Another Victory for City of Miami in Reverse Redline Discrimination Lawsuits.

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U.S. Court of Appeals for the Eleventh Circuit Denies Defendant Banks’ Petitions for Rehearing.

(Miami, FL November 9, 2015) – In another important legal victory for the City of Miami, the U.S. Court of Appeals for the Eleventh Circuit has denied the Petitions for Rehearing and Rehearing En Banc filed by Wells Fargo, Bank of America, and Citigroup after the Court previously reversed a federal district court’s decision to throw out three lawsuits the city brought against various banks for discriminatory mortgage lending practices that cost the city revenues and resources. 

Miami filed the lawsuits against Bank of America, Wells Fargo, and Citigroup in late 2013, alleging that these banks violated the federal Fair Housing Act by engaging in a lengthy pattern and practice of steering minority borrowers into more expensive and higher risk mortgages than loans that were issued to similarly situated white borrowers. Commissioner Suarez sponsored the Resolution authorizing these lawsuits.

By filing these lawsuits, Miami seeks to vindicate the City’s long-standing objective of providing residents with all of the personal, professional, and societal benefits of living in an integrated community along with recovering damages incurred by the City when borrowers defaulted on these more expensive and riskier loans and the properties entered foreclosure. This resulted in a reduction in property taxes collected by the City, as well as additional expenditures to alleviate the blight and dangerous conditions that existed in the neighborhoods where the foreclosed properties were located. Additionally, the City seeks to prevent these banks from continuing to issue more expensive and riskier loans to minorities in the future, thereby reducing the number of foreclosures that will plague the City’s neighborhoods.

On September 1, 2015, the appellate court issued a unanimous opinion reversing the District Court’s order of dismissal of the Fair Housing Act claim. The Court held that (1) Miami possessed legal standing to pursue its claim under governing Supreme Court and Eleventh Circuit precedent, (2) the lawsuits adequately alleged the City’s damages were caused by the banks’ unlawful conduct, and (3) the “continuing violations” doctrine applies to the lengthy pattern and practice of issuing more expensive and riskier loans even if the types of loans issued are not identical because the focus is on the discriminatory practice itself, not the particular characteristics of the mortgage loans themselves.

Wells Fargo, Bank of America, and Citigroup filed Petitions for Rehearing asserting that the three judge panel erred when it held that the continuing violations doctrine applies to the City’s claim. Bank of America and Citigroup also filed Petitions for Rehearing En Banc challenging the panel’s conclusion that the City had standing to proceed with its claim. On November 4, 2015, the Eleventh Circuit issued an order denying Bank of America’s Petition, and on November 5, 2015, the Court issued an order denying Wells Fargo’s and Citigroup’s Petitions. Consequently, these banks have exhausted all potential remedies before the Eleventh Circuit in their relentless attempt to prevent the City of Miami from proceeding with these lawsuits.

The City of Miami intends to vigorously pursue its claim under the Fair Housing Act to hold these banks accountable for the consequences of their continuous pattern and practice of issuing predatory loans to minority borrowers, thereby damaging the City. These lawsuits are being championed by Commissioner Francis Suarez, who sponsored the Resolution authorizing the lawsuits.