897 F. Supp. 2d 633
S.D. Ohio2012Background
- City of Cincinnati sues Deutsche Bank entities and Wells Fargo over alleged nuisance properties and maintenance practices; case removed from state court; amended complaint seeks injunctive, declaratory, and damages relief across many Counts.
- Alleged nuisance practices involve decisions to comply with codes based on economic self-interest, leading to blighted properties and public costs.
- Properties are owned by trusts where DBNTC/DBTCA act as trustees or by Wells Fargo as trustee; ownership may be complex and some properties may have changed hands.
- City contends it cannot identify all current owners and that servicers maintain properties at issue; notices and enforcement actions have been unsuccessful.
- Defendants moved to dismiss under Rule 12(b)(6); the court will assess standing, causation, preemption, economic loss doctrine, and scope of relief sought.
- Court previously realigned the Hamilton County Treasurer for diversity; now parties move to dismiss various grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing of non-trustee Deutsche Bank entities | City contends DB entities own/own through trusts and are liable | DB entities act only as trustees or are derivative; no ownership liability | Granted as to non-trustee DB entities; no plausible direct ownership liability shown. |
| Proximate cause and economic loss doctrine bar damages | Damages arise from nuisance practices causing blight and costs | Damages too indirect; economic loss doctrine bars claims | Damages claims barred by economic loss doctrine; injunctive relief may be feasible for specific properties. |
| Statutory nuisance claims and injunctive relief scope | Claims against ownership for abatement and injunctive relief against nuisance | Only owners may be enjoined; some properties not owned by defendants | Claims may proceed for specific properties actually owned (not against former owners); injunctive relief allowed for those properties. |
| Interference with fiduciary duty claims | City alleges intentional interference with public duties owed to citizens | No recognized Ohio tort for interference with public duties | Dismissed as to count on intentional interference with fiduciary duties. |
| Punitive damages claim | Punitive damages sought as independent claim | Ohio does not recognize independent punitive damages claim | Dismissed as independent claim; prayer for relief remains as a potential remedy. |
Key Cases Cited
- City of Cincinnati v. Beretta USA Corp., 95 Ohio St.3d 416 (Ohio 2002) (preexisting nuisance framework; supports non-strict limits on nuisance claims and economic loss considerations)
- Corporex Development & Construction Management, Inc. v. Shook, 106 Ohio St.3d 412 (Ohio 2005) (economic loss doctrine bars purely economic damages in negligence context)
- State v. McKelvey, 12 Ohio St.2d 92 (Ohio 1967) (public office fiduciary principle; relevance to public duties claim)
- Union Guardian Trust Co. v. Detroit Trust Co., 72 F.2d 120 (6th Cir.1934) (distinguishes trustee capacity from individual corporate liability)
- City of Cleveland v. Ameriquest Mortgage Securities, 615 F.3d 496 (6th Cir.2010) (proximate cause and nuisance preemption considerations in mortgage-related claims)
- Muething v. Lawyers Cooperative Publishing Co., 65 Ohio St.3d 273 (Ohio 1992) (non-economic harms; limits on recoverable damages in certain contexts)