Wells Fargo to Appeal Defeat of Mortgage Suit Challenge

Wells Fargo & Co. (WFC) said it will appeal a decision forcing it to defend a U.S. lawsuit over illegal mortgage practices.

Wells Fargo has said it can’t be sued by the U.S. attorney in New York under the False Claims Act because it had already reached an agreement with the government that was approved last April.

The San Francisco-based bank today filed a notice of appeal of a Feb. 12 decision by U.S. District Judge Rosemary Collyer in Washington that a $25 billion agreement Wells and four other banks made with the Justice Department in April 2012 didn’t release it from facing the false-claims allegations in the New York case filed in October.

The “certain liabilities” Wells Fargo was released from in its settlement with the Justice Department didn’t include the issues raised in the New York case, Collyer wrote at the time.

Katie Dixon, a Justice Department spokeswoman, didn’t immediately respond to a phone message seeking comment on the bank’s filing today.

The Washington case is U.S. v. Bank of America, 12- cv-00361, U.S. District Court, District of Columbia (Washington). The New York case is U.S. v. Wells Fargo Bank NA, 12-cv-07527, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: Andrew Zajac in Washington at azajac@bloomberg.net; Tom Schoenberg in Washington at tschoenberg@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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