Judge denies Bank of America’s motion to dismiss in critical fair housing lawsuit

Court rejects defendants’ arguments that foreclosed properties are not covered by the Fair Housing Act

Read the judge’s decision.

July 19, 2019 — Yesterday in Maryland, a federal judge denied (read the decision) motions by Bank of America and Safeguard to dismiss a fair housing lawsuit concerning housing discrimination against communities of color. The Miami Valley Fair Housing Center joined the National Fair Housing Alliance, 18 other private fair housing organizations, and two Maryland homeowners in filing a lawsuit in June 2018 against Bank of America, N.A., and Safeguard Properties Management, LLC—alleging that Bank of America and Safeguard intentionally failed to provide routine exterior maintenance and marketing at Bank of America-owned houses in African American and Latino neighborhoods in 37 metropolitan areas, while consistently maintaining similar bank-owned properties in comparable White neighborhoods.

“This is a significant decision in the case,” said MVFHC President/CEO Jim McCarthy, “and we stand ready to continue litigation on behalf of our African American neighborhoods in the Miami Valley. Bank of America and Safeguard need to be held responsible for the neighbor destablization their discriminatory actions have caused. The residents of these neighborhoods deserve better.”

The lawsuit is the result of a multi-year investigation undertaken by MVFHC and its partners, who examined more than 1,600 Bank of America-owned houses in White, African American, and Latino neighorhoods.

More than 35,000 photos document the relevant routine exterior maintenance conditions of the properties. In neighborhoods of color, plaintiffs found evidence of consistently poor exterior maintenance, such as wildly overgrown grass and weeds; unsecured doors and windows; damaged steps and handrails; accumulated trash and debris; unsecured pools; grafitti; and even dead animals decaying in yards.

In response to the lawsuit, Bank of America and Safeguard filed a motion to dismiss the case. Judge Catherine Blake ruled against Bank of America and Safeguard and in favor of the plaintiffs on every challenge. Judge Blake held that plaintiffs sufficiently alleged disparate impact, that all of the plaintiffs have standing, that there was no statute of limitations with respect to the alleged claims, and that the court has specific jurisdiction.

The judge also found that the plaintiffs satisfied the proximate cause challenge and, importantly, found the defendants’ arguments insufficient as to every section of the Fair Housing Act that was pled by the plaintiffs. In doing so, the judge rejected the defendents’ ill-based arguments that foreclosed properties are not for sale or rental and that maintenance is not sufficiently “housing related” to be covered by the Fair Housing Act.

“Bank of America and Safeguard must make substantial changes to their policies and practices and must make the communities they have harmed whole,” said Lisa Rice, CEO & President of the National Fair Housing Alliance. “Their inaction and refusal to maintain properties in communities of color has created a dangerous and harmful environment.”

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