The Eleventh Circuit Court of Appeals recently reversed a lower court ruling that dismissed discriminatory lending claims against Wells Fargo & Co., Bank of America Corp. and Citigroup Inc., all brought by the City of Miami. The City of Miami alleges in each of the three lawsuits that the companies engaged in a decade of lending discrimination in its residential housing market, which compounded the impact of the economic downturn on the City. Specifically, the City claims that the banks targeted black and Latino customers for predatory loans that carried more risk, steeper fees, and higher costs than those offered to similarly situated white consumers. The City further alleges that the banks created internal incentive programs that encouraged these practices. As a result of the banks’ practices, the City of Miami alleges, minority-owned properties throughout the City were subject to greater rates of foreclosure, which deprived the City of tax revenue and forced the City to make increased expenditures on municipal services, such as police, firefighters, and debris removal to combat the blight resulting from significant foreclosures.

The lower court dismissed the City’s claims with prejudice in 2014 on the grounds that the City lacked standing under the Fair Housing Act, that the harm was too remote from the alleged conduct and that the statute of limitations on the claim had expired. The Circuit Court disagreed with each of these findings, thus reversing the lower court and allowing the suits to move forward. In its opinion, which did not consider the merits of the City’s claims, the Eleventh Circuit panel found that the banks could have reasonably foreseen the “attendant harm” from their alleged discriminatory lending and so the harm was not too remote. In its consideration of whether the statute of limitations for the claim had passed, and whether the continuing violation doctrine applied, the Eleventh Circuit found that City “has alleged ‘not just one incident…but an unlawful practice that continues into the limitations period.’”

Similar suits filed by Cook County, Illinois, which includes Chicago, and the City of Los Angeles against Wells Fargo were recently dismissed on grounds similar to those that resulted in the original dismissal of the suit brought by the City. It is foreseeable that the Eleventh’s Circuit’s decision, while not controlling, may have an impact in any appellate review of these similar cases.