In the

United States Court of Appeals

For the Seventh Circuit ____________________ 

No. 22-1407 

COUNTY OF COOK, ILLINOIS, 

Plaintiff-Appellant, 

v.

BANK OF AMERICA CORPORATION, et al., 

Defendants-Appellees. 

____________________ 

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 14 C 2280 — Elaine E. Bucklo, Judge. 

____________________ 

ARGUED OCTOBER 27, 2022 — DECIDED AUGUST 16, 2023 

____________________ 

Before EASTERBROOK, RIPPLE, and WOOD, Circuit Judges. 

EASTERBROOK, Circuit Judge. Cook County contends that a 

number of banks operating in northern Illinois made credit 

too readily available to some borrowers, who defaulted, and 

then foreclosed on the loans in a way that injured the County. 

It filed this suit in 2014 under the Fair Housing Act, 42 U.S.C. 

§§ 3601–19 (FHA or the Act). 
2 No. 22-1407 

According to the County, the banks targeted potential minority borrowers for:

(a) unchecked or improper credit approval decisions ... , which 

allowed [them] to receive home loans they could not afford; (b) 

discretionary application of surcharges ... of additional points, 

fees, and other credit and servicing costs over and above an otherwise objective risk-based financing rate for such loan products; 

(c) ... higher cost loan products; and (d) undisclosed inflation of 

appraisal values ... to support inflated loan amounts ... . 

584 F. Supp. 3d 562, 565 (N.D. Ill. 2022) (summarizing the 

complaint). When many of the borrowers could not repay, the 

County asserts, it had to deal (at its own expense) with vacant 

properties, and it lost tax revenue and transfer fees. The 

County maintains that the Act entitles it to recompense.

The sort of claim that Cook County advances is not novel. 

A similar claim reached the Supreme Court in 2017, and the 

Justices held that the Act provides relief only for injury proximately caused by a statutory violation. Bank of America Corp. 

v. Miami, 581 U.S. 189 (2017). The Court stated that “foreseeability alone is not sufficient to establish proximate cause under the FHA” (id. at 201), because

foreseeability alone does not ensure the close connection that 

proximate cause requires. The housing market is interconnected 

with economic and social life. A violation of the FHA may, therefore, “be expected to cause ripples of harm to flow” far beyond 

the defendant’s misconduct. Nothing in the statute suggests that 

Congress intended to provide a remedy wherever those ripples 

travel. And entertaining suits to recover damages for any foreseeable result of an FHA violation would risk “massive and complex 

damages litigation.”

Rather, proximate cause under the FHA requires “some direct relation between the injury asserted and the injurious conduct alleged.” ... [W]e have repeatedly applied directness principles to 
No. 22-1407 3 

statutes with “common-law foundations.” “The general tendency” in these cases, “in regard to damages at least, is not to go 

beyond the first step.”

Id. at 202–03 (cleaned up). The Court relied for this conclusion 

on decisions under both the antitrust laws and RICO. See, e.g., 

Associated General Contractors of California, Inc. v. Carpenters 

Union, 459 U.S. 519, 534 (1983); Holmes v. Securities Investor 

Protection Corp., 503 U.S. 258, 268 (1992); Hemi Group, LLC v. 

New York, 559 U.S. 1, 10 (2010). 

Cook County seeks a remedy for effects that extend way

beyond “the first step.” The directly injured parties are the 

borrowers, who lost both housing and money. The banks are 

secondary losers, for they did not collect the interest payments that the borrowers promised to make and often did not

recover even the principal of the loans in foreclosure sales. 

The County is at best a tertiary loser; its injury derives from 

the injuries to the borrowers and banks.

The district court granted summary judgment to the defendants, relying in large part on Miami. 584 F. Supp. 3d 562 

(N.D. Ill. 2022). The district court also relied on Oakland v. 

Wells Fargo & Co., 14 F.4th 1030 (9th Cir. 2021) (en banc), in 

which a unanimous court held that Miami forecloses relief in 

a suit similar to Cook County’s.

The County argues on appeal that the remedy need not

stop with “the first step”, because the banks engaged in an 

“integrated equity-stripping scheme” (the County’s words). 

The County finds support for this exception to Miami in the 

Eleventh Circuit’s decision on remand in Miami itself. Miami 

v. Wells Fargo & Co., 923 F.3d 1260 (11th Cir. 2019). But the Supreme Court vacated that decision as moot, Wells Fargo & Co. 
4 No. 22-1407 

v. Miami, 140 S. Ct. 1259 (2020), which strips it of any value as 

precedent.

As an original matter, the need to address a “scheme” that 

entails multiple steps and multiple remote injured parties is a 

reason to apply the Supreme Court’s analysis in Miami, not to 

avoid it. One phrase—whether it be “integrated equitystripping scheme” here or “tax avoidance” in Hemi Group—

may comprise multiple steps and many layers of injury. That 

a single phrase can be devised does not justify suit by 

remotely injured parties.

The district court added that the summary-judgment record would not allow a jury to find that any “integrated equitystripping scheme” existed. 584 F. Supp. 3d at 568–70. The record shows instead that individual banks developed their own

programs, at different times, for their own reasons. The district judge observed that the County’s expert conceded that 

an “integrated equity-stripping scheme” would not have 

made economic sense for the banks, which would have been 

among the major losers from inability to recoup their investments. Id. at 569. 

The district judge wrote a long opinion covering these and 

many more issues. The parties’ appellate briefs have tried to 

address almost all of these potential issues, so they are even 

longer than the district court’s opinion. But none of the additional grounds of debate matters to the outcome, once we conclude (as we have) that the right plaintiffs are those who suffer 

the first-tier injuries. Anything more that might be said—such 

as the fact that a long causal chain poses administrative problems beyond a federal judge’s skills—was said by the Ninth 

Circuit in Oakland; repetition would be otiose.

AFFIRMED
No. 22-1407 5 

RIPPLE, Circuit Judge, concurring. I join the judgment of the 

court. I write separately because I would affirm the judgment 

on different grounds.

Cook County sued the defendants (the “banks”) under the 

Fair Housing Act (“FHA”), 42 U.S.C. § 3601 et seq., alleging 

that the banks targeted African American and Hispanic home 

buyers in Cook County for predatory mortgages and other 

loan products. The County alleged three counts: a disparateimpact claim alleging an “equity stripping scheme” based on 

facially neutral loan origination, servicing and foreclosure 

policies and practices (Count I); a disparate-impact claim 

based on “facially neutral mortgage servicing and foreclosure 

practices” (Count II); and a disparate-treatment claim based 

on the banks’ “discriminatory equity stripping scheme” 

(Count III).1

The County alleged that, as a result of the banks’ 

predatory loan practices, it had suffered various harms, including lower property-tax values for homes in the County, 

the cost of providing municipal services to abandoned and 

vacant properties, and the cost of processing an increased 

number of foreclosures.

The district court granted in part a motion to dismiss filed 

by the banks. The court concluded that the County’s alleged 

property-tax and municipal-services damages were not proximately caused by the banks’ alleged discrimination under 

Bank of America Corp. v. City of Miami, 581 U.S. 189 (2017). The 

court allowed the County to proceed on the basis of the outof-pocket costs the County claimed to have incurred in administering and processing the foreclosures. The district court 

then excluded the expert testimony of two of the County’s 

1 R.177 at 133, 141, 145.
6 No. 22-1407 

expert witnesses—Dr. Gary Lacefield and Dr. Charles 

Cowan—under Federal Rule of Evidence 702 and Daubert v. 

Merrell Dow Pharms., 509 U.S. 579 (1993) and granted summary judgment for the banks. 

The majority opinion, relying on City of Miami, concludes 

that the FHA does not provide relief for Cook County because 

the County did not suffer “first-tier injuries.” In City of Miami, 

the Supreme Court considered Miami’s claims that the discriminatory lending practices of Bank of America and Wells 

Fargo violated the FHA. The Court held that, “to establish 

proximate cause under the FHA, a plaintiff must do more 

than show that its injuries foreseeably flowed from the alleged statutory violation”; “proximate cause under the FHA 

requires ‘some direct relation between the injury asserted and 

the injurious conduct alleged.’” Id. at 1301, 1306 (quoting 

Holmes v. Securities Investor Protection Corporation, 503 U.S. 258, 

268 (1992)). The Court explained that it has “repeatedly applied directness principles to statutes with ‘common-law 

foundations,’” and “[t]he general tendency in these cases, in 

regard to damages at least, is not to go beyond the first step.” 

Id. at 1306 (cleaned up) (quoting Anza v. Ideal Steel Supply 

Corp., 547 U.S. 451, 457 (2006); Hemi Group, LLC v. City of New 

York, 559 U.S. 1, 10 (2010)). “What falls within that ‘first step’ 

depends in part on the ‘nature of the statutory cause of action,’ and an assessment ‘of what is administratively possible 

and convenient.’” Id. (citation omitted) (quoting Lexmark Intern., Inc. v. Static Control Components, Inc., 572 U.S. 118, 133 

(2014); Holmes, 503 U.S. at 268). The Court declined “to draw 

the precise boundaries of proximate cause under the FHA” or 

“to determine on which side of the line” Miami’s alleged financial injuries (diminished property-tax revenue and increased demand for municipal services) fell. See id. 
No. 22-1407 7 

The Ninth and Eleventh Circuits have reached inconsistent conclusions regarding whether, under the FHA, banks’ 

discriminatory loan practices can proximately cause injuries 

such as those alleged by Cook County. In City of Oakland v. 

Wells Fargo & Co., 14 F.4th 1030 (9th Cir. 2021) (en banc), the 

Ninth Circuit sitting en banc held that Oakland’s reduced tax 

revenue and increased municipal expenditures were downstream “ripples of harm” that were too attenuated and traveled “too far beyond” Wells Fargo’s alleged discriminatory 

lending practices to establish proximate cause under the FHA.

In City of Miami v. Wells Fargo & Co., 923 F.3d 1260 (11th Cir. 

2019), which the Supreme Court vacated as moot because Miami voluntarily dismissed the lawsuit while a petition for writ 

of certiorari was pending, the Eleventh Circuit concluded 

that, at the motion to dismiss stage, Miami had adequately 

pled proximate cause under the FHA in relation to the injury 

to its tax base but not in relation to an increase in expenditures 

on municipal services.

In my view, prudence counsels against reaching the question of proximate causation under the FHA in this case. Instead, I would affirm the judgment of the district court on evidentiary grounds. 

The County’s claims rely in large part on the expert testimony of Drs. Lacefield and Cowan, which the district court 

excluded as unreliable. “We review de novo whether a district 

judge has followed Rule 702 and Daubert.” Kirk v. Clark Equipment Co., 991 F.3d 865, 872 (7th Cir. 2021) (quoting Haley v. 

Kolbe & Kolbe Millwork Co., 863 F.3d 600, 611 (7th Cir. 2017)). 

“If the court correctly applied the Rule 702/Daubert framework, we review [its] decision to admit or exclude expert testimony for abuse of discretion.” Id. (internal quotation marks 
8 No. 22-1407 

omitted). “Under that standard, [s]o long as the district court 

adhered to Daubert’s requirements, we shall not disturb the 

district court’s findings unless they are manifestly erroneous.” Id. (internal quotation marks omitted) (quoting Naeem v. 

McKesson Drug Co., 444 F.3d 593, 607–08 (7th Cir. 2006)). 

The district court correctly applied the Daubert analysis 

and did not abuse its discretion in excluding the testimony of 

Drs. Lacefield and Cowan. Dr. Lacefield asserted that he 

could discern whether loans were discriminatory by looking 

at the loan data for various “delimiters,” or lending and servicing characteristics, and comparing the relative presence of 

those “delimiters” in the population of white borrowers as 

compared to African American and Hispanic borrowers. After a thorough evaluation of the expert materials, the court 

concluded that Dr. Lacefield’s methodology not only was 

“untested and unheard-of by others in his field” but also was 

“substantively unsound.”2 The court also excluded the testimony of Dr. Cowan about the banks’ disproportionate foreclosure rates on minority borrowers and the banks’ disproportionate issuance of higher-risk loans, and loans with 

higher annual percentage rates, to minority borrowers and in 

neighborhoods with a high concentration of minority residents. The court concluded that Dr. Cowan’s methodology, 

analyzing loan data aggregated across multiple lenders, products, and decades, was unreliable. The district court acted 

within its discretion in excluding the expert testimony of 

Drs. Lacefield and Cowan. 

Without the expert testimony of Drs. Lacefield and 

Cowan, the County has no basis for its two disparate-impact 

2 R.664 at 33.
No. 22-1407 9 

claims. In Texas Department of Housing and Community Affairs 

v. Inclusive Communities Project, 576 U.S. 519, 542, 545–46 

(2015), the Supreme Court held that disparate-impact claims 

are cognizable under the FHA but explained that “a 

disparate-impact claim that relies on a statistical disparity 

must fail if the plaintiff cannot point to a defendant’s policy 

or policies causing that disparity.” “A robust causality 

requirement,” continued the Court, “ensures that ‘[r]acial 

imbalance ... does not, without more, establish a prima facie 

case of disparate impact’ and thus protects defendants from 

being held liable for racial disparities they did not create.” Id. 

at 542 (quoting Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 

653 (1989)). Because the County sought to prove its disparateimpact claims using the statistical analyses of Drs. Lacefield 

and Cowan, the County’s disparate-impact claims must fail 

once that testimony is excluded. 

That leaves only Count III, the County’s disparatetreatment claim based on the alleged existence of an 

integrated scheme to strip equity from minority borrowers. 

As the district court explained, the record does not support 

the County’s suggestion that the defendants engaged in a 

coordinate scheme to target minority borrowers for loans that 

they could not afford in order to provoke defaults and 

foreclosures. Indeed, Dr. Lacefield, the County’s expert, 

admitted that such a scheme would “not make economic 

sense.”3 Count III therefore also fails. 

Resolving this case on the evidentiary issues in this way 

would allow further percolation on the important, and yet 

3 R.573-15 at 15.
10 No. 22-1407 

undecided, question of the nature of the proximate cause 

analysis under the FHA.