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Precedential or Non-Precedential: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

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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

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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

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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

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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

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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

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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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