Collector - August 2020 - 46

IAF

Making a Difference
A closer look at the Industry Advancement Fund and the various ways it helps ACA members succeed.
By Colin Winkler

W

hen Andy Warhol suggested
in 1975's Philosophy of Andy
Warhol that people ought to take
an active role in changing their lives, the
context suggests that he meant it more as a
statement on perspective than on strategy.
But the point remains: if you make change
rather than merely witness change, you'll
probably be much more satisfied with
the outcome. Certainly, you'll have more
ownership over it.
In 2012, ACA International's Board of
Directors, under the leadership of thenpresident Tom Stockton, decided to position
ACA's members to make a change for the
ARM industry. Less than a year later, in
July 2013, ACA announced that the Board
of Directors had approved a new Industry
Advancement Fund to serve as the first and
only strategic initiative devoted to legal
advocacy on behalf of the industry in courts
across the nation.
ACA always had a legal defense fund
of some sort, but historically its resources
were limited because contributions were
voluntary. By making IAF assessments a
permanent fixture of ACA membership
in 2013, Stockton helped ACA build a
sustainable legal fund.
"I found myself wondering why, as
an agency owner, I'm doing everything
that I'm supposed to be doing [from a
compliance perspective], but I still had to
settle all these frivolous lawsuits," Stockton
said. "I saw the IAF as a way to put an end
to the easy settlements that the plaintiff 's
bar had come to rely on. Looking back
on the effect that the fund has had in
changing the game over the years, I'm
proud of what we have accomplished."
Today, with the support of ACA members,
the IAF has grown and become a potent
force for industry advocacy, serving to
support members in individual litigation; to

46

intervene wherever and whenever needed as
an amicus curiae (friend of the court); and
to fund special legislative and regulatory
advocacy initiatives when appropriate.
Recently, ACA began internal
discussions to re-name the IAF's
component programs so that they better
describe the current initiatives and
programs funded by the IAF. With that
effort underway, it seems high time to take
a closer look at the present-day facets of
the IAF and the various ways that the IAF
helps ACA members succeed.

traditional economic incentives of settlement
versus litigation. Recent decisions bear out
this cumulative effect.
For example, in Cobb v. ERC, No. 3:17cv-01629 (D. Conn. Mar. 10, 2020), after
the court granted summary judgment for
defendant Enhanced Recovery Company,
LLC, it went on to impose sanctions on
plaintiff 's counsel on the grounds that
counsel's entire approach to the litigation
demonstrated an "expectation that ERC
should and would simply settle and pay,"
thus leading the court to conclude "that the

"They always say time changes things, but
you actually have to change them yourself."
-ANDY WARHOL

"TRADITIONAL" IAF SUPPORT
Today, when ACA staff members talk
about "traditional" IAF support, they're
talking about providing direct funding
to a member in furtherance of the fund's
original purpose: creating an economic
incentive to bring a winnable case of
industry-wide significance to a judicial
decision point. As many members know, it
has traditionally been less expensive to settle
nuisance claims than litigate them even to
an early-stage determination like a motion to
dismiss or a summary judgment motion.
Over time, however, by helping members
bear the cost of litigating these nuisance
claims to the point of a judicial opinion, the
IAF has helped the industry accrete a body
of positive decisional law that has suppressed
nuisance litigation brought for the purpose
of obtaining a settlement based on those

case [had been] brought for an improper
purpose, to induce ERC to settle rather than
to redress wrongs suffered by Plaintiff."
As a result, the court awarded ERC
nearly $42,000 in attorney's fees and costs.
While the IAF did not contribute funding
to this case, its cumulative effect over the
past seven years plainly helped pave the way
for this decision.
ACA's Judicial Committee has standing
authority to award an ACA member up to
$25,000 in traditional IAF support subject to
certain conditions set forth in the application
(e.g., funds may not be used to settle
litigation, as that would be contrary to the
purposes of the IAF).
In reviewing applications for traditional
IAF support, ACA's Judicial Committee will
consider whether the case has industry-wide
significance; the likelihood of success on the

ACAINTERNATIONAL.ORG


http://www.ACAINTERNATIONAL.ORG

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