Municipalities Not Exempt From Vicarious Liability: This Week in Scott Mollen's Realty Law Digest
Scott Mollen discusses "Gilead Cmty. Servs. Inc. v. Town of Cromwell," which is "of interest because it analyzes, inter alia, when punitive damages are available, when the amount of punitive damages may exceed the limits of constitutional due process and when a municipality may be subject to punitive damages based on the conduct of its officials."
October 01, 2024 at 10:23 AM
14 minute read
FHA—ADA—Punitive Damages—Town Violated Fair Housing Act and Americans With Disabilities Act—Compensatory and Punitive Damages Awarded—Municipalities Not Exempt From Vicarious Liability Under the FHA—Punitive Damage Award Was Unconstitutionally Excessive—Disparity Between Punitive and Compensatory Damages Was Too High—Civil Fine Amounts Also Show That Punitive Damage Award Violated Due Process—FHA Permits Punitive Damages—No Exception for Municipal Defendants—Town Engaged In a "Campaign of Discriminatory Conduct Meant To Keep a Group Home for Individuals With Mental Health Disabilities From Opening"—Jury Awarded $181,000 In Compensatory Damages and $5 Million In Punitive Damages—Town Liable for Actions of Its Officials—Vicarious Liability—Punitive Damages Ratio Of 27.6 to 1 "Unconstitutionally Excessive"—Maximum Sustainable Punitive Damages Is $2 Million—New Trial On Punitive Damages Unless Plaintiff Agrees To Reduction to $2 Million
This decision involved an appeal by a town from a judgment from a U.S. District Court. A jury verdict found the town liable for violations of the Fair Housing Act (FHA), and Americans with Disabilities Act (ADA) and awarded compensatory and punitive damages.
The town argued that the trial court improperly applied a "motivating-factor" requirement, rather than a "but-for" requirement with respect to the FHA claim and the trial court erred in subjecting "a municipality to vicarious liability and punitive damages under the (FHA)." The town also contended that the amount of punitive damages was "unconstitutionally excessive."
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