Lieff Cabraser Civil Justice Blog
11th Circuit Rules for Plaintiff City of Miami on Standards for Proximate Cause in Discriminatory Lending Lawsuits

11th Circuit Rules for Plaintiff City of Miami on Standards for Proximate Cause in Discriminatory Lending Lawsuits

The City of Miami obtained a significant victory in the Eleventh Circuit in Fair Housing Act lawsuits it has brought against certain banks, including Wells Fargo & Co. and Bank of America.  The Eleventh Circuit issued decisions on remand from the Supreme Court on proximate cause, holding “[c]onsidering the broad and ambitious scope of the FHA, the statute’s expansive text, the exceedingly detailed allegations 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.”

Lieff Cabraser partner Rachel Geman, one of the City’s attorneys, commented, “We appreciate the Court’s thorough treatment and instruction about this important civil rights issue, and look forward to next steps in the cases.”

The City of Miami alleged the defendants violated the Fair Housing Act by issuing more expensive or otherwise discriminatory loans to Blacks and Latinos than to similarly-situated whites. This conduct caused the City of Miami (and other cities) to incur non-economic harm and, insofar as there were disproportionate foreclosures on minority homeowners,  economic harm to the City.

The Supreme Court earlier confirmed that cities have standing to sue under the Fair Housing Act, but 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.” It remanded the case, and these opinions from the Eleventh Circuit followed.

“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… [and that] …the pleadings set out a plausible claim.”

Learn more about the Unfair Bank Lending lawsuits.