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Circuit split over whether Fair Housing Act regulates post-acquisition discrimination

November 14th, 2009 by Joseph William Singer

The federal courts cannot agree on the question of whether the Fair Housing Act (FHA) applies only to discrimination in acquiring or renting property or also applies to post-acquisition discrimination in provision of services. The Fifth Circuit held, in Cox v. Dallas, 430 F.3d 734 (5th Circ. 2005), that African American residents of a neighborhood afflicted with an illegal dump had no remedy against the city that failed to clean it up. The court held that the dump merely made the housing less habitable but did not make it “unavailable” as required by 42 U.S.C. §3604(a) and that the prohibition against discriminatory terms in the sale or rental of a dwelling was inapplicable to city actions when the city was not the seller or renter of the property. For background on the case see here.

Similarly, the Seventh Circuit ruled in Halprin v. Prairie Single Family Homes of Dearborn Park Assoc., 388 F.3d 327 (7th Cir. 2004), that §3604(a) of the FHA gave no remedy to Jewish condo owners against the homeowners association or other members of the association for harassment that took place after they bought and moved into their home. Judge Posner’s opinion was similarly skeptical about whether §3617 provided a remedy; that section makes it unlawful to “coerce, intimidate, threaten, or interfere with any person in the exercise of or enjoyment of, or on account of his having exercised or enjoyed, or on account of his having aided or encouraged any other person in the exercise or enjoyment of, any right granted or protected by [the FHA].” The court found a potential violation of §3617 only because of a HUD regulation interpreting §3617 to encompass such activity; the court intimated, however, that the regulation exceeded the agency’s powers because it prohibited conduct not within the statutory language.

However, the full Seventh Circuit rejected the view expressed in Halprin when the court en banc reversed an earlier ruling of a three judge panel in the case of Bloch v. Frischholz, 2009 WL 3789996 (7th Cir. 2009).  In the earlier opinion, Judge Frank Easterbrook wrote for the majority that §3617  does not reach post-acquisition conduct. That ruling was reversed by the full court on November 13, 2009.

The Ninth Circuit has recently rejected the rulings in these cases, holding that the FHA does apply to post-acquisition discrimination in provision of services. In Committee Concerning Community Improvement v. Modesto, Cal., 583 F.3d 690 (9th Cir. 2009), the court ruled that residents of primarily Latino neighborhoods did have FHA claims against the city for discriminatory provision of municipal services. The court found that the language in §3604(b) prohibiting discrimination “in the terms, conditions, or privileges of sale or rental of a dwelling, or in provision of services or facilities in connection therewith” did not only apply at the moment of renting or purchasing but “implicated continuing rights, such as the privilege of quiet enjoyment of the dwelling.”

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