Alabama complex owners agree to $800,000 settlement in Justice Department race lawsuit

In February, the Justice Department reached an agreement totaling nearly $800,000 thatrequires the owners and operators of five apartment complexes in Mobile, Alabama to createa new policy preventing discrimination against African-Americans. The settlement alsoresolves a private class action suit filed by 13 African Americans who had sought housingor lived at the rental properties at issue.

The agreement, filed in U.S. District Courtin Mobile, resolves allegations that Springdale Stores, Inc. and Delaney Companiesviolated the federal Fair Housing Act by engaging in a practice of discriminating againstAfrican-Americans seeking to rent apartments. Under the agreement, the companies willcompensate individuals who were discriminated against and will take steps to preventfuture discrimination.

Employees told African-Americans that no apartments were available even if they were

The Justice Department alleged in a complaint, filed with the settlement, thatthe companies' employees falsely informed prospective African-American tenants that noapartments were available while simultaneously telling prospective white tenants thatapartments were available. It also alleged that the employees steered African-Americanstoward less desirable sections of the complexes.

The Justice Department became aware of the allegations during its investigation intodiscriminatory practices at complexes owned by Mitchell Brothers, Inc., another Mobilereal estate company.

Upon being notified of the allegations, the companies' owners entered into settlementdiscussions with the Justice Department and attorneys for the 13 class representatives.

Bill Lann Lee, Acting Assistant Attorney General for Civil Rights, commended thecommitment of the Springdale and Delaney representatives, and also the classrepresentatives, to resolving this case and to ensuring compliance with the fair housinglaws.

Under the settlement agreement, the property companies will:

  • pay $645,000 to compensate any persons who are victims of the discriminatorypolicies;
  • pay $135,000 in attorneys' fees;
  • provide fair housing training for their employees and publicize the non-discrimination policy at their apartment complexes and in their advertisements; and,
  • hire an independent third party to test whether they are maintaining non-discrimination policies at the properties.

"This case demonstrates again that housing discrimination is not onlyillegal under the Fair Housing Act but also expensive to correct," said J. DonFoster, U.S. Attorney in Mobile.

Lee noted that this action is the second major rental discrimination case brought inthe Mobile area in the past two years. Last year, the Justice Department reached a similarsettlement with Mitchell Brothers totaling $1.8 million. That settlement helped to createthe Mobile Fair Housing Council.