Housing And Civil Enforcement Cases Documents

UNITED STATES OF AMERICA                                                                                PLAINTIFF

AND

GAIL GRAHAM                                                                                PLAINTIFF-INTERVENOR

VS.                                                                                           CIVIL ACTION NO. 3:99-CV-556BN

L.T.   JACKSON, L.T.   JACKSON TRUST                                                             DEFENDANTS
AND BETTYE HART

This cause is before the Court on the Motion of the United States of America for Civil Penalties and Injunctive Relief. The Court has considered the motion, response, rebuttal, attachments to each, and supporting and opposing authority and finds that the motion should be granted in part and denied in part.

On August 9, 1999, the United States of America ("Government") filed a lawsuit in this Court alleging that Defendants L.T. Jackson and L.T.  Jackson Trust had violated the Fair Housing Act ("FHA"), codified at 42 U.S.C. § 3601, et seq. by discriminating against individuals on the basis of sex with regard to rental housing. The Government ultimately tried the case on behalf of twenty-one women, all of whom were allegedly victims of the complained of housing discrimination. Gail Graham intervened as a Plaintiff in the lawsuit.

The case was tried to a jury beginning on March 19, 2002, through March 28, 2002. By a Verdict by Special Interrogatories, the jury found in favor of the Government and Graham on the claims of hostile environment, quid pro quo harassment, and "interference, coercion, or intimidation" under 42 U.S.C. § 3617, and in favor of the Government on the claim of disparate treatment. The jury awarded each plaintiff compensatory damages ranging from $1.00 to $5,000.00 for a total of $41,708. Each plaintiff was also awarded punitive damages ranging from $750.00 to $22,500.00 for a total of $409,500.00. The total amount of damages awarded was $451,208.00.

The Government now moves for civil penalties and injunctive relief against L.T.  Jackson and L.T.  Jackson Trust pursuant to 42 U.S.C. § 3614(d).

The Government has moved for civil penalties totaling $110,000.00, being the maximum civil penalty of $55,000.00 against each Defendant, ⁽¹⁾ and injunctive relief against L.T.  Jackson and L.T.   Jackson Trust pursuant to 42 U.S.C. § 3614(d). This statute provides, in relevant part:

In a civil action under subsection (a) or (b) of this section, the court-

(A)  may award such preventative relief, including a permanent or temporary injunction, restraining order, or other order against the person responsible for a violation of this subchapter as is necessary to assure the full enjoyment of the rights granted by this subchapter;

(B)  may award such other relief as the court deems appropriate, including monetary damages to persons aggrieved; and

(C) may, to vindicate the public interest, assess a civil penalty against the respondent-

(i) in an amount not exceeding $5[5],000, for a first violation; and

(ii) in an amount not exceeding $l[l]0,000, or any subsequent violation.

42 U.S.C. § 3614 (d) (1)

The of award of civil penalties is similar to the award of punitive damages as both are intended to exact punishment for wrongdoing. See Tull v. United States, 481 U.S. 412, 422 n.7 (1987) . The difference is that punitive damages are awarded to injured plaintiffs while civil penalties are awarded to the Government. The Court, "[w]hen determining the amount of a penalty against a defendant ... should consider the nature and circumstances of the violation, the degree of culpability, any history of prior violations, the financial circumstances of that defendant and the goal of deterrence, and other matters as justice may require." Smith & Lee Assoc. v. City of Taylor. Mich., 102 F.3d 781, 798 (6th Cir. 1996) (quoting House Comm. on the Judiciary, Fair Housing Amendments Act of 1988, H.R. Rep. No. 711 (1988), reprinted in 1988 U.S.C.C.A.N. 2173, 2179). The Court may also "take the jury's award of punitive damages into account in making its discretionary decision whether to award civil penalties." United States v. Balistrieri, 981 F.2d 916, 936 (7th Cir. 1992)

From the evidence presented at trial which included, inter alia, that Defendant L.T.  Jackson had repeatedly committed acts of sexual harassment against female tenants beginning in 1994 and that some of his victims were teenaged girls, the jury found that Defendants had discriminated on the basis of gender and had sexually harassed female tenants. The jury, to punish this conduct, awarded Plaintiffs punitive damages totaling $409,500.00.

The Court finds, based on the Chapter 13 bankruptcy petition filed by Defendants on March 15, 2002, that it is unlikely that Plaintiffs will recover all of the damages they were awarded. ⁽²⁾ The Court additionally finds that Defendants would likely be unable to pay any civil penalty assessed by the Court. Further, in the event civil penalties are awarded, the Government would be entitled to payment through the Chapter 13 bankruptcy plan which could result in the victims receiving even less than the amount currently proposed. The Court finds that to maximize the amount of damages the injured plaintiffs may recover in the subject bankruptcy proceeding, civil penalties in favor of the Government should not be awarded. The Court additionally finds that an injunction against Defendants will adequately deter them from future gender-based discrimination, including sexual harassment, against female tenants.

The Court, by an exercise of its discretion, and upon balance of the relevant factors, finds that the Motion of the Government for Civil Penalties under 42 U.S.C. § 3614(d) (1) (c) should be denied.

The Government also requests that the Court award injunctive relief against Defendants pursuant to 42 U.S.C.§ 3614(d) (1) (A). The Court finds that such relief is warranted. The United States Court of Appeals for the Fifth Circuit has found that. injunctive relief "should be aimed toward twin goals-insuring that no future violations of the [Fair Housing] Act occur and removing any lingering effects of past discrimination." United States v. Jamestown Center-in-the-Grove Apartments, 557 F.2d 1079, 1080 (5th Cir. 1977) . Additionally, injunctive relief should be tailored to address the particular facts and circumstances of each case. Id. The Court will award injunctive relief as follows:

(1)   Defendants shall not participate in t~he management of any residential rental properties subject to the Fair Housing Act, as amended, 42 U.S.C. § 3601, et seq., which is currently owned, or acquired in the future, in whole or in part by them.

(2)   Defendants shall obtain an independent management firm within sixty (60) days and utilize same to run their landlord-tenant businesses, including present properties and any properties acquired in the future. The independent management firm shall have exclusive management authority concerning the showing of rental units to prospective tenants, accepting applications for prospective tenants (or otherwise having face-to-face contact with potential tenants during the application process), inspections (except as otherwise provided), the collection of rent, evictions, rentals (except rental increases), repairs, maintenance, and violations of tenant lease obligations.

(3)   The independent management firm shall not be owned by, employ, or utilize any individual or company which is related to L.T.  Jackson by blood or by marriage.

(4)  The independent management firm shall be the entity that maintains any and all contact with tenants, and prospective tenants, including but not limited to showing apartments, executing leases, applications and other housing documents, collecting rent, taking repair requests, or making repairs.

(5)   Defendant L.T. Jackson is not prohibited from visiting any rental property he owns for a purpose other than engaging in management activities, however, L.T.  Jackson shall not initiate contact with any female tenants during such visits. Upon notice from the independent management firm that a rental unit is unoccupied, vacant and not under lease, L.T.  Jackson shall be allowed to visit these rental units for the purpose of inspection. Under these circumstances, L.T.  Jackson shall not initiate any form of verbal or other contact with female tenants of other rental units.

(6)  Defendants will not take any retaliatory action against any Plaintiff, aggrieved party, or witness in this case. Nothing in this Order shall prohibit the independent management firm from seeking redress through the courts to evict or collect monies owed by such tenants who occupy residential rental properties owned by Defendants.

(7)  Defendant L.T.  Jackson shall not sexually harass any female tenant of any rental unit owned by him or the L.T.  Jackson Trust.

For the foregoing reasons:

IT IS THEREFORE ORDERED that the Motion of the United States of America for Civil Penalties and Injunctive Relief [125-1] is hereby granted in part and denied in part.

A Final Judgment in accordance with Rule 58 of the Federal Rules of Civil Procedure shall be entered this day.

SO ORDERED this the___ day June, 2002.

3:99-cv-00556

Scott P. Moore,  Esq.
U.  S . DEPT. OF JUSTICE
Housing & Civil Enforcement Section
P. 0. Box 65998
Washington DC 20035-5998

1. Pursuant to 28 U.S.C. § 2461, which allows the head of each federal agency to adjust civil monetary penalties to account for inflation, the maximum civil penalties under 42 U.S.C. § 3614(d) are currently $55,000 for a first violation and $110,000 for any subsequent violation. See 28 C.F.R. § 85.3(b) (3) (2001).

2. The Government alleges that under the Chapter 13 bankruptcy plan proposed by Defendants, each Plaintiff would receive one percent (1%) of the total amount of damages she was awarded.