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Relman, Dane & Colfax Files Complaint Against Insurance Companies for Discrimination Against Housing Choice Voucher Participants in New Orleans

On September 14, 2017, Relman, Dane & Colfax filed a lawsuit in the U.S. District Court for the Eastern District of Louisiana, alleging that three insurance companies discriminate on the basis of race, sex and familial status by denying liability insurance (or charging higher premiums) to landlords who accept tenants with federal rental subsidy vouchers.

Plaintiffs in the case are Dr. Andre Baugh—a New Orleans property owner whose liability policy was cancelled by Covington Specialty Insurance Company because he rents to tenants under the Housing Choice Voucher (HCV) Program—and Greater New Orleans Fair Housing Action Center (GNOFHAC), which undertook significant public education and outreach efforts to counteract the insurers’ discriminatory policies. The HCV Program provides housing subsidies to low-income individuals and families seeking housing in the private rental market.Referring to the HCV Program by its former name, Dr. Baugh’s insurance agent told him that Covington explained its cancellation decision by saying it was “not in the business of doing Section 8,” citing higher crime in “Section 8 areas.” Dr. Baugh was forced to obtain a more expensive insurance policy from another company, Mesa Underwriters Specialty Insurance Company, which charges higher premiums to landlords renting to HCV participants than to others. Mesa is named as a defendant in this lawsuit. Hull & Company, Inc., an insurance broker that issues policies for both Covington and Mesa in Louisiana, is also named as a defendant.

In New Orleans, the use of underwriting and eligibility criteria based on the presence of HCV tenants has a disproportionate and adverse effect on African Americans, female-headed households, and families with children. The complaint also alleges that such discriminatory policies fall most heavily on African-American neighborhoods in New Orleans, where the concentration of HCV-participating households is markedly higher than in the city’s predominantly white neighborhoods.

The lawsuit seeks to enjoin the defendants from continuing to employ these discriminatory, harmful, and unnecessary insurance underwriting and eligibility criteria, to make insurance available to landlords and housing providers in New Orleans on equal terms regardless of whether their tenants include HCV participants, and to compensate Plaintiffs for their economic and other injuries resulting from Defendants’ discriminatory practices.

The firm’s litigation team is led by Stephen Dane and Joseph Wardenski. GNOFHAC is represented by its Legal Director, Elizabeth Owen. In addition, Galen Hair of Scott, Vicknair, Hair & Checki, is co-counsel.

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