Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_07-cv-03255/USCOURTS-cand-4_07-cv-03255-3/pdf.json

Nature of Suit Code: 443
Nature of Suit: Civil Rights Accommodations
Cause of Action: 42:12101 Americans w/ Disabilities Act (ADA)

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

NATIONAL FAIR HOUSING

ALLIANCE, et al.

Plaintiffs,

vs.

A.G. SPANOS CONSTRUCTION,

INC., et al.,

Defendants. ________________________________

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07-3255 SBA

ORDER

[Docket Nos. 48, 49, 50, 52, 57 and

60]

Currently before the Court are:

1. Defendant A.G. Spanos Construction Inc.’s Motion to Dismiss Plaintiffs' First Amended

Complaint [Docket No. 48];

2. Defendant A.G. Spanos Construction Inc.’s Motion to Dismiss Plaintiffs' First Amended

Complaint for Failure to Join Necessary and Indispensable Parties [Docket No. 49];

3. Defendant A.G. Spanos Construction Inc.’s Motion for More Definite Statement [Docket

No. 50];

4. Defendant A.G. Spanos Construction Inc.’s Motion to Strike Various Claims for Relief

Sought in Plaintiffs' First Amended Complaint [Docket No. 52];

5. Defendant Knickerbocker Properties, Inc. XXXVII’s Motion to Dismiss [Docket No.

57]; and

6. Defendant Highpointe Village, L.P.’s Motion to Dismiss [Docket No. 60].

Having read and considered the arguments presented by the parties in the papers submitted to the Court,

the Court finds this matter appropriate for resolution without a hearing. For the reasons articulated

below, the Court hereby DENIES the motions.

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BACKGROUND

A. The Parties

1. The Plaintiffs

The Plaintiffs are five fair housing organizations: (1) the National Fair Housing Alliance, “a

national non-profit entity” with its principle place of business in Washington, D.C.; (2) Fair Housing

of Marin, “a private non-profit community organization” located in San Rafael, California; (3) Fair

Housing Napa Valley, “a non-profit community organization” located in Napa, California; (4) Metro

Fair Housing Services, “a nonprofit community organization” located in Atlanta, Georgia; and (5) The

Fair Housing Continuum, Inc., “a private, non-profit organization committed to equal housing

opportunity and the elimination of discrimination in Florida.” See First Amended Complaint (“FAC”)

at ¶¶ 15-19. Plaintiffs’ alleged missions include advocating for the rights of people with disabilities to

accessible housing, promoting equal housing opportunities, and eliminating housing and lending

inequities. Id. at ¶¶ 15-19.

2. The A.G. Spanos Defendants

Defendants A. G. Spanos Construction, Inc., A. G. Spanos Development, Inc., A. G. Spanos

Land Company, Inc., A.G. Spanos Management, Inc., and The Spanos Corporation (the “Spanos

Defendants”) are California corporations with principal offices in Stockton. Id. at ¶¶ 20-25. The Spanos

Defendants allegedly “engaged in one or more activities related to land acquisition, development,

construction, and management of multifamily apartment complexes throughout the United States.” Id.

at ¶ 20.

3. Defendant Highpointe Village, L.P.

Defendant Highpointe Village, L.P. (“Highpointe”) is alleged to be the owner of a single

apartment complex consisting of approximately 300 units, known as Highpointe Village, in Overland

Park, Kansas. See id. at ¶¶ 34, 62. This apartment complex was allegedly “designed and/or built” by the

Spanos Defendants.” Id. at ¶ 34. Construction of Highpointe Village is alleged to have been “completed

in 2003.” Id. at ¶ 62 (p. 27:2). Overland Park issued the last certificate of occupancy for Highpointe

Village on December 8, 2003, more than three years before Plaintiffs filed this complaint. See

Certificate of Occupancy (RJN, Exh. B). Highpointe is named both individually and as one of two

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representatives of a defendant class comprised of both known and unknown “current owners of noncompliant units” (the “Owner Class Defendants”). See, e.g., FAC at ¶¶ 1, 30.

4. Defendant Knickerbocker Properties, Inc. XXXVIII

The second named representative of the Owner Class Defendants is Knickerbocker Properties,

Inc. XXXVIII (“Knickerbocker”), which is alleged to own two apartment complexes also alleged to

have been “designed and/or constructed by the A.G. Spanos Defendants”: (1) “Mountain Shadows” in

Rohnert Park, California; and (2) “The Commons” in Vacaville, California. Id. at ¶¶ 32-33. Like

Highpointe, Knickerbocker is also sued individually. Id. at ¶ 32.

5. The Owner Class Defendants

Plaintiffs intend to seek certification of a defendant class consisting of “the current owners of

covered apartment complexes that were designed and/or built by the A.G. Spanos Defendants since the

effective date of the FHA, but are no longer owned by the A.G. Spanos Defendants” (the “Owner Class

Defendants”). Id. at ¶ 32. Such apartment complexes allegedly do “not fully comply with the

accessibility and adaptability requirements of the FHA.” Id. at ¶ 35. The properties are owned by the

Owner Class Defendants and located in at least 9 different states.

B. Allegations Of Non-Compliance With The FHA

1. Alleged violations of the FHA by the Spanos Defendants

Plaintiffs allege that 82 apartment complexes located in 10 states, allegedly designed and

constructed by the Spanos Defendants between 1991 and 2007, do not comply with requirements of the

Fair Housing Amendments Act (“FHA”), 42 U.S.C. §§ 3601, et. seq. They make the same claim with

respect to an unknown number of unidentified properties located, presumably, throughout the United

States in unspecified locations. The subject properties allegedly contain over 22,000 apartment units.

Plaintiffs seek an injunction ordering defendants to retrofit the properties to conform to the FHA.

More specifically, Plaintiffs allege that the Spanos Defendants “have been involved in the design

and construction of approximately [82] multifamily complexes in California, Nevada, Arizona,

Colorado, New Mexico, Texas, Kansas, North Carolina, Georgia and Florida.” FAC, ¶ 27. Plaintiffs

claim to have identified 34 apartment complexes in California, Arizona, Nevada, Texas, Kansas,

Georgia, and Florida (the “Tested Properties”), totaling more than 10,000 individual apartment dwelling

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units, that do not meet the accessibility requirements of the FHA. FAC, ¶¶ 3, 30. With respect to the

Tested Properties, Plaintiffs allege that since 1991 the Spanos Defendants have “engaged in a

continuous pattern and practice of discrimination against people with disabilities” by “designing and/or

constructing” apartment complexes that deny full access to and use of the facilities as required under

the FHA. FAC, ¶ 4.

Plaintiffs also allege that 49 additional apartment complexes in 10 states which the Spanos

Defendants designed or constructed (the “Untested Properties”) also violate FHA accessibility

requirements. FAC, ¶ 6 and Appendix A to Complaint. The Spanos Defendants are also alleged to have

designed or constructed an unspecified number of additional unidentified apartment complexes located

in states not yet known to Plaintiffs. FAC, ¶ 28.

Plaintiffs claim to have “identified at least one FHA violation and, in most cases, multiple

violations, at each of the Tested Properties.” Based on the alleged frequency and similarity of these

violations, Plaintiffs allege “a pervasive pattern and practice of designing and constructing apartment

communities in violation of the FHA accessibility design requirements.” FAC, ¶ 45. Alleged FHA

violations at the Tested Properties also include failure to design and construct the public and common

areas so that they are readily accessible to and usable by people with disabilities. FAC, ¶¶ 45-47. As for

the Untested Properties, Plaintiffs allege only that they were designed and/or constructed after March,

1991. FAC, ¶ 6.

2. Allegations Related to the Owner Class Defendants

Plaintiffs do not allege that Highpointe, Knickerbocker or any other Owner Class Defendant has

violated the FHA or any other law. However, Plaintiffs seek a court order against the Owner Class

Defendants:

Enjoining the Owner [Class] Defendants from failing or refusing to permit the retrofits

ordered by the Court to be made in their respective properties, to comply with such

procedures for inspection and certification of the retrofits performed as may be ordered

by this Court, and to perform or allow such other acts as may be necessary to effectuate

any judgment against A.G. Spanos Defendants.

Id. at p. 40:16-21.

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B. Alleged Injuries to Plaintiffs and Relief Sought

Plaintiffs allege injury as follows:

72. As a result of the A.G. Spanos Defendants’ actions described

above, Plaintiffs have been directly and substantially injured in that they

have been frustrated in their missions to eradicate discrimination in

housing, and in carrying out the programs and services they provide,

including encouraging integrated living patterns, educating the public

about fair housing rights and requirements, educating and working with

industry groups on fair housing compliance, providing counseling

services to individuals and families looking for housing or affected by

discriminatory housing practices and eliminating discriminatory housing

practices.

73. As outlined above, each Plaintiff has invested considerable time

and effort in educating its respective communities about the importance

of accessible housing for people with disabilities, in an attempt to secure

compliance by entities involved in the design and construction of covered

multifamily dwellings. Each time the A.G. Spanos Defendants designed

and constructed covered dwellings that did not comply with the FHA in

one of Plaintiffs’ service areas, the A.G. Spanos Defendants

frustrated the mission of that Plaintiff, inasmuch as it served to

discourage people with disabilities from living at that dwelling, and

encouraged other entities involved in the design and construction of

covered units to disregard their own responsibilities under the FHA.

74. The A.G. Spanos Defendants’ continuing discriminatory practices

have forced Plaintiffs to divert significant and scarce resources to

identify, investigate, and counteract the A.G. Spanos Defendants’

discriminatory practices, and such practices have frustrated Plaintiffs’

other efforts against discrimination, causing each to suffer concrete and

demonstrable injuries.

75. Each Plaintiff conducted site visits, investigations, surveys

and/or tests at the Tested Properties, resulting in the diversion of its

resources in terms of staff time and salaries and travel and incidental

expenses that it would not have had to expend were it not for the

A.G. Spanos Defendants’ violations. FHOM, FHNV, MFHS and FHC

each diverted staff time and resources to meet with NFHA staff, receive

detailed training concerning the accessibility requirements of the FHA

and provide logistical support for NFHA staff. In addition to such

support:

a. Plaintiff FHOM conducted site visits and investigations at

Mountain Shadows and Windsor at Redwood Creek, two properties

within its service area.

b. Plaintiff FHNV conducted a site visit and investigation at

Hawthorn Village, a property within its service area. c. Plaintiff MFHS conducted a site visit and investigation at

Battery at Chamblee, a property within its service area.

d. Plaintiff FHC conducted tests at Delano and Arlington at

Northwood, two properties within its service area.

FAC, ¶¶ 72-75.

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Plaintiffs request declaratory and injunctive relief. Among other things, the requested injunctive

relief would require the Spanos Defendants to survey all the apartment complexes they constructed

throughout the United States since March 13, 1991 and to bring each allegedly non-FHA compliant

complex into compliance. FAC, ¶¶ 39-40. Plaintiffs request attorneys’ fees and costs, compensatory

damages, and punitive damages. FAC, ¶¶ 40-41.

As noted above, Plaintiffs also seek an order “[e]njoining the Owner Defendants from failing

or refusing to permit the retrofits ordered by the Court to be made in their respective properties, to

comply with such procedures for inspection and certification of the retrofits performed as may be

ordered by this Court, and to perform or allow such other acts as may be necessary to effectuate any

judgment against the A.G. Spanos Defendants.” FAC, ¶. 40.

LEGAL STANDARDS

Under Federal Rule of Civil Procedure 12(b)(6), a motion to dismiss should be granted if the

plaintiff is unable to articulate “enough facts to state a claim to relief that is plausible on its face.” Bell

Atlantic Corp. v. Twombly, 127 S.Ct. 1955,1960 (2007). For purposes of such a motion, the complaint

is construed in a light most favorable to the plaintiff and all properly pleaded factual allegations are

taken as true. Jenkins v. McKeithen, 395 U.S. 411, 421 (1969); Everest & Jennings, Inc. v. American

Motorists Ins. Co., 23 F.3d 226, 228 (9th Cir. 1994). All reasonable inferences are to be drawn in favor

of the plaintiff. Jacobson v. Hughes Aircraft, 105 F.3d 1288, 1296 (9th Cir. 1997). 

The court does not accept as true unreasonable inferences or conclusory legal allegations cast

in the form of factual allegations. Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981);

see 

also Vasquez v. Los Angeles County, 487 F.3d 1246, 1249 (9th Cir. 2007) (“conclusory allegations of

law and unwarranted inferences” will not defeat an otherwise proper motion to dismiss); Sprewell v.

Golden State Warriors, 266 F.3d 979, 987, as amended by 275 F.3d 1187 (9th Cir. 2001)(“Nor is the

court required to accept as true allegations that are merely conclusory, unwarranted deductions of fact,

or unreasonable inferences.”). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does

not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds’ of his ‘entitle

[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements

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The four motions brought by the Spanos Defendants actually all argue the same points and seek

the same relief, and thus are pointlessly repetitive and ultimately duplicative; indeed, the motions

actually all incorporate pages-long swaths of argument from each other verbatim. The duplicative nature

of these motions is most clearly demonstrated by the motion to strike, which argues that the sole grounds

for "striking" the plaintiffs' claims is that they fail to state a claim – which is, of course, the same

argument made in the Spanos Defendants’ two other (and also similarly duplicative) motions to dismiss.

Knickerbocker and Highpointe's motions largely parrot the repetitive arguments in the Spanos

Defendants' motions, with the exception of arguments related to injunctive relief, which are discussed

below.

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The Ninth Circuit recently addressed the question of when the FHA’s two-year statute of

limitations begins to run in Garcia v. Brockway, 503 F.3d 1092, 1101 (9th Cir. 2007). However, the

Ninth Circuit has agreed to rehear the case en banc, and therefore Garcia cannot provide any guidance

to this Court. See 512 F.3d 1089 (“The three-judge panel opinion shall not be cited as precedent by or

to any court of the Ninth Circuit ”)

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of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the

speculative level.” Twombly, 127 S.Ct. at 1264-65.

ANALYSIS

While there are six motions brought by three groups of defendants in this case, all of them1

revolve around the same three dispositive issues: 1) whether the FHA’s two year statute of limitations

bar some or all of plaintiff’s claims; 2) whether plaintiffs, as fair housing organizations that are not

themselves disabled and have not themselves been denied access to any facility as a result of the

defendants’ alleged actions have standing to sue for violations of the FHA; and 3) whether and to what

extent Defendants must join all current owners of the properties in order to effectuate the relief

requested.

I. Statute of Limitations2

A. Spanos Defendants

The Spanos Defendants argue that only those apartment complexes for which a certificate of

completion has been issued within the last two years survive the FHA’s two year statute of limitations.

The FHA provides that a plaintiff must file suit within two years after “the occurrence or the termination

of an alleged discriminatory housing practice.” 42 U.S.C. § 3613(a)(1)(A). Statutes of limitation “are

intended to keep stale claims out of the courts.” Havens Realty Corp. v. Coleman, 455 U.S. 363, 380

(1982). However, in Havens, the Supreme Court found that an alleged “continuing violation” of the Fair

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Housing Act should be treated differently from one discrete act of discrimination: “[w]here the

challenged violation is a continuing one, the staleness concern disappears.” Id. The Supreme Court

found that Congress had “broad remedial intent” when it crafted the FHA and that where a plaintiff

“challenges not just one incident of conduct violative of the Act, but an unlawful practice that continues

into the limitation period, the complaint is timely when it is filed within [two years] of the last asserted

occurrence of that practice.” See Silver State Fair Housing Council, Inc. v. ERGS, Inc., 362 F.Supp.2d

1218, 1221 (D. Nev. 2005) (citing Havens, 455 U.S. at 380-381). “Under the continuing violation

doctrine, a plaintiff's complaint will not be time-barred if the defendant's related wrongful acts continue

into the statute of limitations time frame. As a consequence, the statute of limitations only begins to run

... upon the last act in a series of related wrongful acts.” Moseke v. Miller and Smith, Inc., 202 F.Supp.2d

492, 500 n. 10 (E.D. Va. 2002). 

Plaintiffs plead that the Spanos Defendants have engaged in a “continuing violation” of the FHA

by designing and building FHA-noncompliant apartment complexes over a period of many years. 

Plaintiffs argue that under Havens, because the construction of the 82 complexes has been continuous

in time since 1991, and since some of the allegedly noncompliant complexes are still being built, the

statue of limitations has not begun to run on plaintiffs’ claims. Defendants respond that Havens is

inapplicable here. See Consolidated Opp’n at 11-15. In Havens, the Supreme Court was concerned with

allegations of racial steering at an apartment complex: minorities were given false information about

one apartment complexes in order to “steer” them away from renting apartments there. Havens, 455 U.S.

at 380. However, four of the five alleged incidents had taken place outside of the limitations period, and

therefore, the defendants argued, the plaintiffs could not prove a “pattern or practice” of racial steering

that had occurred within the limitations period. Id. The Court was unpersuaded; it held that a continuing

violation of the Fair Housing Act “should be treated differently from one discrete act of discrimination

. . .Where the challenged violation is a continuing one, the staleness concern disappears” Id. The Court

held that the defendants’ “wooden” application of the statute of limitations, “which ignores the

continuing nature of the alleged violation, only undermines the broad remedial intent of Congress

embodied in the Act.” Id.

Defendants argue that Havens can be distinguished because the “practice” of racial steering “by

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definition continues over time,” whereas the alleged “practice” here -- the construction of each of the

allegedly noncompliant 82 complexes -- is really just a series of discrete, individual FHA violations, and

therefore the statute of limitations begins to run at the completion of the construction of each complex.

See Consolidated Reply at 19-22. This argument is unpersuasive: a single incident of “steering”

constitutes an actionable violation of the FHA, just as the construction of each complex constitutes an

actionable violation of the FHA. That more than one incident of steering occurred only demonstrates

a pattern of such violations, not that each incident, standing on its own, is not a violation of the FHA.

Defendants have offered no intelligible argument as to why the reasoning of Havens is not applicable

to an alleged pattern or practice of construction-based violations of the FHA.

Indeed, the word “termination” in section 3613(a)(1)(A) was intended by Congress to “reaffirm

the concept of continuing violations, under which the statute of limitations is measured from the last

occurrence of the unlawful practice.” H.R.Rep. No. 711, 100th Cong., 2d Sess. 22 (1988), reprinted in

1988 U.S.C.C.A.N. 2173, 2194. As in Havens, the defendants advocate a “wooden”application of the

statute of limitations, intended to “undermin[e] the broad remedial intent of Congress embodied in the

Act,” and this argument is similarly unpersuasive here. Havens, 455 U.S. at 380. Plaintiffs have clearly

alleged a “continuing violation” of the FHA by the Spanos Defendants, alleging that they “engaged in

a continuous pattern and practice of discrimination against people with disabilities” since 1991 by

“designing and/or constructing” apartment complexes that deny full access to and use of the facilities

as required under the FHA, FAC, ¶ 4, and therefore none of the claims of the FAC against the Spanos

Defendants are barred by the statute of limitations.

B. Class Defendants

The converse of the continuing violation doctrine, of course, is that a defendant that is not

engaged in a continuing violation cannot be held liable for discriminatory acts outside of the limitations

period. The apartment complexes owned by alleged defendant class representatives Knickerbocker and

Highpointe were built outside of the limitations period. The First Amended Complaint alleges that

construction of Knickerbocker and Highpointe’s apartment complexes were completed in 2003, more

than two years before this action was filed. FAC ¶¶ 55, 62.

In very similar factual circumstances, the district court in Silver State Fair Housing Council, Inc.

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v. ERGS, Inc., 362 F. Supp. 2d 1218 (Dist. Nev. 2005), held that, while the builder of two allegedly

noncompliant apartment complexes could be held liable under a “continuing violation” theory for both

complexes since one of them was built within the limitations period, the owner of the complex built

outside of the limitations could not similarly be held liable. As the Silver State court stated: 

Because Sierra Sage Apartments L.L.C. [the owner of the offending apartments built

outside the limitations period] was an independent entity which took no part in the Silver

Lake development [built within the limitations period], the alleged discriminatory acts

at the Silver Lake development could not be linked to those at the Sierra Sage apartments

to demonstrate a ‘practice’ that could bootstrap Sierra Sage Apartments L.L.C. past the

two-year statute of limitations and into the present litigation.

Id at 1220. This Court agrees with the Silver State Court’s reasoning: just as the Spanos Defendants

cannot avoid liability for complexes built more than two years ago as they have allegedly engaged in

a continuing violation of the FHA, Knickerbocker and Highpointe cannot be held liable for ownership

of complexes built outside the limitations period where there is no allegation that have engaged in any

violation within the limitations period.

Plaintiffs offer no intelligible principle by which this Court can impute the liability associated

with the Spanos Defendants’ continuing violations to Knickerbocker and Highpointe, and instead simply

rest their laurels on the argument that the Spanos Defendants’ conduct is not outside the limitations

period. See, e.g, Highpointe Opp’n at 7-10. Therefore, the Court holds that the statute of limitations

bars any liability as to Knickerbocker and Highpointe to the extent they are being sued for violations

of the FHA. 

Nevertheless, in response to their respective motions to dismiss, plaintiffs primarily argue that,

even if they are not technically liable under the FHA, Knickerbocker and Highpointe should be included

in this action because they are necessary parties for this Court to effectuate the injunctive relief sought.

This argument is analyzed in section III below.

II. Standing 

Defendants argue that plaintiffs do not have standing to bring the instant claims because, to the

extent they have suffered any injury, the injury was not independently caused by the defendants’ act,

but was instead the result of plaintiffs proactively seeking out violations of the FHA and attempting to

remedy them through the instant litigation. Therefore, defendants argue, plaintiffs’ “self-inflicted”

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Plaintiffs’ alleged missions include advocating for the rights of people with disabilities to

accessible housing, promoting equal housing opportunities, and eliminating housing and lending

inequities. See FAC at ¶¶ 15-19.

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injuries do not bear a sufficient causal nexus with defendants’ alleged actions to confer Article III

standing.

Organizational standing is separate from the standing of the organization’s members, turning

instead on “whether the organization itself has suffered an injury in fact.” Smith v. Pacific Properties

and Development Corp., 358 F.3d 1097, 1101 (9th Cir. 2004) (citing Havens Realty Corp. v. Coleman,

455 U.S. 363, 378-79 (1982)). Section 3602(d) of the FHA defines a “person” who may sue under the

Act to include “corporations” and “associations.” 42 U.S.C. § 3602(d) (1988). As non-profit

corporations, plaintiffs are “persons” protected by the statute. See Havens, 455 U.S. at 378-79 & n. 19;

Walker v. City of Lakewood, 272 F.3d 1114, 1123, n. 1 (9th Cir.2001). Plaintiffs must therefore satisfy

the requirement for individual standing: “a demonstration of concrete and particularized injury giving.”

Baker v. Carr, 369 U.S. 186, 204 (1962); see also Havens, 455 U.S. at 378-79.

In Pacific Properties, the Ninth Circuit reaffirmed its holding in Fair Housing of Marin v.

Combs, 285 F.3d 899, 905 (9th Cir. 2002) that an organization may satisfy the Article III requirement

of injury in fact if it can demonstrate: (1) frustration of its organizational mission; and (2) diversion of

its resources to combat the particular housing discrimination in question. Pacific Properties, 358 F.3d

at 1101 (citing Fair Housing, 285 F.3d at 905).

Plaintiffs’ allegations in the FAC closely track the requirements articulated in Pacific Properties.

As to the frustration of mission element, plaintiffs allege:

[T]he A.G. Spanos Defendants frustrated the mission3

 of [each] Plaintiff, inasmuch

as it served to discourage people with disabilities from living at that dwelling, and

encouraged other entities involved in the design and construction of covered units to

disregard their own responsibilities under the FHA.

FAC, ¶ 73 (emphasis added). The Ninth Circuit held an even less specific statement of frustration of

mission to be sufficient to satisfy this element in Pacific Properties. Pacific Properties, 358 F.3d at

1101 (finding allegation that plaintiff was “organized with the principal purpose of helping to eliminate

discrimination against individuals with disabilities by ensuring compliance with laws intended to

provide access to housing, public buildings, transportation, goods and services” was sufficient to satisfy

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this element because “[a]ny violation of the FHA would therefore constitute a ‘frustration of [the

plaintiff’s] mission.’”). As to the diversion of resources, plaintiffs allege:

The A.G. Spanos Defendants’ continuing discriminatory practices have forced

Plaintiffs to divert significant and scarce resources to identify, investigate, and

counteract the A.G. Spanos Defendants’ discriminatory practices, and such practices

have frustrated Plaintiffs’ other efforts against discrimination, causing each to suffer

concrete and demonstrable injuries

FAC, ¶ 74 (emphasis added).

Defendants contend that plaintiffs’ allegation that they have had to “divert significant and scarce

resources to identify, investigate, and counteract the A.G. Spanos Defendants' discriminatory practices”

is insufficient to confer standing because they do not allege any diversion of resources other than that

associated with actively seeking out and attempting to remedy the harms at issue in this case. Plaintiffs

do not allege that they have had to divert resources because a disabled individual complained to them

about the Spanos Defendants' discriminatory practices; indeed they do not allege that any disabled

individual has actually suffered any injury because of the allegedly discriminatory acts. They instead

allege only that they “became aware” of the alleged practices, and that they have had to divert resources

to “identify, investigate, and counteract” such practices. Therefore, defendants argue, plaintiffs’ alleged

injuries are “self-inflicted” “expenses of litigation,” which the Ninth Circuit suggested in Pacific

Properties are, standing alone, insufficient to constitute a “diversion of resources”under this test. Pacific

Properties, 358 F.3d at 1101 (“Fair Housing avoided the question whether the expense of litigation

alone is enough to constitute a ‘diversion of resources’ under this test, but the court had previously

indicated that such an allegation is generally insufficient.”(citing Lakewood, 272 F.3d at 1124, n. 3)

(internal citations omitted)) . 

However, the court in Pacific Properties held nearly identical allegations of diversion of

resources to be sufficient to withstand a 12(b)(6) motion. The plaintiff in Pacific Properties alleged in

its complaint that:

[I]n order to monitor the violations and educate the public regarding the

discrimination at issue, [the plaintiff] has had (and, until the

discrimination is corrected, will continue) to divert its scarce resources

from other efforts to promote awareness of-and compliance with-federal

and state accessibility laws and to benefit the disabled community in

other ways (for example, [the plaintiff’s] efforts to free disabled persons

from nursing homes.)[.] 

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Id. at 1105. The Court held that this was sufficient to confer standing: “we believe these allegations are

enough to constitute a showing of a ‘diversion of resources’ and to survive a 12(b)(6) motion.” Id. These

allegations are nearly identical to the plaintiffs’ allegations in the FAC; even parsing the Pacific

Properties plaintiff’s allegations along the lines suggested by defendants, it is clear that in that case the

alleged diversion of resources was a result of the plaintiff’s choice “to monitor the violations and

educate the public regarding the discrimination at issue,” and was therefore “self-inflicted” within the

meaning suggested by defendants. Moreover, in that case, as in this case, the plaintiffs became aware

of the alleged violations through a proactive testing program, and not in response to any complaints by

members of the disabled community. Id. at 1097.

Despite the fact that Pacific Properties appears to be on point and dispositive, defendants

attempt to distance the holding of Pacific Properties from this case by arguing that the Ninth Circuit

only determined that the plaintiffs’ allegations were sufficient to defeat a dismissal with prejudice, as

the lower court had dismissed the claims in that case without leave to amend. Id. at 1106. However, an

even cursory reading of the decision demonstrates that this is just not true: the Ninth Circuit held de

novo that the allegations “are enough to constitute a showing of a ‘diversion of resources’ and to survive

a 12(b)(6) motion.” Id. (emphasis added). In addition to so holding, the court also chastised the lower

court for dismissing the case with prejudice. Id. at 1106 (“[W]e accordingly reverse with regard to this

finding on a de novo review of this court's own law. We also believe that the district court abused its

discretion in denying [the plaintiff] leave to amend its complaint with regard to organizational standing

prior to dismissal.” (emphasis added)).

Accordingly, given that the Ninth Circuit’s guidance in Pacific Properties is on point, and given

that the language in FAC so closely tracks the language at issue there, this Court holds that plaintiffs

have properly alleged organizational standing. 

III. Joinder of Indispensable Parties

A. The Spanos Defendants' Motion

The Spanos Defendants argue that plaintiffs’ claims must be dismissed because of complications

presented by the potential joinder of the Owner Class Defendants. Plaintiffs seek to eventually certify

an "owner class" of defendants, consisting of "the current owners of covered apartment complexes that

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were designed and/or built by the A.G. Spanos Defendants since the effective date of the FHA, but are

no longer owned by the A.G. Spanos Defendants." FAC, ¶ 32. With respect to these defendants,

plaintiffs seek an order:

[e]njoining the Owner Defendants from failing or refusing to permit the retrofits ordered

by the Court to be made in their respective properties, to comply with such procedures

for inspection and certification of the retrofits performed as may be ordered by this

Court, and to perform or allow such other acts as may be necessary to effectuate any

judgment against the A.G. Spanos Defendants.FAC, ¶. 40.

The Spanos Defendants argue that plaintiffs must join the current owners of all 82 properties that

are the subject of this litigation, as well as all current tenants and the secured lenders of the properties,

and that the failure to do so constitutes grounds for dismissal pursuant to Rule 12(b)(7) for failure to join

indispensable parties. However, Defendants argue, this argument places plaintiffs in a catch-22, because

this Court likely lacks personal jurisdiction over most, if not all of the defendant class members. See

Spanos Mot. to Dismiss at 1-2.

Plaintiffs argue that the mechanism of certification of a class of defendant owners overcomes

this problem. See Consolidated Opp'n at 31-34. The Spanos Defendants respond that even if a defendant

class is certified, the Court must have personal jurisdiction over all of the defendant class members in

order to satisfy due process concerns, and therefore there is simply no way for these concededly

indispensable parties to be brought into this action. See Spanos Mot. to Dismiss at 1-2.

However, it is well settled that jurisdiction is not needed over absent members of a defendant

class. See 2 Newberg on Class Actions § 4:34 (4th ed.). Personal jurisdiction need not be proper as to

the unnamed members of a defendant class, so long as it is proper as to all named defendant members.

See Abrams Shell v. Shell Oil Co., 165 F.Supp.2d 1096, 1107 (C.D.Cal. 2001) (citing In re Gap Stores

Securities Litigation, 79 F.R.D. 283, 292 n .6 (N.D.Cal.1978)). The Spanos Defendants are simply

wrong to suggest that, were this court to certify a defendant class it would still need personal jurisdiction

over all the defendant members. See Abrams, 165 F.Supp.2d 1096 

Thus, while the Court makes no determination at this stage as to the propriety of the certification

of a defendant class, the Spanos Defendants’ arguments that class certification cannot be used to join

absent defendants in order to effectuate injunctive relief fails.

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B. Knickerbocker's Motion

 Proposed defendant class representative Knickerbocker argues that plaintiffs have not alleged

a proper basis for injunctive relief against the Owner Class Defendants because plaintiffs have failed

to allege the requirements of "irreparable injury" and "inadequacy of legal remedies." See City of Los

Angeles v, Lyons, 461 U.S. 95, 111 (1983) (plaintiff must demonstrate irreparable injury in order to

obtain injunctive relief); Morales v. Trans World Airlines, 504 U.S. 374, 381 (1992) (court will

ordinarily grant injunctive relief only where legal remedy is inadequate). Specifically, Knickerbocker

argues that damages against the Spanos Defendants should be sufficient to redress any harm allegedly

suffered by plaintiffs, and therefore an injunction (and consequently the Owner Class Defendants’

presence in this action) is not necessary, and in any case would be so intrusive as to constitute a

violation of the class defendants’ due process rights. See Knickerbocker Mot. at 9.

 However, other courts considering injunctions in civil rights cases involving the FHA have

determined that an injunction of the sort requested here is necessary to afford full relief, and that the

propriety of granting such an injunction is to be guided by general principles of equity and a balancing

of interests. See Baltimore Neighborhoods, Inc. v. Rommell Builders, Inc., 40 F. Supp. 2d 700, 711-12

(D.Md.1999); Baltimore Neighborhoods, Inc. v. LOB, Inc., 92 F.Supp.2d. 456 (D. Md. 2000). In

Rommel, the plaintiffs alleged, as do the plaintiffs here, that "the violations [of the FHA would] continue

to exist in perpetuity unless the Court exercises its equitable remedies to fashion a reasonable remedy."

Rommell, 40 F. Supp. 2d at 712. The court found this sufficient to plead grounds for injunctive relief,

stating: "[t]he Court is persuaded that [the defendants'] presence as a party in the suit appears imperative

in order to afford full relief, if necessary . . ." Id.

This Court is similarly persuaded that the Owner Class Defendants' presence in this case is

necessary to effectuate the remedial relief plaintiffs seek, viz., the retrofitting of the noncompliant

properties. See FAC ¶ 40 (seeking an order "[e]njoining the Owner Defendants from failing or refusing

to permit the retrofits ordered by the Court to be made in their respective properties."). As in Rommell,

the alleged violations of the FHA will “continue to exist in perpetuity,” and therefore full relief will not

be afforded, if an injunction cannot be issued. Under Rule 19(a)(1), a party is deemed “necessary” if

complete relief cannot be granted in its absence. Disabled Rights Action Committee v. Las Vegas Events,

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For example, in Peabody the EEOC sued Peabody Western Coal Co. for employment

discrimination in violation of Title VII, claiming Peabody maintained a hiring preference favoring

Navajo Tribe members. Peabody Western Coal Co., 400 F3d at 781. Peabody claimed this preference

was required under the terms of its mining lease with the Tribe, and moved to dismiss because the Tribe

had not been joined. Id. The court held that, though the Tribe was exempt under Title VII and therefore

a direct cause of action could not be stated against it, its joinder was “necessary to effect complete relief

among the parties.”Id.

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Inc., 375 F.3d 861, 879 (9th Cir. 2004). “This factor is concerned with consummate rather than partial

or hollow relief as to those already parties, and with precluding multiple lawsuits on the same cause of

action.” Northrop Corp. v. McDonnell Douglas Corp., 705 F.2d 1030, 1043 (9th Cir.1983). In

conducting a Rule 19(a)(1) analysis, courts ask whether the absence of the party would preclude the

district court from fashioning meaningful relief as between the parties. See id. Here, unless the owner

defendants are included in this action, the FHA violations at existing facilities will continue to frustrate

plaintiffs’ missions and necessitate the diversion of plaintiffs’ resources. While damages and a

prospective injunction against the Spanos Defendants may be partial relief for plaintiffs, a injunction

may be necessary to fashion truly “meaningful relief.” See id.

Defendants do not dispute that if their presence is necessary to afford full relief they may brought

into this action as defendants, notwithstanding their lack of liability under FHA. See Spanos Mot. to

Dismiss (conceding that owner defendants are a necessary to effectuate relief sought by plaintiffs); see

also Adv. Comm. Notes to 1966 Amendment to FRCP 19 (a)(plaintiff is required to join “all persons

who are materially interested in the subject matter of the case and who are needed for just

adjudication.”). Moreover, the fact that plaintiffs do not allege that the owner class defendants have

themselves violated the FHA has no bearing on the propriety of the owners being joined under Rule 19.

Under Rule 19, no direct claim is required against a party sought to be joined. E.E.O.C. v. Peabody

Western Coal Co., 400 F.3d 774, 781 (9th Cir. 2005) (“[A] plaintiff's inability to state a direct cause of

action against an absentee party does not prevent the absentee's joinder under Rule 19.”). Indeed, by

definition, the parties to be joined under Rule 19 are those against whom no relief has formally been

sought but who are “so situated as a practical matter as to impair the effectiveness of relief” that may

be granted to the parties who are present.4 Id. (internal quotes omitted); Sierra Club v. Hodel, 848 F.2d

1068, 1077 (10th Cir. 1988), overruled on other grounds by Village of Los Ranchos De Albuquerque

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v. Marsh, 956 F.2d 970, 973 (10th Cir.1992) (joinder of county proper in action against federal agency

even though plaintiff could not sue county directly).

However, defendants argue that the injunctive relief requested by the plaintiffs, namely, the

retrofitting of all noncompliant features is intrusive and unduly burdensome. The Court is mindful of

the concerns related to inconveniencing owner defendants who, though they have themselves done no

more than purchase a non-compliant property from Spanos Defendants, may nevertheless be required

to accede to an injunction. However, the Court has the discretion to fashion an injunction that is

minimally disruptive to current owners or occupants. See, e .g., United States v. ERGS Inc., et al.

CV-N-02-0615D WH (VPC) (D. Nev.), consent order entered July 13, 2005 (requiring accessability

improvement work to be done in between tenancies while apartments are vacant, and including detailed

provisions to minimize the inconvenience to tenants). Second, insofar as the owner defendants may

eventually be brought into this action through the mechanism of a class action, the Court may require

notice and an opportunity to be heard, and the interests of the owners may be advocated for by the

named defendants. See Jeffries v. Georgia Residential Finance Authority, 678 F.2d 919, 929 (11th Cir.

1982) (discussing joinder of a defendant class of owners).

Finally, the question of whether and to what extent such an injunction is among "the least

intrusive remedies" to effectuate this relief is more appropriately reached at the class certification or

damages stage of this litigation, assuming these stages are eventually reached.

CONCLUSION

Defendants have failed to demonstrate: 1) that the FHA's two year statute of limitations bars

some or all of plaintiff's claims; 2) that plaintiffs do not have standing to sue for violations of the FHA;

or 3) that concerns related to the defendant owner class preclude the injunctive relief requested by

plaintiffs. Additionally, while the two-year statute of limitations bars any liability under the FHA as to

proposed class representatives Knickerbocker and Highpointe, the presence of the Owner Class

Defendants is necessary to afford injunctive relief and therefore the claim for injunctive relief may not

be dismissed as to them insofar as they are potential class representatives.

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Accordingly, the motions to dismiss (including the Spanos Defendants' misnamed motions “for

a more definite statement” and “to strike”) [Docket Nos. 48, 49, 50, 52, 57 and 60] are DENIED. 

IT IS SO ORDERED.

 Dated: 3/26/08 SAUNDRA BROWN ARMSTRONG

United States District Judge

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