Midpeninsula Citizens for Fair Housing v. Westwood Investors

• Decision Date: 02 July 1990
• Docket Number: No. H005191,H005191
• Citation: 221 Cal.App.3d 1377,271 Cal.Rptr. 99
• Court: California Court of Appeals Court of Appeals
• Parties: MIDPENINSULA CITIZENS FOR FAIR HOUSING, Plaintiffs and Appellants, v. WESTWOOD INVESTORS, et al., Defendants and Respondents.

Page 99

271 Cal.Rptr. 99

221 Cal.App.3d 1377

MIDPENINSULA CITIZENS FOR FAIR HOUSING, Plaintiffs and Appellants, v. WESTWOOD INVESTORS, et al., Defendants and Respondents.

No. H005191.

Court of Appeal, Sixth District, California.

July 2, 1990.

As Modified on Denial of Rehearing

July 31, 1990.

Gerald Z. Marer and Marer, Marer & Schuck, Peter G. Lomhoff, for plaintiffs and appellants.

Matthew A. Coles, Edward M. Chen, Margaret C. Crosby, Alan L. Schlosser, American Civ. Liberties Union Foundation of Northern California, Inc., Michael Rawson-Housing Rights, Inc., Jack Robertson and Robertson, Alexander, Luther, Esselstein, Shiells & Wright, The League of Women Voters of San Mateo County, Jon R. Parsons and Jon R. Parsons, Ltd., The San Jose Housing Service Center, Jonathan C. Dickey, A. James Isbester, and Brobeck, Phleger & Harrison, San Francisco Lawyers' Committee For Urban Affairs, Harry M. Snyder, Gail K. Hillebrand, and Nettie Y. Hoge, Consumers Union of U.S., Inc., Eric W. Wright, Volunteer attorney c/o Santa Clara University School of Law, Peter O. Israel, Leora D. Freedman and Hufstedler, Miller, Kaus & Beardsley, Julius LeVonne Chambers, Patrick O. Patterson, Theodore M. Shaw and NAACP Legal Defense and Educational Fund, Inc., for amicus curiae on behalf of plaintiffs appellants.

Linda Hendrix McPharlin, McPharlin & Mahl and Patrick E. Adair, Hopkins & Carley, for defendants and respondents.

BAMATTRE-MANOUKIAN, Associate Justice.

Midpeninsula Citizens for Fair Housing (MCFH) sued Westwood Investors and Richard Gregersen, the owners and manager of a Cupertino apartment building, claiming that the rental policy at the apartment complex limiting occupancy to one person per bedroom was discriminatory within the meaning of the Unruh Civil Rights Act (Civil Code section 51 et seq). The trial court entered judgment in favor of the Westwood defendants solely on the basis that MCFH did not have standing to sue under the Unruh Act.

In this appeal MCFH argues that it has standing both under the Unruh Act and under California's unfair competition statute, Business and Professions Code section 17204. We agree with the trial court that MCFH did not have standing under the Unruh Act. However, the recent case of Consumers Union of United States, Inc. v. Fisher Development, Inc. (1989) 208 Cal.App.3d 1433, 257 Cal.Rptr. 151, persuades us that standing is nonetheless proper under Business and Professions Code section 17204. But since that section provides only for injunctive relief, and the one person per bedroom policy challenged by MCFH is no longer in effect at the Westwood apartments, no remedy is available to MCFH and the case is consequently moot.

Because we regard the matter of standing to be an issue of "continuing public interest," we will proceed to address that issue in spite of the mootness of MCFH's case-in-chief. (John A. v. San Bernardino City Unified School Dist. (1982) 33 Cal.3d 301, 307, 187 Cal.Rptr. 472, 654 P.2d 242.)

BACKGROUND

Midpeninsula Citizens for Fair Housing is a nonprofit corporation which works to eliminate discriminatory housing practices and to secure equal housing opportunities for all people. MCFH carries out its work by means of educating the community concerning fair housing laws, investigating complaints of discrimination in housing and assisting victims of housing discrimination. It is a membership organization Defendants Westwood Investors, a limited partnership, and Richard Gregersen, its general partner (collectively Westwood), are the owners and manager of an apartment complex located in Cupertino and known as The Westwood. The Westwood contains 116 apartments, of which 53 have two bedrooms and 63 have three bedrooms. Defendants acquired the property in 1982. At that time they instituted a policy that the two-bedroom units could be occupied by no more than two people and the three-bedroom units by no more than three people.

and receives funding from its members, from grants and from the municipalities and counties it serves. Its membership has varied from 800 to 2000 over the years. Its service area, which encompasses southern San Mateo County and northern Santa Clara County, includes the City of Cupertino.

From 1982 through April of 1986, MCFH received seven complaints concerning the one person per bedroom rule at The Westwood.

In September of 1986, MCFH filed its first amended complaint against Westwood, alleging four causes of action.

1) Westwood's occupancy limitation policy violated the Unruh Act (Civ.Code, §§ 51 and 51.2) by discriminating against families with children, since it automatically excluded households comprised of two parents with more than one child or single parents with more than two children;

2) The occupancy policy had a discriminatory impact on blacks and other nonwhites who tend to have larger families than whites;

3) The occupancy policy violated the privacy rights of potential renters; and

4) The occupancy policy constituted unfair competition within the meaning of Business and Professions Code section 17200.

MCFH sought compensatory damages, punitive damages, injunctive relief and attorney's fees.

Shortly after the complaint was served, Westwood changed its rental policy. The new policy allows for one person per bedroom and full bathroom.

The issue whether MCFH had standing to sue was severed and tried separately before the court on August 30, 1988. The trial court determined that MCFH did not have standing under the provisions of the Unruh Act (Civ.Code, § 52), and entered judgment in favor of Westwood. MCFH appeals from that judgment.

DISCUSSION

MCFH claims three separate bases for standing:

1) As a "person aggrieved" under the Unruh Civil Rights Act, Civil Code section 52, subdivision (c);

2) As a representative of its members and clients under the Unruh Civil Rights Act; and

3) As a person or corporation "acting for the interests of itself, its members or the general public" under Business and Professions Code section 17204.

I. Standing As a "Person Aggrieved" Under the Unruh Act

The Unruh Act in general prohibits discrimination in the provision of accommodations and services in all business establishments. (Civ.Code, § 51.) Section 52 of the Act sets forth the available remedies. Subdivision (a) provides that anyone who engages in discriminatory practices in violation of the provisions of the Act may be liable for triple the amount of "actual damages ... suffered by any person denied the rights provided in section 51...."

In addition, a civil action to enjoin any alleged discriminatory pattern or practice may be brought by "the Attorney General, any district attorney or city attorney, or any person aggrieved by the pattern or practice." (Civ.Code, § 52, subd. (c).)

MCFH contends that it is an aggrieved party within the meaning of section 52. It argues that Westwood's rental policy caused a drain on its limited resources, thus diverting needed funds from important educational and counseling services. For example, a declaration by an employee of MCFH showed that MCFH spent approximately $900 in staff time and expenses investigating claims of discrimination at The Westwood and approximately $2,595 for administrative time and overhead.

Westwood argues that the operating expenses of an organization like MCFH in the course of carrying out its work are not what the Act intended as "actual damages" to compensate a person who has suffered from discriminatory treatment. Basically, Westwood maintains that MCFH is not a "person aggrieved" within the meaning of the Act. We agree with Westwood.

The Unruh Civil Rights Act is found in part 2 of the Civil Code, entitled "Personal Rights." Its language strongly suggests that it was intended to provide recourse for those individuals actually denied full and equal treatment by a business establishment. The courts have acknowledged that a cause of action under the Unruh Act is of an "individual nature" (Koire v. Metro Car Wash (1985) 40 Cal.3d 24, 34, 219 Cal.Rptr. 133, 707 P.2d 195), and that "the rights protected by the Act are enjoyed by all persons, as individuals." (Martin v. International Olympic Committee (9th Cir.1984) 740 F.2d 670, 677.)

Crowell v. Isaacs (1965) 235 Cal.App.2d 755, 45 Cal.Rptr. 566, is a case in point. In Crowell, a white couple listed their house for sale and later sued their real estate agent for failing to advertise specifically that the property was available to buyers of all races. The court rejected all of plaintiffs' claims based on the Unruh Act on grounds that plaintiffs were not the persons to which the statutory remedy was extended. "[P]laintiffs have not shown that they are persons entitled to a remedy under the Civil Rights Act. One who violates the Act is liable for damages 'suffered by any person denied the rights' granted by Section 51. That is the right to 'full and equal' facilities and privileges of defendant's business establishment, regardless of race, color or creed. The statute protects those so discriminated against. So far as we can find, all appellate decisions concerning this statute arose in actions brought by persons discriminated against on these grounds." (Id. at pp. 757-758, 45 Cal.Rptr. 566.)

Section 52 of the Civil Code was amended after the Crowell case to add subdivision (c), providing for a cause of action for injunctive relief in addition to the damages allowed by subdivision (a). As subdivision (c) now reads, such an action may be brought by "the Attorney General, any district attorney or city attorney or any person aggrieved by the [discriminatory] pattern or practice." MCFH contends that the holding in Crowell has been abrogated by the addition of subdivision (c) because standing is no longer limited to "person[s] denied the[ir] rights" but includes "any person aggrieved." A review of the legislative history of section 52, however, convinces us that the language "any person aggrieved" in subsection (c) was...