Bringing Economic Justice to Baltimore: How Civil Justice's Economic Justice Project is Fighting Back Against Companies that Prey on Under-resourced Communities

In 2016, the City Paper ran an article by Morgan State Professor Lawrence Brown titled “The Two Baltimores–the White L vs. the Black Butterfly.”  The article discusses how the affluent, and primarily white, neighborhoods of Baltimore form a “White L” through the center of the city, while the remaining neighborhoods of East and West Baltimore appear as a “Black Butterfly.” You can see this formation in the maps below created by the Baltimore Neighborhood Indicators Alliance using Census data.

Source: American Community Survey; Analysis: Baltimore Neighborhood Indicators Alliance – Jacob France Institute (2018).

Available at https://www.bniajfi.org/wp-content/uploads/2014/04/Percent-Unemployed-2012.jpg

Source: U.S. Bureau of the Census, American Community Survey; Analysis: Baltimore Neighborhood Indicators Alliance – Jacob France Institute (2018).

 

Professor Brown’s article highlights the way in which the White L is structurally advantaged over the Black Butterfly, from the location of bikeshare stations to the location of projects receiving Tax Increment Financing. This disinvestment in the Black Butterfly allows unscrupulous businesses to flourish. These businesses exploit the desperate circumstances of their customers for profit by burying them in debt and trapping them in a cycle of poverty. Civil Justice fights back against these unscrupulous businesses through its Economic Justice Project, which helps connect Marylanders facing unfair financing transactions, arbitrary repossessions, and illegal evictions, with attorneys who can help. Many of Civil Justice’s cases involve auto-related financing abuses, which is one of the many financial abuses that disproportionately affect persons living within the economically-depressed wings of Baltimore.

 

One Stop Auto Parts—Abuses in Financing Auto Repairs

 

Civil Justice with co-counsel Thomas J. Minton of Goldman & Minton, P.C. recently filed a class action lawsuit challenging the abusive practices of One Stop Auto Parts, Inc. (“One Stop”). In our Complaint, we explain how One Stop was a Baltimore City auto repair shop that catered to the working poor of Baltimore City and its surrounding areas, who rely on their vehicles to get to and from their jobs that support their families.  When something goes wrong with their vehicles, One Stop's typical customer is in a panic, facing potential job loss if she cannot get to work, which can lead to eviction and homelessness.  Accordingly, One Stop encountered its customers at their most desperate and vulnerable.

 

One Stop’s practice was to offer a seeming lifeline to its customers that was ultimately so exploitative that it trapped them in the cycle of poverty.  One Stop would finance the needed auto repairs, but at exorbitant interest rates, with hidden financing charges and inflated late charges. Unsurprisingly, many of its customers fell behind on payments to One Stop, often when the expensive repairs that were illegally financed did not actually keep the vehicle running for long enough to pay off the debt.

 

In mapping the addresses of the people One Stop has sued to collect on its illegal and usurious loans, One Stop’s customers come from the structurally disadvantaged neighborhoods in east and west Baltimore.

 
Map of One Stop Defendants in relation to Baltimore City neighborhoods where 15% or more of families are under the poverty line. Map by Morris Speller, PhD Candidate at Johns Hopkins University. Source: U.S. Bureau of the Census, American Community Survey; Analysis: Baltimore Neighborhood Indicators Alliance – Jacob France Institute (2018). 


 
Map of One Stop Defendants in relation to Baltimore City neighborhoods that are majority African American. Map by Morris Speller, PhD Candidate at Johns Hopkins University. Source: American Community Survey; Analysis: Baltimore Neighborhood Indicators Alliance – Jacob France Institute (2018).
 

You can see the same butterfly formation when mapping neighborhoods that have fewer than two banks and bank branches per 1,000 residents, below. Organizations such as the Maryland Consumer Rights Coalition have recently challenged Bank of America's disproportionate number of closures of bank branches in majority Black neighborhoods. (This problem is not unique to Baltimore. In its study on lending discrimination, Reveal found that banks in Philadelphia concentrated three-quarters of their branches in white-majority neighborhoods.)

In an interview with Ratchet + Wrench, One Stop’s owner Jerry Greeff explained that his business was advantaged by the lack of competition in the area: “But I also have very little competition in my area. There’s no density of auto repair shops that would come into this area.” Civil Justice’s lawsuit seeks to enforce consumer protection laws that are designed to curb the unfair advantage obtained by One Stop when it engaged in its exploitative business practices.

 
Map of One Stop Defendants in relation to Baltimore City neighborhoods that have fewer than two banks and bank branches per 1,000 residents. Map by Morris Speller, PhD Candidate at Johns Hopkins UniversitySource: Federal Deposit Insurance Corporation; Analysis: Baltimore Neighborhood Indicators Alliance – Jacob France Institute (2018).

  

Another map shows that One Stop’s customers resided in areas where residents had longer commutes. Whether this is due to unreliable public transportation or the lack of employment opportunities within these neighborhoods, this map illustrates the tremendous need for reliable and affordable transportation within these neighborhoods.

 


 Map of One Stop Defendants in relation to Baltimore City neighborhoods where 20% of working residents have a commute longer than 45 minutes. Map by Morris Speller, PhD Candidate at Johns Hopkins University. Source: American Community Survey; Analysis: Baltimore Neighborhood Indicators Alliance – Jacob France Institute (2018).

 

Civil Justice's lawsuit against One Stop is still in its early stages, but we hope we can obtain some relief for the thousands of Marylanders who are afflicted with these judgments.   

Ace Motor Acceptance – Subprime Auto Lender

Another case that Civil Justice handled involved Ace Motor Acceptance (“Ace”). Ace was a regional subprime auto lender that specialized in working with used car dealerships that exploit the most vulnerable among us by selling questionable vehicles at marked up prices with exorbitant interest rates. These borrowers were typically the working poor, who had to buy a vehicle at such terrible terms just to get to work. When the excessive charges would ultimately cause a borrower to default, Ace would aggressively collect against the consumer. 

Ace would almost always require a borrower to have a GPS Starter Interrupt device installed in their vehicles, a device that would allow Ace to disable the vehicle if the borrower fell behind on payments and use GPS to track its movements Ace would know where to send the repo man.  Indeed, Civil Justice first became aware of Ace when Civil Justice represented a customer of Ace who had her vehicle shut off while she was current on her payments.  This degrading treatment of their customers is a foreign concept to most living in Baltimore’s White L, but is unfortunately a common practice in used car lending in economically depressed areas such as Baltimore's Black Butterfly.

Ace was one of the most active litigants in Baltimore, obtaining at least $1,217,506.67 in judgments against economically vulnerable residents of Baltimore City from 2010 to 2016, making it the 47th most active litigant in Baltimore City during that period when ranked by judgment amount.  And mapping the addresses of defendants sued by Ace in Maryland reveals a familiar pattern:

Civil Justice is proud to report that, as a result of a lawsuit filed as part of its Economic Justice Project based on Ace’s numerous violations of state and federal law in connection with its aggressive collections, we have taken this bad actor off the table and Ace filed for bankruptcy in early 2018.  For more details, see our announcement here

Civil Justice’s Economic Justice Project – Fighting Back against the Predatory Businesses

Civil Justice’s Economic Justice Project creates opportunities for the working poor to obtain legal assistance to address unfair and predatory practices that lead to economic instability and prevent individuals and families from escaping poverty.  The Economic Justice Project uses a unique model to obtain legal services for those who cannot afford them, at a much lower cost than traditional legal aid or pro bono programs. In addition to our in-house litigation, the Project screens and places meritorious cases with private attorneys who will defend individuals in lawsuits pending against them for no up-front cost.  Without the screening and referrals made through the project, it is very difficult for consumers to find representation, since only a small number of attorneys specialize in handling these types of cases.  But Civil Justice has a group of dedicated, creative lawyers who can use consumer protection laws to powerful effect. 

It is amazing to see the results of forging these connections between clients and the right attorneys, frequently turning situations where a client is facing a lawsuit that would bury them in crushing debt, and watching the attorney turning things around, so that instead of getting a judgment against their former customer, the business ends up paying their former customer. 

Civil Justice also occasionally handles cases in-house as part of the Economic Justice Project, such as a recent case in which Civil Justice's arguments prevailed in Maryland's highest court in a ruling that saved Maryland residential tenants from millions of dollars in illegal interest.  Civil Justice is also working hard to expand the program, including using a new referral technology, JusticeReferrals.org, to help other organizations connect potential clients with attorneys who can help.  

If you are interested in reading more about Civil Justice, click here.  If you would like to learn more about our Economic Justice Project, click here.  To make a donation to support our work, please click here

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