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Managing Fair Lending Risk After Inclusive Communities (Epilog)

The remand of the underlying controversy in Inclusive Communities has finally been decided by Judge Fitzwater of the Northern District of Texas. Applying the robust causality requirement articulated by Justice Kennedy, the lower Court found that plaintiffs failed to meet the burden of proving a prima facie case and dismissed the complaint.  The District Court took great pains to examine the record against a variety of alleged claims, but found them all wanting.

The District Court Memorandum Opinion emphasizes several points that prior analysis in this series discussed:

1)      Demonstrating a prima facie case is a fundamental obligation of the plaintiff and a key focus for defendants who seek to prevail in disparate impact cases.

2)      Wards Cove remains a viable precedent post-Inclusive Communities for defining the hurdles to be cleared when proving a prima facie case.

3)      The Inclusive Communities robust causality requirement compels plaintiff to identify a specific neutral policy that erects an impermissible barrier to housing opportunity.

Part B of Judge Fitzwater’s Opinion (Slip Opinion p. 16 – 18) also finds that plaintiff’s assertion of discriminatory discretion is not a valid disparate impact claim about a neutral policy, but is instead a disparate treatment claim about the exercise of discretion, not the existence of discretion. As a disparate treatment claim, plaintiff would be obligated to prove intent.

An analysis of the opinion appears on the Nixon Peabody site.

Posted on Tuesday, October 18, 2016 by Registered CommenterWebmaster | Comments Off