Property Management Company to Pay Nearly $75,000 to Resolve Servicemembers Civil Relief Act Claims

The Justice Department today announced that FPI Management Inc. (FPI) has agreed to pay $74,087 to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by imposing unlawful charges on nine servicemembers who were exercising their right to terminate their apartment leases after receiving military orders to relocate.

“The right for servicemembers to terminate leases without penalty when military orders send them elsewhere is a critical protection for people who already sacrifice so much,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department will continue to enforce federal civil rights laws to ensure that paying rent for housing they no longer need is not another sacrifice servicemembers must bear.”

“The SCRA protects servicemembers who have answered our country’s call to serve,” said U.S. Attorney Phillip A. Talbert for the Eastern District of California. “The U.S. Attorney’s Office and our partners in the Civil Rights Division stand ready to vindicate those rights, to allow our servicemembers to focus on their duty and relieve stress on them and their families.”

The SCRA extends various protections to servicemembers to allow them to devote their entire energy to the national defense. The SCRA provides protections for servicemembers in areas such as evictions, security deposits, pre-paid rent, civil judicial proceedings, installment contracts, interest rates, foreclosures and automobile leases. The SCRA also allows servicemembers to terminate their residential leases after entering military service or receiving military orders for a permanent change of station, deployment or retirement. Landlords are prohibited from imposing an early termination charge on servicemembers who terminate their leases under the SCRA.

The department launched an investigation into FPI’s leasing practices after receiving a referral from Coast Guard Legal Assistance about two instances where FPI attempted to require servicemembers who were terminating their leases early under the SCRA to repay discounts they had received when they signed the lease. In one case, FPI required Coast Guard Petty Officer First Class Aaron Gomez and his wife to repay $8,590 in lease concessions after they terminated their lease at an apartment building in Oakland, California, near Coast Guard Island Alameda. In the other case, FPI told Coast Guard Petty Officer First Class William Fuchs that he would have to repay $7,838 in lease incentives after he terminated his lease at the same apartment building. Fuchs had just received military orders to relocate Charleston, South Carolina.

In a complaint filed in the U.S. District Court for the Eastern District of California, the department alleges that FPI unlawfully imposed early termination charges on a total of nine servicemembers who had exercised their right to terminate their residential leases upon receipt of qualifying military orders.

Under the consent order, which still must be approved by the court, FPI has agreed to pay a total of $51,587 to the servicemembers and a $22,500 civil penalty to the United States. The order also requires FPI to repair the servicemembers’ tenant database entries, implement new policies and procedures that comply with the SCRA and training its employees on the SCRA.

Since 2011, the Justice Department has been awarded over $481 million in monetary relief for over 146,000 servicemembers through its enforcement of the SCRA. For more information about the department’s SCRA enforcement efforts, please visit www.servicemembers.gov.

Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at legalassistance.law.af.mil 

Justice Department Secures Over $3 Million Redlining Settlement Involving ESSA Bank & Trust in Philadelphia

The Justice Department announced today that ESSA Bank & Trust (ESSA) has agreed to pay over $3 million to resolve allegations that it engaged in a pattern or practice of lending discrimination by redlining majority-Black and Hispanic neighborhoods in and around Philadelphia. Redlining is an illegal practice in which lenders avoid providing credit services to individuals living in communities of color because of the race, color or national origin of the residents in those communities.

The complaint filed in federal court today alleges that from at least 2017 to 2021, ESSA failed to provide mortgage lending services and did not serve the credit needs of majority-Black and Hispanic neighborhoods in the Philadelphia metropolitan area.

“For too long, residents of communities of color have been unlawfully denied equal access to credit and shut out of economic opportunities,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “When banks engage in redlining, they perpetuate existing patterns of segregation and widen the racial wealth gap in our country. This resolution makes clear our commitment to holding banks and financial institutions accountable for modern day redlining while ensuring access to fair lending in communities of color.”

“Accessing the American dream of owning your own home is possible only when there is equality for all in their opportunities to access lending in the residential mortgage markets,” said U.S. Attorney Jacqueline C. Romero for the Eastern District of Pennsylvania. “Redlining in Greater Philadelphia has deep roots; it’s led to decades of disinvestment in communities of color. We appreciate ESSA’s prompt cooperation with the department’s investigation and their efforts that will aim to infuse lending resources and help build wealth in neighborhoods of color.”

Under the proposed consent order, which is subject to court approval, ESSA has agreed to invest at least $2.92 million in a loan subsidy fund to increase access to credit for home mortgage, improvement and refinance loans, as well as home equity loans and lines of credit, in majority-Black and Hispanic neighborhoods in the bank’s lending area. ESSA has also agreed to spend an additional $125,000 on community partnerships and $250,000 on advertising, outreach, consumer financial education and credit counseling, in an effort to expand the bank’s services in majority-Black and Hispanic communities. The consent order also requires the bank to hire two new mortgage loan officers to serve its existing branches in West Philadelphia and conduct a research-based market study to help identify the needs for financial services in communities of color.

The department opened its investigation into ESSA’s lending practices after receiving a referral from the Federal Deposit Insurance Corporation. ESSA fully cooperated with the department’s investigation and worked expeditiously to resolve these allegations.

In October 2021, the department launched its Combating Redlining Initiative as a coordinated enforcement effort to address this persistent form of discrimination against communities of color. Since the initiative was launched, the department has announced seven redlining cases and settlements and secured $87 million in relief for communities of color that have been victims of lending discrimination across the country.

NAACP Issues Florida Travel Advisory, Joining Latino and LGBTQ+ Groups

Washingtom DC—- The NAACP Board of Directors has issued a formal travel advisory for the state of Florida. In a statement last Saturday the NAACP said that the travel advisory was in “direct response to Gov. Ron DeSantis’s aggressive attempts to erase Black history and to restrict diversity, equity and inclusion programs in Florida schools.”

The NAACP joins the League of United Latin American Citizens, a civil rights organization that issued a Florida travel warning last Wednesday, and Equality Florida, a gay rights advocacy group that issued one last month.

The formal travel notice states, “Florida is openly hostile toward African Americans, people of color and LGBTQ+ individuals. Before traveling to Florida, please understand that the state of Florida devalues and marginalizes the contributions of, and the challenges faced by African Americans and other communities of color.” 

“Let me be clear – failing to teach an accurate representation of the horrors and inequalities that Black Americans have faced and continue to face is a disservice to students and a dereliction of duty to all,” said NAACP President & CEO Derrick Johnson. “Under the leadership of Governor Desantis, the state of Florida has become hostile to Black Americans and in direct conflict with the democratic ideals that our union was founded upon. He should know that democracy will prevail because its defenders are prepared to stand up and fight. We’re not backing down, and we encourage our allies to join us in the battle for the soul of our nation.”

The travel advisory was initially proposed to the Board of Directors by NAACP’s Florida State Conference. NAACP’s collective consideration of this advisory is a result from unrelenting attacks on fundamental freedoms from the Governor and his legislative body. 

“Once again, hate-inspired state leaders have chosen to put politics over people. Governor Ron DeSantis and the state of Florida have engaged in a blatant war against principles of diversity and inclusion and rejected our shared identities to appeal to a dangerous, extremist minority,”said Chair of the NAACP Board of Directors, Leon Russell. “We will not allow our rights and history to be held hostage for political grandstanding. The NAACP proudly fights against the malicious attacks in Florida, against Black Americans. I encourage my fellow Floridians to join in this fight to protect ourselves and our democracy.”

DOJ Settles COVID-Era Disability Discrimination Case Against a Continuing Care Community

The Department of Justice has announced the settlement of a HUD election case that requires sweeping reasonable accommodation policies applicable to eight continuing care communities (also known as CCRCs) where elderly residents have access to a continuum of health care, including residential living, assisted living, and skilled nursing care.   

Relman Colfax filed an administrative complaint on behalf of Ruth Gural and her son Harry Gural with HUD on August 5, 2020, alleging that the owners and operators of the RiverWoods Senior Living Community in Lewisburg, Pennsylvania, violated the Fair Housing Act. That complaint alleged that after years of living peacefully in her own apartment, RiverWoods threatened to evict Ruth who had progressive memory loss and needed assistance with activities of daily living because Harry insisted on staying with her—beginning in March 2020—to provide her care and support and to protect her from COVID during the pandemic, when RiverWoods barred family, friends and private caregivers from even visiting residents. 

On January 12, 2022, the U.S. Department of Housing and Urban Development (HUD) issued a Determination and Charge in the case against Albright Care Services and Asbury Communities, Inc., operators of Riverwoods and seven other continuing care communities for discriminating against Ruth as a person with disabilities who needed support from her son who stayed with her as a live in aid throughout the COVID pandemic.

HUD said that the ongoing COVID-19 pandemic made it reasonable for the Gurals not to rely on third-party aides who could present a risk to Ruth’s health and would not create an undue financial and administrative burden or alter the nature of RiverWoods’ program. The Gurals elected to have the case referred to the United States Department of justice for federal court prosecution.

On April 11, 2023, the Department of Justice announced that the case had been settled, with a Consent Decree that requires Albright and Asbury to adopt reasonable accommodation policies at all eight of Asbury’s continuing care retirement communities, make changes in their Handbooks and Resident Agreements to reflect the availability of reasonable accommodations, and provide notice and training to all of Albright and Asbury’s owners, principals, executives and upper management and senior leadership, including their sales and marketing departments, about the Consent Order and the policies.   Harry Gural and the Estate of Ruth Gural received $215,000 in damages and attorneys’ fees under the settlement.

The Relman Colfax team consists of Reed Colfax and Sara Pratt, with paralegal assistance from Margaret Moran.

A copy of the DOJ Complaint, Consent Decree and Press Release are here.