## Facts

- The City of Cincinnati alleged that Deutsche Bank and Wells Fargo entities, including entities acting as trustees for RMBS trusts, held title to numerous vacant residential properties within the city.
- The City alleged the properties were frequently left in disrepair after foreclosure, with conditions such as weeds, litter, and structural deterioration.
- The City alleged defendants received code-enforcement notices and citations, failed to respond or appear in enforcement matters, and did not bring properties into compliance.
- The City framed the conduct as a deliberate business practice: deciding whether to comply with state and local property-maintenance laws based on the property’s economics and declining compliance where costs were unlikely to be recovered.
- The City claimed the resulting conditions increased blight and crime and imposed added municipal costs for police, fire, code enforcement, and demolition.
- The operative pleading sought injunctive and declaratory relief and damages, asserting municipal-code violations, statutory and common-law public nuisance, declaratory judgment, “intentional interference with public trust duties,” and a stand-alone punitive-damages count.

## Issues

1. Whether the City plausibly stated municipal-code, statutory-nuisance, and common-law public-nuisance claims based on an alleged systemic practice of noncompliance with property-maintenance obligations.
2. Whether the complaint plausibly alleged liability as to each named bank entity, including affiliates or parent entities not alleged to own or control the properties.
3. Whether Ohio law recognizes an independent cause of action for “intentional interference with the City’s fiduciary public trust duties.”
4. Whether a stand-alone “punitive damages” count states a cognizable claim.

## Decision

- The court granted in part and denied in part the motions to dismiss under Rule 12(b)(6).
- The court dismissed three Deutsche Bank non-trustee (non-property-owning/control) entities for failure to plead facts plausibly connecting them to the alleged conditions or conduct.
- The court allowed municipal-code and public-nuisance claims to proceed, at least in part, against the remaining entities alleged to own the properties or hold title as trustees and to have the ability to abate the conditions.
- The court dismissed the “intentional interference with public trust duties” claim as not recognized as an independent tort under Ohio law.
- The court dismissed the stand-alone punitive-damages count because punitive damages are a remedy, not a separate cause of action.

## Legal Principles

- Under Rule 12(b)(6), a complaint must plead sufficient factual matter to state a plausible claim; conclusory allegations are insufficient, and liability must be plausibly tied to each defendant entity.
- A municipality may pursue nuisance-based and ordinance-enforcement theories to abate conditions that allegedly harm public welfare; at the pleading stage, allegations of widespread, recurring property-maintenance violations may support such claims.
- Trustee or record-owner status, coupled with allegations of control or ability to maintain property, can be sufficient at the pleading stage to support potential liability for code violations and nuisance abatement.
- Ohio law does not permit novel, free-standing tort claims absent recognized legal authority; courts may dismiss attempts to create new causes of action.
- Punitive damages are a form of relief dependent on an underlying substantive claim and cannot be pleaded as an independent count.

## Conclusion

The court permitted Cincinnati’s code-enforcement and public-nuisance theories to proceed against entities plausibly alleged to own or control the vacant properties, while dismissing inadequately connected corporate affiliates and eliminating noncognizable claims for interference with public trust duties and a stand-alone punitive-damages count.


City of Cincinnati v. Deutsche Bank Nat'l Tr. Co., 897 F. Supp. 2d 633 (S.D. Ohio 2012)