Banks Headed for Total Victory in Agent Charges Course Steps | Balch & Bingham LLP
Twice this 12 months, Balch & Bingham documented on the wave of “Agent Fee” class actions versus loan companies who created PPP loans below the CARES Act. At a single issue, there ended up over sixty these kinds of lawsuits unfold throughout the federal courts, alleging that banking companies were being expected to shell out CPAs and many others who assisted debtors with financial loan programs.
Given that then, eight unique federal judges have now dominated in favor of the banking companies and dismissed Agent Fee course steps. These situations recognized “every courtroom that has resolved this challenge has held that the CARES Act does not involve loan companies to fork out agent costs absent an settlement to do so” and dismissed a myriad of federal and condition law claims for fees. For the Agent Charge Plaintiffs, there is no conclusion to these mounting losses in sight, and there is genuine explanation to problem whether these satisfies will keep on.
The most the latest decisions came from Alabama and California. In Alabama, a federal choose dismissed Leigh, King, Norton, Underwood LLC v. Areas, 2:20-cv-00591 (N.D. Al.) as moot after finding out the Plaintiff experienced truly cashed a verify from Regions in payment of the alleged agent expenses. Shortly thereafter, two distinctive California judges dismissed the identical agent rate circumstances of Am. Video Duplicating Inc. v. Citigroup Inc., No. 20-03815 (C.D. Cal.) and Am. Video v. Town Nat. Financial institution, 2:20-cv-04036 (C.D. Cal.). Previous week, in a remaining blow seemingly sealing off any path for Plaintiffs, a further California judge dismissed Lopez v. Financial institution of America, 20-cv-04172-JST (N.D. Cal.). When Lopez was granted 30 days to file an amended criticism, the courtroom expressed doubt that he “could ever establish the entitlement to agent charges that is a predicate to every of his statements.”
These conclusions increase to the banks’ four previous motion to dismiss victories in Sport & Wheat CPA, PA v. Servisfirst Financial institution et al., No. 3:20-cv-05425 (N.D. Fla.), the initial-filed Agent Expenses scenario in the nation, Johnson, et al v. JPMorgan Chase, et al., 20-cv-4100 (S.D.N.Y.), which was decided by the remarkably highly regarded Choose Jed S. Rakoff, Steven L. Steward & Associates, P.A. v. Truist Financial institution and Truist Fiscal Corp., 6:20-cv-1083 (M.D. Fla.), and Sanchez v. Bank of South Texas, 7:20-cv-00139 (S.D. Tex.).
Banking institutions scored other vital victories along the way. Even just before courts started off granting motions to dismiss, the Judicial Panel on Multidistrict Litigation turned down initiatives to drag above 100 unrelated banking institutions throughout the place and consolidate all 62 then-pending putative course actions 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 promises against more than two dozen unrelated financial institutions and ordering Plaintiffs to dismiss their omnibus lawsuit and refile separate actions from each individual financial institution. (A Balch customer was in the beginning sued in Unbehagen but was dismissed before the courtroom issued its severance order.). The Unbehagen Plaintiffs dismissed with out refiling. Some other Plaintiffs have also been dismissing cases voluntarily. Some of the dismissed actions are basically duplicative of instances towards the same defendant, even by the exact same set of Plaintiffs’ counsel.
Except if an appellate court unexpectedly reinstates a situation, it seems as nevertheless the banks are headed for complete victory.