Alexander v. Riga Petition for Rehearing and/or Rehearing En Banc

    UNITED STATES COURT OF APPEALS 
FOR THE THIRD CIRCUIT

Nos. 98-3597 and 98-3622

RONALD ALEXANDER; FAYE ALEXANDER; FAIR HOUSING 
PARTNERSHIP OF GREATER PITTSBURGH, INC.

Appellants/Cross Appellees,

v.

JOSEPH RIGA; MARIA RIGA, 
a/k/a CARLA AGNOTTI,

Appellees/Cross Appellants.

Appeal from the United States District Court 
for the Western District of Pennsylvania 

Civil Action No. 95-1239

PETITION FOR REHEARING AND/OR REHEARING EN BANC

Filed on Behalf of 

JOSEPH RIGA and MARIA RIGA

Thomas M. Hardiman 
Joseph P. McHugh

REED SMITH SHAW & MCCLAY LLP 
435 Sixth Avenue 
Pittsburgh, PA 15219 
(412) 288-4230/7236

Counsel for Appellees/Cross Appellants



TABLE OF CONTENTS
Page

TABLE OF AUTHORITIES..............................................................................  ii
REQUIRED STATEMENT FOR REHEARING EN BANC..........................  iv
I. BACKGROUND................................................................................... . 1
II. GROUNDS FOR REHEARING.............................................................. 4

A. The Panel's Holding That A Plaintiff In A Fair 
Housing Act Case Need Not Prove That The 
Discrimination Was A Legal Cause Of Harm 
Is Without Precedent And Conflicts With The 
Supreme Court's Decision in Curtis and This
Court's Decision in Gunbv....................................................... . 4

B. The Panel's Holding That Mr. Riga Could Be 
Vicariously Liable For Punitive Damages Is A 
Matter Of First Impression And Conflicts 
With The Supreme Court's Opinions In 
Smith and Kolstad, As Well As With Decisions
Of Other United States Courts Of Appeals............................. . 8

C. The Panel's Holding That FHP Has Standing 
Conflicts With This Court's Decision In 
Montgomery Newspapers. As Well As With 
Decisions of The United States Court Of Appeals
For The District Of Columbia Circuit......................... ................  11

CONCLUSION.................................... ...............................................................  14

CERTIFICATION OF BAR MEMBERSHIP 

APPENDIX

CERTIFICATE OF SERVICE



TABLE OF AUTHORITIES
Page

CASES

Carey v. Piphus, 435 U.S. 247 (1978)...................................................... passim

Curtis v. Loether, 415 U.S. 189 0974).................................................... passim

Fair Housing Council of Suburban Philadelphia v.
Montgomery Newspapers, 28 F. 3d 1268 (3d Cir. 1998)............  passim

Fair Housing Council of Greater Washington. Inc, v. BMC
Marketing Corp.. 28 F. 3d 1268 fD.C. Cir. 1994)........................  12

Gore v. Turner. 563 F.2d 159 (5th Cir. 1977)...................................... . .. 7

Gunby v. Pennsylvania Electric Co.. 849 F.2d 1108
(3d Cir. 1988)................................... ..............................................  passim

Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982)........................  13

Kolstad v. American Dental Association, 527 U.S. 526 (1999)...........  passim

Smith v. Wade. 461 U.S. 30 (1983)................................................ .........  iv, 8

Spann v. Colonial Village. Inc., 899 F.2d 24 (D.C. Cir. 1990).............. 11

STATUTES

Page

42U.S.C. § 3601........................................................................................  2

42 U.S.C. §§ 3613(a)(1)(A)......................................................................  6

42U.S.C. §§ 3604...................................................................................... 6

OTHER AUTHORITIES

C. McCormick, Law o f Damages, 280 (1935)........................................  9

Restatement (Second) of Agency (1957).................................................  9,10

Restatement (Second) of Torts § 909 at 468, Comment b......... ...........  10

-ii-



PETITION FOR REHEARING AND/OR REHEARING EN BANC

Appellees/Cross Appellants, Joseph and Maria Riga, by their counsel 

and pursuant to Rules 35 and 40 of the Federal Rules of Appellate Procedure, 

respectfully petition this Court to grant rehearing and/or rehearing en banc with 

respect to the opinion and judgment of a panel of this Court filed on March 22, 

2000. After consideration of the written and oral arguments of the parties, the 

panel reversed the district court's entry of judgment for the Rigas as against 

Appellants/Cross Appellees Ronald and Faye Alexander and the district court's 

decision declining to submit the question of punitive damages to the jury. Copies 

of the opinion and the judgment are attached hereto as Exhibit A.

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REQUIRED STATEMENT FOR REHEARING EN BANC

I express a belief, based on a reasoned and studied professional 

judgment, that the panel decision is contrary to decisions of the United States 

Court of Appeals for the Third Circuit and the Supreme Court of the United States, 

and that consideration by the full Court is necessary to secure and maintain 

uniformity of decisions in this Court, to wit:

A. The Panel's Holding That A Plaintiff In A Fair 
Housing Act Case Need Not Prove That The 
Discrimination Was A Legal Cause Of Harm 
Is Without Precedent And Conflicts With The 
Supreme Court's Decision in Curtis and This 
Court's Decision in Gunbv

B. The Panel's Holding That Mr. Riga Could Be 
Vicariously Liable For Punitive Damages Is A 
Matter Of First Impression And Conflicts 
With The Supreme Court's Opinions In 
Smith and Kolstad. As Well As With Decisions 
Of Other United States Courts Of Appeals

C. The Panel's Flolding That FHP Has Standing 
Conflicts With This Court's Decision In 
Montgomery Newspapers. As Well As With 
Decisions of The United States Court Of Appeals 
For The District Of Columbia Circuit

Moreover, this appeal involves questions of exceptional importance 

to courts and litigants within this Circuit: whether discrimination automatically 

equals harm such that a jury need not find that the discrimination actually caused 

harm to a particular plaintiff; whether a husband can be vicariously liable for his 

wife's discriminatory conduct unless the husband affirmatively tells his wife not to

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discriminate; and whether a fair housing organization can create standing for itself 

by doing what it exists to do — investigating discrimination.

REED SMITH SHAW & McCLAY LLP

By: Thomas M. Hardiman

-v-



I. BACKGROUND

In 1996, the Alexanders and FHP sued the Rigas, alleging that Mrs. 

Riga had discriminated against the Alexanders by refusing to show them an 

apartment and lying to them about the apartment's availability. After the 

Alexanders enlisted friends to conduct some "testing," the FHP got involved by 

sending "testers" to the property. At all pertinent times, Mr. Riga, who owns the 

property jointly with his wife, was in Italy. The Rigas moved for summary 

judgment, arguing that the Alexanders could not prove they were qualified to rent 

the apartment and that FHP lacked standing to sue because it was merely doing 

what it received hundreds of thousands of federal dollars to do — investigate 

discrimination.

The district court denied the summary judgment motion and a jury 

trial was held in May 1998. The jury found that Mrs. Riga had discriminated 

against the Alexanders but, having heard all of the Alexanders' testimony, 

concluded that the discrimination had not been a legal cause of harm to the 

Alexanders. Accordingly, the Alexanders were not awarded any damages. The 

jury concluded that the discrimination against the Alexanders had been a legal 

cause of harm to FHP but, as with the Alexanders, awarded zero dollars in 

damages. The district court entered judgment for the Rigas against the Alexanders 

and judgment for FHP against the Rigas. Because the jury found neither causation 

nor damages, the district court refused to send the issue of punitive damages to the 

jury, concluding that the Rigas had not been found liable to the Alexanders.

On appeal, the Alexanders argued in pertinent part that they were 

entitled to compensatory or at least nominal damages because discrimination 

equals harm regardless of causation. They also claimed that the issue of punitive 

damages should have been sent to the jury because punitive damages can be 

awarded even when no actual damages are recovered. FHP appealed, arguing that



it was entitled to at least nominal damages because the jury had found the Rigas 

liable to FHP.

In response, the Rigas argued that judgment had been entered 

properly against the Alexanders because the jury, by finding that the 

discrimination had not been a legal cause of harm, had determined that the 

Alexanders did not prove their case. The Rigas also argued that the district court 

had correctly refused to send the issue of punitive damages to the jury because 

there was no finding of liability and the jury's decision to award zero dollars in 

damages reflected the absence of the type of "discrimination-plus" conduct 

necessary to warrant punitive damages. The Rigas also cross-appealed on the 

issue of FHP's standing, arguing that this Court's decision denying standing to a 

fair housing organization in Fair Housing Council of Suburban Philadelphia v. 

Montgomery Newspapers. 141 F.3d 71 (3d Cir. 1998) (Mansmann, J.) was directly 

on point.

Citing to no cases and attempting to distinguish rather than overrule 

this Court's opinion in Gunbv v. Pennsylvania Electric Co.. 840 F.2d 1108 (3d Cir. 

1988), a panel of this Court concluded that proving discrimination is all that is 

required to prove a claim under the Fair Housing Act, 42 U.S.C. § 3601, et seq. 

However, the panel found that Plaintiffs had waived their right to compensatory or 

nominal damages by failing to object to the district court's instructions on 

causation and damages.

At the same time, however, the panel held that the issue of punitive 

damages should have been sent to the jury because the evidence of Mrs. Riga's 

conduct was sufficient for a jury to find reckless or callous indifference to 

federally protected rights. In addition, the panel concluded, as a matter of first 

impression, that Mr. Riga, could be vicariously liable for punitive damages unless

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the jury concluded that he had engaged in active anti-discrimination efforts despite 

the fact that he was in Italy at all pertinent times.

As to FHP, the Opinion disposed of the Rigas' standing argument in a 

footnote, completely ignoring this Court's opinion in Montgomery Newspapers 

(Mansmann, J.). The Opinion does not even cite the case, let alone attempt to 

distinguish it. And the Opinion ignores the fact that the jury had concluded there 

was no real harm to FHP, awarding zero dollars in damages to FHP. Instead, the 

Court made its own factual determination — which was contrary to the evidence at 

trial — that FHP's ability to carry out its mission had been impaired because it had 

devoted all of its attention to this case to investigate and counter the Rigas’ 

conduct.

The panel's holdings on causation and vicarious liability for punitive 

damages are unprecedented and contrary to decisions of this Court and the 

Supreme Court. This Court in Gunbv actually reversed a jury verdict and damage 

award for a discrimination plaintiff on the basis that the plaintiff did not prove 

emotional distress. In other words, the plaintiff had to prove harm. It was not 

enough just to prove discrimination. But the panel here has done the opposite, 

reversing a jury verdict which found that there had been no harm and declaring, 

without citation to any cases, that discrimination itself equals legal harm. 

Regarding vicarious liability for punitive damages, the Court has pushed the 

Supreme Court's opinion in Kolstad to an extreme it could not have contemplated. 

The Opinion essentially requires a husband to affirmatively direct his wife not to 

engage in discrimination and if he fails to do so, he can be punished for his wife's 

discriminatory conduct.

On the FHP standing issue, as already noted, the panel supplanted the 

jury's fact-finding. More importantly, in terms of the need for rehearing, the panel 

utterly ignored an opinion of this Court just two years old which is directly
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contrary to the result in this case. The standing ruling in this case and the ruling in 

Montgomery Newspapers cannot be reconciled. This Court was correct the first 

time it considered the issue and the panel's ruling in this case should be set aside.

II. GROUNDS FOR REHEARING

The Rigas suggest three issues for rehearing. First, the panel 

mistakenly concluded that a plaintiff in a Fair Flousing Act case need prove 

nothing more than discrimination to establish liability and damages. Neither the 

parties, amici curiae, nor the panel has found any precedent for this ruling and it is 

contrary to this Court's decision in Gunbv. Second, the panel erred in ruling as a 

matter of first impression that a husband who owns rental property with his wife 

can be punished for his wife's discriminatory conduct unless he affirmatively acts 

to try to prevent discrimination. That ruling is an improper extension of the 

Supreme Court's opinion in Kolstad. Third, the panel completely ignored its 

recent decision in Montgomery Newspapers and held that a fair housing 

organization has standing to sue whenever it diverts resources to litigation.

A. The Panel's Holding That A Plaintiff In A Fair Housing
Act Case Need Not Prove That The Discrimination 
Was A Legal Cause Of Harm Is Without Precedent And 
Conflicts With The Supreme Court's Decision In 
Curtis And This Court's Decision In Gunby.
After considering eight days of testimony, the jury in this case 

concluded that any discrimination by Mrs. Riga was not a legal cause of harm to 

the Alexanders. Without citing any cases, this panel concluded "that the District 

Court misstated the proper legal standard in this Fair Housing Act case by 

requiring ‘legal causation’ beyond a showing of illegal discrimination." See 

Opinion at 11. In fact, the district court's ruling was a correct application of law as 

reflected in opinions of the Supreme Court and this Court. In Curtis v. Loether,

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415 U.S. 189 (1974), the Supreme Court stated that "if a plaintiff proves unlawful 

discrimination and actual damages, he is entitled to a judgment for that amount." 

Id. at 197. The Supreme Court did not state — and to the Rigas' knowledge never 

has stated — that if a plaintiff proves discrimination he is entitled to a judgment. 

Indeed, if there were a case at any level which stated such a proposition, surely 

plaintiffs or the panel would have cited it.

Regarding causation, the Supreme Court in Curtis explicitly noted a 

causation requirement, observing that a damages action under the FHA "sounds 

basically in tort — the statute merely defines a new legal duty, and authorizes the 

courts to compensate a plaintifffor the injury caused by the defendant's wrongful 

breach." Id. at 195 (emphasis added). It is axiomatic in tort law that causation is a 

sine qua non for liability; courts do not enter judgment where a duty has been 

breached but the breach has not caused damage. There is no such thing as a 

special judgment awarded where part of a cause of action is proved. Plaintiffs 

either prove all the elements of their cause of action or they lose. Yet this panel 

seeks to create just such a special status for FHA claims, despite the Supreme 

Court's clear language in Curtis, language reiterated by the Supreme Court in 

Carey v. Piphus. 435 U.S. 247 (1978), on a constitutional claim, when the Court 

noted that injury from mental and emotional distress "cannot be presumed to 

occur;" plaintiffs "should be put to their proof on the issue, as plaintiffs are in 

most tort actions." IdL at 262.

What the Supreme Court has refused to do for a constitutional claim, 

see Carey, is precisely what this panel has made mandatory on a statutory claim 

under the FHA. According to the panel, judgment is to be entered even when the 

plaintiff has not proved that the discrimination caused harm. The panel's decision 

on causation is an example of a venerable expression in action: hard cases make 

bad law. The Opinion demonstrates that the panel was troubled by what had
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happened to the Alexanders.! See Opinion at 17-18. But the panel's responsibility 

was to apply the law to the facts, not create new law to suit the facts.

That the panel is creating new law is evident from the part of the 

Opinion which addresses this issue — it is devoid of case citations. The panel did 

nothing more than quote the language of the FHA and assert that the language 

means discrimination is all that needs to be proved. Opinion at 10. The quoted 

language stands for no such proposition. It simply states that an "aggrieved 

person" can sue to obtain "appropriate relief for a discriminatory housing 

practice; and the quoted language then defines "discriminatory housing practice." 

See 42 U.S.C. §§ 3613(a)(1)(A) and 3604, quoted in the Opinion at 9-10. In fact, 

the quoted language begs the question by using the phrase "appropriate relief." Is 

relief appropriate absent proof of causation and absent any damages?

Unlike the panel or plaintiffs who cite no cases in support of their 

assertion that discrimination absent causation or damages equals judgment, the 

Rigas can point to cases in addition to Curtis for the principle that causation must 

be proved. This Court in Gunbv reversed a jury award for want of proof: "We 

agree with the contention that Gunby presented no evidence upon which the jury 

could reasonably conclude that he had suffered emotional distress as a result o f

1 Presumably because the panel was troubled by the finding of discrimination, the Opinion 
accepts as true numerous factual averments proffered by the plaintiffs at trial. But the 
jury's verdict finding no causation as to the Alexanders and awarding no damages to any 
of the plaintiffs suggests exactly the opposite. If the jury accepted as true all of the 
"facts" described by the panel, such verdicts would be inconceivable. See, e.g.. Opinion at 
4 ("on ten separate occasions, Ronald and/or Faye Alexander . . . .  inquired about an 
apartment at 5839 Darlington Road"); ("Daria Mitchell an African-American ’tester' for 
the FHP, was falsely told that the apartment had been rented, and thereafter, Mrs. Riga 
refused to return Mitchell's calls"); Opinion at 17-18 ("the Alexanders described in 
saddening detail the deceptions to which they were subjected and the consequent 
mortification they suffered").

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being denied the position . . . Gunbv. 840 F.2d at 1121 (emphasis added). If 

causation is irrelevant in a discrimination case because damage is presumed, Mr. 

Gunby would not have had his emotional distress verdict reversed. The jury found 

discrimination had occurred, but this court said that was not enough. He had to 

prove damage as a result o f  that discrimination.

The panel here distinguished Gunbv by stating that there the Court 

was merely striking speculative damages. Opinion at 11, n. 6. That evades the 

issue. The damages were speculative because causation was not proved. If 

discrimination really equals legal harm, then damages should be presumed and no 

proof of causation is required. But that conclusion was rejected by this Court in 

Gunbv. by the Supreme Court in Curtis and Carey, and by other courts as well. 

See, e.g.. Gore v. Turner. 563 F.2d 159, 164 (5th Cir. 1977) ("an award of 

emotional distress must be preceded by a finding of a sufficient causal connection 

between the defendant's illegal actions and the plaintiffs injury").

The panel's Opinion is devoid of any authority to support its 

conclusion that causation is not required to prove a claim under the Fair Housing 

Act. The Supreme Court has explicitly noted the requirements of causation and 

damages in these tort-like cases. See Curtis. 415 U.S. at 197; Carey, 435 U.S. at 

262. This Court has done the same in Gunbv, 840 F.2d at 1121. Regardless of 

whether the jury's findings in this case appear correct to those who did not listen to 

all the evidence and assess the credibi lity of the witnesses, the Court should not 

ignore time-honored legal requirements of causation and damages. This is 

especially true here, where there literally is no legal precedent for the panel's 

conclusion on this issue.

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B. The Panel's Holding That Mr. Riga Could Be
Vicariously Liable For Punitive Damages Is A 
Matter Of First Impression And Conflicts 
With The Supreme Court's Opinions In 
Smith and Kolstad., As Well As With Decisions 
Of Other United States Courts Of Appeals.
The panel correctly observed that punitive damages may only be

awarded where 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." Opinion at 16, quoting Smith v. Wade. 461 U.S. 30,

56 (1983). The panel then effectively eviscerates that requirement by taking

another Supreme Court opinion, Kolstad v. American Dental Association. 527

U.S. 526, 119 S. Ct. 2118 (1999) to an extreme which the Supreme Court could

not have contemplated. In what it admits is a matter of first impression, the panel

actually interprets Kolstad in such a way that a husband will be vicariously at risk

for punitive damages unless he tells his wife not to discriminate.

There is no dispute that at the time the discriminatory conduct

occurred, Mr. Riga was in Italy. Opinion at 19. The undisputed evidence

demonstrated that Mr. Riga never directed or endorsed any discriminatory conduct

by Mrs. Riga. See Appendix at 658-59. Indeed, Mr. and Mrs. Riga did not

discuss the Darlington Road property with the exception of a brief discussion

regarding a tenant that had prematurely vacated his apartment. Id  at 1008, 1038-

39. Nevertheless, invoking Kolstad. the panel found that Mr. Riga could be

vicariously liable for punitive damages unless he "engaged in active anti-

discrimination efforts . . . Opinion at 21. In so doing, the panel has radically

expanded the availability of punitive damages. Ponder the number of

relationships in which a non-discriminating party could be punished for failing to

state the obvious to his or her partner — do not discriminate.

Radically broadening the scope of vicarious liability for punitive

damages is precisely what the Supreme Court was trying to avoid in Kolstad. In
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that case, the Supreme Court was trying to come to grips with the punitive 

damages provision which Congress had passed as part of the Civil Rights Act of 

1991 and the opinion is replete with language limiting the scope of punitive 

damages. The Supreme Court started with the proposition that "[pjunitive 

damages are limited, however, to cases in which the employer has engaged in 

intentional discrimination and has done so ‘with malice or with reckless 

indifference to the federally protected rights of an aggrieved individual.’"

Kolstad, 119 S. Ct. at 2121 (emphasis added). The Supreme Court found that 

punitive awards should be based solely on an employer's state of mind to "give 

some effect to Congress' apparent intent to narrow the class of cases for which 

punitives are available to a subset of those involving intentional discrimination." 

Id. at 2124.

Further limiting the reach of the provision, the Supreme Court noted 

that "an employer must at least discriminate in the face of a perceived risk that its 

actions will violate federal law to be liable in punitive damages." Id. at 2125.

And it approvingly quoted a treatise for the proposition that "‘a positive element 

of conscious wrongdoing is always required.’" Id. at 2126, quoting C. 

McCormick, Law of Damages 280 (1935). The Court then turned to the specific 

and unique issue of how punitive damages liability can be imputed to an 

employer. Id. It did not consider how punitive damages liability can be imputed 

to a husband for the actions of his wife — or more generally, to a co-owner of real 

estate for the actions of another co-owner.

Citing the Restatement (Second) of Agency, the Supreme Court again 

focused on the narrow scope to be given to punitive damages: the Restatement 

"places strict limits on the extent to which an agent's misconduct may be imputed 

to the principal for purposes of awarding punitive damages;" and the Supreme 

Court expressly refused to adopt, as far too broad in effect, the Restatement's
-9-



position that punitive damages can be imposed on an agent "‘employed in a 

managerial capacity and . . . acting in the scope of employment.’" Id. at 2128, 

quoting the Restatement (Second) of Agency, § 217 C. Turning to yet another 

Restatement, the Supreme Court emphasized that "it is ‘improper ordinarily to 

award punitive damages against one who himself is personally innocent and 

therefore liable only vicariously.’" Id. at 2129, quoting the Restatement (Second) 

of Torts § 909 at 468, Comment b.

Thus, only after painstakingly and repeatedly stressing the limited 

scope of punitive damages, the Supreme Court held that "an employer may not be 

vicariously liable for the discriminatory employment decisions of managerial 

agents where these decisions are contrary to the employer's ‘good faith efforts to 

comply with Title VII.’" Id, at 2129, quoting the appellate court's opinion at 139 

F.3d at 974 (emphasis added). And this part of the opinion (Part II-B) was joined 

by only three justices. As the Chief Justice wrote, concurring in part and 

dissenting in part:

I would hold . . . that there is an egregiousness requirement that 
reserves punitive damages only for the worst cases of 
intentional discrimination . . . .  Since the Court has determined 
otherwise, however, I join that portion of Part II-B of the 
Court's opinion holding that principles of agency law place a 
significant limitation, and in many foreseeable cases a 
complete bar, on employer liability for punitive damages.

14 at 2130.

It is this opinion of a fractured court, adopting a circumscribed view 

of punitive damages, upon which the panel in this case relied to radically expand 

the availability of punitive damages. The Supreme Court was not passing on the 

availability of punitive damages against a husband for a wife's discrimination in 

violation of the FHA. It was adopting a narrow rule on the vicarious liability of 

employers for employment discrimination. Even expanding the scope of the 

opinion to encompass discrimination generally, the Court's holding is focused on
- 10-



employers, a distinction with significance given the subject of the holding — 

vicarious liability.

It is understandable that the Supreme Court would hold that an 

employer can be vicariously liable unless it makes a good faith effort to comply 

with Title VII. By definition, an employer has the power to train employees and 

distribute policy and procedure manuals. An employer also dictates how 

employees behave in the office and is responsible for establishing a professional 

atmosphere. It is far less obvious that it makes sense to impose vicarious liability 

for punitive damages on an individual co-owner of rental property for the 

discriminatory acts of his or her co-owner. And it is even less obvious that such 

liability should be imposed where the co-owners are husband and wife because the 

question immediately arises as to what formal or programmatic "good faith 

efforts" one spouse can make to keep the other spouse from discriminating.

C. The Panel's Holding That FHP Has Standing
Conflicts With This Court's Decision In 
Montgomery Newspapers, As Well As With 
Decisions Of The United States Court Of 
Appeals For The District Of Columbia Circuit.
The Rigas appealed the district court's denial of summary judgment

on the issue of FHP's standing, an issue which the panel addressed only in a

footnote. Opinion at 9, n. 4. The Rigas' argument is that a fair housing

organization cannot manufacture standing for itself by doing what exists to do

(investigate discrimination) and then suing for the resulting "diversion of

resources." Indeed, the Rigas' argument was expressly endorsed by this Court in

Fair Housing Council of Suburban Philadelphia v. Montgomery Newspapers, 141

F.3d 71 (3d Cir. 1998) (Mansmann, J.).

In Montgomery Newspapers, this Court specifically rejected the Fair

Housing Council's argument that "the diversion of resources to litigation is alone
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sufficient to confer standing under Article III." Jd. at 78. In reaching its decision, 

this Court approved of the reasoning of the Court of Appeals for the District of 

Columbia Circuit in Spann v. Colonial Village, Inc., 899 F.2d 24 (D.C. Cir. 1990) 

and Fair Employment Council of Greater Washington, Inc, v. BMC Marketing 

Corp.. 28 F.3d 1268 (D.C. Cir. 1994). h i  at 79. Summarizing the import of 

Spann and BMC, this Court held: "the pursuit of litigation alone cannot 

constitute an injury sufficient to establish standing under Article III." Id. at 80. 

And as the court explained in BMC, if the pursuit of litigation could confer 

standing:

the time and money that plaintiffs spend in bringing suit 
against a defendant would itself constitute a sufficient ‘injury 
in fact,’ a circular position that would effectively abolish the 
[injury in fact] requirement altogether. Indeed an organization 
devoted exclusively to advancing more rigorous enforcement 
of selected laws could secure standing simply by_ showing that 
one alleged illegality had deflected it from pursuit of another . .

BMC Marketing Corp,, 28 F.3d at 1277.

This is precisely what has occurred in this case with FHP. It exists to 

investigate discrimination and it expended resources to that end, investigating the 

Rigas so that a lawsuit could be brought. Its claimed damage is simply that it 

devoted resources to this case, deflecting it from the pursuit of other cases.

Indeed, that is the very basis for this Court finding that there was standing: "the 

FHP staff ‘stopped everything else’ and devoted all attention to this case. I t . . . 

diverted resources to investigate and to counter the Rigas' conduct." Opinion at 9- 

10, n. 4.2 Yet that is exactly what this Court in Montgomery Newspapers had just 

two years earlier said was insufficient to confer standing.

The Court again assumes that evidence offered by plaintiffs was credited by the jury. As 
with the Alexanders' evidence, the verdict suggests exactly the opposite. If the jury 
believed that FHP had "‘stopped everything else’ and devoted all attention to this case," 
the jury's decision to award zero dollars in damages would be inexplicable. But the

Continued on following page
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Inexplicably, the Court ignored the foregoing cases and issued a 

decision which directly contradicts another decision of this Court and creates a 

direct conflict with another United States Court of Appeals. Particularly odd is the 

panel’s failure to even mention its recent decision in Montgomery Newspapers 

despite the fact that the Rigas cited the case and relied upon it heavily. Instead, 

the panel relied on Havens Realty Corp, v. Coleman. 455 U.S. 363 (1982). But 

Havens holds only that a fair housing organization may have standing if its ability 

to conduct its operations was "perceptibly impaired." Havens. 455 U.S. at 372. 

Montgomery Newspapers. Spann, and BMC are entirely consistent with that 

holding. As this Court noted, "Havens makes clear . . . that an organization 

establishes Article III injury if it alleges that purportedly illegal action increased 

the resources the group must devote to programs independent of the suit 

challenging the action," Montgomery Newspapers, 141 F. 3d at 79.

Impairment means being prevented from doing what the organization 

exists to do (for example, if the Rigas had tried to divert FHP from investigating 

them by making false reports of discrimination by other landlords). FHP here was 

not diverted from doing what it exists to do. It investigated the Rigas. If FHP has 

standing in this case, it will henceforth have standing in every case in which it 

chooses to inject itself. Just as the court observed in BMC, the injury in fact 

requirement will be completely abolished.

Continued from previous page
verdict makes perfect sense if the jury believed that FHP had done nothing more than 
what it is paid to do by the federal government, which each year provides FFIP with 
hundreds of thousands of dollars.

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IV. Conclusion

The Court has made unfounded decisions with far-reaching 

ramifications — decisions which directly contradict decisions of the Supreme 

Court and this Court. Citing to no cases whatsoever, the Court proclaims that the 

centuries-old requirement of causation has no place in FHA discrimination 

actions. That decision is directly at odds with the Supreme Court decisions in 

Curtis and Carey.

Acknowledging that it was deciding a matter of first impression, the 

Court mistakenly relies on Kolstad to radically expand the scope of punitive 

damages available in discrimination cases, a result directly at odds with the 

Supreme Court's painstaking attempt to ensure that its decision in Kolstad has the 

opposite effect. The result is that spouses throughout Pennsylvania, New Jersey 

and Delaware who co-own rental property will now need to affirmatively direct 

each other not to discriminate. One can only imagine the interesting conversations 

each morning at breakfast, as husband and wife ensure their compliance with 

federal fair housing law.

Finally, the Court inexplicably ignored its recent decision in 

Montgomery Newspapers, producing a conflict between decisions of this Court 

rendered only two years apart. This Court was correct the first time, when it 

adopted a position consistent with that taken by the U.S. Court of Appeals for the

D.C. Circuit. A fair housing organization cannot be permitted to manufacture 

standing for itself by simply engaging in the work it exists to do. Were it 

otherwise, every "public interest" organization would suddenly find itself eligible 

to file a federal lawsuit whenever someone does something to which the 

organization chooses to respond. In other words, standing decisions will no 

longer be governed by the Constitution and determined by the courts. Standing

-14-



decisions will be made by the "public interest" organizations themselves on an ad 

hoc basis.

For all of these reasons, the Rigas respectfully urge that this petition 

for rehearing and/or rehearing en banc be granted and that the judgment of the 

district court be, upon further consideration, affirmed.

Respectfully submitted,

April 5, 2000 Thomas M. Hardiman
Pa. I.D. No. 65252
Joseph P. McHugh
Pa. LD. No. 77489
Reed Smith Shaw & McClay LLP
435 Sixth Avenue
Pittsburgh, PA 15219
(412)288-4290/3006

Counsel for Appellees/Cross-Appellants 
Joseph and Maria Riga

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CERTIFICATION OF BAR MEMBERSHIP

The undersigned hereby certify that they are members of the Bar of

this Court.

/V. —
April 5, 2000 Thomas M. Hardiman

Joseph P. McHugh



APPENDIX

Opinion and Judgment in 
Alexander, et al. v. Riga, et ux..

No. 98-3597 and 98-3622. (3d Cir. Mar. 22, 2000)

Exhibit A



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Ronald ALEXANDER; Faye Alexander; 
Fair Housing Partnership of Greater 

Pittsburgh, Inc., Appellants in No. 98-3597 
v.

Joseph RIGA; Maria A. Riga a/k/a Carla 
Agnotti

Ronald Alexander; Faye Alexander; Fair 
Housing Partnership of Greater 

Pittsburgh, Inc., 
v.

Joseph RIGA; Maria A. Riga a/k/a Carla 
Agnotti

Nos. 98-3597, 98-3622.

United States Court of Appeals,
Third Circuit.

Argued Oct. 18, 1999

Filed March 22, 2000

Appeal from the United States District Court 
for the Western District of Pennsylvania 
(D.C.Civ.No. 96-cv-00049) District Judge: 
Honorable William L. Standish

Timothy P. O’Brien, Esquire Mitchell, 
O’Brien & Kakoff 429 Forbes Avenue 1705 
Allegheny Building Pittsburgh, PA 15219 
Caroline Mitchell, Esquire (ARGUED) 707 
Grant Street 3700 Gulf Tower Pittsburgh, PA 
15219

Counsel for Ronald Alexander, Faye 
Alexander, and Fair Housing Partnership of 
Greater Pittsburgh

Thomas M. Hardiman, Esquire (ARGUED) 
Joseph P. McHugh, Esquire Reed, Smith, 
Shaw & McClay 435 Sixth Avenue Pittsburgh, 
PA 15219-1886

Counsel for Joseph Riga and Maria Riga

Rebecca K. Troth, Esquire (ARGUED) United 
States Department of Justice Civil Rights 
Division P.O. Box 66078 Washington, DC 
20035-6078

Counsel for Amicus Curiae-United States of 
America

Page 1

Charles S. Ralston, Esquire NAACP Legal 
Defense & Educational Fund 99 Hudson 
Street 16th Floor New York, N.Y. 10013 
Counsel for Amicus-Appellant

Before: SLOVITER, MANSMANN and 
ROTH, Circuit Judges.

OPINION OF THE COURT

MANSMANN, Circuit Judge.

*1 The present case arises essentially as an 
appeal by the plaintiffs Ronald and Faye 
Alexander ("the Alexanders") and the Fair 
Housing Partnership of Greater Pittsburgh, 
Inc. ("the FHP") from a judgment entered in 
the United States District Court for the 
Western District of Pennsylvania. [FN1] The 
Alexanders and the FHP brought suit against 
Joseph and Maria Riga ("the Rigas"), the 
owners of the building in the Squirrel Hill 
neighborhood of Pittsburgh in which the 
Alexanders sought to rent an apartment. In 
their suit, the Alexanders and the FHP 
alleged racial discrimination in the rental of 
housing pursuant to the Fair Housing Act of 
1968, as amended, 42 U.S.C. S3601 et seq., 
and the Civil Rights Act of 1866, as amended, 
42 U.S.C. SS1981 and 1982. In their 
complaint, the Alexanders and the FHP 
sought damages, as well as equitable and 
injunctive relief.

Following an eight-day trial ’in the District 
Court, the jury found, on special verdicts, that 
Mrs. Riga had violated the Fair Housing Act 
when she denied rental housing to the 
Alexanders based upon race. Nonetheless, the 
jury found Mrs. Riga’s conduct was not "a 
legal cause of harm" to the Alexanders and 
did not award damages. The jury found that 
Mrs. Riga’s conduct was "a legal cause of 
harm" to the FHP, but, likewise, did not 
award damages. Thus, the District Court 
declined to submit to the jury the issue of 
punitive damages, which had been bifurcated 
from the liability portion of the case. 
Following post-trial motions, the District 
Court entered judgment in favor of the Rigas 
(the defendants) and the FHP, and against the 
Alexanders, and directed the parties to bear

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their own costs.

On appeal, the Alexanders (the plaintiffs), 
supported by the NAACP Legal Defense & 
Educational Fund and the United States 
Department of Justice as amici curiae, raise a 
host of issues related principally to the jury 
instructions and the conduct of the trial. We 
have jurisdiction to review the District Court’s 
final judgment pursuant to 28 U.S.C. S 1291.

Because we find that in a case alleging 
discrimination under the Fair Housing Act the 
discrimination itself is the harm, we will 
reverse the decision of the District Court 
granting judgment to the Rigas as against the 
Alexanders and the decision declining to 
submit the question of punitive damages to 
the jury. We will direct the District Court on 
remand to enter judgment for the Alexanders 
and to hold a new trial to present to a jury the 
question of punitive damages, as against both 
Mr. and Mrs. Riga.

I.

*2 From September 17, 1995, through
October 8, 1995, on ten separate occasions, 
Ronald and/or Faye Alexander, an African- 
American couple, inquired about an 
apartment at 5839 Darlington Road, Squirrel 
Hill, which had been advertised in a 
September 17 newspaper. Joseph and Maria 
Riga owned the building, which Mrs. Riga 
managed. Mrs. Riga falsely told the 
Alexanders that the apartment was 
unavailable and the Alexanders were denied a 
view. Their phone calls to inquire about the 
apartment were not returned. Daria Mitchell, 
an African-American "tester” for the FHP, 
was falsely told that the apartment had been 
rented, and thereafter, Mrs. Riga refused to 
return Mitchell’s calls.

In contrast, from September 18 through 
October 9, 1995, on ten separate occasions, 
Mrs. Riga truthfully told Dennis Orvosh, a 
white tester for the FHP, and whites Robin 
McDonough, Jeff Lang, and Heidi Sestrich, 
that the apartment was available, allowed 
each a view, and returned their phone calls.

Page 2

On January 11, 1996, the Alexanders and the 
FHPfiled this civil action against the Rigas. In 
their complaint, the plaintiffs sought 
damages, as well as equitable and injunctive 
relief, for alleged race discrimination. 
Specifically, the plaintiffs alleged that the 
Rigas discriminated against the individual 
plaintiffs on the basis of their race in violation 
of the Fair Housing Act in connection with the 
attempts of Mr. and Mrs. Alexander to view a 
rental property owned by the Rigas in Squirrel 
Hill. The Fair Housing Act prohibits 
discrimination in the sale or rental of housing, 
including the refusal to negotiate for the 
rental of, or otherwise make unavailable or 
deny, a dwelling to any person because of race; 
to discriminate against any person in the 
terms, conditions or privileges of rental of a 
dwelling because of race; or to represent to 
any person because of race that any dwelling 
is not available for inspection, sale or rental 
when such dwelling is, in fact, available. See 
42 U.S.C. SS 3604(a), (b) and (d). The plaintiffs 
sought equitable relief including an order 
requiring the posting of fair housing notices 
and a cease and desist order prohibiting the 
Rigas from discriminating on the basis of race.

Following an eight-day trial in May, 1998, a 
jury returned eight special verdicts. The jury 
found that Mrs. Riga had discriminated 
against the Alexanders in violation of the Fan- 
Housing Act. Nonetheless, the jury found that 
the discriminatory conduct of Mrs. Riga was 
not "a legal cause of harm" to either Mr. or 
Mrs. Alexander, and declined to award them 
monetary damages. [FN2] As to the FHP, the 
jury found that the discriminatory conduct of 
Mrs. Riga was "a legal cause of harm" to the 
FHP, however, here, too, the jury declined to 
award monetary damages. The issue of 
punitive damages had been bifurcated from 
the issues of liability and compensatory and/or 
nominal damages. After the return of the 
jury’s special verdicts, the court declined to 
submit the issue of punitive damages to the 
jury. Based on the special verdicts, the District 
Court entered judgment in favor of the Rigas 
and against the plaintiffs, together with costs, 
on May 26, 1988.

On May 28, 1998, the plaintiffs filed four

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post-trial motions: (1) to enter a judgment 
notwithstanding the verdict, to issue an 
additur of nominal damages in the amount of 
one dollar for each plaintiff, or to grant a new 
trial on damages, or in the alternative, award 
punitive damages as a matter of law against 
both Mr. and Mrs. Riga; (2) for a hearing on 
injunctive relief; (3) for attorney’s fees, costs 
and expenses; and (4) to grant the plaintiffs 
judgment as a matter of law. The Rigas moved 
to tax costs against the plaintiffs.

*3 On October 13, 1998, the District Court 
denied the plaintiffs’ motions except for the 
FHP’s motion to have judgment entered in its 
favor, denied the Rigas’ motion to tax costs, 
and entered judgment. The plaintiffsfiled a 
timely notice of appeal on November 5, 1998. 
The Rigas also filed a timely cross- appeal.

On appeal, the plaintiffs put forth several 
major contentions. They assert that the 
District Court should have entered judgment 
for them because the jury charges presented 
an incorrect legal standard with respect to 
liability. The plaintiffs further maintain that 
the District Court presented an incorrect legal 
standard with respect to nominal damages and 
erred in refusing to submit the issue of 
punitive damages to the jerry after the jury 
found that Mrs. Riga had discriminated on the 
basis of race in violation of the Fair Housing 
Act but awarded neither compensatory nor 
nominal damages. The plaintiffs argue, too, 
that both Mr. and Mrs. Riga should be 
subjected to punitive damages, because, 
although Mr. Riga was out of the country at 
this time, he violated a nondelegable duty not 
to discriminate under the Fair Housing Act.

H .

The Fair Housing Act was intended by 
Congress to have "broad remedial intent." 
Havens Realty v. Coleman, 455 U.S. 363, 380, 
102 S.Ct. 1114, 71 L.Ed.2d 214 (1982). As this 
case stands after trial, the net result of the 
plaintiffs’ victory was that they were out-of- 
pocket for the expenses of litigation. 
Historically, enforcement of the civil rights 
statutes depends, in large measure, on the 
willingness of private plaintiffs to pursue

Page 3

individual cases. The Supreme Court has 
attached importance to each individual’s 
prosecution of discrimination under the 
statutes:
the objectives of the [discrimination statutes] 
are furthered when even a single [individual] 
establishes that [another individual] has 
discriminated against him or her. The 
disclosure through litigation of incidents and 
practices that violate national policies 
respecting nondiscrimination ... is itself 
important.
McKennon v. Nashville Banner Pub., 513 
U.S. 352, 358-59, 115 S.Ct. 879, 130 L.Ed.2d 
852 (1992). And, with respect to the Fan- 
Housing Act in particular, the Supreme Court 
has held that
since the enormity of the task of assuring fan- 
housing makes the role of the [United States] 
Attorney General in the matter minimal, the 
main generating force must be private suits 
in which ... the complainants act not only on 
their own behalf but also "as private 
attorneys general in vindicating a policy that 
Congress considered to be of the highest 
priority."
Trafficante v. Metropolitan Life Ins., 409 U.S. 
205, 211, 93 S.Ct. 364, 34 L.Ed.2d 415 (1972).

HI.
A. The Alleged Errors in the Jury 

Instructions

*4 The Alexanders argue on appeal that, 
after the jury’s verdict that the Fair Housing 
Act was violated, the District Court was 
required to enter judgment in favor of them 
and the FHP. [FN3] All plaintiffs allege on 
appeal primarily two flaws in the District 
Court’s jury instructions. The plaintiffs 
specifically argue that the District Court 
erred: (1) in requiring that the jury find "legal 
causation" for "harm" as a prerequisite to 
finding liability under the Fair Housing Act, 
and (2) in requiring that the jury find 
"insubstantial" actual damages or "legal 
harm" as a prerequisite to awarding nominal 
damages.

Unfortunately, a party who has not 
challenged the trial court’s jury instructions at 
an appropriate time is deemed to have waived

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Page 4

such a challenge. We have emphasized the 
need to raise any objections to jury 
instructions prior to the time the jury begins 
its deliberations:
Under Fed.R.Civ.P. 51, a party, in order to 
preserve an objection either to a failure to 
instruct the jury on an issue or to the manner 
in which the jury was instructed, clearly must 
"object! ] thereto before the jury retires to 
consider its verdict, stating distinctly the 
matter objected to and the grounds of the 
objection." See also, McAdam v. Dean Witter 
Reynolds, 896 F.2d 750, 759 (3d Cir.1990) 
(declining to consider newly developed 
argument concerning jury charge deficiency 
where party "failed to specifically and clearly 
object to either the charge or the entry of a 
judgment ... based on this charge"); Waldorf 
v. Shuta, 896 F.2d 723, 739-40 (3d Cir.1990) 
(holding that objection, because sufficiently 
specific, had preserved error alleged on 
appeal).
Simmons v. Philadelphia, 947 F.2d 1042, 
1078 (3d Cir.1990), cert, denied, 503 U.S. 985, 
112 S.Ct. 1671, 118 L.Ed.2d 391 (1992). 
Generally, a party who does not clearly and 
specifically object to a charge he believes to be 
erroneous waives the issue on appeal. Id.

If the party claiming error in the jury 
instructions did not make a timely objection, 
we review for plain error and we will reverse 
only if the trial court committed plain error 
that was fundamental and highly prejudicial, 
such that the instructions failed to provide the 
jury with adequate guidance, and the District 
Court’s refusal to consider the issue would 
result in a miscarriage of justice. Cooper 
Distrib’g v. Amana Refrig.,180 F.3d 542, 549- 
550 (3d Cir.1999). Fed.R.Civ.P. 51. We have 
characterized plain error review in the 
absence of a "timely and specific objection," as 
"a form of discretionary review that we have 
exercised sparingly...." Id., see also Bowley v. 
Stotler, 751 F.2d 641, 652 (3d Cir.1985); see 
also United States v. 564.54 Acres of Land, 
576 F.2d 983, 987 (3d Cir.1978) (under plain 
error doctrine, court may review jury 
instruction if error is "fundamental and highly 
prejudicial" and failure to consider it "would 
result in a miscarriage of justice"), rev’d on 
other grounds, 441 U.S. 506, 99 S.Ct. 1854, 60

L.Ed.2d 435 (1979).

In short, our discretion to conduct a review 
under the plain error doctrine is limited to 
cases where the error is (1) fundamental and 
highly prejudicial or if the instructions are 
such that the jury is without adequate 
guidance on a fundamental question and (2) 
our failure to consider the error would result 
in a miscarriage of justice. 564.54 Acres of 
Land at 576 F.2d at 987-988. Consistent with 
our belief that this discretionary power should 
be exercised sparingly, we will review the 
purported deficiencies in the jury instructions 
to determine whether they have been properly 
preserved and constitute grounds either for 
reversing the District Court’s decision or for a 
new trial. The issue of whether a jury 
instruction misstates the proper legal 
standard is subject to plenary review. Hopp v. 
Pittsburgh, 194 F.3d 434, 440 (3d Cir.1999).

1. The Alleged Error on Liability

*5 The plaintiffs assert that the District 
Court’s liability instruction was inaccurate 
and misleading and might have caused the 
jury not to award any damages despite their 
finding of a Fair Housing Act violation. 
Though the jury found that Mrs. Riga had 
discriminated against the Alexanders, the jury 
found that there was no liability. The 
Alexanders did not receive a liability verdict 
because they were unable to prove 
"causation." On the other hand, the FHP did 
receive a liability verdict; the jury found that 
there was "legal cause" as to the FHP caused 
by Mrs. Riga’s discriminatory acts.

This is a statutory form of action. The Fair 
Housing Act provides that "[a]n aggrieved 
person may commence a civil action in an 
appropriate United States district court or 
State court not later than 2 years after the 
occurrence or the termination of an alleged 
discriminatory housing practice ... to obtain 
appropriate relief with respect to such 
discriminatory housing practice or breach." 
[FN4] 42 U.S.C. § 3613(aXlXa). The Fair 
Housing Act defines" discriminatory housing 
practice," in pertinent part, as follows:
(a) To refuse to sell or rent after the making

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of a bona fide offer, or to refuse to negotiate 
for the sale or rental of, or otherwise make 
unavailable or deny, a dwelling to any person 
because of race, color, religion, sex, familial 
status, or national origin.

sf: sjc

(d) To represent to any person because of race, 
color, religion, sex, handicap, familial status, 
or national origin that any dwelling is not 
available for inspection, sale, or rental when 
such dwelling is in fact so available.
42 U.S.C. § 3604. [FN5] The plain language 
of the Fair Housing Act thus permits an 
individual to obtain relief for the 
discriminatory housing practice or breach. A 
prospective tenant must prove only that a 
landlord did one of the unlawful acts listed in 
section 3604 with respect to the prospective 
tenant’s attempt to obtain housing. If an 
individual proves discrimination, he or she 
need not prove anything else. The District 
Court imposed upon the statute another 
requirement, "legal causation." The Rigas 
argue that the discrimination is the "legal 
cause" for the "harm," which itself must be 
proved. To the contrary, the"harm" is the 
discrimination.________________

The Alexanders felt themselves to be the 
victims of housing discrimination and sued the 
Rigas under the Fair Housing Act, both to 
vindicate their unlawful treatment and the 
public interest in fair housing. One "unlawful 
act" of several which falls under the ambit of 
section 3604 is that the Alexanders were told 
that the apartment was not available, when it 
was. The statute directly focuses on that 
situation, seeks to deter it, and seeks to 
remedy it. At trial, the Alexanders related 
what transpired during their housing search 
and also described additional adverse 
consequences, such as emotional distress, for 
which they sought compensatory damages. 
Although the jury declined to award 
compensatory damages for any adverse 
consequences flowing from the discrimination, 
the jury believed that the Alexanders were 
indeed victims of illegal discrimination.

*6 We conclude that the District Court 
misstated the proper legal standard in this

Page 5

Fair Housing Act case by requiring "legal 
causation" beyond a showing of illegal 
discrimination. Nonetheless, we find that the 
plaintiffs did not make a timely objection to 
the jury charge on this issue and have so 
waived it. The plaintiffs did not object to this 
requirement of "legal causation" at the close 
of the jury instructions. Moreover, the 
attorneys for both plaintiffs had previously 
participated in a charge conference in which 
they met with the judge and agreed upon 
instructions.

Under a plain error analysis, unquestionably, 
the instructions requiring "legal causation" 
failed to provide the jury with adequate 
guidance as to compensatory damages. [FN6] 
See Tyus v. Urban Search Management, 102 
F.3d 256, 265(7th Cir.l997Xinstruction
"confusing" where jury charged that one 
element of a Fair Housing Act violation is 
proof that the discriminatory housing practice 
caused "actual injury"), cert, denied, 520 U.S. 
1251 (1997). The second criterion for plain 
error, however, is that our refusal to consider 
the issue would result in a miscarriage of 
justice.

The plaintiffs have conceded that they did not 
make a claim for substantial compensatory 
damages. Further, we cannot say, in light of 
our decision taken as a whole, which should 
afford substantial relief to the plaintiffs, see
B. The Assignment of Judgment, infra, that 
our refusal to consider the issue of 
compensatory damages would result in a 
miscarriage of justice.

2. The Alleged Error on Nominal Damages

The plaintiffs further argue that the jury was 
improperly instructed and that the jury 
committed error when it failed to return an 
award of $1 in nominal damages for Mrs. 
Riga’s violation of the Fair Housing Act. The 
plaintiffs allege that the District Court erred 
in instructing the jury that an award of 
nominal damages requires a finding of 
"insubstantial" actual damages, or of "legal 
harm." [FN7] Rather, the plaintiffs contend 
that nominal damages should be awarded 
where the jury has found a federal civil rights

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violation, particularly the "fundamental" 
right to fair housing. Thus, the jury should 
have been instructed that it was required to 
find nominal damages if it found, as it did, 
that housing discrimination had occurred and 
the jury should have acted in conformity with 
that instruction and awarded the plaintiffs 
these damages.

The District Court apparently felt that this 
case involved "merely" a violation of "purely 
statutory rights," and that, therefore, nominal 
damages were not required. In our opinion, 
this stance trivializes the role of civil rights 
law in eradicating discrimination. Racial 
discrimination, according to the Supreme 
Court, is a "fundamental injury to the 
individual rights of a person," Goodman v. 
Lukens Steel, 482 U.S. 656, 661, 107 S.Ct. 
2617, 96 L.Ed.2d 572 (1987), and the inability 
to buy or lease real property can be considered 
one of the badges and incidents of slavery. See 
also The Civil Rights Cases, 109 U.S. 3, 22- 
23, 3 S.Ct. 18, 27 L.Ed. 835 (1883). Indeed, 
even absent proof of actual injury, nominal 
damages are to be awarded to recognize 
violation of a constitutional right. Carey v. 
Piphus, 435 U.S. 247, 266 -67 (1978).

*7 This entitlement is not automatic, 
however, "but rather, it is incumbent upon the 
plaintiff to make a timely request for nominal 
damages." Campos- Orrego v. Rivera, 175 F.3d 
89 (1st Cir.1999). In this instance, the 
plaintiffs requested and received an 
instruction on nominal damages, but failed to 
bring to the District Court’s attention their 
contention that the jerry should have been 
instructed that nominal damages are 
mandatory with a finding of discrimination. 
The plaintiffs neglected to bring this matter to 
the attention of the trial judge prior to the 
time the jury retired to consider its verdict, 
much less the specific grounds upon which it 
was based. In an attempt to avoid a holding 
that this failure to object to the jury 
instructions waived their right to challenge 
the jury’s nominal damages verdict on appeal, 
the plaintiffs argue that the District Court’s 
failure here was plain error.

Without deciding the question, we find that

Page 6

even if the jury were without adequate 
guidance on the question of whether nominal 
damages are mandatory or discretionary for 
violation of a federal statute, failure to rectify 
this error under the specific circumstances of 
this case does not result in a miscarriage of 
justice. In the final analysis, given our holding 
in this case, the plaintiffs are the prevailing 
parties, have the opportunity to recover 
punitive damages, and might each only 
receive $1 less in compensation than that to 
which it might be entitled. See 564.4 Acres of 
Land, 576 F.2d at 988 (failure to rectify error 
could result in miscarriage of justice because 
one party could receive several million dollars 
less in compensation than that to which it was 
entitled). Thus, we hold that the plaintiffs’ 
failure to challenge the jury instruction 
dealing with nominal damages waived their 
right to raise this question on appeal.

B. The Assignment of Judgment

On a crucial and related matter, we find that 
because the jury found that the Fair Housing 
Act was violated, the District Court was 
required, as a matter of law, to enter 
judgment for both the Alexanders and the 
FHP. The District Court’s refusal to enter 
judgment for the Alexanders constitutes an 
abuse of discretion, and we will reverse. [FN8] 
Similarly, the District Court abused its 
discretion in failing to find that both the 
Alexanders and the FHP were "prevailing 
parties" and entitled to costs under 42 U.S.C. 
S 3613(cX2). See New Jersey Coalition of 
Rooming & Boarding House Owners v. Mayor 
of Asbury Park, 152 F.3d 217, 225 (3d 
Cir.l998Xthe Fair Housing Act’s costs 
"provision, which sounds fully discretionary 
...-’the court, in its discretion, may allow the 
prevailing party ... a reasonable attorney’s fee 
and costs’-actually is not. In fact, a district 
court’s discretion not to grant attorney’s fees 
and costs in civil rights cases is tightly 
cabined.") We therefore hold that both the 
Alexanders and the FHP were prevailing 
parties and will direct the District Court to 
award them attorneys’ fees and costs on 
remand.

C. Punitive Damages

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1. Conduct Calling for Punitive Damages

*8 In this case, the District Court declined to 
send the issue of punitive damages to the jury. 
One main reason for this appears to have been 
that because the jury awarded no actual 
damages to either plaintiff, the District Court 
concluded that Mrs. Riga was not liable to the 
Alexanders. Because so much of the Rigas’ 
brief was devoted to this issue, though later 
they conceded the point, it bears mentioning 
that beyond a doubt, punitive damages can be 
awarded in a civil rights case where a jury 
finds a constitutional violation, even when the 
jury has not awarded compensatory or 
nominal damages. See Curtis v. Loether, 415 
U.S. 189, 94 S.Ct. 1005, 39 L.Ed.2d 260 (1974) 
(punitive damages appropriate for Title VIH 
violation without award for actual loss, 
remanding for jury trial on punitive damages 
amount), see also Basista v. Weir, 340 F.2d 74, 
87 (3d Cir.l965Xpunitive damages appropriate 
in section 1983 case absent award of 
compensatory damages).

We have sufficiently resolved this matter in 
our foregoing discussion on the jury charge 
regarding liability, and in our conclusion that 
a Fair Housing Act violation is all that is 
needed to establish liability. Another reason 
the District Court declined to send the issue of 
punitive damages to the jury is that the 
District Court concluded that the jury 
apparently did not believe Mrs. Riga’s conduct 
to have resulted from the type of evil motive 
thought necessary to award punitive damages. 
We will address this second point.

Whether there is sufficient evidence to 
support a punitive damages award is a 
question of law which we review de novo. Delli 
Santi v. CNA Ins., 88 F.3d 192, 207 (3d 
Cir.1996), Bonjomo v. Kaiser Aluminum & 
Chem., 752 F.2d 802, 814-15 (3d Cir.1984), 
cert, denied, 477 U.S. 908, 106 S.Ct. 3284, 91 
L.Ed.2d 572 (1986).

Here, there is a specific damages provision in 
the plain language of the statute. 42 U.S.C. 
S3613(c) provides the relief which may be 
granted, when, as here, private individuals 
seek to enforce the Fair Housing Act:

Page 7

(1) In a civil action under subsection (a) of 
this section, if the court finds that a 
discriminatory housing practice has occurred 
..., the court may award to the plaintiff actual 
and punitive damages, and ... may grant as 
relief, as the court deems appropriate, any 
permanent or temporary injunction, 
temporary restraining order, or other order 
(including an order enjoining the defendant 
from engaging in such practice or ordering 
such affirmative action as may be 
appropriate).
(2) In a civil action under subsection (a) of 
this section, the court, in its discretion, may 
allow the prevailing party, other than the 
United States, a reasonable attorney’s fee 
and costs.

* * *

The District Court has the duty to "give 
effect, if possible, to every clause and word of 
[the] statute." Bennett v. Spear, 520 U.S. 54 
(1997).

The standard for punitive damages in a 
federal civil rights action was set by the 
Supreme Court, and does not require 
"outrageousness": a jury may "assess punitive 
damages in [a civil rights action] 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." Smith v. Wade,
461 U.S. 30, 56, 103 S.Ct. 1625, 75 L:Ed.2d 
632 (1983).

*9 In denying the Alexanders’ request to 
submit the punitive damages issue to the jury, 
the District Court found that punitive 
damages were precluded because the jury’s 
refusal to award damages showed that the 
jury, in the District Court’s words, "did not 
consider the conduct of Mrs. Riga to have been 
the result of an evil motive or intent or to 
have involved reckless or callous indifference 
to the federally protected rights of others." In 
the District Court’s view, it thus "would be 
inappropriate to permit the jury to award 
punitive damages to them." The District Court 
also held that more than intentional 
discrimination is required for the jury to enter

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punitive damages- that "outrageous conduct 
on the part of Mrs. Riga beyond that which 
may attach to any finding of intentional 
discrimination" was required.

"Malice" and "reckless indifference," in this 
context, however, refer not to the 
egregiousness of the landlord’s conduct, but 
rather to the landlord’s knowledge that it may 
be acting in violation of federal law. See 
Kolstad v. American Dental Association, 527 
U.S. 526, 119 S.Ct. 2118, 2124, 144
L.Ed.2d 494 (1999). In Kolstad, a female 
employee sued her employer under Title VH, 
asserting that the employer’s decision to 
promote a male employee over her was a 
proscribed act of gender discrimination. The 
District Court denied the employee’s request 
for a jury instruction on punitive damages. 
The Court of Appeals affirmed, holding that, 
before the jury can be instructed on punitive 
damages, the evidence must demonstrate that 
the defendant has engaged in some 
"egregious" misconduct; under the facts of 
that case, the female employee had failed to 
make the requisite showing. The Supreme 
Corut vacated the earlier decision and 
remanded. In so doing, the Supreme Court 
explicitly rejected the conclusion that 
"eligibility for punitive damages can only be 
described in terms of [a defendant’s] 
’egregious’ misconduct." Rather, the Supreme 
Corut held that"[t]he terms ’malice’ and 
’reckless’ ultimately focus on the actor’s state 
of mind," making a showing of egregious or 
outrageous discrimination unnecessary. Id. 
Applied to the case before us, we hold that 
because the jury’sfinding of a violation under 
the Fair Housing Act necessarily encompasses 
a finding of intentional discrimination, the 
plaintiffs need not also demonstrate that the 
conduct was particularly egregious or 
malicious in order to obtain punitive damages.

Indeed, recklessness and malice may be 
inferred when a manager responsible for 
showing and renting apartments repeatedly 
refuses to deal with African- Americans about 
the apartment, and misrepresents the 
apartment’s availability. See Miller v. 
Apartments & Homes, 646 F.2d 101 (3d 
Cir.1981) ( punitive damages appropriate

Page 8

where defendant acts with reckless disregard 
as to whether he is violating a federally 
protected right, or consciously and 
deliberately disregards consequences of 
actions), see also Woods-Drake v. Lundy, 667 
F.2d 1198 (5th Cir.1982) ("wilful and gross" 
violation of the Fair Housing Act supported 
punitive damages where landlord evicted 
tenants for having African- American guests; 
on remand, trial court directed to assess 
punitive damages).

*10 In the case before us, the jury returned 
special verdicts finding the rights of the 
Alexanders and the FHP testers under the 
Fair Housing Act to have been violated. The 
Alexanders and the FHP presented evidence 
that Mrs. Riga persistently refused to deal 
with African-Americans, as opposed to whites, 
and represented that an apartment was not 
available for inspection or rental, when it was. 
The Alexanders described in saddening detail 
the deceptions to which they were subjected, 
and the consequent mortification they 
suffered. Mrs. Riga told them that "they had 
just missed" the apartment listed in an 
advertisement on Sunday, the day before. 
When the same advertisement appeared the 
following Sunday, Mr. Alexander asked a 
friend to call. The friend was told that the 
apartment was available. Using a different 
name, Mr. Alexander arranged to see the 
apartment and called twice to confirm the 
appointment. When he met Mrs. Riga at the 
building, she falsely stated that she had 
forgotten her keys, and could not show him 
the apartment, as her hand covered up her 
keys. Mr. Alexander "couldn’t believe it, it 
made h im angry," he thought she was lying. 
When he asked to reschedule, Mrs. Riga said 
that he could call her. He was feeling "a little 
bit too sick to say anything else...." He walked 
away, then tinned and saw her entering the 
building. He called to reschedule and left 
messages, but did not receive a responding 
telephone call from Mrs. Riga. After this, Mr. 
Alexander sought the assistance of the FHP, 
which directed testers to seek the apartment. 
In short, the white testers were granted access 
while the African-Americans testers were 
denied access. Mr. Alexander continued to try 
to contact Mrs. Riga and also had friends call.

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To one friend he remarked that he felt "hurt 
and discouraged, it is sort of degrading, it 
discourages you from trying ... tofind a place 
for your family to live, it is just sickening, I 
really can’t describe it. It is terrible...."

The Supreme Court in Kolstad did observe 
that the mere existence of a civil rights 
violation is not a guarantee of eligibility for 
punitive damages because a defendant might 
not be aware of the federal law he or she 
violated or he or she might have honestly 
believed that the discrimination was 
permissible. Kolstad, 119 S.Ct. at 2125. These 
exceptions, however, do not apply to the Rigas 
in this case. Here, there is not any suggestion 
that Mrs. Riga did not know that it was 
illegal, and had been for thirty year's, to 
discriminate on the basis of race in housing. 
The jury concluded that Mrs. Riga refused to 
deal with African-Americans with respect to 
the apartment building and was motivated by 
race. The plaintiffs have adduced sufficient 
evidence to demonstrate "reckless or callous 
indifference" to federally protected rights and 
to permit the jury to award punitive damages.

2. Mr. Riga’s Liability for Punitive Damages

*11 Although both Mr. and Mrs. Riga were 
defendants at trial, the special verdicts that 
were submitted to the jury were limited to 
determining Mrs. Riga’s liability for 
discriminatory conduct. The District Court 
concluded that only Mrs. Riga was involved in 
the events leading to this lawsuit because Mr. 
Riga was in Italy at all relevant times. The 
Rigas assert that excluding Mr. Riga from the 
punitive damages discussion was appropriate 
because he neither had the requisite personal 
involvement nor did he acquiesce in Mrs. 
Riga’s discriminatory conduct. The plaintiffs 
argue that both Mr. and Mrs. Riga should be 
subject to punitive damages, because, though 
Mr. Riga was out of the country at the 
relevant time, he violated a nondelegable duty 
not to discriminate under the Pair Housing 
Act.

Of course, a principal is directly liable where 
he himself commits, authorizes, or ratifies 
discriminatory treatment, see Miller, 646 F.2d

Page 9

at 111 ($25,000 punitive damages award 
against principal for agent’s action, where 
principal was involved in wrongdoing or 
authorized, ratified, or fostered agent’s 
discriminatory acts); see also Asbury v. 
Brougham, 866 F.2d 1276 (10th Cir.1989) 
(owner of management company and agent 
who refused to rent both liable; punitive 
damages against owner sustained). We now 
must decide, as a matter of first impression, 
whether a principal is vicariously liable for 
punitive damages for violations of the Fair 
Housing Act by the discriminatory acts of his 
managerial agent.

The Rigas contend that Mrs. Riga’s conduct 
cannot be attributed to Mr. Riga. They are 
mistaken. Mr. Riga could not insulate himself 
from liability for discrimination in regard to 
an apartment building owned jointly by him 
and his wife and managed for their joint 
benefit, merely by relinquishing the 
responsibility for preventing discrimination to 
Mrs. Riga, his managerial agent. To effectuate 
the Fair Housing Act’s mandate, both Mr. and 
Mrs. Riga are held responsible for Mrs. Riga’s 
discriminatory practices. Here we adopt the 
general rule applied by other federal courts 
that the duty of a landlord under the Fair 
Housing Act not to discriminate in the leasing 
of property may not be delegated to the 
landlord’s employee. Civil Rights Act of 1968, 
S801 et seq., 42 U.S.C. S3601 et seq. See 
Walker v. Crigler, 976 F.2d 900, 904 & n. 5 
(4th Cir.l992X"the duty of a property owner 
not to discriminate in the leasing or sale of 
that property is non-delegable"), see also Man* 
v. Rife, 503 F.2d 735, 741 (6th Cir.1974) ("The 
discriminatory conduct of an apartment 
manager or rental agent is, as a general rule, 
attributable to the owner and property 
manager of the apartment complex, both 
under the doctrine of respondeat superior and 
because the duty to obey the law is non­
delegable.”), Coates v. Bechtel, 811 F.2d 1045, 
1051 (7th Cir.1987); Phiffer v. Proud Parrot 
Motor Hotel, 648 F.2d 548, 552 (9th Cir.1980); 
Saunders v. General Services, 659 F.Supp. 
1042, 1059 (E.D.Va.1987) ("Under the Fan- 
Housing Act, a corporation and its officers ’are 
responsible for the acts of a subordinate 
employee ... even though these acts were

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neither directed nor authorized...,’ Courts 
have followed this rule even where ’it seems 
harsh to punish innocent and well- intentioned 
employers’ because the statutory duty not to 
discriminate is non- delegable") (citations 
omitted).

On policy grounds, in Kolstad the Supreme 
Court arguably modified one aspect of this 
general rule, which could produce the harsh 
result that even a landlord who had made 
every effort to prevent discrimination could 
nevertheless be subject to punitive damages. 
Kolstad, 119 S.Ct. at 2128. Cf. Walker, 976 
F.2d at 904-905 (property owner liable for the 
conduct of employees despite instructions to 
them not to discriminate). Recognizing civil 
rights law as an effort to promote prevention 
as well as remediation and observing the 
principles underlying the Restatement’s limits 
on vicarious liability for punitive damages, 
[FN9] the Supreme Court held that, "in the 
punitive damages context, an employer could 
not be vicariously liable for the discriminatory 
employment decisions of managerial agents 
where these decisions are contrary to the 
employer’s ’good-faith efforts to comply 
with[civil rights laws].’ " Kolstad, 119 S.Ct. at 
2118, 2121, 2128. The Supreme Court
continued that "[g]iving punitive damages 
protection to employers who make good-faith 
efforts to prevent discrimination 
accomplishes [the civil rights laws’] objective 
of ’motivatting] employers to detect and deter 
[civil rights] violations.’ " Id. (internal 
citations omitted).

*12 We conclude, therefore, that the issue of 
Mr. Riga’s liability should be submitted to the 
jury. While Mr. Riga may have been abroad at 
the time of the suit, he apparently left Mrs. 
Riga in charge of the apartment building with 
authority to act on behalf of the two of them 
as a couple. At this juncture, we do not know 
if Mr. Riga made"good faith efforts to prevent 
discrimination," defined to an extent by the 
Supreme Court as efforts to "deter and detect 
[civil rights] violations" and to "enforce an 
anti-discrimination policy." Id. at 2129-2130. 
We leave to the jury on remand to determine 
whether Mr. Riga engaged in active anti- 
discrimination efforts sufficient to protect him

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from the impact of the general rule that he 
may not delegate to Mrs. Riga the duty not to 
discriminate.

D. Injunctive Relief

On appeal, the plaintiffs also argue that 
because the jury returned special verdicts 
finding that Mrs. Riga had violated the Fair 
Housing Act through a continuing course of 
refusal to deal with African-Americans, the 
District Court should have granted injunctive 
relief, not only to safeguard the rights of these 
plaintiffs, but also on a policy level to 
safeguard free access to housing. The District 
Court denied the plaintiffs’ request to present 
evidence on the need for injunctive relief, 
asserting that the plaintiffs had waived the 
request, because, although it had been a 
significant portion of the complaint and 
pretrial statement, the plaintiffs had not 
repeated the request until six days after the 
jury trial. The District Court also found that 
even had the plaintiffs not waived the request, 
there was no need for injunctive relief because 
there was not any evidence of a continuing or 
recurrent violation.

The Rigas suggest that the plaintiffs sought 
injunctive relief primarily to allow them to 
recover their attorneys’ fees, but stated the 
issue as, "whether [within the court’s 
discretion] declaratory and injunctive relief is 
necessary." Of course, the Rigas assert that 
this Court should defer to the District Court’s 
judgment that it was unnecessary; evidence 
had been presented that the Rigas had rented 
apartments to African-Americans since the 
events of the Alexanders’ lawsuit. Were we to 
examine the issue of injunctive relief on the 
merits, we would accord the District Court 
substantial deference on this matter, under 
the applicable abuse of discretion standard.
Marco v. Accent Publ’g, 969 F.2d 1547, 1548 
(3d Cir.1992) (denial of injunctive relief 
reviewed for abuse of discretion, which occurs 
if the District Court’s decision rests on a 
clearly erroneous finding of fact, an error of 
law, or a misapplication of law to the facts).
This deference is not absolute, however, and 
we would need to be mindful that deterrence 
and prevention of future discrimination, one of

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the central purposes of the civil rights 
statutes, McKennon, 513 U.S. at 358, might 
require the entry of injunctive relief. We are 
troubled to an extent by the District Court’s 
rationale, which might permit the Rigas and 
other civil rights defendants to discriminate 
and stop when caught, in enough time to 
"obviate" the need for a court to issue 
injunctive relief.

*13 Regardless of the interesting nature of 
this issue, however, we will hold, as did the 
District Court, that the issue has been waived. 
Here, six days elapsed from the time the jury’s 
verdicts were returned and the jury was 
discharged, until the plaintiffs requested a 
hearing on injunctive relief. Though the 
District Court conceded that the plaintiffs had 
requested this relief in their complaint and 
pretrial statements, "at no time during the 
pretrial conferences with the court, or during 
the trial itself, did plaintiffs’ attorneys refer to 
their requests for injunctive and equitable 
relief." We agree with the District Court that 
the issue is waived by the failure of counsel to 
raise the issue of injunctive relief prior to the 
conclusion of trial. In addition, through the 
remand we direct in this opinion, we are 
satisfied that, to some extent, the policy goal 
of deterring future discrimination will be 
effected.

E. Evidentiary Matters

In light of our decision, the remainder of the 
issues raised by both parties are either mooted 
or left to reconsideration on the limited 
remand we now grant. We comment here only 
briefly on two remaining evidentiary matters: 
(1) the plaintiffs’ claim that the District Court 
abused its discretion by excluding evidence of 
the Rigas’ discrimination against other 
African- Americans, and (2) the Rigas’ claim 
on cross-appeal that the District Court abused 
its discretion by excluding evidence of the 
Alexanders’ lack of creditworthiness and lack 
of credibility. Wefind that in neither instance 
did the District Court abuse its discretion.

The plaintiffs maintain that the District 
Court erred in excluding probative evidence of 
the Rigas’ ongoing pattern of discrimination

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in the form of an eyewitness, Steven Denson, 
who allegedly observed Mrs. Riga 
discriminating against other African- 
American applicants. The plaintiffs state that 
the witness’ address was only discovered 
during the trial, because the Rigas’ counsel 
had refused to supply it upon request. Further, 
the plaintiffs assert that were this evidence 
permitted, the Rigas would suffer no surprise 
or prejudice, inasmuch as their counsel had 
interviewed the witness previously.

*14 For their part, the Rigas dispute that 
they acted improperly with respect to this 
witness. The evidence’s relevance was 
tenuous-he might not even have been at the 
Darlington building. The District Court 
reasonably concluded that the probative value 
of the testimony was outweighed by its 
prejudicial impact.

Similarly, properly excluded was the evidence 
the Rigas proffered that the Alexanders were 
not creditworthy. Though the Rigas maintain 
that the Alexanders had to show that they 
were fully qualified to rent the apartment 
ultimately, the Alexanders only needed to 
show that they were qualified to be applicants, 
to view the apartment, and be treated no 
differently from other applicants. If this case 
were about the Alexanders’ unsuccessful 
apartment application and they could make a 
prima facie showing of discrimination, then 
the evidence of creditworthiness would indeed 
be relevant. Under the facts with which we 
are presented, however, the evidence was not 
relevant, and the District Court properly 
excluded it. Finally, the Rigas claim that they 
should have been permitted to offer evidence 
of the Alexanders’ untruthful statements on 
documents such as employment applications. 
The Rigas obviously sought to introduce this 
evidence to show conformity therewith. The 
District Court properly excluded this too, 
because it was evidence of other bad acts not 
admissible to prove the Alexanders’ character 
under Fed.R.Evid. 404 and not within the 
exceptions outlined in Fed.R.Evid. 404(b).

IV.

We will reverse the decision of the District

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Court granting judgment to the Rigas as 
against the Alexanders and the decision 
declining to submit the question of punitive 
damages to the jury. We direct the District 
Court to enter judgment for the Alexanders, 
and for other declaratory relief consistent with 
our opinion, as well as costs, including 
reasonable attorney’s fees, to the Alexanders 
and the FHP and to remand the case for a new 
trial solely to present to a jury the question of 
punitive damages as against both Mr. and 
Mrs. Riga.

FN1. The Rigas, in a cross-appeal, assert that the 
District Court erred in denying them summary 
judgment, in excluding evidence, and in denying 
them costs.

FN2. Although both Mr. and Mrs. Riga were 
defendants at trial, the special verdicts that were 
submitted to the jury were limited to determining 
Mrs. Riga’s liability for discriminatory conduct. The 
District Court concluded, mistakenly, as discussed 
infra, that only Mrs. Riga was involved in the events 
leading to this lawsuit because Mr. Riga was in Italy 
at all relevant times.

FN3. Ultimately, the District Court did grant 
judgment in the FHP’s favor, but did not award any 
damages.

FN4. The FHP, a fair housing organization, is an 
"aggrieved person" under the statute and is entitled 
to obtain relief, including punitive damages. See 
Havens Realty, 455 U.S. at 379 (1982); See also 
Growth Horizons v. Delaware County, 983 F.2d 
1277, 1281-82 (3rd Cir.1993); See also Hope, Inc. 
v. DuPage County, 717 F.2d 1061, 1074 (7th 
Cir. 1983). On appeal, the Rigas have challenged the 
FHP’s standing in this case. We note that the 
Supreme Court has held that a fair housing 
organization had standing to sue if the discriminatory 
acts impaired the organization’s ability to carry out 
its mission. Havens Realty, 455 U.S. at 378-379. 
Here, the FHP staff "stopped everything else" and 
devoted all attention to this case. It, moreover, 
diverted resources to investigate and to counter the 
Rigas’ conduct.

FN5. In conjunction with the Fair Housing Act 
"Definitions" at 42 U.S.C. § 3602.

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FN6. The Rigas urge that our holding in Gunby v. 
Pennsylvania Elec., 840 F.2d 1108, 1121-1122 (3d 
Cir. 1988), cert, denied, 492 U.S. 905, 109 S.Ct. 
3213, 106 L.Ed.2d 564 (1989) mandates that, to 
determine liability in a Fair Housing Act case, a jury 
find "causation" linked to "actual injury." Gunby is 
inapplicable here. In Gunby, the plaintiff did not 
present evidence that he suffered any emotional 
distress as a result of the loss of the sought-after job. 
Thus, we set aside the jury’s award of compensatory 
damages for emotional distress, holding that 
emotional distress cannot be presumed and that 
speculative damages are not to be awarded.

FN7. Notably, plaintiffs did object after the jury 
charge to the District Court’s special verdict 
questions charging that the jury find "legal harm” 
and "legal cause” and proposed that the special 
verdict ask only whether "harm" was caused. The 
District Court refused, stating, "... My instructions 
are clear."

FN8. Without deciding the waiver issue as to 
declaratory relief for the Alexanders, on this one 
point regarding final judgment, we are satisfied that 
even were there a waiver, the matter would be one 
of plain error. Entering judgment for the party found 
by the jury to have violated the Fair Housing Act, 
rather than for the victims who had been 
discriminated against, is a paradigmatic "miscarriage 
of justice." And, further, this improper assignment of 
judgment led to sequelae which are anathema to 
public policy, such as denial of costs to the victims 
for successfully proving a Fair Housing Act 
violation.

FN9. The Restatement (Second) of Agency, among 
other things, authorizes punitive damages "against a 
... principal because of an [agent’s] act ... if ... the 
agent was employed in a managerial capacity and 
was acting in the scope of employment," and affirms 
that even intentional, specifically forbidden torts are 
within this scope if the conduct is "the kind [the 
employee] is employed to perform," "occurs 
substantially within the authorized time and space 
limits," and "is actuated, at least in part, by a 
purpose to serve" the employer. Restatement 
(Second) of Agency SS217 C(c), 228(1), 230, cmt. 
b. (1958).

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UNITED STATES COURT OF APPEALS 
FOR THE THIRD CIRCUIT

Nos. 98-3597 and 98-3622

RONALD ALEXANDER; FAYE ALEXANDER; FAIR HOUSING PARTNERSHIP 
OF GREATER PITTSBURGH, INC.,

Appellants in No. 98-3592
v.

JOSEPH RIGA; MARIA A. RIGA a/k/a Carla Agnotti

RONALD ALEXANDER; FAYE ALEXANDER; FAIR HOUSING PARTNERSHIP
OF GREATER PITTSBURGH

v.

JOSEPH RIGA; MARIA A. RIGA a/k/a Carla Agnotti

JOSEPH RIGA and MARIA A. RIGA,
Appellants in No, 98-3622

ON APPEAL FROM THE UNITED STATES DISTRICT COURT 
FOR THE WESTERN DISTRICT OF PENNSYLVANIA

(D C. No. 96-cv-00049)
District Judge: Honorable William L. Standish

ARGUED BY COUNSEL 
October 18, 1999

Present: Sloviter, Mansmann and Roth, Circuit Judges

JUDGMENT



This cause came oh to be heard on the record from the United States District 

Court for the Western District of Pennsylvania and was argued by counsel October 18, 

1999.

On consideration whereof, it is now here ordered and adjudged by this Court that 

the judgment of the said District Court entered October 16, 1998, be, and the same is 

hereby reversed insofar as judgment was granted to the Rigas as against the 

Alexanders and the decision declining to submit the question of punitive damages to 

the jury. It is further ordered and adjudged that on remand the said District Court is 

directed to enter judgment for the Alexanders, and for other declaratory relief consistent 

with our opinion, as well as costs, including reasonable attomeys’s fees, to the 

Alexanders and Fair Housing Partnership of Greater Pittsburgh, Inc., and to conduct a 

new trial solely to present to a jury the question of punitive damages as against both 

Mr. and Mrs. Riga. Costs taxed against the Rigas as to appeal No. 98-3597. All of the 

above in accordance with the opinion of this Court.

ATTEST:

Acting Clerk

Dated: March 22, 2000



CERTIFICATE OF SERVICE

The undersigned hereby certifies that on this 5th day of April, 2000, a

true and correct copy of the foregoing Petition For Rehearing And/Or Rehearing 

En Banc was served via first class mail upon counsel for Appellants/Cross- 

Appellees at the following address:

Timothy P. O'Brien, Esquire 
Mitchell, O'Brien & Kakoff 
429 Forbes Avenue 
1705 Allegheny Building 
Pittsburgh, PA 15219

Caroline Mitchell, Esquire 
707 Grant Street 
3700 Gulf Tower 
Pittsburgh, PA 15219

Rebecca K. Troth, Esquire 
United States Department of Justice 
Civil Rights Division 
P. O. Box 66078 
Washington, D.C. 20035-6078

Charles S. Ralston, Esquire 
NAACP Legal Defense & Educational Fund 
99 Hudson Street 
16th Floor
New York, NY 10013

Counsel tor Appeliees/Uross-Appellants