REVISED June 2, 2000

                     UNITED STATES COURT OF APPEALS
                          For the Fifth Circuit



                                 No. 98-31351



                LOUISIANA ACORN FAIR HOUSING; GENE LEWIS,

                                 Plaintiffs-Appellees-Cross-Appellants,

                                     VERSUS

                                DANNY LEBLANC,

                                       Defendant-Appellant-Cross-Appellee.



              Appeals from the United States District Court
                  For the Western District of Louisiana


                                 May 15, 2000

Before KING, Chief Judge, and DUHÉ and DeMOSS, Circuit Judges.

DUHÉ, Circuit Judge:

       Danny LeBlanc appeals a jury's award of punitive damages to

Gene Lewis, compensatory damages to Louisiana ACORN Fair Housing,

Inc.   (the     “Appellees”),    and    the   district   court's   award   of

attorney's fees to Appellees.             The Appellees also appeal the

district court's attorney's fees award.           We reverse and vacate the

jury's punitive damage award to Lewis, its compensatory damage

award to ACORN, and the district court's attorney's fees award. We

affirm all other issues.

                                I.   BACKGROUND
       Gene Lewis (“Lewis”), who is black, called Danny LeBlanc

(“LeBlanc”)     on    January     2,   1996,      in   response       to    a     newspaper

advertisement regarding the rental of a one-bedroom apartment in

Lake   Charles,      La.       LeBlanc     owns    and    rents   eleven          furnished

apartment units.        Lewis then went to view the apartment and make

the    $100   deposit        LeBlanc   had       requested.       A    tenant,        Betty

Richardson, showed Lewis the apartment. Richardson told Lewis that

she did not think LeBlanc would rent to him because LeBlanc was

prejudiced.

       Lewis then asked to speak to LeBlanc.                 When LeBlanc arrived,

he allegedly told Lewis that “I just don't rent to you people.”

When Lewis asked what LeBlanc meant by “you people,” LeBlanc stated

“black, color[ed], Negro, whatever you call yourself, I don't rent

to y'all.”     LeBlanc contends that he did not rent to Lewis because

Lewis was arguing with Richardson and, therefore, he did not like

Lewis' attitude.           Lewis later consulted Louisiana ACORN Fair

Housing,      Inc.    (“ACORN”),       a   private        nonprofit        fair     housing

organization,        which     conducted        testing    that   confirmed          Lewis'

allegation that LeBlanc discriminated against prospective tenants

based on race.

       Lewis and ACORN sued LeBlanc under the Federal Fair Housing

Act, 42 U.S.C. § 3601 et. seq. (“FHA”), and under the Louisiana

Open Housing Act, La. Rev. Stat. Ann. § 51:2601 et. seq (West

1999). This suit was later consolidated with a suit brought by the

United States against LeBlanc also under the Federal Fair Housing

                                            2
Act.    The two cases were later severed for trial purposes because

the    United   States    was    seeking     injunctive    relief,    which     it

subsequently won, and Lewis and ACORN were seeking monetary relief.

       A jury trial was held and the jury verdict is the centerpiece

of this appeal.          The jury first concluded that LeBlanc made

statements to Lewis indicating an intent not to rent apartments to

black people.    The jury then found that LeBlanc refused to rent an

apartment to Gene Lewis and that race or color was an effective

reason for that refusal.

       The Jury awarded Lewis no compensatory or nominal damages but

awarded him $10,000 in punitive damages.                  The jury based its

punitive damages award on its finding that LeBlanc's refusal to

rent an apartment to Lewis was motivated by ill will, malice, or a

desire to injure Lewis, or a reckless or callous disregard for

Lewis' legal rights. The jury awarded ACORN $1,076 in compensatory

damages but did not award it nominal or punitive damages.                      The

district court later awarded           the Appellees $10,000 in attorney's

fees pursuant to 42 U.S.C. § 3613(c)(2).1

       Although the district court provided detailed instructions

regarding damages to the jury, it did not specify whether a

punitive damages     award      must   be    predicated   upon   a   nominal    or


       1
         The FHA allows a prevailing party to recover reasonable
attorney's fees and costs. The district court held that both Lewis
and ACORN were prevailing parties under the Act because the jury
found that LeBlanc had violated the FHA even though it did not
award Lewis any actual damages.

                                         3
compensatory damages award.        The court made clear that if the jury

determined that LeBlanc violated the FHA it may award compensatory

and/or nominal damages.      During its deliberations, the jury asked

the court for definitions of compensatory and nominal damages. The

judge   then   read    definitions     to   the   jury   from   Black's   Law

Dictionary.    The judge said “[c]ompensatory damages are such as

will compensate the injured party for the injury sustained and

nothing more, such as will simply make good or replace the loss

caused by the wrong or injury, damages awarded to a person as

compensation, indemnity or restitution for harm sustained by him.”

Regarding nominal damages, the judge said, “[n]ominal damages are

a trifling sum awarded to a plaintiff in an action where there is

no substantial loss or injury to be compensated, but still the law

recognizes a technical invasion of his rights or a breach of the

defendant's duty, or in cases where, although, there has been a

real injury, the plaintiff's evidence entirely fails to show its

amount.”

                             II.     DISCUSSION

A.   Punitive Damages

     LeBlanc contends that we should vacate Lewis' punitive damages

award because the jury awarded Lewis neither compensatory nor

nominal damages.      Whether a plaintiff suing under the Federal Fair

Housing Act may receive punitive damages absent compensatory or

nominal damages is an issue of first impression in this Circuit.



                                       4
We review this legal question de novo.

       The text of the Federal Fair Housing Act does not provide us

with an easy answer.     Section 3613(c) of the FHA provides that “(1)

In a civil action under subsection (a) of this section, if the

court finds that a discriminatory housing practice has occurred or

is about to occur, the court may award the plaintiff actual and

punitive damages.”        The FHA is silent as to whether punitive

damages may be awarded absent actual damages.               The text neither

conditions a punitive damage award upon an award of actual damages

nor does it endorse the jury finding in this case.

       The FHA's legislative history provides little guidance.               The

United    States   Department      of    Justice,    as   Amicus    Curiae   for

Appellees, relies heavily on Congress's 1988 amendments to the FHA.

In an effort to strengthen enforcement of the FHA, Congress removed

the $1,000 limitation on punitive damage awards that had been part

of the Act since it was passed in 1968.             A House Committee stated

that the limitation on damages “served as a major impediment to

imposing an effective deterrent on violators and a disincentive for

private persons to bring suits under existing law.”                H.R. Rep. No.

711, 100th Cong., 2d Sess. 15 (1988).               The United States argues

that   imposing    a   requirement      that   compensatory   damages     are   a

necessary predicate to an award of punitive damages would frustrate

Congress' purpose made clear in the 1988 amendments lifting the

punitive damage limit.       While the United States is correct to note

that   punitive    damages   are   a    very   important    component    behind

                                         5
enforcement of the FHA, the legislative history neither supports

nor discredits a punitive damages award absent actual damages.

     Under these circumstances, we must apply the federal common

law to fill this gap in the FHA which Congress has left unanswered.

Courts create federal common law when it is necessary to effectuate

the intent behind a federal statute.           Erwin Chemerinsky, Federal

Jurisdiction, § 6.3 at 353 (1994).             When applying civil rights

statutes, federal common law must be applied to effect uniformity,

“otherwise the Civil Rights Acts would fail to effect the purposes

and ends which Congress intended.”         Basista v. Weir, 

,

86 (3d. Cir 1965).    Thus, where a cause of action arises out of a

federal statute, federal, not state, law governs the scope of the

remedy available to plaintiffs.          Carpenters Dist. Council of New

Orleans & Vicinity v. Dillard Dept. Stores, Inc., 

,

1288 (5th Cir. 1994).

     Based on these federal common law principles, we must assess

both the FHA and other federal civil rights laws to determine

whether a punitive damage award may stand absent a nominal or

compensatory award.       As the Fourth Circuit noted, “[t]here is no

established federal common law rule that precludes the award of

punitive damages     in   the   absence   of    an   award   of   compensatory

damages.”   People Helpers Found. Inc. v. Richmond, 

,

1326 (4th Cir. 1993).      We must determine whether there is a common

law rule allowing such a result.               The Fifth Circuit has not

addressed this question as it applies to the FHA and decisions by

                                     6
other circuits provide a variety of different answers.

     The two most recent cases come from the Third and Fourth

Circuits.   In Alexander v. Riga, Nos. 98-3597, 98-3622, 

(3d. Cir. Mar. 22, 2000), a jury found that the defendant

violated the FHA when he denied rental housing to the plaintiffs

based on race.   However, the jury did not award actual damages.

The district court then declined to submit the issue of punitive

damages to the jury.    The Third Circuit reversed this decision

stating: “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.”     

(citing Curtis v.

Loether, 

(1974); 

)   (emphasis

added).   The Third Circuit additionally noted that a FHA violation

is all that is needed to establish liability.   Id.2

     The Fourth Circuit dealt with a similar question when a jury

in a FHA case awarded one dollar in punitive damages but no

compensatory damages.   The Fourth Circuit concluded that “in the

absence of statutory language to the contrary” punitive damages are

not recoverable unless predicated upon an award of actual damages.

People Helpers Found., 

.     Nevertheless, we


     2
        Although the Third Circuit suggests that a constitutional
violation is a necessary predicate for a punitive damages award
absent an actual damages award, the court reversed the district
court without finding that a constitutional violation had taken
place.

                                 7
respectfully suggest that the Fourth Circuit's basis for this

holding is flawed.      First, the court did not rely on any civil

rights cases in reaching its decision.        

     A survey

of cases interpreting federal civil rights laws is essential, in

our view, because of the need to maintain a uniform federal common

law.     Second, the Fourth Circuit noted that a majority of the 50

states     prohibit   punitive   damage    awards   when   there    is   no

compensatory award.     

   Although state law may be useful

in articulating a policy for our interpretation of federal common

law, it is federal law that must be the centerpiece of our decision

not state law.

       Appellees contend that two other cases support upholding

Lewis' punitive damages award.     In Fountila v. Carter, 

(9th Cir. 1978), a jury awarded one dollar in actual damages and

$5,000 in punitive damages.      The court noted in dicta that “it has

in fact been noted that a finding of actual damages is not a

condition to the award of punitive damages under the Civil Rights

Act of 1968.”    

(citing Rogers v. Loether, 

,

1112 n. 4 (7th Cir. 1972), aff'd sub nom. Curtis v. Loether, 

(1974)).     This decision is not entirely on point because

the jury did award a nominal award in addition to punitive damages.

Moreover, the case relies on Rogers v. Loether.            The Appellees

argue that Rogers     supports the proposition that the FHA does not

require a finding of actual damages as a condition to the award of

punitive 

n.4.        However, the Seventh

                                    8
Circuit in Rogers never decided this question raising the issue

only in dicta.

     In conclusion, the FHA cases do not provide us with a uniform

federal common law.    The Third Circuit holds punitive damages may

be appropriate when a constitutional violation exists.   The Fourth

Circuit closes the door on punitive damages absent an award of

actual damages but uses questionable authority to reach that

conclusion.     The Seventh and Ninth Circuit cases suggest that a

punitive award is permissible absent actual damages but did not

confront the question directly as we must.

     We must now examine decisions by this and other federal courts

interpreting similar federal civil rights statutes. In a series of

42 U.S.C. § 1983 cases, the Fifth Circuit has articulated a

standard for permitting punitive damages absent an award of actual

damages.   Ryland v. Shapiro, 

, 976 (5th Cir. 1983);

Wilson v. Taylor, 

, 1033 (5th Cir. 1981); McCulloch v.

Glasgow, 

, 51 (5th Cir. 1980).    In 

, we said:

     The rule in our circuit is that in the absence of proof of
     actual injury, a plaintiff who has been deprived of his
     constitutional rights may only collect nominal damages. Mere
     proof of the violation of a right will not support an award of
     compensatory damages. However, claims of mental and emotional
     distress, if proven, can support an award of compensatory
     damages.   Moreover, the societal interest in deterring or
     punishing violators of constitutional rights supports an award
     of punitive damages even in the absence of actual injury.
     (Internal citations omitted and emphasis added).

Therefore, our circuit has adhered to the general rule that a


                                  9
punitive award may stand in the absence of actual damages where

there has been a constitutional violation, a rule similar to the

Third Circuit FHA rule in Alexander.

     A review of other court decisions interpreting Section 1983

reveals a similar link between a finding of a constitutional

violation and upholding a punitive award absent a showing of actual

harm.    The Seventh Circuit has long held that a jury may award

punitive damages even absent a compensatory award if the plaintiff

suffered a constitutional violation.   Erwin v. Manitowoc, 

, 1299 (7th Cir. 1989); McKinley v. Trattles, 

,

1326 (7th Cir. 1984); Lenard v. Argento, 

, 889 (7th

Cir. 1983); Endicott v. Huddleston, 

, 1217 (7th Cir.

1980).

     Beyond Section 1983, decisions interpreting other civil rights

acts reach more varied results on the question whether a punitive

award may be upheld absent actual damages. Speaking generally, the

Third Circuit has said that federal law permits the recovery of

punitive damages and as a matter of federal common law it is not

necessary to prove nominal damages.    

.

     However, since the Third Circuit's insightful decision in

Basista, federal courts have become more divided on this punitive

damages question.   The Seventh Circuit determined that under 42

U.S.C. § 1981(a) a punitive damages award should not be conditioned

on the existence of a compensatory award.     Although the Seventh

Circuit relied heavily on its Section 1983 case law, it did not

                                10
indicate that a constitutional violation was necessary for the

punitive award to stand under 42 U.S.C. § 1981(a) or Title VII.

Timm v. Progressive Steel Treating, Inc., 

, 1010 (7th

Cir. 1998).     See also Buckner v. Franco, Inc., No. 97-6028, 

*17 (6th Cir. Apr. 12, 1999) (noting in dicta

support for Seventh Circuit's finding in Timm).                 However, in

another 42 U.S.C. § 1981 case, the First Circuit held that a

punitive damages award must be vacated absent either a compensatory

damages award or a timely request for nominal damages. Kerr-Selgas

v. American Airlines, Inc., 

, 1215 (1st Cir. 1995).

See also Frey v. Alldata Corp., 

, 225 n.1 (E.D. Wis.

1995)    (noting     in   dicta   that    only   in     cases   involving   a

constitutional violation would federal courts allow a punitive

damages award without compensatory damages); Paciorek v. Mich.

Consolidated Gas Co., 

, 221 (E.D. Mich. 1998) (noting

that    under   42   U.S.C.   §   1981(a)(b)(1)       and   American's   with

Disabilities Act nothing conditions the imposition of punitive

damages upon an award of compensatory or nominal damages).

       Although the goal of a federal common law of damages is to

produce uniform results, so far the federal judiciary has not

succeeded in this endeavor.       There are many cases under the FHA and

other civil rights statutes that support either upholding or

vacating Lewis' punitive damages award.               However, we find most

instructive our own circuit's case law limiting punitive damages

awards, absent an actual damages award, to cases were a violation

                                     11
of a constitutional right has occurred. LeBlanc did violate Lewis'

rights under the FHA but he did not violate Lewis' constitutional

rights.      For that reason, we vacate Lewis' punitive damage award.3

       In the alternative, the Appellees argue that we should remand

the case to the district court for a further determination of the

damages award. First Appellees contend that because the jury found

LeBlanc violated the FHA the district court should have award Lewis

nominal damages for this invasion of his civil rights.               Appellees

contend that when rights are violated in a civil rights case a

presumption of injury exists, thereby requiring at least nominal

damages.      Memphis Community Sch. Dist. v. Stachura, 

,

308 (1986); Gore v. Turner, 

, 164 (5th Cir. 1977).

       The cases Appellees cite are not applicable to the situation

before us.        In Memphis Community Sch. Dist., the Supreme Court

noted      that   nominal   damages   may   be   an   appropriate    means   of

vindicating rights whose deprivation has not cause actual 

n.11.        However, the Court made this statement in

reference to a violation of a constitutional right under Section

1983.      Likewise, in Gore, we recognized that nominal damages could

be presumed from the denial of a constitutional 

.       Neither case Appellees cite deal with a factual situation

       3
        Because we conclude that the punitive damages award cannot
stand absent an award of actual damages, we do not decide whether
a punitive damage award under the FHA must be based on egregious
conduct or merely predicated on a violation of the statute. See
generally Kolstad v. Am. Dental Ass'n., - U.S. -, 

(1999).

                                      12
similar to this case where the jury decided not to award the

plaintiff compensatory or nominal damages.         Moreover, we reiterate

this case does not involve the violation of a constitutional right.

     Next Appellees contend that the jury may have lumped the

compensatory and nominal damages awards into the punitive sum

because of its misunderstanding of the law.         They also argue that

the jury may have been confused about the damage definitions.          We

do not find this argument persuasive.        The jury used a two-page

verdict form that asked them only four questions addressing each

type of damage award separately.       The jury also asked the judge

during deliberations for definitions of nominal and compensatory

damages.    Moreover,   the   fact    that   the    jury   awarded   ACORN

compensatory damages but not punitive damages refutes any argument

that the jury may have been confused by the types of damage awards

or lumped the various awards together.

B.   ACORN's Standing

     LeBlanc also appeals the jury's compensatory damages award to

ACORN and the court's attorney's fees award to ACORN.         ACORN also

appeals its attorney's fees award.     Before we reach the merits of

these awards, we must determine sua sponte whether ACORN has

standing to bring this suit against LeBlanc.

     The Supreme Court, in Lujan v. Defenders of Wildlife, 

(1992), stated the minimum requirements that an organization

must establish to have constitutional standing:

     First, the plaintiff must have suffered an injury in fact - an

                                 13
     invasion of a legally-protected interest which is (a) concrete
     and particularized and (b) actual or imminent, not conjectural
     or hypothetical. Second, there must be a causal connection
     between the injury and the conduct complained of - the injury
     has to be fairly traceable to the challenged action of the
     defendant, and not the result of the independent action of
     some third party not before the court.      Third, it must be
     likely, as opposed to merely speculative, that the injury will
     be redressed in a favorable decision. 

-
     61 (internal quotes, parentheses and citations omitted).

     We must focus on the injury in fact requirement.       Under the

Federal Fair Housing Act, the Supreme Court has held that an

organization has suffered injury in fact if the defendant's actions

impaired the organization's ability to provide counseling and

referral   services.    The   Court    said,   “[s]uch   concrete   and

demonstrable injury to the organization's activities - with the

consequent drain on the organization's resources - constitutes far

more than simply a setback to the organization's abstract social

interests.”    Havens Realty Corp., v. Coleman, 

, 379

(1982).    Although the Court in Havens dealt with standing at the

pleadings stage, the Court noted that the organization will “have

to demonstrate at trial that it has indeed suffered impairment in

its role of facilitating open housing before it will be entitled to

judicial relief.”   

n.21.

     Based on these two cases, the Fifth Circuit has described what

types of organizational activities do not meet the Supreme Court's

injury in fact requirement. For example, “[t]he mere fact that an

organization redirects some of its resources to litigation and

legal counseling in response to actions or inactions of another


                                 14
party is insufficient to impart standing upon the organization.”

Association for Retarded Citizens of Dallas v. Dallas County Mental

Health & Mental Retardation Ctr. Bd. of Trustees, 

, 244

(5th   Cir.     1994)   (Federal   Fair     Housing    Act   case);    see   also

Association of Community Orgs. for Reform Now v. Fowler, 

, 358-59 (5th Cir. 1999).

       In contrast, we noted that an organization could have standing

if   it   had   proven    a   drain   on    its   resources    resulting     from

counteracting the effects of the defendant's actions.                 

Likewise, the Third Circuit concluded that a housing organization

had standing where its staff “stopped everything else” and devoted

all attention to the litigation in question and diverted resources

to counter the defendant's conduct.           Alexander, 

at

*14 n.4.   We reiterate that the Supreme Court in Havens noted that

an organization must demonstrate at trial that it suffered some

sort of impairment in facilitating open housing before receiving

judicial relief.

       We conclude that ACORN did not demonstrate at trial any

impairment in facilitating open housing.              At best ACORN proved the

resources it expended defending Lewis (although ACORN never kept

time sheets to record its work for Lewis); but it did not prove a

drain on its resources.            ACORN's executive director, Jeffrey

Karlson, testified at length at the trial.                    However, Karlson

neither mentioned any specific projects ACORN had to put on hold



                                       15
while working on Lewis' case nor did he describe in any detail how

ACORN   had   to   re-double   efforts   in   the   community   to   combat

discrimination.

     One excerpt in particular demonstrates the conjectural and

hypothetical nature of Karlson's testimony. When asked to describe

how LeBlanc's discrimination frustrated ACORN's mission, Karlson

said:

          Again, all I can do is base this on the mission of the
     organization being frustrated over two and a half years in
     trying to resolve this particular complaint to the extent that
     this one complaint started to take over an inordinate amount
     of our work time and staff time of our normal activities,
     really takes away from our activities in other areas, being
     able to do outreach and education, research and monitoring,
     intakes and investigations of complaints. It takes away from
     our normal activities - and this particular case has.       My
     estimate is 96 and a half hours of our staff time, over two
     and a half years, and that's conservative. If I kept time
     sheets, probably much larger than that, but we did not.

          But in terms of frustration of mission, our mission after
     we resolved the complaint, we have to make up for all that
     lost ground and all that lost time. And I can't sit here and
     give you and exact amount for what that is, but we have to go
     back out and repair the damage that's been done, because the
     discrimination in this case is continuing and ongoing. That's
     why we're in court, trying to seek relief to get that to stop
     and to stop it from happening in the future.       So, to the
     extent that we can do that through frustration of mission, we
     have to go back and redouble our efforts in the community to
     make up for that lost ground that was taken away from us
     during the course of this particular complaint and to help
     heal some of the damage in the community. I don't know if I
     can really explain it much more than that. (Tr. at 88-89).

     None of ACORN's testimony at trial demonstrates a concrete and

particularized injury as required by Lujan; instead, as the Supreme

Court cautioned in Lujan, ACORN's injury based on the testimony at

trial   is    only   conjectural,    hypothetical      and   speculative.

                                    16
Therefore, we find that ACORN lacks standing to bring suit and

reverse and vacate the jury's compensatory award to ACORN.       In

addition, because ACORN lacks standing, we conclude that ACORN is

not longer a “prevailing party” pursuant to 42 U.S.C. § 3613(c) of

the Federal Fair Housing Act.     We also reverse and vacate the

district court's award of $10,000 in attorney's fees to ACORN.

                            CONCLUSION

     We reverse and vacate the district court's punitive damages

award to Lewis, and the compensatory damages award and attorney's

fees award to ACORN.   In all other respects we affirm.

     AFFIRMED IN PART, REVERSED AND VACATED IN PART.




                                17
KING, Chief Judge, concurring in part and dissenting in part:



     Judge Duhé has written a careful and thorough opinion, and I

concur in Part IIB of the opinion and its holding regarding ACORN’s

standing.    While I agree fully with the description in Part IIA of

the opinion of the legal landscape on the award of punitive

damages, I cannot agree with its conclusion, and I would affirm

Lewis’ punitive     damage   award.        As   Judge   Easterbrook   said    in

declining to read a compensatory-punitive link into § 1981a or

Title VII when no such link had been read into § 1983, “[e]xtra-

statutory requirements for recovery should not be invented.” Timm

v. Progressive Steel Treating, Inc., 

, 1010 (7th Cir.

1998). I can see no justification for inventing such a requirement

for the FHA.

     As the majority acknowledges, punitive damages are a very

important part of the FHA’s goal of eradicating discriminatory

practices.   “Punitive damages are awarded in the jury’s discretion

‘to punish [the defendant] for his outrageous conduct and to deter

him and others like him from similar conduct in the future.’” Smith

v. Wade, 

, 54 (1983) (quoting RESTATEMENT (SECOND)          OF   TORTS

§ 908(1) (1977)).    The jury in this case clearly believed that the

defendant had engaged in behavior that warranted a punitive award.

Indeed, the behavior exhibited by this defendant has been unlawful

for thirty years and is reminiscent of the blatant violations



                                      18
challenged shortly after the Act became effective.                And yet, he

emerges from this case with no financial disincentive to continue

his practices.      Nor are other landlords in the community hereby

discouraged from engaging in similar practices.

     I   see   no   language   in   the   Act   dictating   the    majority’s

conclusion and I find it unfaithful to the FHA’s purposes.             I also

see it as providing a basis for similar conclusions in other

contexts, thereby threatening the fulfillment of other civil rights

acts’ goals.    For these reasons, I respectfully dissent.




                                     19