Think that the U.S. Department of Justice (DOJ) has lost interest in prosecuting Fair Housing Act (FHA) discrimination cases? Think again. Earlier this week, DOJ announced that two property owners in Ohio agreed to pay $850,000 to settle lawsuits filed by the DOJ as well as other private parties and Ohio state officials claiming that the defendants discriminated on the basis of race and familial status at properties they formerly owned.
The proposed agreement would conclude a DOJ complaint filed in 2011 alleging that the property owners discriminated against African Americans and families with children at three Ohio apartment communities. The settlement would also terminate companion lawsuits raising similar allegations filed by Stark County, the Ohio Civil Rights Commission as well as a number of other former property managers and residents. Indeed, in an order issued earlier this year, the judge noted that 10 former employees of the defendants had specifically testified that they were instructed to discriminate against African Americans and that other former employees told the judge that they been instructed to discriminate against families with children. Accordingly, the court concluded that the DOJ had presented sufficient evidence of a pattern or practice of unlawful discrimination by the defendants for the case to go to trial before a jury.
Under the terms of the settlement, which still must be approved by a federal judge in Ohio, the defendants will pay: $650,000 in damages and attorney's fees to the plaintiffs in the lawsuits filed by the Ohio Civil Rights Commission, Stark County and several former residents and property managers; $175,000 in damages to 11 additional former residents and employees identified by DOJ who had been harmed by the defendants' discrimination; and a $25,000 in a civil penalty to the United States.
Because of the serious nature and scope of the allegations, the settlement also requires that the defendants hire an independent management company to oversee all of their rental properties, receive training on the requirements of the FHA and report to the United States for a period of three years on their compliance with the settlement. The settlement also requires the defendants to hire a third party to periodically test their properties to ensure compliance with the FHA.
Make no mistake, the financial and reporting components here are higher than what would otherwise be typical in a FHA case. Because of the pattern or practice allegations that DOJ believed it could prove at trial, it likely made the case much more expensive to resolve. If you are unsure of your policies or want to check your compliance with the FHA, you might want to check with a lawyer like me.
Just A Thought.
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