Housing and Civil Enforcement Cases
United States v. Rappuhn (N.D. Ala.)
On March 8, 2016, the court entered the consent order in United States v. Rappuhn (N.D. Ala.), a design & construction lawsuit involving the accessibility provisions of the Fair Housing Act and Americans with Disabilities Act. The complaint, filed on September 30, 2015, alleged that Allan Rappuhn and his affiliated entities were involved in the design and construction of 71 multifamily housing developments with approximately 4,090 total units and 2,717 FHA-covered units located in Alabama (36 properties), Georgia (25), North Carolina (nine), and Tennessee (one). Of the 71 properties, 69 were built using either Low-Income Housing Tax Credits (“LIHTC”) and/or funds from the HOME Partnership Investment Program (“HOME funds”). The complaint alleged that the defendants engaged in a pattern or practice of designing and constructing multifamily housing developments or denying rights to a group of persons in violation of the Fair Housing Act (FHA), 42 U.S.C. § 3604(f)(3)(C), and the Americans with Disabilities Act, 42 U.S.C. § 12183(a)(1). The principal violations at the properties include, among other things, a lack of accessible routes to many covered units and public and common use areas due to steps, the absence of curb cuts, vertical level changes, and steep running and cross slopes; a lack of accessible routes into and through the dwelling units due to high thresholds, narrow passage ways, and narrow doors; and adaptive design violations in the bathrooms and kitchens. The consent order requires an injunction, fair housing training, record keeping obligations, reporting to the United States for a period of four years, a settlement fund of $300,000 to compensate victims, a civil penalty of $50,000, and retrofits to alleged non-compliant barriers on the accessible routes, in the public and common use areas, and in the covered dwelling units at the 71 properties.
United States v. Encore Management Company, Inc. (S.D. W. Va.)
On March 20, 2017, the court entered a default judgment against defendants, Anthony James, Christopher Terrill James and Kisha James in United States v. Encore Management Co. (S.D. W. Va.), a Fair Housing Act pattern or practice/election case. The complaint, which was filed on November 14, 2014, alleged that the owner, property management company, district manager, and maintenance employee of a 56-unit apartment building located in Cross Lanes, West Virginia violated the Fair Housing Act by discriminating against tenants on the basis of sex (both quid pro quo and hostile environment sexual harassment), and that the owner, manager, district manager, and site manager retaliated against tenants who complained about the sexual harassment. The judgment awards civil penalties of $55,000 against Anthony James, $30,000 against Christopher Terrill James, and $5,000 against Kisha James; and prohibited Anthony James and Christopher Terrill James from directly or indirectly participating in property management at residential rental properties in the future. On August 12, 2016, the court entered a consent order with Encore Management Co. and Perkins Parke Limited Partnership, which required payment of $110,000 to seven adult and four minor victims and a $10,000 civil penalty. The case came to the Division after the Department of Housing and Urban Development (HUD) received complaints, conducted an investigation, and issued a charge of discrimination.
United States v. Eagle Bank and Trust Co. of Missouri (E.D. Mo.)
On September 29, 2015, the United States filed a complaint and consent order in United States v. Eagle Bank and Trust Company of Missouri (E.D. Mo.), alleging that the bank engaged in a pattern or practice of “redlining” predominantly African-American neighborhoods in and around St. Louis. “Redlining” is the discriminatory practice by banks or other financial institutions to deny or avoid providing credit services to a consumer because of the racial demographics of the neighborhood in which the consumer lives. The complaint alleges violations of the Fair Housing Act and the Equal Credit Opportunity Act, which prohibit financial institutions from discriminating on the basis of race and color in their mortgage lending practices. As a result of the settlement Eagle Bank will open two new locations to serve the residents of African American neighborhoods in northern St. Louis. The bank will also invest at least $975,000 to provide banking and borrowing opportunities to residents and small businesses in those areas. The court entered the consent order on October 1, 2015.
United States v. Pendygraft (E.D. Ky.)
On February 26, 2016, the court entered the consent decree in United States v. Pendygraft (E.D. Ky.) an Fair Housing Act sexual harassment HUD election case. The complaint, filed on September 30, 2015, alleged that one of the defendants made repeated unwelcome demands of a tenant for sexual favors. In addition to the standard injunctive relief, the consent decree provides for damages of $5,000 to the complainant.
United States v. Fifth Third Bank (S.D. Ohio)
On September 28, 2015, the United States filed a complaint and consent order in United States v. Fifth Third Bank (S.D. Ohio), alleging that the bank engaged in a pattern or practice of discrimination on the basis of race and national origin in its indirect auto lending business in violation of the Equal Credit and Opportunity Act (ECOA). The consent order includes $18 million in restitution for harmed African American and Hispanic borrowers, and requires the bank to change the way it prices its loans by limiting dealer markup to 125 basis points (or 1.25%) for loans of 60 months or less, and to 100 basis points (or 1%) for loans greater than 60 months. This matter was investigated and settled jointly with the Consumer Financial Protection Bureau. The court entered the consent order on October 1, 2015.
Consumer Financial Protection Bureau and United States v. Hudson City Savings Bank, F.S.B. (D.N.J.)
On September 24, 2015, the United States filed a complaint and consent order in Consumer Financial Protection Bureau and United States v. Hudson City Savings Bank, F.S.B. (D.N.J.), a Fair Housing Act and Equal Credit Opportunity Act pattern or practice case. The joint complaint with the Consumer Financial Protection Bureau (CFPB) alleges that from at least 2009 to 2013, Hudson City Savings Bank (Hudson City) failed to provide its home mortgage lending services to majority-Black-and-Hispanic neighborhoods on an equal basis as it provided those services to predominantly white neighborhoods, a practice commonly known as "redlining," throughout its major market areas in New Jersey, New York, Connecticut, and Pennsylvania. Under the consent order Hudson City will provide $25 million in a loan subsidy fund to increase the amount of credit the bank extends to formerly redlined neighborhoods across its market areas; invest $2.25 million for advertising, outreach, financial education, and community partnership and open two full-service branches in these neighborhoods; increase the number of loan officers dedicated to majority-Black-and-Hispanic neighborhoods; develop and implement a compliance management system and training curriculum to ensure compliance with fair lending obligations; and create a comprehensive long-term plan to increase lending in previously redlined areas. Hudson City will further pay a civil monetary penalty of $5.5 million, pursuant to the CFPB’s civil penalty authority under ECOA. The court entered the consent order on November 4, 2015.
Mouton v. Augustine (W.D. La.)
On September 9, 2015, the United States filed a Statement of Interest in Mouton v. Augustine (W.D. La.), a Fair Housing Act sexual harassment case against the owner and manager of an apartment complex in Abbeville, Louisiana. The plaintiff alleged that she was sexually harassed by the apartment manager from the time she first inquired about her apartment until her tenancy ended more than two years later. The defendants filed a motion to dismiss all claims relating to conduct that happened after the plaintiff rented the apartment, arguing that post-acquisition conduct is not covered by the FHA.
United States v. Salem (D. S.D.)
On November 23, 2017, the United States Attorney’s Office entered into a settlement agreement resolving United States v. Salem (D. S.D.), a Fair Housing Act election case. The complaint, which was filed on August 28, 2015, alleges that the owners and manager of an eight-unit apartment complex in Sioux Falls, South Dakota violated the Fair Housing Act on the basis of disability by refusing to allow a tenant to return from a nursing facility to his unit if he was using a wheelchair because it could damage the carpet. The settlement agreement requires the defendants to pay the complainant $20,000 and to comply with the Fair Housing Act.
United States v. Anderson (D. N.M.)
United States v. Williams (S.D. Ill.)
On August 31, 2015, the court entered consent order in United States v. Williams (S.D. Ill.), resolving a case alleging that Williams Trailer Court, located in Marion, Ill., engaged in a pattern or practice of discriminating against African Americans and families with children. The complaint, filed on August 5, 2015, alleged that the defendants violated the Federal Fair Housing Act by falsely informing African American apartment seekers that there were no mobile homes available and unlawfully discouraging people with children from living in the mobile home park. This case was based on evidence developed through the Division's Fair Housing Testing Program. The consent order, which has a three-year term, requires defendants to create a $45,000 settlement fund for aggrieved persons, requires defendants to pay $30,000 to the government as a civil penalty, and provides for extensive injunctive relief, including mandatory fair housing training and implementation of non-discrimination policies and procedures.
United States v. City of Beaumont, Texas (E.D. Tex.)
On June 16, 2016, the court entered a consent decree in United States v. City of Beaumont (E.D. Tex.).The complaint, which was filed on filed on May 26, 2015, alleges that the City implemented and enforced spacing requirements and overly restrictive fire code regulations for small group homes for individuals with intellectual or developmental disabilities, in violation of the Fair Housing Act and the Americans with Disabilities Act.The consent decree requires the City to pay $435,000 in monetary relief to 11 aggrieved individuals and a $15,000 civil penalty.The City will also pay $25,000 to Disability Rights Texas, the organization that represented the three individuals who filed the HUD complaints and intervened in the United States’ lawsuit.In addition, the City consented to injunctive relief, including ceasing enforcement of its spacing requirements and overly restrictive fire code regulations, implementing a comprehensive reasonable accommodation policy, requiring its officials to attend fair housing training, and appointing a fair housing compliance officer.
Consent Decree United States v. Brooklyn Park 73rd Leased Housing Assoc., LLC (D. Minn.)
On January 22, 2016, the court entered a consent decree in United States v. Brooklyn Park 73rd Leased Housing Assoc., LLC (D. Minn.), a Fair Housing Act election case. The complaint, filed on May 18, 2015, alleged that the owners and managers of an apartment complex in Brooklyn Park, Minnesota placed undue conditions on a woman’s request to live with her assistance animal and then refused to renew her lease in violation of the Fair Housing Act. The consent decree requires the defendant to pay $35,000 to the complainant, adopt non-discrimination and reasonable accommodation policies, and record keeping. The case was referred to the Division after the Department of Housing and Urban Development (HUD) received a complaint, conducted an investigation, and issued a charge of discrimination.