United States v. Rupp
| Decision Date | 31 January 2022 |
| Docket Number | 4:19-CV-02644-SEP |
| Parties | UNITED STATES OF AMERICA, Plaintiff, v. LOUIS A. RUPP, II, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Missouri |
Before the Court is Defendant's[1] Rule 50 Motion to Set Aside the Punitive Damages Award, or in the Alternative Defendant's Rule 59 Motion to Reduce the Amount of Punitive Damages Awarded. Doc. 113. For the reasons set forth below, the Motion is denied.
In 2016, Laura Erwin and Martin Teal applied to lease an apartment from Defendant. Doc. 56 at 1. Defendant provided the Erwin-Teals with a lease that included the clause “NO CHILDREN.” Id. The Erwin-Teals wrote on the application that their six-year-old son would be living with them and returned it to Defendant. Id. Defendant agreed to lease an apartment to them for a term of one year but stated that the lease was “being entered on a trial basis in consideration of the ‘NO CHILDREN' clause[.]” Id. Throughout the term, the Erwin-Teals often paid their rent late, but the resulting notices threatened only the imposition of late fees, which Plaintiffs paid. Id. After the lease expired, they remained tenants on a periodic, month-to-month basis. Id. In May 2017, they accepted an offer from Defendant to renew their lease, which purported to incorporate the terms of the original lease. Id. Six weeks later, Defendant sent them a notice to vacate the premises by July 31st, stating that they had underpaid their last late fee by $15, and “more importantly, ” he had learned that their son had been living in the apartment full-time and that Ms. Erwin had recently given birth to a second child. Id. at 1-2. Defendant concluded that he had “no alternative” but to terminate their lease due to their “total disregard for the terms and conditions” of the contract. Id. at 2.
The Erwin-Teals filed a complaint with the Department of Housing and Urban Development, which investigated the complaint and issued a Charge of Discrimination on July 11, 2019. Doc. 56 at 2. Defendant elected to resolve the complaint in federal court, and the United States subsequently initiated this action. Id. On May 28, 2021, the Court ruled that Defendant had violated the Fair Housing Act, 42 U.S.C. § 3601 et seq., by discriminating against the Erwin-Teals and their two minor children based on familial status. Doc. 56 at 8. A jury trial was held on the sole issue of damages in August 2021. Docs. 92, 94, 95. The evidence included live witness testimony from Ms. Erwin, Mr. Teal, Mr. Rupp, the former Missouri Commission on Human Rights investigator who investigated the Erwin-Teal's HUD complaint, and video deposition testimony of the Erwin-Teals' former neighbors. Docs. 93, 117, 118. At both the close of the United States' case and the close of evidence, Defendant moved for judgment as a matter of law. The Court denied the motions, finding that the inquiry depended “on credibility determinations that are in the proper domain of the jury, ” and declining to “substitute [its] credibility determination for theirs.” Doc. 117 at 250:3-20; Doc. 118 at 106:12-107:5. The jury returned a verdict awarding $14, 400 in compensatory damages[2] and $60, 000 in punitive damages.[3] Doc. 109.
Defendant now argues that the punitive damages award should be set aside under Federal Rule of Civil Procedure 50(b) because there was not a legally sufficient basis for the Court to submit the issue of punitive damages to the jury. Doc. 113 at 1. In the alternative, Defendant argues that the $40, 000 in punitive damages awarded to the two children was grossly excessive in violation of the Due Process Clause of the Fourteenth Amendment, and that, pursuant to Federal Rule of Civil Procedure 59(e), the Court should reduce the award from $40, 000 to $5, 000. Id. at 3. The United States counters that there was sufficient evidence to submit the issue of punitive damages to the jury and that the resulting award of punitive damages was not excessive. Doc. 120 at 2, 8.
Federal Rule of Civil Procedure 50(b) allows a party to renew a motion for judgment as a matter of law previously made under Rule 50(a). In ruling on the motion, a court may allow judgment on the verdict, order a new trial, or direct the entry of judgment as a matter of law. Fed. R. Civ. Proc. 50(b)(1)-(3). “The law places a high standard on overturning a jury verdict because of the danger that the jury's rightful province will be invaded when judgment as a matter of law is misused.” Bavlsik v. General Motors, LLC, 870 F.3d 800, 805 (8th Cir. 2017) (quotation marks and citation omitted). “Judgment as a matter of law is appropriate only when all of the evidence points one way and is susceptible of no reasonable inference sustaining the position of the nonmoving party.” Allstate Indemnity Co. v. Dixon, 932 F.3d 696, 702 (8th Cir. 2019) (quotation marks and citation omitted). A court should review all of the evidence in the record and “draw all reasonable inferences in favor of the nonmoving party.” Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 150 (2000) (citations omitted). “Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge.” Id. (quotation marks and citation omitted). The court must “deny the motion if reasonable persons could differ as to the conclusions to be drawn from the evidence.” Bavlsik, 870 F.3d at 805.
Federal Rule of Civil Procedure 59(e) allows a party to file a motion to alter or amend a judgment on grounds that, among other things, the damages award was excessive. See Wright & Miller, 11 Fed. Prac. & Proc. Civ. § 2807 (3d ed.). “A Rule 59(e) motion ‘is not intended to routinely give litigants a second bite at the apple, but to afford an opportunity for relief in extraordinary circumstances.'” Clemens v. Local One, Serv. Emps. Int'l Union, 2019 WL 5579584, at n.1 (E.D. Mo. Oct. 29, 2019) (quoting Barnett v. Roper, 941 F.Supp.2d 1099, 1104 (E.D. Mo. 2013)). “Rule 59(e) motions serve the limited function of correcting manifest errors of law or fact or to present newly discovered evidence, and allow a court to correct its own mistakes in the time immediately following judgment.” Harris v. United States, 2018 WL 6305593, at * 1 (E.D. Mo. Dec. 2, 2018) (citing Innovative Home Health Care, Inc. v. P.T.-O.T. Assocs. of the Black Hills, 141 F.3d 1284, 1286 (8th Cir. 1998)).
The FHA permits an award of punitive damages for victims of discriminatory housing practices “‘when the defendant's conduct is shown to be motivated by evil motive or intent, or when it involves reckless or callous indifference to the federally protected rights of others.'” Badami v. Flood, 214 F.3d 994, 997 (8th Cir. 2000) (quoting Smith v. Wade, 461 U.S. 30, 56 (1983)). Jury Instruction No. 19-modeled on Instruction 5.72 of the Eighth Circuit Model Civil Jury Instructions (2020)-provided that the jury could award punitive damages against Defendant if they determined that he had “acted with malice or reckless indifference to the rights” of the Erwin-Teals. Doc. 96 at 28-29. It further instructed the jury that “Mr. Rupp acted with malice or reckless indifference” if “it has been proved that Mr. Rupp knew his conduct was in violation of the law prohibiting discrimination against families with children in housing, or acted with reckless disregard of that law.” Doc. 96 at 28.
Defendant argues that “the jury lacked a legally sufficient evidentiary basis to find for the claimants on their claim for punitive damages, ” because “the record was devoid of any evidence concerning Mr. Rupp's knowledge of the Fair Housing Act and, specifically, 42 U.S.C. § 3604 prohibiting discrimination against families with children.” Doc. 113 at 3. Defendant claims that “the only evidence going to Mr. Rupp's knowledge is that he was not aware of the prohibition, ” id. at 2, though he neglects to cite any evidence. Notably, Defendant's Motion addresses only the character of the evidence related to his awareness of the FHA, and specifically of its prohibition of discrimination against families with children; it does not address whether Defendant might have “acted with reckless disregard of the law.” Doc. 96 at 28.
In response, the United States argues that the evidence was sufficient for a reasonable jury to conclude that Defendant knew discrimination on the basis of familial status was unlawful, but also that a showing of actual knowledge was not necessary, because there was sufficient evidence for a reasonable jury to conclude that Defendant acted with reckless disregard of the law. Doc. 120 at 3-5.
As provided in Instruction No. 19, the jury was allowed to impose punitive damages if it found that Defendant “knew his conduct was in violation of the law or acted with reckless disregard of that law.” Doc. 96 at 28 (emphasis added). “Reckless conduct is not intentional or malicious, nor is it necessarily callous toward the risk of harming others, as opposed to unheedful of it.” Exxon Shipping Co. v. Baker, 554 U.S. 471, 493 (2008). Conduct is reckless if the actor “had reason to know of facts which create a high degree of risk of harm to another, and deliberately proceeds to act, or fail to act, in conscious disregard of, or indifference to, that risk.” Id. at 493-94 () (quoting Restatement (Second) of Torts § 500 (1965)). Thus, in the FHA context, the Eighth Circuit has counseled that a defendant can be liable for punitive damages if he “discriminate[s] in the face of a perceived risk that [his] actions will...
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