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About UsJudge Tells Cleveland Not only “No,” but “Heck No?”
Federal Judge Sara Lioi used 36 pages to painstakingly and systematically dismiss the city’s 16-month-old lawsuit against 21 investment banks in her decision in City of Cleveland v. Ameriquest Mortgage, Inc. et al., No. 1:08 cv 139 (N. D. Ohio, May 15, 2009)
(read the opinion here). The City of Cleveland’s (the “City”) lawsuit claimed that these banks’ subprime lending practices created a public nuisance under Ohio law that was scarring neighborhoods and draining the City’s tax base. The complaint alleged that the banks (which had not originated the mortgages) facilitated the making of loans to subprime borrowers in Cleveland who could not afford the debt. After the borrowers defaulted, the lenders foreclosed. The City sought to hold the banks liable for its burdens and costs in maintaining the foreclosed properties.
Normally, when judges grant dispositive motions, they do so narrowly, focusing on what they believe is the strongest reason that reaches the desired result and ignoring all other arguments. This judge, however, chose to opine on every reason available to dismiss the City’s case, any of which, standing alone, would have sufficed. Clearly, the judge does not want to revisit this case. Ultimately the Court granted the Defendants’ motions to dismiss on four grounds: Read More »
A New Approach to the Subprime Public Nuisance
At the close of 2008, the Cleveland Housing Renewal Project Inc., a private, non-profit housing advocacy group, tried a new legal tack to deal with the havoc the subprime housing fiasco is causing Cleveland, Ohio. It asked Cleveland’s housing court to declare that business practices used by some banks when selling foreclosed properties are creating a public nuisance in violation of the law. The suit asks the court to abate the nuisance by ordering the banks to either fix up the foreclosed houses before selling them or to demolish them entirely. Read More »
Whatever happened to seeking a legislative solution?
Can one state's elected officials force companies, or even legislatively enacted authorities, located in another state to comply with its enacted laws and regulations? If you think not, you should be following the public nuisance case filed by North Carolina's attorney general against the Tennessee Vally Authority ("TVA") over cross-border pollution.
According to North Carolina's Attorney General, any facility, located anywhere, whose emissions do or may find their way into North Carolina should comply with North Carolina's more stringent pollution standards or shut down. While the court has heard oral argument, it is still unknown if this misapplication of public nuisance law will succeed.
Whatever happened to seeking a legislative solution?