Jul 6, 2009

Ho. v. HUD

Chak Man Fung was the owner of an apartment that rented to three individuals one of them was Jennifer Ho. Ho acted as Ho’s agent when choosing renters. When Diana Lin decided to move out before her lease was up she found Meki Brachen to move in. Lin said she would not rent to blacks, additional Fung would also not allow Brachen to move in and barred any attempts. Ho and Meki Brachen filed racial discrimination charges against Fung and Lin.
Several notifications by first class mail and Fed Ex were sent out and neither defendant answered. Finally after a fourth notification, Ho, but not Fung showed up for a hearing on remedies. Ho appeared without counsel and asked for a postponement because she realized that she needed counsel but her attorney was unavailable for the date. Additionally she explained that she had not wanted to read the legal notices and had just opened them days before the hearing. The ALJ denied the motion for a continuance, observing that Ho had only herself to blame for not opening the letters earlier and postponement would waste the time of assembled witnesses. Compensatory damages for mental distress and financial injury were awarded to Bracken for $49,284 and Lin for $25,345.
Ho claimed that that the agency violated the due process clause of the Fifth Amendment by not providing her with adequate notice of the proceedings and not postponing the hearing when she eventually opened the letters. However, the Constitution does not require that an effort to give notice succeed. See, e.g., Dusenbery v. United States, 534 U.S. 161 (2002). If it did, then people could evade knowledge, and avoid responsibility for their conduct, by burning notices on receipt—or just leaving them unopened, as Ho did.
Additionally Ho was ordered to pay the maximum civil penalty of $11,000 in additional compensatory damages. The ALJ concluded that the maximum penalty is appropriate because Ho not only set out to discriminate but also was truculent after being told of the conduct’s illegality. The ALJ deemed Ho’s decision to barricade the door against Bracken an egregious form of discrimination. Ho claimed that the penalty was egregious because they did not look at her finances, one of six factors the agency finds relevant. The agency was never given this information because a person who fails to supply information forfeits any complaint that the decisionmaker was uninformed on some issue.
Fung claimed that the ALJ had to prove a prima facie case of liability for discrimination. However Fung misunderstands how HUD handles defaults. A regulation provides that “failure to file an answer to the complaint shall be deemed an admission of all matters of fact recited therein. The ALJ concluded that the admitted facts do show liability. Fung apparently thinks that a prima facie case of liability depends on live testimony. Not at all; admissions are better evidence than testimony, because admissions are incontestable.
Fung additionally claims that he is entitled to discriminate by 42 U.S.C. §3603(b)(1). However that caption is an exemption which makes it an affirmative defense which must be timely asserted unusual in the answer and certainly at the trial. Fung did not answer or participate in the trial waiving this right. Addionally, Fung rented it to three unrelated persons; that’s not a single family by anyone’s definition. Then there is the fact that Ho acted as Fung’s agent, something that Fung admitted by failing to answer the complaint, which alleged that an agency relation existed.

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