Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

City of Miami v. Wells Fargo & Co.

United States Court of Appeals, Eleventh Circuit

May 3, 2019

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, Defendants - Appellees.

          Appeals from the United States District Court for the Southern District of Florida D.C. Docket Nos. 1:13-cv-24508-WPD, 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 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.

         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 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.

         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 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.

         The 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.

         However, 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 enough.

         We do 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.

         I. Background

         A. The City's 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 (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.

         The 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.[1]

         The 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").[2] 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 (same).

         The 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.

         According 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.

         The 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.

         The 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.

         What's 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.

         The 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."[3] 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.

         The 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.

         B. District Court and 11th Circuit Decisions

         On July 9, 2014, the district court granted motions to dismiss by both banks.[4] 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.

         The 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.

         We 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").

         We next 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." Id.

         Instead, 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.

         Bank of America and Wells Fargo each filed petitions for certiorari, which the Supreme Court granted. It consolidated the two cases.

         C. Supreme Court Decision

         The 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.

         On 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. Id.

         While 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 altered).

         The 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.

         In this 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.

         II. Standard of Review

         We 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 1271.

         For 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).

         III. Analysis

         Prosser 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).

         We 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.

         At the 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 sufficiently "proximate."

         Further, 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 relation."

         We are 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).

         After 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.

         A. An intervening step does not vitiate proximate cause

         The 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 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.