Carnell Construction Corp. v. Danville Redevelopment & Housing Authority
745 F.3d 703
| 4th Cir. | 2014Background
- Carnell, a minority-owned corporation, contracted with the Danville Housing Authority for site preparation on the Blaine Square Project funded in part by HUD’s Hope VI program.
- Blaine Square, LLC, controlled by a housing authority affiliate, took over contract interests for tax purposes; Blaine had no agent relationship with the Housing Authority under the Development Services Agreement (DSA).
- Carnell alleged Title VI race discrimination and 42 U.S.C. § 1981 claims based on statements by housing officials and bid/contract practices, plus breach of contract claims.
- District court granted Blaine summary judgment on discrimination; later, after a third trial, the court reduced contract damages under the VPPA and limited certain damages for removal.
- A central issue on appeal was whether Carnell had standing to sue under Title VI as a minority-owned corporation and whether Blaine could be liable, along with evidentiary rulings on impeachment and VPPA damages; the court vacated some judgments and remanded for new trials on those claims.
- The opinion also discusses the impeachment evidence involving the McGuireWoods proposal and its impact on Carnell’s race discrimination claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing of Carnell under Title VI | Carnell has imputed racial identity via minority ownership | Carnell lacks standing as a corporation with no race | Carnell has standing under Title VI |
| Blaine's liability for discrimination | Blaine controlled project funding and thus liable | Blaine not a direct or vicarious discriminator under DSA | Blaine cannot be held liable for discrimination |
| Impeachment evidence admissibility | McGuireWoods proposal impeachment was relevant | Evidence unfairly prejudicial and improper for impeachment | Impeachment evidence admitted but constituted reversible error; remand for race claims only |
| VPPA damages cap applicability | VPPA caps damages but allows broader recovery for unpaid work | VPPA cap applies to all fixed-price contracts and limits damages | VPPA applies; damages limited; remand for damages within VPPA cap |
| Concealed damages for removal from project | Damages for lost profits, retainage, and consequential damages pleaded | Damages not properly pleaded as special damages | Damages for special/consequential losses not adequately pleaded; remand on damages only |
Key Cases Cited
- Village of Arlington Heights v. Metropolitan Housing Development Corp., 429 U.S. 252 (U.S. 1977) (standing; corporate injury in discrimination context)
- Thinket Ink Info. Res., Inc. v. Sun Microsystems, Inc., 368 F.3d 1053 (9th Cir. 2004) (corporate standing for civil rights claims)
- Hudson Valley Freedom Theater, Inc. v. Heimbach, 671 F.2d 702 (2d Cir. 1982) (standing for Title VI claims by corporation)
- Des Vergnes v. Seekonk Water Dist., 601 F.2d 9 (1st Cir. 1979) (Title VI/§1981 standing considerations)
- Triad Assocs., Inc. v. Chicago Hous. Auth., 892 F.2d 583 (7th Cir. 1989) (standing/§1983—corporate plaintiffs)