Comm Ser Inc v. Wind Gap Mun Auth

Opinions of the United
2005 Decisions States Court of Appeals
for the Third Circuit
8-31-2005
Comm Ser Inc v. Wind Gap Mun Auth
Precedential or Non-Precedential: Precedential
Docket No. 04-2255
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 04-2255
COMMUNITY SERVICES, INC.,
t/a COMMUNITY SERVICES GROUP
v.
WIND GAP MUNICIPAL AUTHORITY,
Appellant
Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil No. 02-cv-08366)
District Judge: Honorable Mary A. McLaughlin
Argued January 24, 2005
Before: SCIRICA, Chief Judge, and
RENDELL, and FISHER, Circuit Judges
(Filed: August 31, 2005 )
Robert J. Sugarman [ARGUED]
Sugarman & Associates
Robert Morris Building, 11th Floor
100 North 17th Street
Philadelphia, PA 19103
Counsel for Appellant
J. Dwight Yoder
Gibbel, Kraybills & Hess
41 East Orange Street
Lancaster, PA 17602
Robert W. Meek [ARGUED]
Disabilities Law Project
1315 Walnut Street, Suite 400
Philadelphia, PA 19107
Counsel for Appellee
OPINION
2
RENDELL, Circuit Judge
Community Services, Inc., t/a Community Services
Group (“CSG”), a for-profit corporation that provides caretaker
services for persons with disabilities, brought this action against
the Wind Gap Municipal Authority (“Authority”), the municipal
agency that administers sewer services in Wind Gap Borough,
alleging violations of the Fair Housing Amendments Act
(“FHAA”), 42 U.S.C. § 3601 et seq. CSG claims that the
Authority violated the FHAA by charging increased fees to, and
imposing additional administrative burdens upon, a house leased
and used by CSG to provide caretaker services to three mentally
retarded women residing there on the basis that the house was
a “personal care home,” and hence a “commercial” facility,
under the relevant regulations governing sewer service. The
District Court granted summary judgment to CSG, principally
because it concluded that the Authority’s classification of the
house as a “personal care home” was a proxy for handicapped
status and, therefore, the regulation discriminated on its face
based on disability. Because we disagree with the District
Court’s conclusion that the regulatory classification and
treatment of the house constituted disparate treatment “because
of” a handicap, we will reverse and remand.
3
I. Factual Background
The house at issue is a single-story, three-bedroom home
located in a residential community at 250 East First Street, Wind
Gap Borough, Northampton County, Pennsylvania. The house
was built in 1965 by the family of one of its current residents,
Cindy A. Both Cindy and her mother lived in the home until
1999.
In 1995, as Cindy’s mother’s health was declining, the
family established a trust for the benefit of Cindy and her three
siblings. One of the primary purposes of the trust was to ensure
that Cindy, who was born with Down’s Syndrome, would be
adequately cared for as she and her mother grew older. To this
end, the deed to the house was transferred to the trust, and
Cindy’s sister arranged for in-home services for Cindy and her
mother through the Northampton County Mental Health/Mental
Retardation Office (“MH/MR Office”) and the Northampton
County Office of Aging, respectively. By 1997, the in-home
services had been increased to include a full-time caretaker. In
November 1999, Cindy’s mother moved out of the house and
into a nursing home.
Cindy continued to live in the house with the assistance
of a full-time caretaker funded jointly by her family and the
MH/MR Office. The following year, however, when the County
and the family determined that they no longer had the resources
to continue funding full-time, personal assistance for Cindy,
4
they arranged for two other women in need of similar services,
Cassie and Linda, to move into the house permanently in
December 2000. All three women, adults in their forties and
fifties, have mental retardation and, as the District Court found,
although they are substantially limited in their ability to learn,
work, communicate, and care for themselves, with the assistance
of a caretaker, the women are able to conduct their daily life
activities and live together in a family-like manner.
The caretaker services are provided by CSG, which
provides both residential and non-residential services to persons
with disabilities in several counties in Pennsylvania, including
Northampton County. CSG leases the house from the trust and
works with the MH/MR Office to meet state and federal
requirements, including the documentation incident to the
performance of services and obtaining reimbursement from
funding sources. CSG’s caretakers assist Cindy, Cassie, and
Linda with their daily activities, such as bathing, food
preparation, housecleaning, and transportation (via a mini-van
garaged at the house) to the women’s day program and
vocational rehabilitation. The women do not require or receive
clinical care, therapy, rehabilitation, or other similar services at
the home. Typically, there are one or two caretakers at the
house when the women are at home and no caretakers in the
house when the women are at their programs during the day.
One caretaker stays overnight, but does not sleep in the house.
Once a month the caretakers have a two-hour meeting with a
supervisor at the house.
5
In September 2000, CSG obtained zoning approval from
the Wind Gap Zoning Hearing Board in preparation for Cassie’s
and Linda’s move to the house. Although the house was zoned
for use as a single-family dwelling but not a group home, the
Board granted a variance, as a reasonable accommodation under
the FHAA, for CSG to operate a “Community Living
Arrangement” at the house. The Board subsequently notified
the Borough of Wind Gap and the Authority of the approval. At
meetings of the Authority’s board, Cindy’s sister and CSG’s
regional director explained that CSG would provide caretakers
to assist the residents, that the house would be used as a family
residence, and that there would be no change in the use of the
property.
On October 16, 2000, the Authority sent Cindy’s sister a
letter informing her that it was necessary to apply for a sewer
connection permit and submit a feasibility review agreement
along with a $500 deposit to determine the use of the home.
CSG submitted the feasibility review agreement, applied for a
sewer connection permit, and submitted the deposit on
November 9, 2000. At the same time, CSG also requested a
reasonable accommodation under the FHAA to allow the house
to remain classified as residential. As explained in a letter dated
November 13, 2000, the Authority returned the uncashed check
6
and declined to consider the application because the documents
were not executed by the deed owner, i.e., the trust.1
In December 2000, CSG notified the Authority that Linda
and Cassie were moving into the house that month. In January
2001, the Authority changed the house’s sewer service
classification from “residential” to “commercial” and increased
the number of “Sewer Billing Units” (“SBUs”) or “Equivalent
Dwelling Units” (“EDUs”), the measure by which the Authority
charges for sewer service, from one to two. Under the “Rules
and Regulations Governing Sewer Services When Obtained
from Sewer System of Wind Gap Municipal Authority”
(“Regulations”) in effect at the time, a “Residential Unit” was
defined as “a private dwelling unit, a dwelling unit in a double
house or in a row of connecting houses, or a dwelling unit in an
apartment building, condominium or in any other multiple
dwelling or multiple use structure,” and all such units were
assessed one (1) SBU. The “Commercial Unit” classification
was defined by a schedule assessing a variable number of EDUs
to a unit based on whether it was considered, inter alia, a
“House, Apartment, or Condominium”; “Trailer”; “Hotel,
1
The issue of whether the trust, or CSG, had the obligation, or
right, to deal with or seek accommodation from the Authority
has not been fully developed, although it appears that the record
property owner is viewed as having the sole authority to bind
and represent the property for the purpose covered by the
ordinance.
7
Nursing Home, Personal Care Home, or Boarding House
(without Restaurant or Bar, Dining or other Business)”;
“Restaurant and/or Bar or Tavern (without Residence)”;
“Restaurant and/or Bar or Tavern (with Residence); “Fitness
Center without Showers, Pools, Sauna, Hot Tub”; “Offices and
Multi-Use Business Facilities”; “Photo Lab”; or “Car Wash.” 2
2
These classifications were defined in Sections 9.02 and 9.03
of Article IX (“Rules for Determining Number of Sewer Billing
Units”) of the Regulations. These sections were subsequently
amended on September 17, 2001, several months after the house
was reclassified. Under the revised Regulations, units were
classified as “residential” or “non-residential.” A “residential
dwelling unit” was defined as “a dwelling unit with a kitchen or
kitchenette and a bathroom with toilet facilities, whether
constructed as a private dwelling unit, a dwelling unit in a
double house or in a row of connecting houses, a trailer, or a
dwelling unit in an apartment building, condominium or in any
other multiple dwelling or multiple use structure.” A “non-
residential unit” was defined by a schedule divided into three
categories, “Home Based Businesses” (businesses operated by
a resident and no more than one employee from outside the
home), “Commercial Residential Establishments” (including but
not limited to hotels, motels, nursing homes, personal care
homes, boarding houses, assisted living or any similar facilities),
and “Other Commercial Establishments” (including by not
limited to restaurants, bars, food stores, fitness centers, banks,
etc.). Although the revised Regulations were not used to
reclassify the house, as we explain below, an analysis of CSG’s
8
The Authority did not offer an explanation for the
reclassification, nor was one requested by the trust or CSG.
In May 2001, the Authority sent a letter to the trust
demanding that it pay the $500 deposit and a $2,100 tapping fee.
Counsel for CSG responded by requesting that the house be
classified as a single-family residence and that the Authority
grant a reasonable accommodation. The Authority did not
respond. CSG continued to pay the increased quarterly sewage
bill under protest. In November 2001, counsel for CSG
requested an explanation for the reclassification. The Authority
did not respond. On July 3, 2002, the Authority filed a
municipal lien for $2,200 against the property for the trust’s
failure to pay the tapping fee. CSG paid the fee under protest on
August 22, 2002 in order to satisfy the lien and CSG’s counsel
sent a letter to the Authority’s solicitor to request an explanation
for the reclassification. The solicitor did not respond. On
October 7, 2002, CSG’s counsel sent a second letter to the
solicitor; this letter also went unanswered. The municipal lien
on the house was not released until July 16, 2003, subsequent to
the filing of the Complaint initiating this action.
claims under either version of the Regulations yields the same
result.
9
II. Procedural History
CSG filed the instant action on November 7, 2002. See
Cmty. Servs. Group v. Wind Gap Mun. Auth., Civ. A. No. 02-
8366, 2004 U.S. Dist. LEXIS 6689 (E.D. Pa. Apr. 1, 2004). The
Complaint generally averred that in providing services to the
house the Authority had violated the FHAA by discriminating
against plaintiffs on the basis of the house’s residents’
disabilities. During discovery, the Administrator of the
Authority, Robert D. Hahn, explained for the first time that the
Authority reclassified the house because the lessee of the
property, CSG, was a for-profit company using the house as a
“personal care home,” a facility that was expressly included in
the “commercial” classification under the Regulations. At the
completion of discovery, both parties moved for summary
judgment, and after a hearing on February 13, 2004, the District
Court granted summary judgment to CSG. The Court concluded
that the regulation on which the Authority based the
reclassification of the house to “commercial” because it was a
“personal care home” discriminated against persons who need
“personal care,” and because such persons are by definition
“handicapped” under the FHAA, the regulation violated the Act.
Id. at *1-2.
The District Court first noted that CSG had brought three
FHAA claims, the first two alleging that the Authority’s policies
and actions constituted disparate treatment and disparate impact
discrimination and the third alleging that the Authority failed to
10
grant a reasonable accommodation. Id. at *16-18. Of these
three claims, the Court focused primarily on the disparate
treatment claim, and more specifically, on analyzing whether the
regulation upon which the Authority reclassified the house was
facially discriminatory. Id. at *18-26. The Court noted at the
outset that if the regulation made a classification on the basis of
“homes for the handicapped,” it would clearly violate the
FHAA. Id. at *18. The question, then, was whether the
classification of the house as a “personal care home” coincided
with or was a “proxy” for this clearly unlawful classification.
Id.The Court discussed the development of the “proxy”
theory in a number of facially discriminatory classification cases
dealing with proxies for “handicapped” under the FHAA,
specifically relying on Horizon House Developmental Services,
Inc. v. Township of Upper Southampton, 804 F. Supp. 683, 694
(E.D. Pa. 1992), aff’d, 995 F.2d 217 (3d Cir. 1993), where the
District Court had concluded that an ordinance imposing a
1,000-foot distance requirement between homes where
“permanent care or professional supervision is present” was
facially discriminatory because it singled out for disparate
treatment individuals who were unable to live independently
and, thus, were “handicapped” under the FHAA definition.3
3
The FHAA defines “handicap” as follows:
“Handicap” means, with respect to a person–
(1) a physical or mental impairment which
11
The Court reasoned that because personal care homes provide
professional personal care and supervision, and residents who
require personal care in their homes are not able to live on their
own and need assistance with their daily life activities, “personal
care home” was a proxy for “handicapped” and the ordinance
was, therefore, facially discriminatory. Cmty. Servs. Group,
2004 U.S. Dist. LEXIS 6689, at *22.
Further, the Court noted that the Authority only first
offered an explanation for the reclassification during the
litigation when Administrator Hahn explained in his deposition
that the house was reclassified because CSG was a for-profit
company and the house was being used as a “personal care
home,” a facility that was expressly included in the
“commercial” classification under the Regulations. The Court
rejected this explanation because the ordinance did not provide
substantially limits one or more of such person’s
major life activities,
(2) a record of having such an impairment,
or
(3) being regarded as having such an
impairment,
but such term does not include current, illegal use
of or addiction to a controlled substance (as
defined in section 102 of the Controlled
Substances Act (21 U.S.C. 802)).
42 U.S.C. § 3602(h).
12
that only “for-profit” personal care homes were to be classified
as commercial, and even if it did, it would still violate the
FHAA because the Act does not protect only non-profit entities.
The District Court then turned its attention to whether
there was a valid justification for treating personal care homes
differently from residential dwellings. It rejected the
commercial classification and the Authority’s purported interest
in applying rates uniformly to all for-profit customers. Id. at
*25. The Court did recognize that the Authority had a legitimate
interest in using an efficient rating system, but determined that
there were less discriminatory alternatives to serve that interest,
including actually classifying properties based on for-profit
status or single-family residences versus larger buildings, or by
basing its ratings on the number of occupants per square foot.
Id. at *26.
Having held that the ordinance was facially
discriminatory, the Court noted that it need not decide the
plaintiff’s other two claims based on disparate impact and denial
of a reasonable accommodation. However, the Court then
proceeded to discuss both claims very briefly, setting out the
standards for evaluating such claims and concluding that: (1) the
classification would have a disproportionate impact on disabled
people as residents of “personal care homes” and, again, the
Authority had no legitimate reason for the classification, and
(2) the Authority never responded to CSG’s numerous letters
requesting a waiver of the increased fees and administrative
13
burdens and the Authority had not shown that the request was
not reasonable in light of the fact that the sewer usage of the
house was less intensive than other “residential” dwellings. Id.
at *26-29. At the conclusion of its opinion, the Court noted that
“the plaintiff’s motion should be granted on those two claims as
well.” Id. at *28-29.4
III. Jurisdiction and Standard of Review
The Authority appeals the District Court’s decision,
arguing that the Court erred: (1) in its determination that the for-
profit status of CSG was not a valid reason for classifying the
house as commercial, (2) in its viewing disputed facts in a light
most favorable to the party moving for summary judgment, and
(3) in its analysis of the disparate impact and reasonable
accommodation claims. The District Court had jurisdiction over
CSG’s FHAA claims under 28 U.S.C. § 1331 and 42 U.S.C.
4
The status of the request for reasonable accommodation
remains unclear. At oral argument and in correspondence to the
Court after argument, counsel for the Authority maintained that
the Authority would consider a request for a reasonable
accommodation by the trust, the deed owner of the property, but
did not and would not consider such a request from CSG. As an
alternative to the Authority’s suggestion that we remand the
matter to it to consider such a request by the trust, the parties
agreed to attempt to mediate the dispute. Mediation was
unsuccessful.
14
§ 3613(a), and we have jurisdiction to review the final decision
of the District Court under 28 U.S.C. § 1291. We exercise
plenary review over the District Court’s grant of summary
judgment, applying the same test as the District Court.
Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir.
1976). To affirm the grant of summary judgment, we must be
convinced 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 when the facts are viewed in the light most favorable to the
non-moving party. Fed. R. Civ. P. 56(c).
IV. Discussion
A. FHAA Background
The Fair Housing Act (“FHA”), passed by Congress as
Title VIII of the Civil Rights Act of 1968, prohibits housing
discrimination on the basis of, inter alia, race, gender, and
national origin. 42 U.S.C. § 3601 et seq. Under the FHAA,
which Congress passed in 1988 to extend the coverage of the
FHA to include people with disabilities, it is unlawful:
To discriminate against any person
in the terms, conditions, or
privileges of sale or rental of a
dwelling, or in the provision of
services or facilities in connection
15
with such dwelling, because of a
handicap of–
(A) that person; or
(B) a p e r s o n r e s i d i n g i n o r
intending to reside in that
dwelling after it is so sold,
rented, or made available; or
(C) any person associated with
that person.
42 U.S.C. § 3604(f)(2). By its express terms, this section
applies to “the provision of services or facilities” to a dwelling,
such as sewer service, and courts have specifically allowed
claims under this section to be brought against municipalities
and land use authorities. See generally Lapid-Laurel, L.L.C. v.
Zoning Bd. of Adjustment, 284 F.3d 442 (3d Cir. 2002).
Further, under 42 U.S.C. § 3604(f)(3)(B), discrimination
includes “a refusal to make reasonable accommodations in rules,
policies, practices, or services, when such accommodations may
be necessary to afford such person equal opportunity to use and
enjoy a dwelling.”
Plaintiffs alleging violations of the FHAA under these
sections may bring three general types of claims: (1) intentional
discrimination claims (also called disparate treatment claims)
16
and (2) disparate impact claims, both of which arise under §
3604(f)(2), and (3) claims that a defendant refused to make
“reasonable accommodations,” which arise under §
3604(f)(3)(B). See Lapid-Laurel, 284 F.3d at 448 n.3. To
evaluate these claims under the FHAA, courts have typically
adopted the analytical framework of their analogues in
employment law, including their coordinate burden-shifting
analyses once plaintiff has made a prima facie showing of
discrimination under a specific claim.5
5
See Lapid-Laurel, 284 F.3d at 466 (“[W]hen reviewing
disparate impact claims brought under the FHAA, we have
borrowed from the framework of Title VII disparate impact
claims.”); see also, e.g., Tsombanidis v. W. Haven Fire Dep’t,
352 F.3d 565, 575 (2d Cir. 2003) (“When examining disparate
impact claims under the FHAA and ADA, we use Title VII as
a starting point.”); Gamble v. City of Escondido, 104 F.3d 300,
304 (9th Cir. 1997) (“We apply Title VII discrimination analysis
in examining [FHA] discrimination claims.”); Larkin v. Mich.
Dep’t of Social Servs., 89 F.3d 285, 289 (6th Cir. 1996) (“Most
courts applying the FHA, as amended by the FHAA, have
analogized it to Title VII of the Civil Rights Act of 1964 . . . .”);
Bangerter v. Orem City Corp., 46 F.3d 1491, 1503 (10th Cir.
1995) (looking to “the language of the FHAA itself, and to the
manner in which analogous provisions of Title VII have been
interpreted” in evaluating a disparate treatment claim).
17
1. Disparate treatment: Discriminatory animus
claims & facially discriminatory classification
claims
Generally, to prevail on a disparate treatment
claim, a plaintiff must demonstrate that some discriminatory
purpose was a “motivating factor” behind the challenged action.
See Cmty. Hous. Trust v. Dep’t of Consumer & Regulatory
Affairs, 257 F. Supp. 2d 208, 225 (D.D.C. 2003) (“It is well
settled that a defendant’s decision or action constitutes disparate
treatment, or intentional discrimination, when a person’s
disability was a ‘motivating factor’ behind the challenged action
or decision.”); Tsombanidis v. City of W. Haven, 129 F. Supp.
2d 136, 151 (D. Conn. 2001) (citing Arlington Heights v. Metro.
Hous. Dev. Corp., 429 U.S. 252, 265 (1977)). The
discriminatory purpose need not be malicious or invidious, nor
need it figure in “solely, primarily, or even predominantly” into
the motivation behind the challenged action. Cmty. Hous. Trust,
257 F. Supp. 2d at 225; Tsombanidis, 129 F. Supp. 2d at 151;
see also Horizon House, 804 F. Supp. at 696 (“In order to prove
intentional discrimination it is not necessary to show an evil or
hostile motive. It is a violation of the FHAA to discriminate
even if the motive was benign or paternalistic.”). The plaintiff
is only required to “show that a protected characteristic played
a role in the defendant’s decision to treat her differently.” Cmty.
Hous. Trust, 257 F. Supp. 2d at 225 (citing Arlington Heights,
429 U.S. at 265).
18
Where a regulation or “policy facially
discriminates on the basis of the protected trait, in certain
circumstances it ‘may constitute per se or explicit . . .
discrimination’” because “the protected trait by definition plays
a role in the decision-making process, inasmuch as the policy
explicitly classifies people on that basis.” DiBiase v.
SmithKline Beecham Corp., 48 F.3d 719, 726 (3d Cir. 1995)
(quoting EEOC v. Elgin Teachers Ass’n, 780 F. Supp. 1195,
1197 (N.D. Ill. 1991)). Hence, where a plaintiff demonstrates
that the challenged action involves disparate treatment through
explicit facial discrimination, or a facially discriminatory
classification, “a plaintiff need not prove the malice or
discriminatory animus of a defendant.” Bangerter v. Orem City
Corp., 46 F.3d 1491, 1501 (10th Cir. 1995). Rather, the focus
is on the “explicit terms of the discrimination.” Int’l Union,
United Auto. Aerospace & Agric. Implement Workers v.
Johnson Controls, Inc., 499 U.S. 187, 199 (1991).
2. Facially discriminatory classifications:
“Proxy” theory
Consistent with the focus on language rather than
a showing of discriminatory animus in evaluating facially
discriminatory classification claims, courts have developed a
“proxy” theory for such claims, recognizing that a regulation or
policy cannot “use a technically neutral classification as a proxy
to evade the prohibition of intentional discrimination,” such as
classifications based on gray hair (as a proxy for age) or service
19
dogs or wheelchairs (as proxies for handicapped status).
McWright v. Alexander, 982 F.2d 222, 228 (7th Cir. 1992). For
example, in Erie County Retirees Ass’n v. County of Erie, we
concluded that an employer violates the Age Discrimination in
Employment Act (“ADEA”) by offering Medicare-eligible
retirees different health coverage from that offered to
non-Medicare-eligible retirees because “Medicare status is a
direct proxy for age,” as eligibility “‘follow[s] ineluctably upon
attaining age 65.’” 220 F.3d 193, 211 (3d Cir. 2000) (alteration
in original) (quoting Erie County Retirees Ass’n v. County of
Erie, 91 F. Supp. 2d 860, 867 (W.D. Pa. 1999)). Such a
situation was, we explained, distinguishable from the situation
in Hazen Paper Co. v. Biggins, where an employer’s
termination of an employee a few weeks prior to attaining ten
years of service required for the vesting of pension benefits was
held by the Supreme Court not to be disparate treatment under
the ADEA because, although age and years of service may
“correlate,” they are “analytically distinct . . . and thus it is
incorrect to say that a decision based on years of service is
necessarily ‘age based.’” 507 U.S. 604, 611 (1993). Our
conclusion in Erie County that Medicare status is “an age-based
criterion” was consistent with the reasoning of the Court of
Appeals for the Second Circuit in Johnson v. New York, 49 F.3d
75 (2d Cir. 1995). There, the court held that an air base’s
termination of a security guard when the guard attained age 60
and could not maintain active status in the Air National Guard
due to forced resignation in that organization violated the
ADEA because the plaintiff’s “age and termination [we]re
20
inextricably linked” and the sole cause of plaintiff’s loss of dual
status and his consequent termination was his age. Id. at 79-80.6
3. Discrimination “because of a handicap”
Regardless of whether plaintiff frames a disparate
treatment claim under the FHAA as one alleging discriminatory
animus or one alleging a facially discriminatory classification,
the most fundamental element of the claim is that plaintiff must
demonstrate that defendant’s alleged discrimination was
“because of a handicap.” 42 U.S.C. § 3604(f)(2). This
requirement, plainly read from the language of the FHAA, is
very often glossed over or, perhaps, so obvious as not worthy of
discussion.7 Here, however, it does appear to us to be so
6
Consistent with Johnson Controls and DiBiase, we also noted
in Erie County that whether the employer possessed a
“malevolent motive or acted on the basis of hostile age-based
stereotypes [wa]s irrelevant” as “a policy explicitly based on a
prohibited factor . . . is illegal regardless of the underlying
motive.” 220 F.3d at 212 (quoting Johnson Controls, 499 U.S.
at 199-200).
7
For example, in a claim alleging discriminatory animus,
where plaintiff adduces evidence that defendant had an “intent”
to discriminate, the showing of intent easily satisfies to prove
the proscribed “basis.” However, “intent” to discriminate and
“basis” for discrimination are fundamentally different concepts.
“Intent” need not be proven in a facially discriminatory
21
obvious and thus the focus of our inquiry on this point is
whether “handicapped” or “disabled” status–the protected trait
under the FHAA–was being used as the basis for different
treatment. Cf. DiBiase, 48 F.3d at 726 (explaining that inquiry
involves whether a “policy facially discriminates on the basis of
the protected trait” and “explicitly classifies people on that
basis”) (emphasis added).
In the context of a facially discriminatory
classification claim, to determine whether the basis of the
alleged discrimination is indeed handicapped status, we must
examine the language of the challenged regulation or policy,
aided, if applicable, by any evidence of record that informs the
analysis. For example, as we indicated above, a classification
based on “service dogs” could, in many contexts, constitute a
proxy for discrimination “because of” a handicap. However,
were the challenged regulation to require “all domesticated
dogs” to submit to mandatory vaccination, the express inclusion
of “service dogs” would not discriminate “because of” a
handicap, it would discriminate because a service dog is a
“domesticated dog.” Here, we need to determine whether
classification claim or in a disparate impact claim, both of which
arise under § 3604(f)(2). However, to make out any claim for
discrimination (under the FHAA or another law) the improper
“basis” must be shown to be at the heart of the classification or
conduct.
22
different treatment of a “personal care home” was necessarily
“disability based.”
B. Analysis
The District Court concluded that because “personal care
home” coincided with the FHAA’s definition of “handicap,” the
use of the term constituted facial discrimination because of a
handicap and, consequently, the Authority’s assessment of
increased fees and burdens to the house violated the FHAA.
Yet, we are not so sure. First, we question whether, on this
record, “personal care home” necessarily means “home for the
disabled or handicapped.” “Handicap” is defined under the
FHAA as “(1) a physical or mental impairment which
substantially limits one or more of [a] person’s major life
activities, (2) a record of having such an impairment, or (3)
being regarded as having such an impairment.” 42 U.S.C.
§ 3602(h); see also supra note 3. “Personal care home,”
however, is nowhere defined in the regulation at issue. On its
face, the term “personal care home” has nothing to do with
handicapped or disabled status. Without any context to inform
our interpretation of this term, “personal care home” could fairly
be used to describe any number of facilities providing services
to residents who may not necessarily have, have had, or be
regarded as having a physical or mental impairment that
substantially limits a major life activity under the FHAA
definition of “handicap.” This could include a home where the
elderly; juveniles (including juvenile delinquents, abused or
23
neglected children, or orphans); the homeless; battered women;
or ex-criminal offenders would be cared for. See, e.g., Horizon
House, 804 F. Supp. at 694; Alliance for the Mentally Ill v. City
of Naperville, 923 F. Supp. 1057, 1071 (N.D. Ill. 1996).
Second, even if “personal care home” were equated with
“homes for the disabled or handicapped,” we do not believe that
the regulatory classification of such a house as “commercial”
was necessarily “because of” the disabled or handicapped status
of the house’s residents rather than the “commercial” nature of
CSG as the lessee of the property. The testimony of
Administrator Hahn offers further support for a non-
discriminatory rationale. Thus, we do not agree that this case
lends itself to a facially discriminatory classification theory
because the challenged regulation does not “facially”
discriminate against CSG “because of” the handicapped status
of the residents.
Although we are examining the classification on its face,
we should nonetheless look at the record evidence and go
beyond the use of a potentially “technically neutral
classification,” McWright, 982 F.2d at 228, so as to ferret out
any indicia that the disparate treatment was covertly “because
of” a handicap, and also to see if the opposite is the case. In this
sense, the term “facially discriminatory classification” seems to
be a bit of a misnomer, but it is not, for we are scrutinizing
conduct to better understand the basis for the facial treatment.
24
We find this fact pattern to be distinguishable from most
of the true “proxy” cases where courts have had little difficulty
leaping from the term “personal care home”–or something
substantially equivalent–to discrimination based on handicapped
status because it was obvious, in light of the language and the
record evidence, that the term was used to classify plaintiff’s
facility and treat it differently “because of” the disabled status
of the facilities’ residents. See, e.g., Larkin v. Mich. Dep’t of
Social Servs., 89 F.3d 285 (6th Cir. 1996); Cmty. Hous. Trust,
257 F. Supp. 2d 208; Children’s Alliance v. City of Bellevue,
950 F. Supp. 1491 (W.D. Wash. 1997); Alliance for the
Mentally Ill, 923 F. Supp. 1057; Horizon House, 804 F. Supp.
683. A review of these cases reveals that this leap was aided by
a combination of four common elements that are lacking here:
first, the alleged discriminatory classification was actually
defined by the challenged regulation in terms that largely
coincided with the FHAA definition of “handicap”; second, the
classification was used specifically to “single out” facilities for
handicapped individuals for different treatment “because of”
their disability; third, there was often direct or circumstantial
evidence of discriminatory animus indicating an intent to
discriminate “because of” the disabled status of the facilities’
residents; and fourth, the defendant’s purported reason for
treating plaintiff’s facility differently was predicated on a
justification for treating disabled persons differently that was of
questionable legitimacy.
25
In both Larkin and Horizon House, the courts struck
down laws that imposed distance requirements between
residential care facilities for persons who were “handicapped”
under the FHAA. In each case, the challenged law “singl[ed]
out for regulation group homes for the handicapped” with a
classification comprising only such facilities. Larkin, 89 F.3d
at 290 (noting that the Act, by its very terms, applied “only to
[adult foster care] facilities which . . . house the disabled, and
not to other living arrangements”); see also Horizon House, 804
F. Supp. at 694 (concluding that defendant township’s
reactionary enactment of an ordinance imposing a distance
requirement between plaintiff’s “family care homes” “singled
out for disparate treatment . . . those who are unable to live on
their own [and] who, in the language of the Fair Housing Act,
are ‘handicapped’”). In Alliance for the Mentally Ill, Children’s
Alliance, and Community Housing Trust, the courts invalidated
laws that singled out for regulation group homes for the
handicapped by distinguishing “family” homes from either
“residential board and care occupancies,” “group facilities,” or
“community-based residential facilities,” each latter
classification constituting a proxy for “handicapped” status.
Alliance for the Mentally Ill, 923 F. Supp. at 1070 (noting that
although the municipal fire code did not use the words
“handicapped” or “disabled,” special provisions for “residential
board and care occupancies”–defined as facilities that house
four or more unrelated persons “for the purpose of providing
personal care services”–applied primarily to handicapped
persons); Children’s Alliance, 950 F. Supp at 1496 (determining
26
that distinguishing “families” from “group facilities” based on
the presence of a “staff” providing “care and supervision for and
assistance with the daily living activities” was “a proxy for a
classification based on the presence of individuals under
eighteen and the handicapped as both groups require supervision
and assistance” and, therefore, facially discriminated on the
basis of familial and handicapped status); Cmty. Hous. Trust,
257 F. Supp. 2d at 221-22 (concluding that the definition of a
“community-based residential facility” as “a residential facility
for persons who have a common need for treatment,
rehabilitation, assistance, or supervision in their daily living”
called for the application of different standards to persons on the
basis of their disability, even though the law did not make such
a distinction expressly).
These cases are fundamentally different from what we
have here. First, regarding the language of the challenged
regulation, each of the above-cited cases involved a
classification that was expressly defined in terms that the court
found coincided with the FHAA definition of “handicap.” As
w e discussed above, here, the challenged
classification–“personal care home”–is not defined at all under
the regulation. Consequently, there is nothing on the face of the
regulation to suggest that “personal care home” necessarily
means “home for the disabled.”
Second, also regarding the language of the challenged
regulation, in the above-cited cases the challenged classification
27
was used to “single out” only facilities for the disabled for
different treatment with the only possible explanation being that
it was “because of” the disabled status of their residents. The
disabled status of the facilities’ residents was the dispositive
trait for the facilities’ classification and different treatment. In
the instant matter, however, the classification of the many
facilities subject to increased fees and burdens associated with
sewer service–the alleged discrimination–was broad-based, with
different sewer charges assessed against numerous different
types of facilities based on whether they were deemed
“residential” or “commercial.” The term “personal care
home”–the alleged proxy for disabled status–was not used to
“single out” facilities for assessment of increased fees. Rather,
the term was included in an illustrative list of a number of
different types of facilities used to encompass what the
Authority deemed to be “commercial” for the purpose of
assessing fees. Further, far from being singled out, “personal
care home” was grouped with other multi-adult rooming
facilities in a subset of the “commercial” list. This subset
included “hotels,” “motels,” “nursing homes,” and “boarding
houses,” the common characteristic of which appears to be that
all such facilities provide room and boarding services. Given
that the facilities in this group typically charge a fee for the
provision of these services, the logical inference is that
“personal care homes” fit within this subset of the “commercial”
category because “personal care homes” typically board adults
and have a “commercial” quality. As such, the label “personal
care home” does not, on its face, “single out for regulation
28
group homes for the handicapped” in the same way as was
present in the other cases referred to above. Larkin, 89 F.3d at
290. Disabled status was not, at least ostensibly, the dispositive
trait for different treatment. Additionally, this use of the term
“personal care home” does not demonstrate that “the protected
trait by definition plays a role in the decision-making process”
by classifying people on that basis.8 DiBiase, 48 F.3d at 726.
Third, beyond the language of the regulation, in a number
of the above-cited cases there was direct or circumstantial
evidence of discriminatory animus directed at plaintiff’s facility
8
The same conclusion follows from an evaluation of the
language used in the revised Regulations. Under the revised
Regulations, the primary classifications for assessing sewer fees
are “residential” and “non-residential” (rather than
“commercial”). “Personal care home,” listed under the “non-
residential” classification, is further classified as part of a group
titled “Commercial Residential Establishment[s],” defined as
“including but not limited to: Hotel or Motel, Nursing Home,
Personal Care Home, Boarding House, Assisted Living or any
similar facility.” Regarding the classification of “personal care
home,” the revised Regulations are not materially different from
the original Regulations, and, indeed, the fact that “personal care
home” is listed in a group expressly labeled “Commercial
Residential Establishment[s]” clearly indicates that the dual
“residential-commercial” character of these facilities, rather than
disabled status of their residents, is the basis for their being
classified as “non-residential.”
29
because the facility provided services to handicapped
individuals. Although a plaintiff need not prove–and,
consequently, a court need not find–“malice or discriminatory
animus of a defendant” under a facial discrimination claim,
Bangerter, 46 F.3d at 1501, clearly, evidence of some intent to
disadvantage a class of people makes the determination of the
basis for the overt disparate treatment much easier. See supra
note 7. There is no evidence in the record here that the
enactment of the regulatory provision or the Authority’s
reclassification of the house was motivated by any
discriminatory animus.9 Unlike the circumstances in Horizon
House, the Authority did not enact the Regulations in response
to CSG’s seeking zoning approval with the specific intent to
burden CSG, the trust, or the residents of the house. The
Regulations used to reclassify the house were already in force.
Also, unlike Horizon House, Alliance for the Mentally Ill,
9
The District Court expressly noted that “[a]lthough CSG
argues that there is evidence that the Authority was motivated by
discriminatory animus, the facial discrimination claim is the
basis of its motion for summary judgment.” Cmty. Servs.
Group, 2004 U.S. Dist. LEXIS 6689, at *17; see also Pl.’s Mem.
of Law in Supp. of Pl.’s M. for Summ. J. at 18 n.2 (“Although
there is evidence in this case that Defendant’s actions . . . were
motivated by discriminatory animus and/or the status of the
residents, Plaintiff is not pursuing summary judgment based on
an animus theory of disparate treatment. However, if this Court
denies summary judgment, Plaintiff reserves the right to present
that theory at trial.”).
30
Children’s Alliance, and Community Housing Trust, there is no
indication that there was any opposition by neighbors or other
agencies of the municipality. Indeed, the zoning approval
process, the hurdle at which a number of plaintiffs in the above-
cited cases fell, ended successfully for CSG with the Zoning
Hearing Board granting a variance to allow CSG to provide
caretaker services at the house. Lastly, there was no
“circumstantial evidence” of discriminatory animus of the
character noted in Children’s Alliance; there was no evidence of
a policy to “protect the neighborhood from the adverse impacts”
of group homes nor is Wind Gap lacking group homes.
Fourth, and last, in the above-cited cases, each
defendant’s purported reason for treating plaintiff’s facility
differently was predicated on some justification for treating
disabled persons differently, and such justification was found by
the court to be unsupported or otherwise invalid.10 Whereas in
10
Admittedly, that each defendant’s reason was framed as a
“justification” is due to the burden-shifting aspect of the
complete “discriminatory classification” analysis, i.e., once the
court determines that the regulation is facially discriminatory,
the burden shifts to the defendant to justify the discrimination.
In this sense, the defendant is forced, in anticipation of the
court’s conclusion on this point, to provide a rationale for the
challenged regulation that references a justification for treating
disabled persons differently. To apply this concept here and
conclude that because the Authority’s reason for the
31
these cases the reason for different treatment seemed little more
than makeweight, here we view it–upon initial examination
(which is all we really have presented to us as a matter of
record)–to be reasonable. It is not unreasonable, and most likely
within the discretion of the Authority as a matter of policy, to
presume that “commercial” facilities have a greater
proportionate use of the municipality’s sewer service as
compared to “residential” units and, therefore, should bear a
greater proportionate share of the cost of maintaining the
system. It is also not unreasonable and likely within the
Authority’s discretion to classify a facility exhibiting both
commercial and residential qualities as “commercial” for this
purpose. Hence, the Authority’s explanation that the house was
reclassified because it was being run by a for-profit corporation
is not unreasonable or inconsistent with a plain reading of the
regulation. Cmty. Servs. Group, 2004 U.S. Dist. LEXIS 6689,
at *23.
reclassification of the house was not predicated on some
justification for treating disabled persons differently, the
Authority must really have been treating CSG differently
because it is a commercial entity, is circular and ignores the
context in which this inquiry is made. However, given that the
court must ultimately assess the validity of the reason for
defendant’s disparate treatment (whether framed as a
justification for treating the disabled differently or not), a similar
assessment of the validity of the Authority’s reason is
informative here.
32
As the District Court noted, the Authority did not explain
why it was reclassifying the house when it did; this explanation
was provided by Administrator Hahn in his deposition. Id. The
District Court found this explanation to be unpersuasive for two
reasons. First, the classification did not state that only “for-
profit personal care homes” would be reclassified to
“commercial,” and schools and churches, which are typically not
“for-profit,” were classified as “commercial.” Id. Second, even
if the classification did apply to for-profit personal care homes,
it still violated the FHAA because “‘[t]he FHAA does not
require group home providers to give away their services, to
operate at a loss, nor to declare a particular tax status. If it did,
there would be far fewer residences for disabled persons than
there presently are.’” Id. at *23-24 (quoting United States v.
City of Chicago Heights, 161 F. Supp. 2d 819, 844 (N.D. Ill.
2001)).
Regarding the District Court’s first reason, as noted
above, the primary classification used to assess sewer charges,
per the original Regulations, was whether a unit was deemed
“residential” or “commercial.” That the label “personal care
home” is included in the “commercial” classification indicates
that all personal care homes, whether “for-profit” or
“non-profit,” are deemed by the Authority to be “commercial.”
Given this, we cannot agree that the failure to limit the
definition of “commercial” to “for-profit personal care homes”
requires that the house here must be deemed “residential.”
Furthermore, CSG is a for-profit company. Were CSG a non-
33
profit entity, there would be a stronger argument that the
classification of its facility as “commercial” was an
unreasonable application of the Regulations. This is the
principle the District Court was invoking in referencing the
Regulations’ classification of schools and churches as
“commercial.” However, such an as-applied challenge to the
Authority’s (mis)classification of a facility based on its
“commercial” versus “residential” character is not the basis of
CSG’s FHAA claim that the Regulation facially discriminates
on the basis of disability.11
The District Court’s second reason for rejecting the
Authority’s explanation for reclassifying the house was that the
FHAA does not require group home providers to be non-profit,
relying on City of Chicago Heights, 161 F. Supp. 2d at 844. In
that case, the Court struck down a zoning code that required all
group homes to be operated by non-profit agencies. The Court
11
Cf. Alliance for the Mentally Ill, 923 F. Supp. at 1074(“[R]esidents of lodging and rooming houses are not a protected
class under the constitution or under any statute, whereas
handicapped persons are a specifically protected class under the
FHAA. A municipality may impose special requirements on
residents of lodging and rooming houses provided that such
requirements bear a rational relationship to some legitimate
governmental purpose. Undoubtedly, such requirements could
rest on generalized assumptions about residents of lodging and
rooming houses.”) (citations omitted).
34
found the zoning code to violate the FHAA because it reduced
the number of residences available for disabled persons. Here,
the regulation impacts commercial establishments, assessing a
greater fee based on their commercial nature. Neither the
language of the regulation nor the record evidence reveals any
curtailment of services to the disabled that was apparent in City
of Chicago Heights. Accordingly, we do not find that case to be
helpful, let alone persuasive.
In short, given the facts as established by the record, we
disagree with the District Court’s conclusion that the use of the
term “personal care home” in the Regulations constitutes a
facially discriminatory classification “because of” a handicap
under the FHAA. While the term conceivably could be a proxy
for discrimination against the disabled in certain circumstances
(as very similar terms were in the above-cited cases), as we have
explained, this is a very different case. A plain reading of the
relevant regulation does not support the District Court’s
conclusion that “personal care home” is facially discriminatory
as singling out CSG for disparate treatment because of the
residents’ disabilities. Further, there is no record evidence of
discriminatory animus directed toward the disabled on the part
of the Authority, and the Authority’s explanation for the
reclassification is not plainly illegitimate or unsupportable.
For the foregoing reasons, we conclude that the District
Court erred in determining that the use of the term “personal
care home” was a facially discriminatory classification under the
35
FHAA. The language of the regulation and the record evidence
do not establish that the use of the term was facially
discriminatory “because of” a handicap. Additionally, CSG has
not pointed to anything in the record to adequately rebut the
Authority’s explanation that the reclassification and assessment
of increased fees and burdens was based on CSG’s
“commercial” character. Consequently, the award of summary
judgment to CSG on this claim should be reversed. Further,
given that there is no genuine issue of material fact on this point,
even when viewed in the light most favorable to CSG, summary
judgment should be granted in favor of the Authority.
C. CSG ’s disparate impact and reasonable
accommodation claims
Regarding the District Court’s consideration of CSG’s
disparate impact and reasonable accommodation claims, we
believe the Court’s analysis is flawed insofar as it followed
inexorably from the Court’s erroneous determination that the
regulation was facially discriminatory. Given that the Court’s
grant of judgment on the disparate impact claim was based in
large part on its erroneous determination that the Authority had
not presented a legitimate, non-discriminatory reason for
reclassifying the house, this ruling cannot stand. As to the
reasonable accommodation claim, we find that there are too
many questions of material fact surrounding this claim to
support the Court’s conclusions that CSG met its burden of
36
proof and that the Authority failed in its burden.12 Further, on
review of the record, it is clear that both parties (and the Court)
were more focused on the discriminatory classification claim
and, given the District Court’s error in finding a facially
discriminatory classification, the record has not been adequately
developed to support a grant of summary judgment on either of
these claims.
Accordingly, we will remand to the District Court for
further proceedings regarding these claims.
12
The most striking factual dispute, evident to us from
counsel’s post-argument correspondence to the Court, is
whether a valid request for an accommodation was presented to
the Authority (by CSG or the trust), or whether, if CSG had
presented a valid request for an accommodation, the Authority
responded. The existence of this issue undercuts the District
Court’s theory that CSG should prevail on this claim, at least in
part because the Authority failed to respond. Beyond this issue,
the District Court has not explained the bases for its conclusion
that CSG has met its burden of proof on a prima facie case for
failure to grant a reasonable accommodation, i.e., that the
requested accommodation was “‘(1) reasonable and (2)
necessary to (3) afford handicapped persons an equal
opportunity to use and enjoy housing.’” Lapid-Laurel, 284 F.3d
at 457 (quoting Bryant Woods Inn, Inc. v. Howard County, 124
F.3d 597 (4th Cir. 1997)).
37
V. Conclusion
For the reasons set forth above, we will REVERSE the
judgment of the District Court and REMAND for further
proceedings consistent with this opinion.
___________________
38