Timing Is Everything: Avoiding And Defending Against Retaliation Claims

This month's issue of Fair Housing Coach focuses on what fair housing experts see as a growing trend in potential liability under fair housing law—retaliation claims.

The most well-known provisions of fair housing law target discriminatory housing practices, but it is also unlawful to “coerce, intimidate, threaten, or interfere with” anyone who has exercised his rights under fair housing law—as well as anyone who has helped or encouraged someone to do so. Fair housing experts explain that these provisions bar anyone from retaliating against an applicant or resident for filing a discrimination claim, so communities could be liable for a retaliation claim—even if the resident ultimately loses the discrimination case.

Example: On July 16, 2010, HUD announced that an administrative law judge ordered an Iowa community to pay $52,150 in damages and civil penalties for retaliating against a single mother of three by threatening to evict her because she filed a housing discrimination complaint. The complaint alleged that the community refused to rent her a three-bedroom apartment and unjustly charged her a higher security deposit because of her sex.

HUD found no evidence of sex discrimination, but charged the owner and management company with unlawfully retaliating against the resident by terminating her lease and attempting to evict her because she filed a housing discrimination complaint. The administrative law judge awarded her $20,150 in damages and assessed a $32,000 civil penalty against the owner and his management company.

“HUD will not tolerate retaliation against individuals who file discrimination complaints,” Assistant Secretary for Fair Housing and Equal Opportunity John Trasviña said in a statement. “Discrimination victims are not alone when exerting their rights under the Fair Housing Act.”

The broad language of the retaliation provisions—making it unlawful to “coerce, intimidate, threaten, or interfere with” anyone who has exercised his rights under fair housing law—does more than simply bar a housing community from evicting a resident for filing a fair housing claim. Unless you are aware of the full implications of the law, you inadvertently could trigger a fair housing complaint under these provisions.

This month, we'll review the specifics of who and what is covered under the retaliation provisions. Then we'll suggest five rules to help your community prevent and defend itself against fair housing retaliation claims. Finally, you can take the COACH's Quiz to see how much you've learned.

WHAT DOES THE LAW SAY?

The Fair Housing Act (FHA) prohibits housing discrimination on the basis of race, color, religion, sex, national origin, familial status, or disability. Housing providers, among others, may be required to pay damages—including punitive damages—as well as penalties and attorneys' fees if found guilty of specified discriminatory housing practices that make housing unavailable to members of protected classes.

To prevent anyone from discouraging potential discrimination victims from coming forward with complaints, the FHA also makes it unlawful “to coerce, intimidate, threaten, or interfere with any person” who is or has exercised or enjoyed any rights granted or protected under the antidiscrimination sections of fair housing law—or anyone else on account of his having aided or encouraged any other person to do so.

At the most basic level, these provisions make it unlawful for a housing provider to take retaliatory action—such as commencing eviction proceedings—against a resident because he filed a discrimination complaint. Furthermore, the retaliation provisions may apply even in the absence of a formal fair housing complaint. For example, a community could be accused of retaliation for refusing to rent to an applicant because he complained orally about discrimination during the application process.

Communities should also be aware that it's not necessary to be a member of a protected class to file a retaliation claim. The law applies to prospects, applicants, and residents who are themselves—or have friends and associates who are—members of protected classes. It also applies to others such as employees or neighbors who help or encourage members of protected classes in the exercise or enjoyment of their fair housing rights.

Meanwhile, the scope of these provisions extends beyond retaliation to ban coercion, intimidation, threats, or interference with anyone exercising or enjoying his fair housing rights. The law has a particularly broad application because courts have interpreted “interference” to “reach all practices which have the effect of interfering with the exercise of rights under the federal fair housing law.”

HUD regulations reflect a broad interpretation of the retaliation provisions, offering these examples of unlawful conduct:

• Coercing a person (either orally, in writing, or by other means) to deny or limit the benefits provided that person related to the rental of a dwelling because of race, color, religion, sex, handicap, familial status, or national origin.

• Threatening, intimidating, or interfering with persons in their enjoyment of a dwelling because of the race, color, religion, sex, handicap, familial status, or national origin of such persons, or of visitors or associates of such persons.

• Threatening an employee or agent with dismissal or an adverse employment action, or taking such adverse employment action, for any effort to assist a person seeking access to the rental of a dwelling, because of the race, color, religion, sex, handicap, familial status, or national origin of that person or of any person associated with that person.

• Intimidating or threatening any person because that person is engaging in activities designed to make other persons aware of, or encouraging such other persons to exercise, rights granted or protected by fair housing law.

• Retaliating against any person because that person has made a complaint, testified, assisted, or participated in any manner in a proceeding under fair housing law.

In fair housing cases, courts generally apply the same three-step analysis used in employment retaliation cases—in essence, a series of hurdles for each party to meet.

In the first step, the person filing the claim—usually the applicant or resident in fair housing cases—has to prove that:

• He engaged in the exercise or enjoyment of his fair housing rights;

• He suffered an adverse action—in the form of coercion, intimidation, threats, or interference; and

• There was a causal connection between the two.

If he doesn't have enough proof to satisfy each of those requirements, the case is dismissed.

If he can, then the second step requires the defendant—usually the housing community or property manager in fair housing cases—to prove that it had a legitimate, nondiscriminatory reason for its actions. If it can't, the applicant or resident wins.

If it can, then the third and final step shifts back to the applicant or resident, who must show that the community's stated reason for its actions was merely an excuse—in legal terms, a pretext—to cover up unlawful retaliation. Unless he can satisfy this requirement, the community is not liable.

This crash course in how courts analyze retaliation cases shows how complicated they can be—and how much depends upon the quality of the evidence produced by each side. In practical terms, it demonstrates the importance of applying uniform policies and procedures to ward off potential claims—and to maintain detailed records to document legitimate, nondiscriminatory reasons for your actions so you can successfully defend any retaliation complaints filed against you.

5 RULES FOR AVOIDING AND DEFENDING AGAINST FAIR HOUSING RETALIATION CLAIMS

Rule #1: Don't Retaliate Against Anyone Who Raises Discrimination Concerns

Since the FHA makes it unlawful to “coerce, intimidate, threaten, or interfere” with any person for exercising his rights under the FHA, the most basic rule for avoiding retaliation complaints is to adopt a policy—and to train your staff—not to do anything to punish anyone for voicing discrimination concerns, even in the absence of a formal fair housing complaint.

The law applies to a broad range of adverse actions beyond the obvious forms of retaliation—denying an application, evicting a resident, not renewing a lease, delaying or denying services, or imposing rent increases—if motivated by discriminatory intent. Any conduct that appears to be threatening, intimidating, or designed to discourage the resident from pursuing her rights under federal fair housing law could be costly.

Timing is a particularly crucial issue in retaliation cases—the closer the time an adverse action follows a discrimination complaint, the more likely a court will find that the adverse action was in retaliation for the discrimination complaint.

And remember, the retaliation provisions apply even if the applicant or resident makes an unfounded allegation of discrimination—however unfair or offensive. It may be natural to be angry or insulted by what you believe is a bogus discrimination claim, but fair housing experts warn that you run the risk of a retaliation claim if you take any action against the applicant or resident because of his accusations.

COACH'S TIP: In an effort to resolve the applicant or resident's concerns, make sure that you don't do or say anything to pressure him not to pursue a fair housing complaint. Anything that looks like a threat or a bribe could be interpreted as interfering with his fair housing rights.

Rule #2: Don't Ignore Lease Violations, But Be Prepared for Potential Retaliation Claim

Despite the FHA's retaliation provisions, you don't have to accept an applicant simply because he raises discrimination concerns. For example, you may deny an application if an applicant fails to meet the reasonable screening criteria that you apply to all applicants—even if he accuses you of rejecting his application because of his race or other protected characteristic.

By the same token, you do not have to tolerate a resident's bad behavior or serious lease violations just because the resident has filed a prior discrimination complaint against your community.

Example: In June 2010, a federal court sided with the Philadelphia Housing Authority to dismiss a retaliation claim filed by a former resident who had previously filed a sexual harassment complaint with the state human rights commission. During the 10-plus years she lived there, the resident said that she had been subjected to multiple “assaults” and false complaints lodged by her neighbors. In 2006, she said that she complained to the site manager about a maintenance worker's allegedly sexually offensive remark, but the manager didn't do anything about it. Allegedly, the resident couldn't file a formal complaint simply based on the inappropriate comment, so she falsely accused him of physically assaulting her.

In the months following the sexual harassment complaint, the housing authority received multiple complaints against the resident by neighbors who accused her of verbally assaulting them, beheading a neighbor's cat, and inviting a neighbor's child into her unit and refusing to let her go until police were called.

Citing lease violations, the housing authority evicted her. She filed an FHA retaliation claim, but the court rejected the claim, ruling that the housing authority had a legitimate and nondiscriminatory reason for taking action against the resident. The court said the resident had no evidence to show that her behavior was a pretext to evict her other than her conclusory claims that the manager harbored ill-will toward her for filing the sexual harassment complaint. Furthermore, her complaint had been filed nearly a year earlier—and there was nothing to explain why the manager, if she intended to evict the resident because of the complaint, didn't do it then [Madison v. Philadelphia Housing Authority, June 2010].

To avoid retaliation claims, take a few precautions before taking any adverse action against anyone who has raised discrimination concerns—formally or otherwise. It's generally a good idea to call your attorney—who may be able to head off any potential problems—to make sure you have everything in place to respond effectively if the applicant or resident files a retaliation claim against you.

Rule #3: Document Legitimate Reasons for Changes in Policies and Procedures

A community has the right to establish reasonable policies and procedures for its operations and the conduct of its residents and guests, and to change them from time to time for legitimate business reasons. Just be sure to fully document when and why you make or change your rules or how they are enforced. Otherwise, you could be accused of interfering with a resident's fair housing rights if it appears that the rule changes are motivated by unlawful discrimination.

Example: In June 2010, a Georgia appeals court reinstated a lawsuit filed by a condo owner, who accused her condo association of discrimination and interference with the exercise of her fair housing rights by amending its bylaws because of racial discrimination. The condo owner bought her unit as her primary residence in 2004 and bought a second unit a few months later. The condo owner alleged that when she told the condo association president that she rented the second unit to an African-American woman, the president expressed concern about how other residents would react. The night before the tenant was to move in, the condo owner said that she received a call from a neighbor who used racial epithets and said that she didn't want minorities living there. Allegedly, the president told her that amendments prohibiting leasing were being proposed because of her new tenant. After the rule change was approved, the condo owner said that the new tenant moved for personal reasons, and that the unit was vacant when the rules took effect.

A year later, the condo owner sued under state fair housing law. The trial court dismissed the case, but the appeals court reversed, ruling that the condo owner was entitled to further proceedings in her claims of racial discrimination and interference with her fair housing rights. Although the condo association argued it had discussed restricting unit owners' ability to lease their property because of concerns about property values a year before the condo owner bought her units, the court said that the minutes of its meetings did not mention these discussions. The court ruled that the timing of the bylaw amendments combined with alleged racially discriminatory comments of the president and the neighbor could suggest that the rule changes were adopted for discriminatory reasons [Bailey v. Stonecrest Condo. Assoc., Inc., June 2010].

Even if you don't formally change your rules, you could trigger a claim under the FHA's retaliation provisions if your community reinterprets existing rules or changes the way they are enforced for discriminatory reasons.

Example: In November 2009, a federal appeals court reinstated a fair housing case involving a condo owner who accused her condo association of religious discrimination and interference with her fair housing rights by repeatedly removing a religious object from her doorway.

The condo owner alleged that, in accordance with her Jewish beliefs, she had a mezuzah—a case containing religious texts—affixed to the hallway side of the doorpost of her unit. Allegedly, the mezuzah was in place when the community adopted rules to prohibit owners from placing signs or objects of any sort outside their doors. Several years later, it was removed to allow repainting of the hallways, but the condo owner claimed that the community refused to allow her to put it back up and repeatedly removed it each time she tried to do so.

After a series of proceedings, the case was dismissed, but the appeals court reversed it, ruling that the condo association could be liable for discrimination if the condo owner could prove that the board intentionally discriminated against her by reinterpreting its hallway rules to apply to the mezuzah because of religious discrimination. Furthermore, the court said that the allegations of a pattern of conduct—repeatedly ripping down the mezuzot over a year's time—could constitute “interference” if it were motivated by intentional discrimination [Bloch v. Frischholz, November 2009].

To show that you are not acting with discriminatory intent, it's important to document that you have legitimate business reasons for adopting or changing community rules or altering the way they are enforced. Furthermore, documentation of the timing of rule changes is critical to your defense: To prove that your rule changes had nothing to do with the resident, you'll need to demonstrate that you changed the rules—or were actively considering them—before you had any inkling of a resident's discrimination concerns.

Rule #4: Don't Retaliate Based on Disability-Related Requests

Discrimination based on disability is now the most common reason for filing fair housing complaints. In addition to banning communities from excluding or otherwise discriminating against individuals with disabilities, the FHA requires communities to allow reasonable accommodations in their policies—or reasonable modifications to the property—if necessary to allow individuals with disabilities to use and enjoy their dwellings.

It can be challenging to resolve disability-related requests at least in part because so much depends upon the facts of each case—the nature of the disability, the specifics of the requested accommodation or modification, and the reasons why it's needed. Furthermore, you have to ensure that you comply with specific rules governing what you can and can't do to resolve such requests. In cases where you don't believe a requested accommodation is reasonable, federal enforcement guidelines call for housing providers to engage in an “interactive process” to discuss possible alternatives.

Despite the challenges, you can't short-circuit the process by doing anything to discourage or otherwise interfere with the applicant or resident's rights to reasonable disability-related accommodations or modifications under fair housing law.

Example: In March 2010, a federal judge refused to dismiss a fair housing case filed by the representative of a disabled resident against a housing community, a nonprofit organization that allegedly arranged for him to live there, and its director. According to the complaint, the resident had schizophrenia, a mental disorder that interfered with his ability to think clearly and make decisions, to distinguish reality from fantasy, and to relate to others.

The complaint alleged that the resident's unit was rife with problems, including rats, mold and mildew, a foul odor, and dysfunctional air conditioning. For at least a year, according to the complaint, the representative complained repeatedly about the problems, but nothing was done to fix them until HUD and state code enforcement officials were notified.

The representative filed a complaint with HUD, claiming that the community and others engaged in discriminatory housing practices and refused to take reasonable actions to accommodate the resident's disability. Meanwhile, the representative said that her efforts to remedy the problems through code enforcement officials led to criminal charges against the community, which were ultimately resolved. In addition to the discrimination charges, the complaint alleged that the resident was subjected to retaliation, coercion, interference, intimidation, and harassment due to the complaints about the unit.

Arguing that the complaint was frivolous, the defendants asked the court to dismiss the case. The judge refused, ruling that the resident was entitled to further proceedings on the fair housing claims. With respect to the retaliation claim, the judge said that allegations that the defendants retaliated against the resident for attempting to receive accommodations and for filing complaints with HUD and state code enforcement officials by threatening to terminate his lease, mentally antagonizing him, and levying frivolous fines against him could amount to a violation of the FHA's antiretaliation provisions [Lee v. McCreary, March 2010].

Rule #5: Don't Retaliate Against Employees or Others Who Raise Discrimination Concerns

The FHA's ban on retaliation applies not only to applicants or residents who claim to be victims of housing discrimination, but also to anyone who helps or encourages alleged discrimination victims to pursue their rights under fair housing law.

Those provisions protect employees from adverse employment actions—such as being fired, demoted, or harassed—for opposing discriminatory practices or advising aggrieved residents to contact HUD or other fair housing agencies. That means that, in addition to any liability to the victims of alleged discrimination, a community could be required to pay damages to any employee who was subjected to disciplinary action because she supported the alleged victims in pursuing their rights.

Example: Earlier this year, the Justice Department announced a combined $2.13 million settlement to resolve allegations that the owners and managers of a Kansas City high-rise rental community created a racially hostile environment and retaliated against a former employee for cooperating with HUD investigators and assisting others to file complaints with HUD.

According to the complaint, the community's manager openly displayed racially hostile materials, such as hangman's nooses, frequently referred to African Americans with racial epithets, and generally treated white residents more favorably than African-American residents. The complaint also alleged that, upon learning about what the employee told HUD and an alleged discrimination victim, the manager falsely accused her of improper conduct, leading to the employee's suspension and ultimate dismissal.

The claims against the community, which denied the allegations, were resolved in February 2010, when the court approved a settlement calling for the community to pay $1.89 million in damages and a $95,000 civil penalty. In May 2010, the court issued a separate order against the community manager, permanently banning her from working in rental housing and ordering her to pay a $55,000 civil penalty [United States v. Sturdevant, May 2010].

You could also get into trouble under the retaliation provisions if you take action against residents—even if they are not members of a protected class—for opposing discrimination against their neighbors.

Example: Late last year, the Justice Department filed a fair housing case against the owners and managers of a 48-unit South Dakota community for discrimination and retaliation against an African-American family and two white families. The complaint alleged that the defendants used pervasive racial epithets and engaged in threatening, harassing, and intimidating conduct after the families filed a discrimination complaint with the local housing authority.

The lawsuit arose as a result of complaints filed with HUD, which accused the managers of interfering with the African-American family's ability to enjoy their home. Among other things, HUD claimed that employees tried to isolate the African-American family from their neighbors by soliciting false statements, refusing to make timely repairs, and threatening eviction. HUD also accused the community of intimidating white residents who came to the family's defense by subjecting them to repeated harassment and retaliation, including threats of violence and eviction.

“For HUD and the Department of Justice to combat housing discrimination, we need people to report it when they see it,” HUD Assistant Secretary for Fair Housing and Equal Opportunity John Trasviña said in a statement. “That's why it's equally important that we enforce the law against anyone who attempts to intimidate those who report discrimination or who assists others trying to exercise their rights” [United States v. TK Properties, LLC, October 2009].

• Fair Housing Act: 42 USC §3601 et seq.

• HUD regulations, 24 CFR §100.400: Prohibited interference, coercion, or intimidation.

COACH Sources

F. Willis Caruso, Esq.: Co-Executive Director, The John Marshall Law School Fair Housing Legal Support Center and Clinic, 321 S. Plymouth Ct., Ste. 800 Chicago, IL 60604; (312) 786-9842; 6Caruso@jmls.edu.

Robin Hein, Esq.: Attorney at Law, Fowler, Hein, Cheatwood and Williams, P.A., 2970 Clairmont Rd., Ste. 220, Atlanta, GA 30329; (404) 633-5114; RobinHein@ApartmentLaw.com.