Inclusive Communities Project, Inc. v. Texas Department of Housing & Community Affairs
860 F. Supp. 2d 312
N.D. Tex.2012Background
- ICP sues TDHCA challenging LIHTC allocations in Dallas area under FHA, §1982, and §1983; ICP seeks integration and challenges racial impact of LIHTC geography.
- TDHCA administers LIHTC; 9% credits are competitive and scored via QAP with above-the-line criteria, while 4% credits are non-competitive.
- TDHCA’s QAP and related Texas statutes govern threshold criteria, scoring, and discretion; TDHCA may modify below-the-line criteria but must prioritize above-the-line criteria.
- ICP alleges TDHCA used race as a factor in LIHTC decisions, creating intentional discrimination or disparate impact under FHA and §1982/§1983.
- The court previously held ICP established prima facie showing of discriminatory effect and ICP II discussed the burden-shifting framework; bench trial occurred in 2011.
- Court now finds ICP established FHA disparate impact claim, but finds TDHCA not liable for intentional discrimination or §1982/§1983 claims, and addresses defenses and remedies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ICP proved FHA disparate impact | ICP shows TDHCA’s LIHTC decisions caused disproportionate impact on minorities | TDHCA asserts legitimate, race-neutral objectives with no less discriminatory alternatives | ICP prevails on disparate impact claim under FHA |
| Whether ICP proved intentional discrimination under §1982/§1983 | ICP’s circumstantial evidence shows pretext to discriminate | TDHCA offered nondiscriminatory reasons; evidence not showing pretext | TDHCA did not prove intentional discrimination by preponderance |
| Whether FHA claim is time-barred by statute of limitations | Discriminatory practice continued 1999–2008; timely within 2 years of last assertion | Limitations should bar longstanding claims | Claim timely under continuing practice rule |
| Whether TDHCA is immune under Eleventh Amendment | Not applicable to immunity defense | TDHCA is an arm of the state and immune | TDHCA not entitled to Eleventh Amendment immunity |
Key Cases Cited
- Huntington Branch, NAACP v. Town of Huntington, 844 F.2d 926 (2d Cir. 1988) (burden-shifting framework for FHA disparate impact claims; compelling interest standard (contextual))
- Banks v. Dallas Hous. Auth., 119 F.Supp.2d 636 (N.D. Tex. 2000) (equal protection in government-assisted housing context)
- City of Cuyahoga Falls v. Buckeye Cmty. Hope Found., 538 U.S. 188 (Supreme Court 2003) (requires showing of discriminatory intent for §1982)
- Rizzo v. Advisory Board, 564 F.2d 126 (3d Cir. 1977) (foundation for balancing tests in disparate impact cases)
- Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133 (2000) (pretext framework for proving discrimination where direct evidence unavailable)
- Dews v. Town of Sunnyvale, Tex., 109 F.Supp.2d 526 (N.D. Tex. 2000) (no-discriminatory alternatives and burden-shifting analysis)
- Verex Assur., Inc. v. Tex. Dep’t of Hous. & Cmty. Affairs, 68 F.3d 922 (5th Cir. 1995) (arm-of-state analysis for Eleventh Amendment immunity)
- Vogt v. Bd. of Comm’rs Orleans Levee Dist., 294 F.3d 684 (5th Cir. 2002) (factors for determining state-entity status for immunity)
- Arlington Heights, Village of v. Hous. Dev. Corp., 558 F.2d 1283 (7th Cir. 1977) (disparate impact considerations in analysis (cited for balancing approach))