[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]



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Part VI





Department of Housing and Urban Development





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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  

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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)

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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