Travelers Insurance couldn't buck an advocacy group's discrimination claims in a federal court in D.C. this week, despite more stringent pleading standards under a recent Supreme Court decision.

In an opinion Tuesday, U.S. District Judge John Bates of the District of Columbia denied Travelers' motion to dismiss the lawsuit, brought by the nonprofit National Fair Housing Alliance, which advocates for ending discrimination in housing. NFHA claims Travelers maintains a policy of denying insurance to landlords renting to tenants who receive federal housing vouchers in Washington, D.C. The group claims this policy has a disparate impact on black residents and women.

Travelers argued the policy ended in January 2016 and that NFHA failed to sufficiently show it had a disparate impact on minorities.

The ruling is the latest in the wake of a 2015 Supreme Court decision that underscored the limits to bringing disparate impact claims in the housing context.

“We filed our lawsuit cognizant of those limits and the court has acknowledged that this survived the scrutiny that courts will apply,” said Morgan Williams, NFHA's general counsel.

NFHA is also represented by a team of lawyers from Relman, Dane & Colfax in Washington, D.C., including Megan Cacace, Stephen Dane and Joseph Wardenski. Travelers is represented by Simpson Thacher & Bartlett attorneys Abram Ellis, Andrew Frankel, Jamie Fell and Matthew O'Connor. The company did not immediately reply a request for comment.

NFHA brought the lawsuit after conducting an experiment in which five “testers” posing as landlords called insurance brokers and asked about obtaining a Travelers' policy for a fake apartment complex in D.C.'s predominately black Anacostia neighborhood. After telling a broker the complex included tenants who used housing vouchers, each tester was told Travelers would not underwrite the policy because of those tenants. The group then took several steps to educate landlords, tenants and policy makers about the issue.

In May 2016, NFHA filed the lawsuit, claiming the policy has a disparate impact and that the group had standing because it diverted resources to education efforts as a result of the policy.

The Supreme Court's decision in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Williams explained, outlined that though disparate impact claims are valid under the Fair Housing Act, plaintiffs do need to satisfy a “robust causality requirement” at the pleading stage. In May, the U.S. Court of Appeals for the Ninth Circuit declined to revive two such suits by the city of Los Angeles against Wells Fargo and Bank of America, on the grounds the city failed to show the banks' policies disproportionately affected minorities.

“These types of claims have always been very hard to bring,” Williams said. “Prior to Supreme Court's [decision], there was wide consensus in federal circuit court jurisprudence that these were viable claims, but they've always been hard to bring because of … the extent to which you do need to harness some sort of evidence of the disparity.”

Still, in this case, Bates wrote that NFHA satisfied the requirements outlined by the Supreme Court. The judge criticized Travelers' assertion that failure to provide insurance to a landlord is “too remote” to have an effect on tenants, noting there's a “large body of case law holding that insurers” can be held liable under the FHA. The company also argued the statistical evidence NFHA relied on was “bare” and insufficient.

Bates wrote that there have only been a “handful of cases” since the Inclusive Communities decision that examine what kind of statistical analysis is necessary, but the groups' analysis clearly showed that voucher recipients in D.C. were more likely to be black or women than the D.C. population as a whole.

“NFHA not only conducted a general statistical analysis, but also focused on the relevant geographic region of the district: it ensured that testers claimed they were buying properties in the Anacostia neighborhood, which is also the area with the highest portion of voucher recipients,” the judge wrote.

The judge also rejected Travelers' argument that the case lacked merit because the company no longer uses the policy. Bates said that had no effect on standing, and noted the company's admission that it had the policy in the first place “will likely bolste[r] NFHA's claims at a later stage of this litigation.”

Whether Travelers actually ended the policy is still a fact in dispute, Williams said.

The case now moves to discovery and the summary judgment phase.

Williams said the case will have an impact “certainly in regards to what plaintiffs and industry players and other courts may look to in assessing what is needed to establish 'robust causality' and sufficiently plead evidentiary basis for disparate impact claims.”