Appendix — Riga v. Alexander

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APPENDIX A — OPINION OF THE UNITED STATES

COURT OF APPEALS FOR THE THIRD CIRCUIT

DATED AND FILED MARCH 22, 2000

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Nos. 98-3597 and 98-3622

RONALD ALEXANDER; FAYE ALEXANDER:

FAIR HOUSING PARTNERSHIP OF

GREATER PITTSBURGH, INC..,

Appellants in No. 98-3597

v.

JOSEPH RIGA; MARIA A. RIGA a/k/a Carla Agnotti

RONALD ALEXANDER; FAYE ALEXANDER:

FAIR HOUSING PARTNERSHIP OF

GREATER PITTSBURGH, INC.,

v.

JOSEPH RIGA; MARIA A. RIGA a/k/a Carla Agnotti

JOSEPH RIGA and MARIA A. RIGA,

Appellants in No. 98-3622

Appeal from the United States District Court

for the Western District of Pennsylvania

(D. C. Civ. No. 96-cv-00049)

District Judge: Honorable William L. Standish

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Argued

October 18, 1999

Before: SLOVITER, MANSMANN and ROTH,

Circuit Judges.

(Filed March 22, 2000)

* * *

OPINION OF THE COURT

MANSMANN, Circuit Judge.

The present case arises essentially as an appeal by the

plaintiffs Ronald and Faye Alexander (“the Alexanders’) and

the Fair Housing Partnership of Greater Pittsburgh, Inc. (“the

FHP”) from a judgment entered in the United States District

Court for the Western District of Pennsylvania.’ The

Alexanders and the FHP brought suit against Joseph and

Maria Riga (“the Rigas”), the owners of the building in the

Squirrel Hill neighborhood of Pittsburgh in which the

Alexanders sought to rent an apartment. In their suit, the

Alexanders and the FHP alleged racial discrimination in the

rental of housing pursuant to the Fair Housing Act of 1968,

as amended, 42 U.S.C. § 3601 et seq., and the Civil Rights

Act of 1866, as amended, 42 U.S.C. §§ 1981 and 1982. In

their complaint, the Alexanders and the FHP sought damages,

as well as equitable and injunctive relief.

1. The Rigas, in a cross-appeal, assert that the District Court

erred in denying them summary judgment, in excluding evidence,

and in denying them costs.

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Following an eight-day trial in the District Court, the

jury found, on special verdicts, that Mrs. Riga had violated

the Fair Housing Act when she denied rental housing to the

Alexanders based upon race. Nonetheless, the jury found

Mrs. Riga’s conduct was not “a legal cause of harm” to the

Alexanders and did not award damages. The jury found that

Mrs. Riga’s conduct was “a legal cause of harm” to the FHP,

but, likewise, did not award damages. Thus, the District Court

declined to submit to the jury the issue of punitive damages,

which had been bifurcated from the liability portion of the

case. Following post-trial motions, the District Court entered

judgment in favor of the Rigas (the defendants) and the FHP,

and against the Alexanders, and directed the parties to bear

their own costs.

On appeal, the Alexanders (the plaintiffs), supported by

the NAACP Legal Defense & Educational Fund and the

United States Department of Justice as amici curiae, raise a

host of issues related principally to the jury instructions and

the conduct of the trial. We have jurisdiction to review the

District Court’s final judgment pursuant to 28 U.S.C. § 1291.

Because we find that in a case alleging discrimination

under the Fair Housing Act the discrimination itself is the

harm, we will reverse the decision of the District Court

granting judgment to the Rigas as against the Alexanders

and the decision declining to submit the question of punitive

damages to the jury. We will direct the District Court on

remand to enter judgment for the Alexanders and to hold a

new trial to present to a jury the question of punitive damages,

as against both Mr. and Mrs. Riga.

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Appendix A

I.

From September 17, 1995, through October 8, 1995, on

ten separate occasions, Ronald and/or Faye Alexander, an

African-American couple, inquired about an apartment at

5839 Darlington Road, Squirrel Hill, which had been

advertised in a September 17 newspaper. Joseph and Maria

Riga owned the building, which Mrs. Riga managed. Mrs.

Riga falsely told the Alexanders that the apartment was

unavailable and the Alexanders were denied a view. Their

phone calls to inquire about the apartment were not returned.

Daria Mitchell, an African-American “tester” for the FHP,

was falsely told that the apartment had been rented, and

thereafter, Mrs. Riga refused to return Mitchell’s calls.

In contrast, from September 18 through October 9, 1995,

on ten separate occasions, Mrs. Riga truthfully told Dennis

Orvosh, a white tester for the FHP, and whites Robin

McDonough, Jeff Lang, and Heidi Sestrich, that the

apartment was available, allowed each a view, and returned

their phone calls.

On January 11, 1996, the Alexanders and the FHP filed

this civil action against the Rigas. In their complaint, the

plaintiffs sought damages, as well as equitable and injunctive

relief, for alleged race discrimination. Specifically, the

plaintiffs alleged that the Rigas discriminated against the

individual plaintiffs on the basis of their race in violation of

the Fair Housing Act in connection with the attempts of Mr.

and Mrs. Alexander to view a rental property owned by the

Rigas in Squirrel Hill. The Fair Housing Act prohibits

discrimination in the sale or rental of housing, including the

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refusal to negotiate for the rental of, or otherwise make

unavailable or deny, a dwelling to any person because of

race; to discriminate against any person in the terms,

conditions or privileges of rental of a dwelling because of

race, or to represent to any person because of race that any

dwelling is not available for inspection, sale or rental when

such dwelling is, in fact, available. See 42 U.S.C. §§ 3604(a),

(b) and (d). The plaintiffs sought equitable relief including

an order requiring the posting of fair housing notices and a

cease and desist order prohibiting the Rigas from

discriminating on the basis of race.

Following an eight-day trial in May, 1998, a jury

returned eight special verdicts. The jury found that Mrs. Riga

had discriminated against the Alexanders in violation of the

Fair Housing Act. Nonetheless, the jury found that the

discriminatory conduct of Mrs. Riga was not “a legal cause

of harm” to either Mr. or Mrs. Alexander, and declined to

award them monetary damages.” As to the FHP, the jury

found that the discriminatory conduct of Mrs. Riga was “a

legal cause of harm” to the FHP, however, here, too, the

jury declined to award monetary damages. The issue of

punitive damages had been bifurcated from the issues of

liability and compensatory and/or nominal damages. After

the return of the jury’s special verdicts, the court declined to

submit the issue of punitive damages to the jury. Based on

2. Although both Mr. and Mrs. Riga were defendants at trial,

the special verdicts that were submitted to the jury were limited to

determining Mrs. Riga’s liability for discriminatory conduct. The

District Court concluded, mistakenly, as discussed infra, that only

Mrs. Riga was involved in the events leading to this lawsuit because

Mr. Riga was in Italy at all relevant times.

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the special verdicts, the District Court entered judgment in

favor of the Rigas and against the plaintiffs, together with

costs, on May 26, 1988.

On May 28, 1998, the plaintiffs filed four post-trial

motions: (1) to enter a judgment notwithstanding the verdict,

to issue an additur of nominal damages in the amount of one

dollar for each plaintiff, or to grant a new trial on damages,

or in the alternative, award punitive damages as a matter of

law against both Mr. and Mrs. Riga; (2) for a hearing on

injunctive relief; (3) for attorney’s fees, costs and expenses;

and (4) to grant the plaintiffs judgment as a matter of law.

The Rigas moved to tax costs against the plaintiffs.

On October 13, 1998, the District Court denied the

plaintiffs’ motions except for the FHP’s motion to have

judgment entered in its favor, denied the Rigas’ motion to

tax costs, and entered judgment. The plaintiffs filed a timely

notice of appeal on November 5, 1998. The Rigas also filed

a timely cross-appeal.

On appeal, the plaintiffs put forth several major

contentions. They assert that the District Court should have

entered judgment for them because the jury charges presented

an incorrect legal standard with respect to liability. The

plaintiffs further maintain that the District Court presented

an incorrect legal standard with respect to nominal damages

and erred in refusing to submit the issue of punitive damages

to the jury after the jury found that Mrs. Riga had

discriminated on the basis of race in violation of the Fair

Housing Act but awarded neither compensatory nor nominal

damages. The plaintiffs argue, too, that both Mr. and Mrs.

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Riga should be subjected to punitive damages, because,

although Mr. Riga was out of the country at this time, he

violated a nondelegable duty not to discriminate under the

Fair Housing Act.

Il.

The Fair Housing Act was intended by Congress to have

“broad remedial intent.” Havens Realty v. Coleman, 455 U.S.

363, 380 (1982). As this case stands after trial, the net result

of the plaintiffs’ victory was that they were out-of-pocket

for the expenses of litigation. Historically, enforcement of

the civil rights statutes depends, in large measure, on the

willingness of private plaintiffs to pursue individual cases.

The Supreme Court has attached importance to each

individual’s prosecution of discrimination under the statutes:

the objectives of the [discrimination statutes] are

furthered when even a single [individual]

establishes that [another individual] has

discriminated against him or her. The disclosure

through litigation of incidents and practices

that violate national policies respecting

nondiscrimination . . . is itself important.

McKennon v. Nashville Banner Pub., 513 U.S. 352, 358-59

(1992). And, with respect to the Fair Housing Act in

particular, the Supreme Court has held that

since the enormity of the task of assuring fair

housing makes the role of the [United States]

Attorney General in the matter minimal, the main

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generating force must be private suits in which

... the complainants act not only on their own

behalf but also “as private attorneys general in

vindicating a policy that Congress considered to

be of the highest priority.”

Trafficante v. Metropolitan Life Ins., 409 U.S. 205, 211

(1972).

Ill.

A. The Alleged Errors in the Jury Instructions

The Alexanders argue on appeal that, after the jury’s

verdict that the Fair Housing Act was violated, the District

Court was required to enter judgment in favor of them and

the FHP.’ All plaintiffs allege on appeal primarily two flaws

in the District Court’s jury instructions. The plaintiffs

specifically argue that the District Court erred: (1) in

requiring that the jury find “legal causation” for “harm” as a

prerequisite to finding liability under the Fair Housing Act,

and (2) in requiring that the jury find “insubstantial” actual

damages or “legal harm” as a prerequisite to awarding

nominal damages.

Unfortunately, a party who has not challenged the trial

court’s jury instructions at an appropriate time is deemed to

have waived such a challenge. We have emphasized the need

to raise any objections to jury instructions prior to the time

the jury begins its deliberations:

3. Ultimately, the District Court did grant judgment in the

FHP’s favor, but did not award any damages.

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Under Fed. R. Civ. P. 51, a party, in order to

preserve an objection either to a failure to instruct

the jury on an issue or to the manner in which the

jury was instructed, clearly must “object[ ] thereto

before the jury retires to consider its verdict,

Stating distinctly the matter objected to and the

grounds of the objection.” See also, McAdam v.

Dean Witter Reynolds, 896 F.2d 750, 759 (3d Cir.

1990) (declining to consider newly developed

argument concerning jury charge deficiency

where party “failed to specifically and clearly

object to either the charge or the entry of a

judgment . . . based on this charge”); Waldorf v.

Shuta, 896 F.2d 723, 739-40 (3d Cir. 1990)

(holding that objection, because sufficiently

specific, had preserved error alleged on appeal).

Simmons v. Philadelphia, 947 F.2d 1042, 1078 (3d Cir.

1990), cert. denied, 503 U.S. 985 (1992). Generally, a party

who does not clearly and specifically object to a charge he

believes to be erroneous waives the issue on appeal. /d.

If the party claiming error in the jury instructions did

not make a timely objection, we review for plain error and

we will reverse only if the trial court committed error that

was fundamental and highly prejudicial, such that the

instructions failed to provide the jury with adequate guidance,

and the District Court’s refusal to consider the issue would

result in a miscarriage of justice. Cooper Distrib’g v. Amana

Refrig., 180 F.3d 542, 549-550 (3d Cir. 1999). Fed. R. Civ.

P. 51. We have characterized plain error review in the

absence of a “timely and specific objection,” as “a form of

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’

discretionary review that we have exercised sparingly... .’

Id., see also Bowley v. Stotler, 751 F.2d 641, 652 (3d Cir.

1985); see also United States v. 564.54 Acres of Land, 576

F.2d 983, 987 (3d Cir. 1978) (under plain error doctrine,

court may review jury instruction if error is “fundamental

and highly prejudicial” and failure to consider it “would

result in a miscarriage of justice”), rev'd on other grounds,

441 U.S. 506 (1979).

In short, our discretion to conduct a review under the

plain error doctrine is limited to cases where the error is (1)

fundamental and highly prejudicial or if the instructions are

such that the jury is without adequate guidance on a

fundamental question and (2) our failure to consider the error

would result in a miscarriage of justice. 564.54 Acres of Land

at 576 F.2d at 987-988. Consistent with our belief that this

discretionary power should be exercised sparingly, we will

review the purported deficiencies in the jury instructions to

determine whether they have been properly preserved and

constitute grounds either for reversing the District Court’s

decision or for a new trial. The issue of whether a jury

instruction misstates the proper legal standard is subject to

plenary review. Hopp v. Pittsburgh, 194 F.3d 434, 440 (3d

Cir. 1999).

1. The Alleged Error on Liability

The plaintiffs assert that the District Court’s liability

instruction was inaccurate and misleading and might have

caused the jury not to award any damages despite their

finding of a Fair Housing Act violation. Though the jury

found that Mrs. Riga had discriminated against the

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Alexanders, the jury found that there was no liability. The

Alexanders did not receive a liability verdict because they

were unable to prove “causation.” On the other hand, the

FHP did receive a liability verdict; the jury found that there

was “legal cause” as to the FHP caused by Mrs. Riga’s

discriminatory acts.

This is a statutory form of action. The Fair Housing Act

provides that “[a]n aggrieved person may commence a civil

action in an appropriate United States district court or State

court not later than 2 years after the occurrence or the

termination of an alleged discriminatory housing practice

... to obtain appropriate relief with respect to such

discriminatory housing practice or breach.”* 42 U.S.C.

§ 3613(a)(1)(a). The Fair Housing Act defines

“discriminatory housing practice,” in pertinent part, as

follows:

(a) To refuse to sell or rent after the making

of a bona fide offer, or to refuse to negotiate for

4. The FHP, a fair housing organization, is an “aggrieved

person” under the statute and is entitled to obtain relief, including

punitive damages. See Havens Realty, 455 U.S. at 379 (1982); See

also Growth Horizons v. Delaware County, 983 F.2d 1277, 1281-82

(3rd Cir. 1993); See also Hope, Inc. v. DuPage County, 717 F.2d

1661, 1074 (7th Cir. 1983). On appeal, the Rigas have challenged

the FHP’s standing in this case. We note that the Supreme Court

has held that a fair housing organization had standing to sue if the

discriminatory acts impaired the organization’s ability to carry out

its mission. Havens Realty, 455 U.S. at 378-379. Here, the FHP

staff “stopped everything else” and devoted all attention to this case.

It, moreover, diverted resources to investigate and to counter the

Rigas’ conduct.

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the sale or rental of, or otherwise make

unavailable or deny, a dwelling to any person

because of race, color, religion, sex, familial

status, or national origin.

* * *

(d) To represent to any person because of

race, color, religion, sex, handicap, familial status,

or national origin that any dwelling is not

available for inspection, sale, or rental when such

dwelling is in fact so available.

42 U.S.C. § 3604.° The plain language of the Fair Housing

Act thus permits an individual to obtain relief for the

discriminatory housing practice or breach. A prospective

tenant must prove only that a landlord did one of the unlawful

acts listed in section 3604 with respect to the prospective

tenant’s attempt to obtain housing. If an individual proves

discrimination, he or she need not prove anything else. The

District Court imposed upon the statute another requirement,

“legal causation.” The Rigas argue that the discrimination

is the “legal cause” for the “harm,” which itself must be

proved. To the contrary, the “harm” is the discrimination.

The Alexanders felt themselves to be the victims of

housing discrimination and sued the Rigas under the Fair

Housing Act, both to vindicate their unlawful treatment and

the public interest in fair housing. One “unlawful act” of

several which falls under the ambit of section 3604 is that

5. In conjunction with the Fair Housing Act “Definitions” at

42 U.S.C. § 3602. ;

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the Alexanders were told that the apartment was not

available, when it was. The statute directly focuses on that

situation, seeks to deter it, and seeks to remedy it. At trial,

the Alexanders related what transpired during their housing

search and also described additional adverse consequences,

such as emotional distress, for which they sought

compensatory damages. Although the jury declined to award

compensatory damages for any adverse consequences

flowing from the discrimination, the jury believed that the

Alexanders were indeed victims of illegal discrimination.

We conclude that the District Court misstated the proper

legal standard in this Fair Housing Act case by requiring

“legal causation” beyond a showing of illegal discrimination.

Nonetheless, we find that the plaintiffs did not make a timely

objection to the jury charge on this issue and have so waived

it. The plaintiffs did not object to this requirement of “legal

causation” at the close of the jury instructions. Moreover,

the attorneys for both plaintiffs had previously participated

in a charge conference in which they met with the judge and

agreed upon instructions.

Under a plain error analysis, unquestionably, the

instructions requiring “legal causation” failed to provide the

jury with adequate guidance as to compensatory damages.°

6. The Rigas urge that our holding in Gunby v. Pennsylvania

Elec., 840 F.2d 1108, 1121-1122 (3d Cir. 1988), cert. denied, 492

U.S. 905 (1989) mandates that, to determine liability in a Fair

Housing Act case, a jury find “causation” linked to “actual injury.”

Gunby is inapplicable here. In Gunby, the plaintiff did not present

evidence that he suffered any emotional distress as a result of the

loss of the sought-after job. Thus, we set aside the jury’s award of

(Cont’d)

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See Tyus v. Urban Search Management, 102 F.3d 256, 265

(7th Cir. 1996) (instruction “confusing” where jury charged

that one element of a Fair Housing Act violation is proof

that the discriminatory housing practice caused “actual

injury”), cert. denied, 520 U.S. 1251 (1997). The second

criterion for plain error, however, is that our refusal to

consider the issue would result in a miscarriage of justice.

The plaintiffs have conceded that they did not make a

claim for substantial compensatory damages. Further, we cannot

say, in light of our decision taken as a whole, which should

afford substantial relief to the plaintiffs, see B. The Assignment

of Judgment, infra, that our refusal to consider the issue of

compensatory damages would result in a miscarriage of justice.

2. The Alleged Error on Nominal Damages

The plaintiffs further argue that the jury was improperly

instructed and that the jury committed error when it failed

to return an award of $1 in nominal damages for Mrs. Riga’s

violation of the Fair Housing Act. The plaintiffs allege that

the District Court erred in instructing the jury that an award

of nominal damages requires a finding of “insubstantial”

actual damages, or of “legal harm.”’ Rather, the plaintiffs

(Cont’d)

compensatory damages for emotional distress, holding that emotional

distress cannot be presumed and that speculative damages are not

to be awarded.

7. Notably, plaintiffs did object after the jury charge to the

District Court’s special verdict questions charging that the jury find

“legal harm” and “legal cause” and proposed that the special verdict

ask only whether “harm” was caused. The District Court refused,

stating, “. .. My instructions are clear.”

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contend that nominal damages should be awarded where the

jury has found a federal civil rights violation, particularly

the “fundamental” right to fair housing. Thus, the jury should

have been instructed that it was required to find nominal

damages if it found, as it did, that housing discrimination

had occurred and the jury should have acted in conformity

with that instruction and awarded the plaintiffs these

damages.

The District Court apparently felt that this case involved

“merely” a violation of “purely statutory rights,” and that,

therefore, nominal damages were not required. In our

opinion, this stance trivializes the role of civil rights law in

eradicating discrimination. Racial discrimination, according

to the Supreme Court, is a “fundamental injury to the

individual rights of a person,” Goodman v. Lukens Steel, 482

U.S. 656, 661 (1987), and the inability to buy or lease real

property can be considered one of the badges and incidents

of slavery. See also The Civil Rights Cases, 109 U.S. 3, 22-23

(1883). Indeed, even absent proof of actual injury, nominal

damages are to be awarded to recognize violation of a

constitutional right. Carey v. Piphus, 435 U.S. 247, 266-67

(1978).

This entitlement is not automatic, however, “but rather,

it is incumbent upon the plaintiff to make a timely request

for nominal damages.” Campos-Orrego v. Rivera, 175 F.3d

89 (Ist Cir. 1999). In this instance, the plaintiffs requested

and received an instruction on nominal damages, but failed

to bring to the District Court’s attention their contention that

the jury should have been instructed that nominal damages

are mandatory with a finding of discrimination. The plaintiffs

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neglected to bring this matter to the attention of the trial

judge prior to the time the jury retired to consider its verdict,

much less the specific grounds upon which it was based. In

an attempt to avoid a holding that this failure to object to the

jury instructions waived their right to challenge the jury’s

nominal damages verdict on appeal, the plaintiffs argue that

the District Court’s failure here was plain error.

Without deciding the question, we find that even if the

jury were without adequate guidance on the question of

whether nominal damages are mandatory or discretionary

for violation of a federal statute, failure to rectify this error

under the specific circumstances of this case does not result

in a miscarriage of justice. In the final analysis, given our

holding in this case, the plaintiffs are the prevailing parties,

have the opportunity to recover punitive damages, and might

each only receive $1 less in compensation than that to which

it might be entitled. See 564.4 Acres of Land, 576 F.2d at

988 (failure to rectify error could result in miscarriage of

justice because one party could receive several million

dollars less in compensation than that to which it was

entitled). Thus, we hold that the plaintiffs’ failure to

challenge the jury instruction dealing with nominal damages

waived their right to raise this question on appeal.

B. The Assignment of Judgment

On acrucial and related matter, we find that because the

jury found that the Fair Housing Act was violated, the District

Court was required, as a matter of law, to enter judgment for

both the Alexanders and the FHP. The District Court’s refusal

to enter judgment for the Alexanders constitutes an abuse of

<n ect OE TERIS

I MA or A hw

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discretion, and we will reverse.® Similarly, the District Court

abused its discretion in failing to find that both the

Alexanders and the FHP were “prevailing parties” and

entitled to costs under 42 U.S.C. § 3613(c)(2). See New

Jersey Coalition of Rooming & Boarding House Owners v.

Mayor of Asbury Park, 152 F.3d 217, 225 (3d Cir. 1998)

(the Fair Housing Act’s costs “provision, which sounds fully

discretionary . . . — ‘the court, in its discretion, may allow

the prevailing party . . . areasonable attorney’s fee and costs’

— actually is not. In fact, a district court’s discretion not to

grant attorney’s fees and costs in civil rights cases is tightly

cabined.”) We therefore hold that both the Alexanders and

the FHP were prevailing parties and will direct the District

Court to award them attorneys’ fees and costs on remand.

C. Punitive Damages

1. Conduct Calling for Punitive Damages

In this case, the District Court declined to send the issue

of punitive damages to the jury. One main reason for this

appears to have been that because the jury awarded no actual

8. Without deciding the waiver issue as to declaratory relief

for the Alexanders, on this one point regarding final judgment, we

are satisfied that even were there a waiver, the matter would be one

of plain error. Entering judgment for the party found by the jury to

have violated the Fair Housing Act, rather than for the victims who

had been discriminated against, is a paradigmatic “miscarriage of

justice.” And, further, this improper assignment of judgment led to

sequelae which are anathema to public policy, such as denial of

costs to the victims for successfully proving a Fair Housing Act

violation.

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damages to either plaintiff, the District Court concluded that

Mrs. Riga was not liable to the Alexanders. Because so much

of the Rigas’ brief was devoted to this issue, though later

they conceded the point, it bears mentioning that beyond a

doubt, punitive damages can be awarded in a civil rights

case where a jury finds a constitutional violation, even when

the jury has not awarded compensatory or nominal damages.

See Curtis v. Loether, 415 U.S. 189 (1974) (punitive damages

appropriate for Title VIII violation without award for actual

loss, remanding for jury trial on punitive damages amount),

see also Basista v. Weir, 340 F.2d 74, 87 (3d Cir. 1965)

(punitive damages appropriate in section 1983 case absent

award of compensatory damages).

We have sufficiently resolved this matter in our

foregoing discussion on the jury charge regarding liability,

and in our conclusion that a Fair Housing Act violation is

all that is needed to establish liability. Another reason the

District Court declined to send the issue of punitive damages

to the jury is that the District Court concluded that the jury

apparently did not believe Mrs. Riga’s conduct to have

resulted from the type of evil motive thought necessary to

award punitive damages. We will address this second point.

Whether there is sufficient evidence to support a punitive

damages award is a question of law which we review

de novo. Delli Santi v. CNA Ins., 88 F.3d 192, 207 (3d Cir.

1996), Bonjorno v. Kaiser Aluminum & Chem., 752 F.2d

802, 814-15 (3d Cir. 1984), cert. denied, 477 U.S. 908 (1986).

Here, there is a specific damages provision in the plain

language of the statute. 42 U.S.C. § 3613(c) provides the

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relief which may be granted, when, as here, private

individuals seek to enforce the Fair Housing Act:

(1) In a civil action under subsection (a) of this

section, if the court finds that a discriminatory

housing practice has occurred . . . , the court may

award to the plaintiff actual and punitive damages,

and ... may grant as relief, as the court deems

appropriate, any permanent or temporary

injunction, temporary restraining order, or other

order (including an order enjoining the defendant

from engaging in such practice or ordering such

affirmative action as may be appropriate).

(2) In a civil action under subsection (a) of this

section, the court, in its discretion, may allow the

prevailing party, other than the United States, a

reasonable attorney’s fee and costs.

* * *

The District Court has the duty to “give effect, if possible,

to every clause and word of [the] statute.” Bennett v. Spear,

520 U.S. 54 (1997).

The standard for punitive damages in a federal civil

rights action was set by the Supreme Court, and does not

require “outrageousness”: a jury may “assess punitive

damages in [a civil rights action] when the defendant’s

conduct is shown to be motivated by evil motive or intent,

or when it involves reckless or callous indifference to the

federally protected rights of others.” Smith v. Wade, 461 U.S.

30, 56 (1983).

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In denying the Alexanders’ request to submit the punitive

damages issue to the jury, the District Court found that

punitive damages were precluded because the jury’s refusal

to award damages showed that the jury, in the District Court’s

words, “did not consider the conduct of Mrs. Riga to have

been the result of an evil motive or intent or to have involved

reckless or callous indifference to the federally protected

rights of others.” In the District Court’s view, it thus “would

be inappropriate to permit the jury to award punitive damages

to them.” The District Court also held that more than

intentional discrimination is required for the jury to enter

punitive damages — that “outrageous conduct on the part of

Mrs. Riga beyond that which may attach to any finding of

intentional discrimination” was required.

“Malice” and “reckless indifference,” in this context,

however, refer not to the egregiousness of the landlord’s

conduct, but rather to the landlord’s knowledge that it may

be acting in violation of federal law. See Kolstad v. American

Dental Association, 527 U.S. 526, _, 119 S.Ct. 2118, 2124

(1999). In Kolstad, a female employee sued her employer

under Title VII, asserting that the employer’s decision to

promote a male employee over her was a proscribed act of

gender discrimination. The District Court denied the

employee’s request for a jury instruction on punitive

damages. The Court of Appeals affirmed, holding that, before

the jury can be instructed on punitive damages, the evidence

must demonstrate that the defendant has engaged in some

“egregious” misconduct; under the facts of that case, the

female employee had failed to make the requisite showing.

The Supreme Court vacated the earlier decision and

remanded. In so doing, the Supreme Court explicitly rejected

Ve ee

2la

Appendix A

the conclusion that “eligibility for punitive damages can only

be described in terms of [a defendant’s] ‘egregious’

misconduct.” Rather, the Supreme Court held that “[t]he

terms ‘malice’ and ‘reckless’ ultimately focus on the actor’s

state of mind,” making a showing of egregious or outrageous

discrimination unnecessary. Jd. Applied to the case before

us, we hold that because the jury’s finding of a violation

under the Fair Housing Act necessarily encompasses a

finding of intentional discrimination, the plaintiffs need not

also demonstrate that the conduct was particularly egregious

or malicious in order to obtain punitive damages.

Indeed, recklessness and malice may be inferred when a

manager responsible for showing and renting apartments

repeatedly refuses to deal with African-Americans about the

apartment, and misrepresents the apartment’s availability.

See Miller v. Apartments & Homes, 646 F.2d 101 (3d Cir.

1981) (punitive damages appropriate where defendant acts

with reckless disregard as to whether he is violating a

federally protected right, or consciously and deliberately

disregards consequences of actions), see also Woods-Drake

v. Lundy, 667 F.2d 1198 (Sth Cir. 1982) (“wilful and gross”

violation of the Fair Housing Act supported punitive damages

where landlord evicted tenants for having African-American

guests; on remand, trial court directed to assess punitive

damages).

In the case before us, the jury returned special verdicts

finding the rights of the Alexanders and the FHP testers under

the Fair Housing Act to have been violated. The Alexanders

and the FHP presented evidence that Mrs. Riga persistently

refused to deal with African-Americans, as opposed to

22a

Appendix A

whites, and represented that an apartment was not available

for inspection or rental, when it was. The Alexanders

described in saddening detail the deceptions to which they

were subjected, and the consequent mortification they

suffered. Mrs. Riga told them that “they had just missed”

the apartment listed in an advertisement on Sunday, the day

before. When the same advertisement appeared the following

Sunday, Mr. Alexander asked a friend to call. The friend

was told that the apartment was available. Using a different

name, Mr. Alexander arranged to see the apartment and called

twice to confirm the appointment. When he met Mrs. Riga

at the building, she falsely stated that she had forgotten her

keys, and could not show him the apartment, as her hand

covered up her keys. Mr. Alexander “couldn’t believe it, it

made him angry,” he thought she was lying. When he asked

to reschedule, Mrs. Riga said that he could call her. He was

feeling “a little bit too sick to say anything else ....” He

walked away, then turned and saw her entering the building.

He called to reschedule and left messages, but did not receive

a responding telephone call from Mrs. Riga. After this, Mr.

Alexander sought the assistance of the FHP, which directed

testers to seek the apartment. In short, the white testers were

granted access while the A frican-Americans testers were denied

access. Mr. Alexander continued to try to contact Mrs. Riga

and also had friends call. To one friend he remarked that he felt

“hurt and discouraged, it is sort of degrading, it discourages

you from trying .. . to find a place for your family to live, it is

just sickening, I really can’t describe it. It is terrible... .”

The Supreme Court in Kolstad did observe that the mere

existence of a civil rights violation is not a guarantee of

eligibility for punitive damages because a defendant might

23a

Appendix A

not be aware of the federal law he or she violated or he or

she might have honestly believed that the discrimination was

permissible. Kolstad, 119 S. Ct. at 2125. These exceptions,

however, do not apply to the Rigas in this case. Here, there

is not any suggestion that Mrs. Riga did not know that it

was illegal, and had been for thirty years, to discriminate on

the basis of race in housing. The jury concluded that Mrs.

Riga refused to deal with African-Americans with respect

to the apartment building and was motivated by race. The

plaintiffs have adduced sufficient evidence to demonstrate

“reckless or callous indifference” to federally protected rights

and to permit the jury to award punitive damages.

2. Mr. Riga’s Liability for Punitive Damages

Although both Mr. and Mrs. Riga were defendants at

trial, the special verdicts that were submitted to the jury were

limited to determining Mrs. Riga’s liability for

discriminatory conduct. The District Court concluded that

only Mrs. Riga was involved in the events leading to this

lawsuit because Mr. Riga was in Italy at all relevant times.

The Rigas assert that excluding Mr. Riga from the punitive

damages discussion was appropriate because he neither had

the requisite personal involvement nor did he acquiesce in

Mrs. Riga’s discriminatory conduct. The plaintiffs argue that

both Mr. and Mrs. Riga should be subject to punitive

damages, because, though Mr. Riga was out of the country

at the relevant time, he violated a nondelegable duty not to

discriminate under the Fair Housing Act.

Of course, a principal is directly liable where he himself

commits, authorizes, or ratifies discriminatory treatment, see

Miller, 646 F.2d at 111 ($25,000 punitive damages award

re

24a

Appendix A

against principal for agent’s action, where principal was

involved in wrongdoing or authorized, ratified, or fostered

agent’s discriminatory acts); see also Asbury v. Brougham,

866 F.2d 1276 (10th Cir. 1989) (owner of management

company and agent who refused to rent both liable; punitive

damages against owner sustained). We now must decide, as

a matter of first impression, whether a principal is vicariously

liable for punitive damages for violations of the Fair Housing

Act by the discriminatory acts of his managerial agent.

The Rigas contend that Mrs. Riga’s conduct cannot be

attributed to Mr. Riga. They are mistaken. Mr. Riga could

not insulate himself from liability for discrimination in regard

to an apartment building owned jointly by him and his wife

and managed for their joint benefit, merely by relinquishing

the responsibility for preventing discrimination to Mrs. Riga,

his managerial agent. To effectuate the Fair Housing Act’s

mandate, both Mr. and Mrs. Riga are held responsible for

Mrs. Riga’s discriminatory practices. Here we adopt the

general rule applied by other federal courts that the duty of

a landlord under the Fair Housing Act not to discriminate in

the leasing of property may not be delegated to the landlord’s

employee. Civil Rights Act of 1968, § 801 et seq., 42 U.S.C.

§ 3601 et seq. See Walker v. Crigler, 976 F.2d 900, 904 &

n. 5 (4th Cir. 1992) (“the duty of a property owner not to

discriminate in the leasing or sale of that property is

non-delegable”), see also Marr v. Rife, 503 F.2d 735, 741

(6th Cir. 1974) (“The discriminatory conduct of an apartment

manager or rental agent is, as a general rule, attributable to

the owner and property manager of the apartment complex,

both under the doctrine of respondeat superior and because

the duty to obey the law is non-delegable.”), Coates v.

PO Eee a eRe on ee Pew nt tea ee

25a

‘. Appendix A

Bechtel, 811 F.2d 1045, 1051 (7th Cir. 1987); Phiffer v.

Proud Parrot Motor Hotel, 648 F.2d 548, 552 (9th Cir. 1980);

Saunders v. General Services, 659 F.Supp. 1042, 1059

(E.D.Va. 1987) (“Under the Fair Housing Act, a corporation

and its officers ‘are responsible for the acts of a subordinate

employee . . . even though these acts were neither directed

nor authorized ....’ Courts have followed this rule even

where ‘it seems harsh to punish innocent and well-intentioned

employers’ because the statutory duty not to discriminate is

non-delegable”) (citations omitted).

On policy grounds, in Kolstad the Supreme Court

arguably modified one aspect of this general rule, which

could produce the harsh result that even a landlord who had

made every effort to prevent discrimination could

nevertheless be subject to punitive damages. Kolstad, 119

S. Ct. at 2128. Cf Walker, 976 F.2d at 904-905 (property

owner liable for the conduct of employees despite

instructions to them not to discriminate). Recognizing civil

rights law as an effort to promote prevention as well as

remediation and observing the principles underlying the

Restatement’s limits on vicarious liability for punitive

damages,’ the Supreme Court held that, “in the punitive

9. The Restatement (Second) of Agency, among other things,

authorizes punitive damages “against a... principal because of an

[agent’s] act... if... the agent was employed in a managerial

capacity and was acting in the scope of employment,” and affirms

that even intentional, specifically forbidden torts are within this

scope if the conduct is “the kind [the employee] is employed to

perform,” “occurs substantially within the authorized time and space

limits,” and “is actuated, at least in part, by a purpose to serve” the

employer. Restatement (Second) of Agency §§ 217 C(c), 228(1),

230, cmt. b. (1958).

26a

Appendix A

damages context, an employer could not be vicariously liable

for the discriminatory employment decisions of managerial

agents where these decisions are contrary to the employer’s

‘good-faith efforts to comply with [civil rights laws].’ ”

Kolstad, 119 S.Ct. at 2118, 2121, 2128. The Supreme Court

continued that “[g]living punitive damages protection to

employers who make good-faith efforts to prevent

discrimination ... accomplishes [the civil rights laws’ |

objective of ‘motivat[ing] employers to detect and deter [civil

rights] violations.’ ” Jd. (internal citations omitted).

We conclud2, therefore, that the issue of Mr. Riga’s

liability should 5e submitted to the jury. While Mr. Riga

may have been abroad at the time of the suit, he apparently

left Mrs. Riga in charge of the apartment building with

authority to act on behalf of the two of them as a couple. At

this juncture, we do not know if Mr. Riga made “good faith

efforts to prevert discrimination,” defined to an extent by

the Supreme Court as efforts to “deter and detect [civil rights]

violations” and to “enforce an anti-discrimination policy.”

Id. at 2129-2130. We leave to the jury on remand to determine

whether Mr. Riga engaged in active anti-discrimination

efforts sufficient to protect him from the impact of the general

rule that he may not delegate to Mrs. Riga the duty not to

discriminate.

D. Injunctive Relief

On appeal, the plaintiffs also argue that because the jury

returned special verdicts finding that Mrs. Riga had violated

the Fair Housing Act through a continuing course of refusal

to deal with African-Americans, the District Court should

27a

Appendix A

have granted injunctive relief, not only to safeguard the rights

of these plaintiffs, but also on a policy level to safeguard

free access to housing. The District Court denied the

plaintiffs’ request to present evidence on the need for

injunctive relief, asserting that the plaintiffs had waived the

request, because, although it had been a significant portion

of the complaint and pretrial statement, the plaintiffs had

not repeated the request until six days after the jury trial.

The District Court also found that even had the plaintiffs

not waived the request, there was no need for injunctive relief

because there was not any evidence of a continuing or

recurrent violation.

The Rigas suggest that the plaintiffs sought injunctive

relief primarily to allow them to recover their attorneys’ fees,

but stated the issue as, “whether [within the court’s

discretion] declaratory and injunctive relief is necessary.”

Of course, the Rigas assert that this Court should defer to

the District Court’s judgment that it was unnecessary;

evidence had been presented that the Rigas had rented

apartments to African-Americans since the events of the

Alexanders’ lawsuit. Were we to examine the issue of

injunctive relief on the merits, we would accord the District

Court substantial deference on this matter, under the

applicable abuse of discretion standard. Marco v. Accent

Publ’g, 969 F.2d 1547, 1548 (3d Cir. 1992) (denial of

injunctive relief reviewed for abuse of discretion, which

occurs if the District Court’s decision rests on a clearly

erroneous finding of fact, an error of law, or a misapplication

of law to the facts). This deference is not absolute, however,

and we would need to be mindful that deterrence and

prevention of future discrimination, one of the central

28a

Appendix A

purposes of the civil rights statutes, McKennon, 513 U.S. at

358, might require the entry of injunctive relief. We are

troubled to an extent by the District Court’s rationale, which

might permit the Rigas and other civil rights defendants to

discriminate and stop when caught, in enough time to

“obviate” the need for a court to issue injunctive relief.

Regardless of the interesting nature of this issue,

however, we will hold, as did the District Court, that the

issue has been waived. Here, six days elapsed from the time

the jury’s verdicts were returned and the jury was discharged,

until the plaintiffs requested a hearing on injunctive relief.

Though the District Court conceded that the plaintiffs had

requested this relief in their complaint and pretrial statements,

“at no time during the pretrial conferences with the court, or

during the trial itself, did plaintiffs’ attorneys refer to their

requests for injunctive and equitable relief.” We agree with

the District Court that the issue is waived by the failure of

counsel to raise the issue of injunctive relief prior to the

conclusion of trial. In addition, through the remand we direct

in this opinion, we are satisfied that, to some extent, the

policy goal of deterring future discrimination will be effected.

E. Evidentiary Matters

In light of our decision, the remainder of the issues raised

by both parties are either mooted or left to reconsideration

on the limited remand we now grant. We comment here only

briefly on two remaining evidentiary matters: (1) the

plaintiffs’ claim that the District Court abused its discretion

by excluding evidence of the Rigas’ discrimination against

other African-Americans, and (2) the Rigas’ claim on

29a

Appendix A

cross-appeal that the District Court abused its discretion by

excluding evidence of the Alexanders’ lack of

creditworthiness and lack of credibility. We find that in

neither instance did the District Court abuse its discretion.

The plaintiffs maintain that the District Court erred in

excluding probative evidence of the Rigas’ ongoing pattern

of discrimination in the form of an eyewitness, Steven

Denson, who allegedly observed Mrs. Riga discriminating

against other African-American applicants. The plaintiffs

state that the witness’ address was only discovered during

the trial, because the Rigas’ counsel had refused to supply it

upon request. Further, the plaintiffs assert that were this

evidence permitted, the Rigas would suffer no surprise or

prejudice, inasmuch as their counsel had interviewed the

witness previously.

For their part, the Rigas dispute that they acted

improperly with respect to this witness. The evidence’s

relevance was tenuous — he might not even have been at

;the Darlington building. The District Court reasonably

concluded that the probative value of the testimony was

outweighed by its prejudicial impact.

Similarly, properly excluded was the evidence the Ri gas

proffered that the Alexanders were not creditworthy. Though

the Rigas maintain that the Alexanders had to show that they

were fully qualified to rent the apartment ultimately, the

Alexanders only needed to show that they were qualified to

be applicants, to view the apartment, and be treated no

differently from other applicants. If this case were about the

Alexanders’ unsuccessful apartment application and they

30a

Appendix A

could make a prima facie showing of discrimination, then

the evidence of creditworthiness would indeed be relevant.

Under the facts with which we are presented, however, the

evidence was not relevant, and the District Court properly

excluded it. Finally, the Rigas claim that they should have

been permitted to offer evidence of the Alexanders’

untruthful statements on documents such as employment

applications. The Rigas obviously sought to introduce this

evidence te show conformity therewith. The District Court

properly excluded this too, because it was evidence of other

bad acts not admissible to prove the Alexanders’ character

under Fed. R. Evid. 404 and not within the exceptions

outlined in Fed. R. Evid. 404(b).

IV.

We will reverse the decision of the District Court

granting judgment to the Rigas as against the Alexanders

and the decision declining to submit the question of punitive

damages to the jury. We direct the District Court to enter

judgment for the Alexanders, and for other declaratory relief

consistent with our opinion, as well as costs, including

reasonable attorney’s fees, to the Alexanders and the FHP

and to remand the case for a new trial solely to present to a

jury the question of punitive damages as against both Mr.

and Mrs. Riga.

A True Copy:

Teste:

Clerk of the United States Court of

Appeals for the Third Circuit

'

4

3

i

.

3la

APPENDIX B — MEMORANDUM AND ORDER OF

THE UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF PENNSYLVANIA

DATED OCTOBER 9, 1998

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

Civil Action No. 96-49

RONALD ALEXANDER, FAYE ALEXANDER

and the FAIR HOUSING PARTNERSHIP

OF GREATER PITTSBURGH, INC..,

Plaintiffs,

VS.

JOSEPH RIGA and MARIA A. RIGA,

a/k/a CARLA AGNOTTI,

Defendants

MEMORANDUM

|

Before the court are the following post-trial motions filed

by the parties in this action brought pursuant to the Fair

Housing Act (FHA), Title VIII of the Civil Rights Act of

1968, 42 U.S.C. § 3601 et seq.:!

1. Before the commencement of trial, plaintiffs abandoned the

claims they had asserted against defendants under Sections 1981 and

1982 of the Civil Rights Act of 1866, 42 U.S.C. §§ 1981 and 1982.

32a

Appendix B

1. Plaintiffs’ Motion for Judgment Notwithstanding the

Verdict or for a New Trial on Damages (Document No. 82);

2. Plaintiffs’ Motion for Hearing on Injunctive and

Equitable Relief (Document No. 83);

3. Plaintiffs’ Motion for Award of Attorneys’ Fees,

Costs and Expenses in their Favor as Prevailing Parties

(Document No. 84);

4. Plaintiffs’ Motion to Tax Costs against Defendants

(Document No. 85);

5. Plaintiffs’ Rule 60 Motion Nunc Pro Tunc to Correct

Error in Judgment and for Rule 59(e) Relief Nunc Pro Tunc

from Judgment (Document No. 96); and

6. Defendants’ Motion to Tax Costs Against Plaintiffs

(Document No. 87).

After consideration, and for the reasons set forth below,

the motions will be denied, with the exception of plaintiffs’

Rule 60 Motion Nunc Pro Tunc to Correct Error in Judgment

and for Rule 59(e) Relief Nunc Pro Tunc from Judgment,

which will be granted in part and denied in part.

II

The procedural history of this case may be summarized

as follows:

On January 11, 1996, plaintiffs, Ronald Alexander, Faye

Alexander and the Fair Housing Partnership of Greater

33a

Appendix B

Pittsburgh, Inc. (FHP), filed this civil action against

defendants, Joseph Riga and Maria A. Riga. In their

complaint, plaintiffs sought damages, as well as equitable

and injunctive relief, for alleged race discrimination.

Specifically, plaintiffs alleged that defendants discriminated

against the individual plaintiffs on the basis of their race in

violation of the FHA in connection with the attempts of Mr.

and Mrs. Alexander to view a rental property owned by

defendants in the Squirrel Hill section of the City of

Pittsburgh.’

Following an eight-day trial in May, 1998, a jury

returned eight special verdicts. With respect to Mr. and Mrs.

Alexander, the jury found that Mrs. Riga had discriminated

against them in violation of the FHA. However, the jury

found that the discriminatory conduct of Mrs. Riga was not

a legal cause of harm to either Mr. or Mrs. Alexander, and

awarded them no monetary damages.’ As to the FHP, the

2. The FHA prohibits discrimination in the sale or rental of

housing, including the refusal to negotiate for the rental of, or

otherwise make unavailable or deny, a dwelling to any person

because of race; to discriminate against any person in the terms,

conditions or privileges of rental of a dwelling because of race; or

to represent to any person because of race that any dwelling is not

available for inspection, sale or rental when such dwelling is, in

fact, so available. See 42 U.S.C. §§ 3604(a), (b) and (d).

3. Although both Mr. and Mrs. Riga were defendants at trial,

the special verdicts that were submitted to the jury were limited to

determining the liability of Mrs. Riga for discriminatory conduct

because only Mrs. Riga was involved in the events leading to this

lawsuit. Mr. Riga was in Italy at all relevant times. However, under

(Cont'd)

34a

Appendix B

jury found that the discriminatory conduct of Mrs. Riga was

a legal cause of harm to the FHP. However, the jury awarded

no monetary damages to the FHP.* Based on the special

verdicts, the court entered judgment in favor of defendants

and against plaintiffs, together with costs, on May 26, 1988.

IT]

The court will discuss the parties’ post-trial motions

sequentially.

A. Plaintiffs’ Motion for Judgment Notwithstanding the

Verdict or for a New Trial on Damages

In this motion, plaintiffs assert that a judgment

notwithstanding the verdict,° as well as the additur of nominal

damages in the amount of one dollar for each plaintiff, is

required based on evidence that each plaintiff sustained actual

(Cont’d)

the law of agency, as well as the fact that the duties imposed by the

FHA are non-delegable, Mr. Riga would be liable for any

compensatory or nominal damages resulting from his wife’s

discriminatory conduct in connection with the rental of their jointly

owned apartments.

4. The issue of punitive damages had been bifurcated from the

issues of liability and compensatory or nominal damages. After the

return of the jury’s special verdicts, the court declined to put the

issue of punitive damages to the jury.

5. As noted by defendants, plaintiffs should have filed this

motion under Rule 50(b) of the Federal Rules of Civil Procedure,

seeking a judgment in their favor as a matter of law.

een wns

35a

Appendix B

harm. In the alternative, plaintiffs assert that a new trial on

damages is required because (1) the court erred in refusing

to instruct the jury that an award of nominal damages in favor

of each plaintiff was required based on the evidence; (2) the

court erred in refusing to charge the jury on the issue of

punitive damages, despite the jury’s failure to award

compensatory damages; (3) the court erred in refusing to

instruct the jury that an award of compensatory and

exemplary damages in favor of the FHP was required based

on the evidence; and (4) the court erred in refusing to admit

the testimony of Steve Denson, Michael Bowen and Michael

Snow regarding other alleged acts of intentional race

discrimination by Mrs. Riga against black applicants for

apartments.

1. Turning first to the issue of nominal damages, during

the charge conference on May 21, 1998, Caroline Mitchell,

Esquire, one of plaintiffs’ co-counsel, requested the inclusion

of a charge on nominal damages in the court’s instructions

to the jury. The request was granted, and the court included

an instruction on nominal damages in its proposed charge,

which was provided to counsel in its entirety prior to the

time the jury was charged.

The jury was instructed, in relevant part, as follows:

* * *

... Finally, in connection with the issue of

damages, if you find that the plaintiffs are entitled

to verdicts in their favor in accordance with these

instructions, but you do not find that the plaintiffs

36a

Appendix B

have sustained substantial actual damages, then

you may return a verdict for the plaintiffs in some

nominal sum, such as one dollar on account of

actual damages. ...

Neither Ms. Mitchell nor her co-counsel, Timothy P.

O’Brien, Esquire, objected to the form of the charge on

nominal damages before or after it was given to the jury,

despite the fact that the charge permitted, but did not require,

the jury to award nominal damages if the jury found that

plaintiffs did not sustain substantial actual damages. The first

time the language of the charge on nominal damages was

challenged by plaintiffs was in a post-trial motion, after the

jury had been discharged.

Plaintiffs argue that the holding of the Supreme Court

of the United States in Carey v. Piphus, 435 U.S. 247, 98

S.Ct. 1042, 55 L.Ed.2d 252 (1978), requires an award of

nominal damages when a fact finder determines that a

violation of an “absolute right,” such as the right to be free

from race discrimination, has occurred without proof of

actual injury. In response to this argument, defendants take

the position that the “absolute right” referred to in Carey, a

denial of procedural due process, was “absolute” because

the denial was a constitutional tort in violation of 42 U.S.C.

§ 1983, and that the violation of a statutory right, such as a

violation of the FHA, is not a violation of an “absolute right,”

entitling the victim to nominal damages in the absence of

proof of injury.

37a

Appendix B

In support of their position, defendants cite Walker vy.

Anderson Elec. Connection, 944 F.2d 841 (8th Cir.), cert.

denied, 506 U.S. 1078, 113 S.Ct. 1043, 122 L.Ed.2d 352

(1998), a case involving sexual harassment in violation of

Title VII of the Civil Rights Act of 1964 (Title VII), 42

U.S.C. § 2000(e) et seg., in which the United States Court

of Appeals for the Eighth Circuit stated:

* * *

Walker argues that Carey v. Piphus, 435 U.S.

247, 98 S.Ct. 1042, 55 L.Ed.2d 252 (1978),

requires the automatic award of nominal damages

upon the finding of a Title VII violation regardless

of Rule 51 and the federal Courts’ dislike of

additur. Carey does not, however, address the

issue of nominal damages in a Title VII action.

Carey involved interpretation of 42 U.S.C.

§ 1983, (footnote omitted) which provides a

remedy for violations of constitutional rights by

persons acting under color of state law.

Emphasizing the absolute nature of constitutional

rights and “the importance to organized society

that those rights be scrupulously observed,”

Carey, 435 U.S. at 266, 98 S.Ct. at 1053, the Court

mandated the award of nominal damages upon the

finding of a procedural due process violation even

where no actual injury had been shown. By

contrast, this case involves, not a violation of

constitutional rights, but merely, a violation of

purely statutory rights under Title VII. Nothing

38a

Appendix B

in Carey mandates the award of nominal damages

for statutory violations. (footnote omitted).

* * *

944 F.2d at 845.

After consideration, the court believes that the distinction

made by the Eighth Circuit in Walker concerning statutory

violations as opposed to violations of “absolute rights”

confirmed by the Constitution is a valid one, and that the

violation of the Alexanders’ rights under the FHA did not

mandate an award of nominal damages in favor of them or

the FHP.°

6. In connection with plaintiffs’ motion for the additur of one

dollar in nominal damages for each plaintiff, on September 21, 1998,

plaintiffs’ co-counsel, Mr. O’Brien, sent a letter to the court to bring

to the court’s attention the decision of the United States Court of

Appeals for the Second Circuit in Gibeau v. Nellis, 18 F.3d 107 (2d

Cir.1994). In Gibeau, a criminal contemnor, who was incarcerated,

brought a Section 1983 action against a jail officer, alleging

excessive use of force. The district court entered judgment on the

jury verdict, finding that the officer had used excessive force, but

awarding no damages. On appeal, the Second Circuit held, inter

alia, that the district court should have instructed the jury that it

was required to award nominal damages if it found that the plaintiff's

Eighth Amendment rights were violated. The Second Circuit then

remanded the case to the district court for the entry of nominal

damages in favor of the plaintiff, concluding that such action would

not impermissibly invade the province of the jury because nominal

damages were mandatory under the circumstances of that case.

Defense counsel, Thomas M. Hardiman, Esquire, responded to

Mr. O’Brien’s letter on September 24, 1998, noting that the decision

(Cont’d)

Noten oebieat

39a

Appendix B

In any event, it appears to the court that plaintiffs have

waived their right to assert a post-trial claim of error based

on the form of the nominal damage charge given to the jury

by failing to object to the charge, as written, either before or

after the charge was given to the jury. When a party fails to

make a timely objection to a jury instruction, the objection

is waived and the instruction is reviewed only for “plain

error.”

In Osei-Afriyie v. Medical College of Pennsylvania, 937

F.2d 876 (3d Cir.1991), the United States Court of Appeals

for the Third Circuit addressed the issue of plain error,

stating:

_Plain errors are those errors that “seriously

affect the fairness, integrity or public reputation

of judicial proceedings.” United States v.

Atkinson, 297 U.S. 157, 160, 56 S.Ct. 391, 392,

80 L.Ed.2d 555 (1936). They are errors that

“undermine the fundamental fairness of the trial

(Cont'd)

of the Second Circuit in Gibeau is inapposite because the case

involved a claim under Section 1983 for the violation of a

constitutional right by a state actor, not a statutory claim against a

private citizen. Based on the court’s conclusion that the distinction

made by the Eighth Circuit in Walker concerning statutory violations

as opposed to violations of “absolute rights” under the Constitution

is a valid one, the decision of the Second Circuit in Gibeau does not

alter the court’s conclusion that an award of nominal damages is

not mandated in this case.

40a

Appendix B

and contribute to a miscarriage of justice.” United

States v. Young, 470 U.S. 1, 16, 105 S.Ct. 1038,

1047, 84 L.Ed.2d 1 (1985). The Supreme Court

has cautioned that the doctrine is to be used

“sparingly,” United States v. Frady, 456 U.S. 152,

163 n. 14, 102 S.Ct. 1584, 1592 n. 14, 71 L.Ed.2d

816 (1982), and only where the error was sure to

have had “an unfair prejudicial impact on the

jury’s deliberations,” Young, 470 U.S. at 16

n. 14, 105 S.Ct. at 1047 n. 14.

* * *

937 F.2d at 881-882.

Applying this standard in the present case, the court simply

cannot conclude that the nominal damage charge given to

the jury “underminejd] the fundamental fairness of the trial

and contribute[d] to a miscarriage of justice,” or that the

charge had “an unfair prejudicial impact on the jury’s

deliberations.” Therefore, the court declines to grant

plaintiffs’ request for judgment notwithstanding the verdict

or for the additur of one dollar in nominal damages for each

plaintiff.

2. As to the issue of punitive damages, such damages

may be awarded for violations of federal law when a

defendant’s conduct is “motivated by evil motive or intent,

or when it involves reckless or callous indifference to the

federally protected rights of others.” Samaritan Inns, Inc. v.

District of Columbia, 114 F.3d 1227, 1239 (D.C.Cir.1997),

quoting, Smith v. Wade, 461 U.S. 30, 56, 103 S.Ct. 1625,

4la

Appendix B

1640, 75 L.Ed.2d 632 (1982). As noted in footnote 4, the

issue of punitive damages was bifurcated and was not

submitted to the jury with the issues of liability and

compensatory or nominal damages. After the jury returned

its verdicts awarding neither compensatory nor nominal

damages to aiy plaintiff, the court declined to submit to the

jury the issue of punitive damages and the jury was discharged.

The court believed, and continues to believe, that, by its

refusal to award compensatory or nominal damages, the jury

did not consider the conduct of Mrs. Riga to have been the

result of an evil motive or intent or to have involved reckless

or callous indifference to the federally protected rights of

plaintiffs. Moreover, as to Mr. and Mrs. Alexander, the jury

found that Mrs. Riga’s conduct was not a legal cause of harm

to them. After the jury verdicts were returned, the court

concluded that, because the jury had found that Mrs. Riga’s

discrimination did not cause harm to the Alexanders, it would

be inappropriate to permit the jury to award punitive damages

to them.

The court agrees with defendants that, in order to recover

punitive damages, the Alexanders should be required to prove

more than intentional discrimination by Mrs. Riga.

Otherwise, punitive damages would follow as a matter of

course in every case in which intentional discrimination were

established, contrary to the general principle that punitive

damages “represent a limited remedy, to be reserved for

special circumstances.” Savarese v. Agriss, 883 F.2d 1194,

1205 (3d Cir.1989). (Defendants’ Response to Plaintiffs’

Motion for Judgment Notwithstanding the Verdict or for a

New Trial on Damages, p. 12).

42a

~ Appendix B

According to the court’s recollection of the trial

testimony and the court’s trial notes, Mrs. Alexander testified

that Mrs. Riga’s conduct did not cause her to cry, to become

ill, to suffer any emotional distress or to seek medical or

psychological care, and Mr. Alexander testified that,

although he suffered emotional distress as a result of Mrs.

Riga’s conduct, he sought no medical attention or

psychological counseling. Based on the Alexanders’ own

testimony, the court agrees with defendants that there was

no evidence suggesting outrageous conduct on the part of

Mrs. Riga “beyond that which may attach to any finding of

intentional discrimination.” (Defendants’ Response to

Plaintiffs’ Motion for Judgment Notwithstanding the Verdict

or for a New Trial on Damages, pp. 13-14). Accordingly,

the court believes that the evidence offered by plaintiffs at

trial did not support an award of punitive damages in the

Alexanders’ favor.

With respect to the FHP, the jury did find that Mrs.

Riga’s discrimination was a legal cause of harm to the FHP,

but declined to award damages. There was no evidence,

however, that, prior to the initiation of this action, Mrs. Riga

was aware of the existence of the FHP or its involvement in

the matter during the period in which the discriminatory

conduct occurred. Because of her lack of awareness of the

involvement of the FHP, Mrs. Riga could not have acted

with an evil motive or intent toward the FHP, or with reckless

or callous indifference to its federally protected rights.

Further, when the jury verdicts were returned, the court

believed it would be inappropriate to permit an award of

punitive damages in favor of the FHP, in light of the fact

that the jury had awarded neither compensatory nor nominal

43a

Appendix B

damages to it, as well as the failure of Mr. and Mrs.

Alexander to offer any evidence suggesting outrageous

conduct on the part of Mrs. Riga “beyond that which may

attach to any finding of intentional discrimination.”

Accordingly, the court declines to grant plaintiffs’ request

for a new trial based on the court’s alleged error in refusing

to charge the jury on the issue of punitive damages.

3. Regarding the court’s refusal to instruct the jury that

an award of compensatory damages in favor of the FHP was

required based on the evidence, the court believes that a

reasonable jury could have concluded that the FHP was not

entitled to recover any damages as a result of Mrs. Riga’s

discriminatory conduct. Prior to the involvement of the FHP

in this case, Mr. Alexander had procured evidence of

discrimination through the use of his own “tester,” Robin

McDonough, a white, female friend.’ In addition, Ms.

Mitchell, one of plaintiffs’ co-counsel, employed a private

investigator, Jeffrey Lang, to act as a “tester” to gather

evidence of discrimination against Mrs. Riga. Under the

circumstances, the jury may have concluded that the services

of the FHP were insignificant or of no value in this case, and

that, therefore, the FHP should not recover any compensatory

damages.

Further, with respect to the testimony offered by the FHP

through Andrea Blinn, its Executive Director, concerning

7. “Testers” are individuals who, without any intent to rent or

purchase a home or apartment, pose as renters or purchasers for the

purpose of collecting evidence of discriminatory housing practices.

Havens Realty Corp. v. Coleman, 455 U.S. 363, 102 S.Ct. 1114, 71

L.Ed.2d 214 (1982).

44a

Appendix B

its alleged damages, which consisted of “tester” fees, Ms.

Blinn’s time and the time of in-house counsel for the FHP,

defendants elicited testimony from Ms. Blinn on cross-

examination regarding the substantial federal funding

received by the FHP in 1995. Based on this testimony, a

reasonable jury could have concluded that the FHP sustained

no actual damages as a result of investigating Mrs. Riga’s

conduct. Accordingly, the court declines to grant plaintiffs’

request for a new trial based on the court’s alleged error in

refusing to charge the jury that it was required to award

compensatory damages in favor of the FHP based on the

evidence.

4. Finally, in connection with plaintiffs’ assertion that

the court erred by excluding the testimony of Steve Denson,

Michael Bowen and Michael Snow, this testimony was

apparently to be proffered by plaintiffs to show other

intentional acts of race discrimination by Mrs. Riga.

Specifically, in their amended pretrial statement, plaintiffs

state: “Michael Snow will testify that he and other CMU

students Michael Bowen (black) and Steven Denson (native

american) were shown an apartment in Squirrel Hill by Maria

Riga, and were treated less favorably when the Rigas learned

that one of the roommates (Bowen) would be a black man.

Bowen and Snow will testify that the students were so

troubled by such behavior that it was felt that the Rigas

should not be allowed to participate in the campus housing

program due to their discriminatory attitude against blacks.”

(Plaintiffs’ Amended Pretrial Statement, p. 12).

With respect to Mr. Denson, the court notes, as an initial

matter, that, although Mr. Snow and Mr. Bowen were listed

45a

Appendix B

as potential liability witnesses in plaintiffs’ amended pretrial

statement, Mr. Denson was not so listed. In any event, the

present case was a disparate treatment, not a disparate impact,

case. Therefore, the court ruled that the deposition testimony

of Mr. Denson should not be admitted in evidence pursuant

to Federal Rule of Evidence 404(b), because the ccurt

believed that the relevance of such testimony would be

substantially outweighed by the danger of unfair prejudice

under Federal Rule of Evidence 403. Regardless whether the

exclusion of the testimony of Mr. Denson was proper under

the Federal Rules of Evidence, his testimony would have

been relevant only to the issue of Mrs. Riga’s discriminatory

conduct, and not to the issue of the harm legally caused to

the Alexanders by such conduct or to the issue of damages.

For this reason alone, the exclusion of the testimony of Mr.

Denson could not justify the grant of a new trial in this case.

As to Mr. Snow and Mr. Bowen, the court does not

believe that plaintiffs proffered their testimony at trial.

However, if their testimony was also excluded, it was for

the same reason as the exclusion of Mr. Denson’s testimony

and does not justify a new trial in this case.

B. Plaintiffs’ Motion for Hearing on Injunctive and

Equitable Relief

On May 28, 1998, six days after the jury’s verdicts were

returned in this case, and the jury was discharged, plaintiffs

filed their Motion for Hearing on Injunctive and Equitable

Relief. Although plaintiffs had requested injunctive and

equitable relief in their complaint and in their original and

amended pretrial statements, at no time during the pretrial

46a

Appendix B

conferences with the court or during the trial itself, did

plaintiffs’ attorneys refer to their requests for injunctive and

equitable relief. Based on the failure of plaintiffs’ counsel

to raise the issue of injunctive and equitable relief prior to

the conclusion of the trial of this case, the court declines to

grant their request for such relief.

Assuming, arguendo, that plaintiffs had timely raised

the issue of equitable and injunctive relief, the court

nevertheless would decline to grant such relief based on the

conclusion that it is unnecessary. First, the conduct of Mrs.

Riga that was the subject of plaintiffs’ discrimination claims

occurred in 1995. No evidence was offered of any such

discriminatory conduct since 1995, and the court believes

that there is very little risk of recurrent violations of federal

law by Mrs. Riga that would warrant injunctive relief.

Second, in the court’s opinion, it is significant that the Rigas

have rented units in their apartment buildings to African

Americans since the events giving rise to this lawsuit as

evidenced by the affidavits of Vera Jefferson and Dorothy

Williamson, which were submitted by defendants in

opposition to plaintiffs’ Motion for Hearing on Injunctive

and Equitable Relief. Under the circumstances, this post-trial

motion will also be denied.

C. Plaintiffs’ Motion for Award of Attorneys’ Fees, Costs

and Expenses in their Favor as Prevailing Parties

Next, plaintiffs assert that they are prevailing parties in

this action, and they seek an award of attorneys’ fees and

costs under the FHA, which provides in relevant part:

* * *

TR IM, ae ea A nee Me Fs APs

47a

Appendix B

§ 3613 Enforcement by private persons

* * *

(c) Relief which may be granted

* * *

(2) In a civil action under subsection (a) of

this section, the court, in its discretion, may allow

the prevailing party, other than the United States,

a reasonable attorney’s fee and costs. . . .

42 U.S.C. § 3613(c)(2).

In turn, Section 3602(0) of the FHA provides that “prevailing

party” has the same meaning as such term has in the Civil

Rights Attorney’s Fees Awards Act of 1976, 42 U.S.C.

§ 1988.8

In Farrar v. Hobby, 506 U.S. 103, 113 S.Ct. 566, 121

L.Ed.2d 494 (1992), the Supreme Court of the United States

discussed the standard to be applied in determining whether

8. 42 U.S.C. § 1988 provides in relevant part:

“In any action or proceeding to enforce a provision of

sections 1981, 1982, 1983, 1985, and 1986 of this title,

title IX of Public Law 92-318... , or title VI of the

Civil Rights Act of 1964... , the court, in its discretion

may allow the prevailing party, other than the United

States, a reasonable attorney’s fee as part of the costs.”

48a

Appendix B

a civil rights plaintiff was a prevailing party in order to

qualify for attorney’s fees under Section 1988 as follows:

* * *

... to qualify as a prevailing party, a civil

rights plaintiff must obtain at least some relief on

the merits of his claim. The plaintiff must obtain

an enforceable judgment against the defendant

from whom fees are sought, Hewitt, supra, at 760,

or comparable relief through a consent decree or

settlement, Maher v. Gagne, 448 U.S. 122, 129

(1980). Whatever relief the plaintiff secures must

directly benefit him at the time of the judgment

or settlement. See Hewitt, supra, at 764.

Otherwise the judgment or settlement cannot be

said to “affec[t] the behavior of the defendant

toward the plaintiff.” Rhodes, supra, at 4. Only

under these circumstances can civil rights

litigation effect “the material alteration of the

legal relationship of the parties” and thereby

transform the plaintiff into a prevailing party.

Garland, supra, at 792-793. In short, a plaintiff

“prevails” when actual relief on the merits of his

claim materially alters the legal relationship

between the parties by modifying the defendant’s

behavior in a way that directly benefits the

plaintiff. .. .

* * *

.... To be sure, a judicial pronouncement

that the defendant has violated the Constitution,

49a

Appendix B

unaccompanied by an enforceable judgment on

the merits, does not render the plaintiff a

prevailing party. Of itself, “the moral satisfaction

[that] results from any favorable statement of law”

cannot bestow prevailing party status. Hewitt, 482

U.S., at 762. No material alteration of the legal

relationship between the parties occurs until the

plaintiff becomes entitled to enforce a judgment,

consent decree, or settlement against the

defendant. ...

* * *

506 U.S. at 111-113, 113 S.Ct. at 573-574.

Based on the special verdicts returned by the jury in this

case, as well as the court’s determination that plaintifts are

not entitled to injunctive or equitable relief, the court

concludes that plaintiffs are not prevailing parties. Simply

put, this litigation did not effect a “material alteration of the

legal relationship of the parties.” The defendants’ behavior

has not been modified “in a way that directly benefits the

plaintiffs.” At best, the jury’s special verdicts provided

plaintiffs with “moral satisfaction,” which is insufficient to

bestow prevailing party status on them. Under the

circumstances, plaintiffs’ Motion for Award of Attorneys’

Fees, Costs and Expenses in their Favor as Prevailing Parties

will be denied.

D. Plaintiffs’ Motion to Tax Costs against Defendants

Because the court concludes that plaintiffs are not

prevailing parties in this litigation for the reasons set forth

50a

Appendix B

above, the court will also deny their Motion to Tax Costs

against Defendants.

E. Plaintiffs’ Rule 60 Motion Nunc Pro Tunc to Correct

Error in Judgment and for Rule 59(e) Relief Nunc Pro

Tunc from Judgment

As noted above in connection with the procedural history

of this case, the court entered a judgment in favor of

defendants and against plaintiffs on May 26, 1998 based on

the jury’s special verdicts. That judgment reads as follows:

IT IS ORDERED AND ADJUDGED that, in

accordance with the special verdicts returned by

the jury on May 22, 1998, judgment be, and

hereby is, entered in favor of Defendants Joseph

Riga and Maria A. Riga, a/k/a Carla Agnotti, and

against the Plaintiffs Ronald Alexander and Faye

Alexander and the Fair Housing Partnership of

Greater Pittsburgh, Inc., together with costs.

(Document No. 80).

In their Rule 60 Motion Nunc Pro Tunc to Correct Error in

Judgment and for Rule 59(e) Relief Nunc Pro Tunc from

Judgment, plaintiffs seek “an order granting judgment as a

matter of law for Plaintiffs, correcting the entry of judgment

to reflect declaratory and nominal damages and costs for

Plaintiffs, not Defendants, opening the entry of judgment

and costs for defendants as prematurely granted, and

continuing generally the time within which Plaintiffs must

file a Fee Petition until after a final order is entered disposing

of Plaintiffs’ post trial motions.” (Document No. 96, p. 4).

Sla

Appendix B

After consideration, this post-trial motion of plaintiffs

will be granted to the extent that an amended judgment will

be filed, entering judgment in favor of the FHP and against

defendants on the issue of liability under the FHA only and

directing each party to bear their own costs. In all other

respects, the judgment, as entered on May 26, 1998, will

remain the same.’

F. Defendants’ Motion to Tax Costs against Plaintiffs

Finally, with respect to defendants’ Motion to Tax Costs

against Plaintiffs, as noted above, the court, upon further

consideration, concludes that the judgment entered on May

26, 1998 should be amended to direct that the parties bear

their own costs.'° Because the jury found that Mrs. Riga’s

discriminatory conduct was not the legal cause of harm to

the Alexanders and declined to award compensatory or

nominal damages in favor of any plaintiff, defendants argue

that they were the prevailing parties in this case and that

they should be entitled to recover their costs in defending

this action. However, in view of the jury’s determination

that Mrs. Riga did, indeed, violate the FHA by engaging in

discriminatory conduct, the court believes that there should

9. The court’s willingness to amend the judgment originally

entered on May 26, 1998 in favor of defendants and against the

FHP does not affect, in any way, the court’s conclusions regarding

the FHP’s motion for nominal damages or motion for a new trial on

compensatory and punitive damages or alter the court’s conclusion

that the FHP is not a prevailing party in this action.

10. Defendants seek to recover costs in the amount of $5,327.95

from plaintiffs.

52a

Appendix B

be some consequence to the Rigas for such conduct.

Accordingly, regardless whether defendants were,

technically, the prevailing parties as to the Alexanders, the

court declines to exercise its discretion to award costs in

favor of defendants and against the Alexanders.

An order follows.

53a

Appendix B

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

Civil Action No. 96-49

RONALD ALEXANDER, FAYE ALEXANDER

and the FAIR HOUSING PARTNERSHIP

OF GREATER PITTSBURGH, INC.,

Plaintiffs,

VS.

JOSEPH RIGA and MARIA A. RIGA,

a/k/a CARLA AGNOTTI,

Defendants

ORDER

AND NOW, this 9th day of October, 1998, in accordance

with the foregoing memorandum, it is ORDERED as follows:

1. Plaintiffs’ Motion for Judgment Notwithstanding the

Verdict or for a New Trial on Damages (Document No. 82)

is denied.

2. Plaintiffs’ Motion for Hearing on Injunctive and

Equitable Relief (Document No. 83) is denied.

3. Plaintiffs’ Motion for Award of Attorneys Fees, Costs

and Expenses in their Favor as Prevailing Parties (Document

No. 84) is denied.

54a

Appendix B

4. Plaintiffs’ Motion to Tax Costs against Defendants

(Document No. 85) is denied.

5. Plaintiffs’ Rule 60 Motion Nunc Pro Tunc to Correct

Error in Judgment and for Rule 59(e) Relief Nunc Pro Tunc

from Judgment (Document No. 96) is granted in part and

denied in par..

6. Defendants’ Motion to Tax Costs Against Plaintiffs

(Document No. 87) is denied.

s/ William L. Standish

William L. Standish

United States District Judge

55a

APPENDIX C — AMENDED JUDGMENT IN THE

UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF PENNSYLVANIA

DATED OCTOBER 9, 1998

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF PENNSYLVANIA

CASE NUMBER: CA 96-49

RONALD ALEXANDER, FAYE ALEXANDER

and the FAIR HOUSING PARTNERSHIP

OF GREATER PITTSBURGH, INC.

V.

JOSEPH RIGA and MARIA A. RIGA,

a/k/a CARLA AGNOTTI

AMENDED JUDGMENT IN A CIVIL CASE

x} Jury Verdict. This action came before the Court for a

trial by jury. The issues have been tried and the jury has

rendered its verdict by special verdicts.

* * *

IT IS ORDERED AND ADJUDGED as follows:

1. The judgment entered by the court on May 26, 1998

is hereby vacated.

2. In accordance with the Special Verdicts returned by

the jury on May 22, 1998, judgment is entered in favor of

56a

Appendix C

defendants and against plaintiffs Ronald Alexander and Faye

Alexander.

3. In accordance with the Special Verdicts returned by

the jury on May 22, 1998, judgment is entered in favor of

plaintiff Fair Housing Partnership of Greater Pittsburgh, Inc.

and against defendants as to liability under the Fair Housing

Act. No damages are awarded in favor of said plaintiff.

4. The parties are to bear their own costs.

JUDGMENT IS HEREBY ENTERED ACCORDINGLY.

10-9-98 s/ [illegible]

Date Clerk

s/ William A. Standish s/ [illegible]

(By) Deputy Clerk

57a

APPENDIX D — MEMORANDUM AND ORDER OF

THE UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF PENNSYLVANIA

DATED MARCH 10, 1998

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

Civil Action No. 96-49

RONALD ALEXANDER, FAYE ALEXANDER

and the FAIR HOUSING PARTNERSHIP

OF GREATER PITTSBURGH, INC.,

Plaintiffs,

VS.

JOSEPH RIGA and MARIA A. RIGA,

a/k/a CARLA AGNOTTI,

Defendants

MEMORANDUM

|

In this civil action, plaintiffs, Ronald Alexander, Faye

Alexander and the Fair Housing Partnership of Greater

Pittsburgh, Inc., seek damages from defendants, Joseph Riga

and Maria A. Riga, under the Fair Housing Act, Title VIII

of the Civil Rights Act of 1968, 42 U.S.C. § 3601 et seq.,'

1. The Fair Housing Act prohibits discrimination in the sale or

rental of housing, including the refusal to negotiate for the rental

(Cont'd)

Rat

58a

Appendix D

alleging that defendants discriminated against the individual

plaintiffs on the basis of their race in connection with the

individual plaintiffs’ attempts to view a rental property

owned by defendants. The individual plaintiffs also assert a

claim against defendants for race discrimination under

Sections 1981 and 1982 of the Civil Rights Act of 1866, 42

U.S.C. §§ 1981 and 1982.’ Presently, before the court is

(Cont'd)

of, or otherwise make unavailable or deny, a dwelling to any person

because of race; to discriminate against any person in the terms,

conditions or privileges of rental of a dwelling because of race; or

to represent to any person because of race that any dwelling is not

available for inspection, sale or rental when such dwelling is, in

fact, so available. See 42 U.S.C. §§ 3604(a), (b) and (d).

2. These statutes provide:

§ 1981. Equal rights under the law

(a) Statement of equal rights

All persons within the jurisdiction of the United

States shall have the same right in every State and

Territory to make and enforce contracts, to sue, be

parties, give evidence, and to the full and equal benefit

of all laws and proceedings for the security of persons

and property as is enjoyed by white citizens, and shall

be subject to like punishment, pains, penalties, taxes,

licenses, and exactions of every kind, and to no other.

42 U.S.C. § 1981.

(Cont’d)

-

59a

Appendix D

defendants’ motion for summary judgment pursuant to

Fed.R.Civ.P. 56. For the reasons set forth below, the motion

will be denied.

IT

For purposes of the present motion, the following facts

are undisputed:°

Plaintiffs Ronald Alexander and Faye Alexander

(collectively, the Alexanders), husband and wife, are Afro-

American. Defendants Joseph Riga and Maria Riga

(collectively, the Rigas), husband and wife, are Caucasian.

The Rigas are the owners of six rental properties in the City

of Pittsburgh, including a five-unit dwelling located at 5839

(Cont'd)

§ 1982. Property rights of citizens

All citizens of the United States shall have the same

right, in every State and Territory, as is enjoyed by white

citizens thereof to inherit, purchase, lease, sell, hold,

and convey real and personal property.

42 U.S.C. § 1982.

3. As they must, defendants accept as true any facts pleaded

by plaintiffs regarding the alleged efforts of the individual plaintiffs

and individuals acting on behalf of the organizational plaintiff to

view an apartment advertised for rent by defendants for purposes of

their summary judgment motion. (Defendants’ Brief in Support,

p. 2). Nevertheless, defendants maintain that they are entitled to a

judgment in their favor as to all claims asserted in plaintiffs’ amended

complaint.

60a

Appendix D

Darlington Road in the Squirrel Hill section of the City of

Pittsburgh that was purchased by the Rigas in May, 1995.

(Plaintiffs’ Appendix in Opposition, Exh. 6, pp. 11-13, 24).

On Sunday, September 17, 1995, Mr. Alexander saw an

ad in the Pittsburgh Post-Gazette, advertising a unit for rent

in the Rigas’ Darlington Road property.* Mrs. Alexander

called the telephone number in the ad to make an appointment

to see the apartment, and she spoke to a woman named

Maria.* An appointment to see the apartment was scheduled

for the next day, September 18, 1995, at 12:00 p.m. Due to

Mr. Alexander’s work schedule, however, the Alexanders

changed the appointment to 1:00 p.m. (Plaintiffs’ Appendix

in Opposition, Exh. 1, p. 53, Exh. 2, pp. 15-16).

On September 18, 1995, the Alexanders went to the

Rigas’ Darlington Road property to view the apartment at

the scheduled time, parking in front of the property adjacent

to the Rigas’ property. Shortly thereafter, Mrs. Riga drove

up Darlington Road in a dark colored Jeep-like vehicle, and

she parked in the driveway of her Darlington Road property.

Mrs. Riga walked up to the Alexanders’ car, tapped on the

driver’s window and informed the Alexanders that they

should not have changed the time of their appointment to

see the apartment because she had rented the apartment in

4. The apartment advertised for rent in this five-unit building

was Apartment No. 2. (Defendants’ Motion for Summary Judgment,

Exh. D, Plaintiffs’ Appendix in Opposition, Exh. 6, p. 16).

5. The telephone number in the Pittsburgh Post-Gazette ad was

(412) 963-8706, which is the Rigas’ unlisted telephone number.

(Plaintiffs’ Appendix in Opposition, Exh. 6, p. 24).

6la

Appendix D

the meantime. Mrs. Rigas told the Alexanders that she had

tried to call them to tell them that the apartment had been

rented; however, when the Alexanders subsequently checked

the messages on their telephone answering machine, there

was no message from Mrs. Riga. (Plaintiffs’ Appendix in

Opposition, Exh. 1, pp. 57, 99-102).

On Sunday, September 24, 1995, Mr. Alexander saw

another ad in the Pittsburgh Post-Gazette for the apartment

in the Rigas’ Darlington Road property, and, in response to

this ad, Mr. Alexander asked a friend, Robin McDonough, a

white female, to call the telephone number in the ad to

schedule an appointment to see the apartment.® Ms.

McDonough spoke to a woman and scheduled an

appointment to see the apartment on September 27, 1995;

however, Ms. McDonough did not keep this appointment.

(Plaintiffs’ Appendix in Opposition, Exh. 1, pp. 104-105,

Exh. 8, p. 10, Exh. 9).

Because Mr. Alexander was angry that Ms. McDonough

had been given an appointment to see the apartment, which

was allegedly rented when the Alexanders attempted to view

it on September 18, 1995, he called the telephone number in

the newspaper ad on September 26, 1995 and scheduled an

appointment under the fictitious name, James Irwin, to see

the apartment on September 29, 1995 at 11:30 a.m.

(Plaintiffs’ Appendix in Opposition, Exh. 1, pp. 105-106).

6. Exhibit Q to defendants’ motion for summary judgment is a

Pittsburgh Post-Gazette invoice demonstrating that Mrs. Riga advertised

Apartment No. 2 for rent in the Pittsburgh Post-Gazette on September

24, 1995. According to the Rigas, the Alexanders produced this

invoice. (Defendants’ Motion for Summary Judgment, p. 15).

62a

Appendix D

Mr. Alexander drove to the Rigas’ Darlington Road

property on September 29, 1995, parked around the corner

from the property and walked to it. Mrs. Riga was sitting on

the front steps of the property, and, when Mr. Alexander

indicated that he was there to see the apartment, Mrs. Riga

stated that she had forgotten her keys.’ When Mr. Alexander _

asked Mrs. Riga if he could make another appointment to

see the apartment, she told him to call her. As Mr. Alexander

started to walk down the steps to the driveway to leave the

property, Mrs. Riga got up from the front steps of the property

and entered the property by using her keys. Mr. Alexander

then went home and contacted his attorney, Caroline Mitchell,

as well as Andrea Blinn of the defendant Fair Housing

Partnership of Greater Pittsburgh, Inc. (Fair Housing

Partnership), concerning his perceived discrimination.*®

(Plaintiffs’ Appendix in Opposition, Exh. 1, pp. 106, 109-114).

Mr. Alexander called Mrs. Riga approximately nine

times after September 29, 1995 in an attempt to schedule

another appointment to see the advertised apartment in the

7. In this connection, Mr. Alexander testified during his

deposition that, when he walked up to Mrs. Riga on September 29,

1995, “she put her hands, like, over her keys, and she said I forgot

my keys.” (Plaintiffs’ Appendix in Opposition, Exh. 1, p. 109).

8. Andrea Blinn is the Executive Director of the Fair Housing

Partnership, a non-profit corporation organized under the laws of

the Commonwealth of Pennsylvania. The mission of the Fair

Housing Partnership, as stated in its by-laws, is “to eliminate housing

discrimination and to promote fair housing in the Greater Pittsburgh

area through collaborative undertakings in education, monitoring

and research, legislative reform, and community involvement.” (Fair

Housing Partnership’s Brief in Opposition, Exh. 1).

63a

Appendix D

Rigas’ Darlington Road property. When Mr. Alexander’s

telephone calls were answered by a woman, she told him

that the apartment had been rented, and, when Mr. Alexander

left messages on the Rigas’ telephone answering machine,

his calls were not returned. (Plaintiffs’ Appendix in

Opposition, Exh. 1, pp. 115-116).

On September 29, 1995, Jeffrey Lang, a white male, called

Mrs. Riga and left a message on her telephone answering

machine, indicating that he wanted to see the apartment in the

Darlington Road property that was advertised for rent. Mrs.

Riga returned Mr. Lang’s telephone call and an appointment

was scheduled for Saturday, September 30, 1995 at 5:00 p.m.

Prior to the appointment, Mr. Lang was not asked about his

credit history. On Saturday, September 30, 1995, Mrs. Riga

showed Apartment No. 2 in the Darlington Road property to

Mr. Lang. He was given a rental application and told that he

would have to pay for a credit check. Mr. Lang did not make

any commitments to Mrs. Riga regarding his intention to lease

the apartment, fill out the application or pay for a credit check.°

(Plaintiffs’ Appendix in Opposition, Exh. 9).

Dennis Orvosh, a white male, serves as a volunteer tester

for the Fair Housing Partnership.'° On Thursday, September

9. It is not clear from the present record in this case whether

Mr. Lang was asked by the Alexanders or the Fair Housing

Partnership to contact the Rigas regarding the availability of

Apartment No. 2 in the Darlington Road property.

10. “Testers” are individuals who, without any intent to rent

or purchase a home or apartment, pose as renters or purchasers for

the purpose of collecting evidence of discriminatory housing practices.

See Havens Realty Corp. v. Coleman, 455 U.S. 363, 373 (1982).

64a

Appendix D

28, 1995, Mr. Orvosh was asked to call Mrs. Riga concerning

the availability of the apartment in the Darlington Road

property.'’ On Friday, September 29, 1995, Mrs. Riga

returned Mr. Orvosh’s telephone call and told him that the

apartment was available. An appointment for Mr. Orvosh to

see the apartment was scheduled for the next day. Prior to

the appointment, Mrs. Riga did not question Mr. Orvosh

about his credit history, and, on Saturday, September 30,

1995, Mrs. Riga showed Mr. Orvosh the apartment in the

Darlington Road property. Mrs. Riga told Mr. Orvosh that,

if he was interested in the apartment, he would have to fill

out a rental application and undergo a credit check.

(Plaintiffs’ Appendix in Opposition, Exh. 10).

At the request of the Fair Housing Partnership, Mr.

Orvosh called Mrs. Riga on October 2, 1995 and scheduled

another appointment to see Apartment No. 2 in the Darlington

Road property on October 4, 1995. During this telephone

conversation, Mr. Orvosh was informed by Mrs. Riga that

the apartment was still available. Again, Mrs. Riga did not

mention Mr. Orvosh’s credit history. On October 3, 1995,

Mr. Orvosh canceled his appointment with Mrs. Riga to see

the apartment for a second time. (Plaintiffs’ Appendix in

Opposition, Exh. 10).

According to the October 4, 1995 “Testing Summary”

prepared by Andrea Blinn, Executive Director of the Fair

11. Based on the date that Mr. Orvosh claims that he was asked

to call Mrs. Riga for purposes of serving as a tester for the Fair

Housing Partnership, it appears that the Alexanders contacted the

Fair Housing Partnership prior to Mrs. Riga’s failure to show Mr.

Alexander the Darlington Road apartment on September 29, 1995.

65a

Appendix D

Housing Partnership, Mr. Orvosh was “paired” with Daria

Mitchell, a black female, for the testing of the Rigas’

Darlington Road property by the Fair Housing Partnership.

Pursuant to this test, Ms. Mitchell called (412) 963-8706

four times on September 29, 1995, leaving three messages

regarding the ad in the Pittsburgh Post-Gazette for the

apartment in the Rigas’ Darlington Road property. Mrs. Riga

called back and left a message on Ms. Mitchell’s voice mail,

indicating that she could see the apartment the next day,

September 30, 1995, between 11:00 a.m. and 11:30 a.m. Later

that evening, Mrs. Riga called Ms. Mitchell back and

rescheduled the appointment to see the apartment to 1:00

p.m. the next day. At that time, Mrs. Riga told Ms. Mitchell

that the address of the property was 583 Darlington Road.

(Defendants’ Motion for Summary Judgment, Exh. O).

When Ms. Mitchell went to see the apartment the next

day, she could not find the address given to her by Mrs. Riga.

As a result, she walked down Darlington Road, looking for

a “For Rent” sign with the Rigas’ telephone number. Ms.

Mitchell found the sign on the property located at 5839

Darlington Road. She rang the doorbell but no one answered.

As aresult, she left and walked back to her car. (Defendants’

Motion for Summary Judgment, Exh. QO).

Later that day, Mrs. Riga paged Ms. Mitchell and said

that she could see the apartment at 5:30 p.m. When Ms.

Mitchell questioned Mrs. Riga about being given the wrong

address, Mrs. Riga insisted that she had given Ms. Mitchell

the correct address. When Ms. Mitchell arrived at the

Darlington Road property at 5:30 p.m., Mrs. Riga was

coming out of the property with a man named Jeff. Mrs. Riga

66a

Appendix D

indicated that Jeff had just completed an application for the

apartment, and that he was going to “get them money.”

Despite the apparent rental of the advertised apartment, Mrs.

Riga offered to show it to Ms. Mitchell. When Ms. Mitchell

asked Mrs. Riga if Jeff was going to get the apartment, she

responded “yes.” Mrs. Riga showed Ms. Mitchell d piece of

paper, indicating that it was a check from Jeff. However,

Ms. Mitchell did not think that the piece of paper looked

like a check. She thanked Mrs. Riga and shook her hand.

Mrs. Riga then said that she would call Ms. Mitchell if

another apartment became available. Based on these events,

Ms. Blinn concluded that there was evidence of possible

housing discrimination and stated so in her “Testing

Summary.” (Defendants’ Motion for Summary Judgment,

Exh. O).

On Tuesday, October 3, 1995, Heidi Sestrich, a white

female, was asked by the Alexanders’ attorney, Caroline

Mitchell, to serve as a tester for the Fair Housing Partnership

by calling Mrs. Riga to inquire into the availability of the

advertised apartment in the Darlington Road property, and

Ms. Sestrich agreed to do so. She called the Rigas’ telephone

number and left a message on their telephone answering

machine. The next day, October 4, 1995, at approximately

1:50 p.m., a woman returned Ms. Sestrich’s telephone call,

leaving a message that the apartment was still available and

that she could schedule an appointment to see it. Ms. Sestrich

was instructed to call before 2:30 p.m. to make an

appointment. When she received this message, Ms. Sestrich

informed Attorney Mitchell of the message. (Plaintiffs’

Appendix in Opposition, Exh. 12).

67a

Appendix D

On Friday, October 6, 1995 at approximately 11:51 a.m.,

and on Saturday, October 7, 1995 at approximately 9:08 a.m.,

a woman called Ms. Sestrich again, leaving messages about

the advertised apartment in the Rigas’ Darlington Road

property. Ms. Sestrich informed Attorney Mitchell of these

telephone messages, and, on Monday, October 9, 1995, Ms.

Sestrich and Attorney Mitchell played back the messages

on Ms. Sestrich’s telephone answering machine concerning

the Rigas’ apartment. The tape recorded messages were given

to Attorney Mitchell at her request. (Plaintiffs’ Appendix in

Opposition, Exh. 12).

On October 8, 1995, Mr. Alexander’s friend, Robin

McDonough, called Mrs. Riga again to schedule another

appointment to see the advertised apartment in the Darlington

Road property. Mrs. Riga scheduled an appointment for Ms.

McDonough for Monday, October 9, 1995, and Ms.

McDonough was shown the apartment. Prior to being shown

the apartment, Ms. McDonough was not asked about her

credit history. (Plaintiffs’ Appendix in Opposition, Exh. 9).

Apartment No. 2 in the Rigas’ Darlington Road property

ultimately was leased to Dr. Rajendra and Kimberly Sinha

in November, 1995.'? (Defendants’ Motion for Summary

Judgment, Exh. D).

12. In contrast to the Alexanders’ allegations, during her

deposition, Mrs. Riga testified she does not remember receiving a

call from Mrs. Alexander in September, 1995, regarding the

apartment advertised for rent in the Darlington Road property; that

she does not remember meeting the Alexanders at the Darlington

Road property on September 18, 1995; that she does not remember

telling the Alexanders that they should not have changed the time

(Cont’d)

68a

Appendix D

With respect to the Rigas’ tenants in the Darlington Road

property, Apartment No. 1 was rented to Susan Augustitus

shortly after the Rigas purchased the property in May, 1995.

Apartment No. 2 was leased to Chang Su Chan and his wife,

Jing Chan, who entered into a lease with the Rigas after their

purchase of the building. Mr. Chan’s lease was due to expire

in February, 1996. However, Apartment No. 2 became

available to rent and was advertised by the Rigas in

September, 1995 because Mr. and Mrs. Chan moved out prior

to the expiration of their lease with the Rigas. Apartment

No. 3 was leased to Martha Teplica, who had been a tenant

of the previous owner of the building. Apartment No. 4-was

leased to Rose Abrams in June, 1995, and Apartment No. 5

was leased to Elissa Helms and Catherine Serventi in

November, 1995.'° (Plaintiffs’ Appendix in Opposition,

Exh. 6, pp. 19-21, 37).

Prior to the Rigas’ rental of Apartment No. 2 in the

Darlington Road property to the Sinhas in November, 1995,

Mrs. Rigas asked Landlord Service Bureau to perform a

credit check on Mrs. Sinha, and Mrs. Riga received a

certificate of recommendation for Mrs. Sinha. Mrs. Riga did

(Cont’d)

of their appointment because she had rented the apartment in the

interim; and that she does not remember meeting any Afro-American

couple for purposes of showing them the apartment advertised for

rent in the Darlington Road property. (Plaintiffs’ Appendix in

Opposition, Exh. 6, pp. 68-72).

13. Prior to the lease of Apartment No. 5 to Ms. Helms and

Ms. Serventi, the unit had been vacant because it required repairs.

(Plaintiffs’ Appendix in Opposition, Exh. 6, p. 37).

69a

Appendix D

not ask Landlord Service Bureau to perform a credit check

on Dr. Sinha.'* (Defendants’ Motion for Summary Judgment,

Exh. D). As to the issue of whether credit checks were performed

on the Rigas’ other tenants in the Darlington Road property,

in response to discovery requests, the Rigas failed to produce

any evidence to show that credit checks had been requested

for, or performed on, any other tenant in the building.

At the time the Alexanders attempted to view Apartment

No. 2 in the Rigas’ Darlington Road property, Mr. Alexander

had defaulted on credit accounts with Lane Bryant, Kaufmann’s,

Lazarus and J.C. Penney, and Mrs. Alexander had defaulted

on a student loan and an account with Bell Atlantic. In

addition, the Alexanders had defaulted on individual accounts

with Equitable Gas.'* (Defendants’ Motion for Summary

Judgment, Exh. A, pp. 147-151, Exh. B, pp. 39-40). However,

prior to discovery in this case, the Rigas did not request any

information from the Alexanders regarding their credit history,

and they had no knowledge of the Alexanders’ credit history.'®

(Plaintiffs’ Appendix in Opposition, Exhs. 3 and 4).

14. In an affidavit submitted in support of defendants’ motion

for summary judgment, Mrs. Riga states that, based on Mrs. Sinha’s

good credit history and Dr. Sinha’s professional status, she did not

request a credit check on Dr. Sinha. (Defendants’ Motion for

Summary Judgment, Exh. D).

15. The total amount of the debt on these defaulted accounts

exceeds $6,700.00. (Defendants’ Motion for Summary Judgment,

Exhs. G to M).

16. Mr. Riga was in Italy from August 5, 1995 until mid-

November, 1995. (Plaintiffs’ Appendix in Opposition, Exh. 7,

(Cont’d)

_————————

70a

Appendix D

Ill

Rule 56(c) of the Federal Rules of Civil Procedure

mandates the entry of summary judgment, after adequate time

for discovery and upon motion, against a party who fails to

make a showing sufficient to establish the existence of an

element essential to that party’s case, and on which that party

will bear the burden of proof at trial. Celotex Corp. v. Catrett,

477 U.S. 317,-322, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265,

273 (1986). At the summary judgment stage, the court’s

function is not to weigh the evidence and determine the truth

of the matter, but to determine whether there is a genuine

issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 249, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202, 212 (1986).

The existence of a factual dispute between the parties will

defeat an otherwise properly supported motion for summary

judgment only if there is a “genuine” issue of “material”

fact. Id. 477 U.S. at 248, 106 S.Ct. at 2510, 91 L.Ed.2d at

211. Keeping this standard in mind, the court turns to

defendants’ motion for summary judgment.

IV

Turning first to the Alexanders’ claims against the Rigas,

in Chauhan v. M. Alfieri Co., Inc., 897 F.2d 123 (3d

(Cont’d)

p. 10). As a result, the Alexanders dealt exclusively with Mrs. Rigas

in connection with their attempts to view Apartment No. 2 in the

Rigas’ Darlington Road property. However, because the duty not to

discriminate in connection with housing under the applicable statutes

is anon-delegable duty, Mr. Riga would be liable for any discrimination

by Mrs. Riga as the co-owner of the Darlington Road property.

Tla

Appendix D

Cir.1990), a prospective tenant, an Indian national, brought

an action against a landlord under 42 U.S.C. § 1981 after

the landlord denied the prospective tenant’s application for

the lease of retail space in the landlord’s office buiiding.

The district court granted the landlord’s motion for summary

judgment, and the prospective tenant appealed. On appeal,

the United States Court of Appeals for the Third Circuit

reversed, holding that material issues of fact existed as to

whether the landlord’s reasons for not renting to the

prospective tenant were pretextual. With regard to the

plaintiff's prima facie case in an action alleging housing

discrimination, the Third Circuit stated:

* * *

A successful section 1981 claim requires

proof of intentional discrimination. General

Building Contractors Association vy.

Pennsylvania, 458 U.S. 375, 389, 102 S.Ct. 3141,

3149, 73 L.Ed.2d 835 (1982); Croker v. Boeing

Co., 662 F.2d 975, 988 (3d Cir.1981). However,

because of the evidentiary difficulties involved

in proving discriminatory intent, we have held that

summary judgment motions in section 1981 cases

are governed by the well-known burden shifting

provisions laid down in McDonnell Douglas

Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817,

1824, 36 L.Ed.2d 668 (1973), and refined in Texas

Department of Community Affairs v. Burdine, 450

U.S. 248, 252-53, 101 S.Ct. 1089, 1093-94, 67

L.Ed.2d 207 (1981). See Gunby v. Pennsylvania

Electric Co., 1840 F.2d 1108, 1115 (3d Cir.1988),

72a

Appendix D

cert. denied, _U.S. __, 109 S.Ct. 3213, 106

L.Ed.2d 207 (1981); Lewis v. University of

Pittsburgh, 725 F.2d 910, 914 (3d Cir.1983), cert.

denied, 469 U.S. 892, 105 S.Ct. 266, 83 L.Ed.2d

202 (1984). Aithough we have not had occasion

to consider whether the McDonnell Douglas

formula should be applied to the leasing context,

other courts have done so, see, e.g., Seldon

Apartments v. United States Department of

Housing and Urban Development, 785 F.2d 152,

160 (6th Cir.1986) (Fair Housing Act, 42 U.S.C.

§ 3601 and § 1981 and § 1982); Phiffer v. Proud

Parrot Motor Hotel, Inc., 648 F.2d 548, 551 (9th

Cir. 1980) (§ 1982); Robinson v. 12 Lofts Realty,

Inc., 610 F.2d 1032, 1038-39 (2d Cir.1979) (Fair

Housing Act, 42 U.S.C. § 3604(a)), and we will

follow their lead.

Applying the McDonnell Douglas formula to

this context, Chauhan establishes a prima facie

case by proving that: (1) he is in a protected class;

(2) he attempted to lease the space; (3) he was a

qualified applicant; and (4) the space remained

unfilled after he applied. Once a prima facie case

is established, the burden then shifts to M. Alfieri

to offer a legitimate, non-discriminatory reason

for refusing to do business with Chauhan. If.

M. Alfieri proffers such a reason, the burden shifts

back to Chauhan to show that M. Alfieri’s

explanation is pretextual. The district court

properly followed this formula. However, in

concluding that “the inconsistencies pointed out

73a

Appendix D

by Chauhan, while perhaps demonstrating some

business inefficiency and miscommunication in

the operation of Alfieri, do not lend any support

to [Chauhan’s] contention [of pretext],” 707

F.Supp. at 166, the district court appears

inadvertently to have strayed into the factfinding

realm.

897 F.2d at 126-127.

In seeking a judgment in their tavor as a matter of law

as to the Alexanders’ claims of housing discrimination, the

Rigas assert that the Alexanders cannot establish a prima

facie case of discrimination because, based on their “abysmal

credit,” the Alexanders were not qualified to rent Apartment

No. 2 in the Rigas’ Darlington Road property. (Defendants’

Motion for Summary Judgment, p. 2). In support of this

assertion, the Rigas maintain that they always require both

spouses to be signatories on their leases, and that they

typically do credit checks on both the husband and wife.

With respect to the fact that a credit check was performed

only on Mrs. Sinha in connection with the rental of

Apartment No. 2 to Dr. and Mrs. Sinha, the Rigas contend

that the Alexanders would not have qualified for the

apartment regardless of whether a credit check had been done

on both Mr. and Mrs. Alexander or only one of them because

they both have a history of poor credit.

After consideration, the court concludes that material

issues of fact preclude a judgment in the Rigas’ favor as a

matter of law based on the Alexanders’ alleged failure to

74a

Appendix D

establish a prima facie case of discrimination.'’ Specifically,

factual disputes exist regarding the Rigas’ claim that they

always required credit checks to qualify prospective tenants.

As noted in the recitation of the undisputed facts, in response

to the Alexanders’ discovery requests, the Rigas failed to

produce any evidence to show that credit checks had been

performed on any tenant in the Rigas’ Darlington Road

property, other than Mrs. Sinha. Under the circumstances,

the Rigas’ motion for summary judgment as to the

Alexanders’ discrimination claims will be denied."*

17. For purposes of defendants’ summary judgment motion,

the court will assume that the prima facie case urged by the Rigas

accurately sets forth the prima facie case applicable to the facts of

this case. However, because the Alexanders were never even given

the opportunity to view Apartment No. 2 in the Rigas’ Darlington

Road property, let alone submit a rental application for the apartment,

the court is not convinced that the Rigas have accurately set forth

the prima fatie case applicable in this situation. See McDonnell

Douglas, 411 U.S. 792, 802 n. 13 (1973) (The facts necessarily will

vary, and the specification of the prima facie proof required from

respondent in this Title VII case is not necessarily applicable in

every respect to differing factual situations).

18. One further point should be addressed in connection with

the Rigas’ motion for summary judgment on the Alexanders’ Fair

Housing Act claim. Section 3604(d) of the Fair Housing Act

specifically makes it unlawful to represent to any person because of

race that any dwelling is not available for inspection or rental when

such dwelling is, in fact, so available, and the Alexanders have

asserted a claim against the Rigas under this section. Section 3604(d)

has been held by the United States Supreme Court to give standing

to sue to “testers,” who may have approached a real estate agent

fully expecting to receive false information and without any intention

(Cont’d)

75a

Appendix D

V

Next, the Rigas seek a judgment in their favor with

respect to the claim of the Fair Housing Partnership under

the Fair Housing Act. The Rigas maintain that the Fair

Housing Partnership lacks standing to sue in this case because

it has failed to allege a sufficient injury in fact. After

consideration, the court does not agree.

i .

With respect to its injury in this case, in the amended

complaint, the Fair Housing Partnership alleges the following

facts:

18. The [Fair Housing Partnership] has

suffered a concrete and demonstrable injury to its

interests in securing fair housing, and has suffered

a diversion of its resources in order to investigate

and redress discriminatory housing practices set

forth in the instant Complaint, in that said

previously-averred acts of housing discrimination

to the individual Plaintiffs added to the existing

workload of the [Fair Housing] Partnership, and

caused the [Fair Housing] Partnership to divert

(Cont’d)

of buying or renting a home. Havens Realty Corp. v. Coleman, 455

U.S. 373, 374 (1981). Based on the United States Supreme Court’s

decision in Havens, the court concludes that the Alexanders’ credit

history has no bearing on their claim under Section 3604(d) that the

Rigas are liable for misrepresentation in connection with the

availability of Apartment No. 2 in the Darlington Road property.

76a

Appendix D

its resources and incur administrative costs,

expenses and overhead in redressing said

individual Complaints.

19. The [Fair Housing Partnership] has

suffered further concrete injury to its interest in

that it has been denied truthful and accurate

information from Defendants as to availability of

housing, and has suffered a diversion of its

resources and out-of-pocket costs in efforts to

obtain redress for the individual Plaintiffs.

(Amended Complaint, pp. 8-9).'°

The Rigas rely on the decision of the United States Court

of Appeals for the District of Columbia Circuit in Fair

Employment Council of Greater Washington, Inc. v. BMC

Marketing Corp., 28 F.3d 1268 (D.C.Cir.1994) in support

of their motion for summary judgment as to the claim asserted

by the Fair Housing Partnership under the Fair Housing Act.

19. In support of its allegations in the amended complaint and

in opposition to the Rigas’ motion for summary judgment, the Fair

Housing Partnership submitted the affidavit of Andrea Blinn, its

Executive Director. Ms. Blinn describes, inter alia, the mission of

the Fair Housing Partnership and the methods by which it carries

out its mission. Ms. Blinn then sets forth the costs incurred to

investigate the Alexanders’ discrimination complaint, which includes

$1,200.00 for Ms. Blinn’s services, $350.00 for Michele Gittleman’s

services and $175.00 in testing expenses. (Brief in Opposition,

Exh. 1).

77a

Appendix D

In BMC Marketing, a fair employment organization and two

of its black testers brought suit alleging that an employment

agency violated 42 U.S.C. § 1981 and Title VII of the Civil

Rights Act of 1964, 42 U.S.C. 2000e et seg., when it denied

referrals to black testers, while white testers with comparable

credentials received referrals. The district court denied the

employment agency’s motion to dismiss the complaint for

want of standing, and an interlocutory appeal was permitted.

The District of Columbia Circuit held, inter alia, that the

fair employment organization had Article III standing.

However, in reaching its conclusion as to the fair employment

organization’s standing, the District of Columbia Circuit

stated that it explicitly rejected the fair employment

organization’s suggestion that the mere expense of testing

the employment agency constituted “injury in fact” fairly

traceable to the employment agency’s conduct. Although the

diversion of resources to testing might well harm the fair

employment organization’s other programs, the District of

Columbia Circuit stated that it was a self-inflicted harm

which did not result from the employment agency’s actions.

Rather, it resulted from the fair employment organization’s

own budgetary choices.”

Although the Third Circuit has not considered the issue

of whether a fair housing organization has standing to sue in

20. The statement of the District of Columbia Circuit in BMC

Marketing with respect to the standing of an advocacy group to file

suit based solely on its diversion of resources to investigate alleged

discrimination was followed by the district courts in Fair Housing

Council of Suburban Philadelphia v. Montgomery Newspapers, 1997

U.S.Dist.Lexis 27 (E.D.Pa.1997), and Fair Housing Council of

Suburban Philadelphia v. Main Line Times, 1997 U.S.Dist.Lexis

596 (E.D.Pa.1997).

78a

Appendix D

circumstances where the only injury claimed by the

organization is a diversion of its resources, other circuits

that have considered the issue have concluded that standing

exists. See, e.g., Ragin v. Harry Macklowe Real Estate Co.,

6 F.3d 898 (2d Cir.1993) (fair housing organization had

standing to sue where it established that its activities reiating

to identifying and counteracting the defendants’ advertising

practices diverted the attention of its staff members from

their regular tasks); Hooker v. Weathers, 990 F.2d 913 (6th

Cir. 1993) (organization that worked to eliminate discriminatory

housing practices had standing to sue trailer park, its manager

and unnamed co-owner of park for discrimination on basis

of familial status in violation of Fair Housing Act where

organization devoted resources to investigate defendants’

practices and alleged that it had confirmed that defendants

discriminated on the basis of familial status); City of Chicago

v. Matchmaker Real Estate Sales Center, Inc., 982 F.2d 1086

(7th Cir.1992), cert. denied, 508 U.S. 972, 113 S.Ct. 2961,

125 L.Ed.2d 662 (1993) (nonprofit corporation that served

as fair housing agency had standing to bring action based on

alleged racial steering on part of real estate sales agents,

since, by conducting investigation into activities of real estate

agency, corporation deflected its time and money from

counseling to legal efforts directed against discrimination);

Village of Bellwood v. Dwivedi, 895 F.2d 1521 (7th Cir.1990)

(only injury which need be shown to confer standing on fair

housing agency to bring housing discrimination action is

deflection of agency’s time and money from counseling to

legal efforts directed against discrimination).”'

21. Several district courts that have considered the issue of

standing when an advocacy group’s only injury is a diversion of

(Cont’d)

79a

Appendix D

The court is persuaded by the decisions of the Second,

Sixth and Seventh Circuits, as well as the district court cases

noted in footnote 21, that the Fair Housing Partnership has

standing to sue the Rigas in this case based solely on its

diversion of resources to investigate the Alexanders’ claim

of housing discrimination. The court reaches this conclusion

despite the fact that Mr. Alexander had obtained evidence

of discrimination by Mrs. Rigas before the testers from the

Fair Housing Partnership became involved in the matter on

his behalf,” and despite the fact that this case is limited to

(Cont'd)

resources have also reached a conclusion that is contrary to the

District of Columbia Circuit’s statement in BMC Marketing. See

Louisiana Acorn Fair Housing v. Quarter Housing, 952 F.Supp.

352 (E.D.La.1997) (nonprofit corporation which acted as fair

housing agency had standing to bring federal civil rights action

against timeshare resort which had allegedly discriminated against

members of identifiable groups, in which agency sought damages

based on its staff time, volunteer time, and other costs it had

expended in efforts which were thwarted by resort and its owners);

Gaskin v. Commonwealth of Pennsylvania, 1995 WL 154801

(E.D.Pa.1995) (where a defendant’s violations of the law cause a

non-profit advocacy organization to use its own resources to remedy

the violation, the organization suffers an injury in fact); Pumphrey

v. Stephen Homes, Inc., 1994 WL 150947 (D.Md. 1994), aff'd in

part and rev'd in part, (4th Cir. 1997) (fair housing organization

had standing to sue where it devoted significant time and resources

by sending out testers to confirm a pattern of discrimination, thereby

diverting essential funds from its other activities).

22. As noted in the undisputed facts, prior to the testers being

asked by the Fair Housing Partnership to contact Mrs. Rigas about

the availability of the apartment in the Darlington Road property,

(Cont'd)

80a

Appendix D

an apparent isolated incident of discrimination by the Rigas.”

However, it should be noted that a diversion of its resources

1s not the only basis for the Fair Housing Partnership’s claim

against the Rigas under the Fair Housing Act in this case.

The Fair Housing Partnership also alleges that the Rigas

violated its right to truthful and accurate information

regarding the availability of Apartment No. 2 in their

Darlington Road property based on the information provided

by Mrs. Riga to its black tester, Daria Mitchell.” If

(Cont'd)

Mr. Alexander asked his friend, Robin McDonough, a white female,

to call Mrs. Rigas about the apartment. Contrary to the information

provided to the Alexanders by Mrs. Rigas, Ms. McDonough was

told that the apartment was available, indicating possible

discrimination.

23. The Rigas attempted to distinguish several of the cases

relied upon by the Fair Housing Partnership in support of its position

that a diversion of resources is sufficient to establish standing on

the part of a fair housing organization by noting that the

discrimination in those cases was more widespread than the alleged

discrimination in this case, involving either racial steering or

discriminatory advertising practices. However, the court can find

no support for such a distinction. In both situations, resources are

diverted. The only difference is the extent of the diversion.

24. As noted in the Testing Summary completed by Ms. Blinn,

which was submitted by the Rigas in support of their motion for

summary judgment, Mrs. Rigas told Ms. Mitchell on September 30,

1995 that she was going to rent Apartment No. 2 in the Darlington

Road property to “Jeff,” and that she would call Ms. Mitchell if an

apartment become available. Despite the apparent failure of “Jeff”

to rent Apartment No. 2, there is no indication that Mrs. Rigas ever

attempted to contact Ms. Mitchell to inform her of its availability.

(Motion for Summary Judgment, Exh. O).

8la

Appendix D

established, this action violates Section 3604(d) of the Fair

Housing Act. Under the circumstances, the motion of the

Rigas for a judgment in their favor as to the claim asserted

by the Fair Housing Partnership under the Fair Housing Act

will be denied.

An order follows.

82a

Appendix D

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

Civil Action No. 96-49 -

RONALD ALEXANDER, FAYE ALEXANDER

and the FAIR HOUSING PARTNERSHIP

OF GREATER PITTSBURGH, INC.,

Plaintiffs,

VS.

JOSEPH RIGA and MARIA A. RIGA,

a/k/a CARLA AGNOTTI,

Defendants

ORDER

AND NOW, this 10th day of March, 1998, in accordance

with the foregoing memorandum, it is ORDERED that the

motion of defendants, Joseph Riga and Maria A. Riga, for

summary judgment pursuant to Fed.R.Civ.P. 56 be, and

hereby is, denied.

s/ William L. Standish

William L. Standish

United States District Judge

83a

APPENDIX E — ORDER OF THE UNITED STATES

COURT OF APPEALS FOR THE THIRD CIRCUIT

DENYING PETITION FOR REHEARING

DATED APRIL 19, 2000

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Nos. 98-3597 and 98-3622

RONALD ALEXANDER; FAYE ALEXANDER;

FAIR HOUSING PARTNERSHIP OF

GREATER PITTSBURGH, INC.,

Appellants in No. 98-3597

Vv.

JOSEPH RIGA; MARIA A. RIGA

a/k/a Carla Agnotti

RONALD ALEXANDER; FAYE ALEXANDER;

FAIR HOUSING PARTNERSHIP OF

GREATER PITTSBURGH, INC.,

y,

JOSEPH RIGA; MARIA A. RIGA

a/k/a Carla Agnotti

Appellants in No. 98-3622

84a

Appendix E

Present: BECKER, Chief Judge,

SLOVITER, MANSMANN, GREENBERG, SCIRICA

ALITO, ROTH, MCKEE, RENDELL and BARRY

Circuit Judges.

SUR PETITION FOR REHEARING

The petition for rehearing filed by appellees/cross-

appellants in the above entitled case having been submitted

to the judges who participated in the decision of this court

and to all other available circuit judges of the circuit in

regular active service, and no judge who concurred in the

decision having asked for rehearing, and a majority of the

circuit judges of the circuit in regular active service not

having voted for rehearing by the court in banc, the petition

for rehearing is denied. Chief Judge Becker would have

granted rehearing.

BY THE COURT,

s/ Carol Los Mansmann

Circuit Judge