Leasor Beware: distinctions between design and lease under the Fair Housing Act's statute of limitations

A university student, who used a wheelchair because of a neuromuscular condition, filed suit against a university and others asserting that the apartment he leased was not properly accessible. The design for the building at issue was completed in 2000. Student signed a lease in December, 2005 and filed suit a year later asserting claims under the Fair Housing Act, the Americans With Disabilities Act (“ADA”), and the Rehabilitation Act of 1973 (“§ 504”). The university and others moved to dismiss the complaint as untimely. The court’s decision found the complaint was timely because the lease was a new occurrence.

The Fair Housing Act provides that a person has two years to file suit “after the occurrence or the termination of an alleged discriminatory housing practice. . . .” 42 U.S.C. § 3613(a)(1)(A). The question for the court was the meaning of “occurrence or the termination.” After addressing a few other court decisions, including the only two apparent federal appeals court decisions approaching the issue, the court concluded that two important distinctions lie in the Fair Housing Act. First, there is the “occurrence” of designing and completing the building itself, and second, there is the continuing operation and management of the building. 

As to the design portion of potential liability, the statute of limitations begins to run once the building is completed. Accordingly, the court found, the architects were previously properly dismissed from the case. As to the continuing operation and management of the building, the court concluded that each new lease of an apartment is a new “occurrence.” Unlike the architects and builders, the owners and managers continue to remain in control of the building and are in a position to correct design defects.  

The court also applied the same reasoning to, and reached the same conclusions under, the ADA and 504 claims. The court further expressly pointed out the a public university has a continuing obligation to assure that its buildings are accessible. 

The decision’s logic appears solid. Accordingly, leasor’s beware – and be sure your buildings are up to code.

A Pennsylvania court's view of HIPAA, FERPA, and student records

The Pennsylvania Superior Court considered, and rejected, the notion that two federal privacy statutes create privileges against disclosing student records during the course of litigation discovery. But a state law, however, might bar production of such records.

The case involved a former student’s discovery demands in a case against a private special school. Student alleged he suffered sexual abuse and sought records relating to other similar possible past claims against the school. The school opposed producing any such records citing various statutory confidentiality protections against disclosing records involving other students.

The court found that the Health Insurance Portability and Accountability Act of 1996, known as “HIPAA,” and the Federal Educational Rights and Privacy Act, known as “FERPA,”  set forth the parameters by which protected student records can be disclosed and that, generally, disclosure pursuant to court order is an exception to the non-disclosure rule. In this respect, the state court decision comports with the statutes.

More interesting is how the court viewed the argument about a privilege against litigation disclosure based on state law. The Pennsylvania Mental Health Procedures Act, known as the “MHPA,” is seen as creating a privilege, with the only exception being legal proceedings permitted under the MHPA. The court did not decide the ultimate issue but instead sent the case back to the trial court to consider with the school was a “facility” under the MHPA and whether the MHPA actually applied. 

The case is a good reminder that many times state laws can offer more protections (or obstacles depending on your position) than federal laws. 

FMLA: employer notice and the deemed eligible employee

A couple of recent decisions from the federal trial courts in the Middle and Eastern Districts of Pennsylvania show a gathering consensus that a controversial Family And Medical Leave Act (“FMLA”) regulation is not proper. The gathering is not complete, however, and employers need to continue appropriate practices while we watch the consensus evolve.

The question is whether an employee is “eligible” under the FMLA, 29 U.S.C. §§ 2601-2654?   The statute at 29 U.S.C. § 2611(2)(A)(ii), defines an eligible employee as one employed by employer for at least 12 months and who worked at least 1,250 hours in the 12 months before requesting leave. 

Detailed facts of the cases in review need not detain us: the common scenario is of an employee

meeting the first requirement (12 months employment) but not the second requirement (1,250 hours). In each case, the employee argued the regulation, 29 CFR § 825.110(d), required the employer to notify employee of the employee’s eligibility status and that failure to do so entitled the employee to FMLA rights. This is indeed what the regulation says, giving the employee an apparent unquestioned victory.

But in a clash of appearance against legal substance, the later prevailed. The recent trial court decisions, Erdman v. Nationwide Ins. Co., Civ. A. 1:05-0944, --- F. Supp. 2d ----, 2007 WL 1704648  (June 12, 2007) (not available on the public domain court website), and Boyd v. City of Philadelphia, Civ. A. 06-1524, 2007 WL 925908 (E.D. Pa. March 22, 2007) (praise to the Eastern District website), reveal why. Although the Third Circuit Court of Appeals has not addressed the regulation, three other Circuit Courts have. All have found that the Department of Labor exceeded its authority in creating this regulatory mandate. In particular, the “deemed eligible” regulatory right exceeds the plain statutory requirements. The regulation cannot make ineligible employees into eligible employees all in contravention of the FMLA’s clear terms.

Currently, however, the regulation is still in place. Employers will need to continue to follow ebst practices particularly in places where the impact of the regulation is unaffected by appeal court precedent.

Another ill-gotten mandate for Pennsylvania public schools

In Lower Merion School District v. Doe, 2007 WL 2792927 (Pa.), through some unfortunate legal reasoning, the Pennsylvania Supreme Court has interpreted § 504 of the Rehabilitation Act, 29 U.S.C. § 794, to mean that a public school district must provide occupational services to a dual-enrolled private school student. In so doing, the court expands the dual enrollment and the Veschi decision mandates to provide public support for private schools. 

In this case, the district evaluated the student, found he was not eligible for special education and related services but was eligible as a protected handicapped student under § 504 and Chapter 15 of the Pennsylvania education regulations, 22 Pa. Code Chap. 15. The district therefore offered a program of appropriate supportive services in order for the student to access his public education. Parents rejected the offer, enrolled student in a private kindergarten, and dually enrolled student in the public school under § 502 of the Pennsylvania School Code, 24 P.S. § 5-502. 

The district argued that its § 504 requirement is limited to only providing equal access to its federally funded programs. Stated another way, one might say § 504 is not a mandate for a public school to intrude into a private school program and fix the private school’s “discrimination.” The Pennsylvania Supreme Court rejected the district’s argument based on some significant misunderstandings.

To begin with, the court was of the opinion that § 504 is “remedial legislation” to be interpreted broadly. But § 504 is legislation enacted under the Constitution’s spending clause. Barnes v. Gorman, 536 U.S. 181, 190 n.3 (2002). As such, the legislation is to be interpreted narrowly, that is, the funding mandate must be spelled out unequivocally to the recipient of federal funds. No case has come to my attention, and none is cited by the court, stating that the legislation gives a funding recipient clear notice that the recipient must address another entity’s lack of access or accommodations for disabled persons.

The court’s next mistake was in concluding the § 504 FAPE obligation applies to all persons living within the boundaries of the school district. In this regard, the court interpreted the federal regulatory phrase “in the recipient’s jurisdiction,” 34 CFR 104.33(a), out of context and law. The regulations cannot expand the scope of legislation, and § 504 itself applies for the benefit of persons participating in a program receiving federal funds. “Jurisdiction” here is a legal limitation and is not, as interpreted by the court, the equivalent of geographic boundaries. Indeed, in another regulatory passage, 34 CFR 104.32(a), cited by the court, the regulations specifically distinguish “residing” in the district’s jurisdiction (in the context of the district’s § 504 child find obligation), thus showing awareness by the regulators of the geographic and legal juridical distinction. Ironically, the court used this specific reference to support its general conclusion, thereby violating an elementary rule of construction.

To its credit, the court noted the state regulations are not intended to expand the federal § 504 requirement. But having already improperly expanded and confused the federal mandate, the point of the state regulations was lost.

In the end, however, the court’s errors regarding federal law are mooted where Pennsylvania’s dual enrollment mandate extends greater protections. Although the court offered no significant discussion of § 502 of the School Code, which permits dual enrollment, as the court noted, students “enrolled” in a district are entitled to services, regardless whether also attending a private school. 

To a practitioner familiar with this area of the law, the decision evidences misunderstanding of child find, FAPE, and various disabilities education mandates, particularly in misconstruing child find obligations to create a right to require the public to make a private school accessible. 

No second helpings: limits on ADA claimants collecting disability

Guest blogger, Mark Fitzgerald, writes about the tension between employment disability discrimination claims under the Americans With Disabilities Act (“ADA”) and claims for disability benefits. The legal concept of “estoppel” in such circumstances generally holds that an employee cannot certify to being disabled in order to obtain disability benefits, while claiming in court that she is not disabled and qualified to work. Mark is a member of the Education Law Group with a practice emphasis in Labor and Employment. Click here to find out more about Mark’s background and contact information.

 In a case that underscores the federal courts’ heightened scrutiny of employment disability discrimination claims following a plaintiff’s successful application for Social Security Disability, the United States District Court for the Middle District of Pennsylvania granted summary judgment for the employer because plaintiff-employee was estopped from raising claims under the ADA  after successfully applying for Social Security Disability benefits.

In an ADA employment discrimination case, a plaintiff must initially be able to show

a “prima face” case:  (1) that she has a disability within the meaning of the ADA, (2) is otherwise qualified to perform the essential functions of the job, with or without reasonable accommodations, and (3) was subject to some adverse action as a result of the disability. In Jones v Southcentral Employment Corp., 488 F. Supp. 2d 475 (M.D. Pa. 2007), the employer sought summary judgment because plaintiff’s actions and the facts leading up to her discrimination claim prevented her from meeting this initial burden.

The employer argued that settled principles of judicial estoppel, a doctrine that prevents a litigant from asserting a position inconsistent with a position asserted in a previous proceeding, precludes the plaintiff from establishing an essential element of her prima facie case, namely, that she was “qualified” for the position in question.

The court agreed. In granting the motion, the Middle District relied on Cleveland v. Policy Management Corp., 526 U.S. 795 (1999), in which the Supreme Court held that to survive summary judgment, an ADA plaintiff who previously was awarded disability benefits must provide a sufficient explanation to reconcile a sworn statement claiming “total disability” and later asserting an ability to “perform the essential functions of the job.”

Simply put, Cleveland added additional criteria to the prima facie case where judicial estoppel is implicated. Taking Cleveland a step further, Jones underscores that merely explaining away the inconsistencies of past statements is not enough to satisfy the Cleveland criteria.

In an attempt to explain away her conflicting claims, the plaintiff in Jones ineffectively argued that in contrast to an ADA claim, the Social Security Administration does not take into account reasonable accommodations in evaluating qualifications for benefits and, therefore, the two claims should be considered mutually exclusive.

The Middle District did not buy her explanation for several reasons. Most notably, merely identifying the differences in the two statutory schemes was not enough to cure her conflicting statements. The court stressed such clear inconsistencies in prior statements had to be supported by fact. The plaintiff could not demonstrate a sufficient explanation for her prior statements, especially in light of the fact she never requested reasonable accommodations from her employer after she was injured in the first place.