Housing and Civil Enforcement Cases
United States v. Ariel Solis, et al. (D.N.M.)
On March 6, 2024, the United States filed a complaint in United States v. Ariel Solis, et al. (D.N.M.). The complaint alleges that between 2010 and 2022, Ariel Solis, a property manager in Albuquerque, New Mexico, engaged in a pattern or practice of sexual harassment against female tenants at St. Anthony Plaza Apartments in violation of the Fair Housing Act (FHA). The lawsuit further alleges that Solis’s employer, PacifiCap Properties Group, LLC, and the owners of St. Anthony Plaza, St. Anthony Limited Partnership and PacifiCap Holdings XXXVIII, LLC, are vicariously liable for Solis’s discriminatory conduct because Solis acted as their agent when he sexually harassed tenants at St. Anthony Plaza.
United States v. First National Bank of Pennsylvania (M.D. N.C.)
On February 13, 2024, the court entered a consent order in United States v. First National Bank of Pennsylvania, et al. (M.D.N.C.). The complaint, which was filed on February 5, 2024, by the United States and North Carolina Department of Justice, alleges that First National Bank of Pennsylvania (including as successor in interest to Yadkin Bank, which it acquired in 2017) violated the Equal Credit Opportunity Act and the Fair Housing Act by engaging in unlawful redlining in its service areas in the Charlotte and Winston-Salem, North Carolina markets. Specifically, among other things, the complaint alleges the bank located and maintained nearly all of its branches and mortgage loan officers outside of majority-Black and Hispanic neighborhoods, relied on mortgage loan officers concentrated in majority-white areas as the primary source of new loan applications, and maintained inadequate internal fair lending policies and procedures to ensure that the bank was positioned to provide equal access to majority-Black and Hispanic neighborhoods. As a result, the bank’s peers generated lending activity in those neighborhoods at two to four times the rate of other banks with similar lending volume. The consent order requires the defendant to invest at least $11.75 million in a loan subsidy fund to increase credit opportunities for residents of majority-Black and Hispanic neighborhoods in Charlotte and Winston-Salem; spend $1 million on community partnerships to provide services to residents of those neighborhoods; spend $750,000 for advertising, outreach, consumer financial education and credit counseling focused on those neighborhoods; open two new branches in majority-Black and Hispanic neighborhoods in Charlotte and one such branch in Winston-Salem; ensure that at least two mortgage bankers and two community homeownership specialists are assigned to solicit loan applications from majority-Black and Hispanic neighborhoods in Charlotte and Winston-Salem; and employ a Director of Community Lending who will oversee the continued development of lending in communities of color in North Carolina. First National Bank of Pennsylvania also agreed to complete a community credit needs assessment, to assess and report on its fair lending program; and to train staff on the bank’s obligations under the consent order.
United States v. Patriot Bank (W.D. Tenn.)
On January 30, 2024, the court entered a consent order in United States v. Patriot Bank (W.D. Tenn.). The complaint, which was filed January 17, 2024, alleged violations of the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA) specifically that, from 2015 through 2020, Patriot Bank engaged in unlawful redlining in its self-designated service area in Memphis, Tennessee and discriminated on the basis of race, color, or national origin. The consent order requires Patriot to invest at least $1.3 million in a loan subsidy fund to increase access to home mortgage, home improvement, and home refinance loans for residents of majority-Black and Hispanic neighborhoods in Memphis. Additionally, in those same neighborhoods, Patriot will spend at least $375,000 for advertising, outreach, and consumer financial education and counseling; spend $225,000 to develop community partnerships to provide services that increase access to residential mortgage credit; employ two loan officers dedicated to serving those communities of color in Memphis and a Director of Community Lending who will oversee the continued development of lending in those communities; and continually assess the credit needs of the communities.
United States v. Shevis D. Petties (W.D. Okla.)
On January 11, 2024, the United States filed a complaint in United States v. Shevis D. Petties, et al. (W.D. Okla.). The complaint alleges that Shevis D. Petties discriminated on the basis of sex in violation of the Fair Housing Act by sexually harassing female tenants at residential rental properties he owned and/or operated and managed in the Western District of Oklahoma since at least 2016. The lawsuit alleges that Mr. Petties, among other things, subjected female tenants to unwelcome sexual comments and contact, physically assaulted female tenants, photographed and/or filmed female tenants in their bedrooms and bathrooms without their knowledge and permission, and demanded that female tenants engage in sexual acts with him in order not to lose housing. The lawsuit further alleges that the other defendants, the owners of these residential rental properties, are vicariously liable for the actions of their agent, Mr. Petties.
United States v. McGowan Realty, LLLC, d/b/a RedSail Property Management (E.D. Va.)
On January 8, 2024, the United States Attorney’s Office filed a complaint and proposed consent order in United States v. McGowan Realty, LLLC, d/b/a RedSail Property Management (E.D. Va.), a Servicemembers Civil Relief Act (SCRA) pattern or practice case. The complaint alleges that a property management company operating throughout Hampton Roads area in Northern Virginia refused to honor the residential lease termination of a U.S. Navy Petty Officer First Class and were assessing early lease termination charges and additional rent against him. RedSail allegedly erroneously insisted that the Virginia Residential Landlord and Tenant Act (VRLTA) placed a 35-mile limitation on a servicemember’s SCRA residential lease termination rights. The complaint alleges that the Petty Officer paid $3,408.55 in early termination charges and additional rent to RedSail, which placed a considerable financial burden on him. Under the proposed consent order, which still must be approved by the court, RedSail will pay $10,225.65 to the Petty Officer and a $3,000 civil penalty. The consent order also requires RedSail to provide SCRA training to its employees, develop new policies and procedures consistent with the SCRA, and refrain from imposing the VRLTA’s 35-mile limitation on servicemembers who lawfully terminate a lease under the SCRA.
Stanton Square, LLC v. The City of New Orleans
On December 29, 2023, the United States filed a Statement of Interest in Stanton Square, LLC, v. The City of New Orleans (E.D. La.), a case brought under the Fair Housing Act (FHA), Title VI of the Civil Rights Act of 1964 (Title VI), the U.S. Constitution, and state law. The complaint in this case alleges, in part, that Defendants violated the FHA and Title VI when they relied on the discriminatory objections raised by constituents to unlawfully block Plaintiff from developing a multifamily apartment complex that complied with all relevant zoning requirements. Defendants moved to dismiss the Complaint. In its Statement of Interest, the United States argues that the Complaint sufficiently alleged facts to support the plaintiff’s claims, specifically that (1) Defendants’ moratorium on the proposed development is more likely to have a disparate impact on Black and Hispanic residents of New Orleans, (2) comments that do not directly reference a protected class may nevertheless be indicative of discriminatory animus, (3) Defendants can be held liable under the FHA for yielding to the discriminatory objectives and views of constituents opposing the development, and (4) in making housing unavailable, the moratorium harmed both Plaintiff and prospective residents of the apartment complex. The United States also argues that Plaintiff sufficiently alleged discrimination based on race, color, or national origin by a federally assisted program or activity in support of its Title VI claim.
Aventurine One, LLC v. The City of Marshall (E.D. Tex.)
On December 21, 2023, the United States filed a Statement of Interest in Aventurine One, LLC v. The City of Marshall, Texas (E.D. Tex.), a case that includes claims brought under the Fair Housing Act (FHA), the United States Constitution, and state law. The complaint in this case alleges, in part, that the City of Marshall violated the FHA by denying a special use permit for the plaintiff’s proposed Low-Income Housing Tax Credit development based on discriminatory objections raised in public hearings. The City of Marshall moved to dismiss the plaintiff’s complaint. In its Statement of Interest, the United States explains that comments that do not directly reference a protected class may nevertheless be indicative of discriminatory animus, and clarifies that municipalities can be held liable under the FHA for capitulating to constituents’ discriminatory motives.
Consumer Financial Protection Bureau and United States v. Colony Ridge Development, LLC (S.D. Tex.)
On December 20, 2023, the United States and the Consumer Financial Protection Bureau jointly filed a complaint in Consumer Financial Protection Bureau v. Colony Ridge in S.D. Tex. The complaint alleges that Colony Ridge LLC and its affiliated companies violated the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA), as well as other consumer protection statutes, by operating an illegal land sales scheme targeting tens of thousands of Hispanic borrowers with false statements and predatory loans.
Statement of Interest in Chai Center for Living Judaism v. Township of Millburn (D.N.J.)
On December 4, 2023, the United States filed a Statement of Interest in Chai Center for Living Judaism v. Township of Millburn (D.N.J.), a case brought under the Religious Land Use and Institutionalized Persons Act (RLUIPA). After the township denied an Orthodox Jewish congregation’s application to build a synagogue on res judicata grounds, the congregation filed the complaint in this case, alleging that the denial imposed a substantial burden on the congregation’s religious exercise, discriminated against the congregation based on its religion, unreasonably limited its religious assembly, and treated it worse than comparable secular uses. The township filed a motion for judgment on the pleadings, arguing that the RLUIPA claims should be dismissed based on a state-law standard of review for zoning appeals and that the RLUIPA claims are not ripe because the zoning denial was based on procedural grounds. In its Statement of Interest, the United States explains that state-law standards of review do not apply to RLUIPA claims and that the RLUIPA claims are ready to be adjudicated because the township reached a final decision on the zoning application, which has harmed plaintiffs.
United States v. Isle of Paradise “B”, “C”, and “E”, Inc. (S.D. Fla.)
On January 8, 2024, the court entered consent decrees resolving the Department’s claims against each of the three defendants in United States v. Isle of Paradise "B", Inc., Isle of Paradise "C", Inc., and Isle of Paradise "E", Inc. (S.D. Fla.). The complaint in this Fair Housing Act pattern or practice lawsuit, which was filed on November 30, 2023, alleges that the defendants—nonprofit cooperative corporations that each own a residential building on an island known as Isle of Paradise in Hallandale Beach, Florida—discriminated on the basis of familial status in violation of the Fair Housing Act (FHA) by maintaining and/or enforcing a no-children-under-12 policy. The consent decrees require defendants to remove their no-children-under-12 policy (except that one defendant, Isle of Paradise “C”, Inc., can instead show that it is exempt as housing for older persons); to undergo other standard injunctive relief; and to pay a total of $52,000 in monetary relief, composed of $20,000 in damages to a mother and son who were turned away and $6,000 to their real estate agent, $13,000 in settlement funds, and $13,000 in civil penalties.
Hannah Magee Portee - Mike Morath (W.D. Tex.)
On November 20, 2023, the court granted the plaintiff’s motion for judgment on the pleadings and entered a final judgment in favor of the plaintiff in Portee v. Morath et al. in the Western District of Texas. This is the first case brought nationwide under a new Servicemembers Civil Relief Act’s (SCRA) provision that guarantees the portability of certain professional licenses held by U.S. servicemembers and their spouses when they relocate pursuant to military orders. In its order, the court held that Texas state licensing authorities violated the SCRA by refusing to recognize plaintiff’s out-of-state licenses because she had not used them continuously for the two years preceding her relocation to Texas. The judgment followed the court’s July 21, 2023 order granting the plaintiff’s motion for a preliminary injunction. The United States had filed a Statement of Interest on July 13, 2023, arguing that plaintiff was likely to succeed on the merits of her claim that her school counseling licenses are covered under the new provision, vigorous enforcement of the provision serves the public’s exceptionally strong interest in national defense and military readiness, and plaintiff had standing to bring her case.
St. Timothy’s Episcopal Church et al. v. City of Brookings (D.Or.)
On November 17, 2023, the United States filed a statement of interest in St. Timothy's Episcopal Church et al. v. City of Brookings (D.Or.), a private lawsuit brought under the Religious Land Use and Institutionalized Persons Act (RLUIPA). Plaintiffs’ lawsuit alleges that the City of Brookings, OR, violated RLUIPA when it sent a cease and desist letter to the Church regarding its serving of meals to the homeless and then revised its zoning code to require those serving meals to the homeless obtain a conditional use permit that limits such service to two days per week. The City sought summary judgment against the Church, contending that RLUIPA does not apply to its conduct, that it did not substantially burden the Church, and that it had a compelling interest in prohibiting the Church from providing food to those who are homeless. The United States’ Statement of Interest refutes those claims and argues that the Church has presented sufficient evidence to support its claim that the City’s conduct substantially burdened its religious exercise, in violation of RLUIPA.
Press Release (11/17/2023)