The ruling, announced by D.C. Attorney General Irvin B. Nathan last week, requires the trial to be held in D.C. Superior Court. Bank of America had wanted arbitration to take place in North Carolina, where it is headquartered.
“The decision is a significant victory for the District, and allows it to move forward with its efforts to recoup sizable losses for the benefit of all District taxpayers,” Nathan said in a statement. “We intend to move expeditiously, and to do all we can to bring to an end the delaying tactics of the bank.”
The tax scheme, the District argued in a complaint filed in 2008, could not have taken place without the participation of Bank of America employees.
As a result, the District is asking the bank for repayment of all of the lost funds, as well as damages and penalties totaling $117 million.
It was not clear when a trial might take place. A spokesman for the District’s Office of Attorney General said the department does not comment on ongoing lawsuits. Bank of America also declined to comment.
The District’s lawsuit is one of several that have plagued the Charlotte-based bank in recent years.
In September, the company paid $39 million in a gender bias case and the bank could face up to $848.2 million in fines for mortgage fraud that occurred in its Countrywide unit.
By comparison, the District’s $117 million complaint is among the smaller lawsuits facing the bank.
“It’s very, very small relative to the $45 to $50 billion they’ve paid already,” said Dick Bove, a banking analyst and vice president of equity research at Rafferty Capital.
Bank of America has long had a stronghold in the Washington area. It currently holds $21.4 billion, or 13.66 percent, of the region’s deposits.