FHA Violation

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7^th Circuit Court of Appeals

Case Name: New West, L.P. et al. v. City of Joliet, Illinois, et al.

Case No.: 17-2865

Officials: EASTERBROOK, SYKES, and BARRETT, Circuit Judges.

Focus: FHA Violation

This is the fourth published appellate opinion in a long-running dispute between New West and the City of Joliet. New West filed this suit in March 2005, contending that the City had interfered with the way in which it set rents at the Evergreen Terrace apartment complex under the national government’s mark-to-market program for rates at subsidized apartments. New West also contended that the City was violating the Fair Housing Act (FHA), 42 U.S.C. §§ 3601–31, and many other rules of state and federal law. Our first decision held that these claims belong to New West, not its renters (as the district court had held). 491 F.3d 717 (7th Cir. 2007).

New West’s current problem is of its own making. It concedes that the FHA was not a compulsory counterclaim in the condemnation suit. New West’s lawyer asserted at oral argument that it presented the FHA arguments as defenses to the City’s suit because it was afraid that, otherwise, the judge would have deemed them forfeited or waived. That’s inconceivable. This suit began six months before the condemnation action; nothing in it has been forfeited or waived. When New West imported its FHA claim into the condemnation action, Joliet protested, asking the judge to rule that the FHA has no place in an eminent-domain action. Joliet thus waived any argument that the FHA theories had to be presented as defenses in the City’s suit. New West was free to reserve the FHA claim for this suit, where it would have been entitled to a jury trial. Its FHA claim was resolved in a bench trial only because New West insisted on presenting it there.

The condemnation action could have been resolved speedily by leaving the FHA claim to this suit. Once we held in 2009 that federal financing did not block the use of state and local eminent-domain powers, the condemnation claim could have gone to trial with a simple question: Was the taking for a public purpose? Then the FHA claim could have been resolved, by a jury, in this suit. But New West wanted the FHA to be treated as a defense to condemnation, and the district court acquiesced. New West’s own choice is responsible for the fact that a judge rather than a jury brought the FHA claim to a conclusion.

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.