Swanson v. Citibank

Brief Fact Summary.

Woman sues bank and appraisers for allegedly devaluing her house so as to deny her a home-equity loan because she is Black.

Synopsis of Rule of Law.

Under Twombly, a court cannot consider whether facts are probable but whether a set of facts are possible.

Facts.

Plaintiff Swanson was applying for a mortgage with Citibank and believed that she was being discouraged by the Citibank representative from applying for a loan because Plaintiff Swanson is Black. Plaintiff requested to speak to a manager. Swanson told the representative and the manager that she was previously denied a home-equity loan by another bank. The manager told Plaintiff that it was harder to get a loan from Citibank than other banks. Plaintiff nevertheless applied for the loan and was conditionally approved based on her representation that her house was worth $270,000. Defendant Citibank hired Andre Lanier and PCI Appraisal Services to appraise Plaintiff Swanson’s home, which they said was $170,000. Defendant Citibank thereafter denied Plaintiff Swanson’s home-equity loan due to the low appraisal.

Issue.

Under the plausibility standard established by Twombly, is the court to determine whether a set of alleged facts are probable?

Held.

No, under Twombly a court is to determine whether a set of alleged facts is possible, not probable. The district court’s dismissal of Plaintiff Swanson’s claims against all Defendants is reversed.

Dissent.

Justice Judge Posner dissenting in part

Swanson does not give a plausible set of facts. Her claim would be stronger if she showed other facts, for example, alleging that she was competing with a white person for a loan but was denied because she was Black. But this was not the case because her denial for the loan was based solely on the fact that her appraisal was too low. The appraisal by Defendant Lanier rendered a loan to Plaintiff Swanson by Defendant Citibank unwise. Plaintiff Swanson acknowledges that home values had gone down and that she was denied a home-equity loan by another bank. Considering she was applying for a home loan after the 2008 financial crisis, a finding of discrimination based on these facts is implausible.

Discussion.

1. Twombly established the plausibility requirement.
2. Plausible does not mean that a court should consider whether a set of facts is more likely or probable, but only requires a plaintiff to allege a set of facts that are possible.
3. In this case Plaintiff Swanson has alleged racial dsicimination against Defendants.
4. Plaintiff Swanson has identified the type of dicsimination, those she thinks are responsible for the discrimination, and a timeline which are enough to state a cause of action against Citibank.
5. Just because Plaintiff Swanson included other futile facts does not diminish her complaint.
6. Against Defendants Lanier and PCI Plaintiff Swanson alleges that they discriminatorily devalued her home in connection with her home-equity loan application with Citibank because of her race.

She will need to show more evidence to prove her case in the long run but these facts are sufficient to survive a Rule 12(b)(6) motion to dismiss.