[JURIST] The US Supreme Court [official website] on Tuesday heard argument [day call, PDF] in the cases of Bank of America Corp. v. City of Miami and Lightfoot v. Cendant Mortgage Co. [SCOTUSblog backgrounders]. Believing cyclical poverty in Miami is a byproduct of predatory loans against minority groups, Miami brought a federal lawsuit against lenders Bank of America and Wells Fargo [corporate websites] alleging violation of the Fair Housing Act (FHA) [text]. The district court dismissed the city’s cases, and the US Court of Appeals for the Eleventh Circuit [official website] reversed [opinion, PDF]. The cases were consolidated for appeal to the Supreme Court into Bank of America Corp. v. City of Miami [transcript, PDF], to answer the question of whether the FHA endows cities to file such suits.

In Lightfoot v. Cendant Mortgage Co. [transcript, PDF], the Supreme Court will determine whether the presence of the Federal National Mortgage Association [official website], also known as Fannie Mae, is sufficient alone to confer federal jurisdiction. Typically, federal courts only have jurisdiction over cases arising under federal law, or in certain cases based on diversity of the citizenship [Cornell LII backgrounders] of the parties. This diversity jurisdiction has also typically included when the federal government is a party, particularly when the legislation creating the federal agency permits it to sue in federal court. The issue before the court is whether the seemingly poorly-selected language of the US Code section [12 §USC 1717] creating the Federal National Mortgage Association endows federal courts to hear Fannie Mae-related cases.