Oak Ridge Care Center v. Racine County, Wis.

• Citation: 896 F. Supp. 867
• Decision Date: 11 August 1995
• Docket Number: Civ. A. No. 94-C-1328.
• Parties: OAK RIDGE CARE CENTER, INC., Plaintiff, v. RACINE COUNTY, WISCONSIN and Town of Yorkville, Wisconsin, Defendants.
• Court: U.S. District Court — Eastern District of Wisconsin

896 F. Supp. 867

OAK RIDGE CARE CENTER, INC., Plaintiff, v. RACINE COUNTY, WISCONSIN and Town of Yorkville, Wisconsin, Defendants.

Civ. A. No. 94-C-1328.

United States District Court, E.D. Wisconsin.

August 11, 1995.

COPYRIGHT MATERIAL OMITTED

Michael J. Widmann, Welcenbach & Widmann, Milwaukee, WI, for plaintiff.

Mark Janiuk, Corporation Counsel, Victoria L. Kies, Ass't Corp. Counsel, Racine, WI, & Michael J. Cieslewicz, Kasdorf, Lewis & Swietlik, Milwaukee, WI, for Town of Yorkville.

DECISION AND ORDER DENYING MOTIONS TO DISMISS

REYNOLDS, District Judge.

Plaintiff Oak Ridge Care Center, Inc. ("Oak Ridge"), filed this action on November 30, 1994, alleging that defendants violated the Americans with Disabilities Act, 42 U.S.C. §§ 12131 et seq., and the Fair Housing Act, 42 U.S.C. §§ 3601 et seq., by refusing to issue a conditional use permit so that a drug and alcohol rehabilitation facility could operate on Oak Ridge's property. Defendant Racine County has filed motions to dismiss and defendant Yorkville has filed motions to dismiss and for summary judgment, which the court shall deny. The court has jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1343.

I. Background

A. Facts

Oak Ridge operates an elder care facility on its property in the Town of Yorkville, Racine County, Wisconsin. Oak Ridge operates the elder care facility under an existing nonconforming use agreement with the County because the property is presently zoned as a general farming and residential district. (Am.Compl. ¶ 8/Ex. 2.)

Between 1991 and 1994, Oak Ridge attempted to sell its property but received only three inquiries. In April 1994, Oak Ridge found a buyer, Teen Challenge of Wisconsin, Inc. ("Teen Challenge"), a Christian growth and development center. Teen Challenge intended to use the property and facility as a residential drug and alcohol rehabilitation center for twenty adult residents. (Id. ¶ 16.) Teen Challenge agreed to purchase Oak Ridge's property for $250,000 contingent upon obtaining a conditional use permit from the County by September 14, 1994. (Id. ¶¶ 14-15.)

In June 1994, Teen Challenge submitted an application for conditional use to Racine County and wrote on the application that Teen Challenge was acting as an agent for Oak Ridge. (Id./Ex. 2.) Yorkville residents, and the Town of Yorkville itself, proceeded to submit petitions and letters in opposition to the presence of the rehabilitation center. In July 1994, at a public hearing, numerous Yorkville residents urged rejection of the conditional use permit on the grounds that the rehabilitation facility would be a security risk to neighborhood schools, lure criminal activity into the community, bring too much traffic, cause sewage problems, decrease property value, and fail due to inadequate staffing and methodology. (Id. ¶ 25.)

After the public hearing, County officials voted 4-3 to deny the conditional use permit. The County stated that it denied the permit because the rehabilitation facility was an inappropriate land use and belonged in "an urban area." (Id. ¶ 33.) In August 1994, Oak Ridge advised the County that Oak Ridge would face economic damages if the conditional use permit were denied, but the County did not reverse its decision. On September 14, 1994, Teen Challenge canceled its contract to purchase Oak Ridge's property because a conditional use permit had not been issued. (Id. ¶ 41.) Oak Ridge has since been unsuccessful in selling the property and claims to be suffering economic damages as a result of its continued mortgage obligation on the property. (Id. ¶ 43.)

Oak Ridge claims that the County denied the use permit based on stereotypical attitudes about and discriminatory animus toward disabled people (alcoholics and drug addicts). (Id. ¶¶ 34-35.) Oak Ridge brings this action under Title VIII of the Fair Housing Act, 42 U.S.C. §§ 3600 et seq. ("FHA"), and Title II of the Americans with Disabilities Act, 42 U.S.C. §§ 12131 et seq. ("ADA").

B. Posture

Defendant Racine County has moved to dismiss the plaintiff's complaint for lack of standing and for failing to state a claim. Defendant Yorkville has moved for summary judgment. Because the record differs between a dismissal motion and a summary judgment motion, the court will consider the motions separately.

II. Analysis

A. Racine County's Motion to Dismiss

Racine County moves to dismiss Oak Ridge's ADA claim for lack of standing under Fed.R.Civ.P. 12(b)(1). In addition, Racine County seeks to dismiss plaintiff's FHA claim for lack of standing under Fed.R.Civ.P. 12(b)(1) and for failure to state a claim upon which relief can be granted under Fed. R.Civ.P. 12(b)(6). For reasons set forth below, the court shall deny Racine County's arguments for dismissal.

1. Standing under the Americans with Disabilities Act

Standing questions are to be resolved according to a two-part inquiry that considers: (1) Article III constitutional limitations and (2) prudential limitations. Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 99, 99 S.Ct. 1601, 1607-08, 60 L.Ed.2d 66 (1979). A litigant must pass both constitutional and prudential muster to have standing to sue. Family & Children's Ctr., Inc. v. School City of Mishawaka, 13 F.3d 1052, 1058 (7th Cir.), cert. denied, ___ U.S. ___, 115 S.Ct. 420, 130 L.Ed.2d 335 (1994).

a. Article III Limitations

Article III requires the existence of a case or controversy between plaintiff and defendant. To satisfy Article III minima, a plaintiff must allege: (1) an "injury in fact" (2) fairly traceable to the defendant's conduct (3) that a favorable federal court decision likely would redress or remedy. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 2136, 119 L.Ed.2d 351 (1992). The Supreme Court has advised that "at the pleading stage, general factual allegations of injury resulting from the defendant's conduct may suffice, for on a motion to dismiss we `presume that general allegations embrace those specific facts that are necessary to support the claim.'" Id. 504 U.S. at 561, 112 S.Ct. at 2137 (quoting Lujan v. National Wildlife Fed'n, 497 U.S. 871, 889, 110 S.Ct. 3177, 3189, 111 L.Ed.2d 695 (1990)).

The Seventh Circuit has not yet had the opportunity to address the issue of standing under the ADA. But this court concludes that Oak Ridge has satisfied the Article III standing test, which is "undemanding." North Shore Gas Co. v. EPA, 930 F.2d 1239, 1242 (7th Cir.1991). By alleging that Racine County's discriminatory actions resulted in Oak Ridge's loss of sale and a continuation of Oak Ridge's continued mortgage obligation, Oak Ridge has adequately alleged injury in fact fairly traceable to the County's conduct. And Oak Ridge's request for monetary relief would redress or remedy its injury.

b. Prudential Limitations

The harder question is whether Oak Ridge has standing under a prudential analysis. Prudential limitations include the general prohibition on a litigant's raising another person's legal rights, the rule barring adjudication of generalized grievances more appropriately addressed in the representative branches, and the requirement that a plaintiff's complaint fall within the "zone of interests" protected by the law invoked. Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 3324-25, 82 L.Ed.2d 556 (1984). The zone of interests limitation requires that the court consider statutory language and congressional intent. The Supreme Court has stated that "persons to whom Congress has granted a right of action, either expressly or by clear implication, may have standing to seek relief on the basis of the legal rights and interests of others." Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 2206, 45 L.Ed.2d 343 (1975).

The primary prudential inquiry for this court is whether the ADA statute grants a cause of action to Oak Ridge to seek relief on the basis of alleged discrimination against the disabled, even though Oak Ridge itself is not disabled and does not represent disabled people. In support of its position that Oak Ridge lacks standing to sue under the ADA, Racine County directs the court's attention to a New Jersey case, Kessler Inst. for Rehabilitation, Inc. v. Mayor of Essex Fells, 876 F.Supp. 641 (D.N.J.1995), which held that the plaintiff (a rehabilitation institute) lacked standing to sue because Title II of the ADA confers a substantive right only upon "qualified individuals with a disability" themselves, not on entities that work with or for such individuals. Id. at 653. Because Oak Ridge, like the plaintiff in Kessler, is not a "qualified individual with a disability," Kessler is authority for denying Oak Ridge standing to sue Racine County under Title II of the ADA.

The Kessler court failed to consider the regulations implementing the ADA. The federal regulations state: "A public entity shall not exclude or otherwise deny equal services, programs, or activities to an individual or entity because of the known disability of an individual with whom the individual or entity is known to have a relationship or association." 28 C.F.R. § 35.130(g) (1994) (emphasis added). Moreover, in adopting these regulations, the Department of Justice was following Congressional intent: "Title II should be read to incorporate provisions of titles I and III which are not inconsistent with the regulations implementing Section 504 of the Rehabilitation Act of 1973, such as Section 102(b)(4) of the ADA codified as 42 U.S.C. § 12112(b)(4)." H.R. Report No. 101-485(III), 101st Cong., 2nd Sess. 51 (1990), reprinted in 1990 U.S.C.C.A.N. 445, 474. The regulations take their language directly from 42 U.S.C. § 12112(b)(4).

In the only reported federal case other than Kessler to address the issue of Title II standing for plaintiffs who are not themselves disabled individuals, a Florida court held that plaintiffs did have standing under Title II because 28 C.F.R. § 35.130(g) specifically grants an independent right of action to entities who...