(updated May 1, 2013)
The Housing and Civil Enforcement Section of the Civil Rights Division is responsible for the Departments’ enforcement of the Fair Housing Act (FHA), along with the Equal Credit Opportunity Act, Title II of the Civil Rights Act of 1964, which prohibits discrimination in public accommodations, the land use provisions of the Religious Land Use and Institutionalized Persons Act (RLUIPA) and the Servicemembers Civil Relief Act (SCRA).
Under the FHA, the Department of Justice may bring lawsuits where there is reason to believe that a person or entity is engaged in a "pattern or practice" of discrimination or where a denial of rights to a group of persons raises an issue of general public importance. The Department of Justice also brings cases where a housing discrimination complaint has been investigated by the Department of Housing and Urban Development, HUD has issued a charge of discrimination, and one of the parties to the case has "elected" to go to federal court. In FHA cases, the Department can obtain injunctive relief, including affirmative requirements for training and policy changes, monetary damages and, in pattern or practice cases, civil penalties.
Several cases we have filed or resolved recently exemplify our efforts to ensure the availability of the housing opportunities guaranteed by the Fair Housing Act.
The complaints and settlement documents for the cases discussed in the text, as well as other cases handled by the Housing Section, can be found on the Housing Section’s website at www.justice.gov/crt/about/hce/caselist.php.
On April 1, 2013, the Division filed a statement of interest in Gomez v. Quicken Loans (C.D. Cal.), a case alleging that Quicken Loans discriminated against borrowers with disabilities by requiring that they provide a letter from a doctor as a condition of their loans. The Statement of Interest responds to defendant's claims that (1) Smith v. City of Jackson disallows disparate impact claims under the Fair Housing Act, (2) disparate treatment claims require proof of ill intent, and (3) Equal Credit Opportunity Act claims require a denial of credit.
On March 12, 2013, the court entered a consent order in United States v. Community State Bank (E.D. Mich.). The complaint, which was filed on January 15, 2013 and grew out of a referral from the FDIC, alleges that from 2006 to 2009, Community redlined majority-African-American census tracts in the Saginaw and Flint, Michigan metropolitan areas, including substantial portions of the City of Saginaw. Community is an eight-branch bank that is one of the five largest banks in Saginaw County, but has never operated a branch in the City of Saginaw and made only one loan in Saginaw's majority-African American census tracts during the four-year period. The consent order requires Community to open a loan production office in a majority-African-American neighborhood of the City of Saginaw and to fund a $75,000 loan subsidy program, a $75,000 community development partnership program, and a $15,000 advertising program to encourage and increase lending in the redlined tracts.
On March 5, 2013, the court entered a consent order in United States v. Texas Champion Bank (S.D. Tex.), an Equal Credit Opportunity Act case that was referred to the Department of Justice by the Federal Deposit Insurance Corporation. The complaint, filed on February 19, 2013, alleges that from 2006 to 2010, Texas Champion charged higher prices on unsecured consumer loans made to Hispanic borrowers than to similarly-situated non-Hispanic white borrowers through the bank's branch offices. The consent order requires Texas Champion to further revise the uniform rate matrices it uses to price unsecured consumer and other loans offered by the bank, in order to ensure that it sets its prices for its loans in a non-discriminatory manner. The settlement also requires the bank to pay $700,000 to Hispanic victims of discrimination, monitor its loans for potential disparities based on national origin, and provide equal credit opportunity training to its employees.
On December 19, 2012, the Division notified the court in United States v. Wells Fargo Bank (D.D.C.) that the bank will provide $59.3 million in compensation to African-American and Hispanic retail subprime borrowers. Under the consent order, entered on September 21, 2012, Wells Fargo agreed to undertake an internal review to determine whether there were African-American and/or Hispanic borrowers who received subprime Wells Fargo loans from the bank's retail channel who might have qualified for prime loans from the retail channel. The consent order provided that any borrowers identified pursuant to the review would be compensated in an amount commensurate with the amounts paid to borrowers who received subprime loans from the bank's wholesale division. As a result of its review, Wells Fargo identified nearly 4,000 retail subprime borrowers who are eligible for compensation. With the additional compensation to retail subprime borrowers, the Division's settlement with Wells Fargo totals $234.3 million. The complaint, filed on July 12, 2012, alleged that Wells Fargo engaged in a pattern or practice of discrimination against qualified African-American and Hispanic borrowers in its mortgage lending from 2004 through 2009. The complaint alleged that Wells Fargo discriminated by steering approximately 4,000 African-American and Hispanic wholesale borrowers, as well as additional retail borrowers, into subprime mortgages when non-Hispanic white borrowers with similar credit profiles received prime loans. All the borrowers who were allegedly discriminated against were qualified for Wells Fargo mortgage loans according to Well Fargo's own underwriting criteria. The United States also alleged that, between 2004 and 2009, Wells Fargo discriminated by charging approximately 30,000 African-American and Hispanic wholesale borrowers higher fees and rates than non-Hispanic white borrowers because of their race or national origin rather than the borrowers' credit worthiness or other objective criteria related to borrower risk. The consent order provided $125 million in compensation for wholesale borrowers who were allegedly steered into subprime mortgages or who allegedly paid higher fees and rates than white borrowers because of their race or national origin. Wells Fargo was also required to pay $50 million in direct down payment assistance to borrowers in communities around the country where the Department identified large numbers of discrimination victims and which were hard hit by the housing crisis.
On October 12, 2012, the court entered a consent order in United States v. Luther Burbank Savings (C.D. Cal.). The complaint alleges that from 2006 to 2011, Luther engaged in a pattern or practice of discrimination in its residential lending activities in violation of the Fair Housing Act and Equal Credit Opportunity Act. During that time period, Luther enforced a $400,000 minimum loan amount policy for its wholesale single-family residential mortgage loan program. The United States alleged that this policy or practice had a disparate impact on the basis of race and national origin. Under the settlement, Luther will invest $1.1 million in a special financing program to increase the residential mortgage credit that the bank extends to qualified borrowers seeking loans of $400,000 or less in California. The bank also will invest $450,000 in partnerships with community-based organizations that provide credit and financial services to minorities in the affected areas; spend $300,000 for outreach to potential customers and promotion of its products and services; spend $150,000 on consumer education programs; and conduct fair lending training for employees. Luther also is prohibited from establishing or implementing a loan amount policy similar to the prior $400,000 minimum loan amount policy.
On October 10, 2012, the court entered a consent order in United States v. Bank of America (W.D.N.C.). The complaint, which was filed on September 13, 2012, alleges that Bank of America violated the Fair Housing Act and the Equal Credit Opportunity Act by requiring mortgage applicants with disabilities to provide a letter from a doctor as a condition of credit. The settlement requires Bank of America to pay $1,000, $2,500 or $5,000 to eligible mortgage loan applicants who were asked to provide a letter from their doctor to document the income they received from Social Security Disability Insurance (SSDI). This lawsuit arose as a result of three complaints filed by loan applicants with the U.S. Department of Housing and Urban Development (HUD). The HUD complainants will receive a total of $125,000 in damages.
On September 14, 2012, the court entered a consent order in United States v. SunTrust Mortgage, Inc. (E.D. Va.). The complaint filed on May 31, 2012, alleges that from 2005 to 2009, SunTrust Mortgage discriminated against at least 20,000 African-American and Hispanic borrowers across the country by systematically charging higher discretionary broker fees and retail loan markups to those borrowers than to white borrowers in violation of the Fair Housing Act and Equal Credit Opportunity Act. The consent order provides for a $21 million settlement fund and for injunctive relief specifying that SunTrust Mortgage must maintain for at least three years specific improved pricing policies and fair lending monitoring that it has adopted since the conduct at issue in the complaint occurred.
On August 27, 2012, the court entered a consent order in United States v. GFI Mortgage Bankers, Inc. (S.D.N.Y.). The complaint, filed on April 2, 2012, alleged that GFI Mortgage Bankers, Inc. ("GFI") violated the Fair Housing Act and Equal Credit Opportunity Act by discriminating against African-American and Hispanic borrowers in the pricing of home-mortgage loans. Specifically, the United States alleges that from 2005 through at least 2009, GFI charged African-American and Hispanic borrowers significantly higher interest rates and fees than it charged to similarly-situated white borrowers for home loans, resulting in thousands of dollars in overcharges to minority borrowers because of race or national origin. The consent order requires the defendant to pay $3.5 million in compensation to approximately 600 African-American and Hispanic GFI borrowers identified by the United States as paying more for a loan based on their race or national origin, and it requires GFI to pay the maximum $55,000 civil penalty allowed by the Fair Housing Act. The settlement also requires GFI to develop and implement new policies that limit the pricing discretion of its loan officers, require documentation of loan pricing decisions, and monitor loan prices for race and national origin disparities not justified by objective borrower credit characteristics or loan features.
On December 28, 2011, the court entered a consent order in United States v. Countrywide Financial Corporation, Countrywide Home Loans and Countrywide Bank (C.D. Cal.), resolving the United States' claims of race, national origin and marital status discrimination in residential mortgage lending and providing $335 million in monetary relief for victims of discrimination. The claims in the United States' complaint, which was filed on December 21, 2011, are the largest pattern or practice lending discrimination violations of the Fair Housing Act and the Equal Credit Opportunity Act ever alleged by the Division. The United States' complaint alleges that from 2004 to 2008, Countrywide discriminated against more than 10,000 Hispanic and African-American borrowers across the country by systematically giving those borrowers subprime loans while similarly-situated white borrowers received prime loans. The complaint also alleges that Countrywide discriminated against more than 200,000 Hispanic and African-American borrowers by systematically charging higher discretionary fees and markups to those borrowers than to white borrowers. The complaint further alleges that the defendants discriminated on the basis of marital status by encouraging non-applicant spouses to forfeit their property rights as part of their spouse obtaining a Countrywide loan. The consent order provides that the $335 million settlement fund will be distributed to victims by an independent administrator, and that if Countrywide re-enters the business of home mortgage lending, it must adopt fair lending policies and procedures that will be subject to review by the Division.
On April 17, 2013, the court entered a consent order in United States v. Magee (S.D. Miss.). The complaint, filed on November 17, 2011, alleged that Marcus Magee III, Ina Magee, and M.M. and S., Inc. engaged in familial status discrimination in violation of the Fair Housing Act by refusing to rent a three-bedroom house to a single mother with four children because she had "too many children," and applying an occupancy policy that set a maximum number of children per rental. The consent order requires the defendants to pay $20,000 to a family that was harmed by defendants' discriminatory practices and $7,000 to the United States as a civil penalty.
• On April 5, 2013, the Division filed a complaint in United States v. Stonebridge (N.D. Tex.). The complaint alleges that the defendants, Stonebridge at Bear Creek, LLP, S & H Realty Management LLP, and Nancy Quandt - the owners, managers, and operators of Stonebridge at Bear Creek Apartments, have violated the Fair Housing Act by engaging in a multi-year campaign of denial of housing opportunities to persons of Middle Eastern and South Asian descent seeking to live at Stonebridge Apartments, and segregation of persons of Middle Eastern and South Asian descent who live at Stonebridge Apartments.
On December 27, 2012, the court entered a consent decree in United States v. French (E.D. Mich.). The complaint, filed on December 20, 2012, alleged that the defendants violated the Fair Housing Act on the basis of race and familial status by making statements to a married couple with seven minor children about their race and the number of small children. The consent decree requires the property manager who made the statements to attend fair housing training and requires the property owners and property manager to pay $12,500 in damages to the family.
On December 19, 2012, the Division filed a complaint in United States v. Clarendon Hill Towers (D. Mass.), alleging that Clarendon Hill Towers violated the Fair Housing Act by refusing to rent to a couple because they had three minor children.
On December 14, 2012, the United States Attorney's Office filed a complaint in United States v. Altoona Housing Authority (W.D. Pa), alleging that the housing authority discriminated on the basis of race by evicting an African-American tenant with less due process than was given to white tenants with similar or worse lease violations.
On December 13, 2012, the court entered a partial consent decree in United States v. Ambroselli (E.D. Wis.). The complaint, filed on November 13, 2012, alleges that the owners and property manager of a 10-unit apartment complex in Kewaskum, Wisconsin violated the Fair Housing Act on the basis of race and familial status by refusing to rent a two-bedroom unit to a married couple with three young children. The consent decree with two of the three defendants provides for $50,000 in damages and fair housing training.
On December 13, 2012, the court entered a consent order in United States v. Jensen (D. Minn.). The complaint, which was filed on September 25, 2012, alleges that the property manager of a mobile home park in Albert Lea, Minnesota violated the Fair Housing Act by making discriminatory statements to a woman about Mexicans during the rental application process. The consent order requires fair housing training and a $20,000 payment to the woman.
On December 6, 2012, the court entered a consent order in United States v. Landings Real Estate Group (D. Conn.). The complaint, which was filed on December 20, 2011, alleged that the owners and managers of a 156-unit rental property discriminated on the basis of familial status by refusing to rent a two-bedroom apartment to a mother and her four children. The consent order requires defendants to pay $40,000 in damages and requires that they not maintain or enforce an occupancy policy at the property that is more restrictive than the applicable local code.
On October 16, 2012, the court entered a consent decree in United States v. Loventhal Silver Riverdale LLC (S.D.N.Y.). The amended complaint, filed on January 27, 2012, alleged that Loventhal Silver Riverdale LLC, Goodman Management Company, and Jesus Velasco, the owners and managers of a 72-unit rental building located in the Riverdale area of the Bronx, engaged in a pattern or practice of rental discrimination based on race and color. The complaint alleged that defendants misrepresented the availability of apartments, quoted higher prices, failed to provide rental applications, and failed to show apartments to African American testers while similarly situated white testers were told about apartments, shown apartments, provided application, and quoted lower prices. The allegations were based on testing conducted by the Fair Housing Justice Center. Under the terms of the consent decree, defendants will establish a $30,000 fund to compensate victims of discrimination, and will pay a $40,000 civil penalty.
On October 9, 2012, the Division filed a complaint in United States v. Townhomes of Kings Lake HOA (M.D. Fla.), alleging that the homeowners association and property manager of a townhome community in Gibsonton, Florida discriminated against families with children, in violation of the Fair Housing Act, by maintaining and enforcing an unlawful occupancy limit policy.
On September 25, 2012, the Division filed a complaint in United States v. Cochran (E.D.N.C.) alleging that the manager of approximately 24 single-family rental properties in Washington, North Carolina, engaged in a pattern or practice of discriminating against African-American tenants, including by refusing maintenance on dilapidated properties, verbally harassing tenants with racial slurs and epithets, making other discriminatory statements, and retaliating against tenants who requested maintenance or otherwise resisted the discriminatory housing practices. The complaint alleges that the manager's conduct violated the Fair Housing Act and alleges that the corporate owners of the properties are liable for the manager's conduct.
On September 7, 2012, the United States filed a complaint in United States v. Lawrence Properties, Inc., et al. (M.D. Ala.) against the owner and operator of the Heritage Point mobile home park in Montgomery, Ala., alleging that the companies and their employees or officers discriminated against African-Americans.
On August 29, 2012, the court entered a consent decree in United States v. McCoy (E.D. Wis.), a Fair Housing Act election case which was referred to the Division by the Department of Housing and Urban Development (HUD). The amended complaint, which was filed on October 3, 2011, alleged that Kenneth McCoy, the owner of five single-family rental properties in Green Bay, Wisconsin, discriminated on the basis of race (African-American) and familial status by refusing to rent a single-family rental property to two HUD complainants. The consent decree includes a payment of $35,000 to the complainants and injunctive relief.
On August 13, 2012, the court entered a consent order in United States v. Altman (D. S.C.), requiring the owner and operator of a 16-unit apartment complex to pay $15,000 in monetary damages to two aggrieved persons and $10,000 in a civil penalty to the United States. The complaint, filed on September 21, 2011, alleged that John Wingard Altman maintained a policy or practice of discouraging families with children from living in the apartment complex he owns in Summerville, S.C. This case was developed by the Section's Fair Housing Testing Program.
On July 27, 2012, the court entered the final partial consent decree in United States & Willborn v. Sabbia, et al. (N.D. Ill.), a Fair Housing Act case. The complaint, filed on September 20, 2010, alleges that the owners, listing agent and listing broker of a five-bedroom, 8,000 square foot single-family home in Chicago, Illinois discriminated on the basis of race (African-American), in violation of 42 U.S.C. §§ 3604(a), 3605 and 3617, by refusing to sell the home to radio and TV personality George Willborn and his wife and their two children. On November 9, 2011, the court entered a partial consent decree with the listing agent and listing broker, requiring the payment of $30,000 to the Willborns' real estate agent, Dylcia Cornelious, fair housing training and the ability of the United States to conduct compliance testing; the Willborns entered into a confidential settlement with the same defendants in a related case. In the final partial consent decree with the homeowner defendants, Ms. Cornelious will receive $6,000. The Willborns have entered into another separate confidential settlement.
On May 24, 2012, the court entered a settlement agreement in United States v. Richardson (N.D. Ohio), a Fair Housing Act election case. The complaint, filed on September 30, 2011, alleged that defendants Ryan Richardson and Ryan Smith conducted a campaign of racial harassment against their neighbors, and their four minor children. The decree requires the defendants to: pay $10,000 to the family and $3,000 to the Toledo Fair Housing Center; issue written apologies to the complainants; submit retractions to police, child welfare authorities, animal welfare organizations, professional organizations, and neighbors of all the complaints they filed against the complainants; be enjoined from contacting them, their children, or any members of their immediate families, including through social media such as Facebook; and attend fair housing training. The decree has a five-year term.
On March 3, 2010, the court entered a consent order in United States v. Latvian Tower Condominium Association, Inc. (D. Neb.), a Fair Housing Act case alleging discrimination against families with children. The consent order provides a total of $77,500 in monetary relief to the plaintiff-intervenors, $35,000 for other aggrieved victims, $15,500 in civil penalty and standard injunctive relief.
On April 30, 2012, the court entered a consent order in United States v. Mortgage Guaranty Insurance Corporation (MGIC) (W.D. Pa.). The complaint, filed on July 5, 2011, alleged that MGIC violated the Fair Housing Act by requiring women on maternity leave to physically return to work before approving their applications for mortgage insurance. The settlement creates a $511,250 fund to compensate victims, including $42,500 for the HUD complainant and $468,750 to 69 additional aggrieved persons identified through the Division's review of applications MGIC underwrote between July 2007 and September 2010, and a $38,750 civil penalty to the United States. It also sets out detailed provisions that MGIC must follow in underwriting future applications involving paid or unpaid maternity or paternity leave.
On April 19, 2013, the court entered a consent order in United States v. Ferrante (D. Me.). The complaint, filed on January 14, 2013, alleges that Rudy Ferrante sexually harassed female tenants in Portland, Maine, in violation of the Fair Housing Act. The consent order imposes a $15,000 civil penalty against Ferrante, enjoins him from further acts of discrimination, requires him to undergo fair housing training, and requires him to provide a copy of the order to his employers.
On September 13, 2012, the court entered a consent decree in Hawecker and United States v. Sorensen (E.D. Cal.). The United States' complaint, which was filed on March 25, 2011, alleged that the defendant sexually harassed female tenants by making unwelcome sexual comments and advances, exposing his genitals, touching tenants without their consent, granting and denying housing benefits based on sex and taking adverse actions against women who refused his sexual advances. The defendant has operated his rental business for more than 30 years. The consent decree will result in a judgment against Sorensen requiring him to pay $2,075,000 in monetary damages to 25 individuals identified by the United States as victims of his discriminatory conduct. That amount includes court costs and attorneys' fees for two of the victims who are private plaintiffs. In addition, Sorensen must also pay a $55,000 civil penalty to the United States, the maximum penalty available under the Fair Housing Act. The consent decree requires Sorensen to hire an independent manager to manage his rental properties and imposes strict limits on his ability to have contact with current and future tenants. This represents the largest monetary settlement ever agreed to in a sexual harassment lawsuit brought by the Justice Department under the Fair Housing Act.
On August 27, 2012, the court entered a consent decree in United States v. Lowrey Hotel & Café, LLC, et al. (W.D. Wis.), a Fair Housing Act case alleging that the former manager of a residential hotel in Richmond, Wisconsin, sexually harassed a homeless woman who sought temporary residence there. The complaint, filed on November 23, 2011, also alleged that the co-manager and owner of the hotel warned the homeless woman that the manager might ask for sexual favors but failed to take reasonable steps to prevent it. Under the settlement, the defendants will pay the complainant $50,000 in damages. The former manager who committed the violations is permanently enjoined from entering the premises at the Lowrey Hotel & Café.
On July 18, 2012, the court entered a consent judgment in United States v. Bailey (S.D. Ohio), a Fair Housing Act sexual harassment case. The complaint, filed on January 31, 2011, alleged that Henry Bailey, the owner and manager of several buildings in the Cincinnati, Ohio area, engaged in a pattern or practice of sexually harassing female tenants by, inter alia, making unwanted sexual advances and engaging in unwanted sexual touching. Under the consent judgment, Mr. Bailey admitted to liability and has agreed to a monetary judgment of $800,000 in damages to compensate fourteen victims and a $55,000 civil penalty. Mr. Bailey is also permanently enjoined from participating in the management of any rental properties in the future.
On May 9, 2012, the court entered a consent decree in United States v. Barnason, et al. (S.D.N.Y.). The complaint, filed on April 20, 2010, alleged that the managers and owner of three residential apartment buildings in Manhattan engaged in a pattern or practice of sexual harassment of female tenants in violation of Fair Housing Act. Defendant Barnason is a Level 3 sex offender who was hired after being released from prison for various sexual offenses. Pursuant to the consent decree, the defendants will pay a $55,000 civil penalty to the United States and more than $2 million in damages to six victims. Also under the decree, the building manager who engaged in the most severe of the harassing conduct is permanently enjoined from having any involvement in the management or maintenance of occupied rental housing property.
On April 19, 2013, the court granted the United States' motion for partial summary judgment and ruled that the University's student housing, including apartments and traditional dormitories, are dwellings covered by the Fair Housing Act in United States v. Univ. of Nebraska (D. Neb.). The complaint, filed on November 23, 2011, alleges that the University of Nebraska at Kearney violated the Fair Housing Act on the basis of disability by denying a reasonable accommodation request by a student with a mental disability to live with her emotional support animal in off-campus student apartments. The University had argued that student housing is not covered by the Fair Housing Act.
On March 27, 2013, the court entered a consent decree in United States v. Croom (D. N.M.). The complaint, filed on November 2, 2012, alleged that the owner of four single-family houses and a four-plex in Albuquerque, New Mexico violated the Fair Housing Act by refusing to allow a tenant who uses a wheelchair to make certain reasonable modifications to the rental house at his own expense and by retaliating against him by terminating his lease. The consent decree requires a payment of $200,000 to Mr. Scott and contains various training and reporting provisions.
On November 15, 2012, the Division filed a complaint in United States v. Rosewood Park, LLC (D. Nev.), alleging that the owners and managers of a 902-unit apartment complex in Reno, Nevada violated the Fair Housing Act when they instituted and enforced discriminatory policies with respect to assistance animals.
On November 10, 2012, the court entered a settlement agreement in United States v. Woodbury Gardens Redevelopment Co. Owners Corp. (E.D.N.Y.). The complaint, filed on February 14, 2012, alleged that a housing cooperative for senior adults in Woodbury, New York refused to allow a bed-ridden woman with depression, anxiety, severe pulmonary hypertension, cirrhosis and diabetes to keep an emotional support animal during the last year of her life, and then, after she died, threatened to evict her husband if he did not pay fines related to the dog. The settlement agreement requires the defendant to pay the husband $58,750 in damages, adopt an assistance animal policy, attend fair housing training and comply with reporting and record keeping requirements.
On November 1, 2012, the United States Attorney's Office filed a complaint in United States v. Rockford Villa (D. Minn.), alleging that owners and managers of a 24-unit apartment building in Rockford, Minnesota violated the Fair Housing Act by rejecting a tenant's request to live with an assistance dog in a second-floor unit and then refusing to renew her lease.
On October 10, 2012, the court entered a consent order in United States v. Philadelphian Owner's Association (E.D. Pa.). The complaint, filed on September 28, 2012, alleged that the Philadelphian Owners' Association (POA), a condominium association that manages a 776 unit condominium complex in Philadelphia, violated the Fair Housing Act by denying complainant Michele Stewart, a resident with a psychiatric disability, a reasonable accommodation for an emotional support animal and by having and implementing a no-pets policy limiting the use of assistance animals in the complex. The consent decree requires the POA to pay Ms. Stewart $15,000 in monetary damages, establish a $15,000 Settlement Fund for additional potential aggrieved persons, and pay a $10,000 civil penalty. The decree also requires the POA to adopt a reasonable accommodation policy, have its members undergo education and training and imposes reporting and record-keeping requirements.
"Design and Construction" Cases:
On April 24, 2013, the court entered a partial consent decree in United States v. 2 Gold, LLC (S.D.N.Y.). The complaint, filed on April 23, 2013 by the United States Attorney's Office, alleged that the defendants failed to design and construct 2 Gold Street, a residential apartment complex in New York, New York, in compliance with the Fair Housing Act. The decree resolves the litigation with respect to the developers and builders, but not the designers (architects). The decree provides for the retrofitting of public and common-use areas and dwelling units, payments of $150,000 - $300,000 to aggrieved persons and a $35,000 civil penalty.
On April 23, 2013, the United States Attorney's Office filed a complaint in United States v. John Buck Co. (S.D.N.Y.). This is a design and construction case against the developers and architects of River East, a residential apartment complex in New York, New York. Defendant River East Apartments Investors, LLC, subsequent purchaser and current owner of River East, was named as a necessary party for the purpose of effectuating complete relief.
On June 25, 2012, the court entered a consent order in United States v. JPI Construction, LP (N.D. Tex.). The complaint, filed on March 4, 2009, alleged that the defendants designed and constructed multifamily housing in violation of the Fair Housing Act and the Americans with Disabilities Act. The consent order requires the defendants to pay $10.25 million to establish an accessibility fund to increase the stock of accessible housing in the communities where defendants' properties are located, including providing retrofits at defendants' properties. It is the Division's largest ever disability-based housing discrimination settlement fund. The defendants are also required to pay a $250,000 civil penalty and, in the event they reenter the multifamily development or construction business, to construct all future housing in compliance with the FHA and ADA and comply with training and reporting requirements.
On May 25, 2012, the court entered a consent decree in United States v. 475 Ninth Avenue Associates, LLC (S.D.N.Y.), a Fair Housing Act pattern or practice design and construction case alleging discrimination on the basis of disability. The complaint, filed together with the consent decree by the United States Attorney's Office on May 25, 2012, alleges that the defendants failed to design and construct Hudson Crossing, a 259-unit apartment building in New York City, in compliance with the Fair Housing Act's accessibility guidelines. The decree provides injunctive relief and requires retrofits of certain noncompliant features in the public and common-use areas and within the dwellings. The decree requires the defendants to pay up to $115,000 to compensate persons aggrieved by the alleged discriminatory housing practices at Hudson Crossing, with unspent monies to be distributed to a qualified organization conducting fair housing enforcement-related activities in New York City. The decree also contains a $20,000 civil penalty.
Discriminatory Land Use and Zoning Practices
On December 19, 2012, the court entered a consent decree in United States v. Sussex County (D. Del.). The complaint, filed on November 28, 2012, alleged that the County violated the Fair Housing Act when it denied preliminary plat approval for a proposed 50-lot subdivision of single-family homes for low-income persons in a rural, predominantly white area of the County. The consent decree requires the County to pay the developer $750,000 in damages and allow the proposed low-income housing development to proceed through the land use approval process. It also requires the County to obtain training, develop fair housing policies and an Affirmative and Fair Housing Marketing Plan and designate a Fair Housing Compliance Officer.
On November 9, 2012, the Division filed a complaint in United States v. City of San Jacinto (C.D. Cal.), alleging that the City violated the Fair Housing Act and the Americans with Disabilities Act. The complaint alleges that San Jacinto amended and applied its zoning code with the intention and effect of excluding unlicensed and some licensed group homes for persons with disabilities from single and two-family residential zones and unreasonably restricting them in multifamily zones. The complaint further alleges that the city targeted group homes for persons with mental disabilities for enforcement actions and improperly denied group home providers' reasonable accommodation requests.
On October 19, 2012, the Division filed an amended complaint in United States v. City of New Orleans (E.D. La.), alleging that the City violated the Fair Housing Act and Title II of the Americans with Disabilities Act by interfering with the conversion of a former nursing home into permanent supportive housing for persons with disabilities. The amended complaint adds the Louisiana State Bond Commission as a defendant in the case.
On September 27, 2012, trial began in Joliet v. New West (N.D. Ill.). This case, a condemnation action against Evergreen Terrace, a HUD-subsidized affordable housing complex, has been consolidated with the Division's own affirmative lawsuit against Joliet, which alleges that the City's effort to condemn Evergreen Terrace is discriminatory on the basis of race in violation of the Fair Housing Act and the Community Development Act of 1974.
On August 2, 2012, the court entered a consent order in United States v. City of Santa Rosa (N.D. Cal.). The complaint, which was filed on November 21, 2011, alleged that the city of Santa Rosa, Calif., and La Esplanada Unit 1 Owners' Association, a homeowners' association, unlawfully sought to restrict residency at a housing development to seniors aged 55 and older. While the law allows an exemption for senior housing, the suit alleged that neither the city nor the homeowners' association took the steps, such as routine age-verification, necessary to qualify for an exemption to the Fair Housing Act. Under the consent order, the city of Santa Rosa will not take any enforcement action against the housing development to force it to exclude families with children, and will waive the estimated $12,500 in costs associated with any zoning changes that may be necessary to bring the city's regulation of the property into compliance with federal law. In addition, the homeowners' association will provide compensatory damages to the aggrieved persons in an amount of $44,000 by providing a set-off to amounts it has claimed it is owed by the aggrieved persons. The homeowners' association and the city will also pay $5,000 each to the United States as a civil penalty.
On June 21, 2012, the United States filed a complaint in United States v. Colorado City (D. Ariz.) against the town of Colorado City, Ariz.; the City of Hildale, Utah; Twin City Water Authority; and Twin City Power, alleging a pattern or practice of police misconduct and violations of federal civil rights laws. The adjoining towns of Colorado City and Hildale are located on the border of Arizona and Utah and are populated primarily by members of the Fundamentalist Church of Jesus Christ of Latter-day Saints (FLDS). The FLDS is not affiliated with the Church of Jesus Christ of Latter-day Saints. The complaint alleges discrimination based on religion in violation of the Fair Housing Act, the Violent Crime Control and Law Enforcement Act, and Title III of the Civil Rights Act of 1964. This is the first lawsuit by the Justice Department to include claims under both the Fair Housing Act and the Violent Crime Control and Law Enforcement Act. The complaint alleges that the cities, their joint police department and local utility providers under the cities' control have allowed the FLDS Church to improperly influence the provision of policing services, utility services and access to housing and public facilities, and that this improper influence has led to discriminatory treatment against non-FLDS residents.
In addition to these and the many other cases that we bring to ensure fair housing opportunities, the Division also is involved in ongoing efforts to educate the public and various entities involved in the housing industry about their rights and responsibilities under the Fair Housing Act. On April 30, 2013, we issued a Joint Statement on the Accessibility (Design and Construction) Requirements for Multifamily Dwellings under the Fair Housing Act with the Department of Housing and Urban Development. The joint statement, issued in the form of questions and answers, supplements previously-issued guidance and is designed to help design professionals, developers and builders better understand their obligations and help persons with disabilities better understand their rights regarding the "design and construction" requirements of the federal Fair Housing Act. The guidance is available online at http://www.justice.gov/crt/about/hce/documents/jointstatement_accessibility_4-30-13.pdf.
On March 5, 2008, we issued a Joint Statement on Reasonable Modifications under the Fair Housing Act with the Department of Housing and Urban Development. The joint statement provides technical assistance, in a series of questions and answers, regarding the rights and obligations of persons with disabilities and housing providers relating to reasonable modifications, and is available online at http://www.justice.gov/crt/about/hce/documents/reasonable_modifications_mar08.pdf.
In 2004, we issued a Joint Statement on Reasonable Accommodations with HUD, providing technical assistance relating to reasonable accommodations under the Fair Housing Act. It is available online at http://www.justice.gov/crt/about/hce/jointstatement_ra.pdf.
Since 2005, we have held Multi-Family Housing Access Forums, intended to assist developers, architects and others understand the FHA’s accessibility requirements, and to promote a dialogue between the developers of multi-family housing and persons with disabilities and their advocates.We have held events in Houston, TX; Chantilly, VA; Dallas, TX; Atlanta, GA; Phoenix, AZ; Minneapolis, MN; Miami, FL; Seattle, WA; Philadelphia, PA; Kansas City, MO; Boston, MA; and Memphis, TN. For more information, see http://www.justice.gov/crt/about/hce/access_forum.php.
Public Accommodations (Title II)
On September 20, 2012, the Bankruptcy Court approved the stipulated settlement agreement resolving United States v. Valley Club of Huntingdon Valley, Inc. (E.D. Pa.). The complaint, filed in the District Court for the Eastern District of Pennsylvania in 2010, alleged race discrimination under Title II of the Civil Rights Act of 1964. The Division filed its complaint following an incident at the Valley Club in June 2009. Creative Steps, Inc., a Northeast Philadelphia children's day camp, had paid the club a fee to give its campers access to the club's swimming pool for the summer. On the first and only day they swam, some of the children reported hearing racial slurs while at the pool. Shortly thereafter, the club refunded the day camp's membership fee and prohibited the children from returning to swim. The settlement agreement stipulates that once the administration of the Estate and the bankruptcy case are closed and allowed costs and fees are paid, the remaining assets will be paid to more than 60 children, their camp counselors and to Creative Steps. The settlement also provides that $65,000 will be set aside from the proceeds of the sale of the Valley Club property for the creation of a Leadership Council that comprises former Valley Club members, Creative Steps counselors, campers and their families. The children and families affected by the Valley Club incident will take leadership roles in planning swimming, educational and recreational opportunities for the community.
Religious Land Use and Institutionalized Persons Act (RLUIPA)
On Mrach 8, 2013, the court approved an agreed order in United States v. City of Lomita (C.D. Cal.). The complaint, filed on February 1, 2013, alleged that the city violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) when it denied the Islamic Center of the South Bay's application to tear down the aging and scattered structures on its property and construct a new mosque. The denial is alleged to have created a substantial burden on the religious exercise of the Islamic Center and its members in violation of RLUIPA. The agreed order requires the city to consider a renewed application by the Islamic Center on an expedited schedule contained in a separate agreement between the city and the Islamic Center that was filed as an attachment to the Division's proposed agreed order. The settlement also contains recordkeeping, reporting, and training requirements for city officials.
On July 18, 2012, the United States filed a complaint and motion for a temporary restraining order in United States v. Rutherford County, Tennessee (M.D. Tenn.), alleging that the county violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) when, in compliance with a state chancery court ruling, it refused to process or issue a certificate of occupancy to the Islamic Center of Murfreesboro for a recently constructed mosque. The same day, the court issued a temporary restraining order requiring the county to immediately conduct an inspection of the mosque, to inform the Islamic Center of any deficiencies and to issue a certificate of occupancy once all deficiencies have been corrected by the Islamic Center, notwithstanding the chancery court orders. The complaint stated that a certificate of occupancy was needed immediately so that the Islamic Center could hold worship services at the new facility during the Islamic holy month of Ramadan, which began at sundown on July 19. The certificate of occupancy has now been granted, and the mosque is operating.
On May 25, 2012, the Division filed a statement of interest in O Centro Espirita Beneficente Uniao do Vegetal (UDV-USA), et al. v. Board of County Commissioners of Santa Fe County (D. N.M.). In this case, plaintiffs allege that defendant unlawfully denied their application to build a temple in Santa Fe County on land that is religiously significant to members and where they had conducted religious services for 14 years, in violation of the Religious Land Use and Institutionalized Persons Act and other constitutional and statutory provisions. Defendant filed a motion to dismiss plaintiffs' complaint, arguing in part that plaintiffs had not stated a claim under RLUIPA. The statement of interest filed by the United States opposes defendant's motion, and argues that plaintiffs have stated a claim under RLUIPA's substantial burden, equal terms, and non-discrimination provisions.
Servicemembers Civil Relief Act (SCRA)
On February 14, 2013, the court issued a final judgment in favor of the United States in United States v. Occoquan Forest Drive, LLC (ED Va.). The complaint, which was filed on May 21, 2012, alleged that the owners of a single-family home in Manassas, Virginia violated the Servicemembers Civil Relief Act by refusing to return a $2,450 security deposit and imposing over $5,000 in unjustified charges on Major John M. Thomas when he tried to terminate his lease. Major Thomas was serving at the Pentagon as Deputy Chief in the Operational and Export Policy Division when he received permanent change of station orders to serve as Assistant Director of Operations at Creech Air Force Base in Nevada. The court ordered the defendant to refrain from imposing any early termination charges and to return the $2,450 security deposit. The opinion stated that defendants' withholding of the security deposit, attempts to charge additional rent and allegations of property damage amounted to an "early termination charge in violation of the SCRA." The court also looked to Fair Housing Act law to conclude that the complaint stated a cause of action against both the individual property manager and his limited liability corporation.
On December 21, 2012, the court entered an amended consent order in United States v. Capital One, N.A. (E.D. Va.), settling a lawsuit which alleged the defendants violated the Servicemembers Civil Relief Act (SCRA). The defendant has agreed to pay approximately $12 million to resolve the matter. The settlement covers a range of conduct that violated the protections guaranteed servicemembers by the SCRA, including wrongful foreclosures, improper repossessions of motor vehicles, wrongful court judgments, improper denials of the 6 percent interest rate the SCRA guarantees to servicemembers on some credit card and car loans, and insufficient 6 percent benefits granted on credit cards, car loans and other types of accounts. The agreement requires Capital One to pay approximately $7 million in damages to servicemembers for SCRA violations, including at least $125,000 in compensation plus compensation for any lost equity (with interest) to each servicemember whose home was unlawfully foreclosed upon, and at least $10,000 in compensation plus compensation for any lost equity (with interest) to each servicemember whose motor vehicle was unlawfully repossessed. In addition, the agreement requires Capital One to create a $5 million fund to compensate servicemembers who did not receive the appropriate amount of SCRA benefits on their credit card accounts, motor vehicle finance loans, and consumer loans. The approximately $3 that remained after payments to servicemembers were made were donated by Capital One military emergency relief socieites. The consent order, which was filed simultaneously with the complaint on July 26, 2012, is one of the most comprehensive SCRA settlements ever obtained by a government agency or any private party under the SCRA.
On May 2, 2012, the court entered a consent order in United States v. B.C. Enterprises, Inc. ("Aristocrat") (E.D. Va.). The complaint, which was filed on December 10, 2008, and amended on November 2, 2009, alleged that a towing company in Norfolk, Virginia towed and sold a Navy Lieutenant's car without a court order, in violation of the SCRA. The complaint also alleged that the defendants may have towed and sold at least twenty servicemembers' cars without court orders. Pursuant to the consent order, the defendants must pay $75,000 in damages and repair the credit of the aggrieved servicemembers. On November 6, 2009, the court issued an order on summary judgment resolving "a question of first impression" by adopting the United States' position that Section 537 of the SCRA is a strict liability statute and finding that servicemembers need not notify towing companies of their active duty status in order to benefit from the SCRA's protections. This matter was referred to the Department of Justice by the United States Navy.
On April 4, 2012, the court entered the five proposed consent orders in United States v. Bank of America Corp., Citibank, NA, JPMorgan Chase & Co., Ally Financial, Inc. and Wells Fargo & Co. (D.D.C.). Under the consent orders, the nation's five largest mortgage loan servicers will conduct reviews to determine whether any servicemembers have been foreclosed on either judicially or non-judicially in violation of the SCRA since 2006, and whether servicemembers have been unlawfully charged interest in excess of six percent on their mortgages since 2008. As a result of these settlements, when combined with the Division's settlements with Bank of America and Saxon covering non-judicial foreclosures filed in 2011, the vast majority of all foreclosures against servicemembers will be subject to court-ordered review. Foreclosure victims identified through these reviews will be compensated a minimum of $116,785 each plus any lost equity with interest, and victims of violations of the SCRA'sSCRA's six percent interest rate cap identified through these reviews will be compensated by the amount wrongfully charged in excess of six percent, plus triple the amount refunded, or $500, whichever is larger. These agreements were incorporated into an historic mortgage servicer settlement between the United States and 49 state attorneys general and these five servicers, which provides for $25 billion in relief based on the servicers' illegal mortgage loan servicing practices. The financial compensation to servicemembers is in addition to the $25 billion settlement. All five servicers agreed to numerous other measures, including SCRA training for employees and agents and developing SCRA policies and procedures to ensure compliance with the SCRA in the future. The servicers will also repair any negative credit report entries related to the allegedly wrongful foreclosures and will not pursue any remaining amounts owed under the mortgages.