Va. court agrees to reconsider Nationwide case

March 3, 2000
by Tracey McCartney
National Fair Housing Advocate Online

(RICHMOND, Va., March 3, 2000) -- The Virginia Supreme Court has agreed to reconsider its decision to throw out a historic $100 million discrimination verdict against Nationwide Insurance, a move one attorney is calling a "good sign."

The court issued a two-sentence ruling Friday saying it had withdrawn its original ruling and would schedule another hearing.

Because the original decision to throw out the discrimination verdict was decided 4-3, the rehearing decision is good news for the plaintiff in the case, Housing Opportunities Made Equal of Richmond, said attorney and Richmond mayor Tim Kaine. For the court to reconsider one of its rulings, at least one Supreme Court justice who voted in the majority must agree to the rehearing.

Such rehearings happen in Virginia only once every five years, he said.

HOME filed a lawsuit that alleged that Nationwide tried to avoid doing business in Richmond's African-American neighborhoods, a practice known as "redlining." The suit also alleged that when Nationwide did sell policies to homeowners in those neighborhoods, it charged more than it did in white neighborhoods and provided inferior policies.

After a trial in October 1998, the jury awarded HOME $500,000 in compensatory damages and $100 million to punish Nationwide for its conduct. The award was the largest in a housing discrimination case. Nationwide has been sued more than any other insurer for housing discrimination.

But after a series of appeals by the insurer, the Virginia Supreme Court ruled in January that HOME lacked the right to sue, or "standing," and threw the case out because HOME didn't show that Nationwide's practices damaged the organization. The court applied Virginia law, which is much stricter than federal law on the issue of standing, in making its decision. The case had been brought under Virginia's fair housing statute.

The arguments attorneys made for the rehearing focused on the court's decision to apply Virginia rules, Kaine said. The rules the court applied were gleaned from a handful of past cases that involved the rights of people to sue over administrative decisions, he said.

The plaintiffs and other interested parties argued that the court should have applied the same rules federal courts do when considering cases under the federal Fair Housing Act, Kaine said. The legislative history behind passage of the Virginia fair housing statute, numerous Virginia attorney general's opinions and state administrative regulations all say that the Virginia law should be applied using the same rules as those that apply to the federal act, because the Virginia law is based on the federal act, he said.

In fact, Kaine said, HOME's lawsuit was patterned after a historic 1982 U.S. Supreme Court case, Havens Realty Corp. v. Coleman, in which the Supreme Court first granted fair housing organizations like HOME the right to sue if they can show that a defendant's discriminatory actions caused the organization injury. Coincidentally, HOME was the fair housing organization whose standing was at issue in the Havens case.

Several parties joined with HOME in asking the court to reconsider its decision. The Virginia Legislative Black Caucus, an organization made up of the African-American members of the state's General Assembly, and the Virginia Department of the Rights of Virginians with Disabilities joined together to submit one "friend of the court" brief. The state's NAACP and the National Fair Housing Alliance joined to submit another, Kaine said.

Kaine said the court had not scheduled the new hearing but he estimated it would take place in mid-April.

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Virginia Supreme Court overturns historic discrimination verdict