Colorado District Court Issues Landmark Decision Holding that the Fair Housing Act Prohibits Discrimination Based on Sexual Orientation and Gender Identity

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April 20, 2017
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In a recent landmark decision, Colorado District Court Judge Raymond Moore ruled that the Federal Fair Housing Act’s prohibition against housing discrimination includes discrimination against LGBT people. The decision was issued within days of a Seventh U.S. Circuit Court of Appeals ruling that Title VII of the 1964 Civil Rights Act prohibits discrimination against lesbian, gay, bisexual, and transgender employees in the workplace. The seventh circuit includes Illinois, Wisconsin, and Indiana.

Under the Fair Housing Act (FHA), it is illegal to refuse to rent or sell housing to anyone because of race, color, religion, disability, sex, familial status, or national origin, or make statements indicating such discrimination. The FHA does not specifically include sexual orientation or gender identity as prohibited.

The case involved allegations that property owner Deepika Avanti refused to rent housing to Rachel and Tonya Smith, a same-sex married couple with two young children. Rachel Smith is transgender; she identifies as a woman but was born male. Avanti initially told the couple that she would not rent to them over concerns about noise from their children, which itself is a clear act of familial status discrimination. However, Avanti did not stop there.  She subsequently told the couple that their “unique relationship” and “uniqueness” would become the town focus and would jeopardize the Avanti's “low profile” in the community. The suit alleged discrimination based on sex and familial status. 

The court recognized that the tenth circuit looks to Title VII employment discrimination cases for guidance in addressing discrimination issues under the FHA, and noted that the tenth circuit explicitly declined to extend Title VII protections to discrimination based on a person's sexual orientation. However, the Smiths' framed their allegations of sex discrimination as claims of “gender stereotyping,” which was first recognized as a viable theory under Title VII by the U.S. Supreme Court in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989). In that case, the plaintiff claimed she was denied partnership at the firm for two years in a row because she did not conform to feminine stereotypes about how a woman should look and act in the workplace. Many courts have since relied on Price Waterhouse to expressly recognize a Title VII cause of action based on an employee's failure to conform to stereotypical gender norms.

Following this framework, the Smiths contended that discrimination against women like them for failure to conform to stereotype norms concerning to or with whom a woman should be attracted, should marry, and have children is discrimination on the basis of sex under the FHA. The court agreed, holding that “[s]uch stereotypical norms are no different from other stereotypes associated with women, such as the way she should dress or act (e.g., that a woman should not be overly aggressive, or should not act macho), and are products of sex stereotyping.” The court also agreed with the Smiths’ contention that discrimination against a transgender person because of her gender-nonconformity (because they do not act or dress like the stereotypical gender of their birth) is sex discrimination. The court then held that the Colorado Anti–Discrimination Act’s prohibition against discrimination because of “sex” was violated as well, and awarded the Smiths’ summary judgment on their state and federal fair housing claims based on gender stereotyping.

The court declined to hold that the FHA prohibits discrimination against someone simply based of his or her status as gay, lesbian, or transgender, but due to the court’s acceptance of a gender stereotyping theory for the Smith’s claims, this is a distinction without a difference. A plaintiff merely needs to plead their cause of action carefully in order to avoid dismissal.

Housing providers that receive funding from the U.S. Department of Housing and Urban Development (HUD) are subject to HUD’s Equal Access Rule, which requires equal access to HUD programs without regard to a person’s actual or perceived sexual orientation or gender identity.  Many states and cities, including Illinois, specifically prohibit sexual orientation and gender identity discrimination under their state or local anti-discrimination laws. The Missouri Human Rights Act contains no explicit protection for LGBT persons, and no Missouri court has yet extended the protections of the Missouri Human Rights Act to include allegations based on sexual orientation or gender identity. However, no Missouri plaintiff has alleged a “sexual stereotyping” theory. 

Housing providers in states and cities with laws that explicitly prohibit discrimination based on sexual orientation or gender identity should already have policies in place that prohibit this type of discrimination. Housing providers everywhere should adopt similar policies, even if sexual orientation or gender identity is not a listed class in their state law. All housing professionals, including but not limited to owners, landlords, property managers, lenders and realtors should train property management and other personnel not to make any housing related decision based on the sexual orientation or gender identity of the applicant or resident, or make any statements indicating a preference, limitation or discrimination regarding these individuals. State courts look to federal law for guidance in the interpretation of state human rights laws, and the eighth circuit will likely look to its sister circuit for guidance as well.