Mortgage Banking Update - July 12, 2012

by Ballard Spahr LLP
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CFPB Proposes Amendments to RESPA and TILA

In a highly anticipated pair of proposed rules issued on July 9, the Consumer Financial Protection Bureau has called for amendments to key provisions of Regulation Z and Regulation X, with an initial comment deadline for both Notices of Proposed Rulemaking set for September 7, 2012, and a subsequent deadline of November 6, 2012, for the integrated disclosure form aspects of the proposals.

Watch your inbox tomorrow for alerts from our Mortgage Banking Group summarizing the CFPB’s hefty releases (one is nearly 300 pages, the other nearly 1,100 pages) and offering some immediate analysis of the impact these rules will have if adopted.

Defects in Chain of Title Must Be Raised Prior to Foreclosure

Borrowers alleging defects in a foreclosing lender’s chain of title must raise the issue prior to the conduct of the foreclosure sale, Maryland’s highest court has ruled.

In Thomas v. Nadel, the Maryland Court of Appeals held that a borrower is barred from raising purported irregularities in the lender’s ownership of the mortgage debt by way of post-sale exceptions.

Instead, the court held, allegations concerning the lender’s ownership of the promissory note must be raised prior to the foreclosure sale. Post-sale exceptions to sale are generally limited to irregularities in the conduct of the sale itself, and are not the proper vehicle to challenge the validity of the lender’s title, the court ruled.

In Thomas, the borrowers filed post-sale exceptions to a foreclosure sale based on a purported gap in the chain of ownership of the promissory note secured by the borrowers’ mortgage. The borrowers claimed that the note was transferred to an entity that did not exist at the time of the transfer, and therefore a subsequent transfer to the foreclosing lender was ineffective.

The court rejected the argument, noting that foreclosing trustees had possession of the original promissory note endorsed in blank, which was all that was required under Maryland law to establish the lender’s right to foreclose. Further, the court noted that there was no dispute as to the authenticity of the note.

The court left open the possibility that a mortgage that was the product of fraud could be challenged by way of post-sale exceptions, but ruled that purported gaps in the chain of title of the note did not constitute fraud.

The decision is good news for mortgage lenders and servicers in that it limits the procedural avenues for borrowers to challenge a lender’s ownership of a mortgage.

Robert A. Scott


Borrower May Sue Over Lender’s Failure To Contact Prior to Foreclosure, California Appellate Court Rules

A residential lender’s failure to contact a borrower prior to initiating nonjudicial foreclosure proceedings triggers a private right of action under California law, the California Court of Appeal has ruled.

In its July 3, 2012, opinion in Skov v. U.S. Bank National Association, the California Court of Appeal, Sixth District, held that a borrower could assert a cause of action against a residential lender under California Civil Code Section 2923.5 for failure to contact the borrower prior to recording a notice of default.

Section 2923.5 provides that a residential lender must contact a borrower “in person or by telephone in order to assess the borrower’s financial situation and explore options for the borrower to avoid foreclosure” or satisfy due diligence requirements before a notice of default is recorded. The remedy for failing to comply with Section 2923.5 is postponement of the foreclosure sale.

The borrower in Skov defaulted on her home loan, prompting the lender to initiate nonjudicial foreclosure proceedings by the recording of a notice of default. The notice of default contained a declaration of compliance with Section 2923.5.

The borrower filed suit to prevent the foreclosure from going forward. Among other things, the borrower alleged that the lender did not comply with Section 2923.5 because the lender did not contact the borrower until after it recorded the notice of default. The trial court dismissed the action and the borrower appealed.

In reversing the dismissal, the appellate court held that the question of whether the lender properly complied with Section 2923.5 was an issue of fact that could not be resolved at the pleading stage. The appellate court further held, relying on an earlier California appellate decision, that Section 2923.5 necessarily confers an individual right of action because the statute’s purpose is to force the lender and borrower to communicate about the specific borrower’s situation and the specific borrower’s options to avoid foreclosure.

Finally, the appellate court held that the National Bank Act—which “vests national banks … with authority to exercise ‘all such incidental powers as shall be necessary to carry on the business of banking’”—does not preempt Section 2923.5.

Alan S. Petlak


CFPB Adopts Privilege Waiver Rule As Originally Proposed

The Consumer Financial Protection Bureau has promulgated a final rule on non-waiver of attorney-client privilege and work product protection for information voluntarily or involuntarily submitted by a regulated entity to the CFPB in situations where it subsequently shares that information with another federal or state agency.

The rule, Confidential Treatment of Privileged Information, was adopted on June 28, 2012, exactly as originally proposed and previously described on our blog, CFPB Monitor. The final rule’s privilege preservation regime applies only to waivers for information finding its way into the hands of third parties—such as other federal or state agencies, including state attorneys general—and does not purport to preserve the privilege vis-à-vis the CFPB.

The final rule builds upon ground staked out by the agency early in January in its Bulletin 12-01, which figures prominently in the CFPB’s explanation of the final rule. Both claim unfettered access to the records of regulated entities and assert that the information so obtained would not be subject to waiver of attorney-client privilege (other than vis-à-vis the CFPB).

Whereas Bulletin 12-01 took more of a “carrot and stick” approach—hinting at enforcement action against recalcitrant banks while articulating a positive tone relating to preservation of privilege for their confidential documents—the discussion accompanying the final rule eschews saber-rattling in favor of matter-of-fact statements that the CFPB, like the bank regulators, has inherent power to gain access to privileged documents.

By its terms, Bulletin 12-01 applied only to depository institutions subject to the CFPB’s jurisdiction (those with more than $10 billion in assets). It asserted that, notwithstanding the regulated entity’s waiver of attorney-client privilege as regards the CFPB, banks should be comfortable turning over privileged information to CFPB examiners because the privilege would not be waived as to any other federal or state regulatory or law enforcement agency (including state attorneys general) with which the Bureau might share the privileged information.

The final rule applies more broadly and encompasses all nonbank entities subject to CFPB authority. In addition, the CFPB takes the position that, to the extent that depository institutions with less than $10 billion in assets submit privileged information (coerced or voluntarily) to the CFPB in the course of its supervisory or regulatory processes, the rule applies likewise to them and shields the information produced from privilege waiver.

According to the CFPB, the purpose of the rule is to “provide maximum assurances of confidentiality to the entities subject to its supervisory or regulatory authority” and to forestall “any claim, in Federal or State court, that a person has waived any applicable privilege, including the privilege for attorney work product, by providing such information to the Bureau in the exercise of its supervisory or regulatory processes.”

In the final rule, the CFPB also notes that compliance with federal consumer financial law is served by policies that “do not discourage those subject to its supervisory or regulatory authority from seeking the advice of counsel.” Thus the release underscores the CFPB’s policy of seeking privileged information “only when it determines that such information is material to its supervisory objectives and that it cannot practicably obtain the same information from non-privileged sources.”

Moreover, the CFPB will, as also noted in the Bulletin, “give due consideration to supervised institutions’ requests to limit the form and scope of any supervisory request for privileged information.”

Keith R. Fisher


MERS Wins Florida Fee Case

The Clerk of the Circuit Court of Duval County, Florida, cannot maintain a class action against MERS for “millions of dollars in unpaid recording fees,” the U.S. District Court for the Middle District of Florida has ruled. The plaintiff, Jim Fuller, sought to represent his interests and the interests of 67 other Florida Circuit Court clerks.

In its June 27, 2012, decision in Fuller v. Mortgage Electronic Registrations Systems, Inc., the court held that because the statute creating Florida’s public recording system does not provide a private right of action, Fuller could not bring common law claims premised upon the statute. The statute “simply outlines Fuller’s authority to accept, maintain and make available to the public records,” the court said. Fuller had argued his common law claims for a Writ of Quo Warranto, civil conspiracy, unjust enrichment, and fraudulent and negligent misrepresentation were independent of the statute, but conceded the statute was the only source of his authority over Duval County’s public records.

The court also ruled that Fuller’s claims would all fail on their merits. Fuller argued that MERS attempted to usurp his function as the recorder of public instruments and sought a Writ of Quo Warranto, which is typically used to challenge a public officer’s attempt to improperly exercise a power or right derived from the State. However, as MERS successfully argued, there is no law requiring payment of a recording fee when a mortgage is assigned but not recorded. Moreover, the public does not use MERS’ private recording system to determine the status of mortgages. As a consequence, the court held MERS is not usurping Fuller’s authority.

Fuller could not establish a conspiracy because MERS has not committed an unlawful act or a lawful act by unlawful means. The court correctly opined that recording mortgages is “at the complete discretion of the party wishing to record the document.” Accordingly, MERS is under no legal obligation to record assignments or pay the associated recording fees and cannot be liable for “actions that are neither required nor prohibited under the law.”

Fuller’s unjust enrichment claim was rejected because, as noted above, MERS has no duty to record, so Fuller could not establish that he had conferred any benefit on MERS. Further, MERS had not failed to pay any recording fees, and Fuller had not conferred a benefit on MERS by complying with his statutory obligations.

Fuller’s fraudulent and negligent misrepresentation claims were premised on the notion that MERS falsely designated itself as the “mortgagee” on recorded instruments. The court rejected this position, finding that like most courts around the country, “Florida courts have consistently affirmed the use of MERS as the designated mortgagee of record and the principle that MERS may serve as the mortgagee or as nominee for the lender and the lenders successors and assigns.”

In summing up, the court wisely observed that it was “confronted with an old problem: the difficulty of reconciling new technology with old law, thus raising the centuries old separation of powers controversy.” The system for recording mortgages in Florida, as elsewhere, is a creature of statute, and the relief Fuller sought resides with the Florida legislature, not the courts.

Anthony C. Kaye


Federal Regulators Issue Interagency Guidance Addressing Practice Involving Military

On  June 21, 2012, five federal agencies issued an Interagency Guidance on Mortgage Servicing Practices Concerning Military Homeowners with Permanent Change of Station (PCS) Orders. The guidance was issued by the Federal Reserve Board, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency.

The guidance addressed risks associated with service members who have received permanent change of station orders. Most military members are subject to PCS moves every two to three years. The orders are generally non-negotiable and normally are issued anywhere from three to six months before the move would occur. However, in some cases, depending on the nature of the orders, the move could be more immediate.

The guidance pointed out that despite these military requirements, service member homeowners are still obligated to pay their mortgages, and in today’s market many of them are struggling to sell their homes at high enough prices to pay off their mortgages. In many cases, service members have to continue payments after relocating. The guidance set forth a number of practices that federal regulators find the most troubling. They include:

  • Failing to provide readily understandable information about the options available to service members who have received PCS orders
  • Asking service members to waive their SCRA rights in order to obtain information or assistance
  • Advising service members who are current on their loans to skip payments to create the appearance of financial hardship
  • Failing to provide reasonable means to obtain information on the status of assistance requests
  • Failing to communicate in a timely manner decisions regarding assistance requests or failing to explain denials

The guidance goes on to state that servicers need to adequately train their employees on the options that are available to service members with PCS orders and maintain appropriate policies and procedures to do so. Lastly, the guidance indicates that any servicer that engages in unfair acts and practices will be subject to all appropriate supervisory and enforcement actions.

In connection with the guidance, the Federal Housing Finance Agency announced changes to its short-sale policies in connection with Fannie Mae- and Freddie Mac-owned loans. The FHFA announced that military homeowners who receive PCS orders will be eligible to sell their homes in a short sale, even if they are current on their loans. Additionally, under the new policy, Fannie and Freddie will not pursue a deficiency judgment or any cash contribution from the service member for any property that the service member purchased on or before June 30, 2012.

Emily G. Miller


Pennsylvania Passes Law To Resolve Foreclosure Jurisdiction Problems Caused By Superior Court Decision

On June 21, 2012, Pennsylvania Governor Tom Corbett signed the Homeowner Assistance Settlement Act, which remedies a host of problems created by the Pennsylvania Superior Court's January 2012 decision in Beneficial Consumer Discount Co. v. Vukmam, 37 A.3d 596 (Pa. Super. Ct. 2012).

The Superior Court in Vukmam found that Act 91, a pre-foreclosure notice requirement created by the Pennsylvania Housing Finance Agency and used prior to September 6, 2008, was defective because it entitled the borrower to a face-to-face meeting with either a credit counselor or the mortgagee, but the notice advised the borrower only of her right to have a face-to-face meeting with a credit counselor.

Because Act 91 is jurisdictional and the notice is required prior to initiating a foreclosure in Pennsylvania on all non-FHA, owner-occupied properties, the decision rendered all cases found to have defective notices potentially void. It also obligated plaintiffs with pending foreclosures subject to the "defective" notice to withdraw their claims.

Apparently recognizing the enormous problem the Vukmam decision would cause borrowers, lenders, servicers, and bona fide purchasers, the General Assembly of the Commonwealth of Pennsylvania relatively swiftly approved the Homeowner Assistance Settlement Act, which, among other things, took the teeth out of the Vukmam decision.

Specifically, the Act provides—retroactive to June 5, 1999—that (1) noncompliance with the portions of Act 91 at issue in Vukmam does not deprive a court of jurisdiction, (2) individuals or entities affected by a purportedly deficient Act 91 notice must raise the issue "in a legal action before the earlier of delivery of a sheriff's or marshal's deed in the foreclosure action or delivery of a deed by the mortgagor," (3) if such an issue is "properly raised in a legal action" the court has discretion as to how to remedy the alleged deficiency, and (4) noncompliance "shall not impair the conveyance or other transfer of land and the title of property subject to a mortgage obligation covered under the Housing Finance Agency Law."

Daniel J.T. McKenna


Purchase Price and Post-Closing Adjustments
Guest column from members of our Mergers and Acquisitions/Private Equity Group

Purchase Price

In an M&A transaction, the purchase price is the consideration that the seller receives from the buyer in connection with the purchase and sale of the target business. The purchase price may be paid in cash, securities (typically capital stock of the buyer), or a combination of cash and securities. Furthermore, the purchase price may be paid in full at closing or partly at closing with the remainder being paid over a specified period of time following the closing, pursuant to a promissory note made payable to the seller by the buyer. Such a promissory note is typically secured by certain assets of the buyer (including the assets of the target business) and/or guaranteed by one or more affiliates of the buyer. The cash portion of the purchase price is generally paid by the buyer to the seller at the closing via a wire transfer of immediately available funds to one or more bank accounts specified by the seller.

Post-Closing Adjustments 

According to a recent study performed by the American Bar Association, 82 percent of purchase agreements executed in 2010 contained a post-closing purchase price adjustment. Post-closing purchase price adjustments can vary greatly from transaction to transaction. For example, post-closing purchase price adjustments may be based on the target business’s net working capital, net worth, net assets, or another financial measure agreed to by the parties. Post-closing purchase price adjustments also can include adjustments that are contingent on the occurrence of future events, such as the performance of the target business after closing (i.e., an “earn-out”) and/or obtaining certain regulatory approval for one or more products of the target business, such as FDA approval of a drug or 510K clearance for a medical device (i.e., a “milestone payment”). Earn-outs and milestone payments will be the subject of a separate article in a subsequent edition of this publication. However, the most common type of post-closing purchase price adjustment is based on net working capital, which is the subject of the remainder of this article.

Purchase agreement provisions regarding a post-closing purchase price adjustment based on net working capital (a “Net Working Capital Adjustment”) are some of the most complicated terms in a purchase agreement, requiring extensive negotiations by the parties. These provisions require thoughtful and precise drafting in order to accomplish the objectives of the buyer and the seller and to avoid future disputes. This article highlights some of the essential elements of a well-drafted Net Working Capital Adjustment.

Net Working Capital Adjustment

The rationale for a Net Working Capital Adjustment is that the target business needs a minimum amount of net working capital in order for its operations to be continued by the buyer in the ordinary course after the closing. The minimum amount of net working capital, which is usually a specific dollar amount typically referred to as the “target amount,” is a negotiated amount agreed to by the parties that is often based on the historical operation of the target business. If, at the closing, the actual amount of net working capital of the target business is less than the target amount, the buyer will have to contribute more cash  to operate the business in the ordinary course, thereby effectively increasing the purchase price that the buyer paid for the target business. However, if the actual amount of net working capital at closing exceeds the target amount, the buyer will have effectively underpaid for the target business as the seller transferred more net working capital than contemplated by the parties.

Depending on the objectives of the parties, a Net Working Capital Adjustment can either be upward-adjusting or downward-adjusting (i.e., a “one-way adjustment”), or can adjust both upward or downward (i.e., a “two-way adjustment”). It can also be dollar-for-dollar or subject to a deductible or cap. Purchase agreements usually call for an adjustment to the purchase price within 60 to 90 days after the closing since the accounting information needed to accurately calculate the actual amount of net working capital will most likely neither be available nor subject to verification by the parties on the closing date.

For example, in a two-way adjustment that is dollar-for-dollar, if the parties have agreed on a target amount of $1 million and, as of the closing date, it is determined that the actual net working capital is $800,000, the seller would be required to pay the buyer $200,000. However, if the actual net working capital as of the closing date is $1.2 million, the buyer would be required to pay the seller $200,000. If the actual net working capital at closing was $1 million, neither party would be required to make a payment as the actual amount of net working capital equals the target amount.

Aside from the target amount and whether the Net Working Capital Adjustment will be a one-way or two-way adjustment, the most important aspects of a Net Working Capital Adjustment provision are (1) the definition of “net working capital,” (2) the standards of accounting to be used in calculating net working capital, (3) which party initially determines the actual amount of net working capital as of the closing date and the access to relevant books and records by the non-preparing party, and (4) the dispute resolution process.

Definition of “Net Working Capital”
The purchase agreement should be as specific as possible regarding the accounts or financial line items that will be used to calculate net working capital. Attaching a list of the specific accounts or financial line items or a sample calculation as a schedule to the purchase agreement are ways to narrow the risk of a later misunderstanding. The calculation of the actual net working capital as of the closing should be consistent with the methodology used in setting the target amount so that any comparison to the target amount is not distorted and is on an “apples to apples” basis.

Standards of Accounting
Both the buyer and seller should specify precisely the standard of accounting that will be used in determining the actual amount of net working capital as of the closing. The two most common standards for calculating a Net Working Capital Adjustment are generally accepted accounting principles (GAAP) or GAAP applied consistently with historical financial statements of the target business. Even when GAAP is the selected standard of calculation for the Net Working Capital Adjustment, the parties must be careful to account for interpretations allowed within GAAP. This can require careful attention to the accounting methods underlying the target company’s financial statements and a separate schedule of acceptable accounting principles or assumptions attached to the purchase agreement. If GAAP applied consistently with historical financial statements of the target business is the selected standard of accounting, any modifications to such standards should be explicitly set forth in the purchase agreement in order to avoid any ambiguity.

Preparation of Actual Net Working Capital Amount
The parties must determine who will prepare the initial draft of the net working capital statement (the “Closing Statement”) showing the calculation of the actual amount of net working capital as of the closing so it can be compared to the target amount. Most commonly, the buyer prepares the initial draft of the Closing Statement since the buyer has possession of the books and records of the target business after the closing. However, the target may advocate that its accountants are best situated to prepare the Closing Statement due to their familiarity with the financial statements of the target business. Another aspect of Net Working Capital Adjustments that can be easily overlooked is timely access to books and records after the closing. Access to the relevant information is critical to reviewing and/or disputing the Net Working Capital Adjustment.

Dispute Resolution
Following the preparation of the Closing Statement, the non-preparing party and its advisors should have the opportunity to review it in detail. In the event of a dispute, the purchase agreement typically requires the buyer and the seller to work together for a short period of time using good faith efforts to resolve any disputes prior to engaging an independent accountant.

In addition to mathematical mistakes, disputes related to purchase price adjustments may arise when the financial components of an adjustment are not properly defined, creating questions as to whether certain transactions should be included in the amount of net working capital at closing. It is customary that disputes related to Net Working Capital Adjustments be resolved by an independent accountant rather than a court, since these disputes relate to the proper interpretation of GAAP and its application to financial information.

The purchase agreement should (1) describe the process for appointing an independent accountant to resolve disputes, (2) define the scope of the independent accountant’s review, (3) allocate the independent accountant’s fees between the parties, and (4) state that the determination by the independent accountant shall be binding and conclusive on the parties absent manifest error or fraud.

The purchase agreement also should clearly state that a party may not recover for a matter both through the purchase price adjustment and the indemnification provisions in the purchase agreement (i.e., no “double dipping”).

Conclusion
Net Working Capital Adjustment provisions can be a minefield of problems for drafters who fail to appreciate the complexity and nuances involved in such adjustments. Through careful and thoughtful drafting, Net Working Capital Adjustments can be drafted to avoid disputes and, if disputes do arise, provide for their resolution in an independent manner by a qualified expert.

Ballard Spahr’s Mergers and Acquisitions/Private Equity Group has extensive experience drafting and negotiating purchase agreements on behalf of its clients, who represent both buyers and sellers. For further information, please contact Craig Circosta at 215.864.8520 or circostac@ballardspahr.com, or Jocelyn K. O'Brien at 215.864.8723 or obrienj@ballardspahr.com.


North Carolina Amends Annual Fee Requirements for Mortgage Companies

North Carolina recently amended its statute regarding the annual licensing fees required for mortgage bankers, mortgage brokers, and mortgage servicers. Instead of charging a set renewal fee of $625 for licensed companies and $300 for branches, the North Carolina Office of the Commissioner of Banks (OCOB) will charge an annual assessment based on loan volume. The annual assessment will include a base amount of $2,000, plus an additional amount calculated for loan volumes over $1.5 million. Companies with both a lending and servicing volume will have those volumes added together for the purpose of the calculation. The new provisions also permit the OCOB to charge additional amounts for examinations or investigations that include “extraordinary review, investigation, or special examination” expenses. The amended provisions are effective on October 1, 2012.

Texas Issues, then Postpones Enforcement of, New Disclosure Requirements for Mortgage Banker Registrants, Mortgage Company Licensees, and Mortgage Loan Originator Licensees

The Texas Department of Savings and Mortgage Lending (SML) recently adopted new regulations that, in part, changed the disclosures required for Mortgage Company Licensees, Mortgage Banker Registrants, and Mortgage Loan Originators. Although the new disclosure requirements became effective July 5, 2012, the SML recently announced that due to practical implementation concerns, it would not enforce violations of the new requirements during examinations for using outdated disclosures until September 1, 2012. The SML further announced that the updated disclosure forms would be available on its website by July 9, 2012. We will discuss these changes in more depth in a future Mortgage Banking Update.

Correction: The Did You Know? section of our previous Mortgage Banking Update referenced an exemption in New York applicable to mortgage loan originators. The referenced exemption actually applies to mortgage bankers.

Reid F. Herlihy

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

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This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.