Supreme Court Overview

Regulatory Taking

 

Murr v. Wisconsin

No. 15-214, Cert. Granted January 15, 2016

Appeal of 359 Wis.2d 675 (2014)

 

This is an appeal from the Supreme Court of Wisconsin, in which their petition for review was denied.  Murr v. Wisconsin, 862 N.W.2d 899 (Wis. 2015). A protracted litigious matter in which the regulation at issue in this case is an ordinance that precludes development of one of two contiguous lots that are both owned by the Murrs.   The Murrs sought a variance to separately use or sell their two contiguous lots. The DNR and county zoning staff opposed the Murrs’ application and, following a public hearing, the St. Croix County Board of Adjustment denied the application. Certiorari review was sought by the Murrs and the circuit court affirmed the portion of the Board’s decision relevant to this appeal.  The Murrs then appealed to the State of Wisconsin Court of Appeals, District III, which affirmed the circuit court’s ruling by applying a per se rule, under which contiguous parcels of land must always be considered together in assessing takings claims.  The matter then went up for appeal to the Wisconsin Supreme Court which denied the Murrs’ subsequent petition for review.

 

The official question posed to the U.S. Supreme Court is whether, in a regulatory taking case, the “parcel as a whole” concept as described in Penn Central Transportation Company v. City of New York, establishes a rule that two legally distinct but commonly owned contiguous parcels must be combined for takings analysis purposes.

 

Oral argument was held on March 20, 2017 in this matter.  The Court, on June 23, 2017, issued its 5-3 opinion that the Court of Appeals of Wisconsin was correct to analyze the lot owners' property as a single unit in assessing the effect of the challenged governmental action.   

 

Equal Protection/Establishment Clause

 

Trinity Lutheran Church v. Pauley

No. 15-577, Cert. Granted January 15, 2016

Appeal of 788 F.3d 779 (8th Cir. 2015)

 

Trinity Lutheran Church of Columbia, Inc. “Trinity,” filed this action alleging that Sara Pauley, acting in her official capacity as Director of the Missouri Department of Natural Resources (“DNR”), violated Trinity’s rights under the United States and Missouri Constitutions by denying its application for a grant of solid waste management funds to resurface a playground on church property. The district court dismissed the complaint for failure to state a claim and denied Trinity’s post-dismissal motion for leave to file an amended complaint. Trinity appealed both rulings to the 8th Circuit which affirmed the lower court’s opinion.

 

The U.S. Supreme Court granted certiorari on January 15, 2016 on the question of whether the exclusion of church from an otherwise neutral and secular aid program violates the Free Exercise and Equal Protection Clauses when the state has no valid Establishment Clause concern.

 

Oral argument was held on April 19, 2017 in this matter.  On June 26, 2017, the Court issued its 7-2 opinion that the Department’s policy violated the rights of Trinity Lutheran under the Free Exercise Clause of the First Amendment by denying the Church an otherwise available public benefit on account of its religious status.  The case was reversed and remanded back to the 8th Circuit for further disposition.

 

Fair Housing Act

 

Bank of America v. City of Miami, Florida

No. 15-1111, Cert. Granted June 28, 2016

Appeal of 800 F.3d 1262 (11th Cir. 2015)

 

Wells Fargo v. Miami, Florida

No. 15-1112, Cert. Granted June 28, 2016

Appeal of 801 F.3d 1258 (11th Cir. 2015)

 

On December 13, 2011, the City of Miami brought three separate fair housing lawsuits against Wells Fargo, Bank of America, and Citigroup. Each alleged that the bank in question had engaged in a decade-long pattern of discriminatory lending by targeting minorities for predatory loans.  The complaints in each case were largely identical, each identifying the same pattern of behavior and supported by empirical data specific to each defendant. Each complaint also contained the same two causes of action: one claim arising under the Fair Housing Act (FHA), 42 U.S.C. § 3601 et seq., as well as an attendant unjust enrichment claim under Florida law.   The City claimed that the discriminatory lending practices foreseeably caused the City economic harm.  Also, the City claimed that the predatory loan practices caused minority-owned properties throughout Miami to fall into unnecessary or premature foreclosure, thereby depriving the City of Miami the revenues as property values decreased.  The City also spent more on municipal services such as police, firefighters, trash and debris removal, to combat the resulting blight.

 

The three cases were heard by the same judge in the Southern District of Florida, and were resolved in the same way based on the district court’s order in the Bank of America case (cited above). The district court dismissed the City’s FHA claim with prejudice on three grounds: the City lacked statutory standing under the FHA because its alleged injuries fell outside the statute’s “zone of interests”; the City had not adequately pled that Wells Fargo’s conduct proximately caused the harm sustained by the City; and, finally, the City had run afoul of the statute of limitations and could not employ the continuing violation doctrine. 

 

The 11th Circuit disagreed with the district court’s legal conclusions regarding the City’s FHA claims. (See City of Miami v. Bank of America Corp., No. 14-14543) and found that the City has constitutional standing to pursue its FHA claims.  Additionally, under the controlling Supreme Court precedent, the “zone of interests” for the Fair Housing Act extends as broadly as permitted under Article III of the Constitution, and therefore encompasses the City’s claim. Finally, while it did agree with the district court’s conclusion that the FHA contains a proximate cause requirement, it found that the City adequately alleged proximate cause.

 

Bank of America appealed to the US Supreme Court and presents the following question:

 

  1. By limiting suit to "aggrieved person[s]," did Congress require that an FHA plaintiff plead more than just Article III injury-in-fact?

  2. The FHA requires plaintiffs to plead proximate cause. Does proximate cause require more than just the possibility that a defendant could have foreseen that the remote plaintiff might ultimately lose money through some theoretical chain of contingencies?

 

Wells Fargo appealed to the U.S. Supreme Court and certiorari was granted on June 28, 2016 on the following questions:

 

  1. Whether the term “aggrieved” in the Fair Housing Act imposes a zone-of-interests requirement more stringent than the injury-in-fact requirement under Article III.

  2. Whether the City is an “aggrieved person” under the Fair Housing Act.

 

Oral arguments were held on November 8, 2016.  On May 1, 2016, The Supreme Court issued its 5-3 opinion by Justice Breyer, holding that:  (1) the City of Miami is is an "aggrieved person" authorized to bring suit under the Fair Housing Act; and, (2) the U.S. Court of Appeals for the 11th Circuit erred in concluding that the city's complaints, charging that the banks engaged in discriminatory conduct that led to a disproportionate number of foreclosures and vacancies in majority-minority neighborhoods, which diminished the city’s property-tax revenue and increased the demand for police, fire, and other municipal services, met the FHA's proximate-cause requirement based solely on the finding that the city's alleged financial injuries were foreseeable results of the banks' misconduct; proximate cause under the FHA requires “some direct relation between the injury asserted and the injurious conduct alleged”; the lower courts should define, in the first instance, the contours of proximate cause under the FHA and decide how that standard applies to the city's claims for lost property-tax revenue and increased municipal expenses.  The case was remanded back to the 11th Circuit for further action.