Court Opinion

ID: 4558819
Source: CourtListenerOpinion
Date Created: 2020-08-26 17:00:43.336942+00
Date Added: 2024-06-11T08:46:02.280028
License: Public Domain

FOR PUBLICATION

    UNITED STATES COURT OF APPEALS
         FOR THE NINTH CIRCUIT

 CITY OF OAKLAND, A Municipal                          No. 19-15169
 Corporation,
                 Plaintiff-Appellee,                     D.C. No.
                                                      3:15-cv-04321-
                       v.                                  EMC

 WELLS FARGO & COMPANY; WELLS
 FARGO BANK, N.A.,                                       OPINION
            Defendants-Appellants.

         Appeal from the United States District Court
           for the Northern District of California
         Edward M. Chen, District Judge, Presiding

           Argued and Submitted February 10, 2020
                  San Francisco, California

                       Filed August 26, 2020

      Before: R. Guy Cole, Jr., * Ronald M. Gould, and
             Mary H. Murguia, Circuit Judges.

                    Opinion by Judge Murguia

     *
       The Honorable R. Guy Cole, Jr., United States Chief Circuit Judge
for the U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
2         CITY OF OAKLAND V. WELLS FARGO & CO.

                          SUMMARY **

                           Fair Housing

    The panel affirmed in part and reversed in part the
district court’s partial grant and partial denial of a motion to
dismiss for failure to state a claim in an action brought under
the Fair Housing Act by the City of Oakland, alleging that
Wells Fargo & Company and Wells Fargo Bank, N.A.,
engaged in discriminatory lending practices by issuing
predatory loans to Black and Latino residents.

    Oakland alleged that the predatory loans caused
widespread foreclosures that reduced the City’s property-tax
revenues and increased its municipal expenses. The panel
affirmed the district court’s denial of Wells Fargo’s motion
to dismiss as to Oakland’s claims for lost property-tax
revenues and the district court’s grant of Wells Fargo’s
motion to dismiss as to Oakland’s claims for increased
municipal expenses. The panel reversed the district court’s
denial of Wells Fargo’s motion to dismiss as to Oakland’s
claims for injunctive relief, seeking to enjoin Wells Fargo
from continuing to issue predatory home loans to Black and
Latino borrowers.

    The panel held that under Bank of Am. Corp. v. City of
Miami, 137 S. Ct. 1296 (2017), to establish proximate cause
under the FHA, a plaintiff must show some direct relation
between the injury asserted and the injurious conduct
alleged. Evaluating the contours of the FHA’s proximate-

    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
        CITY OF OAKLAND V. WELLS FARGO & CO.                 3

cause requirement, the panel reviewed the statute’s text and
legislative history and concluded that Congress clearly
intended the nature of the statutory cause of action to be
broad and inclusive enough to encompass less direct,
aggregate, and city-wide injuries. The panel also concluded
that it was administratively feasible for the district court to
administer the aggregate, city-wide injuries that Oakland
claimed it suffered as a result of Wells Fargo’s unlawful
discriminatory lending practices throughout the City.

    The panel held that the allegations in Oakland’s amended
complaint were sufficient to plead that its reduced property-
tax revenues, but not its increased municipal expenses, were
proximately caused by Wells Fargo’s discriminatory lending
practices. Construing the amended complaint’s allegations
in the light most favorable to the City, including the City’s
proposed statistical regression analyses, the panel held that
Oakland had plausibly alleged that its decrease in property-
tax revenues had some direct and continuous relation to
Wells Fargo’s discriminatory lending practices throughout
much of the City.

    The further panel held that the FHA’s proximate-cause
requirement applies to claims for injunctive or declaratory
relief. Accordingly, the panel reversed the district court’s
conclusion that Oakland did not have to satisfy this
requirement as to its claims for injunctive and declaratory
relief. The panel instructed that 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.
4       CITY OF OAKLAND V. WELLS FARGO & CO.

                        COUNSEL

Neal Kumar Katyal (argued), Colleen Roh Sinzdak,
Benjamin A. Field, and Sean Marotta, Hogan Lovells US
LLP, Washington, D.C.; Paul F. Hancock and Olivia
Kelman, K&L Gates LLP, Miami, Florida; Edward P.
Sangster and Daniel W. Fox, K&L Gates LLP, San
Francisco, California; Terry E. Sanchez, Munger Tolles &
Olson LLP, Los Angeles, California; Bart H. Williams and
Manuel F. Cachan, Proskauer Rose LLP, Los Angeles,
California; for Defendants-Appellants.

Robert S. Peck (argued), Center for Constitutional Litigation
P.C., Washington, D.C.; Barbara J. Parker, Oakland City
Attorney; Maria Bee, Chief Assistant City Attorney; Office
of the City Attorney, Oakland, California; Joel Liberson,
Trial & Appellate Resources P.C., Torrance, California;
Yosef Peretz and Ruth Israely, Peretz & Associates, San
Francisco, California; for Plaintiff-Appellee.

D. Scott Change, Housing Rights Center, Los Angeles,
California; Jamie Crook, American Civil Liberties Union
Foundation of Northern California, San Francisco,
California; David Loy, American Civil Liberties Union of
San Diego & Imperial Counties, San Diego, California; Julia
Devanthéry, American Civil Liberties Union of Southern
California, Los Angeles, California; Sandra S. Park and
Alejandro Ortiz, American Civil Liberties Union
Foundation, New York, New York; Morgan Williams,
National Fair Housing Alliance, Washington, D.C.; Ajmel
Quereshi, NAACP Legal Defense & Education Fund Inc.,
Washington, D.C.; for Amici Curiae American Civil
Liberties Union Foundation, American Civil Liberties Union
Foundation of Northern California, American Civil Liberties
Union Foundation of Southern California, American Civil
        CITY OF OAKLAND V. WELLS FARGO & CO.                5

Liberties Union of San Diego & Imperial Counties, AARP,
NAACP Legal Defense & Educational Fund Inc., National
Fair Housing Alliance Inc., Poverty & Race Research Action
Council, and Twelve Local Fair Housing Centers in the
Ninth Circuit.

Dennis J. Herrera, City Attorney; Aileen M. McGrath, Co-
Chief of Appellate Litigation; City Attorney’s Office, San
Francisco, California; for Amicus Curiae City and County of
San Francisco.

Xavier Becerra, Attorney General; Michael L. Newman,
Senior Assistant Attorney General; Christine Chuang,
Supervising Deputy Attorney General; Shubhra Shivpuri
and Srividya Panchalam; California Department of Justice,
Oakland, California; for Amicus Curiae State of California.

                         OPINION

MURGUIA, Circuit Judge:

    Throughout our nation’s history, racial and ethnic
minorities—especially Black Americans—have been
systematically denied one of the keys to the American
dream: the opportunity to own a home. In 1967, during a
pivotal period of civil unrest and reckoning with our
country’s history of segregation and racial injustice,
President Lyndon B. Johnson established the National
Advisory Commission on Civil Disorders (commonly
known as the “Kerner Commission”).             The Kerner
Commission found that several government-sanctioned
practices disadvantaged racial and ethnic minorities’ fair
access to housing, including rapid urbanization, the flight of
White families to suburban neighborhoods, racially
6         CITY OF OAKLAND V. WELLS FARGO & CO.

restrictive covenants, real estate agents who steered
homebuyers into racially homogenous areas, and
discriminatory lending practices like redlining and reverse
redlining. See Report of the National Advisory Commission
on Civil Disorders 91 (1968) (“Kerner Commission
Report”). To address housing segregation, the Kerner
Commission recommended enactment of “a comprehensive
and enforceable open-occupancy law making it an offense to
discriminate in the sale or rental of any housing . . . on the
basis of race, creed, color, or national origin.” Kerner
Commission Report at 263. After the assassination of Dr.
Martin Luther King Jr., Congress heeded the Kerner
Commission’s recommendation and passed the Fair Housing
Act of 1968 (“FHA” or the “Act”) to ensure fair access to
housing for racial minorities and other historically
disadvantaged groups. The FHA has since been rightfully
lauded as one of the greatest achievements of the civil rights
movement.

    Fifty years later, cities across our country began filing
lawsuits under the FHA accusing the nation’s largest banks
of some of the same discriminatory lending practices that
motivated Congress to pass the FHA in the first place. In the
instant case, the City of Oakland (“Oakland” or the “City”)
alleges that Wells Fargo & Company and Wells Fargo Bank,
N.A. (collectively, “Wells Fargo” or the “Bank”) engaged in
discriminatory lending practices by issuing predatory loans
to its Black and Latino 1 residents, in violation of the FHA,

    1
      This opinion uses the term “Latino” for purposes of simplicity to
refer to all “person[s] of Latin American origin living in the [United
States].” Merriam-Webster Online Dictionary, https://www.merriam-
webster.com/dictionary/Latino (last visited Aug. 17, 2020). It is also
meant to include persons who identify as “Latina,” “Latinx,” or
“Hispanic.”
         CITY OF OAKLAND V. WELLS FARGO & CO.                 7

42 U.S.C. §§ 3604, 3605. According to Oakland, the
predatory loans caused widespread foreclosures that reduced
the City’s property-tax revenues and increased its municipal
expenses.

    Wells Fargo appeals the district court’s partial denial of
its motion to dismiss the City’s complaint under Federal
Rule of Civil Procedure 12(b)(6). We have jurisdiction
pursuant to 28 U.S.C. § 1291, and we affirm in part and
reverse in part. We affirm the district court’s denial of Wells
Fargo’s motion to dismiss as to Oakland’s claims for lost
property-tax revenues and the district court’s grant of Wells
Fargo’s motion to dismiss as to Oakland’s claims for
increased municipal expenses. We reverse, however, the
district court’s denial of Wells Fargo’s motion to dismiss as
to Oakland’s claims seeking injunctive and declaratory relief
and we remand for further proceedings consistent with this
opinion.

I. Statutory Background.

    The FHA makes it unlawful to “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(b). More broadly, it makes it unlawful for “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, because of
race[.]” Id. § 3605(a).

    The FHA established a private right of action for
damages and injunctive relief. Id. § 3613(c)(1). The statute
provides that an “aggrieved person may commence a civil
action in an appropriate United States district court or State
8         CITY OF OAKLAND V. WELLS FARGO & CO.

court . . . to obtain appropriate relief with respect to [a]
discriminatory housing practice[.]” Id. § 3613(a)(1)(A).
The Act in turn defines “aggrieved person” as any person
who “claims to have been injured by a discriminatory
housing practice; or believes that such person will be injured
by a discriminatory housing practice that is about to occur.”
Id. §§ 3602(i)(1)–(2). It is well established that the term
“aggrieved person” under the FHA includes cities. Bank of
Am. Corp. v. City of Miami (Miami I), 137 S. Ct. 1296, 1306
(2017) (“[T]he City is an ‘aggrieved person’ able to bring
suit under the statute.”).

II. Factual background. 2

    According to Oakland, Wells Fargo engages in
longstanding and ongoing discriminatory home lending
practices 3 throughout the City, which result in redlining and
reverse redlining. Redlining is the practice of denying home
loans to residents of minority neighborhoods. Reverse
redlining, by contrast, is the practice of issuing home loans
to minority borrowers with significantly higher costs and
more onerous terms than those offered to similarly situated

    2
     The facts as presented are derived from Oakland’s first amended
complaint.
    3
       Some of the discriminatory lending practices alleged in the
amended complaint include steering minority borrowers into adjustable-
rate loans instead of fixed-rate loans, failing to explain loan terms, and
neglecting to provide loan brochures in Spanish. Oakland also accuses
Wells Fargo of having facially neutral policies that have an outsized
negative effect on the terms of the loans extended to Black and Latino
borrowers, including giving loan officers discretion and incentivizing
them to offer high-risk and high-cost loans beyond what borrowers are
qualified to handle. The result is that loan officers often sell more
expensive, higher-risk loan products to minority borrowers than to
similarly situated White borrowers.
          CITY OF OAKLAND V. WELLS FARGO & CO.                          9

White borrowers—also known as “predatory loans.”
Predatory loans include, for example, subprime loans, 4
negative amortization loans, 5 “No-Doc” loans that require
no supporting evidence of a borrower’s income, loans with
balloon payments, and “interest only” loans that carry a
prepayment penalty. According to Oakland, Wells Fargo not
only issues predatory loans to its Black and Latino residents,
but also refuses to refinance those loans even though it is
willing to refinance the loans of similarly situated White
residents.

   Using Wells Fargo’s own data, 6 Oakland employs a
number of regression analyses 7 to show that its Black and

     4
       A subprime loan has “an interest rate that is higher than a prime
rate and is extended chiefly to a borrower who has a poor credit rating or
is judged to be a potentially high risk for default.” Merriam-Webster
Online Dictionary, https://www.merriam-webster.com/dictionary/Subpr
ime (last visited Aug. 17, 2020).
    5
      A negative amortization loan “is one with a payment structure that
allows for a scheduled payment to be made by the borrower that is less
than the interest charge on the loan. When that happens, deferred interest
is created. The amount of deferred interest created is added to the
principal balance of the loan, leading to a situation where the principal
owed increases over time instead of decreases.” Will Kenton, Negatively
Amortizing Loan, Investopedia (Sept. 6, 2019), https://www.investoped
ia.com/terms/n/negativelyamortizingloan.asp (last visited Aug. 17,
2020).
    6
      The City uses data Wells Fargo reports to local and federal
authorities, which is available through public and private databases.
     7
       A regression analysis is a statistical tool that focuses on the
relationship between two or more variables of interest to ascertain the
causal effect of one variable upon another. See Merriam-Webster Online
Dictionary, https://www.merriam-webster.com/dictionary/regression%
20analysis (last visited Aug. 17, 2020) (defining “regression analysis” as
10        CITY OF OAKLAND V. WELLS FARGO & CO.

Latino residents are more likely to receive predatory loans
from Wells Fargo; that those predatory loans cause
foreclosures; and that those foreclosures reduce property
values and consequently diminish the City’s property-tax
revenues. The City also alleges, albeit without statistical
backing, that Wells Fargo’s predatory loans increase its
municipal expenses, forcing it to reduce its spending in fair-
housing programs aimed at guaranteeing that all of its
residents have equal access to safe and affordable housing.

     A. Black and Latino borrowers in Oakland are more
        likely to receive predatory loans from Wells
        Fargo.

    The City’s first set of regression analyses support its
allegation that Wells Fargo issues predatory home loans to
Black and Latino borrowers. According to these studies, a
Black Wells Fargo borrower is 2.403 times more likely to
receive a predatory loan than a similarly situated White
borrower. A Latino Wells Fargo borrower is 2.520 times
more likely to receive such a loan than a similarly situated
White borrower. Importantly, the first regression analysis
controls for independent variables such as objective
characteristics like credit history, loan-to-value ratio, and
loan-to-income ratio that might contribute to a borrower
receiving a predatory loan. In fact, this discrepancy holds
true even for more credit-worthy borrowers—Black and
Latino borrowers with FICO scores above 660 are,
respectively, 2.261 and 2.366 times more likely to receive

“the use of mathematical and statistical techniques to estimate one
variable from another especially by the application of regression
coefficients, regression curves, regression equations, or regression lines
to empirical data”). Simply put, regression analyses examine the effect
of one or more variables on a particular outcome.
          CITY OF OAKLAND V. WELLS FARGO & CO.                       11

predatory loans from Wells Fargo than similarly situated
White borrowers. Furthermore, borrowers in minority
neighborhoods 8 in Oakland are 3.207 times more likely to
receive a predatory loan than similarly situated borrowers in
non-minority neighborhoods. According to Oakland, these
discrepancies between Black and Latino borrowers and their
White counterparts are statistically significant. 9

    B. Wells Fargo’s predatory home loans to Black and
       Latino borrowers cause foreclosures.

    A second set of regression analyses using the same data
shows that Black and Latino borrowers who receive
predatory home loans from Wells Fargo are far more likely
to have their homes foreclosed on than White borrowers who
receive non-predatory loans. Taking into account a
borrower’s race and objective risk characteristics 10 such as

    8
       Oakland defines “minority neighborhoods” as neighborhoods with
at least fifty percent Black or Latino households. Conversely, Oakland
defines “non-minority neighborhoods” as neighborhoods with at least
fifty percent White households.
    9
      According to the amended complaint, the probability that these
discrepancies are random or coincidental is less than one percent.
     10
        The other “objective risk” variables that the regression analysis
accounts for include whether the loan had predatory terms, the
borrower’s credit score, the lien type (first or subordinate lien), the
property type (single-family home, condo, coop, multifamily home,
manufactured home, etc.), the loan purpose (purchase, cash-out
refinance, rate-term refinance, etc.), the loan-to-value ratio, the
combined loan-to-value ratio, the ratio of monthly loan payments to
monthly income, the occupancy type (owner-occupied, second home,
investment property), the month of loan origination, whether the loan
became part of an agency or non-agency securitization, whether the loan
was a conventional or an FHA/VA loan, whether the loan had an
adjustable rate, and the property’s neighborhood characteristics such as
12        CITY OF OAKLAND V. WELLS FARGO & CO.

credit history, loan-to-value ratio, and loan-to-income ratio,
the results demonstrate that predatory home loans—which
are disproportionately given to Black and Latino
borrowers—are 1.753 times more likely to result in
foreclosure. These studies also show that a Black Wells
Fargo borrower who receives a predatory home loan is 2.573
times more likely to have their loan foreclosed than a White
borrower who receives a non-predatory loan. Similarly, a
Latino Wells Fargo borrower who receives a predatory home
loan is 3.312 times more likely to have their home foreclosed
than a White borrower who receives a non-predatory loan.
In fact, 14.1 percent of Wells Fargo home loans issued in
Oakland’s minority neighborhoods resulted in foreclosure,
as compared to only 3.3 percent of Wells Fargo home loans
in non-minority neighborhoods. These discrepancies in
foreclosure rates are also statistically significant.

     C. Foreclosures decrease property-tax revenues.

    A third set of regression analyses, which use a technique
known as “Hedonic regression,” 11 establishes that
foreclosures caused by Wells Fargo’s predatory loans reduce
the value of both foreclosed properties and other properties
nearby. Using routinely maintained property tax and other
data, Oakland’s statistical model isolates the lost property
value attributable to Wells Fargo foreclosures and vacancies

the ratio of median income in the borrower’s neighborhood to the median
income in the metropolitan area, the share of homes in the neighborhood
that are owner-occupied, and the median year in which homes in the
neighborhood were built.
     11
        Oakland explains that “Hedonic regression” is a technique that
isolates the factors that contribute to the value of a property by studying
thousands of transactions. Hedonic analysis determines the contribution
of each of these factors to the value of a home.
         CITY OF OAKLAND V. WELLS FARGO & CO.                     13

caused by discriminatory lending from losses attributable to
other causes. 12 The Hedonic regression analysis also allows
Oakland to calculate the impact on a given neighborhood’s
property values of the first foreclosure caused by a Wells
Fargo predatory loan, the average impact of subsequent
foreclosures, and the impact of the last foreclosure of this
kind. This loss can be isolated from any losses attributable
to non-Wells Fargo foreclosures or other causes. Therefore,
according to Oakland, the Hedonic regression analysis
precisely calculates the loss in property values in Oakland’s
minority neighborhoods that is attributable to foreclosures
caused by Wells Fargo’s predatory loans, which in turn can
be used to calculate the City’s corresponding loss in
property-tax revenues. 13

    In sum, with the support of several regression analyses,
Oakland alleges that Wells Fargo’s discriminatory lending
practices cause foreclosures that directly result in lower
property values and attendant lower property tax revenues
for the City.

    12
       Other causes that might contribute to a home’s value include,
among other things, the size of the home, the number of bedrooms and
bathrooms in the home, the relative safety of the neighborhood, and
whether neighborhood properties are well maintained.
    13
       The amended complaint cites to several academic studies that
have successfully used Hedonic regression analyses to precisely
calculate the loss of property value caused by predatory-loan-related
foreclosures in Philadelphia and Los Angeles. See Anne B. Shlay &
Gordon Whitman, Research for Democracy: Linking Community
Organizing and Research to Leverage Blight Policy, 5 City & Cmty.
105, 173 (2006); All. of Cals. for Cmty. Empowerment & Cal.
Reinvestment Coal., The Wall Street Wrecking Ball: What Foreclosures
Are Costing Los Angeles Neighborhoods 3 (2011).
14       CITY OF OAKLAND V. WELLS FARGO & CO.

     D. Foreclosures increased Oakland’s municipal
        expenses and reduced spending in fair housing
        programs.

    Oakland also alleges, without any regression analyses or
other statistical support, that foreclosures caused by Wells
Fargo’s discriminatory lending practices increase municipal
expenses because foreclosed properties require additional
services such as police forces, firefighting, and safety code
enforcement. According to Oakland, this increase in
municipal expenses requires the City to divert resources that
were otherwise intended for fair-housing programs designed
to expand access to housing opportunities for Black and
Latino residents.

     E. Procedural history.

    Oakland sued Wells Fargo under the FHA to recover
damages in the form of lost property tax revenues and
increased municipal expenses and to enjoin Wells Fargo
from continuing to issue predatory home loans to Black and
Latino borrowers.

    Wells Fargo moved to dismiss the original complaint,
and the district court granted the motion only as to Oakland’s
unjust enrichment claim. Shortly thereafter, the Supreme
Court granted a writ of certiorari in Miami I, which raised
key standing and proximate causation questions directly
relevant to this case. 137 S. Ct. at 1306. The district court
subsequently stayed its proceedings until that case was
decided. On May 1, 2017, the Supreme Court decided
Miami I, prompting the district court to instruct Oakland to
amend its complaint consistent with the Supreme Court’s
decision in that case.
            CITY OF OAKLAND V. WELLS FARGO & CO.                     15

    Wells Fargo again moved to dismiss the amended
complaint, challenging Oakland’s ability to demonstrate
proximate cause under the FHA for its alleged injuries using
regression analyses. 14 The district court granted Wells
Fargo’s motion to dismiss as to Oakland’s claims that it
suffered increased municipal expenses. However, the
district court denied Wells Fargo’s motion to dismiss as to
Oakland’s claims that it suffered reduced property-tax
revenues, and for declaratory and injunctive relief.

    Wells Fargo then asked the district court to certify its
order for interlocutory appeal pursuant to 28 U.S.C.
§ 1292(b). The district court granted Wells Fargo’s request,
certifying two questions: (1) whether Oakland’s claims for
damages based on the injuries asserted in the first amended
complaint satisfy proximate cause required by the FHA on a
motion to dismiss; and (2) whether the proximate-cause
requirement articulated in Miami I is limited to claims for
damages under the FHA and not to claims for injunctive or
declaratory relief.

III.        Standard of review.

    “We review de novo a district court’s dismissal for
failure to state a claim pursuant to Federal Rule of Civil
Procedure 12(b)(6).” Putnam Family P’ship v. City of
Yucaipa, 673 F.3d 920, 924–25 (9th Cir. 2012) (citing
Decker v. Advantage Fund Ltd., 362 F.3d 593, 595–96 (9th
Cir. 2004)). “We likewise review de novo questions of

       14
        In its motion to dismiss, and on appeal, Wells Fargo did not
challenge Oakland’s allegations that it engaged in discriminatory lending
practices. We express no opinion as to the plausibility or merit of those
allegations.
16         CITY OF OAKLAND V. WELLS FARGO & CO.

statutory interpretation.” Id. (citing Aguayo v. U.S. Bank,
653 F.3d 912, 917 (9th Cir. 2011)).

    At the motion to dismiss stage, “we accept all factual
allegations in the [amended] complaint as true and construe
[them] in the light most favorable to [Oakland,] the
nonmoving party.” Rowe v. Educ. Credit Mgmt. Corp.,
559 F.3d 1028, 1029–30 (9th Cir. 2009) (quoting Knievel v.
ESPN, 393 F.3d 1068, 1072 (9th. Cir. 2005)); see also
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Furthermore,
to survive a motion to dismiss, Oakland need only plausibly
allege that Wells Fargo’s actions proximately caused its
injuries. See Swierkiewicz v. Sorema N.A., 534 U.S. 506,
514–15 (2002). The operative question is whether the
amended complaint “contain[s] sufficient factual matter . . .
to ‘state a claim to relief that is plausible on its face.’” Iqbal,
556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)).

IV.        Proximate cause under the FHA.

    We generally presume that a statutory cause of action is
available only to plaintiffs whose injuries are proximately
caused by violations of the statute. Lexmark Int’l, Inc. v.
Static Control Components, Inc., 572 U.S. 118, 132 (2014).
Therefore, we must first determine whether the FHA’s
proximate-cause requirement is sufficiently broad and
inclusive to encompass Oakland’s alleged aggregate, 15
citywide injuries.

      15
       The term “aggregate” refers to the cumulative effect that Wells
Fargo’s alleged “pattern or practice of illegal and discriminatory
mortgage lending” across thousands of individual loans has on the City’s
tax base and expenses.
          CITY OF OAKLAND V. WELLS FARGO & CO.                        17

    A. General principles of proximate cause.

     Proximate cause is designed to limit liability. Id. (“For
centuries, it has been ‘a well established principle of [the
common] law, that in all cases of loss, we are to attribute it
to the proximate cause, and not to any remote cause.’”
(alteration in original) (quoting Waters v. Merchs.’
Louisville Ins. Co., 36 U.S. (11 Pet.) 213, 223 (1837))). 16
Underpinning this bedrock legal principle is “the reality that
‘the judicial remedy cannot encompass every conceivable
harm that can be traced to alleged wrongdoing.” Id. (quoting
Associated Gen. Contractors of Cal., Inc. v. Cal. State
Council of Carpenters, 459 U.S. 519, 536 (1983)). We
therefore assume that Congress is familiar with the
longstanding common-law rule that loss must be attributable
to its proximate cause and does not mean to displace this rule
unless it does so expressly. Miami I, 137 S. Ct. at 1305. This
is certainly true for the FHA, because “[t]he housing market
is interconnected with economic and social life” such that
violations of the statute “may, therefore, ‘be expected to
cause ripples of harm that flow’ far beyond the defendant’s
misconduct.” Id. at 1306 (quoting Associated Gen.
Contractors, 459 U.S. at 534). Simply put, the purpose of
the FHA’s proximate-cause requirement is to limit recovery
to more direct harms, because “[n]othing in the statute
suggests that Congress intended to provide a remedy
wherever those ripples travel.” Id.

   There is no hard and fast rule for establishing proximate
cause. Far from being a one-size-fits-all “blackletter rule

    16
       Importantly, proximate cause is not a requirement of Article III,
but rather an element of the cause of action under a statute, and it “must
be adequately alleged at the pleading stage in order for the case to
proceed.” Lexmark, 572 U.S. at 134 n.6.
18        CITY OF OAKLAND V. WELLS FARGO & CO.

that will dictate the result in every case,” the proximate-
cause requirement varies by statute. Holmes v. Secs. Inv’r
Prot. Corp., 503 U.S. 258, 272 n.20 (1992) (quoting
Associated Gen. Contractors, 459 U.S. at 536); see also
Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639, 654
(2008) (“Proximate cause . . . is a flexible concept.”
(emphasis added) (citing Holmes, 503 U.S. at 272 n.20)). As
a result, the proximate-cause requirement is “controlled by
the nature of the statutory cause of action.” Lexmark,
572 U.S. at 133. Although proximate cause “is not easy to
define,” the basic inquiry is “whether the harm alleged has a
sufficiently close connection to the conduct the statute
prohibits. Put differently, the proximate-cause requirement
generally bars suits for alleged harm that is ‘too remote’
from the defendant’s unlawful conduct.” Id. (emphasis
added). 17

    The only controlling Supreme Court precedent on the
FHA’s proximate-cause requirement is its recent decision in
Miami I. In that case, the City of Miami, like Oakland,
claimed that Wells Fargo’s and Bank of America’s
discriminatory lending practices caused Miami’s decreased
property-tax revenues and increased municipal expenses.
Miami I, 137 S. Ct. at 1300–01. Reversing the Eleventh
Circuit, 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

     17
        With these principles in mind, the Supreme Court has defined the
contours of the proximate-cause requirement of several other statutes,
but not the FHA. See, e.g., id. at 132–34 (Lanham Act); Dura Pharms.,
Inc. v. Broudo, 544 U.S. 336, 346 (2005) (Private Securities Litigation
Reform Act); Holmes, 503 U.S. at 265–68 (Racketeer Influenced and
Corrupt Organizations Act (“RICO”)); Associated Gen. Contractors,
459 U.S. at 529–35 (Clayton Act).
          CITY OF OAKLAND V. WELLS FARGO & CO.                          19

violation.” 18 Id. Rather, “some direct relation between the
injury asserted and the injurious conduct alleged” is
required. Id. at 1306 (emphasis added) (quoting Holmes,
503 U.S. at 268). “The ‘general tendency’ in these cases,”
the Court explained, “is not to go beyond the first step” of
the causal chain. Id. (quoting Hemi Grp., LLC v. City of New
York, 559 U.S. 1, 10 (2010)). But what is included in this
“first step” varies; it “depends in part on the ‘nature of the
statutory cause of action,’ and an assessment ‘of what is
administratively possible and convenient.’” Id. (first
quoting Lexmark, 572 U.S. at 133; then quoting Holmes,
503 U.S. at 268).

    The Supreme Court then declined to “draw the precise
boundaries of proximate cause under the FHA and to
determine on which side of the line the City’s financial
injuries fall.” Id. Instead, it asked lower courts to weigh in
by offering “the benefit of [their] judgment on how the
contrary principles [of foreseeability and directness] apply
to the FHA.” Id. 19

     18
        The Court also reaffirmed its well-established precedent that cities
have statutory and Article III standing to sue under the FHA, noting that
“the City’s claimed injuries fall within the zone of interests that the FHA
arguably protects. Hence, the City is an ‘aggrieved person’ able to bring
suit under the statute.” Miami I, 137 S. Ct. at 1301.
    19
      Since Miami I was decided, only the Eleventh Circuit and a
handful of district courts have tackled this question.

    On remand, the Eleventh Circuit held that Miami’s use of statistical
regression analyses—which are virtually identical to those used in
Oakland’s amended complaint—was sufficient to plausibly allege that
the drop in Miami’s property-tax revenues was proximately caused by
Wells Fargo’s redlining and reverse redlining. City of Miami v. Wells
Fargo & Co. (Miami II), 923 F.3d 1260, 1280 (11th Cir. 2019).
20        CITY OF OAKLAND V. WELLS FARGO & CO.

    We are thus asked to decide the questions before us as a
matter of first impression, guided by the two-step analysis
laid out by the Supreme Court in Miami I: first, we must
evaluate “the contours of proximate cause under the FHA,”
and second, we “decide how that standard applies to the
City’s claim for lost property-tax revenue and increased
municipal expenses.” Miami I, 137 S. Ct. at 1306. We now
turn to each prong of this analysis.

     B. The contours of the FHA’s proximate-cause
        requirement.

    To determine the “contours” of a statute’s proximate-
cause requirement, we evaluate (1) the “nature of the
statutory cause of action” and (2) what is administratively
feasible. Id (quoting Lexmark, 572 U.S. at 133). In this case,
both considerations lead us to confidently conclude that the

However, while Wells Fargo’s petition for a writ of certiorari was
pending before the Supreme Court, Miami asked the district court to
dismiss that case. Miami’s request prompted the Supreme Court to grant
Wells Fargo’s petition for a writ of certiorari in a two-sentence order,
vacating the Eleventh Circuit’s opinion in Miami II as moot. Wells
Fargo & Co. v. City of Miami, 140 S. Ct. 1259 (2020) (citing United
States v. Munsingwear, Inc., 340 U.S. 36 (1950)).

     Most of the district courts that have decided this issue agree that tax-
related injuries suffered by cities as a result of banks’ discriminatory
lending practices fall within the FHA’s proximate-cause requirement.
See, e.g., City of Sacramento v. Wells Fargo & Co., No. 2:18-cv- 416,
2019 WL 3975590, at *7 (E.D. Cal. Aug. 22, 2019); City of Oakland v.
Wells Fargo Bank N.A., No. 15-cv-4321, 2018 WL 3008538, at *9 (N.D.
Cal. June 15, 2018); City of Philadelphia v. Wells Fargo & Co., No. 17-
2203, 2018 WL 424451, at *5 (E.D. Pa. Jan. 16, 2018). But see Prince
George’s County, Md. v. Wells Fargo & Co., 397 F. Supp. 3d 752, 762–
63 (D. Md. 2019).
        CITY OF OAKLAND V. WELLS FARGO & CO.                21

FHA’s proximate-cause requirement is sufficiently broad
and inclusive to encompass aggregate, city-wide injuries.

       i. The nature of the statutory cause of action.

    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 *21). 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, city-
wide 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 proximate-
cause 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.

       ii. Administrative feasibility.

     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 *7 (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, city-
wide 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.

V. Oakland’s claims for monetary damages.

    Having established the broad and inclusive contours of
the FHA’s proximate-cause requirement, we can now turn to
the two questions the district court certified for interlocutory
appeal. First, we are asked to decide whether Oakland’s
claims for monetary damages based on the injuries asserted
in the amended complaint—reduced property-tax revenues
and increased municipal expenses—satisfy the FHA’s
proximate-cause requirement. We hold that the allegations
in the amended complaint are sufficient to plead that
Oakland’s reduced property-tax revenues, but not its
increased municipal expenses, are proximately caused by
Wells Fargo’s discriminatory lending practices.

     A. Reduced property-tax revenues.

  Understanding the broad and inclusive nature of the
FHA, as well as what is administratively feasible under the
           CITY OF OAKLAND V. WELLS FARGO & CO.                           33

statute, we hold that Oakland plausibly alleges that its
decrease in property-tax revenue has some direct relation to
Wells Fargo’s predatory lending practices.

    It is undisputed that Wells Fargo’s alleged wrongdoing
did not immediately cause Oakland’s lost property-tax
revenues. Far from being within the first step of the causal
chain, the drop in Oakland’s tax base is several steps
removed from Wells Fargo’s discriminatory lending
practices. 20 However, these injuries are within the FHA’s
proximate-cause requirement because the City plausibly
alleged that they have “a sufficiently close connection to the
conduct the statute prohibits.” Lexmark, 572 U.S. at 133. Of
course, at summary judgment or trial, a judge or a jury will
eventually have to decide whether, after discovery, Oakland
adduced enough evidence that Wells Fargo’s predatory
lending more likely than not caused the City’s reduced tax
base.

   Wells Fargo argues that, to satisfy proximate cause under
any statute, a plaintiff must allege an injury that is the
immediate result of an alleged statutory violation. 21 Such a

    20
       The district court outlined the multiple causal steps between Wells
Fargo’s conduct and the City’s financial injuries as follows: (1) the
unlawful discrimination was carried out by Wells Fargo; (2) leading to
default by the individual borrowers; (3) which in turn led to foreclosures;
(4) which led to lower property values; and (5) consequently lower
property-tax revenues for Oakland.
    21
        Wells Fargo also offers two “rare” exceptions to its proposed
categorical proximate-cause rule: (1) “where the most directly affected
party cannot sue,” or (2) “where a plaintiff alleges a harm at the second
step that is as ‘surely attributable’ to the alleged statutory violation.” But
these circumstances are not “exceptions.” They are factors that the
Supreme Court has established, in cases like Lexmark and Holmes,
34        CITY OF OAKLAND V. WELLS FARGO & CO.

categorical proximate-cause requirement under the FHA
would allow parties to recover only for injuries that are
within the first step of the causal chain—in other words, only
those who are immediately affected by discrimination. 22
Applying such standard to this case, Wells Fargo’s liability
would be limited to the individual borrowers directly harmed
by the Bank’s redlining and reverse redlining.

     As an initial matter, Wells Fargo’s categorical
proximate-cause requirement is facially at odds with the
Supreme Court’s rule that “the general tendency” in
proximate cause cases “is not to go beyond the first step” of
the causal chain. Miami I, 137 S. Ct. at 1306 (emphasis
added) (quoting Hemi, 559 U.S. at 10). The commonsense
reading of “general tendency” is that in most cases, but not
all, the proximate-cause requirement will be limited to the
first step. Therefore, it cannot be that an intervening step
automatically vitiates proximate cause. Indeed, Wells Fargo
does not explain why, if the proximate-cause requirement
under the FHA is as straight-forward and categorical as
Wells Fargo suggests, the Supreme Court did not simply
pronounce it as such in Miami I. If an intervening step alone
is always enough to vitiate proximate cause, the Supreme

should be considered when evaluating the contours of a particular
statute’s proximate-cause requirement.
     22
        Importantly, Wells Fargo relies exclusively on civil RICO cases
to support its argument that the FHA also requires a categorical first-
step-only proximate-cause requirement.           All these cases are
distinguishable, however, because the Supreme Court has clearly held
that RICO “should not get . . . an expansive reading,” Holmes, 503 U.S.
at 266, whereas the FHA is consistently and repeatedly interpreted
broadly. Compare Hemi., 559 U.S. at 9–10, and Anza v. Ideal Steel
Supply Corp., 547 U.S. 451, 456 (2006), with Trafficante, 409 U.S.
at 208–09, and Inclusive Cmtys., 135 S. Ct. at 2516–26 (2015), and
Gladstone, 441 U.S. at 103, and Havens, 455 U.S. at 372–75.
        CITY OF OAKLAND V. WELLS FARGO & CO.               35

Court would not have sought the input of the lower federal
courts.

    Moreover, adopting Wells Fargo’s categorical
proximate-cause requirement would require this court to
contravene decades of established Supreme Court precedent
on standing under the FHA. Under Wells Fargo’s proposed
standard, its predatory lending practices can only
proximately cause the injuries of its direct victims—the
individual borrowers. But the Supreme Court has held, time
and time again, that indirectly injured parties, including
municipalities, have standing to sue under the FHA. See
Gladstone, 414 U.S. at 100–09 (permitting the Village of
Bellwood to sue realtors who discriminated against Black
prospective homeowners even though the Village itself was
not directly discriminated against); Trafficante, 409 U.S.
at 212 (permitting tenants to sue their landlord for
discriminating against prospective tenants even though the
landlord had not discriminated against both plaintiffs
directly); Havens Realty Corp. v. Coleman, 455 U.S. 363,
378–79 (1982) (permitting a fair housing organization to sue
not only to address harm its members suffered but also to
recover its own injuries). Under Wells Fargo’s categorical
proximate-cause requirement, none of the plaintiffs in
Gladstone, Trafficante, or Havens would have been able to
recover for the indirect injuries they suffered under the FHA.
We decline Wells’ Fargo’s invitation to ignore the mandates
of the Supreme Court.

     In Lexmark, the Supreme Court in fact departed from the
first-step “general tendency” standard, underscoring that an
intervening step does not necessarily end proximate cause.
In that case, the plaintiff was a manufacturer of components
used by companies that refurbished Lexmark printer
cartridges (the “remanufacturers”). Lexmark, 572 U.S.
36      CITY OF OAKLAND V. WELLS FARGO & CO.

at 121.     It sued Lexmark, a printer and cartridge
manufacturer, under the Lanham Act for misleading
customers into believing that they were legally obligated to
return spent cartridges to Lexmark. Id. at 120–23. The
injury in that case was the plaintiff’s lost revenue from
consumers returning their spent cartridges to Lexmark rather
than taking them to the remanufacturers to be refurbished.
Id. at 123 In Lexmark, as here, there was more than one step
in the causal chain: (1) Lexmark deceived consumers;
(2) the consumers chose not to take their cartridges to the
remanufacturers; and (3) those remanufacturers in turn
bought fewer components from the plaintiff. Like Wells
Fargo, Lexmark argued for a “categorical test permitting
only direct competitors to sue for false advertising [under the
Lanham Act].” Id. at 134.

    Writing for a unanimous Court, Justice Scalia explained
that an intervening step does not necessarily break the causal
chain if there is continuity between the plaintiff’s alleged
injuries and the defendant’s alleged misconduct. Id. at 139–
40 . The Court concluded that the Lexmark plaintiff satisfied
proximate cause under the Lanham Act because, although
the causal chain “include[d] an intervening link of injury to
the remanufacturers,” there was no “‘discontinuity’ between
the injury to the direct victim and the injury to the indirect
victim, so that the latter is not surely attributable to the
former (and thus also to the defendant’s conduct), but might
instead have resulted from ‘any number of [other] reasons.’”
Id. at 139–40 (emphases added) (quoting Anza v. Ideal Steel
Supply Corp., 547 U.S. 451, 458–59 (2006)). In other
words, the plaintiff was able to demonstrate continuity: its
injuries were directly related to the remanufacturers’
injuries, which were in turn directly related to Lexmark’s
conduct.
        CITY OF OAKLAND V. WELLS FARGO & CO.               37

     In Bridge, a RICO case, the Supreme Court again
focused on the continuity between the defendant’s alleged
violation and the plaintiff’s indirect injury, not how many
“steps” were in between. See 553 U.S. at 653–58. In that
case, the plaintiffs were bidders participating in county-
operated tax lien auctions. Id. at 642. They sued
defendants—who were also bidders—for filing fraudulent
documents that increased the defendants’ chances of
winning the auctions. Id. at 642–44. Again, there was more
than one step in the causal chain: (1) the defendants filed
fraudulent documents; (2) the county relied on the fraudulent
documents; and (3) the plaintiffs lost the auction. Id.
Nonetheless, the Court held that plaintiffs’ injuries were
proximately caused by the defendants’ misconduct because
“first party reliance” was not “necessary to ensure that there
[was] a sufficiently direct relationship between the
defendant’s wrongful conduct and the plaintiff’s injury.” Id.
at 657 (emphasis added). Although the Court framed its
analysis in terms of reliance, the principle is the same—
plaintiffs need not be the most immediate victims of a
defendant’s misconduct to satisfy proximate cause, as long
as their injuries have some direct relation and are surely
attributable to the misconduct.

    Even though Lexmark and Bridge did not involve the
FHA, the proximate-cause principles they establish squarely
apply to this case. In Lexmark, “any false advertising that
reduced the remanufacturers’ business necessarily injured
[the plaintiff] as well.” Lexmark, 572 U.S. at 139. Similarly,
in Bridge, the injury to the county necessarily injured the
plaintiffs. The same is true here. Through sophisticated and
well-explained statistical regression analyses, Oakland has
plausibly alleged that the predatory loans issued by Well
Fargo that caused injury to individual borrowers, namely in
the form of foreclosures, also necessarily injured the City
38        CITY OF OAKLAND V. WELLS FARGO & CO.

because the foreclosures caused a respective drop in property
values and in turn reduced property-tax revenues. Oakland
achieves this by isolating the lost property value attributable
to Wells Fargo’s foreclosures, as opposed to other potential
causes. In other words, if Oakland’s Hedonic regression
analysis operates as it is explained in the complaint, the same
continuity the Supreme Court found in Lexmark and Bridge
exists here.

    In addition, Oakland’s regression analyses plausibly and
thoroughly account for other variables that might explain
Oakland’s reduced tax base, such that Oakland’s injury can
be surely attributed to Wells Fargo. This is especially true
because Oakland’s claims are aggregate, city-wide claims
that are well-suited for data-driven statistical regression
analyses. In this way, the City has established that there is
some direct relation and continuity between its reduced
property-tax revenues and Wells Fargo’s predatory loans.

    Wells Fargo attempts to distinguish Bridge and Lexmark
by arguing that, unlike in those cases, there are more directly
harmed persons who can bring suit here—the individual
borrowers. 23 But individual borrowers often lack the
financial incentive to pursue a lawsuit because their damages
are much lower than the cost of prosecuting a lawsuit in
federal court. Also, individual borrowers’ lawsuits are often
barred by the FHA’s two-year statute of limitations because
the harmful effects of predatory loans become apparent only
years after the loans are issued. See Garcia v. Brockway,
526 F.3d 456, 461 (9th Cir. 2008) (en banc) (“[A]n
aggrieved person must bring the lawsuit [under the FHA]

     23
     Wells Fargo conveniently overlooks that there were more directly
harmed parties that could have sued in both Lexmark and Bridge—the
remanufacturers and the county, respectively.
          CITY OF OAKLAND V. WELLS FARGO & CO.                       39

within two years of either ‘the occurrence . . . of an alleged
discriminatory housing practice’ or ‘the termination of an
alleged discriminatory housing practice.’” (quoting
42 U.S.C. § 3613(a)(1)(A))); see also Thomas v. S.F. Hous.
Auth., 765 F. App’x 368 (9th Cir. 2019) (“FHA claims are
subject to two-year statute of limitations.”); Lopez v. Wells
Fargo Bank N.A., 727 F. App’x 425, 426 (9th Cir. 2018)
(“The district court properly dismissed [individual
borrower’s] . . . FHA . . . claim[] as barred by the applicable
[two-year] statute[] of limitations.”); Cervantes v.
Countrywide Home Loans, Inc., No. CV 09-517, 2009 WL
3157160, at *6 (D. Ariz. Sept. 24, 2009), aff’d, 656 F.3d
1034 (9th Cir. 2011) (finding that because Latino
“[p]laintiffs obtained their loans in 2006 and brought [the]
present action in March 2009. . . [their] claims fall outside
the two-year time limitation”). 24

    Additionally, cities and local governments are uniquely
well-suited to bring aggregate lawsuits under the FHA to
deter banks from engaging in widespread, large-scale
discriminatory lending practices.        Unlike individual
borrowers, local governments have tools—including home-
loan counseling programs for potential new homeowners,
relocation programs for displaced tenants, eviction
assistance programs, and a complaint system for alleged
wrongful eviction and rent adjustments—that allow them to

     24
        Oakland’s amended complaint is not subject to the FHA’s two-
year statute of limitations because it challenges a larger and ongoing
discriminatory practice. See Garcia, 526 F.3d at 461–62 (“[W]here a
plaintiff, pursuant to the Fair Housing Act, challenges not just one
incident of conduct violative of the Act, but an unlawful practice that
continues into the limitations period, the complaint is timely when it is
filed within [the statutory period, running from] the last asserted
occurrence of that practice.” (alteration in original) (quoting Havens,
455 U.S. at 380–81)).
40        CITY OF OAKLAND V. WELLS FARGO & CO.

detect illegal practices and patterns on a large, systematic
scale.      These tools allow cities—unlike individual
borrowers—to discern a bank’s pattern of discriminatory
lending that becomes apparent once a critical mass of
predatory home loans have been issued, and to generate
statistical disparities to support an aggregate disparate-
impact claim.

    Wells Fargo also attacks the City’s foreclosure
regression on multiple fronts, none of which have merit.
First, it argues that the regression is invalid because it
assumes that a borrower defaults on a predatory loan because
of the loan’s high costs and onerous terms, and not because
of well-recognized causes of foreclosure like job loss,
medical hardships, or divorce. 25 Including these variables in
the regression analysis would likely make no difference,
however, because they are not correlated with the likelihood
that a person will receive a predatory loan, especially
because Wells Fargo argues that these life events happen
after the borrower receives the predatory loan and before
they stop making payments. See Daniel L. Rubinfeld,
Reference Guide on Multiple Regression, in Reference
Manual on Scientific Evidence 303, 315 (3d ed. 2011)
(“Omitting variables that are not correlated with the variable
of interest is, in general, less of a concern, because the
parameter measures the effect of the variable of interest on
the dependent variable is estimated without bias.”). By
arguing that these life events explain the discrepancy in
foreclosure rates between minority and White borrowers,

     25
        Oakland’s amended complaint acknowledges that, due to data
limitations, its current regression analysis does not control for every
aspect of financial hardship that could plausibly affect the likelihood that
someone defaults on a predatory loan, including job loss, medical
hardship, or divorce.
        CITY OF OAKLAND V. WELLS FARGO & CO.                41

Wells Fargo implies that minority borrowers are somehow
more likely than White borrowers to get divorced, suffer
from medical hardships, or lose their jobs. Because this
argument has no basis in law or common sense, we conclude
that accounting for these life events would not increase the
plausibility of the City’s foreclosure regression analysis. See
Bazemore v. Friday, 478 U.S. 385, 400 (1986) (Brennan, J.,
joined by all other Members of the Court, concurring in part)
(“While the omission of variables from a regression analysis
may render the analysis less probative than it otherwise
might be, it can hardly be said, absent some other infirmity,
that an analysis which accounts for the major factors ‘must
be considered unacceptable as evidence of discrimination.’”
(quoting Bazemore v. Friday, 751 F.2d 662, 672 (4th Cir.
1984))).

    Second, Wells Fargo warns that allowing the City to
plead its injuries using regression analyses would mean that
every plaintiff going forward would be able to satisfy
proximate cause under the FHA so long as she has a good
statistician on hand. We disagree. A local corner store or
flower shop—to use Wells Fargo’s example—would be
hard-pressed to design a regression analysis that could
precisely account for its drop in revenues attributable to
predatory-loan-related foreclosures. What prevents any
other private plaintiff from bringing a similar lawsuit is the
principle, established in Lexmark, that what matters is
whether Wells Fargo’s wrongdoing “necessarily injured
[Oakland] as well” as the individual borrowers in such a way
that the individual borrowers were “not [a] ‘more immediate
victim[]’” than Oakland. Lexmark, 572 U.S. at 140 (quoting
Bridge, 553 U.S. at 658). That principle is satisfied in the
instant case because Oakland plausibly alleges how Wells
Fargo’s predatory loans to Black and Latino borrowers
necessarily resulted in widespread foreclosures, which in
42        CITY OF OAKLAND V. WELLS FARGO & CO.

turn necessarily reduced property values, and thus
necessarily reduced Oakland’s property-tax revenues. A
flower shop, by contrast, could lose revenues for a myriad of
reasons, including the emergence of new competitors or an
inexplicable drop in its customers’ appetite for flowers, all
of which would likely be impossible to quantify in a
regression analysis. In this way, like in Lexmark, the City’s
injuries—unlike those of a local corner store or flower
shop—also have “something very close to a 1:1 relationship”
to Wells Fargo’s predatory loans.

     Finally, Wells Fargo unconvincingly argues that the
Ninth Circuit has rejected the use of statistics to overcome
the remoteness of a plaintiff’s injury. It relies on Oregon
Laborers-Employers Health & Welfare Trust Fund v. Phillip
Morris, Inc., 26 where this court held that the statistical model
used by the plaintiff, a welfare fund, was speculative because
it sought to establish that the fund’s participants “would have
allegedly quit smoking or begun smoking safer products,
reducing their smoking-related illnesses, and thereby
lowering the Funds’ costs for reimbursing smokers’ health
care expenditures.” 185 F.3d 957, 965 (9th Cir. 1999)
(emphasis added) (quoting Steamfitters Local Union No. 420
Welfare Fund v. Philip Morris, Inc., 171 F.3d 912, 929 (3d
Cir. 1999)). The problem with the statistical analysis in
Oregon Laborers was that—unlike Oakland’s regression
analysis here—it speculated about events that had not yet
occurred.      Indeed, the Oregon Laborers court even
recognized that it would be “easy to ascertain” the “actual
damages attributable to medical payments [already] made by

     26
       Wells Fargo also relies on Canyon County v. Sygenta Seeds, Inc.,
519 F.3d 969 (9th Cir. 2008), which is completely inapposite because
the plaintiffs in that case did not offer a statistical model or regression
analysis to show proximate causation.
        CITY OF OAKLAND V. WELLS FARGO & CO.                43

plaintiffs due to smoking-related injuries.” Id. at 964.
Therefore, Oregon Laborers does not support Wells Fargo’s
unfounded claim that the Ninth Circuit has rejected
statistical evidence to plausibly plead proximate causation
altogether.

    In sum, construing the amended complaint’s allegations
in the light most favorable to the City, including its proposed
statistical regression analyses, we hold that Oakland has
plausibly alleged that its decrease in property-tax revenues
has some direct and continuous relation to Wells Fargo’s
discriminatory lending practices throughout much of the
City.

    It is important to note that this case reaches us at the
motion to dismiss stage, where Oakland has the burden of
meeting a plausibility standard, not a reasonable probability
or more-likely-than-not standard. Swierkiewicz v. Sorema
N. A., 534 U.S. 506, 515 (2002) (“Rule 8(a) establishes a
pleading standard without regard to whether a claim will
succeed on the merits. ‘Indeed it may appear on the face of
the pleadings that a recovery is very remote and unlikely but
that is not the test.’” (quoting Scheuer v. Rhodes, 416 U.S.
232, 236 (1974)). In this regard, Bazemore is instructive:

       Whether, in fact, such a regression analysis
       does carry the plaintiffs’ ultimate burden will
       depend in a given case on the factual context
       of each case in light of all the evidence
       presented by both the plaintiff and the
       defendant. However, as long as the court
       may fairly conclude, in light of all the
       evidence, that it is more likely than not that
       impermissible discrimination exists, the
       plaintiff is entitled to prevail.
44       CITY OF OAKLAND V. WELLS FARGO & CO.
478 U.S. at 400–01 (Brennan, J., joined by all other
Members of the Court, concurring in part).

    Therefore, even if we conclude today that the City has
plausibly alleged that Wells Fargo’s conduct proximately
caused a reduction in its tax base, Oakland’s allegations still
need to be tested through discovery, including the rigors of
expert rebuttal. For example, Wells Fargo argues that
Oakland cannot attribute reduced property values in the Bay
Area to foreclosures because California caps the annual
property value increases at two percent. Even if proven true,
this argument is only appropriate at the summary judgment
or trial stages, when a trier of fact can evaluate competing
evidence to determine if the two-percent cap undermines
Oakland’s regression analyses. Iqbal, 556 U.S. at 678
(holding that at the pleadings stage this court must look only
at the allegations in the amended complaint to determine if
they are sufficiently detailed to “state a claim for relief that
is plausible on its face”). The City’s regression analyses will
be scrutinized during discovery and at trial before it can be
determined that Wells Fargo’s conduct more likely than not
diminished the City’s tax base. Bazemore, 478 U.S. at 400–
01.

     B. Increased municipal expenses.

     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 *2 (applying proximate cause where
“[t]he City seeks declaratory and injunctive relief and
damages”); Philadelphia, 2018 WL 424451, at *1 (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 *12)).

    Accordingly, we reverse the district court’s conclusion
that Oakland did not have to satisfy the FHA’s proximate-
cause 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.

VII.   Conclusion.

    We affirm the district court’s denial of Wells Fargo’s
motion to dismiss as to Oakland’s claims for lost property-
tax revenues and the district court’s grant of Wells Fargo’s
motion to dismiss as to Oakland’s claims for increased
municipal expenses. We reverse, however, the district
court’s denial of Wells Fargo’s motion to dismiss as to
Oakland’s claims for injunctive and declaratory relief and
we remand for future proceedings consistent with this
opinion.

  AFFIRMED in part; REVERSED in part; and
REMANDED. Each party shall bear its own costs.