Second Circuit Affirms Landmark Decision, Approving One of the Largest Punitive Damages Awards Ever Achieved under the Fair Housing Act

 

The U.S. Court of Appeals Second Circuit has affirmed a precedent-setting $2.2 million appellate decision against the Town of Cromwell, Connecticut, for engaging in a discriminatory campaign to push a group home for men with mental health disabilities out of town. Gilead Community Services, a non-profit serving people with mental health disabilities in Connecticut since 1968, sought to open a six-person home in Cromwell in 2015. Responding to the discriminatory opposition of neighbors, Cromwell officials waged a campaign that resulted in the closure of the home in August 2015. The trial court judge denied the town’s motion for summary judgment in December 2019 and in October 2021 a jury found the town liable for violating the Fair Housing Act and awarded $181,000 in compensatory damages and $5 million in punitive damages. The district court rejected Cromwell’s post-trial motions, holding that Gilead had established causation, that the town was vicariously liable for the actions of its officials and that the punitive damages was appropriate. On August 12, 2024, the Second Circuit held that the FHA unambiguously allows private plaintiffs to seek punitive damages against any defendant, including a municipality. This sends a clear message about the costs of discrimination to municipal leaders and the constituents they represent. The appeals court panel determined that an award of $2 million in punitive damages would be sustainable. A $2 million award in punitive damages and $181,000 in compensatory damages remains one of the largest monetary punitive damages awards ever achieved in such a case. The punitive damages ratio of 11:1 in this case is a reflection of the severity of the discrimination endured by Gilead and its clients, and serves as an important reminder to municipalities throughout the country to stand up for the rights of all their residents, including those with disabilities. The plaintiffs were represented by the prestigious civil rights law firm of Relman Colfax. The Relman Colfax litigation team consists of Tara Ramchandani, Yiyang Wu, and Valerie Comenencia Ortiz, with paralegal assistance from Isabelle Charo and Reed Canaan. Read more here.

Housing Bias Complaints Continue to Trend Upward

Washington, D.C. — The number of fair housing complaints filed nationwide peaked to record numbers for the third year in a row, continuing an upward trend highlighting the need for adequate funding for local nonprofit fair housing agencies working to address growing housing injustices nationwide, the National Fair Housing Alliance® (NFHA™) said on Wednesday.

There were 34,150 fair housing complaints received in 2023, compared to 33,007 complaints received in 2022, according to findings in the 2024 Fair Housing Trends Report. There was a noticeably steep increase in the number of harassment complaints, particularly harassment based on color or race, which skyrocketed by 470.59 percent and 114.97 percent respectively.

“The continued increase in reports of housing discrimination means lawmakers are simply not doing enough to provide adequate resources for the organizations serving on the frontlines educating the public about fair housing laws and helping individuals and families when crucial civil rights laws are broken,” said Lisa Rice, NFHA’s President and CEO. “Fifty-six years after the enactment of the Fair Housing Act, we still have not dismantled the longstanding systems that continue to perpetuate discrimination against women, people of color, people with disabilities, and other historically marginalized groups.”

Despite recent news stories of high profile individuals facing inequities when seeking to buy a home or rent an apartment, reported cases only tell part of the story of housing discrimination. Most of the millions of housing discrimination incidents each year go unreported because they are difficult to identify or document. In other cases, individuals might fear facing retaliation or eviction if they file a complaint. Still, tracking the available data is important as it helps shine a light on where resources are most needed.

“Private nonprofit fair housing organizations (FHOs) processed 75.52 percent of complaints, a 5.68 percent increase from the previous year. These FHOs — which investigate fair housing complaints, collect data, provide fair housing counseling and education to consumers, and help clients file complaints — require significantly more funding to continue their important work. Congress must step up to ensure FHOs receive adequate funding to enforce the nation’s fair housing laws,” said Morgan Williams, NFHA’s General Counsel.

In addition, Fair Housing Assistance Program (FHAP) agencies processed 19.26 percent of complaints, while the U.S. Department of Housing and Urban Development (HUD) processed 5.10 percent of complaints, and the U.S. Department of Justice (DOJ) processed 0.12 percent of complaints. FHAP agencies, which are functions of local and state governments and enforce local and state fair housing laws; HUD, which enforces the Federal Fair Housing Act and conducts investigations throughout the nation and U.S. territories; and DOJ, which investigates and prosecutes fair housing complaints that present a pattern or practice of discrimination, must also be adequately funded by Congress to handle the increase in fair housing complaints in a timely manner.

Once again, discrimination based on disability accounted for the majority (52.61 percent) of complaints filed with FHOs, HUD, and FHAP agencies. There were 1,521 complaints of harassment reported, an increase of 66.23 percent. This number represents the highest number of harassment complaints reported since NFHA began reporting harassment-specific data in 2006.

NFHA has produced the Fair Housing Trends Report annually since the mid-1990s as part of its mission to eliminate housing discrimination and ensure equitable housing opportunities for all people and communities.

Eighty-six NFHA member organizations, either private non-profit fair housing organizations or fair housing programs of legal aid agencies, submitted data for this report. HUD’s 10 regional offices and 77 state and local government agencies in HUD’s FHAP program also provided data. In addition, the report contains information gathered from the DOJ.

• Click here to read the full report and view an interactive map highlighting key findings by state. 

Anyone who believes they have experienced housing discrimination may click here to file a complaint.

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The National Fair Housing Alliance (NFHA) is the country’s only national civil rights organization dedicated solely to eliminating all forms of housing and lending discrimination and ensuring equal opportunities for all people. As the trade association for over 170 fair housing and justice-centered organizations and individuals throughout the U.S. and its territories, NFHA works to dismantle longstanding barriers to equity and build diverse, inclusive, well-resourced communities.

Justice Department Secures Settlement in Discrimination Lawsuit for Blocking Affordable Housing Development

The Justice Department announced today that the Town of Franklinton (Franklinton), Louisiana, has agreed to pay $230,000 in damages and civil penalties to settle allegations that it violated the Fair Housing Act when it blocked a proposed affordable housing development for low-income tenants in a predominantly white part of Franklinton.

Under the agreement, Franklinton will also facilitate the development of new affordable housing to replace the units that it previously blocked, amend its zoning ordinance to increase the amount of land available for the development of multi-family housing and create a land donation program to support the development of affordable housing.   

“Developing affordable housing in high opportunity neighborhoods can have a transformative impact on the livelihoods of low-income residents of all races,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Fair Housing Act prohibits cities and towns from blocking low-income housing development because they believe that Black people will make up a large share of the future residents. Officials must ensure that affordable housing opportunities are made available and that all families have access to them regardless of race. The Justice Department will continue to hold jurisdictions accountable when they abuse their zoning power to deny equal access to housing opportunity.”

“Access to affordable housing free from discrimination is a right bestowed upon all Americans,” said U.S. Attorney Duane A. Evans for the Eastern District of Louisiana. “Denying affordable housing development for low-income individuals delays full achievement of the American Dream. The successful resolution of this Fair Housing Act matter provides low-income residents with the resources needed to achieve generational success.”

The complaint, filed on June 27, alleges that Franklinton discriminated because of race and color when it refused to approve zoning for a 40-unit development called Quail Run that would have been financed through the federal Low Income Housing Tax Credit (LIHTC), a tax incentive that subsidizes the construction and rehabilitation of rental housing affordable to low-income tenants. Franklinton is highly segregated, and although approximately 48% of its population is Black, that population is concentrated in the town’s north side. Quail Run would have been built on the south side, in a neighborhood that is over 80% white. Over 80% of Black households in Franklinton qualify as low-income and Black residents would have been significantly more likely than white residents to qualify to live in Quail Run. The construction of Quail Run would have disproportionately provided much needed housing opportunities to Black families in the part of Franklinton where the residents are predominantly white. 

As alleged in the complaint, Franklinton’s Zoning Commission unanimously recommended that Franklinton grant zoning approval for the development of Quail Run. However, the Mayor refused to consider the Zoning Commission’s recommendation and the town later denied Quail Run’s zoning application without the City Council ever holding a vote on the matter. As a result of Franklinton’s action, the developers had to return the tax credits and were not able to develop housing and the land remained vacant. The developers filed a complaint with the Department of Housing and Urban Development (HUD), which later referred the matter to the Justice Department.

“Low-income residents should have equal access to affordable housing in well resourced, low poverty neighborhoods,” said Principal Deputy Assistant Secretary Diane Shelley of HUD’s Office for Fair Housing and Equal Opportunity. “Jurisdictions that deny the development of affordable housing in neighborhoods for fear that future residents will be a certain race perpetuate segregation and violate the Fair Housing Act, which remains as important today as it was in 1968. HUD is proud to work with the Justice Department to root out illegal discrimination and uphold civil rights law.”

Under the settlement, which was approved on Friday June 28 by the U.S. District Court for the Eastern District of Louisiana, Franklinton will, among other things:

• pay $205,000 in damages to Quail Run’s developers and $25,000 in a civil penalty to the United States;
• approve and support the development of at least 40 units of affordable housing to replace the number of units that would have been included in the Quail Run development;
• rezone at least 20 acres of available land to make it available for the development of affordable housing;
• create a land donation program to support the development of affordable housing;
• revise its zoning procedures to increase transparency and ensure that uniform non-discriminatory standards are applied in Franklinton’s residential land use decisions;
• provide training on fair housing and zoning procedures to its officials and employees who are involved in land use and zoning; and
• hold a public listening session on the town’s need for housing and host an educational program for Franklinton’s residents to learn about their fair housing rights.

Individuals who believe they have been victims of housing discrimination practices can file a complaint at fairhousingflorida.com or call 561-533-8717.

FHC files Federal Lawsuit alleging Florida SB264 Housing Law violates Federal Fair Housing Act

Today the Fair Housing Center of the Greater Palm Beaches, Housing Opportunities Project for Excellence (H.O.P.E., Inc.), National Fair Housing Alliance (NFHA) and the Asian Real Estate Association of America (AREAA) filed a fair housing discrimination suit in federal court in Miami challenging Florida’s SB 264, a state law that greatly restricts people from China, Russia, Iran, North Korea, Cuba, Venezuela, and Syria from purchasing real property in the state.

The law almost completely prohibits Chinese citizens and people domiciled in China from buying property in the state. People domiciled in one of the other six countries are prohibited from buying real property within ten miles of critical infrastructure facilities or military institutions—a restriction that covers 98.5% of all residential land in the state.

“Xenophobia has no place in our country—and let there be no mistake, that’s precisely what SB 264 is,” said Noah Baron, Assistant Director of Litigation at Advancing Justice – AAJC. “This legislation echoes last century’s ‘alien land laws,’ which also restricted the property rights of Asian Americans on the basis of stereotypes and prejudice. The United States must not continue down this dangerous road; we know where it leads because we have traveled it before: during World War II when unfounded suspicions of Japanese Americans led to the forced imprisonment of over 120,000 Japanese Americans by the U.S. government and going as far back as the 1882 Chinese Exclusion Act.” 

“The people of Florida deserve better than a government that says ‘you are not welcome’ to large groups of people just because they were born in a particular country,” said Vince Larkins, President and CEO of Fair Housing Center for the Greater Palm Beaches. “We cannot sit idly by while housing discrimination is now the official policy of the State of Florida.”

The lawsuit filed by Relman Colfax, Asian Americans Advancing Justice – AAJC, and Courtney Cunningham asserts that SB 264 violates the federal Fair Housing Act, which prohibits acts that are motivated by a person’s national origin or have a disproportionate harmful effect on people from specific countries. As described in the complaint, SB 264 is based on stereotyped and xenophobic generalizations, and is transparently motivated by discrimination against people from the seven targeted countries.

“SB 264 is reminiscent of early twentieth century land laws that attempted to prevent Asian and other immigrants deemed undesirable from settling in the United States. This law is one of the most discriminatory housing prohibitions this country has seen since the Fair Housing Act was passed in 1968. Legislation such as this prevents people from purchasing homes and becoming, or continuing to be, valued members of the community. SB 264 cannot be permitted to stand,” said Keenya Robertson, President and CEO of Housing Opportunities Project for Excellence, Inc.

“This is a momentous day for AREAA and our 19,000 members as it is the first time we have filed suit to protect the rights of the AANHPI community,” said Jamie Tian, President of AREAA. “SB 264 must be defeated. Florida legislators and Governor DeSantis have wrongly targeted Chinese, and other select groups of immigrants. They have opened the door for greater discrimination while creating increased barriers of homeownership entry for prospective AANHPI homebuyers and sellers. My parents came to the U.S. from China as PhD candidates and they eventually bought a home in Irvine, California. I shudder to think about what my parents would have gone through today if they had settled in Florida. It’s infuriating to realize we now live in a reality where government leaders are putting homeownership out of reach for AANHPI people in Florida.”

The law was promoted by Governor DeSantis who described it as part of an effort to prevent people from certain countries from “worming” their way into American society. The bill’s sponsor described it as targeting foreign agents, but its broad sweep captures people lawfully in the United States and vetted by immigration officials such as people on student visas, domestic employment and seasonal worker visas, and visas for victims of criminal activity and human trafficking. People from the targeted countries who already own property in the state are required to register with the Florida Department of Commerce. The penalties for violating the law include felonies punishable by as much as five years imprisonment and can be applied to buyers, sellers, and real estate professionals.

“The federal Fair Housing Act was signed into law to eliminate the race-based barriers to housing that have plagued our nation since its inception. SB 264 is contrary to the spirit of our nation’s fair housing laws and tramples on the rights of people of Asian descent and other immigrants. It sends the dangerous message that discrimination in housing based on national origin is acceptable in the state of Florida,” said Lisa Rice, President and CEO of the National Fair Housing Alliance. “We look forward to vindicating the fair housing rights of Asians and other immigrants in Florida and making it possible for them to secure stable housing.”

The sponsors’ defense of the bill is to cite national security concerns, but people from the targeted countries make up a tiny percentage of all residential property buyers in the state and the legislative record identified no link between the purchase of residential property and security threats. With no basis, SB 264 explicitly targets individuals from the seven targeted countries for disfavored treatment while imposing no similar restrictions on nationals of any other country. The legislation impedes the pursuit of the American dream for families from China and the other countries who aspire to build a life in this country free from discrimination.

“It is our expectation that the court will find this explicitly discriminatory law as a violation of the Fair Housing Act and strike it down,” said Reed Colfax, a partner with Relman Colfax. 

To view the full complaint click here.