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Egan v. Schmock: Sale or Rental of Property Not Required to Bring Fair Housing Lawsuit

A federal court recently considered whether a lawsuit could be brought for violations of the fair housing laws when the allegations do not involve the sale or rental of property.

Kulwant, Tara, and Sachit Egan ("Plaintiffs") lived next door to Mr. and Mrs. Schmock ("Neighbors"). The Neighbors directed a series of offensive taunts towards the Plaintiffs based on their national origin, which was East Indian. For example, the Neighbors called the Plaintiffs "dirty Indians" and also called the Plaintiffs' son a "monkey" and threw a banana to him over the fence. The Neighbors also directed offensive behavior towards the guests of the Plaintiffs. Eventually, the Plaintiffs filed a lawsuit against the Neighbors which alleged that the Neighbors' conduct violated the federal Fair Housing Act ("FHA") as well as a number of California state laws designed to prevent discrimination. The Neighbors filed a motion to dismiss the lawsuit.

The United States District Court, Northern District of California, San Jose Division, dismissed the Plaintiffs' lawsuit, but the court said that the Plaintiffs could refile the lawsuit alleging more facts. The court first considered the FHA allegations. The FHA is designed to eliminate discrimination against protected classes (such as discrimination based on national origin) in the housing marketplace. The Neighbors argued that because neither the sale nor rental of property was at issue in this case, the FHA could not be violated. The court found that few courts had considered the question of whether the rental or sale of property was a requirement to bringing a FHA lawsuit. The few courts which had considered this question had ruled that the FHA could be violated if the conduct was FHA prohibited discrimination designed to drive an individual out of his home. Therefore, this court ruled that simply because the Plaintiffs' claims did not involve the sale or rental of property this was not a bar to bringing a lawsuit for FHA violations. However, the court dismissed the Plaintiffs' FHA allegations because the Plaintiffs had only alleged that the Neighbors' discriminatory conduct interfered with the enjoyment of their home, a lower level of discrimination than the court ruled was necessary for the Plaintiffs to allege. The court granted the Plaintiffs leave to amend their FHA allegations with facts that would meet the higher standard.

The court next considered the other allegations made by the Plaintiffs. The Plaintiffs alleged that the Neighbors had violated a federal civil rights statute which guarantees that all U.S. citizens have the same rights to enjoy their real and personal property. The Plaintiffs also alleged that the Neighbors had violated California's Fair Employment and Housing Act, which mirrors the language of the FHA. The court ruled that the these allegations should be dismissed because the Plaintiffs had only alleged interference with their enjoyment of their property, but, like the FHA violations, the Plaintiff was granted leave to amend its lawsuit with facts that would meet the standard outlined by the court above.

The court next considered the alleged violations of California's Ralph Act and Bane Act. These statutes grant the right to all persons within California to be free from discriminatory threats of violence or intimidation. Since the Plaintiffs had failed to allege any threats of violence or intimidation, these allegations were dismissed, but with leave to amend granted.

Egan v. Schmock, 93 F. Supp. 2d 1090 (N.D. Ca. 2000).