Alcaraz v. KMF Oakland LLC

Background

Bernardo Alcaraz, representing himself, sued KMF Oakland LLC and later added Altezza Condo LLC. He alleged that defendants discriminated against him because of his race, color, and/or national origin by refusing to sell him the residence he occupied. His remaining claims were under the federal Fair Housing Act, the Fourteenth Amendment’s Due Process Clause, and for injunctive relief.

Alcaraz alleged that KMF owned the 33-unit residential complex where he and his family had lived since August 2010. He claimed that KMF began refusing his rent checks, initiated an unlawful-detainer case, and later obtained a judgment of possession. While that case was pending, KMF sold the building to Altezza. Alcaraz alleged that the units were later sold as condominiums, but that none were sold to a buyer of Hispanic and/or Mexican origin. He also alleged that Altezza’s representative offered to sell him his unit for $630,000 and that he accepted, but the sale did not occur. Altezza denied making that offer.

Alcaraz sought a temporary restraining order to prevent Altezza from enforcing a writ of possession concerning his residence. He argued that eviction and the possible sale of the unit would cause irreparable harm, including loss of the opportunity to buy the home. Altezza opposed the request, arguing that the requirements for emergency relief were not met and that Alcaraz had not followed certain procedural requirements. KMF had not appeared in the federal case.

Legal standard

A temporary restraining order is an extraordinary form of preliminary relief. The court generally considers whether the plaintiff is likely to succeed on the merits, likely to suffer irreparable harm without relief, whether the balance of equities favors the plaintiff, and whether an injunction serves the public interest. Alternatively, the plaintiff may show serious questions going to the merits and that the balance of hardships sharply favors the plaintiff, while also satisfying the requirements concerning irreparable harm and the public interest.

The Fair Housing Act prohibits refusing to sell or rent, refusing to negotiate, making a dwelling unavailable, or discriminating in the terms or conditions of a sale or rental because of race, color, religion, sex, familial status, disability, or national origin. The court described the Ninth Circuit’s use of a burden-shifting framework for Fair Housing Act discrimination claims. Under that framework, a plaintiff first establishes an initial showing of discrimination and injury; the defendant may then give a legitimate, nondiscriminatory explanation; and the plaintiff may attempt to show that explanation is a pretext, meaning a false reason masking discrimination.

Court’s analysis

The court concluded that a temporary restraining order should issue because Alcaraz had shown serious questions about the merits and the balance of hardships favored him. The court noted allegations that all units in the complex had been sold as condominiums except Alcaraz’s unit, that none of the buyers were Hispanic and/or Mexican, and that a KMF property manager had made statements Alcaraz viewed as reflecting discriminatory attitudes. The court also considered the allegations concerning refusal of rent checks and the resulting possession proceedings.

The court stated that the complaint’s allegations could have been stronger, but emphasized that Alcaraz was representing himself, Altezza had only recently been added as a defendant, and discovery had not occurred. For those reasons, the court found it premature to conclude that Alcaraz had shown no likelihood of success, as Altezza argued.

The court determined that the remaining factors also favored temporary relief. It found that Alcaraz could suffer irreparable harm if evicted and if the unit were sold, because he could then be unable to obtain all of the relief available under the Fair Housing Act. The court found that the harms identified by Altezza—lost rent and legal fees—could be compensated with money damages. It also found that the public interest favored enforcement of fair-housing protections.

Bond and order

Altezza argued that the application should be denied because Alcaraz had not posted security under Federal Rule of Civil Procedure 65(c). The court has discretion to set the amount of security, if any. Because Alcaraz stated that his monthly rent was $2,460 and did not claim that he could not afford a bond, the court required a $5,000 bond.

The court granted Alcaraz’s request for a temporary restraining order. It enjoined the defendants, their officers, agents, servants, employees, and attorneys, and the Alameda County Sheriff’s Office, from executing the possession order concerning Alcaraz’s residence at 6465 San Pablo Avenue, Unit 403, Oakland, California, pending resolution of Alcaraz’s motion for a preliminary injunction. The court scheduled the preliminary-injunction hearing for December 6, 2019, and set deadlines for the motion, opposition, and reply. The order stated that Altezza could file a motion to dismiss to be heard at the same time as the preliminary-injunction motion. The court did not make a final ruling on the Fair Housing Act claim.