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US Supreme Court issues equally divided opinion in spousal lending case

[JURIST] The US Supreme Court [official website] on Tuesday released a 4-4 opinion [opinion, PDF] in the case Hawkins v. Community Bank of Raymore [SCOTUSblog backgrounder]. The case addresses[JURIST report] the role of spouses as guarantors in credit applications. In this case, Community Bank of Raymore asked for a guaranty to support the creditworthiness of PHC, a development company, and its two members, Gary Hawkins and Chris Patterson. The bank requested the guaranties come from the members' wives, Valerie Hawkins and Janice Patterson. When a dispute arose, Valerie Hawkins and Janice Patterson challenged the validity of the guaranties, claiming that they violated Regulation B and the Equal Credit Opportunity Act (ECOA) [text, PDF]. The question turns on statutory interpretation—whether Valerie Hawkins and Janice Patterson are considered direct applicants for lending purposes, a prerequisite to ECOA protection. In August 2014 the US Court of Appeals for the Eighth Circuit [official website] affirmed [opinion, PDF] the ruling of the US District Court for the Western District of Missouri's [official website] grant of summary judgment in favor of Community Bank. The Supreme Court's opinion only states, "[t]he judgment is affirmed by an equally divided Court."

This is the court's first equally divided opinion since the death of Justice Antonin Scalia [JURIST report] last month. Last week US President Barack Obama [official website] nominated Chief Judge Merrick Garland [WH materials] of the US Court of Appeals for the District of Columbia Circuit [official website] to replace him. Scalia was the longest serving member the court, having been appointed by Ronald Reagan and confirmed in 1986. He was one of the more conservative justices and authored many noteworthy decisions, including District of Columbia v. Heller [JURIST report], in which the court ruled that the Second Amendment to the US Constitution prohibits the District of Columbia from banning private handgun ownership. Scalia was born in Trenton, New Jersey, on March 11, 1936. Before being appointed to the Supreme Court he served on the US Court of Appeals for the District of Columbia Circuit.

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