Justia Banking Opinion Summaries

Countrywide appealed a class certification order of the bankruptcy court. Plaintiffs are former chapter 13 debtors with mortgages serviced by Countrywide. Plaintiffs claimed, among other things, that the fees Countrywide charged while plaintiffs' bankruptcy cases were still pending were unreasonable, unapproved, and undisclosed under Federal Rule of Bankruptcy Procedure 2016(a). Because the bankruptcy court's decision was not an abuse of discretion, the court affirmed its grant of class certification for plaintiff's injunctive relief claim. Because the court's precedence rejected the fail-safe class prohibition, the court concluded that the bankruptcy court did not abuse its discretion when it defined the class in the present case. Because the court concluded that Countrywide's Rule 59(e) motion for reconsideration was not based on newly discovered evidence, the court did not revisit the bankruptcy court's separate merits denial of the motion. View "Rodriguez, et al v. Countrywide Home Loans, Inc." on Justia Law

Former Fifth Third employees participated in a defined contribution retirement plan with Fifth Third as trustee. Participants make voluntary contributions and direct the Plan to purchase investments for their individual accounts from preselected options. The options included Fifth Third Stock, two collective funds, or 17 mutual funds. Fifth Third makes matching contributions for eligible participants that are initially invested in the Fifth Third Stock Fund but may be moved later to other investment options. Significant Plan assets were invested in Fifth Third Stock. Plan fiduciaries incorporated by reference Fifth Third’s SEC filings into the Summary Plan Description. Plaintiffs allege that Fifth Third switched from being a conservative lender to a subprime lender, its loan portfolio became increasingly at-risk, and it either failed to disclose or provided misleading disclosures. The price of the stock declined 74 percent. The district court dismissed a complaint under the Employee Retirement Income Security Act, 29 U.S.C. 1001, based on a presumption that the decision to remain invested in employer securities was reasonable. The Sixth Circuit reversed, holding that the complaint plausibly alleged a claim of breach of fiduciary duty and causal connection regarding failure to divest the Plan of Fifth Third Stock and remove that stock as an investment option. View "Dudenhoefer v. Fifth Third Bancorp" on Justia Law

Holocaust survivors and heirs of other Holocaust victims sued, alleging that the Hungarian National Bank and Hungarian National Railway participated in expropriating property from Hungarian Jews during the Holocaust. Railway plaintiffs claimed subject matter jurisdiction under the expropriation exception to the Foreign Sovereign Immunities Act, 28 U.S.C. 1605(a)(3), and assert: takings in violation of international law, aiding and abetting genocide, complicity in genocide, violations of customary international law, unlawful conversion, unjust enrichment, fraudulent misrepresentation, and accounting. Bank plaintiffs claimed subject matter jurisdiction under the FSIA expropriation and waiver exceptions, 28 U.S.C. 1605(a)(1) and assert: genocide, aiding and abetting genocide, bailment, conversion, constructive trust, and accounting. They sought certifications as class actions, seeking to have the railway held responsible for approximately $1.25 billion, and the bank held jointly and severally responsible with private banks for approximately $75 billion. The district court declined to dismiss. The Seventh Circuit held that it had appellate jurisdiction under the collateral order doctrine and remanded with instructions that plaintiffs either exhaust available Hungarian remedies identified by defendants or present a legally compelling reason for failure to do so. The court should allow jurisdictional discovery with respect to whether the railway is engaged in “commercial activity” in the U.S. View "Abelsz v. Magyar Nemzeti Bank" on Justia Law

Holocaust survivors and heirs of other Holocaust victims sued, alleging that defendant banks participated in expropriating property from Hungarian Jews during the Holocaust. Invoking subject-matter jurisdiction under the Foreign Sovereign Immunities Act, 28 U.S.C. 1330(a), the Alien Tort Statute, 28 U.S.C.1350, and federal question jurisdiction, 28 U.S.C. § 1331, they alleged: genocide, aiding and abetting genocide, bailment, conversion, constructive trust, and accounting. Plaintiffs sought certification as a class action and asked that each bank be held jointly and severally responsible for damages of approximately $75 billion. This case and a parallel case against the Hungarian national railway have produced nine appeals and mandamus petitions. The district court declined to dismiss for lack of personal jurisdiction. The Seventh Circuit, noting that such a decision would ordinarily not be reviewable, stated that: “This is the rare case, however, in which it is appropriate for this court to exercise its discretion to issue a writ of mandamus to confine the district court to the exercise of its lawful jurisdiction” The court cited the extraordinary scale of the litigation, the inherent involvement with U.S. foreign policy, and the “crystal clarity” of the lack of foundation for exercising general personal jurisdiction over the banks. View "Abelesz v. OTP Bank" on Justia Law

Plaintiffs David McCorkle and William Pender appealed a district court order dismissing two of their class action claims against Bank of America Corporation for alleged violations of certain provisions of the Employment Retirement Income Security Act of 1974 (ERISA). Their claims centered on the Bank's use of a normal retirement age (NRA) that allegedly violated ERISA in calculating lump sum distributions and further ran afoul of ERISA's prohibition of "backloading" the calculation of benefit accrual. Upon review, the Fourth Circuit agreed with the district court's conclusion that Plaintiffs failed to state a claim upon which relief could be granted, and it affirmed the district court's judgment to dismiss those claims. View "Pender v. Bank of America Corp." on Justia Law

The issue before the Eleventh Circuit concerned a private securities fraud class action suit brought against a bank holding company and its management. State-Boston Retirement System, a shareholder and lead plaintiff, sought to prove that the holding company had misrepresented the level of risk associated with commercial real estate loans held by its subsidiary. After the trial, the District Court submitted the case to the jury on a verdict form seeking general verdicts and answers to special interrogatories. When the jury returned a verdict partially in favor of State-Boston, the holding company moved for judgment as a matter of law. Perceiving an inconsistency between two of the jury's interrogatory answers, the District Court discarded one of them and granted the motion on the basis of the remaining findings. The Eleventh Circuit concluded that was error: "[w]hen a court considers a motion for judgment as a matter of law -even after the jury has rendered a verdict- only the sufficiency of the evidence matters. . . .The jury’s findings are irrelevant." Despite the District Court’s error, the Eleventh Circuit concluded that the evidence was insufficient to support a finding of loss causation, an element required to make out a securities fraud claim. The Court therefore affirmed. View "State-Boston Retirement System v. BankAtlantic Bancorp, Inc." on Justia Law

Four named plaintiffs filed three separate class action lawsuits in state court alleging, inter alia, that three Missouri credit unions, by participating in a subprime motor vehicle lending and investment program administered by now-bankrupt Centrix Financial, LLC, violated provisions of the Missouri Uniform Commercial Code (Mo UCC) and the Missouri Merchandising Practices Act (MMPA). Defendants removed under the Class Action Fairness Act and moved to dismiss the complaints. The district court issued three identical orders dismissing all the state law claims. The Eighth Circuit Court of Appeals consolidated the three appeals and affirmed, holding that plaintiffs' Mo UCC claims were time-barred and that the MMPA expressly exempted Missouri credit unions. View "Rashaw v. United Consumers Credit Union" on Justia Law

In this purported class action on behalf of borrowers holding home mortgage loans serviced by Bayview, plaintiffs claimed that Bayview improperly added fees to borrowers' accounts in violation of the West Virginia Consumer Credit Protection Act, W. Va. Code 46A-1-101 through 46A-8-102. At issue was whether, under the statute of limitations, "the due date of the last scheduled payment of the agreement" was June 5, 2007, the loan acceleration date set by Bayview. The court concluded that the acceleration date was the operative date for purposes of applying the statute of limitations, because no further payments were scheduled after that date. Thus, the court affirmed the district court's judgment that the statute of limitations began to run from the acceleration date, and that, therefore, plaintiffs' claims were time barred. View "Delebreau v. Bayview Loan Servicing, LLC" on Justia Law

E-Shops filed a class action complaint, after receiving a number of chargebacks resulting from fraudulent use of U.S. Bank credit cards, alleging that U.S. Bank knowingly allowed itself to be an instrument of the fraud, thereby making E-Shop's performance under its contract with its merchant bank more expensive. The district court dismissed E-Shops complaint for failure to state a claim. The court affirmed, holding that E-Shops failed to satisfy the required pleading standards. View "E-Shops Corp. v. U.S. Bank Nat'l Assoc." on Justia Law

Plaintiff appealed the district court's judgment granting Chase's motion to dismiss her putative class action claim brought pursuant to the Maryland Credit Grantor Closed End Credit Provisions (CLEC), Md. Code Ann., Com. Law 12-1001 et seq. The district court concluded that federal regulations preempted relevant portions of the CLEC and that the retail sales installment contract signed by plaintiff and Chase's predecessor in interest did not mandate that Chase comply with the CLEC. The court held that the district court erred in concluding that the CLEC was preempted by the National Bank Act (NBA), 12 U.S.C. 1 et seq., or the Office of the Comptroller of the Currency (OCC) regulations. The court also held that the district court erred in dismissing plaintiff's breach of contract claim and remanded for further proceedings. View "Epps v. JP Morgan Chase Bank, N.A." on Justia Law