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Civil Rights Litigation Clearinghouse
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Case Name Payares v. J.P. Morgan Chase FH-CA-0010
Docket / Court 2:07-cv-05540 ( C.D. Cal. )
State/Territory California
Case Type(s) Fair Housing/Lending/Insurance
Case Summary
On August 23, 2007, a Latino borrower filed a complaint in the U.S. District Court for the Central District of California against Chase Bank USA and JP Morgan Chase & Co, under the Equal Credit Opportunity Act, 15 U.S.C. § 1691 et seq. ("ECOA"), the Fair Housing Act, 42 U.S.C. § 3601 et seq. (" ... read more >
On August 23, 2007, a Latino borrower filed a complaint in the U.S. District Court for the Central District of California against Chase Bank USA and JP Morgan Chase & Co, under the Equal Credit Opportunity Act, 15 U.S.C. § 1691 et seq. ("ECOA"), the Fair Housing Act, 42 U.S.C. § 3601 et seq. ("FHA"), and 42 U.S.C. § 1981. The plaintiff alleged racially discriminatory lending practices in connection with home mortgage loan he took out from Chase. Specifically, he alleged that Chase was engaged in both intentional and disparate impact discrimination through its development and implementation of mortgage pricing policies and procedures that resulted in less favorable loan conditions to non-white borrowers as compared to similarly situated white borrowers.

The case then went into mediation. In August 14, 2008, the parties entered a joint stipulation to dismiss JP Morgan as a defendant. On August 15, 2008, the Court (Judge Andrew Guilford) ordered that JP Morgan was to be dismissed without prejudice, but the plaintiff reserved a right to conduct discovery with respect to it.

On January 16, 2009, the plaintiff filed a first amended complaint. The complaint was a class action allegation, adding another two named plaintiffs, against Chase Bank USA. The amended complaint alleged that Chase engaged in practices that had a disparate impact on minorities (defined as any non-Caucasian minority). It was alleged that Chase developed mortgage pricing policies that provided financial incentives to its authorized loan officers, mortgage brokers and corresponding lenders to make subjective decisions to increase interest rate and charge additional fees to minority borrowers. That allegedly led to minorities receiving higher interest rates and costs than non-minority borrowers in a similar situation. The plaintiff sought injunctive, declaratory and equitable relief, and damages.

The parties eventually settled on March 10, 2010. Under the agreement, the parties sought to certify following class: "All African-American and Hispanic borrowers who, since August 23,2005, obtained a mortgage loan originated through Chase's wholesale channel." The minority borrowers that paid off their loans could claim either a $300 credit towards the closing costs of his or her next loan with Chase, or a check for $70. Existing non-delinquent borrowers could receive either a $300 credit, or a $90 check. Above borrowers, and delinquent borrowers, were entitled to "red carpet access" for loan modification services with dedicated 800 numbers, and dedicated personnel with fair housing and lending training. The "red carpet access" was to be in effect for 2 years from the date of the agreement. The defendant had to submit quarterly reports during that period to class counsel, as well as maintain a settlement website. The defendant agreed to pay $1,95 million in attorney's fees. Each class representative received $5,000.

On May 17, 2010, the Court ordered a preliminary approval of the settlement agreement, pending a fairness hearing. On November 9, 2010, the Court issued a final judgment, approving the settlement agreement. The court certified the class above as a settlement class. The Court retained jurisdiction over the agreement for its duration.

Zhandos Kuderin - 07/22/2014


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Issues and Causes of Action
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Issues
Content of Injunction
Develop anti-discrimination policy
Provide antidiscrimination training
Reporting
Defendant-type
Bank or credit provider
Discrimination-area
Lending
Discrimination-basis
National origin discrimination
Race discrimination
General
Disparate Impact
Housing
Pattern or Practice
Predatory lending
National Origin/Ethnicity
Hispanic
Plaintiff Type
Private Plaintiff
Race
Black
Race, unspecified
Causes of Action Fair Housing Act/Fair Housing Amendments Act (FHAA), 42 U.S.C. §§ 3601 et seq.
Equal Credit Opportunity Act (ECOA), 15 U.S.C. § 1691
42 U.S.C. § 1981
Defendant(s) Chase Bank
Plaintiff Description Minority borrowers
Indexed Lawyer Organizations None on record
Class action status sought Yes
Class action status granted Yes
Prevailing Party Plaintiff
Public Int. Lawyer No
Nature of Relief Attorneys fees
Damages
Injunction / Injunctive-like Settlement
Source of Relief Settlement
Form of Settlement Court Approved Settlement or Consent Decree
Order Duration 2010 - 2012
Case Closing Year 2012
Case Ongoing No
Additional Resources
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Case Studies Insurer Must Pay $100.5 Million in Redlining Case
The New York Times
Written: Oct. 27, 1998
By: Joseph B. Treaster
[ Detail ] [ External Link ]

  Nationwide Settles Virginia Redlining Suit
Property Casualty 360
Written: May. 06, 2000
By: Amanda Levin
[ Detail ] [ External Link ]

  The Origins of Fair Lending Litigation
Written: Dec. 04, 2008
By: Andrew Nash (Washington University in St. Louis)
[ Detail ] [ PDF ] [ External Link ]

Docket(s)
2:07-cv-5540 (C.D. Cal.) 03/11/2011
FH-CA-0010-9000.pdf | Detail
PACER [Public Access to Court Electronic Records]
General Documents
Order [To Dismiss Defendant J.P. Morgan Chase & Co. Without Prejudice] 08/15/2008 (C.D. Cal.)
FH-CA-0010-0004.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
First Amended Class Action Complaint 01/16/2009
FH-CA-0010-0001.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Settlement Agreement 03/10/2010
FH-CA-0010-0005.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Order of Preliminary Approval of Settlement 05/17/2010 (C.D. Cal.)
FH-CA-0010-0002.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Final Judgment and Order of Dismissal with Prejudice 11/09/2010 (C.D. Cal.)
FH-CA-0010-0003.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Judges Collins, Audrey B. (C.D. Cal.)
FH-CA-0010-0004
Guilford, Andrew J. (C.D. Cal.)
FH-CA-0010-0002 | FH-CA-0010-0003 | FH-CA-0010-9000
Monitors/Masters None on record
Plaintiff's Lawyers Becker, Nance F. (California)
FH-CA-0010-0001 | FH-CA-0010-9000
Chavez, Mark A. (California)
FH-CA-0010-0001 | FH-CA-0010-0005 | FH-CA-0010-9000
Ciolko, Edward W. (Pennsylvania)
FH-CA-0010-0001 | FH-CA-0010-9000
Fialco, Lisa (California)
FH-CA-0010-9000
Friedman, Andrew S. (Arizona)
FH-CA-0010-0005 | FH-CA-0010-9000
Gertler, Jonathan E. (California)
FH-CA-0010-0001 | FH-CA-0010-9000
Harrison, Wendy J. (Arizona)
FH-CA-0010-0001 | FH-CA-0010-9000
Hurst, Leslie E. (California)
FH-CA-0010-0001 | FH-CA-0010-9000
Klein, Gary E. (Massachusetts)
FH-CA-0010-0001 | FH-CA-0010-0005 | FH-CA-0010-9000
Miller, Coty R. (California)
FH-CA-0010-0001 | FH-CA-0010-9000
Moffa, Donna Siegel (Pennsylvania)
FH-CA-0010-0001 | FH-CA-0010-0005
Muhic, Peter A. (Pennsylvania)
FH-CA-0010-0001 | FH-CA-0010-9000
Pintar, Theodore J. (California)
FH-CA-0010-0001 | FH-CA-0010-0005 | FH-CA-0010-9000
Plutzik, Alan R. (California)
FH-CA-0010-9000
Stoia, John J. (California)
FH-CA-0010-0001 | FH-CA-0010-9000
Taren, Jeffrey L. (Illinois)
FH-CA-0010-0001 | FH-CA-0010-0005
Weeden, Joseph A. (Pennsylvania)
FH-CA-0010-0001
Defendant's Lawyers Agoglia, Michael J. (California)
FH-CA-0010-0005 | FH-CA-0010-9000
Garbers, Wendy Marie (California)
FH-CA-0010-9000
Other Lawyers None on record

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