the morning for the court room i'm judge cool and i'm in seattle and produce a painting by video and i'm the presiding judge on this can't thank you it's called yes good morning so i think the st order of business is that judgment again i want to express our thanks and appreciation to chief judge g o who is normally on the th circuit but is visiting us here today and helping us with our caseload we appreciate that  so if if there's no further comment from judge moore gal or judge or chief judge poe let me say that we have we had to change the order of me just say for the record that we have three cases submitted on the briefs one is saying versus bar number sixteen i think seventy three  but we're going to have to delay that argument so we'll start with the city of oakland case where well city of oakland please proceed with if we have the schedule for fifteen minutes per side and in general we'd appreciate it of counsel can't structure their arguments to try to live with that but of course  judge has a question you should feel free to answer it correctly and a do you plan robot work yes your honor i'd like to use your five minutes rebuttal ok and since we have three cases submitted on the briefs if we need to do so we will extend a little time but go ahead please thank you judge gould and may please the court the fair housing act as something very important because discrimination in our housing markets is a tremendous evil at the same time the supreme court has recognized that the act has critical limits and in particular the court in the city of miami cases held it requires proximate cause in critical language the justices said that the general tendency is to cut off cognizable harms at the st step as the district court itself recognize in this case the city's alleged injuries or several steps removed from the asserted violation in this case that fact to doom's the city's injuries its injuries are far downstream independent all sorts of variables and independent choices by other actors they are truly the types of ripples of harm that the supreme court reference in miami that a violation of the f h a may be expected to cause the supreme court warns that quote nothing in the statute suggests congress intended to provide a remedy or ever these ripples travel if the city can sue here it runs smack dab into the concerns that all the cases warn about it permitted electric utility to sue because greater foreclosures mean houses that aren't occupied as much it permit flower shops or neighborhood businesses to suit because they viewed harm from the additional seas and property degradation it permitted permit real estate brokers to sue on the theory that their commissions aren't as valuable and all of that is why the supreme court has required a plaintive to allege an injury that is the immediate result regular i know you mentioned the the coffee shop and i think you're arguing that there may be a slippery slope here but i guess my question for you is isn't local plant shops drop in business attributable to many factors such as poor management or shortage of plants or shortage of whatever merchandise that is being sold slippery slope i'm referencing actually not it's not argument it is the supreme court time and again in the proximate case cause cases in a particular lexmark has worried exactly about this question of other impacted businesses suing and he to get to the question you're asking i think that the flower shop or the electric utility faces the exact same probably even a shorter chain and causation because all you have to show is that you have to show that st th bank made bad loans more expensive loans those loans made it more likely that powers would default then it made it more likely that loan servicers wouldn't modify the loans or refinance and then that would reduce the market value of the homes and lead to vacancy and then because of the vacancy there wouldn't be as many customers for the electric company which may actually be owned by the city or a flower shop so i think you have you know basically almost the same number of steps if anything it's actually is less and less of a step because the reply brief pages eighteen dollars to nineteen dollars says that for cities and the harm that they're asserting here the tax violation call of the california constitution has a unique feature and this is also like what judge firemen decided just last friday with respect to illinois in which you can't just directly trace a relationship between a property value and the revenue a city's going to get in tax because like take oakland for example  there you can only increase a property's value by two percent a year under the california constitution and so actually in a place like the bay area in which property values tend increased by more than that if you have foreclosures it's certainly not clear that the tax base goes down and indeed it very well may go up so it's actually a clear case to have the electric company or other businesses sue and that's i think our fundamental point to you today which is we get that the fair housing act needs to be implemented and implemented vigorously and congress provided ways to do that they said direct to victims could sue they said you could have class actions that even had fee shifting provisions for attorneys fees and costs and things like that they said the federal justice department can sue and indeed in this case with respect to oakland they did exactly that they had a nationwide suit and page for the complaint talks about the discrimination in oakland and the consent decree that was issued remedied what happened in oakland you have states and localities that are empowered under congress to sue under section three thousand six hundred and ten dollars and you have n g o s that can sue as well which you don't have in the statute is the ability for the city to bring this kind of lawsuit in which you have to go through it's not just several steps as judge margaret was saying a moment ago it's also several different actors that take that are involved and the harm here is fully derivative the city isn't saying we suffered some harm that nobody else has suffered they're saying as a result of the foreclosures and other things our tax base went down we think yes there are many steps but it's more than that it's exactly what this court decided in oregon labor you know a few years ago which is look you can provide a regression study and maybe that's going to show likelihood of harm but it's never going to satisfy the proximate cause requirement which is showing that there are some independent harm that's not to rivet it if i was to make the best argument for i think my friend on the other side as i see it it would be this it would be we have a regression study and that regression study shows  likelihood of discrimination and ultimately reduced tax tax flows we think there are several problems with that one is they're not showing one regression study their smushing together three different studies that say three different things to try and get them to that point but even if you got them to that point all it shows is likelihood of harm that's exactly what was the issue in oregon in oregon labor's it's issue in lots of the proximate cause cases like me it's even in bank of america the idea that just because something is foreseeable and you can have a study that only shows but for causation it doesn't show proximate cause and the supreme court was very clear in the city of miami standard would possibly require us to contradict all of the supreme court decisions such as gladstone traffic can't and haven so can you tell me how your proposed categorical proximate cause standard wouldn't necessarily be contradictory to those screen court decisions yes absolutely judge them again so st of all none of those three decisions say a word about proximate cause they're standing cases so just to take gladstone for example at page ninety three of the case wrote about statutory and constitutional questions concerning standing to sue under the fair housing act and i understand i understand that those cases addressed standing but under your standard it seems like the town in gladstone the tenants in traffic can organization in the hope and would not have been able to recover for their injuries but they did recover for their injuries so i'm just i'm just curious what likely to reconcile the strict standards that you're asking us to stop with the outcome in those cases if you could yes absolutely just we're going to be very clear we are not saying anything before this court that calls into question any of the language or ultimate results that happened in any opinion of the supreme court's opinion where they summarize it here's what they say they say quote if petitioner steering practices significantly reduce the total number of buyers in the bellwood housing market because some buyers are being steered away quote prices may be deflected downward and that is just a simple supply and demand point that the court was making they're saying there's a bunch of discriminatory brokers there showing property only to certain people  property only to sir people not everyone who would want to see it and just standard economics would say if you're showing property to fewer people you have less demand and a lower price we're not calling that into question at all judgment we're saying that is a kind of much more direct link to the extent you wanted to read this case is a proximate cause case the problem is here you go through so many different steps even the district court here at your seventeen recognize exactly that that that's a much more attenuated chain of causation you have nothing for example like the tax point that i made to you a moment ago about the california constitution you don't have any of that because you have a very simple relationship in glad stone of supply and demand you have fewer buyers looking at a certain property prices are going to go and you know i'm sure that there are other folks who want to quibble with whether or not that actually does satisfy proximate cause our point is you can see that early on in the st or nd maybe nd step but you can't see it the way that this complaint comes to the court which is so far away and i think that raises a more general point which is this city's lawsuit is very  newfangled we've never had a can even point to a successful example ever in history of a lawsuit like this the fair housing act been around since before i was born so it's not as if what we're coming in and saying is cut off some you know important remedy that's been used to enforce the fair housing act rather congress empowered so many different actors to enforce the fair housing act as i mentioned before direct victims and things like that you mention two other  examples and we it to other cases and nothing we're saying contradicts those as our reply brief goes through with respect to havens we do agree if a city had a havens like injuries for example if they set up an office to combat discrimination then and promote diversity and if a bank's practices was undermining that we do think just like the plaintiffs in havens they would be able to recover if they could make their case you know if i could just ask one question you made reference to the regression studies and how they're much together and i think you said no amount of regression study something to that effect could ever be sufficient under the face of a motion to dismiss foreclosures reduced the value of foreclosed properties in the properties near by i mean you're arguing that they're like no there's no number of regression studies if they had seven or eight that were covered sort of every  can you still not defeat a motion to dismiss proximate causes or just this can't be done right you just call you can't and more is not better more is actually worse or stitching together different things with different assumptions and let me explain why st of all just i want to i think the premise of your question from listening to it is you think that maybe it sounds like you're saying motions to dismiss should have a different standard or something like that or you know let you know it's a pleading standard yes all  bridge and most importantly york well york sitting by the as i said the th circuit decision in oregon laborers in which they had exactly the same kind of statistical argument and the reason to get to the reason why not just the precedent but the reason is all the reversed by the u s supreme court so if we accept your argument today an issue a decision along the lines you are requesting does that put the nice are going to conflict with the th circuit like miami two no i  court to vacate that under the supreme court's munsey where doctrine the supreme court's going to decide that it's certainly the case that we do think that the th circuit got things wrong and perhaps that's why you can ask them they've decided not to defend it anymore in the supreme court but if you did look at the th circuit decision we don't think it's persuasive for the reasons we explain and judge feinerman just three days ago in the northern district of illinois also found it not persuasive and the reason is proximate cause has go mean something we don't want to open the door as their argument does to municipal electric companies businesses other brokers being able to sue there's already enough people that can enforce and do enforce the fair housing act the questions of the family members took some of your time we'll give you an extra two minutes of argument so that you can provide a rebuttal or q thank you judge cool do appreciate it please the court robert kuttner on behalf of the city of oakland city of miami articulated a number of general principles to guide the kind of decision that this court faces it said that there mike there must be some direct relation between the injury and the violation of the statute some is a qualifier they said that there needs to be a jet there is a general tendency a general tendency with regard to damages to not go beyond the st step that does not mean a hard and fast rule and then they define the st step as dependent on the nature of the statutory cause of action which followed an opposition to a motion to stay the my the ongoing activity in the district court as you know a motion to stay requires you to say that show that number one that four justice the supreme court are likely to grant the petition for certiorari that number two that five justices are likely to reverse the court and three that there's irreparable damage we opposed it it went to justice thomas is the circuit justice justice thomas wrote the concurring in part and dissenting in part opinion in city of miami so if any justice would have been simply sympathetic to wells fargo it would have been him and he denied the stay we think that's good strong persuasive value in fact the district court in this circuit in the city of sacramento case found a highly persuasive so did two recent just records in maryland meanwhile my friend also mentioned the recent decision of a short question would it make sense for us too all of our decision until the supreme court acts on the motion to vacate so that we know whether we have a circuit split or just a question of persuasive us let me say just that i don't think it's necessary to wait that although i'm i'm sure that we will get a decision from the supreme court very quickly they do tend to act quickly on these sorts of things but as i said you know the persuasive value of the th circuit's decision i think still has has legs obviously affected two courts in the o in city of miami they explicitly refused to draw the precise lines that proximate cause has under the f h a they constantly emphasize that we're talking about the f h a and that has something different  because despite the fact that the direct drive their principles distilled them from rico cases and rico cases also have common law foundations they are operate on different common law principles and so therefore that tells you that proximate cause is a statutorily specific inquiry and that's why you have to look at the text and you have to look at the legislative history and wells fargo provides no legislative history briefing so the fact is that what we learned from holmes also is that legislative history is important and also what justice demands this also emphasizes the nature of the statutory cause of action now in the city and what we hear from wells fargo is many of the arguments that they put forth before the supreme court on the standing question and they're redressing them up as proximate cause questions and they try to say well standings in the separate box that you don't enter again but the fact of the matter is there's a a relationship between the stand question and the proximate cause question because again that helps you understand the nature of the statutory cause of action so what you drive in is that it's important to understand who was indeed describe it in great detail and they talk about the effect on the tax base they didn't talk about try cleaners and electric companies and local grocers and flower shops they talked about this because cities and their tax base was absolutely part of what they were considering when they passed the fair housing act and we know from gladstone despite the fact that my friend says it's a matter of economics we know from gladstone that the injury from discrimination affects the community as a whole and affects the taxpayer a piece where property values go down that's an immediate direct impact but some said and despite the fact that it may have been based on a different set of discriminatory practices though the supreme court said that gladstone was on all fours with city of miami that it was essentially one that required them to find the standing that they did and one that also i claims and why isn't the threat of those types of lawsuits sufficient to deter a bank like wells fargo here because they're almost never brought in of course class actions are much more difficult to bring these days than they were when the fair housing act was passed but still the type of injury we're talking about here is one where minorities are offered unknown to them riskier and more expensive loans are offered to similarly situated in minority bars and as a result they don't recognize that they've been discriminated against they go through and they pay their loans until suddenly it catches up with them in the way that causes the foreclosures and so i also submit this number of steps are so small that in fact there's the discriminatory loan the default in foreclosure essentially a single step and that means lower property values which is the injury to the city so if anything it may be a three step process it might even be just a two step process and of course that process contracts even more when there's a refusal by the bank to refinance loan because we already know they are under the pressure of a discriminatory loan but to return also to the fact that because they don't recognize that the citizen is unique position to recognize locally what is happening whether there is the statistical variations that will lead to disparate impact and an effect on their residence and the justice department lawsuit was only about subprime loans which ended in two thousand a this lawsuit which was filed in two thousand and fifteen and has a two years statute of limitations involves loans that have gone on since then as well as some of the loans that were prior to the two thousand and eight cut off period and so as a result what the department of justice did not do is bring a lawsuit to benefit oakland for these loans that brought a nationwide suit that was not specific to one council judge pool if i may as a question s supreme court that's ever said that in a case of great if this is a case of create national importance that it would be superior to assess the issue of whether a claim misstated after there's some some evidence well we know that of course that under the summary judgment standard and there is lots of cases there that indicate that  kind of inquiry which is a factual in court it's a combination of law in fact and so therefore submitted to the fact finder is something that is better determined at a summary judgment stage than a motion to dismiss stage we know also that the plausibility standard is all that has to be met in order to survive a motion to dismiss we submit that the us to to sticks which go to the administrative possibilities and convenience which we think informs is informed by the homes factors as the just report described it therefore allow you to look at that we don't think that organ  labor changes that organ labor was probably dicked as the district court noted because it was not an issue that was argued and on top of that there's not much analysis this was a smoking cessation program in which that the question was how many of these smokers would have quit smoking if the so smoking cessation program had been instead in place and then this fund would not have of had to pay to its participants money to help them quit different basically not meeting the proximate cause standard so we think that the property values which was clearly within the contemplation of congress is clearly the classic kind of under the fair housing act these claims were brought more than a decade ago by baltimore and memphis were settled as part of the department of justice's lawsuit and so therefore there's nothing unique or special about this the fact that  resulted in salary differentials and the court accepted that not only did they find that the statistics were sufficient but even if they didn't include all the factors they would be anough to prove the case and here we've used all the possible factors now wells fargo races job loss and divorce and medical issues but those issues are not tied to race and so therefore they affect everybody across the board they're part of  the the decision to give the mortgage in the st place so as a result they're not factors that will differentiate the minority borrows from the non minority bars and so therefore they're not a factor that needs to be taken into account so in the end i think what we can say is there are two principles to be drawn not the principles wells fargo brings that of whether anyone else can bring the lawsuit because the city's just injury is distinct it comes from the same nucleus of o facts but so would an auto accident that hurts two different people and so here what we have are is it integral to the statutory cause of action that's the nature of the statutory cause of action we think it act and lexmark did not have a standard so as a result the court had to look and say to a non competitor who's injury was derivative of the remanufacture is who were it's quiet and say well you're a further step removed but it's a lanham act really had to suppress this kind of false advertising as affecting more than the remanufacture is but also the people who supply a part to them and so as a result we're going to recognize your injury as well i think like that because there is no explicit text that adopts a proximate cause standard and we know that a common law as well isn't within statutes there are different proximate cause that standards justice scalia in the holmes says even within rico there are different standards depending on whether the predicate act is sports bribery or transporting stolen goods those would require different process because standards and so therefore we think that you have to adopt a standard that is specific to the f h a that takes into account the fact that there is no discontinuity here and and instead that the city can go and pursue its claims  with respect i think my friend distorts what the supreme court did both in two thousand and seventeen and in two thousand and nineteen you heard him talk about the twenty seven thousand city of miami decision he quoted one part about some direct relation what you never heard him talk about was  language i started the argument with from the supreme court about the ripples of harm and how the court wants to make sure that the statute doesn't extend to wherever those ripples travel you never heard him deny that the electric company will now be able to sue or the flower shop or the broker or all of these other folks they permit all of those ripples to sue and then with respect to twenty nine thousand dollars he said something astonishing he said the supreme court because it denied a stain motion is saying something about the merits of that serp attention which of course it's very clear precedent that a supreme court denial of the state doesn't say anything about the merits and to the extent he believes that i would think he wouldn't want to have withdrawn voluntarily his own cert petition with respect to the arguments he made on the merits he said we didn't cite anything about legislative history well that's of course because we cite the text of the statute and supreme court precedents and precedents from this court and there is no legislative history points to none saying that cities can bring these kinds of lawsuits nothing at all and to the extent you want to stretch the legislative history where it says that that cities are harmed that language also says businesses like flower shops are harmed so you would again be enabling all of that  i think the most important point he said is well other folks have difficulty suing so therefore the city should be able to that is not the exception to the proximate cause requirement lexmark is clear you have to be barred from being able to sue like the competitor like the zoomers in that case it just because something is difficult doesn't mean you can stretch the probable cause requirement he has not a single cite for that proposition and either this court or the united states supreme court and judge murky you know he talked about gladstone and said it's the same thing we agree that the property injury is the same at the end if you have lower property tat tat property taxes you have a lower money going into a city but the path to getting there is totally different and gladstone as i explained it page one hundred and ten it is a very direct path here it is an attenuated one that goes through several steps and is a fully derivative injury exactly what organ laborers in the rd circuit decision a quote which is not ticked says so you yes no thank you ok let me just comment this is obviously a very important case and it's also been excellently argued by