Peery v. Chicago Housing Authority
Filing
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MEMORANDUM Opinion and Order:Based on the foregoing, this Court finds that HMC is a necessary party and should be joined. This Court also finds that the Complaint adequately alleges a claim of unconstitutional search sufficient to move forward with discovery. Defendant's Motion to Dismiss 34 is denied. Signed by the Honorable Sharon Johnson Coleman on 11/26/2013:Mailed notice(rth, )
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
JOSEPH PEERY, on behalf of himself and all
persons similarly situated,
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Plaintiffs,
v.
CHICAGO HOUSING AUTHORITY,
Defendant.
Case No. 13-cv-5819
Judge Sharon Johnson Coleman
MEMORANDUM OPINION AND ORDER
Plaintiff Joseph Peery (“Peery”), filed a Class Action Complaint against the Chicago
Housing Authority (“CHA”) for violating the U.S. Constitution and the Illinois Constitution by
conducting warrantless and suspicionless drug-testing as a condition of occupancy in public
housing units in the mixed-income development Parkside. CHA moves to dismiss pursuant to
Federal Rule of Civil Procedure 12(b)(7) for failure to join a necessary party. CHA also moves to
dismiss the complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure
12(b)(6) arguing that Peery fails to allege state action sufficient to support a 42 U.S.C. § 1983
claim for a constitutional violation and fails to allege adequate factual basis for the
reasonableness of the search and to overcome consent to the search. This Court heard oral
arguments on this motion on November 4, 2013. For the reasons stated below, this Court denies
the motion.
Background
Peery is a CHA beneficiary who resides in an apartment in the Parkside mixed-income
development. Parkside is owned by Parkside Nine Phase I, L.P., and managed by Holsten
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Management Corporation (“HMC”). CHA developed Parkside as part of its Redevolopment
Plan. Peery is seeking a permanent injunction to prevent suspicionless drug testing as a condition
of his residency at Parkside. Peery claims the drug-testing violates his Fourth Amendment right
against unreasonable searches and seizures. CHA moves to dismiss the Complaint in its entirety.
Legal Standard
In order to survive a motion to dismiss pursuant to Rule 12(b)(6), a complaint must
contain sufficient factual allegations to state a claim of relief that is plausible on its face.
Ashcroft, 556 U.S. 662, 678 (2009). The basic pleading requirement is set forth in Federal Rule
of Civil Procedure 8(a)(2), which requires a complaint contain a “short and plain statement of the
claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Although Rule 8 does
not require a plaintiff to plead particularized facts, the factual allegations in the complaint must
sufficiently raise a plausible right to relief above a speculative level. Arnett v. Webster, 658 F.3d
742, 751–52 (7th Cir. 2011). When ruling on a motion to dismiss a court must accept all wellpleaded factual allegations in the complaint as true and draw all reasonable inferences in the
plaintiff’s favor. Erickson v. Pardus, 551 U.S. 89, 94 (2007).
Discussion
I.
Failure to Join a Necessary Party
CHA first moves to dismiss the complaint for failure to join a necessary party pursuant to
FRCP 12(b)(7) and FRCP 19(a)(1). CHA argues that HMC is a necessary party to the litigation
because HMC, not CHA, is a party to the contract – the lease containing the drug testing
provision.
Under Rule 19(a)(1) a party is required to be joined if: (A) in that person’s absence, the
court cannot accord complete relief among existing parties; or (B) that person claims an interest
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relating to the subject of the action and is so situated that disposing of the action in that person’s
absence may: (i) impair or impede their ability to protect their interest; or (ii) leave the existing
party subject to substantial risk of incurring double, multiple, or otherwise inconsistent
obligations because of that interest. CHA cites United States ex. rel. Hall v. Tribal Dev. Corp.,
100 F.3d 476, 479 (7th Cir. 1996), for the proposition that “a contracting party is the paradigm of
an indispensable party.” However, the Seventh Circuit notes that “sweeping declaration has its
limits.” Id. What the Seventh Circuit found was “in an action to set aside a lease or a contract, all
parties who may be affected by the determination of the action are indispensable.” Id. CHA
argues that HMC is Parkside’s manager and Peery’s lessor and that HMC, not CHA, is a party to
the Parkside lease that requires the drug screening that Peery challenges as unconstitutional.
Further, CHA asserts that “HMC’s rights are directly at stake, and the Court cannot nullify the
challenged lease term without allowing HMC an opportunity to be heard.” CHA also asserts that
without HMC the Court cannot confer complete relief because it is HMC’s lease that imposes the
screening requirement and the screening is done at HMC’s office.
This Court finds that HMC is a necessary party. The lease at issue does have HMC as a
signatory and one of the central issues of fact at stake is to what extent CHA is responsible for
the lease provision at issue. Discovery will be simplified by the addition of HMC as a party.
Execution of any injunction that may result from this litigation will be facilitated by joining
HMC as a defendant. Peery’s argument that there is no lease at issue because he already tested
under his current lease and that he “is not seeking to strike the drug testing requirement in his
existing lease with HMC,” is unpersuasive and would result in a problem of jusiticiability.
Although this Court finds that HMC is a necessary party, dismissal of the complaint is not the
appropriate remedy, instead HMC should be joined.
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II.
Failure to State a Claim
CHA also argues that this Court should dismiss Peery’s complaint pursuant to FRCP
12(b)(6) for failure to state a claim. CHA makes three basic arguments: first, Peery fails to plead
any facts to support an inference that HMC’s lease with the drug-testing provision is government
action sufficient to bring a section 1983 claim; second, Peery has consented to the testing each of
the last three years (since he moved in to Parkside in 2010) and thus has waived any Fourth
Amendment violation; and third, even if the testing is a government search, Peery has not
adequately plead that it is unreasonable.
1.
State Action
CHA asserts that Peery must plead facts that, taken as true, would show that CHA
coerced or significantly encouraged HMC to implement and maintain the drug screening policy.
CHA contends that HMC is Parkside’s private manager and is the entity responsible for the drug
screening policy as a condition of its own lease. CHA argues that Peery’s allegations of CHA
oversight are too conclusory to allege state action. Moreover, the allegations do not tie CHA to
the specific policy at issue. CHA has largely argued from a summary judgment posture rather
than a dismissal posture by asserting that Peery be required to allege facts ordinarily required for
motions brought after discovery. Peery alleges in his complaint that the drug testing requirement
is the result of CHA policy alone.
Even if we consider whether there is state action through joint activity, Peery has alleged
sufficiently CHA’s involvement. “To establish Section 1983 liability through a conspiracy
theory, a plaintiff must demonstrate that: (1) a state official and private individual(s) reached an
understanding to deprive the plaintiff of his constitutional rights, and (2) those individual(s) were
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willful participants in joint activity with the State or its agents.” Brokaw v. Mercer County, 235
F.3d 1000, 1016 (7th Cir. 2000) (quoting Fries v. Helsper, 146 F.3d 452, 457 (7th Cir. 1998)).
Here, Peery alleges that under the CHA’s Relocation Rights Contract, certain apartments
at the new mixed-income housing developments are reserved for CHA tenants and that he resides
in one of those units at Parkside. Peery further alleges that the CHA requires all adults seeking
admission or continued occupancy to rental apartments reserved for CHA tenants in certain
mixed-income developments to take and pass a suspicionless drug test. Peery’s allegations that
the CHA developed Parkside on the former Cabrini-Green site as part of its development plan
and that he resides in a public housing unit are sufficient at this juncture to allege state action.
Further, one of CHA’s own exhibits, the “Moving to Work Annual Report for FY 2008,” states
that “Each mixed-income/mixed-finance community has different policies, leases, and TSP
[“Tenant Selection Plans”] that are formulated by the developer and the working group.” (Dkt.
35-1, Ex. 4 at 97.) The working group includes CHA representatives. The document goes on to
state that the draft lease and TSP must be approved by the CHA Board before becoming
effective. Id. While the CHA argues that it is not involved in the drug testing, this Court finds
that the degree to which the CHA is or was involved with the development leases and of the drug
testing requirement is not ascertainable by plaintiffs without discovery. This Court finds there are
sufficient facts from which this Court may draw a reasonable inference that there is state action,
at least to permit discovery.
2.
Consent to Screening
CHA also argues that “a search conducted pursuant to a valid consent is constitutionally
permissible.” Schneckloth v. Bustamonte, 412 U.S. 218, 222 (1973). According to CHA, the
testing does not implicate the Fourth Amendment because Peery consented to the drug testing
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only as a condition for residency at Parkside and not as a condition for receiving benefits.
However, the Supreme Court in Schneckloth held that “the question whether a consent to a
search was in fact ‘voluntary’ or was the product of duress or coercion, express or implied, is a
question of fact to be determined from the totality of all the circumstances.” Id. at 227; see also
Valance v. Wisel, 110 F.3d 1269, 1278 (7th Cir. 1997). Here, Peery alleges that the consequence
of non-compliance with the drug testing requirement is eviction from his home. This allegation
sufficiently raises the specter of coercion for this Court to infer at this stage of proceedings that
plaintiffs’ consent may not have been voluntary.
3. Reasonableness of the Search
CHA also argues that, even if the drug screening constitutes a government search,
plaintiffs fail to plead the testing is unreasonable. According to CHA, it is “perfectly reasonable
for CHA to expect its beneficiaries to adhere to the generally applicable requirements of a
private housing development in which the beneficiaries choose to live…”. Further, CHA asserts
that the facts as pleaded show only a minimal intrusion on Peery’s privacy because the tests are
taken in a clinical setting, in a private room, and free from direct observation.
A warrantless search generally is considered presumptively unreasonable. Valance v.
Wisel, 110 F.3d 1269, 1278 (7th Cir. 1997) (citing Ruggiero v. Krzeminski, 928 F.2d 558, 563
(2d Cir. Conn. 1991); See also Payton v. New York, 445 U.S. 573, 586, 63 L. Ed. 2d 639, 100 S.
Ct. 1371 (1976). This presumption requires the defendant to provide evidence to rebut the
presumption, by providing evidence of consent to the search, which can then be rebutted by the
plaintiff through a showing that he never consented or that the consent was invalid because it
was given under duress or coercion. Valance, 110 F.3d at 1279.
Peery alleges that CHA subjects him to warrantless and suspicionless searches through a
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drug testing requirement to maintain his residence in public housing. CHA does not assert that
the drug testing is conducted pursuant to warrant or suspicion of criminal activity, thus this Court
presumes that the search is unreasonable. In general, there is a substantial expectation of privacy
in connection with the act of urination. Schaill v. Tippecanoe County Sch. Corp., 864 F.2d 1309,
1318 (7th Cir. 1988). Further, the government has the burden of establishing a “special need” for
a warrantless and suspicionless drug test. See Chandler v. Miller, 520 U.S. 305, 318 (1997);
Taylor v. O'Grady, 888 F.2d 1189, 1194 (7th Cir. Ill. 1989). This case is only at the dismissal
stage and therefore we are only concerned with the legal sufficiency of the complaint, not the
merits of the claims. This Court finds that plaintiffs have adequately alleged their constitutional
claim of an unreasonable search.
Conclusion
Based on the foregoing, this Court finds that HMC is a necessary party and should be
joined. This Court also finds that the Complaint adequately alleges a claim of unconstitutional
search sufficient to move forward with discovery. Defendant’s Motion to Dismiss [34] is denied.
IT IS SO ORDERED.
Date: November 26, 2013
Entered:______________________________
United States District Judge
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