DJSP, Processing Company for Foreclosure Attorney David J. Stern, Lays Off 96 Employees

David J. Stern, whose law firm is under investigation for foreclosure fraud.

​The latest round of layoffs at DJSP Enterprises, the foreclosure processing company for the law offices of David J. Stern, could add fuel to a class action case against DJSP and Stern, according to a lawyer for the companies' former employees.

On Tuesday, 96 people lost their jobs, following several previous rounds of cutbacks and bringing total layoffs to almost 1,000. Stern's firm is under investigation by the Florida Attorney General's office for fraudulent foreclosure practices and has lost most of its biggest clients including Frannie Mae and Freddie Mac.

The lawsuit filed by a group of former DJSP employees in late November alleges that Stern violated the Worker Adjustment and Retraining Notification (WARN) Act, which conditionally requires 60 days notice of mass layoffs. Attorney Gary Farmer, one of several lawyers for the plaintiffs, says this latest round of layoffs may result in additions to the list of plaintiffs on the current case or it may turn into a second case. 

"We're just trying to assess the situation...Our position in both cases will be the same -- that the downturn in business that Stern is now experiencing was not unforeseeable," Farmer says.

Yesterday, Farmer and the other lawyers on the case filed their Motion for Class Action Certification. Farmer says he was overwhelmed by the nearly 300 former employees who reached out to be part of the case.

The latest entry for DJSP in state WARN records shows that the company gave notice and laid off 96 employees on the same day, February 15, 2011. "I don't know why they keep doing this," Farmer says, "They filed a notice, and then they fire people immediately."

According to the state notice filed by DJSP, this round of lay-offs may precede "further terminations" that "may be necessary within the next sixty days and the company may cease to operate within that timeframe..."

This last round of layoffs accounted for about two-thirds of the remaining staff at DJSP, the spokesperson for the company told the Sentinel.

The lawyer for DJSP directed us to the company's spokesperson. We are working on getting in touch with him and will update accordingly.

This post reflects the following correction: The plaintiffs' lawyers were not granted a two-week extension to file their Motion for Class Action Certification. Dawn M. Rapoport, one of the plaintiffs' lawyers, informed the Juice that they filed it yesterday, the day it was due.

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