Johnson et al v. Providence Homeowners Association et al

United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
DEWANNA JOHNSON, et al.,
Plaintiffs,
v.
PROVIDENCE HOMEOWNERS
ASSOCIATION and FIRSTSERVICE
RESIDENTIAL TEXAS, INC.
Defendants.
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Civil Action No. 4:25-cv-418
Judge Mazzant
MCKINNEY HOUSING AUTHORITY,
Plaintiff,
v.
PROVIDENCE HOMEOWNERS
ASSOCIATION and FIRSTSERVICE
RESIDENTIAL TEXAS, INC.,
Defendants.
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Civil Action No. 4:25-cv-467
Judge Mazzant
DENTON HOUSING AUTHORITY,
Plaintiff,
v.
PROVIDENCE HOMEOWNERS
ASSOCIATION and FIRSTSERVICE
RESIDENTIAL TEXAS, INC.,
Defendants.
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Civil Action No. 4:25-cv-774
Judge Mazzant
MEMORANDUM OPINION AND ORDER
Pending before the Court are several motions in the above styled cases, which the Court
considers in tandem for the purpose of resolving the Motions to Dismiss in each (the “Motions”).
Having considered the Motions and the relevant pleadings, the Court finds as follows:
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• In Civil Action No. 4:25-cv-418 (“Johnson”), Defendant Providence Homeowners
Association Inc.’s Motion to Dismiss (Dkt. #17) is GRANTED in part and DENIED
in part, and Defendant FirstService Residential Texas, Inc.’s Motion to Dismiss
(Dkt. #16) is GRANTED in part and DENIED in part.
• In Civil Action No. 4:25-cv-467 (“McKinney”), Defendant Providence Homeowners
Association Inc.’s Motion to Dismiss (Dkt. #21) is GRANTED in part and DENIED
in part, and Defendant FirstService Residential Texas, Inc.’s Motion to Dismiss
(Dkt. #20) is GRANTED in part and DENIED in part.
• In Civil Action No. 4:25-cv-774 (“Denton”), Defendant Providence Homeowners
Association Inc.’s Motion to Dismiss (Dkt. #10) is DENIED, and Defendant
FirstService Residential Texas, Inc.’s Motion to Dismiss (Dkt. #11) is DENIED.
BACKGROUND
These discrimination cases arise under the Fair Housing Act. In 2022, Providence
Homeowners Association Inc.’s (“PHOA”), with the assistance of its property manager,
FirstService Residential Texas, Inc. (“FirstService”) (together with PHOA, “Defendants”),
implemented new housing rules in the Town of Providence Village, an outer-ring suburb of Dallas,
Texas (“Providence”). The rules included a ban on rentals to tenants who use government rent
subsidies to pay rent (the “Voucher Ban”):
Section 8 Housing Restriction. A Rent House may not be used for a publicly
financed or subsidized housing program, such as Section 8 Housing.1
1 The rest of the rules, as originally enacted, provided that:
One Rent House Limit. A person may only own one Rent house in the Subdivision at a time. “Rent
House” means an occupied house that is (x) not an Owner Occupied Home, or (y) a house that has
been vacant for three (3) or more months. “Owner Occupied Home” means a house in which at least
one occupant is an Owner or Owner's spouse or is related to an Owner or Owner’s spouse by blood,
marriage, adoption, or formal guardianship, and for which occupants do not pay rent . . . .
Initial Owner Occupancy Term. An Owner must reside in the home for the first twenty-four (24)
consecutive months after acquiring an ownership interest in the home before the Owner may rent or
lease the home pursuant to these Lease Rules.
(Johnson, Dkt. #11 at pp. 13–14; McKinney, Dkt. #16 at pp. 15–16; Denton, Dkt. #1 at p. 13) (ellipses in the
complaints)).
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Plaintiffs, comprised of current and former Providence tenants and two fair housing
nonprofit organizations,2 assert claims including intentional race discrimination and
disparate-impact race and sex discrimination.
In each case, Defendants moved to dismiss for failure to state a claim. Plaintiffs opposed
that relief, and a flurry of filings followed. Defendants’ primary argument is that a recent Fifth
Circuit case (addressing housing-discrimination claims based on voucher bans like the one
challenged here) requires dismissal at the pleading stage. Each Plaintiff argues that their case is
distinguishable.
I. Factual Background.
A. The Housing Choice Voucher Program
The federal Housing Choice Voucher Program pays rental subsidies to aid “low-income
families in obtaining a decent place to live” and to “promot[e] economically mixed housing.” 42
U.S.C. § 1437f(a). The voucher program is funded by the United States Department of Housing
and Urban Development (HUD) and administered by state and local public housing authorities in
accordance with HUD regulations. When a rent payment exceeds a specified percentage of a
family’s monthly income, the voucher program pays the balance.
Once admitted to the voucher program, program participants are responsible for finding a
landlord in the private rental market willing to rent to them. 24 C.F.R. § 982.302(a). Landlords who
participate in the program are responsible for screening prospective tenants and rejecting them if
2 In the Johnson case, Plaintiffs Dewanna Johnson, Sheilla Nathan, Alonzo Tutson, Evora Sykes, Chanell Hobbs,
Revisha Silas, and Evette Townsend (together, the “Johnson Plaintiffs”) bring suit. In the McKinney case, the
McKinney Housing Authority (“McKinney Housing”) brings suit. And in the Denton case, the Denton Housing
Authority (“Denton Housing”) brings suit.
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the screening reveals red flags in terms of their ability to pay rent, utility bills, care for the rental
housing, respect neighbors, avoid criminal activity, and similar issues. Id. § 982.307(a).
B. Events Leading up to the Voucher Ban
Plaintiffs allege that as the concentration of black residents increased in Providence from
2018 to 2022, so did residents’ complaints about crime, property maintenance, and property
values.3 From 2018 to 2022, the number and concentration of black residents in Providence
increased. As of 2022, Providence households were 74% white and 14% black.
Around July 2021, following an altercation between a black teenager and a white teenager,
residents allegedly began blaming voucher holders for crime and other problems in Providence,
often using language like “ghetto.” At the time, only 4% of households in providence used vouchers,
and 93% of those households were occupied by black families. Over the next few months, Cody
Watson (“Watson”), a FirstService employee, worked with PHOA’s Board of Trustees (the
“Board”) to draft new rental rules. The rules included the Voucher Ban.
The Board’s governing documents did not give it authority to enact the rules without a
favorable vote from the majority of property owners. On November 30, 2021, Jennifer Dautrich
(“Dautrich”), who served as vice president of the Board until she became president in April 2022,
proposed amending PHOA’s governing documents to give the Board the authority to adopt rental
and leasing rules unilaterally (the “Amendment”). In support of the rules, Dautrich discussed
property maintenance issues and crime in the general area, but she allegedly did not support her
3 (Johnson, Dkt. #11 at p. 7; McKinney, Dkt. #16 at pp. 8–12; Denton, Dkt. #1 at p. 2). Unless otherwise indicated, the
remaining factual background is derived from the Johnson complaint (Johnson, Dkt. #11), the McKinney complaint
(McKinney, Dkt. #16), the Denton complaint (Denton, Dkt. #31), or documents attached thereto (Johnson,
Dkt. #11-1; McKinney, Dkt. #16-1). The Plaintiffs in all cases cite to HUD’s Charge of Discrimination, which two
Plaintiffs attached to their respective complaints (Johnson, Dkt. #11-1; McKinney, Dkt. #16-1).
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conclusions with data. Plaintiffs allege that certain data Defendants later provided during a HUD
investigation was obtained post hoc and unreliable.
Voting for the Amendment opened on February 7, 2022. Plaintiffs allege that Defendants
departed from past procedure by holding the vote open indefinitely, which they had not done for
prior amendments.4 In response to questions by residents, FirstService included a “Q&A” section
in a weekly newsletter email. The Q&A stated that no lease would be terminated immediately.
Plaintiffs allege that, in response to the purported crime and maintenance issues that drove
Defendants to consider new rental and leasing rules, landlords with voucher tenants asked the
Board for additional details so they could address any problems caused by the voucher tenants.
According to Plaintiffs, the Board never responded.
While voting was ongoing, Plaintiffs allege that social media posts about voucher holders in
unofficial social media groups for Providence residents were rampant. One post showed the mug
shots and arrest record for a black man, which the post presumed was a voucher holder, with the
caption “Damn this ghetto ass neighborhood is on a roll!!! Hide Your kids cause section 8 is on the
loose!!!” Dautrich allegedly responded to the post, stating that “[f ]or some reason our zip code
has become a hub for section 8 [voucher holders],” and “only so many should be allowed in any
neighborhood.” Allegedly, she also wrote that “with all of these old charges he shouldn’t be allowed
to participate in the govt housing assistance program,” “How many people still need to vote on the
amendment?” and “we don’t have anything in place about renters in our HOA . . . . Again, people
need to vote yes.” And Although Plaintiffs do not specify when this comment occurred, Plaintiffs
4 Denton Housing further alleges that other proposed amendments during this same period that were not left open
indefinitely failed for lack of majority vote.
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allege that another Board member wrote “it’s called Section 8 . . . It seems like the neighborhood
is plagued with convicts, GET OUT!!!”5
Around April 2022, Dautrich organized a group of homeowners (including another Board
member) to form an Amendment Committee, which went door-to-door to persuade homeowners
to vote for the Amendment. Allegedly, no prior amendments prompted the formation of a special
committee, a coordinated canvasing campaign, or Defendants’ level of promotion.
C. The Amendment and Voucher Ban’s Passage
In May 2022, the Amendment received enough votes to pass, prompting Watson to close
online voting. On June 6, 2022, the Board voted unanimously to approve new rental rules, which
included the Voucher Ban. According to Plaintiffs, nothing in the rules’ text would prevent
immediate enforcement despite Defendants’ earlier representations that no lease would end
immediately. The Board announced that enforcement would begin in ninety days, and Watson
allegedly told some residents that it would begin in as little as thirty days.
Allegedly, the Board later stated that current residents could finish their lease terms (up to
twelve months), but landlords immediately started telling voucher tenants that they had to move,
leading to frantic searches for alternative housing. In the wake of the rules’ enactment, nineteen
voucher households moved away from Providence. Some of the Johnson Plaintiffs allege they had
to quickly find new schools for their children because landlords asked them to move before their
lease term ended.
5 The Johnson Plaintiffs and McKinney Housing allege that, in response to posts calling voucher holders “ghetto,”
“trash,” “lazy,” “riff raff,” and “wild animals,” Board members responded with positive reaction emojis or used
the posts to promote the Amendment. No dates for these posts or responses are provided.
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On June 8, 2022, several residents who opposed the Amendment gathered in a park to
discuss the vote. An Amendment Committee member allegedly photographed the group, which
included children, and another resident posted the photograph to social media with the caption
“Here’s a great pic depicting the very Fu*king Idiots that help to Ruin our lovely town of
Providence Village!!”
The incident was allegedly reported to Watson and the Board. Despite mediating other
neighborhood disputes involving issues like dogs barking, the only action Watson and the Board
allegedly took was to put a reminder in the weekly newsletter to uphold community standards.
Plaintiffs allege that after the Voucher Ban’s enactment, racist and sometimes threatening social
media posts continued to fill Providence’s unofficial social media groups.6 According to Plaintiffs,
Defendants had knowledge of the social media posts and discussed them.
D. PHOA Agrees to a Stay and Amends the Rental Rules
On August 5, 2022, PHOA entered into an agreement with HUD to stay enforcement of
the new rules. On June 18, 2023, Texas passed a state law barring associations from restricting
property owners’ choice of tenants based on the tenant’s source of income, which became effective
on September 1, 2023.
Plaintiffs allege that during the summer and fall of 2023, racial tensions in Providence
related to voucher holders continued to build. In July and November 2023, an alleged white
6 The Johnson Plaintiffs and McKinney Housing allege that the posts referred to voucher-holders as “wild animals”
and “lazy entitled leeching TR@SH,” while another post refenced “the hood mentality.” An unidentified person
posted an image of a black woman wearing a Halloween costume labeled “Providence Village Renter,” which also
said “sassy attitude,” “weapons,” “a section 8 voucher,” “24 hours to live,” and “PREVIOUS FELONY
CONVICTIONS INCLUDED!!!!” Denton Housing points to many of the same posts, and also alleges that on
August 11, 2022, a Board member posted that a voucher holder that spoke to the media about the Voucher Ban
“comes across as pure trash . . . .” and that that she is a “mother(technically),” and “Nor do you ask for a stranger
to babysit your children over night so you can go out. Haven’t you figured out already how you got the first 5 kids?”
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nationalist organization protested outside Providence with fliers that claimed that an overwhelming
majority of Section 8 recipients are black and bring “unimaginable violence.”
In February 2024, the Board met with a state representative, allegedly to discuss alternative
ways to get voucher holders out of Providence. The representative allegedly suggested that the
Board establish caps on community rental percentages to limit Section 8 growth.
On May 10, 2024, the Board adopted an amended set of rental rules, which omitted the
Voucher Ban but limited owners to one rental property each. The amended rules also limited rental
units to twenty-five percent of the lots in Providence. Plaintiffs allege that this rule, in practice, had
similar results as the Voucher Ban, and was enacted with the same intent. They also allege that the
amended rules violated the terms of Defendants’ agreement with HUD.
On January 14, 2025, HUD issued a Charge of Discrimination against Defendants,
Dautrich, and Watson, regarding fifty-three administrative complaints of discrimination.
McKinney Housing and Denton Housing both allege they suffered damages caused by
Defendants’ discriminatory rules. McKinney Housing alleges that two of its clients were evicted,
causing it to incur significant costs coordinating short-notice relocations, as well as labor and other
costs. Denton Housing claims, among other things, that it had to move several families outside of
Providence, diverting resources away from its routine activities. The Johnson Plaintiffs are current
or former Providence tenants who allege they were forced to move prior to the expiration of their
lease.7 They also allege that they experienced racial insults, hostility, and threats on Providence
social media groups before and after the Voucher Ban and the other rental rules were passed.
7 One of the Johnson Plaintiffs alleges she was forced to convert her “rental voucher into a homeownership voucher”
to remain in her home after unsuccessfully looking for other housing.
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II. Procedural History.
A. Johnson
The Johnson Plaintiffs filed suit on April 22, 2025 (Johnson, Dkt. #1). Defendants moved to
dismiss the case (Johnson, Dkt. #8; Dkt. #9). The Johnson Plaintiffs filed an amended complaint
(Johnson, Dkt. #11), and the Court denied the motions to dismiss as moot (Johnson, Dkt. #18;
Dkt. #19). Defendants filed new motions to dismiss, which are opposed (Johnson, Dkt. #16;
Dkt. #17; Dkt. #27; Dkt. #29). Defendants filed replies (Johnson, Dkt. #44; Dkt. #45).
B. McKinney
McKinney Housing filed suit on May 2, 2025 (McKinney, Dkt. #1). Defendants filed
motions to dismiss (McKinney, Dkt. #10; Dkt. #11). McKinney Housing amended its complaint,
and the Court denied the motions to dismiss as moot (McKinney, Dkt. #16; Dkt. #23; Dkt. #24).
Defendants filed new motions to dismiss, which are opposed (McKinney, Dkt. #20; Dkt. #21;
Dkt. #30; Dkt. #31). Defendants filed replies (McKinney, Dkt. #39; Dkt. #41).
C. Denton
Denton Housing filed suit on July 21, 2025 (Denton, Dkt. #1). Defendants moved to dismiss
the case (Denton, Dkt. #10; Dkt. #11). Denton Housing opposes the motion (Denton, Dkt. #15;
Dkt. #16). Defendants replied, and Denton Housing filed sur-replies (Denton, Dkt. #23; Dkt. #25;
Dkt. #31; Dkt. #32).
LEGAL STANDARD
I. Federal Rule of Procedure 12(b)(6).
The Federal Rules of Civil Procedure require that each claim in a complaint include a “short
and plain statement . . . showing that the pleader is entitled to relief.” FED. R. CIV. P. 8(a)(2). Each
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claim must include enough factual allegations “to raise a right to relief above the speculative level.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
A Rule 12(b)(6) motion allows a party to move for dismissal of an action when the complaint
fails to state a claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6). When considering a
motion to dismiss under Rule 12(b)(6), the Court must accept as true all well-pleaded facts in the
plaintiff’s complaint and view those facts in the light most favorable to the plaintiff. Bowlby v. City
of Aberdeen, 681 F.3d 215, 219 (5th Cir. 2012). The Court may consider “the complaint, any
documents attached to the complaint, and any documents attached to the motion to dismiss that
are central to the claim and referenced by the complaint.” Lone Star Fund V (U.S.), L.P. v. Barclays
Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010). The Court must then determine whether the
complaint states a claim for relief that is plausible on its face. “A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir. 2009)
(quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “But where the well-pleaded facts do not
permit the [C]ourt to infer more than the mere possibility of misconduct, the complaint has
alleged—but it has not ‘show[n]’—‘that the pleader is entitled to relief.’” Iqbal, 556 U.S. at 679
(quoting FED. R. CIV. P. 8(a)(2)).
In Iqbal, the Supreme Court established a two-step approach for assessing the sufficiency
of a complaint in the context of a Rule 12(b)(6) motion. First, the Court should identify and
disregard conclusory allegations, for they are “not entitled to the assumption of truth.” Iqbal, 556
U.S. at 664. Second, the Court “consider[s] the factual allegations in [the complaint] to determine
if they plausibly suggest an entitlement to relief.” Id. “This standard ‘simply calls for enough facts
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to raise a reasonable expectation that discovery will reveal evidence of the necessary claims or
elements.’” Morgan v. Hubert, 335 F. App’x 466, 470 (5th Cir. 2009) (per curiam) (citation
omitted). This evaluation will “be a context-specific task that requires the reviewing court to draw
on its judicial experience and common sense.” Iqbal, 556 U.S. at 679. Thus, “[t]o survive a motion
to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.’” Id. at 678 (quoting Twombly, 550 U.S. at 570).
II. The Fair Housing Act.
The Fair Housing Act “prohibits discrimination in the sale or rental of housing.” Avalon
Residential Care Homes, Inc. v. GE Fin. Assur. Co., No. CIV.A.3:02-CV-0631-L, 2002 WL
32359947, at *2 (N.D. Tex. Oct. 18, 2002), aff’d, 72 F. App’x 35 (5th Cir. 2003). As originally
enacted in 1968, the Act prohibited discrimination based on race, color, religion, or national origin.
City of Edmonds v. Oxford House, Inc., 514 U.S. 725, 728 n.1 (1995). Congress later “extended
coverage to persons with handicaps and also prohibited ‘familial status’ discrimination, i.e.,
discrimination against parents or other custodial persons domiciled with children under the age of
18” in 1988. Id. (citing 42 U.S.C. § 3602(k)).
Section 3604(a) of the Act makes it unlawful to “refuse to sell or rent after the making of a
bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or
deny, a dwelling to any person because of race . . . .” 42 U.S.C. § 3604(a).
Section 3604(b) makes it unlawful 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 . . . .” Id. § 3604(b).
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Section 3617 makes it unlawful “to coerce, intimidate, threaten, or interfere with any
person in the exercise or enjoyment of, . . . any right granted or protected by section . . . 3604.”
Id. § 3617.
“The provisions of 42 U.S.C. [§] 3604 are to be given broad and liberal construction, in
keeping with Congress’ intent in passing the Fair Housing Act of replacing racially segregated
housing with ‘truly integrated and balanced living patterns.’” Woods-Drake v. Lundy, 667 F.2d
1198, 1201 (5th Cir. 1982) (quoting Trafficanti v. Metro. Life Ins. Co., 409 U.S. 205, 211 (1972)).
Courts have “consistently given an expansive interpretation to the Fair Housing Act; to state a
claim under the Act, it is enough to show that race was a consideration and played some role in a
real estate transaction.” Hanson v. Veterans Admin., 800 F.2d 1381, 1386 (5th Cir. 1986) (citing
Moore v. Townsend, 525 F.2d 482, 485 (7th Cir. 1975)); Simms v. First Gibraltar Bank, 83 F.3d 1546,
1556 (5th Cir. 1996) (holding that race must be a “significant factor” motivating the adverse
housing decision (citing Polanco v. City of Austin, 78 F.3d 968, 977–78 (5th Cir. 1996)).
ANALYSIS
The central question before the Court is whether Inclusive Communities Project, Inc. v.
Lincoln Property Co., 920 F.3d 890 (5th Cir. 2019) (“Lincoln Property”) requires dismissal of
Plaintiffs’ claims at the pleading stage. In part, it does. Under Lincoln Property, Plaintiffs fail to state
a disparate-impact claim because they do not plausibly allege robust causation. Plaintiffs, however,
state a disparate-treatment claim by plausibly alleging that the Voucher Ban was motivated by race.
Other theories— unaddressed by Lincoln Property and less explored by the case law—also survive
dismissal at this stage.
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I. Plaintiffs fail to state a disparate-impact claim under Lincoln Property.
The Court first summarizes Lincoln Property’s disparate-impact analysis. Then, it applies
that analysis to the cases at hand. Ultimately, the Court finds that Lincoln Property forecloses
Plaintiffs’ disparate-impact claims because Plaintiffs do not plausibly allege that the challenged
policies caused black or female renters to be the dominant group of voucher holders prior to the
policies’ implementation, or that a change in the policies’ enforcement caused a disparate impact.
A. Disparate-Impact Liability After Lincoln Property
In Lincoln Property, a non-profit housing organization challenged a no-voucher policy for
discrimination under the Fair Housing Act. 920 F.3d at 895. The plaintiff asserted a
disparate-impact claim, alleging that the defendants’ “policy of declining to negotiate with or rent
to voucher holders disparately impacts black households as evidenced by statistics establishing that
more than 80% of the voucher holders in the Dallas area are black.” Id. at 898. The question became
whether the plaintiff viably alleged causation under Texas Department of Housing & Community
Affairs v. Inclusive Communities Project, Inc., 576 U.S. 519 (2015) (“ICP”). Id. at 901.
Prior to ICP, the Fifth Circuit adhered to “HUD’s burden-shifting approach” when
evaluating disparate-impact claims. Lincoln Property, 920 F.3d at 901. That approach required the
plaintiff to “prove a prima facie case of discrimination by showing that the challenged practice
“causes a discriminatory effect.” Id. (citing 24 C.F.R. § 100.500(c)(1)). Then, the burden shifted
to the defendant to prove that the practice is “necessary to achieve one or more of the defendant’s
substantial, legitimate, nondiscriminatory interests.” Id. (citing 24 C.F.R. § 100.500(c)(2)). Then,
the burden shifted back, requiring the plaintiff to show that the defendant’s interests could be
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served with a practice that had “a less discriminatory effect.” Id. at 901–02 (quoting 24
C.F.R. § 100.500(c)(3)).
The Fifth Circuit concluded that ICP “undoubtedly announce[d] a more demanding test”
than this Circuit previously adhered to. Id. at 902. The Fifth Circuit relied on, inter alia, the
following paragraphs from ICP to reach that conclusion:
A disparate-impact claim that relies on a statistical disparity must fail if the plaintiff
cannot point to a defendant’s policy or policies causing that disparity. A robust
causality requirement ensures that “racial imbalance does not, without more,
establish a prima facie case of disparate impact” and thus protects defendants from
being held liable for racial disparities they did not create. Without adequate
safeguards at the prima facie stage, disparate-impact liability might cause race to be
used and considered in a pervasive way and would almost inexorably lead
governmental or private entities to use numerical quotas and serious constitutional
questions then could arise.
* * *
Courts must therefore examine with care whether a plaintiff has made out a prima
facie case of disparate impact and prompt resolution of these cases is important. A
plaintiff who fails to allege facts at the pleading stage or produce statistical evidence
demonstrating a causal connection cannot make out a prima facie case of disparate
impact.
Lincoln Property, 920 F.3d at 902–03 (citation modified).
After determining that ICP compelled a stricter “robust causality” requirement, the Fifth
Circuit’s next task became determining how strict it should be. Id. at 903. To that end, the Fifth
Circuit examined four opinions addressing the issue. Id. at 903–04.
The first opinion was Ellis v. City of Minneapolis, 860 F.3d 1106, 1114 (8th Cir. 2017). Id. at
904. There, low-income housing owners alleged that the city targeted their properties through
inspections, citations for non-existent code violations, and threats to revoke their rental licenses,
disparately impacting classes protected by the FHA. Id. (citing Ellis, 860 F.3d at at 1108–09). The
Eighth Circuit found that the complaint fell short because it suggested no more than disagreement
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between the plaintiffs and the city over reasonable housing-code provisions. Id. (citing Ellis, 860
F.3d at 1113). It also found that the complaint “lacked factually supported allegations that those
provisions are arbitrary or unnecessary to health and safety.” Id. (citation modified). The Fifth
Circuit interpreted Ellis to require an “an artificial, arbitrary, and unnecessary policy causing the
problematic disparity” to “establish a prima facie disparate impact case.” Id. (citation modified).
Lincoln Property then considered the majority opinion in Reyes v. Waples Mobile Home Park
Ltd. Paternership, 903 F.3d 415 (4th Cir. 2018). Id. There, a mobile home park “began enforcing a
previously unenforced policy requiring all adult occupants” to show proof of lawful presence in the
United States before renewing their leases, under the threat of eviction. Id. (citing Reyes, 903 F.3d
at 419–20, 428). The plaintiffs alleged that this “disproportionately affected Latino families
because Latinos comprised 64.6% of the undocumented immigrant population and are ten times
more likely than non-Latinos to be adversely affected . . . .” Id. (citation modified). The Reyes
majority held that the plaintiffs stated a claim because they alleged that the “first-time enforcement
of a previously unenforced policy . . . caused a disproportionate number of Latinos to face
eviction . . . compared to the number of non-Latinos who faced eviction.” Id. (citation modified).
Conceding that the Reyes majority opinion “arguably” allows a plaintiff to state a claim by alleging
that a policy “impacts a protected class more than others,” the Fifth Circuit found that a “narrower
construction . . . [was] warranted” in light of ICP’s guidance. Id. at 906. Lincoln Property thus
construed Reyes to require not just a disparate impact, but one caused by a “change in the
defendant’s enforcement of its policy” to state a claim. Id.
The Fifth Circuit also considered the Reyes dissent. Id. at 904–05. The dissent reasoned that
the policy disparately impacted Latinos “not because they are Latino, but because Latinos are the
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predominant sub-group of undocumented aliens in a specific geographical area.” Id. at 905 (citing
Reyes, 903 F.3d at 434–35 (Keenan, J., dissenting)). Despite the “statistical imbalance [causing
Latinos to be more affected],” the dissent concluded that the plaintiffs failed to state a claim
because “all occupants of the park must comply with the policy addressing their immigration
status”—regardless of race. Id. (quoting Reyes, 903 F.3d at 434 (Keenan, J., dissenting)). Robust
causation, in Judge Keenan’s view, cannot be established by “pre-existing conditions” (such as
Latinos constituting the “predominant sub-group of undocumented aliens”) that are “not brought
about by the challenged policy.” Id.
The final opinion the Fifth Circuit considered in its mission to construe robust causation
was Oviedo Town Center, II, L.L.P. v. City of Oviedo, 759 F. App’x 828, 833–35, No. 17-14254, 2018
WL 6822693, *4 (11th Cir. Dec. 28, 2018) (per curiam) (unpublished). Id. The Fifth Circuit
highlighted that Oviedo relied on ICP to urge courts to “avoid interpreting disparate impact liability
to be so expansive to inject racial considerations into every housing decision.” Lincoln Property, 920
F.3d at 905 (citation modified). In Oviedo, developers of an affordable housing complex challenged
a city’s decision to increase utility rates, alleging the increase caused a disparate impact because
more heads of households in the complex were minorities than in the rest of the city. Oviedo, 759
F. App’x at 830, 833. In the Eleventh Circuit’s view, “if a disparate impact claim could be found on
nothing more than a showing that a policy impacted more members of a protected class than
non-members of protected classes, disparate impact liability undeniably would overburden cities
and developers.” Lincoln Property, 920 F.3d at 905 (quoting Oviedo, 759 F. App’x at 834). The
Oviedo plaintiffs failed to make a prima facie case because the utility rate increase did not robustly
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cause minorities to be a higher percentage of the heads of households in the complex relative to the
rest of the city. Id.; Oviedo, 759 F. App’x at 835.
The Fifth Circuit then set out to apply the principles it derived from these opinions.
Ultimately, it did not expressly adopt any approach—finding dismissal warranted under all of them.
Lincoln Property, 920 F.3d at 906. Even though the plaintiff alleged “a possible statistical imbalance
with the amount of voucher households in the census tract,” it provided no “facts linking the no
vouchers policy to the possible statistical disparity.” Id. (citation modified). Under both Reyes
opinions and Oviedo, the Fifth Circuit reasoned, city-level and census-level data provided by the
plaintiff did not support an inference that the challenged policy (or a change in enforcement of the
policy) caused “black persons to be the dominant group of voucher holders in the Dallas metro area
[or any other census areas discussed].”Id. at 907. The plaintiff failed to allege facts “supporting a
reasonable inference that [the defendants] bear any responsibility for the geographic distribution of
minorities throughout the Dallas area prior to the implementation of the ‘no vouchers’ policy.” Id.
And, applying Ellis, the Fifth Circuit reasoned that the plaintiff would fail to state a claim even if it
viably alleged causation because Ellis requires the policy to be artificial, arbitrary, and unnecessary.
Id. at 907. A private entity’s choice to opt out of a government program with voluntary participation
(such as Section 8)— according to Lincoln Property—cannot be artificial, arbitrary, and unnecessary
“absent the existence of pertinent, contrary factual allegations . . . .” Id. In that case, the Fifth
Circuit found none. Id. It therefore found no error in the district court’s dismissal of the claim. Id.
Judge Davis concurred in part and dissented in part. In his view, the majority’s approach to
disparate-impact cases “turns disparate-impact liability on its head” by requiring “the plaintiff to
establish that the offending policy not only had a disparate impact on a protected group, but that
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somehow the policy also created the characteristics making the protected group susceptible to the
disparate impact.” Id. at 922 (Davis, J., concurring in part and dissenting in part). He used Griggs
v. Duke Power Co., 401 U.S. 424 (1971) to illustrate the point. Id. There, an employer adopted a
policy requiring prospective employees to have a high school education or to pass standardized
general intelligence tests. Griggs, 401 U.S. at 425–26. The evidence showed that white persons
performed better on these requirements than black persons. Id. at 430. Because the employer was
unable to show that these requirements were related to job performance, the Supreme Court found
them unlawful. Id. at 433–36. In Judge Davis’s view, the majority’s holding would have required
“the plaintiffs in Griggs to show that their employer’s policy caused Black persons not to have a
high school education” to state a claim. Lincoln Property, 920 F.3d at 922 (Davis, J., concurring in
part and dissenting in part).
In its defense, the majority reasoned that permitting disparate-impact liability based on a
showing that a voucher ban disparately impacts minorities “would effectively mandate a landlord’s
participation in the voucher program any time the racial makeup of multi-family rental complex
does not match the demographics of a nearby metropolitan area.” Id. at 909 (majority opinion). In
the majority’s view, “if such a burdensome and extreme mandate were to be attempted, it should
be expressly legislated by Congress . . . .” Id.
The petition for rehearing en banc was denied. Inclusive Cmtys. Project, Inc. v. Lincoln Prop.
Co., 930 F.3d 660 (5th Cir. 2019) (“Lincoln Property II”). The dissenting judges read Lincoln
Property to create “an impossible pleading standard.” Id. at 661 (Haynes, J., dissenting). In their
view, the majority overstated the robust causation requirement imposed by ICP, a case decided at
the summary judgment stage, and ignored Lincoln Property’s Rule 12(b)(6) posture. Id. at 664
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(Haynes, J., dissenting). The dissent casts Lincoln Property’s conclusion—that a plaintiff must
allege either that a policy caused a pre-existing condition or that a change in enforcement caused a
disparate impact—as unsupported by precedent. Id. at 665 (Haynes, J., dissenting).
Whether the majority got it right is not for this Court to decide. Accordingly, it proceeds to
evaluate whether Plaintiffs state a disparate-impact claim under Lincoln Property. In the wake of
Lincoln Property, a plaintiff must plausibly allege that a challenged policy robustly causes a
discriminatory effect to state a prima facie case. 920 F.3d at 902. The burden then shifts to the
defendant, providing it “leeway to state and explain the valid interests served by the defendant’s
policies.” Id. (citation modified). 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. at 906 (citation modified).8
B. Application of Lincoln Property to Plaintiffs’ Disparate-Impact Claims
The Johnson Plaintiffs and McKinney Housing (for this section, the “Disparate-Impact
Plaintiffs”)9 fail to plausibly allege a prima facie disparate-impact claim for two main reasons. First,
they do not plausibly allege that the challenged policies caused black or female tenants to be the
predominant group of voucher holders in Providence. Second, they do not plausibly allege that a
change in enforcement of the policies disparately impacted black or female tenants. As a result,
8 In an unpublished opinion applying Lincoln Property, the Fifth Circuit stated that it “goes without saying that, at the
Rule 12(b)(6) stage, [the] plaintiff need only plausibly allege” the “first prong” of the burden-shifting framework.
Inclusive Cmtys. Project, Inc. v. Heartland Cmty. Ass’n, Inc., 824 F. App’x 210, 214 (5th Cir. 2020) (per curiam)
(unpublished). Lincoln Property, however, cited the district court’s findings under the “third step” of the
burden-shifting framework without disapproval—even though the case was also decided at the Rule 12(b)(6) stage.
See Lincoln Property, 920 F.3d. at 906 (noting the district court’s finding that the plaintiff’s complaint identified the
defendants’ business and financial concerns associated with accepting voucher holders). This Court need not
determine whether this lack of disapproval amounts to an endorsement because it dismisses the disparate-impact
claims based on the first step of the framework.
9 Denton Housing does not pursue a disparate-impact claim.
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they do not plausibly allege robust causation under Lincoln Property. Accordingly, dismissal of each
disparate-impact claim is required.
1. Plaintiffs fail to plausibly allege robust causation under the Reyes
dissent, Oviedo, and Ellis as interpreted by Lincoln Property.
The Court places three of the four opinions the Fifth Circuit considered in Lincoln Property
in the same bucket because they share a common element that is dispositive here. Namely, whether
the challenged policy caused “black persons [or women] to be the dominant group of voucher
holders” in Providence. Lincoln Property, 920 F.3d at 907. The arguments presented to the contrary
lack merit. The Disparate-Impact Plaintiffs argue that:
Unlike in Lincoln Property, the prior PHOA policy allowed leasing to voucher
tenants, and as a result, a small number of voucher tenants leased homes in PHOA.
The voucher tenants in PHOA slowly began to increase. Unlike in Lincoln Property,
PHOA’s prior leasing policy did cause the number of voucher tenants to be present
in PHOA and it was not coincidental. Only after the number of Black voucher
residents increased in PHOA did the PHOA change its leasing rules to enact the
Unlawful Policy . . . The prior PHOA policy caused the geographic location of the PHOA
voucher group to be in PHOA because the prior policy allowed for the leasing of tenants,
including voucher tenants.
(Johnson, Dkt. #27 at p. 23 (emphasis added) (citation omitted); McKinney, Dkt. #30 at p. 25
(emphasis added) (citation omitted)).
However, the question is not whether Defendants caused voucher holders to live in
Providence, but whether the challenged policy caused an FHA-protected class—here, black or
female tenants—to be the “dominant group of voucher holders . . . .” Lincoln Property, 920 F.3d at
907 (emphasis added). There are no allegations that Defendants bear any responsibility for the
“racial composition” of voucher holders in Providence “before [Defendants] implemented their
‘no voucher’ policy.” Id. That view of robust causation would have allowed the plaintiff in Lincoln
Property to state a claim because the defendant there also lacked a policy against voucher-holder
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rentals before implementing one. This Court will not reinterpret Lincoln Property, so this argument
is unavailing under the Fifth Circuit’s interpretation of the Reyes dissent and Oviedo.
The Court turns to Ellis. As to that opinion, the question before the Court is whether
Lincoln Property’s view of Ellis allows a plaintiff to state a claim by plausibly alleging that an
artificial, arbitrary, and unnecessary policy caused a disparate impact. In other words, whether
Lincoln Property excuses a plaintiff challenging an artificial, arbitrary, and unnecessary policy from
plausibly alleging that defendants caused a protected class to be the “predominant” group of
voucher holders. See id. at 907. It does not. Instead, for the reasons that follow, the Court concludes
that the Fifth Circuit read Ellis to impose an additional requirement.
First, Lincoln Property itself holds that Ellis requires the challenged policy to be artificial,
arbitrary, and unnecessary “even if causing a ‘problematic disparity.’” Id. (emphasis added). The
Court is skeptical that the Fifth Circuit intended to imbue “causing” with a lighter standard than
the one preceding it. When the Fifth Circuit discussed a variance in the robust causation
requirement, it made that variance explicit. See id. at 906 (explaining that, under the Reyes majority
test, a mere disparate impact can show robust causation, but only if caused by a “change” in the
challenged policy’s enforcement (emphasis omitted)). If the Lincoln Property majority intended to
alleviate plaintiffs using the Ellis test from plausibly alleging that the challenged policy caused
FHA-protected classes to be the dominant group of voucher holders, it could have added a similar
qualifier. Thus, the Court is unpersuaded that a mere disparate impact—without a plausible
allegation that the policy caused a protected class to be the dominant group of voucher holders— is
sufficient to state a claim under the Fifth Circuit’s view of Ellis.
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Second, persuasive authority supports the Court’s conclusion. In Inclusive Communities
Project, Inc. v. Heartland Community Association, Inc., 824 F. App’x 210, 217 (5th Cir. 2020) (per
curiam) (unpublished), the Fifth Circuit again addressed robust causation in a housing
discrimination case challenging a voucher ban. Like the Court does here, Heartland read Lincoln
Property to “require either [that]: a change in the defendant’s enforcement of a policy caused a
disparate impact; or [that] a challenged policy caused the relevant minority group to be the
dominant group of those affected by the policy.” Id. at 217 (emphasis added) (citation modified)
(first citing Lincoln Property, 920 F.3d at 906; then citing Lincoln Property, 920 F.3d at 921 (Davis,
J., concurring in part and dissenting in part)). Judge Davis interpreted Lincoln Property the same
way—“to require the plaintiff in a disparate-impact claim under the FHA to establish that the
challenged policy was previously unenforced or that the challenged policy caused a ‘pre-existing
condition.’” Lincoln Property, 920 F.3d at 921 (Davis, J., concurring in part and dissenting in part)
(emphasis added). Judge Haynes’s dissent to the denial of rehearing en banc also supports the
Court’s conclusion that alleging an artificial, arbitrary, and unnecessary policy caused a disparate
impact is insufficient to state a disparate-impact claim in this Circuit. See Lincoln Property II, 930
F.3d 660 (Haynes, J., dissenting) (“Requiring a change in enforcement to prove disparate impact
would eliminate disparate impact liability for those entities that, at the outset, institute a policy that
is artificial, arbitrary, or unnecessary, and also causes a statistical disparity.” (emphasis added)).
Although non-binding, these authorities provide additional support for the Court’s
conclusion that an artificial, arbitrary, and unnecessary policy coupled with a disparate impact is
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insufficient to state a disparate-impact claim under Lincoln Property.10 Rather, a plaintiff must
plausibly allege that that the policy caused a protected class to be the dominant group of voucher
holders, and, under Ellis, must also allege that the policy was artificial, arbitrary, and unnecessary.
Here, the Disparate-Impact Plaintiffs do not clear the first hurdle. While they plausibly allege that
Defendants’ policy affected more black and female tenants than white and male tenants because,
comparatively, more black and female tenants use vouchers to pay rent, this is insufficient under
Lincoln Property.
In sum, Plaintiffs do not state a claim under the Fifth Circuit’s interpretation of the Reyes
dissent, Oviedo, or Ellis because they do not plausibly allege that the challenged policies caused
black or female tenants to be the dominant group of voucher holders in Providence. Lincoln
Property, 920 F.3d at 906–07. Like the district court in Heartland, this Court finds that the “the
statistical racial disparities relied upon by [the Disparate-Impact Plaintiffs] preexisted the
enactment of the [challenged policies] and, therefore, cannot be shown to have been caused by
[them].” Inclusive Cmtys. Project, Inc. v. Heartland Cmty. Ass’n, Inc., 399 F. Supp. 3d 657, 668 (N.D.
Tex. 2019), aff’d, 824 F. App’x 210 (5th Cir. 2020).
10 An additional persuasive authority supports the Court’s conclusion that plausibly alleging a disparate impact was
caused by an artificial, arbitrary, and unnecessary policy is insufficient to state a claim. The Eastern District of
Louisiana applied Lincoln Property in a case challenging an occupancy limit as discriminatory towards families with
children. Treece v. Perrier Condo. Owners Ass’n, Inc., 519 F. Supp. 3d 342, 345, 352 (E.D. La. 2021), as modified by,
569 F. Supp. 3d 347 (E.D. La. 2021). The court found that the policy had a substantial discriminatory effect on
families with children. Id. at 346. Nevertheless, it held that the plaintiffs failed to make a prima facie disparate-impact
case because they failed to show either that a change in enforcement caused a disparate impact, or that the policy
caused families with children to be the predominant group of households to have more members. Id. at 362–63.
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2. Plaintiffs fail to state a claim under the Reyes majority opinion as
interpreted by Lincoln Property.
Applying the Fifth Circuit’s interpretation of Reyes, the Disparate-Impact Plaintiffs cannot
state a claim because they do not plausibly allege a change in the challenged policy’s enforcement.
To avoid this result, they argue that “[p]rior to the PHOA ban on vouchers, leasing to voucher
tenants was permitted in the PHOA under their rules,” making the Voucher Ban a change in
enforcement.11 The argument fails, however, because it conflates a change in policy with a change
in its enforcement. After all, the Disparate-Impact Plaintiffs do not allege that the Voucher Ban was
once administered one way and now administered a different way (like the plaintiff in Reyes). See
Lincoln Property, 920 F.3d at 904. Instead, they argue that the Voucher Ban once did not exist and
now does. If this alone were sufficient, plaintiffs could plausibly allege a change in enforcement any
time a new policy is issued. Lincoln Property does not endorse that result. See id. at 904–09.
Accordingly, Plaintiffs fail to state a claim under the Fifth Circuit’s interpretation of Reyes.
To summarize, the Disparate-Impact Plaintiffs do not state a claim under Lincoln Property
because they do not plausibly allege robust causation. Specifically, they do not plausibly allege that
the challenged policies caused black or female tenants to be the predominant group of voucher
holders in Providence, or that a change in enforcement of the challenged policies caused a disparate
impact. As a result, the Court will dismiss the disparate-impact claims in Johnson and McKinney.
II. Plaintiffs state a disparate-treatment claim.
The Fair Housing Act makes it unlawful to “refuse to sell or rent after the making of a bona
fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny,
a dwelling to any person because of” race. 42 U.S.C. § 3604(a). The Supreme Court has interpreted
11 (Johnson, Dkt. #27 at p. 22; McKinney, Dkt. #30 at p. 24).
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this section as a prohibition on disparate treatment that parallels Title VII and the Age
Discrimination in Employment Act (ADEA). ICP, 576 U.S. at 534–35.
As to Plaintiffs’ disparate-treatment claims, the principal question before the Court is
whether a racially motivated voucher ban can give rise to disparate-treatment liability even when it
bans voucher holders of all races. If so, the next question is whether Plaintiffs plausibly allege that
race motivated Defendants’ implementation of the Voucher Ban here. Ultimately, the Court finds
that the answer to both questions is yes. To begin, the Court returns to Lincoln Property to analyze
why the plaintiff failed to state a disparate-treatment claim there. Then, the Court explains why
Lincoln Property does not compel dismissal here.
A. Disparate-Treatment Liability After Lincoln Property
In Lincoln Property, the Fifth Circuit considered two different disparate-treatment theories
arising from a voucher ban at the pleading stage. The first theory was asserted against a property
management company and the property owners it serviced. Lincoln Property, 920 F.3d at 911. After
those defendants enacted a voucher ban, the plaintiff nonprofit housing organization offered to
serve as sublessor or guarantor for its low-income clients. Id. at 898. The defendants allegedly
negotiated with first-time renters, renters with low credit scores, students subsidized by parents,
and corporations subleasing to employees—but refused to do the same with the plaintiff, who had
predominantly black clients. Id. at 911. That conduct, according to the plaintiff, raised an inference
of intentional race discrimination. Id.
The Fifth Circuit disagreed, refusing to “automatically view” a no-voucher policy as a “no
black tenants” policy without well-pleaded factual support. Id. (citation modified). Differential
treatment between those subsidized by the government and those subsidized by other
sources—like students subsidized by parents—was “merely consistent with liability” and did not
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raise a “reasonable, rather than speculative, inference of intentional discrimination.” Id. (citation
modified). Further, the Fifth Circuit reasoned that:
Nor is it plausible, based solely on [the plaintiff’s] conclusory assertions, that the
proposed subleases and guarantees render [the plaintiff ] and its government
voucher beneficiaries sufficiently similarly situated to business entities subleasing
rental units to their employees, and credit-worthy parents serving as guarantors for
students, such that [the defendants’] lack of response is indicative of intentional
race discrimination.
Id.
For those reasons, the plaintiff’s first theory of disparate treatment fell short at the pleading
stage. Id. The second disparate-treatment theory was asserted only against the property manager,
Lincoln. Id. The Fifth Circuit viewed this theory more favorably because the plaintiff alleged that
Lincoln refused “to negotiate with or rent to otherwise qualified voucher households in majority
white areas while, at the same time, negotiating with and renting to voucher holders in majority
minority areas . . . .” See id. Yet, the plaintiff failed to state a claim because its allegations “were
insufficiently clear to provide the necessary certainty.” Id. at 911. Specifically, the allegations did
not make it clear whether Lincoln accepted vouchers in predominantly minority areas because it
was required to do so by law or contract. Id. “On such a bare showing,” the Fifth Circuit found “no
error in the district court’s dismissal of the claim.” Id. at 912. Thus, both disparate-treatment
theories failed at the pleading stage, with no noted dissents.
Accordingly, in the wake of Lincoln Property, the McDonnell Douglas burden-shifting
evidentiary standard in disparate-treatment cases under § 3604(a) requires the plaintiff to first:
allege facts supporting a prima facie case of (1) membership in protected class, (2)
that the plaintiff applied and was qualified to rent or purchase housing; (3) that the
plaintiff was rejected, and (4) that the housing thereafter remained open to similarly
situated applicants after the plaintiff was rejected.
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Id. at 910 (first citing Petrello v. Prucka, 484 F. App’x 939, 942 (5th Cir. 2012) (per curiam)
(unpublished); then citing Graoch Assocs. # 33, L.P. v. Louisville/Jefferson Cnty. Metro Hum. Rels.
Comm’n, 508 F.3d 366, 371 (6th Cir. 2007)).12
If a prima facie case is alleged, a defendant may “offer a legitimate, non-discriminatory
reason for the rejection.” Id. at 911. If it does, the “burden shifts back to the plaintiff to rebut the
reason offered . . . by showing it is a pretext for discrimination.” Id.
B. Application of Lincoln Property to Plaintiffs’ Disparate-Treatment Claims
The first issue is whether Defendants correctly argue that they cannot be liable for disparate
treatment because the Voucher Ban excluded voucher holders of all races. Ultimately, the Court
disagrees. The next issue is whether Plaintiffs plausibly allege that race motivated the Voucher Ban
here. The Court finds that they do. Thus, as to disparate treatment, the Motions will be denied.
1. Defendants may be liable for disparate treatment despite the neutral
application of the Voucher Ban.
Defendants principally rely on the unpublished Heartland decision to argue dismissal is
required. In that case, a plaintiff challenging a voucher ban under a disparate-treatment theory
failed to state a claim at the Rule 12(b)(6) stage. Heartland, 824 F. App’x at 220–21. When
addressing the similarly situated element of disparate treatment, Heartland stated the following:
12 Petrello cites Lindsay v. Yates, 498 F.3d 434, 438–39 (6th Cir. 2007) when explaining the McDonell Douglas
framework. Lindsay describes the burden-shifting framework as follows:
First, a plaintiff who alleges discrimination on the basis of race must make out a prima facie case by
showing (1) that he or she is a member of a racial minority, (2) that he or she applied for and was
qualified to rent or purchase certain property or housing, (3) that he or she was rejected, and (4) that
the housing or rental property remained available thereafter. If the plaintiff satisfies the prima facie
requirements, the burden shifts to the defendant to produce evidence of a legitimate,
non-discriminatory reason for rejecting the plaintiff. Finally, the burden shifts back to the plaintiff to
show that the defendant’s proffered non-discriminatory reason is a pretext.
498 F.3d at 438–39 (citation modified).
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As an initial matter, [the plaintiff ] does not satisfy the elements required to state a
prima facie disparate-treatment claim: it fails to plausibly allege any Heartland
housing would be available to similarly situated renters after the policy’s enactment
because no voucher holders of any race will be able to rent in Heartland. [The plaintiff’s]
allegation that 32% of black and 53% of white renter households will still be able to afford
to rent in Heartland, despite the policy, does not satisfy the fourth element of the prima
facie test because these renters are dissimilar from voucher holders: they can afford rent
without a voucher.
Id. at 220 (emphasis added).
Relying on this language, Defendants argue that all three cases must be dismissed here
because the Voucher Ban excluded voucher holders of all races. Defendants are wrong for two main
reasons. First, even if Defendants correctly read Heartland to require that result, Lincoln Property
does not. The Court is bound to follow Lincoln Property over an unpublished decision. Second, Fifth
Circuit and Supreme Court authority indicate that the prima facie elements are not
dispositive— particularly at the pleading stage.
a. Lincoln Property rejects Defendants’ argument.
Lincoln Property does not compel dismissal because the Plaintiffs in this case do not ask the
Court to equate a facially neutral policy’s disparate impact with a discriminatory motive. It is true,
as Defendants highlight across all six of their motions, that Lincoln Property states the
disparate-treatment pleading standard in a way that, out of context, suggests a voucher holder can
never state a claim when the defendant applies a voucher ban neutrally. See Lincoln Property, 920
F.3d at 910 (“[T]o state a claim for disparate treatment under § 3604(a), the plaintiff must allege
facts supporting a prima facie case [including that] housing . . . remained open to similarly situated
applicants after the plaintiff was rejected.” (emphasis added)). But when considering the full opinion,
the Court disagrees that Lincoln Property immunizes defendants from liability when they make
housing unavailable to all races through a racially motivated policy.
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In Lincoln Property, the district court dismissed the plaintiff’s disparate-treatment claims
because the defendants refused to rent to or negotiate with voucher holders “regardless of race or
color,” leading it to conclude that the plaintiff’s true issue was “with the existence of [the
defendant’s] policy, which is indicative of disparate impact rather than disparate treatment.” Id. at
909. For that reason, the district court deemed the disparate-treatment claims “mislabeled.” Id.
The Fifth Circuit affirmed the dismissal of the claims but disapproved the “mislabeling”
analysis. Id. at 910. The theory was not mislabeled, the Fifth Circuit reasoned, because it alleged
that the “true rationale for the facially neutral ‘no vouchers’ policies is the race of the voucher
tenants, not the means (vouchers) by which rent is paid.” Id. The Fifth Circuit explained that “so
long as the requisite discriminatory intent is present, a seemingly race-neutral policy can give rise
to actionable disparate treatment.” Id. (first citing ICP, 576 U.S. at 533; then citing Greater New
Orleans Fair Housing Action Ctr. v. St. Bernard Par., 641 F. Supp. 2d 563 (E.D. La. 2009)).
Here, the Court is unpersuaded that dismissal is required because Defendants’ logic
imitates the very reasoning the Fifth Circuit rejected. Id. at 909–10 (explaining that a
disparate-treatment claim in a voucher-ban case is potentially viable when it alleges the “true
rationale” is “the race of the voucher tenants, not the means (vouchers) by which rent is paid.”).
Instead, what proved fatal to the plaintiff in Lincoln Property was that it impermissibly equated a
voucher ban with a no-black-tenant policy:
In this instance, the vague and conclusory allegations of disparate treatment that
[the plaintiff ] asserts collectively against [defendants] are legally insufficient to
support a reasonable inference of intentional race discrimination. In short, [the
plaintiff ] essentially asks the panel to automatically view a “no voucher tenants”
policy as synonymous with a “no black tenants” policy without providing adequate
(well-pleaded) factual support for that linkage (as opposed to conclusory statements
and assertions based on speculation, assumptions, and stereotypes).
Id. at 911 (emphasis added).
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This analysis suggests that the Fifth Circuit’s central focus was determining whether a
reasonable inference of intentional race discrimination was alleged—not whether the plaintiff
satisfied a formulaic application of the prima facie case at the pleading stage. The Fifth Circuit
could have affirmed dismissal on the fact that the defendants “refused to rent to or negotiate with
Section 8 voucher holders regardless of race or color,” but went out of its way to reject that analysis.
Id. at 909–10 (citation modified).
Further, the Court finds the Fifth Circuit’s reliance on St. Bernard when cautioning district
courts about the “mislabeling” issue instructive. Id. at 910. In that case, the plaintiff successfully
challenged “a moratorium on the construction of all multi-family housing . . . .” St. Bernard, 641 F.
Supp. 2d at 566 (emphasis added). Even though the policy made multi-family housing unavailable
to all races, the court proceeded to analyze whether “race was a consideration and played some role
in the real estate transaction.” Id. at 569 (citing Hanson, 800 F.2d at 1386). To that end, the St.
Bernard court applied a non-exhaustive list of discriminatory-intent factors derived from Village of
Arlington Heights v. Metropolitan Housing Development Corp., 429 U.S. 252, 266–68 (1977).13
Lincoln Property also cites Arlington Heights with approval. Lincoln Property, 920 F.3d at 910.
Arlington Heights, for its part, cautions that determining whether race motivated a policy is a
“sensitive inquiry.” 429 U.S. at 266. The key question is “whether racially discriminatory intent
existed.” Id. at 268. Lincoln Property’s reliance on St. Bernard and Arlington Heights indicates that
13 Arlington Heights provides that whether an adverse housing decision “bears more heavily on one race than
another . . . may provide an important starting point.” 429 U.S. at 266. Other relevant factors include the historical
background of the decision, the specific sequence of events leading up to the challenged decision, procedural
departures from the usual decision-making process, substantive departures, and the legislative or administrative
history of the decision. Id. at 266–68.
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the Fifth Circuit did not foreclose challenges to neutral policies when adequate factual support
bolsters allegations that those policies were motivated by race.
b. Other Fifth Circuit and Supreme Court precedent rejects
Defendants’ argument.
The Court is unpersuaded that the Fifth Circuit imposed a heightened pleading standard
in housing discrimination cases that raise plausible allegations that race was the true rationale
animating a voucher ban’s enactment. Rather, like the Fifth Circuit reminded courts in a
discrimination case decided the same year as Lincoln Property, the relevant inquiry at this stage is
whether the plaintiff sufficiently pleads “the ultimate elements of a [disparate-treatment] claim.”
Cicalese v. Univ. of Tex. Med. Branch, 924 F.3d 762, 768 (5th Cir. 2019).
In Cicalese, the Fifth Circuit clarified that the burden shifting framework may be “helpful
to reference” when analyzing the plausibility of a disparate-treatment claim that relies on
circumstantial evidence, but that courts “err[] by requiring a plaintiff to plead something more than
the ultimate elements of [the] claim.” Id. at 766–67 (citation modified). The Fifth Circuit therefore
rejected a district court’s analysis that “scrutinize[ed] whether . . . fellow employees were really
similarly situated . . . and whether derogatory statements . . . amounted to stray remarks” at the
pleading stage. Id. at 768 (citation modified). Those matters, in the Fifth Circuit’s view, were “more
suited to the summary judgment phase.” Id. (collecting cases). As a result, Cicalese held that the
plaintiffs’ allegations that “various actions against them were motivated by anti-Italian
bias” alleged “sufficient facts to nudge their claims across the line from conceivable to plausible.”
Id. at 768 (citation modified). See also Jenkins v. City of Dallas, 717 F. Supp. 3d 528, 537 (N.D. Tex.
2024) (“[T]he plausibility of a discrimination claim does not hinge on alleging a comparator” (first
citing Cicalese, 924 F.3d at 768; then citing Raj v. La. State Univ., 714 F.3d 322, 331 (5th Cir. 2013)).
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In Raj, a Title VII case, the Fifth Circuit held that a district court erred by “improperly
substituting” the prima facie “evidentiary standard for a pleading a requirement.” 714 F.3d at 331
(citation modified). The Fifth Circuit reasoned that the “ultimate question” in a Title VII
disparate-treatment claim “remains whether a defendant took the adverse employment action
against a plaintiff because of her protected status.” Id. (citation modified). It thus held that requiring
a “showing of each prong of the prima facie test” at the pleading stage was improper. Id. The
plaintiff in that case still failed to state a claim, but the Fifth Circuit’s analysis casts doubt on
Defendants’ contention that a comparator allegation is required to state a disparate-treatment
claim. The Fifth Circuit reasoned that the plaintiff “did not allege any facts, direct or
circumstantial, that would suggest [the defendant’s] actions were based on . . . race or national
origin or that [the defendant] treated similarly situated employees of other races or national origin
more favorably.” Id. (emphasis added).14
That analysis helps demonstrate that the requirements to state a disparate-treatment claim
are flexible and context-dependent. Lincoln Property’s application of the “similarly situated”
element at the pleading stage makes sense in the context of that case because the plaintiff there
relied on a policy’s disparate impact without plausibly alleging that race motivated its enactment.
See id. at 911. Allowing the case to proceed under those circumstances would have exposed a
defendant to liability for the “geographic distribution of minorities,” the result the Fifth Circuit
14 See also Sanchez v. Chevron N. Am. Expl. & Prod. Co., No. 20-30783, 2021 WL 5513509, at *5 (5th Cir. Nov. 24, 2021)
(per curiam) (unpublished) (“A complaint need not allege ‘each prong of the prima facie test for disparate treatment’
in order to overcome a Rule 12(b)(6) motion; to support a disparate treatment claim under Title VII, though, it must
plausibly set out facts that the ‘defendant took the adverse employment action against a plaintiff because of her
protected status’” (quoting Raj, 714 F.3d at 331)); Thomas v. Dall. Indep. Sch. Dist., No. 23-10882, 2024 WL 2874367,
at *3–4 (5th Cir. June 7, 2024) (unpublished) (explaining, in an ADEA case, that the 12(b)(6) standard requires
allegations supporting the two ultimate elements of disparate treatment, while McDonnell Douglas goes to the
“ultimate proof” that could show disparate treatment).
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sought to avoid. Lincoln Property, 920 F.3d. at 907. The Court does not construe Lincoln Property’s
recitation of the prima facie case or its analysis of the comparator allegations to eliminate
disparate-treatment liability any time a voucher ban affects all races. Like the Fifth Circuit did in
Raj, Lincoln Property describes the “burden-shifting . . . standard established for discrimination
cases” based on circumstantial evidence as an “evidentiary” one. Id. at 910 (first citing Petrello,
484 F. App’x at 942; then citing Mitchell v. Shane, 350 F.3d 39, 47 (2d Cir. 2003); and then citing
Cox v. Phase III, Invs. No. CIV.A. H-12-3500, 2013 WL 3110218, at *8 (S.D. Tex. June 14, 2013)).
Supreme Court authority suggests the Fifth Circuit’s wording was intentional. In
Swierkiewicz v. Sorema North America, the Supreme Court held that the “prima facie case under
McDonnell Douglas . . . is an evidentiary standard, not a pleading requirement.” 534 U.S 506, 510
(2002). And in a recent Title VII discrimination case, the Supreme Court cited Swierkiewicz when
reminding courts not to perform “inflexible applications” of the prima facie case in
disparate-treatment cases. Ames v. Ohio Dep’t of Youth Servs., 605 U.S. 303, 310 (2025). It explained
that the “precise requirements of a prima facie case can vary depending on the context and were
never intended to be rigid, mechanized, or ritualistic.” Id. at 310–11 (citation modified). The
Swierkiewicz case faced the question of “whether a complaint in an employment discrimination
lawsuit must contain specific facts establishing a prima facie case of discrimination under the
[McDonnell Douglas] framework.” 534 U.S. at 508. It held that “an employment discrimination
complaint need not include such facts and instead must contain only ‘a short and plain statement
of the claim showing that the pleader is entitled to relief.’” Id. (quoting FED. R. CIV. P. 8(a)(2)).
This Court will likewise treat the burden shifting framework according to its evidentiary nature.
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Defendants ask the Court to distinguish Swierkiewicz and Cicalese because they are not
housing discrimination cases like Lincoln Property. The Court sees no reason to do so. Lincoln
Property was concerned with limiting disparate-impact liability to “avoid the serious constitutional
questions that might arise under the FHA, for instance, if such liability were imposed based solely
on a showing of a statistical disparity.” Lincoln Property, 920 F.3d at 902 (emphasis added) (quoting
ICP, 576 U.S. at 540); see id. at 909 (explaining that its ruling avoids “mandat[ing] a landlord’s
participation in the voucher program any time the racial makeup of [a] multi-family rental complex
does not match the demographics of a nearby metropolitan area.”); see also id. at 901 (“[T]he
voluntary nature of landlord participation in the voucher program does not render it immune from
liability if actionable discrimination under the FHA is established.”). The opinion expressed no
intent to impose a higher pleading standard than that imposed in other disparate treatment cases.
In fact, when explaining that disparate-treatment claims remain viable even when a plaintiff
challenges a facially neutral voucher ban, Lincoln Property references the employment
discrimination context. Id. at 910 (“[A neutral action] is often [at issue] in employment
discrimination cases where the proffered (neutral) rationale for an adverse employment action
allegedly is pretext for discrimination.”). After all, the text of both the Fair Housing Act and Title
VII prohibits adverse actions taken “because of” race. ICP, 576 U.S. at 535 (citation modified).
Defendants’ authorities do not support the conclusion that the disparate-treatment prima
facie elements are dispositive at the pleading stage. Mandawala v. Struga Management considered a
district court’s findings after a bench trial. No. 21-50644, 2023 WL 2712500, at *2 (5th Cir. Mar.
30, 2023) (unpublished) (per curiam). And Crain v. City of Selma considered a district court’s order
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granting summary judgment. 952 F.3d 634, 640 (5th Cir. 2020). Thus, these cases do not compel
Rule 12(b)(6) dismissal.
Moreover, a heightened pleading standard requiring factual allegations that housing
remained open to similarly situated persons in all disparate-treatment cases would eliminate
liability when a defendant refuses “to rent or negotiate with Section 8 voucher holders regardless
of race or color”—the very analysis the Fifth Circuit rejected in Lincoln Property. See id. at 909–10
(footnote omitted). Such a standard would also cast doubt on Lincoln Property’s reminder that a
neutral policy can give rise to disparate-treatment liability. See id. at 910. Without binding precedent
compelling a heightened pleading standard, the Court will not impose one here.
Here, unlike in Lincoln Property, plausible allegations that race motivated a neutral policy
exist. Moreover, the plaintiff’s clients in Lincoln Property and the tenants in this case differ
significantly. The former were rejected or wait-listed applicants who wanted to live in the properties
Lincoln managed, but the tenants in this case already qualified to live in Providence—and were
allegedly forced to leave their homes before the expiration of their leases. Accordingly, the Court
will not apply a rigid, formulaic application of the prima facie case in the materially different context
in which these cases arise. See Ames, 605 U.S. at 311 (explaining that the disparate-treatment prima
facie case can vary depending on the context and was never intended to be “rigid, mechanized, or
ritualistic” (quoting Swierkiewicz, 534 U.S. at 512)).15 The Court therefore proceeds to analyze
whether Plaintiffs plausibly allege that Defendants implemented the Voucher Ban because of the
race of the voucher holders rather than the means they use to pay rent.
15 Justice Thomas, who authored Swierkiewicz for a unanimous Supreme Court, recently observed that the McDonnell
Douglas framework has no basis in statutory text and was originally developed as an evidentiary tool for bench trials.
Ames, 605 U.S. 303, 319–20 (Thomas, J., concurring).
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2. Plaintiffs plausibly allege disparate-treatment claims.
After reviewing each complaint individually, the Court finds that Plaintiffs state plausible
disparate-treatment claims. Plaintiffs do not ask this Court to automatically equate the Voucher
Ban with a no-black-tenant policy based solely on disparate impact. Rather, Plaintiffs plausibly
allege facts giving rise to a reasonable inference that race “motivated” the Voucher Ban’s
enactment despite its neutral application. Lincoln Property, 920 F.3d at 909–11; see also Arlington
Heights, 429 U.S. at 266–68. As a result, Rule 12(b)(6) dismissal is unwarranted.
As an important starting point, Plaintiffs have plausibly alleged that the Voucher Ban had a
substantially disparate impact on black tenants. Lincoln Property, 920 F.3d at 910 (quoting with
approval Arlington Heights’s statement that disparate impact may provide an important starting
point when analyzing discriminatory intent). Providence’s voucher-holder population was 93%
black when Defendants implemented the Voucher Ban. And, here, the voucher holders are not
rejected applicants like in Lincoln Property, but a predominantly black population that already lived
in Providence and was allegedly forced to leave.
Further, Plaintiffs’ allegations detail events leading up to the Voucher Ban that suggest race
motivated its enactment, including that Board members participated in discussions using racially
coded language. See St. Bernard, 641 F. Supp. 2d at 571 (“The references to ‘ghetto,’ ‘crime,’
‘blight,’ and ‘shared values’ are similar to the types of expressions that courts in similar situations
have found to be nothing more than camouflaged racial expressions” (citation modified)). For
example, in response to a post showing a black man’s mugshot with the caption “Hide Your kids
cause section 8 is on the loose!!!” Dautrich allegedly commented that “[f ]or some reason our zip
code has become a hub for section 8 [voucher holders],” and “only so many should be allowed in
any neighborhood.” As another example, Plaintiffs allege that a different Board member wrote “it’s
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called Section 8 . . . It seems like the neighborhood is plagued with convicts, GET OUT!!!” And
while Defendants make much of the fact that Plaintiffs do not specify when this comment (and
others) occurred, the inquiry at this stage is plausibility. See Cicalese, 924 F.3d at 768 (disapproving
the district court’s analysis which, at the pleading stage, scrutinized the plaintiff’s failure to allege
“when and how many times” derogatory remarks against Italians were made).
Plaintiffs have also plausibly alleged that Defendants procedurally departed from their
decision-making process when enacting the Voucher Ban—through actions like circumventing a
community vote and holding the voting period for the Amendment (which facilitated the Voucher
Ban) open indefinitely.
The Court finds that Plaintiffs’ allegations, together, are sufficient to nudge their
disparate-treatment claims from conceivable to plausible. Cicalese, 924 F.3d at 768. Plaintiffs
plausibly allege facts supporting the ultimate elements of disparate treatment: that the Voucher Ban
was enacted because of the race of the voucher holders, not the means they use to pay rent. At the
pleading stage, that is enough. Whether Plaintiffs can prove their contentions is a question for
another day. Accordingly, as to disparate treatment, the Motions will be denied.16
III. Dismissal of Plaintiffs’ other causes of action is not warranted at this stage.
Defendants also seek dismissal of several causes of action unaddressed by Lincoln Property.
All Plaintiffs allege hostile housing environment harassment.17 The Johnson Plaintiffs and
16 The Court considered Defendants’ other arguments that dismissal is required. After resolving “all questions of fact
and . . . ambiguities in the controlling substantive law” in Plaintiffs’ favor, the Court finds that none of the
arguments are dispositive at the pleading stage given the facts alleged. Lincoln Property, 920 F.3d at 899 (citation
modified) (providing Rule 12(b)(6) standard).
17 It is uncertain whether a hostile housing environment claim is viable in this Circuit. See Baker v. Waterford Square
Homeowners Ass’n, 57 F. App’x 211, 2003 WL 147532, at *3 (5th Cir. 2003) (per curiam) (observing that other circuits
have recognized the claim by analogy to Title VII).
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McKinney Housing also allege racial intimidation, and McKinney Housing seems to allege
retaliation. Additionally, each Plaintiff seeks injunctive and declaratory relief.
After reviewing Plaintiffs’ pleadings and the arguments presented in the briefs, the Court
finds that Plaintiffs have stated plausible claims for relief under Rule 12(b)(6). Dismissal is
unwarranted. Accordingly, as to these claims, the Motions will be denied.
CONCLUSION
It is therefore ORDERED that:
• In Civil Action No. 4:25-cv-418, Defendant Providence Homeowners Association Inc.’s
Motion to Dismiss (Dkt. #17) is GRANTED in part and DENIED in part, and
Defendant FirstService Residential Texas, Inc.’s Motion to Dismiss (Dkt. #16) is
GRANTED in part and DENIED in part.
• In Civil Action No. 4:25-cv-467, Defendant Providence Homeowners Association Inc.’s
Motion to Dismiss (Dkt. #21) is GRANTED in part and DENIED in part, and
Defendant FirstService Residential Texas, Inc.’s Motion to Dismiss (Dkt. #20) is
GRANTED in part and DENIED in part.
• In Civil Action No. 4:25-cv-774, Defendant Providence Homeowners Association Inc.’s
Motion to Dismiss (Dkt. #10) is DENIED, and Defendant FirstService Residential
Texas, Inc.’s Motion to Dismiss (Dkt. #11) is DENIED.
It is further ORDERED that McKinney Housing and the Johnson Plaintiffs’
disparate-impact claims are DISMISSED with prejudice.
IT IS SO ORDERED.
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