REACH Counseling Services v. City of Bedford, Ohio

Filing 63

Opinion and Order. Plaintiff's Motion for Leave to File Third Amended Complaint (Related doc # 50 ) is denied. Defendant City of Bedford's Motion to Dismiss Second Amended Complaint (Related doc # 58 ) is denied. Judge Christopher A. Boyko on 6/4/2018. (H,CM)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

REACH COUNSELING SERVICES,
Plaintiff,
vs.
CITY OF BEDFORD, OHIO,
Defendant.

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CASE NO. 1:15CV2351
JUDGE CHRISTOPHER A. BOYKO
OPINION AND ORDER

CHRISTOPHER A. BOYKO, J.:
This matter comes before the Court upon the Motion (ECF DKT #50) of Plaintiff
REACH Counseling Services for Leave to File Third Amended Complaint and the Motion
(ECF DKT #58) of Defendant City of Bedford to Dismiss Plaintiff’s Second Amended
Complaint. For the following reasons, the Motions are denied.
I. BACKGROUND
Plaintiff, REACH Counseling Services (“REACH”), is a non-profit organization
licensed by the Ohio Department of Mental Health and Addiction Services (“OMHAS”).
REACH provides housing, supervision, counseling and twenty-four-hour personal care
services to disabled children in a family-style setting. REACH, partnered with Education

Alternatives, another non-profit organization that assists disabled children, applied to Bedford
to operate a Type I group home at 314 Union Street, Bedford, Ohio. REACH filed a
conditional use application. On May 12, 2015, Bedford granted REACH a reasonable
accommodation for a conditional use of the Union Street Home in a zoning-group R-2
residential area, with the caveat that REACH comply with the requirements of the Building,
Fire and Engineering Departments.
Bedford further advised REACH that the City would issue a Certificate of Occupancy
under the Residential Code for no more than five lodgers or boarders. REACH sought to
increase the occupancy from five residents to seven. Bedford denied a Certificate of
Occupancy for seven residents in the Union Street Home because it lacked the automatic
sprinkler system required by the more stringent Ohio Commercial Building Code.
REACH appealed to the Planning Commission and requested that the City grant a
reasonable accommodation to permit seven children to reside at the Union Street Home under
the Ohio Residential Code. On November 12, 2015, REACH’s appeal was denied.
Following the denial, this lawsuit was filed on November 17, 2015. REACH alleged that the
City of Bedford violated state and federal fair housing laws.
REACH sought additional review from the Ohio Board of Building Appeals in early
2016. REACH argued the significant financial burden of complying with the Ohio Building
Code, mandating the installation of a costly fire suppression system which would otherwise
not be required of single-family homes with seven occupants. On April 13, 2016, the Board
upheld Bedford’s Building Commissioner’s decision denying the Certificate of Occupancy.
On April 27, 2016, REACH’s partner, Education Alternatives, filed an administrative

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appeal with the Cuyahoga County Common Pleas Court, appealing the decision of the Board
of Building Appeals. (Case No. CV-16-862467).
On April 29, 2016, REACH filed its First Amended Complaint in this action (ECF
DKT #16), which superceded its original Complaint. REACH alleged that Bedford’s Zoning
Ordinances and Building Codes discriminate against disabled individuals, preventing them
and their housing providers from living where they choose and enjoying the same use of their
property experienced by non-disabled City residents. Bedford’s application of its Building
Codes is unlawfully restrictive and operates to force REACH (and the disabled population it
serves) out of the City. REACH claimed to have suffered irreparable injury and lost income
and goodwill. REACH sought injunctive relief, declaratory judgment and damages.
On February 28, 2018, REACH filed its Second Amended Complaint for Preliminary
and Permanent Injunctive Relief, Declaratory Judgment and Damages. This current
Complaint adds the State of Ohio as a party but the substantive claims continue to focus on
the City of Bedford’s conduct. REACH alleges violations of the federal Fair Housing Act,
violations of Ohio’s Fair Housing Act and constitutional violations under 42 U.S.C. § 1983.
REACH now seeks leave to file a Third Amended Complaint adding Education
Alternatives as a party plaintiff; asserting claims relating to Bedford’s allegedly unlawful
Criminal Activity Nuisance Ordinance (“CANO”) and Bedford’s alleged campaign of
harassment and discrimination; and clarifying the bases upon which Bedford’s group home
ordinance is unconstitutional.
Bedford opposes the amendment and seeks dismissal of the Second Amended
Complaint on the grounds of res judicata and mootness.

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II. LAW AND ANALYSIS
Motion to Amend
Fed.R.Civ.P. 15(a)(2) reads in part, “The court should freely give leave [to amend]
when justice so requires.” However, this liberal amendment policy is not without limits. The
Sixth Circuit has observed: “A motion to amend a complaint should be denied if the
amendment is brought in bad faith, for dilatory purposes, results in undue delay or prejudice
to the opposing party, or would be futile.” Colvin v. Caruso, 605 F.3d 282, 294 (6th
Cir.2010) (citing Crawford v. Roane, 53 F.3d 750, 753 (6th Cir.1995)).
In the instant matter, Bedford contends that the proposed amendment is futile and
would cause prejudice and undue delay.
Delay, by itself, “does not justify denial of leave to amend.” Morse v. McWhorter,
290 F.3d 800 (6th Cir.2002).
“In determining what constitutes prejudice, the court considers whether the assertion
of the new claim or defense would: require the opponent to expend significant additional
resources to conduct discovery and prepare for trial; significantly delay the resolution of the
dispute; or prevent the plaintiff from bringing a timely action in another jurisdiction.” Phelps
v. McClellan, 30 F.3d 658, 663 (6th Cir.1994).
“A proposed amendment is futile if the amendment could not withstand a Rule
12(b)(6) motion to dismiss.” Cicchini v. Blackwell, 127 F.App’x 187, 190 (6th Cir. 2005)
citing Ziegler v. IBP Hog Market, Inc., 249 F.3d 509, 518 (6th Cir. 2001).
At the time of its original Complaint filed in 2015, REACH acknowledged its
partnership with Education Alternatives; yet REACH did not join Education Alternatives as a

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party plaintiff.
Once again, Education Alternatives was not added in the First Amended Complaint
filed on April 29, 2016.
For a period of time from February 16, 2017 until May 25, 2017, the captioned case
was stayed while Education Alternatives pursued an administrative appeal of the decision of
the Board of Building Appeals relating to the same group home at issue here. Upon
reinstatement, a Case Management Conference was conducted and a schedule was set.
REACH did not move to join Education Alternatives.
On September 26, 2017, the Court sua sponte entered an Order asking the parties to
address the standing issue raised by the interplay of REACH and Education Alternatives. The
parties filed their respective briefs. In December 2017, the Court accepted REACH’s position
that it has standing to maintain this action. However, the Court warned that Article III
standing is a crucial component of federal court subject matter jurisdiction and REACH must
be able to demonstrate that subject matter jurisdiction exists throughout the pendency of the
litigation. The Court vowed to monitor REACH’s standing vigilantly.
In January 2018, REACH filed a Second Amended Complaint which was stricken for
exceeding the scope of the Court’s leave.
Not until February 28, 2018, did REACH appropriately seek to amend in order to add
Education Alternatives as a party plaintiff. The proposed amendment also challenges
Bedford’s allegedly discriminatory enforcement of its CANO against Plaintiffs, stemming
from a January 2017 incident at which Education Alternatives was fined by the City.
The request by Plaintiff REACH is too late and would result in unfair prejudice.

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The Court agrees with Bedford that after more than two years of litigation over the
group home at 314 Union Street, REACH now looks to expand the scope of this case to
include a new party and entirely new theories of liability. With a November 13, 2018 trial
date approaching, REACH wants to pursue claims against Bedford involving the
constitutionality of a nuisance ordinance and the City’s supposed campaign of harassment and
discrimination against Education Alternatives. These allegations encompass different time
frames than have been relevant to the occupancy/use dispute proceeding here since 2015;
require discovery of a different set of documents and depositions of a new set of witnesses;
and involve City departments and personnel other than the Building Department.
Although amendments should be liberally granted, the Court cannot ignore the
countervailing factors here. REACH has been dilatory in joining Education Alternatives as a
party. The City of Bedford should not, in fairness, be compelled to expend significant
additional resources to confront new witnesses and claims at this late date. Finally, this
litigation is proceeding to a trial in five months and neither party should want to inhibit the
ultimate resolution of this 2015 case by the end of this calendar year.
Therefore, the Motion (ECF DKT #50) of Plaintiff REACH Counseling Services for
Leave to File Third Amended Complaint is denied.
Motion to Dismiss
“In reviewing a motion to dismiss, we construe the complaint in the light most
favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in
favor of the plaintiff.” Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007). Factual
allegations contained in a complaint must “raise a right to relief above the speculative level.”

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Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). Twombly does not “require heightened fact
pleading of specifics, but only enough facts to state a claim to relief that is plausible on its
face.” Id. at 570. Dismissal is warranted if the complaint lacks an allegation as to a necessary
element of the claim raised. Craighead v. E.F. Hutton & Co., 899 F.2d 485 (6th Cir. 1990).
The United States Supreme Court, in Ashcroft v. Iqbal, 556 U.S. 662 (2009), discussed
Twombly and provided additional analysis of the motion to dismiss standard:
In keeping with these principles a court considering a motion to
dismiss can choose to begin by identifying pleadings that, because
they are no more than conclusion, are not entitled to assumption of
truth. While legal conclusions can provide the framework of a
complaint, they must be supported by factual allegations. When
there are well-plead factual allegations a court should assume their
veracity and then determine whether they plausibly give rise to an
entitlement to relief.
Id. at 1950.
When a court is presented with a Rule 12(b)(6) motion, it may consider the complaint
and any exhibits attached thereto, public records, items appearing in the record of the case and
exhibits attached to defendant’s motion to dismiss so long as they are referred to in the
complaint and are central to the claims contained therein. See Amini v. Oberlin Coll., 259
F.3d 493, 502 (6th Cir. 2001).
Defendant City of Bedford moves to dismiss Plaintiff’s Second Amended Complaint,
contending that res judicata precludes its claims, that REACH is in privity with Education
Alternatives, that declaratory relief is moot because Bedford Ordinance 1915.24 has been
amended and that REACH cannot demonstrate the necessary individual, particularized harm
to support standing.
Application of the res judicata doctrine and of claim preclusion based upon privity of
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the parties will require the Court to analyze all the relevant facts surrounding the
administrative proceedings and Cuyahoga County Court of Common Pleas litigation arising
out of the use and occupancy of the group home at 314 Union Street in Bedford, Ohio.
Furthermore, Bedford’s arguments that the claim for a declaration on the constitutionality of
Bedford Ordinance 1915.24 is moot because it has been amended and that REACH has no
standing to challenge constitutionality because REACH has not suffered compensable,
particularized injury both necessitate the Court’s examination of facts which have not been
fully developed and are not clear in the four corners of the Second Amended Complaint.
The facts alleged are sufficient to recite plausible claims for relief. Therefore, the
Motion (ECF DKT #58) of Defendant City of Bedford to Dismiss Plaintiff’s Second
Amended Complaint is denied.
IT IS SO ORDERED.

s/ Christopher A. Boyko
CHRISTOPHER A. BOYKO
United States District Judge
Dated: June 4, 2018

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