REVISED June 2, 2000

UNITED STATES COURT OF APPEALS

For the Fifth Circuit

No. 98-31351

LOUISIANA ACORN FAIR HOUSING; GENE LEWIS,

Plaintiffs-Appellees-Cross-Appellants,

VERSUS

DANNY LEBLANC,

Defendant-Appellant-Cross-Appellee.

Appeals from the United States District Court

For the Western District of Louisiana

May 15, 2000

Before KING, Chief Judge, and DUHÉ and DeMOSS, Circuit Judges.

DUHÉ, Circuit Judge:

Danny LeBlanc appeals a jury's award of punitive damages to

Gene Lewis, compensatory damages to Louisiana ACORN Fair Housing,

Inc. (the “Appellees”), and the district court's award of

attorney's fees to Appellee s. The Appellees also appeal the

district court's attorney's fees award. We reverse and vacate the

jury's punitive damage aw ard to Lewis, its compensatory damage

award to ACORN, and the district court's attorney's fees award. We

affirm all other issues.

I. BACKGROUND2

Gene Lewis (“Lewis”), who is black, called Danny LeBlanc

(“LeBlanc”) on January 2, 1996, in response to a newspaper

advertisement regar ding the rental of a one-bedroom apartment in

Lake Charles, La. LeBlanc owns and rents eleven furnished

apartment units. Lewis then went to view the apartment and make

the $100 deposit LeBlanc had requested. A tenant, Betty

Richardson, showed Lewis the apartment. Richardson told Lewis that

s he did not think LeBlanc would rent to him because LeBlan c was

prejudiced.

Lewis then asked to speak to LeBlanc. When LeBlanc arrived,

he allegedly told Lewis that “I just don't rent to you people.”

When Lewis asked what LeBlanc meant by “you people,” LeBlanc stated

“black, color[ed], Negro, whatever you call yourself, I don't rent

to y'all.” LeBlanc contends that he did not rent to Lewis because

Lewis was arguing with Richardson and, therefore, he did not like

Lewis' at titude. Lewis later consulted Louisiana ACORN Fair

H ousing, Inc. (“ACORN”), a private nonprofit fair housi n g

organization, which conducted testing that confirmed Lewis'

allegation that LeBlanc discriminated against prospective tenants

based on race.

Lewis and ACORN sued LeBlanc under the Federa l Fair Housing

Act, 42 U.S.C. § 3601 et

. seq

. (“FHA”), and under the Louisiana

Open Housing Act, La. Rev. Stat. Ann. § 51: 2601 et

. s eq (West

1999). This suit was later consolidated with a suit brought by the

United States against LeBlanc also under the Federal Fair Housing1 The FHA allows a prevailing party to recover reasonable

attorney's fees and costs. The district court held that both Lewis

and ACORN were prevailing parties under the Act because the jury

found that LeBlanc had violate d the FHA even though it did not

award Lewis any actual damages.

3 Act. The two cases were later severed for trial purposes because

the United States was seeking injunctive relief, which it

subsequently won, and Lewis and ACORN were seeking monetary relief.

A jury trial was held and the jury verdict is the centerpiece

of this appeal. The jury first concluded that LeBlanc made

statements to Lewis indicating an intent not to rent apartments to

black people. The jury then found that LeBlanc refused to rent an

a partment to Gene Lewis and that race or color was an effe ctive

reason for that refusal.

The Jury awarded Lewis no compensatory or nominal damages but

awarded him $10,000 in punitive damages. The jury based its

punitive damages award on its finding tha t LeBlanc's refusal to

rent an apartment to Lewis was motivated by ill will, malice, or a

desire to injure Lewis, or a reckless or callous disregard for

Lewis' legal rights. The jury awarded ACORN $1,076 in compensatory

damages but did not award it nominal or punitive damages. The

district court later awarded the Appellees $10,000 in attorney's

fees pursuant to 42 U.S.C. § 3613(c)(2). 1

Although the district court provided detailed instructions

regarding damages to the jury, it did not specify whether a

punitive damages award must be predicated upon a nominal or4

compensatory damages award. The court made clear that if the jury

determined that LeBlanc violated the FHA it may award compensatory

and/or nominal damages. During its deliberations, the jury asked

the court for definitions of compensatory and nominal damages. The

judge then read definitions to the jury from Black's Law

Dictionary. The judge said “[c]ompensatory damages are such as

will compensate the injured party for the injury sustained and

n othing more, such as will simply make good or replace the loss

caused by the wrong or injury , damages awarded to a person as

compensation, indemnity or restitution for harm sustained by him.”

Regarding nominal damages, the judge said, “[n]ominal damages are

a trifling sum awarded to a plaintiff in an action where there is

no substantial loss or injury to be compensated, but still the law

recognizes a technical invasion of his rights or a breach of the

defendant's duty, or in cases where, although, there has been a

real injury, the plaintiff's evidence entirely fails to sho w its

amount.”

II. DISCUSSION

A. Punitive Damages

LeBlanc contends that we should vacate Lewis' punitive damages

award because the jury awarded Lewis neither compensatory nor

nominal damages. Whether a plaintiff suing under the Federal Fair

Housing Act may receive punitive damages absent compensatory or

nominal damages is an issue of first impression in this Circuit.5

We review this legal question de novo.

The text of the Federal Fair Housing Act does not provide us

with an easy answer. Section 3613(c) of the FHA provides that “(1)

In a civil action under sub section (a) of this section, if the

court finds that a discriminatory housing practice has occurred or

is about to occur, the court may aw ard the plaintiff actual and

punitive damages.” The FHA is silent as to whether punitive

damages may be awarded absent actual damages. The text neither

conditions a punitive damage award upon an award of actual damages

nor does it endorse the jury finding in this case.

The FHA's legislative history provides little guidance. The

United States Department of Justice, as Amicus Curiae for

Appellees, relies heavily on Congress's 1988 amendments to the FHA.

In an effort to strengthen enforcement of the FHA, Congress removed

the $1,000 limitation on punitive damage awards that had been part

of the Act since it was passed in 1968. A House Committee stated

that the limitation on damages “served as a major impediment to

imposing an effective deterrent on violators and a disincentive for

private persons to bring suits under existing law.” H.R. Rep. No.

711, 10 0th Cong., 2d Sess. 15 (1988). The United States argues

that imposing a requirement that compensatory damages are a

necessary predicate to an award of punitive damages would frustrate

Congress' purpose made clear in the 1988 amendments lifting the

punitive damage limit. While the United States is correct to note

that punitive damages are a very important component behind6

enforcement of the FHA, the legislative history neither supports

nor discredits a punitive damages award absent actual damages.

Under these circumstances , we must apply the federal common

law to fill this gap in the FHA which Congress has left unanswered.

Courts create federal common law when it is necessary to effectuate

the intent behind a federal statute. Erwin Chemerinsky, F ederal

Jurisdiction

, § 6.3 at 353 (1994). When applying civil rights

statutes, federal common law must be applied to effect uniformity,

“otherwise the Civil Rights Acts would fail to effect the purposes

and ends which Congress intended.” Basista v. Weir , 340 F.2d 74,

86 (3d. Cir 1965). Thus, where a cause of action arises out of a

federal statute, federal, not state, law governs the scope of the

remedy available to plaintiffs. C arpenters Dist. Counc il of New

Orleans & Vicinity v. Dillard Dept. Stores, Inc.

, 15 F.3d 1275,

1288 (5th Cir. 1994).

Based on these federal common law principles, we must assess

both the FHA and other federal civil rights laws to determine

whether a punitive damage award may stand absent a nominal or

compensatory award. As the Fourth Circuit noted, “[t]here is no

establi shed federal common law rule that precludes the award of

punitive damages in the absence of an award of compensatory

damages.” P eople Helpers Found. Inc. v. Richmond

, 12 F.3d 1321,

1326 (4th Cir. 1993). We must determine whether there is a common

law rule allowing such a result. The Fifth Circuit has not

addressed this question as it applies to the FHA and decisions by2 Although the Third Circuit suggests that a constitutional

violation is a necessary predicate for a punitive damages award

absent an actual damages award, the court reversed th e district

court without finding that a constitutional violation had taken

place.

7 other circuits provide a variety of different answers.

The two most recent cases come from the Third and Fourth

Circuits. In A lexander v. Riga

, Nos. 98-3597, 98-3622, 2000 WL

295288 (3d. Cir. Mar. 22, 2000), a jury found that the defendant

violated the FHA when he denied rental housing to the plaintiffs

based on race. However, the jury did not award actual damages.

The district court then declined to submit the issue of punitive

damages to the jury. The Third Circuit reversed this decision

stating: “it bears mentioning that beyond a doubt, punitive damages

can be awarded in a civil r ights case where a jury finds a

constitutional violati on , even when the jury has not awarded

compensatory or nominal damages.” I d

. at *8 (citing Curtis v.

Loether , 415 U.S. 189 (1974); Basista , 340 F.2d at 87) (emphasis

added). The Third Circuit additionally noted that a FHA violation

is all that is needed to establish liability. Id

. 2

The Fourth Circuit dealt with a similar question when a jury

in a FHA case awarded one dollar in puni tive damages but no

compensatory da mages. The Fourth Circuit concluded that “in the

absence of statutory language to the contrary” punitive damages are

not recoverable unless predicated upon an award of actual damages.

People Helpers Found., Inc.

, 12 F.3d at 1327. Nevertheless, we8

respectfully suggest that the Fourth Circuit's basis for this

h olding is flawed. First, the court did not rely on any civil

rights cases in reaching its decision. Id . at 1326-27. A survey

o f cases interpreting federal civil rights laws is essential, in

our view, because of the need to maintain a uniform federal common

law. Second, the Fourth Circuit noted that a majority of the 50

states pro hibit punitive damage awards when there is no

compensatory award. I d

. at 1327. Although state law may be useful

in articulating a policy for our interpretation of federal common

law, it is federal law that must be the centerpiece of our decision

not state law.

Appellees con t end that two other cases support upholding

Lewis' punitive damages award. In F ountila v. Carter

, 571 F.2d 487

(9th Cir. 1978), a jury awarded o ne dollar in actual damages and

$5,000 in punitive damages. The court noted in dicta that “it has

in fact b een noted that a finding of actual damages is not a

condition to the award of punitive damages under the Civil Rights

Act of 1968.” I d

. at 492 (citing Rogers v. Loether

, 467 F.2d 1110,

1112 n. 4 (7th Cir. 1972), aff'd sub nom. Curtis v. Loether , 415

U.S. 189 (1974)). This decision is not entirely on point because

the jury did award a nominal award in addition to punitive damages.

Moreover, the case relies on Rogers v. Loether

. The Appellees

argue that Rogers supports the proposition that the FHA does not

require a finding of actual damages as a condition to the award of

punitive damages. 467 F.2d at 1112 n.4. However, the Seventh9

Circuit i n Rogers never decided this question raising the issue

only in dicta.

In conclusion, the FHA cases do not provide us with a uniform

federal common law. The Third Circuit holds punitive damages may

be appropriate when a constitutional violation exists. The Fourth

Circuit closes the door on punitive damages absent an award of

actual damages but uses questionable authority to reach that

conclusion. The Seventh and Ninth Circuit cases suggest that a

punitive award is permissible absent a ctual damages but did not

confront the question directly as we must.

We must now examine decisions by this and other federal courts

interpreting similar federal civil rights statutes. In a series of

42 U.S.C. § 1983 cases, the Fifth Circuit has articulated a

standard for permitting punitive damages absent an award of actual

damages. R yland v. Shapiro

, 708 F.2d 967, 9 76 (5th Cir. 1983);

Wilson v. Taylor

, 658 F.2d 1021, 1033 (5th Cir. 1981); McCulloch v.

Glasgow , 620 F.2d 47, 51 (5th Cir. 1980). In Ryland , 708 F.2d at

976, we said:

The rule in our circuit is that in the absence of proof of

actual injury, a plaintiff who has been deprived of his

constitutional rights may only collect nominal damages. Mere

proof of the violation of a right will not support an award of

compensatory damages. However, claims of mental and emotional

d istress, if proven, can support an award of compensatory

damages. Moreover, the societal interest in deterring or

punishing violators of constitutional rights supports an award

of punitive damages even in the absence of actual injury.

(Internal citations omitted and emphasis added).

Therefore, our circuit has adhered to the general rule that a10

punitive award may stand in the absence of actual damages where

there has been a constitutional violation, a rule similar to the

Third Circuit FHA rule in Alexander

.

A review of o ther court decisions interpreting Section 1983

reveals a similar link between a finding of a constitutional

violation and upholding a punitive award absent a showing of actual

harm. The Seventh Circuit has long held that a jury may award

punitive damages even absent a compensatory award if the plaintiff

suffered a constitutional violation. E rwin v. Manitowoc

, 872 F.2d

1292, 1299 (7th Cir. 1989); McKinley v. Trattles

, 732 F.2d 1320,

1326 (7th Cir. 1984); L enard v. Argento

, 699 F.2d 874, 889 (7 t h

Cir. 1983); Endicott v. Huddleston , 644 F.2d 1208, 1217 (7th Cir.

1980).

Beyond Section 1983, decisions interpreting other civil rights

acts reach more varied results on the question whether a punitive

award may be upheld absent actual damages. Speaking generally, the

Third Circuit has said that federal law permits the recovery of

punitive damages and as a matter of federal common law it is not

necessary to prove nominal damages. Basista , 340 F.2d at 87.

However, since the Third Circui t's insightful decision in

Basista , federal courts have become more divided on this punitive

damages question. The Seventh Circuit determined that under 42

U.S.C. § 1981(a) a punitive damages award should not be conditioned

on the existence of a compensatory award. Although the Seventh

Circuit relied heavily on its Sec tion 1983 case law, it did not11

indicate that a con stitutional violation was necessary for the

punitive award to stand under 42 U.S.C. § 1981(a) or Title VII.

Timm v. Progressive Steel Treating, Inc.

, 137 F.3d 1008, 1010 (7th

Cir. 1998). S ee also Buckner v. Franco, Inc.

, No. 97-6028, 1 999

U.S. App. LEXIS 7369 *17 (6th Cir. Apr. 12, 1999) (noting in dicta

support for Seventh Circuit's finding in T imm ). However, in

another 42 U.S. C. § 1981 case, the First Circuit held that a

punitive damages award must be vacated absent either a compensatory

damages award or a timely request for nominal damages. K err-Selgas

v. American Airlines, Inc.

, 69 F.3d 1205, 1215 (1st Cir. 1995).

See also Frey v. Alldata Corp.

, 895 F.Supp. 221, 225 n.1 (E.D. Wis.

1995) (noting in dicta that only in cases involving a

constitutional violation would federal courts allow a punitive

damages award without compensator y damages); P aciorek v. Mich.

Consolidated Gas Co.

, 179 F.R.D. 216, 221 (E.D. Mich. 1998) (noting

that under 42 U.S.C. § 1981(a)(b)(1) and Amer ican's with

Disabilities Act nothing conditions the i mposition of punitive

damages upon an award of compensatory or nominal damages).

A lthough the goal of a federal common law of damages is to

produce uniform results, so fa r the federal judiciary has not

succeeded in this endeavor. There are many cases under the FHA and

other civil rights statutes that support eith er upholding or

vacating Lewis' punitive damages award. However, we find most

instr uctive our own circuit's case law limiting punitive damages

awards, absent an actual damages award, to cases were a violation3 Because we conclude that the punitive damages award cannot

stand absent an award of actual damages, we do not decide whether

a punitive damag e award under the FHA must be based on egregious

condu ct or merely predicated on a violation of the statute. S ee

generally Kolstad v. Am. Dental Ass'n.

, - U.S. -, 119 S.Ct . 2118

(1999).

12 of a constitutional right has occurred. LeBlanc did violate Lewis'

rights under the FHA but he did not violate Lewis' constitutional

rights. For that reason, we vacate Lewis' punitive damage award. 3

In the alternative, the Appellees argue that we should remand

the case to the district court for a further determination of the

damages award. First Appellees contend that because the jury found

LeBlanc violated the FHA the district court should have award Lewis

nominal damages for this invasion of his civil rights. Appellees

c ontend that when rights are violated in a civil rights case a

presumption of injury exists, thereby requiring at least nominal

damages. Memphis Community Sch. Dist. v. Stachura , 477 U.S. 299,

308 (1986); Gore v. Turner , 563 F.2d 159, 164 (5th Cir. 1977).

The cases Appellees cite are not applicable to the situation

before us. In M emphis Community Sch. Dist.

, the Supreme Court

noted that nom inal damages may be an appropriate means of

vindicating rights whose deprivation has not cause actual injury.

477 U.S. at 308 n.11. However, the Court made this statement in

reference to a violation of a constitutional right under Section

1983. Likewise, in G ore

, we recognized that nominal damages could

be presumed from the denial of a constitutional right. 563 F.2d at

164. Neither case Appellees cite deal with a factual situation13

similar to this case where the jury dec ided not to award the

plaintiff compensatory or nominal damages. Moreover, we reiterate

this case does not involve the violation of a constitutional right.

Next Appellees contend that the jury may have lumped the

compensatory and nominal damages awards into the punitive sum

because of its misunderstanding of the law. They also argue that

the jury may have been confused about the damage definitions. We

d o not find this argument persuasive. The jury used a two-page

verdict form th at asked them only four questions addressing each

type of damage awa rd separately. The jury also asked the judge

during deliberations for definition s of nominal and compensatory

damages. Moreover, the fact that the jury awarded ACORN

compensatory damages but not punitive damages refutes any argument

that the jury may have been confused by the types of damage awards

or lumped the various awards together.

B. ACORN's Standing

LeBlanc also appeals the jury's compensatory damages award to

ACORN and the court's attorney's fees award to ACORN. ACORN also

appeals its attorney's fees award. Before we reach the merits of

these awards, we must determine s ua sponte whether ACORN has

standing to bring this suit against LeBlanc.

The Supreme Court, in Lujan v. Defenders of Wildlife

, 504 U.S.

555 (1992), stated the mini mum requirements that an organization

must establish to have constitutional standing:

First, the plaintiff must have suffered an injury in fact

- an14

invasion of a legally-protected interest which is (a) concrete

and particularized and (b) actual or imminent, not conjectural

or hypothe tical. Second, there must be a causal connection

between the injury and the conduct complained of

- the injury

has to be fairly traceable to the challenged action of the

defendant, and not the result of the independent action of

some third party not bef ore the court. Third, it must be

likely, as opposed to merely speculative, that the injury will

be redressed in a favorable decision. L ujan

, 555 U.S. at 560-

61 (internal quotes, parentheses and citations omitted).

We must focus on the injury in fact requir ement. Under the

Federal Fair Housing Act, the Supreme Court has held that an

organization has suffered injury in fact if the defendant's actions

impaired the or g anization's ability to provide counseling and

referral services. The Court said, “[s]uch concrete and

demonstrable injury to the organization's activitie s - with the

consequent drain on the organization's resources

- constitutes far

more than simply a setback to the organizati on's abstract social

interests.” H avens Realty Corp., v. Coleman

, 455 U.S. 363, 379

(1982). Although the Court in H avens dealt with standing at the

pleadings stage, the Court noted that the organization will “have

to demonstrate at trial that it has indeed suffered impairment in

its role of facilitating open housing before it will be entitled to

judicial relief.” Id . at 379 n.21.

Based on these two cases, the Fifth Circuit has described what

types of organizational activities do not meet the Supreme Court's

injury in fact requirement. For example, “[t]he mere fact that an

organization redirects some of its resources to litigation and

legal counseling in response to actions or inactions of another15

party is insufficient to impart standing upon the organization.”

Association for Retarded Citizens of Dallas v. Dallas County Mental

Health & Mental Retardation Ctr. Bd. of Trustees

, 19 F.3d 241, 244

(5th Cir. 1994) (Federal Fair Housing Act cas e); see also

Association of Community Orgs. for Reform Now v. Fowler , 178 F.3d

350, 358-59 (5th Cir. 1999).

In contrast, we noted that an organization could have standing

if it had proven a drain on its resources resulting from

counteracting the effects of the defendant's actions. I d

. at 360.

Likewise, the Third Circuit concluded that a housing organization

had standing where its staff “stopped everything else” and devoted

all attention to the litigation in question and diverted resources

to counter the defendant's conduct. Alexander , 2000 WL 295288 at

*14 n.4. We reiterate that the Supreme Court in H avens noted that

an organization must demonstrate at trial that it suffered some

sort of impairment in facilitating open housing before receiving

judicial relief.

We conclude that ACORN did not demonstrate at trial any

impairment in facilitating open housing. At best ACORN proved the

resources it expended defending Lew is (although ACORN never kept

time sheets to record its work for Lewis); but it did not prove a

drain on its resources. ACORN's executive director, Jeffrey

Karlson, testified at length at the t rial. However, Karlson

neither mentioned any specific projects ACORN had to put on hold16

while working on Lewis' case nor did he describe in any detail how

ACOR N had to re-double efforts in the community to combat

discrimination.

One excerpt in particular dem onstrates the conjectural and

hypothetical nature of Karlson's testimony. When asked to describe

how LeBlanc's discrimination frustrated ACORN's mission, Karlson

said:

Again, all I can do is base thi s on the mission of the

organization being frustrated over two and a half years in

trying to resolve this particular complaint to the extent that

this one complaint started to take over an inordinate amount

of our work time and staff time of our normal activities,

really takes away from our activities in other areas, being

able to do outreach and education, research and monitoring,

intakes and investigations of complaints. It takes away from

our normal activities

- and this particular case has. My

es timate is 96 and a half hours of our staff time, over two

and a half years, and that's co nservative. If I kept time

sheets, probably much larger than that, but we did not.

But in terms of frustration of mission, our mission after

we resolved the complaint, we have to make up for all that

lost ground and all that lost time. And I can't sit here and

give you and exact amount for what that is, but we have to go

back out and repair the damage that's been done, because the

discrimination in this case is continuing and ongoing. That's

why we're in court, trying to seek relief to get that to stop

and to stop it from happening in the future. So, to the

extent that we can do that through frustration of mission, we

have to go back and redouble our efforts in the community to

make u p for that lost ground that was taken away from us

during the course o f this particular complaint and to help

heal some of the damage in the community. I don't know if I

can really explain it much more than that. (Tr. at 88-89).

None of ACORN's testimony at trial demonstrates a concrete and

particularized injury as required by Lujan ; instead, as the Supreme

Court cautioned in Lujan

, ACORN's injury based on the testimony at

trial is only conjectural, hypothetical and speculative.17

Therefore, we find that ACORN lacks standing to bring suit and

reverse and vacate the jury's compensatory award to ACORN. In

addition, because ACORN lacks standing, we conclude that ACORN is

not longer a “prevailing party” pursuant to 42 U.S.C. § 3613(c) of

the Federal Fair Housing A ct. We also reverse and vacate the

district court's award of $10,000 in attorney's fees to ACORN.

CONCLUSION

We reverse and vacate th e district court's punitive damages

award to Lewis, and the compensatory damages award and attorney's

fees award to ACORN. In all other respects we affirm.

AFFIRMED IN PART, REVERSED AND VACATED IN PART.18

KING, Chief Judge, concurring in part and dissenting in part:

Judge Duhé has written a careful and thorough opinion, and I

concur in Part IIB of the opinion and its holding regarding ACORN’s

standing. While I agree fully with the description in Part IIA of

the opinion of the legal landscape on the award of punitive

damages, I cannot agree with its conclusion, and I would affirm

Lewis’ punitive damage award. As Judge Easterbrook said in

declining to read a compensatory-punitive link into § 1981a or

Title VII when no such link had been read into § 1983, “[ e]xtrastatutory requirements for recovery should not be invented.” Timm

v. Progressive Steel Treating

, Inc.

, 137 F.3d 1008, 1010 (7th Cir.

1998). I can see no justification for inventing such a requirement

for the FHA.

As the majority ackn owledges, punitive damages are a very

imp ortant part of the FHA’s goal of eradicating discriminatory

practices. “Punitive damages are awarded in the jury’s discretion

‘to punish [the defendant] for his outrageous conduct and to deter

him and others like him from similar conduct in the future.’” Smith

v. Wade

, 461 U.S. 30, 54 (1983) (quoting R ESTATEMENT (S ECOND ) OF T ORTS

§ 908(1) (1977)). The jury in this case clearly believed that the

defendant had engaged in behavior that warranted a punitive award.

Indeed, the behavior exhibited by this defendant has been unlawful

for thirty years and is reminisce nt of the blatant violations19

challenged shortly after the Act became effective. And yet, he

emerges from this case with no financial disincentive to continue

his practices. Nor are other landlords in the community hereby

discouraged from engaging in similar practices.

I s ee no language in the Act dictating the majority’s

conclusion and I find it unfaithful to the FHA’s purposes. I also

see it as providing a basis for similar conclusions in other

contexts, thereby threatening the fulfillment of other civil rights

acts’ goals. For these reasons, I respectfully dissent.