The Inclusive Communities Project Inc v. Lincoln Property Company et al

Motion to Dismiss for Failure to State a Claim

N.D. Tex.June 14, 2017

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION THE INCLUSIVE COMMUNITIES PROJECT, INC., § § § Plaintiff, § § vs. § § No. 3:17-CV-00206-K LINCOLN PROPERTY COMPANY, LEGACY MULTIFAMILY NORTH III LLC, CPF PC RIVERWALK LLC, HLI WHITEROCK LLC , and BRICK ROW APARTMENTS LLC, § § § § § § Defendants. § CPF PC RIVERWALK, LLC’S MOTION TO DISMISS ICP’S COMPLAINT FOR FAILURE TO STATE A CLAIM AND SUPPORTING BRIEF Arthur E. Anthony Taylor F. Brinkman LOCKE LORD LLP 2200 Ross Avenue, Suite 2800 Dallas, Texas 75201 T: (214) 740-8000 F: (214) 740-8800 aanthony@lockelord.com tbrinkman@lockelord.com ATTORNEYS FOR CPF PC RIVERWALK LLC Case 3:17-cv-00206-K Document 42 Filed 06/14/17 Page 1 of 17 PageID 342 CPF PC RIVERWALK, LLC’S MOTION TO DISMISS AND SUPPORTING BRIEF - PAGE i TABLE OF CONTENTS INTRODUCTION .................................................................................................................4 ICP’S ALLEGATIONS AND RELEVANT STATUTORY BACKGROUND ...................6 1. The Parties .......................................................................................................6 2. The Housing Choice Voucher Program ..........................................................6 3. ICP’s Letter to Defendants ..............................................................................7 4. ICP Receives No Response and Files Suit ......................................................8 STANDARD OF REVIEW ...................................................................................................9 ARGUMENT .........................................................................................................................9 1. The FHA does not prohibit a refusal to accept vouchers. ...............................9 2. The Court should dismiss ICP’s disparate impact claim because ICP has failed to allege facts showing that Riverwalk’s alleged discriminatory policy caused the racial imbalance about which ICP complains.......................................................................................................11 3. The Court should dismiss ICP’s disparate treatment claim because ICP has failed to allege any fact from which the Court can infer that Riverwalk intended to discriminate...............................................................14 CONCLUSION....................................................................................................................15 Case 3:17-cv-00206-K Document 42 Filed 06/14/17 Page 2 of 17 PageID 343 CPF PC RIVERWALK, LLC’S MOTION TO DISMISS AND SUPPORTING BRIEF - PAGE ii TABLE OF AUTHORITIES Page(s) Federal Cases Ashcroft v. Iqbal, 556 U.S. 662 (2009) .................................................................................................10, 16 Austin Apt. Ass’n v. City of Austin, 89 F. Supp. 3d 886, 890 (W.D. Tex. 2015)......................................................................8 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .......................................................................................................10 Guidry v. Bank of LaPlace, 954 F.2d 278 (5th Cir. 1974)..........................................................................................10 Inclusive Communities Project, Inc. v. Tex. Dep’t of Housing & Cmty. Affairs, 2016 WL 4494322 (N.D. Tex. Aug. 26, 2016) ..............................................................12 Inclusive Communities Project, Inc. v. Tex. Dep’t of Housing & Cmty. Affairs, 747 F.3d 275 (5th Cir. 2014), aff’d, ICP VI, 135 S. Ct.___.....................................11, 12 Muñoz v. Orr, 200 F.3d 291 (5th Cir. 2000)....................................................................................11, 12 Parents Involved in Community Schools v. Seattle School District No. 1 551 U.S. 701, 750 (2007)...............................................................................................14 Raytheon Co. v. Hernandez, 540 U.S. 44 (2003) ...................................................................................................11, 12 Salute v. Stratford Greens Garden Apts., 136 F.3d 293 (2d Cir. 1998).............................................................................................8 Tex. Dep’t of Housing & Cmty. Affairs v. Inclusive Communities Project, Inc., 135 S. Ct. 2507 (2015) ............................................................................................passim Federal Regulations 24 C.F.R. § 100.500 .......................................................................................................12, 13 State Rules LR5.......................................................................................................................................17 Case 3:17-cv-00206-K Document 42 Filed 06/14/17 Page 3 of 17 PageID 344 CPF PC RIVERWALK, LLC’S MOTION TO DISMISS AND SUPPORTING BRIEF - PAGE iii Federal Rules Fed. R. Civ. P. 12(b)(6)........................................................................................................10 Fed. R. Civ. P. 5 ..................................................................................................................17 State Statutes TEX. LOC. GOV’T CODE § 250.007 .........................................................................................8 Federal Statutes 42 U.S.C. § 1437(f) ................................................................................................................8 42 U.S.C. § 1437f(a) ..............................................................................................................7 42 U.S.C. § 1982..............................................................................................................9, 10 42 U.S.C. § 3601..................................................................................................................10 42 U.S.C. § 3604(a) ...................................................................................................9, 10, 11 Case 3:17-cv-00206-K Document 42 Filed 06/14/17 Page 4 of 17 PageID 345 CPF PC RIVERWALK, LLC’S MOTION TO DISMISS AND SUPPORTING BRIEF - PAGE 4 OF 17 INTRODUCTION The federal Fair Housing Act, 42 U.S.C. § 3601 et seq. (“FHA”), guarantees, among other things, that individuals will not be subjected to racial discrimination in the terms or conditions of renting property. The FHA does not, however, mandate that private, rental property owners accept housing choice vouchers or participate at any level in the federal housing choice voucher program. Through this lawsuit, Plaintiff, The Inclusive Communities Project, Inc. (“ICP”), seeks an order from this Court imposing just such a mandate. The Court should refuse the invitation. Defendant CPF PC Riverwalk, LLC (“Riverwalk”) is a special purpose entity created to facilitate the development and operation of Park Central at Flower Mound (“Park Central”), a high-end multi-family community located in Flower Mound, Texas. ICP brought this lawsuit against Riverwalk, other property owners in the Dallas Metroplex, and Lincoln Property Company (which manages Park Central), asserting two violations of the FHA. First, ICP contends that Riverwalk’s alleged policy of not negotiating with or renting to voucher holders has a disparate impact on African-Americans.1 Second, ICP claims that Lincoln’s refusal to negotiate with or enter into a lease at Park Central with ICP constitutes disparate treatment based on race.2 ICP fails to state an actionable claim under either theory. 1 To ensure consistency, and being mindful of the rhetorical power associated with racial classifications, Riverwalk will refer to the protected class at issue in this case as “African-American” even where used interchangeably with “Black” or other descriptive references in the Complaint and related briefing. 2 ICP makes no allegations against Riverwalk in connection with ICP’s advertising discrimination claim against Defendant Lincoln Property Company. Nor does ICP assert any allegations specific to Riverwalk with respect to its claim that individual voucher holder families were subjected to disparate treatment under the FHA. See Compl. ¶¶ 96-116. Assuming ICP asserts such claims against Riverwalk, such claims fail on those bases alone. Case 3:17-cv-00206-K Document 42 Filed 06/14/17 Page 5 of 17 PageID 346 CPF PC RIVERWALK, LLC’S MOTION TO DISMISS AND SUPPORTING BRIEF - PAGE 5 OF 17 First, the Court should dismiss ICP’s disparate impact claim because ICP fails to allege facts from which this Court can reasonably infer that Riverwalk’s alleged refusal to rent to voucher holders caused the racial imbalance ICP seeks to remedy. Although the United States Supreme Court recently held that disparate impact claims are cognizable under the FHA, the Court made clear that “racial imbalance,” alone, is insufficient to establish a disparate impact, and that plaintiffs must allege facts showing that the challenged practice caused a discriminatory effect to state an actionable claim. Allegations satisfying this “robust causality” requirement regarding Riverwalk are conspicuously absent from ICP’s complaint. ICP does not, and frankly cannot, allege any fact suggesting that the alleged racial imbalance in Park Central’s census tract was caused by Riverwalk’s alleged policy of refusing to accept vouchers. Instead, it relies entirely on statistics reflecting demographics existing prior to and independent of the alleged adoption of Riverwalk’s policy. The Court should also dismiss ICP’s disparate treatment claim because ICP fails to allege facts from which this Court can reasonably infer that Riverwalk intended to discriminate against African-Americans based on race. Disparate treatment requires proof of discriminatory motive or intent. Reduced to essentials, ICP’s disparate treatment claim is based on allegations that: (1) Lincoln refused to lease units to ICP under the Third Party Guarantor or Sublease proposals; (2) the majority of ICP’s clients are African-American; therefore, (3) Lincoln intended to discriminate against African-Americans based on race. But those allegations, without more, do not support a reasonable inference that Riverwalk intended to discriminate against African-Americans because there are no facts specific to Riverwalk giving rise to an inference of discriminatory intent, and there are a myriad of Case 3:17-cv-00206-K Document 42 Filed 06/14/17 Page 6 of 17 PageID 347 CPF PC RIVERWALK, LLC’S MOTION TO DISMISS AND SUPPORTING BRIEF - PAGE 6 OF 17 other legitimate reasons that Lincoln may have refused to participate in the Third Party Guarantor or Sublease proposals - reasons not otherwise refuted by ICPs’ allegations. Moreover, no facts asserted in ICP’s complaint suggests that Lincoln was motivated by race, and not one of these other reasons. ICP’S ALLEGATIONS AND RELEVANT STATUTORY BACKGROUND3 1. The Parties ICP is a “fair housing focused” nonprofit organization in Dallas, Texas. Complaint (“Compl.”) ¶ 5. One of ICP’s primary goals is to help participants in the federal Housing Choice Voucher program secure housing in what ICP calls “high opportunity areas,” where poverty is lower, median incomes are higher, and public schools are better. Id. ¶¶ 5, 7, 8. Riverwalk and Defendants Legacy Multifamily North III LLC, HLI Whiterock LLC, and Brick Row Apartments LLC own apartment complexes in so-called “high opportunity areas” in the Dallas Metroplex; Lincoln is the property manager for those complexes. Id. ¶¶ 2, 18. According to ICP, Lincoln “has a general policy that it will not negotiate with, rent to, or make units available to voucher households” - including at Park Central at Flower Mound, a complex owned by Riverwalk. Id. ¶¶ 19, 54. 2. The Housing Choice Voucher Program The Housing Choice Voucher program, also known as “Section 8,” is a federal program designed to “aid[] low-income families in obtaining a decent place to live” and “promot[e] economically mixed housing.” 42 U.S.C. § 1437f(a). The program is funded by the United States Department of Housing and Urban Development (“HUD”) and 3 Although Riverwalk recognizes that the Court must accept ICP’s well-pleaded factual allegations as true for purposes of this motion, Riverwalk does not waive the right to challenge those allegations later Case 3:17-cv-00206-K Document 42 Filed 06/14/17 Page 7 of 17 PageID 348 CPF PC RIVERWALK, LLC’S MOTION TO DISMISS AND SUPPORTING BRIEF - PAGE 7 OF 17 administered by local public housing authorities. In short, the HCV program provides a subsidy to landlords willing to rent to low-income participants holding a voucher, up to a maximum monthly rent set by HUD. Compl. ¶¶ 1, 22. Voucher holders must pay at least 30% of their monthly adjusted gross income toward rent and utilities. Id. The voucher makes up the difference. Id. Because of the significant administrative burdens and financial uncertainties associated with the voucher program, acceptance of vouchers is, and always has been, entirely voluntary. See Austin Apt. Ass’n v. City of Austin, 89 F. Supp. 3d 886, 890 (W.D. Tex. 2015); see also Salute v. Stratford Greens Garden Apts., 136 F.3d 293, 300 (2d Cir. 1998) (stating that “the voluntariness provision of Section 8 reflects a congressional intent that the burdens of Section 8 participation are substantial enough that participation should not be forced on landlords”). No federal, state, or local law applicable to Defendants requires them to accept vouchers. Austin Apt. Ass’n, 89 F. Supp. 3d 886, 890 (W.D. Tex. 2015); Tex. Loc. Gov’t Code § 250.007 (prohibiting local governments from enacting ordinance that require acceptance of vouchers); see generally, 42 U.S.C. § 1437(f). 3. ICP’s Letter to Defendants In February 2016, ICP sent identical letters to Lincoln regarding each Defendant’s property asking Lincoln to “reconsider” its alleged policy to not accept voucher families as tenants. Compl. ¶¶ 18, 50 & Ex. 1.4 Acknowledging the significant administrative burden and financial uncertainty that comes with the voucher program, ICP proposed two alternatives, which ICP alleges will ease the administrative and financial burdens associated with the HCV program. Compl. ¶¶ 82-84. Under the “Third Party Guarantor” 4 Although ICP alleges that it also sent a letter to the property owner defendants as well as Lincoln, ICP did not attach all of those letters to the Complaint. Case 3:17-cv-00206-K Document 42 Filed 06/14/17 Page 8 of 17 PageID 349 CPF PC RIVERWALK, LLC’S MOTION TO DISMISS AND SUPPORTING BRIEF - PAGE 8 OF 17 proposal, ICP offered to contractually guarantee the rent and security deposit owed by its voucher clients and to cover any losses due to possible housing authority delays in processing the voucher. Compl. ¶ 42 & Ex. 1. Under the “Sublease” proposal, ICP offered to assume to role of a corporate lessor by leasing units from the owners itself, paying rent, and then subleasing to ICP voucher holders. Id. ¶ 41 & Ex. 1. ICP also offered to pay Defendants an additional month’s rent as an incentive to accept either proposal. Id. ¶ 40. 4. ICP Receives No Response and Files Suit ICP received no response to its letters. Compl. ¶¶ 18, 43. It then filed this lawsuit, alleging that Lincoln’s policy of refusing to negotiate with or rent to voucher families, and its refusal to negotiate or rent to ICP under the Guarantor or Sublease proposals, violates the FHA, 42 U.S.C. § 3604(a), and 42 U.S.C. § 1982. ICP alleges that Lincoln’s alleged policy violates the FHA in two ways: • First, ICP contends that Lincoln’s policy of refusing to rent to voucher holders has a disparate impact on African-American families because 81% of the voucher holders in the Dallas-Irving-Plano Metropolitan Division are African- American. Id. ¶¶ 65-69. • Second, ICP alleges that Lincoln’s refusal to rent to ICP at Park Central pursuant to the Third Party Guarantor or Sublease proposals constitutes disparate treatment based on race and color because ICP’s voucher clients are predominantly African-American. Id. ¶¶ 90-95.5 5 ICP asserts two additional claims, see Compl. ¶¶ 96-117; however, as noted in footnote 2, those claims are directed at Lincoln only. Riverwalk, therefore, is not addressing those claims in this motion. Case 3:17-cv-00206-K Document 42 Filed 06/14/17 Page 9 of 17 PageID 350 CPF PC RIVERWALK, LLC’S MOTION TO DISMISS AND SUPPORTING BRIEF - PAGE 9 OF 17 ICP seeks an injunction requiring Defendants to accept voucher tenants and to negotiate with ICP under the Third Party Guarantor or Sublease proposals, a declaratory judgment that Defendants’ alleged conduct violates Section 3604(a) and 42 U.S.C. § 1982, and an award of attorney’s fees and costs. Id. at 37. STANDARD OF REVIEW Riverwalk moves to dismiss ICP’s complaint for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). To survive a motion to dismiss, ICP’s complaint “must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) (internal quotation marks omitted)). Critical here, a claim is “plausible” only if the facts alleged allow the Court to draw the reasonable inference that the defendant is liable for the misconduct alleged; allegations merely consistent with liability are insufficient. Id. at 677; Twombly, 550 U.S. at 566-69 (holding that allegations of parallel market behavior, though consistent with an antitrust conspiracy, did not state a plausible claim because other, as likely, explanations for defendant's parallel behavior existed). In determining whether ICP’s Complaint meets this standard, the Court must accept only well-pleaded factual allegations; however, it need not credit conclusory allegations or “unwarranted deductions of facts.” Guidry v. Bank of LaPlace, 954 F.2d 278, 281 (5th Cir. 1974); see Iqbal, 556 U.S. at 678-79. ARGUMENT 1. The FHA does not prohibit a refusal to accept vouchers. The FHA was enacted in 1968 to combat and prevent racial segregation and discrimination in housing. See Tex. Dep’t of Housing & Cmty. Affairs v. Inclusive Communities Project, Inc., 135 S. Ct. 2507, 2516 (2015) (“ICP VI”); see also 42 U.S.C. Case 3:17-cv-00206-K Document 42 Filed 06/14/17 Page 10 of 17 PageID 351 CPF PC RIVERWALK, LLC’S MOTION TO DISMISS AND SUPPORTING BRIEF - PAGE 10 OF 17 § 3601 (stating that the purpose of the FHA is “to provide, within constitutional limitations, for fair housing throughout the United States”). To that end, the FHA makes it unlawful to “refuse to sell or rent,” “refuse to negotiate for the sale or rental of,” or “otherwise make unavailable or deny” housing to any person “because of race, color, religion, sex, familial status, or national origin.” 42 U.S.C. § 3604(a). The FHA does not prohibit discrimination based on voucher status. A person aggrieved by a violation of the FHA can establish liability in two ways: disparate treatment or disparate impact. See Inclusive Communities Project, Inc. v. Tex. Dep’t of Housing & Cmty. Affairs, 747 F.3d 275, 280 (5th Cir. 2014) (“ICP V”), aff’d, ICP VI, 135 S. Ct. at 2525 (“violation of the FHA can be shown either by proof of intentional discrimination or by proof of disparate impact”). Disparate treatment occurs when a decision maker treats some people less favorably than others “because of” their race, color, religion, sex, or some other protected characteristic. Raytheon Co. v. Hernandez, 540 U.S. 44, 52 (2003); Muñoz v. Orr, 200 F.3d 291, 299 (5th Cir. 2000). Because liability in a disparate treatment case “depends on whether the protected trait actually motivated the . . . decision,” a plaintiff complaining of disparate treatment must plead and prove facts showing that the defendant had discriminatory intent or motive. Raytheon Co., 540 U.S. at 52 (internal quotation marks and ellipsis omitted); see ICP VI, 135 S. Ct. at 2513. Disparate impact, on the other hand, does not require proof of discriminatory intent. Raytheon Co., 540 U.S. at 52; Muñoz, 200 F.3d at 299. To establish disparate impact liability, a plaintiff must identify a policy that, on its face treats all people the same, but in fact falls more harshly on one group than another and cannot be justified by business Case 3:17-cv-00206-K Document 42 Filed 06/14/17 Page 11 of 17 PageID 352 CPF PC RIVERWALK, LLC’S MOTION TO DISMISS AND SUPPORTING BRIEF - PAGE 11 OF 17 necessity. Raytheon Co., 540 U.S. at 52; Muñoz, 200 F.3d at 299; Inclusive Communities Project, Inc. v. Tex. Dep’t of Housing & Cmty. Affairs, 2016 WL 4494322, at *6 (N.D. Tex. Aug. 26, 2016) (“ICP VII”). Although the Supreme Court in ICP VI recognized that disparate impact claims are cognizable under the FHA, the Court implored district courts to scrutinize those claims carefully and promptly, cautioning that: • “racial imbalance does not, without more, establish a prima facie case of disparate impact,” 135 S. Ct. at 2523 (brackets and ellipses omitted); • disparate impact liability cannot be established “based solely on a showing of statistical disparity,” id.; and • “A plaintiff who fails to allege facts at the pleading stage or produce statistical evidence demonstrating a causal connection [between a racial imbalance or statistic disparity] cannot make out a prima facie case of disparate impact,” id. With these instructions in mind, the Court “must examine with care whether a plaintiff has made out a prima facie case, and prompt resolution of these cases is important.” Id. 2. The Court should dismiss ICP’s disparate impact claim because ICP has failed to allege facts showing that Riverwalk’s alleged discriminatory policy caused the racial imbalance about which ICP complains. ICP’s disparate impact claim is governed by the burden shifting framework established by HUD and endorsed by the Fifth Circuit in ICP V. ICP VII, 2016 WL 4494322, at *4. “First, a plaintiff must prove a prima facie case of discrimination by showing that a challenged practice causes a discriminatory effect, as defined by 24 C.F.R. § 100.500.” ICP V, 747 F.3d at 282 (applying the burden shifting framework in 24 C.F.R. § 100.500). “If the plaintiff makes a prima facie case, the defendant must then prove that the challenged practice is necessary to achieve one or more substantial, legitimate, Case 3:17-cv-00206-K Document 42 Filed 06/14/17 Page 12 of 17 PageID 353 CPF PC RIVERWALK, LLC’S MOTION TO DISMISS AND SUPPORTING BRIEF - PAGE 12 OF 17 nondiscriminatory interests . . . .” Id. (internal quotation marks omitted). “If the defendant meets its burden, the plaintiff must then show that the defendant’s interests could be served by another practice that has a less discriminatory effect.” Id. (internal quotation marks omitted). The Court need not look beyond the prima facie case to decide this motion because ICP has not alleged any facts from which the Court can infer that Lincoln’s policy of refusing to rent to vouchers at Park Central “causes” a discriminatory effect. The only paragraph in ICP’s complaint that attempts to draw a causal connection between Lincoln’s alleged policy at Park Central and a “discriminatory effect” is paragraph 59, in which ICP alleges that there are no African-American renters in the community immediately surrounding the complex: There are no Black renters in the small census tract block group in which the Lincoln Property company managed Park Central at Flower Mound complex is located . . . . There are 307 units at the Park Central at Flower Mound apartment complex located in the census tract block group. Lincoln Property Company’s policy is to refuse to negotiate with or rent to voucher households for the units available at voucher rents in this complex. There were no voucher households in the entire census tract that included this apartment complex as of the HUD 2015 Picture of Subsidized Housing Report. Compl. ¶ 59. In short, ICP alleges a mere racial imbalance - there are no African-Americans in Park Central’s census tract - and asks this Court to infer that Lincoln’s policy is to blame. Importantly, ICP wrongly conflates African-American renter households with African- American voucher households in arguing that the alleged racial imbalance supports a prima facie case of disparate impact resulting from Lincoln’s policy. But the existence of “racial imbalance . . . does not, without more, establish a prima facie case of disparate impact.” ICP VI, 135 S. Ct. at 2523. To establish a prima facie case, ICP must allege facts tying Case 3:17-cv-00206-K Document 42 Filed 06/14/17 Page 13 of 17 PageID 354 CPF PC RIVERWALK, LLC’S MOTION TO DISMISS AND SUPPORTING BRIEF - PAGE 13 OF 17 the alleged racial imbalance to Lincoln’s policy at Park Central. See id. ICP cannot do that here because there are multiple factors that inform where people choose to live (including, for example, proximity to employment, proximity to public transportation, rent prices, etc.), none of which is relevant to or otherwise impacted by a purported voucher policy at one apartment complex. See id. at 2523-24 (expressing skepticism that plaintiffs could allege disparate impact where “multiple factors” could have contributed to the imbalance). As Justice Thomas observed in Parents Involved in Community Schools v. Seattle School District No. 1, “[a]lthough presently observed racial imbalance might result from past discrimination, racial imbalance can also result from any number of innocent private decisions.” 551 U.S. 701, 750 (2007) (Thomas, J., concurring). Without factual allegations or statistical evidence supporting the reasonable inference that the alleged racial imbalance in Flower Mound stems from Lincoln’s voucher policy, and not some other factor, ICP cannot state a prima facie case. See id. at 2523. To hold otherwise would be one step closer to holding Riverwalk liable for “racial disparities [it] did not create,” which is exactly what the ICP VI Court sought to prevent. See id.6 To the extent that ICP argues that Lincoln’s policy perpetuates racial segregation in Park Central’s targeted census tract, the same reasoning applies. For this reason, the disparate impact claim levied against Riverwalk in this case is exactly the sort of “abusive disparate-impact” claim that the ICP VI court sought to prevent when establishing its limitations on disparate impact liability. See id. at 2524. Reduced to 6 Moreover, in asserting that the “[Lincoln] causes disproportionate harm to Black households,” Compl. ¶ 65, ICP suggests that most, if not all, African-American households receive vouchers and, therefore, a policy excluding voucher recipients constitutes unlawful discrimination. ICP references no facts supporting this assumption, and instead asks this Court to accept statistics pertaining only to voucher holders as representative of a larger protected class - an apples to oranges comparison. Case 3:17-cv-00206-K Document 42 Filed 06/14/17 Page 14 of 17 PageID 355 CPF PC RIVERWALK, LLC’S MOTION TO DISMISS AND SUPPORTING BRIEF - PAGE 14 OF 17 essentials, ICP contends that Riverwalk is liable under a disparate impact theory merely because voucher holders in the Dallas-Irving-Plano metropolitan statistical area are predominantly African-American. But a no-voucher policy, no matter where it is imposed, may always disproportionately affect one group or another, unless vouchers in some area are serendipitously distributed evenly among all races. Consequently, if property owners are liable under the FHA under the circumstances alleged by ICP, every property owner in the United States that does not accept vouchers would be subject to fair housing liability, even though the voucher program is a voluntary program. That is the kind of “robust causality” requirement was meant to prevent. 3. The Court should dismiss ICP’s disparate treatment claim because ICP has failed to allege any fact from which the Court can infer that Riverwalk intended to discriminate. The Court should also dismiss ICP’s disparate treatment claim because the Complaint fails to allege a single fact from which the Court can infer that Riverwalk acted with discriminatory intent or motive. ICP’s disparate treatment claim rests on the following allegations: • ICP’s voucher clients are predominantly African-American; • ICP has African-American voucher clients who meet Lincoln’s tenant criteria; • Riverwalk had units available in a high opportunity area; • ICP offered to negotiate for units at Riverwalk’s property and would have subleased those units to African-American voucher clients; • Lincoln did not respond to the offer; and, therefore • Lincoln intended to discriminate against African-Americans because of their race. Compl. ¶¶ 91-94. Case 3:17-cv-00206-K Document 42 Filed 06/14/17 Page 15 of 17 PageID 356 CPF PC RIVERWALK, LLC’S MOTION TO DISMISS AND SUPPORTING BRIEF - PAGE 15 OF 17 The conclusion that Lincoln “intended to discriminate” against African-Americans simply does not follow from the factual allegations that precede it. None of the allegations in the Complaint suggests that Lincoln refused to respond to ICP’s letter because of the race of ICP’s clients, and not some other reason or no reason at all. ICP tries to negate this obvious defect by alleging that “[a]ny asserted reason for Defendants’ refusal to negotiate with or rent to ICP made after the filing of this lawsuit will be pretext for discrimination,” Compl. ¶ 95, but that is exactly the sort of conclusory allegation that the Supreme Court has instructed lower courts to ignore when ruling on a motion to dismiss. See Iqbal, 556 U.S. at 678-79. Absent factual allegations suggesting that Lincoln’s alleged failure to respond was motivated by race, ICP cannot state a disparate treatment claim. 7 CONCLUSION For the reasons discussed above, and the reasons expressed by Riverwalk’s co- defendants in their motions to dismiss and accompanying briefs (ECF Nos. 20, 22, 32, 33, 35 and 36) as well as Lincoln’s motion to adopt (ECF No. 34), which are equally applicable to Riverwalk, Riverwalk respectfully requests that the Court dismiss ICP’s complaint with prejudice, for failure to state a claim upon which relief can be granted. 7 ICP’s disparate treatment claim against Riverwalk also fails for the reasons articulated in Section III.C of Defendants Legacy Multifamily North III LLC and HLI White Rock LLC’s Motion to Dismiss for Failure to State a Claim and Brief in Support (ECF No. 32), which Riverwalk relies upon and expressly incorporates herein by reference. Case 3:17-cv-00206-K Document 42 Filed 06/14/17 Page 16 of 17 PageID 357 CPF PC RIVERWALK, LLC’S MOTION TO DISMISS AND SUPPORTING BRIEF - PAGE 16 OF 17 Dated: June 14, 2017. Respectfully submitted, /s/ Arthur E. Anthony Arthur E. Anthony Texas Bar No. 24001661 aanthony@lockelord.com Taylor F. Brinkman Texas Bar No. 24069420 tbrinkman@lockelord.com LOCKE LORD LLP 2200 Ross Avenue, Suite 2800 Dallas, Texas 75201 T: (214) 740-8000 F: (214) 740-8800 ATTORNEYS FOR CPF PC RIVERWALK LLC CERTIFICATE OF SERVICE I certify that on June 14, 2017, I served this document on Plaintiff’s counsel of record via the Court’s Electronic Case Filing (“ECF”) system, which will automatically deliver a notice of electronic filing to Plaintiff’s counsel of record, who is a registered ECF user. Delivery of such notice of electronic filing constitutes service of this document as contemplated by Rule 5 of the Federal Rules of Civil Procedure. See LR5. /s/ Arthur E. Anthony Case 3:17-cv-00206-K Document 42 Filed 06/14/17 Page 17 of 17 PageID 358 ORDER DISMISSING CLAIMS AGAINST DEFENDANT CPF PC RIVERWALK UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION THE INCLUSIVE COMMUNITIES PROJECT, INC., § § § Plaintiff, § § vs. § § No. 3:17-CV-00206-K LINCOLN PROPERTY COMPANY, LEGACY MULTIFAMILY NORTH III LLC, CPF PC RIVERWALK LLC, HLI WHITEROCK LLC , and BRICK ROW APARTMENTS LLC, § § § § § § Defendants. § ORDER OF DISMISSAL WITH PREJUDICE After having considered the Motion to Dismiss ICP’s Complaint for Failure to State a Claim filed June 14, 2017, by Defendant CPF PC Riverwalk LLC (“Riverwalk”), The Court ORDERS that such motion be, and is hereby, granted, and that all claims asserted against Riverwalk in this action are hereby dismissed with prejudice. SIGNED _____________________, 2017. THE HONORABLE ED KINKEADE U.S. DISTRICT JUDGE Case 3:17-cv-00206-K Document 42-1 Filed 06/14/17 Page 1 of 1 PageID 359