The Justice Department filed suit against the Adam's Mark hotel chain yesterday, alleging a broad pattern of racial discrimination in which black hotel guests were overcharged, turned away or segregated into inferior rooms.
A federal investigation found that in upscale Adam's Mark hotels across the country, black customers were forced to pay more than white patrons for comparable accommodations, and were kept out of hotel restaurants and lounges because the chain had an overall corporate strategy that too high a percentage of blacks in those settings was bad for business.
Justice Department officials said the suit represents the first time the department has gone to court against a hotel chain for discrimination. Similar investigations have ended in consent decrees in which corporate officials agreed to needed reforms, but in the case of the St. Louis-based Adam's Mark, settlement talks with a mediator collapsed. The violations were so widespread and so egregious, officials said, the department took the unusual step of filing suit.
"More than 30 years after the passage of the Civil Rights Act of 1964, the sad fact is that some Americans are still treated differently because of their race," Attorney General Reno said in an afternoon news conference. "This isn't right. This isn't fair. And it's against the law."
A statement released by HBE Corp., the parent company of Adam's Mark, read: "We are, of course, disappointed to have been named as a subject today of an investigation by the U.S. Justice Department. We believe that, when the department's investigations are finally concluded, Adam's Mark and its parent HBE Corp. will be completely exonerated."
The department filed suit in Orlando under Title II of the Civil Rights Act, which was passed to ensure that black Americans in the Deep South would no longer be subjected to segregated lunch counters and "No Negroes" signs at overnight accommodations.
The Justice Department investigation was triggered by a class action suit filed in May by five black patrons of the Daytona Beach Adam's Mark hotel, who alleged racial discrimination during their stay at the 437-room hotel during the annual Black College Reunion in April. The suit alleged that the hotel required black guests to wear orange wristbands, denied access to black visitors and charged higher room rates for black guests. Further, it charged that the rooms rented to black guests lacked basic amenities such as telephones and maid service, and that pictures had been removed from the walls and locks placed on the minibars.
The Florida suit was not the first discrimination case filed against Adam's Mark, a privately held company owned by the Kummer family in St. Louis. Previous cases in Indianapolis, Memphis and St. Louis have resulted in multimillion-dollar damage awards to plaintiffs.
Reno said the department began investigating in July. "And we didn't like what we found," she said. "We found that Adam's Mark hotels around the country, not just in Daytona Beach, were charging African American patrons higher rates than whites. We found that African Americans were offered rooms in less desirable locations and segregated from white patrons."
A source familiar with the investigation, which is ongoing, said violations of the Civil Rights Act had been found in at least four hotels in Philadelphia, Winston-Salem, Denver and Indianapolis. The 21-hotel chain has no establishments in metropolitan Washington.
So far, the federal investigation has also found that in some instances Adam's Mark imposed stricter requirements in terms of security, identification and room reservations for its black patrons. "We found that the chain took steps to reduce the number of African American customers in its restaurants, clubs and lounges," Reno said.
Adam's Mark is an example of "rational racism," or the use of business explanations to justify racist choices, said Dennis Courtland Hayes, general counsel for the NAACP, one of the legal groups representing the plaintiffs in the class action suit.
"There's that rational belief system that says, 'I'm going to offend my good white customers' " if there are too many minorities present, Hayes said. He cited a Buffalo case in which a black mother was killed while crossing a highway to get to her job at a shopping mall because the bus from the minority community was prohibited from stopping at the mall.
The Justice Department suit against Adam's Mark seeks reforms that include implementation of a policy of nondiscrimination, self-testing by the company, and agreement to some federal monitoring mechanism of the new practices. The government cannot impose fines under the Civil Rights Act, said Bill Lann Lee, acting head of the Civil Rights Division.
But yesterday, the state of Florida joined the class action suit as an intervenor, enabling the state to enforce its Deceptive and Unfair Trade Practices Act against the hotel chain, and to seek up to $10,000 per discrimination violation.