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US District Court Judge Raymond Moore Feb 12 2019 Order Granting Cordillera Residents Motion To Dismiss On CSMN Investments V Cordillera Metro District, Cordillera Property Owners Association
US District Court Judge Raymond Moore Feb 12 2019 Order Granting Cordillera Residents Motion To Dismiss On CSMN Investments V Cordillera Metro District, Cordillera Property Owners Association
Plaintiffs,
v.
Defendants.
______________________________________________________________________________
ORDER
______________________________________________________________________________
This matter is before the Court on two motions to dismiss that were filed or joined by all
Defendants. (ECF Nos. 83, 85, 86.) The motions are fully briefed. (ECF Nos. 94, 95, 97, 99,
100.) The Court has reviewed the case file and applicable law and, for the reasons below, grants
the motions.
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I. LEGAL STANDARD
In evaluating a motion to dismiss under Fed. R. Civ. P. 12(b)(6), a court must accept as
true all well-pleaded factual allegations in the complaint, view those allegations in the light most
favorable to the plaintiff, and draw all reasonable inferences in the plaintiff’s favor. Brokers’
Choice of America, Inc. v. NBC Universal, Inc., 757 F.3d 1125, 1136 (10th Cir. 2014); Mink v.
Knox, 613 F.3d 995, 1000 (10th Cir. 2010). However, conclusory allegations are insufficient.
Cory v. Allstate Ins., 583 F.3d 1240, 1244 (10th Cir. 2009). The complaint must allege a
“plausible” right to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 569 n.14 (2007); see also
id. at 555 (“Factual allegations must be enough to raise a right to relief above the speculative
level.”). To determine whether a claim is plausible, a court considers “the elements of the
particular cause of action, keeping in mind that the Rule 12(b)(6) standard doesn’t require a
plaintiff to set forth a prima facie case for each element.” George v. Urban Settlement Servs.,
II. BACKGROUND
The following facts are either taken from the Second Amended Complaint (ECF No. 80)
single-family residences, vacant residential lots, a golf course, a lodge, and other improvements.
(Id. at ¶ 19.) Defendant Cordillera Metropolitan District (“CMD”), a Colorado special district,
provides services to Cordillera. (Id. at ¶ 3.) Defendant Cordillera Property Owners Association,
Inc. (“CPOA”) is responsible for managing and maintaining the Cordillera community. (Id.
at ¶ 5.) Defendant Rachel Oys was, at all times relevant to this action, the district manager of
2
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CMD. The remaining Defendants are individuals who were, at all times relevant to this action,
either elected members of the CMD Board or appointed members of the CMD Legal Committee.
Plaintiffs (collectively, “CSMN”) purchased the lodge at Cordillera “for the express
purpose of operating an upscale residential rehabilitation center for persons recovering from drug
and alcohol addiction, eating disorders, and other psychiatric conditions.” (Id. at ¶ 31.)
Previously, the lodge had been operated as a hotel with various amenities, which community
members had access to at discounted rates, but it had ceased to be profitable. Defendants’ efforts
to oppose the rehab center are the basis for this lawsuit. A substantial part of the underlying
dispute hinges on the interpretation of the zoning ordinances contained in the Cordillera Planned
In 2009, the PUD was amended to allow thirty-four different uses of the lodge parcel. In
June 2016, CSMN obtained a letter from the community development director, stating that the
rehab center was an allowable use of the lodge under the PUC. (Id. at ¶ 34.) Defendants CMD
and CPOA voted to appeal that interpretation to the Board of County Commissioners (“BOCC”)
and also agreed to form the CMD Legal Committee. CSMN contends these actions were taken
“with the intent to discriminate against CSMN and its prospective clients.” (Id. at ¶¶ 37, 38.) In
addition, Defendant Oys notified community members about the proposed rehab center, many of
whom responded with disapproving emails. 1 (Id. at ¶ 40.) Plaintiffs characterize these emails as
being “of a discriminatory nature, and demonstrative of animus toward CSMN and its
1
By way of example, one community member wrote: “Catastrophe for the community. Heroin addicts moving in
with other unbalanced individuals and the predators that surround such facilities. This should be stopped at all
costs—if not, our house is going on the market and we are willing to take a substantial loss to avoid such a changed
neighborhood. I would not be comfortable allowing our grandchildren outside unguarded.” (ECF No. 80 at ¶ 40.)
The complaint contains quotes from more than a dozen emails expressing similar sentiments. (Id.)
3
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prospective Clients . . . indicating their displeasure with the prospect of the [rehab center] and
CSMN’s prospective Clients in Cordillera.” (Id.) Defendant Oyes responded by thanking the
community members for expressing their concerns and assuring them that Defendants CMD and
CPOA were “united in actively pursuing all options to halt” the rehab center. (Id.)
On June 28, 2016, representatives of CSMN met with Defendant Oys and some of the
other individual Defendants and told them that their prospective clients were protected under the
ADA and FHA. (Id. at ¶ 45.) Nevertheless, Defendants filed their appeal with the BBOC the
following day. On June 30, 2016, Defendants CMD and CPOA held a joint meeting attended by
over 200 community members. (Id. at ¶ 48.) In response to remarks by the community
members, some individual Defendants and representatives of Defendants CMD and CPOA
cautioned that “discriminatory remarks” should be avoided when discussing the rehab center.
The BOCC held a hearing in September 2016, at which many community members
voiced their concerns about the rehab center. (Id. at ¶¶ 61-62.) The BOCC affirmed the
director’s interpretation that the rehab center was allowed under the PUD (id. at ¶¶ 63, 65) but
issued a resolution modifying that interpretation to require “that the clinic component be
In November 2016, Defendants CMD and CPOA appealed the BOCC’s decision in state
court under Colorado Rule of Civil Procedure 106(a)(4). (ECF No. 80 at ¶ 68.) In
September 2017, the state district court affirmed the BOCC’s decision in a thirty-page order.
No. 17CA1973, 2018 WL 6241502 (Colo. App. Nov. 29, 2018) (unpublished).
4
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CSMN initiated this action in October 2017. The gravamen of the complaint is that
Defendants’ opposition to the rehab center was discriminatory and violated various statutes.
CSMN alleges that Defendant CMD violated the Americans with Disabilities Act, 42 U.S.C.
§§ 12101-12213, because CSMN’s potential clients are entitled to protection under that statute.
It alleges that all Defendants violated the Fair Housing Act, 42 U.S.C. §§ 3601-3619, because
they restricted CSMN’s efforts to provide residential services to people with disabilities and
opposition to the rehab center. And it alleges that Defendants (except for CPOA) violated the
Civil Rights Act of 1871 by “conspiring to deprive, failing to stop the deprivation, or depriving
CSMN and its future Clients of equal protection of the laws and due process of law.” (ECF
No. 80 at ¶ 102.)
III. ANALYSIS
Defendants make several arguments in favor of dismissal. With respect to all but one of
CSMN’s claims, the Court concludes Defendants are immune from liability based on the
Noerr-Pennington doctrine. See E. R.R. Presidents Conference v. Noerr Motor Freight, Inc.,
365 U.S. 127 (1961); United Mine Workers v. Pennington, 381 U.S. 657 (1965). With respect to
CSMN’s remaining claim that certain Defendants retaliated against them under the FHA by
encouraging opposition the rehab center, the Court concludes CSMN has failed to state a claim
A. Noerr-Pennington Immunity
“applies fully to municipal activities.” New West, L.P. v. City of Joliet, 491 F.3d 717, 722
5
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(7th Cir. 2007); see also Tri-Corp Housing Incorporated v. Bauman, 826 F.3d 446 (7th Cir.
2016) (“Public officials . . . enjoy the right of free speech under the First Amendment, applied to
the states through the Fourteenth.”). Although “the right to petition . . . does not provide an
absolute immunity from liability for actions based on petitioning activity, the Supreme Court has
held that such liability cannot be imposed in the absence of a finding that the position taken
lacked any reasonable basis.” Herr v. Pequea Twp., 274 F.3d 109, 115 (3d Cir. 2001) (citations
omitted), abrogated on other grounds by United Artists Theatre Circuit, Inc. v. Twp. of
Warrington, 316 F.3d 392, 400 (3d Cir. 2003). Thus, “efforts to influence government activity
cannot be the basis of legal penalties[] unless the proposal to the governmental body is a sham.”
In this context, “sham” litigation means “the pursuit of claims so baseless that no
reasonable litigant could realistically expect to secure favorable relief.” Prof’l Real Estate
Inv’rs, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49, 62 (1993). “Only if challenged
litigation is objectively meritless may a court examine the litigant’s subjective motivation.” Id.
at 60. Based on this rationale, several courts have concluded that the Noerr-Pennington doctrine
blocks suits under the FHA arising out of allegedly biased litigation or lobbying by
Here, the allegations do not establish that Defendants’ petitioning activity was objectively
baseless. As noted by the state district court, the PUD contains several relevant terms that are
not defined within the PUD. (ECF No. 80-7 at 9.) The proper interpretation of the PUD as
revised in 2009 and CSMN’s intention to designate different portions of the lodge for different
uses (constituting a significant departure from how the lodge had previously been operated)
6
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presented issues that were appropriate for adjudication. Moreover, the BOCC appeal was
partially successful, causing the BOCC to modify its previous approval of the rehab center by
requiring “that the clinic component be operated as an outpatient facility.” (ECF No. 80-6 at 6.)
Although the BOCC rejected most of Defendants’ arguments, the Court finds no grounds for
deeming those arguments objectively baseless. With respect to Defendant CMD (and to any
extent which the complaint alleges violations of the individual Defendants in their official
capacities), the BOCC appeal is merely an instance where “officials of one governmental body
tried to persuade officials of a different public body to act in particular way.” Tri-Corp.
Housing, 826 F.3d at 450. Such conduct is protected under the Noerr-Pennington doctrine.
CSMN asserts that the appeal to the state district court was objectively baseless, but it has
not provided factual allegations to support this assertion. The complaint references the district
court’s decision, a thirty-page, detailed analysis of the arguments presented. Though those
arguments were ultimately rejected and the BOCC’s resolution was affirmed, the district court
did not conclude that the appeal was baseless. CSMN’s arguments with respect to the appeal to
the state appellate court are insufficient for the same reasons—the appellate court affirmed the
district court’s appeal but did not rule that Defendant CPOA lacked a realistic expectation of
obtaining favorable relief. The mere fact that CSMN prevailed in those proceedings does not
establish that they were a sham. See New West, 491 F.3d at 722.
The complaint does not contain allegations from which the Court could conclude that
Defendants abused the litigation process. Cf. California Motor Transp. Co. v. Trucking
Unlimited, 404 U.S. 508, 513, 516 (1972) (concluding allegations fell within sham exception
where factfinder could conclude administrative and judicial processes had been abused). Indeed,
7
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CSMN takes the position that the litigation was motivated by discriminatory animus, not by an
intent to deprive CSMN of access to administrative and judicial processes. This case does not
present “a pattern of baseless, repetitive claims” that would constitute an abuse of administrative
and judicial processes. And because the litigation was not objectively baseless, Defendants’
subjective motivation is irrelevant. See Prof’l Real Estate Inv’rs, 508 U.S. at 60-61 (outlining
matter of law. See id. at 63 (“Where . . . there is no dispute over the predicate facts of the
underlying legal proceeding, a court may decide probable cause as a matter of law.”).
B. FHA Retaliation
To the extent CSMN alleges Defendants retaliated against them under the FHA through
encouraging community sentiment and action” against the rehab center (ECF No. 80 at ¶ 47) and
Defendant Oys’ circulation of “talking points” to community members (id. at ¶ 43)— the Court
with any person in the exercise or enjoyment of, or on account of his having exercised or
enjoyed, or on account of his having aided or encouraged any other person in the exercise or
enjoyment of, any right granted or protected” under FHA. The court is not persuaded that the
comments by community members fall within the conduct proscribed by this statute, but even if
they did, CSMN’s allegations do not establish that any Defendant caused any proscribed
conduct. In other words, the complaint contains no specific allegations that any Defendant
8
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coerced, intimidated, or threatened anyone, or that any Defendant interfered with anyone’s rights
IV. CONCLUSION
The motions to dismiss (ECF Nos. 83, 85) are GRANTED. The Clerk is directed to close
the case.
BY THE COURT:
____________________________________
RAYMOND P. MOORE
United States District Judge