STATE OF NORTH CAROLINA

COUNTY OF BRUNSWICK

IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION

11-CvS-130 1

) THE ROYAL OAK CONCERNED ) CITIZENS ASSOCIATION, CURTIS )

MCMILLIAN and DENNIS ) MCMILLIAN, )

) Plaintiffs, )

)

v. )

) BRUNSWICK COUNTY, )

) Defendant. )

)

BRIEF IN OPPOSITION TO DEFENDANT'S MOTION TO

DISMISS

I. INTRODUCTION

Plaintiffs respectfully submit this brief in opposition to the Motion to Dismiss filed by

Defendant Brunswick County on or about July 9, 2012. Defendant moved to dismiss Plaintiffs'

Third Amended Complaint under Rule 12(b)(l), claiming that "subject matter jurisdiction is

lacking," and under Rule 12(b)(6) for failure to state a claim under which relief can be granted.

(Def.'s Mot. Dismiss '1[5.) Importantly, Defendant's Motion makes no allegation that Plaintiffs

have failed to establish a prima facie case of race discrimination under either the North Carolina

Fair Housing Act ("NCFHA") or the Equal Protection Clause. With its hodge-podge array of

technical issues, Defendant's Motion instead avoids and attempts to obfuscate what this case is

really about: that Defendant's denial of access to water and sewer services in the Black

community of Royal Oak, its siting of industrial zoning and multiple hazardous and unwanted

land uses and its decision to site another landfill in Royal Oak, constitute discrimination against

Plaintiffs "in the terms, conditions, or privileges of a real estate transaction or in the furnishing of

facilities or services in connection therewith," and "interfere with [Plaintiffs'] exercise or

enjoyment of [their rights] ... granted or protected by" the NCFHA. See N.C. Gen Stat. §§ 41A-

4(a)(2) and 41A-4(e).

As shown below, Plaintiffs have established their prima facie case under the above­

quoted provisions of the NCFHA, and have further shown how Defendant's actions not only

harm them, but also frustrate the goal of the NCFHA, which is "truly integrated communities,"

by turning their historic residential community of Royal Oak into a dumping ground that no one

with the resources to choose otherwise would want to live in. United States v. Koch, 352 F. Supp.

2d 970,976-78 (D. Neb. 2004) (quoting Trajjicante v. Metro. Life Ins. Co., 409 U.S. 205,211

(1972) and 114 CONG. REC. 3422 (1968), and noting that Congress "sought to promote

integrated neighborhoods" and hoped that this would "lead to the reduction of the deleterious

effects of ghettos on the employment and education of the Americans trapped therein").

II. Summary of Defendant's Alleged Grounds for Dismissal

Defendant's Rule 12(b)(l) argument has three bases, all of which are fatally flawed.

First, Defendant attempts to attack Plaintiff Royal Oak Concerned Citizens' Association's

("ROCCA") standing by erroneously claiming that N.C. Gen. Stat. §§ 1-69.1 and 66-68 apply to

ROCCA, and that Plaintiff ROCCA failed to affirmatively aver its capacity to sue as required by

N.C.R. Civ. P. 9(a). Second, Defendant argues that "the motivation behind Plaintiffs' lawsuit and

their primary request for relief-that the Court enjoin the landfill's expansion-is now moot or

lacks ripeness" due to the planning board's denial of the County's application for a "special

exception permit" to constmct the landfill. (Def. 's Mot. Dismiss ~17.) Notably, the only claim

asserted by Plaintiffs to which Defendant refers as being moot or not ripe is Plaintiffs' claim

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under N.C. Gen. Stat § 153A-136( c) (commonly known as the Environmental Justice Act).

Finally, Defendant argues that "[b ]ecause Plaintiffs failed to pursue their designated

administrative remedy ... the Court should dismiss the Fair Housing Act claim" pursuant to

Rule 12(b)(l). (Def.'s Mot. Dismiss ~29.)

Defendant's Rule 12(b)(6) argument has two bases, both of which fail in light of the

allegations in Plaintiffs' Third Amended Complaint, which the Court must treat as true for

purposes of deciding whether to grant or deny Defendant's Motion, and in light of proper

statutory construction. First, Defendant argues that Plaintiffs' Equal Protection Claim under the

North Carolina Constitution fails because Plaintiffs "have not alleged or established that they

lack an adequate state remedy," and because Plaintiffs "fail to allege facts stating a viable equal

protection claim." (Def. 's Mot. Dismiss~~ 20, 24.) Second, Defendant argues that Plaintiffs'

claim under the North Carolina Fair Housing Act fails because "Plaintiffs failed to pursue and

exhaust their designated administrative remedy." (Def. 's Mot. Dismiss ~29.)

As discussed below, the remainder of the alleged grounds for dismissal in Defendant's

Motion are not recognized by law as a basis for dismissal.

For all of the reasons discussed fully below, Defendant's Motion should be denied.

II. STATEMENT OF THE CASE

Plaintiff ROCCA is a non-profit, unincorporated association which was formed to protect

the quality oflife and environment of Royal Oak, a historically African American community in

Supply, North Carolina. ROCCA , whose membership consists of Royal Oak residents and

property owners, has representational standing to sue in this action. (Compl. ~~ 5-7; attached

Affidavit of Lewis Dozier~~ 5-7.) Plaintiffs Curtis McMillian and Dennis McMillian are

members of ROCCA who live adjacent to the current landfill in Royal Oak. ROCCA in its

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representative capacity, and Plaintiffs Curtis McMillian and Dennis McMillian in their individual

capacities, filed a Complaint on June 3, 2011, with claims under the North Carolina Declaratory

Judgment Act, N.C. Gen. Stat. §1-254 et seq.; the North Carolina Fair Housing Act ("NCFHA"),

N.C. Gen. Stat. § 41A-1 et seq.; and the Equal Protection Clause of the North Carolina

Constitution, Article I,§ 19. Plaintiffs' claims challenge as racially discriminatory Defendant's

decisions to rezone certain parcels; to locate another landfill in Royal Oak; to locate the current

Construction and Demolition ("C&D") landfill and closed Municipal Solid Waste ("MSW")

landfill, the Waste Water Treatment Plant, the Waste Transfer Station and the county animal

shelter in Royal Oak; and to deny Royal Oak residents access to public water and sewer.

Plaintiffs also claim that Defendant's rezoning decision violated North Carolina statutory and

common law.

Plaintiff ROCCA seeks only declaratory and injunctive relief, as well as attorney fees and

costs. Plaintiffs Curtis McMillian and Dennis McMillian seek monetary damages as well as

declaratory and injunctive relief, attorney fees and costs. Plaintiffs served their Interrogatories,

Requests for Admissions, and Requests for Production of Documents on Defendant

contemporaneously with the Complaint and Summons.

Plaintiffs amended their Complaint as of right on August 3, 2011. Defendant filed an

Answer to the Amended Complaint, Responses and Objections to Plaintiffs' discovery requests,

and a Rule 12(f) Motion to Strike Plaintiffs' Discovery Requests on or about August 24, 2011.

On March 9, 2012, Plaintiffs filed a Motion to Compel responses to certain of their discovery

requests and a Response to Defendant's Motion to Strike Plaintiffs' Discovery Requests. On

April 9, 2012, Plaintiffs filed a Motion to Amend the Complaint to add Mark Hardy as a plaintiff

and to add their claim under North Carolina's Environmental Justice Act, N.C.G.S. § 153A-

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136(c). Also on April9, 2012 Defendant filed its Motion to Compel Plaintiffs to Supplement

Responses to Discovery. On or about April12, 2012, Defendant filed its Opposition to Plaintiffs'

Motion to Compel and Request for Protective Order. Defendant withdrew its Motion to Strike,

and the remaining motions were heard in Brunswick County on April 16, 2012.

On Apri124, 2012, the Court denied Plaintiffs' Motion to Compel, granted Defendant's

Motion to Compel and Request for Protective Order, denied Plaintiffs' motion to add Mark

Hardy as a plaintiff under Rule 15(a) and granted Plaintiffs' motion to add the Environmental

Justice Act claim. On May 3, 2012, Plaintiffs filed a Motion to Clarify the Court's order denying

Plaintiffs' Motion to Compel. That Motion to Clarify was granted, and the Court issued an Order

on June 7, 2012 clarifying the factual basis of its decision. On July 9, 2012, Plaintiffs filed a

Notice of Appeal of the Court's June 7, 2012 Order, and a Motion to Stay this case pending that

appeal, on July 12, 2012.

Plaintiffs filed their Second Amended Complaint pursuant to the Court's April24, 2012

order allowing them to add the Environmental Justice Act claim on May 18, 2012; however,

Defendant objected on grounds the Second Amended Complaint was different than the proposed

Second Amended Complaint attached to Plaintiffs' Motion to Amend. The parties conferred, and

agreed to submit Plaintiffs' Third Amended Complaint as the Complaint in this action, which

was filed on June 6, 2012. Defendant filed an Answer to the Third Amended Complaint and a

Rule 12(b)(6) Motion to Dismiss this case on July 9, 2012-'

1 For purposes of this brief. all cites and other references to the Complaint specifically refer to Plaintiffs' Third Amended Complaint.

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III. STATEMENT OF THE FACTS

According to data from the 2010 Census, African Americans constitute only about II%

of the Brunswick County population, but the census blocks encompassing the Royal Oak

community are nearly 100% African-American. (Compl. -,r-,r 17, Ex. I & 2.) The Royal Oak

community has been predominantly African American since the 1800s, and direct descendants of

the freed slaves who settled Royal Oak still reside there today and are members of ROCCA. (!d.

-,r-,r !8-19.)

Defendant has located and operated nearly all of its solid waste facilities in Royal Oak

since at least 1983, specifically: the now closed, unlined MSW landfill; the current C&D

landfill; the Waste Transfer Station; and the Waste Water Treatment Plant. (!d. -,r-,r 2, 27-28, Ill.)

In addition, in 2000, Defendant located the county animal shelter-yet another unwanted land

use-in Royal Oak. (I d. -,r-,r 44, 47.) Despite the fact that African Americans are such a small

minority of the County's population, based on an odds ratio test using 2010 Census block data,

they have almost double the odds relative to Whites of living within a half mile of a solid waste

facility or other unwanted land use in Brunswick County. (Id. -,r 109.) Under the same odds ratio

analysis, there is a one in one thousand (I 000) chance that this result is due to race neutral

decision-making. (!d.)

Despite the presence of the above-described unwanted land uses in Royal Oak and their

potential adverse effect on nearby residents' well water, real property values and quality oflife,

Defendant has refused to provide county water and sewer services to the residents of Royal Oak,

including Plaintiffs Curtis and Dennis McMillian. (!d. -,r-,r 44, 87-93, 101-05.) The injustice of this

refusal is highlighted by the fact that despite ROCCA's advocacy efforts, Defendant ran water

lines to the nearby animal shelter, but stopped those lines less than a mile from Royal Oak

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residents' homes. (Id. ~~ 44-45, 103-05.) The crux of environmental injustice-burdening

underrepresented racial minority communities with the adverse byproduct of infrastructural

benefits that accrue to the racial majority-is manifest in Defendant's decision to locate the

current and future C&D landfill and the Waste Water Treatment Plant in Royal Oak, despite the

fact that disproportionately White residents and property owners-and not Royal Oak

residents-produce the waste disposed of in each of those facilities. (Id. ~~ 3, 20, 97, 99.)

ROCCA formed in 2005 to counter Defendant's continuing practice of disproportionately

burdening the Royal Oak community and denying the community access to water and sewer

services. (Id. ~~ 2-3,5-7.) ROCCA's president, Lewis Dozier, lives in Royal Oak and has been

directly harmed as well as subjected to threatened harm by Defendant's challenged conduct

regarding the Royal Oak community. (Aff. Lewis Dozier, Ex. A (attached); Compl. ~~7, 87-93.)

Mr. Dozier faithfully attends Defendant's Board of County Commissioner and Planning Board

meetings and represents ROCCA's interests at those meetings. ((Aff. Lewis Dozier, Ex. A ~5

(attached); Compl. ~~ 69, 1 03.) He has repeatedly and publicly advocated, at Defendant's

meetings as well as outside of them, on behalf of ROCCA's membership in opposition to

hazardous and unwanted land uses in Royal Oak, and for water and sewer service. (I d.)

In spite of ROCCA's advocacy efforts, Defendant only considered parcels in Royal Oak

when determining where to place its future C&D landfill. (Campi.~~ 30-31.) In March, 2010,

Defendant commissioned a landfill siting study for two of those parcels, numbered 1370000806

("806") and 15200058 ("058"). (Id. ~ 48.) Months later, in June, 2010, Defendant purchased

parcels 806 and 058 for the sole purpose of placing the new landfill there. (I d.~~ 36-38.)

At the time, the parcels were, like most of the surrounding area, zoned Rural Residential.

(I d. ~~ 49, 51.) On April 4, 2011, over ROCCA's objections and without even considering other

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industrial uses much less determining whether the land was suitable for all Industrial General

uses, Defendant approved the rezoning of both parcels, in their entirety, from Rural Residential

to Industrial General. (!d.~~ 63-66, 69, 116.) In fact, as set out in the Complaint, Parcels 806 and

058 are not appropriate for most uses allowed as of right under Industrial General zoning-the

majority of which are incompatible with a residential community and would have an adverse

effect on the health, safety, quality of life, and property values of the surrounding community.

(!d. ~~ 70-75, 84.) The rezoning, and particularly the manner in which Defendant went about the

rezoning, violated North Carolina statutory and common law, and are also part of Defendant's

continuing pattern and practice of racial discrimination against the Plaintiffs. (!d.~~ 70-75,94-

95, 113, 115-17.)

In sum, Plaintiffs' Complaint contains clear, concise allegations-constituting one

hundred forty (140) paragraphs-which, treated as true under the standard of review required by

both Rule 12(b)(l) and Rule 12(b)(6), establish I) that Defendant's decisions to locate certain

unwanted and potentially hazardous land uses in Plaintiffs' predominantly and historic African

American community of Royal Oak were motivated by race discrimination and also had a

racially discriminatory impact; 2) that Defendant's rezoning of the two parcels adjacent to the

current landfill from Rural Residential to Industrial General and efforts to put a new C&D

landfill on those parcels constitute continuing racially discriminatory actions; 3) that Defendant's

denial of water and sewer services to Royal Oak residents also constitutes a continuing racially

discriminatory action; and 4) that Defendant's rezoning of the two parcels adjacent to the current

landfill in Royal Oak violate North Carolina statutory and common law and is invalid and void.

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IV. STANDARD OF REVIEW

On a motion to dismiss pursuant to Rule 12(b )(I) of the North Carolina Rules of Civil

Procedure, the Court must view the allegations in the Complaint "as true and the supporting

record in the light most favorable to the nonmoving party." Mangum v. Raleigh Bd. of

Adjustment, 362 N.C. 640, 644, 669 S.E.2d 279, 283 (2008). In a motion to dismiss under Rule

12(b )(I) a court can consider evidence outside the pleadings as to the question of subject matter

jurisdiction. Southstar Funding, L.L. C. v. Warren, Perry & Anthony, P.L.L. C, 445 F.Supp.2d

583, 584 (E.D.N.C.2006) (discussing the federal equivalents of Rules 12(b)(l) and 12(b)(6)).

"The court should grant a Rule 12(b)(l) motion only if the material jurisdictional facts are not in

dispute and the moving party is entitled to prevail as a matter of law." Souths tar Funding, 445

F.Supp.2d at 585.

The standard of review on a motion to dismiss pursuant to Rule 12(b)(6) of the North

Carolina Rules of Civil Procedure, "is whether, as a matter of law, the allegations of the

complaint, treated as true, are sufficient to state a claim upon which relief may be granted under

some legal theory." Craven v. Cope, 188 N.C.App. 814,816,656, S.E.2d 729,731 (N.C.App.

2008). "The complaint must be liberally construed, and the court should not dismiss the

complaint unless it appears beyond a doubt that the plaintiff could not prove any set of facts to

support his claim which would entitle him to relief." I d. See also Ladd v. Estate of Kellenberger,

314 N.C. 477,481,334 S.E.2d 751,755 (1985) (stating that "[t]he system of notice pleading

affords a sufficiently liberal construction of complaints so that few fail to survive a motion to

dismiss") (quotingPresnellv. Pel!, 298 N.C. 715,719,260 S.E.2d 611,613 (1979)). Plaintiffs

have sufficiently alleged justiciable claims against the Defendant, the claims are not precluded,

and therefore Defendant's Motion to Dismiss should be denied.

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V. ARGUMENT

A. Plaintiff ROCCA Has Standing To Participate In This Lawsuit To Seek Injunctive and Declaratory Relief.

Defendant argues that Plaintiff ROCCA has failed to meet the pleading requirements set

out in N.C. Gen. Stat.§§ 1-69.1,66-68 andN.C.R. Civ. P. 9(a) and as a result lacks standing to

participate as a party plaintiff in this action. (Def.'s Mot. Dismiss~ 7.) The plain language of the

statute, together with the specific allegations in Plaintiffs' Complaint, shows that Defendant's

arguments are incorrect.

I. Standing Under the State Fair Housing Act is Construed Broadly.

The state legislature "modeled the key sections of the North Carolina Fair Housing Act

on the provisions of the federal Fair Housing Act," and North Carolina courts are guided by

federal case law regarding the federal Fair Housing Act when interpreting the State Fair Housing

Act. NCHRC ex rel Leach v. Weaver Realty Co., 79 N.C. App. 710,714, 340 S.E.2d 766,768

(1986).

The U.S. Supreme Court has recognized that Congress intended standing in Fair Housing

Act cases to be "as [broad] as is permitted by Article III of the Constitution." Gladstone Realtors

v. Village of Bellwood, 441 U.S. 91, 109 (1979) (quoting Trafficante v. Metropolitan Life Ins.

Co., 409 U.S. at 209; see also Havens Realty Corp. v. Coleman, 455 U.S. 363, 372 (1982)

(holding that "Congress intended standing ... to extend to the full limits of Art. III, and that the

courts accordingly lack the authority to create prudential barriers to standing in suits brought

under" the Fair Housing Act.) That is, "the only requirement for standing to sue ... is the Art. III

requirement of injury in fact." !d. at 375-76. These decisions recognize that the only way to

effectuate the underlying goals and intent of the Fair Housing Act-the elimination of

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discrimination in access to housing and the creation of integrated neighborhoods and

communities-is for courts to construe standing broadly.

Litigation by civil rights and community organizations in the role of "private attorneys

general" has been critical to ensuring compliance with a host of civil rights laws-and the Fair

Housing Act (FHA) is no exception. Trajjicante v. Metropolitan Life Ins. Co., 409 U.S. at 211

("The role of private attorneys general ... serves an important role in this part of the Civil Rights

Act of 1968 .") In order to effectuate the ability of such private organizations to assist in the

enforcement of our fair housing laws, courts have acknowledged a broad and expansive view of

standing to be appropriate in federal Fair Housing Act actions. Havens Realty Corp., 455 U.S. at

372 (citing Gladstone, 441 U.S. at 103 n.9). Our state Fair Housing Act was patterned on the

substantially similar language in the federal Fair Housing Act and as the state counterpart to the

federal act was enacted by our Legislature for the same general purpose. A similar expansive

view of standing as is applied in federal Fair Housing Act cases should therefore be applied in

cases such as this under our state Fair Housing Act. The legislative history and purpose of the

Fair Housing Act, and the controlling legal precedents analyzing the standing question,

demonstrate that Plaintiff ROCCA is properly before the court.

2. Plaintiff ROCCA has Representational Standing to Sue.

The Complaint's allegations establish that Plaintiffs meet Rule 9(a)'s requirement that "[a]ny

party suing in any representative capacity shall make an affirmative averment showing his

capacity and authority to sue." N.C. R. Civ. Pro. 9(a). Because ROCCA, an unincorporated

association, exists for a nonprofit purpose, N.C. Gen. Stat.§ 59B-8(b) applies and not, as

Defendant argues, N.C. Gen. Stat. §§1-69.1 and 66-68. N.C. Gen. Stat. §§l-69.1(b). (See Compl.

~~ 5, 6, 39, 44, 52, 58, 69, 103.) (See also Aff. Lewis Dozier, Ex. A ~7 (attached).) Rule 59B-

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8(b) describes the necessary factors for a nonprofit association to have the capacity to initiate and

participate in litigation on behalf of its members:

A nonprofit association may assert a claim in its name on behalf of its members or persons referred to as "members" by the nonprofit association if one or more of them have standing to assert a claim in their own right, the interests the nonprofit association seeks to protect are germane to its purposes, and neither the claim asserted nor the relief requested requires the participation of a member or a person referred to as a "member" by the nonprofit association.

N.C. Gen. Stat. § 59B-8(b). See also Creek Point Homeowner's Ass 'n v. Happ, 146 N.C. App.

159, 165, 552 S.E.2d 220, 225 (2001) (citing Hunt v. Washington State Apple Advertising

Comm 'n, 432 U.S. 333, 343 (1977) (describing same prerequisites for representational standing

in general).

Plaintiffs' pleading meets each of the above requirements for representational standing,

which like standing more generally under the Fair Housing Act, must be broadly construed. See,

e.g., Gladstone Realtors v. Village of Bellwood, 441 U.S. 91 (1979) (acknowledging that

representational standing may be asserted on behalf of residents who are located in the same

neighborhood, city or county where the defendant's discriminatory practices have occurred).

First, ROCCA's President, Mr. Lewis Dozier, resides in the Royal Oak community, and has thus

been directly harmed as well as subjected to threatened harm (health related, psychological and

financial) by the Defendant's challenged conduct regarding the Royal Oak community. (Compl.

,-r7.) Such injury and threat ofharm to Mr. Dozier would be redressed by a favorable decision as

to ROCCA. Mr. Dozier thus has standing in his own right to seek the declaratory and injunctive

claims asserted by Plaintiff ROCCA. Other individual members of Plaintiff ROCCA also have

standing to seek injunctive relief on their own and can demonstrate a realistic threat that they will

be subjected to harm by Defendant's conduct as alleged in the Third Amended Complaint.

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Second, ROCCA's interests in this case-preventing Defendant's continued burdening of

the Royal Oak community with essentially all of the County's solid waste facilities, and

providing the community access to water and sewer services-are germane to ROCCA's

nonprofit purpose, "protecting the quality of life and environment of Royal Oak." (Compl. ,[5.)

Finally, since ROCCA seeks only declaratory and injunctive relief (and not monetary

damages), no individual ROCCA member needs to participate to assert any individualized claim

or request for relief. The declaratory and injunctive relief sought by Plaintiff ROCCA benefits all

of its members. See Creek Pointe, 146 N.C. App. at 165-66.

3. Plaintiffs Have Complied with all Statutory Requirements to Bring this Action.

a. Plaintiffs have Properly Pled ROCCA's Legal Existence, Capacity and Authority to Sue.

N.C.R. Civ. P. 9(a) states in relevant part:

Any party not a natural person shall make an affirmative averment showing its legal existence and capacity to sue. Any party suing in any representative capacity shall make an affirmative avennent showing his capacity and authority to sue.

Plaintiffs' Third Amended Complaint includes the following allegations regarding Plaintiff ROCCA:

5. Plaintiff Royal Oak Concerned Citizens Association ("ROCCA") is an unincorporated community association made up of citizens and residents of Brunswick County, North Carolina, and exists for the purpose of protecting the quality oflife and environment of Royal Oak. ROCCA's membership, like the Royal Oak community itself, is almost entirely African American.

6. ROCCA was formed about four years ago for the above stated purpose and has continued to advocate on behalf of the community in opposition to hazardous and unwanted land uses in Royal Oak, and for water and sewer service.

7. Lewis Dozier is the President of the Royal Oak Concerned Citizens Association and resides in the Royal Oak Community at I 060 Green Swamp Road NW, in Supply, North Carolina.

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(Compl. ~5-7.)

As required under Rule 9(a), ~~5-7 in Plaintiffs' Complaint affirmatively aver that

ROCCA is an unincorporated nonprofit association and establish its legal existence and capacity

to sue under Rule 9(a). !d. Defendant ignores paragraphs five through seven of Plaintiffs

complaint when it argues that Plaintiffs have failed to "affirmatively aver" ROCCA's legal

existence and capacity to sue.

Contrary to Defendant's assertion, and even setting aside for the moment the broader

standing conferred to FHA plaintiffs, the allegations in Plaintiffs' Third Amended Complaint

meet the pleading requirements under the N.C. Rules of Civil Procedure. In NINRL v. Iredell

County, a case involving not Fair Housing Act Claims but only a challenge to a rezoning-the

court ruled that the plaintiffs had not met the requirements of Rule 9(a) and thus did not have

standing to sue. 196 N.C. App.68, 75, 674 S.E.2d 436, 440-41 (2009). The court noted that

"Plaintiffs' amended complaint stated only that [NINRL] represents the residents of the Snow

Creek Community who are opposed to the Rezoning and the operation of a biodiesel

manufacturing facility in the community .... N.C. Gen. Stat. §1A-1, Rule 9(a) required NINRL

to affirmatively aver that it was an unincorporated nonprofit association." !d. Unlike the very

limited allegation in the pleading cited in NINRL, in the instant case, Plaintiffs have expressly

averred ROCCA's legal existence as an "unincorporated community association," with the

specific nonprofit "purpose of protecting the quality oflife and environment of Royal Oak."

(Compl. ~5; Dozier Aff. ~ 7.)

Plaintiffs' Complaint, unlike the single statement found to be inadequate in NINRL, also

states that Plaintiff ROCCA has as its members "citizens and residents of Brunswick County,

North Carolina" and describes ROCCA's advocacy efforts against both the rezoning and the

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proposed new C&D landfill, and for water and service services, on behalf of its members in the

Royal Oak community, who, like the Royal Oak community, are almost entirely African

American. (Id. ,;,; 5, 6, 39, 44, 52, 58, 69, 1 03.) The NINRL decision is thus distinguishable and

in comparison, in fact emphasizes, Plaintiffs' showing that ROCCA has legal existence and

capacity to sue.

b. Plaintiff ROCCA is a Nonprofit Organization and Not Subject to Any Precedential Filing Requirement.

N.C. Gen. Stat. § 1-69.1 states:

(a) Except as provided in subsection (b) of this section: (1) All unincorporated associations, organizations or soc1e!Jes, or general or

limited partnerships, foreign or domestic, whether organized for profit or not, may hereafter sue or be sued under the name by which they are commonly known and called, or under which they are doing business, to the same extent as any other legal entity established by law and without naming any of the individual members composing it.

(2) Any judgments and executions against any such association, organization or society shall bind its real and personal property in like manner as if it were incorporated.

(3) Any unincorporated association, organization, society, or general partnership bringing a suit in the name by which it is commonly known and called must allege the specific location of the recordation required by G.S. 66-68.

(b) Unincorporated nonprofit associations are subject to Chapter 598 of the General Statutes and not this section.

N.C. Gen. Stat. § 1-69.1 (emphasis added).

In turn, N.C. Gen. Stat. § 59B-2 provides the following relevant definition:

(2) "Nonprofit association" means an unincorporated organization, other than one created by a trust and other than a limited liability company, consisting of two or more members joined by mutual consent for a common, nonprofit purpose. However, joint tenancy, tenancy in common, or tenancy by the entireties does not by itself establish a nonprofit association, even if the co-owners share use of the property for a nonprofit purpose.

N.C. Gen. Stat. § 59B-2.

N.C. Gen. Stat.§ 66-68 (a)-(f), referenced in N.C. Gen. Stat.§ l-69.l(a)(3), requires that

for-profit corporations, partnerships and entities operating under an assumed name "must file in

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the office of the register of deeds of such county a certificate" giving specified information

regarding the corporation, partnership or assumed name entity, and signed by the relevant party.

Pursuant to N.C. Gen. Stat. § 1-69.1 (b), unincorporated nonprofit associations are not

subject to the certificate filing requirements of N.C. Gen. Stat. § 1-69.1 (a)(3), but rather to

Chapter 59 of the North Carolina General Statutes, concerning nonprofit organizations. Plaintiff

ROCCA, as described in paragraphs five through seven of the complaint, is an "unincorporated

community association" with a membership consisting of residents and real property owners in

the African American Royal Oak community of Brunswick County. It was formed with the

express "purpose of protecting the quality oflife and environment of Royal Oak." (Compl. ,[5.)

ROCCA, in furtherance of its stated purpose, advocates "on behalf of' its members and

others in the Royal Oak community "in opposition to hazardous and unwanted land uses in

Royal Oak, and for water and sewer service." (!d. '1[6.) ROCCA therefore fits squarely within the

definition of a unincorporated nonprofit association as defined in N.C. Gen. Stat.§ 59B-2(2), as it

is consists of "two or more members joined by mutual consent for a common, nonprofit

purpose." It is clear under N.C. Gen. Stat. § 1-69.1 (b) and Chapter 59 that because ROCCA is

an unincorporated nonprofit association, the additional pleading requirements set forth in N.C.

Gen. Stat. § 1-69.1 (a)(3), and described under N.C. Gen. Stat. § 66-68 (a)-(f) do not apply.

In sum, ROCCA has sufficiently and substantially complied with all pleading rules and

related statutory requirements to properly stand before this Court. In addition, the North Carolina

Fair Housing Act, the Federal Fair Housing Act upon which is it modeled, and the cases

considering the FHA, all establish that Plaintiff ROCCA has representational standing and

capacity to challenge Defendant's racially discriminatory actions.

B. Plaintiffs' Claims are Timely, Justiciable and Ripe.

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1. Plaintiffs' Have Properly and Timely Challenged Defendant's General Rezoning.

Defendant requests dismissal of Plaintiffs' claims challenging "the County's decision to

rezone the two parcels ofland." (Def.'s Mot. Dismiss ~18.) Defendant offers no basis in law for

the dismissal of Plaintiffs' claims that Defendant's rezoning violated state statutory and common

law. (Jd.) Instead Defendant attempts to conflate Plaintiffs' claims against the rezoning with a

section of the general prayer for relief in Plaintiffs' complaint, requesting relief from

Defendant's ongoing discrimination: an injunction against another landfill in the community.

(Compare Compl. ~~141-48 (First Claim for Relief) and Id. p. 24 ~ 3 (Third Prayer for Relief).)

Defendant argues that Plaintiffs' claim regarding Defendant's siting of the landfill is not

justiciable but then, creating much confusion, summarily adds that the completely independent

claims against the rezoning "must also be dismissed." (Def.'s Mot. Dismiss ~18.)

The rezoning ordinance previously enacted by Defendant and the decision to site another

landfill in the Royal Oak community are two separate actions by Defendant, and Plaintiffs have

made independent claims regarding each of those distinct actions. On April4, 2011, Defendant

enacted zoning ordinance Z-11-667 to rezone parcels numbered 1370000806 and 15200058 from

Rural Residential ("RR") to Industrial General ("IG"). (Compl. ,[63.)

Enacting a zoning ordinance is a legislative decision subject to legal challenge pursuant

to a narrow sixty day statute of limitations. See N.C. Gen. Stat.§ 153A-348. Plaintiffs filed this

lawsuit on June 3, 2011, which in part challenged that legislative rezoning. Plaintiffs' first claim

for relief exclusively targets, pursuant to N.C. Gen. Stat.§ 153A-348, the zoning ordinance and

makes no mention of the landfill. (Compl. ~~141-48.)

Industrial General ("IG") is a mixed general and conditional use zone: it allows uses as

of right as well as conditional uses, such as a landfill. See Brunswick County Unified Dev.

- 17-

Ordinance§ 4.10. A conditional use, "requires 'two separate decisions, with the rezoning

decision meeting all of the statutory requirements for legislative decisions and the permit

decision meeting all of the constitutional requirements for quasi-judicial decisions.' " Vi!!. Creek

Prop. Owners' Ass'n, Inc. v. Town of Edenton, 135 N.C. App. 482,487,520 S.E.2d 793,796

(1999) (quoting David W. Owens, Legislative Zoning Decisions, Legal Aspects 93 (2d ed.l999)).

While the permit decision "is subject to review by an action before the superior court in

the nature of certiorari, ... rezoning ordinances ... are properly challenged by an action for

declaratory judgment ... which is made separate from the municipality's decision to grant or

deny a permit." Vi!. Creek, 135 N.C. App. at 487-88, 520 S.E.2d at 796-97. The question of

whether the new landfill, the subject of the quasi-judicial permit hearing, is ripe or moot, is

therefore completely separate from the validity of the zoning ordinance and has no bearing on

the legal sufficiency of Plaintiffs' claims related to the zoning change.

The April4, 2011 zoning ordinance is invalid because Defendant failed to consider all

permissible uses allowed under the rezoning, the rezoning was illegal spot zoning, was arbitrary

and capricious, and did not conform to the comprehensive land use plan. (Compl. 'tf,[l42-47.) All

of these claims are independent of the use to which the rezoned land is ultimately put. While it is

indisputable that the only use Defendant considered for the site was the landfill, numerous other

hazardous and unwanted land uses are allowed in an IG zone, many without any further

permitting. (Compl. 'tf'tf38, 50, 54, 57, 64.) IG zoning allows, with no special-use permit, inter

alia, "agricultural industry, boat repair and manufacturing, incinerators for the disposal of animal

remains, and both heavy and light industry," all uses that would be harmful to the rural

residential community of Royal Oak. (Compl. 'tf85.) As the North Carolina Supreme Court noted

in Chrismon v. Guilford County, "rezoning of a parcel in an old and well-established residential

- 18 -

district to a commercial or industrial district would clearly be objectionable." 322 N.C. 611, 632,

370 S.E.2d 579, 591 (1988).

2. Plaintiffs' prayer for relief that the Court enjoin Defendant from placing another landfill in Royal Oak is proper.

After enacting the zoning ordinance on Apri118, 2011, Defendant passed a resolution

supporting the construction of a new C&D landfill on the rezoned parcels. (Compl. ~68.)

Defendant's decision to site yet another environmental hazard in the Royal Oak community and

the rezoning to Industrial General are part of a continuing pattern and practice of discrimination

against Plaintiffs. (Compl. ~113.) Plaintiffs challenge both of these actions as violations of the

North Carolina Fair Housing Act and the Equal Protection Clause of the North Carolina

Constitution. (Compl. ~~ 149-159 (second and third claims for relief).)

On June 30, 2011, twenty-seven days after this lawsuit was filed, Defendant initiated a

quasi-judicial proceeding by applying for a special exception permit to construct a landfill. The

Brunswick County Planning Board denied the permit on March 29,2012. (Def.'s Mot. Dismiss

~16.) Defendant contends that because there is a state and local permitting process necessary for

it to construct a landfill, a process that has not been completed, the zoning claims are not ripe or

otherwise justiciable. (Def. 's Mot. Dismiss ~~13-16.) This contention is untenable in light of the

law and facts of this case. "In evaluating the ripeness of claims for judicial review, courts must

balance "the 'fitness of the issues for judicial decision' and the 'hardship to the parties of

withholding court consideration.'" Franks v. Ross, 313 F.3d 184, 194-95 (4th Cir. 2002) (citing

Ohio Forestry Ass'n, Inc. v. Sierra Club, 523 U.S. 726, 733, 118 S.Ct. 1665, 140 L.Ed.2d 921

(1998)(quoting Abbott Labs. v. Gardner, 387 U.S. 136, 149, 87 S.Ct. 1507, 18 L.Ed.2d 681

(1967))).

- 19-

The current lack of a special exception permit does not undermine or lessen the

justiciability of the controversy, given Defendant's repeated public assertion, codified in its April

18, 2012 ordinance, to construct another landfill in Royal Oak. (Compl. ~68.) Under its own

ordinance, Defendant may reapply for the special exception permit an unlimited number of

times. See Brunswick County, N.C., Unified Dev. Ordinance§ 3.3. With the stated intent of

building a new landfill on the site, Defendant has invested countless resources purchasing the

property and performing intensive and expensive pre-permitting planning. The last special

exception permit hearing lasted from October 2010 through the end of March 2011, involved

testimony from numerous experts, and hundreds of attorney hours. Until Defendant is enjoined

from pursuing the landfill, Plaintiffs remain under the constant threat of having to defend against

the permit in perpetuity. !d. This hardship to Plaintiffs, especially in light of Defendant's

persistence in pursuing the landfill, demonstrates that the matter is ongoing and that the risk of

harm to the Plaintiffs is real and immediate, therefore requiring judicial consideration of the

ISSUe.

C. Plaintiffs' Equal Protection Claim is Properly Pled in the Alternative to their Discrimination Claims under the Fair Housing Act.

Plaintiffs' race discrimination claims under the NCFHA are established by the same set

of facts that would establish their Equal Protection state constitutional claim, except that there is

no need, under the NCFHA, for Plaintiffs to prove that Defendant's decisions to deny them

access to water and sewer services, locate the landfills and other unwanted land uses in Royal

Oak, and rezone the parcels were motivated by intentional race discrimination. See N.C. Gen.

Stat. § 41A-5( a)(2) (explicitly providing for recovery under a disparate impact theory). It is thus

appropriate for Plaintiffs to include their state constitutional claim as an alternative to their claim

- 20-

under the NCFHA-especially in light of the dearth of decisions under the NCFHA. "[I]n the

absence of an adequate state remedy, one whose state constitutional rights have been abridged

has a direct claim against the State under our Constitution." Corum v. Univ. ofNC., 330 N.C.

761,782,413 S.E.2d 276,289 cert. denied, 506 U.S. 985 (1992). See also Copperv. Denlinger,

363 N.C. 784, 788, 688 S.E.2d 426, 428 (201 0) (citing Corum); Craig ex rei. Craig v. New

Hanover Cty. Bd. of Educ., 363 N.C. 334, 340, 678 S.E.2d 351, 355-56 (2009) (for the rule that

"an adequate remedy must provide the possibility ofreliefunder the circumstances.")

D. The North Carolina Fair Housing Act Does Not Require Plaintiffs to Exhaust Their Administrative Remedies.

Defendant argues that the NCFHA "requires a complainant to file a complaint with the

North Carolina Human Relations Commission before filing a lawsuit in Superior Court," without

citing to any language in the act or any decision of any court creating such a requirement.

(Def. 's Mot. Dismiss ~26.) The NCFHA provides an administrative remedy, but does not

prohibit a party from immediately filing such a civil action: "[a ]ny person who claims to have

been injured by an unlawful discriminatory housing practice or who reasonably believes that he

will be irrevocably injured by an unlawful discriminatory housing practice may file a complaint

with the North Carolina Human Relations Commission." N.C. Gen. Stat.§ 41A-7(a) (2007)

(emphasis added). "The clear import of the above-referenced statutory language indicates a

complainant may file a complaint and exhaust administrative remedies or, alternatively,

commence a civil action." Milsap v. Cornerstone Residential Mgmt., No. 05-60033-CIV, 2010

WL 427436 (S.D.Fla. Feb. 1, 2010) (emphasis added) (interpreting nearly identical statutory

language from the Florida Fair Housing Act, Fla. Stat § 760.34(1 ), not to require exhaustion).

- 21 -

Only three North Carolina appellate decisions have interpreted the NC Fair Housing Act,

none of which have addressed the issue of exhaustion under the NCFHA. See Lee Ray Bergman

Real Estate Rentals v. North Carolina Fair Housing Center, !53 N.C. App. 176, 568 S.E.2d 883,

(2002); Town of Newton Grove v. Sutton, Ill N.C. App. 376,432 S.E.2d 441 (1993); NC Human

Relations Council ex rei. Leach v. Weaver Realty Co., 79 N.C. App. 710, 340 S.E.2d 766,

(1986). In Bergman, the requirement of exhaustion under the FHA was raised as a defense, but

the court of appeals did not consider the issue. Bergman, 153 N.C. App. at 179, 568 S.E.2d at

887; Br. Def.-Appellant at 8, 17, Bergman. Instead, the Bergman court held that exhaustion

could be required by the NC Administrative Procedure Act, ("AP A"), but that the APA did not

apply because a "local unit of government is not an agency." Bergman, 153 N.C. App. at 179

(quoting N.C. Gen. Stat. § !SOB-I (2001)).

The lack of any North Carolina court decision requiring exhaustion under the NCFHA,

even when squarely before the court, requires looking to the federal act upon which the NCFHA

is modeled, which explicitly does not require exhaustion. The "[l]egislature modeled the key

provisions of the State Fair Housing Act after provisions of the Federal Fair Housing Act."

Weaver, 79 N.C. App. At 714,340 S.E.2d at 768 (1986). "It is a familiar canon of statutory

construction that when a legislature borrows from the statutes of another legislative body, the

provisions of that legislation should be construed as they were in the other jurisdiction at the time

of their adoption." Hyde v. Abbott Lab., Inc., 123 N.C. App. 572, 578,473 S.E.2d 680, 684

(1996). Where, as in fair housing, "North Carolina decisions are few by comparison and the

state and federal systems are closely interrelated," increased regard for federal decisions is

appropriate. Stone v. Lynch, 68 N.C. App. 441,443-44,315 S.E.2d 350,352-53 (1984).

-22-

The federal Fair Housing Act, 42 U.S.C. §3601 et seq. (2006), and cases interpreting it do

not require exhaustion. "Congress intended to provide all victims of Title VIII violations two

alternative mechanisms by which to seek redress: immediate suit in federal court, or a simple,

inexpensive, informal conciliation procedure, to be followed by litigation should conciliation

efforts fail." Gladstone, 441 U.S. at 104. The NC statute was modeled after the federal law and

therefore should not be misinterpreted to require administrative exhaustion.

Deference to federal interpretation is particularly appropriate where the state statute and

its judicial interpretations must be certified as "substantially equivalent" to the federal scheme.

The US Department of Housing and Urban Development, ("HUD"), must certify that state

agencies and statutes are "substantially equivalent" to the federal act and its enforcement

structure in order for the state to receive funding and be referred claims. 42 U.S.C. § 3601 et seq.

(2006). Substantial equivalency mandates that the state law "not place excessive burdens on the

aggrieved person that might discourage the filing of complaints," including increased costs, and

that the law affords both administrative and judicial enforcement. 24 C.F.R. § 115.204. A finding

that North Carolina's statute required administrative exhaustion would place an excessive burden

on victims of housing discrimination by denying them the ability to seek and obtain immediate

judicial relief, and would make the North Carolina scheme no longer substantially equivalent to

the federal enforcement regime. See Mark Dorosin & Peter Gilbert, The Exhaustion Requirement

as a Barrier to Fair Housing Claims, N.C. State. Bar J. Spring 2011 at 18, 20-21 (attached as Ex.

B). Such an interpretation would jeopardize HUD funding to North Carolina.

The legal opinion of the North Carolina Human Relations Commission, the state agency

charged with enforcing the NCHFA and with ensuring that the state complies with HUD's

substantial equivalency guidelines, asserts "that complainants under the Act are not required to

-23-

file a complaint with the Commission or otherwise exhaust their administrative remedies before

bring suit in Superior Court to assert their rights." See Sworn Statement of RichardS. Boulden,

Agency Counsel, North Carolina Human Relations Commission, August 8, 2012 (attached hereto

as Exhibit C). See also Sworn Statement of Eugene J. Cella, General Counsel, North Carolina

Office of Administrative Hearings, August 9, 2012 (attached hereto as Exhibit D).

E. Plaintiffs' Environmental Justice Act Claim is Properly Before the Court.

Defendant asserts that the Environmental Justice Act, N.C. Gen. Stat. §153A-136(c) "is

not itself a cause of action." (Def.'s Mot. Dismiss ~30.) While there is little case law involving

this relatively young statute, what does exist proves Defendant wrong. The North Carolina

Environmental Justice Act, which went into effect in 1992, requires, before approving a site for a

new landfill that is within one mile of an existing landfill, that:

The board of commissioners of a county shall consider alternative sites and socioeconomic and demographic data and shall hold a public hearing prior to selecting or approving a site for a new sanitary landfill that receives residential solid waste that is located within one mile of an existing sanitary landfill within the State.

N.C. Gen. Stat. § 153A-136(c). Our court of appeals first considered a private cause of action

under §153A-136(c) in Greene Citizens for Responsible Growth, Inc. v. Greene County, 143

N.C. App. 702, 547 S.E.2d 480 (2001). In Greene Citizens, as in this case, plaintiffs sought

declaratory and injunctive relief in superior court under the Environmental Justice Act before

any facility construction or other DENR permits were issued or even applied for. See id. The

court of appeals evaluated the statutory meaning of"consider alternative sites," concluded that

whether the county had adequately complied with the statute was a question for the jury, and

reversed the superior court's summary judgment order. !d. 143 N.C. App at 706, 547 S.E.2d at

483.

-24-

Defendant's assertion that that the Enviromnental Justice Act ("the Act") has no

relevance to this case reflects its attempt to confine the Court's consideration ofthis matter to the

narrowest possible review of a zoning decision. (De f.'s Mot. Dismiss ~31.) In fact, this case

fundamentally is about race discrimination-a topic Defendant refuses to face-but which our

legislature rightly recognized over a decade ago as being at the root of too many local land use

decisions. See N.C. Gen. Stat.§ 153A-136(c). The interconnectedness between the legacy of

race discrimination and decisions about which communities to burden with potentially

hazardous, unattractive and damaging land uses such as landfills necessitated the Enviromnental

Justice Act, whose very purpose is to protect low-income and minority communities from

repeatedly and unfairly bearing the burden of a county's solid waste needs.

The plain language of the statute and the relevant definitions section show that

Defendant's assertion that the Act "does not apply" to C&D landfills, is incorrect. First,

"sanitary landfill," is defined by statute as "a facility for disposal of solid waste on land in a

sanitary manner in accordance with the rules concerning sanitary landfills adopted under this

Article." N.C. Gen. Stat.§ 130A-290(a)(31). "Solid waste" is defined by§ 130A-290(a)(35) as:

any hazardous or nonhazardous garbage, refuse or sludge from a waste treatment plant, water supply treatment plant or air pollution control facility, domestic sewage and sludges generated by the treatment thereof in sanitary sewage collection, treatment and disposal systems, and other material that is either discarded or is being accumulated, stored or treated prior to being discarded, or has served its original intended use and is generally discarded, including solid, liquid, semisolid or contained gaseous material resulting from industrial, institutional, commercial and agricultural operations, and from community activities.

N.C. Gen. Stat. § 130A-290(a)(35).

Finally, Defendant argues that even if the Environmental Justice Act does apply to C&D

landfills, because of the Planning Board's decision to deny the special exception permit,

"whether or not the County complied with the statute is moot I not ripe" and "should therefore be

- 25-

dismissed." (Def. 's Mot. Dismiss ~33.) Such a position is untenable, however, given the fact that

the requirements of the Environmental Justice Act are completely independent of the permitting

process. Indeed, as established in Greene Citizens, supra, the County's obligation to consider

alternative sites and socioeconomic and demographic data "prior to selecting or approving a site"

for the landfill stands all on its own, and gives rise to a private cause of action when the selection

or approval happens without first conducting the appropriate consideration of those factors when

the site is near an already-existing landfill. Greene Citizens for Responsible Growth, 143 N.C.

App. 702,547 S.E.2d 480. Plaintiffs claim under the Act is therefore properly pled and

sufficiently states a claim, and Defendant's motion to dismiss this claim should be denied.

F. Plaintiffs' Prayer for Relief is Proper and not Relevant to Consideration of Defendant's 12(b)(6) Motion.

Defendant's argument in the last two sections of its Motion simply makes no sense.

(Def.'s Mot. Dismiss~~ 34-36.) Defendant seems to be arguing that the Court should dismiss the

case because Plaintiffs have asked the Court to declare Defendant's actions to be in violation of

the Equal Protection Clause and the NCFHA, and because they have made a Prayer for Relief

which Defendant believes seeks relief to which they are not entitled. (!d.) Aside from the fact

that Plaintiffs' request for relief is undeniably proper, Defendant's objection to it cannot establish

a meritorious grounds for dismissal under Rule 12(b). SeeN. Carolina State Ports Auth. v. Lloyd

A. Fry Roofing Co., 32 N.C. App. 400,407-408, 232 S.E.2d 846, 852 (1977) aff'd, 294 N.C. 73,

240 S.E.2d 345 (1978) (where defendant moved for 12(b)(6) dismissal on grounds that the

plaintiff pled incorrect relief, the court reframed the matter under N.C.G.S. § lA-1, Rule 8(a)(2),

and held that "it is not a crucial error to demand the wrong relief [because) Rule 54( c) provides

that 'every final judgment shall grant the relief to which the party ... is entitled, even if the party

has not demanded such relief in his pleadings.' ")

-26-

With respect to Defendant's persistent confusion expressed in paragraph thirty-five of its

motion, Plaintiffs need not "file an action" under the Declaratory Judgment Act as to their

discrimination claims, as their prayer for relief is fitted to the relief to which they are entitled as a

matter of Jaw. The North Carolina General Assembly expressly provided that the Declaratory

Judgment Act is remedial in nature, its purpose "to settle and to afford relief from uncertainty

and insecurity with respect to rights, status and other legal relations." N.C. Gen. Stat. § 1-264.

As the Supreme Court has explained, "The Declaratory Judgment Act permits any person

affected by a statute or municipal ordinance to obtain a declaration of his rights thereunder."

Bland v. City of Wilmington, 278 N.C. 657, 659, 180 S.E. 2d 813, 815 (1971). Furthermore, the

Act "is to be liberally construed and administered." N.C. Gen. Stat.§ 1-264.

Our courts do not require any particular "magic language" to state a claim under the

Declaratory Judgment Act. Rather, the pleadings need only allege facts which present a

justiciable controversy. Bland, 278 N.C. at 660, 180 S.E.2d at 815; Bowlin v. Bowlin, 55 N.C.

App. I 00, I 01-02, 285 S.E.2d 273, 274 (1981 ). Put another way, "It is required only that the

plaintiff shall allege in his complaint and show at the trial that a real controversy, arising out of

their opposing contentions as to their respective legal rights and liabilities under a deed, will, or

contract in writing, or under a statute, municipal ordinance, contract, or franchise, exists

between or among the parties, and that the relief prayed for will make certain that which is

uncertain and secure that which is insecure." Pilot Title Ins. Co. v. Northwestern Bank. 11 N.C.

App. 444,449, 181 S.E.2d 799,82 (1971) (emphasis added) (quoting Carolina Power &Light

Co. v. Iseley, 203 N.C. 811, 167 S.E. 56 (1933).

-27-

VI. CONCLUSION

For all of the foregoing reasons, Plaintiffs pray the Court DENY Defendant's Motion to

Dismiss. A proposed Order is attached.

This 91h day of August, 2012.

UNC CENTER FOR CIVIL RIGHTS

~.ka: x...~~~ ; fJ)t{,--Elizabeth Haddix NC State Bar# 25818 E-mail: Telephone:

emhaddix@unc.edu (919) 843-9807 .

4iifZ~ Peter Gilbert NC State Bar# 40415 E-mail: pgilbert@email.unc.edu Telephone: (919) 843-8197 Facsimile: (919) 843-8784 10 I East Weaver Street Campus Box 3382 Carborro, NC 27510

HIGGINS & OWENS, PLLC Raymond E. Owens, Jr. NC State Bar# 8439 Email: rowens@higginsowens.com Telephone: (704) 295-4509 5925 Carnegie Blvd Ste 530 Charlotte, NC 28209

FAIR HOUSING PROJECT, LEGAL AID OF NC Jack Holtzman NC State Bar# 13548 E-mail: jack@ncjustice.org Telephone: (919) 856-2165 P.O. Box 28068 Raleigh, NC 27611 Attorneys for PlaintijJS

-28-

CERTIFICATE OF SERVICE

The undersigned hereby certifies that a copy of Plaintiffs' Brief in Opposition to Defendant's Motion to Dismiss and accompanying Exhibits A-D, along with a proposed Order, were served on Defendant via electronic mail to Defendant's counsel of record at the following address:

Julie B. Bradburn & Jacqueline Hughes jbradburn@wcsr.com jaterry@wcsr.com

This the 9th day of August, 2012.

- 29-

Exhibit A

STATE OF NORTH CAROLINA ) ) )

AFFIDAVIT OF LEWIS DOZIER COUNTY OF BRUNSWICK

I, Lewis Dozier, being duly sworn, depose and say:

], I am over age 18 and the information set forth in this affidavit is based on my personal knowledge.

2. I live in the Royal Oak community near the intersection of 211 and Little Macedonia Road, and have lived in Royal Oak since 1975. The racial demographics of our community have not changed since 1975: Royal Oak is predominantly Black.

3. The Royal Oak community gets its name from the Royal Oak Swamp. Upon information and belief, Blacks have lived here for centuries-since slavery. It is my further understanding that parcels of land in and around Royal Oak swamp were some of the only land available for purchase by freed slaves because it was the least desirable farm land.

4. Since at least the 1970s, the community I live in has been burdened with unwanted land uses and environmental hazards at a much greater rate than White neighborhoods in the county. Royal Oak hosts the County's only landfill, the waste transfer station, a waste water treatment plant, the animal shelter, and multiple sand mines. The County has repeatedly selected my neighborhood for these unwanted land uses, yet denies me and my neighbors access to public water and sewer services.

5. I am a founding member of the Royal Oak Concerned Citizens Association (ROCCA) and its elected President. As a leader within ROCCA, I attend the County Commissioner and Planning Board meetings to represent ROCCA's interests, and have been given permission by the ROCCA membership to issue statements such as this Affidavit. ROCCA was established approximately eight years ago as an unincorporated nonprofit association consisting of mostly Black citizens and residents of the Royal Oak community in Brunswick County, North Carolina. ROCCA was formed for the nonprofit purpose of protecting the quality of life and environment of the Royal Oak community. We felt we had to come together to advocate for our community because of the County's long-standing practice of unjustly burdening our community with unwanted and hazardous land uses while refusing to provide us access to water and sewer services.

6. ROCCA is participating in the civil lawsuit of Royal Oak Concerned Citizens Assn, eta!. v. Brunswick County, 11-CVS 130 I ("the lawsuit") on behalf of its members and in accordance with N.C. Gen. Stat. § 59B-8(b), the North Carolina law regarding nonprofit associations.

7. ROCCA's participation in the lawsuit on behalf of its members occurred as the result of a collective decision by its membership prior to the date of the filing of the lawsuit. The decision by ROCCA's members to have the association join the lawsuit was made in keeping with the association's nonprofit purpose, in that the goal of the lawsuit is to oppose and challenge the placement of hazardous and unwanted land uses in Royal Oak, as well as the unjust and discriminatory denial of water and sewer services to ROCCA members and the entire Royal Oak community.

8. Because I, like all other Royal Oak residents, have no access to water and sewer services, and thus no fire hydrants, I (along with my Royal Oaks neighbors) have had to pay higher rates of home fire insurance. Traditionally, the Royal Oak community's fire insurance rates have been higher than other communities because there were no fire hydrants nearby. My fire department's rating was "9," which was real low. Only very recently, during the past year, has the State changed my fire department's rating to a "6" because the NCDOT approved several nearby streams to be used for water supply in case of fire. That has resulted in our community's insurance costs being reduced. However, should anything happen that lessens the water supply in the streams, such as extreme draught, that would negatively affect the ability of the fire department to address any fire that might occur to my home or any other fire in my community.

9. In 2000, the County moved the animal shelter from what is now a predominantly White, affluent housing development, to our community. I questioned the County Commissioners about their decision to extend water services to the animal shelter but not to my and other Royal Oak community members' homes and churches. The County's response was that they would not tell me when the County would provide me and other community members with water and sewer services.

l 0. The County has completely disregarded the potential negative health impacts of continually dumping on the Black community in which I live. Brunswick County's refusal to provide public water and sewer services to me, as well as continuous placement of unwanted land uses in the community in which I live, has devalued, and will continue to devalue my land and negatively impact my immediate environment.

ll. The County's actions have also adversely impacted my quality of life and interfered with my right to enjoy my home. Its actions cause me distress, anxiety and grief. I am a Black resident, property owner and contributing member of this County, and it causes me great pain and suffering to be repeatedly treated by the County as if my neighborhood, my home, is the dumping ground for this County's waste.

This the fi' day of August, 20 I 2.

--. - . .,..., :

- .. -. -

SwOm..--to aRd Substribed before m~;'thl~tli:i~- day of August, 2012.

( Jwv.: ... ]x~.,; "'a--'-"Notary P lie

My commission expires: I~ J!.a t \..,P

Exhibit B

The Exhaustion Requirement as a Barrier to Fair Housing Claims

By MARK DOROSIN AND PETER GILBERT

he Federal Fair Housing Act (FFHA) 1 allows

victims of housing discrimination to choose

between filing an administrative complaint

with the US Department of Housing and

Urban Development (HUD), filing a lawsuit with no administrative complaint, or to simul-

taneously proceed in the administrative forum until "the beginning of the trial of a civil

action"2 and to proceed in court until an "administrative law judge has commenced a hearing

on the record" in the administrative proceeding.3

Incongruously, even though HUD has designated the North Carolina Fair Housing Act (NCFHA) as "substantially equivalent" to

the federal act, there is an assumption that the

state act requires a plaintiff to exhaust admin­

istrative remedies before pursuing an action in

court under the NC statute. Congress did not

require administrative exhaustion for the

FFHA, as it did in some other administrative

contexts, because it imposes a substantial bur­

den on victims of discrimination and thereby

hampers the goal of both acts: to end residen­

tial segregation.

The burden is exacerbated in North

Carolina because the North Carolina Human

Relations Commission (NCHRC) lacks the resources to investigate and resolve claims in a

18

timely manner as required by statute. Delayed

adjudication denies prompt relief for merito­

rious complaints and keeps even innocent

defendants in limbo. Delay increases costs to

plaintiffi and defendants and may discourage

complaints. Low-income plaintiffs are espe­

cially affected by the time and expense

involved in delayed administrative proceed­

ings. In addition, exhaustion limits plaintiffs'

choice of forums, which undermines their

ability to obtain effective redress for discrimi­

nation. Exhaustion also contributes to low set­

clement ammmts because of plaintiffs' inabili­

ty to sustain lengthy proceedings. The large

number of administrative complaints, when

compared to paltry settlement amounts, sug­

gests that administrative remedies are inade-

quate to address pervasive discrimination. 4

Imposing an exhaustion requirement in

the NCFHA not only denies justice to victims

of discrimination, but is legally untenable

because such a requirement: 1) diverges sub­

stantially from the federal requirement of sub­

stantial equivalence, 2) lacks a foundation in

case law or the NCFHA's own statutory

terms, and 3) is inconsistent with the persua­

sive interpretation of parallel statures in similar

jurisdictions.

Current NC Law The NCFHA is largely modeled after the

FFHA As the NC Court of Appeals noted in North Carolina Human Rekztions Council ex rel Leach v. weaver Realty Co., the "[l]egisla-

SPRING 2011

ture modeled the key provisions of the State Fair Housing Act after provisions of the Federal Fffir Housing A cr. "5 The coun of appeals acknowledged that "the body of fed­eral cases interpreting the Federal Fair Housing Act is useful," but then rejected the federal case law recognizing disparate impact discrimination in fair housing claims. 6 The court found that disparate impact analysis was "contrary to the ordinary meaning of the terms in the North Carolina State Fair Housing Act," even though those terms marched the language of the federal law. 7

Following the ruling and subsequent inquiries by HUD, the legislature amended the state act to allow claims based upon disparate impact.8 After these amendments, "the Acts are now virtually identical."9

While largely mirroring the FFHA, the N CFHA omits language in the Federal Act that a parry has an express right to directly "commence a civil action in an appropriate United States district court or state court." 10

However, nowhere does the state law prohibit a parry from inamediately filing such a civil action: "[a]ny person who claims tO have been injured by an unlawful discriminatory hous­ing practice or who reasonably believes that he will be irrevocably injured by an unlawful dis­criminatory housing practice may file a com­plaint with the North Carolina Human Relations Commission."ll This permissive language implies that an administrative com­plaint is not the exclusive remedy. The N CFHA refers to various situations where a civil action may be pursued, but all within the context of the administrative enforcement scheme.12 The NCFHA does not address a plaintiff proceeding directly in court and bypassing the administrative option entirely; the enforcement provisions neither forbid nor regulate such judicial proceedings to remedy housing discrimination nnder NCFHA.

"It is a familiar canon of statutory con­struction that when a legislature borrows from the statutes of another legislative body, the provisions of that legislation should be con­suued as they were in the other jurisdiction at the rime of their adoption."13 Although feder­al decisions interpreting a statute even with verbatim terms are not binding on state courts, where, as in fair housing, "North Carolina decisions are few by comparison and the state and federal systems are closely inter­related," increased regard for federal decisions is appropriate.14 Deference to federal interpre­tation is particularly suitable when the state

THE NORTH CAROLINA STATE BAR JOURNAL

Leonard T Jernigan Jr. Kristina K. Brown

Practice Limited To: Workers' Compensation Serious Accidental Injury/Civil Litigation

statute and its judicial interpretations must be "substantially equivalent" to the federal scheme. The FFHA and cases interpreting it do not require exhaustion; "Congress intend­ed to provide all victims of Tide VIII viola­tions two alternative mechanisms by which to seek redress: immediate suit in federal court, or a simple, inexpensive, informal conciliation procedure, ro be followed by litigation should conciliation efforts fail." 15 The NC statute was modeled after the federal law; therefore, the NCFHA should be consrrued to not require administrative exhaustion.

There are very few cases interpreting the N CFHA, and none address the question of administrative exhaustion, even when that issue was argued to the court. In Bergman Real Estate Rentals v. North Carolina Fair Housing Center, a fair housing organization filed an administrative complaint. 16 The defendants sought an injunction in superior court based on lack of standing. 17 The organization argued the court lacked jurisdiction because the administrative process had not been exhausted: "The Durham Fai·r_ Housing Ordinance, state Fair Housing Act, and the Administrative Procedures Act (APA) man-

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date that such complaints be resolved in an administrative setting before any court inter­vention is permitted."18 Although the issue of exhausrion under the NCFHA was expressly raised, the NC Court of Appeals did not con­sider the issue, finding only that exhaustion was not required under the APA in that partic­ular siruation19 The lack of any North Carolina ruling requiring exhaustion, even when squarely before the court, suggests look­ing to other jurisdictions, and especially at the FFHA upon which the N CFHA is modeled, which does not require exhaustion.

Milsap v. Cornerstone Residential Management, Inc.

In Milsap, a class of prospective tenants and the Housing Opportunities Project for Excellence, Inc., (HOPE), sued a housing developer, alleging that its policy limiting the number of occupants per bedroom discrimi­nated on the basis of familial status.20 Plaintiffs' action was brought under both the FFHA and the analogous Florida FHA. 2!

Relying upon Florida precedent in Be!letete v. Halford,22 the federal disrricr court held, "the only law published on the issue holds that

19

Florida's Fair Housing Act claims are barred unless administrative remedies are exhausted," and dismissed the complaint. 23

Following the dismissal, the Florida Attorney General intervened in the case "for the limited purpose of arguing that the [Florida FHA] does not require exhaustion of administrative remedies."24 The attorney gen­eral's argument focused on three points: 1) the Florida act was modeled after the federal statute and ought to be interpreted with guid­ance from federal law; 2) the Belletete opinion improperly relied upon federal employment law, which requires exhaustion, and, 3) that the Florida Supreme Court was likely to over­rule the exhaustion requirement.25 Additionally; the attorney general warned that an exhaustion requirement "would clearly diminish, if nor entirely eliminate, the 'sub­stantial equivalency' of the Florida law to its federal counterpart," and undermine the pur­pose of both acts by barring "victims of hous­ing discrimination from raising their daims."26

Persuaded by the attorney general's brief, the Milsap court reversed itself, finding that the Florida Supreme Court would likely over­rule Belletete, and holding that the Florida FHA contained no requirement for adminis­trative exhaustion. 27 The opinion focused on the fact that Belletete improperly relied on state and federal employment law, which requires exhaustion, rather than federal case law and legislative intent for the FFHA, both of which specifically reject an exhaustion require­ment.28 The court also quoted the language of the Florida FHA that an aggrieved party "may file a complaint with the commission," "lan­guage [which] is permissive and not mandato­ry."29 "The clear import of the above-refer­

enced statutory language indicates a com­plainant may file a com plaint and exhaust administrative remedies or, alternatively, com-mence a civil action."30 -

North Carolina ought to pay special attention to Milsap not merely because of its cogent reasoning and the lack of any control­ling North Carolina cases, but primarily because of the great similarity between the fair housing statutory frameworks in Florida and North Carolina. Both are expressly mod­eled afi:er the FFHA, and both contain almost exactly the same language that persuaded the Milsap court that there was no exhaustion requirement in Florida.31 Even where the state '"acts differ from the federal statute, they differ in the same respects: both statutes spec-

20

ifY that even after the administrative proceed­ings have begun, a party may proceed in court if no resolution is reached within a given time period, 32 and both also lack any

analogous language to the federal provision which specifically allows a civil action with­out exhaustion. 33

Although the Milsap court did not address the attorney general's warning about substan­tial equivalency certification, it nonetheless found no exhaustion requirement in a statuto­ry s~heme virtually identical to North Carolina's. The case is even more compelling because in Florida, unlike North Carolina, an appellate court had previously ruled that exhaustion was required. Nevertheless, the court recognized the error of that ruling and found that an exhaustion requirement was a substantial deviation from the statutory lan­guage and persuasive federal law.

Administrative Remedies are Insufficient to Meet the Goals of the Fair Housing Act

Reading an exhaustion requirement into the statute, although legally questionable, would not be as objectionable if the adminis­trative process adequately deterred discrimina­tion. In the recent draft, Analysis of Impediments to Fair Housing Choice, all four of the primary impediments identilied by the State of North Carolina relate directly to the exhaustion requirement: 1) insufficient system capacity, 2) discrimination in the rental mar­kets, 3) constraints in the lending markets, and 4) "[p]ossible barriers in land-use poli­cies."34 Insufficient system capacity creates long delays in the administrative process, increasing costs and delaying resolution, and therefore deters complaints but not discrimi­nation. Rental and loan discrimination are specifically targeted by the NCFHA, but administrative exhaustion limits the impact of the law by increasing complainant costs and decreasing settlement amounts. As to the fourth impediment, the NCFHA could be used to challenge discriminatory zOning and land use practices, but complainants in North Carolina have avoided it due to the exhaustion requirement.35 Greater opportunity to bring cases in state court without an exhaustion requirement would not completely remove these impediments, but the increased poten­tial for litigation would help deter and remedy discrimination.

State fair housing claims are regularly brought through the N CHRC, bur the puta-

rive exhaustion requirement limits strategic options, reduces settlement amounts, and increases the cost of proceedings. "While com­plainants may pursue claims under the FFHA, federal litigation generally consumes more time and resources than state litigation because courts are fewer and more sparsely located, with crowded dockets and a smaller bar. State judges are also more likely to be familiar -with the context of segregation and fair housing in their communities, as recog­nized in the federal statute by its preference for local resolution where protections are substan­tially equivalent. 36

Unfortunately, after the time and cost of an administrative proceeding, complainants are unlikely to bring a suit in state court. Out of hundreds of complaints to the NCHRC in recent years, only two plaintiffs have proceed­ed in court following the administrative pro­ceedings. 37 An increased choice of forums would broaden the options available to advo­cates and help resolve legitimate claims of dis­crimination.

The persistence of housing discrimination in North Carolina also suggests that recovery amounts awarded in conciliation and admin­istrative hearings have been inadequate to

deter discrimination . .An analysis of data from the NCHRC shows that of 55 cases with reported non-zero settlement amounts, the average recovery was $3,232.26; the average of 'those cases conciliated through the adminis­trative process, 48 of the 55, was only $2,546.85.38 These low amounts, even in cases where the agency found cause to believe discrimination had occurred, are an inade­quate deterrent to housing discrimination.

Cases that proceed to an administrative hearing fare slightly better. A review of fair housing cases litigated through the N C Office of Administrative Hearings from 2001 to 2009 reveals only four published cases. 36 Discrimination was found in two of those cases, both default judgments related to race discrimination.40 One resulted in damages of $30,910, the other $9,400, both substantially larger than the average results achieved through conciliation. Although the awards in these administrative hearings are higher, the fact that only a tiny fraction of cases proceed to this stage highlights the inadequacy of this exclusive forum.

Unfettered access to state courts would provide greater deterrence through increased damages for discrimination. In administra­tive resolutions, the potential for an immedi-

SPRING 2011

ate court proceeding, with the associated attorney costs and uncertainty, would encourage respondents to settle for higher amounts.41 In civil court, the amount of damages and penalties awarded for housing discrimination usually exceeds that of admin­istrative proceed.ings.42

One fmal advantage of greater access to

state courts would be the development of a body of case law interpreting the NCFHA. The North Carolina Court of Appeals has only heard three cases since 1986 interpreting the act; none have been heard by the NC Supreme Comt.43 Of the three cases, one was

dismissed for lack of standing and another was subsequently overmled by amendment to the act.44 This dearth of judicial analysis increases uncertainty in the act's interpretation, which in turn discomages complaints and further hampers the purpose of the act.

Substantial Equivalency HUD must certifY that state agencies and

statutes are "substantially equivalent" to the FFHA and its enforcement structure in order for the state to receive funding and be referred claims. Substantial equivalency depends both on the adequacy of the law, which fornses on the text of the statute, and on the adequacy of performance, which examines how the statute is enforced. The adequacy of the law prong mandates inter alia that the state law "not place excessive burdens on the aggrieved per­son that might discomage the filing of com­plaints," including increased costs,45 and that the law affords both administrative and judi­cial enforcemem.46

Adequacy of performance depends largely on the timeliness of the state agency's process­ing of charges, requiring commencement of processing within 30 days of receipt, determi­nation of reasonable cause within 100 days, and administrative resolution within one year. 47 Performance reviews also consider the standards used, attempts at settlement, the number of complaints filed, and the adequacy of the relief granted to prevent continued dis­crimination. 48

Understaffing, combined with the need for travel and detailed investigation, prevents the NCHRC from determining cause in the majority of complaints within the 90 days required by the NCFHA, which in~reases the delay and cost to plaintiffs and frustrates the purpose of the act. 49 Of the 70 cases with an ascertainable cause determination date, 99% took mote than the NCFHA"s 90 days, and

THE NORTH CAROLINA STATE BAR JOURNAL

96% took mote than the 100 days allowed by the FFHA. 50 On average ir rook 341 days for the N CHRC to investigate and determine whether cause existed. The longest case took over two years. 5I While both state and federal law allow the agency to exceed the time limits in exceptional cases if they provide a written explanation of the delay to the parries, it is inconceivable that legislators contemplated that 96-99% of cases would exceed tl1is time­frame. 52 Even if these delays could be justi­fied, they highlight the inadequacy of the administrative remedy as the exclusive option to address housing discrimination. Administrative exhaustion ought not to be required if for no other reason than to relieve the burden on the overwhelmed NCHRC.

Administrative resolution also frequently takes longer than the statutorily permitted year. Of 124 cases analyzed, 38 (31%) took more -than a year to resolve.S3 On average the

cases took almost a vear to resolve, but the longest took almost ~even years. 54 Although no evidence suggests that the N CHRC fails to provide written notice explaining the delays, the fact that a large percentage of the com­plaints are not handled within the period set by statute violates the intent of the FFHA, dis­courages victims of discrimination from seek­ing administrative redress, and consritutes an "excessive burden" on complainants.

Permitting aggrieved parries to file directly in state court would provide individuals a more expeditious vehicle for their claims, as well as relieve pressure on NCHRC.

An exhaustion requirement contradicts the substantial equivalency provisions regarding the adequacy of the law and the adequacy of performance. If the state law requires exhaus­tion, it fails the adequacy of the law prong because it discourages complaints and does not afford equivalent judicial enforcement. The consistent failure of the NCHRC to comport to the federal time frames constitutes inadequate performance. An exhaustion requirement undermines the intent and effica­cy of the NCFHA. compounds delays in resolving complaints, discourages claim fil­ings, and exacerbates the resource and person­nel pressure on N CHRC. Administrative exhaustion therefore jeopardizes NC's sub­stantial equivalency certification.

Conclusion The upcoming state report on impedi­

ments to fair housing highlights the persist­ence of residential segregation and discrimina-

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tion. While the NCHRC labors diligently against the tide of complaints, its capacity is insufficient. Removing the perceived adminis­trative exhaustion requirement is not a panacea, but would expedite resolution of fair housing claims, increase the damages awarded in fair housing cases, and further the deterrent effect of the act. Fair housing advocates would gain a key tool in their work~access to state courts. Most importantly, federal funding through HUD for fair housing would be safe­guarded by bringing North Carolina into compliance with federal regulations. •

Mark Dorosin is the senior managing attor­

ney at the UNC Center for Civil Rights. ·where Peter Gilbert is the community development

attorney fellow. Special thanks are also due to

21

Charles E Daye, Henry Brandis proftssor of law and ckputy director of the Center for Civil Rights at the UNC School of Law, fonner community development attorney follow Sarah Krishnaraj, and Nam Douglass.

Endnotes 1. Fair Housing Act, 42 U.S. C.§ 3601 (2006).

2. Id or §3612(f).

3. Id "§3613(,)(3).

4. See infra text accompanylng notes 38-43.

5. 79 N.C. App. 710,714,340 S.E2d 766,768 (1986).

6. Id at 714-15,340 S.E.2d at 768-69.

7. Id 8. B. Bailey Liipfert III, Comment, The Broadened

Dimensiom and More Powerful Bite of the State Fair H(}USing Act; 12 CAMPBELL L REV. 268, 281-82 (1989-90).

9. Id at268.

10. Fill Horning Act, 42 U.S. C.§ 3613(o)(l)(A) (2006).

11. State Fair Housing Act, N.C. GEN. STAT.§ 41A-7(,) (2007) (=ph,~ wdcd).

12. Id

13. Hyde v. Abbott Lab., Inc., 123 N.C. App. 572, 578, 473 S.E.2d 680, 684 (1996) (considering federal cases as persuasive authority where the state anti-trust statute

was modeled after federal law). See also Edmisten v.J C Penney Co., 292 N.C. 311, 314--16, 233 S.E.2d 895, 898 (1977) (citing federal cases to interpret NC statutes modeled afi:er the Federal Trade Commission Art).

14. Stone v. Lynch, 68 NCApp. 441, 443-44, 315 S.E.2d 350, 352-53 (1984) (declining to apply federal income tax law where a North Carolina decision applied direct­ly).

15. Glttdsume v. Village of BelLwood, 441 US 91, 104 (1979); see e.g., Mitcheilv. Ce!fone, 389 F.3d 86, 90 (3rd Cir. 2004).

16. 153 N.C. App. 176, 177, 568 S.E.2d 883, 884 (2002).

17. Id

18. Br. DeE-Appellant at 8, 17, Bergman, 153 NCApp. 176,568 S.E.2d 883 (2002) (crnph'->~ oddcd).

19. Bergman, 153 N.C. App. at 179, 568 S.E.2d at 887.

20. Compl., Milsap v. Cornerstone Residential Mgmt., No. 05-60033-CN, 2005 WL 452058 (S.D. Fla Feh. 1, 2010). See also Keenya J. Robertson, President, Housing Opporrunicies Project for Excellence, Inc., Testimony before the National Commission on Fair Housing & Equal Opportunity (Oct. 17, 2008), avail­able at: www.prrac.orglprojecrs/fair_housing_commis­sion/atlanta!robertson.pd£

21. Complaint at 10, Milsap, No. 05-60033-CIV, 2005,

WL452058.

22. 886 So.2d 308 (Fla.. Dist. Ct. App. 2004).

23. Order at 5, Milsap, No. 05-60033-CIY, 2008 WL 1994840 (May 5, 2008) (citing Be!leteteand citing Ross v.]im.Adams Ford, Inc., 871 So.2d 312 (Fla. Dist. Ct. App. 2004)).

24. Intervener's Mot. Recons. atl-2, Milsap, 2009 WL

5548496 (Nov. 30, 2009).

25. Id "3-7.

26. Id at 8-10.

27. Order and Op. at *4, Milsap, 2010 WL 427436 (Feb.

22

1, 2010).

28. Id at*1-2.

29. Id at*3.

30. Id 31. Compare State Fair Housing Act, N.C. Gen. Stat. §

41A-7(a) (2007) (''Any person who claims to have been injured by an unlawful discriminatory housing practice or who reasonably believes that he will be irrevOcably injured by an Wllawful discriminatory housing practice may file a complaint with the North Carolina Human Relations Commission." (emphasis added)), with Fair HousingAa, Fla.. Stat.§ 760.34(1) (''Any person who claims to have been injured by a discriminatory hous­ing practice or who believes that he or she will be injured by a discriminatory housing practice that is about to occur may file a complaint with the commis­sion." (emphasis added)).

32. N.C. Gen. Stat.§ 41A-7(h) (130 days aftet filing, the NCHRC, "shall issue to the complainant a right-to-sue letter which will enable him to bring a civil action in superior coun''); Fla. Stat. § 760.34(4) (180 days after the complaint is filed, "the person aggrieved may com­mence a civil action in any appropriate court").

33. See Fair Housing Act, 42 U.S. C. § 3612 (2006). See generally N.C. Gen. Stat. § 41A; Fla.. Stat. §§ 760.20-37. But see Fla. Stat.§§ 760.35(d) (section contemplat­ing civil actions initiated by the commission specifies, "This subsection does not prevent any other legal or administrative action provided by law.").

34. 2010 North Carolina Analysis ofimpediments to Fair Housing Choice Draft Report for Internal Review at 3 (September 17, 2010), www.nch&.com/forms/Forms/ 2011-2015AI.pd[

35. See, e.g., Complaint, Habitat for Hunumity of the NC Sa11(ihills> Inc. v. Unsworth, 2009-CVS-00858 (Moore County Super. Ct. May 1, 2009) (A &ir housing case brought by the UNC Center for Civil Rights challeng­ing, inter alia, exclusionary zoning by the town of Pinebluff, NC. The case was brought under the FFHA in state court, removed to federal court, remanded to state coun, and ultimately settled.).

36.42 u.s.c. § 3610(f).

37. Telephone Interview by Nam Douglass with Richard Boulden, chief counsel for NCHRC (June 23, 2009). One plaintiff proceeded in federal court; the other in state court alter an administrative finding of"no cause.~ The property in question purchased for about $250,000. Id

38. Data is based upon a review of 363 cases filed between January 22, 2002, and April17, 2009. The Center for Civil Rights requested data from the NCHRC on fair housing complaints in June 2009, and again in September and October 2010. The Center was provided with four overlapping data sets, a "Summary of Fair Housing Intake Data for Human Relations Commission November 2004--0ctober 3, 2008," "FHAP Voucher Detail Reports" covering

cases closed between June 16, 2008, and June 16, 2009, a "Case Closed Inventory'' filed with HUD by the NCHRC covering January 1, 2007, through September 30, 2010, and a "Complaint Log" covering complaints filed between December 5, 2007, and October 25, 2010. This data was amalgamated, and 362 cases had enough informacion aboUt their dispo­sition to analyze. A small number of cases had incon­sistent information between the various reports and were excluded.

These cases do not represent all complaints filed in this time period but were all of the information received

from NCHRC. According to the draft report on impediments to fair housing, "more than 800 com­plaints were filed in North Carolina from 2004 through 2009." 2010 North Carolina Analysis of Impediments to Fair Housing Choice Draft Report at 3. Complaints filed in North Carolina would not nec­essarily be included in NCHRC's data if they were filed with municipal agencies or resolved by HUD.

39. Decisions, North Carolina Office of Administrative Hearings, www.oah.state.nc.us/hearingsfdecisions/ Oisting OAH cases related to theHRC between 2001 and 2009). Of seven cases listed as having had admin­istrative hearings, fOur had published decisions. Two of these, one brought by the NCHRC and the other by the Orange County Human Relations Commission, resulted in findings of no discrimina­tion. Id NC Human Relations Comm'n ex rel Teele v. m.tko Enter., 00 HRC 1449 (NC Office Admin. Hearings Dec. 20, 2001); Orange County Human Relations Comm'n ex rel Wolpin v. Cornerstone Realty Income Trust, 03 HRC 1116 (N.C. Office Admin. Hearings Mar. 24, 2004).

40. Guffey v. Heavener, 99 HRC 1383 (NC Office Admin. Hearings Aug. 6, 200 1); NC Human Relations Comm'n ex rel johnson v. Gore, 08 HRC 1166 (NC Office Admin. Hearings Mar. 16, 2009).

41. Liipfertat 288 ("results [in an administrative proceed­ing] may be more predictable" than in civil trial, and "[flor respondents, the risk of facing a jury can be a costly risk'').

42. Id (citing]. Kushner, Fair Housing Discrimination in Real Estate, Community Development, and Revitalization, app.9-1 (1983 and Supp. 1988)).

43. A Wesclaw search for "Fair Housing Act" in the "nc­cs" or "All North Carolina State Cases" database reveals three cases, Lee Ray Bergman Real Estate Rentals v. North Carolina Fair Housing Center, supra n. 17, NC Human Relations Council ex rel Leach v. Wfaver Realty Co., supra n. 6, and Town of Newton Grove v. Sutton, 111 NC App. 376,432 S.E.2d441 (1993).

44. Supra n. 9, n. 12.

45.24 C.ER_ § 115.204(,)(3).

46. 24 C.ER_ § 115.204(b). 42 U.S. C. § 3612(,).

47. 24 C.ER_ § 115.206(e).

48. Id 49. N.C. Gen. Stat. § 41A-7(e) (While the federal regu­

lations allow 100 days, the NCFHA requires the short­er 90-day time period.).

50. Of the case data provided by the NCHRC, see supm n. 39, eight cases gave a date of cause determinacion, one of which was excluded because the data was incon­sistent with other information provided. Sixty-six addi­tional cases resulted in a finding of "no-causen so the cause determination date would be the same as -the case-closed date. Of these 66, three cases were excluded due to discrepancies in the case-closed date.

51. Id 52. 24 C.ER_ § 115.206(e). N.C. Gen. Sen.§ 41A-7(e).

53. Of the data provided by the NCHRC, 135 cases had dates for both the filing of the complaint and the administrative resolution. Of these, five cases had sig­nificant discrepancies between data sets provided, and so were excluded from the sample. Six additional cases were excluded from the study because they were appar­ently filed and closed on the same day. 124 cases remained and were analyzed. See supra n. 39.

54. Id

SPRING 2011

North Carolina Department of Administration

Beverly Eaves Perdue, Governor Mo5cs-'Carey, Jr., Secretary

John A. Campbell, Director N.C. Human Relations Commission

August 8, 2012

Re: Exhaustion of Administrative Remedies under the NC Fair Housing Act

To Whom It May Concern:

The North Carolina Fair Housing Act, N.C.G.S. § 41 A-1 et seq., establishes rights and provides remedies for persons harmed by acts of discrimination involving residential real estate. The North Carolina Human Relations Commission's legal opinion is that complainants under the Act are not required to file a complaint with the Commission or otherwise exhaust their administrative remedies before bringing suit in Superior Court to assert their rights.

s;J:',~~~/~ RichardS. Boulden Agency Counsel North Carolina Human Relations Commission

John Campbell, Executive Director

5-\-~ <>.~;. N~>~ c,.._v-o\.:.1"'\c...,.

c..o 1.1. .... -""-\ o-(= 1..0<>-1c... -e

'S'A.b~ be.d ........ c\. s,L>!:>On"i lrc

tHailiug Address: 1318 :Vlaii-Scrvice Center R:ildgb, N.C 276~)9-l31S

Teleplwne/lDD.-(919) 807-4420 Toll-Free: 1-866-324~74 74 ( t "866 Fair ! lsg)

Fox (919) 807-4435

http:/.lwwJv. doa.nc.gow'l;rc/ An Equal Opporftilli(r!.:{f}irmatiw Aaion Em(llover

Location: 1!6 W. Jone::; Srn.-:t:.~t, 211

J floor Raleigh, NC 27603

Exhibit C

Ul5/U~/t:Ol~ THU liJt 26 FAX 919 431 3100 OAH HEARINGS

STATE OF NORTH CAROLINA OFFICE OF ADMINISTRATIVE HEARINGS

Gl]002/002

Exhibit D

Mailing address: 6714 Mail Service Center Raleigh, NC 27699-6714

Street address: 1711 New Hope Church Rd,

Raleigh, NC 27609-6285

9 August 2012

RE: Exhaustion of Administrative Remedies Under the NC Fair Housing Act

To Whom lt May Concern:

The North Carolina Office of Administrative Hearings defers to and has no reason to question the North Carolina Human Relations Conunission' s interpretation of it> statute conceming complainants' exhaustion of administrative remedies before bringing suit in Superior Court to assert their rights.

Very truly yours,

~ &YL Eug~ General Counsel

State ofN orth Carolina County of Wai<e..

Sworn and Subscribed to before me this the __ If!#- day of ~"""'* , 2012.

;(~ ~~_j_l(uin/drks~~~ Notary Pub ·c

My Commission Expires: 4-!f) ~ /5

Administratioll 919/431-3000

fax: 919/431-3100

Rules Division 919/431-3000

fax; 9I9/431~3ID4

Judges and Assistants

919/431-3000 fro:: 919/431-3100

Clerk•s Office 919/431-3000

fux: 919/431·3100

Rules Rtwie>'Y Commission

919/431-3000 fa:<~ 919/43!~31 04

An Equal Employment Opportunity Employer

Civil Rights Division

9191431-3036 fax: 919/431~3103