Pelot v. Criterion 3, LLC et al

Filing 42

MEMORANDUM OPINION re 41 Order on 6 Motion to Dismiss for Failure to State a Claim. Signed by District Judge Sharion Aycock on 1/4/2016. (geb) Modified on 1/4/2016 (dlh).

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
ABERDEEN DIVISION
JUSTIN BRADLEY PELOT

PLAINTIFF

V.

CIVIL ACTION NO. 1:15-CV-76-SA-DAS

CRITERION 3, LLC, and
GARY CONNER

DEFENDANTS
MEMORANDUM OPINION

Justin Bradley Pelot initiated this action to recover for eviction and termination by his
landlord and employer Criterion 3, LLC and its vice president Gary Conner. Plaintiff pursues
various state law theories, as well as a theory of unlawful retaliation in violation of the Fair
Housing Act of 1968. 42 U.S.C. § 3601, et. seq. Defendants filed a Motion to Dismiss [6] Pelot’s
Fair Housing Act claim pursuant to Federal Rule of Civil Procedure 12(b)(6). The Court has
considered the complaints,1 motion, responses, and relevant authorities, and finds as follows:
Factual and Procedural Background
Defendant Criterion owns the apartment complex, The Pointe at MSU, located in
Starkville, Mississippi near the campus of Mississippi State University. Plaintiff leased an
apartment at The Pointe and also worked for Criterion as a minimum wage auditor while earning
his accounting degree from Mississippi State. Instead of receiving monetary compensation for
his auditing services, Plaintiff was paid with an offset against his rent.
In February 2015, Plaintiff’s apartment was burglarized, and his roommate was allegedly
a suspect. After the burglary, “Plaintiff investigated as to who may have had access to keys” and
“whether appropriate background checks were being made upon residents and employees.”

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Subsequent to Defendants’ motion, Plaintiff has twice amended his complaint. Defendants insist that even with the
amendments, the complaint does not state a claim for which relief can be granted.

Plaintiff allegedly discovered, among other things, that Criterion did not perform a background
check on his roommate or on an alleged sex offender who lived at The Pointe and worked for
Criterion.
Following his investigation, Plaintiff composed a letter to Criterion, writing that its
practices, including the failure to perform background checks on all of its residents, violated the
Fair Housing Act. According to the amended complaint, Defendant Gary Conner, Criterion’s
corporate vice president, then called Plaintiff and expressed outrage at Plaintiff’s written
assertions. Shortly thereafter, Criterion’s counsel informed Plaintiff by letter that he was evicted
and his employment was terminated.
Plaintiff commenced this action, pursuing state law claims, and alleging that Criterion
retaliated against him for advocating against unlawful housing practices within the meaning of
the Fair Housing Act. Defendants moved to dismiss the Fair Housing Act retaliation claim,
contending that Plaintiff’s letter did not qualify as activity protected by the Fair Housing Act, as
Plaintiff did not complain of any housing practice that discriminated on the basis of “race, color,
religion, sex, familial status, or national origin.” 42 U.S.C. §§ 3604, 3617. In its response,
Plaintiff conceded that “Defendant is correct as to Plaintiff’s original complaint[,]” but Plaintiff
subsequently amended his complaint in an effort to remedy the pleading deficiency.
Plaintiff’s amended complaint asserts that during the aforementioned conversation with
Conner, Plaintiff stated that “allowing sex offenders to reside at the apartments was a danger to
all female residents of The Pointe.” This statement, Plaintiff argues, relates to gender
discrimination in housing, and is thus protected by the Fair Housing Act. In spite of Plaintiff’s
amendment, Defendants maintain that no protected activity has been alleged, and that Plaintiff’s
retaliation claim must be dismissed.

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Motion to Dismiss Standard
In order to survive a Rule 12(b)(6) motion to dismiss, “a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (citing Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)). A
claim is plausible if it contains “factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Id., 129 S. Ct. 1937. As a
general rule, “when ruling on a Rule 12(b)(6) motion to dismiss, the district court may not look
beyond the pleadings.” Hicks v. Lingle, 370 F. App’x 497, 498 (5th Cir. 2010) (citing Cinel v.
Connick, 15 F.3d 1338, 1341 (5th Cir. 1994)).
Ultimately, the court’s task “is to determine whether the plaintiff has stated a legally
cognizable claim that is plausible, not to evaluate the plaintiff’s likelihood of success.” In re
McCoy, 666 F.3d 924, 926 (5th Cir. 2012), cert. denied, 133 S. Ct. 192, 184 L. Ed. 2d 38 (2012),
(citing Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010)).
Therefore, the Court must accept all well-pleaded facts as true and must draw all reasonable
inferences in favor of the plaintiff. Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232-33 (5th
Cir. 2009). Still, this standard “demands more than an unadorned, the-defendant-unlawfullyharmed-me accusation.” Iqbal, 556 U.S. at 678, 129 S. Ct. 1937.
Discussion and Analysis
The Fair Housing Act, enacted as Title VIII of the Civil Rights Act of 1968, effectuates
the Congressional policy of achieving “truly integrated and balanced living patterns.” Trafficante
v. Metropolitan Life Ins. Co., 409 U.S. 205, 212, 93 S. Ct. 364, 34 L. Ed. 2d 415 (1972)
(quotation and citation omitted). Three specific provisions of the Act bear on the Court’s analysis

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in this case. Section 3617 makes it is illegal “to coerce, intimidate, threaten, or interfere with any
person in the exercise of enjoyment of . . . or on account of his having aided or encouraged any
other person in the exercise or enjoyment of, any right granted or protected by section 3603,
3604, 3605, or 3606” of the Fair Housing Act. (emphasis added). Section 3604(a) prohibits
making unavailable or denying “a dwelling to any person because of race, color, religion, sex,
familial status, or national origin.” And Section 3604(b) makes it unlawful to “discriminate
against any person in the terms, conditions, or privileges of sale or rental of a dwelling because
of race, color, religion, sex, familial status, or national origin.”
To state a retaliation claim under Section 3617 as Plaintiff seeks to do here, he must
establish (1) that he was engaged in an activity protected by the Fair Housing Act; (2) that
Criterion took adverse action against him; and (3) that a causal connection existed between the
protected activity and the adverse action. N.A.A.C.P. v. City of Kyle, Tex., No. A-05-CA-979-LY,
2009 WL 6574497, at *4 (W.D. Tex. Mar. 20, 2009) (citing DuBois v. Ass’n of Apartment
Owners of 2987 Kalakaua, 453 F.3d 1175, 1180 (9th Cir. 2006), cert. denied, 549 U.S. 1216,
127 S. Ct. 1267, 167 L. Ed. 2d 92 (2007)). For purposes of their motion to dismiss, Defendants
solely argue that Plaintiff has failed to allege a protected activity under the Fair Housing Act.
Plaintiff contends that he engaged in protected activity by protesting Criterion’s failure to
exclude sex offenders from its premises, and by explaining that Criterion’s inaction endangered
women. Plaintiff has not stated in his amended complaint, nor does he argue in response to this
motion, that the failure to conduct background checks actually violated Section 3604(a) or (b)
Fair Housing Act. Rather, he urges that his “reasonable belief” of unlawful gender discrimination
qualifies as protected activity under Section 3617.

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At least two federal district courts outside the Fifth Circuit have applied the “reasonable
belief” standard from Title VII by analogy to Fair Housing Act retaliation claims, even though
the language of Title VII’s anti-retaliation provision is different from that of Section 3617 of the
Fair Housing Act.2 Ponce v. 480 E. 21st St., LLC, No. 12-CV-4828-ILG, 2013 WL 4543622, at
*3 (E.D.N.Y. Aug. 28, 2013); Broome v. Biondi, 17 F. Supp. 2d 211, 219 (S.D.N.Y. 1997).
Under Title VII, an employee who opposes an unlawful employment practice is protected so
long as she possesses a “‘reasonable belief’ that the employer was engaged in unlawful
employment practices.” Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 348 (5th Cir.
2007) (citing Byers v. Dallas Morning News, 209 F.3d 419, 428 (5th Cir. 2000)).
In the Fifth Circuit, however, it is less clear whether a “reasonable belief” of unlawful
conduct is sufficient to trigger Section 3617’s protections. An unreported decision suggests that
an actual violation of the Fair Housing Act is an essential condition to recovery under Section
3617. McZeal v. Ocwen Financial Corp., 252 F.3d 1355, *2 (5th Cir. 2001) (“Because his §
3605 claim fails, [Plaintiff’s] claim under § 3617 must also fail.”). And citing McZeal, the Sixth
Circuit stated: “the Fifth Circuit ha[s] held that a violation of §§ 3603-3606 is indispensable to a
§ 3617 claim.”3 Hidden Village, LLC v. City of Lakewood, Ohio, 734 F.3d 519, 529 (6th Cir.
2013). Thus, within the Fifth Circuit, Section 3617 arguably does not protect one who advocates
against practices that he reasonably but erroneously believes violate the Fair Housing Act.

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Title VII makes it unlawful “to discriminate against” an employee “because he has opposed any practice made an
unlawful employment practice” under the statute. 42 U.S.C. § 2000e-3(a). As stated above, under the Fair Housing
Act, it is illegal “to coerce, intimidate, threaten, or interfere with” a person “on account of his having aided or
encouraged” another “in the exercise or enjoyment” of rights afforded by the Fair Housing Act. 42 U.S.C. §3617.
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The Sixth and Seventh Circuits have both rejected this holding in McZeal, explaining that Section 3617 could
support a freestanding cause of action, even where no other Fair Housing Act violation is identified. Bloch v.
Frischholz, 587 F.3d 771, 781 (7th Cir. 2009) (en banc); Hidden Village, LLC v. City of Lakewood, Ohio, 734 F.3d
519, 528-29 (6th Cir. 2013).

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Even if the “reasonable belief” standard were available for Fair Housing Act retaliation
claims, Plaintiff’s complaint falls short. A belief of discrimination “is not reasonable if the law is
settled that the . . . practice complained of is not unlawful . . . .” Kummerle v. EMJ Corp., 3:11CV-2839-SAF, 2012 WL 2995065, at *4 (N.D. Tex. July 23, 2010) (granting motion for
judgment on the pleadings and noting “[a] plaintiff’s belief is not objectively reasonable if the
law is settled that the . . . practice complained of is not unlawful . . . .”), aff’d, 538 F. App’x 373,
374 (5th Cir. 2013); Wilson v. Delta State Univ., 143 F. App’x 611, 613 (5th Cir. 2005) (holding
that a belief of discrimination contrary to “settled law in this Circuit” was objectively
unreasonable); see also Clark Cnty. Sch. Dist. v. Breeden, 532 U.S. 268, 270-71, 121 S. Ct. 1508
(2001) (“No reasonable person could have believed that the single incident [of complained
sexual harassment] violated Title VII’s standard.”); Satterwhite v. City of Houston, 602 F. App’x
585, 588 (5th Cir. 2015) (“No reasonable person would believe that the single ‘Heil Hitler’
incident [in the workplace] is actionable under Title VII.”). As previously discussed, Plaintiff
orally claimed that Criterion’s failure to conduct background checks endangered women, and
even cited the Fair Housing Act in his letter. But these charges, even if true, would not constitute
Fair Housing Act discrimination.
The Fifth Circuit and district courts within it have held that the relevant provisions of the
Fair Housing Act, Sections 3604 and 3617, prohibit discrimination related to the availability, and
not merely the habitability, of housing. Cox v. City of Dallas, Tex., 430 F.3d 734, 741, 746 (5th
Cir. 2005) (holding that Section 3604(a) and (b) do not apply to claims for mere decreased
“value” or “habitability”); Reule v. Sherwood Valley I Council of Co-owners Inc., 235 F. App’x
227, 227-28 (5th Cir. 2007), cert. denied, 552 U.S. 1320, 128 S. Ct. 1890, 170 L. Ed. 2d 761
(2008) (“[Plaintiff’s] claims under §§ 3604 and 3617 of the FHA fail because they go to the

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‘habitability’ of her condominium and not to the availability of housing.”); AHF Cmty. Dev.,
LLC v. City of Dallas, 633 F. Supp. 2d 287, 302-03 (N.D. Tex. 2009) (requiring that the
defendant’s conduct “make housing unavailable, not merely less habitable” for claims under
Section 3604(a) and (b) and Section 3617); Terry v. Inocencio, 3:11-CV-0660-RHT, 2014 WL
4686570, at *10 (S.D. Tex. Sept. 2, 2014) (“[T]he scope of Section 3617 tracks that of Section
3604—habitability claims are only actionable . . . if they rise to a level severe enough to make
residence unavailable.”).
Two cases bear out this principle. In Cox, black plaintiffs sued the City of Dallas,
alleging that it racially discriminated by failing to police an illegally operated dump near their
neighborhood. 430 F.3d at 736. The Fifth Circuit explained that Plaintiff’s claims went to the
“value” or the “habitability” of their houses, not to the “availability,” and that recovery was not
permitted. Id. at 740-47. Similarly, in AHF, the plaintiff alleged that the City of Dallas harassed
the owners, managers, and residents of a predominately minority housing community. 633 F.
Supp. 2d at 291, 300. The plaintiff contended that a team commissioned by the City and Dallas
Police Officers “treated residents in an overbearing, obnoxious, and/or disrespectful manner”
while performing a “community walk” designed to compile a list of allegedly frivolous code
violations. Id. The Northern District of Texas held that such conduct may have made the living
conditions less desirable, but did not rise to the level of constructive eviction, or otherwise
implicate the availability of housing. Id. at 301-03.
Plaintiff’s oral and written assertions that Criterion violated the Fair Housing Act by
endangering women fall squarely within the holdings in Cox and AHF. Plaintiff did not insist
that any women were denied access to housing. He did not complain that any women were
actually subject to sexual harassment or to constructive eviction. He merely stated “that allowing

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sex offenders to reside at the apartments was a danger to all female residents of The Pointe.”
Plaintiff’s protests relate to habitability, not to availability. His complaints to Criterion would not
give rise to a cognizable claim under clear Fifth Circuit authority. See Cox, 430 F.3d at 740-47.
Accordingly, even if the “reasonable belief” standard is viable for Fair Housing Act
retaliation claims, Plaintiff’s alleged subjective belief of unlawful discrimination contrary to
settled law “could not have been reasonable.” Wilson, 143 F. App’x at 613. Plaintiff has,
therefore, failed to plausibly allege any activity protected by Section 3617, and Rule 12(b)(6)
dismissal is appropriate.
Conclusion
For the reasons set forth in this opinion, Defendants’ Motion to Dismiss [6] Plaintiff’s
federal claim is GRANTED. A separate order to that effect shall issue this day.
SO ORDERED, this the 4th day of January, 2016.

/s/ Sharion Aycock
UNITED STATES DISTRICT JUDGE

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