On April 19, 2020, Plaintiffs Law Office of Sabrina Damast, Eye Land Optometry, BNG Restaurant Group Inc., and Umezu Enterprises LLC filed their putative class action in the United States District Court, Central District of California (case number 2:20-cv-03591) against a national lender. Plaintiffs are represented by the Stalwart Law Group.
Plaintiffs are small businesses located in Southern California who submitted applications to defendant-lender for PPP loans under the CARES Act. Plaintiffs alleged that after submitting their applications they each made certain business decisions in reliance on the defendant-lender’s representation that it would process Plaintiffs’ applications “as quickly as possible” and on a “first-come, first-served” basis as required under the applicable SBA Regulations. Plaintiffs claim that the defendant-lender did not process PPP loan applications on a “first-come, first served” basis. Instead, it prioritized applications from bigger companies with larger loan amounts in order to receive greater origination fees. As a result, Plaintiffs claim that their businesses suffered financial harm, wrongfully lost the opportunity to obtain funding that was likely to be forgiven, could not make payroll and were forced to lay off their employees.
Plaintiff bring their claims on behalf of all businesses in California that met the criteria to receive a PPP loan, but whose applications were not processed in accordance with the SBA Regulations’ required “first-come, first-served” basis. The complaint asserts causes of action for violation of Business & Professions Code sections 17200, 17500, and fraudulent concealment.