General Practice, Solo & Small Firm DivisionMagazine

Affordable Housing and Community Development Law

Compensatory and Punitive Damages in Fair Housing Cases

By Daniel W. Barkley

The heart of most fair housing litigation involves the issue of liability, specifically whether a housing provider violated the antidiscrimination laws. However, the issue of damages is critical to the success or failure of these laws. The degree to which the antidiscrimination statutes ultimately are successful depends in part on whether the damage amounts awarded justifiably vindicate the victims of discrimination and deter housing providers from discriminatory practices.

Both the Fair Housing Act and section 1982 of the Civil Rights Act of 1866 allow actual and punitive damages. Although there are no statutory limits on the amount of damages awarded under section 1982, the Fair Housing Act may impose limits, depending on the forum in which the complaint is raised. There are no limitations on the amount of damages in judicial proceedings under the Fair Housing Act; however, the size of awards will be capped if the complaint is handled by an administrative law judge. When a complaint is filed with HUD and the department’s attempts at conciliation fail, HUD may issue a formal charge and the dispute will be presented to an administrative law judge, unless one of the disputants elects to go to court. If the charge is sustained, the administrative law judge may award actual damages and assess a civil penalty of up to $10,000 for the first discriminatory practice, up to $25,000 if the respondent has committed another violation within the previous five years, or up to $50,000 if the respondent committed two or more violations within the previous seven years.

Litigants generally seek compensatory and punitive damages. Compensatory damages include actual out-of-pocket expenses or losses, often referred to as "special damages," which range from actual expenses incurred by the discrimination, such as moving and storage expenses, to losses that directly result from the discrimination, such as having to move into more expensive alternate housing or inferior alternate housing. Compensatory damages also include "general damages" for humiliation, embarrassment, or emotional distress. These damages are available "for distress which exceeds the normal transient and trivial aggravation attendant to securing suitable housing." If the harm is more properly described as an "inconvenience," courts are less inclined to award damages.

Several threshold matters govern claims for compensatory damages. First, and most important, to be recovered damages must be proven. This issue is particularly sticky in the case of damages arising from emotional distress. Several courts have expressed the sentiment that "[c]ompensatory damages for a violation of civil rights in general must be more than nominal," thus implying that a violation of the Fair Housing Act creates a presumption that the victim has been humiliated by the discrimination. On the other hand, most courts hold that the "plaintiff must actually prove that he suffers from emotional distress and that the discrimination caused the distress." No court will, however, overlook a clear indication that the victim has not been harmed emotionally; although a court might be unwilling to provide only nominal damages, the amount of the compensatory damages will likely reflect the lack of evidence. However, a court should not completely deny damages even in the absence of evidence of harm. Once liability is established, the plaintiff is entitled at least to nominal damages.

Second, the actual damages must be proximately caused by the discriminatory conduct. In United States v. Scott, 809 F. Supp. 1404 (D. Kan. 1992), the plaintiff sought damages for a crop loss resulting from his inability to perform certain farm chores because of his involvement in the litigation. The court denied the damages because the plaintiff failed to establish that the crop loss was due to the litigation rather than intervening factors such as the weather.

Finally, in instances where there is the ability to mitigate damages, courts will expect plaintiffs to do so. For example, in Young v. Parkland Village, Inc., 460 F. Supp. 67 (D. Md.), a landlord initially denied housing to an African American woman, but offered her the apartment several months later. In assessing actual damages, the court refused to award damages covering the period after plaintiff was offered the unit. The court stated that the plaintiff "would not be entitled to build up the amount of damages to be awarded her by declining to accept what she was seeking from the outset . . . . The reasons ascribed by plaintiff for not accepting an apartment in August 1975 would not justify her failure to mitigate damages."

Courts may also award punitive damages as a result of discriminatory conduct. Courts describe the standard for awarding punitive damages in a variety of ways ranging from "malicious" to "wilful and wanton." However, a showing of malice or personal animosity is not necessary for a court to award punitive damages; rather it is a reckless disregard for another’s rights that triggers the award.

Courts may look at several factors in deciding to award punitive damages and in determining the amount of the award. The egregiousness of the conduct necessarily influences the amount of the award as does the frequency of the discrimination; also important is whether the discrimination was a single, isolated incident or part of a continuing pattern and practice. Courts are also interested in the relative wealth of the housing provider. A fundamental goal of a punitive damage award is to punish but not bankrupt the wrongdoer. If there is evidence of conciliation by the housing provider, the court may take that into account in determining the amount of the punitive award. Courts may also consider the "advisability" of the deterrence factor in fashioning punitive damages.

In Woods-Drake v. Lundy, 667 F. 2d 1198 (5th Cir. 1982), the appellate court directed the district court to determine an appropriate amount of punitive damages against a landlord who evicted tenants because they entertained black guests. The appellate court noted all the factors that weighed in favor of the imposition of punitive damages: the tenants had warned the landlord that his eviction attempt violated the Fair Housing Act, but the landlord disregarded their advice; the landlord expressed animus by using racial epithets; and he had a history of racial discrimination. The court concluded by ordering the district court to assess an amount of punitive damages against the landlord "sufficient to deter him from
continued violation of the civil rights laws."

The underlying message in the assessment of damages is that discrimination cannot and should not pay. Just as equitable remedies seek to rectify discriminatory practices, damages compensate the victims of the practices and punish those who choose to discriminate. Courts must vigorously enforce the prohibitions of the Fair Housing Act and the other antidiscrimination statutes, and they cannot shy away from awarding fair and just damages to the victims of discrimination. A law is ultimately of no effect if it is not enforced, and there can be no doubt that the imposition of appropriate damages, both compensatory and punitive, is a highly visible and compelling enforcement mechanism of fair housing laws.

Daniel W. Barkley is an attorney with Legal Services of Greater Miami, Inc., and a regular contributor to the Journal of Affordable Housing & Community Development Law.

 

- This article is an abridged and edited version of one that originally appeared on page 218 in the Journal of Affordable Housing & Community Development Law, Spring 1998 (7:3).

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