Client Alert

The US Court of Appeals in San Francisco, in a rare en banc (all the judges in the Circuit who aren't on "senior status") decision, has ruled that private plaintiffs have to file suit to complain about Fair Housing Act issues, including those involving design features to accommodate tenants and applicants with disabilities, within two years of the date on which the claim "accrues" -- which, in most cases, means the date of issuance of the certificate of occupancy for the property. The plaintiffs, as well as the advocacy groups supporting them who often file their own FHA suits as plaintiffs, had argued that the time for filing was not triggered until the plaintiff "encountered" a violation by leasing or attempting to lease an apartment, but the 9-judge majority was not persuaded by this "continuing violation" concept. The three dissenting judges strongly disagreed with their colleagues, and it is not unlikely that the Supreme Court will be asked to resolve the question. As it stands now, this ruling is binding authority only in the 9 states (AK, AZ, CA, HI, ID, MT, NV, OR and WA) and two territories (Guam and the Northern Marianas) in the Ninth Circuit, but it is already being brought to the attention of judges in cases pending nationwide.

This significant development can have a determinative impact on fair housing litigation, since it places a premium on prompt action by the plaintiffs and their supporters. Organizations such as the Equal Rights Center, a Metro DC-area group which enlists the assistance of attorneys from major law firms, won't be able to await some triggering event such as a visit by a "tester" or a contact from the public; there will be a premium placed on hitting newly-constructed properties promptly.

Of course, private litigation isn't the only way to attack fair housing accessibility issues. The court in Garcia identified the separate routes which are available:

• In instances in which construction was completed and a certificate of occupancy was issued before the effective date of the Fair Housing Act Amendments -- March 13, 1991, and there have been no modifications since that date, the disability provisions of the statute do not apply. There are, however, often disputes about whether subsequent events have afforded a fresh opportunity for complaints to be made in a timely fashion.
• Any administrative complaint to HUD has to be filed within one year after "an alleged discriminatory housing practice has occurred or terminated."
• The Justice Department can sue for equitable relief regarding a "pattern or practice of resistance" to FHA rights by a defendant, or where there is a denial of rights to "a group of persons" which raises "an issue of general public importance." (You can see how the second clause is so elastic as to invite DOJ to apply it aggressively.) These cases have no statute of limitations but may, in some instances, be argued to be precluded by laches - which in turn requires that the defendant show material prejudice created by the delay.
• Other DOJ enforcement actions are governed by a 5-year statute of limitations "from the date when the claim first accrued." Generally speaking, this is the date of first occupancy of the units or property in question.
• Private rights of action are subject to the 2-year statute discussed in Garcia v. Brockway. Test litigation is expected to be filed throughout the country, and this issue will be raised in many already-pending cases as well. The limitations defense is a useful tool in an environment in which defendants have seen no apparent end to the mushrooming cost of litigation and liability exposure. Careful analysis of specific situations with experienced counsel is definitely in order.