                       United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
             ___________

             No. 04-2346
             ___________

Coleman McClain, et al.,             *
                                     *
      Plaintiffs - Appellants,       *
                                     *
      v.                             *   Appeals from the United States
                                     *   District Court for the
American Economy Insurance           *   Western District of Missouri.
Company; American States Insurance   *
Company; American States Preferred   *
Insurance Company,                   *
                                     *
      Defendants - Appellees.        *

             ___________

             No. 04-2347
             ___________

Sara Kenner, et al.,                 *
                                     *
      Plaintiffs - Appellants,       *
                                     *
      v.                             *
                                     *
Safeco Insurance Company,            *
                                     *
      Defendant - Appellee.          *
             ___________

             No. 04-2353
             ___________

Cynthia E. Canady, et al.,             *
                                       *
      Plaintiffs - Appellants,         *
                                       *
      v.                               *
                                       *
Federal Insurance Company, et al.,     *
                                       *
      Defendants - Appellees.          *
                                  ___________

                              Submitted: April 13, 2005
                                 Filed: September 7, 2005
                                  ___________

Before LOKEN, Chief Judge, FAGG and BYE, Circuit Judges.
                              ___________

LOKEN, Chief Judge.

       In 1996, numerous plaintiffs sued twenty-five insurers under the Fair Housing
Act, 42 U.S.C. §§ 3601 et seq., and the Civil Rights Acts of 1866 and 1870, 42 U.S.C.
§§ 1981 & 1982, seeking class action relief for defendants’ alleged discriminatory
policies denying homeowners insurance to the residents of minority neighborhoods
in Missouri. The district court1 denied class certification and dismissed the complaint
without prejudice, concluding that “plaintiffs lack standing to bring claims against
defendants against whom they have alleged no direct injury.” Canady v. Allstate Ins.


      1
       The HONORABLE FERNANDO J. GAITAN JR., United States District
Judge for the Western District of Missouri.

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Co., 1997 U.S. Dist. LEXIS 24067 (W.D. Mo. 1997), aff’d, 1998 U.S. App. LEXIS
15157, 162 F.3d 1163 (8th Cir. 1998) (table) (Canady I). Ten Canady I plaintiffs then
filed class actions in state court against eighteen Canady I defendants, alleging that
the same practices violate Missouri law. The district court enjoined plaintiffs from
relitigating in state court the same causes of action against multiple unrelated
defendants. Canady v. Allstate Ins. Co., 1999 U.S. Dist. LEXIS 23031 (W.D. Mo.
1999). Again, this court affirmed. Canady v. Allstate Ins. Co., 282 F.3d 1005 (8th
Cir. 2002) (Canady II).

       Meanwhile, in response to Canady I, plaintiffs filed ten new actions in the
district court, each asserting virtually identical claims against a single Canady I
defendant. Initially, the district court stayed the actions pending the appeals in
Canady I and Canady II. After we affirmed, the district court ordered plaintiffs to file
Revised Second Amended Complaints eliminating all claims of indirect injury,
cautioning plaintiffs that they “cannot establish a ‘direct injury’ without showing a
‘direct contact’ between the plaintiffs and the defendant.” Plaintiffs then filed
Revised Second Amended Complaints, each challenging a single defendant’s alleged
“unlawful practices with respect to the marketing, underwriting, sale and pricing of
homeowners insurance in a single, contiguous black community in Kansas City,
Jackson County, Missouri (the ‘Community’).” The district court dismissed the
amended complaints with prejudice for lack of Article III standing. In these
consolidated appeals, plaintiffs challenge the dismissal of their claims against
American States Insurance Company (the McClain action), Safeco Insurance
Company (the Kenner action), and the Chubb group (the Canady action). We affirm.

        Whether a plaintiff has standing to sue “is the threshold question in every
federal case, determining the power of the court to entertain the suit.” Steger v.
Franco, Inc., 228 F.3d 889, 892 (8th Cir. 2000) (quotation omitted). The question
arises from Article III, § 2, of the United States Constitution, which limits the subject
matter jurisdiction of federal courts to actual cases and controversies. “[T]o satisfy

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Article III’s standing requirements, a plaintiff must show (1) it has suffered an
‘injury-in-fact’ that is (a) concrete and particularized and (b) actual or imminent, not
conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action
of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury
will be redressed by a favorable decision.” Friends of the Earth, Inc. v. Laidlaw
Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81 (2000). An injury in fact is a “direct
injury” resulting from the challenged conduct. Steger, 228 F.3d at 892.

      In ordering plaintiffs to file Revised Second Amended Complaints, the district
court relied upon the direct injury requirement of Steger, an action under the
American with Disabilities Act alleging that a private commercial building was not
properly accessible to handicapped persons:

      [T]he Court finds that plaintiffs cannot establish a “direct injury”
      without showing a “direct contact” between the plaintiffs and the
      defendant [insurer]. . . . As the court in Steger noted, although the
      plaintiffs [in that case] did not have to engage in the futile gesture of
      visiting a non-complying building that the landlord had no intention of
      remedying, the plaintiff “must at least prove knowledge of the barriers
      and that they would visit the building in the imminent future but for
      those barriers.” [228 F.3d] at 892. Similarly, in the instant case, the
      plaintiffs must at least prove that they had knowledge of the defendants’
      discriminatory policies and that through this direct contact with the
      defendants, the plaintiffs knew that it would be futile to apply for
      insurance and were thus deterred.

Order of Sept. 30, 2002, at pp. 4-5 (emphasis added). Despite this directive, most of
the plaintiffs named in the Revised Second Amended Complaints never contacted the
defendant about the possibility of obtaining insurance. Like the district court, we will
separately address the standing of the few plaintiffs who alleged “direct contacts” and
the remaining plaintiffs whose standing is based on allegations they were deterred
from seeking insurance by their knowledge of defendants’ unlawful practices.

                                          -4-
      A. The Direct Contact Plaintiffs. In opposing American States’ motion to
dismiss, plaintiffs relied on deposition testimony of Coleman McClain that he asked
an independent American States agent about purchasing homeowners insurance on
a new home the McClains were building in an area adjacent to the Community and
was falsely told, “American States does not write insurance in Missouri.” The district
court concluded that the McClains lack standing because this direct contact
concerned insurance on a home located outside the Community:

      Plaintiffs . . . amend[ed] their Complaint to redefine the class as a single
      contiguous area. The Complaint does not say that it also includes areas
      which are immediately adjacent to the Community. Indeed the census
      tract in which the [McClains’s] home is located does not even meet the
      definition set out in the Complaint as including those areas where the
      resident black population exceeds sixty percent.

We agree. Assuming without deciding that one phone call to an independent agent
is sufficient direct contact for these purposes, the Revised Second Amended
Complaint challenges American States’ policies and practices in the Community, not
elsewhere. Thus, the McClains lack standing because their injury is not “fairly
traceable to the challenged action of the defendant.” See Gladstone Realtors v. Vill.
of Bellwood, 441 U.S. 91, 112 n.25 (1979). Indeed, the McClains are not even
members of the plaintiff class as defined in paragraph 30 of the Complaint.

       In opposing Safeco’s motion to dismiss, plaintiffs relied on the deposition
testimony of Sara Kenner. When Kenner purchased a home in the Community, the
realtor obtained homeowners insurance from Safeco as part of the closing. Kenner
did not contact Safeco or a Safeco agent herself and does not recall filling out a policy
application. Two months later, Kenner received a notice from Safeco cancelling the
policy based on “information obtained through a credit report.” Kenner admitted that
“my credit history would keep me from being able to buy a house conventionally.”
The district court concluded that this was not sufficient direct contact to establish

                                          -5-
Kenner’s standing to challenge Safeco’s underwriting and marketing practices in the
Community. On appeal, Kenner argues that the court erred in granting summary
judgment on her wrongful cancellation claim without affording her an opportunity “to
discover facts to support her contention that the cancellation of her policy was
pretextual.” We disagree. The district court properly reviewed the lengthy discovery
record and resolved fact disputes relating to its jurisdiction; plaintiffs fail to
demonstrate that the court’s findings were clearly erroneous. See Faibisch v. Univ.
of Minn., 304 F.3d 797, 801 (8th Cir. 2002). On this record, Kenner failed to
establish standing by demonstrating that her alleged injury is “fairly traceable to the
challenged action of the defendant.”

       In opposing Chubb’s motion to dismiss, plaintiffs relied on allegations in the
Revised Second Amended Complaint that three Canady plaintiffs made “recent”
phone calls to Chubb agents who told them they could not qualify for homeowners
insurance because they did not meet Chubb’s “objective underwriting selection
criteria, rules, guidelines and policies.” The district court found these allegations “too
speculative to support any showing of direct contact.” Alternatively, the court
concluded that these plaintiffs “cannot at this late stage in the proceedings attempt to
create direct contact where none previously existed.” We agree. See Steger, 228 F.3d
at 892 (“standing is determined as of the lawsuit’s commencement”); accord Perry v.
Vill. of Arlington Heights, 186 F.3d 826, 830 (7th Cir. 1999).

       B. The Deterrence Plaintiffs. The remaining plaintiffs allege a “deterrence”
or “futile gesture” theory of injury-in-fact, arguing that they obtained knowledge of
the defendants’ discriminatory underwriting policies from unspecified sources, and
this knowledge “deterred” them from making “futile” applications for homeowners
insurance, thereby causing direct injury.

       In Teamsters v. United States, 431 U.S. 324, 364 (1977), the Supreme Court
held that employees who did not apply for jobs could obtain Title VII relief from a

                                           -6-
discriminatory seniority system if they satisfied the “difficult task” of showing that
their knowledge of the employer’s discriminatory practices deterred them from
applying. The Fourth Circuit adapted this principle to a Fair Housing Act claim of
race discrimination in the sale of a dwelling:

      the following elements must be satisfied to establish a violation of fair
      housing law by reliance on the futile gesture theory: the plaintiff must
      be a member of a racial minority who was a potential bona fide buyer of
      the property and financially able to purchase it at the time it was offered
      for sale; the owner discriminated against people of the plaintiff’s race;
      the plaintiff was reliably informed of this policy of discrimination and
      would have taken steps to buy the property but for the discrimination;
      and the owner would have discriminated against the plaintiff had the
      plaintiff disclosed an interest in the property.

Pinchback v. Armistead Homes Corp., 907 F.2d 1447, 1452 (4th Cir.), cert. denied,
498 U.S. 983 (1990). We adopted a similar fact-intensive approach in applying this
principle to decide an issue of standing under the ADA:

      Although plaintiffs need not engage in the ‘futile gesture’ of visiting a
      building containing known barriers that the owner has no intention of
      remedying . . . they must at least prove knowledge of the barriers and
      that they would visit the building in the imminent future but for those
      barriers.

Steger, 228 F.3d at 892, citing Laidlaw, 528 U.S. at 180-84.

       The district court concluded that the deterrence plaintiffs lack standing because
they did not have the direct contact needed to establish a direct injury. Plaintiffs
argue that the court erred in requiring a showing of direct contact to establish direct
injury under the futile gesture theory. Given the many intangible factors that impact
an insurer’s decision to issue a homeowners policy, we are inclined to agree with the


                                          -7-
district court that direct contact with the insurer, or at least with its authorized agent,
is a prerequisite to showing that an allegedly deterred plaintiff was “reliably
informed” of the discriminatory policies.

       Even if it might be possible in another case to establish standing based on the
futile gesture theory without proof of direct contact, the deterrence plaintiffs have
failed to satisfy their burden to show standing in these cases. They rely on bare
allegations in the Revised Second Amended Complaints that defendants erected
barriers to obtaining insurance that caused plaintiffs “who have experienced or
otherwise acquired knowledge of those barriers, to conclude that attempts to acquire
insurance . . . would be futile.” But in earlier depositions, these plaintiffs testified
that they had no personal knowledge of defendants’ practices. On this record, after
lengthy earlier proceedings, the district court was entirely justified in requiring a
showing of direct contact.

       Plaintiffs argue at length that the district court was required to accept the bare
allegations in the Revised Second Amended Complaints. We disagree. Defendants
moved to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) of
the Federal Rules of Civil Procedure. When plaintiffs relied on materials outside the
pleadings in opposing the motions, defendants properly replied that the district court
was entitled to resolve fact issues in determining its jurisdiction. See Osborn v.
United States, 918 F.2d 724, 728 & n.4 (8th Cir. 1990). The district court did not rule
on the motions until fourteen months after defendants served their replies. Thus,
plaintiffs had more than sufficient notice of the need to support the bare futile gesture
allegations in the Revised Second Amended Complaints. Instead, plaintiffs
disclaimed any interest in submitting further evidence.2

      2
        The Canady plaintiffs argue for the first time in their reply brief that the
district court was required to hold an evidentiary hearing to resolve disputed fact
issues. “Claims not raised in an initial brief are waived.” Mahaney v. Warren
County, 206 F.3d 770, 771 n.2 (8th Cir. 2000).

                                           -8-
      After nearly a decade of litigation and plaintiffs’ repeated failure to establish
standing by adequately alleging and proving injury-in-fact, the district court did not
abuse its discretion in dismissing the Revised Second Amended Complaints with
prejudice. See Jaramillo v. Burkhart, 59 F.3d 78, 79 (8th Cir. 1995) (standard of
review). Accordingly, the judgments of the district court are affirmed.
                       ______________________________




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