Bank of America Corp. v. City of Miami
581 US ___ (2017)

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Justia Opinion Summary

A city is an “aggrieved person,” authorized to bring suit under the Fair Housing Act (FHA), according to the Supreme Court. The City of Miami sued Bank of America and Wells Fargo, alleging violations of the FHA prohibition of racial discrimination in connection with real-estate transactions, 42 U.S.C. 3604(b), 3605(a). The city claimed 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, resulting in a disproportionate number of foreclosures and vacancies, impairing municipal effort to assure racial integration, diminishing property-tax revenue, and increasing demand for police, fire, and other municipal services. The Court reasoned that those claims of financial injury are “arguably within the zone of interests” the FHA protects. In remanding the case, the Court stated that the Eleventh Circuit erred in concluding that the complaints met the FHA’s proximate-cause requirement based solely on a finding that the alleged financial injuries were foreseeable results of the banks’ misconduct. Foreseeability alone does not ensure the required close connection to the prohibited conduct. Proximate cause under the FHA requires “some direct relation between the injury asserted and the injurious conduct alleged,” considering the “nature of the statutory cause of action,” and an assessment “of what is administratively possible and convenient.”

Prior History
  • Syllabus  | 
  • Opinion (Clarence Thomas)  | 
  • Opinion (Stephen G. Breyer)

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued.The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader.See United States v. Detroit Timber & Lumber Co., 200 U. S. 321 .

SUPREME COURT OF THE UNITED STATES

Syllabus

BANK OF AMERICA CORP. et al. v. CITY OF MIAMI, FLORIDA

certiorari to the united states court of appeals for the eleventh circuit

No. 15–1111. Argued November 8, 2016—Decided May 1, 2017[1]

The 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.

Held:

1. The City is an “aggrieved person” authorized to bring suit under the FHA. In addition to satisfying constitutional standing requirements, 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. ___, ___.

The 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 . 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 ; 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.

The 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 FHA’s 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. 5–9.

2. The Eleventh Circuit erred in concluding that the complaints met the FHA’s 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 , 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 ; 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 . The Court has repeatedly applied directness principles to statutes with “common-law foundations.” Anza v. Ideal Steel Supply Corp., 547 U. S. 451 . “ ‘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 . 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.

The 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. Pp. 10–12.

No. 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 Ginsburg, 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 the cases.

Notes

1 Together with No. 15–1112, Wells Fargo & Co. et al. v. City of Miami, Florida, also on certiorari to the same court.

Primary Holding

The proximate cause requirement under the Fair Housing Act requires not only foreseeability but also a direct connection between the defendant's alleged conduct and the alleged injury.

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