Before proceeding with today’s blog entry, I want to wish everyone celebrating a happy new year. I realize that my blog entry is late this week, but I have a good reason for it. We got back from parents weekend last Sunday, then had to deal with Helene damage, which fortunately was not anything that couldn’t be handled, and then we had the Jewish new year.
The blog entry of the week continues our theme from last week, which is nondelegable duties of Title II entities and how they may face direct liability for that delegation or for ignoring their obligations. The case of the week is Access Living of Metropolitan Chicago, Inc. v. City of Chicago, here, a summary judgment denial decided by the United States District Court for the Northern District of Illinois on September 30, 2024. As usual, the blog entry is divided into categories and they are: facts; court’s reasoning denying summary judgment on the ADA and §504 claims; court’s reasoning denying summary judgment on the FHA claim; court’s reasoning finding a continuing violation for statute of limitation purposes; court’s reasoning that Access Living has a private right of action to sue the City under each of the federal accessibility laws; court’s disposition; and thoughts/takeaways. Of course, the reader is free to focus on any or all of the categories.
I
Facts
The City of Chicago receives $100 million annually from the US Department of Housing and Urban Development for the purpose of building, preserving, and rehabilitating affordable housing properties. The City of Chicago doesn’t do that rather it is done by developers and nonprofits. The City’s development contracts with developers gives developers funds or tax credits and in return, the developer is obligated to comply with federal and state laws, including §504 and Title II of the ADA. Developers must also document compliance with accessibility requirements and the contract sets out remedies for noncompliance. Once the building is completed, the Chicago Housing Department must inform HUD and the public that the building was inspected and incorporated federal accessibility requirements. The City of Chicago also plays a considerable role in the design and construction of affordable housing developments. For example, developers have to apply for a building permit issued by the City’s Department of Buildings. During the permit process, the City’s Mayor’s Office for People with Disabilities reviews the building plan for compliance with federal, state, and local accessibility laws and standards.
Access Living sued saying that there was a lack of sufficient supply of accessible affordable housing units leaving Chicagoans with certain disabilities unable to find affordable housing.
II
Court’s Reasoning Denying Summary Judgment on the ADA and §504 Claims
- With respect to disability discrimination in housing, Congress specifically found, 42 U.S.C. §12101(a)(5), that individuals with disabilities continually encounter various forms of discrimination, including the discriminatory effects of architectural barriers even in housing.
- §504 requires that individuals with disabilities be provided with meaningful access to the benefit that the grantee offers, which includes the benefit of the elimination of architectural barriers.
- City of Chicago receive federal funds under §504. In particular, it received federal funding from HUD for the purpose of providing affordable housing for Chicagoans.
- §504 includes all of the operations of the local government or the entity of such local government distributing such assistance. See 29 U.S.C. §794(b)(1); 24 C.F.R. §8.3.
- A violation of Title II of the ADA or §504 means proving: 1) a qualified individual with a disability 2) was denied the benefits of the services, program, or activities of a public entity 3) because, or on the basis of their disability.
- A reasonable jury could find that the affordable housing scheme is a service, program, or activity of the City.
- Neither the statutory language nor the regulations shine much light on what kinds of undertaking the statutes are meant to cover. However, the regulations do suggest that the scope of protection is broad, applying to all services, programs, and activities provided or made available by public entities. See 28 C.F.R. §35.102(a).
- The Seventh Circuit has identified two different principles to help courts work out when a service, program, or activity of a governmental agency is involved. First, a governmental entity cannot avoid its obligations under the statute by ceding its governmental functions to private entities. Therefore, the question is whether the affordable housing scheme is a program or activity where the city itself is doing, providing, or making available the affordable housing, rather than the private developers. Second, governing regulations contemplate that liability may attach to some relationships between public and private actors. That is, a public entity may not discriminate on the basis of disability, directly or indirectly, such as through contractual, licensing, or other arrangements. See 28 C.F.R. §35.130(b)(1).
- The City may not avoid liability by framing its role in the affordable housing scheme as merely providing funding tax credit to developers in a way that completely absolves the City from its own duty of complying with the federal accessibility laws. To hold otherwise, goes directly against the principle that the City may not avoid its obligations under the statute by ceding its governmental function to private entities. Saying this, is not the same thing as saying that any time a municipality provides some funding to private entities, the government then becomes liable for any of the project’s failures or legal violations.
- The contracts the City enters into with the developers contemplate the general oversight or compliance obligation on the City by requiring the developers to comply with federal laws before receiving funding. For example, the City agrees in those contracts, per the municipal code of Chicago, to supervise and coordinate the formulation and execution of projects and programs so as to create safe, decent, and affordable housing for residents of the City. Certain agreements even explicitly require the developer to comply with §504 and the ADA and permit the City to inspect the developments for compliance. Accordingly, this contractual relationship between the City and the developers is evidence that the affordable housing scheme is a program or activity made available by the City.
- The City cannot cede its governmental functions-ensuring compliance with federal accessibility laws-to the developers.
- The City has a regulatory obligation to ensure that private developers comply with the federal accessibility laws. For example, the city is required to comply with HUD program requirements and to monitor subcontractors for such compliance. This includes an obligation that HUD recipients inspect each project for compliance with the federal accessibility laws and other property standards, both upon completion of the building and also periodically during the rental property’s affordability in order to ensure ongoing compliance.
- Title II regulations requires accessibility and facility newly constructed or rehabilitated by, on behalf of, or for the use of a public entity. 28 C.F.R. §35.151(a)(1). If recipient of federal funds could evade liability by simply placing the burden on third parties with which the recipient enters into a contract, then the statute would lose much of their force.
- If a jury finds that the affordable housing scheme is a program or activity of the City, then the program in its entirety must comply with federal accessibility laws even if developments do not directly receive federal funds by way of the City. The development must comply with the ADA because a public entity, the City, is providing the service or program.
- Even though certain developments do not receive federal funds, the entire program must comply with §504 because the statute defines “program or activity,” as “all of the operation,” of the funding recipient. 29 U.S.C. §794(b)(1); 24 C.F.R. §8.3.
III
Court’s Reasoning Denying Summary Judgment on the Fair Housing Act Claim
- Discrimination under the Fair Housing Act includes a failure to design and construct those dwellings in such a manner that they are readily accessible to and usable by handicapped persons and contain best-of-five features of adaptive design. 42 U.S.C. §3604(f)(3)(C).
- A reasonable jury can find that the City have to comply with the FHA because of Chicago’s role in the design and construction of the affordable housing developments.
- The FHA’s prohibitions are not directed at a specific actor, rather the prohibition bans an outcome without requiring who the actor is, or how such actors discriminate against potential tenants. As such, it is reasonable to hold that the City-,in its role in providing funding for housing developments, approving construction and rehabilitation of the development, and its contractual obligation to ensure that the development comply with federal law-, discriminated against a person in the conditions of sale or rental of a dwelling because of a failure to design and construct those dwellings in such a manner that is readily accessible to and usable by handicapped persons.
- Question of fact exists as to whether the City is responsible for the property based upon the City’s extensive role in the affordable housing scheme.
IV
Court’s Reasoning Finding a Continuing Violation for Statute of Limitation Purposes
- The City engaged in a pattern of discrimination in its affordable housing scheme so that there is a continuing violation of the federal accessibility laws.
- The Seventh Circuit currently recognizes the continuing violation exception for FHA discriminatory practice claims but has yet to apply the exception to ADA or §504 claims. Given the similarity of the statutes and the close relationship of the claims, and consistent with other district courts, the continuing violation exception applies to Access Living’s ADA and §504 claims.
- Access Living in its complaint challenges the City’s ongoing failure to comply with and enforce the federal accessibility laws. They are not challenging a single or multiple past violations. The distinction is important. If Access Living were to claim that his client were suffering the ongoing effects of noncompliant housing, like a building having a defective elevator, much of the claim would likely not fit the continuing violations exception. However, it is a different story here because Access Living is alleging an ongoing, systemic failure of the City to fulfill what contractual and statutory obligations, which is a completely different matter altogether. That kind of failure is ongoing and not a single isolated incident. Also, each day brings with it a renewed violation of the laws because the City is not performing its statutory duties.
V
Access Living Has a Private Right of Action to Sue the City under Each of the Federal Accessibility Laws
- Access Living has a private right of action to sue the City under each of the federal accessibility laws.
- Private rights of action to enforce federal law must be created by Congress. To determine whether a statute creates a private cause of action, the statute Congress passed must be looked at in order to determine whether it displays an intent to create not just the private right of action but also a private remedy.
- The City does not actually contest that each of the federal accessibility laws contains a private right of action, rather they are saying that the regulations themselves do not contain a private right of action. However, that position misreads the complaint. Access Living only cites the regulations in order to provide the background and the definitions necessary to apply the statutory provisions. Access Living is not asking for the enforcement of the regulations that it cites in its complaint. In this case, each statute supplies a cause of action and Access Living falls within the intended class of plaintiffs of each statute.
VI
Court’s Disposition
- Summary judgment is denied.
- Question for the jury include: 1) how the facts apply to the definitions of program or activity in order to trigger the application of the federal accessibility laws; 2) whether the City’s involvement in design and construction trigger the obligation under the FHA; and 3) whether the continuing-violations exception apply to set the proper statute of limitations.
- The parties are ordered to engage in good faith settlement negotiations. If negotiations stall or falter, then a trial schedule will be set. The parties have to file a status report on or before November 4, 2024, on the status of negotiations and the proposed next step of the litigation.
- During pretrial litigation, the parties are to address whether the court would be bound for purposes of injunctive relief by any jury decision on liability as well as what the damages presentation at trial would entail.
- The court believes that both sides would want to minimize the risks and delay of further litigation, and that the City naturally would want to fashion affordable housing program promoting compliance with federal accessibility laws.
VII
Thoughts/Takeaways
- The whole idea of the ADA being a nondelegable duty started with the Nevada Supreme Court, and it started catching on after that. Now we are seeing that the courts are holding Title II entities to a high standard. That is, the you are now seeing courts having none of it if the Title II entity either delegates its ADA responsibilities to someone else or just ignores what it has to do with ensuring that others comply with their ADA responsibilities.
- In many ways, this case resembles Rolf Jensen when the Nevada Supreme Court discussed how Mandalay Bay still had the duty to ensure that the architect was getting it right with respect to building out its facility in accordance with the ADA. We discussed that case here.
- This week’s blog entry as well as last week’s blog entry have important implications beyond the context of these two cases. For example, medical licensing boards, as we discussed here, routinely offload, or possibly even ignore, their ADA responsibilities in favor of deferring to third parties.
- This was not an equal protection case, but the court notes that housing discrimination is specifically mentioned in the findings to the ADA as amended. As such, a strong argument would be created that a State forcibly waives sovereign immunity should they be sued in a similar way. Municipalities are not subject to sovereign immunity.
- Extensive case law exists saying that Title II of the ADA applies to all operations of a governmental entity. You need to look at 29 U.S.C. §794 to see which kinds of entities have §504 apply to all of their operations and activities. For example, local governmental entities, healthcare entities, and educational entities all have to have all of their operations meaningfully accessible to persons with disabilities.
- It is rare to see a federal court say that a continuing violation is occurring. This court found the continuing violation because of the pattern of discrimination alleged.
- It is also difficult to sue for violating regulations rather than a statute. After Loper Bright, which we discussed here, that may or may not become even more so the case. Here, Access Living did a great job of showing the court that they were alleging statutory violations and that the regulation just provided background. That approach is even more necessary now after Loper Bright where a plaintiff is suing for violations of something clearly prohibited by a regulation.
- The trial judge in it disposition of the case very strongly encourages settlement. It will be interesting to see if that occurs. The Seventh Circuit, less so at the trial level, can be very friendly to those defending disability discrimination claims.
- “Handicapped,” is still used in the Fair Housing Act (FHA) unfortunately. It is highly offensive to persons with disabilities and should be stayed away from at all costs unless citing to it in a specific statute.
- The ADA, FHA, and §504 are all nondelegable duties!!!!!!