Lee et al v. Twin Hawks Airpark LLC et al

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WO
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Sharon Lee, et al.,
Plaintiffs,
v.
Twin Hawks Airpark LLC, et al.,
Defendants.
No. CV-25-00514-PHX-KML
ORDER
Plaintiffs Sharon Lee and Tommy Wessel are property owners and members of a
community administered by Twin Hawks Airpark, LLC (“Twin Hawks”). In 2022, Lee
filed a complaint against Twin Hawks with the Arizona Attorney General alleging housing
discrimination. In 2023, Twin Hawks sued plaintiffs in state court, allegedly in retaliation
for Lee’s previous complaint of housing discrimination. That suit prompted plaintiffs to
file the present suit, alleging three counts of retaliation under 42 U.S.C. §§ 1981, 1982, and
3617. Because the complaint does not state any claim for relief, it is dismissed with leave
to amend.
I. Factual Background
Twin Hawks administers a property owners’ community in Pinal County, Arizona.
(Doc. 22 at 3.) All community property owners, including plaintiffs, are also members of
Twin Hawks. (Doc. 22 at 3.) Among Twin Hawks’s duties are managing an airstrip for
property owners’ use, collecting dues from property owners, and enforcing the
community’s Covenants, Conditions, and Restrictions (“CC&Rs”). (Doc. 22 at 3.) Twin
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Hawks’s daily work is conducted by a three-person Managing Committee which is elected
annually by the property owners. (Doc. 22 at 4.) During all relevant times, defendant
Harold Duane Lambeth was on the Managing Committee and was “entrusted with the
primary day-to-day responsibilities” like communicating with owners and contracting with
outside service providers. (Doc. 22 at 5.)
Plaintiffs allege Lee was the only southeast Asian and Malaysian Twin Hawks
member from 2020 until today and although there are other non-white property owners,
Lee is the community’s only non-white full-time resident. (Doc. 22 at 5.) Between 2020
and 2022, a dispute arose between plaintiffs and “a large number of the other
member/owners of the community.” (Doc. 22 at 6.) This dispute appears to involve
easements which defendants contend run through plaintiffs’ land. (Doc. 22 at 8, 10.)
Plaintiffs disagree and have evidently obstructed the land in question. (Doc. 24 at 4.)
On June 13, 2022, Lee filed a complaint of housing discrimination against Twin
Hawks with the Arizona Attorney General’s Civil Rights Division, which she prepared
with Wessel’s help. (Doc. 22 at 6-7.) That complaint alleged Twin Hawks discriminated
against her due to race and national origin. The Managing Committee became aware of the
complaint around July 3, 2022. (Doc. 22 at 7.) Plaintiffs allege “Lambeth began speaking
with other member/owners about the need to sue” plaintiffs in mid-2022 to enforce what
he believed was the community’s prescriptive easement permitting others to pass through
plaintiffs’ property. (Doc. 22 at 8.) Twin Hawks had committed financial resources to such
litigation by December 2022, around which time Lambeth also sought approval from
enough member/owners to authorize a suit against plaintiffs. (Doc. 22 at 8-9.) Lambeth did
not convene a meeting to obtain such approval or even note which members approved;
instead, he “unilaterally determined” he had a “quorum and majority approval.” (Doc. 22
at 9.) On February 13, 2023, Twin Hawks sued plaintiffs in state court to enforce four
prescriptive easements on plaintiffs’ property. (Doc. 22 at 9-10.) In June 2023, the Arizona
Attorney General dismissed Lee’s complaint of discrimination, concluding there was not
sufficient evidence to establish a violation. (Doc. 22 at 10-11.)
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Plaintiffs allege Twin Hawks’s easement suit was filed in retaliation for Lee’s
discrimination complaint. (Doc. 22 at 10.) Plaintiffs do not explain the factual basis for
Lee’s June 2022 discrimination complaint, nor do they separately allege a discriminatory
motive on the part of either defendant. The only facts supporting retaliation arise from
Lambeth’s December 2023 deposition in the state-court easement litigation. During that
deposition, while acting as Twin Hawks’s designated representative, Lambeth stated:
[Lee] barricaded the road. She filed a harassment lawsuit,[1] which they
lost, and had to pay all of our attorney’s fees for. Then they filed a
discrimination lawsuit, which got thrown out by the State. So that’s why
we’re here.
(Doc. 22 at 10). Plaintiffs also allege that in response to an attorney stating, “we need to
not discuss prior actions,” Lambeth responded, “the prior action is why we’re here.” (Doc.
22 at 10.)
In summary, plaintiffs believe Twin Hawks filed the easement litigation because of
the discrimination complaint Lee submitted to the Arizona Attorney General. In other
words, plaintiffs are suing Twin Hawks for initiating litigation in which Twin Hawks may
prevail.2 Plaintiffs allege three retaliation claims against both defendants. The first is under
42 U.S.C. § 1981, which prohibits private acts of discrimination in connection with making
1 Plaintiffs do not explain this “harassment lawsuit” in the complaint. However, the briefing
explains plaintiffs previously filed a “state-law injunction against harassment,” which was
distinct from “the type of sex-based or race-based harassment common in federal
discrimination lawsuits.” (Docs. 26, 27.) Defendants explain plaintiffs first filed this
petition for an injunction against harassment, which they lost; next, filed the discrimination
complaint that was dismissed the following year; and finally filed the present action. (Doc.
25 at 3-4.)
2 Plaintiffs’ focus on defendants’ lawsuit may implicate the Noerr-Pennington doctrine,
which provides immunity from statutory liability for litigants who seek governmental
redress, for instance by filing a lawsuit. Sosa v. DIRECTV, Inc., 437 F.3d 923, 929 (9th
Cir. 2006) (citing E.R.R. Presidents Corp. v. Noerr Motor Freight, Inc., 365 U.S. 127, 129
(1961) and United Mine Workers of Am. v. Pennington, 381 U.S. 657 (1965)). It appears
defendants may have immunity because plaintiffs’ statutory claims are based entirely on
defendants’ lawsuit, which is protected First Amendment activity under this doctrine. See
id. But the Noerr-Pennington doctrine is an affirmative defense, Nunag-Tanedo v. E. Baton
Rouge Par. Sch. Bd., 711 F.3d 1136, 1141 (9th Cir. 2013), which is waived when not
addressed in the pleadings (as is the case here). Morrison v. Mahoney, 399 F.3d 1042, 1046
(9th Cir. 2005).
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and enforcing contracts; the second is under § 1982, which prohibits private acts of
discrimination in connection with holding personal property; and the third is under § 3617,
part of the federal Fair Housing Act (“FHA”) which prohibits retaliation in response to the
exercise of a FHA right. (Doc. 22 at 11-16.) Twin Hawks and Lambeth filed separate
motions to dismiss all claims.
II. Legal Standard
“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)
(internal citations omitted)). This is not a “probability requirement,” but a requirement that
the factual allegations show “more than a sheer possibility that a defendant has acted
unlawfully.” Id. A claim is facially plausible “when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Id. “Determining whether a complaint states a plausible claim for
relief will . . . be a context-specific task that requires the reviewing court to draw on its
judicial experience and common sense.” Id. at 679.
III. Motions to Dismiss
A. Wessel’s Retaliation Claims
All three statutes allow claims where the plaintiff suffers retaliation because he
aided or assisted a different person in the exercise of the statute’s rights. See CBOCS W.,
Inc. v. Humphries, 553 U.S. 442, 452 (2008) (§ 1981 permits claims where plaintiff
“suffers retaliation because he has tried to help a different individual”); Sullivan v. Little
Hunting Park, Inc., 396 U.S. 229, 237 (1969), abrogated on other grounds by Ziglar v.
Abbasi, 582 U.S. 120 (2017) (plaintiff has standing under § 1982 “for trying to vindicate
the rights of minorities”); Edwards v. Marin Park, Inc., 356 F.3d 1058, 1062-63 (9th Cir.
2004) (§ 3617 prohibits interference with person aiding or encouraging another person in
the exercise of FHA rights). But these claims usually involve a direct harm to that plaintiff,
like expulsion from a corporation, Sullivan, 396 U.S. at 234, receiving harassing pre-
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eviction notices, Edwards, 356 F.3d at 1060, or employment termination, CBOCS W., Inc.,
553 U.S. at 445. Here, the complaint alleges defendants targeted Wessel due to his
assistance with Lee’s complaint. But it does not include facts showing defendants even
knew Wessel had assisted Lee. Though plaintiffs argue Wessel “advocated” for Lee (Doc.
26 at 12), and that advocacy may have been public, to show defendants were motivated by
Wessel’s assistance with the complaint, plaintiffs must allege defendants were aware of
that advocacy—or, at the very least, that defendants intended to harm Lee by acting against
Wessel. See Armstrong v. WB Studio Enters., Inc., No. 24-5049, 2025 WL 3002614, at *1
(9th Cir. Oct. 27, 2025) (relevant decision-maker must be aware of protected activity); see
also Thompson v. N. Am. Stainless, LP, 562 U.S. 170, 173 (2011) (reprisals against
uninvolved significant others can constitute retaliation). They do not. Accordingly, all
claims on Wessel’s behalf are dismissed with leave to amend.
B. 42 U.S.C. §§ 1981 and 1982 claims
Plaintiffs asserting § 1981 claims “must initially identify an impaired contractual
relationship [] under which the plaintiff has rights.” Domino’s Pizza, Inc. v. McDonald,
546 U.S. 470, 476 (2006) (simplified). Similarly, § 1982 claims require plaintiffs to show
their right to hold property was impaired. 42 U.S.C. § 1982; see CBOCS W., Inc., 553 U.S.
at 447 (§§ 1981 and 1982 construed similarly). “The plaintiff must also plausibly allege
that the defendant impaired that relationship [or right] on account of intentional
discrimination” or intentional retaliation. Astre v. McQuaid, 804 F. App’x 665, 666 (9th
Cir. 2020); see also Kwesele v. King Cnty., 804 F. App’x 726, 727 (9th Cir. 2020) (plaintiff
must show defendants “acted with intent to discriminate or retaliate against him”
(quotations omitted)). Allegations of intentional retaliation may be supported by direct
evidence or specific and substantial circumstantial evidence. Kwesele, 804 F. App’x at 727-
28.
Plaintiffs have not alleged sufficient facts to plausibly establish intentional
retaliation. Showing intentional retaliation under §§ 1981 and 1982 requires a plaintiff to
“initially plead and ultimately prove that, but for race, it would not have suffered the loss
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of a legally protected right.” Comcast Corp. v. Nat’l Ass’n of Afr. Am.-Owned Media, 589
U.S. 327, 341 (2020). Racial animus or retaliation need not be “the sole reason” for an
adverse action and a defendant may have “mixed motives—i.e., legitimate and illegitimate
reasons for an alleged act.” Sharifi Takieh v. Banner Health, 515 F. Supp. 3d 1026, 1045-
46 (D. Ariz. 2021), aff’d sub nom. Takieh v. Banner Health, No. 21-15326, 2022 WL
474170 (9th Cir. Feb. 16, 2022). Still, “a complaint must contain sufficient factual matter
to show that racial prejudice [or retaliation] was a necessary condition” of the harm, which
would not have occurred without the discrimination. Id. at 1045. A complaint may be
dismissed if a “plausible alternative explanation is so convincing that [the] plaintiff’s
explanation is implausible.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).
Plaintiffs allege only two facts supporting retaliation: (1) defendants learned of
plaintiffs’ discrimination complaint in mid-2022, around when Lambeth began mobilizing
members for a lawsuit eventually filed in December 2022 (Doc. 22 at 8); and (2) Lambeth
stated in a deposition “we are here” because of plaintiffs’ prior action and obstruction of
the relevant property (Doc. 22 at 10). Temporal proximity on its own is not typically
enough to state a plausible claim of retaliation. “Even cases involving very close temporal
proximity have generally featured independent evidence of discrimination or retaliation,”
Kama v. Mayorkas, 107 F.4th 1054, 1060-61 (9th Cir. 2024) (collecting cases), and courts
do not find events three or four months apart to be sufficiently proximate. Garcia v. City
of Everett, 728 F. App’x 624, 628 (9th Cir. 2018). Here, the lawsuit was launched over six
months after defendants allegedly learned of plaintiffs’ complaint and continued after that
complaint was dismissed. (Doc. 22 at 8.) And the temporal proximity is joined only with
vague, out-of-context quotes from a deposition; even plaintiffs acknowledge Lambeth’s
statements may refer to plaintiffs’ discrimination complaint or to separate legal
proceedings. (Doc. 26 at 16.) Plaintiffs do not allege any discriminatory or racial statements
or views were shared between Lambeth and the Twin Hawks members, nor do they allege
any circumstantial evidence similarly-situated white members were or would have been
treated differently than plaintiffs.
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This is not enough to plausibly allege Twin Hawks’s lawsuit would not have
occurred without intentional race-based retaliation, particularly in the face of a convincing
alternative nonretaliatory explanation plaintiffs themselves offer. Starr, 652 F.3d at 1216.
Plaintiffs allege a dispute arose between them and “a large number of other
member/owners” which was unrelated to race or discrimination: the broader Twin Hawks
community contested the existence of easements on plaintiffs’ land. (Doc. 22 at 6, 10; see
Doc. 24 at 4.) After years of escalating disagreements, Twin Hawks’s Managing
Committee reached a quorum of members to take legal action against plaintiffs and began
litigation to enforce the easements. (Doc. 22 at 8.) This nonretaliatory reason for the lawsuit
is supported by deposition testimony (Doc. 22 at 10 (“[s]he barricaded the road”)), by the
fact that the suit continued after plaintiffs’ complaint of discrimination was dismissed (Doc.
22 at 10-11), and by the allegations that a “large number” of member/owners believed there
were easements on plaintiffs’ property (Doc. 22 at 6, 10). Courts have dismissed claims
based on these types of alternative explanations even where plaintiffs pleaded
discrimination in far more detail than here. Sharifi Takieh, 515 F. Supp. 3d at 1048
(nondiscriminatory alternative explanation convincing compared to allegations of
discriminatory remarks and hospital policy); Astre, 804 F. App’x at 667 (§ 1981 claims
“implausible” where plaintiff alleged termination due to sufficiently-pleaded
discrimination but also suggested termination due to loss of community support).
The complaint itself convincingly alleges Twin Hawks’s lawsuit would have
occurred regardless of plaintiffs’ protected activity. The §§ 1981 and 1982 causes of action
are therefore dismissed with leave to amend.
C. Fair Housing Act claims
The FHA protects against discrimination in housing and prohibits retaliation against
an individual who has “exercised or enjoyed . . . any right granted or protected” by the
statute. 42 U.S.C. § 3617; see also Edwards, 356 F.3d at 1062-63 (9th Cir. 2004). Section
3617 plaintiffs must show a defendant’s actions affected their exercise of an FHA right.
Morris v. W. Hayden Ests. First Addition Homeowners Ass’n, Inc., 104 F.4th 1128, 1143
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(9th Cir. 2024), cert. denied, 145 S. Ct. 1127 (2025). Claims for retaliation and interference
under the FHA require plaintiffs allege “(1) [they were] engaged in protected activity; (2)
[they] suffered an adverse action; and (3) there was a causal link between the two.” Ohio
House, LLC v. City of Costa Mesa, 135 F.4th 645, 670 (9th Cir. 2025) (simplified); see
City of Oakland v. Wells Fargo & Co., 14 F.4th 1030, 1035, 1042 (9th Cir. 2021) (FHA
claims must meet proximate cause standard which requires “some direct relation” between
harm and conduct).
The first element is satisfied by plaintiffs’ allegation Lee submitted a complaint of
discrimination to the Arizona Attorney General. (Doc. 22 at 7.) But the adverse action is
not clearly alleged because plaintiffs have not pleaded facts suggesting their right to be free
from racial discrimination was affected at all, or that any interference took place beyond a
lawsuit contemplated by the CC&Rs (Doc. 26 at 8 (conceding the CC&Rs allow “a
homeowners’ association to enforce a perceived violation against one of its members”)).
Cf. Morris, 104 F.4th at 1142 (enforcing § 3617 due to disparate treatment which did not
follow CC&R procedures and affected plaintiffs’ use of property). And plaintiffs do not
even meet the lower causation standard for FHA claims for the same reasons they do not
meet the “but-for” causation standard for §§ 1981 and 1982 claims.
This claim is dismissed with leave to amend.
D. Motion for Sanctions
Twin Hawks also filed a motion for sanctions arguing the first amended complaint
lacked a factual and legal basis. Fed. R. Civ. P. 11(b) requires attorneys to conduct a
reasonable inquiry into prospective lawsuits and determine legally-tenable claims exist
before filing. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 393 (1990). “In analyzing
whether a complaint is sanctionable under Rule 11, [the court] employ[s] an objective
standard of reasonableness and [does] not consider the attorney’s subjective good faith.”
Lake v. Gates, 130 F.4th 1064, 1068 (9th Cir. 2025).
Twin Hawks contends the first amended complaint is sanctionable because it is
frivolous and no competent attorney, having made a reasonable inquiry into the facts, could
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have reasonably believed retaliation took place. (Doc. 30 at 2-4, 11.) Plaintiffs’ counsel
contests this, arguing he “conducted an adequate pre-filing inquiry.” (Doc. 32 at 1.)
Examining the record, a competent attorney could have believed it permissible to excerpt
facts most relevant to the claims alleged here and interpreted some deposition testimony as
hinting that protected activity played a role in the state lawsuit against plaintiffs. After all,
as Twin Hawks concedes, “[i]t is completely unclear from [Lambeth’s quotes] what Mr.
Lambeth was referring to with the statements ‘why we’re here.’” (Doc. 30 at 5.)
Accordingly, Twin Hawks have not sufficiently shown Mr. Gattone failed to make a
reasonable inquiry into the facts.
As is true in the cases cited by Twin Hawks (Doc. 30 at 3), factual errors and shoddy
inquiries which result in sanctions are typically egregious and undermine the litigant’s
entire case. See Greenberg v. Sala, 822 F.2d 882, 887 (9th Cir. 1987) (collecting cases
where litigant error or prior admission contradicted dispositive facts); see also Townsend
v. Holman Consulting Corp., 929 F.2d 1358, 1367 (9th Cir. 1990) (motion frivolous where
“competent reading of our rules and precedent would very quickly have made” procedural
issues clear). Ultimately, “a complaint based on reasonable inquiry should not be found to
be factually frivolous unless some clear authority or a litigant’s own clear admission erases
the factual underpinning from some essential element of the litigant’s pleading.”
Greenberg, 822 F.2d at 887. Twin Hawks has not met that standard here. Accordingly, the
motion is denied. Attorneys’ fees to the prevailing party are also denied.
E. Conclusion
Plaintiffs did not allege facts supporting a plausible claim of retaliation and all three
of their claims are dismissed with leave to amend. The complaint does not rise to the level
of frivolity required for sanctions and the motion for sanctions is denied. If plaintiffs choose
to amend, they should clearly state which actions may be imputed to Lambeth or Twin
Hawks LLC and why Lambeth may be liable as an individual defendant.
/
/
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Accordingly,
IT IS ORDERED defendants’ motions to dismiss (Docs. 24, 25) are GRANTED
WITH LEAVE TO AMEND. No later than February 11, 2026, plaintiffs shall file an
amended complaint. The Clerk of Court is directed to enter a judgment of dismissal with
prejudice if no amended complaint is filed by that date.
IT IS FURTHER ORDERED defendants’ motion for sanctions (Doc. 30) is
DENIED.
Dated this 26th day of January, 2026.
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