A trio of dismissed lawsuits filed by the city of Miami against three of the country’s biggest home lenders over alleged discrimination have been revived thanks to a federal appeals court.
Named as respective defendants in the three lawsuits are Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. as well as some of their affiliates.
The federal lawsuits were originally filed on Dec. 13, 2013, in U.S. District Court for the Southern District of Florida.
The city alleges violations of the Fair Housing Act because of discriminatory lending that occurred over the prior decade.
Miami claims that minorities were targeted for predatory loans.
U.S. District Judge William P. Dimitrouleas dismissed all three cases with prejudice.
“The district court dismissed the city’s FHA claim with prejudice on three grounds: the city lacked statutory standing under the FHA because its alleged injuries fell outside the statute’s ‘zone of interests’; the city had not adequately pled that Citigroup’s conduct proximately caused the harm sustained by the city; and, finally, the city had run afoul of the statute of limitations and could not employ the continuing violation doctrine,” according to a summary outlined in Tuesday’s decision on the Citi lawsuit from the U.S. Court of Appeals for the Eleventh Circuit.
So Miami appealed the decision, and the appeals court disagreed with the decision and, in part,
reversed the dismissal.
According to the appellate decision, the city has constitutional standing to pursue Federal Housing Act claims.
In addition, the “zone of interests” for the act has been found by the Supreme Court to extend as broadly as permitted under Article III of the Constitution — therefore encompassing the city’s claim.
“While we agree with the district court’s conclusion that the FHA contains a proximate cause requirement, we find that the city has adequately alleged proximate cause,” the appellate decision states.
The decision also noted that the “continuing violation doctrine” would apply to the city’s claims if they are adequately pled.
The lower court’s dismissal, however, of state claims was affirmed.
“Because the district court imposed too stringent a zone of interests test and wrongly applied the proximate cause analysis, it erred in dismissing the city’s federal claims with prejudice and in denying the city’s motion for leave to amend on the grounds of futility,” the decision states. “As for the state law claim, we affirm the dismissal because the benefits the city allegedly conferred on the defendants were not sufficiently direct to plead an unjust enrichment claim under Florida law.”
