Elizabeth L. McKeen

Last year, McKeen helped lead a team that won a significant victory involving class-action certification, extending the landmark Wal-Mart v. Dukes ruling to include fair-lending practices.

She represented H&R Block's subsidiary Sand Canyon Mortgage Corp., formerly known as Option One Mortgage Corp.

A district court in Massachusetts decertified a 130,000-plus member class nationwide composed of African-American borrowers who had obtained a mortgage loan from Option One Mortgage Corp. or H&R Block Mortgage Corp. over a certain period of time. Barrett v. H & R Block Inc., 08-10157 (D. Mass., filed Feb. 1, 2008).

The fair-lending class action claimed violations of the Equal Credit Opportunity Act and the Fair Housing Act, alleging that African-American mortgage borrowers paid more, on average, for their loans than did white borrowers.

Citing the U.S. Supreme Court's groundbreaking 2011 decision in Wal-Mart v. Dukes, McKeen argued that the mere delegation of decision-making authority to third-party brokers isn't sufficient to establish a uniform policy necessary for commonality under federal law.

"It doesn't make sense to say that you can compare a borrowing price received by a borrower in Chicago in 2003 to what someone else received in Boston in 2006," McKeen said. "There were different brokers and different loan products. When you average numbers, as the plaintiffs tried to do here, it statistically tends to mask individual differences that may be going on."

It does not mean that there weren't "bad apples" among the brokers in the bunch, she said.

"But when you show the large geographic areas, there were situations when minorities got better prices," McKeen said. "You can't lump them in altogether."

While the ruling focused on class certification, McKeen said the underlying merits of the case also came into play.

"It showed that different brokers had their own fair-lending policies," she said. "Some had none, some had very strict policies. The underlying point was that there were brokers who were really involved in decision making in such a way that they were the drivers of what happened to loan prices perceived by the borrower."

Earlier this month, the appellate court declined the plaintiffs' request for interlocutory review.

"This was almost a microcosm of what was going on with the financial crisis, with fair lending and subprime mortgage loans," McKeen said.

The case also was a significant extension of Dukes in the fair-lending context, she added, and why the litigation, in certain instances, "highlights some of the reasons why it's simply not appropriate."

- PAT BRODERICK