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United States v. Shanrie Co.

September 30, 2008

UNITED STATES OF AMERICA, PLAINTIFF,
v.
SHANRIE CO., INC., DAN SHEILS, NETEMEYER ENGINEERING ASSOCIATES, INC., AND THOEVENOT, WADE & MOERCHEN, INC., DEFENDANT.



The opinion of the court was delivered by: Herndon, Chief Judge

MEMORANDUM AND ORDER

I. Introduction

Before the Court is Plaintiff United States' Motion for Civil Penalties and Additional Injunctive Relief Against Defendants Dan Sheils and Shanrie Company, Inc. (Doc. 186). Defendants Sheils and Shanrie Company, Inc. (Shanrie Defendants) have filed a response to Plaintiff's motion (Doc. 194). On August 21, 2008, the Court heard oral arguments in regards to Plaintiff's motion for civil penalties and injunctive relief. The Court took the arguments under advisement. Having considered the arguments of both parties, the Court GRANTS IN PART AND DENYS IN PART Plaintiff's motion for civil penalties and injunctive relief.

II. Analysis

A. Civil Penalties

Plaintiff seeks $55,000 in civil penalties for the Shanrie Defendants' violations of the Fair Housing Act.

Under the Fair Housing Act, a court "may, to vindicate the public interest, assess a civil penalty against the respondent (i) in an amount not exceeding $50,000, for a first violation; and (ii) in an amount not exceeding $100,000, for any subsequent violation." 42 U.S.C. § 3614(d)(1)(C). However, the Attorney General may adjust this civil penalty for inflation and has done so, raising the limit from $50,000 to $55,000 for a first violation and from $100,000 to $110,000 for any subsequent violation. 28 C.F.R. § 85.3(b)(3)(2001).

There are several factors the court must consider when determining the amount of a civil penalty: the nature and circumstances of the violation, the degree of culpability, any history of past violations, the financial circumstances of that Defendant and the goal of deterrence, and other matters that justice may require. Smith & Lee Assoc., Inc. v. City of Talyor, 13 F.3d 920, 932 (6th Cir. 1993) (citing H.R. No. 711, 100th Cong., 2d Sess. 40, reprinted in, 1988 U.S. Code Cong. & Admin. News 2201). Each of the factors are discussed below.

1. The Nature and Circumstance of the Violation

Under the nature and circumstances factor, the Shanrie Defendants played a central role in designing the first five buildings of Applegate Apartments in a manner that excluded those with disabilities from entering or living in the ground floor units. The Shanrie defendants were found to have violated almost every provision related to accessibility in the FHA and made their buildings almost entirely inaccessible to individuals with disability issues. Although the Shanrie Defendants claim that they were ignorant of the Fair Housing Act and only received advice in regards to the Americans with Disabilities Act, the Shanrie defendants still proceeded to build their building even though they were warned by their design professional that they may be in violation of federal law by failing to provide accessible routes to the front doors.

2. The Degree of Culpability

Under the culpability factor, Shanrie is the builder and owner of Applegate apartments and Dan Sheils, as Shanrie's president oversaw all aspects of the design and construct. The Shanrie defendants were the main force behind the construction of Applegate. Furthermore, they consistently disregarded warnings about the compliance of Applegate, rejecting recommendations by their design professionals. The Shanrie defendants, while they acknowledge culpability, continue to argue that their violation was an unknowning failure to provide accessibility in Applegate.

3. Any History of Past Violations

With respect to the third factor regarding history of past violations, the Shanrie defendants have not previously been adjudicated for ...


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