16630 Southfield Ltd. v. Flagstar Bank, No. 12–2620.

• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)
• Writing for the Court: SUTTON
• Citation: 727 F.3d 502
• Parties: 16630 SOUTHFIELD LIMITED PARTNERSHIP; Samir A. Danou; Triple Creek Associates, L.L.C.; and Danou Technical Park, L.L.C., Plaintiffs–Appellants, v. FLAGSTAR BANK, F.S.B., Defendant–Appellee.
• Docket Number: No. 12–2620.
• Decision Date: 14 August 2013

727 F.3d 502

16630 SOUTHFIELD LIMITED PARTNERSHIP; Samir A. Danou; Triple Creek Associates, L.L.C.; and Danou Technical Park, L.L.C., Plaintiffs–Appellants,
v.
FLAGSTAR BANK, F.S.B., Defendant–Appellee.

No. 12–2620.

United States Court of Appeals,
Sixth Circuit.

Argued: Aug. 2, 2013.
Decided and Filed: Aug. 14, 2013.

[727 F.3d 503]

ARGUED:Carl G. Becker, Becker Law Firm, P.L.C., Troy, Michigan, for Appellants. J. Adam Behrendt, Bodman PLC, Troy, Michigan, for Appellee. ON BRIEF:Carl G. Becker, Becker Law Firm, P.L.C., Troy, Michigan, for Appellants. J. Adam Behrendt, Bodman PLC, Troy, Michigan, for Appellee.

Before: CLAY, SUTTON and GRIFFIN, Circuit Judges.

OPINION
SUTTON, Circuit Judge.

The plaintiffs claim that Flagstar Bank violated the Equal Credit Opportunity Act, 15 U.S.C. § 1691, et seq., by discriminating against them on account of national origin. Because they have not pled sufficient facts to raise a plausible inference of discrimination, we affirm the district court's grant of a motion to dismiss their complaint under Civil Rule 12(b)(6).

I.

Samir Danou is a naturalized United States citizen from Iraq. He and his family, as well as a trust in his name, own several real estate ventures. Of relevance here, they own 16630 Southfield, Triple Creek Associates and Danou Technical Park, all of which operate in Wayne County, Michigan.

In May 2006, Southfield borrowed $13 million from Flagstar Bank. Danou, Triple Creek and Danou Technical Park guaranteed the loan, and Southfield and Triple Creek put up collateral for the loan. This turned out not to be a propitious time to invest in real estate in Michigan or for that matter most areas of the country. Southfield did not repay the loan in full when it came due in May 2009. In November 2009, Flagstar and Southfield restructured the loan. Southfield paid off some of the debt immediately and agreed to repay the balance—approximately $6.5 million—three years later, in November 2012.

In 2011, John Chambless, a Flagstar employee charged with work on the bank's “troubled assets” and loans, investigated Southfield's finances. He did so even though, say the plaintiffs, Southfield was current on all of its (restructured) obligations. Around this time, the plaintiffs add, Chambless told Danou that Flagstar “would under no circumstances ever consider an application” to refinance the loan again. R. 7 ¶ 33. The next year, when Danou requested an extension of the November 12 deadline to repay the loan, the bank refused to provide an application, even though Danou offered additional collateral and his wife's guarantee. Danou asked for an explanation for the decision, but Flagstar refused to give one.

Southfield, Danou, Triple Creek and Danou Technical Park sued Flagstar, claiming that Flagstar had discriminated against them on account of Danou's Iraqi origin. The district court dismissed the complaint as a matter of law, and this appeal followed.

II.

Civil Rule 8(a)(2) says that a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” A pair of Supreme Court decisions—Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)—confirms that this rule imposes legal and factual demands on the authors of complaints.

William Twombly claimed that four telephone companies violated federal antitrust laws by agreeing not to compete against

[727 F.3d 504]

each other. In dismissing his complaint, the Court explained that merely alleging that the companies had colluded did not suffice. Twombly had to allege facts that plausibly backed up his conclusion of conspiracy. The most he could muster on this score were perceived similarities between and among the companies' business practices. Not enough, the Court replied. There was an “obvious alternative explanation” for this parallel conduct: The companies were independently pursuing a “rational and competitive business strategy ... prompted by common perceptions of the market.” 550 U.S. at 554, 567, 127 S.Ct. 1955. In view of this explanation, the similarity of the companies' practices did not plausibly suggest an unlawful conspiracy, requiring the Court to dismiss Twombly's complaint.

Javaid Iqbal in turn claimed that, after the terrorist attacks of September 11, 2001, federal officials instituted a policy of detaining Arab Muslim men on account of their religion, race and national origin. His case became a rerun of Twombly. Like Twombly, Iqbal could not proceed to discovery simply by making bare allegations that the defendants violated the law. Like Twombly, he had to identify facts that plausibly supported his legal conclusion. He tried to discharge this burden by pointing to the number of Arab Muslim men—“thousands”—confined after September 11. 556 U.S. at 695, 129 S.Ct. 1937. But like the Court in Twombly, the Court in Iqbal perceived an obvious alternative explanation for the pattern: “The September 11 attacks were perpetrated by 19 Arab Muslim hijackers ... [so it] should come as no surprise that a legitimate policy directing law enforcement to arrest and detain individuals because of their suspected...