WASHINGTON — An Alabama rental management company agreed Thursday to pay a record $1.8 million to settle Justice Department allegations that it discouraged blacks from living in its apartments.
In a lawsuit, the department's civil rights division charged that Mitchell Brothers Inc. and two of its managers repeatedly violated the Fair Housing Act by intentionally discriminating against blacks seeking rentals at nine apartment buildings in Mobile.
Under the agreement, $1.475 million will be divided among identified victims of discrimination, $250,000 will be used to establish a private fair-housing group in Mobile to educate people about the law, and $75,000 in civil penalties will go to the Treasury.
The lawsuit and an agreement to settle it were filed in U.S. District Court in Mobile on Thursday. The settlement also resolves a similar lawsuit filed in 1995 by 17 blacks who unsuccessfully sought housing at Mitchell Brothers properties.
The company, which manages upscale apartments, is owned by brothers Mayer and Abraham Mitchell, members of a prominent Mobile family.
The private plaintiffs, from a variety of backgrounds, were pleased that the settlement will bring a fair-housing office to Mobile, said their lawyer, Dan Hannan. "These were good people--hard workers making hard money--the kind you would want living at your apartments, but they were denied housing because of their skin color," he said.
While agreeing to the $1.8-million settlement, the largest ever obtained by the Justice Department in a housing case based on racial bias, the defendants nevertheless denied violating any laws.
In Mobile, spokesman Donald Briskman said the company settled to avoid a costly legal battle.
The government alleged that the defendants routinely told blacks that no apartments were available even though they were and that they showed persistent prospective black tenants the least desirable units.