UNITED STATES OF AMERICA,
     Plaintiff,

CV-N-95-00784-ECR (BASE)

v.

CV-N-00370-ECR

PINEWOOD ASSOCIATES, LTD.,
BIRCH ASSOCIATES, LTD.,
LINDEN HOUSING ASSOCIATES, LTD.,
WILLOW CREEK HOUSING ASSOCIATES,
LTD., SUTRO ASSOCIATES,
FRANKLIN CHURCHILL ASSOCIATES,
SHELTER PROPERTIES, INC.,
MANAGE, INC., NEWLANDS REALTY,
INC., ROBERT NIELSEN, MITCH DUGAN,
SHERMAN CLARK, LEE BURKE,
DENNIS JOHNSON, and
J. MICHAEL QUEENAN,
     Defendants.

_______________________________________

The United States alleges:

1. This action is brought by the United States to enforce the provisions of the Fair Housing Act, Title VIII of the Civil Rights Act of 1968, as amended by the Fair Housing Amendments Act of 1988, 42 U.S.C. § 3601 et seq.

2. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1345, 42 U.S.C. § 3612(o), and 42 U.S.C. § 3614(a).

3. Venue is proper in that the claims alleged herein arose in Washoe County and Churchill County, Nevada.

4. Defendant Robert Nielsen owns and/or manages Pinewood Terrace Apartments, Reno Apartments, Linden Apartments, Willow Creek Apartments, Sutro Apartments and Churchill Village Apartments through Shelter Properties, Inc., Manage, Inc., Newlands Realty, Inc., Pinewood Associates, Ltd., Birch Associates Limited Partnership, Linden Housing Associates, Ltd., Willow Creek Associates, Ltd., and Franklin Churchill Associates.

5. Defendant Shelter Properties, Inc. is a Nevada corporation with its principal place of business at 380 Linden Street, Reno, Nevada. Robert Nielsen is the president of Shelter Properties, Inc. and owns 100 percent of the common stock. Shelter Properties, Inc. is a general partner of Pinewood Associates, Ltd. and has an ownership interest in Pinewood Terrace Apartments.

6. Defendant Manage, Inc. is a Nevada corporation with its principal place of business at 380 Linden Street, Reno, Nevada. Robert Nielsen is the president of Manage, Inc., which is wholly owned by Shelter Properties, Inc. Manage, Inc. is the managing agent for Pinewood Terrace Apartments, Reno Apartments, Linden Apartments, Willow Creek Apartments, Sutro Apartments and Churchill Village Apartments.

7. Defendant Newlands Realty, Inc. is a Nevada corporation with its principal place of business at 380 Linden Street, Reno, Nevada. Robert Nielsen owns approximately 49 percent of Newlands Realty, Inc. Newlands Realty, Inc. is involved in the operation of Pinewood Terrace Apartments, Reno Apartments, Linden Apartments and Willow Creek Apartments.

8. Defendant Pinewood Associates, Ltd. is a Nevada limited partnership with its principal place of business at 380 Linden Street, Reno, Nevada. The general partners of Pinewood Associates, Ltd. are Robert Nielsen and Shelter Properties, Inc. Pinewood Associates, Ltd. owns and operates Pinewood Terrace Apartments, a 49-unit, federally-subsidized apartment complex located at 1425-1485 Evelyn Way and 1500-1550 Riley Avenue in Reno, Nevada.

9. Defendant Birch Associates Limited Partnership d/b/a Reno Apartments I-IV is a Nevada limited partnership with its principal place of business at 380 Linden Street, Reno, Nevada. The general partners of Birch Associates Limited Partnership are Robert Nielsen and Dennis Johnson. Birch Associates Limited Partnership owns and operates Reno Apartments I - IV, a 149-unit, federally-subsidized apartment complex located at 2300 Wedekind Road (80 units), 2181-2187 & 2280-2430 Patton Court (50 units), and 1450-1452 Riley Avenue (9 units) in Reno, Nevada.

10. Defendant Linden Housing Associates, Ltd. d/b/a Linden Apartments is a Nevada limited partnership with its principal place of business at 380 Linden Street, Reno, Nevada. The general partners of Linden Housing Associates, Ltd. are Robert Nielsen, Dennis Johnson and J. Michael Queenan. Linden Housing Associates, Ltd. owns and operates Linden Apartments, a 40-unit, federally-subsidized apartment complex located at 400 Linden Street (10 units), 406 Linden Street (10 units), 408 Linden Street (10 units), and 410 Linden Street (10 units) in Reno, Nevada.

11. Defendant Willow Creek Housing Associates, Ltd. d/b/a Willow Creek Apartments is a Nevada limited partnership with its principal place of business at 380 Linden Street, Reno, Nevada. The general partners of Willow Creek Housing Associates, Ltd. are Robert Nielsen, Dennis Johnson and J. Michael Queenan. Willow Creek Housing Associates, Ltd. owns and operates Willow Creek Apartments, a 26-unit, federally-subsidized apartment complex located at 402 Linden Street (13 units) and 404 Linden Street (13 units) in Reno, Nevada.

12. Defendant Sutro Associates is a Nevada limited partnership with its principal place of business at 380 Linden Street, Reno, Nevada. Robert Nielsen is a general partner of Sutro Associates. Sutro Associates owns and operates Sutro Apartments, a 32-unit apartment complex located at 2400 Sutro (8 units), 2410 Sutro (8 units), 2420 Sutro (8 units), and 2450 Sutro (8 units) in Reno, Nevada.

13. Defendant Franklin Churchill Associates is a Nevada limited partnership with its principal place of business at 380 Linden Street, Reno, Nevada. The general partner of Franklin Churchill Associates is Robert Nielsen. Franklin Churchill Associates owns and operates Churchill Village Apartments, a 100-unit, federally-subsidized apartment complex located at 650 N. Maine Street in Fallon, Nevada.

14. Defendant Dennis Johnson is a general partner in Defendants Birch Associates Limited Partnership, Linden Housing Associates, Ltd. and Willow Creek Associates, Ltd. Dennis Johnson also owns approximately 50 percent of Newlands, Realty, Inc.

15. Defendant J. Michael Queenan is a general partner in Defendants Linden Housing Associates, Ltd. and Willow Creek Associates, Ltd.

16. On information and belief, Defendant Lee Burke was an agent and employee of Defendants Robert Nielsen, Shelter Properties, Inc., Manage, Inc., Newlands Realty, Inc., Pinewood Associates, Ltd., Birch Associates, Ltd., Linden Housing Associates, Ltd., Willow Creek Housing Associates, Ltd., Sutro Associates and Franklin Churchill Associates at various times from approximately July 1988 to April 1995. During that time, she held various positions, including management supervisor for Pinewood Terrace Apartments, Reno Apartments, Linden Apartments, Willow Creek Apartments, Sutro Apartments and Churchill Village Apartments, and manager for Pinewood Terrace Apartments, Reno Apartments, and Sutro Apartments.

17. On information and belief, Defendant Mitch Dugan was an agent and employee of Defendants Robert Nielsen, Shelter Properties, Inc., Manage, Inc., Newlands Realty, Inc., Pinewood Associates, Ltd., Birch Associates, Ltd., Linden Housing Associates, Ltd., Willow Creek Housing Associates, Ltd., and Sutro Associates at various times from approximately from 1983 to 1994. Mr. Dugan was the manager for Pinewood Terrace Apartments and Reno Apartments-Riley Avenue from October 1990 to July 1993 and the assistant manager for Reno Apartments and Sutro Apartments from November 1993 to November 1994.

18. On information and belief, Defendant Sherman Clark was an agent and employee of Defendants Robert Nielsen, Shelter Properties, Inc., Manage, Inc., Newlands Realty, Inc., Pinewood Associates, Ltd., Birch Associates, Ltd., and Franklin Churchill Associates at various times from approximately 1983 to the present. Mr. Clark held various positions at Pinewood Terrace Apartments from 1983 to 1994, including maintenance person, assistant property manager, and acting manager. Since approximately September 1994, Mr. Clark has worked as a maintenance man at Churchill Village Apartments.

19. Plaintiff realleges and herein incorporates by reference the allegations set forth in paragraphs 1 through 18 above.

20. Pinewood Terrace Apartments, described in paragraph 8 above, and each unit therein, is a dwelling within the meaning of 42 U.S.C. § 3602(b).

21. Jacquelyn She Badhorse and her minor children, Sierra Badhorse-Foxx and Terraine Badhorse-Foxx, whose father is African-American, have resided at Pinewood Terrace Apartments (1455 Evelyn Way) in Reno, Nevada, 89502 from January 15, 1992 to the present.

22. On or about June 6, 1994, Jacqueline She Badhorse filed a housing discrimination complaint with the United States Department of Housing and Urban Development ("HUD"). The complaint was filed pursuant to § 810(a) of the Fair Housing Act, ("the Act") as amended, 42 U.S.C. § 3610(a). In her complaint, Ms. Badhorse alleged that she was being discriminated against because of her familial status.

23. Pursuant to the requirements of 42 U.S.C. §§ 3610(a) and (b) of the Act, the Secretary of HUD ("Secretary") conducted an investigation of the complaint, attempted conciliation without success, and prepared a final investigative report. Based on the information gathered in that investigation, the Secretary, pursuant to 42 U.S.C. § 3610(g)(1), determined that reasonable cause exists to believe that discriminatory housing practices on the basis of familial status occurred. Therefore, on November 9, 1995, the Secretary issued a Determination of Reasonable Cause and Charge of Discrimination with respect to the complaint, pursuant to 42 U.S.C. § 3610(g)(2)(A), charging that Robert Nielsen, Pinewood Associates, Ltd., Mitch Dugan and Sherman Clark engaged in discriminatory housing practices on the basis of familial status in violation of section 804 of the Fair Housing Act.

24. On or about November 21, 1995, Defendants Robert Nielsen and Pinewood Associates, Ltd. elected to have the charges resolved in a federal civil action pursuant to 42 U.S.C. § 3612(a).

25. On or about November 22, 1995, the Secretary authorized the Attorney General to commence a civil action on behalf of Ms. Badhorse, pursuant to 42 U.S.C. § 3612(o).

26. Defendants have printed, published, implemented and unreasonably enforced restrictive rules and regulations at Pinewood Terrace Apartments that discriminate on the basis of familial status. On or about June 6, 1994, and on numerous occasions prior to that date, Ms. Badhorse had been "written up" and threatened with eviction for alleged violations of the rules and regulations related to the conduct of her minor children.

27. Ms. Badhorse and her minor children have been victims of Defendants' discriminatory practices and are aggrieved persons as defined in 42 U.S.C. § 3602(i). They have suffered damages as a result of the Defendants' conduct as described herein.

28. Defendants' discriminatory conduct was intentional, willful, and taken in reckless disregard of the rights of Ms. Badhorse and her minor children.

29. Plaintiff realleges and herein incorporates by reference the allegations set forth in paragraphs 1 through 18 above.

30. The apartment complexes described in paragraphs 8 through 13 above, and each unit therein, are dwellings within the meaning of 42 U.S.C. § 3602(b).

31. On information and belief, Defendants have taken actions and made statements that demonstrate a policy of discrimination on the basis of race or color in the rental of units and in the terms and conditions of rentals at Pinewood Terrace Apartments, Reno Apartments, Linden Apartments, Willow Creek Apartments, Sutro Apartments and Churchill Village Apartments, and other properties managed by Defendants Robert Nielsen and Manage, Inc. Defendants, their agents and employees have denied available rental units to qualified minority applicants, delayed renting units to minority applicants, engaged in racial steering, treated minority tenants less favorably than white tenants, and used racist epithets.

32. On information and belief, Defendants have printed, published, implemented and unreasonably enforced restrictive rules and regulations that demonstrate a policy of discrimination against families with children in the terms and conditions of rentals at Pinewood Terrace Apartments, Reno Apartments, Linden Apartments, Willow Creek Apartments, Sutro Apartments and Churchill Village Apartments, and other properties managed by Defendants Robert Nielsen and Manage, Inc. Defendants, their agents and employees have harassed tenant families by yelling obscenities at young children and threatening parents with eviction for minor infractions of rules that impose unreasonable and facially discriminatory restrictions on families with children. Defendants, their agents and employees strictly enforced a 9 p.m. summertime curfew on children by shining flashlights at parents who were sitting outside with their children and ordering them to take their children inside, even though few, if any, units have air-conditioning. In addition, Defendants, their agents and employees endangered young children by requiring them to ride their tricycles only in parking lots with automobile traffic.

33. By the conduct set forth in paragraphs 29, 31, and 32 above, Defendants have discriminated against persons on the basis of race or color and familial status in the rental of dwellings in violation of Sections 804 (a), (b) and (c) of the Fair Housing Act.

34. The conduct of the Defendants described in paragraphs 29, 31, and 32 above constitutes:
    1. A pattern or practice of resistance to the full enjoyment of rights secured by Title VIII of the Civil Rights Act of 1968, as amended, 42 U.S.C. § 3601 et seq.; and

    2. A denial to a group of persons of rights granted by Title VIII of the Civil Rights Act of 1968, as amended, 42 U.S.C. § 3601 et seq., which denial raises an issue of general public importance.

35. Individuals who have been victims of Defendants' discriminatory statements and practices are aggrieved persons as defined in 42 U.S.C. § 3602(i). These victims may have suffered actual injury and damages as a result of Defendants' discriminatory conduct.

36. Defendants' discriminatory conduct was intentional, willful, and taken in reckless disregard of the rights of the victims of discrimination.

WHEREFORE, the United States prays that the Court enter an order that:

1. Declares that the discriminatory housing practices of the Defendants, as set forth above, violate the Fair Housing Act, as amended, 42 U.S.C. §§ 3601 et seq.;

2. Enjoins the defendants, their agents, employees, and successors, and all other persons in active concert or participation with any of them from discriminating on the basis of race or color and familial status against any person in any aspect of the lease or rental of a dwelling;

3. Awards such actual damages as would fully compensate Ms. Badhorse and her minor children for injuries caused by the Defendants' discriminatory conduct, pursuant to 42 U.S.C. §§ 3612(o)(3) and 3613(c)(1);

4. Awards punitive damages to Ms. Badhorse and her minor children, pursuant to 42 U.S.C. §§ 3612(o)(3) and 3613(c)(1);

5. Awards such actual damages as would fully compensate each identifiable victim of Defendants' discriminatory housing practices for the injury suffered as a result of these discriminatory practices, pursuant to 42 U.S.C. § 3614(d)(1)(B);

6. Awards punitive damages to each identifiable victim of Defendants' discriminatory housing practices, pursuant to 42 U.S.C. § 3614(d)(1)(B); and

7. Assess civil penalties against Defendants in order to vindicate the public interest, pursuant to 42 U.S.C. §3614(d)(1)(C).

The United States further prays for such additional relief as the interests of justice require.

Respectfully submitted,

Janet Reno
Attorney General

ISABELLE KATZ PINZLER
Acting Asst. Attorney General

JOAN A. MAGAGNA
Acting chief, Housing & Civil Enforcement Section

BARBARA KAMMERMAN
LARS T. WALDORF
Attorneys
U.S. Department of Justice
Civil Rights Division
Housing & Civil Enforcement Section
P.O. Box 65998
Washington, DC 20035-5998
(202) 307-3802

KATHRYN E. LANDRETH
United States Attorney

JAMES S. SAVETT
Assistant United States Attorney
701 E. Bridger Avenue, Suite 800
Las Vegas, NV 89101
(702) 388-6336