Federal Court certifies predatory lending class action

Posted on: September 25th, 2013 by Steve Larson

House key ring vectorHomeowners who obtained mortgages from the Community Bank of Northern Virginia alleged a predatory lending scheme carried out against debt-laden homeowners and brought an action under various applicable statutes.  After two previouis grants of class certification were reversed by the Third Circuit when objecting plaintiffs proved the named representative inadequate, plaintiffs joined with those same former objectors and sought class certification.

The court granted class certification, including that of several sub-classes designed to allay concerns over potential intra-class conflicts with respect to the requirements of claims filed under certain statutes.  After find the numerosity, commonality, and typicality requirements satisfied, the court turned to the issue of adequacy, specifically whether each sub-class required its own separate counsel, which the coufrt analyzed with an eye toward whether a fundamental conflict existed between sub-classes.  Rejecting defendants’ argument that one existed by virtue of the fact that certain claims conflicted with others, the court found no fundamental conflict (and the only actual conflict being a temporal one, regarding when certain conduct occurred) and thus found adequacy satisfied.

With respect to 23(b), the court considered whether manageability might be an issue, but reasoned that it was premature to deny class certification on that basis and expressed confidence that the case could proceed for liability purposes at the very least, even if the damages end up being unmanageable.

The case is In re Community Bank of Northern Virginia Mortgage Lending, MDL No. 1674, 2013 WL 3972458 (W.D. Pa. July 31, 2013) (Schwab, J.).