The city sought to recover damages related to the costs of “monitoring, maintaining, and demolishing foreclosed properties” and “the diminution in the city’s property tax revenues caused by the depreciating effect foreclosures have had on the affected homes and surrounding properties,” according to Judge Lioi’s opinion. But Judge Lioi found, among other things, that Ohio state law preempts the city’s public nuisance claim and that the allegations did not sufficiently show that the defendants were the proximate cause of the alleged damages.
In a statement to the Litigation Daily, Robert Triozzi, law director for the City of Cleveland, vowed the city would fight on. “Our lawsuit has been about holding those responsible for the damages caused to our neighborhoods accountable for their actions,” he wrote. “That the court chose to absolve these firms’ conduct by dismissing our claims is a setback, but just a temporary setback. As we have always stated, we are in this for the long haul. We will continue this fight to the Sixth Circuit Court of Appeals, where we believe our legal cause will be vindicated. The City of Cleveland deserves its day in court, and we will pursue and defend our rights for as long as it takes.”
Before they start cranking on the appellate briefs, the following banks and law firms can enjoy their victory: Ameriquest Mortgage Securities (Buchalter Nemer and Kehoe & Associates); Citigroup (Thompson Hine and Paul, Weiss, Rifkind, Wharton & Garrison); Countrywide (Goodwin Procter and McGlinchey Stafford); Credit Suisse First Boston (McKee Nelson and Baker & Hostetler); Goldman Sachs (Sullivan & Cromwell and Taft Stettinus & Hollister); Deutsche Bank Securities (Baker & Hostetler; Latham & Watkins; and Porter, Wright, Morris & Arthur); Wells Fargo (Covington & Burling); Greenwich Capital Markets (Jones Day); GMAC-RFC (Buckley Sandler and Calfee, Halter); HBSC Securities (Katten Muchin Rosenman; Vorys, Sater, Seymour & Pease; and Roetzel & Andress); Lehman Brothers Holdings (Jones Day); Merrill Lynch (Skadden, Arps, Slate, Meagher & Flom); Morgan Stanley (Jones Day); Novastar Mortgage (Husch Blackwell Sanders and Hahn, Loeser & Parks); Option One Mortgage (O’Melveny & Myers and Brouse McDowell); Washington Mutual (Ulmer & Berne and Goodwin Procter); Wells Fargo (McLaughlin & McCaffrey and Covington & Burling); and Bank of America (O’Melveny & Myers and Moscarino & Treu).