November 3, 2015, we may name among the key features of court proceedings involving foreign states the need to translate the statement of claim into the official language of the foreign defendant state, resolving the issue of whether there is jurisdictional immunity at the preliminary court hearing, and the inability to apply court fines to foreign states.

We note that Russias refusal to apply jurisdictional immunities to relations not directly connected with a foreign states exercise of its sovereign authority is not unique. The United Nations Convention on Jurisdictional Immunities of States and Their Property adopted in 2004, to which the Russian Federation is a signatory, set forth similar cases in which immunity is not granted. However, it should be noted that the convention has not yet entered into force because there are not enough states party.

8. Amendments to the rules of the RF Civil Procedure Code about jurisdiction of individuals disputes with search engine operators over exercise of the right to be forgotten

The Federal Law on Amendments to the Federal Law on Information, Information Technologies and the Protection of Information and Articles 29 and 402 of the RF Civil Procedure Code entered into force on January 1, 2016. This law governs the substantive-law and procedural aspects of the so-called right to be forgotten.

This right was first enshrined in the European Union legislation. It was most fully detailed in the European Union Court of Justice ruling on the so-called case of Costeja v. Google, as a result of which an individual was granted the right to demand that a search engine operator delete search results that concern him personally, under certain conditions.

In the terminology of Russian law, the right to be forgotten is an individuals request to a search engine operator that disseminates advertising on the Internet aimed at attracting consumers attention. The subject of the request that the search engine stop displaying links to pages of sites allowing access to information about the applicant. The search engine operator must grant such an individuals request in any of the following three conditions: information about the applicant is disseminated in violation of Russian law, is inaccurate or has become irrelevant for the applicant.

If the search engine operator refuses to grant the request, the applicant may file a statement of claim with a court against the operator to stop displaying links to the information.

In connection with the appearance of a new category of claims, lawmakers have made the relevant adjustments to the RF Civil Procedure Code, namely, to the rules about the territorial jurisdiction of disputes.

For example, part 6.2 providing for the possibility to file a claim for an operator to stop displaying links with a court at the plaintiffs place of residence has been added to Article 29 of the RF Civil Procedure Code, which governs the plaintiffs choice of jurisdiction.

Article 402 of the RF Civil Procedure Code, which governs the jurisdiction of cases involving foreign persons, has been amended to empower Russian courts to examine cases involving foreign persons if the defendant disseminates advertising on the Internet aimed at attracting the attention of Russian consumers. Is obvious that this rule makes it possible to file claims against major foreign search operators. Moreover, if the plaintiff resides in Russia, then the plaintiff may file claims against a foreign operator with a Russian court in any event, if the subject of the claim is to stop the search engine operator from displaying links.

It is noteworthy that amendments were made only to the RF Civil Procedure Code. Likely the legislators assumed that such claims are only within the competence of the courts of general jurisdiction. Nevertheless, it will be necessary to wait for clarifications from the RF Supreme Court to finally resolve this issue.

9. The adoption of Federal Law No. 41-FZ of March 8, 2015 on amendments to the RF Civil Procedure Code, the RF Commercial Procedure Code and the Federal Law on Enforcement Proceedings regarding the possibility of issuing and sending enforcement documents electronically

The adoption of Federal Law No. 41-FZ of March 8, 2015 was intended to improve the procedure of enforcing judicial acts and is one of the stages of implementing the program to develop the judicial system.

The main innovation is the ability for a court to issue and send enforcement documents (writs of execution, court orders, decisions on administrative offense cases) for execution in the form of an electronic document with an enhanced electronic signature. In particular, the court has received such an opportunity within civil, criminal and administrative procedure. At issue are mainly those instances where the judgment creditor is petitioning for the court to send an enforcement document for execution.

The new ability to send enforcement documents electronically does not supersede the right to receive and submit enforcement documents in hard copy. Sending an enforcement document electronically is the prerogative of the court and is considered an alternative form of presenting enforcement documents for execution. An enforcement document in hard copy will not be issued when an enforcement document is sent electronically.

Rules enabling the parties to enforcement proceedings to exchange documents electronically were added to the legislation on enforcement proceedings with the adoption of this act.

Now the parties to enforcement proceedings are entitled to file petitions, explanations, recusals and complaints to an official of the court bailiff service in the form of an electronic document signed with an electronic signature. Banks and other lending institutions are now required to promptly execute an order freezing the debtors funds and to report to the court bailiff in writing or in the form of an electronic document signed by the relevant official using an enhanced electronic signature the details of the debtors accounts and the amount of the debtors funds frozen on each account.

The above-mentioned amendments are intended to speed up document flow and, as a consequence, the efficiency of enforcing judicial acts. However, we note that a number of procedural issues related to the technical part of using electronic document flow (for example, recording the sending of electronic documents, the procedure for recalling enforcement documents sent in electronic form, etc.) remain open at this time. It should also be borne in mind that not all courts have the technical capability to send electronic enforcement documents at this time. Therefore, some time will be needed for the electronic document flow system to fully operate in the enforcement proceedings system.

10. The introduction of a number important amendments to the Federal Law on Enforcement Proceedings intended to provide additional guarantees to the judgment creditor and to increase the efficiency of the court bailiffs. In particular, the possibility of a court bailiff limiting a debtors right to drive vehicles has been provided

Federal Law No. 57-FZ of March 8, 2015 made a number of amendments to the Federal Law on Enforcement Proceedings. Some of the innovations clarify the procedure for executing enforcement documents if the debtor is granted performance in installments or a deferral.

For example, the new version of Article 21(9) of the Law on Enforcement Proceedings expressly provides that the judgment creditor has the right to present an enforcement document for execution only the day after the deadline for complying with the requirements expires (if the debtor was given such a deadline), or the day after the deadline granted to the debtor as a deferral or installments expires. This limitation does not affect enforcement documents for the recovery of a fine imposed as punishment for a crime. If an enforcement document is presented for execution prematurely, a court bailiff shall issue a decision refusing to initiate enforcement proceedings.

However, it should be borne in mind that if the debtor on more than two occasions has not complied with some of the requirements contained in the enforcement document for which it was granted installment payments, the effect of Article 21(9) of the Law on Enforcement Proceedings shall not apply. In practice, the lack of detailed regulation of the issues described above previously led to the appearance of additional disputes that were not always clearly resolved.

Another part of the important amendments to the Federal Law on Enforcement Proceedings was intended to increase the efficiency of court bailiffs and to reduce the number of disputed situations when levying execution on assets and funds. For example, part 14.1 was introduced to Article 30 of the law, according to which in the decision to initiate enforcement proceedings the court bailiff orders the debtor to submit documents confirming that it has assets and income on which execution cannot be levied, including funds on accounts, in deposits or being kept by banks and other lending institutions, as well as the property that is the collateral.

The next group of amendments to the Law on Enforcement Proceedings introduced by Federal Law No. 340-FZ of November 28, 2015 is intended to create additional incentives for debtors to pay off their debts on time. Now, if a debtor fails to comply with the requirements of an enforcement document the court bailiff may issue a decision temporarily restricting the debtors exercise of a special right until the requirements of the enforcement document are met in full, or until grounds for canceling the restriction appear (Article 67.1). This means restricting the debtors right to drive vehicles (motor vehicles, aircraft, boats and river craft, etc.).

These restrictions apply when, for no good reason, a debtor does not respond on time to claims for collection of support payments, to pay compensation of harm caused to another persons health, to pay compensation in connection with the death of a breadwinner, property damages and/or moral damages caused by a crime, claims of a non-financial nature connected with the raising of children, and also to claims to collect an administrative fine imposed for violating the procedure for exercising a special right.

The law clearly sets forth the list of cases in which restriction on the debtors exercise of a special right cannot apply, for example, if establishing a restriction deprives the debtor of his or her main source of funds or the amount of the debt is not more than RUB10,000.

In light of these amendments, special rules were also added to the RF Code on Administrative Offenses establishing liability for violating a temporary restriction on the exercise of a special right.

Layoffs hit hard for three-generation Bakersfield oil family

Ramer sees the impact everywhere.

If that oil aint happening, nothings happening, he said.Its going to go all the way down to the guy selling cigarettes at 7-Eleven.

FAMILY BUSINESS

The situation has already hit home in a big way for Ramer, whose brother-in-law, uncle, two grandsons and granddaughter all have careers in the oil industry.

Ramer worked for 44 years in oil fields from North Dakota to Venezuela. Until the downturn, he was earning more than $300,000 a year as a consultant to local oil producers in need of workovers, which unlike drilling work involve overhauling existing oil wells.

Even though he and wife, Patt, have socked away money and live in a modest home at BakersfieldsRoyal Palms Mobile Park, the suddenness with which the oil slowdown hit meant Patt, a housewife, had to give up her superchargedJaguar XKR sports car. Now she drives a Chrysler PT Cruiser.

Ramer said he wasnt expecting to retire for another four years. Even now he keeps open the possibility of returning to the oil fields if and when prices recover strongly.

Whatdismays the Ramers lately is that many in the industry seemed to think oil would stay at the $100-a-barrel level, which it did for more than three years starting in 2011.

Patt said she knew it wouldnt last, and Russ, who recalls the days when a barrel sold for less than $10 a barrel, wonders whether prices will ever reach triple digits again.

Not that he doubts prices will rise. The other day, sitting in his favorite chair in the Ramers living room with his family around, he projected an unshakable confidence that good times in the oil field will return, and that its only a question of when.

Its going to get better. Itll get better, he said.Its just going to take a while.

LOOKING FOR WORK

The situation is different for his stepson, McGonigal, who as a mid-career rig supervisorhad never been laid off in more than 21 years in the oil fields.

Inspired by Ramer and without a college degree, he worked his way up from earning $6 an hour to what was until recently a comfortable living.

Now, McGonigal says, he cant even get a job at McDonalds because hes overqualified. He spends his days following up with professional contacts in hope of getting a lead on work.

Meanwhile, hes burning through his savings.

Everything I worked for the last 30 years is gone, he said.

Last year McGonigalsyoungest son told him he wanted to leave college at age 19 to go work in the oil fields. This was after oil had begun its slide and layoffs were spreading locally.

McGonigal stronglyadvised his son against going into oil persuasively, apparently: His son ended up enlisting in the Air Force.

You dont want your kids to struggle, he said.

WORKING THROUGH IT

Tootle started working in local oil fields three days after leaving the Navy.Been there ever since, he said.

The downturn in oil cost him his job as a rig manager and forced him to file for personal bankruptcy protection. He works now as a rig hand.

Tootle is grateful for his job in Simi Valley, he said, even though it requires him to drive almost dailyfrom Bakersfield.

I love the work, he said.Its good work. Good people.

But he said being laid off in the oil fields is devastating to have to deal with.

Its hard to tell your family that, your kids that, he said.

Help police ID suspects

CHAMPAIGN, Ill.

CHAMPAIGN — Police want help identifyingsuspects involved in burglary to a motor vehicle and unlawful use of credit cards. It happened November 27, about 2 pm, in the 1400-block of Parkview Drive.

A woman reported her purse was stolen from her vehicle. Credit cards in her wallet were then used in fraudulent purchases around town.

The suspects are described as a black man and light-skinned black woman, both 15 – 20 years old. The man was wearing a black/red/white Miami Heat hat, black Nike hooded sweatshirt and black pants.

On one occasion, the woman was wearing a black, hooded coat with jeans, then the same coat with Eastern sweatpants on another. The suspects were seen leaving the area in a dark blue or black sedan.

Anyone with information is asked to call Crime Stoppers. You can remain anonymous and may earn a cash reward.

Q&A: In what ways can a small business or an individual declaring bankruptcy disrupt the local economy?

Sometimes, it’s a downturn in the economy affecting sale of the product or service. There’s really no-one-size-fits-all reason for declaring bankruptcy. What I can tell you about the trend is they’re not filing for reorganization. Another reason people file business bankruptcy is because usually the small business owner also guarantees the debt.

What will usually happen is a small business owner would file their own personal bankruptcy, then file bankruptcy for the business as well.

QUESTION: Do businesses have a choice when it comes to deciding what kind of bankruptcy to file for?

Hogan: They have a choice usually. (However,) any good bankruptcy attorney is not going to advise Chapter 11 unless they can get out of it successfully. Business owners have to find a way to propose a plan to make the business viable again.

That’s where a lot of people run into trouble. They don’t have a plan to get out. A Chapter 11 can be very expensive for people. There’s a lot of work that goes into it. It’s usually a five-year ordeal or more. You have to propose a plan that’s going to get the creditors paid something. The creditors have to vote to approve a plan.

The debtor may have to go back to the drawing board more than once. There’s a lot of things that can happen, but once the plan is approved, the debtor has to stick to the plan before they can get out.

QUESTION: How might a business or individuals declaring bankruptcy interrupt the local economy?

Hogan: The local economy takes a hit when (businesses) have to write off some of their accounts’ receivables. (Additionally), there’s the foreclosure situation.

Minister Rivers calls for Hewitt bankruptcy

Ms. Rivers, the petition says, “therefore prays that … on the hearing of this petition, the said John Gordon Hewitt may be adjudged bankrupt,” setting a hearing for April 14.

The move brings to a head the long-simmering confrontation between Ms. Rivers, who won one of West Bay’s four seats in the May 2013 election. She finished only a few votes ahead of Mrs. Powery-Hewitt, whose husband subsequently challenged the future minister, claiming that her long residence outside the country, working for a London law firm, disqualified her under constitutional rules requiring a minimum residency period.

In a July 17-19, 2013, Grand Court case, Cayman constitutional adviser and London QC Jeffrey Jowell, supported by local attorney Paul Keeble of Hampson and Company, argued that Ms. Rivers had furthered her education – a constitutional exception to residency requirements – while practicing at London’s Allen amp; Overy, and that her possession of a US passport did not indicate divided loyalty.

When handing down judgment on Aug. 9, 2013, Chief Justice Smellie did not indicate costs, but on March 13, 2014, in a 13-page decision, he cited Ms. Rivers’s claim that “it would be neither fair nor appropriate that she should be required to bear them herself …”

He did not name the amount, but called the costs “quite significant.”

The Jan. 29 petition caught the Hewitt couple by surprise.

“I don’t what I will do,” Mr. Hewitt said. “I don’t what will happen now.”

He said he felt “a little bit of disgust for Cayman’s constitutional system,” worrying that the chief justice had erred in his judgement.

“It’s just astonishing,” he said. “No one in the world expected that to go down the way it did.”

Mrs. Powery-Hewitt was bitterly disappointed, saying only, “I am just praying. I don’t know what else to do.”

Personal bankruptcy is similar to corporate bankruptcy. A court-approved trustee values all liabilities and assets, then proportionally distributes whatever remains among creditors.

In the extreme, bankruptcy could force the couple to liquidate their West Bay home, their car, any bank accounts and any other possessions.

Mr. Hewitt said family attorney Steve McField “is working on it.” Mr. McField declined to comment.

Ms. Rivers’s attorneys also declined to comment.

Ms. Rivers had not responded by press time to repeated efforts to contact her.