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A federal appeals court has ruled that a fair housing organization could recover damages for diverting its resources to fight discriminatory racial steering by a real estate company, even if a jury determined that the individual testers used by the organization were not discriminated against by the company's representatives.
The Central Alabama Fair Housing Center ("Housing Group") is an organization dedicated to eliminating discrimination from the housing market. As part of its efforts, the Housing Group investigates discrimination complaints. The Housing Group had received a number of complaints of racial steering directed at Lowder Realty Company ("Company"), and to evaluate the validity of these complaints, it sent two black and two white teams of testers ("Testers"). The Testers were sent to two different offices of the Company, and they asked to see houses in areas that were either mixed or were composed of residents predominantly of the opposite race (i.e., the white testers asked to see homes in predominantly black neighborhoods, and vice versa). While the Company's representatives showed them homes in the requested areas, the Testers testified that the representatives made unsolicited efforts to steer the Testers toward other neighborhoods which were populated by people of their own race.
The Housing Group and Testers brought a lawsuit against the Company for violations of the federal Fair Housing Act ("Act"). The Act attempts to eliminate discrimination against protected classes in the housing marketplace. The trial court instructed the jury that the Housing Group could only recover damages if the Testers were the victims of discrimination. The jury ruled in favor of the Company. The Housing Group and the Testers appealed.
The United States Court of Appeals, Eleventh Circuit, reversed the trial court and ordered a new trial. The Housing Group and the Testers raised two issues on appeal. First, the Testers argued that the trial court improperly refused to allow them to use a peremptory challenge to strike a juror. A peremptory challenge gives a party the right to challenge a potential juror's selection without stating a cause. The Supreme Court of the United States ruled in Batson v. Kentucky, 476 U.S. 79 (1986), that race was an impermissible basis for striking a juror. The Testers had used two of their three peremptory challenges to strike two white jurors (11 of the 14 members of the jury panel were white). The Company challenged the Testers' use of the peremptory challenge as violating the Batson decision, and the trial court ruled that the Company had made a prima facie case under Batson because both challenges made by the Testers were to white jurors. Under Batson, the Testers were required to demonstrate a race neutral explanation for striking the two jurors. The trial court accepted the race neutral rationale offered for striking one of the jurors (he was a member of the National Rifle Association), but found that the reasons offered for striking the second juror were not race neutral, and so refused to allow the Testers to strike this juror. The Eleventh Circuit ruled that simply because the Testers struck two jurors with the same skin color did not make out a prima facie case of discrimination in its use of the peremptory challenges, especially since almost all of the jurors on the panel were white. Therefore, the trial court reversed the striking of the second juror and ordered a new trial.
Next, the court considered the instructions that the jury had received from the trial court. The instructions had stated that in order for the Housing Group to recover, the jurors would have to determine that the Testers would succeed on their discrimination claims. The court, looking to decisions made by other federal appeals courts in the Second, Third, and Seventh Circuits, ruled that the trial court's instruction was erroneous. It ruled that the Housing Group could indeed recover damages caused by the Company's unlawful discrimination towards the Testers. The damages which could be recovered would be the actual funds the Housing Group spent combating the Company's unlawful conduct. Therefore, if the jury did not rule in favor of the Testers, the damages which could be recovered would be very limited. Nevertheless, the court ruled that the Housing Group's recovery was not contingent on the finding of discrimination against the Testers; it was only contingent on the jury finding that the Housing Group spent its funds combating unlawful discrimination. Thus, the court vacated the jury verdict and remanded for a new trial.
Cent. Alabama Fair Housing Ctr. v. Lowder Realty Co., Inc., 236 F.3d 629 (11th Cir. 2000).