A proposed class action accusing financial services company Social Finance Inc. of discriminating against immigrants will continue after a California federal judge junked the company's bid to push the allegations into arbitration.
U.S. District Judge Haywood S. Gilliam allowed the two men behind the suit — a green card holder and a recipient of Deferred Action for Childhood Arrivals, or DACA, a form of deportation relief for people who came to the U.S. without lawful immigration status as children — to move forward with two of the classes they seek to certify in his Monday order, and granted them time to amend their claim to a third.
The men say they sought student loan refinancing and a personal loan, respectively, from SoFi and its subsidiary SoFi Lending Corp. In each case their applications were rejected solely because of their immigration status, they allege.
"On a practical level, SoFi asserts that it does not discriminate against non-citizens because some non-citizens — namely [lawful permanent residents] and some visa-holders — are still eligible to contract for credit with SoFi," Judge Gilliam wrote. "This distinction, however, is not supported by the language of the statute," allowing the men to move forward with their civil rights claim.
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Juarez said he checked in periodically over the years to see if the company had changed its policy towards DACA recipients and each time SoFi customer service representatives told him he was still ineligible for refinancing.
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Outten & Golden LLP attorney Moira Heiges-Goepfert, who represents Juarez and his co-petitioner Calin Segarceanu, said the order supported the idea that mandatory arbitration agreements "should be construed narrowly" and that, while increasingly common, "forced arbitration should be not limitless," in a statement to Law360.
Since many of the deals that emerge from arbitration are confidential, the process can also deprive the public of rulings on matters of interest like those raised by her clients, according to Heiges-Goepfert.
"DACA was enacted to help immigrants who were brought into this country as children come out of the shadows and participate in American life. This decision is the latest in a string of cases showing that those Dreamers, and other immigrants, are protected under our nation's civil rights laws, and that companies should think carefully before enacting policies that sideline, exclude or otherwise discriminate against them," she said.
The second proposed class moving forward under Monday's order stems from Calin Segarceanu's experience with the company. Segarceanu, a Romanian citizen, held two-year conditional permanent residency when he applied for a personal loan from SoFi in 2019
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Following Monday's order, the plaintiffs may push for certification of a class of DACA recipients or conditional permanent residents whose SoFi loan applications were either unsuccessful or were denied starting on May 19, 2017. A second class of conditional permanent residents whose consumer reports were pulled by SoFi on or after July 30, 2018, may also move forward under the Fair Credit and Reporting Act.
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Moira Heiges-Goepfert, Mikael Andres Rojas and Ossai Miazad of Outten and Golden LLP and by Sophia L Hall of Lawyers for Civil Rights.