BEFORE THE IOWA CIVIL RIGHTS COMMISSION

DARRELL HARVEY, Complainant, and IOWA CIVIL RIGHTS COMMISSION,

vs.

SANDY CALDWELL, Respondent.

CONCLUSIONS OF LAW

Jurisdiction:

Procedural and Jurisdictional Objections Waived By Stipulation:

1. A "stipulation" is a "voluntary agreement between opposing counsel concerning disposition of some relevant point so as to obviate [the] need for proof." BLACK'S LAW DICTIONARY 1269 (5th ed. 1979). Stipulations as to fact are binding on a court, commission or other adjudicative body when, as in this case, there is an the absence of proof that the stipulation was the result of fraud, wrongdoing, misrepresentation or was not in accord with the intent of the parties. In Re Clark's Estate, 131 N.W.2d 138, 142 (Iowa 1970); Burnett v. Poage, 239 Iowa 31, 38, 29 N.W.2d 431 (1948). In this case, the parties stipulated that the components necessary to arrive at a contested case hearing have been met in this case. See Finding of Fact No. 1. This stipulation, in effect, disposes of all jurisdictional and procedural objections, such as timeliness, with the exception of any objection to subject matter jurisdiction, which cannot be waived by stipulation. Pruess Elevator v. Iowa Dept. of Natural Resources, 477 N.W.2d 675, 677 (Iowa 1991).

Subject Matter Jurisdiction:

2. Subject matter jurisdiction ordinarily means the authority of a tribunal to hear and determine cases of the general class to which the proceedings in question belong. Tombergs v. City of Eldridge, 433 N.W.2d 731, 733 (Iowa 1988). Darrell Harvey's complaint is within the subject matter jurisdiction of the Commission as the allegations that the Respondent made statements indicating that females were preferred as tenants; refused to renew his lease due to his sex; and allowed female tenants to pay a lower rent due to their sex, fall within the statutory prohibitions against unfair housing practices which the Commission has the power to hear and determine. Iowa Code SS 601A.8, .15 (now SS 216.8, .15) (1989). There can be no doubt that just as "[a]ll races majority or minority are protected from unfair . . . practices under [the Iowa Civil Rights Act]" Iron Workers Local No. 67 v. Hart, 191 N.W.2d 758, 771 (Iowa 1971), so are both sexes, male and female, protected from housing discrimination on the basis of sex by the Act. Iowa Code S 601A.8 (now 216.8); Cf. Ladd v. Iowa West Racing Association, 438 N.W.2d 600-02 (Iowa 1989)(Iowa Civil Rights Act prohibits sex discrimination against men in public accommodations).

3.

It shall be an unfair or discriminatory practice for any owner . . . of rights to housing . . . :

1. To refuse to . . . rent, lease, . . . any . . . housing accommodation . . . to any person because of the . . . sex of such person.

2. To discriminate against any person because of such person's . . . sex . . . in the terms, conditions or privileges of the . . . rental . . . of any . . . housing accommodation. . .

3. To directly . . . advertise, or in any other manner indicate or publicize that the . . . rental, lease, . . . of any . . . housing accommodation . . . by persons of any particular . . . sex . . . is unwelcome, objectionable, not acceptable or solicited.

Iowa Code S 601A.8 (1989)(now Iowa Code S 216.8).

Order and Allocation of Proof in Housing Discrimination Cases Under the Disparate Treatment Theory:

4. The same orders and allocations of proof utilized in disparate treatment employment discrimination cases are also utilized in housing discrimination cases under the disparate treatment theory. R. Schwemm, Housing Discrimination Law and Litigation S 10.1 (1993); Pinchback v. Armistead Homes Corp., 907 F.2d 1447, Fair Hous. Fair Lend. (Looseleaf) S 15638 at p. 16273-74 (4th Cir. 1990). Disparate treatment theory focuses on whether the Complainant has been "intentionally singled out for adverse treatment on the basis of a prohibited criterion." Henson v. City of Dundee, 682 F.2d at 903.

Teamsters v. United States, 431 U.S. 324, 335-36 n.15 (1977).

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

6. "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).

7. Direct evidence that a protected class status, such as sex, is a motivating factor in housing policies and practices concerning tenants would include comments by decisionmakers expressing either a preference for or an aversion to tenants who are members of a particular protected class. See Dorene Polton, XI Iowa Civil Rights Commission Case Reports 152, 161 (1992)(apartment manager expressed hostility toward blacks as tenants and a preference for white tenants). C.f. Buckley v. Hospital Corporation of America, 758 F.2d 1525, 1530 (11th Cir. 1985)(supervisor's statements of surprise at longevity of staff members, of need for "new blood," of intent to recruit younger employees, and comment on plaintiff's "advanced age" causing stress was direct evidence of age discriminatory intent in discharge); Miles v. M.N.C. Corp., 750 F.2d 867, 36 Fair Empl. Prac. Cas. 1289, 1294-96 (11th Cir. 1985)(hiring official's statement that he had no black employees because they "weren't worth a sh--" was direct evidence of discrimination in failure to recall from layoff); Jackson v. Wakula Springs & Lodge, 33 Fair Empl. Prac. Cas. 1301, 1307 (N.D. Fla. 1983)(use of racial slurs by individual responsible for discharge is direct evidence of racial animus in termination); Schlei & Grossman, Employment Discrimination Law: Five Year Cumulative Supplement 477-78 2nd ed. 1989)(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).

8. 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); Pinchback v. Armistead Homes Corp., 907 F.2d 1447, Fair Hous. Fair Lend. (Looseleaf) S 15638 at p. 16274-75 (4th Cir. 1990)(housing discrimination case); R. Schwemm, Housing Discrimination Law and Litigation S 10.2 n.15 (1993).

9. The reason why the McDonnell Douglas order and allocation of proof is not applicable where there is direct evidence of discrimination, and why the Respondent's defenses are then treated as affirmative defenses, i.e. the Respondent 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 [Respondent'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); R. Schwemm, Housing Discrimination Law and Litigation S 10.2 n.16 (1993)(direct evidence rarely available).

10. In this case the direct evidence, of statements by Respondent Caldwell to the effect that she preferred female tenants, that female tenants caused less wear and tear on the apartments than male tenants, that females were better housekeepers than male tenants, and that she would not renew her lease with Harvey due to his sex was sufficiently probative to prove violations of the Act, i.e. "To refuse to . . . rent, lease, . . . any . . . housing accommodation . . . to any person because of the sex of such person," Iowa Code S 601A.8(1) (1989), and "indicating . . . that the . . . rental, lease . . . of any . . . housing accommodation . . . by persons of any particular . . . sex . . . is unwelcome, objectionable, not acceptable or solicited." Iowa Code S 601A.8(3) (1989). See Findings of Fact Nos. 7, 15, 32, 45.

Ruling In the Alternative: Showing of Violation With Respect to Alleged Discriminatory Failure to Renew Lease Under Order and Allocation of Proof Where Complainant Relies on Circumstantial Evidence of Discrimination:

11. The "burden of persuasion" in any proceeding is on the party which has the burden of persuading the finder of fact that the elements of his case have been proven. BLACK'S LAW DICTIONARY 178 (5th ed. 1979). The burden of proof in this proceeding was on the Complainant and the Commission to persuade the finder of fact that the elements of each allegation of discrimination have been proven. Iowa Code S 601A.15(7)(now S 216.15(7); Linn Co-operative Oil Company v. Mary Quigley, 305 N.W.2d 728, 733 (Iowa 1981). Of course, in discrimination cases, as in all civil cases, the burden of persuasion is "measured by the test of preponderance of the evidence," Iowa R. App. Pro. 14(f)(6).

12. The burden of persuasion must be distinguished from what is known as "the burden of production" or the "burden of going forward." The burden of production refers to the obligation of a party to introduce evidence sufficient to avoid a ruling against him or her on an issue. BLACK'S LAW DICTIONARY 178 (5th ed. 1979).

13. In the typical discrimination case, in which the Complainant uses circumstantial evidence to prove disparate treatment on a prohibited basis, the burdens of production, but not of persuasion, shifts. Iowa Civil Rights Commission v. Woodbury County Community Action Agency, 304 N.W.2d 443, 448 (Iowa Ct. App. 1981). These shifting burdens of production "are designed to assure that the [Complainant has] his day in court despite the unavailability of direct evidence." Trans World Airlines v. Thurston, 469 U.S. 111, 121, 105 S. Ct. 613, 83 L. Ed. 2d 523, 533 (1985)(emphasis added).

14. The Complainant has the initial burden of proving a prima facie case of discrimination by a preponderance of the evidence. Trobaugh v. Hy-Vee Food Stores, Inc., 392 N.W.2d 154, 156 (Iowa 1986). This showing is not the equivalent of an ultimate factual finding of discrimination. Furnco Construction Corp. v. Waters, 438 U.S. 579 (1978). Once a prima facie case is established, a presumption of discrimination arises. Trobaugh v. Hy-Vee Food Stores, Inc., 392 N.W.2d 154, 156 (Iowa 1986); Pinchback v. Armistead Homes Corp., 907 F.2d 1447, Fair Hous. Fair Lend. (Looseleaf) § 15638 at p. 16274 (4th Cir. 1990).

15. The burden of production then shifts to the Respondent, i.e. the Respondent is required to produce evidence that shows a legitimate, non-discriminatory reason for its action. Id.; Linn Co-operative Oil Company v. Quigley, 305 N.W.2d 728, 733 (Iowa 1981); Wing v. Iowa Lutheran Hospital, 426 N.W.2d 175, 178 (Iowa Ct. App. 1988). If the Respondent does nothing in the face of the presumption of discrimination which arises from the establishment of a prima facie case, judgment must be entered for Complainant as no issue of fact remains. Hamilton v. First Baptist Elderly Housing Foundation, 436 N.W.2d 336, 338 (Iowa 1989). If Respondent does produce evidence of a legitimate non-discriminatory reason for its actions, the presumption of discrimination drops from the case. Trobaugh v. Hy-Vee Food Stores, Inc., 392 N.W.2d 154, 156 (Iowa 1986).

16. Once the Respondent has produced evidence in support of such reasons, the burden of production then shifts back to the Complainant to show that the reasons given are pretextual. Trobaugh v. Hy-Vee Food Stores, Inc., 392 N.W.2d 154, 157 (Iowa 1986); Wing v. Iowa Lutheran Hospital, 426 N.W.2d 175, 178 (Iowa Ct. App. 1988). Pretext may be shown by "persuading the [finder of fact] that a discriminatory reason more likely motivated the [Respondent] or indirectly by showing that the [Respondent's] proffered explanation is unworthy of credence." Wing v. Iowa Lutheran Hospital, 426 N.W.2d 175, 178 (Iowa Ct. App. 1988) (quoting Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 256, 101 S. Ct. 1089, 1095, 67 L. Ed. 2d 207, 216 & n.10 (1981). The finder of fact may, as has been done here, determine that its "disbelief of the reasons put forward by the defendant may . . . together with the elements of the prima facie case, suffice to show intentional discrimination." St. Mary's Honor Center v. Hicks, ___ U.S. ____, 62 Fair Empl. Prac. Cas. 96, 100 (1993). See Finding of Fact No. 43.

17. This burden of production may be met through the introduction of evidence or by cross-examination. Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 255, 101 S. Ct. 1089, 1095, 67 L. Ed. 2d 207, 216 & n.10 (1981). The Complainant's initial evidence and inferences drawn therefrom may be considered on the issue of pretext. Id. at n.10. This burden of production merges with the Complainant's ultimate burden of persuasion, i.e. the burden of persuading the finder of fact that intentional discrimination occurred. Id. 450 U.S. at 256, 101 S. Ct. at , 67 L. Ed. 2d at 217.

Prima Facie Case of Discrimination:

18. The burden of establishing a prima facie case of discrimination under the disparate treatment theory is not onerous. Texas Dep't. of Community Affairs v. Burdine, 450 U.S. 248, 253 (1981). The Complainant is merely required to produce enough evidence to permit the trier of fact to infer that the Respondent's action was taken for a discriminatory or retaliatory reason. Id. at 254 n.7. A prima facie case may be shown in a variety of ways as there will be different factual circumstances present in each case. Teamsters v. United States, 431 U.S. 324, 358 (1977)(citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 n.13 (1973)).

19. While a prima facie case of sex discrimination may be established through evidence of "differences in treatment," Hy-Vee Food Stores, Inc. v. Iowa Civil Rights Commission, 453 N.W.2d 512, 516 (Iowa 1990)(quoting International Brotherhood of Teamsters v. United States, 431 U.S. 324, 335-36 n.15 (1977), it may also be established through a "showing of treatment so at variance with what would reasonably be anticipated absent discrimination that discrimination is the probable explanation." City of Minneapolis v. Richardson, 239 N.W.2d 197, 202 (Minn. 1976).

20. An example of the latter, a prima facie case of disparate treatment in hiring, is established by proof that: (1) Complainant is member of a protected class, e.g. a male, (2) Complainant applied and was qualified for position for which employer was seeking applicants, (3) Despite qualifications, Complainant is rejected, and (4) Employer continues to seek applicants of Complainant's qualifications. See Schlei & Grossman, Employment Discrimination Law 1298 (1983)(citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973)). Of course, "the [f]acts necessarily will vary in [discrimination] cases and the specification above of the prima facie proof required . . . is not necessarily applicable to every factual situation." McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 n.13 (1973).

21. The presumption of illegal discrimination under this formula arises not because of any showing of different treatment of male and female applicants, but "because it eliminates the most likely legitimate causes for the employer's adverse action--a lack of minimum qualifications and the absence of a job opening. If these are not the causes, it is presumed that the employer's actions, unless otherwise explained, are more likely than not based on discrimination." Schlei & Grossman, Employment Discrimination Law at 1299.

22. A prima facie case of discrimination with respect to the allegation that Complainant Harvey's lease was not renewed due to his sex was established through a variation of the McDonnell Douglas method, which is set forth in Finding of Fact No. 33. See also R. Schwemm, Housing Discrimination Law and Litigation S 10.2 (1993)(looseleaf)(prima facie case established by showing: 1. member of a protected class, 2. applied for and was qualified to rent unit, 3. rejected by defendant, 4. housing opportunity remained available after rejection).

Respondent's Evidence of a Legitimate Non-Discriminatory Reason:

23. In order to rebut the Complainant's prima facie case, the Respondent must introduce admissible evidence which would allow the finder of fact to rationally conclude that the challenged decision was not motivated by discriminatory animus. Linn Co-operative Oil Company v. Quigley, 305 N.W.2d 728, 733 (Iowa 1981). No assessment of whether the evidence produced is credible or persuasive is made at this stage of the circumstantial evidence (McDonnell-Douglas) analysis. See St. Mary's Honor Center v. Hicks, ___ U.S. ____, 62 Fair Empl. Prac. Cas. 96, 100 (1993). Respondent Caldwell met this burden of production by introducing evidence articulating a legitimate non-discriminatory reason for the failure to renew Complainant Harvey's lease, i.e. Harvey's failure to report the window damage. See Findings of Fact Nos. 38-40.