In January 2020, the Firm brought suit under the False Claims Act, on behalf of Marcie McGuinn, alleging that JL Gray Company and its affiliates submitted false statements, certifications and claims for payment related to compliance with federal accessibility requirements at dozens of apartment complexes owned or managed by Defendants.
The matter resolved in September 2024, with Defendants agreeing to repay the federal government $350,000 and pay $100,000 in attorneys' fees to Ms. McGuinn's counsel. Out of its settlement proceeds, the federal government paid a “relator’s share” to Ms. McGuinn, who first alerted the government to Gray’s alleged noncompliance with accessibility requirements in dozens of properties owned or managed by Gray in New Mexico and four other states.
In response to the allegations in the complaint, Gray conducted accessibility surveys at more than 50 RD-funded developments confirming accessibility barriers at nearly all of them and ensuring Gray is on notice of these violations.
Congress authorized a number of USDA/RD programs to support the development of affordable housing for lower-income households in rural areas and required that multifamily apartment complexes built and operated with USDA/RD funding be accessible to people with disabilities. The complaint alleged that, given their extensive involvement in the development and management of dozens of affordable rental communities in five states for over thirty-years, Defendants knew of the USDA/RD housing requirements, and knew they were not complying with those requirements. In doing so, J.L. Gray and its affiliates deprived the federal government and people with disabilities affordable and accessible housing.
In order to receive capital and rental assistance funds from the U.S. Department of Agriculture’s Rural Development (“RD”) program, an owner or manager has to certify that the units and common areas in an apartment community comply with the accessibility requirements of the Fair Housing Act and the Uniform Federal Accessibility Standards. Because RD-funded buildings often provide the only subsidized housing in rural communities, the failure to comply with these requirements—including accessibility ramps, wider doors, larger kitchens, roll-in showers and grab bars—can make it impossible for people with disabilities to live in them. Through her employment at RD, Ms. McGuinn personally observed conditions at Gray properties that did not comply and therefore excluded people with mobility impairments.
The Relman Colfax case team includes Michael Allen, Zoila Hinson, and Ted Olds, with paralegal assistance from Taylor Gaskins. Our co-counsel is Robert Collins with Collins Law Office in Olathe, Kansas.
A copy of the settlement agreement is attached.