Maya v. Centex Corp.

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SYLVESTER MAYA; OFER MASACHI, 

as individuals and on behalf of all

others similarly situated,

Plaintiffs-Appellants, No. 10-55658

v.

 D.C. No.

5:09-cv-01671-

CENTEX CORPORATION; CENTEX

HOMES, a Nevada General VAP-OP

Partnership; CTX MORTGAGE

COMPANY,

Defendants-Appellees.



REMEDIOS MARTINEZ, as an 

individual and on behalf of all

others similarly situated, No. 10-55660

Plaintiff-Appellant,

v.  D.C. No.

5:09-cv-01672-

D.R. HORTON, INC.; DHI VAP-DTB

MORTGAGE COMPANY GP, INC.,

Defendants-Appellees.



17931

17932 MAYA v. CENTEX CORPORATION

EDILBERTO LUMALU; BRIAN DIETZ; 

BRENDA DIETZ; CANDICE

MCDONALD, as individuals and on

behalf of all others similarly

situated,

Plaintiffs-Appellants, No. 10-55662

v.  D.C. No.

5:09-cv-01669-

MDC HOLDINGS, INC., DBA VAP-OP

Richmond American; RICHMOND

AMERICAN HOMES OF CALIFORNIA,

INC.; HOMEAMERICAN MORTGAGE

CORPORATION,

Defendants-Appellees.



STELLA STEPHENS; TIMOTHY YOUNG, 

as individuals and on behalf of all

others similarly situated,

Plaintiffs-Appellants, No. 10-55663

v.

 D.C. No.

5:09-cv-01668-

LENNAR CORPORATION; LENNAR

HOMES OF CALIFORNIA, INC.; VAP-DTB

UNIVERSAL AMERICAN MORTGAGE

COMPANY,

Defendants-Appellees.



MAYA v. CENTEX CORPORATION 17933

SOLOMON KELLY; JAMES MOLINA, as 

individuals and on behalf of all

others similarly situated,

Plaintiffs-Appellants, No. 10-55664

v.  D.C. No.

5:09-cv-01674-

BEAZER HOMES USA, INC.; BEAZER VAP-DTB

HOMES HOLDINGS CORPORATION;

BEAZER MORTGAGE CORPORATION,

Defendants-Appellees.



MATTHEW NIELSON; NICOLE 

NIELSON, as individuals and on

behalf of all others similarly

situated, No. 10-55665

Plaintiffs-Appellants,

 D.C. No.

5:09-cv-01673-

v.

VAP-DTB

SHEA HOMES INC.; J.F. SHEA CO.,

INC.; SHEA MORTGAGE, INC.,

Defendants-Appellees.



17934 MAYA v. CENTEX CORPORATION

GASPARE C. ONETO; PAUL M. 

NAKABAYASHI; SANDRA L.

NAKABAYASHI; JOHN BUTLER; LINDA

BUTLER, as individuals and on

behalf of all others similarly No. 10-55667

situated,

Plaintiffs-Appellants,  D.C. No.

5:09-cv-01670-

v. VAP-DTB

THE RYLAND GROUP, INC.; RYLAND

HOMES OF CALIFORNIA, INC.;

RYLAND MORTGAGE COMPANY,

Defendants-Appellees.



MAYA v. CENTEX CORPORATION 17935

JAMES F. DODARO, as an individual 

and on behalf of all others

similarly situated,

Plaintiff-Appellant,

v.

STANDARD PACIFIC CORP., DBA

Standard Pacific Homes;

STANDARD PACIFIC MORTGAGE, INC.,

Defendants-Appellees,

and

SHEA HOMES; J.F. SHEA CO. INC.;

SHEA MORTGAGE, INC.; CENTEX

CORPORATION; CENTEX HOMES, No. 10-55668

D.C. No.



LLP, Erroneously Sued As Center

Homes and Center Homes 5:09-cv-01666-

Corporation; CTX MORTGAGE VAP-OP

COMPANY; DHI MORTGAGE OPINION

COMPANY GP, INC.; THE RYLAND

GROUP, INC.; RYLAND HOMES OF

CALIFORNIA, INC.; RYLAND

MORTGAGE COMPANY; LENNAR

CORPORATION; LENNAR HOMES OF

CALIFORNIA, INC.; UNIVERSAL

AMERICAN MORTGAGE COMPANY,

Erroneously Sued As Universal

Mortgage Company; EAGLE HOME

MORTGAGE OF CALIFORNIA, INC.,

Erroneously Sued As Eagle Home

Mortgage Inc.,

Real-parties-in-interest.



17936 MAYA v. CENTEX CORPORATION

Appeal from the United States District Court

for the Central District of California

Virginia A. Phillips, District Judge, Presiding

Argued and Submitted

May 9, 2011—San Francisco, California

Filed September 21, 2011

Before: Betty B. Fletcher and Sidney R. Thomas,

Circuit Judges, and Nancy Gertner, District Court Judge.*

Opinion by Judge B. Fletcher

*The Honorable Nancy Gertner, District Judge for the U.S. District

Court for Massachusetts, Boston, sitting by designation. Judge Gertner

retired from the judiciary on September 1, 2011, but concurred in the opin-

ion prior to her retirement.

MAYA v. CENTEX CORPORATION 17939

COUNSEL

Andrea Bierstein (argued), Mitchell Breit, and Jayne Conroy,

Hanly Conroy Bierstein Sheridan Fisher & Hayes LLP, New

York, New York; Derek Yeats Brandt, Simmons Browder

Gianaris Angelides & Barnerd LLC. East Alton, Illinois; Jae

Kim, Richard Dale McCune, Jr., and David Christopher

Wright, McCune & Wright, LLP, Redlands, California, for

plaintiffs Sylvester Maya, Ofer Masachi, Remedios Martinez,

Edilberto Lumalu, Brian Dietz, Brenda Dietz, Candice

McDonald, Stella Stephens, Timothy Young, Solomon Kel-

ley, James Molina, Matthew Nielson, Nicole Nielson,

Gaspare C. Oneto, Paul M. Nakabayashi, Sandra L. Naka-

bayashi, John Butler, Linda Butler and James Dodaro, on

behalf of themselves and others similarly situated.

Nathaniel Garrett (argued), Darren K. Cottriel, Richard S.

Ruben, and Craig Stewart, Jones Day, Irvine, California, for

defendants Lennar Corporation, Lennar Homes of California,

Inc., and Universal American Mortgage Company.

William P. Donovan, Jr., Anahit Tagvoryan, DLA Piper LLP,

Los Angeles, California, for defendants Center Corporation,

Centex Homes, and CTX Mortgage Company.

Valentine Shade Hoy, Megan A. Mazza, Jeffrey R. Patterson

and Charles L. Pernicka, Allen Matkins Leck Gamble Mallory

& Natsis, LLP, San Diego, California, for defendants D.R.

Horton, Inc. and DHI Mortgage Company GP, Inc.

Jason Charles Gless, Daniel Adlai Berman, and Keith Evan

Smith, Wood Smith, Henning & Berman, Riverside, Califor-

nia, for defendants MDC Holdings, Inc., Richmond American

Homes of California, Inc., and HomeAmerican Mortgage

Corporation.

Lawrence J. Bracken, II, Phillip J. Eskenazi, Kirk Hornbeck,

and Bryan A. Powell, Hunton & Williams, Atlanta, Georgia,

17940 MAYA v. CENTEX CORPORATION

for defendants Beazer Homes USA, Inc., Beazer Homes

Holdings Corporation, and Beazer Mortgage Corporation.

Donald L. Morrow, Paul, Hastings, Janofsky & Walker LLP,

Costa Mesa, California, for defendants Shea Homes, Inc., J.F.

Shea Co, Inc., and Shea Mortgage, Inc.

Nancy Nguyen Sims and Perrie M. Weiner, DLA Piper LLP,

Los Angeles, California, for defendants The Ryland Group,

Inc., Ryland Homes of California, Inc., and Ryland Mortgage

Company.

Robert Lennart Green, Stephanie Michelle Lemmon, Kather-

ine Villareal Lizardo, and Brian Plante, Green & Hall, APC,

Santa Ana, California, for defendants Standard Pacific Corp.,

DBA and Standard Pacific Mortgage, Inc.

OPINION

B. FLETCHER:

This case arises against the backdrop of the national hous-

ing crisis. Nationwide, foreclosures are increasing, construc-

tion and purchase of new homes is decreasing, and home

values are plummeting.1 In some ways, the facts presented

here echo national trends, but we decide a fairly narrow ques-

tion: whether individuals who purchased homes in new devel-

opments have standing to sue the developers for injuries

allegedly caused by the developers’ practice of marketing

neighboring homes to individuals who presented a high risk

of foreclosure and abandonment of their homes, financing

those high-risk buyers, concealing that information, and mis-

representing the character of the neighborhoods. The district

1

See generally, Harvard University Joint Center for Housing Studies,

The State of the Nation’s Housing 2011, available at

http://www.jchs.harvard.edu/publications/ets/011/son2011.pdf.

MAYA v. CENTEX CORPORATION 17941

court held that plaintiffs did not have standing because none

of the alleged injuries amounted to a concrete, non-

conjectural injury-in-fact, and that there was no sufficiently

strong causal connection between any injury and defendants’

conduct. It also denied plaintiffs leave to amend their com-

plaints. We reverse and remand for further proceedings.

I.

A.

Plaintiffs are individual homeowners who purchased

houses in new developments constructed by one of eight large

national home-builders between 2004 and 2006. Each of them

made a down payment of twenty-percent or more of the

home’s purchase price. Defendants are some of the nation’s

largest housing developers, and include the developers’ parent

companies and subsidiary mortgage companies. Plaintiffs

seek damages, attorneys fees and costs, and the option to

rescind their home purchases due to defendants’ fraud, negli-

gent misrepresentation, breach of implied covenant of good

faith and fair dealing, and violations of California’s Business

and Professional Code (CBPC). They also seek an injunction

prohibiting defendants from continuing to engage in practices

violating the CBPC, or providing mortgage services or financ-

ing to buyers purchasing homes from defendants.

Plaintiffs claim that defendants represented that they were

building “stable, family neighborhoods occupied by owners of

the homes” According to the plaintiffs, “[i]mplicit in this mar-

keting scheme was that [d]efendants were making a good-

faith effort to sell homes to buyers who they expected could

afford to buy the houses and would be stable neighbors.”

Nevertheless, defendants marketed the houses to “unqualified

buyers who posed an abnormally high risk of foreclosure.”2

2

Plaintiffs do not explicitly define what they mean by “unqualified”

buyers, but it appears their definition encompasses those with unverified

income, poor credit history, or inability to make a down payment of less

than 20% of the home’s value.

17942 MAYA v. CENTEX CORPORATION

Similarly, plaintiffs claim that defendants represented that

they “discourage[ ] speculation . . . [and] intended to sell

homes only to people who will occupy them” but sold homes

to investors who had no intent to reside in the homes and were

more likely to walk away from the homes in times of eco-

nomic hardship.

Plaintiffs claim that these misrepresentations and omissions

were part of a comprehensive scheme to increase defendants’

profits. They allege that defendants financed at least 65% of

the mortgages on homes in their communities. Plaintiffs con-

tend that by marketing homes to high-risk buyers, and by

financing buyers who may not have been able to obtain other

financing, defendants created a “buying frenzy” that artifi-

cially increased demand and home prices. They maintain that

defendants’ marketing and lending practices were material

information “related both to the value of their houses and the

desirability of the properties.” They allege that “[i]f Defen-

dants had made such disclosures, Plaintiffs would not have

purchased the houses from Defendants and/or [sic] would not

have paid an inflated price for the house.”

Plaintiffs aver that since they purchased their homes, “as

was inevitable, . . . these unqualified and high-foreclosure-risk

buyers began to default on their loans leading to foreclosures

and short sales.” Their neighborhoods have allegedly had “a

number of foreclosures and short sales that have resulted in a

substantial loss of value to the surrounding homes.” They

allege that the loss was “much greater than if their houses had

been located in a neighborhood where Defendants’ scheme

. . . did not occur.” Plaintiffs further contend that the foreclo-

sures and short sales have “drastically altered” the “desirabili-

ty” of their properties and neighborhoods, resulting in

abandoned houses, multiple families living in one home, tran-

sient neighborhoods, and even increased crime.

Plaintiffs’ claims fall into two broad categories. They

allege injuries that occurred at the time of sale: namely, that

MAYA v. CENTEX CORPORATION 17943

they paid more for their homes than they were actually worth

at the time, and that they would not have purchased their

homes had defendants made the proper disclosures. We will

refer to these claims as plaintiffs’ “overpayment” and “rescis-

sion” claims. Plaintiffs also allege injuries that occurred after

the sale: that their homes have decreased in economic value

and desirability as places to live. We will refer to these claims

as plaintiffs “decreased value” and “decreased desirability”

claims.

B.

Defendants each filed a motion to dismiss, arguing that the

plaintiffs (1) lacked constitutional and statutory standing; (2)

failed to allege their fraud-based claims with particularity as

required by Rule 9(b); (3) failed to state a claim as to each

cause of action under Rule 12(b)(6). The district court granted

all of the motions to dismiss on the grounds that plaintiffs

lack constitutional standing.

The district court, relying on three cases presenting similar

facts, concluded that plaintiffs failed to allege a “concrete,

particular, and actual injury.” See Kaing v. Pulte Homes, Inc.,

No. 09-5057, SC 2010 WL 625365 (N.D. Cal. Feb. 18, 2010);

Tingley v. Beazer Homes Corp., No. 3:07cv176, 2008 WL

1902108 (W.D.N.C. April 25, 2008); Green v. Beazer Homes

Corp., No. 3:07-1098-CMC, 2007 WL 2688612 (D.S.C. Sept.

10, 2007)). First, it held that because none of the owners had

sold or attempted to sell their homes, any loss in the value of

homes caused by the builders’ wrongful acts and omissions

was “conjectural.” In other words, the loss in value could not

“be ascertained, nor measured [against the initial purchase

price] unless and until the owner sells the house.” Second, the

district court concluded that both the decreased value and

alleged overpayment had the capacity “to fluctuate with

changes in the economy,” thus “strongly suggesting” that the

injury was “conjectural and speculative, not actual or immi-

nent.”

17944 MAYA v. CENTEX CORPORATION

In addition, the district court held that none of the alleged

injuries were “fairly traceable” to defendants’ actions. As to

plaintiffs’ decreased value theory, the district court held that

any loss in value to plaintiffs’ homes “necessarily depend[s]”

on a causal chain including numerous independent forces,

including the decisions of “unqualified” buyers to default on

their homes and the decision of mortgage assignees to fore-

close on the defaulted mortgages. Similarly, it held that the

decreased desirability of the neighborhood (unkempt yards,

transient neighbors, etc.) was not linked to defendants’ con-

duct by “more than speculation.” Finally, with respect to the

overpayment theory, the district court stated that the injury

depended on a number of factors inflating housing prices

nationwide. Because the district court held that plaintiffs

lacked standing, it dismissed the cases for lack of subject mat-

ter jurisdiction, and declined to reach the Rule 9 and failure

to state a claim arguments. The court also denied plaintiffs’

request to amend in order to introduce expert testimony that

could cure any defect in standing, and dismissed the cases

with prejudice.

II.

“[T]hose who seek to invoke the jurisdiction of the federal

courts must satisfy the threshhold requirement imposed by

Article III of the Constitution by alleging an actual case or

controversy.” City of Los Angeles v. Lyons, 461 U.S. 95, 101

(1993). “[T]o satisfy Article III’s standing requirements, a

plaintiff must show (1) it has suffered an ‘injury in fact’ that

is (a) concrete and particularized and (b) actual or imminent,

not conjectural or hypothetical; (2) the injury is fairly trace-

able to the challenged action of the defendant; and (3) it is

likely, as opposed to merely speculative, that the injury will

be redressed by a favorable decision.” Friends of the Earth,

Inc., v. Laidlaw Ent’l Serv., Inc, 528 U.S. 167, 180 -81 (2000)

(quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61

(1992)). We review de novo a district court’s determination

MAYA v. CENTEX CORPORATION 17945

that plaintiffs lack constitutional standing. Breiner v. Nev.

Dept. of Corrections, 610 F.3d 1202, 1206 (9th Cir. 2010).

A.

[1] The district court erroneously concluded that lack of

Article III standing was grounds for dismissal under Federal

Rule of Civil Procedure 12(b)(6) for failure to state a claim.

Though lack of statutory standing requires dismissal for fail-

ure to state a claim, lack of Article III standing requires dis-

missal for lack of subject matter jurisdiction under Federal

Rule of Civil Procedure 12(b)(1). Simmonds v. Credit Suisse

Sec. (USA) LLC, 638 F.3d 1072, 1087 n.6 (9th Cir. 2011); see

also Vaughn v. Bay Envt’l Mgmt., Inc., 567 F.3d 1021, 1022

(9th Cir. 2009) (statutory standing); Warren v. Fox Family

Worldwide, Inc., 328 F.3d 1136, 1141 (9th Cir. 2003) (consti-

tutional standing). In light of this error, the district court

unnecessarily limited the scope of its review. While review

for failure to state a claim under 12(b)(6) is generally con-

fined to the contents of the complaint, Marder v. Lopez, 450

F.3d 445, 448 (9th Cir. 2006), in determining constitutional

standing, “it is within the trial court’s power to allow or to

require the plaintiff to supply, by amendment to the complaint

or by affidavits, further particularized allegations of fact

deemed supportive of plaintiff’s standing.” Warth v. Seldin,

422 U.S. 490, 501 (1975); see also Table Bluff Reservation

(Wiyot Tribe) v. Philip Morris, Inc., 256 F.3d 879, 882 (9th

Cir. 2001) (in assessing standing, the court may consider “the

complaint and any other particularized allegations of fact in

affidavits or amendments to the complaint”).

Moreover, because the district court treated the motion as

a 12(b)(6), it inappropriately applied the standards of Ashcroft

v. Iqbal, 129 S. Ct. 1937 (2009) and Bell Atlantic Corp. v.

Twombly, 550 U.S. 544 (2007). Twombly and Iqbal addressed

the pleading required to survive a motion to dismiss for fail-

ure to state a claim, and, distilled to their essence, impose two

requirements. First, the reviewing court, though crediting fac-

17946 MAYA v. CENTEX CORPORATION

tual assertions made in the pleadings, is not required to credit

legal conclusions. Iqbal, 129 S. Ct. at 1949-50 (citing Twom-

bly, 550 U.S. at 555). Second, the complaint cannot survive

a motion to dismiss unless it alleges facts that plausibly (not

merely conceivably) entitle plaintiff to relief. Id. at 1950-51.

In this case, the district court stressed that the complaint “re-

quires more than labels and conclusions, and a formulaic reci-

tation of the elements of the cause of action will not do.” It

also concluded that “[p]laintiffs failed to plead facts sufficient

‘to raise a right to relief above the speculative level.’ ”

Twombly and Iqbal are ill-suited to application in the con-

stitutional standing context because in determining whether

plaintiff states a claim under 12(b)(6), the court necessarily

assesses the merits of plaintiff’s case. But the threshold ques-

tion of whether plaintiff has standing (and the court has juris-

diction) is distinct from the merits of his claim. Rather, “[t]he

jurisdictional question of standing precedes, and does not

require, analysis of the merits.” Equity Lifestyle Props., Inc.

v. San Luis Obispo, 548 F.3d 1184, 1189 n.10 (9th Cir. 2008);

see also Seldin, 422 U.S. at 500 (Standing “in no way depends

on the merits of the [ ] contention that particular conduct is

illegal.”); Bell v. Hood, 327 U.S. 678, 682 (1946); Catholic

League for Religious and Civil Rights v. San Francisco, 624

F.3d 1043, 1049 (9th Cir. 2010) (en banc) (“Nor can standing

analysis, which prevents a claim from being adjudicated for

lack of jurisdiction, be used to disguise merits analysis, which

determines whether a claim is one for which relief can be

granted if factually true.”). This is not to say that plaintiff may

rely on a bare legal conclusion to assert injury-in-fact,3 or

engage in an “ingenious academic exercise in the conceiv-

able” to explain how defendants’ actions caused his injury.4

3

See Chapman v. Pier 1 Imports (U.S.) Inc., 631 F.3d 939, 954-55 &

n.9 (2011) (en banc) (holding that a plaintiff who did not allege which bar-

riers existed at a store and how they impacted his disability could not

establish injury-in-fact simply by claiming that the store deprived him of

“full and fair enjoyment” in violation of the ADA).

4

United States v. Students Challenging Regulatory Agency Procedures

(SCRAP), 412 U.S. 669, 689-90 (1973).

MAYA v. CENTEX CORPORATION 17947

We simply note that Twombly and Iqbal deal with a funda-

mentally different issue, and that the court’s focus should be

on the jurisprudence that deals with constitutional standing.

B.

Each element of standing “must be supported . . . with the

manner and degree of evidence required at the successive

stage of the litigation.” Defenders of Wildlife, 504 U.S. at 561.

“For purposes of ruling on a motion to dismiss for want of

standing, both the trial and reviewing courts must accept as

true all material allegations of the complaint and must con-

strue the complaint in favor of the complaining party.” Seldin,

422 U.S. at 501. “At the pleading stage, general factual alle-

gations of injury resulting from the defendant’s conduct may

suffice, for on a motion to dismiss we ‘presum[e] that general

allegations embrace those specific facts that are necessary to

support the claim.” Defenders of Wildlife, 504 U.S. at 561

(alteration in original) (quoting Lujan v. Nat’l Wildlife Fed’n,

497 U.S. 871, 889 (1990)); see also Lucas v. S.C. Coastal

Council, 505 U.S. 1003, 1014 n.3 (1992) (cautioning that

while at the summary judgment stage, the court “require[s]

specific facts to be adduced by sworn testimony,” “a chal-

lenge to a generalized allegation of injury in fact made at the

pleading state . . . would have been unsuccessful”). “ ‘[A]

plaintiff must demonstrate standing for each claim he seeks to

press’ and ‘for each form of relief that is sought.’ ” Davis v.

Fed. Elec. Comn’n, 554 U.S. 724, 734 (2008) (quoting Daim-

ler Chrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006)).

The parties concede, and we agree, that a favorable court

decision would redress plaintiffs’ injuries. Accordingly we

address only the first two elements of constitutional standing.

We conclude that plaintiffs have established injury-in-fact and

causation with respect to their overpayment and rescission

claims. We hold that decreased value and desirability are con-

crete injuries-in-fact, but agree with the district court that the

current record does not establish a sufficient causal connec-

17948 MAYA v. CENTEX CORPORATION

tion between defendants’ actions and plaintiffs harms. Never-

theless, we hold that plaintiffs should be permitted to amend

their complaint because plaintiffs may be able to establish by

amendment that they have standing to pursue their claims.

1. Overpayment and Rescission

[2] a. Injury-In-Fact. To qualify as an injury-in-fact, an

alleged harm must be “concrete and particularized” and “ac-

tual or imminent, not conjectural or hypothetical.” Laidlaw,

528 U.S. at 180-81. Plaintiffs claim that, as a result of defen-

dants’ actions, they paid more for their homes than the homes

were worth at the time of sale. Relatedly, they claim that they

would not have purchased their homes had defendants made

the disclosures allegedly required by law. We agree with

plaintiffs that these are actual and concrete economic injuries.

See, e.g., Valley Forge Christian Coll. v. Ams. United for Sep-

aration of Church and State, 454 U.S. 464, 486 (1982); Sierra

Club v. Morton, 405 U.S. 727, 733-34 (1972) (“[P]alpable

economic injuries have long been recognized as sufficient to

lay the basis for standing”); San Diego Cnty. Gun Rights

Comm. v. Reno, 98 F.3d 1121, 1130 (9th Cir. 1996)

(“Economic injury is clearly a sufficient basis for standing.”).

Allegedly, plaintiffs spent money that, absent defendants’

actions, they would not have spent. Cf. Gen. Motors Corp. v.

Tracy, 519 U.S. 278, 286 (1997) (holding that consumers who

paid more for gas than they should have as a result of discrim-

inatory tax laws had Article III standing). This is a quintes-

sential injury-in-fact.

[3] The district court concluded that the possibility of

improvement in the housing market made plaintiffs’ injuries

speculative, because it is possible that they could sell their

homes for a profit at some point in the future. The district

court misapprehended plaintiffs’ allegations. Plaintiffs claim

that they paid more for their homes than they were worth at

the time of sale.5 Future recovery in the housing market will

5

We reject defendants’ argument that, under Dura Pharmaceuticals,

Inc. v. Broudo, 544 U.S. 336 (2005), plaintiffs could not have paid more

MAYA v. CENTEX CORPORATION 17949

not cure plaintiffs’ injuries—if plaintiffs had paid what the

homes were worth at the time of sale, they would obtain

greater returns if they sold during a time of economic

improvement. Further, if plaintiffs would not have purchased

their homes absent defendants’ misconduct, the injury was

created at the moment of fraudulent purchase, and is not

affected by any changes in the housing market.

[4] b. Causation. Defendants would have us require

plaintiffs to demonstrate that defendants’ actions are the

“proximate cause” of plaintiffs’ injuries. Plaintiffs do not bear

so heavy a burden. To survive a motion to dismiss for lack of

constitutional standing,6 plaintiffs must establish a “line of

causation” between defendants’ action and their alleged harm

that is more than “attenuated.” Allen v. Wright, 468 U.S. 737,

757 (1984). A causal chain does not fail simply because it has

several “links,” provided those links are “not hypothetical or

tenuous” and remain “plausibil[e].” Nat’l Audubon Soc., Inc.

v. Davis, 307 F.3d 835, 849 (9th Cir. 2002) (citing with

approval Autolog Corp. v. Regan, 731 F.2d 25, 31 (D.C. Cir.

1984) (What matters is not the “length of the chain of causa-

tion,” but rather the “plausibility of the links that comprise the

chain.”)). In cases where a chain of causation “involves

numerous third parties” whose “independent decisions” col-

lectively have a “significant effect” on plaintiffs’ injuries, the

than their homes were worth because they paid the price supported by the

market at the time. Dura is inapplicable to this case because it discussed

the standards for proving the loss and causation elements of a private

securities action under 15 U.S.C. § 78u-4, not standing under Article III.

The elements of a statutory cause of action are irrelevant to the constitu-

tional standing analysis.

6

Defendants’ reliance on Duke Power Co. v. Carolina Envt’l Study

Group Inc., 438 U.S. 59, 75 n.20 (1978) and Simon v. E. Ky. Welfare

Rights Org., 426 U.S. 26 (1976) is misplaced. Duke Power involved a

final judgment on the merits. 438 U.S. at 67-68. Simon was an appeal from

the grant of summary judgment. 426 U.S. at 41-42. Neither case estab-

lishes the burden for surviving a motion to dismiss.

17950 MAYA v. CENTEX CORPORATION

Supreme Court and this court have found the causal chain too

weak to support standing at the pleading stage. See Allen, 468

U.S. at 759; San Diego Gun Rights, 98 F.3d at 1126.

[5] The district court concluded that the “housing bubble,

or inflation of housing prices, was a nationwide phenomenon,

traceable to variables independent of Defendants’ alleged

scheme, such as lax regulatory enforcement, rates of unem-

ployment, credit market developments, and general economic

growth.” Accordingly, it held that plaintiffs had not estab-

lished a sufficient causal connection between defendants’

actions and the allegedly inflated prices paid by plaintiffs. We

disagree. Construing the facts in the light most favorable to

plaintiffs and drawing all inferences in their favor, plaintiffs

have sufficiently alleged that defendants, not third parties,

inflated the “bubble” in their particular neighborhoods, caus-

ing plaintiffs to overpay. Plaintiffs claim that defendants

financed a substantial majority of buyers in plaintiffs’ neigh-

borhoods, and were thus able to dictate the terms of a large

number loans and plausibly create demand that would not oth-

erwise have existed. Further, the neighborhoods were new

developments, so there was no independent economic base-

line against which to assess the neighborhoods’ value. Under

these circumstances, plaintiffs can plausibly claim that the

“artificial demand” created by defendants’ marketing and

financing practices had an identifiable effect on the price they

paid for their homes.

[6] The causal connection between defendants’ actions and

plaintiffs’ rescission claim is even stronger. Plaintiffs state

that they would not have purchased their homes had there

been proper disclosure of defendants’ lending practices. There

is a direct causal link between defendants’ allegedly faulty

disclosure and plaintiffs’ injuries. In sum, we hold that plain-

tiffs have established both injury and causation sufficient to

withstand a motion to dismiss on their claims that (1) they

paid more for their homes than they were worth, and (2) they

MAYA v. CENTEX CORPORATION 17951

would not have purchased their homes had defendants fully

disclosed their practices.

2. Decreased Value and Desirability

[7] a. Injury-in-Fact. A current reduction in the eco-

nomic value of one’s home is a cognizable injury for constitu-

tional standing purposes. In Gladstone Realtors v. Bellwood,

441 U.S. 91, 101-11 (1979), plaintiffs sued real estate brokers

for “steering” white prospective home-buyers away from their

neighborhood, allegedly in violation of Title VII and the Fair

Housing Act. Plaintiffs alleged, among other injuries, that the

brokers “manipulated the housing market of Bellwood to the

economic and social detriment of the citizens of [the] village.”

Id. at 115, n.30. The Court held plaintiffs had alleged a cogni-

zable economic injury sufficient to survive summary judg-

ment. It stated that plaintiffs would have to prove at trial

“absolute or relative diminution in value of the individual

[residents’] homes” but noted that “convincing evidence that

the economic value of one’s home has declined as a result of

the conduct of another certainly is sufficient under Art. III to

allow standing to contest the legality of that conduct.” Id. at

115; see also Laidlaw, 528 U.S. at 183-84 (2000) (determin-

ing that a plaintiff’s declaration that “her home, which is near

[defendant’s] facility, had a lower value than similar homes

located farther from the facility, and that she believed the pol-

lutant discharges accounted for some of the discrepancy”

properly supported the plaintiff’s claim that the challenged

action “directly affected [her] . . . economic interests.”). Simi-

larly, in Barnum Timber v. U.S. Environmental Protection

Agency, we held that a landowner alleging that it would suffer

a reduction in the economic value of its property on account

of the EPA’s impending classification of a neighboring creek

as an impaired water body had established an injury in fact

sufficient to withstand a motion to dismiss. 633 F.3d 894, 898

(9th Cir. 2011); see also Allandale Neighborhood Ass’n v.

Austin Transp. Study Policy Advisory Comm., 840 F.2d 258,

262 (5th Cir. 1988) (“[A] market devaluation has present

17952 MAYA v. CENTEX CORPORATION

adverse consequences short of realization through sale.”).

These cases establish that a present decrease in the economic

value of one’s home is a cognizable and concrete injury-in-

fact.

[8] The district court’s holding to the contrary rests primar-

ily on its conclusion that plaintiffs will not realize any

decrease in the value of their property until they attempt to

sell (and that the economy may improve in the interim, pre-

venting any loss), so the injury is speculative. The district

court’s position cannot be reconciled with Gladstone,

Laidlaw, and Barnum Timber—nothing in those decisions

suggests that plaintiffs had attempted or would attempt to sell,

or that selling one’s property is a necessary pre-requisite to

claiming injury on account of its decreased value. More fun-

damentally, the district court’s reasoning misses the thrust of

plaintiffs’ claims. Plaintiffs argue that defendants’ acts caused

their homes to lose value above and beyond those losses

caused by general economic conditions. Thus, disregarding

the vicissitudes of the national housing market, the portion of

the diminution in the value of plaintiffs’ property attributable

to defendants’ acts remains. To be sure, plaintiffs would need

to quantify the damages resulting from decreased value in

order to recover, but that isn’t necessary to establish injury at

the pleading stage. Gladstone, 441 U.S. at 115.

[9] Relatedly, plaintiffs claim they were injured because

the blight resulting from defendants’ lending practices makes

their homes less desirable places to live. Decreased quality of

life is an injury in fact sufficient to support standing. For

example, in City of Sausalito v. O’Neil, 386 F.3d 1186,

1198-99 (9th Cir. 2004), we held that a city had constitutional

standing to pursue its claim that defendants’ acts would result

in increased traffic, crowds, decreased attractiveness, and

damage to the town’s historical character. See also Walker v.

City of Mesquite, 169 F.3d 973, 980 (5th Cir. 1999) (holding

that property owners alleged injury by claiming that newly

constructed housing projects would increase traffic, noise, and

MAYA v. CENTEX CORPORATION 17953

crime); Kelley v. Selin, 42 F.3d 1501, 1509 (6th Cir. 1995)

(holding that landowners had alleged sufficient injury to aes-

thetic interests caused by storage of nuclear waste nearby);

Alschuler v. Dep’t of Hous. & Urban Dev., 686 F.2d 472,

476-77 (7th Cir. 1982) (holding that plaintiffs who alleged

that occupancy of a nearby housing project would increase

crime, strain community resources, and decrease the aesthetic

quality of the neighborhood had alleged an injury in fact suffi-

cient to withstand a motion to dismiss).7 Both reduction in

value to one’s property (even if one has not attempted to sell

the property) and decreased quality of life are concrete inju-

ries.

b. Causation: To support their claim that defendants’

actions resulted in decreased home values, plaintiffs allege

that sales of homes subject to foreclosure are “usually well

below market value,” and those sales “then become the new

comparative sales values for the neighborhood . . . [at] a

vastly lower market rate.” Thus, on plaintiffs’ theory, the

decreased-value injury does not occur until the risk posed by

defendants’ lending and disclosure practices comes to fruition

in foreclosure. The same is true of plaintiffs’ decreased desir-

ability claim. They contend that foreclosures (not merely the

risk of foreclosure) resulted in abandoned homes and other

forms of blight.

[10] We agree with the district court that plaintiffs have

not established how defendants’ actions necessarily result in

7

Defendants attempt to distinguish these cases by arguing that each case

involved a physical intrusion onto plaintiffs’ property. This distinction is

immaterial for the purposes of determining whether plaintiffs have been

injured — the decrease in value and desirability exists whether caused by

a “physical” or “non-physical” intrusion. The thrust of defendants’ argu-

ment is that they should not be liable for failing to disclose non-physical

factors affecting plaintiffs’ property values. This argument concerns the

merits of plaintiffs’ claims, not whether they have standing to pursue

them.

17954 MAYA v. CENTEX CORPORATION

foreclosure,8 nor do plaintiffs’ complaints allege that the

decreased value is caused by the risk posed by their neighbors

(even absent foreclosures).9 Nevertheless, we conclude that, in

the circumstances presented, plaintiffs should be permitted to

amend their complaint. “Dismissal without leave to amend is

improper unless it is clear, upon de novo review, that the

complaint could not be saved by any amendment.” Krainski

v. Nev. ex rel. Bd. of Regents of Nev. System of Higher Educ.,

616 F.3d 963, 972 (9th Cir. 2010).

Before the district court, plaintiffs offered to amend and

produce an expert report distinguishing the effect of defen-

dants’ actions from general economic influences. Expert testi-

mony can be used to explain the causal connection between

defendants’ actions and plaintiffs’ injuries, even in the context

of other market forces. Barnum Timber, 633 F.3d at 900-01.

Accordingly, we cannot say that it is clear that the complaint

could not be saved by any amendment. The district court

should have permitted plaintiffs to amend and include any

expert testimony that could have established a sufficient

causal connection between defendants’ actions and the

decreased value and desirability of their homes.

III.

We hold that the district court erred in dismissing plain-

8

See Bennett v. Spear, 520 U.S. 154, 168-69 (1997) (“[I]t does not suf-

fice if the injury complained of is the result of the independent action of

some third party not before the court, [but] that does not exclude injury

produced by determinative or coercive effect upon the action of someone

else.”) (emphasis added).

9

Cf. Krottner v. Starbucks Corp., 628 F.3d 1139, 1142 (9th Cir.

2010)(“A plaintiff may allege a future injury in order to comply with [the

injury-in-fact] requirement, but only if he or she ‘is immediately in danger

of sustaining some direct injury as the result of the challenged . . . conduct

and the injury or threat of injury is both real and immediate, not conjec-

tural or hypothetical.’) (quoting City of Los Angeles, 461 U.S. at 102

(1983)) (emphasis in original).

MAYA v. CENTEX CORPORATION 17955

tiffs’ overpayment and rescission claims for lack of Article III

standing. We also hold that plaintiffs’ decreased economic

value and desirability are cognizable injuries. While we agree

with the district court that, on the current record, plaintiffs

have not established a sufficient causal connection between

any decreased value and desirability and defendants’ actions,

plaintiffs should be permitted to amend their complaint and

attach expert testimony on causation. Accordingly, we reverse

and remand for further proceedings.10

10

In light of this disposition, we do not reach the issue of whether the

district court should have granted defendants’ motions to dismiss for fail-

ure to state a claim or failure to plead fraud with particularity.