A divided U.S. Supreme Court on Monday ruled in a key Fair Housing Act case that Miami has standing to claim in court that it was harmed by the discriminatory lending practices of banks—but it must meet a high standard of proof to establish causation.
The 5-3 ruling found that Miami’s damages—including diminished property taxes and higher costs of city services—fell within the “zone of interest” of the housing law.
Justice Stephen Breyer, writing for the majority and emphasizing longstanding court precedents, wrote, “We hold that the City’s claimed injuries fall within the zone of interests that the FHA arguably protects. Hence, the City is an ‘aggrieved person’ able to bring suit under the statute.”
But the decision in the consolidated cases of Bank of America v. City of Miami and Wells Fargo & Co. v. City of Miami was not a total win for Miami. Breyer said plaintiffs in a suit like Miami’s must prove more than just the foreseeability of the injuries to establish a causal relationship between the banks’ actions and the harms suffered by the city. The court remanded the case back to the Eleventh Circuit, which ruled in favor of the city.
Miami argued that the purpose of the Fair Housing Act, which confers standing in private litigation to “aggrieved persons,” established standing for cities, not just individual homeowners.
Chief Justice John Roberts Jr. joined liberal justices Breyer, Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan in the majority. Justice Clarence Thomas dissented in part, joined by justices Anthony Kennedy and Samuel Alito Jr. Justice Neil Gorsuch did not participate in the case, adhering to the tradition that justices do not vote in cases that were argued before they joined the court. The Miami case was argued last November 8, Election Day.
In his partial dissent, Thomas wrote, “I would hold that Miami’s injuries fall outside the FHA’s zone of interests. I would also hold that, in any event, Miami’s alleged injuries are too remote to satisfy the FHA’s proximate cause requirement.”
Miami’s lawyer, Robert Peck of the Center for Constitutional Litigation, told the high court in his brief, “When housing discrimination occurs on a widespread basis within a city, it diminishes tax revenues while demanding disproportionate amount of resources, diverting law enforcement, fire departments, and building and safety efforts, and endangering the entire community.”
Neal Katyal of Hogan Lovells, who argued for the banks targeted by Miami, countered by telling the court during argument, “The city has to identify an anti-discrimination interest they have suffered,” Katyal told the court. “They can’t cut and paste and borrow someone else’s.”
Katyal acknowledged that cities could sue under the housing law in certain narrow circumstances such as when a city has to spend money to make a case against a specific discriminatory lender, or where the predatory practices result in segregating a community.
But Kagan and other justices sounded convinced during the argument that the Fair Housing Act was meant to give broad power to sue. “The FHA is a very peculiar and distinctive kind of anti-discrimination statute, which really is focusing on community harms,” she told Katyal. “So it’s not just individuals who are harmed; it’s communities who are harmed. And that’s the basic idea of the entire statute, why Congress passed it.”
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