BANK OF AMERICA CORP. ET AL.
CITY OF MIAMI, FLORIDA
November 8, 2016
WRITS OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE ELEVENTH CIRCUIT No. 15-1111.
City of Miami filed suit against Bank of America and Wells
Fargo (Banks), alleging violations of the Fair Housing Act
(FHA or Act). The FHA prohibits, among other things, racial
discrimination in connection with real-estate transactions,
42 U.S.C. §§3604(b), 3605(a), and permits any
"aggrieved person" to file a civil damages action
for a violation of the Act, §§3613(a)(1)(A),
(c)(1). The City's complaints charge that the Banks
intentionally targeted predatory practices at
African-American and Latino neighborhoods and residents,
lending to minority borrowers on worse terms than equally
creditworthy nonminority borrowers and inducing defaults by
failing to extend refinancing and loan modifications to
minority borrowers on fair terms. The City alleges that the
Banks' discriminatory conduct led to a disproportionate
number of foreclosures and vacancies in majority-minority
neighborhoods, which impaired the City's effort to assure
racial integration, diminished the City's property-tax
revenue, and increased demand for police, fire, and other
municipal services. The District Court dismissed the
complaints on the grounds that (1) the harms alleged fell
outside the zone of interests the FHA protects and (2) the
complaints failed to show a sufficient causal connection
between the City's injuries and the Banks'
discriminatory conduct. The Eleventh Circuit reversed.
City is an "aggrieved person" authorized to bring
suit under the FHA. In addition to satisfying constitutional
standing re quire- ments, see Spokeo, Inc. v.
Robins, 578 U.S.__, __, a plaintiff must show that the
statute grants the plaintiff the cause of action he or she
asserts. It is presumed 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.'" Lexmark Int'l, Inc. v. Static
Control Components, Inc., 572 U.S.__, __.
City's claims of financial injury are, at the least,
"arguably within the zone of interests" the FHA
protects. Association of Data Processing Service
Organizations, Inc. v. Camp, 397 U.S. 150, 153. The FHA
defines an "aggrieved person" as "any person
who" either "claims to have been injured by a
discriminatory housing practice" or believes that such
an injury "is about to occur, " 8 U.S.C.
§3602(i). This Court has said that the definition of
"person aggrieved" in the original version of the
FHA "showed 'a congressional intention to define
standing as broadly as is permitted by Article III of the
Constitution, ' " Trafficante v. Metropolitan
Life Ins. Co., 409 U.S. 205, 209; and has held that the
Act permits suit by parties similarly situated to the City,
see, e.g., Gladstone, Realtors v. Village of
Bellwood, 441 U.S. 91 (village alleging that it lost tax
revenue and had the racial balance of its community
undermined by racial-steering practices). Against the
backdrop of those decisions, Congress did not materially
alter the definition of person "aggrieved" when it
reenacted the current version of the Act.
Banks nonetheless contend that the definition sets boundaries
that fall short of those the Constitution sets. Even assuming
that some form of their argument is valid, this Court
concludes that the City's financial injuries fall within
the zone of interests that the FHA protects. The City's
claims are similar in kind to those of the Village of
Bellwood, which the Court held in Gladstone, supra,
could bring suit under the FHA. The Court explained that the
defendants' discriminatory conduct adversely affected the
village by, among other things, producing a "significant
reduction in property values [that] directly injures a
municipality by diminishing its tax base, thus threatening
its ability to bear the costs of local government and to
provide services." Id., at 110-111. The
City's alleged economic injuries thus arguably fall
within the FHAs zone of interests, as this Court has
previously interpreted that statute. Stare decisis
principles compel the Court's adherence to those
precedents, and principles of statutory interpretation demand
that the Court respect Congress' decision to ratify those
precedents when it reenacted the relevant statutory text. Pp.
Eleventh Circuit erred in concluding that the complaints met
the FHAs proximate-cause requirement based solely on the
finding that the City's alleged financial injuries were
foreseeable results of the Banks' misconduct. A claim for
damages under the FHA is akin to a "tort action, "
Meyer v. Holley, 537 U.S. 280, 285, and is thus
subject to the common-law requirement that loss is
attributable "'to the proximate cause, and not to
any remote cause, '" Lexmark, 572 U.S.,
at__. The proximate-cause analysis asks "whether the
harm alleged has a sufficiently close connection to the
conduct the statute prohibits." Id., at__. With
respect to the FHA, foreseeability alone does not ensure the
required close connection. Nothing in the statute suggests
that Congress intended to provide a remedy for any
foreseeable result of an FHA violation, which may "
'cause ripples of harm to flow'" far beyond the
defendant's misconduct, Associated Gen. Contractors
of Cal., Inc. v. Carpenters, 459 U.S. 519, 534; and
doing so would risk "massive and complex damages
litigation, " id., at 545. Rather, proximate
cause under the FHA requires "some direct relation
between the injury asserted and the injurious conduct
alleged." Holmes v. Securities Investors Protection
Corporation, 503 U.S. 258, 268. The Court has repeatedly
applied directness principles to statutes with
"common-law foundations." Anza v. Ideal Steel
Supply Corp., 547 U.S. 451, 457. " 'The general
tendency' " in these cases, " 'in regard to
damages at least, is not to go beyond the first step.'
" Hemi Group, LLC v. City of New York, 559 U.S.
1, 10. What falls within that step depends in part on the
"nature of the statutory cause of action, "
Lexmark, supra, at__, and an assessment "
'of what is administratively possible and convenient,
' " Holmes, supra, at 268.
Court declines to draw the precise boundaries of proximate
cause under the FHA, particularly where neither the Eleventh
Circuit nor other courts of appeals have weighed in on the
issue. Instead, the 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.
15-1111, 800 F.3d 1262, and No. 15-1112, 801 F.3d 1258,
vacated and remanded.
BREYER, J., delivered the opinion of the Court, in which
ROBERTS, C. J., and GlNSBURG, SOTOMAYOR, and KAGAN, JJ.,
joined. THOMAS, J., filed an opinion concurring in part and
dissenting in part, in which KENNEDY and Alito, JJ., joined.
Gorsuch, J., took no part in the consideration or decision of
Fair Housing Act (FHA or Act) forbids
"discriminating] 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.
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).
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
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
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 (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
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.
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 dis-criminatorily
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.
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 ...