Hood v. Midwest Savings Bank

ALDRICH, District Judge,

Dissenting.

I join the panel’s opinion in full with respect to its statement of the facts of this case. Because I believe that the panel articulates an unduly burdensome standard with regard to the establishment of a prima facie case of discrimination under the Fair Housing Act and the Equal Credit Opportunity Act, I respectfully dissent.

It is clear, as the panel notes, that Hood did not present direct evidence of racial discrimination pursuant to Midwest’s denial of his first loan application. The success of Hood’s suit therefore rests on his ability to make out a prima facie case using circumstantial evidence. The panel is indisputably correct in its articulation of the first three prongs of the test for establishment of such a prima facie case, namely: (1) that Hood was a member of a protected class; (2) that Hood applied for credit from Midwest; and (3) that Hood was denied credit, despite his qualifications. McDonnell Douglas v. Green, 411 U.S. 792 , 93 S.Ct. 1817 , 36 L.Ed.2d 668 (1973).

I question the panel’s analysis, however, as it applies to the disputed fourth prong of the McDonnell Douglas test. Here, precedent offers only diminutive and muddled guidance. The panel relies upon Michigan Protection and Advocacy Serv., Inc. v. Babin, 18 F.3d 337, 346 (6th Cir. 1994) and a more recent unpublished decision, Ward v. Union Planters National Bank, 1997 WL 201483 , 1997 U.S.App. LEXIS 8657 (6th Cir.1997), in requiring Hood to show that “(4) the defendants continued to engage in that type of transaction with other parties with similar qualifications.” Id.

However, merely articulating such a requirement does not dispose of the inquiry, or of Hood’s claims. Hood argues that he can show that defendants continued to engage in the relevant transactions. In dismissing this argument, the panel, like the District Court, reads “other parties” to mean other borrowers not in the protected class. (The District Court demanded a showing that “Midwest approved loans for nonminority applicants with similar qualifications.” (emphasis added))

*781 Yet the holdings relied upon by the panel do not necessitate such a reading of “other parties.” In Michigan Protection and Advocacy Services, we upheld a grant of summary judgment after determining that the plaintiffs failed to allege a proper “real estate-related transaction” under prong (2), and thus did not proceed to examine the records of any “other parties.” 18 F.3d at 346 . And while our holding in Ward did rest upon the fourth prong, the opinion in that case similarly neglects to address the definition or proper qualifications of “other parties.” We held that Ward “had failed completely to introduce any evidence that Union Planters had awarded loan applications to persons of similar qualifications,” without pausing to address whether these qualifications must include membership in the relevant protected class. 1997 U.S.App. LEXIS 8657 at *7, 1997 WL 201483 .

Yet the United States Supreme Court has joined several appellate courts in rejecting such a requirement in other discrimination contexts. With regard to age discrimination, the Court has held, “[t]he fact that one person in the protected class has lost out to another person in the protected class is thus irrelevant, so long as he has lost out because of his age.” O’Connor v. Consolidated Coin Caterers Corp., 517 U.S. 308, 312 , 116 S.Ct. 1307 , 134 L.Ed.2d 433 (1996).

For purposes of Title VTI, this Court has noted that “the plaintiff, as part of a prima facie case, [need not] show that he or she was replaced by a person outside the protected class.” Jackson v. Richards Med. Co., 961 F.2d 575 , 587 n. 12 (6th Cir.1992) (citations omitted). See also Walker v. St. Anthony’s Med. Ctr., 881 F.2d 554, 558 (8th Cir.l989)(finding no “per se requirement” that female employee be replaced by a man). “Congress never intended to give an employer license to discriminate against some employees ... merely because he favorably treats other members of the employees’ group.” Brown v. Henderson, 257 F.3d 246, 253 (2d Cir .2001).

In treating cases in which discriminatory animus is alleged for the refusal to extend credit to an applicant, we should articulate a standard which takes note of these holdings, while also recognizing the unique nature of the real-estate lending context. 10 This is precisely what the Fifth Circuit did in Moore v. United States Dep’t of Agriculture, 55 F.3d 991 (5th Cir.1995). In that ease, the court upheld a District Court’s decision which “borrowed freely from the wealth of Title VII case law to craft the elements of an ECOA prima facie case,” and dropped the fourth requirement altogether. Id. at 993 n. 4.

Better still, it seems, is the approach favored by courts, including this one, in other types of real estate cases. For example, in Selden Apartments v. United States Dep’t of Housing & Urban Dev., 785 F.2d 152, 159 (6th Cir.1986), a case involving discriminatory denial of housing, we required merely “[t]hat the housing or rental property remained available” after the denial. Id.

To fit the demands inherent in these kinds of circumstances, and in recognition of the often imprecise nature of available information regarding the “qualifications” of future approved applicants, this Court should follow these examples, and borrow freely from analogous cases to craft the elements of an ECOA prima facie case. I *782 would allow the burden to shift back to defendants following a showing that a creditor such as Midwest simply remained in the real-estate loan business after denying credit.

If Hood could present satisfactory evidence that Midwest continued to engage in loan transactions after denying his application, then analysis of his claim should proceed to the next phase, during which Midwest would be given the opportunity to rebut the presumption of discrimination. See McDonnell Douglas, supra.

Because in granting Midwest’s motion for summary judgment, the District Court employed an overly burdensome standard for establishment of a prima facie case, I would have remanded the case for further consideration under a more appropriate standard. Because the panel in its opinion affirms the holding of the District Court, I respectfully dissent.

. For example, in an employment discrimination case, courts can look at the applicant actually selected for a position in order to determine the presence or absence of discrimination. However, in credit cases, future applicants do not apply for the same loan as a plaintiff such as Hood. Instead, an almost infinite number of persons apply for credit from the defendant’s reserve of funds.