Nicole Dussault v. RRE Coach Lantern Holdings, LLC , 86 A.3d 52 ( 2014 )

MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2014 ME 8
Docket: Cum-11-591
Argued: May 8, 2012
Decided: January 23, 2014
Panel: SAUFLEY, C.J., and ALEXANDER, LEVY, SILVER, MEAD, GORMAN, and
JABAR, JJ.
Majority: SAUFLEY, C.J., and ALEXANDER, SILVER, and MEAD, JJ.
Concurrence: ALEXANDER, J.
Dissent: LEVY, GORMAN, and JABAR, JJ.
NICOLE DUSSAULT
v.
RRE COACH LANTERN HOLDINGS, LLC, et al.
SILVER, J.
[¶1] Nicole Dussault appeals from a summary judgment entered in the
Superior Court (Cumberland County, Cole, J.) in favor of RRE Coach Lantern
Holdings, LLC, and Resource Real Estate Management, Inc. (collectively, Coach
Lantern). Dussault claims that Coach Lantern’s policy of not including in its
standard lease a tenancy addendum that binds the landlord to the requirements of
the federal government’s Section 8 Housing Choice Voucher Program constitutes
unlawful discrimination on the basis of her status as a public assistance recipient in
violation of 5 M.R.S. § 4582 (2007)1 of the Maine Human Rights Act (MHRA),
5 M.R.S. §§ 4551-4634 (2007). She also argues that the court erred by granting
1
Title 5 M.R.S. § 4582 has been repealed and replaced by P.L. 2011, ch. 613, §§ 11-12 (effective
Sept. 1, 2012) (codified at 5 M.R.S. § 4581-A (2013)), but the change does not affect this appeal. The
relevant language of the new section 4581-A is substantially identical to that of prior section 4582.
2
Coach Lantern’s motion for summary judgment and denying her cross-motion for
summary judgment based on three theories of discrimination: direct evidence,
disparate treatment, and disparate impact. We disagree and affirm the judgment.
I. FACTUAL AND LEGAL BACKGROUND
[¶2] The following facts are drawn from the summary judgment record and
are not disputed by the parties. Nicole Dussault and her three children became
homeless in June 2008 following a foreclosure on Dussault’s home. On
July 14, 2008, Dussault was issued a voucher pursuant to the Section 8 Housing
Choice Voucher Program by Avesta Housing, a nonprofit organization that
administers the federal voucher program as a contract agent for the Maine State
Housing Authority.2 Through the voucher program, the Housing Authority
provides assistance to people with low incomes by subsidizing rent. The Housing
Authority pays a portion of the voucher recipient’s rent each month directly to the
landlord for a unit of the recipient’s choosing. See 24 C.F.R. § 982.1 (2013). The
Housing Authority calculates an amount of rent for which the recipient is
responsible, which is usually equal to thirty percent of the recipient’s adjusted
2
The federal program originated with section 8 of the United States Housing Act of 1937,
P.L. 75-412, 50 Stat. 888, as amended by the Housing and Community Development Act of 1974,
P.L. 93-383, § 201(a), 88 Stat. 633, 662-666, and is now codified at 42 U.S.C.A. § 1437f (West, Westlaw
through P.L. 113-65 (excluding P.L. 113-54) approved 12-20-13), with associated regulations at 24
C.F.R. §§ 982.1-.643 (2013). It is administered by the United States Department of Housing and Urban
Development (HUD) in conjunction with state and local housing agencies. See 24 C.F.R. §§ 982.1,
982.3.
3
income as defined by statute. See 42 U.S.C.A. §§ 1437a(b)(5), 1437f(o)(2)(A)-(B)
(West, Westlaw through P.L. 113-65 (excluding P.L. 113-54) approved 12-20-13).
Federal law explicitly makes landlords’ participation in the voucher program
voluntary. See 24 C.F.R § 982.302(b) (2013) (“If the family finds a unit, and the
owner is willing to lease the unit under the program, the family may request
[Housing Authority] approval of the tenancy.” (emphasis added)).
[¶3] Dussault sought housing in Scarborough in order to maintain her son’s
placement in the school system there. Through Craigslist, Dussault found a listing
for a three-bedroom apartment in the Coach Lantern Apartments in Scarborough
with an advertised rent that was within the voucher program limits. The apartment
is owned by RRE Coach Lantern Holdings, LLC, of which Resource Real Estate
Management, Inc., is an affiliate.
[¶4] On August 5, 2008, Dussault called Coach Lantern to inquire about
renting the apartment. Dussault alleges that after she disclosed that she would be
using a voucher to pay the rent, she was told that Coach Lantern does not accept
vouchers. She alleges that her caseworker at Avesta Housing was told the same
thing by Coach Lantern when the caseworker inquired on Dussault’s behalf.
Approximately two weeks later Dussault again called Coach Lantern to inquire
about the apartment, but she did not mention that she would be using a voucher.
After arranging an appointment and being shown the apartment, Dussault was
4
given a rental application. A Coach Lantern employee encouraged her to fill it out.
Two days later a Coach Lantern representative called Dussault to ask if she
planned to submit the application. Dussault did submit an application, and on it
she disclosed that she would be using a voucher. Dussault qualified for an
apartment and “was accepted.”
[¶5] Dussault’s Avesta caseworker sent Coach Lantern a “landlord packet”
indicating that in order for Dussault to be able to use her voucher, Coach Lantern
would have to include a HUD tenancy addendum in her lease. Federal regulations
require any landlord that accepts a housing voucher to include the tenancy
addendum in its lease. 24 C.F.R. § 982.308(f) (2013). The addendum sets forth
the program requirements for participating landlords and tenants. Id.; see also
24 C.F.R. §§ 982.308-.310 (2013). The caseworker informed Coach Lantern that
paperwork would need to be filled out before a HUD-mandated property inspection
could take place, and that the paperwork and inspection process “could take a
couple of weeks.”
[¶6] Coach Lantern, through its attorney, contacted Avesta Housing by
letter dated September 3, 2008, to state its “problem with the inclusion of a
Tenancy Addendum with [the standard] lease” and to see whether it could rent to
Dussault without including the addendum in her lease. The letter stated, “I wish to
make it absolutely clear that my client is not refusing to rent to [Dussault]
5
primarily because she is a recipient of public assistance,” but because “[t]he
addendum includes more restrictive rights and obligations on the landlord th[a]n
the standard lease that they use, and my client does not wish to be bound by these
more restrictive obligations.” Avesta Housing replied by email dated
September 12, 2008, that Coach Lantern could not rent to Dussault without
including the addendum.
[¶7] Coach Lantern is unwilling to include the addendum in any of its
leases. Specifically, Coach Lantern finds it unacceptable that pursuant to the
addendum the landlord agrees (1) to maintain the unit and premises in accordance
with the housing quality standards set by the Housing Authority; (2) not to raise
the rent during the initial term of the lease; (3) to charge a “reasonable” rent, as
determined by the Housing Authority in accordance with HUD requirements,
during the lease term; (4) not to evict the tenant or terminate the lease solely
because the Housing Authority has failed to pay the subsidized portion of the rent;
(5) not to evict a tenant who is a victim of domestic violence based on acts of
domestic violence committed against her, unless the landlord can demonstrate an
actual and imminent threat to other tenants or employees; (6) to open the premises
to inspection by a Housing Authority inspector at the beginning of the lease, upon
any complaint by the tenant, or after the landlord has remedied a problem
identified by an inspector in a prior inspection; and (7) to notify the Housing
6
Authority at least sixty days prior to any rent increase.
[¶8] Dussault was unable to afford the apartment without using the voucher.
Because she could not use the voucher unless Coach Lantern included the
addendum in her lease, she did not rent the apartment. She could not find housing
in Scarborough and ultimately moved to South Portland. Dussault does not intend
to seek housing at any Coach Lantern property in the future.
II. PROCEDURAL BACKGROUND
[¶9] In November 2008, Dussault filed a complaint with the Maine Human
Rights Commission (Commission), alleging that Coach Lantern’s policy of
refusing to include the HUD tenancy addendum in her lease, and therefore its
refusal to participate in the voucher program, constitutes discrimination against
Dussault on the basis of her status as a public assistance recipient in violation of
the MHRA. After an investigation, the Commission voted unanimously at a
hearing on April 13, 2009, that there were reasonable grounds to believe that
Coach Lantern discriminated against Dussault because of her status as a recipient
of public assistance.
[¶10] Dussault then filed a complaint in the Superior Court seeking
declaratory and injunctive relief and damages. Coach Lantern filed a motion for
7
summary judgment and Dussault filed a cross-motion.3 The court granted Coach
Lantern’s motion and denied Dussault’s motion, ruling in favor of Coach Lantern
on each of three theories of discrimination. First, the court determined that there
was no direct evidence of discrimination, and thus declined to perform a
mixed-motive analysis. Next, the court concluded that Dussault failed to meet her
burden, as part of the three-step, burden-shifting test that applies when there is no
direct evidence of discrimination, to produce sufficient evidence that Coach
Lantern’s proffered reasons for refusing to participate in the voucher program were
pretextual. Finally, in performing a discriminatory impact analysis, the court
concluded that Coach Lantern’s policy affects recipients of public assistance more
harshly than housing applicants who do not intend to use vouchers, but that the
policy is justified by a business necessity.
[¶11] Dussault timely appealed.
III. DISCUSSION
A. Standard of Review
[¶12] We review the court’s interpretation and application of the MHRA
de novo. See Russell v. ExpressJet Airlines, Inc., 2011 ME 123, ¶ 16,
32 A.3d 1030. “We review the court’s ruling on cross-motions for summary
3
Dussault withdrew her request for injunctive relief in her motion for summary judgment, as she does
not plan to seek housing at Coach Lantern properties in the future.
8
judgment de novo . . . .” F.R. Carroll, Inc. v. TD Bank, N.A., 2010 ME 115, ¶ 8,
8 A.3d 646. “Summary judgment is appropriate if the record reflects that there is
no genuine issue of material fact and the movant is entitled to a judgment as a
matter of law.” Id. (quotation marks omitted).
B. The Maine Human Rights Act
[¶13] The MHRA declares that individuals have a civil right to “[t]he
opportunity . . . to secure decent housing in accordance with [their] ability to pay,
and without discrimination because of race, color, sex, sexual orientation, physical
or mental disability, religion, ancestry, national origin or familial status.” 5 M.R.S
§ 4581.4 Although the MHRA does not reference status as a recipient of public
assistance in this declaration, see id., the MHRA does provide certain protections
to public assistance recipients. Section 4582 provides in relevant part:
It is unlawful housing discrimination, in violation of this Act
...
[f]or any person furnishing rental premises or public
accommodations to refuse to rent or impose different terms of tenancy
to any individual who is a recipient of federal, state or local public
assistance, including medical assistance and housing subsidies
primarily because of the individual’s status as recipient . . . .
5 M.R.S. § 4582. Section 4583, however, provides in relevant part:
4
Title 5 M.R.S. § 4581 has since been amended by P.L. 2011, ch. 613, § 10 (effective Sept. 1, 2012)
(codified at 5 M.R.S. § 4581 (2013)), but the change does not affect this appeal.
9
Nothing in this Act may be construed to prohibit or limit the
exercise of the privilege of every person and the agent of any person
having the right to sell, rent, lease or manage a housing
accommodation to set up and enforce specifications in the selling,
renting, leasing or letting or in the furnishings of facilities or services
in connection with the facilities that are consistent with business
necessity and are not based on the race, color, sex, sexual orientation,
physical or mental disability, religion, country of ancestral origin or
familial status of or the receipt of public assistance payments by any
prospective or actual purchaser, lessee, tenant or occupant.
5 M.R.S. § 4583. Together these sections establish that a landlord may not refuse
to rent to, or impose different terms of tenancy on, a recipient of public assistance
who is an otherwise-eligible tenant primarily on the basis of that person’s status as
a recipient unless the landlord can demonstrate a business necessity that justifies
the refusal.
[¶14] In construing a statute, we seek to give effect to the Legislature’s
intent. See Eagle Rental, Inc. v. State Tax Assessor, 2013 ME 48, ¶ 11,
65 A.3d 1278. We look beyond the plain language of the statute to other indicia of
legislative intent only if the statute is ambiguous. See id.; Fuhrmann v. Staples the
Office Superstore E., Inc., 2012 ME 135, ¶ 23, 58 A.3d 1083. The only
discrimination that the MHRA prohibits with respect to public assistance recipients
is “refus[al] to rent or impos[ition of] different terms of tenancy” based primarily
on a person’s status as a recipient. 5 M.R.S. § 4582. This language stands in
contrast to the broader prohibition against housing discrimination on other bases,
10
which makes it a violation of the MHRA to “refuse to show or refuse to sell, rent,
lease, let or otherwise deny to or withhold from any individual housing
accommodation because of the race or color, sex, sexual orientation, physical or
mental disability, religion, ancestry, national origin or familial status of the
individual.” Id. (emphasis added).
[¶15] We previously construed the MHRA’s prohibition of “unlawful
housing discrimination” based on receipt of public assistance in Catir v.
Commissioner of the Department of Human Services, 543 A.2d 356, 357-58
(Me. 1988). In Catir, a nursing home that had accepted state and federal Medicaid
reimbursement stopped participating in the program and informed residents that it
would no longer keep residents who were unable to pay the higher, private rate.
Id. at 357. Residents receiving Medicaid sued, seeking a declaration that the
nursing home was obligated to accept Medicaid reimbursement. Id. We upheld
summary judgment for the nursing home, reasoning that it was not unlawful
discrimination for the nursing home to stop participating in the Medicaid program
and to require the residents receiving Medicaid to pay the same rate as residents
not receiving Medicaid. Id. at 357-58. We concluded that the nursing home had
not “refuse[d] to rent or impose[d] different terms of tenancy” on the Medicaid
recipients because the record showed that, by refusing to accept the lower
Medicaid payment, the nursing home merely “subjected the [Medicaid] recipients
11
to the same terms of tenancy offered to any other individual.” Id. at 357-58 (first
and second alterations in original) (quotation marks omitted).
[¶16] Here, as in Catir, the undisputed facts demonstrate that Coach Lantern
did not “refuse to rent [to] or impose different terms of tenancy” on Dussault.
Rather, Coach Lantern was willing to, and in fact did, offer Dussault the apartment,
and was willing to rent to her after learning of her status so long as it could do so
without including the tenancy addendum. In essence, Coach Lantern offered to
rent the apartment to Dussault on “the same terms of tenancy offered to any other
individual.” Id. at 358. A landlord does not violate the MHRA by offering
apartments to recipients of public assistance on the same terms as it offers
apartments to other potential tenants. See id.
[¶17] Even if we were convinced that Coach Lantern’s policy of declining
to include the tenancy addendum in Dussault’s lease constituted a refusal to rent or
imposition of different terms of tenancy within the meaning of section 4582, the
undisputed facts show that Coach Lantern’s refusal to include the addendum was
not “primarily because of [Dussault’s] status as recipient,” but rather because
Coach Lantern did not wish to bind itself to the terms of the tenancy addendum.
The term “status,” although not defined in the MHRA, is commonly defined as “[a]
person’s legal condition, whether personal or proprietary; the sum total of a
person’s legal rights, duties, liabilities, and other legal relations, or any particular
12
group of them separately considered.” Black’s Law Dictionary 1542
(9th ed. 2009). To the extent that there is any ambiguity in the meaning of
“status,” the legislative history of the MHRA makes clear that the statute was
meant to proscribe refusals to rent “made not with reference to the tenant’s
personal responsibility and integrity . . . but only on the general misapprehension
that a family on public assistance is automatically an undesirable tenant.”
L.D. 327, Statement of Fact (107th Legis. 1975).
[¶18] We recognize the MHRA’s purpose to protect public assistance
recipients’ rights to secure decent housing. We will not, however, read into the
MHRA a mandate that landlords accept terms of tenancy that are otherwise
required only if the landlord chooses to participate in a voluntary federal program.
See 24 C.F.R § 982.302(b) (noting that the voucher program is voluntary); see also
Edwards v. Hopkins Plaza Ltd. P’ship, 783 N.W.2d 171, 176-77 (Minn. Ct. App.
2010) (concluding that the voucher program is voluntary pursuant to state and
federal law).
[¶19] We are limited by the language that the Legislature has enacted, and
may not substitute our policy judgment for that of the Legislature. See Edwards,
783 N.W.2d at 179 (“[T]he issue of ensuring affordable housing availability is an
issue for the . . . Legislature or the United States Congress, which have the power
to establish policy and enact laws in this area.”). The Legislature has not required
13
landlords to accept Section 8 vouchers. Although the Legislature has considered a
bill that would have effectively required landlords to participate in the voucher
program, it has not, to date, made this voluntary program mandatory in Maine.
See L.D. 685, § 2 (123rd Legis. 2007) (proposing an amendment to the MHRA
forbidding discrimination against recipients of public assistance “because of any
requirement of such a public assistance program”); Comm. Amend. A to L.D. 685,
No. S-162 (123rd Legis. 2007) (removing the language regarding discrimination
based on the requirements of public assistance programs from the bill).
C. Summary Judgment
[¶20] In deciding the parties’ cross-motions for summary judgment, the
Superior Court ruled in favor of Coach Lantern on each of three different theories
of discrimination: direct evidence, disparate treatment, and disparate impact. We
address each theory in light of the interpretation of the MHRA that we have now
articulated.
1. Direct Evidence
[¶21] Courts have historically addressed claims of direct evidence of
discrimination through a “mixed-motive” analysis. See Patten v. Wal-Mart Stores
E., Inc., 300 F.3d 21, 25 (1st Cir. 2002). Pursuant to that analysis, a plaintiff must
first offer evidence that her status as a public assistance recipient was a
“motivating factor” in the landlord’s refusal to rent to her. See id. (emphasis
14
omitted). The defendant landlord then bears the burden of producing evidence that
it would have refused to rent to the potential tenant even if she were not a recipient
of public assistance. See id. Because the undisputed facts demonstrate that, in
declining to include the tenancy addendum in its lease, Coach Lantern did not
“refuse to rent or impose different terms of tenancy” on Dussault based primarily
upon her status as a recipient of public assistance, Dussault has failed to present a
prima facie case of discrimination on a direct evidence theory.5
2. Disparate Treatment
[¶22] When a plaintiff makes a disparate treatment claim at the summary
judgment stage, a three-step, burden-shifting test applies. See Daniels v.
Narraguagus Bay Health Care Facility, 2012 ME 80, ¶ 14, 45 A.3d 722. First, the
plaintiff must establish a prima facie case of discrimination. See id. Second, if the
plaintiff has met her burden in the first step, the landlord must present evidence of
a legitimate, non-discriminatory reason for the adverse action. See id. ¶ 15. Third,
if the landlord meets its burden in the second step, the plaintiff must present
evidence that the landlord’s proffered reason is pretextual or untrue. See id. This
analysis addresses the parties’ burdens of production, not persuasion.
See St. Mary’s Honor Ctr. v. Hicks, 509 U.S. 502, 507-08, 521 (1993).
5
Given this conclusion, we need not address the continuing vitality of the “mixed-motive” analysis in
light of Gross v. FBL Financial Services, Inc., 557 U.S. 167, 173-80 (2009) (interpreting the Age
Discrimination in Employment Act’s bar on discrimination “because of” age as requiring a showing of
but-for causation, rather than a showing that age was simply a motivating factor).
15
[¶23] Here again, Dussault has failed to establish a prima facie case,
because the undisputed facts show that Coach Lantern did not “refuse to rent or
impose different terms of tenancy” on Dussault based primarily upon her status as
a recipient of public assistance. See Lindsay v. Yates, 578 F.3d 407, 415
(6th Cir. 2009) (requiring the plaintiff in a housing discrimination case to provide
prima facie evidence that he or she applied for and was denied a housing
accommodation); McDonald v. Coldwell Banker, 543 F.3d 498, 503, 505
(9th Cir. 2008) (same); Mitchell v. Shane, 350 F.3d 39, 47 (2d Cir. 2003) (same);
see also Cookson v. Brewer Sch. Dep’t, 2009 ME 57, ¶ 14, 974 A.2d 276
(discussing the requirement of a prima facie showing of discrimination in the
employment context).
3. Disparate Impact
[¶24] We evaluate claims of disparate impact in the employment context
using a similar three-step, burden-shifting analysis. See Me. Human Rights
Comm’n v. City of Auburn, 408 A.2d 1253, 1264-65, 1268 (Me. 1979). First, the
plaintiff must establish a prima facie case of disparate impact by identifying a
facially neutral practice that affects one group more harshly than another. Id. at
1264. Second, if the plaintiff meets her burden in the first step, the defendant must
present prima facie evidence that its practice is justified by a business necessity.
Id. at 1265. Finally, if the defendant meets its burden in the second step, the
16
plaintiff must present prima facie evidence that the defendant’s proffered
justification is pretextual or that other practices would have a less discriminatory
impact. Id. at 1268.
[¶25] Nothing in the language of the MHRA suggests, however, that it
imposes disparate impact liability on a landlord for discrimination against an
individual because of the individual’s status as a recipient of public assistance.
See Smith v. City of Jackson, 544 U.S. 228, 233-40 (2005) (concluding that the
Age Discrimination in Employment Act created disparate impact liability because
its text “focuses on the effects of the action on the employee rather than the
motivation for the action of the employer”).6 As we have noted, the only
discrimination that the MHRA prohibits with respect to public assistance recipients
is “refus[al] to rent or impos[ition of] different terms of tenancy” based primarily
on a person’s status as a recipient. 5 M.R.S. § 4582.
[¶26] Dussault argues that section 4583 incorporates disparate impact
liability into the housing discrimination provisions of the MHRA, and that the
legislative history of the statute supports this contention. This argument, however,
finds no support in the language of section 4583. See Eagle Rental, 2013 ME 48,
¶ 11, 65 A.3d 1278 (noting that we do not consider legislative history if a statute is
6
Although none of the parties or amici have directly argued that the MHRA does not impose
disparate impact liability on a landlord for discrimination against an individual because of the individual’s
status as a recipient of public assistance, a necessary first step in our analysis is to determine whether such
liability exists.
17
unambiguous). Nothing in the language of section 4583 broadens the MHRA’s
protections of recipients of public assistance; rather, section 4583 limits those
protections by providing landlords with a defense of business necessity for conduct
that might otherwise violate section 4582. See Smith, 544 U.S. at 251-52
(O’Connor, J., concurring) (opining that, contrary to the plurality opinion, a
provision in the Age Discrimination in Employment Act permitting discrimination
based on “reasonable factors other than age” did not create disparate impact
liability, but rather created a “safe harbor” for defendants (emphasis omitted)
(quotation marks omitted)). We therefore conclude, as a matter of law, that the
MHRA, as currently established by the Maine Legislature, does not create
disparate impact liability in the context of claims of housing discrimination based
on a landlord’s decision not to participate in the voluntary voucher program
established by Section 8.
[¶27] In reaching the opposite conclusion, the dissent relies heavily on the
federal courts’ interpretation of the Fair Housing Act (FHA), 42 U.S.C.A.
§§ 3601-3631 (West, Westlaw through P.L. 113-65 (excluding P.L. 113-54)
approved 12-20-13). Unlike the MHRA, however, the FHA does not prohibit
housing discrimination on the basis of an individual’s status as a recipient of public
assistance. Id. § 3604(a)-(e) (prohibiting housing discrimination “because of race,
color, religion, sex, familial status, or national origin”). Moreover, the FHA more
18
broadly defines the discrimination it prohibits, making it a violation of the Act
“[t]o refuse to sell or rent after the making of a bona fide offer, or to refuse to
negotiate for the sale or rental of, or otherwise make unavailable or deny,
a dwelling to any person” because of their protected status. Id. § 3604(a)
(emphasis added). This language stands in contrast to the MHRA’s relatively
narrow prohibition of “refus[al] to rent or impos[ition of] different terms of
tenancy” based primarily on a person’s status as a recipient of public assistance.
5 M.R.S. § 4582; see also Smith, 544 U.S. at 233-40. Although we look to federal
law for guidance in interpreting the MHRA, we “must not abdicate [our] function
of conclusively resolving matters of purely state law.” Fuhrmann, 2012 ME 135,
¶ 27, 58 A.3d 1083 (alteration in original) (quotation marks omitted). This is
particularly true where Congress has taken pains to identify the voucher program
as entirely voluntary.
[¶28] The dissent’s interpretation of section 4583 would effectively compel
Maine’s landlords to participate in a voluntary federal housing subsidy program or
risk having to litigate whether their decision not to participate is based on a
“business necessity.” For many of Maine’s small or mid-sized landlords, the
expense and uncertainty of litigation simply may not be an option. Had the
Legislature intended to impose this requirement on landlords, it would have done
so clearly, particularly in light of the fact that it would have effectively overruled
19
our holding in Catir. See 543 A.2d at 357-58 (holding that a nursing home did not
violate the MHRA by offering housing to Medicaid recipients on “the same terms
of tenancy offered to any other individual”). “In the absence of clear and explicit
statutory language showing that the legislature intended a statute to modify case
law, we will not interpret a statute to effect such a modification.” Caron v.
Me. Sch. Admin. Dist. No. 27, 594 A.2d 560, 563 (Me. 1991) (emphasis added).
[¶29] The dissent suggests that our interpretation of the MHRA allows
landlords to avoid liability by simply alleging business necessity rather than
proving it. Dissenting Opinion ¶ 58. We do not so hold. Rather, because we
conclude that sections 4582 and 4583 do not create disparate impact liability in the
context of claims of housing discrimination based on a landlord’s decision not to
accept the tenancy addendum in order to participate in the voucher program, and
because Dussault has not otherwise made out a prima facie case of housing
discrimination, we do not reach the issue of business necessity.
D. Conclusion
[¶30] Because the undisputed facts show that Coach Lantern did not
discriminate against Dussault in violation of the MHRA, we affirm the summary
judgment in favor of Coach Lantern and the denial of Dussault’s cross-motion for
summary judgment.
20
The entry is:
Judgment affirmed.
ALEXANDER, J., concurring.
[¶31] I am pleased to join the Court’s opinion. I write separately to note
that the Maine Legislature has explicitly rejected the change in the law urged by
the Dissent that would interpret current Maine law to mandate acceptance of
onerous contract conditions that come with the Section 8 program by all landlords
except those capable of assuming the heavy cost of litigation to demonstrate
“business necessity” to avoid the contractual mandates.
[¶32] Since its inception, the Section 8 Housing Choice Voucher Program,
established pursuant to 42 U.S.C.A. § 1437f(o) (West, Westlaw through
P.L. 113-65 (excluding P.L. 113-54) approved 12-20-13) and 24 C.F.R. pt. 982
(2013),7 has been a voluntary program with property owners free to choose to enter
into lease contracts with tenants supported by vouchers only if “the owner is
willing to lease the unit under the program.” 24 C.F.R. § 982.302(b); see also
Park Village Apartment Tenants Ass’n v. Mortimer Howard Trust, 636 F.3d 1150,
7
The Department of Housing and Urban Development regulations covering the voucher program,
including the requirements imposed on property owners at 24 C.F.R. pt. 982, extend to eighty-two pages
of double column, small print text in the Code of Federal Regulations. Access to and comprehension of
those regulations may present a considerable challenge to many individual property owners covered by
this law.
21
1161-62 (9th Cir. 2011), cert. denied 132 S. Ct. 756 (2011); Edwards v. Hopkins
Plaza Ltd. P’ship, 783 N.W.2d 171, 176 (Minn. Ct. App. 2010).
[¶33] As the Court’s Opinion notes, the Section 8 program in Maine has
been administered as a voluntary program. This litigation represents an attempt,
promoted by the Maine Human Rights Commission, to convert the Section 8
program in Maine into a compulsory program and to secure by judicial action an
amendment to the housing discrimination laws that the Maine Legislature
explicitly refused to adopt.
[¶34] The record reflects that in 2007, the Maine Human Rights
Commission supported an effort to amend former 5 M.R.S. § 4582 (2007), now
5 M.R.S. § 4581-A(4) (2013), to make it unlawful to decline to rent properties
because of the additional contractual burdens imposed on owners as a condition for
rental to individuals whose rent would be supported by Section 8 housing
vouchers. L.D. 685, § 2 (123rd Legis. 2007). This effort to change the
discrimination laws from prohibiting different, special treatment of subsidized
tenancies to requiring different, special treatment of subsidized tenancies failed.
The provision mandating acceptance of the additional contractual burdens was
stricken from the legislation that made other amendments to the Maine Human
Rights Act. Comm. Amend. A to L.D. 685, No. S-162 (123rd Legis. 2007). The
other revisions of law were then enacted as P.L. 2007, ch. 243.
22
[¶35] The Legislature’s specific refusal to change the housing
discrimination law from the interpretation we gave it in Catir v. Commissioner of
the Department of Human Services, 543 A.2d 356 (Me. 1988), is an indicator of
legislative intent that must be respected.
[¶36] Our rules of statutory construction establish that when a law has been
interpreted by a judicial opinion, we do not later change that interpretation absent
“clear and explicit” statutory language demonstrating legislative intent to change
prior case law. Caron v. Me. Sch. Admin. Dist. No. 27, 594 A.2d 560, 563
(Me. 1991) (stating that, absent clear and explicit statutory language showing
legislative intent to modify case law interpreting a statute, this Court will not
interpret a statute to effect such a modification); see also Tripp v. Philips Elmet
Corp., 676 A.2d 927, 930-31 (Me. 1996) (same); Rubin v. Josephson, 478 A.2d
665, 671 (Me. 1984) (same).
[¶37] Here there has been no “clear and explicit” statutory language
demonstrating legislative intent to change the interpretation we adopted in Catir.
To the contrary, there is an explicit refusal by the Maine Legislature to enact the
change in the law supported by the Maine Human Rights Commission and
apparently adopted by the dissent today. Such a major change of policy is a matter
best left to resolution by the Maine Legislature after it considers all the
implications of such a change. It is not a change that should be adopted by judicial
23
action after the Legislature refused to make the change supported by the Maine
Human Rights Commission.
LEVY, J., with whom GORMAN and JABAR, JJ., join, dissenting.
[¶38] I agree with the Court’s conclusion that the Maine Human Rights Act
(MHRA), 5 M.R.S. §§ 4551-4634 (2007), does not make participation in the
Section 8 housing assistance program mandatory, and that the MHRA prohibits
landlords from intentionally discriminating against recipients of public assistance.
However, I conclude that the MHRA prohibits housing practices that have a
disparate impact on recipients of public assistance when such decisions are not
justified by a business necessity. I also disagree with the Court’s conclusion that
Coach Lantern did not “refuse to rent” to Dussault for purposes of section 4582.
For these reasons, I respectfully dissent.
A. Whether Coach Lantern “Refused to Rent” to Dussault
[¶39] Before discussing why disparate impact liability applies in this case, it
is necessary to address the threshold question of whether Coach Lantern’s actions
exposed it to liability pursuant to the MHRA. The MHRA deems it unlawful “to
refuse to rent or impose different terms of tenancy” primarily because of an
individual’s status as a recipient of public assistance. 5 M.R.S. § 4582. The Court
24
concludes that Coach Lantern did not “refuse to rent” to Dussault because Coach
Lantern expressed its willingness to rent to her so long as it could do so without
including the HUD tenancy addendum in its lease. Court’s Opinion ¶ 16. The
Court relies heavily on our holding in Catir v. Commissioner of the Department of
Human Services, 543 A.2d 356, 357-58 (Me. 1988), which was decided before the
“business necessity” defense was added to section 4583 in 2007. See P.L. 2007,
ch. 243, § 4 (effective Sept. 20, 2007). In Catir, we upheld a summary judgment
for a nursing home that terminated its participation in the Medicaid program
because “there [was] no allegation or suggestion that the nursing home ‘refuse[d]
to rent or impose[d] different terms of tenancy’ on Medicaid recipients” by making
them pay the same higher rate as non-Medicaid patients. 543 A.2d at 357-58 (first
alteration added) (quoting 5 M.R.S.A. § 4582 (Pamph. 1987)).
[¶40] Catir is inapposite to the present case for several reasons. First, our
opinion stated that the material facts were “undisputed,” id. at 357, and that the
“plaintiffs’ affidavits clearly establish that the nursing home refused to accept the
lower Medicaid payment and subjected the recipients to the same terms of tenancy
offered to any other individual,” id. at 358 (emphasis added). Thus, the summary
judgment record demonstrated that the nursing home’s refusal to serve the
plaintiffs as Medicaid patients was not based on the plaintiffs’ status as recipients
of public assistance, but was instead based on its decision to no longer accept the
25
Medicaid reimbursement rate. Because Catir was decided before the business
necessity exception was added to section 4583, we had no reason to consider
whether the nursing home’s refusal to accept the Medicaid reimbursement rate was
based on business necessity.
[¶41] Second, the more fundamental issue in Catir was not whether the
nursing home “refuse[d] to rent” to its Medicaid recipients, but whether it
“impose[d] different terms of tenancy” on them by making them pay the higher
private rate that non-Medicaid patients paid. In holding that the nursing home had
not imposed different terms of tenancy, we noted that “[t]he equality of housing
access secured by the Maine Human Rights Act is premised upon the assumption
that the persons seeking the housing have the ability to pay.” 543 A.2d at 358. In
contrast with the plaintiffs’ presumed inability to pay the higher private rate at
issue in Catir, there is no dispute here that Dussault, with the assistance of the
Section 8 housing subsidy, had the ability to pay the rent asked by Coach Lantern.
[¶42] In extending Catir so that it controls the outcome of this case, the
Court adopts too narrow a view of what it means for a landlord to “refuse to rent”
to a prospective tenant. Here, Coach Lantern would not rent an apartment to
Dussault so long as the HUD tenancy addendum was included in the lease.
Therefore, regardless of the reason for its refusal, Coach Lantern “refused to rent”
to Dussault pursuant to the plain language of section 4582. The Court’s
26
characterization of Coach Lantern as being “willing” to rent to Dussault is
misplaced, for Coach Lantern was “willing” to rent to Dussault only if she
relinquished her status as a recipient of public assistance. Court’s Opinion ¶ 16.
The Court’s interpretation of section 4582 would effectively sanction a landlord’s
refusal to rent to a tenant based on the tenant’s protected status so long as the
landlord simply asserted that it was “willing” to accept the tenant should she
change her status.
[¶43] On the facts before us, I conclude that Coach Lantern “refused to
rent” to Dussault pursuant to section 4582. I now turn to whether Coach Lantern’s
refusal to rent was “primarily because of” Dussault’s status as the recipient of
public assistance.
B. Disparate Impact Liability Pursuant to the MHRA
[¶44] The MHRA makes it unlawful “to refuse to rent . . . to any individual
. . . primarily because of the individual’s status as [a] recipient” of public
assistance. 5 M.R.S. § 4582. The Court construes the phrase “primarily because
of” to proscribe only intentional discrimination against recipients of public
assistance, and not housing decisions that have a disparate impact on such
recipients. This construction, which was not argued by Coach Lantern before the
Superior Court or this Court, is contrary to sections 4582 and 4583.
27
1. The Plain Meaning of Sections 4582 and 4583 Recognizes Disparate
Impact Liability
[¶45] “When construing the language of a statute, we look first to the plain
meaning of the language to give effect to the legislative intent.”
Stromberg-Carlson Corp. v. State Tax Assessor, 2001 ME 11, ¶ 9, 765 A.2d 566.
A statute’s plain meaning must be considered through the lens of “the whole
statutory scheme for which the section at issue forms a part so that a harmonious
result, presumably the intent of the Legislature, may be achieved.” Id. (quotation
marks omitted). To give effect to the intent of the Legislature, “[w]ords must be
given meaning and not treated as meaningless and superfluous.” Id.
[¶46] The question before us is what it means for a landlord to refuse to rent
to a tenant “primarily because of” the tenant’s status as a recipient of public
assistance pursuant to section 4582. The Court’s holding—that “primarily because
of,” on its face, only prohibits housing decisions that are intentionally
discriminatory—misreads the statute. Whether a housing decision is “primarily
because of” a tenant’s protected status can mean either (1) that the decision had a
discriminatory purpose, or (2) that the decision resulted in a disparate impact on
members of a protected group that was functionally equivalent to intentional
discrimination. “‘[T]he necessary premise of the disparate impact approach is that
some [housing] practices, adopted without a deliberately discriminatory motive,
may in operation be functionally equivalent to intentional discrimination.’”
28
Mountain Side Mobile Estates P’ship v. Sec’y of Hous. & Urban Dev., 56 F.3d
1243, 1250-51 (10th Cir. 1995) (quoting Watson v. Fort Worth Bank & Trust, 487
U.S. 977, 987 (1988)) (second alteration in original). This construction accords
with the Supreme Court’s adoption of disparate impact liability in the face of
statutory language that, as is true here, does not explicitly mention disparate impact
liability. See Griggs v. Duke Power Co., 401 U.S. 424, 429-36 (1971) (holding
that disparate impact liability is contemplated by Title VII’s prohibition on
employment tests that are “‘designed, intended or used to discriminate because of
race’”) (quoting the Civil Rights Act of 1964, Pub. L. No. 88-352, § 703(h), 78
Stat. 241, 257 (codified as amended at 42 U.S.C.A. § 2000e-2 (West, Westlaw
through P.L. 113-65 (excluding P.L. 113-54) approved 12-20-13))).
[¶47] This construction of section 4582 is confirmed by viewing it in
conjunction with the business necessity defense established in section 4583.
Section 4583 dictates that the MHRA must be construed to permit housing
practices that are both (1) “consistent with business necessity” and (2) “not based
on” an individual’s status as a member of a protected class, including recipients of
public assistance:
Nothing in this Act may be construed to prohibit or limit the
exercise of the privilege of every person and the agent of any person
having the right to sell, rent, lease or manage a housing
accommodation to set up and enforce specifications in the selling,
renting, leasing or letting . . . of facilities . . . that are consistent with
business necessity and are not based on the race, color, sex, sexual
29
orientation, physical or mental disability, religion, country of ancestral
origin or familial status of or the receipt of public assistance payments
by any prospective or actual purchaser, lessee, tenant or occupant.
5 M.R.S. § 4583. Section 4583 creates a defense to liability pursuant to the
MHRA that is relevant only if a housing decision is “not based on” a protected
status, i.e., if the decision is not purposefully discriminatory but nonetheless has a
disparate impact on a protected class. The business necessity defense is
specifically tailored to defending against claims of disparate impact liability. See
Me. Human Rights Comm’n v. Can. Pac. Ltd., 458 A.2d 1225, 1233 n.16 (Me.
1983) (“[The business necessity defense] is thus available only to validate uniform
employment criteria having a discriminatorily disparate impact.”); Me. Human
Rights Comm’n v. City of Auburn, 408 A.2d 1253, 1264-66 (Me. 1979) (citing
Albemarle Paper Co. v. Moody, 422 U.S. 405, 425-34 (1975), and Griggs, 401
U.S. at 431, for the proposition that a plaintiff’s prima facie case of disparate
impact may be countered by a showing of business necessity). Thus, a facially
neutral housing practice that has a disparate impact on a protected group is not
discriminatory if it is “consistent with business necessity.” 5 M.R.S. § 4583.
[¶48] Any doubt as to the proper construction of sections 4582 and 4583 is
erased by the statute’s legislative history.8 The 2007 amendment to the MHRA
8
The majority concludes that 5 M.R.S. § 4582 (2007) unambiguously precludes disparate impact
liability, and accordingly excludes 5 M.R.S. § 4583 (2007)’s legislative history from its analysis. This
construction of section 4582 conflicts with the business necessity defense—a defense specifically tailored
to defend against claims of disparate impact liability—established by section 4583. At the very least,
30
that, among other things, added the “business necessity” language to section 4583
expressly states that it “amends the Maine Human Rights Act to . . . prohibit
unreasonable housing practices that have a disparate impact on the basis of . . . the
receipt of public assistance payments.” L.D. 685, Summary (123rd Legis. 2007);
P.L. 2007, ch. 243, § 4 (effective Sept. 20, 2007) (codified at 5 M.R.S. § 4583
(2012)). The Legislature’s intent to subject claims of housing discrimination based
on the receipt of public assistance payments to disparate impact analysis, and to
permit landlords to justify their practices based on a showing of business necessity,
could not be clearer.9
2. The MHRA’s Recognition of Disparate Impact Liability Does Not
Make Participation in Section 8 Mandatory
[¶49] I agree with the Court that the MHRA does not make landlords’
participation in the Section 8 housing voucher program mandatory. Nothing in the
construction of the MHRA set out above requires landlords to participate in the
Section 8 program. Rather, the statute simply prohibits landlords from
there exists ambiguity in the statute that requires consultation of the relevant legislative history. Because
the “primary purpose in statutory interpretation is to give effect to the intent of the Legislature,” Arsenault
v. Sec’y of State, 2006 ME 111, ¶ 11, 905 A.2d 285, the proper construction of the statute must recognize
that the Legislature expressly provided that the business necessity defense is available to defend against
disparate impact claims based on “the receipt of public assistance payments by any prospective or actual
purchaser, lessee, tenant or occupant.” 5 M.R.S. § 4583.
9
The Court’s assertion that the Legislature “would have effectively overruled our holding in Catir”
by creating disparate impact liability pursuant to section 4582 is incorrect. See Court’s Opinion ¶ 28. As
discussed above, our holding in Catir was sufficiently distinguishable—and cursory—that the
Legislature’s contemplation of disparate impact liability in section 4582 did not infringe upon our holding
in that case. See Catir v. Comm’r of Dep’t of Human Servs., 543 A.2d 356, 357-58 (Me. 1988).
31
discriminating, either in word or in effect, against recipients of public assistance.
The Legislature’s provision for these two forms of liability cannot be properly
understood as making participation in Section 8 mandatory.
[¶50] The concurrence, in arguing that the MHRA does not compel
participation in Section 8, places significant weight on the fact that in 2007 the
Judiciary Committee struck a proposed amendment to 5 M.R.S. § 4582 that would
have made it unlawful for landlords to refuse to rent or impose different terms of
tenancy to any recipient of public assistance “primarily because of the individual’s
status as recipient or because of any requirement of such a public assistance
program.” See L.D. 685 (123rd Legis. 2007); Comm. Amend. A to L.D. 685, No.
S-162 (123rd Legis. 2007). The legislative history is silent as to why the Judiciary
Committee decided to remove the proposed language from the enacted law, and
any number of inferences can be drawn from the Committee’s decision.10 Further,
10
It is important to note that Section 8 housing assistance is one of many “federal, state or local
assistance” programs to which former section 4582 applied. Therefore, one interpretation of the Judiciary
Committee’s decision not to adopt the proposed change to section 4582 is that it was concerned about the
consequences the change might have with respect to public assistance programs other than Section 8. The
Judiciary Committee might also have concluded that the separate provision for disparate impact liability
in L.D. 685, pursuant to section 4583, was sufficient to ameliorate concerns regarding landlords refusing
to rent to tenants because of the requirements of participating in the Section 8 program. See Letter from
Maine Human Rights Commission to Members of Joint Standing Committee on Judiciary 2 (April 5,
2007) (proposing amending section 4582 in order to “ensure that a housing provider cannot refuse to rent
or impose different terms of tenancy because of the requirements of a public assistance program”).
Finally, the Judiciary Committee might have concluded that the proposed amendment to section 4582 to
add “any requirement of such a public assistance program” was not needed because a refusal to rent or
imposition of different tenancy terms on that basis was already encompassed by the existing statutory
language, “primarily because of the individual’s status as recipient.” The letter of the Executive Director
of the Maine Human Rights Commission addressed to the Judiciary Committee that accompanied L.D.
685 suggested this very possibility. See Letter from Maine Human Rights Commission to Members of
32
this 2007 amendment to the MHRA is the very same one cited above that
demonstrates the Judiciary Committee’s desire, in no uncertain terms, to subject
unreasonable housing practices to disparate impact liability. See L.D. 685,
Summary (123rd Legis. 2007).
3. Federal Law Supports an Interpretation of Section 4582 that Creates
Disparate Impact Liability
[¶51] A construction of sections 4582 and 4583 that recognizes disparate
impact liability is also supported by federal law. “In enacting the Human Rights
Act, Maine was legislating against the background of prior federal
antidiscrimination statutes and a developing body of case law construing and
applying those statutes.” City of Auburn, 408 A.2d at 1261 (footnote omitted).
Accordingly, we look to federal case law to “provide significant guidance in the
construction of our statute.” Id. (quoting Me. Human Rights Comm’n v. Local
1361, 383 A.2d 369, 375 (Me. 1978)).
[¶52] The federal counterpart to the MHRA’s fair housing provisions is the
Fair Housing Act (FHA), 42 U.S.C.A. §§ 3601-3631 (West, Westlaw through
P.L. 113-65 (excluding P.L. 113-54) approved 12-20-13). The FHA provides that
“it shall be unlawful . . . [t]o refuse to sell or rent . . . or otherwise make
unavailable or deny, a dwelling to any person because of race, color, religion, sex,
Joint Standing Committee on Judiciary 2 (April 5, 2007) (noting that the “recurring problem [of]
landlords arguing that they do not want to do paperwork or comply with other requirements of public
assistance programs such as Section 8 . . . arguably would violate the existing language” of section 4582).
33
familial status, or national origin.” Id. § 3604(a) (emphasis added). Even though
the words “because of” can be read to suggest solely intentional discrimination,
every federal court of appeals but one has concluded that this FHA provision
creates liability for intent-neutral disparate impact. See, e.g., Mt. Holly Gardens
Citizens in Action, Inc. v. Twp. of Mt. Holly, 658 F.3d 375, 381-82 (3d Cir. 2011);
Gallagher v. Magner, 619 F.3d 823, 833-38 (8th Cir. 2010); Reinhart v. Lincoln
Cnty., 482 F.3d 1225, 1229 (10th Cir. 2007); Tsombanidis v. W. Haven Fire Dep’t,
352 F.3d 565, 573 (2d Cir. 2003); Langlois v. Abington Hous. Auth., 207 F.3d 43,
49 (1st Cir. 2000); Gamble v. City of Escondido, 104 F.3d 300, 304-05
(9th Cir. 1997); Simms v. First Gibraltar Bank, 83 F.3d 1546, 1555
(5th Cir. 1996); Smith & Lee Assocs., Inc. v. City of Taylor, 102 F.3d 781, 790 (6th
Cir. 1996); Knapp v. Eagle Prop. Mgmt. Corp., 54 F.3d 1272, 1280 (7th Cir.
1995); Jackson v. Okaloosa Cnty., 21 F.3d 1531, 1543 (11th Cir. 1994); Betsey v.
Turtle Creek Assocs., 736 F.2d 983, 986 (4th Cir. 1984). But see Greater New
Orleans Fair Hous. Action Ctr. v. U.S. Dep’t of Hous. and Urban Dev., 639 F.3d
1078, 1085 (D.C. Cir. 2011) (declining to decide whether the FHA permits
disparate impact claims as to grant administration, but assuming that it does). The
nearly unified view of the federal courts further supports the construction of
sections 4582 and 4583 that recognizes disparate impact liability in housing
discrimination. See City of Auburn, 408 A.2d at 1261.
34
C. Summary Judgment
[¶53] Because sections 4582 and 4583 recognize disparate impact liability,
it is necessary to review the grant of summary judgment in favor of Coach Lantern
on Dussault’s claim of disparate impact.
[¶54] In analyzing a claim of disparate impact, courts employ a
burden-shifting analysis similar to that employed when analyzing a claim of
disparate treatment. See City of Auburn, 408 A.2d at 1264-65 (adopting this
analysis in the employment discrimination context); see also Mountain Side
Mobile Estates P’ship, 56 F.3d at 1250-54; Huntington Branch, N.A.A.C.P. v.
Town of Huntington, 844 F.2d 926, 935-39 (2d Cir. 1988), aff’d per curiam on
other grounds, 488 U.S. 15, 18 (1988). The first step of the analysis requires the
party alleging discrimination to provide prima facie evidence that a facially neutral
practice affects one group more harshly than another. City of Auburn, 408 A.2d at
1264. If the plaintiff produces a prima facie case, the burden of production shifts
to the defendant to produce “credible evidence” of a genuine business necessity for
the challenged practice. Id. at 1264-66. If the defendant meets that burden, the
burden shifts back to the plaintiff to “show that the defendant was using his
selection device as a pretext for discrimination.” Id. at 1268 (quotation marks
omitted). At all times, the ultimate burden of persuasion rests with the plaintiff.
Id. at 1265.
 35
[¶55] Here, Dussault satisfies the first step of the analysis: Coach Lantern’s
refusal to include the HUD tenancy addendum in its leases effectively excludes
one hundred percent of Section 8 recipients from renting from Coach Lantern. See
24 C.F.R. § 982.308(b)(2) (2013) (requiring inclusion of HUD-prescribed addenda
on all leases). As we have said in the employment setting, where the “‘inexorable
zero’” exists, “the prima facie inference of discrimination becomes strong.”
City of Auburn, 408 A.2d at 1264 (quoting Int’l Bhd. of Teamsters v. United States,
431 U.S. 324, 342 n.23 (1977)). Because Dussault presented prima facie proof of
discrimination, the burden shifted to Coach Lantern to produce evidence that its
decision to not include the HUD tenancy addendum in its leases was justified by
“credible evidence” of business necessity. Id. at 1265. This presents the question
of what constitutes a “business necessity” pursuant to section 4583.
[¶56] The idea that a business necessity can justify a practice having a
disparate impact on a protected class originated in the context of federal
employment discrimination law. See Griggs, 401 U.S. at 431. Federal courts have
developed definitions of “business necessity” that inform the meaning of the term
within the context of housing discrimination law. See, e.g., Mountain Side Mobile
Estates P’ship, 56 F.3d at 1254. Similarly, our employment discrimination case
law provides guidance as to what should constitute a “business necessity” for
36
purposes of section 4583.11 In the employment discrimination context, we have
interpreted “business necessity” to require, among other things, that an
employment practice be “‘necessary to safe and efficient job performance,’” and
not be done out of “mere business convenience.” City of Auburn, 408 A.2d at
1265 (quoting Dothard v. Rawlinson, 433 U.S. 321, 331 n.14 (1977)). In other
words, the challenged practice must be shown by “credible evidence,” id., to be
necessary to achieve a lawful and substantial nondiscriminatory interest of the
defendant. This approach is consistent with that taken in the federal rule recently
adopted to implement the FHA’s discriminatory effects standard. See
Implementation of the Fair Housing Act’s Discriminatory Effects Standard, 78
Fed. Reg. 11,460, 11,482 (Feb. 15, 2013) (to be codified at 24 C.F.R. pt. 100).
Applying this approach to section 4583, a business necessity is established when
the challenged housing practice is not based on a protected status, and credible
evidence demonstrates that the practice is necessary to achieve a “substantial,
legitimate, nondiscriminatory interest” of the defendant. Id. at 11,460.
11
At least one commentator has argued that although the definitions of “business necessity” created in
employment law tend to inform the definitions adopted in housing law, housing law should apply a
stricter standard. See Lindsey E. Sacher, Note, Through the Looking Glass and Beyond: The Future of
Disparate Impact Doctrine Under Title VIII, 61 Case W. Res. L. Rev. 603, 636 (2010) (“[T]he
differences between housing and employment suggest that given the limited number of legitimate
justifications for denying housing to a qualified applicant, [housing discrimination] defendants should
bear a higher burden than [employment discrimination defendants] when seeking to rebut a prima facie
case of disparate impact.”).
37
[¶57] Here, Coach Lantern’s statement of material facts listed nine
requirements of the HUD tenancy addendum that it finds objectionable. It then
asserted, in paragraph 25, that “Coach Lantern is unwilling to attach the [Section 8]
Addendum to any of its leases because of the number of burdensome conditions
contained therein and the fact that the Addendum alters a landlord’s rights under
state law.” Although Coach Lantern summarized the conditions of the addendum
that it objects to, it failed to assert facts from which a fact-finder could determine
that the conditions would interfere with any substantial, legitimate, and
nondiscriminatory interest associated with its business. Coach Lantern did not
identify which addendum provisions differed from its own lease provisions, and it
further failed to include a copy of its standard lease in the summary judgment
record. Because of this, it is impossible to identify the actual differences between
Coach Lantern’s lease agreement and the Section 8 addendum. Similarly, Coach
Lantern failed to identify which of its rights pursuant to state law would be altered
if it were bound by a Section 8 addendum and the extent to which the alteration of
those rights would interfere with the safe and efficient operation of its business.
[¶58] Contrary to the Court’s approach, whether a housing practice qualifies
as a business necessity is a fact-intensive issue that the law requires the landlord to
prove by credible evidence, not simply allege. Where the proffered justification
for a landlord’s housing practice (here, Coach Lantern’s assertion that provisions
38
of the HUD tenancy addendum are unduly onerous) applies exclusively and
completely to a class of individuals who share a status protected by the MHRA
(here, Dussault and all other recipients of Section 8 housing subsidies), only a
fact-finder can determine whether the housing practice in fact qualifies as a
business necessity and is not based on the individuals’ protected status. Coach
Lantern’s statement of material facts does no more than assert that it objects to
certain requirements of the addendum without offering any information from
which a fact-finder could determine whether Coach Lantern’s objection is based on
“mere business convenience” or an actual business necessity. One can only
speculate, for example, whether Coach Lantern will incur increased operating
expenses if it adopts the addendum, and, if so, whether the increased expenses will
be sufficiently substantial as to jeopardize the “safe and efficient” operation of its
rental business. City of Auburn, 408 A.2d at 1265 (quotation marks omitted).
[¶59] Accordingly, Coach Lantern did not meet its burden of showing that
an actual business necessity justified its decision to refuse to include Section 8
addenda in its lease agreements. Because Dussault made an unrebutted prima facie
case of disparate impact discrimination, her motion for summary judgment should
have been granted and Coach Lantern’s motion for summary judgment should have
been denied. See Mountain Side Mobile Estates P’ship, 56 F.3d at 1254.
39
C. Conclusion
[¶60] With certain exceptions not applicable here, Maine landlords are
required to comply with the Maine Human Rights Act. The Act does not compel
landlords to participate in the Section 8 housing voucher program so long as the
landlord’s decision does not intentionally discriminate against, or result in a
disparate impact on, recipients of public assistance. If a landlord’s refusal to rent
to recipients of public assistance has a disparate impact on such individuals, the
landlord must have a legitimate, non-discriminatory reason—“business
necessity”—for doing so. 5 M.R.S. § 4583. Because Dussault made an unrebutted
prima facie case of discrimination based on Coach Lantern’s refusal to rent to her,
I would vacate the judgment and remand for entry of a judgment in favor of
Dussault and for a determination of her remedies.
On the briefs:
Patricia M. Ender, Esq., and Katherine McGovern, Esq., Pine Tree Legal
Assistance, Inc., Augusta and Portland, for appellant Nicole Dussault
Margaret Coughlin LePage, Esq., and Katharine I. Rand, Esq., Pierce
Atwood, LLP, Portland, for appellees RRE Coach Lantern Holdings, LLC,
and Resource Real Estate Management, Inc.
John P. Gause, Esq., Maine Human Rights Commission, Augusta, for
amicus curiae Maine Human Rights Commission
40
Justin W. Andrus, Esq., and Neil S. Shankman, Esq., Shankman &
Associates, Topsham, for amicus curiae Maine Apartment Owners and
Managers Association
Mark C. Joyce, Esq., Disability Rights Center of Maine, Augusta, for amicus
curiae Disability Rights Center of Maine
John J. McDermott, Esq., National Apartment Association, Arlington,
Virginia, and David J. Van Baars, Esq., Windham, for amici curiae National
Apartment Association and Maine Apartment Association
J. Danian Ortiz, Esq., Patrick Bushell, Law Student, and Ian Friel, Law
Student, The John Marshall Law School Fair Housing Center & Clinic,
Chicago, Illinois, and David A. Lourie, Esq., Portland, for amicus curiae The
John Marshall Law School Fair Housing Center & Clinic
Robert Edmond Mittel, Esq., MittelAsen LLC, and Danielle Pelfrey Duryea,
Esq., James P. Dowden, Esq., and Thomas R. Sutcliffe, Esq., Ropes & Gray
LLP, Boston, Massachusetts, for amici curiae National Center for Medical
Legal Partnership and Lawyers’ Committee for Civil Rights and Economic
Justice
At oral argument:
Patricia M. Ender, Esq., for appellant Nicole Dussault
Katharine I. Rand, Esq., for appellees RRE Coach Lantern Holdings, LLC,
and Resource Real Estate Management, Inc
Cumberland County Superior Court docket number CV-2010-347
FOR CLERK REFERENCE ONLY