Michigan landlords settle race complaints for $200,000

The Justice Department settled complaints of racial discrimination and family status discrimination against the former owners and managers of three Michigan complexes in November. The defendants have agreed to pay $200,000 to resolve the federal complaint lodged against them.

African-Americans denied units, families with children segregated into certain buildings

The lawsuit asserted that managers denied African-Americans apartments and families with children were treated differently at three Michigan complexes. They are Marsten Apartments, a 48-unit apartment complex in Allen Park; Wellington Manor Apartments, a 64-unit complex in Woodhaven; and Park Heights Apartments, a 72-unit apartment complex in Livonia.

At the time the Justice Department filed the complaints, all three of the suburban Detroit complexes were owned by Santokh and Lorraine Labana and their corporations, Marsten Apartments, Inc. and Labana Management Company, Inc. The Labanas no longer own the three complexes. Prosecutors also named Jerry and Lillian Padgett, the former managers of Marsten Apartments, as defendants in the Justice Department complaint.

Managers at complex lied to African-American testers, claimed no units available

The Justice Department used pairs of African-American and white testers to uncover the evidence of discrimination in this case. The complaint asserted that the Padgetts told African-American testers that units were not available at Marsten Apartments and then showed apartments available for rental to white testers shortly after that. They told white testers that units were available for immediate rental.

After the complaint was filed, the Department of Justice identified an African-American family that was turned away from Marsten Apartments. Subsequent investigation revealed evidence of discrimination at Park Heights and Wellington Manor.

"This lawsuit should send a firm message to housing providers both in the Detroit area and throughout the United States that we will not tolerate discrimination and that we will prosecute and punish those persons who refuse to provide fair and equal treatment." -- Saul Green, US Attorney in Detroit 

During the investigation into the acts of racial discrimination, the Justice Department learned that families with children were being segregated from other tenants at all three complexes. Families with children were only allowed to live in certain buildings at each complex. The Justice Department was able to identify two families with children who had experienced differential treatment. All three families identified by the Department of Justice later joined the lawsuits as plaintiffs.

Defendants no longer own complexes in question, but still own other Detroit area complexes

The defendants agreed to many provisions in the settlement agreement. First, they will pay $140,000 in damages to the three families involved in the suit and $50,000 to any victims identified later. The defendants also agreed to advertise in local media outlets in order to identify other victims of discrimination. The Labanas also agreed to train the employees at the two complexes they still own in the Detroit area and set up new procedures and rules which prevent discriminatory practices at those complexes. The Justice Department did not say whether the Padgetts are still managing apartments.

Agreement is eighth Detroit-area settlement in Justice Department's national testing program

The settlement with the Labanas and the Padgetts is the eighth Justice Department settlement in the Detroit area resulting from the Department's nationwide fair housing testing program. The eight Detroit-area settlements have totaled $1.9 million in damages and penalties.