Class Action Lawsuit for Mold Injuries Can Continue Against PHA

Facts: Two residents filed for a class action lawsuit on behalf of themselves and others similarly situated, for damages related to their alleged exposure to mold while living in housing developments operated by the local PHA. Originally, the residents sought to define the potential class as all residents affected by mold who occupied units managed by the PHA on Dec. 1, 1980, through the present. The trial court then decided to make the potential pool of residents joining the lawsuit smaller by restricting the class definition to start in 1998, the year HUD regulation Part 5, Sec. 5.703(f) contractually bound the PHA to keep the units and common areas free of mold.

The PHA asked the court to reverse the class certification based on this reliance on federal regulation. The PHA argued that because the HUD regulation doesn’t provide a private cause of action it couldn’t be used to define who may be allowed to join the class action lawsuit. Therefore, the pool of residents joining the lawsuit couldn’t be certified.

Ruling: A Louisiana appeals court upheld the lower court’s decision to grant the residents’ request for class certification.

Reasoning: An order certifying the residents’ class action suit against the PHA was proper under state law because the potential class of plaintiffs involved nearly 3,000 leaseholders and residents who had been exposed to mold. The claims of the class members had a sufficient common character and were derived from a common source. The residents assert that the evidence presented to the trial court, including testimony and the PHA’s own maintenance records, demonstrates that the PHA was fully aware of the mold infestation, but failed to properly remediate the problem as required by the lease agreements with HUD.

In addition, although the court recognized that that 24 CFR §5.703(f) doesn’t confer a private right of action upon the residents, the court found that as a public safety regulation, it may be utilized in determining whether the PHA violated its duties and obligations under state law.

• Jones v. Housing Authority of New Orleans, April 2015