Mountain Side Mobile Estates Partnership v. Secretary of Housing and Urban Development

• Decision Date: 30 May 1995
• Docket Number: No. 94-9509,94-9509
• Citation: 56 F.3d 1243
• Parties: MOUNTAIN SIDE MOBILE ESTATES PARTNERSHIP, Robert Dalke, Marilyn Dalke, Petitioners, v. SECRETARY OF HOUSING AND URBAN DEVELOPMENT, on behalf of Jacqueline, Jaime, Michael and Shena VanLoozenoord, and on behalf of Michael Brace, Respondents, Jacqueline VanLoozenoord; James VanLoozenoord; Michael VanLoozenoord; Shena VanLoozenoord; Michael Brace, Intervenors.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1243

56 F.3d 1243

MOUNTAIN SIDE MOBILE ESTATES PARTNERSHIP, Robert Dalke Marilyn Dalke, Petitioners, v. SECRETARY OF HOUSING AND URBAN DEVELOPMENT, on behalf of Jacqueline, Jaime, Michael and Shena VanLoozenoord, and on behalf of Michael Brace, Respondents Jacqueline VanLoozenoord; James VanLoozenoord; Michael VanLoozenoord; Shena VanLoozenoord; Michael Brace, Intervenors.

No. 94-9509.

United States Court of Appeals Tenth Circuit.

May 30, 1995.

Stephen E. Kapnik (Don D. Johnson with him, on the brief) of Lohf, Shaiman & Jacobs, P.C., Denver, CO, for petitioners.

Gregory B. Friel (Deval L. Patrick, Asst. Atty. Gen., Jessica Dunsay Silver, with him on the brief), Dept. of Justice, Washington, DC, for respondents.

Penda D. Hair (Elaine R. Jones, Director-Counsel and Theodore M. Shaw, NAACP Legal Defense and Educational Fund, Inc., New York City, with her, on the brief), NAACP Legal Defense and Educational Fund, Inc., Washington, DC, for intervenors.

Joseph L. Coppola of Rice, Coppola & Hamrick, P.C., Englewood, CO, and Christopher B. Hanback of Jackson & Campbell, P.C. Washington, DC, for Amici Curiae.

Before KELLY, BARRETT, and HENRY, Circuit Judges.

BARRETT, Senior Circuit Judge.

Mountain Side Mobile Estates Partnership, Robert Dalke, and Marilyn Dalke (collectively referred to as Mountain Side) appeal from the Third Initial Decision on Remand and Order of the Department of Housing and Urban Development (HUD) entered after hearings before an administrative law judge. The Order awarded damages to intervenors in total amount of $9,178.50 and injunctive relief based on the Secretary of Housing and Urban Development's third remand finding of discrimination in violation of the Fair Housing Act (FHA), 42 U.S.C. Secs. 3601, et seq.

Facts

Mountain Side owns a mobile home park in Jefferson County, Colorado, which was built in the 1960's. Robert and Marilyn Dalke have been the park's resident managers since December, 1989. The park consists of 229 mobile home lots each of which is available to be leased as real property for placement of one mobile home. The park provides utilities, including water, power, telephone, and sewer hookups, to each lot. The park was built to accommodate "older" single-wide mobile homes of 8 to 10 feet wide and 30 to 55 feet long. The park cannot accommodate the modern single-wide or double-wide mobile homes, which are much wider and longer. The density in the park is almost 10 mobile homes per acre, whereas modern parks average 5 to 6 mobile homes per acre.

Prior to March, 1989, the park was an adults-only park; Mountain Side prohibited any person under 21 years of age from living in the park. After the 1988 amendments to the FHA, effective March 12, 1989, Mountain Side instituted a new occupancy policy of no more than three persons per mobile home. The FHA amendments prohibit discrimination on the basis of familial status unless a housing provider can meet a narrow exemption for "housing for older persons." Mountain Side determined that it could not meet the exception. Since March, 1989, it has accepted all residents, including families with minor children, subject to its occupancy policy.

In September, 1991, Jacqueline VanLoozenoord (VanLoozenoord), her three minor children, and her "roommate and companion," Michael Brace (Brace), moved into a mobile home in the park. ¹ Neither VanLoozenoord nor Brace contacted the park management or submitted an application for tenancy prior to their occupancy. They purchased the mobile home in place. The sellers did not advise them that the park had a three person occupancy limit.

Shortly after they moved in, Robert Dalke inquired of Brace as to the number of residents in the mobile home. When Brace informed him that five people were living there ², Dalke informed him of the park's three person per lot occupancy limit and told him they would have to move. Subsequently, Mountain Side served VanLoozenoord and Brace with a notice, dated October 14, 1991, demanding that they vacate the park by November 14, 1991.

A summons, dated November 8, 1991, was posted on the door of VanLoozenoord's and Brace's mobile home ordering them to appear in Jefferson County District Court to answer an eviction complaint filed by Mountain Side. The eviction hearing was held on January 16, 1992, and the court ruled in favor of Mountain Side solely on the ground that VanLoozenoord and Brace had failed to apply for residency in the park. On February 3, 1992, VanLoozenoord and Brace were ordered to remove their mobile home from the park within 48 hours. VanLoozenoord filed a written complaint with the Denver office of HUD asserting that Mountain Side had violated the familial status provision of the 1989 amendments to the FHA. Brace filed a similar companion complaint.

On July 24, 1992, HUD caused two separate charges of discrimination to be issued, one on behalf of VanLoozenoord and her three children and one on behalf of Brace (collectively referred to as Complainants). After charges were filed, HUD began the conciliation process required by the FHA. Mountain Side agreed to conciliate, hired counsel to attend and assist them, and attended the conciliation meeting arranged by HUD. However, Complainants refused to attend or participate in any conciliation or otherwise discuss settlement.

Mountain Side elected to have a judicial hearing of the charges before an independent United States Administrative Law Judge (ALJ). The ALJ held a full evidentiary hearing on October 29 and 30, 1992, and issued his Initial Decision and Order on March 22, 1993, dismissing the charges of discrimination. In that order, the ALJ set forth in detail 47 findings of fact which will be reviewed infra. On April 26, 1993, the Secretary of HUD remanded the case for reconsideration. The ALJ issued an Initial Decision on Remand and Order again rejecting HUD's claims on June 18, 1993. The Secretary again remanded the case to the ALJ who issued his Second Initial Decision on Remand and Order on September 20, 1993, again dismissing the charges. On October 20, 1993, the Secretary overturned the ALJ's decision, entered judgment for HUD, and remanded the case for further proceedings consistent therewith. On December 17, 1993, the ALJ issued his Third Decision on Remand and Order, granting injunctive relief and awarding damages to Complainants. The decision became final on January 18, 1994, after the expiration of the Secretary's 30-day review period.

Issues

On appeal, Mountain Side contends that: (1) the ALJ's Initial Decision and Order became final upon the failure of the Secretary to complete a review within 30 days; (2) the Complainants lack standing to bring the charges under the FHA; (3) due to Complainants' refusal to participate in conciliation required by the FHA, the charges should be dismissed or at least no damages awarded; (4) discrimination in violation of the FHA familial status amendments by a private housing provider is not proven by disparate impact alone; (5) the Secretary's three remands were arbitrary and capricious and violated Mountain Side's right to due process; (6) the charges are barred by res judicata; and (7) there is no basis in the record for the award of injunctive relief. ³

I.

Mountain Side contends that the ALJ's Initial Decision and Order of March 22, 1993, became final upon the failure of the Secretary to complete a review within 30 days, because the regulations describing the Secretary's review power exceed the authority granted by the FHA. The Secretary remanded to the ALJ within the 30-day period with directions to consider HUD's motion for reconsideration.

Mountain Side argues that the intent of the FHA is that "a final order will exist on the 31st day following the issuance of the ALJ's order determining the case on the merits." (Petitioner's Opening Brief at 35). They assert that the "final order may take one of two forms: it may be the ALJ's order, unaltered by the Secretary's review, or it may be the ALJ's order as modified by the Secretary's timely review." Id.

In addition, Mountain Side claims that the Secretary's order of April 21, 1993, while nominally referred to as a remand, was in actuality merely an unauthorized extension of time for review. Mountain Side asserts that "review" requires direction to the ALJ to take new evidence or consider new issues not originally before the ALJ and that the Secretary's April 21, 1993, order did neither. Therefore, according to Mountain Side, all subsequent orders entered by the Secretary were beyond HUD's jurisdiction and are void.

HUD asserts that Congress has expressly delegated to the Secretary the power to promulgate regulations implementing the FHA, 42 U.S.C. Sec. 3614a, and that any regulation interpreting the Secretary's power of review must be upheld if it is reasonable and not in conflict with the plain language of the statute.

The FHA provides:

(h) Review by Secretary; service of final order

(1) The Secretary may review any finding, conclusion or order issued under subsection (g). Such review shall be completed not later than 30 days after the finding, conclusion, or order is so issued; otherwise the finding, conclusion or order becomes final.

42 U.S.C. Sec. 3612(h)(1).

HUD regulations interpret this provision to permit the Secretary to "affirm, modify or set aside, in whole or in part, the initial decision or remand the initial decision for further proceedings." 24 C.F.R. Sec. 104.930(a).

When, as in the FHA Sec. 3614a, ⁴ "Congress explicitly delegates to an agency the authority to elucidate a specific statutory provision, the agency's interpretation is given controlling weight unless arbitrary, capricious, or manifestly contrary to the statute. Absent such an explicit delegation, the agency's interpretation generally controls if it is reasonable and consistently applied, though no deference is warranted if the interpretation is inconsistent with the legislative intent reflected in...