Gilead: Municipal Liability for Punitive Damages Under the Fair Housing Act

The 1968 Fair Housing Act (“FHA”) has always been understood to apply to local governments, which have proved to be among the most frequent and significant violators of this law, especially in their opposition to housing of particular value to racial minorities and persons with disabilities. Yet not until the Second Circuit’s decision last year in Gilead Community Services, Inc. v. Town of Cromwell did an appellate court approve an FHA-based punitive-damage award against a municipality. Before Gilead, district courts had generally blocked such awards, applying § 1983’s immunities to protect local governments and their officials from the FHA’s full set of remedies. In rejecting this approach, Gilead charts a new course, offering a potential breakthrough for deterring municipal housing discrimination. This Article reviews the issues raised in Gilead and the potential impact of that decision. After providing the relevant background and analyzing the Second Circuit’s decision, the Article identifies the various types of FHA claims that have been brought against local governments. It then discusses other key issues—including whether Gilead’s endorsement of punitive damages in these cases might also extend to claims of non-intentional discrimination and whether Gilead might open the way for stripping local officials of their § 1983 immunities in FHA cases—that must be considered if Gilead’s promise of a more robust remedial arsenal for the FHA is to be fulfilled.