Oliver v. City of Indio Plaintiffs' Memorandum in Support of Proposed Consent Decree
Public Court Documents
May 17, 1993
Cite this item
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Brief Collection, LDF Court Filings. Oliver v. City of Indio Plaintiffs' Memorandum in Support of Proposed Consent Decree, 1993. 8d7ef457-c09a-ee11-be36-6045bdeb8873. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/c2893846-4c78-41e0-a0a9-4bb1bb082efd/oliver-v-city-of-indio-plaintiffs-memorandum-in-support-of-proposed-consent-decree. Accessed July 01, 2025.
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Lc{«J D efense &
lo a d Pond, Inc.
: N inth S tre e t S uite 208
4 t* ,C A 90015
V-2405
BILL LANN LEE
CONSTANCE L. RICE
KEVIN S. REED
NAACP LEGAL DEFENSE AND
EDUCATIONAL FUND, INC.
315 West Ninth Street, Suite 208
Los Angeles, CA 90015
(213) 624-2405
iVIN IT BROGAN
GREGORY L. EVANS
HILL, FARRER & BURRILL
445 South Figueroa Street
Los Angeles, CA 90071-1666
(213) 620-0460
Attorneys for Plaintiffs
77 e .
etJTK.u. ° Fr£%- T
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- ............... 0 7 -
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
EARLINE OLIVER, et a!.,
Plaintiffs.
vs.
CITY OF INDIO, et al,
Defendants.
PASEO GROUP.
Intervenor-Defendant.
CASE NO. SA CV 90-0097 AHS
(RWRx)
PLAINTIFFS’ MEMORANDUM IN
SUPPORT OF PROPOSED
CONSENT DECREE
DATE: May 24, 1993
TIME: 11:00 a.m.
PLACE: Courtroom of the
Honorable Alicemarie H.
Stotler
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TABLE OF CONTENTS
I. INTRODUCTION ................................................................................................... 1
II. PRIOR PROCEEDINGS ....................................................................................... 1
III. STATEMENT OF FACTS ................................................................ 2
IV. THE CONSENT D ECREE..................................................................................... 5
A. Resident Homeowners ................................................................................. 5
B. Renters Residing in the Magnolia Court Public Housing Project ............. 6
C. Renters Residing Elsewhere in Nobles Ranch ........................................... 6
D. Replacement Housing................................................................................... 7
E. Intervening Churches ................................................................................... 7
1. Immediate R elief.............................................................................. 8
2. Replacement Facilities...................................................................... 8
F. Community Relief.......................................................................................... 9
G. Court Supervision and Duration of the Decree ..................................... 10
V. DISCUSSION............................................................................................................ 10
A. The Proposed Consent Decree is Fair, Adequate, and Reasonable........... 11
1. N o tice ................................................................................................ 11
2. Strength of Plaintiffs’ C ase ............................................................... 12
3. Risk, Expense, Complexity and Likely Duration of Further
Litigation............................................................................................ 16
4. Risk of Maintaining Class Action Throughout the T ria l................ 16
5. Amount Offered in Settlement................................................... 17
6. Extent of Discovery Completed and Stage of the Proceedings . . . 18
7. Experience and Views of Counsel.................................................... 18
8. Presence of Governmental Participants........................................... 18
9. Absence of Fraud or Collusion........................................................ 19
10. Reaction of Class Members ............................................................. 19
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a. Joint Objection of Plaintiffs Oliver, Hampton, Williams
and Reagins .......................................................................... 19
b. Separate Objection of Polly Reagins .................................. 20
c. Objection of Senophie McFadden ............. ........................ 21
G. The Defendant-Intervenor’s Request for Modification of the
Decree Should be Disregarded........................................................ 21
VI. CONCLUSION........................................................................................................... 22
n
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Cases: Pages:
Armstrong v. Bd. of School Dir., 616 F.2d 305 (7th Cir. 1980)........................................ 17
Cotton v. Hinton, 559 F.2d 1326 (5th Cir. 1977) ...................................... . 12,16,18,19
Davis v. City and County of San Francisco,
890 F.2d 1438 (9th Cir. 1989)..................................................................................... 1
Fox v. United States Dept, of Housing and Urban Development,
468 F.Supp. 907 (E.D.P.A. 1979) .......................................................... 12, 13, 15, 16
Gautreaux v. Pierce, 690 F.2d 616 (7th Cir. 1982) ................................................. 11, 12, 18
In Re Cement and Concrete Antitrust Litigation.
817 F.2d 1435 (9th Cir. 1987).............................................................................. 11, 12
Keith v. Volpe, 858 F.2d 467 (9th Cir. 1988).......................................................... 13-15, 18
Mullane v. Central Hanover Bank & Trust, 339 U. S. 306.
70 S. Ct. 652, 94 L. Ed. 865 (1950).......................................................................... 12
Reed v. General Motors, 703 F.2d 170 (5th Cir. 1983)................................................. 12, 13
Resident Advisory Board v. Rizzo, 564 F.2d 126 (3d Cir. 1977),
cert, denied 435 U.S. 908, 98 S. Ct. 1458, 55 L. Ed. 2d 499 (1978) .................. 13, 14
Robinson v. 12 Lofts Realty, 610 F.2d 1031 (2d Cir. 1979)............................................... 15
S.E.C. v. Randolph, 736 F.2d 525 (9th Cir. 1984)............................................................... 18
United States v. City of Black Jack, 508 F.2d 1179 (8th Cir. 1974)................................. 14
United States v. City of Jackson, 519 F.2d 1147 (5th Cir. 1975) ..................................... 11
Williams v. City of New Orleans, 729 F.2d 1554 (5th Cir. 1984)..................................... 18
Williamsburg Fair Housing Committee v. New York City
Housing Authority, 450 F. Supp. 602 (S.D.N.Y. 1978)...................................... 10, 11
Statutes, Rules and Constitutional Provisions: Pages:
42 U.S.C. § 2000d ..............................................................................................................1, 13
42 U.S.C. § 3604 ............................................................................................ 1, 10, 13, 18, 21
42 U.S.C. §§ 1982 and 1983 .................................................................................................. 1
California Const. Article I, § 7 .............................................................................................. 1
California Government Code § 65008 ................................................................................... 1
TABLE OF AUTHORITIES
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Pages:
Fed. R. Civ. Pro. 2 3 (e )..................................................................................................... 10-12
U.S. Const. Amend X IV .....................................................................................................1, 13
Other Authority: Pages:
Schwarzer, Tashima & Wagstaffe, Cal. Practice Guide: Fed. Civ. Pro. Before Trial (TRG
1992)....................................................................................................................... 10, 12
IV
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I. INTRODUCTION
Plaintiffs request that the First Amended Consent Decree (hereinafter, "the Decree")
proposed by the parties to settle fully the class claims against the City and Agency defendants
be approved. This Decree is intended to bring to a close over three years of litigation and
arms-length negotiations. Plaintiffs believe that a fair and reasonable settlement has been
reached that will provide effective and substantial relief for the class which was defined by the
Court as ”[a]ll present minority residents of Noble’s Ranch who will suffer imminent
displacement as a result of the pending condemnation activity." Order Certifying the Class,
entered July 24, 1990. For the reasons set out below, the parties request that this Court find
that the Decree is "fundamentally fair, adequate and reasonable." Davis v. City and County
of San Francisco, 890 F.2d 1438, 1444 (9th Cir. 1989).
II. PRIOR PROCEEDINGS
Plaintiffs1 filed this action on February 14, 1990, on behalf of themselves and all others
similarly situated. Their complaint seeks declaratory and injunctive relief for violations of the
Fair Housing Act, (42 U.S.C. § 3604), 42 U.S.C. §§ 1982, 1983, 2000d and 3617, the
Fourteenth Amendment to the United States Constitution, Article I, § 7 of the California
Constitution and California Government Code § 65008 they allege were committed by the City
of Indio, the Redevelopment Agency of the City of Indio, the Indio City Council and the
members of the Indio City Council.
‘The nineteen plaintiffs who commenced the lawsuit in 1990 were Earline Oliver,
Elvella Davis, Quillar K. Hampton, Spencer Hinchen, Linard McGaha, Cora L. McGaha,
Reverend Lester Riles, Genevieve Riles, R. Gene Wilson, Onieta Combs, J.M. Dickey,
Monte Fay Dickey, Freddie Mitchell, Bobby Cotton, Fay Cotton, Curtis Gantt, Ruby Lee
Gantt, Walter Pratt and Minnie Polk.
Because the class certified by the Court is restricted to current residents of Nobles
Ranch, certain of these named plaintiffs are not covered by the terms of the Consent
Decree, namely, those persons who owned property in Nobles Ranch but did not reside
there and persons who, subsequent to the filing of the action, reached separate resolution
with the defendants and were relocated out of Nobles Ranch. The Decree covers the
claims of nine named plaintiffs who are classmembers, Earline Oliver, Elvella Davis,
Quillar Hampton, Reverend Lester Riles, Genevieve Riles, Freddie Mitchell, Bobby
Cotton, Fay Cotton and Minnie Polk. It also covers the claims by the hefrs of the Estate
of Linard and Cora McGaha who, since now deceased, are not members of the class, as
well as claims by two Nobles Ranch churches who intervene as plaintiffs in the settlement
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The complaint challenged the defendants’ proposed redevelopment scheme, through
which their neighborhood was to be destroyed to make way for the expansion of a privately
owned shopping mall. Plaintiffs alleged that the defendants’ proposed expansion of the Indio
Fashion Mall was discriminatory in purpose and effect against the entirely minority, largely
poor, residents of Nobles Ranch, an African-American and Hispanic neighborhood in Indio.
The complaint sought as relief an injunction that would halt the destruction of Nobles Ranch
and return its zoning classification to residential.
On May 1, 1990, the Court granted a motion to intervene as parties defendant by the
owners of the Indio Fashion Mall, the Paseo Group. On July 24. 1993. the Court entered an
order certifying this lawsuit as a class action.
In the fall of 1990, the parties, including the intervenor-defendants Paseo Group, began
protracted settlement discussions to resolve the lawsuit short of a trial. In the spring of 1991,
the Paseo Group ceased its participation in settlement negotiations and notified the City and
Redevelopment Agency that it was no longer interested in participating in the City’s
redevelopment plans. On numerous occasions the Court has granted the parties requested
stays of the proceedings.
III. STATEMENT OF FACTS
Plaintiffs are residents of Nobles Ranch, a minority neighborhood of considerable
historical significance in northern Indio, California of approximately 14 acres and a
population, prior to the City’s redevelopment activity, of approximately 280 residents in 94
households. Three minority churches are located within the neighborhood, including the
settling intervenors, First AME Church of Indio and Christ Sanctified Holy Church.
At the time the lawsuit commenced, the population of Nobles Ranch was entirely
comprised of racial and ethnic minorities. In 1989, the population of Nobles Ranch was 37.6
percent African American, 56.7 percent Hispanic and 5.7 percent Asian.2 In contrast,
according to the statistics contained within the Environmental Impact Report prepared for
declaration of Dowell Myers in Support of Opposition to Motion for Class
Certification, Filed June 7, 1990.
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the defendants in anticipation of their redevelopment project, the 1987 population of the City
of Indio as a whole was comprised of 50.1 percent white, 37.4 percent Hispanic, 4.2 percent
African-American and 2.7 percent "other" ethnic groups.3
Plaintiffs allege that Nobles Ranch was established as an African American
neighborhood more than sixty years ago by John Noble, an ancestor of Earline Oliver and
other members of the plaintiff class. In 1922, Mr. Noble, a black man, settled in Indio after
leaving Oklahoma. After discovering that black people were not allowed to live in most parts
of Indio, John Nobel purchased land from a local Native American tribe. Mr. Noble later
subdivided the land and sold lots other black people unwelcome in white residential areas.
The neighborhood came to be known as Nobles Ranch.4
Plaintiffs alleged that the City of Indio has a history of discrimination against and
neglect of its minority community. Black residents have previously been involuntarily
relocated, and in the mid-1960s, black residents threatened to file suit to force the City to
provide basic municipal services in Nobles Ranch.5 To this day, Nobles Ranch residents rely
on privately-owned water wells rather than municipally provided water.
Plaintiffs alleged that in recent years, the City of Indio allowed some parts of the
Nobles Ranch neighborhood to deteriorate, refusing requests from Nobles Ranch residents
for federal Community Development Block Grants or other funds to improve their property,
while making such grants available elsewhere in white neighborhoods.6 Plaintiffs further
alleged that no black person has ever served as an elected official on the Indio City Council
or any other elected municipal governing entity.7
3See Draft Environmental Impact Report for the Indio Fashion Mall Expansion,
attached as Exhibit B to the Declaration of Kevin Brogan In Support of Plaintiffs’ Reply
to Defendants’ memorandum in Opposition to Motion for Class Certification, filed June
18, 1990.
4See Complaint, 1111 37, 38.
5See Complaint, 11 43.
6See Complaint, 11 44.
7See Complaint, 1111 45, 46.
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In 1988, the City of Indio and its Redevelopment Agency voted to approve plans for
the expansion of the Indio Fashion Mall, a privately owned retail mall which lies directly to
the north of Nobles Ranch. The City’s plans called for the doubling of the size of the mall
and the acquisition and demolition of all of the structures within Nobles Ranch, including all
of the plaintiffs’ residences and the three churches. The City’s plans authorized the City to
acquire all the parcels within Nobles Ranch by eminent domain, with the exception of the 20-
unit federally owned public housing project on Magnolia Court. The City separately
negotiated with the Housing Authority of the County of Riverside tor the acquisition and
demolition of that housing.
On February 14, 1990, the plaintiffs commenced this lawsuit, seeking to enjoin the
defendants’ planned demolition of Nobles Ranch as violative of federal and state statutory and
constitutional prohibitions of discrimination against the housing needs ol racial minorities and
the poor. Plaintiffs alleged that the defendants’ proposed mall expansion project had the
purpose and effect of displacing the low-income, minority residents ot Nobles Ranch and
causing them to move from the City of Indio due to the paucity ot available decent, sate and
affordable housing elsewhere in the City.8
Plaintiffs entered into settlement talks with the defendants in the fall ot 1990 in the
hope that their lawsuit could be resolved without the necessity and risk of a trial on the
merits. Plaintiffs’ counsel spent over two and one-half years in complex negotiations with the
defendants. In April, 1993, plaintiffs’ counsel signed the First Amended Consent Decree
which is now subject to the Court’s approval.
Plaintiffs request that the Court approve the proposed Decree because they believe it
to be a fair, adequate and reasonable resolution of the plaintiffs’ claims. The proposed
Decree allows for the relocation of resident homeowners as a group, to newly constructed
housing that will be modified to meet their individual needs. The proposed Decree further
assures that the renters in the neighborhood will receive adequate monetary compensation for
8See Complaint, U 67.
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their lost rental opportunities and that the defendants will cause adequate new affordable
housing opportunities to be created in the City for the benefit of the relocated renters and
others. In an effort to compensate the Nobles Ranch community for any harms it has
suffered, the proposed Decree contains provisions that will assure the continued viability of
two of the churches located in the neighborhood, while assuring that, if the churches are
relocated in the future, they will be given new structures as close as possible to their existing
locations. Finally, the proposed creates a fund that will be used for the commemoration and
recognition of Nobles Ranch.
IV. THE CONSENT DECREE
Without admitting liability, the City of Indio and the Indio Redevelopment Agency
have chosen to settle this lawsuit by extending the plaintiffs the following relief:
A. Resident Homeowners
Each of seven plaintiff homeowners9 will receive from the Redevelopment Agency title
to a newly constructed home on the same street in a subdivision approximately one quarter
mile from Nobles Ranch, in exchange for their transferring to the Agency title to their Nobles
Ranch homes. Decree, pp. 14-15. Existing deeds of trust will be transferred to the new
homes at the same or better terms. Decree, pp. 15-16. The Agency will make available to the
homeowners a sum sufficient for the modification of their new homes to fit their individual
needs. Decree, p. 16. In addition, the Agency will pay to each homeowner the reasonable
moving expenses equal to either (1) the actual charges of a moving company if the
homeowner engages the services of a licensed mover or (2) a fixed moving payment
determined from a schedule. Decree, p. 17.
The Agency will also set aside $35,000 in a fund to be used by the homeowners and
their surviving spouses to defray the increased property taxes incurred by their relocation.
’This group includes named plaintiffs Earline Oliver and Lester and Genevieve Riles.
It also includes the estate of Cora and Linard McGaha, both now deceased. Named
plaintiff Elvella Davis has elected to settle separately with the City for a cash sum, though
she is still entitled to share in the property tax compensation fund described in pages 17
through 19 of the Decree. Mrs. Davis intends to purchase property and build a home on
the same street where the other homeowners are relocating.
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The Agency will pay to three homeowners who also own investment property within
Nobles Ranch cash sums sut'ficient to compensate them for their past and future lost rental
income. Decree, pp. 19-21.
B. Renters Residing in the Magnolia Court Public Housing Project
The proposed Decree requires the Agency to pay to plaintiffs a sum sufficient to make
certain repairs around the Magnolia Court Housing Project in order to enhance security and
the quality of life in Magnolia Court pending any relocation by the Agency. Decree, p. 21.
While the proposed Decree does not commit the defendants to the acquisition and
replacement of the Magnolia Court Housing Project, it fixes the defendants’ obligations in the
event they undertake any commercial development in Nobles Ranch that involves the
acquisition of the Magnolia Court units.
If the defendants pursue any commercial development that requires the use of the land
on which Magnolia Court sits, the proposed Decree requires the defendants to replace the
Magnolia Court units according to a specified architectural plan with stated amenities.
Decree, pp. 22-25. The replacement units must have same number of units as the existing
units, with the same number of bedrooms. The proposed Decree further requires the
defendants to make diligent efforts to find a suitable location for the replacement housing
within close proximity of the existing complex. Id.
C. Renters Residing Elsewhere in Nobles Ranch
Renters in Nobles Ranch who resided there when the complaint was filed and who
have not yet been relocated by the Agency are entitled to their choice of two different types
of relief. Those who are otherwise eligible to participate in the federal Section 8 housing
subsidy program but are unable to receive immediate assistance under that program because
of the unavailability of Section 8 housing, certificates or vouchers may elect to participate in
a temporary housing subsidy program established by the Agency. That housing subsidy
program will ensure that the renter’s monthly housing costs do not exceed 30% of household
income. Decree, pp. 25-26. Alternatively, any renter in Nobles Ranch may elect to take a
Decree, pp. 17-19.
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lump sum payment pursuant to state law. Decree, p. 26. By accepting the lump sum
payment, no renter has waived his or her right to receive federal Section 8 housing assistance.
All renters who are relocated by the defendants are eligible to receive compensation
for their moving expenses. Decree, pp. 28-29.
D. Replacement Housing
The proposed Decree fixes the obligations of the defendants with regard to the
quantity and nature of housing they will construct or cause to be constructed to replace
housing units they destroy in Nobles Ranch. Not including the replacement of the Magnolia
Court units, the defendants may demolish up to 74 units of housing in Nobles Ranch. They
will replace or cause to be replaced each unit of housing according to the following schedule:
Forty-five of the replacement units will be affordable to very low income households; eight
of the units will be affordable to lower income households and the remaining 21 units will be
at least affordable to moderate income households. At least nineteen of these 74 units must
be constructed prior to June, 1994. Decree, pp. 27-28.
Any renter, whether or not he or she was relocated prior to the approval of this
proposed Decree, is entitled to first priority for placement in the replacement units and shall
be given notice of the housing’s availability.
E. Intervening Churches
Although they have not yet formally appeared in this action, two Nobles Ranch
churches, the First African Methodist Episcopal Church of Indio ("First AME") and Christ
Sanctified Holy Church ("Christ Sanctified") have been included in the proposed Decree as
plaintiff-intervenors as a means to achieve community-based relief in the settlement. By and
through the Decree, the defendants have stipulated to the churches’ intervention for the
purpose of settlement only. Decree, p. 8.
1. Immediate Relief
Both churches are entitled to certain immediate relief intended to alleviate any
detrimental impact caused by the defendants past and future redevelopment work. They both
will receive sums sufficient to improve lighting and security measures at their buildings.
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In response to claims made by First AME Church that the defendants past and future
redevelopment activity has caused and will cause a loss of revenue to First AME non-profit
day care center, the defendants have agreed to certain other measures designed to alleviate
financial burdens on First AME (though the defendants do not admit any responsibility for
lost revenues). The Agency will deliver to First AME title to a home on the same street as
the resident homeowners’ replacement units, for use as the church parsonage. The Agency
will also begin paying the monthly installments owing on a trust deed on the existing church.
Any sums paid by the Agency on First AME’s trust deed will ultimately be credited against
any sums later made available to First AME for a replacement facility. Decree, pp. 29-30.
2. Replacement Facilities
The proposed Decree does not absolutely obligate defendants to acquire and replace
the two church facilities, but it sets the obligations of the defendants in the event they decide,
within the next five years, to acquire the churches’ property. The proposed Decree further
defines the circumstances in which the defendants would be required to replace the two
churches’ property, even in circumstance in which the defendants did not elect to acquire the
churches’ property.
In the event the defendants elect to acquire the churches’ property at any time in the
next five years, the Decree requires them to provide the churches with finances sufficient to
design and construct replacement facilities for the churches. The defendants must make a
diligent search for replacement sites within close proximity of the existing churches and the
defendants must give to the churches sums sufficient to design and build replacement facilities
substantially equivalent to plans and specifications laid out in the proposed Decree. Decree,
pp. 30-39, 40-47.
The proposed Decree further specifies that the defendants may not pursue commercial
development in the rest of Nobles Ranch in such a way that the defendants build around the
two churches. The Decree provides that if the defendants undertake substantial, simultaneous
commercial development that utilizes all but 10 percent of the land in Nobles Ranch, the
Decree, pp. 29-30, 39-40.
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defendants will be obligated to acquire the churches’ property and provide the churches with
the replacement facility relief defined in the decree. Decree pp. 11-13.
F. Community Relief
The proposed Decree expressly provides for community-wide relief in three ways.
First, the Decree requires the defendants to pay $56,700 to plaintiffs counsel to be held in
trust for plaintiffs for the charitable purpose of commemorating Nobles Ranch. Decree, p.
50.
Second, the decree requires the City to change the name of the street abutting the
southern edge of Nobles Ranch to John Nobles Avenue.
Third, the proposed Decree requires the defendants to finance the construction of a
"community center" that would be attached to First AME in the event that the defendants
elect to acquire the First AME property or in the event that a certain level of commercial
development in Nobles Ranch occurs. If the defendants acquire the First AME property
within the next five years (whether through their election to acquire the property or through
the trigger of substantial commercial development involving at least 90 percent of Nobles
Ranch acreage), the defendants will pay to First AME a sum sufficient to allow the Church
to include, as part of its replacement facility, a room to be used as a Nobles Ranch community
center. Decree, pp. 11-13, 30-39.
If, however, the defendants 1) do not acquire the First AME property within the next
five years, but 2) engage in commercial development that utilizes at least 75 percent of all the
acreage of Noble’s Ranch lying westerly of Larkspur Street (excluding one parcel), the
defendants must provide First AME with title to a lot adjacent to the Church and $90,000 for
the purpose of constructing an addition to the Church to be used as a Nobles Ranch
community center.10 Decree, pp. 13-14. The purpose of this "Community Facility
10In the event this "Community Facility Obligation" is triggered prior to the expiration
of five years following the Court’s approval of this decree, the Agency will hold the title to
the lot and the $90,000 in trust until the five year period expires. The purpose for holding
the property and money in trust is to ensure that the community facility is not constructed
before the Agency’s option to acquire the AME Church property expires.
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Obligation" is to provide the community with a mechanism for the construction of a facility
for community use even if the defendants ultimately do not proceed with redevelopment in
Nobles Ranch that involves the replacement of First AME.
G. Court Supervision and Duration of the Decree
To oversee compliance and to enforce the Consent Decree, the Decree contemplates
that the Court retain jurisdiction. The Decree also provides for the use of an arbitrator to
resolve disputes that might arise regarding certain, specifically designated subject matters.
Decree, pp. 48-49.
V. DISCUSSION
Rule 23(e) of the Federal Rules of Civil Procedure declares that "fa] class action shall
not be dismissed or compromised without the approval of the court" after proper notice to
the class. The primary purpose of a Rule 23(e) fairness hearing is to guard against the "risk
of prejudice to class members who are relying on the named plaintiff to prosecute the action."
Schwarzer, Tashima & Wagstaffe, Cal. Practice Guide: Fed. Civ. Pro. Before Trial U 10:554, at
10-105 (TRG 1992).
The proposed Decree is consistent with Rule 23(e), because the Decree was designed
to provide relief for the class as a whole. In facilitating the settlement of a housing
discrimination suit, the Court should be mindful that "ft]he resolution of . . . disputes by
means of negotiation, conciliation and compromise is particularly appropriate in [Title VIII]
litigation. In the first instance, the Fair Housing Act of 1968 . . . recognizes a preference for
this type of solution." Williamsburg Fair Housing Committee v. New York City Housing
Authority, 450 F. Supp. 602, 605 (S.D.N.Y. 1978). "In approving a consent decree, a court
need not inquire into the precise legal rights of the consenting parties but need only assure
itself ‘that there has been valid consent by the concerned parties and that the terms of the
decree are not unlawful, unreasonable, or inequitable.’" Williamsburg, 450 F.Supp. at 606,
quoting United States v. City of Jackson, 519 F.2d 1147, 1151 (5th Cir. 1975).
In assessing a proposed settlement, the Court must determine whether the settlement
is "fundamentally fair, adequate and reasonable." Officers for Justice, 688 F.2d at 625. This
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inquiry necessarily involves a balancing of several factors which may include:
the strength of plaintiffs’ case; the risk, expense, complexity, and likely duration
of further litigation; the risk of maintaining class action status throughout the
trial; the amount offered in settlement; the extent of discovery completed, and
the stage of the proceedings; the experience and views of counsel; the presence
of a governmental participant; and the reaction of the class members to the
proposed settlement.
Id. In addition, the Court should find that the agreement is the not the product of fraud or
overreaching by, or collusion between, the negotiating parties. Id. See also Gautreaux v.
Pierce, 690 F.2d 616, 630 (7th Cir. 1982).
A. The Proposed Consent Decree is Fair, Adequate, and Reasonable
The proposed Consent Decree is the culmination of vigorous pretrial discovery and
motions practice, followed by a prolonged period of extensive negotiations. Although it is by
definition a compromise, plaintiffs believe that the Decree provides a fair, adequate, and
reasonable accommodation of the parties’ independent interests. Each of the applicable
factors enunciated by the Ninth Circuit weighs in favor of this Court’s approval of the
proposed Consent Decree.
1. Notice
The contents of the settlement notice of this class action were sufficient to inform class
members of the terms of the settlement. Although Fed.R.Civ.P. 23(e) directs that adequacy
of notice is within the discretion of the court, its content must satisfy constitutional due
process requirements. In Re Cement and Concrete Antitrust Litigation, 817 F.2d 1435, 1440
(9th Cir. 1987). To satisfy due process, local practice generally requires that the notice
describe the action and proceedings, contain the proposed terms of the settlement, state the
date of the fairness hearing and the deadline for lodging objections. Fed. Civ. Pro. Before
Trial, H 10:581, at 10-110. The Notice Of Pendency of Class Action, Proposed Settlement and
Hearing which this Court approved, along with the Amended Notice Of Pendency of Class
Action, Proposed Settlement and Hearing which this Court also approved, duly informed class
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members of the nature of the lawsuit, summarized the Consent Decree, provided an address
where class members could request a full and complete copy of the decree, set forth the dates
of the fairness hearing, the deadline for filing objections and for opting out. Therefore, the
contents of the notice conformed with due process requirements.
Fed.R.Civ.P. 23(e) also vests the Court with discretion as to the manner of service of
the settlement notice. Fed. Civ. Pro. Before Trial, H 10:581, at 10-110. The class members,
however, should be given adequate notice so that due process rights will be protected. Id. The
standard for notice, set out by the Supreme Court, holds that classmembers should be given
notice "reasonably calculated to inform interested parties of the pendency of the action and
opportunity to present their objections." Mullane v. Central Hanover Bank & Trust, 339 U.S.
306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865, 873 (1950); see In Re Cement and Concrete Antitrust
Litigation, 817 F.2d at 1440.
The method of notice in this case were devised to reach the greatest number of
potential class members. A copy of the Court-approved Notice of Pendency of Class Action
and Proposed Settlement ("Notice") was mailed by first class mail to all residents of the
Nobles Ranch area in Indio at their last known address and was published daily in the Desert
Sun and Press Enterprise (Desert edition) newspapers for the period of May 1, 1993 through
May 10, 1993, inclusive. See Declaration of Patrick Pearce, to be submitted separately.
2. Strength of Plaintiffs’ Case
In reviewing a proposed consent decree, the Court "must compare its terms with the
likely rewards the class would have received following a successful trial of the case." Reed v.
General Motors, 703 F.2d 170, 172 (5th Cir. 1983), Cotton v. Hinton, 559 F.2d 1326, 1330 (5th
Cir. 1977); see Officers for Justice, 699 F.2d at 625; Gautreaux, 690 F.2d at 631; Fox v. United
States Dept, of Housing and Urban Development, 468 F.Supp. 907, 912 (E.D.P.A. 1979). The
Court, however, must avoid scrutinizing plaintiffs’ case to the point of trying it, as the very
purpose of a settlement is to avoid the expense and complexity of trial. Reed, 703 F.2d at 172.
Fox was a housing discrimination case where the plaintiffs brought claims under the
Fair Housing Act (Title VIII), Title VI (42 U.S.C. § 2000d) and the Fifth and Fourteenth
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Amendments. In evaluating the strength of the plaintiffs’ case, the court in Fox noted that
"[o]f all the civil rights claims alleged, the Fair Housing Act one is the easiest to prove, for
the plaintiffs need not show under the Act that defendants’ discriminatory acts were done
intentionally." Fox, 468 F.2d at 915, citing Resident Advisory Board v. Rizzo-; 564 F.2d 126 (3d
Cir. 1977), cert, denied 435 U.S. 908, 98 S. Ct. 1458, 55 L. Ed. 2d 499 (1978). The Fox court
noted that "as this Court is most interested in finding out how likely it is that plaintiffs would
secure relief on their racial discrimination claim, it need only evaluate the strength of the Fair
Housing Act claim." Fox, 468 F.2d at 915.
In Keith v. Volpe, 858 F.2d 467 (9th Cir. 1988), the Ninth Circuit set the standards for
proving a violation of the Fair Housing Act. According to the Ninth Circuit, the legal
standard from proving a violation of the Fair Housing Act consists of two inquiries: Whether
plaintiffs have presented a piima facie case, and, if so, whether the defendants have
demonstrated that their proffered justifications are legitimate, bona fide areas for legislative
activity and for which no less discriminatory alternative existed.
With respect to the prima facie case, the Ninth Circuit canvassed the law of other
federal circuits, and found that a piima facie case could be made either of two alternatives:
1) by a showing that a governmental decision had an adverse impact on a racial or ethnic
minority group alone, or 2) by showing a discriminatory effect with some other factor. Keith,
858 F.2d at 482-83:
The Third and Eighth Circuits hold that proof of discriminatory effect alone
is always sufficient to establish a violation of the Fair Housing Act . . . The
Fourth and Seventh Circuits require consideration of four factors: (1) the
strength of the plaintiffs showing of discriminatory effect, (2) whether there
was some evidence of discriminatory intent, (3) what the defendant’s interest
was in taking the action complained of, and (4) whether the plaintiff sought to
compel the defendant affirmatively to provide housing for minorities or merely
to restrain the defendant from interfering with individual property owners who
wish to provide such housing . . . It is not necessary under the Fourth and
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Seventh Circuits’ analysis to demonstrate strong showings as to all four factors.
When presented with only two of the four factors pointing toward granting
relief, the Seventh Circuit concluded the case was ‘close’ and granted relief,
declaring that ‘we must decide close cases in favor of integrated housing.’
The Ninth Circuit did not choose between the alternative tests because the plaintiffs there
made a prima facie case under either standard. After a prima facie case is made, the burden
then shifts to the defendants to offer non-discriminatory reasons for its actions. Keith, 858
F.2d at 484. In some circuits, defendants must meet a "compelling interest" test and in others
a "legitimate, bona fide interest" test. Id. According to the Eighth Circuit, to rebut a ptima
facie case under Title VIII, the defendant must "demonstrate that its conduct was necessary
to promote a compelling governmental interest." United States v. City o f Black Jack, 508 F.2d
1179, 1185 (8th Cir. 1974). Alternatively, according to the Third Circuit, a defendant must
prove the existence of a justification that "must serve, in theory and practice, a legitimate,
bona fide interest of the Title VIII defendant, and the defendant must show that no
alternative course of action could be adopted that would enable that interest to be served with
less discriminatory impact." Resident Advisoiy Board v. Rizzo, 564 F.2d at 149, In either case,
it is the burden of defendants to present evidence to meet the test. Id.
Here, the plaintiffs clearly can prove a prima facie case under either of the competing
standards. Under the Third and Eighth Circuit test, where proof of disparate impact alone
is sufficient, plaintiffs’ case could not be more persuasive. According to the statistics the
defendants themselves relied upon to resist plaintiffs’ motion for class certification, the mall
expansion project would displace only racial minorities, even though racial minorities are only
about half of the City’s population. The effect upon African Americans is most striking.
According to the defendants’ own Environmental Impact Statement, blacks are only 4.2
percent of Indio’s population. See Note 3, supra. Yet, they comprise almost 38 percent of
the population of Nobles Ranch.
Under the Fourth and Seventh Circuits’ "four factors" analysis, plaintiffs’ case is equally
strong: (1) Plaintiffs showing of adverse impact is unrebuttable, since not one white
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household is subject to removal by effected by the mall expansion; (2) There is ample
evidence of discriminatory intent in the defendants’ actions, as is demonstrated by the record
of discrimination against the African American population of Nobles Ranch; (3) the
defendants do not have a strong interest in destroying an historic residential neighborhood
in order to hand the property over to a private developer; and (4) the plaintiffs do not seek
to compel the defendant affirmatively to provide housing for minorities, rather, they merely
seek to enjoin them from interfering with individual minority property holders.
Neither is it likely that defendants would be able at trial to rebut plaintiffs prima facie
case. As the Second Circuit noted in Robinson v. 12 Lofts Realty, 610 F.2d 1031, 1040 (2d Cir.
1979), a defendant’s proffered justification will be closely scrutinized because "|a]ny defendant
can respond to a discriminatory effect with a claim of some subjective preference or
prerogative, and, if such assertions are accepted, prevail in virtually every case." According
to Keith, the burden on the defendants at trial would be to present evidence that meets either
a "compelling interest" or a "legitimate, bona fide interest" test and that their alleged
objectives could not be met through less discriminatory means. Here, the defendants are not
likely to prove that their purported justification in seeking commercial development and jobs
in the City is non-pretextual, "compelling" or "bona fide" and that it cannot be met through
means that would not require the complete destruction of a minority neighborhood.
The analysis of this issue in Fox is illuminating. When evaluating the proposed consent
decree in Fox, the court noted that demographic figures presented a prima facie case of
disparate impact, meeting the Third and Eighth Circuit tests. The court stated that "plaintiffs
appear to have a good chance of proving that the effects of defendants’ urban renewal
activities were discriminatory. At this time, defendants have not put forth a justification for
their conduct, but of course, there has not been a trial." Fox, 468 F.Supp. at 915.
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Were the plaintiffs here to prevail at a trial on the merits, the relief they seek would
be the cessation of the mall expansion project, although the relief ordered by the Court would
depend upon an equitable balancing by the Court of the harms to the parties caused by such
an order. Because the defendants have expended millions of dollars on their redevelopment
project,11 there is a chance that even were plaintiffs to prove the defendants’ liability at trial,
the Court would not halt the project in the exercise of its equitable discretion. In that event,
the Court would most likely enter an order that caused the relocation of the plaintiffs as a
group to the fullest extent practicable, that ensured adequate affordable replacement housing
for the relocation of tenants, and that provided some type of community-wide relief. Plaintiffs
submit that the proposed Decree is an example of just such an order.
3. Risk, Expense, Complexity and Likely Duration of Further Litigation
Housing discrimination class actions of the scope pleaded here require substantial
commitment of time and money, and typically involve complex issues of law and fact. Cf.
Cotton v. Hinton. The length and detail of the proposed Decree and the time consumed in the
settlement negotiations in this case demonstrate these points. The lawsuit involves a large
number of named plaintiffs, each of whom would have presented his or her case at trial. The
trial would likely involve complex expert testimony regarding demographics, impact and the
feasibility of less-discriminatory alternatives available to the defendants. It would also involve
a potentially lengthy investigation into the City of Indio’s history with regard to minorities and
the connection between that history and the actions challenged in the lawsuit. Avoiding such
a prolonged, expensive trial promotes the purposes of Title VIII and weighs in favor of
approval of the proposed Decree.
4. Risk of Maintaining Class Action Throughout the Trial
Under the standards articulated in Officers for Justice, 688 F.2d at 633, the Court must
determine whether all aspects of this cause would have been litigated to a conclusion entirely
within the class action mode. As the plaintiffs demonstrated in their motion for class
uThe City and Agency, however, are seeking to recoup their money in a separate state
court action against the intervening defendant.
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certification, this case clearly meets the requirements for class certification. As noted above,
the Court has already certified this cause as a class action. There have been no intervening
changes in circumstances since the Court’s July 24, 1990 Order that would indicate that the
case is no longer appropriate for class action treatment.
5. Amount Offered in Settlement
A court should be concerned when large sums of money are going to "the benefit of
a few class members or class counsel." Armstrong v. Bd. of School Dir., 616 F.2d 305, 313 (7th
Cir. 1980). The proposed Decree does not provide for any payment of monies to any
particular class member except in exchange for that plaintiff’s interest in property or as direct
compensation for costs incidental to that plaintiffs relocation.12 The sums provided to
plaintiffs Earline Oliver, the Riles and Quillar Hampton in exchange for their rental property
were calculated to be sufficient to provide them with future incomes commensurate with the
incomes heretofore provided by their investments in the rental property. The relocation
payments going to renters and the moving payments slated to go to both homeowners and
renters are consistent with the payments provided to homeowners and renters who have
settled with the defendants outside of the context of this action.13 Sums provided in the
proposed Decree for the creation of a community recognition fund and the creation of a
community facility are explicitly intended as community, class-wide relief to be enjoyed by all
plaintiffs.
12Although the decree does provide for the transfer of title to a house to the First
AME Church without requiring the church to transfer title to their existing parsonage, this
house is provided to the Church in exchange for their relinquishment of claims for pre
condemnation damages by executing a release.
13The payment to Bobby Cotton is the one exception to this statement. The Decree
provides Mr. Cotton with the potential for a slightly greater financial reward because,
unlike the other non-public housing renters in Nobles Ranch, Mr. Cotton-is ineligible to
participate in a federally assisted housing program after his relocation. The relief provided
for Mr. Cotton will, at most, insulate him against increased rental housing costs for a two-
year period.
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6. Extent of Discovery Completed and Stage of the Proceedings
In Colton and in Gautreaux, consent decrees were challenged on the basis, inter alia,
that insufficient discovery had been conducted to allow the trial judge to assess the fairness
of the decree. By contrast in the instant case, no party or objector has approached the Court
to argue the necessity of further information to judge the fairness of the decree.
Although discovery sufficient for a trial on the merits has not been completed in this
case, the information gathered by the parties is adequate to allow the court and potential
objectors to evaluate the fairness of the Decree. The discovery relied upon by both plaintiffs
and defendants in relation to plaintiffs’ motion to certify the class demonstrated the nature
of the plaintiffs’ claims, the extent of the injury claimed by plaintiffs, the demographics of
Nobles Ranch and the relative strength and weaknesses of the parties’ competing claims.
7. Experience and Views of Counsel
In a settlement hearing the Court is entitled to rely upon the judgment of experience
counsel. Cotton v. Hinton, 559 F.2d at 1330; Gautreaux, 690 F.2d at 631. In this case, class
counsel and defendants’ counsel are experienced litigators. Class counsel include attorneys
associated with the NAACP Legal Defense and Educational Fund, Inc., and the law firm of
Hill, Farrer & Burrill. The NAACP Legal Defense and Educational Fund has been litigating
Fair Housing Act cases since the Act was made law in 1968, while Hill, Farrer & Burrill has
substantial experience in real estate matters, including those involving the exercise of eminent
domain. Class counsel Bill Lann Lee was the lead attorney on the trial and the appeal of
Keith v. Volpe, the lead case in this circuit on the proof of Fair Housing Act claims.
8. Presence of Governmental Participants
The defendants entering into the Decree are governmental entities. Courts have held
that deference is owed to the judgment of governmental agencies which have negotiated and
submitted a proposed judgment. See S.E.C. v. Randolph, 736 F.2d 525, 529 (9th Cir. 1984);
Williams v. City o f New Orleans, 729 F.2d 1554, 1560 (5th Cir. 1984).
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9. Absence of Fraud or Collusion
In determining whether a proposed settlement is the result of arms’ length
negotiations, the Court may look at the negotiation sessions and the terms of the Consent
Decree for evidence of fraud or collusion among the negotiating attorneys. In the instant
case, the Court is generally aware of the course of negotiations. The Decree at issue
withstands close scrutiny. Its terms are fair and reasonable; no unjustifiable sums of money
have been allocated to the named plaintiffs. Plaintiffs’ request for attorneys fees is expressly
reserved for the Court’s later disposition. Decree, p. 51.
10. Reaction of Class Members
Because a consent decree inherently involves a compromise, it would be impossible for
every class member to be completely satisfied with the results. However, the number of
objections lodged against the settlement is a factor to be considered by the Court. Colton,
559 F.2d at 1331 (a settlement can be fair notwithstanding a large number of class members
who oppose it.) Here, although the class is comprised of well over one hundred members,
only three objections were lodged14, none of which call into question the overall fairness of
the Decree.
a. Joint Objection of Plaintiffs Oliver, Hampton, Williams and
Reagins
On May 7, 1993, named plaintiffs Earline Oliver and Quillar Hampton, classmember
Josephine Williams and Polly Reagins (heir of deceased named plaintiffs Cora and Linard
McGaha) filed an objection that complains that they feel they as individuals are not being
offered an adequate moving fee. Essentially, these plaintiffs argue that it is unfair for renters
to receive a cash payment for relocation while the homeowner plaintiffs are only offered their
moving expenses at actual cost or at a fixed fee. Because of the stress and hardship they have
suffered as a result of the defendants’ redevelopment activity, these homeowner plaintiffs
argue that they are entitled to "special compensation."
uSee Declaration of William Northrop, to be filed separately.
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Plaintiffs’ counsel agree that the defendants’ redevelopment activity has caused
substantial emotional hardship throughout the plaintiff class and that the emotional hardship
has taken a toll on the physical well-being of class members. Members of the class may well
be entitled to compensation for special damages caused by the defendants’ violation of civil
rights laws should plaintiffs prevail at a trial on the merits. Nevertheless, the proposed
Decree represents, in plaintiff counsels’ opinion, the best agreement that could be reached
with the defendants. A settlement is inevitably a compromise.
As regards the amount of the moving payment, the objecting plaintiffs, like all class
members, are entitled to full payment of the fees of a licensed mover, should they decide that
the lump sum payment is insufficient to compensate them for moving themselves. The
payments to renters described by the objectors are not "special compensation," but restitution
for the relinquishment of a leasehold in a home with an exceptionally low rent. The payment
is required under state law and is designed to cover the difference between a renter’s current
rent and the rent she must pay in her new rental after relocation to a decent, safe and sanitary
unit, up to a statutory maximum. The renter’s payment is the counterpart of the relief the
homeowners receive under the proposed Decree for the value of their homes.
The objectors express concerns about their ability to afford the costs of housing after
relocation. The proposed Decree, however, provides a fund to offset increased property taxes
and guarantees that homeowners with existing trust deeds will incur no additional debt or fees
as a result of relocation. See Decree, pp. 15-16, 17-19.
The objectors also request reimbursement for their interests in several neighborhood
water wells. The proposed Decree expressly does not affect any of those interests, which are
reserved for separate disposition. See Decree, p. 10.
b. Separate Objection of Polly Reagins
Mrs. Reagins is an heir to named plaintiffs Cora and Linard McGaha, now deceased.
She objects on the basis that she is unsatisfied with the replacement home she if being offered
in the settlement in exchange for the McGahas’ Nobles Ranch home.
Mrs. Reagins, because she does not currently reside in Nobles Ranch, is not a class
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member. If Mrs. Reagins is unsatisfied with the replacement home offered by the defendants
in exchange for the McGahas’ home under the proposed Decree, she is free to not execute
the Release contemplated by the terms of the Decree and proceed on her own by defending
against the City’s condemnation proceedings. Her objection presents no bar to approval,
c. Objection of Senophie McFadden
The last objection presented to the Court is that of Senophie McFadden. Because
Mrs. McFadden indicates in her objection that she did not live in Nobles Ranch on February
14, 1993, she is not included within the class as it is defined in the proposed Decree. Her
claims are unaffected by the proposed Decree and, therefore, her objection presents no bar
to the Court’s approval of the Decree.
G. The Defendant-Intervenor’s Request for Modification of the Decree
Should he Disregarded
Plaintiffs oppose the Defendant-Intervenor’s application to modify the proposed
Decree. From the inception of the defendants’ redevelopment plans, the defendant-
intervenors, as the owners of the Indio Fashion Mall, were active partners in the actions the
plaintiffs complain of. The defendant-intervenors actively participated in settlement
negotiations until May, 1991, at which time they voluntarily left the table. Their failure to
participate in subsequent negotiations did not erase their liability for the harms suffered by
the plaintiffs. Nor are plaintiffs’ existing claims against the defendant-intervenors time barred.
When the Paseo Group intervened in this action as defendants, the statute of limitations on
plaintiffs’ Fair Housing Act claims was tolled.
The parties to the Consent Decree wish to preserve whatever claims they have against
the Paseo Group. These claims are not addressed or disposed of by the proposed Decree.
It is inappropriate to resolve the Paseo Group issues at this time by modifying the proposed
Decree.
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VI. CONCLUSION
For the above reasons, plaintiffs respectfully submit that the Court should approve the
First Amended Consent Decree in Settlement of Class Action Lawsuit.
DATED: May 17, 1993 Respectfully submitted,
BILL LANN LEE
CONSTANCE L. RICE
KEVIN S. REED
NAACP LEGAL DEFENSE &
KEVIN H. BROGAN
GREGORY L. EVANS
HILL, FARRER & BURRILL
Attorneys for Plaintiffs
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PROOF OF SERVICE
STATE OF CALIFORNIA, COUNTY OF LOS ANGELES
I am employed in the county of Los Angeles, State of California. I am over the age of
18 and not a party to the within action; my business address is: 315 West Ninth Street, Suite
208, Los Angeles, California 90015.
On May 17, 1993, I served the foregoing document described as PLAINTIFFS’
MEMORANDUM IN SUPPORT OF PROPOSED CONSENT DECREE, on all interested
parties in this action by placing true copies thereof enclosed in sealed envelopes addressed as
follows:
KENDALL H. MACVEY
PATRICK H.W. PEARCE
BEST, BEST & KRIEGER
3750 University Avenue
Suite 400
Post Office Box 1028
Riverside, CA 92502
DAVID C. LARSEN
RUTAN & TUCKER
611 Anton Boulevard, Suite 1400
Costa Mesa, CA 92626
I am "readily familiar" with the firm’s practice of collection and processing
correspondence for mailing. Under that practice it would be deposited with U.S. postal service
on that same day with postage thereon fully prepaid at Los Angeles, California in the ordinary
course of business. I am aware that on motion of the party served, service is presumed invalid
if postal cancellation date or postage meter date is more than one day after date of deposit for
mailing in the affidavit.
Executed on May 17, 1993, at Los Angeles, California.
I declare that I am employed in the office of a member of the bar of this court at whose
direction the service was made.
• <sk v c; - -
SHEILA MILLER