United States District Court, D. Maryland
J. MESSITTE UNITED-STATES DISTRICT JUDGE
George's County, Maryland, and Montgomery County,
Maryland (collectively "the Counties") have filed
this suit against Wells Fargo & Company and related
entities ("Defendants") for what the Counties
allege have been predatory and discriminatory residential
mortgage lending, servicing, and foreclosure practices in
violation of the Fair Housing Act (FHA), 42 U.S.C.
§§ 3601, et seq.
Background and Procedural Disposition
Court previously noted, the Counties allege five broad
categories of injuries: foreclosure processing costs, the
increased cost of municipal services, economic injuries to
the Counties' tax bases, lost municipal income, and
non-economic injuries. See ECF No. 53 (providing a
description of each category). In order to evaluate these
allegations at the motion to dismiss phase, the Court must
determine whether the Counties have stated "a claim for
relief that is plausible on its face." Bell All.
Corp. v. Twombly, 550 U.S. 544, 570 (2007). To meet that
standard, the Counties must plausibly plead that
Defendants' alleged actions proximately caused the
alleged injuries. "[P]roximate cause under the FHA
requires 'some direct relation between the injury
asserted and the injurious conduct alleged.'" Bank
of America v. City of Miami, 137 S.Ct. 1296, 1306 (2017)
(quoting Holmes v. Securities Investor Protection
Corporation, 503 U.S. 258, 268 (1992)). The Court has
already stated that it concurs with the Eleventh
Circuit's interpretation of "proximate cause"
in City of Miami v. Wells Fargo & Co., 923 F, 3d
1260 (11th Cir. 2019), following the Supreme Court's
holding in Bank of America. ECF No. 53, pp. 6-8. As such, the
Court held that proximate cause in the context of FHA suits
"is fairly pled where the injury is directly traceable
to the purported violation, without a discontinuity that
breaks the connection." ECF No. 53, p. 8.
evaluated each of the Counties' alleged categories of
injuries according to this standard, the Court held that the
Counties sufficiently pled claims associated with foreclosure
processing costs but found the alleged non-economic injuries
the Counties asserted too far removed from the alleged
discriminatory conduct to be plausibly proximately caused by
the Defendants. See ECF No. 53, pp. 9, 16-17.
the remaining three categories of alleged injuries -
increased municipal services costs, tax base injuries, and
lost municipal income and utility fees - the Court deferred
ruling to allow the Counties an opportunity to amend their
complaint to include more detail with respect to these
claims. ECF No. 54. The Court granted the Counties ninety
days to amend their complaint and twenty days to petition the
court for specific limited discovery as might fortify their
claims. Id. The Counties, in fact, filed a Motion
for Limited Discovery in Support of Their Amended Complaint,
ECF No. 55, to which Defendants responded, ECF No. 56, and
the Counties replied, ECF No. 59.
Motion for Limited Discovery
Counties request "loan origination and servicing data
for each of the residential 1 -4 family first and second lien
mortgage and home equity loans and lines of credit that
Defendants originated, purchased, funded, sold, serviced,
and/or foreclosed upon in the Counties from January 1, 2003
to date." ECF No. 55, p. 3. They, explain that this data
will permit them "to identify the specific
discriminatory loans and foreclosures at issue" which
will enable them to identify the pertinent property
addresses, which, in turn, can be matched with property tax
information. Tn all, the requested data and the subsequent
data that flow from it, can be used to - according to the
Counties - isolate property value and tax base related
damages caused by Defendants via statistical regression
analysis. Id. at 3-4.
requested data, the Counties concede, is the precise type of
data the Counties would seek during Discovery. ECF No. 59, p.
3. But in view of this, as Defendants argue, it is not
appropriate to grant such discovery at this stage. See
Ashcroft v. Iqbal, 556 U.S. 662, 686 (2009);
Libertarian Party of Virginia v. Alcorn, 826 F.3d 70
8, 718 (4th Cir. 2016) (stating that plaintiffs
demand for discovery "misapprehends the nature of a
motion to dismiss'*); see also Bynum v. Martin,
2016 WL 7468050, at *6 n.9 (D. Md. Dec. 27, 2016) (denying
plaintiffs request for discovery in advance of the
Court's decision on a 12(b)(6) motion). Moreover, the
Counties themselves suggest the need for limited discovery
may be moot. In their reply, the Counties explain that they
"do not need the [requested data] at this early stage of
the litigation" and even without the requested data they
"are prepared to amend their complaint" in
accordance with the Court's prior Opinion and Order. ECF
No. 59, p. 5, 7.
Court accepts at this time that limited discovery is not
necessary (if not improper). Since the Counties concede that
it is ultimately not needed at this stage, the Court DENIES
the Counties' Motion for Limited Discovery in Support of
Their Amended Complaint.
heave to Amend Complaint
the Counties have indicated that they are prepared to amend
their complaint to better explain "how a regression
analysis will both isolate the causal links between
Defendants' actions and the Counties' damages"
as well as "quantify those damages," ECF No. 59, p.
7, the Court will welcome such an explanation in the Amended
Complaint. A sworn declaration from a regression analysis
expert would be useful in this regard.
accordance with ECF No. 54, the Counties SHALL have until
November 15, ...