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Fair Housing Center of Washington v. Breier-Scheetz Properties, LLC

United States District Court, W.D. Washington, Seattle

May 11, 2017

FAIR HOUSING CENTER OF WASHINGTON, Plaintiff,
v.
BREIER-SCHEETZ PROPERTIES, LLC, et al., Defendants.

          ORDER

          Thomas S. Zilly United States District Judge.

         THIS MATTER comes before the Court on plaintiff's counter-motion for summary judgment, docket no. 17. Having reviewed the motion and all relevant filings, the Court enters the following Order.[1]

         Background

         A. Factual Background

         Plaintiff Fair Housing Center of Washington (“Fair Housing”), alleges that defendants Frederick Breier-Scheetz and Breier-Scheetz Properties, LLC (“Breier-Scheetz Properties”) employ a facially neutral occupancy restriction policy that results in a disparate, adverse impact on persons based on their familial status in violation of the Fair Housing Act, the Washington Law Against Discrimination, and the Seattle Municipal Code. Mr. Breier-Scheetz is an owner and manager of defendant Breier-Scheetz Properties, LLC (“Breier-Scheetz Properties”), which owns and operates the Granada Apartments (“Granada”) located on Capitol Hill. Decl. of Frederick Breier-Scheetz, docket no. 39, ¶ 2. The Granada is a 96-unit apartment building comprised of fifty-seven 425 square-foot studios, six 560 square-foot studios, and thirty-three one bedroom apartments. Id. The policy at issue in this lawsuit is both undisputed and straightforward: Breier-Scheetz Properties will only rent studio apartments at the Granada to single occupants.[2] Answer, docket no. 9, ¶ 4.12.

         Plaintiff discovered the occupancy policy after it performed “fair housing testing” in 2012 and 2013. During such testing, individuals trained by plaintiff pose as prospective tenants and typically operate in pairs: one tester poses as a member of the protected class while the other represents the control group. Decl. of Christa Lenssen, docket no. 19, ¶¶ 6-8. In connection with the Granada, two pairs of testers, one set in November of 2012 and another in October of 2013, confirmed that defendants were not renting studio apartments at the Granada to more than one occupant. Complaint, docket no. 1, Ex A, 9-10; Decl. of Tester 152, docket no. 21, ¶ 4; Decl. of Tester 401, docket no. 22, ¶ 8; Decl. of Tester 405, docket no. 23, ¶ 8.

         In February of 2014, plaintiff filed a complaint against defendants with the United States Department of Housing and Urban Development (“HUD”). Decl. of Jesse Wing, docket no. 18, Ex. 2, 14-16. Through a work-sharing agreement with HUD, see Id. at 17-18, the Seattle Office for Civil Rights investigated the complaint, Complaint, Ex. A at 9-15. The Seattle Office for Civil Rights determined that there was “reasonable cause to believe” that defendants' policy violated section 804(a) of the Fair Housing Act and section 14.08.040(A) of the Seattle Municipal Code. Complaint, Ex. A at 15. Plaintiff filed the instant action on June 16, 2016. Complaint, docket no. 1.

         Discussion

         A. Legal Standard

         The Court should grant summary judgment if no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A fact is material if it might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). While “all justifiable inferences” are to be drawn in favor of the non-moving party, id. at 255, when the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party, summary judgment is warranted. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citations omitted).

         B. Fair Housing Act-Disparate Impact Discrimination

         Section 804(a) of the Fair Housing Act, 42 U.S.C. § 3604(a), prohibits refusing “to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.” 42 U.S.C. § 3604(a) (emphasis added). The Washington Law Against Discrimination and the Seattle Municipal Code likewise prohibit any person from refusing to engage in a real estate transaction based on “families with children status, ” see RCW 49.60.222(1)(a), and “parental status, ” see SMC 14.08.020 and 14.08.040(A)(1), respectively. When interpreting the WLAD in connection with claims of discrimination in housing, Washington courts look to federal interpretations of the Fair Housing Act's discrimination provisions. See Tafoya v. State Human Rights Com'n, 177 Wn.App. 216, 224 (2013).[3]

         To establish a prima facie case of discrimination under a theory of disparate impact, a plaintiff must show (1) the occurrence of outwardly neutral practices; that (2) result in “a significantly adverse or disproportionate impact on persons of a particular type produced by the defendant's facially neutral acts or practices.” Pfaff v. U.S. Dept. of Housing and Urban Development, 88 F.3d 739, 745 (9th Cir. 1996). Once a plaintiff establishes a prima facie case, a presumption of illegality arises and the burden shifts to the defendant to articulate a legitimate, non-discriminatory business reason for the challenged policy. See Fair Housing Council of Orange County, Inc. v. Ayres, 855 F.Supp. 315, 318 (C.D. Cal. 1994) (citing United States v. Badgett, 976 F.2d 1176, 1178 (8th Cir. 1992)). Defendants concede that plaintiff has established a prima facie case of disparate impact discrimination through the statistical evidence presented in in the declaration of plaintiff's expert Dr. Guest, Supplemental Response, docket no. 38, 2:7-9, and instead submit that issues of material fact concerning defendants' alleged legitimate, non-discriminatory reasons for the numerical occupancy restriction precludes summary judgment in favor of plaintiff.

         Disparate-impact liability mandates the removal of policies that create artificial, arbitrary, or unnecessary barriers for members of a protected class. See Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc., 135 S.Ct. 2507, 2522 (2015). Accordingly, proof of a legitimate non-discriminatory business reason sufficient to rebut a prima facie case of disparate impact discrimination requires a private defendant to proffer a business necessity sufficiently compelling to justify the challenged practice and show that the policy was the least restrictive means to that end.[4]See FairHousing Congress v. Weber, 993 F.Supp. 1286, 1292 (C.D. Cal. 1997); see also Ayres, 993 F.Supp. at 318-19.[5] In evaluating a defendant's proffered business justification, subjective judgments are insufficient to rebut a plaintiff's prima facie case absent objective evidence in support of those judgments. See Gashi v. Grubb & Ellis Property Management Services, Inc., 801 F.Supp.2d 12, 16 (D. Conn. 2011) (noting that courts generally ...


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