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By Chris Bruce
March 10 — Bank of America and Wells Fargo want the U.S. Supreme Court to decide a basic question under the Fair Housing Act (FHA), saying confusion about the court's own decisions is driving lending discrimination claims by local governments.
Last June, the court clarified how plaintiffs can sue under the FHA, holding that the statute recognizes bias claims based on a disparate impact analysis. The Bank of America and Wells Fargo petitions, both filed March 4, pose a different question: Who has standing to sue?
Even though there is no conflict among the circuits on the standing issue, both banks said the question is pressing enough that the justices should hear the dispute, which centers largely on tension between two Supreme Court rulings — one in 1972 and another in 2011.
“The time is now for this Court to intervene,” Wells Fargo said in a petition by Paul F. Hancock of K&L Gates in Miami and Neal K. Katyal of Hogan Lovells in Washington, D.C. “The question presented is ultimately one only this Court can answer, for only this Court can definitively resolve a conflict in its own decisions.”
A decision by the court to hear the Bank of America and Wells Fargo petitions could imperil cases brought by a host of cities and other local governments against Bank of America, Wells Fargo and Citigroup in various courts .
At issue in both petitions is a September ruling by the U.S. Court of Appeals for the Eleventh Circuit that said Miami had standing to sue under the statute, based in part on the Supreme Court's decision in Trafficante v. Metropolitan Life Ins. .
Although the two petitions presented somewhat different questions, they both said the court must resolve a tension between Trafficante, a 1972 Fair Housing Act case, and Thompson v. North Am. Stainless, a 2011 employment discrimination ruling under Title VII of the 1964 Civil Rights Act.
The Trafficante case allows courts to apply a broader analysis of a plaintiff's standing. Bank of America and Wells Fargo say Thompson means that a narrow approach now applies. Key provisions in the two statutes, though not identical, are similar.
Bank of America, like Wells Fargo, urged the court to step in now and clarify the standing question. “Even if every court of appeals wrote its own opinion following the Eleventh Circuit’s opinion in this case, certiorari would be necessary — not to resolve a split in the courts of appeals, but to resolve the tension between this Court’s decisions that results in cases being decided based on obedience rather than reason,” said attorneys William M. Jay, Thomas M. Hefferon, Matthew S. Sheldon and David J. Zimmer of Goodwin Procter.
Bank of America's petition also asked the court to address the role of proximate cause in FHA cases.
In essence, Bank of America and Wells Fargo say the Eleventh Circuit's standing analysis was too broad, and that Miami had no legal right to stake the claim it did.
A district court initially dismissed Miami's lawsuits, holding the city lacked standing and that it brought its claims too late, but the Eleventh Circuit reversed in September.
Miami officials did not immediately respond to a March 10 request for comment. A Bank of America spokesman declined to comment. Wells Fargo did not immediately respond to a request for comment.
Meanwhile, other FHA cases are ongoing. Among those are two appeals in the Ninth Circuit, both by the city of Los Angeles, which has separately sued Bank of America and Wells Fargo only to have its claims rejected.
The latest turn there came March 8 as Los Angeles filed a brief urging the appeals court to reverse a district court that said it failed to plead its case against Bank of America within the FHA's two-year statute of limitations (Los Angeles v. Bank of Am. Corp., 9th Cir., No. 15-cv-55897, brief filed, 3/8/16).
Los Angeles, which alleges continuing violations by the bank, said the district court wrongly required it to make a series of showings early in the case — a holding that Los Angeles said has no basis.
“No precedent applies such a heavy burden on an FHA plaintiff — and the Bank offers none,” said the brief by Los Angeles City Attorney Michael N. Feuer and others.
In the other Los Angeles appeal in the Ninth Circuit, Wells Fargo is scheduled to file a brief March 11.
Meanwhile, Judge Leigh Martin May of the U.S. District Court for the Northern District of Georgia is weighing a motion to dismiss by Bank of America, which in November was sued by three Georgia counties — Fulton and DeKalb, which include the city of Atlanta, and Cobb County, which lies to Atlanta's northwest (Cobb County v. Bank of Am. Corp., N.D. Ga., No. 15-cv-04081, brief filed, 3/4/16).
Bank of America mentioned the case in its petition to the Supreme Court as an example of the “broad license” it said the Eleventh Circuit has given to FHA claims, citing it as an example of “a wave of new FHA litigation” now underway.
Bank of America asked May to dismiss the Georgia case in a March 4 brief, saying the counties “are not within the statutory authorization of those who can bring an FHA lawsuit.”
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