1. “The State of Play in City Claims Against Financial Firms” by Kathleen C. Engel

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January 22nd, 2014

In 2006, before the subprime mortgage crisis and the collapse of the financial markets, I wrote an article titled Do Cities Have Standing?  Redressing the Externalities of Predatory Lending.[1]  In the article, I addressed the possibility that cities had standing to recover for the damage that predatory lenders were inflicting on their communities.  At the time, exploitative lenders were putting unsophisticated borrowers in loans they could not afford, and many of those borrowers have since lost or will lose their homes.

Municipalities were in impossible positions.  They were powerless to prevent abusive lending.  Only state and federal legislatures and regulators had the authority to restrict unfair loan products;[2] yet the cities bore the burden of unaffordable loans in the form of abandoned property, displaced families, increased demands for police and fire protection, and declining tax revenues.

The focus of my article was analyzing the availability of (1) parens patriae standing to cities and (2) city standing based on direct injuries in claims against lenders who engaged in predatory lending.  In the course of the article, I also identified potential claims cities could bring and argued for broader municipal standing.  Jonathan Entin and Shadya Yazback wrote an article in response to Do Cities Have Standing, in which they echoed my analysis of city standing as parens patriae and as claimants for injuries to their proprietary interests.  They also explored the potential for claims under the Fair Housing Act[3] and discussed the role that preemption has played in limiting cities’ ability to directly regulate lenders.[4]

Eight years later, we now know more about the role of lenders in exploiting borrowers.  We also know more about the impact that exploitative and unfair lending has had on communities.  And, most importantly for this essay, several cities have brought lawsuits that test some of the theories I put forth in my original article.

I.  Municipal Litigation

The cities of Memphis, Baltimore, and Birmingham all brought claims under the Fair Housing Act, which, as Entin, Yazback and I discussed in our articles, permits cities to bring claims in their proprietary capacity for damages they suffered from discrimination.  The cities have had mixed success.  The basis for the claims has been that the defendants targeted high-cost, unaffordable loans to people in neighborhoods that were predominantly African-American and that, as a result, the borrowers lost their homes to foreclosure, causing cities to lose tax revenues and leaving cities to contend with abandoned, decaying homes and the related problems of increased crime.

The cities’ complaints varied in several respects.  In City of Memphis v. Wells Fargo N.A., the City alleged that Wells Fargo had engaged in reverse red-lining and that the owners of 50 properties had defaulted on their Wells Fargo loans.[5]  Almost all of the properties had become vacant.  The City incurred costs securing the property and also lost tax revenue.  Based on this evidence, the federal district court denied Wells Fargo’s motion to dismiss for lack of standing.[6]  A year later, Wells Fargo and Memphis agreed to settle the case for $132.5 million.[7]

Unlike Memphis, Birmingham and Baltimore did not allege damage to specific properties, but like Memphis they claimed that they lost tax revenues and had increased expenditures for police and fire protection, and securing abandoned homes as a result of the defendants’ discriminatory practices.  The City of Birmingham v. Citigroup, Inc. court dismissed the City’s claim for lack of standing on the grounds that the “alleged injuries to the City [were] too tenuously connected, and so not fairly traceable, to the Defendants’ alleged misconduct.”[8]  The City did not appeal the dismissal.

The court that heard Baltimore’s case dismissed the City’s complaint without prejudice and, in so doing, indicated that the City had to make clear the link between specific Wells Fargo loans and foreclosures on the property securing those loans.[9]  The City amended its complaint and identified specific properties that Wells Fargo had foreclosed upon.  Wells Fargo moved to dismiss the amended complaint and the court again granted the motion to dismiss without prejudice, giving the City leave to allege that, but for Wells Fargo’s discrimination, the properties would not have become vacant.[10]  The City ultimately pled factual allegations that satisfied the court’s standing inquiry and the court denied Wells Fargo’s motion to dismiss, stating that “[b]y limiting its allegations to those situations involving borrowers who were already owning and occupying their homes, the City again successfully fills in the gap between its claimed injuries and Wells Fargo’s alleged conduct.”[11]

In response to Baltimore’s lawsuit, the Department of Justice (“DOJ” or “Justice”) and the Office of the Comptroller of the Currency began investigating Wells Fargo’s lending practices, focusing in part on D.C. and Baltimore.[12]  In July 2012, DOJ filed a complaint alleging that Wells Fargo had engaged in widespread violations of the Fair Housing Act and the Equal Credit Opportunity Act.[13]  In particular, Justice claimed that Wells Fargo steered African-American and Hispanic borrowers into high-cost subprime loans when they were qualified for prime loans.[14]  The same day, Wells Fargo entered into a settlement agreement with DOJ for $175 million.  The agreement resolved not only the DOJ claims, but also the City of Baltimore lawsuit.  Baltimore received $3 million in aid to homeowners and Wells Fargo agreed to make $125 million in prime loans to low- and moderate-income borrowers in Baltimore over the course of the next five years.[15]

II.  Cleveland Lawsuit

A.  The Hot Potato

One of the first cities to seek damages for abusive lending was Cleveland, which was the epicenter of predatory lending.  Brokers and lenders began peddling high-risk loans in Cleveland in the 1990’s.  It was a city with pent-up demand for credit, many residents who had relatively little experience obtaining credit because of past discrimination, and a state government that actively curtailed any efforts by cities or consumer advocates to address abusive lending.  It was, thus, good hunting ground for exploitative lenders.[16]

In January 2008, Cleveland took the bold step of suing investment and commercial banks that provided funding to subprime lenders under a theory that, by financing loans that borrowers could not afford to repay, the banks created a public nuisance.[17]  In support of its claims, the City cited evidence that in 2007, twenty Cleveland homeowners lost their homes daily.  Foreclosures often led to vacant homes that the City had to board up or tear down.  Demands for crime and police protection rose as foreclosures mounted.  And, as neighborhoods experienced foreclosures, the surrounding homes also lost value, and the City, in turn, lost tax revenue.[18]

The lawsuit became an instant hot potato.  The defendants removed the case to federal court, where the City filed a motion to remand the case to state court.  Judge Nugent held a hearing on the motion.  Having Judge Nugent assigned to the case was a stroke of luck for the City because Judge Nugent had previously held that the City of Cleveland had standing to bring a public nuisance claim against gun manufacturers.[19]  This time, however, Judge Nugent never ruled on the City’s motion to remand.  Rather, after hearing the parties’ arguments on the motion, the case was reassigned to Judge Gaughan,[20] who quickly recused herself.[21]  Judge Oliver was then assigned the case.  Three days later the case was reassigned to Judge Lioi[22]—the district court judge with the least seniority.  There was nowhere else the case could go.  No explanations for the series of reassignments were given, except that Judge Gaughan cited a conflict of interest.

The defendants filed numerous motions to dismiss the City’s claims.  Judge Lioi dismissed all the City’s claims in May 2009.[23]  The bases for her dismissal were: (1) the City’s claim was preempted by an Ohio law that prohibits municipalities from regulating lending; (2) the economic loss rule prevented Cleveland from recovering; (3) legal subprime lending cannot form the basis of a public nuisance claim; and (4) there was no direct link between the defendants’ financing of loans and the City’s injuries.[24]  The City appealed the dismissal to the Sixth Circuit Court of Appeals, which affirmed the lower court decision in 2010.[25]  The City then filed a petition for writ of certiorari, which the Supreme Court denied in 2011.[26]

At the same time that the City’s lawsuit was moving through the federal courts, the City was pursuing racketeering and public nuisance claims against a different group of financial institutions in state court.[27]  The lawsuit, which the City filed in 2008, was assigned to Judge Brian J. Corrigan.  In January 2009, the defendants moved for a stay, pending resolution of the federal case.[28]  In August 2009, seven months after the motion was filed and a year after the City had filed suit, Judge Corrigan stayed the proceedings.[29]  The City then filed a motion for alternative writ of procedendo, asking the Ohio Court of Appeals to dissolve the stay.[30]  Judge Corrigan filed a motion to dismiss the City’s motion and presented multiple arguments for why the stay should remain in place until the federal claim was resolved.  The Ohio Court of Appeals denied the Judge’s motion and, in December 2009, ordered the Judge to vacate the stay.[31]  The Court also ordered the Judge to pay all costs associated with the petition for the writ.[32]

From December 2009 until November 2011, the state case did not move forward.  Judge Corrigan finally took action in November 2011, after a Cleveland Plain Dealer reporter contacted the Judge.  The reporter was working on an article about Josh Cohen, the attorney who represented the City of Cleveland.  When the reporter called Judge Corrigan to ask about the case, Judge Corrigan’s response was “[q]uite frankly, until your phone call, I hadn’t looked at the case.”[33]  The article appeared on November sixteenth and six days later (two of those days fell on a weekend), on November twenty-second, Judge Corrigan dismissed all but a minor claim in the City’s lawsuit.[34]  The Judge’s rationale for dismissing the claims paralleled Judge Lioi’s.  The City appealed the decision to the Ohio Court of Appeals, which affirmed the trial court’s decision.[35]  The City elected not to appeal to the Ohio Supreme Court.

Two questions that the Cleveland cases pose are: (1) why were so many federal judges unwilling to touch the Cleveland lawsuit; and (2) why did Judge Corrigan delay ruling on the defendants’ motion to dismiss for almost three years and then only after being “called out” by the press?

B.  Standing and Causation

Jonathan Entin, Shadya Yazback, and I all thought a central issue in any city litigation against lenders would be whether cities could claim parens patriae standing.  Although the pleadings and decisions reviewed here do not specify whether the cities asserted standing based on their proprietary interests or as parens patriae, the cities’ claims for damages appear to be for direct injuries and not to protect the interests of their residents.

The lynchpin of the cases has been whether the cities’ allegations of causation were sufficient to survive a motion to dismiss.  Memphis and Baltimore cleared that hurdle while Birmingham and Cleveland did not.  The cases differed in some other respects.  All but Cleveland’s primarily or exclusively involved discrimination claims.[36]  Another difference was that the defendants in Cleveland’s case were the firms that financed subprime lenders, while the lenders themselves were the defendants in the other cases.  Despite these differences, the causation analysis was almost identical across all four cases: the courts were asking whether the cities’ allegations demonstrated a connection between the defendants’ actions and the cities’ injuries.

What’s puzzling is why the courts reached divergent results when engaging in the same inquiry.  One explanation for the outcome in the Cleveland cases is that the courts went beyond the four corners of the complaints to engage in factual inquiries, which is inappropriate when reviewing motions to dismiss.  The state and federal courts both rationalized their holdings, in part, by highlighting the roles of lenders in marketing and selling loans, and the roles other individuals and entities may have played in causing harm to the City’s neighborhoods.  For example, the Sixth Circuit, in its causation discussion, stated “[f]ires were likely started by negligent or malicious individuals or occurred because a home was poorly built.”[37]  This hypothesizing strayed far from the four corners of the City’s complaint.  Instead of confining its analysis according to the Federal Rules of Civil Procedure, the Court introduced and relied on its own speculations about why vacant homes in Cleveland caught fire.

Another explanation for the outcome in Cleveland’s lawsuits is that the courts, pursuant to Ohio law, used the less common direct causation test, not foreseeability, when reviewing the City’s allegations of proximate cause.  Under direct causation, intervening causes can break the chain of causation.  The foreseeability test for proximate cause recognizes that if intervening causes are foreseeable, they do not break the chain of causation.[38]

In applying the direct causation approach, the courts held that financing subprime loans did not have a direct relationship to the neglect of property, crime, and drug dealing that plagued Cleveland.  That conclusion arguably conflicts with the Ohio Supreme Court’s decision in City of Cincinnati v. Beretta U.S.A. Corporation,[39] in which the Court held that the City of Cincinnati had adequately pled causation under Ohio state law to sustain public nuisance and other claims against gun manufacturers for costs the City incurred related to criminal activity.  In both cases, the situations involved multiple actors.  In Cleveland, there were brokers, lenders, borrowers, and others who contributed to the problems allegedly caused by the financiers of subprime lending.  In Cincinnati, there were gun dealers, criminals, and people who made the choice to be in areas where crime was likely to occur, who contributed to increased crime in Cincinnati.[40]

As any first year torts student knows, proximate cause is an imprecise concept with lots of wiggle room for courts.  In this situation, where there was an Ohio Supreme Court decision on point, it would have been appropriate for the courts to exercise greater caution in dismissing Cleveland’s complaints, especially given the uniqueness of the claims.[41]  For example, the court could easily have taken the approach that the Baltimore court took, and dismissed the City’s complaint without prejudice and given the City an opportunity to plead causation more precisely.

Cleveland’s claim was novel and dismissal of the City’s lawsuit was a harsh sanction in this situation.  Given that subprime lending and the financial infrastructures supporting credit markets were relatively new, it was premature for the courts to preclude the City from engaging in discovery to ascertain the extent to which the defendants knew they were financing loans that were destined to fail.  At the time, few people understood the intricate arrangements between financial institutions, lenders, and other actors.  The opaque arrangements prevented cities from developing their theories without discovery.

Although the City was never permitted to engage in this inquiry, recent evidence suggests that the City was correct in advancing the theory that Wall Street firms were complicit in the making of abusive and unaffordable loans.[42]  Over the last few years, numerous major commercial banks, former investment banks, and securitizers have paid states hundreds of millions of dollars to resolve allegations that they were, in part, responsible for the financing of unaffordable loans.  In Massachusetts alone, Goldman Sachs settled with the state for $60 million,[43] Morgan Stanley for $102 million,[44] Royal Bank of Scotland for $52 million,[45] and Barclay’s for $36.1 million.[46]  Most recently, Nevada entered into an Assurance of Discontinuance with securitizer DB Structured Products for $11.5 million.[47]  The magnitude of these settlements suggests that the states had formidable evidence of the firms’ complicity.[48]  Cleveland’s biggest mistake may have been that it was ahead of the curve.

C.  Public Nuisance

Cities have suffered unique injuries as a result of exploitative and illegal lending.  Foreclosures have reduced cities’ revenue and increased their costs.  Thus far, financial institutions have not had to internalize the harm they caused Cleveland, Birmingham, and other municipalities.

The subprime crisis could have been averted had Congress protected consumers from abusive lending practices and if federal regulators had fulfilled their mandates to enforce the law.  Congressional inaction, regulatory failure, and expansive preemption rulings by the OCC and OTS that limited the reach of state anti-predatory lending laws emboldened exploitative brokers, lenders, and Wall Street firms.[49]

Like tobacco companies and gun manufacturers, financial firms used their money and lobbying power to escape or limit government regulation and corporate responsibility.[50]  When lobbying, political pressure, and reelection concerns prevent legislatures and regulators from fulfilling their obligations to the citizenry, tort law is oftentimes the only remedy.  As Mike Rustad has argued in his seminal article, Torts as Public Wrongs,[51] tort law should “vindicate[] wrongs and serve as a consumer watchdog because popularly elected legislatures and expert regulators too often fail to protect us.”  Another torts scholar has described tort law as “the default regulator of safety and economic power.”[52]

When the state and federal courts dismissed Cleveland’s claims against financial institutions, they failed to take into account the critical role that tort law—and public nuisance law in particular—plays in filling gaps created when legislators and regulators fail to act in response to obvious problems with serious social consequences.  Through tort law, courts can address novel issues as they arise in society either by recognizing new tort claims or harnessing existing claims to address new problems.[53]  Unlike civil law jurisdictions, courts in the United States make law.

Abusive, risky home mortgage loans are a new phenomenon.  In the past, when banks held home mortgage loans in their own portfolios, careful underwriting was critical to their solvency.  Securitization enabled lenders and those that financed them to offload the risk of abusive, unaffordable loans on investors, borrowers, and communities in which the borrowers live.  In essence, lenders and their financers contaminated communities with polluted loans.  In situations like this, public nuisance is a valuable tool because it provides relief when defendants interfere with the common interests or rights of the general public.[54]

Conclusion

Almost six years after Cleveland sued JPMorgan Chase and 20 other financial firms, the Department of Justice has entered into a $13 billion settlement with JPMorgan, based, in part, on the fact that the N.Y. bank had financed loans that were destined to fail.[55]  Based on this evidence, JPMorgan has agreed to dedicate $2 billion to help homeowners in the hardest hit areas of the country.[56]  A spokesman from the Office of the Attorney General stated,

 

Through this $13 billion resolution, we are demanding accountability and requiring remediation from those who helped create a financial storm that devastated millions of Americans . . . .  By requiring JPMorgan both to pay the largest penalty in history and provide needed consumer relief to areas hardest hit by the financial crisis, we rectify some of that harm.[57]

 

The Department of Justice took the same position that Cleveland tried to advance in federal and state trial and appellate courts.  Now we know what JPMorgan knew, but it is too late for Cleveland.  Every judge who considered the City’s claims refused to allow them to go forward, which meant the City could not uncover the truth.  By dismissing the City’s claims, the courts eviscerated Cleveland’s only tool for recovering for the harms JPMorgan and the other defendants inflicted.

 

 

 


         *  Professor of Law, Suffolk University Law School.  With thanks to Suffolk Law Librarian Rick Buckingham for his assistance with this project.

Since writing Do Cities Have Standing? I have consulted with the City of Cleveland in its lawsuit against Wall Street firms.

        Φ  Suggested citation: Kathleen C. Engel, The State of Play in City Claims Against Financial Firms, 40 Fordham Urb. L.J. City Square 82 (2014), http://urbanlawjournal.com/state-of-play-in-city-claims/.

         [1]  38 Conn. L. Rev. 355 (2006).

         [2]  Kathleen Engel & Patricia McCoy, The Subprime Virus: Reckless Credit, Regulatory Failure and Next Steps 157-62 (2011).

         [3]  42 U.S.C. §§ 3601-3619.

         [4]  Jonathan L. Entin & Shadya Y. Yazback, City Governments and Predatory Lending, 34 Fordham Urb. L.J. 757 (2007).

         [5]  In addition to its claim under the Fair Housing Act, Memphis brought an unfair and deceptive acts and practices claim under the Tennessee Consumer Protection Act (TCPA), which entitles those who suffered damages as the result of a deceptive act to recover.  The court held that Memphis had standing to maintain its claim under the TCPA. City of Memphis v. Wells Fargo, N.A., No. 09-2857-STA, at 22 (W.D. Tenn. May 4, 2011) (order denying defendants’ motion to dismiss).

         [6]  Memphis v. Wells Fargo, slip op. at 23.

         [7]  Ted Evanoff, Wells Fargo Goes from Foe to Partner in Memphis, Commercial Appeal (June 3, 2012, 12:08 AM), http://www.commercialappeal.com/news/2012/jun/03/wells-fargo-goes-from-foe-to-partner.

         [8]  City of Birmingham v. Citigroup, Inc., No. CV-09-BE-467-S, slip op. at 8 (N.D. Ala. Aug. 19, 2009) (memorandum opinion).

         [9]  Mayor of Baltimore v. Wells Fargo, N.A., No. JFM 1:08 CV-00062 (D. Md. Jan. 6, 2010) (order granting defendant’s motion to dismiss).

       [10]  Id. (Sept. 14, 2010) (order granting defendants’ motion to dismiss without prejudice).

       [11]  Id. (Apr. 22, 2011) (order denying defendants’ motion to dismiss).

In addition to the cities discussed here, Los Angeles and Buffalo brought claims against numerous banks alleging that they violated nuisance laws by failing to maintain properties on which they had foreclosed. People v. Deutsche Bank Nat’l Trust Co., No. BC460878 (Cal. Super. Ct. May 4, 2011) (complaint); City of Buffalo v. ABN AMRO Mortg. Grp., Inc., No. 2200-2008 (N.Y. Sup. Ct. Mar. 11, 2009) (order granting defendants’ motion to dismiss in part without prejudice).

       [12]  Ylan Q. Mui, Wells Fargo, Justice Department Settle Discrimination Case for $175 Million, Wash. Post (July 12, 2012), http://articles.washingtonpost.com/2012-07-12/business/35489831_1_mike-heid-black-borrowers-wells-fargo.

       [13]  15 U.S.C. §§ 1691-1691f.

       [14]  Complaint, United States v. Wells Fargo Bank, N.A., No. 12-CV-01150 (D.D.C. July 12, 2012), available at http://www.justice.gov/crt/about/hce/documents/wellsfargocomp.pdf.

       [15]  Mui, supra note 12.

       [16]  Engel & McCoy, supra note 2, at 3-4, 256-7.

       [17]  City of Cleveland v. Deutsche Bank Trust Co., No. CV-08-646970 (Cuyahoga Cnty. Ct. C.P. Jan. 10, 2008) (complaint).

       [18]  Id.

       [19]  White v. Smith & Wesson, 97 F. Supp. 2d 816 (N.D. Ohio 2000).

       [20]  City of Cleveland v. Ameriquest Mortg. Sec., Inc., No. 08-cv-00139 (N.D. Ohio Mar. 11, 2008) (order assigning case to Judge Patricia Gaughan).

       [21]  Id. (Mar. 14, 2008) (order of recusal).

       [22]  Id. (Mar. 17, 2008) (order reassigning case to Judge Sara Lioi).

       [23]  City of Cleveland v. Ameriquest Mortg. Sec., Inc., 621 F. Supp. 2d 513 (N.D. Ohio 2009).

       [24]  Id.  It is beyond the scope of this essay to discuss in detail all the bases for the District Court’s dismissal of the City’s lawsuit; however it is worth noting that Cleveland was not seeking any equitable relief, for example to enjoin the financing of certain types of loans, which would be a form of lending regulation.  Rather, the City was seeking damages for its direct injuries.  It is also significant that public nuisance claims can be maintained even if the defendant was not violating an established law. Restatement (Second) of Torts § 821 B, cmt. E (1979).

       [25]  City of Cleveland v. Ameriquest Mortg. Sec., Inc., 615 F.3d 496 (6th Cir. 2010), cert. denied, 131 S. Ct. 1685 (2011).

       [26]  City of Cleveland v. Ameriquest Mortg. Sec., Inc., 131 S. Ct. 1685 (2011).

       [27]  Complaint and Demand for Jury Trial, City of Cleveland v. JP Morgan Chase N.A., No. CV-08-668608 (Cuyahoga Cnty. Ct. C.P. Aug. 22, 2008).

       [28]  Plaintiff’s Memorandum in Support of Motion for Alternative Writ of Procedendo, State ex rel., Cleveland v. Corrigan, No. CA-09-93940 (Ohio Ct. App. Sept. 15, 2009).

       [29]  City of Cleveland v. JP Morgan Chase N.A., No. CV-08-668608 (Cuyahoga Cnty. Ct. C.P. Aug. 31, 2009) (order granting defendants’ motion to stay proceedings).

       [30]  Plaintiff’s Memorandum, Corrigan, No. CA-09-93940.

       [31]  State ex rel., Cleveland v. Corrigan, No. CA-09-93940, 2009 WL 4863445 (Ohio Ct. App. Dec. 14, 2009).

       [32]  Id.

       [33]  Christopher Evans, The Lawyer Who Sued Wall Street, Cleveland.com (Nov. 16, 2011, 6:00 AM), http://www.cleveland.com/opinion/index.ssf/2011/11/the_lawyer_who_sued_wall_stree.html.

       [34]  City of Cleveland v. JP Morgan Chase N.A., No. CV-08-668608 (Cuyahoga Cnty. Ct. C.P. Nov. 22, 2011) (order and opinion granting defendants’ motion to dismiss in part and denying in part).

       [35]  City of Cleveland v. JP Morgan Chase Bank, N.A., No. 98656, 2013 WL 1183332 (Ohio Ct. App. Mar. 21, 2013).

       [36]  The Fair Housing Act confers very broad standing to municipalities.  Gladstone, Realtors v. Vill. of Bellwood, 441 U.S. 91, 108 (1979).

       [37]  City of Cleveland v. Ameriquest Mortg. Sec., Inc., 615 F.3d 496, 505 (6th Cir. 2010), cert. denied, 131 S. Ct. 1685 (2011).

       [38]  Restatement (Third) of Torts § 29 (2010).

       [39]  768 N.E.2d 1136, 1148-49 (Ohio 2002).

       [40]  The court of appeals distinguished Beretta, in part, on the grounds that the defendants in Beretta were financing the illegal sale of guns. Ameriquest, 615 F.3d at 505 n. 6.  It was not uncommon for Wall Street firms to finance loans that were illegal under state and federal law. Christopher Peterson, Predatory Structured Finance, 28 Cardozo L. Rev. 2185, 2213-32 (2007).

       [41]  This argument has particular applicability to the decision of the district court.  Arguably, the court should have certified the standing question to the Ohio Supreme Court.

       [42]  See Kathleen C. Engel & Thomas J. Fitzpatrick IV, Complexity, Complicity, and Liability up the Securitization Food Chain: Investor and Arranger Exposure to Consumer Claims, 2 Harv. Bus. L. Rev. 345, 381-89 (2012).

       [43]  Jenifer B. McKim, State Reaches $60M Subprime Deal with Goldman Sachs, Boston.com (May 11, 2009, 03:50 PM), http://www.boston.com/business/ticker/2009/05/state_reaches_6.html.

       [44]  Assurance of Discontinuance, In re Morgan Stanley & Co., No. 10-2538 (Mass. Super. Ct. June 24, 2010), available at http://www.mass.gov/ago/docs/press/2010/2010-06-24-ms-settlement-attachment3.pdf.

       [45]  Press Release, Att’y Gen. Martha Coakley, Royal Bank of Scotland to Pay $52 Million for Securitization Role in Subprime Meltdown (Nov. 28, 2011), available at http://www.mass.gov/ago/news-and-updates/press-releases/2011/2011-11-28-rbs-settlement.html.

       [46]  Press Release, Att’y Gen. Martha Coakley, Barclays to Pay $36.1 Million for Securitization Role in Subprime Mortgage Meltdown (Sept. 9, 2013), available at http://www.mass.gov/ago/news-and-updates/press-releases/2013/2013-09-09-barclays-aod.html.

       [47]  Assurance of Discontinuance, In re DB Structured Prods., Inc., No. A-13-690144-B (Nev. Dist. Ct., Oct. 14, 2013), available at http://ag.nv.gov/uploadedFiles/agnvgov/Content/News/PR/PR_Docs/2013/2013-10-4_DB_AOD.pdf.

       [48]  See In re Morgan Stanley, supra note 44.

       [49]  Engel & McCoy, supra note 2, passim.

       [50]  Engel & McCoy, supra note 2, at 26, 157, 253-4; Michael L. Rustad, Torts as Public Wrongs, 38 Pepp. L. Rev. 433, 484, 487 (2011).

       [51]  Rustad, supra note 50, at 438.

       [52]  John T. Nockleby & Shannon Curreri, 100 Years of Conflict: The Past and Future of Tort Retrenchment, 38 Loy. L.A. L. Rev. 1021, 1036 (2005).

       [53]  Rustad, supra note 50, at 479.

       [54]  Restatement (Second) of Torts § 821 B (1979).  Nuisance claims in the hands of cities are not always a good thing. See, e.g., Bryan M. Seiler, Moving from “Broken Windows” to Healthy Neighborhood Policy: Reforming Urban Nuisance Law in Public and Private Sectors, 92 Minn. L. Rev. 883 (2008) (describing ways that municipalities have enforced nuisance laws in ways that disadvantage vulnerable people).

        [55]  See generally Press Release, Dep’t of Justice, Justice Dep’t, Federal and State Partners Secure Record $13 Billion Global Settlement with JPMorgan for Misleading Investors About Securities Containing Toxic Mortgages (Nov. 19, 2013), available at http://www.justice.gov/opa/pr/2013/November/13-ag-1237.html.

        [56]  Ben Protess & Jessica Silver-Greenberg, Where Does JPMorgan’s $13 Billion Go?, N.Y. Times (Nov. 21, 2013) available at http://dealbook.nytimes.com/2013/11/20/where-does-jpmorgans-13-billion-go/.

        [57]  Danielle Douglas, JPMorgan’s Settlement: A Win for Communities Hit Hard by Housing Crisis, Wash. Post (Nov. 19, 2013) (internal quotation marks omitted), available at http://www.washingtonpost.com/business/economy/jpmorgans-settlement-a-win-for-communities-hit-hard-by-housing-crisis/2013/11/19/454ceb90-517a-11e3-9fe0-fd2ca728e67c_story.html.