Harris v. Capital Growth Investors Xiv

• Citation: 805 P.2d 873,278 Cal.Rptr. 614,52 Cal.3d 1142
• Decision Date: 28 February 1991
• Docket Number: No. S011367,S011367
• Court: United States State Supreme Court (California)
• Parties: , 805 P.2d 873, 59 USLW 2545 Tamela HARRIS et al., Plaintiffs and Appellants, v. CAPITAL GROWTH INVESTORS XIV et al., Defendants and Respondents.

Page 614

278 Cal.Rptr. 614

52 Cal.3d 1142, 805 P.2d 873, 59 USLW 2545

Tamela HARRIS et al., Plaintiffs and Appellants, v. CAPITAL GROWTH INVESTORS XIV et al., Defendants and Respondents.

No. S011367.

Supreme Court of California,

In Bank.

Feb. 28, 1991.

Carolyn Burton, Gary F. Smith, Carole F. Grossman, Richard A. Rothschild, Sandra D. Jones and Manuel A. Romero, for plaintiffs and appellants.

John K. Van de Kamp, Atty. Gen., Andrea Sheridan Ordin, Chief Asst. Atty. Gen., Marian M. Johnston, Deputy Atty. Gen., Michael Rawson and James B. Morales, as amici curiae on behalf of plaintiffs and appellants.

Miller, Starr & Regalia, Edmund L. Regalia, Gary E. Rosenberg, Kimberly A. Davis, John G. Sprankling and Harry D. Miller, for defendants and respondents.

Donna May Campbell, Morrison & Foerster, Barry A. Abbott, Douglas L. Hendricks, Patrick A. Broderick, as amici curiae on behalf of defendants and respondents.

LUCAS, Chief Justice.

Introduction and Summary of Decision

We consider in this case two issues involving interpretation of the Unruh Civil Rights Act (Civ.Code, §§ 51, 52; hereafter the Unruh Act or the Act; all statutory references are to the Civil Code unless otherwise indicated): (1) does the Act proscribe, as economic discrimination, a landlord's requirement that prospective tenants have gross monthly incomes of at least three times the rent to be charged (the minimum income policy) and (2) can a female plaintiff state a cause of action under the Act by alleging that the minimum income policy has an adverse or disparate impact on women? Our review of the language and history of the Act indicates that both questions must be answered in the negative.

The Unruh Act prohibits denial of access to public accommodations based on specified classifications (i.e., race, sex, religion and others). Economic and financial distinctions are not among the impermissible classifications listed in the statute. Although our decisions have occasionally recognized additional categories of prohibited discrimination (e.g., physical appearance and family status), those categories were based on personal characteristics of individuals that bore little or no relationship to their abilities to be responsible consumers of public accommodations. We find no support in the language or history of the Act for extending our past holdings to encompass economic criteria, which by their nature seek to further the legitimate interest of business establishments in controlling financial risk while providing goods and services on a nondiscriminatory basis.

As to the second issue before us, the language and history of the Unruh Act indicate that the legislative object was to prohibit intentional discrimination in access to public accommodations. We have been directed to no authority, nor have we located any, that would justify extension of a disparate impact test, which has been developed and applied by the federal courts primarily in employment discrimination cases, to a general discrimination-in-public-accommodations statute like the Unruh Act. Although evidence of adverse impact on a particular group of persons may have probative value in public accommodations cases and should therefore be admitted in appropriate cases subject to the general rules of evidence, a plaintiff must nonetheless plead and prove a case of intentional discrimination to recover under the Act.

1. The Facts and Proceedings Below

Plaintiffs Tamela Harris and Muriel Jordan filed a representative action against defendants Capital Growth Investors XIV and XVI (real estate limited partnerships), Independent Planning Realty Corporation (a management firm responsible for operating two apartment buildings owned by the partnerships), five individual managers of the apartment buildings, and other entities. Plaintiffs' first amended complaint challenges defendants' minimum income policy, characterizing it as both arbitrary economic discrimination and sex discrimination based on its alleged adverse statistical impact on women.

The trial court sustained without leave to amend defendants' general demurrers to those causes of action in the first amended complaint concerning the challenged practice. After additional claims were disposed of by stipulation, a judgment of dismissal was entered and plaintiffs appealed. The Court of Appeal reversed as to the economic discrimination claim, holding that it raised factual issues concerning the alleged arbitrariness of defendants' practice that required a trial. It affirmed as to the sex-discrimination-by-adverse-impact claim.

We must determine whether plaintiffs' allegations state a cause of action under the Unruh Act. ¹ In reviewing the judgment of dismissal, we accept as true the allegations in the first amended complaint summarized here (see Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213-214, 197 Cal.Rptr. 783, 673 P.2d 660):

Plaintiffs are female heads of low income families whose income consists solely of public assistance benefits; defendants own and operate apartment buildings. Defendants have an express written policy that prospective tenants must have sufficient income, defined as monthly income equal to or greater than three times the rent charged, before they will be considered as prospective tenants of one of defendants' apartments. Although plaintiffs can afford to pay the rent charged by defendants, they do not have incomes equal to three times the rent. For example, plaintiff Muriel Jordan has a monthly income of $698 and defendants' apartments rent for between $275 and $360, depending on size. Because they did not meet defendants' minimum income requirement, plaintiffs were denied the opportunity to rent apartments. Plaintiffs maintain that defendants' policy is grounded solely on unsubstantiated assumptions that persons who meet the specified income standard will more likely pay rent than those who do not.

In addition, plaintiffs allege that a "disproportionate number of families receiving public assistance such as [Aid to Families with Dependent Children] are headed by females"; that "[w]omen generally have lower average income than males"; and that defendants' minimum income policy has unlawfully discriminated against them because of their sex.

2. A Short History of the Unruh Act

Enacted in 1959, the Unruh Act secures equal access to public accommodations and prohibits discrimination by business establishments. Its predecessor, our state's first public accommodations statute, became law in 1897. ² It consisted of two primary sections. The first section declared that all citizens were entitled to the "full and equal accommodations, advantages, facilities, and privileges of inns, restaurants, hotels, eating-houses, barber-shops, bath-houses, theaters, skating-rinks, and all other places of public accommodation or amusement, subject only to the conditions and limitations established by law and applicable alike to all citizens." (Stats.1897, ch. 108, § 1, p. 137.) ³ The second section prohibited "denying to any citizen, except for reasons applicable alike to every race or color," access to the places described in the first section or making "any discrimination, distinction, or restriction on account of color or race, or except for good cause, applicable alike to all citizens of every color or race whatever...." (Stats.1897, ch. 108, § 2, p. 137.) The two parts of the statute became sections 51 and 52 of the Civil Code in 1905. (Stats.1905, ch. 413, §§ 1, 2, p. 553.)

Sections 51 and 52 remained substantially unchanged from 1923 to 1959. Although court decisions in the 1950's restricted the places of public accommodation covered by these sections, ⁴ they also confirmed their application to nonracial forms of discrimination. In Stoumen v. Reilly (1951) 37 Cal.2d 713, 234 P.2d 969, we held that the State Board of Equalization acted illegally in suspending the license of a bar and restaurant because it allowed patronage by homosexual persons. We stated that: "Members of the public of lawful age have a right to patronize a public restaurant and bar so long as they are acting properly and are not committing illegal or immoral acts; the proprietor has no right to exclude or eject a patron 'except for good cause,' and if he does so without good cause he is liable in damages. (See Civ.Code, §§ 51, 52.)" (Id. at p. 716, 234 P.2d 969.) Observing there was no evidence of illegality on the premises, we refused to find "good cause" for exclusion of homosexuals. (Id. at pp. 716-717, 234 P.2d 969.) Using similar analysis, in McClain v. City of South Pasadena (1957) 155 Cal.App.2d 423, 432-433, 318 P.2d 199, the Court of Appeal construed sections 51 and 52 to prohibit "unreasonable discrimination" and held that a "residents only" restriction on access to a public swimming pool was not unreasonable. (See also Orloff v. Los Angeles Turf Club (1951) 36 Cal.2d 734, 739-741, 227 P.2d 449; Orloff v. Hollywood Turf Club (1952) 110 Cal.App.2d 340, 342-343, 242 P.2d 660 [applying public accommodations provisions of §§ 51-54 to exclusion of patrons from racetrack because of past bookmaking].)

Sections 51 and 52 were substantially revised in 1959 when they became the Unruh Act. In response to court decisions restricting the places covered by the statute, section 51's list of places was deleted and replaced by a reference to "all business establishments of any kind whatsoever." (Stats.1959, ch. 1866, § 1, p. 4424.) (See generally Comment, supra, 31 UCLA L.Rev. at pp. 450-451; Colley, Civil Actions for Damages Arising out of Violations of Civil Rights (1965) 17 Hastings L.J. 189, 191.) In addition, the new section 51 declared that all citizens within the jurisdiction of this state were "free and equal, and no matter what their race, color, religion, ancestry, or national origin" were entitled to full and equal public accommodations. (Stats.1959, ch. 1866, § 1, p. 4424.) Finally, the...