Wells Fargo and Bank of America on Monday filed briefs with the Supreme Court in a lawsuit brought by the City of Miami, alleging that the banks engaged in discriminatory lending practices that resulted in reduced property tax revenues. The complaints were originally dismissed by a Miami federal district court but were reversed by the Eleventh Circuit, which stated Miami had standing under the Fair Housing Act to sue the banks because the city demonstrated a nexus between the alleged injuries and the banks’ conduct. The Supreme Court decided to take up the case earlier this summer.
The banks argued that the City of Miami’s claim is a purely financial injury remotely derived from alleged discrimination against others. In their respective briefs, both banks pointed out that the city’s claims are “outside the [FHA’s] statutory zone of interest,” since the FHA was intended to provide financial recovery for individuals who suffered discrimination or were forced to live in segregated communities, not municipalities. They further argued that Miami’s suit also fails the FHA’s “proximate case” requirement, “because the link from loan to default, to foreclosure, to vacancy, to blight, to lower property values, to strained municipal budgets are simply too attenuated,” as the Bank of America brief stated.
ABA and several financial and housing groups previously filed a friend-of-the-court brief in this case in support of the banks, arguing that the Eleventh Circuit adopted an overbroad view of FHA standing to allow municipalities to sue over economic injuries. ABA argued that this interpretation was neither “necessary nor appropriate” to enforce the FHA’s anti-discrimination objectives.
