## Facts

- Black and Hispanic public-housing applicants and residents brought a certified class action against the New York City Housing Authority (NYCHA) alleging racially discriminatory tenant assignment practices under the Fair Housing Act (FHA) and related civil-rights statutes.
- The parties and the United States resolved the litigation through a 1992 consent decree creating a Tenant Selection and Assignment Plan intended to reduce segregation and bring NYCHA into compliance with federal law.
- Years later, NYCHA sought to implement a Working Family Preference (WFP) that would give selection priority to applicants meeting employment-based criteria.
- Plaintiffs and government experts projected that, because white applicants were more likely to qualify as “working families” under the proposed criteria, the WFP would increase the share of white families admitted to certain developments.
- After evidentiary submissions including competing statistical projections, the district court found that implementing the WFP would worsen or perpetuate segregation at 20 specified developments and permanently enjoined NYCHA from using the WFP at those projects (but not system-wide).
- NYCHA appealed, disputing the segregation benchmark used by the district court and the project-specific findings supporting the injunction.

## Issues

1. Whether the district court erred by using a 30% white-family population benchmark to identify when a development should be treated as “segregated” under the consent decree and FHA analysis.
2. Whether the district court clearly erred in finding that the WFP would perpetuate or increase segregation at the enjoined developments based on the evidentiary record and expert projections.
3. Whether the district court abused its discretion by issuing a permanent injunction barring implementation of the WFP at the specified developments.

## Decision

- The Second Circuit affirmed in part and reversed in part.
- It upheld the district court’s use of a 30% white-family benchmark because the figure was grounded in the consent decree and the parties’ shared understanding reflected in the decree’s formation.
- It held that many of the district court’s project-specific findings about the WFP’s likely segregative effects were not clearly erroneous, particularly given the low baseline percentage of white families system-wide and the potential for small admission changes to affect a development’s racial identifiability.
- It affirmed the permanent injunction as to most of the 20 developments.
- It reversed the injunction as to some developments where the record did not sufficiently support a finding that the WFP would push racial composition over the benchmark or otherwise meaningfully perpetuate segregation.
- A dissent argued the 30% benchmark was an overly rigid reading of the decree and that the projections were too speculative to justify the relief.

## Legal Principles

- Under the FHA, a plaintiff may establish liability without proving discriminatory intent by showing discriminatory effect, including that a policy significantly perpetuates segregation.
- Interpretation of a consent decree is reviewed de novo; factual findings on segregation and causation are reviewed for clear error; permanent injunctive relief is reviewed for abuse of discretion.
- A civil-rights consent decree is enforceable according to its terms, including quantitative benchmarks incorporated into the parties’ agreement.
- Injunctive relief must be supported by project-specific evidence tying the challenged policy to a material risk of perpetuating segregation at each covered site.

## Conclusion

The Second Circuit largely enforced a civil-rights consent decree and the FHA’s disparate-impact framework by barring NYCHA’s proposed working-family preference at developments where record-based projections showed it would perpetuate segregation, while narrowing the injunction where the evidence was insufficient on particular projects.


Davis v. N.Y.C. Hous. Auth., 278 F.3d 64 (2d Cir. 2002)