This week we take a look at a Ninth Circle decision examining the enforceability of an arbitration clause preventing one party from serving as a “private attorney general” and another examining whether that is Fair Housing Change Act provides liability for a landlord’s failure to conduct an interactive process with a disabled tenant.
DICARLO v MONEYLION, INC. The Court believes that an arbitration provision prohibiting the plaintiff from acting as a “private attorney general” is enforceable as the provision does not completely prevent the claimant from seeking injunctive relief on behalf of others.
The Panel: Judges Bea, Thapar (CA6) and Collins, Judge Thapar writes the opinion.
Most important highlight: “If there are still doubts, you should take this into account. Only an interpretation that public injunctive relief persists will make the arbitration provision “lawful” and “enact”. Cal. Civ. Code § 1643. And only this interpretation facilitates arbitration. Mitsubishi, 473 US at 626. Both California law and the FAA tell us what to do next – interpret the agreement to comply with McGill and allow arbitration. “
Background: Plaintiff Marggieh DiCarlo took out a $ 500 loan through MoneyLion Plus, a program designed to help individuals build positive credit histories. She signed a dispute settlement agreement. This provision expressly forbade a plaintiff to “act as a private attorney general” but also empowered the arbitrator to “grant any injunctive relief available in an individual lawsuit”. The contract also contained “poison pill” language that would invalidate the arbitration clause if any aspect of it was unenforceable.
Within a few months, DiCarlo was unable to pay MoneyLion’s fees but was unable to cancel her enrollment in the program. She filed a lawsuit claiming MoneyLion violated California law by creating a “high-tech debt trap.” The district court granted MoneyLion’s motion to enforce arbitration and dismissed the case.
Result: The ninth circuit is confirmed. The court first stated that if the arbitration rule prohibits any “public injunction” – that is, any injunction that would benefit anyone other than the plaintiff – it violates California law that prohibits such waiver (a rule the Ninth District had previously enacted) missed preliminary decision under the Federal Arbitration Act). The central question, therefore, was whether the arbitration provision violated California law by prohibiting DiCarlo from serving as “private attorney general” and limiting her remedies to those available in a “individual lawsuit” by prohibiting “public injunctive relief”.
The Court concluded that the arbitration provision did not have that effect. First, the court interpreted the contractual use of the term “individual action” in such a way that DiCarlo could not bring a class action, derivative action, or join other plaintiffs. However, the sentence did not limit the remedy a plaintiff could seek in such a “individual action”.
Next, the court turned to the more difficult question of what the treaty meant by banning DCarlo from acting as a “private attorney general”. That sentence, the Ninth Circuit explained, generally referred to two related concepts: (1) actually injured claimants granted a legal right to challenge a lawsuit that did not violate their legal rights; and (2) plaintiffs who are eligible for legal fees (whether statutory or equity) when their action confirms a public interest.
Armed with this understanding, the Court concluded that the treaty did not prevent DiCarlo from making any “public injunctive relief” by banning “private attorneys general”. On the contrary, the California laws on which DiCarlo relied prohibited her from bringing an action “on behalf of the public” – which the court considered equivalent to the first type of “private attorney general” – but allowed her to obtain an injunction to seek relief that might benefit others. And the court went on to say that the second, paid understanding of the term “private attorney general” was not relevant as DiCarlo did not request fees and an injunction could be sought in cases where such fees were not available. The Court found that the surrounding terms of the contract – including the express authorization for injunctive relief – confirmed this narrower understanding of the term “private attorney general”. While recognizing the “appealing symmetry of DiCarlos’ theory between confirmed rights and requested relief,” the Court concluded that it must obey California law that “a person who seeks relief for the general public, only sues in her own name “. And because this reading made the arbitration provision enforceable, the Ninth Circle felt that it should be accepted.
HOWARD v HMK HOLDINGS, LLC The court finds that plaintiffs did not establish a causal link between an illness and the requested placement under a discrimination claim under the Fair Housing Amendments Act (FHAA) and that the FHAA does not impose independent liability for a landlord’s failure to interact with a tenant.
Panel: Judges Ikuta, Bennett and Woodlock (D. Mass.), Judges Bennett write the opinion.
The most important highlight: “The interactions between tenant and landlord are of course relevant – appropriateness and ‘accommodation’ cannot be determined in a vacuum. In essence, however, the FHAA does not forbid a landlord not to contact a tenant who requests accommodation that is neither legally nor factually justified. “
Background: Glenn Howard, wife Gale, and daughter Christine rented an LA home from HMK Holdings. The lease had a term of one year, followed by a monthly tenancy that can be terminated by either party. In January 2017, HMK proposed a new one-year lease with an increased rent. The Howards didn’t answer. HMK resent the proposed lease, telling the Howards that HMK would terminate the lease if they didn’t respond. HMK received no response and sent a 60-day notice of termination.
A few weeks later, Gale requested a two-month lease extension as a reasonable accommodation for Glenn’s disability – he had brain damage and had seizures. Gale stated that Glenn’s “neurologist is trying a new treatment [the family] believe[s] will allow him to move in July 2017. “HMK agreed, but said it would not grant another extension. At the end of June, Gale asked for a further extension “until his state of health has safely stabilized for his disability, after which the landlord will be notified”. The request contained a letter from Dr. Sung-Min Park, which states that Glenn “has a disease that needs to be tweaked before he can safely go on a long journey,” and that the landlord will be notified when Glenn is “adequately stabilized for a long trip. “HMK denied the request, describing it as” permanent accommodation “that” does not seem appropriate. “Gale then submitted another request for an extension, which included a letter from Dr. Kolar Murthy stating that Glenn’s health was” optimized must be before he can safely embark on a long journey. “HMK did not respond to this or any subsequent request, but instead filed a state lawsuit to regain possession of the property.
The Howards filed a lawsuit alleging that HMK had violated 42 USC § 3604 (f) (3) (B), which constitutes discrimination in the form of “the refusal to make reasonable accommodations in rules, policies, practices or services when Such precautions may be necessary to afford bans [a] Equal chance to use and enjoy an apartment. “The District Court gave HMK a summary judgment, concluding that the Howards were unable to demonstrate that Glenn’s state of health required an extension of their lease and that the FHAA does not impose independent liability for a landlord’s failure to work with one Interact tenants.
Result: The ninth circuit is confirmed. The Court first set out the elements of a right to discrimination under Section 3604 (f) (3) (B), focusing on the requirement that “an adjustment to rules, guidelines, practices or services is necessary in order to give Glenn equal opportunities offer to a non-disabled person to use and enjoy the house. “Since it was undisputed that the Howards refused a new lease for higher rent and their reason for doing so had nothing to do with Glenn’s disability, the court found that the relevant question was whether” The Howards requested that HMK upon termination of the The rental agreement stipulating an accommodation policy so that the Howards could stay in the apartment until January 22, 2018 was necessary to accommodate Glenn’s disability. “This” investigation is causal “, which checks whether the requested accommodation is available. . . would redress injuries that would otherwise prevent a disabled resident from enjoying the same enjoyment of property as a non-disabled person. “The court concluded that there was no causal link here as there was no evidence that Glenn had moved to another residence in LA would have endangered Glenn’s health or safety – the doctors’ letters only concerned long-distance travel. The stress and inconvenience of moving were not enough to make the accommodation “necessary” in the sense of the law.
The court also dismissed Howards’ argument that the FHAA “places a self-contained liability on a landlord for failing to conduct an interactive process with a disabled tenant, even if the tenant cannot demonstrate the need for accommodation”. The court found that it was a first impression issue on the ninth circuit and found that the text and the FHAA’s rules do not mention any “interactive process” between landlord and tenant. While tenant-landlord interactions were relevant to determining whether a lodging was appropriate, “the FHAA does not, at its core, prohibit a landlord from reaching out to a tenant requesting lodging that has no legal or factual basis.” Because “[t]The law makes it clear when there is liability that the Court lacks[ed] the power to expand the liability bases passed by Congress. “No court, said the Ninth Circle, has“ fashion[ed] an independent basis for liability for failure of landlords to inquire. “In the end, the court declined to trust the Americans with Disabilities Act or the Rehabilitation Act. According to the Court, those statutes are not directly relevant and even if they were, liability would “depend whether reasonable accommodation was possible and not just that the interactive process did not go through. “
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