Snyder v. Barry Realty, Inc.

• Decision Date: 12 December 1996
• Docket Number: No. 96 C 1041.,96 C 1041.
• Citation: 953 F.Supp. 217
• Parties: Edward SNYDER and Janet Snyder, Plaintiffs, v. BARRY REALTY, INC., an Illinois corporation, and various unidentified employees known as "Tammy" and "Carol," Don Barry, Maurice J. O'Brien, Patrick W. O'Brien, and Paul H. O'Brien, Defendants.
• Court: U.S. District Court — Northern District of Illinois

953 F.Supp. 217

Edward SNYDER and Janet Snyder, Plaintiffs, v. BARRY REALTY, INC., an Illinois corporation, and various unidentified employees known as "Tammy" and "Carol," Don Barry, Maurice J. O'Brien, Patrick W. O'Brien, and Paul H. O'Brien, Defendants.

No. 96 C 1041.

United States District Court, N.D. Illinois, Eastern Division.

December 12, 1996.

John T. Gonnella, Edward A. Voci, Edward A. Voci Law Office, Chicago, IL, for Edward Snyder, Janet Snyder.

Lawrence E. Morrissey, Lawrence E. Morrissey, Ltd., Chicago, IL, Robert Gary Grossman, Chicago, IL, Gilbert Y. Liss, Chicago, IL, for Barry Realty, Inc., Tammy, Carol, Don Barry.

OPINION AND ORDER

NORGLE, District Judge:

Before the court are Plaintiffs' Motion for Partial Summary Judgment, and Defendants' Motion for Summary Judgment. For the following reasons, both motions are denied.

I. Background

Edward Snyder ("Snyder") and Janet Snyder (collectively "the Snyders") are a married couple with five minor children. Snyder decided to relocate to Evanston, Illinois, because he was accepted to, and intended to enroll in, a graduate program at nearby Northwestern University. Around June 9, 1994, Snyder traveled from California to Evanston to obtain an apartment for his family. Upon his arrival in Evanston, Snyder approached employees of Defendant, Barry Realty, Inc. ("Barry"), and requested to see an apartment. Soon thereafter, employees of Barry showed Snyder two apartments located at 632 Hinman Avenue in Evanston. Defendants Don Barry and Michael Aufrecht own the land and building at that address. Snyder then completed an application for unit 1A ("the unit") of the building, a three-bedroom apartment. In his application, Snyder disclosed that he intended that his spouse and five minor children would live in the unit with him, for a total of seven people in the unit.

Around June 23, 1994, an employee of Barry informed Snyder that Barry was rejecting Snyder's rental application. The stated basis for the rejection was Barry's occupancy policy, which provided for a maximum occupancy of four people for a three-bedroom apartment. Barry arrived at this occupancy policy through their "bedrooms plus one" rental policy. Under this policy, a maximum of three people may occupy a two-bedroom apartment, a maximum of four people may occupy a three-bedroom apartment, and a maximum of five people may occupy a four-bedroom apartment.

The court notes that Barry's occupancy policy is more stringent than Evanston's statutory occupancy requirements. Evanston's occupancy ordinance, No. 68-0-90, states that every bedroom occupied by more than one person shall have at least fifty square feet of floor space for each occupant. The Snyders could have lived in the unit without violating Evanston's occupancy ordinance. However, Barry refused Plaintiffs' application because of its own, more stringent, policy. The Snyders now assert that Barry discriminated against them based on their familial status by rejecting their application based on that policy. Both parties have moved for summary judgment.

II. Discussion

Summary judgment is appropriate only where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). When considering a motion for summary judgment, the court may review the entire record, drawing all reasonable inferences from the record in the light most favorable to the non-moving party. Cornfield by Lewis v. School Dist. No. 230, 991 F.2d 1316, 1320 (7th Cir.1993). The burden of establishing the lack of any genuine issue of material fact rests with the movant. Jakubiec v. Cities Serv. Co., 844 F.2d 470, 473 (7th Cir.1988).

The Fair Housing Act ("FHA") makes it unlawful to "refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of ... familial status...." 42 U.S.C. § 3604(a). "Familial Status" refers to the presence of minor children in the household. 42 U.S.C. § 3602(k). "It has long been recognized that to give full measure to the Congressional purpose behind the FHA, courts have given broad interpretation to the statute." Baxter v. City of Belleville, Ill., 720 F.Supp. 720, 731 (S.D.Ill.1989) (citations omitted).

The Department of Housing and Urban Development ("HUD") "has adopted a three-part test set forth in McDonnell Douglas Corp. v. Green, for evaluating claims of discrimination under the Fair Housing Act." U.S. v. Badgett, 976 F.2d 1176, 1178 (8th Cir.1992) (citation omitted). See also Village of Bellwood v. Dwivedi, 895 F.2d 1521, 1533 (7th Cir.1990) (noting that courts use employment discrimination analysis in FHA cases). First, plaintiffs must bear the initial burden of proving a prima facie case of housing discrimination by a preponderance of the evidence. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668 (1973).

There are two theories of discrimination by which plaintiffs may proceed under the FHA: disparate treatment and disparate impact. Here, the Snyders' only viable option is disparate impact, as they do not state that Barry only applied its occupancy policy to families. See Metropolitan Housing Dev. Corp. v. Village of Arlington Heights, 558 F.2d 1283, 1288 (7th Cir.1977) (noting that courts need not find an absence of discrimination simply because a policy impacts non-protected as well as protected groups). To establish a prima facie case of disparate impact under the FHA, plaintiffs "must show at least that the defendant's actions had a discriminatory effect." Id. at 1289-90; Keith v. Volpe, 858 F.2d 467, 482 (9th Cir.1988).

If plaintiffs succeed in establishing a prima facie case of discrimination, a presumption of illegality arises and the burden shifts to the defendants to articulate legitimate non-discriminatory reasons for the challenged policies. Badgett, 976 F.2d at 1178. If the defendants satisfy this burden, plaintiffs have the opportunity to prove by a preponderance that the non-discriminatory reasons asserted by the defendants are merely pretext for discrimination. Id.

A. Prima Facie Case

The Seventh Circuit requires courts to consider four factors when evaluating whether FHA disparate impact plaintiffs have established their prima facie cases: 1) the strength of the discriminatory effect; 2) some evidence of discriminatory intent; 3) the defendants' interest in maintaining the allegedly discriminatory practice, and 4) the nature of the relief sought. Id. at 1290. Regarding the second factor of intent, the Seventh Circuit noted that, although plaintiffs must produce evidence of discriminatory intent, that evidence need only be "suggestive rather than conclusive." Phillips v. Hunter Trails Comm. Assoc., 685 F.2d 184, 190 (7th Cir.1982). The language of Arlington Heights itself demonstrates that intent to discriminate need not be proven: the Arlington Heights court stated, "We now turn to determining under what circumstances conduct that produces a discriminatory impact but which was taken without discriminatory intent will violate section 3604(a)." Arlington Heights, 558 F.2d at 1290.

The court reads the Arlington Heights standard in conjunction with more recent HUD interpretations of the FHA. "When, as in the FHA § 3614,¹ `Congress explicitly delegates to an agency the authority to elucidate a specific statutory provision, the agency's interpretation is given controlling weight unless arbitrary, capricious, or manifestly contrary to the statute.'" Mountain Side Mobile Estates v. Secretary of Housing & Urban Dev., 56 F.3d 1243, 1248 (10th Cir.1995) (quoting New Mexico Dept. of Human Servs. v. Dept. of Health & Human Servs. Health Care Fin. Admin., 4 F.3d 882, 884-85 (10th Cir.1993)). HUD's interpretation is significant to the court's analysis because HUD's "interpretation of the FHA `ordinarily commands considerable deference', as `HUD [is] the federal agency primarily assigned to implement and administer Title VIII.'" Pfaff v. U.S. Dept. of Housing & Urban Dev., 88 F.3d 739, 747 (9th Cir.1996) (quoting International Brotherhood of Teamsters v. Daniel, 439 U.S. 551, 566 n. 20, 99 S.Ct. 790, 800 n. 20, 58 L.Ed.2d 808 (1979)). "[C]ourts must use their discretion in deciding whether, given the particular circumstances of each case, relief should be granted." Id. at 1289-90.

HUD has also commented on the relevance of the intent factor as it relates to the disparate impact theory. In administrative decisions, HUD has taken the position that facially neutral occupancy restrictions, such as Barry's "bedrooms-plus-one" policy, violate the FHA if they have a discriminatory effect, regardless of intent. HUD v. Mountain Side Mobile Estates, ("Mountain Side I") Fair Housing-Fair Lending, para. 25,053, at p. 25,492 (Nos. 08-92-0010-1 and 08-92-0011-1, Secretary of HUD, 7/13/93); HUD v. Mountain Side Mobile Estates, ("Mountain Side II") (Nos. 08-92-0010-1 and 08-92-0011-1, Secretary of HUD, 10/20/93) (slip op.).

Applying the four factors from Arlington Heights to the instant case, the court finds that the Snyders have established a prima facie case of discrimination by disparate impact. Regarding the first factor evidence of discriminatory effect, the Snyders demonstrate a strong showing of discriminatory effect by statistical data, and by illustrating how the policy effects families with more than one child. As to the third factor, the defendants' interest in maintaining the practice, the Snyders have also demonstrate that Barry's interest (in preventing large groups of Northwestern students from over-populating apartments) would not be served by rejecting the Snyders' rental application. Moreover, considering the fourth factor, the nature of the requested relief. the Snyders do not request extreme affirmative remedies; e.g., they are not asking Barry to construct new housing for families.

The only remaining question goes to the second factor: whether the Snyders...