Small business owners who claim big banks unfairly favored some clients over others in handing out government-backed coronavirus relief loans will have to go it alone in court, a panel of judges ruled, denying several motions to consolidate lawsuits over the issue.

Groups that sued JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. all had requests for consolidation denied on Wednesday by the Judicial Panel on Multi-District Litigation. The panel ruled there would be no benefit to streamlining any of the cases because the facts of the underlying lawsuits in each proposed group were distinct.

“We conclude that centralization will not serve the convenience of the parties and witnesses or further the just and efficient conduct of the litigation,” the panel wrote in three separate rulings.

The small businesses claimed that the lenders unfairly administered funds under the $2.2 trillion coronavirus relief bill, which included the Paycheck Protection Program. The law was meant to provide financial aid to operations forced to shut down by the spread of Covid-19. All three banks have denied wrongdoing and opposed the requests for consolidation.

In the JPMorgan case, seven small-business owners allege that the bank favored larger companies over small ones when it processed applications for government loans. Under the rules of the program, the banks were supposed to process loan applications on a first-come, first-served basis. The plaintiffs allege they were passed over for the loans in favor of larger businesses that applied after they did.

JPMorgan, in a filing, said the claims were a “jigsaw puzzle of unmatched pieces,” including businesses that ultimately got loans, some that complained the aid process was too difficult and didn’t apply, and claims that the bank favored its own clients over non-customers.

In the Bank of America case, the proposed group consisted of three lawsuits. There were five in the Wells Fargo case.

Consolidation would have meant that any additional claims would be overseen by the same judge, who would coordinate evidence collection and the scheduling of individual trials.

Lawyers suing the same company for similar reasons often seek to consolidate cases to distribute costs and attract additional plaintiffs, said Elizabeth Burch, a law professor at the University of Georgia who studies multi-district litigation. And combined lawsuits under multi-district litigation judges have featured in other large-scale legal disputes, including over opioids and Roundup herbicide.

“An MDL really adds to the momentum of the proceedings,” Burch said. “It’s almost like a beacon of light for the plaintiffs’ lawyers.”

(Updates with law professor’s comment)

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Steve Stroth, Anthony Lin

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