Consumer Protection

Municipal attempt to induce residents to move because of race violates Fair Housing Act even if they do not move

/ Antidiscrimination Law, Consumer Protection, Fair Housing Act

The Sixth Circuit has held that §3617 of the Fair Housing Act, 42 U.S.C. §3601 et seq., prohibits conduct intended to encourage residents to move even if they are not denied housing or induced to move. Hidden Village, LLC v. City of Lakewood, 2013 WL 5811642 (6th Cir. 2013). The basic provisions of the FHA (embodied in §3604) prohibit denying housing for discriminatory reasons, providing unequal and discriminatory terms and conditions for housing, and expressing an invidious preference for buyers or renters of a particular race, sex, etc. Section 3617 prohibits coercion, intimidation, threats, or any interference with any person’s right to exercise the fair housing rights protected by 3604. Federal courts have been confused and divided over whether §3617 provides a remedy when there is no underlying §3604 violation. In Hidden Village, municipal officials were unhappy with a religious youth service that helps young people released from foster care or juvenile detention enter …

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Settlement of Mount Holly case prevents Supreme Court from addressing disparate impact claims under the Fair Housing Act

/ Antidiscrimination Law, Consumer Protection, Fair Housing Act

The Supreme Court has twice in recent years accepted certiorari in cases to decide whether disparate impact claims are available under the Fair Housing Act. Both cases settled before the Supreme Court could determine the issue. The most recent was Mt. Holly Gardens Citizens in Action, Inc. v. Twp. of Mt. Holly, 658 F.3d 375 (3d Cir. 2011). The prior case was Gallagher v. Magner, 619 F.3d 823 (8th Cir. 2010). Another lawsuit is in process called Am. Ins. Ass’n v. U.S. Dep’t of Hous. & Urban Dev. (D.D.C., filed 06.26.13),  brought by the insurance industry to challenge the disparate impact regulations promulgated this year by the Department of Housing and Urban Development (HUD). read article Those regulations define when disparate impact claims are available and are consistent with the general outlines of the doctrine as it been developed by all the Circuit courts.  24 C.F.R. § 100.500(a)–(b).

Testers have standing to sue for violations of the public accommodation provisions of the Americans with Disabilities Act

/ Antidiscrimination Law, Consumer Protection

In Houston v. Marod Supermarkets, 2013 WL 5859575 (11th Cir. 2013), the Eleventh Circuit ruled that testers have standing to bring suits claiming violation of the public accommodation provisions of the Americans with Disabilities Act. The mere fact that one enters property for the purpose of testing compliance with the ADA rather than to purchase products does not deprive the plaintiff of standing to sue for violation of the law. In an odd coda, however, the court noted that injunctive relief was only appropriate if the plaintiff could show injury from the store’s failure to comply with access requirements. The fact that he claimed he would return to the store in the future and that it was located 30 miles from his house was sufficient to show “injury in fact” and give him standing to seek injunctive relief.

Rent escrow law held constitutional

/ Consumer Protection, Due Process, Leaseholds

The Ninth Circuit has upheld a city administrative program that regulated landlords whose buildings violated the housing code by allowing tenants to pay a reduced rent into a publicly administered escrow fund which is paid to the landlord once the violations are corrected.    Sylvia Landfield Trust v. City of Los Angeles, 2013 WL 4779664 (9th Cir. 2013). Four landlords challenged the program as a violation of their substantive rights under the due process clause. The court upheld the program because it was rationally related to the legitimate government goal of enforcing the housing code to protect tenants from unsafe conditions.The landlords had claimed that the tenants caused the problems, that their properties were not sufficiently substandard to warrant application of the law, and that the program was intended to enrich the government. The court rejected all these claims, noting that the law allowed landlords to prove that tenants were responsible …

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Los Angeles rent escrow program upheld under constitutional challenge

/ Consumer Protection, Leaseholds

The Ninth Circuit upheld Los Angeles’s Rent Escrow Account Program that enables tenants to pay rent to a public account rather than to the landlord if the landlord fails to repair habitability violations. Sylvia Landfield Trust v. Los Angeles, 2013 WL 4779664 (9th Cir. 2013). The court found that the program served the legitimate government goal of ensuring compliance with regulations ensuring safe and habitable housing for tenants and that the program had adequate procedural safeguards to ensure it was not applied arbitrarily.

Photography business cannot discriminate against same-sex couples

/ Antidiscrimination Law, Consumer Protection, Religious Freedom

The Supreme Court of New Mexico has held that the state public accommodations law applies to a photography business that offers its services to the public. Because that law prohibits discrimination based on sexual orientation, the business could not lawfully refuse to take pictures at a same-sex commitment ceremony because of the owner’s religious beliefs. Elane Photography v Willock, — P.3d — (N.M. 2013). The state public accommodations law does not violate the owner’s free speech rights since professions involving creativity or expression are not exempt from those laws. The court explained that “Elane Photography believes that because it is a photography business, it cannot be subject to public accommodation laws. The reality is that because it is a public accommodation, its provision of services can be regulated, even though those services include artistic and creative work. Nor did the owner’s religious beliefs offer a reason to engage in discriminatory conduct. “Under established law, the right of …

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Lawyers held to be “debt collectors” that can be held liable for false statements in connection with a foreclosure

/ Consumer Protection, Mortgages, Real Estate Transactions

In Glazer v. Chase Home Finance, 704 F.3d 453 (6th Cir. 2013), the Six Circuit found lawyers who initiated a foreclosure may be “debt collectors” subject to the Federal Debt Collection Practices Act (FDCPA), 15 U.S.C. §§1692 to 1692p, if they regularly perform this function, and thus may be liable for making “false, deceptive or misleading representations” in connection with the foreclosure.

Court holds that a seller has no duty to reveal that a murder/suicide took place in the house

/ Consumer Protection, Real Estate Transactions

A Pennsylvania trial court held that a seller had no duty to reveal that a murder/suicide took place in the house. Milliken v. Jacono, 60 A.3d 133 (Pa. Super. Ct. 2013). The court interpreted a state statute that required sellers to reveal “material defects” and found that events that had happened in the house were not a “material defect” in the physical structure of the property. The court declined to find any common law duty to reveal the information on the ground “an expansion of required seller disclosures from the physical to the psychological is a massive expansion in the character of disclosure. It requires the seller to warn not only of the physically quantifiable but also of utterly subjective defects.” Id. at 140. A dissenting opinion would have found such an obligation because “[r]eputation and history can have a significant effect on the value of realty.” Id. at 145 (Bender, J., dissenting).

California Homeowner Bill of Rights regulate foreclosures

/ Consumer Protection, Leaseholds, Mortgages, Real Estate Transactions

California passed a statute on Jan. 1, 2013 called the California Homeowner Bill of Rights (Assembly Bill 278, ch. 86, adopted July 11, 2012) (effective Jan. 1, 2013). Among other things, it prohibits banks from proceeding with foreclosures if the homeowners is seeking a loan modification and it requires the bank to act on qualified applications for loan modifications. Cal. Civ. §2923.5.It also subjects banks to a penalty for recording unverified documents. Cal. Civ. §2924.17. It also prevents eviction of tenants who have fixed-term leases as long as those leases last even if the landlord loses the property to foreclosure before the end of the lease term and even if the lease was created after the mortgage. Cal. Civ. Proc. §1161b(b).

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