Matthews Company v. Williams Petition for Writ of Certiorari

    IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1974

No.

MATTHEWS COMPANY, JOHN MATTHEWS and 
JAMES MATTHEWS,

Petitioners,
v.

D. C. WILLIAMS,
Respondent.

PETITION FOR WRIT OF CERTIORARI
To the United States Court of Appeals 

for the Eighth Circuit

H. B. STUBBLEFIELD
1200 Worthen Bank Building 

Little Rock, Arkansas 72201 
(501) 372-2121

Attorney for Petitioners
STUBBLEFIELD & MATTHEWS 

Little Rock, Arkansas 
Of Counsel

St. Louis Law Printing Co., Inc., 812 Olive Street 63101 314-231-4477



INDEX

Page

Prayer .......................................................................................  1

Opinions B elow ........................................................................ 1

Jurisdiction ..............................................................................  2

Questions Presented for R ev iew ........................................... 2

Statutes Involved.....................................................................  3

Statement of the C a s e ............................................................  4

Reasons Why the Writ Should Be G ran ted ......................... 15

Conclusion ..............................................................................  20

Appendix A— June 20, 1974 Opinion of the United States 
Court of Appeals for the Eighth C irc u it......................... A-l

Appendix B— September 20, 1973 Memorandum and 
Order of the District C o u r t ...............................................A-17

Cases Cited

Aunt Mid, Inc. v. Fjell-Oranje Lines, 458 F. 2d 712 
(1972), certiorari denied 409 U. S. 877, 34 L. Ed. 2d 
131, 93 S. Ct. 1 3 0 .................    20

Edwin L. Wiegand Company v. Jurinko et al., 414 U.S.
970, 38 L. Ed. 2d 214, 94 S. Ct. 293 (1 9 7 3 )................2, 16

Espinoza v. Farah Manufacturing Company, Inc., 414 U.S.
86, 38 L. Ed. 2d 287, 94 S. Ct. 334 (1 9 7 3 ).................. 17

Fagan v. National Cash Register Company, 481 F. 2d 
1115 (District of Columbia C ircu it)...............................  16



11

Hill v. American Airlines, Inc., 479 F. 2d 1057, 1060 
(1973, Fifth C ircu it).........................................................  19

McAllister v. United States, 348 U.S. 19, 99 L. Ed. 20
(1954) ..................................................................................  20

McDonnell Douglas Corporation v. Green, 411 U.S. 792,
36 L. Ed. 2d 668, 93 S. Ct. 1817 (1 9 7 3 )................2, 15, 16

Terrell v. Feldstein Company, Inc., 468 F. 2d 910 (1972) 19

Statutes Cited

28 U.S.C. § 1254(1) and § 2 1 01 (c)...................................... 2

42 U.S.C. § 1981 and § 1982 ............................................... 3

42 U.S.C. § 3602(b) and § 3604 ................................... 3, 4. 17

Other Citations

Rule 52(a), Fed. R. Civ. P ....................................... 3, 18, 19, 20

Wright & Miller, Federal Practice and Procedure, Civil 
Sec. 2586 (Vol. 9, page 7 3 7 ) ............................................  18



IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1974

No.

MATTHEWS COMPANY, JOHN MATTHEWS and 
JAMES MATTHEWS,

Petitioners,
v.

D. C. WILLIAMS,
Respondent.

PETITION FOR WRIT OF CERTIORARI
To the United States Court of Appeals 

for the Eighth Circuit

Matthews Company, John Matthews and James Matthews, 
petitioners herein, respectfully pray that a Writ of Certiorari 
be issued to review the judgment of the United States Court 
of Appeals for the Eighth Circuit entered in this action on 
June 20, 1974.

OPINIONS BELOW

The June 20, 1974 opinion of the United States Court of 
Appeals for the Eighth Circuit is reprinted in Appendix A 
hereto. The September 20, 1973 “Memorandum and Order” con-



2 —

taining the judgment of the United States District Court for 
the Eastern District of Arkansas, Western Division is reprinted 
in Appendix B hereto. Neither of these two opinions has been 
officially reported as of the date of the preparation of this 
petition.

JURISDICTION

The opinion and judgment of the United States Court of 
Appeals for the Eighth Circuit entered June 20, 1974 is sought 
to be reviewed. The motion of petitioners (appellees) for a stay 
of the mandate pending a petition to the Supreme Court of the 
United States for a writ of certiorari was granted by the order 
of the Eighth Circuit entered July 12, 1974.

The jurisdiction of this Court to review said June 20, 1974 
opinion and judgment of the Eighth Circuit is invoked under 
28 U.S.C. § 1254(1) and § 2101(c).

QUESTIONS PRESENTED FOR REVIEW

(1) Are the holdings of the Court of Appeals as set forth in 
the June 20, 1974 opinion of Circuit Judge Myron H. Bright 
inconsistent with the decisions of this Court in McDonnell-Doug- 
las Corporation v. Green, 411 U.S. 792, 36 L Ed2d 668, 93 S 
Ct. 1817 (1973), and in Edwin L. Wiegand Company v. Ju- 
rinko et a l, 414 U.S. 970, 38 L Ed 2d 214, 94 S. Ct. 293 
(October 23, 1973)?

(2) Should the landowner be held liable to a prospective pur­
chaser for violation of the Fair Housing Act where the find­
ings of the district court are that he “was not denied the right 
to purchase real property because of his race”, that he was 
never “actually denied the right to purchase for any reason”,



—  3

that he “was in fact offered the opportunity to purchase on 
terms available to all persons”, and that the business practice 
of the landowner of selling vacant lots to builders only “was 
not adopted because of racial considerations and was not used, 
or intended to be used, as a ruse by which to exclude blacks”, 
there being no evidence of any pretext or coverup, “aimed at 
excluding, or discriminating against, blacks”?

(3) In a Fair Housing Act case may a prospective purchaser 
require the landowner to change its established business prac­
tice by selling a lot to be left vacant or used to build a $5,000 
house next door to a $ 150,000 house in an architecturally con­
trolled residential subdivision?

(4) With respect to findings of fact by the District Court 
does the June 20, 1974 opinion of the Eighth Circuit erro­
neously apply the “prima facie” rule instead of the “clearly 
erroneous” test required by Rule 52(a) of Fed. R. Civ. P.?

STATUTES INVOLVED

This case involves the Civil Rights Acts of 1870 and 1866 
(42 U.S.C. § 1981 and § 1982) and the Fair Housing Act of 
1968 particularly §804 thereof (42 U.S.C. §3604) which are as 
follows:

42 U.S.C. § 1981 provides: “All persons within the juris­
diction of the United States shall have the same right in 
every State and Territory to make and enforce contracts, 
to sue, be parties, give evidence, and to the full and equal 
benefit of all laws and proceedings for the security of per­
sons and property as is enjoyed by white citizens, and shall 
be subject to like punishment, pains, penalties, taxes, li­
censes, and exactions of every kind, and to no other.”

42 U.S.C. § 1982 provides: “All citizens of the United 
States shall have the same right, in every State and Terri­



—  4 —

tory, as is enjoyed by white citizens thereof to inherit, pur­
chase, lease, sell, hold and convey real and personal prop­
erty.”

42 U.S.C. § 3604 provides, in relevant part, that it shall 
be unlawful—

“(a) To refuse to sell or rent after the making 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, reli­
gion, or national origin.

“(b) To discriminate against any person in the terms, 
conditions, or privileges of sale or rental of a dwelling, 
or in the provision of services or facilities in connec­
tion therewith, because of race, color, religion, or na­
tional origin.”

“Dwelling” as used in § 3604 is defined in 42 U.S.C. 
§ 3602(b) as: “(b) ‘Dwelling’ means any building, structure, 
or portion thereof which is occupied as, or designed or in­
tended for occupancy as, a residence by one or more fami­
lies, and any vacant land which is offered for sale or lease 
for the construction or location thereon of any such build­
ing, structure, or portion thereof.”

STATEMENT OF THE CASE

This suit was instituted in April, 1970, by respondent, D. C. 
Williams, against petitioners, Matthews Company and two of its 
officers, in the District Court at Little Rock, Arkansas, alleging 
that petitioners refused to sell him a vacant residential lot in 
Lakewood (North Little Rock, Arkansas) because he was black.

On March 17, 1970, respondent first contacted any of peti­
tioners, which original contact followed numerous lengthy tele­



—  5 —

phone conversations between his Little Rock lawyer and John 
Matthews, one of the petitioners. The findings of the District 
Court with respect to these conversations, which were undis­
puted at the trial, were that from February 7 through March 13, 
1970, respondent’s Little Rock lawyer and John Matthews en­
gaged in lengthy conversations concerning integration of Lake- 
wood and other matters with the lawyer telling petitioner John 
Matthews that his client, D. C. Williams (respondent) could pur­
chase a lot, leave the lot vacant or put up a $5,000 house, even 
though the house on the lot adjacent might be worth $150,000 
and that John Matthews treated these conversations as “threats 
to destroy Lakewood” as a means to convince John Matthews 
to use his political influence with the City officials of North 
Little Rock in connection with an entirely unrelated matter.

The district court found that petitioners “at the time they were 
first contacted by the plaintiff (respondent) wanted to get the 
integration of Lakewood started as soon as possible.” At the 
trial there was no substantial dispute of the fact that petitioners 
desired to have a black family move into Lakewood, but would 
not sell a vacant lot next to a $150,000 house for plaintiff 
(respondent) or anyone to build a $5,000 house on it or not to 
build any house on it if he didn’t want to. Respondent (plaintiff) 
was the first black individual attempting to purchase property 
in Lakewood or other subdivisions developed by petitioner 
Matthews Company.

In keeping with recommendations of national subdivision de­
velopment organizations, petitioners had endeavored to develop 
residential communities where the quality, design and location 
of all residences are regulated and controlled and where property 
values continue to increase over the years. The accomplish­
ment of these objectives was originally attempted by placing 
a minimum cost required for each residence during the late 
1920’s and 1930’s which was unsatisfactory. Thereafter, a 
minimum square footage was required for each residence which 
didn’t accomplish the purpose either. About 1950, the pe­



— 6

titioners began to require plan approval for each residence, a 
practice now commonly referred to as “architectural control”, 
but this was not completely satisfactory. In December, 1969, in 
keeping with practices which other successful suburban de­
velopers throughout the United States had tried and found help­
ful in the development of a better suburbia for this Country, 
petitioners adopted a policy of not selling lots to individuals 
but only to approved Lakewood builders.

John Matthews the principal owner of petitioner Matthews 
Company is on the Board of Trustees of Community Builders 
Council of the Urban Land Institute (formerly an institute of 
the Real Estate Board) which has meetings three times a year 
where different developers throughout the various sections of 
the Country exchange ideas in an effort to improve residential 
development so values will increase, and be more desirable 
and to generally develop suburbia in a more attractive way. 
Petitioner John Matthews who had been a member of this in­
stitute since it was formed some twenty-five years ago, and his 
son, James Matthews, President of petitioner Matthews Com­
pany, returned from an Urban Land Institute meeting in the 
Baltimore area in the fall of 1969, at which meeting the idea of 
utilizing a limited number of builders was recommended as 
being followed uniformly in many of the subdivisions through­
out the country. At this fall of 1969 meeting it was brought out 
that The Rouse Company in developing Columbia between 
Baltimore and Washington, D. C. used only a very few ap­
proved builders. This policy to sell lots only to approved build­
ers was then adopted by Matthews Company in December, 
1969, and was set forth in letters to all builder-customers of 
petitioner Matthews Company, on December 29, 1969. This 
new business practice adopted in 1969 of not selling lots to 
individuals but only to approved Lakewood builders was made 
known to respondent (plaintiff) when he first inquired about 
buying a lot and is set forth in paragraph numbered eight of his 
complaint.



7

The purpose of this change in the business practice of pe­
titioner Matthews Company was, (a) to eliminate vacant lots; 
(b) avoid unnecessary removal of trees and excessive grading 
on a lot; (c) to have the residence and carport designed to con­
form to the particular lot; (d) to stagger houses to give better 
appearance along the street; and, (e) to thereby insure that 
values in the subdivision will increase. Nothing whatsoever 
relating to race, color, religion or national origin entered into 
the decision of petitioner Matthews Company when it adopted 
this new business practice in December of 1969 of not selling 
lots to individuals but only to approved Lakewood builders.

Included in the district court’s findings of fact about the con­
versations (before this suit was filed) between respondent’s 
Little Rock lawyer and petitioner John Matthews is:

“The topic of conversation in each one of these tele­
phone conversations has included my contention that John 
Walker seems not seriously trying to move a black family 
into Lakewood but rather is apparently attempting to 
harass or frighten us with the prospect of Lakewood in­
tegration, his sole purpose apparently being to get us 
to use our influence with Mayor Laman (mayor of North 
Little Rock) to stall a proposed apartment project near the 
Glenview Subdivision where John Walker’s clients, Mr. 
and Mrs. Donnie Williams live.”

At the trial petitioner John Matthews testified (which testi­
mony was not disputed) about the first of these lengthy tele­
phone conversations as follows:

“I called Mr. Walker for the first time on February 7, 
1970. It was a very friendly conversation. I had heard of 
Mr. Walker, told him I had heard of him, and had heard 
nice things about him. * * * I said, ‘Now tell me what your 
purpose is now.’ He said, ‘What I want to do is to move 
a black family into Lakewood.’ I said, ‘Well, you’ve called



— 8 —

the right man because I couldn’t want to do anything 
any more.’ This was definitely not the answer Mr. Walker 
wanted from me.”

And to the same effect in the 12/7/71 deposition of John 
Matthews about this same conversation, to-wit:

“Now this is an interesting question, because it is the same 
question you asked me as the first of a series of telephone 
conversations, lengthy telephone conversations. My answer 
to you is the same now as it was then I hope, and that is 
that I personally think that the segregated neighborhoods 
are morally wrong, that I would like to work with you in 
every way I could to bring this man and this fine colored 
family into Lakewood. Now this was our first conversation. 
I lost your interest I believe about there. Our conversation 
from then on centered on the part of your wanting to buy 
a lot in Heritage Park (a part of Lakewood) next to $150,- 
000.00 house where you could build a $5,000.00 house. 
* * * my answer remains that we would love to have 
colored people living in Lakewood. My answer also re­
mains that we would not welcome or approve a $5,000.00 
house, and this is what you talked to me about, not the 
colored question. That was not in it.”

In the brief for appellees (petitioners) filed in the Eighth Cir­
cuit, it was pointed out that in the district court there was only 
one plaintiff and in the Eighth Circuit only one appellant, D. C. 
Williams, although both the Appendix and the brief filed for 
appellant (respondent) in the Eighth Circuit show “D. C. Wil­
liams, et ux., Appellants.” The reply brief filed in the Eighth 
Circuit for appellant (respondent) admits the fact that “Mrs. 
Williams is not, as appellees have pointed out, a named plain­
tiff below,” but is plaintiff’s (respondent’s) wife. The June 20, 
1974 opinion of the Eighth Circuit incorrectly shows “D. C. 
Williams, et ux., Appellants.” This is important only as a glar­



—  9

ing example of another instance where Circuit Judge Bright in 
his opinion disregards an undisputed fact.

In the third from the last paragraph of the June 20, 1974 
opinion of the Eighth Circuit, Circuit Judge Bright states 
“Matthews could direct that its approved builders make the 
building lots they buy from Matthews available without dis­
crimination to all persons regardless of race.”

Petitioners had already done exactly what Circuit Judge 
Bright suggests in his opinion.

Both respondent’s wife and petitioner James Matthews testi­
fied to the effect that Matthews did attempt to make lots sold to 
builders available to respondent.

At the trial in the district court, Mrs. Dinah C. Williams 
(respondent’s wife) in response to a question by his attorney to 
state the full text of the March 18, 1970 conversation with 
petitioner James Matthews (President of Matthews Company) 
about buying a vacant lot in Lakewood, testified, “he told us 
at this time that he would not sell us a lot because they did not 
sell to individuals, that they hadn’t sold to individuals, that they 
hadn’t sold any lots to individuals this year. He told us that in 
order for us to come to Lakewood, we’d have to get a builder 
and buy a lot or have the builder buy the lot, and we would 
deal directly with the builder. He told us that we- could bring 
our own builder or they could suggest a builder for us.’ (Em­
phasis supplied.)

In addition to the foregoing admission by respondent’s wife 
at the trial that she was told petitioners “could suggest a builder 
for us,” petitioner James Matthews, in his deposition testified 
with respect to this same conversation, “I told Mr. Williams, I 
believe Mrs. Williams was there too, that if they wished I would 
work with them through a builder whom I knew, and would 
make contact with this builder and for them to get their house



■ 1 0 -

plans up, or think about what they wanted in the way of a house 
and get back in touch with me and I’d set up this meeting.” 
That they were evasive about house plans and said that they 
had no house plans yet.

With respect to this change in the business practice of peti­
tioner Matthews Company which the 6 /20 /74  opinion of the 
Eighth Circuit refers to as “pure chimera,” the specific findings 
of fact by the District Court are as follows: “John Matthews 
testified, and the Court finds, that this practice of selling lots 
only to a limited number of builders, and not to individuals, is 
widespread among land developers across the country and that 
Matthews was sold on the idea at the meeting of the Urban Land 
Institute. It is clear from the evidence that the decision to adopt 
this practice was not related to racial considerations. Mr. 
Matthews stated that, since December 29, 1969, the Matthews 
Company has not sold lots to individuals and that no signs ad­
vertising the company’s lots for sale have been posted, although 
a few older signs remained posted due to simple negligence on 
the part of company employees in failing to remove all of 
them.”

Respondent, D. C. Williams, did not testify at the trial of this 
case but in his May 27, 1970 deposition related his conversation 
with James Matthews on March 18, 1970 (following their first 
conversation on March 17th), and stated, “He did call on the 
following day and he talked with my wife, telling my wife again 
the same as he told us the day before, he did not sell lots to indi­
viduals, only to builders. But he said he would sell us a house.”

The only finding of fact by the District Court quoted in the 
June 20, 1974, opinion of the Eighth Circuit is that, “Mr. and 
Mrs. Williams did in good faith attempt to purchase a lot in 
Lakewood with the intention of building a home valued be­
tween $30,000 and $40,000.” Although this finding is not ma­
terial in considering this petition for certiorari and reinstating



11

the judgment of the District Court, petitioners contend that it is 
the only finding of fact by the District Court which is “clearly er­
roneous” under the provisions of Rule 52(a) of Fed. R. Civ. P.

In taking the deposition of respondent on May 27, 1970, he 
was asked about complying with the provisions of the Bill of 
Assurance covering all lots in Lakewood, whereupon his Little 
Rock lawyer objected and stated, “it’s my position and conten­
tion as his attorney, I want to make it clear, that most of those 
covenants that you all have, as I have seen them, are patently 
illegal.” This was two months and ten days after respondent 
had first talked with any of petitioners about a Lakewood lot.

At the trial the constant efforts over a period of many years 
of petitioners to eliminate and avoid the unsightliness, inatten­
tion and undesirability of having vacant unimproved lots in a 
subdivision was undisputed. It was also undisputed that peti­
tioner Matthews Company does not have or use any real es­
tate salesmen.

Respondent, D. C. Williams, in his December, 1971 depo­
sition in response to questions by petitioners’ attorney about 
wanting to buy a vacant lot in Lakewood testified as follows:

“Q. What would you want to use it for?
“A. Well, maybe in the future, I’ll say in the future 

build a home on it.

“Q. What are you talking about in the future, how far 
in the future?

“A. Well, when my—I suppose when I become finan­
cially able to build the type of home that we would be 
interested in.

“Q. Are you talking about several years from now 
maybe?

“A. Yes.



—  12

“Q. How old are you now?

“A. Thirty-nine.

“Q. And it would be your purpose just to let your lot 
remain vacant then for several years until you got ready 
to build a home on it?

“A. That’s right. * * *

“Q. Do you recognize the right and authority of the 
owner of property to exercise reasonable restrictions in 
carrying out a general plan in developing the area where 
the property is located?

“A. No, I do not. * * *

“Q. Now would you just tell me in your own words 
exactly what your complaint in this law suit is against these 
defendants?

“A. The complaint is not selling me a vacant lot in 
Lakewood, refusing to sell me a lot.

“Q. And the fact they wouldn’t sell anyone a vacant 
lot you don’t think that makes any difference to you?

“A. I don’t know about not selling anyone a vacant 
lot, but refused not to sell me one.

“Q. Or the fact they would first want to know that he 
is going to build soon, and build according to the archi­
tectural control provisions of the purchaser’s agreement 
and bill of assurance, that wouldn’t------

“A. What do you mean by architectural control?

“Q. You have never read one of the purchaser’s agree­
ments or the bills of assurance have you?

“A. No.

“Q. Well, it requires the developer to approve the plans 
for any house that’s built there to be sure that it is in



13

keeping with the type of development in the neighbor­
hood. * * *

“Q. And you have made no effort to obtain a copy of 
the requirements they have to build in Lakewood?

“A. No.”

The testimony of Mrs. Williams, respondent’s wife, at the 
trial in the District Court in the summer of 1972 was some­
what more sophisticated but she admitted that she and her 
husband (respondent) were “completely in accord” on all of 
their plans and undertakings.

Accordingly, the undisputed evidence shows that prior to 
the time this suit was filed in April, 1970, neither respond­
ent, D. C. Williams, nor his wife expressed any intention of 
“building a home valued between $30,000 and $40,000” and 
the contrary finding by the district court, obviously based on 
the change in the testimony presented at the trial in the sum­
mer of 1972, is “clearly erroneous.”

In the September 20, 1973 “Memorandum and Order” of 
the district court (Garnett Thomas Eisele, U.S. District Judge), 
both the individual claim and class action claims of respond­
ent (plaintiff) were dismissed.

On June 20, 1974, a three judge panel of the Eighth Cir­
cuit determined that respondent “has failed to show that other 
black persons have attempted and been denied the right to 
purchase property in Lakewood or other Matthews Company 
subdivisions” and approved dismissal of the class action, but 
ruled that respondent, D. C. Williams, is entitled to the follow­
ing relief: “(1) a declaratory judgment of his rights to purchase 
property in any subdivision developed by the Matthews Com­
pany; (2) counsel fees on trial and on appeal; * * * (3) court 
costs; (4) actual damages for the defendant’s (petitioner’s) fail­
ure to sell Williams a lot during the spring of 1970, to include



—  14 —

such sum as will properly compensate plaintiff (respondent) 
for his deprivation of civil rights and for humiliation suffered 
by him * * *; and (5) punitive damages not to exceed $1,000,” 
and reversed and remanded the case for the entry of a judg­
ment in the district court “consistent with this opinion.”

By order entered July 12, 1974, the Eighth Circuit granted 
the motion of appellees (petitioners) for a stay of the mandate 
pending a petition to the Supreme Court of the United States 
for a Writ of Certiorari.



— 15

REASONS WHY WRIT SHOULD BE GRANTED

1

The June 20, 1974 opinion of the Eighth Circuit stands in 
flagrant disregard of the May 14, 1973 decision of this Court 
in McDonnell Douglas Corporation v. Green, 411 U.S. 792, 36 
L. Ed. 2d 668, 93 S. Ct. 1817, which although cited by the 
Eighth Circuit is in direct conflict with the applicable rulings 
of this Court in the McDonnell opinion. The following quo­
tations are from this Court’s May 14, 1973 decision in Mc­
Donnell: that, “the court below seriously underestimated the 
rebuttal weight to which petitioner’s reasons were entitled”; 
also, “we think that respondent carried his burden of establish­
ing a prima facie case of racial discrimination and that peti­
tioner successfully rebutted that case. But this does not end 
the matter. On retrial, respondent must be afforded a fair op­
portunity to demonstrate that petitioner’s assigned reason for 
refusing to re-employ was a pretext or discriminatory in its 
application. * * * In the absence of such a finding, petitioner’s 
refusal to rehire must stand.” As was ruled in McDonnell (and 
authorities there cited), the weight to be accorded the evidence 
about any pretext, coverup, or practice discriminatory in its 
application should be determined by the district court, the trier 
of facts.

In the case at bar, the district court has already made and 
entered findings of fact that the business practice of petitioner 
Matthews Company of selling vacant lots to builders only, “was 
not adopted because of racial considerations and was not used, 
or intended to be used, as a ruse by which to exclude blacks”. 
These findings by the district court were made after respond­
ent was given a full and fair opportunity to demonstrate by 
competent evidence that the business practices of petitioners 
were in fact a pretext or coverup for race discrimination as 
required by the opinion of this Court in McDonnell.



—  16

The June 20, 1974 decision of the Eighth Circuit involving 
the Federal Fair Housing Act is in conflict with the decision 
of this Court involving the Federal Civil Rights Act in Mc­
Donnell which vacates the judgment of the Court of Appeals, 
Eighth Circuit, and remands to the district court for that court 
to make findings of fact and determine the weight to be ac­
corded the evidence about any pretext. Because of the findings 
of fact already made by the district court (which was reversed 
by the Eighth Circuit), this case should be remanded to the 
Eighth Circuit with directions to re-enter the judgment of the 
district court dismissing the claims of respondent. The extreme 
departure by the Eighth Circuit from the decision in McDonnell 
involving such important federal questions, until resolved, will 
be enhanced by the lapse of time.

Another recent decision of this Court constituting a com­
pelling reason for granting the writ in the case at bar is Edwin 
L. Wiegan Company v. Jurinko et al., 414 U.S. 970, 38 L. 
Ed.2d 214, 94 S. Ct. 293, where on October 23, 1973, this 
Court granted the petition for a writ of certiorari directed to 
the Third Circuit. In Wiegand, a Federal District Court of 
Pennsylvania had awarded two married women substantial 
amounts as back wages and attorney’s fee for alleged discrim­
ination against them in violation of the Civil Rights Act of 
1964. The Court of Appeals, Third Circuit (477 F. 2d 1038) 
expanded the award of the district court to include seniority 
and additional back pay. In granting the writ, this Court va­
cated the judgment and remanded the case to the Circuit Court 
of Appeals for further consideration in light of McDonnell 
Douglas Corporation v. Green, supra.

Another recent case in which McDonnell is cited and fol­
lowed is Fagan v. National Cash Register Company, 481 F. 
2d 1115 (District of Columbia Circuit), where the findings of 
the district court are affirmed.



— 17

2

The pertinent portion of the Fair Housing Act of 1968 (42 
U.S.C. 3604) actually involved in the case at bar makes it un­
lawful to refuse to sell or to discriminate against any person 
in the terms, conditions or privileges of sale “because of race, 
color, religion or national origin”. In the November 19, 1973 
opinion of this Court, Espinoza v. Farah Manufacturing Com­
pany, Inc., 414 U.S. 86, 38 L. Ed.2d 287, 94 S. Ct. 334, in­
volving the Civil Rights Act of 1964, the language of the opin­
ion (94 S. Ct. on page 340) restricts the illegal discrimination 
to the exact language of the federal act involved. In the case 
at bar, as in Espinoza, there was no discrimination made un­
lawful by the act. In fact, there was no discrimination at all. 
The specific findings of fact by the district court include, that 
respondent “was not denied the right to purchase real property 
because of his race”, that respondent was never “actually denied 
the right to purchase for any reason”, that respondent “was 
in fact offered the opportunity to purchase on terms available 
to all persons”, that petitioners “at the time they were first 
contacted by the plaintiff (respondent) wanted to get the inte­
gration of Lakewood started as soon as possible”, and that re­
spondent failed to show that any person of his race “except 
the individual plaintiff (respondent) has attempted to purchase 
property in Lakewood or other subdivisions developed by the 
(petitioner) Matthews Company”.

Nothing in the federal acts require petitioners to seek out 
prospective purchasers of different races or colors, having dif­
ferent religions, or from different national origins.

3 & 4

The Eighth Circuit wrongfully applied the “prima facie” 
rule instead of the “clearly erroneous” test required in consid­
ering the findings of fact by the district court.



18

Rule 52(a), Fed. R. Civ. P. provides: “In all actions tried 
upon the facts without a jury * * * Findings of fact shall not 
be set aside unless clearly erroneous, and due regard shall be 
given to the opportunity of the trial court to judge of the 
credibility of the witnesses.”

Although three of the four “Issues Presented for Review” set 
forth in the brief for appellees (petitioners) in the Eighth Circuit 
mentions this “clearly erroneous” test required with respect to 
findings of fact by the district court, the June 20, 1974 opinion 
of the Eighth Circuit completely ignores the clearly erroneous 
requirement but repeatedly mentions “prima facie case”. The 
applicable law is clearly set forth in Wright & Miller, Federal 
Practice and Procedure; Civil Sec. 2586 (Vol. 9, page 737) as 
follows: “Though the appellate court can never set aside a find­
ing of fact unless it is clearly erroneous, it must be especially 
reluctant to set aside a finding based on the trial judge’s evalua­
tion of conflicting oral testimony, and will do so only under 
most unusual circumstances.”

Many of the findings of fact of the district court are based 
on undisputed testimony. It was undisputed at the trial that 
for many years petitioners had constantly endeavored to elim­
inate and avoid the unsightliness, inattention and undesirability 
of having vacant unimproved lots in a residential subdivision 
and to carry out a general plan to create a neighborhood for 
people to live where residences were constructed to compliment 
each other and would increase in value.

A finding of fact by the district court based on testimony 
which was not contradicted was that from February 7th through 
March 13th, 1970, respondent’s Little Rock lawyer and peti­
tioner John Matthews engaged in lengthy telephone conversa­
tions concerning the integration of Lakewood and other mat­
ters with the lawyer telling Matthews that his client, respondent, 
D. C. Williams, could purchase a lot in Lakewood, leave the



—  19

lot vacant or put up a $5,000 house even though the house on 
the adjacent lot might be worth $150,000, and that John 
Matthews, “believed that his conversations with Mr. John Walker 
were related to the plaintiff’s (respondent’s) overtures and that 
Mr. Walker was using what appeared to be threats to destroy 
Lakewood as a means to convince Mr. Matthews to use his 
political influence with the city officials of North Little Rock 
in connection with an entirely unrelated matter”.

An important and compelling reason for granting the writ 
of certiorari in the case at bar is to secure uniformity of this 
June 20, 1974 decision of the Eighth Circuit with decisions 
of courts of appeal in the various circuits and with the decision 
of this Court with respect to the application of the aforemen­
tioned “clearly erroneous” test to findings of fact by the district 
court, including the following:

Terrell v. Feldstein Company, Inc., 468 F. 2d 910, is a suit 
in which, in the District Court, plaintiff asserted that in vio­
lation of civil rights statutes defendant maintained a racially 
discriminatory promotional policy. The District Court entered 
judgment adverse to plaintiff and the United States Court of 
Appeals, Fifth Circuit, on November 3, 1972, in affirming the 
District Court stated (on page 911 of the opinion), “the dis­
trict court’s findings of fact more than pass muster under Rule 
52(a), Fed. R. Civ. P. * * * In short, Terrell fails to carry his 
burden of showing, as the attacking party must, that the dis­
trict court’s fact findings were ‘clearly erroneous’ ” (Citing au­
thorities).

Hill v. American Airlines, Inc., 479 F.2d 1057, 1060 (1973, 
Fifth Circuit), states, “Fundamental to our conclusion is the 
finding of fact by the district court that American did not dis­
criminate against Hill. Despite our sensitivity to charges of dis­
crimination, this finding is still entitled to the ‘clearly erroneous’ 
protection on review afforded by Rule 52(a), Fed. R. Civ. P.”



—  20 —

(Citing authorities). The Hill case involves a suit alleging dis­
criminatory employment practices on the part of the airline de­
fendant where the district court entered judgment in favor of 
the airline defendant and plaintiff appealed. This holding in 
Hill is equally applicable here.

When findings are made by the District Court, the Court 
of Appeals is bound by the “clearly erroneous” test set forth in 
Rule 52 (a), Fed. R. Civ. P., Aunt Mid, Inc. v. Fjell-Oranje 
Lines, 458 F.2d 712 (1972), certiorari denied, 409 U.S. 877, 
34 L. Ed. 2d 131, 93 S. Ct. 130. To the same effect see 
McAllister v. United States, 348 U.S. 19, 99 L. Ed 20 (1954), 
and numerous authorities there cited, affirming the judgment of 
the U. S. District Court which was reversed by the U.S. Court 
of Appeals, the U.S. Supreme Court stating that the Court of 
Appeals in reviewing the findings of the District Court had not 
applied proper standards and declaring that the Court of Ap­
peals may not set aside the judgment below unless it is clearly 
erroneous.

All of the foregoing authorities are equally applicable in the 
case at bar and sustain petitioners’ contention that said June 
20, 1974 opinion of the Eighth Circuit by disregarding the 
“clearly erroneous” test for findings of the district court has 
so far departed from the accepted and usual course of judicial 
proceedings as to call for an exercise of this Court’s power of 
supervision.

CONCLUSION

For the foregoing compelling reasons, the case at bar is a 
proper case for issuance of the writ of certiorari and reinstating 
the judgment of the district court as a matter of sound judicial 
discretion.



21 —

(Memo: In this petition, quotations of and references to 
testimony not appearing in the September 20, 1973 Memo­
randum and Order of the district court reprinted in Appendix 
B hereto are from the Appendix filed by respondent, appellant, 
in the Eighth Circuit, and if questioned, can be verified by hav­
ing the clerk of that court certify and transmit same to this 
Court.)

Respectfully submitted,

H. B. STUBBLEFIELD
1200 Worthen Bank Building 

Little Rock, Arkansas 72201 
(501) 372-2121

Attorney for Petitioners

STUBBLEFIELD & MATTHEWS 
Little Rock, Arkansas 
Of Counsel



APPENDIX



— A-l

APPENDIX A

United States Court of Appeals 
for the Eighth Circuit

No. 73-1765

D. C. Williams, et ux.,
Appellants,

The Matthews Company, et al.,
Appellees, j

A p p e a l  from the 
United States Dis­
trict Court for the 
Eastern District of 
Arkansas.

Submitted: March 13, 1974 

Filed: June 20, 1974

Before G ib s o n , B r ig h t  and S t e p h e n s o n , Circuit Judges.

B r ig h t , Circuit Judge.

D. C. Williams, a black man from North Little Rock, Arkan­
sas, brought this civil action, individually and as a class repre­
sentative for other black persons, charging defendants with 
racial discrimination in refusing to sell residential building lots 
to black people in violation of the Civil Rights Acts of 1870 
and 1866 (42 U.S.C. §§1981, 1982)1 and §804 of the Civil 1

1 42 U.S.C. § 1981 provides:
All persons within the jurisdiction of the United States shall 

have the same right in every State and Territory to make and



— A-2

Rights Act of 1968 (42 U.S.C. §3604).2 In addition to declara­
tory and injunctive relief, plaintiff sought compensatory damages 
and reasonable attorney’s fees. Jurisdiction was asserted under 
28 U.S.C. §13433 and 42 U.S.C. §3612.4

enforce contracts, to sue, be parties, give evidence, and to the 
full and equal benefit of all laws and proceedings for the se­
curity of persons and property as is enjoyed by white citizens, 
and shall be subject to like punishment, pains, penalties, taxes, 
licenses, and exactions of every kind, and to no other.

42 U.S.C. § 1982 provides:
All citizens of the United States shall have the same right, in 

every State and Territory, as is enjoyed by white citizens 
thereof to inherit, purchase, lease, sell, hold and convey real 
and personal property.

2 42 U.S.C. § 3604 provides in relevant part:
[I]t shall be unlawful—

(a) To refuse to sell or rent after the making of a bona fide 
offer, or to refuse to negotiate for the sale or rental of, or oth­
erwise make unavailable or deny, a dwelling to any person be­
cause of race, color, religion, or national origin.

(b) To discriminate against any person in the terms, condi­
tions, or privileges of sale or rental of a dwelling, or in the 
provision of services or facilities in connection therewith, be­
cause of race, color, religion, or national origin.

“Dwelling” as used in § 3604 is defined in 42 U.S.C. § 3602(b) as:
(b) “Dwelling” means any building, structure, or portion 

thereof which is occupied as, or designed or intended for occu­
pancy as, a residence by one or more families, and any va­
cant land which is offered for sale or lease for the construction 
or location thereon of any such building, structure, or portion 
thereof.

:: 28 U.S.C. § 1343 provides in relevant part:
The district courts shall have original jurisdiction of any 

civil action authorized by law to be commenced by any person:
❖  ❖  ❖  ❖  * *

(3) To redress the deprivation, under color of any State law, 
statute, ordinance, regulation, custom or usage, of any right, 
privilege or immunity secured by the Constitution of the United 
States or by any Act of Congress providing for equal rights of 
citizens or of all persons within the jurisdiction of the United 
States;



A-3

In dismissing the class action aspects of the case and denying 
Williams any individual relief, the trial court concluded that the 
defendants accorded Williams “special handling” only for the 
purpose of accomplishing smoothly some integration of their 
all-white real estate subdivision, Lakewood, and that the defend­
ants refused to sell Williams a real estate lot in pursuance of 
their valid policy of restricting sale of lots only to “qualified” 
building contracts. We reverse and remand.

We think that racial discrimination by the defendants in their 
real estate operations is shown as a matter of fact and law. The 4

(4) To recover damages or to secure equitable or other relief 
under any Act of Congress providing for the protection of 
civil rights, including the right to vote.

4 42 U.S.C. § 3612 provides in relevant part:
(a) The rights granted by sections 3603, 3604, 3605, and 

3606 of this title may be enforced by civil actions in appropri­
ate United States district courts without regard to the amount 
in controversy and in appropriate State or local courts of gen 
eral jurisdiction. A civil action shall be commenced within one 
hundred and eighty days after the alleged discriminatory hous­
ing practice occurred: Provided, however, That the court shall 
continue such civil case brought pursuant to this section or 
section 3610(d) of this title from time to time before bringing 
it to trial if the court believes that the conciliation efforts of 
the Secretary or a State or local agency are likely to result in 
satisfactory settlement of the discriminatory housing practice 
complained of in the complaint made to the Secretary or to 
the local or State agency and which practice forms the basis 
for action in Court: And provided, however, That any sale, 
encumbrance, or rental consummated prior to the issuance of 
any court order issued under the authority of this Act, and in­
volving a bona fide purchaser, encumbrancer, or tenant with­
out actual notice of the existence of the filing of a complaint 
or civil action under the provisions of this Act shall not be af­
fected.

# *  *  *  *  * *

(c) The court may grant as relief, as it deems appropriate, 
any permanent or temporary injunction, temporary restraining 
order, or other order, and may award to the plaintiff actual 
damages and not more than $1,000 punitive damages, together 
with court costs and reasonable attorney fees in the case of a 
prevailing plaintiff: Provided, That the said plaintiff in the opin­
ion of the court is not financially able to assume said attorney’s 
fees.

[Footnotes 3 and 4 continued on following page]



— A-4 —

defendants’ policy of selling lots only to builders, which, under 
the circumstances, operated to exclude black persons from ac­
quiring building lots in the real estate subdivision, does not af­
ford any legal justification for defendants’ conduct.

I

The facts relating to defendants’ conduct appear without sub­
stantial dispute in the record. Although defendants attacked 
the bona tides of Williams’ proposal to purchase real estate, the 
trial court resolved that issue in Williams’ favor in finding that 
“Mr. and Mrs. Williams did in good faith attempt to purchase a 
lot in Lakewood with the intention of building a home valued 
between $30,000 and $40,000.”

“Lakewood”, a large residential subdivision in North Little 
Rock, Arkansas, is being developed by the defendant Matthews 
Company, which holds in trust a number of tracts originally part 
of the vast land holdings of the late Justin Matthews, Sr. De- 
fendant-John Matthews, the son, is chairman of the board of the 
company; defendant-James Matthews, the grandson, is president. 
As was the case with four other Matthews Company subdivi­
sions, none of the 2,000 residential lots in Lakewood were 
occupied by blacks as of the date of the filing of the complaint. 
At the trial, John Matthews testified that the company had ex­
cluded blacks from its subdivisions as an official policy since 
1945, but that this policy had been abandoned in approximately 
1965. He admitted that he had never notified the public of 
this change nor taken any affirmative steps to integrate the Lake- 
wood community.

In March of 1970, Williams initiated his inquiry about pur­
chasing a lot in Lakewood. He and his wife, Dinah, taught in 
the public school system in Little Rock and, at the time of the 
suit, jointly earned approximately $16,000 annually. Beginning



A-5 —

in September 1969, the Williamses began looking for property 
upon which to build a larger home for themselves and their two 
children. They had built their own home in Glenview (a Negro 
subdivision in North Little Rock) valued at $25,000, and, as a 
Korean War veteran, plaintiff had available to him V.A. loans. 
The couple planned to spend between $30,000 and $40,000 on 
a new home.

During this time, they looked at property in the Lakewood 
subdivision where they found a “for sale” sign posted on each 
vacant lot. Each sign gave the price and size of the lot and 
listed the Matthews Company as seller, with its phone number. 
If a lot had been sold, the sign gave the owners name. Ac­
cording to the plaintiffs, these signs remained posted up to and 
after the time their suit was filed on April 29, 1970. Based 
on their visits to Lakewood, the couple decided to inquire fur­
ther about four particular pieces of property.

On March 16, 1970, the Williamses called to make an ap­
pointment at the Matthews Company. The next day, they met 
with Mr. James Matthews, the president of the company, who 
indicated that he could neither accept nor reject their offer to 
purchase a lot, but would have to take the matter up with his 
father, John Matthews, and call them later in the week.

On March 18, 1970, James Matthews called the Williamses 
and for the first time informed them that the company did not 
sell lots to individuals, but only to builders. He informed the 
plaintiff that they might find an approved builder and have him 
purchase a lot, and further advised the couple that it would be 
better for them to purchase an already constructed home. He 
suggested that he might even make his mother’s “villa” available 
for $60,000. The couple restated their intention of building 
their own home. No list of builders was furnished to the Wil­
liamses by James Matthews nor was any further contact initiated 
by him or other members of the Matthews Company.



A-6 —

Shortly after this March 18 conversation with James Mat­
thews, plaintiff attempted to contact several of the builders 
whose names had appeared on signs on other homes in Lake- 
wood. One of the white builders to whom the couple talked indi­
cated that he would go out of business if he built a house in 
Lakewood for blacks, but offered to build in a black residential 
area if they wished. A second white builder also refused to 
build for the Williamses. After these conversations, the couple 
approached a black builder, Joe Anderson, to visit the Matthews 
Company on their behalf.

In mid-April, Joe Anderson met with James Matthews and 
stated his desire to purchase a lot for the Williamses. Matthews 
stated that Anderson would have to be an “approved builder” 
before he could sell a lot to him, but he did not outline any 
procedures for becoming an approved builder. He informed 
Anderson that he could not give him any answer on his request 
until his father, John Matthews, returned from the Orient two 
months later. At the trial, it appeared from defendants’ testi­
mony that the company never had any formal policies or pro­
cedures relating to approved builders. According to James 
Matthews, builders were approved or disapproved by the board 
of directors, but, according to John Matthews, who was chair­
man of the board, he had not made any decisions on approving 
builders for five years and it was his son, James, who made the 
decisions.

On April 24, 1970, Mrs. Williams contacted James Matthews 
for the last time. He informed her that he would not sell them 
a lot and would not give them a decision on letting their builder 
purchase a lot until John Matthews returned to the country in 
June. Five days later, the plaintiffs filed this suit.

In defense of the conduct of the Matthews Company, John 
Matthews introduced into evidence an office memorandum dated 
February 13, 1970, to demonstrate that the personnel of the



A-7

Matthews Company contemplated integration of the all-white 
Lakewood subdivision. This memorandum, while espousing 
the principle of integration as “morally right”, ordered special 
treatment of any black person seeking entry into the subdivision, 
to be handled personally by the senior Matthews, John.3

John Matthews, at trial, testified that the corporation could 
not sell Williams a lot in the subdivision without violating a firm 
policy to sell lots only to approved building contractors. That 
policy had allegedly been adopted in late 1969 as a means of 
insuring an orderly development of the subdivision since ap­
proved contractors would undertake prompt construction on 
those building lots which were made available to them for pur­
chase. As a further reason for justifying the refusal to sell Wil­
liams a lot, John Matthews testified that he believed that Wil­
liams’ attorney, John W. Walker, of Little Rock, would seek 
to invalidate certain subdivision building restrictions relating to 
size and cost of homes.

3 The office memorandum stated:
As discussed, the longer we develop residential communities, 
the more we realize, that more effort on the part of the de­
veloper and tighter controls on development seem the only way 
to achieve pleasant places to live where property values will 
continue to increase over the years.
Cost and square footage restrictions are virtually useless. Plan 
approval seems the best route but if builders or owners do not 
want to improve neighborhoods, then plan approval accom­
plishes little. Thus, we have returned to the regulation that 
lots will be sold only to approved builders or to individuals who 
agree to immediate construction by approved builders.
All the above has already been discussed with you and all 
officials of our Company in great detail.
As to the integration of Lakewood, our Company realizes that 
integration is the law of the land and our Board of Directors 
feels that integration is morally right. Thus, we realize that 
integration of Lakewood is inevitable and we welcome black 
residents, the sooner the better.
On the other hand, we realize that all-white communities, like 
Lakewood, are extremely sensitive and that great care is neces-



—  A-8 —

In denying Williams claim, the district court characterized 
defendants' policy of selling only to builders as free of racial 
considerations and described defendants’ fear—that sale of a 
subdivision lot to Williams would produce a challenge to their 
building restrictions— as sincerely but perhaps mistakenly held. 
Accordingly, the trial court concluded that plaintiff was not de­
nied the right to purchase property because of his race and that 
plaintiff was afforded the same opportunity as others to pur­
chase from an approved builder. The trial court additionally de­
termined that “defendants have here demonstrated that their 
practice of selling to builders has a demonstrated business reason 
for its retention.”

An examination of the statutes and case law require a con­
clusion contrary to that reached by the district court.

II

The policy of the United States contained in Title VIII of the 
Civil Rights Act of 1968 is to provide, within constitutional 
limitations, fair housing throughout the country. 42 U.S.C.

sary if integration is to be accomplished smoothly and without 
unpleasant incident.
We also realize that some black people are becoming more mili­
tant in their frustration and may wish to cause all the excite­
ment, publicity, harassment, etc. possible, which we feel would 
be such poor policy for the Negroes and so disruptive to the 
welfare of this or any other subdivision that, we feel we have 
a most serious obligation to the community of Lakewood to 
make every effort to accomplish integration quietly without 
hurting anyone, black or white, and without lowering Lakewood 
property values.
To accomplish this, our Board of Directors has requested me 
to make a personal case of the first black families who move 
to Lakewood. Our hope is that these black families can 
quietly move into an existing home with the least possible fan­
fare or publicity.
Whenever any black family asks you about purchasing a home 
or vacant lot, your referring them to me will be appreciated.



A-9

§3601. Like the 1866 Civil Rights Act, the Fair Housing Title 
is an exercise of congressional power under the thirteenth 
amendment to eliminate the badges and incidents of slavery. 
United States v. Hunter, 459 F.2d 205, 214 (4th Cir. 1972). 
As the Supreme Court commented in Jones v. Mayer Co., 
392 U.S. 409 (1968), construing 42 U.S.C. §1982: ,

[Wjhen racial discrimination herds men into ghettos and 
makes their ability to buy property turn on the color of 
their skin, then it too is a relic of slavery. [392 U.S. at 
442-443.]

Thus, the Fair Housing Title of the Civil Rights Act of 1968 
and the 1866 Civil Rights Act together comprehensively spell 
out the right of an individual to rent or purchase housing with­
out suffering discrimination and to obtain federal enforcement 
of that fundamental guarantee. 392 U.S. at 413-17.

Recent cases make clear that the statutes prohibit all forms 
of discrimination, sophisticated as well as simple-minded, and 
thus disparity of treatment between whites and blacks, burden­
some application procedures, and tactics of delay, hinderance, 
and special treatment must receive short shrift from the courts. 
See United States v. Pelzer Realty Company, Inc., 484 F.2d 
438 (5th Cir. 1973); United States v. Youritan Construction 
Company, No. C-71 1163 ACW (N.D. Cal., filed Feb. 8, 
1973); Hall v. Freitas, 343 F. Supp. 1099 (N.D. Cal. 1972); 
Newbern v. Lake Lorelei, Inc., 308 F. Supp. 407 (S.D. Ohio
1968) ; Brown v. Lo Duca, 307 F. Supp. 102 (E.D. Wise.
1969) .

Race is an impermissible factor in real estate transactions 
under both 42 U.S.C. § 1982 and 42 U.S.C. § 3604 and “can­
not be brushed aside because it was neither the sole reason 
for discrimination nor the total factor of discrimination." Smith 
v. Sol. D. Adler Realty, 436 F.2d 344, 349-350 (7th Cir.
1970) . The courts will look beyond the form of a transaction



— A-10 —

to its substance and proscribe practices which actually or pre- 
dictively result in racial discrimination, irrespective of defend­
ant’s motivation. See United States v. Grooms, 348 F. Supp. 
1130, 1133-1134 (M.D. Fla. 1972); United States v. Real Es­
tate Development Corporation, 347 F.Supp. 776, 782 (N.D. 
Miss. 1972); United States v. Reddock, No. 6541-71-P (S.D. 
Ala., filed Jan. 1, 1972), aff’d, 467 F.2d 897 (5th Cir. 1972).

We think that the concept of the “prima facie case” ap­
plies to discrimination in housing as much as to discrimination 
in other areas of life. Cf. McDonnell Douglas Corp. v. Green, 
411 U.S. 792, 802 (1973). This is not a new principle, but is 
a familiar one in the areas of employment,6 labor relations,7 
and school8 discrimination. Thus, where a Negro buyer meets 
the objective requirements of a real estate developer so that a 
sale would in all likelihood have been consummated were he 
white and where statistics show that all of a substantial num­
ber of lots in the development have been sold only to whites, 
a prima facie inference of discrimination arises as a matter of 
law if his offer to purchase is refused. If the inference is not 
satisfactorily explained away, the fact of discrimination be­
comes established. See Newbern v. Lake Lorelei, Inc., 308 F. 
Supp. 407, 417 (S.D. Ohio 1968).

Here, the defendants admittedly followed a whites-only 
policy in sales of real estate prior to 1965. John Matthews 
testified to a change of heart and a willingness, finally, to com­
ply with the law and the obligations of good citizenship, but

0 See Parham v. Southwestern Bell Telephone Co., 433 F.2d 421, 
426 (8th Cir. 1970) (citing cases); Marquez v. Omaha District 
Sales Office, Ford Division, 440 F.2d 1157 (8th Cir. 1971). See 
generally Griggs v. Duke Power Co., 401 U.S. 424 (1971).

7 See United States v. Sheet Metal Wkrs. Int. Ass’n, Local U. 36, 
416 F.2d 123, 131 (8th Cir. 1969) (citing cases).

8 See Moore v. Board of Ed. of Chidester Sch. Dist. No. 59, 
Ark., 448 F.2d 709, 711 (8th Cir. 1971) (citing cases).



A -11

this change of heart was demonstrated only by a self-serving 
office memorandum written in 1970 and entitled, perhaps sig­
nificantly, “Ever Tightening Lakewood Controls As It Affects 
Integration.” Those tightened controls were exercised through 
approved builders, none of whom were black and none of 
whom would break the housing segregation barrier by building 
a home for a black family in an all-white neighborhood. The 
Matthews Company made no public announcement of their 
new devotion to integration, and the record shows that no 
black man or woman had ever acquired property in any sub­
division of the Matthews Company up to and including the time 
of trial.

The special handling of the efforts of Mr. and Mrs. Williams 
to purchase a lot in Lakewood, in the light of this factual 
background, became nothing more than a “run-around” when 
John Matthews—the sole person having the authority in the 
company to deal with black persons (although other officers and 
employees might deal with white persons)— left the United 
States for an extended tour in the Orient. This undisputed 
evidence establishes a prima facie case of discrimination.

We do not think that the trial judge reached a contrary de­
termination as to these obvious facts of discrimination.9

9 The trial court’s opinion read in part:
The background statistical case for plaintiff is obviously very- 

strong, but here we are dealing with a particular series of trans­
actions between plaintiff and his wife and the defendants, and 
unless defendants’ conduct in this instance was at least par­
tially occasioned by racial considerations, plaintiff cannot pre­
vail. The Court is troubled by the fact that defendants did not 
earlier, much earlier, communicate their change of policy and 
attitude toward the integration of their subdivisions to the 
public. And yet, the Court is fully convinced that John Mat­
thews did, as he testified, have a sincere and honest change 
of attitude, like so many other Southern white businessmen 
in the early 1960s, and has been honestly convinced since that 
time that integration is not only legally required but morally



—  A-12

Rather, he apparently assumed that subjective good intentions 
could overcome the prima facie showing of discrimination, and 
concluded:

[T]his “personal handling” procedure was not intended, 
or used, as a device to delay integration. In fact the de­
fendants at the time they were first contacted by plain­
tiff wanted to get the integration started as soon as pos­
sible.

That conclusion is error. A prima facie case of discrimina­
tion resting as it does both on statistical evidence and real evi­
dence cannot be overcome by defendant-Matthews’ platitude 
that “integration is the law of the land and our Board of Di­
rectors feels that integration is morally right.” Statistics, of 
course, are not everything, “but nothing is so emphatic as zero.” 
United States v. Hinds County School Board, 417 F.2d 852, 
858 (5th Cir. 1969), cert, denied, 396 U.S. 1032 (1970). 
When a plaintiff makes a prima facie case of discrimination, as 
here, the burden shifts to the defendant to articulate some le­

right. And this change in attitude became at that time the new 
business policy of the defendants.

The Court is concerned that John Matthews decided to make 
the integration of Lakewood, as indicated by the February 13, 
1970, memorandum, a “personal” matter, by, hopefully, di­
recting the first black families into existing homes. This ar­
rangement has implications of special handling that ordinarily 
would be unacceptable. If this effort to “direct” black fam­
ilies into existing facilities resulted even indirectly in the refusal 
to sell vacant lots to blacks, then certainly defendants would be 
denying blacks access to Lakewood on an equal basis with 
whites. But such was not the case. Another obvious point: 
if John Matthews, and the evidence seems to so suggest, does 
not in fact have the time to keep in fairly constant contact with 
the day-to-day business of the firm, his attempt to “personally” 
handle the integration of Lakewood could obviously work to 
delay integration. However, the Court finds that this “personal 
handling” procedure was not intended, or used, as a device 
to delay integration. In fact the defendants at the time they 
were first contacted by the plaintiff wanted to get the integra­
tion of Lakewood started as soon as possible.



— A-13

gitimate, nondiscriminatory reason for the plaintiffs rejection. 
See McDonnell Douglas Corp. v. Green, supra, 411 U.S. at 802.

We need then examine the grounds asserted in the district 
court’s opinion for his conclusion that no unlawful discrimi­
nation existed in this case. The trial court determined that Wil­
liams was in fact offered the opportunity to purchase on terms 
available to all persons. The conclusion, as we understand the 
trial court’s opinion, was premised upon the proposal by 
Matthews to Williams to purchase a lot through an approved 
builder. In this connection the court also ruled that the pro­
cedure of selling to builders only was not adopted because of 
racial considerations nor was it used, or intended to be used, 
as a ruse by which to exclude blacks.

Assuming that the requirements of purchasing only through 
approved builders did not constitute a ruse,10 this procedure 
was fraught with racial overtones and cannot overcome the 
prima facie case of racial discrimination. Here only white 
builders were approved. The Matthews Company had not com­
municated notice of any change of policy regarding its segre­
gation practices to these builders. No white builder had ever 
contracted to build or buy a home for a black person in that 
subdivision. The Williamses had sought and been refused a lot 
through white builders. A black contractor selected by Wil­
liams found himself in limbo, neither accepted, nor rejected 
by the Matthews. The undisputed facts show that under the 
circumstances the alleged procedure of selling lots only to build­
ers carried racial overtones, and such a policy, even though

10 Strong evidence in the record tends to suggest, first, that the 
Matthews Company did not follow a hard and fast rule of selling 
only to builders but in fact advertised and sold individual lots to 
whites, and, second, that this requirement for sale permitted the 
Matthews Company to pretend cooperation with a black buyer while 
in fact giving him the brush-off. It stretches credulity to believe 
that the Matthews Company and its officers did not know that white 
builders would refuse to buy a lot and build a home for a black 
person in the Lakewood subdivision.



— A-14 —

neutral on its face, cannot stand if it in its operation serves to 
discriminate on the basis of race. See Griggs v. Duke Power 
Co., 401 U.S. 424 (1971).

The policy adopted by the Matthews Company to sell lots 
only through approved builders served here to discriminate 
against Williams in obtaining a lot. That policy therefore can­
not stand nor can it excuse the racial discrimination shown in 
this case. See McDonnell Douglas and Griggs, supra.

Finally, the trial court’s suggestion— that any taint of dis­
crimination is avoided in this case because “the practice of 
selling to builders has a demonstrated business reason for its 
retention”— also rests upon a legally unsound basis and must 
be rejected. In order to rely upon a “business necessity” jus­
tification for a business policy which, though fair in form, is 
discriminatory in operation, a defendant must demonstrate the 
absence of any acceptable alternative that will accomplish the 
same business goal with less discrimination. See Wallace v. 
Debron Corporation, No. 73-1729 (8th Cir., filed Mar. 28, 
1974); United States v. St. Louis-San Francisco Railway Co., 
464 F.2d 301, 308 (8th Cir. 1972). Here, of course, a num­
ber of alternatives are available to avoid the racial effect of the 
“builders-only” policy. For example, the Matthews Company 
could sell building lots directly to black persons who indicate 
a willingness to hire an available competent contractor, black 
or white, who will build a home in the subdivision for a black 
person, or Matthews could direct that its approved builders 
make the building lots they buy from Matthews available with­
out discrimination to all persons regardless of race. The appli­
cation of the “business necessity” doctrine offered here, however, 
rests upon pure chimera.11 11

11 The sincere belief on the part of John Matthews, as found by 
the trial court, that applicant Williams would likely seek to upset 
certain covenants and assurances relating to size and costs of con­
struction in the Lakewood development cannot serve as a basis to 
overturn the prima facie case of race discrimination otherwise ap-



A -15

III

It is surely true that, on a showing of discrimination towards 
himself and other members of his race, a plaintiff may appro­
priately file and prosecute a class action on behalf of himself 
and other members of his race under Fed. R. Civ. P. 23(a). 
See Newbern v. Lake Lorelei, Inc., 308 F-Supp. 407, 416 (S.D. 
Ohio 1968) (citing cases). Although we do find some evi­
dence in the case which might have justified a class action, the 
court determined that plaintiff has failed to show that other 
black persons have attempted and been denied the right to 
purchase property in Lakewood or other Matthews Company 
subdivisions. This finding afforded an appropriate basis for the 
dismissal of the class action, since one family is not a class 
and the burden is on the plaintiff to justify permitting the suit 
to proceed as a class action. See Cash v. Swifton Land Corpo­
ration, 434 F.2d 569 (6th Cir. 1970); Crim v. Glover, 338 
F.Supp. 823 (S.D. Ohio 1972).

IV

Accordingly, the plaintiff is entitled under 42 U.S.C. §3612 
(c) to the following relief: (1) a declaratory judgment of his 
rights to purchase property in any subdivision developed by

parent in the record. We think it clear that Matthews’ belief rested 
upon subjective assumption, not upon evidence, for the record is 
bare of any showing that Williams intended to cause trouble to the 
developer. Statements of a black attorney, John Walker of Little 
Rock, Arkansas, attacking the legal validity of these covenants and 
assurances were made prior to the time Williams first expressed any 
interest in purchasing a Lakewood lot. Walker’s “legal opinion” can 
in no way reflect upon the good faith of Williams. Even assuming, 
arguendo, that it would be legitimate to refuse to sell property to 
an individual who planned to challenge a developer’s restrictive cov­
enant or bills of assurance, far more evidence than appears in this 
record would be required to establish Williams as a “troublemaker” 
and thus an ineligible land purchaser in the eyes of a reasonable 
real estate developer.



A-16

the Matthews Company; (2) counsel fees on trial and on ap­
peal, see Knight v. Anciello, 453 F.2d 852 (1st Cir. 1972); 
Lee v. Southern Home Sites Corp., 444 F.2d 143 (5th Cir.
1971); (3) court costs; (4) actual damages for the defend­
ant’s failure to sell Williams a lot during the spring of 1970, 
to include such sum as will properly compensate plaintiff for his 
deprivation of civil rights and for humiliation suffered by him, 
see Seaton v. Sky Realty Company, Inc., 491 F.2d 634 (7th 
Cir. 1974); and (5) punitive damages not to exceed $1,000. 
See generally Smith v. Sol D. Adler Realty Company, 436 F. 
2d 344 (7th Cir. 1971).

We reverse and remand this case for the entry of a judgment 
consistent with this opinion.

Reversed and remanded.

A true copy.

Attest:

Clerk, U.S. Court of Appeals, Eighth Circuit.



A-17

APPENDIX B

IN THE UNITED STATES DISTRICT COURT 
EASTERN DISTRICT OF ARKANSAS 

WESTERN DIVISION

D. C. WILLIAMS, PLAINTIFF,

v. No. LR-70-C-97.

THE MATTHEWS CO., a corporation; JOHN 
P. MATTHEWS, individually and as Presi­
dent and/or Owner of The Matthews Co.; 
and JAMES MATTHEWS, individually and 
as Manager or Agent of The Matthews Co.,

DEFENDANTS.

MEMORANDUM AND ORDER 

(Filed September 20, 1973)

Plaintiff has brought an individual and class action under the 
Civil Rights Act of April 9, 1966, 14 Stat. 27, as amended; 42 
U.S.C. §§ 1981, 1982; 6812 of the Fair Housing Act of April 
11, 1968, 82 Stat. 81, 42 U.S.C. § 3612, and the Thirteenth 
Amendment.

Plaintiff D. C. Williams, a black resident of North Little 
Rock, Arkansas, alleges that he was denied by defendants the 
right to purchase real property because of his race. Plaintiff 
prays for a declaratory judgment, injunctive relief and mone­
tary damages and for a reasonable attorney’s fee. This case 
was tried to the court on July 14, 1972.

Defendant Matthews Company holds in trust a number of 
tracts of land in the Greater Little Rock metropolitan area.



— A-18

John Matthews is Chairman of the Board and, at all pertinent 
times, was the dominant figure in this family business; his son 
James is President; and his son Charles is a Vice President of 
the Matthews Company.

The residentially developed area involved in this suit is known 
as “Lakewood”. It consisted, at the time of suit, of approxi­
mately two thousand single-family house lots and one apart­
ment building. No blacks owned lots in Lakewood as of the 
date of the filing of the complaint herein in 1970. John Mat­
thews testified that there was a policy of exclusion of black 
families from these subdivisions until approximately nine years 
ago when this policy was reconsidered and completely changed.

The Matthews Company is the present result of a “chipping” 
off and division of a part of the holdings of Justin Matthews, 
Sr., by defendant John Matthews and other members of the 
Matthews family. On January 1, 1955, John Matthews re­
ceived approximately one-fourth of his father’s vast land hold­
ings. John Matthews testified at trial that when his father 
began developing subdivisions in this area a major concern 
was to develop large areas and maintain enough control to as­
sure the orderly growth of desirable neighborhoods containing 
structures which complemented each other. Various methods 
were used without much success until the present plan was im­
plemented in 1969.1

On December 29, 1969, shortly after John and James Mat­
thews returned from a meeting of the Urban Land Institute in 
Baltimore, James Matthews addressed the following letter to 
Clyde C. McConnell, a builder with whom Matthews Company 
had frequently dealt:

“This letter is being sent to all of our builder-customers.
“Beginning December 29, 1969 Matthews Company is

1 The various methods included price restrictions, square footage 
requirements, and architectural control.



—  A-19 —

adopting a policy of selling lots only to approved Lake- 
wood builders. The purpose of this is two-fold:

“ 1. In the past we have had some unhappy experiences 
with builders who returned lots after holding them 
for extended periods of time and thus taking an un­
fair advantage of our policy of low down payments.

“2. Our experience with individuals has been they will 
hold lots in an undeveloped stage for an extended 
period thus causing gaps in the orderly development 
of the subdivision.

“Thanking you for past business and hoping this new 
policy meets with your approval.”

John Matthews testified, and the Court finds, that this practice 
of selling lots only to a limited number of builders, and not to 
individuals, is widespread among land developers across the 
country and that Matthews was sold on the idea at the meeting 
of the Urban Land Institute. It is clear from the evidence that 
the decision to adopt this practice was not related to racial con­
siderations. Mr. Matthews stated that, since December 29, 
1969, the Matthews Company has not sold lots to individuals 
and that no signs advertising the company’s lots for sale have 
been posted, although a few older signs remained posted due 
to simple negligence on the part of company employees in fail­
ing to remove all of them. Plaintiff contends that sales to indi­
viduals have been made since December 29, 1969, and intro­
duced a number of warranty deeds executed after December 
29, 1969, running from the Matthews Company to individuals 
who were not “approved” builders. Each deed contains a clause 
which reads: “This deed is executed in fulfillment of a contract 
of sale of the property described herein. . . . ” Defendants 
contend that each “contract” referred to in the deeds was be­
tween Matthews Company and an “approved” builder. The 
facts clearly support the defendants in this regard even though



_  A-20 —

it is easy to understand how the deed records raised plaintiff’s 
suspicions.

Defendants did not maintain a formal list of “approved” 
builders and neither John nor James Matthews could give a 
complete list of those builders who had been approved. No 
black builders have been approved, but there is no evidence 
that any applied prior to this lawsuit. John Matthews testified 
that a builder is approved on the basis of his credit rating, past 
work, and general reputation.

Defendants’ practice is to send to the approved builders a 
list of lots to be offered by the company. A few days later a 
dinner meeting with the builders is held and all lots being offered 
are sold at that dinner meeting. The practice has been a success 
and the defendants have had no trouble in disposing of the lots 
in this manner or in maintaining quality standards for construc­
tion in the subdivision.

The plaintiff and his wife decided at some point in 1969 that 
their present home was too small and that they would investi­
gate the possibility of purchasing a new home. The investiga­
tion led to Lakewood and in March of 1970 the Williamses 
identified several lots in the area in which they were interested. 
Mrs. Williams copied down four lot numbers from signs posted 
on the lots.2

On March 17, 1970, Mr. and Mrs. Williams visited Mr. James 
Matthews at his office. When they informed James Matthews 
of their desire to make an offer on one of the lots previously 
listed, James Matthews indicated that these lots were available 
but that he would have to talk with his father and would contact 
them later in the week. James Matthews called the Williamses

2 The lots listed by Mrs. Williams were: Lot 13, Block 62, 
Bunker Hill Drive; Lot 21, Block 63, Cornwallis Drive; Lot 22, 
Block 63, Cornwallis Drive; and Lot 23, Heritage Park.



—  A-21

on March 18 and advised them that the company had not sold 
to individuals since 1969; that they should get a builder to pur­
chase for them or they could purchase an existing house; and 
that the Matthewses would give them the name of some approved 
builders. Mrs. Williams testified that James Matthews also stated 
that the Williamses could come to Lakewood “without Johnny” 
and suggested that they could even purchase the villa owned by 
James’ mother for $60,000. (The name, “Johnny”, apparently 
refers to the Williamses’ attorney, John W. Walker. The ap­
parent reason for these statements by James Matthews will be­
come clearer as the facts of this case are developed further, 
infra. ) He indicated at the end of the conversation that he would 
contact the Williamses later in the week. The Williamses un­
successfully attempted to contact James Matthews several times 
after the March 18 conversation but did reach him on April 24. 
He again informed them that he could not sell them a lot and 
that he did not know whether, at this point, the plaintiff’s 
builder could buy a lot for them because he had to wait until 
his father, John Matthews, returned in June. James Matthews 
also asked the Williamses if they had a lawyer and received a 
negative response. The Williamses had no further conversations 
with agents of the Matthews Company between April 24, 1970, 
and the date of the filing of this suit on April 29, 1970.

Between the March 18 and April 24 conversations the Wil­
liamses contacted two white builders who declined to purchase 
a lot for them. Their testimony is that one of the builders stated 
he could not build for blacks because he would go out of busi­
ness, and the other builder indicated that if the Williamses pur­
chased the lot themselves he would then build for them. After 
these two contacts with white builders and'before the April 24 
conversation with James Matthews, the Williamses contacted Joe 
Anderson, a black builder, who later attempted without success 
to purchase a lot for them in Lakewood.

It is unclear whether Joe Anderson, the builder the Wil­
liamses had secured, visited James Matthews or any of the de-



A-22 —

fendants before the filing of this lawsuit. James Matthews 
indicated on deposition that Anderson’s “application” was re­
jected because the Matthewses did not believe he initiated con­
tact in good faith but, rather, that his purpose was to instigate 
this litigation. John Matthews testified, however, that Joe 
Anderson had not been rejected, but also that he did not talk 
to Mr. Anderson after this suit was filed on the advice of counsel. 
He also indicated that Joe Anderson probably would meet the 
standards set for approved builders and that he would be de­
lighted to talk to him “after this lawsuit is settled.” He stated 
that he is the only person who can approve or reject Joe Ander­
son because he (John Matthews) is handling all problems inci­
dent to the integration of Lakewood.

From February 7 through March 13, 1970, John Matthews 
and John Walker, attorney for the plaintiff, engaged in a num­
ber of conversations concerning the integration of Lakewood 
and other matters. John Walker at that time also informed John 
Matthews that it was his opinion that the Matthews Company 
“bill of assurance” was not valid and that, in his view, if an 
individual purchased a lot he could leave the lot vacant or put 
up a $5,000 house even though the house on the adjacent lot 
might be worth $150,000. The Court is convinced that Mr. 
John Matthews reasonably believed that Mr. Walker represented 
the plaintiff and believed that his conversations with Mr. John 
Walker were related to the plaintiff’s overtures and that Mr. 
Walker was using what appeared to be threats to destroy Lake- 
wood as a means to convince Mr. Matthews to use his political 
influence with the city officials of North Little Rock in connec­
tion with an entirely unrelated matter.3 On March 25, 1970,

3 The Court is not suggesting that Mr. Walker intended to put any 
improper pressure upon Mr. Matthews. It appears that Mr. Walker 
was attempting to obtain political assistance in furtherance of proj­
ects to aid the black and the poor of North Little Rock. However, 
the juxtaposition of the issues relating to the plaintiff with these 
broader, essentially independent, issues clearly left Mr. Matthews 
with the assumption, even if erroneous, that plaintiff was not sincere



A-23 —

John Matthews reduced to writing his view of, and reaction to, 
these conversations in the following memorandum:

“John Walker visited our office on February 6, 1970 
accompanied by an older black man. Walker talked with 
Eunice Kumpe and asked to see Mr. Matthews.

“Mrs. Kumpe asked which one, and Walker replied, ‘The 
young Mr. Matthews.’

“Mrs. Kumpe, thinking he was speaking of Charles began 
to refer him to Charles’ place of business. Walker then 
informed Mrs. Kumpe he was interested in purchasing a 
lot in Lakewood and would like to talk with one of the 
Matthews in this real estate office. Mrs. Kumpe then in­
formed Mr. Walker that both John and James Matthews 
were out of the office and asked if one of them could call 
him after they returned.

“Mr. Walker left his card and remarked, ‘Will they call?’

“Mrs. Kumpe assured him they would whereupon Mr. 
Walker said, ‘We mean business, etc.’

“I returned Mr. Walker’s telephone call the following 
day as requested and a series of telephone conversations 
have followed. The last one was on Friday, March 13 
from 5:05 to 6:00 P. M.

“The topic of conversation in each of these telephone 
conversations has included my contention that John Walker 
seems not seriously trying to move a black family into 
Lakewood but rather is apparently attempting to harass or

in seeking to build in Lakewood but was simply being used to bring 
pressure upon him to obtain his assistance on the unrelated matter. 
Even if the defendants unreasonably put such interpretation upon 
said events, they would be entitled to prevail. But here, under all 
of the circumstances revealed in the evidence, that interpretation 
cannot be said to have been unreasonable.



A-24 —

frighten us with the prospect of Lakewood integration, his 
sole purpose apparently being to get us to use our influence 
with Mayor Laraan to stall a proposed apartment project 
near the Glenview Subdivision where John Walker’s clients, 
Mr. and Mrs. Donnie Williams live.

“Walker admits he is fighting Mayor Laman and would 
appreciate help from any source in keeping this apart­
ment project from lowering property values in the Glen­
view Subdivision. My position has been that where resi­
dents of detached single family homes often think nearby 
apartments will lower their property values, we do not 
agree with this contention. Otherwise, we would not have 
built Lakewood House and would not now be planning 
garden and townhouse apartments in the Lakewood Sub­
division. We do not think the proposed apartment project 
will lower property values in the black Glenview Subdi­
vision. We find it extremely difficult to believe that At­
torney John Walker sincerely wants to move Mr. and Mrs. 
Donnie Williams into Lakewood via the tactics he is using. 
We feel that Walker is a capable lawyer and if he were 
serious about moving a black family into Lakewood he 
would have already done so without harassment of build­
ers, Realtors, and the Matthews Company.

“We further feel that Walker's effort to force us to sell 
the Williams a vacant lot on low terms is not sincere. The 
reason is that Mr. Walker understands perfectly why we 
do not sell vacant lots to individuals or unapproved build­
ers. (A case in point is the largest builder of homes in 
Indian Hills who wished to buy three Lakewood lots last 
year but was refused.)

“When I explain to John Walker in our long conversa­
tions that I find it difficult to believe he seriously wants to 
integrate Lakewood, Walker occasionally asks if I am 
calling him a liar. As we go through this ordeal again and



A-25

again I get the idea that it is Walker who is calling me a 
liar, when I assure him we have no objection to his inte­
grating Lakewood.

“In our last conversation of March 13, which was after 
hours with our files not available, I explained this fact to 
John Walker and also the fact that my eldest son and wife, 
and daughter had just driven in from Mexico and were 
now having a highball in our apartment waiting for me to 
join them. The fact that I had guests waiting was men­
tioned several times but John Walker insisted that I hang 
on the telephone with him. This seemed proof that John 
Walker’s tactics were merely harassment.

“In mentioning that he wanted his clients to buy a Heri­
tage Park lot at a cost of $10,000 or $11,000, Walker 
advised me that he could accomplish the construction of a 
$5000 house on a Heritage Park lot despite the fact that 
other homes in this area are valued at $75,000 or more. I 
agreed that Walker might be clever enough to accomplish 
this and explained to him that his own argument seemed 
all the proof needed to convince anyone why we could not, 
in good conscience, sell any individual or unapproved 
builder a vacant lot.

“On this same night of the 13th, John Walker called 
Charles Matthews, apparently to harass Charles by telling 
him that I had called him a liar.

“The next morning, Mr. Kaplin, John Walker’s Jewish 
law partner called me to explain why he did not think my 
suggestion of his buying a finished house then selling it to 
the Donnie Williams was practical because he was known 
as a law partner of John Walker.

“I explained to Mr. Kaplin this was not my suggestion 
but John Walker’s. I reminded Mr. Kaplin that I was not 
a lawyer but that he and Mr. Walker had the reputation of 
most capable attorneys.



A-26

“Mr. Kaplin then said that Walker had told him I wanted 
to accomplish nothing but merely wanted to take up John 
Walker’s time in talking.

“I told Mr. Kaplin he must have misunderstood Mr. 
John Walker because Walker had closed our last conversa­
tion with the statement that he would come to our office 
for at least two hours as requested in order to give me an 
opportunity to explain to him our problems in producing 
a highly controlled suburban development where harmony 
and real estate values would be maintained for black and 
white residents, how our experience had proven to us that 
we could not safely sell a vacant lot to anyone unless there 
was a definite agreement that an approved builder would 
build a home in the immediate future which would not 
lower the value of its neighborhood because of substandard 
design or construction.

“Mr. Kaplin said that he would talk with John Walker 
and have John Walker call me. I have heard nothing to 
date.

“In the meanwhile, the black couple, Mr. and Mrs. Wil­
liams, had a long visit with James one afternoon in which 
they said John Walker was not their attorney and made 
other statements which they seemed to refute in a subse­
quent telephone conversation. The Williams were to call 
James back again the following day but he has not heard 
from them since.

“If Walker should call me before I leave town on April 
10, I will make an appointment to meet with him at 3:00 
some afternoon several days hence, then I will call Charles 
so that if Walker actually shows up as he failed to do on 
the one appointment we had previously, Charles would be 
a witness when Walker and I discussed the following ques­
tions:



— A-27 —

“1. Who called who a liar?

“2. Kaplin’s statement that Walker said I merely 
wanted to talk?

“3. The Donnie Williams’ contention that they seri­
ously wanted to integrate Lakewood, only to appar­
ently refute their previous statements when they 
realized we would do nothing to stop them?

“4. John Walker’s feud with Mayor Laman and his 
admitted desire to get people to use their influence to 
stop Laman from allowing the apartment project to 
be built near the black Glenview Subdivision?

“If John Walker does come in or call after I leave town, 
it would seem proper for James and/or Charles to ask 
Walker to postpone his campaign of harassment, or what­
ever it may be, until my return. The reason is that I have 
asked that calls from John Walker and other black at­
torneys be referred to me so that one official only of our 
company be involved in this particular matter.

“John Walker has assumed the initiative in drawing me 
into this affair without explaining his intention. I still do 
not understand just what it is that Walker wishes to ac­
complish.

“If our company is ever to learn why John Walker will 
not let us work with him to accomplish his goal, it would 
seem better for everyone that Walker talk with the same 
company official each time. June will be here soon and I 
will be back in the office.”

John Matthews left for the Orient shortly thereafter and returned 
in June.4

4 Plaintiff’s attorney vigorously questioned Mr. John Matthews’ 
interpretation of those conversations on cross-examination.



A-28 —

John Matthews had, prior to the defendants’ first contact with 
the plaintiff, circulated to Eunice Kumpe, H. B. Stubblefield, 
James Matthews and Charles Matthews the following memo­
randum, dated February 13, 1970, discussing generally the 
integration of Lakewood:

“As discussed, the longer we develop residential com­
munities, the more we realize, that more effort on the part 
of the developer and tighter controls on development seem 
the only way to achieve pleasant places to live where prop­
erty values will continue to increase over the years.

“Cost and square footage restrictions are virtually use­
less. Plan approval seems the best route but if builders or 
owners do not want to improve neighborhoods, then plan 
approval accomplishes little. Thus, we have returned to 
the regulation that lots will be sold only to approved build­
ers or to individuals who agree to immediate construction 
by approved builders.

“All the above has already been discussed with you and 
all officials of our Company in great detail.

“As to the integration of Lakewood, our Company real­
izes that integration is the law of the land and our Board 
of Directors feels that integration is morally right. Thus, 
we realize that integration of Lakewood is inevitable and 
we welcome black residents, the sooner the better.

“On the other hand, we realize that all-white commu­
nities, like Lakewood, are extremely sensitive and that 
great care is necessary if integration is to be accomplished 
smoothly and without unpleasant incident.

“We also realize that some black people are becoming 
more militant in their frustration and may wish to cause 
all the excitement, publicity, harassment, etc. possible, 
which we feel would be such poor policy for the Negroes



A-29 —

and so disruptive to the welfare of this or any other sub­
division that, we feel we have a most serious obligation to 
the community of Lakewood to make every effort to ac­
complish integration quietly without hurting anyone, black 
or white, and without lowering Lakewood property values.

“To accomplish this, our Board of Directors has re­
quested me to make a personal case of the first black 
families who move to Lakewood. Our hope is that these 
black families can quietly move into an existing home with 
the least possible fanfare or publicity.

“Whenever any black family asks you about purchasing 
a home or vacant lot, your referring them to me will be 
appreciated.”

The Court finds that Mr. and Mrs. Williams did in good faith 
attempt to purchase a lot in Lakewood with the intention of 
building a home valued between $30,000 and $40,000. The 
crucial question for the Court, however, is whether the refusal 
by defendants to sell a lot directly to the Williamses was moti­
vated in any part by racial considerations.

The background statistical case for plaintiff is obviously very 
strong, but here we are dealing with a particular series of trans­
actions between plaintiff and his wife and the defendants, and 
unless defendants’ conduct in this instance was at least partially 
occasioned by racial considerations, plaintiff cannot prevail. The 
Court is troubled by the fact that defendants did not earlier, 
much earlier, communicate their change of policy and attitude 
toward the integration of their subdivisions to the public. And 
yet the Court is fully convinced that John Matthews did, as he 
testified, have a sincere and honest change of attitude, like so 
many other Southern white businessmen in the early 1960s, and 
has been honestly convinced since that time that integration is 
not only legally required but morally right. And this change



A-30

in attitude became at that time the new business policy of the 
defendants.

The Court is concerned that John Matthews decided to make 
the integration of Lakewood, as indicated by the February 13, 
1970 memorandum, a “personal” matter, by, hopefully, direct­
ing the first black families into existing homes. This arrange­
ment has implications of special handling that ordinarily would 
be unacceptable. If this effort to “direct” black families into 
existing facilities resulted even indirectly in the refusal to sell 
vacant lots to blacks, then certainly defendants would be deny­
ing blacks access to Lakewood on an equal basis with whites. 
But such was not the case. Another obvious point: if John 
Matthews, and the evidence seems to so suggest, does not in 
fact have the time to keep in fairly constant contact with the 
day-to-day business of the firm, his attempt to “personally” 
handle the integration of Lakewood could obviously work to 
delay integration. However, the Court finds that this “personal 
handling” procedure was not intended, or used, as a device to 
delay integration. In fact the defendants at the time they were 
first contacted by the plaintiff wanted to get the integration of 
Lakewood started as soon as possible.

Were it not for the conflict between John Matthews and plain­
tiff’s attorney, John Walker, the Court would have more diffi­
culty with the case. On the other hand, were it not for this con­
flict, and the misunderstandings engendered, the parties would 
most probably have come to a satisfactory understanding.

The Court is convinced that defendants had a reasonable 
fear of a challenge to their company’s bill of assurance and to 
the legitimate plans for the orderly development of the sub­
division because of the conversations between John Matthews 
and John Walker, and is further convinced that the defendants 
would have just as readily, and in the same manner, responded 
to such a challenge by any white person. That fear—perhaps



A-31 —

founded on erroneous assumptions in this instance— was never­
theless real and reasonable and rendered plaintiff “colorless” 
in the eyes of the defendant.

The Court finds and concludes that plaintiff was not denied 
the right to purchase real property because of his race. Further­
more, it is not clear that the plaintiff was ever actually denied 
the right to purchase for any reason.'1 He was in fact offered 
the opportunity to purchase on terms available to all persons. 
The procedure of selling to builders only was not adopted be­
cause of racial considerations and was not used, or intended to 
be used, as a ruse by which to exclude blacks. There is no evi­
dence of any conspiracy or any collusion between the defend­
ants and their approved builders aimed at excluding, or dis­
criminating against, blacks.

The plaintiff’s individual claim will therefore be dismissed.

The Court must also dismiss the class action allegations in 
this suit. Plaintiff urges the Court to accept a presumption taken 
from the employment area, Griggs v. Duke Power Co., 401 
U.S. 424 (1970), “. . . that where a practice [there testing, here 
the use of sales to builders only] has the natural tendency to 
disproportionately disqualify blacks, otherwise qualified, for 
housing—the practice must fall unless there is a strong, proven, 
demonstrative, business reason for its retention.” The Court is 
impressed with this argument and its application to the class 
action aspects of this case. However, plaintiff has not shown 
that any member of the alleged class except the individual plain­
tiff has attempted to purchase property in Lakewood or other 
subdivisions developed by the Matthews Company. Without

6 If for no other reason the case probably should have been dis­
missed as premature since there was never a refusal to deal with the 
plaintiff; rather alternatives were broached in good faith, and the de­
lays, under the circumstances, were reasonable and could not be con­
sidered tantamount to a denial or a refusal to deal with the plaintiff.



— A-32

such a showing this action cannot proceed as a class action. 
See, Newbern v. Lake Lorelei, Inc., 308 F. Supp. 407 (S.D. 
Ohio, 1968); Crim v. Glover, 338 F. Supp. 823 (S.D. Ohio,
1972). Furthermore, the defendants have here demonstrated that 
their practice of selling to builders has a demonstrated business 
reason for its retention, so the Griggs rationale simply does not 
apply.

It is ordered that the individual and class action claims of 
plaintiff be, and they are hereby, dismissed.

Dated this 20th day of September, 1973.

GARNETT THOMAS EISELE 
United States District Judge