Fair Housing Rights Center v. Post Goldtex GP, LLC
823 F.3d 209
3rd Cir.2016Background
- FHRC (a fair housing nonprofit with HUD grants) sued Post Goldtex and KlingStubbins after converting a 1912 former factory (the Goldtex Building) into 163 residential units beginning in 2013, alleging violations of the FHA’s design-and-construction accessibility requirements (42 U.S.C. § 3604(f)(3)(C)).
- FHRC’s site inspection identified numerous accessibility defects (e.g., heavy entrance doors without automatic openers, interior doors and passageways undersized, high counters).
- Defendants moved to dismiss, arguing the building is exempt because it was originally constructed and first occupied long before the FHA requirement effective date (March 13, 1991); HUD guidance likewise treats conversions of existing nonresidential buildings as not subject to the accessibility rules.
- The District Court applied Chevron deference, found the statute ambiguous as to whether converted buildings are covered, and deferred to HUD’s interpretation exempting conversions, dismissing the complaint for failure to state a claim.
- The Third Circuit affirmed, holding the statutory language ambiguous on “first occupancy”/“construction,” and that HUD’s long-standing interpretation and implementing regulation (defining “first occupancy” as a building never before used for any purpose) is a permissible construction entitled to deference.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FHA §3604(f)(3)(C) applies to a commercial building converted to residences after the effective date | FHRC: statute covers any dwellings first occupied as residences after the effective date, regardless of original building construction date | Defendants: statute applies only to buildings first constructed/occupied as dwellings after the date; conversions of older buildings are exempt | Court: statute ambiguous; HUD interpretation exempting conversions is reasonable — defendants prevail |
| Whether Chevron deference applies to HUD’s interpretation | FHRC: statutory text is unambiguous so Chevron does not apply | Defendants: statute ambiguous; HUD guidance is entitled to deference | Court: applied Chevron; at Step One found ambiguity; at Step Two deferred to HUD as reasonable |
| Proper definition of “first occupancy”/“construction” under the FHA | FHRC: should include first residential occupancy after effective date | Defendants: HUD defines “first occupancy” as a building never before used for any purpose, excluding conversions | Court: adopted HUD’s definition (24 C.F.R. §100.201; HUD/DOJ joint statement) |
| Standing of FHRC to sue | FHRC: alleged organizational injury from diverted resources enforcing its mission | KlingStubbins: FHRC lacks injury and thus standing | Court: FHRC has organizational standing (Havens Realty precedent); standing upheld |
Key Cases Cited
- Chevron U.S.A. v. Natural Res. Def. Council, 467 U.S. 837 (1984) (two-step framework for judicial review of agency statutory interpretations)
- Barnhart v. Walton, 535 U.S. 212 (2002) (agency interpretation entitled to deference if reasonable)
- Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982) (fair housing organizations have standing when discriminatory practices frustrate their mission)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (legal conclusions not entitled to factual pleading assumptions)
- Mammaro v. New Jersey Div. of Child Protection and Permanency, 814 F.3d 164 (3d Cir. 2016) (standard for accepting complaint allegations on motion to dismiss)