Court Opinion

ID: 3000191
Source: CourtListenerOpinion
Date Created: 2015-09-24 20:02:11.259874+00
Date Added: 2024-06-11T13:39:41.795593
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                      ____________

No. 05-1252
SHEILA WHITE,
                                                 Petitioner,
                             v.

UNITED STATES DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT,
                                               Respondent.
                      ____________
             Petition for Review of an Order of the
         Department of Housing & Urban Development.
                        No. 05-99-0045-8
                      ____________
  ARGUED JANUARY 5, 2006—DECIDED FEBRUARY 2, 2007
                    ____________

 Before FLAUM, ROVNER, and WILLIAMS, Circuit Judges.
  WILLIAMS, Circuit Judge. Sheila White filed a com-
plaint with the United States Department of Housing and
Urban Development (“HUD”), claiming that property
owner Gertie Wooten violated the Fair Housing Act
(“FHA”), 42 U.S.C. § 3604(c). At issue is whether Wooten’s
comments to White indicated a preference against renting
to White on the basis of “familial status,” which under
the FHA means at least one minor child living with a
parent or guardian. After holding a hearing at which
Wooten did not appear, the administrative law judge
(“ALJ”) concluded that White failed to prove Wooten’s
statements indicated a preference against renting on the
2                                                   No. 05-1252

basis of White’s familial status. The ALJ also refused to
allow White to amend her complaint after the close of the
evidentiary hearing to include new allegations that, White
contends, first came to light at the hearing. We agree
with the ALJ’s decision to deny White’s motion to amend
her complaint. However, we disagree that White failed
to prove that Wooten discriminated against her on the
basis of her familial status. We therefore reverse the
ALJ’s decision as to White’s § 3604(c) claim.

                     I. BACKGROUND
  White filed an administrative complaint with the
Secretary of HUD, alleging that Wooten violated 42 U.S.C.
§ 3604(c)1 by engaging in discriminatory conduct when
she told White that she would not rent an apartment to
her because she was not married and had two children.
The Secretary of HUD issued a Determination of Reason-
able Cause and Charge of Discrimination in April 2001,
alleging that Wooten discriminated against White because
of her familial status. Shortly thereafter, the ALJ granted
White’s motion to intervene on her own behalf. In July
2003, after prolonged discovery, White filed a motion she
entitled a “motion for summary judgment.” The ALJ
subsequently scheduled a hearing for February 4, 2004.
  Despite being duly notified about the hearing, neither
Wooten nor anyone on her behalf appeared. The ALJ,
acting on HUD’s request, found Wooten in default, and

1
   White’s original administrative complaint alleged that Wooten
violated 42 U.S.C. § 3604(a) as well. Section 3604(a) makes it
illegal to “refuse to sell or rent after the making of a bona fide
offer, or to refuse to negotiate for the sale or rental of, or
otherwise make unavailable or deny, a dwelling to any person
because of . . . familial status.” White eventually withdrew
her § 3604(a) claim; therefore, the ALJ addressed only White’s
§ 3604(c) claim.
No. 05-1252                                              3

directed White to present a prima facie case that Wooten
had violated 42 U.S.C. § 3604(c). Three witnesses testified
at the hearing: White; White’s grandfather, Robert Hous-
ton; and a family friend, Marsha Johnson.
  White testified that, in 1998, she was living with Hous-
ton and looking for an apartment for herself and her two
children (then ages five and nine) when she saw a news-
paper advertisement for a two bedroom apartment for
rent in Harvey, Illinois. On August 21, White called the
telephone number listed in the notice to inquire about the
apartment. White claimed that she spoke to an elderly
woman with “broken” speech who stated that she would
not rent to White because White had children and was not
married. White also stated that after the conversation
ended she wrote down detailed notes recounting the
conversation. The notes read:
   Me    I was calling about the apartment in Harvey.
   Her How many in your family?
   Me    3. 1 adult & 2 small children
   her   Are you married?
     .......
   Me    No
   her   Well she can’t rent to you because you have
         two children and no husband and this girl
         has to pay her mortgage.
   Me    What do that have to do with me. That’s a
         form of discrimination.
   her   I don’t know you. I would have to see you,
         met you—that’s not discrimination this girl
         has to pay her mortgage and you don’t have
         a husband and you have children.
   Me    but you don’t know me how can you judge me
         by a phone call?
4                                              No. 05-1252

    her   You are not married this . . . . .
    Me    thank you very much, but I’m not interested.
          I hung up.
  On September 17, White noticed another newspaper
advertisement for the same apartment that listed the
same telephone number. She called to inquire about the
apartment, but unlike before, White stated that she was
married rather than single. According to White, she spoke
with the same “elderly lady with broken English” with
whom she spoke in the first telephone conversation. This
time the woman identified herself as Gertie Wooten. White
also stated that, as with the previous phone call, she
wrote down detailed notes that recounted her conversa-
tion with Wooten. Those notes state:
    Me. I called about the apartment
    her   how many in your family
    me    3         .......
    her   3 what are you married?
    M     Yes
    her   how many kids?
    Me    1
    her   do your husband work
                    .......
    Me    Yes with CTA
    her   Do you work?
    Me    Yes with Blue Cross
    her   Well the apartment has a large dining room
          kit two bedrooms. Its on the 1st floor.
                    .......
    me    how is the neighbor
No. 05-1252                                                 5

    her   wait A—minute let me finish
    her   The house has double locks on the gate front
          and back it’s a very nice house. The area is
          what you make it. You are going to have bad
          people everywhere you go. If you are
                    .......
          thinking out selling drugs or using drugs
          don’t come here. If you have more people in
          the apartment than whats on the lease you
          will be escorted by the police. If you think
          out selling drugs or using drugs this place is
          not for you. My grandson stay with me and
          he has not brought anybody here. I have 5
          daughter and two sons died. One died of
          cancer the other dropped dead. I have one
          daughter in California One just steped down
          from a supervisory in the lab at Cook County
          Hospital. But you can come by at 12:00 Sat.
                    .......
    Me    Whats your name.
    her   Gertie Wooten
                    .......
   White stated that after this second telephone conver-
sation she filed a complaint with HUD; that complaint
forms the basis of this case. In November 1998, White also
filed a complaint with the Cook County Commission on
Human Rights, alleging that she was denied the opportu-
nity to rent an apartment on the basis of her “marital
status” and “parental status.”2

2
  White testified that, although the Cook County Commission
entered a default judgment against Wooten for failing to ap-
                                                (continued...)
6                                              No. 05-1252

  White’s grandfather, Houston, testified that he received
a telephone call from an unidentified woman asking to
speak to White shortly after White filed her Cook County
complaint. When Houston replied that White was not
home, the caller began asking a number of questions
about White because she had called about renting an
apartment. The following day, the same unidentified
woman called Houston again asking for White. When
Houston again replied that White was not home, the
caller began shouting and swearing. Houston unsuccess-
fully attempted to calm the caller, and then hung up the
phone; he informed White of the telephone calls when she
returned home.
  Family friend Marsha Johnson’s testimony corroborated
Houston’s version of events surrounding the telephone
calls. She stated that she was with Houston when he
received the two calls. She added, however, that she saw
the name “Wooten, G” displayed on the caller ID box after
each call. She also stated that she was present when
Houston informed White of the telephone calls.
  Before the hearing concluded, White orally requested to
amend the pleadings to include a harassment charge
under 42 U.S.C. § 3617, based on Houston’s and Johnson’s
testimony that Wooten twice telephoned Houston in
response to White’s housing discrimination claims. White
acknowledged that it was unlikely that Wooten was even
aware of the HUD complaint at the time of the harassing
telephone calls because it had not yet been processed
for “jurisdictional reasons.” White did state, however, that
she believed it was very likely that Wooten obtained

2
  (...continued)
pear or respond to the charge, the Commission nevertheless
dismissed the charge because White did not appear for the
required evidentiary hearing.
No. 05-1252                                               7

Houston’s telephone number from the Cook County com-
plaint that was served on her. To supplement her re-
quest, White filed a “Motion to Amend Complainant-
Intervenor’s Complaint to Conform To The Proof Adduced
at Trial” (“Motion to Amend”), alleging that Wooten
violated § 3617.
   On December 3, 2004, in a written decision, the ALJ
concluded White failed to show by a preponderance of
evidence that Wooten violated § 3604(c). The ALJ first
determined that White did not prove that she even spoke
with Wooten during the first telephone call, citing the fact
that the speaker consistently spoke in the third person,
such as when she stated, “[T]his girl has to pay her
mortgage and you don’t have a husband and you have
children.” And, the ALJ continued, even if White could
prove that she spoke with Wooten, she did not prove that
the telephone call violated § 3604(c) because an “ordinary
listener” would not have believed that the speaker dis-
criminated against her because of familial status; rather,
the speaker indicated a concern with financial matters.
  The ALJ also denied White’s Motion to Amend to add the
harassment claim under 42 U.S.C. § 3617. He stated that
amending the complaint would be prejudicial to Wooten
because she was not given notice of the new allegation. The
ALJ further noted that White knew or should have known
about the allegedly harassing telephone calls that Houston
received since the beginning of the litigation and, there-
fore, she should have amended her complaint earlier. The
ALJ also denied the motion for substantive reasons,
concluding that there was nothing improper about the first
telephone call because the caller asked only for informa-
tion, and that the second telephone call did not violate
§ 3617 because: (1) the conduct was not sufficiently “egre-
gious” to constitute intimidation, threats, or interference
within the meaning of the FHA; (2) Houston was an
“uninvolved third party” who did not exercise, aid, or
8                                               No. 05-1252

encourage White in filing her discrimination claim; and (3)
there was no evidence that the telephone calls were made
“with a discriminatory motive or purpose.”
  The HUD Secretary did not modify or reverse the ALJ’s
decision, and it became a Final Agency Order on January
3, 2005. See 42 U.S.C. § 3612(h)(1).

                      II. ANALYSIS
  White filed this petition for review, challenging the ALJ’s
decision on two grounds. First, White claims that the ALJ
erred by finding that Wooten did not discriminate against
her because of her familial status, as proscribed by 42
U.S.C. § 3604(c). White also claims that the ALJ erred by
denying her motion to amend her pleadings to include a
claim of harassment under 42 U.S.C. § 3617.

    A. White Established Her Claim for Discrimination
       Based on Familial Status.
  White argues that the ALJ’s finding that Wooten did not
violate 42 U.S.C. § 3604(c) was erroneous because (1)
there was sufficient evidence that the first telephone call
could be attributed to Wooten; and (2) Wooten’s state-
ments evince discrimination based on White’s familial
status. We deferentially review the Secretary’s final
determination as to § 3604(c) claims, and we will reverse
only if the determination is legally or procedurally un-
sound, or is “unsupported by substantial evidence.” See 5
U.S.C. §§ 706(2)(A), (D)-(E); Jancik v. Dep’t of Hous. &
Urban Dev., 44 F.3d 553, 555 (7th Cir. 1995). “Substantial
evidence” is “such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion.”
See Jancik, 44 F.3d at 555-56.
No. 05-1252                                                9

   Section 3604(c) makes it illegal to “make, print, or
publish, or cause to be made, printed, or published any
notice, statement, or advertisement, with respect to the
sale or rental of a dwelling that indicates any preference,
limitation, or discrimination based on race, color, religion,
sex, handicap, familial status, or national origin, or an
intention to make any such preference, limitation, or
discrimination.” 42 U.S.C. § 3604(c); see City of Edmonds
v. Oxford House, Inc., 514 U.S. 725, 728 n.1 (1995) (noting
that in 1988, Congress extended the FHA to proscribe
“ ‘familial status’ discrimination, i.e., discrimination
against parents or other custodial persons domiciled with
children under the age of 18”). As a result, White needed
to present evidence that: (1) Wooten made a statement;
(2) the statement was made with respect to the sale or
rental of a dwelling; and (3) the statement indicated a
preference, limitation, or discrimination against her on
the basis of her status as a parent living with minor
children. See 42 U.S.C. § 3604(c). The parties do not
dispute that the statements were made in connection
with the sale or rental of a dwelling. See 24 C.F.R.
§ 100.75(b) (2006) (prohibitions in § 3604(c) extend to
oral statements by person engaged in sale or rental of
dwelling).
  At issue first is whether Wooten was the person to whom
White spoke during the August 21 telephone call. The
respondent argues that we should adopt the ALJ’s finding
that the statements in the call could not be attributed to
Wooten. In support of his finding, the ALJ had reasoned
that the speaker in the August 21 call made reference to
another person who needed to pay the mortgage, and,
therefore, the speaker could not have been Wooten herself.
  We, however, conclude that the uncontested evidence
presented by White at the hearing demonstrates that she
spoke with Wooten on August 21. White testified that
she called the same telephone number on both August 21
10                                             No. 05-1252

and September 17. She stated that the woman with whom
she spoke during the first telephone conversation was an
“elderly woman” who spoke “broken English.” After she
dialed the same telephone number on September 17, White
recognized the woman who answered the phone as the
same person with whom she had spoken nearly a month
earlier. This same person identified herself as Wooten
later in the call. As Wooten did not appear at the hearing,
White’s testimony that she spoke with the same person
on both occasions was unrefuted. There is no evidence in
the record, for example, that Wooten lived with another
person at that time who might have spoken to White.
Moreover, when White’s counsel expressed her intent to
call a government investigator at the hearing to testify
that Wooten admitted making the statements in the
telephone calls, the ALJ asked whether “the only cloud
that the investigator would have dissipated is who made
the two statements on the phone to Sheila White.” After
receiving an affirmative answer, the ALJ responded, “she
admitted to them so we’ll not have that dep.” HUD’s
attorney at the hearing then stated, “Gertie [Wooten]
admitted, yes, being the voice on the other end of the
phone line when Sheila called her.”
  Moreover, the testimony to which the ALJ pointed does
not contradict White’s uncontested testimony that she
spoke with the same person during both telephone calls.
The ALJ reasoned that because the speaker in the first
call made several references to another person who needed
to pay the mortgage, the speaker could not have been
Wooten. Although it is true that White’s notes reflect that
Wooten stated, “this girl has to pay her mortgage,” the
words “this girl” and “her” in the speaker’s statement
may have represented nothing more than colloquial
references to the speaker herself, not references to another
person. Or the speaker may not have wished to identify
herself as the property owner until she had spoken with
No. 05-1252                                              11

the caller further. Most importantly, however, White’s
evidence that she spoke with the same person in both calls
was not disputed. Therefore, we conclude that the uncon-
tested evidence demonstrates that Wooten made the
statements in the August 21 telephone call.
  We therefore turn to the final requirement in White’s
§ 3604(c) claim, that the statements indicate any “prefer-
ence, limitation, or discrimination” based on White’s
familial status. The FHA defines “familial status” as “one
or more individuals (who have not attained the age of
18 years) being domiciled with” a parent or someone
with an equivalent custodial relationship. 42 U.S.C.
§ 3602(k)(1); see also 24 C.F.R. § 100.20 (2006). It is
undisputed that at all times relevant to this matter, White
had two children under the age of eighteen years who
resided with her. Thus, the FHA protects White and her
children because of their “familial status.”
   Actions prohibited under § 3604(c) include using words
or phrases which convey that dwellings are not avail-
able to a particular group of persons because of familial
status and expressing to prospective renters or any other
persons a preference or a limitation on any renter because
of familial status. 24 C.F.R. § 100.75(c)(1)-(2) (2006). To
determine whether a statement indicates impermissible
discrimination on the basis of familial status, an “ordinary
listener” standard is used. See Jancik, 44 F.3d at 556;
see also Ragin v. New York Times Co., 923 F.2d 995, 999
(2d Cir. 1991) (applying “ordinary reader” standard to
analysis of advertisement under § 3604(c)). The inquiry
under this objective standard is whether the alleged
statement would suggest to an “ordinary listener” that a
person with a particular familial status is preferred or
disfavored for the housing in question. See Jancik, 44 F.3d
at 556. The ordinary listener “is neither the most suspi-
cious nor the most insensitive of our citizenry.” Id. at
556 n.4 (citing Ragin, 923 F.2d at 1002).
12                                             No. 05-1252

  White argues that Wooten’s statements in the August 21
conversation indicate that Wooten disfavored White’s
familial status for the apartment in question. We agree.
The ALJ disregarded Wooten’s statements about White’s
family and concluded that Wooten “was clearly more
concerned with financial matters than the make-up of
[White’s] family” because she expressed her need to “pay
her mortgage.” See Soules v. Dep’t of Hous. & Urban Dev.,
967 F.2d 817, 821 (2d. Cir. 1992) (stating that the FHA
was “not intended to ‘prevent a landlord from determining
that a family is otherwise qualified before agreeing to rent
to them’ ”) (quoting 134 Cong. Rec. H4681 (daily ed. June
23, 1988) (remarks by Representative Synar)).
  Wooten’s statements in the August 21 conversation,
however, do not support the ALJ’s conclusion that
Wooten’s only concern was White’s ability to pay the rent.
Immediately after learning that White was an unmarried
mother of two small children, Wooten told White she
would not rent to her. In fact, that White was an unmar-
ried mother of two small children was all that Wooten
knew about White at that point. Wooten had not asked
White a single question about her finances (nor did she
at any point in the conversation). She possessed no
information whatsoever about White’s income, credit
history, assets, or liabilities. For all Wooten knew, White
could have been a multimillionaire. Under these circum-
stances, substantial evidence does not support the ALJ’s
conclusion that Wooten refused to rent to White on August
21 because Wooten was concerned with White’s ability
to pay the rent. Rather, Wooten’s statements would
indicate to an ordinary listener that Wooten disfavored
White on the basis of her familial status. As Wooten
refused to rent the apartment armed only with the knowl-
edge that White was a single mother of two small children,
an ordinary listener would find Wooten assessed White’s
No. 05-1252                                               13

ability to pay her rent based on her familial status, not on
her financial situation.
   The respondent also argues that the statements in-
dicate a preference based only on White’s marital status,
not one based on her familial status. The respondent is
correct that the FHA does not include marital status
among its protected classifications. See 42 U.S.C.
§§ 3604(a)-(f ), 3605(a), 3606 (omitting “marital status”
from categories of protected classes under the FHA);
Soules, 967 F.2d at 821 (“Congress’ primary concern [in
passing the FHA] was to eliminate direct discrimination
against families with children.”) (emphasis added); Doe v.
Butler, 892 F.2d 315, 326 (3d Cir. 1989) (Roth, J., dissent-
ing) (quoting the legislative history of the FHA’s definition
of “familial status” to show that Congress did “not in-
tend this definition to include marital status”). Compare 42
U.S.C. § 3602(k)(1) (omitting any mention of marriage
from the statutory definition of “familial status”) with
Chicago, Illinois Ordinance § 5-8-030(c) (1998) (making
it illegal for landlord to refuse to rent “within the city of
Chicago because of the . . . marital status . . . of the
proposed buyer or renter”).
  In support of its argument, the respondent points to the
parties’ September telephone conversation. During that
discussion, Wooten agreed to show the apartment think-
ing White was married, to an employed husband, and
had one child. These statements, however, do not change
our conclusion that Wooten’s comments in the August
conversation indicate discrimination on the basis of
White’s familial status. In the August telephone call,
Wooten stated repeatedly that she would not rent to White
because she had children but not a husband. Wooten’s
statements suggest that she would have been willing to
rent to a single woman; because White stated she had
children, however, Wooten told White she would not rent
to her. The August conversation thus indicates that
14                                             No. 05-1252

White’s representation that she had children, not that
she was unmarried, constituted the reason for Wooten’s
refusal to rent to her.
   We conclude that White has demonstrated that Wooten’s
statements indicate disfavor for her familial status
because her statements would allow an “ordinary listener”
to infer she had a preference against White due to her
familial status. See Jancik, 44 F.3d at 556 (finding defen-
dant’s statements that he “did not want any families with
children . . . quite clearly would suggest to an ‘ordinary’
listener that [defendant] had a preference or limitation
based on family status”); Kormoczy v. U.S. Dep’t of Hous.
& Urban Dev., 53 F.3d 821, 824-25 (7th Cir. 1995) (de-
termining that landlord’s explanation “that elderly
people lived in the building and kids were not wanted
in the building” constituted evidence of discrimination
based on familial status). Accordingly, substantial evidence
does not support the ALJ’s conclusion that White failed
to establish a violation of §3604(c), and we reverse the
decision against her on this claim.

  B. White Was Not Entitled to Amend Her Complaint to
     Add a Claim Under 42 U.S.C. § 3617.
  White next argues that the ALJ erred when he denied
her motion to amend her complaint to conform to evidence
presented at the evidentiary hearing. That evidence, White
claims, demonstrated that her grandfather, Houston, was
subjected to Wooten’s “campaign of harassment” in re-
sponse to White’s filing of FHA claims. We review an ALJ’s
denial of a motion to amend a discrimination charge for
abuse of discretion, Looper Maintenance Service, Inc. v.
City of Indianapolis, 197 F.3d 908, 914 (7th Cir. 1999), and
we find no error.
  The FHA makes it unlawful to intimidate or threaten
any person who exercises or enjoys any right granted or
No. 05-1252                                                15

protected by the FHA. 42 U.S.C. § 3617; 24 C.F.R.
§ 100.400(c)(4). To state a § 3617 claim, White must show,
among other things, that Wooten “coerced, threatened,
intimidated, or interfered with [her] on account of [her]
protected activity under the FHA[ ].” East-Miller v. Lake
County Highway Dep’t, 421 F.3d 558, 563 (7th Cir. 2005).
  The ALJ denied White’s request to amend her complaint
to add a claim under § 3617. The federal regulations set
forth the circumstances under which a party may amend
pleadings in an administrative proceeding under the FHA.
As relevant here, the regulations provide:
   (b) By leave. Upon such conditions as are neces-
   sary to avoid prejudicing the public interest and
   the rights of the parties, the ALJ may allow
   amendments to pleadings upon a motion of the
   parties.
   (c) Conformance to the evidence. When issues not
   raised by the pleadings are reasonably within the
   scope of the original charge or notice of proposed
   adverse action and have been tried by the express
   or implied consent of the parties, the issues shall
   be treated in all respects as if they had been raised
   in the pleadings, and amendment may be made
   as necessary to make the pleadings conform to the
   evidence.
24 C.F.R. § 180.425(c) (2006).
  White first argues that the word “shall” in 24 C.F.R.
§ 180.425(c) means that any issue presented at the hearing
must be treated as if raised in the pleadings. But the
regulation does not go this far. Instead, it provides that
issues are to be treated as if raised in the pleadings
only when, among other things, the issue not initially
raised is “reasonably within the scope of the original
charge” or notice of proposed adverse action. Here, how-
16                                            No. 05-1252

ever, the conduct giving rise to White’s § 3617 claim was
not within the original charge’s scope. Whether to grant
White’s motion to amend her pleadings was thus discre-
tionary.
  Although White was well aware of the calls received by
her grandfather at the time she filed her charge, she did
not seek to add the new claim until the case was virtually
complete. At the hearing, White acknowledged that she
learned of the calls in November 1998, at the time they
occurred. Yet it was not until 2004 that White sought to
add the new charge. Although Wooten was herself respon-
sible for multiple delays in this matter, we cannot find an
abuse of discretion in the ALJ’s conclusion that White
“should have acted long ago” to seek to add a new claim.
And on this basis, we affirm the ALJ’s decision to deny
White’s motion to amend her complaint.

                  III. CONCLUSION
 Accordingly, we AFFIRM the ALJ’s denial of White’s
motion to amend her complaint. However, we REVERSE the
ALJ’s decision as to White’s § 3604(c) claim.

A true Copy:
      Teste:

                       ________________________________
                       Clerk of the United States Court of
                         Appeals for the Seventh Circuit

                   USCA-02-C-0072—2-2-07