City of Miami v. Bank of America Corporation
2015 U.S. App. LEXIS 15442
| 11th Cir. | 2015Background
- The City of Miami sued Bank of America alleging a decade-long pattern of race-based "reverse redlining" and predatory lending (high-cost, subprime, interest-only, negative amortization, teaser ARMs, etc.) that disproportionately targeted Black and Latino borrowers in Miami.
- The City alleged discriminatory intent and disparate impact, relying on regression analyses and confidential witnesses to link race to loan terms, and loan terms to higher foreclosure rates in minority neighborhoods.
- City claimed economic injuries: lost property-tax revenue and increased municipal expenditures (police, fire, debris removal) caused by premature or unnecessary foreclosures.
- District court dismissed the FHA claim with prejudice: held City lacked statutory (zone-of-interests) standing, failed to plead proximate cause, and claims were time-barred (continuing-violation doctrine rejected). State unjust-enrichment claim was dismissed without prejudice.
- Eleventh Circuit reversed in part: held City has Article III standing; under binding Supreme Court FHA precedent the FHA’s "aggrieved person" category reaches as far as Article III permits; proximate-cause is required for FHA damages claims but City adequately pled it; continuing-violation doctrine can apply; unjust-enrichment claim under Florida law affirmed dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing | City: alleged concrete injury (reduced tax base, increased municipal costs) fairly traceable to Bank’s discriminatory lending. | Bank: harms are speculative and caused by market-wide forces and third parties, not the Bank. | Held: City has Article III standing (injury, traceability, redressability adequately alleged). |
| Statutory standing / zone of interests under FHA | City: "aggrieved person" language should be read as broadly as Article III permits (Trafficante/Gladstone/Havens). | Bank: Thompson/Lexmark narrow zone-of-interests; City falls outside FHA interests because alleged harms are primarily economic. | Held: Bound by Supreme Court FHA precedent; "aggrieved person" extends to limits of Article III; City lies within zone of interests. |
| Proximate causation for FHA damages | City: need only Article III traceability or, if proximate cause required, pleads foreseeability and regression evidence tying lending to foreclosures and lost tax revenue. | Bank: FHA damages require a strict directness proximate-cause test; City’s harms are too indirect and caused by intervening actors/market forces. | Held: Proximate cause is an element of FHA damages claims; proximate cause assessed by foreseeability/substantial-factor (tort-like) standard; City adequately pled proximate cause. |
| Statute of limitations / continuing violation doctrine | City: alleges a continuing, evolving pattern of discriminatory lending that extends into the limitations period; proposed amended complaint would identify loans within two years. | Bank: alleged discriminatory loans predate limitations period; City failed to identify violations within the two-year window. | Held: Continuing-violation doctrine can apply to FHA pattern-or-practice claims; district court erred to dismiss with prejudice and to deny leave to amend; remanded for further proceedings. |
Key Cases Cited
- Trafficante v. Metropolitan Life Ins. Co., 409 U.S. 205 (1972) (FHA standing language construed broadly; injury from exclusion of minorities recognized)
- Gladstone Realtors v. Village of Bellwood, 441 U.S. 91 (1979) (municipality has Article III/FHA standing for diminished tax base from discriminatory steering)
- Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982) (organizations and third parties may sue under FHA; continuing violations recognized)
- Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377 (2014) (zone-of-interests is statutory-interpretation inquiry; proximate-cause presumption for statutory causes of action)
- Thompson v. N. Am. Stainless, LP, 562 U.S. 170 (2011) (zone-of-interests analysis for Title VII; discussed tension with FHA precedents)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing elements)
- Allen v. Wright, 468 U.S. 737 (1984) (traceability/attenuation in Article III causation)
- Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258 (1992) (proximate-cause/directness requirement in RICO/antitrust context)
- Dura Pharm., Inc. v. Broudo, 544 U.S. 336 (2005) (proximate-cause principles in securities fraud)
- Nasser v. City of Homewood, 671 F.2d 432 (11th Cir. 1982) (Eleventh Circuit decision limiting FHA claims to injuries implicating racial interest; distinguished here)
- Inclusive Cmtys. Project, Inc. v. Tex. Dep’t of Hous. & Cmty. Affairs, 135 S. Ct. 2507 (2015) (disparate-impact claims are cognizable under FHA; courts must demand robust causation at prima facie stage)