On February 19, the U.S. Court of Appeals for the Second Circuit affirmed a reverse redlining verdict in a case where the plaintiffs, Black homeowners living in New York City, sued the defendant, a lending institution, alleging violations of federal, state and city antidiscrimination laws. (One judge filed a dissenting opinion.) The plaintiffs claimed the defendant targeted Black and Latino individuals in poor neighborhoods with high-equity homes, offering them mortgage refinancing loans at exorbitant default interest rates, and subsequently foreclosed on the loans when defaults occurred. A jury sided with the plaintiffs, awarding compensatory damages to some homeowners and nominal damages to others.
On appeal, the defendant challenged the timeliness of the claims, the jury instructions on discrimination theories, and the enforceability of a release-of-claims provision. The court affirmed the district court’s judgment, concluding that the claims were timely under equitable tolling, the jury instructions were appropriate, and the release-of-claims provision was unenforceable as a matter of law.
In dissent, a judge noted he would vacate the lower court’s judgment with instructions to dismiss the plaintiffs’ claims as untimely based on three findings: first, that the suit is time-barred; second, that even if the claims were timely, the lower court failed to instruct the jury properly; and third, the lower court erred in presenting the plaintiffs’ claims to the jury.
