Saturday, September 19, 2009

Posting at The Am Law Litigation Daily.

eptember 17, 2009 7:17 PM

LITIGATION DAILY: Could Rakoff's Ruling Cost BofA's Shareholders More Than $33 Million?

Posted by Susan Beck

This story was originally published by The Am Law Litigation Daily.

Joseph Zernik

This writer is a shareholder who was probably the ONLY one who filed an affidavit with Judge Rakoff, requesting to reject the Proposed Settlement. My Affidavit's central claim was that the parties never came to court in good faith/clean hands... SEC never intended to enforce the law, and BAC never intended to comply with the law. Judge Rakoff apparently accepted at least the first half of the last statement - that SEC never intended to enforce the law.
Additionally, I sought to undermine the Affidavit of Prof Joseph Grundfest, former SEC Commissioner, on the grounds that I had first hand knowledge that he had pertinent information, which he failed to address in his opinion, which was unreasonably narrow in its construction.
Looking at impact of Judge Rakoff's decision on short term share value is typical U.S. market attitude that got to grow up one day...
The failure of the U.S. government to enforce the law and institute regulation of U.S. financial institutions, combined with the reckless decision to waive the 10% deposit limit on BAC, while grafting into it some of the allegedly most corrupt elements from CFC, was the harbinger of a much greater disaster than some share price fluctuation...
It appears that our only hope these days for some reason to find its way to U.S. policy makers... is through pressure from BASEL - seat of the Basel Committee of International Banking Accords, or from BEIJING - holder of >$2trillion in reserves denominated in U.S. dollars, The U.S. itself is back to the Era of the Robber Barons, in a big swing, as if we learned nothing from the Great Depression...

Joseph Zernik

One must note, that in disregard of repeated requests, Counsel for SEC has so far refused to publicly display a copy of the Summons in SEC v BAC (1:09-cv-06829).
Therefore, beyond all other arguments, the public display at the U.S. District Court in NYC remained so far indefinite as a legal action, and SEC insisted on keeping it that way...
For all we know SEC could have
in error, or otherwise, issued defective Summons, and the display in its entirety could then be null and void.
Insistence of a U.S. regulatory agency to conduct its business in such manner, in the midst of the current financial crisis, and the fact that it can get away with it, and there is no protest or public uproar, is just one more indication how deluded either is this writer, or are some regulators at SEC.

God bless the U.S. librarians....

Guardians of the U.S. Contitution...


Joseph Zernik has just read and signed the petition: Improve PACER

You can view this petition at:

Again they took a stand, when nobody else did!

1. Pacer and CM/ECF should be considered prime examples of U.S. “Digital Pollution”


Instant Petition should help in generating awareness of a critical widespread problem - "Digital Pollution" - large computer systems in both government and public corporations, which were either never validated (logic-verified), and/or were fraudulent by design, and/or were corrupted over time.


2. PACER and CM/ECF were never appropriately instituted with public notice and an opportunity for comment – albeit – they reflected a sea change in the U.S. Rules of Courts

The duality of PACER vs CM/ECF as docketing systems of the U.S. Courts, must be subjected to careful review. The construction and implementation of such dual systems required major resources, and in fact represented an entire revolution in the Rules of Courts. As such, such major changes in the Rules of Courts should have been generated in compliance with the Rule Making Enabling Act 28 USC § 2071-2077.

28 USC § 2071 says: .

§ 2071. Rule-making power generally

(b) Any rule prescribed by a court, other than the Supreme Court, under subsection (a) shall be prescribed only after giving appropriate public notice and an opportunity for comment. Such rule shall take effect upon the date specified by the prescribing court and shall have such effect on pending proceedings as the prescribing court may order.

However, such dual systems were established by the U.S. judiciary with no appropriate public notice and opportunity for public review and comment. Therefore, upon review, it may be ruled that such systems were established with no authority at all.


3. Digital signatures by AO, as sought by the Petition’s authors, were the incorrect authority for authentication of records. Authentication requiredCertification by a Judge or a Party, for respective papers, and in both cases - Attestation by the Clerk.


The Petition was in error in the statement calling for AO’s digital signatures to be added:


“For verification and reliability, the AO [Administrative Office of the Courts – jhz] should digitally sign every document put into PACER using readily available technology.”


The digital signature of the AO would have no validity, and wouldn’t have contributed to the authentication of the records.


The U.S. Constitution, Art. IV §I declares:

Full faith and credit shall be given in each state to the public acts, records and judicial proceedings of every other state. And congress may by general laws prescribe the manner in which such acts, records and proceedings shall be proved, and the effect thereof.

By the U.S. Congress Act of May 26, 1790, it is provided:

That the act of the legislatures of the several states shall be authenticated by having the seal of their respective states affixed thereto: That the records and judicial proceedings of the courts of any state shall be proved or admitted, in any other court within the United States, by the attestation of the clerk, and the seal of the court annexed, if there be a seal, together with a certificate of the judge, chief justice or presiding magistrate, as the case may be, that the said attestation is in due form. And the said records and judicial proceedings, authenticated as aforesaid, shall have such faith and credit given to them, in every court within the United States, as they have, by law or usage, in the courts of the state from whence the said records are, or shall be taken.

Relative to filing papers by parties, the hand signature of party or counsel of record on the paper was required as Certification, combined with the Certificate of Service, and the Attestation by Clerk was executed by the stamping “FILED” and endorsement by the hand of the Clerk.


Relative to entering orders – the hand-signature of the Judge was required as Certification, and Certificate of Service was either by Party of by Clerk, and Attestation was again – by “FILED” stamp and endorsement by clerk.


4. The authentication of Court Records was already implemented - in CM/ECF, where public access was denied. However, the legal foundation of the method of implementation of the NEFs may be questioned. Moreover, the omission of the NEFs from PACER would likely be found upon review as abuse of rights, or even widespread fraud on the people.


Authentication of the records was already fully implemented by the Administrative Office of the Courts – in the NEFs (Notices of Electronic Filings) that were automatically sent to CM/ECF users upon any filing in a case. The NEFs were also attached to each and every record on the docket in CM/ECF, similar to the manner that Certificates of Service used to be enclosed to paper records. In CM/ECF, the NEFs appear under the “silver bullet” positioned in CM/ECF docket sheet on the left of the record ordinal number.

Therefore, the NEFs replaced the Certificates of Service by Party, or Notices of Entry and Certificates of Mailing by Clerk, which were required in the paper dockets for each and every record to be deemed authenticated. There are two major inherent problems with the implementation as seen today:

a. It eliminated the critical duty of a particular Clerk or Deputy as accountable for the authenticity of a given record. In other words, tradition of hundreds of years, established the integrity of the courts, at least in part, based on the checks and balances of the authorities of the Judicial and Ministerial arms of the Courts. It is not clear whether the Administrative Office of the Courts had the authority to affect such a major change in the structure of the court system, with no review or legislation. The problem can be to some degree related to the voting machines problem. The code of PACER was never open for public review. The personal accountability of the Clerks was discarded in favor of some confidential code. It is not an acceptable reasonable substitute, and it must be deemed suspect. Especially so, since upon review, it is likely to be deemed that the dual systems of Pacer and CM/ECF were not constructed by the judiciary in good faith.

b. The implementation must be doubly deemed suspect, for the reason that all NEFs were eliminated from PACER. There is no reason, which would be even remotely related to the furtherance of justice, which could justify such system design. In plain layperson’s language it is likely to be called “Shell Game Fraud”.


The courts are unambiguous about the fact that the NEFs and the digital signatures encrypted in them per RSA, are the Attestations that determine the authenticity of the records. For example, in the Central District of California, the General Order 06-07 of the U.S. Courts, for the Central District of California states:

J. A “Notice of Electronic Filing” is generated automatically by the ECF

system upon completion of an electronic filing. The Notice of Electronic Filing, when e-mailed to the e-mail address of record in the case, shall constitute the proof of service as required by Fed.R.Civ.P.5(d). A copy of the Notice of Electronic Filing shall be attached to any document served in the traditional manner upon any party appearing pro se.

5. Dual systems, separate and unequal – where the courts assumed the authority to arbitrarily segregate parties.


Therefore, one can reasonably state, that PACER and CM/ECF were constructed as separate but unequal systems, and the U.S. Courts usurped the authority to arbitrarily segregate parties into one or the other. Pro Se filers, and practically all prisoners, were and are limited to PACER access, and as seen here – librarians and law students as well.

PACER users were deliberately handicapped – disabled from distinguishing authenticated, valid, and effectual court records, from such that were unauthenticated, invalid, and ineffectual. Concomitantly, the dockets were populated with abundance of unauthenticated, invalid, ineffectual records.

  1. PACER and CM/ECF may be deemed upon review as radical change in the Law of the Land and the U.S. Constitution – abolishing of the Common Law ACRIC (Access Court Records to Inspect and to Copy) Right

Furthermore, to ensure that PACER users remain ignorant and unable to discern the authenticated court records among those docketed online, the U.S. Court, with no recorded court ruling or Constitutional Amendment, effectively abolished the public’s ACRIC right, which the U.S. Supreme Court re-affirmed in Nixon v Warner Communications, Inc 435 U.S. 589 (1978), [the Nixon Tapes decision], as ”the common law right of access to judicial records”, also embedded in “First Amendment guarantee of freedom of the press”, “Sixth Amendment guarantee of a public trial,” and the Fifth/Fourteenth Amendment as part of the “fundamental demands of due process of law”.

The U.S. Supreme Court, in discussing such Right stated: “This privilege of the public to inspect and obtain copies of all court records… in the custody of the Clerk, is of long standing in this jurisdiction, and reaches far back into our common law and traditions. …the public has a right to inspect and obtain copies of ,,, judicial records.”… "[A]ny attempt to maintain secrecy as to the records of the court would seem to be inconsistent with the common understanding of what belongs to a public court of record, to which all persons have the right of access and to its records, according to long-established usage and practice."…

Nevertheless, recent attempts to exercise such right at the California Superior Court for the County of Los Angles, at the California Court of Appeals, 2nd District, at the U.S. District Court, Los Angeles, U.S. District Court, Manhattan, NYC, and U.S. District Court. Washington DC, as well as the U.S. Court of Appeals, 9th Circuit, demonstrated universal denial of such right, relative to inspection and copying of NEFs, with no explanation at all.


In some instances the excuse was offered that the NEFs were “administrative court records” and not “public court records”. That distinction must upon review be found to be a de novo invention. It was reasonably clear that the FRCPs considered the Certificate of Service as integral part of the filing, which was self evident:

FRCP, Rule 5(d)(1) states:

(d) Filing

(1) Required Filings; Certificate of Service.

Any paper after the complaint that is required to be served — together with a certificate of service — must be filed within a reasonable time after service.

In sum:


It is entirely inconceivable how law students can review case law, or cases in general, for that purpose, with no access to the NEFs. The conduct of the courts must remain a total mystery to them. Likewise, it is entirely inconceivable how no lawyers, no legal organization, no law school faculty, protested this aberration or possibly even alleged perversion. It was left for the librarians to take the stand and guard our Constitution.