Judge denies Wells Fargo’s move to toss discrimination suit

A lawsuit accusing Wells Fargo of discriminating against Black borrowers seeking refinances will move forward after a federal judge this week rejected the bank’s argument to toss the case. 

Wells, facing five similar discrimination suits, sought to dismiss the complaint brought in March by plaintiff Aaron Braxton filed in the U.S. District Court for the Northern District of California. It also asked for Braxton’s case to be postponed pending the outcome of plaintiff Christopher Williams’ discrimination suit filed in the same court in February.

Proceeding with the Braxton case would place undue burden on the court and result in inconsistent rulings with the Williams suit, Wells’ counsel argued in June. But in response Braxton’s attorneys suggested their case narrowly focuses on refis while Williams’ is broader in scope.

U.S. District Judge James Donato, in a brief ruling Tuesday, agreed with Braxton’s legal team, calling the cases similar in that they both should remain under his purview but not similar enough that the Braxton case should be folded into Williams’ complaint. 

Attorneys for both parties didn’t respond to requests for comment Wednesday. But a Wells corporate spokesperson referred to the bank’s previous statement which called the claims “meritless.”

The Braxton case alleges Black borrowers were met with roadblocks or higher rates in seeking refinances with Wells, and takes aim at the bank’s algorithms. The Williams case stems from a Black prospective homebuyer who alleged Wells denied him a prime interest rate on a mortgage despite his high credit qualifications because of a “unique scoring model”. 

The two cases have heated up since April with new plaintiffs, including a Sony Pictures executive and wife of an NCAA Division I football coach, and new representation from Ben Crump, attorney for police violence victims George Floyd and Breonna Taylor. Braxton’s lawyers have accused Wells of racism in their court proceedings, while U.S. senators have called for a probe and New York City officials barred the city from opening new depository accounts with the bank over the claims. 

In their argument to toss the Braxton case, attorneys for Wells cited the Williams complaint, which said the bank’s practices “extended across all residential credit transactions.” Williams’ attorneys amended their complaint in April, adding claims of refi discrimination against Black borrowers first raised in a March Bloomberg report.

Braxton’s legal team fired back at the bank in June, calling Williams’ amendment to include refi customers a “bare-bones” update. It also cited Braxton’s complaint detailing specific allegations regarding Wells’ underwriting algorithms, and differences between the lawsuits in the legal violations alleged.

A dismissal would leave only the Williams case, which has “an overbroad class definition that is unlikely to be certified,” wrote Braxton’s attorney Dennis Ellis of Los Angeles-based Ellis George Cipollone O’Brien Annaguey LLP.

That filing indicates a rivalry exists between the two suits, with Ellis continuing that a dismissal also lets Williams “jump to the front of the line and get to be considered the lead plaintiffs of a nationwide class action against one of the ‘Big Four Banks’ in the United States.”

A status conference in the Williams case is scheduled for Aug. 11, while a court appearance in the Braxton case isn’t currently scheduled. Wells in a June filing also said it would respond to three similar federal class action complaints filed in the same California federal court.