Pickett v. City of Cleveland: Sixth Circuit Clarifies Article III Standing and Predominance Standards for FHA Disparate-Impact Class Actions

Introduction

Albert Pickett Jr. and four other African-American homeowners brought a putative class action against the City of Cleveland alleging that the City’s practice of imposing “water liens” on delinquent accounts violated the Fair Housing Act (FHA), the Ohio Civil Rights Act (OCRA), and constitutional guarantees. Statistical evidence showed that although Blacks constitute only 29 % of Cuyahoga County’s population, 68 % of all water liens between 2012 and 2020 were imposed on properties in majority-Black neighborhoods. The plaintiffs asserted a disparate-impact theory under 42 U.S.C. §3604(a), claiming that the lien policy “made housing unavailable” on the basis of race by increasing foreclosure risk and home-ownership costs.

The district court certified a “Water Lien Class” composed of all Black homeowners or residents in Cuyahoga County who, within the past two years, were obliged to pay debt secured by a Cleveland water lien. Certification issued under both Rule 23(b)(2) (injunctive relief) and Rule 23(b)(3) (damages), and the City of Cleveland filed a Rule 23(f) interlocutory appeal.

Summary of the Judgment

In a published opinion, the U.S. Court of Appeals for the Sixth Circuit (Clay, J.) affirmed the class certification order. The court’s principal holdings are:

Rule 23(a): Numerosity, commonality, typicality, and adequacy were satisfied for a class of ≥943 members.
Rule 23(b)(2): The City’s uniform lien policy is susceptible to class-wide injunctive or declaratory relief; the court underscored that a defendant cannot “forfeit” Rule 23(b)(2) scrutiny.
Rule 23(b)(3): A single common question—whether the lien policy violates the FHA by having a disparate impact—predominates, even though individual damages may vary. Statistical proof may establish liability, and damages can be calculated later.
Article III Standing: A violation of §3604(a) itself constitutes a concrete, non-economic injury; therefore, TransUnion LLC v. Ramirez does not bar certification simply because some class members lack economic damages.
Merits Reservation: Because Rule 23(f) appeals address certification only, the panel declined to rule on whether liens actually make housing “unavailable” under §3604(a).

Judge Gibbons, joined by Judge Griffin, concurred to emphasize that district courts have an independent, non-waivable duty to ensure Rule 23 requirements are met, especially for mandatory (b)(2) classes.

Analysis

A. Precedents Cited and Their Influence

Wal-Mart v. Dukes, 564 U.S. 338 (2011) – Clarified commonality and indivisibility of Rule 23(b)(2) relief; used to show a single injunction would redress the class.
TransUnion LLC v. Ramirez, 594 U.S. 413 (2021) – Distinguished; while it requires concrete injury for damages, the Sixth Circuit held TransUnion does not decide whether every class member must show standing at certification or require economic loss.
Merck v. Walmart, Inc., 114 F.4th 762 (6th Cir. 2024) – Recognized FHA injuries as concrete intangible harms closely related to constitutional discrimination; relied upon to confirm standing.
Texas Dept. of Housing & Community Affairs v. Inclusive Communities Project, 576 U.S. 519 (2015) – Affirmed availability of disparate-impact claims under the FHA.
Rikos v. P&G, In re Whirlpool, Hicks v. State Farm – Sixth Circuit trio governing predominance: common liability questions can predominate despite individualized damages.
Amgen Inc. v. CT Ret. Plans, 568 U.S. 455 (2013) – Merits questions are improper unless necessary for Rule 23 analysis; cited to cabin the City’s merits arguments.
Hansberry v. Lee (1940) & Ortiz v. Fibreboard (1999) – Underpin the concurrence’s point that adequacy is a constitutional safeguard courts must enforce sua sponte.

B. Legal Reasoning

1. Rule 23(a) Assessment

The panel accepted the district court’s largely unchallenged finding that with 943 identified members, numerosity is obvious. Commonality and typicality merged because every class member faced the same municipal policy and the same alleged injury. Adequacy was uncontroverted: the NAACP-LDF and experienced local counsel represent absent members vigorously, and no conflicts were shown.

2. Rule 23(b)(2) – Indivisible Injunctive Relief

An injunction halting or reforming the lien practice would benefit each class member or none, satisfying Dukes’ “single stroke” test. Significantly, Judge Gibbons’ concurrence warns that a defendant’s strategic silence cannot relieve a court of its “fiduciary” duty to guard absent members’ rights; thus, district courts must independently verify (b)(2) criteria.

3. Rule 23(b)(3) – Predominance and Superiority

The key common question—does the water-lien policy create a racially disparate impact under §3604(a)?—lies “at the heart” of the litigation. Differences in foreclosure outcomes or dollar amounts go only to damages, which need not be common to certify liability issues. The plaintiffs’ expert proposed a class-wide formula (accrued penalties and interest) to streamline later damage assessments. The class action mechanism was also deemed superior because hundreds of low-value individual suits are unlikely.

4. Article III Standing and the TransUnion Debate

The City argued that roughly 20 % of class members lacked financial injury; hence they supposedly had no “concrete” harm. The panel rejected this, distinguishing between:

Traditional monetary harms (foreclosure costs, penalties) – which some members have; and
Congress-recognized intangible harms (racially discriminatory housing practices) – which all members share once a disparate impact is proven.

Citing Merck, the court held that Congress elevated discriminatory housing barriers to a legally protected interest analogous to constitutional race discrimination. Therefore, the lien’s imposition itself is an injury in fact; economic loss may enhance damages but is not required for standing. TransUnion, limited to a damages jury verdict, did not alter this analysis, and expressly reserved the certification-stage question.

C. Likely Impact of the Decision

FHA Litigation: Plaintiffs in future disparate-impact suits within the Sixth Circuit need not show individualized financial harm to establish standing; the discriminatory practice itself suffices.
Class Certification Strategy: Clarifies that predominance exists where a single policy’s legality is at issue; damage variability is not fatal. Municipal defendants can expect broader (b)(3) classes surviving TransUnion objections.
Utility & Municipal Policies: Cities using liens, shut-offs, or other collection tools must consider racial impacts or face aggregate FHA exposure.
Rule 23(b)(2) Doctrine: The concurrence reinforces that courts, not defendants, police adequacy and injunctive class requirements—expect heightened judicial scrutiny even when municipalities decline to argue.
TransUnion Limitation: The decision is one of the first appellate opinions cabining TransUnion to the damages phase, creating persuasive authority nationally.

Complex Concepts Simplified

Disparate Impact: Liability based on a policy’s discriminatory effect rather than intent. Plaintiffs must show a statistical disparity and a causal link; the defendant may show the policy is necessary for legitimate goals, after which plaintiffs can propose less discriminatory alternatives.
Article III Standing: Constitutional requirement that plaintiffs suffer a concrete, particularized injury traceable to the defendant and redressable by court action. Intangible harms can qualify if historically analogous.
Rule 23(a) & (b): A federal rule governing class actions. Subsection (a) imposes four prerequisites; subsection (b) describes three types of permissible classes—(b)(2) for indivisible injunctive relief and (b)(3) for money damages where common issues predominate.
Predominance vs. Commonality: Commonality (a)(2) requires at least one common question; predominance (b)(3) demands that common questions outweigh individual ones, focusing on liability rather than damages.
Water Lien: A statutory lien placed on property for unpaid water bills; in Ohio, once certified, it functions like a tax lien, accumulating interest and threatening foreclosure.

Conclusion

The Sixth Circuit’s decision in Pickett v. City of Cleveland sets an influential precedent on two fronts: (1) it affirms that FHA disparate-impact claims confer Article III standing without proof of personal monetary loss, circumscribing the reach of TransUnion; and (2) it confirms that a uniformly applied municipal practice affecting a protected class can satisfy Rule 23(b)(2) and (b)(3) even when damages are individualized. By stressing the judiciary’s independent duty to guard absent class members’ rights, the court fortifies procedural rigor in class actions while simultaneously lowering substantive hurdles for civil-rights plaintiffs. Municipalities, utilities, and litigants nationwide will look to Pickett for guidance on how equity and efficiency intersect in modern aggregate litigation under the Fair Housing Act.