Administrative Law Judge says 10 years is too long for HUD to resolve a complaint; dismisses case

Administrative Law Judge Thomas C. Heinz dismissed a charge of discrimination that was issued ten years after the complaining parties filed their complaint with HUD. Judge Heinz ruled in February for a variety of reasons, that HUD could not take ten years to resolve the complaints it investigates.

Angela and Randall Bye, who are African American, filed an administrative complaint with HUD in 1992 alleging that Michael Sparks and his company, Sparks and Associates, had discriminated against them on the basis of race by refusing to rent them an apartment.

HUD completed its investigation in 1992, but did not continue processing the Byes’ complaint because Sparks had filed for bankruptcy and HUD’s counsel thought the filing precluded HUD from proceeding against him. After Sparks’s reorganization plan was approved by the bankruptcy court in 1996, HUD issued a discrimination charge against both respondents. However, HUD failed to serve the respondents with the charge because it did not have Sparks’s correct address. HUD took no action in 1997, and in 1998, it again attempted to issue a charge against the respondents using a different address. That address was incorrect and the charge was not served.

Case closed in 1999 to make “aged case numbers look better”

HUD actually closed the case administratively in 1999. According to HUD’s FHEO Director in Chicago, the case was closed “to make the aged case numbers look better.” HUD was contacted by the Leadership Council for Metropolitan Open Communities in October 2001, and the Council provided a correct address for the respondents. HUD reopened the case at that time. Judge Heinz noted that, if not for the persistence of the Leadership Council, the case probably would have remained unresolved.

In May 2002, seven months after the Leadership Council had given HUD the correct address, HUD refiled the charge and successfully served it on Sparks. HUD did not attempt to conciliate the claim before refiling the charge. The respondents moved to dismiss the charge, arguing that HUD had violated mandatory procedural requirements to attempt conciliation, causing extreme prejudice to them.

Regarding HUD’s failure to serve the respondents with a charge from 1997 to 2002, Judge Heinz wrote, “HUD failed to find and serve Respondents during this five-year period as a result of unreasonable assumptions and unexplained inaction. That failure cannot be excused.” Administrative Law Judge Heinz granted the respondents’ motion to dismiss. Judge Heinz ruled that HUD’s ten-year delay in presenting the case for adjudication was unreasonable and inexcusable and materially prejudiced the respondents’ defense. He also found that the respondents were  irreparably harmed by HUD’s failure to attempt conciliation because they were “deprived forever of their right to have a genuine opportunity to resolve the complaint quickly, efficiently, and with minimal expense before issuance of the Charge.”

HUD failed three times to attempt conciliation, as required by the Fair Housing Act

Judge Heinz then wrote, “Before filing the Charge in October 1996, HUD was required by the Act to attempt conciliation. The agency failed to do so and repeated its failure in 1998 and 2002 when the Charge was refiled.”

Judge Heinz also noted that during the ten-year delay, HUD had lost some of Sparks’s business records. Sparks claimed that he had kept no copies of the records he turned over to HUD and that they were necessary for his defense. Heinz also pointed out that many of the witnesses in the case were now mentally impaired or missing. Heinz said it would now be nearly impossible to find some important witnesses, but it would have been easy to do so if the case had been adjudicated in 1992 or 1993.

It should be noted that it was the respondent who asked for a delay in the processing of this case, because of his bankruptcy. However, Judge Heinz noted HUD had a duty to find out whether the processing of the complaint against the respondents should have been stopped. As it turns out, bankruptcy proceedings have no bearing on the processing of the complaint, despite what HUD believed in 1992.

HUD v. Sparks
Case No. HUDALJ 05-92-1274-4 (2-14-03)
Thomas C. Heinz, Administrative Law Judge
Complaint filed: July 27, 1992
Complaint Dismissed: February 2003