Plaintiffs, owners of an apartment complex, recently brought a suit against the City of Dallas and specific city officials for allegedly violating the Fair Housing Act (“FHA”), 42 U.S.C. §§ 3601-3019. AHF acquired several properties including Bent Creek Apartments (“Bent Creek”). The Bent Creek complex had long suffered from a high crime rate. To combat crime Dallas created an organization called the S.A.F.E. Team, which consisted of Dallas police and code and fire inspectors. The group was created on the theory that properties which are kept up to code are less likely to harbor criminal activity. The team inspected the property on several occasions in roughly a two year span. During those inspections plaintiff alleges that the city engaged in unlawful conduct that caused a decline in occupancy at the complex and that this unlawful conduct was motivated by racial discrimination against the tenants. The tenants are predominantly African-Amercian and Hispanic.
The Court first considered the standing issue, which the city challenged. Plaintiff attempted to use the costs of the instant litigation as the basis of resources used to counteract the discriminatory conduct of the defendants. The Court applied the Fifth Circuit’s rule against “bootstrapping” and held that any drain on resources as a result of costs incurred for the particular lawsuit in which it asserts standing cannot provide the basis for injury in fact. The Court also denied plaintiffs second theory of injury in fact, that the defendants’ actions inflicted a stigmatic injury. FHA claims can be based on a stigmatic injury tied to a protected characteristic, such as race. The Court held that the stigma of being labeled an absentee landlord, as the plaintiff claimed, was not within the intended stigmatic injuries protected by the FHA. However, the Court did find that the plaintiff’s third theory of standing, economic injury, gave rise to standing. The Court found evidence the plaintiff introduced about the economic losses suffered as a result of the defendants’ actions was strong enough to survive the defendants’ summary judgment motion. Additionally, the Court held that this theory also cleared the causation hurdle of standing sufficiently to avoid summary judgment. Finally the Court ruled that the plaintiff had created a genuine issue of material fact as to whether the asserted injury would be redressed by a favorable decision. Accordingly, the Court held that the case could not be dismissed for lack of standing.
Plaintiff pursued claims under FHA § 3604(a), § 3604(b) and § 3617. Like in an employment discrimination claim, the plaintiff must show either discriminatory intent or disparate impact. Section 3604(a) prohibits denying or making housing unavailable to individuals in a discriminatory manner. Here the plaintiffs contended that the city, acting in conjunction with a neighborhood property owners association, was carrying out a plan to eliminate thousands of apartments from the area, and in particular to close Bent Creek by harassing its owners, managers, and residents. Plaintiffs alleged that this plan and its execution denied housing by amounting to constructive eviction of Bent Creek residents. The Court held that no reasonable jury could find for the plaintiff on the § 3604(a) claim. Although not reaching the issue of whether constructive eviction could support a § 3604(a) claim, the Court found that the plaintiff’s allegations could not support a constructive eviction-type claim in any event. Merely conducting regular code enforcement inspections could not amount to constructive eviction on its own. The Court was similarly not persuaded by plaintiff’s second theory that the city denied housing by actively carrying out a plan to eliminate the apartments. The Court reasoned that merely having a plan is not the same as having accomplished the plan. Therefore no jury could conclude that the city had denied housing illegally with regards to § 3604(a). Based on similar reasoning the Court reached the same conclusion about § 3604(b), which prohibits discrimination in “the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith.” None of the defendants were selling or leasing the apartment units in question, the plaintiffs were. Finally the Court examined the § 3617 claim, which prohibits coercion, intimidation, threats, or interference with any person in the exercise or enjoyment of any right protected by the other sections of the title. Plaintiffs alleged that the code enforcement raids amounted to such harassment and intimidation of the tenants. Here the Court held that § 3617 was only actionable where a defendant’s conduct made housing unavailable, not merely less habitable. Even assuming the raids were harassing or intimidating, the Court reasoned, the units might have been less desirable to the tenants but they were not denied access to them.
Lastly, the Court turned to the plaintiff’s disparate impact theory. Here the Court found that the claim could not succeed because (1) as discussed in the discriminatory intent analysis, there was no actual denial of housing; and (2) as a matter of law specific acts cannot be grounds for disparate impact liability absent widespread policies, practices, or procedures driving them. The Court reached this conclusion because much of the plaintiff’s evidence regarding policies, practices, and procedures consisted of statements made by one councilmember. Even if true, the actions of one councilmember cannot amount to city policy, practice, or procedure. Also, the Court held the plaintiff’s evidence did not show that racial minorities housing prospects were being impacted any differently than Caucasian apartment tenants. Absent such statistical proof, no jury could find in the plaintiff’s favor on the disparate impact theory.
The court granted the defendants’ claims for summary judgment.
AHF Community Development v. City of Dallas, 2009 WL 1650485 (N.D.Tex. 6/11/2009).
