Bank of America v. Miami, Wells Fargo & Co. v. Miami


Does a lawsuit against a bank satisfy the Fair Housing Act’s “zone of interest” and proximate cause requirements, where a municipality alleges harm to its fiscal interests from urban blight stemming from foreclosures caused by the bank’s discriminatory lending practices?

Oral argument: 

In this consolidated action, the Supreme Court will decide whether a city can sue a bank under the Fair Housing Act for discriminatory lending practices, and whether it can recover lost property tax revenues and funds spent addressing widespread foreclosures that the bank’s discriminatory practices allegedly caused. The City of Miami alleges, based on statistical analyses, that loans by Bank of America and Wells Fargo & Co. to minority borrowers were more than five times as likely to result in foreclosures than loans to white borrowers. The banks argue that the City of Miami falls outside the zone of interests required to obtain standing under the Fair Housing Act, and that any alleged causal relationship between the City’s financial losses and the discriminatory housing practices of the banks is too far a stretch to support a valid lawsuit. The City responds that it meets the broad standing requirements of the Fair Housing Act and should recover for its injuries because they are foreseeably and directly linked to the discriminatory lending practices of the banks. A victory by Miami could potentially overburden the courts with similar lawsuits and overextend judicial power; however, Miami’s defeat could leave the FHA under-enforced and cities underfunded to battle urban blight.

Questions as Framed for the Court by the Parties 

  1. By limiting suit to "aggrieved person[s]," did Congress require that an FHA plaintiff plead more than just Article III injury-in-fact?
  2. The FHA requires plaintiffs to plead proximate cause. Does proximate cause require more than just the possibility that a defendant could have foreseen that the remote plaintiff might ultimately lose money through some theoretical chain of contingencies?



Miami brought a Fair Housing Act (“FHA”) lawsuit against Bank of America, Countrywide Financial Corporation, Countrywide Home Loans, and Countrywide Bank (collectively, “Bank of America” or “the Bank”) on December 13, 2013, for discriminatory mortgage lending practices and unjust enrichment at the expense of Miami. See Miami v. Bank of America Corp., No. 13-CV-24506, slip op. at 4–5 (11th Cir. Sept. 1, 2015). Miami claimed the Bank’s conduct was illegal under the FHA for two reasons. See id. at 6. First, Miami asserted that the Bank intentionally discriminated against minorities through “redlining” (i.e., rejecting minorities’ loan applications that were equal to non-minorities’ applications) and “reverse redlining” (i.e., approving minorities’ loan applications on predatory terms). See id. at 5–6. Second, Miami asserted the Bank’s conduct resulted in greater foreclosure rates among minorities and a greater number of exploitative loans. See id. at 6.

In support of these claims, Miami pointed out the Bank’s retail lending pricing, broker fees, statements from loan officers, product placement, and loan officer compensation system that encouraged approving loan applications unjustified by the applicants’ creditworthiness. See Bank of America Corp., No. 13-CV-24506, slip op. at 6, 8–9. Miami supported its claims by citing statistical analyses, which attempted to correlate the foreclosure rate with the race of the loan applicant. See id. at 6. Miami asserted that the analyses indicated that loans issued to applicants in minority neighborhoods resulted in foreclosure sooner and significantly more often than loans issued in predominantly white neighborhoods. See id. at 6–8. Based on these allegations, Miami sought damages for reduced property tax revenues and the increased cost of municipal services it provided to address problems associated with foreclosed and vacant properties. See id. at 9.

On July 9, 2014, the district court dismissed the suit, finding that Miami lacked statutory standing to sue because its alleged economic injuries were not affected by an interest in preventing racial discrimination, and because it failed to adequately plead that the Bank’s conduct was the proximate cause of the harm. See Bank of America Corp., No. 13-CV-24506, slip op. at 10. The court also held that the City of Miami had sued beyond the statute of limitations in the FHA and that its unjust enrichment claim was legally insufficient. On September 1, 2015, the Eleventh Circuit affirmed the dismissal of the unjust enrichment claim but reversed and remanded the case for further proceedings as to the FHA claim, finding that Miami did have sufficient standing to sue under the FHA and that the City might be able to resolve its issues with the statute of limitations upon remand. See id. at 56–57.


Miami’s action against Wells Fargo is largely identical to the action against Bank of America. See Miami v. Wells Fargo & Co., No. 13-CV-24508, slip op. at 1. Miami’s statistical analysis of Wells Fargo’s loans revealed similar discriminatory lending practices. See id. at 6–8. Just as it did with Bank of America, Miami sought damages for reduced tax revenues and increased municipal spending from Wells Fargo. See id. at 9. On July 9, 2014, the district court dismissed this action, finding that Miami, as in its case against the Bank, lacked statutory standing to sue, that it failed to adequately plead proximate cause, and that its claims ran afoul of the statute of limitations. See id. at 9–11. On September 1, 2015, the Eleventh Circuit affirmed that Miami’s unjust enrichment claim was insufficient, but on all other grounds, reversed and remanded the district court’s decision. See id. at 3.



Bank of America and Wells Fargo (collectively, “the banks”) argue that the Court should use a zone-of-interests test, which is narrower than Article III standing, when considering who has standing to sue under the Fair Housing Act (“FHA”). See Brief for Petitioner (15-1111), Bank of America at 16–17; Brief for Petitioner (15-1112), Wells Fargo & Co. and Wells Fargo Bank, N.A. at 11–13. Bank of America maintains that a zone-of-interests test is presumed to apply to a statute unless Congress expressly provides otherwise, which it did not do in the FHA. See Brief for Petitioner (15-1111) at 17. Bank of America states that the zone-of-interests for the FHA only includes “aggrieved persons” who were, themselves, injured by housing discrimination. See id. at 38–41; Brief for Petitioner (15-1112) at 32–33. Further, the banks argue that the FHA is not designed to remedy financial injuries or even public rights. See Brief for Petitioner (15-1111) at 17, 38–41; Brief for Petitioner (15-1112) at 32–33Bank of America adds that the Congressional amendments to the FHA indicate Congress’s intent to narrow the group of plaintiffs eligible to sue under the FHA to something less than those with mere Article III standing. See Brief for Petitioner (15-1111) at 36.

The City of Miami (“the City”) responds that the Court should determine standing to sue under the FHA based on broad Article III standards but that it has standing even under a zone-of-interests test because it has an interest in fair housing that Bank of America and Wells Fargo injured. See Brief for Respondent (15-1111), City of Miami at 12, 22; Brief for Respondent (15-1112)City of Miami at 11, 20–21, 23. The City notes that the zone-of-interests test merely requires that a party assert an interest that is arguably recognized by the relevant statute, with the benefit of the doubt going to the party asserting the interest. See Brief for Respondent (15-1111) at 12–13; Brief for Respondent (15-1112) at 11–12. According to the City, Congress determines the scope of a zone-of-interest, and Congress designed the FHA precisely to protect the municipal rights and injuries at issue in this case. See Brief for Respondent (15-1111) at 12–13; Brief for Respondent (15-1112) at 12, 20. The City states that when Congress amended the FHA it implicitly incorporated broad standing definitions from earlier Supreme Court cases. See Brief for Respondent (15-1111) at 23–27; Brief for Respondent (15-1112) at 24–27. Finally, the City notes that Congress specifically rejected an attempt to limit FHA standing to persons directly discriminated against. See Brief for Respondent (15-1111) at 25; Brief for Respondent (15-1112) at 26.


The banks argue that although past Supreme Court cases interpreting the FHA have stated that the term “aggrieved person” was equivalent to Article III standing, those statements were not fundamental to the ultimate decisions in those cases and are therefore not binding in this case. See Brief for Petitioner (15-1111) at 13–14; Brief for Petitioner (15-1112) at 13, 24–27.They also argue that the Court recognized the non-binding nature of such statements in Thompson v. N. Am. Stainless LPSee Brief for Petitioner (15-1111) at 14; Brief for Petitioner (15-1112) at 13. Wells Fargo further argues that, even if these statements were legally binding, the Court should overrule them. See id. at 24. Wells Fargo maintains that the City of Miami has not asserted any injury to its interest in non-discrimination and that the City did not even attempt to establish that the foreclosures stemmed from discriminatory lending practices. See id. at 33–35.

The City of Miami responds that the Supreme Court has always defined standing to sue under the FHA broadly as including persons and entities who were not the direct objects of discriminatory housing practices. See Brief for Respondent (15-1111) at 18–21; Brief for Respondent (15-1112) at 16–20. The City argues that the language of previous Supreme Court cases allowing FHA standing to be as broad as Article III of the Constitution allows is legally binding. See Brief for Respondent (15-1111) at 22; Brief for Respondent (15-1112) at 20–21, 23, 28–29. Specifically, the City argues that the Court’s interpretation of “aggrieved person” under Title VII in Thompson does not control the already settled interpretation of “aggrieved person” under the FHA, particularly because Title VII differs from the FHA in its phrasing, focus, and specificity. See Brief for Respondent (15-1111) at 27; Brief for Respondent (15-1112) at 27. The City also argues that Article III standing allows entities to sue so long as they can prove that they suffered an injury in fact. See Brief for Respondent (15-1111) at 22; Brief for Respondent (15-1112) at 20–21, 23. Further, the City notes that the Court has allowed suits by municipalities that suffered actual injury from discriminatory housing practices. See Brief for Respondent (15-1111) at 20; Brief for Respondent (15-1112) at 19. The City adds that its injury claim is identical to the claim of an organization that Wells Fargo agrees had standing to sue under the FHA. See id. at 36. The City maintains that its complaint presents a picture of the City’s active, program-supported interests in promoting fair housing and reducing housing discrimination, which were injured by the discriminatory lending practices of the banks. See id. at 3536. Finally, the City argues that if its alleged interests and injuries are found insufficient to support standing to sue, the Court should remand the case so the City can add to its allegations. See Brief for Respondent (15-1111) at 21; Brief for Respondent (15-1112) at 20.


The banks argue that the FHA requires that a party prove a direct and foreseeable link between its injury and the statutory violation of another party before receiving compensation for that injury. See Brief for Petitioner (15-1111) at 48–49; Brief for Petitioner (15-1112) at 36–38. As applied to this case, the banks argue that far too many tenuous links separate the financial injuries to the City of Miami and the discriminatory lending practices of the banks. See Brief for Petitioner (15-1111) at 17, 38–41; Brief for Petitioner (15-1112) at 36. Bank of America argues that the causal chain alleged by the City is more extensive and remote than causal chains the Court has rejected in the past. See Brief for Petitioner (15-1111) at 53. Bank of America also maintains that many circumstances other than discriminatory lending practices—such as the recession, illnesses, job losses, or divorces—could have caused the foreclosures in Miami. See id. at 50. Both banks argue that the court below decided the case improperly because it treated foreseeability as sufficient to establish the causal link between the banks’ lending practices and the City’s injuries. See Brief for Petitioner (15-1111) at 44; Brief for Petitioner (15-1112) at 41. Additionally, the banks argue that a foreseeability-only standard is impractical, because any injury can be argued to be foreseeable, creating unending liability. See Brief for Petitioner (15-1111) at 51; Brief for Petitioner (15-1112) at 42.

The City of Miami responds that its financial losses were both foreseeably and directly caused by the discriminatory lending practices of the banks. See Brief for Respondent (15-1111) at 32-34; Brief for Respondent (15-1112) at 40. The City argues that the Court’s holdings in Gladstone, Realtors v. Village of Bellwood and Havens Realty Corp. v. Coleman—indicating that discriminatory lending practices can proximately cause financial harm to a municipality and the FHA can remedy indirect harms—should control the proximate cause inquiry in this case. See Brief for Respondent (15-1111) at 33, 35–36, 38Brief for Respondent (15-1112) at 40–42, 50, 60–61. Further, the City argues that if these decisions do not apply to the case at hand, the City has nonetheless established sufficient proximate cause to support this suit. See Brief for Respondent (15-1111) at 32–34; Brief for Respondent (15-1112) at 42. The City maintains that the traditional proximate cause standards incorporated by the FHA do not include a directness requirement and bar suits only when the link between the act and the injury are so remote as to be bizarre or coincidental. See Brief for Respondent (15-1111) at 34–35; Brief for Respondent (15-1112) at 40–41, 43. Because the injuries it has alleged are known to be linked to discriminatory lending practices, the City argues that the banks should have anticipated these injuries and that they are therefore well within the limits of proximate cause. See Brief for Respondent (15-1111) at 35, 54–55; Brief for Respondent (15-1112) at 45–49. The City notes that the foreseeability standard is not overly burdensome and that the banks, in fact, had knowledge of the frequent foreclosures and subsequent municipal financial harms resulting from their discriminatory lending in Miami. See Brief for Respondent (15-1111) at 41, 43–44; Brief for Respondent (15-1112) at 45–49. Further, the City argues that even if the FHA includes a directness requirement for proximate cause, the direct impact of discriminatory loans on the City’s goal of promoting fair housing would satisfy this requirement. See Brief for Respondent (15-1111) at 50, 52–53; Brief for Respondent (15-1112) at 54, 56–57. The City notes that it used reputable and detailed statistical analyses to establish the connection between discriminatory lending practices and the City’s financial losses, even controlling for many other possible causes of the financial loss. See Brief for Respondent (15-1111) at 33; Brief for Respondent (15-1112) at 39–40. The City argues that finding proximate cause in this cause would not lead to an endless line of litigation from plaintiffs such as shop owners and neighbors, because municipalities have inherent interests in fair housing that these other potential plaintiffs do not share. See Brief for Respondent (15-1111) at 40; Brief for Respondent (15-1112) at 45. Finally, the City maintains that, because its allegations are sufficient to establish proximate cause if taken to be true, the City should have the opportunity to prove proximate cause at trial. See Brief for Respondent (15-1111) at 45–46; Brief for Respondent (15-1112) at 49–50.



Numerous organizations supporting the banks—the Cato Institute, U.S. Chamber of Commerce and the Property Casualty Insurers of America (“Chamber of Commerce”), DRI-The Voice of the Defense Bar (“DRI”), and American Bankers Associations—assert that Miami’s position will overburden the judicial system, as every taxpayer whose taxes increased or experienced loss of services would be eligible to sue. See Brief of Amicus Curiae the Cato Institute, in Support of Petitioners at 13; Brief of Amici Curiae Chamber of Commerce and the Property Casualty Insurers Association ("Chamber of Commerce"), in Support of Petitioners at 7; Brief of Amicus Curiae DRI-The Voice of the Defense Bar ("DRI"), in Support of Petitioners at 6–8; Brief of Amici Curiae American Bankers Association et al., in Support of Petitioners at 12–13. Moreover, the American Bankers Association asserts that each individual lawsuit would involve years of discovery and deliberation, as judges would have to determine the exact tax revenue cities forewent as a result of specific lending decisions. See Brief of American Bankers Association at 14–15. These groups argue that permitting Miami to sue would lead to uncountable number of suits filed against banks, which would strain the judicial system. See id.Brief the Cato Institute at 13; Brief of Chamber of Commerce at 7; Brief of DRI at 6–8; Brief of American Bankers Association at 12–13.         

Organizations supporting Miami—the City of San Francisco, the United States, and the NAACP Legal Defense and Educational Fund, Inc. (“NAACP”)—respond that affirming Miami’s right to sue would not create additional liability, because cities have a unique stake in FHA violations: they experience a harm independent of individual victims and can also claim to represent the victimized communities. See Brief of Amici Curiae the City and County of San Francisco et al., in Support of Respondent at 37; Brief of Amicus Curiae United States, in Support of Respondent at 34; Brief of Amicus Curiae NAACP Legal Defense & Educational Fund, Inc. ("NAACP"), in Support of Respondent at 8. Moreover, the Fraternal Order of Police, also in support of Miami, argues that cities are currently overburdened due to hazards caused by foreclosed and vacant properties. See Brief of Amici Curiae Fraternal Order of Police et al., in Support of Respondent at 7. According to the Fraternal Order, a holding for Miami would thus lessen the burden on the cities. See id.


Miami’s lawsuit, and those similar to it, would best advance FHA’s objectives, argue the Constitutional Accountability Center (“CAC”), San Francisco, the United States, Asian Americans Advancing Justice (“AAJC”), and NAACP. See Brief of Amicus Curiae Constitutional Accountability Center ("CAC"), in Support of Respondent at 30–31; Brief of San Francisco at 22; Brief of United States at 23; Brief of Amici Curiae Asian Americans Advancing Justice et al. ("AAJC"), in Support of Respondent at 13; Brief of NAACP at 29–30. CAC asserts that direct victims of FHA violations, unlike cities, may lack resources to sue. See Brief of CAC at 30. Moreover, the United States and NAACP argue that cities can best identify the scope of discriminatory lending harm, as cities tackle these problems daily. See Brief of United States at 23; Brief of NAACP at 29–30. Accordingly, amici argue that FHA would best deter discriminatory lending practices if cities were allowed to enforce it. See Brief of CAC at 17–18; Brief of San Francisco at 22; Brief of United States at 26; Brief of NAACP at 30.

The Chamber of Commerce argues, however, that FHA already authorizes many government actors and private parties to sue for FHA violations and that permitting cities to sue is unnecessary. See Brief of the Chamber of Commerce at 9–10. The Chamber of Commerce contends that Miami’s lawsuit would benefit not the victims of the alleged discrimination, but the lawyers and the municipal budget. See id. at 8. The Cato Institute agrees, concluding that Miami’s attempts of using the FHA to balance its budget mocks the FHA’s anti-discriminatory purpose. See Brief of the Cato Institute at 4–5.  


The Cato Institute, in support of the banks, asserts that permitting Miami to sue increases judicial power beyond prescribed limits. See Brief of the Cato Institute, in Support of Petitioner at 4–5. The Institute asserts that Congress limited FHA recovery to plaintiffs in the zone of interest, and, because Miami is not within the statutory zone of interest, the judiciary would be usurping power by permitting the lawsuit to continue. See id. at 5, 13.

On the other hand, amici in support of Miami argue that permitting Miami to sue would effectuate Congressional intent. See Brief of CAC at 25–26; Brief of San Francisco at 12–13; Brief of Amici Curiae Lawyers’ Committee for Civil Rights Under Law et al. ("Lawyers' Committee"), in Support of Respondent at 20. CAC and San Francisco assert that Congress envisioned the FHA as permitting cities to recover for damages that FHA violations caused to the cities’ economic vitality and social structures. See Brief of CAC at 26; Brief of San Francisco at 13; Brief of Lawyers' Committee at 20.

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