EDWARD J. DAVILA, District Judge.
Plaintiffs
The court has subject matter jurisdiction over Plaintiffs' Federal FHA discrimination claims in this action pursuant to 28 U.S.C. § 1331, and maintains supplemental jurisdiction over Plaintiffs' state law claims pursuant to 28 U.S.C. § 1367. Based on a careful review of the parties' briefing, as well as the arguments of counsel at the hearing held on April 20, 2017, Defendants' Motion will be GRANTED IN PART and DENIED IN PART for the reasons explained below.
Plaintiffs are self-described "low income Latino residents" of Las Animas Apartments. The Las Animas Apartments are comprised of two complexes in Gilroy, California: a 32-unit building located at 611 E. 7th Street, as well as a 20-unit building located at 590 Stoney Court, (collectively "the Gilroy Complexes").
Ismael Jimenez, Yolanda Jimenez, Antonio Jimenez, Angeles Jimenez, and Angeles' two minor children — "N.J." (age 14) and "S.J." (age 8) — (collectively "the Jimenez Family") are residents of the Gilroy Complex at 590 Stoney Court. FAC ¶ 8. The Jimenez Family has lived at this location since November 2008.
Carmentina Herrera, her adult son Luis Alvarez, and her three minor children — "B.A." (age 16), "S.A." (age 15), and "A.A." (age 12) — (collectively "the Herrera Family") are all residents of the Gilroy Complex at 590 Stoney Court and have lived there since February 2015.
Ebaristo Alavez, Josefa Jimenez, and their five minor children — "G.A." (age 17), "J.A." (age 14), "D.A." (age 12), "C.A." (age 8), and "A.A." (age 6) — (collectively, "the Alavez-Jimenez Family") are all residents at 590 Stoney Court and have lived there since November 2008.
Jesucita Ortiz, Rodolfo Robles, and their five minor children — E.R." (age 14), "E.R." (age 12), "J.D.R." (age 10), "L.R." (age 7), and "A.R." (age 6) — are residents at 611 E. 7th Street in Gilroy, California. They have lived there since October 2009. Ms. Ortiz and Mr. Robles identify as Latino and are of Mexican descent.
Project Sentinel is a non-profit California corporation with its principal place of business located at 1490 El Camino Real, in Santa Clara, California. Compl. FAC ¶ 12 "Project Sentinel's mission is to develop and promote fairness and equality of housing for all persons and to advocate peaceful resolution of disputes for community welfare and harmony and one of its specific goals is the elimination of all forms of illegal housing discrimination."
The Gilroy Complexes are owned by Defendant David Tsai, who currently resides in Santa Clara County, California . FAC ¶ 13. Defendant Undine Tsai owns residential rental properties located at 10160 and 10162 Park Circle West in Cupertino, California (the "Cupertino Properties"). Plaintiffs assert that Undine Tsai also actively participates in management of each of the Gilroy Complexes and the properties in Cupertino. FAC ¶ 14. Plaintiffs contend, on information and belief, that Defendant Shang Shen is the property manager at the Gilroy Complexes.
Plaintiffs allege that residents at the Gilroy Complexes have long endured unsanitary and unsafe living conditions, including, inter alia, infestations of rats, mice, roaches, and bedbugs; serious sewage back-ups and plumbing leaks; lack of operating heaters; pervasive mold, especially in bathrooms; dangerous electrical problems, unsecured locks on the doors, inadequate lighting, and loose railings and rotting second floor walkways. FAC ¶¶ 2, 34, 42, 51, 55, 66, 73, 80. That despite knowing of these persistent unhealthy and unsafe conditions, Defendant owner David Tsai and Defendant property managers Undine Tsai and Shang Shen largely ignored Plaintiffs' numerous requests for repairs and complaints regarding the habitability of their apartment units. FAC ¶¶ 2, 35, 42-44, 51-52, 55-60, 66-68.
Plaintiffs further allege that the poor conditions of the Gilroy Complexes stand in stark contrast to the conditions of the Cupertino Property owned by Defendant Undine Tsai. Based on a survey conducted by Project Sentinel, Plaintiffs allege that "the majority of responsive households at the Cupertino property stated that there were no maintenance issues in their units" and indicated that "they were satisfied with the time it took for repairs to be made." FAC ¶ 76. Plaintiffs represent that the Cupertino Property is made up East Asian, Indian, and White residents, and has no known Latino households. FAC ¶ 77.
With respect to the Jimenez Family specifically, Plaintiffs allege that on April 27, 2016, representatives from the Law Foundation of Silicon Valley visited the Jimenez Family's unit. FAC ¶ 46. On June 7, 2016, Defendants served the Jimenez Family with a 60-Day Notice of termination of tenancy.
Plaintiffs filed the original complaint in this case (Dkt. No. 1) on August 5, 2016. FAC ¶ 48. Eleven days later on August 16, 2016, Defendant David Tsai filed an unlawful detainer action against the Jimenez Family. FAC ¶ 49.
Apart from the concerns regarding the conditions of the property, Plaintiffs also contend that Defendants regularly intimidated children at the Gilroy Complexes in an effort to prevent them from playing outside and in the common areas. Plaintiffs allege that Shang Shen, the on-site property manager, yelled at their children on numerous occasions for playing outside, ordered Plaintiffs to remove a basketball hoop in their own yard, took balls and toys away from the children, and even nailed shut Ms. Ortiz and Mr. Robles' fence to prevent the children from having access to the common area. FAC ¶¶ 3, 30-31, 41, 62-64. Plaintiffs contend that Defendants' actions, behaviors, and practices have created such a hostile environment that when children see Shang Shen, they retreat indoors out of fear.
Federal Rule of Civil Procedure 8(a) requires a plaintiff to plead each claim with sufficient specificity to "give the defendant fair notice of what the... claim is and the grounds upon which it rests."
At the motion to dismiss stage, the court must read and construe the complaint in the light most favorable to the non-moving party.
When deciding whether to grant a motion to dismiss, the court generally "may not consider any material beyond the pleadings."
As an initial matter, Defendants argue that Undine Tsai is not a proper party to this action because she has no ownership interest in the Gilroy Complexes at issue.
Notwithstanding this evidence, the court finds that Plaintiffs sufficiently allege potential liability as to Undine Tsai that is independent of any legal interest in the Gilroy Complexes. Plaintiffs allege that Undine Tsai was a property manager for the Gilroy Complexes and "actively participate[d] in management of" each of the Gilroy and Cupertino properties. FAC ¶¶ 2, 14, 16 109. In her capacity as property manager, Plaintiffs contend that Undine Tsai knew of unsanitary and unsafe conditions at the Gilroy Complexes — including a lack of adequate heating, "sewage backups, dangerous electrical problems, and infestations of rats, roaches and bedbugs" — and "ignored Plaintiffs' numerous requests to repair these significant problems." FAC ¶ 2. Plaintiffs further alleged that it was Undine Tsai who had contacted the Jimenez family in person at their home and questioned them regarding "whether any lawyers had come to ask them about the conditions of their unit." FAC ¶ 46. Notably, this is one of the specific actions Plaintiffs plead as the basis for their retaliation claim.
It is also possible — as Plaintiffs argue — that as the property manager for the Gilroy Complexes, Undine Tsai could be held vicariously liable for the alleged discriminatory actions of Defendant Shang Shen, if Shang Shen was acting as an agent or employee of Undine and David Tsai when he took any such actions.
Accepting these factual allegations as true for the purposes of the instant Motion, Plaintiffs have adequately advanced legal theories under which Undine Tsai could be directly liable for her personal conduct in managing the properties, and/or vicariously liable for the conduct of her agents or employees. Accordingly, Undine Tsai is a proper defendant to the claims asserted in this action. Defendants' Motion to Dismiss all claims against Undine Tsai as an improper party is therefore DENIED. To the extent that Defendants' Reply brief challenges the sufficiency of the factual allegations in stating a legal claim — i.e. that Plaintiffs "fail to assert facts...that [Undine Tsai's] failure to repair was based on discrimination" — such challenges will be addressed with Defendants' other 12(b)(6) arguments.
Plaintiffs' first four causes of action assert claims for violations of the federal Fair Housing Act ("FHA") and California's Fair Employment and Housing Act ("FEHA"). Plaintiffs allege that Defendants discriminated against them in the terms, conditions, privileges, and services provided at the Gilroy Complexes by failing to maintain adequate, sanitary, and safe living conditions, and by prohibiting children from playing outside and otherwise enjoying the facilities on the property. FAC ¶¶ 94, 97, 100, 104. Plaintiff alleges that such discrimination occurred on the basis of familial status, race, and national origin.
The Fair Housing Act (FHA) makes it "unlawful to discriminate against any person in the terms, conditions, or privileges of sale or rental, or in the provision of services or facilities in connection therewith, because of race, color, religion, sex, familial status, or national origin." 42 U.S.C. § 3604(b). The Secretary of Housing and Urban Development ("HUD") — the agency tasked with implementing FHA — further provides that discrimination "in the provision of services or facilities" includes "failing or delaying maintenance or repairs" of a rental dwellings, or "limiting the use or privileges, services, or facilities associated with a dwelling," on account of "race, color, religion, sex, handicap, familial status, or national origin." 24 C.F.R. § 100.65(a)(1), (4);
"A plaintiff can establish a FHA discrimination claim under a theory of disparate treatment or disparate impact."
The provisions of FEHA at issue in this case protect substantially the same rights as the relevant FHA provisions and are subject to the same analysis.
Defendants argue that Plaintiffs fail to state a claim for discrimination on the basis of race or national origin because they allege no facts connecting Defendants' purported failure to provide necessary repairs and maintenance with Plaintiffs' race or national origin. MTD at 8.
The court disagrees. At this stage, Plaintiffs have plead facts giving rise to a facially plausible claim that Plaintiffs' race or national origin was a motivating factor in Defendants' conduct. Plaintiffs allege that "[a]ll or almost all of the residents of the Gilroy Complexes identify as Latino," and the majority of the residents are of Mexican descent. FAC ¶ 33. Plaintiffs allege that the Gilroy Complexes are rife with dangerous, unsanitary, and uninhabitable conditions, including infestations of rats, mice, roaches, and bedbugs, sewage back-ups and plumbing leaks, lack of operating heaters, pervasive mold, and rotting walkways. FAC ¶¶ 34, 42, 51, 55, 66, 73, 80. Plaintiffs assert that residents "regularly make repair requests and complaints about their respective units' habitability problems" to Defendants, but Defendants "largely ignore" complaints and repair requests at the Gilroy Complexes. FAC ¶¶ 35, 42-44, 51-52, 55-60, 66-68. In contrast, based on a survey Project Sentinel conducted in connection with this case, Plaintiffs allege that "the majority of responsive households at the Cupertino property stated that there were no maintenance issues in their units" and indicated that "they were satisfied with the time it took for repairs to be made." FAC ¶ 76. Plaintiffs represent that the Cupertino Property is made up East Asian, Indian, and White residents, and has no known Latino households. FAC ¶ 77. Plaintiffs contend that "the only apparent reason for the difference in maintenance of the properties appears to be the national origin and race of the tenants at the two properties." Opp. at 9-10.
Defendants encourage the court to disregard the comparison Plaintiffs draw between the Gilroy Complexes and the Cupertino apartments because the properties have different ownership.
Construing the allegations in the light most favorable to Plaintiffs, the court finds that Plaintiffs have plead facts sufficient to state a claim for discrimination on the basis of race and national origin under FEHA and the FHA. Accordingly, Defendants' Motion to Dismiss is DENIED as to claims Two and Four.
Plaintiffs also allege that Defendants discriminated against them on the basis of family status by prohibiting kids at the Gilroy Complexes from playing outside on the property, enforcing rules arbitrarily against kids, and creating such a hostile environment towards kids that it precludes families with children from having equal use and enjoyment of the property. FAC ¶¶ 3, 94, 100.
Defendants argue that Plaintiffs have not made a prima facie case of discrimination because they failed to show that they were subjected to "facially discriminatory rules which treat children, and thus, families with children, differently and less favorably than adults-only households." MTD at 10. They argue that Plaintiffs have not identified a written policy or a "hard and fast rule" entirely barring children from playing outside.
To the extent that Plaintiffs' claim is based on a policy at the Gilroy Complexes, the court agrees that Plaintiffs fail to make a prima facie case of discrimination. Plaintiffs allege that Defendants discriminated on the basis of family status by arbitrarily enforcing facially neutral policies in such a way as to only harm families with children. However, unlike the cases cited by Plaintiffs, where an express policy limiting or prohibiting children from engaging in certain activities was identified and challenged by the plaintiff-families, here, Plaintiffs do not identify a facially discriminatory policy; they allege instances where Defendant Shang Shen prevented their children from playing in a particular place or manner. Plaintiffs have not alleged that Defendants "prohibited" all children from using the common areas, nor have they offered any examples illustrating how any purported policy impacted children differently than adults.
However, Plaintiffs have alleged facts on which a jury could find that Defendants created a hostile environment for children and/or families with children. As of October 2016, the HUD's Code of Federal Regulations expressly states that discriminatory conduct under the FHA may include hostile environment harassment. 24 C.F.R. § 100.600. The regulation provides,
24 C.F.R. § 100.600(a)(2). Whether a hostile environment exists "depends upon the totality of the circumstance," and should consider factors such as "the nature of the conduct, the context in which the incident(s) occurred, the severity, scope, frequency, duration, and location of the conduct, and the relationships of the persons involved."
Here, Plaintiffs allege facts that, if true, suggest Defendants' actions went beyond minimal restrictions and instead were oppressive and hostile to children and families with children. Specifically, Plaintiffs allege that on August 2, 2016, Defendant Shang Shen yelled at their children for playing hide and seek outside, and told them to leave the common area and return to their own yard. FAC. ¶ 64. When the children went to their own backyard space, Plaintiffs allege that Shang Shen yelled at them again and told them that they should be playing inside. Plaintiffs contend that Shang Shen regularly engages in this kind of behavior, forcefully telling Plaintiffs' children not to play outside and not to make noise. FAC ¶¶ 31, 41. Plaintiffs also allege that they were ordered to remove a basketball hoop in their own yard to prevent children from playing outside, and have witnessed Shang Shen taking balls and toys away from the children. FAC ¶¶ 30-31, 63. Plaintiffs further allege that Defendant Shang Shen even went as far as to nail shut Ms. Ortiz and Mr. Robles' fence to prevent their children from accessing the common areas. FAC. ¶ 62. Based on these persistent behaviors, among others, Plaintiffs assert that their children are afraid of Defendant Shang Shen, that they "usually retreat indoors with their toys when they see him approach," and that "[s]ome children completely avoid playing outdoors at the Gilroy Complexes in order to avoid Mr. Shen." FAC ¶ 31. Drawing all reasonable inferences in Plaintiffs' favor, and based on the totality of the circumstances, Plaintiffs have alleged that Defendants perpetrated "unwelcome conduct" of sufficient severity to interfere with Plaintiffs' use or enjoyment of their property, or "the provision or enjoyment of services or facilities in connection therewith." See 24 C.F.R. § 100.600(a)(2). Plaintiffs have therefore stated a claim for discrimination on the basis of family status under the theory of "hostile environment harassment."
Accordingly, Defendants' Motion to Dismiss claims one and three for discrimination on the basis of family status is GRANTED to the extent the claims are based on an allegedly discriminatory policy, and DENIED to the extent the claims are based on Defendants' creation of a hostile environment. Dismissal is granted WITH LEAVE TO AMEND.
California's Unruh Civil Rights Act affords broad protection against discrimination, providing that all persons, regardless of sex, race, color, religion, ancestry, national origin, disability, or medical condition, are entitled to "full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever." Cal. Civ. Code § 51. The Act prohibits landlords from discriminating against potential or existing tenants on the basis of national origin, and has been interpreted to similarly preclude such discrimination against children and families with children.
Defendants move to dismiss Plaintiffs' Unruh Act claim on the same basis as they move to dismiss Plaintiffs' discrimination claims.
Plaintiffs' Sixth, Seventh, and Eighth causes of action assert that Defendants violated section 3617 of the FHA, section 12955.7 of FEHA, and California Civil Code section 1942.5 by retaliating against the Jimenez Family for (1) making complaints about the substandard condition of the property, meeting with legal representatives from the Law Foundation of Silicon Valley regarding their housing rights, and attempting to exercise such rights in connection with their tenancy at the Gilroy Complexes.
The FHA provides that it "shall be unlawful to coerce, intimidate, threaten, or interfere with any person in the exercise or enjoyment of, or on account of his having exercised or enjoyed, any right granted or protected by [42 U.S.C. § 3604]." 42 U.S.C. § 3617. The
Here, Defendants argue that the timeline of events in this case fail to establish that any allegedly retaliatory action taken by Defendants was made in response to any action by Plaintiffs, and Plaintiffs therefore fail to demonstrate a causal link between the protected activity and the adverse action. However, the isolated examples Defendants offer in support of this argument are unpersuasive in light of all the factual allegations actually asserted in this case.
The Jimenez Family's retaliation claims are primarily based on Defendants' termination of their tenancy and subsequent unlawful detainer action against them. In relevant part, Plaintiffs allege that on April 27, 2016, legal representatives from the Law Foundation of Silicon Valley visited the premises to investigate the conditions on the property. FAC ¶ 46. Forty-one days later, on June 7, 2016, Defendants served a 60-day notice of termination of tenancy served on the Jimenez Family.
Defendants argue that prior to visiting the Jimenez Family on June 8, 2016, Undine Tsai "clearly had no idea that Plaintiffs had been meeting with lawyers from the Law Foundation," and therefore the 60-day notice of termination could not be retaliation for these meetings. MTD at 14; see Reply at 10. Defendants contend that Undine Tsai's purported lack of prior knowledge is evidenced by the fact that the notice of termination of tenancy was served before Undine Tsai met with the Jimenez Family.
Defendants then seek to rely on the July 19 letter, wherein their counsel provided alternative explanations for terminating the Jimenez Family's tenancy, in an effort to show that there were legitimate, non-retaliatory reasons for their action.
In the FAC, Plaintiffs allege that Defendants further retaliated against them in response to their filing of this lawsuit. This action was filed on August 5, 2016, and Defendants' counsel was sent a copy of the original complaint (Dk. No. 1). FAC ¶ 48. Nevertheless, Plaintiffs allege that on August 16, 2016, only 11 days after Defendants were provided with a copy of the original complaint, Defendant David Tsai filed an unlawful detainer action against the Jimenez Family. FAC ¶ 49. Defendants argue that this was not retaliatory, as eviction proceedings were the natural progression of the process Defendants initiated on June 7, 2016 when they first served the Jimenez Family with the 60-day notice of termination. The court agrees that Defendants' initiation of an unlawful detainer action does not establish an independent basis for a retaliation claim under the facts currently in the record. Rather, whether proceeding with the eviction of the Jimenez Family was retaliatory depends on whether terminating their tenancy was retaliatory. Because the court finds that Plaintiffs adequately plead retaliation as to the termination of tenancy, Plaintiffs' allegations regarding the unlawful detainer action similarly thrive as part of the overall factual basis for the retaliation claims asserted.
Based on the foregoing, the court concludes that, based on the facts alleged, a jury could find that Defendants retaliated against the Jimenez Family in violation of the FHA, FEHA, and Civil Code section 1942.5. Defendants' Motion to Dismiss is therefore DENIED as to claims six, seven, and eight.
Project Sentinel is named as a plaintiff in this case in connection with the First, Second, Third, and Fourth causes of action. Defendants argue that Project Sentinel's lacks standing under Article III because it has not suffered an injury-in-fact. The court agrees.
In
Here, Plaintiffs contend that Project Sentinel satisfies the injury in fact requirements as outlined by the Ninth Circuit in
Absent more, these allegations fail to plead a cognizable harm to Project Sentinel's mission. Plaintiffs fail to explain how Defendants' conduct toward the tenant-Plaintiffs in this case — even if "discriminatory and predatory," as Plaintiffs allege — actually frustrates Project Sentinel's broader organizational purpose. To constitute an injury under this theory, a defendant's conduct must do more than offend the priorities and principles of the organization; it must result in an actual impediment to the organization's real-world efforts on behalf of such principles.
Plaintiffs similarly fall short in demonstrating that Project Sentinel's efforts in this action resulted in a significant diversion of resources. Plaintiffs assert that "in order to monitor the violations and educate the public regarding the discrimination at issue, [Project Sentinel] had to divert its scarce resources from other efforts to provide outreach and education to the community." Opp. at 19; FAC ¶ 78. Specifically, Plaintiffs highlight that Project Sentinel directed a door-to-door survey of tenants at the Gilroy Complexes regarding housing conditions and treatment by the landlord (FAC ¶ 71) and "conducted a presentation in Gilroy to Latino residents to inform them of their fair housing rights and [] to educate them on national origin and familial status discrimination" (FAC ¶ 78). Opp. at 19-20.
However, Plaintiffs fail to explain how any of the aforementioned efforts extended beyond the normal, day-to-day work regularly undertaken by Project Sentinel. Moreover, Plaintiffs have offered no concrete details regarding the "significant resources" that it claims have been and will continue to be diverted as a result of Defendants' practices. Unlike in
In light of these deficiencies, Project Sentinel has failed to establish an injury in fact and thus lacks Article III standing. Accordingly, Defendants' Motion to Dismiss is GRANTED with respect to Project Sentinel only as to the First, Second, Third, and Fourth causes of action. These claims are dismissed WITH LEAVE TO AMEND.
Based on the foregoing, Defendants' Motion to Dismiss is GRANTED IN PART and DENIED IN PART as follows:
1. The Motion is to Dismiss all claims against Defendant Undine Tsai as an improper party is DENIED.
2. The Motion to Dismiss Project Sentinel for lack of Article III standing in connection with the First, Second, Third, and Fourth causes of action is GRANTED.
3. The Motion is DENIED as to the Second and Fourth causes of action asserting discrimination on the basis of race and national origin in violation of the FHA and FEHA.
4. As to the First and Third causes of action asserting discrimination on the basis of family status in violation of the FHA and FEHA, the Motion is GRANTED to the extent the claims are based on an allegedly discriminatory policy, and DENIED to the extent the claims are based on Defendants' creation of a hostile environment.
5. The Motion is DENIED as to the Fifth cause of action asserting violation of California Unruh Civil Rights Act, Cal. Civ. Code § 51.
6. The Motion is DENIED as to the Sixth, Seventh, and Eighth causes of action asserting retaliation in violation of the FHA, FEHA, and California Civil Code section 1942.5.
7. All claims subject to dismissal are dismissed WITH LEAVE TO AMEND. And amended complaint shall be filed no later than
