923 F.3d 1260 (11th Cir. 2019), 14-14544, City of Miami v. Wells Fargo & Co.
|Docket Nº:||14-14544, 14-14543|
|Citation:||923 F.3d 1260, 27 Fla.L.Weekly Fed. C 1925|
|Opinion Judge:||MARCUS, Circuit Judge:|
|Party Name:||CITY OF MIAMI, a Florida municipal corporation, Plaintiff-Appellant, v. WELLS FARGO & CO., Wells Fargo Bank, N.A., Defendants-Appellees. City of Miami, a Florida Municipal Corporation, Plaintiff-Appellant, v. Bank of America Corporation, Bank of America, N.A., Countrywide Financial Corporation, Countrywide Home Loans, Countrywide Bank, FSB, ...|
|Attorney:||Steve W. Berman, Hagens Berman Sobol Shapiro, LLP, SEATTLE, WA, Robert S. Peck, Center for Constitutional Litigation, PC, NEW YORK, NY, Elaine T. Byszewski, Lee M. Gordon, Hagens Berman Sobol Shapiro, LLP, PASADENA, CA, Erwin Chemerinsky, University of California, Irvine, IRVINE, CA, Lance Harke,...|
|Judge Panel:||Before MARCUS and WILSON, Circuit Judges, and SCHLESINGER, District Judge.|
|Case Date:||May 03, 2019|
|Court:||United States Courts of Appeals, Court of Appeals for the Eleventh Circuit|
[Copyrighted Material Omitted]
Steve W. Berman, Hagens Berman Sobol Shapiro, LLP, SEATTLE, WA, Robert S. Peck, Center for Constitutional Litigation, PC, NEW YORK, NY, Elaine T. Byszewski, Lee M. Gordon, Hagens Berman Sobol Shapiro, LLP, PASADENA, CA, Erwin Chemerinsky, University of California, Irvine, IRVINE, CA, Lance Harke, Harke Clasby & Bushman, LLP, MIAMI SHORES, FL, Howard Liberson, Joel Liberson, Trial & Appellate Resources, PC, EL SEGUNDO, CA, Victoria Mendez, Office of the Miami City Attorney, MIAMI, FL, for Plaintiff-Appellant.
Paul Francis Hancock, Olivia Waters Kelman, K & L Gates, LLP, MIAMI, FL, Neal Katyal, Eugene Alexis Sokoloff, Hogan Lovells US, LLP, WASHINGTON, DC, Carol Ann Licko, John F. OSullivan, Hogan Lovells US, LLP, MIAMI, FL, Andrew C. Glass, K & L Gates, LLP, BOSTON, MA, Clayton P. Solomon, Parker Davidson Thomson, Stroock Stroock & Lavan, LLP, MIAMI, FL, for Defendants-Appellees Wells Fargo & Co. and Wells Fargo Bank, N.A.
Rachel E. Goodman, ACLU Foundation, NEW YORK, NY, for Amici Curiae American Civil Liberties Union Foundation, AARP, AARP Foundation, American Civil Liberties Union Foundation of Florida, Inc., Lawyers Committee for Civil Rights Under Law, NAACP Legal Defense & Educational Fund, Inc., National Fair Housing Alliance, Inc., Eight Local Fair Housing Centers Located Within the Eleventh Circuit, and The Poverty & Race Research Action Council.
James M. Evangelista, Kristi Stahnke McGregor, David J. Worley, Evangelista Worley, LLC, ATLANTA, GA, for Amici Curiae Cobb County, Georgia, Dekalb County, Georgia, and Fulton County, Georgia.
Thomas Hefferon, William M. Jay, Matthew S. Sheldon, Goodwin Procter, LLP, WASHINGTON, DC, Christopher Stephen Carver, Akerman, LLP, MIAMI, FL, Brendan Herbert, Locke Lord, LLP, WEST PALM BEACH, FL, Joel Liberson, Trial & Appellate Resources, PC, EL SEGUNDO, CA, James McGarry, Goodwin Procter, LLP, BOSTON, MA, for Defendant-Appellee Bank of America Corporation.
Thomas Hefferon, William M. Jay, Matthew S. Sheldon, Goodwin Procter, LLP, WASHINGTON, DC, Christopher Stephen Carver, Akerman, LLP, MIAMI, FL, Brendan Herbert, Locke Lord, LLP, WEST PALM BEACH, FL, James McGarry, Goodwin Procter, LLP, BOSTON, MA, for Defendant-Appellee Bank of America, N.A.
Thomas Hefferon, William M. Jay, Matthew S. Sheldon, Goodwin Procter, LLP, WASHINGTON, DC, Christopher Stephen Carver, Akerman, LLP, MIAMI, FL, Brendan Herbert, Locke Lord, LLP, WEST PALM BEACH, FL, for Defendants-Appellees Countrywide Financial Corporation, Countrywide Home Loans, and Countrywide Bank, FSB.
Christopher Brancart, Elizabeth Brancart, Brancart & Brancart, PESCADERO, CA, Morgan Whitney Williams, National Fair Housing Alliance, WASHINGTON, DC, for Amici Curiae Center for Fair Housing, Inc., Central Alabama Fair Housing Center, Fair Housing Center of the Greater Palm Beaches, Fair Housing Center of Northern Alabama, Fair Housing Continuum, Inc., Housing Opportunities Project for Excellence, Inc., Metro Fair Housing Services, Inc., National Fair Housing Alliance, and Savannah-Chatham County Fair Housing Council, Inc.
Matthew W. Dietz, Disability Independence Group, MIAMI, FL, Thomas J. Henderson, Sanford Heisler Sharp, LLP, WASHINGTON, DC, for Amicus Curiae International Municipal Lawyers Association.
Matthew W. Dietz, Disability Independence Group, MIAMI, FL, for Amicus Curiae Housing Scholars.
Appeals from the United States District Court for the Southern District of Florida, D.C. Docket No. 1:13-cv-24508-WPD, D.C. Docket No. 1:13-cv-24506-WPD.
Before MARCUS and WILSON, Circuit Judges, and SCHLESINGER,[*] District Judge.
MARCUS, Circuit Judge:
This pair of ambitious fair housing lawsuits brought by the City of Miami against major financial institutions returns to our Court after having been appealed to the Supreme Court and resolved there in Bank of America Corp. v. City of Miami, __ U.S. __, 137 S.Ct. 1296, 197 L.Ed.2d 678 (2017). Miami alleges that, for years, the defendant institutions, major nationwide banks, carried on discriminatory lending practices that intentionally targeted black and Latino Miami residents for predatory loans. The City says this resulted in disproportionate foreclosures on homeowners of those races, diminished property values in predominantly minority neighborhoods, substantially reduced tax revenue for the City, and increased expenditures by the City for municipal services. When we first heard these cases, we determined that Miami had standing under the Fair Housing Act, and that it had adequately pled proximate cause.
See City of Miami v. Bank of Am. Corp., 800 F.3d 1262 (11th Cir. 2015); City of Miami v. Wells Fargo & Co., 801 F.3d 1258 (11th Cir. 2015). The Supreme Court agreed in part. It resolved the hotly contested standing issue in the Citys favor, but vacated and remanded with regard to proximate cause. See Bank of Am., 137 S.Ct. at 1305-06.
The Court held that the standard that this panel had applied— foreseeability— was not enough on its own to demonstrate proximate cause. Id. at 1306. Instead, the Court said that proximate cause under the FHA also required "some direct relation between the injury asserted and the injurious conduct alleged." Id. at 1306 (quotations omitted). But the Court declined to "draw the precise boundaries of proximate cause under the FHA and to determine on which side of the line the Citys financial injuries fall." Id. It remanded the case, preferring to leave this issue open for percolation in the lower courts. See id. Today, we take up the question of how the principles of proximate cause identified by the Courts opinion function when applied to the FHA and to the facts as alleged in the Citys complaints.
At this preliminary stage in the lawsuit, we conclude that the City has adequately pled proximate cause in relation to some of its economic injuries when the pleadings are measured against the standard required by the Fair Housing Act. Proximate cause asks whether there is a direct, logical, and identifiable connection between the injury sustained and its alleged cause. If there is no discontinuity to call into question whether the alleged misconduct led to the injury, proximate cause will have been adequately pled. The question for now is whether, accepting the allegations as true, as we must, the City has said enough to make out a plausible case— not whether it will probably prevail. Considering the broad and ambitious scope of the FHA, the statutes expansive text, the exceedingly detailed allegata found in the complaints, and the application of the administrative feasibility factors laid out by the Supreme Court in Holmes v. Securities Investor Protection Corp., 503 U.S. 258, 112 S.Ct. 1311, 117 L.Ed.2d 532 (1992), we are satisfied that the pleadings set out a plausible claim.
The Citys pleadings meet this standard because Miami has alleged a substantial injury to its tax base that is not just reasonably foreseeable, but also is necessarily and directly connected to the Banks conduct in redlining and reverse-redlining throughout much of the City. This injury plausibly bears "some direct relation" to the claimed misconduct. Bank of Am., 137 S.Ct. at 1306. The injury to the Citys tax base is uniquely felt in the City treasury, and there is no risk that duplicative injuries could be pled by another plaintiff or that the apportionment of damages amongst different groups of plaintiffs would be a problem. As we see it, the City is in the best position. Indeed only the City can allege and litigate this peculiar kind of aggregative injury to its tax base. Simply put, a lawsuit commenced by an individual homeowner cannot challenge the Banks policies on the same citywide scale that the alleged misconduct took place on.
However, the Citys pleadings fall short of sufficiently alleging "some direct relation" between the Banks conduct and a claimed increase in expenditures on municipal services. The complaints fail to explain how these kinds of injuries— increases in police, fire, sanitation, and similar municipal expenses— are anything more than merely foreseeable consequences of redlining and reverse-redlining. The Court has told us that foreseeability alone is not enough.
We do not mean to suggest that the Citys claims are destined to succeed. Many questions, and many difficult questions, remain and will have to be worked
out in the district court. At the motion to dismiss stage, though, we are not asking whether the complaints meet any probability requirement, only whether they plausibly allege violations of the FHA. Since we have found that they do, we allow this discrete portion of the Citys claims to proceed for now. The plaintiff has said enough to get into the courthouse and be heard. We decide nothing more today.
A. The Citys Claims
On December 13, 2013, the City of Miami brought three complex civil rights actions in the Southern District of Florida against several different financial institutions. One suit was filed against Bank of America Corporation, Bank of America N.A., Countrywide Financial Corporation, Countrywide Home Loans, and Countrywide Bank, FSB...
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