(holding that non-minority plaintiffs had standing under section 1981 to bring action against defendants who allegedly harassed plaintiffs for their efforts to find housing for minorities in the area).
Old West End Association v. Buckeye Federal Savings & Loan, 675 F. Supp. 1100 (N.D. Ohio 1987), involved facts very similar to this case. There, the plaintiffs, white homeowners in a predominantly minority neighborhood, entered into a contract to sell their home to two whites. The buyers applied for a mortgage, but their application was denied. The plaintiffs then filed suit pursuant to sections 1981, 1982, 1985 and the Fair Housing Act against the lender and the firm that prepared the mortgage application, alleging that the defendants denied the application based on the racial composition of the neighborhood. In considering defendants' motion for summary judgment, the district court noted, "the parties involved in the underlying transaction are white. This factor, however, is irrelevant . . . . This court has previously found that non-minorities have standing to maintain discrimination actions for injuries suffered by them as a result of racially discriminatory practices." Id. at 1102 (citations omitted). Drawing all inferences in favor of the plaintiff as the non-moving party, the court in Old West End Association found that plaintiffs had established that they applied for a mortgage to purchase property located in a minority neighborhood, that an independent appraisal concluded that the sale price represented the value of the house, that the buyers were creditworthy, and that the loan was rejected. Id. Denying the lender's motion for summary judgment, the court in Old West End Association held that these facts, proven by the plaintiffs, stated a prima facie case under the Fair Housing Act and the Civil Rights Act. Similarly, plaintiff in this case, at least at this pleading stage of the proceedings, has stated a prima facie case under sections 1981 and 1982. Plaintiff alleges that the house is located in a predominantly minority neighborhood, that the buyers were creditworthy, that an independent appraiser estimated that the property was worth $ 197,000 in 1991, and that the mortgage application was denied.
Courts have consistently found that plaintiffs in section 1982 suits have standing to assert their own rights even if those rights overlap with the rights of third parties. In City of New York v. Fillmore Real Estate, Ltd., 665 F. Supp. 178, 182 (E.D.N.Y.) (Korman, J.), the City of New York brought a section 1982 action against a real estate brokerage firm, alleging that it engaged in racial steering. Denying defendant's motion to dismiss the complaint on the ground that the City had no standing to assert the rights of its citizens, the court stated that the City "brings this action on its own behalf, asserting that defendants' discriminatory practices depress real estate values, thereby decreasing the City's tax revenues." Id. at 181. See also City of Evanston v. Baird & Warner, Inc., 1990 U.S. Dist. LEXIS 15407, 1990 WL 186575 (N.D. Ill. Nov. 15, 1990) (holding that, at least for purposes of motion to dismiss, city was asserting its own rights, not the rights of its citizens, in section 1982 suit against brokerage firm based on racial steering, and noting that "[a] significant reduction in property values directly injures a municipality by diminishing its tax base") (internal quotations marks and citations omitted).
In its motion to dismiss, NatWest relies on Mackey v. Nationwide Ins. Cos., 724 F.2d 419 (4th Cir. 1984). In Mackey, an insurance agent sued his employer pursuant to sections 1981 and 1982 and the Fair Housing Act, alleging that his employer refused to provide coverage to homeowners in minority neighborhoods, thereby depriving him of potential commissions. The Fourth Circuit found that the plaintiff was asserting the rights of the homeowners in the minority neighborhoods and therefore had no standing under the doctrine of third party standing. The court reasoned:
A racially discriminatory refusal to insure houses in predominantly black neighborhoods may give a cause of action [under sections 1981 and 1982] to the homeowners, the direct victims of the discrimination. The plaintiff does not claim to be such a victim, but alleges only that he lost opportunities to sell property insurance to black friends and acquaintances. Id. at 421.