OCTOBER TERM, 2002
Syllabus
MEYER
v. HOLLEY ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH
CIRCUIT
No. 01-1120. Argued December 3, 2002-Decided January 22,
2003
The Fair Housing Act forbids racial discrimination in respect to
the sale or rental of a dwelling. 42 U. S. C. §§ 3604(b), 3605(a).
Respondent Holleys, an interracial couple, tried to buy a house
listed for sale by Triad, a real estate corporation. A Triad
salesman is alleged to have prevented the Holleys from buying the
house for racially discriminatory reasons. After filing suit in
federal court against the salesman and Triad, the Holleys filed a
separate suit against petitioner Meyer, Triad's president, sole
shareholder, and licensed "officer/broker," claiming that he was
vicariously liable in one or more of these capacities for the
salesman's unlawful actions. The District Court consolidated the
lawsuits and dismissed the claims against Meyer because (1) it
considered them vicarious liability assertions, and (2) it believed
that the Fair Housing Act did not impose personal vicarious
liability upon a corporate officer or a "designated
officer/broker." In reversing, the Ninth Circuit in effect held
that the Act imposes strict liability principles beyond those
traditionally associated with agent/principal or employee/employer
relationships.
Held: The Act imposes liability without fault upon the
employer in accordance with traditional agency principles, i.
e., it normally imposes vicarious liability upon the
corporation but not upon its officers or owners. Pp. 285-292.
(a) Although the Act says nothing about vicarious liability, it
is nonetheless well established that it provides for such
liability. The Court has assumed that, when Congress creates a tort
action, it legislates against a legal background of ordinary
tort-related vicarious liability rules and consequently intends its
legislation to incorporate those rules. Traditional vicarious
liability rules ordinarily make principals or employers vicariously
liable for the acts of their agents or employees in the scope of
their authority or employment.
E. g., Burlington Industries,
Inc. v.
Ellerth, 524 U. S. 742,756. Absent
special circumstances, it is the corporation, not its owner or
officer, who is the principal or employer subject to vicarious
liability for the torts of its employees or agents. The Ninth
Circuit's holding that the Act made corporate owners and officers
liable for an employee's unlawful acts simply because they
controlled (or had the right to control) that employee's actions
is
281
rejected. For one thing, Congress said nothing in the Act or in
the legislative history about extending vicarious liability in this
manner. And such silence, while permitting an inference that
Congress intended to apply
ordinary background tort
principles, cannot show that it intended to apply an unusual
modification of those rules. This Court has applied unusually
strict rules only where Congress has specified that such was its
intent. See,
e. g.,
United States v.
Dotterweich, 320 U. S. 277, 280-281.
For another thing, the Department of Housing and Urban Development
(HUD), the agency primarily charged with the Act's implementation
and administration, has specified that ordinary vicarious liability
rules apply in this area, and the Court ordinarily defers to an
administering agency's reasonable statutory interpretation,
e. g.,
Chevron U. S.
A. Inc. v.
Natural
Resources Defense Council, Inc., 467 U. S. 837, 842-845;
Skidmore v.
Swift &
Co., 323 U. S. 134, 140.
Finally, no convincing argument supports the Ninth Circuit's
decision to apply nontraditional vicarious liability principles. It
erred in relying on language in a then-applicable HUD regulation,
which, taken as a whole, says that ordinary, not unusual, liability
rules apply. And the holdings in cases from other Circuits that the
Ninth Circuit cited do not support the kind of nontraditional
liability that it applied, nor does the language of those cases
provide a convincing rationale for the Ninth Circuit's conclusions.
Pp. 285-289.
(b) Nothing in the Act's language or legislative history
supports the existence of a corporate owner's or officer's
"nondelegable duty" not to discriminate. Such a duty imposed on a
principal would "go further" than the vicarious liability
principles discussed thus far to create liability although the
principal has done everything that could reasonably be required of
him, and irrespective of whether the agent was acting with or
without authority. In the absence of legal support, the Court
cannot conclude that Congress intended, through silence, to impose
a special duty of protection upon individual officers or owners of
corporationswho are not principals (or contracting parties) in
respect to the corporation's unlawfully acting employee. Neither
does it help to characterize the Act's objective as an overriding
societal priority. The complex question of which one of two
innocent people must suffer, and when, should be answered in
accordance with traditional principles of vicarious
liability-unless Congress has instructed the courts differently.
Pp.289-291.
(c) The Court does not address respondents' remaining
contentions because they were not considered by the Court of
Appeals. The Ninth Circuit remains free on remand to consider any
such arguments that were properly raised. Pp.291-292.
258 F.3d
1127, vacated and remanded.
282
BREYER, J., delivered the opinion for a unanimous Court.
Douglas G.
Benedon argued the cause for
petitioner.
With him on the briefs was
Gerald M. Serlin.
Robert G.
Schwemm argued the cause for
respondents.
With him on the brief were Elizabeth Brancart, Christopher
Brancart, and Greg Alexanian.
Malcolm L. Stewart argued the cause for the United States as
amicus curiae urging affirmance. With him on the brief were
Solicitor General Olson, Assistant Attorney General Boyd, Deputy
Solicitor General Clement, and David K. Flynn. *
JUSTICE BREYER delivered the opinion of the Court.
The Fair Housing Act forbids racial discrimination in respect to
the sale or rental of a dwelling. 82 Stat. 81, 42 U. S. C. §§
3604(b), 3605(a). The question before us is whether the Act imposes
personal liability without fault upon an officer or owner of a
residential real estate corporation for the unlawful activity of
the
corporation's employee or agent. We conclude that the
Act imposes liability without fault upon the employer in accordance
with traditional agency principles, i.
e., it normally
imposes vicarious liability upon the corporation but not upon its
officers or owners.
I
For purposes of this decision we simplify the background facts
as follows: Respondents Emma Mary Ellen Holley and
*Briefs of
amici curiae urging reversal were filed for
the California Association of Realtors by
June Babiracki
Barlow and
Neil Kalin; for the National Association of
Home Builders by
Christopher G.
Senior; and for the
National Association of Realtors by
Laurene K. Janik and
Ralph W Holmen.
Briefs of
amici curiae urging affirmance were filed for
the International Association of Official Human Rights Agencies by
Bruce V. Spiva and
Jessie K. Liu; and for the
National Fair Housing Alliance et al. by
John P. Relman, Meera
Trehan, and
Virginia A. Seitz.
283
David Holley, an interracial couple, tried to buy a house in
Twenty-Nine Palms, California. A real estate corporation, Triad,
Inc., had listed the house for sale. Grove Crank, a Triad salesman,
is alleged to have prevented the Holleys from obtaining the
house-and for racially discriminatory reasons.
The Holleys brought a lawsuit in federal court against Crank and
Triad. They claimed, among other things, that both were responsible
for a fair housing law violation. The Holleys later filed a
separate suit against David Meyer, the petitioner here. Meyer, they
said, was Triad's president, Triad's sole shareholder, and Triad's
licensed "officer/ broker," see Cal. Code Regs., tit. 10, § 2740
(1996) (formerly Cal. Admin. Code, tit. 10, § 2740) (requiring that
a corporation, in order to engage in acts for which a real estate
license is required, designate one of its officers to act as the
licensed broker); Cal. Bus. & Prof. Code Ann. §§ 10158, 10159,
10211 (West 1987). They claimed that Meyer was vicariously liable
in one or more of these capacities for Crank's unlawful
actions.
The District Court consolidated the two lawsuits. It dismissed
all claims other than the Fair Housing Act claim on statute of
limitations grounds. It dismissed the claims against Meyer in his
capacity as officer of Triad because (1) it considered those claims
as assertions of
vicarious liability, and (2) it believed
that the Fair Housing Act did not impose personal vicarious
liability upon a corporate
officer. The District Court
stated that "any liability against Meyer as an officer of Triad
would only attach to Triad," the corporation. App. 31. The court
added that the Holleys had "not urged theories that could justify
reaching Meyer individually."
Ibid. It later went on to
dismiss for similar reasons claims of vicarious liability against
Meyer in his capacity as the "designated officer/broker" in respect
to Triad's real estate license.
Id., at 52-55.
284
The District Court certified its judgment as final to permit the
Holleys to appeal its vicarious liability determinations. See Fed.
Rule Civ. Proc. 54(b). The Ninth Circuit reversed those
determinations.
258 F.3d
1127 (2001). The Court of Appeals recognized that "under
general principles of tort law corporate shareholders and officers
usually are not held vicariously liable for an employee's action,"
but, in its view, "the criteria for the Fair Housing Act" are
"different."
Id., at 1129. That Act, it said, "specified"
liability "for those who direct or control or have the right to
direct or control the conduct of another"-even if they were not at
all involved in the discrimination itself and even in the absence
of any traditional agent/principal or employee/employer
relationship, id., at 1129, 1131. Meyer, in his capacity as Triad's
sole owner, had "the authority to control the acts" of a Triad
salesperson.
Id., at 1133. Meyer, in his capacity as Triad's
officer, "did direct or control, or had the right to direct or
control, the conduct" of a Triad salesperson.
Ibid. And even
if Meyer neither participated in nor authorized the discrimination
in question, that "control" or "authority to control" is "enough
... to hold Meyer personally liable."
Ibid. The Ninth
Circuit added that, for similar reasons, Meyer, in his capacity as
Triad's license-related officer/broker, was vicariously liable for
Crank's discriminatory activity.
Id., at 1134-1135.
Meyer sought certiorari. We granted his petition, 535 U. S. 1077
(2002), to review the Ninth Circuit's holding that the Fair Housing
Act imposes principles of strict liability beyond those
traditionally associated with agent/principal or employee/employer
relationships. We agreed to decide whether "the criteria under the
Fair Housing Act ... are different, so that owners and officers of
corporations" are automatically and "absolutely liable for an
employee's or agent's violation of the Act"-even if they did not
direct or authorize, and were otherwise not involved in, the
unlawful discriminatory acts. Pet. for Cert. i.
285
II
The Fair Housing Act itself focuses on prohibited acts. In
relevant part the Act forbids "any person or other entity whose
business includes engaging in residential real estaterelated
transactions to discriminate," for example, because of "race." 42
U. S. C. § 3605(a). It adds that "[p]erson" includes, for example,
individuals, corporations, partnerships, associations, labor
unions, and other organizations. § 3602(d). It says nothing about
vicarious liability.
Nonetheless, it is well established that the Act provides for
vicarious liability. This Court has noted that an action brought
for compensation by a victim of housing discrimination is, in
effect, a tort action. See
Curtis v.
Loether, 415 U.
S. 189, 195-196 (1974). And the Court has assumed that, when
Congress creates a tort action, it legislates against a legal
background of ordinary tort-related vicarious liability rules and
consequently intends its legislation to incorporate those rules.
Monterey v.
Del Monte Dunes at Monterey, Ltd.,
526 U. S. 687,
709 (1999) (listing this Court's precedents that interpret Rev.
Stat. § 1979, 42 U. S. C. § 1983, in which Congress created "a
species of tort liability," "in light of the background of tort
liability" (internal quotation marks omitted)). Cf.
Astoria Fed.
Sav. &
Loan Assn. v.
Solimino, 501 U. S. 104,
108 (1991) ("Congress is understood to legislate against a
background of common-law ... principles");
United States v.
Texas, 507 U.
S. 529, 534 (1993) ("In order to abrogate a common-law
principle, the statute must 'speak directly' to the question
addressed by the common law").
It is well established that traditional vicarious liability
rules ordinarily make principals or employers vicariously liable
for acts of their agents or employees in the scope of their
authority or employment.
Burlington Industries, Inc. v.
Ellerth, 524
U. S. 742, 756 (1998) ("An employer may be liable for both
negligent and intentional torts committed by an employee within the
scope of his or her employment");
New Orleans, M., & C.
R. Co. v.
Hanning, 15 Wall. 649, 657 (1873)
286
("The principal is liable for the acts and negligence of the
agent in the course of his employment, although he did not
authorize or did not know of the acts complained of"); see
Rosenthal &
Co. v.
Commodity Futures Trading
Comm'n, 802 F.2d
963, 967 (CA7 1986) (" 'respondeat superior' ... is a doctrine
about employers ... and other principals"); Restatement (Second) of
Agency § 219(1) (1957) (Restatement). And in the absence of special
circumstances it is the corporation, not its owner or officer, who
is the principal or employer, and thus subject to vicarious
liability for torts committed by its employees or agents. 3A W.
Fletcher, Cyclopedia of the Law of Private Corporations § 1137, pp.
300-301 (rev. ed. 1991-1994); 10 id., § 4877 (rev. ed. 19972001).
The Restatement § 1 specifies that the relevant principal/agency
relationship demands not only control (or the right to direct or
control) but also "the manifestation of consent by one person to
another that the other shall act
on his behalf ... , and
consent by the other so to act." (Emphasis added.) A corporate
employee typically acts on behalf of the corporation, not its owner
or officer.
The Ninth Circuit held that the Fair Housing Act imposed more
extensive vicarious liability-that the Act went well beyond
traditional principles. The Court of Appeals held that the Act made
corporate owners and officers liable for the unlawful acts of a
corporate employee simply on the basis that the owner or officer
controlled (or had the right to control) the actions of that
employee. We do not agree with the Ninth Circuit that the Act
extended traditional vicarious liability rules in this way.
For one thing, Congress said nothing in the statute or in the
legislative history about extending vicarious liability in this
manner. And Congress' silence, while permitting an inference that
Congress intended to apply
ordinary background tort
principles, cannot show that it intended to apply an unusual
modification of those rules.
287
Where Congress, in other civil rights statutes, has not
expressed a contrary intent, the Court has drawn the inference that
it intended ordinary rules to apply. See,
e. g., Burlington
Industries, Inc., supra, at 754-755 (deciding an employer's
vicarious liability under Title VII based on traditional agency
principles);
Meritor Savings Bank, FSB v.
Vinson,
477 U. S. 57, 72
(1986) ("Congress wanted courts to look to agency principles for
guidance").
This Court has applied unusually strict rules only where
Congress has specified that such was its intent. See,
e. g.,
United States v.
Dotterweich, 320 U. S. 277, 280-281
(1943) (Congress intended that a corporate officer or employee
"standing in responsible relation" could be held liable in that
capacity for a corporation's violations of the Federal Food, Drug,
and Cosmetic Act of 1938, 52 Stat. 1040, 21 U. S. C. §§ 301-392);
United States v.
Park, 421 U. S. 658, 673 (1975)
(discussing, with respect to the Federal Food, Drug, and Cosmetic
Act, congressional intent to impose a duty on "responsible
corporate agents");
United States v.
Wise, 370 U. S. 405, 411-414
(1962) (discussing 38 Stat. 736, currently 15 U. S. C. § 24, which
provides: "[W]henever a corporation shall violate any of the ...
antitrust laws, such violation shall be deemed to be also that of
the individual directors, officers, or agents of such corporation
who shall have authorized, ordered, or done any of the acts
constituting in whole or in part such violation"); see also 46 U.
S. C. § 12507(d) ("If a person, not an individual, is involved in a
violation [relating to a vessel identification system], the
president or chief executive of the person also is subject to any
penalty provided under this section").
For another thing, the Department of Housing and Urban
Development (HUD), the federal agency primarily charged with the
implementation and administration of the statute, 42 U. S. C. §
3608, has specified that ordinary vicarious liability rules apply
in this area. And we ordinarily defer to an administering agency's
reasonable interpretation of a stat-
288
ute. Chevron U. S. A. Inc. v. Natural Resources Defense Council,
Inc.,
467 U. S.
837, 842-845 (1984); Skidmore v. Swift & Co.,
323 U. S. 134, 140
(1944).
A HUD regulation applicable during the relevant time periods for
this suit provided that analogous administrative complaints
alleging Fair Housing Act violations may be filed
"against any person who directs or controls, or has the right to
direct or control, the conduct of another person with respect to
any aspect of the sale ... of dwellings ... if that other
person, acting within the scope of his or her authority as employee
or agent of the directing or controlling person ... has engaged
... in a discriminatory housing practice." 24 CFR § 103.20(b)
(1999) (repealed) (emphasis added).
See
Gladstone, Realtors v.
Village of Bellwood,
441 U. S. 91, 107
(1979) (treating administrative actions under 42 U. S. C. § 3610
and civil actions under § 3613 as alternative, but parallel,
proceedings).
When it adopted the similar predecessor to this regulation (then
codified at 24 CFR § 105.13, see 53 Fed. Reg. 24185 (1988)), HUD
explained that it intended to permit a "respondent" (defined at 42
U. S. C. § 3602) to raise in an administrative proceeding any
defense "that could be raised in court." 53 Fed. Reg., at 24185. It
added that the underscored phrase was designed to make clear that
"a complaint may be filed against a directing or controlling person
with respect to the discriminatory acts of another only if the
other person was acting within the scope of his or her authority as
employee or agent of the directing or controlling person."
Ibid. (emphasis added). HUD also specified that, by adding the
words "acting within the scope of his or her authority as employee
or agent of the directing or controlling person," it disclaimed any
"intent to impose absolute liability" on the basis of the mere
right "to direct or control."
Ibid.; see 54 Fed. Reg. 3232,
3261 (1989).
289
Finally, we have found no convincing argument in support of the
Ninth Circuit's decision to apply nontraditional vicarious
liability principles-a decision that respondents do not defend and
in fact concede is incorrect. See Brief for Respondents 6, 10-11,
43 (conceding that traditional vicarious liability rules apply);
Brief for United States as
Amicus Curiae 8, 22. The Ninth
Circuit rested that decision primarily upon the HUD regulation to
which we have referred. The Ninth Circuit underscored the phrase"
'or has the right to direct or contro[l] the conduct of another
person.'" 258 F. 3d, at 1130. Its opinion did not explain,
however, why the Ninth Circuit did not read these words as modified
by the subsequent words that limited vicarious liability to actions
taken as "'employee or agent of the directing or controlling
person.'"
Id., at 1131. Taken as a whole, the regulation, in
our view, says that ordinary, not unusual, rules of vicarious
liability should apply.
The Ninth Circuit also referred to several cases decided in
other Circuits. The actual holdings in those cases, however, do not
support the kind of nontraditional vicarious liability that the
Ninth Circuit applied. See
Chicago v.
Matchmaker Real
Estate Sales Center, Inc., 982 F.2d
1086 (CA7 1992) (defendant corporation liable for the
acts of
its agents; shareholder directly, not vicariously,
liable);
Walker v.
Crigler, 976 F. 2d 900 (CA4 1992)
(owner of rental property liable for the discriminatory acts of
agent, the property's manager);
Marr v.
Rife,
503 F.2d
735 (CA6 1974) (real estate agency's owner liable for
the discriminatory acts of his agency's salespersons, but without
statement of whether agency was a corporation). Nor does the
language of these cases provide a convincing rationale for the
Ninth Circuit's conclusions.
The Ninth Circuit further referred to an owner's or officer's
"non delegable duty" not to discriminate in light of the Act's
"overriding societal priority." 258 F. 3d, at 1131, 1132 (citing
Chicago v.
Matchmaker Real Estate Sales Center, Inc.,
supra, at 1096-1097, and
Walker v.
Crigler,
supra, at
290
904-905). And it added that "[w]hen one of two innocent people
must suffer, the one whose acts permitted the wrong to occur is the
one to bear the burden." 258 F. 3d, at 1132.
"[A] nondelegable duty is an affirmative obligation to ensure
the protection of the person to whom the duty runs."
General
Building Contractors Assn., Inc. v.
Pennsylvania,
458 U. S. 375,
396 (1982) (finding no nondelegable duty under 42 U. S. C. § 1981).
Such a duty imposed upon a principal would "go further" than the
vicarious liability principles we have discussed thus far to create
liability "although [the principal] has himself done everything
that could reasonably be required of him," W. Prosser, Law of Torts
§ 71, p. 470 (4th ed. 1971), and irrespective of whether the agent
was acting with or without authority. The Ninth Circuit identifies
nothing in the language or legislative history of the Act to
support the existence of this special kind of liability-the kind of
liability that, for example, the law might impose in certain
special circumstances upon a principal or employer that hires an
independent contractor. Restatement § 214; see 5 F. Harper, F.
James, & O. Gray, Law of Torts §26.11 (2d ed. 1986); Prosser,
supra, § 71, at 470-471. In the absence of legal support, we
cannot conclude that Congress intended, through silence, to impose
this kind of special duty of protection upon individual officers or
owners of corporations-who are not principals (or contracting
parties) in respect to the corporation's unlawfully acting
employee.
Neither does it help to characterize the statute's objective as
an "overriding societal priority." 258 F. 3d, at 1132. We agree
with the characterization. But we do not agree that the
characterization carries with it a legal rule that would hold every
corporate supervisor personally liable without fault for the
unlawful act of every corporate employee whom he or she has the
right to supervise. Rather, which "of two innocent people must
suffer,"
ibid., and just when, is a complex matter. We
believe that courts ordinarily should determine that matter in
accordance with traditional principles of
291
vicarious liability-unless, of course, Congress, better able
than courts to weigh the relevant policy considerations, has
instructed the courts differently. Cf.,
e. g., Sykes, The
Economics of Vicarious Liability, 93 Yale L. J. 1231, 1236 (1984)
(arguing that the expansion of vicarious liability or shifting of
liability, due to insurance, may diminish an agent's incentives to
police behavior). We have found no different instruction here.
III A
Respondents, conceding that traditional vicarious liability
rules apply, see
supra, at 289, argue that those principles
themselves warrant liability here. For one thing, they say,
California law itself creates what amounts, under ordinary
common-law principles, to an employer/employee or principal/agent
relationship between (a) a corporate officer designated as the
broker under a real estate license issued to the corporation, and
(b) a corporate employee/salesperson. Brief for Respondents 6-8,
13-36. Insofar as this argument rests
solely upon the
corporate broker/officer's
right to control the
employee/salesperson, the Ninth Circuit considered and accepted it.
258 F. 3d, at 1134-1135. But we must reject it given our
determination in Part II that the "right to control" is
insufficient by itself, under traditional agency principles, to
establish a principal/agent or employer/ employee relationship.
B
The Ninth Circuit did not decide whether
other aspects of
the California broker relationship, when added to the "right to
control," would, under traditional legal principles and consistent
with "the general common law of agency,"
Burlington Industries,
Inc. v.
Ellerth, 524 U. S., at 754 (internal quotation
marks omitted), establish the necessary relationship. But in the
absence of consideration of that matter by the Court of Appeals, we
shall not consider it. See
Pennsylva-
292
nia Dept. of Corrections v.
Yeskey, 524 U. S. 206, 212-213
(1998) (" 'Where issues [were not] considered by the Court of
Appeals, this Court will not ordinarily consider them'" (quoting
Adickes v. S.
H. Kress &
Co., 398 U. S. 144, 147,
Respondents also point out that, when traditional vicarious
liability principles impose liability upon a corporation, the
corporation's liability may be imputed to the corporation's owner
in an appropriate case through a "'piercing of the corporate veil.'
"
United States v.
Bestfoods, 524 U. S. 51, 63, n. 9
(1998) (quoting
United States v.
Cordova Chemical Co. of
Michigan, 113 F.3d
572, 580
(CA6 1997)). The Court of Appeals, however, did
not decide the application of "veil piercing" in this matter
either. It falls outside the scope of the question presented on
certiorari. And we shall not here consider it.
The Ninth Circuit nonetheless remains free on remand to
determine whether these questions were properly raised and, if so,
to consider them.
***
The judgment of the Court of Appeals is vacated, and the case is
remanded for further proceedings consistent with this opinion.
It is so ordered.
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