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Advocates for Individuals with Disabilities Foundation Inc. v. Golden Rule Properties LLC

United States District Court, D. Arizona

October 13, 2016

Advocates for Individuals with Disabilities Foundation Incorporated, Plaintiff,
v.
Golden Rule Properties LLC, Defendant.

          ORDER

          HONORABLE G. MURRAY SNOW UNITED STATES DISTRICT JUDGE

         On August 25, 2016, this Court issued an Order for the Plaintiffs to Show Cause as to why this case should not be dismissed for lack of standing. (Doc. 22.) For the following reasons, the Court remands the case to state court, awards fees to the Defendant pursuant to 18 U.S.C. § 1447, and issues sanctions against the Plaintiff's counsel pursuant to 28 U.S.C. § 1927.

         BACKGROUND

         Plaintiff Advocates for Individuals with Disabilities (“AID”) is a non-profit charitable organization that advocates for disabled individuals. It is represented by attorneys Peter Strojnik and Fabian Zazueta, who also make the decisions on behalf of the client. Part of AID's strategy involves filing law suits against local businesses that violate the Americans with Disabilities Act (“ADA”) and similar state statutes. To date, 162 of these claims have been filed in or removed to this Court, and approximately one thousand of such claims have been filed in state court. Each claim's complaint contains the same general language alleging that the local business violated the ADA by having inadequate signage or parking spaces for disabled individuals.

         AID filed a complaint against Defendant Golden Rule Properties LLC (“Golden Rule”) on June 9, 2016 in Maricopa County Superior Court. (Doc.1.) The complaint stated that Defendant Golden Rule's parking lot failed to comply with the ADA and the Arizona Disability Act because it failed to “identify car parking spaces by the designation ‘van accessible' and or fails to maintain the minimum height of 60 inches” above the floor. (Doc. 1, Ex. 1 at 5.)

         The complaint does not allege that any disabled individual encountered the Defendant's defective signage. Rather, it asserts that “Plaintiff, who is known to have a relationship or association with individuals with disabilities, ” (Doc. 1, Ex. 1 at 5), investigated the Defendant's business and found that it “was not accessible to persons with disabilities.” (Id.) Because these general allegations do not illustrate that AID has a “concrete and particularized” injury that affects it “in a personal and individual way, ” the Court ordered AID to show cause why this case should not be dismissed for lack of standing.

         Furthermore, AID's pre- and post- removal conduct demonstrates an attempt to increase the costs of litigation to maximize Defendants desire to settle the suit due to the cost of defense. Because Golden Rule's counsel had represented other defendants in cases brought by the Plaintiff and had defendants dismiss the federal claim immediately upon removal to federal court to require remand of the remaining state law disability claim to state court, Golden Rule reached out to AID and its counsel to determine their intent to proceed with the federal claim prior to initiating the removal process. (Doc. 22 at 13.) Defense counsel suggested a willingness to stipulate to a dismissal of the federal court claim to avoid the incurred expense and time of removal, dismissal and remand. AID assured Golden Rule and its counsel that it intended to proceed with the federal claim. (Id.) Yet immediately following removal, AID moved to dismiss the federal claim. (Id.) In light of these events, the Court also ordered AID to show cause why AID should not bear the costs of removal and why its counsel should not be sanctioned for their actions pursuant to 28 U.S.C. § 1927.

         DISCUSSION

         I. Plaintiff Lacks Article III Standing, and Thus This Case is Remanded to State Court.

         “To invoke the jurisdiction of the federal courts, a disabled individual claiming discrimination must satisfy the case or controversy requirement of Article III by demonstrating his standing to sue at each stage of litigation.” Chapman v. Pier 1 Imports (U.S.) Inc., 631 F.3d 939, 946 (9th Cir. 2011) (en banc). After reviewing Plaintiff's response to the Order to Show Cause, hearing oral arguments, and reviewing the supplemental briefings, the Court finds that AID does not have standing to pursue this suit.

         An association may sue on behalf of one of its injured members if “(a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” Hunt v. Wash. State Apple Advert. Comm'n, 432 U.S. 333, 343 (1977). This analysis also applies to situations where the organization does not have traditional “members, ” provided that the purported constituency “possess[es] all of the indicia of membership” in an organization. Id. at 344.

         A. Plaintiff does not Allege Sufficient Facts to Assert that Either Ms. Puckett or Mr. Ritzenthaler is a Member of AID.

         Nonprofit corporations may file lawsuits on behalf of their members even if it does not have members in the traditional sense. See Sierra Ass'n for Env't v. F.E.R.C., 744 F.2d 661, 662 (9th Cir. 1984) (allowing a California corporation to file suit as an unincorporated association due to the presence of federal question jurisdiction). However, in these situations, a nonprofit must still allege sufficient facts to show that a purported member “possess[es] many indicia of membership-enough to satisfy the purposes that undergird the concept of associational standing: that the organization is sufficiently identified with and subject to the influence of those it seeks to represent as to have a personal stake in the outcome of the controversy.” Oregon Advocacy Ctr. v. Mink, 322 F.3d 1101, 1111 (9th Cir. 2003) (internal quotations and citations omitted).

         The Supreme Court provided examples of relevant “indicia of membership” in Hunt. 432 U.S. at 344-45. Key factors include whether the proposed constituency maintained control over who was elected to leadership of the association, if the proposed constituency was the only group that could service on the leadership board, and whether the proposed constituency financed the association's activities (including litigation). Id. The analysis turns on whether the ...


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