Federal Judge Dismisses Cleveland Public Nuisance Suit Against Big Banks Over Subprime Mess That Left Neighborhoods In Ruins

In Cleveland, Ohio, The Plain Dealer reports:

• U.S. District Judge Sara Lioi has dismissed Cleveland's lawsuit against large investment banks that Mayor Frank Jackson believes enabled the subprime lending and foreclosure crisis here. In a 36-page decision (download PDF file), Lioi ruled that the city's public nuisance complaint was "pre-empted" by a section of Ohio Revised Code that does not allow municipalities to regulate lending. She also wrote that the city failed to demonstrate an unreasonable interference with a public right and that the city did not prove that the banks named in the suit caused the damages.

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• Jackson filed the suit in January 2008, contending that Wall Street giants such as Deutsche Bank and Goldman Sachs irresponsibly bought and sold high-interest home loans. These practices, the mayor argued, depleted the city's tax base and left neighborhoods in ruins.
  The city has appealed Lioi's ruling.

For more, see Lawsuit blaming banks for foreclosure mess in Cleveland is dismissed by federal judge.

Go here for the federal court's ruling.

For the original lawsuit, initially filed in state court and subsequently moved to federal court, see City of Cleveland v. Deutsche Bank Trust Company, et al.