Albert Pickett, Jr. v. City of Cleveland, OH
140 F.4th 300 (2025)
Rule of Law:
A class can be certified under Federal Rules of Civil Procedure 23(b)(2) and 23(b)(3) for a Fair Housing Act disparate-impact claim alleging a facially neutral municipal policy, such as placing water liens, disproportionately makes housing unavailable for a protected class, even if individual economic damages vary, provided the FHA claim itself constitutes a concrete injury for Article III standing.
Facts:
- Cleveland Water, a department of the City of Cleveland, provides water services to approximately 1.5 million customers across multiple counties in Ohio.
- To collect unpaid fees, Cleveland Water places 'water liens' on delinquent customer accounts when a customer falls behind on a water bill for at least 180 days and owes an account balance of $300 or more.
- Between 2012 and 2020, Cleveland Water attached over 17,172 water liens to properties for unpaid water bills, which accumulate penalties, interest, and other fees, placing properties at increased risk of foreclosure and eviction.
- Cleveland Water does not have knowledge of a homeowner’s race at the time of assessing a water lien.
- In Cuyahoga County, a disproportionate number of water liens (68%) are placed in majority Black neighborhoods compared to majority White neighborhoods (18%), despite White residents making up 59% of the population and Black residents 29%.
- Named plaintiffs Albert Pickett, Jr., Keyonna Johnson, Jarome Montgomery, and Tiniya Shepherd, all African American residents of Cuyahoga County, each had a water lien placed on their property by Cleveland Water, leading to additional fees, water shutoffs, or in some cases, foreclosure.
Procedural Posture:
- Plaintiffs Pickett, Johnson, Montgomery, and Shepherd filed a class action lawsuit against the City of Cleveland and Cleveland Water in the U.S. District Court for the Northern District of Ohio, alleging violations of the Fair Housing Act, Ohio Civil Rights Act, and U.S. and Ohio Constitutions.
- Plaintiffs filed a motion for class certification, requesting certification of "Water Lien Classes" under Rule 23(b)(2) for injunctive relief and Rule 23(b)(3) for damages.
- The City of Cleveland filed a motion for summary judgment, which the district court denied.
- The district court granted Plaintiffs' motion for class certification, certifying the Water Lien Class as "all Black homeowners or residents in Cuyahoga County who have been obligated, within the last two years, to pay debt secured by their property stemming from amounts originally owed to Cleveland Water," and finding that the class action requirements of Rule 23 were satisfied, including predominance for Rule 23(b)(3).
- The City of Cleveland timely appealed the district court’s certification order to the U.S. Court of Appeals for the Sixth Circuit.
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Issue:
Did the district court abuse its discretion by certifying a class under Federal Rules of Civil Procedure 23(b)(2) and 23(b)(3) for a disparate-impact claim under the Fair Housing Act, where the claim alleges a facially neutral municipal water lien policy disproportionately affects Black homeowners, and some class members may not have suffered direct economic injury?
Opinions:
Majority - Clay
No, the district court did not abuse its discretion by certifying the Water Lien Class. The court found that all prerequisites for class certification under Rule 23(a)—numerosity, commonality, typicality, and adequacy of representation—were satisfied, noting at least 943 potential class members and a common theory of injury under the FHA. Certification under Rule 23(b)(2) was appropriate because the plaintiffs seek an injunction and declaratory judgment regarding the City's water lien policy that would provide indivisible relief to the class as a whole, addressing grounds generally applicable to the entire class. Certification under Rule 23(b)(3) was also proper because common questions, specifically "whether the City’s disproportionate placement of water liens on Black homeowners and residents of Cuyahoga County violates the FHA," predominate over individualized issues. The fact that some class members might not be eligible for damages or have varying damage amounts does not defeat predominance, as damages can be calculated later using a common methodology. Furthermore, the court held that plaintiffs have Article III standing through their FHA claim under § 3604(a), which constitutes a concrete injury in fact because Congress analogized the harm of private discrimination in the housing market to constitutional harms. The alleged injury of housing being "unavailable" due to disparate impact from water liens is cognizable under the FHA, and economic harm is auxiliary to this core claim. The court clarified that the Supreme Court's TransUnion decision on standing for damages does not govern standing at the class certification stage for such FHA claims. The appellate court declined to address the merits of the underlying FHA claim itself, as Rule 23(f) appeals are limited to class certification issues.
Concurring - Gibbons
Justice Gibbons concurred with the majority's decision to affirm class certification. However, she wrote separately to emphasize that a defendant cannot forfeit a challenge to Rule 23(b)(2) class certification because Rule 23 serves to protect the rights of absent class members, not merely the named parties. Courts have an independent, constitutional obligation to rigorously analyze whether the prerequisites of Rule 23(a) and (b) are met, acting as a "fiduciary of the class." Failure to conduct this rigorous analysis could lead to judgments being collaterally attacked. Despite the City's insufficient arguments against Rule 23(b)(2) certification, the requirements were indeed met in this case. The class was proper under Rule 23(b)(2) because the requested injunctive and declaratory relief against the City’s alleged unconstitutional water practices is "indivisible" and applies to the class as a whole, satisfying the criteria for such a class action.
Analysis:
This case significantly strengthens the ability of plaintiffs to pursue disparate-impact class actions under the Fair Housing Act against municipal policies. It clarifies that Article III standing for FHA claims does not hinge on direct economic injury to every class member, particularly at the class certification stage, but rather on the congressionally recognized harm of housing being made 'unavailable' due to racial discrimination. The decision reaffirms the principle that common questions of liability in disparate-impact cases can predominate over individualized damages, allowing for efficient aggregation of claims. It also strictly limits the scope of Rule 23(f) appeals, preventing defendants from using them to prematurely challenge the merits of the underlying cause of action.
