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June 25, 1996

MBI Denies Housing Discrimination but Settles for Record Sum

by Edmund Tsang

On June 13 at a hearing on the consent decree to settle a housing discrimination complaint against Mitchell Brothers, Inc. (MBI), U.S. District Judge Richard W. Vollmer asked the attorney from the Department of Justice and the attorneys for the plaintiffs why they would agree to a settlement in which the documents that point to intentional and systematic practices by MBI to discriminate against minorities would be returned to the defendants and held "confidential." Judge Vollmer hypothesized that if this were a case involving a defective car part from General Motors, he would probably not rule for the settlement. He asked the attorneys for the plaintiff why they would agree to give defendants back all the documents.

According to the consent decree, "The parties agree that any discovery documents obtained in this matter, whether formal or informal, and any documents generated in this matter which contain attorney work products, shall hereafter be kept confidential to the extent permitted by law and shall not be disclosed by the parties to third parties unless by Court order or otherwise required by law...Class counsel, upon request by Defendant MBI, shall return to Defendant MBI the original and all copies of all documents obtained from Defendant MBI or its files, including any inquiry or 'guest' cards.

"The parties agree that this Consent Decree shall not be offered into evidence against any of the Defendants in any legal or administrative proceeding for any purpose whatsoever other than to enforce the provisions of this Decree."

Vollmer said "the court is interested" to know, "if the documents were held confidential," how would the other as-yet-unknown class members be notified, since "they may have moved away from the area." Earlier in the hearing on June 13, Greg Stein, an attorney for the plaintiff class, said he was informed by former MBI employees that the discriminatory practices were widespread in the apartments under MBI management, and might reach into "the hundreds or a thousand" though he believes it is unlikely.

Seth Rosenthal, attorney from the Justice Department, told the judge the Department of Justice does not condone confidential settlement, and added the consent decree is "not a confidential settlement." In this case, the U.S. Government concurs with the plaintiffs' and defendants' attorneys.

Cecily L. Kaffer, of the law firm of Kaffer, Pond & Hannan representing the plaintiffs, told Judge Vollmer that the confidentiality issue was the subject of "fairly intensive negotiations" that were sometimes "bitter." "The documents are already in circulation," Kaffer said. "We are by no means the only ones who have the documents. We don't have the original; they have already been published in The Harbinger." [Ms. Kaffer mistakenly identifed The Harbinger as a University of South Alabama publication.]

The "Guest" Cards

Miriam Steiner, a former MBI leasing agent who turned in the coded information cards used by one MBI apartment complex to identify blacks for discriminatory purposes, told The Harbinger last week she is pleased that the settlement exerts a large penalty on MBI, including a fine of $75,000 and $250,000 to start a Fair Housing Center in Mobile. "Enough conscientious people came forward," Steiner said. "I am very glad that I have the physical evidence to back up my claim."

In an affidavit filed with a complaint to the Department of Housing and Urban Development (HUD), Steiner stated that she was instructed by Debbie Brown, the apartment-complex manager at Maison de Ville and Maison Imperial apartments, to put a mark on the top left-hand corner of the index cards that prospective renters are asked to fill out to identify the black applicants. "About two weeks before I was fired, Debbie Brown told me to pull the marked cards out of the file and to throw them away. I pulled the cards out and did put them in the garbage. I then decided to keep the cards. I have attached true and correct copies of these cards to this affidavit as Exhibit 1."

According to Steiner, MBI has "fired some fine people" because they would not participate in housing discrimination. "It's a devastating thing to have happened to, getting fired," Steiner said. "They usualy don't give a reason or a trumped-up excuse."

Steiner also told The Harbinger in an interview last August when the class action lawsuit against MBI was filed that she worked as a leasing agent for MBI for about ten months in 1991. "I had been at MBI approximately one month when a form was brought to me, which I was required to sign, stating that I would not discriminate against anyone and that to do so would be grounds for immediate dismissal. After I signed it, I asked Debbie Brown for a copy.

"I asked Debbie Brown if the form really meant that we were supposed to lease to blacks. She replied, 'Don't pay it any attention, that is just something that Jim [Spafford] wanted us to do.'" Spafford, a property manager for MBI, was identified in the consent decree together with Debbie Brown and MBI as defendants in the housing discriminating lawsuit. "I'd love to see Jim Spafford and Debbie Brown fined by the Justice Department," aded Steiner.

The Other Lawsuits Against MBI

According to the consent decree, "The United States and Class Counsel represent that as of the date of this Decree is submitted to the Court for preliminary approval, they are not aware of any additional persons who are contemplating a lawsuit against Defendants based on the conduct alleged in this civil action."

MBI was the subject of another lawsuit filed earlier this year by a former MBI apartment manager who alleged that she was fired from her job "because of her efforts to comply with the Fair Housing Act" even though she had gotten the occupancy rate up. Jamie Craft, the plaintiff, told The Harbinger in a telephone interview last summer that she was apartment manager for Ashford Place in 1993 and 1994, and she had been active in the Mobile Apartment Association as well as the Alabama Apartment Association in promoting fair housing. She believes she was fired because she had been "outspoken" about complying with the Fair Housing Act among MBI employees. After she had referred a black couple with a child to Maison de Ville, Craft said she was told not to send anyone black over there. "Even after that I still send other blacks there," Craft told The Harbinger.

Attorneys for MBI deny this allegation, contending in court papers that "the plaintiff's employment was voluntarily terminated as an employee of Mitchell Brothers, Inc., but specifically denies that the plaintiff's termination had anything to do with any of her efforts involving the Fair Housing Acts and its mandate."

According to court papers filed in April, 1996, Craft said she was placed under scrutiny after she informed Spafford that "she would not under any circumstances discriminate in violation of the Fair Housing Act and attempted to advise Defendant of the serious repercussions that could apply to acts which constituted discrimination under the Fair Housing Act and to provide educational training about the Act to other MBI employees."

The court paper stated that "prior to this Plaintiff had received nothing but excellent reviews by her supervisors at MBI and had never been counseled about any purported problems." The court paper also asked for "documents pertaining to or concerning any administrative or judicial proceedings that involve any claimed violations of the Fair Housing Act of 1968, as amended, or any other federal, state, county or local law or ordinance concerning fair housing."

Russ Copeland, an attorney representing Ms. Craft, told The Harbinger in an interview last Monday that he had not yet had an opportunity to read the consent decree to assess the impact on his case of the provision governing the return of documents to MBI and the confidentiality of these documents. Reggie Copeland, Jr., Russ Copeland's brother, was formerly handling the Craft case. Reggie Copeland told The Harbinger last week that he had already conducted a desposition with Spafford and had obtained several documents concerning housing discrimination practices in properties managed by MBI. Reggie Copeland referred The Harbinger to his brother Russ.

Attorneys for MBI in this case filed court papers on April 24 to object to requests by the plaintiff for certain documents. Among reasons cited by the defendant attorneys is that the disclosure of information about MBI tenants or applicants of rental property "would or might violate said individual's privacy rights and/or Mitchell Brothers, Inc. obligations to them to maintain confidentiality of such information."

Russ Copeland told The Harbinger last week he is trying to obtain documents from MBI officials that will prove Craft had received excellent job evaluations when she was terminated. In 1994, a sexual harassment and housing discrimination lawsuit against MBI officials was filed by yet another former MBI employee, Diane Hall. Other former MBI employees also filed complaints with HUD. It was in connection with Hall's case that the existence of coded information cards became known.

Other Victims of Housing Discrimination

Emma Perryman said she was "dismayed" but "saddened" when she found out last Fall that when she tried to rent an apartment managed by MBI in 1991, her "application was not based on merits but the color of her skil."

In addition to the black applicants who were denied the opportunity to rent properties under MBI management and those who were steered to less desirable properties because of their race, housing discrimination can also affect those who are called upon to do the discrimination. One former MBI leasing agent wrote in her complaint filed with HUD that an investigator interviewed her about housing discrimination. She wrote: "He [the investigator] explained that he was hired by Mitchell Brothers to investigate any knowledge anyone had on these subjects. I remember asking him if this meant that people would be fired, because I signed a form at the beginning of my employment stating I would not discriminate...all the while my mind was racing, wondering what this meant to me. I just made a second move with this company and could not afford another one. As it was, it would take me a few months to recover from the utility transfer charges, new deposits and the other expenses related to moving. I had just uprooted my son again for the sake of advancement (or so I thought) with this company...As far as discrimination, I just did not remember any conversation with Diane [Hall] where I would be guilty -- so my decision was made to side with the company.

"All I could think of is that I just want to have a job, a place to live, able to buy groceries...Thus I took my stand of standing by the company -- also very unsure what charges would be brought against me if I told the truth of how I was trained, because I now was as guilty as the company, since I carried out their instruction."

At the final settlement hearing on June 18, attorneys for MBI denied all allegations of housing discrimination, saying the reason they support settlement is because of the cost of litigation and because the U.S. government has unlimited resources to litigate.

-- June 25, 1996

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