United States v. Hampton Corp.

502 F.Supp.3d 1376

UNITED STATES of America, Plaintiff,

v.HAMPTON CORPORATION, INC., Daniel Stauss, Scott Stauss, Steeple Apts, LLC, Hepper Olson Architects, Ltd., Pribula Engineering, PLLC,² HDD, Inc., Time Squares Townhomes II, Inc., South Hampton Townhomes, Inc., and Townhomes at Charleswood LLP, Defendants.

Case No. 3:20-cv-42

United States District Court, D. North Dakota, Eastern Division 1 .

Signed October 21, 2020

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).³ 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.’ "⁴ 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) ).

The Supreme Court recently addressed statutory standing under the FHA in City of Miami. The...