Supreme Court splits 4-4 in loan case alleging marital-status bias; circuit split remains
The U.S. Supreme Court has split 4-4 in a case involving a claim of marital-status discrimination in a bank loan.
The split decision (PDF) in Hawkins v. Community Bank of Raymore has the effect of affirming a federal appeals court decision against two women making the discrimination claim. The case is the first 4-4 decision issued by the Supreme Court since the death of Justice Antonin Scalia.
The women, Valerie Hawkins and Janice Patterson, had signed personal guarantees for a $2 million loan on behalf of their husbands and the property development company they owned. The agreement made the women “primarily and unconditionally liable” for the loans.
Community Bank of Raymore claimed in a later lawsuit that it could collect the full amount from the women without pursuing their husbands or the collateral.
Hawkins and Patterson claimed the guarantees were required because of their marital status, violating nondiscrimination provisions of the Equal Credit Opportunity Act.
The St. Louis-based 8th U.S. Circuit Court of Appeals had ruled the women were not protected because they were not “applicants” for credit as defined by the law. The appeals court also ruled the Federal Reserve Board exceeded its authority when it issued a regulation interpreting the term “applicant” to include guarantors.
The split decision leaves the issue unresolved nationally because of a contrary ruling by the Cincinnati-based 6th U.S. Circuit Court of Appeals, according to a press release issued on behalf of Lathrop & Gage, which represented the bank.
