United States District Court, Central District of California

Opinions and Orders of Previous Years

Subject: Case Number:Title:Date Posted:
Opinions and Orders of Previous Years SA CV 00-350-GLT[ej] Matt Spencer, et al. vs. Daniel W. Conway, et al. - Order Granting Motion for Judgment on the Pleadings07/06/2001



UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

MATT SPENCER, et al.,
Plaintiffs,

v.

DANIEL W. CONWAY, et al..,
Defendants.
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Case No. SA CV 00-350-GLT[ej]


ORDER GRANTING MOTION FOR JUDGMENT ON THE PLEADINGS



On apparent first impression, the Court holds it is a violation of the federal Fair Housing Act, 42 3604(a), for an apartment owner to instruct residential managers not to rent to minority applicants, even if no further discriminatory action is taken as a result of the instruction.

I. BACKGROUND

Plaintiffs Matt and Michelle Spencer were resident managers at Defendants' apartment complex in Lake Forest, California.1/ As part of their compensation, the Spencers were given free apartment rent in the complex. They allege Defendant Conway instructed them not to rent to minority tenants, but Plaintiffs refused to follow this instruction. Plaintiffs allege they were harassed and ultimately terminated and evicted by Defendants in retaliation for renting apartments to minority tenants.

Plaintiffs’ Complaint alleges they received a letter from Defendant Conway (attached as a complaint exhibit) in which Defendant instructed them not to rent to minorities. Defendant wrote, “No more blacks and no more Mexicans are my instructions to you.” Defendants' Answer admits the letter.

Plaintiffs move for judgment on the pleadings as to liability only,2/ arguing their Fair Housing claim pleadings and Defendants’ admission entitle them to adjudication as a matter of law.3/

II. DISCUSSION

The novel question presented on this motion is whether it is a violation of the federal Fair Housing Act, 42 U.S.C. 3604(a), for an apartment owner to instruct resident managers not to rent to minority applicants, even if no further discriminatory action is taken as a result of the instruction. The Court determines it is, and that 3604(a) is broad enough to cover such conduct.

The federal Fair Housing Act provides:
    it shall be unlawful-- (a) To refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.

42 U.S.C. 3604(a).

Defendants contend that, even though the discriminatory instruction to their resident managers is admitted, the instruction is not a 3604(a) violation because it resulted in no discriminatory action -- the managers refused to follow the instruction. To be actionable, Defendants argue, there must be some discriminatory action taken as a result of the discriminatory instruction.

The few cases touching on discriminatory instructions also involve additional discriminatory action. But, these additional acts are treated as part of the evidentiary showing of discrimination, rather than a required element of the claim. For example, in United States v. Youritan Construction from a California district court, the resident manager of an apartment complex instructed her rental agents to discriminate against blacks and other minorities in the rental of apartments at the complex, and stated it was “defendants' policy and disposition to avoid renting to black tenants.” 370 F. Supp. 643, 646 (N.D. Cal. 1973). Defendants engaged in acts of discrimination, including falsely telling black rental applicants that no apartments were available and using a “credit check” to dissuade blacks from renting. Id. at 648, 650-51.

Finding a violation of section 3604(a), the Youritan Court stated to “otherwise make unavailable” or to deny housing because of race “appears to be as broad as Congress could have made it, and all practices which have the effect of denying dwellings on prohibited grounds are therefore unlawful.” Id. at 648 (relying on United States v. Real Estate Development Corp., 347 F. Supp. 776 (N.D. Miss. 1972)). The court also said,
    [r]acially derogatory remarks, by those in a position to influence the attitude of fellow and subordinate employees toward apartment applicants of a particular race, can reasonably be expected to adversely affect the rental opportunities of applicants. Thus, laws prohibiting discrimination in housing because of race prohibit not only, for example, overt racial rejection of applicants, but subtle behavior as well.

Id. (relying on United States v. Mitchell, 327 F. Supp. 476 (N.D. Ga. 1971)).

In United States v. L & H Land Corporation from a Florida District Court, the manager of an apartment complex made statements to two residents of the complex that blacks were not allowed at the apartments, and residents could not have blacks as guests. 407 F.Supp. 576, 578 (S.D. Fla. 1976). The apartment manager refused to permit one of the residents to entertain two black guests at a private party on the apartment complex grounds.

The Court held the apartment manager's statements to the residents were an admission of a policy in violation of Section 3604(a) and 3604(b). See id. at 579. The court ruled these statements, coupled with the manager refusing to permit one of the residents to entertain two black guests, and other acts, “all constitute persuasive evidence that [the manager] engaged in a course of conduct in violation of both 42 U.S.C. 3604(a) and (b).” Id.

Finally, in the Ninth Circuit’s Harris v. Itzhaki, 183 F.3d 1043 (9th Cir. 1999), Plaintiff, a black tenant, overheard an assistant apartment manager say, “The owners don’t want to rent to Blacks.” Id. at 1048. There were also specific acts of claimed discrimination. The Court held the discriminatory statement was part of an evidentiary showing establishing a triable issue on the existence of a section 3604(a) claim.

The Court holds a discriminatory instruction alone may be the basis of a section 3604(a) claim, without other accompanying discriminatory action. Giving an instruction to discriminate against prospective minority tenants is itself an act to “otherwise make unavailable” housing under section 3604(a).

Congress has made the scope of section 3604(a) very wide. As noted in Youritan, the phrase to “otherwise make unavailable” or to deny housing because of race “appears to be as broad as Congress could have made it, and all practices which have the effect of denying dwellings on prohibited grounds are therefore unlawful.” Id. at 648.

Here, the apartment owner was in a position to influence the actions of the apartment managers toward minority apartment applicants. Agents can be expected to carry out the instructions of their employers. As Youritan noted, such a situation “can reasonably be expected to adversely affect the rental opportunities of applicants.” By instructing Plaintiffs not to rent to minorities, Defendant set in motion a process which, if carried through, would result in minorities being denied housing. The Spencers' refusal to comply with their employer's instruction does not mean the statute was not violated. This kind of subtle action is what Congress intended to prohibit as “otherwise mak[ing] unavailable” housing to people because of race. 42 U.S.C. 3604(a).

III. DISPOSITION

Judgment on the pleadings, as to liability only, is GRANTED on the 42 U.S.C. 3604(a) claim. Issues of causation and damages still remain.

DATED: July ___, 2001


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GARY L. TAYLOR
UNITED STATES DISTRICT JUDGE


1/ Defendants are the Conway Family Trust, which owns the complex, and Daniel Conway, who is the trustee.

2/After the pleadings are closed, a party may move for judgment on the pleadings. Rule 12(c), Federal Rules of Civil Procedure. Rule 12(c) does not specifically authorize or prohibit a motion for “partial” judgment on the pleadings. It is the practice of many courts to permit “partial” judgment on the pleadings, such as on a certain issue, claim, or defense. Schwarzer, California Practice Guide, Federal Civil Procedure Before Trial, 9:340.

3/The Court has already ruled in an earlier motion Plaintiffs have standing to bring a federal Fair Housing Act claim. Claims under the Fair Housing Act “are to be judged under a very liberal standing requirement” and plaintiffs need not allege they are direct victims of discrimination. Harris v. Itzhaki, 183 F.3d 1043, 1049 (9th Cir. 1999). A plaintiff must satisfy the Article III requirement of injury in fact, but “any person harmed by discrimination, whether or not the target of the discrimination, can sue to recover for his or her own injury,” and can do so “even where no housing has actually been denied to persons protected under the Act.” Id. at 1050 (emphasis in original). Plaintiffs who have suffered some injury of their own may assert the rights of others who are the more direct victims of a violation. Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 103 n.9 (1979); Mackey v. Nationwide Ins. Cos., 724 F.2d 419, 423 (4th Cir. 1984). Residents or former residents also have standing to assert their own right to live in an integrated community free of housing discrimination. Id. at 113-15.


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