University of Michigan Law School
Civil Rights Litigation Clearinghouse
new search
page permalink
Case Name National Community Reinvestment Coalition v. Novastar Financial FH-DC-0008
Docket / Court 1:07-cv-00861 ( D.D.C. )
State/Territory District of Columbia
Case Type(s) Disability Rights-Pub. Accom.
Fair Housing/Lending/Insurance
Attorney Organization Relman, Dane & Colfax
Case Summary
On May 9, 2007, represented by the civil rights firm Relman, Dane & Colfax, Plaintiff brought this action against NovaStar, Inc. in the U.S. District Court for the District of Columbia. Plaintiff is a national non-profit organization with the mission and purpose of increasing fair and equal access ... read more >
On May 9, 2007, represented by the civil rights firm Relman, Dane & Colfax, Plaintiff brought this action against NovaStar, Inc. in the U.S. District Court for the District of Columbia. Plaintiff is a national non-profit organization with the mission and purpose of increasing fair and equal access to credit, capital, and banking services and products for all Americans, regardless of race, national origin, or disability. In its original complaint, Plaintiff asserted that Defendant, a private lending corporation, maintained a discriminatory policy of prohibiting lending to properties involving row houses, property on Indian reservations, and properties involved with adult foster care facilities. Plaintiff claimed that this disproportionately had an adverse effect on African Americans, Native Americans, and the disabled, in violation of the Fair Housing Act of 1968 ("FHA"), 42 U.S.C. §§ 3601 et seq. Plaintiff claimed that these discriminatory policies adversely affected it in two ways: (1) they interfered with its efforts to assist, educate and advocate for the promotion of fair lending, and (2) required it to commit scarce resources to investigate complaints and educate the public about Defendant's lending practices. Consequently, Plaintiff sought: (1) declaratory judgment that Defendant was violating the FHA, (2) preliminary and permanent injunctions enjoining Defendant from discriminating in this manner, (3) compensatory damages that would fully compensate Plaintiff for the diversion of resources and frustration of mission that was caused, (4) punitive damages for the willful, wanton, and reckless conduct, (5) attorney's fees.

On May 30, 2007, Defendant moved to dismiss the complaint, arguing that Section 3604 of the FHA should be read narrowly. If done so, Defendants argued, mortgage financing is not covered by the FHA. Judge Royce C. Lamberth denied this motion on April 28, 2008, stating that case law and the broad language of the FHA prohibited discriminatory mortgage financing.

Plaintiff moved on April 28, 2008, for an entry of default, arguing that Defendant had failed to answer their complaint. However, Judge Lamberth denied this motion on May 1, 2008, providing no reason. 2008 WL 977351 (D.D.C. 2008).

On March 27, 2009, Plaintiff filed an amended complaint, adding W. Lance Anderson, the president of NovaStar, as a co-defendant. Anderson moved to dismiss this complaint on April 27, 2009, arguing that the court lacked personal jurisdiction. Judge Lambert denied Anderson's motion to dismiss on June 22, 2009, in which he stated it was clear that Anderson exerted significant influence over NovaStar's policies, procedures and operations, and is more than just "an employee" of the entity. 631 F. Supp. 2d 1 (D.D.C. 2009).

On July 13, 2009, Judge Lambert ordered a stay on this case for mediation. The parties submitted a stipulation of dismissal with prejudice on December 1, 2009, citing an undisclosed settlement agreement. However, according to the Relman, Dane & Colfax website, the parties agreed to three settlements, in which "the mortgage lenders and their affiliates agreed to discontinue the discriminatory policies, implement training programs to ensure their practices are compliant with the Fair Housing Act and compensate the NCRC for the diversion of its resources and the frustration of its mission caused by the discriminatory practices. Altogether the three mortgage companies paid more than $1 million to resolve the claims."

Dan Osher - 06/19/2013


compress summary

- click to show/hide ALL -
Issues and Causes of Action
click to show/hide detail
Issues
Content of Injunction
Develop anti-discrimination policy
Discrimination Prohibition
Defendant-type
Bank or credit provider
Disability
disability, unspecified
Discrimination-area
Lending
Discrimination-basis
Disability (inc. reasonable accommodations)
National origin discrimination
Race discrimination
General
Disparate Impact
Pattern or Practice
National Origin/Ethnicity
Hispanic
Plaintiff Type
Private Plaintiff
Race
American Indian/Alaskan Native
Black
Causes of Action Fair Housing Act/Fair Housing Amendments Act (FHAA), 42 U.S.C. §§ 3601 et seq.
Defendant(s) NovaStar, Inc.
Plaintiff Description A national non-profit organization with the mission and purpose of increasing fair and equal access to credit, capital, and banking services and products for all Americans, regardless of race, national origin, or disability.
Indexed Lawyer Organizations Relman, Dane & Colfax
Class action status sought No
Class action status granted No
Prevailing Party Plaintiff
Public Int. Lawyer No
Nature of Relief Injunction / Injunctive-like Settlement
Source of Relief Settlement
Form of Settlement Private Settlement Agreement
Order Duration not on record
Case Closing Year 2009
Case Ongoing No
Docket(s)
1:07-cv-861 (D.D.C.) 12/01/2009
FH-DC-0008-9000.pdf | Detail
PACER [Public Access to Court Electronic Records]
General Documents
Memorandum and Order 03/31/2008 (2008 WL 977351) (D.D.C.)
FH-DC-0008-0004.pdf | WESTLAW | Detail
Document Source: PACER [Public Access to Court Electronic Records]
First Amended Complaint for Declaratory and Injunctive Relief and Damages 03/27/2009
FH-DC-0008-0001.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Memorandum and Order 06/22/2009 (631 F.Supp.2d 1) (D.D.C.)
FH-DC-0008-0002.pdf | WESTLAW| LEXIS | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Stipulation of Dismissal 12/01/2009
FH-DC-0008-0003.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Judges Lamberth, Royce C. (FISC, D.D.C.)
FH-DC-0008-0002 | FH-DC-0008-0004 | FH-DC-0008-9000
Monitors/Masters None on record
Plaintiff's Lawyers Babinecz, Elena G. (California)
FH-DC-0008-9000
Blower, Bradley Howard (District of Columbia)
FH-DC-0008-0001 | FH-DC-0008-9000
Cacace, Megan (District of Columbia)
FH-DC-0008-9000
Kider, Mitchel H (District of Columbia)
FH-DC-0008-0003
Relman, John Peter (District of Columbia)
FH-DC-0008-0001 | FH-DC-0008-0003 | FH-DC-0008-9000
Schlactus, Glenn (District of Columbia)
FH-DC-0008-0001 | FH-DC-0008-0003 | FH-DC-0008-9000
Defendant's Lawyers Perryman, Brian Patrick (District of Columbia)
FH-DC-0008-9000
Souders, David (District of Columbia)
FH-DC-0008-0003 | FH-DC-0008-9000
Other Lawyers None on record

- click to show/hide ALL -

new search
page permalink

- top of page -