According to the Justia legal website, Muns v. Datacomp Appraisal Systems, Inc. et al was filed on 12.1.2023. The plaintiff is Andrea Muns, and named defendants in that case includes Murex Properties, plus others that have become familiar to regular and detail minded readers of MHProNews and MHLivingNews. Per Justia, the defendants in the Muns litigation, Case No. 1:2023-cv-16450 are as follows. Datacomp Appraisal Systems, Inc., Equity Lifestyle Properties, Inc., Hometown America Management, L.L.C., Lakeshore Communities, Inc., Sun Communities, Inc., RHP Properties, Inc., YES Communities, LLC, Inspire Communities, L.L.C., Kingsley Management Corp., Cal-Am Properties, Inc. and Murex Properties, L.L.C. So, 11 defendants rather than then the 10 more commonly seen in other presumably similar filings. Also filed in December 2023, is Case: 1:23-cv-16462 filed on behalf of GREGG TOWNSEND individually and on behalf of all others similarly situated, as plaintiffs, and

• DATACOMP APPRAISAL SYSTEMS, INC.;
• EQUITY LIFESTYLE PROPERTIES, INC.;
• HOMETOWN AMERICA MANAGEMENT, L.L.C.;
• LAKESHORE COMMUNITIES, INC.;
• SUN COMMUNITIES, INC.;
• RHP PROPERTIES, INC.;
• YES! COMMUNITIES, INC.;
• INSPIRE COMMUNITIES, L.L.C.;
• KINGSLEY MANAGEMENT, CORP.;
• and CAL-AM PROPERTIES, INC.,

Defendants.

In the Muns case, per Justia on December 1, 2023 the pleadings were filed as “SEALED DOCUMENT by Plaintiff Andrea Muns Class Action Complaint (Justice, Kimberly).” That noted, it is perhaps worthy of reminder that Murex was previously struck with class action litigation, to learn more, click here.

Both the Muns and the Townsend cases were filed in UNITED STATES DISTRICT COURT, NORTHERN DISTRICT OF ILLINOIS.

In the Townsend case, the case pleadings have been obtained by MHProNews. Those pleadings are as shown posted below, in Part I of this report. It may be useful for not only community sector readers to be familiar with the pleadings, but also those who may sell products or services to communities. State, regional, and national firms that are members of the Manufactured Housing Institute (MHI), and/or an MHI state affiliate may find Part II of this report to be of importance. Part II will provide additional information with more MHProNews Analysis and Commentary. How so? If December 2022 was the prediction of ‘a target rich environment‘ for manufactured housing industry firms, then it may well be that 2023, 2024 and beyond could be the years that the trend toward litigation against consolidators will be understood as picking up legal steam. Your firm doesn’t currently have to be involved in a major legal action now to realize that how these play out in the media and in court will likely have ripple effects on employees, owners, investors, and others involved in once more affordable manufactured housing.

 

Part I: Case: 1:23-cv-16462 Document #: 1 Filed: 12/04/23 – 

 

Plaintiff Gregg Townsend (“Plaintiff”), individually and on behalf of all others similarly situated (the “Class,” as defined below), upon personal knowledge as to the facts pertaining to himself and upon information and belief as to all other matters, and based on the investigation of counsel, brings this class action complaint to recover treble damages, injunctive relief, and other relief as appropriate, based on Defendants’ Datacomp Appraisal Systems, Inc. (“Datacomp”), Equity LifeStyle Properties, Inc. (“ELS”), Hometown America Management, L.L.C.

(“Hometown America”), Lakeshore Communities, Inc. (“Lakeshore”), Sun Communities, Inc.

(“Sun Communities”), RHP Properties, Inc. (“RHP”), YES! Communities, Inc. (“YES! Communities”), Inspire Communities, L.L.C. (“Inspire Communities”), Kingsley Management,

Corp. (“Kingsley”) and Cal-Am Properties, Inc.’s (“Cal-Am”) (together, “Defendants”),

violations of federal antitrust laws and common law.

 I.         NATURE OF THE ACTION

 

1. Manufactured home lots are plots of land where residents set down their manufactured homes. Manufactured home lots are located in residential developments called “manufactured home communities” or “manufactured home parks.” Manufactured home communities are specifically designed to house manufactured homes and can range in size from a few lots to hundreds. Most manufactured home residents own their manufactured homes but rent the lots on which they set down their manufactured homes from the owners of manufactured home communities.
2. Manufactured, or mobile home communities were created by the Federal government at the end of World War II to house returning veterans and have been one of the country’s most affordable housing options since the 1950’s. According to federal data, there are approximately 43,000 mobile home parks with roughly 22 million residents. This makes up over 6% of the U.S. housing stock.
3. Mobile home communities continue to be an affordable housing option, particularly for families that do not receive federal aid. In 2022, nearly one-third of the adults living in manufactured homes were over the age of 60 and the median annual household income for mobile home residents is approximately $35,000.
4. This action arises from Defendants’ conspiracy to fix, raise, maintain, and/or stabilize manufactured home lot rental prices. Defendants are Datacomp—the nation’s largest provider of manufactured and mobile home data—and several large owners of manufactured home communities that use Datacomp’s reports to coordinate their prices by sharing nonpublic, competitively sensitive information about manufactured home lot rental prices and occupancy, among other things, throughout the United States.
5. Defendants YES! Communities, Inspire Communities, ELS, Hometown America, Lakeshore, Sun Communities, RHP, Kingsley, and Cal-Am (together referred to as “Manufactured Home Community Defendants”) are manufactured home community owners. They are part of a recent trend of large corporate owners who have acquired manufactured home communities across the United States to grow large portfolios of home sites. After acquiring the communities, these buyers have implemented aggressive annual rent increases on their manufactured home lots, which has caused significant burdens on manufactured home residents.

6. Manufactured home community owners, including the Manufactured Home Community Defendants, have coordinated with each other to increase manufactured home lot rents systematically and unlawfully by purchasing and using market reports published by Defendant Datacomp. Datacomp’s reports, known as JLT Market Reports, which provide detailed, non-anonymized, and current – indeed, at times future – competitive information about specific manufactured home communities located across the United States.
7. Having access to this non-public, competitively sensitive information, and knowing that one’s competitors have access to and are using the same information, allow manufactured home community owners, including the Manufactured Home Community Defendants, to reduce or eliminate competition amongst themselves on price, services, and quality for manufactured home lots.
8. In recent years, manufactured home lot rents paid by manufactured home residents have increased significantly. The average manufactured home lot rental prices increased from $382 to $593 between 2010 and 2021, a 55% increase. The Manufactured Home Community Defendants could never have demanded these rental price increases unilaterally. To implement the increases, however, they needed to conspire. This was accomplished through the exchange of non-public, competitively sensitive information through Datacomp’s JLT Market Reports.  

9. The exchange of non-public, competitively sensitive information through Datacomp’s JLT Market Reports allowed Defendants to carry out a price fixing conspiracy to artificially inflate manufactured home lot rents in violation of Section 1 of the Sherman Act and common law. The exchange of information through the JLT Market Reports is also separately unlawful under Section 1 of the Sherman Act as an unlawful information exchange. The supracompetitive rent increases for manufactured home lots would not have been possible but for the conduct described herein.
10. Plaintiff brings this antitrust class action lawsuit on behalf of himself and a nationwide Class of all similarly situated persons and entities who paid rent for a manufactured home lot located in a manufactured home community that was included in a JLT Market Report between August 31, 2019, and the present (the “Relevant Time Period”). Because of Defendants’ violations of Section 1 of the Sherman Act and common law, Plaintiff and members of the Class were injured by paying significant overcharges on manufactured home lot rents throughout the United States.

11. As a result of Defendants’ conspiracy, two of society’s most vulnerable groups-the elderly and low-income earners—face considerable financial pressures.  The effect of Defendants’ conspiracy has been devasting to manufactured home residents.

12. This devastation was described recently by U.S. Senator Warren at a Senate Banking Committee hearing: “So Wall Street investors buying up manufactured home communities threatens the remaining affordable housing stock that seniors rely on,” she said.  “It means that seniors have fewer opportunities to age in their own homes and that they risk being squeezed by rising rents, leaving them even with less money to buy medicine and to put food on the table.”

13. If Defendants are permitted to continue their anticompetitive scheme, Plaintiff and members of the Class will continue to pay supracompetitive rents for manufactured home lots. Plaintiff brings this action to seek damages and permanently enjoin Defendants’ ongoing efforts to coordinate their prices by sharing competitively sensitive information for manufactured home lots.

II. JURISDICTION, VENUE, AND EFFECT ON INTERSTATE COMMERCE

14. Plaintiff brings this antitrust class action lawsuit pursuant to Sections 4 and 16 of the Clayton Act (15 U.S.C. §§ 15 and 26), to (i) recover treble damages and the costs of suit, including reasonable attorneys’ fees, for the injuries sustained by Plaintiff and members of the Class; (ii) enjoin Defendants’ anticompetitive conduct; and (iii) for such other relief as is afforded under the laws of the United States for Defendants’ violations of Section 1 of the Sherman Act (15 U.S.C. § 1).
15. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337, and Sections 4 and 16 of the Clayton Act (15 U.S.C. §§ 15(a), 26).
16. Venue is proper in this District pursuant to Sections 4, 12, and 16 of the Clayton Act (15 U.S.C. §§ 15, 22, and 26), and pursuant to 28 U.S.C. § 1391(b), (c), and (d), because, at all relevant times, one or more Defendants resided, transacted business, was found, is licensed to do business, and/or had agents in this District.
17. This Court has personal jurisdiction over each Defendant pursuant to Section 12 of the Clayton Act (15 U.S.C. §§ 22), because, among other things, each Defendant: (a) transacted business throughout the United States, including in this District; (b) leased manufactured home lots to individuals throughout the United States, including in this District; and/or (c) engaged in an antitrust conspiracy that was directed at and had a direct, foreseeable, and intended effect of causing injury to the business or property of persons residing in, located in, or doing business throughout the United States, including in this District. Each Defendant has purposefully availed itself of the privilege of conducting business activities within the United States and has the requisite minimum contacts therein because each Defendant committed intentional acts that were intended to cause and did cause injury within the United States.

18. The activities of Defendants and their co-conspirators, as described herein, were within the flow of, were intended to, and did have direct, substantial, and reasonably foreseeable effects on the interstate commerce of the United States.
19. This action is also instituted to secure injunctive relief against Defendants to prevent them from further violations of Section 1 and 3 of the Sherman Act as hereinafter alleged.
20. No other forum would be more convenient for the parties and witnesses to litigate this case.

III. THE PARTIES

 

21. Plaintiff Gregg Townsend is a resident of Macomb County, Michigan. During the Relevant Time Period, he rented a manufactured home lot located in a manufactured home community named Shelby West, which is owned and managed by Defendant Sun Communities, Inc. During the Relevant Time Period, Gregg Townsend paid monthly rent to Sun Communities, Inc. for this manufactured home lot. Gregg Townsend paid higher rental prices by reason of the violation alleged herein.

22. Defendant Datacomp Appraisal Systems, Inc. is a Michigan corporation, headquartered in Grand Rapids, Michigan. Datacomp is the nation’s largest provider of manufactured and mobile home valuations, inspections, and market data. Datacomp’s client list includes the top 10 largest manufactured home community owners, regional property management companies, developers, lenders, appraisers, homeowner associations and real estate brokers. Datacomp was purchased by Defendant Equity LifeStyle Properties, Inc. in December 2021 for $43 million.
23. Defendant Equity LifeStyle Properties, Inc. is a Maryland corporation, headquartered in Chicago, Illinois. ELS owns, operates, or has a controlling interest in more than 200 manufactured home communities across the United States, including three in this District, with approximately 70,000 manufactured home sites nationwide. Datacomp lists ELS as one of its clients on its website. Upon information and belief, ELS uses Datacomp’s JLT Market Reports to price manufactured home lot rents.

24. Defendant Hometown America Management, L.L.C. is a Delaware corporation, headquartered in Chicago, Illinois. Hometown America owns, operates, or has a controlling interest in 66 manufactured home communities across the United States, including one in this District. Datacomp lists Hometown America as one of its clients on its website. Upon information and belief, Hometown America uses Datacomp’s JLT Market Reports to price manufactured home lot rents.
25. Defendant Lakeshore Communities, Inc. is an Illinois corporation, headquartered in Skokie, Illinois. Lakeshore is one of the largest privately held owner/operators of manufactured home communities in the United States and owns manufactured home communities across the United States. Datacomp lists Lakeshore Communities as one of its clients on its website. Upon information and belief, Lakeshore uses Datacomp’s JLT Market Reports to price manufactured home lot rents.
26. Sun Communities, Inc. is a Michigan corporation headquartered in Southfield, Michigan. Sun Communities owns, operates, or has a controlling interest in 353 manufactured home communities across the United States, including two in this District, with approximately 120,000 manufactured home sites nationwide. Datacomp lists Sun Communities as one of its clients on its website. Upon information and belief, Sun Communities uses Datacomp’s JLT Market Reports to price manufactured home lot rents.
27. RHP Properties, Inc., is a Michigan corporation, headquartered in Farmington Hills, Michigan. RHP is the largest privately held manufactured home community owner in the United States. RHP owns, operates, or has a controlling interest in more than 370 communities across the United States, including three in this District, with approximately 80,000 manufactured home sites nationwide. Datacomp lists RHP as one of its clients on its website. Upon information and belief, RHP uses Datacomp’s JLT Market Reports to price manufactured home lot rents.
28. YES! Communities, Inc. is a Delaware corporation, headquartered in Denver, Colorado. YES! Communities owns, operates, or has a controlling interest in more than 200 communities across the United States with approximately 55,000 home sites. YES! Communities is partially owned by Stockbridge Capital Group, LLC, a private equity firm with $33.7 billion of assets under management. The remainder of the company is owned by the Government of Singapore Investment Company and the Pennsylvania Public School Employees Retirement System. Datacomp lists YES! Communities as one of its clients on its website. Upon information and belief, YES! Communities uses Datacomp’s JLT Market Reports to price manufactured home lot rents.

29. Inspire Communities, L.L.C. is a Delaware corporation, headquartered in Phoenix, Arizona. Inspire Communities owns, operates, or has a controlling interest in over 130 manufactured home communities across the United States, including three in this District. In 2017, Apollo Global Management, a private equity firm with over $500 billion of assets under management, acquired Inspire Communities. Datacomp lists Inspire Communities as one of its clients on its website. Upon information and belief, Inspire Communities uses Datacomp’s JLT Market Reports to price manufactured home lot rents.

30. Kingsley Management, Corp. is a Utah corporation, headquartered in Provo, Utah. Kingsley is one of the largest privately held owner/operators of manufactured home communities in the United States and owns manufactured home communities across the United States. Datacomp lists Kingsley as one of its clients on its website. Upon information and belief, Kingsley uses Datacomp’s JLT Market Reports to price manufactured home lot rents.
31. Cal-Am Properties, Inc., is a California corporation, headquartered in Costa Mesa, California. Cal-Am is one of the largest privately held owner/operators of manufactured home communities in the United States and owns manufactured home communities across the United States. Datacomp lists Cal-Am as one of its clients on its website. Upon information and belief, Cal-Am uses Datacomp’s JLT Market Reports to price manufactured home lot rents.

32. Various other persons, firms, and corporations not named as Defendants use Datacomp’s JLT Market Reports to price manufactured home lot rents and have participated as co-conspirators with Defendants (the “Unnamed Co-conspirators”). The Unnamed Co- conspirators have also performed acts and made statements in furtherance of the conspiracy. Defendants are jointly and severally liable for the acts of the Unnamed Co-conspirators.

33. Whenever reference is made to any act of any corporation, the allegation means that the corporation engaged in the act by or through its officers, directors, agents, employees, or representatives while they were actively engaged in the management, direction, control, or transaction of the corporation’s business or affairs.
34. Each Defendant named herein acted as the agent of or for the other Defendants with respect to the acts, violations, and common course of conduct alleged herein.
35. Defendants are also liable for acts done in furtherance of the alleged conspiracy by companies they acquired through mergers and acquisitions.

IV. FACTUAL ALLEGATIONS

 

36. During the Relevant Time Period, the Manufactured Home Community Defendants conspired and coordinated with each other and Datacomp to systematically increase manufactured home lot rents and thus harm manufactured home residents who paid elevated rents as a result.

a.  Background on Manufactured Homes in the United States

 

37. Manufactured homes, or mobile homes, are prefabricated single-family home structures, built in a factory on a permanently attached chassis before they are transported to the manufactured home community.
38. A manufactured home is placed on a plot of land referred to as a “manufactured home lot.”
39. Manufactured home communities’ range in size in terms of the number of lots they contain, with some large communities containing over 700 or 800 lots.

40. The terms mobile home and manufactured home refer to the same structure.

The term manufactured home emerged in 1976, when the Department of Housing and Urban Development (“HUD”) imposed new codes and standards for the construction of factory-built homes. With these codes, HUD stopped using the term “mobile home” and began using “manufactured home.” Therefore, a home built in a factory prior to June 15, 1976, is a “mobile” home, and one built after June 15, 1976, is a “manufactured” home. While the term “mobile home” is still commonly used, in this complaint the term “manufactured home” will refer to any factory-built home regardless of when it was built.

41. Manufactured homes have a longstanding history of providing affordable housing for vulnerable communities in the United States.
42. Following World War II, manufactured homes and manufactured home communities became a popular and affordable housing option for returning veterans.
43. In the 1980’s substantial federal housing budgets cuts made manufactured homes the fastest-growing type of residence for low-income individuals and families in the United States.

44. By the 1990s, manufactured homes were responsible for 66% of new affordable housing produced in the United States. Today, manufactured homes are the largest source of unsubsidized affordable housing in the United States (and in most cases the cheapest). According to Esther Sullivan in Manufactured Insecurity: Mobile Home Parks and Americans’ Tenuous Right to Place, due to the lack of other forms of affordable housing, manufactured homes are a crucial national affordable housing infrastructure and a primary pathway to low-income homeownership.
45. Today approximately 22 million Americans, or 6% of the U.S. population, live in manufactured homes. Of these manufactured homes residents, there is a high concentration of various vulnerable communities, including the elderly, disabled, low-income earners, and veterans.
46. Figure 1 below shows the median household income of owners and renters, by housing type. According to a 2020 article by the Urban Institute and Figure 1, the median annual household income of manufactured home residents who owned their homes was about $38,000, and 28,000 for manufactured home residents who rent their homes. This is nearly half of the median annual income of site-built homeowners and renters. Over a quarter of manufactured homeowners earn less than $20,000 a year.

The balance of the pleadings are found at this link here, which include illustrations.

Part II – Additional Information with More MHProNews Analysis and Commentary

In no particular order of importance are the following facts, concerns, apparently relevant points, and general notions.

IIa. When Warren Buffett led Berkshire Hathaway is hit by multiple suits, and Barron’s publicly advises Buffett that he is risking his supposed ‘good guy image,’ that may be a good time to realize that if various Berkshire units gets hit with litigation that others are perhaps vulnerable too.

 

IIb. As MHProNews and MHLivingNews have previously covered in various articles – based on a range of information obtained, reported, and analyzed – it has been our expert view that litigation was likely to come to the land lease community sector of the affordable housing industry, and possibly other aspects in the manufactured home industry as well.  Production, retail, and lending are among those who have arguably been harmed by practices deemed by some legal experts and other observers to be apparently illegal practices. An informed look at what multiple attorneys said about manufactured housing in remarks published here are an ongoing and continuingly relevant source of information and insights.  That is perhaps one reason why that report has been consistently well read since it was published.

IIc. The initially bizarre report about Sun Communities leader Gary Shiffman, linked here, was later followed up with exclusive revelations about more purported wrongdoing by Shiffman published here and here. Litigation was the spark that made those rather embarrassing claims public.  Most of the balance of the manufactured housing industry’s trade media, several of which have obvious ties to the Manufactured Housing Institute (MHI – note: MHProNews and MHLivingNews have not for a number of years), have been ‘radio silent’ on the Shiffman controversies. As evidence of that, consider this Q&A with Bing AI on 1.2.204 at about 2:45 AM ET.

“Who in manufactured housing trade media reported the allegations against Sun Communities Gary Shiffman in the matters raised by Brian Benderhoff?”