V. THE DIRECT EVIDENCE METHOD OF PROVING DISPARATE TREATMENT:

A. Order and Allocation of Proof Where Complainant Relies on Direct Evidence of Discrimination:

15. "Direct evidence" is that "evidence, which if believed, proves existence of [the] fact in issue without inference or presumption." It is "that means of proof which tends to show the existence of a fact in question, without the intervention of the proof of any other fact, and is distinguished from circumstantial evidence, which is often called "indirect". BLACK'S LAW DICTIONARY 413-14 (1979)(emphasis added). Either policies which on their face call for consideration of a prohibited factor or statements by relevant managers reflecting bias constitute direct evidence of discrimination. Schlei & Grossman, Employment Discrimination Law: Five Year Cumulative Supplement 477-78 (2nd ed. 1989).

16. Examples of direct evidence that a protected class status, such as race or sex, is a motivating factor in an employment decision include comments by decisionmakers expressing a preference for employees who are members of a particular protected class or comments indicating that stereotypes of members of a particular protected class played a role in the challenged decision or practice. See e.g. Price-Waterhouse v. Hopkins, 490 U.S. 228, 109 S. Ct. 1775, 104 L. Ed. 2d 268, 288 (1989)(promotion) ; Barbano v. Madison County, ___ F.2d ___, 54 Fair Empl. Prac. Cas. 1287, 1290, 1292 (2nd Cir. 1990)(hiring); Buckley v. Hospital Corporation of America, 758 F.2d 1525, 1530 (11th Cir. 1985)(discharge); Storey v. City of Sparta Police Department, 667 F. Supp. 1164, 45 Fair Empl. Prac. Cas. 1546, 1551 (M.D. Tenn. 1987)(hiring). By analogy, the same reasoning applies in public accommodations cases. Diane Humburd, 10 Iowa Civil Rights Commission Case Reports 1, 6-7 (1989)(denial of child care services).

17. The proper analytical approach in a case with direct evidence of discrimination is, first, to note the presence of such evidence; second, to make the finding, if the evidence is sufficiently probative, that the challenged practice discriminates against the complainant because of the prohibited basis; third, to consider any affirmative defenses of the respondent; and, fourth, to then conclude whether or not illegal discrimination has occurred. See Trans World Airlines v. Thurston, 469 U.S. 111, 121-22, 124-25, 105 S. Ct. 613, 83 L.Ed. 2d 523, 533, 535 (1985)(Age Discrimination in Employment Act). With the presence of such direct evidence, the analytical framework, involving shifting burdens of production, which was originally set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S. Ct. 1817, 36 L.Ed. 2d 207 (1973), and subsequently adopted by the Iowa Supreme Court, e.g. Iowa State Fairgrounds Security v. Iowa Civil Rights Commission, 322 N.W.2d 293, 296 (Iowa 1982); Consolidated Freightways v. Cedar Rapids Civil Rights Commission, 366 N.W.2d 522, 530 (Iowa 1985), is inapplicable. Landals v. Rolfes Co., 454 N.W.2d 891, 893-94 (Iowa 1990); Price-Waterhouse v. Hopkins, 490 U.S. 228, 109 S. Ct. 1775, 104 L. Ed. 2d 268, 301 (1989)(O'Connor, J. concurring); Trans World Airlines v. Thurston, 469 U.S. 111, 121, 124-25, 105 S. Ct. 613, 83 L.Ed. 2d 523, 533 (1985); Schlei & Grossman, Employment Discrimination Law: Five Year Cumulative Supplement 473, 476 (2nd ed. 1989).

18. The reason why the McDonnell Douglas order and allocation of proof is not applicable where there is direct evidence of discrimination, and why the employer's defenses are then treated as affirmative defenses, i.e. the employer has a burden of persuasion and not just of production, is because:

[T]he entire purpose of the McDonnell Douglas prima facie case is to compensate for the fact that direct evidence of intentional discrimination is hard to come by. That the employer's burden in rebutting such an inferential case of discrimination is only one of production does not mean that the scales should be weighted in the same manner where there is direct evidence of intentional discrimination.

Price-Waterhouse v. Hopkins, 490 U.S. 228, 109 S. Ct. 1775, 104 L. Ed. 2d 268, 301 (1989)(O'Connor, J. concurring). See also Landals v. Rolfes Co., 454 N.W.2d 891, 893-94 (Iowa 1990).

B. Application of the Direct Evidence Method to This Case:

19. In this case, the Commission offered as direct evidence of discrimination the statement of an unidentified male who allegedly told Ms. Arneson, when asked about security requirements, that security was not required, but she could hire someone from in town, and that "the only problem they had was with Blacks." See Finding of Fact No. 59. However, under the evidence in the record, it cannot be established that these comments were made by an individual closely involved in the decisionmaking process with respect to the rental of the hall. . See Findings of Fact Nos. 59-71. It cannot be established that this remark was "uttered by [an individual] closely involved in [the allegedly discriminatory] decisions." Radabaugh v. Zip Feed Mills, 997 F.2d 444, 62 Fair Empl. Prac. 438, 441 (8th Cir. 1993)(quoting Price-Waterhouse v. Hopkins, 490 U.S. at 278 (O'Connor, J. concurring)). Given the failure to identify the man who made this statement, such remarks may constitute "stray remarks" or "statements by nondecisionmakers" which are not sufficiently probative as to constitute direct evidence of discrimination by the Respondent. See id.

20. These comments were not shown to have been made by a person who is an agent of the Respondent. See Finding of Fact No. 66. If this person were an agent of the Respondent acting within his actual or apparent authority, what he said would be binding on the Respondent. Grismore v. Consolidated Products Co., 232 Iowa 328, 5 N.W.2d 646, 651 (1942). The burden of proving that an agency relationship existed between the unidentified male and the Respondent, and that this person acted within the scope of his actual or apparent authority, is on the party wishing to show that such a relationship existed, i.e. the Commission. Id. There is no evidence in the record which proves any of the elements necessary to show that an agency relationship was established between the Respondent and Jesse Taken's son or any unidentified male at the hall to whom Ms. Arneson spoke. See Findings of Fact Nos. 66-67. These elements are: "the manifestation by the principal that the agent shall act for him, the agent's acceptance of the undertaking, and the understanding of the parties that the principal is to be in control of the undertaking." RESTATEMENT (SECOND) OF AGENCY S 1 comment b (1959)(quoted in Stacey D. Davies, XII Iowa Civil Rights Commission Case Reports 142, 151 (1994)). Similarly, apparent authority would have to be proven by acts of the principal which would lead persons dealing with the agent to believe that the agent has such authority. Waukon Auto Supply v. Farmers and Merchants Savings Bank, 440 N.W.2d 844, 847 (Iowa 1989). There is no such evidence of any such acts in the record with regard to these persons. See Findings of Fact Nos. 66-67.

21. Since the statements alleged to constitute direct evidence of discrimination have not been shown to have been made by a person clearly involved in decisionmaking with respect to rental of the hall or by any agent of the Respondent, these statements are not sufficiently probative to constitute direct evidence of discrimination.

22. The Commission has failed to establish a prima facie case of race discrimination in public accommodations under the direct evidence method.

VI. CREDIBILITY AND TESTIMONY

23. In addition to other factors mentioned in the findings of fact on credibility, the Administrative Law Judge and the Commission have been guided by the following principles:

[T]he ultimate determination of the finder of fact "is not dependent on the number of witnesses. The weight of the testimony is the important factor." Wiese v. Hoffman, 249 Iowa 416, 424, 86 N.W.2d 861, 867 (1957). In determining the credibility of a witness and what weight is to be given to testimony, the factfinder may consider the witness' "conduct and demeanor. . . [including] the frankness, or lack thereof, and the general demeanor of witnesses," In Re Moffatt, 279 N.W.2d 15, 17-18 (Iowa 1979); Wiese v. Hoffman, 249 Iowa 416, 424, 86 N.W.2d 861, 867 (1957), as well as "the plausibility of the evidence. The [factfinder] may use its good judgment as to the details of the occurrence . . . and all proper and reasonable deductions to be drawn from the evidence." Wiese v. Hoffman, 249 Iowa 416, 424-25, 86 N.W.2d 861 (1957).

Testimony may be unimpeached by any direct evidence to the contrary and yet be so . . . inconsistent with other circumstances established in the evidence, . . . , as to be subject to rejection by the . . . trier of the facts.

. . .

The [factfinder] . . . might well scrutinize closely such testimony as to its credibility, taking into consideration all the circumstances throwing light thereon, such as the interest of the witnesses, remote or otherwise.

Kaiser v. Strathas, 263 N.W.2d 522, 526 (Iowa 1978)(citations omitted).

24. The factors cited above, such as consistency with the other circumstances in the record, interest, conduct and demeanor have been used in determining credibility in this case. In resolving discrepancies in the testimony, the following principle was also applied. "When the trier of fact . . . finds that any witness has willfully testified falsely to any material matter, it should take that fact into consideration in determining what credit, if any, is to be given to the rest of his testimony." Arthur Elevator Company v. Grove, 236 N.W.2d 383, 388 (Iowa 1975). "[T]he facts disputed in litigation are not random unknowns in isolated equations--they are facets of related human behavior, and the chiseling of one facet helps to mark the borders of the next. Thus, in the determination of litigated facts, the testimony of one who has been found unreliable as to one issue may properly be accorded little weight as to the next." NLRB. v. Pittsburgh Steamship Company, 337 U.S. 656, 659 (1949).

25. "Deference is due to hearing officer [now administrative law judge] decisions concerning issues of credibility of witnesses." Peoples Memorial Hospital v. Iowa Civil Rights Commission, 322 N.W.2d 87, 92 (Iowa 1982)(citing Bangor and Aroostook Railroad Co. v. ICC, 574 F.2d 1096, 1110 (1st Cir.), cert. denied, 439 U.S. 837, 99 S.Ct. 121, 58 L.Ed2d 133 (1978)(deference is due by reviewing court to ALJ findings on credibility even when agency has reached a contrary decision)).

26. Such deference is given because the administrative adjudicator who views the witnesses and observes their demeanor at the hearing is "in a far superior position to determine the question of credibility than is this court." Libe v. Board of Education, 350 N.W.2d 748, 750 (Iowa Ct. App. 1984). "Factual disputes depending heavily on the credibility of witnesses are best resolved by the trial court" Capital Savings & Loan Assn. v. First Financial Savings & Loan Assn., 364 N.W.2d 267, 271 (Iowa Ct. App. 1984)(quoted in Board v. Justman, 476 N.W.2d 335, 338 (Iowa 1991)). See Anderson v. City of Bessemer City, 470 U.S. 564, 575, 37 Fair Empl. Prac. Cas. 396 (1985).