City of Cincinnati v. Deutsche Bank National Trust Co., 863 F.3d 474

Background

After the 2008 crisis, Cincinnati alleged Wells Fargo adopted a cost-benefit "policy" of not repairing certain foreclosed properties, causing code violations and public-safety harms.
The City sued Wells Fargo (and Deutsche Bank) asserting municipal-code violations, statutory public nuisance, common-law public nuisance (qualified and absolute), and other claims; most claims and Deutsche Bank claims were later settled or dismissed.
Remaining at issue on appeal: Claim 6 — damages for common-law public nuisance against Wells Fargo (the City abandoned injunctive/declaratory relief).
The district court dismissed Claim 6, holding (1) the economic-loss doctrine bars recovery for the City’s qualified public-nuisance damages and (2) the City failed to plead proximate cause for its asserted economic harms (tax revenue loss, increased police/fire and administrative costs).
The City appealed; the Sixth Circuit majority affirmed dismissal, while the Chief Judge concurred in part and dissented in part, arguing the complaint plausibly alleged an absolute public nuisance against Wells Fargo.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether economic-loss doctrine bars damages for a qualified public nuisance	City: tort recovery is available for public-nuisance damages arising from banks' misconduct	Wells Fargo: economic-loss doctrine bars recovery of purely economic harms absent physical injury	Held: Yes — economic-loss doctrine bars the City’s qualified public-nuisance damages claim
Whether the complaint pleads an absolute (intentional or abnormally dangerous) public nuisance	City: allegations that Wells Fargo intentionally left properties dilapidated and dangerous suffice to plead absolute nuisance	Wells Fargo: City removed absolute-nuisance allegations and allegations show only knowledge, not intent; pleading lacks necessary elements	Held: Majority — no viable absolute nuisance claim in the operative complaint; City failed to plead intent or inherently dangerous condition
Whether the complaint sufficiently identifies nuisance properties and links them to City’s alleged damages (proximate cause)	City: extensive exhibits and thousands of code-enforcement pages plausibly tie Wells Fargo policy to municipal harms; specificity can be resolved in discovery	Wells Fargo: City dismissed claims tied to the named properties; complaint now seeks damages for unidentified or future properties, so causation and plausibility fail	Held: Majority — City failed to identify current Wells Fargo nuisance properties and thus failed plausibly to plead proximate cause for its economic damages
Whether the City may use nuisance law to challenge a company-wide policy of selective noncompliance (facial attack)	City: overarching policy produced systemic harms and is the proper subject of nuisance law	Wells Fargo: a cost-benefit policy is not a nuisance in all its applications; nuisance law addresses actual conditions, not abstract policies	Held: Majority — policy alone is insufficient; nuisance claim requires an actual unsafe/unsanitary condition tied to identifiable properties

Key Cases Cited

Queen City Terminals v. Gen. Am. Trans., 73 Ohio St.3d 609, 653 N.E.2d 661 (Ohio 1995) (economic-loss doctrine bars recovery for purely economic damages absent physical injury)
City of Cincinnati v. Beretta U.S.A. Corp., 95 Ohio St.3d 416, 768 N.E.2d 1136 (Ohio 2002) (nuisance law and proximate-cause analysis adopting Holmes factors)
Holmes v. Sec. Inv’r Prot. Corp., 503 U.S. 258 (1992) (directness/proximate-cause factors for complex chain-of-causation claims)
City of Cleveland v. Ameriquest Mortg. Sec., Inc., 615 F.3d 496 (6th Cir. 2010) (affirming dismissal of city’s nuisance claim for lack of proximate cause where intervening actors and better-positioned plaintiffs existed)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: complaint must state a plausible claim, not merely conclusory assertions)