banks move to outright victory in class action lawsuits over agent fees | Balch & Bingham srl
Twice this year, Balch & Bingham reported on the wave of “Agent Fee” class actions against lenders who have made PPP loans under the CARES Act. At one point, there were over sixty such lawsuits spread across federal courts alleging that banks were required to pay CPAs and others who were helping borrowers with loan applications.
Since then, eight different federal judges have now ruled in favor of the banks and dismissed the agent fee class actions. These cases recognized “all the courts that have ruled on this matter have ruled that the CARES Act does not require lenders to pay agent fees in the absence of an agreement to do so” and rejected a myriad claims for fees in federal and state law. For agent fee claimants, there is no end to these growing losses in sight, and there is real reason to question whether these lawsuits will continue.
The most recent decisions have come from Alabama and California. In Alabama, a federal judge rejected Leigh, King, Norton, Underwood LLC v. Regions, 2: 20-cv-00591 (ND Al.) As not applicable after learning that the plaintiff had in fact cashed a check from the regions in payment of the alleged agent fees. Shortly thereafter, two different California judges dismissed identical cases of agent fees. A m. Video Duplicate Inc. v. Citigroup Inc., n ° 20-03815 (CD Cal.) and A m. Video c. City Nat. Bank, 2: 20-cv-04036 (CD Cal.). Last week, in a final blow apparently blocking all path for plaintiffs, another California judge dismissed Lopez v. Bank of America, 20-cv-04172-JST (ND Cal.). While Lopez was given 30 days to file an amended complaint, the court expressed doubts that he “could ever establish entitlement to agent fees which is a predicate to each of his claims.”
These decisions are in addition to the four previous requests from the banks to reject the victories in Sport & Wheat CPA, PA v. Servisfirst Bank et al., n ° 3: 20-cv-05425 (ND Fla.), the first agent fees case filed in the country, Johnson, et al vs. JPMorgan Chase, et al., 20-cv-4100 (SDNY), which was decided by the well-respected judge Jed S. Rakoff, Steven L. Steward & Associates, PA v. Truist Bank and Truist Financial Corp., 6: 20-cv-1083 (MD Florida), and Sanchez v. South Texas Bank, 7: 20-cv-00139 (SD Tex.).
Banks had other important victories along the way. Even before the courts begin to grant the motions to dismiss, the Case law on rejected multidistrict litigation efforts to drag more than 100 unrelated banks across the country and consolidate the 62 putative class actions then pending in a multi-district litigation. Amid the growing demand from plaintiffs to dismiss the losses, the court of Unbehagen Tax & Accounting, Inc. v. JP Morgan Chase Bank, NA, 8: 20-cv-01709 (MD Fla.) Dealt a procedural blow to the plaintiffs by separating the claims against more than two dozen independent banks and ordering the plaintiffs to dismiss their omnibus lawsuit and reclassify separate actions against each bank. (A client of Balch was initially sued Unbehagen but was fired before the court made his separation order.). The Unbehagen The complainants were dismissed without re-filing. Some other complainants also voluntarily closed cases. Some of the dismissed actions simply duplicate cases against the same defendant, even by the same group of plaintiffs lawyers.
Unless an appeals court unexpectedly re-establishes a case, it looks like the banks are heading for an all-out victory.