City of Miami v. Bank of America Corp.
800 F.3d 1262
11th Cir.2015Background
- City of Miami sued Wells Fargo under the Fair Housing Act (FHA) and for unjust enrichment, alleging a decade-long pattern of discriminatory lending (reverse redlining and redlining) that targeted Black and Latino borrowers with higher‑cost, higher‑risk loans.
- The City alleged statistical and documentary support: regression analyses linking race to receipt of “predatory” loans, higher foreclosure rates and faster time-to-foreclosure in minority neighborhoods, and confidential-witness statements describing internal steering and targeting.
- The City sought damages for lost property-tax revenue and increased municipal service costs, plus declaratory/injunctive relief and attorneys’ fees.
- The district court dismissed the FHA claim with prejudice, holding the City lacked standing under the FHA’s “zone of interests,” had not pleaded proximate causation, and that many claims were time-barred (rejecting the continuing-violation theory). The unjust-enrichment claim was dismissed without prejudice.
- The Eleventh Circuit reversed as to the FHA claim and remanded: it held the City had Article III standing, the FHA’s “aggrieved person” zone of interests is as broad as Article III permits, and the City adequately pleaded proximate cause; the panel vacated the denial of leave to amend and remanded for further proceedings.
- The appellate court affirmed dismissal of the unjust-enrichment claim under Florida law because the alleged benefits (lost tax revenue; municipal expenditures) were not direct benefits conferred on Wells Fargo and thus do not support unjust enrichment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing / "aggrieved person" scope | City: lost tax base and increased municipal costs from foreclosures are cognizable FHA injuries; City has Article III standing. | Wells Fargo: City’s harms are purely economic and not within FHA’s zone; Nasser limits municipal claims for mere economic loss. | Court: City has Article III standing; FHA’s statutory standing ("aggrieved person") is as broad as Article III permits (Trafficante/Gladstone/Havens). |
| Statutory standing / zone of interests | City: FHA’s zone of interests includes municipal injuries tied to racial discrimination in housing markets. | Wells Fargo: City’s alleged harms are outside FHA’s purpose and therefore outside the zone. | Court: Zone of interests encompasses the City’s allegations; district court applied too narrow test. |
| Proximate causation | City: alleged chain (discriminatory loan terms → higher defaults/foreclosures → reduced tax base/increased costs) is plausible and supported by regression analysis and eyewitness accounts. | Wells Fargo: City fails to show proximate cause; harms stem from intervening events (market collapse, third parties) and unaccounted risk factors. | Court: Proximate-cause requirement applies but City adequately pleaded proximate causation at the pleading stage (foreseeability; multiple links do not defeat causation). |
| Statute of limitations / continuing violation | City: could cure limitations gap via amendment and alleged continuing practices; identified loans within limitations in proposed amended complaint. | Wells Fargo: many offending loans predated limitations period; continuing-violation allegations inadequate. | Court: District court erred to dismiss with prejudice for futility; remand for leave to amend and to reconsider limitations/continuing-violation claims. |
| Unjust enrichment (Florida law) | City: Bank unjustly benefited from municipal services and reduced tax base; restitution warranted. | Wells Fargo: Benefits were not directly conferred on Bank; municipal expenditures are not recoverable as unjust enrichment. | Court: Affirmed dismissal—Florida unjust-enrichment requires a direct benefit conferred; City’s alleged benefits do not satisfy Florida law. |
Key Cases Cited
- Trafficante v. Metropolitan Life Ins. Co., 409 U.S. 205 (interpreting FHA’s standing broadly)
- Gladstone Realtors v. Village of Bellwood, 441 U.S. 91 (municipality may sue under FHA for reduced tax base from discriminatory housing practices)
- Havens Realty Corp. v. Coleman, 455 U.S. 363 (broad statutory standing under FHA and recognition of organizational harms)
- Meyer v. Holley, 537 U.S. 280 (FHA damages claims are tort-like; tort principles, including proximate cause, apply)
- Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377 (clarifying "zone of interests"/cause-of-action inquiry under statutes)