Ragin, Jr. v. The Harry Macklowe Real Estate Co. Opinion

    UNITED STATES COURT OF APPEALS 
FOR THE SECOND CIRCUIT

Nos. 1423, 1424—August Term, 1992 
(Argued: May 14, 1993 Decided: September 29, 1993) 

Docket Nos. 92-9252L, -9282XAP

Luther m . ragin , Jr ., Deborah fish  ragin , renaye 
b . Cuyler , Jerome F. Cuyler , Open  h o u sin g  
Center, Inc.,

Plaintiffs-Appellants-Cross-Appellees,

HARRY MACKLOWE REAL ESTATE CO.,
Harry m acklow e ,

Defendants-Appellees-Cross-Appellants.

B e f o r e :

PRATT and Miner , Circuit Judges, 
and MlSHLER, District Judge *

Appeal and cross appeal from judgment entered in 
United States District Court for the Southern District of 
New York (Sweet, /.)  after bench trial with advisory jury,

* Hon. Jacob Mishler, Senior District Judge of the United States Dis­
trict Court for the Eastern District of New York, sitting by designation.

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the district court having found that defendants’ placement 
in The New York Times of display advertisements for 
apartments violated the Fair Housing Act’s prohibition 
against discriminatory advertising of residential housing 
because only white models were shown in the ads.

Affirmed in part, reversed in part and remanded.

Kerry Alan  Scanlon , Washington, DC 
(Elaine R. Jones, Eric Schnapper, 
NAACP Legal Defense and Educational 
Fund, Inc., New York, NY; Cornelia Pil- 
lard, NAACP Legal Defense and Educa­
tional Fund, Inc., Washington, DC; 
Thomas Holman, Alla Roytberg, Lefrak 
Newman & Myerson, New York, NY, of 
counsel), for Plaintiffs-Appellants-Cross- 
Appellees.

GEORGE B. YANKWITT, New York, NY (Vin­
cent Alfieri, Suzanne M. Berger, Susan B. 
Teitelbaum, Robinson Silverman Pearce 
Aronsohn & Berman, New York, NY, of 
counsel), fo r Defendants-Appellees- 
Cross-Appellants.

William H. jeffress, Jr . and Niki Kuckes, 
Washington, DC (Miller, Cassidy, Lar- 
roca & Lewin, Washington, DC, of coun­
sel), Submitted a Brief for Amicus Curiae 
National Fair Housing Alliance in Sup­
port o f Plaintiffs-Appellants-Cross- 
Appellees.

6348



Min er , Circuit Judge:

Plaintiffs-appellants-cross-appellees Luther M. Ragin, 
Jr., Deborah Fish Ragin, Renaye Cuyler, Jerome F. Cuyler 
and the Open Housing Center (“OHC”) appeal from a 
judgment entered in the United States District Court for 
the Southern District of New York (Sweet, J.) after a 
bench trial with an advisory jury. The plaintiffs com­
menced this action for damages and injunctive relief in 
August of 1988, alleging that defendant-appellee-cross- 
appellant Harry Macklowe Real Estate Company 
(“HMRE”) and HMRE’s sole owner and president, defen- 
dant-appellee-cross-appellant Harry Macklowe, violated 
section 804(c) of the Fair Housing Act, 42 U.S.C. 
§ 3604(c) (1988) (the “FHA” or the “Act”). The gravamen 
of the plaintiffs’ complaint was that the defendants’ place­
ment of display advertising for residential apartments in 
The New York Times violated the Act’s prohibition against 
racial discrimination in residential housing advertising 
because all the models portrayed in the advertisements 
were white.

After a fourteen-day trial, the advisory jury recom­
mended: that only HMRE be found liable for violating the 
Act; that each individual plaintiff receive $25,000 in com­
pensatory damages for emotional distress; that the OHC 
receive $100,000 in compensatory damages for the 
resources it was required to allocate to counteract the 
effects of the defendants’ advertisements; and that HMRE 
be required to pay $62,500 in punitive damages to the 
plaintiffs. On August 25, 1992, the district court issued an 
opinion: finding that both HMRE and Macklowe violated 
the Act; awarding each individual plaintiff $2500 in com­
pensatory damages for emotional distress; and awarding 
the OHC $20,000 in compensatory damages for the 
resources it was required to allocate to counteract the

6349



effects of the defendants’ advertisements. See Ragin v. 
Harry Macklowe Real Estate Co., 801 F. Supp. 1213, 
1230-34 (S.D.N.Y. 1992). The district court declined to 
award punitive damages but entered an injunction pro­
hibiting the defendants from violating the Act by using 
display advertising that indicated a racial preference. See 
J.A. at 76-77.

In its August 25 opinion, the district court directed the 
parties to “[sjubmit judgments on notice.” Id. at 65. Both 
parties subsequently submitted proposed judgments based 
on the court’s opinion. Each judgment included a provi­
sion contemplating further proceedings to determine if 
attorneys’ fees would be awarded. In October of 1992, the 
district court entered a judgment in accordance with its 
decision. The judgment granted costs and disbursements 
to the plaintiffs but, in accordance with an order dated 
October 19, 1992 denying counsel fees, omitted any fee 
award. See id. at 73-77.

In their appeal, the plaintiffs argue that the district 
court erred in: calculating the amount of compensatory 
damages; declining to award punitive damages; issuing a 
weaker injunction than they requested; and declining to 
award them attorneys’ fees. In their cross appeal, the 
defendants argue that the district court erred in finding 
that the plaintiffs had standing to sue in federal court and 
in finding that the defendants violated the Act. For the 
reasons set forth below, we affirm the district court’s find­
ings with respect to standing, liability and damages, leave 
the injunction undisturbed and reverse and remand on the 
issue of attorneys’ fees.

6350



BACKGROUND

We assume familiarity with the facts set forth in the 
district court’s published opinion, see Ragin v. Harry 
Macklowe Real Estate Co., 801 F. Supp. 1213 (S.D.N.Y. 
1992), and therefore provide only a brief summary of the 
facts and circumstances giving rise to this action. The 
individual plaintiffs are two married couples who reside 
in New York City. All four are African Americans who 
hold graduate degrees in the fields of law, public policy, 
medicine or speech pathology. The OHC is a nonprofit 
corporation located in New York City. Its “mission” is to 
reduce the amount of segregation in, and to eliminate all 
discrimination from, the metropolitan residential housing 
market.

HMRE was the leasing agent and managing agent for 
two luxury residential apartment complexes in Manhattan. 
The first building, Riverterrace, is located at 515 East 
72nd Street. Between May of 1986 and April of 1987, 
HMRE placed six half-page or full-page display ads for 
Riverterrace in The New York Times. One of these ads 
(“HOME”) featured a photograph of three single white 
models engaging in sports or recreational activities and a 
photograph of a white couple embracing. A second ad 
(“New Year at 5:15”) portrayed four white models gath­
ering around a piano on New Year’s Eve. A third ad 
(“Live It Up at 5:15”) included three photographs: the 
scene depicted in the New Year at 5:15 ad, two white 
models at a swimming pool and a white couple on a ter­
race. The last three ads (“5:15 is the Time”) also each 
included three photographs: the scene featured in the New 
Year at 5:15 ad, a white couple in a swimming pool and a 
white model at a gym.

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The second building, Riverbank West, is located at 555 
West 42nd Street. Between April of 1987 and December 
of 1988, HMRE placed twenty-eight half-page or full- 
page display advertisements for Riverbank West in The 
New York Times. Three of the ads (“3-D”) featured a re­
creation of a famous Life magazine photograph depicting 
a movie audience of seventy-five white men and women 
wearing 3-D eyeglasses. All the individuals pictured in 
the 3-D ad were employees of either HMRE or the adver­
tising agency that created the ad. Three advertisements 
(“Lying on Beach”) depicted a young white woman lying 
in the sun next to an image of Riverbank West. Four ads 
(“Beach Bag”) showed a young white woman walking on 
a beach and swinging a bag with an image of Riverbank 
West rising out of the surf. Nine of the ads (“Lipstick”) 
depicted a white woman’s lips and fingers applying a lip­
stick in the shape of Riverbank West. Two ads (“Skier”) 
featured a white man skiing against a background of 
mountains among which was nestled Riverbank West. 
Two of the ads (“Get It”) depicted a white woman wear­
ing a bathing suit and lying in the ocean in front of an 
image of Riverbank West. The remaining five advertise­
ments (“Beauty & the Best”) showed a glamorous white 
woman “leaning toward a miniature image of Riverbank 
West.” 801 F. Supp. at 1221. The Beauty & the Best ads 
ran from September to December of 1988 and were the 
only HMRE advertisements that included an Equal Hous­
ing Opportunity logo.

The target group for Riverterrace consisted of indi­
viduals in the thirty-five to fifty-five-year-old age group 
with household incomes in excess of $75,000. The target 
group for Riverbank West consisted of individuals in the 
twenty-five to forty-five-year-old age group with house­
hold incomes in excess of $50,000. All the human models

6352



for these advertisements were chosen from stock photo­
graph books, which included both black and white mod­
els. The defendants never requested that black models be 
used in, or excluded from, the display ads for the two 
buildings.

In addition to placing ads in the print media, HMRE 
also advertised the two buildings by using direct mail, 
press releases, classified advertising, on-site brochures 
and signs, and radio advertisements and by placing ads on 
the sides of buses, which ran throughout Manhattan, 
including Harlem. None of the ads contained any lan­
guage that either explicitly or implicitly conveyed a dis­
criminatory message. Finally, there was no evidence 
presented that the defendants discriminated against 
minorities in the leasing of apartments in the two build­
ings.

The plaintiffs saw the defendants’ ads in The New York 
Times between August of 1985 and late 1988. In June of 
1987, the plaintiffs filed a complaint with the New York 
State Division of Human Rights (“SDHR”) against The 
Harry Macklowe Organization (the “Organization”).1 In 
their SDHR complaint, the plaintiffs alleged that the 
Organization had engaged in unlawful, discriminatory 
housing practices. In response to the plaintiffs’ adminis­
trative complaint, the SDHR initiated an administrative 
proceeding against the Organization. The administrative 
complaints were dated June 15, 1987, and contained alle­
gations that the display advertisements for Riverbank 
West and Riverterrace appearing in 1987 violated the New 
York State Human Rights Law because they did not 
include any black models. After receiving notice of the 
administrative complaints, Macklowe directed HMRE’s

1 The Organization is a trade name and has been dismissed from this 
action. See 801 F. Supp. at 1225 n.3.

6353



in-house counsel to conduct an investigation of their obli­
gations under the relevant housing statutes.

On May 10, 1988, the SDHR issued a finding of prob­
able cause against the Organization and recommended 
that a public hearing be held to determine if further action 
was warranted. A public hearing never was held, and no 
further administrative action was taken by the SDHR. 
After HMRE received notice of the probable cause find­
ing in May of 1988, all new layouts of display ads pub­
lished in The New York Times included the Equal Housing 
Opportunity logo, which apparently was smaller than the 
size prescribed by United States Department of Housing 
and Urban Development (“HUD”) regulations. See 24 
C.F.R. § 109.30(a) & app. I (1992). The logo also was 
placed on the existing bus posters, and a radio adver­
tisement for Riverbank West included the Equal Housing 
Opportunity slogan. A video advertisement for Riverbank 
West also displayed the logo and showed a black man 
using the health club with three other tenants.

The evidence introduced at trial indicated that the other 
real estate advertisements published on the same pages of 
The New York Times as the HMRE display ads also did 
not use black models and that most of the ads did not have 
the Equal Housing Opportunity logo. In addition to the 
testimony of the individual plaintiffs that they were 
offended when they saw these ads over a period of time, 
both sides presented expert testimony concerning whether 
the “ordinary” reader would view the defendants’ ads as 
expressing a racial preference. The defendants also 
offered the testimony of a black tenant from each of the 
two buildings. Both tenants testified that they saw some 
of the defendants’ ads but did not believe that they con­
veyed a racially exclusionary message.

6354



At the conclusion of the trial, the district court entered 
judgment for the plaintiffs; awarded less compensatory 
damages than those recommended by the advisory jury; 
declined to award punitive damages; entered an injunction 
prohibiting the defendants from continuing to use display 
ads that expressed a racial preference; and declined to 
award attorneys’ fees. Both sides timely appealed.

DISCUSSION

A. Standing
Section 804(c) of the FHA provides that it shall be 

unlawful
[t]o make, print, or publish, or cause to be made, 
printed, or published any notice, statement, or adver­
tisement, with respect to the sale or rental of a 
dwelling that indicates any preference, limitation, or 
discrimination based on race, color, religion, sex, 
handicap, familial status, or national origin, or an 
intention to make any such preference, limitation, or 
discrimination.

42 U.S.C. § 3604(c) (1988). Section 813(a) of the Act pro­
vides a private right of action to enforce the rights granted 
by section 804(c). See id. § 3613(a)(1)(A).

In those instances in which Congress expressly grants 
a private right of action to a class of persons to enforce a 
federal right, those persons have standing to sue in federal 
court so long as they satisfy the case or controversy 
requirement of Article III, viz., alleging “that [they] per­
sonally [have] suffered some actual or threatened injury 
as a result of the putatively illegal conduct of the defen­
dant.” Gladstone, Realtors v. Village o f Bellwood, 441

6355



U.S. 91, 99 (1979); see also Lujan v. Defenders o f 
Wildlife, 112 S. Ct. 2130, 2145 (1992). With these prin­
ciples in mind, we turn to the defendants’ arguments that 
neither the individual plaintiffs nor the OHC has standing 
to sue in federal court.

1. Individual Plaintiffs
The defendants argue in their cross appeal that the indi­

vidual plaintiffs have suffered no injury because they 
were not in the market for housing when they saw these 
ads but instead actively were combing the newspapers 
looking for these ads in order to bring a section 804(c) 
action. For the purpose of our discussion, we will assume 
that the plaintiffs were not actively looking for an apart­
ment when they viewed the defendants’ ads.2

The Supreme Court addressed the issue of private party 
standing to sue in FHA actions in Havens Realty Corp. v. 
Coleman, 455 U.S. 363 (1982). In Havens Realty, the 
defendants argued that “testers”—individuals who, with­
out the intent to rent an apartment, pose as renters for the 
purpose of collecting evidence of unlawful steering away 
of prospective minority purchasers by real estate agents—

2 According to Mrs. Cuyler, she and her husband were looking for real 
estate investments when they saw the defendants’ ads in The New York 
Times. See Tr. at 380. Mr. Ragin testified that he and his wife began 
checking into the availability of New York apartments in July of 1985 
while they were living in London. See id. at 335. By the time the first ad 
for Riverterrace ran in May of 1986, the Ragins had signed a subscrip­
tion agreement to purchase a co-op. Id. at 170. However, the Ragins con­
tinued actively to look for an apartment until the fall of 1986, when a 
dispute over whether their building would be converted into a co-op was 
settled. Id. at 180-81. By this time, the HOME ad for Riverterrace had 
been published in the May 11, 1986 edition of the Times. After they pur­
chased their co-op, the Ragins continued to read the real estate ads and 
signed a contract to purchase a ski home in Windham, New York in 
1991, although they eventually decided not to make the purchase. Id. at 
262.

6356



lacked standing to sue for violations of section 804(d) of 
the Act. Section 804(d) makes it unlawful for a person 
“[t]o represent to any person because of race . . . that any 
dwelling is not available for . . . rental when such 
dwelling is in fact so available.” 42 U.S.C. § 3604(d) 
(emphasis added). The Court rejected the defendants’ 
argument and held that a tester who “may have 
approached the real estate agent fully expecting that he 
would receive false information, and without any inten­
tion of buying or renting a home,” had standing to sue by 
virtue of his allegation that his statutorily created right to 
truthful information about the availability of housing was 
violated. Havens Realty, 455 U.S. at 374. The Court based 
its conclusion on the long-held principle that “[t]he actual 
or threatened injury required by Art. Ill may exist solely 
by virtue of ‘statutes creating legal rights, the invasion of 
which creates standing.’ ” Id. at 373 (quoting Warth v. 
Seldin, 422 U.S. 490, 500 (1975)); see also Lujan, 112 S. 
Ct. at 2145.

Here, Judge Sweet found that “a plaintiff who proves 
that she read the challenged advertisements and that the 
advertisements would indicate a racial preference to the 
ordinary reader ‘has suffered injury in precisely the form 
the [FHA] was intended to guard against, and therefore 
has standing to maintain a claim for damages under the 
Act’s provisions.’ ” 801 F. Supp. at 1229 (quoting Havens 
Realty, 455 U.S. at 373-74). We agree. There is no sig­
nificant difference between the statutorily recognized 
injury suffered by the tester in Havens Realty and the 
injury suffered by the Ragins and the Cuylers, who were 
confronted by advertisements indicating a preference 
based on race. See Saunders v. General Servs. Corp., 659 
F. Supp. 1042, 1053 (E.D. Va. 1987). Given the private 
attorney general provision in section 813(a) of the Act

6357



and the Supreme Court’s holding in Havens Realty, the 
district court was constrained to find that the individual 
plaintiffs had standing to bring this action in federal court.

2. OHC

The defendants also argue that the OHC does not have 
standing to bring this action in federal court on its own 
behalf. Like an individual plaintiff, an organization must 
show actual or threatened injury in fact that is “fairly 
traceable to the alleged illegal action and likely to be 
redressed by a favorable court decision.” Spann v. Colo­
nial Village, Inc., 899 F.2d 24, 27 (D.C. Cir.), cert, 
denied, 498 U.S. 980 (1990); see Havens Realty, 455 U.S. 
at 378 (“[h]as the plaintiff ‘ “alleged such a personal stake 
in the outcome of the controversy” as to warrant [the 
plaintiff’s] invocation of federal-court jurisdiction?’ ” 
(citations omitted)). Conversely, “an organization’s 
abstract concern with a subject that could be affected by 
an adjudication does not substitute for the concrete injury 
required by Art. III.” Simon v. Eastern Ky. Welfare Rights 
Org., 426 U.S. 26, 40 (1976).

In Havens Realty, the Court also discussed the criteria 
for an organization to have standing to bring an FHA 
claim on its own behalf. The Court held that a perceptible 
impairment of a housing organization’s ability to provide 
counseling and referral services constituted an actionable 
injury in fact. See Havens Realty, 455 U.S. at 379 (“[s]uch 
concrete and demonstrable injury to the organization’s 
activities—with the consequent drain on the organiza­
tion’s resources—constitutes far more than simply a set­
back to the organization’s abstract social interests”). The 
Court based its conclusion on the following allegation 
pleaded in the plaintiff’s complaint:

6358



Plaintiff . . . has been frustrated by defendants’ 
racial steering practices in its efforts to [obtain] equal 
access to housing through counseling and other refer­
ral services. Plaintiff . . . has had to devote signif­
icant resources to identify and counteract the 
defendant’s [sic] racially discriminatory steering 
practices.

Id.

Here, the injury sustained by the OHC as a result of the 
defendants’ advertisements was documented by the trial 
testimony of Ms. Phyllis Spiro, the deputy director of the 
OHC. Ms. Spiro testified that the services offered by the 
OHC included providing information at community sem­
inars about how to fight housing discrimination. Spiro tes­
tified that she and her small staff devoted substantial 
blocks of time to investigating and attempting to remedy 
the defendants’ advertisements. For example, Spiro 
detailed the steps she took to file the administrative com­
plaint with the SDHR, including identifying the buildings’ 
developers, the marketing agent and the advertising agent, 
as well as attending a conciliation conference. See Tr. at 
464-65, A ll -19, 485. Spiro also testified that the time she 
and her coworkers spent on matters related to this case 
prevented them from devoting their time and energies to 
other OHC matters. See id. at 419, 423. Finally, Spiro tes­
tified that she personally devoted 150 to 200 hours work­
ing on this case after the Ragins filed their complaint in 
federal court.

The district court concluded that the OHC established 
that its “activities relating to ‘identifying] and counter­
ac tin g ]’ the Defendants’ advertising practices detracted 
[sic] the attention of OHC staff members from their reg­
ular tasks at the OHC.” 801 F. Supp. at 1233 (quoting

6359



Havens Realty, 455 U.S at 379). We agree. Spiro’s testi­
mony demonstrated that the OHC was forced to “devote 
significant resources to identify and counteract” the 
defendants’ advertising practices and did so to the detri­
ment of their “efforts to [obtain] equal access to housing 
through counseling and other referral services.” Havens 
Realty, 455 U.S. at 379; see also Village of Bellwood v. 
Dwivedi, 895 F.2d 1521, 1526 (7th Cir. 1990) (“the only 
injury which need be shown to confer standing on a fair­
housing agency is deflection of the agency’s time and 
money from counseling to legal efforts directed against 
discrimination”). That some of the OHC staff’s time was 
spent exclusively on litigating this action does not deprive 
the organization of standing to sue in federal court. See 
Saunders, 659 F. Supp. at 1052. Having decided that the 
plaintiffs had standing to bring this action, we now pro­
ceed to address the merits of this appeal.

B. Liability
Two years ago, in Ragin v. New York Times Co., 923 

F.2d 995, 999 (2d Cir.), cert, denied, 112 S. Ct. 81 (1991), 
we held that a plaintiff could bring an action against a 
defendant for violating section 804(c) of the Act if the 
defendant’s housing ads “suggested] to an ordinary 
reader that a particular race [was] preferred or dispre- 
ferred for the housing in question,” regardless of the 
defendant’s intent, id. at 1000. We defined the ordinary 
reader as “neither the most suspicious nor the most insen­
sitive of our citizenry. Such a reader does not apply a 
mechanical test to every use of a model of a particular 
race.” Id. at 1002. Although we indicated that the intent 
of the defendant “may be relevant to a factual determi­
nation of the message conveyed,” the message conveyed

6360



to the ordinary reader was the “touchstone” of our inquiry. 
Id. at 1000.

In concluding that the defendants’ display ads violated 
the FHA, the district court found that

HMRE, through its agents, arranged for the ads[,]
. . . that Macklowe was actively involved in con­
ceptualizing and approving the ads as president of 
HMRE . . . .  [and] that, viewing the ads as many 
times and over the same period as they did, an ordi­
nary reader would naturally interpret the ads to ‘indi­
cate’ a racial preference.

801 F. Supp. at 1231. The district court based these find­
ings both on the fact that there were no black models in 
any of the ads, including the ad portraying seventy-five 
movie viewers, and on the number of occasions (between 
fourteen and twenty-five) when the individual plaintiffs 
viewed the ads between 1986 and 1988. See id. at 1232. 
Moreover, the district court noted that the advisory jury’s 
finding of liability also was probative of the ads’ effect on 
the ordinary reader. See id.

In reaching its conclusion, the district court did not rely 
on the expert testimony presented by the parties, finding 
such testimony to be inconclusive. See id. at 1231. The 
district court also gave limited weight to the individual 
plaintiffs’ testimony because of their “commitment to 
their cause and heightened sensitivity attributable to an 
awareness of historical patterns of housing discrimination 
and personal experiences with segregation.” Id. The dis­
trict court declined to credit the testimony of the two 
black residents living in the defendants’ buildings because 
“they did not view the same variety or number of ads over 
the same duration as the Plaintiffs” and because their tes­
timony was affected by their experiences after having

6361



lived in the buildings. Id. at 1232. Finally, the district 
court declined to consider evidence of the racial compo­
sition of Riverterrace and Riverbank West because that 
evidence was “not probative of the ordinary reader’s 
interpretation of the ads.” Id.

In their cross appeal, the defendants argue that the dis­
trict court erred in finding them liable for violating sec­
tion 804(c) because the plaintiffs failed to present any 
expert testimony or survey evidence regarding whether 
the ordinary reader (rather than the ordinary black reader) 
would find that their ads indicated a racial preference; 
there was no evidence of discriminatory intent on their 
behalf; and there was no evidence that the ads had a dis­
criminatory effect on the racial composition of their build­
ings. We find these arguments to be unpersuasive.

We never have held that a plaintiff is required to submit 
survey evidence or expert testimony to prove whether the 
ordinary reader would find an advertisement to express a 
racial preference, and we decline to do so here. Defen­
dants’ reliance on our requirement that plaintiffs submit 
such evidence to prove confusion in trademark infringe­
ment cases, see, e.g., Johnson & Johnson * Merck Con­
sumer Pharmaceuticals Co. v. Smithkline Beecham Corp., 
960 F.2d 294, 298 (2d Cir. 1992), is misplaced. In trade­
mark infringement cases, the inquiry focuses on whether 
there is a likelihood that a defendant’s mark will confuse 
a group of customers. Id. at 297-98. In contrast, the 
inquiry directed by Ragin is whether a hypothetical ordi­
nary reader would find that a defendant’s ads expressed 
an impermissible racial preference. Like the inquiry in 
negligence cases concerning whether a defendant’s con­
duct conformed with that of the reasonable person, this 
question is one that the factfinder can answer by viewing 
the ads and the defendants’ conduct and then applying

6362



common sense. Cf. Washington Hosp. Ctr. v. Butler, 384 
F.2d 331, 336 (D.C. Cir. 1967) (no need for expert testi­
mony to resolve issue that would not “extend the jury 
beyond the range of ordinary lay knowledge and experi­
ence”). No expert testimony or survey evidence is nec­
essary, although such evidence no doubt is admissible.

In Rag in we explicitly rejected the argument that a 
showing of discriminatory intent or discriminatory effect 
is required to prove a prima facie violation of section 
804(c). See 923 F.2d at 1000 (intent is relevant but not 
dispositive). Our holding in Soules v. United States 
Department o f Housing & Urban Development, 967 F,2d 
817 (2d Cir. 1992), does not, as defendants argue, require 
a showing of intent. Relying on Ragin, the Soules court 
observed that “factfinders may examine intent, not 
because a lack o f design constitutes an affirmative 
defense to an FHA violation, but because it helps deter­
mine the manner in which a statement was made and the 
way an ordinary listener would have interpreted it.” Id. at 
825 (emphasis added). Here, Judge Sweet considered the 
defendants’ lack of discriminatory intent and the absence 
of any discriminatory effect in determining liability and 
still concluded that an ordinary reader would find that 
their ads expressed a racial preference. We agree with that 
conclusion. See Saunders, 659 F. Supp. at 1058 (“plain­
tiffs need not establish that defendants intended to express 
a racial preference” to prove that the Act was violated).

C. Compensatory Damages
When a district court sits as a factfinder, we will 

reverse its computation of damages only if they are 
clearly erroneous. United States Naval Inst. v. Charter 
Communications, Inc., 936 F.2d 692, 697 (2d Cir. 1991); 
see Fed. R. Civ. P. 52(a). Plaintiffs’ attempt to charac-

6363



terize the district court’s damages findings as a remittitur 
of the advisory jury’s recommendations does not change 
this standard. As the Fifth Circuit observed almost twenty 
years ago:

[A district court] is not bound by the findings of the 
advisory jury, which it is free to adopt in whole or in 
part or to totally disregard. . . . Hence our concern 
with the trial court’s findings is not whether they 
dovetail perfectly with the jury verdict. We are con­
cerned rather with whether those findings pass 
muster under the “clearly erroneous” standard of 
[Fed. R. Civ. P.] 52(a) . . . .

Sheila’s Shine Prods., Inc. v. Sheila Shine, Inc. 486 F.2d 
114, 122 (5th Cir. 1973) (citation omitted); see also Mal­
lory v. Citizens Utils. Co., 342 F.2d 796, 797 (2d Cir. 
1965) (“When an advisory jury is used, the ‘review on 
appeal is from the court’s judgment as though no jury had 
been present.’ ” (quoting (American) Lumbermens Mut. 
Casualty Co. v. Timms & Howard, Inc., 108 F.2d 497, 500 
(2d Cir. 1939))); 9 Charles A. Wright & Arthur R. Miller, 
Federal Practice and Procedure § 2335, at 126 (1971) (“it 
is wholly in [the district court’s] discretion whether to 
accept or reject, in whole or in part, the verdict of the 
[advisory] jury”). Having articulated the proper standard 
of review, we proceed to address the plaintiffs’ arguments.

1. Damages Awarded to Individual Plaintiffs

It is axiomatic that civil rights plaintiffs may recover 
compensatory damages for emotional distress. See, e.g., 
Baskin v. Parker, 602 F.2d 1205, 1209 (5th Cir. 1979) (per 
curiam); Fort v. White, 530 F.2d 1113, 1116 (2d Cir. 
1976); Steele v. Title Realty Co., 478 F.2d 380, 384 (10th 
Cir. 1973). The district court awarded $2500 to each of

6364



the four individual plaintiffs to compensate them for the 
emotional distress they suffered as a result of viewing the 
defendants’ ads. In determining the damages suffered by 
the individual plaintiffs, the district court found that 
“ [t]heir testimony credibly established that they took 
offense at the ads and that the indignation, humiliation 
and distress they suffered was directly attributable, at 
least in part, to the Defendants’ conduct.” 801 F. Supp. at 
1233. However, the district court declined to credit their 
testimony that their distress was caused only by the defen­
dants’ ads. Instead, the district court found that the indi­
vidual plaintiffs’ emotional distress partly was caused by 
viewing display ads that were not published by the defen­
dants and that their distress was aggravated by their past 
experiences with, and heightened sensitivities to, racial 
discrimination. See id. at 1234. Finally, the district court 
found that the emotional distress sustained by the indi­
vidual plaintiffs was not so severe as to justify a damage 
award larger than $2500 per person. See id.

Plaintiffs principally argue that the district court’s dam­
ages award should be set aside for two reasons, neither of 
which we find persuasive. First, plaintiffs argue that, in 
discounting their past experiences with racial discrimi­
nation, the district court ignored the well-established prin­
ciple of tort law that a tortfeasor “takes the plaintiff as he 
finds him.” Maurer v. United States, 668 F.2d 98, 100 (2d 
Cir. 1981) (per curiam); see also Restatement (Second) of 
Torts § 435, at 454 (1965); W. Page Keeton et al., Prosser 
and Keeton on the Law o f Torts § 43, at 292 (5th ed. 
1984). This argument ignores the fact that the “eggshell 
skull” doctrine has been applied only in cases where the 
plaintiff suffered physical injuries. See, e.g., Munn v. 
Algee, 924 F.2d 568, 576 (5th Cir.), cert, denied, 112 S. 
Ct. 277 (1991); Keeton et al., supra, § 43, at 291 (“[t]he

6365



defendant is held liable when the defendant’s negligence 
operates upon a concealed physical condition”) (empha­
sis added).

Plaintiffs also argue that the district court’s finding that 
they failed to establish a strong causal link between the 
distress they suffered as a result of viewing the defen­
dants’ ads and the distress they suffered as a result of 
viewing other ads was based on a misinterpretation of 
their testimony. In Ragin, we emphasized that “liability 
may not be based on an aggregation of advertisements by 
different advertisers.” 923 F.2d at 1001-02. The district 
court’s findings with respect to the issue of causation 
were based on its assessment of the plaintiffs’ credibility. 
After reviewing the trial transcript, we see no basis for 
disturbing the district court’s assessment of the plaintiffs’ 
credibility. Cf. Morgan v. Secretary o f Hous. & Urban 
Dev., 985 F.2d 1451, 1459-60 (10th Cir. 1993) (ALJ’s 
award of $5000 to FHA plaintiff for emotional distress 
not supported by substantial weight of the evidence where 
plaintiff failed to prove causal connection between dis­
tress and defendant’s refusal to rent based on familial sta­
tus).

In affirming the damages awarded by the district court 
for emotional distress, we echo the view expressed by the 
Ragin court that there exists a “potential for large num­
bers of truly baseless claims for emotional injury,” that 
“there appears to be no ready device, other than wholly 
speculative judgments as to credibility, to separate the 
genuine from the baseless,” and that it is the responsi­
bility of district courts to “keep such awards within rea­
son.” 923 F.2d at 1005. Although the Ragin court 
expressed this view in the context of the potential for 
unreasonably high damage awards against newspapers, we 
find it pertinent to all section 804(c) cases in which plain-

6366



tiffs recover damages only for emotional distress. Cf. 
Housing Opportunities Made Equal, Inc. v. Cincinnati 
Enquirer, Inc., 943 F.2d 644, 666 n.12 (6th Cir. 1991) 
(Keith, J., dissenting) (where an FHA violation is “based 
only upon the use of white models, individual emotional 
distress damages would, in the ordinary case, be too spec­
ulative as a matter of law”).

Finally, we agree with the district court that the dam­
ages awarded were appropriate in light of the plaintiffs’ 
failure to prove severe emotional distress. See 801 F. 
Supp. at 1234 (“[Njone of the Individual Plaintiffs fe[lt] 
further inhibited or deterred by his or her experience with 
these ads from seeking housing wherever desired[, and 
njone sustained depression that has affected their rela­
tionships, ability to work or ability to function.”). The 
damages awarded here were commensurate with those 
awarded in the only other reported section 804(c) case, 
see Saunders, 659 F. Supp. at 1061 ($2500), and with 
those awarded in section 804(d) steering cases, where the 
causal connections between the defendants’ acts and the 
plaintiffs’ damages were never in doubt, see, e.g., United 
States v. Balistrieri, 981 F.2d 916, 930-33 (7th Cir. 1992) 
($2000), petition for cert, filed, No. 92-1690, 61 U.S.L.W. 
3742 (U.S. Apr. 19, 1993); Douglas v. Metro Rental 
Servs., Inc., 827 F.2d 252, 256-57 (7th Cir. 1987) (dam­
ages awarded to plaintiffs remitted to $2500 per plaintiff 
because emotional distress was not severe); Hamilton v. 
Svatik, 779 F.2d 383, 388-89 (7th Cir. 1985) (court 
affirms $12,000 damage award for emotional distress but 
emphasizes that award was “very close to being exces­
sive”). Cf. Littlefield v. McGuffey, 954 F.2d 1337, 1348- 
49 (7th Cir. 1992) ($50,000 emotional distress award 
upheld in FFIA action where jury found defendant inten­
tionally inflicted emotional distress and distress was

6367



severe); Secretary, United States Dep’t o f Hous. & Urban 
Dev. v. Blackwell, 908 F.2d 864, 872-73 (11th Cir. 1990) 
($40,000 award to FHA plaintiff for emotional distress 
affirmed where defendant refused to rent on the basis of 
race and where plaintiff’s distress was severe enough to 
include physical manifestations).

2. Damages Awarded to OHC
The OHC argues that the district court committed clear 

error in declining to award it damages to compensate it 
for the cost of the time and effort it must devote in the 
future to counteract the adverse effects of the defendants’ 
ads. For example, Spiro testified that she would like to 
buy a full-page ad in The New York Times for $35,000 to 
inform the public that the defendants’ ads are misleading 
and that people have the right to live where they want. See 
Tr. at 505-06. The district court declined to compensate 
the OHC for these costs, finding that the OHC failed to 
establish that

its efforts to assist equal access to housing have been 
frustrated by the Defendants’ ads. . . . [T]here was 
no evidence that the OHC was forced to increase its 
educational, counselling or referral services due to 
the Defendants’ ads in particular. . . . [T]he OHC 
received no complaints about the Defendants’ ads 
and Spiro conceded that she was unaware of the 
impact of Defendants’ ads on anyone other than the 
Individual Plaintiffs.

801 F. Supp. at 1233. While the court in Saunders 
awarded the organizational plaintiff damages similar to 
those requested by the OHC, see 659 F. Supp, at 1060-61, 
we cannot say that Judge Sweet clearly erred in his anal­
ysis of the evidentiary record that was before him.

6368



D. Punitive Damages

Plaintiffs next argue that the district court erred in 
declining to award punitive damages. Punitive damages 
may be awarded for violations of federal law where a 
defendant acts with “reckless or callous disregard for the 
plaintiff’s rights, [and] intentionally] violates] federal 
law.” Smith v. Wade, 461 U.S. 30, 51 (1983); see Bal- 
istrieri, 981 F.2d at 936; see also Saunders, 659 F. Supp. 
at 1061 (plaintiffs must prove that defendants acted “wan­
tonly or willfully or were motivated by ill will, malice, or 
a desire to injure the plaintiffs”). We review a district 
court’s decision not to award punitive damages for abuse 
of discretion. McCann v. Coughlin, 698 F.2d 112, 127 (2d 
Cir. 1983).

In declining to award punitive damages, the district 
court held that the absence of any intent to discriminate 
on the part of the defendants in placing the ads precluded, 
as a matter of law, “a finding of wanton, willful or mali­
cious behavior.” 801 F. Supp. at 1235. The district court 
also found that the defendants’ continued use of display 
advertisements that failed to include any black models 
after the SDHR determination of probable cause did not 
constitute a reckless or callous disregard for plaintiffs’ 
rights or an intentional violation of federal law. See id. 
The district court based this conclusion on the facts that: 
(1) the issuance of a determination of probable cause was 
not dispositive of whether a federal right was violated 
because it merely concluded that “no Blacks were used as 
human models” and that probable cause existed to support 
the allegations in the administrative complaint; (2) Mack- 
lowe subsequently consulted with HMRE’s in-house 
counsel to determine whether HMRE had violated any 
federal laws; and (3) HMRE, after it received notice of 
the administrative complaints, “included an Equal Hous-

6369



ing Opportunity logo in [its] print and bus ads and 
included a verbal advisory to this effect in radio ads.” Id. 
Based on the above analysis, the district court did not 
abuse its discretion in declining to award punitive dam­
ages.

E. Injunctive Relief

The district court’s injunction prohibited the defendants 
from continuing to use advertisements that “violate[ ] [the 
FHA], and indicate[ ] to the ordinary reader any prefer­
ence, limitation or discrimination based upon race or 
color, or an intention to make such preference, limitation 
or discrimination or that the housing or dwelling being 
advertised is not open to all without regard to race or 
color.” J.A. at 76-77. We review the scope of a district 
court’s injunction for abuse of discretion. Nikon Inc. v. 
Ikon Corp., 987 F.2d 91, 94 (2d Cir. 1993).

The plaintiffs argue that the injunction was inadequate 
because it did not require that “the models should be 
clearly definable as reasonably representing majority and 
minority groups in the metropolitan area,” Appellants’ 
Brief at 35 (quoting 24 C.F.R. § 109.30(b)) (emphasis 
added in Appellants’ Brief), and because it did not require 
that defendants’ ads include the Equal Housing Oppor­
tunity logo, as required by 24 C.F.R. § 109.30(a). 
Notwithstanding plaintiffs’ contention that these provi­
sions often are included in consent decrees resolving sec­
tion 804(c) litigation, we do not believe the district court 
abused its discretion in declining to include the requested 
HUD regulation language or logo in the injunction. As the 
district court wisely observed, entering an injunction 
requiring the use of proportional representation for blacks 
in real estate display advertising would put district courts

6370



in the position of becoming “an abettor to discrimination 
against other groups.” 801 F. Supp. at 1236.

The plaintiffs also criticize the injunction for failing to 
“set any standard to constrain or guide the defendants 
with regard to future all-white advertising programs” and 
for acting as “an invitation to future litigation.” Appel­
lants’ Brief at 34; see Fed. R. Civ. P. 65(d) (injunction 
must “describe in reasonable detail, and not by reference 
to the complaint or other document, the act or acts sought 
to be restrained”). This argument might have merit if it 
were being made by the defendants. See, e.g., Interna­
tional Longshoremen’s Ass’n v. Philadelphia Marine 
Trade Ass’n, 389 U.S. 64, 74 (1967); Keyes v. School 
Dist. No. 1, Denver, Colo., 895 F.2d 659, 668 (10th Cir. 
1990), cert, denied, 498 U.S. 1082 (1991). However, in 
the absence of a claim by the defendants that the injunc­
tion regulating their future conduct is vague and impos­
sible to follow, and given the plaintiffs’ ability to bring 
contempt proceedings if the defendants fail to comply 
with the injunction, see, e.g., Still’s Pharmacy, Inc. v. 
Cuomo, 981 F.2d 632, 635 (2d Cir. 1992), we cannot find 
an abuse of discretion on the part of the district court.

F. Attorneys’ Fees
Finally, the plaintiffs argue that the district court erred 

in declining to award them attorneys’ fees. Prior to 1988, 
a district court could award attorneys’ fees to a prevailing 
plaintiff in an FHA action if the plaintiff was “not finan­
cially able to assume said attorney’s fees.” 42 U.S.C. 
§ 3612(c) (1982) (the “unamended statute”). The amend­
ments to the FHA, signed into law on September 13, 
1988, and effective 180 days later on March 18, 1989, 
provide that a district court “in its discretion, may allow

6371



the prevailing party . . .  a reasonable attorney’s fee and 
costs.” 42 U.S.C. § 3613(c)(2) (1988) (the “amendment”).

Although the district court did not hold a separate hear­
ing on the issue of attorneys’ fees, it declined to award 
attorneys’ fees to the plaintiffs, apparently basing its deci­
sion on some evidence of the financial situation of the 
plaintiffs that was adduced at trial. In its one-and-a-half- 
page order declining to award attorneys’ fees, the district 
court stated: “In view of the evidence concerning the 
financial ability of the plaintiffs . . . and the nature of the 
action and the relief granted, . . . counsel fees are not 
necessary or appropriate to further the purposes of the 
Fair Housing A c t. . . .” J.A. at 73. The district court’s 
reference to the “financial ability of the plaintiffs” indi­
cates that it was applying the unamended statute to all 
legal work performed. Because this action was com­
menced before the effective date of the amendment and 
was concluded after that date, we will address separately 
the district court’s decision to apply the unamended 
statute to legal work performed both before and after the 
effective date of the amendment.

1. Legal Services Rendered After the Effective Date of 
the Amendment

In declining to apply the amendment prospectively to 
legal services rendered subsequent to the effective date of 
the amendment, the district court apparently reasoned 
that, because this action was filed prior to the effective 
date of the amendment, all legal work performed in the 
case “related back” to the filing date. In Morgan Guaranty 
Trust Co. v. Republic o f Palau, 971 F.2d 917, 922 (2d Cir. 
1992), we held that attorneys’ fees may be awarded for 
services performed subsequent to the effective date of a 
statute that authorized the award of such fees even though

6372



the action had been commenced before the effective date 
of the statute. Thus, the district court improperly declined 
to apply the amendment in determining whether plaintiffs 
were entitled to attorneys’ fees for legal work performed 
after the effective date of the amendment, and it must 
make such a determination on remand.

2. Legal Services Rendered Prior to the Effective Date 
of the Amendment

The issue of whether the amendment should be applied 
retroactively is one of first impression in this Circuit. 
HUD recommends that the amendment be applied retroac­
tively, see 54 Fed. Reg. 3232, 3259 (1989), and one of our 
sister circuits has adopted that recommendation, see L it­
tlefield, 954 F.2d at 1345. In Kaiser Aluminum & Chem­
ical Corp. v. Bonjorno, 494 U.S. 827, 837 (1990), the 
Supreme Court noted, but failed to resolve, the tension in 
its retroactivity jurisprudence. Compare Bradley v. School 
Bd. o f City o f Richmond, 416 U.S. 696, 711 (1974) (court 
should “apply the law in effect at the time it renders its 
decision, unless doing so would result in manifest injus­
tice or there is statutory direction or legislative history to 
the contrary”) with Bowen v. Georgetown Univ. Hosp., 
488 U.S. 204, 208 (1988) (“Retroactivity is not favored in 
the law. Thus, congressional enactments and administra­
tive rules will not be construed to have retroactive effect 
unless their language requires this result.”). Recently, in 
Butts v. City o f New York Department o f Housing Preser­
vation & Development, 990 F.2d 1397, 1409-11 (2d Cir. 
1993), we decided to adopt the retroactivity rule articu­
lated in Bowen. Thus, the district court properly declined 
to apply the amendment retroactively to legal work per­
formed prior to the effective date of the amendment.

6373



Even though the district court properly applied the una­
mended statute to legal services performed prior to the 
effective date of the amendment, it nevertheless erred in 
declining to award fees on the basis of the plaintiffs’ abil­
ity to pay, given the limited evidence that was adduced at 
trial and the expectations of the parties that further pro­
ceedings would be conducted on this issue. For example, 
although the plaintiffs testified about their household 
incomes, see, e.g., Tr. at 261, no evidence was presented 
that would have allowed the district court to compare the 
plaintiffs’ net worth with the amount of the fee request. 
See Johnson v. New York City Transit Auth., 823 F.2d 31, 
33 (2d Cir. 1987) (per curiam); Farad  v. Hickey-Freeman 
Co., 607 F.2d 1025, 1028-29 (2d Cir. 1979). The proposed 
judgments submitted by the parties indicated that they 
contemplated that further proceedings on the issue of 
attorneys’ fees would take place in the future. In the 
absence of such proceedings, a remand is required also to 
determine whether the plaintiffs met the criteria estab­
lished in the unamended statute for attorneys’ fees 
incurred prior to the effective date of the amendment.

CONCLUSION

The district court’s findings with respect to standing, 
liability, damages and injunctive relief are affirmed. The 
district court’s findings with respect to the award of attor­
neys’ fees are reversed and remanded for further pro­
ceedings consistent with the foregoing.

6374
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