Opinion ID: 770594
Heading Depth: 3
Heading Rank: 4

Heading: The San Francisco Office's Investigation

Text: 15 In early November 1993, the San Francisco Office sent letters to White, Deringer, and Graham. The office enclosed HRI's complaint and stated that the plaintiffs could file an answer within ten days. HUD, the letters stated, would commence an investigation of this complaint, and simultaneously encourage all parties involved to conciliate the matter. If conciliation failed and HUD's investigation produced evidence to substantiate a finding that there is reasonable cause to believe that you have engaged in an unlawful discriminatory housing practice, HUD would issue a charge against them, at which point they would be exposed to certain penalties -including damages as great as $100,000 -and could elect to have their case heard by an administrative law judge or referred for trial in U.S. District Court. 5 The plaintiffs filed answers to the complaint on November 12. 16 Defendant Smith assigned the complaint to defendant Lee to investigate and defendant Zurowski to conciliate. On December 17, 1993, Lawless sent Zurowski a Proposal for Conciliation containing the following settlement terms: 17 1) That the above named respondents [White, Deringer, and Graham], and the Neighborhood Groups Opposing the Bel Air Conversion, cease all litigation against Resources for Community Development and the City of Berkeley regarding the development of the Bel Air Motel; and 18 2) That the above named respondents, and the Neighborhood Groups Opposing the Bel Air Conversion, cease publication of discriminatory statements (including articles in the CNA Newsletter) and fliers about the potential residents of the Bel Air project. 19 Zurowski relayed these proposed terms to the plaintiffs. According to a declaration by the attorney then representing the plaintiffs, David Bryden, Zurowski told him that the proposed settlement was a good one because my clients had, in fact, engaged in discriminatory actions in violation of the Fair Housing Act -I recall him telling me that HUD had evidence of a flyer which demonstrated such a violation -and that I should be relieved that my clients would not also have to pay damages to the complainant. 6 20 On January 12, 1994, Lee drafted and Smith reviewed and signed, on behalf of the San Francisco Office's compliance director, a letter to the three plaintiffs. It stated that the San Francisco Office was investigating HRI's complaint and that it was HUD policy to secure the voluntary cooperation of all persons in the collection of information during the investigation. The letter continued: 21 When access to premises, records, documents, individuals and other possible sources of information and evidence which may be necessary for the furtherance of the investigation is not provided, the Department may issue subpoenas to compel such access, production or testimony. Any person who willfully fails or neglects to attend and testify or to answer any lawful inquiry or to produce records, documents or other evidence in obedience to a subpoena shall be fined not more than $100,000 or imprisoned not more than one year, or both. 22 Attached to the letter was an Attachment of Request to Produce Written Responses listing ten items. This request was extremely broad. It directed the plaintiffs to submit, inter alia, the name and contact information of any person who was involved in or witnessed the act(s) alleged on the complaint form; a copy of any documents or the contents of any file in your control concerning the Bel Air Motel conversion; all correspondence with or minutes or reports generated by the Council of Neighborhoods Association regarding the Bel Air project; and all literature, posters, newsletters, and flyers about the project. On January 18, the plaintiffs, through their attorney, stated that they did not have some of the documents sought and that they refused to provide the others. HUD did not take any further action to obtain these documents from the plaintiffs. 23 On February 1, Smith told the plaintiffs' attorney Bryden that HUD would issue a subpoena to compel the plaintiffs' testimony if they refused to be interviewed by Lee. Bryden agreed that Lee could interview the plaintiffs by telephone. The interview took place on February 7 and lasted for about one hour. Lee asked the plaintiffs why they were opposed to the Bel Air project and what statements they had made about the project to the public. Lee later testified in a deposition that Smith had directed him to ask the plaintiffs these questions, which Lee had considered irregular and beyond the scope of a routine FHA investigation. 24 On February 8, pursuant to Lee's request, Bryden sent Lee a memorandum from the Berkeley City Manager stating that Zoning Adjustment Board member Linda Maio had a conflict of interest on the RCD matter. Sometime during the investigation, Smith also became aware that there was reason to believe that Maio had a conflict of interest. 25 The Fair Housing Act requires HUD to provide a written statement of reasons in the event that it is impracticable to complete an investigation within 100 days. See 42 U.S.C. 3610(a)(1)(B)(iv), 3610(a)(1)(C). On February 10, Bryden called Lee to inquire about the status of the investigation. On February 15, the Director of HUD's Office of Investigations in Washington, D.C. informed HRI and the plaintiffs by letter that although the processing of the administrative complaint was not yet complete, HUD was expediting this matter. However, the San Francisco Office's final investigative report shows that the investigators' first contact with a witness other than the plaintiffs was on May 17, 1994, an interview with the executive director of RCD. All other contacts with witnesses took place in mid-June 1994. 26 On June 24, Bryden wrote a letter asserting that HUD's investigation was an effort to chill the plaintiffs' constitutional rights. He asked that the investigation be terminated. Smith drafted a letter in response, which defendant Gillespie signed on July 14. This letter stated that numerous court opinions had established HUD's jurisdiction over the case: 27 The Department has jurisdiction over all claims under the federal Fair Housing Act concerning land use and zoning. This jurisdiction has been recognized uniformly to extend to allegations that individuals have engaged in speech advocating illegal acts, including discrimination against persons based on their physical or mental disabilities. 28 The Complainant in the above case alleged that your clients advocated the denial by the City of Berkeley of a use permit to a nonprofit housing developer for the conversion of the Bel Air Motel to a homeless shelter because, among other reasons, the residents of the project would be mentally disabled. Evidence was produced during the investigation that your clients wrote news articles which referenced the mental disability of the intended residents of the proposed project as a reason for denial of the project. 29 The letter further stated that HRI had suffered an injury sufficient to establish its standing to pursue relief under the Fair Housing Act because its director, Lawless, devoted time and resources to advocating on behalf of the developer of the Bel Air project, in opposition to your clients. 30 Lee submitted a draft of the final investigative report to Smith on June 17, 1994. After further revisions by Smith and review by Gillespie, the San Francisco Office adopted the report and, on July 11, sent it and the entire case file to HUD headquarters in Washington. The report concluded that the plaintiffs had violated the Fair Housing Act and that there was reasonable cause to take further enforcement action against them. On July 22, 1994, the San Francisco Examiner reported that defendant Phillips had said that HUD's preliminary investigation had concluded the three residents[White, Deringer, and Graham] had broken the law, but that it would be up to HUD and Justice Department attorneys to decide whether to prosecute.