Bank of America won’t face racketeering class action over foreclosures

(CN) — Bank of America and the Bank of New York Mellon won dismissal of a class action by homeowners who claimed the banks are engaged in a racketeering scheme that uses fraudulent documents to foreclose on their homes.

U.S. District Judge Jill Otake in Honolulu on Thursday granted the banks' request to dismiss the claims with prejudice, denying the eight names plaintiffs another a chance to amend their lawsuit.

The judge last year had given the plaintiffs, homeowners in Hawaii and Florida, permission to file an amended complaint because their initial attempt to articulate their claims had been too confusing to proceed. However, the judge said, their renewed effort didn't improve on the original and was again a "lengthy, oft-confusing pleading that continues to impose unfair burdens on litigants and judges."

The amended complaint, according to Otake, was replete with irrelevant facts, argumentative statements that didn't constitute factual claims and lengthy recitations that often didn't involve the two defendant banks or even relate to a civil racketeering claim.

That alone would have been grounds to dismiss the lawsuit, the judge said. However, Otake continued, the racketeering claim should also be thrown out because it was based on the banks' foreclosure proceedings in state courts, and litigation activity by itself isn't sufficient to support a claim under the Racketeer Influenced and Corrupt Organizations Act.

"The court previously considered and decided the first round of dispositive motions practice on similar grounds, and admonished plaintiffs about the consequences of failing to allege adequate factual allegations in an amended complaint," the judge said. "Yet the crux of the legal deficiency in the complaint— acts constituting litigation activity—was not addressed or rectified by the first amended complaint."

Attorneys for the plaintiffs didn't immediately respond to a request for comment on the ruling.

The plaintiffs claimed that Bank of America and the Bank of New York Mellon deliberately targeted people of color in Hawaii and Florida for home loans that the bank knew they would never be able to pay back. Three of the five Hawaii plaintiffs are of Native Hawaiian descent and the three Florida plaintiffs are women of color.

They also claimed they had been or were currently being foreclosed on, some for nearly two decades, as part of the bank’s scheme to use fraudulent documentation to initiate a false foreclosure.

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