Office of the Assistant Secretary for Fair Housing and Equal Opportunity; Revision of HUD's Fair Housing Complaint Processing

SUMMARY: This interim rule amends HUD's regulations governing fair

housing complaint processing. Specifically, this rule removes the

provision allowing a respondent to request a subpoena during a fair

housing investigation. The removal of this provision will eliminate the

delays associated with subpoena requests and expedite the investigation

process. Further, the rule will prevent the appearance of a conflict of

interest between HUD's dual role as investigator and impartial arbiter

of discovery disputes between complainants and respondents. This

interim rule will also conform HUD's investigation practices with those

of other Federal administrative agencies.

DATES: Effective date: September 9, 1996.

Comments due date: October 7, 1996.

ADDRESSES: Interested persons are invited to submit comments regarding

the interim rule to the Office of the General Counsel, Rules Docket

Clerk, Room 10276, Department of Housing and Urban Development, 451

Seventh Street, SW, Washington, DC 20410-0500. Communications should

refer to the above docket number and title. Facsimile (FAX) comments

are not acceptable. A copy of each communication submitted will be

available for public inspection and copying during regular business

hours (7:30 a.m. to 5:30 p.m. Eastern Time) at the above address.

FOR FURTHER INFORMATION CONTACT: Susan Forward, Deputy Assistant

Secretary for Enforcement and Investigations, Room 5106, Department of

Housing and Urban Development, 451 Seventh Street, SW., Washington, DC

20410, telephone number (202) 708-4211. For hearing- and speech-

impaired persons, this number may be accessed via TTY by calling the

Federal Information Relay Service at 1-800-877-8339. (With the

exception of the ``800'' number, these numbers are not toll free.)

SUPPLEMENTARY INFORMATION:

I. Background

A. Respondent's Right to Request Subpoena

The Fair Housing Amendments Act of 1988 amended section 811 of the

Fair Housing Act (title VIII of the Civil Rights Act of 1968, as

amended, 42 U.S.C. 3601 et seq.) (the Act). Section 811, as amended,

authorizes the Secretary of HUD to issue subpoenas and order discovery

in aid of fair housing investigations and hearings. The Secretary has

delegated this investigative authority to the Assistant Secretary for

Fair Housing and Equal Opportunity. The Secretary's authority to

conduct hearings has been delegated to HUD's administrative law judges.

Prior to the Fair Housing Amendments Act of 1988, the Act did not

contain an administrative hearing process with discovery available to

the parties. However, the original language of section 811(b) of the

Act permitted a respondent to request the issuance of a subpoena during

a fair housing investigation:

Upon written application to the Secretary, a respondent shall be

entitled to the issuance of a reasonable number of subpoenas by and

in the name of the Secretary to the same extent and subject to the

same limitations as subpoenas issued by the Secretary himself.

Subpoenas issued at the request of a respondent shall show on

their face the name and address of such respondent and shall state

that they were issued at his request. 42 U.S.C. 3611(b) (1969).

The Fair Housing Amendments Act of 1988 removed the above-quoted

provision from the Act and granted the Secretary sole authority for

conducting discovery during fair housing investigations. However, HUD's

regulation at 24 CFR 103.215, published on January 23, 1989, includes a

provision which permits a respondent to request a subpoena during an

investigation. HUD's regulations do not provide a complaining party

with the opportunity to request issuance of a subpoena. However, the

complainant is permitted to request that the Assistant Secretary for

Fair Housing and Equal Opportunity revoke, quash or modify a

respondent's subpoena. This difference was based, in part, on the

assumption that HUD would be representing the interests of the

complaining party, and therefore the respondent should be offered the

ability to discover information in its own defense.

A recent Department of Justice memorandum 1 calls that

assumption into question. The memorandum states that the responsibility

of the government in the conduct of fair housing cases is not to

advocate for the complainant, but to serve the government's goals of

doing justice and correcting societal wrongs. Consequently, HUD's role

in a fair housing investigation is to objectively consider the facts

and determine whether cause exists to believe that a violation of the

Act has occurred, not to represent the interests of the complainant.

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\1\ Assistant Attorney General Walter Dellinger, memorandum to

Deval L. Patrick, Assistant Attorney General for Civil Rights, The

Relationship Between Department Attorneys and Persons on Whose

Behalf the United States Initiates Cases Under the Fair Housing Act

(January 20, 1995).

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B. Revision of 24 CFR 103.215

The lack of statutory support discussed above has prompted HUD to

publish this interim rule, which revises Sec. 103.215 to delete the

requirement that HUD issue a subpoena at the request of a respondent.

There are additional reasons for HUD's decision to take this action:

1. Prevents Appearance of Conflict of Interest

This interim rule prevents the appearance of a conflict of interest

between the Assistant Secretary's dual roles as investigator and as

impartial arbiter of discovery disputes between complainants and

respondents by removing the requirement that HUD engage in discovery at

the direction of one of the parties. The refereeing of these disputes

is a function more properly allocated to the administrative law judges

in the context of administrative hearings, or district court judges in

the context of elected federal litigation.

2. Expedites Investigation Process

This interim rule eliminates delays in the investigation process

which are associated with processing subpoena requests from

respondents. The Act charges HUD with completing all fair housing

investigations within a 100-day period, if practicable. If the fair

housing investigation cannot be completed within that time, the

Secretary is required to notify the complainant and the respondent of

the reasons for the delay. (42 U.S.C. 3610(a)(1).) However, the United

States Commission on Civil Rights noted, in its report on enforcement

of the Act, that the complexity of some cases and the heavy caseload

burden on investigative staff

[[Page 41481]]

bore out the observation that HUD frequently is not able to close

complaints or make determinations in 100 days.2 HUD has determined

that pursuing discovery at the direction of the respondent, in addition

to the discovery that HUD determines is necessary to the investigation,

is not necessary to a fair and impartial determination and can actually

impede HUD's efforts to complete the investigation in a timely manner.

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\2\ United States Commission on Civil Rights, The Fair Housing

Amendments Act of 1988: The Enforcement Report, at 40-42 (1994).

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3. Conforms HUD's Investigative Practices to Other Federal Agencies

This interim rule will conform HUD's investigation practices with

those of other Federal administrative agencies, which do not provide

for discovery by parties during the investigation of civil rights

complaints. HUD's review of the relevant regulations of the Equal

Employment Opportunity Commission for Title VII of the Civil Rights Act

of 1968 (29 CFR part 1601), the Americans with Disabilities Act (29 CFR

part 1630), the Equal Pay Act (29 CFR part 1620), and the Age

Discrimination in Employment Act (29 CFR part 1626) revealed that a

respondent does not have an opportunity to request a subpoena during

the government's investigation of a civil rights complaint under any of

these regulations. Similar regulations governing the Department of

Education's enforcement of Title IX of the Education Amendments of 1972

(34 CFR part 106), and the Department of Justice's enforcement of the

Immigration Reform and Control Act of 1986 (28 CFR part 44) also do not

contain any provisions authorizing a respondent to request a subpoena

during a civil rights investigation under these statutes.

HUD believes that the experience of other Federal administrative

agencies provides positive guidance for this decision to streamline and

simplify the investigation process.

C. Respondent's Ability To Prepare Its Defense

HUD believes it is important to emphasize that this interim rule

does not compromise a respondent's ability to prepare its own defense.

A respondent may continue to conduct an independent investigation of

the facts underlying the fair housing complaint and may obtain the

Final Investigative Report on which HUD's determination is based. This

interim rule does not change a respondent's ability to compel discovery

or request a subpoena from an administrative law judge during the

administrative hearing process. (See 24 CFR 104.500-104.590.) This

interim rule only affects the ability of a respondent to compel the use

of HUD's resources to subpoena evidence independent of the evidence

which HUD has determined is necessary to the investigation.

II. Justification for Interim Rulemaking

HUD generally publishes a rule for public comment before issuing a

rule for effect, in accordance with its own regulations on rulemaking

in 24 CFR part 10. However, part 10 provides for exceptions to the

general rule if the agency finds good cause to omit advance notice and

public participation. The good cause requirement is satisfied when

prior public procedure is ``impracticable, unnecessary, or contrary to

the public interest'' (24 CFR 10.1). HUD finds that in this case prior

public comment is contrary to the public interest, since immediate

implementation of this interim rule will benefit the public.

This interim rule removes a respondent's right to request a

subpoena during the course of a fair housing investigation. HUD's

processing of these subpoena requests may delay, and often has delayed,

its investigation of complaints alleging discriminatory housing

practices. By eliminating these delays, this interim rule expedites

HUD's investigations and its ability to enforce the Act. Further, the

rule prevents the appearance of a conflict of interest between HUD's

dual roles as investigator and impartial arbiter of discovery disputes

between complainants and respondents. Such an appearance weakens HUD's

ability to conduct fair housing complaint investigations.

This interim rule does not compromise a respondent's ability to

prepare its own defense. Respondents will still be able to compel

discovery or request subpoenas during the administrative hearing

process. The rule only affects the ability of a respondent to compel

use of HUD's resources to subpoena evidence over and above the

information which HUD has determined is necessary to a full and fair

investigation.

Although HUD believes issuing this interim rule for immediate

effect will benefit the public, HUD welcomes public comment. All

comments will be considered in the development of the final rule.

III. Other Matters

A. Regulatory Flexibility Act

The Secretary, in accordance with the Regulatory Flexibility Act (5

U.S.C. 605(b)), has reviewed and approved this final rule, and in so

doing certifies that this rule will not have a significant economic

impact on a substantial number of small entities. This rule streamlines

HUD's regulations governing fair housing complaint processing. The rule

will have no adverse or disproportionate economic impact on small

businesses.

B. Environmental Impact

This rulemaking does not have an environmental impact. This

rulemaking amends an existing regulation by streamlining provisions and

does not alter the environmental effect of the regulations being

amended. A Finding of No Significant Impact with respect to the

environment was made in accordance with HUD regulations in 24 CFR part

50 that implement section 102(2)(C) of the National Environmental

Policy Act of 1969 (42 U.S.C. 4332) at the time of development of

regulations implementing the Act. That finding remains applicable to

this rule, and is available for public inspection between 7:30 a.m. and

5:30 p.m. weekdays in the Office of the Rules Docket Clerk, Office of

General Counsel, Room 10276, Department of Housing and Urban

Development, 451 Seventh Street, SW., Washington, DC.

C. Executive Order 12612, Federalism

The General Counsel, as the Designated Official under section 6(a)

of Executive Order 12612, Federalism, has determined that this rule

will not have substantial direct effects on States or their political

subdivisions, or the relationship between the Federal government and

the States, or on the distribution of power and responsibilities among

the various levels of government. No programmatic or policy changes

will result from this rule that would affect the relationship between

the Federal Government and State and local governments.

D. Executive Order 12606, The Family

The General Counsel, as the Designated Official under Executive

Order 12606, The Family, has determined that this rule will not have

the potential for significant impact on family formation, maintenance,

or general well-being, and thus is not subject to review under the

Order. No significant change in existing HUD policies or programs will

result from promulgation of this rule.

[[Page 41482]]

E. Executive Order 12866, Regulatory Planning and Review

This interim rule was reviewed by the Office of Management and

Budget under Executive Order 12866, Regulatory Planning and Review. Any

changes made to the interim rule as a result of that review are clearly

identified in the docket file, which is available for public inspection

in the office of the Department's Rules Docket Clerk, Room 10276, 451

Seventh Street, SW., Washington, DC 20410-0500.

List of Subjects in 24 CFR Part 103

Administrative practice and procedure, Aged, Fair housing,

Individuals with disabilities, Intergovernmental relations,

Investigations, Mortgages, Penalties, Reporting and recordkeeping

requirements.

Accordingly, 24 CFR part 103 is amended as follows:

PART 103--FAIR HOUSING--COMPLAINT PROCESSING

1. The authority citation for 24 CFR part 103 continues to read as

follows:

Authority: 42 U.S.C. 3535(d), 3601-3619.

2. Section 103.215 is amended by revising paragraph (b) to read as

follows:

Sec. 103.215 Conduct of investigations.

* * * * *

(b) The Assistant Secretary may conduct and order discovery in aid

of the investigation by the same methods and to the same extent that

discovery may be ordered in an administrative proceeding under 24 CFR

part 104, except that the Assistant Secretary shall have the power to

issue subpoenas described in 24 CFR 104.590 in support of the

investigation. Subpoenas issued by the Assistant Secretary must be

approved by the General Counsel as to their legality before issuance.

Dated: April 23, 1996.

Elizabeth K. Julian,

Deputy Assistant Secretary for Policy and Initiatives.

[FR Doc. 96-20201 Filed 8-7-96; 8:45 am]

BILLING CODE 4210-28-P