Housing and Civil Enforcement Cases
United States vs. Chesapeake Coveside Lane Apartments Property Owner, LLC, et al. (E.D. Va.)
On September 14, 2022, the court entered a consent order in United States vs. Chesapeake Coveside Lane Apartments Property Owner, LLC, et al. (E.D. Va.). The complaint, which was filed on August 8, 2022, alleges that the defendants violated the Servicemembers Civil Relief Act (SCRA) by obtaining unlawful court judgments against military tenants at the Hideaway at Greenbrier Luxury Apartment Homes in Chesapeake, Virginia, and the Chase Arbor Apartments in Virginia Beach, Virginia. Chesapeake Coveside Lane Apartments Property Owner, LLC and Chase Arbor Apartments Property Owner, LLC are both named as defendants in the case. The consent order requires the defendants to pay a total of $225,000 in monetary relief: $162,971 to affected servicemembers and a $62,029 civil penalty to the United States. The order also requires the defendants to vacate the judgments, repair the servicemembers’ credit, provide SCRA training to their employees, and develop new policies and procedures consistent with the SCRA. The owners must also reimburse affected servicemembers for any amounts collected pursuant to an unlawful judgment.
Consumer Financial Protection Bureau, and United States v. Trident Mortgage Company (E.D. Pa.)
On July 27, 2022, the United States and the Consumer Financial Protection Bureau filed a joint complaint and a proposed consent order in Trident Mortgage Company, Inc. (E.D. Pa.). The complaint alleges that Trident Mortgage Company (Trident), which is owned by Berkshire Hathaway, Inc., violated the Equal Credit Opportunity Act (ECOA), the Fair Housing Act (FHA), and Consumer Financial Protection Act (CFPA), by engaging in unlawful redlining in the Philadelphia metropolitan area by avoiding providing credit services to neighborhoods of color because of the race, color, and national origin of the people living in those neighborhoods. The complaint also alleges that Trident’s loan officers and other employees sent and received work e-mails containing racial slurs and referring to communities of color as “ghetto.” The consent order, requires the defendant to invest at least $18.4 million in a loan subsidy fund for residents of predominantly neighborhoods of color in the Philadelphia metropolitan area; invest $750,000 for development of community partnerships to provide services that increase access to residential mortgage credit in those neighborhoods; invest $875,000 for advertising and outreach in those neighborhoods; and invest $375,000 for consumer financial education. Trident will also pay a civil money penalty of $4 million.
United States v. Meta Platforms, Inc., f/k/a Facebook, Inc. (S.D.N.Y.)
On June 27, 2022, the court approved the parties’ settlement agreement and entered a final judgment in United States v. Meta Platforms, Inc., f/k/a Facebook, Inc. (S.D.N.Y.). The complaint, which was filed on June 21, 2022, alleged that Meta’s housing advertising system discriminated against Facebook users based on their race, color, religion, sex, disability, familial status, and national origin, in violation of the Fair Housing Act (FHA). Specifically, the complaint alleged, among other things, that Meta uses algorithms in determining which Facebook users receive housing ads and that those algorithms rely, in part, on characteristics protected under the FHA. Under the settlement, Meta stopped using an advertising tool (known as the “Special Ad Audience” tool) for housing ads and developed a new system, the Variance Reduction System (VRS), to address racial and other disparities caused by its use of personalization algorithms in its ad delivery system for housing ads. Under the terms of the June 2022 settlement, Meta also will not provide any ad targeting options for housing advertisers that directly describe or relate to FHA-protected characteristics. The settlement also required Meta to pay a civil penalty of $115,054, the maximum penalty available under the FHA at the time of the settlement. The case involves a Secretary-initiated HUD complaint and was referred to the Justice Department after the U.S. Department of Housing and Urban Development (HUD) conducted an investigation and issued a charge of discrimination. On January 9, 2023, the Justice Department announced that it reached agreement with Meta, as required by the settlement, on compliance targets for the Variance Reduction System. On June 29, 2023, the third-party reviewer, Guidehouse Inc., issued its first report on VRS Compliance Metrics Verification. On October 30, Guidehouse issued its second report on VRS Compliance Metrics Verification. On March 1, 2024, Guidehouse issued its third report on VRS Compliance Metrics Verification. On June 28, 2024, Guidehouse issued its fourth report on VRS Compliance Metrics Verification.
United States v. Maria Trini Menendez (D.P.R.)
On June 6, 2022, the United States Attorney’s Office filed an “election” complaint in United States v. Maria Trini Menendez (D.P.R.). The complaint alleges that the owners and managers of a four-unit apartment building in San Juan, Puerto Rico, and the real estate agent retained to find tenants for the property, discriminated on the basis of disability in violation of the Fair Housing Act by refusing to allow the complainants, one of whom is legally blind, to rent a unit because they had a guide dog. Josefina Amparo De La Fuente-Mundo, Alicia De La Fuente-Mundo, and Rosalia De La Fuente-Mundo are also named as defendants in the complaint. The case was referred to the Division after the U.S. Department of Housing and Urban Development (HUD) received a complaint, conducted an investigation, and issued a charge of discrimination.
Residents and Families United to Save our Adult Homes v. Howard Zucker (E.D.N.Y)
On May 31, 2022, the United States filed a Statement of Interest in the consolidated case of Residents and Families/Empire v. Zucker. Residents and Families/Empire challenges a New York State regulation limiting admission of individuals with Serious Mental Illness (SMI) into segregated settings called Adult Homes, by alleging that the regulation violates the Fair Housing Act and the Americans with Disabilities Act. The State issued the regulation in conjunction with the United States’ settlement in U.S. v. New York, No. 13-cv-4165 (E.D.N.Y. 2013) and consistent with its Office of Mental Health’s determination that Adult Homes “are not clinically appropriate settings” for individuals with SMI, “nor are they conducive to the rehabilitation or recovery of such persons.” The Statement of Interest explains that the regulation does not violate the Fair Housing Act or the Americans with Disabilities Act.
United States v. Richard Donahue (W.D. Wis.)
On February 16, 2024, the court entered a consent order in United States v. Richard Donahue and Mary Donahue (W.D. Wis.). The complaint, which was filed on May 13, 2022, alleged that, since at least 2000, defendant Richard “Rick” Donahue sexually harassed numerous female tenants of residential rental properties owned by the defendants in Janesville, Wisconsin by offering to reduce monthly rental payments in exchange for sex, making unwelcome sexual comments and advances, and evicting or threatening to evict female tenants who objected to or refused his sexual advances. The complaint alleged that both defendants were liable for discrimination based on sex in violation of the Fair Housing Act (FHA). The consent order requires the defendants to pay $623,965 in monetary compensation, including $500,000 to 13 aggrieved persons, and a $123,965 civil penalty to the United States. It also permanently enjoins the defendants from managing rental properties in the future. The consent decree also bars future discrimination and retaliation; requires that property management responsibilities be turned over to an independent property manager; mandates the implementation of a sexual harassment policy, complaint procedure, and Fair Housing Act training; and requires detailed reporting regarding property management activities and compliance with the terms of the consent decree.
Press Release - (2/9/2024)
Press Release - (5/13/2022)
United States v. Steve's Towing, Inc. (E.D. Va.)
On April 17, 2023, the court entered a consent order in United States & John Doe v. Steve’s Towing, Inc. (E.D. Va.). The complaint, which was filed on April 15, 2022, alleges that a Virginia Beach towing company violated the Servicemembers Civil Relief Act (SCRA) by auctioning off vehicles belonging to at least seven servicemembers without first obtaining the required court orders. Some of the vehicles were towed from a military base while their owners were deployed overseas. In addition to requiring the adoption of new policies to prevent future SCRA violations, the consent order orders the defendant to pay a total of $90,000 in monetary relief: $67,500 in damages to identified servicemembers; up to $12,500 for as-yet unidentified servicemembers; and a $10,000 civil penalty.
United States v. Perry Homes Inc. (W.D. Pa.)
On January 3, 2023, the court entered a consent order in United States v. Perry Homes, Inc. (W.D. Pa.). The complaint, which was filed on April 5, alleged that Perry Homes, the owner of a multifamily rental property in Cranberry, Pennsylvania, discriminated on the basis of disability in violation of the Fair Housing Act by refusing to grant requests for reasonable accommodations made by two different tenant households who sought permission to keep an assistance animal in their apartments. The case was based on HUD complaints filed by each household. The consent order requires the defendants to pay two former tenants, Alison and Jesse Noce, the sum of $12,000, and a current tenant, Sarah Jamison, $3000. In addition, the Consent Order requires that Defendants issue confirmation to Sarah Jamison that she can live with her emotional support cat as a reasonable accommodation while she remains a tenant at the property. In addition to damages, the Defendants must comply with the Fair Housing Act, adopt a reasonable accommodation policy, publicize the policy in applications, leases, tenant renewal and the rental office, provide training for its employees, and comply with other equitable terms. The case was referred to the Division after the Department of Housing and Urban Development (HUD) received the complaint, conducted an investigation, and issued a charge of discrimination.
CNY Fair Housing v. Swiss Village LLC, et al. (N.D.N.Y.)
CNY Fair Housing filed a complaint against Defendant Swiss Village alleging disparate impact and intentional discrimination on the basis of national origin and race, in violation of the FHA, based on the Defendant’s policy of only renting out apartments if a prospective occupant spoke and read English. Defendant filed a motion to dismiss, arguing that CNY Fair Housing had failed to state a claim and that HUD Guidance regarding renting to persons who are Limited English Proficient (LEP) was not due any deference. See https://www.hud.gov/sites/documents/LEPMEMO091516.PDF The United States filed a statement of interest arguing that Plaintiff had plausibly alleged disparate impact and intentional discrimination claims and that the HUD LEP Guidance was due deference under Skidmore v. Swift & Co., 323 U.S. 134 (1944).
The Court denied the Defendant’s motion in its entirety. The Court first found that, contrary to the Defendant’s position, the HUD LEP Guidance did not assert that LEP status alone is a protected class under the FHA, but rather that language criteria may be evidence of discrimination, the same as any other potentially discriminatory criteria. The Court held that the HUD LEP Guidance was “persuasive and entitled to deference” because it was consistent with case law regarding the use of language as a proxy for race and national original, was consistent with other HUD Guidance, and that the Fourth Circuit had given it deference in a recent case, Reyes v. Waples Mobile Home Park LP, 903 F.3d 415, 432 & n.10 (4th Cir. 2018). The Court also found that the Complaint alleged sufficient facts to state a disparate impact claim (it repeated statistical Census data allegations regarding national origin and race made in the Complaint). The Court found that the Complaint stated a claim for intentional discrimination in that “[d]iscriminatory intent may be inferred from the totality of the circumstances, and this Court discerns no reason why” that “would not include evidence of a language policy being used as a proxy for discrimination on the basis of national origin or race.” Finally, the Court held that a “Plaintiff does not need to identify the specific national origin or race of particular tenants in order to state a prima facie case of discrimination under the FHA” and that “neither disparate impact nor discriminatory statement claims require a showing that Defendants were aware of the national origin or race of the prospective tenants.”
United States v. Miyamoto (D. Wy.)
On March 29, 2022, the Court entered a consent order in United States v. Karen and Daniel Miyamoto (D. Wy.), resolving allegations that Defendants, the owners of rental housing in Laramie, Wyoming, discriminated on the basis of disability by refusing to grant a reasonable accommodation to their no pets policy to allow a potential tenant with a disability to rent a unit with her assistance animal. The consent order requires training on the Fair Housing Act, adoption of a compliant reasonable accommodation policy, reporting, and $7,000 in monetary damages for the complainant. The case was referred to the Division after the U.S. Department of Housing and Urban Development (HUD) received a complaint, conducted an investigation and issued a charge of discrimination.
United States v. Bayport Credit Union (E.D. Va.)
On March 18, 2022 the court entered a consent order in United States v. BayPort Credit Union (E.D. Va.). The complaint, which was filed on March 10, 2022, alleges that a credit union failed to cap servicemembers’ interest rates for pre-service loans at 6% and repossessed servicemembers’ motor vehicles without the required court orders. The consent order requires BayPort to pay $69,443.10 to 24 servicemembers and pay a $40,000 civil penalty. The agreement also includes changes in BayPort’s SCRA interest rate benefit and repossession policies and employee training.
Press Release - (03/18/2022)
Oceanview Home for Adults v. Howard Zucker, (E.D. N.Y.)
On February 24, 2022, the United States filed a Statement of Interest in the case of Oceanview v. Zucker Oceanview challenges a New York State regulation limiting admission of individuals with Serious Mental Illness (SMI) into segregated settings called Adult Homes, by alleging that the regulation violates the Fair Housing Act and the Americans with Disabilities Act. The State issued the regulation in conjunction with the United States’ settlement in U.S. v. New York, No. 13-cv-4165 (E.D.N.Y. 2013) and consistent with its Office of Mental Health’s determination that Adult Homes “are not clinically appropriate settings” for individuals with SMI, “nor are they conducive to the rehabilitation or recovery of such persons.” The Statement of Interest explains that the regulation does not violate the Fair Housing Act.