Opinion
No. 3:00-CV-0989-L
May 23, 2002
MEMORANDUM OPINION AND ORDER
Before the court is Norwest Mortgage's Motion for Summary Judgment, filed September 4, 2001. After careful consideration of the motion, response, reply, summary judgment evidence, and the applicable law, the court, for the reasons stated herein, grants Norwest Mortgage's Motion for Summary Judgment.
I. Factual and Procedural Background
The court incorporates the factual and procedural background set forth in its Memorandum Opinion and Order dated March 30, 2001. The facts stated herein are essentially undisputed by the parties. Wherever the facts are disputed by Plaintiffs, they are viewed in the light most favorable to them as the nonmovants.
Plaintiff Association of Community Organization for Reform Now ("ACORN") is a nonprofit association whose membership includes residents of low and moderate income neighborhoods primarily occupied by racial and ethnic minorities. ACORN seeks the improvement of conditions in its members' neighborhoods, including, the preservation of neighborhood viability and the elimination and prevention of blighting conditions. Plaintiff Ruth Isaac ("Isaac") is a homeowner in a predominantly African-American area of Dallas, Texas, and a member of ACORN. Defendant Norwest Mortgage, now doing business as Wells Fargo Home Mortgage, Inc. ("Norwest"), is a mortgage service company engaged in the business of making and purchasing mortgage loans for residential real estate.
Isaac lives in Dallas census tract 57, a moderate income, 99% minority census tract. All of the census tracts adjoining her residential area are 95% or more minority. These tracts are classified as moderate, middle and low income census tracts. Isaac's census tract is located in Zip Code 75216. ACORN has members residing in 51 census tracts in the City of Dallas, also classified as moderate, middle and low income census tracts. ACORN has members residing in communities located within the following Zip Code areas: 75203, 75212, 75215, 75216, 75217, 75218, 75224, 75227, 75229, 75235, 75241.
Norwest maintains a website on the Internet's World Wide Web through which it offers a "Homebuying Tutorial" service as a resource for potential homebuyers in the process of locating and purchasing a home. The Homebuying Tutorial includes seven categories ranging from understanding the homebuying process to finding the right home to closing on a mortgage. From October 17, 1999 through June 21, 2000, Norwest's website was linked to another website, specifically, Homefair.com, through which potential homebuyers were able to access certain programs or tools. One such tool was "Community Calculator," a program designed to assist potential homebuyers identify neighborhoods in other communities in the United States with similarly matched lifestyles.
Norwest removed the link accessing Community Calculator from its website on June 21, 2000. Neither Isaac nor any other member of ACORN in the Dallas area accessed Norwest's website prior to June 21, 2000. Plaintiffs do not know the identities of any third-party persons who accessed Community Calculator from Norwest's website during the period in question. Neither Isaac nor any other member of ACORN in the Dallas area have applied for a real estate-related loan from Norwest.
On May 9, 1999, Isaac filed this lawsuit against Norwest. She amended her complaint on June 21, 2000, to add Plaintiff ACORN and to assert additional claims against Norwest. Plaintiffs allege that Norwest has violated the Fair Housing Act, 42 U.S.C. § 3601 et seq., in three ways. First, they allege that Norwest discourages potential purchasers from inspecting or purchasing dwellings in the predominantly minority areas of Dallas, through the use of overt racial classifications on its website and by emphasizing negative features and de-emphasizing favorable features of these neighborhoods. Second, they allege that Norwest uses its website to steer potential purchasers to areas in which the person's race predominates, thus perpetuating racial segregation. Third, they allege that Norwest discriminates, in making loans on residential real estate, on the basis of the race or color of the residents in the areas in question.
Norwest moves for summary judgment pursuant to Fed.R.Civ.P. 56, contending that Plaintiffs lack standing to pursue the claims asserted in their First Amended Complaint ("Complaint"). Specifically, Norwest contends that: 1) there is no evidence that Isaac has suffered a "distinct and palpable" injury sufficient to satisfy Article III standing requirements under the Fair Housing Act; 2) there is no evidence that her alleged injury is "fairly traceable" to Norwest's alleged acts or omissions; or 3) there is no evidence that such injury, if any, will be redressed by a favorable decision from the court. Norwest also asserts that there is no evidence that any individual member of ACORN has standing to pursue a claim against Norwest, and therefore ACORN lacks representative standing.
II. Summary Judgment Standard
Summary judgment shall be rendered when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). A dispute regarding a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When ruling on a motion for summary judgment, the court is required to view all inferences drawn from the factual record in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986); Ragas, 136 F.3d at 458.
Once the moving party has made an initial showing that there is no evidence to support the nonmoving party's case, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine fact issue. Matsushita, 475 U.S. at 586. Mere conclusory allegations are not competent summary judgment evidence, and thus are insufficient to defeat a motion for summary judgment. Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir. 1996). Unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence. See Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir.), cert. denied, 513 U.S. 871 (1994). The party opposing summary judgment is required to identify specific evidence in the record and to articulate the precise manner in which that evidence supports his claim. Ragas, 136 F.3d at 458. Rule 56 does not impose a duty on the court to "sift through the record in search of evidence" to support the nonmovant's opposition to the motion for summary judgment. Id.; see also Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915-16 n. 7 (5th Cir.), cert. denied, 506 U.S. 832 (1992). "Only disputes over facts that might affect the outcome of the suit under the governing laws will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248. Disputed fact issues which are "irrelevant and unnecessary" will not be considered by a court in ruling on a summary judgment motion. Id. If the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to its case and on which it will bear the burden of proof at trial, summary judgment must be granted. Celotex, 477 U.S. at 322-23.
II. Analysis
Norwest has maintained throughout this litigation that both Isaac and ACORN lack the requisite standing to pursue Plaintiffs claims under the Fair Housing Act. In its Memorandum Opinion and Order dated March 30, 2001, the court determined that Plaintiffs' factual allegations of injury were sufficient to withstand Norwest's motion to dismiss for lack of standing. of course, on a motion to dismiss, the court presumes that general allegations embrace those specific facts that are necessary to support the claim, and, therefore, general factual allegations of injury resulting from the defendant's conduct may suffice at the pleading stage. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992) (citing Lujan v. National Wildlife Fed'n, 497 U.S. 871, 889 (1990)). At the summary judgment stage, however, Plaintiffs cannot rest on "mere allegations," but must "set forth" by affidavit or other evidence "specific facts," see Fed.R.Civ.P. 56(e), which will be taken as true for purposes of the summary judgment motion. Lujan v. Defenders of Wildlife, 504 U.S. at 562. "Since [the elements of standing] are not mere pleading requirements but rather an indispensable part of the plaintiffs case, each element must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation." Id. at 561 (citations omitted). Therefore, to survive Norwest's summary judgment motion, Plaintiffs must establish by "affidavits or other evidence showing, through specific facts, . . . that . . . [they are being] "directly' affected [by Norwest's alleged violations of the Fair Housing Act]." Id. at 563.
The Supreme Court has held that standing under the Fair Housing Act extends to the full limits of Article III of the Constitution, and is not restricted by any of the doctrines of prudential standing. Havens Realty Corp. v. Coleman, 455 U.S. 363, 372 (1982). "Thus the sole requirement for standing to sue under [the Fair Housing Act] is the Art. III minima of injury in fact: that the plaintiff allege that as a result of the defendant's actions he has suffered a distinct and palpable injury." Id. (citation and internal quotation marks omitted). In addition to the requirements of injury and causation, a plaintiff must also show that "the injury will likely be redressed if the requested relief is granted." Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 100 (1979).
A. Isaac's Alleged Injuries
Since Isaac is also a member of ACORN, and the only one specifically identified in this lawsuit, the court's analysis with respect to her alleged injuries equally applies to all other members of ACORN on whose behalf it alleges standing.
Plaintiffs allege that Isaac and other members of ACORN are injured by Norwest's practices in two distinct ways by subjecting them to racial segregation through the use of overt racial classifications, and by artificially reducing the demand for homes in their neighborhoods thus lowering the value of their real estate.
1. Racial Segregation
Plaintiffs contend that Isaac and other members of ACORN have been subjected to racial segregation, and point to the racial classifications contained in the lifestyle descriptions generated by Community Calculator. They further contend that as a result of these racial classifications prospective white homebuyers residing in predominantly white neighborhoods are in effect steered away from the predominantly minority areas. Plaintiffs explain that this is because communities predominantly occupied by racial and ethnic minorities would not be included in the list of "best matching communities" for those persons entering as their "moving from" location a zip code comprised of communities predominantly occupied by nonminorities. Similarly, communities predominantly occupied by nonminorities would not be included in the list of "best matching communities" for those persons entering as their "moving from" location a zip code comprised of communities predominantly occupied by racial and ethnic minorities.
By way of illustration, Plaintiffs have submitted the information provided by Community Calculator based upon an entry of Zip Code 75215 (as the departing location), an area located in South Dallas, to a non-specified City/Community in Dallas, Texas. Based on this zip code, Community Calculator generated a list of the five "best matching communities" within 50 miles of the target area, including the area of departure (that is, Zip Code 75215); the community in which Isaac resides (Dallas, Texas 75216); the community in which approximately 237 ACORN members reside (Dallas, Texas 75203); and a community in Fort Worth, Texas (Fort Worth, Texas 76104). Pls.' App. at 205. The five communities were ranked according to proximity to Dallas, Texas, and by how well they matched the community of the departing location. Each community was also assigned a "primary lifestyle" and "other lifestyle" indicator, that is, a demographic classification ascribed to the community based on consumer preferences. Detailed demographic information about a certain lifestyle could be obtained by clicking onto a specific community. Id. According to Community Calculator, the "primary lifestyle" indicator for a community located within Dallas, Texas 75215 is "Low Income." The "other lifestyles" descriptions for this community are "Distressed Neighborhoods," "Middle Class Urban Families," and "West Coast Immigrants." Id. at 205. The following detailed descriptions were further provided according to the specified lifestyle:
Low Income
Low Income workers face the economic challenges of poverty, single parenthood, and public assistance, plus the generation squeeze of caring for the young and elderly at the same time.
Demographic: Low Income is a population of extremes, very young and very old. The dependency ratio of young (15 years) and old (65 years) to the working age (15-64 years) population is 24 percent higher than the U.S. ratio. Although nearly one third of the households are occupied by singles, many are single-parent or multigenerational, shared households. The median age of 32.6 summarizes the extremes in the age distribution. The majority of the population is Black (86.1 percent).
Socio-economic: Median household income is $16,200, about 50 percent below the national level. About 40 percent of the households are below poverty; one-fourth receive income from public assistance; 40 percent, from Social Security. The unemployment rate of 18 percent is almost three times the U.S. level. Among the employed, over half work part-time, mainly in the service industry. Over half of the adult population have not completed high school.
Residential: There is a 50-50 mix of renters and owners in a 60-40 mix of single-family and multi-unit dwellings. Home value and rent are low. Over 80 percent of owner-occupied housing units are valued below $50,000; more than 80 percent of renter households pay less than $300 monthly. These neighborhoods are located in central cities. Low Income can be found in most states, with high concentrations in Southern states of Alabama, Louisiana, and Mississippi.
Buying Habits: Economic reality limits their purchasing power. The majority of their budgets go to the basics, like rent and groceries. They tend to participate in their community by raising funds, working for political candidates, jury duty, and participating in public activities. They are topranked for buying major household kitchen appliances and baby products such as soap, oils, lotions and wipes. They also tend to purchase fast food and takeout food from chicken restaurants. This market ranks high for using pest control services. Media preferences include watching television programs such as America's Most Wanted and Family Matters, however, they tend not to rent videos. They do read magazines such as Entertainment Weekly, Health, The National Enquirer, bimonthly and weekly publications, and listen to urban/new adult contemporary radio.
Id. at 209-10.
Distressed Neighborhoods
These neighborhoods are the low end of the socioeconomic spectrum — characterized by youth, single parenthood, poverty, high unemployment and public assistance.
Demographic: In these neighborhoods, households headed by single-parents outnumber any other household type. Single-person households are the runners-up. The population is young, with a median age of 26.0 years. Over 40 percent are under 20 years old.
Socioeconomic: Over half of the households in this market are below the poverty level; forty percent receive some type of public assistance. Their median household income, $14,400, is 60 percent below the national level. A quarter of the labor force is unemployed. Among those who are employed, nearly 60 percent work part-time. Employment is found primarily in the service industry. This market is the low end of the socioeconomic scale, accounting for 1.1 percent of all households.
Residential: These neighborhoods are 95-percent urban, commonly in the central cities of large metropolitan areas. Over 40 percent of the housing are multi-unit buildings. Most of these homes are rented, at an average of under $300 monthly. Homeless shelters, street locations, and juvenile homes are found in these neighborhoods.
Buying Habits: These neighborhoods are top-ranked for shopping at malls, buying children's items such as crayons, toys, athletic and casual shoes, and for most children's apparel. They splurge on fast food and chicken restaurant takeout. Leisure activities include going to bars and dancing. They tend to mail or phone order items such as audio tapes. They tend to own televisions, stereos, and VCRs. Top-ranked media preferences include reading The National Enquirer, Playboy, Soap Opera Digest, and Soap Opera Weekly. Other media preferences include watching a lot of television (programs like 48 Hours, Monday night movies, and NYPD Blue), renting videos, and listening to urban/new adult contemporary music.
Id. at 215.
Middle Class Urban Families
The Middle Class Urban Families is a small, middle-income market of urban families. They own homes in older city neighborhoods and work in service or government jobs.
Demographic: This market is 90-percent black and 80-percent family. It is an older market with teenagers, or adult children living at home. Most households are 45-74 years old. The median age is 34.9 years.
Socioeconomic: This is a small, middle-income market: 1 percent of all households. Median household income is $30,900. Despite a 10-percent unemployment rate, labor force participation is above-average for women, 55 percent, and just below average for men, 69 percent. Most of the work force is employed in service or government jobs.
Residential: Middle Class Urban Families neighborhoods are urban, singlefamily homes, both attached and detached. Almost 15 percent of the housing inventory are row houses (twice the national average). Most are owner occupied. Built decades ago, the homes have an average value of $76,000. These communities are located inside urbanized areas. These areas are scattered throughout the United States. Almost 30 percent of the neighborhoods in the District of Columbia are Middle Class Urban Families.
Buying Habits: Consistent with their urban lifestyle, Middle Class Urban Families consumers own few cars, and tend not to participate in sports, civic activities, or travel. They buy apparel — children's women's and men's, (ranking high for athletic and casual sneaker purchases), and toys bought from department stores. They are top-ranked for owning 4-plus televisions and for drinking wine coolers and cola sodas. They spend their leisure time going to the movies. Middle Class Urban Families rank high for fast food and takeout food purchases. They are also top-ranked for watching pay cable show channels like Disney, HBO and Show Time, and rank high for reading magazines such as Seventeen and Life. Media preferences also include weekly and monthly publications and Consumer Digest.
Pls.' App. at 213.
West Coast Immigrants
This market represents a profile of new immigrants. Los Angeles is a common starting point, but these neighborhoods may be found in any region in the U.S.
Demographic: The population is young and family oriented. Almost 60 percent of the households are families with children, either married couples or single-parents. Median age is 25.9 years. Average family size is 4.2, compared to 3.2 persons per family for the U.S. More than 70 percent of the population is Hispanic and speaks Spanish at home. Half of the population are immigrants.
Socioeconomic: This is a small, working class market with a median household income of $26,400. Despite the problems of language and education (60% with no high school diploma), labor force participation is above average. Most are employed in skilled or unskilled blue collar jobs; many, in manufacturing. Rates of unemployment and poverty are almost twice the national rates.
Residential: Almost 75 percent of the neighborhoods in West Coast Immigrants are in California. Residents are renters, primarily in older apartment buildings. Average gross rent is slightly above the U.S. average, at $510 monthly.
Buying Habits: Consumers in West Coast Immigrants markets are naturally family oriented. Their budgets include heavy expenditures on preschool toys, crayons, toy cars and trucks, and children's books. Top-ranked are baby products, such as infant toys, and action figure toys. Most of the households own at least one car, usually a small sized or sports car. Going to the movies ranks high for this market, but they also like to spend their leisure time on photography, dancing, visiting museums, and purchasing lottery tickets. In addition, West Coast Immigrants rank high for fitness walking, jogging/running and hiking. Other top-ranked items include taking calcium vitamins and referencing the Yellow Pages for household furnishing purchases. Media preferences include watching cable television, listening to the radio (contemporary rock music) and reading magazines like Cosmopolitan, The Disney Channel, Health, and National Geographic.
Id. at 211. Each of the communities recommended by Community Calculator as a "best match" for a departing community located within Zip Code 75215 was assigned the same or similar lifestyles as those described in detail above. For example, the fourth community listed, namely, Dallas, Texas 75216, had ascribed to it a primary lifestyle of "Middle Class Urban Families," and other lifestyles of "Low Income," "Distressed Neighborhood," and "Urban Working Families." The "Urban Working Families" lifestyle, not described in detail herein, contained the same or similar type of information and characteristics as those lifestyles described above.
In response, Norwest points to Plaintiffs' failure to present evidence that either Isaac or members of ACORN accessed its website. Norwest, therefore, argues that Plaintiffs cannot establish that they were in any way exposed to, directly influenced by, or otherwise steered as a result of using, Norwest's website link to Community Calculator. of course, such evidence would only be relevant if Plaintiffs were alleging "first party" standing. That has never been the basis for their alleged injuries. Rather, it is Plaintiffs' position that they have been subjected to racial segregation as a result of the overt racial classifications contained in the lifestyle descriptions of their neighborhoods and communities thereby steering potential buyers away from residential areas occupied predominantly by racial and ethnic minorities. While it is incredulous in this day and age that a corporation such as Norwest would allow the type of racially or ethnically insensitive and offensive and highly stereotypical material about which Plaintiffs complain to be maintained on or accessed from its website, there is simply no evidence in the record showing that Plaintiffs' have sustained a distinct and palpable injury.
Plaintiffs present no evidence which shows that from October 1999 to June 2000, third persons accessed Norwest website, including Community Calculator, and were in any way steered away from Plaintiffs' communities. In other words, Plaintiffs present no evidence showing that persons living in communities occupied predominantly by nonminorities accessed Community Calculator through Norwest's website, and were shown communities other than those occupied predominantly by racial and ethnic minorities, or located within the zip codes comprising Plaintiffs' residential areas. There is moreover, no evidence, that Plaintiffs' neighborhoods or communities have actually been impacted as a result of Norwest's Internet practices. Plaintiffs rely on a Texas AM Real Estate Research survey of recent homebuyers in several Texas areas, including Dallas and Fort Worth. According to this survey, twenty-eight percent of the people questioned ranked the Internet as "Very Important" in finding information about homes and neighborhoods, while sixty percent ranked the internet "Important" in finding information about homes and neighborhoods. Given that Plaintiffs admit that they do not know the identity of any third persons who actually accessed Community Calculator through Norwest's website or who were actually steered away from Plaintiffs' communities during the period in question, this survey in no establishes the types of injuries alleged by Plaintiffs.
Plaintiffs also contend that potential minority homebuyers are steered away from making residential loan applications with Norwest as a result of Norwest's Internet practices. Plaintiffs, however, present no evidence demonstrating that a single minority accessed the Norwest website during the period in question, or that potential minority homebuyers were in any way influenced in their homebuying decisions by information obtained from Norwest's website.
2. Reduced Property Value
Plaintiffs contend that Norwest's alleged racial steering and mortgage loan discrimination also subjects Isaac and other members of ACORN to "at least the risks of neighborhood decline and continued racial segregation by reducing the flow of home mortgage money into their neighborhoods." Pls.' Resp. at 36. In other words, Plaintiffs contend that as a result of Norwest's alleged discriminatory practices, Plaintiffs are likely to suffer decreased property values in their neighborhoods (that is, African-American areas or predominantly minority areas) because of a reduced demand for homes in such neighborhoods. Plaintiffs, however, present no evidence demonstrating that there has been a decrease in the value of their property since October 1999, when Community Calculator first became accessible from Norwest's website. Plaintiffs also presents no evidence that Norwest denied home mortgage loans to qualified potential homebuyers seeking to purchase homes in Plaintiffs' communities on account of their race or color. Plaintiffs have therefore failed to show that they have suffered a "distinct and palpable" injury that is not "abstract" or "conjectural" or "hypothetical" sufficient to confer Article III standing.
Plaintiffs present no evidence which shows that any third party has been injured as a result of Norwest's alleged discriminatory Internet or lending practices. As a result, Plaintiffs cannot establish that Isaac or any other member of ACORN has suffered the type of injuries alleged in Plaintiffs' Complaint. Accordingly, there is no genuine issue of material fact for trial concerning whether Isaac or any other member of ACORN has sustained an injury in fact sufficient to confer standing under the Fair Housing Act, and Norwest is entitled to judgment as a matter of law.
ACORN
ACORN alleges that it has standing to represent the interests of its members in obtaining the injunctive relief sought in this case. ACORN further alleges that its members, both minority and white, would have standing on their own to eliminate the purposeful use of overt racial classifications to perpetuate racial segregation and to remedy Norwest's purposeful racial redlining of their neighborhoods. ACORN alleges that the elimination of overt racial classification used to perpetuate racial segregation and the elimination of purposeful racial redlining are germane to its purposes of preserving and protecting its members' neighborhoods. See Pls.' Compl. at 2.
An association such as ACORN may have standing either in its own right, as a result of an injury to itself, or "as the representative of its members." Warth v. Seldin, 422 U.S. 490, 511 (1975). ACORN asserts representative standing, which exists if "its members, or any one of them, are suffering immediate or threatened injury as a result of the challenged action of the sort that would make out ajusticiable case had the members themselves brought suit." Id. "An organization . . . has standing to bring an action on behalf of its members where: (1) the organization's members would have standing to sue individually; (2) the organization is seeking to protect interests that are germane to its purpose; and (3) neither the claim asserted nor the relief requested requires the organization's members to participate in the lawsuit." Sierra Club, Lone Star Chapter v. Cedar Point Oil Co., 73 F.3d 546, 555 (5th Cir. 1996).
As previously stated, Isaac has failed to present evidence which demonstrates that she has suffered an injury in fact as a result of Norwest's alleged conduct, and ACORN has presented no evidence which establishes that any other member of ACORN has suffered such an injury. ACORN has therefore failed to show that any of its members has standing to sue in their own right. Consequently, ACORN has no standing to bring suit on behalf of its members, and Norwest is entitled to judgment as a matter of law.
Norwest prevails in this lawsuit because of a legal ruling on standing, not because its conduct is free of discrimination. The court understands that Norwest has, since the filing of this lawsuit, disabled or removed Community Calculator from its website. Such action was a positive step, however, such racially and ethnically insensitive information should have never been maintained or accessed from its website. If the conduct recurs and standing is present, Norwest substantially increases its risk of liability.
III. Conclusion
For the reasons stated, Plaintiffs have not shown that they have suffered a distinct and palpable injury as a result of Norwest's alleged conduct, and have therefore failed to show that they have standing to pursue their claims under the Fair Housing Act. No genuine issue of material fact exists with respect to the standing issue, and Norwest is therefore entitled to judgment as a matter of law. Accordingly, Norwest Mortgage's Motion for Summary Judgment is granted. Judgment will be issued by separate document pursuant to Fed.R.Civ.P. 58.It is so ordered.