Wednesday, April 25, 2018
Business

U.S. Supreme Court rules Miami can sue for predatory lending

WASHINGTON — The Supreme Court on Monday ruled that Miami can sue two banks for predatory lending under the Fair Housing Act of 1968.

The case arose from the 2008 financial crisis. Miami sued Bank of America and Wells Fargo, saying that their discriminatory mortgage lending practices had led to a disproportionate number of defaults by minority homebuyers and, in turn, to financial harm to the city.

Even as the majority of justices ruled that Miami was entitled to sue under the housing law, the court declined to decide whether the city had asserted a direct enough connection between the banks' actions and the harm it asserted. The court sent the case back to the federal appeals court in Atlanta for further exploration of that question.

When the case was argued in the Supreme Court in November, it seemed headed for a 4-4 tie. But the vote on the question of whether Miami could sue under the law was 5-3, with Chief Justice John Roberts joining the court's four-member liberal bloc to form a majority.

Miami said the banks had intentionally and disproportionately issued risky mortgages on unfavorable terms to black and Hispanic borrowers. That led, the city said, to segregation and foreclosures, hurting its property tax base and requiring it to provide additional municipal services.

A trial court dismissed the suits in 2014, saying the city had not demonstrated that its claims were covered by the housing law. The U.S. Court of Appeals for the 11th Circuit, in Atlanta, reversed those rulings last year, allowing the cases to proceed. The appeals court said it was enough for the city to contend that it had "suffered an economic injury resulting from a racially discriminatory housing policy."

Writing for the majority Monday, Justice Stephen Breyer said Congress had meant to include cities among the "aggrieved persons" who may sue under the housing law. He said a 1979 Supreme Court decision, Gladstone, Realtors v. Village of Bellwood, supported the ruling.

In that case, he said, a village had been allowed to sue on the theory that it had "lost tax revenue and had the racial balance of its community undermined by racial-steering practices." In the Miami case, Breyer wrote, the city had similarly asserted that the banks' actions had "reduced property values, diminishing the city's property-tax revenue and increasing demand for municipal services."

In a second part of his opinion, Breyer wrote that the appeals court had used too lax a standard in assessing the connection between the banks' conduct and the city's asserted injuries. The appeals court had ruled that injuries had only to be foreseeable, but Breyer said that was too attenuated.

"The housing market is interconnected with economic and social life," Breyer wrote, and violations of the housing law always have ripples. "Nothing in the statute suggests that Congress intended to provide a remedy wherever those ripples travel."

Instead, he said, there must be a direct relationship between the challenged conduct and the asserted injury. He left it up the appeals court to re-examine that question.

In addition to Roberts, justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan joined the majority decision.

In a partial dissent, Justice Clarence Thomas said there was nothing in the housing law to suggest that "Congress was concerned about decreased property values, foreclosures and urban blight, much less about strains on municipal budgets that might follow."

When the case was argued, some justices worried that a ruling for Miami would allow all sorts of people and entities to sue for indirect harm from discriminatory practices. Kagan asked about restaurants and dry cleaners, Sotomayor about corner grocers and Breyer about publishers.

The majority did not directly address whether those kinds of suits were allowed under the law. Thomas welcomed that aspect of the ruling, saying "it should not be read to authorize suits by local businesses alleging the same injuries that Miami alleges here."

Thomas said the city should also lose on the question of causation.

"Miami's asserted injuries are too remote from the injurious conduct it has alleged," he wrote.

Justices Anthony Kennedy and Samuel Alito joined the partial dissent. Justice Neil Gorsuch did not participate in the decision.

The court's decision in the two consolidated cases, Bank of America v. Miami, No. 15-1111, and Wells Fargo v. Miami, No. 15-1112, was limited. But it nonetheless meant that civil rights groups had for a second time in two years avoided a complete loss in a Fair Housing Act case by a narrow margin.

In 2015, in a 5-4 decision, the court allowed plaintiffs in Fair Housing Act cases to use a legal theory that civil rights groups had said was a crucial tool to fight discrimination. The majority ruled that plaintiffs could use statistical evidence to prove that the challenged practice had produced a "disparate impact."

Comments
Yelp search results reflected racist stereotype that Asian American restaurants serve cat and dog

Yelp search results reflected racist stereotype that Asian American restaurants serve cat and dog

A strange thing happened when typing "dog menu" into the restaurant ratings website and app Yelp. It automatically generated suggested searches. There were dog massage, hot dogs, pet groomers. Also: "dog meat." But it got more disturbing. Take Yelp...
Updated: 7 hours ago
As more emotional support animals fly on U.S. airlines, Congress eyes new ways to tighten the leash

As more emotional support animals fly on U.S. airlines, Congress eyes new ways to tighten the leash

WASHINGTON — With hundreds of thousands of emotional support animals taking to the skies on U.S. airlines, Congress may start pulling a tighter leash.Two new legislative options emerged this week to address a hairy issue for American Airlines, Southw...
Updated: 7 hours ago
Duke Energy announces new Florida leadership

Duke Energy announces new Florida leadership

ST. PETERSBURG — The head of Duke Energy Florida is leaving his post to take a new role with the utility’s parent company June 1, the company announced on Wednesday.Harry Sideris, 47, was appointed this week to serve as vice president and chief distr...
Updated: 7 hours ago

Comcast challenges Murdoch with rival bid for U.K.-based Sky

LONDON — U.S. media giant Comcast on Wednesday offered $30.7 billion for Sky PLC, topping a bid from Rupert Murdoch’s 21st Century Fox and setting up a bidding war for Britain’s biggest satellite TV company.Comcast said it would pay approximately $17...
Updated: 8 hours ago
Sprouts Farmers Market to open new store in Pasco County

Sprouts Farmers Market to open new store in Pasco County

TRINITY — Pasco County will be getting its first Sprouts Farmers Market, the organic grocery chain announced Wednesday. The new store will open at the Village at Mitchell Ranch on State Road 54 and Little Road. Officials with the speciality st...
Updated: 8 hours ago
Circle K launching own gas at eight Hillsborough locations

Circle K launching own gas at eight Hillsborough locations

TAMPA — Circle K is converting the gas station portion of eight of its Hillsborough locations to Circle K fuel. Previously, the fuel was provided by other brands, such as Shell. The new Circle K branding also brings with it the Canadian-owned conveni...
Updated: 8 hours ago
Florida leads other hurricane-prone states in quality of its building codes

Florida leads other hurricane-prone states in quality of its building codes

Florida has the strongest residential building codes among 18 coastal states, according to a new study by the Insurance Institute for Business & Home Safety. Florida’s rating is 95, almost three times higher than lowest-ranked Texas. Other states wit...
Published: 04/25/18
Study: Tampa Bay homes in once ‘redlined’ neighborhoods worth half those in other areas

Study: Tampa Bay homes in once ‘redlined’ neighborhoods worth half those in other areas

Times staffRedlining’ — banks’ refusal to make mortgage loans in certain areas — still has a huge effect on housing values even though the practice was banned 50 years ago. According to Zillow, a Tampa Bay house in a once-redlined area is worth less ...
Published: 04/25/18
Tex-Mex chain Chuy’s opens first Tampa restaurant, Nebraska Mini-Mart grab-and-go coming soon

Tex-Mex chain Chuy’s opens first Tampa restaurant, Nebraska Mini-Mart grab-and-go coming soon

NOW OPEN: TEX-MEX CHAIN CHUY’SThe Austin, Texas-based Tex-Mex chain Chuy’s opened its first Tampa restaurant on Tuesday, giving away free Chuy’s for two for a year to the first 50 customers. I know, we missed it, it’s a bummer, but we can still visit...
Published: 04/25/18
Clearwater looks to move out of City Hall to speed up Imagine Clearwater waterfront redevelopment

Clearwater looks to move out of City Hall to speed up Imagine Clearwater waterfront redevelopment

CLEARWATER — Elected officials have talked about relocating City Hall from the downtown bluff for a good 30 years. Now there’s a jolt of urgency to actually do it.Voters backed a referendum in November that essentially greenlighted the $55 million re...
Published: 04/25/18