On May 5, 2020, Studio 1220, Inc., filed a class action lawsuit against a national lender and an affiliate in the United States District Court, Northern District of California (case number 3:2020cv03081). Plaintiff is represented by Keegan & Baker, LLP.
Plaintiff is a small business that operates a chain of clothing stores. Plaintiff claims the defendant-lender and affiliate failed to process PPP loan applications on a “first come, first serve” basis, as they had advertised and as required by law. The complaint alleges that because defendants received a percentage of each loan as an origination fee, they placed priority on PPP applications seeking loan amounts in excess of $150,000.00. Plaintiff alleges that as a result of the priority given to larger loan applications, smaller businesses were unable to obtain critical PPP loan funds needed to survive the COVID-19 epidemic. Plaintiff relies on SBA statistics to establish that defendants “front loaded” high dollar loans before processing smaller loans less than three days before the program’s funds were completely depleted.
Plaintiff’s complaint pleads causes of action for violations of the Unfair Competition Law (Business & Professions Code § 17200, et seq.) and fraudulent concealment.