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Supreme Court hears housing discrimination case
From William Mears
WASHINGTON (CNN) -- The Supreme Court Tuesday wrestled with housing discrimination and who should be held responsible for it. At issue is whether the owner or officer of a real estate company should be held liable for damages if an agent discouraged a racially mixed couple from buying a home, even if the owner was unaware of the discriminatory behavior. The case involves David and Emma Holley, a mixed-race couple, who went house-hunting in California in 1996 with real estate agent Grove Crank. The agent allegedly showed them houses outside their price range, so the Holleys later found a house on their own and made an offer with the builder and one of Crank's fellow agents. Court records show Crank helped cancel the offer, and allegedly made derogatory remarks about the couple when discussing the offer with the builder. He allegedly referred to the Holleys as a "salt-and-pepper team" and "ni---s." The Holleys allege their offer was never passed to the builder, and the house was later sold for $20,000 less than what they offered. The couple sued Crank, the real estate company, and its owner-president, David Meyer. The Holleys' lawyer says Meyer was guilty of an "utter failure to supervise, direct and control" his Triad Corp. employees regarding fair housing laws. Meyer's attorneys counter he cannot be held liable unless he participated in the discrimination. They also deny Crank's alleged discrimination against the Holleys. But a federal appeals court ruled Meyer was liable for damages as the owner-officer of the company, citing a federal law making supervisors responsible "for the conduct of another person" in real estate transactions. The court cited other legal precedents in saying that the duty to obey racial discrimination laws cannot be delegated, and that companies are not immune from lawsuits, even if company officers order employees not to discriminate. The ruling could determine how easy it will be to collect damages for housing discrimination, and determine the level of liability real estate company owners have for their employees' behavior. In court arguments Tuesday, Meyer's attorney, Douglas Benedon, argued, "The only issue on liability is whether Mr. Meyer was the sole owner of Traid." When asked by Justice Ruth Bader Ginsburg if Meyer denies being the sole owner, Benedon replied "Absolutely." But Malcolm Stewart, assistant solicitor general, supporting the Holleys, countered, "Meyer exercised pervasive control" of the company and under federal laws, should be held responsible for the actions of his employees. While narrowly focused on housing discrimination, civil rights groups say this ruling could prove important on other discrimination cases under federal review. The real estate owner's lawyer said the appeals court ruling "has, without exaggeration, opened the floodgates of litigation throughout the country." A decision on the case is expected sometime next spring. The case is Meyer v. Holley (No. 01-1120).
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