Lee v. Southern Home Sites Corporation

• Decision Date: 13 July 1970
• Docket Number: No. 28167.,28167.
• Citation: 429 F.2d 290
• Parties: Johnnie Ray LEE, Plaintiff-Appellant, v. SOUTHERN HOME SITES CORPORATION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

429 F.2d 290 (1970)

Johnnie Ray LEE, Plaintiff-Appellant, v. SOUTHERN HOME SITES CORPORATION, Defendant-Appellee.

No. 28167.

United States Court of Appeals, Fifth Circuit.

July 13, 1970.

Fred L. Banks, Jr., Reuben V. Anderson, Jackson, Miss., Jack Greenberg, Michael Davidson, William Bennett Turner, Norman C. Amaker, New York City, for plaintiff-appellant.

George E. Morse, White & Morse, Eldon Bolton, Jr., Gulfport, Miss., for defendant-appellee.

Before COLEMAN, GOLDBERG, and MORGAN, Circuit Judges.

COLEMAN, Circuit Judge.

A Negro citizen, Johnnie Ray Lee, sued for and obtained injunctive enforcement of his right to buy a certain residential lot which theretofore had been denied him solely because of his race. Contending, however, that the remedies prescribed by the Court below were not sufficiently extensive he has appealed. We affirm and remand.

The action was brought pursuant to the Thirteenth Amendment and 42 U.S. C.A. §§ 1981, 1982¹ and was expressly denominated a class action pursuant to Rule 23(b) (2) of the Federal Rules of Civil Procedure, "the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole", 28 U.S.C.A. rule 23(b) (2).

On or about July 30, 1968, Southern Home Sites, Incorporated, mailed out to named addressees about a thousand circular letters, offering, for $49.50, to sell each of them a lot in Ocean Beach Estates, Jackson County, Mississippi. The letters specifically required that "You must be a member of the white race". Those desiring to acquire such a lot had to present themselves and the offering letter at the Ocean Springs Office not later than August 15, 1968.

The addressee list was compiled by having individuals "register" at a booth maintained at the State Fair in Jackson, and at other places. Southern Home Sites Corporation did not keep a list of those to whom the letters were sent and this fact was indicated in answers filed March 11, 1969, Record, 31 in response to interrogatories propounded by the plaintiffs. It was obviously unnecessary that such a list be kept because the addressee could activate the offer only by appearing in person, with letter in hand.

Lee lived about one hundred miles from Ocean Springs. Upon receiving one of the letters he consulted counsel and went to the Southern Office, taking with him his letter and $50 in cash. Because he was a Negro his tender of the money was refused. Suit was filed October 15, 1968. The case was tried to the District Judge on March 18, 1969.

On April 7, 1969, the Court, in a written opinion, held that Lee was entitled to an injunction prohibiting future discrimination against Negroes in the sale of lots in Ocean Beach Estates, and further commanding that Lee be given the opportunity to purchase a lot in conformity with the terms expressed in the letter. The Court further found that upon being given the opportunity to purchase a lot for $49.50 Lee

"will have suffered no monetary damage. Likewise, the Court finds that punitive damages are unwarranted on the facts presented here. See the similar disposition of this point in Jones, 20 L.Ed.2d at 1193, N. 14."

For reasons not apparent of record the judgment implementing this opinion was not entered until May 14, 1969.

In the meantime, on April 17, 1969, the plaintiff moved the Court for an order describing the class represented by him as being all Negro recipients of letters from the defendant, substantially similar to the letter received by Lee, and requiring Southern Home Sites, at its expense, to notify all members of the class of their right to purchase a lot on the same terms as Lee, and (2) awarding reasonable attorneys' fees.

The defendant then filed a second affidavit that it did not retain a list of those receiving the letters and had no knowledge of the names of those to whom the letters had been mailed.

On June 5, after the entry of judgment on May 14, plaintiff filed a motion, under the retained jurisdiction, that Southern Home Sites be required to place advertisements in newspapers in Mississippi, Alabama, and Louisiana, to run daily for at least a week, stating, inter alia, "any Negro citizen who had received such a letter now has the right to claim a lot for $49.50 with no other condition". It was further proposed that if an individual no longer had the letter he could meet the requirements by simply filing an affidavit that he had received such a letter.

The Court responded to this request by saying only that the judgment of May 14 had completely disposed of the matter.

That judgment of May 14, 1969, reads as follows:

"ORDERED, ADJUDGED and DECREED as follows:

"1. Defendant Southern Home Sites Corp., its agents, employees and those acting in concert with it, are enjoined from maintaining a policy or practice of discrimination against Negroes seeking to purchase or acquire lots in Ocean Beach Estates.

"2. The acts, policies and practices of defendant as found by this Court in its decision of April 7, 1969, violate the rights of plaintiff and the class he represents under the provisions of 42 U.S.C. Sections 1981 and 1982.

"3. Defendant, its agents, employees and those acting in concert with it, are enjoined from showing, selling, encumbering, renting or otherwise disposing of any lot in Ocean Beach Estates until defendant has first offered a lot to plaintiff on the terms set forth in defendant\'s letter to plaintiff dated July 30, 1968. To implement this portion of this judgment, defendant is ordered to offer plaintiff a choice of two lots in Ocean Beach Estates within five days after receiving notice of the entry of this judgment; plaintiff shall have five days after receiving such offer from defendant to select the lot of his choice. Upon such selection and the tender by plaintiff of $49.50, defendant shall convey to plaintiff the lot of his choice.

"4. Pursuant to Rule 23(c) (2) The Rule correctly applicable was 23(c) (3), not (c) (2) of the Federal Rules of Civil Procedure, the class on whose behalf plaintiff has maintained this action is described as follows:

all Negro citizens who received letters from defendant substantially similar to the letter from defendant to plaintiff dated July 30, 1968.

"5. Defendant shall, within ten days after entry of this judgment furnish to attorneys for the plaintiff a copy of its mailing list, if any, for letters dated July 30, 1968, identical to the letter received by the plaintiff herein; or if such list is unavailable shall inform the plaintiff and the Court of the reason for such unavailability and shall, in such event, furnish the plaintiff instead, information as to the sources utilized in the compilation of said list. The answers filed on March 11, 1968, in response to the interrogatories had specified that there was no such list in existence.

"6. Plaintiff\'s prayer for compensatory damages and attorneys\' fees is denied.

"7. Plaintiff\'s prayer for punitive or exemplary damages is denied.

"8. The costs of this action shall be borne by defendant.

"9. Jurisdiction of this cause is retained until such time as this judgment has been fully complied with."

On appeal, Lee says that the Court below erred in its failure to award reasonable attorneys' fees, in failing to award damages, and in "denying all meaningful relief to the class".

The complaint prayed for $100 compensatory damages and $3,000 "punitive or exemplary" damages. As noted above, the Court, relying on language appearing in Jones v. Mayer, supra, denied all damages.

There was no evidence offered as to the quantum of compensatory damages. The record reveals that the lots were worth $600 when the offer was made and $1,000 when the case was tried. Thus, upon receipt of his deed the plaintiff would have immediately realized a gain of $400, or eight times his original investment. Obviously, the District Court was of the opinion that this $400 gain had swallowed the $100 alleged as compensatory damages. The purpose of damages is to put the plaintiff in the same position, so far as money can do it, as he would have been had there been no injury or breach of duty, that is, to compensate him for the injury actually sustained, Bussy v. Donaldson, 4 U.S. 206, 4 Dall. 206, 1 L.Ed. 802 (1800); Milwaukee & St. P. R. Co. v. Arms, 91 U.S. 489, 23 L.Ed. 374 (1875). We hold, therefore, that the District Court did not err in the denial of compensatory damages.

This brings us to the issue of whether the District Judge was in error when he found Page 292, ante "that punitive damages are unwarranted on the facts presented here". The judgment now under review, as already indicated, was dated May 15, 1969. On December 15, 1969, the Supreme Court decided Sullivan v. Little Hunting Park, Inc., 396 U. S. 229, 90 S.Ct. 400, 24 L.Ed.2d 386. It was there held that under the Act of 1866, 42 U.S.C.A. § 1982, compensatory damages, although not specifically mentioned in the statute, may be imposed for the deprivation of a federal right if it results from a "disregard of the command of the statute" and if it results in damage to one of the class for whose especial benefit the statute was enacted. It was further held that such damages are governed by federal standards and that both federal and state rules on damages may be utilized, whichever better serves the policies expressed in the federal statutes, 42 U.S.C.A. § 1988.

It had previously been held in another court that such a deprivation could justify punitive damages if it resulted from unreasonable and unjust discrimination, Wills v. Trans World Airlines, Inc., S.D. Calif., 1961, 200 F.Supp. 360. In that case, the Court significantly added the following language:

"Accordingly, exemplary damages may be awarded to plaintiff `if the defendant has acted wantonly, or oppressively, or with such malice as implies a spirit of mischief or criminal indifference to

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