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September 30, 1999


The opinion of the court was delivered by: Kennedy, District Judge.


Plaintiffs allege that defendants violated the Fair Housing Act of 1968, as amended, 42 U.S.C.A. §§ 3601-3631 (West 1994 & Supp. 1998) ("FHA"), and the Americans with Disabilities Act of 1990, 42 U.S.C.A. §§ 12181-12189 (West 1995 & Supp. 1998) ("ADA"), by refusing to provide standard landlords' insurance or by providing insurance at less favorable rates and terms to landlords who rent to disabled tenants. Defendants Allstate Insurance Company ("Allstate") and State Farm Fire and Casualty Company ("State Farm") each have filed a motion to dismiss the complaint claiming that (1) plaintiffs lack standing, (2) the practices about which plaintiffs complain may not be scrutinized under the FHA because of the operation of the McCarran-Ferguson Act, and (3) plaintiffs have failed to state a claim upon which relief may be granted. Upon consideration of the motions and the responses thereto, the court concludes that the motions should be denied.


A. The Individual Plaintiffs

The individual plaintiffs are two landlords, Thanda Wai and Arthur Verbit, who rent their homes to persons with disabilities. In May 1994, Wai purchased a single-family dwelling in Silver Spring, Maryland. For an annual premium of $358, Allstate provided Wai a homeowners insurance policy that included both casualty and liability coverage. In October 1995, Wai rented her house to an organization that provides housing for handicapped individuals, Christians for Assisted Living for the Mentally Retarded Association ("CALMRA").

After signing the lease, Wai contacted her Allstate agent, James Dooley, and requested that Allstate change her homeowners' policy to a landlord policy. Dooley provided Wai with an initial quote of $426 per year for casualty and liability insurance. Dooley then inquired about the tenants and learned that they were three handicapped women and a live-in counselor. Dooley immediately withdrew the insurance offer. A few days later, Dooley confirmed that Allstate refused to provide standard landlord insurance because there were handicapped tenants in the household. Dooley informed Wai that she would need to obtain commercial insurance and recommended a different agency. Allstate canceled Wai's existing policy.

Wai contacted State Farm. State Farm's agent, James Reid, informed Wai "that it was State Farm's policy that where a house is occupied by handicapped individuals and a counselor or other assistance is provided to them, the house is considered a `commercial operation' outside the scope of State Farm's insurable risk." Complaint ¶ 19. State Farm refused to provide Wai with any insurance, instead referring her to another insurance agency through which she purchased a commercial landlord policy that only provided fire insurance and cost $686 per year.

Arthur Verbit has been renting his house to handicapped tenants as an Oxford House since 1991. In April 1995, Verbit purchased a homeowners' liability insurance policy from Republic Insurance Company ("Republic") for $315 per year. After Republic sent an inspector to the house. Verbit's insurance agent called to inquire about the tenants. When Verbit explained that the house was an Oxford House, the agent stated that the house was considered a boarding house for which Verbit would have to obtain commercial insurance. Republic subsequently canceled Verbit's policy, stating that "the house is `a group home' and therefore posed an unacceptable `hazard' to the company." Compl. ¶ 33. Verbit eventually obtained fire and casualty insurance at an annual premium of $810.

B. The Organizational Plaintiffs

1. The Fair Housing Council of Greater Washington ("FHC")

The FHC is a not-for-profit corporation that exists "to promote the equal availability of housing to all persons without regard to race . . . or handicap." Compl. ¶ 9. The FHC alleges that it has had to divert scarce resources from its "usual testing, education, counseling and referral services" to its investigation of defendants' actions and its efforts to counteract them. Compl. ¶ 37, 39. Defendants' practices have frustrated the FHC's mission of identifying and eliminating discriminatory housing practices by thus "impeding [the FHC's] efforts to educate the public about discriminatory housing practices and to provide counseling and referral services to the public about housing discrimination." Compl. ¶ 39.

2. Oxford House, Inc.

Oxford House, Inc., is a not-for-profit corporation that assists recovering alcoholics and drug addicts in locating rental properties and establishing group homes. Oxford House organized the rental of plaintiff Verbit's house. Defendants' discriminatory practices have allegedly "(1) interfered with all the efforts and programs of Oxford House and its affiliates; (2) forced Oxford House and its affiliates to devote scarce resources to identity and counteract Defendants' unlawful practices; and (3) interfered with the fair housing rights of Oxford House and its affiliates." Compl. ¶ 42.


In evaluating a motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6), a court must accept the allegations in the complaint as true. See, e.g., Croixland Properties Ltd. Partnership v. Corcoran, 174 F.3d 213, 215 (D.C.Cir. 1999). All reasonable inferences must be drawn in favor of the plaintiff, and a court should only dismiss a complaint for failure to state a claim "`if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.'" Id. (quoting Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984)); see also Price v. Crestar Secs. Corp., 44 F. Supp.2d 351, 352-5 (D.D.C. 1999). A court "does not test whether the plaintiff will prevail on the merits, but instead whether the claimant has properly stated a claim." Price, 44 F. Supp.2d at 353.


A. Legal Standard

"Congress intended standing under the Fair Housing Act to extend to the full limits of Article III." Spann v. Colonial Village, Inc., 899 F.2d 24, 27 (D.C.Cir. 1990) (internal quotation marks omitted); see also Havens Realty Corp. v. Coleman, 455 U.S. 363, 372, 102 S.Ct. 1114, 71 L.Ed.2d 214 (1982). To establish standing under Article III, a plaintiff must establish the following: 1) that the plaintiff suffered an "injury in fact"; 2) that the injury is "fairly traceable to the challenged action of the defendant"; and 3) that the injury will be "redressed by a favorable decision." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992); see also Animal Legal Defense Fund, Inc. v. Glickman, 154 F.3d 426 (D.C.Cir. 1998) (en banc), cert. denied sub nom. National Ass'n for Biomedical Research v. Animal Legal Defense Fund, ___ U.S. ___, 119 S.Ct. 1454, 143 L.Ed.2d 541 (1999).

The same three-part analysis is used whether plaintiff is an individual or an organization. See Spann v. Colonial Village, Inc., 899 F.2d 24, 27 (D.C.Cir. 1990) ("An organization has standing on its own behalf if it meets the same standing test that applies to individuals."). An organization can show injury in fact by "point[ing] to a `concrete and demonstrable injury to [its] activities, not simply a setback to the organization's abstract social interests.'" Id. (quoting Havens, 455 U.S. at 379, 102 S.Ct. 1114).

B. Analysis

Defendants contend that the FHC lacks standing because it has not alleged a concrete and demonstrable injury, and that "it cannot do so because, as the Complaint so clearly implies, not a single disabled individual was denied housing or injured in any other way in this case."*fn1 Allstate Mem. Supp. Mot. Dismiss at 9. This argument is irrelevant to the question whether the FHC has standing to sue for injuries that it has suffered as an organization. An organization's standing to sue in its own right is determined by the injuries that it has suffered, not by the injuries suffered by those the organization seeks to protect. See Havens, 455 U.S. at 378-79, 102 S.Ct. 1114.

In this case, the FHC's allegations parallel those that the Supreme Court held to be sufficient to establish standing in Havens, 455 U.S. at 363, 102 S.Ct. 1114 and that the Court of Appeals for this Circuit found sufficient in Spann, 899 F.2d at 28. In Havens, the Supreme Court reasoned as follows:

Havens, 455 U.S. at 378-79, 102 S.Ct. 1114. The FHC has alleged sufficient injury to withstand a motion to ...

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