S.C. Human Affairs Comm'n v. Zeyi Chen, Appellate Case No. 2018-001879

• Court: United States State Supreme Court of South Carolina
• Writing for the Court: CHIEF JUSTICE BEATTY
• Citation: 846 S.E.2d 861,430 S.C. 509
• Parties: SOUTH CAROLINA HUMAN AFFAIRS COMMISSION, Appellant, v. ZEYI CHEN & Zhirong Yang, Respondents.
• Decision Date: 22 July 2020
• Docket Number: Opinion No. 27988,Appellate Case No. 2018-001879

430 S.C. 509
846 S.E.2d 861

SOUTH CAROLINA HUMAN AFFAIRS COMMISSION, Appellant,
v.
ZEYI CHEN & Zhirong Yang, Respondents.

Appellate Case No. 2018-001879
Opinion No. 27988

Supreme Court of South Carolina.

Submitted October 15, 2019
Filed July 22, 2020

Randy Alexander Pate II and Lee Ann Rice, of South Carolina Human Affairs Commission, of Columbia; and Karl S. Bowers, of Bowers Law Office, LLC, of Columbia; for Appellant.

Zeyi Chen and Zhirong Yang, of Charleston, pro se Respondents.

CHIEF JUSTICE BEATTY :

430 S.C. 514

The South Carolina Human Affairs Commission (the Commission) brought this action against Zeyi Chen and Zhirong Yang (Respondents), alleging they violated the South Carolina Fair Housing Law (Fair Housing Law)¹ by discriminating against a prospective tenant. The Commission appeals circuit court orders (1) denying the Commission's motion pursuant to Rule 43(k), SCRCP to enforce the parties' settlement agreement; (2) finding certain information was obtained by the Commission during the conciliation process and was, therefore, subject to orders of protection and inadmissible under S.C. Code Ann. § 31-21-120(A) (2007) of the Fair Housing Law; and (3) ultimately dismissing the Commission's action based on a finding section 31-21-120(A) is unconstitutional and the entire statute is void. We affirm in part, reverse in part, and remand.

I. FACTS

The Commission brought this action against Respondents in 2014 alleging discrimination based on familial status in violation of the state's Fair Housing Law.² The action was based on

430 S.C. 515

a complaint received from Stacy Woods, who reported that she responded to an ad on Craigslist for a rental residence in Mount Pleasant and was told it was not available. Woods maintained she was refused the rental property because she had a four-year-old daughter.

The property is a commercial building owned by Respondents that contains a skin care and acupuncture clinic. There are additional rooms over the business that Respondents offered for rent, although the rooms did not have full kitchens and bathrooms inside the premises. In several responses to

846 S.E.2d 864

the complaint (deemed "position statements" by the Commission), Respondents denied the allegation of discrimination. They stated the premises had already been rented when Woods came to view it, and Woods was informed of this fact. Respondents also advised the Commission that the rental property was not suitable for a young child due to the lack of ready access to facilities and the fact that it was above the clinic, where clients came for treatment in a quiet atmosphere.

The parties agreed to engage in mediation pursuant to the South Carolina Alternative Dispute Resolution Rules (SCADR). On March 24, 2016, the parties entered into a settlement agreement.³ Respondents did not admit liability but agreed to comply with the Fair Housing Law in the future, participate in one free training session on fair housing principles, display a Fair Housing Law poster on their rental property, and pay $9,500 to the Commission. The settlement agreement, which was prepared by the mediator, further provided, "These terms will be reduced to a formal Consent Order to be executed by all of the parties, which shall be a public document." A separate signature page was attached containing lines for four signatures: the Commission, Woods (the aggrieved person), Respondent Chen, and Respondent Yang, all of whom signed (one of the Commission's attorneys signed on behalf of the Commission). There was no signature line for Respondents' counsel, who did not sign the agreement.

The mediator promptly filed a Proof of ADR or Exemption form with the circuit court, indicating the matter had been

430 S.C. 516

settled in full and that the parties would soon be filing a consent order. The Commission prepared a consent order and emailed it to Respondents' counsel for counsel's signature. In a series of emails, the Commission followed up several times, and one of Respondents' attorneys stated he was reviewing the proposed order and would be back in touch. However, Respondents' counsel thereafter informed the Commission in a telephone call that "he was having difficulty getting his clients [Respondents] to comply with the settlement agreement."

When Respondents' counsel failed to execute the consent order, the Commission filed a motion to compel enforcement of the settlement agreement pursuant to Rule 43(k), SCRCP. The circuit court (Judge Benjamin H. Culbertson presiding) denied the motion in an order filed November 15, 2016.

In 2017, the Commission moved for partial summary judgment on two of the claims pending in the circuit court, (1) that Respondents discriminated in the terms, conditions, or privileges of the rental of a dwelling on the basis of familial status; and (2) that Respondents made, printed, published, or caused to be made, printed, or published, any notice, statement, or advertisement with respect to the rental of a dwelling with an intention to make a preference, limitation, or discrimination based on familial status. See S.C. Code Ann. § 31-21-40(2), (3) (2007).

A hearing on the Commission's motion for partial summary judgment was held in the circuit court in October 2017 (Judge J.C. Nicholson Jr. presiding). Respondents made a motion for a protective order on the basis the Commission's memorandum supporting summary judgment contained confidential and inadmissible information from conciliation efforts that could not be made public or used as evidence based on section 31-21-120(A) of the Fair Housing Law, which provides "[n]othing said or done" during informal endeavors such as conciliation may be disclosed without the consent of the parties. See S.C. Code Ann. § 31-21-120(A) (2007) ("If the commission decides to resolve the complaint, it shall proceed to try to eliminate or correct the alleged discriminatory housing practice by informal methods of conference, conciliation, and persuasion.... Nothing said or done in the course of the informal endeavors may be made public or used as evidence in a subsequent

430 S.C. 517

proceeding under this chapter without the written consent of the persons concerned. An employee of the commission who makes public any information in violation of this provision is guilty of a misdemeanor punishable by a fine of not more than two hundred dollars or imprisoned

846 S.E.2d 865

for not more than thirty days." (emphasis added)). The Commission sought clarification of what information was to be protected on the basis it was "said or done" in the course of conciliation, and the parties were given the opportunity to submit logs of what they believed fell within the confines of the statutory conciliation process.

The circuit court subsequently denied the Commission's motion for partial summary judgment in a form order filed November 8, 2017. After reviewing the document logs submitted by the parties, the circuit court filed a Sealed Protective Order on February 8, 2018, protecting certain materials deemed to be conciliation materials from public disclosure and/or use at trial.

Both the Commission and Respondents filed motions for reconsideration. Upon further review of the materials, the circuit court sua sponte requested additional memoranda from the parties as to whether the statute itself, section 31-21-120(A), and/or the manner in which the Commission administered it violated Respondents' rights to due process. The circuit court held a hearing on the motions for reconsideration in April 2018. At that time, the parties presented arguments regarding which of the materials they believed were related to conciliation and the court's question regarding due process.

On May 15, 2018, the circuit court issued an order substantially expanding the scope of its original protective order. The circuit court found the Commission violated section 31-21-120(A) by having inconsistent interpretations of what constituted conciliation and by commingling its investigative and conciliation efforts. The circuit court stated although dismissal of the claims was not appropriate, "an unfavorable evidentiary ruling [was] necessary to deter future actions of this nature" and ruled the Commission was "barred from using or making public any material contained in its conciliatory file, its investigative file, the attached logs submitted by [Respondents], and any material covered by [the] previous Protective Order that

430 S.C. 518

is not covered by this Order." The circuit court stated the information was not admissible in any future hearings. However, it summarily found that "neither the statute nor the manner in which it was administered violated [Respondents'] rights to due process of law."

Respondents filed a second motion for reconsideration that pertained solely to the constitutional issues raised sua sponte by the circuit court. Respondents asked the circuit court to amend its order to address the unconstitutional vagueness of the...