HDC, LLC v. City of Ann Arbor
2012 U.S. App. LEXIS 6418
| 6th Cir. | 2012Background
- Plaintiffs HDC, XY, and LDHA sued the City of Ann Arbor in the Sixth Circuit over a development project on city-owned property.
- Ann Arbor issued a request for proposals; HDC submitted a proposal and the city accepted; the developers formed XY and 200 East William Street to execute the project.
- An option agreement allowed purchase of the property but required a demolition permit by a set date; the developers failed to obtain the permit in time and the city terminated the agreement.
- Plaintiffs alleged violations of the Fair Housing Act and related state-law claims, arguing the demolition-condition was impossible to meet and the city knew it was impossible, or terminated to hinder handicapped housing.
- The district court granted judgment on the pleadings, dismissing FHA claims as implausible and declining pendant jurisdiction over state claims; plaintiffs appealed.
- The Sixth Circuit affirmed, holding the complaint failed to state plausible claims for discrimination, disparate impact, and interference, and denied rules 60(b)(2)/(59) motions and leave to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FHA claims fall within the Act's scope | HDC alleges project for handicapped housing under FHA. | Act does not ban income-based discrimination; project primarily low-income housing not inherently protected. | Claims arguably within scope due to handicapped housing allegation. |
| Whether the disparate treatment claim is plausibly pled | Allegations show intentional discrimination and design of the permit condition to fail for handicapped housing. | Allegations are conclusory and do not plausibly show discriminatory intent. | Dismissed; pleaded facts do not plausibly support disparate treatment. |
| Whether the disparate impact claim is plausibly pled | City’s termination would have a disparate impact on handicapped individuals. | Project scope included various low-income groups; no showing of disproportionate impact on the handicapped. | Dismissed; plaintiffs failed to allege facts showing disparate impact. |
| Whether the § 3617 interference claim is plausibly pled | City acted with discriminatory animus to deter handicapped housing. | Allegations rely on conclusory assertions of discrimination without factual support. | Dismissed; allegations of discriminatory animus were conclusory. |
| Whether the district court properly denied relief under Rules 60(b)(2) and 59(e) and refused leave to amend | New evidence discovered after judgment warrants relief and amendment. | Evidence was publicly available before judgment; due diligence not shown. | Affirmed; no due diligence or material, controlling new evidence; no error in denying relief or leave to amend. |
Key Cases Cited
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard; factual content required)
- McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) (burden-shifting framework for discrimination claims)
- Nationwide Mut. Ins. Co. v. Cisneros, 52 F.3d 1351 (6th Cir. 1995) (discrimination proof standards; direct or circumstantial)
- Graoch Assocs. #33, L.P. v. Louisville/Jefferson Cnty. Metro Human Relations Comm'n, 508 F.3d 366 (6th Cir. 2007) (disparate-impact framework in limited context)
- Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002) (flexible evidentiary standard; prima facie case not rigid)
- Hensley Mfg. v. ProPride, Inc., 579 F.3d 603 (6th Cir. 2009) (reaffirming plausibility pleading limits)
- Fritz v. Charter Twp. of Comstock, 592 F.3d 718 (6th Cir. 2010) (not every recital of elements suffices; must plead facts)
- In re Travel Agent Comm'n Antitrust Litig., 583 F.3d 896 (6th Cir. 2009) (rejects conclusory pleading masquerading as facts)
- Leisure Caviar, LLC v. U.S. Fish & Wildlife Serv., 616 F.3d 612 (6th Cir. 2010) (leave to amend after adverse judgment requires Rule 59/60 standards)