Gilead Community Services, Inc. v. Town of Cromwell

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22-1209
Gilead Community Services, Inc. v. Town of Cromwell
United States Court of Appeals
For the Second Circuit
August Term 2023
Argued: February 13, 2024
Decided: August 12, 2024
No. 22-1209
G ILEAD COMMUNITY S ERVICES, INC., C ONNECTICUT F AIR H OUSING
C ENTER , INC.,
Plaintiffs-Appellees,
v.
T OWN OF C ROMWELL ,
Defendant-Appellant,
E NZO F AIENZA, INDIVIDUALLY AND IN HIS OFFICIAL CAPACITY AS
MAYOR OF THE TOWN OF C ROMWELL , ANTHONY SALVATORE ,
INDIVIDUALLY AND IN HIS OFFICIAL CAPACITY AS TOWN MANAGER OF
THE TOWN OF C ROMWELL , JILLIAN MASSEY , IN HER OFFICIAL CAPACITY
AS THE ZONING E NFORCEMENT O FFICER OF THE TOWN OF C ROMWELL ,
Defendants.

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Appeal from the United States District Court
for the District of Connecticut
No. 17-cv-627, Bolden, Judge.
Before: Parker, Lynch, and Nathan, Circuit Judges.
The Town of Cromwell appeals from a judgment of the United
States District Court for the District of Connecticut (Bolden, J.) after a
jury verdict finding it liable for violating the Fair Housing Act and
Americans with Disabilities Act and awarding compensatory and
punitive damages against it. On appeal, the town argues that the
district court erred in applying a motivating-factor (rather than but-
for) causation test to claims under the Fair Housing Act, and in
subjecting a municipality to vicarious liability and punitive damages
under the Fair Housing Act. It also argues that the amount of punitive
damages assessed against it is unconstitutionally excessive. We reject
each of Cromwell’s arguments regarding the Fair Housing Act, but
agree that the punitive damages award was unconstitutionally
excessive.
First, Cromwell’s causation argument is squarely foreclosed by
binding Circuit precedent, which no intervening Supreme Court
decision has effectively overruled. Second, Cromwell provides no
basis to exempt municipalities from the vicarious liability that is
generally available under the Fair Housing Act. Third, the text of the
Fair Housing Act unambiguously allows for punitive damages with
no exception for municipal defendants and we decline to create a
judicial carveout from the statute where Congress has not created one.
Fourth and finally, we conclude that the punitive damages award in
this case is unconstitutionally excessive. Despite Cromwell’s
reprehensible conduct, the ratio of punitive to compensatory

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damages is too high, and the disparity between the punitive damages
and the civil fines available for similar conduct is too great, for the
award to comport with due process. We therefore AFFIRM in part,
VACATE in part, and REMAND for further proceedings.
Thomas R. Gerarde, Howd &
Ludorf, LLC, Hartford, CT, for
Defendant-Appellant.
Tara K. Ramchandani (Yiyang
Wu, Valerie Comenencia
Ortiz, Gemma Donofrio, on the
brief), Relman Colfax PLLC,
Washington, D.C., for
Plaintiffs-Appellees.
NATHAN , Circuit Judge:
This case involves the Fair Housing Act, a landmark civil rights
statute passed by Congress as a vital tool for preventing, rooting out,
and deterring housing discrimination in its various forms. A jury
found the town of Cromwell, Connecticut liable for a campaign of
discriminatory conduct meant to keep a group home for individuals
with mental health disabilities from opening in the town, in violation
of the Fair Housing Act (FHA) and Americans with Disabilities Act
(ADA). The jury assessed both compensatory and punitive damages
against Cromwell for its actions. On appeal, the town argues that the
district court wrongly applied a motivating-factor causation test to
claims under the FHA and wrongly subjected it to vicarious liability

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and punitive damages under the FHA. It further argues that the
amount of punitive damages awarded by the jury is
unconstitutionally excessive. We agree that the punitive damages
award is unconstitutionally excessive, but affirm the district court in
all other respects.
To begin, binding Circuit precedent establishes that
motivating-factor, rather than but-for, causation applies to disparate
treatment and retaliation claims under the FHA. Cromwell argues
that these precedents have been abrogated by intervening Supreme
Court decisions interpreting other civil rights statutes. But none of
the decisions the town points to undercut the law of our Circuit
regarding the FHA in particular. The town fails to show that our
precedents have been abrogated.
We also reject Cromwell’s other statutory arguments. It is
undisputed that the FHA generally incorporates the traditional
principle of vicarious liability, and Cromwell provides no persuasive
reason for exempting municipalities from that form of liability.
Similarly, the FHA’s text unambiguously permits private plaintiffs to
recover punitive damages and Cromwell points to no basis in the
statute for carving out an exception for municipal defendants.
On the other hand, we agree with Cromwell that the punitive
damages award in this case is unconstitutionally excessive. Although
Cromwell engaged in highly reprehensible conduct, the ratio between
the punitive damages and the actual and potential harms resulting
from that conduct is simply too high to comport with due process.
Further, the available fines for comparable conduct support the
conclusion that the award here is excessive. The three guideposts

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established by the Supreme Court for review of punitive damages
demonstrate that the award in this case violates due process.
Accordingly, we AFFIRM in part and VACATE in part the
judgment of the district court, and REMAND for further proceedings.
BACKGROUND
This case comes to us after a jury found Defendant-Appellant,
the Town of Cromwell, liable for violating the FHA and ADA.
Plaintiffs-Appellees Gilead Community Services, Inc. (Gilead) and
Connecticut Fair Housing, Inc. sued the town and several of its
officials based on a pattern of discrimination and retaliation after
Gilead attempted to open a group home for individuals with mental
health disabilities in Cromwell. At trial, they presented evidence
from which the jury could reasonably have found the following.
Gilead purchased a house in Cromwell to be used as a group
home for people with mental health disabilities in March 2015. Soon
after, town residents created a Facebook group in which they voiced
their opposition to the group home. Cromwell’s town manager,
mayor, and other officials met with Gilead’s CEO regarding the
reaction and recommended holding a public forum to respond to
residents’ concerns.
Gilead agreed, but the boisterous forum did little to calm the
growing opposition among town residents and, as became apparent,
town officials. The town manager spoke at the forum, opining that
the number of group homes in the town should be limited like liquor
stores, while a resident compared the prospective group home
residents to mass shooters. The day after the forum, Cromwell’s

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mayor then issued a press release requesting that Gilead abandon
their plans for the group home, expressly citing the concerns raised at
the forum. The mayor and town manager also demanded
information about the mental health diagnoses of the group home’s
prospective residents, while admitting that they would not typically
require this sensitive information from any other individuals who
happened to be moving to Cromwell.
In May 2015, Gilead learned that the town had gone a step
further, taking matters into its own hands. The town had petitioned
Connecticut’s Department of Public Health to reject a license for
Gilead to operate the group home, even though—as the Department
of Public Health confirmed—Gilead did not actually require the
license. The town then pressed on with its efforts to keep Gilead’s
group home from opening, unsuccessfully seeking reconsideration
from the department. Testimony from Cromwell officials suggested
that the filing of this petition was in fact motivated by the controversy
in town over Gilead’s group home.
Following the unsuccessful Department of Public Health
petition, the town tried a new approach. It sent Gilead a cease-and-
desist letter claiming that the group home violated zoning regulations
and could not be operated without obtaining certain zoning permits,
while threatening to fine Gilead if it operated the home without the
permits. The town then agreed to withdraw the cease-and-desist
letter on the condition that Gilead move only two residents into the
home, fewer than Gilead needed for the home to operate successfully.
Soon after, Cromwell’s town assessor informed Gilead that its
tax exemption application for the home required additional

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documentation, a request that Gilead had never before encountered
with its other homes. Gilead provided the documents, but its tax
exemption application was denied nonetheless.
Gilead then experienced two concerning incidents with the
Cromwell police. First, after one of the group home’s residents left
the home unannounced, Gilead called the police for assistance in
locating him. Gilead later learned that the police leaked sensitive
health information about this individual—information learned from
this interaction—to the media. Second, after Gilead’s group home
was vandalized, the police failed to fully investigate the incident,
closing the case within an hour. These two instances confirmed to
Gilead that its home for residents with disabilities was not welcome
in the town of Cromwell.
Due to all of these events and the town’s continued opposition,
Gilead decided to close the group home in August 2015. Cromwell
officials celebrated the decision in an official press release,
applauding Gilead for “listening to the concerns of Town Officials”
and recognizing that “this was not the most favorable neighborhood
for them to establish a community residence.” App’x at 850.
This was not the end of the matter, however. Approximately
nine months later, before Gilead filed this lawsuit, Cromwell’s town
manager warned Gilead’s CEO that continuing to fight over the
group home could endanger Gilead’s tax exemption for a separate
property in Cromwell. And indeed, Cromwell then denied the other
property’s tax exemption at the next opportunity, which Gilead
eventually had reinstated through legal action.
Plaintiffs sued the town of Cromwell and its officials for

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disability discrimination and retaliation under the FHA, ADA, and
the Rehabilitation Act of 1973. Specifically, they alleged that
Defendants violated Section 804(f)(1) and (2) of the FHA by making
housing unavailable and discriminating in the terms and conditions
of housing on the basis of disability; violated Section 804(c) of the
FHA by making statements indicating a discriminatory preference in
housing on the basis of disability; violated Section 817 of the FHA by
interfering with and retaliating for Gilead’s exercise of its rights under
the FHA; and discriminated on the basis of disability in violation of
Title II of the ADA and Section 504 of the Rehabilitation Act. The
claims against the town officials were dismissed before trial.
A jury found Cromwell liable on the FHA and ADA claims and
assessed $181,000 in compensatory damages and $5 million in
punitive damages. The district court then denied Cromwell’s
renewed motion for judgment as a matter of law, rejecting various
legal arguments regarding liability under the FHA and determining
that the $5 million award of punitive damages was not
unconstitutionally excessive. Cromwell timely appealed.
DISCUSSION
On appeal, Cromwell contests its liability only under the FHA,
raising several arguments about the proper interpretation of the
statute, as well as the constitutionality of the punitive damages award
in this case. We review questions of law, including questions of
statutory interpretation, de novo. See, e.g., United States v. Santos, 541
F.3d 63, 67 (2d Cir. 2008). We likewise review de novo the
constitutionality of a punitive damages award. See Cooper Indus., Inc.

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v. Leatherman Tool Grp., 532 U.S. 424, 431 (2001).
I. Causation
Cromwell’s first argument is that the district court erred in
applying a motivating-factor, rather than but-for, causation test to
determine liability under the FHA. According to the town, the court
should have instructed the jury to determine whether the disability of
Gilead’s clients was the but-for cause of the town’s actions opposing
the group home, rather than merely a significant factor in the town’s
decision to take those actions. The town acknowledges that this
argument is squarely foreclosed by Circuit precedent, but argues that
recent Supreme Court decisions have effectively overruled our
precedent. We conclude we remain bound by our precedent.
At the outset, we must approach Cromwell’s statutory
argument with somewhat more specificity than the town does itself.
The town argues generally that but-for causation should apply to
claims under the FHA, but the claims in this case arise under three
distinct statutory provisions of the FHA, each with its own text and
governing precedent. Cromwell was found liable not just under
Section 804(f) of the FHA for “discriminat[ing] . . . because of a
handicap,” 42 U.S.C. § 3604(f)(1), (2), but also for violating Section
804(c)’s prohibition on making any statement “that indicates any
preference, limitation, or discrimination based on . . . handicap . . . or
an intention to make any such preference, limitation, or
discrimination,” id. § 3604(c). The jury also found that Cromwell had
”coerce[d], intimidate[d], threaten[ed], or interfere[d] with” Gilead
“in the exercise or enjoyment of, or on account of [Gilead’s] having
exercised or enjoyed” its rights under Section 817 of the FHA. Id.

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§ 3617.
All of Cromwell’s arguments, which focus on the necessary
causal link between a party’s protected identity or status and an FHA
defendant’s conduct, simply do not map onto Section 804(c) of the
FHA. That is because, by its plain text, Section 804(c) is violated even
absent any discriminatory transactions or conduct. To be liable, a
defendant must simply “make, print, or publish, or cause to be made,
printed, or published any notice, statement, or advertisement, with
respect to the sale or rental of a dwelling that indicates any preference,
limitation, or discrimination based on . . . handicap,” whether or not
the defendant proceeds to carry out that discriminatory preference.
Id. § 3604(c). The question under Section 804(c), as this Circuit has
long held, is not what caused or motivated any conduct by a
defendant but whether a defendant’s statement “suggests to an
ordinary reader that a particular [protected status or identity] is
preferred or dispreferred[.]” Ragin v. New York Times Co., 923 F.2d
995, 999 (2d Cir. 1991); see also United States v. Space Hunters, Inc., 429
F.3d 416, 424 (2d Cir. 2005) (emphasizing the reach of Section 804(c)’s
“plain language, which applies broadly”).
Cromwell provides no reason to deviate from this well-
established standard and never articulates how but-for causation
would figure into the determination of whether a statement
“indicates any preference” in violation of Section 804(c). The kinds of
causation arguments that the town advances simply do not apply to
this statutory section, and we easily affirm the judgment as to this
claim.
Cromwell’s arguments are more squarely directed at Sections

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804(f) and 817 of the FHA. The disparate treatment provision, Section
804(f), makes it unlawful to “discriminate in the sale or rental, or to
otherwise make unavailable or deny, a dwelling to any buyer or
renter because of a handicap,” or to “discriminate against any person
in the terms, conditions, or privileges of sale or rental of a dwelling,
or in the provision of services or facilities in connection with such
dwelling, because of a handicap.” 42 U.S.C. § 3604(f)(1), (2). Section
817 broadly prohibits various forms of retaliation, by making it
unlawful “to coerce, intimidate, threaten, or interfere with any person
in the exercise or enjoyment of, or on account of his having exercised
or enjoyed . . . any right granted or protected by [the FHA].” Id.
§ 3617.
The binding precedent of our Circuit establishes that a plaintiff
bringing a disparate treatment claim for discrimination under Section
804(f) of the FHA must show that a protected characteristic was one
motivating factor causing the defendant’s actions taken against the
plaintiff. See Cabrera v. Jakabovitz, 24 F.3d 372, 383 (2d Cir. 1994)
(noting the plaintiff’s burden is “to prove that the adverse action was
motivated, at least in part, by an impermissible reason”); Robinson v.
12 Lofts Realty, Inc., 610 F.2d 1032, 1042-43 (2d Cir. 1979) (emphasizing
that the FHA is violated “if race is even one of the motivating factors”
behind a defendant’s conduct); see also LeBlanc-Sternberg v. Fletcher, 67
F.3d 412, 425 (2d Cir. 1995) (noting that a prima facie case under the
FHA requires that an impermissible consideration “was a significant
factor” in the decision taken) (quotation marks omitted).
Our precedent also makes clear that a plaintiff alleging
retaliation under Section 817 must show that a defendant “took

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adverse action against the plaintiff, and a causal connection exists
between the protected activity and the adverse action,” which is
satisfied when “retaliatory motive played a part” in causing the
adverse action. Reg’l Econ. Cmty. Action Program, Inc. v. City of
Middletown, 294 F.3d 35, 54 (2d Cir. 2002) (emphasis added and
quotation marks omitted), superseded by statute on other grounds; see also
Austin v. Town of Farmington, 826 F.3d 622, 630-31 (2d Cir. 2016) (citing
favorably a decision holding that a Section 817 plaintiff “must
demonstrate that intentional discrimination motivated defendants’
conduct, at least in part” (quotation marks omitted)).
Cromwell acknowledges that our prior decisions would
foreclose its arguments under Sections 804(f) and 817, but claims that
intervening decisions of the Supreme Court have effectively
overruled our precedents. The town points to three Supreme Court
decisions interpreting similar language in other federal
antidiscrimination laws to require a but-for causal link between
protected characteristics and a defendant’s conduct. See Comcast Corp.
v. Nat’l Ass’n of Afr. Am.-Owned Media, 589 U.S. 327, 329 (2020)
(concerning claims under 42 U.S.C. § 1981); Univ. of Texas Sw. Med.
Ctr. v. Nassar, 570 U.S. 338, 351 (2013) (concerning Title VII retaliation
claims); Gross v. FBL Fin. Servs., Inc., 557 U.S. 167, 169-70 (2009)
(concerning claims under the Age Discrimination in Employment
Act).
Cromwell argues that we should reach the same result under
the FHA. True, there may be some circumstances in which our
precedents regarding one statute are effectively overruled by
Supreme Court decisions interpreting other statutes. See Natofsky v.

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City of New York, 921 F.3d 337, 347 (2d Cir. 2019). But this Court
rejected a near-identical argument as recently as 2016, concluding that
Gross did not demand that we jettison our FHA precedent. See Mhany
Mgmt., Inc. v. County of Nassau, 819 F.3d 581, 615-16 (2d Cir. 2016). The
conclusion of the Court in Mhany was technically dicta. See id. at 616
(“Accordingly, even if we overlooked Garden City’s present
forfeiture, we would adhere to our existing precedent.”).
Nonetheless, this means that Cromwell asks us not simply to depart
from our decades-long precedent, but to deviate also from our Court’s
recent reaffirmation of that precedent following Gross.1 We see no
reason to depart from those multiple layers of precedent.
Our precedent is “binding authority from which we cannot
deviate,” unless and until it is “overruled either by an en banc panel
of our Court or by the Supreme Court.” United States v. Peguero, 34
F.4th 143, 158 (2d Cir. 2022) (quotation marks omitted). That
important principle finds a narrow exception when “an intervening
Supreme Court decision casts doubt on the prior ruling—that is,
where the Supreme Court’s conclusion in a particular case broke the
link on which we premised our prior decision.” Id. (cleaned up). “For
the exception to apply . . . there must be a conflict, incompatibility, or
inconsistency between this Circuit’s precedent and the intervening
Supreme Court decision.” United States v. Afriyie, 27 F.4th 161, 168 (2d
Cir. 2022) (cleaned up) (noting that overruling prior panel decisions
1 Even more recently—and after both Nassar and Comcast—our Court relied on
Mhany in applying a motivating-factor causation test under the FHA, albeit in a
non-precedential summary order. See Perricone-Bernovich v. Tohill, 843 F. App’x
419, 421 (2d Cir. Apr. 16, 2021) (summary order).

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“is perilous,” in part because it “may diminish respect for the
authority of three-judge panel decisions”). We “resort to this
exception cautiously,” since “less-than-stringent application of the
standards for overruling prior decisions not only calls into question a
panel’s respect for its predecessors but also increases uncertainty in
the law by revisiting precedent without cause.” Peguero, 34 F.4th at
158 (quotation marks omitted).
Stringent application of this principle demands that we adhere
to our prior decisions interpreting the FHA. None of the Supreme
Court decisions on which Cromwell relies address the FHA. And in
fact, they all counsel that we must interpret individual statutes on the
basis of their particular text, structure, and history, and caution
against unreflective application of rules from one statute to another.
See Gross, 557 U.S. at 174-75; Nassar, 570 U.S. at 351-362; Comcast, 589
U.S. at 330-35, 341; cf. Woods v. START Treatment & Recovery Centers,
Inc., 864 F.3d 158, 165-69 (2d Cir. 2017) (rejecting applicability of but-
for causation standard to Family Medical Leave Act retaliation claim
because of that statute’s particular text). Neither their holdings nor
their reasoning, then, directly conflict with our precedent on the FHA.
Taking seriously our adherence to Circuit precedent, we therefore
conclude that such precedent remains “binding authority from which
we cannot deviate.” Peguero, 34 F.4th at 158.
Accordingly, the district court did not err in applying a
motivating-factor causation to Gilead’s disparate treatment and
retaliation claims under the FHA consistent with our precedent.
II. Vicarious Liability
Cromwell also argues that the district court wrongly allowed

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the jury to find it liable for the actions of its officials through vicarious
liability. Drawing on case law under Section 1983, the town argues
that it should only be liable for official policies or customs and not
merely on account of actions taken by town officials in the scope of
their employment. See Monell v. New York City Dep’t of Social Servs.,
436 U.S. 658, 690-94 (1978). The problem with this argument, though,
is that the doctrine under Section 1983 that Cromwell asks us to adopt
is grounded in the unique text and history of that law, which find no
analogue in the FHA. It is clear and undisputed that the FHA
generally allows for vicarious liability, and we reject Cromwell’s
invitation to create a judicial carve-out from that liability for local
governments when Congress itself has declined to do so.
“[I]t is well established that the [Fair Housing] Act provides for
vicarious liability.” Meyer v. Holley, 537 U.S. 280, 285 (2003). The
Supreme Court has held that the FHA incorporates this standard
background principle from the common law of torts, placing “liability
without fault upon [an] employer in accordance with traditional
agency principles.” Id. at 282.
Equally clear (and undisputed by Cromwell) is that
municipalities are generally liable under the FHA. The statute refers
to the “person against whom” a discriminatory housing practice is
alleged in a private suit, 42 U.S.C. § 3613(b), and defines “person”
broadly to include corporations, id. § 3602(d); see also Cook County, Ill.
v. United States ex rel. Chandler, 538 U.S. 119, 126 (2003) (discussing
understanding of municipalities as corporations “going back at least
to Coke”). Indeed, the Supreme Court has identified “unlawful
zoning laws and other housing restrictions” as “at the heartland of

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disparate-impact liability” under the FHA. Inclusive Communities, 576
U.S. at 521 (emphasis added); see also Forest City Daly Hous., Inc. v.
Town of N. Hempstead, 175 F.3d 144, 151 (2d Cir. 1999) (noting that the
FHA “appl[ies] to municipal zoning decisions”). And legislative
history confirms that discrimination by municipal actors was one of
Congress’s particular concerns in adding prohibitions on disability
discrimination to the FHA in 1988. See H.R. Rep. No. 100-711, at 24
(1988) (observing that “state and local governments have authority
. . . to regulate use of land, [which] has sometimes been used to restrict
the ability of individuals with handicaps to live in communities” and
noting that disability provisions would “apply to state or local . . .
laws, regulations, practices or decisions”).
The FHA makes no special rules for municipal liability. Meyer
therefore means that municipalities are subject to vicarious liability
just like any other FHA defendant. Essentially, Cromwell asks this
Court to craft a judicial exception from the ordinary principles of
liability under the FHA for municipal defendants. Its only
justification for doing so is the Monell doctrine under Section 1983,
which it assumes should apply under all antidiscrimination statutes.
But the town offers no persuasive reason to apply the law of Section
1983, which is based on the particular text and history of that statute,
to the FHA.
The reasoning of Monell is clearly based on the text of Section
1983, which creates a cause of action against someone who “subjects,
or causes to be subjected,” any person to the deprivation of federal civil
rights, 42 U.S.C. § 1983 (emphasis added), and on the unique
legislative history behind Section 1983, which evidences serious

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congressional concern about the extent of municipal liability. See
Monell, 436 U.S. at 665-95. And the Supreme Court has characterized
the opinion’s rationale in this way multiple times. See Bd. of County,
Comm’rs of Bryan County, Okl. v. Brown, 520 U.S. 397, 403 (1997)
(explaining Monell as resting “on the language of § 1983 itself” and on
“the statute’s legislative history”); City of St. Louis v. Prapotnik, 485
U.S. 112, 122 (1988) (summarizing Monell as “[r]eading the statute’s
language in the light of its legislative history”); Pembaur v. City of
Cincinnati, 475 U.S. 469, 478-79 (1986) (“Primarily, however, our
conclusion [in Monell] rested upon the legislative history[.]”).
Thus, it would make little sense to adopt Monell as governing
all federal civil rights laws by default, as the town of Cromwell urges.
On the contrary, “Monell’s holding remains the exception to the
general rule” of vicarious liability. United States v. Town of Colorado
City, 935 F.3d 804, 808 (9th Cir. 2019).
And there are no indications that Congress intended the FHA
to be one more exception to the general rule. The statute does not
contain Section 1983’s “causes to be subjected” language, which the
Monell Court relied on as evidence that Congress did not intend
vicarious liability to attach under that statute. See Monell, 436 U.S. at
692. Indeed, the Supreme Court has already held in Meyer that the
FHA’s text generally imposes the traditional form of vicarious
liability. See Meyer, 537 U.S. at 285-87; see also id. at 286 (“Congress’
silence, while permitting an inference that Congress intended to
apply ordinary background tort principles, cannot show that it
intended to apply an unusual modification of those rules.”). Nor is
there any legislative history suggesting any concerns about the extent

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of municipal liability as under Section 1983.
There is simply no basis to apply the Monell doctrine to the
FHA. The district court did not err in subjecting the town of
Cromwell to vicarious liability for the discriminatory acts of its
officials.
III. Availability of Punitive Damages
With its final statutory argument, Cromwell once again seeks
support from case law interpreting other statutes and once again
founders when confronting the FHA itself. The FHA explicitly allows
for “actual and punitive damages” in suits brought by private
plaintiffs. 42 U.S.C. § 3613(c)(1). Nor are punitive damages an
afterthought in this context. In the 1988 amendment of the FHA,
Congress specifically decided to remove a previous cap on the
amount of punitive damages available, seeking to ensure adequate
punishment and deterrence of housing discrimination. See Littlefield
v. McGuffey, 954 F.2d 1337, 1345 (7th Cir. 1992) (describing the effect
of the amendment). Cromwell argues, however, that when it
expressly allowed for punitive damages in FHA suits, Congress
silently meant to shield municipalities from their reach. It did not.
Cromwell principally relies on City of Newport v. Fact Concerts,
Inc., 453 U.S. 247 (1981), a Supreme Court decision interpreting
Section 1983. The town also attempts to rely on Barnes v. Gorman, 536
U.S. 181 (2002), but that decision concluded that punitive damages are
unavailable under the ADA and Rehabilitation Act based on
Spending Clause principles that are wholly irrelevant to the FHA. See
Barnes, 536 U.S. at 185-89.
In Fact Concerts, the Court held that punitive damages are

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unavailable against a municipality under Section 1983, which does
not explicitly mention punitive damages. 453 U.S. at 271. It explained
that “[t]he general rule today is that no punitive damages are allowed
unless expressly authorized by statute,” and that there is a common-
law presumption against the availability of punitive damages from
municipalities. See id. at 259-64 & n.21. The Court then found nothing
in the legislative history suggesting congressional intent to override
that presumption.
Here, by contrast, the FHA’s text easily and unequivocally
rebuts the common-law presumption. To be sure, the statute does not
specifically say that punitive damages are available against
municipalities. But Congress does not need to speak with such
granular detail on the issue. The language of the FHA is broad but
clear: Private plaintiffs suing under the FHA may obtain “actual and
punitive damages” with no textually specified exceptions. 42 U.S.C.
§ 3613(c)(1). “As a general matter, courts should be loath to announce
equitable exceptions to legislative requirements or prohibitions that
are unqualified by the statutory text.” Guidry v. Sheet Metal Workers
Nat. Pension Fund, 493 U.S. 365, 376 (1990). And in fact, when
Congress has desired to carve local governments out from generally
applicable remedies under a statute, it has said so clearly. See 42
U.S.C. § 1981a(b)(1) (exempting “a government, government agency
or political subdivision” from otherwise available punitive damages).
Our straightforward conclusion is supported by several
persuasive authorities. When a statute explicitly provides for certain
remedies in general, and generally applies to municipal defendants,
it necessarily subjects those defendants to those remedies. That is

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how the Supreme Court reasoned in holding that treble damages,
while partly punitive, are available against municipalities under the
False Claims Act. See Cook County, 538 U.S. at 132-33. It is how this
Court reasoned in holding that liquidated damages under the ADEA,
which we recognized as punitive in nature, are available against
municipalities. See Cross v. New York City Transit Auth., 417 F.3d 241,
254-56 (2d Cir. 2005). And it is how the Eleventh Circuit reasoned in
refusing to exempt municipal defendants from the punitive damages
made generally available by the text of the Driver’s Privacy Protection
Act. See Truesdell v. Thomas, 889 F.3d 719, 724-25 (11th Cir. 2018).
Finally, we note that when confronted with a similar statutory
structure, the Supreme Court unanimously held that the Fair Credit
Reporting Act, which creates a cause of action and includes the
federal government in its definition of covered defendants, waives
the government’s sovereign immunity—even though the statute does
not specifically address that issue and even though a stringent clear
statement rule applies to waivers of sovereign immunity. See Dep’t of
Agric. Rural Dev. Rural Hous. Serv. v. Kirtz, 144 S. Ct. 457, 468 (2024).
A fortiori, the same reasoning applies to the comparably weaker
presumption at issue here. Congress did not need to specifically
authorize punitive damages against municipalities. Authorizing
punitive damages without exception in a statute that generally
subjects municipalities to liability was sufficient.
If there were any doubt, the statutory and legislative history
behind the FHA further reinforces this conclusion. As noted above,
legislative history suggests that, when Congress amended the FHA in
1988, it was well aware that the statute reached municipal defendants.

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See H.R. Rep. No. 100-711, at 24 (1988) (“These new subsections would
also apply to state or local . . . laws, regulations, practices, or
decisions[.]”). And it was in the 1988 amendments that Congress
lifted the FHA’s earlier $1000 cap on punitive damages. Congress
thus increased the availability of punitive damages at the same time
it was clearly contemplating municipal liability in general. It strains
credulity to think that Congress intended to prohibit or curtail
punitive damages against municipalities sub silentio through the very
amendment that greatly expanded the availability of those damages.
Without a basis in the text or history of the FHA, Cromwell
resorts to policy arguments, emphasizing the risk that blameless
taxpayers will end up bearing the brunt of these damages. Of course,
there are policy arguments on the other side of the equation, as well,
such as the need to adequately deter towns from discriminatory
conduct that might be cost-efficient because it leads to relatively small
compensatory damages. See, e.g., Ciraolo v. City of New York, 216 F.3d
236, 242-50 (2d Cir. 2000) (Calabresi, J., concurring); see also Br. of City
of Middletown as Amicus Curiae at 8-9 (stressing the importance of
deterring town officials from capitulating to the discriminatory
wishes of constituents). Ultimately, though, these policy arguments
are beside the point for our purposes. Congress made its own policy
judgment when it enacted and amended the FHA, and that judgment,
which we will not disturb, was to impose punitive damages on
municipalities that discriminate in the area of housing.
We therefore affirm the judgment below as to the town of
Cromwell’s liability, including for punitive damages, under the FHA.

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IV. Amount of Punitive Damages
In light of the conclusions above, the final issue for our
consideration is whether the $5 million award of punitive damages
that the jury assessed against the town was unconstitutionally
excessive. Our constitutional review of punitive damages is de novo,
see Cooper Indus., Inc. v. Leatherman Tool Grp., Inc., 532 U.S. 424, 431
(2001), and for the reasons below we conclude that the punitive
damages award in this case does not comport with due process.
The Supreme Court has established three guideposts for
evaluating when the amount of punitive damages becomes so
excessive that it crosses the line into arbitrariness, violating due
process. See State Farm Mut. Auto Ins. Co. v. Campbell, 538 U.S. 408,
419-28 (2003); BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 574-85 (1996).
The first is the reprehensibility of the defendant’s conduct, which the
Supreme Court has characterized as “[t]he most important indicium
of the reasonableness of a punitive damages award.” Gore, 517 U.S.
at 575. The second is the “ratio between harm, or potential harm, to
the plaintiff and the punitive damages award,” often captured as the
ratio of punitive to compensatory damages. State Farm, 538 U.S. at
424. And the third is “the disparity between the punitive damages
award and the civil penalties authorized or imposed in comparable
cases,” State Farm, 538 U.S. at 428 (quotation marks omitted), looking
for comparison to “legislative judgments concerning appropriate
sanctions for the conduct at issue,” BMW, 517 U.S. at 583 (quotation
marks omitted).
Here, there was ample evidence of highly reprehensible
conduct by the town of Cromwell. The town engaged in a deliberate

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and sustained campaign of discrimination and retaliation, reflecting
“repeated actions” rather than “an isolated incident” and resulting
from “intentional malice” rather than “mere accident.” State Farm,
538 U.S. at 419. The town also “evinced an indifference to or reckless
disregard of the health or safety of others,” when its police officers
leaked sensitive medical information about a Gilead resident to the
public and failed to investigate an episode of vandalism of Gilead’s
group home. Id. And the ultimate targets of the town’s conduct, the
residents with disabilities who relied on Gilead’s housing, “had
financial vulnerability.” Id. Finally, it bears remembering that
Cromwell officials not only violated the FHA but also publicly
celebrated when their discriminatory efforts succeeded in keeping
Gilead’s residents out of town. This is a case where “further
sanctions” beyond compensatory damages are warranted “to achieve
punishment [and] deterrence.” Id.
The first factor thus weighs in favor of a substantial award of
punitive damages. The second, however, gives us pause. The ratio
between punitive and compensatory damages in this case is
approximately 27.6 to 1. While the Supreme Court has eschewed
mathematical formulae or any bright-line rule about constitutionally
permissible ratios, it has cautioned that “few awards exceeding a
single-digit ratio between punitive and compensatory damages, to a
significant degree, will satisfy due process.” State Farm, 538 U.S. at
425. True, “the propriety of the ratio can vary enormously with the
particular facts of the case.” Payne v. Jones, 711 F.3d 85, 102 (2d Cir.
2013). But we are not persuaded that the facts of this case can justify
the facially excessive ratio here.

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Gilead argues that higher ratios may be permissible when “the
monetary value of noneconomic harm might have been difficult to
determine.” State Farm, 538 U.S. at 425 (quotation marks omitted).
And indeed here, it is difficult to measure the harm of Gilead being
unable to provide housing to its intended residents and the intangible
harms of the unabashed discrimination that Cromwell engaged in
and openly celebrated. After all, “violations of civil rights” are often
“‘particularly egregious’ acts that result in . . . injuries whose
monetary value is ‘difficult to determine.’” Lee v. Edwards, 101 F.3d
805, 811 (2d Cir. 1996) (quoting BMW, 517 U.S. at 582); see also Lincoln
v. Case, 340 F.3d 283, 293-94 (5th Cir. 2003) (noting that “the inherently
low or hard-to-determine actual injuries in housing discrimination
cases” render “[a] high ratio of punitives to compensatory damages
. . . far less troubling” in FHA cases). But this is not a case in which
“a particularly egregious act has resulted in only a small amount of
economic damages.” State Farm, 538 U.S. at 425. The difficult-to-
measure harms of Cromwell’s discrimination do support a relatively
high ratio, but cannot support one as high as this.
Gilead also urges that we must consider not only the harms it
actually suffered as quantified by the jury’s compensatory damages
award, but also the potential harm of the town’s conduct. “[T]he
proper inquiry is whether there is a reasonable relationship between
the punitive damages award and the harm likely to result from the
defendant’s conduct as well as the harm that actually has occurred.”
BMW, 517 U.S. at 581 (quoting TXO Production Corp. v. All. Res. Corp.,
509 U.S. 443, 460 (1993) (plurality opinion)); see also State Farm, 538
U.S. at 424 (looking to “the ratio between harm, or potential harm, to

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the plaintiff and the punitive damages award”).
Gilead points us to the fact that it had to forfeit a contract with
a state agency worth $866,152 in yearly funding to the organization.
The total loss in funding from the closure of the home to the time of
trial was estimated at roughly $4.7 million, which Gilead suggests we
can consider as potential harm. But relevant potential harm is “harm
to the victim that would have ensued if the [defendant’s] tortious plan
had succeeded.” BMW, 517 U.S. at 582. Gilead’s forfeited contract is
harm that did ensue, which Gilead claimed as an actual loss but which
the jury refused to include in its award of compensatory damages.
That is not the kind of likely but unrealized harm that would change
the relevant ratio for our constitutional analysis. In short, despite
Gilead’s best efforts, the 27.6 to 1 ratio of punitive to compensatory
damages remains far beyond the range most likely to survive
constitutional scrutiny.
Finally, we consider the relationship between the punitive
damages award and available penalties for similar conduct. The FHA
imposes a $50,000 fine for a first-time violation and $100,000 for
subsequent violations in enforcement actions brought by the attorney
general. See 42 U.S.C. § 3614(d)(1)(C). And in HUD administrative
enforcement proceedings, first-time offenders risk civil penalties of
approximately $25,000 per discriminatory housing practice, and
repeat offenders approximately $64,000 or $128,000 depending on
how many prior violations they have committed. See 24 C.F.R. §
180.671(a). To be sure, those penalties do not apply in private
enforcement actions, and Congress specifically lifted a prior statutory
cap on the punitive damages available in such proceedings. But they

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remain an instructive benchmark for what Congress has thought to
be appropriate punishment for violations of the FHA. And since that
benchmark is significantly lower than the punitive damages award in
this case, it further suggests that the award crossed the boundaries of
due process.
In all, the high degree of reprehensibility of Cromwell’s
conduct supports a significant award of punitive damages. And the
fact that Cromwell’s discrimination inflicted non-economic harms
that may not be easily quantifiable likewise suggests that even a
relatively high ratio of punitive to compensatory damages can
survive constitutional scrutiny in this case. But the 27.6 to 1 ratio here
is simply too high, as confirmed by the much lower civil penalties
available for comparable conduct. We conclude that the jury’s award
of punitive damages is unconstitutionally excessive and that the
maximum sustainable amount of punitive damages is $2 million.
CONCLUSION
We conclude that the district court did not err in applying
motivating-factor causation to Gilead’s disparate treatment and
retaliation claims under the FHA, in subjecting Cromwell to vicarious
liability, and in allowing the jury to assess punitive damages against
the town. However, we conclude that the amount of punitive
damages awarded is so grossly excessive as to violate due process.
We therefore remand with instructions for the district court to grant
a new trial on the issue of punitive damages unless Gilead agrees to a
remittitur reducing the punitive damages to $2 million. Accordingly,
the judgment of the United States District Court for the District of

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Connecticut is AFFIRMED in part, VACATED in part, and
REMANDED for further proceedings.

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