6 F.3d 898 (2nd Cir. 1993), 1423, Ragin v. Harry Macklowe Real Estate Co.

Docket Nº:1423, 1424, Docket 92-9252L, 92-9282XAP.
Citation:6 F.3d 898
Party Name:Luther M. RAGIN, Jr., Deborah Fish Ragin, Renaye B. Cuyler, Jerome F. Cuyler, Open Housing Center, Inc., Plaintiffs-Appellants-Cross-Appellees, v. HARRY MACKLOWE REAL ESTATE CO., Harry Macklowe, Defendants-Appellees-Cross-Appellants.
Case Date:September 29, 1993
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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6 F.3d 898 (2nd Cir. 1993)

Luther M. RAGIN, Jr., Deborah Fish Ragin, Renaye B. Cuyler,

Jerome F. Cuyler, Open Housing Center, Inc.,

Plaintiffs-Appellants-Cross-Appellees,

v.

HARRY MACKLOWE REAL ESTATE CO., Harry Macklowe,

Defendants-Appellees-Cross-Appellants.

Nos. 1423, 1424, Docket 92-9252L, 92-9282XAP.

United States Court of Appeals, Second Circuit

September 29, 1993

Argued May 14, 1993.

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[Copyrighted Material Omitted]

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Kerry Alan Scanlon, Washington, DC (Elaine R. Jones, Eric Schnapper, NAACP Legal Defense and Educational Fund, Inc., New York City, Cornelia Pillard, NAACP Legal Defense and Educational Fund, Inc., Washington, DC, Thomas Holman, Alla Roytberg, Lefrak Newman & Myerson, New York City, of counsel), for plaintiffs-appellants-cross-appellees.

George B. Yankwitt, New York City (Vincent Alfieri, Suzanne M. Berger, Susan B. Teitelbaum, Robinson Silverman Pearce Aronsohn & Berman, of counsel), for defendants-appellees-cross-appellants.

William H. Jeffress, Jr. and Niki Kuckes, Washington, DC (Miller, Cassidy, Larroca & Lewin, of counsel), submitted a brief for amicus curiae National Fair Housing Alliance in Support of plaintiffs-appellants-cross-appellees.

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Before: PRATT and MINER, Circuit Judges, and MISHLER, District Judge. [*]

MINER, Circuit Judge:

Plaintiffs-appellants-cross-appellees Luther M. Ragin, Jr., Deborah Fish Ragin, Renaye Cuyler, Jerome F. Cuyler and the Open Housing Center ("OHC") appeal from a judgment entered in the United States District Court for the Southern District of New York (Sweet, J.) after a bench trial with an advisory jury. The plaintiffs commenced this action for damages and injunctive relief in August of 1988, alleging that defendant-appellee-cross-appellant Harry Macklowe Real Estate Company ("HMRE") and HMRE's sole owner and president, defendant-appellee-cross-appellant Harry Macklowe, violated section 804(c) of the Fair Housing Act, 42 U.S.C. Sec. 3604(c) (1988) (the "FHA" or the "Act"). The gravamen of the plaintiffs' complaint was that the defendants' placement of display advertising for residential apartments in The New York Times violated the Act's prohibition against racial discrimination in residential housing advertising because all the models portrayed in the advertisements were white.

After a fourteen-day trial, the advisory jury recommended: that only HMRE be found liable for violating the Act; that each individual plaintiff receive $25,000 in compensatory damages for emotional distress; that the OHC receive $100,000 in compensatory damages for the resources it was required to allocate to counteract the effects of the defendants' advertisements; and that HMRE be required to pay $62,500 in punitive damages to the plaintiffs. On August 25, 1992, the district court issued an opinion: finding that both HMRE and Macklowe violated the Act; awarding each individual plaintiff $2500 in compensatory damages for emotional distress; and awarding the OHC $20,000 in compensatory damages for the resources it was required to allocate to counteract the effects of the defendants' advertisements. SeeRagin v. Harry Macklowe Real Estate Co., 801 F.Supp. 1213, 1230-34 (S.D.N.Y.1992). The district court declined to award punitive damages but entered an injunction prohibiting the defendants from violating the Act by using display advertising that indicated a racial preference.

In its August 25 opinion, the district court directed the parties to "[s]ubmit judgments on notice." 801 F.Supp. at 1236. Both parties subsequently submitted proposed judgments based on the court's opinion. Each judgment included a provision contemplating further proceedings to determine if attorneys' fees would be awarded. In October of 1992, the district court entered a judgment in accordance with its decision. The judgment granted costs and disbursements to the plaintiffs but, in accordance with an order dated October 19, 1992 denying counsel fees, omitted any fee award.

In their appeal, the plaintiffs argue that the district court erred in: calculating the amount of compensatory damages; declining to award punitive damages; issuing a weaker injunction than they requested; and declining to award them attorneys' fees. In their cross appeal, the defendants argue that the district court erred in finding that the plaintiffs had standing to sue in federal court and in finding that the defendants violated the Act. For the reasons set forth below, we affirm the district court's findings with respect to standing, liability and damages, leave the injunction undisturbed and reverse and remand on the issue of attorneys' fees.

BACKGROUND

We assume familiarity with the facts set forth in the district court's published opinion, seeRagin v. Harry Macklowe Real Estate Co., 801 F.Supp. 1213 (S.D.N.Y.1992), and therefore provide only a brief summary of the facts and circumstances giving rise to this action. The individual plaintiffs are two married couples who reside in New York City. All four are African Americans who hold graduate degrees in the fields of law, public policy, medicine or speech pathology. The OHC is a nonprofit corporation located in New York City. Its "mission" is to reduce the amount of segregation in, and to eliminate

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all discrimination from, the metropolitan residential housing market.

HMRE was the leasing agent and managing agent for two luxury residential apartment complexes in Manhattan. The first building, Riverterrace, is located at 515 East 72nd Street. Between May of 1986 and April of 1987, HMRE placed six half-page or full-page display ads for Riverterrace in The New York Times. One of these ads ("HOME") featured a photograph of three single white models engaging in sports or recreational activities and a photograph of a white couple embracing. A second ad ("New Year at 5:15") portrayed four white models gathering around a piano on New Year's Eve. A third ad ("Live It Up at 5:15") included three photographs: the scene depicted in the New Year at 5:15 ad, two white models at a swimming pool and a white couple on a terrace. The last three ads ("5:15 is the Time") also each included three photographs: the scene featured in the New Year at 5:15 ad, a white couple in a swimming pool and a white model at a gym.

The second building, Riverbank West, is located at 555 West 42nd Street. Between April of 1987 and December of 1988, HMRE placed twenty-eight half-page or full-page display advertisements for Riverbank West in The New York Times. Three of the ads ("3-D") featured a recreation of a famous Life magazine photograph depicting a movie audience of seventy-five white men and women wearing 3-D eyeglasses. All the individuals pictured in the 3-D ad were employees of either HMRE or the advertising agency that created the ad. Three advertisements ("Lying on Beach") depicted a young white woman lying in the sun next to an image of Riverbank West. Four ads ("Beach Bag") showed a young white woman walking on a beach and swinging a bag with an image of Riverbank West rising out of the surf. Nine of the ads ("Lipstick") depicted a white woman's lips and fingers applying a lipstick in the shape of Riverbank West. Two ads ("Skier") featured a white man skiing against a background of mountains among which was nestled Riverbank West. Two of the ads ("Get It") depicted a white woman wearing a bathing suit and lying in the ocean in front of an image of Riverbank West. The remaining five advertisements ("Beauty & the Best") showed a glamorous white woman "leaning toward a miniature image of Riverbank West." 801 F.Supp. at 1221. The Beauty & the Best ads ran from September to December of 1988 and were the only HMRE advertisements that included an Equal Housing Opportunity logo.

The target group for Riverterrace consisted of individuals in the thirty-five to fifty-five-year-old age group with household incomes in excess of $75,000. The target group for Riverbank West consisted of individuals in the twenty-five to forty-five-year-old age group with household incomes in excess of $50,000. All the human models for these advertisements were chosen from stock photograph books, which included both black and white models. The defendants never requested that black models be used in, or excluded from, the display ads for the two buildings.

In addition to placing ads in the print media, HMRE also advertised the two buildings by using direct mail, press releases, classified advertising, on-site brochures and signs, and radio advertisements and by placing ads on the sides of buses, which ran throughout Manhattan, including Harlem. None of the ads contained any language that either explicitly or implicitly conveyed a discriminatory message. Finally, there was no evidence presented that the defendants discriminated against minorities in the leasing of apartments in the two buildings.

The plaintiffs saw the defendants' ads in The New York Times between August of 1985 and late 1988. In June of 1987, the plaintiffs filed a complaint with the New York State Division of Human Rights ("SDHR") against The Harry Macklowe Organization (the "Organization"). 1 In their SDHR complaint, the plaintiffs alleged that the Organization had engaged in unlawful, discriminatory housing practices. In response

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to the plaintiffs' administrative complaint, the SDHR initiated an administrative proceeding against the Organization. The administrative complaints were dated June 15, 1987, and contained allegations that the display advertisements for Riverbank West and Riverterrace appearing in 1987 violated the New York State Human Rights Law because they did not include any black models. After receiving notice of the administrative complaints, Macklowe directed HMRE's in-house counsel to conduct an investigation of their obligations under the relevant housing statutes.

On May 10, 1988, the SDHR issued a finding of...

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