Government Liability Update

Large Housing Developments That Included Low-Income Housing Did Not Violate FEHA or FHA Through Disparate Impact on Minorities

In Aids Healthcare Foundation v. City of Los Angeles (CH Palladium, LLC), published June 15, 2020, the Second District Court of Appeal, Division 3 affirmed dismissal, after demurrer, of a suit against the defendant city for allegedly violating the federal Fair Housing Act and the state Fair Employment and Housing Act.  The plaintiff alleged that the city's approval four separate multi-use housing projects within a one-mile radius in Hollywood would have a disparate impact on minority residents of the area by causing housing prices in the area to rise to the point where existing residents would no longer be able to afford to live there.

The appellate court ruled that the complaint failed to state a cause of action based on a disparate impact theory of liability. The theory requires that a city policy be an artificial, arbitrary, and unnecessary barrier to fair housing.  The approvals create housing.  That alone is not an absolute shield from disparate-impact liability.  But the policies also do not prohibit the construction of affordable housing, and do not physically remove affordable housing to make way for more expensive housing or other uses.  All of the housing projects included low-income housing.  Three of the projects would not displace any existing housing.  The fourth would involve demolishing 84 rent-stabilized units, but would replace them with 105 units restricted for very-low-income households.  Forty of the units will be reserved for former tenants of the demolished building.  Although gentrification might cause owners of existing housing to raise their prices, that would be the act of third parties, rather than the city. The FHA and FEHA cannot be used to force housing authorities to reorder their priorities.  That is what the suit attempted to force the city to do.  Because the plaintiff failed to show how the complaint could be cured by additional specific factual allegations, the trial court acted within its discretion in sustaining the demurrer without leave to amend.

Dismissals without Prejudice for Failure to State a Claim Count as Strikes under Prison Litigation Reform Act

In Lomaz v. Ortiz-Marquez, published June 8, 2020, the Supreme Court rejected an argument that a dismissal for failure to state a claim made without prejudice does not count as a "strike" under the Prison Litigation Reform Act, which bars prisoners from bringing suit in forma pauperis if they have had three or more lawsuits dismissed on the grounds that they were frivolous, malicious, or failed to state a claim on which relief may be granted.  Congress did not confine the strikes under the PRLA to dismissals with prejudice, or to frivolous lawsuits; it applied the statute to suits without merit, even if the dismissal is without prejudice.

Pleading Guilty to Disturbing the Peace Does Not Prevent Plaintiff from Suing under State Law for Excessive Force

In Kon v. City of Los Angeles, published June 1, 2020, the Second District Court of Appeal, Division 8 reversed an order dismissing the plaintiff's suit.  The plaintiff alleged that a police officer accused him of speeding, tackled the plaintiff while he was on the phone, put his knee in the plaintiff's back while the plaintiff was down, hit the plaintiff, and handcuffed him.  The officer alleged that the plaintiff was speeding, refused to provide his driver's license, insurance, and registration, pulled away from the officer's handcuffs and resisted arrest, and required subduing.  The plaintiff was charged with resisting arrest.  He pleaded guilty to disturbing the peace.  He then sued the officer for using excessive force.  He asserted causes of action under Civil Code section 52.1, assault, battery, and negligence.  The trial court dismissed the action because it concluded the allegation of resisting arrest barred his action.

The appellate court ruled the trial court erred.  Under Yount v. City of Sacramento (2008) 43 Cal.4th 885, a criminal conviction bars a subsequent civil suit arising out of the same incident if the allegations in the suit are inconsistent with the conviction.  This rule serves the goals of finality and consistency.  Here, the civil suit is about whether the defendant officer used excessive force.  The criminal case did not address or resolve that issue.  The civil suit therefore is not inconsistent with the conviction.  The civil suit may proceed.