United States v. Youritan Construction Company, C 71 1163 ACW.

• Decision Date: 08 February 1973
• Docket Number: No. C 71 1163 ACW.,C 71 1163 ACW.
• Parties: UNITED STATES of America, Plaintiff, v. YOURITAN CONSTRUCTION COMPANY, a corporation, et al., Defendants.
• Court: U.S. District Court — Northern District of California

370 F. Supp. 643

UNITED STATES of America, Plaintiff, v. YOURITAN CONSTRUCTION COMPANY, a corporation, et al., Defendants.

No. C 71 1163 ACW.

United States District Court, N. D. California.

February 8, 1973.

COPYRIGHT MATERIAL OMITTED

James L. Browning, Jr., U. S. Atty., David Bancroft, Asst. U. S. Atty., San Francisco, Cal., Elliott McCarthy, Dept. of Justice, Housing Section, Washington, D. C., for plaintiff.

Gerald B. Ferrari, Palo Alto, Cal., Bressani, Hansen & Blos, San Jose, Cal., for defendants.

Richard G. Mansfield, Palo Alto, Cal., for Midpeninsula Citizens for Fair Housing.

FINDINGS OF FACT, CONCLUSION OF LAW, AND JUDGMENT

WOLLENBERG, District Judge.

INTRODUCTORY STATEMENT

The United States instituted this action on June 16, 1971, pursuant to Title VIII of the Civil Rights Act of 1968, 42 U.S.C. § 3601 et seq., alleging that (1) the defendants have engaged in conduct constituting a pattern or practice of resistance to the enjoyment of rights secured by 42 U.S.C. § 3604 and that (2) the defendants have denied a group of persons rights granted by Title VIII, which denial raised an issue of general public importance. The Government's complaint prays for injunctive and affirmative relief. In their answer, the defendants denied the material allegations of the complaint. Trial was held on July 17-21 and July 31-August 3, 1972. On the basis of the evidence adduced at trial, and pursuant to Rule 52 of the Federal Rules of Civil Procedure, the Court now makes the following Findings of Fact and Conclusions of Law:

FINDINGS OF FACT

The Defendants

1. The defendant Tan Construction Company is owned and operated by the defendant T. S. Tan (hereinafter "Tan"

or defendants). Tan operates and owns in whole or in part 11 apartment buildings in and near the City of Palo Alto, California containing 1133 rental units.¹ The first of these buildings began operations in 1959 and others have been opened at various times since then.

2. The rental of the apartments ranges from $120 per month for an unfurnished one-bedroom apartment to far higher amounts for larger and more luxurious units. At the time of the filing of this action, six of Tan's buildings had no black occupants and had never had any. One of those six was the Americana, which opened in October 1969 with 286 units and by the time of the suit had 486 units available for occupancy (though other parts of the complex were in various stages of construction). As of June 1971, when this action was filed, Tan's other five buildings contained 14 units occupied by black persons, these units representing 1.2% of the 1133 in all of Tan's buildings. However, 11 of the above 14 units were located in three buildings (two large and one small) near East Palo Alto which contains the only concentrated black residential area in the locality served by Tan's buildings.

3. Each of defendants' apartment buildings is operated by a resident manager, most of whom are helped out by relief managers on their days off. Two of the buildings have assistant managers (Americana and Tan Village.) The resident managers report to Tan's central office in Palo Alto and their immediate superior is Mr. Zee,² the defendants' general property manager. Mr. Zee has held this position since 1968. All of the resident managers and other persons employed to assist in the tenant application process have been white persons.

4. Mrs. Louise Boatwright was the resident manager at the defendants' Americana complex between October 1969 and April 1971. Previously she had held this position at Sunshine Gardens from October 1965 to March 1966, at Tan Manor from March 1966 to October 1969 and at Tan Village from May 1971 to September 1971. Mrs. Boatwright was initially hired by Mr. Tan. Unlike the rest of defendants' apartment complexes the Americana employs "rental agents" who work under the supervision of the resident manager and whose job is to show prospective tenants around the complex and present those interested in applications to the resident manager for processing.

5. At the trial, four of Tan's former employees who had worked at the Americana complex during the time Mrs. Boatwright was the resident manager, testified that Mrs. Boatwright had instructed them to discriminate against black persons and members of other minority groups in the rental of apartments at the complex, and had made a number of statements indicating that it was defendants' policy and disposition to avoid renting to black tenants.

6. Mrs. Boatwright suggested, and the rental agents carried out, several methods of discouraging minority applicants. These methods included showing applicants the most expensive apartments, giving them incomplete tours of the Americana complex, and misrepresenting the availability of apartments. In addition, rental agents were instructed to emphasize the security deposit requirements, and to inform applicants that two week credit checks would be required before renting. These instructions were enforced by telling rental agents they would not receive a commission for renting to a black or other minority person.

7. Although there is some disagreement among the four former employees called by the Government as to precise details of their experiences, their testimony is supported by the complete absence of black tenants at the Americana during the time in question, by the testimony of other witnesses who had rental experiences with defendants which conformed to the methods suggested by Mrs. Boatwright for implementing defendants' discriminatory policy, and by the Court's observation of the demeanor and credibility of all the witnesses.

8. Several of the Government's witnesses stated that Mrs. Boatwright attributed her discriminatory instructions to her supervisors, Mr. Tan and Mr. Zee, who in turn denied giving such instructions to Mrs. Boatwright. For reasons set forth in Conclusion of Law No. 6, infra, it is not necessary for the Court to resolve this conflict. Mrs. Boatwright's behavior resulted from defendants' failure, by design or by thoughtlessness, to supervise Mrs. Boatwright and their failure to provide an objective, reviewable application procedure that would prevent black applicants from being subjected to their agents' racially discriminatory preferences.

9. Accordingly, the Court finds that Mrs. Boatwright during the course of her employment, gave discriminatory instructions to rental agents working under her at the Americana Apartments and that these instructions were on various occasions implemented by rental agents, resulting in the denial of apartments to blacks because of race.

10. In addition to the testimony regarding the discriminatory instructions given by the resident manager of the Americana to her subordinates, the United States introduced evidence of discriminatory treatment of blacks at other of defendants' apartment complexes. A considerable proportion of this evidence consisted of the testimony of black and white "testers"³ who visited various of defendants' buildings to inquire about the availability of apartments for rent. The testers' method was to have a black applicant and a white applicant usually of the same age and sex, make similar inquiry at an apartment on the same day within minutes of each other.

11. The experiences to which the "testers" testified fall into two main categories: first, whites asked if a credit check was necessary and were told that it was not, and that they could move in immediately or within a few days, while blacks were told that a credit check was necessary and it would take a period of time ranging from a few days to a week; second, black applicants were told that no apartments were available while white applicants on virtually contemporaneous occasions were advised that apartments were available.⁴

12. The testimony of black and white testers was highly credible on its face. Moreover, the substance of their testimony was substantially corroborated by defendants' records on apartment vacancy and availability, by the testimony of Tan's former employees, and by the testimony of bona fide black applicants at Tan's buildings.

13. The pattern of telling blacks that no apartments were available was not uniform; a handful of blacks had been accepted at defendants' buildings at the time of suit and some black testers were told apartments were available.⁵ The Court finds, however, that on a substantial and significant number of occasions, defendants' agents falsely represented to black rental applicants that apartments were not available, and that they used the "credit check" device to discourage blacks from renting. The Court finds that this racially discriminatory conduct occurred because the owners and their top assistants failed to take aggressive action to insure that agents dealing with applicants treated everyone alike without regard to race or color.

CONCLUSIONS OF LAW

1. This Court has jurisdiction of this action under 28 U.S.C. § 1345 and 42 U. S.C. § 3613.

2. The apartment buildings described in Finding of Fact No. 1 are "dwellings within the meaning of 42 U.S.C. 3602(b)."

3. Title VIII of the Civil Rights Act of 1968 (42 U.S.C. § 3601 et seq.) is an appropriate and constitutionally permissible exercise of Congressional power under the Thirteenth Amendment to bar all racial discrimination, private as well as public, in the sale and rental of real property. United States v. Hunter, 459 F.2d 205 (4th Cir. 1972), cert. den., 409 U.S. 934, 93 S.Ct. 235, 34 L.Ed.2d 189, aff'g 324 F.Supp. 529 (D. Md.1971); United States v. Real Estate Development Corp., 347 F.Supp. 776, (N.D.Miss.1972); United States v. Reddoch (No. 6541-71-P, S.D.Ala., January 27, 1972), aff'd, 467 F.2d 897 (5th Cir. 1972); Brown v. State Realty, 304 F. Supp. 1236 (N.D.Ga.1969); United States v. Mintzes, 304 F.Supp. 1305 (D. Md.1969).

4. In weighing the evidence in this case, the court recognizes that the law prohibits "sophisticated as well as simple-minded...