People Helpers Foundation, Inc. v. City of Richmond, Va., s. 92-1839

Citation12 F.3d 1321
Decision Date27 December 1993
Docket Number93-1501,Nos. 92-1839,s. 92-1839
Parties, 4 NDLR P 321 PEOPLE HELPERS FOUNDATION, INCORPORATED; Robert E. Elam; Rebecca Thomas; Gary Thomas, Plaintiffs-Appellees, v. CITY OF RICHMOND, VIRGINIA, Defendant-Appellant, and Joyce Riddell; William T. Riddell, Defendants. Local Government Attorneys of Virginia, Incorporated, Amicus Curiae. PEOPLE HELPERS FOUNDATION, INCORPORATED, Plaintiff-Appellee, and Robert E. Elam; Rebecca Thomas; Gary Thomas, Plaintiffs, v. CITY OF RICHMOND, VIRGINIA, Defendant-Appellant, and Joyce Riddell; William T. Riddell, Defendants.
CourtUnited States Courts of Appeals. United States Court of Appeals (4th Circuit)

G. Timothy Oksman, City Atty., Richmond, VA, argued (Michele Anne Gillette, Asst. City Atty., on brief), for appellant.

Harold Jonathan Krent, Depaul University College of Law, Chicago, IL, for amicus curiae.

Joseph William Kaestner, Kaestner & Associates, Richmond, VA, argued (T. Andrew Lingle, on brief), for appellees.

Before WIDENER, Circuit Judge, and BUTZNER and CHAPMAN, Senior Circuit Judges.

OPINION

CHAPMAN, Senior Circuit Judge:

This appeal arises from a jury's determination that the City of Richmond ("the City") violated the Federal Fair Housing Act, 42 U.S.C. Sec. 3601, with respect to People Helpers Foundation, Inc. ("People Helpers"). The jury awarded People Helpers one dollar punitive damages but it found no compensatory damages. Following the verdict, the district court granted a permanent injunction against the City and awarded attorney's fees and costs to People Helpers as the prevailing party. Later, the court found the City in violation of the injunction because it assessed People Helpers with personal property taxes and failed to recommend tax exempt status for People Helpers to the Virginia General Assembly. We vacate the jury's award of one dollar punitive damages, the court's award of attorney's fees and costs, and the court's finding that the City was in contempt of the injunctive order.

I.

People Helpers, a nonprofit corporation based in Richmond, Virginia, helps developmentally disabled people find housing in the Richmond area. Robert Elam is the chief operating officer of People Helpers.

In early 1991, People Helpers began leasing apartments in a building at 1207 West 47th Street ("the Building") in Richmond and started placing some of their clients in these apartments. In October 1991, People Helpers purchased the Building.

In the spring of 1991, the City began receiving complaints from neighbors of the Building, including Joyce Riddell, concerning various activities in and around the Building, including prostitution, drug use, overcrowding and panhandling. Ms. Riddell, a former member of the Richmond City Council, and another local resident, Diana Rollins, made racist statements to City administrators about the people who were being housed in the Building.

The City administrators handling these complaints recognized the improper bias, but also recognized that the complaints had some legitimacy and decided to make an inquiry. Two City police detectives conducted an investigation in July 1991, during which they were told by neighbors that some of the People Helpers clients were abusing alcohol and drugs publicly. Based on their investigation, the police officers determined there was not sufficient evidence to prosecute either the residents or the landlord for criminal conduct.

On August 2, 1991, Eileen Wimbish, a City zoning officer who had previously handled a complaint concerning the Building, conducted an inspection of the property. The inspection was made although the Building had a valid certificate of occupancy. At trial, Roy Benbow, a City zoning administrator, testified that the inspection was made because local residents complained about illegal activities in and around the Building. Ms. Wimbish, along with Mr. Elam, walked through the units that People Helpers' clients leased. Ms. Wimbish also reviewed the written leases of the People Helpers' clients. Two days later, a certificate of zoning compliance was issued to the property owner.

During August and September 1991, Ms. Riddell, apparently unsatisfied with the City's investigation, continued her personal campaign against People Helpers by calling and complaining to a variety of City officials, and asking that the City close down the Building.

In November 1991, People Helpers and Elam filed suit in federal district court against the City, alleging a violation of the Federal Fair Housing Act, codified at 42 U.S.C. Sec. 3601, and claiming that the City had intimidated People Helpers and discriminated against its disabled clients in violation of 42 U.S.C. Sec. 3617. 1

On April 10, 1992, the court heard and denied the City's motion for summary judgment. At the hearing, the court made the following comments as to its perceptions of the case:

Because Mrs. Riddell was a former City Councilperson? Did she pull everybody's chain and they overreacted because she had friends in high places, that sort of stuff? Had she been some judge's secretary, hadn't she, before she ran for City Council? ... Where the City picks up the animus that Ms. Riddell had toward the disadvantaged people, the City gets branded with the same responsibility when they get complaints from citizens to go out and investigate something, if they go about it with too much exuberance and enthusiasm where they know they are acting to a racist request, they get branded with the same torch, don't they?

J.A. 113-14. The court further stated:

It seems to me that the City overreacted in this case simply because one of their former officials could pull their chain, without ever looking at it objectively. You got in lockstep with Ms. Riddell to accomplish really an illegal result, and that is, to get People Helpers, conceptually supposed to take care of disadvantaged people, out of her neighborhood. That's the long and short of it.... But not many of us have any enthusiasm about city officials being able to push people around simply because you get some disgruntled ex-City Councilperson who wants to run the world and the City falls in line behind her and does all sorts of outrageous things to a legitimate business. That's what the case is going to project as when it goes to the jury.

J.A. 124-26.

On April 27, 1992, the case proceeded to trial. At the conclusion of the evidence, Judge Williams gave instructions to the jury, which included a statement that "[a] finding of actual or compensatory damages is not required as a condition to the award of punitive damages ..." J.A. 487. The jury found that the City had violated the Federal Fair Housing Act and awarded one dollar in punitive damages, but did not award compensatory damages.

Following the trial, Judge Williams determined that discriminatory practices had occurred and granted the plaintiff's motion for a permanent injunction. The injunction provided:

[T]he Defendant City of Richmond, its officers, agents, and employees are permanently enjoined from coercing, harassing, intimidating, or interfering with Plaintiff People Helpers Foundation, Inc., its officers, directors, agents, or employees, as well as those people to whom the Plaintiff provides housing. In addition, the City of Richmond shall take no act which interferes with Plaintiff's ability to provide housing to mentally or physically handicapped persons.

J.A. 497.

The court found that People Helpers was a prevailing party, under 42 U.S.C. Sec. 3613(c)(2), and was entitled to attorney's fees and costs; in so doing, the court concluded that because the City's Rule 68 offer of judgment was not more favorable than the final judgment, People Helpers was entitled to attorney's fees and costs, which it established in the amount of $10,000.

Three months after the injunction had been entered, Elam contacted the City Council member for his district, Joseph Brooks, and asked that People Helpers' request for tax exempt status be placed before the Council Legislative Committee. This Committee, composed of five members, met in November 1992 and voted not to recommend People Helpers for tax exempt status. 2 One of the reasons for such refusal was that People Helpers had past due personal property taxes. In 1990, '91 and '92 the City had abated the personal property taxes assessed against People Helpers. However, on September 23, 1992, the City reassessed all personal property taxes from 1990 forward. On December 23, 1992, after the refusal to recommend tax exempt status, People Helpers filed a petition for a rule to show cause why the City should not be found in contempt for violating the court's June 23, 1992 order by interfering with People Helpers because it failed to recommend tax exempt status to the General Assembly. After a hearing on April 7, 1993, the court found that People Helpers had established by clear and convincing evidence that the City had violated the court's injunction of June 23, 1992 and ordered the City to abate all personal property taxes assessed against People Helpers for 1991, 1992 and 1993. Further, the court ordered the City to receive and process another application for the exempt status without any consideration of "so-called delinquent taxes," which the district court had abated.

The City appeals the jury's one dollar punitive damages award, the court's award of attorney's fees and costs, and the finding of contempt. The City also asserts that Judge Williams' personal bias and prejudice caused him to err in three separate instances during the litigation and precluded an impartial trial.

II.

We begin with the City of Richmond's assertion that the district court exhibited personal bias against the City which precluded an impartial trial. This court reviews questions of judicial bias de novo. See Shaw v. Martin, 733 F.2d 304 (4th Cir.), cert. denied, 469 U.S. 873, 105 S.Ct. 230, 83 L.Ed.2d 159 (1984).

Under the United States Code, a federal judge "shall...

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