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Baltimore City's FHA Claims Against Wells Fargo Bank Were Too Broad To Survive The Bank's Motion to Dismiss
(January 2009) By Tamiya N. Wilkes, Associate.
For more information, contact Paul Farquharson.
Mayor and City Council of Baltimore v. Wells Fargo Bank, et al.,
Civil No.: JFM 1:08 CV-00062 (D. Md. January 6, 2010) |
View Opionion
The Mayor and City Council of Baltimore ("the City") filed
suit in the United States District Court for the District of Maryland ("the
Court"), against Wells Fargo Bank, N.A. and Wells Fargo Financial Leasing, Inc.
(collectively "Wells Fargo"), alleging that Wells Fargo engaged in predatory and
discriminatory lending practices in violation of the Fair Housing Act ("FHA"),
42 U.S.C. §§ 3601 et seq. Specifically, the City alleged that Wells Fargo
engaged in the practice of reverse redlining, targeting the City's underserved
and vulnerable minority neighborhoods. According to the City, Wells Fargo's
lending practices led to a disproportionately high rate of foreclosure in the
City's African American communities, causing an increase in abandoned and vacant
homes in those areas, which in turn has allegedly caused financial harm to the
City. Wells Fargo filed a Motion to Dismiss arguing that the City lacked
standing to file suit.
In order to establish standing, the party making a claim
bears the burden of proving that "(1) the plaintiff suffered an injury in fact .
. . that is concrete and particularized, and actual or imminent . . . ; (2)
there is a causal connection between the injury and the conduct complained of;
and (3) it is likely, as opposed to merely speculative, that the injury will be
redressed by a favorable decision of the court." South Carolina Wildlife Fed'n
v. Limehouse, 549 F.3d 324, 329 (4th Cir. 2008) (citing Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560-61 (1992)).
The Court found that the City's allegations against Wells
Fargo did not amount to more than an "attenuated causal connection" that was
insufficient to show that the City's generalized damages were "fairly traceable"
to the actions of Wells Fargo. In other words, the City failed to prove that the
more than 33,000 city homes that have been subjected to foreclosure filings were
caused by Wells Fargo's alleged reverse redlined loans.
The Court, therefore, granted Wells Fargo's Motion to
Dismiss; however, the Court granted leave for the City to file a Second Amended
Complain asserting narrower claims if it choose to do so.
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