A former Wells Fargo underwriter can testify against the bank in a redlining lawsuit over the bank's objections, a federal judge has ruled.
Wells Fargo is fighting accusations of
U.S. District Judge James Donato in a Nov. 29 order denied Wells Fargo's motion to disqualify expert witness Dante Jackson, an African-American man and financial services veteran who worked at the bank. Jackson worked as a contract underwriter for Wells between 2001 and 2004, at the bank between 2004 and 2007, and another eight-week stint in 2013.
Counsel for Wells opposed Jackon's inclusion because of his knowledge of the bank's inner workings and his past criticisms of Wells' business with black customers in a podcast. Donato called the employment history argument "not compelling," and said the bank hasn't shown Jackson's prior knowledge was relevant to the lawsuit, which covers actions between 2018 and 2022.
"Wells Fargo's other arguments, including that Jackson has made public criticisms of Wells Fargo, do not warrant the 'drastic measure' of disqualifying an expert pursuant to the Court's inherent powers," wrote Donato.
In a statement Thursday, Wells Fargo said the discrimination case has no merit, and that its underwriting practices in line with federal guidelines are consistently applied regardless of an applicant's race or ethnicity.
"These unfounded allegations by the plaintiffs stand in stark contrast to our significant and long-term commitment to closing the minority homeownership gap," the statement read. "For many years, including those at issue in the current litigation, Wells Fargo was the largest bank originator of mortgage purchase and refinance transactions for minority customers."
The bank did not address the Jackson decision nor answer a question of whether it's still using the underwriting tech under scrutiny.
Dennis S. Ellis, partner at Ellis George LLP and lead counsel for plaintiffs, has accused the bank in case filings of a "history of gamesmanship" against Jackson. The bank fought Jackson's report in support of class certification, which Ellis emphasized used Wells' internal documents also cited by their own expert witness.
Wells earlier this year canceled a deposition for Jackson on the eve of the proceeding, after Jackson had flown across the country to attend. Donato already ordered Wells to reimburse plaintiffs' attorneys for the trip.
Ellis also called the bank's claims that it follows GSE guidelines "detached from reality," and said the bank ignored its own employees who questioned its lending practices. Case filings which include Wells' internal emails show one company expert calling mortgage statistics in the wake of a 2022 Bloomberg story which bolstered plaintiffs' claims "a systemic WF policy issue."
"This is consistent with Wells Fargo's established shameful history of discrimination and unfair practices, which will be further exposed by Mr. Jackson and the other witnesses in this case," wrote Ellis.
The case filed in February 2022 has been contentious. Plaintiff attorneys previously accused the bank of racism after it requested a judge transfer from a black judge to a white judge, an
Numerous points of contention remain ahead of a class certification hearing, and a jury trial has not been scheduled. Donato meanwhile scheduled a "hot tub" hearing for opposing expert witnesses in February, in which they'll have a conversation over their points of disagreement.
Wells has reduced its footprint in mortgage since the refinance boom,
