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[PUBLISH]
No. 14-14544
Non-Argument Calendar
________________________
CITY OF MIAMI,
a Florida municipal corporation,
Plaintiff - Appellant,
versus
Defendants - Appellees.
________________________
No. 14-14543
Non-Argument Calendar
________________________
CITY OF MIAMI,
a Florida Municipal Corporation,
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Plaintiff - Appellant,
versus
Defendants - Appellees.
________________________
(May 3, 2019)
This pair of ambitious fair housing lawsuits brought by the City of Miami
against major financial institutions returns to our Court after having been appealed
to the Supreme Court and resolved there in Bank of American Corp. v. City of
Miami, 137 S. Ct. 1296 (2017). Miami alleges that, for years, the defendant
that intentionally targeted black and Latino Miami residents for predatory loans.
*
Honorable Harvey E. Schlesinger, United States District Judge for the Middle District of
Florida, sitting by designation.
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substantially reduced tax revenue for the City, and increased expenditures by the
City for municipal services. When we first heard these cases, we determined that
Miami had standing under the Fair Housing Act, and that it had adequately pled
proximate cause. See City of Miami v. Bank of Am. Corp., 800 F.3d 1262 (11th
Cir. 2015); City of Miami v. Wells Fargo & Co., 801 F.3d 1258 (11th Cir. 2015).
The Supreme Court agreed in part. It resolved the hotly contested standing issue in
the City’s favor, but vacated and remanded with regard to proximate cause. See
The Court held that the standard that this panel had applied -- foreseeability -
- was not enough on its own to demonstrate proximate cause. Id. at 1306. Instead,
the Court said that proximate cause under the FHA also required “some direct
relation between the injury asserted and the injurious conduct alleged.” Id. at 1306
(quotations omitted). But the Court declined to “draw the precise boundaries of
proximate cause under the FHA and to determine on which side of the line the
City’s financial injuries fall.” Id. It remanded the case, preferring to leave this
issue open for percolation in the lower courts. See id. Today, we take up the
question of how the principles of proximate cause identified by the Court’s opinion
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function when applied to the FHA and to the facts as alleged in the City’s
complaints.
At this preliminary stage in the lawsuit, we conclude that the City has
adequately pled proximate cause in relation to some of its economic injuries when
the pleadings are measured against the standard required by the Fair Housing Act.
Proximate cause asks whether there is a direct, logical, and identifiable connection
between the injury sustained and its alleged cause. If there is no discontinuity to
call into question whether the alleged misconduct led to the injury, proximate
cause will have been adequately pled. The question for now is whether, accepting
the allegations as true, as we must, the City has said enough to make out a
plausible case -- not whether it will probably prevail. Considering the broad and
ambitious scope of the FHA, the statute’s expansive text, the exceedingly detailed
feasibility factors laid out by the Supreme Court in Holmes v. Securities Investor
Protection Corp., 503 U.S. 258 (1992), we are satisfied that the pleadings set out a
plausible claim.
The City’s pleadings meet this standard because Miami has alleged a
substantial injury to its tax base that is not just reasonably foreseeable, but also is
necessarily and directly connected to the Banks’ conduct in redlining and reverse-
redlining throughout much of the City. This injury plausibly bears “some direct
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relation” to the claimed misconduct. Bank of Am., 137 S. Ct. at 1306. The injury
to the City’s tax base is uniquely felt in the City treasury, and there is no risk that
the City is in the best position. Indeed only the City can allege and litigate this
peculiar kind of aggregative injury to its tax base. Simply put, a lawsuit
the same citywide scale that the alleged misconduct took place on.
However, the City’s pleadings fall short of sufficiently alleging “some direct
municipal services. The complaints fail to explain how these kinds of injuries --
increases in police, fire, sanitation, and similar municipal expenses -- are anything
We do not mean to suggest that the City’s claims are destined to succeed.
Many questions, and many difficult questions, remain and will have to be worked
out in the district court. At the motion to dismiss stage, though, we are not asking
whether the complaints meet any probability requirement, only whether they
plausibly allege violations of the FHA. Since we have found that they do, we
allow this discrete portion of the City’s claims to proceed for now. The plaintiff
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has said enough to get into the courthouse and be heard. We decide nothing more
today.
I. Background
On December 13, 2013, the City of Miami brought three complex civil
rights actions in the Southern District of Florida against several different financial
institutions. One suit was filed against Bank of America Corporation, Bank of
against Wells Fargo & Co. and Wells Fargo Bank, N.A. (collectively “Wells
Fargo”). For simplicity, we refer to all these defendants jointly as “the Banks.”
These were accompanied by another similar case against Citigroup, Inc. and
related institutions. See City of Miami v. Citigroup, Inc., 801 F.3d 1268 (11th Cir.
2015). The first time this panel considered this set of cases, we heard the Citigroup
case as well, but that case was not appealed to the Supreme Court. It has returned
to the district court, where it has been stayed pending resolution of the other two.
See Order Staying Case Pending the Supreme Court’s Disposition of Matters Now
Before the Court, City of Miami v. Citigroup Inc., No. 13-cv-24510 (S.D. Fla. July
13, 2016). As a result, our opinion today concerns only Bank of America and
Wells Fargo.
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The City alleged in considerable detail that the Banks had violated § 3604(b)
and § 3605(a) of the Fair Housing Act. The first of these provisions makes it
national origin.” 42 U.S.C. § 3604(b). The second states that “[i]t shall be
unlawful for any person or other entity whose business includes engaging in
national origin.” Id. § 3605(a). The City alleged that the Banks had violated these
1
The City also alleged that the Banks unjustly enriched themselves by taking advantage of
“benefits conferred by the City” at the same time that they engaged in unlawful lending practices
which “denied the City revenues it had properly expected through property and other tax
payments and . . . cost[] the City additional monies for services it would not have had to
provide . . . absent [the Bank’s] unlawful activities.” Wells Fargo, 801 F.3d at 1261 (quoting
Complaint for Violations of the Federal Fair Housing Act at 61, City of Miami v. Wells Fargo &
Co., No. 13-24508-CIV (S.D. Fla. July 9, 2014), 2013 WL 6903725); Bank of Am., 800 F. 3d at
1267; see also Complaint for Violations of the Federal Fair Housing Act at 52–55, City of Miami
v. Bank of Am. Corp., No. 13-24506-CIV (S.D. Fla. July. 9, 2014), 2013 WL 6903721 (raising
the same claims and allegations). The district court held that these claims failed. City of Miami
v. Bank of Am., No. 13-24506-CIV, 2014 WL 3362348 at *6–7 (S.D. Fla. July 9, 2014). We
affirmed, Bank of Am., 800 F.3d at 1287; Wells Fargo, 801 F.3d at 1267, and the City did not
appeal these claims to the Supreme Court. Accordingly, they are no longer in this case.
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The City said the Banks made a practice of systematically and intentionally
refusing to extend credit to minority borrowers on the same terms as they would
extend credit to non-minority borrowers and, when they did extend credit to
than the terms non-minorities received. First Amended Complaint for Violations
of the Federal Fair Housing Act at 2–5, City of Miami v. Bank of Am., No. 13-cv-
24506 (S.D. Fla. Sept. 9, 2014) (“BoA FAC”); First Amended Complaint for
Violations of the Federal Fair Housing Act at 2–5, City of Miami v. Wells Fargo &
Co., No. 13-cv-24508 (S.D. Fla. Sept. 9, 2014) (“WF FAC”). 2 This amounted to
2
The operative complaints for our purposes are the First Amended Complaints in both cases. As
we explain, infra, the City appealed the denial of motions in both cases asking the district court
to reconsider the dismissal of its initial Complaints and to grant leave to file the First Amended
Complaints. After this panel reversed the decisions in September 2015, litigation proceeded in
the district court for some months before the Supreme Court granted the Banks’ petitions for
certiorari in June 2016. On remand from this Court, the City filed what it styled “Second
Amended Complaints,” (even though the First Amended Complaints had not technically been
filed), and both of these were dismissed on multiple grounds, but with leave to amend. Order
Granting Motion to Dismiss Second Amended Complaint, Bank of Am., No. 13-cv-24506 (Mar.
17, 2016) (No. 98); Order Granting Motion to Dismiss Second Amended Complaint, Wells
Fargo, No. 13-cv-24508 (Mar. 17, 2016) (No. 77). By the time the Supreme Court granted the
petition for certiorari, the City had filed Third Amended Complaints, and both Banks had moved
to dismiss these as well. See Defendants’ Motion to Dismiss Third Amended Complaint with
Prejudice and Request for Hearing, Bank of Am., No. 13-cv-24506 (May 16, 2016) (No. 103);
Wells Fargo’s Motion to Dismiss with Prejudice the City’s Third Amended Complaint and
Request for Hearing, Wells Fargo, No. 13-cv-24508 (May 24, 2016) (No 83). Both cases were
then stayed pending resolution in the Supreme Court. Order Staying Case Pending the Supreme
Court’s Disposition of Matters Now Before the Court, Bank of Am., No. 13-cv-24506 (July 13,
2016) (No. 128); Order Granting Unopposed Motion to Stay Further Proceedings Pending the
Supreme Court’s Disposition of Matters Now Before the Court, Wells Fargo, No. 13-cv-24508
(July 13, 2016) (No. 102). Since nothing had been appealed since the Second and Third
Amended Complaints were filed, the Supreme Court was explicit that it was looking to the First
Amended Complaints, see Bank of Am., 137 S. Ct. at 1301, and we do the same on remand.
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credit on worse terms). Black and Latino borrowers were thus unable to refinance
their loans effectively. BoA FAC at 4; WF FAC at 4; see also Wells Fargo, 801
F.3d at 1261; Bank of Am., 800 F. 3d at 1267. The City’s complaints detailed at
“abusive” because they resulted in loans with “unfair terms that [borrowers] could
not afford.” BoA FAC at 13; WF FAC at 11; see, e.g., BoA FAC at 22 (explaining
(same).
The City claims that these policies were entirely deliberate on the part of the
employees at both Bank of America and Wells Fargo -- will testify to how
loan terms. E.g., BoA FAC at 19; WF FAC at 29. Moreover, witnesses allegedly
will testify that Wells Fargo specifically targeted Latino and African American
community groups and churches (but never white churches) and that employees
were assigned based on their race to make presentations to these groups. WF FAC
at 30. Witnesses from Bank of America likewise will testify that they were
toward loan products that were decidedly unfavorable to the customer and different
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from loan products offered to white applicants, but highly favorable to the bank.
According to the City, all of this violated the FHA in two stages. To start,
for burdensome loans. This had a disparate impact on minority borrowers, leading,
Latino Miami neighborhood was 5.857 times more likely to result in foreclosure
26. For a minority-neighborhood loan from Wells Fargo, foreclosure was 6.975
times more likely. WF FAC at 39. Further calculations indicated that, controlling
for credit history and other factors, a black Miami borrower was 1.581 times more
likely than a white borrower to receive a predatory loan from Bank of America and
4.321 times more likely to receive one from Wells Fargo. BoA FAC at 22; WF
FAC at 34. A Latino borrower was 2.087 times more likely to receive such a loan
from Bank of America and 1.576 times more likely to receive one from Wells
Fargo. BoA FAC at 22; WF FAC at 34. Notably, even among borrowers with
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good credit (FICO scores over 660), black borrowers were 1.533 and 2.572 times
more likely to receive a predatory loan from Bank of America and Wells Fargo,
respectively. BoA FAC at 22; WF FAC at 34. For Latino borrowers with good
credit, the figures were 2.137 and 1.875 times more likely. BoA FAC at 22; WF
The complaints further alleged that the Banks’ lending practices resulted in
FAC at 41. White borrowers’ average time from origination to foreclosure was
3.448 years for a Bank of America loan or 3.266 years for a Wells Fargo loan; for
black and Latino borrowers the averages were 3.144 (black) and 3.090 (Latino)
years from Bank of America and 2.996 (both black and Latino) from Wells Fargo.
BoA FAC at 28; WF FAC at 41. Confidential witnesses from both Banks will
allegedly support the claims that each had deliberately targeted black and Latino
borrowers for predatory loans. E.g., BoA FAC at 19–21; WF FAC at 30–31.
What’s more, according to the complaints, the Banks’ misconduct was not
limited to loan origination but instead continued almost to the point of foreclosure.
As the Supreme Court noted, Bank of Am., 137 S. Ct. at 1301, the predatory
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practices alleged by the City included denying black and Latino customers
FAC at 21; WF FAC at 32. According to the complaints, both Banks would cause
sought to refinance the loan, only to discover that [the bank] refused to extend
4. We note that such refinancing and loan modification decisions can occur before
The City alleged that it suffered both economic and noneconomic injuries.
noneconomic injury was that the Banks’ conduct “adversely impacted the racial
composition of the City and impaired the City’s goals to assure racial integration
and desegregation and the social and professional benefits of living in an integrated
society.” 3 BoA FAC at 31; WF FAC at 44. The City identified two forms of
economic injuries. It claimed damages from each bank based on reduced property
tax revenues, arguing that the Banks’ lending policies caused minority-owned
3
Because we find that the City adequately pled proximate cause for one of its economic injuries,
we need not evaluate whether it also did so for its noneconomic injuries. The parties in their
briefing have not squarely addressed these injuries, and the Supreme Court had little to say about
them. We leave this matter to the district court to address in the first instance.
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BoA FAC at 32–34; WF FAC at 45–47. This reduced the City’s tax base and the
tax revenue it took in. According to the City, “Hedonic regression” techniques
could be used to quantify with considerable particularity what portion of its losses
was attributable to the Banks’ conduct. BoA FAC at 32–34; WF FAC at 45–47.
Additionally, the City claimed damages based on the cost of the increased
debris collectors, and others. These increased services too, the City claimed,
would not have been necessary if the properties had not been foreclosed upon as a
FAC at 47–48.
The City also asked for a declaratory judgment stating that the Banks’
conduct violated the FHA, an injunction barring the Banks from engaging in
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(S.D. Fla. July 9, 2014). The court determined first that the City lacked standing
F.2d 432 (11th Cir. 1982), its claims fell outside the “zone of interests” protected
by the FHA. Bank of Am., 2014 WL 3362348 at *3–4. Miami had alleged
“merely economic injuries” that were not “affected by a racial interest.” Id. at *4.
The trial court also determined that the FHA contained a proximate cause
requirement, and that this requirement had not been met because the City failed to
“demonstrate that the [Banks’] alleged redlining and reverse redlining caused the
foreclosures to occur.” Id. at *5. According to the district court, the City should
have “allege[d] facts that isolate [the Banks’] practices as the cause of any alleged
lending disparity.” Id. Additionally, the district court said that the FHA claims fell
The City moved for reconsideration and for leave to file amended
complaints in both cases, arguing that it had standing and that it could remedy the
statute of limitations issue by amending the complaint. See Bank of Am., 800 F.3d
4
The court issued a detailed opinion in the Bank of America case. It then adopted and incorporated
that opinion in the Wells Fargo case. City of Miami v. Wells Fargo & Co., No. 13-24508-CIV
(S.D. Fla. July 9, 2014).
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at 1271; Wells Fargo, 801 F.3d at 1264. The amended complaints added further
Banks’ discriminatory lending practices. See BoA FAC at 31; WF FAC at 44.
The City also argued in its amended complaints that predatory lending had
“adversely impacted the racial composition of the City,” “impaired the City’s goals
community.” BoA FAC at 31; WF FAC at 44. The district court denied the
motion, and the City appealed to this Court. Bank of Am., 800 F.3d at 1271; Wells
which we issued in City of Miami v. Bank of America Corp., 800 F.3d 1262 (11th
Cir. 2015). We began by addressing standing and held that the City had alleged an
injury in fact sufficiently concrete and immediate to confer Article III standing. Id.
concerns “whether the plaintiff has a cause of action under the statute.” Id. at 1273
(quotation omitted). We determined that this plaintiff did because the key statutory
language “swe[pt] as broadly as allowed under Article III” and placed the City
within the statute’s zone of interests. Id. at 1278; see also Trafficante v. Metro
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Life Ins. Co., 409 U.S. 205, 209 (1972) (identifying “a congressional intention to
We next held that the FHA did require proximate cause, but that the City’s
pleadings were adequate. Bank of Am., 800 F.3d at 1279–80, 1283. We rejected
the idea that the City needed to “allege that the [Banks’] actions directly harmed
the City.” Id. As we saw it, the “strict directness requirement” suggested by the
Banks could not be the proper standard for the FHA because it “would run afoul of
Supreme Court and Eleventh Circuit caselaw allowing entities who have suffered
indirect injuries . . . to bring a claim under the FHA.” Bank of Am., 800 F.3d at
1281 (citing Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 109–11
(1979) (allowing a village to sue a firm for discriminatory practices that caused
segregation); Havens Realty Corp. v. Coleman, 455 U.S. 363, 378–79 (1982)
Lauderhill, 873 F.2d 1407, 1408–09 (11th Cir. 1989) (allowing a non-minority
said, was “not a one-size fits-all analysis.” Id. Rather, it “can differ statute by
statute.” Id.
Instead, noting the Supreme Court’s “broad and inclusive” readings of the
FHA, e.g., Trafficante, 409 U.S. at 209, we agreed with the City that the proper
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claims under the FHA were analogous to tort claims, we reasoned, and tort law had
relationships and to limit the expansion of liability. See id. at 1282. The City had
met this standard; “it claim[ed] that the [Banks’] discriminatory lending caused
property owned by minorities to enter premature foreclosure, costing the City tax
revenue and municipal expenditures.” Id. at 1282. We said that “[a]lthough there
are several links in that causal chain, none are unforeseeable,” and also noted that
the regression analyses in the complaints made the pleadings more than just
speculative. Id. We made no comment, though, on “whether the City will be able
to actually prove its causal claims.” Id. at 1283 (emphasis added). That would be
worked out in the district court on a factual basis far beyond the four corners of the
Bank of America and Wells Fargo each filed petitions for certiorari, which
whether the City had a cause of action under the FHA. Bank of Am., 137 S. Ct. at
1302–05. The Court agreed that its previous cases had interpreted the statute
broadly for standing purposes. See id. Congress had even amended the statute
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after these decisions, without making any change to the relevant language,
indicating its assent to the Court’s expansive reading of the original text. Id. at
1303–04.
On proximate cause, though, the Supreme Court disagreed with this panel
was not a sufficiently rigorous standard. See id. at 1306 (“[T]he Eleventh Circuit
the FHA.”). The Court explained that “foreseeability alone does not ensure the
close connection that proximate cause requires.” Id. Since lending and housing
policies are deeply interconnected with “economic and social life,” the Court said
that “[a] violation of the FHA may . . . ‘be expected to cause ripples of harm to
flow’ far beyond the defendant’s misconduct.” Id. (quoting Assoc. Gen.
Contractors of Cal., Inc. v. Carpenters, 459 U.S. 519, 534 (1983)). Since
wherever those ripples travel,” foreseeability alone could not be enough. Id.
While the Court was clear that foreseeability was not enough, it was less
definitive when it came to laying out what more FHA proximate cause required.
The Court remanded for further proceedings, stating that “[t]he lower courts
should define, in the first instance, the contours of proximate cause under the FHA
and decide how that standard applies to the City’s claims for lost property-tax
revenue and increased municipal expenses.” Id. Lacking “the benefit of [the
Eleventh Circuit’s] judgment” on how to apply the principles it had laid out, and
with no other circuits having weighed in yet, the Court “decline[d]” to speak first.
Id.
complaints, to determine if they plausibly state a claim under the Fair Housing Act.
“accepting the factual allegations in the complaint as true and construing them in
the light most favorable to the plaintiff.” Boyd v. Warden, Holman Corr. Facility,
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856 F.3d 853, 863–64 (11th Cir. 2017); see also Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). Here, the district court also denied leave to amend, which we
generally review for abuse of discretion; however, when, as here, leave to amend
was denied “on the grounds of futility,” we review the denial de novo “because it
is a conclusion of law that an amended complaint would necessarily fail.” Id. (“An
amendment is considered futile when the claim, as amended, would still be subject
amended complaints, which the district court declined to entertain, have stated a
claim. This is in line with the review conducted by the Supreme Court, Bank of
Am., 137 S. Ct. at 1302, and with our review when we first heard these cases,
For this case to proceed past a motion to dismiss, we need not find that the
Banks’ actions in fact proximately caused the plaintiff’s injuries; we must find that
the City plausibly alleged that they did so. We evaluate whether each complaint
on its face.’” Iqbal, 556 U.S. at 678 (quoting Bell Atlantic Corp. v. Twombly, 550
“probability requirement.” Id. Still, plausibility requires that allegations push past
the line of showing “a sheer possibility” and “[w]here a complaint pleads facts that
are ‘merely consistent with’ a defendant’s liability, it ‘stops short of the line
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Twombly, 550 U.S. at 557). Facts are taken as true so long as they are not a
III. Analysis
nothing in the entire field of law which has called forth more disagreement, or
upon which the opinions are in such a welter of confusion.” W. Page Keeton et al.,
Prosser and Keeton on the Law of Torts § 41, at 263 (5th ed. 1984). The Supreme
Court has not directed the lower courts to propose a sweeping standard for
proximate cause that would apply across all cases or to define the word “direct” for
all time. Indeed, we are not looking for (and could not find) “a black-letter rule
that will dictate the result in every case.” Holmes, 503 U.S. at 272 n.20. Rather,
draw the line for this particular cause of action and these particular claims. As the
Court has said, proximate cause “label[s] generically the judicial tools used to limit
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Proximate cause under the FHA certainly requires foreseeability, which is present
here but is not enough. See Bank of Am. 137 S. Ct. at 1305–06. Proximate cause
also requires “some direct relation between the injury asserted and the injurious
conduct alleged.” Id. at 1306 (quoting Holmes, 503 U.S. at 268). Our task today
relation” and to evaluate whether the City’s complaints have met that standard.
At the outset, we consider the central phrase “some direct relation.” There is
give in the joints between “some direct relation” and “some direct causation.”
These are not identical concepts, and so when, for example, Bank of America
suggests that Miami’s injuries “were not caused ‘directly’ by a loan,” it may not be
presenting the question in a way that precisely and accurately reflects the Court’s
instruction. We might agree that the injuries were not “caused directly by a loan”
and yet still find “some direct relation” between the injury and the statutory
is “to serve as cause or occasion of” or “to bring [it] into existence.” Webster’s
Third New International Dictionary 356 (2002). Relation, on the other hand is “the
mode in which one thing or entity stands to another, itself, or others,” or “a logical
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and ensures some causal connection. “Some direct relation,” then, works to
guarantee that there is a “logical bond” between violation and injury. Put another
way, while foreseeability ensures “cause,” “some direct relation” ensures that the
Further, the law requires “some direct relation” not any quantifiable amount
degree.” Id. at 2171. The requirement is therefore somewhat easier to meet than if
We are also aware that our analysis must be tied to the Fair Housing Act in a
specific way. The Supreme Court twice emphasized that the policy judgments that
shape our proximate cause analysis will necessarily depend on the FHA. For
starters, “what falls within [the] ‘first step,’” to which proximate cause is
cause of action.’” Bank of Am., 137 S. Ct. at 1306. Second, our task is to “define,
in the first instance, the contours of proximate cause under the FHA and” to apply
can find “some direct relation,” a meaningful and logical continuity, between the
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City’s tax revenue injury and the Banks’ conduct by following the four guiding
“what falls within [the] ‘first step’” of the causal chain, as we are aware of “‘[t]he
general tendency’ in these cases . . . ‘not to go beyond [that] first step.’” Id.
(quoting Hemi Grp., 559 U.S. at 10). What falls within the first step will, we’re
told, depend on (b) “the nature of the statutory cause of action,” and (c) “an
the common law is the basis for the direct relation requirement, we also look to (d)
the FHA’s common-law antecedents to the extent that we can. Id. We consider
The Court has also told us that “[t]he general tendency in these cases, in
regard to damages at least, is not to go beyond the first step.” Bank of Am. 137 S.
Ct. at 1306 (quotations omitted). Both Banks, in their briefing on remand, make
much of this “first step” analysis. It is clear, though, that proximate cause does not
always cut off at the first step after a violative act. A general tendency is not the
same as a hard and fast rule that dictates the outcome in every case, and Supreme
Court precedent shows that an intervening step will not vitiate proximate cause in
all instances. What is more important, precedent reveals, is the certainty with
which we can say the injury is fairly attributable to the statutory violation. An
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extended causal chain often makes attribution more difficult, but may not be the
final word.
1.
Supreme Court precedent makes crystal clear that an intervening step does
not necessarily mean proximate cause has not been plausibly alleged. Lexmark
International, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377 (2014), is a
good starting point precisely because the chain of causation there was complex and
involved more than one simple step. The basic facts were these: Lexmark
manufactured and sold both laser printers and toner cartridges for those printers.
Lexmark, 134 S. Ct. at 1383. Other companies would buy used cartridges, then
refurbish and resell them. Id. The plaintiff company, Static Control, made and
sold the components that the refurbishers needed to operate. Id. at 1384. Lexmark
would have preferred that its customers return used cartridges directly to Lexmark,
so that it could refurbish and resell them itself. See id. at 1383. Static Control
sued under the Lanham Act, alleging that Lexmark falsely and misleadingly led
Lexmark’s customers to believe that they were legally obligated to return spent
cartridges to Lexmark and also led the refurbishers to believe that their businesses
were illegal. Id. at 1384. This, said Static Control, violated the Lanham Act’s
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proximate cause. See id. at 1385, 1390. The central question was “whether the
harm alleged has a sufficiently close connection to the conduct the statute
prohibits.” Id.
conduct and the harm sustained by Static Control was not fatal to the claim. Id. at
1391. The Court said that a Lanham Act plaintiff could demonstrate proximate
cause by “show[ing] . . . injury flowing directly from the deception wrought by the
them to withhold trade from the plaintiff.” Id. (emphasis added). Common-law
principles supported the idea that “a plaintiff [could] be directly injured” even
when a misrepresentation was made to a third party. Id. Liability was not without
limits, though. A company injured only by a third party’s “inability to meet [its]
“general tendency” not to go “beyond the first step.” Id. at 1394; see Bank of Am.,
137 S. Ct. at 1306. In the circumstances presented by Lexmark, though, the nature
of the conduct and the harm sustained persuaded the Court against following this
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general tendency. See Lexmark, 134 S. Ct. at 1394. The Court explained its
Id. (quoting Anza, 547 U.S. at 458–59). This “discontinuity” is evaluated in terms
of logical relations and policy judgments. See Anza, 547 U.S. at 459–60. In
Lexmark, if the refurbishers sold fewer cartridges, “it would follow more or less
automatically” that Static Control suffered a proportional injury, “without the need
connection between Static Control and the remanufacturers it supplied. “Any false
Control as well.” Id. There was “something very close to a 1:1 relationship”
between harm to remanufacturers and harm to Static Control because the false
advertising hurt Static Control in direct proportion to how much it hurt the
remanufacturers. Id. In other words, harm to Static Control was “so integral an
aspect of the [violation] alleged” that the Court went beyond the first step in the
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injury flowing directly from the [defendant’s] deception.” Id. at 1391. This
requirement would not be met “when the deception produces injuries to a fellow
commercial actor that in turn affect the plaintiff.” Id. By way of example, the
advertising could sue the false advertiser, but that competitor’s landlord could not
sue the false advertiser for the value of rent payments he could no longer collect.
See id. The landlord’s injury suffered from a “discontinuity” that Static Control’s
All of this goes to show that intervening steps in a causal chain cannot
automatically and invariably end the analysis. If they could, there would be no
meaningful way to distinguish Static Control from the hypothetical landlord. Each
is only injured if the defendant’s direct competitor (the refurbishers on the actual
facts of the case) is injured first. The chain of causation is an important part of the
analysis, but the real deciding factor, at least for this Lanham Act case, was
whether there was a discontinuity between violation and injury, or, put another
way, whether the injurious conduct “necessarily injured [the plaintiff] as well” as
the first-step victim, in such a way that the first-step victim was “not [a] more
immediate victim[]” than the plaintiff. Id. Thus we may look to whether the injury
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is “surely attributable” to the statutory violation; we do not simply count the steps
Bridge v. Phoenix Bond & Indemnity Co., 553 U.S. 639 (2008), a RICO
mail fraud case, makes the same point. In a suit between bidders at County-
operated tax lien auctions, the defendants were accused of filing fraudulent
documents in order to increase their success at the auctions at the expense of the
plaintiffs. See Bridge, 553 U.S. at 642–44. To the extent that a chain of causation
was discussed at all, it was explained in terms of reliance. See id. at 657–58. The
defendants argued that the County, not the plaintiffs, had relied on their
misrepresentations. Id. at 648. The Court held that the plaintiffs’ injuries were
plaintiffs had not themselves relied on the fraudulent filings -- “first-party reliance”
was not “necessary to ensure that there was a sufficiently direct relationship
between the defendant’s wrongful conduct and the plaintiff’s injury” to satisfy
and injury that was non-formalistic and disconnected from step-counting. The
common-law principles, see id. at 656–57. The Court never mentioned a “first
step” default rule, but it’s clear that the plaintiffs’ harm would not have fallen in
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the first step, since the County had to rely on the defendants’ misrepresentations
and then had to conduct auctions on these fraudulent terms before the plaintiffs
could be injured. Instead, Bridge observed that the Second Restatement of Torts
“does not say that only those who rely on the misrepresentation” -- that is, those at
the front of the chain of causation -- “can suffer a legally cognizable injury.”
Bridge, 553 U.S. at 656 (citing 3 Restatement (Second) of Torts §548A (1976)).
While neither Lexmark nor Bridge arose under the FHA, their approach to
the first-step rule is instructive. Both decisions acknowledge that “under common-
where” someone else relied on it. Lexmark, 134 S. Ct. at 1391 (citing Bridge, 553
Blue Shield of Virginia v. McCready, 457 U.S. 465, 482–84 (1982) (discussing
2.
Turning to our case, the Banks argue that the City fails to allege proximate
cause simply because its injuries fall outside of the “first step.” So wooden a rule
would be inconsistent with precedent as well as with the oft-noted statement that,
letter rule that will dictate the result in every case.” Assoc. Gen., 549 U.S. at 536
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(citing Blue Shield, 457 U.S. at 477 n.13; Palsgraf v. Long Island R. Co., 162 N.E.
99, 103 (N.Y. 1928) (“[W]hat is a proximate cause, depend[s] in each case upon
many considerations . . . .”) (Andrews, J., dissenting)); see also Lexmark, 134 S.
Ct. at 1390 (“The proximate-cause inquiry is not easy to define . . .”); Bridge, 553
Holmes, 503 U.S. at 272 n.20. Proceeding beyond a first step here is consistent
with the instruction that we stop at the first step only as a “general tendency,” and
that we also consider the nature of the cause of action, principles of continuity, and
Wells Fargo nevertheless argues that the City’s claims cannot survive
proximate cause analysis because they are wholly “contingent,” and points to
example of a case where proximate cause failed “because the [plaintiffs’] injuries
were ‘purely contingent on the harm suffered by [third parties].’ [Holmes, 503
U.S.] at 271.” But Holmes established no such rule. Rather, it explicitly identified
Holmes, 503 U.S. at 269. We discuss these in considerable detail, infra, but for
now it is enough to observe that contingency on third parties is not among them.
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The Court would have had no recourse to policy considerations if it could have
Indeed, if Wells Fargo were right about the application of the first-step rule
here, this case would be over at the pleading stage simply because the chain of
causation involves more than a single step. And there would have been no reason
for the Supreme Court to remand this case back to our Court for further proximate
cause analysis. The Supreme Court, too, was obviously aware that individual
homeowners were involved in this case. Again, if that alone were enough to bar
proximate cause, the Court would hardly have sought the input of the lower federal
courts. The essential point for us then is that the “general tendency” to stop at the
If, in fact, there were a hard and fast “only the first step” rule limiting
predatory bank loan that violated the Fair Housing Act would never be able to
plausibly allege that the foreclosure was proximately caused by the bank’s
predation. By the Banks’ lights, there are two critical steps in the chain of
5
We also reject the application of Anza v. Ideal Steel Supply Corp, 547 U.S. 451, 457 (2006),
that Wells Fargo has offered in its briefing on remand. It cites Anza for its proposed rule that
proximate cause cannot exist where the causes of a plaintiff’s injury are distinct from the
violative conduct. But this amounts to simply assuming the answer to our question. Whether the
causes of the City’s injury are too distinct and too remote from the violative conduct is at the
heart of the proximate cause inquiry. Furthermore, the Bank’s suggested rule overlooks that
Anza applied the factors drawn from Holmes. Anza, 547 U.S. at 459–60.
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causation between the act of redlining and foreclosure: the middle and distinct step
being a homeowner’s default. So inexorable a rule would even bar the homeowner
from seeking redress for the foreclosure under the FHA, since the foreclosure only
occurs after the homeowner takes the independent step of failing to make payments
If, arguendo, we were to count steps, the Banks’ arguments would still be
unconvincing. For starters, the Banks overstate the length of the causal chain by
reading the complaints unfavorably to the City, ignoring, among other things,
modifications to minority customers on fair terms” and that Wells Fargo “limit[ed]
the ability of minority borrowers to refinance out of the same predatory loans that
they previously received from the Bank.” BoA FAC at 21; WF FAC at 32. These
alleged torts and acts of redlining occurred after -- perhaps long after -- the bad
loans were originated, and may have occurred far down the causal chain, shortly
before foreclosure. To take one example of their step-counting, Wells Fargo says
that injury to the City from lost property-tax revenue falls six links down the causal
chain and depends on the actions of five independent parties. This count ignores
otherwise modify their loans, and instead counts only from the point of loan
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origination. Because loan modification and refinancing can occur after a borrower
defaults, FHA violations of this type could be far more closely connected to the
City’s lost revenue. At the very least there might only be one step between the
concomitant tax assessment of that property as comprising two distinct steps in the
causal chain and speculates that foreclosures are not carried out by the Banks
suggest that the Banks were involved in refinancing and loan modifications,
inferences in the City’s favor, this accounting fails to read the complaints in the
light most favorable to the City, as we must at the motion to dismiss stage.
animating the general tendency in tort to stop at the first step. We generally stop
there because, as the time frame is extended and the chain of causation becomes
more attenuated, additional variables (maybe even causes) may intervene, making
it more difficult to fairly attribute fault to the tortfeasor. As the Supreme Court put
it in this case, “the housing market is interconnected with economic and social
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life,” and “[a] violation of the FHA may . . . be expected to cause ripples of harm
to flow far beyond the defendant’s misconduct.” Bank of Am., 137 S. Ct. at 1306
(quotations omitted).
Thus, a further problem with the Banks’ count is that the variety of factors
loss of a job or spiking health care costs) all occur at the front end of the step-
counting, between the act or acts of redlining and the foreclosure, not later. Once
seems to us that the path to the City’s substantially decreased tax base is clear,
all the independent variables posited by the Banks occur before foreclosure. We
can identify the same kind of continuity here as in Lexmark: if the Banks’
massive scale, these injuries inflicted on multiple homeowners in the same city
must almost surely have injured the City as well. There is no discontinuity in this
portion of the causal chain. Thus, since the risks of multiple independent variables
after foreclosure are not likely, and are not many, even if we were to count steps in
the way the Banks have suggested, the principles animating the general first-step
rule do not support the Banks’ calculation of the post-foreclosure causal chain.
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many steps as possible. We might just as easily place the same injury at the second
or third step: First, a bank extends predatory loans in violation of the FHA.
Second, homeowners default. Third, the bank forecloses and the property values
plummet, necessarily reducing the City’s tax base and injuring its fisc. The chain
will be shorter still if struggling homeowners sought to refinance and then faced
swift foreclosures when fair terms were not extended. This count, which draws
inferences in favor of the City, is decidedly more appropriate for the motion to
dismiss stage. At the very least, the ease with which we can count far fewer steps
reinforces our view that step-counting is of limited value and cannot alone settle
The Supreme Court also instructs us to consider “the nature of the statutory
cause of action.” Id. As we see it, the FHA has a broad remedial purpose, is
the type of aggregative causal connection that the City has identified between the
Banks’ alleged misconduct and financial harm to Miami. Proximate cause is only
one means by which Congress sets the scope of liability. Thus, for example
“Congress might express limits by defining the parties who may sue, by using
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Proximate Cause, 88 Notre Dame L. Rev. 1199, 1236 (2013). The result,
especially for complex and repeatedly amended statutes like the FHA, is an
should be limited.” Id. To develop a proximate cause standard without taking the
full statutory scheme into account would be “to intrude upon” this web and to
Most obviously, the “[t]he language of the [FHA] is broad and inclusive.”
Trafficante v. Metro. Life Ins. Co., 409 U.S. 205, 209 (1972). It provides for suit
practice,” § 3602(i) (emphasis added). As we’ve said before, “‘any’ means all.”
Jones v. Waffle House, Inc., 866 F.3d 1257, 1267 (11th Cir. 2017) (emphases
added). This language facilitates suits by a broad range of potential plaintiffs, and
the Court has told us that it evinces not merely “a congressional intent to confer
standing broadly,” Bank of Am., 137 S. Ct. at 1303, but “a congressional intention
at 209. The Court has also noted that later Congresses amended the FHA with full
knowledge of the Court’s broad readings and without changing the language the
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The Fair Housing Act also prohibits a wide range of conduct. Thus, it is a
any of the same reasons. 42 U.S.C. § 3604(a)–(b). It also expressly forbids racial
Most relevant for the City’s claims, it is also “unlawful for any person or other
§ 3605(a). Again, this is far-reaching, and takes aim at discrimination that might
be found throughout the real estate market and throughout the process of buying,
The injury to the City is as valid and as cognizable under the FHA as the
injury to the homeowners. See Bank of Am., 137 S. Ct. at 1303 (finding the City
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has standing). And cities have been allowed to sue for similar injuries in the past,
alleged it was injured when segregative racial steering practices by two real estate
firms redounded to “the economic and social detriment of the citizens of [the]
village.” Id. at 95. The village said “racial steering effectively manipulate[d] the
certain races served to dramatically reduce the number of potential buyers. Id. at
impacted by this practice, including financial consequences. Id.; see id. at 111 &
n.24. Not only did the village have standing to challenge racial steering, but the
Court even said that “[a] significant reduction in property values directly injures a
municipality by diminishing its tax base.” Id. at 110–11 (emphasis added). The
phrase “directly injures” was not used in a causal sense, but nonetheless suggests
that the Court has not traditionally considered this type of injury to be overly
attenuated or nebulous.
Moving beyond the text, in evaluating proximate cause for a statutory cause
of action, the Court has repeatedly directed us to consider a statute’s remedial aims
-- Congress’s priorities in passing it. See, e.g., Blue Shield, 457 U.S. at 478
(considering “the relationship of the injury alleged with those forms of injury about
which Congress was likely to have been concerned”); see also Lexmark, 134 S. Ct.
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Cal., Inc. v. California State Council of Carpenters, 459 U.S. 519, 538 (1983)
(following Blue Shield in evaluating whether an injury fell “squarely within the
area of congressional concern,” (quoting Blue Shield, 457 U.S. at 484)); cf.
Holmes, 503 U.S. at 274 (“[W]e fear that RICO’s remedial purposes would more
were adopted).
The legislative history of the FHA is less detailed than most. Congress
were issued.” Rodney A. Smolla, Federal Civil Rights Acts § 3:10, at 546–47 (3d
ed. 2017). A legislative assistant who worked on the legislation recalled after the
Act’s passage that this was “a time when riots threatened to close down every
major city in the country,” and that the Act was presented as a response; it was
hoped that “the law as a teacher might overcome the ignorance and fear of whites
Washburn L. J. 149, 154 (1969). The legislative history that we do have and the
context in which the FHA arose both comport with a proximate cause standard that
can accommodate claims like the City’s. Thus, for example, the Supreme Court
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has recently recounted how, in response to the turmoil of the mid-60s, President
causes of the social unrest.” Tex. Dept. of Hous. & Cmty. Affairs v. Inclusive
Cmtys. Project, Inc., 135 S. Ct. 2507, 2516 (2015). “The Commission concluded
that ‘[o]ur Nation is moving toward two societies, one black, one white—separate
and unequal.’” Id. (quoting Report of the National Advisory Commission on Civil
Disorders 1 (1968)).
In passing the Fair Housing Act, Congress explicitly took aim at these broad
social ills -- maladies that were being felt on a citywide scale. Congress did not
ways the landscape of American cities. Senator Walter Mondale, the chief sponsor
of the bill that would become the FHA, explained that the Act was intended to end
The legislation’s goals were directed at the neighborhood level and indeed were
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114 Cong. Rec. 3421 (Feb. 20, 1968); see also id. at 3422 (“[I]n truly integrated
neighborhoods people have been able to live in peace and harmony -- and both
Negroes and whites are the richer for the experience.”). A co-sponsor asked, “As
segregation continues to grow . . . will not the cities which house the majority of
the nation’s industrial and commercial life find themselves less and less able to
cope with their problems, financially and in every other way?” Id. at 2988 (Feb.
14, 1968) (statement of Sen. Brooke). The legislation, as its sponsors saw it, was
designed to extend through chains of causation. Among other things, its sponsors
quite specifically referenced harm to a city’s tax base, arising out of discrimination
It does not go too far to suggest, at least at a high order of abstraction, that in
setting a standard for proximate cause the FHA looks far beyond the single most
that way would not be consonant with the powerful remedial purposes animating
the bill. The Act took aim at “the segregated neighborhood” in general, not just at
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This is all to say that, notwithstanding issues of proof that might arise later
in litigation, the FHA was written in broad terms and was aimed at broad
problems. We can discern no reason to think as a general matter that the City’s
claims are out of step with the “nature of the statutory cause of action” and the
Perhaps the most important step in the proximate cause analysis in this case
Am., 137 S. Ct. at 1306 (quoting Holmes, 503 U.S. at 268). This is because
which proximate cause standards necessarily depend. See Holmes, 503 U.S. at 268
small part, we conclude that the City has adequately -- that is to say, plausibly --
pled proximate cause because we find it entirely practicable and not unduly
inconvenient for the courts to handle damages like the City’s tax revenue injury.
Cases like this will never be among the simplest that our courts see, but the federal
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injuries, specifically the harm to its tax base. Since the City’s injuries are unique
to its treasury, no other plaintiff will plead the same injuries, or attempt to recover
the same funds. The City is in the best position to allege and litigate this peculiar
kind of injury, to deter future violations and, theoretically, to actually remedy its
distinctive injury.
In Holmes v. Securities Investor Protection Corp., 503 U.S. 258 (1992), the
RICO, 18 U.S.C. §§ 1962, 1961(1), (5). Holmes, 503 U.S. at 263. The case asked
whether SIPC, “neither a purchaser nor a seller of securities” could sue under
RICO even though its claims were, in essence, the same claims that could have
been brought by investors under Rule 10b–5, under which SIPC lacked standing.
RICO allows for a civil action by “[a]ny person injured in his business or
§ 1964(c)). SIPC claimed that it should be allowed to sue under this provision
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who did not purchase manipulated securities.” Id. at 270. The chain of causation
was thus the following: The defendants manipulated securities and broker-dealers
these manipulated securities, and their value plummeted when the fraud was
exposed. As a result, the broker-dealers could not meet their obligations to their
customers, including to some who had not even bought manipulated securities. It
was these nonpurchasing customers’ rights that SIPC argued it was subrogated to.
See id. at 270–71. Granting, “arguendo” that SIPC was subrogated as it claimed,
Holmes, 503 U.S. at 271, the Court found that “the conspirators’ conduct did not
was “one of [the] central elements” of “Clayton Act causation.” Holmes, 503 U.S.
at 269. First, less direct injuries are harder to attribute to a violation. Id. Second,
plaintiffs at different levels. Id. Third, directly injured plaintiffs usually can be
counted on to sue and deter wrongdoing. Id. at 269–70. All three reasons for
directness were said to apply “with equal force” to antitrust and RICO suits. Id. at
270. The Court then considered the reasons again in the context of the particular
claims and found that each indicated that SIPC’s claims fell outside the proper
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limits of proximate causation. Id. at 272–74. It would appear, from the Court’s
analysis, that these are not only reasons why “directness of relationship” is
required, but are also important factors against which to measure the directness of
the relationship.
When applied to the City’s claims against the Banks, these factors strongly
suggest that the City has plausibly alleged “some direct relation” between the
Banks’ alleged conduct and the injury to the City’s tax revenue. We cannot say the
same for the increased-expenditures injury, though. Here, we review how each of
the Holmes factors applies to the City’s economic injuries, distinguishing, when
Finally, we explain how the Holmes factors provide a clear means by which to
1.
Holmes’s first factor says that directness is required because “the less direct
an injury is, the more difficult it becomes to ascertain the amount of a plaintiff’s
Holmes, 503 U.S. at 269. In Holmes, this factor decidedly cut against finding a
sufficiently direct relationship because it would have required the district court “to
from the broker-dealers was the result of the alleged conspiracy to manipulate, as
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opposed to” any other reasons why the broker-dealers might not have money on
developments in the financial markets”). Id. at 273. On this first factor, the City’s
tax-revenue injury fares well, and its municipal-expenditures injury fares poorly.
The City has plausibly alleged that it can present an analysis of reduced tax
revenue that is precise enough to avoid difficulties with isolating the role of the
Banks’ alleged violations. It has not done so for its municipal expenditures.
“based upon reduced property tax revenues resulting from (a) the decreased value
of the vacant properties themselves, and (b) the decreased value of properties
surrounding the vacant properties.” BoA FAC at 31; WF FAC at 44. According to
the City, “[r]outinely maintained property tax and other data allow for the precise
calculation of the property tax revenues lost by the City as a direct result of
particular [bank] foreclosures.” BoA FAC at 32; WF FAC at 45. This “Hedonic
regression methodology,” the City asserts, “can be used to quantify precisely the
property tax injury to the City caused by [the Banks’] discriminatory lending
WF FAC at 47.
The City does not go so far as to conduct this analysis and attach the results
to its pleadings, but its First Amended Complaints nonetheless suffice to describe
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the analysis in far more than speculative or conclusory fashion. The City has
BoA FAC at 32–33; WF FAC at 45–46. 6 This gives us a clear idea of the final
the City will calculate the impact of the Banks’ foreclosures on property values in
redlined (and reverse-redlined) areas of Miami, controlling for other variables and
isolating the impact of the redlining. The City points to studies in which this
6
Wells Fargo says that the City pleads “that it could conduct a study that might be able to show
that foreclosures affect property values.” (emphases in original). The City’s pleading does not
hedge its allegations in this way, and discounting the feasibility of its analysis on the front end is
inconsistent with our obligation to draw all reasonable inferences in the City’s favor at this
preliminary stage.
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methodology has produced the kind of results the City will need to present. BoA
precisely the property tax injury to the City caused by [the Banks’] discriminatory
lending practices and resulting foreclosures.” BoA FAC at 34; WF FAC at 47.
The pleadings strongly suggest, then, that the tax-revenue injury to the City
Under Twombly and Iqbal a mere statement that “[the Banks] caused the loss of
property tax revenue” would be wholly conclusory and would be disregarded. But
by indicating and explaining at considerable length the kind of analysis that would
the City has plausibly alleged a calculable harm and has made more than a
formulaic recitation of how the causation requirement will be met. There could be
a battle of experts down the line over whether the regression analysis really shows
what the City says it does, but, as we see it, that would be for a later stage of the
causation is sufficient at this stage and helps account for the concerns raised by this
first factor.
“difficult it [is] to ascertain the amount of [the City’s] damage attributable to the
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violation, as distinct from other, independent, factors,” Holmes, 503 U.S. at 269,
terms of damages calculation, Bank of Am., 137 S. Ct. at 1306. Here, the City has
plausibly pled that it is practicable and convenient to quantify the property tax
identified by the City, we note in passing there has been a substantial amount of
real estate values.7 One author at the University of Wisconsin School of Business
has written that “[o]ver the past three decades, hedonic estimation has clearly
matured from a new technology to become the standard way economists deal with
(RPPI) calls hedonic regression “probably the best method that could be used in
order to construct quality RPPIs for various types of property.” 9 While we may
7
See, e.g., Yun-Chien Chang, Economic Value or Fair Market Value: What Form of Takings
Compensation is Efficient?, 20 SUP. CT. ECON. REV. 35, 52–54 (2012); Yun-Chien Chang & Lee
Anne Fennell, Partition and Revelation, 81 U. CHI. L. REV. 27, 35 n.35(2014); Randall Akee,
Checkerboards and Coase: The Effect of Property Institutions on Efficiency in Housing Markets,
52 J.L. & ECON. 395, 402–03 (2009).
8
Stephen Malpezzi, Hedonic Pricing Models: A Selective and Applied Review, in HOUSING
ECONOMICS AND PUBLIC POLICY 67, 87 (Tony O’Sullivan & Kenneth Gibb eds., 2003).
9
OECD, Hedonic Regression Methods, in HANDBOOK ON RESIDENTIAL PROPERTY PRICE INDICES
50, 57 (2003).
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not engage in a Daubert analysis at this early stage, that hedonic regression
analysis has been favorably referenced and employed elsewhere and over several
decades cuts against the suggestion at the motion to dismiss stage that it is a wholly
At a more basic level, the aggregative nature of the City’s claims also helps
eliminate any discontinuity between the statutory violation and the injury. See
Lexmark, 134 S. Ct. at 1394. Here, the claimed violation is a “pattern or practice
BoA FAC at 30; WF FAC at 43. Even if each individual act of redlining does not
alleged that the impact of redlining and reverse-redlining can be identified with
precision and deterred. Similarly, in Blue Shield, the Court identified “the physical
and economic nexus between the alleged violation and the harm to the plaintiff” as
a factor to consider when applying proximate cause to the Clayton Act. Blue
Shield, 457 U.S. at 478. The scale of the misconduct matches the scale of the
injury.
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Since the Supreme Court spoke to this issue in Bank of America, two district
cause had been plausibly alleged. Most similarly and most recently, a district court
in the Northern District of California entertained a similar case brought by the City
of Oakland against Wells Fargo for predatory lending practices. City of Oakland
v. Wells Fargo Bank, N.A., No. 15-cv-04321, 2018 WL 3008538 (N.D. Cal. June
15, 2018). 10 In denying a motion to dismiss that court recognized, as we have, that
“[w]hile the fact of aggregative injury itself does not obviate proximate cause
property tax injury” adequately supports the idea that there was “an alleged
provable and quantifiable causal link between the defendant’s conduct and
plaintiff’s injury” notwithstanding the suggested length of the causal chain. Id. at
the district court ruled that since “Oakland ha[d] not proffered any statistical
10
After this decision, the district court in the Oakland case certified two questions for
interlocutory appeal to the Ninth Circuit: “(1) Do Oakland’s claims for damages based on the
injuries asserted in the [First Amended Complaint] satisfy on a motion to dismiss proximate
cause required by the FHA?” and “(2) Is the proximate-cause requirement articulated in City of
Miami limited to claims for damages under the FHA and not to claims for injunctive or
declaratory relief?” Order Granting Defendant’s Motion to Amend Order to Include
Certification for Interlocutory Appeal, City of Oakland, No. 15-cv-04321, 2018 WL 7575537 at
*2. The parties’ briefs before the Ninth Circuit are due in June and July of 2019. City of
Oakland v. Wells Fargo & Co., No. 19-15169 (9th Cir. Mar. 26, 2019), ECF No. 10.
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analyses comparable to those in the property-tax analysis,” the first Holmes factor
counted against them and problems of multiple causation abounded. Id. at *10.
Philadelphia found that city had “adequately [pled] proximate cause for . . . non-
regression analysis of [bank] loan data” that had demonstrated Latino and African-
American borrowers were 2.641 and 4.147 times more likely to go into foreclosure
than similarly situated white borrowers. City of Philadelphia v. Wells Fargo &
Co., No. 17-2203, 2018 WL 424451 (E.D. Pa. Jan. 16, 2018).
expenditures for police, fire, sanitation, and the like resulting from widespread
foreclosures -- the City does not do as well when measured against the first
Holmes factor. When it comes to this injury, the City’s complaints fail to explain
how we can ascertain with any level of detail or precision which expenditures will
somehow because the entire increase in municipal expenditures over any time
causes and independent variables will inevitably run up this measure of damages
because the City’s expenditures occur at some obvious level of remove from the
foreclosures that it says cause them. They are further down the chain, to put it in
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step-counting terms. There is nothing in the pleadings that suggests the plaintiff
will be able to sort out the extent to which these damages are attributable to the
Banks’ misconduct.
pleadings about tax revenue. The increased expenditures pleadings state, in almost
services” at foreclosed properties and that “these services would not have been
necessary if the properties had not been foreclosed upon.” BoA FAC at 34; WF
FAC at 47. The complaints then proceed to list types of expenditures: police, fire,
building code enforcement, and the like. If any direct connections exist between
the foreclosure and any of these expenditures, the City has not explained them, and
the City will identify the amount of increase attributable to the foreclosures or to
the Banks’ conduct. In pleading the tax-revenue injury, however, the City explains
in considerable detail how hedonic regression analysis will help pinpoint the
attributable loss. This is not to say that hedonic regression analysis, specifically,
should have been referenced again in relation to the expenditure injury in order to
satisfy the first Holmes factor. Rather we suggest only that a pleading in a case
like this must make clear how a plaintiff will demonstrate that an injury is
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attributable to a defendant. Hedonic regression serves this role with regard to the
tax-revenue injury, but may not be the only way this could ever be accomplished.11
The first Holmes factor, addressing the attributability of the injury to the
defendant’s conduct, is where the two economic injuries alleged by the City are
most different in terms of finding a “direct relation.” The tax-revenue injury has
been pled with detailed explanations of statistical proof, which serve to plausibly
allege that the courts will be able to work out just what the Banks can be fairly held
proofs are not the only method of proof, but, when we readily discern a
discontinuity between misconduct and injury, for the plaintiff to plausibly plead
proximate cause, it must allege something more with which to bridge the gap and
demonstrate that the defendant’s liability will bear “some direct relation” to its
11
A few other district courts have illustrated the point. In three lawsuits against banks alleging
the same kinds of practices that Miami has alleged, Cook County, Illinois claimed damages
based on “out-of-pocket costs it . . . incurred in processing the discriminatory foreclosures, such
as additional funding for the Cook County Sheriff to serve foreclosure notices and for the Circuit
Court of Cook County to process the deluge of foreclosures.” County of Cook v. Bank of Am.
Corp., No. 14 C 2280, 2018 WL 1561725 at *7 (N.D. Ill. Mar. 30, 2018); see also County of
Cook, Ill. v. HSBC N. Am. Holdings, 314 F. Supp. 3d 950, 956 (N.D. Ill. 2018); County of
Cook, Ill. v. Wells Fargo & Co., 314 F. Supp. 3d 975, 982 (N.D. Ill. 2018). Those out-of-pocket
costs were found to have plausibly been proximately caused by the banks because these
expenditures are automatic results of foreclosures. See HSBC, 314 F. Supp. 3d at 962; Wells
Fargo, 314 F. Supp. 3d at 984; Bank of Am., 2018 WL 1561725 at *7. These were the only
claimed damages that survived a motion dismiss in the Northern District of Illinois, as all three
courts there found that Cook County had failed to adequately plead proximate cause for the kinds
of tax-revenue and municipal-expenditure injuries that Miami pleads here. See HSBC, 913 F.
Supp. 3d at 962–64; Wells Fargo, 314 F. Supp. 3d at 988; Bank of Am., 2018 WL 1561725 at
*5. Miami pled no out-of-pocket costs closely tied to foreclosures along these lines.
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actions. On the increased-expenditure injury, the City has not plausibly pled its
case.
2.
among plaintiffs removed at different levels of injury from the violative acts, to
obviate the risk of multiple recoveries.” Holmes, 503 U.S. at 269. In Holmes, this
was a problem because a trial court would “have to find some way to apportion the
possible respective recoveries by the broker-dealers and the customers, who would
otherwise each be entitled to recover the full treble damages.” Id. at 273. Antitrust
violation, and have identified this as a powerful reason to allow suit only by more
directly injured parties. Blue Shield, 457 U.S. at 474–75 (citing Ill. Brick Co. v.
Illinois, 431 U.S. 720, 745 (1977); Hawaii v. Standard Oil Co. of Cal., 405 U.S.
251 (1972)).
Again, no such problem is presented in this case: plainly, the injuries to the
City’s treasury are not shared by any other possible plaintiff. These economic
injuries, whether or not they can ultimately be recovered for, could only be alleged
by the City. The City’s theory, therefore, presents no concern about double
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Substantially decreased tax revenue and increased municipal costs are injuries that
affect the interests of the City alone, so there could not plausibly be any difficulty
in apportioning them between multiple plaintiffs. The harm and damages pled by
individual homeowners suing under the FHA would be entirely different. These
plaintiffs could sue for actual and punitive damages, injunctive and equitable relief,
or attorney’s fees. See 42 U.S.C. § 3613(c). In this Circuit they could also seek
Sec’y, U.S. Dep’t of Hous. & Urban Dev. ex rel. Times, 102 F.3d 1203, 1207 (11th
Cir. 1997). Many courts have permitted FHA plaintiffs to recover pecuniary
damages, including moving costs and forfeited security deposits. E.g., Belcher v.
Grand Reserve MGM, LLC, 269 F. Supp. 3d 1219, 1239 (M.D. Ala. 2017). But no
The City, on the other hand, has claimed it was financially harmed in two
ways -- injury to its tax base and tax revenue because of reduced property value,
damages that these harms could support do not overlap in any way with or
duplicate the damages that individual homeowners may have sustained, because
the harms are entirely separate. The City’s injuries would be “passed on” forms of
the homeowners’ injuries if, for example, it were claiming it lost tax revenue
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unable to pay their taxes. But this is not the case. The City alleges instead that the
Banks’ misconduct had a direct, necessary, and immediate impact on its fiscal
health at the neighborhood and citywide level. The homeowners’ losses are
obviously related to the losses that Miami allegedly incurred, but they are
wholly implausible hypothesis -- the City would still have an independent set of
claims based on the independent harm that it suffered. The claims would be linked
3.
Holmes’s final factor builds on the first two: “[T]he need to grapple with
these problems,” the Court said, referring to the first two factors, “is simply
attorneys general, without any of the problems attendant upon suits by plaintiffs
injured more remotely.” Id. at 269–70. Thus, in Holmes, the directly injured
broker-dealers “could be counted on to bring suit for the law’s vindication,” and so
it was less necessary for SIPC to sue on behalf of the broker-dealers’ customers.
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Id. at 273. In Bridge, the same factor cut in the other direction; the plaintiffs were
injured because they had less success at county-run auctions when the defendants
cheated, and their harm was “the direct result of [defendant’s] fraud” in part
because, even though the plaintiffs didn’t themselves rely on any fraudulent
assertions, “no more immediate victim is better situated to sue.” Bridge, 553 U.S.
at 658.
The third Holmes factor has been applied to antitrust statutes as well. The
that “directness” between the plaintiff’s injury and the defendant’s action was
U.S. 519, 540–41 (1983). There, a union alleged that the defendant employer
relationships with nonunion firms” in a way that violated the Clayton Act. Id. at
520–21. This hurt unionized firms and, thus, hurt the plaintiff union. Id. The
Court found that the union had not alleged a sufficiently direct injury, noting that:
Id. at 542.
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take the lead in acting as private attorneys general because those plaintiffs will be
able to deter future violations more effectively and efficiently. When more directly
injured parties can sue for the full swath of harm caused by statutory violations, the
threat of suit by these parties has the maximum possible deterrent effect on
potential violators, and it’s simply not worthwhile to also allow minimally
deterring suits by plaintiffs farther down the causal chain. Cf. Southern Pac. Co. v.
Darnell-Taenzer Lumber Co., 245 U.S. 531, 534 (1918) (“The [defendant] ought
not to be allowed to retain his illegal profit, and the only one who can take it from
him is the one that alone was in relation with him, and from whom the [defendant]
Thus, in antitrust cases the courts have long expressed a “concern for the
smaller stake in the outcome than that of direct purchasers suing for the full
amount of the overcharge.” Ill. Brick Co., 431 U.S. at 745; see also Lexmark, 134
S. Ct. at 1391 (establishing, for the Lanham Act, a rule barring suit by
‘inability to meet [its] financial obligations’” (quoting Anza, 547 U.S. at 458)).
For this reason, the federal courts have rejected the monopolist’s “passing on”
defense -- the argument that mid-stream purchasers charged monopoly prices are
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not harmed because they can “pass on” any overcharges to consumers. See
Richard A. Posner, Economic Analysis of Law 395–96 (9th ed. 2014). Consumers
cannot sue over monopoly pricing, but this does not mean there is a meaningful
reduction in enforcement. See id. at 396 (“[Consumers’] right [to sue] is less
valuable because, being at once more remote . . . and more numerous, consumers
The same logic surrounding deterrence does not apply here. While the City
may be a step further down the chain of causation, the homeowners are much more
numerous and less well suited to prosecute a global claim. The City’s suit could
achieve better deterrence because it aims to recover for a larger injury sustained on
suit would. The City alleges widespread redlining and reverse-redlining policies
conducted by the Banks. The City’s suit challenges the entire policies. A
discriminatory action against that homeowner. Conceivably the banks could face
suits by many homeowners who were discriminated against, or who lost property
value because their neighbors’ houses were foreclosed on, but these suits wouldn’t
serve to condemn the pattern or policy. Individual homeowners would also face
to any individual foreclosure -- but the regression analysis that can isolate the
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impact of redlining on the neighborhood scale could not solve this problem on the
wrongdoing -- and that is plainly not the case here -- the additional assumption that
others will pursue the lawsuits and achieve deterrence is nowhere near as likely
true under the FHA as under the other statutes. Antitrust and, to a lesser extent,
civil RICO suits are typically brought by sophisticated business entities, often with
deep pockets, and those plaintiffs also have the added incentive of realizing treble
damages. In Holmes and Associated General Contractors, the Court left the job of
had counsel in place prepared to sue to vindicate their rights. Here, instead, the
Compared with the sophisticated parties involved in the RICO and antitrust cases,
it seems far less likely that these injured parties could be counted on to file suit.
While it’s possible that some might, it seems exceedingly unlikely that more than a
handful at most would do so, and we have seen precious little reason to believe that
many have. The vast majority of individual cases of discriminatory lending cases
are left unpursued and unaddressed. In Associated General, the Court observed
that “[d]enying the [plaintiff] a remedy on the basis of its allegations in this case
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As a result, the peculiarities surrounding the claims raised in this case make
essentially the same action against a monopolist as the ultimate consumer would.
homeowners are arguably closer in the chain, they are too numerous and diffuse to
be counted on for deterrence. They are better situated only in a narrow, literal
sense. The City, on the other hand, has plausibly alleged an injury, calculable in
the aggregate, that bears a direct relation to the Banks’ policies, applied in the
4.
The Holmes factors also help cabin proximate cause against other less-
homeowners who were not foreclosed on but whose property values fell could also
sue the banks. 137 S. Ct. at 1312 (Thomas, J., concurring in part and dissenting in
part). Still other concerns have been raised about the corner grocer who may have
lost business on account of foreclosures, the utility company, or maybe even real
estate brokers working on commission to resell properties in the area. The Court’s
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go a long way toward allaying these concerns. Application of the Holmes factors
reasonably establishes that the City’s injury is logically bound up with the Banks’
alleged conduct in meaningful ways missing from injuries to these other putative
claimants.
owners, unlike the City, would have substantially more difficulty plausibly
alleging that they could calculate damages attributable to the Banks’ actions with a
are considered in the aggregate. Indeed the amended complaints specifically cite
within an eighth of a mile.” BoA FAC at 33; WF FAC at 46. The average decline
the other hand, would be affected only by homes closest to his own, and these
might not accurately reflect the citywide average, in terms of causation or value.
And a corner grocer might be affected by the surrounding few blocks of homes, but
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Put another way, in step-counting terms, the grocer or the utility company is
demonstrably further down the causal chain because many independent variables
can enter the equation after foreclosure occurs. The City will necessarily be
harmed as soon as the foreclosures occur. For the grocer, though, a nearby home’s
foreclosure does not necessarily mean anything. The causal chain for the grocer is
longer, more attenuated, and more of a problem for proximate cause analysis
because there is a powerful discontinuity between the foreclosures and the grocer’s
the Banks’ predatory practices through the foreclosures to the grocers’ diminished
profits. The corner grocer, or the utility company, is not affected when a home is
foreclosed or when property values go down. These parties are not hurt until
individual homeowners decide to spend less money at that grocer, decide not to
pay the electric bill, or move away. Thus, there are many more third parties, and
many more intervening steps when it comes to the corner grocer or the utility
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The application of the second Holmes factor also strongly suggests why any
injury sustained by the corner grocer or by the utility company would not be
proximately caused by the Banks’ conduct. These are classic “passed on” injuries.
The Court has consistently said that “where the alleged violations [are] linked to
the asserted harms only through the [directly injured parties’] inability to meet
their financial obligations” proximate cause will not be found. Anza, 547 U.S. at
458; see also Lexmark, 1391 S. Ct. at 1391 (referencing “the electric company,”
property taxes, but the City’s claim is not that it is harmed because property taxes
went unpaid. Rather, the City says that property values decreased and that
therefore it was not entitled to as much property-tax revenue. The City’s loss is
not due to anyone lacking “the wherewithal to pay,” Holmes, 503 U.S. at 271, but
to the fact that redlining means the City is not able to collect nearly as much as it
would have, had the alleged FHA violations not occurred in the first place.
The third Holmes factor -- the reliability with which a plaintiff could remedy
harm or achieve deterrence -- also strongly suggests that we need not fear a deluge
even if injured, would be in a far weaker position and far less likely than the City
to achieve deterrence or to remedy the entirety of the harm caused by the Banks’
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attack the Banks’ whole pattern or practice on a municipal level. Any claims by
the corner grocer or the neighboring homeowner would be further out in the chain
of causation than the City is, and these claims would lack the broad scope that
allows the City to achieve maximal deterrence. Quite simply, they would face far
tougher versions of all the challenges the City faces, but with none of the offsetting
advantages.
As we see it, the factors articulated by the Supreme Court in Holmes cabin
this decision and keep the floodgates closed. But these factors are not the only
reason our ruling does not extend liability beyond what is reasonable.
Foreseeability remains a real part of the proximate cause calculation and also will
function to cut off liability in many instances. Dan B. Dobbs, Paul T. Hayden &
Ellen M. Bublick, The Law of Torts § 199, at 686 (2d ed. 2011) (“The defendant
must have been reasonably able to foresee the kind of harm that was actually
suffered by the plaintiff . . . .”). We are exceedingly dubious that courts would
expect lenders to reasonably foresee unending ripples of harm that overwhelm the
judicial branch.
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The Court has also told us that the FHA’s common-law antecedents are a
primary reason why “proximate cause under the FHA requires ‘some direct
relation between the injury asserted and the injurious conduct alleged.’” Bank of
Am., 137 S. Ct. at 1306. As a result, we know that “[a] damages claim under the
[FHA] ‘is analogous to a number of tort actions recognized at common law,’” and
that “directness principles” thus apply. Id. We also observed, in our previous
opinions, that FHA damages claims “have long been analogized to tort claims.”
See Bank of Am., 800 F.3d at 1282. These analogues, however, only take us so
far. They do not help flesh out the meaning of “direct relation,” even though they
The Court identified some common-law claims that are analogues for FHA
claims in Curtis v. Loether, 415 U.S. 189 (1973). See Bank of Am., 137 S. Ct. at
1306 (citing Curtis for the proposition that an FHA damages claim is analogous to
certain common-law torts). There, the Court was evaluating whether the Seventh
Amendment, which guarantees jury trials for “suits at common law,” guaranteed a
jury in an FHA suit. U.S. CONST. amend VII; see Curtis, 415 U.S. at 190. The
Court said it did, because FHA claims for housing discrimination were comparable
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The identification of these common-law antecedents does not get us too far.
We lack any clear indication that Congress had these common-law claims in mind
when drafting the FHA, and so we are reluctant draw too much from them beyond
the “some direct relation” requirement. For one thing, we would not know which
common-law claim to begin with, since we do not see the obvious correspondence
to the common law the Court has identified elsewhere. Thus, for example, this
case is not like Bridge where common-law mail fraud was an obvious precursor to
common-law claims. The Court does not define what exactly counts as “common-
law foundations” but RICO and the antitrust statutes are the paradigmatic
examples. See, e.g., Bridge, 533 U.S. at 651 (“[W]hen Congress established in
principles” (quoting Beck v. Prupis, 529 U.S. 494, 504 (2000))); Holmes, 503 U.S.
at 267 (“[C]ourts had read § 7 [of the Sherman Act] to incorporate common-law
U.S. 451, 457 (2006), a RICO case, the Court also said that “directness principles”
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1306 (quoting Anza, 547 U.S. at 457). Anza repeated reasoning from Holmes
comparing RICO’s civil suit provision to the Clayton Act’s. Anza, 547 U.S. at 457
The connection between the Clayton Act and RICO, laid out in Holmes, was
foundational for proximate cause analysis under RICO. See, e.g., Hemi Group,
559 U.S. at 8–10 (citing Holmes, 503 U.S. 258); Bridge, 553 U.S. at 653–55
(citing Holmes, 503 U.S. 258); Anza 547 U.S. at 457 (citing Holmes, 503 U.S. at
267–68). In fact, RICO’s civil suit provision was modeled on the antitrust statutes
of the early 20th century, so standards of proximate cause that applied to early
Clayton and Sherman Act cases can be readily applied to RICO as well. See
Holmes, 503 U.S. at 268; see also Assoc. Gen. Contractors, 459 U.S. at 531–35.
Even without a deep dive into legislative history, the connection between the
statutes is obvious because their civil suit provisions are almost identical. The
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18 U.S.C. § 1964(c). Both statutes thus say that “any person” “injured in his
business or property” by a violation of the statute has a cause of action and can
The common-law foundations of the Fair Housing Act are less obvious
insofar as they relate to proximate cause. For starters, the FHA does not employ
the language that the Clayton Act shares with RICO. It authorizes suit by an
person who (1) claims to have been injured by a discriminatory housing practice;
practice that is about to occur.” Id. § 3602(i). Indeed, under the language
employed by Congress in the FHA, the aggrieved person need not be injured
specifically “in his business or property.” Moreover, the remedies are distinct
from the relief available for a violation of the Clayton Act or RICO -- treble
damages are not available, and the court “may allow” attorney’s fees, but under the
FHA it is not required to, as it would be under RICO or the Clayton Act. See 42
U.S.C. § 3613(c).
drafting the FHA were drawing on the same version of proximate cause that was
used in these earlier statutes. We are still able to borrow notions about proximate
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cause from the common law for the FHA, but it strikes us as inappropriate simply
to assume that the FHA necessarily incorporated the nature and form of proximate
cause as it was employed in these other statutes for which we can trace a much
law evolved over time, we would need to know which version of common–law
proximate cause a statute adopted. See Sperino, supra, at 1225 (“The one thing
that is certain about proximate cause is that its underlying goals are contested and
evolving.”). Different statutes may not have incorporated the same common-law
standard; the Palsgraf case and the First Restatement of Torts both postdated
passage of the Sherman Act but had become highly foundational texts for
understanding proximate cause by the time RICO was drafted. Id. The evolving
shape of proximate cause at common law further complicates any analysis that
problems it addressed in the 1960s, but the fact that we may identify some
common-law analogue does not necessarily mean that this was the case. The Fair
Housing Act does not employ language drawn from the older federal statutes with
connections to the common law, and, as best as we can tell, this cause of action
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considering the common law may be valuable and informative, and while the
direct relation,” we are unable to discern any further lessons from the common law
IV. Conclusion
In sum, we hold that there is “some direct relation” between the City’s tax-
revenue injuries and the Bank’s alleged violations of the FHA. The Supreme
Court has never held that the presence of an intervening causal step or the
matter of law, and we decline to establish so hard and fast a rule today.
The City’s detailed allegations on its tax-revenue injury are sufficient for a
variety of reasons: the FHA is a broad and ambitious statute which employs a
standard of proximate cause that facilitates its operation; Congress meant for the
intentional racial discrimination; for half a century courts have read the FHA
broadly and Congress has repeatedly assented to these readings; the impact of the
even if there were not “something very close to a 1:1 relationship,” Lexmark, 134
S. Ct. at 1394, the City has plausibly explained how it will calculate damages in a
reasonably precise way; the injury is profoundly different from any injuries
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make for more efficient plaintiffs. In the absence of any palpable concerns about
the FHA.
Put differently, the City has adequately pled proximate cause when it comes
to its tax-base injury because the Banks’ redlining and reverse-redlining practices
bear some direct relation to the City’s fiscal injuries. There is a logical and direct
neighborhoods throughout the City and the reduction in property values. Third
parties are involved, but the harm to the City is not contingent on their actions
and the harm. Bad loans in the aggregate will mean foreclosures in the aggregate,
which will mean loss of property value and a reduction in the tax base. An
individual home might go under for a variety of causes, but when discriminatory
lending practices pervade a neighborhood or a city, the city’s fisc will necessarily
be affected because we know some number of homes will go under, and some
number of properties will lose value. When we consider the claimed violations
and the injuries sustained in the aggregate -- that is, at the scale that the complaints
present them -- it becomes clearer that injuries to the city’s treasury are necessary,
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expenditures injury fails, and so the district court was correct to find that proximate
cause for this injury had not been adequately pled in the complaints it was
reviewing. The City’s increased expenditures have not been plausibly presented as
directly and automatically resulting from the Banks’ alleged conduct. Even though
we think foreclosures follow directly from the Banks’ conduct, there is too much
opportunity in the causal chain between foreclosure and increased expenditures for
intervening actors and causes to play a role, and there has been no explanation by
the City of how we might conceivably isolate the injury attributable to the Banks.
Thus we have identified this alleged injury as being too remote to satisfy proximate
cause.
case. Much remains to be determined as the litigation proceeds, but this case is
before this Court only on a motion to dismiss. It is not our role at this stage to
may correlate with race or with other considerations. Today we have done only
two things. Broadly, we have worked out in some detail what proximate cause
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complaints against these Banks plausibly allege that Miami’s injuries to its tax
base were directly related to the violations they describe. We simply find that the
injuries bear “some direct relation” to the misconduct that the City is challenging.
This harm to Miami, as pled, is not just foreseeable but, when measured in the
aggregate, is directly related to the pattern of unlawful behavior the City has
alleged.
The City has plausibly alleged a violation of the FHA and has stated a claim
in its First Amended Complaints. Accordingly we conclude that the district court
improvidently dismissed the FHA claims in their entirety and ought to have
granted the City leave to amend its complaints, since amendation would not have
been futile.12 The cases are remanded to the district court for further proceedings
12
We leave it to the district court to determine which complaints should be operative for its
purposes, or whether to grant the City leave to file new ones. See supra n.2.
76