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The Leadership Conference on Civil and Human Rights

The Nation's Premier Civil and Human Rights Coalition
The Leadership Conference on Civil and Human Rights & The Leadership Conference Education Fund
The Nation's Premier Civil and Human Rights Coalition
The Future of Fair Housing: Report of the National Commission on Fair Housing and Equal Opportunity. December 2008.

Fair Housing Enforcement at the Justice Department is Weak

The Civil Rights Division of the United States Department of Justice, specifically the Housing and Civil Enforcement Section (Section), has broad authority under the Fair Housing Act. Most important is its authority to bring systemic cases that allege a pattern and practice of discrimination or the denial of fair housing rights that raise an issue of general public importance.[130] This authority includes discretion to file cases involving the legality of any state or local zoning or other land use law; furthermore, HUD is required to refer any complaint of zoning or land use discrimination to the Department for investigation and determination as to whether to bring suit.[131] It also is required to bring what are known as "election" cases where HUD has made a determination that there is reasonable cause to believe that the Fair Housing Act has been violated and one of the parties to the matter elects to have the issue litigated in federal court rather than before an administrative law judge.[132] These cases typically involve alleged acts of discrimination against individuals or individual entities.

The Department of Justice (DOJ) is the entity in the federal government that has the necessary resources and the authority to develop and litigate the most systemic and damaging patterns of discrimination as well as those of the most public importance. As one Commission witness testified, "A case brought by the Division reverberates throughout the community, the state, and the region. It can have industry-wide impact in terms of deterrence and reform. The broad-based injunctive relief that the Division can pursue cannot be matched through the efforts of individual or private lawsuits alone."[133]

Decline in Number of Cases Brought

In recent years, the number of cases brought by the Section has declined from previous years. Based on an estimate of 30 attorneys, the Section has filed an average of only 6.9 cases per year over the past eight years and nearly all of the cases involved discrimination in the rental market.[134] It is evident that a less aggressive enforcement posture has been implemented in this period. Only a handful of cases address issues involving real estate sales and only five address racial discrimination in subsidized or low income housing.[135] There has been a significant reduction in fair lending cases,[136] and no recent cases have been brought that directly address the types of discriminatory predatory lending practices partly responsible for the present financial crisis. Although the Department of Justice played a key role in challenging racial steering practices in the 1970s,[137] no recent cases alleging real estate steering based on race or national origin have been brought, nor have there been any cases alleging discrimination in the provision of homeowners’ insurance, both of which have contributed to segregated residential living patterns.

Underutilized Testing Program

One of the Department of Justice’s most potent enforcement tools has not been fully and efficiently utilized in recent years. DOJ initiated its own testing program in 1992 and it quickly became an important investigative tool for important pattern and practice cases. For instance, during the three year period from 1996 to 1998, DOJ filed 24 cases based on testing evidence.[138] By comparison, despite an announcement in February 2006 of a "reinvigorated" testing program called Operation Home Sweet Home, in a similar three-year period from 2006 to 2008, DOJ filed only eight cases based on its own testing evidence.[139] Moreover, there are significant differences both in the numbers and the percentages of cases dealing with discrimination based on race and national origin. In the period between 1993 and 2000, a total of 60 cases were filed by DOJ based on testing evidence and of those, 41, or 68 percent, were based on testing evidence involving discrimination based on race or national origin. In the period between 2001 and 2008, DOJ only filed 19 cases based on testing evidence and only 8 of those (42 percent) involved discrimination based on race or national origin.

Few Land Use and Zoning Cases Being Brought

Similarly, DOJ has also backtracked with respect to cases alleging discriminatory land use or zoning decisions, an especially important area of fair housing enforcement given the long history of such discrimination and the complexity and difficulty of such cases. According to testimony, "not a single case challenging land use or zoning practices based on race or national origin has been filed...since 2004."[140]

Fair Lending Cases Are Not Being Brought

Litigation by the Department of Justice challenging lending discrimination has also been seriously reduced, which may have contributed to the worsening of the foreclosure crisis.[141] During the 1990s, fair lending enforcement was "ramping up." [142] A total of 14 fair lending cases challenging discrimination in real estate related lending were brought from 1992-2000, many of which challenged discriminatory predatory activities..[143]

But since 2001, fair lending enforcement has been greatly reduced. DOJ has brought only five fair lending cases dealing with residential lending, four that attacked redlining practices and one that attacked discriminatory pricing practices for manufactured homes. None has concerned predatory lending practices despite extensive research demonstrating the discriminatory patterns so prevalent in the sub prime market. [144]

Lack of Effective Collaboration

DOJ has also been derelict in collaborating with fair housing organizations to build strong cases. As the president of a FHIP-funded fair housing center testified:

My own agency’s experience with the Department of Justice underscores the challenges outlined in the data. On a number of different occasions, the Miami Valley Fair Housing Center has sought the assistance of the DOJ on cases involving a need for systemic investigations or injunctive relief, only to be disappointed. The response from DOJ in each of these cases is relatively consistent and goes something like this: We are "always interested in any cases that you (the private fair housing organization) believe merit our involvement. We encourage you to plan, coordinate and conduct your investigation, then assemble your testing and other documentation, reports and analysis and send it to us for review. Once we have reviewed the materials that you submit, we will notify you regarding whether or not the Department is interested in pursuing the matter."

This amounts to a ludicrous policy that inappropriately abdicates the DOJ’s authority and responsibility under the law. DOJ is the principal legal authority tasked with enforcing federal fair housing laws and it has both a clear mandate and wide discretion with respect to fair housing enforcement. The DOJ should be a partner and resource to private fair housing organizations in their work to identify, address and ultimately eliminate illegal housing discrimination. Instead, our experience is that DOJ encourages us to use scarce resources without any assistance or coordinated effort from DOJ, even when directly requested; DOJ will then "cherry pick" a marginal few cases to engage upon, often after months of consideration, leaving the remaining cases to be pursued by under resourced private fair housing organizations with the invaluable assistance of private attorneys.[145]

Failure to Bring Disparate Impact Cases

Another important impediment to effective fair housing and especially fair lending enforcement occurred in 2001 when a DOJ official announced that the Department would not litigate fair housing cases involving policies or practices that relied on a disparate impact analysis to prove a violation of the Fair Housing Act. This announcement ignores the 1994 Interagency Policy Statement on Fair Mortgage Lending Practices stating that violations of fair lending laws could be proven by application of a disparate impact analysis,[146] and is contrary to scores of U.S. Courts of Appeal decisions going back to 1972 recognizing that violations of the Fair Housing Act can be proved using a disparate impact analysis. Because disparate impact claims are often contentious and strongly defended, it is particularly important for the Department of Justice to take a strong role in bringing such cases.

Defending the Fair Housing Act

What has been particularly noticeable in recent years is DOJ’s failure to participate in cases presenting serious questions of the Fair Housing Act’s application. Those areas include: the applicability Section 804(b) of the Act to post-sales discrimination (for example, failure to provide services on the same basis to minority tenants after they have moved into a rental complex); [147] time limits on continuing violations in the accessible design and construction of buildings;[148]and whether the law’s discriminatory advertising prohibitions are voided by the Communications Decency Act.[149] DOJ has also failed to become involved in any of the cases challenging anti-immigrant ordinances that have a discriminatory impact on Latino renters and homeowners.[150] The Department, in its position as the chief enforcer of the Fair Housing Act, has a special role to play in providing guidance to courts on important fair housing issues; unfortunately, it has been almost totally absent in such cases.

Failure to Bring Any Cases Arising Out of the Aftermath of Hurricane Katrina

When the country faced one of the most catastrophic housing crises in its history after Hurricane Katrina, the Department of Justice was absent from enforcement of fair housing rights along the Gulf Coast, despite well-publicized testing by the National Fair Housing Alliance that demonstrated race discrimination against those seeking to relocate to other communities,[151] as well as evidence of blatant discrimination on internet cites offering housing for hurricane victims[152] and discriminatory opposition to desperately needed affordable housing projects.[153] This contrasts with the vigorous enforcement program addressing discriminatory rental practices in south Florida after Hurricane Andrew in 1992.[154]

Next Section: Strengthen DOJ’s Role in Fair Housing and Fair Lending Enforcement

Footnotes

[130] 42 U.S.C. § 3614(a).

[131] 42 U.S.C. § 3610(g)(2)( C); 42 U.S.C. § 3614.

[132] 42 U.S.C. § 3614(b).

[133] Testimony of Leslie Proll (Atlanta), at 4.

[134] Id.

[135] Id. at 5.

[136] See infra, Chapter V.

[137] See, e.g., United States v. Bob Lawrence Realty, 474 F.2d 115 (5th Cir.1973); United States v. Northside Realty, 605 F.2d 1348 (5th Cir. 1979); United States v. Real Estate One, 433 F. Supp. 1140 (E.D. MI 1977), United States v. Henshaw Bros., Inc., 401 F. Supp. 399 (E.D. VA 1974).

[138] Testimony of Diane L. Houk and Fred Freiberg (Atlanta) at 6.

[139] Id. .

[140] Id. at 9.

[141] See infra, p.

[142] Testimony of Ira Goldstein (Atlanta), at 2-3.

[143] See United States v. Long Beach Mortgage Co., Case No. CV-96-6159DT(CWx) (C.D. Cal. 1996). which alleged that Long Beach discriminated against African Americans, Latinos, women, and older borrowers. Younger White males were charged lower prices for loans than these groups, with older African-American female borrowers receiving the highest rates . Other discriminatory pricing cases included United States v. Fleet Mortgage Corp Case No. CV 96 2279 (E.D.N.Y. 1996). and United States v. Huntington Case No. 1:95 CV 2211 (N.D. Ohio 1995). In March 2000, DOJ joined forces with HUD and the Federal Trade Commission to bring a predatory lending case against Delta Funding Corp., in which the victims identified were African-American, senior females who had significant equity in their homes but who were cajoled into refinancing into high debt mortgages with substantive fees. United States v. Delta Funding Corp., Case No. CV 00 1872 (E.D.N.Y. 2000). The Department also filed an amicus brief supporting plaintiffs in Hargraves v. Capital City Mortgage Co., the first reverse redlining case. Mortgage Corp.

[144] Testimony of Leslie Proll (Atlanta), at 11. DOJ fair lending cases are described on the Housing Section website, http://www.usdoj.gov/crt/housing/fairhousing/caseslist.htm#l The five mortgage lending cases brought since 2001 are United States v. Old Kent, C.A. No. 04-71789 (E.D. MI); United States v. Centier Bank, C.A. No. 2:06-CV-344 (N.D. IN), United States v. Mid America Bank fsb (N.D. IL), United States v. First American Bank, C.A. No. 04C-4585 and United States v. First Lowndes Bank, C.A. 2:08-cv-00799-WKW-CSV (S.D. AL).

[145] Testimony of Jim McCarthy (Chicago), at 7-8.

[146] 59 Fed. Reg. 18266 (Jan. 20, 1994)

[147] Halprin v. Prairie Single Family Homes of Dearborn Park Ass’n, 388 F.3d 32 (7th Cir. 2004); see also Cox v. City of Dallas, 430 F.3d 734 (5th Cir. 2005).

[148] Garcia v. Brockway, 526 F.3d 456 (9th Cir. 2008).

[149] See, e.g., Chicago Lawyers Committee for Civil Rights under Law v. Craigslist, Inc., . No. 07-1101, 2008 U.S. App. LEXIS 5472 (7th Cir. Mar. 14, 2008), Fair Housing Council v. Roommates.com, 521 F.3d 1157 (9th Cir. 2008).

[150] See, e.g., Lozano et al. v. City of Hazleton, 459 F.Supp.2d 332 (M.D.Pa. 2006);

Young Apartments LLC v. Town of Jupiter, 2008 U.S. App. LEXIS 11981 June 5, 2008.

[151] Testimony of Cathy Cloud (Houston), at 4-6; see also Testimony of Daniel Bustamante (Houston), at 2-3; Testimony of Reilly Morse (Houston), at 2.

[152] Testimony of James Perry (Houston), at 1.

[153] Testimony of Reilly Morse (Houston), at 4; Testimony of James Perry (Houston), at 2, 3.

[154] In written testimony the former head of the Section’s testing program described the very vigorous response to Hurricane Andrew in 1992. which included systemic testing investigations in South Florida that ultimately resulted in the filing of eight (8) pattern and practice fair housing cases alleging race discrimination which settled for a total of over $2 million; emergency command centers to take discrimination complaints; and public announcements warning housing providers not to discriminate or take advantage of those families who were trying to locate temporary housing. Testimony of Houk, Freiberg, p. 5. The cases eight testing cases filed were United States v. Natura, Case No. 94-6955 (S.D. Fl) ; United States v. Langlois, Case No. 95-8352 (S.D. Fl); United States v. Araich Anstalt, Case No. 95-8355 (S.D. Fl); United States v. Gordon, Case No. 95-8354 (S.D. Fl); United States v. Jacobson, Case No. 95-1238 (S.D. Fl.); United States v. Kendall House, (S.D. Fl); United States v. Skilken, Case No. 95-8353 (S.D. Fl); United States v. Rosemurgy, Case No. 95-8351 (S.D. Fl)

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