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In Kelly v. HUD, the Sixth Circuit addressed alleged violations of the Fair Housing Act based on family status discrimination. The court held that HUD's procedural delays and failure to provide a reasonable conciliation deprived the defendants of due process.
Staples, a mother of five-year-old twins, sought occupancy in an apartment complex owned by the Kellys. During a phone call regarding a two-bedroom unit, Staples stated that she had two children, and the person responded that the owner allowed only one child per unit. Staples called HOME, a local fair housing group, which sent testers to investigate. Lester, a HOME tester, met with Mr. Kelly to discuss renting a unit. When Lester told him she had two children, Kelly folded his arms and his eyes went toward the ceiling. Another tester, Jones, was asked if she was married and whether she had children. Jones was told that the owner allowed only one child in the unit. Based on these events, Staples filed a complaint with HUD, in May 1990. HUD completed its investigation in October 1990, but did not issue a Charge of Discrimination until March 1992. An ALJ held that the Kellys violated the Fair Housing Act, issued an injunction regarding future discrimination, and awarded Staples damages.
On appeal, the Kellys urged that HUD's delays caused them prejudice and denied them due process. They alleged that HUD exceeded time limits for: (1) giving notice of a complaint; (2) completing its investigation; and (3) making a determination regarding reasonable cause to believe discrimination occurred. The Kellys claimed that HUD failed to provide a reasonably objective investigation or conciliation because the HUD agent exhibited bias during the investigation and conciliation. HUD argued that any procedural errors it committed did not cause the Kellys substantial prejudice.
The Sixth Circuit first addressed the HUD agent's dual role in the case. It found that in view of his procrastination in processing the complaint, and his apparent antagonism toward the Kellys, he should not have acted as the conciliator. The court stated "with him in that role, HUD did not make an objectively reasonable effort to bring about a settlement."
Regarding the delays and procedural errors, the Sixth Circuit found that the delays did not appear to have prejudiced the Kellys' ability to defend against the charge of a violation. However, the delays did increase Staples' claim for damages. The court found that the primary feature of fair housing enforcement was the resolution of complaints in the early stages of the process. The court also found that while the principal purpose of the Fair Housing Act was to vindicate the rights of those who suffer discrimination in housing, those against whom the complaints are made are entitled to fair treatment. The court added that it believed the parties should be given the opportunity to resolve the matter by means of a fair and reasonable conciliation effort. The court concluded that the prior conciliation meeting was neither fair nor reasonable, and remanded the case to HUD for conciliation with a qualified, objective conciliator. The court also vacated Staples' damage award. Finally, the court stated that if conciliation efforts failed, the case should be returned to the ALJ, but in no case should damages be assessed for the period during which HUD completely neglected the case.
Kelly v. HUD, 3 F.3d 951 (6th Cir. 1993), aff’d in part, rev’d in part 97 F.3d 118 (6th Cir. 1996).