Court Opinion

ID: 9396115
Source: CourtListenerOpinion
Date Created: 2023-05-19 16:01:49.685579+00
Date Added: 2024-06-11T17:19:14.194128
License: Public Domain

United States Court of Appeals
                              For the Eighth Circuit
                          ___________________________

                                  No. 22-1444
                          ___________________________

                              United States of America

                                        Plaintiff - Appellee

                                          v.

Louis A. Rupp, II, individually and in his capacity as trustee for the Louis A. Rupp
II Revocable Trust; Pauline Rupp, in her capacity as trustee for the Louis A. Rupp
                                II Revocable Trust

                                      Defendants - Appellants
                                    ____________

                     Appeal from United States District Court
                   for the Eastern District of Missouri - St. Louis
                                   ____________

                            Submitted: January 12, 2023
                               Filed: May 19, 2023
                                  ____________

Before KELLY, ERICKSON, and STRAS, Circuit Judges.
                           ____________

KELLY, Circuit Judge.

      The United States brought an enforcement action under the Fair Housing Act
(FHA) against Louis Rupp, a St. Louis landlord, alleging that Rupp unlawfully
discriminated against renters based on their familial status. The district court granted
summary judgment for the government, determining that Rupp violated the FHA.
The issue of damages, including punitive damages, was then submitted to a jury.
Following a three-day trial, the jury awarded both compensatory and punitive
damages. Rupp filed a post-trial motion to set aside or reduce the punitive damages
award, which the district court denied. 1 Rupp appeals the denial of his motion, and
we affirm.

                                          I.

       Rupp has been a landlord in St. Louis, Missouri, since the 1970s. 2 In 2016,
Laura Erwin and Mack Teal sought to rent an apartment from Rupp to live in with
their six-year-old son (collectively, the Erwin-Teals or the family). Because Erwin
and Teal were not married at the time, Rupp required that they file separate rental
applications. Both application forms stated that no children were permitted to reside
in the apartment. Erwin and Teal told Rupp they had a son who would be living
with them, and Rupp responded that he would allow them to rent on a “trial basis.”
Rupp gave Erwin and Teal a lease that contained a “no children” clause, but he
included a handwritten amendment stating that the “lease contract is being entered
on a trial basis in consideration of the ‘no children’ clause . . . .” Erwin and Teal
signed their lease, which was to expire in one year. Later that year, Erwin became
pregnant with her and Teal’s second child.

       After their lease ended in early 2017, Erwin and Teal continued to rent their
apartment month-to-month. Then, in May 2017, Rupp sent Erwin and Teal a letter
stating he wanted to renew their lease. Erwin and Teal agreed and signed a renewal
contract. Erwin and Teal were relieved to renew the lease, as it gave them “peace
of mind” to know they would have stable housing while caring for a newborn child.

      1
        The Honorable Sarah E. Pitlyk, United States District Judge for the Eastern
District of Missouri.
      2
      “We recite the relevant facts in the light most favorable to the jury’s verdict.”
Quigley v. Winter, 598 F.3d 938, 944 n.2 (8th Cir. 2010).

                                         -2-
       Erwin gave birth on May 25, 2017. It was a difficult birth, and Erwin
underwent an emergency C-section surgery. She spent a few days recovering in the
hospital and was in severe pain for at least a month afterward. She struggled with
basic tasks like getting out of bed and climbing the steps of the apartment. Erwin
planned to take two-and-a-half months off from work to recover and spend time with
her newborn daughter.

       But on June 12, just two weeks after Erwin gave birth, Rupp delivered an
eviction letter to Erwin and Teal. The letter demanded that the family vacate the
apartment no later than July 31, 2017, because the Erwin-Teals had violated the no
children clause in the lease: their son lived in the apartment with them, and Erwin
had “given birth to a girl who is also now living at the apartment.” 3 The letter
concluded, “In light of . . . your total disregard for the terms and conditions of your
lease contract; we . . . [must] terminate your occupancy.” It further warned the
Erwin-Teals that their “failure to comply will result in legal action.”

      Erwin and Teal were distraught. They implored Rupp for “a little more time,
some advance notice” to move out. Teal tried to reason with Rupp that it would be
“inhumane” to put “a couple out in the street with a newborn baby.” Rupp
responded, “This conversation’s not going to happen. You got to go.” Erwin and
Teal were “[c]ompletely blindsided” by the sudden eviction, and it was a
“devastating” and “very physically demanding” task to move out by Rupp’s
deadline, especially while caring for a newborn and with Erwin still recovering from
her surgery. They had trouble finding a suitable apartment by the move-out date, so
they moved into Erwin’s father’s house, which was a challenging living situation for
the Erwin-Teals. Because they needed a second income to pay for rental application
fees and other expenses related to finding a new home, Erwin returned to work just
five weeks after giving birth—over a month sooner than she had intended.

      3
       The letter cited the Erwin-Teals’ failure to pay a small fee as an additional
reason for the eviction, but it emphasized that the two children were the primary
reason for the eviction.

                                         -3-
Ultimately, it took six months for Erwin to fully recover from her surgery, which
she attributed to the fact that she did not have enough time to rest and heal.

      The government filed suit against Rupp on behalf of the Erwin-Teals under
the FHA, 42 U.S.C. §§ 3601 et seq.4 Following discovery, the district court granted
summary judgment for the government, determining that Rupp violated the FHA by
terminating the Erwin-Teals’ lease based on their familial status; imposing different
lease conditions upon the Erwin-Teals based on their familial status; and using
application and lease forms that expressed a preference based on familial status.5 Id.
§ 3604(a), (b), (c). The case then proceeded to a jury trial on the issue of damages.6

      The verdict form asked the jury to consider both compensatory damages and
punitive damages for Erwin, Teal, their son, and their daughter. For compensatory
damages, Erwin was awarded $9,400; Teal was awarded $3,000; and each child was
awarded $1,000. For punitive damages, Erwin and Teal were each awarded $10,000,
and each child was awarded $20,000. Therefore, in total, the jury awarded the family
$14,400 in compensatory damages and $60,000 in punitive damages.

       The district court then denied Rupp’s post-trial motion to set aside or reduce
the punitive damages award, in which he argued (1) that there was not a sufficient
basis to submit punitive damages to the jury, see Fed. R. Civ. P. 50(b), and (2) that

      4
       Erwin initially filed a complaint with the Missouri Commission on Human
Rights, which was transferred to the U.S. Department of Housing and Urban
Development (HUD). After investigating the complaint, HUD issued a “Charge of
Discrimination.” And pursuant to 42 U.S.C. § 3612(a), Rupp elected to have his
charge heard in a federal civil action rather than before an administrative law judge.
      5
        The FHA’s definition of “familial status” includes when a child is “domiciled
with . . . a parent.” 42 U.S.C. § 3602(k)(1).
      6
        Rupp’s wife, Pauline Rupp, was also a defendant in the government’s suit
but is now deceased.

                                         -4-
alternatively, the punitive damages award was excessive, see id. 59(e). Rupp
appeals, and we address each argument in turn.

                                         II.

       Rupp first asserts that there was insufficient evidence to submit the issue of
punitive damages to the jury. We review de novo the sufficiency of the evidence,
viewing the evidence in the light most favorable to the verdict. See Morse v. S.
Union Co., 174 F.3d 917, 922 (8th Cir. 1999); see also Sanders v. Lee Cnty. Sch.
Dist. No. 1, 669 F.3d 888, 894 (8th Cir. 2012).

       Victims of discriminatory housing practices can recover punitive damages
under the FHA. Quigley, 598 F.3d at 952. Punitive damages are warranted “when
the defendant’s conduct is shown to be motivated by evil motive or intent, or when
it involves reckless or callous indifference to the federally protected rights of
others.” Id. at 952–53 (quoting Badami v. Flood, 214 F.3d 994, 997 (8th Cir. 2000)).
“Evil motive” or “reckless indifference” pertains to whether a defendant knows he
“may be acting in violation of federal law,” not his awareness that he is “engaging
in discrimination.” Badami, 214 F.3d at 994 (quoting Kolstad v. Am. Dental Ass’n,
527 U.S. 526, 535 (1999)). To be liable for punitive damages, “it is sufficient that a
defendant discriminate in the face of a perceived risk that his actions will violate
federal law.” Quigley, 598 F.3d at 953 (cleaned up) (citation omitted).

       Upon reviewing the record, we conclude there was sufficient evidence for a
reasonable jury to find that Rupp acted with at least reckless indifference. See
Badami, 214 F.3d at 998. Although Rupp asserted at trial that he was unaware
discrimination based on familial status was unlawful when he evicted the Erwin-
Teals, Rupp had 50 years of experience as a landlord. He testified that he managed
“everything” as to the eight rental properties he owned, that he read the news
“profusely,” and that he researched tenants’ rights issues. He had detailed
knowledge of various laws and regulations governing his obligations as a landlord,
and he was sophisticated enough to navigate eviction proceedings against tenants in

                                         -5-
court without a lawyer. And when Rupp evicted the Erwin-Teals, he was aware that
it was unlawful to discriminate against tenants on the basis of race, religion, and
disability. Notably, the disability basis was added to the FHA in 1988—at the same
time the familial status basis was added to the Act. See Act of Sept. 13, 1988, Pub.
L. No. 100-430, 102 Stat. 1619. A reasonable jury could conclude that if Rupp was
aware of the contemporaneously added disability basis, he must have known about,
or was recklessly indifferent to, the familial status basis as well.

       Despite his extensive experience and knowledge as a landlord, Rupp
proceeded to evict the family shortly after learning Erwin gave birth to a second
child. The evidence was sufficient to support the conclusion that Rupp, at the very
least, acted recklessly and discriminated against the Erwin-Teals “in the face of a
perceived risk” that his actions would “violate federal law.” Quigley, 598 F.3d at
953 (citation omitted). Indeed, the government presented evidence that Rupp
continued to use his unlawful lease forms even after the Erwin-Teals filed their
complaint, which had put Rupp on notice that the FHA prohibits familial-status
discrimination. The district court did not err by submitting punitive damages for the
jury’s consideration.

                                         III.

       Rupp next argues that the punitive damages award is unconstitutionally
excessive, which is an issue we review de novo. Masters v. City of Independence,
998 F.3d 827, 840 (8th Cir. 2021). A jury has “considerable flexibility in
determining the level of punitive damages.” Ondrisek v. Hoffman, 698 F.3d 1020,
1028 (8th Cir. 2012). The purpose of punitive damages is “to further legitimate
interests in ‘punishing unlawful conduct and deterring its repetition.’” Masters, 998
F.3d at 840 (quoting BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 568 (1996)).
However, a punitive damages award that is “grossly excessive” in relation to those
legitimate interests violates the Due Process Clause of the Fourteenth Amendment.
Id. Punitive damages are grossly excessive if they “shock the conscience of this
court or demonstrate passion or prejudice on the part of the trier of fact.” Trickey v.

                                         -6-
Kaman Indus. Techs. Corp., 705 F.3d 788, 802 (8th Cir. 2013) (cleaned up) (quoting
Ondrisek, 698 F.3d at 1028).

       To assess whether a punitive damages award is grossly excessive, we consider
“(1) the degree of reprehensibility of the defendant’s conduct, (2) the ratio between
punitive damages and actual harm (compensatory damages), and (3) the civil or
criminal penalties that could be imposed for comparable misconduct.” Quigley, 598
F.3d at 953 (cleaned up and citation omitted). Having considered each factor, we
conclude that the punitive damages award here is not unconstitutional.

      First, the degree of reprehensibility weighs heavily in favor of affirming the
punitive damages award. See Quigley, 598 F.3d at 954 (explaining that
reprehensibility is “[p]erhaps the most important indicium of the reasonableness of
a punitive damages award” (quoting Gore, 517 U.S. at 575)). In assessing
reprehensibility, we consider whether

      the harm caused was physical as opposed to economic; the tortious
      conduct evinced an indifference to or a reckless disregard of the health
      or safety of others; the target of the conduct had financial vulnerability;
      the conduct involved repeated actions or was an isolated incident; and
      the harm was the result of intentional malice, trickery, or deceit, or mere
      accident.

Id. (quoting State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 419 (2003)).
Looking to these considerations, we agree with the district court that Rupp’s conduct
was reprehensible. Erwin and Teal both testified about the significant emotional
distress, a noneconomic harm, that they endured because of Rupp’s actions. See
Moore v. Am. Fam. Mut. Ins. Co., 576 F.3d 781, 790 (8th Cir. 2009) (concluding
that the type of harm suffered by the plaintiffs, which included emotional distress,
was “not limited to financial losses” and therefore supported the determination that
the defendant’s conduct was reprehensible). And after Erwin received the eviction
notice from Rupp two weeks after giving birth, her recovery from surgery was
hindered, as she was forced to move out of the apartment and return to work.

                                         -7-
Further, the abruptness of the eviction—despite the family’s plea to be given more
time to find new housing—evinced indifference to or reckless disregard of the
Erwin-Teals’ health and safety. There was also evidence that the family was
financially vulnerable—a factor that Rupp has conceded weighs against him.
Moreover, Rupp used the unlawful lease forms barring children from his properties
for decades, and did so again even after the Erwin-Teals’ discrimination complaint
put him on notice that familial-status discrimination is unlawful.

       Second, the ratio between punitive and compensatory damages also suggests
the punitive award is not grossly excessive. Punitive damages “must bear a
reasonable relationship to compensatory damages,” Quigley, 598 F.3d at 954
(cleaned up), but there are “no rigid benchmarks” for assessing the reasonableness
of the award. Campbell, 538 U.S. at 425; see also Masters, 998 F.3d at 841 (“The
Supreme Court has consistently rejected the notion that the constitutional line is
marked by a simple mathematical formula, although it has also suggested that few
awards exceeding a single-digit ratio . . . will satisfy due process.” (cleaned up and
citation omitted)). “A high ratio may be appropriate based on particularly
reprehensible conduct . . . .” Wallace v. DTG Operations, Inc., 563 F.3d 357, 362
(8th Cir. 2009).

       In total, the jury awarded the family $60,000 in punitive damages and $14,400
in compensatory damages—a roughly 4:1 ratio. But Rupp argues that we should
assess the damages in the disaggregate, or in other words, by calculating the ratio of
damages awarded to each individual family member rather than to the family
collectively. In particular, Rupp focuses on the damages awarded to each child:
$20,000 in punitive damages and $1,000 in compensatory damages—a 20:1 ratio.

      We conclude that under our precedent the punitive damages award, whether
assessed in the aggregate or disaggregate, bears a reasonable relationship to the
compensatory damages award in light of the reprehensibility of Rupp’s conduct. See
Wallace, 563 F.3d at 363; see also United States v. Big D Enters., Inc., 184 F.3d
924, 933 (8th Cir. 1999) (“In cases where the other factors [like reprehensibility] are

                                         -8-
strong, a 526 to 1 ratio may be appropriate.”). In addition, because the children were
so young at the time of the eviction, the jury may have found it difficult to ascertain
the monetary value of their noneconomic harm, such as emotional damage. See
Quigley, 598 F.3d at 954 (explaining that high ratios are permissible where “the
monetary value of noneconomic harm might have been difficult to determine”
(quoting Gore, 517 U.S. at 582)).

       Third, the “civil penalties authorized or imposed in comparable cases,”
Campbell, 538 U.S. at 418, suggest that the punitive damages award of $60,000 here
is not grossly excessive. See Big D Enters., 184 F.3d at 933 (pointing to the FHA
provision that allows courts to impose a fine and concluding that “[t]he fact that the
FHA permits courts to impose a fine . . . in addition to compensatory and punitive
damages significantly undercuts appellants’ argument that the punitive damage
award [of $50,000] in this case is excessive”); 42 U.S.C. § 3614(d)(1)(C)(i)
(allowing courts to impose a fine of up to $75,000, as adjusted for inflation by 28
C.F.R. § 85.3(b)(3)(i)).

      In sum, the relevant indicia support the conclusion that the jury’s punitive
damages award is not grossly excessive. The award “comports with due process,
while achieving the statutory and regulatory goals of retribution and deterrence.”
Quigley, 598 F.3d at 956.

                                         IV.

      For the foregoing reasons, we affirm the judgment of the district court.

STRAS, Circuit Judge, concurring.

       The court’s opinion is a faithful application of existing precedent. See, e.g.,
Quigley v. Winter, 598 F.3d 938, 952–56 (8th Cir. 2010). I write only to question,
once again, why we are engaging in this exercise at all. See Adeli v. Silverstar Auto.,
Inc., 960 F.3d 452, 464–65 (8th Cir. 2020) (Stras, J., concurring) (describing the

                                         -9-
reduction of punitive-damages awards as “judicial alchemy” that finds no support in
historical practice); see also Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 39 (1991)
(Scalia, J., concurring in the judgment) (explaining that it is “not the role of the Due
Process Clause” to reduce or eliminate punitive damages). Rescuing Fair Housing
Act “defendants from bad outcomes that arise out of perfectly good procedures”
falls within Congress’s domain, not ours. Adeli, 960 F.3d at 464, 465 n.8 (Stras, J.,
concurring) (explaining why); see 42 U.S.C. § 3613(c)(1) (expressly authorizing the
“award” of “punitive damages” in the first place).
                         ______________________________

                                         -10-