66488 Federal Register / Vol. 62, No. 243 / Thursday, December 18, 1997 / Proposed Rules

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.

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 housingrelated. 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 ¶ 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 § 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

§ 180.670(b)(3)(iii)(A), (B), and (C)
Federal Register / Vol. 62, No. 243 / Thursday, December 18, 1997 / Proposed Rules 66489

would be moved to a new § 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 § 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:

§ 180.670 Initial decision of ALJ.

* * * * *

(b) * * *

(3) * * *

(iii) Assessing a civil penalty against

any respondent to vindicate the public

interest in accordance with § 180.671.

* * * * *

3. Section 180.671 is added to read as

follows:

§ 180.671 Assessing civil penalties for Fair

Housing Act cases.

(a) Amounts. The ALJ may assess a

civil penalty against any respondent

under § 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
66490 Federal Register / Vol. 62, No. 243 / Thursday, December 18, 1997 / Proposed Rules

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]

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