## Facts

- Avenue 6E Investments, LLC and Saguaro Desert Land, Inc. sought to develop higher-density, modestly priced housing on land located in a predominantly white area of Yuma, Arizona.
- Yuma allegedly exhibited residential segregation, with affordable housing concentrated in predominantly Hispanic areas and comparatively limited affordable options in predominantly white areas.
- The developers applied to rezone their property from low-density to higher-density residential to build housing they alleged would be accessible to many Hispanic households.
- City planning staff and expert advisors recommended approval of the rezoning request.
- During public meetings, residents opposed the project in ways the developers characterized as racially charged; the City Council denied the rezoning.
- The denial was alleged to be the City’s only rezoning denial in the prior three years.
- The developers alleged the denial disproportionately reduced housing opportunities for Hispanic residents and reinforced segregated housing patterns.

## Issues

1. Whether the complaint plausibly alleged intentional discrimination under the Fair Housing Act (disparate treatment) and intentional discrimination under the Equal Protection Clause sufficient to survive dismissal.
2. Whether summary judgment was proper on the Fair Housing Act disparate-impact claim where the developers alleged deprivation of housing opportunities for Hispanics and perpetuation of segregation, notwithstanding other similar housing elsewhere in the city.
3. Whether the district court properly denied as moot a later summary-judgment motion after granting summary judgment on the disparate-impact claim.

## Decision

- The Ninth Circuit reversed the dismissal of the FHA disparate-treatment and Equal Protection claims and reversed the denial of leave to amend.
- The Ninth Circuit reversed summary judgment for the City on the FHA disparate-impact claim.
- The Ninth Circuit vacated the order denying the City’s second summary-judgment motion as moot and remanded for the district court to address it.
- The case was remanded for further proceedings.

## Legal Principles

- At the pleading stage, a plaintiff may rely on circumstantial allegations and contextual facts to make discriminatory intent plausible; direct evidence is not required.
- In evaluating a motion to dismiss, courts must accept well-pleaded factual allegations as true and draw reasonable inferences in the plaintiff’s favor.
- In land-use decisions, allegations that a governing body departed from expert recommendations and acted amid racially charged public opposition can support a plausible inference of discriminatory purpose under both the FHA and Equal Protection.
- FHA disparate-impact liability may be based on practices that disproportionately deprive a protected group of housing opportunities or that create, increase, reinforce, or perpetuate segregated housing patterns.
- The existence of other roughly comparable housing elsewhere does not, by itself, defeat an FHA disparate-impact claim as a matter of law at summary judgment; discriminatory-effect analysis is fact dependent.

## Conclusion

The Ninth Circuit held that the developers plausibly alleged intentional discrimination under the FHA and Equal Protection and that factual disputes precluded summary judgment on their FHA disparate-impact theory, requiring remand for further proceedings on the rezoning denial’s intent and effects.


Avenue 6E Invs., LLC v. City of Yuma, 818 F.3d 493 (9th Cir. 2016)