In a significant turn of events, SafeRent Solutions, a tenant screening company, has reached a settlement in a Massachusetts federal court regarding claims of race bias in its screening practices. The agreement comes following allegations that the company's methods disproportionately excluded Black and Hispanic renters from housing opportunities.

Tenant Screening $2.2M Race Bias Fine: Settlement Details

SafeRent and the attorneys representing the class of housing applicants informed the judge on Thursday about the reached agreement. Under the terms, each plaintiff stands to receive up to $10,000 at the discretion of the court. To qualify for the claim, plaintiffs must provide documentation of holding a public housing voucher during the class period. Additionally, class counsel reserves the right to request up to $1.1 million in attorney fees from the court.

The Controversy

At the heart of the lawsuit were SafeRent Scores, an algorithmic assessment heavily reliant on applicants' credit scores. Lead plaintiffs Monica Douglas and Mary Louis argued that this calculation disproportionately disadvantaged Black and Hispanic renters, who are more likely to have subprime credit scores.

"While SafeRent continues to believe the SRS Scores comply with all applicable laws, litigation is time-consuming and expensive," stated a company spokesperson. "It became increasingly clear that defending the SRS Score in this case would divert time and resources SafeRent can better use to serve its core mission of giving housing providers the tools they need to screen applicants."

Tenant Screening $2.2M Race Bias Fine : Legal Maneuvers

An attorney for the renters declined to comment on Thursday. However, according to court filings, SafeRent retains the option to terminate the settlement if more than 50 class members opt out of the deal. In such a scenario, the case would resume from the same procedural standpoint as when the settlement was reached.

Denial of Wrongdoing

The settlement notably does not require SafeRent to admit any wrongdoing. The company maintains that it "has denied and continues to deny each of the claims and contentions alleged" by the applicants.

Legal Landscape

The lawsuit, initiated in May 2022, saw Mary Louis recounting SafeRent's rejection of her application based on her SafeRent Score, with no avenue for appeal initially. Monica Douglas, another plaintiff, detailed a similar experience, where her application was rejected by a nonparty landlord, only to be later approved upon appeal.

Tenant Screening $2.2M Race Bias Fine : Judicial Stance

U.S. District Judge Angel Kelley's ruling in July largely rejected SafeRent's motion to dismiss, affirming that the company falls under the purview of the Fair Housing Act. The judge emphasized SafeRent's significant influence over rental decisions, noting that landlords are bound by the screening algorithm without full transparency on its calculations.

Legal Representation

The renters in the case are represented by a team comprising Todd S. Kaplan, Nadine Cohen of Greater Boston Legal Services, Christine E. Webber, Samantha N. Gerleman of Cohen Milstein Sellers & Toll PLLC, and Stuart T. Rossman, Charles M. Delbaum, and Ariel C. Nelson of the National Consumer Law Center.

SafeRent is being represented by Jeffrey Huberman, Andrew Soukup, Robert A. Long, and Jessica Merry Samuels of Covington & Burling LLP.

This settlement marks a significant development in the ongoing discourse surrounding housing discrimination and the use of algorithmic tools in tenant screening processes.