The U.S. Supreme Court ruled Monday on a case that could have significant impact on credit unions and their potential exposure to class action lawsuits stemming from anti-discrimination provisions of the Fair Housing Act (FHA). The ruling today was a “mixed bag,” according to CUNA counsel, but the court did vacate the lower court ruling and remanded it back to the lower court for further proceedings.
City of Miami v. Bank of America and City of Miami v. Wells Fargo involves the City of Miami, which sued Bank of America and Wells Fargo under the FHA, claiming that discrimination by the banks against city residents entitles the city to damages for indirect harm.
The 11th Circuit Court originally held that third parties like Miami were allowed to have standing to sue under the FHA, even if they never directly faced discrimination their alleged injuries occurred years later, after the alleged discriminatory act occurred.
The court did not rule in CUNA’s favor when stating the city is an “aggrieved person” for pusposes of standing and is authorized to bring suit under the FHA. A ruling on this issue could have outright prevented law suits of this type from proceeding.
However, the court did unanimously conclude that the lower court erred in holding that the cities could meet the FHA's requirement to show legally recognizable injury based solely on a showing that their alleged financial injuries were a foreseeable result of the banks’ alleged misconduct. This is an element that must be established to prevail on the merits.
Instead, the cities must show a “direct relation between the injury asserted and the injurious conduct alleged.” CUNA, which filed several amicus briefs in the case, will continue to follow this case on remand to the lower courts.
For additional analysis of the decision, see CUNA’s Removing Barriers Blog.