DOE v. STERLING (2025)

Proceedings: (In Chambers) ORDER RE: JOINT BRIEFING ON JURY INSTRUCTION AND OTHER ISSUES [195]

Currently pending before the Court is Plaintiff Preeti Doe (“Plaintiff”) and Defendants Rochelle Sterling in her capacity as sole trustee of the Sterling Family Trust, The Sterling Family Trust, and Beverly Hills Properties, LLC's (collectively, “BHP Defendants”) Joint Briefing on Jury Instruction and Other Issues. Dkt. No. 195 (“Joint Br.”). The Court refers to the numbering of issues provided by the parties but addresses related issues together.¹

I. Issues 1 and 3: Faragher/Ellerth defenses

The Court will not instruct the jury with BHP Defendants’ Proposed Disputed Instructions Nos. 28 and 29 on the defenses of “avoidable consequences” and “failure to utilize preventive or corrective opportunities.”² See Dkt. No. 160 at 102-106. These affirmative defenses were not pled in BHP Defendants’ Answer. See Dkt. No. 8. The Court is not persuaded that other affirmative defenses pled in the Answer provided sufficient notice of these two defenses. The affirmative defenses pled in the Answer do not refer to avoidable consequences or any failure to utilize preventive or corrective opportunities. The Court finds that Plaintiff would suffer prejudice if the affirmative defenses were allowed. It is not clear that these defenses to claims for employment discrimination can be asserted in the housing context.³ Plaintiff lost the opportunity to move to dismiss or for summary judgment on these affirmative defenses because BHP Defendants did not plead the defenses in their Answer. Additionally, at the December 15, 2025 hearing, Plaintiff articulated that she would have conducted discovery differently and that she would have made different arguments regarding waiver of attorney-client privilege and work product of investigation-related documents had these affirmative defenses been pled.

Because the Court will not instruct the jury on these two affirmative defenses, the Court will not address Plaintiff's arguments that BHP Defendants’ assertion of these has waived attorney-client privilege or work product protection over investigation-related documents. The Court's prior rulings regarding privilege and work product protection remain in place.

II. Issue 4: Discrimination claims

The Court rejects BHP Defendants’ argument that any reference to discrimination or discriminatory practices would be misleading or confusing for the jury. “Federal courts have recognized that sexual harassment is a form of sex discrimination that is prohibited by, and actionable under, the FHA.” Salisbury v. Hickman, 974 F. Supp. 2d 1282, 1290 (E.D. Cal. 2013) (citing Quigley v. Winter, 598 F.3d 938, 946 (8th Cir. 2010); DiCenso v. Cisneros, 96 F.3d 1004, 1008 (7th Cir. 1996); Honce v. Vigil, 1 F.3d 1085, 1089-90 (10th Cir. 1993); Shellhammer v. Lewallen, 770 F.2d 167 (6th Cir. 1985)); see also Beliveau v. Caras, 873 F. Supp. 1393, 1397 (C.D. Cal. 1995) (“[I]t is beyond question that sexual harassment is a form of discrimination.”). It is unclear how a jury can be misled by this well established and accurate statement of law.

The Court also finds it appropriate to instruct the jury on the discriminatory housing practices set forth in the operative pleading. Plaintiff's Complaint clearly alleges three discriminatory housing practices: quid pro quo harassment, hostile environment harassment, and discriminatory statements. Compl. ¶ 86. The Complaint also cites to the associated statute and/or regulation. Id. A dispute over jury instructions is not the proper time for a defendant to attempt to dismiss a clearly pled theory of liability. To the extent BHP Defendants sought to dismiss a claim under the FHA for discriminatory statements for insufficient allegations or evidence, BHP Defendants should have brought a motion to dismiss or moved for summary judgment on these grounds. At this stage of the proceedings, the focus should be on the proper way to instruct and query the jury on the remaining claims.

III. Issues 5 and 6: Aided-by-agency theory of vicarious liability

First, to the extent BHP Defendants argue that the facts do not support the aided-by-agency theory, see Joint Br. at 31 (“The underpinnings for this theory are simply absent.”), that is a question for the jury. Moreover, the numerous cases cited by the parties support that the aided-by-agency theory is often applied to claims brought under the FHA. See id. at 25-31.

Second, the Court is not persuaded that an element of the aided-by-agency theory is that “authority of a manager must be such that the manager can leverage authority and power to change the effects of the tenancy.” Joint Br. at 28. None of the cases cited by BHP Defendants include this as an element or requirement. Moreover, the agent need not be a manager. For example, in Been v. Palais Villa, No.: SACV 21-01532-CJC (KESx), 2021 WL 8895168 (C.D. Cal. Nov. 31, 2021), the alleged harasser was a maintenance worker at the apartment complex where the plaintiff lived. Id. at *3. The court found that it was reasonable to infer that the alleged harasser's conduct was aided by his agency or employment relationship with the landlord defendants because his employment as a maintenance worker gave him access to female tenants. Id. Similarly, the plaintiff in Trujillo v. Amity Plaza, LLC, 714 F. Supp. 3d 1302, 1311 (D. Colo. 2024), alleged that a maintenance worker sexually harassed and assaulted her. Id. at 1306-07. The court found that the plaintiff sufficiently alleged vicarious liability because the complaint alleged that the maintenance worker's position gave him unfettered access to the plaintiff. Id. at 1311.

Although many cases do involve managers, the relevant question is whether the agency relationship facilitated the unlawful conduct, not the level of authority the manager held. In Boswell v. Gumbaytay, No. 2:07-cv-135-WKW, 2009 WL 1515872 (M.D. Ala. June 1, 2009), the court found a basis for vicarious liability for FHA violations because the property manager's acts were “committed in his capacity as the property manager” and “that it was the agency relationship that facilitated” the conduct at issue. Id. at *5. This included his position giving him control as to the amount of rent collected and whether repairs would be made, and unfettered access to communicate with and personally visit the plaintiff. Id. In Glover v. Jones, 522 F. Supp. 2d 496 (W.D.N.Y. 2007), the court found triable issues of fact on vicarious liability under the FHA because the plaintiff alleged that the harasser used his position as de facto landlord, which gave him the opportunity to visit her apartment and control her rent, to perpetrate FHA violations against her. Id. at 507. In West v. DJ Mortgage, LLC, 271 F. Supp. 3d 1336 (N.D. Ga. 2017), the court denied summary judgment because sufficient evidence existed for a reasonable jury to conclude that the alleged harasser “used his power as property manager as a vehicle through which to perpetrate his unlawful conduct.” Id. at 1356. Moreover, the court rejected the defendant's argument that a Title VII negligence standard should apply such that the plaintiff would have to establish that the landlord knew or should have known of the harassment and failed to take prompt and appropriate corrective action. Id. at 1357. And in Metropolitan Fair Housing Council of Oklahoma, Inc. v. Pelfrey, 292 F. Supp. 3d 1250 (W.D. Okla. 2017), the court found that because the owner relied on the alleged harasser to manage the properties, the sexual harassment against the three tenant plaintiffs would have been aided and abetted by the agency relationship that necessarily existed to manage the properties. Id. at 1253-54.⁴

In sum, the caselaw does not support BHP Defendants’ position that aided-by-agency vicarious liability requires a certain level of authority of the agent over the plaintiff.

Finally, BHP Defendants appear to argue that knowledge is somehow relevant to this theory. See Joint Br. at 31 (“Present in all of these cases is evidence that would be sufficient to support that either the landlord/employer knew of the conduct or the manager was able to leverage his authority to effect change in the tenancy ․ and power for sexual favors.”). HUD regulations explain that “[a] person is vicariously liable for a discriminatory housing practice by the person's agent or employee, regardless of whether the person knew or should have known of the conduct that resulted in a discriminatory housing practice, consistent with agency law.” C.F.R. 24 § 100.7(b). BHP Defendants do not point to any caselaw rejecting this interpretation by HUD and requiring knowledge as an element of vicarious liability under the aided-by-agency theory.

As to whether the aided-by-agency theory applies to FEHA claims, BHP Defendants do not provide any caselaw in the housing context. The Court finds that citation to employment cases is not helpful because employment claims under the FEHA are treated differently from housing claims with respect to vicarious liability. In the employment context, the “FEHA imposes a negligence standard of liability on employers for acts of discrimination committed by an employee who is not an agent or supervisor and a strict liability standard for acts of discrimination committed by an employee who is an agent or a supervisor.” Yeager v. Corr. Corp. Am., 944 F. Supp. 2d 913, 931 (E.D. Cal. 2013) (citing State Dept. of Health Servs., 31 Cal. 4th at 1041-42, 6 Cal.Rptr.3d 441, 79 P.3d 556). In the housing context, “California courts rely on federal housing discrimination law to interpret analogous provisions of FEHA,” and “violations of the The Fair Housing Act will also constitute violations of the parallel provisions of FEHA.” Pack v. Fort Washington II, 689 F. Supp. 2d 1237, 1248 (E.D. Cal. 2009) (citing Alameda v. Fair Employment & Housing Comm'n, 153 Cal. App. 3d 499, 504, 200 Cal.Rptr. 381 (1984)). Therefore, absent caselaw supporting that the aided-by-agency theory does not apply to FEHA claims brought in the housing context, the Court will not make a distinction between the FHA and FEHA claims with respect to this theory of liability.

IV. Issue 7: Agency instructions relevant to strict liability

BHP Defendants argue that their proposed instructions are necessary to establish strict liability on the claims of assault and battery. Joint Brief at 37. However, Plaintiff states that she “is not trying to hold the Sterling Defendants vicariously liable for Defendant Shin's assault and battery at all.” Id. at 35.

The Court notes that Plaintiff's Complaint brings assault and battery claims “against all defendants.” Compl. at 13. However, Plaintiff's proposed jury verdict form appears consistent with her position that she is not seeking liability against BHP Defendants for assault or battery. See Dkt. No. 161 at 3, 4. The Court therefore directs the parties to meet and confer on the apparent agreement by Plaintiff to dismiss her claims against BHP Defendants for assault and battery. The parties may stipulate to dismissal of these claims or may reflect the dismissal in the proposed pretrial conference order.

Because strict liability is no longer at issue for the assault and battery claims, it appears that BHP Defendants’ proposed instructions are not necessary. However, the Court observes that Plaintiff's verdict form proposes a single question for compensatory damages. It is unclear how the Court and parties could determine what portion of damages should be attributed to Shin only on the assault or battery claims if the jury finds him liable on those claims in addition to finding Shin and the BHP Defendants liable on other claims. The parties are directed to meet and confer on this issue.

V. Issue 8: Whether separate instructions are needed for FHA and FEHA claims

The parties dispute whether the Court must instruct the jury separately on FHA and FEHA claims. Claims brought under both the FHA and the FEHA are analyzed under the same standard, and the FEHA “largely mirrors its federal counterpart.” Ohio House, LLC v. City of Costa Mesa, 135 F.4th 645, 661 (9th Cir. 2025) (noting that FEHA guarantees no fewer rights or remedies than the FHA). Plaintiff cites to numerous cases that stand for this proposition, whereas BHP Defendants do not cite to any cases that disagree. It appears to the Court that so long as the instructions provide the elements for liability under the FHA, any finding of liability according to those elements would also establish liability under the FEHA. BHP Defendants have not pointed to any caselaw that would suggest otherwise. Additionally, in reviewing BHP Defendants’ proposed instructions for quid pro quo harassment under the FEHA and the FHA, the Court does not see any significant difference that would necessitate separate instructions or verdict form questions on liability.

The Court does not agree with BHP Defendants’ characterization that Plaintiff is “conflating two distinct claims in order to gain a ‘toehold’ for federal jurisdiction of a dispute that is predominantly governed by state law.” See Dkt. No. 160 at 16. Plaintiff's Complaint clearly sets forth a basis for a federal claim under the FHA, and cites to federal statute, regulation, and caselaw. See Compl. ¶¶ 85-88. The Court does not see any attempt by Plaintiff to seek liability under the FHA by proving elements under the FEHA.

As to Defendants’ argument regarding differences in admissibility of the audio recording for federal claims and state claims, the Court has already ruled that the audio recording will not be excluded based on California Penal Code section 632. Defendants provide no legal support for their suggestion that the audio recording cannot be considered for the state law claims in this case brought in federal court based on federal question jurisdiction. See Asia Economic Institute v. Xcentric Ventures, LLC, No. CV 10-1360 SVW (PJWx), 2010 WL 4977054, at *11-12 (C.D. Cal. July 19, 2010) (finding recordings may be admitted without regard to California Penal Code section 632 in a case brought under both federal and state law).⁵

Finally, the parties agree that different standards apply for punitive damages under the FHA and the FEHA. As suggested by Plaintiff, this difference can be addressed through separate instructions and questions for the two standards for punitive damages.

VI. Conclusion

The parties are ordered to meet and confer on their disputed instructions and verdict forms in light of the above and prior rulings. The parties may reserve their objections to this order for purposes of any appeal but shall meet and confer in good faith to agree on jury instructions and a verdict form consistent with this order. These rulings are not meant to approve specific language for any specific instruction. The Court expects the parties to resolve or significantly narrow their disputes over wording in light of these rulings. The parties are also directed to the Court's observations made during the November 10, 2025 hearing. See Dkt. Nos. 188, 192.

The deadline for the parties to submit updated sets of jury instructions and verdict forms remains January 5, 2026. To the extent a party objects to wording proposed by another party, the party must provide its own proposed language. In addition to filing the updated sets, the parties shall email Word versions to the Court at RAO_Chambers@cacd.uscourts.gov. The jury instructions and verdict form conference remains on calendar for January 12, 2026 at 10 a.m. by Zoom.

IT IS SO ORDERED.

FOOTNOTES

1.   The Court addressed Issue 2 during the December 15, 2025 hearing as part of a follow-up discussion to BHP Defendants’ Motion in Limine 10. See Dkt. No. 197 at 3.

2.   BHP Defendants’ proposed instruction regarding failure to utilize preventive or corrective opportunities is based on Burlington Industries Inc. v. Ellerth, 524 U.S. 742, 118 S.Ct. 2257, 141 L.Ed.2d 633 (1998), and Faragher v. City of Boca Raton, 524 U.S. 775, 118 S.Ct. 2275, 141 L.Ed.2d 662 (1998). In these two cases, “[t]he Supreme Court set forth the principles governing employer liability for supervisorial harassment of employees” in Title VII cases. Holly D. v. Cal. Inst. Tech., 339 F.3d 1158, 1166 (9th Cir. 2003). Courts refer to the affirmative defense as the Faragher/Ellerth defense. See id. In State Department of Health Services v. Superior Court, 31 Cal. 4th 1026, 6 Cal.Rptr.3d 441, 79 P.3d 556 (2003), the California Supreme Court found that the basic elements of the Faragher/Ellerth defense exist under California law for hostile environment sexual harassment suits against an employer under the doctrine of avoidable consequences, but only as a defense affecting damages and not liability. Id. at 1044-46, 6 Cal.Rptr.3d 441, 79 P.3d 556.

3.   See Order Re: Motion for Summary Judgment at 12, Dkt. No. 135; Sharon v. New Directions Inc., No. 2:15-cv-4239, 2016 WL 158223, at *4-5 (C.D. Cal. Jan. 12, 2016) (noting sporadic applicability by federal courts in the FHA context and highlighting differences in Title VII and FHA enforcement mechanisms); Lacour v. A&M Property Investment, LLC, No. CIV-23-370-J, 2024 WL 2988961, at *5 (W.D. Okla. May 28, 2024) (finding the Faragher/Ellerth limitation to the aided-by-agency exception in Title VII harassment claims to be irrelevant to the court's inquiry in an FHA case); 24 C.F.R. § 100.600(a)(2)(ii) (“The affirmative defense to an employer's vicarious liability for hostile environment harassment by a supervisor under Title VII of the Civil Rights Act of 1964 does not apply to cases brought pursuant to the Fair Housing Act.”).

4.   BHP Defendants also cite to United States v. Thong Cao, No. 17-1310-EFM, 2019 WL 5576954 (D. Kan. Oct. 29, 2019). There, the question was whether there was an agency relationship between an owner and manager. Id. at *1-2. The case did not discuss whether the alleged harasser's unlawful conduct was aided by the agency relationship.

5.   In the context of privilege, the Ninth Circuit has held that federal law governs where the same evidence relates to both federal and state law claims. Wilcox v. Arpaio, 753 F.3d 872, 876 (9th Cir. 2014). Although the Ninth Circuit did not decide whether, in federal question cases, state or federal privilege law governs the admissibility of evidence that relates exclusively to state law claims, see id. at 876 n.3, here, the audio recording relates to both Plaintiff's federal and state law claims.

ROZELLA A. OLIVER, UNITED STATES MAGISTRATE JUDGE