Fair-housing group lacks standing to sue Bank of America over alleged discrimination, MD judge rules

The National Fair Housing Alliance doesn’t have standing to sue Bank of America over its alleged discriminatory housing practices, a Maryland judge ruled Monday.

The ruling was a significant win for the bank in a 7-year-old lawsuit in which the NFHA and other fair-housing groups alleged Bank of America had worsened racial segregation by failing to maintain bank-owned homes in Black and Hispanic neighborhoods.

The parties have gone through multiple rounds of discovery, but a U.S. Supreme Court opinion last year prompted Bank of America to take a step that usually occurs early on in a lawsuit — moving to dismiss for lack of standing.

The Supreme Court last year ruled the Alliance for Hippocratic Medicine, an anti-abortion advocacy group, did not have standing to challenge the FDA’s approval of an abortion drug. The court ruled the group “cannot spend its way into standing.”

U.S. District Judge Stephanie Gallagher ruled July 21 that the fair-housing groups had not suffered a direct harm attributable to Bank of America or its housing-maintenance contractor, Safeguard Properties Management.

“These alleged injuries parallel the harms that the Supreme Court found insufficient to confer standing in Hippocratic Medicine,” Gallagher wrote.

The NFHA, nearly 20 local groups and three Maryland homeowners sued after an investigation by the NFHA found a systemic failure to maintain and market homes in minority neighborhoods that the bank owned after foreclosing on them during the 2008 financial crisis. They argued the bank’s conduct prompted the investigation, frustrating their mission and forcing them to divert resources.

Gallagher was not convinced.

“(T)o the extent that Organizational Plaintiffs claim that Defendants’ actions have an overall detrimental impact on neighborhood stability and housing equality, injury in fact is not thereby conferred on all organizations who work in the fair housing realm,” she wrote.

The groups’ standing was the subject of a May hearing in federal court in Baltimore.

Gallagher also sided with Bank of America on two cross-motions for summary judgment, writing that the plaintiffs hadn’t adequately identified a company policy they were challenging.

“In most cases of this ilk, the plaintiffs have pointed to an indisputable policy that the defendants have employed . . . that produces a disparate impact on a protected group,” Gallagher wrote.

“In this case, however, Plaintiffs proffered a wide-ranging list of ten purported ‘policies’ framed in lawyerly language designed to advocate, not just identify. As written, the ten ‘policies’ are not policies that the Defendants maintain. They are simply grievances that Plaintiffs have with the systems and practices Defendants employ.”

One of the individual plaintiffs lives in Baltimore, while the other two live together in Prince George’s County.

Jessie Weber, managing partner at Brown, Goldstein & Levy in Baltimore, who represented the fair-housing groups, declined to comment. A Bank of America spokeswoman also declined to comment.

Correction: An earlier version of this story incorrectly stated that Gallagher kept jurisdiction over the individual plaintiffs’ and groups’ claims for injunctive relief under the Fair Housing Act. All claims were dismissed against all plaintiffs.

This story has also been updated to reflect that Bank of America declined to comment.