United States v. Hylton
944 F.Supp.2d 176, 2013 WL 2097426 (2013)
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Rule of Law:
A property owner who utilizes the professional services of an agent, including a spouse who is in the business of renting dwellings, to rent a single-family home is not entitled to the Fair Housing Act's single-family home exemption. Both the owner and the agent's company may be held vicariously liable for the agent's racially discriminatory statements and refusal to rent.
Facts:
- Merline Hylton owned a single-family home, and her husband, Clifton Hylton, owned and operated a property management company, Hylton Real Estate Management (HREM).
- In April 2010, the Hyltons, who are both black, rented the home to Jermaine Bilbo (African-American) and Taika Bilbo (white).
- After deciding to purchase their own home, the Bilbos sought to sublet the property and found a prospective tenant, DeMechia Wilson, who is African-American.
- On June 22, 2010, Jermaine Bilbo called Clifton Hylton for permission to sublet to Wilson. Hylton initially agreed but then asked about Wilson's race.
- Upon learning Wilson was black, Hylton rescinded his approval, stating he did not want 'too many black people at the property' and that he had only rented to the Bilbos because Taika Bilbo was white, creating a 'good mix.'
- Hylton instructed Jermaine Bilbo to 'find some good white people' to rent the house.
- The Hyltons did not return the Bilbos' $1,750 security deposit after they moved out.
- On August 1, 2010, the Hyltons rented the property to a white couple.
Procedural Posture:
- Jermaine Bilbo, Taika Bilbo, and DeMechia Wilson filed a complaint with the Department of Housing and Urban Development (HUD).
- HUD conducted an investigation into the allegations against the Hyltons and HREM.
- The complainants made a timely election to have their claims resolved in a federal civil action.
- The United States Attorney General, authorized by the HUD Secretary, filed this action on behalf of the complainants in the U.S. District Court for the District of Connecticut.
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Issue:
Do a landlord's agent's racially discriminatory statements and refusal to consent to a sublease to a prospective African-American tenant violate the Fair Housing Act, and can the property-owning spouse and the agent's real estate company be held vicariously liable for those actions?
Opinions:
Majority - Judge Janet C. Hall
Yes, a landlord's agent's racially discriminatory statements and refusal to consent to a sublease violate the Fair Housing Act (FHA), and both the property-owning spouse and the real estate company are vicariously liable. The court found direct evidence of discriminatory intent in Clifton Hylton's statements, which constituted a 'smoking gun' and violated sections 3604(a) (refusal to rent), 3604(b) (discriminatory terms and conditions), and 3604(c) (discriminatory statements) of the FHA. Because there was direct evidence, the McDonnell Douglas burden-shifting framework was inapplicable. The court held Merline Hylton vicariously liable as the property owner because her husband acted as her agent with her knowledge and approval. HREM was also held vicariously liable because Clifton Hylton was acting within the scope of his role as a property manager for the company, using its documents in the rental process. The court rejected the defendants' claim to the single-family home exemption under § 3603(b), reasoning that the exemption is nullified when an owner uses the services of a 'person in the business of ... renting dwellings,' which Clifton Hylton was.
Analysis:
This decision reinforces the principle that direct evidence of discrimination, such as explicit racial statements, bypasses the need for the inferential framework established in McDonnell Douglas. It broadly interprets vicarious liability under the Fair Housing Act, confirming that property owners cannot insulate themselves from liability by delegating rental activities to an agent, even a spouse. Most significantly, the ruling narrows the application of the FHA's 'single-family home' exemption, clarifying that it does not apply when the owner uses a spouse who is also a real estate professional, thereby preventing a potential loophole for small landlords.
