2022 Ohio 3442
Ohio Ct. App.2022Background
- The U.S. Department of Justice and the Office of Fair Housing and Opportunity sued Epcon for alleged Fair Housing Act (FHA) violations at multiple Ohio communities; three implicated communities were developed by Wilcox under contracts with Epcon.
- Epcon and the DOJ negotiated a consent decree in the Southern District of Ohio: Epcon agreed to pay over $2.5 million (about $2.2 million for an accessibility retrofit fund) and received a federal release of FHA claims against Epcon and its affiliates.
- Epcon then filed a state-court action seeking contribution from Wilcox under Ohio Rev. Code § 2307.25 for amounts it paid under the federal consent decree.
- Wilcox moved to dismiss under Civ.R. 12(B)(6), arguing the FHA preempts state-law contribution claims; the trial court granted the motion and dismissed Epcon’s complaint.
- Epcon appealed, contending the trial court erred by holding the FHA preempted its state-law contribution claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the FHA preempts state-law contribution claims (including R.C. 2307.25) that would allow an FHA violator to shift liability to a third party | Epcon: State statutory right of contribution remains available; FHA does not preclude state-law contribution claims | Wilcox: Allowing state contribution would conflict with the FHA's remedial scheme and permit an end-run around federal enforcement and remedies | Court: FHA preempts state-law contribution claims via conflict/obstacle preemption; Epcon's contribution claim is barred |
Key Cases Cited
- English v. Gen. Elec. Co., 496 U.S. 72 (establishes obstacle/conflict preemption framework)
- Hines v. Davidowitz, 312 U.S. 52 (same; describes obstacle preemption concept)
- Crosby v. Natl. Foreign Trade Council, 530 U.S. 363 (instructs courts to examine federal statute's purpose to determine preemption)
- Medtronic, Inc. v. Lohr, 518 U.S. 470 (presumption against preemption; examine statutory framework and purposes)
- Arizona v. United States, 567 U.S. 387 (federalism considerations in preemption analysis)
- Equal Rights Ctr. v. Niles Bolton Assocs., 602 F.3d 597 (4th Cir.) (state indemnity/contribution claims may be inconsistent with FHA remedial scheme)
- S & R Dev. Estates, LLC v. Town of Greenburgh, 336 F. Supp. 3d 300 (S.D.N.Y. 2018) (disallowing state-law contribution-style recovery that compensates an FHA violator)
- Picard v. JPMorgan Chase & Co. (In re Bernard L. Madoff Inv. Sec. LLC), 721 F.3d 54 (2d Cir.) (federal remedial schemes may preclude state-law contribution for federal fines/penalties)