Court limits Fair Housing Act liability

WASHINGTON, Jan. 22 (UPI) -- The Supreme Court ruled Wednesday that liability under the Fair Housing Act is limited.

The act bans racial discrimination in the sale or rental of a home.

Although the company doing the selling or renting can be held liable when one of its representatives practices discrimination, the Supreme Court said, the liability does not extend to the company's officers or owners.

The case which brought Wednesday's ruling began in 1996 when Emma Mary Ellen and David Holley, an interracial couple, tried to buy a house in Twenty-Nine Palms, Calif.

The house had been listed by a real estate corporation called Triad Inc.

According to court records, Triad salesman Grove Crank allegedly prevented the Holleys from getting the house because he is white and she is black.

The Holleys then filed suit in federal court under the Fair Housing Act against Crank and Triad. They later filed a suit against David Meyer, Triad's president and sole shareholder, claiming he was "vicariously liable" for Crank's alleged actions.

A federal judge combined the suits, but dismissed the claims against Meyer, saying the Fair Housing Act does not impose vicarious liability on a corporate officer.

In reversing, a federal appeals court recognized that under the general principles of tort law -- lawsuits filed for a civil injury -- "corporate shareholders and officers usually are not held vicariously liable for an employee's action."

But, the appeals court said, the Fair Housing Act specifies liability "for those who direct or control or have the right to direct or control the conduct of another," even if they did not participate in the discrimination.

Meyer then asked the Supreme Court for review, and the justices heard argument last December.

Writing for a unanimous court, Stephen Breyer" class="tpstyle">Justice Stephen Breyer said in an opinion handed down Wednesday that "Congress said nothing in the statute or in the legislative history" -- the record leading up to the legislation's passage -- "about extending vicarious liability in this manner."

Breyer said the federal appeals court correctly cited the law when it said liability could apply to those who "direct or control" another person's conduct.

The appeals court's "opinion did not explain, however, why (the appeals court) did not read these words as modified by the subsequent words that limited vicarious liability to actions taken as 'employee or agent of the directing or controlling person,'" Breyer said.

Wednesday's Supreme Court ruling "vacates," or throws out, the appeals court ruling, and sends the case back down for "further proceedings consistent with this opinion."

(No. 01-1120, Meyer vs. Holley et al)