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City of Sacramento v. Wells Fargo & Co.

United States District Court, E.D. California

November 18, 2019

CITY OF SACRAMENTO, Plaintiff,
v.
WELLS FARGO & CO.; WELLS FARGO BANK, N.A., Defendants.

          ORDER

         In this suit for violations of the federal Fair Housing Act (FHA) and California's Fair Employment and Housing Act (FEHA), defendants move for a stay pending resolution of a similar case on appeal before the Ninth Circuit Court of Appeals. For the following reasons, the court DENIES Wells Fargo's motion.

         I. BACKGROUND

         Plaintiff, the City of Sacramento, brings this suit against defendants, Wells Fargo Bank & Co. and Wells Fargo Bank, N.A., alleging violations of the FHA and the FEHA. Specifically, plaintiff alleges that, since at least 2004, Wells Fargo has maintained a pattern and practice of discriminatory lending in Sacramento that constitutes redlining and reverse redlining.[1] Compl., ECF No. 1, ¶¶ 9-11. The City alleges Wells Fargo's conduct amounts to both intentional discrimination and disparate impact discrimination, and that both redlining and reverse redlining violate the FHA, 42 U.S.C. §§ 3601, et seq. Id. ¶¶ 8, 11; see 42 U.S.C. §§ 3604(b), 3605(a).

         Plaintiff seeks relief for its noneconomic and economic injuries under the FHA and the FEHA, Cal. Gov't Code § 12900, et seq.[2] Id. ¶¶ 157-181. Among its noneconomic injuries, plaintiff alleges its policy goal of enabling “any person to choose where to live in the City” has been adversely affected, as have the “social and professional benefits of living in an integrated society.” Id. ¶ 114. To that end, the City's efforts “to encourage racial and economic integration, fair housing, and the elimination of discrimination, ” which the City has pursued through its agencies, coordination with local nonprofits and grant programs and commissions, have been harmed. Id. ¶¶ 115-119. The City's alleged economic injuries include (a) the decreased value of foreclosed properties and (b) the decreased value of properties surrounding foreclosed properties, both of which reduce the City's property tax revenues. Id. ¶¶ 120, 122-140. The City seeks declaratory and injunctive relief and damages. Id. at 52 (prayer for relief).

         In a similar case brought by the City of Oakland in the Northern District, the district court has certified an interlocutory appeal to address two questions also relevant to this case:

(1) Do Oakland's claims for damages based on the injuries asserted in the [complaint] satisfy on a motion to dismiss proximate cause required by the FHA?
(2) Is the proximate-cause requirement articulated in City of Miami limited to claims for damages under the FHA and not to claims for injunctive or declaratory relief?

         City of Oakland v. Wells Fargo Bank, N.A., No. 15-CV-04321-EMC, 2018 WL 7575537, at *2 (N.D. Cal. Sept. 5, 2018), on appeal, No. 19-15169. The appeal is currently pending. See Docket, City of Oakland, No. 19-15169.

         In its order on defendant's motion to dismiss, this court addressed the same issues, but acknowledged the pending “appeal concerning the same issues decided here, the result of which will be binding on this court.” Order on Mot. to Dismiss, ECF No. 36, at 22. The court ordered the parties to meet and confer and notify the court as to whether a stipulated stay is appropriate. Id. The parties met and conferred, but plaintiff did not stipulate to a stay. Mot. for Stay, ECF No. 37, at 5. Defendant now moves for a stay until the Ninth Circuit issues its decision in City of Oakland. Id. Plaintiff opposes, ECF No. 41, and defendant has replied, ECF No. 42. Plaintiff also filed a notice with the court when the Supreme Court denied the City of Miami defendants' application for a stay of mandate after the Eleventh Circuit's decision to allow plaintiff's FHA claims in that case to proceed. Not., ECF No. 47 (citing Docket, Bank of America Corp. v. City of Miami, No. 19A429 (U.S. Sup. Ct. Oct. 30, 2019)).

         II. LEGAL STANDARD

         A district court has inherent power to control the disposition of the cases on its docket in a manner to promote economy of time and effort for itself, for counsel and for litigants. CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962). The trial court may, “with propriety, find it is efficient for its own docket and the fairest course for the parties to enter a stay of an action before it, pending resolution of independent proceedings that bear upon the case.” Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 863-64 (9th Cir. 1979). “This rule applies whether the separate proceedings are judicial, administrative, or arbitral in character, and does not require that the issues in such proceedings are necessarily controlling of the action before the court.” Id. The court's inherent power is discretionary. CMAX, 300 F.2d at 268 (9th Cir. 1962).

         In determining whether a stay is warranted, the court must weigh the competing interests in granting or declining a motion to stay. Id. Among the competing interests are (1) “the possible damage that may result from the granting of a stay, ” (2) “the hardship or inequity a party may suffer in being required to go forward, ” and (3) “the orderly course of justice measured in terms of the simplifying or complicating of issues, proof and questions of law expected to result from a stay.” Id. at 268; see also Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir. 2005) (quoting CMAX, 300 F.2d at 268). Finally, “[t]he party requesting a stay bears the burden of showing that the circumstances justify an exercise of that discretion.” Nken v. Holder, 556 U.S. 418, 433-34 (2009) (citing Clinton v. Jones, 520 U.S. 681, 708 (1997); Landis v. N. Am. Co., 299 U.S. 248, 255 (1936)).

         III. REQUEST FOR JUDICIAL NOTICE

         In connection with their motion to stay, defendants request the court judicially notice six documents filed on public court dockets. Req., ECF No. 38, at 2; Ex. A (First Amended Complaint, ECF No. 104, City of Oakland v. Wells Fargo Bank, N.A., et al., No. 15-CV-04321-EMC (N.D. Cal. Aug. 15, 2017)); Ex. B (Order Granting Permission to Appeal, ECF No. 4, Wells Fargo & Company, et al. v. City of Oakland v., No. 18-80116 (9th Cir. Jan. 24, 2017)); Ex. C (Petition for Permission to Appeal Pursuant to 28 U.S.C. § 1292(b), ECF No. 1, Wells Fargo & Co., et al., v. City of Oakland, No. 18-80116 (9th Cir. Sept. 17, 2018)); Ex. D (Minute Entry of Proceedings, ECF No. 175, City of Oakland v. Wells Fargo Bank, N.A., et al., No. 15-CV-04321-EMC (N.D. Cal. March 7, 2019)); Ex. E (Plaintiff's Motion to Stay Further Proceedings Pending Appeal of Related Action, ECF No. 35., City of Miami Gardens v. JP Morgan Chase & Co., et al., No. 1:14-CV-22205 (S.D. Fla. Sept. 12, 2014)); Ex. F (Order Granting Motion to Stay, ECF No. 38, City of Miami Gardens v. JP Morgan Chase & Co., et al., No. 1:14-CV-22205 (S.D. Fla. Oct. 9, 2014)). The request is unopposed. Because the documents are filed on public court dockets, the court takes judicial notice of the filings, but not of the truth of their contents. See Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th ...


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