The SJC and Section 8


Well, both the Maine SJC and I have been as busy as beavers lately.  Things have calmed down enough for me, however, to be back at my blogging post and start talking about some of the decisions that have come down recently of hefty import.

The first I’ll chat about is  Dussault v. RRE Coach Lantern Holdings, LLC, 2014 ME 8.  This was decided on January 23, 2014, having been argued in May 2012.   Kudos to PA’s own Meg LePage and Katy Rand for prevailing. 

Before we talk about substance, you are looking at the dates and thinking "yet another typo from Cathy."  No, it's not.  So now you are saying, “golly crumbcakes, why so long?”  Well, all seven Justices heard the appeal.  The majority opinion is by Justice Silver, joined by CJ Saufley, Alexander and Mead; Justice Levy drafted a dissent joined by Justices Gorman and Jabar, and Justice Alexander wrote a concurrence.  It adds up to about 40 pages, and as we get into the merits, you’ll see that the policy issues are pretty significant.  So in the world of completely unsubstantiated tea-leaf reading, with this kind of unusual for Maine 4:3 split, there were probably a lot of drafts floating around.  In some jurisdictions, this kind of delay between the time a matter is argued and decided is routine.  This case is a pretty rare exception to the SJC rule of swift resolution, and those of us who practice in Maine should be happy about the Court's generally prompt action in the big scheme of things.      

Ok, now to the merits. 

If a landlord chooses to accept a Section 8 Housing tenant, federal regulations require it to attach a HUD Tenancy Addendum to its standard lease.  That Addendum contains a number of terms not in a standard lease.  The decision identifies some of these terms at Paragraph 7 of the majority opinion.  The defendants offered to rent to the plaintiff on the same terms it rents to other tenants, but declined to attach this Addendum to its lease. 

The plaintiff alleged that the defendants’ policy of declining to include the Addendum provisions discriminated against her on the basis of status as a public assistance recipient, in violation of the Maine Human Rights Act, 5 M.R.S. ss 4551-4634.  She advanced two theories:  disparate treatment and disparate impact.   

The majority agreed with the defendants that the plaintiff couldn’t show disparate treatment because she was undisputedly offered the same lease offered to everybody else.  The dissent seems to agree with this conclusion.  The disagreement among the justices lies in their analyses whether the defendants’ failure to attach the Addendum could expose them to disparate impact liability, because insistence on use of a standard lease necessarily disparately impacts Section 8 recipients, who cannot rent on those terms.

The majority ruled that disparate impact liability does not apply under the MHRA as to discrimination against recipients of public assistance (as opposed to, e.g., sex, race, disability, etc.).  The majority based its conclusion on its reading of the language of the MHRA.  (Paragraphs 14, 26).  In so concluding, the majority noted that it would not “read into the MHRA a mandate that landlords accepts terms of tenancy that are otherwise required only if the landlord chooses to participate in a voluntary federal program.”  (Paragraphs 18.)  The majority further observed that the Legislature had considered a bill that would have required landlords to participate in the voucher program, but had not to date made the voluntary program mandatory.  (Paragraph 19.)

The dissent concluded that legislative history of the provision in the MHRA adding a business necessity defense reflecteda legislative intent to provide for disparate impact liability in housing cases, including in cases involving recipients of public assistance.  The dissent would not have held Section 8 participation was mandatory per se, but would have required landlords to prove this business necessity defense.

The majority, in response to this business necessity test position said, “[f]or many of Maine’s small or mid-sized landlords, the expense and uncertainty of litigation simply may not be an option.”  (Paragraph 28.)  If the MHRA were read as the dissent proposed, these smaller landlords who wished to avoid litigation would, because of these practicalities, have to participate in this federal program that was never supposed to be mandatory. 

Justice Alexander wrote a concurrence to note that legislative history supported the conclusion that the Legislature did not want to impose “the heavy cost of litigation to demonstrate ‘business necessity’ to avoid contractual mandates” (paragraph 31), noting that the MHRC had  unsuccessfully lobbied for a change in the MHRA a few years ago that would have made it explicit that landlords could not refuse to rent to recipients of public assistance because of the burdens associated with the program. 

Aside from answering a significant question in the world of landlord-tenant MHRA law, the decision – read as a whole, with all the opinions – has useful discussions of how to read statutory text and the role of legislative history under different scenarios.  It's also an educational example of how the different Justices weigh policy and practicalities with statutory text and legislative history.    

Next up – we'll get our feet wet (or will we?)