The Sixth Circuit has accepted an interlocutory appeal in multi-district litigation pending against Countrywide Bank NA in the Western District of Kentucky. The proposed class is comprised of all Hispanic and African-American borrowers from Countrywide who originated loans from 2002 to the present. The plaintiffs claim that Countrywide discriminated against class members by charging minority borrowers higher rates and fees than non-minority borrowers. Plaintiffs assert that Countrywide’s policy of “giving loan officers and brokers pricing discretion, while tying their compensation to higher rates and fees, caused minority borrowers to pay higher [rates and fees] than non-minority borrowers.” Plaintiffs pointed to statistical evidence that, even after controlling for “business-justified” factors, Hispanics and African-Americans were allegedly charged more by Countrywide. The district court denied the plaintiffs’ motion for class certification on October 13, 2011. The court held that class-wide data and “statistical evidence of average disparities will not suffice to meet Rule 23(a)’s commonality requirement.” The court found that there was no “common mode of exercising discretion” in order to support commonality.
The plaintiffs sought interlocutory review of the order denying their motion for class certification pursuant to Rule 23(f). Recently, the Sixth Circuit granted plaintiffs permission to appeal the order denying their motion for class certification. In the order granting permission, the panel found that four factors weighed in favor of allowing the plaintiffs to appeal: 1) whether the costs of continuing the litigation would present a barrier to later review; 2) whether the case raises a novel or unsettled question; 3) the plaintiffs’ likelihood of success on the merits; and 4) the posture of the case in the district court.
The Sixth Circuit’s review of the district court’s denial will provide insight into how the circuit will evaluate consumer class action claims in the wake of the Supreme Court’s Wal-mart Stores, Inc. v. Dukes decision.