Opinion ID: 1451431
Heading Depth: 1
Heading Rank: 1

Heading: Plaintiffs' Price Discrimination Claims.

Text: Plaintiffs' complaints allege that the Insurers used a multi-tiered rate structure based in whole or in part on the racial composition of Kansas City zip code areas with the intentional and/or unintentional unlawful effect of extracting higher premium rates from homeowners in the predominantly black community. Their allegations of issues common to the class include: Whether [the Insurers] used separate rating territories to charge higher premium rates for risks located in the Community... than for comparable risks located in white communities. Whether [the Insurers] can provide any loss histories, or other actuarial or statistical data, to support [their] use of such segregated and discriminatory rating territories. Plaintiffs allege that the Insurers violated 42 U.S.C. § 3604(b), which bars race discrimination in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, as well as § 1981 and § 1982. Their prayers for relief seek a declaration that the Insurers violated these civil rights statutes, an injunction against any further conduct violating plaintiffs' rights, compensatory and punitive damages, and attorneys' fees and costs. Plaintiffs' allegations of unintentional unlawful discrimination seek relief on a disparate impact theory of Fair Housing Act liability, that is, challenges to practices that are fair in form, but discriminatory in operation. Griggs v. Duke Power Co., 401 U.S. 424, 431, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971). In a number of prior cases, we have recognized a disparate impact cause of action under the Fair Housing Act against governmental authorities. See, e.g., Darst-Webbe Tenant Ass'n Bd. v. St. Louis Hous. Auth., 417 F.3d 898, 902-03 (8th Cir.2005). Applying Department of Housing and Urban Development standards, we have recognized a disparate impact Fair Housing Act claim against private actors in another context. See United States v. Badgett, 976 F.2d 1176 (8th Cir. 1992). But at least with respect to insurers, the question is not free from doubt. See NAACP v. Am. Family Mut. Ins. Co., 978 F.2d 287, 290-91 (7th Cir.1992). However, the Insurers have not raised the issue and therefore we assume, without deciding, that private insurers may be liable under the Fair Housing Act on a disparate impact theory. [3] Seeking to deflect the significance of their disparate impact theory on the McCarran/Ferguson Act analysis, plaintiffs on appeal note that they complain of racially disparate treatment, or intentional discrimination, as well as disparate impact. They did not argue this distinction in the district court, which is reason enough to ignore it on appeal. Moreover, after twelve years of litigation, plaintiffs provide no factual basis for their conclusory allegations that the Insurers intentionally charged rates based on a homeowner's race. Their factually explicit allegations are that the Insurers used rating zones based on facially neutral risk factors that have a disparate racial impact. It is these disparate impact allegations that satisfied the threshold pleading requirement of Rule 8(a)(2)  allegations plausibly suggesting (not merely consistent with) unlawful conduct. Bell Atl. Corp. v. Twombly, ___ U.S. ___, 127 S.Ct. 1955, 1966, 167 L.Ed.2d 929 (2007). Viewing the complaints in their entirety, the lengthy litigation history, and plaintiffs' categorical argument that no Fair Housing Act claims are barred by the McCarran/Ferguson Act, we conclude their conclusory allegations of discriminatory intent are mere labels ... and a formulaic recitation of the elements of a cause of action. Id. at 1965. The point is important. Our opinion should not be read as deciding whether disparate treatment claims against Missouri insurers are barred by the McCarran/Ferguson Act. In this case, [t]he allegations of intentional race discrimination... do not appear to be preempted, but they are a diversion. Dehoyos v. Allstate Corp., 345 F.3d 290, 300 (5th Cir.2003) (Jones, J., dissenting).