noting that “[i]f both [the official capacity officer and the local 19 government entity] are named, it is proper upon request for the Court to dismiss the official- 20 capacity officer, leaving the local government entity as the correct defendant.”
How later courts described this case
- noting that “[i]f both [the official capacity officer and the local 19 government entity] are named, it is proper upon request for the Court to dismiss the official- 20 capacity officer, leaving the local government entity as the correct defendant.”
- noting that “[i]f both 2 official capacity officer and the local government entity] are named, it is proper upon 3 ||request for the Court to dismiss the official-capacity officer, leaving the local government 4 |lentity as the correct defendant.”
- courts are prevented 3 from “creat[ing] prudential barriers to standing” in FHA suits.
Written by the judges who cited it.
The opinion
1
2
3
4
5 UNITED STATES DISTRICT COURT
6 SOUTHERN DISTRICT OF CALIFORNIA
7
8 PATRICE BAKER, GLORIA COOPER, Case No.: 19-CV-1013-AJB-BLM
LESLIE DUDLEY LETITIA FLYNN,
9
KATHLEEN MACLEOD, EILEEN ORDER:
10 OSBORNE AND KHALADA SALAAM-
12 ALAJI, individuals, (1) GRANTING MOTION OF
11
DEFENDANTS COUNTY OF SAN
Plaintiffs,
12 DIEGO AND COUNTY
v. SUPERVISORS GREG COX,
13
DIANNE JACOB, KRISTIN
CITY OF SAN DIEGO, et al.,
14 GASPAR, NATHAN FLETCHER,
Defendants. AND JIM DESMOND IN THEIR
15
OFFICIAL CAPACITY TO DISMISS
16 PLAINTIFF’S COMPLAINT;
17
(2) GRANTING IN PART AND
18 DENYING IN PART CITY OF SAN
DIEGO’S MOTION TO DISMISS;
19
AND
20
(3) GRANTING IN PART AND
21
DENYING IN PART DEFENDANTS
22 SAN DIEGO HOUSING
COMMISSION AND RICHARD C.
23
GENTRY’S MOTION TO DISMISS
24 PLAINTIFFS’ COMPLAINT UNDER
FRCP 12(b)(1), (6) and (7)
25
(Doc. Nos. 26, 27, 29)
26
27
28
1 Presently before the Court are Defendants County of San Diego, and County
2 Supervisors Greg Cox, Dianne Jacob, Kristen Gaspar, Nathan Fletcher, and Jim Desmond
3 motion to dismiss Plaintiffs’ complaint, (Doc. No. 26), Defendant City of San Diego
4 motion to dismiss, (Doc. No. 27), and Defendants San Diego Housing Commission and
5 Richard C. Gentry’s motion to dismiss Plaintiffs’ complaint under FRCP 12(b)(1), (6) and
6 (7), (Doc. No. 29). Plaintiffs filed oppositions to each motion to dismiss, (Doc. Nos. 34,
7 35, 36), and Defendants each filed a reply, (Doc. Nos. 40, 41, 42). For the reasons set forth
8 below, the Court GRANTS the County’s motion to dismiss, GRANTS in part and
9 DENIES in part the City’s motion to dismiss, and GRANTS in part and DENIES in
10 part SDHC’s motion to dismiss.
11 BACKGROUND
12 The following facts are taken from Plaintiffs’ complaint and construed as true for
13 the limited purpose of resolving this motion. See Brown v. Elec. Arts, Inc., 724 F.3d 1235,
14 1247 (9th Cir. 2013).
15 Defendants County of San Diego (the “County”), City of San Diego (the “City”),
16 City of San Diego Housing Authority, and San Diego Housing Commission (the “SDHC”)
17 (collectively referred to as “Defendants”) have allegedly in combined efforts denied equal
18 housing and created a disparate impact on minorities in San Diego. (Doc. No. 1 ¶ 1.) As
19 alleged, Defendants’ concentration of low-income projects in select minority
20 neighborhoods is perpetuating housing segregation and denying equal access to housing
21 opportunities for minorities. (Id. ¶ 2.) Defendants’ combined efforts have disproportionally
22 affected San Diego neighborhoods with 80% or more minorities (“Affected
23 Communities”). (Id. ¶ 3.) Encanto and Southeastern San Diego are two neighborhoods
24 within the Affected Communities. (Id.) Plaintiffs are local residents of the Affected
25 Communities. (Id. ¶ 4.)
26 The City updated and adopted new zoning policies that would increase the Affected
27 Communities’ residential capacity. (Id. ¶ 7.) SDHC used the new zoning policies to
28 implement and develop low-income housing projects in the Affected Communities. (Id.)
1 The City has also allowed the County to develop the Southeastern Live Well Center in the
2 Affected Communities. (Id.) It is further alleged that SDHC administers a voucher system
3 that disproportionally concentrates low-income minorities in the Affected Communities.
4 (Id. ¶ 9.)
5 Plaintiffs allege that by concentrating low-income housing, and other similar
6 projects, in only minority neighborhoods, Defendants have perpetuated high-poverty rates,
7 low educational achievement, and stunted economic development in the Affected
8 Communities, which are neighborhoods with over 80% minorities. (Id. ¶ 13.) Furthermore,
9 Plaintiffs allege that Defendants are perpetuating segregated neighborhoods in San Diego.
10 (Id. ¶ 14.) Plaintiffs allegedly bring this suit to reverse the concentration of poverty the
11 Affected Communities are currently experiencing as a result of Defendants’ increase of
12 low-income projects. (Id. ¶ 15.)
13 On May 30, 2019, Plaintiffs filed a complaint alleging violations of Federal Fair
14 Housing Act, 42 U.S.C. § 1983, and California Fair Employment and Housing Act. (See
15 generally Doc. No. 1.) On August 1, 2019, the County and the City filed a motions to
16 dismiss Plaintiffs’ complaint. (Doc. Nos. 26, 27.) On August 9, 2019, SDHC filed a motion
17 to dismiss Plaintiffs’ complaint. (Doc. No. 29.) This Order follows.
18 LEGAL STANDARD
19 A motion to dismiss pursuant to Rule 12(b)(6) tests the legal sufficiency of the
20 complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A pleading must contain
21 “a short and plain statement of the claim showing that the pleader is entitled to relief . . . .”
22 Fed. R. Civ. P. 8(a)(2). Plaintiffs must also plead, however, “enough facts to state a claim
23 to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
24 The plausibility standard thus demands more than a formulaic recitation of the elements of
25 a cause of action or naked assertions devoid of further factual enhancement. Ashcroft v.
26 Iqbal, 556 U.S. 662, 678 (2009). Instead, the complaint “must contain sufficient allegations
27 of underlying facts to give fair notice and to enable the opposing party to defend itself
28 effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).
1 In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume the
2 truth of all factual allegations and must construe them in the light most favorable to the
3 nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 (9th Cir. 1996). The
4 court need not take legal conclusions as true “merely because they are cast in the form of
5 factual allegations.” Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987) (quoting
6 W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981)). Similarly, “conclusory
7 allegations of law and unwarranted inferences are not sufficient to defeat a motion to
8 dismiss.” Pareto v. Fed. Deposit Ins. Corp., 139 F.3d 696, 699 (9th Cir. 1998).
9 Where dismissal is appropriate, a court should grant leave to amend, unless the
10 plaintiff could not possibly cure the defects in the pleading. Knappenberger v. City of
11 Phoenix, 566 F.3d 936, 942 (9th Cir. 2009).
12 DISCUSSION
13 The Court will address each of the Defendants’ motions to dismiss in turn.
14 A. County of San Diego’s Motion to Dismiss
15 The County of San Diego (the “County”) argues that the County Supervisors should
16 be dismissed and that Plaintiffs’ three causes of action against the County fail to state a
17 claim.
18 i. Requests for Judicial Notice
19 The Court “may take judicial notice of ‘matters of public record’ without converting
20 a motion to dismiss into a motion for summary judgment, as long as the facts noticed are
21 not ‘subject to reasonable dispute.’” Intri-Plex Technologies, Inc. v. Crest Grp., Inc., 499
22 F.3d 1048, 1052 (9th Cir. 2007) (quoting Lee v. City of Los Angeles, 250 F.3d 668, 689
23 (9th Cir. 2001)); see also Anderson v. Holder, 673 F.3d 1089, 1094 n.1 (9th Cir. 2012)
24 (holding that legislative history is properly the subject of judicial notice).
25 The County requests judicial notice of the following documents: Exhibit 1: The
26 publicly-posted Agenda Item No. 12 for the June 19, 2018 County of San Diego Board of
27 Supervisors regular meeting; and Exhibit 2: The minutes of the June 19, 2019 County of
28 San Diego Board of Supervisors regular meeting, with respect to the Board of Supervisors’
1 vote on Agenda Item No. 12. (Doc. No. 26-2.)
2 Plaintiffs request judicial notice of the following documents: Exhibit 1: Minute
3 Order passed by Defendant County of San Diego Board of Supervisors’ on July 24, 2019
4 meeting; Exhibit 2: Initial California Environment Quality Assurance report for Defendant
5 County’s construction of the Southeastern San Diego Live Well Center; and Exhibit 3:
6 Meeting Agenda for Defendant County of San Diego Board of Supervisors’ meeting on
7 March 12, 2019. (Doc. No. 34-2.)
8 However, the Court does not rely on these documents in reaching its conclusion
9 below. Accordingly, the Court DENIES as moot both the County’s and Plaintiffs’ requests
10 for judicial notice.
11 ii. Dismissal of County Supervisors
12 Plaintiffs have named the County of San Diego as a defendant as well as the current
13 members of the County’s Board of Supervisors in their official capacity only. (Doc. No. 1
14 ¶ 24.) “An official-capacity suit is, in all respects other than name, to be treated as a suit
15 against the entity. It is not a suit against the official personally, for the real party in interest
16 is the entity.” Enriquez v. City of Fresno, No. CV F 10-0581 AWI DLB, 2010 WL 2490969,
17 at *5 (E.D. Cal. June 16, 2010) (citation omitted); see also Luke v. Abbott, 954 F.Supp.
18 202, 204 (C.D. Cal. 1997) (noting that “[i]f both [the official capacity officer and the local
19 government entity] are named, it is proper upon request for the Court to dismiss the official-
20 capacity officer, leaving the local government entity as the correct defendant.”).
21 Accordingly, the Court DISMISSES Plaintiffs’ complaint as to the five individual County
22 Supervisors.
23 iii. Federal Fair Housing Act
24 Plaintiffs first cause of action is for violations of the federal Fair Housing Act
25 (“FHA”). (Doc. No. 1 ¶¶ 100–04.) The FHA prohibits discrimination in the “sale or rental
26 of a dwelling, or in the provision of services or facilities in connection therewith,” “because
27 of race, color, religion, sex, familial status, or national origin.” See 42 U.S.C. § 3604(b).
28 The County argues that the Southeastern Live Well Center has no housing
1 component and thus, the County does not and will not sell or rent housing, is not a real
2 estate agent, and is not providing housing construction financing. (Doc. No. 26-1 at 10.)
3 However, Plaintiffs argue that the County’s construction of the Southeastern Live Well
4 Center violates the FHA because the project will perpetuate housing segregation. (Doc.
5 No. 34 at 15.) Furthermore, Plaintiffs assert that the City authorized the land to be used for
6 building low-to-moderate housing, school facilities, a park and recreational area, an
7 enterprise zone, or an infill zone. (Id.)
8 Plaintiffs rely on several cases to support the argument that building the Southeastern
9 Live Well Center will violate the FHA because it perpetuates housing segregation. See
10 Texas Dep’t of Hous. & Cmty. Affairs v. Inclusive Communities Project, Inc. (“ICP VI”),
11 135 S. Ct. 2507 (2015); Traficante v. Metro Life Ins. Co., 409 U.S. 205 (1972); Ave. 6E
12 Invs., LLC v. City of Yuma, 818 F.3d 493 (9th Cir. 2016); and Committee Concerning Cmty.
13 Improvement v. City of Modesto, 583 F.3d 690 (9th Cir. 2009). However, with the
14 exception of Committee Concerning Cmty. Improvement, these cases all involve the sale
15 or rental of dwellings or the development of dwellings for sale or rent. In Committee
16 Concerning Cmty. Improvement, the city and county were sued for discrimination against
17 minorities based on police and fire response time to the subject dwellings and lack of sewer
18 service to the dwellings. See generally 583 F.3d 690. Plaintiffs fail to cite a case that finds
19 a FHA violation that does not relate to the sale or rental of dwellings, or the provision of
20 services or facilities in connection with such dwellings.
21 Second, Plaintiffs argument that construction of the Southeastern Live Well Center
22 violates the FHA because it could have been used for low-to-moderate housing, school
23 facilities, a park and recreational area, an enterprise zone or an infill zone is also unfounded.
24 Property is often zoned for multiple uses. If the Court accepted Plaintiffs’ argument, this
25 could potentially open the floodgates to more FHA litigation regarding real estate
26 developments that are not being used for housing purposes.
27 Accordingly, the Court DISMISSES Plaintiffs’ first cause of action against the
28 County.
1 iv. 42 U.S.C. § 1983
2 Plaintiffs’ Section 1983 claim is premised on alleged violations of “federal and state
3 housing laws” and the Equal Protection Clause of the United States Constitution. (Doc.
4 No. 1 ¶ 107.)
5 A Section 1983 claim may not be based on a violation of state law. See Galen v. Cty.
6 of Los Angeles, 477 F.3d 652, 662 (9th Cir. 2007). Accordingly, Plaintiffs’ claim fails to
7 extent that it is based on state housing laws.
8 Plaintiffs’ complaint also alleges that violations of 42 U.S.C. § 3608(e)(5) and 24
9 C.F.R. § 903.15(d) as the basis for its Section 1983 claim. (Doc. No. 1 ¶ 103.) As to 24
10 C.F.R. § 903.15(d), violations of a regulation may not form the basis of a Section 1983
11 claim. See Save Our Valley v. Sound Transit, 335 F.3d 932, 939 (9th Cir. 2003). As to 42
12 U.S.C. § 3608(e)(5), the “majority of courts have determined that a plaintiff cannot bring
13 a section 1983 claim based on a violation of 42 U.S.C. § 3608(e)(5).” S. Middlesex
14 Opportunity Council, Inc. v. Town of Framingham, No. 07-12018-DPW, 2018 WL
15 4595369, at *16–17 (D. Mass. Sept. 30, 2008). Furthermore, the Court agrees that this
16 statute is inapplicable to the County as it governs the HUD Secretary’s administration of
17 public housing policies.
18 Regarding Equal Protection claims, Plaintiffs are alleging Defendants intentionally
19 concentrate poverty in select neighborhoods based on the race of residents in the Affected
20 Communities. (Doc. No. 34 at 17.) Plaintiffs allege that the County’s decision to build the
21 Southeastern Live Well Center has a disparate-impact on minorities in the Affected
22 Communities. Specifically, Plaintiffs allege that the Southeastern Live Well Center will
23 displace housing, stunt commercial development, deflate local property values, and will
24 perpetuate the racial segregation in the City. “To state a claim under 42 U.S.C. § 1983 for
25 a violation of the Equal Protection Clause of the Fourteenth Amendment a plaintiff must
26 show that the defendants acted with an intent or purpose to discriminate against the plaintiff
27 based upon membership in a protected class.” Lee, 250 F.3d at 686 (citation omitted).
28 “Where the challenged governmental policy is ‘facially neutral,’ proof of its
1 disproportionate impact on an identifiable group can satisfy the intent requirement only if
2 it tends to show that some invidious or discriminatory purpose underlies the policy.” Id.
3 However, the allegations here do not show some invidious or discriminatory purpose
4 underlying the County’s plan to build the Southeastern Live Well Center. The Southeastern
5 Live Well Center is an office complex that will make it more convenient for the residents
6 in the area to access County services.
7 The complaint also fails to identify a County policy or custom that directed a
8 constitutional or federal-law violation. See Monell v. Dep’t of Social Services of City of
9 New York, 436 U.S. 658, 690–91 (1978).
10 Accordingly, the Court DISMISSES Plaintiffs’ Section 1983 claims against the
11 County.
12 v. California’s FEHA
13 As Plaintiffs’ claim under the FHA fails, Plaintiffs claim for violation of California’s
14 Fair Employment and Housing Act (“FEHA”) also fails. Further, it is unclear to the Court
15 whether Plaintiffs’ claim under the FEHA is even alleged against the County. Accordingly,
16 the Court DISMISSES Plaintiffs’ FEHA claim against the County.
17 B. City of San Diego’s Motion to Dismiss
18 The City of San Diego (the “City”) argues that Plaintiffs do not have standing,
19 Plaintiffs’ claims are time barred, and Plaintiffs have failed to state a claim against the City.
20 i. Requests for Judicial Notice
21 The Court “may take judicial notice of ‘matters of public record’ without converting
22 a motion to dismiss into a motion for summary judgment, as long as the facts noticed are
23 not ‘subject to reasonable dispute.’” Intri-Plex Technologies, Inc., 499 F.3d at 1052
24 (quoting Lee, 250 F.3d at 689); see also Anderson, 673 F.3d at 1094 n.1 (holding that
25 legislative history is properly the subject of judicial notice).
26 The City requests judicial notice of the following documents: Exhibit 1: Excerpts of
27 the Encanto Community Plan; Exhibit 2: Excerpts of the Southeastern San Diego
28 Community Plan; Exhibit 3: Excerpts of the Pacific Beach Community Plan; Exhibit 4:
1 Excerpts of the La Jolla Community Plan; and Exhibit 5: Excerpts of the Ocean Beach
2 Community Plan. (Doc. No. 27-2.)
3 Plaintiffs request judicial notice of the following documents: Exhibit 1: The City’s
4 Resolution No. 311500 passed on January 11, 2018; Exhibit 2: The City’s Resolution No.
5 311537 passed on February 7, 2018; Exhibit 3: The City’s Resolution No. 312218 passed
6 on March 1, 2019; Exhibit 4: The City’s Resolution No. 311635 passed on April 19, 2018;
7 Exhibit 5: The City’s Resolution No. 312485 passed on April 19, 2018; Exhibit 6: The
8 City’s Resolution No. 312600 passed on August 15, 2019; Exhibit 7: The City’s Resolution
9 No. 312602 passed on August 15, 2019; Exhibit 8: Minute Order passed by the County
10 Board of Supervisors’ on July 24, 2019 meeting; Exhibit 9: Initial California
11 Environmental Quality Assurance report for the County’s construction of the Southeastern
12 San Diego Live Well Center; Exhibit 10: Board Minutes of the County’s March 12, 2019
13 meeting; and Exhibit 11: The City’s 2018 Annual Housing Inventory Report. (Doc. No.
14 35-2.)
15 However, the Court does not rely on these documents in reaching its conclusion
16 below. Accordingly, the Court DENIES as moot both the City’s and Plaintiffs’ requests
17 for judicial notice.
18 ii. Standing
19 The City argues that Plaintiffs do not have standing because they have not alleged a
20 concrete and particularized injury traceable to the challenged conduct. (Doc. No. 27 at 12.)
21 To demonstrate Article III standing under the United States Constitution, “[a] plaintiff must
22 allege personal injury fairly traceable to defendant’s allegedly unlawful conduct and likely
23 to be redressed by the requested relief.” Allen v. Wright, 468 U.S. 737, 751 (1984),
24 overruled on other grounds in Lexmark Int’l, Inc. v. Static Control Components, Inc., 134
25 S. Ct. 1377 (2014); see also Raines v. Byrd, 521 U.S. 811 818–19 (1997).
26 Plaintiffs assert that they do in fact have standing because they are local residents of
27 the communities that are being adversely affected by the City’s concentration of poverty.
28 The Court agrees that Plaintiffs have standing. “[A] congressional intent to define standing
1 as broadly as is permitted by Article III of the Constitution.” Trafficante, 409 U.S. at 209;
2 see also Havens Realty Corp. v. Coleman, 455 U.S. 363, 372 (1982) (courts are prevented
3 from “creat[ing] prudential barriers to standing” in FHA suits.) “[T]he proponents of the
4 legislation emphasized that those who were not the direct objects of discrimination had an
5 interest in ensuring fair housing, as they too suffered.” Trafficante, 409 U.S. at 210.
6 Furthermore, the Supreme Court has recognized that an entire community had standing to
7 challenge realtors under the FHA because “[t]he adverse consequences attendant upon a
8 ‘changing’ neighborhood can be profound.” Gladstone Realtors v. Village of Bellwood,
9 441 U.S. 91, 99 (1979). Here, just as in Bellwood, Plaintiffs have alleged that they are
10 residents of the Affected Communities and have alleged that their communities are
11 suffering from the City’s alleged violations.
12 The City further argues that Plaintiffs failed to allege a causal connection and that
13 the alleged injury can be redressed by a favorable decision in this litigation. See Lujan v.
14 Defenders of Wildlife, 504 U.S. 555, 560–61 (1992). However, Plaintiffs do allege a causal
15 connection. Plaintiffs allege that their communities are impacted by the City’s alleged
16 violations. Furthermore, Plaintiffs have also alleged that a favorable outcome of this
17 litigation will redress the alleged injury as blocking future affordable housing projects
18 would prevent further segregation.
19 Accordingly, the Court DENIES the City’s motion to dismiss on standing.
20 iii. FHA Statute of Limitations
21 The FHA statute of limitations requires aggrieved parties to file a civil action “not
22 later than two years after the occurrence or termination of an alleged discriminatory
23 housing practice to obtain appropriate relief.” 42 U.S.C. § 3613(a)(1)(A). The Ninth Circuit
24 recognized, under the FHA, “[t]he continuing violations doctrine permits a plaintiff to sue
25 for all discriminatory acts that occurred during the limitations period, even if the policy or
26 other event giving rise to the discrimination occurred outside the limitations period.”
27 Comm. Concerning Cmty. Improvements, 583 F.3d at 702. To establish this the “plaintiff
28 must show that a pattern or practice of discrimination creates an ongoing violation.” Id.
1 The City asserts that Plaintiffs’ claim under the FHA is time barred because the
2 alleged discriminatory policy was adopted in 2015 and 2016. However, Plaintiffs have
3 alleged that the City engaged in a pattern and practice of alleged discrimination of
4 concentrating majority of the low-income housing in minority neighborhoods that are
5 already suffering from high-poverty rates. The City argues that subsequent actions to
6 approve affordable housing projects allowed under the alleged discriminatory policy do
7 not constitute a continuing violation. However, this is exactly what Plaintiffs have alleged
8 and established in their complaint. Accordingly, Plaintiffs’ FHA claim is not time barred.
9 iv. Section 1983 Statute of Limitations
10 Equal protection claims under Section 1983 are subject to the state statute of
11 limitations for personal injury claims. Comm. Concerning Cmty. Improvements, 583 F.3d
12 at 701. In California, the applicable statutory time period is two years. Cal. Code Civ. Proc.
13 § 335.1. The City again alleges that the alleged discriminatory policy was adopted in 2015
14 and 2016. However, as explained above, Plaintiffs have alleged and established in their
15 complaint that there is a continuing violation. Accordingly, Plaintiffs’ Section 1983 claim
16 is not time barred.
17 v. FEHA Statute of Limitations
18 FEHA provides that no complaint for any violation of its provisions may be filed
19 “after the expiration of one year from the date upon which the alleged unlawful practice or
20 refusal to cooperate occurred,” with an exception for delayed discovery. Cal. Gov. Code
21 §§ 12960, 12980. The City again alleges that the alleged discriminatory policy was adopted
22 in 2015 and 2016. However, as explained above, Plaintiffs have alleged and established in
23 their complaint that there is a continuing violation. Accordingly, Plaintiffs’ FEHA claim is
24 not time barred.
25 vi. Sufficient Specificity of an Offending Discriminatory Policy
26 The City argues that Plaintiffs cannot state a viable claim because they have not
27 identified an offending discriminatory policy with sufficient specificity. (Doc. No. 27 at
28 16.) Under the FHA, it is unlawful to “make available or deny” a “dwelling” to a person
1 because of that person’s race, color, religion, sex, familial status, or national origin. 42
2 U.S.C. § 3604. A plaintiff can establish a FHA violation under a theory of disparate
3 treatment or disparate impact. Disparate treatment is intentional discrimination. See Ave.
4 6E Invs., LLC, 818 F.3d at 502. Disparate impact discrimination includes “actions by
5 private or governmental bodies that create a discriminatory effect upon a protected class or
6 perpetuate housing segregation without any concomitant legitimate reason.” Id. at 503. To
7 prove a disparate impact claim, the plaintiff must identify a facially-neutral policy that has
8 resulted in disparate impact. ICP VI, 135 S. Ct. at 2522–24. “A disparate-impact claim
9 relying on a statistical disparity must fail if the plaintiff cannot point to a defendant’s policy
10 or policies causing that disparity. A robust causality requirement is important in ensuring
11 that defendants do not resort to the use of racial quotas.” Id. at 2512. “A robust causality
12 requirement ensures that ‘[r]acial imbalance ... does not, without more, establish a prima
13 facie case of disparate impact’ and thus protects defendants from being held liable for racial
14 disparities they did not create.” Id. at 2523 (citing Wards Cove Packing Co. v. Atonio, 490
15 U.S. 642, 653, 109 S. Ct. 2115 (1989), superseded by statute on other grounds, 42 U.S.C.
16 § 2000e–2(k)).
17 Plaintiffs allege that the City has engaged in a pattern and practice of concentrating
18 extremely-low, very-low, and low-income housing in neighborhoods that are
19 predominately minorities. (Doc. No. 35 at 25.) Plaintiffs assert that Defendants in general
20 have a pattern and practice of streamlining development of low-income housing in the
21 Affected Communities. (Id. at 26.) Plaintiffs reference the City’s 2018 Annual Housing
22 Inventory Report to evidence the statistical data. (Id.) Furthermore, Plaintiffs allege that
23 the Community Plans are the policy they are challenging. However, there are no allegations
24 that show this policy caused the statistical disparity or that the City’s housing policies do
25 not otherwise have a legitimate basis. Plaintiffs also fail to allege any casual connection
26 between waiving development impact fees and the statistical data. Plaintiffs have failed to
27 establish a robust causal connection between the statistical disparity and the City’s policy.
28 Accordingly, the Court DISMISSES Plaintiffs’ FHA claims against the City.
1 vii. FEHA Administrative Remedies
2 The City alleges that Plaintiffs’ FEHA claim fails because Plaintiffs did not exhaust
3 their administrative remedies. (Doc. No. 27 at 19.) Under the FHA there is no requirement
4 to exhaust administrative remedies and an aggrieved person may file directly in federal or
5 state court. 42 U.S.C. § 3613(a)(2). The California “Legislature sought to make the FEHA
6 ‘substantially equivalen[t]’ [citation] to the federal Fair Housing Act and its amendments
7 …” Konig v. Fair Employment and Housing Comm’n, 28 Cal. 4th 743, 749 (2002). Thus,
8 there is no requirement to exhaust administrative remedies before challenging the FEHA.
9 The City relied upon several cases to establish that there is an administrative
10 requirement. See Albelleira v. District Court of Appeal, 17 Cal. 2d 280, 292 (1941); Okoli
11 v. Lockheed Tech. Operations, 36 Cal. App. 4th 1607, 1612 (1995); Romano v. Rockwell
12 Internat., Inc., 14 Cal. 4th 479, 492 (1996). However, these cases all deal with employment
13 issues rather than violations of racial segregation. Accordingly, the Court DENIES the
14 City’s motion to dismiss regarding the FEHA claim.
15 viii. Dismissal of Individual City Council and Housing Authority Officials
16 Plaintiffs have named the City as a defendant as well as the individual City Council
17 and Housing Authority members in their official capacity only. “An official-capacity suit
18 is, in all respects other than name, to be treated as a suit against the entity. It is not a suit
19 against the official personally, for the real party in interest is the entity.” Enriquez, No. CV
20 F 10-0581 AWI DLB, 2010 WL 2490969, at *5; see also Abbott, 954 F. Supp. at 204
21 (noting that “[i]f both [the official capacity officer and the local government entity] are
22 named, it is proper upon request for the Court to dismiss the official-capacity officer,
23 leaving the local government entity as the correct defendant.”). Accordingly, the Court
24 DISMISSES Plaintiffs’ complaint as to the individual City Council and Housing Authority
25 members.
26 / / /
27 / / /
28 / / /
1 C. San Diego Housing Commission and Richard C. Gentry’s Motion to Dismiss
2 The San Diego Housing Commission (“SDHC”) argues that it cannot be held liable
3 for tax credit projects, Plaintiffs fail to state a claim for violations of FHA, Section 1983,
4 and FEHA, Plaintiffs causes of action are time barred, Plaintiffs do not have standing, HUD
5 is an indispensable party, and Richard C. Gentry and each board members should be
6 dismissed.
7 i. Requests for Judicial Notice
8 The Court “may take judicial notice of ‘matters of public record’ without converting
9 a motion to dismiss into a motion for summary judgment, as long as the facts noticed are
10 not ‘subject to reasonable dispute.’” Intri-Plex Technologies, Inc., 499 F.3d at 1052
11 (quoting Lee, 250 F.3d at 689); see also Anderson, 673 F.3d at 1094 n.1 (holding that
12 legislative history is properly the subject of judicial notice).
13 SDHC requests judicial notice of the following documents: Exhibit 1: The Amended
14 and Restated Moving to Work Demonstration Agreement (“MTW Agreement”) entered
15 into on January 14, 2009 between SDHC and U.S. Department of Housing and Urban
16 Development (“HUD”); Exhibit 2: Letter from HUD to SDHC, dated April 14, 2016
17 extending the MTW Agreement under the end of SDHC’s Fiscal Year 2028; Exhibit 3:
18 Relevant portions of SDHC’s MTW Annual Plans for Fiscal Years (“FY”) 2010, 2011,
19 2012, 2013, 2014, 2015, 2016, 2017, and 2018; Exhibit 4: Relevant portions of SDHC’s
20 MTW Annual Plan for FY 2019 (July 1, 2018 – June 30, 2019); Exhibit 5: Email from
21 HUD to Suket Dayal, dated February 1, 2018; Exhibit 6: SDHC’s Choice Communities
22 Initiative under the MTW Program updated on April 23, 2019; Exhibit 7: Relevant portions
23 of SDHC’s Executive Summary, dated May 4, 2010, and Board Report, dated April 26,
24 2018 regarding SDHC’s FY 2019 Budget; Exhibit 8: Relevant portions of Executive
25 Summary, dated June 14, 2019, Board Report, dated June 6, 2019 regarding FY 2020
26 Section 8 Administrative Plan; Exhibit 9: Section 204 (Public Housing/Section 8 Moving
27 to Work Demonstration Program) of The Omnibus Consolidated Rescissions and
28 Appropriations Act of 1996 (Public Law 104-134, 110 Stat 1321) from U.S. Government
1 Publishing Office; Exhibit 10: Relevant Portions of HUD’s Small Area Fair Market Rents
2 rule from Volume 81 of the Federal Register, pages numbers 80567 & 80578 (81 FR
3 80567) from U.S. Government Publishing Office; Exhibit 11: HUD Notice PIH 2018-01
4 issued January 7, 2018, regarding “Guidance on Recent Changes in Fair Market Rent
5 (FMR), Payment Standard, and Rent Reasonableness Requirements in the Housing Choice
6 Voucher Program”; Exhibit 12: Relevant portions of the City of San Diego Housing
7 Inventory Report 2018; and Exhibit 1 to SDHC’s reply motion: A true and correct copy of
8 San Diego Municipal Code § 98.0301 et seq. (Doc. Nos. 29-2, 42-1.)
9 However, the Court does not rely on these documents in reaching its conclusion
10 below. Accordingly, the Court DENIES as moot SDHC’s requests for judicial notice.
11 ii. Tax Credit Projects
12 SDHC states that Plaintiffs incorrectly allege it has the sole discretion to approve
13 projects for tax credits. (Doc. No. 29-1 at 15.) “Internal Revenue Code Section 42 provides
14 for state administration of the Federal Low-Income Housing Tax Credit Program.
15 California Health and Safety Codes 50199.4 through 50199.22, and California Revenue
16 and Taxation Code Sections 12205, 12206, 1757.5, 17058, 23610.4 and 23610.5 establish
17 the California State Program and designate the CTCAC as the Housing Credit Agency to
18 administer both the Federal and State Housing Tax Credit programs in California.” Cal.
19 Code Regs., tit. 4, § 10300. Accordingly, the ultimate determination for the criteria for
20 review and approval of applications for tax credits is the California Tax Credit Allocation
21 Committee (“CTCAC”), not SDHC. Thus, to the extent Plaintiffs seek to hold SDHC liable
22 for the alleged disparate impact of tax credit project is DISMISSED.
23 iii. Federal Fair Housing Act
24 SDHC alleges that Plaintiffs fail to state a claim for violation of FHA. (Doc. No. 29-
25 1 at 15.) As explained above, a robust casualty is required to show a disparate impact claim.
26 See ICP VI, 135 S. Ct. at 2523. Again, Plaintiffs have failed to state a claim for violation
27 of FHA against SDHC. First, Plaintiffs allege that the combined effort of the County, City,
28 and SDHC have had a disproportionate effect on the Affected Communities by
1 concentrating minorities. However, this does not allege that SDHC’s policy was the cause
2 of racial disparities.
3 Plaintiffs argue that while CTCAC may approve tax credits, SDHC uses whether or
4 not the building is tax-exempt as one of the main requirements to receive additional funding
5 from SDHC. (Doc. No. 36 at 20.) However, Plaintiffs have failed to allege how this usage
6 caused the statistical disparity. Accordingly, the Court DISMISSES Plaintiffs’ claim for
7 violation of FHA against SDHC.
8 iv. 42 U.S.C. § 1983
9 SDHC alleges that Plaintiffs fail to state a claim for violation of Section 1983. As
10 explained above, a Section 1983 claim cannot be based on a violation of state law. See
11 Galen, 477 F.3d at 662. Second, Plaintiffs did not allege a violation of FHA as described
12 above. Thus, Plaintiffs’ Section 1983 fails since Plaintiffs failed to allege a violation of
13 FHA. Third, as explained above, “[t]o state a claim under 42 U.S.C. § 1983 for a violation
14 of the Equal Protection Clause of the Fourteenth Amendment a plaintiff must show that the
15 defendants acted with an intent or purpose to discriminate against the plaintiff based upon
16 membership in a protected class.” Lee, 250 F.3d at 686 (citation omitted). Plaintiffs have
17 failed to allege that SDHC acted with an intent or purpose to discriminate against Plaintiffs.
18 Accordingly, the Court DISMISSES Plaintiffs’ claim for violation of Section 1983 against
19 SDHC.
20 v. California’s FEHA
21 As Plaintiffs’ claim under the FHA fails, Plaintiffs claim for violation of FEHA also
22 fails. See Inestra v. Cliff Warren Invs., Inc., 886 F. Supp. 2d 1161, 1169 (C.D. Cal. 2012)
23 (citing Brown v. Smith, 55 Cal. App. 4th 767, 780 (1997)). Thus, the Court DISMISSES
24 Plaintiffs’ claim for violation of FEHA against SDHC.
25 / / /
26 / / /
27 / / /
28 / / /
1 vi. Causes of Actions Statute of Limitations
2 SDHC argues that each of Plaintiffs’ causes of action are time barred under the
3 applicable statute of limitations. (Doc. No. 29-1 at 27.) The Court has outlined the
4 applicable statute of limitations for each cause of action above. Plaintiffs’ complaint alleges
5 that SDHC’s Choice Initiative was approved by HUD and made effective on July 1, 2010.
6 Accordingly, SDHC alleges that this is outside the two year statute of limitations for FHA
7 and equal protection claims under Section 1983, and one year for FEHA. However,
8 Plaintiffs have alleged that SDHC has passed multiple decisions within the limitations
9 period that concentrates extremely-low, very-low, and low-income housing in the Affected
10 Communities. Accordingly, the Court DENIES SDHC’s motion to dismiss on the basis of
11 statute of limitations.
12 vii. Standing
13 SDHC asserts that Plaintiffs lack standing under each of the statutes because they
14 have not alleged a concrete and particularized injury to SDHC’s conduct. (Doc. No. 29-1
15 at 28.) As explained above, Plaintiffs assert that they do in fact have standing because they
16 are local residents of the communities that are being adversely affected by the SDHC’s
17 concentration of poverty. Plaintiffs do allege a causal connection. Plaintiffs allege that their
18 communities are impacted by the SDHC’s alleged violations. Furthermore, Plaintiffs have
19 also alleged that a favorable outcome of this litigation will redress the alleged injury as
20 blocking future affordable housing projects would prevent further segregation.
21 Accordingly, the Court DENIES the SDHC’s motion to dismiss on standing.
22 / / /
23 / / /
24 / / /
25 / / /
26 / / /
27 / / /
28 / / /
1 viii. HUD as an Indispensable Party
2 SDHC asserts that the complaint fails to name HUD, an indispensable party,
3 regarding allegations concerning the HCV program. (Doc. No. 29-1 at 30.) Federal Rule
4 of Civil Procedure 19 provides:
5 (a) Persons Required to Be Joined if Feasible. (1) Required Party.
A person who is subject to service of process and whose joinder
6
will not deprive the court of subject-matter jurisdiction must be
7 joined as a party if: (A) in that person’s absence, the court cannot
accord complete relief among existing parties; or (B) that person
8
claims an interest relating to the subject of the action and is so
9 situated that disposing of the action in the person’s absence may:
(i) as a practical matter impair or impede the person’s ability to
10
protect the interest; or (ii) leave an existing party subject to a
11 substantial risk of incurring double, multiple, or otherwise
inconsistent obligations because of the interest.
12
13 Fed. R. Civ. P. 19.
14 SDHC alleges that HUD must approve all activities and changes to activities under
15 the Amended and Restated Moving to Work Demonstration Agreement (“MTW
16 Agreement”). However, Plaintiffs allege that they are not attacking the plan approved by
17 HUD; rather, Plaintiffs argue SDHC overstepped the reach of the MTW Agreement and
18 subsequent Annual Plans approved by HUD. Accordingly, this case is distinguishable from
19 Boles v. Greeneville Housing Authority, where the court held that HUD would be
20 “deprive[d] [] of the right to defend the integrity of its administrative decisions.” 468 F.2d
21 476, 479 (6th Cir. 1972). Accordingly, to continue without HUD does not impede on
22 HUD’s interest in the MTW Agreement with SDHC. Thus, the Court does not find that
23 HUD is an indispensable party to this action.
24 ix. Dismissal of Gentry and Each Board Member
25 Plaintiffs have named the SDHC as a defendant as well as Gentry and SDHC’s seven
26 board members in their official capacity only. “An official-capacity suit is, in all respects
27 other than name, to be treated as a suit against the entity. It is not a suit against the official
28 personally, for the real party in interest is the entity.” Enriquez, No. CV F 10-0581 AWI
1 || DLB, 2010 WL 2490969, at *5; see also Abbott, 954 F. Supp. at 204 (noting that “[i]f both
2 official capacity officer and the local government entity] are named, it is proper upon
3 ||request for the Court to dismiss the official-capacity officer, leaving the local government
4 |lentity as the correct defendant.”). Accordingly, the Court DISMISSES Plaintiffs’
5 complaint as to the individual Gentry and SDHC’s seven board members.
6 CONCLUSION
7 Based on the foregoing reasons, the Court GRANTS the County’s motion to
8 ||dismiss, GRANTS in part and DENIES in part the City’s motion to dismiss, and
9 || GRANTS in part and DENIES in part SDHC’s motion to dismiss. The Court finds that
10 || leave to amend would not be futile, and thus GRANTS leave to amend. Bowles v. Reade,
11 || 198 F.3d 752, 758 (9th Cir. 1999). Plaintiffs must file an amended complaint within forty-
12 || five (45) days of the date of this Order.
13
14 || IT IS SO ORDERED.
13 Dated: June 1, 2020 | | □□ rz Le
16 Hon. Anthony J.@Battaglia
17 United States District Judge
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