In April 1996, Jennifer Neer was seven-months pregnant with her first child. Larson told the Neers that they would have to move out of the apartment complex when the child was born because children were not allowed to live in the complex.
Later, Larson told the Neers that they could stay in their apartment if they signed a new lease which would have increased their rent by $350 per month. The Neers could not afford such a drastic increase and contacted HUD to file a complaint.
HUD issued a Charge of Discrimination in September 1996. In it, HUD alleged that Larson had illegally terminated the Neers tenancy, applied different terms and conditions to the Neers because of their family status, and made discriminatory statements. Larson denied wrongdoing.