Monday, September 13, 2010

mortgages - racial discrimination in lending - 42 USC 1981

Anderson v. Wachovia Mortgage Corp. - 3d Cir. Court of Appeals - September 13, 2010

This case is brought by three African-American couples who, in 2004, purchased adjacent houses in a Dover, Delaware, community known as “Silver Lake.” Plaintiffs received mortgages from Wachovia Mortgage Corporation, but only after Wachovia imposed several conditions on the approvals of these mortgages. Plaintiffs allege that these conditions were racially motivated, and brought suit against Wachovia under 42 U.S.C. § 1981 and various state law causes of action.

This appeal requires us to identify, as a matter of first impression, the elements of a prima facie case of lending discrimination under § 1981. Whether plaintiffs have made out a prima facie case of discrimination is a close call, but even if they have, they have not undermined Wachovia’s legitimate reasons for imposing the conditions it did.

Thus, we conclude that they have not shown that the mortgage conditions were imposed for discriminatory reasons. The District Court therefore properly granted summary judgment to Wachovia on the § 1981 claim. We also conclude that the District Court correctly granted summary judgment on plaintiffs’ breach of contract and tortious interference claims, and that it acted within its discretion in denying plaintiffs’ motion to compel certain discovery. Finally, we find that the District Court acted within its discretion in remanding plaintiffs’ good faith and fair dealing claim to Delaware state court. We will therefore affirm the District Court’s orders and judgment.