United States District Court, N.D. California, San Jose Division
July 18, 2014
LINCOLN JONES, JR., et al., Plaintiffs,
TRAVELERS CASUALTY INSURANCE COMPANY OF AMERICA, Defendant.
ORDER GRANTING PLAINTIFFS' MOTION TO COMPEL (RE: DOCKET NO. 34)
PAUL S. GREWAL, Magistrate Judge.
Before the court is Plaintiffs Lincoln Jones, Jr., Muyesser Nile Jones and Project Sentinel, Inc.'s motion to compel production of unredacted documents and underlying files related to non-party insured landlords. Defendant Travelers Casualty Insurance Company of America opposes. The parties appeared for a hearing this morning. After considering the arguments, the court GRANTS Plaintiffs' motion, as explained below.
Plaintiffs own and operate two small apartment buildings located on the same block - Cody Way - in San Jose, California. Plaintiffs insure the Cody Way apartments, as required by their mortgage lender. Their tenants include participants in the Housing Choice Voucher Program ("Section 8") operated by the Housing Authority of the County of Santa Clara. In February 2012, Plaintiff Muyesser Jones purchased an "Apartment Pac" property and liability policy for the Cody Way apartments from Travelers. In August 2012, a visitor to the Cody Way apartments slipped and fell and Mrs. Jones notified Travelers of a potential claim. While investigating that potential claim, Travelers learned that the Joneses rented the Cody Way apartments to Section 8 tenants. On November 16, 2012, Travelers notified the Joneses that Travelers would not renew its policy for the Cody Way apartments effective February 1, 2013. The Joneses obtained replacement insurance with premiums above than the non-renewed Travelers policy.
Plaintiffs bring claims for (1) violation of the federal Fair Housing Act ("FHA") and (2) violation of California's Fair Employment and Housing Act ("FEHA"). Plaintiffs' prayer seeks equitable relief, attorney's fees and compensatory and punitive damages.
II. LEGAL STANDARDS
A. Motion to Compel
The Federal Rules of Civil Procedure provide parties "may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense." "Once the moving party establishes that the information requested is within the scope of permissible discovery, the burden shifts to the party opposing discovery." "An opposing party can meet its burden by demonstrating that the information is being sought to delay bringing the case to trial, to embarrass or harass, is irrelevant or privileged, or that the person seeking discovery fails to show need for the information."
B. FHA and FEHA
The FHA and FEHA prohibit discrimination against "any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race, color, religion, sex, familial status, or national origin." FEHA also prohibits discrimination on the basis of age. The Ninth Circuit applies Title VII-like discrimination analysis in examining FHA discrimination claims. A plaintiff can establish an FHA discrimination claim under a theory of either disparate treatment or disparate impact.
Plaintiffs seek (1) unredacted documents revealing the identity of other landlords subject to the same Travelers' insurance practices and (2) files reflecting Travelers' treatment of similarly situated landlords who were subject to the same Travelers' insurance practices. Although Travelers argues that the names, addresses and underwriting files of non-party insureds have no relevance to the claims asserted by Plaintiffs - it is undisputed that subsidized, public or government-funded complexes are presumptively ineligible for Travelers' Apartment Pac policies - Travelers has the discretion to grant authority to agents on a case-by-case basis to underwrite insurance to apartment complexes with Section 8 tenants. The requested discovery will probe the circumstances in which Travelers exercised that discretion in the context of Section 8 housing applications. In particular, the discovery may shed light on whether decisions were driven "based in large part on stereotypes unsupported by objective fact" running afoul of federal and California law.
The fact that Travelers has already identified numerous situations in which it non-renewed, investigated or refused to insure landlords with Section 8 or other subsidized tenants distinguishes this case from Dawson v. New Life Cmty. Servs., Inc.  In Dawson, this court refused to compel the defendant to provide discovery regarding witnesses to other "similar" events because there was no evidence that any "similar" events had occurred.
In addition, the fact that this action is brought by two individuals and a non-profit organization rather than on behalf of a class or by a government agency does not limit plaintiffs' right to broad discovery. For example, in Dunn v. Midwestern Indem., a Dayton, Ohio couple sued several insurance companies after they were denied homeowners insurance, alleging that the denial was the result of unlawful redlining on the basis of race in violation of the FHA. The insurers objected to the plaintiffs' request for the production of computer tapes containing information about past and present policy holders in the Dayton area, characterizing it as "class action-type