U.S. v. Pacific Northwest Electric Inc.

Full title: UNITED STATES OF AMERICA, Plaintiff, v. PACIFIC NORTHWEST ELECTRIC, INC.…

Court: United States District Court, D. Idaho

Date published: Nov 20, 2002

Case No. CIV 01-019-S-BLW (D. Idaho Nov. 20, 2002)

Opinion

Case No. CIV 01-019-S-BLW

November 20, 2002

REPORT AND RECOMMENDATION

LARRY M. BOYLE, Chief United States Magistrate Judge

Currently pending before the Court are the Edmonds Defendants' Motion for Summary Judgment (Docket No. 67), Defendant Teal-WhitWorth's Motion for Summary Judgment (Docket No. 72), Defendant Capstone's Motion for Summary Judgment (Docket No. 86), PNE Defendants' Motion for Summary Judgment (Docket No. 92), Defendant Teal-Whitworth's Motion for Partial Summary Judgment (Docket No. 95), and Plaintiffs Motion for Summary Judgment (Docket No. 101).

Having carefully reviewed the record, considered memoranda and oral arguments of counsel for the respective parties, and otherwise being fully advised, the Court enters the following Report and Recommendation.

I. BACKGROUND

The instant action arises out of alleged violations of the Fair Housing Act,¹ 42 U.S.C. § 3601 et seq, which requires that covered units in multifamily housing complexes constructed after March 13, 1991 contain certain features to make them accessible to persons with disabilities. in its Complaint, Plaintiff alleges that Defendants failed to include some or all of these features in the design and construction of 78 covered apartments in five housing complexes of differing design in Boise, Idaho. Specifically, among the alleged deficiencies, Plaintiff claims that Defendants have failed, to design and construct the subject properties to ensure that the public use and common use portions are readily accessible to and usable by individuals with disabilities, all doors are sufficiently wide to allow passage of wheelchairs, there is an accessible route into and through the dwelling, electrical outlets, thermostats and other environmental controls are in accessible locations, reinforcements in bathroom walls allow for installation of grab bars, and kitchens and bathrooms are useable for people in wheelchairs. Complaint ¶ 16.

1 The Fair Housing Act was originally enacted in 1968 and was then amended in 1988 to include "handicap" as a prohibited basis of discrimination. For purposes of this Report and Recommendation, references to the Fair Housing Act refers to the 1988 Act, unless otherwise designated.

The named Defendants are Edmonds Construction, its owner Wirt Edmonds, and his wife Francis Edmonds (collectively "Edmonds Defendants"); Pacific Northwest Electric, be, Walter Sigmont, Ruth Sigmont, and PNE Construction (collectively "PNE Defendants")² Capstone Inc.; and Teal-Whitworth Architects, P.A.

2 Walter Sigmont averred that "[t]here is not [sic] entity that I am aware of or involved with, known as PNE Construction." Sigmont Aff. ¶ 2 (Docket No. 94). Therefore, the Court's reference to the "PNE Defendants" does not include an entity by the name of PNE Construction.

According to the record, each of the named Defendants had varying degrees of involvement with the five apartment complexes at issue. These complexes, and the respective Defendants' involvement in their construction or design, are as follows.

1) Eagleson Park

This complex is comprised of five two-story buildings with a total often ground-floor units. The entire complex was purchased by Pacific Northwest Electric, Inc. (PNEI) from Edmonds Construction. Affidavit of Walter T. Sigmont ¶ 8 (Docket No. 94). The site design for the exterior portions was prepared by Pat Tealey d/b/a Tealey's Land Surveying ("Tealey"). Construction of Eagleson Park was completed in November 1992, and all units were sold by January 1993. Id.

2) Imperial Court

This complex is comprised of six two-story buildings with a total of twelve ground-floor units and was purchased by PNEI on December 7, 1992. The project used the identical floor plan as Eagleson Park, with construction being completed in January 1994, and all units were sold by March 1994. Id. ¶ 9. This site design was also prepared by Tealey. 3) Grayling Place

This complex is comprised of thirteen two-story buildings with a total of twenty-six ground-floor units. Each of the thirteen buildings has a two bedroom-two bath unit and a three bedroom-two bath unit on its ground-floor. The two bedroom units in each of the buildings are essentially the same, as are the three bedroom units essentially the same in each building. This complex was constructed utilizing a set of plans "which were a composite of several floor plans for multi-family dwellings." Id. ¶ 11.

Construction of the Grayling Place project involved both Edmonds Construction and PNEI Affidavit of Wirt Edmonds ¶ 8 (Docket No. 70). Designer Loren Williams drafted the plans for the complex and the site design was prepared by Tealey. Id. The complex was completed on April 11, 1994 and all units were sold by June 30, 1994. Sigmont Aff. ¶ 11.

4) Lawton Apartments

This complex is comprised of five two-story buildings with a total often ground-floor units. This project was constructed by both Edmonds Construction and PNEI, Edmonds Aff. ¶ 4, and was sold to Edmonds Construction and PNEI by realtor/developer, John Browning, who had "an approved set of plans for the development and had pre-sold the entire complex." Sigmont Aff. ¶ 10.

Teal-Whitworth Architects were hired to prepare the design plans, and Tealey prepared the site plan for the complex. Edmonds Aff. ¶ 4. Construction of the project was completed and sold on October 16, 1995. Sigmont Aff. ¶ 10.

5) Jade Village II

This complex is comprised of six two-story buildings, four eight-plexes and two four-plexes, with a total of twenty ground-floor units. This project also involved both Edmonds Construction and PNEI. Id. ¶ 12. Originally, John Badiola owned the land for the apartments and he was working with Pinnacle Engineers, Edmonds Aff. ¶ 7, who prepared the site plan. Capstone Architects was hired by Pinnacle Engineers to develop the plans for the construction of the buildings. Id. Similar to the Lawton Apartments, Edmonds Construction and PNEI purchased the property as a "ready to build project" from John Browning. Id. The "B" units were completed and sold on December 26, 1996, and the "A" units were sold by October 1997. Sigmont Aff. ¶ 15.

II. ANALYSIS

A. Standard for Summary Judgment

Motions for summary judgment are governed by Fed.R.Civ.P. 56, which provides, in pertinent part, that judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c).

The United States Supreme Court has made it clear that under Rule 56, summary judgment is required if the nonmoving party fails to make a showing sufficient to establish the existence of an element which is essential to his case and upon which he or she will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). If the nonmoving party fails to make such a showing on any essential element of his case, "there can be "no genuine issue as to any material fact," since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial," Id. at 323.³

3 See also Rule 56(e), which provides in part:

When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party.

Fed.R.Civ.P. 56(e).

Under Rule 56 it is clear that an issue, in order to preclude entry of summary judgment, must be both "material" and "genuine." An issue is material" if it affects the outcome of the litigation. An issue is "genuine" when there is "sufficient evidence supporting the claimed factual dispute . . . to require a jury or judge to resolve the parties differing versions of the truth at trial," Hahn v. Sargent, 523 F.2d 461, 463 (1st (Mr. 1975) (quoting First Nat'l Bank v. Cities Serv. Co., Inc., 391 U.S. 253, 289 (1968)), or when the "evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The Ninth Circuit cases are in accord. See, e.g., British Motor Car Distrib., Ltd. v. San Francisco Automotive Indus. Welfare Fund, 882 F.2d 371 (9th Cir. 1989).

In ruling on summary judgment motions, the court does not resolve conflicting evidence with respect to disputed material facts, nor does it make credibility determinations, T. W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626 (9th Cir. 1987). Moreover, all inferences must be drawn in the light most favorable to the nonmoving party. Id. at 631. As the Ninth Circuit Court of Appeals has stated, "[p]ut another way, if a rational trier of fact might resolve the issue in favor of the nonmoving party, summary judgment must be denied." Id.

In order to withstand a motion for summary judgment, the Ninth Circuit has held that a nonmoving party

(1) must make a showing sufficient to establish a genuine issue of fact with respect to any element for which it bears the burden of proof; (2) must show that there is an issue that may reasonably be resolved in favor of either party; and (3) must come forward with more persuasive evidence than would otherwise be necessary when the factual context makes the nonmoving party's claim implausible.

British Motor Car Distrib., 882 F.2d at 374 (citation omitted). Moreover, the Ninth Circuit has held that where the moving party meets its initial burden of demonstrating the absence of any genuine issue of material fact, the nonmoving party must "produce "specific facts showing that there remains a genuine factual issue for trial' and evidence `significantly probative' as to any [material] fact claimed to be disputed." Steckl it Motorola, Inc., 703 F.2d 392, 393 (9th Cir. 1983) (citing Ruffin v. County of Los Angeles, 607 F.2d 1276, 1280 (9th Cir. 1979)).

The Ninth Circuit Court of Appeals has acknowledged that in recent years the Supreme Court, "by clarifying what the nonmoving party must do to withstand a motion for summary judgment, has increased the utility of summary judgment." California Architectural Bldg. Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir. 1987). As the Ninth Circuit has expressly stated: "No longer can it be argued that any disagreement about a material issue of fact precludes the use of summary judgment." Id.

In addressing the application of the "Summary Judgment Test," the Ninth Circuit has specifically explained that:

A "material" fact is one that is relevant to an element of a claim or defense and whose existence might affect the outcome of the suit. The materiality of a fact is thus determined by the substantive law governing the claim or defense. Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment.

T. W. Elec. Serv., Inc., 809 F.2d at 630 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)) (emphasis added).

B. Defendants' Motions for Summary Judgment (Docket Nos. 67, 72, 86, 92, 95)

The Edmonds Defendants were the first to file their Motion for Summary Judgment. (Docket No. 67). Shortly thereafter, the PNE Defendants, Teal-Whitworth, and Capstone filed their Motions for Summary Judgment. (Docket Nos. 72, 86, 92, 95). In the course of analyzing the various pending motions, the Court notes that several of the parties' arguments for summary judgment are similar in substance and a ruling on the various issues does not appear to be dependent on a specific Defendant's involvement with respect to the five complexes. For example, in its submissions, Teal-Whitworth states that it "adopts the Memorandum of Points and Authorities in Support of Edmonds' Motion for Summary Judgment" as its own supporting memorandum for summary judgment. (Docket No. 73, p. 2). Further, in their motion, the PNE Defendants "join in and support the Motion which has been filed by the Edmonds defendants." (Docket No. 93, p. 2).

In light of the foregoing, the Court will collectively analyze the various arguments as follows.

1. Failure to Exhaust Administrative Remedies

According to the record, complaints were filed with the Department of Housing and Urban Development ("HUD") with respect to all five apartment complexes. See, e.g., Edmonds Aff. ¶ 11; Sigmont Aff. ¶ 18. All Defendants argue that the instant action should be dismissed against them on the grounds that the United States ("Plaintiff') failed to satisfy the administrative requirement of a meaningful conciliation process prior to referring the case for prosecution.

a. Conciliation

According to the administrative enforcement provisions of the Fair Housing Act, an aggrieved person "may file a complaint with the Secretary alleging such discriminatory housing practice."⁴ 42 U.S.C. § 3610 (a)(1)(A)(i). Pursuant to this section, "the Secretary shall, to the extent possible, engage in conciliation with respect to such complaint." Id. § 3610(b)(1). Thereafter, "[i]f the Secretary determines that reasonable cause exists to believe that a discriminatory housing practice has occurred or about to occur, the Secretary shall . . . immediately issue a charge on behalf of the aggrieved person, for further proceedings under section 3612 of this title." Id. § 3610(g)(2)(A).

4 The Fair Housing Act provides that the "Secretary" refers to the Secretary of Housing and Urban Development. 42 U.S.C. § 3602(a). Further, an "aggrieved person" includes any person who "claims to have been injured by a discriminatory housing practice; or believes that such person will be injured by a discriminatory housing practice that is about to occur." Id § 3602(i).

Pursuant to § 3612, when a charge is filed under § 3610(g), "a complainant, a respondent, or an aggrieved person on whose behalf the complaint was filed," may elect to have the claims asserted in that charge asserted in a civil action or to have the claims decided by an administrative law judge. Id. § 3610(a). If the election is made to assert the claims in a civil action, "the Secretary shall authorize" the Attorney General to file a civil action on behalf of the aggrieved person in a United States district court. Id. § 3610(o).

Once a matter is referred by the Secretary, the Attorney General "may commence a civil action in any appropriate United States district court. . . ." Id. § 3614(b).

b. Civil Action Initiated by the Attorney General

Section 3614(b) provides that the Attorney General may commence a civil action after referral by the Secretary. Notwithstanding this referral process, § 3614(a) provides:

Whenever the Attorney General has reasonable cause to believe that any person or group of persons is engaged in a pattern or practice of resistence to the full enjoyment of any of the rights granted by this subchapter, or that any group of persons has been denied any of the rights granted by this subchapter and such denial raises an issue of general public importance, the Attorney General may commence a civil action in an appropriate United States district court.

42 U.S.C. § 3614(a).

In the Court's view, it appears that 42 U.S.C. § 3614(a) does not require conciliation by HUD as a condition precedent or a mandatory prerequisite to the Attorney General commencing an action. Rather, by the plain, unambiguous language of the statute, the Attorney General may initiate a cause of action pursuant to either §§ 3614(a) or 3614(b). After considering the respective statutes, the Court is of the opinion that the administrative conciliation process of § 3610 is not a required prerequisite to an action brought by the Attorney General in circumstances such as exist here.

The Court also notes that similar to a cause of action initiated by the Attorney General pursuant to § 3614(a), § 3613 provides that a private person may directly commence a civil action in a United States District Court. Similar to § 3614(a), it does not appear that § 3613 requires a private person to engage in a conciliation process or impose other administrative requirements prior to filing a civil action. Several courts have held that a plaintiff is not required to pursue conciliation or exhaust any administrative remedies before filing an action under the Fair Housing Act. See; e.g., Assisted Living Assocs. of Moorestown, L.L.C. v. Moorestown Township, 996 F. Supp. 409, 433 (D.N.J. 1998); Oxford House, Inc. it City of Virginia Beach, 825 F. Supp. 1251, 1260 (E.D. Va. 1993); Ward v. Harte, 794 F. Supp. 109, 113 (S.D.N.Y. 1992).

In the Court's view, similar to a private cause of action brought pursuant to § 3613, the Attorney General is not required to refer to conciliation or exhaust administrative remedies before commencing an action pursuant to § 3614(a). Accordingly, Defendants' Motions for Summary Judgment should be denied on the asserted ground of failure to refer or exhaust administrative remedies.

2. Statute of Limitations

a. Compensatory and Punitive Damages

The parties do not dispute that in "pattern or practice" cases under the Fair Housing Act in which damages are sought under 42 U.S.C. § 3614 (d)(1)(B), "the Government's claims are in the nature of a tort claim, and thus the three year statute of limitations period of [ 28 U.S.C. § 2415(b)] applies." United States it Marsten Apartments, Inc., 175 F.R.D. 257, 263 (E.D. Mich. 1997) (citing United States v. Limbs, 524 F.2d 799, 801 (9th Cir. 1975)). Pursuant to 28 U.S.C. § 2415 (b), actions sounding in tort "shall be barred unless the complaint is filed within three years after the right of action first accrues. . . ."

In the instant action, Plaintiff prays for compensatory and punitive damages under 42 U.S.C. § 3614(d)(1)(B). Defendants argue that Plaintiffs claims are time-barred because the Complaint was not filed within three years of the date that each of the five apartment complexes were sold.

Generally, "[a] claim normally accrues when the factual and legal prerequisites for filing suit are in place." 3M Company v. Browner, 17 F.3d 1453, 1460 (D.C. Cir. 1994) (citing United States v. Lindsay, 346 U.S. 568, 569 (1954)). Pursuant to 28 U.S.C. § 2416(c):

For the purposes of computing the limitations periods established in section 2415, there shall be excluded all periods during which . . . facts material to the fight of action are not known and reasonably could not be known by an official of the United States charged with the responsibility to act in the circumstances. . . .

Although it did not decide when the three year statute of limitations pursuant to § 2415 begins to run, the United States District Court for the Eastern District of New York analyzed a statute of limitations issue regarding an alleged violation of the False Claims Act in United States v. Incorporated Village of Island Park, 791 F. Supp. 354 (E.D.N.Y. 1992) (" Island Park I"). Under the facts of that case, the Government argued that its claim was timely because it was brought within "3 years after the date when facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances. . . ." Id. at 361 (citing 31 U.S.C. § 3731(b)(2)). In its analysis, the court in Island Park I recognized that a claim under the False Claims Act "may only be initiated either by the Attorney General of the United States or by a private person in the name of the United States." Id. at 362. The court in that case concluded the limitations period was tolled until officials at the Department of Justice knew or should have known of the facts material to the right of action. Id. at 363.

With that standard in mind, the court in Island Park I concluded that the officials at the Department of Justice should have known of the alleged wrongdoing on the day HUD released a particular audit report. Id. The court in Island Park I reasoned "[t]hat audit report was widely disseminated throughout the United States government; any one of the many officials to which it was sent could have — and should have — referred the matter to the Department of Justice." Id. That court went on to state "it cannot be but the Department of Justice "should have . . . known through the exercise of `due diligence' about these matters at the time that they were well known throughout the rest of the United States Government." Id. As a result, the court in Island Park I ruled that the claim pursuant to the Fair Claims Act was untimely.

After conducting its own independent research and studying the briefs of counsel, the Court finds that no court has addressed precisely when the Attorney General, through the Department of Justice or its officials, is charged with knowing, or reasonably could have known, of facts material to a cause of action for triggering the statute of limitations pursuant to 28 U.S.C. § 2415. However, this Court is of the view that the reasoning of the court in Island Park I is instructive and helpful to an analysis of the circumstances existing here.

In the instant action, Plaintiff maintains that. the Department of Justice did not know of any of the five apartment complexes until July 22, 1999 at the earliest when HUD had their first informal discussions with Department of Justice personnel. Declaration of Judith Keeler ¶¶ 1, 2 ( Plaintiff's Response to the Edmonds Defendants' Motion for Summary Judgment, Ex. B) (Docket No. 84). However, the record also indicates that HUD filed complaints with respect to the five apartment complexes as early as 1998 and again in 1999. Sigmont Aff. ¶ 18; Edmonds Aff. ¶ 12. Specifically, Mr. Edmonds averred:

With regard to the Jade Village II HUD complaint, it was originally filed February 6, 1998 and then subsequently I was notified that it was amended in April 1999 and again it was amended July 13, 1999. With regard to the HUD complaint on Grayling Place, there were housing complaints filed January 30, 1998, March 26, 1998, November 23, 1998 and January 11, 1999. The Lawton Apartments complaint was amended June 18, 1999.

Edmonds Aff. ¶ 13.

Although the record does not indicate the exact dates the HUD complaints were filed with regard to Eagleson Park and Imperial Court, Mr. Sigmont averred that "[i]n 1998 I first became aware of the FHAA . . . after being notified that a complaint had been filed against me." Sigmont Aff. ¶ 18. Thus, based on the available evidence in the record, the Court concludes that the HUD complaints were filed with respect to all of the complexes in 1998 at the earliest.

After carefully reviewing the entire file, the Court is of the view, based upon all available evidence contained in the record, that the earliest the Department of Justice knew, or reasonably could have known, of these units was in February 1998. Thus, even if February 1998 is the appropriate date to charge Plaintiff with knowledge, instead of the date the Department of Justice asserts it was apparently notified by HUD, some time after July 1999, the claim for compensatory and punitive damages filed in this action in January 2001 would still be within the three year statute of limitations period. The existing record before the Court does not contain evidence that would charge Plaintiff with earlier knowledge of the alleged Fair Housing Act violations by these Defendants. Accordingly, the Court concludes that Plaintiffs claims for compensatory and punitive damages are not barred by the three year statute of limitations and should therefore not be dismissed on that basis.

b. Civil Penalties

Generally. an action seeking civil penalties must be "commenced within five years from the date when the claim first accrued if, within the same period, the offender or the property is found within the United States in order that proper service may be made thereon." 28 U.S.C. § 2462. This five year limitations period applies when civil penalties are sought in Fair Housing Act cases. See, e.g., Island Park I, 791 F. Supp. at 364-68; United States v. Harrison, 188 F. Supp.2d 77 (D. Mass. 2002).

In the instant action, the parties do not dispute that the applicable statute of limitations is codified in 28 U.S.C. * 2462. Rather, the parties dispute the application of the statute to the instant circumstances. Specifically, Plaintiff argues that the Court should apply the "continuing violation doctrine" to conclude that its claims are not time barred.

After conducting its own independent legal research, the Court concludes that the Ninth Circuit Court of Appeals has not addressed the applicability of the continuing violation doctrine in the context of a Fair Housing Act action. Recently, however, the United States District Court for the Eastern District of Virginia engaged in a lengthy discussion on the issue of "whether the existence of a Fair Housing Act non-compliant building constitutes a continuing violation under the FHA." Moseke v. Miller and Smith, Inc., 202 F. Supp.2d 492 (E.D. Va. 2002).

In Moseke, a disabled person and a fair housing organization brought an action against developers, architectural firms, and a condominium association. Thereafter, the defendants moved to dismiss the complaint on the grounds that the plaintiffs' construction and design claims were not timely filed within the Fair Housing Act's two year statute of limitations period applicable to a private cause of action brought pursuant to 42 U.S.C. § 3613. The court focused its analysis on the statute of limitations at issue which required that a plaintiff file a lawsuit within two years after the " occurrence or termination of an alleged discriminatory practice." Id. at 507 (quoting 42 U.S.C. § 3613 (a)(1)(A)) (emphasis in original). Thus, the court in Moseke reasoned that "the plain language of the FHA indicates that an act whether one or in a series of many, or a single discrete occurrence, is necessary within the limitations period or the claim falls outside the statute of limitations." Id. at 503.

The court in Moseke analyzed Havens Realty Corporation v. Coleman, 455 U.S. 363 (1982), which addressed the continuing violation doctrine in gender and racial discrimination contexts for "instructive guidance in applying the rule to a disability discrimination claim under the FHA." Id. at 504.

In Havens, the plaintiffs alleged that apartment employees falsely informed potential black renters that no apartments were available while informing potential white renters that apartments were available. The Supreme Court of the United States in Havens recognized that plaintiffs challenged "an unlawful practice that continues into the limitations period." Id. at 381. Therefore, the Court in Havens adopted the continuing violation doctrine in concluding that the action was not time barred. Id.

In declining to follow Havens, the court in Moseke recognized that "the Supreme Court has consistently held that a continuing violation was not present where there was a subsequent effect resulting from the defendant's prior discriminatory act . . . The critical question is whether any present violation exists." 202 F. Supp.2d at 506 (citing United Air Lines v. Evans, 431 U.S. 553, 557 (1977); Lorance v. ATT Tecks., Inc., 490 U.S. 900 (1989)). Based on its analysis of the case authority, the court concluded that "it is clear that the continuing effects of a previous discriminatory act do not constitute a continuing violation." Id. at 507. As a result, that court held that an "FHA non-compliant building which contains inaccessible features to disabled persons is more akin to a continuing effect rather than a continuing violation under the FHA." Id. Thus, the court concluded that the statute of limitations barred the plaintiffs' claim because it "failed to plead that Defendants committed an act within two years of when the Complaint was filed." Id. at 510.

In support of its holding, the court in Moseke distinguished the New York federal district court case Eastern Paralyzed Veterans Association v. Lazarus-Burman Associates, 133 F. Supp.2d 203 (E.D.N.Y. 2001). In Eastern Paralyzed, the plaintiffs brought a claim against a developer alleging that a housing project was not wheelchair accessible, in violation of the Fair Housing Act. Relying on Havens, the court in Eastern Paralyzed concluded that "[t]he challenged discriminatory housing practice is clearly a continuing violation." Id. at 213. The court in Moseke found the reasoning and conclusion from Eastern Paralyzed unpersuasive because the court in Eastern Paralyzed "simply assumed that a racial steering housing allegation was tantamount to a disability design and construction claim." 202 F. Supp.2d at 508.

Similar to the court in Moseke, the United States District Court for the District of Maryland in Baltimore Neighborhoods Inc. v. Rommel Builders, Inc., 40 F. Supp.2d 700 (D. Md. 1999) (" Rommel II") addressed the statute of limitations relevant to a private cause of action under the Fair Housing Act. However, the court in Rommel II relied on Havens and concluded that "[u]nder the continuing violation doctrine of limitations, the limitations period does not begin to run until the happening of the `last asserted occurrence' or discrimination." Id. at 710 (citing Havens, 455 U.S. at 381). As such, that court concluded that "the limitations period does not begin to run until the last occurrence of the violations which the Court finds to be the sale of the last inaccessible unit. . . ." Id.

Although the court in Rommel II stated that it was applying the continuing violation doctrine, the Court in this instant action is of the view that the circumstances existing in Rommel II were analogous to the circumstances in Moseke. Whereas under the continuing violation doctrine, the alleged violation "repeatedly triggers and retriggers the statute of limitations clock," United States v. Yonkers Board of Ed., 992 F. Supp. 672, 675 (S.D.N.Y. 1998), the court in Rommel II, similar to the court in Moseke, looked to the language of § 3613(a)(1)(A) in reaching its conclusion. Thus, this Court is of the view in this instant action that Rommel II actually misinterpreted the continuing violation doctrine.

In this instant action, Defendants argue that the sale of the complexes is the last possible date the statute of limitations could have began to run, Thus, Defendants argue that Plaintiffs claims for compensatory damages and civil penalties are barred by the five year statute of limitations, with the possible exception of Jade Village II.

After carefully reviewing the matter, the Court concludes that if the instant action was a private action subject to the two year statute of limitations of § 3613(a)(1)(A), it would be inclined to agree with Defendants' position that the statute of limitations began to run at the sale of the complexes. However, the Court notes that Moseke and Rommel II addressed circumstances of a private cause of action. As such, the court in Moseke relied heavily on the plain language of the applicable statute of limitations.

The instant action, however, is not a private cause of action, but is rather an action initiated by the Attorney General pursuant to 42 U.S.C. § 3614(a). Since there is no statute of limitations articulated in § 3614(a), this Court has concluded, pursuant to 28 U.S.C. § 2462, that the applicable statute of limitations period is five years. In contrast to the statute of limitations for a private cause of action, § 2462 does not provide that an action must commence "after the occurrence or termination of an alleged discriminatory housing practice . . . whichever occurs last," but rather must commence within "five years from the date when the claim first accrued." 28 U.S.C. § 2462 (emphasis added).

As stated above, "[a] claim normally accrues when the factual and legal prerequisites for filing suit are in place." Browner, 17 F.3d at 1460. Unlike the statute of limitations applicable to Plaintiff's claim for compensatory and punitive damages, there is no "discovery exception" mandated by statute for Plaintiff's cause of action for civil penalties. For guidance on when the claim first accrues, the Court turns once again to the court's analysis in Island Park I. That court determined that the statute of limitations for the Fair Claims Act was triggered on the date the HUD audit report was released because it was the date on which the Government knew, or should have known, of the alleged wrongdoing of the defendants. That court also utilized this date for determining when the statute of limitations began to run with respect to the Government's claim for civil penalties. As a result, the court in Island Park I concluded that the Government's claim was barred because it was filed five years after the release of HUD's audit report. 791 F. Supp. at 368.

A review of the Island Park I decision demonstrates that the court implicitly allowed a "discovery exception" to determine when the five year statute of limitations began to run. In the Court's view, the Island Park I case demonstrates the distinction between the accrual of a cause of action pursuant to § 3614(a), and a private cause of action under § 3613. Thus, while the statute of limitations may commence at the time the last inaccessible unit is sold for a private cause of action, as determined in Rommel II, the Court is of the view that the date of sale of the apartment complexes in the instant action is not the point in which the statute of limitations begins to run.

In the absence of case law to provide an alternative time when Plaintiff's cause of action first accrued, the Court concludes that the date the HUD complaints were filed, see supra, Part II(B)(2)(a), was the time when Plaintiffs cause of action first accrued. At that time, the Court concludes that Plaintiff had "reasonable cause to believe that any person or group of persons is engaged in a pattern or practice" of discrimination. 42 U.S.C. § 3614(a). Since Plaintiffs complaint was filed within the five year statute of limitations, the Court concludes that Plaintiff's action for civil penalties is not time barred. Accordingly, Defendants' Motions for Summary Judgment should be denied in this respect.

3. Plaintiff's Claim for Injunctive Relief

According to the prayer for relief in Plaintiffs Complaint, it seeks an order which:

Enjoins the defendants, their officers, employees, agents, successors and all other persons in active concert or participation with any of them, from:

a. Failing or refusing to bring the 72 ground-floor units and public use and common areas at the subject properties into compliance with 42 U.S.C. § 3604 (f)(3)(C) . . .

b. Failing or refusing to take such affirmative steps as may be necessary to restore, as nearly as practicable, the victims of the defendants' unlawful practices to the position they would have been in but for the discriminatory conduct; and

c. Designing or constructing covered multifamily dwellings in the future that do not contain the accessibility and adaptability features required by 42 U.S.C. § 3604(f)(3)(C).

Complaint, pp. 6-7.

Defendants argue Plaintiffs claim for injunctive and equitable relief requiring Defendants to retrofit the inaccessible covered multifamily housing is not an appropriate remedy. Defendants argue that in a "pattern or practice" action brought pursuant to 42 U.S.C. § 3614(a), Plaintiff may only seek preventive injunctive relief See § 3614(d)(1)(A).

With respect to a private cause of action, pursuant to 42 U.S.C. § 3613(c)(1), it is clear that the court "may grant as relief, as the court deems appropriate, any permanent or temporary injunction, temporary restraining order, or other order. . . ." When a cause of action is brought pursuant to § 3613, several courts have determined that the defendants may be required to retrofit inaccessible housing. See, e.g., Balachowski v. Boidy, 2000 WL 1365391 at * 14-15 (N.D. Ill. Sept. 20, 2000);⁵ Rommel Builders, Inc. v. LOB Inc., 92 F. Supp.2d 456, 467 (D. Md. 1999).

5 Only the Westlaw citation is currently available for this case.

Pursuant to 42 U.S.C. § 3614(d)(1), in addition to specifically providing that a court may award "preventative relief," the statute also provides that a court "may award other such relief as the court deems appropriate. . . ." Id. § 3614(d)(1)(B). To this end, the Fifth Circuit Court of Appeals has stated that in "pattern or practice" cases, "[a]ppropiate relief for violations of the Act is to he determined on a case-by-ease basis" and that "[r]elief should be aimed toward twin goals insuring that no future violations of the Act occur and removing any lingering effects of past discrimination." United States v. Jamestown Center-In-The-Grove Apartments, 557 F.2d 1079, 1080 (5th Cir. 1977).

In the Court's view, Defendants' argument of a distinction between the types of injunctive remedies permissible under a private cause of action, but not in a "pattern or practice" case pursuant to § 3614 is not persuasive. Defendants have not supported their argument by citing any case authority that would limit imposition of injunctive remedies.

Further, the Court notes that Defendants argue they cannot retrofit the complexes because they no longer own the units or otherwise have control over them. However, as the court in Balachowski ruled, "the fact that [the defendant] is no longer the owner is irrelevant . . . The law of equity is served by having [the defendant], the owner of the property at the time in question, set aside funds to have the violations remedied." 2000 WL 1365391 at *15.

Accordingly, Plaintiff's claim for injunctive relief should not be dismissed, and Defendants' Motions for Summary Judgment should be denied in this respect.

C. Edmonds Defendants' Motion for Summary Judgment (Docket No. 67)

I. Pattern or Practice

In United States v. Garden Homes Management, Corp., 156 F. Supp.2d 413, 420 (D.N.J. 2001), the United States District Court for the District of New Jersey stated that "[t]he existence of a pattern or practice of discrimination is a predicate to the Government's ability to maintain a Fair Housing Act suit."⁶ Thus, the Edmonds Defendants argue that they should be dismissed because Plaintiff cannot establish the requisite "pattern or practice."

6 The court in Garden Homes also recognized that the Fair Housing Act provides that the Government can bring suit if a violation "raises an issue of general public importance." 42 U.S.C. § 3614(a). Id. at 420 n. 7. However, the court in Garden Homes did not discuss this wound because the "motion papers focus almost exclusively on the pattern or practice requirement." Id. Similarly, in the instant action, the Edmonds Defendants' Motion for Summary Judgment focuses almost exclusively on this requirement. Since the Court concludes herein that the Edmonds Defendants' Motion for Summary Judgment should be denied on the basis that a genuine issue of material fact exists as to whether they were engaged in a pattern or practice of' discrimination, it is unnecessary at this point to determine whether Plaintiff may proceed on the basis that the Edmonds Defendants' conduct jeopardizes important public interests.

To establish a pattern or practice, it is well established that Plaintiff must do more than submit proof of discrimination. It must show "by a preponderance of evidence that . . . discrimination was the company's standard operating procedure, the regular rather than the unusual practice." Garden Homes Management, Corp., 156 F. Supp.2d at 420 (citing Int'l Brotherhood of Teamsters v. United States, 431 U.S. 324, 336 (1977)). However, it is also clear that proof of isolated, accidental or sporadic instances of discrimination are insufficient to prove a pattern or practice claim under the Fair Housing Act. Id.; see also US. v. Balistrieri, 981 F.2d 916, 929 (7th Cir. 1992).

As stated earlier, in the instant action Edmonds Construction was involved in the construction of Lawton Apartments, Jade Village II Apartments, and Grayling Place Apartments. Edmonds Aff. ¶ 2.

In the past, the Government has focused on race discrimination in pursuing a "pattern or practice" action pursuant to 42 U.S.C. § 3614 (a). See, e.g., Balistrieri, 981 F.2d 916; Garden Homes Management, 156 F. Supp.2d 413.

For example in Garden Homes, the housing discrimination action involved three apartment complexes. To test for discrimination, the Government instructed an African-American tester to inquire about the availability of housing at the subject properties, only to be informed that housing was not available. Within twenty-four hours, a white tester went to the subject properties, made the same inquiry, and was told that housing was available. In the span of one month, the Government tested the subject property three times and consistently found that black testers were treated differently than white testers,

Based on the above findings, the court in Garden Homes concluded that the Government's evidence created a genuine issue of material fact, 156 F. Supp.2d at 421. The court in Garden Homes went on to state:

While in the abstract, three fair housing tests might not necessarily reflect [the defendants'] rental practices, the tests at issue are particularly probative. They all occurred within one month and yielded virtually identical results. The time and uniform results of these tests give rise to a permissible inference that racial discrimination is not a sporadic event but, instead, is part of the way that [the defendants] do business.

Id.

In Garden Homes, the court recognized that "there is no threshold number of incidents that must occur before the Government may initiate litigation" as "each case must turn on its own facts." U at 420 (quoting United States v. Bob Lawrence Realty, Inc., 474 F.2d 115, 123-24 (5th Cir. 1973)). As a result, the court in Garden Homes stated that "[w]hether the evidence presented demonstrates a pattern or practice is ordinarily a question of fact for the jury." Id. (citing Balistrieri, 981 F.2d at 930 (7th Cir. 1992)); see also United States v. Harrison, 188 F. Supp.2d 77 (D. Mass. 2002) (recognizing that "[t]he question of whether a pattern or practice exists is a factual determination made by the finder of fact").

After conducting its own extensive independent legal research, the Court has concluded there is precious little case authority that provides guidance to the Court in evaluating "pattern or practice" issues in 42 U.S.C. § 3614(a) actions. The Court was unable to find, nor have the parties cited, any case law which discusses the type of conduct required in order to establish a pattern or practice in the design and construction context. After analyzing the facts and applying what limited law exists, the Court concludes that the issue of whether the Edmonds Defendants engaged in a pattern or practice of discrimination with respect to their role in constructing three of the five subject properties is a question of fact. Accordingly, the Edmonds Defendants' Motion for Summary Judgment on these factual issues should be denied.

2. Civil Penalties

Pursuant to the Fair Housing Act, the court may access civil penalties in an amount not exceeding $50,000 for a first violation and in an amount not exceeding $100,000 for any subsequent violation. 42 U.S.C. § 3614 (d)(1)(C)(i)-(ii). The Edmonds Defendants assert that in order to assess civil penalties, intentional discrimination must be found. Citing Hispanics United Dupuge County v. Village of Addison, Illinois, 958 F. Supp. 1320, 1332 (N.D. Ill. 1997). As will be discussed below, the Court interprets Village of Addison in a different light than do the Edmonds Defendants.

In regard to knowledge and intent to discriminate, Wirt Edmonds averred that "I had no idea that there was a federal law that I had to comply with regarding the design and construction of the apartment complexes separate and apart from obtaining approval from the City of Boise and complying with the City's requirements." Edmonds Aff. ¶ 9. Further, Edmonds averred that "I had never heard of the Fair Housing Act or any federal design and construction requirements for accessibility." Id. Similarly, Edmonds also averred that "[a]t no time did the government inform me of the Fair Housing Act, provide me with any educational materials regarding the act, or notify me of a training seminar or educational presentation regarding the Fair Housing Act." Edmonds Reply Aff. ¶ 3 (Docket No. 100).

While the record demonstrates that certain plan review documents for some of the apartment complexes made reference to one accessible unit pursuant to ANSI A117.1, it also establishes that the Edmonds Defendants were not aware of accessibility requirements pursuant to the Fair Housing Act at the time their apartment complexes were constructed. Thus, the issue before the Court is whether the lack of intent on the part of the Edmonds Defendants to violate the Fair Housing Act should preclude Plaintiffs claims for civil penalties.

In Village of Addison, the defendant municipality moved for summary judgment on the plaintiffs claims for punitive damages and civil penalties. Relying on Smith Lee Associates, Inc. v. City of Taylor Michigan, 13 F.3d 920 (6th Cir. 1993), the court in Village of Addison recognized that "in cases of intentional discrimination, civil penalties against municipalities are `especially appropriate.'" 958 F. Supp. at 1332. However, the court in Village of Addison declined to grant the defendant's motion for summary judgment, instead deciding to "hear all the plaintiffs evidence before reconsidering the claims for punitive damages and civil penalties." Id. at 1333.

After carefully reviewing Village of Addison, this Court does not interpret that decision to stand for the proposition that in order to assess civil penalties, intentional discrimination must be found. After conducting its own independent legal research, the Court was unable to locate any case authority that holds that a finding of intentional discrimination is a prerequisite to the imposition of civil penalties. The plain language of the Fair Housing Act does not specifically mention intent, but instead states that the court "may, to vindicate the public interest, assess a civil penalty against the respondent." 42 U.S.C. § 3614(d)(1)(C).

As stated by the House Judiciary Committee:

When determining the amount of a penalty against a defendant the court should consider the nature and circumstances of the violation, the degree of culpability, any history of prior violations, the financial circumstances of that defendant and the goal of deterrence, and other matters as justice may require.

House Comm. on the Judiciary, Fair Housing Amendments Act of 1988, H.R. Rep. No. 711, 100th Cong., 2d Sess. 18, reprinted in 1988 U.S.C.C.A.N. 2173, 2201; see also United States v. Oak Manor Apartments, 11 F. Supp.2d 1047, 1054 (E.D. Ark. 1998).

As stated above, there is limited case authority addressing damages in design and construction violation actions under the Fair Housing Act. In Rommel II, the court discussed the builder's liability for Fair Housing Act violations of a three-story condominium complex. Similar to the instant action, the defendants in Rommel II argued that certain damages requested by the plaintiffs should be prohibited as a matter of law. The court concluded that "[a]t this juncture in the case, the Court finds the issues relating to damages are largely a matter of disputed fact and more appropriate for resolution by the fact finder. . . . Accordingly, the Court will deny defendants' motion on all damages issues." 40 F. Supp.2d at 709.

In light of the foregoing, the Court concludes that since Plaintiff need not show intentional discrimination to assert a claim for civil penalties, the issue of the amount of damages is an issue to be resolved by the trier of fact. Id. The Court notes that the Edmonds Defendants argue that civil penalties are inappropriate in light of the factors enumerated by the House Judiciary Committee. However, as clearly stated by the House Judiciary Committee, the listed factors are to be considered "[w]hen determining the amount of a penalty," 1988 U.S.C.C.A.N. at 2201 (emphasis added), not a determination of whether a civil penalty should be imposed at all. The Court concludes that in order to determine whether a civil penalty should be imposed, and the amount thereof, the Court would have to weigh evidence, which is not the role of the Court in summary judgment proceedings. Thus, the Edmonds Defendants' Motion for Summary Judgment should be denied in this respect.

3. Punitive Damages

Unlike 42 U.S.C. § 3613(c)(1) which specifically states that a court may award punitive damages in a private cause of action, 42 U.S.C. § 3614(d)(i)(B) does not specifically state that punitive damages are an available remedy in actions brought by the government. Rather, pursuant to this section, a court "may award such other relief as the court deems appropriate. including monetary damages to persons aggrieved."

It is well settled that "the assessment of punitive damages under the Fair Housing Act is governed by federal rather than state law." Badami v. Flood, 214 F.3d 994, 997 (8th Cir. 2000) (citing Big D Ent., 184 F.3d at 932). Further, it is well established that punitive damages are only appropriate "when the defendant's conduct is shown to be motivated by evil motive or intent, or when it involves reckless or callous indifference to the federally protected rights of others." Id. (citing Smith v. Wade, 461 U.S. 30. 56 (1983)).

As the court in Badami recognized, the Supreme Court of the United States recently addressed the meaning of the terms "malice" and "reckless indifference" as they relate to the standard for punitive damages in the Title VII context. Id. (citing Kolstad v. Am. Dental Assoc., 527 U.S. 526 (1999)). In Kolstad, the Court stated that "`malice' or `reckless indifference' pertain to the (defendant's] knowledge that it may be acting in violation of federal law, not its awareness that it is engaging in discrimination." 527 U.S. at 535. The Court in Kolstad further explained that although conduct justifying a punitive damages award is sometimes characterized as egregious or outrageous, it "is not to say that [the defendant] must engage in conduct with some independent, `egregious' quality before being subject to a punitive award." Id. at 538.

The court in Badami recognized that "[a]lthough Kolstad concerned punitive damages in a Title VII employment discrimination case . . . we believe that the same standard for punitive damages applies in the Fair Housing Act context." 214 F.3d at 997 (citing Alexander v. Riga, 208 F.3d 419 (3d Cir. 2000)). The Sixth Circuit has also adopted this reasoning and standard for punitive damages. Preferred Properties, Inc. v. Indian River Estates, Inc., 276 F.3d 790, 800 (6th Cir. 2002). Thus, in the absence of Ninth Circuit case law to the contrary, this Court is of the view that the question regarding the availability of punitive damages is whether "the defendants acted with malice or reckless indifference that their actions might violate a federal statute of which they were aware." Badami, 214 F.3d at 998.

In the instant action, there is absolutely no evidence in the record whatsoever that any of the Defendants acted with malice or reckless indifference that their actions might violate a federal statute of which they were aware. The Court has thoroughly reviewed and studied the record and concludes that there is no evidence even suggesting conduct which would give rise to a claim for punitive damages. Wirt Edmonds averred that he was unaware of the Fair Housing Act at the time of the Edmonds Defendants' involvement with the Lawton Apartments, Grayling Place Apartments, and Jade Village II. Edmonds Aff. ¶ 9; Edmonds Reply Aff. ¶ 3. Thus, although ignorance of the law is insufficient to defeat liability under the Fair Housing Act, Morgan v. Sec'y of Housing and Urban Development, 985 F.2d 1451, 1461 (10th Cir. 1993), the Court concludes that the evidence contained in the record does not establish in any manner the type of conduct that is required to support an award for punitive damages. Accordingly, the Edmonds Defendants' Motion for Summary Judgment should be granted in this respect.

4. Personal liability of Will and Francis Edmonds

According to the record, Win Edmonds was the owner and employee of Edmonds Construction. Edmonds Aff. ¶ 2. Francis Edmonds is also named as a defendant, but Wirt Edmonds avers his wife "has never been personally involved in the construction business and had no direct or indirect involvement in the construction of the apartment complexes at issue in this lawsuit." Id. ¶ 3. The Edmonds Defendants argue that the corporate identity of Edmonds Construction cannot be ignored to impose individual liability on Mr. and Mrs. Edmonds for the construction work of the corporation.

As the Ninth Circuit has recognized, the Fair Housing Act "does not limit or define who can be sued for discriminatory housing practices." Holley v. Crank, 258 F.3d 1127, 1130 (9th Cir. 2001); see also Baltimore Neighborhoods, Inc. v. Rommel Rudders, Inc., 3 F. Supp.2d 661, 664 (D. Md. 1998) (" Rommel I").

In Holley, the court addressed the issue of whether owners and officers of corporations may be held vicariously liable for an employee's violations of the Fair Housing Act. in its analysis, the court in Holley cited a HUD regulation which provided:

A complaint may also be filed against any person who directs or controls, or has the right to direct or control, the conduct of another person with respect to any aspect of the sale . . . of dwellings or the provision of brokerage services relating to the sale of dwellings if that other person, acting within the scope of his or her authority as employee or agent of the directing or controlling person, is engaged, has engaged, or is about to engage, in a discriminatory housing practice.

Id. (citing 24 C.F.R. § 103.20).

In considering this HUD regulation, the court in Holley reasoned that the owner and officer of the corporation was potentially liable. Id. at 1131. Although the court in Holley recognized that corporate officers and shareholders are generally shielded from personal liability, "where common ownership and management exists, corporate formalities must not be rigidly adhered to when inquiry is made of civil rights violations," Id. at 1133-34 (citing City of Chicago v. Matchmaker Real Estate Sales Center, Inc., 982 F.2d 1086, 1098 (7th Cir. 1992)). The court in Holley went on to state:

Under relevant HUD regulatory history, and because the duty not to discriminate is a non-delegable one, we join other courts in holding that officers can be individually liable for discriminatory acts of' corporate employees under their management and control.

Id. at 1134.

It is clear in the Ninth Circuit that officers of a corporation can be individually liable for discriminatory acts of their employees. However, Plaintiff is not attempting to hold Mr. and Mrs. Edmonds personally liable for the acts of one of Edmonds Construction's employees under their management and control, but rather seeks imposition of personal liability for these individual's personal participation in the construction of the complexes.

Although this precise issue has not been directly addressed by the Ninth Circuit Court of Appeals, a federal district court in Montana has addressed a situation analogous to the instant action. Montana Fair Housing. Inc. v. American Capital Dev., Inc., 81 F. Supp.2d 1057, 1063 (D. Mont. 1999). In Montana Fair Housing, the plaintiff brought an action against the architect, builder and owners for the failure to design and construct a housing project with specified features required by the Fair Housing Act. In that case, the named defendants were business entities, as well as individuals, two of which were partners in a named business entity and actively participated in the development, design, construction, and management of one of the buildings. Id. at 1059. In its discussion concerning the defendants' liability, the court in Montana Fair Housing recognized that the two individuals referenced "are behind each of these corporate veils" as the individuals are the ones that designed, constructed, managed, and continued to profit for the project. Id. at 1068-69.

Relying on Rommell I, the court in Montana Fair Housing recognized that "design and construction language [of the FHA] should be read broadly." Id. at 1069 (citing Rommel I, 3 F. Supp.2d at 665). The court in Montana Fair Housing concluded that "[w]hen a group of entities enters into the design and construction of a covered dwelling, all participants in the process as a whole are bound to follow the FHA. . . . In essence, any entity who contributes to a violation of the FHA would be liable." Id. (citing Rommel I, 3 F. Supp.2d at 665). As a result, the court in Montana Fair Housing determined that the named parties were proper defendants.

According to the record, Mr. and Mrs. Edmonds owned the land upon which Grayling Place and Jade Village were built. Plaintiff's Response to Summary Judgment, Exs. L. M, N (Docket No. 84). Wirt Edmonds averred that "[w]hen he was involved in the construction of the apartment complexes, it was in my capacity as an owner/employee of Edmonds Construction, Inc." Edmonds Aff. ¶ 2. Additionally, the record demonstrates that in some cases, he participated in the construction process. Wirt Edmonds Depo. p. 24 ( Plaintiff's Response to Summary Judgment, Ex. T).

As to Mrs. Edmonds, Mr. Edmonds averred that his wife "has never been personally involved in the construction business and had no direct or indirect involvement in the construction of the apartment complexes at issue in this lawsuit." Edmonds Aff. ¶ 3. Although the record demonstrates that Mr. and Mrs. Edmonds personally helped secure the loans which funded the construction of Grayling Place Apartments, Plaintiff's Response to Summary Judgment, Ex. Q, R, S, the record does not support a conclusion that Mrs. Edmonds played any significant role in these projects.

In light of the foregoing, the Court concludes that Mrs. Edmonds should not be subjected to personal liability under the Fair Housing Act for the corporation's participation in the Lawton Apartments, Jade Village II, and Grayling Place Apartments. The general rule that individuals cannot generally be liable for acts of the corporation should apply here, and Mrs. Edmonds should be dismissed as a Defendant in this action. The Court recognizes that a federal district court has held that "corporate formalities must not be rigidly adhered to when inquiry is made of civil fights violations." Holley, 258 F.3d at 1134. However, under the circumstances existing here, and in light of existing case law, the Court concludes that there is insufficient evidence to assert a cause of action under the Fair Housing Act against Mrs. Edmonds. Accordingly, the Edmonds Defendants' Motion for Summary Judgment should be granted to the extent that the action should be dismissed as against Francis Edmonds.

However, a different conclusion should be reached as to Mr. Edmonds. If officers can be held personally liable for actions of employees as contemplated by the Ninth Circuit in Holley v. Crank, a logical extension of that rationale would read to the conclusion that if an officer was personally involved in the discriminatory project, he or she would likewise be individually liable and not protected by the corporate veil. It is undisputed that Mr. Edmonds was actively involved in the development and construction of three of the five projects involved in this action and he may be individually liable depending on the facts and circumstances presented at trial. At this time there remain genuine issues of material fact and the Edmonds Defendants' Motion for Summary Judgment as to Mr. Edmonds should be denied.

D. Capstone's Motion for Summary Judgment (Docket No. 89)

In addition to the issues discussed in Part II (B), Capstone makes arguments for dismissal similar to those made by the Edmonds Defendants as discussed in Part II (C).

1. Pattern or Practice

As discussed above, in the context of racial discrimination, proof of isolated, accidental or sporadic instances of discrimination are insufficient to prove a pattern or practice claim under the Fair Housing Act. See, e.g., Balistrieri, 981 F.2d at 929. Capstone argues it should be dismissed from the instant action because its limited involvement with Jade Village II does not establish a "pattern or practice" of discrimination.

According to the record, Capstone was hired by Pinnacle Engineers to perform architectural design services for Jade Village II. Affidavit of John Costner ¶ 3 (Docket No. 89). Costner averred these architectural services were limited to "designing boilerplate floor plans." Id. ¶ 4. Costner argues that Capstone's involvement in a single project does not establish a "pattern or practice" of discrimination, and thus it cannot be liable. Further, the record indicates that Costner was not involved with the construction of Jade Village II. Costner Depo., p. 47 ( Plaintiff's Memorandum in Opposition to Summary Judgment, Ex. C) (Docket No. 108). In fact, Costner averred that by August of 1995, "I was no longer involved in any aspect of the design or construction of Jade Village II." Costner Aff. ¶ 7.

As discussed above, in the context of racial discrimination, the court in Garden homes recognized "there is no threshold number of incidents that must occur before the Government may initiate litigation" as "each case must turn on its own facts." 156 F. Supp.2d at 420 (quoting United States v. Bob Lawrence Realty, Inc., 474 F.2d 115, 123-24 (5th Cir. 1973)). As a result the court in Garden Homes stated that "[w]hether the evidence presented demonstrates a pattern or practice is ordinarily a question of fact for the jury." Id.

With respect to Capstone, the issue presented is somewhat different than the Edmonds Defendants' motion. As opposed to being involved with three of the complexes at issue, as were the Edmonds Defendants, it is undisputed that Capstone was only involved in the construction of one complex. As such, the Court views Capstone's involvement as relates to a pattern or practice as a much different question.

In support of its motion, Capstone relies on Sperling v. Hoffman-La Roche, Inc., 924 F. Supp. 1346 (D.N.J. 1996) wherein the court granted summary judgment to an employer regarding the plaintiffs pattern or practice claim under Title VII. In Sperling, the court found that no reasonable jury could find a pattern or practice violation of the ADEA for the defendant's "one-shot" program to reduce the workforce. Id. at 1364. Likewise, in another Title VII case, Paulos-Johnson v. Advocate Trinity Hospital, 2002 WL 230783 (N.D. Ill. 2002), the court found that the plaintiff's statistical evidence relating to the termination of the only two non-African-Americans on one shift in one department did not establish a pattern or practice of discrimination.

The Court recognizes that the above cases address circumstances of a pattern or practice of discrimination in the context of a Title VII action, however, the reasoning is persuasive as to an analysis of the issues presented in this instant action.⁷ As discussed above, it is undisputed that Capstone was involved in only a one-time architectural design for Jade Village II. In the Court's view, Capstone's involvement was an isolated instance as contemplated by the court in U.S. v. Balistrieri. Although the Court recognizes that other courts have determined that the issue of pattern or practice discrimination is a question of fact in the context of the Fair Housing Act, this Court is of the view that no reasonable jury could find a pattern or practice violation for Capstone's one time, isolated involvement in Jade Village II. Accordingly, the Court concludes that Capstone's Motion for Summary Judgment should be granted on the "pattern or practice" issue.

7 The Court notes that Capstone also cites the case of United States v. Bob Lawrence Realty, Inc., 313 F. Supp. 870 (N.D. Ga. 1970) for the proposition that the Court can determine on summary judgment that Capstone did not engage in a pattern or practice of discrimination. However, the Court has carefully reviewed the decision in Bob Lawrence and finds that the decision does not support this proposition.

However, notwithstanding the above, the inquiry as to Capstone does not end here. The language of 42 U.S.C. § 3614(a) provides that the Attorney General may bring suit based on a pattern or practice of discrimination or when "any group of persons has been denied any of the rights granted by this subchapter and such denial raises an issue of general public importance." See also United States v. Hunter, 459 F.2d 205 (4th Cir. 1972).

In Hunter, the court addressed a situation where the Government brought an action to enjoin a newspaper from publishing rental housing advertisements which were allegedly discriminatory. After trial, the district court denied the requested injunction because the Government did not prove "either that a pattern or a practice of resistance existed or that the case raised an issue of general public importance." Id. at 210.

In reviewing the district court's ruling, the Fourth Circuit reasoned that the language of § 3613 of the 1968 Fair Housing Act (the precursor to § 3614 of the 1988 Amendment to the Fair Housing Act) demonstrates:

Congress did not wish the Attorney General to enforce private civil rights created by the Act unless a specific violation has a measurable public impact in that it is either one of a pattern or practice of resistence or a case raising an issue of general public importance. If neither prerequisite for relief existed, a district court would be required to refuse the relief sought by the Attorney General.

Id. at 217.^5a

5a This Court notes that the court in Hunter addressed the Fair Housing Act as it existed in the 1968 Fair Housing Act. Under the 1968 Fair Housing Act, the Attorney General could assert a cause of action pursuant to 42 U.S.C. § 3613. Since the amendment to the Fair Housing Act in 1988, this provision is found in 42 U.S.C. § 3614. However, a review of these statutes reveals that substance of these statutes are substantially similar.

The court in Hunter determined that the district court did not err by concluding that a pattern or practice of discrimination did not exist. Id. However, the court in Hunter "emphatically" disagreed with the district court's conclusion that the Government failed to establish the alternative basis upon which relief could be granted — a case raising "an issue of general public importance." Id. As such, the court in Hunter held that the circumstances of the case raised an issue of general public importance and there was a "solid framework for granting relief under the Act." Id. at 218.

In reaching its decision, the court in Hunter recognized that the term "case of general public importance" is not defined in either the 1968 Fair Housing Act or in its legislative history. However, the court in Hunter concluded that since the 1964 Civil Rights Act uses the "nearly identical term . . . in empowering the Attorney General to intervene in private suits," the definition was applicable with respect to the Fair Housing Act. Id. at 217-18. In the legislative history of the 1964 Act a case of general public importance was defined as one where "the points of law involved in it are of major significance or . . . the particular decision will constitute a precedent for a large number of establishments." Id. at 218 (quoting 110 Cong. Rec. 12713 (June 4, 1964)). Under the facts of that case, the court in Hunter concluded it was a "case of general public importance" and the district court was "clearly in error" for determining otherwise.^6a Id. Nevertheless, the court in Hunter affirmed the district court's denial of an injunction because the "result ultimately reached was lawful and comported with the facts of the case." Id. at 221.

6a The court in Hunter noted that in contrast to the 1964 Civil Rights Act, "a pattern or practice of resistence is not an indispensable prerequisite for relief" Id. at 218 n. 17. Rather, the court in Hunter stated that "[r]elief may be based on a single (unintentional) violation of the Act when by that violation a group of persons are denied their statutory rights and the case raises an issue of public importance." Id.

The Court is of the opinion that Hunter provides guidance and a helpful discussion of the enforcement authority of the Attorney General when a case is of "general public importance." Thus, by the clear language of § 3614(a), and after considering the Hunter court's discussion of the analogous section of the 1968 version of the Fair Housing Act, the Court concludes Capstone may be liable even it' it did not engage in a pattern or practice of discrimination if Plaintiff can establish it is a case of "general public importance." In the Court's view, for purposes of summary judgment, such is the case here. Accordingly, Capstone's Motion for Summary Judgment should be granted on the "pattern or practice" issue and denied on the "public importance" issue.

2. Civil Penalties

According to the record, when Capstone designed the floor plans for Jade Village II, Costner followed the ADA Guidelines. Costner Depo., pp. 33-34. Costner testified that when he "first started the project" he was told by Brian Smith of Pinnacle Engineering that the ground-floor units were exempt from the accessibility requirement. Id. Thereafter, Costner altered his design plans to make the project as inexpensive as possible. Id. at 34-35.

Further, Costner testified that he was not aware of HUD's Fair Housing Guidelines at the time he was designing Jade Village II. Id. at 82-83. Costner also testified that he is familiar with ANSI, but did not use them in his design because he "did not even have a copy of the ANSI standards until recently." Id. at 83.

As discussed above, with respect to the Edmonds Defendants, the Court concluded that a defendant need not intentionally discriminate in order for the Court to assess civil penalties, and that is an issue of fact. Accordingly, Capstone's Motion for Summary Judgment should be denied in this respect.

3. Punitive Damages

Likewise, as discussed above, the Court concluded that the question regarding the availability of punitive damages is whether "the defendants acted with malice or reckless indifference that their actions might violate a federal statute of which they are aware." Badami, 214 F.3d at 998.

With respect to Capstone, the record does not establish whether or not Costner was aware of the Fair Housing Act and its accessibility standards. Although Costner testified that he knew of the ADA guidelines for accessibility, the Court concludes that the record contains absolutely no evidence whatsoever that Capstone acted with malice or reckless indifference that its actions might violate the Fair Housing Act. Accordingly, Capstone's Motion for Summary Judgment should be granted as to Plaintiffs claim for punitive damages.

E. Teal-Whitworth's Motions for Summary Judgment (Docket Nos. 72 and 95)

Similar to Capstone, in addition to the issues discussed in Part II (B), Teal-Whitworth makes the same arguments for dismissal as do the Edmonds Defendants.

1. Pattern or Practice

According to the record, Teal-Whitworth prepared the plans for the Lawton Apartments, Affidavit of Gerald Teal ¶¶ 2-3, but was not involved with the construction of the Lawton Apartments. Id. ¶ 4.

Similar to Capstone, Teal-Whitworth's involvement with the complexes at issue was limited as it was only involved with one of the complexes. For reasons discussed in Part II (D) above, the Court concludes that the claim against Teal-Whitworth based upon a pattern or practice of discrimination should be dismissed. However, for the reasons stated in the preceding section, even if Teal-Whitworth's involvement does not amount to a pattern or practice, it may still be liable under the Fair Housing Act for the denial of rights that raises an issue of general public importance. 42 U.S.C. § 3614(a). Accordingly, Teal-Whitworth's Motions for Summary Judgment should be granted on the "pattern or practice" issue, and denied on the "public importance" issue.

2. Civil Penalties

According to the record, Gerald Teal testified that when he was designing Lawton Apartments, he was aware of the ADA accessibility requirements. Teal Depo., p. 51 ( Plaintiff's Memorandum in Opposition to Summary Judgment) (Docket No. 91). However, Teal testified that he did not have a copy of the Fair Housing Act guidelines or design manual and "can't say [he] was specifically aware of the Fair Housing Act at that time." Id.

As discussed above, the Court concludes that it is not necessary for a defendant to intentionally discriminate in order for the Court to assess civil penalties, and that is an issue of fact. Accordingly, Teal-Whitworth's Motion for Summary Judgment should be denied in this respect.

3. Punitive Damages

As discussed above, the Court concludes that the question regarding the availability of punitive damages is whether "the defendants acted with malice or reckless indifference that their actions might violate a federal statute of which they are aware." Badami, 214 F.3d at 998.

According to the record, although Teal knew about the ADA accessibility requirements, there is no evidence whatsoever in the record that Teal-Whitworth knew about the Fair Housing Act or, more importantly, acted in a malicious or reckless manner. in the Court's view, based on the evidence in the record, Teal-Whitworth's conduct or actions do not rise to the level necessary to impose punitive damages, and its Motion for Summary Judgment should be granted as to Plaintiffs claim for punitive damages.

F. The PNE Defendants' Motion for Summary Judgment (Docket No. 92)

In addition to the issues discussed in Part II (B), the PNE Defendants make arguments for dismissal similar to those made by the Edmonds Defendants. Further, the PNE Defendants argue that Plaintiff must demonstrate an intent to discriminate in order to assert a cause of action under § 3614(a).

1. Pattern or Practice

In support of their proposition that Plaintiff must demonstrate an intent to discriminate, the PNE Defendants cite the Ninth Circuit cases Keith v. Volpe, 858 F.2d 467 (9th Cir. 1988) and Armendariz v. Penman, 31 F.3d 860 (9th Cir. 1994), vacated in part on other grounds, 75 F.3d 1311 (9th Cir. 1996).

In Volpe, the court analyzed a situation of alleged racial discrimination under the Fair Housing Act. Initially, the court in Volpe stated that "[t]o establish a prima facie case of withholding of housing for an unlawful reason under the Act, a plaintiff must show at least that the defendant's actions had a discriminatory effect." 858 F.2d at 482 (citations omitted). The court in Volpe went on to explain that "[d]iscriminatory effect means that `the conduct of the defendant actually or predictably results in racial discrimination. . . . The plaintiff need make no showing whatsoever that the action resulting in racial discrimination . . . was racially motivated.'" Id. (quoting United States it City of Black Jack, 508 F.2d 1179, 1184-85 (8th Cir. 1974)). The court in Volpe went on to explain:

This circuit has not decided whether discriminatory effect alone is sufficient to establish a prima facie case. See Halet v. Wend Investment Co., 672 F.2d 1305 (9th Cir. 1982). The circuits that have addressed the issue have reached different conclusions. The Third and Eighth Circuits hold that proof of discriminatory effect alone is always sufficient to establish a violation of the Fair Housing Act.

Id.

The court in Volpe found a violation of the Fair Housing Act under either standard. Subsequently, in Armendariz, the Ninth Circuit analyzed a situation where city officials had closed certain housing projects purportedly to relocate criminals and reduce crime. These actions were referred to as "sweeps." The plaintiffs in Armendariz alleged that such action violated their rights under the Fair Housing Act because it had a disparate impact on minorities. However, the Ninth Circuit Court of Appeals concluded:

Because plaintiffs have not alleged that the sweeps would have had an impact on fewer minorities in other communities and because plaintiffs have not alleged that the sweeps were conducted with the intent to discriminate against any minorities, they have not alleged sufficient facts to state a claim for a violation of the Fair Housing Act.

31 F.3d at 868-69 (citing Volpe, 858 F.2d 467).

The PNE Defendants assert that in light of the decision in Armendariz, the Ninth Circuit requires that Plaintiff establish that Defendants had an intent to discriminate in order to be liable under the Fair Housing Act. The Court disagrees.

In the Court's view, there is no indication from reading Armendariz that the Ninth Circuit adopted an intent to discriminate standard. Rather, similar to Volpe. the court in Armendariz denied plaintiffs' claim for relief because the plaintiffs did not allege either a discriminatory effect or intent. Without further guidance from the Ninth Circuit, the Court concludes that a plaintiff is not required to show discriminatory intent in order to assert a Fair Housing Act claim.

After conducting its own independent research, the Court was unable to find case authority from other jurisdictions to establish the proposition that a defendant's intent to discriminate is a prerequisite for a plaintiff to assert a Fair Housing Act claim for alleged design and construction violations. Further, the Court notes that the plain language of the Fair Housing Act does not indicate that a plaintiff must demonstrate an intent to discriminate as a requirement. Accordingly, the PNE Defendants' Motion for Summary Judgment should be denied in this respect.

Further, for reasons discussed above, the Court concludes that the PNE Defendants' Motion for Summary Judgment should be denied inasmuch as a genuine issue of material fact exists as to whether they were engaged in a pattern or practice of discrimination. Alternatively, the PNE Defendants should not be dismissed as a party because they may be liable under the Fair Housing Act for the denial of rights that raises an issue of general public importance. 42 U.S.C. § 3614(a). Accordingly, the PNE Defendants' Motion for Summary Judgment should be denied in this respect.

Further, the PNE Defendants argue that the doctrine of laches bars Plaintiffs claim for injunctive relief. However, "[i]t is well settled that the United States is not `subject to [the] defense of laches in enforcing its rights.'" Harrison, 188 F. Supp.2d at 81 (quoting United States v. Summerlin, 310 U.S. 414, 417 (1940)). Accordingly, the PNE Defendants' Motion for Summary Judgment should be denied in this respect.

3. Civil Penalties

According to the record, Walter Sigmont averred that he was "wholly unaware" of the Fair Housing Act. Sigmont Aff. ¶ 6. Sigmont averred that at no time during the construction phase of the complexes "did anyone indicate anything about the Fair Housing Act or its requirements." Id. ¶ 7. Sigmont farther averred the only thing the City required was that one of the dwellings in the Eagleson Park complex be accessible. Id. ¶ 8. Sigmont averred that he did not become aware of the Fair Housing Act until he was notified that a complaint had been filed against him in 1998. Id. ¶ 18.

As discussed above, the Court concludes that a defendant need not intentionally discriminate in order for the Court to assess civil penalties and that is an issue of fact. Accordingly, the PNE Defendants' Motion for Summary Judgment should be denied in this respect.

4. Punitive Damages

Similar to the other Defendants, the PNE Defendants argue that punitive damages are not warranted in the instant action. The Court agrees. In light of the malice and reckless indifference requirement necessary to award punitive damages, the Court concludes that the evidence in the record does not support such a claim against the PNE Defendants. The Court finds, and thus concludes, that Plaintiff has not submitted any evidence that the PNE Defendants knew of the requirements of the Fair Housing Act or, more importantly, acted with malice or reckless indifference in constructing these apartment units. Accordingly, the PNE Defendants' Motion for Summary Judgment should be granted as to Plaintiffs claim for punitive damages.

5. Personal Liability of Walter and Ruth Sigmont

According to the record, PNEI is owned by Mr. and Mrs. Sigmont. Sigmont Depo., p. 22. Walter Sigmont is the secretary and treasurer of PINE and Mrs. Sigmont is the president of the corporation. Sigmont Aff. ¶ 2. Walter Sigmont also testified that Mrs. Sigmont is "the director of administration," and he is the "director of operations." Id. at 22-23. Although PNEI was involved with the construction of all five complexes, Mr. Sigmont averred "[a]t no time were either me or my wife as individuals, outside of PNEI, involved in the construction of any apartment complex." Id. ¶ 4. However, in his deposition, Mr. Sigmont did testify he would "try to get by [Grayling Place] once a day" during its construction. Sigmont Depo., p. 158.

Further, a review of the record demonstrates that Mr. and Mrs. Sigmont owned Eagleson Park prior to and during construction, obtained financing to construct it, and transferred it to PNEI before the buildings were sold. Plaintiff's Statement of Facts in Support of Summary Judgment, Exs. 10-15 (Docket No. 103). The record contains evidence of similar involvement with Imperial Court, Grayling Place, and Jade Village II. See, e.g., Exs. 1-17, 36, 46, 48. 53-58.

As discussed in Part II (C)(4), supra, the Court concluded that Mrs. Edmonds was not personally involved except through the corporation, even though Mr. Edmonds was personally involved. The record demonstrates that the Sigmonts at all times acted through the PNEI corporate entity. However, the record also indicates that Mrs. Sigmont was the President of PNEI and was personally and actively involved in the construction business, and in these projects, along with her husband. As noted in the case of Mr. Edmonds, if officers can be held personally liable for actions of employees as contemplated by the Ninth Circuit in Holley v. Crank, a logical extension of that rationale would lead to the conclusion that if an officer was personally involved in the discriminatory project, he or she would likewise be individually liable and not protected by the corporate veil. The record is clear that both Mr. and Mrs. Sigmont were actively involved in the development, financing and construction of the projects involved in this action. In fact, they owned the Eagleson Park property personally until conveyed to PNEI after it was incorporated.

In light of the foregoing, the Court concludes there is a genuine issue of material fact as to whether Walter and Ruth Sigmont's involvement was sufficient to subject them to liability under the Fair Housing Act for their participation in the complexes at issue in the instant action. The general rule is that individuals cannot generally be liable for acts of the corporation, however, the Court also recognizes that "corporate formalities must not be rigidly adhered to when inquiry is made of civil rights violations," Holley, 258 F.3d at 1134, and that the duty to not discriminate is non-delegable and officers can be individually liable for discriminatory acts of corporate employees, or their own acts as officers and employees of the corporation.

In the Court's view, the evidence in the record is such that a genuine issue of material fact exists as to the actions of Mr. and Mrs. Sigmont individually. Accordingly, the PNE Defendants' Motion for Summary Judgment seeking dismissal of Walter and Ruth Sigmont should be denied.

G. Plaintiff's Motion for Summary Judgment (Docket No. 101)

1. Plaintiff's Motion for Summary Judgment as it Relates to Third-Party Defendants Pinnacle and Tealey

As a preliminary matter, the Court points out that Plaintiff moved for summary judgment against all Defendants, and as to Third Party Defendants Tealey's Land Surveying and Pinnacle Engineers.

Pursuant to Fed. K. Civ. P. 56(a), "[a] party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory judgment may . . . move with or without supporting affidavits for a summary judgment in the party's favor upon all or any part thereof." In the instant action, Pinnacle argues that because Plaintiff has not asserted a claim against it, summary judgment is improper.

As discussed in this Court's Order dated August 26, 2002 (Docket No. 194), the Edmonds Defendants filed a third-party complaint against Pinnacle Engineers ("Pinnacle"), John Badiola, and Loren Williams d/b/a Williams and Associates alleging they had provided services for the design and construction of Jade Village II. (Docket No. 19). The Edmonds Defendants assert that to the extent they are found liable for any claim of Plaintiff with respect to lade Village II, they are entitled to contribution and indemnity. Edmonds Defendants' Third Party Complaint ¶ 9.

On February 6, 2002, the PNE Defendants filed a third-party complaint against Pal Tealey d/b/a Tealey's Land Surveying ("Tealey"), alleging that Tealey had provided services to them in the form of designing exterior facilities at Eagleson Apartments, Grayling Place Apartments, Lawton Apartments, and Imperial Court Apartments. (Docket No. 43). Similar to the Edmonds Defendants' claim, the PNE Defendants seek contribution and indemnity. PNE Defendants' Third Party Complaint ¶ VI.

Pursuant to Fed.R.Civ.P. 14(a), "the plaintiff may assert any claim against the third party defendant arising out of the transaction or occurrence that is the subject matter of the plaintiffs claim against the third party defendant." According to the Advisory Committee Notes to Rule 14, the correct procedure for the plaintiff to assert a claim against a third party defendant is "either by amendment or by a new pleading."

On July 22, 2002, Plaintiff filed a Motion to Amend its Complaint to include as defendants Pinnacle and Tealey. (Docket No. 173). In its August 26, 2002 Order (Docket No. 194), Plaintiffs motion was denied. Other than the claims asserted in the motion to amend, Plaintiff has not asserted claims against Pinnacle and Tealey.

By the clear language of Rule 56, Plaintiff can move for summary judgment on any claim it is asserting in the instant action, however, inasmuch as Plaintiff has not asserted a claim against Pinnacle or Tealey, summary judgment in its favor as to those pates would be inappropriate. Accordingly, Plaintiff's Motion for Summary Judgment as against Pinnacle and Tealey should be denied.

2. Plaintiffs Motion for Summary Judgment as it Relates to Defendants

Plaintiff argues that in light of the undisputed facts of the instant action, trial as to liability is unnecessary. Plaintiff argues that Defendants have failed to comply with the Fair Housing Act's design and construction requirements and thus summary judgment as to liability is proper.

According to the Fair Housing Act, it is unlawful "[t]o discriminate in the sale or rental, or to otherwise make unavailable or deny, a dwelling to any buyer or renter because of handicap. . . ." 42 U.S.C. § 3604 (f). For purposes of the Fair Housing Act, discrimination includes a failure to design and construct multifamily dwellings in such a manner that:

1. The public use and common use portions of such dwellings are readily accessible to and usable by handicapped persons;

2. All the doors designed to allow passage into and within all premises within such dwellings are sufficiently wide to allow passage by handicapped persons in wheelchairs; and

3. All premises within such dwellings contain the following features of adaptive design:

a. An accessible route into and through the dwelling;

b. Light switches, electrical outlets, thermostats, and other environmental controls in accessible locations;

e. Reinforcements in bathroom walls to allow later installation of grab bars; and

d. Usable kitchens and bathrooms such that an individual in a wheelchair can maneuver about the space.

42 U.S.C. § 3604(f)(3)(C).

Further, § 3604(f)(4) states that "compliance with the appropriate requirements of the American National Standard for buildings and facilities providing accessibility and usability for physically handicapped people (commonly cited as "ANSI A117.1") suffices to satisfy the requirements" listed as 3a-d above. See Plaintiff's Statement of Undisputed Facts, Ex. 9 attach. C (Docket No. 103). To provide builders and developers with "technical guidance" on how to comply with the specific accessibility requirements of the Fair Housing Act, HUD adopted the "Fair Housing Accessibility Guidelines" ("Guidelines"). 56 Fed. Reg. 9472-9515 (Mar. 6, 1991) (attached to Plaintiff's Statement of Undisputed Faces, Ex. 9 attach. B). Although the Guidelines are "not to be necessary in compliance with the Act," the purpose of the Guidelines is to describe "minimum standards of compliance with the specific accessibility requirements of the Act" Id. at 9476-77.

As discussed at length above, pursuant to 42 U.S.C. § 3614(a), the Attorney General has authority to commence a cause of action under the Fair Housing Act for a pattern or practice of housing discrimination or when "any group of persons has been denied any of the rights granted by this subchapter and such denial raises an issue of general public importance," Thus, before the Court can address liability under the Fair Housing Act, the Court must first determine whether one of these two prerequisites can be determined as a matter of law.

As discussed above, in denying Defendants' Motions for Summary Judgment, the Court addressed whether Defendants' specific involvement in the design and/or construction phases of the complexes at issue amounted to a pattern or practice of discrimination. In the absence of clear guidance by existing case authority, with the exception of Capstone and Teal-Whitworth, the Court concluded this was an issue of fact most appropriately determined by the jury. Thus, the Court concluded that summary judgment would be improper on this issue.

In light of the foregoing, since the Court concluded that inasmuch as genuine issues of material fact exist with respect to whether Defendants engaged in a pattern or practice of discrimination, this conclusion equally applies to Plaintiff's Motion for Summary Judgment. in the Court's view, it would be inconsistent to conclude there is a genuine issue of material fact with respect to Defendants' motions, but not Plaintiffs Motion for Summary Judgment. Accordingly, Plaintiffs Motion for Summary Judgment should be denied in this respect.

After carefully considering Plaintiffs basis for initiating the instant action and its arguments relating to the pending motions, it is clear that Plaintiffs primary ground for relief is based on an alleged pattern or practice of discrimination. In the alternative, and with little argument, Plaintiff alleges that Defendants are liable under the Fair Housing Act for denying a group of people rights that raises an issue of general public importance.

As discussed earlier, the court in Hunter recognized that even in the absence of a showing of a pattern or practice of discrimination, the Attorney General may assert a cause of action that has a "measurable public impact." 459 F.2d at 217. However, as the Court discussed earlier, since the time of the Fourth Circuit's discussion in Hunter, courts have not substantively discussed this "alternative" method of enforcement.

For example, in Island Park II the court concluded that the Government established a pattern or practice of violation. 888 F. Supp. 419. In addition, the court in Island Park II concluded, again with little discussion, that the defendant's alleged racial discriminatory housing scheme raised an issue of general public importance. Thus, the court in Island Park II concluded that the Government was entitled to summary judgment holding the defendants liable under the Fair Housing Act. Id. at 449-50.

In the context of design and construction cases under the Fair Housing Act, the Court is unaware of any decision in which a court granted summary judgment in the Government's favor on the grounds that the case raised an issue of general public importance. On a motion to dismiss, a federal district court in Illinois reasoned that "it is of course obvious that housing that is inadequately designed and constructed to serve persons with disabilities denies that class of persons rights granted by the Act," and thus the defendants' motion was denied. United States v. Hartz Constr. Co., 1998 WL 42265 (N.D. Ill. Jan. 28, 1998).^7a

7a Only the Westlaw citation is currently available for this case.

In the instant action, the Court is of the view that while Plaintiff may be able to establish that the case presents an issue of public importance, even if it could establish this prerequisite, it is unclear under existing law as to whether Fair Housing Act violations, on their own, are sufficient to establish liability for a cause of action commenced pursuant to 42 U.S.C. § 3614(a). On the other hand, it is clear that in order to prove a pattern or practice of discrimination the Government has the burden to submit more than just proof of discrimination, as it must. show "by a preponderance of evidence that . . . discrimination was the company's standard operating procedure, the regular rater than the unusual practice." See, e.g., Garden Homes, 156 F. Supp.2d at 420.

In the Court's view, it would be inappropriate to grant summary judgment as to liability on the asserted ground that the case presents an issue of public importance. The Court is of the opinion that genuine issues of material fact exist which preclude granting of summary judgment on this issue. Accordingly, Plaintiffs Motion for Summary Judgment as to liability should be denied,

III. RECOMMENDATION

Based on the foregoing, this Court recommends the District Court enter an order as follows:

1. The Edmonds Defendants' Motion for Summary Judgment (Docket No. 67), Defendant Teal-Whitworth's Motions for Summary Judgment (Docket Nos. 72 and 95), Defendant Capstone's Motion for Summary Judgment (Docket No. 86), and the PNE Defendants' Motion for Summary Judgment (Docket No. 92) should be GRANTED IN PART and DENIED IN PART as follows:

a) Plaintiff's claims for punitive damages should be dismissed as to all Defendants and their Motions for Summary Judgment should be granted in that respect.

b) Plaintiffs claims against Francis Edmonds should be dismissed. To this extent, the Edmonds Defendants' Motion for Summary Judgment (Docket No. 67) should be granted.

c) Capstone's Motion for Summary Judgment (Docket No. 86) and Teal-Whitworth's Motions for Summary Judgment (Docket Nos. 72 and 95) should be granted on the "pattern. or practice" issue, but denied on the "public importance" issue.

d) In all other respects, Plaintiffs claims should not be dismissed and Defendants' Motions for Summary Judgment should be denied.

2. Plaintiff's Motion for Summary Judgment (Docket No. 101) should be DENIED.

Written objections to this Report and Recommendation must be filed within ten (10) days pursuant to 28 U.S.C. § 636(b)(1) and Local Rule 72.1 or as a result that party may waive the right to raise factual and/or legal objections in the Ninth Circuit Court of Appeals.