UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
UNITED STATES OF AMERICA,
v. Civil Action No. 01-C-0167
RSC DEVELOPMENT GROUP, INC.,
et al. Judge Lefkow
MEMORANDUM IN SUPPORT OF UNITED STATES' MOTION
FOR CIVIL CONTEMPT AND SUPPLEMENTAL RELIEF
PATRICK J. FITZGERALD
Assistant United States Attorney
R. ALEXANDER ACOSTA
STEVEN H. ROSENBAUM
The United States has moved for an order adjudging the defendants to be in civil contempt for their refusal to comply with the Consent Decree entered in this case on May 13, 2002. See Attmt. A. That Decree resolved allegations that the defendants had designed and constructed the Hunt Club Condominiums ("Hunt Club") in St. Charles, Illinois without the features of accessible design required under Section 804(f)(3)(C) of the Fair Housing Act, 42 U.S.C. § 3604(f)(3)(C) ("the Act"). As we explain below, the defendants have failed to comply with the injunctive provisions of that Decree which required them inter alia to do the following: (1) complete certain modifications to the public use and common areas of Hunt Club to make those areas accessible to persons with disabilities, as specified in Section II A of the Decree; (2) contribute $95,000 over four years to a retrofit fund for owners of individual dwelling units as specified in Section IV of the Decree; (3) provide training for their agents and employees regarding compliance with the Decree and the Fair Housing Act as specified in Section VI of the Decree; and (4) provide periodic compliance reports as specified in Section VIII of the Decree. Defendants' failure to comply with the Decree is unjustified, and this Court may properly adjudge them to be in civil contempt and order appropriate relief.II. BACKGROUND
- The Complaint
On January 9, 2001, the United States filed its Complaint alleging violations of the Fair Housing Act. Specifically, the United States' Complaint alleged that the defendants had engaged in a pattern or practice of discrimination and a denial or rights to a group of persons by failing to design and construct Hunt Club with the features of accessible design set forth in 42 U.S.C. § 3604(f)(3)(C). U.S. Cpt., ¶ 21. Hunt Club consists of eighty-six condominium units located in two, elevator buildings of forty-three units each with each building having its own common room. Consent Decree, p. 1. Defendants completed construction of all forty-three units in the first building ("building one") pursuant to the original plans for that building and completed construction of the second building ("building two") pursuant to plans revised after the United States notified them of the alleged statutory violations in building one. Id. at 1-.
Hunt Club is a "covered multi-family dwelling" within the meaning of the Act, 42 U.S.C. § 3604(f)(7)(A). Consent Decree, p. 2. The Act requires that such a dwelling include certain basic accessibility and adaptability design requirements. See 42 U.S.C. § 3604(f)(3)(C). The United States alleged that, as originally designed, none of the eighty-six units at Hunt Club fully complied with those requirements. Id. at 2. All of the forty-three completed units in building one were constructed pursuant to the original designs. Id. The United States alleged that the common and public use areas and the individual units in building one, as designed and constructed, did not fully comply with the requirements of 42 U.S.C. § 3604(f)(3)(C). U.S. Cpt., ¶ 19. The United States further alleged that units within building two at Hunt Club failed to contain an accessible route into and out of the dwellings as required under 42 U.S.C. §3604(f)(3)(C)(iii)(I). Id.
- The Consent Decree
On May 13, 2002, this Court entered a Consent Decree resolving the allegations raised by the United States. (1) Section I of the Decree enjoined the defendants from discriminating in housing on the basis of disability, including prohibiting them from designing and constructing inaccessible multifamily dwellings (Section I, C). Section II of the Decree provided for "corrective actions" to address the noncompliant features of the public use and common areas and the individual units at Hunt Club. Section II, A specifically addressed remedies for the public use and common areas and required the defendants to complete the two retrofits specified in Appendix A to the Decree within one year of the effective date of the Consent Decree. Consent Decree, p. 5. Those retrofits were:
- Remove step into storage area in garage level of Building One. This shall be accomplished by removing the existing step and regrading the entrance into the storage area in the garage level of building one; and
- Improve accessibility to patio from the common rooms in Buildings One and Two by reducing the sill threshold to the patio.This may be accomplished by cutting the sill to make it level with the outside patio deck; installing aluminum flashing over the sill and using a high quality sealant between the flashing and deck; and installing a hinged door with a sidelight over the flashing.
Id., Appendix A (emphasis in original). (2) The Decree required the defendants to make these "modifications at no expense to the [Hunt Club Condominium] Association" and to "attempt in good faith to minimize any inconvenience to the Association." Consent Decree, p. 5. Within thirty days of the entry of the Decree, the defendants were to seek, and make their best efforts to obtain, the consent of the Hunt Club Condominium Association to permit the modifications. Id.
Section II, B provided for corrective remedies for individual units at Hunt Club. Those remedies were more specifically set forth in Section IV of the Decree, which required defendants to pay $95,000 to an escrow fund over a set schedule extending four years after the effective date of the Decree. Consent Decree, p. 7. Money from the fund is to be made available to assist owners at Hunt Club in modifying their units to make them more accessible to persons with disabilities. Id at 8. During the first year of the Decree, the defendants were to make the following payments:
Payment No Due Date Amount Due
1. 45 days from effective date of Decree (June 27, 2002) (3) $10,000.00
2. 165 days from effective date of Decree (October 25, 2002) $10,000.00
3. 1 year from effective date of Decree (May 13, 2003) $15,000.00
In addition to the retrofitting remedies in Sections II and IV, the Decree required the defendants to undertake an "educational program" within thirty days of its effective date. See Consent Decree, Section VI. Under this provision, defendants were to provide to "all their employees, agents, and contractors involved in the design, construction, rental, or sale of multi-family dwellings covered by the Act" training as to the terms of the Decree, the requirements of the Fair Housing Act with an emphasis on its "design and construction" provisions, and their responsibilities and obligations to otherwise comply with the Act's design and construction requirements. Id. at 9-10. Each person receiving such training was to execute a statement indicating he or she had received such instruction and understood his or her obligations under the Act, Id., and any such statements were to be forwarded to the United States as part of an initial compliance reports within sixty days of the entry of the Decree pursuant to the reporting provisions of Section VIII, A of the Decree. See Consent Decree, p. 11.
The Decree required defendants to submit an initial sixty-day compliance report, Consent Decree, p. 11, and to submit bi-annual compliance reports commencing six months after the Decree's entry date. Id at 12. Section IX, C provided that the Decree is to remain in effect for five years and that the parties retain the right to petition the Court to enforce or modify the Decree. It also required the parties to endeavor in good faith to resolve informally any differences regarding compliance before bringing them to the Court. Consent Decree, p. 13.
- Evidence of Noncompliance
- Failure to Make Retrofits to Common and Public Use Areas
Under Section II, A of the Consent Decree, defendants were to complete the two retrofits to the public use and common areas specified in Appendix A to the Decree (see p. 2, supra.) within one year of its effective date. They did not do so despite the repeated efforts of the United States to obtain compliance. Those modifications still have not been completed.
Four days after the Decree was entered, the United States sent a letter to defense counsel summarizing in a chart the dates by which the acts required under the Decree were to be completed. See Attmt. B, Lehtman Dec., ¶ 3 and Exh. A thereto. The chart noted that under the Decree, the retrofits to the public and common use areas were to be completed by May 13, 2003. Id. That letter counseled:
Within the first thirty days of the decree, Mr. Lettvin is expected to seek and make good faith efforts to obtain the consent of the Hunt Club Condominium Association to undertake the retrofits of the common areas listed in Appendix A of the decree. See Consent Decree, Section II, A., ¶1. Bob Kuhn, whom you and Mr. Lettvin met at the initial settlement conference in this case, is a member of the Board and may be a logical point of contact to begin the process. * * * Those retrofits are to completed within one year of the decree, or as soon as practicable thereafter, if the Association delays granting the necessary consent.
Within thirty days of the entry of the Decree, the Hunt Club Condominium Association granted the necessary consent. The Board of Directors of the Association, having received a copy of the letter sent by the United States to defense counsel, held a special meeting on June 10, 2002, at which it considered granting Mr. Lettvin the necessary permission to perform the required retrofits to the common areas. See Attmt. C, Kuhn Dec., ¶¶ 4 and 5. The Board unanimously passed a resolution granting such permission. Id. at ¶ 5.
On June 13, 2002, the United States sent defense counsel a letter, enclosing a copy of the resolution passed by the Hunt Club Board. See Attmt. B, Lehtman Dec., ¶ 4 and Exh. B thereto. The letter noted that the Association had not yet been contacted by Mr. Lettvin and that, in a June 10, 2002 conversation, defense counsel had provided assurances that Mr. Lettvin would initiate such efforts. Id. The letter asked defense counsel to "direct your client immediately [to] contact the Board to discuss and initiate plans to perform the work required under the Consent Decree and provide us with a written confirmation that you have done so." Id. It also emphasized that Mr. Lettvin had until May 13, 2003 to complete the retrofits. Id.
In or about July, 2002, Mr. Lettvin spoke by telephone with Hunt Club Board member Bob Kuhn, whom the United States had identified as the point of contact with the Board for coordinating the retrofits. As to the garage storage area modification, Mr. Lettvin suggested building a ramp from the garage floor over the step and into the storage area (rather than complying with the specific requirement of the Decree that defendants "remov[e] the existing step and regrad[e] the entrance into the storage area in the garage level of building one"). See Attmt. C, Kuhn Dec., ¶ 7 and p. 3, supra. (quoting Consent Decree). Mr. Kuhn replied that he did not "believe that such a ramp could be built consistent with ADA standards and that it would mean that the ramp would run into traffic in the garage creating a dangerous situation." Attmt. C, Kuhn Dec., ¶ 7. Mr. Lettvin then asked, "What am I supposed to do?" Id. Mr. Kuhn replied that he understood that the Consent Decree specifically required that the step be removed. Id. Mr. Lettvin responded, "I'm not going to do it." Id. Mr. Kuhn repeated that it was his understanding that it was Mr. Lettvin's obligation as part of the settlement of the lawsuit to remove the step. Id. Once again, Mr. Lettvin responded, "I'm not going to do it"; and their conversation ended. Id. Since that conversation, Mr. Lettvin has not modified either the storage area entrance or the thresholds to the patios of the common rooms. Id. at ¶ 8.
On March 18, 2003, the United States sent defense counsel a letter emphasizing that "[a] number of deadlines [under the Consent Decree] will be approaching within the next two months." Attmt. B, Lehtman Dec., ¶ 15 and Exh. N thereto. Among the two deadlines highlighted in the letter was the May 13, 2003 date for completion of the retrofits to the common areas at Hunt Club. Id. It also urged that the defendants "contact the homeowners' association at Hunt Club to develop a plan under which the completion of the retrofits may be undertaken." Id. The letter requested defense counsel to speak with his client "regarding the status of his plans to complete the retrofits and to inform us as to what progress has been made." Id.
On May 29, 2003, the United States called defense counsel and left a message asking for an update as to defendants' compliance with the Consent Decree. Attmt. B, Lehtman Dec., ¶ 16. On June 4, 2003, counsel for the United States spoke with Hunt Club Board member Robert Kuhn, who confirmed that no work on removing the step to the storage area or reducing the sills in the common rooms had taken place since the Decree had been entered. Id. at ¶ 17. After that conversation, counsel for the United States spoke with defense counsel and told him that the required modifications had not been completed and asked that he speak with his client and inform the United States of his client's intentions by June 11. Id. Thereafter, counsel for both the United States and the defendants attempted to reach each other by phone but did not speak until July 15, 2003. Id. at ¶17 At that time, counsel for the United States asked defense counsel to send a letter by August 1, detailing the status of his clients' compliance. Defendants did not submit any such letter in response to the request made by the United States. Id.
On September 26, 2003, counsel for the United States sent a letter to defense counsel noting that the United States was "very concerned about the defendants' continued failure to comply with the Consent Decree in this case." Attmt. B, Lehtman Dec. ¶ 19 and Exh. O thereto. The letter emphasized that the defendants needed "to take immediate steps to come into compliance with the terms of the Decree," including a request that the defendants meet and confer with the Board of the Hunt Club Association on or before October 17, 2003 regarding the retrofitting of the common and public use areas and reach an agreement with the Board on a plan under which the retrofits would be completed no later than November 15, 2003. Id. In the letter, the United States further cautioned that, while it "remain[ed] hopeful that this matter can be resolved without the involvement of the Court," it might "have to ask the Court to enforce the Decree" if the defendants did not take actions outlined in the letter. Attmt. B, Lehtman Dec., ¶ 19. Notwithstanding this letter, defendants did not contact and meet with the Board by October 17. Attmt. C, Kuhn Dec., ¶ 8.
Defendants also made no effort to contact the United States by October 17. Defense counsel belatedly spoke with counsel for the United States on October 21 and represented that his clients could not pay the overdue $15,000 payment to the retrofit fund (see pp. 8 - 9, infra) and that they could not do retrofits to the common areas for alleged "engineering" reasons. Attmt. B, Lehtman Dec., ¶ 20. He provided no firm details justifying the noncompliance. Id. Defense counsel also acknowledged that his clients had failed to provide the compliance reports due under the Decree. Id. As to the retrofits to the common areas, counsel for the United States replied that never in the almost one-and-a-half years since the Decree had been entered, had defendants made any claim as to an "engineering" related justification for their failure to undertake the agreed upon retrofits. Id. Counsel for the United States further stated that the United States considered defendants to have violated the Consent Decree and would likely proceed with enforcement efforts. Id.
In a follow-up conversation the next day, defendants through their counsel claimed they could complete the modifications to the common rooms "within sixty days" and would supply the information that should have been provided in the compliance reports. Attmt. B, Lehtman Dec., ¶ 20. However, defendants reiterated that they would not pay the $15,000, nor commit to undertaking the retrofit to the garage storage area. Id. In response, the United States sent a letter providing that certain conditions would have to be met by October 31 "in order to avoid the United States filing a motion of contempt." Id. and Exh. P thereto. As stated in the letter, those conditions were:
1. Mr Lettvin must meet with Hunt Club representatives, agree to a schedule for completing and a date certain by which he will complete the two modifications, and confirm in writing to the United States that this has occurred;
2. Mr. Lettvin must pay the $15,000 overdue payment;
3. Mr. Lettvin must submit and the United States must receive the overdue compliance reports; and
4. Mr. Lettvin must either complete the required fair housing training or, by that date, have made an appointment to attend such training as soon as possible after the end of October.
Defendants did not meet those conditions by October 31, 2003, and they still have not met them. Attmt. B, Lehtman Dec., ¶ 20 and Attmt. C, Kuhn Dec., ¶ 9. Instead, defense counsel called counsel for the United States on November 3, 2003. Id. at ¶ 21 and Exh. Q thereto. Defense counsel now represented that Mr. Lettvin could complete the retrofits to the common areas within "10 - 14 days from the first day of work." Id. Counsel for the United States stated that the United States and the Hunt Club Board needed to review the scope of work planned. Attmt. B, Lehtman Dec., ¶ 21. In a confirming letter sent on November 4, defense counsel represented that Mr. Lettvin would provide by November 5 an outline setting forth "exactly what he is going [to do] to effect the retrofits listed in the Consent Decree and how the work will be done." Id. and Exh. Q thereto. The United States has yet to receive such an outline, and the retrofits remain undone. Attmt. B, Lehtman Dec., ¶ 21.
Accordingly, despite the good faith efforts of the United States to remind defendants of their duty under the Decree to complete the retrofits in a timely fashion and the action of the Hunt Club Board to grant the requisite permission, defendants have undertaken virtually no action regarding the two required modifications. Almost six months after those retrofits were to have been completed and almost one-and-a-half years after entry of the Decree, the retrofits are still not done.
2. Failure to Contribute to Retrofit Fund
Section II B of the Consent Decree obligated defendants to contribute to an escrow account to be used to aid owners of inaccessible units at Hunt Club to modify their units to make them more accessible. See p. 3, supra. Since entry of the Decree, defendants were to have made contributions totaling $35,000. Id. Defendants were seriously delinquent in making the first two payments totaling $20,000, see Attmt. B, Lehtman Dec., ¶¶ 5 - 14 (detailing delinquencies and efforts to obtain first two payments). (4) Defendants still have not paid the $15,000 that was due on May 13, 2003, despite repeated reminders. Id. at ¶ ¶ 15 - 21 and Exh. R thereto.
On March 18, 2003, the United States reminded defense counsel that the third payment under the Consent Decree - $15,000 - was due on May 13, 2003, the same date that the retrofits to the common areas were to have been completed. See Attmt. B, Lehtman Dec., ¶ 15 and Exh. N thereto. Defendants failed to make the May 13 payment. Attmt. B, Lehtman Dec., ¶ 17.
In the conversations with defense counsel referenced earlier regarding defendants' failure to complete the retrofits by the May 13 deadline, the United States also discussed defendants' failure to make the third payment. See p. 6, supra and Attmt. B, Lehtman Dec., ¶17. The United States asked defendants to provide an explanation for their failure to comply by August 1. Id. As noted earlier (at p. 6), they did not do so.
The September 26, 2003 letter sent by counsel for the United States to defense counsel (see p. 6, supra) also addressed defendants continuing failure to make the May 13 payment. Attmt. B, Lehtman Dec. ¶ 18 and Exh. O thereto. The United States asked that defendants deposit the amount due, plus interest, by October 17, 2003. Id. They did not. Id. at ¶ 19 and Appendix R thereto. That deadline was subsequently extended to October 31, 2003. Id. at ¶ 20 and see p. 7, supra. Defendants did not make the payment by that date and have, as noted earlier (at p.7), indicated that they do not intend to make the payment, at least for the foreseeable future. Id. at ¶¶ 19 and 20 and Exhs. P and Q thereto.
3. Failure to Undertake Educational Program
Defendants have failed to undertake the educational program required under Section VI of the Consent Decree. That section required the defendants to obtain training from a qualified person or organization approved by the United States concerning the design and construction requirements of the Fair Housing Act for their agents and employees involved in the design and construction of multifamily dwellings. Consent Decree, pp. 9-10. Even if the defendants have no agents or employees so involved other than defendant Richard Lettvin, at minimum Mr. Lettvin should have obtained the necessary training. While defense counsel has represented that he is now working with Mr. Lettvin "to identify programs and seminars that would be appropriate," Attmt. B, Lehtman Dec., ¶ 21 at Exh. R thereto, defendants still have not actually complied with the commands of Section VI of the Decree - a requirement that they should have met within thirty days of the effective date of the Decree. See p. 3, supra.
4. Failure to Submit Initial and Periodic Compliance Reports
Defendants have never submitted any of the compliance reports required under Section VIII of the Decree. See Attmt. B, Lehtman Dec., ¶ 20. Here, too, the United States has reminded defendants of their obligation and has sought voluntary compliance (5) but to no avail. Id. While defendants have recently represented that the information would be forthcoming (see p. 8, supra ), the United States has yet to receive it. Attmt. B, Lehtman Dec. ¶ 20.III. ARGUMENT
A. Standard for Civil Contempt and Relief
Section IX of the Decree provides that the parties may seek to enforce or modify it. Courts have inherent power to enforce compliance with an injunction through civil contempt proceedings, Spallone v. United States, 493 U.S. 265, 276 (1990); Shillitani v. United States, 384 U.S. 364, 370 (1966), and to grant additional injunctive relief as a remedial sanction. United States v. Greyhound Corp., 370 F. Supp. 881, 886 (N.D. Ill.), aff'd 508 F. 2d 529 (7th Cir. 1974). Accord: Shakman v. Democratic Organization of Cook County, 533 F. 2d 344, 350 n.9 (7th Cir. ), cert. denied, 429 U.S. 858 (1976) ("Plaintiff's prayer for additional relief to enforce the judgment and conditions to purge the contempt were also clearly appropriate for civil contempt."). Civil contempt sanctions may either coerce the defendant into compliance with a previously issued order or compensate the complainant for losses sustained by the noncompliance. South Suburban Housing Center v. Berry, 186 F. 3d 851, 855 (7th Cir. 1999); Shakman, 533 F.2d at 349. "The measure of the court's power in civil contempt proceedings is determined by the requirements of full remedial relief." McComb v. Jacksonville Paper Co., 336 U.S. 187, 500 (1949). Moreover, "[w]hen a district court's order is necessary to remedy past discrimination, the court has an additional basis for the exercise of broad equitable powers." Spallone, 493 U.S. at 276 (approving use of contempt sanctions "as a means of ensuring compliance" against a city which had failed to comply with a consent judgment implementing a remedy for violations of the Fair Housing Act).
An injunction entered in a case under the Fair Housing Act, as here, "assure[s] that contempt will be a ready weapon in case of violation by any of the covered parties." United States v. Pelzer Realty, 537 F.2d 841, 844 (5th Cir. 1976). Accordingly, civil contempt has been held as an appropriate means to enforce provisions of consent decrees in cases under the Fair Housing Act, including provisions prohibiting further discriminatory rental practices. See Hayden v. Oak Terrace Apartments, 808 F.2d 1269, 1272 (7th Cir. 1987) (affirming finding of civil contempt based on evidence of continuing housing discrimination); South Suburban Housing Center, 186 F.3d at 853, 856 (affirming, in pertinent part, finding of civil contempt where defendant had failed to make monetary payments and provide compliance reports required under a consent decree in a case originally brought under the Fair Housing Act). To prevail, a party must prove "by clear and convincing evidence" that the opposing party violated a court order. (6) Goluba v. School District of Ripon, 45 F.3d 1035, 1037 (7th Cir. 1995); Hayden, 808 F.2d at 1270. While "willfulness" need not be demonstrated to find a party in civil contempt, McComb, 336 U.S. at 187, "delaying tactics, indifference to the order, or mere 'paper compliance' will support a finding of willfulness." Greyhound Corp., 508 F.2d at 532. Indeed, a district court may find "a party in civil contempt if that party has not been reasonably diligent and energetic in attempting to accomplish what has been ordered." Goluba, 45 F.3d at 1037. Here, the record unquestionably demonstrates that the defendants - far from being "reasonably diligent and energetic" - have wholly failed to accomplish what was required of them under the Consent Decree and may, therefore, be found to be in civil contempt.
B. A Finding of Civil Contempt Is Appropriate Based on Defendants' Failure to Comply with the Injunctive Provisions of the Consent Decree
1. Failure to Modify the Public and Common Use Areas
The Decree required the defendants to complete the retrofits of the public and common use areas at Hunt Club within one year of its effective date. They have failed to do so. Indeed, their efforts to undertake the required retrofits are practically non-existent and best summarized by Mr. Lettvin's cryptic comment to Hunt Club board member Bob Kuhn regarding the Decree's requirement that defendants remove the step and regrade the entrance into the storage area in the garage of building one: "I'm not going to do it." See p. 5, supra.
Defendants may argue that their refusal to make the modifications to the public and common use areas is not deserving of a contempt sanction because they do not believe it is practical to remove the step and regrade the entrance to the garage storage room as required by the Consent Decree. (7) See p. 3,supra . In the first place, this explanation is not applicable to removing the sill to the patios in the common rooms in buildings 1 and 2. Defendants simply refused to make the required modification within the time allotted under the Decree without offering any explanation.
With respect to the storage room, defendants' argument is without merit. The Decree does not simply require in general terms that the accessibility barrier to the garage storage room be eliminated. Rather the Decree specified how this was to be done, "by removing the existing step and regrading the entrance into the storage area." Consent Decree, Appendix A (see p. 3, supra) . Defendant Lettvin, an experienced home builder (8) who constructed the storage room at issue, agreed to this language. If he had concerns about this language, he should have raised them when the Decree was negotiated - not almost six months after the one year deadline for completion of the work has expired. And if some subsequent change in circumstances led him to believe that the specified remedy was no longer practical, the proper course would have been to have sought to have the Decree modified. A party seeking to modify a consent decree bears the burden of establishing that a "significant change" in either in factual conditions or law warrants revision of the decree. Rufo v. Inmates of Suffolk Co. Jail, 502 U.S. 367, 383-84 (1992). Merely declaring, "I'm not going to do it" is not appropriate. As the Court in United States v. Crimson Apartment Services, Inc., 1 P-H EOHC Rptr. ¶ 13,665 at *14,309 (D. Mass. 1974) noted, "If defendants were faced with altered circumstances such that compliance with the decree was not possible, they could have sought modification of the decree. They have not done so." And see McComb, 336 U.S. at 192 (noting respondents "knew they acted at their own peril" when they violated the decree without having sought "a modification, clarification or construction of the order"). The defendants have not done so here either.
2. Failure to Make the $15,000 Payment to the Retrofit Fund
In addition to failing to undertake the structural modifications to the public and comment use areas, defendants have failed to make the third payment ($15,000) to the retrofit fund that was due on May 13, 2003. In similar circumstances, courts have found that civil contempt is a proper means to enforce requirements that a defendant make monetary payments as part of the equitable relief that had been ordered. See McComb, 336 U.S. at 195 (holding that civil contempt was appropriate to enforce an order providing for payment of unpaid wages due under the Fair Labor Standards Act since the "measure of the court's power in civil contempt proceedings is determined by the requirements of full remedial relief" and civil contempt proceedings were necessary to enforce the public policies embodied in the statutory scheme). (9) Accord: Pierce v. Vision Investments, Inc., 779 F.2d 302, 307-308 (5th Cir. 1986) (holding that the Secretary of HUD could properly seek to enforce through civil contempt proceedings a consent order in a case under the Interstate Land Sales Full Disclosure Act that had required the defendants to make payments to an escrow account on behalf of purchasers who had lost their lots through foreclosure because "the consent order is not a mere money judgment or debt but rather is an equitable decree and an injunction in the public interest" and that "[c]ivil contempt is a necessary remedy for courts to protect these public interests"); and Robbins v. Labor Transportation Corp., 599 F. Supp. 705, 707 (N.D. Ill. 1984) (holding civil contempt appropriate to enforce an order under the Employee Retirement Income Security Act of 1974 requiring defendants to make contributions to employee trust fund where the defendants had failed to make the payments and distinguishing the judgment from one only for money damages). Thus, the United States may properly invoke the court's contempt powers to enforce compliance with the provisions of the Consent Decree requiring periodic payments to the retrofit escrow account. (10)
3. Failure to Comply with the Decree's Education and Reporting Requirements
Defendants' failure to comply with the education and reporting requirements of the Consent Decree also warrants contempt sanctions. See Crimson Apartment Services, Inc., 1 P-H EOHC Rptr. ¶ 13,665 at *14,309 (holding that defendants' unjustified failure to comply with reporting provisions of consent decree constituted civil contempt); South Suburban Housing Center, 186 F.3d at 853, 856 (affirming, in pertinent part, finding of civil contempt where defendant "had failed to comply with any of her reporting ** * obligations" under a consent decree resolving alleged violations of the Fair Housing Act). As the court in Crimson Apartments Services, Inc, 1 P-H EOHC Rptr. ¶ 13,665 at *14,308, observed, the purpose of the reporting provisions is to permit the United States to "be informed whether defendants had complied substantially with the provisions * * * of the decree" prohibiting them from engaging in further discriminatory housing practices and requiring them to take corrective actions.
Upon a finding of civil contempt, the Court's powers are broad. McComb, 336 U.S. at 193. Appropriate sanctions may include those designed to coerce defendants into compliance and to compensate for any losses sustained as a result of noncompliance. Shakman, 533 F.2d at 349. As to coercive remedies, courts in civil contempt proceedings have ordered daily fines that continue until compliance has been achieved. See e.g., In the Matter of Grand Jury Proceedings, 280 F. 3d 1103, 1106, 1109 (7th Cir. 2002) (affirming district court's coercive order in civil contempt proceedings fining defendant $1,500 per day until compliance achieved); United States v. Berg, 20 F.3d 304, 311 (7th Cir. 1994) (affirming district court order imposing coercive daily fine of $500 per day); and United States v. Richmond, 2002 WL 31055257 (N.D. Ill. 2002) (noting that "[a]ppropriate sanctions may include a coercive daily fine" and imposing a $2,000 daily fine until full compliance with injunctive order is achieved).
Losses in civil contempt proceedings may include an award of attorneys' fees to the United States. See Commodity Futures Trading Comm'n v. Premex, Inc., 655 F.2d 779, 785 (7th Cir. 1981) (holding that a court in a civil contempt proceeding may "order reimbursement of the complainant, as part of the civil relief, of the party's fees and expenses incurred in bringing the violation to the court's attention" and that it is "well settled that such awards may be made not only to private plaintiffs but to governmental agencies as well"); Northside Realty Assocs., Inc. v. United States, 605 F.2d 1348 1356 n.23 (5th Cir. 1979) (upholding award of attorneys' fees to United States in civil contempt proceedings brought to enforce injunctive order in case under the Fair Housing Act and citing United States v. Greyhound Corp., 370 F.Supp. 881, 886 (N.D. Ill.), aff'd 508 F.2d 529 (7th Cir. 1974)).
Such relief, coercing defendants to comply with the Consent Decree and compensating the United States for its losses, is appropriate in the present case. Accordingly, given defendants' continuing failure to comply with the Decree, despite repeated entreaties by the United States, a daily fine of at least $100 per day that is imposed prospectively following a finding of contempt and a reasonable period to obtain compliance and that continues until compliance is achieved is necessary and appropriate. The United States also requests an award of attorneys' fees following the Court's entry of such a finding. A proposed Order is submitted herewith.IV. CONCLUSION
For the foregoing reasons, we ask this Court enter an Order adjudging the defendants to be in civil contempt and ordering appropriate relief.
PATRICK J. FITZGERALD
United States Attorney
JOAN C. LASER
Assistant United States Attorney
R. ALEXANDER ACOSTA
Assistant Attorney General
STEVEN H. ROSENBAUM
TIMOTHY J. MORAN
MYRON S. LEHTMAN
U. S. Department of Justice
950 Pennsylvania Ave., N.W.
Housing & Civil Enforcement Section -
Washington, D.C. 20530
(202) 514-4738CERTIFICATE OF SERVICE
I hereby certify that I have this date mailed, via Federal Express and facsimile transmission, a true and correct copy of the above and foregoing Plaintiff's Notice of Motion for Civil Contempt and Supplemental Relief on counsel for the defendants, addressed as follows:
Jerry Brown, Esquire
Gonzalez, Saggio, and Harlan, LLP
208 S. LaSalle Street, Suite 775
Chicago, IL 60604
Done this ______ day of ___________, 2003.
Myron S. Lehtman
U. S. Department of Justice
950 Pennsylvania Ave., N.W.
Housing & Civil Enforcement Section - G St.
Washington, D.C. 20530
1. The Decree was signed on behalf of the defendants by their counsel and Mr. Lettvin. See Consent Decree, p. 20. Its terms were agreed to after several arms length negotiations and with the assistance of Magistrate Judge Schenkier, who presided over several settlement conferences.
2. Photographs of the existing step in the storage area and the sills in the common rooms are included as Exhibits A and B to the Kuhn Declaration (Attmt. C hereto).
3. Computation of due dates is based on the May 13, 2002 entry date for Consent Decree. The remainder of the payments are as follows: May 13, 2004 (two years from effective date of Decree: $15,000); May 13, 2005 (3 years from effective date: $20,000); May 13, 2006 (4 years from effective date: $25,000). See Consent Decree, p. 7.
4. Defendants made the first payment on July 30, 2002, more than 30 days after it was due. Attmt. B, Lehtman Dec., ¶ ¶ 5- 6 and Appendices C and D thereto. The second $10,000 payment was due on October 25, 2002. Defendants made that payment in two belated installments, one for $5,000 on December 5, and one for $5,000 on February 25, 2003. Id. at ¶ ¶ 7 - 14 and Exhs . E - M thereto (documenting the efforts to obtain the second payment).
5. For instance, the September 26, 2003 letter of the United States to defense counsel noted the failure and asked that the defendants provide by October 17, 2003, the information required to have been submitted under Section VII of the Decree and the name of a proposed person or organization with which defendants have spoken that is willing to provide the training required under Section VI of the Decree. Attmt. B, Lehtman Dec. ¶ 18 and Exh. O thereto.
6. A consent decree, while contractual in nature, is enforceable as a judicial decree. United States v. Krilich, 303 F.3d 784, 789 (7th Cir. 2002).
7. Defendants' position on this point is unclear. In October of this year they were asserting that they could not do the agreed upon modification to the garage storage area for "engineering" reasons (see p. 7 7, supra). They have more recently asserted they could complete the retrofits within "10 - 14" days from the first day of work. See p. 7, supra. However, they have not yet specified in detail how those retrofits would be completed in conformance with the requirements of the Decree. Id.
8. The United States Complaint at ¶ 8 quoted from Hunt Club promotional materials that stated that the principals of RSC "'have been addressing the housing needs of prospective home owners with the development of luxury condominium homes and townhomes in and around the Chicago area for the past two decades.'" Defendants admitted the allegations of that paragraph in their Answer. See Def. Ans. ¶ 8.
9. Courts that have addressed relief in cases involving the accessibility provisions of the Fair Housing Act, 42 U.S.C. § 3604(f)(3)(C), have held that a retrofitting remedy - either through mandating actual retrofits to noncompliant features or the creation of a retrofitting fund - constitutes proper equitable relief. As the Court in Balachowski v. Boidy , 2000 WL 1365391 *15 (N.D. Ill. Sept. 20, 2000), observed in ordering contributions to a retrofit fund: "The law of equity is served by having Boidy, the owner of the property at the time in question, set aside funds to have the violations remedied." Accord: Baltimore Neighborhoods, Inc. v. LOB, Inc., 92 F. Supp. 456, 465-66(D. Md. 2000) (discussing equitable relief under the Act and "find[ing] that retrofitting, or the establishment of a retrofitting fund, is an appropriate way to remove the physical barriers created by LOB's discriminatory practices")
10. We recognize that civil contempt is generally not an appropriate remedy to enforce a mere monetary judgment. See e.g., Trustees of the Chicago Truck Drivers, Helpers, and Warehouse Workers Union v. Central Transport, Inc., 1990 WL 253616 *707 (N.D. Ill. 1990) (civil contempt not proper when not sought to enforce provisions of an injunction but rather a mere money judgment). Here, however, the $15,000 payment to the retrofit fund is an equitable remedy that will be used to bring the development into compliance with the Act. See n. 8, supra.
Document Filed: November 17, 2003 > >
- Remove step into storage area in garage level of Building One. This shall be accomplished by removing the existing step and regrading the entrance into the storage area in the garage level of building one; and