disparate treatment claim failed because the plaintiff failed to plead facts showing the defendant had a discriminatory intent or motive in using the star rating system. Accordingly, the Ninth Circuit affirmed the district court’s order granting the defendant’s motion to dismiss. Bensky, et al. v. Indyke, 2024 U.S. Dist. LEXIS 138140 (S.D.N.Y. Aug. 5, 2024), highlights the challenges plaintiffs face when navigating previously settled claims, as the court grappled with issues of release agreements and class certification. The plaintiffs filed a class action against the defendants, Darren Indyke and Richard Kahn, two close advisors to the late Jeffrey Epstein, alleging that Epstein sexually abused them and that the defendants facilitated the abuse and sex trafficking network. The court, in denying the defendants’ motion to dismiss, rejected the defendants’ argument that class members could not pursue a class action because many agreed not to sue after settling claims against Epstein’s estate. However, the court put the proposed class action on hold because it found that Bensky’s claims against the defendants were covered by the release she previously signed after reaching a settlement agreement with Epstein’s estate through the Epstein Victims’ Compensation Program. The defendants argued that the release covered the instant action, and Bensky argued that it should not apply to her claims against Indyke and Kahn in their individual capacities. The court agreed with the defendants and dismissed Bensky’s claims based on the release. Id. at *10-11. Additionally, the defendants sought to strike the class-wide allegations from the complaint, arguing that the complaint could not meet class certification requirements due to some potential class members having executed releases. The court denied the motion, noting that striking class allegations is generally disfavored and can only succeed if it was clear from the complaint that class certification would be impossible. Id. at *18-19. The defendants further argued that the requirements for class certification would be impossible to meet because many of the class members executed releases. The court rejected this argument, explaining that there was no definitive proof that all potential class members executed binding releases. Id. at *20. Additionally, the court found that even if the proposed class could not be certified in all respects, there were still issues common to all class members, such as the defendants’ knowledge and conduct during the class period. Id. at *20–21. Thus, the court found that striking all class allegations at this stage was unwarranted. By contrast, the court elected to split the baby in Oliver, et al. v. Navy Federal Credit Union, 2024 U.S. Dist. LEXIS 96704 (E.D. Va. May 30, 2024). The plaintiffs in Oliver alleged that Navy Federal’s mortgage underwriting policies led to disparate outcomes for minority applicants. Navy Federal is an American global credit union headquartered in Vienna, Virginia, and is the largest natural member credit union in the United States, both in asset size and in membership, with an estimated $178 billion in assets and 13.5 million members. On February 20, 2024, nine plaintiffs brought a civil action individually and on behalf of other members of a putative class of similarly-situated applicants who applied for original residential purchase mortgages, refinancings, and home equity lines of credit, and were either denied financing or offered financing at less favorable terms than they initially sought. Id. at *5. Specifically, the plaintiffs alleged they were the victims of disparate treatment and disparate impact discrimination under both federal and state civil rights laws due to Navy Federal’s mortgage underwriting policies, which had a disparate impact on minority loan applicants and Navy Federal’s refusal to correct those discrepancies constituted intentional discrimination. Id. Navy Federal is required to submit data to the Consumer Financial Protection Bureau under the Home Mortgage Disclosure Act (HMDA). Id. at *6. The plaintiffs relied on three independent reports analyzing Navy Federal’s publicly-available HMDA data. Id. Through these reports, the plaintiffs asserted that a disparity in outcomes for minority loan applicants demonstrated that Navy Federal was on notice of the discriminatory impact of its mortgage lending program, and did not act to address the disparity, thus establishing direct or circumstantial evidence of an intent to discriminate. Id. The first report, from August 2021, analyzed the public 2019 HMDA data and identified financial institutions which had significant racial disparities in mortgage lending. Id. Navy Federal, identified as one such lender, was twice as likely to deny black applicants who applied for mortgages as compared to similarly-situated white applicants. Id. at *7. The second report, from November 2022, found that — even after taking credit scores into consideration — credit unions denied mortgages to minority applicants at rates up to 1.9 times higher than similarly qualified white applicants. Id. The third report, from December 14, 2023, involved Cable News Network’s findings that, in 2022, Navy Federal approved mortgages for 48% of black applicants, 56% of Latino applicants, and 77% of white applicants. Id. Navy Federal had the largest disparity of loan approvals among the 50 largest U.S. lenders, according to CNN. Id. at *8. The plaintiffs asserted two theories of discrimination under the FHA and the ECOA, including disparate treatment and disparate impact. Id. at *11. Regarding the disparate treatment claims, Navy Federal argued to the court that the statistics in these reports themselves did not show it acted with discriminatory intent. Id. at *19. The court concluded that the plaintiffs
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Duane Morris Discrimination Class Action Review – 2025
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