Court says cities can sue banks under anti-bias law
By Mark Sherman
Associated Press
WASHINGTON (AP) - The Supreme Court ruled Monday that cities may sue banks under the federal anti-discrimination in housing law, but said those lawsuits must tie claims about predatory lending practices among minority customers directly to declines in property taxes.
The justices' 5-3 ruling partly validated a novel approach by Miami and other cities to try to hold banks accountable under the federal Fair Housing Act for the wave of foreclosures during the housing crisis a decade ago.
But the court still threw out an appellate ruling in Miami's favor and ordered a lower court to re-examine the city's lawsuit against Wells Fargo and Bank of America to be sure that there is a direct connection between the lending practices and the city's losses.
Miami claimed that Wells Fargo and Bank of America, as well as Citigroup, pursued a decade-long pattern of targeting African-American and Hispanic borrowers for costlier and riskier loans than those offered to white customers. The loans to minority homeowners went into default more quickly as well, the city said.
Wells Fargo and Bank of America appealed the ruling by the 11th U.S. Circuit Court of Appeals to the Supreme Court, arguing that cities can't use the Fair Housing Act to sue over reductions in tax revenues. The banks said the connection between a loan and the tax consequences is too tenuous. Citigroup did not appeal, though its lawsuit also would be affected by what the appeals court does in response to Monday's ruling.
Justice Stephen Breyer wrote in his majority opinion a city can make claim for financial harm under the anti-discrimination housing law. But he said the second issue, tying the loans to the drop in tax revenues, is more difficult. Breyer wrote that there must be "some direct relation between the injury asserted and the injurious conduct alleged."
The appeals court should decide that issue, Breyer said.
Writing in dissent, Justice Clarence Thomas said he would have given the banks what they asked for and dismissed Miami's lawsuit. Justices Samuel Alito and Anthony Kennedy sided with Thomas.
The banks claimed that a ruling for Miami could lead to lawsuits asking for billions of dollars. The city said those fears were unjustified and pointed to similar lawsuits filed by Baltimore and Memphis, Tennessee, that were settled for less than $10 million each.
Both sides saw something to like in the outcome. "With this decision, the Supreme Court has acknowledged the crucial role of municipal governments in protecting residents' rights. In housing and lending as in other areas, cities can and should serve as a bulwark against discrimination," said Dennis Parker, director of the American Civil Liberties Union's racial justice program.
Wells Fargo senior vice president Tom Goyda said the bank's case was helped by the court's decision "We believe that under the stringent standards articulated by the Supreme Court, it will be very difficult for Miami or any other municipality to show the required connection between the claimed damages and unsubstantiated allegations about our lending practices, which do not reflect how we operate in the communities we serve," Goyda said.
The consolidated cases are Bank of America v. Miami, 15-1111, and Wells Fargo v. Miami, 15-1112.
Justices side with Venezuela in dispute over seized oil rigs
By Sam Hananel
Associated Press
WASHINGTON (AP) - A unanimous Supreme Court on Monday gave the government of Venezuela another chance to fend off a lawsuit alleging the country illegally seized 11 oil drilling rigs from an Oklahoma-based company in 2010.
The justices ruled that lower courts had set the bar too low in allowing the lawsuit brought by Helmerich & Payne International Drilling Company to move forward.
Foreign countries are generally immune from lawsuits in the U.S., but a federal statute makes an exception in certain cases when private property is seized.
Writing for the court, Justice Stephen Breyer said companies must make a stronger argument at the outset of a case that property was actually taken in violation of international law. He said such cases must be more than just "non-frivolous" to avoid being tossed out.
If cases against foreign governments are allowed too easily to proceed in American courts, it could "create friction with other nations and reciprocal actions against this country," Breyer said.
The U.S. government had sided with Venezuela, arguing that ruling for the company could harm foreign relations and lead other countries to retaliate against American interests.
The case began after Venezuela's former president Hugo Chavez issued a decree seizing control of the oil rigs owned by U.S. driller Helmerich & Payne International Drilling Co. The company refused to operate them after Venezuela's state-owned oil company fell more than $100 million behind in payments.
Chavez said the "forced acquisition" was necessary to put the idled rigs back to work.
Venezuela argued that the seizure did not violate international law because the rigs were owned by a Venezuelan subsidiary of Helmerich & Payne. But a federal appeals court sided with the company, ruling that it could move ahead with a lawsuit claiming the move harmed U.S. shareholders.
Justice Neil Gorsuch did not take part in the case, which was argued before he took his seat on the court.
Appeal in police shooting lawsuit turned down
WASHINGTON (AP) - The Supreme Court won't hear an appeal in the case of a California police officer whose 2012 killing of an Anaheim gang member sparked riots and protests.
The justices on Monday let stand a lower court ruling that ordered a new trial in the lawsuit brought by the mother of Manuel Diaz.
She sued the city of Anaheim and Officer Nick Bennallack for excessive force in the fatal shooting. Diaz was unarmed, but Bennallack said he thought the man had a gun and was preparing to shoot after a brief foot chase.
A jury ruled in favor of the city and the officer, but the 9th U.S. Circuit Court of Appeals said the judge allowed irrelevant inflammatory evidence to be presented at the trial.
Challenge over Alaska polar bear habitat denied
WASHINGTON (AP) - The Supreme Court won't hear an appeal from Alaska and oil and gas industry groups protesting the government's designation of more than 187,000 square miles in the state as critical habitat for threatened polar bears.
The justice on Monday left in place an appeals court ruling that said the U.S. Fish and Wildlife Service followed the law when it authorized the massive habitat in a coastal area larger than the state of California.
Alaska officials, the American Petroleum Institute and others said the designation was too extensive and accused the agency over overreaching.
A federal judge had rejected the plan, saying the agency had not shown that certain areas on land and barrier islands were appropriate for polar bear dens. But a federal appeals court overturned that ruling last year.
Court lets stand California ban on anti-gay therapy
WASHINGTON (AP) - The Supreme Court has again rejected a challenge to California's ban on so-called gay conversion therapy.
The justices did not comment Monday in turning away an appeal from a San Diego minister and others who argued the law violated their First Amendment religious freedoms.
The federal appeals court in San Francisco had previously upheld the law in dismissing the constitutional challenge.
Gov. Jerry Brown signed the ban into law in late 2012. Since then, the Supreme Court has rejected efforts to upend the California law and a similar ban New Jersey.
Published: Wed, May 03, 2017
