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Eighth Circuit Denies Claim That City’s Enforcement of Housing Authority Standards Creates Disparate Impact

The Eighth Circuit Court of Appeals has rejected a plaintiff’s attempt to use a disparate-impact claim under the Fair Housing Act (“FH Act”) as a means to lower public housing standards that allegedly had a disparate impact on members of protected minorities.

The case, Ellis v. City of Minneapolis, concerns a suit brought by a low-income rental housing provider against the city in which they are located, alleging that heightened enforcement of housing and rental standards has a disparate impact on the availability of housing for individuals protected under the FH Act.  The housing provider claimed city housing standards were unfairly, illegally, and inconsistently applied to them as opposed to government-sponsored housing projects.  According to the complaint, this inconsistent application led to a disparate impact on minorities.

The Supreme Court recently held that a plaintiff can assert a disparate impact claim under the FH Act.  The Supreme Court’s decision in Inclusive Communities held that “Governmental or private policies are not contrary to the disparate-impact requirement unless they are artificial, arbitrary, and unnecessary barriers.”  Thus, the FH Act is not an instrument to force housing authorities to reorder their priorities.  Rather, to maintain a disparate impact claim, a plaintiff must point to a policy or policies causing the disparity in treatment of minorities, what the Court called a “robust causality requirement.”

In this case, the Eighth Circuit held that the plaintiffs’ allegations were insufficient to meet this standard, and affirmed the district court’s grant of judgment on the pleadings for the defendants.  This is consistent with the Supreme Court’s statement in Inclusive Communities that courts should dismiss cases at the pleading stage where a plaintiff has not made out a prima facie case of disparate impact by alleging facts and producing statistical evidence demonstrating a causal connection between the challenged policy and the asserted disparate impact.

The entire Eighth Circuit opinion may be found here.