The Inclusive Communities Project Inc. v. the Tex. Dep't of Hous.

• Decision Date: 28 September 2010
• Docket Number: Civil Action No. 3:08–CV–0546–D.
• Citation: 749 F.Supp.2d 486
• Parties: The INCLUSIVE COMMUNITIES PROJECT, INC., Plaintiff,v.The TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS, et al., Defendants.
• Court: U.S. District Court — Northern District of Texas

749 F.Supp.2d 486

The INCLUSIVE COMMUNITIES PROJECT, INC., Plaintiff,

v.The TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS, et al., Defendants.

Civil Action No. 3:08–CV–0546–D.

United States District Court, N.D. Texas, Dallas Division.

Sept. 28, 2010.

Michael M. Daniel, Law Office of Michael M. Daniel, Laura Beth Beshara, Daniel & Beshara, Dallas, TX, for Plaintiff.G. Tomas Rhodus, David Cameron Gair, James D. MacIntyre, Michael C. Kelsheimer, William B. Chaney, Looper Reed & McGraw, Dallas, TX, Shelley Dahlberg, Timothy Earl Bray, Office of the Texas Attorney General, Austin, TX, for Defendants.

MEMORANDUM OPINION AND ORDER

SIDNEY A. FITZWATER, Chief Judge.

In this action alleging that defendant Texas Department of Housing and Community Affairs (“TDHCA”) perpetuates racial segregation and discrimination through the allocation of Low Income Housing Tax Credits (“LIHTC”), the court must decide whether plaintiff The Inclusive Communities Project, Inc. (“ICP”) has standing and whether it has established prima facie cases under the Fair Housing Act (“FHA”), 42 U.S.C. §§ 3604(a) and 3605(a), the Fourteenth Amendment (actionable under 42 U.S.C. § 1983), and 42 U.S.C. § 1982. Concluding that ICP has demonstrated its standing beyond peradventure, has established a prima facie case for each of its claims, and has adduced evidence that would enable a reasonable jury to find in its favor on each of its claims, the court grants ICP's motion for partial summary judgment and denies defendants' motions for judgment on the pleadings and for summary judgment.¹

I

The background facts and procedural history of this case are set out in the court's prior memorandum opinion and order. See Inclusive Cmtys. Project, Inc. v. Tex. Dep't of Hous. & Cmty. Affairs, 2008 WL 5191935, at *1 (N.D.Tex. Dec. 11, 2008) (Fitzwater, C.J.) (“ ICP I ”). The court therefore adds to ICP I the facts and procedural history pertinent to the court's present decision.

ICP is a Dallas-based non-profit organization that assists low-income persons in finding affordable housing and seeks racial and socioeconomic integration in Dallas housing. In particular, ICP works with African–American families who are eligible for the Dallas Housing Authority's Section 8 Housing Choice Voucher program (“Section 8”). ICP assists Section 8 participants in obtaining apartments in predominately Caucasian,² suburban neighborhoods ³ by offering counseling, assisting in negotiations with landlords, and providing financial assistance (for example, security deposits). At times, ICP must provide “landlord incentive bonus payments” to landlords to secure housing for Section 8 participants.

TDHCA ⁴ is the state entity that administers the federal LIHTC program, granting tax credits under 26 U.S.C. § 42 to low-income housing developers to encourage investment in low-income, multifamily rental housing. Developers can sell their tax credits to finance housing construction. The tax credits are allocated according to the federal statute, which requires the state agency to act according to an annual “Qualified Allocation Plan” (“QAP”) developed by the agency. See 26 U.S.C. § 42(m); 10 Tex. Admin. Code § 50.1 et seq. (2010) (setting forth QAP developed by TDHCA). TDHCA receives applications for proposed developments and has the sole authority to approve or deny tax credits for those developments.⁵ The agency receives more applications than it can fund, and the exact amount of tax credits allocated to Texas varies each year (for example, $43 million in tax credits was allocated to Texas in 2007). Any developer who receives LIHTC must accept as tenants otherwise-eligible Section 8 participants who use Section 8 vouchers to help pay rent. See 26 U.S.C. § 42(h)(6)(B)(iv). According to ICP, Section 8 participants struggle to obtain housing in non-LIHTC developments.

ICP alleges that TDHCA has disproportionately approved tax credits for low-income housing in minority neighborhoods and has denied applications for non-elderly ⁶ low-income housing in predominately Caucasian neighborhoods; that 92% percent of all LIHTC units in the city of Dallas are in census tracts where more than one-half of the population is minority; that TDHCA has discretion in determining which proposed projects receive tax credits, and that TDHCA improperly takes race into account (both of the neighborhood and of potential residents), perpetuating racial segregation in Dallas housing; that defendants made housing and financial assistance for housing construction unavailable because of race, in violation of the FHA; and that defendants used race as a factor in their allocation of tax credits, in violation of the Fourteenth Amendment, actionable under § 1983, and § 1982, which requires that defendants give all United States citizens the same right to lease property as Caucasian citizens. ICP requests broad equitable relief, including, inter alia, an injunction requiring TDHCA to create as many LIHTC units in non-minority census tracts as in minority census tracts; forbidding TDHCA from considering the racial composition of the area or potential residents; and enjoining TDHCA from perpetuating racial segregation.

ICP moves for partial summary judgment, asking the court to hold that ICP has standing to bring its claims, that it has established a prima facie case of racial discrimination based on a pattern of racial segregation in LIHTC units, and that, under the circumstantial evidence framework of Village of Arlington Heights v. Metropolitan Housing Development Corp., 429 U.S. 252, 97 S.Ct. 555, 50 L.Ed.2d 450 (1977), defendants' actions have a greater effect on non-Caucasians than on Caucasians. Defendants move for judgment on the pleadings and for summary judgment, asserting that ICP lacks standing and that it is not entitled to relief on the merits.

II

The court begins by summarizing the standards under which the parties' motions are to be decided.

A

Defendants move under Rule 12(c) for judgment on the pleadings. A Rule 12(c) motion “is designed to dispose of cases where the material facts are not in dispute and a judgment on the merits can be rendered by looking to the substance of the pleadings and any judicially noticed facts.” Hebert Abstract Co. v. Touchstone Props., Ltd., 914 F.2d 74, 76 (5th Cir.1990) (per curiam) (internal citations omitted). The motion “should be granted only if there is no issue of material fact and if the pleadings show that the moving party is entitled to prevail as a matter of law.” Greenberg v. Gen. Mills Fun Grp., Inc., 478 F.2d 254, 256 (5th Cir.1973) (per curiam). The standard for deciding a motion under Rule 12(c) is the same as the one for deciding a motion to dismiss under Rule 12(b)(6). See Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 313 n. 8 (5th Cir.2002) (“A number of courts have held that the standard to be applied in a Rule 12(c) motion is identical to that used in a Rule 12(b)(6) motion.” (footnote and internal quotation marks omitted)).

B

ICP and defendants both move for summary judgment. Their summary judgment burdens depend on whether they are moving for summary judgment on a claim for which they will have the burden of proof at trial.

ICP moves for summary judgment on claims for which it will bear the burden of proof at trial. To be entitled to summary judgment, ICP “must establish ‘beyond peradventure all of the essential elements of the claim [.]’ ” Bank One, Tex., N.A. v. Prudential Ins. Co. of Am., 878 F.Supp. 943, 962 (N.D.Tex.1995) (Fitzwater, J.) (quoting Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir.1986)). “The court has noted that the ‘beyond peradventure’ standard is ‘heavy.’ ” Carolina Cas. Ins. Co. v. Sowell, 603 F.Supp.2d 914, 923–24 (N.D.Tex.2009) (Fitzwater, C.J.) (quoting Cont'l Cas. Co. v. St. Paul Fire & Marine Ins. Co., 2007 WL 2403656, at *10 (N.D.Tex. Aug. 23, 2007) (Fitzwater, J.)).

Defendants move for summary judgment on claims for which they will not bear the burden of proof at trial.⁷ They need only point to the absence of evidence of an essential element of ICP's claim. See Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once defendants do so, ICP must go beyond its pleadings and designate specific facts showing there is a genuine issue for trial. See id. at 324, 106 S.Ct. 2548; Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994) (en banc) (per curiam). An issue is genuine if the evidence is such that a reasonable jury could return a verdict in ICP's favor. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). ICP's failure to produce proof as to any essential element of a claim renders all other facts immaterial. See Trugreen Landcare, L.L.C. v. Scott, 512 F.Supp.2d 613, 623 (N.D.Tex.2007) (Fitzwater, J.). Summary judgment is mandatory if ICP fails to meet this burden. See Little, 37 F.3d at 1076.

III

A

ICP and defendants both bring motions that require that the court decide whether ICP has standing to bring suit. In ICP I the court held that it does. See ICP I, 2008 WL 5191935, at *6, *9 (denying defendants' motion to dismiss ICP's claim for lack of standing). Defendants' Rule 12(c) and summary judgment motions essentially urge the court to reconsider the analysis of ICP I, which the court declines to do. But because ICP now moves for summary judgment establishing that it has standing, the court will decide the question under the summary judgment standard.

To determine whether ICP had standing in the context of a motion to dismiss, the court presumed that the allegations of ICP's complaint were true. See ICP I, 2008 WL 5191935, at *3 (citing Garcia v. Boyar & Miller, P.C., 2007 WL 2428572, at *2 (N.D.Tex. Aug. 28, 2007) (Fitzwater, J.)). But at the summary judgment stage, “each element [of standing] must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e...