MARK E. FULLER, Chief Judge.
On July 17, 2008, the United States of America ("Plaintiff") brought suit against eleven defendants pursuant to Title VIII of the Civil Rights Act of 1968, as amended, 42 U.S.C. §§ 3601-3619 ("Fair Housing Act"). (Doc. # 1). Over the course of amending its complaint three times, Plaintiff added nine defendants to the nine remaining original defendants. (Docs. # 45, 107, & 168). Plaintiff alleges that defendant Jamarlo Gumbaytay ("Gumbaytay") engaged in a pattern of unlawful discrimination on the basis of sex in connection with the rental of the other defendants' properties. On January 15, 2010, defendant Lori Williams ("Williams") moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. (Doc. # 131). For the reasons set forth in this Memorandum Opinion and Order, that motion will be GRANTED in part and DENIED in part.
Jurisdiction over Plaintiff's claims is proper under 28 U.S.C. §§ 1331 and 1345 and 42 U.S.C. § 3614(a). The parties do not contest personal jurisdiction or venue, and the Court finds adequate allegations in support of both personal jurisdiction and venue.
Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions
Once the moving party has met its burden, Rule 56(e) "requires the nonmoving party to go beyond the pleadings and by [its] own affidavits, or by the `depositions, answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'" Id. at 324, 106 S.Ct. 2548. To avoid summary judgment, the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). On the other hand, a court ruling on a motion for summary judgment must believe the evidence of the non-movant and must draw all justifiable inferences from the evidence in the non-moving party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). After the nonmoving party has responded to the motion for summary judgment, the court must grant summary judgment if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c).
Plaintiff filed its initial complaint on July 17, 2008. It then filed amended complaints, adding defendants but not changing its allegations or claims, on January 7, 2009; November 23, 2009; and April 29, 2010. In its most-recent amended complaint, Plaintiff alleges the following: "At all times relevant to this action" Williams employed Gumbaytay as her agent to manage the property she owned at 720 Capri Street, Montgomery, Alabama 36105 ("720 Capri"). Rental unit(s) at that property are "dwellings" within the meaning of 42 U.S.C. § 3602(b). From at least 2005 to the present, Gumbaytay has been subjecting actual and prospective female tenants at that property to discrimination on the basis of sex, including severe, pervasive, and unwelcome sexual harassment. This includes "unwanted verbal sexual advances; unwanted sexual touching; unwanted sexual language; granting and denying tangible housing benefits based on sex; and taking adverse action against female tenants when they refused or objected to his sexual advances." Williams is liable for the discriminatory conduct of Gumbaytay, her agent and manager. Additionally, Williams knew or should have known of Gumbaytay's discriminatory conduct but failed to take reasonable preventative or corrective measures. Williams may own or have owned other dwellings, where she engaged in similar conduct.
Plaintiff claims that this conduct—intentional, willful, and/or taken in reckless disregard for the rights of others—constitutes violations of the following provisions of the Fair Housing Act: 42 U.S.C.
Evidence submitted by the parties shows the following:
Plaintiff has previously submitted several declarations from several women who have lived in properties managed by Gumbaytay, all describing various forms of discrimination based on sex. Valerie Manning ("Manning") rented the property at 720 Capri, beginning around January 2006, just before Williams bought the property. At the time, Eric Crews was the property manager. Williams purchased 720 Capri in January 2006. Williams has never had an interest in any of the other properties mentioned in Plaintiffs' complaint. No other defendant in this lawsuit has an interest in 720 Capri.
Approximately three months after her tenancy began, Manning's water bills increased dramatically due to a leak. She called Eric Crews about the leak; however, Gumbaytay answered the phone. Gumbaytay said he could help with the leak, that he was Manning's "sugar daddy," and that Manning was too pretty to be having trouble.
In November 2006, Manning received a letter from Williams stating that Gumbaytay was taking over as property manager at 720 Capri. Gumbaytay then contacted Manning, telling her that Williams was increasing Manning's rent from $550 per month to $650 per month. Gumbaytay again told Manning she was pretty and that if she would "see him sometime" she would not have to worry about paying rent. Gumbaytay stated that he could pay her rent and buy things for her children.
Around this time, Gumbaytay began showing up at 720 Capri every Sunday, trying to get Manning to spend time with him and come over to his house. Gumbaytay would also sit in his car by 720 Capri and watch the house and often come by unannounced, including late at night. He would often make calls to 720 Capri, telling Manning that he was thinking about her and asking her what she was doing. At one point, Manning disconnected her phone because of Gumbaytay's calls.
On December 8, 2006, Gumbaytay went to 720 Capri to collect a partial rent payment. He told Manning he could be her "sugar daddy" if she needed help with the rent because, "The lady that owns this house, she wants her money. The lady is a bloodhound for her money."
In June 2007, Gumbaytay sent Manning a "Notice of Default in Payment of Rent Warning Prior to Demand to Pay or Terminate Residential Lease" saying that Manning owed $900. Manning called Gumbaytay about that note, which bore his signature. Gumbaytay claimed that he had not written the note but told Manning he would pay the amount listed as due on the note if Manning "got with" him.
On July 24, 2007, Williams sent Manning a letter stating that she was taking over management of 720 Capri as of August 30. Williams says she fired Gumbaytay on July 24, 2007 because Williams had obtained information that Gumbaytay may have sexually harassed people who were not her tenants. Around August 10, 2007, Manning called Williams about problems at 720 Capri. Williams said it was the first she had heard of these issues, even
Williams states in her affidavit that her meeting with Manning in September 2007 was the first time she heard allegations that Gumbaytay harassed Manning. She adds that Manning had Williams's contact information and never contacted her with allegations about Gumbaytay. Plaintiff disputes this point, submitting several documents sent to Manning that include contact information only for Gumbaytay's management company.
This case is brought by the United States Attorney General ("Attorney General"). The Attorney General may bring this lawsuit against Williams in the following circumstances:
42 U.S.C. § 3614(a). Therefore, the Attorney General "has standing to sue" whenever he or she has reasonable cause to believe that "(1) there is an `individual' or a `group' pattern or practice violative of the Fair Housing Act or (2) whenever a group of persons has been denied rights granted by the Act and that denial raises an issue of general public importance." United States v. Bob Lawrence Realty, Inc., 474 F.2d 115, 122-23 (5th Cir.1973).
Williams argues that Plaintiff cannot survive summary judgment because Williams did not engage in a group pattern or practice violative of the Fair Housing Act. With regards to a group pattern or practice, the Fifth Circuit,
This Court sees no reason to depart from the Fifth Circuit's rationale in Bob Lawrence Realty. Individual property owners may be attracted to hiring Gumbaytay as an agent for the purpose of increasing revenues through proscribed methods, resulting in group action. The Court will not unjustifiably restrict the Attorney General's ability to proceed against group action under 42 U.S.C. § 3614(a) by requiring proof of a conspiracy, especially where the Court is limited to reviewing only whether the Attorney General has "reasonable cause" to believe that group action exists. Plaintiff has produced evidence that Williams was one of several property owners who hired Gumbaytay as their property manager. This is sufficient for a finding on summary judgment that the Attorney General had reasonable cause
However, the Court still must determine if Plaintiff has presented evidence raising an issue of fact about whether the group engaged in a "pattern or practice" of actions violative of the Fair Housing Act. While the actual number of discriminatory events is not determinative, the words "pattern or practice" were "intended to encompass more than an isolated or accidental or peculiar event." Id. at 124 (quoting United States v. W. Peachtree Tenth Corp., 437 F.2d 221, 227 (5th Cir. 1971) (internal quotations omitted)). Williams has introduced uncontroverted evidence that she only has one property and one tenant (Manning) relevant to this lawsuit. However, Plaintiff has introduced evidence that Manning was subjected to continuing harassment from Gumbaytay; it was no isolated incident. See Pelzer Realty Co., 484 F.2d at 445. Furthermore, Plaintiff has introduced evidence that Gumbaytay engaged in similar conduct with several tenants at several properties.
Plaintiff has only submitted evidence that Gumbaytay acted in a manner that violates the Fair Housing Act. The other defendants, including Williams, are all property owners who hired Gumbaytay as a property manager. But "it is well established that the [Fair Housing] Act provides for vicarious liability." Meyer v. Holley, 537 U.S. 280, 285, 123 S.Ct. 824, 154 L.Ed.2d 753 (2003). Under traditional vicarious liability rules, the property owners are liable for the acts of Gumbaytay as their agent or employee within the scope of his authority or employment. Id. Here, Plaintiff presents evidence that Gumbaytay's prohibited acts occurred within the scope of his authority or employment as a property manager of the relevant properties.
Plaintiff has easily satisfied its burden of producing evidence showing a material fact issue about whether the group of defendants "engaged in a pattern or practice of resistance to the full enjoyment of any of the rights granted by" the Fair Housing Act. 42 U.S.C. § 3614(a). Therefore, summary judgment is inappropriate on this issue. Because Plaintiff need only satisfy one of the requirements under 42 U.S.C. § 3614(a), the rest of Williams's arguments about section 3614(a) are moot.
Congress provided for the awarding of "monetary damages to persons aggrieved" in a Fair Housing Act case brought pursuant to 42 U.S.C. § 3614(a). In this context, "monetary damages" includes actual damages, damages for emotional distress, and punitive damages. United States v. Rent America, Corp., 734 F.Supp. 474, 482 (S.D.Fla.1990). Plaintiff and Williams disagree over the standard to be used in determining when to award punitive damages. The Eleventh Circuit has not discussed when punitive damages become available in Fair Housing Act cases.
In Kolstad v. Am. Dental Ass'n, the United States Supreme Court discussed when punitive damages are available in a Title VII case pursuant to 42 U.S.C. § 1981a(b)(1). 527 U.S. 526, 533-39, 119 S.Ct. 2118, 144 L.Ed.2d 494 (1999). Section 1981a(b)(1) provides for punitive damages upon proof that the defendant discriminated "with malice or with reckless indifference to the federally protected rights of an aggrieved individual." 42 U.S.C. § 1981a(b)(1). The Kolstad Court interpreted the whole of § 1981 a to show "a congressional intent to authorize punitive awards in only a subset of cases involving intentional discrimination." Kolstad,
The Eleventh Circuit has applied Kolstad in civil rights cases. See, e.g., Miller v. Kenworth of Dothan, Inc., 277 F.3d 1269, 1280 (11th Cir.2002) (Title VII); Lambert v. Fulton Cnty., Ga., 253 F.3d 588, 597 (11th Cir.2001) (42 U.S.C. § 1983). But, as noted above, the Eleventh Circuit has not set a standard for punitive damages in Fair Housing Act cases. The Court is convinced by the decisions of many other circuits that the Kolstad standard should be used for Fair Housing Act cases. See Lincoln v. Case, 340 F.3d 283, 291 (5th Cir.2003); Preferred Props., Inc. v. Indian River Estates, Inc., 276 F.3d 790, 799-800 (6th Cir.2002); Badami v. Flood, 214 F.3d 994, 997 (8th Cir.2000); Alexander v. Riga, 208 F.3d 419, 430-31 (3d Cir.2000); cf. Tyus v. Urban Search Mgmt., 102 F.3d 256, 266 (7th Cir.1997) (applying the Smith v. Wade standard for punitive damages in a Fair Housing Act decision issued prior to Kolstad).
However, the Kolstad Court recognized that an additional step was necessary in order to "impute liability for punitive damages" to a non-actor defendant. Kolstad, 527 U.S. at 539, 119 S.Ct. 2118. This is because the Supreme Court felt that, in keeping with the common law, agency principles should limit vicarious liability for punitive damages. Id. at 541, 119 S.Ct. 2118.
The Restatement (Second) of Agency summarized the common law rule that "[p]unitive damages can properly be awarded against a master or other principal because of an act by an agent if, but only if," among other things, "the agent was employed in a managerial capacity and was acting in the scope of employment." Id. at 542, 119 S.Ct. 2118 (quoting Restatement (Second) of Agency § 217C (1957)). The Supreme Court took issue with this rule in a Title VII context for a couple of reasons. First, the rule would expose employers making every effort to comply with Title VII to punitive damages for the discriminatory acts of all agents acting in a managerial capacity. Id. at 544, 119 S.Ct. 2118. This result would be contrary to the
The Supreme Court chose to modify the Restatement rule in the Title VII context, to remove the perverse incentives it creates for employers. Id. at 545, 119 S.Ct. 2118. The Kolstad Court stated that, "in the punitive damages context, an employer may not be vicariously liable for the discriminatory employment decisions of managerial agents where these decisions are contrary to the employer's good-faith efforts to comply with Title VII." Id. (inner quotations omitted). At least one circuit court has adopted this modified rule for vicarious liability for punitive damages in a lawsuit brought pursuant to the Fair Housing Act. See Alexander, 208 F.3d at 433-34 (finding that the duty of a landlord under the Fair Housing Act to not discriminate cannot be delegated to his or her employee, then remanding to the jury to consider whether, pursuant to Kolstad, the landlord "engaged in active anti-discrimination efforts sufficient to protect him" from punitive damages for the discriminatory acts of his employee). The Eleventh Circuit has applied this modified rule from Kolstad in civil rights cases. See Wilbur v. Corr. Servs. Corp., 393 F.3d 1192, 1205 (11th Cir.2004); Miller, 277 F.3d at 1280.
In short, Gumbaytay is subject to punitive damages if he, at the least, discriminated in the face of a perceived risk that his actions will violate federal law. See Kolstad, 527 U.S. at 536, 119 S.Ct. 2118. Williams is vicariously liable for those punitive damages under common-law agency rules, unless Gumbaytay's discriminatory acts are contrary to Williams's good-faith efforts to comply with the Fair Housing Act. See id. at 545, 119 S.Ct. 2118.
As the Court has already noted, Plaintiff has presented evidence showing that Gumbaytay's prohibited acts occurred within the scope of his agency relationship with Williams. However, the Court need not consider evidence, or lack thereof, of Gumbaytay's subjective mindset and Williams's good-faith efforts to comply with the Fair Housing Act, because the Eleventh Circuit has provided another layer of protection against vicarious liability for punitive damages. "`[P]unitive damages will ordinarily not be assessed against employers with only constructive knowledge' of harassment; rather, punitive damages may only be considered in cases where the `discriminating employee was high[ ] up the corporate hierarchy' or where `higher management countenanced or approved [his] behavior.'" Miller, 277 F.3d at 1280 (quoting Dudley v. Wal-Mart Stores, Inc., 166 F.3d 1317, 1323 (11th Cir.1999)).
Plaintiff argues that the Court should not apply the Eleventh Circuit rule from Miller because that case discusses hostile environment harassment while this case deals with, in addition to hostile environment harassment, a situation where Manning suffered tangible economic harm as a result of not succumbing to Gumbaytay's alleged harassment. Plaintiff relies on Burlington Industries, Inc. v. Ellerth for this argument. 524 U.S. 742, 118 S.Ct. 2257, 141 L.Ed.2d 633 (1998). In that case the Supreme Court did create an affirmative defense for vicarious liability "to liability or damages" for a hostile environment claim. Id. at 765, 118 S.Ct. 2257. This defense was not available when the "harassment culminates in a tangible . . . action" against the person complaining of harassment. Id. Therefore, Plaintiff correctly states that the Supreme Court has made a distinction between these two harassment scenarios.
However, the Supreme Court also dealt with a situation where the plaintiff sued over tangible adverse action one year later in Kolstad. 527 U.S. at 531, 119 S.Ct. 2118. Yet the Kolstad Court did not mention the distinction made in Burlington Industries when discussing vicarious liability for punitive damages. Id. at 539-45, 119 S.Ct. 2118. This is despite regular citations to Burlington Industries throughout Kolstad. The Court is left to presume that Burlington Industries does not apply to vicarious liability for punitive damages. Additionally, the Eleventh Circuit in Miller cited to Dudley for the proposition that vicarious liability for punitive damages is only available where, among other things, the employer approved of the employee's harassing behavior. See Miller, 277 F.3d at 1280 (quoting Dudley, 166 F.3d at 1323). Unlike Miller, a case of hostile environment, in Dudley at least one of the plaintiffs suffered tangible adverse employment actions. See Dudley, 166 F.3d at 1319. So the Eleventh Circuit has not accepted the distinction made by Plaintiff.
For the foregoing reasons, it is hereby ORDERED that Williams's motion for summary judgment (Doc. # 131) is GRANTED in part and DENIED in part. It is granted in that Williams is not vicariously liable for punitive damages for any actions taken by Gumbaytay found to violate the Fair Housing Act. It is denied in all other respects.
This cause is before the Court on Defendant Lori Williams's ("Williams") Motion to Reconsider or in the alternative Motion to Certify for Interlocutory Appeal (Doc. # 199) this Court's denial in part of her Motion for Summary Judgment. For the foregoing reasons, that Motion is due to be DENIED.
The United States filed suit against several property owners, including Williams, who all employed defendant Jamarlo Gumbaytay ("Gumbaytay") as a property manager. (Doc. # 168). The Third Amended Complaint alleges that Gumbaytay has been subjecting female tenants to discrimination on the basis of sex, including sexual harassment. Id. ¶ 3. Specifically, the Third Amended Complaint alleges that Williams employed Gumbaytay to manage the property at 720 Capri Street, Montgomery, Alabama 36105. Id. ¶ 9. Valerie Manning and her children were the only tenants at 720 Capri Street during the time that Gumbaytay was employed as property manager. According to Manning, Gumbaytay offered to pay her rent if she would "see him some time." (Doc. # 138 Ex. A ¶ 4). He often parked his car in front of her house and called her so often that at one point she disconnected her phone to avoid his calls. Id. ¶¶ 5, 6. The United States contends that the Attorney General has the right to bring this suit under the Fair Housing Act based on the defendants' 1) "pattern or practice of resistance to the full enjoyment of rights granted by the Fair Housing Act, 42 U.S.C. §§ 3601 et seq.," or 2) denial of rights to a group of persons which raises an issue of general public importance. Id. ¶ 26.
Williams filed a Motion for Summary Judgment arguing, among other things, that the United States did not have standing under the Fair Housing Act § 3614(a) to bring suit against her because 1) Williams did not engage in an individual pattern or practice of discrimination, 2) there is no group pattern or practice of discrimination between the several defendants, and 3) the discrimination alleged against Williams involved only one victim, and therefore cannot rise to the level of general public importance. (Doc. # 132). The Court partially granted Williams's Motion, but denied the Motion with regard to her arguments that the government did not have standing to bring suit. (Doc. # 197). The Court found that "Plaintiff has easily satisfied its burden of producing evidence showing a material fact issue about whether the group of defendants `engaged in a pattern or practice of resistance to the full enjoyment of any of the rights granted' by the Fair Housing Act." Id. at 11. Because the United States only needs to demonstrate one of the requirements for standing under 42 U.S.C. § 3614(a), the Court did not consider Williams's arguments about whether the discrimination in this case rises to a level of general public importance. Id. Williams has filed a motion requesting that this Court reconsider its ruling that the United States has produced evidence of a group pattern or practice among the defendants. (Doc. # 199).
The District Court has substantial discretion in ruling on a motion for reconsideration. Groover v. Michelin N. Am., Inc., 90 F.Supp.2d 1236, 1256 (M.D.Ala.2000). Reconsideration of a previous order is an "extraordinary remedy to be employed sparingly." Id. Courts have recognized only three grounds for reconsideration: 1) an intervening change in
In her Motion for Reconsideration, Williams first argues that to "allow the government to proceeds against her for an alleged pattern and practice of discrimination in the absence of Eleventh Circuit guidance on the issue would result in manifest injustice." (Doc. # 199 at 2). While there may not be any Eleventh Circuit decisions precisely on point in this case, a lack of guiding law from the Circuit does not require that this Court reverse its ruling on Williams's Motion for Summary Judgment. An absence of guiding law also does not rise to the level of manifest injustice. In order to reach the Circuit, the matter must first be decided by the District Court.
Williams also argues that requiring her to appear for a two week trial involving eighteen defendants is unfair "in light of the United States' failure to present sufficient evidence to this Court that there is a sufficient nexus between Williams and the other Defendants." (Doc. #199 at 6). The Court does not dispute that defending oneself against a lawsuit brought by the United States may present burdens. However, these burdens do not rise to the showing of manifest injustice required for relief under Rule 59(e). Therefore, Williams's Motion is due to be denied.
The Court declines to certify this issue for interlocutory appeal.
It is therefore ORDERED that Williams's Motion to Reconsider, or in the alternative Motion to Certify for Interlocutory Appeal (Doc. # 199) is DENIED.
Bob Lawrence Realty, 474 F.2d at 124 n. 13 (quoting United States v. Mitchell, 335 F.Supp. 1004, 1005-06 (N.D.Ga.1971)).