Commercial: Owner sues private, gated community for discrimination and retaliation

Where the parties disputed whether a private, gated community objected to a group home for elderly people with disabilities for legitimate reasons or whether its objections were pretexts for unlawful retaliation and discrimination, a jury will have to resolve these disputes.

Background

This case is the culmination of a long-running dispute between the Gibson Island Corporation, a homeowners association for a private, gated community on the Chesapeake Bay in Anne Arundel County, Maryland, and Craig Lussi, a long-time Gibson Island homeowner who operates three assisted living group homes for seniors with disabilities in other parts of the County.

This suit arose in 2020, when Lussi went forward with a plan to open another group home for elderly people with disabilities, this one on Gibson Island. The Corporation invoked a restrictive covenant prohibiting the use of Gibson Island homes for business purposes without the Corporation’s approval. When no resolution was reached, this suit followed.

The operative complaint alleges that the Corporation had violated the federal Fair Housing Act and Maryland’s fair housing laws by refusing to grant a reasonable accommodation for his group home, by retaliating against Lussi’s effort to provide such housing and by discriminating on the basis of disability. The district court granted summary judgment to the Corporation on all claims.

Reasonable accommodation

The district court granted summary judgment to the Corporation on Lussi’s reasonable accommodation claims because Lussi could not show the required “direct linkage” between his proposed group home and the provision of an equal housing opportunity for people with disabilities. The district court reasoned the evidentiary record established that removal of the four disputed conditions on approval of Lussi’s project was not “necessary” to allow for the use of the proposed group home by future residents with disabilities. For instance, the district court found, Lussi’s compliance with the proposed septic condition – annual certifications and daily monitoring – would in no way compromise the enjoyment of his property by a disabled resident, making removal of the condition “unnecessary” as a matter of law.

The problem with this analysis is that the district court was asking the wrong question. What matters under the necessity prong is whether a proposed accommodation is necessary to provide equal housing opportunities. So here, the question is whether the accommodation actually requested by Lussi – an exception to the business-purpose covenant for his proposed group home – was “necessary” to provide prospective residents an equal opportunity to use and enjoy their housing of choice. By asking instead whether removal of the Corporation’s proposed conditions was “necessary,” the district court erred.

When focusing on the right question – whether an exemption from Gibson Island’s business-purpose covenant is “necessary” to provide Lussi’s prospective residents with equal housing opportunity – the record in this case admits of only one answer. The requested exemption from the business-purpose covenant is “necessary” because without it, Lussi will not be able to operate what would be the only facility that would allow elderly and disabled people an equal opportunity to enjoy the housing of their choice.

That leaves the question of “reasonableness,” on which there are material factual disputes that preclude summary judgment. Accordingly, the district court erred in granting summary judgment to the Corporation. When it comes to the “reasonableness” of Lussi’s proposed accommodation, this case presents a jury question.

Discrimination/retaliation

The Corporation’s reasons for insisting on the disputed conditions are central to the reasonable accommodation inquiry. But the same questions are also relevant to Lussi’s remaining claims, with Lussi alleging that the disputed conditions are nothing more than pretexts for unlawful retaliation and discrimination. The court concludes that these overlapping inquiries, too, must be undertaken by a jury.

Focusing first on the retaliation claim, this record would allow a jury to find that the Corporation sought to block Lussi’s latest proposal because of Lussi’s advocacy for FHA-protected housing on or near Gibson Island. A jury could credit, but also could question, the Corporation’s stated rationales for refusing to approve Lussi’s project without the four disputed conditions.

This court also cannot agree with the district court that there is “no evidence,” direct or circumstantial, from which a reasonable jury could find discriminatory intent behind the Corporation’s refusal to approve what would be Gibson Island’s first and only assisted living facility for disabled people.

Vacated and remanded.

Group Home on Gibson Island LLC v. Gibson Island Corporation, Case No. 23-2295, July 15, 2025. 4th Cir. (Harris), from DMD at Baltimore (Griggsby). Steven M. Klepper for Appellants. Stacie Eileen Tobin for Appellee. Teresa Kwong for Amicus Curiae United States. VLW 025-2-261. 26 pp.