[Federal Register Volume 62, Number 63 (Wednesday, April 2, 1997)]
[Rules and Regulations]
[Pages 15794-15797]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8212]
[[Page 15793]]
_______________________________________________________________________
Part III
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Part 103
Revision of HUD's Fair Housing Complaint Processing; Final Rule
Federal Register / Vol. 62, No. 63 / Wednesday, April 2, 1997 / Rules
and Regulations
[[Page 15794]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 103
[Docket No. FR-4031-F-02]
RIN 2529-AA79
Revision of HUD's Fair Housing Complaint Processing
AGENCY: Office of the Assistant Secretary for Fair Housing and Equal
Opportunity, HUD.
ACTION: Final rule.
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SUMMARY: On August 8, 1996 (61 FR 41480), HUD published an interim rule
amending its regulations governing fair housing complaint processing.
Specifically, the rule removed a provision allowing a respondent to
request a subpoena during a fair housing investigation. This rule
finalizes the policies and procedures set forth in the August 8, 1996
interim rule and takes into consideration the public comments received
on the interim rule. HUD has decided to adopt the interim rule without
change.
EFFECTIVE DATE: May 2, 1997.
FOR FURTHER INFORMATION CONTACT: Susan Forward, Deputy Assistant
Secretary for Enforcement and Investigations, Room 5106, Department of
Housing and Urban Development, 451 Seventh Street, SW, Washington, DC
20410, telephone number (202) 708-4211. For hearing or speech-impaired
persons, this number may be accessed via TTY by calling the Federal
Information Relay Service at 1-800-877-8339. (With the exception of the
``800'' number, these numbers are not toll-free.)
SUPPLEMENTARY INFORMATION:
I. Interim Rule Finalized Without Change
The public comment period on the August 8, 1996 interim rule
expired on October 7, 1996. Only ten public comments were received. HUD
has decided not to make any changes as a result of public comment.
Section III. of the preamble presents a summary of the significant
issues raised by the public commenters on the interim rule, and HUD's
responses to these comments.
II. The August 8, 1996 Interim Rule
The Fair Housing Amendments Act of 1988 (Pub. L. 100-430, 102 Stat.
1619) (1988 Act) amended section 811 of the Fair Housing Act (Title
VIII of the Civil Rights Act of 1968, as amended, 42 U.S.C. 3601 et
seq.). Section 811, as amended, authorizes the Secretary of HUD to
issue subpoenas and order discovery in aid of fair housing
investigations and hearings. Prior to the 1988 Act, section 811(b) of
the Fair Housing Act permitted a respondent to request the issuance of
a subpoena during a fair housing investigation:
Upon written application to the Secretary, a respondent shall be
entitled to the issuance of a reasonable number of subpoenas by and
in the name of the Secretary to the same extent and subject to the
same limitations as subpoenas issued by the Secretary himself.
42 U.S.C. 3611(b) (1969).
The 1988 Act removed the above-quoted provision for the Fair
Housing Act and granted the Secretary sole authority for conducting
discovery during fair housing investigations. HUD's regulations at 24
CFR part 103 (Fair Housing Complaint Processing), however, included a
provision which permitted a respondent to request a subpoena during an
investigation. On August 8, 1996 (61 FR 41480), HUD published an
interim rule amending Sec. 103.215(b) to remove this provision. This
rule finalizes the policies and procedures set forth in the August 8,
1996 interim rule and takes into consideration the public comments
received on the interim rule. The August 8, 1996 interim rule provided
additional details on the amendments to 24 CFR 103.215(b).
III. Discussion of Public Comments on the August 8, 1996 Interim
Rule
Statutory Support for Subpoena Requests by Respondents
Comment. Four commenters believe that revised section 811 of the
Fair Housing Act does not prohibit a respondent from requesting the
issuance of a subpoena during a fair housing investigation. These
commenters noted in support of this argument that section 811 refers to
witness fees which are payable by a party requesting a subpoena.
These commenters also cited language from the House Judiciary
Committee Report on the 1988 Act: ``The Committee intends that the
Secretary will subpoena all relevant witnesses and that in most
instances parties will not have to request subpoenas'' (House Report
No. 100-711, 100th Cong., 2d Sess. 36 (1988)). The commenters believe
that the language of the statute, as well as its legislative history,
supports their contention that the Congress intended to permit parties
to request subpoenas during both investigations and hearings under the
Fair Housing Act.
HUD response. Section 811(a) of the Fair Housing Act states:
The Secretary may, in accordance with this subsection, issue
subpoenas and order discovery in aid of investigations and hearings
under this title. Such subpoenas and discovery may be ordered to the
same extent and subject to the same limitations as would apply if
the subpoenas or discovery were ordered or served in aid of a civil
action in the United States district court for the district in which
the investigation is taking place.
42 U.S.C. 3611 (1996).
As the commenters noted, section 811 does not prohibit the issuance
of subpoenas to complainants or respondents during investigations;
however, neither does it provide complainants or respondents the right
to request subpoenas or conduct discovery during investigations.
Section 811 grants to the Secretary the right to issue subpoenas and
order discovery in the same manner as such subpoenas could be granted
or discovery ordered by a United States district court. In granting
this authority to the Secretary, the Congress authorized the issuance
of subpoenas upon the request of a party to a hearing before an
administrative law judge, as provided for in section 812(c) of the Fair
Housing Act: ``At a hearing under this section, each party may appear
in person, be represented by counsel, present evidence, cross-examine
witnesses, and obtain the issuance of subpoenas under section 811'' (42
U.S.C. 3612(c) (1996)).
The language of the House Report relied upon by the commenters
further supports HUD's interpretation of section 811. The sentence in
the House Report immediately prior to the one cited by the commenters
states: ``The Committee intends that subpoenas and discovery be
available and ordered to the same extent as allowed in the U.S.
district courts.''
Had the Congress intended to provide respondents with the right to
request subpoenas during investigations, it could have retained the
original text of section 811(b) of the Fair Housing Act, which
expressly established such a right. The deletion of that provision by
the 1988 Act indicates that the Congress did not intend to create such
a right.
The statement from the House Committee Report, which sets forth the
Committee's intent to make subpoenas and discovery available to the
same extent as in Federal district court, the language of section 811,
as amended in 1988 to eliminate the provisions allowing respondents to
request subpoenas, and section 812, which authorizes parties to an
administrative hearing to obtain the issuance of subpoenas, clearly
indicate that the Congress intended that parties to a hearing before an
administrative law judge under the Fair Housing Act have
[[Page 15795]]
the same rights to discovery that would be available were the action to
be brought in Federal district court. By amending its regulations to
restrict the issuance of subpoenas in support of discovery to the
enforcement proceeding itself, HUD is complying with the expressed
intent of the Congress.
Furthermore, to allow respondents to conduct and compel discovery
during an investigation as well as during a hearing before an
administrative law judge or a trial in Federal district court would, in
effect, allow respondents ``double discovery'' during investigations
and enforcement. HUD believes that formal judicial discovery is more
properly limited to the judicial proceeding occurring after a Charge
has been issued. HUD interprets the Fair Housing Act's delegation of
judicial authority to provide for discovery by complainants and
respondents during an enforcement hearing before an administrative law
judge only.
Respondent's Ability To Prepare Defense
Comment. The preamble to the August 8, 1996 interim rule emphasized
that the interim rule did not compromise a respondent's ability to
conduct its own investigation of the facts and prepare its own defense.
Four commenters disagreed with this point. These commenters believe
that the interim rule would prevent a respondent from requesting that
HUD obtain information which could lead to a Determination of No
Reasonable Cause in that respondent's case. The commenters believe that
it would be improper for respondents to have no opportunity to
challenge the accuracy of the allegations underlying a complaint. One
commenter complained that it would be unfair ``to allow one side, the
complainant, to gather information through the use of [HUD's]
investigative powers,'' without providing similar investigative means
to the respondent.
HUD response. HUD has responsibility for conducting a fair and
impartial investigation into the facts surrounding alleged violations
of the Fair Housing Act. To that end, it will consider and evaluate all
information received, from whatever source. If a respondent knows of
information that will be of assistance to HUD in reaching its
determination, the respondent should make that information known to the
investigator. Similarly, should a respondent wish to challenge the
accuracy of information possessed by HUD, it may present all
information at its disposal to do so. This rule does not affect a
respondent's ability to make HUD aware of information for its own
investigative purposes or challenge information possessed by HUD, and
it authorizes HUD to act on information provided by complainants and
respondents in determining whether HUD should issue a subpoena.
Delays in HUD's Investigation Process
Comment. The preamble to the August 8, 1996 interim rule stated HUD
was issuing this rule in part to eliminate delays in investigations
which are associated with subpoena requests and streamline the
investigative process. Two commenters disagreed that the interim rule
would expedite HUD's investigation of fair housing complaints. One of
these commenters referred to statistical data included in the report on
the enforcement of the 1988 Amendments Act prepared by the United
States Commission on Civil Rights (Report): 1
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\1\ United States Commission on Civil Rights, The Fair Housing
Amendments Act of 1988: The Enforcement Report (1994).
During fiscal year 1990, 64 percent of the complaints were
closed in more than the target 100 days; in 1991 the figure dropped
to 62 percent; in 1992, it dropped further to 40 percent; and in
1993, the last year reported, it dropped to 39 percent. Accordingly,
over these years, while the respondent had the ability to request
subpoenas, HUD's performance in closing cases was improved. Report
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at 41. (Emphasis in the original.)
The commenter wrote that the cited Report language demonstrated
that there are other reasons for the delay in fair housing
investigations.
Another commenter disagreed, stating that processing subpoena
requests can delay the investigative process. This commenter
acknowledged that it is in the interest of both complainants and
respondents to avoid such delays.
HUD response. As the commenters recognized, HUD has made a serious
effort to reduce the amount of time involved in investigations and to
improve its own performance in expeditiously closing cases. In
accordance with the President's initiative on regulatory reform, HUD
has undertaken to streamline further its complaint processing
procedures. In the past, subpoena processing has significantly affected
case closing periods in only a limited number of cases; however, HUD
believes that the public interest in reducing regulatory burdens is
best served by eliminating obstacles to the prompt processing of
complaints wherever those obstacles may be found. While there are other
considerations that support amending this rule, such as fairness to
both complainants and respondents, the proper role of HUD in
investigations, and conforming Departmental practice to that of other
agencies enforcing civil rights laws, HUD has also determined that this
final rule will improve HUD's performance and reduce the overall burden
of its regulations on respondents and complainants alike.
Appearance of Conflict of Interest
Comment. HUD promulgated this rule in part to prevent the
appearance of a conflict between the Department's dual roles as
investigator and as arbiter of discovery disputes between complainants
and respondents. One commenter acknowledged that the current rule
creates the improper appearance that the investigation is an
adversarial process in which HUD and the complainant share the same
interest. The commenter recognized that this is not the case and that
HUD conducts each investigation to determine objectively whether the
Fair Housing Act has been violated. For this reason, the commenter
supported amending the rule to correct that improper appearance of
partiality.
Five commenters expressed their doubt that the interim rule would
prevent the appearance of such a conflict. These commenters believe
that the rule, by not granting to respondents the right to request a
subpoena during investigations, created the appearance that HUD was
conducting investigations, not as an impartial arbiter, but as an
advocate of the complainant. One commenter noted that many complaints
are filed by ``testers'' funded by HUD through programs such as the
Fair Housing Initiatives Program (FHIP). The commenter believes that in
cases where HUD has played such an active role in generating the
complaint, the impartiality of HUD's investigation would benefit from
having the full participation of the respondent when inquiring into the
testing procedures used.
HUD response. HUD provides funding under the FHIP program to state
and local governments and public or private nonprofit organizations to
conduct fair housing education, outreach, and enforcement activities
throughout the country. (See 42 U.S.C. 3616 note.) Complaints submitted
by organizations receiving such grants are investigated with the same
impartial consideration as all other alleged Fair Housing Act
violations.
Hindrance to Conciliation Efforts
Comment. Three commenters believe the interim rule would hinder
HUD's efforts to conciliate fair housing
[[Page 15796]]
complaints. These commenters noted that some fair housing complaints do
not provide sufficient information regarding the substance of the
particular alleged discriminatory behavior. The commenters wrote that
most respondents would be hesitant to conciliate or settle a fair
housing complaint before having the opportunity to investigate fully
its underlying facts.
HUD response. This amendment in no way limits any person's ability
to conduct an investigation of the facts surrounding any alleged
violation of the Fair Housing Act. This rule only limits a respondent's
ability to use HUD's authority to compel discovery during an
investigation. Nothing prevents respondents from conducting their own
investigations of the underlying facts and respondents may choose to
delay conciliating complaints until their own investigations are
completed. In the vast majority of complaints that have been
conciliated, conciliation has been accomplished without respondents
resorting to formal discovery measures or requesting subpoenas. This
rule will not significantly affect the resolution of Fair Housing Act
complaints through conciliation, which will continue to be an important
tool for resolving complaints.
Respondent's Right to Conduct Discovery
Comment. Four of the commenters objected to the description of the
interim rule as announced in its preamble. The commenters believe that
HUD should have announced more clearly that the interim rule
effectively eliminated all discovery rights of the respondent during
the investigative stage, not merely the right to have a subpoena issued
at its request.
HUD response. HUD intends this rule to conform its investigative
process to the practice of other Federal agencies enforcing civil
rights laws and to simplify and streamline the investigative process;
therefore, this rule no longer provides that respondents may use HUD's
resources to compel formal discovery during an investigation. However,
it should be noted that both complainants and respondents retain the
ability to conduct their own investigations of the facts surrounding
any complaint. Only the use of formal compulsory discovery procedures
during an administrative investigation has been eliminated by this
rule. HUD has emphasized in this Preamble that the effect of this final
rule is to end ``double discovery'' and limit a respondent's ability to
request subpoenas or conduct discovery to hearings before
administrative law judges or civil trials in Federal district court.
In deciding whether to amend the existing rule, HUD looked to the
experience of other Federal agencies enforcing civil rights laws for
guidance on this issue. A review of the relevant regulations of such
other agencies, including the Equal Employment Opportunity Commission,
the Department of Education, and the Department of Justice, revealed
that none of them provide for such ``double discovery'' during both
investigations and enforcement proceedings as was provided for in HUD's
existing regulation. The Department believes that the experience of
other Federal administrative agencies provides positive guidance for
this decision to streamline and simplify the investigation process.
Department of Justice Memorandum
Comment. The preamble to the August 8, 1996 interim rule referred
to a Department of Justice opinion to support the amendments made to
Sec. 103.215(b) (61 FR 41480).2 Three commenters questioned HUD's
reliance on this opinion. These commenters believe that the opinion was
not directed to the issues contained in the interim rule, but rather
was directed to the narrow question of whether an attorney-client
relationship exists between Department of Justice attorneys and
complainants under the Fair Housing Act. According to the commenters,
the memorandum does not address the question of HUD's role in fair
housing investigations, nor does it define the relationship between HUD
and a complainant during the investigation stage of a fair housing
proceeding.
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\2\ Assistant Attorney General Walter Dellinger, memorandum to
Deval L. Patrick, Assistant Attorney General for Civil Rights, The
Relationship Between Department Attorneys and Persons on Whose
Behalf the United States Initiates Cases Under the Fair Housing Act
(January 20, 1995).
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HUD response. The commenters are correct in stating that the
opinion did not reach the nature of HUD's relationship with a
complainant during Fair Housing Act investigations. To the extent that
the opinion supported HUD's interpretation of its role in the
investigation as being neutral and impartial, it did so only by
analogy. HUD relies on that opinion in support of this rule only to the
extent that it states that even after a Charge of Discrimination has
been issued and the government is prosecuting a case on the
complainant's behalf, a government attorney's obligation is to enforce
the law, not to advocate for either complainants or respondents. This
is consistent with the current investigatory procedure of HUD and that
of other agencies enforcing civil rights laws. HUD's duty in both
investigations and enforcement proceedings is to enforce the law, not
to advocate for either side, and its regulations must reflect that
role.
HUD's Justification for Interim Rulemaking
Comment. Five of the commenters believe that HUD should have
solicited public comment prior to issuing the August 8, 1996 rule for
effect. These commenters questioned the justification for interim
rulemaking provided by HUD in the preamble to the August 8, 1996 rule.
HUD response. HUD's regulations at 24 CFR part 10 (Rulemaking
Policy and Procedures) authorize HUD to issue a rule for immediate
effect if the agency finds good cause to omit advance notice and public
participation. The good cause requirement is satisfied when prior
public procedure is ``impracticable, unnecessary, or contrary to the
public interest'' (24 CFR 10.1). In this case, the public interest in
reducing the burdens of HUD's regulations and expediting Fair Housing
Act investigations has been served through promulgation of the interim
rule.
HUD has not received any requests for subpoenas by respondents
subsequent to the effective date of the August 8, 1996 interim rule.
HUD carefully reviewed and considered all comments received on the
interim rule. Accordingly, the interim rule has not impacted a
respondent's ability to request a subpoena prior to HUD's consideration
of the public comments and the publication of this final rule.
III. Findings and Certifications
Regulatory Flexibility Act. The Secretary, in accordance with the
Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed and approved
this final rule, and in so doing certifies that this rule will not have
a significant economic impact on a substantial number of small
entities. This rule streamlines HUD's regulations governing fair
housing complaint processing (24 CFR part 103). Specifically, the final
rule removes a provision which allows a respondent to request a
subpoena during a fair housing investigation. The removal of this
provision will eliminate the delays associated with subpoena requests
and expedite the investigation process. The rule will also conform
HUD's investigative practices with those of other Federal
administrative agencies. The rule will have no adverse or
[[Page 15797]]
disproportionate economic impact on small businesses.
Environmental Impact. In accordance with 24 CFR 50.19(c)(3) of the
HUD regulations, the policies and procedures contained in this 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 this rule will not have substantial
direct effects on States or their political subdivisions, or the
relationship between the Federal government and the States, or on the
distribution of power and responsibilities among the various levels of
government. This final rule is solely concerned with HUD's processing
of complaints under the Fair Housing Act. No programmatic or policy
changes will result from this rule that would affect the relationship
between the Federal government and State and local governments.
Executive Order 12606, The Family. The General Counsel, as the
Designated Official under Executive Order 12606, The Family, has
determined that this rule will not have the potential for significant
impact on family formation, maintenance, or general well-being, and
thus is not subject to review under the Order. The only amendments made
by this final rule are to HUD's regulations governing fair housing
complaint processing. This final rule streamlines these regulations by
removing the provision which authorizes a respondent to request the
issuance of a subpoena during an investigation. No significant change
in existing HUD policies or programs would result from promulgation of
this final rule, as those policies and programs relate to family
concerns.
Executive Order 12866, Regulatory Planning and Review. The Office
of Management and Budget (OMB) reviewed this rule under Executive Order
12866, Regulatory Planning and Review. OMB determined that this 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 final 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.
Unfunded Mandates Reform Act. The Secretary has reviewed this 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
rule does not impose a Federal mandate that will result in the
expenditure of State, local, and tribal governments, in the aggregate,
or by the private sector, of $100 million or more in any one year.
List of Subjects in 24 CFR Part 103
Administrative practice and procedure, Aged, Fair housing,
Individuals with disabilities, Intergovernmental relations,
Investigations, Mortgages, Penalties, Reporting and recordkeeping
requirements.
Accordingly, the interim rule published at 61 FR 41480, August 8,
1996, amending 24 CFR part 103 is adopted as final without change.
Dated: February 13, 1997.
Susan M. Forward,
Deputy Assistant Secretary for Enforcement and Investigations.
[FR Doc. 97-8212 Filed 4-1-97; 8:45 am]
BILLING CODE 4210-28-P