Alexander v. RIGA

Opinions of the United
2000 Decisions States Court of Appeals
for the Third Circuit
3-22-2000
Alexander v RIGA
Precedential or Non-Precedential:
Docket 98-3597 and 98-3622
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Recommended Citation
"Alexander v RIGA" (2000). 2000 Decisions. Paper 63.
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Filed March 22, 2000
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 98-3597 and 98-3622
RONALD ALEXANDER; FAYE ALEXANDER;
FAIR HOUSING PARTNERSHIP OF GREATER
PITTSBURGH, INC.,
Appellants in No. 98-3597
v.
JOSEPH RIGA; MARIA A. RIGA a/k/a Carla Agnotti
RONALD ALEXANDER; FAYE ALEXANDER;
FAIR HOUSING PARTNERSHIP OF GREATER
PITTSBURGH, INC.,
v.
JOSEPH RIGA; MARIA A. RIGA a/k/a Carla Agnotti
JOSEPH RIGA and MARIA A. RIGA,
Appellants in No. 98-3622
Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Civ. No. 96-cv-00049)
District Judge: Honorable William L. Standish
Argued
October 18, 1999
Before: SLOVITER, MANSMANN and ROTH,
Circuit Judges.
(Filed March 22, 2000)
Timothy P. O'Brien, Esquire
Mitchell, O'Brien & Kakoff
429 Forbes Avenue
1705 Allegheny Building
Pittsburgh, PA 15219
Caroline Mitchell, Esquire (ARGUED)
707 Grant Street
3700 Gulf Tower
Pittsburgh, PA 15219
Counsel for Ronald Alexander,
Faye Alexander, and Fair Housing
Partnership of Greater Pittsburgh
Thomas M. Hardiman, Esquire
(ARGUED)
Joseph P. McHugh, Esquire
Reed, Smith, Shaw & McClay
435 Sixth Avenue
Pittsburgh, PA 15219-1886
Counsel for Joseph Riga and
Maria Riga
Rebecca K. Troth, Esquire (ARGUED)
United States Department of Justice
Civil Rights Division
P.O. Box 66078
Washington, DC 20035-6078
Counsel for Amicus Curiae --
United States of America
Charles S. Ralston, Esquire
NAACP Legal Defense & Educational
Fund
99 Hudson Street
16th Floor
New York, NY 10013
Counsel for Amicus-Appellant
2
OPINION OF THE COURT
MANSMANN, Circuit Judge.
The present case arises essentially as an appeal by the
plaintiffs Ronald and Faye Alexander ("the Alexanders") and
the Fair Housing Partnership of Greater Pittsburgh, Inc.
("the FHP") from a judgment entered in the United States
District Court for the Western District of Pennsylvania.1 The
Alexanders and the FHP brought suit against Joseph and
Maria Riga ("the Rigas"), the owners of the building in the
Squirrel Hill neighborhood of Pittsburgh in which the
Alexanders sought to rent an apartment. In their suit, the
Alexanders and the FHP alleged racial discrimination in the
rental of housing pursuant to the Fair Housing Act of 1968,
as amended, 42 U.S.C. S3601 et seq., and the Civil Rights
Act of 1866, as amended, 42 U.S.C. SS1981 and 1982. In
their complaint, the Alexanders and the FHP sought
damages, as well as equitable and injunctive relief.
Following an eight-day trial in the District Court, the jury
found, on special verdicts, that Mrs. Riga had violated the
Fair Housing Act when she denied rental housing to the
Alexanders based upon race. Nonetheless, the jury found
Mrs. Riga's conduct was not "a legal cause of harm" to the
Alexanders and did not award damages. The jury found
that Mrs. Riga's conduct was "a legal cause of harm" to the
FHP, but, likewise, did not award damages. Thus, the
District Court declined to submit to the jury the issue of
punitive damages, which had been bifurcated from the
liability portion of the case. Following post-trial motions,
the District Court entered judgment in favor of the Rigas
(the defendants) and the FHP, and against the Alexanders,
and directed the parties to bear their own costs.
On appeal, the Alexanders (the plaintiffs), supported by
the NAACP Legal Defense & Educational Fund and the
United States Department of Justice as amici curiae, raise
_________________________________________________________________
1. The Rigas, in a cross-appeal, assert that the District Court erred in
denying them summary judgment, in excluding evidence, and in denying
them costs.
3
a host of issues related principally to the jury instructions
and the conduct of the trial. We have jurisdiction to review
the District Court's final judgment pursuant to 28 U.S.C.
S 1291.
Because we find that in a case alleging discrimination
under the Fair Housing Act the discrimination itself is the
harm, we will reverse the decision of the District Court
granting judgment to the Rigas as against the Alexanders
and the decision declining to submit the question of
punitive damages to the jury. We will direct the District
Court on remand to enter judgment for the Alexanders and
to hold a new trial to present to a jury the question of
punitive damages, as against both Mr. and Mrs. Riga.
I.
From September 17, 1995, through October 8, 1995, on
ten separate occasions, Ronald and/or Faye Alexander, an
African-American couple, inquired about an apartment at
5839 Darlington Road, Squirrel Hill, which had been
advertised in a September 17 newspaper. Joseph and Maria
Riga owned the building, which Mrs. Riga managed. Mrs.
Riga falsely told the Alexanders that the apartment was
unavailable and the Alexanders were denied a view. Their
phone calls to inquire about the apartment were not
returned. Daria Mitchell, an African-American "tester" for
the FHP, was falsely told that the apartment had been
rented, and thereafter, Mrs. Riga refused to return
Mitchell's calls.
In contrast, from September 18 through October 9, 1995,
on ten separate occasions, Mrs. Riga truthfully told Dennis
Orvosh, a white tester for the FHP, and whites Robin
McDonough, Jeff Lang, and Heidi Sestrich, that the
apartment was available, allowed each a view, and returned
their phone calls.
On January 11, 1996, the Alexanders and the FHPfiled
this civil action against the Rigas. In their complaint, the
plaintiffs sought damages, as well as equitable and
injunctive relief, for alleged race discrimination. Specifically,
the plaintiffs alleged that the Rigas discriminated against
the individual plaintiffs on the basis of their race in
4
violation of the Fair Housing Act in connection with the
attempts of Mr. and Mrs. Alexander to view a rental
property owned by the Rigas in Squirrel Hill. The Fair
Housing Act prohibits discrimination in the sale or rental of
housing, including the refusal to negotiate for the rental of,
or otherwise make unavailable or deny, a dwelling to any
person because of race; to discriminate against any person
in the terms, conditions or privileges of rental of a dwelling
because of race; or to represent to any person because of
race that any dwelling is not available for inspection, sale
or rental when such dwelling is, in fact, available. See 42
U.S.C. SS 3604(a), (b) and (d). The plaintiffs sought
equitable relief including an order requiring the posting of
fair housing notices and a cease and desist order
prohibiting the Rigas from discriminating on the basis of
race.
Following an eight-day trial in May, 1998, a jury returned
eight special verdicts. The jury found that Mrs. Riga had
discriminated against the Alexanders in violation of the Fair
Housing Act. Nonetheless, the jury found that the
discriminatory conduct of Mrs. Riga was not "a legal cause
of harm" to either Mr. or Mrs. Alexander, and declined to
award them monetary damages.2 As to the FHP, the jury
found that the discriminatory conduct of Mrs. Riga was "a
legal cause of harm" to the FHP, however, here, too, the
jury declined to award monetary damages. The issue of
punitive damages had been bifurcated from the issues of
liability and compensatory and/or nominal damages. After
the return of the jury's special verdicts, the court declined
to submit the issue of punitive damages to the jury. Based
on the special verdicts, the District Court entered judgment
in favor of the Rigas and against the plaintiffs, together
with costs, on May 26, 1988.
On May 28, 1998, the plaintiffs filed four post-trial
_________________________________________________________________
2. Although both Mr. and Mrs. Riga were defendants at trial, the special
verdicts that were submitted to the jury were limited to determining Mrs.
Riga's liability for discriminatory conduct. The District Court concluded,
mistakenly, as discussed infra, that only Mrs. Riga was involved in the
events leading to this lawsuit because Mr. Riga was in Italy at all
relevant times.
5
motions: (1) to enter a judgment notwithstanding the
verdict, to issue an additur of nominal damages in the
amount of one dollar for each plaintiff, or to grant a new
trial on damages, or in the alternative, award punitive
damages as a matter of law against both Mr. and Mrs. Riga;
(2) for a hearing on injunctive relief; (3) for attorney's fees,
costs and expenses; and (4) to grant the plaintiffs judgment
as a matter of law. The Rigas moved to tax costs against
the plaintiffs.
On October 13, 1998, the District Court denied the
plaintiffs' motions except for the FHP's motion to have
judgment entered in its favor, denied the Rigas' motion to
tax costs, and entered judgment. The plaintiffsfiled a
timely notice of appeal on November 5, 1998. The Rigas
also filed a timely cross-appeal.
On appeal, the plaintiffs put forth several major
contentions. They assert that the District Court should
have entered judgment for them because the jury charges
presented an incorrect legal standard with respect to
liability. The plaintiffs further maintain that the District
Court presented an incorrect legal standard with respect to
nominal damages and erred in refusing to submit the issue
of punitive damages to the jury after the jury found that
Mrs. Riga had discriminated on the basis of race in
violation of the Fair Housing Act but awarded neither
compensatory nor nominal damages. The plaintiffs argue,
too, that both Mr. and Mrs. Riga should be subjected to
punitive damages, because, although Mr. Riga was out of
the country at this time, he violated a nondelegable duty
not to discriminate under the Fair Housing Act.
II.
The Fair Housing Act was intended by Congress to have
"broad remedial intent." Havens Realty v. Coleman, 455
U.S. 363, 380 (1982). As this case stands after trial, the net
result of the plaintiffs' victory was that they were out-of-
pocket for the expenses of litigation. Historically,
enforcement of the civil rights statutes depends, in large
measure, on the willingness of private plaintiffs to pursue
individual cases. The Supreme Court has attached
6
importance to each individual's prosecution of
discrimination under the statutes:
the objectives of the [discrimination statutes] are
furthered when even a single [individual] establishes
that [another individual] has discriminated against him
or her. The disclosure through litigation of incidents
and practices that violate national policies respecting
nondiscrimination . . . is itself important.
McKennon v. Nashville Banner Pub., 513 U.S. 352, 358 - 59
(1992). And, with respect to the Fair Housing Act in
particular, the Supreme Court has held that
since the enormity of the task of assuring fair housing
makes the role of the [United States] Attorney General
in the matter minimal, the main generating force must
be private suits in which . . . the complainants act not
only on their own behalf but also "as private attorneys
general in vindicating a policy that Congress
considered to be of the highest priority."
Trafficante v. Metropolitan Life Ins., 409 U.S. 205, 211
(1972).
III.
A. The Alleged Errors in the Jury Instructions
The Alexanders argue on appeal that, after the jury's
verdict that the Fair Housing Act was violated, the District
Court was required to enter judgment in favor of them and
the FHP.3 All plaintiffs allege on appeal primarily two flaws
in the District Court's jury instructions. The plaintiffs
specifically argue that the District Court erred: (1) in
requiring that the jury find "legal causation" for "harm" as
a prerequisite to finding liability under the Fair Housing
Act, and (2) in requiring that the jury find "insubstantial"
actual damages or "legal harm" as a prerequisite to
awarding nominal damages.
_________________________________________________________________
3. Ultimately, the District Court did grant judgment in the FHP's favor,
but did not award any damages.
7
Unfortunately, a party who has not challenged the trial
court's jury instructions at an appropriate time is deemed
to have waived such a challenge. We have emphasized the
need to raise any objections to jury instructions prior to the
time the jury begins its deliberations:
Under Fed. R. Civ. P. 51, a party, in order to preserve
an objection either to a failure to instruct the jury on
an issue or to the manner in which the jury was
instructed, clearly must "object[ ] thereto before the
jury retires to consider its verdict, stating distinctly the
matter objected to and the grounds of the objection."
See also, McAdam v. Dean Witter Reynolds, 896 F.2d
750, 759 (3d Cir. 1990) (declining to consider newly
developed argument concerning jury charge deficiency
where party "failed to specifically and clearly object to
either the charge or the entry of a judgment . . . based
on this charge"); Waldorf v. Shuta, 896 F.2d 723, 739-
40 (3d Cir. 1990) (holding that objection, because
sufficiently specific, had preserved error alleged on
appeal).
Simmons v. Philadelphia, 947 F.2d 1042, 1078 (3d Cir.
1990), cert. denied, 503 U.S. 985 (1992). Generally, a party
who does not clearly and specifically object to a charge he
believes to be erroneous waives the issue on appeal. Id.
If the party claiming error in the jury instructions did not
make a timely objection, we review for plain error and we
will reverse only if the trial court committed plain error that
was fundamental and highly prejudicial, such that the
instructions failed to provide the jury with adequate
guidance, and the District Court's refusal to consider the
issue would result in a miscarriage of justice. Cooper
Distrib'g v. Amana Refrig.,180 F.3d 542, 549 - 550 (3d Cir.
1999). Fed. R. Civ. P. 51. We have characterized plain error
review in the absence of a "timely and specific objection," as
"a form of discretionary review that we have exercised
sparingly . . . ." Id., see also Bowley v. Stotler, 751 F.2d
641, 652 (3d Cir. 1985); see also United States v. 564.54
Acres of Land, 576 F.2d 983, 987 (3d Cir. 1978) (under
plain error doctrine, court may review jury instruction if
error is "fundamental and highly prejudicial" and failure to
8
consider it "would result in a miscarriage of justice"), rev'd
on other grounds, 441 U.S. 506 (1979).
In short, our discretion to conduct a review under the
plain error doctrine is limited to cases where the error is (1)
fundamental and highly prejudicial or if the instructions
are such that the jury is without adequate guidance on a
fundamental question and (2) our failure to consider the
error would result in a miscarriage of justice. 564.54 Acres
of Land at 576 F.2d at 987 - 988. Consistent with our belief
that this discretionary power should be exercised sparingly,
we will review the purported deficiencies in the jury
instructions to determine whether they have been properly
preserved and constitute grounds either for reversing the
District Court's decision or for a new trial. The issue of
whether a jury instruction misstates the proper legal
standard is subject to plenary review. Hopp v. Pittsburgh,
194 F.3d 434, 440 (3d Cir. 1999).
1. The Alleged Error on Liability
The plaintiffs assert that the District Court's liability
instruction was inaccurate and misleading and might have
caused the jury not to award any damages despite their
finding of a Fair Housing Act violation. Though the jury
found that Mrs. Riga had discriminated against the
Alexanders, the jury found that there was no liability. The
Alexanders did not receive a liability verdict because they
were unable to prove "causation." On the other hand, the
FHP did receive a liability verdict; the jury found that there
was "legal cause" as to the FHP caused by Mrs. Riga's
discriminatory acts.
This is a statutory form of action. The Fair Housing Act
provides that "[a]n aggrieved person may commence a civil
action in an appropriate United States district court or
State court not later than 2 years after the occurrence or
the termination of an alleged discriminatory housing
practice . . . to obtain appropriate relief with respect to
such discriminatory housing practice or breach."4 42 U.S.C.
_________________________________________________________________
4. The FHP, a fair housing organization, is an "aggrieved person" under
the statute and is entitled to obtain relief, including punitive damages.
9
S3613(a)(1)(a). The Fair Housing Act defines"discriminatory
housing practice," in pertinent part, as follows:
(a) To refuse to sell or rent after the making of a
bona fide offer, or to refuse to negotiate for the sale or
rental of, or otherwise make unavailable or deny, a
dwelling to any person because of race, color, religion,
sex, familial status, or national origin.
***
(d) To represent to any person because of race, color,
religion, sex, handicap, familial status, or national
origin that any dwelling is not available for inspection,
sale, or rental when such dwelling is in fact so
available.
42 U.S.C. S3604.5 The plain language of the Fair Housing
Act thus permits an individual to obtain relief for the
discriminatory housing practice or breach. A prospective
tenant must prove only that a landlord did one of the
unlawful acts listed in section 3604 with respect to the
prospective tenant's attempt to obtain housing. If an
individual proves discrimination, he or she need not prove
anything else. The District Court imposed upon the statute
another requirement, "legal causation." The Rigas argue
that the discrimination is the "legal cause" for the "harm,"
which itself must be proved. To the contrary, the"harm" is
the discrimination.
_________________________________________________________________
See Havens Realty, 455 U.S. at 379 (1982); See also Growth Horizons v.
Delaware County, 983 F.2d 1277, 1281-82 (3rd Cir. 1993); See also
Hope, Inc. v. DuPage County, 717 F.2d 1061, 1074 (7th Cir. 1983). On
appeal, the Rigas have challenged the FHP's standing in this case. We
note that the Supreme Court has held that a fair housing organization
had standing to sue if the discriminatory acts impaired the
organization's ability to carry out its mission. Havens Realty, 455 U.S.
at
378 - 379. Here, the FHP staff "stopped everything else" and devoted all
attention to this case. It, moreover, diverted resources to investigate
and
to counter the Rigas' conduct.
5. In conjunction with the Fair Housing Act "Definitions" at 42 U.S.C.
S3602.
10
The Alexanders felt themselves to be the victims of
housing discrimination and sued the Rigas under the Fair
Housing Act, both to vindicate their unlawful treatment and
the public interest in fair housing. One "unlawful act" of
several which falls under the ambit of section 3604 is that
the Alexanders were told that the apartment was not
available, when it was. The statute directly focuses on that
situation, seeks to deter it, and seeks to remedy it. At trial,
the Alexanders related what transpired during their
housing search and also described additional adverse
consequences, such as emotional distress, for which they
sought compensatory damages. Although the jury declined
to award compensatory damages for any adverse
consequences flowing from the discrimination, the jury
believed that the Alexanders were indeed victims of illegal
discrimination.
We conclude that the District Court misstated the proper
legal standard in this Fair Housing Act case by requiring
"legal causation" beyond a showing of illegal discrimination.
Nonetheless, we find that the plaintiffs did not make a
timely objection to the jury charge on this issue and have
so waived it. The plaintiffs did not object to this
requirement of "legal causation" at the close of the jury
instructions. Moreover, the attorneys for both plaintiffs had
previously participated in a charge conference in which
they met with the judge and agreed upon instructions.
Under a plain error analysis, unquestionably, the
instructions requiring "legal causation" failed to provide the
jury with adequate guidance as to compensatory damages.6
See Tyus v. Urban Search Management, 102 F.3d 256,
265(7th Cir. 1997)(instruction "confusing" where jury
charged that one element of a Fair Housing Act violation is
_________________________________________________________________
6. The Rigas urge that our holding in Gunby v. Pennsylvania Elec., 840
F.2d 1108, 1121 - 1122 (3d Cir. 1988), cert. denied, 492 U.S. 905 (1989)
mandates that, to determine liability in a Fair Housing Act case, a jury
find "causation" linked to "actual injury." Gunby is inapplicable here. In
Gunby, the plaintiff did not present evidence that he suffered any
emotional distress as a result of the loss of the sought-after job. Thus,
we set aside the jury's award of compensatory damages for emotional
distress, holding that emotional distress cannot be presumed and that
speculative damages are not to be awarded.
11
proof that the discriminatory housing practice caused
"actual injury"), cert. denied, 520 U.S. 1251 (1997). The
second criterion for plain error, however, is that our refusal
to consider the issue would result in a miscarriage of
justice.
The plaintiffs have conceded that they did not make a
claim for substantial compensatory damages. Further, we
cannot say, in light of our decision taken as a whole, which
should afford substantial relief to the plaintiffs, see B. The
Assignment of Judgment, infra, that our refusal to consider
the issue of compensatory damages would result in a
miscarriage of justice.
2. The Alleged Error on Nominal Damages
The plaintiffs further argue that the jury was improperly
instructed and that the jury committed error when it failed
to return an award of $1 in nominal damages for Mrs.
Riga's violation of the Fair Housing Act. The plaintiffs allege
that the District Court erred in instructing the jury that an
award of nominal damages requires a finding of
"insubstantial" actual damages, or of "legal harm."7 Rather,
the plaintiffs contend that nominal damages should be
awarded where the jury has found a federal civil rights
violation, particularly the "fundamental" right to fair
housing. Thus, the jury should have been instructed that it
was required to find nominal damages if it found, as it did,
that housing discrimination had occurred and the jury
should have acted in conformity with that instruction and
awarded the plaintiffs these damages.
The District Court apparently felt that this case involved
"merely" a violation of "purely statutory rights," and that,
therefore, nominal damages were not required. In our
opinion, this stance trivializes the role of civil rights law in
eradicating discrimination. Racial discrimination, according
_________________________________________________________________
7. Notably, plaintiffs did object after the jury charge to the District
Court's special verdict questions charging that the jury find "legal harm"
and "legal cause" and proposed that the special verdict ask only whether
"harm" was caused. The District Court refused, stating, ". . . My
instructions are clear."
12
to the Supreme Court, is a "fundamental injury to the
individual rights of a person," Goodman v. Lukens Steel,
482 U.S. 656, 661 (1987), and the inability to buy or lease
real property can be considered one of the badges and
incidents of slavery. See also The Civil Rights Cases, 109
U.S. 3, 22 - 23 (1883). Indeed, even absent proof of actual
injury, nominal damages are to be awarded to recognize
violation of a constitutional right. Carey v. Piphus, 435 U.S.
247, 266 -67 (1978).
This entitlement is not automatic, however, "but rather,
it is incumbent upon the plaintiff to make a timely request
for nominal damages." Campos-Orrego v. Rivera , 175 F.3d
89 (1st Cir. 1999). In this instance, the plaintiffs requested
and received an instruction on nominal damages, but failed
to bring to the District Court's attention their contention
that the jury should have been instructed that nominal
damages are mandatory with a finding of discrimination.
The plaintiffs neglected to bring this matter to the attention
of the trial judge prior to the time the jury retired to
consider its verdict, much less the specific grounds upon
which it was based. In an attempt to avoid a holding that
this failure to object to the jury instructions waived their
right to challenge the jury's nominal damages verdict on
appeal, the plaintiffs argue that the District Court's failure
here was plain error.
Without deciding the question, we find that even if the
jury were without adequate guidance on the question of
whether nominal damages are mandatory or discretionary
for violation of a federal statute, failure to rectify this error
under the specific circumstances of this case does not
result in a miscarriage of justice. In the final analysis, given
our holding in this case, the plaintiffs are the prevailing
parties, have the opportunity to recover punitive damages,
and might each only receive $1 less in compensation than
that to which it might be entitled. See 564.4 Acres of Land,
576 F.2d at 988 (failure to rectify error could result in
miscarriage of justice because one party could receive
several million dollars less in compensation than that to
which it was entitled). Thus, we hold that the plaintiffs'
failure to challenge the jury instruction dealing with
nominal damages waived their right to raise this question
on appeal.
13
B. The Assignment of Judgment
On a crucial and related matter, we find that because the
jury found that the Fair Housing Act was violated, the
District Court was required, as a matter of law, to enter
judgment for both the Alexanders and the FHP. The District
Court's refusal to enter judgment for the Alexanders
constitutes an abuse of discretion, and we will reverse.8
Similarly, the District Court abused its discretion in failing
to find that both the Alexanders and the FHP were
"prevailing parties" and entitled to costs under 42 U.S.C.
S 3613(c)(2). See New Jersey Coalition of Rooming &
Boarding House Owners v. Mayor of Asbury Park, 152 F.3d
217, 225 (3d Cir. 1998)(the Fair Housing Act's costs
"provision, which sounds fully discretionary. . .--``the court,
in its discretion, may allow the prevailing party . . . a
reasonable attorney's fee and costs'--actually is not. In fact,
a district court's discretion not to grant attorney's fees and
costs in civil rights cases is tightly cabined.") We therefore
hold that both the Alexanders and the FHP were prevailing
parties and will direct the District Court to award them
attorneys' fees and costs on remand.
C. Punitive Damages
1. Conduct Calling for Punitive Damages
In this case, the District Court declined to send the issue
of punitive damages to the jury. One main reason for this
appears to have been that because the jury awarded no
actual damages to either plaintiff, the District Court
concluded that Mrs. Riga was not liable to the Alexanders.
Because so much of the Rigas' brief was devoted to this
_________________________________________________________________
8. Without deciding the waiver issue as to declaratory relief for the
Alexanders, on this one point regarding final judgment, we are satisfied
that even were there a waiver, the matter would be one of plain error.
Entering judgment for the party found by the jury to have violated the
Fair Housing Act, rather than for the victims who had been
discriminated against, is a paradigmatic "miscarriage of justice." And,
further, this improper assignment of judgment led to sequelae which are
anathema to public policy, such as denial of costs to the victims for
successfully proving a Fair Housing Act violation.
14
issue, though later they conceded the point, it bears
mentioning that beyond a doubt, punitive damages can be
awarded in a civil rights case where a jury finds a
constitutional violation, even when the jury has not
awarded compensatory or nominal damages. See Curtis v.
Loether, 415 U.S. 189 (1974) (punitive damages appropriate
for Title VIII violation without award for actual loss,
remanding for jury trial on punitive damages amount), see
also Basista v. Weir, 340 F.2d 74, 87 (3d Cir.
1965)(punitive damages appropriate in section 1983 case
absent award of compensatory damages).
We have sufficiently resolved this matter in our foregoing
discussion on the jury charge regarding liability, and in our
conclusion that a Fair Housing Act violation is all that is
needed to establish liability. Another reason the District
Court declined to send the issue of punitive damages to the
jury is that the District Court concluded that the jury
apparently did not believe Mrs. Riga's conduct to have
resulted from the type of evil motive thought necessary to
award punitive damages. We will address this second point.
Whether there is sufficient evidence to support a punitive
damages award is a question of law which we review de
novo. Delli Santi v. CNA Ins., 88 F.3d 192, 207 (3d Cir.
1996), Bonjorno v. Kaiser Aluminum & Chem., 752 F.2d
802, 814-15 (3d Cir. 1984), cert. denied, 477 U.S. 908
(1986).
Here, there is a specific damages provision in the plain
language of the statute. 42 U.S.C. S3613(c) provides the
relief which may be granted, when, as here, private
individuals seek to enforce the Fair Housing Act:
(1) In a civil action under subsection (a) of this section,
if the court finds that a discriminatory housing practice
has occurred . . . , the court may award to the plaintiff
actual and punitive damages, and . . . may grant as
relief, as the court deems appropriate, any permanent
or temporary injunction, temporary restraining order,
or other order (including an order enjoining the
defendant from engaging in such practice or ordering
such affirmative action as may be appropriate).
15
(2) In a civil action under subsection (a) of this section,
the court, in its discretion, may allow the prevailing
party, other than the United States, a reasonable
attorney's fee and costs.
* * *
The District Court has the duty to "give effect, if possible,
to every clause and word of [the] statute." Bennett v. Spear,
520 U.S. 54 (1997).
The standard for punitive damages in a federal civil rights
action was set by the Supreme Court, and does not require
"outrageousness": a jury may "assess punitive damages in
[a civil rights action] when the defendant's conduct is
shown to be motivated by evil motive or intent, or when it
involves reckless or callous indifference to the federally
protected rights of others." Smith v. Wade , 461 U.S. 30, 56
(1983).
In denying the Alexanders' request to submit the punitive
damages issue to the jury, the District Court found that
punitive damages were precluded because the jury's refusal
to award damages showed that the jury, in the District
Court's words, "did not consider the conduct of Mrs. Riga
to have been the result of an evil motive or intent or to have
involved reckless or callous indifference to the federally
protected rights of others." In the District Court's view, it
thus "would be inappropriate to permit the jury to award
punitive damages to them." The District Court also held
that more than intentional discrimination is required for
the jury to enter punitive damages -- that "outrageous
conduct on the part of Mrs. Riga beyond that which may
attach to any finding of intentional discrimination" was
required.
"Malice" and "reckless indifference," in this context,
however, refer not to the egregiousness of the landlord's
conduct, but rather to the landlord's knowledge that it may
be acting in violation of federal law. See Kolstad v. American
Dental Association, 527 U.S. 526, ___, 119 S. Ct. 2118, 2124
(1999). In Kolstad, a female employee sued her employer
under Title VII, asserting that the employer's decision to
promote a male employee over her was a proscribed act of
gender discrimination. The District Court denied the
16
employee's request for a jury instruction on punitive
damages. The Court of Appeals affirmed, holding that,
before the jury can be instructed on punitive damages, the
evidence must demonstrate that the defendant has engaged
in some "egregious" misconduct; under the facts of that
case, the female employee had failed to make the requisite
showing. The Supreme Court vacated the earlier decision
and remanded. In so doing, the Supreme Court explicitly
rejected the conclusion that "eligibility for punitive damages
can only be described in terms of [a defendant's] ``egregious'
misconduct." Rather, the Supreme Court held that"[t]he
terms ``malice' and ``reckless' ultimately focus on the actor's
state of mind," making a showing of egregious or
outrageous discrimination unnecessary. Id. Applied to the
case before us, we hold that because the jury'sfinding of a
violation under the Fair Housing Act necessarily
encompasses a finding of intentional discrimination, the
plaintiffs need not also demonstrate that the conduct was
particularly egregious or malicious in order to obtain
punitive damages.
Indeed, recklessness and malice may be inferred when a
manager responsible for showing and renting apartments
repeatedly refuses to deal with African-Americans about the
apartment, and misrepresents the apartment's availability.
See Miller v. Apartments & Homes, 646 F.2d 101 (3d Cir.
1981) ( punitive damages appropriate where defendant acts
with reckless disregard as to whether he is violating a
federally protected right, or consciously and deliberately
disregards consequences of actions), see also Woods-Drake
v. Lundy, 667 F.2d 1198 (5th Cir. 1982) ("wilful and gross"
violation of the Fair Housing Act supported punitive
damages where landlord evicted tenants for having African-
American guests; on remand, trial court directed to assess
punitive damages).
In the case before us, the jury returned special verdicts
finding the rights of the Alexanders and the FHP testers
under the Fair Housing Act to have been violated. The
Alexanders and the FHP presented evidence that Mrs. Riga
persistently refused to deal with African-Americans, as
opposed to whites, and represented that an apartment was
not available for inspection or rental, when it was. The
17
Alexanders described in saddening detail the deceptions to
which they were subjected, and the consequent
mortification they suffered. Mrs. Riga told them that "they
had just missed" the apartment listed in an advertisement
on Sunday, the day before. When the same advertisement
appeared the following Sunday, Mr. Alexander asked a
friend to call. The friend was told that the apartment was
available. Using a different name, Mr. Alexander arranged
to see the apartment and called twice to confirm the
appointment. When he met Mrs. Riga at the building, she
falsely stated that she had forgotten her keys, and could
not show him the apartment, as her hand covered up her
keys. Mr. Alexander "couldn't believe it, it made him angry,"
he thought she was lying. When he asked to reschedule,
Mrs. Riga said that he could call her. He was feeling "a little
bit too sick to say anything else . . . ." He walked away,
then turned and saw her entering the building. He called to
reschedule and left messages, but did not receive a
responding telephone call from Mrs. Riga. After this, Mr.
Alexander sought the assistance of the FHP, which directed
testers to seek the apartment. In short, the white testers
were granted access while the African-Americans testers
were denied access. Mr. Alexander continued to try to
contact Mrs. Riga and also had friends call. To one friend
he remarked that he felt "hurt and discouraged, it is sort of
degrading, it discourages you from trying . . . tofind a place
for your family to live, it is just sickening, I really can't
describe it. It is terrible . . . ."
The Supreme Court in Kolstad did observe that the mere
existence of a civil rights violation is not a guarantee of
eligibility for punitive damages because a defendant might
not be aware of the federal law he or she violated or he or
she might have honestly believed that the discrimination
was permissible. Kolstad, 119 S. Ct. at 2125. These
exceptions, however, do not apply to the Rigas in this case.
Here, there is not any suggestion that Mrs. Riga did not
know that it was illegal, and had been for thirty years, to
discriminate on the basis of race in housing. The jury
concluded that Mrs. Riga refused to deal with African-
Americans with respect to the apartment building and was
motivated by race. The plaintiffs have adduced sufficient
evidence to demonstrate "reckless or callous indifference" to
18
federally protected rights and to permit the jury to award
punitive damages.
2. Mr. Riga's Liability for Punitive Damages
Although both Mr. and Mrs. Riga were defendants at
trial, the special verdicts that were submitted to the jury
were limited to determining Mrs. Riga's liability for
discriminatory conduct. The District Court concluded that
only Mrs. Riga was involved in the events leading to this
lawsuit because Mr. Riga was in Italy at all relevant times.
The Rigas assert that excluding Mr. Riga from the punitive
damages discussion was appropriate because he neither
had the requisite personal involvement nor did he
acquiesce in Mrs. Riga's discriminatory conduct. The
plaintiffs argue that both Mr. and Mrs. Riga should be
subject to punitive damages, because, though Mr. Riga was
out of the country at the relevant time, he violated a
nondelegable duty not to discriminate under the Fair
Housing Act.
Of course, a principal is directly liable where he himself
commits, authorizes, or ratifies discriminatory treatment,
see Miller, 646 F.2d at 111 ($25,000 punitive damages
award against principal for agent's action, where principal
was involved in wrongdoing or authorized, ratified, or
fostered agent's discriminatory acts); see also Asbury v.
Brougham, 866 F.2d 1276 (10th Cir. 1989) (owner of
management company and agent who refused to rent both
liable; punitive damages against owner sustained). We now
must decide, as a matter of first impression, whether a
principal is vicariously liable for punitive damages for
violations of the Fair Housing Act by the discriminatory
acts of his managerial agent.
The Rigas contend that Mrs. Riga's conduct cannot be
attributed to Mr. Riga. They are mistaken. Mr. Riga could
not insulate himself from liability for discrimination in
regard to an apartment building owned jointly by him and
his wife and managed for their joint benefit, merely by
relinquishing the responsibility for preventing
discrimination to Mrs. Riga, his managerial agent. To
effectuate the Fair Housing Act's mandate, both Mr. and
19
Mrs. Riga are held responsible for Mrs. Riga's
discriminatory practices. Here we adopt the general rule
applied by other federal courts that the duty of a landlord
under the Fair Housing Act not to discriminate in the
leasing of property may not be delegated to the landlord's
employee. Civil Rights Act of 1968, S801 et seq., 42 U.S.C.
S3601 et seq. See Walker v. Crigler, 976 F.2d 900, 904 & n.
5 (4th Cir. 1992)("the duty of a property owner not to
discriminate in the leasing or sale of that property is non-
delegable"), see also Marr v. Rife, 503 F.2d 735, 741 (6th
Cir. 1974) ("The discriminatory conduct of an apartment
manager or rental agent is, as a general rule, attributable
to the owner and property manager of the apartment
complex, both under the doctrine of respondeat superior
and because the duty to obey the law is non-delegable."),
Coates v. Bechtel, 811 F.2d 1045, 1051 (7th Cir. 1987);
Phiffer v. Proud Parrot Motor Hotel, 648 F.2d 548, 552 (9th
Cir. 1980); Saunders v. General Services, 659 F. Supp.
1042, 1059 (E.D.Va. 1987) ("Under the Fair Housing Act, a
corporation and its officers ``are responsible for the acts of
a subordinate employee . . . even though these acts were
neither directed nor authorized . . . .' Courts have followed
this rule even where ``it seems harsh to punish innocent
and well-intentioned employers' because the statutory duty
not to discriminate is non-delegable") (citations omitted).
On policy grounds, in Kolstad the Supreme Court
arguably modified one aspect of this general rule, which
could produce the harsh result that even a landlord who
had made every effort to prevent discrimination could
nevertheless be subject to punitive damages. Kolstad, 119
S. Ct. at 2128. Cf. Walker, 976 F.2d at 904-905 (property
owner liable for the conduct of employees despite
instructions to them not to discriminate). Recognizing civil
rights law as an effort to promote prevention as well as
remediation and observing the principles underlying the
Restatement's limits on vicarious liability for punitive
damages,9 the Supreme Court held that, "in the punitive
_________________________________________________________________
9. The Restatement (Second) of Agency, among other things, authorizes
punitive damages "against a . . . principal because of an [agent's] act .
.
.
if . . . the agent was employed in a managerial capacity and was acting
20
damages context, an employer could not be vicariously
liable for the discriminatory employment decisions of
managerial agents where these decisions are contrary to the
employer's ``good-faith efforts to comply with[civil rights
laws].' " Kolstad, 119 S. Ct. at 2118, 2121, 2128. The
Supreme Court continued that "[g]iving punitive damages
protection to employers who make good-faith efforts to
prevent discrimination . . . accomplishes [the civil rights
laws'] objective of ``motivat[ing] employers to detect and
deter [civil rights] violations.' " Id. (internal citations
omitted).
We conclude, therefore, that the issue of Mr. Riga's
liability should be submitted to the jury. While Mr. Riga
may have been abroad at the time of the suit, he apparently
left Mrs. Riga in charge of the apartment building with
authority to act on behalf of the two of them as a couple.
At this juncture, we do not know if Mr. Riga made"good
faith efforts to prevent discrimination," defined to an extent
by the Supreme Court as efforts to "deter and detect [civil
rights] violations" and to "enforce an anti-discrimination
policy." Id. at 2129-2130. We leave to the jury on remand
to determine whether Mr. Riga engaged in active anti-
discrimination efforts sufficient to protect him from the
impact of the general rule that he may not delegate to Mrs.
Riga the duty not to discriminate.
D. Injunctive Relief
On appeal, the plaintiffs also argue that because the jury
returned special verdicts finding that Mrs. Riga had violated
the Fair Housing Act through a continuing course of refusal
to deal with African-Americans, the District Court should
have granted injunctive relief, not only to safeguard the
rights of these plaintiffs, but also on a policy level to
_________________________________________________________________
in the scope of employment," and affirms that even intentional,
specifically forbidden torts are within this scope if the conduct is "the
kind [the employee] is employed to perform," "occurs substantially within
the authorized time and space limits," and "is actuated, at least in part,
by a purpose to serve" the employer. Restatement (Second) of Agency
SS217 C(c), 228(1), 230, cmt. b. (1958).
21
safeguard free access to housing. The District Court denied
the plaintiffs' request to present evidence on the need for
injunctive relief, asserting that the plaintiffs had waived the
request, because, although it had been a significant portion
of the complaint and pretrial statement, the plaintiffs had
not repeated the request until six days after the jury trial.
The District Court also found that even had the plaintiffs
not waived the request, there was no need for injunctive
relief because there was not any evidence of a continuing or
recurrent violation.
The Rigas suggest that the plaintiffs sought injunctive
relief primarily to allow them to recover their attorneys'
fees, but stated the issue as, "whether [within the court's
discretion] declaratory and injunctive relief is necessary." Of
course, the Rigas assert that this Court should defer to the
District Court's judgment that it was unnecessary; evidence
had been presented that the Rigas had rented apartments
to African-Americans since the events of the Alexanders'
lawsuit. Were we to examine the issue of injunctive relief on
the merits, we would accord the District Court substantial
deference on this matter, under the applicable abuse of
discretion standard. Marco v. Accent Publ'g, 969 F.2d 1547,
1548 (3d Cir. 1992) (denial of injunctive relief reviewed for
abuse of discretion, which occurs if the District Court's
decision rests on a clearly erroneous finding of fact, an
error of law, or a misapplication of law to the facts). This
deference is not absolute, however, and we would need to
be mindful that deterrence and prevention of future
discrimination, one of the central purposes of the civil
rights statutes, McKennon, 513 U.S. at 358, might require
the entry of injunctive relief. We are troubled to an extent
by the District Court's rationale, which might permit the
Rigas and other civil rights defendants to discriminate and
stop when caught, in enough time to "obviate" the need for
a court to issue injunctive relief.
Regardless of the interesting nature of this issue,
however, we will hold, as did the District Court, that the
issue has been waived. Here, six days elapsed from the time
the jury's verdicts were returned and the jury was
discharged, until the plaintiffs requested a hearing on
injunctive relief. Though the District Court conceded that
22
the plaintiffs had requested this relief in their complaint
and pretrial statements, "at no time during the pretrial
conferences with the court, or during the trial itself, did
plaintiffs' attorneys refer to their requests for injunctive and
equitable relief." We agree with the District Court that the
issue is waived by the failure of counsel to raise the issue
of injunctive relief prior to the conclusion of trial. In
addition, through the remand we direct in this opinion, we
are satisfied that, to some extent, the policy goal of
deterring future discrimination will be effected.
E. Evidentiary Matters
In light of our decision, the remainder of the issues
raised by both parties are either mooted or left to
reconsideration on the limited remand we now grant. We
comment here only briefly on two remaining evidentiary
matters: (1) the plaintiffs' claim that the District Court
abused its discretion by excluding evidence of the Rigas'
discrimination against other African-Americans, and (2) the
Rigas' claim on cross-appeal that the District Court abused
its discretion by excluding evidence of the Alexanders' lack
of creditworthiness and lack of credibility. Wefind that in
neither instance did the District Court abuse its discretion.
The plaintiffs maintain that the District Court erred in
excluding probative evidence of the Rigas' ongoing pattern
of discrimination in the form of an eyewitness, Steven
Denson, who allegedly observed Mrs. Riga discriminating
against other African-American applicants. The plaintiffs
state that the witness' address was only discovered during
the trial, because the Rigas' counsel had refused to supply
it upon request. Further, the plaintiffs assert that were this
evidence permitted, the Rigas would suffer no surprise or
prejudice, inasmuch as their counsel had interviewed the
witness previously.
For their part, the Rigas dispute that they acted
improperly with respect to this witness. The evidence's
relevance was tenuous -- he might not even have been at
the Darlington building. The District Court reasonably
concluded that the probative value of the testimony was
outweighed by its prejudicial impact.
23
Similarly, properly excluded was the evidence the Rigas
proffered that the Alexanders were not creditworthy.
Though the Rigas maintain that the Alexanders had to
show that they were fully qualified to rent the apartment
ultimately, the Alexanders only needed to show that they
were qualified to be applicants, to view the apartment, and
be treated no differently from other applicants. If this case
were about the Alexanders' unsuccessful apartment
application and they could make a prima facie showing of
discrimination, then the evidence of creditworthiness would
indeed be relevant. Under the facts with which we are
presented, however, the evidence was not relevant, and the
District Court properly excluded it. Finally, the Rigas claim
that they should have been permitted to offer evidence of
the Alexanders' untruthful statements on documents such
as employment applications. The Rigas obviously sought to
introduce this evidence to show conformity therewith. The
District Court properly excluded this too, because it was
evidence of other bad acts not admissible to prove the
Alexanders' character under Fed. R. Evid. 404 and not
within the exceptions outlined in Fed. R. Evid. 404(b).
IV.
We will reverse the decision of the District Court granting
judgment to the Rigas as against the Alexanders and the
decision declining to submit the question of punitive
damages to the jury. We direct the District Court to enter
judgment for the Alexanders, and for other declaratory
relief consistent with our opinion, as well as costs,
including reasonable attorney's fees, to the Alexanders and
the FHP and to remand the case for a new trial solely to
present to a jury the question of punitive damages as
against both Mr. and Mrs. Riga.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
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