Opinion ID: 4558819
Heading Depth: 4
Heading Rank: 2

Heading: Administrative feasibility.

Text: The Supreme Court also instructed us to consider “what is administratively possible and convenient” when deciding the contours of the FHA’s proximate-cause requirement. Miami I, 137 S. Ct. at 1306 (quoting Holmes, 503 U.S. at 268). Administrative feasibility is important because “proximate cause ‘generally bars suits for alleged harm that is “too remote” from the defendant’s unlawful conduct.’” Id. (quoting Lexmark, 572 U.S. at 133 (quoting Holmes, 503 U.S. at 268–69). Therefore, when we decide what is “administratively possible,” we typically ask whether a plaintiff’s alleged injuries are “too remote” to satisfy the proximate-cause requirement of the statute at issue. Holmes, 503 U.S. at 268. In other words, to be administratively feasible, an indirect injury must have “some direct relation” to a defendant’s violative conduct. Id. The administrative feasibility analysis was outlined by the Supreme Court in its seminal decision in Holmes. In that case, the Supreme Court laid out three factors that govern whether an indirect injury is administratively feasible and convenient under a given statute: (1) whether it is possible to ascertain “a plaintiff’s [indirect] damages attributable to the violation, as distinct from other, independent, factors”; (2) whether it is possible to “apportion[] damages among plaintiffs removed at different levels of injury from the violative acts, to obviate the risk of multiple recoveries”; and (3) whether allowing recovery for the indirect injury is “unjustified by the general interest in deterring injurious conduct, since directly injured victims can generally be counted on to vindicate the law as private attorneys general.” CITY OF OAKLAND V. WELLS FARGO & CO. 29 Id. at 269–70 (first citing Associated Gen. Contractors, 459 U.S. at 542–44; then citing Blue Shield, 457 U.S. at 473– 75; then citing Hawaii v. Standard Oil Co. of Cal., 405 U.S. 251, 264 (1972); and then citing Associated Gen. Contractors of Cal., Inc., 459 U.S. at 541–42). All three of these factors support a finding that at least some of Oakland’s aggregate, city-wide injuries are administratively feasible and convenient under the FHA. First, relying on its proposed statistical regression analysis, Oakland plausibly alleges that it can precisely calculate the exact loss in property values attributable to foreclosures caused by Wells Fargo’s predatory loans, isolated from any losses attributable to non-Wells Fargo foreclosures or other independent causes, such as neighborhood conditions. Although Oakland has not yet conducted this regression analysis or attached the results to its amended complaint, its explanation of the analysis in its pleadings is neither speculative nor conclusory. In fact, the amended complaint explains in considerable length and meticulous detail exactly how it will conduct the regression analysis to quantify the loss in property values attributable to Wells Fargo’s discriminatory lending. The City also points to other studies that use the same methodology to produce the kinds of results that Oakland will need to rely on to prevail on the merits. In other words, Oakland has offered much more than a purely formulaic recitation of how the FHA’s causation requirement will be met—it has plausibly alleged a harm that is measurable using sophisticated, reliable, and scientifically rigorous methodologies. See Compton v. Countrywide Fin. Corp., 761 F.3d 1046, 1054 (9th Cir. 2014) (“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face’ . . . . ‘[L]abels and conclusions’ or ‘a 30 CITY OF OAKLAND V. WELLS FARGO & CO. formulaic recitation of the elements of a cause of action’ do not suffice.” (first quoting Iqbal, 556 U.S. at 678; and then quoting Twombly, 550 U.S. at 570)). Therefore, taking Oakland’s explanation of the regression analyses in its amended complaint as true, we hold that Oakland has plausibly alleged that it can calculate exactly which lost property-tax revenues are attributable to Wells Fargo’s wrongdoing. Second, there is no risk of duplicative recoveries in this case. In the antitrust context, the Supreme Court has limited lawsuits to directly harmed individuals due to “the risk of duplicative recovery engendered by allowing every person along a chain of distribution to claim damages” from a single violation. Blue Shield, 457 U.S. at 474–75. Here, by contrast, individual borrowers cannot recover for Oakland’s aggregate, city-wide injuries like reduced property-tax revenues or increased municipal expenses, which means there will be no need for the district court to apportion these damages between multiple plaintiffs. Furthermore, the injuries to individual borrowers from Wells Fargo’s predatory loans are completely independent, which means it is entirely possible to apportion the damages directly suffered by the individual borrowers from Oakland’s damages. In fact, in 2017, the Justice Department settled a separate nationwide lawsuit on behalf of individual borrowers against Wells Fargo for the higher borrowing costs and other harmful consequences associated with the same discriminatory lending practices at the core of this case. See Consent Order, United States v. Wells Fargo Bank N.A., No. 1:12-cv-01150 (D.D.C. Sept. 21, 2012), ECF No. 10. No court would allow these borrowers to also recover a City’s lost property-tax revenues. See, e.g., Sacramento, 2019 WL 3975590, at  (concluding that the City’s alleged financial injuries, including lost property-tax revenues “are CITY OF OAKLAND V. WELLS FARGO & CO. 31 unique and uniquely capable of vindication under the FHA”). Third, and finally, the fact that individual borrowers can sue Wells Fargo to vindicate their rights under the FHA does not mean that the City is unjustified in also doing so. Oakland’s lawsuit in no way affects the ability of the individual borrowers to recover from Wells Fargo for the same discriminatory lending practices. The Supreme Court has primarily applied the third Holmes factor in the antitrust context, expressing “concern for the reduction in the effectiveness of those suits if brought by indirect purchasers with a smaller stake in the outcome than that of direct purchasers suing for the full amount of the overcharge.” Ill. Brick Co. v. Illinois, 431 U.S. 720, 745 (1977). Of course, this assumes that more directly harmed parties have a larger stake in deterring wrongdoers, can sue for the entire harm caused by the alleged statutory violation, and will leave no “significant antitrust violation undetected or unremedied.” Associated Gen. Contractors, 459 U.S. at 542. These assumptions hold true in antitrust cases where a price increase affects the distributor and the consumer in the exact same way—they both pay more. Housing discrimination, by contrast, affects different parties in different ways. In the instant case, for example, Oakland has an independent interest in deterring Wells Fargo and other banks from issuing predatory loans because individual borrowers cannot sue Wells Fargo to recover for the City’s aggregate, citywide injuries. Conversely, Oakland was not a part of and did not receive any funds from the $175 million settlement the Attorney General entered into with Wells Fargo in the aforementioned lawsuit brought on behalf of individual borrowers in the District of Columbia. Therefore, the City’s lawsuit in no way “undermin[es] the effectiveness of [the individual borrowers’] suits,” and vice versa. Holmes, 32 CITY OF OAKLAND V. WELLS FARGO & CO. 503 U.S. at 274 (quoting Associated Gen. Contractors, 459 U.S at 545). Moreover, Oakland can better deter Wells Fargo’s discriminatory lending practices because it can sue to remedy the Bank’s systematic misconduct across thousands of home loans, whereas individual residents can only challenge the effects of the discriminatory lending policies on themselves. In sum, all three of the Holmes factors support our conclusion that it is administratively feasible for the district court to administer the aggregate, city-wide injuries that Oakland claims it suffered as a result of Wells Fargo’s unlawful discriminatory lending practices throughout the City.