Emma Mary Ellen Holley and David Holley, an interracial
Emma Mary Ellen Holley and David Holley, an interracial
Emma Mary Ellen Holley and David Holley, an interracial couple, tried to purchase a house. Grove Crank, a real estate salesperson, working for Triad, Inc., discriminated against the Holleys and prevented them from buying a home. The Holleys filed two lawsuits. First, the Holleys sued Triad, Inc., and Mr. Crank. Later, the Holleys filed a suit against David Meyer in his capacity as real estate broker, president, and sole owner of Triad, Inc. The Hot-leys argued that Mr. Meyer was vicariously liable for the discrimination of his salesperson. The District Court combined these suits and dismissed all claims since it held the statute of limitations prevented the claims. The Court further held that ME Meyer could not be vicariously responsible for the acts of his salesperson under the Fair Housing Act. The Holleys appealed to the Ninth Circuit Court of Appeals. That court reversed the dismissal Further, the appellate court held that the Fair Housing Act did permit liability to pass through to a person who had
authority to control the salesperson. The court found that Mr. Meyer had such authority, and thus he was vicariously liable. Mr. Meyer petitioned for a writ of certiorari, which was granted by the Supreme Court BREYER, J.: …The Fair Housing Act itself focuses on prohibited acts. In relevant part the Act forbids any per-son or other entity whose business includes engaging in residential real estate—related transactions to discriminate, for example, because of race. It adds that “per-son” includes, for example, individuals, corporations, partnerships, associations, labor unions, and other organizations. It says nothing about vicarious liability. Nonetheless, it is well established that the Act pro-vides for vicarious liability. This Court has noted that an action brought for compensation by a victim of housing discrimination is, in effect, a tort action. And the Court has assumed that, when Congress creates a tort action, it legislates against a legal background of ordinary tort-related vicarious liability rules and consequently intends its legislation to incorporate those rules. It is well established that traditional vicarious liability rules ordinarily make principals or employers vicariously liable for acts of their agents or employees in the scope of their authority or employment. And in the absence of special circumstances it is the corporation, not its owner or officer, who is the principal or employer, and thus subject to vicarious liability for torts committed by its employees or agents…. The Ninth Circuit held that the Fair Housing .Act imposed more extensive vicarious liability— that the Act went well beyond traditional principles. The Court of Appeals held that the Act made corporate owners and officers liable for the unlawful acts of a corporate employee simply on the basis that the owner or officer controlled (or had the right to control) the actions of that employee. We do not agree with the Ninth Circuit that the .Act extended traditional vicarious liability rules in this way. For one thing, Congress said nothing in the statute or in the legislative history about extending vicarious liability in this manner. And Congress' silence, while permitting an inference that Congress intended to apply ordinary background tort principles, cannot show that it intended to apply an unusual modification of those rules…. For another thing, the Department of Housing and Urban Development (HUD), the federal agency primarily charged with the implementation and administration of the statute, has specified that ordinary vicarious liability rules apply in this area. And we ordinarily defer to an administering agency's reason-able interpretation of a statute. A HUD regulation applicable during the relevant time periods for this suit provided that analogous administrative complaints alleging Fair Housing Act violations may be filed against any person who directs or controls, or has the right to direct or control, the conduct of another person with respect to any aspect of the sale … of dwellings … if that other person, acting within the scope of his or her authority as employee or agent of the directing or controlling person … has engaged . in a discriminatory housing practice. … Respondents, conceding that traditional liability rules apply, argue that those principles themselves warrant liability here. For one thing, they say, California law itself creates what amounts, under ordinary common-law principles, to an employer/ employee or principal/agent relationship between (a) a corporate officer designated as the broker under a real estate license issued to the corporation, and lb; a corporate employee/salesperson. Insofar as this argument rests solely upon the corporate broker/officer's right to control the employee/salesperson, the Ninth Circuit considered and accepted it. But %se must reject it given our determination… that the “right to control” is insufficient by itself, under traditional agency principles, to establish a principal/agent or employer/ employee relationship…. The judgment of the Court of Appeals is vacated, and the case is remanded for further proceedings consistent with this opinion. Vacated and remanded.
Case Question
1. What is the relationship of David Meyer to the parties in the various lawsuits filed?
2. On what basis did the District Court and the Ninth Circuit Court of Appeals reach different legal conclusions regarding Meyer's liability for the acts of his salesperson?
3. Did the Supreme Court conclude that vicarious liability could be imposed under the language of the Fair Housing Act?
4. Did the Supreme Court conclude that Meyer could not be held personally liable for his discriminatory actions? Why?
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