Opinion
Case No. 3:20-cv-42
2020-10-21
UNITED STATES of America, Plaintiff, v. HAMPTON CORPORATION, INC., Daniel Stauss, Scott Stauss, Steeple Apts, LLC, Hepper Olson Architects, Ltd., Pribula Engineering, PLLC, HDD, Inc., Time Squares Townhomes II, Inc., South Hampton Townhomes, Inc., and Townhomes at Charleswood LLP, Defendants.
Abigail Marshak, Alan Martinson, DOJ-Crt, Sameena Shina Majeed, U.S. Department of Justice, Washington, DC, Tara V. Iversen, U.S. Attorney's Office, Fargo, ND, for Plaintiff. Jon R. Brakke, James M. Cailao, Vogel Law Firm, Fargo, ND, for Defendants Hampton Corporation, Inc., Daniel Stauss, Scott Stauss, Steeple Apts, LLC, HDD, Inc., Times Square Townhomes II, Inc., Carrington Townhomes, Inc., South Hampton Townhomes, Inc. Brittney A. Bornemann, Jackson, Thomason & Weiler, P.C., Bismarck, ND, for Defendant Townhomes at Charleswood LLP.
Abigail Marshak, Alan Martinson, DOJ-Crt, Sameena Shina Majeed, U.S. Department of Justice, Washington, DC, Tara V. Iversen, U.S. Attorney's Office, Fargo, ND, for Plaintiff.
Jon R. Brakke, James M. Cailao, Vogel Law Firm, Fargo, ND, for Defendants Hampton Corporation, Inc., Daniel Stauss, Scott Stauss, Steeple Apts, LLC, HDD, Inc., Times Square Townhomes II, Inc., Carrington Townhomes, Inc., South Hampton Townhomes, Inc.
Brittney A. Bornemann, Jackson, Thomason & Weiler, P.C., Bismarck, ND, for Defendant Townhomes at Charleswood LLP.
ORDER
Alice R. Senechal, United States Magistrate Judge The United States asserts claims under the Fair Housing Act (FHA) and the Americans with Disabilities Act against owners, developers, designers, engineers, and/or builders of several residential apartment complexes. (Doc. 1). High Plains Fair Housing Center Inc. (HPFHC) moves to intervene as a plaintiff to assert claims under the FHA against five of the defendants. (Doc. 19). The United States supports HPFHC's intervention. (Doc. 32). Defendants oppose it, contending HPFHC lacks statutory standing under the FHA. (Doc. 25; Doc. 38). In this court's opinion, HPFHC meets requirements for intervention, and its motion will be granted.
Background
HPFHC is a nonprofit corporation "dedicated to eradicating housing discrimination" in North Dakota "through fair housing education, outreach, counseling and enforcement." (Doc. 19-2, p. 3). HPFHC is primarily funded by the United States Department of Housing and Urban Development (HUD) under the Fair Housing Initiatives Program (FHIP). FHIP provides funding to fair housing organizations to investigate housing discrimination complaints and to enforce the FHA and equivalent state laws. Id. at 15-16 (citing 24 C.F.R. § 125.401 ).
Beginning in 2018, after receiving tenant complaints, HPFHC investigated several of defendants’ apartment complexes, identified alleged violations of the FHA's accessibility requirements and reasonable accommodation provisions, and provided outreach and education services to defendants and their tenants. Id. at 1-2, 16-24. HPFHC's investigation included site inspections and the use of a tester posing as a prospective tenant whose spouse required a disability-related service animal. Id. at 16-24. HPFHC provided defendants with information about the FHA's accessibility requirements and "mailed educational materials to defendants’ residents advising them of their fair housing rights." Id. at 2.
On February 4, 2020, HPFHC filed an administrative complaint with HUD's Fair Housing Equal Opportunity Division, alleging certain defendants discriminated against disabled persons. Id. at 2-3. On March 16, 2020, the United Stated filed this action, "alleging the same discriminatory housing practices that HPFHC [had] investigated since 2018 and raised in HPFHC's February 2020 complaint to HUD." Id. at 3. HPFHC now moves to intervene as a plaintiff pursuant to Federal Rule of Civil Procedure 24(a) and 42 U.S.C. § 3614(e), and the United States supports intervention, asserting its "strong interest in ensuring the correct interpretation and application of the FHA as applied to claims brought by intervenors" under § 3614(e). (Doc. 32, p. 2).
HPFHC asserts several violations of 42 U.S.C. § 3604(f), which prohibits housing practices that discriminate on the basis of disability. (Doc. 19, pp. 26-31). HPFHC alleges it suffered injuries in four areas as a result of defendants’ alleged discriminatory housing practices: (1) undermining of its education, counseling, and training programs; (2) diversion of its resources; (3) frustration of its mission of increasing fair and equal access to housing; and (4) frustration of its mission to eliminate segregation. Id. at 24. HPFHC asserts:
By requiring HPFHC to expend substantial time and resources identifying and counteracting defendants’ discriminatory housing practices, defendants
harmed HPFHC by forcing it to divert scarce resources away from its other education, training, counseling and capacity-building programs. While the time and resources HPFHC spent to identify and counteract defendants’ discriminatory housing practices is consistent with its mission, these activities imposed a significant opportunity cost on HPFHC, resulting in fewer resources and less time to devote to other education, training, investigation, counseling and capacity-building activities. This opportunity cost includes not only less time spent on fulfilling grant obligations, but also precluded equally important objectives that are critical to HPFHC's mission and sustainability, such as investigating other cases, expanding outreach to state agencies, fostering a stronger relationship with tribal governments, expanding its education and outreach on radio and to schools, and developing additional, local sources of funding.
Id. at 24-25.
Law and Discussion
HPFHC moves to intervene under Federal Rule of Civil Procedure 24(a), asserting it has an unconditional right to do so under the FHA, 42 U.S.C. § 3614(e). In considering a motion to intervene, the court must accept as true all allegations of the proposed intervenor complaint and construe those allegations in favor of the prospective intervenor. Nat'l Parks Conservation Ass'n v. U.S. E.P.A., 759 F.3d 969, 973 (8th Cir. 2014) ; United States v. Metro. St. Louis Sewer Dist., 569 F.3d 829, 834 (8th Cir. 2009). Rule 24(a)(1) mandates the court permit intervention by anyone given an unconditional right to do so by federal statute.
A party seeking to intervene under Rule 24(a)(1) must establish, in addition to the requirements of that Rule, both Article III standing and statutory standing. See Lexmark Int'l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 126, 134 S.Ct. 1377, 188 L.Ed.2d 392 (2014) ; Metro. St. Louis Sewer Dist., 569 F.3d at 833. Article III standing requires a plaintiff to show an actual or threatened injury, resulting from the challenged conduct of the defendant, that could likely be redressed by a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). Even when a plaintiff's claim falls within Article III's constitutional boundaries, a plaintiff may lack standing under certain prudential principals. Gladstone Realtors v. Vill. of Bellwood, 441 U.S. 91, 99, 99 S.Ct. 1601, 60 L.Ed.2d 66 (1979). In the past, the Supreme Court described prudential limitations on standing as encompassing three broad principles: (1) a general prohibition on a litigant raising another person's legal rights, (2) a rule barring adjudication of generalized grievances more appropriately addressed in the representative branches, and (3) a requirement that a plaintiff's complaint fall within the zone of interests protected by the statute invoked. Lexmark, 572 U.S. at 126, 134 S.Ct. 1377. Though the "zone of interests" test was considered a prudential limitation, the Supreme Court more recently described "prudential" as a misnomer. Id. at 127, 134 S.Ct. 1377. Rather, the Supreme Court now characterizes the test as a determination of whether a plaintiff has statutory standing.
Defendants concede HPFHC has Article III standing but contend it lacks statutory standing. (Doc. 25, p. 4). To determine whether a prospective intervenor has statutory standing, a court must determine "whether the statute grants [that party] the cause of action" asserted. Bank of Am. Corp. v. City of Miami, Fla., ––– U.S. ––––, 137 S. Ct. 1296, 1302, 197 L.Ed.2d 678 (2017). In other words, a prospective intervenor's claims must be within the "zone of interests" protected by the statute in question: a prospective intervenor must show it is within the group intended to be benefitted by the statute. Id. at 1303-1304 ; Lexmark, 572 U.S. at 126, 134 S.Ct. 1377 ; Ass'n of Data Processing Serv. Orgs., Inc. v. Camp, 397 U.S. 150, 153, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970). The "zone of interests" test is "not meant to be especially demanding." Clarke v. Secs. Indus. Ass'n, 479 U.S. 388, 399, 107 S.Ct. 750, 93 L.Ed.2d 757 (1987). A prospective intervenor's injuries need only be "arguably within the zone of interests" the statute protects. City of Miami, 137 S. Ct. at 1303 (quoting Camp, 397 U.S. at 153, 90 S.Ct. 827 ).
Defendants contend HPFHC is not an "aggrieved person," arguing HPFHC is not seeking to sue on behalf of any residents against whom defendants allegedly discriminated and has not alleged defendants discriminated against HPFHC. (Doc. 25, p. 25). Defendants argue HPFHC is therefore not an "aggrieved person" within the "zone of interests" protected by the FHA. Id. at 3-4, 9-10.
The FHA permits any "aggrieved person" to intervene in any civil action alleging discriminatory housing practices brought by the Attorney General. 42 U.S.C. § 3614(e). The FHA broadly defines an "aggrieved person" as any "person"— a term which includes corporations—who "(1) claims to have been injured by a discriminatory housing practice; or (2) believes that such person will be injured by a discriminatory housing practice that is about to occur." 42 U.S.C. § 3602(d), (i). The Supreme Court "has repeatedly written that the FHA's definition of [a] person ‘aggrieved’ reflects a congressional intent to confer standing broadly.... ‘as broadly permitted by Article III of the Constitution.’ " City of Miami, 137 S. Ct. at 1303 (quoting Trafficante v. Metro. Life Ins. Co., 409 U.S. 205, 209, 93 S.Ct. 364, 34 L.Ed.2d 415 (1972) ).
A "discriminatory housing practice" includes acts that are unlawful under 42 U.S.C. § 3604(f). 42 U.S.C. § 3602(f).
Relying on Thompson v. North American Stainless, LP, 562 U.S. 170, 176-78, 131 S.Ct. 863, 178 L.Ed.2d 694 (2011), defendants argue the term "aggrieved" should not be construed as broadly permitted by Article III and cases suggesting so relied on " ‘ill-considered considered’ dictum." (Doc. 25, p. 7). The United States avers defendants’ argument mirrors portions of the dissenting opinion in City of Miami though defendants did "not mention the case or its holding" in their responsive brief. (Doc. 32, p. 5). The United States is correct. In City of Miami, the Supreme Court clearly rejected defendants’ argument, which was discussed by the dissent, stating, "And the dissent is wrong to say that we characterized those cases as resting on ‘ill considered dictum.’ The dictum we cast doubt on in Thompson addressed who may sue under Title VII, ... not under the FHA." City of Miami, 137 S. Ct. at 1303.
The Supreme Court recently addressed statutory standing under the FHA in City of Miami. The majority opinion makes clear that, under the FHA, an organization need not bring suit on behalf of anyone else to have statutory standing. Rather, an organization can sue for its own injuries. In City of Miami, the City alleged two banks violated the FHA by issuing riskier mortgages on less favorable terms to minority borrowers than they issued to similarly situated nonminority borrowers, which resulted in higher foreclosure rates in minority neighborhoods. 137 S. Ct. at 1300-02. The City alleged the higher foreclosure rates lowered property values, diminished property-tax revenue, and increased demand for municipal services "to remedy blight and unsafe and dangerous conditions" created by vacancies. Id. at 1302-03. The Supreme Court held the City's lost tax revenue and extra municipal expenses fell within the zone of interests the FHA protects. Id. at 1303-04. Similarly, HPFHC is suing on its own behalf for its own economic and other injuries—diversion of resources—and HPFHC's injuries are at least as closely related to the alleged discriminatory practices as those the Supreme Court found sufficient in City of Miami. HPFHC describes specific ways in which its resources were diverted by its efforts to address the alleged discriminatory housing practices. In Havens Realty Corp. v. Coleman, 455 U.S. 363, 102 S.Ct. 1114, 71 L.Ed.2d 214 (1982), the Supreme Court held a nonprofit organization, similar to HPFHC, had standing by reason of expenditure of resources to combat housing discrimination, and City of Miami confirmed Havens remains good law. City of Miami, 137 S. Ct. at 1303.
In a surreply, defendants argue that despite City of Miami's holding, HPFHC does not fall within the zone of interests protected by the FHA because it cannot maintain a claim under 42 U.S.C. § 3604(f)(1), (f)(2), (f)(3)(B), or (f)(3)(C), the subsections under which HPFHC asserts its claims. (Doc. 38, pp. 3-5). Subsection (f)(1) makes discrimination unlawful in the sale or rental of a dwelling "because of a handicap of—(A) that buyer or renter[;] (B) a person residing in or intending to reside in that dwelling after it is so sold, rented, or made available; or (C) any person associated with that buyer or renter." Subsection (f)(2) makes discrimination unlawful "in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities ..., because of a handicap of—(A) that person; or (B) a person residing in or intending to reside in that dwelling ...; or (C) any person associated with that person." Subsection (f)(3)(B) defines unlawful discrimination as "a refusal to make reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford such person equal opportunity to use and enjoy a dwelling." Subsection (f)(3)(C) defines unlawful discrimination to include a failure to design and construct multifamily dwellings in compliance with the FHA. Defendants contend HPFHC cannot have a "handicap" for which a "dwelling" can be made unavailable or against which any person could discriminate. (Doc. 38, p. 4). Thus, defendants argue HPFHC is not a person aggrieved that can assert claims in its own right. Id. at 5.
Notably, the FHA does not limit the term "aggrieved person" to one who was directly discriminated against. See Hannan v. Rose, 18 Civ. 9878, 2020 WL 1903282, at *7 (S.D.N.Y. Apr. 17, 2020) ("The text of the FHA does not [include] any limitation on ‘aggrieved person,’ and recent Supreme Court precedent does not suggest such a limitation.") (citing City of Miami, 137 S. Ct. at 1303 ). Defendants do not suggest how HPFHC is in a different position than the City in City of Miami, which was not directly discriminated against on the basis of any minority status, and which the Supreme Court found to be an aggrieved person in the zone of interests that the FHA protects.
Since the Supreme Court's holding in City of Miami, several district courts have held that § 3604(f) protects persons and organizations who had no disability and did not experience direct discrimination. See Conn. Hous. Ctr. v. CoreLogic Rental Prop. Sols., No. 3:18-CV-705, 478 F.Supp.3d 259, 284–85, (D. Conn. Aug. 7, 2020) (concluding that, under § 3604(f)(1)-(2), a plaintiff mother, who was a tenant of the defendant, could bring claims for injuries she suffered because the defendant's alleged discriminatory housing practices segregated her from her disabled son); Fair Hous. Just. Ctr. v. Cuomo, No. 18-CV-3196, 2019 WL 4805550, at *6, *12-14 (S.D.N.Y. Sept. 30, 2019) (finding a fair housing center had standing to pursue claims on its own behalf under § 3604(f)(1)-(3) and stating "it is well established that testers from fair housing organizations can establish violations of the FHA"); Oxford House, Inc. v. City of Salisbury, Md., Civil No. RDB-17-1978, 2018 WL 3127158, at *1, *7 (D. Md. June 26, 2018) (stating a nonprofit organization, suing on its own behalf under § 3604(f)(3)(B), had statutory standing when it claimed it was injured by the city defendant's failure to modify its zoning practices to accommodate the organization's residents, who were disabled); Elliott v. QF Circa 37, LLC, No. 16-cv-0288-BAS-AGS, 2017 WL 6389775, at *10 (S.D. Cal. Dec. 14, 2017) (holding § 3604(f)(3)(B) protected a plaintiff daughter's "interests as an individual who sought to effectuate her mother's rights under the provision"); see also Fair Hous. Just. Ctr., Inc. v. JDS Dev. LLC, 443 F. Supp. 3d 494, 504 (S.D.N.Y. 2020) (though not squarely addressing whether a fair housing organization had statutory standing to do so, the plaintiff organization brought disability discrimination claims on its own behalf premised on § 3604(f)(3)(C) ’s accessibility requirements after its testers discovered the defendant's alleged FHA violations, and the court denied the defendant's motion to dismiss on statute of limitations grounds, stating, "Regardless of when Plaintiff's mission became frustrated, there was no relevant ‘aggrieved person’ who was subjected to a ‘discriminatory housing practice’ until the testers visited the [defendant's] [b]uilding") (emphasis added).
Defendants cite no post-City of Miami cases supporting their position.
Under defendants’ theory, a fair housing organization could never have statutory standing to bring claims under § 3604(f) on its own behalf because it could not have a "handicap" and be directly discriminated against. That is contrary to § 3602(i) ’s definition of an aggrieved person, City of Miami’s holding, and recent district court cases addressing claims asserted under § 3604(f). Because HPFHC is arguably within the zone of interests that the FHA protects, HPFHC's motion to intervene as a right under Rule 24(a), (Doc. 19), is GRANTED .
An order granting a motion to intervene is not dispositive and may be decided by a magistrate judge by order. See In re Syngenta AG Mir 162 Corn Litig., No. 14-md-2591-JWL, 2019 WL 4338257, at *1-2 (D. Kan. Sept. 12, 2019) ; Parson v. Farley, 352 F. Supp. 3d 1141, 1145 (N.D. Okla. 2018) ; In re Ohio Execution Protocol Litig., No. 2:11-cv-1016, 2018 WL 999986, at *1 (S.D. Ohio Feb. 21, 2018) ; Rosado v. Pruitt, 17-CV-4843, 2018 WL 262835, at *1 (E.D.N.Y. Jan. 2, 2018).
The Clerk is directed to filed the proposed intervenor complaint and issue a summons, and HPFHC is directed to serve the intervenor complaint.