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WBK Industry News - Litigation Developments

First Circuit Upholds HUD’s Final Order Finding Condominium Association’s “No Pet” Rule Violated the Fair Housing Act

The First Circuit recently held that an “emotional support dog” staying with a man in a condominium unit was a reasonable accommodation under the Fair Housing Act (“FHA”), despite the condominium association’s “no pet” policy.  In doing so, the First Circuit agreed with HUD that “substantial evidence” showed the man’s emotional support dog ameliorated symptoms of his anxiety disorder and chronic depression.  Notably, the court also set forth a “nuanced” but heightened standard of review to apply when the Secretary of HUD rejects the factual findings of an administrative law judge (“ALJ”).

In Castillo Condominium Association v. United States Department of Housing and Urban Development, Office of the Secretary, On Behalf of Carlo Gimenez Bianco, a home owner challenged the condominium association’s “no pet” rule, claiming he was forced to sell his dwelling after the association refused to provide a reasonable accommodation under the Fair Housing Act.  The HUD ALJ originally rejected the man’s claim, finding the man failed to prove he had a mental impairment warranting a reasonable accommodation in the form of a companion animal.  Under HUD’s regulatory regime, the ALJ’s decision was able to be appealed to the Secretary of HUD.  On appeal the Secretary reversed the ALJ, finding the ALJ had not properly considered certain evidence, such as testimony from the man’s psychiatrist.

The association then appealed the Secretary’s decision to the First Circuit under the Administrative Procedure’s Act, which allows a reviewing court to set aside final agency orders that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Notably however, the reviewing court is bound by an agency’s factual findings “as long as they are supported by substantial evidence in the record as a whole.”  Thus, the ultimate legal question before the First Circuit was whether “substantial evidence” supported the Secretary’s evidentiary findings even though the ALJ was the initial decision maker and the one who actually saw and heard the witnesses.

To resolve this paradigm, the First Circuit adopted a two-part “nuanced” standard of review.  First, when the Secretary rejects the factual findings of an ALJ, a reviewing court must first make certain that the Secretary has adequately articulated his reasons for overturning the ALJ’s findings. Second, the court must ask whether those articulated reasons derive adequate support from the administrative record.  Applying this standard, the First Circuit concluded that substantial evidence supported the Secretary’s finding that the association’s failure to provide a reasonable accommodation constituted discrimination against the condo owner, in violation of the Fair Housing Act.

Despite the court’s pronouncement that a “heightened” standard should be applied when reviewing record evidence in such a case, the court found in conclusory fashion the FHA’s “reasonable accommodation” element was satisfied.  The court stated that “substantial evidence” supported a finding that the condo owner told the association “that he would need a reasonable accommodation (an exception to the “no pets” bylaw so that he could keep a dog in his condominium unit) in order to allow him an equal opportunity to use and enjoy his abode.”  However, notably absent from the opinion was any discussion of the merits of the association’s no pet policy, and whether or not the apparent need for an “emotional support dog” should outweigh such a policy.

The Opinion may be found here.

WBK regularly assists clients located throughout the country with fair housing act complaint and compliance.