Today, the Ninth Circuit unanimously ruled that the City of Oakland had sufficiently pleaded proximate cause to survive a motion to dismiss in its Fair Housing Act lawsuit against Wells Fargo, N.A. The Center for Constitutional Litigation represented Oakland in this appeal.

     Oakland sued Wells Fargo over its practice of offering minority borrowers more expensive or riskier mortgages than it offered non-minorities, resulting in a disproportionate number of foreclosures and reducing the city's tax base. In another CCL case, Bank of America Corp. v. City of Miami, the U.S. Supreme Court in 2017 had held that cities have standing to bring such lawsuits, but left it to the lower courts to set a standard on what analysis to apply to determine if the alleged injuries were proximately caused by discriminatory lending.

     In the Oakland case, the U.S. District Court agreed with CCL that the city met the standard that ought to be applied, but certified the issue to the Ninth Circuit for review. Today's decision from that court agreed, finding that the text, legislative history and Supreme Court's Miami decision both all support the notion that Oakland's injuries are not too remote from the acts of discrimination to sustain a legal action. In doing so, the Ninth Circuit joined courts in cases brought by Miami, Philadelphia, and Sacramento, all argued by CCL's Robert S. Peck, in upholding the cities' rights. Like those other courts, the Ninth Circuit agreed that Oakland's use of regression analyses made the connection between the FHA violation and claimed injury plausible, the standard applied at the motion to dismiss stage.

     The case now returns to the district court for a determination of whether the same analysis applies to the city's claims for declaratory and injunctive relief, unless the bank seeks review in the Supreme Court, as it has previously.