On June 28, 2002, the Phoenix office of the Equal Employment Opportunity Commission filed a lawsuit under Title VII against Aztec Inn Properties LLC and HSL Properties Financial Corporation in the U.S. District Court for the District of Arizona. The EEOC alleged that the defendants had violated the rights of five of their hotel's housekeeping staff members by discriminating against them on the basis of their intellectual disability and/or Down's Syndrome. Specifically, they alleged that the defendants had harassed them, failed to provide reasonable accommodations for their disabilities, and discharged them wrongfully. On September 9, 2002, the complainants intervened in the case as plaintiffs.

On November 20, 2002, the defendants filed a third party complaint and asked the court to add Community Psychology Education Services, Ltd. (CPES) as a third-party defendant to the case. On February 20, 2003, CPES filed a motion for summary judgment on the third-party complaint that had been filed against them. On December 4, 2003, the district court granted CPES's motion for summary judgment and dismissed them from the case. This dismissal was appealed to the U.S. Court of Appeals for the Ninth Circuit by the other defendants on May 12, 2004.

Meanwhile, on April 3, 2003, the remaining defendants filed for summary judgment, but their request was denied by the court on May 19, 2003. After several failed settlement conferences, the defendants filed a motion for sanctions for violation of statutory conciliation mandates.

With these motions were pending, the parties reached a settlement and filed a consent decree with the district court on August 27, 2004. As part of the settlement, the third-party defendants agreed to drop their complaint against CPES. The district court adopted the consent decree on September 1, 2004, and the Ninth Circuit dismissed the appeal on October 4, 2004. Under the terms of the decree, the defendants agreed to pay the complainants $50,000.00 in compensatory damages, to be deposited into trust accounts for their usage, and $13,500.00 in attorneys' fees. They also agreed to expunge the employment records of the complainants of any mention of this lawsuit, to offer them the opportunity to be reinstated in their jobs, and to provide reasonable accommodations for their disabilities. The decree also enjoined the defendants from discriminating against any employee on the basis of a disability or retaliating against any employee who complaints of discrimination. They agreed to develop an anti-discrimination policy, and to enter into a contract with a service-provider that would utilize a crew of persons with developmental disabilities as housekeeping staff workers. They agreed to post and distribute notice of their anti-discrimination policy to all employees, and to hold annual 90-minute training sessions in disability law and the rights of disabled persons in the workplace, to be attended by all crew members and supervisory staff. The defendants were required to file bi-annual reports with the EEOC regarding their compliance with the terms of the consent decree. The defendants agreed to keep a written record of all employees who attend the training sessions, and the defendants were to keep that record for the duration of the consent decree. The EEOC and the ACDL were to be allowed to send representatives to the crew member anti-discrimination training sessions. The EEOC was also to have the right to enter the defendants' premises without notice to see whether they complied with the requirement that they post a notice of anti-discrimination laws in a prominent place in the workplace.