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http://laws.findlaw.com/dc/967105a.html |
Lutz Alexander Prager, Assistant Deputy Corporation
Counsel, argued the cause for appellants/cross-appellees, with
Reischel, Deputy Corporation Counsel, were on the briefs.
John R. Risher Jr., argued the cause for appellee/cross-
appellant, with whom James P. Mercurio was on the briefs.
Before: Wald, Rogers and Tatel, Circuit Judges.
Opinion for the Court filed by Circuit Judge Rogers.
Rogers, Circuit Judge : The District of Columbia and two
of its employees, Hampton Cross and Patricia A. Montgomery
(collectively "the District") appeal a judgment awarding ap-
proximately $2.4 million in compensatory damages, $1,000 in
punitive damages, and $684,624 in attorney's fees and costs to
Samaritan Inns, Inc., for violations of the Fair Housing Act,
42 U.S.C. §§ 3601-3631. The District does not contest the
district court's finding that it violated the Act by issuing an
illegal stop-work order that temporarily prevented Samaritan
Inns from completing renovations to a residential housing
facility for former drug and alcohol abusers, and by initiating
proceedings to revoke the facility's construction permits.
Rather, the District contends that the record does not sup-
port the district court's award of compensatory damages for
"lost" and "delayed" charitable contributions to Samaritan
Inns, approximately $2.3 million, or the award of punitive
damages against Cross and Montgomery. Samaritan Inns
cross-appeals the district court's denial of relief on its claim
that the District violated the Fair Housing Act by failing to
make reasonable accommodations in its zoning laws.
We hold that because Samaritan Inns did not establish with
reasonable certainty that the District's actions caused any
potential contributors to refrain from making donations to its
capital campaign, it is not entitled to recover damages for
"lost" contributions. We further hold that Samaritan Inns
may recover damages for "delayed" capital contributions, but
that the district court's findings as to the duration of the
delay are clearly erroneous. We affirm the award of punitive
damages against Cross and Montgomery. Accordingly, we
reverse the awards of compensatory damages for "lost" and
"delayed" capital contributions, and we remand the case for
reconsideration of the attorney's fees award.
Samaritan Inns is a tax-exempt charitable corporation that
provides below-market rental housing to former drug and
alcohol abusers in the District of Columbia. It operates three
"Inns" that provide short-term transitional housing, and two
"Houses"_Lazarus House and Tabitha's House_that pro-
vide longer-term housing. As a condition of living in either
the Inns or the Houses, all tenants must have completed an
approved substance abuse program, must obtain and maintain
gainful employment, and must refrain from using drugs and
alcohol.
Background to the litigation . Lazarus House opened in
1991. Within two years, it received nearly 800 applications
from men and women who met the criteria for living there.
Because it was unable to meet this demand, Samaritan Inns
decided to open a second House modeled after Lazarus House
and, in 1992, purchased the building now known as Tabitha's
House. In 1993, the District issued the demolition and
building permits necessary to allow Samaritan Inns to reno-
vate Tabitha's House and operate it as a boarding house. 1
Shortly after work on the project began, however, residents
of the surrounding community began to express opposition to
the housing facility. On September 22, 1993, David Erickson,
the president of Samaritan Inns, met with community resi-
dents to discuss the Tabitha's House project. Also attending
the meeting were appellant Cross, then the Acting Director of
the D.C. Department of Consumer and Regulatory Affairs;
Joseph Bottner, the D.C. Zoning Administrator; and the
Honorable Charlene Drew Jarvis, D.C. Council Member for
community residents argued that Tabitha's House could not
be considered a boarding house under the zoning laws be-
cause it would not serve meals, and demanded that Cross
issue an order stopping all work on the project.
Erickson subsequently met with the Zoning Administrator
and community residents in an effort to resolve issues relat-
ing to the Tabitha's House meal plan. Opponents of the
project, including the Ward 4 Council Member, continued to
press for a stop-work order. On October 7, 1993, the Zoning
Administrator issued an order requiring Samaritan Inns to
stop all construction work on Tabitha's House. The order
contained no discernible explanation of why it had been
issued. Although the Zoning Administrator shortly thereaf-
ter recommended to Cross that the order be vacated, Cross
refused to rescind it, claiming that the Mayor had decided to
support the protesters. On October 18, 1993, appellant Mont-
gomery, the Acting Director of the D.C. Building and Land
Regulation Administration in the Department of Consumer
and Regulatory Affairs, sent Erickson a letter purporting to
revoke the building and demolition permits for Tabitha's
House on the ground that Samaritan Inns had misrepresen-
ted to the District that the building would be used as a
boarding house.
The District later acknowledged that the October 18 revo-
cation order was invalid because Samaritan Inns had not
received a hearing. On November 19, 1993, Montgomery
issued a Notice of Intent to Revoke Permit, reiterating the
charge that Samaritan Inns had falsely represented in its
permit applications that it intended to operate the Tabitha's
House property as a "boarding house." The notice also
charged that Lazarus House, the model for Tabitha's House,
was being operated as a "community-based residential facili-
ty," rather than a boarding house. 2 At Cross's direction, a
cate of occupancy was also issued, but not served. Samari-
tan Inns requested an expedited hearing, and on December
28, 1993, an administrative law judge found that the District
had not proven any false statements in the permit applica-
tions for Tabitha's House. The judge also found that there
was no evidence that Lazarus House was being operated as a
community-based residential facility or that Samaritan Inns
intended to provide counseling or residential services at Ta-
bitha's House that would make it a community-based resi-
dential facility under the zoning laws. The judge further
found that even if Samaritan Inns did not intend to provide
meals, Tabitha's House would still qualify as a "rooming
house," rather than a "boarding house." 3 Under the zoning
regulations, both boarding houses and rooming houses are
uses that are permitted as of right in the area where Tabi-
tha's House is located, an R-5 residential zone. D.C. Mun.
Regs. tit. 11, §§ 330.6, 350.4(a) (1995). If Tabitha's House
had been classified as a community-based residential facility,
the number of occupants permitted in the facility would have
been limited, and Samaritan Inns would have been required
to obtain permission from the Board of Zoning Adjustment
("BZA") to operate the facility. 4
During the course of this controversy, the stop-work order
remained in effect. On December 20, 1993, Samaritan Inns
filed the instant lawsuit alleging violations of District of
Columbia law, the Civil Rights Act of 1871, the Fair Housing
On January 12, 1994, the District rescinded the stop-work
order, and on March 15, 1994, the parties entered into a
consent order, pursuant to which the District agreed not to:
revoke or seek to revoke plaintiff's building permits
relating to Tabitha's House, nor issue a stop-work order
pertaining to work being done on Tabitha's House pursu-
ant to those permits, except as may be necessary either
to protect the public from a dangerous physical condition
arising at Tabitha's House or on the basis of information
not of record which would warrant revocation or a stop-
work order under the law....
Despite this agreement, Cross subsequently caused the cita-
tion against Lazarus House to be served on March 21, 1994.
The District canceled that citation on April 6, 1994.
The construction and renovation of Tabitha's House was
completed in June 1994. In July, the Zoning Administrator
issued a certificate of occupancy for its use as a rooming and
boarding house. Opposition from the surrounding community
continued, and residents appealed the issuance of the certifi-
cate of occupancy to the BZA. In September 1996, the BZA
denied the appeal.
After a bench trial in February 1995, the district court
entered judgment for Samaritan Inns on most of its Fair
Housing Act claims. The district court found that the ten-
ants of Tabitha's House and Lazarus House were persons
with a "handicap" under § 802(h) of the Act, 42 U.S.C.
§ 3602(h), 5 and that the District's actions were motivated by
discriminatory intent, had a discriminatory effect, and"coerced or intimidated" Samaritan Inns from continuing its
efforts to complete and open Tabitha's House, in violation of
§§ 804 and 818 of the Act, 42 U.S.C. §§ 3604, 3617. 6 The
district court found, however, that Samaritan Inns had failed
to present persuasive evidence that the District had violated
the "reasonable accommodations" provision of the Fair Hous-
ing Act. 7 In light of its disposition, the court declined to
address Samaritan's Due Process claim. The court also
concluded that neither Cross nor Montgomery was entitled to
qualified immunity. The court awarded Samaritan Inns
$2,404,903 in compensatory damages, and assessed punitivedamages of $500 each against Cross and Montgomery. It
also awarded Samaritan Inns attorney's fees and costs of
$684,624.83, and ordered the District to cease and desist its
discriminatory practices.
B.
The damages award. More than $2.3 million of the com-
pensatory damages award was intended to compensate Sa-
maritan Inns for harm to a planned capital fundraising cam-
paign, the "Next Steps Initiative." When the Tabitha's
House controversy began, Samaritan Inns was planning to
solicit $8 million in donations to finance the cost of construct-
ing five new Inns providing short-term housing, two new
Houses similar to Lazarus House and Tabitha's House, and a
support center, and to create a $2 million endowment fund to
help support the operating costs of the residences. Once the
controversy began, however, Samaritan Inns decided not to
commence this campaign in 1994, as originally planned. The
district court found that "the devastating impact of the [Dis-
trict's] actions, commencing with the issuance of the stop-
work order on October 7, 1993," effectively prevented Samari-
tan Inns from achieving its fundraising goals because it
"chilled the interest in potential donors and previously active
Samaritan Inns board members in donating to and working
with [Samaritan Inns] until the cloud of controversy and
delay lifted."
The evidence to support the district court's conclusion came
primarily from Erickson and John Derrick, the president of
Potomac Electric Power Company ("PEPCO"), who was
chairman of the Tabitha's House fundraising board. Erick-
son testified that once the stop-work order was issued, the
conflict concerning Tabitha's House became "almost the sole
focus" of his meetings with the fundraising board, and the
board members began to evidence a lack of interest in
continuing to work with Samaritan Inns. Derrick testified
that the stop-work order "basically just knocked the pins
right out from underneath of us." In Derrick's view, the
Member, raised serious doubts as to whether Samaritan Inns
would be able to continue to operate in the District of
Columbia, and made it impossible to go forward with the
Next Steps Initiative. In the wake of the stop-work order,
the board was unable to raise approximately $196,000 needed
to complete the Tabitha's House campaign. 8 However, Erick-
son and his staff were nonetheless able to raise most of the
funds necessary to close this shortfall.
To calculate the dollar impact of the District's actions on
the Next Steps Initiative, Erickson assumed that some por-
tion of the potential contributions that he would have solicited
had been irretrievably "lost" and that the remainder had
merely been "delayed." He calculated the total amount lost
during 1994 and 1995 at $1,958,501. The district court ac-
cepted these figures, and found them to be consistent with
the analysis of Samaritan Inns' economic expert, Dr. Richard
Edelman. Edelman used the past pattern of contributions to
Tabitha's House and three indexes of business and economic
activity to estimate the amount that Samaritan could have
expected to receive from October 1993 to October 1994. He
then calculated the amount of "lost" contributions as the
difference between this expected level of contributions and
the amount of contributions that Tabitha's House actually
received during the same period. Using this methodology,
Edelman estimated the total loss as between $2.05 million and
$2.88 million.
Edelman further calculated that a delay of two years would
reduce the value to Samaritan Inns of the funds Erickson had
classified as "delayed" by $385,723. Edelman also calculated
the loss in value of the funds that Erickson testified he had
expected to receive for the completion of the Tabitha's House
campaign from November 1993 to January 1994, concluding
Samaritan Inns by $3,442.
The remaining testimony on the issue of damages to Sa-
maritan Inns' fundraising prospects came from Dr. James
Gelatt, a fundraising expert retained by the District. Gelatt
and two other experts, one of whom was retained by Samari-
tan Inns and the other by the District, formed a panel that
interviewed twenty-one past or potential donors to Samaritan
Inns, selecting the interviewees from a list that Samaritan
Inns had provided. The expert panel concluded that Samari-
tan Inns "continues to enjoy a positive reputation among
those individuals, corporations, foundations, church groups,
and other organizations from whom it has and would be
anticipated in the future to solicit capital contributions."
Gelatt testified that prior to the Tabitha's House controversy,
Samaritan Inns had the capacity to meet the goals of the
Next Steps Initiative, and that the expert panel had conclud-
ed that it would still be able to meet those goals "if it receives
support in its efforts from the D.C. government and if the
volunteer leadership is still 'on board.' " Gelatt also testified
that while the members of the panel "felt that we could
comfortably say that there was some impact" on Samaritan
Inns' fundraising capability as a result of the controversy,
"none of us ... felt that we could quantify it." The expert
panel was unable to conclude "whether the impact [was] an
outright loss of contributions, or merely a delay in their
receipt (based at least in part on Samaritan Inns' election not
to proceed with the Next Steps Initiative)."
The district court found that the earliest prudent date for
Samaritan Inns to begin the Next Steps Initiative was Janu-
ary 1996, and it accepted Erickson's estimates of "lost" and
"delayed" contributions and Edelman's calculations of the
diminution in value caused by the delay. The court therefore
awarded Samaritan Inns $1,958,500 for "lost" contributions,
$385,723 for the reduction in value of "delayed" donations to
the Next Steps Initiative, and $3,440 for the reduction in
value of the delayed donations to the Tabitha's House cam-
paign. The district court also awarded $57,240 to compensate
Samaritan Inns for construction delay and staff overhead,
$2,404,903.
Section 813(c) of the Fair Housing Act, 42 U.S.C. § 3613(c),
provides that "if the court finds that a discriminatory housing
practice has occurred or is about to occur, the court may
award to the plaintiff actual and punitive damages...." On
its face, nothing in this language suggests any limit on the
type of "actual damages" that a plaintiff may recover. Nor
does the legislative history of the Act suggest any such
limitation. 9 However, the parties have not cited a case, nor
are we aware of one, in which a plaintiff has sought to recover
damages under the Fair Housing Act for a defendant's inter-
ference with a fundraising campaign. Nonetheless, although
the District contends that Samaritan Inns' claims of injury
are unduly speculative and remote, it does not contend that
such damages are not recoverable under § 813(c), upon a
proper showing of causation.
Furthermore, we recognize that the language of the Act is
"broad and inclusive" and must be given a "generous con-
struction." Trafficante, 409 U.S. 205, 209 , 212 (1972); see
1780 (1995). The Supreme Court has recognized that an
action for damages under § 813 may be analogous to several
different tort actions recognized at common law, including
actions for defamation or intentional infliction of emotional
distress. Curtis v. Loether, 415 U.S. 189, 195 & n.10 (1974).
Whatever the appropriate analogy, "[a] damages action under
the statute sounds basically in tort_the statute merely de-
fines a new legal duty, and authorizes the courts to compen-
sate a plaintiff for the injury caused by the defendant's
wrongful breach." Id. at 195.
It cannot be gainsaid that just as the success of a for-profit
business may depend on the good will of its customers, see,
e.g., Newark Morning Ledger Co, v. United States, 507 U.S.
546, 555-56 (1993), many charitable enterprises such as Sa-
maritan Inns depend largely on donations from the public for
their continued success. See, e.g., Henry B. Hansmann, The
Role of Nonprofit Enterprise, 89 Yale L.J. 835, 840-41 (1980).
Furthermore, because such enterprises cannot sell equity
shares, they often depend heavily on outside contributions for
capital financing. Id. at 877. By issuing a stop-work order
because Samaritan Inns had purportedly misrepresented its
intentions in its permit applications, and by otherwise ob-
structing the completion of Tabitha's House, the District
could reasonably have foreseen that its actions might, at least
temporarily, adversely affect Samaritan Inns' image as an
efficient and reputable provider of charitable services, and
thereby impair its ability to raise funds. 10 Cf. Restatement
(Second) of Torts § 561(b) (1977); 2 Fowler V. Harper et al.,
The Law of Torts § 5.3 (2d ed. 1986). In related contexts,
the court has recognized that for-profit corporations may
Petfoods, Inc. v. Ralston Purina, Inc., 997 F.2d 949 (D.C. Cir.
1993), a competitor's false advertising campaign forced a dog
food manufacturer to delay introduction of a new product into
the national market, and the court upheld an award of
damages under § 43(a) of the Lanham Act, 15 U.S.C.
§ 1125(a) for the delay in receipt of profits. See also Art
Metal-U.S.A., Inc. v. United States, 753 F.2d 1151, 1156
(D.C. Cir. 1985). We see no principled basis on which to
conclude that a nonprofit corporation, such as Samaritan
Inns, may not recover contributions lost or delayed as a
result of the District's unlawful interference with its activities
if such interference was the proximate cause of the loss. See
Harper et al., supra, § 5.3.
To determine whether Samaritan Inns has met this burden
of proof to show loss and causation, we apply settled princi-
ples governing the recovery of damages for lost profits. Both
parties agree that the relevant standards are stated in Story
Parchment Co. v. Paterson Parchment Paper Co., 282 U.S.
555, 563 (1931):
Where the tort itself is of such a nature as to preclude
the ascertainment of the amount of damages with cer-
tainty, it would be a perversion of fundamental principles
of justice to deny all relief to the injured person, and
thereby relieve the wrongdoer from making any amend
for his acts. In such case, while the damages may not be
determined by mere speculation or guess, it will be
enough if the evidence show the extent of the damages as
a matter of just and reasonable inference, although the
result be only approximate.
Id. at 563. Thus, while a plaintiff seeking to recover lost
profits must ordinarily prove the fact of injury with reason-
able certainty, proof of the amount of damages may be based
on a reasonable estimate. Office & Professional Employees
Intern. Union, Local 2 v. FDIC, 27 F.3d 598, 602 (D.C. Cir.
1994); Eureka Investment Corp., N.V. v. Chicago Title Ins.
Co., 743 F.2d 932, 938 (D.C. Cir. 1984); Restatement, supra,
§ 912 & cmt. d; 1 Robert L. Dunn, Recovery of Damages for
Lost Profits § 1.3, at 11 (4th ed. 1992). Although a court will
not permit a plaintiff to recover damages based on "merespeculation or guess," see Wood v. Day, 859 F.2d 1490, 1493
(D.C. Cir. 1988), the fact that an estimate is uncertain or
inexact will not defeat recovery, once the fact of injury is
shown. Dunn, supra, at 11.
Applying this framework to the District's contention that
the record does not support the district court's award of more
than $2.3 million to compensate Samaritan Inns for "lost" and
"delayed" contributions to the Next Steps Initiative, we con-
clude that Samaritan Inns is not entitled to recover damages
for "lost" contributions because it has not shown with reason-
able certainty that any contributions were lost. The primary
evidence concerning lost contributions came from Erickson,
whose testimony did not provide any clear explanation as to
why some of the funds Samaritan Inns expected to receive in
1994 and 1995 were irretrievably "lost," while the remaining
amounts were merely "delayed." Erickson testified that he
and his staff expected to solicit $4 million from ten potential
donors in the first phase of the Next Steps campaign in 1994.
Based on past giving patterns, he anticipated that 85% of that
sum would be paid over a three-year period, and that the
remaining 15%, or $600,000, would be paid in a lump sum
during 1994. In his damages estimate, Erickson assumed
that this $600,000 in lump-sum contributions had been "lost,"
but that the contributions expected to be paid over the three-
year period had merely been delayed. Similarly, Erickson
testified that in the second phase of the campaign, he planned
to raise $650,000 from individual and corporate contributors,
and that a fundraising board similar to those used in the
Lazarus House and Tabitha's House campaigns was expected
to raise $650,000. Again, he assumed that 85% of this sum
would be paid over three years, and that the remaining 15%,
or a total of $195,000, would be paid in a lump sum in 1994.
Erickson also classified this $195,000 lump sum payment as
"lost." In 1995, in the third phase of the campaign, Erickson
planned to raise $300,000 from individual and corporate con-
tributors, and expected the fundraising board to raise
$850,000. Relying on historical patterns, Erickson assumed
that 51% of the later donations would be paid on a multi-year
basis. He classified the remaining 49%, or $563,000, as "lost"lump sum contributions.
Although he offered no testimony on this point, a four-page
analysis prepared by Erickson indicated that he also planned
to solicit $700,000 from foundations in 1994 and $850,000 in
1995. The analysis indicates that he expected approximately
one-third of the foundation grants to have been "lost" rather
than delayed. Erickson classified $250,000 of the foundation
grants from 1994 and $200,000 of the grants from 1995 as
"lost." Thus, Erickson concluded that $1,045,000 of the
$2,996,667 Samaritan Inns expected to receive in 1994 and
$913,500 of the $3,110,667 it had expected to receive in 1995
had been "lost."
Erickson's calculations regarding the "lost" contributions
depended upon the premise, accepted by the district court,
that fundraising is cyclical, and that in any given year contrib-
utors have a finite amount of money to donate to worthy
causes. Thus, if circumstances prevented Samaritan Inns
from soliciting money in a particular year, it would have
irretrievably lost the opportunity to compete for the funds
that were distributed in that year. Although it could conceiv-
ably raise the same amount of money in a different year,
those contributions would come out of a different pool of
funds. As Erickson explained, "[t]he people that have the
capacity to give this kind of money give this generously ...
on a regular basis. That money that wasn't given in 1994 was
given for something else. And so that money is not available
to Samaritan Inns." This type of analysis is, in some re-
spects, analogous to the manner in which contract law treats
"lost-volume" sellers. If, for example, a buyer breaches a
contract to purchase a car from an automobile dealer, the fact
that the dealer is subsequently able to resell the car to a
second buyer at the same price does not mean that the dealer
has suffered no damage. Had it not been for the first buyer's
breach, the dealer would have sold two cars, and earned
profit on both. Hence, the dealer is entitled to recover the
lost profit on the sale of one car. See U.C.C. § 2-708(2);
Neri v. Retail Marine Corp., 30 N.Y.2d 393 (1972). Similarly,
if a charity solicits money on an annual basis, a donation in
one year will not compensate the charity for a donation "lost"in a prior year as a result of a defendant's misconduct. Had
it not been for the misconduct, the charity would have re-
ceived contributions in both years.
The problem with the "lost" contributions analysis is that
the Next Steps Initiative, as Erickson explained it to the
district court, was not an annual giving program. Rather, it
was a capital fundraising drive of limited duration intended to
raise a specified sum of money for the construction of new
Houses and Inns and the creation of an endowment. Erick-
son acknowledged that "[c]apital projects are, by definition,
special projects," and distinguished between the sums that
Samaritan Inns raised for capital projects and the funds it
raised to defray its operating costs. There is nothing in the
record to suggest that Samaritan Inns would have continued
to solicit capital contributions indefinitely once it received the
$8 million it hoped to raise in 1994 and 1995. To the
contrary, Erickson described the campaign as a three-year
endeavor. Thus, there was no basis for the district court to
conclude that Samaritan Inns had irretrievably lost any funds
merely because it lost the opportunity to compete for the
funds available in 1994 and 1995. Given the limited duration
of the capital campaign, Samaritan Inns could mitigate that
loss by raising the amount that it planned to raise in 1996 and
subsequent years. Assuming that it could raise the same
amount at a later time, its damages would be limited to any
injury caused by the delay.
Had the Next Steps Initiative been an annual giving cam-
paign, rather than a capital campaign of limited duration,
Edelman's analysis might well have provided a relevant mea-
sure of damages. As noted, Edelman estimated the amount
of contributions that the Next Steps Initiative could have
expected to receive between October 1993 and October 1994,
relying on historical patterns of contributions to the Tabitha's
House campaign and various indexes of business activity.
His analysis indicated that Tabitha's House could have ex-
pected to receive between $2.05 and $2.8 million during that
one-year period. If the Next Steps Initiative were an annual
event expected to continue for the indefinite future, Edelman
might have reasonably concluded that Samaritan Inns hadirretrievably lost this sum of money. But neither Edelman's
analysis nor any other evidence offered by Samaritan Inns
explained why, under the circumstances, Samaritan Inns
could not simply make up the "lost" contributions in later
years and still achieve the goals of the campaign.
Furthermore, contrary to the district court's finding, Edel-
man's analysis did not "fully support" Erickson's damages
estimates. Although both concluded that Samaritan Inns had
suffered damages in the $2 million range, their calculations
measured different things. Erickson assumed that the
"lump-sum" contributions and a portion of the foundation
grants that Samaritan Inns had expected to receive in 1994
and 1995 had been "lost," but that the remaining funds that
Samaritan Inns had expected to receive had merely been
delayed. If, as Erickson contended, the delay meant that
Samaritan Inns had forever lost the opportunity to compete
for those funds available in 1994 and 1995, it is unclear why
the remaining contributions were not also "lost," rather than
delayed. Edelman, by contrast, conducted an analysis appro-
priate for an annual campaign, assuming that Samaritan Inns
had "lost" the entire difference between the contributions it
could have received in the wake of the Tabitha's House
controversy and the contributions it actually received. Not
only did he employ a different methodology, but he examined
a different period of time. Erickson's calculations covered
the two-year period from 1994 to 1995, while Edelman's
covered the one-year period from October 1993 to October
1994. Given these significant differences in methodology, the
fact that Edelman and Erickson reached similar estimates of
Samaritan Inns' damages was mere coincidence.
This is not to suggest that a charitable organization could
never recover damages for lost contributions to a limited-
duration capital fundraising campaign. Samaritan Inns could
have demonstrated permanent losses by presenting evidence
that particular contributors who might otherwise have made
contributions in 1994 and 1995 were unwilling to do so in the
wake of the Tabitha's House controversy, and that Samaritan
Inns was unable to secure contributions from alternative
sources. It did not present any evidence to this effect,although Erickson did testify that he felt the members of the
Tabitha's House fundraising board would be reluctant to be
involved in the Next Steps Initiative. 11 The best evidence of
the reactions of potential contributors to the Tabitha's House
controversy came from the interviews conducted by the panel
of fundraising experts. The comments that Gelatt, a member
of the expert panel, cited in his written declaration did reflect
some hesitation on the part of contributors to give money to
Samaritan Inns until it resolved its problems with the Dis-
trict, but none of the cited comments suggest that any
contributor viewed these problems as an absolute barrier to
future contributions. Furthermore, Gelatt testified that al-
though the expert panel members thought that the District's
actions had some impact on Samaritan Inn's fundraising
capability, they were unable to quantify it or to state with any
certainty whether the impact would be manifested as an
outright loss or merely as a delay. Given the dearth of
evidence and the conflicting methodologies used by Erickson
and Edelman, we conclude that Samaritan Inns did not prove
with reasonable certainty that it had lost any capital contribu-
tions. Consequently, the district court's finding that Samari-
tan Inns lost $1,958,501 in 1994 and 1995 was clearly errone-
ous.
The district court's award of damages for the delayed
receipt of the Next Steps Initiative funds is a different
matter. Through the testimony of Erickson and Derrick,
Samaritan Inns presented substantial evidence to support the
district court's finding that the District's actions forced a
delay in the commencement of the Next Steps Initiative.
Having demonstrated the fact of a delay with reasonable
certainty, Samaritan Inns was only required to prove the
extent of its damages "as a matter of just and reasonable
inference, although the result be only approximate." StoryParchment, 282 U.S. at 563 . While neither Erickson nor the
district court could know with certainty whether Samaritan
Inns ultimately would meet the goals of the Next Steps
Initiative, Gelatt testified that those goals were reasonable
and attainable. Given this expert testimony, the district
court could reasonably rely on Erickson's estimates of the
amount Samaritan expected to raise through the Next Steps
Initiative as more than "mere speculation and conjecture."
Id.; cf. Wood, 859 F.2d at 1493.
Samaritan Inns is, however, only entitled to recover dam-
ages for delays caused by the District, not for delays caused
by factors over which the District had no control, such as
community opposition to Tabitha's House. The district court
concluded that as a result of the District's actions, Samaritan
Inns was unable to raise any capital contributions from
October 1993, when the stop-work order was issued, to the
time of trial in February 1995, and that the "earliest prudent
commencement date for the Next Steps Initiative [was] 1996."
Therefore, it awarded Samaritan Inns damages for a delay of
two years. The district court's finding that the District's
actions forced a two-year delay in the receipt of funds by
Samaritan Inns is clearly erroneous. At the very latest, the
District had ceased to oppose Samaritan Inns' activities by
July 12, 1994, when it issued a certificate of occupancy for
Tabitha's House. As early as March 15, 1994, the District
had entered into a consent agreement not to revoke the
Tabitha's House permits or attempt to stop work on the
project without a legitimate reason. Although Cross caused a
citation to be issued against Lazarus House after the consent
order was issued, that matter was quickly resolved. After
the issuance of the certificate of occupancy for Tabitha's
House, Samaritan Inns' fundraising efforts were still presum-
ably hindered by significant obstacles unrelated to the Dis-
trict, including most notably, the appeal to the BZA in August
1994 by community residents seeking to revoke Tabitha
House's certificate of occupancy. But the District cannot be
held responsible for that delay. 12 Furthermore, SamaritanInns is entitled to recover only for the delay that could not
reasonably have been minimized had Samaritan Inns begun
its capital campaign once the consent decree was entered.
Under these circumstances, the maximum period of delay
reasonably attributable to the District's actions is nine
months, from the time the stop-work order was issued in
October 1993 to the time the certificate of occupancy was
issued in July 1994. The minimum period of delay is three
months, from the issuance until the revocation of the stop-
work order. Therefore, we remand the case to the district
court for redetermination of the period of delay reasonably
attributable to the District, and recalculation of the amount of
Samaritan Inns' damages. 13 On remand, because Samaritan
Inns did not demonstrate any "lost" contributions, the entire
sum of $8 million that it expected to receive from 1994 to 1997
must be classified as "delayed." 14
III.
The remaining issues do not require extensive discussion.
First, the District contends that Cross and Montgomery were
entitled to qualified immunity because they could reasonably
have believed that their actions were lawful. Additionally, it
contends that the district court abused its discretion in
awarding punitive damages against Cross and Montgomery
for their "reckless and callous indifference" to Samaritan
Inns' rights under the Fair Housing Act. The District focus-
es on a 1992 decision by the BZA ruling that a building that
provided former prison inmates with housing, as well as
religious guidance and assistance with financial matters, had
to be classified under the zoning laws as a community-based
residential facility, rather than as a rooming or boarding
house. The District maintains that, based on this precedent,
Cross and Montgomery could reasonably have believed that
Tabitha's House was a community-based residential facility.
Government officials who violate a plaintiff's civil rights are
entitled to qualified immunity if the officials reasonably could
have believed that their actions were lawful in light of clearly
established federal law and the information available to them
at the time the actions took place. Anderson v. Creighton,
483 U.S. 635, 641 (1987). Punitive damages for violations of
federal law are available where a defendant's conduct is
"motivated by evil motive or intent, or when it involves
reckless or callous indifference to the federally protected
rights of others." Smith v. Wade, 461 U.S. 30, 56 (1982).
The district court found that Cross and Montgomery were not
entitled to qualified immunity, and that punitive damages
were appropriate, based on their entire course of conduct
during the Tabitha's House controversy. For example, the
district court found that the October 1993 stop-work order
was facially invalid because it contained no explanation of why
it had been issued. Although the Zoning Administrator
recommended that the order be vacated, Cross refused to do
so, claiming that the Mayor had decided to support the
protesters. As a result, the stop-work order remained in
effect until mid-January 1994. Cross also directed Montgom-
ery to revoke the building and demolition permits for Tabi-
revoke the permits without the hearing required under Dis-
trict law. Even if Cross and Montgomery could reasonably
have believed that Tabitha's House was a community-based
residential facility by reason of the BZA's 1992 decision, there
is nothing in the record to suggest that they could have
reasonably believed that these actions were lawful. To the
contrary, the district court found that these actions were
motivated by intentional discrimination against the prospec-
tive residents of Tabitha's House on the basis of their handi-
caps. Given the course-of-conduct evidence, the district
court's findings that Cross and Montgomery were not entitled
to qualified immunity and that they acted with reckless and
callous disregard for Samaritan Inns' rights are not clearly
erroneous. Hence, the district court did not abuse its discre-
tion in awarding punitive damages.
Second, the District contends that if it prevails in this court
as to the compensatory damages award for "lost" and "de-
layed" contributions to the Next Steps Initiative, the case
should also be remanded for reconsideration of the award of
attorney's fees and costs. We agree. Samaritan Inns con-
fined its response to this contention by asserting, in a foot-
note to its brief, that there was nothing in the record to
indicate that the fee award was related to the lost contribu-
tions award. As a prevailing plaintiff, Samaritan Inns is
entitled to recover reasonable attorney's fees and costs be-
cause the District has not demonstrated any circumstances
that would make such an award unjust. 42 U.S.C.
§ 3613(c)(2); Hensley v. Eckerhart, 461 U.S. 424, 429 (1983).
The reasonableness of the award, however, may turn on the
degree of success that a plaintiff achieves. Id. at 434-36. On
remand, therefore, the district court shall reconsider the
award, determining whether to reduce it in light of the
revised level of success that Samaritan Inns ultimately
achieves.
Finally, Samaritan Inns cross-appeals the district court's
denial of its "reasonable accommodation" claim under 42
U.S.C. § 3604(f)(3)(B). This claim stems from a letter of
December 1, 1993, that counsel for Samaritan Inns wrote to
social services that Samaritan Inns planned to provide at
Tabitha's House were permitted as a matter of right, and
agree to issue a certificate of occupancy for Tabitha's House
as a boarding, rooming, or apartment house once construction
was completed. In the complaint, Samaritan Inns alleged
that the District violated § 3604(f)(3)(B) by failing to agree to
these proposals. The district court addressed this issue in
cursory fashion, noting only that "Samaritan Inns has failed
to present persuasive evidence in support of this claim."
The District properly points out that we need not address
Samaritan Inns' "reasonable accommodation" contentions be-
cause they are moot. The District has issued a certificate of
occupancy for Tabitha's House as a rooming and boarding
house. Thus, the District has made it clear that the services
Samaritan Inns intends to provide at Tabitha's House are
permitted as of right, and that they do not, in the District's
view, make it a community-based residential facility. That
conclusion is supported by the administrative law judge's
decision of December 28, 1993, finding that Tabitha's House
was properly classified as a rooming or boarding house rather
than as a community facility, and by the BZA's decision not to
revoke Tabitha's House's certificate of occupancy. Hence,
there is no formal District policy or rule preventing Samari-
tan Inns from making its planned use of Tabitha's House, and
it is unclear what "accommodation" Samaritan Inns requests.
The district court thus properly denied the request for relief.
Accordingly, we reverse the judgment in part and remand
the case for recalculation of Samaritan Inns' damages for
delayed capital contributions arising from the District's inter-
ference with the Next Steps Initiative, and for reconsidera-
tion of the award for attorney's fees and costs; otherwise we
affirm.
1 Under the zoning regulations, a "boarding house" is "a build-
ing or part of a building that provides, for compensation, meals or
lodging and meals to three (3) or more guests on a monthly or
longer basis." D.C. Mun. Regs. tit. 11, § 199.1 (1995).
2 Under the zoning regulations, a "community-based residential
facility" is "a residential facility for persons who have a common
need for treatment, rehabilitation, assistance, or supervision in their
daily living." D.C. Mun. Regs. tit. 11, § 199.1 (1995). If a facility is
a community based residential facility, it cannot be deemed to
constitute any other use permitted by the zoning regulations. Id.
3 Under the zoning regulations, a "rooming house" is "a build-
ing or a part of a building that provides sleeping accommodations
for three (3) or more persons who are not members of the immedi-
ate family of the resident operator or manager, and in which
accommodations are not under the exclusive control of the occu-
pants." D.C. Mun. Regs. tit. 11, § 199.1 (1995).
4 See D.C. Mun. Regs. tit. 11, §§ 357-360 (1995) (defining
permissible uses of various types of community-based residential
facilities in R-5 zones).
5 42 U.S.C. § 3602(h) provides:
"Handicap" means, with respect to a person_
(1) a physical or mental impairment which substantially
limits one or more of such person's major life activities;
(2) a record of having such an impairment, or
(3) being regarded as having such an impairment,
Footnote: 6
but such term does not include current, illegal use of or
addiction to a controlled substance (as defined in section 802 of
Title 21).
Recovering alcoholics or drug abusers who do not currently use
illegal drugs may be persons with a "handicap" under the Fair
Housing Act. H.R. Rep. No. 100-711, at 22 (1988), reprinted in
1988 U.S.C.C.A.N. 2173, 2183; see also United States v. Southern
Management Corp., 955 F.2d 914 (4th Cir. 1992).
6 42 U.S.C. § 3604(f)(1) makes it unlawful to:
discriminate in the sale or rental, or to otherwise make unavail-
able or deny, a dwelling to any buyer or renter because of a
handicap of_
(A) that buyer or renter,
(B) a person residing in or intending to reside in that
dwelling after it is so sold, rented, or made available; or
(C) any person associated with that buyer or renter.
42 U.S.C. § 3617 makes it unlawful to:
coerce, intimidate, threaten, or interfere with any person in the
exercise or enjoyment of, or on account of his having aided or
encouraged any other person in the exercise or enjoyment of,
any right granted or protected by section ... 3604 ... of this
title.
Footnote: 77 42 U.S.C. § 4604(f)(3)(B) provides that "[f]or the purposes of
this subsection, discrimination includes ... a refusal to make rea-
sonable accommodations in rules, policies, practices, or services,
when such accommodations may be necessary to afford such person
equal opportunity to use and enjoy a dwelling...."
Footnote: 88 The district court found that the amount of this shortfall was
$255,000. Erickson testified, however, that although the Tabitha's
House campaign was $258,000 short of its goals at the time the
stop-work order was issued, about $61,000 of that sum was already
"in process," and thus, the total shortfall was approximately
$196,000.
Footnote: 99 The legislative history of the Fair Housing Act is "not too
helpful." Trafficante v. Metropolitan Life Ins. Co., 409 U.S. 205 ,
210 (1972); but see Gladstone Realtors v. Village of Bellwood, 441
U.S. 91, 105-107 (1979). Although § 813 was added in 1988, its
relief provisions are virtually identical to those in former § 812 of
the original Fair Housing Act, Pub. L. No. 90-284, § 812, 82 Stat.
88 (1968). The only significant differences between current
§ 813(c) and former § 812(c) are that the new provision eliminates a
$1000 limit on punitive damages and broadens the court's discretion
to award attorney's fees. See H.R. Rep. No. 100-711, at 39-40
(1988), reprinted in 1988 U.S.C.C.A.N. 2173, 2200-01. Former
§ 812, like the remainder of the Fair Housing Act, derives primarily
from an amendment offered on the Senate floor by the minority
leader, Senator Dirksen. 114 Cong. Rec. 4570-73 (1968). The
House ultimately agreed to the Senate amendments. Id. at 9621.
Neither the House nor the Senate debates shed additional light on
the meaning of the term "actual damages."
Footnote: 1010 Of course, knowledgeable donors might well be aware that
the path of construction and renovation of facilities like Tabitha's
House is rarely smooth, and that various obstacles are likely to
arise during such endeavors. See, e.g., Linda Wheeler, Capitol Hill
Residents Protest Opening of New Homeless Shelter, Wash. Post.,
Jan. 30, 1996, at B3; Steve Bates, Alexandrians Fail to Stop Group
Home, Wash. Post., July 18, 1996, at V1; Laurie Goodstein, A
Mission Not All Will Embrace, Wash. Post. Oct. 21, 1993, at A1.
Footnote: 1111 Even if Erickson could not ascertain the intentions of all of
its hoped-for donors to the capital campaign, the record demon-
strates he had ongoing relationships with some of Samaritan Inns'
key donors and could at least have determined their views.
Footnote: 1212 Erickson also testified that the Ward 4 Council Member had
introduced legislation in the Council of the District of Columbia in
1994 that would have made Tabitha's House a community-based
residential facility. The measure was never enacted, and the
District cannot be held responsible for the delay caused by the
actions of an individual legislator.
Footnote: 1313 Because a remand is required, we note that Edelman ap-
pears to have relied on the Consumer Price Index, a measure of
inflation, rather than any measurement of interest rates, in making
his damages calculations. While we do not now decide whether any
particular method of calculating the income lost as a result of the
delay is preferable to another, the district court should consider on
remand whether Edelman's methodology is a reliable and appropri-
ate way to measure Samaritan Inns' damages, and regardless of
what methodology is used, the court should explain the basis for its
choice. See generally St. Louis Southwestern Ry. Co. v. Dickerson,
470 U.S. 409, 412 (1985); Jones & Laughlin Steel Corp. v. Pfeifer,
462 U.S. 523, 536-42 (1983).
Footnote: 1414 Erickson's analysis indicated that he anticipated that Samari-
tan Inns would receive $2,996,667 in 1994, $3,110,667 in 1995,
$1,697,167 in 1996, and $195,500 in 1997.