New York Law School

Art Leonard Observations

Posts Tagged ‘Fair Housing Act’

7th Circuit Ruling Creates Federal Precedent to Protect Older Gays in Residential Facilities

Posted on: August 27th, 2018 by Art Leonard No Comments

A unanimous three-judge panel of the U.S. Court of Appeals for the 7th Circuit ruled on August 27 that a lesbian resident of a rental facility for seniors in Illinois may seek to hold the management of the facility accountable for severe harassment against her by other residents due to her sexual orientation.  The ruling reversed a decision by U.S. District Judge Samuel Der-Yeghiayan, a George W. Bush appointee, to dismiss her case.  The court of appeals decision marks an important appellate precedent for the protection of older LGBT people living in residential facilities.  The case is Wetzel v Glen St. Andrew Living Community, LLC, Case No. 17-1322 (7th Cir., Aug. 27, 2018).

Marsha Wetzel moved into Glen St. Andrew Living Community after her partner of 30 years died. Under the Tenant’s Agreement she signed with the facility, she is entitled to a private apartment, three meals daily served in a central location, access to a community room, and use of laundry facilities.  The agreement requires her (and all other tenants under their agreements) to refrain from “activity that [St. Andrew] determines unreasonably interferes with the peaceful use and enjoyment of the community by other tenants” or that is “a direct threat to the health and safety of other individuals.”  The Agreement also authorizes the facility to bring eviction proceedings against a tenant who violates the Agreement.

Wetzel was not closeted, speaking openly with staff and other residents about her sexual orientation when she moved in. “She was met with intolerance from many of them,” wrote Chief Judge Diane Wood in summarizing the allegations in Wetzel’s Complaint.  For purposes of ruling on the facility’s motion to dismiss her case, the court’s role is to accept Wetzel’s allegations as true and to decide whether those allegations, if proved at trial, would constitute a violation of her rights under the Fair Housing Act, which forbids discrimination because of sex.

Judge Wood’s summary of the Complaint makes horrific reading. “Beginning a few months after Wetzel moved to St. Andrew and continuing at least until she filed this suit (a 15-month period), residents repeatedly berated her for being a ‘fucking dyke,’ ‘fucking faggot,’ and ‘homosexual bitch.’  One resident, Robert Herr, told Wetzel that he reveled in the memory of the Orlando massacre at the Pulse nightclub, derided Wetzel’s son for being a ‘homosexual-raised faggot,’ and threatened to ‘rip [Wetzel’s] tits off.’  Herr was the primary, but not sole, culprit.  Elizabeth Rivera told Wetzel that ‘homosexuals will burn in hell.’”

The Complaint also describes incidents of physical abuse, focused on knocking Wetzel off the motorized scooter she depends upon to get around, spitting at her, and striking her from behind accompanied by anti-gay epithets.

When she complained to the staff, there was a “brief respite,” but soon the misconduct continued. Indeed, Judge Wood wrote, “the management defendants otherwise were apathetic.  They told Wetzel not to worry about the harassment, dismissed the conduct as accidental, denied Wetzel’s accounts, and branded her a liar.”  Furthermore, Wetzel alleges, they retaliated against her by relegating her “to a less desirable dining room location” after she notified them about one incident of physical harassment by another resident, “barred her from the lobby except to get coffee” and “halted her cleaning services, thus depriving her of access to areas specifically protected in the Agreement.”  They also false accused her of smoking in her room and one St. Andrews worker “slapped her across the face” when she denied having violated the no-smoking rule.

In what sounds like a transparent attempt to set her up for an eviction for non-payment, they failed to send her the customary rent-due notice sent to all tenants, but she remembered to pay on time, “but she had to pry a receipt from management.”

As a result of these management responses, Wetzel sharply curtailed her activities outside her room, staying away from common spaces including the dining room, and finally, fed up with this mistreatment, filed this lawsuit, alleging violations of the FHA as well as state laws. (Illinois laws forbid sexual orientation discrimination in housing and public accommodations.)

The facility did not argue in defense that the FHA does not ban sexual orientation discrimination. They could hardly raise such an argument in the 7th Circuit, because that court was the first appellate court to rule that sexual orientation claims are a subset of sex discrimination claims, under the similar anti-discrimination provisions of Title VII of the Civil Rights Act of 1964.

Instead, the defendant argued that the landlord cannot be held liable for discrimination by other tenants under the FHA without a showing of discriminatory animus by the landlord. Furthermore, it argued that FHA deals with refusals to rent, and does not cover “post-acquisition harassment claims.”  In other words, as Judge Wood explained, once an apartment has been rented, the defendant argued that the FHA is no longer relevant to claims brought by “a tenant already occupying her home.”  The defendant countered Wetzel’s retaliation claim by arguing, once again, that it lacked an allegation that defendants were motivated by discriminatory animus.

District Judge Der-Yeghiayan agreed with the defendants’ FHA arguments and dismissed the case. The dismissal of the FHA claim removed the basis for federal jurisdiction, and the judge declined to keep the state claims alive, dismissing them for lack of jurisdiction, although federal courts do have discretion to continue to consider state law claims in such cases.

Writing for the appeals court, Judge Wood relied on cases of workplace harassment decided under Title VII for a standard to apply to a harassment case brought under the FHA, for which there was no precedent in the 7th Circuit.  “The harassment Wetzel describes plausibly can be viewed as both severe and pervasive,” she wrote, referring to the Title VII standard.  “For 15 months, she was bombarded with threats, slurs, derisive comments about her family, taunts about a deadly massacre, physical violence, and spit.  The defendants dismiss this litany of abuse as no more than ordinary ‘squabbles’ and ‘bickering’ between ‘irascible,’ ‘crotchety senior resident[s].’  A jury would be entitled to see the story otherwise.”

The question for the court was whether there was a basis to impute liability to St. Andrew for the hostile housing environment, a question new for the 7th Circuit.  Again, the court borrowed from principles established under another statute, this time focusing more on Title IX of the Education Amendments Act, under which schools have been held liable for harassment of students by other students, when the harassment was brought to the attention of school authorities and they failed to take appropriate steps to assure that the harassed students were not denied equal educational opportunity because of their sex.

The question was whether the facility management had “actual knowledge of the severe harassment Wetzel was enduring and whether they were deliberately indifferent to it. If so,” wrote the judge, “they subjected Wetzel to conduct that the FHA forbids.”  The court rejected St. Andrew’s argument that the landlord-tenant relationship is so different from the school-student relationship as to make such a test inappropriate.  The court, finding that the defendant had inaccurately described the court’s holding, responded: “We have said only that the duty not to discriminate in housing conditions encompasses the duty not to permit known harassment on protected grounds. The landlord does have responsibility over the common areas of the building, which is where the majority of Wetzel’s harassment took place.  And the incidents within her apartment occurred precisely because the landlord was exercising a right to enter.”

The court rejected St. Andrew’s argument that its ruling would unfairly hold St. Andrew liable for actions it was “incapable of addressing,” pointing out that the tenant Agreement signed by all residents imposed obligations on tenants not to engage in conduct that would constitute a “direct threat to the health and safety of other individuals” and to refrain from conduct that would “unreasonably” interfere with “the peaceful use and enjoyment of the community by other tenants.” This is, on its face, directly applicable to the conduct of other residents directed at Wetzel.  And the Agreement gives the facility the right to seek to evict tenants who violate these rules.  Yet, according to Wetzel’s Complaint, the facility took action against her for complaining rather than against her harassers for their misconduct.

The court also noted a rule published by the Department of Housing and Urban Development (HUD) in 2016, providing that a landlord could be held liable under the FHA for failing to “take prompt action to correct and end a discriminatory housing practice by a third party” (such as a fellow resident in a rental building) if the landlord “knew or should have known of the discriminatory conduct and had the power to correct it.” The court said it did not need to rely on this rule, however, stating that “it is enough for present purposes to say that nothing in the HUD rule standings in the way of recognizing Wetzel’s theory” for landlord liability in her case.

The court also discounted St. Andrew’s argument that this case is just about “bad manners” by some residents. “It is important,” wrote Wood, “to recognize that the facts Wetzel has presented (which we must accept at this stage) go far beyond mere rudeness, all the way to direct physical violence.”  She noted that under Title VII courts have routinely had to distinguish between hostile environment harassment and mere incivility.

The court also decisively rejected St. Andrew’s claim that the FHA anti-discrimination provision does not apply once the apartment is leased to the tenant. The statute bans discrimination regarding “services or facilities,” and the court pointed out that “few ‘services or facilities’ are provided prior to the point of sale or rental; far more attach to a resident’s occupancy.”  In this case, Wetzel’s allegations included her virtual exclusion from the enjoyment of the common areas of the building, and denial of certain services to which she was entitled under the tenant Agreement.  “At a minimum, then,” wrote the court, “Wetzel has a cognizable post-acquisition claim because discrimination affected the provision of services and facilities connected to her rental.  Beyond that, the discrimination diminished the privileges of Wetzel’s rental.”

The court also rejected St. Andrew’s argument, which the district court had accepted, that the anti-retaliation provision of the statute required proof of the landlord’s discriminatory intent. “Indeed,” wrote Judge Wood, “if we were to read the FHA’s anti-retaliation provision to require that a plaintiff allege discriminatory animus, it would be an anomaly.  Like all anti-retaliation provisions, it provides protections not because of who people are, but because of what they do.”  The focus, thus, is on whether the landlord takes some adverse action after a tenant complains about violation of her rights under the FHA, not whether the landlord is biased against somebody because she is a lesbian.

In sending the case back to the district court, the Court of Appeals revived Wetzel’s FHA claim and also directed to the court to “reinstate the state-law claims that were dismissed for want of jurisdiction.”

Wetzel is represented by Lambda Legal and cooperating attorneys from Foley & Lardner LLP.

Federal Court Rejects Gloucester School District’s Motion to Dismiss Gavin Grimm’s Case

Posted on: May 23rd, 2018 by Art Leonard No Comments

Opening up a new chapter in the continuing battle of Gavin Grimm to vindicate his rights as a transgender man, U.S. District Judge Arenda L. Wright Allen issued an Order on May 22 denying the Gloucester County (Virginia) School Board’s motion to dismiss the latest version of the case Grimm filed back in July 2015, prior to his sophomore year at Gloucester High School.

During the summer of 2014, Grimm’s transition had progressed to the point where he and his mother met with high school officials to tell them that he was a transgender boy and “would be attending school as a boy,” wrote Judge Allen.  They agreed to treat him as a boy, including allowing him to use the boys’ restrooms.  He did so for about seven weeks without any incident, until complaints by some parents led the school board to adopt a formal policy prohibiting Grimm from using the boys’ restrooms.  The school established some single-user restrooms that were theoretically open to all students, but Grimm was the only one who used them because they were not conveniently located to classrooms.

“Because using the single-user restrooms underscored his exclusion and left him physically isolated,” wrote Judge Allen, “Mr. Grimm refrained from using any restroom at school.  He developed a painful urinary tract infection and had difficulty concentrating in class because of his physical discomfort.”  During the summer after his sophomore year, he filed his lawsuit, alleging violations of Title IX – a federal statute that forbids schools from discriminating because of sex – and the Equal Protection Clause of the Constitution.

Meanwhile, Grimm had begun hormone therapy in December 2014, “which altered his bone and muscle structure, deepened his voice, and caused him to grow facial hair.”  In June 2015, he received a new Virginia identification car from the Motor Vehicles Department designated him as male.  During the summer of 2016, he had chest-reconstruction surgery, a necessary step to get the circuit court to issue an order changing his sex under Virginia law and directing the Health Department to issue him a birth certificate listing him as male.  He received the new birth certificate in October 2016.  Thus, as of that date, Grimm was male as a matter of Virginia law.

Yet, despite all these physical and legal changes, the School District clung to its contention that his “biological gender” was female and that he could not be allowed to use boys’ restrooms at the high school.  The school maintained this prohibition through the end of the school year, when Grimm graduated.

Meanwhile, his lawsuit was not standing still.  Senior U.S. District Judge Robert G. Doumar dismissed his Title IX claim in September 2015, denying his motion for a preliminary injunction, and holding his Equal Protection Claim in reserve while he appealed to the U.S. Court of Appeals for the 4th Circuit, based in Richmond.  In the spring of 2016, the 4th Circuit sent the case back to the district court, issuing an opinion holding that the court should have deferred to the position advanced by the U.S. Departments of Education and Justice, which opined that discrimination because of gender identity is sex discrimination and schools are required under Title IX to treat student consistent with their gender identity.

Judge Doumar then issued a preliminary injunction during the summer of 2016 ordering the School District to let Grimm use the boys’ restrooms, but the School District obtained a stay of that order from the Supreme Court, which subsequently granted the School’s petition to review the 4th Circuit’s “deference” ruling.  The Supreme Court scheduled the case for argument, but then the incoming Trump Administration “withdrew” the position that the Obama Administration had taken, knocking the props out from under the 4th Circuit “deference” ruling, and persuaded the Supreme Court to cancel the argument and send the case back to the 4th Circuit, which in turn sent it back to the district court.  And, by the time it got there, Grimm had graduated from Gloucester County High School.

The School District attempted to get rid of the case at that point, arguing that it was moot.  Grimm begged to differ, arguing that his Title IX and Equal Protection rights had been continuously violated by the School District from the time it adopted its exclusionary restroom policy through the time of his graduation.  In a newly amended complaint, Grimm sought a declaratory judgement as to the violation of his rights under both Title IX and the constitution and an end to the school’s exclusionary policy.

The School District moved to dismiss this new complaint, leading to the May 22 ruling by Judge Allen, to whom the case had been reassigned in the interim. Judge Doumar, who was born in 1930, was appointed to the court by President Reagan and is still serving as a part-time senior district judge.  Judge Allen was appointed to the court by President Obama in 2011.

Judge Allen’s opinion relies heavily on important judicial developments that have occurred since Judge Doumar’s initial dismissal of the Title IX claim back in 2015. The 4th Circuit has yet to issue a ruling on the merits of the question whether federal laws that forbid discrimination because of sex can be construed to apply to gender identity discrimination claims.  Since the Supreme Court has also avoided addressing that issue, it was open to Judge Allen to follow as “persuasive precedents” the lengthening list of rulings from other federal courts, including five different circuit courts of appeals and many district courts, holding that sex discrimination laws should be broadly construed to cover gender identity claims.

These decisions draw their authority from two important Supreme Court decision: Price Waterhouse v. Hopkins (1989) and Oncale v. Sundowner Offshore Services (1998). In Price Waterhouse, the Supreme Court accepted as evidence of intentional sex discrimination an accounting firm’s denial of a partnership to a woman who was deemed inadequately feminine by several partners who voted against her.  In Oncale, the Court ruled that Title VII, the federal law banning employment discrimination because of sex, could apply to a claim of hostile environment sexual harassment by a man who worked in an all-male workplace, commenting that even if this scenario was not contemplated by Congress when it passed Title VII in 1964, that statute could be applied to “comparable” situations.

Since the turn of the century, federal appeals courts have used those two cases to find that transgender people can seek relief from discrimination under the Gender-Motivated Violence Act, the Equal Credit Opportunity Act, Title VII of the Civil Rights Act, Title IX of the Education Amendments Act, and the Equal Protection Clause. In addition, district courts have found such protection under the Fair Housing Act.  A consensus based on the gender stereotype theory has emerged, even in circuits that have generally been hostile to sexual minority discrimination claims.  And, most significantly, the 7th Circuit ruled last year in the case of Ashton Whitaker, a transgender boy, that Title IX and the Equal Protection Clause required a school district to allow him to use boys’ restroom and locker room facilities.  There is no material distinction between the Whitaker and Grimm cases.

Furthermore, and closer to home, on March 12 of this year U.S. District Judge George L. Russell, III, ruled in a case from Maryland (also in the 4th Circuit) that a school district had violated Title IX and the Equal Protection Clause by refusing to allow a transgender boy to use the boys’ locker room at his high school.  Judge Allen found Judge Russell’s analysis persuasive, as she did the recent cases from other courts.

Turning to Grimm’s constitutional claim, Judge Allen followed the precedents from other courts that have determined that discrimination against transgender people is subject to “heightened scrutiny” judicial review, similar to that used for sex discrimination cases. Under this standard, the challenged policy is presumed to be unconstitutional and the government bears the burden of showing that it substantially advances an important governmental interest.

The Gloucester School District argued that its interest in protecting the privacy of other students was sufficient to vindicate its policy, but Judge Allen disagreed, finding that “the policy at issue was not substantially related to protecting other students’ privacy rights. There were many other ways to protect privacy interests in a non-discriminatory and more effective manner than barring Mr. Grimm from using the boys’ restrooms.”  The school had created three single-user restrooms open to all students, so any student who sought to avoid using a common restroom with Mr. Grimm had only to use one of those.  She also noted that the School Board reacted to the controversy by taking steps “to give all students the option for even greater privacy by installing partitions between urinals and privacy strips for stall doors.”  Thus, any validity to privacy concerns raised when the controversy first arose had been substantially alleviated as a result of these renovations.

Having denied the School District’s motion to dismiss the amended complaint, Judge Allen directed the attorneys to contact the Courtroom Deputy for United States Magistrate Judges within thirty days to schedule a settlement conference. If the parties can’t work out a settlement with a magistrate judge, the district court will issue a final order dictating what the school district must do to be in compliance with Title IX and the Constitution.  And, because Grimm is the prevailing party in this long-running and hotly litigated civil rights case, one suspects that sometime down the road there will be a substantial attorneys’ fee award.

Grimm’s lawyer, Joshua Block of the ACLU LGBTQ Rights Project, indicated that their goal in the case at this point is the declaratory judgment and nominal damages for Grimm, and of course an end to the School Board’s discriminatory policy. Grimm now lives in Berkeley, California, and intends to begin college this fall in the Bay Area, according to the New York Times’ report on the case.

Of course, the School District may seek to appeal Judge Allen’s Order to the 4th Circuit.  Attorney General Jeff Sessions issued a Memorandum last fall formally rejecting the Obama Administration’s position that federal sex discrimination laws forbid gender identity discrimination, so the School District could count on the Justice Department to support an appeal.  And Trump’s rapid pace in filling federal circuit court vacancies may slow or eventually halt the continuing trend of transgender-positive rulings from the other circuit courts, but that is not likely to be the case in the 4th Circuit for some time.  At present that court has an overwhelming majority of Democratic appointees (including six by Obama and four by Clinton on the 15 member court) with only one vacancy for Trump to fill.  The 4th Circuit was out front of the Supreme Court in 2014 in striking down state bans on same-sex marriage, and its 2016 opinion in Gavin Grimm’s case was notably transgender-friendly, so it is unlikely that an appeal by the School District will be successful in the 4th Circuit.  The Supreme Court, of course, may be a different matter.  Time will tell.

Federal Housing Discrimination Law May Cover Some Sexual Orientation Discrimination Claims

Posted on: June 23rd, 2015 by Art Leonard No Comments

A federal judge in Alabama has ruled that some sexual orientation discrimination claims may be made under the federal Fair Housing Act (FHA), a statute that forbids sex discrimination by owners and operators of residential housing facilities.  District Judge William M. Acker, Jr., ruling June 16 in Thomas v. Osegueda, 2015 U.S. Dist. LEXIS 77627, 2015 WL 3751994 (N.D. Alabama), rejected the argument that the court would not have jurisdiction of any sexual orientation discrimination claim under the FHA.

James Earl Thomas filed suit against Carlos Osegueda, a regional director for H.U.D., and Christian Newsome, a claims investigator, for refusing to process his discrimination claim.  Judge Acker’s decision says little about the nature of the underlying claim, other than to state that Thomas claims he was discriminated against by Aletheia House, a recipient of federal housing funds, “because he is not gay.”   According to Acker, Thomas claimed that “he was discriminated against based on his conformity to male stereotypes, such as stereotypes regarding cooking and buying furniture.”  The reference to male stereotypes was undoubtedly an attempt to shoehorn his claim into the sex stereotyping theory, under which courts construing other federal sex discrimination laws have found some basis for extending protection to sexual orientation discrimination litigants.

Thomas filed a petition seeking a writ of mandamus, a court order directing Osegueda and Newsome to process his claim.  On January 26, Acker issued a memorandum opinion granting the petition and ordering Osegueda and Newsome to respond with an explanation of why a hearing on the matter was not required.  They responded on March 13, asking Judge Acker to reconsider his opinion and to dismiss Thomas’s petition for lack of jurisdiction, arguing that the FHA “does not give” the agency “jurisdiction to investigate and prosecute complaints raising allegations of discrimination based on sexual orientation.”  This required Acker to get into the question whether the FHA bans sexual orientation discrimination.

He pointed out that in the past courts had routinely dismissed sexual orientation discrimination claims under federal sex discrimination statutes, but that the Department of Housing and Urban Development (HUD), the enforcing agency for the FHA, “has taken several steps to clarify and reinforce the fact that certain acts of discrimination based on sexual orientation are in fact within its jurisdiction.”  Although Congress has never amended any of the federal sex discrimination laws to explicitly add “sexual orientation” to the forbidden grounds for discrimination, “HUD has taken an increasingly expansive view of its delegated authority under the FHA relating to discrimination based on sexual orientation,” Acker wrote.

HUD issued a guidance document in 2010 which stated that “while the [FHA] does not specifically include sexual orientation and gender identity as prohibited bases … [an] LGBT person’s experience with sexual orientation or gender identity discrimination may still be covered by the [FHA].”  On February 3, 2012, HUD “published a final regulation, the Equal Access Rule, to implement ‘policy to ensure that its core programs are open to all eligible individuals and families regardless of sexual orientation, gender identity, or marital status.’  While the new regulation made various minor regulatory revisions to effectuate the rule’s broader policy goal, the core provision of this new rule revised the eligibility requirements for HUD-assisted or insured housing to now require ‘such housing shall be made available without regard to actual or perceived sexual orientation, gender identity, or marital status.'”  In explaining the coverage for sexual orientation, the agency said, “certain complaints from LGBT persons would be covered by the Fair Housing Act . . . including discrimination because of nonconformity with gender stereotypes.”  The agency also explained that it could investigate and enforce such claims “as sex discrimination.”  HUD also published an “interpretive document” on August 20, 2014, giving as an example of such a claim the harassment of a gay man by a maintenance worker at a public housing complex because of his effeminate demeanor.

“Given these recent agency actions broadly interpreting the jurisdictional scope of HUD acting under the FHA based on sexual orientation,” wrote Acker, he would have to determine whether “HUD’s interpretation of its authority squares with the statutory language of the FHA.”  He concluded that it did, so long as HUD did not seek to assert its jurisdiction to sexual orientation claims that did not include a plausible allegation of sex stereotyping.  The sex stereotyping theory was recognized by the Supreme Court in 1989 in the case of Price Waterhouse v. Hopkins, where a masculine-acting woman was challenging an accounting firm’s refusal to make her a partner.  Since then, and most emphatically since President Obama took office in 2009, federal agencies have been advancing the sex stereotyping theory to find a basis for protecting gay and transgender people from discrimination.  The Equal Employment Opportunity Commission, which enforces Title VII of the Civil Rights Act of 1964, recently sent a memorandum to its regional offices similarly suggesting that they could accept employment discrimination claims from gay people using this theory in appropriate cases, and some federal district courts have refused to dismiss Title VII sex discrimination charges filed by gay men using this theory.

“These types of expanded protections for such individuals under the FHA is directly rooted in non-conformity with male or female gender stereotypes, and not directly derivative of sexual orientation as an independent and separate ground for protection,” wrote Acker.  “Considering the deference due by the court to agency interpretations,” he continued, “HUD’s narrow tailoring of jurisdiction for discrimination based on sexual orientation to protections for gender stereotyping in its interpretation of the FHA is a permissible reading of ‘sex.'”

However, this was no help to James Earl Thomas, who had alleged discrimination under a housing program because he “is not gay.”  “Thomas does not petition under a theory of gender non-conformity but rather relies on sexual orientation as the sole basis for discrimination separate and independent of gender,” wrote Acker, emphasizing that Thomas claimed he was discriminated against because of his “conformity to male stereotypes,” not because of a departure from such stereotypes.  “Even under HUD’s expanded interpretation of the FHA for gender stereotyping, these allegations are outside the scope of the FHA’s ‘sex’ discrimination protection and therefore HUD lacks the jurisdiction for respondents to act upon them.”

There is a certain illogic to this decision.  Surely, if a man suffers discrimination because he conforms to male stereotypes, wouldn’t that be a form of sex discrimination?  But, as Judge Acker pointed out, Thomas, who was representing himself in this case, insisted that he was suffering discrimination because “he is not gay,” and thus was claiming sexual orientation discrimination, not sex discrimination.

Turning briefly to a possible claim under the Equal Access Rule, Acker pointed out that the two named defendants did not have authority to accept and investigate discrimination claims under that rule, which applies to recipients of federal funding such as Aletheia House and is administered by a different office of the agency.  He observed that HUD had forwarded Thomas’s complaint to the relevant agency, since his charged involved a federally-assisted housing program, and since that office had not yet rejected his claim, a care for relief against a refusal to investigate would be premature.

Federal Court Refuses to Dismiss HIV-Related Housing Discrimination Claim Against LeFrak Realty Organization

Posted on: December 17th, 2013 by Art Leonard No Comments

U.S. District Judge Denise Cote has refused to dismiss a discrimination case brought by a person living with HIV, identified in court papers as L.C., and the Fair Housing Justice Center against a major New York City realtor, Lefrak Organization and its subsidiary, Estates NY Real Estate Services, Inc.  Judge Cote’s December 13 ruling found that that plaintiffs had successfully alleged facts supporting a claim that LeFrak’s rental practices at its LeFrak City apartments in Queens discriminate against people living with HIV who are clients of New York City’s HIV/AIDS Services Administration (HASA), a division of the City’s Human Resources Agency.  L.C. v. LeFrak Organizations, Inc., 2013 U.S. Dist. LEXIS 175756.

According to the complaint, L.C. was notified by HASA that she would be entitled to economic support to rent an apartment up to a monthly rent of $1,100.  Under HASA’s policies, L.C. was supposed to locate and apply to rent a suitable apartment and, upon approval by HASA, the agency would issue a check to the landlord for the first month’s rent and a voucher to cover an equal amount as a security deposit, and HASA would subsequently issue monthly checks to the landlord to cover the rent.  HASA also covers any necessary broker fees.

Thus notified by HASA, L.C. went to the LeFrak City website, determined that apartments were available there within the specified price range, and called the rental office.  When she identified herself as a HASA client, she was referred to “an office on Queens Boulevard that deals with applicants who will be using government benefits programs to pay their rent,” according to Judge Cote’s opinion.  There, L.C. encountered the Catch-22 in this situation.  LeFrak’s agents would not show L.C. an apartment until she provided a letter from HASA confirming that they would pay a specific amount for the rent, but HASA does not issue such letters before a client has actually been approved to rent a particular apartment.  L.C. explained to the LeFrak agent that she needed to apply for the particular apartment and have it approved by HASA before HASA would issue a letter, but the LeFrak people said they would not process L.C.’s application until they had a letter from HASA.

L.C. then met with her HASA case manager, who confirmed with her supervisor that HASA does not issue such letters.  L.C. then visited Housing Works, and a Housing Works manager called LeFrak.  The LeFrak representative confirmed at that time that they had apartments available for around $1,100 a month, but that a letter from HASA had to be submitted before they would process L.C.’s application.

The other plaintiff in the case, Fair Housing Justice Center, sent “testers” to LeFrak to confirm what their policies are.  LeFrak was then listing three apartments at LeFrak City within the $1,100 price range.  One tester told the LeFrak staff that she was employed, earning $46,000 a year, and looking for a studio or one-bedroom in LeFrak City in that price range.  She was promptly shown a floor plan and given an application to complete, and no request for documentation of her income was made at that time.  Two other testers told the LeFrak people that they were inquiring for a brother who was living with AIDS and would be receiving a housing subsidy from HASA, and in both cases they were referred to the special office for renters using government program subsidies.  They confronted the same response as L.C..  They could not submit an application or see an apartment until they submitted the requested “papers” including a HASA commitment letter.  They were also required to wait for LeFrak to do a criminal and credit background check.   (This had not been requested of the tester who said she was employed.)  The testers also noted that the office to which they were referred had a glass window separating the applicants from the LeFrak staff, unlike the regular rental office.

L.C. and FHJC filed their federal discrimination lawsuit on April 25, 2013, asserting claims under the federal Fair Housing Act (FHA), which forbids housing discrimination against people with disabilities, and the New York City Human Rights Law, which forbids discrimination not only against people with disabilities but also discrimination based on a potential renter’s source of income.  The complaint claimed both intentional discrimination (disparate treatment) and maintenance of procedures that had a disproportionate adverse effect on people with disabilities (disparate impact).

LeFrak moved to dismiss the case, claiming that it did not intentionally discriminate against people with HIV.  LeFrak argued that the FHA claims had to be dismissed because they failed to allege that LeFrak had discriminated because of HIV status.  They asserted that the story told in the complaint was one of treating people differently depending upon their source of income to pay rent, and that this did not violate the FHA.  Rejecting this argument, Judge Cote wrote that the complaint “alleges that LeFrak understood that HASA clients, alone of all persons requiring government housing subsidies, would be unable to produce a source-of-income letter at the application stage of the rental process.  This is sufficient to give the defendants fair notice of the plaintiffs’ theory that LeFrak intentionally discriminated against L.C.”

Judge Cote also found that plaintiffs could maintain an action under another provision of the FHA which refers not only to the actual rental of housing but also to the “terms, conditions or privileges” attached to housing.  For example, refusing to let L.C. see an available apartment or floor plan can itself be the basis of a discrimination claim, so the case is not solely based on a denial of a rental application.

Judge Cote found that the complaint could also qualify under the disparate impact theory, by showing that LeFrak maintained procedures that made it particularly difficult for HASA clients to rent apartments, thus having a “disparate impact” against persons with HIV.   LeFrak objected that the plaintiffs failed to provide statistics showing the disparate impact, but Judge Cote found that they had alleged that out of 8 million New Yorkers, 67,000 are living with HIV and almost half of them are HASA clients, the “vast majority” of whom are using the HASA housing subsidy program.  “This adequately puts the defendants on notice that plaintiffs’ alleged basis for disparate impact is that the percentage of the HIV population in New York City on housing subsidies exceeds the percentage of non-HIV New York City population on housing subsidies.”

LeFrak argued that L.C. should be challenging HASA’s refusal to provide the necessary commitment letters, rather than LeFrak’s refusal to process rental applications without receiving such letters.  Judge Cote rejected this argument as well, pointing out that LeFrak had not argued that HASA was a “necessary party” to this case, so this argument did not entitled LeFrak to get the claims against itself dismissed.

The judge’s analysis of the New York City Human Rights Law claims was straightforward.  Since the city law outlaws the same kind of housing discrimination based on disability that is outlawed by the FHA, the same factual allegations supported the city law discrimination claim.  That the city law also forbids housing discrimination based on source-of-income, a relatively recent addition to the law, makes the city law claim even stronger in this case, especially since LeFrak argued in opposition to the federal claim that its policies discriminated based on source-of-income, not disability.  In fact, LeFrak’s argument sounds like a concession that its policy violates the city law.

LeFrak argued that its policy of requiring rental applicants to provide income documentation before renting an apartment was “legitimate and applied to all applicants.”  Cote pointed out that the plaintiffs were not denying that, but rather were challenging LeFrak’s refusal to show apartments or accept rental applications before documentation of income was presented, because this policy “served as an impediment that prevented L.C. from ‘securing’ an apartment.”  Judge Cote observed that the complaint makes the claim that LeFrak’s differential approach on documentation between applicants of means and applicants who are relying on government programs establishes “a prima facie case of disparate treatment based on source of income,” a direct violation of the city law.  Judge Cote also found that the plaintiffs had alleged necessary facts to put their city law case in play, by showing that if LeFrak had processed L.C.’s application and conditionally approved her as a tenant, HASA would have provided the documentation necessary to complete the rental process.

Finally, Cote rejected LeFrak’s argument that because the city law applies to discrimination in rentals but doesn’t mention any right for a member of the public to “inspect” an apartment before applying for it, LeFrak could not be held liable for a violation merely because it refused to allow inspections of vacant apartments by public housing subsidy applicants who had not yet presented written confirmation of their housing benefits.  Cote pointed out that the city law has a provision mandating “liberal construction,” and found that any obstruction put in the way of a potential client could come within the ambit of the anti-discrimination law.

Attorneys Armen Merjian from Housing Works and Diane Lee Houk from the law firm Emery Celli Brinckerhoff and Abady represent the plaintiffs L.C. and FHJC.   LeFrak is represented by Randy Mastro and other attorneys from Gibson, Dunn & Crutcher.