CITY OF MIAMI, a Florida municipal corporation, Plaintiff - Appellant,
WELLS FARGO & CO., WELLS FARGO BANK, N.A., Defendants - Appellees. CITY OF MIAMI, a Florida Municipal Corporation, Plaintiff - Appellant,
BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., COUNTRYWIDE FINANCIAL CORPORATION, COUNTRYWIDE HOME LOANS, COUNTRYWIDE BANK, FSB, Defendants - Appellees.
Appeals from the United States District Court for the
Southern District of Florida D.C. Docket Nos.
MARCUS and WILSON, Circuit Judges, and SCHLESINGER,
MARCUS, CIRCUIT JUDGE:
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 American Corp. v. City of
Miami, 137 S.Ct. 1296 (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 City's
favor, but vacated and remanded with regard to proximate
cause. See Bank of Am., 137 S.Ct. at 1305-06.
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 City's
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 Court's opinion function when applied to the FHA
and to the facts as alleged in the City's complaints.
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 statute's
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 (1992), we are satisfied that the pleadings set out
a plausible claim.
City's 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 City's 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.
the City's 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
not mean to suggest that the City's 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 City's claims to proceed for now. The plaintiff has
said enough to get into the courthouse and be heard. We
decide nothing more today.
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 (collectively
"Bank of America"), and another against Wells Fargo
& Co. and Wells Fargo Bank, N.A. (collectively
"Wells Fargo"). For simplicity, we refer to all
these defendants jointly as "the Banks." These were
accompanied by another similar case against Citigroup, Inc.
and related institutions. See City of Miami v. Citigroup,
Inc., 801 F.3d 1268 (11th Cir. 2015). The first time
this panel considered this set of cases, we heard the
Citigroup case as well, but that case was not appealed to the
Supreme Court. It has returned to the district court, where
it has been stayed pending resolution of the other two.
See Order Staying Case Pending the Supreme
Court's Disposition of Matters Now Before the Court,
City of Miami v. Citigroup Inc., No. 13-cv-24510
(S.D. Fla. July 13, 2016). As a result, our opinion today
concerns only Bank of America and Wells Fargo.
City alleged in considerable detail that the Banks had
violated § 3604(b) and § 3605(a) of the Fair
Housing Act. The first of these provisions makes it unlawful
"[t]o discriminate 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, color, religion, sex, familial
status, or national origin." 42 U.S.C. § 3604(b).
The second states that "[i]t shall be 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, color, religion, sex, handicap, familial status, or
national origin." Id. § 3605(a). The City
alleged that the Banks had violated these provisions by
intentionally engaging in discriminatory mortgage lending
practices that resulted in a disproportionate and excessive
number of defaults by black and Latino homebuyers and caused
substantial financial harm to the City.
City said the Banks made a practice of systematically and
intentionally refusing to extend credit to minority borrowers
on the same terms as they would extend credit to non-minority
borrowers and, when they did extend credit to comparably
situated minority borrowers, doing so only on predatory
terms, worse than the terms non-minorities received. First
Amended Complaint for Violations of the Federal Fair Housing
Act at 2-5, City of Miami v. Bank of Am., No.
13-cv-24506 (S.D. Fla. Sept. 9, 2014) ("BoA FAC");
First Amended Complaint for Violations of the Federal Fair
Housing Act at 2-5, City of Miami v. Wells Fargo &
Co., No. 13-cv-24508 (S.D. Fla. Sept. 9, 2014) ("WF
FAC"). This amounted to both
"redlining" (refusing to extend credit) and
"reverse redlining" (extending credit on worse
terms). Black and Latino borrowers were thus unable to
refinance their loans effectively. BoA FAC at 4; WF FAC at 4;
see also Wells Fargo, 801 F.3d at 1261; Bank of
Am., 800 F.3d at 1267. The City's complaints
detailed at considerable length the nature of these practices
and characterized them as "abusive" because they
resulted in loans with "unfair terms that [borrowers]
could not afford." BoA FAC at 13; WF FAC at 11; see,
e.g., BoA FAC at 22 (explaining what kinds of loans the
City would categorize as "predatory"); WF FAC at 34
City claims that these policies were entirely deliberate on
the part of the Banks. The Amended Complaints explain that
confidential witnesses -- former employees at both Bank of
America and Wells Fargo -- will testify to how minorities and
residents of minority neighborhoods were targeted for
predatory loan terms. E.g., BoA FAC at 19; WF FAC at
29. Moreover, witnesses allegedly will testify that Wells
Fargo specifically targeted Latino and African American
community groups and churches (but never white churches) and
that employees were assigned based on their race to make
presentations to these groups. WF FAC at 30. Witnesses from
Bank of America likewise will testify that they were
encouraged to steer less financially savvy borrowers, often
racial minorities, toward loan products that were decidedly
unfavorable to the customer and different from loan products
offered to white applicants, but highly favorable to the
bank. BoA FAC at 19-20.
to the City, all of this violated the FHA in two stages. To
start, the Banks intentionally discriminated against minority
borrowers by targeting them for burdensome loans. This had a
disparate impact on minority borrowers, leading, down the
line, to a disproportionate number of exploitative loans in
minority neighborhoods and, eventually, to a disproportionate
number of foreclosures on minority-owned properties. BoA FAC
at 15-19; WF FAC at 21-29.
City employed detailed regression analyses of the Banks'
self-reported data to show that a Bank of America loan in a
predominantly African-American or Latino Miami neighborhood
was 5.857 times more likely to result in foreclosure than a
Bank of America loan in a non-minority Miami neighborhood.
BoA FAC at 26. For a minority-neighborhood loan from Wells
Fargo, foreclosure was 6.975 times more likely. WF FAC at 39.
Further calculations indicated that, controlling for credit
history and other factors, a black Miami borrower was 1.581
times more likely than a white borrower to receive a
predatory loan from Bank of America and 4.321 times more
likely to receive one from Wells Fargo. BoA FAC at 22; WF FAC
at 34. A Latino borrower was 2.087 times more likely to
receive such a loan from Bank of America and 1.576 times more
likely to receive one from Wells Fargo. BoA FAC at 22; WF FAC
at 34. Notably, even among borrowers with good credit (FICO
scores over 660), black borrowers were 1.533 and 2.572 times
more likely to receive a predatory loan from Bank of America
and Wells Fargo, respectively. BoA FAC at 22; WF FAC at 34.
For Latino borrowers with good credit, the figures were 2.137
and 1.875 times more likely. BoA FAC at 22; WF FAC at 34. The
City identified similar disproportionalities on a larger
scale by comparing predominantly white neighborhoods with
predominantly minority ones. See BoA FAC at 23-25;
WF FAC at 35-37.
complaints further alleged that the Banks' lending
practices resulted in minority borrowers suffering especially
fast and frequent foreclosures, an important indicator of
predatory lending practices. See BoA FAC at 29-30;
WF FAC at 41. White borrowers' average time from
origination to foreclosure was 3.448 years for a Bank of
America loan or 3.266 years for a Wells Fargo loan; for black
and Latino borrowers the averages were 3.144 (black) and
3.090 (Latino) years from Bank of America and 2.996 (both
black and Latino) from Wells Fargo. BoA FAC at 28; WF FAC at
41. Confidential witnesses from both Banks will allegedly
support the claims that each had deliberately targeted black
and Latino borrowers for predatory loans. E.g., BoA
FAC at 19-21; WF FAC at 30-31.
more, according to the complaints, the Banks' misconduct
was not limited to loan origination but instead continued
almost to the point of foreclosure. As the Supreme Court
noted, Bank of Am., 137 S.Ct. at 1301, the predatory
practices alleged by the City included denying black and
Latino customers opportunities to refinance or make loan
modifications on fair terms. E.g. BoA FAC at 21; WF
FAC at 32. According to the complaints, both Banks would
cause foreclosures when "a minority borrower who
previously received a predatory loan sought to refinance the
loan, only to discover that [the bank] refused to extend
credit at all," or refused to do so on the same terms
they extended when "refinancing similar loans issued to
white borrowers." BoA FAC at 4; WF FAC at 4. We note
that such refinancing and loan modification decisions can
occur before or after a property enters default.
City alleged that it suffered both economic and noneconomic
injuries. BoA FAC at 31-35; WF FAC at 44-48. In both
complaints the alleged noneconomic injury was that the
Banks' conduct "adversely impacted the racial
composition of the City and impaired the City's goals to
assure racial integration and desegregation and the social
and professional benefits of living in an integrated
society." BoA FAC at 31; WF FAC at 44. The City
identified two forms of economic injuries. It claimed damages
from each bank based on reduced property tax revenues,
arguing that the Banks' lending policies caused
minority-owned properties to fall into unnecessary or
premature foreclosure, causing them to lose substantial value
and, in turn, decreasing the values of surrounding
properties. BoA FAC at 32-34; WF FAC at 45-47. This reduced
the City's tax base and the tax revenue it took in.
According to the City, "Hedonic regression"
techniques could be used to quantify with considerable
particularity what portion of its losses was attributable to
the Banks' conduct. BoA FAC at 32-34; WF FAC at 45-47.
Additionally, the City claimed damages based on the cost of
the increased municipal services it provided to deal with
problems attributable to the foreclosed and often vacant
properties -- including police, firefighters, building
inspectors, debris collectors, and others. These increased
services too, the City claimed, would not have been necessary
if the properties had not been foreclosed upon as a result of
the Banks' discriminatory lending practices. BoA FAC at
34-35; WF FAC at 47-48.
City also asked for a declaratory judgment stating that the
Banks' conduct violated the FHA, an injunction barring
the Banks from engaging in similar predatory conduct,
compensatory and punitive damages, and attorneys' fees.
BoA FAC at 40-41; WF FAC at 53-54.
District Court and 11th Circuit Decisions
9, 2014, the district court granted motions to dismiss by
both banks. City of Miami v. Bank of Am., No.
13-24506-CIV, 2014 WL 3362348 (S.D. Fla. July 9, 2014). The
court determined first that the City lacked standing because,
according to this Court's opinion in Nasser v. City
of Homewood, 671 F.2d 432 (11th Cir. 1982), its claims
fell outside the "zone of interests" protected by
the FHA. Bank of Am., 2014 WL 3362348 at *3-4. Miami
had alleged "merely economic injuries" that were
not "affected by a racial interest." Id.
at *4. The trial court also determined that the FHA contained
a proximate cause requirement, and that this requirement had
not been met because the City failed to "demonstrate
that the [Banks'] alleged redlining and reverse redlining
caused the foreclosures to occur." Id. at *5.
According to the district court, the City should have
"allege[d] facts that isolate [the Banks'] practices
as the cause of any alleged lending disparity."
Id. Additionally, the district court said that the
FHA claims fell outside the statute of limitations.
Id. at *6-7.
City moved for reconsideration and for leave to file amended
complaints in both cases, arguing that it had standing and
that it could remedy the statute of limitations issue by
amending the complaint. See Bank of Am., 800 F.3d at
1271; Wells Fargo, 801 F.3d at 1264. The amended
complaints added further details concerning noneconomic
injuries suffered by the City as a result of the Banks'
discriminatory lending practices. See BoA FAC at 31;
WF FAC at 44. The City also argued in its amended complaints
that predatory lending had "adversely impacted the
racial composition of the City," "impaired the
City's goals to assure racial integration and
desegregation," and "frustrate[d] the City's
longstanding and active interest in securing the benefits of
an integrated community." BoA FAC at 31; WF FAC at 44.
The district court denied the motion, and the City appealed
to this Court. Bank of Am., 800 F.3d at 1271;
Wells Fargo, 801 F.3d at 1265.
reversed and remanded in a series of opinions, the most
detailed of which we issued in City of Miami v. Bank of
America Corp., 800 F.3d 1262 (11th Cir. 2015). We began
by addressing standing and held that the City had alleged an
injury in fact sufficiently concrete and immediate to confer
Article III standing. Id. at 1272. Next we addressed
"statutory standing" -- a misnomer, since it really
concerns "whether the plaintiff has a cause of action
under the statute." Id. at 1273 (quotation
omitted). We determined that this plaintiff did because the
key statutory language "swe[pt] as broadly as allowed
under Article III" and placed the City within the
statute's zone of interests. Id. at 1278;
see also Trafficante v. Metro Life Ins. Co., 409
U.S. 205, 209 (1972) (identifying "a congressional
intention to define [FHA] standing as broadly as is permitted
by Article III").
held that the FHA did require proximate cause, but that the
City's pleadings were adequate. Bank of Am., 800
F.3d at 1279-80, 1283. We rejected the idea that the City
needed to "allege that the [Banks'] actions directly
harmed the City." Id. As we saw it, the
"strict directness requirement" suggested by the
Banks could not be the proper standard for the FHA because it
"would run afoul of Supreme Court and Eleventh Circuit
caselaw allowing entities who have suffered indirect injuries
. . . to bring a claim under the FHA." Bank of
Am., 800 F.3d at 1281 (citing Gladstone, Realtors v.
Village of Bellwood, 441 U.S. 91, 109-11 (1979)
(allowing a village to sue a firm for discriminatory
practices that caused segregation); Havens Realty Corp.
v. Coleman, 455 U.S. 363, 378-79 (1982) (allowing suit
by a non-profit for "impairment of its organizational
mission" and "drain on its resources");
Baytree of Inverrary Realty Partners v. City of
Lauderhill, 873 F.2d 1407, 1408-09 (11th Cir. 1989)
(allowing a non-minority developer to challenge a zoning
decision as discriminatory)). Proximate cause, we said, was
"not a one-size fits-all analysis." Id.
Rather, it "can differ statute by statute."
noting the Supreme Court's "broad and
inclusive" readings of the FHA, e.g.,
Trafficante, 409 U.S. at 209, we agreed with the
City that the proper standard for proximate cause was
"foreseeability." Id. at 1281-82. Damages
claims under the FHA were analogous to tort claims, we
reasoned, and tort law had traditionally relied on
foreseeability as the standard by which to evaluate causal
relationships and to limit the expansion of liability.
See id. at 1282. The City had met this standard;
"it claim[ed] that the [Banks'] discriminatory
lending caused property owned by minorities to enter
premature foreclosure, costing the City tax revenue and
municipal expenditures." Id. at 1282. We said
that "[a]lthough there are several links in that causal
chain, none are unforeseeable," and also noted that the
regression analyses in the complaints made the pleadings more
than just speculative. Id. We made no comment,
though, on "whether the City will be able to
actually prove its causal claims." Id.
at 1283 (emphasis added). That would be worked out in the
district court on a factual basis far beyond the four corners
of the complaint. Accordingly, we remanded the case.
Id. at 1289.
America and Wells Fargo each filed petitions for certiorari,
which the Supreme Court granted. It consolidated the two
Supreme Court Decision
Supreme Court began by resolving the "statutory
standing" question of whether the City had a cause of
action under the FHA. Bank of Am., 137 S.Ct. at
1302-05. The Court agreed that its previous cases had
interpreted the statute broadly for standing purposes.
See id. Congress had even amended the statute after
these decisions, without making any change to the relevant
language, indicating its assent to the Court's expansive
reading of the original text. Id. at 1303-04.
proximate cause, though, the Supreme Court disagreed with
this panel but reached no firm conclusions. It determined
that foreseeability, standing alone, was not a sufficiently
rigorous standard. See id. at 1306 ("[T]he
Eleventh Circuit erred in holding that foreseeability is
sufficient to establish proximate cause under the
FHA."). The Court explained that "foreseeability
alone does not ensure the close connection that proximate
cause requires." Id. Since lending and housing
policies are deeply interconnected with "economic and
social life," the Court said that "[a] violation of
the FHA may . . . 'be expected to cause ripples of harm
to flow' far beyond the defendant's misconduct."
Id. (quoting Assoc. Gen. Contractors of Cal.,
Inc. v. Carpenters, 459 U.S. 519, 534 (1983)). Since
"[n]othing in the statute suggests that Congress
intended to provide a remedy wherever those ripples
travel," foreseeability alone could not be enough.
the Court was clear that foreseeability was not enough, it
was less definitive when it came to laying out what more FHA
proximate cause required. Its key instructions were these:
Rather [than foreseeability], proximate cause under the FHA
requires "some direct relation between the injury
asserted and the injurious conduct alleged." Holmes
v. Sec. Investor Protect. Corp., 503 U.S. 258, 268
(1992). A damages claim under the statute "is analogous
to a number of tort actions recognized at common law,"
Curtis v. Loether, 415 U.S. 189, 195 (1974), and we
have repeatedly applied directness principles to statutes
with "common-law foundations," Anza v. Ideal
Steel Supply Corp., 547 U.S. 451, 457 (2007). "The
general tendency" in these cases is, "in regard to
damages at least, is not to go beyond the first step."
Hemi Grp., LLC v. City of New York, 559 U.S. 1, 10
(2010). What falls within that "first step" depends
in part on the "nature of the statutory cause of
action," Lexmark Int'l, Inc. v. Static Control
Components, Inc., 134 S.Ct. 1377, 1390 (2014), and an
assessment "of what is administratively possible and
convenient," Holmes, 503 U.S. at 268.
Bank of Am., 137 S.Ct. at 1306 (citation formats
Court remanded for further proceedings, stating that
"[t]he lower courts should define, in the first
instance, the contours of proximate cause under the FHA and
decide how that standard applies to the City's claims for
lost property-tax revenue and increased municipal
expenses." Id. Lacking "the benefit of
[the Eleventh Circuit's] judgment" on how to apply
the principles it had laid out, and with no other circuits
having weighed in yet, the Court "decline[d]" to
speak first. Id.
opinion, we endeavor carefully to apply the Court's
mandate to these complaints, to determine if they plausibly
state a claim under the Fair Housing Act.
Standard of Review
review a district court's decision to dismiss a complaint
de novo "accepting the factual allegations in
the complaint as true and construing them in the light most
favorable to the plaintiff." Boyd v. Warden, Holman
Corr. Facility, 856 F.3d 853, 863-64 (11th Cir. 2017);
see also Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). Here, the district court also denied leave to amend,
which we generally review for abuse of discretion; however,
when, as here, leave to amend was denied "on the grounds
of futility," we review the denial de novo
"because it is a conclusion of law that an amended
complaint would necessarily fail." Id.
("An amendment is considered futile when the claim, as
amended, would still be subject to dismissal.").
Essentially, then, we must consider de novo whether
the City's amended complaints, which the district court
declined to entertain, have stated a claim. This is in line
with the review conducted by the Supreme Court, Bank of
Am., 137 S.Ct. at 1302, and with our review when we
first heard these cases, Bank of Am., 800 F.3d at
this case to proceed past a motion to dismiss, we need not
find that the Banks' actions in fact proximately caused
the plaintiff's injuries; we must find that the City
plausibly alleged that they did so. We evaluate
whether each complaint "contain[s] sufficient factual
matter . . . to 'state a claim to relief that is
plausible on its face.'" Iqbal, 556 U.S. at
678 (quoting Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 570 (2007)). The standard is
"plausibility"; it is decidedly not a
"probability requirement." Id. Still,
plausibility requires that allegations push past the line of
showing "a sheer possibility" and "[w]here a
complaint pleads facts that are 'merely consistent
with' a defendant's liability, it 'stops short of
the line between possibility and plausibility of entitlement
to relief.'" Id. (quoting Twombly,
550 U.S. at 557). Facts are taken as true so long as they are
not a "formulaic recitation of the elements" or
"conclusory." Id. at 681 (quoting
Twombly, 550 U.S. at 555).
and Keeton observed, of proximate cause, that "[t]here
is perhaps nothing in the entire field of law which has
called forth more disagreement, or upon which the opinions
are in such a welter of confusion." W. Page Keeton et
al., Prosser and Keeton on the Law of Torts § 41, at 263
(5th ed. 1984). The Supreme Court has not directed the lower
courts to propose a sweeping standard for proximate cause
that would apply across all cases or to define the word
"direct" for all time. Indeed, we are not looking
for (and could not find) "a black-letter rule that will
dictate the result in every case." Holmes, 503
U.S. at 272 n.20. Rather, we must evaluate where, as a matter
of judicial economy and policy, we ought to draw the line for
this particular cause of action and these particular claims.
As the Court has said, proximate cause "label[s]
generically the judicial tools used to limit a person's
responsibility for the consequences of that person's own
acts. . . . [P]roximate cause reflects ideas of what justice
demands, or of what is administratively possible and
convenient." Id. at 268 (quotation omitted).
begin our analysis, then, with the Supreme Court's
instructions. Proximate cause under the FHA certainly
requires foreseeability, which is present here but is not
enough. See Bank of Am. 137 S.Ct. at 1305-06.
Proximate cause also requires "some direct relation
between the injury asserted and the injurious conduct
alleged." Id. at 1306 (quoting Holmes,
503 U.S. at 268). Our task today is to determine what
plaintiffs must do in order to plausibly allege "some
direct relation" and to evaluate whether the City's
complaints have met that standard.
outset, we consider the central phrase "some direct
relation." There is give in the joints between
"some direct relation" and "some direct
causation." These are not identical concepts, and so
when, for example, Bank of America suggests that Miami's
injuries "were not caused 'directly' by a
loan," it may not be presenting the question in a way
that precisely and accurately reflects the Court's
instruction. We might agree that the injuries were not
"caused directly by a loan" and yet still find
"some direct relation" between the injury
and the statutory violations. Causation is "the act or
process of causing," and to "cause" something
is "to serve as cause or occasion of" or "to
bring [it] into existence." Webster's Third New
International Dictionary 356 (2002). Relation, on the
other hand is "the mode in which one thing or entity
stands to another, itself, or others," or "a
logical bond." Id. at 1916. We are considering
"direct relation," as a critical aspect of
"proximate cause," so some
palpable causation is required. We ought not forget, though,
that foreseeability, while insufficient on its own, remains a
requirement and ensures some causal connection. "Some
direct relation," then, works to guarantee that there is
a "logical bond" between violation and injury. Put
another way, while foreseeability ensures "cause,"
"some direct relation" ensures that the cause is
the law requires "some direct relation"
not any quantifiable amount of it. The standard is softened
by the modifier "some," meaning, "of an
unspecified but appreciable or not inconsiderable quantity,
amount, extent or degree." Id. at 2171. The
requirement is therefore somewhat easier to meet than if the
Court had said we needed to find "a direct
also aware that our analysis must be tied to the Fair Housing
Act in a specific way. The Supreme Court twice emphasized
that the policy judgments that shape our proximate cause
analysis will necessarily depend on the FHA. For starters,
"what falls within [the] 'first step, '" to
which proximate cause is "general[ly]" constrained,
will "depend in part on the 'nature of the
statutory cause of action.'" Bank of Am.,
137 S.Ct. at 1306. Second, our task is to "define, in
the first instance, the contours of proximate cause under
the FHA and" to apply that standard to the
City's claims. Id. (emphasis added).
thoroughly reviewing the City's complaints, we are
satisfied that we can find "some direct relation,"
a meaningful and logical continuity, between the City's
tax revenue injury and the Banks' conduct by following
the four guiding principles the Court outlined in Bank of
America. We begin by considering (a) "what falls
within [the] 'first step'" of the causal chain,
as we are aware of "'[t]he general tendency' in
these cases . . . 'not to go beyond [that] first
step.'" Id. (quoting Hemi Grp.,
559 U.S. at 10). What falls within the first step will,
we're told, depend on (b) "the nature of the
statutory cause of action," and (c) "an assessment
of what is administratively possible and convenient."
Id. Finally, since the common law is the basis for
the direct relation requirement, we also look to (d) the
FHA's common-law antecedents to the extent that we can.
Id. We consider each of these principles in turn.
intervening step does not vitiate proximate cause
Court has also told us that "[t]he general tendency in
these cases, in regard to damages at least, is not to go
beyond the first step." Bank of Am. 137 S.Ct.
at 1306 (quotations omitted). Both Banks, in their briefing
on remand, make much of this "first step" analysis.
It is clear, though, that proximate cause does not always cut
off at the first step after a violative act. A general
tendency is not the same as a hard and fast rule that
dictates the outcome in every case, and Supreme Court
precedent shows that an intervening step will not vitiate
proximate cause in all instances. What is more important,
precedent reveals, is the certainty with which we can ...