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United States v. Dawn Properties, Inc.

United States District Court, S.D. Mississippi, Southern Division

February 2, 2015

UNITED STATES OF AMERICA, PLAINTIFF,
v.
DAWN PROPERTIES, INC.; SOUTHERN CROSS CONSTRUCTION COMPANY, INC.; RIDGELAND CONSTRUCTION ONE, LLC; THE BEACH CLUB, LLC; THE BEACH CLUB II, LLC; THE BELMONT OF LAMAR, LLC; GRAND BISCAYNE APTS., LLC; SEAINN, LLC. Defendants, AND SUMMER MISS, LLC; 14510 LEMONYE BOULEVARD, LLC; LEXINGTON MILL MISSISSIPPI OWNER, LLC; INN BY THE SEA HOME OWNERS ASSOCIATION, INC. RULE 19 DEFENDANTS

ORDER DENYING MOTION TO SEVER

LOUIS GUIROLA, Jr., Chief District Judge.

BEFORE THE COURT is the [171] Motion to Sever filed by Rule 19 Defendant Inn by the Sea Home Owners Association, Inc. ("Inn by the Sea HOA" or "the HOA"). The United States filed a Response to the Motion and the HOA filed a Rebuttal Memorandum. Having considered the submissions of the parties and the applicable law, the Court is of the opinion that the Motion should be denied because Inn by the Sea HOA has not carried its burden to show that a severance should be granted under Federal Rule of Civil Procedure 21.

BACKGROUND

The United States ("the Government") filed this action against Defendants Dawn Properties, Inc.; Southern Cross Construction Company, Inc.; Ridgeland Construction One, LLC; The Beach Club, LLC; The Beach Club II, LLC; The Belmont of Lamar, LLC; Grand Biscayne Apts., LLC; and SeaInn, LLC (collectively, the "Design and Construction Defendants"). The Government claims that the Design and Construction Defendants were related entities that were the owners, developers, and builders of several local residential multifamily dwellings. The Government seeks to hold the Design and Construction Defendants liable for purported violations of the Fair Housing Act (FHA) and the Americans with Disabilities Act (ADA). The Government also alleges that the Design and Construction Defendants engaged in a pattern and practice of discrimination in violation of the FHA and ADA, although it does not allege that SeaInn, LLC committed any ADA violations.

Pursuant to Federal Rule of Civil Procedure 19, the Government also named as Defendants Summer Miss, LLC; 14510 Lemoyne Boulevard, LLC; Lexington Mill Mississippi Owner, LLC; and Inn by the Sea HOA. The Government alleges that SeaInn, LLC, one of the Design and Construction Defendants, "was an owner and/or developer of Inn by the Sea and participated in the design and construction of the complex." (Compl. 5 (¶16), ECF No. 1). It further contends that Inn by the Sea HOA is the "current owner of the common property at Inn by the Sea and, in that capacity, is named as a necessary party to this lawsuit... in whose absence complete relief cannot be afforded to the" Government. ( Id. at 6 (¶20)).

SeaInn, LLC and Inn by the Sea HOA are represented by separate counsel. The Government does not allege that the HOA is liable for the purported FHA violations or even make any FHA allegations against the HOA. ( See Gov't Mem. 5, ECF No. 174). Instead, the Government seeks an order enjoining the Rule 19 Defendants, including Inn by the Sea HOA,

from engaging in conduct that denies access to the public and common use areas, the covered multifamily dwellings, or the public accommodations areas at the [subject] properties... under their ownership or management, and from engaging in any other action to impede any retrofits required to bring the properties, covered multifamily dwelling units, and public and common use areas into compliance with the [FHA]... in a prompt and efficient manner while minimizing inconvenience to the residents and visitors at the properties and to the Rule 19 Defendants.

(Compl. 19, ECF No. 1).

The Government states that the HOA

is in possession of information, and in control of property, that is relevant to the pattern or practice claims against the Design and Construction Defendants. The evidence of the Inn by the Sea property itself, including its construction and building records, is directly related to the United States' claims that in designing and constructing the Subject Properties, ... the Design and Construction Defendants engaged in a pattern or practice of discrimination....

(Gov't Mem. 5, ECF No. 174). The Government further states that it will need to inspect the public common use areas at Inn by the Sea as part of the discovery process, and, that, should the Government show that the Design and Construction Defendants "violated federal law when they designed and constructed covered multifamily dwellings, including Inn by the Sea, the [HOA] will be necessary to ensure that inaccessible conditions are remedied." ( See id. at 6-7).

Inn by the Sea HOA now requests that this Court sever all claims related to Inn by the Sea and consider those claims in a separate action.

DISCUSSION

The United States Supreme Court has stated that "the impulse is toward entertaining the broadest possible scope of action consistent with fairness to the parties; joinder of claims, parties and remedies is strongly encouraged." United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 724 (1966). Even so, Federal Rule of Civil Procedure 21 gives the Court authority to "sever any claim against a party." Fed.R.Civ.P. 21. "The court has broad discretion in matters of severance." Hodges v. Coldwell Banker Real Estate Corp. No. 4:05cv168-P-A, 2007 WL 1200118, at *1 (N.D. Miss. Apr. 19, 2007) (citing Brunet v. United Gas Pipeline Co., 15 F.3d 500 (5th Cir. 1994)). The movant ...


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