Galope v. Deutsche Bank National Trust Co., No. 12–56892, 2014 WL 1244279 (9th Cir. Mar. 27, 2014)
The court of appeals reversed a grant of summary judgment in favor of Deutsche Bank and other defendants. Galope adequately alleged that she had standing to sue on her LIBOR-based consumer protection and related claims: she alleged that she wouldn’t have taken her loan had she known of defendants’ manipulation of LIBOR. Her cognizable injury occurred when she bought the loan, not when she paid manipulation-affected interest. The sale of her house was rescinded, but that didn’t moot her claims for damages. (Certain defendants apparently sold her house in violation of the automatic stay in bankruptcy; Galope sufficiently alleged a violation of the covenant of good faith and fair dealing because there was sufficient evidence to support a reasonable inference that they had notice of the automatic stay when they executed the trustee’s sale of the home.)
Judge Nguyen dissented in part on standing grounds. Galope didn’t allege loss from deceptive conduct because her payments were never affected—“she paid a fixed interest rate and defaulted before the allegedly manipulated LIBOR rate went into effect on her loan; she then was granted a loan modification with a (lower) fixed interest rate that likewise was unrelated to the LIBOR rate and defaulted again.” She might have alleged but-for causation, but she didn’t allege loss from the manipulation, so her injury was too attenuated for Article III standing.