LOCATION: 1220 Student Activities Building - Undergraduate Admissions
DOCKET NO.: 01-1120
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Ninth Circuit
CITATION: 537 US 280 (2003)
ARGUED: Dec 03, 2002
DECIDED: Jan 22, 2003
Douglas G. Benedon - Argued the cause for the petitioner
Malcolm L. Stewart - Department of Justice, argued the cause as amicus curiae, supporting the respondents
Robert G. Schwemm - Argued the cause for the respondents
Facts of the case
The Fair Housing Act (FHA) forbids racial discrimination in respect to the sale or rental of a dwelling. The Holleys, an interracial couple, alleged that a Triad real-estate corporation sales representative prevented them from buying a Triad-listed house for racially discriminatory reasons. The Holleys filed suit against the sales representative and David Meyer, Triad's president, sole shareholder, and licensed "officer/broker," claiming that he was vicariously liable for the sales representative's unlawful actions. The District Court dismissed the claims, stating that the FHA did not impose personal vicarious liability upon a corporate officer or a "designated officer/broker." In reversing, the Court of Appeals ruled that the FHA imposes strict liability principles beyond those traditionally associated with agent/principal or employee/employer relationships.
Does the Fair Housing Act impose personal liability without fault upon an officer or owner of a residential real estate corporation for the unlawful activity of the corporation's employee or agent?
Media for Meyer v. HolleyAudio Transcription for Oral Argument - December 03, 2002 in Meyer v. Holley
Audio Transcription for Opinion Announcement - January 22, 2003 in Meyer v. Holley
William H. Rehnquist:
The opinion of the Court in No. 01-1120, Meyer against Holley will be announced by Justice Breyer.
Stephen G. Breyer:
The Fair Housing Act forbids racial discrimination in respect to the sale of a dwelling.
This case involves discrimination that was allegedly engaged in by a corporation’s employee.
He was a real estate salesman in the real estate company with a corporation, and we are considering a victim here of that discrimination, it is an interracial couple.
In this particular aspect of the case that we are considering, they have sued not the employee nor have they sued the corporation, his employer, but rather they have sued an officer of the corporation and its sole shareholder.
Now the issue raised concerns vicarious liability.
That is the kind of liability that traditionally makes an employer liable without fault for the acts of an employee or it might make a principle liable without fault for the acts of an agent.
In particular question we have to consider is whether in deciding who is liable for what ordinary rules of vicarious liability apply and those ordinary rules would normally make the corporation vicariously liable for the acts of the corporation’s employees and they would not make an owner or a corporate officer vicariously liable except in quite special circumstance.
Now the Ninth Circuit held that ordinary rules do not apply.
Rather the Ninth Circuit said special rules apply, and those special rules in the Circuit’s view make every officer of a corporation and shareholders, personally liable without fault for the misbehavior of any corporate employee as long as the officer or the shareholder “directs or controls” or has the right to direct or control that misbehaving employee.
Now that special principle goes well beyond any ordinary vicarious liability principle and in our view, ordinary rules of vicarious liability apply not the Ninth Circuit special ones.
For one thing, Congress said nothing in the Act about extending vicarious liability in any special way. In fact, it said nothing in the Act about vicarious liability at all, and this court’s case law including cases involving Civil Right Statute makes clear that that kind of silence while permitting an inference that Congress intended to apply ordinary background tort principles cannot show that Congress intended to apply an unusual modification of those rules.
Rather the Court has found that a statute applies unusually strict rules only when Congress has specified that that was its intent.
Or another thing, the Department of Housing and Urban Development, the agency primarily charged with the Acts implementation and administration has long specified that ordinary vicarious liability rules apply in this area, and the court normally refers to administrative agencies reasonable interpretation of the statute.
We have also examined the arguments of the Ninth Circuit advanced in favor of its interpretation, and for reasons set out in the opinion, we find them unconvincing.
Consequently we hold that that Act imposes liability without fault in accordance with traditional agency principle.
The respondents in this case make other claims, including the claim that even under traditional principles, there are exceptions that would make those traditional of principles apply here.
We do not decide these matters.
We say however that the Ninth Circuit remains free to consider them on remand if they were properly raised.
Consequently, the judgment of the Ninth Circuit is vacated and the case is remanded.
Our decision is unanimous.