Recently, several Maryland-based small businesses filed one of the first lawsuits arising from the Paycheck Protection Program (the “PPP”) in the United States District Court for the District of Maryland. The named plaintiffs in this putative class action lawsuit were small businesses that have long-standing banking relationships with Bank of America and were unable to apply for PPP loans through Bank of America due to its decision to only offer PPP loans to companies with whom it has existing lending (as opposed to banking) relationships, or companies with whom it has banking relationships who also affirm that they do not have any outstanding loans, including credit cards, with other banks. The plaintiffs alleged that Bank of America “has no legal authority under the CARES Act to deny access to, restrict or otherwise impede the access of small businesses to these critically important business-saving funds,” noting also that the PPP funds can only be accessed by small businesses on a “first come, first served” basis. The plaintiffs relied on three separate legal theories to advance lawsuit: first, that Bank of America violated the recent Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) that created the PPP (and which does not expressly provide a private right of action for PPP-related lawsuits) by instituting and enforcing the challenged restrictions; second, that Bank of America violated the preexisting U.S. Small Business Administration 7(a) Loan Program (which the PPP has supplemented), in instituting and enforcing the same challenged restrictions; and third, that Bank of America was and will continue to be unjustly enriched through the institution and enforcement of the challenged restrictions.
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Eric M. George | Peter W. Ross | Nathan J. Hochman | Thomas P. O’Brien | John Scholnick | Ryan Q. Keech | James L. Michaels | Carl Alan Roth | Noah S. Helpern | Richard A. Schwartz
