United States v. American Institute of Real Estate Appraisers of the National Ass'n of Realtors

442 F. Supp. 1072, 24 Fed. R. Serv. 2d 880, 1977 U.S. Dist. LEXIS 12760
CourtDistrict Court, N.D. Illinois
DecidedNovember 23, 1977
Docket76 C 1448
StatusPublished
Cited by30 cases

This text of 442 F. Supp. 1072 (United States v. American Institute of Real Estate Appraisers of the National Ass'n of Realtors) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. American Institute of Real Estate Appraisers of the National Ass'n of Realtors, 442 F. Supp. 1072, 24 Fed. R. Serv. 2d 880, 1977 U.S. Dist. LEXIS 12760 (N.D. Ill. 1977).

Opinion

MEMORANDUM

LEIGHTON, District Judge.

This cause is before the court on the motion of F. Gregory Opelka and 71 other individuals for leave to intervene and oppose a proposed settlement' agreement between plaintiff United States and defendant American Institute of Real Estate Appraisers (hereinafter “AIREA” or “Institute”). Also, the settling parties have applied for entry of the proposed settlement order, approval of the - settlement agreement and a confidentiality order between the United States and AIREA. For the following reasons, the motion to intervene as of right under Rule 24(a)(2), Fed.R. Civ.P., is denied; but the court grants Opelka leave to intervene permissively under Rule 24(b), Fed.R.Civ.P., solely for the purpose of contesting the legality of the settlement agreement insofar as it may infringe his' constitutional right to freedom of speech. Further, the settlement order, the agreement, and the confidentiality order between the United States and AIREA are approved; their immediate entry is ordered.

I.

On April 16,1976, the United States filed this suit against four organizations: The American Institute of Real Estate Appraisers, the Society of Real Estate Appraisers, the United States League of Savings Associations, and the Mortgage Bankers Association of America, pursuant to 42 U.S.C. § 3613, to secure relief from alleged violations of the Fair Housing Act, Title VIII of the Civil Rights Act of 1968, 42 U.S.C. §§ 3601, et seq. (hereinafter the “Fair Housing Act”). The complaint alleges that since the effective date of the Fair Housing Act, defendants have engaged in unlawful discriminatory practices by promulgating standards which have caused appraisers and lenders to treat race and national origin as negative factors in determining the value of dwellings and in evaluating- the soundness of home loans; and by failing to take adequate steps to correct the continuing effect of past discrimination and ensure non-discrimination by appraisers and lenders whose practices are subject to the influence or authority of the four organizations. Defendants’ practices, it is alleged, have made dwellings unavailable to persons because of race and national origin; denied home loans to such persons; and have interfered with their exercise and enjoyment of rights secured by the Fair Housing Act in violation of 42 U.S.C. §§ 3604(a), 3605, and 3617. The United States seeks injunctive and declaratory relief from these alleged violations. Jurisdiction is invoked under 42 U.S.C. § 3613 and 28 U.S.C. § 1345.

After extensive negotiations, which included development of an affirmative action program, 1 the United States and AI-REA have agreed not to seek a litigated resolution of their controversy. Instead, they have applied for entry of a settlement order which incorporates a proposed settlement agreement and affirmative action program. The agreement is divided into two parts: (1) the affirmative action program (Pts. I — VI); and (2) a plan for imple *1077 mentation of the agreement and resolution of the litigation (Pts. VII-VIII).

In the affirmative action section, it is agreed that AIREA will adopt three fundamental policy statements:

(1) It is improper to base a conclusion or opinion of value upon the premise that the racial, ethnic, or religious homogeneity of the inhabitants of an area or or a property is necessary for maximum value.
(2) Racial, religious or ethnic factors are deemed unreliable predictors of value trends or price variance.
(3) It is improper to base a conclusion or opinion of value, or a conclusion with respect to neighborhood trends, upon stereotyped or biased presumptions relating to race, color, religion, sex or national origin or upon unsupported presumptions relating to the effective age or remaining life of the property being appraised or the life expectancy of the neighborhood in which it is located.

AIREA is to implement these stated general policies through specific changes in its textbook, The Appraisal of Real Estate, through review and, if necessary, prompt revision of its other instructional materials, courses, and seminars to ensure that they reflect the policy statements. Further, AI-REA is to prepare, for use in its courses, an educational memorandum which explains civil rights legislation pertinent to the real estate appraisal profession. It is to develop special seminars for its members and the general public concerning appraisal of real estate and explaining the general policies and educational memorandum. AIREA agrees to add new explanatory comments to Canon 4 of Regulation 10 of its Code of Professional Ethics and Standards of Professional Conduct. The comment is to clarify its position with respect to appraisal practices and its commitment to the stated general policies. In addition, it will add to the explanatory comments to Canon 5 a new reporting rule which provides, in part:

All written appraisal reports relating to residential real estate which state that a neighborhood is undergoing decline or is about to undergo decline must contain the specific facts or reasoning upon which the . . . conclusion . ;' . is based.

A similar provision is made requiring that the specific facts or reasoning upon which similar oral appraisal reports are based must be contained in the appraiser’s files. AIREA will issue a new interpretation of Canon 6 which states that it is not improper for an appraiser to permit a government agency investigating alleged unlawful activity to have access to appraisal reports. The decision to permit or deny such access is reserved to the appraiser. AIREA agrees to maintain a procedure for review of the appraisal reports relating to residential real estate in order to ensure that members and candidates understand the general policies. It will also expand its recruitment and scholarship outreach program which is aimed at acquainting women and minority group members with opportunities in the real estate appraisal profession.

The implementation section of the settlement agreement provides a termination date at which time the parties will petition the court for dismissal of AIREA from the litigation. AIREA is to advise the OF-HEO/OVC and the United States of each material step taken to implement the agreement. However, it is provided that no part of the agreement

shall be interpreted to limit AIREA’s right to implement its plans or publish or distribute any materials which it has developed [pursuant to the affirmative action plan] without prior approval of Justice.

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Bluebook (online)
442 F. Supp. 1072, 24 Fed. R. Serv. 2d 880, 1977 U.S. Dist. LEXIS 12760, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-american-institute-of-real-estate-appraisers-of-the-ilnd-1977.