Property Law Developments—Joseph William Singer

Several lawsuits have been in progress arguing that MERS violated state recording statutes by not recording mortgage assignments and thus cheating recording offices out of fees they otherwise would have earned. Interpreting Illinois law, the Seventh Circuit rejected that claim as have other courts that addressed the issue. Union County v. MERSCORP, Inc., 2013 WL 6017394 (7th Cir. 2013) (applying Ill. law). The court explained that Illinois law agrees with almost all other states in providing a voluntary recording system that is intended to protect those who record; that system does not require property transactions to be recorded for them to be valid. It merely protects bona fide purchasers from prior claims against which they had no notice.

A federal district court has upheld Google’s library book project as an authorized fair use under the federal Copyright Act, 17 U.S.C. §101 et esq., Authors Guild, Inc. v. Google, Inc., 2013 WL 6017130 (S.D.N.Y. 2013). The court upheld the power of Google to scan copyrighted books held by libraries and to give those libraries digital copies of those scans. It also upheld Google’s power to make the text of those books searchable so that researchers could view snippets of those books and could search the books for particular phrases, words or concepts. The court ruled both practices to constitute a fair use, 17 U.S.C. §107. In determining that the ability to search the digital copies and to view snippets was a fair use, the court found that the use was transformative, did not supplant or supersede the originals, and was not designed to make a profit.

The Supreme Court has twice in recent years accepted certiorari in cases to decide whether disparate impact claims are available under the Fair Housing Act. Both cases settled before the Supreme Court could determine the issue. The most recent was Mt. Holly Gardens Citizens in Action, Inc. v. Twp. of Mt. Holly, 658 F.3d 375 (3d Cir. 2011). The prior case was Gallagher v. Magner, 619 F.3d 823 (8th Cir. 2010). Another lawsuit is in process called Am. Ins. Ass’n v. U.S. Dep’t of Hous. & Urban Dev. (D.D.C., filed 06.26.13),  brought by the insurance industry to challenge the disparate impact regulations promulgated this year by the Department of Housing and Urban Development (HUD). read article Those regulations define when disparate impact claims are available and are consistent with the general outlines of the doctrine as it been developed by all the Circuit courts.  24 C.F.R. § 100.500(a)–(b).

In Houston v. Marod Supermarkets, 2013 WL 5859575 (11th Cir. 2013), the Eleventh Circuit ruled that testers have standing to bring suits claiming violation of the public accommodation provisions of the Americans with Disabilities Act. The mere fact that one enters property for the purpose of testing compliance with the ADA rather than to purchase products does not deprive the plaintiff of standing to sue for violation of the law. In an odd coda, however, the court noted that injunctive relief was only appropriate if the plaintiff could show injury from the store’s failure to comply with access requirements. The fact that he claimed he would return to the store in the future and that it was located 30 miles from his house was sufficient to show “injury in fact” and give him standing to seek injunctive relief.

After passage of same-sex marriage laws in both Hawai`i and Illinois and constitutional litigation in New Jersey, seventeen (17) jurisdictions in the US recognize and allow same-sex marriage. The list includes: California, Connecticut, Delaware, District of Columbia, Hawai`i, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New York, Rhode Island, Vermont, Washington.

The Sixth Circuit has held that §3617 of the Fair Housing Act, 42 U.S.C. §3601 et seq., prohibits conduct intended to encourage residents to move even if they are not denied housing or induced to move. Hidden Village, LLC v. City of Lakewood, 2013 WL 5811642 (6th Cir. 2013). The basic provisions of the FHA (embodied in §3604) prohibit denying housing for discriminatory reasons, providing unequal and discriminatory terms and conditions for housing, and expressing an invidious preference for buyers or renters of a particular race, sex, etc. Section 3617 prohibits coercion, intimidation, threats, or any interference with any person’s right to exercise the fair housing rights protected by 3604. Federal courts have been confused and divided over whether §3617 provides a remedy when there is no underlying §3604 violation.

In Hidden Village, municipal officials were unhappy with a religious youth service that helps young people released from foster care or juvenile detention enter society. It planned to house its clients in apartments leased from a private landlord. Following a zoning controversy over whether the use was a lawful “residential” use or a prohibited “institutional” use, municipal officials engaged in a campaign to make life difficult for the charity’s beneficiaries by issuing numerous citations for minor offenses and conducting a warrantless search of the housing premises.

The Sixth Circuit acknowledged that there had been uncertainty about the meaning of §3617 but held that it prohibits conduct intended to interfere with someone’s ability to obtain or enjoy housing whether or not there is an independent violation of one of the terms of §3604. The Court explained:

“[D]efendants argue that they may not be charged with violating § 3617 unless they separately violated at least one of the provisions in §§ 3603–3606. We disagree. Section 3617 nowhere says that it comes into play only when a violation of one of these other sections has also occurred. An example confirms the freestanding nature of some § 3617 claims. Suppose Alice says to Bob, a prospective home buyer, “If a seller ever discriminates against you because of your race, sue him!” Eve, a racist eavesdropper, becomes enraged upon hearing this conversation and threatens to assault Alice. At this point, Eve has violated § 3617, regardless of whether she discriminated against Bob or otherwise violated the fair housing rights secured by §§ 3603–3606. Eve has “threaten[ed] … [a] person,” namely Alice. And this threat was “on account of [Alice’s] having aided or encouraged any other person in the exercise or enjoyment of [a fair housing right].” Eve threatened Alice because Alice had encouraged Bob to protect himself against discrimination relating to housing. The statute requires no more.”

The Illinois House has passed a marriage equality bill that is virtually certain to become law in some form in the near future given the support in the Senate and by the Governor. Once that happens, 15 states will have same-sex marriage along with the District of Columbia. The outcome is more uncertain in Hawai`i but the legislature may vote in favor of a same-sex marriage bill in the next days.

Once again a federal court has held that the Civil Rights Act of 1866 (as amended in 1991) provides no relief to a store customer who was subjected to racial insults while trying to buy merchandise. The First Circuit held, in Hammond v. Kmart Corp., 2013 WL 5763267 (1st Cir. 2013), that the “right to contract” protected by 42 U.S.C. §1981 only protects the ability to enter a contract; it provides no relief for racially disparate treatment when one is in a store. Because the customer was able to complete the transaction (laying away merchandise), the store did not prevent her from “contracting.” Being subjected to “racial slurs and insults” as she was engaged in the transaction did not deter her from completing the transaction.

The ruling oddly protects those who are deterred from completing the sale but not those who insist on going through with it despite the discriminatory treatment. It also fails to consider the wording of §1982 which protects the “right to purchase personal property.” Nor does it comprehend that treatment while in the store is part of the contractual process; contracting does not happen at a discrete magic moment.

The federal public accommodations law, 42 U.S.C. § 2000a, does not cover retail stores so with no §1981 remedy, the plaintiff found herself wholly unprotected by federal statutes. The plaintiff did make a state common law claim of infliction of emotional distress, although it was not clear why she did not also make a claim under the state public accommodations statute, Mass. Gen. Laws ch. 272, §98 which provides: “Whoever makes any distinction, discrimination, or restriction on account of race…relative to the admission of any person to, or his treatment in any place of public accommodation…shall be liable to any person aggrieved thereby…”

The Cheyenne and Arapaho Tribes have allowed several same-sex couples to marry under tribal law. The tribal code is neutral with respect to the gender of persons who can get married and merely require one of the parties to be a tribal citizen. read article