17 F.4th 950
9th Cir.2021Background:
- Maricopa Domestic Water Improvement District is a small Arizona municipal water utility serving ~300 households, including 20 units at Edwards Circle, a Pinal County–owned public housing complex.
- Pinal County repeatedly refused to pay former tenants’ delinquent water bills and asserted immunity to liens and anti–gift clause constraints; District’s attempts to collect from the County failed.
- In 2015 the District adopted a Service Deposit Policy requiring new Pinal County (public housing) tenants to post a $180 refundable deposit, while other new customers paid $55.
- Plaintiffs (two Edwards Circle tenants and Southwest Fair Housing Council) sued under the Fair Housing Act alleging disparate-impact and disparate-treatment discrimination; the district court granted summary judgment to the District.
- Ninth Circuit: plaintiffs established a prima facie disparate-impact claim (proper comparator and robust causation), but the District proved the policy significantly served legitimate business interests and plaintiffs failed to show an equally effective, less discriminatory alternative; disparate-treatment claim failed for lack of evidence of discriminatory intent.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs established a prima facie disparate-impact claim (proper comparator and causation) | Peña et al.: compare affected (public-housing customers) v. unaffected (non-public customers); statistical disparity shows disproportionate impact on African Americans, Native Americans, and single mothers; causation links policy to disparity | District: comparator should be within Edwards Circle only; no robust causation shown between policy and protected-group disparities | Court: Plaintiffs met prima facie burden using public vs non-public comparator and showed robust causation (policy explicitly bifurcated customers and produced the disparate effect) |
| Whether the observed disparities are statistically/practically significant | Plaintiffs: expert shows statistically significant differences and practical significance (large percentage gaps) | District: small sample (20 units) undermines significance; no contrary statistical evidence | Court: disparities were statistically and practically significant and District offered no contrary analysis |
| Whether the District has a legitimate business justification and whether the policy serves it in a significant way | Plaintiffs: District could pursue other remedies; $180 is arbitrary and discriminatory in effect | District: legitimate interest in preventing unrecoverable losses from delinquent accounts (County would not pay, liens ineffective); $180 tied to largest delinquency (~$184.45) and thus significantly serves interest | Court: District showed a legitimate interest and that applying the policy only to Pinal County tenants and setting $180 significantly served that interest; summary judgment proper on this ground |
| Whether plaintiffs identified equally effective, less discriminatory alternatives | Plaintiffs: negotiate with County, sue County, collect from tenants, apply policy to all customers, or use other tailored measures | District: negotiations and collection attempts were tried and failed; suing would be costly and uncertain; applying policy to all customers or lower uniform deposit would not reliably prevent loss | Court: Plaintiffs failed to present evidence that any proposed alternative would be equally effective and less discriminatory; no triable issue |
| Disparate-treatment (intent) — whether discriminatory animus motivated the policy | Plaintiffs: District knew policy would disproportionately affect protected groups; certain board comments show bias; motive can be inferred | District: action motivated by neutral business concerns to prevent loss, not by race or familial status | Court: plaintiffs lacked direct or sufficient circumstantial evidence of discriminatory intent; disparate-treatment claim fails |
Key Cases Cited
- Texas Dep’t of Hous. & Cmty. Affairs v. Inclusive Communities Project, 576 U.S. 519 (2015) (recognizes FHA disparate-impact theory and prescribes safeguards including robust causation and allowance for legitimate business justifications)
- Wards Cove Packing Co. v. Atonio, 490 U.S. 642 (1989) (burden-shifting framework and emphasis on plaintiff’s duty to isolate practices causing statistical disparities)
- Griggs v. Duke Power Co., 401 U.S. 424 (1971) (disparate-impact doctrine; unlawful practices are those that create artificial, arbitrary, and unnecessary barriers)
- Watson v. Fort Worth Bank & Trust, 487 U.S. 977 (1988) (plaintiff must isolate specific practices causing disparities)
- Ojo v. Farmers Grp., Inc., 600 F.3d 1201 (9th Cir. 2010) (recognizes disparate-impact claims under FHA § 804(b))
- Ave. 6E Invs., LLC v. City of Yuma, 818 F.3d 493 (9th Cir. 2016) (disparate-impact principles applied in housing context)
- Hardie v. Nat’l Collegiate Athletic Ass’n, 876 F.3d 312 (9th Cir. 2017) (discusses business-necessity analog and burden-shifting post-Inclusive Communities)
- Ricci v. DeStefano, 557 U.S. 557 (2009) (addresses equal effectiveness requirement for alternatives in burden-shifting framework)
- Arlington Heights v. Metropolitan Housing Dev. Corp., 429 U.S. 252 (1977) (factors for inferring discriminatory intent in disparate-treatment claims)
- Stout v. Potter, 276 F.3d 1118 (9th Cir. 2002) (notes limits of statistical significance when sample sizes are small)
- Brnovich v. Democratic Nat’l Comm., 141 S. Ct. 2321 (2021) (distinguishes statistical significance and practical/legal significance in disparate-impact analysis)