By Chris Bruce
A federal appeals court in California blocked Los Angeles claims of racially biased lending on the part of Bank of America and Wells Fargo ( Los Angeles v. Bank of Am. Corp. , 9th Cir., 15-cv-55897, 5/26/17 , Los Angeles v. Wells Fargo & Co. , 9th Cir., 15-cv-56157, 5/26/17 ).
At issue are separate but related Fair Housing Act lawsuits the city brought in 2013, alleging discriminatory lending that spurred foreclosures and harmed the Los Angeles economy.
In separate rulings May 26, a three-judge panel said the city failed to meet pleading standards under a 2015 U.S. Supreme Court decision. In the 2015 case, the Supreme Court said statistical disparities may support bias claims, but only if plaintiffs show a “robust” cause and effect link. Los Angeles failed to make that showing, the three-judge panel said.
The panel also ruled for Wells Fargo and Bank of America on the city’s claim of unjust enrichment. The city’s injuries — lost tax revenue and higher spending for city services — “did not confer a benefit” on either bank, the panel said. It affirmed lower court rulings for both banks.
The May 26 rulings, which cannot be cited as precedent, came nearly a month after the Supreme Court May 1 said in an unrelated case that Miami may be able to file its own Fair Housing Act suits against Bank of America and Wells Fargo. In its May 26 rulings, the Ninth Circuit panel said there was no need to reach matters raised in the Supreme Court’s May 1 decision.
Frank Mateljan, a spokesman for Los Angeles City Attorney Mike Feuer, said the city attorney’s office is reviewing the rulings.
Bank of America spokesman Lawrence Grayson said the bank is “pleased that the court found that the city failed to articulate a viable legal claim and affirmed the dismissal of the lawsuit.”
Wells Fargo spokesman Tom Goyda said his bank is pleased at “the appellate court’s very quick decision to uphold the district court’s thoughtful ruling and to confirm the dismissal of the Los Angeles City Attorney’s mortgage case against Wells Fargo.”
To contact the reporter on this story: Chris Bruce in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Michael Ferullo at MFerullo@bna.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)