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Case Name Adkins v. Morgan Stanley FH-NY-0020
Docket / Court 1:12-cv-07667 ( S.D.N.Y. )
State/Territory New York
Case Type(s) Fair Housing/Lending/Insurance
Attorney Organization ACLU Chapters (any)
ACLU National (all projects)
ACLU of Michigan
Case Summary
On October 15, 2012, five black Detroit residents and Michigan Legal Services filed this class-action lawsuit in the U.S. District Court for the Southern District of New York against Morgan Stanley under the Fair Housing Act (FHA), 42 U.S.C. §§ 3601 et seq., the Equal Credit Opportunity Act (ECOA) ... read more >
On October 15, 2012, five black Detroit residents and Michigan Legal Services filed this class-action lawsuit in the U.S. District Court for the Southern District of New York against Morgan Stanley under the Fair Housing Act (FHA), 42 U.S.C. §§ 3601 et seq., the Equal Credit Opportunity Act (ECOA), 15 U.S.C. § 1691, and state law.

The plaintiffs, represented by the ACLU, the National Consumer Law Center, and private counsel, asked the court for injunctive relief, declaratory relief, damages, and disgorgement, claiming that Morgan Stanley discriminated against black homeowners in the secondary mortgage market. Specifically, the plaintiffs alleged that Morgan Stanley encouraged originating subprime lender New Century to issue large volumes of high-cost and high-risk residential mortgage loans. Morgan Stanley then packaged these loans for investors through securitization. Morgan Stanley's aggressive development of these loan pools, the suit alleged, disparately impacted African American borrowers, who were more likely to receive these harmful loans than white borrowers because New Century targeted communities of color.

In December 2012, Morgan Stanley filed a motion to dismiss, which the District Court (Judge Harold Baer) granted in part and denied in part on July 25, 2013. The District Court dismissed the plaintiffs' ECOA and state law claims as untimely. However, the court allowed the plaintiffs' FHA claim to proceed, reasoning that the statute of limitations did not begin to run until the plaintiffs first consulted with attorneys in 2012, rather than when New Century stopped originating loans in 2007. The court also found that the plaintiffs had successfully alleged a disparate impact discrimination claim under the FHA. Morgan Stanley sought immediate review of this decision by the Second Circuit, but the District Court denied their motion to certify for immediate appeal.

On June 10, 2014, this case was reassigned to Judge Valerie E. Caproni, following the death of Judge Harold Baer.

On May 14, 2015, the District Court (Judge Caproni) denied the plaintiffs' motion for certification of a class of all African Americans residing in Detroit between 2004 and 2007 who received a loan from New Century. In a 50-page opinion, the court deemed the class to be unworkable, concluding that there existed too much variation within the proposed class to satisfy the typicality, predominance, or superiority requirements for certifying the class. The plaintiffs appealed to the Second Circuit, which affirmed on July 14, 2016. 656 Fed.Appx. 555.

On September 26, 2016, plaintiff Michigan Legal Services voluntarily dismissed its claims. The defendants moved for summary judgment on October 7, 2016. The remaining plaintiffs voluntarily dismissed their claims on July 19, 2017.

The case is now closed.

Robert Lake - 06/29/2015
Virginia Weeks - 02/22/2018


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Issues and Causes of Action
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Issues
Defendant-type
Bank or credit provider
Discrimination-area
Housing Sales/Rental
Lending
Discrimination-basis
Race discrimination
General
Disparate Impact
Housing
Predatory lending
Plaintiff Type
Private Plaintiff
Race
Black
Causes of Action Equal Credit Opportunity Act (ECOA), 15 U.S.C. § 1691
Fair Housing Act/Fair Housing Amendments Act (FHAA), 42 U.S.C. §§ 3601 et seq.
State law
Defendant(s) Morgan Stanley
Plaintiff Description Five black Detroit residents and Michigan Legal Services
Indexed Lawyer Organizations ACLU Chapters (any)
ACLU National (all projects)
ACLU of Michigan
Class action status sought Yes
Class action status granted No
Filed Pro Se No
Prevailing Party Defendant
Public Int. Lawyer Yes
Nature of Relief None
Source of Relief None
Form of Settlement Voluntary Dismissal
Filing Year 2012
Case Closing Year 2017
Case Ongoing No
Additional Resources
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  The Origins of Fair Lending Litigation
Date: Dec. 4, 2008
By: Andrew Nash (Washington University in St. Louis Law Student)
[ Detail ] [ PDF ] [ External Link ]

Docket(s)
1:12-cv-07667-HB (S.D.N.Y.)
FH-NY-0020-9000.pdf | Detail
Date: 07/19/2017
Source: PACER [Public Access to Court Electronic Records]
General Documents
Class Action Complaint
FH-NY-0020-0001.pdf | Detail
Date: 10/15/2012
Source: ACLU
Morgan Stanley Sued for Racial Discrimination in Publishing Predatory Loans to Black Homeowners
FH-NY-0020-0002.pdf | Detail
Date: 10/15/2012
Source: ACLU
Standing Order [Regarding Pilot Project for Case Management of Cases in the Southern District of New York] [ECF# 2] (S.D.N.Y.)
FH-NY-0020-0003.pdf | Detail
Date: 10/31/2012
Source: PACER [Public Access to Court Electronic Records]
Opinion and Order (2013 WL 3835198) (S.D.N.Y.)
FH-NY-0020-0009.pdf | WESTLAW | Detail
Date: 07/25/2013
Source: Bloomberg Law
Memorandum Order [Denying Defendants' Motion for Certification of Appeal] [ECF# 67] (2013 WL 6585389) (S.D.N.Y.)
FH-NY-0020-0004.pdf | WESTLAW | Detail
Date: 12/13/2013
Source: PACER [Public Access to Court Electronic Records]
Order [Denying Motion to Seal] [ECF# 120] (S.D.N.Y.)
FH-NY-0020-0005.pdf | Detail
Date: 06/19/2014
Source: PACER [Public Access to Court Electronic Records]
Defendants' Memorandum of Law in Opposition to Plaintiffs' Motion to Conform and Amend the Scheduling Order Pursuant to the Court's December 26, 2013 Order and to Federal Rule of Civil Procedure 16(b)(4)* [ECF# 125]
FH-NY-0020-0006.pdf | Detail
Date: 06/27/2014
Source: PACER [Public Access to Court Electronic Records]
Memorandum Order [ECF# 163] (S.D.N.Y.)
FH-NY-0020-0007.pdf | Detail
Date: 08/13/2014
Source: PACER [Public Access to Court Electronic Records]
Opinion & Order [ECF# 230] (307 F.R.D. 119) (S.D.N.Y.)
FH-NY-0020-0008.pdf | WESTLAW| LEXIS | Detail
Date: 05/14/2015
Source: PACER [Public Access to Court Electronic Records]
Summary Order [Ct. of App. ECF# 245]
FH-NY-0020-0010.pdf | Detail
Date: 08/04/2016
Source: PACER [Public Access to Court Electronic Records]
Judges Baer, Harold Jr. (S.D.N.Y.)
FH-NY-0020-0004 | FH-NY-0020-0009
Caproni, Valerie Elaine (S.D.N.Y.)
FH-NY-0020-0005 | FH-NY-0020-0007 | FH-NY-0020-0008 | FH-NY-0020-9000
Chin, Denny (S.D.N.Y., Second Circuit)
FH-NY-0020-0010
Gorenstein, Gabriel W. (S.D.N.Y.) [Magistrate]
FH-NY-0020-9000
Jacobs, Dennis G. (Second Circuit)
FH-NY-0020-0010
Preska, Loretta A. (S.D.N.Y.)
FH-NY-0020-0003
Raggi, Reena (E.D.N.Y., Second Circuit)
FH-NY-0020-0010
Plaintiff's Lawyers Beauchamp, Peter W. (New York)
FH-NY-0020-9000
Cabraser, Elizabeth J. (California)
FH-NY-0020-0001 | FH-NY-0020-9000
Cohen, Arielle (Massachusetts)
FH-NY-0020-0001
Delbaum, Charles M. (Massachusetts)
FH-NY-0020-0001
Geman, Rachel (New York)
FH-NY-0020-0001 | FH-NY-0020-9000
Goodman, Rachel E.. (New York)
FH-NY-0020-0001 | FH-NY-0020-9000
Mehta, Sarah L. (Michigan)
FH-NY-0020-0001 | FH-NY-0020-9000
Merriweather-Tucker, Brooke A. (Michigan)
FH-NY-0020-9000
Moss, Kary L. (Michigan)
FH-NY-0020-0001
Parker, Dennis D. (New York)
FH-NY-0020-0001 | FH-NY-0020-9000
Rossman, Stuart T. (Massachusetts)
FH-NY-0020-0001 | FH-NY-0020-9000
Schwartzol, Laurence Michael (New York)
FH-NY-0020-0001 | FH-NY-0020-9000
Sobol, Michael W. (California)
FH-NY-0020-0001 | FH-NY-0020-9000
Steinberg, Michael J. (Michigan)
FH-NY-0020-0001 | FH-NY-0020-9000
Sugnet, Nicole Diane (California)
FH-NY-0020-9000
Defendant's Lawyers Boynton, Brian M (District of Columbia)
FH-NY-0020-0006 | FH-NY-0020-9000
Bressler, Jonathan Adam (District of Columbia)
FH-NY-0020-0006 | FH-NY-0020-9000
Conley, Danielle (District of Columbia)
FH-NY-0020-9000
Levine, Noah Adam (New York)
FH-NY-0020-0006 | FH-NY-0020-9000
Ogden, David W. (District of Columbia)
FH-NY-0020-0006 | FH-NY-0020-9000
Perryman, Skye L. (District of Columbia)
FH-NY-0020-0006 | FH-NY-0020-9000
Reardon, Colin (New York)
FH-NY-0020-9000
Stark, Emily (District of Columbia)
FH-NY-0020-9000

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