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Remarks as Prepared for Delivery by Assistant Attorney General for Civil Rights Thomas E. Perez at the National Fair Housing Policy Conference

July 20, 2010

New Orleans

Thank you, John. It’s a privilege to join so many committed advocates and activists to talk about fair housing enforcement in the Civil Rights Division and across the Obama Administration.

I had the good fortune to get to know and work closely with Secretary Shaun Donovan during the transition last year, and I have had the privilege of working with Assistant Secretary Trasviña.

Early on in my tenure at the Civil rights Division, I gave Secretary Donovan and Assistant Secretary Trasviña my commitment to work with them to rebuild and strengthen the relationship between the Department of Justice and HUD. We have entered a new era of unprecedented cooperation and collaboration between our agencies, so critical for effective and aggressive enforcement of our nation’s fair housing laws.

As you all know, a family’s access to housing determines far more than whether they have a roof over their heads. It determines access to good schools, to transportation, to jobs, to a range of opportunities. Those of us charged with enforcing fair housing laws have on our shoulders the weight of ensuring that housing discrimination does not leave any family out in the cold.

Unfortunately, like other pervasive forms of discrimination, housing discrimination persists; sometimes it is blatant. Other times it is subtle, even unintentional, but just as devastating.

When I was confirmed as the Assistant Attorney General in October, it was a return to the Justice Department for me. I actually first came to the Department as an intern in the Housing Section. And while I am honored to lead enforcement of our critical civil rights laws, it saddens me to see that the more things change, the more they stay the same. We continue to see the same kinds of discrimination today that we did more than two decades ago during my first stint in the Department – and no doubt the same kinds of discrimination that my predecessors saw when this nation’s civil rights battles were still on the front pages of our daily papers.

For example, we continue to see racial discrimination in the rental of apartments. We have resolved two cases with multi-million dollar settlements – the two largest ever obtained by the Department in fair housing cases alleging discrimination in rentals.

  • United States v. Sturdevant in Kansas, was a case we settled in February for $2.13 million. This case originated as a HUD election case involving retaliation against an employee at an apartment building in Kansas City. Through discovery we were able to uncover a pattern of racial harassment and intimidation of African-Americans by the building manager. The combined settlements with the building manager, owner, and management company will resolve claims on behalf of more than 40 current and former tenants.
  • In November 2009, we settled United States v. Sterling for $2.725 million, the largest monetary payment ever obtained by the Department of Justice in the settlement of a case alleging housing discrimination in the rental of apartments. The Sterling defendants’ pattern or practice of discrimination included systematically discriminating against African-American and Latino tenants and prospective tenants by refusing to rent to non-Korean prospective tenants, misrepresenting the availability of apartment units to non-Korean prospective tenants, and providing inferior treatment to non-Korean tenants in the Koreatown section of Los Angeles. The consent order also requires non-discriminatory practices and procedures, training and a self-testing program by defendants.

We continue to see racial steering, as with a recent case in Atlanta. Two real estate agencies and a former agent agreed to pay $160,000 to settle the Department’s allegations that they illegally steered prospective homebuyers toward and away from certain neighborhoods based on race and color. The lawsuit filed in this case was based on testing that was conducted by the National Fair Housing Alliance (NFHA) in 2003 and 2004 of Coldwell Banker Joe T. Lane Realty Inc., which revealed that an agent had intentionally steered white testers towards areas that are predominately white and away from areas that are predominately African-American.

According to the complaint, before showing the tester any homes, the agent told the tester that he did not know where to take the tester because he could not tell from talking on the telephone whether the tester was white. The agent said words to the effect that “I didn’t know if you were a Caucasian or not over the phone.” One tester documented that the agent told him five different times that “Blacks do not take good care of their home” and therefore discouraged him from moving into any area with a significant minority population. After an investigation, HUD found reasonable cause to believe that unlawful discrimination had occurred and referred the matter to the Justice Department.

As we ramp up enforcement, we are also taking a different approach to how we negotiate settlements. We have reversed a policy to insure that in our settlement agreements, unclaimed money from victims' funds goes, does not back to Defendants, but instead goes to community based organizations that work to further fair housing or fair lending. This will mean that not only victims, but also their communities, will benefit when we enforce the law.

These funds will help support critical partnerships with fair housing organizations around the country.

Another critical partnership for our fair housing work, meanwhile, arises from renewed efforts to work closely and collaboratively with HUD. Many of our cases arise from referrals from HUD.

Since January 2009, we have filed 49 Fair Housing Act cases, including 26 pattern or practice cases.

  • In many of our election cases where we received an election referral after HUD issued a charge, the combination of the HUD investigation and Housing Section work allowed us to add a pattern or practice claim and obtain relief for additional victims of discrimination.
    • One such case was U.S. v. Collier, (W.D. La.) an election referral in which we added a pattern or practice claim to this case that HUD charged. It involved an owner/manager couple who did not want homes in their housing complex sold to any African Americans and who interfered in the sale of the homes. The case went to trial and we are awaiting the Court’s verdict.

Additionally, we have brought significant enforcement actions against housing agencies, owners and managers on behalf of victims of sexual harassment. We are working with HUD to develop regulations regarding obligations to assure that residents are not subjected to sexual harassment in their housing complexes.

In a recently filed case, U.S. v. Gumbaytay, we alleged that Defendant Jamarlo K. Gumbaytay, who operates rental properties in the Montgomery, Alabama metropolitan area, violated the Fair Housing Act by sexually harassing numerous tenants over several years, including at least six female tenants since the filing of a private suit in 2007. The other proposed defendants own the properties that Gumbaytay managed. Failure to act on the part of the owners can subject the owners to vicarious liability for the repugnant acts of its agents.

Equal access to housing for individuals with disabilities is also a priority for the Division. As you know, we enforce the Americans with Disabilities Act, which will celebrate its 20th Anniversary on July 26th. The ADA and the Fair Housing Act are our primary tools to assure access for persons with Disabilities. It is in everybody’s interest to ensure that new multi-family housing is accessible from the outset. That is why we participate in conferences and provide technical assistance to industry and governments about ADA requirements. Twice a year we host a Multi-Family Access Forum to inform industry and advocates about FHA compliance.

Compliance in the beginning is just good business. It saves litigation, retrofit and victim compensation costs down the line. In a recent case, U.S. v. JPI Construction L.P. (JPI), we filed suit against JPI and six JPI-affiliated companies for failing to provide accessible features required by the Fair Housing Act and the ADA at multi-family housing developments in Texas and other states.

We have also recently litigated successfully cases involving the use of service animals and the need for reasonable accommodation of such requests when made. Many of those cases come to the Department through the HUD election process.

Throughout the Division, we are ramping up our amicus practice so that we can provide the Division’s expertise in a wide variety of cases. For example, in a recent significant case, Bloch v. Frischolz, we participated as amicus regarding the applicability of the FHA to post-acquisition discrimination. We argued that the trial court and the panel majority erred in holding that the Fair Housing Act did not apply to post-acquisition discrimination and that the family presented evidence suggesting that the condominium board changed the enforcement of its rules to bar the family’s mezuzah.

On November 13, 2009, the en banc Seventh Circuit Court of Appeals ordered the partial reinstatement the Jewish family’s suit against a condominium board.

The court found the plaintiffs’ claims of post-acquisition discrimination viable under both FHA provisions and ordered the trial court to determine whether defendants acted with discriminatory intent on remand.

Last week we filed an amicus brief in the DC Circuit in ERC v. Post Properties to make clear that fair housing groups who divert resources to combat discrimination they have discovered do meet Article III standing to sue. The Justice Department understands the importance of supporting the legal principle that fair housing groups have standing to sue.

We also filed an amicus brief in a service animal case in Ohio, FHRC v. DJM'S 4 Reasons, that was generated by work by two Ohio partners - testing conducted by the Fair Housing Center of Lake County, Ohio, and an investigation by the Fair Housing Counsel of Ohio.

The landlord repeatedly stated that he would not allow any animals at his property, regardless of whether the animals were service animals assisting persons with disabilities. The Center sued Murphy for violation of the Fair Housing Act. At trial, the court refused to give plaintiff’s requested instructions that the Act requires accommodation for disability, and instructed the jury that it could only find a violation of the Act if testers’ disabilities were a “motivating factor” in defendant’s conduct. The United States is weighing in to make clear that the court got the law wrong - that keeping people with disabilities from housing and failing to provide reasonable accommodations is illegal and unacceptable.

Meanwhile, we are also working closely with HUD to bring new meaning to the requirement that jurisdictions who receive HUD funds have an obligation to Affirmatively Further Fair Housing. This is a critical component of a comprehensive fair housing agenda, and we look forward to the issuance of the new HUD rule and are excited about the groundbreaking work HUD is doing in Westchester and the City of Joliet. This work will assure that HUD funds do more than merely provide housing units, but that they help promote greater opportunities for all people regardless of race, national origin, gender or disability.

Similarly, we look forward to working closely with HUD Regional Offices to generate Title VI referrals where HUD has concerns that the expenditures run afoul of their grantees’ Title VI obligations.

Another important tool in providing housing opportunities is our enforcement authority under the FHA to bring land use and zoning cases. These cases we receive either from HUD or we can initiate. We have taken a number of actions against local governments denying group homes for persons with disabilities. We are actively expanding our zoning/land use practice to look at race and national origin discrimination as well.

Finally, we know that fair lending violations can impact a family’s ability to acquire housing just as much as discrimination in housing. The housing crisis that sparked our current recession was largely driven by irresponsible and sometimes fraudulent lending practices. There were also cases of discriminatory lending that exacerbated the crisis in low income communities and communities of color.

We have established a dedicated fair lending unit root out lending discrimination in all forms. By attacking the various forms of lending discrimination, including pricing discrimination, steering, redlining and reverse redlining, we will assure that all communities have access to credit –the key to establishing and building wealth in our society.

We are working hand in glove with President Obama Financial Fraud Enforcement Task Force that AG Holder heads on this unprecedented collaborative effort.

The Civil Rights Division co-chairs the non-discrimination working group with HUD and the Federal Reserve, which is looking at discrimination not only in the mortgage process, but in access to credit in general. We are working with sister federal agencies, as well as our counterparts in state government, to hold discriminatory lenders accountable.

For example, earlier this year we announced a settlement with two subsidiaries of AIG, resolving allegations that the lenders engaged in a pattern or practice of discrimination against African American borrowers. The Division’s lawsuit alleged that the African American borrowers nationwide were charged higher fees on wholesale loans made by the lenders through contracted brokers. The $6.1 million settlement marked the largest fair lending settlement ever secured by the Department of Justice, and the case marked the first time the Department has held a lender accountable for failing to monitor brokers’ fees to ensure they are not charging discriminatory fees based on race.

In short, the Civil Rights Division is open for business across the board, and we have become a conspicuous presence in the fair housing and lending settings. Through our efforts and our partnerships with other federal agencies and state partners, we will continue to ramp up our enforcement to ensure that all Americans can access housing free of discrimination and have opportunities to live in communities of their choice - without it the promise of equal opportunity remains unfulfilled.

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Molly J. Moran
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