La. Fair Hous. Action Ctr. v. Azalea Garden Props.

LOUISIANA FAIR HOUSING ACTION CENTER v. AZALEA GARDEN PROPERTIES, LLC

Civil Action No. 22-74

United States District Court, E.D. Louisiana

April 27, 2022

SECTION "A" (5)

ORDER AND REASONS

JAY C ZAINEY, UNITED STATES DISTRICT JUDGE

The following motion is before the Court: Motion to Dismiss (Rec. Doc. 6) filed by the defendant, Azalea Garden Properties, LLC. The plaintiff, Louisiana Fair Housing Action Center, opposes the motion. The motion, submitted for consideration on April 13, 2022, is before the Court on the briefs without oral argument. For the following reasons, the motion is GRANTED IN PART AND DENIED IN PART.

I. Background

This action has been brought by the Louisiana Fair Housing Action Center (“LaFHAC”) against Azalea Garden Properties, LLC pursuant to the Fair Housing Act of 1968 (“FHA”), as amended, 42 U.S.C. § 3601, et seq. LaFHAC is a non-profit entity with a mission to eradicate housing discrimination in Louisiana. Azalea Garden Properties, LLC is the owner and operator of an apartment complex known as “Azalea Gardens” located in Jefferson, Louisiana. LaFHAC alleges that it employed “testers” to pose as prospective residents and renters and that its efforts have revealed that Azalea Gardens has violated and continues to violate the Fair Housing Act by discriminating on the basis of race and disability. LaFHAC seeks declaratory, injunctive, and monetary relief against Azalea Gardens.

To be clear, the Complaint alleges no facts to support the contention that any specific instance of either race or disability discrimination actually occurred at Azalea Gardens. And this is not a case involving disparate treatment, which would implicate discriminatory intent. Instead, LaFHAC's case is one of disparate impact based on what it characterizes as a blanket policy regarding criminal background screenings at Azalea Gardens, and the disproportionate effect that the screenings surely have on the African American community, given statistical data regarding race in the criminal justice system.

The problem, according to LaFHAC, is that Azalea Gardens excludes all applicants with any criminal history, regardless of the age and nature of the conviction, evidence of rehabilitation, or any other factor related to whether a specific person poses any threat to safety. (Complaint ¶ 16). While criminal history status is not a protected trait for purposes of the FHA, LaFHAC alleges that statistics show that a disproportionate number of African Americans are arrested and incarcerated in the United States when compared to white persons, and that this trend is particularly true at the local level in Jefferson Parish where Azalea Gardens is located. Therefore, at the national, state, and local level, African Americans are significantly more likely than whites to have a criminal record. (Complaint ¶ 51). And in Jefferson Parish in particular, African Americans are more likely to be renters than white persons. (Id. ¶ 55). Based therefore on statistical data, according to LaFHAC, when blanket bans based on criminal history, like the one allegedly being used at Azalea Gardens, are used to exclude potential residents, African Americans are disproportionately impacted and the FHA is violated.

LaFHAC alleges that a blanket ban that refuses to rent to anyone with any criminal history not only has a large discriminatory impact on the basis of race but is also not necessary to achieve a legitimate business purpose. (Complaint ¶ 67). LaFHAC asserts that guidance issued in 2016 by the United States Department of Housing and Urban Development (“HUD”) supports this position. LaFHAC believes that the more appropriate and non-discriminatory approach would be to give individual consideration to each potential applicant so that the nature of the individual's conviction, the amount of time since the conviction or release, evidence of rehabilitation, and other factors could be considered. (Id. ¶ 58). An individualized assessment allows people who have a criminal record, but who pose no realistic current or future threat to the community, to obtain housing, while still protecting public safety, and would reduce the number of African American applicants who are excluded from Azalea Gardens.^[1] (Id.).

In support of the claims, the Complaint provides detail for the experiences of five different FHA testers, only two of whom went to the complex in person-three of the testers made phone inquiries only. The Complaint does not mention the race or disability status of any of the testers involved, particularly of the two who went to Azalea Gardens in person. None of the testers actually submitted a rental application and underwent a criminal background check, only to have the application denied based on the results of the background check. Rather, the FHA testers in this case were used to pose as interested renters in order to surreptitiously solicit information from Azalea Gardens' staff regarding how its criminal background screening process works.

LaFHAC's claim for disability discrimination is based on the allegation that the blanket ban excludes all persons with any drug related convictions without regard to whether those persons might be diagnosed with an addiction, recovering from that addiction, and not currently using any controlled substance illegally. (Complaint ¶ 17). LaFHAC alleges that employing a policy that excludes all persons with a criminal history that includes all drug-related offenses serves to discriminate based on disability and denies a reasonable accommodation to the affected individuals. (Id.). But as with the race claim, there is no allegation as to any specific instance of disability discrimination at Azalea Gardens. And unlike the race claim, the Complaint alleges no statistical or sociological data to support the disability claim, such as data to indicate that persons with drug-related infractions in their criminal history are likely to be recovering from an addiction that qualifies as a disability under federal law.

The crux then of LaFHAC's complaint is that even a facially neutral housing practice that has a disparate impact on the basis of race or disability-two FHA protected traits-is prohibited by the FHA unless it is necessary to achieve a legitimate business purpose that cannot be satisfied through a less discriminatory alternative practice. (Complaint ¶ 42).

Azalea Gardens now moves to dismiss the complaint in its entirety pursuant to Federal Rule of Civil Procedure 12(b)(1), or alternatively Rule 12(b)(6). Azalea Gardens' Rule 12(b)(1) argument is that LaFHAC's claims are so hypothetical as to render them unripe for consideration, thereby depriving a federal court of subject matter jurisdiction. Even beyond ripeness, Azalea Gardens argues that LaFHAC does not allege sufficient facts to state a valid claim under the FHA.

The parties' arguments are addressed below.

II. Discussion

Governing Standards

A motion filed pursuant to Rule 12(b)(1) raises the defense of lack of subject matter jurisdiction. Fed. R. Civ Pro 12(b)(1); Ramming v. United States, 281 F.3d 158, 161 (5^th Cir. 2001). Lack of subject matter jurisdiction may be found in any one of three instances: (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts. Id. (citing Barrera-Montenegro v. United States, 74 F.3d 657, 659 (5^th Cir.1996)). In examining a Rule 12(b)(1) motion, the district court is empowered to consider matters of fact which may be in dispute.^[2] Id. (citing Williamson v. Tucker, 645 F.2d 404, 413 (5^th Cir.1981)). Ultimately, a motion to dismiss for lack of subject matter jurisdiction should be granted only if it appears certain that the plaintiff cannot prove any set of facts in support of his claim that would entitle the plaintiff to relief. Id. (citing Home Builders Ass'n of Miss., Inc. v. City of Madison, Miss., 143 F.3d 1006, 1010 (5^th Cir.1998)).

Because Article III, § 2 of the United States Constitution limits the jurisdiction of federal courts to “cases” and “controversies, ” federal courts have developed justiciability doctrines such as ripeness and standing, both of which are essential components of subject matter jurisdiction. Sample v. Morrison, 406 F.3d 310, 312 (2005) (citing United Transp. Union v. Foster, 205 F.3d 851, 857 (5^th Cir.2000)). The requirement of ripeness is designed “to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties.” Id. (quoting National Park Hospitality Ass'n v. Department of Interior, 538 U.S. 803, 807-08 (2003)).

A case is ripe for adjudication if all remaining questions are legal and further factual development is unnecessary. Roman Cath. Diocese of Dallas v. Sebelius, 927 F.Supp.2d 406, 423 (N.D. Tex. 2013) (citing New Orleans Pub. Serv., Inc. v. Council of the City of New Orleans, 833 F.2d 583, 587 (5^th Cir.1987)). A claim is not ripe if it is “rests upon ‘contingent future events that may not occur as anticipated, or indeed may not occur at all.'” Id. (quoting Texas v. United States, 523 U.S. 296, 300 (1998)).

The burden of proof for a Rule 12(b)(1) motion to dismiss is on the party asserting jurisdiction not on the party moving for dismissal. See Ramming, 281 F.3d at 161 (citing McDaniel v. United States, 899 F.Supp. 305, 307 (E.D.Tex.1995)). Accordingly, the plaintiff constantly bears the burden of proof that jurisdiction does in fact exist. Id. (citing Menchaca...