Minneapolis and several neighborhoods struck back, suing real estate company T.J. Waconia over foreclosed property not properly maintained, USA Today reported.
A judge in the case decided in the plaintiffs' favor, appointing a caretaker to oversee 141 properties, the paper reported.
"Hundreds of cities across the United States are in the same position," sociology Professor Greg Squires of George Washington University told USA Today.
Encouraged by early courthouse victories, "I think there will be more lawsuits," Squires said.
But, lawsuits could "scare lenders out of the market," John Mechem, a spokesman for the Mortgage Bankers Association said.
Mark Ireland of the Foreclosure Relief Law Project told the newspaper the legal option was "charting new territory."
"When you're faced with one of the biggest economic crises facing our country in a long time, cities in particular have to explore every tool they have," he said.