Opinion ID: 4558819
Heading Depth: 4
Heading Rank: 1

Heading: The nature of the statutory cause of action.

Text: Evaluating the nature of the statutory cause of action in this case requires a close review of the FHA’s text and legislative history to glean what Congress intended to be the scope of the statute’s proximate-cause requirement. See Holmes, 503 U.S. at 267 (“The key to the better interpretation [of a statute’s proximate-cause requirement] lies in some statutory history.”). Oakland, and several friends of the court, persuasively argue that the text and legislative history of the FHA and its 1988 amendments indicate that Congress intended the scope of the statute’s proximate-cause requirement to be far-reaching, and to include aggregate, city-wide injuries. We begin with the text of the FHA, which reveals that Congress intended the statute to provide redress for a multitude of injuries that result from housing discrimination. Indeed, the FHA is widely considered one of the most capacious civil rights statutes, in large part due to its broad language. For example, its first section declares that the law’s purpose is “to provide, within constitutional limitations, for fair housing throughout the United States.” 42 U.S.C. § 3601. Unsurprisingly, the Supreme Court has interpreted “[t]he language of the Act [as] broad and inclusive,” warranting “a generous construction” that allows claims from parties “act[ing] not only on their own behalf but also ‘as private attorneys general in vindicating a policy that Congress considered to be of the highest priority.’” Trafficante v. Metro. Life Ins. Co., 409 U.S. 205, 209, 211– 12 (1972) (quoting Brief for the United States as Amicus Curiae, id. (No. 71-708), 1972 WL 136282, at ). Most relevant to this appeal is the FHA’s broad definition of the 22 CITY OF OAKLAND V. WELLS FARGO & CO. term “person aggrieved.” Indeed, “[t]he definition of ‘person aggrieved’ contained in [the FHA] is in [its] terms broad, as it is defined as ‘any person who claims to have been injured by a discriminatory housing practice.’” Id. at 208 (emphasis added) (quoting 42 U.S.C. § 3602(i)(1)). Other parts of the FHA also underscore that Congress intended its application to be very broad, beyond merely prohibiting discrimination in the sale or rental of housing. Surely, the FHA is most known for making it unlawful “[t]o refuse to sell or rent . . . or otherwise make unavailable or deny, a dwelling to any person because of race,” and “[t]o discriminate against any person in the terms, conditions or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race.” 42 U.S.C. § 3604(a)–(b). But the FHA also prohibits a host of other forms of insidious housing-related discrimination, such as publishing housing-related notices or advertisements with racial preferences, misrepresenting that a dwelling is not available to a person because of their race, and inducing a person to sell or rent a dwelling by making “representations regarding the entry or prospective entry into the neighborhood of a person or persons of a particular race.” Id. § 3604(c)–(e). As to the particular cause of action at issue in the instant case, the FHA prohibits “any person or other entity whose business includes engaging in residential real estate-related transactions to discriminate against any person in making available such a transaction, or in the terms or conditions of such a transaction,” including in loans “for purchasing, constructing, improving, repairing, or maintaining a dwelling.” Id. § 3605(a), (b)(1)(A) (emphasis added). Based on this far-reaching language, Congress clearly CITY OF OAKLAND V. WELLS FARGO & CO. 23 intended the FHA to tackle discrimination throughout the real estate market. Even though the text of the statute is sufficient to establish that Congress intended the FHA’s proximate-cause requirement to be very broad, we also look at the FHA’s legislative history to discern what Congress intended the statute’s remedial aims to be, and whether aggregate, citywide injuries fall within the scope of its proximate-cause requirement. Cf. Blue Shield of Va. v. McCready, 457 U.S. 465, 478 (1982) (analyzing “the relationship of the injury alleged with those forms of injury about which Congress was likely to have been concerned . . . in providing a private remedy under [the Clayton Act]”); Associated Gen. Contractors, 459 U.S. at 538 (reiterating the importance of legislative history in evaluating whether an injury “falls squarely within the area of congressional concern” in the context of the Sherman Act (quoting Blue Shield, 457 U.S. at 484)). The FHA’s legislative history underscores that Congress intended the statute to reach beyond those individuals who are the immediate victims of direct discrimination, such as tenants, homebuyers, and home-loan borrowers. There is no doubt that Congress intended the statute to cover aggregate, city-wide injuries. The Supreme Court discussed the legislative history of the FHA in Trafficante, where two tenants of an apartment complex sued their landlord because its race-based discrimination of potential non-White tenants deprived them of “the social benefits of living in an integrated community.” 409 U.S. at 208. The Court explained that the legislative history of the FHA established that “[w]hile members of minority groups were damaged the most from discrimination in housing practices, the proponents of the legislation emphasized that those who were not the direct objects of 24 CITY OF OAKLAND V. WELLS FARGO & CO. discrimination had an interest in ensuring fair housing, as they too suffered.” 409 U.S. at 210 (emphases added). Citing to statements by United States senators who sponsored the bill, the Court held that “the whole community” is the “victim of discriminatory housing practices” under the FHA because “the reach of the proposed law was to replace the ghettos ‘by truly integrated and balanced living patterns.’” Id. at 211 (quoting 114 Cong. Rec. 2706, 3422). Therefore, the Court read the FHA’s legislative history in Trafficante to suggest that Congress intended the scope of the statute’s proximate-cause requirement to reach, at the very least, beyond the immediate injuries suffered by individuals directly being discriminated against. Our own review of the Congressional Record reveals that Congress enacted the FHA not only to address direct discrimination but also to reshape in meaningful ways the landscape of American cities. Indeed, the entire purpose of the statute was to target and reverse the large-scale insidious effects of discrimination, including racial and economic segregation within cities, suburban flight, and urban decay. We have no doubt that Congress was keenly focused on the impact that discriminatory housing practices, including discriminatory lending, were having on cities and their tax base. Congress therefore clearly intended the proximatecause requirement of the FHA to reach neighborhood-wide and city-wide injuries. For example, Senator Walter Mondale—who was the chief sponsor of the bill that eventually became the FHA— explained that the statute was intended to reform entire neighborhoods: [O]vert racial discrimination remains in one major sector of American life—that of CITY OF OAKLAND V. WELLS FARGO & CO. 25 housing. . . . [F]air housing is one more step toward achieving equality in opportunity and education . . . . The soundest, long-range way to attack segregated schools is to attack the segregated neighborhood. . . . [I]n truly integrated neighborhoods people have been able to live in peace and harmony—and both [Black persons] and [W]hites are the richer for the experience. 114 Cong. Rec. 3421, 3422 (Feb. 20, 1968) (emphases added). Senator Edward Brooke—a co-sponsor of the FHA— underscored that the law’s purpose was to help cities fight the economic and social problems that result from segregation. He asked, “[a]s segregation continues to grow . . . will not the cities which house the majority of the nation’s industrial and commercial life find themselves less and less able to cope with their problems, financially and in every other way?” Id. at 2988 (Feb. 14, 1968) (emphases added). Even more relevant to Oakland’s claims, Senator Mondale specifically and repeatedly referenced cities’ “declining tax base” as one of the large-scale injuries that the FHA was designed to mitigate. Id. at 2274 (“Declining tax base, poor sanitation, loss of jobs, inadequate educational opportunity, and urban squalor will persist as long as discrimination forces millions to live in the rotting cores of central cities.” (emphasis added)). In no uncertain terms, he underscored that continued housing discrimination would “lead to the destruction of urban centers by loss of jobs and businesses to the suburbs, a declining tax base, and the ruin brought on by absentee ownership of property.” Id. at 2993 26 CITY OF OAKLAND V. WELLS FARGO & CO. (emphasis added). Therefore, he said, “[f]air housing legislation is a basic keystone to any solution of our present urban crisis.” Id. 2275 (emphasis added). Given the statutory text and the statements from the statute’s sponsors—especially Senator Mondale’s reference to a “declining tax base”—we have no difficulty concluding that Oakland’s city-wide financial injury claims fall squarely within the FHA’s intended purposes, which include helping cities fight the insidious and large-scale effects of housing discrimination on a neighborhood-wide and city-wide basis. N. Haven Bd. of Educ. v. Bell, 456 U.S. 512, 526–27 (1982) (explaining that “remarks . . . of the sponsor of the language ultimately enacted[] are an authoritative guide to the statute’s construction.”); Fed. Energy Admin. v. Algonquin SNG, Inc., 426 U.S. 548, 564 (1976) (“As a statement of one of the legislation’s sponsors, this explanation deserves to be accorded substantial weight in interpreting the statute.”). Congress reiterated its commitment to a broad and inclusive application of the FHA when it revisited the statute in 1988. That year, Congress strengthened the FHA’s enforcement mechanisms to “remov[e] barriers to the use of court enforcement by private litigants,” noting that the FHA, up to that point, had “fail[ed] to provide an effective enforcement system.” H.R. Rep. No. 100-711, at 13 (1988). See generally Fair Housing Amendments Act of 1988, Pub. L. No. 100-430, 102 Stat. 1619 (1988). These amendments “strengthen[ed] the private enforcement section by expanding the statute of limitations, removing the limitation on punitive damages,” and updating the attorney’s fees section to match similar sections in other civil rights statutes. H.R. Rep. No. 100-711, at 17. According to Senator Edward Kennedy—who sponsored the 1988 amendments—these changes were necessary because the FHA “proved to be an CITY OF OAKLAND V. WELLS FARGO & CO. 27 empty promise because the legislation lacked an effective enforcement mechanism.” 134 Cong. Rec. 10454 (1988). Undoubtedly, when Congress revisited the FHA in 1988, it expanded its reach and reiterated its broad and inclusive purpose. Significantly, by the time Congress amended the FHA, the Supreme Court had long held in Gladstone Realtors v. Village of Bellwood, 441 U.S. 91, 110–11 (1979), that cities had standing to sue under the FHA because “[a] significant reduction in property values [caused by racially discriminatory housing practices] directly injures a municipality by diminishing its tax base, thus threatening its ability to bear the costs of local government and to provide services.” (emphasis added). Rather than overturn Gladstone, the House Report on the amendments explicitly states that the bill “reaffirm[ed] the broad holdings of [Gladstone and its progeny].” H.R. Rep. 100-711, at 23 (emphasis added) (citing Gladstone, 441 U.S. at 91). In no uncertain terms, Congress explicitly endorsed lawsuits by cities and municipalities under the FHA. Tex. Dep’t of Hous. & Cmty. Affs. v. Inclusive Cmtys. Project, Inc., 135 S. Ct. 2507, 2520 (2015) (“Congress’ decision in 1988 to amend the FHA while still adhering to the operative language in §§ 804(a) and 805(a) is convincing support for the conclusion that Congress accepted and ratified the unanimous holdings of the Courts of Appeals finding disparate-impact liability.”); see also Forest Grove Sch. Dist. v. T.A., 557 U.S. 230, 243 n.11 (2009) (“When Congress amended [the statute at issue] without altering the text of [the relevant provision], it implicitly adopted [the Supreme Court’s] construction of the statute.”). After reviewing the FHA’s text and legislative history, we conclude that Congress clearly intended the “nature of 28 CITY OF OAKLAND V. WELLS FARGO & CO. the statutory cause of action” at issue in this case to be broad and inclusive enough to encompass less direct, aggregate, and city-wide injuries.