[JURIST] The US Supreme Court [official website] heard oral argument [day call, PDF] Monday on two cases. In Hawkins v. Community Bank of Raymore [transcript, PDF], the court heard arguments regarding 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). 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. In so ruling, the Eighth Circuit stated, “the text of the ECOA clearly provides that a person does not qualify as an applicant under the statute solely by virtue of executing a guaranty to secure the debt of another.”

The Supreme Court also heard argument in OBB Personenverkehr AG v. Sachs [transcript, PDF], which asks the Supreme Court to interpret the doctrine of foreign immunity with an eye toward global interconnectedness. From her home in California, Carroll Sachs purchased a Eurail pass to tour Europe. When boarding a train in Austria, Sachs fell onto the tracks and was run over, causing her to lose both legs. Sachs brought suit against the Austrian-owned train company in the US District Court for the Northern District of California asserting negligence, but the court granted OBB [official websites] summary judgment for lack of jurisdiction. The district court’s decision was overruled [opinion, PDF] by the US Court of Appeals for the Ninth Circuit [official website], which found that OBB had substantial contacts through commercial activity so as to subject it to jurisdiction in the US. OBB now appeals, urging the Supreme Court to find that the Foreign Sovereign Immunities Act of 1976 [text, PDF] prohibits all lawsuits against foreign entities.