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Swanson v. Citibank, N.A.

United States Court of Appeals for the Seventh Circuit · 2010 · Civil Procedure

Civil ProcedurePleadingRule 12(b)(6)Rule 8Rule 9(b)Fair Housing ActRule 8(a)(2)Rule 9(b)

Facts

Swanson, an African-American homeowner, applied to Citibank for a home-equity loan after Citibank announced a plan to make loans using federal funds. Citibank conditionally approved a $50,000 loan, but after Lanier, an appraiser working for PCI Appraisal Services, valued her home at $170,000 rather than the $270,000 she had estimated, Citibank denied the loan. Two months later, Swanson obtained another appraisal valuing the home at $240,000. She alleged that Citibank and the appraisal defendants intentionally undervalued her home because of her race in order to deny her credit.

Issue

Whether Swanson's complaint stated plausible Fair Housing Act discrimination claims against Citibank and the appraisal defendants under Rule 8, and whether her common-law fraud claims were pleaded with sufficient particularity under Rule 9(b).

Rule

Under Rule 8, a complaint must give fair notice and enough detail about the subject matter to present a story that holds together; plausibility asks whether the alleged events could have happened, not whether they are more likely than not. In straightforward discrimination cases, the plaintiff may satisfy Rule 8 by identifying the type of discrimination, by whom it was committed, and when it occurred. By contrast, fraud claims are governed by Rule 9(b) and must plead with particularity the circumstances of fraud, including actual damages and, absent a contract, out-of-pocket losses caused by reliance.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Milwaukee, Nora Patel applied to Riverstone Lending, a fictional mortgage company, for a refinance loan on her duplex. Her federal complaint alleges that Riverstone denied the loan because of her national origin, identifies the loan officer who handled the application, and states that the discrimination occurred during her April 2026 refinance application, but gives few additional facts.

On Riverstone's Rule 12(b)(6) motion, how should the court most likely rule on Nora's discrimination claim?

Explanation. The majority opinion explains that Rule 8 still requires only a short and plain statement giving fair notice. In a straightforward discrimination case, alleging the type of discrimination, by whom, and when in connection with the transaction is enough to state a plausible claim. The court asks whether the events could have happened, not whether discrimination is already shown to be more likely than other explanations. (Derived from Swanson v. Citibank, N.A. (2010).)