## Facts

- African-American first-time homebuyers (and a community organization) alleged discriminatory “exploitation” in the marketing and sale of homes in or near Chicago’s predominantly Black Austin neighborhood.
- Defendants (a real estate company, a brokerage, and two associated individuals) marketed homes as “fully rehabbed,” targeted the Austin area, and offered low down-payment purchases.
- Plaintiffs alleged misrepresentations about buyer options and property location, including telling one buyer a home was the “only one” she qualified for and falsely stating an Austin home was in adjacent Oak Park.
- Plaintiffs alleged defendants pressured buyers by asserting it was “too late” to back out when rescission remained possible.
- Plaintiffs alleged defendants prevented price negotiation and imposed fixed prices.
- Plaintiffs alleged defendants orchestrated financing through FHA-insured loans, supplied down-payment funds, disguised the funds as “gifts” from relatives, and in at least one case paid a buyer’s outstanding debts.
- Plaintiffs alleged defendants encouraged co-signers and had buyers sign blank documents later completed by defendants.
- Plaintiffs alleged defendants discouraged meaningful inspections and that homes were not adequately rehabilitated despite being marketed as such.
- The parties did not dispute racial segregation and the existence of a “dual” housing market; plaintiffs contended defendants profited by charging above-market prices and imposing unfavorable terms on Black buyers with limited alternatives.

## Issues

1. Whether an exploitation theory under 42 U.S.C. §§ 1981–82 and the Fair Housing Act, 42 U.S.C. § 3604(b), requires proof of traditional antitrust-style “market power” (e.g., substantial market share).
2. Whether the evidentiary record created genuine disputes of material fact sufficient to defeat summary judgment on plaintiffs’ federal civil-rights and fair-housing claims.

## Decision

- The court denied defendants’ motion for summary judgment.
- The court held that exploitation liability does not require proof of market power in the traditional antitrust sense.
- The court concluded plaintiffs produced sufficient evidence for a factfinder to infer that defendants exploited segregated market conditions to impose above-market prices and unfair terms on African-American buyers because of race.

## Legal Principles

- Exploitation-based discrimination claims under 42 U.S.C. §§ 1981–82 and 42 U.S.C. § 3604(b) do not require a showing that a defendant holds a large share of a formally defined market.
- The relevant showing is an economically credible explanation of how a seller can profitably charge above-market prices or impose unfavorable terms on a racial group, including through constraints created by a racially segregated dual housing market.
- Evidence of targeted marketing to a segregated community, coupled with misrepresentations, restrictions on bargaining, financing manipulation, and concealment of property defects, can support an inference of discriminatory terms and conditions of sale under the Fair Housing Act and intentional racial discrimination in contracting and property transactions under §§ 1981–82.

## Conclusion

The court permitted plaintiffs’ exploitation-based discrimination claims to proceed, holding that they need not prove traditional market power and that the alleged targeting and transactional practices in a conceded dual housing market created triable issues under federal civil-rights statutes and the Fair Housing Act.


Honorable v. Easy Life Real Estate Sys., 100 F. Supp. 2d 885 (N.D. Ill. 2000)