In December 2014, Jeremy and Kristy Morris hosted a Christmas program at their house. Approximately 200 families attended to view the lights, Christmas-themed characters, caroling, and a nativity scene featuring a live camel on the first day. The program lasted over a week; on average, 20-100 families stopped by each night.

Shortly after the holidays, the Morrises made an offer on a home in West Hayden Estates Homeowners Association (“Association”). Jeremy Morris asked the Association whether the CC&Rs would impact a similar Christmas program in 2015. The Board held an emergency meeting to discuss the matter. After researching Morrises' prior Christmas program, it was determined that there would likely be numerous violations of the CC&Rs should a similar program be held within West Hayden Estates. 

The Association sent a letter to the Morrises in January 2015, informing them that the CC&Rs prohibited their Christmas program and would fill the neighborhood with hundreds of people, including “possible undesirables.” The letter also advised of many non-Christian residents in the community who may not appreciate the program and that the Board did not wish to become “entwined in any expensive litigation.” 

Despite the Association's letter, the Morrises purchased the home. As Christmas approached, the Morrises began to set up for their program. The Association's attorney sent the Morrises a letter expressing concern that the program would violate the Association's CC&Rs. Regardless, the program went as planned, and the Association took no legal action. The Morrises held an even more extensive program in 2016. While the Association again took no legal action that year, many of the Association's residents expressed growing displeasure with the Morrises. In January of 2017, the Morrises filed a lawsuit in federal court against the Association.

The Morrises contend that the HOA violated three provisions of the Fair Housing Act: § 3604(b), which makes it unlawful to “discriminate against any person in the terms, conditions, or privileges  of sale or rental of a dwelling,  or in the provision of services or facilities  in connection  therewith,  because  of race,  color,  religion,  sex, familial status,  or national origin”; §3604(c), under which it is unlawful “[t]o make, print, or publish . . . any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on … religion”; and §3617, which makes it “unlawful to coerce, intimidate, threaten, or interfere with any person in the exercise or enjoyment of, or on account of his having exercised or enjoyed ... any right granted or protected” by §§3603, 3604, 3605, or 3606 of the Act.

At trial, the jury awarded the Morrises compensatory and punitive damages totaling $75,000, finding the Association violated all three of these FHA sections. However, the Association made a successful motion for a judgment as a matter of law (“JMOL”). The Association also sought an injunction to prevent future Christmas programs by the Morrises, which was also granted. The Morrises appealed the district court's decision.

The Ninth Circuit affirmed the district court's ruling on JMOL that §§ 3604(b) and 3604(c) of the FHA were not violated but found that § 3617 may have been violated, remanding the case back to the district court to retry the Morrises' § 3617 claim.

Here, despite the Morrises' purchase of the home, the Association's threat of enforcement of the CC&Rs (via the January 2015 letter) during the Morrises' purchase process provided the Morrises with enough alleged coercion, intimidation, threat, or interference to support retrial of their claim under § 3617.

Thus, a key takeaway is that associations must be cautious in their communications with current or prospective homeowners not to threaten, intimidate, or interfere with that homeowner's right to purchase and enjoy their home free from discrimination. Importantly, discrimination does not need to be the sole factor; it just needs to be a motivating factor. 

Another key takeaway is that the Court utilizes an objective “ordinary reader” standard to determine whether any communication by the Association to a current or prospective resident is discriminatory under 3406(c). This standard asks whether an ordinary reader would view the letter, notice, or other communication showing that the Board intended to discriminate.

Lastly, remember Courts construe the Fair Housing Act liberally, so if you are unsure about whether a specific communication may lead to a violation of the FHA or need advice on how to deal with a difficult situation, don't hesitate to contact your Association's legal counsel.