Housing Discrimination Spring 2009 Take Home Final Exam:

Questions, Comments, and Best Student Answers

Question I: In January 2008, Sam and Mo Epstein filed a complaint in the U.S. District Court for the District of New Jersey(in the Third Circuit) alleging discrimination on the basis of religion (Islam) and/or national origin (Arab/Egyptian) in violation of the FHA. Specifically, they claimed that:

  • The Harmony Acres Homeowners’ Association violated §3604(b) by banning their children from the Association’s pools and athletic facilities; and
  • Two members of the Association’s Board of Directors, Charlie Cohen and Lois Levy violated §3617 by bringing about that ban and otherwise interfering with the Epsteins’ enjoyment of the residence they own in Harmony Acres.

The complaint included the following factual allegations:

1. Samuel (“Sam”) Epstein is the son of two American citizens who are Jewish. He was raised as and remains a member of a Reform Jewish congregation. His wife Monifa (“Mo”), whose maiden name was Monifa Iffat, was born to two Egyptian Arabs who emigrated to the United States and became U.S. citizens prior to her birth. Mo was raised as a Muslim, but converted to Judaism in preparation for her marriage in 1988. When she converted, she became estranged from her parents, who did not even attend her wedding. The Epsteins have two sons, Ari (born in 1992) and Ben (born in 1994), who are being raised as Reform Jews.

2. In 2002, the Epsteins purchased a house in the Harmony Acres development in Jericho, New Jersey. Harmony Acres is a gated community governed by a Homeowners’ Association with an elected five-member Board of Directors. The Association oversees the community’s common areas, which include several swimming pools, tennis and basketball courts, and a weight room.

3. During the period between the Epsteins’ purchase of their house and the filing of this complaint, Glenn Gold was the chairman of the Association Board of Directors. Charlie Cohen and Lois Levy, who own the houses on either side of the Epstein residence, were members of the Board.

4. More than 60% of the residents of Harmony Acres are Jewish, including Gold, Levy, Cohen and one other member of the Board of Directors.

5. Monifa Epstein is generally known as “Mo” and normally does not reveal her traditional-Egyptian full first name to people outside her immediate family. Until 2007, the other residents of Harmony Acres were unaware that she was of Egyptian Arab descent or that she had been raised as a Muslim.

6. In July 2007, Mo’s father died and her mother, Zahra Iffat, came to live with the Epsteins in Harmony Acres. Because of the estrangement, Zahra had never visited her daughter’s home prior to moving in. Zahra follows many traditional Islamic customs, including wearing a headscarf whenever she leaves her home.

7. Shortly after Zahra moved in, Lois Levy and Charlie Cohen visited the Epsteins and asked Mo to explain the “Arab lady who is working for you.” Mo explained that Zahra was her mother and that she herself was of Egyptian Arab descent and had been raised as a Muslim. Levy and Cohen were visibly upset and left hurriedly.

8. Levy and Cohen rapidly relayed the information about Mo’s background and about Zahra to many other residents of Harmony Acres. Levy told several neighbors that she was very angry that Mo had “lied all these years about being Jewish.” Cohen repeatedly expressed concern that the Epsteins “were hiding a terrorist cell.”

9. Prior to Zahra’s arrival, the Epsteins had regular social interactions with the Cohen and Levy families. Subsequently, the Cohens and Levys and most of the other neighbors stopped inviting the Epsteins to social events and refused any invitations the Epsteins issued themselves.

10. Levy and Cohen each separately suggested to Sam on several occasions that the Epsteins should move to a different neighborhood “where you might fit in better.” They each also would loudly make nasty remarks if they were standing in their front yards when Zahra entered or left the house.

11. In late August 2007, Sam complained to Glenn Gold. Gold, who was an attorney as well as chairman of the Board, spoke to Cohen and Levy. He asked them to modify their behavior, pointing out that that they might be exposing themselves and the Board to liability. After this, Cohen and Levy both stopped making nasty remarks in the Epsteins’ presence, but also completely ceased speaking to the Epsteins at all.

12. Charlie Cohen’s son Nick was the same age as Ari Epstein. Lois Levy’s son Jordan was the same age as Ben Epstein. Prior to Zahra’s arrival, the boys had been friends. After Gold’s discussion with their parents, Nick and Jordan completely stopped spending time with the Epstein boys.

13. When the boys all returned to school in September 2007, Nick and Jordan told their classmates about Zahra and about Mo Epstein’s background and started calling the Epstein boys “mongrels” and “baby terrorists.” These names were soon repeated regularly by other students. Ari and Ben each got into several fights in the first few weeks of the new school year and their performance in school suffered. Ari was kicked off the Junior Varsity soccer team after a fight with Nick in the locker room.

14. Nick and Jordan began shouting things like “Dirty Arab bitch” and “terrorist” at Zahra whenever they saw her. Several times, similar phrases were spray-painted onto the Epsteins’ fence. In October, Sam caught Nick and Jordan on his property with a can of green spray paint and took the can away from them. The graffiti continued to appear in other colors.

15. Sam spoke to both Charlie Cohen and Lois Levy about their sons’ behavior. Levy and Cohen said they would try to control their children, but told Sam, “You know how teenage boys are.” They never punished their sons for any of their actions regarding the Epsteins.

16. During October 2007, Nick and Ari got into a fight at the community weight room and Ben and Jordan fought beside one of the pools a few days later. Lois Levy and Charlie Cohen lied to the rest of the Board of Directors by saying that they had witnessed the incidents themselves and that the Epstein boys had started both fights. Cohen said, “It’s really not surprising considering their heritage.” With only Glenn Gold dissenting, the Board voted to ban the Epstein boys permanently from all the pools and athletic facilities. Jordan and Nick were also barred from these facilities, but only for one week.

Trial Court Decision: The District Court granted the defendants’ motion to dismiss for failure to state a claim. With regard to the §3604(b) claim, the court held, following Halprin v. Prairie Single Family Homes[1]and similar persuasive authority from other federal circuits, that §3604(b) does not provide a cause of action for post-acquisition discrimination.

With regard to the §3617 claim, the court applied the reasoningofSalisbury House v. McDermott, holding that the allegations in the complaint were insufficient because there was no claim that “some type of force or compulsion” was used to deprive the plaintiffs of their FHA rights.

Court of Appeals Decision: On appeal, the Third Circuit reversed the dismissal of both claims. Finding the reasoning of U.S. v. Koch to be persuasive, it held that §3604(b) does allow claims for post-acquisition denial of services by a homeowners’ association.

The court also overruled McDermott and held that the proper standard for judging “interference” claims under §3617 was “whether the discriminatory conduct was so severe or pervasive that it would have the effect of causing a reasonable person to seriously consider abandoning the exercise of his or her housing rights.” The court said that it was “unlikely but possible”that the allegations in the complaint met this standard and remanded the case to the district court to allow the case to continue.

The U.S. Supreme Court granted the defendants’ petition for certiorari to decide two questions:

(1) Does §3604(b) allow claims for post-acquisition denial of services by a homeowners’ association?

(2) What is the proper standard for determining what conduct constitutes “interference” for purposes of §3617?

Compose drafts of the analysis sections of a majority opinion for the U.S. Supreme Court, and of a shorter opinion dissenting or concurring and dissenting, deciding these questions in the context of the allegationsin this case. With regard to the second question, the shorter opinion should argue for the adoption of a different legal standard than the one adopted by the majority, even if it ultimately agrees with the majority about whether the complaint states a §3617 cause of action.

Assume that there is no directly applicable HUD regulation. Assume that the First Amendment would not prohibit applying the FHA to the conduct alleged. Assume that parents can be held liable under the FHA for acts of their minor children.

Question I: Professor’s Comments: For most students, this was the weaker of the two answers. Most students did not provide enough support for their conclusions on at least one side of at least one of the major issues. In addition, quite a few students spent at least several paragraphs on issues I thought were outside the scope of the question. That said, I was impressed by the range of arguments you made collectively.Together you found several strong arguments on each side of each issue that were not made explicitly either by the cases or in our class discussion.

A. §3604(b):AvailableLanguage & Policy Arguments fromHelprinKoch & Beyond

1. Statutory Interpretation Arguments:

a. Literal Arguments:

  • Gourlay argument re “in connection with” (See Models #1, #2, #3).
  • Koch argument re residence as “privilege” (See Models #1, #2, #3).
  • Arguments about the nature of services/facilities provided by HOAs (in covenants in purchase documents, so in connection with sale v. in exchange for later fees and dues, so separate transactions) (See Model #3)

b. Arguments from Related Provisions

  • Use of “enjoyment” in 3604(f)(3) (Gourlay; Models #1, #2, #3).
  • Use of “services and facilities” in 3603 (Model #2).
  • HUD regsdon’t list post-acquisition harms in explaining 3604(b).
  • If conduct is covered by 3617, unnecessary to use 3604(b).

c. Arguments from Congressional Intent: See debate between Koch Helprin as to whether Congress intended to address post-acquisition activities. (See Models #1, #2, #3).

2. Policy Arguments:

a. General Policy Against Discrimination: Proponents of covering post-acquisition activities can point to the general FHA policiesin favor of fair housing and against discrimination and note the caselaw saying the FHA should be interpreted generously. (See Models #1, #2). More specific uses of nthe general policies include:

  • If denial of services/housing is not allowed at the time of sale, but HOAs are not subject to liability for post-acquisition behavior, they could simply wait until the sale is complete, then cut off services or harass unwanted residents afterward. (See Model #1)
  • Relatedly, if (as was true here) the characteristics in question were not apparent at the time of purchase, why should HOAs be allowed to harass the owners when they later find out they have a protected characteristic. (See Model #3)

b. Special Concerns re HOAs

  • Because caselaw suggests this cause of action would be available to a tenant denied services by a landlord, you usefully could argue about whether HOAs are sufficiently different from landlords to suggest a different result. (See Models #1, #3).
  • Facilities of the kind at issue here are often pivotal to the decision to purchase a unit governed by an HOA and some residents would see access to facilities as crucial to the enjoyment of their home. (See Models #2, #3).

c. Administrative Concerns: Those arguing against coverage of post-acquisition claims will make floodgates arguments. (See Model #1). One of the non-model answers made the interesting argument that these denial of services cases belong in state court with other claims against HOAs and with related dignitary torts.

3. Arguments Outside the Scope of the Question

a. Assessing Whether Allegations Were Sufficient to State a Cause of Action: The plantiffs alleged that the HOA denied them access to the facilities because of national origin and religion. If you decide that post-acquisition activities are covered, those allegations should be enough to withstand a motion to dismiss. Unlike the 3617 claim, where the Supreme Court would need to decide the amount of harassment necessary to trigger the statute, there isn’t really any similar question of severity to decide here.

b. Fall RiverSufficient Allegations of Bad Intent: Spending time on this issue was not a good idea because (i) the lower courts didn’t address it; (ii) the Supreme Court did not list it as a question for decision; and (iii) it seems very unlikely that the Court would not allow discovery as to the intent of the two unmentioned Board members where the general allegation is that the Board acted with discriminatory intent, and the specific allegations are that two of the Board members both had bad intent and tried to influence others to act on the basis of that intent. This is a case where the Fall River issues are likely to arise in the context of sufficiency of the evidence, rather than on a motion to dismiss.

B. §3617: To address this issue, in both the majority and the dissent, you needed to choose a legal test, defend your choice, then discuss whether the allegations in the complaint were sufficient to meet your test. Most students were weakest about defending their rule. Sometimes, the nature of the chosen test was such that it was pretty obvious whether the allegations were sufficient and I did not penalize in those cases for not providing an elaborate analysis of the allegations.

1. Choosing and Defending a Legal Test

a. Possible Tests

i) McDermott: Force or compulsion (see Model #1 dissent; model #4 dissent).

ii) GourlayCourt of Appeals in the fact pattern (similar, but not identical): whether the discriminatory conduct was so severe or pervasive that it would have the effect of causing a reasonable person to [G: “abandon” v. CtApp: “seriously consider abandoning”] the exercise of his or her housing rights.” (see Model #1 majority; model #4 majority). It is important that you recognize that, although both Gourlay and McDermott relied in part on ejusdem generis and floodgates arguments, the two cases adopted quite different tests.

iii) Babin: Directly effect the exercise of housing rights(see Model #2 majority(slight variation))

iv) Other: (see model #2 dissent).

b. Defense: Ideally, you need both to explain why your specific rule is a good idea and why the likely alternatives are worse. This can involve:

specific to rule chosen; not just others bad or don’t want to go too far; rhetoric: fund’l

i) Legislative Interpretation Arguments: The arguments based on ejusdem generis and on redundancy are in the models. One important argument that nobody raised is that interference with §3604(b) (access to facilities) might require a lesser showing than interference with §3604(a) (access to housing); even if you have to consider leaving for the latter, wouldn’t simply losing access to facilities without leaving be enough for the former?

ii) Policy Arguments: As we discussed in class, because “interference” is so vague, courts struggle with the tension between trying to most thoroughly protect the rights granted by the FHA and the need to provide some clear limit on how §3617 can be used. You can generally argue that narrower interpretations of “interference” do not protect against some important harms, but that broader interpretations increase litigation, turn minor disputes between neighbors into federal cases and risk chilling free speech.

iii) Precedent: To defend a rule, you can discuss how it would apply to the facts of lower court cases and explain why keeping or rejecting the results in those cases is sensible. It would be particularly interesting to hear how you’d handle Wilkey and Babin/Hughes. (Model Answer #2 does some good work on precedent).

iv) Relationship between §3604 and §3617: The lower courts did not address this question directly, so you did not need to cover it in your answer. I gave credit for discussions of the issue (see Model Answer #4).

c. Deciding Whether the Allegations Met Your Test:

(i) Apply Your Test Carefully: Several students lost points because their discussion of the allegations did not seem to follow the language of their test.

(ii) Take Seriously the Seriousness of the Allegations: Many students were quite dismissive of the §3617 claim here in one of their opinions. Your discussions needed to recognize that, collectively, there’s quite a lot going on here. If the claim were simply based on gossip, asking people to leave, and shutting them out socially, then this would clearly raise concerns both about this merely being a minor dispute between neighbors and about chilling free speech.