Suellen Klossner v. IADU Table Mound MHP, LLC ( 2023 )

United States Court of Appeals
For the Eighth Circuit
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No. 21-3503
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Suellen Klossner,
lllllllllllllllllllllPlaintiff - Appellee,
v.
IADU Table Mound MHP, LLC,
lllllllllllllllllllllDefendant - Appellant,
Impact MHC Management, LLC,
lllllllllllllllllllllDefendant - Appellant.
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United States; Disability Rights Iowa; Lawyers’ Committee for Civil Rights Under
Law; MHAction,
lllllllllllllllllllllAmici on Behalf of Appellee.
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No. 21-3544
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Suellen Klossner,
lllllllllllllllllllllPlaintiff - Appellant,
v.
IADU Table Mound MHP, LLC,
lllllllllllllllllllllDefendant - Appellee,
Impact MHC Management, LLC,
lllllllllllllllllllllDefendant - Appellee.
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Appeals from United States District Court
for the Northern District of Iowa - Eastern
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Submitted: September 21, 2022
Filed: April 10, 2023
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Before COLLOTON, WOLLMAN, and STRAS, Circuit Judges.
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COLLOTON, Circuit Judge.
This appeal concerns the scope of a landlord’s duty under the Fair Housing
Amendments Act of 1988 to make “reasonable accommodations” for the “handicap”
of a tenant. The question is whether that duty extends to “accommodating” a tenant’s
lack of income by accepting a government housing voucher that the landlord
otherwise would not accept from a low-income tenant. We conclude that while the
statute requires a landlord to make reasonable accommodations that directly
ameliorate the handicap of a tenant, the obligation does not extend to alleviating a
tenant’s lack of money to pay rent. The district court believed that the landlord’s
position was “facially appealing,” but thought itself constrained by a decision of the
Supreme Court on a different issue to enter an injunction in favor of the tenant. We
respectfully disagree, and therefore vacate the injunction.
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I.
Suellen Klossner has lived in a mobile-home park in Dubuque, Iowa, since
2009. The park is owned by IADU Table Mound MHP, LLC, which is controlled by
Impact MHC Management, LLC. Tenants in the park pay rent for a lot where they
can situate a mobile home. Klossner receives income from government programs that
she used to pay her rent for ten years. She is unable to work full-time due to
psychiatric and physical disabilities.
In 2019, the City of Dubuque approved a measure allowing the local public
housing authority to provide residents of mobile-home parks with housing choice
vouchers that could be used to supplement their rent payments. Under this voucher
program, the federal government provides funds to local public housing agencies,
which in turn may distribute them to low-income tenants. As the rent on Klossner’s
lot increased, she received a voucher and sought to use it to supplement her rent
payments, but the companies declined to accept the voucher.
The companies explained that federal law does not require landlords to accept
housing choice vouchers, and that Impact declines to do so except in limited
circumstances: where state law requires acceptance or where the company has
purchased property where a prior owner accepted vouchers from a holdover tenant—a
total of approximately forty tenants out of more than twenty thousand under Impact’s
management. Impact cited the administrative burdens of accepting vouchers,
including the obligation to sign a housing assistance payment contract with
restrictions on rent amounts and lease terminations, the requirement to meet certain
housing quality standards, and the inefficiencies of keeping records and collecting
rent when multiple payers are involved.
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Klossner sued Impact and IADU Table Mound, alleging that the companies
violated the Fair Housing Amendments Act by refusing to accept her voucher. Her
theory was that she is a person with a “handicap” under the FHAA, and that the law
required the companies to accept the housing voucher as a “reasonable
accommodation” that was “necessary” to afford her “equal opportunity to use and
enjoy a dwelling.” See 42 U.S.C. § 3604(f)(3)(B). Klossner requested an injunction
requiring the companies to accept her housing choice voucher, and she sought
damages for alleged emotional distress. Klossner also brought claims under state law.
The case proceeded to an expedited bench trial on the federal claim only, with
the state law claims to be resolved at a later time. The district court ruled that the
companies’ refusal to accept Klossner’s housing voucher violated the FHAA. The
court concluded that where a tenant’s disability prevents her from working enough
to afford rent, the statute may require a landlord to accept a housing choice voucher
as a “reasonable accommodation.” The court found that if Klossner were not
disabled, then she “could work and earn enough money to pay her rent.” The court
further determined that Klossner’s requested accommodation was reasonable, because
it would not impose an undue financial or administrative hardship on the companies
or fundamentally alter their policy against accepting housing vouchers except in
limited circumstances.
As a remedy, the court granted injunctive relief requested by Klossner, and
ordered Impact and IADU Table Mound to accept Klossner’s housing choice
voucher. The court declined to impose damages, explaining that “the law in this area
is far from clear,” that the companies acted in good faith, and that the companies
reached an agreement with Klossner about rent pending the trial.
Impact and IADU Table Mound appeal the district court’s order requiring them
to accept Klossner’s housing voucher. Klossner cross-appeals the district court’s
refusal to award damages. We have jurisdiction over the companies’ appeal from an
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interlocutory order of the district court granting an injunction. 28 U.S.C.
§ 1292(a)(1); R. Doc. 86, at 23-24; see Williams v. St. Louis Diecasting Co., 611 F.2d
1223, 1224 (8th Cir. 1979).
II.
The FHAA makes it unlawful to discriminate in housing or make unavailable
a dwelling “because of a handicap of [a] buyer or renter.” 42 U.S.C. § 3604(f)(1)(A).
“Handicap” is a “physical or mental impairment which substantially limits one or
more of such person’s major life activities.” Id. § 3602(h)(1). And “major life
activities” means “functions such as caring for one’s self, performing manual tasks,
walking, seeing, hearing, speaking, breathing, learning and working.” 24 C.F.R.
§ 100.201(b). The statute prohibits “a refusal to make reasonable accommodations
in rules, policies, practices, or services, when such accommodations may be necessary
to afford [a handicapped] person equal opportunity to use and enjoy a dwelling.” 42
U.S.C. § 3604(f)(1)(B). Other statutes use the term “disability” rather than
“handicap,” but as this case involves the FHAA, we will employ the term used in the
statute at issue.
On appeal, the companies argue that although the FHAA calls for reasonable
accommodations that directly ameliorate the effect of a handicap, the statute does not
require a landlord to accommodate a tenant’s economic circumstances by accepting
housing vouchers. Two leading cases support that view.
In Salute v. Stratford Greens Garden Apartments, 136 F.3d 293 (2d Cir. 1998),
tenants asked a landlord to accept government housing certificates to assist with rent
as a reasonable accommodation for their handicaps under the FHAA. The landlord
refused, and the Second Circuit held that the FHAA did not require the landlord to
accept the certificates.
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The court reasoned that “the duty to make reasonable accommodations is
framed by the nature of the particular handicap,” and that illustrative accommodations
included providing a preferred parking space for tenants with difficulty walking, or
lifting a no-pets rule to allow the use of a service dog by a blind person. Id. at 301.
The court concluded, however, that the tenants in Salute sought an accommodation
to remedy economic discrimination “that is practiced without regard to handicap,”
and that the accommodation sought was not “necessary” to afford handicapped
persons an “equal opportunity” to use and enjoy a dwelling. Id. at 302. The court
emphasized that the FHAA “does not elevate the rights of the handicapped poor over
the non-handicapped poor,” and that “economic discrimination” is “not cognizable
as a failure to make a reasonable accommodation” under the FHAA. Id.In Hemisphere Building Co. v. Village of Richton Park, 171 F.3d 437 (7th Cir.
1999), a developer of a community designed for tenants using wheelchairs asked a
municipality to grant a zoning variance to allow the construction of more structures
on a plot of land. The developer argued that the proposed variance was necessary as
a “reasonable accommodation” under the FHAA because it would reduce the cost of
each housing unit, and thereby alleviate the economic impact of handicaps on
prospective tenants who needed inexpensive housing. The village refused to grant
a zoning variance, and the developer sued.
The Seventh Circuit concluded that the developer’s position would lead to
absurd results and rejected it. The court pointed out that if the reasonable
accommodation provision required consideration of a tenant’s financial situation,
then the statute would allow developers not only to ignore zoning laws, but also to
obtain a “reasonable accommodation” that suspended a local building code that
increased the cost of construction, or a minimum wage law, or regulations for the
safety of construction workers. Id. at 440.
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The statute did not call for these results, the court explained, because the duty
of “reasonable accommodation” is limited to modifying rules or policies that hurt
handicapped people by reason of their handicap, rather than by virtue of
circumstances that they share with others, such as limited economic means. Id. The
court believed, for example, that if the statute meant that a landlord or developer must
accommodate poverty caused by handicaps, then it would allow handicapped persons
“to claim a real estate tax rebate.” Id. at 441. The court viewed this as a “radical
result” that required “something more than a spinning out of the logical implications
of ‘reasonable accommodation.’” Id.We conclude that the reasoning of these decisions is sound, and that it
forecloses Klossner’s claim here. The term “reasonable accommodation” is not
defined in the statute, but it was adopted against the backdrop of a predecessor
statute, and must be viewed in the context of a law that forbids discrimination
“because of a handicap.”
The predecessor statute, the Rehabilitation Act of 1973, provided that no
otherwise qualified handicapped individual shall be subjected to discrimination under
any federal program solely by reason of the person’s handicap. 29 U.S.C. § 794(1973) (current version at 29 U.S.C. § 794). By regulation, a recipient of federal
funds was required to make “reasonable accommodation” to the known physical or
mental limitations of an otherwise qualified handicapped applicant. 45 C.F.R.
§ 84.12(a). Congress used equivalent statutory language in the anti-discrimination
provision of the FHAA in 1988, and Congress also adopted the regulatory language
of “reasonable accommodation.” 42 U.S.C. § 3604(f). “[W]hen Congress uses the
same language in two statutes having similar purposes, particularly when one is
enacted shortly after the other, it is appropriate to presume that Congress intended
that text to have the same meaning in both statutes.” Smith v. City of Jackson, 544
U.S. 228, 233 (2005) (plurality opinion); see Northcross v. Bd. of Educ., 412 U.S.
427, 428 (1973) (per curiam). Other decisions have recognized, therefore, that the
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term “[r]easonable accommodation is borrowed from case law interpreting the
Rehabilitation Act of 1973.” City of Edmonds v. Wash. State Bldg. Code Council, 18
F.3d 802, 806 (9th Cir. 1994); see also H.R. Rep. No. 100-711, at 25 (1988).
Under the Rehabilitation Act, reasonable accommodation was defined to
include (1) making facilities accessible to and usable by handicapped persons, and (2)
“job restructuring, part-time or modified work schedules, acquisition or modification
of equipment or devices, the provision of readers or interpreters, and other similar
actions.” 45 C.F.R. § 84.12(b). Judicial decisions preceding enactment of the FHAA
established that reasonable accommodations could include such actions as providing
an oral aptitude test in place of a written examination for a dyslexic job applicant,
Stutts v. Freeman, 694 F.2d 666, 668-69 (11th Cir. 1983), allowing a teacher with
tuberculosis to assume a job that did not threaten the health of susceptible students,
Arline v. Sch. Bd. of Nassau Cnty., 772 F.2d 759, 765 (11th Cir. 1985), or providing
additional training, staff assistance, or scheduling flexibility for an employee with
epilepsy, Reynolds v. Brock, 815 F.2d 571, 572 (9th Cir. 1987).
Consistent with the regulation promulgated under the Rehabilitation Act, these
decisions called for accommodations that provided what one court later described as
the “direct amelioration of a disability’s effect.” Bryant Woods Inn, Inc. v. Howard
Cnty., 124 F.3d 597, 604 (4th Cir. 1997). Nothing in the law suggested that the duty
of “reasonable accommodation” extended to the dissimilar action of alleviating
downstream economic effects of a handicap. When Congress adopted the FHAA in
1988, therefore, it acted against a background understanding that the concept of a
“reasonable accommodation” was so limited.
Regulations adopted under the FHAA illustrate the same point: a landlord
must make an exception to a no-pets policy for a blind person who requires assistance
of a seeing eye dog; an apartment manager must modify a “first come first served”
policy for allocating parking spaces to accommodate a tenant who is mobility
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impaired. 24 C.F.R. § 100.204(b). A landlord’s duty to make reasonable
accommodations extends to direct amelioration of handicaps, but does not encompass
an obligation to accommodate a tenant’s “shortage of money,” Salute, 136 F.3d at
302, and the far-reaching implications that such an obligation would entail.
Hemisphere, 171 F.3d at 440-41. Indeed, if Klossner’s position were accepted, then
we see no principled reason why a landlord could not be required in the name of
“reasonable accommodation” to reduce monthly rent for an impecunious disabled
person. Accepting payment of five fewer dollars per month is no more “fundamental
alteration” of a landlord’s business than is assuming the cost and administrative
changes that come with accepting government housing vouchers.
The district court found the reasoning of Salute “facially appealing, especially
when it involves the voluntary housing voucher program,” but concluded that the
decision could not be reconciled with the Supreme Court’s later decision in U.S.
Airways, Inc. v. Barnett, 535 U.S. 391 (2002). We conclude that Barnett addressed
a different question and does not supersede the holdings in Hemisphere and Salute.
Barnett concerned a different statute, the Americans with Disabilities Act, and
its prohibition on discrimination in employment. The ADA dictates that an employer
may not “discriminate against a qualified individual” with a disability, 42 U.S.C.
§ 12112(a), and defines a “qualified” person as one who, “with or without reasonable
accommodation,” can perform the essential functions of the relevant job, id.§ 12111(8). The statute further provides that “discrimination” includes “not making
reasonable accommodations,” unless the accommodation would impose an undue
hardship on the employer. Id. § 12112(b)(5)(A).
Barnett held that the duty of reasonable accommodation under the ADA may
require an employer to make an exception to a seniority rule that ordinarily is used
to allocate employment opportunities. 535 U.S. at 406. In that case, a disabled
worker injured his back while working in a cargo-handling position, and he sought
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a less physically demanding job in the mailroom. When he learned that two
employees senior to him intended to seek the mailroom position, the disabled worker
argued that the employer was required to make an exception to the seniority rule as
a reasonable accommodation.
The Court rejected the company’s position that there was no duty to consider
an exception to a “disability-neutral” seniority rule, and that an employer has no
obligation to prefer applicants with disabilities over other applicants. Id. at 397-98.
Barnett explained that by definition, a special “accommodation” requires an employer
to treat an employee with a disability differently and preferentially: “The simple fact
that an accommodation would provide a ‘preference’—in the sense that it would
permit the worker with a disability to violate a rule that others must obey—cannot,
in and of itself, automatically show that the accommodation is not ‘reasonable.’” Id.
at 398.
Barnett, however, does not resolve whether a landlord is obliged under the
FHAA to “accommodate” a tenant’s lack of sufficient money to pay rent. We do not
conclude that preferential treatment for a handicapped tenant, in and of itself, takes
a proposed accommodation outside the scope of what the FHAA may require.
Consistent with Barnett, there is no dispute here that the FHAA sometimes requires
a landlord to provide preferential treatment: a disability-neutral rule on pets or
parking spaces must yield when a tenant requires a service dog or proximity to an
entrance.
The issue here, like in Salute and Hemisphere, is whether the duty of
reasonable accommodation goes further and extends to measures that would alleviate
a disabled tenant’s impoverished economic circumstances. Barnett did not address
that question. That case involved a potential accommodation that would have directly
ameliorated an employee’s inability to work in cargo-handling by placing him in a
mailroom job, and it addressed a different statute outside the context of housing. We
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think the Ninth Circuit in Giebeler v. M & B Associates, 343 F.3d 1143 (9th Cir.
2003), overstated the meaning of Barnett by presuming that it dictates the ambitious
interpretation of the FHAA that was rejected in Hemisphere and Salute, despite what
Giebeler termed the “facial appeal” of those decisions. Id. at 1154.
* * *
For these reasons, we vacate the injunction ordered by the district court.
R. Doc. 82, at 24. The cross-appeal is dismissed for lack of jurisdiction.
STRAS, Circuit Judge, concurring in the judgment.
Sometimes simpler is better, and this is one of those times. See Paul Vincent
Spade & Claude Panaccio, William of Ockham, The Stanford Encyclopedia of
Philosophy § 4.1 (Spring 2019 ed.) (describing Ockham’s Razor). The court makes
multiple assumptions on the way to holding that a housing voucher is not an
“accommodation” under the Fair Housing Amendments Act of 1988. I would take
a simpler route and just conclude that the request is unreasonable. See 42 U.S.C.
§ 3604(f)(3)(B) (requiring any “accommodation[]” in “rules, policies, practices, or
services” to be “reasonable”).
Complying with regulations can be a burden. To participate in the housing-
voucher program, landlords must be willing to guarantee “certain housing[-]quality
standards,” sign a contract containing “restrictions on rent amounts and lease
terminations,” and keep an entirely separate set of books. Ante, at 3. For those
already willing to take housing vouchers, accepting a few more is not a big deal. But
for those that are not, like IADU and Impact, it is unreasonable to force the regulatory
burdens on them. See 42 U.S.C. § 3604(f)(3)(B); see also Salute v. Stratford Greens
Garden Apartments, 136 F.3d 293, 297–98, 300 (2d Cir. 1998) (explaining why it is
“unreasonable”).
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The burdens here are even greater than usual. Typically, a landlord owns both
the unit and the piece of land underneath it. But mobile homes are different. The
tenant purchases the trailer and then parks it in a space owned by the landlord.
When it comes to housing vouchers, the split in ownership has real
consequences. The quality standards apply primarily to the home itself. See 24
C.F.R. § 982.401(c)(2)(i), (f)(1), (g)(2)(i), (m)(1) (requiring, for example, a “sanitary”
unit free from “serious defects” that has all “fixtures” and “equipment” in “proper
operating condition”). And as its owner, Klossner recognizes that it is her obligation
to “complete [the] necessary repairs.” But if she falls short, it is IADU and Impact
that will bear the brunt of the harm by not getting paid, regardless of who is to blame.
See 24 C.F.R. § 982.404 (explaining that payments will be “terminate[d]”).
Requiring a landlord to shoulder the financial risk in these circumstances is a “major
adjustment” to the landlord-tenant relationship. Se. Cmty. Coll. v. Davis, 442 U.S.
397, 412–13 (1979) (concluding that “major adjustments” are “unreasonable”); see
Ala. Ass’n of Realtors v. DHS, 141 S. Ct. 2485, 2489 (2021) (noting that the right to
exclude—especially those who cannot pay rent—is a “fundamental element[] of
property ownership”); Heights Apartments, LLC v. Walz, 30 F.4th 720, 735 (8th Cir.
2022) (same).
It is true that landlords can try to evict residents who neglect their units. But
going to court costs time and money. See 24 C.F.R. § 982.310(f) (“The owner may
only evict the tenant from the unit by instituting a court action.”). And the housing-
voucher regulations may make that option even more burdensome and unpredictable
than usual. Eviction is only for “good cause,” meaning that severing ties with
residents is not always easy. Id. § 982.310(a), (d). “[D]epriving [landlords like
IADU and Impact] of rent payments with no guarantee of eventual recovery” is a
significant and unreasonable risk to place on them. Ala. Ass’n of Realtors, 141 S. Ct.
at 2489.
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Klossner cites nothing suggesting otherwise. In Giebeler v. M & B Associates,
for example, the requested accommodation was allowing a resident’s mother, who
possessed “significant assets,” to cosign on the lease as a way of meeting a minimum-
income requirement. 343 F.3d 1143, 1144–45, 1158 (9th Cir. 2003). Waiving the
no-cosigners policy was a “reasonable accommodation” because it did not “alter the
essential obligations” of the relationship or create “substantial financial . . . risk.” Id.at 1157–58. Not true here.
Schaw v. Habitat for Humanity of Citrus County, Inc., is no different. 938 F.3d
1259 (11th Cir. 2019). The question there was whether a landlord had to count
monthly payments from family and food stamps as income. Id. at 1268. The court
concluded that the answer was yes, but it also explained, in a passage that is relevant
here, that the forced acceptance of housing vouchers is an example of an
unreasonable accommodation. Id. at 1267. Faced with that precise situation today,
I agree.
In the end, Klossner simply asks too much of IADU and Impact. Forcing them
to accept a housing voucher is not a “reasonable” accommodation. 42 U.S.C.
§ 3604(f)(3)(B). I would not say “a single word more,” United States v. Treanton, 57
F.4th 638, 643 (8th Cir. 2023) (Stras, J., concurring), particularly if it means
undertaking the needlessly complicated task of trying to evaluate how tight the fit is
between a disability and an accommodation, see Rotkiske v. Klemm, 140 S. Ct. 355,
361 (2019) (decrying “[a]textual judicial supplementation” of a statute).
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