Opinion ID: 4558819
Heading Depth: 3
Heading Rank: 2

Heading: Increased municipal expenses.

Text: Although Oakland plausibly alleges that Wells Fargo’s discriminatory lending practices have some direct relation to its lost property-tax revenues, it fails to do the same for its increased municipal expenses. Miami I, 137 S. Ct. at 1306. At the pleading stage, Oakland must do more than state, in conclusory fashion, its theory of how foreclosures caused by Wells Fargo’s predatory loans proximately caused additional municipal expenses. Iqbal, 556 U.S. at 678 (“[T]he tenet that a court must accept as true all of the CITY OF OAKLAND V. WELLS FARGO & CO. 45 allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” (citing Twombly, 550 U.S. at 555)). Without more, the district court cannot precisely ascertain which increases in municipal expenses are attributable to foreclosures caused by Wells Fargo’s predatory loans to Black and Latino residents. Obviously, the entire increase in Oakland’s municipal expenses over the relevant time period cannot be attributed to Wells Fargo’s alleged predatory lending practices. Because Oakland has not accounted for other independent variables that might have contributed to or even caused the spike in expenses, its claim of increased municipal expenses fails the first Holmes factor, which requires Oakland to plausibly plead that it is possible to ascertain with precision what increase in municipal expenses is attributable to Wells Fargo’s misconduct. 503 U.S. at 269. Accordingly, Oakland’s conclusory proximate-cause allegations as to its alleged increased municipal expenses are implausible and the district court did not err in dismissing them. VI. Oakland’s claims for injunctive and declaratory relief. The district court also asked us to decide whether the FHA’s proximate-cause requirement applies to claims for injunctive or declaratory relief. We hold that it does. The district court was apparently mistaken in its reading of Miami I and other Supreme Court precedents clearly establishing that plaintiffs must satisfy the proximate-cause requirement to receive any form of relief. 137 S. Ct. at 1305–06. Oakland does not dispute this point of law on appeal. 46 CITY OF OAKLAND V. WELLS FARGO & CO. In Miami I the Supreme Court noted that claims for statutory damages are analogous to common law tort actions, and therefore courts “repeatedly applied directness principles to statutes with ‘common-law foundations.’” 137 S. Ct. at 1306 (quoting Anza, 547 U.S. at 457). In doing so, the Court simply established that statutes with common law foundations require a showing of proximate cause. But nowhere in that opinion does the Court state that it requires plaintiffs to allege proximate cause only for damages claims under those statutes. In fact, the Supreme Court does not even mention declaratory or injunctive relief, let alone hold that proximate cause is not required to receive such relief. See generally, id. Furthermore, in Lexmark, the Supreme Court was unequivocal that “[p]roximate causation is . . . an element of the cause of action under the statute.” 572 U.S. at 134 n.6. It specifically underscored that “proximate causation . . . must be met in every case,” even if the plaintiff is not entitled to damages, because “it may still be entitled to injunctive relief.” Id. at 135 (emphasis added). Therefore, the Court applied its proximate-cause reasoning generally to the plaintiff’s false advertising claim without making any distinction based on the type of relief, even though the plaintiff sought both damages and injunctive relief. See id. at 123, 137. Not surprisingly, almost every other court that has reviewed analogous FHA claims in the wake of Miami I has also applied proximate-cause principles to cities’ claims without making any distinction between damages and injunctive relief. See, e.g., Miami II, 923 F.3d at 1268 (applying proximate cause where “[t]he City also asked for a declaratory judgment stating that the Banks’ conduct violated the FHA, [and] an injunction barring the Banks CITY OF OAKLAND V. WELLS FARGO & CO. 47 from engaging in similar predatory conduct”); Sacramento, 2019 WL 3975590, at  (applying proximate cause where “[t]he City seeks declaratory and injunctive relief and damages”); Philadelphia, 2018 WL 424451, at  (applying proximate cause where plaintiff sought an injunction prohibiting further discriminatory conduct). But see Prince George’s County., 397 F. Supp. 3d at 765 (“[T]o the extent that the Counties are seeking injunctive or declaratory relief against Defendants’ alleged equity-stripping practices, the proximate-cause requirement being less strict, the Counties may proceed.” (citing Oakland, 2018 WL 3008538 at )). Accordingly, we reverse the district court’s conclusion that Oakland did not have to satisfy the FHA’s proximatecause requirement as to its claims for declaratory and injunctive relief. On remand, the district court should determine whether Oakland plausibly alleged that its ongoing injuries are being proximately caused by Wells Fargo’s alleged wrongdoing.