Smith v. Fair Employment & Housing Com.

Page 700

51 Cal.Rptr.2d 700

12 Cal.4th 1143, 913 P.2d 909, 64 USLW 2651,

96 Cal. Daily Op. Serv. 2465,

96 Daily Journal D.A.R. 4067

Evelyn SMITH, Petitioner, v. FAIR EMPLOYMENT AND HOUSING COMMISSION, Respondent Kenneth C. PHILLIPS, et al., Real Parties in Interest.

No. S040653.

Supreme Court of California.

April 9, 1996.

Jordan W. Lorence, Fairfax, VA, Cimron Campbell, Orange, TX, Jane E. Hadro, Falls Church, VA, Wendell R. Bird, Atlanta, GA, Mark N. Troobnick, Germantown, MD, and Jay Alan Sekulow, Virginia Beach, VA, for Petitioner.

Loy Watkins, Forest Ranch, John G. Tulio, Alan J. Reinach, Westlake Village, Boothby & Yingst, Lee Boothby, Oliver Thomas, Marc D. Stern, Jaffe, Trutanich, Scatena & Blum, Fred Blum, San Francisco, Proskauer, Rose, Goetz & Mendelsohn, Jeffrey A. Berman, Steven G. Drapkin and Lee W. Rierson, Los Angeles, as amici curiae on behalf of Petitioner.

John K. Van de Kamp and Daniel E. Lungren, Attorneys General, Andrea Sheridan Ordin, Chief Assistant Attorney General, Carole R. Kornblum, Assistant Attorney General, Manuel M. Medeiros, Louis Verdugo, Jr., and Kathleen W. Mikkelson, Deputy Attorneys General, Steven C. Owyang, Prudence Kay Poppink, San Francisco, Eisen & Johnston Law Corporation, Jay-Allen Eisen, Marian M. Johnston and Ann Perrin Farina, Sacramento, for Respondent.

Arlo Smith, District Attorney (San Francisco), David C. Moon, Assistant District Attorney, Steven K. Green, Washington, DC, Edward Tabash, Beverly Hills, John Beattie, Greenberg, Glusker, Fields, Claman & Machtinger and Roger L. Funk, Los Angeles, as amici curiae on behalf of Respondent.

David Link and Thomas F. Coleman, Los Angeles, for Real Parties in Interest.

James K. Hahn, City Attorney (Los Angeles), Charles I. Goldenberg, Assistant City Attorney, and Maria Perez Manning, Deputy City Attorney, as amici curiae on behalf of Real Parties in Interest.

Marsha Jones Moutrie, City Attorney (Santa Monica), Joseph Lawrence, Assistant City Attorney, Martin T. Tachiki, Barry A. Rosenbaum and Kimery A. Shelton, Deputy City Attorneys, Jon W. Davidson, Carol A. Sobel, Paul L. Hoffman, Mark D. Rosenbaum, Los Angeles, Matthew A. Coles, Margaret C. Crosby, San Francisco, Tzivia Schwartz, Los Angeles, Barbara H. Bergen, Glendale, Margalynne Armstrong, Santa Clara, James D. Smith, Amelia A. Craig, San Francisco, Wilson, Sonsini, Goodrich & Rosati and Clyde J. Wadsworth, Palo Alto, as amici curiae on behalf of Respondent and Real Parties in Interest.

WERDEGAR, Justice.

The California Fair Employment and Housing Act (Gov.Code, § 12900 et seq.) (FEHA) declares it to be "unlawful [p] ... [f]or the owner of any housing accommodation to discriminate against any person because of the ... marital status ... of that person" (id. § 12955, subd. (a)). The Fair Employment and Housing Commission (commission) ruled that a landlord violated the statute by refusing to rent an apartment to an unmarried couple. The Court of Appeal reversed, believing the state may not constitutionally apply FEHA to a landlord whose religious beliefs make it sinful to rent to an unmarried couple. We reverse the decision of the Court of Appeal.

I. FACTS

The relevant facts set out below are as found by the commission in its final decision.

"Respondent [Evelyn Smith] owns and leases four rental units located [in two duplexes] at 675, 677, 683 and 685 Eastwood Avenue, Chico, California. They are operated exclusively for business and commercial purposes, with income generated from the rentals reported as business income. The business is not organized or classified as a religious, charitable or other nonprofit concern. Respondent does not reside in any of the four units and visits the units occasionally to maintain them.

"When a vacancy occurs in one of the units, the unit is advertised for rent in local newspapers and is otherwise available to the general public. When prospective tenants inquire about a vacant unit, respondent tells them she prefers married couples. She prefers married couples because, for religious reasons, she opposes sex outside of marriage. However, since she has received so many calls from unmarried couples seeking to rent her units, she simply tells prospective tenants that she prefers to rent to married couples.

"Respondent is a Christian. She is a member of Bidwell Presbyterian Church in Chico and has attended there for approximately 25 years. Respondent believes that sex outside of marriage is sinful, and that it is a sin for her to rent her units to people who will engage in nonmarital sex on her property. Respondent believes that God will judge her if she permits people to engage in sex outside of marriage in her rental units and that if she does so, she will be prevented from meeting her deceased husband in the hereafter.

"Respondent has rented her units to single, divorced and widowed persons. Respondent has no religious objection to renting to people who are single, divorced, widowed or married. Respondent would not rent to anyone who engages in sex outside of marriage, whether they are single, divorced, widowed or married. Respondent rents her units to people without regard to their race, color, national origin, ancestry, or physical handicap. Respondent rents her units without regard to the religious beliefs of tenants. She does not know the religious background of most of her tenants because she never asks them and only knows if they volunteer the information. Respondent has rented her units to males and females and does not discriminate on the basis of sex.

"From on or about March 29, 1987, to April 13, 1987, respondent advertised the availability of one of her units in the Chico Enterprise Record. Complainants [real parties in interest Gail Randall and Kenneth Phillips] saw the advertisement on April 1, 1987, and drove by the unit that night. Because of the particular location, attractive architecture, convenient location and well maintained premises, complainants took a special interest in the unit and the next morning called respondent and arranged to see it. During this telephone conversation respondent stated that she preferred to rent to married couples.

"On or about April 2, 1987, complainants met with respondent and were shown the premises, which they liked very much. Respondent told complainants that she would not rent to unmarried couples, and she asked complainants how long they had been married. Complainant Phillips falsely represented to respondent that he and complainant Randall were married. Complainants made no commitment to rent at that time and filled out an informal application for respondent. Complainant Randall signed her name, 'Gail Phillips' on that document.

"Later, complainants called respondent and told respondent they were interested in renting the unit. They met with respondent on or about April 7, 1987. A lease agreement was executed between the parties on that date for the unit located at 677 Eastwood Avenue. It was for a month-to-month tenancy commencing May 1, 1987 at a rent of $325 per month. Complainants also paid respondent a security deposit of $150 for which a receipt was given. Complainant Randall signed the lease agreement, 'Gail Phillips'. During this meeting respondent told complainants again that she would not rent to unmarried couples.

"Later in the day on April 7, 1987, complainant Randall called respondent and asked if respondent doubted that Randall and Phillips were married. Randall asked respondent if she wanted to see their marriage license. Respondent said, 'No.' Still later on the same day, complainant Phillips called respondent and told her that he and Randall were not married. Respondent told him that she could not rent to an unmarried cohabiting couple because that would violate her religious beliefs. Respondent said that she would return their deposit. She sent them a check for $150."

Randall and Phillips filed separate complaints against Smith with the commission. Based on the complaints, the commission issued two accusations. As subsequently amended, the accusations alleged Smith had violated Government Code section 12955, subdivisions (a), (b), (c) and (d), ¹ Civil Code section 51 (the Unruh Civil Rights Act), ² and Government Code section 12948. ³

A hearing before an administrative law judge ensued. Smith defended the accusations on two grounds that are relevant here: first, the relevant provisions of FEHA (Gov. Code, § 12955, subd. (a)) and the Unruh Civil Rights Act (Civ. Code, § 51) do not prohibit discrimination against unmarried couples; second, to require her to rent to an unmarried couple over her religious objections would violate the free exercise clauses of the federal and state Constitutions. (U.S. Const., 1st Amend.; Cal. Const., art. I, § 4.) The judge rejected both arguments and issued a proposed decision in favor of Randall and Phillips.

The commission subsequently exercised its power not to adopt the proposed decision and to hear the case itself on the existing record. (Gov. Code, § 11517, subd. (c).) After additional briefing, the commission issued its decision in favor of Randall and Phillips. In its decision, the commission found that Smith had violated Government Code sections 12955, subdivisions (a) and (d), Civil Code section 51, and Government Code section 12948. More particularly, the commission decided that FEHA's prohibition of discrimination based on "marital status" did encompass discrimination against unmarried couples, and that the Unruh Civil Rights Act prohibited all forms of arbitrary discrimination by business establishments, including discrimination against unmarried couples. The commission concluded it had no power to address Smith's constitutional arguments in view of article III, section 3.5, of the California Constitution. ⁴ As relief, the commission ordered Smith to cease and desist from discriminating on the basis of marital status; to post and give to prospective tenants various notices...