By Alison Rice. In a unanimous decision, the U.S. Supreme Court ruled in January that the owner and corporate broker of a real estate company was not personally liable for the discriminatory acts of an employee.
The case, Meyer vs. Holley, involved David and Emma Holley, an interracial couple who tried to buy a new home only to have their deposit rejected as too low. After discovering later that the house they wanted sold for less than their offer and that their agent allegedly made racial comments about them, they sued the owner-broker of the company, David Meyer, charging that he was liable for his employee's actions.
The Supreme Court disagreed. "We agree with the characterization" that the objective of the Fair Housing Act (FHA) is an important social priority, the court said, in an opinion written by Justice Stephen Breyer. "But we do not agree that the characterization carries with it a legal rule that would hold every corporate supervisor personally liable without fault for the unlawful act of every corporate employee whom he or she has the right to supervise."
The ruling, released during the International Builders' Show in January, came as a relief to the NAHB. "It certainly is a positive opinion," says Jon Luther, staff counsel, who says the decision is especially important to multifamily housing, where there are so many types of ownership and investment. A ruling otherwise could have had a "chilling effect" on multifamily investors, who might have been afraid to invest for fear of being sued under the FHA, even if they weren't involved in day-to-day operations.