NAACP and NAHB v. City of Kyle, Texas (Fair Housing Discrimination)

Court

Fifth Circuit Court of Appeals 

NAHB Involvement

Co-Plaintiff

On Nov. 22, 2005, NAACP, NAHB and the HBA of Greater Austin filed a federal lawsuit against the city of Kyle, Texas. The complaint alleged that ordinances passed by the Kyle City Council imposing requirements such as all-masonry construction and expanded home and garage size drive up the cost of starter homes by more than $38,000 per new unit. The lawsuit alleged that this increase has a disproportionate impact in pricing African-Americans and other minorities out of the new home market, and that such a disparate effect violates the FHA.

The city filed a motion to dismiss, asserting that both NAACP and NAHB lack standing. We filed our brief defending standing, and in June 2006, a magistrate issued a recommendation that NAHB and NAACP be granted standing. The federal district court adopted the recommendation and recognized our standing in July 2006.

Thereafter, the cities of Manor, Round Rock, Pflugerville and Jonestown all moved to join the litigation on the grounds that they each have ordinances similar to the one being challenged in Kyle and that any positive decision in this case would allow NAHB and NAACP to sue them at some later date. In November 2006, we filed a brief to argue that the ordinances in other cities are not at issue in this case, the other cities have no interest or claim here, and allowing them to intervene would only cause confusion and delay without any benefit to the case. Agreeing with NAHB, the court determined in May 2007 that the cities could participate as friends of the court but may not join in the litigation otherwise.

Summary judgment briefing to address the merits of the disparate effect claim was completed in September 2007. The summary judgment motion by the city was denied, and a 10-day trial was held in February 2008. Prior to the conclusion of the trial, the judge requested supplemental briefing on some narrow issues. The trial was completed in April 2008.

On March 30, 2009, the court determined that while the FHA prohibits municipalities from using their zoning powers in a discriminatory manner, "a dollar impact on home construction costs alone" does not establish a prima facie case of discriminatory effect.

The NAACP, NAHB and the HBA of Greater Austin filed a notice of appeal to the federal Fifth Circuit Court of Appeals April 29, 2009. Meanwhile, the city filed a cross-appeal on whether it should be awarded attorneys' fees. NAHB filed its opening brief on the merits to the Fifth Circuit on Sept. 29, 2009. On Oct. 6, 2009, a coalition of nine national and local fair housing groups filed an amicus brief supporting our appeal. The city filed its responsive brief in December 2009. NAHB filed its final reply on Jan. 7, 2010. On April 27, 2010, the Fifth Circuit heard oral argument. On Nov. 11, 2010, the Fifth Circuit issued its decision, determining that both NAHB and the NAACP did not prove standing on both the substantive and retaliation claims. The court held that the city was not entitled to attorneys' fees.