Trying to limit its potential liability, NationsBank Corp. asked a federal judge last week to deny class-action status for a pending fair-lending lawsuit.
The bank charged the Washington Lawyers Committee for Civil Rights and Urban Affairs with missing the deadline to seek class-action certification.
"By failing to move for class certification by Dec. 20, 1995, which was 90 days from the date on which the class complaint was filed, plaintiffs directly violated (the) local rule," the bank said in Dec. 26 memorandum filed with the U.S. District Court for the District of Columbia. "Accordingly, plaintiffs' class-action allegations should be stricken in their entirety."
John Relman, director of the fair-housing project at the Washington Lawyers Committee, said the group hasn't missed the deadline. He declined to elaborate, saying he will explain the group's position in a future court filing.
Class-action status is crucial to the lawyers committee's case, which alleges that NationsBank discriminated against borrowers. The bank would have much more to lose fighting a class action in court.
Without class status, the case involves only 13 plaintiffs and nine loan applications; even if NationsBank lost, the damage award would be limited. But with class-action status, the lawyer's committee could seek compensation for all similarly affected consumers. That could raise the bank's tab dramatically.
The bank also argued that the lawyers committee has had since its December 1994 press conference announcing its fair-lending initiative to search for clients. It said the group has employed a toll-free number, meetings with community groups, and a "carefully orchestrated" media campaign.
Still, NationsBank noted that just 11 plaintiffs joined the lawsuit, which was filed Sept. 21. Two months of publicity persuaded only one more person to join the case, NationsBank told the court.
"If the plaintiffs believe they have meritorious individual claims, they should be required to litigate them as such," the bank said. "NationsBank should be subjected to no further prejudicial adverse publicity tied to grandiose promises of class-action litigation that the plaintiffs' counsel have been unable to fulfill."
NationsBank said this is not the first time the lawyers committee failed to file its papers on time. It said in the memorandum that a federal judge "sternly admonished" the group for failing to file a timely class action request in a 1982 employment discrimination case.
According to the memorandum, the judge allowed the committee to file the request late. But he warned them not to let it happen again.
"Plaintiffs chose to bring this as a class action and it is time for them to fish or cut bait," the judge said.