Bank of Am. Corp. v. City of Miami

• Decision Date: 01 May 2017
• Docket Number: 15–1112.,Nos. 15–1111,s. 15–1111
• Parties: BANK OF AMERICA CORP. et al., Petitioners v. CITY OF MIAMI, FLORIDA. Wells Fargo & Co., et al., Petitioners v. City of Miami, Florida.
• Court: U.S. Supreme Court

137 S.Ct. 1296

197 L.Ed.2d 678

BANK OF AMERICA CORP. et al., Petitioners

v.CITY OF MIAMI, FLORIDA.

Wells Fargo & Co., et al., Petitioners

v.City of Miami, Florida.

Nos. 15–1111

15–1112.

Supreme Court of the United States

Argued Nov. 8, 2016.

Decided May 1, 2017.

Neal K. Katyal, Washington, DC, for Petitioners.

Robert S. Peck, for Respondents.

Curtis E. Gannon, for the United States as amicus curiae, by special leave of the Court, supporting the respondents.

David J. Zimmer, Goodwin Procter LLP, San Francisco, CA, William M. Jay, Thomas M. Hefferon, Matthew S. Sheldon, Andrew Kim, David S. Norris, Goodwin Procter LLP, Washington, DC, for Petitioners.

Victoria Méndez, Henry J. Hunnefeld, City of Miami, Office of the City Attorney, Miami, FL, Robert S. Peck, Center for Constitutional Litigation, P.C., Fairfax Station, VA, Erwin Chemerinsky, University of California, Irvine, CA, Rachel Geman, Daniel E. Seltz, Lieff Cabraser Heimann & Bernstein, L.L.P., New York, NY, Joel Liberson, Howard Liberson, Trial & Appellate Resources, P.C., El Segundo, CA, Sherrie R. Savett, Sarah R. Schalman–Bergen, Patrick F. Madden, Berger & Montague, P.C., Philadelphia, PA, for Respondent.

Paul F. Hancock, Olivia Kelman, K&L Gates LLP, Miami, FL, Andrew C. Glass, K&L Gates LLP, Boston, MA, Neal Kumar Katyal, Frederick Liu, Colleen E. Roh Sinzdak, Morgan L. Goodspeed, Daniel J.T. Schuker, Hogan Lovells US LLP, Washington, DC, Carol A. Licko, John F. O'Sullivan, Hogan Lovells US LLP, Miami, FL, for Petitioners.

Justice BREYER delivered the opinion of the Court.

The Fair Housing Act (FHA or Act) forbids

"discriminat[ing] against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race...." 42 U.S.C. § 3604(b).

It further makes it unlawful for

"any person or other entity whose business includes engaging in residential real estate-related transactions to discriminate against any person in making available such a transaction, or in the terms or conditions of such a transaction, because of race...." § 3605(a).

The statute allows any "aggrieved person" to file a civil action seeking damages for a violation of the statute. §§ 3613(a)(1)(A), 3613(c)(1). And it defines an "aggrieved person" to include "any person who ... claims to have been injured by a discriminatory housing practice." § 3602(i).

The City of Miami claims that two banks, Bank of America and Wells Fargo, intentionally issued riskier mortgages on less favorable terms to African–American and Latino customers than they issued to similarly situated white, non-Latino customers, in violation of §§ 3604(b) and 3605(a). App. 185–197, 244–245, 350–362, 428. The City, in amended complaints, alleges that these discriminatory practices have (1) "adversely impacted the racial composition of the City," id., at 232, 416; (2) "impaired the City's goals to assure racial integration and desegregation," ibid. ; (3) "frustrate[d] the City's longstanding and active interest in promoting fair housing and securing the benefits of an integrated community," id., at 232–233, 416–417; and (4) disproportionately "cause[d] foreclosures and vacancies in minority communities in Miami," id., at 229, 413. Those foreclosures and vacancies have harmed the City by decreasing "the property value of the foreclosed home as well as the values of other homes in the neighborhood," thereby (a) "reduc[ing] property tax revenues to the City," id., at 234, 418, and (b) forcing the City to spend more on "municipal services that it provided and still must provide to remedy blight and unsafe and dangerous conditions which exist at properties that were foreclosed as a result of [the Banks'] illegal lending practices," id., at 233–234, 417. The City claims that those practices violate the FHA and that it is entitled to damages for the listed injuries.

The Banks respond that the complaints do not set forth a cause of action for two basic reasons. First, they contend that the City's claimed harms do not "arguably" fall within the "zone of interests" that the statute seeks to protect, Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 153, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970) ; hence, the City is not an "aggrieved person" entitled to sue under the Act, § 3602(i). Second, they say that the complaint fails to draw a "proximate-cause" connection between the violation claimed and the harm allegedly suffered. In their view, even if the City proves the violations it charges, the distance between those violations and the harms the City claims to have suffered is simply too great to entitle the City to collect damages.

We hold that the City's claimed injuries fall within the zone of interests that the FHA arguably protects. Hence, the City is an "aggrieved person" able to bring suit under the statute. We also hold that, to establish proximate cause under the FHA, a plaintiff must do more than show that its injuries foreseeably flowed from the alleged statutory violation. The lower court decided these cases on the theory that foreseeability is all that the statute requires, so we vacate and remand for further proceedings.

I

In 2013, the City of Miami brought lawsuits in federal court against two banks, Bank of America and Wells Fargo. The City's complaints charge that the Banks discriminatorily imposed more onerous, and indeed "predatory," conditions on loans made to minority borrowers than to similarly situated nonminority borrowers. App. 185–197, 350–362. Those "predatory" practices included, among others, excessively high interest rates, unjustified fees, teaser low-rate loans that overstated refinancing opportunities, large prepayment penalties, and—when default loomed—unjustified refusals to refinance or modify the loans. Id., at 225, 402. Due to the discriminatory nature of the Banks' practices, default and foreclosure rates among minority borrowers were higher than among otherwise similar white borrowers and were concentrated in minority neighborhoods. Id., at 225–232, 408–415. Higher foreclosure rates lowered property values and diminished property-tax revenue. Id., at 234, 418. Higher foreclosure rates—especially when accompanied by vacancies—also increased demand for municipal services, such as police, fire, and building and code enforcement services, all needed "to remedy blight and unsafe and dangerous conditions" that the foreclosures and vacancies generate. Id., at 238–240, 421–423. The complaints describe statistical analyses that trace the City's financial losses to the Banks' discriminatory practices. Id., at 235–237; 419–420.

The District Court dismissed the complaints on the grounds that (1) the harms alleged, being economic and not discriminatory, fell outside the zone of interests the FHA protects; (2) the complaints fail to show a sufficient causal connection between the City's injuries and the Banks' discriminatory conduct; and (3) the complaints fail to allege unlawful activity occurring within the Act's 2–year statute of limitations. The City then filed amended complaints (the complaints now before us) and sought reconsideration. The District Court held that the amended complaints could solve only the statute of limitations problem. It consequently declined to reconsider the dismissals.

The Court of Appeals reversed the District Court. 800 F.3d 1262 (C.A.11 2015) ; 801 F.3d 1258 (C.A.11 2015). It held that the City's injuries fall within the "zone of interests," Lexmark Int'l, Inc. v. Static Control Components, Inc., 572 U.S. ––––, ––––, 134 S.Ct. 1377, 1388, 188 L.Ed.2d 392 (2014), that the FHA protects. 800 F.3d, at 1274–1275, 1277 (relying on Trafficante v. Metropolitan Life Ins. Co., 409 U.S. 205, 93 S.Ct. 364, 34 L.Ed.2d 415 (1972) ; Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 99 S.Ct. 1601, 60 L.Ed.2d 66 (1979) ; and Havens Realty Corp. v. Coleman, 455 U.S. 363, 102 S.Ct. 1114, 71 L.Ed.2d 214 (1982) ); 801 F.3d, at 1266–1267 (similar). It added that the complaints adequately allege proximate cause. 800 F.3d, at 1278, 801 F.3d, at 1267. And it remanded the cases while ordering the District Court to accept the City's complaints as amended. 800 F.3d, at 1286, 801 F.3d, at 1267.

The Banks filed petitions for certiorari, asking us to decide whether, as the Court of Appeals had in effect held, the amended complaints satisfied the FHA's zone-of-interests and proximate-cause requirements. We agreed to do so.

II

To satisfy the Constitution's restriction of this Court's jurisdiction to "Cases" and "Controversies," Art. III, § 2, a plaintiff must demonstrate constitutional standing. To do so, the plaintiff must show an "injury in fact" that is "fairly traceable" to the defendant's conduct and "that is likely to be redressed by a favorable judicial decision." Spokeo, Inc. v. Robins, 578 U.S. ––––, ––––, 136 S.Ct. 1540, 1547, 194 L.Ed.2d 635 (2016) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ). This Court has also referred to a plaintiff's need to satisfy "prudential" or "statutory" standing requirements. See Lexmark, 572 U.S., at –––– – ––––, and n. 4, 134 S.Ct., at 1387, and n. 4. In Lexmark, we said that the label " ‘prudential standing’ " was misleading, for the requirement at issue is in reality tied to a particular statute. Ibid. The question is whether the statute grants the plaintiff the cause of action that he asserts. In answering that question, we presume that a statute ordinarily provides a cause of action "only to plaintiffs whose interests fall within the zone of interests protected by the law invoked." Id., at ––––, 134 S.Ct., at 1388 (internal quotation marks omitted). We have added that "[w]hether a plaintiff comes within ‘the zone of interests' is an issue that requires us to determine, using traditional tools of statutory interpretation, whether a legislatively conferred cause of action encompasses a particular plainti...