The U.S. Supreme Court was viewed as inclined to allow Miami to pursue its lawsuit against the big banks whose discriminatory lending practices, the city claims, led to foreclosures, a downturn in tax revenue and neighborhood blight, The Washington Post reported today. Several justices were concerned that allowing cities to use the Fair Housing Act of 1968 to recover damages from the banks might open the door to a landslide of litigation. Additionally, it would be extremely difficult to put a price tag on their claims. But it was hard to count five votes against allowing Miami’s suit to move forward to trial. A tie vote would reaffirm the appeals court decision that said the lawsuit could proceed. Civil rights groups consider the case one of the sleepers of the Court’s term, and cities across the country are watching the outcome with similar litigation in mind. Miami sued Bank of America, Wells Fargo and Citigroup under the Fair Housing Act, which bars discrimination in the sale, rental and financing of housing. The law states its purpose as providing for fair housing “throughout the United States.” The city says that it can prove the lending institutions discriminated against Hispanic and African-American residents by directing them into high-interest, risky loans. The resulting defaults destabilized Miami’s poorest neighborhoods, and the resulting loss of tax revenue sent the city to the brink of bankruptcy.
