Opinion ID: 2974575
Heading Depth: 4
Heading Rank: 1

Heading: Circuit Court’s Power to Review Standing Issue

Text: As an initial matter, the Plaintiffs argue that denial of summary judgment is not appealable where, as in the instant case, “summary judgment is denied and the movant subsequently loses after a full trial on the merits . . . ” Jarrett v. Epperly, 896 F.2d 1013, 1016 (6th Cir. 1990) (citing Locricchio v. Legal Services Corp., 833 F.2d 1352 (9th Cir. 1987); Glaros v. H.H. Robertson Co., 797 F.2d 1564 (Fed. Cir. 1986)). In Jarrett, 896 F.2d at 1016 n. 1, we found that despite the harm that may flow from allowing a wrongful denial of summary judgment to go unreviewed, “it would be even more unjust to deprive a party of a jury verdict after the evidence was fully presented, on the basis of an appellate court’s review of whether the pleadings and affidavits at the time of the summary judgement motion demonstrated the need for a trial.” -5- No. 05-5862 Fair Housing Council, et al. v. Village of Olde St. Andrews, et al. Recognizing that this policy rational does not always apply, we have subsequently carved out exceptions to the general rule. For example, in McPherson v. Kelsey, we held that a movant can appeal the denial of summary judgment even after losing a trial on the merits where the issue on appeal is purely one of law, such as governmental immunity. 125 F.3d 989, 995 (6th Cir. 1997). Other circuits have recognized similar exceptions. See Banuelos v. Const. Laborers' Trust Funds, 382 F.3d 897, 902 (9th Cir. 2004) (“This general rule, however, does not apply to those denials of summary judgment motions where the district court made an error of law that, if not made, would have required the district court to grant the motion.”); Home Savings of America v. United States, 399 F.3d 1341 (Fed. Cir. 2005) (reviewing a district court’s denial of the government’s motion for summary judgment for lack of standing even after a final judgment on the merits was entered for the plaintiffs). We find, however, that there is no need for us to now determine whether or not we may appropriately review the district court’s denial of Defendant WKB’s motion for summary judgment with regard to the issue of standing. This court may always address the issue of standing, irregardless of the lower court’s treatment of that issue. See Bender v. Williamsport Area School Dist., 475 U.S. 534, 541 (1986) (“[E]very federal appellate court has a special obligation to ‘satisfy itself not only of its own jurisdiction, but also that of the lower courts in a cause under review.’”) (quoting Mitchell v. Maurer, 293 U.S. 237, 244 (1934)). 2. Whether the District Court Erred in Determining the Plaintiffs had Standing Defendant WKB argues that the Plaintiffs lack standing to sue because the Plaintiffs fail to demonstrate any injury independent of the instant litigation that is fairly traceable to the allegedly -6- No. 05-5862 Fair Housing Council, et al. v. Village of Olde St. Andrews, et al. discriminatory actions of the Defendants. Responding, the Plaintiffs claim that their investigation into disability discrimination at the WKB properties caused them to divert substantial institutional resources from other projects or standard activities. Addressing these arguments on summary judgment, the district court found that the Plaintiffs failed to present sufficient evidence to support their claim that they were forced to divert funds for the WKB investigation to the detriment of other projects. However, applying this Circuit’s decision in Hooker v. Weathers, 990 F.2d 913, 915 (6th Cir. 1993)1, the district court reluctantly found that the Plaintiffs’ prelitigation investigation expenses related to the three testers that the Fair Housing Council sent to the WKB properties were sufficient to confer standing. Defendant WKB now argues that we should overturn Hooker. In the alternative, WKB claims that Hooker is fairly distinguishable from the instant case and that even under the Hooker, the Plaintiffs lack standing. a. Organizational Standing Under the Fair Housing Act The United States Supreme Court dealt with the issue of organizational standing under the Fair Housing Act in Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982). In that case, a fair housing organization brought suit against a realty corporation, alleging “racial steering” in violation of the Fair Housing Act of 1968, 42 U.S.C. § 3604. In its complaint, the fair housing organization, 1 Therefore, FHCS “can establish standing by alleging a concrete and demonstrable injury, including an injury arising from a ‘purportedly illegal action [that] increases the resources the group must devote to programs independent of its suit challenging the action.’ ” Housing Opportunities Made Equal, Inc. v. Cincinnati Enquirer, Inc., 943 F.2d 644, 646 (6th Cir.1991) (quoting Spann v. Colonial Village, Inc., 899 F.2d 24, 27 (D.C.Cir.), cert. denied,498 U.S. 980, 111 S.Ct. 508, 112 L.Ed.2d 521 (1990)). According to the complaint, “Fair Housing Contact Service conducted an investigation, and confirmed the facts and circumstances alleged [in the complaint].” FHCS devoted resources to investigating the defendants' practices and alleges that it has confirmed that defendants do discriminate on the basis of familial status. Therefore, FHCS has standing.” Hooker v. Weathers, 990 F.2d 913 at 915 (6th Cir. 1993). -7- No. 05-5862 Fair Housing Council, et al. v. Village of Olde St. Andrews, et al. HOME, alleged that it had “been frustrated by defendant’s racial steering practices in its efforts to assist equal access to housing through counseling and other referral services . . . [and] had to devote significant resources to identify and counteract the defendant’s [sic ] racially discriminatory steering practices.” Id. at 378. Arguing that HOME lacked standing, the defendant moved to dismiss. The district court granted the motion, finding that HOME failed to allege a direct injury sufficient to confer standing. The Supreme Court reversed and held that the dismissal was wrong, stating: [i]f, as broadly alleged, petitioners' steering practices have perceptibly impaired HOME's ability to provide counseling and referral services for low-and moderate-income homeseekers, there can be no question that the organization has suffered injury in fact. Such concrete and demonstrable injury to the organization's activities--with the consequent drain on the organization's resources--constitutes far more than simply a setback to the organization's abstract social interests . . .. Id. at 379. Interpreting Havens, the circuit courts have reached varying conclusions about the showing that an organization must make to demonstrate standing under the Fair Housing Act. Before highlighting the different approaches, we first note that the circuits generally agree that an organization meets Article III standing requirements where it can show that the defendant’s alleged violations of the Fair Housing Act caused it to divert resources from other projects or devote additional resources to a particular project in order to combat the alleged discrimination. See Fair Housing Council of Suburban Philadelphia v. Montgomery Newspapers, 141 F.3d 71, 78 (3rd Cir. 1998) (“In deciding organizational standing questions after Havens, appellate courts have generally agreed that where an organization alleges or is able to show – depending on the stage of the proceeding – that it has devoted additional resources to some area of its effort in order to counteract -8- No. 05-5862 Fair Housing Council, et al. v. Village of Olde St. Andrews, et al. discrimination, the organization has met the Article III standing requirement.”). The circuit courts differ, however, on the extent to which they will consider injury related to litigation in reviewing standing. Several courts have taken a more restrictive approach, holding that to show standing, an organization must demonstrate that it suffered a concrete injury that is completely independent from the economic and non-economic costs of the litigation.2 See Spann v. Colonial Village, Inc., 899 F.2d 24, 27 (D.C. Cir. 1990) (“An organization cannot, of course, manufacture the injury necessary to maintain a suit from its expenditure of resources on that very suit. Were the rule otherwise, any litigant could create injury in fact by bringing a case, and Article III would present no real limitation.”); Fair Housing Council of Suburban Philadelphia v. Montgomery Newspapers, 141 F.3d 71, 79 (3rd Cir. 1998) (“We align ourselves with those courts holding that litigation expenses alone do not constitute damage sufficient to support standing.”); Association for Retarded Citizens of Dallas v. Dallas County Mental Health & Mental Retardation Ctr. Bd. of Trustees, 19 F.3d 241, 244 (5th Cir. 1994) (“The mere fact that an organization redirects some of its resources to litigation and legal counseling in response to actions or inactions of another party is insufficient to impart standing upon the organization.”); Walker v. City of Lakewood, 272 F.3d 1114, 1124 n.3 (9th Cir. 2001) (declining to consider “the time and money the [housing organization] has expended in prosecuting this suit” in deciding if the organization had standing). While following the restrictive approach, the Third Circuit has considered litigation expenses when 2 In these cases, the courts have found standing where the defendant's discriminatory actions forced the plaintiff organization to expend resources apart from those dedicated to the litigation, such as where an organization poured additional funds and manpower into a broad education initiative to combat the discrimination. See Spann, 899 F.2d at 27-28 (organization demonstrated that the defendant's racially discriminatory advertising forced it to expend additional resources to educate the community about housing discrimination and counsel individuals facing such discrimination). -9- No. 05-5862 Fair Housing Council, et al. v. Village of Olde St. Andrews, et al. concluding that an organization had standing where the organization “stopped everything else” in order to devote attention to the lawsuit. Alexander v. Riga, 208 F.3d 419, 427 n. 4 (3rd Cir. 2000). Other circuits take a more lenient approach, allowing organizations to prove standing by showing that they diverted resources toward litigation to counteract the defendant’s housing discrimination. For example, in Village of Bellwood v. Dwivedi, 895 F.2d 1521, 1526 (7th Cir. 1990), the Seventh Circuit held “that only injury which needs be shown to confer standing on a fair housing agency is deflection of the agency’s time and money from counseling to legal efforts directed against discrimination.” There, the Court reasoned that the mere fact that the organization lost the opportunity to provide additional or increased counseling because it had directed its resources toward the lawsuit constituted a cognizable injury. Id. See also Ragin v. Harry Macklowe Real Estate Co., 6 F.3d 898 (2nd Cir. 1993) (finding that the plaintiff housing organization had standing based primarily on the significant resources the organization had to devote to investigating the defendant’s alleged discriminatory actions and challenging these actions through litigation); Arkansas ACORN Fair Housing, Inc. v. Greystone Development, Ltd. Co., 160 F.3d 433, 434-35 (8th Cir. 1998) (“While the deflection of an organization's monetary and human resources from counseling or educational programs to legal efforts aimed at combating discrimination, such as monitoring and investigation, is itself sufficient to constitute an actual injury, the injury must also be traceable to some act of the defendant.”) (internal citations omitted). The Sixth Circuit falls into the latter group, taking a similarly lenient approach. Though we require a plaintiff to show some injury that is independent of the costs of litigation, we have interpreted that standard narrowly, finding that costs related to prelitigation investigation can form -10- No. 05-5862 Fair Housing Council, et al. v. Village of Olde St. Andrews, et al. the basis for standing. See Housing Opportunities Made Equal, Inc. v. Cincinnati Enquirer, Inc., 943 F.2d 644, 646 (6th Cir. 1991); Hooker, 990 F.2d at 915. In Housing Opportunities, 943 F.2d at 646, a housing organization sued a local newspaper, alleging that the paper published discriminatory housing advertisements in violation of the Fair Housing Act. Briefly discussing the issue of standing, the Housing Opportunities Court cited the standard set forth in Spann, generally requiring the plaintiff to demonstrate “injury, including an injury arising from a ‘purportedly illegal action [that] increases the resources the group must devote to programs independent of its suit challenging the action.’” Id. (quoting Spann, 899 F.2d at 27) (emphasis added). In Housing Opportunities, the plaintiff’s devotion of resources to investigate and combat the defendant’s discriminatory advertising was found sufficient to confer standing. Id. Although not explicitly stated, Housing Opportunities suggests that this Court does not preclude consideration of the costs of litigation when determining standing, but additionally requires the plaintiff to prove some type of injury beyond these costs. We next revisited the issue of organizational standing under the Fair Housing Act in Hooker, 990 F.2d at 915. In that case, an individual, Richard Hooker, contacted a local fair housing organization to complain of age discrimination at a local trailer park, alleging that the manager of the trailer park refused to rent or sell trailers to young people or families with children. To investigate the claim, the housing organization sent a tester to the trailer park to inquire about renting a trailer. The manager refused to rent to the tester, telling her that she was too young. Based on this investigation, the housing organization filed suit against the manager of the trailer park. The district court dismissed the suit for lack of standing. On appeal, the Hooker Court reversed the dismissal. -11- No. 05-5862 Fair Housing Council, et al. v. Village of Olde St. Andrews, et al. Holding that the act of sending a tester to investigate Hooker’s claim of discrimination was sufficient to confer standing, the court stated, “FHCS devoted resources to investigating the defendants' practices and alleges that it has confirmed that defendants do discriminate on the basis of familial status. Therefore, FHCS has standing.” Id. Recently, in an unpublished decision, Hughes v. Peshina, No. 02-3660, 2004 WL 187550 (6th Cir. 2004), we followed the Hooker Court’s holding. Just as in Hooker, the plaintiff housing organization in Hughes followed up on a complaint of discrimination on the basis of familial status by sending a tester to attempt to rent property from the defendants. When the tester faced similar discrimination, the organization filed suit. Finding that the housing organization had “devoted its efforts to investigating whether [the defendants] had violated the law, thus diverting its resources away from the other housing services it provides and frustrating its mission of insuring fair housing practices,” the Hughes Court found the housing organization had suffered an injury in fact sufficient to confer standing. Id. b. Reconsidering Hooker Seeking reversal of the district court’s conclusion that Plaintiffs Fair Housing Council and the Center for Accessible Living have standing, Defendant WKB first argues that we should overturn Hooker, 990 F.2d at 915. However, this Court must adhere to the well-settled rule that “[r]eported panel opinions are binding on subsequent panels. Thus, no subsequent panel overrules a published opinion of a previous panel. Court en banc consideration is required to overrule a published opinion of the court.” 6th Cir. R. 206(c)). See also Valentine v. Francis, 270 F.3d 1032, 1035 (6th Cir. 2001); Salmi v. Secretary of Health and Human Services, 774 F.2d 685, 689 (6th Cir. 1985) (“A -12- No. 05-5862 Fair Housing Council, et al. v. Village of Olde St. Andrews, et al. panel of this Court cannot overrule the decision of another panel. The prior decision remains controlling authority unless an inconsistent decision of the United States Supreme Court requires modification of the decision or this Court sitting en banc overrules the prior decision.”). Hooker therefore remains controlling authority for this panel. c. Do the Plaintiffs Lack Standing Even Under the Hooker Standard? Under our Article III standing inquiry, a Plaintiff: (1) must have suffered some actual or threatened injury due the to [sic] alleged illegal conduct (the “injury in fact element”); (2) the injury must be fairly traceable to the challenged action (the “causation element”); and (3) there must be a substantial likelihood that the relief requested will redress or prevent [plaintiff]’s injury (the “redressability element”). Stevenson v. J.C. Bradford & Co. (In re Cannon), 277 F.3d 838, 852 (6th Cir. 2002). The standing dispute here centers on whether Plaintiffs suffered a cognizable injury in fact. The district court concluded that the Plaintiffs suffered a sufficiently traceable injury because they incurred monetary pre-litigation expenses or lost opportunity costs associated with the investigation. Specifically, the court determined that, under the Sixth Circuit precedent of Hooker v. Weathers, 990 F.2d 913, 915 (6th Cir. 1993), such prelitigation costs and expenses conferred Article III standing on the Plaintiffs. Because we conclude that the Fair Housing Council set forth sufficient evidence to demonstrate that it suffered an injury that is both independent of the instant litigation and fairly traceable to the discriminatory actions of the Defendants, we find that Plaintiff Fair Housing Council had standing to bring this action. In contrast, because the Plaintiff Center for Accessible Living presents no evidence that they did anything more than identify individuals that might serve as potential testers, the Court finds that the Center for Accessible Living has not established proof that -13- No. 05-5862 Fair Housing Council, et al. v. Village of Olde St. Andrews, et al. it suffered an injury in fact. Accordingly, we find that the Center for Accessible Living does not enjoy standing to make claims in this action. 1. Fair Housing Council As discussed above, the Hooker Court made clear that an organization suffers a concrete injury sufficient to confer standing when it devotes resources to training and deploying testers to investigate suspected instances of discrimination. The Fair Housing Council suffered precisely this type of injury in the instant case. Seeking to distinguish Hooker, Defendant WKB argues that the Fair Housing Council received a fixed grant from HUD for the purpose of investigating housing discrimination through the use of testers. Defendant WKB argues this receipt of HUD financing for testing differentiates this case.3 In fact, WKB claims that the HUD funding required the Plaintiff to perform such tests or it would forfeit future funding. However, the mere fact that the Fair Housing Council had already allocated funds for the use of testers, does not mean that the use of a portion of those funds to investigate WKB properties does not amount to a concrete injury. While this Court has recognized that the diversion of funds from certain activities such as counseling or education can be a sufficient injury to confer standing, it has not required a Plaintiff to demonstrate a redistribution of funds in all cases. For example, the Hooker Court found that the mere fact that the plaintiff had devoted resources to investigating the alleged discrimination was 3 The Fair Housing Council’s budget narrative work plan covering the time span at issue allocates $7,650 to pay for approximately 255 test visits. (J.A. 289.) The budget does not specify whether of not it can be later amended to reallocate funds. -14- No. 05-5862 Fair Housing Council, et al. v. Village of Olde St. Andrews, et al. sufficient – it did not indicate what the plaintiff would have otherwise done with those resources, nor suggest that the plaintiff would need prove that they cut other services due to the plaintiff’s investigation. Moreover, almost anytime an organization such as the Fair Housing Council funds a particular project, such as the WKB investigation, the pool of resources that it has to combat other instances of discrimination grows smaller. The opportunity cost, the value of the opportunity forgone by using funds on the Olde St. Andrews testing, is real. In our world of scarce resources, every expenditure of money, time or other resources results in the loss of the benefit that would have resulted if the same time or money had been spent on something else. If the Fair Housing Council had not expended time and money on testing at Olde St. Andrews, it could have used those monies for other testing. Indeed, the Plaintiffs argue that as a result of the Fair Housing Council’s investigation of the WKB properties, FHC used a significant portion of resources that would otherwise be available for fighting disability discrimination. While not explicit, we find evidence of this shift in the Fair Housing Council’s records during the time in question. For example, the final statement of work that the Fair Housing Council submitted with its 2000 grant proposal shows a clear focus on disability rights and the training and deployment of testers to investigate dwelling structures for accessibility problems. (J.A. 353.) For a housing organization that traditionally monitored and investigated a broad range of discriminatory actions, this new focus on disability discrimination very likely means that the organization turned its attention away from other incidents of discrimination. Defendant WKB next argues that the instant case is distinguishable from Hooker because the Hooker plaintiff investigated the defendant trailer park only after receiving a complaint of -15- No. 05-5862 Fair Housing Council, et al. v. Village of Olde St. Andrews, et al. discrimination, whereas the Fair Housing Council received no complaints of discrimination prior to investigating the Village of Olde St. Andrews. Essentially, WKB suggests that any injury that may stem from the Fair Housing Council’s investigation of WKB properties is not fairly traceable to the acts of the Defendants because the Fair Housing Council initiated the investigation. In the instant case, the Fair Housing Council was tipped off to potentially discriminatory conditions at the Village of Olde St. Andews after noticing that all of the units in the development had steps leading to the front door, creating an “inaccessible route” for disabled individuals. (Dist. Ct. Op. 15-16, J.A. 89-90.) Part of the Fair Housing Council’s mission includes investigating and monitoring housing developments for suspected incidences of discrimination. Regardless of whether an organization learns of potential discrimination through independent complaints or through its own observations, any action it takes in combating that discrimination is fairly traceable to the defendant’s discriminatory acts. See e.g., Cabrera v. Jakabovitz, 24 F.3d 372 (2d Cir.1994) (finding that a housing organization had standing when the organization, acting on its own initiative rather than in response to a specific complaint, sent testers to investigate racial steering at certain New York City rental properties). We accordingly find that the resources that the Fair Housing Council directed toward training and employing testers to investigate the Village of Olde St. Andrews constitutes a concrete injury.4 4 The Plaintiffs additionally argue that even were we to find that the direct testing costs do not constitute a traceable injury, they suffered other concrete injuries sufficient to confer standing. The Plaintiffs specifically point to several tasks that the Fair Housing Council claims its staff performed in lieu of other normal agency operations, such as training and recruiting the testers and designing the testing portion of the investigation, observing the Village of Olde St. Andrews development, meeting with the Center for Accessible Living. As proof of these prelitigation activities, the Plaintiffs point to a record entitled “Plaintiffs’ Diversion of Resources,” which the Plaintiffs attached to their motion for Attorney Fees. This document shows that Plaintiff the Fair Housing Council’s staff dedicated approximately 32 -16- No. 05-5862 Fair Housing Council, et al. v. Village of Olde St. Andrews, et al. Moreover, this injury is directly traceable to the Defendants’ construction of the housing development in a manner resulting in discrimination toward disabled individuals. We therefore affirm the District Court’s finding that Plaintiff Fair Housing Council has standing under the Fair Housing Act.