[Federal Register Volume 62, Number 243 (Thursday, December 18, 1997)]
[Proposed Rules]
[Pages 66488-66490]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-33051]
[[Page 66487]]
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Part VI
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Part 180
Civil Penalties for Fair Housing Act Violations; Proposed Rule
Federal Register / Vol. 62, No. 243 / Thursday, December 18, 1997 /
Proposed Rules
[[Page 66488]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 180
[Docket No. FR-4302-P-01]
RIN 2529-AA83
Civil Penalties for Fair Housing Act Violations
AGENCY: Office of the Assistant Secretary for Fair Housing and Equal
Opportunity, HUD.
ACTION: Proposed rule.
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SUMMARY: This proposed rule interprets the Fair Housing Act to allow
Administrative Law Judges (ALJs) to assess a separate civil penalty for
each of multiple acts involving housing discrimination. Under the Fair
Housing Act, housing discrimination violations carry maximum civil
penalties for first-, second-, and third-time offenders. This proposed
rule would interpret the Fair Housing Act to clarify that, in a given
case, an ALJ may assess more than one maximum civil penalty against a
respondent in a given case, where the respondent has committed separate
and distinct acts of discrimination.
The proposed rule is also part of President Clinton's ``Make 'Em
Pay'' initiative, which is designed to fight housing-related acts of
hate violence and intimidation with increased enforcement and monetary
penalties. Such housing-related hate acts continue to pose a
significant problem; last year, according to FBI statistics, of 8,759
hate crimes, 2,416, or 27%, were housing-related. The rule would
describe how ALJs are to consider housing-related hate acts under the
six factors ALJs apply in determining the amount of a civil penalty to
assess against a respondent found to have committed a discriminatory
housing practice.
DATES: Comments on the proposed rule are due on or before: January 20,
1998.
ADDRESSES: Interested persons are invited to submit written comments
regarding this proposed rule to the Rules Docket Clerk, Office of
General Counsel, Room 10276, Department of Housing and Urban
Development, 451 Seventh Street, SW, Washington, DC 20410. Comments
should refer to the above docket number and title. A copy of each
comment submitted will be available for public inspection and copying
between 7:30 a.m. and 5:30 p.m. weekdays at the above address.
Facsimile (FAX) comments will not be accepted.
FOR FURTHER INFORMATION CONTACT: Stephen I. Shaw, Trial Attorney,
Office of Litigation and Fair Housing Enforcement, Room 10258,
Department of Housing and Urban Development, 451 Seventh Street, SW,
Washington, DC 20410; telephone (202) 708-1042. Hearing or speech-
impaired persons may access this number via TTY by calling the Federal
Information Relay Service at 1-800-877-8339. (With the exception of the
``800'' number, these are not toll-free telephone numbers.)
SUPPLEMENTARY INFORMATION:
I. Civil Penalties for Separate and Distinct Fair Housing Act
Violations
The Fair Housing Act (42 U.S.C. 3601-3619), allows an
Administrative Law Judge (ALJ) in a Fair Housing Act case to assess a
civil penalty if the ALJ ``finds that a respondent has engaged in or is
about to engage in a discriminatory housing practice'' (42 U.S.C.
3612(g)(3) (emphasis added)). A ``discriminatory housing practice'' is
defined as ``an act that is unlawful under section 804, 805, 806 or 818
of the [Fair Housing] Act'' (42 U.S.C. 3602(f) (emphasis added)). The
Fair Housing Act specifically does not say that an ALJ may assess only
a single civil penalty for all separate and distinct violations that
respondent is found to have committed in a case. Likewise, the Fair
Housing Act does not specify that the ALJ may assess a civil penalty
for each separate discriminatory housing act. Thus, the statutory
language is ambiguous with respect to the issue of whether an ALJ may
assess multiple civil penalties for multiple discriminatory housing
practices. The legislative history also does not address this point. In
such a case of statutory ambiguity, the agency's interpretation will be
upheld if it is ``based on a permissible construction of the statute.''
Chevron, U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467
U.S. 837, 843 (1984).
It is certainly a permissible and reasonable interpretation of the
Fair Housing Act that, where a respondent commits a single
discriminatory housing practice, that is, a single act of
discrimination, an ALJ has the discretion to assess a civil penalty
against that respondent, up to the maximum, for that particular illegal
act. It is similarly reasonable and permissible to interpret the Fair
Housing Act to indicate that, where a respondent has committed
multiple, separate illegal acts, an ALJ has discretion to assess a
separate civil penalty against a respondent for each separate
discriminatory housing practice that respondent committed in a case.
In accordance with the foregoing construction of the Fair Housing
Act, HUD interprets the language of the statute to indicate that an ALJ
may assess multiple penalties against a respondent in cases where the
respondent is found to have committed multiple discriminatory acts.
Accordingly, under the proposed rule, ALJs will have the discretion to
assess multiple civil penalties in cases where a respondent has
committed more than one discriminatory act, limited only by the number
of violations that respondent is found to have committed.
This rule proposes to amend HUD's regulations at 24 CFR part 180
(Hearing Procedures for Civil Rights Matters) to clarify that, in a
given case, an ALJ may, and in appropriate circumstances should, assess
more than one civil penalty against a given respondent where the
respondent has committed separate and distinct acts of discrimination
II. Housing Related Hate Acts
ALJs often assess maximum civil penalties against respondents in
cases of particularly heinous or pervasive hate acts. Traditionally,
ALJs have applied six factors in determining the amount of a civil
penalty to assess: (1) Whether the respondent has previously been
adjudged to have committed unlawful housing discrimination; (2) the
respondent's financial resources; (3) the nature and circumstances of
the respondent's violation; (4) the degree of the respondent's
culpability; (5) the goal of deterrence; and (6) other matters as
justice may require (HUD v. Housing Authority of Las Vegas, 2A Fair
Housing Fair Lending para. 25,116 (Nov. 6, 1995); H.R. Rep. No. 711,
100th Cong., 2d Sess. at 37 (1988)).
This proposed rule would also amend 24 CFR part 180 to define
``housing related hate act'' and articulate that it is appropriate that
ALJs consider, under the last four of the traditional requirements, the
commission of a housing-related hate act to provide a basis for
assessing a maximum civil penalty. Nothing in this regulation, however,
is intended to lead ALJs to infer that they should necessarily assess a
less than maximum penalty in any particular case that does not involve
a hate act.
III. Creation of New Sec. 180.671
In addition to the amendments described above, this rule proposes
to make a clarifying change to 24 CFR part 180. Specifically, the
provisions governing the assessment of civil penalties currently found
at Sec. 180.670(b)(3)(iii)(A), (B), and (C)
[[Page 66489]]
would be moved to a new Sec. 180.671. With the exception of the
amendments described above, no substantive revisions would be made to
these provisions. HUD, however, is proposing to make changes to certain
of these provisions for purposes of clarity. The creation of a new
Sec. 180.671 is designed to make the part 180 regulations easier to
understand.
IV. Justification for Reduced Comment Period
It is HUD's policy generally to afford the public not less than 60
days for submission of comments on its notices of proposed rulemaking
(24 CFR 10.1). In this case, HUD has determined that it would be
contrary to the public interest to provide a public comment period
greater than 30 calendar days. The current interpretation of the civil
penalty structure has not been sufficient to deter discriminatory
housing practices, particularly housing-related acts of hate violence.
The proposed amendments interpret the Fair Housing Act to insure that
ALJs have the necessary flexibility to assess the appropriate number of
civil penalties to deter these egregious acts of housing
discrimination. The provision of a 60-day comment period would delay
implementation of the proposed amendments, and tend to limit the
ability of the government to maximize the use of civil penalties in
cases involving housing-related hate violence.
HUD believes that the 30-day comment period strikes a balance
between the need for public input in the regulatory process, and the
need to address housing discrimination and, particularly, housing-
related acts of hate violence. HUD recognizes the value and necessity
of public comments in the development of final regulations and welcomes
comments on this proposed rule. All public comments will be addressed
in the final rule.
V. Findings and Certifications
Environmental Impact
In accordance with 24 CFR 50.19(c)(3) of the HUD regulations, the
policies and procedures contained in this proposed rule set out
nondiscrimination standards and, therefore, are categorically excluded
from the requirements of the National Environmental Policy Act.
Executive Order 12612, Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the policies
contained in this proposed rule would have no federalism implications,
and that the policies are not subject to review under the Order.
Executive Order 13045, Protection of Children From Environmental Health
Risks and Safety Risks
This proposed rule would not pose an environmental health risk or
safety risk to children.
Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)) has reviewed and approved this proposed rule, and in so
doing certifies that this proposed rule would not have a significant
economic impact on a substantial number of small entities.
Unfunded Mandates Reform Act
The Secretary has reviewed this proposed rule before publication
and by approving it certifies, in accordance with the Unfunded Mandates
Reform Act of 1995 (2 U.S.C. 1532), that this proposed rule would not
impose a Federal mandate that would result in the expenditure by State,
local, and tribal governments, in the aggregate, or by the private
sector, of $100 million or more in any one year.
Executive Order 12866, Regulatory Planning and Review.
The Office of Management and Budget (OMB) reviewed this proposed
rule under Executive Order 12866, Regulatory Planning and Review. OMB
determined that this proposed rule is a ``significant regulatory
action,'' as defined in section 3(f) of the Order (although not
economically significant, as provided in section 3(f)(1) of the Order).
Any changes made to the proposed rule subsequent to its submission to
OMB are identified in the docket file, which is available for public
inspection in the office of the Department's Rules Docket Clerk, Room
10276, 451 Seventh Street, SW, Washington, DC 20410-0500.
Catalog of Federal Domestic Assistance Number.
The Catalog of Federal Domestic Assistance Number for this program
is 14.400.
List of Subjects in 24 CFR Part 180
Administrative practice and procedure, Aged, Civil rights, Fair
housing, Individuals with disabilities, Intergovernmental relations,
Investigations, Mortgages, Penalties, Reporting and recordkeeping
requirements.
Accordingly, 24 CFR part 180 is proposed to be amended as follows:
PART 180--HEARING PROCEDURES FOR CIVIL RIGHTS MATTERS
1. The authority citation for 24 CFR part 180 continues to read as
follows:
Authority: 29 U.S.C. 794; 42 U.S.C. 2000d-1, 3535(d), 3601-3619,
5301-5320, and 6103.
2. Section 180.670 is amended by revising paragraph (b)(3)(iii) to
read as follows:
Sec. 180.670 Initial decision of ALJ.
* * * * *
(b) * * *
(3) * * *
(iii) Assessing a civil penalty against any respondent to vindicate
the public interest in accordance with Sec. 180.671.
* * * * *
3. Section 180.671 is added to read as follows:
Sec. 180.671 Assessing civil penalties for Fair Housing Act cases.
(a) Amounts. The ALJ may assess a civil penalty against any
respondent under Sec. 180.670(b)(3) for each separate and distinct
discriminatory housing practice (as defined in paragraph (b) of this
section) that the respondent committed, each civil penalty in an amount
not to exceed:
(1) $11,000, if the respondent has not been adjudged in any
administrative hearing or civil action permitted under the Fair Housing
Act or any State or local fair housing law, or in any licensing or
regulatory proceeding conducted by a Federal, State or local
governmental agency, to have committed any prior discriminatory housing
practice.
(2) $27,500, if the respondent has been adjudged in any
administrative hearing or civil action permitted under the Fair Housing
Act, or any State or local fair housing law, or in any licensing or
regulatory proceeding conducted by a Federal, State, or local
government agency, to have committed one other discriminatory housing
practice and the adjudication was made during the five-year period
preceding the date of filing of the charge.
(3) $55,000, if the respondent has been adjudged in any
administrative hearings or civil actions permitted under the Fair
Housing Act or any State or local fair housing law, or in any licensing
or regulatory proceeding conducted by a Federal, State, or local
government agency, to have committed two or more discriminatory housing
practices and the adjudications were made during the seven-year period
preceding the date of the filing of the charge.
(b) Definition of separate and distinct discriminatory housing
practice. A
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separate and distinct discriminatory housing practice is a single,
continuous, uninterrupted transaction or occurrence that violates
section 804, 805, 806, or 818 of the Fair Housing Act, even if
committed by the same person. Each single, continuous, uninterrupted
transaction or occurrence that violates more than one provision of the
Act, violates one provision more than once, or violates the fair
housing rights of more than one person constitutes a separate and
distinct discriminatory housing practice.
(c) Factors for consideration by ALJ. (1) In determining the amount
of the civil penalty to be assessed against any respondent for each
separate and distinct discriminatory housing practice the respondent
committed, the ALJ shall consider the following six (6) factors:
(i) Whether that respondent has previously been adjudged to have
committed unlawful housing discrimination;
(ii) That respondent's financial resources;
(iii) The nature and circumstances of the violation;
(iv) The degree of that respondent's culpability;
(v) The goal of deterrence; and
(vi) Other matters as justice may require.
(2)(i) Where the ALJ finds any respondent to have committed a
housing-related hate act, the ALJ shall take this fact into account in
favor of imposing a maximum civil penalty under the factors listed in
paragraphs (c)(1)(iii), (iv), (v), and (vi) of this section.
(ii) For purposes of this section, the term ``housing-related hate
act'' means any act that constitutes a discriminatory housing practice
under section 818 of the Fair Housing Act and which constitutes or is
accompanied or characterized by the threat, or any action toward
carrying out, or the carrying out of actual violence, intimidation,
coercion, assault, bodily harm, and/or harm to property.
(iii) Nothing in this paragraph shall be construed to require an
ALJ to assess any amount less than a maximum civil penalty in a non-
hate act case, where the ALJ finds that the factors listed in
paragraphs (c)(1)(i) through (vi) of this section warrant the
assessment of a maximum civil penalty.
(d) Persons previously adjudged to have committed a discriminatory
housing practice. If the acts constituting the discriminatory housing
practice that is the subject of the charge were committed by the same
natural person who has previously been adjudged, in any administrative
proceeding or civil action, to have committed acts constituting a
discriminatory housing practice, the time periods set forth in
paragraphs (a)(2) and (3) of this section do not apply.
(e) Multiple discriminatory housing practices committed by the same
respondent; multiple respondents. (1) In a proceeding where a
respondent has engaged in or is about to engage in more than one
separate and distinct discriminatory housing practice, a separate civil
penalty may be assessed against the respondent for each separate and
distinct discriminatory housing practice.
(2) In a proceeding involving two or more respondents, one or more
civil penalties, as provided under this section, may be assessed
against each respondent that has been determined to have been engaged
in or is about to engage in one or more discriminatory housing
practices.
Dated: November 24, 1997.
Andrew Cuomo,
Secretary.
[FR Doc. 97-33051 Filed 12-17-97; 8:45 am]
BILLING CODE 4210-28-P
