Ethnic Capital: When Targeted Predatory Lending Goes Too Far

Recently there has been a number of notable articles discussing the role of “ethnic capital” in many minority groups, especially among Asian-Americans, where economists such as George J. Borjas, eloquently describes such concept as “the extent to which ethnic skill differentials are transmitted across generations….”  The role of so-called ethnic capital is often attributed to the economic vitality and success of particular areas in the United States, such as Koreatown in Los Angeles, Little Saigon in Orange County, and various Chinatowns, now prevalent throughout the country.  Ethnic capital according to many economists is the basis for the Vietnamese community’s success with respect to nail salons, the Korean community based dry-cleaning businesses, and to some extent, the all you can eat, Chinese buffet.  

Since the recession of 2008 and the demise of the housing market, many Asian American businesses have and continue to suffer from access to working capital, loans, and other financial based resources by which to maintain and otherwise economically develop their particular industry or business.  Such capital vacuum has lent itself to a number of both legitimate and illegitimate financial, banking, lending, and loan based companies setting up shop in many of these communities, specifically targeting particular Asian-based industries or ethnic groups, largely based upon around the various social, cultural, and economic values commonly held as part of the communities ethnic capital.

As a consequence, many Asian-American businesses find themselves subjected to seemingly shadow or fringe banking lending organizations, that specifically target, market, advertise (often directly in such ethnic groups native language), and otherwise seek financial lending opportunities where there is a lack of proper financial disclosures, varying and floating interest rates, exorbitant fees and startup costs, liens placed on real property (including primary residences), and unfettered access to current and future receivables.

The primary goal for such financial or banking organizations is not to lend in the best interests of the company seeking financing or to necessarily further the company’s business objectives, but, rather to exploit the company in order to maximize its profits while disregarding relevant State and Federal banking, loan, lending, and finance based laws.  It is in these situations where predatory lending by such financial institutions intentionally applies ethnic capital in a very subversive, adverse, and detrimental way, that in the long-run, substantially harms as opposed to benefits such communities.

Robert N. Wilkey, Esq. is the Principal Attorney of Wilkey Legal Consultants, LLC (“WLC”) located in Exton, PA, with over a decade of class action, mass tort, and complex civil commercial litigation experience, including claims involving Federal and State laws involving unfair trade practices and consumer protection; banking and lending standards, credit services and truth in lending regulations, breach of good faith and dealing claims, and breach of fiduciary duties.  Mr. Wilkey is an advocate for Asian-American based domestic and international issues.

About Us

Mr. Wilkey holds a BA/MPP from Brigham Young University and a JD from the University of Iowa College of Law, and currently provides regulatory, legal, and consultation and litigation services to individuals, corporations, industry, non-profits, school districts, and government entities.

Legal Disclaimer

The information contained in this Website Article is the property and copyright of WLC and no part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or information storage and retrieval system, without permission in writing from WLC.  The information contained in this Website Article, is provided for informational purposes only, and should not be construed as legal advice on any subject matter. The forms, documents, statements and opinions expressed therein, and links within this site, must not be construed as a substitute for legal advice, nor is it intended to be legal advice.

Use of this Website Article, or contact through this Website Article, is not intended to create, and does not create an attorney-client relationship. No recipients of content from this site, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient’s state. You are urged to seek competent legal advice in the specific state in which you live and in the appropriate area of law to answer your needs.

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The Esquith Class Action Against the Los Angeles Unified School District: Class Treatment Not Proper Where Individualized Questions Predominate

There are a number of media outlets reporting a class action filed this week by a teacher named Rafe Esquith on behalf of himself and 2,000 teachers in the Los Angeles Unified School District.  As one paper is reporting, the gist of the class action is based on allegations of the District “employing an ‘investigative hit squad’ to drum up false charges against older, well-paid teachers in an effort to avoid paying their retirement benefits.”  A copy of the intent to file a class action complaint can be located here. The class action lawsuit by Esquith follows an earlier individual lawsuit by this teacher alleging claims for defamation and employment retaliatory conduct against the School District and others.  

Without getting into the substantive merits of Esquith’s legal claims against the Los Angeles Unified School District, it is significant to highlight not only the procedural fallibility of such proposed class action lawsuit, but the absurdity in opting to seek class treatment for such claims, where the proposed class allegations are facially individualized and therefore remain clearly deficient throughout.

The procedural guidelines and jurisprudence regarding class certification is well established, where Fed. R. Civ. Pro. No. 23(a) set forth that, “a class may only be certified if: (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.”  See also Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935 (9th Cir. 2009).   Additionally, under Rule 23(b)(3), a class may be certified if the district court “finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Id. citing to (8 Fed. R. Civ. P. 23(b)(3)).

In Plaintiff’s document entitled “Claim against the Los Angeles Unified School District” and Class Action Claims (pg. 15) dated June 22, 2015, Plaintiffs sets forth nearly 14 pages of individualized allegations, facts, circumstances and/or prohibited conduct, forming the basis of Plaintiff’s legal claims against the School District.  Herein lies the achilles heel for Mr. Esquith’s efforts to seek class certification and treatment for this particular case against the School District, where based on his own assertions and allegations, establishes a clear course of individualized questions of law and facts that are specific to him and him alone.  If Mr. Esquith’s narrative describing facts and allegations against the District are indicative of what other teachers and prospective class members may or may not have experienced, then it is certain that the Court will be hard-pressed to determine that class treatment here is procedurally proper where questions of law or fact common to class members do not predominate, rather it is the questions affecting individuals members that predominates wherein class treatment is not proper in this case.

About Us

Robert N. Wilkey, Esq. is the Principal Attorney of Wilkey Legal Consultants, LLC (“WLC”) located in Exton, PA, with over a decade of class action, mass tort, and complex civil litigation experience.  Mr. WIlkey holds a BA/MPP from Brigham Young University and a JD from the University of Iowa College of Law, and currently provides regulatory, legal, and consultation and litigation services to corporations, industry, non-profits, school districts, and government entities.

Legal Disclaimer

The information contained in this Website Article is the property and copyright of WLC and no part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or information storage and retrieval system, without permission in writing from WLC.  The information contained in this Website Article, is provided for informational purposes only, and should not be construed as legal advice on any subject matter. The forms, documents, statements and opinions expressed therein, and links within this site, must not be construed as a substitute for legal advice, nor is it intended to be legal advice.

Use of this Website Article, or contact through this Website Article, is not intended to create, and does not create an attorney-client relationship. No recipients of content from this site, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient’s state. You are urged to seek competent legal advice in the specific state in which you live and in the appropriate area of law to answer your needs.

Wilkey Legal Consultants, LLC
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Exton, PA 19341

http://www.robertwilkey.com
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