There's no question that Miami was one of the cities hardest hit by the housing market collapse, but can the city of Miami actually sue big banks over it?
The U.S. Supreme Court will decide next year.
Back in 2013, the city of Miami sued Bank of America, Wells Fargo, and CitiGroup over a "continuous pattern and practice of mortgage discrimination in Miami." The city claimed the banks had a pattern of steering black and Hispanic applicants into higher risk mortgages even if they had decent credit.
The city claims it lost not only tons of potential property tax income during the housing bubble burst because of predatory lending, but also had to pay to keep up buildings that sat dormant in foreclosure.
At the heart of the lawsuits is the Fair Housing Act. The law gives individuals the right to sue banks over mortgage discrimination, and the city of Miami claims that it counts as an "aggrieved person" under the law. If corporations count as people, why not cities?
Well, in July 2014, U.S. District Judge William Dimitrouleas ruled that the city didn't have standing to sue, so the city appealed the decision.
Then in September 2015, the 11th U.S. Circuit Court of Appeals ruled in a 3-0 decision that actually the city could sue.
If you like this story, consider signing up for our email newsletters.
SHOW ME HOW
You have successfully signed up for your selected newsletter(s) - please keep an eye on your mailbox, we're movin' in!
Bank of America and Wells Fargo appealed that decision to the Supreme Court, and today the court announced it will hear the case during the 2017 term.
The Supreme Court won't actually decide the outcome of the lawsuit, but whether or not it can go forward at all.
This isn't necessarily good news for the city's lawsuit. If the high court had refused to take up the case, the appeals court's decision would have stood and Miami could have gone forward with the lawsuits.
However, Miami isn't the only city suing big banks in a similar fashion, and the Supreme Court likely wants to weigh in on whether these types of cases are legitimate under the Fair Housing Act.