ADA and FHA Defense

In Loper Bright Enterprises et al v. Raimondo, Secretary of Commerce et al, Case No. 22-451 (June 28, 2024) the Supreme Court overruled Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., a case that, as one commentator observed, was the foundation of the administrative state.¹ At first glance this decision has little to do with private Fair Housing Act litigation based on disability discrimination. Chevron created a rule requiring deference to regulations, and HUD’s regulations implementing the requirements in 42 U.S.C. §3604(f) are, for the most part, uncontroversial. Unfortunately, many courts have applied Chevron not only to HUD’s regulations, but also to its less formal statements and guidances when deciding how to interpret the Fair Housing Act. By taking Chevron off the table Loper Bright should eliminate the sometimes slavish reliance on HUD’s various statements and guidances. That could change litigation under Section 3604(f) in important ways.

To get an idea of the difference Loper Bright should make we can look at Fair Hous. Rights Ctr. in S.E. Pennsylvania v. Post Goldtex GP, LLC, 823 F.3d 209, 216 (3d Cir. 2016). In Post Goldtex the Third Circuit considered whether a previously occupied building that was converted to housing after the effective date of the FHA design/build requirements was covered by those requirements. The statute says it applies to buildings with “first occupancy” after the effective date of the requirements. In Post Goldtex both sides of the case argued “first occupancy” had the meaning they preferred, the plaintiff arguing that it meant first residential occupancy and the defendant arguing it meant first occupancy for any purpose. HUD’s regulatory definition of “first occupancy” favored the defendant, for it defined the term as first occupancy for any purpose. Thus, the old commercial building converted to condominiums after the effective date of the design/build requirements was not constructed for “first occupancy” after the effective date. The Third Circuit briefly considered the arguments for both sides, but ultimately deferred to HUD’s regulatory definition, citing Chevron.

We don’t know where the court might have come down on the issue without Chevron deference, but we do know the court believed the phrase “first occupancy” had an uncertain meant because Chevron was never supposed to apply if the meaning of the statute of was clear. Thus, a different result was certainly possible. Equally important, with Chevron gone every court that considers this issue is now free to reach its own result, increasing the odds of inconsistent decisions.³

At the trial court level Chevron has been applied more broadly to justify deference not only to HUD regulations, but also to HUD’s less formal statements. In U.S. v. Edward Rose & Sons, 246 F. Supp. 2d 744, 751 (E.D. Mich. 2003), aff’d in part, 384 F.3d 258 (6th Cir. 2004) the trial court, after invoking Chevron deference as a kind of general obligation to follow agency interpretations, relied on language in the preamble to proposed regulations to conclude that the front entrance to a facility was required to be accessible even if another accessible entrance was available. The Sixth Circuit affirmed, but did so based on the plain meaning of “common area” as used in the statute itself, declining to consider whether statements in HUD’s preamble were entitled to deference. This might be considered a save from the standpoint of legal analysis, but of course most cases are not appealed and the trial court’s decision is the only one that matters. It is also the one most often cited for the notion of deference to HUD statements that are not in the actual regulations.

A more consequential reliance on Chevron can be found in U.S. v. Noble Homes, Inc., 173 F. Supp. 3d 568, 573 (N.D. Ohio 2016). The question was whether a housing unit with a basement was a multi-story unit and therefore not covered by the FHA design/build requirements. The court recognized that HUD’s Fair Housing Act Guidelines were not mandatory, but nonetheless cited Chevron as its justification for using the Guidelines to decide that the basements in question did not make the units multi-story units. Plaintiffs often cite Nobel Homes for the proposition that anything HUD says about how the Fair Housing Act applies in litigation is controlling.

Noble Homes relied on an earlier equally important case, The Sec’y, United States Dep’t of Hous. & Urban Dev., on Behalf of Montana Fair Hous., Inc., Charging Party, & Montana Fair Hous., Inc., Intervenor, HUDALJ 05-068FH, 2006 WL 4573902, at *5 (Sept. 21, 2006). This was a HUD administrative proceeding the decision in which is commonly referred to as the “Nelson Memorandum” after the Respondents in the case. In the Nelson Memorandum HUD announced a burden shifting procedure under which a plaintiff could make a prima facie case of discrimination based on a violation of the design/build requirements by simply showing some deviation from the specific technical requirements in the Guidelines. The burden then shifted to the defendant to provide evidence that despite this deviation the property met the very general requirements in Section 3604(f)(3)(C). Only if the defendant could do this was the plaintiff required to prove a violation of Section 3604(f)(3)(C). The Ninth Circuit affirmed, finding that: “The Secretary’s application of the burden shifting scheme was not arbitrary or capricious.” Nelson v. U.S. Dept. of Hous. and Urb. Dev., 320 Fed. Appx. 635, 638 (9th Cir. 2009)(unpublished).

The Ninth Circuit’s decision does not, it should be noted, hold that HUD’s burden shifting scheme for administrative proceedings should be applied in private actions in federal court or even that it is the correct way to approach the burden of proof. All the Ninth Circuit says is that application of this burden shifting scheme is not arbitrary and capricious as applied in HUD administrative proceedings.

The Nelson Memorandum is consequential because many courts apply this burden shifting scheme in design/build litigation brought in federal court by DOJ and private plaintiffs. This makes it very easy for a plaintiff to shift the burden of demonstrating accessibility to the defendant. After all, there is no such thing as a significant construction project that has no flaws. Even if the plans for an apartment complex perfectly specify compliance with all of the Guidelines or some other HUD safe harbor, there will inevitably be “as built” discrepancies such as a countertop that is a half inch too close to the opposing countertop, or a toilet a half inch off of the 18″ centerline requirement. Sidewalks can easily have a cross slope of 2.5% when 2% is the standard just as a ramp may have a slope of 9% when 8.3% is the maximum. A plaintiff who finds a single error of this kind has, under the Nelson Memorandum burden shifting analysis, proved their case unless the defendant can provide evidence that none of the discrepancies affects accessibility.

For defendants this may prove a difficult or impossible burden to meet. The plaintiff can prove its case with nothing more than an expert with tape measure and a digital level. The defendant, on the other hand, must find an expert qualified to testify that a 2.5% inch cross slope or a 39.5″ clear space won’t interfere with the use of the apartment by those with mobility disabilities. The standards in the Guidelines were based on ANSI A117.1 (1986) which were ultimately based on studies in the 1950’s sponsored by the Easter Seals Research Foundation at the University of Illinois. ² These were updated periodically, sometimes with HUD sponsorship, but ultimately represent the opinion of the various groups involved that the standards meet the needs of most disabled individuals most of the time using technology like the wheelchair as it existed more than 60 years ago. Digging out the sources of the compromises made and the scientific studies that justified those compromises is a job few experts could do at any reasonable cost in a reasonable time. The Nelson Memorandum, if given Chevron deference, guarantees that FHA design/build plaintiffs will be able to prove a design/build violation without any proof at all that the condition is in fact a barrier to access for those with disabilities or to the plaintiff.

Loper Bright does not mean, of course, that the courts should simply ignore what the Administration says about the laws it is supposed to implement. In Loper Bright the Supreme Court acknowledged and left in effect Skidmore v. Swift & Co., 323 U. S. 134 (1944). In Skidmore the Supreme Court recognized (as described in the Lober Bright opinion):

that the “interpretations and opinions” of the relevant agency,“made in pursuance of official duty” and “based upon . . . specialized experience,” “constitute[d] a body of experience and informed judgment to which courts and litigants [could] properly resort for guidance,” even on legal questions. Id., at 139–140. “The weight of such a judgment in a particular case,” the Court observed, would “depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.” 

Whether and to what extent HUD’s regulations, guidances and other pronouncements should be given any weight must depend on the document at issue. The Nelson Memorandum, which expresses HUD’s opinion about how a plaintiff can make a prima facie case of discrimination, ultimately rests on notion that HUD’s non-binding safe harbor determinations should be treated as mandatory in effect.  This is not only inconsistent with the concept of a safe harbor, it also ignores the fact that different safe harbors have different requirements. If two different technical standards can both meet the requirements of the Fair Housing Act then the Fair Housing Act’s requirements can clearly be met in more than one way. And, if the FHA requirements can be met in multiple ways it is a matter of logic to conclude that proving a failure to comply in one way is not proving a failure to comply in general.

HUD’s guidance concerning service and assistance animals, FHEO-2020-01, also fails the Skidmore test for useful guidance. With respect to assistance animals FHEO-2020-01 must ultimately rest on an evaluation of how individuals with every kind of disability imaginable might be helped by an untrained animal in a way that improves their equal access to housing. There is no reason to believe HUD has the required expertise to make this determination. HUD’s sister agency, the Social Security Administration, does not accept evidence of disability from many of the professionals HUD says can be relied on for a disability determination. The Department of Defense conducted a thorough and expensive study of the effectiveness of assistance animals for individuals with PTSD and could not reach a conclusion that they were effective. HUD does not appear to have conducted any scientific studies of its own and does not seem to have referred to any of the relevant scientific literature concerning assistence animals. Instead, consistent with HUD’s political agenda, HUD’s concern was making it as easy as possible for those with disabilities to obtain housing despite “no pet” rules or pet deposit requirements. An analysis using Skidmore criteria leads to the conclusion that this guidance can and should be ignored by federal courts.(5)

A complete exploration of when HUD’s regulations, guidances and similar documents do and do not make sense in light of the language of the statute and available scientific or other evidence would take more time and space than this blog allows. What Lober Bright tells us is that the courts are now free to treat regulations, guidances, internal memoranda and the like as nothing more than an agency opinion whose usefulness cannot be presumed, but must be proved. This should have a significant impact on litigation under Section 3604(f) because, while Loper Bright does not overrule earlier cases that properly applied Chevron deference it certainly demonstrates that any earlier case that relies on HUD’s various statements is entitled to respect only to the extent its conclusions can be justified by Skidmore analysis or an independent analysis of whether HUD got it right.

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¹ See,The Chevron Doctrine is Dead

² See, ANSI A117.1 History and see the introduction to ANSI A117.1 in each of its later editions.

³ The Loper Bright decision is careful to say that it does not overrule any earlier case applying Chevron deference, but it does not exclude courts in one circuit from disagreeing with the conclusions of a different circuit that would not be binding in any case.

(4) There is nothing improper about a regulatory agency trying to implement the policy behind a statute in ways with which the courts may disagree. The point of Lopez Bright is simply that agency interpretations are not entitled to deference when they do so.

(5) Housing providers cannot ignore it, because no matter what the courts say, HUD will follow this guidance in its investigation of discrimination complaints. A victory in federal court costs more money than many housing providers will think are justified by the nuisance of fake assistance animals.