In re Wells Fargo Mortgage Discrimination Litigation

Background

Plaintiffs in six putative class actions sued Wells Fargo Bank, N.A., Wells Fargo & Co., and Wells Fargo Home Mortgage, Inc. They alleged discrimination involving residential mortgage and refinancing practices. Each case asserted claims under the Equal Credit Opportunity Act and the Fair Housing Act, along with additional federal and state claims that differed among the complaints.

Wells Fargo proposed consolidating the cases because they involved common legal and factual questions about whether Wells Fargo engaged in disparate treatment or disparate impact and whether that conduct violated federal or California law. Some plaintiffs opposed consolidation, some supported it, and others proposed different consolidation arrangements. After a hearing, the court concluded that consolidation would promote efficiency and a fair resolution.

Consolidation ruling

The court ordered all six cases consolidated into a single action with one amended complaint. It found that the complaints generally alleged the same theory: discrimination against non-white customers in residential mortgage and refinancing transactions. The court said that differences in the degree of treatment or impact could be addressed through class-certification proceedings and other later proceedings. It also found that the documentary evidence, witnesses, and legal claims would likely substantially overlap.

Under Federal Rule of Civil Procedure 42(a), the cases were consolidated under Civil Action No. 22-990 for all pretrial proceedings. Future filings were to use the caption “In re Wells Fargo Mortgage Discrimination Litigation” and the 3:22-cv-00990-JD case number. The Clerk was directed to administratively close the other underlying cases. Any related action later filed in or transferred to the district would be consolidated for pretrial purposes without another order, subject to the procedures in the order.

The court stated that pretrial consolidation did not necessarily mean consolidation for trial. It also stated that consolidation did not add any entity as a party to a case unless that entity had been named, served, or added under the Federal Rules of Civil Procedure. The order preserved each party’s ability to seek severance of a claim or action for good cause.

Interim lead counsel

Several law firms had separately sought appointment as interim lead counsel under Federal Rule of Civil Procedure 23(g)(3), and Wells Fargo opposed those applications. The court declined to appoint interim lead counsel pending further proceedings. It explained that interim counsel was warranted for the consolidated action, but the existing applications had not addressed who should lead a single consolidated case. The plaintiffs were allowed to file a renewed proposal by February 13, 2023, and Wells Fargo could respond by February 20, 2023.

The court directed that any renewed proposal address guidelines intended to preserve clear, contemporaneous records for any later request for fees and costs. The guidelines required monthly finalization of time records and bills, recording time in one-tenth-hour increments, task-based rather than block billing, limits on duplicative attorney work, justification for committees, and reasonable travel and lodging expenses. The court stated that failure to follow the guidelines could result in the relevant fee or cost request not being considered.

Disposition and effect

The order consolidated the six cases for pretrial purposes and deferred appointment of interim lead counsel. It did not decide whether Wells Fargo discriminated, whether any plaintiff or proposed class would prevail, or whether the cases would proceed to trial together.