Southwest Fair Housing Council Incorporated et al v. Maricopa Domestic Water Improvement District

Filing 78

ORDER: IT IS ORDERED that: (1) Defendants' motion to amend (Doc. 71 ) is GRANTED; and (2) Defendants must, pursuant to LRCiv 15.1(a), file and serve the amended answer on all parties under Rule 5 of the Federal Rules of Civil Procedure within 14 days of today's date [see attached Order for details]. Signed by Judge Dominic W Lanza on 2/4/19. (MAW)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Southwest
Fair
Incorporated, et al.,

Housing

Council

Plaintiffs,

No. CV-17-01743-PHX-DWL
ORDER

v.
Maricopa Domestic Water Improvement
District, et al.,
Defendants.

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Pending before the Court is Defendants’ motion to amend their answer to add the

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affirmative defense of unclean hands. (Doc. 71.) Defendants argue (1) they recently

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learned that Plaintiffs’ investigator has encouraged tenants to violate their leases by not

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paying their water bills and (2) the proposed amendment won’t prejudice Plaintiffs or cause

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undue delay because the discovery deadline isn’t until May 31, 2019. (Id. at 1-4.)

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Plaintiffs oppose this request. (Doc. 72.) They contend (1) the amendment is futile

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because their claims arise under the Fair Housing Act, yet unclean hands is never a defense

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in “actions enforcing civil rights under statutes that authorize equitable relief,” and (2) the

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facts proffered by Defendants wouldn’t, in any event, support an unclean hands defense

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because Plaintiffs seek to challenge “long-standing practices” that were in existence “long

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before and independent of any conduct by” their investigator. (Id. at 3-4.)

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In their reply, Defendants argue (1) the alleged misconduct may be “relevant to the

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question of whether [Plaintiffs] suffered a frustration of mission and diversion of resources

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sufficient to confer standing,” (2) they aren’t required, at the pleading stage, to spell out all

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of the facts supporting their affirmative defense and simply need to describe it in “general

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terms,” (3) the cases cited by Plaintiffs are distinguishable, and (4) the alleged misconduct

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may be relevant to the range of equitable remedies available and to Plaintiffs’ claim for

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monetary damages. (Doc. 74.)

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Defendants’ motion to amend will be granted. Rule 15(a)(2) provides that leave to

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amend should be granted “freely” when “justice so requires.” Here, although Plaintiffs

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argue the unclean hands defense has limited applicability in civil rights actions, they

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haven’t established that it is categorically unavailable in FHA cases. Cf. Ramirez v.

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Greenpoint Mort. Funding, Inc., 268 F.R.D. 627, 638 (N.D. Cal. 2010) (declining to

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resolve whether the defense “could succeed ‘under no set of circumstances’” and

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conducting only a likelihood-of-success analysis); see also Silvas v. G.E. Money Bank, 449

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Fed. App’x 641, 644 (9th Cir. 2011) (“[T]he district court . . . concluded generally that

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Silvas was barred from equitable relief [in lawsuit raising claims under the FHA and the

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Truth in Lending Act] under the doctrine of unclean hands. We affirm the district court’s

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denial of a preliminary injunction on this basis.”). Accordingly, the Court is not prepared

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to find—at least at this early juncture—that the defense is inapplicable as a matter of law

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to all issues that may arise in this case (i.e., futile).

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Accordingly, IT IS ORDERED that:

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(1)

Defendants’ motion to amend (Doc. 71) is GRANTED; and

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(2)

Defendants must, pursuant to LRCiv 15.1(a), file and serve the amended

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answer on all parties under Rule 5 of the Federal Rules of Civil Procedure within 14 days

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of today’s date.

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Dated this 4th day of February, 2019.

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