Louisiana Acorn Fair Housing v. LeBlanc

• Decision Date: 15 May 2000
• Docket Number: No. 98-31351,98-31351
• Parties: (5th Cir. 2000) LOUISIANA ACORN FAIR HOUSING; GENE LEWIS, Plaintiffs-Appellees-Cross-Appellants, v. DANNY LEBLANC, Defendant-Appellant-Cross-Appellee
• Court: U.S. Court of Appeals — Fifth Circuit

Page 298

211 F.3d 298 (5th Cir. 2000)

LOUISIANA ACORN FAIR HOUSING; GENE LEWIS, Plaintiffs-Appellees-Cross-Appellants, v. DANNY LEBLANC, Defendant-Appellant-Cross-Appellee.

No. 98-31351

UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

May 15, 2000

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

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

DUHE, 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 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 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. 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 enforcement of the FHA, the legislative history neithersupports 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, 340 F.2d 74, 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., 15 F.3d 1275, 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, 12 F.3d 1321, 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 other circuits provide a variety of different answers.

The two most recent cases come from the Third and Fourth Circuits. In Alexander v. Riga, 208 F.d 419 (3d. Cir. 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." Id. at 430 (citing Curtis v. Loether, 415 U.S. 189, 94 S.Ct. 1005, 39 L.Ed.2d 260 (1974); Basista, 340 F.2d at 87) (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., Inc., 12 F.3d at 1327. Nevertheless, we 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. Id. at 1326-27. 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. Id. at 1327. Although state law may be useful in...