Why is our economy growing at the slowest rate since WWII? It’s not just taxation and regulation. Frivolous litigation is shutting down our free market economy, and unless the role of the courts in warping statutes and the Constitution is reined in, the problem will only get worse.
If you want to know everything wrong with the Supreme Court, its role, and its members – including the likes of Chief Justice Roberts – take a look at this egregious decision handed down today.
In Bank of America Corp. v City of Miami, the high court ruled that a failing city can essentially blame all of its financial, economic, and security woes on banks for discriminating against Latinos and blacks with mortgages … by offering them loans they can’t afford! The 5-3 decision (Gorsuch did not participate) demonstrates how the courts will grant standing based on the most absurd claims of injury and twist statutes beyond recognition (as well as the Constitution) in order to enact their social justice agenda. Thomas dissented and was joined by Alito and Kennedy. Roberts, once again, joined the left.
Anything goes when suing in pursuit of social justice
Evidently standards, the need for legitimate standing, proof of injury-in-fact, adherence to statute, due process, and all such jurisprudential norms don’t apply when the courts are seeking to make national policy in pursuit of social justice.
Like many major liberal cities, Miami has been experiencing a rash of crime, gang activity, crime-ridden neighborhoods, and social services stretched thin. But rather than blame it on their socialist policies, soft on crime agenda, and illegal immigrant gangs, the city of Miami had a perfect plan: Blame it on the evil banks and mortgage lenders while making it a racial issue to boot.
In 2013, Miami sued Bank of America and Wells Fargo for all its woes. What gives them the right to sue? Well, they contended that the big banks violated the 1968 Fair Housing Act (FHA) by discriminating against blacks and Latinos. You might think they were sued for not issuing mortgages, as banks have been sued for this on a daily basis, particularly since the government enacted its affordable housing agenda in the 1990s, which led to the catastrophic housing crisis and the Great Recession. But no, the banks were actually sued for being discriminatory … for offering too many of them loans! They were accused of predatory lending in order to generate foreclosures.
It is extremely problematic that banks are placed in an untenable situation with respect to protected classes. If they deny individuals who can’t afford mortgages an opportunity for a loan, they will be sued, assuming those individuals are not white. If they do, and the system collapses, they will be accused of predatory lending.
But it gets worse. How is there standing in this case? Did individual borrowers who were black or Latino sue the banks and demonstrate evidence of discriminatory practices in violation of the FHA?
Not a chance.
The City of Miami sued the banks under dubious accusations of discrimination. Where is the injury-in-fact? Are you ready?
Here is how Clarence Thomas, in his dissent, explained the absurdity of the issue of standing in this case:
Miami’s complaints do not allege that any defendant discriminated against it within the meaning of the FHA. Neither is Miami attempting to bring a lawsuit on behalf of its residents against whom petitioners allegedly discriminated. Rather, Miami’s theory is that, between 2004 and 2012, petitioners’ allegedly discriminatory mortgage-lending practices led to defaulted loans, which led to foreclosures, which led to vacant houses, which led to decreased property values, which led to reduced property taxes and urban blight. See 800 F. 3d 1262, 1268 (CA11 2015); 801 F. 3d 1258, 1266 (CA11 2015). Miami seeks damages from the lenders for reduced property tax revenues and for the cost of increased municipal services—“police, firefighters, building inspectors, debris collectors, and others”—deployed to attend to the blighted areas.
Boundless liability and economic disruption for the credit market
This is why, at the time, the lawsuit was regarded as extremely ambitious and few expected it to succeed. Indeed the trial court dismissed the case as a frivolous lawsuit because it was way outside the zone of interest of the FHA statute and there wasn’t nearly sufficient evidence that the banks caused all this harm to the city. Yet the Eleventh Circuit accepted the lawsuit with open arms and remanded it back to the district court. The banks appealed to the Supreme Court and lost in a sweeping decision.
This decision opens the door for every failed liberal city to blame the private sector for its problems, place further mandates on business practices, and then hit private entities with lawsuits for doing exactly what was asked of them. In an era when courts are concocting new rights and alleging every social policy they dislike to be a violation of due process, this case will lead to a mass termination of due process for banks. There is no way a bank can ever ascertain ahead of time the chain reaction of cause and effect it might be liable for in the long run at the hands of failed blue-city politicians. The boundless liability also places banks in an untenable situation given that they are also pressured to go out of their way to lend to protected classes of people, even if specific individuals would not otherwise qualify for a loan. All of this has a collective effect of distorting the market, raising the cost of business, and dragging down the economy.
Roberts a growing problem
It’s extra disturbing that such a disruptive and deleterious outcome – backed by the most tortured reading of a statute – was supported by John Roberts. This is just another case in the growing list of betrayals from Roberts. Those who think that the high court is split down the middle tend to overlook just how far to the Left Kennedy has lurched (look at Obergefell!) and don’t pay attention to the list of bad Roberts decisions.
Recently, in his typical sanctimonious posturing, Roberts expressed concern about “a real danger that the partisan hostility that people see in the political branches will affect the nonpartisan activity of the judicial branch.” Gee, you think? Looking at political outcomes and protected classes and then backfilling them with rewriting of statutes is the ultimate political hostility — to which Roberts himself has clearly grown accustomed.
Author: Daniel Horowitz
Daniel Horowitz is a senior editor of Conservative Review. Follow him on Twitter @RMConservative.