328 F.3d 224 (6th Cir. 2003), 00-2502, Hamad v. Woodcrest Condo. Assn.

Docket Nº:00-2502, 02-1479
Citation:328 F.3d 224
Party Name:Terri L. Hamad et al., Plaintiffs-Appellants, v. Woodcrest Condominium Association et al., Defendants-Appellees.
Case Date:April 22, 2003
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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328 F.3d 224 (6th Cir. 2003)

Terri L. Hamad et al., Plaintiffs-Appellants,

v.

Woodcrest Condominium Association et al., Defendants-Appellees.

No. 00-2502, 02-1479

United States Court of Appeals, Sixth Circuit

April 22, 2003

Argued: March 11, 2003.

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Appeal from the United States District Court for the Eastern District of Michigan at Detroit.

No. 00-72555-John Corbett O'Meara, District Judge.

COUNSEL

ARGUED:

Stephen M. Dane, COOPER & WALINSKI, Toledo, Ohio, for Appellants.

Erik G. Chappell, LYDEN, LIEBENTHAL & CHAPPELL, Toledo, Ohio, for Appellees.

ON BRIEF:

Stephen M. Dane, Janet E. Hales, Meredith L. Mercurio, COOPER & WALINSKI, Toledo, Ohio, for Appellants.

Erik G. Chappell, LYDEN, LIEBENTHAL & CHAPPELL, Toledo, Ohio, for Appellees.

Before: NELSON, COLE, and GILMAN, Circuit Judges.

GILMAN, J., delivered the opinion of the court, in which COLE, J., joined. NELSON, J. (pp. 22-30), delivered a separate dissenting opinion.

OPINION

RONALD LEE GILMAN, Circuit Judge.

Kayla Joyella, Terri L. Hamad, and Akram Hamad brought suit against the Woodcrest Condominium Association, its property manager, and five members of its board of directors, alleging that Woodcrest's bylaws discriminated on the basis of familial status in violation of the Fair Housing Act, 42 U.S.C. §§ 3601-3619. Retaliation claims under the Act were added in an amended complaint. The district court denied Joyella's and the Hamads' Page 229

motions for a preliminary injunction and for summary judgment, granted summary judgment against them on the discrimination claims, and granted judgment as a matter of law against them at the close of their case-in-chief on the retaliation claims. For the reasons set forth below, we REVERSE the judgment of the district court and REMAND the case for further proceedings consistent with this opinion. I. BACKGROUND

Woodcrest, a four-building, three-story condominium development, is located in Monroe, Michigan. In 1997, its bylaws prohibited families with children from purchasing or living in units on the second or third floors. The bylaws further provided that if a child moved in with a second-or third-floor owner, the owner would be fined if he or she did not vacate the unit within one year of the child's arrival.

Terri and Akram Hamad inquired about purchasing a unit in July of 1997. According to the Hamads, property manager Barbara Diedrich told them about the bylaw restrictions and suggested that they purchase a first-floor unit if they "were even thinking about having children." They did in fact purchase a first-floor unit. When they had a child in 2000, they decided to move, despite not being required to do so. They attribute part of their difficulty in selling the unit to the bylaws that restrict children to first-floor condominium units.

Kayla Joyella owns a third-floor unit. She was thinking about becoming the legal custodian of her 15-year-old nephew and had taken preliminary steps toward that end in May of 2000. But the Woodcrest board of directors denied Joyella's request for permission to allow her nephew to move in with her.

In June of 2000, Joyella and the Hamads filed suit in the United States District Court for the Eastern District of Michigan against Woodcrest, property manager Barbara Diedrich, and five members of Woodcrest's board of directors. They challenged the bylaws as a violation of both the Fair Housing Act, 42 U.S.C. §§ 3601-3619, and of Michigan's Elliot-Larsen Civil Rights Act, Mich. Comp. Laws Ann. §§ 37.2101-37.2804. A preliminary injunction was also sought to enjoin enforcement of the bylaws.

Joyella and the Hamads amended their complaint two months later. The amended complaint omitted the earlier state-law cause of action, but added that the defendants had retaliated against Joyella and the Hamads for bringing the original suit under the Fair Housing Act. Both sides moved for summary judgment shortly thereafter. The motion by Joyella and the Hamads was limited to the issue of liability.

In November of 2000, the district court denied the motion for a preliminary injunction. Joyella and the Hamads timely filed a notice of appeal from this denial. In January of 2001, the district court entered an order that (1) denied the motion by Joyella and the Hamads for summary judgment, (2) granted the defendants' motion for summary judgment against the Hamads on their discrimination claim, and (3) postponed a ruling on the motion for summary judgment against Joyella on her discrimination claim to allow her 45 days to "submit additional information . . . as to the status of her guardianship of [her nephew]." The court subsequently granted summary judgment against Joyella on the discrimination claim.

After the district court denied a motion by Joyella and the Hamads to file a second amendment to their complaint, trial commenced on the retaliation claims in February of 2002. The district court granted judgment as a matter of law in favor of the Page 230

defendants at the close of Joyella's and the Hamads' case-in-chief. A timely notice of appeal was filed. Both this appeal and the appeal from the denial of Joyella's and the Hamads' motion for a preliminary injunction are now before us. II. ANALYSIS

A. The district court erred in denying the motion for a preliminary injunction on the basis of standing

We review the denial of a motion for a preliminary injunction under the "abuse of discretion" standard. United States v. 2903 Bent Oak Highway, 204 F.3d 658, 665 (6th Cir. 2000). "A district court abuses its discretion when it applies the incorrect legal standard, misapplies the correct legal standard, or relies upon clearly erroneous findings of fact." Schenk v. City of Hudson, 114 F.3d 590, 593 (6th Cir. 1997). This standard "is a shorthand way of expressing the idea that this court ordinarily extends a high degree of deference to the district court's decision, but does so only if the district court properly understood the pertinent law and applied it in a defensible manner to the facts as they appear in the record." 2903 Bent Oak Highway, 204 F.3d at 665.

A district court must assess four factors in deciding whether to issue a preliminary injunction: "(1) whether the plaintiff has established a substantial likelihood or probability of success on the merits; (2) whether there is a threat of irreparable harm to the plaintiff; (3) whether issuance of the injunction would cause substantial harm to others; and (4) whether the public interest would be served by granting injunctive relief." Nightclubs, Inc. v. City of Paducah, 202 F.3d 884, 888 (6th Cir. 2000). "The four considerations applicable to preliminary injunction decisions are factors to be balanced, not prerequisites that must be met." Mich. Bell Tel. Co. v. Engler, 257 F.3d 587, 592 (6th Cir. 2001).

Perhaps following this court's statement that "[a]lthough no one factor is controlling, a finding that there is simply no likelihood of success on the merits is usually fatal," Gonzales v. Nat'l Bd. of Med. Exam'rs, 225 F.3d 620, 625 (6th Cir. 2000), the district court analyzed only the first factor. It denied the motion for a preliminary injunction on the basis that neither Joyella nor the Hamads had standing to sue under the Fair Housing Act.

The Fair Housing Act prohibits discrimination in the sale or rental of housing because of "race, color, religion, sex, familial status, or national origin." 42 U.S.C. § 3604. Any "aggrieved person" is authorized to bring a civil action pursuant to 42 U.S.C. § 3613. The Act defines an "aggrieved person" as one who "(1) claims to have been injured by a discriminatory housing practice; or (2) believes that such person will be injured by a discriminatory housing practice that is about to occur." Id. § 3602(i). In deciding that the Hamads did not have standing to sue as "aggrieved persons," the district court reasoned: "[T]he Hamads live in and are attempting to sell a condominium unit that is on the first floor, one that may be purchased by families with children." As for Joyella, the court concluded that she too lacked standing because she did "not yet have legal custody of her minor nephew."

The Supreme Court has held, however, that standing to sue under the Act is "as broad as is permitted by Article III of the Constitution." Gladstone, Realtors v. Vill. of Bellwood, 441 U.S. 91, 109 (1979) (alteration omitted). Under the Fair Housing Act, a plaintiff thus need show only that he or she (1) has suffered an injury in fact (2) Page 231

that is causally connected to the defendants' conduct and (3) that is likely to be redressed by a favorable ruling. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) (holding that these three elements constitute the constitutional minimum for standing); DeBolt v. Espy, 47 F.3d 777, 779-82 (6th Cir. 1995) (applying these three factors to determine standing in a Fair Housing Act case). The rationale on which the district court based its decision-that these requirements can be met only by persons who are directly and immediately subjected to discrimination-has been rejected by the Supreme Court. In Trafficante v. Metropolitan Life Insurance Co., 409 U.S. 205 (1972), a black tenant and a white tenant of an apartment complex brought suit under the Fair Housing Act, alleging that their landlord racially discriminated against nonwhites. Id. at 206-07. The Court held that both tenants had standing because "the alleged injury to existing tenants by exclusion of minority persons from the apartment complex is the loss of important...

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