Ojo v. Farmers Group, Inc., No. 06-55522.

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Citation600 F.3d 1205
Docket NumberNo. 06-55522.
PartiesPatrick O. OJO, Attorney, on behalf of himself and all others similarly situated, Plaintiff-Appellant, v. FARMERS GROUP, INC.; Fire Underwriters Association; Fire Insurance Exchange; Farmers Underwriters Association; Farmers Insurance Exchange, Defendants-Appellees.
Decision Date09 April 2010

600 F.3d 1205

Patrick O. OJO, Attorney, on behalf of himself and all others similarly situated, Plaintiff-Appellant,
v.
FARMERS GROUP, INC.; Fire Underwriters Association; Fire Insurance Exchange; Farmers Underwriters Association; Farmers Insurance Exchange, Defendants-Appellees.

No. 06-55522.

United States Court of Appeals, Ninth Circuit.

April 9, 2010.


600 F.3d 1206

Sanford Svetcov, Susan K. Alexander, Maria V. Morris, Coughlin Stoia Geller Rudman & Robbins LLP, San Francisco, CA; Andrew S. Friedman, Wendy J. Harrison, Gustave A. Hanson, Bonnett Fairbourn Friedman & Balint, P.C., Phoenix, AZ, for the plaintiffs-appellants.

Harriet S. Posner, Whitney Walters, Carl Alan Roth, Skadden, Arps, Slate, Meagher & Flom LLP, Los Angeles, CA, for the defendants-appellees.

Linda F. Thome, Civil Rights Division, United States Department of Justice, Washington, D.C., for amicus curiae the United States.

D. Scott Chang, Stephen M. Dane, John P. Relman, Relman & Dane PLLC, Washington, D.C.; Joseph D. Rich, Lawyers' Committee for Civil Rights Under Law, Washington, D.C., for amici curiae National Fair Housing Alliance, Lawyers' Committee for Civil Rights Under Law, Greater Houston Fair Housing Center, Austin Tenants' Council, and Fair Housing Council of Greater San Antonio.

Before ALEX KOZINSKI, Chief Judge, PAMELA ANN RYMER, MICHAEL DALY HAWKINS, SUSAN P. GRABER, M. MARGARET McKEOWN, WILLIAM A. FLETCHER, RONALD M. GOULD, RICHARD R. CLIFTON, MILAN D. SMITH, JR., SANDRA S. IKUTA and N. RANDY SMITH, Circuit Judges.

600 F.3d 1207

PER CURIAM:

In this appeal we are asked to determine whether a disparate impact suit alleging the discriminatory provision of homeowner's insurance in violation of the federal Fair Housing Act ("FHA"), 42 U.S.C. §§ 3601-19, is reverse-preempted by the McCarran-Ferguson Act, 15 U.S.C. § 1012, because it invalidates, impairs, or supersedes Texas insurance law. In order to do so, we must answer two preliminary questions. First, we must decide whether the FHA prohibits discrimination in the denial and pricing of homeowner's insurance. Second, we must determine whether the reverse-preemption standard set forth in the McCarran-Ferguson Act applies to claims brought under latter-enacted civil rights statutes such as the FHA. We answer yes to both questions. Having resolved these issues, in a separate order filed concurrently with this opinion we certify to the Supreme Court of Texas the dispositive question of whether Texas law permits an insurance company to price insurance by using credit-score factors that have a racially disparate impact that, were it not for the McCarran-Ferguson Act, would violate the FHA.

I

Plaintiff-Appellant Patrick O. Ojo is an African-American resident of Texas and the owner of a homeowner's property-and-casualty policy issued by Farmers Group, Inc. ("Farmers"). Ojo sued Farmers and its affiliates, subsidiaries, and reinsurers (collectively "Defendants") in federal court on behalf of himself and other minorities. He claims that Defendants, acting in concert, use a number of "undisclosed factors" in their credit-scoring system that disparately impact minorities, in violation of the federal Fair Housing Act ("FHA"), 42 U.S.C. §§ 3601-19. Ojo does not claim that Defendants intentionally discriminated against any members of the putative plaintiff class.

Defendants moved to dismiss all claims pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The district court concluded that the Texas Insurance Code preempted Ojo's FHA claims under the reverse-preemption standard set forth in the McCarran-Ferguson Act, 15 U.S.C. § 1012. Ojo appealed, and a divided three-judge panel of our court initially reversed the district court, holding that Texas law does not reverse-preempt Ojo's FHA claim. Ojo v. Farmers Group, Inc., 565 F.3d 1175 (9th Cir.2009). We ordered the case reheard en banc pursuant to Ninth Circuit Rule 35-3, and it is now pending before us.

II

It is unlawful under the FHA "to discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race." 42 U.S.C. § 3604(b). This provision has been interpreted to prohibit not just intentional discrimination but also actions that have a discriminatory effect based on race (disparate-impact discrimination). See Pfaff v. U.S. Dep't of Hous. & Urban Dev., 88 F.3d 739, 745-46 (9th Cir.1996). Where a plaintiff raises a prima facie case of disparate-impact discrimination under the FHA, the burden shifts to the defendant to either rebut the facts underpinning the prima facie case or to demonstrate a "legally sufficient, nondiscriminatory reason" for the practices causing the disparate impact. Affordable Hous. Dev. Corp. v. City of Fresno, 433 F.3d 1182, 1194-95 (9th Cir. 2006) (internal quotation marks omitted).

We have not yet had occasion to decide whether or not the FHA applies to homeowner's insurance. We now hold that the FHA prohibits racial discrimination

600 F.3d 1208
in both the denial and pricing of homeowner's insurance

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  • Prop. Cas. Insurers Ass'n of Am. v. Donovan, No. 13 C 8564
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • September 3, 2014
    ...1026NAACP v. American Family Mut. Ins. Co., 978 F.2d 287, 295 (7th Cir.1992) (“Duplication is not conflict.”); Ojo v. Farmers Grp., Inc., 600 F.3d 1205, 1209–10 (9th Cir.2010) (recognizing that the McCarran–Ferguson Act would not reverse-preempt the FHA where the FHA “complement[s]—rather t......
  • Am. Ins. Ass'n v. U.S. Dep't of Hous. & Urban Dev., Civil Case No. 13-00966 (RJL)
    • United States
    • United States District Courts. United States District Court (Columbia)
    • November 3, 2014
    ...prohibited in many states28—will regularly result in the FHA being "reverse-preempted" McCarran-Ferguson. See Ojo v. Farmers Group, Inc., 600 F.3d 1205, 1209 (9th Cir. 2010) (en banc) (stating that application of the FHA may be reverse-preempted if it "invalidat[s], impair[s], or supersede[......
  • Am. Ins. Ass'n v. U.S. Dep't of Hous. & Urban Dev., Civil Case No. 13–00966 RJL
    • United States
    • United States District Courts. United States District Court (Columbia)
    • November 7, 2014
    ...states28 —will regularly result 74 F.Supp.3d 45in the FHA being “reverse-preempted” McCarran–Ferguson. See Ojo v. Farmers Group, Inc., 600 F.3d 1205, 1209 (9th Cir.2010) (en banc) (stating that application of the FHA may be reverse-preempted if it “invalidate[s], impair[s], or supersede[s] ......
  • City of L.A. v. Wells Fargo & Co., Case No. 2:13–cv–9007–ODWRZx.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • May 28, 2014
    ...recognized disparate-impact claims under the FHA subsequent to the Smith decision along with other circuits. Ojo v. Farmers Grp., Inc., 600 F.3d 1205, 1208 (9th Cir.2010) ; see also Graoch Assoc. # 33, L.P. v. Louisville/Jefferson Cnty. Metro Human Relations Comm'n, 508 F.3d 366, 392 (6th C......
  • Request a trial to view additional results
17 cases
  • Am. Ins. Ass'n v. U.S. Dep't of Hous. & Urban Dev., Civil Case No. 13-00966 (RJL)
    • United States
    • United States District Courts. United States District Court (Columbia)
    • November 3, 2014
    ...prohibited in many states28—will regularly result in the FHA being "reverse-preempted" McCarran-Ferguson. See Ojo v. Farmers Group, Inc., 600 F.3d 1205, 1209 (9th Cir. 2010) (en banc) (stating that application of the FHA may be reverse-preempted if it "invalidat[s], impair[s], or supersede[......
  • Am. Ins. Ass'n v. U.S. Dep't of Hous. & Urban Dev., Civil Case No. 13–00966 RJL
    • United States
    • United States District Courts. United States District Court (Columbia)
    • November 7, 2014
    ...states28 —will regularly result 74 F.Supp.3d 45in the FHA being “reverse-preempted” McCarran–Ferguson. See Ojo v. Farmers Group, Inc., 600 F.3d 1205, 1209 (9th Cir.2010) (en banc) (stating that application of the FHA may be reverse-preempted if it “invalidate[s], impair[s], or supersede[s] ......
  • Prop. Cas. Insurers Ass'n of Am. v. Donovan, No. 13 C 8564
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • September 3, 2014
    ...1026NAACP v. American Family Mut. Ins. Co., 978 F.2d 287, 295 (7th Cir.1992) (“Duplication is not conflict.”); Ojo v. Farmers Grp., Inc., 600 F.3d 1205, 1209–10 (9th Cir.2010) (recognizing that the McCarran–Ferguson Act would not reverse-preempt the FHA where the FHA “complement[s]—rather t......
  • City of L.A. v. Wells Fargo & Co., Case No. 2:13–cv–9007–ODWRZx.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • May 28, 2014
    ...recognized disparate-impact claims under the FHA subsequent to the Smith decision along with other circuits. Ojo v. Farmers Grp., Inc., 600 F.3d 1205, 1208 (9th Cir.2010) ; see also Graoch Assoc. # 33, L.P. v. Louisville/Jefferson Cnty. Metro Human Relations Comm'n, 508 F.3d 366, 392 (6th C......
  • Request a trial to view additional results

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