Reinhart v. Lincoln County

F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
April 9, 2007
UNITED STATES CO URT O F APPEALS Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT

CLAREN CE REINH AR T; GA NELLE
EDW AR DS; LARRY REINH AR T,

Plaintiffs - Appellants,
v. No. 06-8028
LINC OLN CO UN TY; LINC OLN
C OU N TY PLA N N IN G A N D ZONING
CO M M ISSION ; LINC OLN CO UN TY
O FFICE O F PLA N N IN G ; K ENT
C ON N ELLY ; T. D EB WO LFLEY;
ALAN LINFORD, individually and in
their official capacities as Lincoln
C ounty C ommissioners; M IK E
ARCHIBALD, individually and in his
official capacity as planner for Lincoln
County Planning and Zoning Office,

Defendants - Appellees,

N A TIO N A L A SSO CIA TIO N OF
HOM E BUILD ERS,

Amicus Curiae.

A PPE AL FR OM T HE UNITED STATES DISTRICT COURT
FOR T HE DISTRICT OF W YOM ING
(D.C. NO . 05-CV-089-CAB)
Laurence William Stinson, B onner Stinson, P.C., Powell, W yoming, (John D.
Bowers, Bowers & Associates Law Offices, PC, Afton, W yoming, with him on
the briefs), for Plaintiffs - Appellants.

Richard S. Rideout, Law Offices of Richard Rideout, P.C., Cheyenne, W yoming,
for Defendants - Appellees.

Before HA RTZ, SE YM OU R, and O’BRIEN, Circuit Judges.

HA RTZ, Circuit Judge.

The Reinharts (Plaintiffs Clarence Reinhart and his daughter and son,

Ganelle Edw ards and Larry Reinhart) appeal the district court’s order dismissing

their disparate-impact claim under the Fair Housing Act (FHA). Defendants are

Lincoln County, the Lincoln County Planning and Zoning Commission, the

Lincoln County Office of Planning, and four Lincoln County officials in their

individual and official capacities. The Reinharts claimed that a new

comprehensive land-use plan and amended land-use regulations enacted by

Lincoln County in 2005 had a discriminatory effect on persons protected by the

FHA. The district court granted Defendants’ motion for summary judgment on

the claim, and the Reinharts appeal. W e have jurisdiction under 28 U.S.C. § 1291

and affirm.

-2-
I. B ACKGR OU N D

A. Land-Use Regulations

In 2002 the Reinharts, who were interested in creating a subdivision of

“affordable” one-acre lots in Lincoln County, W yoming, attempted to develop

property near Etna (a community within the County) but were unable to obtain

approval from the town’s water board. Sometime between 2002 and 2004 they

notified Defendants of their intent to subdivide land near a subdivision that they

had previously developed. The Reinharts assert that the County’s comprehensive

plan at the time would have permitted a subdivision with lots having an average

size of one acre. It appears that the Reinharts did not intend to build homes on

the lots in their proposed subdivision, but rather to sell individual lots.

On April 14, 2004, Lincoln County comm issioners, allegedly aware of the

Reinharts’ plan for a subdivision, adopted an emergency moratorium on land-use

permits in unincorporated portions of the County, purportedly because of

unprecedented growth in the area. W hile the moratorium was in effect,

Defendants developed a new comprehensive plan and land-use regulations. O n

January 4, 2005, they adopted the new plan, and on M ay 4 they adopted new

regulations and lifted the moratorium. Amended versions of the plan and

regulations were adopted on July 6, 2005.

According to the Reinharts, the new regulations divide most of north

Lincoln County into (1) mixed-use zones, accounting for roughly 10% of the area,

-3-
which permit high-density housing and commercial and industrial uses, and (2)

rural zones, accounting for roughly 90% of the area, which permit residential

development of five-acre lots. (Three other zoning categories used in the

County— recreational zones, industrial zones, and public zones— are not at issue in

this litigation.) The Reinharts contend that neither the mixed-use nor the rural

zones are suitable for affordable housing. The as-yet undeveloped areas in mixed-

use zones, they say, are small and located near highways but far from services,

which means that providing services would be too expensive for affordable

housing. On the other hand, the rural zones are allegedly unsuitable because of

the high minimum-lot-size requirement. In addition, they assert that affordable

housing is further hampered by the requirements in the new regulations of costly

developer improvements, such as enhanced septic systems— allegedly twice as

expensive as those required by state and federal agencies— and paved roads.

Although the Reinharts repeatedly refer to their development plans as

focused on “develop[ing] affordable lots,” Aplt. Br. at 6, for “affordable housing,”

id. at 7, they do not contend that the lots they seek to sell, or the homes that would

ultimately be built upon them, would qualify as “affordable” under regulations of

the United States Department of Housing and Urban Development (HUD). Under

these regulations, housing is “affordable” only if it is acquired by a family whose

annual income does not exceed 80% of the median income for the area. See 24

C.F.R. §§ 92.2 (definition of low-income families), 92.252 (affordable housing for

-4-
lease must be rented by low-income families), 92.254(a)(3) (affordable housing for

sale must be purchased by low-income families). The Reinharts assert that the

2005 median family income for Lincoln County was $54,000, which means that

“affordable housing” in the County would have to be acquired by a family with an

income below $43,201.

B. District-Court Proceedings

On M arch 21, 2005, the Reinharts filed a complaint against D efendants in

the United States District Court for the District of W yoming. At that time the new

comprehensive plan had been adopted, but the new land-use regulations w ere only

proposed and the moratorium was still in effect. The complaint stated seven

claim s, including disparate-treatment and disparate-impact claims under the FH A ,

alleged violations of the Equal Protection Clause and Takings Clause of the United

States Constitution, and three state-law claims. In their disparate-impact claim the

Reinharts contended that the combination of costly required development

improvements and a zoning scheme that limits the locations of higher-density

housing has a discriminatory effect on members of groups protected under the

FH A. They sought to enjoin Defendants from continuing the land-use permitting

moratorium (which was later lifted on M ay 4, 2005) and from enforcing land-use

restrictions that prevented protected groups from gaining affordable housing in

Lincoln County. They also sought damages and attorney fees.

-5-
 Defendants moved for summary judgment. As to the disparate-impact

claim, they contended that the Reinharts had failed to provide any statistical

support showing that the new regulations had a disparate impact on housing for

protected classes:

Although discriminatory effect is generally shown by statistical
evidence, any statistical analysis must be appropriate, relevant, and
the comparables should focus on the local housing market and
statistics. Here, any statistical support proffered by the Plaintiffs
must focus on Lincoln County and the relationship between the [land-
use regulations] and the availability of housing for the protected class
members and how that operates to discriminate against those
individuals. To date, none have been proffered.

Defs.’ M em. in Supp. of M ot. for Summ. J. at 10, Reinhart v. Lincoln County, No.

05-CV-89-B (D. W yo. Jan. 27, 2006). Defendants further contended that even if

the Reinharts had made out a prima facie disparate-impact claim, the claim would

still fail because “the specific regulations that the Plaintiffs complain about are all

justifiable on the basis of the public health, safety, and welfare.” Id. at 11–12.

In response the Reinharts proffered affidavits indicating that those in

Lincoln County with incomes too low to afford a $200,000 house w ere

disproportionately members of protected classes, including racial minorities and

female-headed, single-parent households, and that the new regulations w ould

increase the cost of real estate in the County. They also provided statistics

indicating that the demand for affordable housing in the County was increasing. 1

1
The Reinharts’ two other challenges to provisions in the new regulations
(continued...)

-6-
 The district court dismissed the Reinharts’ federal claims and declined to

exercise jurisdiction over the state-law claims, dismissing them without prejudice.

Addressing the disparate-impact claim, the court acknowledged that the Reinharts

had proffered sufficient evidence “to show that protected class members generally

have lower incomes than the general population of the area,” and said that they

had “offered sufficient evidence to show that the [new regulations] will increase

the cost of residential development and the cost of a residential lot within the

Rural Zone.” Aplt. A pp. at 18–19 (O rder G ranting Defs.’ M ot. for Summ. J.,

M arch 14, 2006 (District Court Order)). But it concluded that they had “failed to

show that [the effect of the new regulations was] discriminatory because the

increased costs are imposed upon all residents of Lincoln County regardless of

their race or family status.” Id. at 19. The court relied on dictum in Hemisphere

Building Co. v. Village of Richton Park, 171 F.3d 437 (7th Cir. 1999), rejecting a

1
(...continued)
have not been adequately preserved for review. First, the Reinharts claimed that
the regulations unduly restrict the rights of larger families to subdivide their
property because parents with more than two children must make development
improvements and file a performance guarantee if they wish to grant parcels to
each child. Although the Reinharts mention this issue twice in their opening
brief, their passing reference to “land use regulations that treat larger families
differently than smaller families,” Aplt. Br. at 10, and their subsequent citation to
101 pages of the record are insufficient to merit review. See Ambus v. Granite
Bd. of Educ., 975 F.2d 1555, 1558 n.1 (10th Cir. 1992), modified on other
grounds on reh’g, 995 F.2d 992 (10th Cir. 1993).
The Reinharts also claimed in district court that they were barred from
developing any property with a grade of 6% or more. They do not repeat this
contention on appeal.

-7-
disparate-impact claim that was based solely on the proposition that zoning

regulations that increase housing costs would disproportionately affect members of

protected groups, id. at 440 (“Anything that makes housing more expensive hurts

handicapped people; but it would be absurd to think that the [Fair Housing

Amendments Act] overrides all regulation of home construction. This is true

whether the argument is made in the name of [reasonable] accommodation or . . .

in the name of disparate impact [under the FHA].”). The court stated that “[t]his

is not a case where the discriminatory effect is ‘functionally equivalent to

intentional discrimination.’” Aplt. App. at 21 (District Court Order) (quoting

M ountain Side Mobile Estates P’ship v. Sec’y of HUD, 56 F.3d 1243, 1251 (10th

Cir. 1995)). The court thus concluded that the Reinharts “have failed to make a

prima facie case of disparate effect, [and] there is no need to examine the County’s

justifications for these regulations.” Id. at 23.

On appeal the Reinharts challenge only the dismissal of the disparate-impact

claim.

II. D ISC USSIO N

A. Standard of Review

“W e review summary judgment orders de novo and may affirm the district

court’s [grant of summary judgment] on any grounds adequately presented below.”

M edina v. City & County of Denver, 960 F.2d 1493, 1500 (10th Cir. 1992). Under

Fed. R. Civ. P. 56(c) summary judgment is appropriate if “the pleadings,

-8-
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 a judgment as a matter of law.” “[W ]e view

the evidence and draw all reasonable inferences therefrom in the light most

favorable to the party opposing summary judgment.” Terra Venture, Inc. v. JDN

Real Estate-Overland Park, L.P., 443 F.3d 1240, 1243 (10th Cir. 2006) (internal

quotation marks and ellipsis omitted).

B. Disparate-Im pact Claim

The FHA, 42 U.S.C. §§ 3601–3619, makes it unlawful “[t]o refuse to sell or

rent . . . , or otherwise make unavailable or deny, a dw elling to any person because

of race, color, religion, sex, familial status or national origin,” id. § 3604(a), or

because of handicap, id. § (f)(1). Dwelling is defined as “any building, structure,

or portion thereof w hich is occupied as, or designed or intended for occupancy as,

a residence by one or more families, and any vacant land which is offered for sale

or lease for the construction or location thereon of any such building, structure, or

portion thereof.” Id. § 3602(b) (emphasis added). “Discrimination may occur

either by disparate treatment or disparate impact.” M ountain Side, 56 F.3d at

1250. A disparate-treatment claim requires proof of “differential treatment of

similarly situated persons or groups,” Bangerter v. Orem City Corp., 46 F.3d 1491,

1501 (10th Cir. 1995) (internal quotation marks omitted); the discrimination must

be intentional, Tsombanidis v. W. Haven Fire Dep’t, 352 F.3d 565, 573 (2d Cir.

-9-
2003). A disparate-impact claim, on the other hand, challenges a facially neutral

policy that “actually or predictably results in . . . discrimination.” Huntington

Branch, NAACP v. Town of Huntington, 844 F.2d 926, 934 (2d Cir.) (internal

quotation marks omitted), aff’d, 488 U.S. 15 (1988). The plaintiff need not show

that the policy was formulated with discriminatory intent. See id. Additionally, “a

refusal to make reasonable accommodations in rules, policies, practices, or

services” as may be “necessary to afford [handicapped] person[s] equal

opportunity to use and enjoy a dwelling” is prohibited. 42 U.S.C. § 3604(f)(3)(B);

see Keys Youth Servs., Inc. v. City of Olathe, Kan., 248 F.3d 1267, 1275 (10th Cir.

2001).

“To establish a prima facie case of disparate impact discrimination,

plaintiffs must show that a specific policy caused a significant disparate effect on

a protected group.” M ountain Side, 56 F.3d at 1251. “Once plaintiffs establish a

prima facie case of disparate impact, the burden shifts to the defendant to produce

evidence of a genuine business need for the challenged practice.” Id. at 1254

(internal quotation marks omitted). In weighing the defendant’s justifications

against the disparate impact, we consider three factors:

(1) the strength of the plaintiff’s showing of discriminatory effect; (2)
the defendant’s interest in taking the action complained of; and (3)
whether the plaintiff seeks to compel the defendant affirmatively to
provide housing for members of a protected class or merely to restrain
the defendant from interfering with individual property owners who
wish to provide such housing.

-10-
Id. at 1252.

In our view, the Reinharts have failed to “show that a specific policy caused

a significant disparate effect on a protected group.” Id. at 1251. The Reinharts

have therefore not established a prima facie case, and we need not address the

three factors articulated in M ountain Side. See Huntington, 844 F.2d at 935

(factors weighing plaintiff’s showing against defendant’s justifications “are to be

considered in a final determination on the m erits rather than as a requirement for a

prima facie case”).

The Reinharts’ disparate-impact claim is premised on the alleged additional

costs imposed by the new regulations. These costs, they say, make it impossible

for them to provide affordable housing, thereby injuring protected groups. W e

recognize that one court has suggested that a disparate-impact claim based solely

on increased costs is not cognizable under the FHA. See H emisphere, 171 F.3d at

440. But we need not decide that issue. Even if such a claim could be made, the

Reinharts fall short. To establish that the new regulations disparately impact a

protected group under their theory, they would need to show that the new

regulations increase the cost of a dwelling by some amount and then show that this

increase disparately impacts the ability of members of the protected group to buy a

dwelling— that is, to the extent that the higher price reduces the size of the

purchaser market for the dwelling, the reduction is disproportionately high for the

protected group. These requirements simply reflect what it means for a specific

-11-
policy (in this case, the new regulations) to affect a protected group disparately.

See Hallmark Developers, Inc. v. Fulton County, Ga., 466 F.3d 1276, 1286 (11th

Cir. 2006) (when evaluating disproportionate impact, court looks to the subset of

the population affected by the challenged policy); Tsombanidis, 352 F.3d at 575

(disparate-impact claims are premised on a comparison between the composition

of those affected and those unaffected by a facially neutral policy).

It is not enough for the Reinharts to show that (1) a regulation would

increase housing costs and (2) members of a protected group tend to be less

wealthy than others. It is essential to be able to compare who could afford the

housing before the new regulations with who could afford it afterwards. For

example, it may be that no members of protected groups could afford homes in the

Reinhart development even if the former development regulations stayed in place.

Or it may be that anyone who could afford a home built under the former

regulations could still afford a home built under the new ones. In either of these

situations there is no disparate impact on a protected group. 2 Accordingly, the

2
An oversimplified example may illustrate the point. Assume that there are
20 people in the County, 10 of whom belong to a protected group. The following
table shows the highest price for a home that each of the 20 can afford. Each row
reflects the number of people who can afford a home w ith a price greater than the
labeled amount on the next lower row but no greater than the labeled amount for
that row . (Thus, the person on the “$200,000” row can afford a $200,000 house
but not a $210,000 one.) The two cells in the row state how many of that number
are in the protected group and how many are not.

(continued...)

-12-
Reinharts must provide evidence indicating before-and-after costs of dwellings and

the percentages of protected and nonprotected persons who will be priced out of

the market as a result of the increase. This they have failed to do— by a long shot.

At summary judgment the Reinharts provided evidence of the percentages of

protected groups and of the general population of the County that could afford

homes costing up to $200,000. They also provided evidence that the cost of

2
(...continued)
Protected Nonprotected
$250,000 0 1
$200,000 1 0
$150,000 0 2
$100,000 1 3
$75,000 2 2
$50,000 6 2

The table shows that members of the protected group are less wealthy and on the
whole less able than others to purchase more expensive homes. But no member
of the protected group will be priced out of the market if the price of a home is
increased from $125,000 to $150,000. Only one member of the group could
afford a $125,000 home and that member could also afford a $150,000 home (or
even a $200,000 home). A policy that causes prices to increase from $125,000 to
$150,000 would therefore not have a discriminatory impact. Similarly, an
increase in price from $90,000 to $115,000 would eliminate one of the members
of the protected group (10% of the protected group) but three of the others (30%
of the nonprotected group), hardly a disparate impact on the protected group. See
Hallmark, 466 F.3d at 1286 (disparate impact is measured by comparing the
percentage of protected members in the affected group to either (1) the protected
group’s percentage of the general population or (2) the nonprotected group’s
percentage of the affected group).

-13-
improvements to the average five-acre lot in the rural zone under the new land-use

regulations would be $54,109, compared to $23,703 for a two-acre lot under the

previous regulations, so that the sales price (for a lot of unspecified size) would

increase from about $30,000 to about $60,000.

Even assuming the reliability of this evidence, it is not enough to support

their disparate-impact claim. Although the Reinharts point to the increase in the

price of lots, and the definition of dwelling in the FHA includes vacant lots to be

used for housing, see 42 U.S.C. § 3602(b), the thrust of their claim is clearly that

the disparate impact on protected groups is caused by the increased price of

housing (else there is no point in their providing statistics regarding who can

afford a $200,000 home). Yet the Reinharts told the district court nothing about

the expected prices of homes in the development, or, more importantly, the amount

by which those prices would exceed what they would have been absent the change

in the regulations. And nothing in the Reinharts’ income data (from which they

could estimate the percentages of people who could afford a $200,000 house)

would enable anyone to calculate the specific impact on protected groups, as

compared to the general population, from an increase in home prices from $X to

$Y.

The showing by the Reinharts can be contrasted with showings of disparate

impact that have been declared sufficient by other circuit courts. In the leading

case of M etropolitan Housing Development Corp. v. Village of Arlington Heights,

-14-
558 F.2d 1283 (7th Cir. 1977), the plaintiffs challenged the village’s failure to

zone property to permit federally financed low-cost housing. The racial

implications were clear:

Because a greater number of black people than white people in the . . .
area satisfy the income requirements for federally subsidized housing,
the Village’s refusal to permit [the plaintiffs] to construct the project
had a greater impact on black people than on white people.
M oreover, Arlington Heights remains almost totally white in a
metropolitan area with a significant percentage of black people.
Since [the proposed development] would have to be racially
integrated in order to qualify for federal subsidization, the V illage’s
action in preventing the project from being built had the effect of
perpetuating segregation in A rlington Heights.

Id. at 1288.

In Huntington, 844 F.2d at 937, a developer sought to construct an

integrated, federally subsidized apartment complex on a site in a neighborhood

that was 98% white. The court held that the failure to rezone the site “had a

substantial adverse impact on minorities.” Id. at 938. To support this conclusion

the court cited evidence that “28% of minorities in Huntington and 11% of whites

have incomes below 200% of the poverty line,” id.; “7% of all Huntington families

needed subsidized housing, while 24% of the black families needed such housing,”

id.; “minorities constitute a far greater percentage of those currently occupying

subsidized rental projects compared to their percentage in the Town’s population,”

id.; and “a disproportionately high percentage (60% ) of families holding Section 8

certificates from the H ousing Authority to supplement their rents are minorities,

-15-
and an equally disproportionate percentage (61% ) of those on the waiting list for

such certificates are minorities,” id.; see also, e.g., Charleston Hous. Auth. v. U.S.

Dep’t of Agric., 419 F.3d 729, 734, 742 (8th Cir. 2005) (plan to demolish low-

income apartments, of which 46 out of 50 were occupied by African-American

tenants); Betsey v. Turtle Creek Assocs., 736 F.2d 983, 988 (4th Cir. 1984) (new

adults-only policy of apartment owner resulted in eviction of 54.3% of the

nonwhite tenants but only 14.1% of white tenants). Unquestionably, the Reinharts

have produced nothing like the evidence of disparate impact found in these cases.

W e recognize that our reasoning here differs from that employed by the

district court. That court looked to Hemisphere, 171 F.3d at 440, in concluding

that the Reinharts had failed to establish a prima facie case of disparate impact

because the increased costs of development affected all residents of the County.

The Reinharts and an amicus curiae brief filed by the National Association of

Home Builders both challenge the applicability of Hemisphere. But we did not

need to address that issue. Rather, we have affirmed on a ground not relied on by

the district court but raised by Defendants in the district court and this court. See

M edina, 960 F.2d at 1500 (in reviewing summary-judgment orders, we “may

affirm the district court’s order on any grounds adequately presented below ”).

-16-
III. C ON CLU SIO N

W e GRANT the National Association of Home Builders’ M otion for Leave

to File Amicus Brief out of Time. W e AFFIRM the district court’s grant of

summary judgment on the Reinharts’ disparate-impact claim.

-17-