This week at the Ninth: Fair housing and “Solid waste” | Morrison & Foerster LLP – Left Coast Appeals

This week, the court clarifies the Fair Housing Act and the Resource Conservation Recovery Act.

CITY OF OAKLAND V. WELLS FARGO & COMPANY

The en banc found that Oakland failed to adequately plead an immediate case under the Fair Housing Act (“FHA”) for its allegations that allegedly discriminatory lending practices resulted in lower tax revenues and an increase in municipal spending, and that the FHA’s immediate cause requirement applies to claims. for declaratory and injunctive judgments.

Bench Panel: Chief Justice Thomas and Justices McKeown, Wardlaw, Paez, Callahan, Ikuta, Nguyen, Hurwitz, Nelson, Bade and VanDyke, with Justice McKeown writing the opinion.

Climax: “The City of Oakland says Wells Fargo’s discriminatory lending practices have resulted in higher default rates, which in turn triggered higher foreclosure rates which lowered property appraisals, and which ultimately resulted in a loss of property tax revenue and increased municipal spending. These downstream “ripples of harm” are too softened and go too “far beyond” Wells Fargo’s alleged misconduct to establish an immediate cause. “

Background: Oakland sued Well Fargo, alleging that the bank violated the FHA by directing minority borrowers to more expensive and risky mortgages than those regularly offered to white borrowers in the same situation. These riskier loans have resulted in higher default and foreclosure rates and lower property values, according to the city, leading to lower property tax revenues and increased municipal spending on public health and safety. Oakland also claimed that the alleged discriminatory loan undermined its racial integration goals. The City sought damages, as well as a declaratory judgment and an injunction. The district court dismissed Oakland’s claims for damages for increased municipal spending for lack of immediate cause, and dismissed Oakland’s claims for non-economic injury on valid grounds. But the court allowed Oakland’s claims for damages relating to the decline in property tax revenues. And it also allowed all declaratory judgment and injunction requests to go forward. The district court then certified two questions for the interlocutory appeal: “(1) whether Oakland’s claims for damages meet the FHA’s immediate cause requirement, and (2) whether that cause requirement immediate application applies to injunction and declaratory judgment applications. A Ninth Circuit panel overturned the district court’s ruling that the FHA’s immediate cause requirement did not apply to injunctions and declaratory judgments, and upheld the other rulings.

Results: The bench Ninth Circuit affirmed in part and reversed in part. First, the Court explained that under the decision of the FHA and the Supreme Court in Bank of America Corp. v. City of Miami, 137 S. Ct. 1296 (2017), the immediate cause generally requires a direct relationship between the contested practices and the alleged injuries. Applying this standard, the Court concluded that Oakland had not sufficiently advanced the immediate cause of its claim for reduced tax revenues. Because Oakland’s harm theory went beyond the “first stage” of harm, that is, “harm to minority borrowers who receive predatory loans,” it was not straightforward enough. to satisfy the FHA. Nothing about the nature of the statutory cause of action or its administrability in this case warranted a departure from the “first step” principle. The prejudice against which the FHA is protecting itself is “located at the first step: the issuance of the discriminatory loan”, has not yet mitigated the prejudice. There were too many loopholes in the causal chain of Oakland Theory. And nothing prevented borrowers directly affected by Wells Fargo’s practices from suing the lender themselves. For the same reasons, the Ninth Circuit Board also upheld the District Court’s rejection of Oakland’s municipal spending increase request, which it found “even further removed from the alleged wrongdoing than the demand for reduced tax revenues “. Finally, the Ninth Circuit Board agreed with the panel that the FHA’s immediate cause requirements also apply to declaratory and injunctive relief claims, and not just damages. Since “the immediate cause is an element of the cause of action that must be established in each case”, there was no basis for distinguishing between the different types of remedy.

CALIFORNIA RIVER WATCH v. CITY OF VACAVILLE

Court finds that a claim for contributing to the transport of solid waste in violation of the Resource Conservation Recovery Act (“Resource Act”) does not require the carrier to have played a role in the “dumping” of the waste in the first place. .

The panel: Judges Tashima, Bumatay and Rayes (D. Ariz.), With Judge Bumatay writing the opinion, and Judge Tashima dissenting.

Climax : “Nothing in [the Resource Act’s] the text suggests that the solid waste “transporter” must also play some role in waste “disposal”. Although the City may distribute groundwater contaminated by others, [the Resource Act’s] the endangerment provision broadly applies to any “person”, including a “government agency”, such as the City, who “contributes[s]’to the’ transport ‘of’ all ‘waste. Thus, a waste “transporter” does not need to be the cause of the existence of the waste as well. “

Background: In the 1970s and 1980s, a wood processing facility in Elmira, California released massive amounts of hexavalent chromium, a human carcinogen, into the ground (“the Wickes site”). The Wickes site has been identified as a federal hazardous waste site and has been found to have contaminated drinking water wells nearby. Plaintiff River Watch argued that hexavalent chromium has since migrated through groundwater from the Wickes site to the Elmira wellfield, where the town of Vacaville derives much of its water. River Watch sued the City under the Resource Conservation and Recovery Act, alleging that the City “contributes to” the “transaction” of “solid waste”, namely hexavalent chromium, in violation of that law. Under this Act, the definition of “solid waste” is “discarded material”, so the dispute between the parties focused on whether the hexavalent chromium had been scrapped. The district court issued a summary judgment to the City, finding that River Watch could not prove that the City’s water treatment activities were releasing hexavalent chromium.

Results: The Ninth Circuit overturned the district court’s judgment and returned. On appeal, River Watch argued that since the hexavalent chromium originates from the Wickes site, it is “discarded material” under the Resource Act and therefore the City is responsible for its transportation. via its water distribution network. The court first found that River Watch had not abandoned this argument. Although, in the district court, River Watch argued that the exact origin of hexavalent chromium was irrelevant, this did not constitute a loss of its argument on appeal, as it had also always argued that the Wickes site was the probable source of the substance. On the merits, the Court concluded that River Watch had raised a genuine issue of material fact as to whether the City had contributed to the distribution of solid waste in violation of the Resource Act. The material is scrapped when it has served its purpose and is no longer wanted by the consumer. Here, River Watch presented expert evidence that hexavalent chromium in wood processing facilities had been abandoned and set aside by facility operators as residual waste. River Watch also presented evidence that the City contributed to the transport of solid waste by presenting expert evidence that water from the Elmira wellfield and pumped through the City’s water distribution system. contains hexavalent chromium. Unlike the district court order, the Resource Act does not require that the solid waste “transporter” also play some role in the “discharge” of the waste. The majority rejected the argument that their reading of the law would produce absurd results, explaining that it was unlikely that a person’s transmission of a de minimis amount of solid waste (such as handling a glass of contaminated water to a friend) results in a viable resource. Costume act.

Justice Tashima dissented. Since the City had played no role in the contamination of the water, he would have found that it was not liable under the Resource Act. Alternatively, Judge Tashima reportedly ruled that River Watch had abandoned its argument on appeal because it was not a theory defended by River Watch in the district court.

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