Every major city in America is now run by the hard Left, driven by extreme ideology rather than pragmatic policy outcomes. The result of sanctuary policies, the war on cops, the movement to abolish prisons, and rampant socialism is increasing crime, drugs, criminal alien gangs, homelessness, and poverty. But what happens when they have to face the music of a collapsing tax base? Real simple, according to the federal courts: Just blame the banks and make them pay.
On Wednesday, the Supreme Court refused to stay lower court orders essentially holding Wells Fargo and Bank of America responsible for the socio-economic problems of Miami. In what was once considered an outlandishly frivolous but dangerous lawsuit, the Supreme Court has now fully embraced this radical judicial power grab that began several years ago.
In 2017, the high court ruled (Bank of America Corp. v. City of Miami) that a failing city can essentially blame all of its financial, economic, and security woes on banks for discriminating against Hispanic and black borrowers with mortgages … by offering them loans they can’t afford! They were accused of predatory lending in order to generate foreclosures. The 5-3 decision demonstrated 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 even Kennedy. But John Roberts joined the left-wing bloc of justices.
The case was sent back to the lower courts once the Supreme Court ruled that the city of Miami had valid standing. Previously, the district judge ruled that it had no standing, but was reversed by the Eleventh Circuit, a decision that was affirmed by Roberts and the four liberal SCOTUS justices. With the frivolous lawsuit continuing for two more years, the banks went to the Supreme Court to end this charade, but evidently, we don’t even have a majority to stop something this insane, after so much talk of the much-vaunted conservative Supreme Court.
Evidently standards, 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.
So banks have been placed in an untenable situation regarding protected classes. If they deny loans to individuals who can’t afford mortgages, they will be sued, assuming those individuals are not white. If they extend loans to people who can’t afford them, 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. It was the city government of Miami that sued the banks under dubious accusations of discrimination. Where is the injury-in-fact? How is the city a party to a “dispute” over private mortgages?
Are you ready? The argument is essentially as follows: Racist banks offered mortgages to too many black and Hispanic borrows who couldn’t afford them, which led to default, which led to foreclosures, which led to vacant houses, which brought down the values of the adjacent homes, which led to reduced property taxes, which led to more criminal and social problems, which strained the local services (fire, police, inspectors, debris collectors, etc.).
You see, had the evil banks not insidiously lent to black and Hispanic borrowers who couldn’t pay (at the coercion of government), Miami would not have gangs, drugs, poverty, and urban blight. It would be a utopia.
Shockingly, the Supreme Court bought this zany line of thinking hook, line, and sinker in 2017 and is standing behind its merits now. It’s unclear how many justices agree, but at the very least we can deduce Roberts is still all in on the ultimate bank robbery.
This decision opens the door for every failed liberal city to blame the private sector for its increasingly troubling social and economic problems, place further mandates on business practices, and then hit private entities with lawsuits for doing exactly what was asked of them. This is exactly what cities like Philadelphia, Sacramento, and Oakland, are now doing to Wells Fargo.
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, according to 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.
This precedent on the issue of standing also creates numerous avenues for these same cities to sue all sorts of industries and private businesses for any other grievance under the sun, including even for the weather. This is happening in Baltimore. And guess what? The same “conservative” Supreme Court let this insane lawsuit proceed! All of this has a collective effect of distorting the market, raising the cost of business, and dragging down the economy.
Perhaps the most tragic part of this judicial fiasco is not even what it does to private companies but what it helps obfuscate for the failing cities. These endless shakedowns will have the effect of exonerating these very same big-city politicians of blame for the social, fiscal, and criminal justice policies that are truly fueling the urban blight.
Daniel Horowitz is a senior editor of Conservative Review. Follow him on Twitter @RMConservative.