Statement of Interest in Gomez v. Quicken Loans (C.D. Cal.)

1 STEVEN H. ROSENBAUM Chief

2 JON M. SEWARD Deputy Chief

3 LUCY G. CARLSON E~ail: lucy.carlson@

4 Tnal Attornex Housing and Civil Enforcement Sectio'i:i1

5 Civil RIghts Division U.S. Department of Justice

6 950 Pennsylvania Avenue, N.W.-G St. Washington, DC 20530

7 Phone: (202) 305-0017 Fax: (202) 514-1116

8

Attorneys for United States of America

9

10

UNITED STATES DISTRICT COURT

11

CENTRAL DISTRICT OF CALIFORNIA

12

RICARDO GOMEZ,

CASE NO. 2:12-cv-10456- RGK~~

13

UNITED STATES OF AMERICA'S

14

Plaintiff,

STATEMENT OF INTEREST IN

OPPOSITION TO QUICKEN

15

v.

LOANS, INC.'S MOTION TO

DISMISS

16 QUICKEN LOANS, INC. AND DOES

1-10 ,

The Hon. R. Gary Klausner

17

Courtroom: 850-LA-Roybal

Defendants.

D.ate: April 22, 2013

18

TIme: 9:00 a.m.

19

20

21

22

23

24

25

26

27

28

TABLE OF CONTENTS

2 I. BACKGROUND........................................................................................ 1

3

4 II. SMITH V CITY OF JACKSON DID NOT OVERRULE, EXPLICITLY OR IMPLICITLY, DECADES OF FHA

5

DISPARATE IMPACT PRECEDENT ....;................................................ 2

6

a. The Ninth Circuit Has Held that the FHA Permits

7

Disparate Impact Claims, Before and After Smith ............................... 3

8

b. Other Circuits Have Held That the FHA Permits

9

Disparate Impact Claims, Before and After Smith ............................... 3

10

c. HUD's Disparate Impact Rule Formalizes Disparate Impact Claims

11

Under The FHA .....4

12

III. DISPARATE TREATMENT CLAIMS DO NOT

13

REQUIRE PROOF OF ILL INTENT........................................................ 5

14

IV. CLAIMS UNDER ECOA DO NOT REQUIRE

15

DENIAL OF CREDIT ............................................................................... 6

16

V. CONCLUSION .......................................................................................... 7

17

18

19

20

21

22

23

24

25

26

27

28

1

TABLE OF AUTHORITIES

2

Cases:

Page

3

Afford4~~ef.3:rllff(9~f/Ci';2o~~).?!:.~:..~~~.~!.~~~~~.~'.......................................3

4

Alexander v. Choate,

5

469 U.S. 287 (1985) ........................................................................................ 5

6

Arthur v. Cit)! o/Toledo,

782 F.2d 565 (6th Cir. 1986) ........................................................................... 4

7

Astralis Condo. Association v. Secretary, HUD,

8

620 F.3d 62 (1st Cir. 2010) ............................................................................. 4

9

Beck v. United Food and Commercial Workers Union, Local 99,

506 F.3d 874 (9th Cir. 2007) ........................................................................... 5

10

Bhandari v. First National Bank ofCommerce,

11

808 F.2d 1082 (5th Cir. 198'7).........................................................................4

12

Commlf~3eF~3d6e90~91hCCr:.200~.:."!:~~~~~."!:.~~~.~:..~~~.~!.~~.~~~~~:..................... 3

13

14

Gamb1104':f.~~ %~(9~hcg1~'1997)........................................................................... 3

Go '404 15 Ide ~~rdot5~ot6tl;.'Cti. 2005) ........................................................................... 4

16

Graoch Associates v. Louisville/Jefferson County Metropolitan Human

17

Relations Commission,

508 F.3d 366 (6th Cir. 2007) ........................................................................... 4

18

Greater New Orleans Fair Housing Action Center v. HUD,

19

639 F.3d 1078 (D.C. Cir. 2011) ......................................................................4

20 Halet v. Wend Investment Co.,

672 F.2d 1305 (9th Cir. 1982)......................................................................... 3

21

Hanson v. Veterans Admin.,

22

800 F.2d 1381 (5th Cir. 1986)......................................................................... 4

23

Hart v. Massanari, 266 F.3d 1155,(9th Cir. 2001) ......................................................................... 3

24

Hernandez v. Sutter West Capital,

25

2010 WL 3385046 (N]). Cal. 2010)............................................................... 6

26

International Brotherhood o/Teamsters v. United States,

431 U.S. 324 (1977) ........................................................................................ 5

27

28

LangloiO?F~fJ1j(1!t(J{:.i2~~d)t~~~~~: .................................................................. 3

Jl

Cases cont'd:

1

Page

McDonald v. Coldwell Banker,

2

543 F.3d 498 (9th Cir. 2008) ........................................................................... 3

3 Mercado-Garcia v. Ponce Federal Bank,

979 F.2d 890 (lst Cir. 1992) ...........................................................................4

4

Metro~olitan Housing Development Corp. v. Village ofArlington Heights,

5

558 F.2d 1283 (7th Cir. 1977)......................................................................... 4

6 Miller v. America Express Co., 688 F.2d 1235 (9th Cir. 1982).........................................................................4

7

Mountain Side Mobile Estates Partnership v. Secretary, HUD,

8

56 F.3d 1243 (lOth Cir. 1995) .........................................................................4

9 Mt. Hol~ Gardens Citizens in Action v. Township ofMount Holly,

10 ~l~&o~~!~~~~?!~~~:~~~~~:~:.~:.~~.~.~.~~:.~:.~~.~.~.!..~:.~~.l~!.~~:.............4

11

Ramirez v. GreenPoint Mortgage Funding, Inc.,

12

633 F. Supp. 2d 922 (N.D. Cal. 2008) ............................................................ 6

13 Reinhart v. Lincoln County, 482 F.3d 1225 (lOt11 Cir. 2007) .......................................................................4

14

Resident Advisor)! Board v. Rizzo

15

564 F.2d 126 (3d Cir. 1977) .........................................................................3-4

16 Smith v. City ofJackson, 544 U.S. 228 (2005) ........................................................................................ 2

17

Smith v. NYCHA,

18

410 F. App'x404 (2d Cir. 2011) ...................................................................... 4

19 Smith v. Town o/Clarkton, 682 F.2d 1055 (4th Cir. 1982)......................................................................... 4

20

Taylor v. Accredited Home Lenders, Inc.,

21

580 F. Supp. 2d 1062 (S.D. Cal. 2008) ........................................................6-7

22 Tsombanidis v. West Haven Fire Department, 352 F.3d 565 (2d Cir. 2003) ............................................................................ 3

23

I1fg 24 United5~W~~2d? 1s9!G~.J19f4) ......................................................................... 4

25 United States v. Marengo County Commission, 731 F.2d 1546 (lIth Cir. 1984) .......................................................................4

26

United States v. Union Automobile Sales, Inc.,

27

2012 WL 2870333 (9th Cir. 2012) .................................................................. 6

28

iii

Statutes:

1

Page

12 C.F.R. ? 202.2(m) ................................................................................................. 6

2

15 U.S.C. ? 1691e(h) ................................................................................................. 1

3

15 U.S.C. ? 1691(a)(2) .............................................................................................. 6

4

24 C.F.R. ? 100.500 ............................................................................................... 4, 5

5

28 U.S.C. ? 517.......................................................................................................... 1

6

42 U.S.C. ? 3602(h) ................................................................................................... 1

7

42 U.S.C. ??3613(e), 3614(a) .................................................................................... 1

8

Age Discrimination in Employment Act, 29 U.S.C. ? 621 et seq ............................. 2

9

Equal Credit Opportunity Act, 15 U.S.C. ?? 1691-1691f ('ECO~') .......................... 1

10

Fair Housing Act, 42 U.S.C. ?? 3601-3619 (~') .................................................. 1

11

Title VII of the Civil Rights Act of 1964,42 U.S.C. ? 2000e et seq ........................ 2

12

13 Other Authorities:

Page

14 12 C.F.R. pt. 202, Supp. 1., Official Staff Interpretations.....................................5, 6

15

16

17

18

19

20

21

22

23

24

25

26

27

28

iv

1

STATEMENT OF INTEREST OF THE UNITED STATES

2

The United States respectfully submits this Statement of Interest, pursuant to

3

4 28 U. S.C ? 517, because this litigation implicates the proper interpretation and 5 application of the Fair Housing Act, 42 U.S.C. ?? 3601-3619 C~'), and the Equal 6 Credit Opportunity Act, 15 U.S.C. ?? 1691-1691f C'ECO~'). The Department of 7 Justice has authority to enforce the FHA and the ECOA and to intervene in any 8 proceeding that involves the FHA. 42 U.S.C. ??3613(e), 3614(a); 15 U.S.C. ? 9 1691e(h). The United States thus has a strong interest in the issues raised in this 10 motion, and believes that its participation will aid the court in resolution of these

11 Issues. In the instant Statement of Interest, the United States takes no position on

12

13 the merits of Plaintiffs case. Due to the issues raised by Defendant Quicken Loans, 14 Inc. C'Quickerl,) in its Motion to Dismiss First Amended Complaint CMTD,), the 15 United States respectfully wishes to clarify for the Court the proper standard for

claims of discrimination under the FHA and the ECOA.

16

17

I. BACKGROUND

18

19

20

The First Amended Complaint C'FAC,) alleges that Plaintiff Ricardo Gomez

21 applied for a mortgage refinance loan from Defendant Quicken Loans, Inc.

22 c'Quickerl') four times between February 2010 and July 2012, and each time a loan

23 was originated by Quicken. FAC,-r,-r 10, 13-16, 18, 19, 23. Mr. Gomez has a

24 disabilityl and receives Social Security Disability Insurance C'SSDI') income. FAC

25 ,-r 4. For his first mortgage application, Quicken required Mr. Gomez to provide

26 medical proof of his disability to establish that his SSDI income would continue;

27 Mr. Gomez objected, but ultimately provided a letter from his doctor. FAC ,-r,-r 11

28 1 The word'tlisabili1j'is used interchangeably with''handicap:'as defined in 42 U.S.C. ? 3602(h).

1

12. Mr. Gomez submitted the three subsequent refinance applications after being

2

contacted by Quicken as part of its roll-down program. For the second mortgage

3

application, Quicken did not ask for further proof that his disability income would

4

continue. FAC,-r 15. For the third application, Quicken required that Mr. Gomez

5 resubmit the letter from his doctor. FAC ,-r 17. At the time of the fourth

6

application, Quicken required Mr. Gomez to provide updated medical proof of his

7

current and permanent disability status; Mr. Gomez again objected but provided a

8

letter from his doctor. FAC,-r 21-22.

9

The FAC alleges that it was Quicken's policy to require loan applicants with

10 disabilities receiving disability income to provide medical information about their

11

disabilities as a condition of receiving a mortgage. FAC,-r 24. The FAC alleges

12

that this policy is ongoing. FAC,-r 29.

13

14

II. SMITH V. CITY OF JACKSON DID NOT OVERRULE, EXPLICITLY

15

OR IMPLICITLY, DECADES OF FHA DISPARATE IMPACT

16

PRECEDENT

17

18

Quicken argues that Smith v. City ofJackson, 544 U.S. 228 (2005), reversed

19

precedents holding that disparate impact claims may be brought under the FHA.

20 MTD 13-14. Smith held that the Age Discrimination in Employment Act, 29

21

U.S.C. ? 621 et seq. ('ADElX,), permitted disparate impact claims, by comparing

22

language in the ADEA to certain language in Title VII of the Civil Rights Act of

23

1964, 42 U.S.C. ? 2000e et seq. (Title VII'). Smith did not hold either that language

24

identical to the ADEA or Title VII was mandatory to assert disparate impact

25 claims, nor that the ruling applied beyond the ADEA. Consequently, every court

26

to have considered the issue has rejected Quicken's argument that Smith precludes

27

disparate impact claims under the FHA and ECOA, and this Court should do the

28

same.

2

A. The Ninth Circuit Has Held that the FHA Permits Disparate Impact

2

Claims, Before and After Smith

3

4

Quicken's analysis of Smith provides no basis for this Court to ignore the

5 authority of cases in the Ninth Circuit -- decided after Smith -- permitting disparate

6 impact claims under the FHA. See, e.g., Committee Concerning Community

7 Improvement v. City of Modesto, 583 F.3d 690, 711 (9th Cir. 2009) (standard for

8 FHA disparate impact claim); McDonald v. Coldwell Banker, 543 F.3d 498, n.7

9 (9th Cir. 2008) (FHA claims may be brought as disparate impact or disparate

10 treatment); Affordable Hous. Dev. Corp. v. City ofFresno, 433 F.3d 1182,1194-95

11 (9th Cir. 2006) (standard for FHA disparate impact claim). These cases are

12 consistent with Ninth Circuit precedent before Smith. See, e.g.,_Gamble v. City of

13 Escondido, 104 F.3d 300, 304-305 (9th Cir. 1997) ('A plaintiff can establish an

14 FHA discrimination claim under a theory of disparate treatment or disparate

15 impact:'); Halet v. Wend Inv. Co., 672 F.2d 1305, 1311 (9th Cir. 1982). The Ninth

16 Circuit precedent alone disposes of Quicken's argument

17

Quicken asks the Court to disregard this Circuifs binding precedent based

18 solely on Quicken's analysis of Smith. MTD at 14. To adopt Quickens .argument

19 would be legal error because this Court is bound to apply the law of the Ninth

20 Circuit. Hart v. Massanari, 266 F.3d 1155, 1175 (9th Cir. 2001). Unless and until

21 the Supreme Court or the Ninth Circuit sitting en banc holds otherwise, disparate

22 impact claims are cognizable under the FHA in this Circuit.

23

24 B. Other Circuits Have Held That the FHA Permits Disparate Impact

25

Claims, Before and After Smith

26

27

Prior to Smith, ten other circuits agreed with the Ninth Circuit that the FHA

28 authorizes disparate impact claims. Several courts of appeals similarly recognized

3

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download