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A Missouri federal court has ruled on the admissibility of expert testimony offered in a lawsuit for alleged violations of the federal Fair Housing Act.
In 1996, the City of Florissant, Missouri ("City"), a suburb of St. Louis, became concerned that real estate brokerages within the City were engaging in discriminatory practices. The City hired the Metropolitan St. Louis Equal Housing Opportunity Council ("Housing Group") to investigate whether brokers were directing buyers to neighborhoods because of their race. The City retained the Housing Group for a follow-up investigation in 1997.
The Housing Group conducted an investigation into whether the real estate brokerages were engaging in unlawful "racial steering" in violation of the federal Fair Housing Act ("Act"). The Act attempts to eliminate discrimination against protected classes in the housing marketplace. The investigation involved sending out separate teams of white and black testers with nearly identical criteria (i.e., income, familial status, appearance, and housing requirements), except that the testers were of different races. The testers would pretend to be potential home buyers and would obtain the housing information offered by the brokerages. A form would be filed out by the testers following their visit to each of the real estate brokerages.
Based on the two years of testing, the Housing Group concluded that two offices of the Gordon A. Gundaker Real Estate Company ("Brokerage") had engaged in unlawful racial steering. The Housing Group filed a lawsuit in United States District Court, Eastern District of Missouri, against the Brokerage. Both parties filed motions seeking to exclude the testimony of each side's experts.
To determine whether the expert testimony was admissible, the court used the standard created by the Supreme Court of the United States in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and elaborated upon by the Court in subsequent decisions. The court rejected the argument by the Housing Group that Daubert only applied to scientific evidence. Instead, the court stated that in Daubert and subsequent cases, the Court had ruled that federal trial courts must act as "gatekeepers" in determining the admissibility of testimony which is scientific, technical, or involves other specialized knowledge and which is designed to assist the jury. The Court has set forth a number of factors a trial court should use in determining the "reliability" and "relevancy" of the offered expert testimony. The factors to be used by a trial court are: whether the expert's methodology has been tested; whether the technique has been subjected to peer review; whether the technique has a known rate of error; and whether the technique has been generally accepted within the scientific community.
The court first evaluated testing methods used by the Housing Group to determine if their testing methods had the requisite reliability and scientific validity. The court ruled that the testing protocol employed by the Housing Group was "seriously flawed and lacked any reasonable indicia of reliability." Among other problems, the court found: the instructions given to the testers were ambiguous; the tests were conducted in an inconsistent manner; and the tests failed to follow the testing protocols established by the U.S. Department of Housing and Urban Development. While the court stated the flawed testing methods used by the Housing Group did not render the testimony of their experts inadmissible, it did have relevance to their conclusions.
The court then considered the Brokerage's challenges to the Housing Group's experts. The first challenge was to the Executive Director of a national fair housing group. She testified that race could be conclusively identified over the phone. Using the Daubert criteria, the court ruled that her opinion was inadmissible, since she had no scientific training relevant to this field nor could she identify any sources which demonstrated that her theory had any general acceptance outside of the fair housing community.
The court also ruled inadmissible the testimony of three experts who opined that that the Brokerage's experts had used the wrong criteria in assessing the Housing Group's testing results. The court ruled that two of the experts lacked training in the social sciences or in statistics, and therefore were not qualified to offer expert opinions on the proper testing methods. The third expert did have the relevant scientific training. However, the court also ruled that his testimony was inadmissible, since the expert had failed to assess the data gathered from Housing Group's testers, instead assuming that this data was valid. Using the flawed data undermined the reliability of his opinions. The court also ruled that a lawyer's testimony about the inadequacy of the Brokerage's training methods was inadmissible because it had no relevancy to the proceedings, since the Brokerage's training methods could not violate the Act. Therefore, the court ruled that the challenged opinions of the Housing Group's experts were inadmissible.
The court next considered the challenges made by the Housing Group to the testimony of the Brokerage's three experts. Using the Daubert criteria, the court ruled that the testimony of both a social scientist and a statistician retained by the Brokerage were admissible as expert testimony, as both experts met the criteria used to verify that such testimony was both scientifically valid and reliable. The court also ruled that the testimony of a former President of the Missouri Association of REALTORS® concerning the ethical and professional standards of Missouri's professional real estate organizations was admissible, since he was qualified to testify on this subject and his testimony would assist the jury. Thus, the court ruled admissible the testimony of the three experts retained by the Brokerage.
Metro. St. Louis Equal Hous. Opportunity Council v. Gordon A. Gundaker Real Estate Co., 130 F. Supp. 2d 1074 (E.D. Mo. 2001).
Editor's Note: Following the court's ruling above, the Brokerage filed a motion seeking to exclude the Housing Group's test results, based on the court's prior determination that the test results were "seriously flawed and lacked any reasonable indicia of reliability." The court denied the Brokerage's motion, ruling that the standard for admissibility of the test results was different than the admissibility of expert testimony. The court stated that it was up for the jury to decide on the credibility of the test results and whether the test results demonstrated that the Brokerage engaged in racial steering. See Metro. St. Louis Equal Hous. Opportunity Council v. Gordon A. Gundaker Real Estate Co., 132 F. Supp. 2d 1210 (E.D. Mo. 2001).