White, Shelia v. HUD

In the

United States Court of Appeals

For the Seventh Circuit

____________

No. 05-1252

SHEILA WHITE,

Petitioner,

v.

UNITED STATES DEPARTMENT OF

HOUSING AND URBAN DEVELOPMENT,

Respondent.

____________

Petition for Review of an Order of the

Department of Housing & Urban Development.

No. 05-99-0045-8

____________

ARGUED JANUARY 5, 2006—DECIDED FEBRUARY 2, 2007

____________

Before FLAUM, ROVNER, and WILLIAMS, Circuit Judges.

WILLIAMS, Circuit Judge. Sheila White filed a com-

plaint with the United States Department of Housing and

Urban Development (“HUD”), claiming that property

owner Gertie Wooten violated the Fair Housing Act

(“FHA”), 42 U.S.C. § 3604(c). At issue is whether Wooten’s

comments to White indicated a preference against renting

to White on the basis of “familial status,” which under

the FHA means at least one minor child living with a

parent or guardian. After holding a hearing at which

Wooten did not appear, the administrative law judge

(“ALJ”) concluded that White failed to prove Wooten’s

statements indicated a preference against renting on the

2 No. 05-1252

basis of White’s familial status. The ALJ also refused to

allow White to amend her complaint after the close of the

evidentiary hearing to include new allegations that, White

contends, first came to light at the hearing. We agree

with the ALJ’s decision to deny White’s motion to amend

her complaint. However, we disagree that White failed

to prove that Wooten discriminated against her on the

basis of her familial status. We therefore reverse the

ALJ’s decision as to White’s § 3604(c) claim.

I. BACKGROUND

White filed an administrative complaint with the

Secretary of HUD, alleging that Wooten violated 42 U.S.C.

§ 3604(c)1 by engaging in discriminatory conduct when

she told White that she would not rent an apartment to

her because she was not married and had two children.

The Secretary of HUD issued a Determination of Reason-

able Cause and Charge of Discrimination in April 2001,

alleging that Wooten discriminated against White because

of her familial status. Shortly thereafter, the ALJ granted

White’s motion to intervene on her own behalf. In July

2003, after prolonged discovery, White filed a motion she

entitled a “motion for summary judgment.” The ALJ

subsequently scheduled a hearing for February 4, 2004.

Despite being duly notified about the hearing, neither

Wooten nor anyone on her behalf appeared. The ALJ,

acting on HUD’s request, found Wooten in default, and

1

White’s original administrative complaint alleged that Wooten

violated 42 U.S.C. § 3604(a) as well. Section 3604(a) makes it

illegal to “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 . . . familial status.” White eventually withdrew

her § 3604(a) claim; therefore, the ALJ addressed only White’s

§ 3604(c) claim.

No. 05-1252 3

directed White to present a prima facie case that Wooten

had violated 42 U.S.C. § 3604(c). Three witnesses testified

at the hearing: White; White’s grandfather, Robert Hous-

ton; and a family friend, Marsha Johnson.

White testified that, in 1998, she was living with Hous-

ton and looking for an apartment for herself and her two

children (then ages five and nine) when she saw a news-

paper advertisement for a two bedroom apartment for

rent in Harvey, Illinois. On August 21, White called the

telephone number listed in the notice to inquire about the

apartment. White claimed that she spoke to an elderly

woman with “broken” speech who stated that she would

not rent to White because White had children and was not

married. White also stated that after the conversation

ended she wrote down detailed notes recounting the

conversation. The notes read:

Me I was calling about the apartment in Harvey.

Her How many in your family?

Me 3. 1 adult & 2 small children

her Are you married?

.......

Me No

her Well she can’t rent to you because you have

two children and no husband and this girl

has to pay her mortgage.

Me What do that have to do with me. That’s a

form of discrimination.

her I don’t know you. I would have to see you,

met you—that’s not discrimination this girl

has to pay her mortgage and you don’t have

a husband and you have children.

Me but you don’t know me how can you judge me

by a phone call?

4 No. 05-1252

her You are not married this . . . . .

Me thank you very much, but I’m not interested.

I hung up.

On September 17, White noticed another newspaper

advertisement for the same apartment that listed the

same telephone number. She called to inquire about the

apartment, but unlike before, White stated that she was

married rather than single. According to White, she spoke

with the same “elderly lady with broken English” with

whom she spoke in the first telephone conversation. This

time the woman identified herself as Gertie Wooten. White

also stated that, as with the previous phone call, she

wrote down detailed notes that recounted her conversa-

tion with Wooten. Those notes state:

Me. I called about the apartment

her how many in your family

me 3 .......

her 3 what are you married?

M Yes

her how many kids?

Me 1

her do your husband work

.......

Me Yes with CTA

her Do you work?

Me Yes with Blue Cross

her Well the apartment has a large dining room

kit two bedrooms. Its on the 1st floor.

.......

me how is the neighbor

No. 05-1252 5

her wait A—minute let me finish

her The house has double locks on the gate front

and back it’s a very nice house. The area is

what you make it. You are going to have bad

people everywhere you go. If you are

.......

thinking out selling drugs or using drugs

don’t come here. If you have more people in

the apartment than whats on the lease you

will be escorted by the police. If you think

out selling drugs or using drugs this place is

not for you. My grandson stay with me and

he has not brought anybody here. I have 5

daughter and two sons died. One died of

cancer the other dropped dead. I have one

daughter in California One just steped down

from a supervisory in the lab at Cook County

Hospital. But you can come by at 12:00 Sat.

.......

Me Whats your name.

her Gertie Wooten

.......

White stated that after this second telephone conver-

sation she filed a complaint with HUD; that complaint

forms the basis of this case. In November 1998, White also

filed a complaint with the Cook County Commission on

Human Rights, alleging that she was denied the opportu-

nity to rent an apartment on the basis of her “marital

status” and “parental status.”2

2

White testified that, although the Cook County Commission

entered a default judgment against Wooten for failing to ap-

(continued...)

6 No. 05-1252

White’s grandfather, Houston, testified that he received

a telephone call from an unidentified woman asking to

speak to White shortly after White filed her Cook County

complaint. When Houston replied that White was not

home, the caller began asking a number of questions

about White because she had called about renting an

apartment. The following day, the same unidentified

woman called Houston again asking for White. When

Houston again replied that White was not home, the

caller began shouting and swearing. Houston unsuccess-

fully attempted to calm the caller, and then hung up the

phone; he informed White of the telephone calls when she

returned home.

Family friend Marsha Johnson’s testimony corroborated

Houston’s version of events surrounding the telephone

calls. She stated that she was with Houston when he

received the two calls. She added, however, that she saw

the name “Wooten, G” displayed on the caller ID box after

each call. She also stated that she was present when

Houston informed White of the telephone calls.

Before the hearing concluded, White orally requested to

amend the pleadings to include a harassment charge

under 42 U.S.C. § 3617, based on Houston’s and Johnson’s

testimony that Wooten twice telephoned Houston in

response to White’s housing discrimination claims. White

acknowledged that it was unlikely that Wooten was even

aware of the HUD complaint at the time of the harassing

telephone calls because it had not yet been processed

for “jurisdictional reasons.” White did state, however, that

she believed it was very likely that Wooten obtained

2

(...continued)

pear or respond to the charge, the Commission nevertheless

dismissed the charge because White did not appear for the

required evidentiary hearing.

No. 05-1252 7

Houston’s telephone number from the Cook County com-

plaint that was served on her. To supplement her re-

quest, White filed a “Motion to Amend Complainant-

Intervenor’s Complaint to Conform To The Proof Adduced

at Trial” (“Motion to Amend”), alleging that Wooten

violated § 3617.

On December 3, 2004, in a written decision, the ALJ

concluded White failed to show by a preponderance of

evidence that Wooten violated § 3604(c). The ALJ first

determined that White did not prove that she even spoke

with Wooten during the first telephone call, citing the fact

that the speaker consistently spoke in the third person,

such as when she stated, “[T]his girl has to pay her

mortgage and you don’t have a husband and you have

children.” And, the ALJ continued, even if White could

prove that she spoke with Wooten, she did not prove that

the telephone call violated § 3604(c) because an “ordinary

listener” would not have believed that the speaker dis-

criminated against her because of familial status; rather,

the speaker indicated a concern with financial matters.

The ALJ also denied White’s Motion to Amend to add the

harassment claim under 42 U.S.C. § 3617. He stated that

amending the complaint would be prejudicial to Wooten

because she was not given notice of the new allegation. The

ALJ further noted that White knew or should have known

about the allegedly harassing telephone calls that Houston

received since the beginning of the litigation and, there-

fore, she should have amended her complaint earlier. The

ALJ also denied the motion for substantive reasons,

concluding that there was nothing improper about the first

telephone call because the caller asked only for informa-

tion, and that the second telephone call did not violate

§ 3617 because: (1) the conduct was not sufficiently “egre-

gious” to constitute intimidation, threats, or interference

within the meaning of the FHA; (2) Houston was an

“uninvolved third party” who did not exercise, aid, or

8 No. 05-1252

encourage White in filing her discrimination claim; and (3)

there was no evidence that the telephone calls were made

“with a discriminatory motive or purpose.”

The HUD Secretary did not modify or reverse the ALJ’s

decision, and it became a Final Agency Order on January

3, 2005. See 42 U.S.C. § 3612(h)(1).

II. ANALYSIS

White filed this petition for review, challenging the ALJ’s

decision on two grounds. First, White claims that the ALJ

erred by finding that Wooten did not discriminate against

her because of her familial status, as proscribed by 42

U.S.C. § 3604(c). White also claims that the ALJ erred by

denying her motion to amend her pleadings to include a

claim of harassment under 42 U.S.C. § 3617.

A. White Established Her Claim for Discrimination

Based on Familial Status.

White argues that the ALJ’s finding that Wooten did not

violate 42 U.S.C. § 3604(c) was erroneous because (1)

there was sufficient evidence that the first telephone call

could be attributed to Wooten; and (2) Wooten’s state-

ments evince discrimination based on White’s familial

status. We deferentially review the Secretary’s final

determination as to § 3604(c) claims, and we will reverse

only if the determination is legally or procedurally un-

sound, or is “unsupported by substantial evidence.” See 5

U.S.C. §§ 706(2)(A), (D)-(E); Jancik v. Dep’t of Hous. &

Urban Dev., 44 F.3d 553, 555 (7th Cir. 1995). “Substantial

evidence” is “such relevant evidence as a reasonable

mind might accept as adequate to support a conclusion.”

See Jancik, 44 F.3d at 555-56.

No. 05-1252 9

Section 3604(c) makes it illegal to “make, print, or

publish, or cause to be made, printed, or published any

notice, statement, or advertisement, with respect to the

sale or rental of a dwelling that indicates any preference,

limitation, or discrimination based on race, color, religion,

sex, handicap, familial status, or national origin, or an

intention to make any such preference, limitation, or

discrimination.” 42 U.S.C. § 3604(c); see City of Edmonds

v. Oxford House, Inc., 514 U.S. 725, 728 n.1 (1995) (noting

that in 1988, Congress extended the FHA to proscribe

“ ‘familial status’ discrimination, i.e., discrimination

against parents or other custodial persons domiciled with

children under the age of 18”). As a result, White needed

to present evidence that: (1) Wooten made a statement;

(2) the statement was made with respect to the sale or

rental of a dwelling; and (3) the statement indicated a

preference, limitation, or discrimination against her on

the basis of her status as a parent living with minor

children. See 42 U.S.C. § 3604(c). The parties do not

dispute that the statements were made in connection

with the sale or rental of a dwelling. See 24 C.F.R.

§ 100.75(b) (2006) (prohibitions in § 3604(c) extend to

oral statements by person engaged in sale or rental of

dwelling).

At issue first is whether Wooten was the person to whom

White spoke during the August 21 telephone call. The

respondent argues that we should adopt the ALJ’s finding

that the statements in the call could not be attributed to

Wooten. In support of his finding, the ALJ had reasoned

that the speaker in the August 21 call made reference to

another person who needed to pay the mortgage, and,

therefore, the speaker could not have been Wooten herself.

We, however, conclude that the uncontested evidence

presented by White at the hearing demonstrates that she

spoke with Wooten on August 21. White testified that

she called the same telephone number on both August 21

10 No. 05-1252

and September 17. She stated that the woman with whom

she spoke during the first telephone conversation was an

“elderly woman” who spoke “broken English.” After she

dialed the same telephone number on September 17, White

recognized the woman who answered the phone as the

same person with whom she had spoken nearly a month

earlier. This same person identified herself as Wooten

later in the call. As Wooten did not appear at the hearing,

White’s testimony that she spoke with the same person

on both occasions was unrefuted. There is no evidence in

the record, for example, that Wooten lived with another

person at that time who might have spoken to White.

Moreover, when White’s counsel expressed her intent to

call a government investigator at the hearing to testify

that Wooten admitted making the statements in the

telephone calls, the ALJ asked whether “the only cloud

that the investigator would have dissipated is who made

the two statements on the phone to Sheila White.” After

receiving an affirmative answer, the ALJ responded, “she

admitted to them so we’ll not have that dep.” HUD’s

attorney at the hearing then stated, “Gertie [Wooten]

admitted, yes, being the voice on the other end of the

phone line when Sheila called her.”

Moreover, the testimony to which the ALJ pointed does

not contradict White’s uncontested testimony that she

spoke with the same person during both telephone calls.

The ALJ reasoned that because the speaker in the first

call made several references to another person who needed

to pay the mortgage, the speaker could not have been

Wooten. Although it is true that White’s notes reflect that

Wooten stated, “this girl has to pay her mortgage,” the

words “this girl” and “her” in the speaker’s statement

may have represented nothing more than colloquial

references to the speaker herself, not references to another

person. Or the speaker may not have wished to identify

herself as the property owner until she had spoken with

No. 05-1252 11

the caller further. Most importantly, however, White’s

evidence that she spoke with the same person in both calls

was not disputed. Therefore, we conclude that the uncon-

tested evidence demonstrates that Wooten made the

statements in the August 21 telephone call.

We therefore turn to the final requirement in White’s

§ 3604(c) claim, that the statements indicate any “prefer-

ence, limitation, or discrimination” based on White’s

familial status. The FHA defines “familial status” as “one

or more individuals (who have not attained the age of

18 years) being domiciled with” a parent or someone

with an equivalent custodial relationship. 42 U.S.C.

§ 3602(k)(1); see also 24 C.F.R. § 100.20 (2006). It is

undisputed that at all times relevant to this matter, White

had two children under the age of eighteen years who

resided with her. Thus, the FHA protects White and her

children because of their “familial status.”

Actions prohibited under § 3604(c) include using words

or phrases which convey that dwellings are not avail-

able to a particular group of persons because of familial

status and expressing to prospective renters or any other

persons a preference or a limitation on any renter because

of familial status. 24 C.F.R. § 100.75(c)(1)-(2) (2006). To

determine whether a statement indicates impermissible

discrimination on the basis of familial status, an “ordinary

listener” standard is used. See Jancik, 44 F.3d at 556;

see also Ragin v. New York Times Co., 923 F.2d 995, 999

(2d Cir. 1991) (applying “ordinary reader” standard to

analysis of advertisement under § 3604(c)). The inquiry

under this objective standard is whether the alleged

statement would suggest to an “ordinary listener” that a

person with a particular familial status is preferred or

disfavored for the housing in question. See Jancik, 44 F.3d

at 556. The ordinary listener “is neither the most suspi-

cious nor the most insensitive of our citizenry.” Id. at

556 n.4 (citing Ragin, 923 F.2d at 1002).

12 No. 05-1252

White argues that Wooten’s statements in the August 21

conversation indicate that Wooten disfavored White’s

familial status for the apartment in question. We agree.

The ALJ disregarded Wooten’s statements about White’s

family and concluded that Wooten “was clearly more

concerned with financial matters than the make-up of

[White’s] family” because she expressed her need to “pay

her mortgage.” See Soules v. Dep’t of Hous. & Urban Dev.,

967 F.2d 817, 821 (2d. Cir. 1992) (stating that the FHA

was “not intended to ‘prevent a landlord from determining

that a family is otherwise qualified before agreeing to rent

to them’ ”) (quoting 134 Cong. Rec. H4681 (daily ed. June

23, 1988) (remarks by Representative Synar)).

Wooten’s statements in the August 21 conversation,

however, do not support the ALJ’s conclusion that

Wooten’s only concern was White’s ability to pay the rent.

Immediately after learning that White was an unmarried

mother of two small children, Wooten told White she

would not rent to her. In fact, that White was an unmar-

ried mother of two small children was all that Wooten

knew about White at that point. Wooten had not asked

White a single question about her finances (nor did she

at any point in the conversation). She possessed no

information whatsoever about White’s income, credit

history, assets, or liabilities. For all Wooten knew, White

could have been a multimillionaire. Under these circum-

stances, substantial evidence does not support the ALJ’s

conclusion that Wooten refused to rent to White on August

21 because Wooten was concerned with White’s ability

to pay the rent. Rather, Wooten’s statements would

indicate to an ordinary listener that Wooten disfavored

White on the basis of her familial status. As Wooten

refused to rent the apartment armed only with the knowl-

edge that White was a single mother of two small children,

an ordinary listener would find Wooten assessed White’s

No. 05-1252 13

ability to pay her rent based on her familial status, not on

her financial situation.

The respondent also argues that the statements in-

dicate a preference based only on White’s marital status,

not one based on her familial status. The respondent is

correct that the FHA does not include marital status

among its protected classifications. See 42 U.S.C.

§§ 3604(a)-(f ), 3605(a), 3606 (omitting “marital status”

from categories of protected classes under the FHA);

Soules, 967 F.2d at 821 (“Congress’ primary concern [in

passing the FHA] was to eliminate direct discrimination

against families with children.”) (emphasis added); Doe v.

Butler, 892 F.2d 315, 326 (3d Cir. 1989) (Roth, J., dissent-

ing) (quoting the legislative history of the FHA’s definition

of “familial status” to show that Congress did “not in-

tend this definition to include marital status”). Compare 42

U.S.C. § 3602(k)(1) (omitting any mention of marriage

from the statutory definition of “familial status”) with

Chicago, Illinois Ordinance § 5-8-030(c) (1998) (making

it illegal for landlord to refuse to rent “within the city of

Chicago because of the . . . marital status . . . of the

proposed buyer or renter”).

In support of its argument, the respondent points to the

parties’ September telephone conversation. During that

discussion, Wooten agreed to show the apartment think-

ing White was married, to an employed husband, and

had one child. These statements, however, do not change

our conclusion that Wooten’s comments in the August

conversation indicate discrimination on the basis of

White’s familial status. In the August telephone call,

Wooten stated repeatedly that she would not rent to White

because she had children but not a husband. Wooten’s

statements suggest that she would have been willing to

rent to a single woman; because White stated she had

children, however, Wooten told White she would not rent

to her. The August conversation thus indicates that

14 No. 05-1252

White’s representation that she had children, not that

she was unmarried, constituted the reason for Wooten’s

refusal to rent to her.

We conclude that White has demonstrated that Wooten’s

statements indicate disfavor for her familial status

because her statements would allow an “ordinary listener”

to infer she had a preference against White due to her

familial status. See Jancik, 44 F.3d at 556 (finding defen-

dant’s statements that he “did not want any families with

children . . . quite clearly would suggest to an ‘ordinary’

listener that [defendant] had a preference or limitation

based on family status”); Kormoczy v. U.S. Dep’t of Hous.

& Urban Dev., 53 F.3d 821, 824-25 (7th Cir. 1995) (de-

termining that landlord’s explanation “that elderly

people lived in the building and kids were not wanted

in the building” constituted evidence of discrimination

based on familial status). Accordingly, substantial evidence

does not support the ALJ’s conclusion that White failed

to establish a violation of §3604(c), and we reverse the

decision against her on this claim.

B. White Was Not Entitled to Amend Her Complaint to

Add a Claim Under 42 U.S.C. § 3617.

White next argues that the ALJ erred when he denied

her motion to amend her complaint to conform to evidence

presented at the evidentiary hearing. That evidence, White

claims, demonstrated that her grandfather, Houston, was

subjected to Wooten’s “campaign of harassment” in re-

sponse to White’s filing of FHA claims. We review an ALJ’s

denial of a motion to amend a discrimination charge for

abuse of discretion, Looper Maintenance Service, Inc. v.

City of Indianapolis, 197 F.3d 908, 914 (7th Cir. 1999), and

we find no error.

The FHA makes it unlawful to intimidate or threaten

any person who exercises or enjoys any right granted or

No. 05-1252 15

protected by the FHA. 42 U.S.C. § 3617; 24 C.F.R.

§ 100.400(c)(4). To state a § 3617 claim, White must show,

among other things, that Wooten “coerced, threatened,

intimidated, or interfered with [her] on account of [her]

protected activity under the FHA[ ].” East-Miller v. Lake

County Highway Dep’t, 421 F.3d 558, 563 (7th Cir. 2005).

The ALJ denied White’s request to amend her complaint

to add a claim under § 3617. The federal regulations set

forth the circumstances under which a party may amend

pleadings in an administrative proceeding under the FHA.

As relevant here, the regulations provide:

(b) By leave. Upon such conditions as are neces-

sary to avoid prejudicing the public interest and

the rights of the parties, the ALJ may allow

amendments to pleadings upon a motion of the

parties.

(c) Conformance to the evidence. When issues not

raised by the pleadings are reasonably within the

scope of the original charge or notice of proposed

adverse action and have been tried by the express

or implied consent of the parties, the issues shall

be treated in all respects as if they had been raised

in the pleadings, and amendment may be made

as necessary to make the pleadings conform to the

evidence.

24 C.F.R. § 180.425(c) (2006).

White first argues that the word “shall” in 24 C.F.R.

§ 180.425(c) means that any issue presented at the hearing

must be treated as if raised in the pleadings. But the

regulation does not go this far. Instead, it provides that

issues are to be treated as if raised in the pleadings

only when, among other things, the issue not initially

raised is “reasonably within the scope of the original

charge” or notice of proposed adverse action. Here, how-

16 No. 05-1252

ever, the conduct giving rise to White’s § 3617 claim was

not within the original charge’s scope. Whether to grant

White’s motion to amend her pleadings was thus discre-

tionary.

Although White was well aware of the calls received by

her grandfather at the time she filed her charge, she did

not seek to add the new claim until the case was virtually

complete. At the hearing, White acknowledged that she

learned of the calls in November 1998, at the time they

occurred. Yet it was not until 2004 that White sought to

add the new charge. Although Wooten was herself respon-

sible for multiple delays in this matter, we cannot find an

abuse of discretion in the ALJ’s conclusion that White

“should have acted long ago” to seek to add a new claim.

And on this basis, we affirm the ALJ’s decision to deny

White’s motion to amend her complaint.

III. CONCLUSION

Accordingly, we AFFIRM the ALJ’s denial of White’s

motion to amend her complaint. However, we REVERSE the

ALJ’s decision as to White’s § 3604(c) claim.

A true Copy:

Teste:

________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit

USCA-02-C-0072—2-2-07