988 N.W.2d 694
Iowa2023Background
- The Des Moines Civil and Human Rights Commission used paired housing testers in 2015–16 and again in August 2017 to investigate alleged discrimination by Patrick and Mary Knueven, owners/landlords of rental properties.
- Testers included white (control) and non-white or Muslim (protected) callers/visitors; several recorded calls and one recorded in-person visit captured differential treatment (e.g., evasive answers, misrepresentations about availability, curt in-person behavior).
- The Commission charged the Knuevens with rent discrimination and "steering" (alleged "effective discouragement" of protected testers), relying on both the 2017 encounters and earlier 2015–16 testing as additional evidence.
- A Polk County jury found Patrick liable only for steering and imposed a $50,000 civil penalty; the district court admitted the earlier testing as motive evidence.
- On appeal the Iowa Supreme Court held the district court’s steering jury instruction was legally incorrect (it equated mere discouragement/encouragement with steering), found insufficient evidence under the correct standard, reversed the judgment, vacated the Commission’s attorney-fee award, and remanded for dismissal of the steering claim and consideration of fees for Patrick as the prevailing party.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper legal definition/jury instruction for "steering" | Commission: instruction requiring proof that defendant "discouraged" protected tester and "encouraged" control was sufficient to prove steering. | Patrick: steering requires affirmative steps to channel/guide someone to or away from properties or presenting information making a property undesirable because of protected status. | Court: Instruction was legally incorrect; steering requires action to channel/guide or present information that makes property undesirable based on protected status. |
| Sufficiency of evidence to submit steering to jury (JNOV) | Commission: testimony and recordings showing differential treatment are sufficient to support a steering verdict. | Patrick: even if tone differs, no affirmative act shown to deny/obstruct housing or to guide testers elsewhere, so insufficient proof. | Court: Under correct law, evidence was insufficient; reversed and directed entry of judgment for Patrick. |
| Admissibility of prior (2015–16) testing evidence | Commission: earlier tester encounters show motive/pattern and are admissible. | Patrick: earlier testing was stale (not within 300 days) and prejudicial; should be excluded. | Court: District court did not err admitting earlier testing as motive evidence under evidentiary rules; that ruling was not the basis for reversal. |
| Attorney fees award | Commission: as the prevailing party at trial, it was entitled to reasonable attorney fees under municipal code. | Patrick (and Mary): Commission is not prevailing on appeal; fees awarded below should be vacated and prevailing-party fees considered for Patrick. | Court: Vacated Commission’s fee award because judgment reversed; remanded to determine fees to Patrick as prevailing party. |
Key Cases Cited
- Havens Realty Corp. v. Coleman, 455 U.S. 363 (tester standing and that providing false/ misleading availability information supports a discrimination injury)
- Vill. of Bellwood v. Dwivedi, 895 F.2d 1521 (steering defined as channeling into/away from areas and examples of prohibited conduct)
- Eisenhauer ex rel. T.D. v. Henry Cnty. Health Ctr., 935 N.W.2d 1 (Iowa standard for reviewing jury instructions)
- State v. Coleman, 907 N.W.2d 124 (instructional errors require reversal if they mislead jury)
- Carter v. Carter, 957 N.W.2d 623 (standard for judgment notwithstanding the verdict/substantial-evidence review)
- Sanders v. Ghrist, 421 N.W.2d 520 (requirement that jury instructions give proper understanding of law)
- Burns v. Bd. of Nursing, 495 N.W.2d 698 (attorney-fee awards can be made only to prevailing party)
- Laufer v. Acheson Hotels, LLC, 50 F.4th 259 (use of testers in discrimination claims and standing)
- Guge v. Kassel Enters., Inc., 962 N.W.2d 764 (standard of review for attorney-fee awards)