Banking institutions Headed for Overall Victory in Agent Charges Class Actions | Balch & Bingham LLP

Two times this yr, Balch & Bingham documented on the wave of “Agent Fee” class steps against loan providers who designed PPP loans beneath the CARES Act. At just one position, there were about sixty such lawsuits unfold across the federal courts, alleging that banking institutions were essential to pay back CPAs and some others who assisted debtors with personal loan purposes.

Considering that then, 8 distinctive federal judges have now dominated in favor of the banks and dismissed Agent Charge course actions. These situations recognized “every courtroom that has decided this concern has held that the CARES Act does not have to have creditors to pay out agent fees absent an arrangement to do so” and dismissed a myriad of federal and point out law statements for expenses. For the Agent Fee Plaintiffs, there is no conclude to these mounting losses in sight, and there is authentic explanation to issue regardless of whether these suits will continue on.

The most new decisions came from Alabama and California. In Alabama, a federal judge dismissed Leigh, King, Norton, Underwood LLC v. Locations, 2:20-cv-00591 (N.D. Al.) as moot soon after learning the Plaintiff experienced truly cashed a examine from Regions in payment of the alleged agent fees. Shortly thereafter, two different California judges dismissed the similar agent fee instances of Am. Movie Duplicating Inc. v. Citigroup Inc., No. 20-03815 (C.D. Cal.) and Am. Movie v. City Nat. Lender, 2:20-cv-04036 (C.D. Cal.). Last week, in a ultimate blow seemingly sealing off any route for Plaintiffs, a further California judge dismissed Lopez v. Lender of The us, 20-cv-04172-JST (N.D. Cal.). Even though Lopez was granted 30 days to file an amended criticism, the court docket expressed doubt that he “could at any time set up the entitlement to agent expenses that is a predicate to just about every of his claims.”

These choices include to the banks’ 4 preceding movement to dismiss victories in Activity & Wheat CPA, PA v. Servisfirst Financial institution et al., No. 3:20-cv-05425 (N.D. Fla.), the initially-submitted Agent Service fees situation in the nation, Johnson, et al v. JPMorgan Chase, et al., 20-cv-4100 (S.D.N.Y.), which was decided by the really highly regarded Decide Jed S. Rakoff, Steven L. Steward & Associates, P.A. v. Truist Lender and Truist Fiscal Corp., 6:20-cv-1083 (M.D. Fla.), and Sanchez v. Lender of South Texas, 7:20-cv-00139 (S.D. Tex.).

Banks scored other vital victories along the way. Even just before courts began granting motions to dismiss, the Judicial Panel on Multidistrict Litigation rejected efforts to drag more than 100 unrelated banking institutions throughout the country and consolidate all 62 then-pending putative class steps in a multidistrict litigation. Amidst Plaintiffs’ mounting motion to dismiss losses, the court docket in Unbehagen Tax & Accounting, Inc. v. JP Morgan Chase Financial institution, NA, 8:20-cv-01709 (M.D. Fla.) dealt Plaintiffs a procedural blow by severing statements from above two dozen unrelated banking companies and ordering Plaintiffs to dismiss their omnibus lawsuit and refile separate actions from every bank. (A Balch consumer was to begin with sued in Unbehagen but was dismissed prior to the courtroom issued its severance order.). The Unbehagen Plaintiffs dismissed with no refiling. Some other Plaintiffs have also been dismissing circumstances voluntarily. Some of the dismissed steps are basically duplicative of cases from the identical defendant, even by the identical established of Plaintiffs’ counsel.

Unless an appellate courtroom unexpectedly reinstates a case, it seems as while the banking institutions are headed for full victory.

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