Inclusive Cmtys. Project, Inc. v. Lincoln Prop. Co.
920 F.3d 890
| 5th Cir. | 2019Background
- Plaintiff The Inclusive Communities Project (ICP), a fair-housing nonprofit, alleged Lincoln Property Company and several property owners operate a uniform “no vouchers” policy refusing to negotiate with or rent to Section 8 voucher holders at certain Dallas-area apartment complexes. ICP says it proposed incentive/sublease/guarantor arrangements to mitigate landlords’ concerns but received no response.
- ICP claims the policy has a disparate impact and constitutes disparate treatment under the Fair Housing Act (FHA) because voucher households in the Dallas area are overwhelmingly Black (allegedly >80%), so excluding vouchers disproportionately excludes Black renters; ICP also alleged §3604(c) advertising violations for explicit “no Section 8/government subsidized rent” ads.
- Defendants moved to dismiss under Rule 12(b)(6). The district court dismissed all claims with prejudice; the Fifth Circuit reviews de novo and affirms.
- The Fifth Circuit held ICP’s disparate-impact claim failed because ICP did not plead the "robust causation" the Supreme Court requires in Texas Dep’t of Hous. & Cmty. Affairs v. Inclusive Communities Project — ICP did not plausibly show the defendants’ policy caused the local racial disparity (as opposed to reflecting preexisting distributional patterns) or otherwise identify an offending policy causal link sufficient to survive pleading.
- The court also affirmed dismissal of disparate-treatment claims as conclusory (ICP pleaded a facially neutral policy without well-pleaded facts showing discriminatory intent) and rejected the advertising claim because the ads did not on their face indicate a racial preference.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Disparate impact under FHA §3604(a) | Defendants’ “no vouchers” policy disproportionately excludes voucher holders, who are predominantly Black, so the policy has an unlawful disparate impact | Landlord participation in Section 8 is voluntary; ICP’s statistics do not show defendants caused the racial distribution (no robust causation); proffered business justifications are legitimate | Dismissed: ICP failed to allege the robust causation required by Inclusive Communities and did not plead less-discriminatory-alternative facts to defeat defendants’ proffered interests |
| Disparate treatment under FHA §3604(a) | Policy is pretext for race-based exclusion because voucher holders are largely Black; failure to negotiate shows intent | Policy is facially neutral (refusal to accept vouchers); complaint lacks particularized factual allegations showing race was a motivating factor | Dismissed: allegations are vague/conclusory and do not plausibly plead discriminatory intent |
| Advertising liability under FHA §3604(c) | Statements like “not authorized to accept Section 8” perpetuate racial stereotypes and thus are effectively racial preferences | Ads reference voucher status, not race; an ordinary reader would not equate Section 8 with a particular race | Dismissed: ads contain no explicit racial reference and do not plausibly convey a racial preference to an ordinary reader |
| Scope of pleading standard for disparate-impact (robust causation) | ICP contended its comparative voucher vs. non-voucher statistics suffice to plead causation | Defendants and majority urge a stricter, "robust causation" showing that links the challenged policy to the disparity and protects defendants from liability for preexisting segregation | Held: apply Supreme Court’s safeguards from Inclusive Communities; plaintiff must plausibly allege a causal connection between the defendant’s policy and the statistical disparity — ICP did not do so |
Key Cases Cited
- Texas Dep't of Hous. & Cmty. Affairs v. Inclusive Cmtys. Project, Inc., 135 S. Ct. 2507 (U.S. 2015) (recognizes FHA disparate-impact claims but requires safeguards including a "robust" causation requirement)
- Griggs v. Duke Power Co., 401 U.S. 424 (U.S. 1971) (disparate-impact theory: remove artificial, arbitrary, unnecessary barriers; business necessity standard)
- Wards Cove Packing Co. v. Atonio, 490 U.S. 642 (U.S. 1989) (explains causation and plaintiff’s obligation to identify specific practice causing the disparity)
- Watson v. Fort Worth Bank & Trust, 487 U.S. 977 (U.S. 1988) (statistical disparities must be substantial enough to raise inference of causation)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (complaint must plead facts sufficient to make relief plausible)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (legal conclusions not entitled to assumption of truth; plausibility standard applies)