Race Bias Charge Could Stick on Housing Body

(CN) - A Virginia housing authority must face racial-discrimination charges brought by a minority-owned business that worked on a development project, a federal judge ruled.

Hope VI is a federal grant program that aims to eradicate "severely distressed public housing." Phase four of the Blaine Square Hope VI Project in Danville, Va., would build 40 single family and duplex housing units. The U.S. Department of Housing and Urban Development partly funded the plan.

But after the Danville Redevelopment & Housing Authority (DRHA) awarded the site-preparation bid to Carnell Construction Corp. in May 2008, the company says it was immediately "singled out and discriminated against due to its status as a minority contractor."

"Carnell notes that immediately after learning that Michael Scales, the president of Carnell, is African-American and that Carnell had submitted the lowest bid, [Hope VI director] Cedric Ulbing asked Scales if Carnell wanted to withdraw its bid," the Danville-based federal court summarized. "After Scales declined to withdraw the bid, Ulbing stated in an email to Gary Wasson that it had been his experience that minority contracts pay their employees less, and that African-American employees traditionally accept lower wages."

"Carnell's costs ultimately exceeded expectations and the parties disagree as to who should bear responsibility," the court continued. "DRHA argues that Carnell failed to perform according to the plans and specifications and pursuant to the work schedule. Carnell argues that DRHA changed the plans without informing Carnell and that Carnell's work was accurate based on the plans the contractor was originally given."

The Danville housing authority ultimately accused Carnell of contractor default.

Though a jury awarded Carnell more than $3 million for racial discrimination in February 2011, the authority persuaded U.S. District Judge Jackson Kiser to order a new trial. The organization cited evidence that Scales "testified falsely regarding Carnell's ability to perform work for the Virginia Department of Transportation subsequent to its dispute with DRHA."

Transferred to U.S. District Judge Glen Conrad's docket, Carnell won leave to file a third amended complaint.

Last week, Conrad said the evidence supported "a finding of race discrimination, including instances of disparate treatment, evidence suggestive of pretext, evidence that DRHA officials covered up Carnell's initial complaint of race discrimination, and DRHA's shifting explanations for Carnell's termination from the project."

Conrad also upheld Carnell's retaliation claim, citing the trial testimony of Sylvester Mayo, a member of the housing authority's board of commissioners, who said that he "really wanted them to go ahead and leave" after Carnell played "the race card," the 47-page decision states.

"While DRHA now maintains that it was unreasonable for Carnell to believe that it was being singled out because of race instead of its 'poor performance,' the court is convinced that a reasonable jury could find to the contrary," Conrad wrote.

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