Omaha landlords denied appeal to rental property registration ordinance a second time

Metro Omaha argues that the Ordinance results in disparate treatment of minority tenants and of property owners renting to them. Metro Omaha must thus show that the City “treat[ed] the plaintiff(s) less favorably than others based on their race, color, religion, sex or national origin.” Id. (alteration added). Proof of “discriminatory purpose” is “crucial for a disparate treatment claim.” Id. (citation omitted). Without a showing of intent, a showing of “discriminatory impact alone is not determinative outside of ‘rare’ cases where the pattern of discriminatory effect is ‘stark.’ ” Id. at 833, quoting Vill. of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 266 (1977).

Metro Omaha does not plead facts showing “a specific link between the alleged discriminatory animus and the challenged decision sufficient to support a finding by a reasonable fact finder that an illegitimate criterion actually motived the adverse action.” Id. at 831 (alterations added) (citation omitted). It also fails to plausibly plead that this is a rare case where the discriminatory effect is so stark as to evidence discriminatory intent. See id. at 833. Metro Omaha’s specific allegation of mistreatment of refugee tenants is not related to the Ordinance and does not permit a plausible inference that the City had a discriminatory purpose in enacting the Ordinance. The intensity of the discriminatory effect is not sufficiently pled here. Metro Omaha fails to plausibly plead a disparate treatment claim under the FHA.

Metro Omaha asserts that the Ordinance results in a disparate impact on minority tenants and property owners subject to the Ordinance. To prove disparate impact, Metro Omaha must plead that “a facially neutral policy ha[d] a significant adverse impact on members of a protected minority group.” Id. (alteration in original) (citation omitted). Metro Omaha is “not required to show that the [Ordinance] was formulated with discriminatory intent” to prove disparate impact. Id. (alteration added) (citations omitted).

Metro Omaha has not alleged a plausible disparate impact claim. Its amended complaint states that the Ordinance will result in disparate impact on minority tenants, increase the cost of housing for minority tenants, and reduce the quantity and quality of housing available to minority tenants (and property owners renting to minority tenants). But Metro Omaha “cannot make out a prima facie case of disparate impact” because it “fails to allege facts at the pleading stage demonstrating a causal connection” between the policy and the disparity. Ellis v. City of Minneapolis, 860 F.3d 1106, 1112 (8th Cir. 2017) (cleaned up). See McShane, 867 F.3d at 927. Metro Omaha fails to plausibly plead a disparate impact claim under the FHA.