The U.S. Department of Justice announced Tuesday that real estate mogul Donald Sterling agreed to pay a record $2.7 million to settle allegations that he discriminated against African-Americans, Hispanics and families with children at his Los Angeles apartment buildings.
The settlement, the largest monetary payment ever obtained by the department in a housing discrimination case involving rental apartments, is the result of a 2006 lawsuit brought against Sterling, his wife Rochelle Sterling and the Sterling Family Trust. It also resolves two related lawsuits filed by former tenants at one of the Sterlings’ properties.
“The magnitude of this settlement should send a message to all landlords that we will vigorously pursue violations of the Fair Housing Act,” said Thomas Perez, an assistant attorney general for the civil rights division, in a statement.
Robert Platt, a partner at West L.A. firm Manatt Phelps & Phillips LLP who represented the Sterling Family Trust in the case, said insurance companies decided to settle the case because of litigation costs.
“After three years of litigation, the fair housing attorneys could not prove a single violation of the Fair Housing Act,” Platt said. “My clients vehemently and unequivocally deny that anyone was discriminated against.”
In the suit, which was filed in Los Angeles federal court, the Sterlings were accused of discriminating against non-Korean tenants and prospective tenants at the couple’s Koreatown apartment buildings. The Sterlings own and manage approximately 119 apartment properties in Los Angeles County.
As part of the $2.7 million settlement, the Sterlings are required to pay a $100,000 civil penalty to the United States. The remaining $2.6 million will be placed into a fund used to pay damages to those who were harmed by the alleged discriminatory practices.
The settlement also forbids the Sterlings from discriminating on the basis of race, national origin and familial status, and requires that the couple implement a self-testing program over the next three years to monitor their employees’ compliance with fair housing laws.
Donald Sterling, who ranked No. 22 on the Business Journal’s list of Wealthiest Angelenos with an estimated net worth of $1.45 billion, also owns the Los Angeles Clippers.
Sterling is currently involved in a legal fight with longtime Clippers general manager Elgin Baylor, who filed a suit against Sterling, the Clippers and the National Basketball Association for employment discrimination in February. The case is scheduled to go to trial in March 2010.
