The Bryan Simpson U.S. Courthouse in Downtown Jacksonville. | Charlie McGee, The Tributary
Published on June 10, 2024 at 3:48 pm
A federal judge allowed a lawsuit to move forward with its accusations that one of Northeast Florida’s largest landlords used faulty algorithms to discriminate against Black renters, giving the green light for a jury trial that could set precedents for civil rights law.
In an order issued last week, U.S. District Judge Wendy Berger denied Jacksonville Wealth Builders’ motion to dismiss.
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Four Jacksonville residents are suing JWB Property Management LLC, which rents out and manages thousands of homes in Duval County, and JWB Real Estate Capital LLC, which owns those properties. The plaintiffs are seeking to represent a larger class of Black rental applicants denied leases by JWB in recent years.
Jacksonville Area Legal Aid filed the lawsuit, presenting a novel legal argument grounded in the 1968 Fair Housing Act, which The Tributary previously covered.
The plaintiffs argue that JWB has slanted the housing market against Black people in Jacksonville through its use of “tenant screening services,” a type of background-checking software used by landlords across the country to decide whether to accept aspiring tenants.
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Both sides of the lawsuit have declined to comment on the pending case beyond reiterating points they’ve already made in court filings.
“We vehemently deny any allegations of discrimination,” JWB co-founder and president Alex Sifakis said last year to The Tributary. In court, JWB has denied the claims against it and argued that even if those claims were true, the plaintiffs haven’t shown they violated the law.
One key element of the plaintiffs’ argument is that the algorithms driving these decisions are flawed, causing some rental applicants to be denied housing based on mistaken identities or outdated information. This argument isn’t new; it has been the grounds for numerous Fair Credit Reporting Act lawsuits against tenant-screening companies like SafeRent Solutions LLC, whose software is utilized by JWB.
The Jacksonville lawsuit is unique because it further argues that the way JWB uses this software creates illegal barriers for Black people in particular, subjecting them to housing discrimination based on eviction records.
For years, JWB has had what the lawsuit describes as a “blanket policy” of disqualifying any rental applicant who has faced an eviction filing in the prior five years. If a tenant-screening report claims that a person has an eviction filing on their record, the plaintiffs say, JWB considers this an automatic disqualifier — even if the algorithm is inaccurately citing a different person’s record, or if the algorithm is accurate but it’s only citing a filing that got thrown out in court and didn’t lead to an actual eviction.
This policy creates race-based discrimination on two fronts, the plaintiffs argue: First, Black Americans have faced a disproportionate share of eviction filings at the local and national level for decades; and second, JWB’s properties are mostly located in parts of Duval County where there are more Black residents than the county average.
In its motion to dismiss the lawsuit, JWB argued that second point invalidates the rest of the plaintiffs’ case. To prove that its eviction policy illegally discriminates in areas with higher Black populations, JWB argued, the plaintiffs must show the tenants it has approved are “disproportionately non-Black” compared to the renter population in those areas.
The plaintiffs in this case argue JWB’s eviction policy creates a “disparate impact,” meaning it has a discriminatory effect regardless of intent. JWB can be held liable for disparate impacts, Judge Berger wrote.
JWB argued that the lawsuit should be thrown out because the plaintiffs didn’t show a direct link between the eviction policy and racial disparities.
But the plaintiffs’ complaint cites data from property records and the U.S. census to support their case. At the national level, it says Black renters account for more than half of all renters “threatened with eviction” despite making up only about 19% of the country’s total renting population. Locally, it cites “a random sampling of eviction filings in Duval County Court” that found 71% of people facing those filings were Black.
Berger said the plaintiffs had done enough to allege JWB’s eviction policy is “likely to disproportionately foreclose rental opportunities for Black applicants in Duval County as compared to their white counterparts.”
JWB’s insistence that the plaintiffs must show exact proof, the judge wrote, was premature at this stage in the case. She said the plaintiffs have shown enough evidence to suggest the policy unfairly affects many Black renters, even without specific numbers, which is enough to continue the case for now.
The plaintiffs “have alleged statistical evidence that Black applicants are more likely than White applicants to have experienced an eviction filing,” the judge wrote. “This would in turn result in the relevant reduction in housing opportunities for Black renters in Duval County, which would be directly linked to the policy.”
If no settlement is reached between the plaintiffs and JWB, the lawsuit is scheduled to go to a jury trial March 3, 2025.
The plaintiffs are seeking class certification from Berger, which would enable the four Jacksonville residents named in the suit to represent a larger group of people who could also be entitled to relief from JWB.
This class would include all Black rental applicants in Duval County whom JWB has rejected in the last few years based on an eviction filing that doesn’t represent an actual eviction on their record. The plaintiffs want JWB to refund all of those people for the fees they had to pay to apply for a rental. JWB currently charges between $80 and $160 in nonrefundable application fees.
After the Jacksonville lawsuit was filed in March 2023 with its untested, potentially groundbreaking argument in U.S. law, Chicago-area advocates filed a federal lawsuit and a civil rights complaint that made virtually identical arguments against institutional landlords in Cook County.
This story is published through a partnership between Jacksonville Today and The Tributary.
