Housing And Civil Enforcement Cases Documents

METROPOLITAN ST. LOUIS EQUAL
HOUSING OPPORTUNITY
COUNCIL, et al.
     Plaintiffs,

v.

Cause No. 4:98CV00837 SNL

GORDON A. GUNDAKER REAL ESTATE
CO., INC.
     Defendant.

______________________________________

1. INTEREST OF THE UNITED STATES

The Fair Housing Act prohibits housing providers and others from making housing unavailable or otherwise discriminating on the basis of race, color, national origin, religion, sex, handicap and familial status. The United States, through litigation by the Attorney General and administrative enforcement by the Department of Housing and Urban Development, has important enforcement responsibilities under the Act, 42 U.S.C. §§ 3610, 3612 and 3614. As part of its enforcement responsibilities, the United States administers a nationwide fair housing testing program and has filed 60 cases alleging violations of the Fair Housing Act based on testing evidence developed through this program. Accordingly, the United States has a substantial interest in ensuring that the question of whether Daubert v. Merrill Dow Pharmaceuticals, 509 U.S. 579 (1993), applies to fair housing testing evidence is appropriately decided.

2. BACKGROUND

Plaintiffs, the Metropolitan St. Louis Equal Housing Opportunity Council (EHOC) and the City of Florissant, filed this lawsuit on May 14, 1998 alleging that Defendant Gordan A. Gundaker Real Estate steered homeseekers on the basis of their race in violation of the Fair Housing Act, 42 U.S.C. § 3601 et. Seq. The Plaintiffs rely on evidence gathered through EHOC's fair housing testing program to show that the Defendant engaged in unlawful discrimination. Defendant filed a Motion to Exclude Evidence and for Summary Judgment, requesting that the Court exclude the EHOC tests pursuant to Federal Rules of Evidence 402 and 403. In their Motion, Defendant argues that flaws in EHOC's testing methodology and their execution of the tests render them unreliable and irrelevant. See Defendant's Motion to Exclude Evidence and for Summary Judgment (hereinafter "Motion to Exclude") at p. 3. Defendant also filed a Motion to Exclude the testimony of Plaintiff's experts under Daubert v. Merrill Dow Pharmaceuticals, 509 U.S. 579 (1993). Although Defendant does not seek to exclude the testing evidence under Daubert, their Daubert Motion challenges the reliability of the testing evidence and seeks to exclude all expert testimony based on the testing evidence. See, e.g. Defendant's Daubert Motion at 9.

In Plaintiffs' Opposition to Defendant's Motion to Exclude and their Memorandum Regarding the Propriety of a Preliminary Hearing, they argue that testing evidence is admissible under Rules 402 and 403 and that ultimately the question of whether the testing evidence is credible is one for the factfinder. See Plaintiffs' Opposition at 30; Plaintiffs' Memorandum Regarding Propriety of Hearing, at 4.

On March 17, 2000, the Court issued an Order setting a hearing on the Defendant's Daubert challenge. The Court summarized the Defendant's arguments as follows: "Defendant challenges the methodology by which [the fair housing] tests were compiled and the lack of supporting data to show that the tests may have some scientific validity." March 17, 2000 Order, at p. 1. The Court noted that the Plaintiffs cited many cases where testing evidence had been admitted, but stated that these cases were almost all pre-Daubert and that "there is little or no law for this Court to follow when there has been a Daubert challenge to the methodology of testing in alleged real estate discrimination cases." March 17, 2000 Order, at p. 2.

The United States files this brief on the question of whether Daubert applies to fair housing testing evidence. The United States argues that testing evidence is fact evidence and therefore, not governed by Fed. R. Evid. 702 or the Supreme Court's Decision in Daubert.

3. ARGUMENT

The Court ordered that the Daubert hearing address the questions of whether the fair housing tests, and the testimony of those persons who have analyzed the tests, should be excluded. In addition, the Court will also hear testimony supporting and opposing the Plaintiffs' motions in limine to exclude the testimony of Defendant's experts. The United States will not address whether Plaintiffs' experts who analyzed the fair housing tests should be excluded pursuant to Daubert or whether the Court should grant Plaintiffs' motion to exclude Defendant's experts. The question of whether testing evidence is admissible fact evidence is separate from the question of whether the parties' experts are qualified to offer their opinion about that fact evidence. The United States will address only the first of these questions, whether Daubert applies to factual testing evidence.

For the reasons set forth below, the Court should decide that as a matter of law Daubert does not apply to fair housing testing evidence. In Section A, we argue that the Supreme Court clearly held that Daubert applies to expert testimony only. In Section B, we argue that testing evidence is fact evidence, not opinion or expert evidence, and therefore Daubert does not apply. In Section C, we argue that EHOC's testing evidence, as opposed to expert testimony analyzing the tests, is fact evidence. As fact evidence, it is admissible unless to do so would violate Fed. R. Evid. 403.

1. Daubert Applies Only to Expert Opinion Evidence Admitted Under Fed. R. Evid. 702

   Rule 702 of the Federal Rules of Evidence governs the admissibility of expert opinions. The rule provides:

   If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise.

   Fed. R. Evid. 702 (emphasis added). The Supreme Court's decision in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), lays out a general framework for applying Rule 702.⁽¹⁾ Daubert, 509 U.S. at 589. In a subsequent case, Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999), the Court addressed whether Daubert applies only to scientific testimony or to all expert testimony.⁽²⁾ In concluding that Daubert applies to all experts the Court stated: "We, like the parties, believe that it applies to all expert testimony." Kumho Tire, 526 U.S. at 147 (emphasis added).

   In Daubert and Kumho Tire, the Court held that the trial judge must make a preliminary determination of whether the expert's testimony will assist the trier of fact to understand or determine a fact in issue. Daubert, 509 U.S. at 591. The Court recognized that "many factors" may bear on the inquiry, but it nevertheless highlighted four factors, relating to verification, publication, normalization, and acceptance within the relevant discipline, that a court may consider in evaluating the reliability of expert scientific testimony. Daubert, 509 U.S. at 591-94. In outlining these factors the Court repeatedly stated that this inquiry was required by Rule 702. See, e.g. 509 U.S. at 594. In setting out the Daubert factors, the Court was interpreting Rule 702 which applies to expert testimony only. Rule 702 does not apply to fact evidence.

   Applying Daubert to fact evidence, such as the testimony of testers who testify about their experiences with rental or sale agents, is inconsistent with the plain language of Rule 702, as well as the rationale underlying Daubert. The gatekeeping function of the court is particularly important in admitting expert testimony because of the expert's ability to give opinion testimony. In Daubert the Court stated:

   Unlike an ordinary witness an expert is permitted wide latitude to offer opinions, including those that are not based on firsthand knowledge or observation. Presumably, this relaxation of the usual requirement of firsthand knowledge . . . is premised on an assumption that the expert's opinion will have a reliable basis in the knowledge and experience of his discipline.

   Daubert, 509 U.S. at 592 (citations omitted). Rule 702 requires the trial court to screen expert testimony to protect the jury from expert opinions which do not meet threshold requirements of relevance and reliability. As discussed in Section B below, testers' testimony is based on their personal experiences and knowledge of what Defendant's agents did or said during the test in which the tester was a participant. Therefore, the gatekeeper concerns which prompt special Daubert scrutiny do not apply. Daubert does not give the trial court authority to exclude fact evidence based on first hand experience and observations that is otherwise admissible under the Rules of Evidence. Fed. R. Evid. 402.

2. Fair Housing Testing Evidence Is Fact Evidence

   Fair housing testing refers to the use of individuals who, without a bona fide intent to rent or purchase a home, apartment, or other dwelling, pose as prospective renters or purchasers for the purpose of gathering information which may indicate whether a housing provider is complying with fair housing laws. Testing is a simulation of a housing transaction for the purpose of comparing the responses given by housing providers to different types of homeseekers in order to determine whether unlawful discrimination is occurring. Since it is not always obvious to actual renters or home purchasers that they have been subjected to a discriminatory housing practice, such as being lied to as to the availability of housing, testing has become an important investigative tool in the enforcement of fair housing laws.

   Fair housing testing evidence can be presented to the factfinder in many forms. Testers may testify about their recollections of their interaction with the agent or owner. Testing evidence can also be presented in the form of tape recordings of the conversation between a tester and an agent or owner, forms completed by the tester setting forth the facts of what happened during the test, and testimony from the testing coordinator explaining how the test was conducted. The testers do not provide expert testimony and do not offer their opinion. They merely provide an account of what occurred on the test and are no different than an eyewitness testifying about what they observed. In this respect testers are no different than an undercover law enforcement agent or informant who poses as a participant in a transaction and provides testimony about their conversation and experience with a defendant. A ruling by the Court that testing evidence is subject to the requirements of Daubert would inappropriately apply a rule for admission of expert testimony to fact evidence. Moreover, such a ruling would have ramifications for law enforcement far beyond the Justice Department's fair housing testing program.

   As described above, testing evidence provides information on how individuals of, for example, different races, are treated by a housing provider or a real estate agent. Typically, if allegations of discrimination are filed against a defendant based on testing evidence, during the trial testers of different races who contacted the sales or rental agent will testify about their experience with the defendant. The testimony may, for example, reveal that different information was given on the availability of housing to testers of different races. The defendants are free to offer evidence at trial of non-discriminatory reasons for any differences there may be in the treatment of different testers. These non-discriminatory reasons may include, for example, that an apartment that one tester was told about, was rented between the visit of the two testers and thus would explain why different information was given to the two testers, or the defendant may offer evidence that the testers were given different information because they made different requests. The factfinder ultimately has the responsibility for determining whether there were differences in treatment, whether there is any explanation of the differences other than race, and whether a defendant's non-discriminatory reasons for the differences are credible.

   The use of fair housing testing evidence has been uniformly accepted by the courts, including the Supreme Court and the Eighth Circuit. See, e.g. Havens Realty Corp. v. Coleman, 455 U.S. 363, 373-74 (1982) (holding that black testers who were given false information about the availability of housing have standing to seek damages for the violation of section 804(d)); Wharton v, Knefel, 562 F.2d 550, 554 (8^th Cir. 1977) (stating the use of testers was commonplace); United States v. Balistrieri, 981 F.2d 916, 924-25, 929-30 (7^th Cir. 1992) (holding that defendant violated the Act by providing false information to testers on the basis of their race).⁽³⁾

   As testing evidence is factual evidence, it can be admitted into evidence independently from any expert testimony. An expert is not required to interpret testing evidence. In Fair Housing Act litigation brought by private individuals, factfinders routinely hear testing evidence without the assistance of any expert testimony analyzing that evidence. See, e.g. Gresham v. Windrush Partners, Ltd., 730 F.2d 1417, 1420-21 (11^th Cir.); Pollitt v. Bramel, 669 F. Supp. 172, 174 (S.D. Ohio 1987); Davis v. Mansards, 597 F. Supp. 334, 338-42 (N.D. Ind. 1984); Hobson v. George Humphreys, Inc., 563 F. Supp. 344, 348-50 (W.D. Tenn 1982).⁽⁴⁾ Likewise, the United States has introduced testing evidence without analysis by an expert. See, e.g., United States v. Balistrieri, 981 F.2d 916, 928-30 (7^th Cir. 1992); United States v. Youritan Construction Co., 370 F. Supp. 643, 647, 656 (N.D. Cal 1973), aff'd as modified, 509 F.2d 623 (9^th Cir. 1975).

   Factfinders are fully capable, without the assistance of an expert, to weight non-racial variations in tests in determining whether these variations adequately explain the difference in treatment accorded the black and white testers. For example in Davis v. Mansards, supra, a case alleging discrimination in the rental of apartments, the court was presented with numerous non-racial differences between the black applicants and their white counterparts. The court stated:

   At trial, the defendants desperately pounced upon every stray fact which might distinguish these black applicants from their white counterparts --perhaps the Davis' home posed a problem, Henley's husband wasn't present, the Johnsons were unsure of when they wished to move, Moore needed a ground floor apartment, Jones visited the wrong rental office. Even if those differences would be material to the ultimate outcome, i.e. whether or not the apartment seeker finally rented at the Mansards, they do not adequately explain the differential treatment apparent prior to the application and during the application pendency.

   Davis, 597 F. Supp. at 345. If the testing evidence is admissible under the standards governing fact evidence, its admissibility is not affected by a party's decision to present or not present expert testimony.⁽⁵⁾ Similarly, a decision by the court to exclude expert testimony does not affect the admissibility of the underlying testing evidence.

3. Fair Housing Testing Evidence Is Admissible If Relevant and Otherwise Admissible Under the Rules of Evidence

   Fair housing testing evidence is admissible if it is relevant and it is otherwise admissible under the Federal Rules of Evidence. The Defendant requests that this Court exclude EHOC's testing evidence pursuant to Rules 402 and 403. The Defendant's Motion to Exclude does not request that the Court exclude the testing evidence under Daubert. The Defendant, however, challenges the methodology of EHOC's testing. The Defendant's challenge to EHOC's methodology can be understood as requesting that the Court apply the Daubert factors to determining the relevance and reliability of EHOC's test. As the Court itself stated: "there is little or no law for this Court to follow when there has been a Daubert challenge to the methodology of testing in alleged real estate discrimination cases." March 17, 2000 Order, at p. 2. Daubert, however, does not change the standards governing the admissibility of fact evidence.

   The United States has not reviewed the testing evidence in this case and takes no position on whether it satisfies the requirements of Rules 402 and 403. However, below we address two of the arguments raised in Defendant's Motion to Exclude to clarify the standard for determining the admissibility of testing evidence.

   First, Defendant challenges the methodology of EHOC's fair housing tests arguing, in part, that the failure of EHOC to "use a test which has been recognized as valid and reliable" renders the test invalid and irrelevant. See Defendant's Motion to Exclude, at p. 3, ¶10(a). Defendants argue EHOC should have used the test methodology utilized by the plaintiffs in Hilltop Community Congress et al. v. Hilltop Realty Inc. et al., 629 F. Supp. 1232 (N.D. Ohio 1983), rev'd in part, 774 F.2d 135, (6^th Cir. 1985) (hereinafter "Hilltop"). See Defendant's Memorandum in Support of Motion to Exclude, at p. 6. The court in Hilltop, sitting as a factfinder, found discrimination, but did not hold that a particular type of testing methodology must always be used. See Hilltop, 629 F. Supp. at 1248. Fair housing testing has multiple uses and can come in multiple forms.⁽⁶⁾ Assuming for the purposes of this argument that plaintiffs did not use the methodology in Hilltop, a failure to use a particular type of testing does not render fair housing tests inadmissible. The Defendant is free to raise this issue, as well as any other issue on cross examination and in rebuttal. The jury would weigh that evidence in determining whether the tests were reliable, and if reliable, whether they showed that the defendant violated the Fair Housing Act.

   This is not to say that testing evidence is always admissible. The court still may exclude evidence pursuant to Rule 403. However, it would be an extreme case where testing evidence was so lacking in probative value that it could be excluded under Rule 403. There is no requirement under Rule 403 that plaintiffs produce data showing that fair housing tests have scientific validity. The only possible rationale for such a requirement would be an application of Daubert to fact evidence. As stated above, Daubert does not apply beyond expert testimony offered under Rule 702. Rules 402 and 403 merely require that the evidence is relevant and that its probative value is not substantially outweighed by the danger of unfair prejudice or misleading the jury.

   Second, Defendant relies extensively on the decision in Hilltop to argue that the EHOC's tests are unreliable. In Hilltop, the court was the finder of fact and, based in part on the testing evidence, it determined that unlawful discrimination occurred. In the instant case, the jury is the finder of fact. After hearing factual evidence of the treatment afforded to black and white testers, the jury will determine whether those differences in treatment were based on race or whether the difference in treatment was based on factors other than race.⁽⁷⁾ See, e.g. United States v. Balistrieri, 981 F.2d 916, 930 (7th Cir. 1992). Fair housing testing of a defendant is relevant to the factfinder's determination of whether the defendant engaged in unlawful discrimination. The district court may only exclude testing evidence in the extreme case were the admission of the evidence would violate Rule 403.

5. CONCLUSION

For the reasons stated above, the Court should not apply Daubert to fair housing testing evidence.

Respectfully Submitted,

Bill Lann Lee
Acting Assistant Attorney General

Joan A. Magagna
Chief

Isabelle M. Thabault
Deputy Chief

Eric I. Halperin
Attorney
Housing and Civil Enforcement Section
Civil Rights Division
Department of Justice
P.O. Box 65998
Washington, D.C. 20035-5998
(202) 353-9706

Audrey G. Fliessig
United States Attorney

1. The specific issue in Daubert was the admissibility of testimony from a physician and epidemiologist, and other experts on risks from exposure to various chemical substances, on the question of whether a particular drug caused birth defects.

2. The issue in Kumho Tire was the admissibility of testimony from an engineer about whether in his opinion a defect in the tire's manufacture or design caused a tire to blow out.

3. As the Court stated in its Order, most of these reported decisions involving testing evidence were pre-Daubert. The admissibility of expert evidence, however, was still subject to challenge under the "general acceptance" standard established by Frye v. United States, 293 F. 1013 (D.C. App. 1923). The United States could find no reported case where the admissibility of testing evidence was challenged under Frye.

4. In reaching the decisions cited above, the courts did not rely on expert testimony and there are no indications that expert testimony was part of the record. Since testing evidence is routinely accepted without expert testimony, these decisions lack an affirmative statement that an expert was not involved.

5. Either party may present the testimony of experts who will provide their opinion to the jury based on an analysis of the testing evidence. These experts, however, must satisfy the requirements of Rule 702 as interpreted by the Supreme Court in Daubert.

6. Testing data, of course, can be used by social scientists, as well as in enforcement actions. In the HUD study cited by Defendants on page 6 of their Memorandum, social scientists used data from fair housing tests to offer conclusions about rates of disparate treatment in certain metropolitan areas and nationwide. While the underlying testing data is factual, the conclusions of the social scientists who manipulate that data to draw conclusions about rates of discrimination across a geographic area would be opinion testimony.

7. The Defendant's argument based on Hilltop goes to the weight and credibility of the testing evidence. These are issues for the jury. The Hilltop analysis, of course, would be relevant if the Court determines summary judgment is appropriate or if after presentation of the evidence one party moves for a judgment under Rule 50. > >