STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION

MISCHERAL S. BOND and
PAIRRESH S. BOND, Complainants

MICHAEL'S FAMILY RESTAURANT, Respondent

PUBLIC ACCOMMODATION DECISION
ERD Case Nos. 9150755, 9151204

An administrative law judge for the Equal Rights Division of the Department of Industry, Labor and Human Relations issued a decision in the above-captioned matter on February 3, 1993. Respondent filed a timely petition for review by the commission and both parties submitted written arguments.

Based upon a review of the record in its entirety, the Labor and Industry Review Commission issues the following:

ORDER

The decision of the Administrative Law Judge (copy attached) is modified as follows:

1. Paragraphs 2 and 3 of the ORDER are deleted.

2. Paragraph 4 of the ORDER is deleted and the following paragraph is substituted therefor:

"2. That the respondent shall pay the complainants' reasonable attorney's fees in the amount of $5,110.85 and costs in the amount of $435.64, for a total of $5,546.49 in reasonable attorney's fees and costs associated with this matter. A check in the amount of $5,546.49 shall be made payable jointly to complainant Mischeral S. Bond and to Attorney Katherine Charlton and delivered to Ms. Charlton."

3. Paragraph 5 of the Order is deleted and the following paragraph is substituted therefor:

"3.Within 30 days of the expiration of time in which an appeal may be taken herein, respondent shall submit a compliance report detailing the specific action taken to comply with the commission's order. The compliance report shall be directed to the attention of Kendra DePrey, Labor and Industry Review Commission, P. O. Box 8126, Madison, Wisconsin 53708."

As modified, the decision of the administrative law judge shall stand as the FINAL ORDER herein.

Dated and mailed March 30, 1994
164

/s/ Pamela I. Anderson, Chairman

/s/ Richard T. Kreul, Commissioner

/s/ James R. Meier, Commissioner

MEMORANDUM OPINION

The respondent, a restaurant, is a place of public accommodation within the meaning of Section 101.22 (1m)(p), Stats. On March 19, 1991 the complainants, a mother and her six-year old daughter, who are black, were dining at the respondent's establishment. During the course of their meal the complainants heard the restaurant owner engage in loud discussion with certain restaurant patrons, in which the restaurant owner repeatedly used the term "nigger." Although the remarks were not personally directed at the complainants, they pertained to the respondent's negative perceptions of black people in general, and were made loudly enough for the complainants to hear plainly. Upon being placed on notice by one of the complainants that the complainants found these remarks objectionable, the respondent informed the complainants that if they did not like it they could leave. In essence, although the complainants were invited by the respondent to patronize the restaurant, a place of public accommodation, their use of the establishment was made contingent upon their willingness to suffer the offensive comments. Under the circumstances, the commission concludes that the respondent subjected the complainants to a racially hostile environment, thereby depriving them of the "full and fair enjoyment" of a place of public accommodation, in violation of Section 101.22 (9)(a)1, Stats.

Both parties have briefed the issues and the respondent has raised a number of arguments in support of reversal. First, the respondent argues that the testimony of the six-year old child should have been stricken from the record by the administrative law judge because that testimony was coached and rehearsed. Upon review of the record, the commission concludes that there is sufficient evidence to support the complainants' version of events without relying upon the child's testimony. Therefore, the commission need not decide whether the administrative law judge should have stricken the child's testimony from the record.

The respondent also makes the argument that, even if the complainants' version of events is accepted, the complainants could not be victims of harassment since the allegedly offensive remarks were not addressed to them personally. If this were a case in which the complainants simply overheard a private conversation involving other restaurant patrons, the commission might be prone to agree. However, the fact that racial epithets were not personally directed at the complainants is not the determinative factor in a hostile environment case. See Walker v. Ford Motor Co., 684 F.2d 1355, 1359, n.2 (11th Cir. 1982). The important factors here, as noted above, are that the offensive remarks were made by the restaurant owner herself, that they were made loudly enough for the complainants to hear while seated several tables away, that they pertained to the respondent's negative perceptions of black people in general and that, after one of the complainants voiced her objections, the respondent told her that if she did not like it she could leave. The commission believes that these factors outweigh the fact that the remarks were not personally addressed at the complainants.

The respondent also argues, without admitting that it used the word "nigger," that it could not have created a hostile environment by using the word, since that term is commonly used among black people and therefore, is not capable of causing offense when used by white people. The commission disagrees. The term "nigger" is commonly understood to be racially derogatory, (1)    particularly when used by white people in reference to black people. The word is intimidating by its nature and shows an intent to discriminate on the basis of race. Jones v. City of Boston, 738 F. Supp. 604, 605 (D. Mass. 1990). Further, the commission notes that a similar argument was recently considered and rejected by the Court of Appeals for the Seventh Circuit, which upheld a lower court's ruling that a supervisor's use of the word "nigger" contributed to a racially hostile working environment and that use of the term could not be excused on the ground that black employes sometimes used it themselves. Rodgers v. Western-Southern-Life Ins. Co., 792 F. Supp. 628 (E.D. Wis. 1992), aff'd, Case No. 93-1125, 1266 (7th Cir. 1993).

The respondent's next argument is that the complainant could not have been offended by the term "nigger" because she responded by calling the respondent a "honky bitch." Although at the hearing the respondent contended that the complainant made such remarks, the administrative law judge did not find this to be the case. Upon review of the record, the commission agrees that the more credible witness testimony suggests that the complainant did not make the alleged racial remarks. The commission believes, however, that even if the complainant had made the remarks in question, her actions in doing so would not serve to neutralize the respondent's racially derogatory remarks or to render them inoffensive to the complainants, just as an individual who is attacked by another does not cease to have been the victim of an attack by virtue of his punching back.

Finally, the respondent suggests that, even if it had made the remarks in question, its conduct is protected speech under the First Amendment. The commission is unaware of any authority which supports the respondent's argument. The respondent has not developed its argument fully, and the few sources which it has cited are unpersuasive. For example, the respondent cites State v. Mitchell, 169 Wis. 2d 153 (1992), for the proposition that the First Amendment protects not only free speech, but thought as well. In Mitchell, the Wisconsin Supreme Court held that the state's hate crimes statute, which provided for enhanced criminal penalties for crimes in which the victim is selected based on race, sex, or other prohibited basis, violated the First Amendment by chilling free speech. However, Mitchell, which was subsequently overturned by the United States Supreme Court, at 113 S.Ct. 2194 (1993), does not support the respondent's position. In fact, the Wisconsin Supreme Court took great pains in the Mitchell decision to distinguish the hate crimes law from antidiscrimination laws, noting that slight incursions into free speech are permissible where the overarching concern is protection from objective acts of bigotry in the employment marketplace and the adverse consequences of such acts on the civil rights of minorities. If anything, Mitchell lends support to the argument that the application of the public accommodations law in this case does not violate rights to free speech. The right to free speech is not absolute and the courts have consistently found that harassing speech in the work place is not protected by the First Amendment. See, Robinson v. Jacksonville Shipyards, 57 FEP Cases 971 (D.C. Fla. 1991) (verbal harassment not protected speech because it acts as discriminatory conduct in the form of a hostile work environment); Jew v. University of Iowa, 647 FEP Cases 659 (S.D. Iowa 1990) (rights of free speech do not immunize university from Title VII liability for a hostile work environment generated by sexual-based slander).

Similarly, the state's interest in providing nondiscriminatory public accommodations may justify slight incursions into free speech. See, Roberts v. United States Jaycees, 468 U.S. 609, 104 S.Ct. 3244 (1984). In Roberts, the plaintiffs alleged that the exclusion of women from full membership in the Jaycees violated the Minnesota Human Rights Act (an act similar to the Wisconsin public accommodations law), while the respondent argued that application of the act in its case would violate male members' rights of free speech and association. The Supreme Court rejected the respondent's position. The Court noted that the Minnesota Act does not aim at the suppression of speech and was not being applied for the purpose of hampering the defendant's ability to express its views. Rather, the Act reflected the state's strong historical commitment to eliminating discrimination and assuring its citizens equal access to publicly available goods and services, a goal unrelated to the suppression of expression, and one which plainly serves compelling state interests "of the highest order." Id. at 623-624. Like the statute at issue in Roberts, the Wisconsin public accommodations law reflects our state's commitment to eliminating discrimination and to assuring its citizens equal access to publicly available goods and services and serves a compelling state interest. The commission is satisfied that the application of the law in this case is not violative of the respondent's First Amendment rights to free expression.

As an additional matter, the respondent contends that, because it raised the First Amendment issue at the hearing, the administrative law judge was obligated to address that issue in her opinion and, because she did not, the matter should be remanded to the administrative law judge in order for her to do so. The respondent has not explained how it was prejudiced by the administrative law judge's failure to specifically comment on its First Amendment argument and the commission does not believe that any prejudice has occurred as a result. The commission interprets the administrative law judge's failure to refer to the respondent's argument in her decision as an indication that she did not find it persuasive. Further, contrary to the respondent's assertions, it is not the administrative law judge's duty to comment on all cited authority

An agency need not provide an elaborate opinion, so long as its findings of fact and conclusions of law are specific enough to inform the parties and the courts on appeal of the basis of the decision. The burden would simply be too onerous if an agency would be required to substantiate its reasons for not adopting all alternatives urged on it. Wisconsin Environmental Decade v. Public Service Comm., 98 Wis. 2d 682, 701-702, 298 N.W.2d 205 (Wis. App. 1980). In the instant case, the administrative law judge has set forth findings of fact and conclusions of law and has clearly laid out the reasoning behind her decision. She is not required to comment on all case authority cited by the respondent or to substantiate her reasons for not adopting each legal theory posited by the respondent. Finally, since the commission has considered and rejected the respondent's argument, the respondent's request for a remand is rendered wholly unnecessary.

Out-of-pocket expenses: The administrative law judge ordered the respondent to compensate the complainant in the amount of $15.34, an amount representing the cost of the complainants' meals and an accompanying "check-stop" fee, as well as for the cost of two counseling sessions attended by the child. Section 101.22 (10)(a)4 provides that, if the hearing examiner finds by a fair preponderance of the evidence that the respondent has violated sub. (9), the examiner shall order "such actions by the respondent as will effectuate the purpose of sub. (9) and this subsection." While the commission agrees that this language authorizes the administrative law judge to award out-of-pocket expenses, the commission respectfully disagrees with the administrative law judge's decision to award such expenses in this case.

"Out-of-pocket expenses" are amounts which are actually spent by the injured party as a necessary consequence of the prohibited discrimination and are in the nature of expenses of mitigation. See, Metropolitan Milwaukee Fair Housing Council v. Lawrence Goetsch (LIRC, December 6, 1991.) For example, in Lashay v. Walsh (LIRC, April 26, 1984), the commission affirmed an order for payment of specific amounts found to have been expended by a victim of housing discrimination on replacement housing, moving expenses, and transportation. In this case, the cost of the complainants' meals cannot be considered an out-of- pocket expense, within the generally accepted meaning of the term. The complainants did not incur the cost of the meals as a consequence of the discrimination. To the contrary, prior to the discriminatory incident the complainants ordered and ate a portion of the meals. After the offensive behavior occurred the complainants made the decision to leave the restaurant without paying for the meals, although they could have elected to stay and complete their meals or to take the remainder home with them. Thus, the cost of the meals was simply not an expense incurred in mitigation of the harm suffered. The commission also believes that granting the complainants reimbursement for the cost of the meals encourages the notion of "self help" for those who believe they have suffered a legal wrong. The complainants' actions in leaving the restaurant without paying their bill cannot be condoned, regardless of the discriminatory behavior that prompted them to do so. For these reasons, the commission declines to order reimbursement of the cost of the complainants' meals.

Similarly, the commission disagrees with that portion of the administrative law judge's order which requires the respondent to reimburse the complainants for the check-stop fee. The connection between the complainant's decision to stop payment on the check and the respondent's discriminatory behavior is highly tenuous, and beyond the purview of what is generally understood as an "out-of- pocket expense." The complainant did not incur the expense of the check-stop fee as a consequence of the respondent's discrimination, but as a result of her own indecision as to whether she should pay the restaurant bill. The commission, therefore, has modified the administrative law judge's order to disallow reimbursement for the cost of the meals and the stop-payment fee.

The final out-of-pocket expense awarded by the administrative law judge is the cost of two counseling sessions which the complainant's daughter attended. The commission does not determine whether the counseling sessions fall within the purview of "out-of- pocket" expenses, but disagrees with the administrative law judge's decision to grant reimbursement for this item on the grounds that the record is devoid of any evidence in substantiation of the expense. It is the complainants' obligation to establish their damages. Yet, the only evidence in the record regarding the two counseling sessions is the complainant's own testimony that her daughter suffered severe emotional harm as a result of her exposure to the respondent's racial epithets and that she, therefore, took the child to see a social worker at the Milwaukee Medical Complex Children and Adolescent Center. The complainants presented no expert testimony establishing the need for the counseling. Further, the complainants presented no bills for these sessions, indicating only that they cost "big dollars." The commission takes the view that the complainants, who were represented by counsel throughout these proceedings, and who knew that they would be demanding the cost of the counseling sessions, should have been prepared to present some competent- evidence establishing the damages claimed. Because the commission is unwilling to require the respondent to reimburse the complainants for the cost of undocumented and unsubstantiated expenses, the commission has modified the administrative law judge's order to remove the cost of the counseling sessions.

Attorney's fees: The administrative law judge properly ordered the respondent to pay the complainants' reasonable attorney's fees and costs associated with pursuing this matter. The administrative law judge required that the parties attempt to arrive at a stipulation with respect to these items. However, the file indicates that, after an exchange of correspondence, the parties were unable to arrive at any accord with respect to the fees and costs. Although the respondent now argues that no attorney fees were ordered by the administrative law judge and that, therefore, attorney fees must be considered denied, the administrative law judge's decision quite explicitly provides for attorney's fees and costs. Therefore, the only question before the commission is that of the proper amount to be awarded.

An attorney fee award should be based upon a "lodestars" figure obtained by multiplying the number of hours reasonably expended on the matter by a reasonable hourly rate. The complainants' attorney requests $7,892.25 in attorney fees. Three attorneys and two law clerks were involved in the matter and the fee request breaks down in the following manner:

A reasonable attorney fee is to be calculated according to the prevailing market rates in the relevant community and the burden is on the fee applicant to establish that the requested rates are in line with those prevailing in the community for similar services for lawyers of comparable skill, experience and reputation. Blum v. Stenson, 45 U.S. 886, 34 FEP Cases 417 (1984). In the affidavit in support of attorney fees the complainants' attorney states, in part, that she has more than eleven years experience in private practice with an emphasis in civil rights litigation, that she is a member in good standing of the Wisconsin Bar, that she is admitted to practice in Wisconsin federal courts and before the Seventh Circuit, and that she has practiced in southeastern Wisconsin since 1983 and is familiar with the usual and customary rates charged by attorneys. She contends that her own billing rate of $145.00 per hour is appropriate and that the billing rates for the other two attorneys involved are appropriate based upon their years of experience. The complainants' attorney also indicates that the firm's usual and customary rate for law clerks is $45 per hour.

Although the commission would prefer to see affidavits from other attorneys in the community establishing that the rates requested are in line with the prevailing market rate, the commission does not find that the rates requested by the complainants' attorneys are unreasonable. While the respondent suggests that the complainants' counsel should be treated as public defenders and, therefore, compensated at a rate of $40-50 per hour, the commission rejects this argument as illogical and ill-conceived. The respondent has made no credible showing that the hourly rates requested by the complainants' attorneys are outside of the prevailing rates in the Milwaukee community for similarly-qualified civil rights attorneys. The commission will not disturb the hourly rates requested in the fee application, but does adjust the rates requested for services performed by law clerk Meunier from $50 per hour to $45 per hour, in keeping with the fee applicant's statement that the law firm's going rate for law clerks is $45 per hour. The fee applicant also bears the burden of documenting the number of hours expended and should identify the general subject matter of time expenditures, as hours not reasonably expended may be excluded. Hensley v. Eckerhardt, 461 U.S. 424, 31 FEP Cases 1169 (1983). Upon review of the fee application, the commission believes that the number of hours expended on this matter by the complainants' attorneys is excessive. For instance, the fee applicant has requested reimbursement for approximately 33 hours spent researching and drafting a post- hearing brief to the administrative law judge. Subsequently, she requests reimbursement for another 23.25 hours spent researching and drafting the reply brief to the commission, although the brief to the commission, which is ten pages in length, covers much of the same territory as the complainants' post-hearing brief. In the commission's estimation, the brief to the commission did not reflect an additional 23 or more hours of work, nor did the original brief require 33 hours to prepare. The commission also notes numerous instances in which multiple activities are contained in a single entry, as well as numerous entries for "research" or "telephone conference with client" which do not identify the subject matter of the research or conference.

Where the documentation of hours is inadequate, the fee award may be reduced accordingly. Id. at 433. Overly general listed activities have been disallowed because the court has no means of evaluating the reasonableness of the activities. Daniels v. Pipefitters' Assn., 53 FEP Cases 1677 (N.D. Ill. 1990). Further, where activities are grouped, time should be appropriately apportioned. Otherwise, the court is left with the choice of estimating a portion of the time for a particular activity, or excluding the entire entry. Claus by Claus v. Goshert, 657 F. Supp. 237 (N.D. Ind. 1987). As noted, the commission believes that the expenditure of time for some of the activities contained in the fee statement appears, on its face, to be excessive. However, because the fee applicant has not adequately documented her time expenditures, the commission is unable to assess the reasonableness of each expenditure and, consequently, cannot reduce the attorney's fee award based upon a specific analysis of the reasonableness of each item contained therein. Further, the complainants' attorney has not identified which attorney or law clerk performed what activity, rendering it impossible to reduce individual time expenditures based on specific hourly rates. Thus, the commission reduces the number of hours expended in an across-the-board fashion, rather than on an individually itemized basis. The commission concludes that an approximate one- third reduction (or 668 of the hours for which reimbursement is requested by the complainants) is warranted. Reducing the number of hours reasonably expended in this manner, and reducing the hourly rate for law clerk Meunier to $45 per hour, the commission arrives at the following formulation for the calculation of the "lodestar" figure:

The complainants have also requested reimbursement in the amount of $435.64 for costs associated with this matter. The respondent has raised no objection to the costs requested by complainants' and the commission finds them to be reasonable. Therefore, the commission awards the complainants a total of $5,546.49 in costs and attorney's fees associated with this matter.

Civil forfeiture: Pursuant to Section 101.22 (10)(d) of the public accommodations act, under which a person who wilfully violates sub. (9) of the statute shall, for the first violation, forfeit not less than $100 nor more than $1,000, the administrative law judge assessed a penalty forfeiture against the respondent in the amount of $1,000. However, as a matter of law, the commission must disagree with the administrative law judge's decision to assess the penalty in this case and, therefore, has modified the order to remove the civil forfeiture.

The public accommodations statute is both remedial and penal in nature, in that it provides remedies to the injured party as well as forfeitures against the party committing the wrong. Where statutes are both penal and remedial, the courts separate the penal provision from the remedial, giving the provisions establishing penalties strict construction and the remainder of the act a liberal construction. Madison v. Hyland, Hall and Co., 73 Wis. 2d 364, 373, 243 N.W.2d 422 (1976). As cited above, the penalty provision under public accommodations law provides for a civil forfeiture for one who wilfully violates the law. Because section 101.22(10)(d), Stats., must be interpreted strictly, a strict interpretation must be given to the term "wilfully." The question, then, is how the term "wilfully" should be construed and whether the respondent's actions can be considered "wilful" within the meaning of the statute. Although a finding of discrimination generally implies a finding of intent, it is not enough to simply find that every act of discrimination is an inherently "wilful" act. The United States Supreme Court has construed the "wilfulness" provision of the Age Discrimination in Employment Act as requiring proof of knowing or reckless disregard as to whether actions violate the law. Transworld Airlines, Inc. v. Thurston, 469 U.S. 111 (1985). For instance, "wilfulness" has been found in cases in which a party ignored legal advice to the effect that its planned actions were unlawful. See, Kossman v. Calumet Co., 800 F.2d 697 (7th Cir. 1986), cert. denied, 107 S.Ct. 1294 (1987). Applying this principal, in Metropolitan Milwaukee Fair Housing Council, supra, the commission found that a landlord's use of the term "Christian" in a housing ad, although expressing a discriminatory preference for a Christian, was not "wilful" where the record contained no evidence to suggest that the landlord knew of the existence of the Open Housing Act or of the potential illegality of his conduct under the Act.

In the instant case, the commission believes that the respondent intentionally used the word "nigger," knowing that the word was improper and could reasonably be construed by a listener as an offensive racial epithet. However, like the landlord in Metropolitan Milwaukee, there is no evidence to suggest that the respondent was aware of the existence of the public accommodations law or knew that her actions in using the racial epithets were in violation of that statute. The record contains nothing to suggest that the respondent had ever been the subject of a prior similar complaint, or would otherwise have been aware that her actions were prohibited by law. Further, given that this was a case of first impression for the commission, the commission cannot conclude that the respondent knew or should have known that her actions violated the law. Therefore, while the respondent's conduct amounted to a violation of the public accommodations law, the commission declines to assess a forfeiture penalty and modifies the administrative law judge's order accordingly.

cc:
Katherine L. Charlton
Peter N. Flessas

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Footnotes:

(1)( Back ) Webster's Seventh New Collegiate Dictionary defines "nigger" as "1: Negro - usu. taken to be offensive. 2: a member of any darkskinned race - usu. taken to be offensive."