In this case, the Third Circuit was asked to determine whether the design and accessibility requirements of the Fair Housing Act (FHA) apply to commercial buildings constructed prior to March 1991—the effective date of the requirements—but converted to residential use after that date. In affirming the lower court’s dismissal, the Third Circuit found that the U.S. Department of Housing and Urban Development’s (HUD) interpretation that the FHA requirements only apply to buildings constructed after March 1991 was reasonable.
Appellees Post Goldtex GP, LLC and Post Goldtex, L.P. own the Goldtex Apartment Building in Philadelphia (the Building), which was designed by Appellees KlingStubbins, LLP and KlingStubbins, Inc. (collectively Appellees). The Building was originally constructed as a factory, but was abandoned and in disrepair by 2000. Goldtex purchased the building in 2010, converted it to residential units, and began accepting tenants in 2013. The Fair Housing Rights Center (FHRC) sued Appellees for discriminating against individuals with disabilities after a 2014 inspection revealed several FHA design and construction violations (e.g., the entrance door was too heavy, kitchen counters were too tall, and passageways were less than 36 inches wide).
FHRC sought a declaratory judgment that Appellees violated the FHA and a permanent injunction requiring the Building be made FHA compliant. Appellees moved to dismiss for failure to state a claim. They argued the plain language of § 3604(f)(3)(C) exempted the building from FHA design and construction requirements, because the building was constructed prior to March 1991. Conversely, FHRC argued the requirements applied to any dwelling constructed and first occupied after the statute’s effective date, residential, commercial, or otherwise. Applying the two-step analysis from Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984) to HUD’s interpretation of the requirements, the district court agreed with Appellees’ interpretation and dismissed the action.
Under Chevron courts were directed to initially determine whether a statute was ambiguous. If ambiguous, an agency’s interpretation of that statute was given controlling weight unless it could be shown to be plainly inconsistent. Here, the provision at issue requires the FHA’s accessibility requirements apply to “the design and construction of covered multi-family dwellings for first occupancy after” March 13, 1991.
The Third Circuit determined this particular provision was open to multiple interpretations, and was therefore ambiguous. HUD’s interpretation was that it only applied to new construction after 1991 and thus did not apply to the Building. This interpretation, the Third Circuit found, was reasonable, and FHRC’s interpretation was plainly inconsistent with HUD’s interpretation. Therefore, the court affirmed the lower court’s dismissal of FHRC’s claim.
Bob Turchick, Law Clerk