Term: 2016
Docket: 15-1111
Bank Of America Corp. v. City Of Miami, Florida
- Pro
15-1111 BANK OF AMERICA CORP. V. MIAMI, FL DECISION BELOW: 800 F.3d 1262 CONSOLIDATED WITH 15-1112 FOR ONE HOUR ORAL ARGUMENT. CERT. GRANTED 6/28/2016 QUESTION PRESENTED: This case concerns who may sue under the Fair Housing Act ("FHA''), and for what types of injury. The FHA, like Title VII, requires that a plaintiff be an "aggrieved" person. A plaintiff is "aggrieved" under Title VII only if the person falls within Title VII's "zone of interests." Thompson v. North American Stainless, LP, 131 S. Ct. 863 (2011). But here, although the FHA's language is "nearly identical," the Eleventh Circuit held that the FHA must be interpreted differently-to allow any plaintiff with constitutional standing to bring an FHA suit, even if that person's claim is far outside the zone of interests Congress sought to protect through the FHA. The Eleventh Circuit also held that an FHA plaintiff can adequately allege proximate cause even when the alleged injury is entirely indirect. These holdings allowed the City of Miami to pursue a remarkably attenuated theory of recovery under the FHA: the City seeks to recover money damages from petitioners, residential mortgage lenders, on the theory that petitioners engaged in discriminatory loan practices, some of those loans fell into default, some defaults led to foreclosures, some foreclosures caused neighborhood blight, the neighbors' decreased property values led to decreased tax revenue, and blight increased the cost of services such as police. The questions presented are as follows: 1. By limiting suit to "aggrieved person[s]," did Congress require that an FHA plaintiff plead more than just Article III injury-in-fact? 2. The FHA requires plaintiffs to plead proximate cause. Does proximate cause require more than just the possibility that a defendant could have foreseen that the remote plaintiff might ultimately lose money through some theoretical chain of contingencies? LOWER COURT CASE NUMBER: 14-14543
The City of Miami sued Bank of America Corp. and Wells Fargo & Co., alleging that the banks' discriminatory lending practices had led to a disproportionate number of foreclosures in majority-minority neighborhoods, which in turn caused financial harm to the city. The case reached the U.S Supreme Court in 2016, where it was decided whether or not cities have standing under the Fair Housing Act (FHA) to sue lenders for economic damages resulting from discriminatory lending practices. In a 5-3 decision, with Justice Breyer writing for the majority, it was held that cities do indeed have standing as "aggrieved persons" under FHA and can therefore bring suits against predatory lenders. However, they must show direct causation - meaning they must prove their financial losses were directly caused by these unfair lending practices.
In the dissenting opinion for Bank of America Corp. v. City of Miami, Florida, Justice Clarence Thomas argued that the city did not meet the standard for "proximate cause" under the Fair Housing Act (FHA). He contended that while Miami may have been financially impacted by discriminatory lending practices, these effects were indirect and resulted from numerous intervening factors such as changes in property values or third-party foreclosures. Therefore, he believed it was inappropriate to hold banks responsible for these unforeseen consequences. Additionally, he expressed concern about opening up a potentially limitless floodgate of litigation against financial institutions if cities could sue over any economic ripple effect tied back to alleged FHA violations.
