Petition for Writ of Certiorari — T. B. & Z. Realty & Management Corp. v. Coterie Seven Enterprises Corp.
Supreme Court brief1984
Ask Donna
What actually matters in this document.
Text
- Beh ee oD Be os PLSie i) ee OMe i a Bs ia Be & ms sf a
-:
7 Supreme Court, U.S.
/ FILED
$4 -5 0% . SEP 19 1964
ALEXANDER L. STEVAS
CLERK
7 In the
Supreme Court of the United States
OcroBeR TERM
T.B. & Z. REALTY AND MANAGEMENT
CORPORATION, and LESTER S. BARRITT,
Petitioners,
vs.
COTERIE SEVEN ENTERPRISES CORPORATION,
an Illinois corporation,
Respondent.
On Writ of Certiorari to the United States
Court of Appeals for the Seventh Circuit
PETITION FOR WRIT OF CERTIORARI OF
T.B. & Z. REALTY AND MANAGEMENT
CORPORATION, AND LESTER S. BARRITT
Martin S. Korey
Counsel of Record
221 North LaSalle Street
Suite 2800
Chicago, IL 60601
(312) 782-3636
Davip M. MEIsTER
250 S. Wacker Drive
Suite 1500
Chicago, IL 60606
(312) 876-2276
Attorneys for Petitioner
The Scheffer Press, Inc—(312) 263-6850
i
QUESTIONS PRESENTED FOR REVIEW
1. Whether Certiorari should be granted to correct
the failure of the United States Court of Appeals for
the Seventh Circuit, in this and other cases, to apply
the rules, the reasoning and the formula enunciated by
the United States Supreme Court in McDonnell Douglas
Corporation v. Green and its progeny with respect to the
correct allocation of burdens of proof and order of
presentation of proof in a civil rights case.
2. Whether, in accordance with McDonnell Douglas
Corporation v. Green and its progeny, liability can exist
in a civil rights case when, according to the specific
findings of fact made by the District Court, the defendant
has in fact articulated a legit.mate non-discriminatory
reason for its actions, and the plaintiff has not offered
any rebuttal evidence.
3. Whether liability under 42 U.S.C. Sections 1981
and 1982 may lie against defendants whose statements,
while found to be derogatory, had no nexus with the
gravamen of the cause of action; that is, whether such
liability may exist when the termination of plaintiff’s
discotheque activities was accomplished by another defen-
dant in the case for reasons which the District Court
found were solely legitimate and non-discriminatory.
ik
PARTIES IN PROCEEDINGS BELOW
Plaintiff-Appellee- Coterie Seven
Cross Appellant Iinterprises Corporation
(Respondent herein)
Defendants-Appellants- T.B. & Z. Realty
Cross- Appellants and Management
(Petitioners herein) Corporation and
Lester S. Barritt
Defendant and Cross- The Equitable Life
Appellee Assurance Society of
The United States
ili
TABLE OF CONTENTS
PAGE
as ncaAieh alent bnhindel insablbeoshuapndtiens ili
Reports of Opinions Below. ..............c ee snsniniadsihinin iv
IE SU ORMOND aces ccnsncsacrennercsarccsarremenssasenonmens iv
a ntednelanosiane iv
STII SIS CONNIE, cs saanrcsanncnnasaeacnasebsdnbnensenmbnaneantanaion 1
IN ci cicsssesh sachin aesssonnsnensntnvehxnsnnnnnancnunspesannnsnsceuenscsnennsocnse 5
Appendices... 21 boleh ee BACs RON NOC la
TABLE OF AUTHORITIES
McDonnell Douglas Corp. v. Green, 411 U.S. 792
SIE) Winshgibeininsscnnsshsasinsasenensarosimisesnsersssnaserscowmescenssnnce passim
Mowre v. Townsend, 525 F.2d 482 (7th Cir. 1975) ....... 7
Smith v. Sol D. Adler Realty Co., 4386 F.2d 344 (7th
I aca colds aaanisnenannananeinsitnamatnamnonshansadensnouosens 7
Texas Department of Community Affairs v. Burdine,
SE RL MIU. CROMER D> sccvscscsnssnssnnscncccsncccnsesnessnsconsnsstscccassnee 5
iv
REPORTS OF OPINIONS BELOW
The relevant decisions of the Seventh Circuit and the
District Court in this case were all unpublished.
GROUNDS FOR JURISDICTION
The final decision of the Seventh Circuit sought to be
reviewed herein was entered on June 21, 1984. The first
order of the Seventh Cireuit in this case, remanding
the case to the District Court, was October 25, 1982, and
an order was entered on rehearing of that decision on
February 11, 1983.
This Court is granted jurisdiction to review, by writ
of certiorari, the decision of the Seventh Circuit, by 28
U.S.C. Section 1254.
STATUTES INVOLVED
42 USC Section 1981 provides in pertinent part:
All persons . . . shall have the same right . . . to make
and enforce contracts . ..as is enjoyed by white citizens.
42 USC Section 1982 provides in pertinent part:
All citizens . .. shall have the same right . . . as is enjoyed
by white citizens to . . . lease, sell, hold and convey real
and personal property.
In THE
SUPREME COURT OF THE UNITED STATES
OcToBER TERM
No.
T.B. & Z. REALTY AND MANAGEMENT
CORPORATION, and LESTER 8S. BARRITT,
Petitioners,
vs.
COTERIE SEVEN ENTERPRISES CORPORATION,
an Illinois corporation,
Respondent.
On Writ of Certiorari to the United States
Court of Appeals for the Seventh Circuit
PETITION FOR WRIT OF CERTIORARI OF
T.B. & Z. REALTY AND MANAGEMENT
CORPORATION, AND LESTER S. BARRITT
STATEMENT OF THE CASE
In May of 1974, The Equitable Life Assurance Society
of the United States, (hereinafter “Equitable”), a New
York corporation, purchased an office building in
Chicago’s Loop. T.B. & Z. Realty and Management
Corporation, (hereinafter “T.B. & Z.”), one of the
=
Petitioners herein, an Illinois corporation, began man-
aging the building for Equitable in November, 1974.
Prior to that time, the building had been managed by
T.B. & Z.’s predecessor, Turner, Bailey and Zoll, Inc.
Lester S. Barritt, (hereinafter “Barritt”) the other
Petitioner herein, was the President of T.B. & Z.
One of Equitable’s tenants in the building operated
a restaurant and cocktail bar on the building’s main floor,
known as Cockney Pride. It was owned and operated
by a corporation named Cockney Pride, Ltd. That
restaurant had been a tenant of the building prior to
Kquitable’s purchase of the building.
Moreover, as specifically found by the District Court
in these proceedings, Cockney Pride was an undesirable
tenant, in that rent was frequently in arrears, and its
lease was violated by a failure to maintain insurance,
a failure to report gross receipts, a failure to furnish
a security deposit, and by alterations made to the
premises without the owner’s consent. Additionally,
Cockney Pride sporadically operated without a valid
liquor license, and for a period in 1974 its doors were
padlocked by the Internal Revenue Service.
In an effort to shore up the decaying foundation of
its business, Cockney Pride, as early as April, 1974,
began permitting the conduct of discotheque entertain-
ment on its premises by an Illinois corporation known
as Coterie Seven enterprises, Corporation, (hereinafter
“Coterie Seven”), the Respondent herein. It did so with-
out ever receiving the permission of Equitable. Although
‘Pursuant to United States Supreme Court Rule 28,
it is hereby represented that T.B. & Z. has no parent
companies, subsidiaries or affiliates.
7
this entertainment began as a once-a-week concession
to Terpsichore, it expanded ultimately into a nightly
occurrence. In short, each evening, seven nights a week,
the Cockney Pride Restaurant was transformed into a
disco, pursuant to written and oral agreements between
Cockney Pride and Coterie Seven. The majority of
Coterie Seven’s patrons were black, a fact not incidental
to these proceedings, obviously.
In the fullness of time, other tenants of the build-
ing — an office building — began making complaints
to T.B. & Z. and Equitable about the disco activities
at Cockney Pride. The nature of the complaints involved
disco enthusiasts congregating in the lobby of the build-
ing, parking their cars on the sidewalk in front of the
building, and using marijuana in and around the building.
In response to these complaints. Barritt, who by that
time knew that Coterie’s patrons were predominantly black,
wrote a letter to Equitable’s Regional Manager informing
him of the problem and asking for advice. Additionally,
as the District Court found, Barritt made occasional de-
rogatory racial remarks with respect to the black patrons
of the disco.
Cockney Pride was requested to comply with all terms
of its lease, but Cockney Pride failed to do so. Equitable
filed eviction proceedings against Cockney Pride. Cockney
Pride then filed for injunctive relief, alleging that that
eviction was racially motivated, despite the various
breaches of the lease with Equitable. Equitable’s suit and
Cockney Pride’s countersuit were settled by an Agreed
Order in December, 1975, which recited that there was
no racial discrimination on the part of the defendants.
This Agreed Order provided for a new lease for Cockney
—_—
Pride which, among other things, reduced the monthly
rent, prohibited all evening entertainment, and provided
for the cure of all previous violations of the lease.
Accordingly, on or about February 15, 1976, Cockney
Pride ceased to permit disco activities at its restaurant.
Coterie Seven subsequently brought the present civil
rights action against Equitable, T.B. & Z. and Barritt,
alleging a violation of 42 U.S.C. sections 1981, 1982 and
1985. The 1985 cause of action was dismissed, as the
trial court found a lack of any conspiracy. As explained
in more detail below, the various holdings of the Courts
below on the Sections 1981 and 1982 claims were as
follows:
1) The initial decision of the United States District
Court for the Northern District of Illinois, Judge
Thomas R. MeMillen presiding, dismissed all
claims as to Equitable and entered judgment
against T.B. & Z. and Barritt.
2) The United States Court of Appeals for the
Seventh Circuit reversed the dismissal of
Equitable and the judgment as to T.B. & Z. and
Barritt, and remanded for a new trial.
3) On rehearing, the Seventh Circuit altered its
previous judgment to require merely additional
findings of fact by the District Court, rather
than a new trial.
4) On remand, the District Court reinstated the
judgments against T.B. & Z. and Barritt, and
again found no liability as to Equitable.
5) The Seventh Circuit affirmed the District Court
on June 21, 1984.
ARGUMENT
This Court should grant Certiorari in the present case
to correct the Seventh Circuit’s application of the burden
and presentation of proof in cases under 42 U.S.C. sec-
tions 1981 and 1982 generally, and to resolve a direct
and irreconcilable conflict between the decision of the
Seventh Circuit in this and other cases and applicable
decisions of this Court.
As this Court is aware, the decision in McDonnell
Douglas Corp. v. Green, 411 U.S. 792 (1973) set forth,
with clarity and precision, the allocation of burdens and
order of presentation of proof in civil rights cases. As
the Court later summarized in one of McDonnell Douglas’
direct descendants, Texas Department of Community
Affairs v. Burdine, 450 U.S. 248, 252-255 (1981) :
“First the plaintiff has the burden of proving by
the preponderance of the evidence a prima facie case
of discrimination. Second, if the plaintiff succeeds
in proving the prima facie case, the burden shifts
to the defendant “to articulate some legitimate, non-
discriminatory reason for the employee’s rejection.”
(Citation) Third, should the defendant carry this
burden, the plaintiff must then have an opportunity
to prove by a preponderance of the evidence that
the legitimate reasons offered by the aefendant were
not its true reasons, but were a pretext for dis-
crimination. (Citation)
The nature of the burden that shifts to the defendant
should be understood in light of the plaintiff’s ulti-
mate and intermediate burdens. The ultimate burden
of persuading the trier of fact that the defendant
_
intentionally discriminated against the plaintiff
remains at all times with the plaintiff.
* * * ¢#
The burden that shifts to the defendant, therefore,
is to rebut the presumption of discrimination by
producing evidence that the plaintiff was rejected,
or someone else was preferred, for a _ legitimate,
nondiscriminatory reason. The cefendant need not
persuade the court that it was actually motivated
by the proffered reasons. (Citation) It is sufficient
if the defendant’s evidence raises a genuine issue
of fact as to whether it discriminated against the
plaintiff. To accomplish this, the defendant must
clearly set forth, through the introduction of ad-
missible evidence, the reasons for the plaintiff’s
rejection.” (Emphasis added.)
At the close of trial in this case, however, in a parody
of the McDonnell Douglas formula, Judge McMillen en-
tered judgment against T.B. & Z. and Barritt for viola-
tions of 1981 and 1982 despite a specific finding that the
principal motivation of both of them was business rea-
sons, and in the absence of any rebuttal evidence by the
plaintiff. In relevant part, the District Court found:
“Throughout its tenancy, Cockney Pride proved to
be an undesirable tenant. In addition to rent arrear-
ages, Cockney Pride failed to maintain insurance,
failed to report its gross receipts, failed to furnish
the owner with a security deposit, made alterations
to the demised premises without first obtaining the
owner’s consent and on one occasion operated without
a liquor license, all in violation of its lease.
* * # @#
(Defendant’s) principal motivation in taking the
actions which they did against the plaintiff was
for business reasons, In that respect they acted
—_
‘properly and not in violation of the law.” District
-Court’s decision of September 21, 1979, Appendix B
hereto, pages 3-4 and 7-8.
Additionally, however, the District Court found:
“(T]t is also clear that a related but secondary moti-
vation was to rid the building of the activities of
non-tenants who were predominantly black. The ac-
tivities of these blacks constituted a nuisance to the
tenants and therefore to the management and were
undesirable from a business standpoint. The fact that
they were blacks was somewhat incidental but never-
theless was a factor in the defendants’ motivation.
We cannot find that the defendants acted without
any racial motivation or that they would have taken
the same action had the plaintiff’s clientele consisted
merely of whites. Thus we find and conclude that
race was a subsidiary motivation of the defendants’
actions although not the principal one.” District
Court’s decision of September 21, 1979, Appendix B
hereto, page 8.
Both in its decision of September 21, 1979 (Appendix
B hereto) and its decision on a motion for a new trial
(Appendix C hereto), the District Court relied on the
decisions of the Seventh Circuit in the cases of Smith
v. Sol D. A ‘ler Realty Company, 436 F.2d 344 (7th Cir.
1970) and Moore v. Townsend, 525 F.2d 482 (7th Cir.
1975). The tension between these decisions, as applied
by the District Court and the Seventh Circuit even after
applicable contrary decisions of this Court, provides the
impetus for this Petition, as we will see. Moreover, those
cases continue to present a potential problem in that, if
Judge McMillen is correct, they can continue to be
applied, contrary to this Court’s opinions,
—
On the basis of Sol D. Adler and Moore, the District
Court held that the prima facie case made out by Coterie
Seven could only be rebutted by a showing by defendants
that race was not a factor at all. The articulation of a
legitimate, non-discriminatory reason for defendant’s
actions, as explicitly found by the District Court, did
not, in other words, rebut that prima facie case and
place on the plaintiff the burden to show that such
reasons were mere pretext, as required by McDonnell
Douglas and its progeny. Incredibly, though recognizing
the existence of a contrary formulation in McDonnell
Douglas, the District Court stated that it had “no alterna-
tive but to follow the foregoing Seventh Circuit Decisions
of 1975 and 1970.” (Appendix B hereto, pages 9-10)
On October 25, 1982, the Seventh Cireuit rendered its
first decision in this case, reversing the order of dis-
missal as to Equitable and further reversing the orders
and judgments as to T.B. & Z. and Barritt and remanding
the entire case for a new trial. In discussing the formu-
lation of the respective burdens, the Seventh Circuit
determined that once a prima facie case of racial dis-
crimination has been made out, then the burden is passed
to the defendants to prove by a preponderance of the
evidence that the same actions would have been taken
and the same directions given even if an unlawful pur-
pose had not been a motivating factor. (Appendix D
hereto, page 5.) Nothing was said of the delicate balance
of burdens wrought by this Court in the McDonnell
Douglas formula.
On a petition for rehearing, the Seventh Circuit re-
fused to alter its decision vacating all orders below and
remanding the case, but rather than direct a new trial,
a
the Seventh Circuit merely directed the District Court
to make additional findings to facilitate the Seventh
Cireuit’s review of the issues. In demarcating what the
District Court’s task should be, the Seventh Circuit
endorsed a curious formulation which provided that if
Equitable’s eviction action was prompted solely by
legitimate reasons, then no judgments against any of
the defendants could stand. If Equitable’s actions were
partially motivated by a purpose to discriminate, how-
ever, then judgment should be awarded.
This “partial motivation” formulation does not, of
course, take account of whether defendants could articu-
late a legitimate, non-discriminatory motivation, and
thus shift the burden back to the plaintiff to show that
this explanation is mere pretext, in accordance with
McDonnell Douglas. The Seventh Circuit, in other words,
joined the District Court in failing to apply the
McDonnell Douglas formula, in the face of findings of
fact which recognized the existence of legitimate non-
discriminatory reason which, of course, would shift the
burden of proving pretext to the plaintiff.
The Seventh Circuit did not stop there, however. As
if to highlight the excesses of its unique formulation,
in dealing with T.B. & Z. and Barritt, the Seventh
Circuit stated that if communications between Barritt
and Cockney Pride, and Barritt’s conduct as manager
of the building, were a substantial factor in causing the
elimination of Coterie Seven from the premises by virtue
of the new lease, then liability of T.B. & Z. and Barritt
alone would be established. We submit that such liability
in the absence of a finding against Equitable —- or, worse,
in light of a finding that Equitable’s actions were not
—
motivated by racial considerations — creates the poten-
tial for a rather Kafkaesque scenario. If, for instance,
the District Court were to find that Equitable, the party
with sole authority to terminate Cockney Pride’s lease,
was motivated solely by nonracial considerations, then
there would be simply no nexus between Barritt’s com-
munications and actions and the actual resulting termi-
nation which gives rise to the civil rights suit herein.
In short, the Seventh Circuit’s formula permits a situa-
tion where Barritt and T.B. & Z. may be found liable
for inducing discrimination which never occurred.
Naturally, upon remand, as if to illustrate the Law’s
taste for irony, the findings of the District Court were
such that the above scenario is precisely what transpired.
The District Court found, in its supplementary findings
of fact, that Equitable was in fact motivated solely by
legitimate, non-discriminatory business motives. Nonethe-
less, the District Court found, as apparently permitted
by the Seventh Circuit, that T.B. & Z. and Barritt were
liable because of their own acts and statements.
Even granting that those acts and statements bore
a racial animus, they apparently were without result,
since Equitable did not take the eviction action, the
action on which these proceedings revolve, for any racial
purpose. In short, there is simply no relationship between
the actions of Barritt and T.B. & Z. and the damage
allegedly caused to Coterie Seven by its elimination
from the premises. Barritt and T.B. & Z. are, in effect,
being punished for derogatory language which never
came to any fruition.
Moreover, taking the supplementary findings of fact
of the District Court together with the initial findings
a
of fact, it is clear that the defendants did show legitimate
non-discriminatory reasons for their actions. Nonetheless,
as throughout these proce: dings, the District Court on
remand did not require that, on this basis, the burden
be shifted hack to the plaintiff to establish pretext. In
fart, no rebuttal evidence was ever offered by plaintiff.
On June 21, 1984, the Seventh Circuit affirmed the
second decision of the District Court on the basis of
sufficient evidence that racial considerations partially
motivated T.B. & Z. and Barritt.
Nowhere in the proceedings below did the Seventh
Circuit address the decisions of this Court that clearly
provide, in formulaic manner, for a precise shifting of
burdens. The formula applied by the Seventh Circuit
ean best be characterized as the “partial motivation”
test: If the proof offered by the plaintiff and the defen-
dant together indicates that the actions of defendant
were partially motivated by racial considerations, then
liability exists. Parsing this formula with the burdens
of the parties, once a prima facie case is made out, the
sole manner to defeat that case is for the defendant
to show affirmatively that race was not a factor at all.
This, of course, is in direct contravention to the decisions
of this Court.
In addition to the direct and irreconcilable conflict
between the Seventh Circuit’s treatment of the civil
rights statutes in this regard and that mandated by
this Court, an additional factor to be considered in
assessing this Petition is that the result of the Seventh
Circuit’s formulation, as we have stated above, is that
the partial motivation test has resulted in liability of
defendants who had no impact on the treatment ulti-
= ve
mately afforded plaintiff according to the finding of the
District Court. In short, by confusing the formulation
to be used for burden shifting, the Seventh Circuit has
managed to equate derogatory language with discrimina-
tion. It has created a cause of action which can ensnare
even innocent bystanders who express derogatory com-
ments which never actually result in discrimination.
CONCLUSION
For the reasons stated above, this Court should grant
the Petition for Writ of Certiorari of T.B. & Z. Realty
and Management Corporation and Lester S. Barritt.
Respectfully submitted,
Martin S. Korey
Counsel of Record
221 North LaSalle Street
Suite 2800
Chicago, IL 60601
(312) 782-3636
and
Davip M. MEISTER
250 S. Wacker Drive
Suite 1500
Chicago, IL 60606
(312) 876-2276
Attorneys for Petitioner
APPENDICES
Statement of United States District Court for the
Northern District of Illinois after close of all the
evidence; May 11, 1979.
Findings of Fact and Conclusions of Law of United
States District Court for the Northern District of
Illinois; September 21, 1979.
Decision of United States District Court for the
Northern District of Illinois denying motion to vacate
September 21, 1979 ruling; November 9, 1979.
Order of United States Court of Appeals for the
Seventh Cireuit; October 25, 1982.
Order on Rehearing in the United States Court of
Appeals for the Seventh Circuit; February 11, 1983.
Additional Findings of District Court; July 8, 1983.
Order of United States Court of Appeals for the
Seventh Cireuit: June 21, 1984.
== 1@ —
APPENDIX A
In Tue Unitrep States Districr Court
NortTHerNnN Districr Or ILuINoIs
Eastern DIviston
CoTerir SEVEN ENTERPRISES CORPORATION,
an Illinois corporation,
Plaintiff,
Vs.
Tue EquitTasLe Lire Assurance Society Or THe UNITED
Srates, and T B & Z Reatty anp MANAGEMENT
Corporation, and Lester S. Barritt,
Defendants.
78 C 238
EXCERPT OF PROCEEDINGS
had in the above-entitled cause before the HONORABLE
THOMAS R. McMILLEN, one of the Judges of said
Court, in his courtroom in the United States Courthouse,
Chicago, Illinois, on Friday, May 11, 1979, at the hour
of 10:00 o’clock a.m.
APPEARANCES:
MR. HARRY P. STINESPRING
MR. BURTON A. GROSS
MR. DAVID M. MEISTER
MR. MARTIN S. KOREY
THE COURT: As I have been listening to the testi-
mony it has been my belief or my conclusion that there
really hasn’t been any prima facie case against Equitable
Life Assurance Society. All of the evidence with respect
to Equitable seems to me to be through its agents, which
would be T B & Z Realty and also Lester Barritt; that
Equitable did not authorize any of the specific alleged
=e
acts of discrimination that were committed by the other
defendants, if they were committed, and really had very
little knowledge about what was transpiring on the
premises,
They knew there were some difficulties. But when I
finished hearing the evidence on Friday I was prepared
at that time to enter a finding at the close of the plain-
tiff’s ease against them for the claim against Equitable
and I feel the same way. I really haven’t been able to
go over my notes in any great detail since that time,
but I will enter a finding for the defendant Equitable
at this time.
Now, as far as the other defendants are concerned
T was of the impression — my belief was when TI listened
to the evidence on Friday that the plaintiff had appar-
ently made out a prima facie case. Although, I had some
doubt ahout it.
Having looked at the three statutes that the plaintiff
relies on T am still not at all sure that the plaintiff
has made out a prima facie case against the remaining
defendants, which would be T B & Z Realty and Lester
S. Barritt. I find evidence that hoth defendants who
are remaining were cognizant of the fact that the dis-
eotheque was largely operated and frequented by black
customers and also T find that Mr. Barritt did make
some remarks which could be construed as derogatory
toward blacks. He has denied those, but IT think I am
persuaded by the weight of the evidence that statements
with regard to it having a reputation as a black building
were made, and also referring to the discotheque or the
operators of it as “niggers” was also made.
Tt doesn’t follow from that necessarily that the reason
that Mr. Barritt and T B & Z wanted to have the dis-
eotheque out of the building was because it was black.
As a matter of fact, some of the more recent cases hold
that after the plaintiff establishes a prima facie case,
=—
if the defendant can show a bona fide and reasonable
justification for its act, the weight of the evidence comes
into play and the prima facie case is thereby rebutted.
Now, there are some 1983 cases which say that if any
of the reasons for the alleged discrimination was based
on race, even though there are other bona fide legitimate
reasons, the act has been violated.
I am not sure what the law is with respect to Section
1981 or 1982. Probably the law is somewhat the same.
But I am thinking — I believe it is the bricklayer case
that came out of this cireuit — I am trying to recall
the name of it because neither party, I believe, has
picked it up — and I am sorry that I do not have it
right here. It went up to the Supreme Court. Perhaps
I will think of the name of it in a minute. — did seem
to hold that a bona fide business reason for not hiring
blacks as bricklayers was a defense. I think the parties
ought to analyze that case and see if it applies to See-
tions 1981 and 1982. Although, it was a 1983 case.
So, it is a little indefinite in my mind, and [| think
the law is somewhat unsettled, as to whether or not the
defendant must show after the plaintiff has established
a prima facie case of discrimination that that was not
any part of its basis for decision to terminate the lease,
or whatever, or whether it must merely show that it
had a bona fide business reason and that that business
reason was the principal reason for whatever its action
might have been.
It is very difficult in this case where there undoubtedly
were a heavy proportion of blacks involved and the nrob-
lems that bad occurred with respect to the discotheque
involved blacks, to determine whether or not their
presence and their activities somehow or other was one
of the causes for terminating or causing the discotheque
to be terminated. I have some doubt that it was.
=
The references that Mr. Barritt is supposed to have
made to the building’s nature and to the patrons of the
discotheque was a description of the people who were
there and he did say at one time that this black business
must be discontinued but that, in my opinion, was merely
a way of describing the activity. He could have said
“discotheque” without referring to blacks or if it had
been a white discotheque he could have called it a white
discotheque. But I think certainly the overwhelming con-
sideration that caused him to wish to eliminate the
activity was because of the nature of the activity and
not the nature of the people that were participating in it.
And, as I say, it is difficult to eliminate those two
things when the people who are participating were 95
per cent black.
The evidence is very clear that the discotheque was
an undesirable type of activity to have in a Class A or
high-class professional business building in the Chicago
Loop. There may have been one somewhat in the same
vicinity. I would assume that there was. But that doesn’t
necessarily mean that it is an acceptable type of activity
for that kind of a building. Obviously it does attract
a large number of people at night — and in this particu-
lar instance it did so — when ordinarily the premises
would not be occupied by any large number of people.
That exposes the tenants to some risk that there is
going to be invasion of the offices by unauthorized per-
sons. We all know the difficulties of security in buildings
in the Loop which do not have bars, restaurants or
discotheque activities in them, whether they are black
or not. And to have a large number of persons who
are not tenants in the building at night is an invitation
for illegal entrances into the office portion of the building.
Secondly, the evidence is very clear in my mind that
a large number of these patrons were congregating in
the lobby and congregating on the sidewalk outside the
building and parking automobiles on the sidewalk, appar-
iin
ently, partly because the garage was not available. In
any event, the building manager has perfectly valid
grounds for wanting to discontinue the cause of that
assembly of persons whether they are black or white.
Added to that is the fact that the restaurant which
had contracted with the plaintiff for this activity had
not proved to be a desirable tenant for various reasons
and that had caused problems. In fact, the first problem
I recall hearing about antedated the discotheque activity
and was some kind of a fashion show which was being
conducted during the noon hour and which was not de-
sirable from the management’s standpoint. So that even
though, apparently, the building was not able to get
that particular activity stopped, as I recall — although,
I am not sure -— the adding of the discotheque to that
was merely one more cause for dissatisfaction on the
part of the management of the building, even though
it came at a different hour. One, in a sense, ied to the
other as far as dissatisfaction by the building manage-
ment is concerned.
I don’t think that the odor of the food can be said
to have any connection with the discotheque. I don’t
think that the fact that there was a combo playing down
there really had any real disadvantage to the building
because it is pretty well insulated and pretty well iso-
lated. As I understand it, the second to the sixth floor
is parking areas in any event. So that the likelihood
of any tenants being disturbed by the music in an air
conditioned building where the windows are all closed
is very slight. I don’t know what the elevator situation
is. It is possible that noise could come up the elevator
but I don’t think that the noise was a particular factor
for the tenants’ complaints.
I do find that there were numerous tenants’ complaints
and that some of the tenants had bona fide complaints.
Some apparently were the type that would complain
about almost anything if they were paying their rent.
—
In any event, it seems to me that the principal problem
of the discotheque was, No. 1, the image that it tended
to create for a business building and, No. 2, the large
number of non-tenant persons that were in the building,
particularly in the lobby and on the outside of the build-
ing, after business hours, which creates a hazard and a
— not a “nuisance” — but at least an undesirable type
of situation.
So, I would like the remaining two defendants to
draft up a proposed finding of fact and conclusions of
law on the amended complaint based on the evidence
and not upon matters which are not in evidence or which
are not relevant to the issues and then I will give the
attorneys for the plaintiff an opportunity to object to
that and to file any proposed counter-findings or conclu-
sions without preparing an entire integrated document.
IT will ask the defendant to prepare the integrated
document within a week and submit it to the Court and
serve it on the plaintiff and then the plaintiff to file
its objections or its counter-proposals te certain specific
findings which they feel are not supported by the weight
of the evidence.
In the conclusions of law I would like to have the
defendant cite the cases on which they rely for the
conclusions. And, of course, the plaintiff would have
the opportunity to attempt to distinguisa those cases or
show that they are not the Jaw by citing other cases that
are to the contrary.
One other thing. It seems to me that there isn’t
sufficient evidence to find for the plaintiff under Section
1985. In the first place I don’t believe that a corporation
can conspire with its own officers or managing agents.
It seems to me that was already decided in one of the
other Seventh Cireuit cases involving another building
in the Loop. But, in any event, it seems to me that
the activities that were engaged in here were individual
aa 1 om
activities, one by Mr. Barritt and two by his corporation,
which he was one of the principals in, and that he was
either acting on behalf of the corporation which would
bind it or he was not. Those are the only two defendants
left in the case. So, I can’t find any ground for a con-
spiracy under Section 1985. I will grant the defendants’
motion on that portion of the amended complaint as
well as the motion with respect to Equitable Life Assur-
ance Company.
I don’t know, frankly, whether both Section 1981 and
1982 apply to this case. I will have to rely upon the
memoranda and the citations that I find in the proposed
findings and conclusions.
IT don’t have much difficulty with the words “all per-
sons” in Section 1981 since a corporation is a person
and “all citizens” in 1982 since the corporation is a
citizen. After the Monell case in the Supreme Court —
and also there is a Seventh Circuit case which clearly
holds that a corporation is a proper party under Section
1983, and I think the same would follow under Section
1981 and Section 1982.
In other words, a corporation can be discriminated
against under 1983 and presumably under the other two
sections.
Whether the language of 1982 which limits the cause
of action to citizens having the same right as enjoyed
by white citizens to inherit, purchase, lease, sell, hold
and convey real and personal property would apply to
this case or not, I have some doubt. I think it is a
specific statute that was enacted with respect to owning
real and personal property. And I do not believe there
is any complaint by Coterie Seven with respect to those
specific acts.
However, I am not zoing to make a finding contrary
to the plaintiff on Section 1982. I think Section 1981
certainly applies to the factual situation that we have
— 8a —
here, if it has been proved, which, as I say, I have
considerable doubt that it has. But if Section 1981 ap-
plies it doesn’t really make any difference whether Section
1982 applies.
I will reserve judgment on 1982 until I do see the
conclusions on the law.
I feel the same way about 42 USC Section 2000(a).
That, it seems to me, is directed toward the use of
public accommodations by blacks or by other persons
without discrimination. Here we have a corporation
which certainly can’t complain that it hasn’t been served
in a restaurant or given accommodations in a hotel. And
that seems to me to be the purpose of Section 2000(a)
is. The first subparagraph is that all persons shall be
entitled to the full and equal enjoyment of various things,
including accommodations of any place of public accom-
modation, without discrimination. I really have difficulty
in seeing how that particular section of the Civil Rights
Act is intended to apply to a corporation which was
excluded from a contractual arrangement with a tenant.
However, I am not going to make a final ruling on
that until I see what some of the citations might be. I
just have some doubt that that section comes into play
at all in this case.
But if the plaintiff were able to prove its case I
wouldn’t have any doubt that the defendants’ activities
were intended to deprive the plaintiff from the use of
the premises in this building and that the plaintiff was
deprived of the use of the premises by the action of
the defendant, the question really resolving down to
whether or not any part of the decision was based on
race as a basis for making the decision rather than
the fact that race was involved as the nature of the
persons that were causing the problem.
Again, I believe that if the same problem had existed
in the building with a discotheque that was frequented
a
primarily by whites after hours — in fact, late into the
morning hours — late in the evening hours and early
morning hours — the building management would have
taken the same position and done everything it could to
eliminate that particular kind of activity in this kind of
a building.
I remain still undecided as to whether any portion
of the consideration that the defendant based its decision
on was related in some way or other to race, whether
that under the circumstances of the recent Supreme Court
decisions would give the plaintiff a recovery. I am in-
clined to think that it would under 1983 and I am also
inclined to think that race was not a motive. Race was
involved but was not one of the reasons why the defen-
dant rea! estate agent and Mr. Barritt sought to term-
inate the activities of the discotheque in this particular
building.
Those are my tentative findings. They are subject to
re-consideration after the parties have filed these docu-
ments I have mentioned and also after I have had a chance
to examine the exhibits and refresh my recollection about
the testimony and I will enter a decision after I have
had a chance to do that.
If there are any exhibits that I don’t have here I
would like to have copies of them to the extent that you
feel you rely on them on one side or the other. I will
make a decision as soon as I can after I receive these two
filings. One week for each side.
MR. MEISTER: Thank you, vour Honor.
MR. GROSS: Thank you, your Honor.
— 10a —
In Tue Unirep States District Court
NortTHERN District Or ILLINOIS
FASTERN DIVISION
Cotrerire SreveEN ENTERPRISES CORPORATION,
an Illinois corporation,
Plaintiff,
VS.
Tue EqurrasLe Lire AssurANce Society Or THE UNITED
States, and T B & Z Reattry Anp MANAGEMENT
Corporation, and Lester S. Barritt,
Defendants.
78 C 238
CERTIFICATE
I, James W. Cheek, hereby certify the foregoing is a
true, accurate and partial transcript of the proceedings
had in the above-entitled cause before the HONORABLE
THOMAS R. MeMILLEN, one of the Judges of said
Court, in his courtroom in the United States Courthouse,
Chicago, Illinois, on May 11, 1979.
/s/ Ilegible
Official Court Reporter
United States District Court
Northern District of Illinois
—lla—
APPENDIX B
Unitrep States Districr Court
NorTHERN District Or ILLINOIS
EASTERN Division
CoTEeRIE SEVEN ENTERPRISES CorP.,
Plaintiff,
v.
EQuiTaBLe Lire AsSsurANCE Society Or THE Unitep States,
T. B. & Z. Reatry Anp MaAnaGemMent Corp., and LESTER
S. Barritt,
Defendants.
NO. 78 C 238
FINDINGS AND CONCLUSIONS
OF FACT AND OF LAW
Plaintiff’s amended complaint seeks a money judgment
for an alleged violation of its civil rights. Plaintiff
alleged defendants violated Chapter 42 U.S.C. §§1981,
1982, and 2000(a) and conspired to and did violate Chap-
ter 42 U.S.C. $1985(3).
At trial, after plaintiff rested its case, defendants
moved the Conrt to enter an order of involuntary dis-
missal pursuant to Rule 41(2)(b) of F.R.C.P. The Court
granted said motion at the close of all the evidence as
to defendant The Equitabie Life Assurance Society of
The United States. The Court also dismissed plaintiff’s
§$1985(3) claim against the remaining defendants, T.B.
& Z. Realty and Managemen: Corp. and Lester S. Barritt.
Plaintiff has filed its motion for rehearing as to this
order.
On the basis of all the evidence heard by the court
without a jury, we find and conclude:
— ee
Findings and Conclusions of Facts
1. Plaintiff is an Illinois corporation. Its seven share-
holders and directors are black. Throughout its corporate
existence plaintiff has primarily been engaged in the
business of promoting and producing nightly discotheque
entertainment at various places in Chicago.
2. Defendant, The Equitable Life Assurance Society
of the United States (“Equitable”), is a New York cor-
poration. On or about May 1, 1974, Equitable purchased
the building commonly known as 150 North Wacker
Drive, Chicago, Illinois (“the Building”), and remained
the owner thereof until approximately June 30, 1976.
3. Defendant, T.B.&Z. Realty & Management Corp.
(“TB&Z”), was incorporated under Illinois law on or
about November 1, 1974. It managed the Building for
Equitable pursuant to a written management agreement.
The agreement provided, in part, that the compensation
was based upon the occupancy of the building. Said
agreement, dated May 1, 1974, was assigned to TB&Z
by the management firm of Turner, Bailey & Zoll, Inc.,
at or about the time TB&Z was incorporated. Turner,
Bailey & Zoll, Inc., had managed the Building previously
to that time.
4. From and after its incorporation, Barritt was the
president of TB&Z. At all times material to plaintiff’s
amended complaint, Barritt acted, not only as an officer
and agent of TB&Z, but also as an agent for Equitable
under the management agreement.
5. At all times material to plaintiff’s amended com-
pleint, Cockney Pride, Ltd., (“Cockney Pride”), formerly
known as Suffolk, Ltd., an Illinois corporation, was the
lessee of a portion of the basement and first floor of the
Building. Cockney Pride operated a restaurant and cock-
tail bar in the premises and was owned and controlled
by whites.
— 13a —
6. Throughout its tenancy, Cockney Pride proved to
be an undesirable tenant. In addition to rent arrearages,
Cockney Pride failed to maintain insurance, failed to
report its gross receipts, failed to furnish the owner
with a security deposit, made alterations to the demised
premises without first obtaining the owner’s consent and
on one occasion operated without a liquor license, all in
violation of its lease.
7. From almost the inception of its business opera-
tions, the Cockney Pride evening dinner business was
unsuccessful. It had financial difficulties throughout its
tenancy. On one occasion in the Spring of 1974, Cockney
Pride’s doors were locked by the Internal Revenue Ser-
vice (IRS) and restaurant facilities in the Building be-
came unavailable for a short while.
8. On or about April 20, 1974, plaintiff commenced
conducting discotheque entertainment activities (also
called “sets”) at Cockney Pride’s restaurant. Plaintiff
continued doing so through approximately February 15,
1976, without defendants’ consent. Plaintiff conducted
these activities at the leased premises pursuant to several
written and oral agreements between it and Cockney
Pride. The sets which were originally on one evening
per week were later increased to seven evenings per
week. They began at 8:00 p.m. on the week days and
5:00 p.m. on the weekend days. TB&Z and Barritt became
aware that the patrons of the discotheque were pre-
dominantly black, as were its owners and managers.
9. During the sets, Cockney Pride maintained per-
sonnel to operate the bar pursuant to its liquor license,
and plaintiff charged admission at the door. It also
maintained armed guards.
10. Tenants made complaints to defendants about the
operation of the restaurant, such as food odors, poor
food, fashion shows at the restaurant and display adver-
tisements. Tenants also registered complaints about the
improper parking of cars and about people congregating
=—
in the building lobby and on the sidewalk outside of the
Cockney Pride restaurant, during the “sets.”
Barritt and TB&Z did not possess knowledge of plain-
tiff’s corporate existence or the race of its owners and
officers until after plaintiff’s activities had been brought
to a halt. Such knowledge of course is irrelevant if race
was a motivation of defendants’ acts.
11. On June 20, 1974, Barritt wrote a letter to
Richard A. Reagan, Regional Manager of Equitable,
stating that the plaintiff’s activities were distressing to
the tenants “by the nature of the trade that is attracted.”
Barritt was ware that the plaintiff's patrons were
predominantly black. Barritt further stated in the same
letter that “racial or ethnic references will be tough to
avoid . . . since it is the clientele it has attracted as much
as the combo itself that is the nuisance. Can you please
have someone on your legal staff give us some guidance
in this regard. We feel this issue is vital to the existing
and future tenants of Randolph-Wacker.” Regan, on
June 25, 1974, mailed Barritt’s letter to William F.
Mueller, Vice President of Equitable in New York with
a memo stating, “Please have the Legal Department
review this request and advise if any steps can be taken
to eliminate this nuisance.”
12. The foregoing communications do not evidence
racial motivation but a desire to avoid legal involve-
ment on this issue. They do evidence defendants’ knowl-
edge that plaintiff was attracting a predominantly black
clientele, however, and that this was creating a problem
for the building. The weight of the evidence also proves
that Barritt made occasional derogatory remarks about
these black patrons or bystanders.
John Plowman, a building manager of 150 N. Wacker
Drive, was told by Barritt that tenants had complained
about the black business at night and that the niggers
have to go. Barritt also made a similar statement to
— 15a —
Francis Gutrich, a later building manager. Barritt told
Conrad Verges, the attorney for Cockney Pride, that
tenants would not move into the building because it
had become known as a nigger building. Frank Raffaelli,
the manager of Cockney Pride, was told by Barritt that
Cockney Pride would get a new lease at a reduced rent
only if they would terminate the discotheque activities.
All of these statements were apparently stating what
Barritt believed to be facts and are not conclusive evi-
dence of his motivation, but on the other hand they do
constitute slurs and a derogatory attitude toward blacks
by Barritt.
13. Barritt, Gutrich and perhaps someone from Equi-
table requested Richard Theil, the manager of the build-
ing’s garage, to keep the garage closed for evening access.
This was to harass plaintiff’s clientele.
14. In 1975 Equitable filed suit to evict Cockney Pride,
and Cockney Pride filed a counteraction to enjoin the
eviction, stating that it was racially motivated. Both
claims were settled by an agreed order in December
1975 which resulted in the termination of plaintiff’s
activities, the continuation of Cockney Pride as a bar
and restaurant, and a new lease containing one-half
reduction of the monthly rent to be paid by Cockney
Pride. The agreed order also recited that Equitable
did not discriminate against Cockney Pride on the basis
of race, but plaintiff was not a party to said litigation
and is not bound by it.
Conclusions of Law
The foregoing facts and inferences from the facts
can be summarized as follows. Defendants TB&Z Realty
and Management Corp. and Lester S. Barritt were pri-
marily concerned with renting Equitable’s building at
150 North Wacker Drive in Chicago, and their principal
motivation in taking the actions which they did against
— l6a—
the plaintiff was for business reasons. In that respect
they acted properly and not in violation of the law.
However, it is also clear that a related but secondary
motivation was to rid the building of the activities of
non-tenants who were predominantly black. The activities
of these blacks constituted a nuisance to the tenants
and therefore to the management and were undesirable
from a business standpoint. The fact that they were
blacks was somewhat incidental but nevertheless was a
factor in the defendants’ motivation. We cannot find
that the defendants acted without any racial motivation
or that they would have taken the same action had the
plaintiff’s clientele consisted merely of whites. Thus we
find and conclude that race was a subsidiary motivation
of the defendants’ actions although not the principai one.
Under the law as it has developed, any degree of
racial discrimination is impermissible under 42 U.S.C.
§1982. In Smith v. Sol D. Adler Realty Co., 436 F.2d 344
(7th Cir. 1970), the court concluded at 349-50:
[Rjace is an impermissible factor in an apartment
rental decision and ... it cannot be brushed aside
because it was neither the sole reason for discrimi-
nation nor the total factor of discrimination. We
find no acceptable place in the law for partial racial
discrimination. [emphasis in original]
Later, in Moore v. Townsend, 525 F.2d 482 (7th Cir.
1975), the court said that race is an impermissible con-
sideration in a real estate transaction if it played “some
part” in the refusal to deal (at p. 485). Certainly under
the foregoing cases plaintiff proved a prima facie case
of violation of $1982.
As we understand these two decisions, a prima facie
case can be rebutted only by extinguishing it, in other
words, by showing affirmatively that race was not a factor
at all. In Drain v. Friedman, 422 F.Supp. 366 (N.D. Ohio
1976), the court stated at p. 371:
ee a
— 17a —
Once the plaintiff in a §1982 action has made out
a prima facie case of discrimination in the rental
of property, the owner must come forward and show
that factors other than race were responsible for
his decision not to extend a lease to such plaintiff.
Defendants have not cited any case to the contrary
with respect to their burden of proof, although we note
a dictum in McDonnell Douglas Corp. v. Green, 411 U.S.
792 (1973) which states that after a prima facie case is
made out by plaintiff, the burden shifts to the defendants
“to articulate some legitimate, nondiscriminatory reason”
for their conduct (at p. 802). The court went on to say
at p. 804 that the plaintiff could rebut this defense by
showing that the stated reason was “in fact pretext.”
This case related to employment practices under Title
VII of the Civil Rights Act of 1964, and, although douht-
less pertinent to 41982, we consider the quoted language
less stringent than the tests applied in the lower courts’
cases cited above.
The Seventh Circuit has followed this dictum of course,
but even after that it rendered the decision in Moore
v. Townsend, supra, p. 8, with respect to discrimination
under §1982. We believe that we have no alternative
but to follow the foregoing Seventh Circuit decisions
of 1975 and 1970 in the case at bar.
Another legal problem which has not been faced by
the parties is whether §1982 applies to licensees of a
tenant, such as the plaintiff was. The statute gives all
citizens the same right as is enjoyed by whites to “in-
herit, purchase, lease, sell, hold, and convey real and
personal property.” At the most, the plaintiff corporation
“held” defendants’ property. Section 1982 is to be liber-
ally applied. Jones v. Alfred H. Mayer Co., 392 U.S.
409, 487 (1968). This section has been applied to the
right of blacks to drive down a street in Greene v. City
of Memphis, 535 F.2d 976 (6th Cir. 1976) and in
Jennings v. Patterson, 488 F.2d 486, 442 (5th Cir. 1974)
_
and to be invited as guests to a swimming club. Oleman
v. Lake Hills Swim Club, Inc., 495 F.2d 1333 (2d Cir.
1974).
In view of the remedial nature of $1982, we find and
conclude that it should be broadly construed to apply
to a corporation which has a license from a tenant to do
business in the building, if one of the reasons why defen-
dants caused the license to be terminated was because
of the race of the patrons of the licensee.
An alternative cause of action is stated under 42
U.S.C. §1981 which is historically in pari materia to
§1982. In fact, the Olzman and Jennings cases recognize
a cause of action under both sections of the statute.
We therefore enter a judgment for plaintiff on the
issue of liability against TB&Z Realty and Management
Corp. and Lester S. Barritt. Judgment is entered in
favor of defendants with respect to violation of 42
U.S.C. §1985(3), since we find insufficient evidence of
any conspiracy between the defendants. Plaintiff’s motion
to reconsider our finding in favor of The Equitable
Life Assurance Society of the United States at the close
of plaintiff’s evidence is denied.
This case will be referred to a magistrate for taking
evidence on the measure of the plaintiff’s damages. Since
its relationship with Cockney Pride was apparently ter-
minable at will, and since plaintiff was terminated by
Cockney Pride without any evidence of racial animus
on the part of that tenant, plaintiff will be required to
prove not only its loss of profits but also the period
of time during which it could reasonably have been
expected to receive such profits had it not been for the
actions of the defendants.
ENTER:
/s/ Thomas R. MeMillen
Judge, U. S. District Court
DATED: Sept. 21, 1979
ne ee tees
—
APPENDIX C
Unttrep States Districr Court
NortTHern District Or ILLINo!Is
Eastern Drvision
Corertre Seven Enterprises Corp.,
Plaintiff,
vs.
THe EQuirasLte Lire Assurance Soctety Or Tae Unirep
Srates, T.B. & Z. Reatty Anp MANAGEMENT Corp. and
Lester S. Barritt,
Defendants.
NO. 78 C 238
DECISION
Defendants have filed a motion to set aside the judg-
ment entered on September 21, 1979 or for a new trial.
The motions have been briefed by both sides and the
court has reviewed the evidence and also the applicable
law. We find and conclude that defendants’ motions
should be denied.
Defendants point out that §1982 on its face apparently
requires plaintiff to show disparate treatment hetween
blacks and whites with respect to the ownership, us¢ or
other incidents of real property, citing Clark v. Universal
Builders, Inc., 501 F.2d 324 (7th Cir. 1974). That case
does involve a price differential in the sale of real estate
constituting discrimination against blacks. On the other
hand, no such differential was shown in the latest case
on which we relied, Moore v. Townsend, 525 F.2d 482
(7th Cir. 1975). Furthermore, in the earlier case of
Smith v. Sol D. Adler Realty Co., 486 F.2d 344 (7th Cir.
1970), the trial court had found that the owner would
have rejected a white tenant for the same reason that
— Ne
he rejected a black tenant; the Court of Appeals never-
theless reversed because race was a factor in rejecting
the black applicant.
Therefore, as the law has been developed under $1982
by the Seventh Circuit, if consideration of race con-
stitutes any of the owner’s reason for rejecting a black,
this fact itself constitutes discrimination and disparate
treatment of blacks. It is not necessary for the plaintiff
to show that the same treatment would have been dealt
to whites; the presence of a racial consideration without
more makes the treatment between members of the races
different and illegal.
The elimination of a requirement to show actual dis-
parate treatment is also a practical approach to the
problem. It would be speculative to find as a fact that
the defendants would have treated a “white” discotheque
any differently than it treated the plaintiff’s discotheque.
No such situation was presented, and none could be
hypothetically presented with any degree of reliability.
The likelihood is that if patrons of a white discotheque
committed exactly the same nuisances as patrons of the
plaintiff’s discotheque did, defendants would presumably
have attempted to eliminate the nuisances committed
by the whites. Nevertheless, if in ridding the premises
of the nuisance, defendants are motivated to any degree
by racial considerations, the law at least in this circuit
makes the defendants’ actions a violation of §1982.
Defendants further base their motion on the ground
that the findings in our decision of September 21, 1979
are somewhat inconsistent with the comments which we
made at the close of the evidence in open court. This may
be true, but our comments in open court were expressly
characterized as tentative and also were subject to further
examination in the light of the Seventh Circuit cases
which we have discussed. When the law as construed
by the Seventh Circuit is applied to the facts in the case
at bar, the result is a violation of $1982.
Pr a ed aaa REN | Gin a
cs stianttn ceestiaeinieastieieatntias et eee
— 2la—
On page 11 of their memorandum filed October 9, 1979,
defendants argue that the statements attributed to de-
fendant Lester S. Barritt are not supported by the evi-
dence. Defendants, however, overlook the testimony sup-
porting this finding, such as that of Frank Raffaelli, John
Matthews, John Ploughman and attorney Conrad Verges.
Almost all of the non-party witnesses testified that Bar-
ritt or his subordinates referred to the defendants as
“niggers” in the context of discussing the discotheque
and its undesirability. The motivation of Barritt and his
company, T.B. & Z. Realty and Management Corp., de-
pends upon his state of mind which must be inferred
from all the evidence, primarily the language which he and
his subordinates used and the actions which they took.
The inference is clear from the evidence that race was a
factor, although not necessarily the principal factor, mo-
tivating the actions which were taken against the plain-
tiffs.
In their reply brief filed October 22, 1979, defendants
eall attention to finding 14 that the new lease granted
Cockney Pride reduced the monthly rent to one-half. This
is not completely accurate, as a detailed comparison be-
tween the 1971 and the 1976 lease reveals. Therefore, the
word “one-half” should be changed to the word “a.” Other
than that, defendants’ motion to set aside our judgment
of September 21, 1979 is denied.
Defendants have shown no grounds justifying a new
trial. That motion is also denied.
Enter:
/s/ Thomas R. McMillen
Judge, U. S. District Court
Dated: November 9, 1979
a
APPENDIX D
UNITED STATES COURT OF APPEALS
For the Seventh Circuit
Chicago, Illinois 60604
Submitted: May 5, 1982
October 25, 1982
Before
Hon. Richard D. Cudahy, Cireuit Judge
Hon. Jesse E. Eschbach, Cireuit Judge
Hon. George Templar, Senior District Judge*
Cotertrr Seven Enterprises Corporation, an Illinois cor-
poration,
Plaintiff-Appellee-Cross-Appellants
Nos. 81-2305 & 81-2363
vs.
T.B. & Z. Reattry anp MANAGEMENT CorporATIon, and
Lester S. Barritt,
Defendants-Appellants-Cross-A ppellees,
and
Tue EqguitasLe Lire ASSURANCE SocieTy OF THE UNITED
STatTEs,
Defendant-Cross-Appellee.
Appeals from the United States District Court for the
Northern District of Illinois, Eastern Division
No. 78-C-238
Hon. Thomas R. McMillen, Judge
* The Honorable George Templar, Senior District Judge
of the United States District Court for the District of
Kansas sitting by designation.
AO ee eR,
— 23a —
ORDER
Plaintiff-appellee and cross-appellant, Coterie Seven En-
terprises (Coterie Seven), a corporation, was engaged in
the business of conducting evening discotheque activities
at various places in Chicago. One such place was at a
restaurant operated by Cockney Pride, Ltd., the lessee of
the lower floor level and the first floor of an office build-
ing located at 150 North Wacker Drive, owned by defen-
dant and cross-appellee Equitable Life Assurance Society
of the United States (Equitable).
Defendant-appellant and cross-appellee T.B.&Z. Realty
and Management Corporation (TB&Z) managed the build-
ing for Equitabie. Defendant-appellant and cross-appellee
Lester Barritt (Barritt) was president of TB&Z. Plain-
tiff Coterie Seven brought an action against TB&Z, Bar-
ritt and Equitable claiming damages for alleged race dis-
crimination under 42 U.S.C. $§ 1981, 1982 and 1985. In a
court trial damages and other fees were awarded plain-
tiff against TB&Z and Barritt but the case against Equi-
table was dismissed. The appeal was taken by defendants
TB&Z and Barritt from the judgment rendered against
them. Plaintiff cross-appeals contending that the trial
court should not have dismissed its claim against Equi-
table. Both the plaintiff and defendants challenge the
methods used by the court in computing the amount of
damages and attorney fees.
BACKGROUND
On or about May 1, 1974, Equitable purchased the office
building at 150 North Wacker Drive in Chicago. One of
its tenants, Cockney Pride, operated a restaurant and
cocktail bar on the first floor of the building. Throughout
its tenancy, Cockney Pride had been an unsuccessful busi-
ness and, as the court found, an undesirable tenant. The
rent was frequently in arrears, and the lease was violated
by failing to maintain insurance, failing to report gross
receipts, failing to furnish a security deposit, making al-
—
terations to the premises without the owner’s consent, and
operating, at times, without a valid liquor license. For
a short while in the spring of 1974, its doors had been
padlocked by the Internal Revenue Service.
On or about April 20, 1974, which would have been prior
to Equitable’s purchase of the building, Coerie Seven be-
gan conducting discotheque entertaininent called “sets”
at the Cockney Pride restaurant. Initially, these sets were
held weekly, but they eventually became an almost nightly
occurrence. The sets were successful, bringing large num-
bers of customers, most of them black, to the Cockney
Pride. Coterie Seven paid rent to Cockney Pride, which
actually covered the wages of the employees who operated
the bar. Cockney Pride sold sandwiches and drinks as
well. Coterie Seven provided security at the door, sound
equipment, and a portable dance floor. Later, a perma-
nent dance floor was installed on one level of Cockney
Pride.
Other tenants in the building complained about the go-
ings-on at the Cockney Pride. These complaints involved
the large crowds of persons congregated in the lobby of
the building after hours, cars parked on the sidewalk,
and marijuana usage near the building. In addition, some
tenants complained of food odors from the restaurant
and of lingerie shows in the restaurant and the restaurant
and discotheque were wholly inappropriate in a first-
class office building. There was evidence that Lester
Barritt, the president of TB&Z which managed the build-
ing for Equitable, decided that they had to “get the
blacks out” because the building was getting the reputa-
tion as a “nigger building” and tenants were reluctant
to rent offices there. |
TB&Z requested Cockney Pride to discontinue the dis-
cotheque sets, but Cockney Pride refused. Barritt and
various managers of the building asked Richard Theil,
the manager of the parking garage, to keep the garage
closed at night to discourage the “night business”. Barritt
—
also wrote a letter to Equitable seeking advice. The letter
was forwarded by Richard Reagan, the regional manager
of Equitable, to Equitable’s legal counsel, and Equitable
later filed suit to evict Cockney Pride. Cockney Pride
filed an injunction in federal court and alleged that the
eviction was racially motivated. These suits were settled
late in 1975. Throughout this time period, Coterie Seven
continued to conduct discotheque entertainment at Cock-
ney Pride.
In obtaining a settlement of the suits, Frank Rafaelli,
the manager of Cockney Pride, was told by Barritt
that Cockney Pride would get a new lease, at a reduced
rent, only if the discotheque activities were terminated.
Equitable and Cockney Pride entered into this new lease
in early 1976. The lease prohibited evening entertainment
and reduced the monthly rent by one-half.’ On about
February 15, 1976, Coterie Seven ceased its discotheque
entertainment at the Cockney Pride. On or around
August 1, 1976, Cockney Pride ceased all discotheque
operations at its other locations and went out of business.
Coterie Seven brought this civil rights action against
Equitable, TB&Z, and Barritt alleging a violation of
42 U.S.C. §§ 1981, 1982 and 1985 by tortious, racially
motivated inference with an advantageous business rela-
tionship. The trial court found there was no conspiracy
and dismissed the 1985 cause of action as to all defen-
dants. It also dismissed Equitable from the entire law-
suit because Equitable did not authorize any of the
actions taken against the plaintiff.
The trial court found that TB&Z and Barritt were
liable for violations of Sections 1981 and 1982. The
issue of damages was then referred to a magistrate who
recommended that plaintiff be awarded $6,008.00 in
This provision in the new lease effectively ended the
discotheque operations of Coterie Seven on Equitable’s
premises.
— %6a —
compensatory damages and no punitive damages. The
district judge, who heard the evidence as to liability,
approved the magistrate’s findings and, in addition,
awarded the plaintiffs $18,517.11 in attorney’s fees. These
appeals followed.
On appeal, defendants argue that there must be some
showing that there was dissimilar treatment between the
races else there can be no finding of discrimination. But
the trial court determined from all the facts established
and inferences that could be drawn from them that he
could not find that defendants acted without any racial
motivation or that they would have taken the same action
had the plaintiff’s clientele consisted merely of whites.
Though stated in the negative, the trial court simply
responded to the defendants’ contention that there was
no showing of discrimination by stating that he could
not so find. The facts and circumstances considered by
the court support the reasonable inference of discrimina-
tion drawn by the court. We agree that discriminatory
intent is a necessary allegation in a 1981 cause of action,
Washington v. Davis, 426 U.S. 299 (1976), but there was
evidence of this intent and the trial court so found.
Specifically, the trial court found that the fact “that
[Coterie Seven’s customers] were black was somewhat
incidental but nevertheless a factor in Defendants’ moti-
vation... . Thus we find and conclude that race was a
subsidiary motivation of the Defendants’ actions although
not the principal one.” The defendants argue that the
purposeful discrimination requirement is not satisfied by
a finding of race as an incidental motivation. An action,
however, can be discriminatory without having race as
its sole motivation. For example, in Clark v. Universal
Builders, Inc., 501 F.2d 324 (7th Cir. 1974), although it
could be said that the reason for the two-tiered housing
market with different prices for similar houses depending
on the racial makeup of the neighborhood and the race
of the anticipated purchaser was economic, the court
=.
found a discriminatory intent, despite the argument that
the primary motivation for the price structure was to
maximize income.
We do not require that race must be the sole motiva-
tion in order for liability to arise under Section 1982.
Moore v. Townsend, 525 F.2d 482, 485 (7th Cir. 1975);
Smith v. Sol D. Adler Realty Co., 436 F.2d 344, 349-350
(7th Cir. 1970). Although these were both Section 1982
eases, we see nothing in the language or the legislative
history of Section 1981, which would require race to be
the sole motivation for the defendants’ actions before
plaintiff could recover under Section 1981. An action
rarely has a single motivation. To interpret Section 1981
as reaching only conduct motivated solely by racial dis-
crimination would undermine the broad remedial purpose
of the civil rights statutes.
The plaintiff, in its cross-appeal, argues that the trial
court erred in dismissing Equitable Life Assurance
Society, the owner of the building, at the close of plain-
tiff’s case. Plaintiff claims that it was error because
Equitable committed independent, racially discriminatory
acts against Coterie Seven. |
In reviewing the record we helieve that the plaintiff
established a prima facie case of discrimination against
Equitable. Equitable instituted eviction proceedings
against its tenant, Cockney Pride, for which plaintiff
furnished discotheque entertainment on the leased prem-
ises. Tt was only after Barritt had informed Equitable
that the racial composition of the discotheque’s clientele
constituted a “nunisanee” that Equitable took action
againt Cockney Pride to evict it and thus terminate the
entertainment it provided. The claims of rent arrearages,
and other legitimate grounds for eviction claimed by
Equitable could have been a mere pretext for Equitable’s
action considering the timing of events. Furthermore,
the substance of the settlement between Cockney Pride
and Equitable in the eviction proceedings, which weve
_
extremely generous to the tenant, lends further support
to plaintiff’s case in light of tie issues raised in the
uitieation.
o
While it was acting on the advice of Barritt concern-
ing the complaints of other tenants of the building,
Equitable’s own motivation for inducing the termination
of the discotheque activities is the threshold issue.
Equitable had legitimate grounds for terminating those
activities: not only did they violate an express term
of the lease, but they also generated non-discriminatory
complaints from some of the other tenants of the build-
ing. If Equitable induced the termination of the disco-
theque activities for one of these legitimate reasons,
neither it nor the other defendants are liable. On the
other hand, if Equitable acted at least in part for dis-
criminatory reasons, it is liable, as would be the other
defendants given the evidence of Barritt’s discriminatory
purpose.
If Equitable acted out of a legitimate concern for its
other tenants totally divorced from the racial concerns,
the fact that one of its agents had a personal bias
against plaintiff’s clientele is simply irrelevant, in legal
contemplation, in analyzing Equitable’s own liability.
Equitable was not forever barred from enforcing the
terms of its lease against discotheque activities once
it learned that the discotheque’s clientele was _pre-
dominately black or when it discovered that one of its
agents was racially prejudiced. It retained the legal
right to evict a tenant violating the terms of a lease so
long as it did not share in its agent’s racist motivation.
Of course, as the district court observed, persons mav
have more than one motivation as a predicate to their
actions, and it is a difficult task to determine whether
Equitable would have taken a different approach to the
situation if it had been ignorant of the racial composition
of the discotheque’s clientele.
—
If it is established that racial discrimination was a
motivating factor behind the challenged activities of
Equitable, then the burden is passed to it to prove by a
preponderance of the evidence that the same actions would
have been taken and the same directions given its agents
even had an unlawful purpose not been a motivating
factor. If Equitable can prove this, Coterie Seven cannot
attribute its injury to racial discrimination. See Mt.
Healthy City Board of Education v. Doyle, 429 U.S. 274
(1976); Lewts v. Bethlehem Steel Corp., 440 F.Supp. 949,
966 (D.Md. 1977).
The civil rights statutes do not impose liability for
inchoate discrimination. If Equitable caused the termina-
tion of the discotheque activities for entirely permissible
reasons, the fact that Barritt secretly or even openly
delighted in that result because of a discriminatory
animus towards blacks does not provide a basis upon
which to award plaintiff compensatory relief. Similarly,
the fact that Barritt advised his principal that in his
opinion the discotheque had to be closed because of the
racial composition of the clientele is not a basis for im-
posing liability on him if Equitable ignored that advice
and proceeded to act in precisely the same way it would
have acted if Barritt had kept his bigoted views to
himself. On the other hand. if Barritt was actually
successful in inducing Equitable to aiscriminate on racial
grounds, he and TB&Z would be jointly and severally
liable for his actions.
While defendants Barritt and TB&Z have not, in these
appeals from the judgment rendered against them,
claimed that the judgments against them should be re-
versed because they did not cause the threatened eviction
which ended plaintiff’s use of the premises leased bv
Coterie, we believe that the ends of justice would be
better served by reversing the case and remanding it for
a new trial,
lesiatndeiieniianidcemeiieeetimiaaeimiaiiieiiaeiusiiiaiiiiiusillll
~~
We believe the proper rule to apply here is found in
2 Fed.Proc.L.Ed., § 3:700, where it is said:
The question whether a joint and several judgment
should be reversed in its entirety is a matter resting
solely within the discretion of the appellate court,
which must decide how the ends of justice may be
served. Generally, a judgment will be reversed as to
all parties, if the contrary would work an injustice.
Const. Pub. Co. v. Dale, 164 F.2d 210 (5th Cir. 1947);
Washington Gas Light v. Lansden, 172 U.S. 534, 43 L.Ed.
543, 19 S.Ct. 296 (1899).
And in Gasoline Preducts v. Champlin Co., 283 US.
494, 500 (1931), the court held:
Where the practice permits a partial new trial, it
may not properly be resorted to unless it clearly
appears that the issue to be retried is so distinct
and separable from the others that a trial of it alone
may be had without injustice.
(Citations omitted.)
The liability of the defendants in this case might be
found to be joint and several. In determining whether
to apply principles of joint and several liability in a
civil rights action, the courts look to the substantive
law of the forum state. See, 42 U.S.C. §1988. In Illinois,
when the injury caused by two or more tort-feasors is
indivisible, joint and several liability must be imposed.
Koltz v. Jahaaske, 312 Tll.App. 623, 38 N.E.2d 973, 975
(1942).
We hold that a claim should not be dismissed where,
considering the evidence in the light most favorable to
claimant and giving it the benefit of all reasonable infer-
enees which can be drawn from the evidence, the trier
of fact could reasonably sustain the claim.
The dismissal of plaintiff’s claim against Equitable
was error and requires a reversal of the order of dis-
— 3la —
missal. Because our determination of the issue of liability
requires a new trial of all issues, we do not pass upon
the questions submitted relating to damages and at-
torneys’ fees.
The issues to be retried are so inseparable from the
others already decided that a trial of plaintiff’s actions
against Equitable alone would not best serve the inter-
ests of justice.
We, therefore, reverse all the orders and judgments
appealed from and direct that a new trial be granted
to all the parties.
CupaHny, Circuit Judge, concurring. I concur in this
order remanding the case for retrial as to both parties.
I would add, however, that Equitable may also be liable,
on one possible state of facts, for the acts of its agent.
An owner of property may be sued under 42 U.S.C.
§ 1982 for the acts of his agent under the doctrine of
respondeat superior. Moore v. Townsend, 525 F.2d 482
(7th Cir. 1975). Discriminatory acts will be imputed to
a property owner, even though his agent may have acted
without the knowledge of the owner. See Jzard v. Arndt,
483 F. Supp. 262 (E.D. Wis. 1980); Martin v. John C.
Bowers & Co., 334 F. Supp. 5 (N.D. Ill. 1971). In the
ease at hand, it is unclear to me whether the decision
to institute eviction proceedings was made by the realty
company or by Equitable. The contract between the two
provides that negotiating leases and instituting eviction
proceedings are both within the agent’s duties, although
the action would be taken in the name of Equitable.
If the realty company was responsible for, and caused,
the action to evict, therefore, and did so from a discrimi-
natory motive, Equitable would presumably be liable
as well.
=
APPENDIX E
Unitrep States Court Or APpprALs
For Tse Seventu Circuit
Chicago, Illinois 60604
Submitted May 5, 1982
February 11, 1983
Before
Hon. Ricwarp D. Cupany, Circuit Judge
Hon. Jessr E. Escupacn, Circuit Judge
Hon. Grorce Trempuar, Senior District Judge*
Coterte Seven ENTerRpRISES CoRPORATION,
an Illinvis corporation,
Plaintiff-Appellee-Cross Appellant,
No. 81-2305 & 81-2363
vs.
T.B.& Z. Reatty Anp MAnaGeMeNT CorPoRATION, and
Lester S. Barritt,
Defendants-Appellants-Cross Appellees,
and
THe Equrraste Lire Assurance Soctrety Or THe UNITED
States,
Defendant-Cross Appellee.
Appeals from the United States District Court for the
Northern District of Illinois, Eastern Division
No. 78-C-238
Hon. Tuomas R. McMruen, Judge
* The Honorable George Templar, Senior District Judge
of the United States District Court for the District of
Kansas sitting by designation.
—_ e—
ORDER ON REHEARING
Defendants have presented a Petition for Rehearing in
which they contend that this court premised its decision
on the belief that plaintiff’s claim against Equitable
was dismissed for failure to establish a prima facie case,
and they make the positive assertion that the trial court
made no such ruling.
In response to the Petition for Rehearing, the plain-
tiff points out that the trial court dismissed its case
against defendant Equitable under Rule 41(b), Fed.R.
Civ.P., because as that court erroneously held, plaintiff
had not presented a prima facie case as to Equitable.
Plaintiff further suggests that, since Equitable proceeded
to introduce evidence in support of its defense to plain-
tiff’s claim, a new trial would presumably produce no
new evidence on behalf of defendants on the issue of
liability but that a further inquiry as to additional dam-
ages to plaintiff caused by Equitable should be afforded.
We have reviewed the trial record of this case. Per-
tinent portions of the record reveal that, at the close of
the plaintiff’s case, attorneys for the defendants pre-
sented a motion under Rule 41(b), Fed.R.Civ.P., for the
trial court to enter a directed verdict in their fevor and
against plaintiff and to dismiss the cause with prejudice.
(R.Vol.i Doe.45).
The relevant portion of the rule relied on by the defen-
dants provides that:
After the plaintiff, in an action tried by the court
without a jury, has completed the presentation of
his evidence, the defendant, without waiving his
right to offer evidence in the event the motion is not
granted, may move for a dismissal on ‘the ground
that upon the facts and the law the plaintiff has
shown no right to relief. The court as trier of the
facts may then determine them and render judgment
against the plaintiff or may decline to render any
— en
judgment until the close of all the evidence. If the
court renders judgment on the merits against the
plaintiff, the court shall make findings as provided
in Rule 52(a). Unless the court in its order for
dismissal otherwise specifies, a dismissal under this
subdivision and any dismissal not provided for in
this rule, . . . operates as an adjudication upon the
merits.
When the plaintiff rested its case (T.384), the trial
court inquired of defendants’ counsel whether he would
have any evidence, whereupon counsel replied that he
wanted to submit a written motion for a directed finding
in favor of defendants and against plaintiff. The court
then inquired of defendants’ counsel whether he would
have any evidence if such a motion was not granted.
Defendants’ counsel announced that there would be three
witnesses. The trial court did not then rule on the motion
but indicated that he would do so when the case came
on for trial the following Thursday. (T.385).
When trial was resumed the following Thursday, the
trial court observed that “there is at least a colorable
prima facie case by the plaintiff here” and then an-
nounced, “I will deny the motion.” (T.389). Thereafter,
defendants proceeded to introduce evidence and rested.
(T.437). The trial court then declared that it was his
conclusion “that there really hasn’t been any prima facie
case against Equitable Life Assurance Society” and “I
will enter a finding for the defendant Equitable at this
time.” ('T.439).
The trial court filed “Findings and Conclusions of
Fact and of law.” (R.50) In a preliminary statement,
no findings as to Equitable were made, the trial court
stating that:
At trial, after plaintiff rested its case, defendants
moved the court to enter an order of involuntary
dismissal pursuant to Rule [41(b)] of the Federal
A Soci wt Mee Te ARE RR IE Nh RG NNR NRE AS WER REED Me
—- 35a, —
Rules of Civil Proocedure. The court granted said
motion at the close of all evidence as to Equitable
Life Assurance Society of the United States.
No other finding or conclusion related to defendant
Equitable other than the Finding No. 14, which found
in substance that Equitable had filed suit to evict Cock-
ney Pride, that the prior action and a counter action
by Cockney Pride had been settled by an agreed order
which recited among other things that Equitable did not
discriminate against Cockney Pride on the basis of race,
but that plaintiff was not a party to said litigation and
was not bound by it, and that plaintiff’s motion to re-
consider the court’s finding in favor of Equitable at the
close of the plaintiff’s evidence be denied.
These findings were filed September 21, 1979. On
November 19, 1979, defendants presented a motiun to
the trial court for a Section 1292(b) certification of the
court’s order of November 9, 1979 denying defendants’
motion to set aside judgment and a motion for a new
trial. These motions were denied, but during the presenta-
tion of the motions, the court made this statement:
Well, actually, the issue with respect to Equitable
was a failure of proof rather than the legal issue
that the defendants want to take up.
(R.20, p.5).
The record is clear that the trial court dismissed
the claim of plaintiff against Equitable for the reason
that, in the court’s opinion, the plaintiff had failed to
prove a case by its evidence. This was the trial court’s
announcement. His statement was unambiguous. There
was no other finding on any issue of fact or law, and
the trial court made a determination of no other issue
as the court was bound to do under Rule 41(b) and Rule
52(a) if he had intended to make any different ruling.
We hold that the involuntary dismissal of plaintiff’s
claim on the grounds that there was a failure of proof
—_ oe
by plaintiff on its claim was reversible error absent
findings of fact and conclusions of law required by Rule
52 F.R.Civ.P. for the reasons set forth in our original
order.
On reconsideration, we conclude that the trial court
should in the first instance determine whether the evic-
tion action brought by Equitable against Cockney Pride
was prompted in whole or in part by a purpose to dis-
criminate against Coterie Seven when, in the settlement
of that action in connection with a counter action brought
against it by Cockney Pride alleging that the eviction
suit was raciaily motivated, the parties, Equitable and
Cockney Pride, entered into a new lease which provided
1a part that there should be no evening entertainment
on the premises and that the rent was reduced fifty per
cent.
This settlement resulted in the exclusion of Coterie
Seven from the premises and they were not permitted
to conduct any further discotheque sets there.
We further conclude that the judgments obtained by
the plaintiff against defendants T.B.&Z. Realty and
Management Corporation and its president Lester S.
Barritt should be vacated and the cases remanded to the
trial court. In the event the trial court should find and
determine, subject to our review, that the eviction action
by Equitable was prompted by legitimate reasons for
terminating the tenancy of Cockney Pride, such as non-
payment of rent, failure to maintain insurance, failure
to report gross receipts, making alterations without own-
ers’ consent, failure to furnish security deposits, op-
erating without valid liquor license, and that the action
was not motivated in whole or in part by a racially
discriminatory purpose, then the dismissal of the action
against Equitable would be upheld. But, if it is found
that the eviction action and the new lease excluding
plaintiff from entertaining on the premises was motivated
— 37a —
in whole or in part by a racially discriminative animus,
then judgment against Equitable should be awarded.
In the event that it should be found that the eviction
action was brought solely for legitimate reasons and
not because of any racial discrimination motive and
that the new lease made with Cockney Pride excluding
evening entertainment was for valid business reasons
and that the termination of the prior lease and the
creation of the later one was the proximate cause of
plaintiff’s alleged damages, then the judgments against
T.B.&Z. and Barritt would have no foundation to support
them.
On the other hand, if it be found that Barritt’s direct
communications with the lessee, Cockney Pride, and his
threats to the lessee and his conduct as manager of the
leased property were a substantial factor in causing
the elimination of plaintiff by the lessee from conducting
sets on the premises when the new lease was made with
Equitable, then the liability of T.B.&Z. and Barritt would
be established and the judgments against them would
be reinstated.
We, therefore, direct that the judgments against
T.B.&Z. and Barritt and the order of dismissal in favor
of Equitable be vacated and the causes remanded for
findings by the trial court which will facilitate our review
of the issues pertaining to the basis of liability of the
respective defendants.
ee
APPENDIX F
Unitep States Districr Court
NortHERN District Or ILLro1s
EASTERN Division
CotTerte Seven ENTERPRISES CorP.,
Plaintiff,
Vs.
THe Equiraste Lire Assurance Society Or THe UNITED
Srates, et al.,
Defendants.
NO. 78 C 238
DECISION
This case comes back to us pursuant to two decisions
by the Seventh Circuit Court of Appeals, the first dated
October 25, 1982 and the second, on rehearing, dated
February 11, 1983. The decisions, of course, are binding
upon this court and the parties, and we now intend to
comply with them to the extent that they are self-
explanatory. We have also conferred with the parties
concerning their respective understanding of the two
decisions, and both sides have submitted additional pro-
posed findings and conclusions of law. They agree that
no further evidence need be taken in this case, on the
issue of liability at least, and both parties have tendered
most of the findings which we made on September 21,
1979 after trial. Those findings did not specifically address
the issue of liability of defendant Equitable Life Assur-
ance Society of the United States and were not so in-
tended because Equitable had received a favorable ruling
from the bench at the close of all the evidence.
— “an
The “threshold” problem causing reversal by the Court
of Appeals is stated on p. 5 of the Order of October
25, 1982 to be “Equitable’s own motivation for inducing
the termination of the discotheque activities. . . .” The
Court of Appeals further stated, as we found, that
Equitable had legitimate grounds for terminating those
activities, citing various business or “legitimate” reasons
as contained in our findings 6, 7, and 10, inter alia.
The deficiency found by the Court of Appeals in our
finding in favor of the defendant Equitable at the close
of all the evidence pursuant to F.A.C.P. 52(a) was the
failure to support this finding by specific facts and con-
clusions on the record at that time. We subsequently
confirmed the decision in favor of Equitable by our
written decision of September 21, 1979, with no findings
or conclusions as to that defendant’s liability.
We now adopt our written findings to apply to defen-
dant Equitable Life Assurance Society as though made
specifically at the close of all the evidence. We further
4nd and conclude that business reasons, and not any
racial motivation, was the basis of Equitable’s eviction
action against Cockey Pride, Ltd., its tenant, filed in the
State court and settled December 17, 1975. (See Finding
14.) The filing of the lawsuit by Equitable was not a
pretext for eliminating a discotheque owned and operated
by blacks but was for the reason of protecting the in-
tegrity and value of its real estate. Defendant did not
show that Equitable’s reasons for filing the State court
lawsuit were pretextual, and there is no reason to be-
lieve that this defendant would have acted any differently
if the nuisance had been caused exclusively by white
patrons.
A new lease was entered into between Equitable and
Cockney Pride, Ltd., on March 1, 1976, generally in-
corporating the terms of the settlement of the State
court lawsuit, except that the settlement had also pro-
~~
vided that Equitable did not discriminate against Cock-
ney Pride on the basis of race. The lease forbade
evening “entertainment” and Coterie Seven moved else-
where. What happened thereafter between the landlord
and its tenant is irrelevant to this case, and it is our
finding that plaintiff adduced no evidence of racial
animus or discrimination by Equitable. In fact, we were
somewhat bemused at the time of trial that plaintiff chose
to proceed against Equitable at all.
We further find and conclude that the racial animus
evidenced on the part of T.B. & Z. Realty and Manage-
ment Corporation and its agent, the defendant Lester
Barritt, were not the acts of defendant Equitable. These
other two defendants were agents of Equitable for the
purpose of leasing and managing the premises, but their
discriminatory statements and conduct were not author-
ized by Equitable, were not condoned by Equitable, and
were not shown to be known by Equitable, except through
one business letter written by Barritt to Equitable on
June 20, 1974 (Finding 11). This letter was sent to
Equitable’s attorneys in New York for legal guidance,
but the racial innuendoes in the letter were not shown
to have been adopted by Equitable. The legal action
which followed was the eviction suit in the State court,
filed in late 1975. As found above, there is no evidence
that this action was racially motivated, and the tenant
stipulated that it was not.
The fact that the lawsuit was motivated in part to
eliminate a discotheque which was responsible for vari-
ous violations of the law and of the previous lease is not,
in our opinion, evidence of racial animus. Otherwise
it would be virtually impossible for a landlord to evict
an undesirable discotheque or other activity if it also
happened to be frequented by blacks.
The United States Supreme Court has entered yet
another decision explaining its views on the burden of
proof in a race discrimination case. United States Postal
— 4la —
Service v. Atkens, ........ Bae scans , 51 U.S.L.W. 4854 (Apr.
14, 1983). We read that decision as meaning that the
bottom line in deciding such cases, whether under § 1982
or Title VII, is on the weight of the evidence as a whole.
On the basis of our findings above, having reviewed our
previous findings, the findings which were adopted by
the two opinions of the Court of Appeals, and the pro-
posed findings and conclusions of the parties, it is our
conclusion that plaintiff has failed to prove by a pre-
ponderance of the evidence that the defendant The
Equitable Life Assurance Society of the United States
committed, authorized or condoned any acts of racial
discrimination or animus against the plaintiff. In short,
the necessary nexus between the discriminatory acts
and statements and the defendant Equitable has not been
proved by the weight of the evidence.
The Court of Appeals has ruled that, if Equitable is
not liable, then the judgments against T.B. & Z. Realty
and Management Corporation and Lester S. Barritt
“would have no foundation to support them.” (Order
dated February 11, 1983, p. 4). The court then added:
On the other hand, if it be found that Barritt’s
direct communications with the lessee, Cockney
Pride, and his threats to the lessee and his conduct
as manager of the leased property were a substantial
factor in causing the elimination of plaintiff by the
lessee from conducting sets on the premises when
the new lease was made with Equitable, then the
liability of T.B.&Z. and Barritt would be established
and the judgments against them would be reinstated.
We understand this last statement to indicate that
T.B.&Z. and Barritt could be found lable because of
their own acts and statements in causing the tenant
Cockney Pride, Ltd. to terminate plaintiff’s activities.
Our decision of September 21, 1979 was based on the
theory that these other two defendants were acting in-
—
dependently of defendant Equitable and were liable for
their own discrimihatory motives, carried out by Cockney
Pride (see Findings 8 and 12 and page 10 of our
Decision). For that reason we reinstate the judgment
against T.B.&Z. Realty and Management Corporation and
Lester S. Barritt for damages and attorneys’ fees. A
Rule 58 judgment will be entered against them and in
behalf of plaintiff as of January 6, 1981 in the amount
of $6,008 and as of July 9, 1981 in the amount of
$18,517.11.
ENTER:
/s/ Thomas R. McMillen
Judge, United States District Court
DATED: JUL 8 1983
—
JUDGMENT IN A CIVIL CASE
Unitep States District Court
District: Northern District Of Illinois
Docket Number 78 C 238
Name of Judge Thomas R. McMillen
Case Title
CoTeRIE SEVEN ENTERPRISES CorP.
Plaintiff
Vv.
EquitasBLe Lire Assurance Socrety Or U.S., et al
Defendants
[] Jury Verdict. This action came before the Court
and a jury with the judicial officer named above
presiding. The issues have been tried and the jury
has rendered its verdict.
[x] Decision by Court. This action came to trial or
hearing before the Court with the judge (magistrate)
named above presiding. The issues have been tried
or heard and a decision has been rendered.
IT IS ORDERED AND ADJUDGED
that the judgment against T.B. & Z and Lester Barritt
for damages and attorneys’ fees is reinstated. Judgment
is entered against them and in behalf of the plaintiff,
Coterie Seven Enterprises Corp. as of January 6, 1981
in the amount of $6,008.00 and as of July 9, 1981 in the
amount of $18,517.11.
Clerk H. Stuart Cunningham
(By) Deputy Clerk /s/ Kathleen Branch
Date July 8, 1983
— 44a —
APPENDIX G
Unirep States Court Or APPEALS
For THe Seventa Criecult
Chicago, Illinois 60604
(Submitted May 5, 1982)
Reinstated August 19, 1983
June 21, 1984
Before
Hon. Ricuarp D. Cupany, Circuit Judge
Hon. Jessr E. Escupacn, Circuit Judge
Hon. Grorce Trmpuar, Senior District Judge*
No. 81-2305 & 81-2363
Cotertr Seven ENTERPRISES CORPORATION,
Plaintiff-Appellee-Cross Appellant,
vs.
T.B.& Z. Reattry Anp ManaGEMENT Corporation, and
Lester S. Barritt,
Defendants-Appellants-Cross Appellees,
and
THe Equiraste Lire Assurance Soctety Or Tue UNITep
STATEs,
Defendant-Cross Appellee.
Appeals from the United States District Court for the
Northern District of Illinois, Eastern Division
No. 78-C-238
Hon. THomas R. McMruen, Judge
*The Honorable George Templar, Senior District
Judge of the United States District Court for the District
of Kansas, sitting by designation.
—
ORDER
This case comes back to us after the district court,
pursuant to our Order on Rehearing dated February
11, 1983, made supplemental findings of fact. We will
not reiterate the history of this case (See Order of October
25, 1982), but will address the parties’ legal challenges
in light of these supplemental findings.
We readily affirm the district court’s apportionment
of liability. Based on sufficient evidence, the district
court found that racial considerations partially motivated
T.B.&Z. Realty and Management Corporation (“TB&Z”)
and Lester Barritt to cause the termination of plaintiff’s
business activities at Cockney Pride restaurant. Accord-
ingly, judgment was properly entered against TB&Z and
Lester Barritt for violating 42 U.S.C. §§ 1981, 1982.
The district court found that The Equitable Life Assur-
ance Society of the United States (“Equitable”), on the
other hand, acted without racial motivation. Because
Equitable may not be held vicariously responsible for
the other defendants’ racial motives, see General Building
Contractors Ass’n v. Pennsylvania, 458 U.S. 375 (1982),
the case against Equitable was properly dismissed.
Moreover, we find no error in the amount of damages
awarded. In awarding the plaintiff $6,008.00 in lost
profits, the district court correctly did not deduct fixed
costs that the plaintiff bore whether or not it operated
at Cockney Pride. These costs were not reduced by
the illegal termination and thus did not provide a
“savings” to offset the lost income. See Buono Sales, Inc.
v. Chrysler Motors Corp., 449 F.2d 715, 719-20 (3d Cir.
1971); Rivenbark v. Finis P. Ernest, Inc., 37 Tl. App.
3d 536, 346 N.E.2d 494 (1976). We do not agree with
the plaintiff, however, that the $6,008.00 award must
be increased. Greater compensatory damages would be
unduly speculative, see generally Hannigan v. Sears, Roe-
buck and Co., 410 F.2d 285, 293 (7th Cir. 1969), and this
—_—
is not the type of case that demands a punitive award,
see Smith v. Wade, 103 S. Ct. 1625, 1638-40 (1983).
Finally, we hold that the district court did not abuse
its discretion in awarding the plaintiff $18,517.11 in
attorneys’ fees. The plaintiff succeeded in its only claim
—i.e., damages for the racially motivated termination.
The starting point for calculating fees, therefore, was
the product of the number of hours worked and a rea-
sonable rate of compensation. See Blum v. Stenson, 104
S. Ct. 1541, 1548 (1984). No automatic deduction was
required because the damages awarded were less than
the prayer, see Henseley v. Eckerhart, 103 S. Ct. 1933,
1940-41 n.11 (1983), nor because judgment was not
entered against Equitable, see Mary Beth G. v. Chicago,
723 F.2d 1263, 1281 (7th Cir. 1983). The district court
did exercise its discretion to exclude from the fee calcu-
lus time spent on redundant, excessive, and otherwise
unnecessary matters. See Hensley v. Eckerhart, 103 S.
Ct. 1933, 1940 (1983). The resultant figure was reasonable
and not, as TB&Z and Lester Barritt maintain, dis-
proportionately large in light of the judgment obtained.
See Coop v. South Bend, 635 F.2d 652 (7th Cir. 1980)
($6,000 fee award appropriate notwithstanding recovery
of only $510 in damages).
The judgments of the district court are therefore
affirmed. The plaintiff’s costs on appeal are taxed against
TB&Z and Lester Barritt. Equitable will bear its own
costs.
——— +: ees
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.