Posted on November 19, 2010 by Scott M. Badami

Are Punitive Damages Available in a Fair Housing Lawsuit? Only in Extreme Cases.

I was recently asked if a plaintiff could be awarded punitive damages in a fair housing case.   While I try not to devolve into lawyer-speak here at the Fair Housing Defense blog all that often, I wanted to provide a few thoughts on the question.  While the short answer to the question is yes, punitive damages are not typical and will only come up in extreme circumstances.

The Fair Housing Act (FHA) provides for the recovery of punitive damages by victims of discriminatory housing practices.  "[T]he assessment of punitive damages under the FHA is governed by federal rather than state law." United States v. Big D Enterprises, Inc., 184 F.3d 924, 932 (8th Cir. 1999), cert. denied, 120 S. Ct. 1419 (2000). Punitive damages are appropriate in a federal civil rights action "when the defendant's conduct is shown to be motivated by evil motive or intent, or when it involves reckless or callous indifference to the federally protected rights of others." Smith v. Wade, 461 U.S. 30, 56 (1983). The Supreme Court addressed the meaning of the terms "malice" and "reckless indifference" as they relate to the standard for punitive damages in the Title VII (employment) context. See Kolstad v. American Dental Assoc., 527 U.S. 526 (1999). The Court stated that "'malice' or 'reckless indifference' pertain to the [defendant's] knowledge that it may be acting in violation of federal law, not its awareness that it is engaging in discrimination." The Kolstad Court further explained that, although conduct justifying a punitive damages award is sometimes characterized as egregious or outrageous, it "is not to say that [defendants] must engage in conduct with some independent, 'egregious' quality before being subject to a punitive award."   In an employment context, it is sufficient that a defendant "discriminate in the face of a perceived risk that its actions will violate federal law to be liable in punitive damages."   

Although Kolstad concerned punitive damages in a Title VII employment discrimination case, and Wade addressed punitive damages in a § 1983 civil rights action, it is likely the same standard for punitive damages applies in the FHA arena. See Alexander v. Riga, 208 F.3d 419, 430-32 (3rd Cir. 2000) (discussing applicability of Kolstad to Fair Housing Act violations). 

Management's knowledge of and compliance with the fair housing laws is, of course, our best defense to a fair housing complaint.  Nevertheless, even if there is a case in which one of our leasing office employees may have misunderstood a guideline or simply made a mistake, punitive damages are only available when a strict standard is met. 

Just A Thought.

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Posted on November 12, 2010 by Scott M. Badami

So Just What Makes Up "Source of Income" Anyway

While faithful blog readers know that "source of income" is not one of the seven protected classes in the federal Fair Housing Act ("FHA"), a number of states and localities do include "source of income" as a protected class.  The issue that comes up in these jurisdictions, of course, is just what is covered in the "source of income" of an applicant.  From a legal perspective, the problem is that various jurisdictions differ (or do not always define) just what makes up "source of income."  

For example, in California, "source of income" is defined as "lawful, verifiable income paid directly to a tenant or representative of a tenant."  Connecticut defines "source of income" to include "social security, housing assistance, child support, alimony, public or general assistance."  Philadelphia prohibits discrimination based on "source of income" and defines source of income to include any "lawful income, including all forms of public assistance."  In Chicago, "source of income" is defined to be the "lawful manner in which a person supports himself or his dependants."  As such, it appears that the majority rule is that "source of income" is money paid to an applicant (or a voucher which represents hard money) in whatever form which is to be used for housing.  Perhaps another way to look at the issue is that if the income is reported on a tax return, then it needs to be counted.  To be fair, however, under the law in Chicago, if I was retired but had $1 million in the bank and was going to use that money to pay my rent, management likely would have to (and want to) take me.  Even though I technically had no monthly income (other than perhaps some interest). 
 
For a professional apartment management company with properties across a number of states, this creates an additional challenge as management likes to use one consistent rule.  However, as is done with occupancy standards, using one firm rule across the country on source of income just does not always work.  You need to know the law in your jurisdiction.  Or reach out to a lawyer like me.
 
Just A Thought.
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Posted on November 11, 2010 by Scott M. Badami

When Is The Best Time to Win A Fair Housing Case? At the First Opportunity.

I write often on this blog about cooperating with fair housing investigators who work for HUD or a state, city, or county housing anti-discrimination agency.  From management's perspective, developing a good working relationship with the investigator assigned to a case remains important.  In my experience, management must prove our innocence.  While that sounds a little backward, such is the way of the world in fair housing litigation.  Management understands that burden and we typically welcome it.

But, there is indeed another reason to work on a case professionally and early with an investigator:  because our best chance to win is when the case is being initially reviewed and considered.  I just saw some statistics on appeals which reminded me why our best chance is to win at the first possible stage:  the national average of getting a case reversed on appeal is less than 10%.  In other words, if a case goes to court, the losing side has less than a 10% chance of getting the appeals court to reverse the decision below.  Those are sobering [and expensive] numbers (not just for professional apartment management companies, but for ANY party who loses a case and wants to file an appeal).

This is just further evidence why we work so hard with the line investigators to get the right decision the first time.

 Just A Thought.

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Posted on November 5, 2010 by Scott M. Badami

Resasonable Accommodation Requests -- Yet Again

A new fair housing complaint arrived on my desk this week.  It alleged that a resident made a reasonable accommodation (really a reasonable modification) request for a ramp three years ago and management did not respond.  As faithful readers of this blog know, I always believe there are two sides to every complaint and I always want to hear from management before I make up my mind.

Nevertheless, this complaint provides yet another reminder that management absolutely should respond to each and every reasonable accommodation or reasonable modification request you receive.  I recommend management send an interim response informing the resident that we have received your request and are reviewing it.  I have written and circulated those letters.  Then, once management understands what the resident seeks, send them another letter.  And include copies of those letters in the files.  I cannot stress how important it is to document the file.  Remember, in a fair housing case, management usually has to prove our innocence.  One of the best ways to do that is to ensure the resident's file is appropriately documented.

I don't yet know the facts of this new complaint.  I will be shocked if a resident's reasonable accommodation or modification request languished for three years.  But this is further evidence that management must appropriately document requests and respond to them.

Just A Thought.

 

 

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