Case 1:14-cv-06410-BMC Document 1 Filed 10/30/14 Page 1 of 43 PageID #: 1

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK

THE FORTUNE SOCIETY, INC. 29-76 Northern Blvd Long Island City, NY 11101
Plaintiff,
v.
SANDCASTLE TOWERS HOUSING DEVELOPMENT FUND CORP. 1465A Flatbush Ave. Brooklyn, NY 11210
SARASOTA GOLD LLC 1407 48th Street Brooklyn, NY 11219
and
WEISSMAN REALTY GROUP LLC 45 Broadway, 12th Floor New York, NY 10006

Civil Action No. 1:14-cv-6410 COMPLAINT JURY DEMAND

Defendants.

NATURE OF THE ACTION 1. The Fortune Society (“Fortune”) brings this suit pursuant to the Fair Housing Act of 1968, as amended, 42 U.S.C. §§ 3601 et seq., for injunctive, monetary and declarative relief against Defendants Sandcastle Towers Housing Development Fund Corporation (“HDFC”), Sarasota Gold LLC (“Sarasota Gold”), and Weissman Realty Group LLC (“Weissman”) for engaging in a pattern or practice of illegal discrimination on the basis of race and color at The Sand Castle, a multi-building apartment complex they own and manage in Queens, New York.

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Specifically, Defendants maintain and enforce a policy of automatically excluding any person with a record of a criminal conviction from renting or living in an apartment at The Sand Castle. Defendants explicitly confirmed this policy to Fortune twice in the summer of 2013. The policy excludes all such people regardless of the nature of the conviction, the amount of time that has lapsed since the conviction, evidence of rehabilitation, or any other factor related to whether a specific person poses any threat to safety. Pursuant to this stated policy, Defendants repeatedly refused to permit Fortune to rent apartments at The Sand Castle on behalf of its clients because those clients have criminal histories.1 Defendants’ policy has the purpose and effect of discriminating against African Americans and Latinos, including Fortune’s clients, in violation of the Fair Housing Act and New York State and City law.
2. Fortune is a not-for-profit organization that for nearly fifty years has been dedicated to the successful reentry and reintegration of formerly incarcerated individuals in New York City (“the City”). It is one of the leading organizations in the country addressing and helping individuals overcome reentry issues. Fortune has been lauded nationally and internationally for the innovation, quality, and effectiveness of its programs. Just this summer Fortune’s Senior Vice President of Programs, himself a formerly incarcerated African-American man, was named a “Champion of Change” by the White House for his work at Fortune.
3. Fortune serves approximately 5,000 clients a year. Approximately 95% of its clients are African-American or Latino. Fortune provides comprehensive services to these clients by operating housing, education, employment, health, and case management programs, among others.
1 For purposes of this Complaint, “criminal history” and “criminal record” refer to a prior criminal conviction.
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4. One of Fortune’s principal tasks is to secure housing for its clients and their families. Fortune provides temporary and permanent housing for hundreds of formerly incarcerated individuals each year. It does so by running “scattered-site” programs that place clients in private rental housing throughout the City and by operating two housing facilities itself in West Harlem. The two facilities are The Fortune Academy and Castle Gardens.
5. Many of Fortune’s housing programs work as a pipeline, with individuals moving from emergency to “phased permanent” to permanent housing as part of their successful reintegration. Being able to move people to the end of the pipeline opens up more space at the beginning and allows Fortune to serve more clients.
6. In some of Fortune’s scattered-site programs, Fortune leases apartments and pays the rent itself. Its clients provide some reimbursement, which encourages a sense of personal investment and responsibility. Some of Fortune’s scattered-site programs serve specific segments of the formerly-incarcerated population, such as people who are HIV-positive, or certain regions of the City. Fortune has developed relationships with over 100 landlords to facilitate its scattered-site housing and regularly seeks out new locations for these programs.
7. The Fortune Academy includes an 18-bed emergency housing unit and a “phasedpermanent” unit that serves 41 people who transfer from the emergency unit when Fortune staff determine they are ready to live independently, subject to the availability of space. Individuals stay in the phased-permanent housing until they are ready to transition to permanent housing elsewhere. Such permanent housing is often located through Fortune’s scattered-site programs. At Castle Gardens, Fortune provides affordable permanent housing that integrates formerlyincarcerated people with other low-income families. The demand for space at Fortune Academy and Castle Gardens substantially exceeds the space that is available.
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8. In the summer of 2013 and again in early 2014, Fortune tried to rent apartments for its clients at The Sand Castle under one of its scattered-site programs that required that apartments be located in Queens. The Sand Castle is a four-building apartment complex with over 900 rental units in Far Rockaway, Queens. It is owned and managed by Defendants. Fortune wanted to rent units at The Sand Castle because the complex is an ideal fit for its clients: among other things, The Sand Castle suits Fortune’s clients well because it is located in a safe and racially diverse community that is readily accessible to public transportation, which its clients rely on heavily. In addition, units at The Sand Castle fit the budget for the scattered-site program.
9. When Defendants learned that Fortune serves formerly incarcerated individuals who would live in the apartments Fortune wanted to rent, they refused to rent apartments to Fortune. This refusal, they told Fortune, was because they maintain and enforce a policy prohibiting anyone with a criminal record from renting an apartment or living at The Sand Castle. This type of “blanket ban” policy has become increasingly common in housing due to the increased accessibility of inexpensive background checks via the Internet. As a direct result of Defendants’ repeated application of their blanket ban policy against Fortune, some of Fortune’s clients have been forced to remain homeless or in substandard or unsafe housing substantially longer than they otherwise would have while Fortune searched for alternative housing. In several cases, clients found eligible for scattered-site housing in the Queens program were residing in The Fortune Academy and had to remain there longer than necessary, thus occupying beds that could have been utilized to house other homeless individuals.
10. Defendants’ actions have directly and significantly diminished and frustrated Fortune’s ability to provide safe and stable housing for its clients, which is a central part of its
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mission of assisting formerly-incarcerated individuals with reentry and reintegration. In addition to frustrating Fortune’s ability to provide housing to its clients, these actions have caused Fortune to expend substantial additional resources to identify alternative housing options for its clients and to increase advocacy efforts, and forced Fortune to divert resources from other programmatic activities to counteract Defendants’ conduct.
11. Locally and nationally, blanket bans like the one maintained and enforced by Defendants against Fortune are discriminatory and have a clear and unlawful disparate impact on African Americans and Latinos. The disproportionate rates of conviction and incarceration of African Americans and Latinos, as compared to whites, are well-documented.2 This disproportionality is clear in New York City, New York State, and the United States as a whole. African Americans and Latinos are likewise significantly overrepresented compared to whites among individuals released from prison each year, i.e., Fortune’s clients. Banning people from safe and affordable housing based solely on a criminal conviction thereby has a predictable and large adverse impact on African Americans and Latinos. In the analogous context of employment bans, this is exactly what the United States Equal Employment Opportunity Commission (“EEOC”) has found by analyzing national criminal records data.3
12. Analysis of criminal records and other data likewise shows that the blanket ban maintained by Defendants at The Sand Castle has a severe disparate impact on the basis of race and color. African-American men who live in New York City and satisfy Defendants’ other residency requirements for The Sand Castle are at least three times as likely as whites to be excluded by Defendants’ prohibition against people with records, and Latino men are almost four
2 “White” is used herein to refer to non-Hispanic Caucasians. 3 See generally U.S. Equal Emp’t Opportunity Comm’n, EEOC Enforcement Guidance, Number 915.002 (Apr. 25, 2012), http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm.
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and one-half times as likely as whites to be excluded. The disparities may actually be much greater because these figures are based on a conservative statistical analysis.
13. Under the Fair Housing Act and New York law, a policy that has a disparate impact may be permissible if it is necessary to achieve a legitimate business purpose that cannot be satisfied with a less discriminatory alternative. That is not the case here. A clear and obviously less discriminatory alternative for dealing with any potential concerns raised by applicants with criminal records is available to Defendants – one that is already established in the area of employment discrimination law and regulation.
14. Instead of applying a blanket ban, Defendants could assess potential residents with criminal records individually by considering factors directly relevant to appropriate qualifications for tenancy. This could include the nature of the conviction or(?) conduct, how long ago it occurred, the age of the person at the time of the conviction, post-conviction and post-release conduct, evidence of rehabilitation, evidence of any current threat to safety, letters of recommendation, the individual’s history as a tenant and as a whole, and other factors. The EEOC applies a presumption in the employment context that, because of the racially disparate impact of blanket bans, precisely such an individualized assessment is required by law and sufficient to protect legitimate interests such as safety.4 The EEOC’s sound rationale applies with equal force to housing.
15. Through an individualized assessment, Defendants would maintain the ability to review carefully all Sand Castle applicants while permitting prospective tenants who have criminal records, but pose no realistic threat to the community, to obtain housing. This more tailored approach would protect public safety equally well, yet it would be less discriminatory
4 Id.
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and exclusionary because it would reduce the number of African Americans and Latinos prevented from securing housing at The Sand Castle.
16. Using individualized assessments to reduce the impact of blanket bans, including Defendants’ blanket ban at The Sand Castle, is crucial both for individuals who were formerly incarcerated and for the health of our communities. Recidivism rates are much higher for reentrants who do not find safe and permanent housing, and recidivism impacts the whole surrounding community. For Fortune’s clients and other reentrants, successful reintegration greatly depends on having a suitable home. Quite properly, housing has been called the “lynchpin that holds the reintegration process together.”5
17. The importance to individuals and communities of promoting successful reintegration by meeting the housing needs of the formerly incarcerated has grown alongside the rapid growth in the number of people imprisoned in the United States. In 1980, 300,000 people in the United States were imprisoned. Today over 2.3 million are imprisoned, many for nonviolent crimes. Nearly everyone who is currently imprisoned will be released and will need to find housing. Moreover, the pace of people being released will increase in the near term because the United States Sentencing Commission voted unanimously to reduce sentencing ranges for certain drug offenses and to apply the changes retroactively where justified by individualized consideration, and because of a large-scale initiative by the United States to expedite consideration of clemency for the many non-violent, low-level federal offenders who have already served substantial time in prison.6
5 Jeremy Travis, But They All Come Back: Facing Challenges of Prisoner Reentry 219 (2005). 6 See generally U.S. Sentencing Comm’n, Office of Research and Data, Summary of Key Data Regarding Retroactive Application of the 2014 Drug Guidelines Amendment (July 25, 2014), http://www.ussc.gov/sites/default/files/pdf/research-and-publications/retroactivity-analyses/drug-guidelines-
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18. Blanket bans maintained by Defendants and other landlords, however, present formidable and often insurmountable obstacles for formerly incarcerated individuals like Fortune’s clients. By blocking the path to safe, permanent, and affordable housing, these bans also block the path to social and economic stability for many otherwise qualified and deserving people without regard to the nature of their past crime or how far they have since come. Blanket bans also create a chilling effect, discouraging potential tenants from even applying for tenancy in the first place. Eliminating such unnecessary obstacles from their paths is both sound policy and required by the Fair Housing Act.
19. Defendants’ blanket ban is based on racially discriminatory stereotypes about those with criminal records. Indeed, the discriminatory impact of Defendants’ policy is so large, and the less discriminatory alternative so obvious, that unlawful racially discriminatory intent can be inferred. Fortune contends that Defendants knew that people with criminal records, including Fortune’s clients, are disproportionately African-American and Latino. Defendants understood the adverse impact their policy has on the racial make-up of its property, and deliberately and purposefully pursued that outcome.
20. Defendants’ deliberate and purposeful conduct is consistent with their other efforts to remake the image of The Sand Castle after Defendant Sarasota Gold purchased it in 2006. Defendants employed measures to attract wealthier white tenants and gentrify the building, including advertisements emphasizing white models. These efforts are consistent with engaging in intentional discrimination in order to limit the number of minority tenants in the building.
amendment/20140725-Drug-Retro-Analysis.pdf. See also Dep’t of Justice, Office of Public Affairs, Announcing New Clemency Initiative, Deputy Attorney General James M. Cole Details Broad New Criteria for Applicants (April 23, 2014), http://www.justice.gov/opa/pr/announcing-new-clemency-initiative-deputy-attorney-general-james-mcole-details-broad-new.
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21. Fortune brings this action to address Defendants’ discriminatory and unlawful conduct at The Sand Castle and to redress the harm it has suffered and will continue to suffer as a direct result of that conduct absent relief.
PARTIES 22. Plaintiff The Fortune Society, Inc. is a not-for-profit corporation organized under the laws of New York State with headquarters in Long Island City and offices throughout New York City. Fortune is dedicated to assisting formerly incarcerated individuals and their families through advocacy and the provision of reentry services, including housing, employment assistance, substance abuse counseling, and other services. Fortune serves approximately 5,000 people annually. 23. Defendant Sarasota Gold LLC (“Sarasota Gold”) is a New York limited liability company headquartered in Brooklyn, NY. Its address for service of process on file with the New York State Department of State is 1407 48th Street, Brooklyn, NY 11219. Sarasota Gold was formed on September 1, 2006, and since September 2006, it has owned or held all beneficial and equitable interest in the complex known as “The Sand Castle” located at 711 Seagirt Avenue in Far Rockaway, Queens. 24. Defendant Sandcastle Towers Housing Development Fund Corporation (“HDFC”) is a not-for-profit corporation established pursuant to Article XI of the New York State Private Housing Finance Law in June 2013 and headquartered in Brooklyn, NY. HDFC, as the nominee for Sarasota Gold, has held legal or record title to the fee interest in The Sand Castle since June 27, 2013. HDFC was formed on June 11, 2013 and its address for service of process is 1465A Flatbush Avenue, Brooklyn, NY 11210.
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25. The same person (Aryeh Ginzberg) serves as the President of Defendant HDFC and the Manager of the company that serves as Defendant Sarasota Gold’s Sole Member.
26. Defendant Weissman is a management company employed by Defendants Sarasota Gold and HDFC to operate and manage The Sand Castle on their behalf. Weissman is headquartered in Lawrence, NY and was formed on April 18, 2005. Its address for service of process is 45 Broadway, 12th floor, New York, NY 10006. On one or more occasions when attempting to lease apartments at The Sand Castle, the people Fortune staff members spoke with were, upon information and belief, employees and/or agents of Weissman.
27. Weissman is, and upon information and belief has been at all relevant times, the employee and/or agent of Defendants Sarasota Gold and HDFC such that Defendants Sarasota Gold and HDFC are liable for its acts alleged herein.
28. In acting or omitting to act as alleged herein, each Defendant was acting through its employees and/or agents, and is liable on the basis of the acts and omissions of its employees and/or agents.
29. In acting or omitting to act as alleged herein, each employee or officer of each Defendant was acting in the course and scope of his or her actual or apparent authority pursuant to such agencies, or the alleged acts or omissions of each employee or officer as agent were subsequently ratified and adopted by each Defendant as principal.
JURISDICTION AND VENUE 30. This Court has jurisdiction over this matter pursuant to 42 U.S.C. § 3613. This Court also has jurisdiction under 28 U.S.C. §§ 1331 and 1343 because the claims alleged herein arise under the laws of the United States. This Court has supplemental jurisdiction over the New
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York State Human Rights Law (“NYSHRL”) and New York City Human Rights Law (“NYCHRL)” claims pursuant to 28 U.S.C. § 1367.
31. Venue is proper in this district under 28 U.S.C. § 1391(b) because Defendants conduct business in and are residents of the district and a substantial part of the events and omissions giving rise to the claims occurred in the district.
FACTUAL BACKGROUND I. THE FORTUNE SOCIETY AND ITS ATTEMPTS TO RENT APARTMENTS
FOR ITS CLIENTS AT THE SAND CASTLE A. Fortune’s Mission and Programs 32. Founded in 1967, The Fortune Society’s mission is to help incarcerated and formerly incarcerated individuals become contributing members of society and to offer alternatives to incarceration. Fortune offers a holistic array of programs for formerly incarcerated, low-income persons in New York City through a “one-stop shop” model of services that includes housing, case management, counseling, education, employment services, substance abuse treatment, family services, health services, and mental health services, among others. Fortune routinely engages in education and advocacy to promote the creation of a fair, humane, and truly rehabilitative correctional system. 33. Fortune serves approximately 5,000 individuals annually. African Americans and Latinos comprise over 95% of Fortune’s clients. 34. Fortune is widely regarded as one of the leading organizations in the country confronting the myriad reentry issues faced by formerly incarcerated individuals. Fortune’s programs are recognized nationally and internationally for their innovation, quality, and effectiveness, including in reducing rates of recidivism. Just this summer the White House named Fortune’s Senior Vice-President of Programs a “Champion of Change” for his
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effectiveness in helping formerly incarcerated men and women achieve and maintain employment. Also this summer, Governor Cuomo appointed Fortune’s CEO to the new statewide Council on Community Re-Entry and Reintegration. Fortune’s housing has been funded as a Special Project of National Significance by the United States Health Resources and Services Administration and the United States Department of Housing and Urban Development (“HUD”) and Fortune has received accolades from numerous organizations as a provider of model reentry programs.
35. Because of the vital importance of safe and stable housing to successful reentry, one of Fortune’s principal tasks is to secure housing for its clients and their families. This is central to Fortune’s mission. Each year Fortune provides temporary or permanent housing for more than 300 formerly incarcerated people.
36. Many of Fortune’s housing programs, described immediately below, work together as a pipeline. Clients move from emergency to phased-permanent units at the Fortune Academy, and then to permanent housing. Moving clients from temporary to permanent housing is of critical importance to this process. By helping clients who are ready to live independently move from Fortune’s temporary housing to permanent housing, Fortune creates additional space in its temporary housing programs. Without this additional space, Fortune cannot serve new clients in need of emergency or phased-permanent housing. Fortune always faces a backlog of people who need its help in securing such housing.
1. Emergency and Phased-Permanent Housing: Fortune Academy 37. The Fortune Academy is a housing facility in West Harlem that is owned and operated by The Fortune Society. The Fortune Academy offers both emergency and phasedpermanent housing for approximately 60 formerly incarcerated individuals who are homeless.
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38. In addition to providing housing, The Fortune Academy works with participants to develop needed tools for social reintegration, employment, independence, sobriety, and the transition to the private mainstream housing market. Through these extensive reentry services and programs, Fortune Academy residents learn how to address the issues that led to their incarceration and homelessness. This comprehensive approach is instrumental to the success of Fortune’s housing clients in achieving and maintaining positive, self-sufficient, and crime-free lives.
39. The Fortune Academy’s emergency housing unit includes 18 beds plus some overflow capacity. Rooms in the emergency unit house three to seven people at a time and do not include cooking facilities.
40. Demand for emergency beds at The Fortune Academy is always high because many people are released every week from jail and prison into local communities and have no viable housing options. The emergency unit is consistently filled to capacity, and Fortune is constantly forced to turn people away.
41. The emergency unit’s waiting list is frequently several months long. Making as many beds available as possible is critical to Fortune’s mission.
42. Fortune’s model is to move individuals housed in the emergency unit to transitional or permanent housing within 45 days, but individuals often stay for as many as eight or nine months, in part because there are so few affordable housing options available to the formerly incarcerated in New York City. This is due in significant part to blanket bans on people with criminal records imposed by private landlords.
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43. Fortune clients who have been in emergency housing and are assessed by Fortune Academy staff as ready to live independently are eligible for placement in the Academy’s phased-permanent unit if space is available.
44. The phased-permanent unit houses 41 people. Rooms in the phased-permanent program are apartment-style singles or doubles that include amenities such as cooking equipment.
45. When a vacancy opens in the phased-permanent unit, Academy staff select an individual from the emergency unit who has demonstrated his or her readiness to live more independently with the help of continued supportive services from Fortune.
46. Fortune clients housed in the phased-permanent unit typically remain there until they can make the transition to permanent housing. The process of finding and moving into permanent housing often takes a year or more, again in significant part because of blanket bans that exclude individuals with criminal histories from living in rental housing.
2. Permanent Housing: Scattered-Site Programs and Castle Gardens 47. Fortune also operates programs to provide safe and stable permanent housing for its clients, including several scattered-site programs. 48. Fortune’s scattered-site programs are initiatives through which Fortune places clients in private rental housing throughout New York City. Through these programs, Fortune has developed relationships with New York City landlords and management companies to identify safe and affordable apartments for clients who Fortune determines are ready to live independently. 49. Fortune places its scattered-site clients through a variety of methods. Some clients are placed in private housing owned or managed by landlords or management companies
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with which Fortune already has an established relationship. Other clients are placed in private housing with the assistance of a licensed real-estate broker retained by Fortune for that specific purpose. Housing specialists on Fortune’s staff also actively seek out new private landlords who are willing to house its clients.
50. Fortune itself often enters into residential leases with participating landlords. In these circumstances, Fortune is responsible for making all rental payments to the landlord. Scattered-site program participants then enter into an occupancy agreement with Fortune and partially reimburse Fortune for a share of the rent each month by paying 30% of their income to Fortune. Partial reimbursement facilitates a sense of personal investment and responsibility while maintaining affordability for Fortune’s clients.
51. The scattered-site programs are funded from a variety of public and private grants. The grants Fortune receives often have geographical or programmatic restrictions. This means that Fortune may only be able to use a grant to house clients in a particular area of the City or to assist only a specific subset of its client population, such as people who are HIVpositive. Potential participants in Fortune’s scattered-site programs are carefully evaluated by Fortune’s staff to assess their readiness for independent living and their fit for specific programs. If Fortune staff determine that an individual is an appropriate candidate for a program, Fortune’s housing specialists begin the process of helping that person find an apartment in the private rental market. Fortune’s own Castle Gardens is one option for clients who are ready for permanent housing, but it is a very limited one. Castle Gardens is a 114-unit residential building in West Harlem that Fortune opened in 2010. It provides homes and on-site social services for formerly-incarcerated people as well as other low-income families. Openings are infrequent and unpredictable, however. Like any other typical apartment building in New York City, once an
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individual becomes a Castle Gardens resident, he or she may remain there indefinitely. As a result, Fortune typically cannot look to Castle Gardens to solve its need to locate housing for clients who are prepared to succeed in permanent housing.
B. Fortune’s Inability to Rent Apartments for Clients at The Sand Castle Because of Defendants’ Blanket Criminal Record Ban
52. Due to the perpetual need to expand housing options for its prospective and current clients, Fortune’s staff is constantly searching for more private landlords willing to house Fortune clients through its scattered-site programs. As part of this search, Fortune attempted to place clients at The Sand Castle, a large apartment complex in Far Rockaway, Queens, which is owned by Defendants Sarasota Gold and HDFC and managed on the owners’ behalf by Defendant Weissman.
53. Defendant Sarasota Gold bought The Sand Castle in or around 2006 for $98 million. While the building had been largely occupied by seniors, the new owners planned an image makeover and raised their rents. Posters were placed in the lobby encouraging potential tenants to “Live the Life You’ve Always Dreamed.” Advertisements for the complex and The Sand Castle website featured smiling young, white, blond models. Unit floor plans were labeled with British-sounding references like “Ardsley,” “Dover,” and “Stanton.” Defendants’ goal was to present a more “upscale,” gentrified image, one that deemphasized the presence of minority neighbors.
54. Fortune became aware of The Sand Castle after receiving a housing assistance grant from New York State in 2013 that provides funding for exactly 25 residential units in Queens.
55. Through its research, Fortune determined that The Sand Castle would be an ideal site to house program participants. Specifically, The Sand Castle is located in a relatively safe
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and racially diverse area within the grant’s geographical limitation, and in a neighborhood in which there are already Fortune clients. Having a number of clients located in the same geographical area allows Fortune to more effectively utilize its case management staff by reducing travel time, reducing costs, and supporting greater intensity of services.
56. The waterfront property features numerous amenities, including a fitness center, supermarket, on-site medical facilities, and a doorman. The Jewish Association Serving the Aging has facilities located in the building. The Sand Castle is also convenient to public transportation relied upon by Fortune’s clients.
57. Additionally, and of critical importance to Fortune, The Sand Castle’s rents are affordable and fit well within Fortune’s grant budget. Studio apartments are available for as little as approximately $1,000 per month and one-bedroom apartments start at approximately $1,300 per month.
58. The Sand Castle has over 900 apartments and, upon information and belief, has had sufficient availability at all times relevant to this Complaint to provide units to Fortune and/or its clients.
59. In or around May 2013, in a transaction handled by Fortune’s then real-estate agent, Fortune entered into leases with Defendant Sarasota Gold for four apartments at The Sand Castle. Fortune is listed as the tenant for each apartment and is solely responsible for all rental payments pursuant to the terms of the lease agreements.
60. At the time that Defendants entered into these lease agreements with Fortune, The Sand Castle’s management knew that Fortune intended to use the units for its housing program and that it intended to sub-lease the apartments to program clients. The Sand Castle’s management did not know, however, the nature of the Fortune program or that Fortune served
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individuals with criminal records. Moreover, Defendants had no specific knowledge that Fortune’s sub-lessees had criminal records. The Sand Castle did not request any financial or other background information from Fortune about potential sub-lessees.
61. In or around July 2013, a Fortune housing specialist visited The Sand Castle’s leasing office to pick up keys for the apartments that had been leased to Fortune. While there, the housing specialist asked a Sand Castle employee about the possibility of Fortune leasing more apartments in the building for its clients. The employee responded that Fortune would need to contact building management. Fortune subsequently contacted The Sand Castle’s management on several occasions to explore the possibility of leasing additional apartments to house more Fortune clients. The individuals with whom Fortune staff members spoke on these occasions were, upon information and belief, employees or agents of Defendant Weissman.
62. During Fortune’s encounters with Weissman, Weissman learned that Fortune serves clients who have criminal records. Upon learning that Fortune’s clients have criminal records, Weissman immediately denied Fortune’s request to lease any more apartments at The Sand Castle. In doing so, Weissman explicitly and unequivocally told Fortune’s staff that The Sand Castle’s apartments are not available to people with criminal records.
63. The first of these discussions with Weissman took place in the summer of 2013 when a Fortune staff member spoke with Melissa Gursky, who was working in a Sand Castle management capacity. Fortune explained the organization’s mission and programs. In response, Ms. Gursky articulated The Sand Castle’s blanket ban policy, explicitly telling the Fortune staff member that The Sand Castle “does not house ex-offenders” (or similar words to that effect).
64. Also in the summer of 2013, a different Fortune staff member called Defendant Weissman. The Fortune employee explained that he worked for Fortune, that Fortune helps
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formerly incarcerated people find housing, and that Fortune was interested in leasing additional apartments at The Sand Castle. In response, Weissman stated that, “we don’t allow ex-offenders on the property and we do not rent to programs” (or similar words to that effect). The assertion that The Sand Castle does not rent to programs was demonstrably false because Defendants had leased apartments to Fortune in the spring knowing that it was a “program” (but not knowing the nature of the program).
65. In this same conversation, Fortune explained that the stated ban on the formerly incarcerated “appears to be discriminatory” (or similar words to that effect). Weissman responded by repeating that The Sand Castle does not accept formerly incarcerated individuals as residents. Fortune asked when the exclusionary policy was adopted, but Weissman refused to answer.
66. Although Defendant Weissman made clear that The Sand Castle does not permit residents with criminal records, Defendants agreed to honor the leases that Defendant Sarasota Gold had entered into with Fortune when it was unaware that Fortune’s clients were formerly incarcerated individuals.
67. Fortune again contacted The Sand Castle in early 2014 to determine whether Defendants had rescinded their blanket ban against people with criminal records and whether Fortune could lease additional apartments for its clients. Fortune’s employee spoke with Defendants’ agent or employee, Sruly Tress.
68. Fortune first confirmed that The Sand Castle had vacant apartments available for rent. Fortune told Mr. Tress that its clients have criminal backgrounds and reminded Mr. Tress that Fortune had clients who had been living in the building without incident. Mr. Tress explicitly acknowledged that The Sand Castle had not experienced any problems with those
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residents. Fortune made clear that it was willing to provide Defendants with any information they reasonably required regarding the backgrounds of individual tenants who would occupy the apartments that Fortune wanted to rent.
69. Mr. Tress responded by telling Fortune that tenants with criminal histories “scare” management and that criminal records are a “red flag.” He did, however, state that he would check with Defendants’ upper-level management about whether Fortune would be permitted to rent additional units.
70. Mr. Tress contacted Fortune shortly thereafter and told Fortune it would not be allowed to lease additional units in The Sand Castle. Mr. Tress told Fortune that The Sand Castle did not wish to conduct any further business with Fortune. II. DEFENDANTS’ REJECTION OF FORTUNE ON THE BASIS OF THEIR
BLANKET BAN AGAINST RESIDENTS WITH CRIMINAL RECORDS CONSTITUTES UNLAWFUL DISCRIMINATION 71. Facially neutral housing practices that have a disparate impact on the basis of race or color are prohibited by the Fair Housing Act unless they are necessary to achieve a legitimate business purpose that cannot be satisfied through a less discriminatory alternative practice. Blanket bans that automatically deny housing to people with criminal records, including the blanket ban maintained and enforced by Defendants at The Sand Castle, are unlawful under this standard. Such bans have a severe disparate impact on African Americans and Latinos, and any legitimate safety concerns can be satisfied through the less discriminatory alternative of giving individualized consideration to each potential resident’s circumstances and desirability as a tenant. 72. Moreover, the disparate impact of a facially neutral housing practice may be so stark and foreseeable that it demonstrates an unlawful intent to discriminate. That is also the
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case here. Because of well-known racial disparities regarding people with criminal records, Defendants’ blanket ban operates to disqualify otherwise qualified African Americans and Latinos from living at The Sand Castle at a rate at least three to four and one-half times the rate at which whites are disqualified. By implementing and maintaining their blanket ban at The Sand Castle, Defendants have been and continue to be engaged in intentional discrimination. Defendants’ ban is consistent with a policy of limiting the number of new minority tenants in the building.
73. Defendants have also made concerted efforts to change The Sand Castle’s image and to present it as more “upscale,” including through its print and online advertising, which prominently feature young, white men and women. These efforts are consistent with a policy of purposefully attracting white tenants and dissuading others from applying.
A. Blanket Bans in General Disproportionately and Severely Impact African Americans and Latinos at the National, State, and City Levels
74. Seven-hundred thousand inmates are released from confinement each year and become new targets of blanket bans.7 They are disproportionately African-American and Latino because the inmate population as a whole is disproportionately African-American and Latino, and 95% of inmates are eventually released.8
75. In New York State, more than 50% of the 25,060 inmates released in 2009 were African-American and over 25% were Latino.9 Yet the State’s general population is only 15.9%
7 Ann E. Carson, and William J. Sobel, U.S. Dept. of Justice, Prisoners in 2011, BJS Bulletin 1 (Dec. 2012), http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCMQFjAA&url=http%3A%2F% 2Fwww.bjs.gov%2Fcontent%2Fpub%2Fpdf%2Fp11.pdf&ei=uUNRVOy7GpHisATtwYHQAg&usg=AFQjCNF1I0 Yzt_-U9B6qCTGgbdSaYZKWvQ&sig2=RBCZAeieGV1zf4VvBijxnQ&bvm=bv.78597519,d.cWc. 8 Devah Pager, The Mark of a Criminal Record, 108.5 Am. J. of Sociology 937, 957-960 (2003). 9 See State of New York Dept. of Correction and Comm. Supervision, 2009 Inmate Releases: Three Year Post Follow-up 17 (2013), http://www.doccs.ny.gov/Research/Reports/2013/2009_releases_3yr_out.pdf.
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African-American and 17.6% Latino. Of the nearly 600,000 inmates released by the New York State Department of Correction from 1985 to 2009, over half were African-American and nearly one-third were Latino.10
76. Most of those released from New York State prisons – nearly two-thirds since 1985 – go to New York City to live.11 In 2011, New York City’s own Department of Correction released 88,000 people from its disproportionately African-American and Latino inmate population.12 The reentering population in New York City is therefore very large as well as disproportionately minority.
77. Unlike African Americans and Latinos, whites are incarcerated, and therefore released from jails and prisons, at rates significantly lower than their representation in the general population at the national, New York State, and New York City levels.
78. In addition to the large number of prisoners already being released, more than 46,000 additional federal prisoners are expected to become eligible for early release over the next several years. In April 2014, the United States Sentencing Commission voted unanimously to retroactively apply lower sentencing ranges for certain drug offenses. This will permit prisoners currently serving under these offenses to apply for early release. Approximately 75% of the prisoners eligible to apply are African-American or Latino.13
10 Id. 11 Id. 12 New York City Dept. of Correction, 2nd Quarter Fiscal Year 2012, Oct.-Dec. Report 2 (2012), http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCAQFjAA&url=http%3A%2F% 2Fwww.nyc.gov%2Fhtml%2Fdoc%2Fdownloads%2Fpdf%2Fdoc_at_a_glance.pdf&ei=_TRRVLsxp9qwBMnjgjg& usg=AFQjCNH34hX9wdSCxjAlRM1pqa72P6EWRg&sig2=cDD3q9NfHnhJ9kjSgD8rg&bvm=bv.78597519,d.cWc. 13 See supra note 6.
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79. The sheer number of people released from prison every year has skyrocketed largely because the incarcerated population in the United States has grown from 300,000 in 1980 to more than 2.3 million today. Approximately 10 million misdemeanor cases are filed every year.14 An additional 12 million people across the country have at least one felony conviction.15 At the same time, it has become much easier and common for housing providers to identify and ban people with criminal records because of the growth of companies that provide inexpensive background checks via the Internet.
80. The dramatic increase in the number of incarcerated people over these years is due largely to the widespread policy of pursuing non-violent drug offenders. Non-violent drug offenses alone account for two-thirds of the rise in the federal inmate population and more than half of the rise in state prisoners between 1985 and 2000.
81. The national prison population is now comprised overwhelmingly of individuals convicted of non-violent crimes. As of 2010, less than 10% of the federal prison population had been convicted of a violent crime.16
82. The massive increase in incarceration and in the number of people with criminal convictions has hit African Americans and Latinos especially hard. They are incarcerated at rates significantly disproportionate to their numbers in the United States general population.
14 Alexandra Natapoff, Misdemeanors, 85 S. CAL. L. REV. 1313 (2012). 15 See supra note 8 at 938. 16 Paul Guerino, Paige M. Harrison, and William J. Sabol, U.S. Dept. of Justice, Prisoners in 2010, BJS Bulletin 1 (Dec. 2011), http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCMQFjAA&url=http%3A%2F% 2Fwww.bjs.gov%2Fcontent%2Fpub%2Fpdf%2Fp10.pdf&ei=sjZRVPOEK_8sASRg4GACA&usg=AFQjCNEPKwaNRy9ORMlSwxCPr3ax_dIvGA&sig2=NCZDIUCD69T-y2raD44NA&bvm=bv.78597519,d.cWc
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Together, African Americans and Latinos comprise approximately 58% of all prisoners.17 However, they only make up 30% of the U.S. population.18
83. Men overwhelmingly comprise the nation’s inmate population and the disparities by race are especially stark among the male population. African Americans represent 13% of the United States male population but over 40% of the more than two million men currently incarcerated. Based on national incarceration data, the U.S. Department of Justice estimates that 1 in 3 African-American men will go to prison at some point in their lifetime. For Latino men, the rate of expected incarceration is 1 in 6. For white men, the figure is only 1 in 17.19 That is, African-American men are six times more likely to be incarcerated than white men, and Latino men are almost three times more likely to be incarcerated than white men.20
84. The above-referenced disparities persist across categories of crime, such as drug possession.
85. New York State and New York City race and incarceration statistics mirror the national data. Of the 54,235 inmates under State custody on January 1, 2013, 49.5% were
17 See generally NAACP, Criminal Justice Factsheet (2009), http://www.naacp.org/pages/criminal-justice-factsheet. 18 See U.S. Census Bureau, Statistical Abstract of the United States: 2012, Table 6 (2012), http://www.census.gov/compendia/statab/2012edition.html. 19 The Sentencing Project, Report of the Sentencing Project to the United Nations Human Rights Committee: Regarding Racial Disparties in the United States Criminal Justice System 1 (Aug. 2013), http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCMQFjAA&url=http%3A%2F% 2Fsentencingproject.org%2Fdoc%2Fpublications%2Frd_ICCPR%2520Race%2520and%2520Justice%2520Shadow %2520Report.pdf&ei=3zdRVLmII-nasATY64AI&v6u=https%3A%2F%2Fs-v6exp1ds.metric.gstatic.com%2Fgen_204%3Fip%3D50.242.218.113%26ts%3D1414608864553895%26auth%3Dfg6dk3vi tleto2x3z4zvhqfeu6bstw25%26rndm%3D0.46951305062984383&v6s=2&v6t=2831&usg=AFQjCNH3mh3wqJlc32 hwhRKt75FxmCBWrg&sig2=X1vmoYBfe_jMR-AbtEozqA&bvm=bv.78597519,d.cWc 20 Id.
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African-American and 24% were Latino.21 Yet the State’s general population is just 15.9% African-American and 17.6% Latino.
86. Of the 12,386 City inmates in custody on December 31, 2012, 57% were AfricanAmerican and 33% were Latino.22 The City’s general population, however, is only 25.5% African-American and 28.6% Latino.
87. Much of the disparity in New York is due to the fact that African Americans are significantly more likely than whites to be arrested for drug-possession. 23 For example, African Americans are four times as likely as whites to be arrested for marijuana possession despite research showing equivalent marijuana use; such arrests increased substantially in recent years in New York City due to stop and frisk police tactics.
88. The bottom line is clear: more people have criminal records than ever before, and those people are disproportionately African-American and Latino. In New York City, New York State, and the country as a whole, African Americans and Latinos are far more likely than whites to have a criminal record.
89. This means both that African Americans and Latinos are much likelier than whites to be barred from housing by automatic exclusions of people with records and that the absolute number of African Americans and Latinos affected is very large.
21 State of New York Dept. of Correction and Comm. Supervision, Under Custody Report: Profile of Inmate Population Under Custody on January 1, 2013 ii (Jan. 2013), http://www.doccs.ny.gov/Research/ Reports/2013/UnderCustody_Report_2013.pdf. 22 See supra note 12. 23 Ryan S. King, The Sentencing Project, Disparity By Geography: The War on Drugs in America’s Cities 15 (May 2008), http://www.sentencingproject.org/doc/publications/dp_drugarrestreport.pdf.
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90. The EEOC’s analysis of the impact of blanket bans in the employment context further confirms the disparate impact described here. The EEOC has concluded from analyzing national criminal records data that blanket bans have a disparate impact on the basis of race, and sets forth such a presumption in its Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964 (“Enforcement Guidance”).24
91. The EEOC’s conclusion applies to the disparate impact analysis here because blanket bans operate the same way in housing as they do in employment. In both contexts, applicants are uniformly and permanently excluded, whether from housing opportunities or employment. They are excluded based solely on the fact of a prior conviction, regardless of whether they pose a current risk.
B. Defendants’ Blanket Ban at The Sand Castle Disproportionately and Severely Impacts African Americans and Latinos in New York City
92. Just like blanket bans generally, Defendants’ specific blanket ban at The Sand Castle has a clear disparate impact on the basis of race. In fact, the disparate impact is even greater than a blanket ban would have at a national or statewide level because at the local level (i.e., New York City) incarceration rates for whites and minorities are even more disproportionate. Upon information and belief, The Sand Castle attracts potential tenants from all over New York City.
93. In addition to prohibiting residents with criminal records, The Sand Castle purports to require that potential tenants earn a minimum of $30,000 per year. But a stark disparate impact persists even when this purported requirement is taken into account.
24 See supra note 3. The prior version from 1990 reached the same conclusion and set forth the same presumption.
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94. Using data from the United States Census Bureau, Bureau of Justice Statistics, and Bureau of Labor Statistics, the likely racial composition of City residents who have criminal records and annual incomes near or above $30,000 can be and has been ascertained through an independent analysis.
95. The analysis shows that 12.2% of African-American men who live in New York City, and 18% of Latino men who live in the City, satisfy The Sand Castle’s income threshold but are nonetheless disqualified from living at The Sand Castle because of Defendants’ blanket ban.
96. The analysis further shows that only 4.1% of white men who live in the City satisfy the income threshold but are disqualified by the blanket ban.
97. This means that otherwise qualified African-American men are three times as likely as white men to be disqualified by Defendants’ blanket ban, and that Latino men are nearly four and one-half times as likely to be disqualified.
98. These figures, if anything, understate the disparities. Alternative statistical models indicate that the disparate impact caused by Defendants’ blanket ban may be significantly greater.
99. Defendants also purport to require potential tenants to have a credit score above 600. Because African-American and Latino City residents with incomes near or above $30,000 also typically have FICO scores over 600, credit score is not independently important for this analysis.25
100. The racially disparate impact on African Americans and Latinos of Defendants’ blanket refusal to provide housing to people with criminal records is clear from these findings.
25 Benjamin Levinger, Marques Benton, Stephan Meier, The Cost of Not Knowing the Score: Self-Estimated Credit Scores and Financial Outcomes, 32 J. Fam. Econ. 566, 569 (2011).
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101. Moreover, even if Defendants’ actions were viewed more narrowly as applying a blanket ban only against Fortune and its clients – notwithstanding Defendants’ explicit statement that the policy applies to everyone – that would still clearly have a racially disparate impact. Because Fortune’s clients are over 95% African-American and Latino and any income and credit score requirements are irrelevant since Fortune would be the actual renter, the disparate impact would be even greater than on the general population.
C. Giving Individualized Consideration to Applicants’ Circumstances Is a Less Discriminatory Alternative That Would Satisfy Any Concern About Safety at The Sand Castle
102. Defendants’ blanket ban is not necessary to achieve a legitimate nondiscriminatory business purpose. While public safety may be Defendants’ rationale for automatically excluding Fortune’s clients and all others with criminal records from housing, blanket bans are not necessary to satisfy that concern. Giving individualized consideration to each potential Sand Castle resident’s circumstances is a less discriminatory alternative to Defendants’ blanket ban and would serve public safety equally well.
103. Specifically, public safety at The Sand Castle can be protected through the use of individual assessments that consider the nature of an individual’s conviction, the amount of time since the conviction or release, and evidence of rehabilitation, among other factors. An individualized assessment allows people who have a criminal record, but who pose no realistic current or future threat to the community, to obtain housing. This more targeted and narrower approach both protects public safety and is less discriminatory and exclusionary because it reduces the number of minority applicants who are banned from The Sand Castle.
104. In the analogous employment context, the EEOC recognizes that individualized assessments are almost always required by law because they provide a less discriminatory
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alternative to blanket bans and are sufficient to protect legitimate interests like safety. The agency’s Enforcement Guidance advocates the use of “a targeted screen considering at least the nature of the crime, the time elapsed, and the nature of the job,” “notice to the individual that he has been screened out because of a criminal conviction; an opportunity for the individual to demonstrate that the exclusion should not be applied due to his particular circumstances; and consideration by the employer as to whether the additional information provided by the individual warrants an exception to the exclusion and shows that the policy as applied is not job related and consistent with business necessity.”26
105. The EEOC’s sound rationale applies equally to housing, including housing at The Sand Castle.
106. A federal court of appeals has also recognized that blanket bans violate antidiscrimination laws (specifically, in the context of employment) because their disparate impact cannot be justified by a business necessity such as safety. See Green v. Missouri Pacific Railroad, 523 F.2d 1290, 1293 (8th Cir. 1975). Green held that a company policy automatically rejecting all applicants with a conviction for an offense other than a minor traffic infraction caused a disparate impact based on race and could not be justified by business necessity. The Eighth Circuit noted that it “could not conceive of any business necessity that would automatically place every individual convicted of any offense, except a minor traffic offense, in the permanent ranks of the unemployed.” Id. at 1298.
107. Recent correspondence from HUD suggests it agrees that blanket bans in housing are not necessary to achieve a legitimate interest and constitute unlawful discrimination on the basis of race.
26 See supra note 3.
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108. In a 2011 letter to public housing authorities across the country, the HUD Secretary and the Assistant Secretary for Public and Indian Housing emphasized the importance of “helping ex-offenders gain access to one of the most fundamental building blocks of a stable life—a place to live.” The letter makes clear that beyond the very limited, categorical exclusion of individuals who were convicted of manufacturing methamphetamine on the premises of federally assisted housing and sex offenders who are subject to a lifetime registration requirement, public housing authorities enjoy “broad discretion” to “consider all relevant information, including factors which indicate a reasonable probability of favorable future conduct.” Further, the letter provides that public housing authorities “should take into consideration,” for example, evidence of rehabilitation and participation in counseling programs.
109. In making 46,000 drug offenders eligible to apply for early release from prison, the United States Sentencing Commission unanimously concluded that individual assessments of each prisoner will suffice to protect public safety. Specifically, judges will consider a range of factors when evaluating each early-release application, including the nature and circumstances of the offense, the offender’s characteristics, deterrence, and the offender’s potential threat to society.27 The Commission emphasized that this “measured approach” will “protect public safety by enabling appropriate consideration of individual petitions by judges.”28 The Commission thus has endorsed individualized assessments, rather than blanket judgments about those with criminal records, as sufficient for the protection of public safety.
27 U.S. Sentencing Comm., Frequently Asked Questions: Retroactive Application of the 2014 Drug Guidelines Amendment 2, http://www.ussc.gov/sites/default/files/pdf/amendment-process/materials-on-2014-drug-guidelinesamendment/20140724_FAQ.pdf. 28 U.S. Sentencing Comm., News Release: United States Sentencing Commission, U.S. Sentencing Commission Unanimously Votes to Allow Delayed Retroactive Reduction in Drug Trafficking Sentences (July 18, 2014), http://www.ussc.gov/news/press-releases-and-news-advisories/press-releases-and-news-advisories-archives.
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110. That several Fortune clients have lived at The Sand Castle successfully and without incident further undermines any suggestion that Defendants’ policy is necessary to serve public safety. Yet those clients would have been excluded from living at The Sand Castle had Fortune tried to lease units for them in or after the summer of 2013 when Defendants were aware that Fortune’s clients have criminal histories.
111. Indeed, under Defendants’ current policy, even formerly incarcerated individuals with exemplary post-incarceration achievements are excluded. For example, former Fortune client Stanley Richards, released from prison more than 20 years ago, is Fortune’s Senior Vice President. Hired as a counselor at Fortune in 1991, Mr. Richards steadily worked his way up, becoming manager of career development and deputy executive director. He currently oversees all of Fortune’s housing programs and has developed a wide range of skills and experience in implementing supportive reentry programs for people released from prison. Mr. Richards’ work and achievements have been recognized by the White House and the Department of Labor. Another former Fortune client, The Honorable Walter Strauss, became a Manhattan Housing Court judge after serving two prison sentences for non-violent crimes. Prior to taking the bench, Judge Strauss obtained his GED through a prison education program, attended the City University of New York at night for his bachelor’s degree, and attended Rutgers University Law School. Both Mr. Richards and Judge Strauss are examples of individuals who changed their lives for the better after incarceration, establishing careers and collecting professional accolades. Like many other Fortune clients who have led successful, crime-free lives post incarceration, neither pose any threat whatsoever to public safety. Even so, neither Mr. Richards nor Judge Strauss would be welcome at The Sand Castle.
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112. It would not compromise any legitimate concern Defendants may have to give individualized consideration to Fortune’s clients’ particular circumstances and allow those who do not threaten public safety to live at The Sand Castle. Defendants’ blanket criminal record ban at The Sand Castle nonetheless prevents any individualized consideration. Defendants’ policy of automatically excluding people with criminal records, including people like Fortune’s clients who are successfully and commendably reintegrating into society, is not necessary to achieve a legitimate business purpose.
113. Because Defendants’ blanket ban has a large discriminatory impact on the basis of race and is not necessary to achieve a legitimate business purpose, it is unlawfully discriminatory.
114. Had Defendants enforced any lawful and appropriate nondiscriminatory policy regarding the consideration of criminal records, including performing in good faith an individualized assessment, they would have had no valid basis to deny housing at The Sand Castle to most of Fortune’s clients. Moreover, if Defendants implement a lawful policy, they will have no valid basis to deny housing at The Sand Castle to most of Fortune’s clients in the future.
115. The discriminatory disparate impact of Defendants’ blanket ban is so large and foreseeable – and its overbreadth so unnecessary – that Defendants’ intent to discriminate against African Americans and Latinos can be inferred. Fortune contends that Defendants fully understand the unnecessary disparate impact that the blanket ban has on African-American and Latino applicants as well as the effect that such a policy has on the racial make-up of The Sand Castle. Defendants nonetheless intentionally implemented and continue to pursue that policy for
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the express purpose of decreasing or at least limiting the number of persons of color at the property. III. DEFENDANTS’ BLANKET BAN AND OTHERS LIKE IT PREVENT
FORMERLY INCARCERATED INDIVIDUALS FROM OBTAINING CRITICALLY IMPORTANT SAFE AND STABLE HOUSING 116. The harm inflicted by discriminatory blanket bans is great not only in terms of the sheer number of people affected, as shown above, but also in terms of the devastating consequences for each affected individual trying to reenter society. Preventing this harm, or at the very least minimizing it, is central to Fortune’s mission. 117. Individuals reentering society after time in prison confront an array of challenges. These include finding employment, securing government benefits, and reestablishing community ties. But their most immediate need is to secure safe and affordable housing. Especially in a place like New York City, where housing is extremely expensive, that is very difficult. 118. Research shows that success in finding adequate housing, though difficult, is critically important to meeting the other challenges faced by reentrants. Housing has been characterized, properly, as the “lynchpin that holds the reintegration process together.”29 119. A 2004 New York City study demonstrated that more than 30% of single adults entering shelters under the Department of Homeless Services have recently been released from city and state correctional institutions. Without stable housing, many continually cycle between incarceration and shelters.30
29 See supra note 5. 30 NYC Department of Homeless Services, Summary of DOC/DHS Data Match (Jan. 22, 2004) (draft analysis submitted for review as part of the New York City Dept. of Correction and Dept. of Homeless Services Discharge Planning Initiative).
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120. Other research has shown that reentrants who do not find stable housing in the community are more likely to recidivate than those who are able to secure permanent housing.
121. An Urban Institute study likewise found a causal connection between the inability to find permanent housing and recidivism. According to the study, reentrants often did not succeed in the community if they could not find a safe and stable place to live.31
122. The Vera Institute of Justice found that parolees released from incarceration who entered New York City homeless shelters were seven times more likely to abscond from postrelease supervision than those with more stable housing. It also found that reentrants in temporary shelter housing had more difficulty resisting drugs and finding work.32
123. This and other evidence makes plain that adequate housing is crucial to success in the reintegration process. Yet blanket bans directly prevent reentrants from obtaining such housing. By design, blanket bans do so thoughtlessly, without giving any consideration to the particular circumstances of a person trying to find a place to live. This complete disregard for individual circumstances cannot be justified under the law, and needlessly inflicts great harm on the formerly incarcerated, their communities, and organizations like Fortune seeking to help them become productive members of society.
INJURY TO THE FORTUNE SOCIETY 124. Fortune has been directly and substantially harmed by the blanket ban against providing housing to formerly incarcerated individuals and others with criminal records that Defendants have maintained since at least the summer of 2013. Defendants’ policy has diminished Fortune’s ability to perform its work, forced it to divert resources, and frustrated its
31 Jeremy Travis and Caterina G. Roman, Urban Inst., Taking Stock: Housing, Homelessness, and Prisoner Reentry 7-10 (2004), http://www.urban.org/publications/411096.html. 32 Id. at 8.
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mission of ensuring that formerly incarcerated people can successfully reenter society and obtain safe and stable housing.
125. Defendants’ policy placed Fortune at significant risk of losing grant funding and caused unnecessary costs and delay related to the grant process. As described in paragraph 54 above, Fortune received a grant from the State of New York to obtain 25 rental units in Queens for reentrants. Defendants’ denial of housing delayed Fortune’s ability to meet the terms of the grant and thereby put Fortune at risk of losing the grant altogether. Ultimately, in order to fulfill its obligation, Fortune had to hire an additional staff member to search for and secure appropriate units in other Queens apartment buildings. After Defendants’ discriminatory conduct, it took Fortune additional months to obtain the 25 units necessary to satisfy the grant’s terms.
126. Further, Fortune devoted substantial time and other resources to identify The Sand Castle as appropriate housing for its clients. Defendants’ discriminatory criminal records policy, however, prevented Fortune from placing clients there. As a result, Fortune has been forced to expend scarce and substantial additional resources to find adequate alternative housing options for clients who otherwise would have been placed at The Sand Castle. In addition to additional staff time, Fortune has spent a significant amount of money in broker fees because it has had to employ brokers and agents to assist it with finding housing for its clients in Queens.
127. Defendants’ actions also impeded Fortune’s programs in another way. When Fortune is able to place multiple clients in one geographic area, it reduces travel time and costs for Fortune’s caseworkers. This is because rather than spending time traveling to several different buildings in different neighborhoods for just a few meetings, in the same time period, a caseworker can visit with multiple clients living at the same site. Defendants’ refusal to allow Fortune clients as tenants, and Fortune’s corresponding need to place clients at multiple sites
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spread throughout Queens, has increased both the temporal and financial cost of individual caseworker visits.
128. Defendants’ discriminatory conduct has also directly impeded Fortune’s ability to operate its housing programs and frustrated its mission by disrupting its housing pipeline. As described above, many of Fortune’s clients progress from temporary to phased-permanent to permanent housing. By impeding Fortune’s ability to place its clients at The Sand Castle, Defendants have reduced the effectiveness of this model. Specifically, Defendants’ discriminatory refusal caused Fortune clients otherwise eligible to live in The Sand Castle to remain in the Fortune Academy’s temporary housing. Because these clients remained at the Academy, fewer beds were available to other individuals newly released from prison and in need of immediate assistance. But for Defendants’ discriminatory actions, Fortune staff would have been able to devote more time to locating housing for clients currently in its emergency and phased-permanent housing and Fortune would have been able to meet the needs of more clients.
129. Moreover, as a direct result of Defendants’ discriminatory conduct, Fortune has had to divert resources to engage in advocacy, community education, and outreach about the need to increase the availability of housing for formerly incarcerated individuals. Fortune has been forced to allocate limited staff time and resources to both investigate and counteract Defendants’ discriminatory conduct. As a result, Fortune has had to forgo other programmatic activities it would have engaged in.
130. Unless enjoined, Defendants will continue to engage in the unlawful practices described herein and the extent of Fortune’s injuries will increase.
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131. Defendants’ unlawful actions described herein were, and are, intentional, willful, and malicious, and/or have been, and are, implemented with callous and reckless disregard for federally protected rights.
132. Within 10 days of the commencement of this action, Plaintiffs will provide notice of this action to the New York City Commission on Human Rights and Corporation counsel, pursuant to the New York City Administrative Code § 8-502(c).
CAUSES OF ACTION Count I (Race Discrimination—42 U.S.C. § 3604) 133. Plaintiff repeats and incorporates by reference all allegations set forth in Paragraphs 1 through 132 above. 134. Defendants’ acts, policies, and practices have an adverse and disproportionate impact on African Americans and Latinos in New York City as compared to similarly situated whites. This adverse and disproportionate impact is the direct result of Defendants’ blanket policy of automatically refusing housing to all people with criminal records with no consideration of their individual characteristics and circumstances. This policy is not necessary to serve any substantial legitimate, nondiscriminatory interest, and any such interest can be satisfied by another practice – providing individualized consideration – that would have a less discriminatory effect. 135. Defendants’ acts, policies, and practices have been carried out with the intention of discriminating on the basis of race and color. Defendants have adopted and maintained an exclusionary policy regarding the use of criminal records with the intent and expectation that the policy disproportionately prevents African Americans and Latinos from obtaining housing at The Sand Castle.
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136. Defendants’ acts, policies, and practices constitute discrimination and violate the Fair Housing Act, as amended, 42 U.S.C. §§ 3604, and its implementing regulations, in that:
a. Defendants’ acts, policies, and practices have made and continue to make housing unavailable because of race and/or color, in violation of 42 U.S.C. § 3604(a); and b. Defendants’ acts, as described above, provide different terms, conditions, and privileges of rental housing, as well as different services and facilities in connection therewith, on the basis of race and/or color, in violation of 42 U.S.C. § 3604(b); and c. Defendants’ notices and statements have expressed and/or continue to express a preference, limitation, and discrimination based on race and/or color, in violation of 42 U.S.C. § 3604(c).
Count II (Race Discrimination—N.Y. Exec. Law § 296 (5)(a)) 137. Plaintiff repeats and incorporates by reference all allegations set forth in Paragraphs 1 through 132 above. 138. Defendants’ acts, policies, and practices have an adverse and disproportionate impact on African Americans and Latinos in New York City as compared to similarly situated whites. This adverse and disproportionate impact is the direct result of Defendants’ blanket policy of automatically refusing housing to all people with criminal records with no consideration of their individual characteristics and circumstances. This policy is not necessary to serve any substantial, legitimate, nondiscriminatory interest, and any such interest can be satisfied by another practice – providing individualized consideration – that would have a less discriminatory effect.
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139. Defendants’ acts, policies, and practices have been carried out with the intention of discriminating on the basis of race and color. Defendants have adopted and maintained an exclusionary policy regarding the use of criminal records with the intent and expectation that the policy disproportionately prevents African Americans and Latinos from obtaining housing at The Sand Castle.
140. Defendants’ acts, policies, and practices constitute discrimination and violate the New York State Human Rights Act, NY Executive Code § 296(5), in that:
a. Defendants’ acts, policies, and practices have made and continue to make housing unavailable because of race and/or color, in violation of NY Executive Code § 296(5)(a)(1); and b. Defendants’ acts, as described above, provide different terms, conditions, and privileges of rental housing, as well as different services and facilities in connection therewith, on the basis of race and/or color, in violation of NY Executive Code § 296(5)(a)(2); and c. Defendants’ notices and statements have expressed and/or continue to express a preference, limitation, and discrimination based on race and/or color, in violation of NY Executive Code § 296(5)(a)(3). Count III (Race Discrimination—Admin. Code of City of NY § 8-107(5)) 141. Plaintiff repeats and incorporates by reference all allegations set forth in Paragraphs 1 through 132 above. 142. Defendants’ acts, policies, and practices have an adverse and disproportionate impact on African Americans and Latinos in New York City as compared to similarly situated whites. This adverse and disproportionate impact is the direct result of Defendants’ blanket
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policy of automatically refusing housing to all people with criminal records with no consideration of their individual characteristics and circumstances. This policy is not necessary to serve any substantial, legitimate, nondiscriminatory interest, and any such interest can be satisfied by another practice – providing individualized consideration – that would have a less discriminatory effect.
143. Defendants’ acts, policies, and practices have been carried out with the intention of discriminating on the basis of race and color. Defendants have adopted and maintained an exclusionary policy regarding the use of criminal records with the intent and expectation that the policy disproportionately prevents African Americans and Latinos from obtaining housing at The Sand Castle.
144. Defendants’ acts, policies, and practices constitute discrimination and violate the New York City Human Rights Act, Administrative Code of City of NY § 8-107(5)), in that:
a. Defendants’ acts, policies, and practices have made and continue to make housing unavailable because of race and/or color, in violation of Administrative Code of City of NY § 8-107(5)(a)(1); and b. Defendants’ acts, as described above, provide different terms, conditions, and privileges of rental housing, as well as different services and facilities in connection therewith, on the basis of race and/or color, in violation of Administrative Code of City of NY § 8-107(5)(a)(2); and c. Defendants’ notices and statements have expressed and/or continue to express a preference, limitation, and discrimination based on race and/or color, in violation of Administrative Code of City of NY § 8-107(5)(a)(3).
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Count IV (Source of Income Discrimination—Admin. Code of City of NY § 8-107(5))
145. Plaintiff repeats and incorporates by reference all allegations set forth in Paragraphs 1 through 132 above.
146. Defendants’ acts, policies, and practices, by refusing to rent apartments to Plaintiff, discriminated because of source of income. Specifically, Defendants refused to house individuals whose rent was subsidized by Fortune’s housing programs, and made a clear statement that The Sand Castle does not allow residents whose rent is subsidized by programs.
147. Defendants’ acts, policies, and practices constitute discrimination and violate the New York City Human Rights Act, Administrative Code of City of NY § 8-107(5)), in that:
a. Defendants’ acts, policies, and practices have made and continue to make housing unavailable because of source of income, in violation of Administrative Code of City of NY § 8-107(5)(a)(1); and b. Defendants’ acts, as described above, provide different terms, conditions, and privileges of rental housing, as well as different services and facilities in connection therewith, on the basis of source of income, in violation of Administrative Code of City of NY § 8-107(5)(a)(2); and c. Defendants’ notices and statements have expressed and/or continue to express a preference based on source of income, in violation of Administrative Code of City of NY § 8-107(5)(a)(3).
DEMAND FOR JURY TRIAL 148. Pursuant to Fed. R. Civ. P. 38(b), Plaintiff demands a trial by jury on all issues triable as of right.
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PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully prays that the Court grant it the following relief:
(1) Enter a declaratory judgment finding that the foregoing actions of Defendants violate 42 U.S.C. § 3604, New York Executive Law § 296(5), and Administrative Code of City of NY § 8-107(5);
(2) Enter an injunction enjoining Defendants and their directors, officers, agents and employees from continuing to publish, implement, and enforce the illegal, discriminatory conduct described herein and directing Defendants and their directors, officers, agents and employees to take all affirmative steps necessary to remedy the effects of the illegal, discriminatory conduct described herein and to prevent additional instances of such conduct or similar conduct from occurring in the future;
(3) Award compensatory damages to Plaintiff in an amount to be determined by the jury that would fully compensate Plaintiff for its injuries caused by the conduct of Defendants alleged herein;
(4) Award punitive damages to Plaintiff in an amount to be determined by the jury that would punish Defendants for the willful, malicious, and reckless conduct alleged herein and that would effectively deter similar conduct in the future;
(5) Award Plaintiff its reasonable attorneys’ fees and costs pursuant to 42 U.S.C. § 3613(c)(2), NY Executive Code § 297(10), and Administrative Code of City of NY § 8-502(g);
(6) Award prejudgment interest to Plaintiff; and (7) Order such other relief as this Court deems just and equitable.
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October 30, 2014

Respectfully submitted,
/s/ Ryan Downer Ryan C. Downer (RD3249) John P. Relman* Glenn Schlactus* Jia Cobb* RELMAN, DANE & COLFAX, PLLC 1225 19th St., NW, Suite 600 Washington, D.C. 20036-2456 Tel: 202-728-1888 Fax: 202-728-0848 E-mail: jrelman@relmanlaw.com
rdowner@relmanlaw.com gschlactus@relmanlaw.com jcobb@relmanlaw.com
*application for admission pro hac vice to be filed

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 Case 1:14-cv-06410-VMS Document 30 Filed 05/01/15 Page 1 of 44 PageID #: 282

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK

THE FORTUNE SOCIETY, INC. 29-76 Northern Blvd Long Island City, NY 11101
Plaintiff,
v.
SANDCASTLE TOWERS HOUSING DEVELOPMENT FUND CORP. 1465A Flatbush Ave. Brooklyn, NY 11210
SARASOTA GOLD LLC 1407 48th Street Brooklyn, NY 11219
E & M ASSOCIATES LLC 1465A Flatbush Ave. Brooklyn, NY 11210
and
WEISSMAN REALTY GROUP LLC 45 Broadway, 12th Floor New York, NY 10006

Civil Action No. 1:14-cv-6410 FIRST AMENDED COMPLAINT JURY DEMAND

Defendants.

NATURE OF THE ACTION 1. The Fortune Society (“Fortune”) brings this suit pursuant to the Fair Housing Act of 1968, as amended, 42 U.S.C. §§ 3601 et seq., for injunctive, monetary and declarative relief against Defendants Sandcastle Towers Housing Development Fund Corporation (“HDFC”), Sarasota Gold LLC (“Sarasota Gold”), E & M Associates LLC (“E & M”), and Weissman Realty

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Group LLC (“Weissman”) for engaging in a pattern or practice of illegal discrimination on the basis of race and color at The Sand Castle, a multi-building apartment complex they own and manage in Queens, New York. Specifically, Defendants maintain and enforce a policy of automatically excluding any person with a record of a criminal conviction from renting or living in an apartment at The Sand Castle. Defendants explicitly confirmed this policy to Fortune twice in the summer of 2013. The policy excludes all such people regardless of the nature of the conviction, the amount of time that has lapsed since the conviction, evidence of rehabilitation, or any other factor related to whether a specific person poses any threat to safety. Pursuant to this stated policy, Defendants repeatedly refused to permit Fortune to rent apartments at The Sand Castle on behalf of its clients because those clients have criminal histories.1 Defendants’ policy has the purpose and effect of discriminating against African Americans and Latinos, including Fortune’s clients, in violation of the Fair Housing Act and New York State and City law.
2. Fortune is a not-for-profit organization that for nearly fifty years has been dedicated to the successful reentry and reintegration of formerly incarcerated individuals in New York City (“the City”). It is one of the leading organizations in the country addressing and helping individuals overcome reentry issues. Fortune has been lauded nationally and internationally for the innovation, quality, and effectiveness of its programs. Just this summer Fortune’s Senior Vice President of Programs, himself a formerly incarcerated African-American man, was named a “Champion of Change” by the White House for his work at Fortune.
3. Fortune serves approximately 5,000 clients a year. Approximately 95% of its clients are African-American or Latino. Fortune provides comprehensive services to these
1 For purposes of this Complaint, “criminal history” and “criminal record” refer to a prior criminal conviction.
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clients by operating housing, education, employment, health, and case management programs, among others.
4. One of Fortune’s principal tasks is to secure housing for its clients and their families. Fortune provides temporary and permanent housing for hundreds of formerly incarcerated individuals each year. It does so by running “scattered-site” programs that place clients in private rental housing throughout the City and by operating two housing facilities itself in West Harlem. The two facilities are The Fortune Academy and Castle Gardens.
5. Many of Fortune’s housing programs work as a pipeline, with individuals moving from emergency to “phased permanent” to permanent housing as part of their successful reintegration. Being able to move people to the end of the pipeline opens up more space at the beginning and allows Fortune to serve more clients.
6. In some of Fortune’s scattered-site programs, Fortune leases apartments and pays the rent itself. Its clients provide some reimbursement, which encourages a sense of personal investment and responsibility. Some of Fortune’s scattered-site programs serve specific segments of the formerly-incarcerated population, such as people who are HIV-positive, or certain regions of the City. Fortune has developed relationships with over 100 landlords to facilitate its scattered-site housing and regularly seeks out new locations for these programs.
7. The Fortune Academy includes an 18-bed emergency housing unit and a “phasedpermanent” unit that serves 41 people who transfer from the emergency unit when Fortune staff determine they are ready to live independently, subject to the availability of space. Individuals stay in the phased-permanent housing until they are ready to transition to permanent housing elsewhere. Such permanent housing is often located through Fortune’s scattered-site programs. At Castle Gardens, Fortune provides affordable permanent housing that integrates formerly-
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incarcerated people with other low-income families. The demand for space at Fortune Academy and Castle Gardens substantially exceeds the space that is available.
8. In the summer of 2013 and again in early 2014, Fortune tried to rent apartments for its clients at The Sand Castle under one of its scattered-site programs that required that apartments be located in Queens. The Sand Castle is a four-building apartment complex with over 900 rental units in Far Rockaway, Queens. It is owned and managed by Defendants. Fortune wanted to rent units at The Sand Castle because the complex is an ideal fit for its clients: among other things, The Sand Castle suits Fortune’s clients well because it is located in a safe and racially diverse community that is readily accessible to public transportation, which its clients rely on heavily. In addition, units at The Sand Castle fit the budget for the scattered-site program.
9. When Defendants learned that Fortune serves formerly incarcerated individuals who would live in the apartments Fortune wanted to rent, they refused to rent apartments to Fortune. This refusal, they told Fortune, was because they maintain and enforce a policy prohibiting anyone with a criminal record from renting an apartment or living at The Sand Castle. This type of “blanket ban” policy has become increasingly common in housing due to the increased accessibility of inexpensive background checks via the Internet. As a direct result of Defendants’ repeated application of their blanket ban policy against Fortune, some of Fortune’s clients have been forced to remain homeless or in substandard or unsafe housing substantially longer than they otherwise would have while Fortune searched for alternative housing. In several cases, clients found eligible for scattered-site housing in the Queens program were residing in The Fortune Academy and had to remain there longer than necessary, thus occupying beds that could have been utilized to house other homeless individuals.
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10. Defendants’ actions have directly and significantly diminished and frustrated Fortune’s ability to provide safe and stable housing for its clients, which is a central part of its mission of assisting formerly-incarcerated individuals with reentry and reintegration. In addition to frustrating Fortune’s ability to provide housing to its clients, these actions have caused Fortune to expend substantial additional resources to identify alternative housing options for its clients and to increase advocacy efforts, and forced Fortune to divert resources from other programmatic activities to counteract Defendants’ conduct.
11. Locally and nationally, blanket bans like the one maintained and enforced by Defendants against Fortune are discriminatory and have a clear and unlawful disparate impact on African Americans and Latinos. The disproportionate rates of conviction and incarceration of African Americans and Latinos, as compared to whites, are well-documented.2 This disproportionality is clear in New York City, New York State, and the United States as a whole. African Americans and Latinos are likewise significantly overrepresented compared to whites among individuals released from prison each year, i.e., Fortune’s clients. Banning people from safe and affordable housing based solely on a criminal conviction thereby has a predictable and large adverse impact on African Americans and Latinos. In the analogous context of employment bans, this is exactly what the United States Equal Employment Opportunity Commission (“EEOC”) has found by analyzing national criminal records data.3
12. Analysis of criminal records and other data likewise shows that the blanket ban maintained by Defendants at The Sand Castle has a severe disparate impact on the basis of race and color. African-American men who live in New York City and satisfy Defendants’ other
2 “White” is used herein to refer to non-Hispanic Caucasians. 3 See generally U.S. Equal Emp’t Opportunity Comm’n, EEOC Enforcement Guidance, Number 915.002 (Apr. 25, 2012), http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm.
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residency requirements for The Sand Castle are at least three times as likely as whites to be excluded by Defendants’ prohibition against people with records, and Latino men are almost four and one-half times as likely as whites to be excluded. The disparities may actually be much greater because these figures are based on a conservative statistical analysis.
13. Under the Fair Housing Act and New York law, a policy that has a disparate impact may be permissible if it is necessary to achieve a legitimate business purpose that cannot be satisfied with a less discriminatory alternative. That is not the case here. A clear and obviously less discriminatory alternative for dealing with any potential concerns raised by applicants with criminal records is available to Defendants – one that is already established in the area of employment discrimination law and regulation.
14. Instead of applying a blanket ban, Defendants could assess potential residents with criminal records individually by considering factors directly relevant to appropriate qualifications for tenancy. This could include the nature of the conviction or conduct, how long ago it occurred, the age of the person at the time of the conviction, post-conviction and postrelease conduct, evidence of rehabilitation, evidence of any current threat to safety, letters of recommendation, the individual’s history as a tenant and as a whole, and other factors. The EEOC applies a presumption in the employment context that, because of the racially disparate impact of blanket bans, precisely such an individualized assessment is required by law and sufficient to protect legitimate interests such as safety.4 The EEOC’s sound rationale applies with equal force to housing.
15. Through an individualized assessment, Defendants would maintain the ability to review carefully all Sand Castle applicants while permitting prospective tenants who have
4 Id.
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criminal records, but pose no realistic threat to the community, to obtain housing. This more tailored approach would protect public safety equally well, yet it would be less discriminatory and exclusionary because it would reduce the number of African Americans and Latinos prevented from securing housing at The Sand Castle.
16. Using individualized assessments to reduce the impact of blanket bans, including Defendants’ blanket ban at The Sand Castle, is crucial both for individuals who were formerly incarcerated and for the health of our communities. Recidivism rates are much higher for reentrants who do not find safe and permanent housing, and recidivism impacts the whole surrounding community. For Fortune’s clients and other reentrants, successful reintegration greatly depends on having a suitable home. Quite properly, housing has been called the “lynchpin that holds the reintegration process together.”5
17. The importance to individuals and communities of promoting successful reintegration by meeting the housing needs of the formerly incarcerated has grown alongside the rapid growth in the number of people imprisoned in the United States. In 1980, 300,000 people in the United States were imprisoned. Today over 2.3 million are imprisoned, many for nonviolent crimes. Nearly everyone who is currently imprisoned will be released and will need to find housing. Moreover, the pace of people being released will increase in the near term because the United States Sentencing Commission voted unanimously to reduce sentencing ranges for certain drug offenses and to apply the changes retroactively where justified by individualized consideration, and because of a large-scale initiative by the United States to expedite
5 Jeremy Travis, But They All Come Back: Facing Challenges of Prisoner Reentry 219 (2005).
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consideration of clemency for the many non-violent, low-level federal offenders who have already served substantial time in prison.6
18. Blanket bans maintained by Defendants and other landlords, however, present formidable and often insurmountable obstacles for formerly incarcerated individuals like Fortune’s clients. By blocking the path to safe, permanent, and affordable housing, these bans also block the path to social and economic stability for many otherwise qualified and deserving people without regard to the nature of their past crime or how far they have since come. Blanket bans also create a chilling effect, discouraging potential tenants from even applying for tenancy in the first place. Eliminating such unnecessary obstacles from their paths is both sound policy and required by the Fair Housing Act.
19. Defendants’ blanket ban is based on racially discriminatory stereotypes about those with criminal records. Indeed, the discriminatory impact of Defendants’ policy is so large, and the less discriminatory alternative so obvious, that unlawful racially discriminatory intent can be inferred. Fortune contends that Defendants knew that people with criminal records, including Fortune’s clients, are disproportionately African-American and Latino. Defendants understood the adverse impact their policy has on the racial make-up of its property, and deliberately and purposefully pursued that outcome.
20. Defendants’ deliberate and purposeful conduct is consistent with their other efforts to remake the image of The Sand Castle after Defendant Sarasota Gold purchased it in 2006. Defendants employed measures to attract wealthier white tenants and gentrify the
6 See generally U.S. Sentencing Comm’n, Office of Research and Data, Summary of Key Data Regarding Retroactive Application of the 2014 Drug Guidelines Amendment (July 25, 2014), http://www.ussc.gov/sites/default/files/pdf/research-and-publications/retroactivity-analyses/drug-guidelinesamendment/20140725-Drug-Retro-Analysis.pdf. See also Dep’t of Justice, Office of Public Affairs, Announcing New Clemency Initiative, Deputy Attorney General James M. Cole Details Broad New Criteria for Applicants (April 23, 2014), http://www.justice.gov/opa/pr/announcing-new-clemency-initiative-deputy-attorney-general-james-mcole-details-broad-new.
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building, including advertisements emphasizing white models. These efforts are consistent with engaging in intentional discrimination in order to limit the number of minority tenants in the building.
21. Fortune brings this action to address Defendants’ discriminatory and unlawful conduct at The Sand Castle and to redress the harm it has suffered and will continue to suffer as a direct result of that conduct absent relief.
PARTIES 22. Plaintiff The Fortune Society, Inc. is a not-for-profit corporation organized under the laws of New York State with headquarters in Long Island City and offices throughout New York City. Fortune is dedicated to assisting formerly incarcerated individuals and their families through advocacy and the provision of reentry services, including housing, employment assistance, substance abuse counseling, and other services. Fortune serves approximately 5,000 people annually. 23. Defendant Sarasota Gold LLC (“Sarasota Gold”) is a New York limited liability company headquartered in Brooklyn, NY. Its address for service of process on file with the New York State Department of State is 1407 48th Street, Brooklyn, NY 11219. Sarasota Gold was formed on September 1, 2006, and since September 2006, it has owned or held all beneficial and equitable interest in the complex known as “The Sand Castle” located at 711 Seagirt Avenue in Far Rockaway, Queens. 24. Defendant Sandcastle Towers Housing Development Fund Corporation (“HDFC”) is a not-for-profit corporation established pursuant to Article XI of the New York State Private Housing Finance Law in June 2013 and headquartered in Brooklyn, NY. HDFC, as the nominee for Sarasota Gold, has held legal or record title to the fee interest in The Sand Castle
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since June 27, 2013. HDFC was formed on June 11, 2013 and its address for service of process is 1465A Flatbush Avenue, Brooklyn, NY 11210.
25. Defendant E & M Associates LLC (“E & M”) is a management company employed by Defendants Sarasota Gold and HDFC to operate and manage The Sand Castle on their behalf. E & M is located at 1465A Flatbush Avenue, Brooklyn, NY 11210. E & M’s Senior Manager, Meyer Brecher, oversees The Sand Castle’s day to day operations. E & M, upon information and belief, has been at some or all relevant times, an employee and/or agent of Defendants Sarasota Gold and HDFC such that Defendants Sarasota Gold and HDFC are liable for its acts alleged herein. On one or more occasions when attempting to lease apartments at The Sand Castle, the person Fortune staff members spoke with was, upon information and belief, an employee and/or agent of E & M.
26. The same person (Aryeh Ginzberg) is the President of Defendant HDFC, Manager of the company that serves as Defendant Sarasota Gold’s Sole Member, and one of E & M’s two partners.
27. Defendant Weissman is a management company also employed by Defendants Sarasota Gold and HDFC to operate and manage The Sand Castle on their behalf. Weissman is headquartered in Lawrence, NY and was formed on April 18, 2005. Its address for service of process is 45 Broadway, 12th floor, New York, NY 10006. On one or more occasions when attempting to lease apartments at The Sand Castle, the people Fortune staff members spoke with were, upon information and belief, employees and/or agents of Weissman.
28. Weissman is, and upon information and belief has been at some or all relevant times, an employee and/or agent of Defendants Sarasota Gold and HDFC such that Defendants Sarasota Gold and HDFC are liable for its acts alleged herein.
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29. In acting or omitting to act as alleged herein, each Defendant was acting through its employees and/or agents, and is liable on the basis of the acts and omissions of its employees and/or agents.
30. In acting or omitting to act as alleged herein, each employee or officer of each Defendant was acting in the course and scope of his or her actual or apparent authority pursuant to such agencies, or the alleged acts or omissions of each employee or officer as agent were subsequently ratified and adopted by each Defendant as principal.
JURISDICTION AND VENUE 31. This Court has jurisdiction over this matter pursuant to 42 U.S.C. § 3613. This Court also has jurisdiction under 28 U.S.C. §§ 1331 and 1343 because the claims alleged herein arise under the laws of the United States. This Court has supplemental jurisdiction over the New York State Human Rights Law (“NYSHRL”) and New York City Human Rights Law (“NYCHRL)” claims pursuant to 28 U.S.C. § 1367. 32. Venue is proper in this district under 28 U.S.C. § 1391(b) because Defendants conduct business in and are residents of the district and a substantial part of the events and omissions giving rise to the claims occurred in the district.
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FACTUAL BACKGROUND I. THE FORTUNE SOCIETY AND ITS ATTEMPTS TO RENT APARTMENTS
FOR ITS CLIENTS AT THE SAND CASTLE A. Fortune’s Mission and Programs 33. Founded in 1967, The Fortune Society’s mission is to help incarcerated and formerly incarcerated individuals become contributing members of society and to offer alternatives to incarceration. Fortune offers a holistic array of programs for formerly incarcerated, low-income persons in New York City through a “one-stop shop” model of services that includes housing, case management, counseling, education, employment services, substance abuse treatment, family services, health services, and mental health services, among others. Fortune routinely engages in education and advocacy to promote the creation of a fair, humane, and truly rehabilitative correctional system. 34. Fortune serves approximately 5,000 individuals annually. African Americans and Latinos comprise over 95% of Fortune’s clients. 35. Fortune is widely regarded as one of the leading organizations in the country confronting the myriad reentry issues faced by formerly incarcerated individuals. Fortune’s programs are recognized nationally and internationally for their innovation, quality, and effectiveness, including in reducing rates of recidivism. Just this summer the White House named Fortune’s Senior Vice-President of Programs a “Champion of Change” for his effectiveness in helping formerly incarcerated men and women achieve and maintain employment. Also this summer, Governor Cuomo appointed Fortune’s CEO to the new statewide Council on Community Re-Entry and Reintegration. Fortune’s housing has been funded as a Special Project of National Significance by the United States Health Resources and Services Administration and the United States Department of Housing and Urban Development
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(“HUD”) and Fortune has received accolades from numerous organizations as a provider of model reentry programs.
36. Because of the vital importance of safe and stable housing to successful reentry, one of Fortune’s principal tasks is to secure housing for its clients and their families. This is central to Fortune’s mission. Each year Fortune provides temporary or permanent housing for more than 300 formerly incarcerated people.
37. Many of Fortune’s housing programs, described immediately below, work together as a pipeline. Clients move from emergency to phased-permanent units at the Fortune Academy, and then to permanent housing. Moving clients from temporary to permanent housing is of critical importance to this process. By helping clients who are ready to live independently move from Fortune’s temporary housing to permanent housing, Fortune creates additional space in its temporary housing programs. Without this additional space, Fortune cannot serve new clients in need of emergency or phased-permanent housing. Fortune always faces a backlog of people who need its help in securing such housing.
1. Emergency and Phased-Permanent Housing: Fortune Academy 38. The Fortune Academy is a housing facility in West Harlem that is owned and operated by The Fortune Society. The Fortune Academy offers both emergency and phasedpermanent housing for approximately 60 formerly incarcerated individuals who are homeless. 39. In addition to providing housing, The Fortune Academy works with participants to develop needed tools for social reintegration, employment, independence, sobriety, and the transition to the private mainstream housing market. Through these extensive reentry services and programs, Fortune Academy residents learn how to address the issues that led to their incarceration and homelessness. This comprehensive approach is instrumental to the success of
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Fortune’s housing clients in achieving and maintaining positive, self-sufficient, and crime-free lives.
40. The Fortune Academy’s emergency housing unit includes 18 beds plus some overflow capacity. Rooms in the emergency unit house three to seven people at a time and do not include cooking facilities.
41. Demand for emergency beds at The Fortune Academy is always high because many people are released every week from jail and prison into local communities and have no viable housing options. The emergency unit is consistently filled to capacity, and Fortune is constantly forced to turn people away.
42. The emergency unit’s waiting list is frequently several months long. Making as many beds available as possible is critical to Fortune’s mission.
43. Fortune’s model is to move individuals housed in the emergency unit to transitional or permanent housing within 45 days, but individuals often stay for as many as eight or nine months, in part because there are so few affordable housing options available to the formerly incarcerated in New York City. This is due in significant part to blanket bans on people with criminal records imposed by private landlords.
44. Fortune clients who have been in emergency housing and are assessed by Fortune Academy staff as ready to live independently are eligible for placement in the Academy’s phased-permanent unit if space is available.
45. The phased-permanent unit houses 41 people. Rooms in the phased-permanent program are apartment-style singles or doubles that include amenities such as cooking equipment.
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46. When a vacancy opens in the phased-permanent unit, Academy staff select an individual from the emergency unit who has demonstrated his or her readiness to live more independently with the help of continued supportive services from Fortune.
47. Fortune clients housed in the phased-permanent unit typically remain there until they can make the transition to permanent housing. The process of finding and moving into permanent housing often takes a year or more, again in significant part because of blanket bans that exclude individuals with criminal histories from living in rental housing.
2. Permanent Housing: Scattered-Site Programs and Castle Gardens 48. Fortune also operates programs to provide safe and stable permanent housing for its clients, including several scattered-site programs. 49. Fortune’s scattered-site programs are initiatives through which Fortune places clients in private rental housing throughout New York City. Through these programs, Fortune has developed relationships with New York City landlords and management companies to identify safe and affordable apartments for clients who Fortune determines are ready to live independently. 50. Fortune places its scattered-site clients through a variety of methods. Some clients are placed in private housing owned or managed by landlords or management companies with which Fortune already has an established relationship. Other clients are placed in private housing with the assistance of a licensed real-estate broker retained by Fortune for that specific purpose. Housing specialists on Fortune’s staff also actively seek out new private landlords who are willing to house its clients. 51. Fortune itself often enters into residential leases with participating landlords. In these circumstances, Fortune is responsible for making all rental payments to the landlord.
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Scattered-site program participants then enter into an occupancy agreement with Fortune and partially reimburse Fortune for a share of the rent each month by paying 30% of their income to Fortune. Partial reimbursement facilitates a sense of personal investment and responsibility while maintaining affordability for Fortune’s clients.
52. The scattered-site programs are funded from a variety of public and private grants. The grants Fortune receives often have geographical or programmatic restrictions. This means that Fortune may only be able to use a grant to house clients in a particular area of the City or to assist only a specific subset of its client population, such as people who are HIVpositive. Potential participants in Fortune’s scattered-site programs are carefully evaluated by Fortune’s staff to assess their readiness for independent living and their fit for specific programs. If Fortune staff determine that an individual is an appropriate candidate for a program, Fortune’s housing specialists begin the process of helping that person find an apartment in the private rental market. Fortune’s own Castle Gardens is one option for clients who are ready for permanent housing, but it is a very limited one. Castle Gardens is a 114-unit residential building in West Harlem that Fortune opened in 2010. It provides homes and on-site social services for formerly-incarcerated people as well as other low-income families. Openings are infrequent and unpredictable, however. Like any other typical apartment building in New York City, once an individual becomes a Castle Gardens resident, he or she may remain there indefinitely. As a result, Fortune typically cannot look to Castle Gardens to solve its need to locate housing for clients who are prepared to succeed in permanent housing.
B. Fortune’s Inability to Rent Apartments for Clients at The Sand Castle Because of Defendants’ Blanket Criminal Record Ban
53. Due to the perpetual need to expand housing options for its prospective and current clients, Fortune’s staff is constantly searching for more private landlords willing to house
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Fortune clients through its scattered-site programs. As part of this search, Fortune attempted to place clients at The Sand Castle, a large apartment complex in Far Rockaway, Queens, which is owned by Defendants Sarasota Gold and HDFC and has been managed on the owners’ behalf by Defendants Weissman and E & M.
54. Defendant Sarasota Gold bought The Sand Castle in or around 2006 for $98 million. While the building had been largely occupied by seniors, the new owners planned an image makeover and raised their rents. Posters were placed in the lobby encouraging potential tenants to “Live the Life You’ve Always Dreamed.” Advertisements for the complex and The Sand Castle website featured smiling young, white, blond models. Unit floor plans were labeled with British-sounding references like “Ardsley,” “Dover,” and “Stanton.” Defendants’ goal was to present a more “upscale,” gentrified image, one that deemphasized the presence of minority neighbors.
55. Fortune became aware of The Sand Castle after receiving a housing assistance grant from New York State in 2013 that provides funding for exactly 25 residential units in Queens.
56. Through its research, Fortune determined that The Sand Castle would be an ideal site to house program participants. Specifically, The Sand Castle is located in a relatively safe and racially diverse area within the grant’s geographical limitation, and in a neighborhood in which there are already Fortune clients. Having a number of clients located in the same geographical area allows Fortune to more effectively utilize its case management staff by reducing travel time, reducing costs, and supporting greater intensity of services.
57. The waterfront property features numerous amenities, including a fitness center, supermarket, on-site medical facilities, and a doorman. The Jewish Association Serving the
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Aging has facilities located in the building. The Sand Castle is also convenient to public transportation relied upon by Fortune’s clients.
58. Additionally, and of critical importance to Fortune, The Sand Castle’s rents are affordable and fit well within Fortune’s grant budget. Studio apartments are available for as little as approximately $1,000 per month and one-bedroom apartments start at approximately $1,300 per month.
59. The Sand Castle has over 900 apartments and, upon information and belief, has had sufficient availability at all times relevant to this Complaint to provide units to Fortune and/or its clients.
60. In or around May 2013, in a transaction handled by Fortune’s then real-estate agent, Fortune entered into leases with Defendant Sarasota Gold for four apartments at The Sand Castle. Fortune is listed as the tenant for each apartment and is solely responsible for all rental payments pursuant to the terms of the lease agreements.
61. At the time that Defendants entered into these lease agreements with Fortune, The Sand Castle’s management knew that Fortune intended to use the units for its housing program and that it intended to sub-lease the apartments to program clients. The Sand Castle’s management did not know, however, the nature of the Fortune program or that Fortune served individuals with criminal records. Moreover, Defendants had no specific knowledge that Fortune’s sub-lessees had criminal records. The Sand Castle did not request any financial or other background information from Fortune about potential sub-lessees.
62. In or around July 2013, a Fortune housing specialist visited The Sand Castle’s leasing office to pick up keys for the apartments that had been leased to Fortune. While there, the housing specialist asked a Sand Castle employee about the possibility of Fortune leasing
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more apartments in the building for its clients. The employee responded that Fortune would need to contact building management. Fortune subsequently contacted The Sand Castle’s management on several occasions to explore the possibility of leasing additional apartments to house more Fortune clients. The individuals with whom Fortune staff members spoke on these occasions were, upon information and belief, employees or agents of Defendant Weissman and/or Defendant E & M.
63. During Fortune’s encounters with Weissman and/or E & M, Weissman and/or E & M learned that Fortune serves clients who have criminal records. Upon learning that Fortune’s clients have criminal records, Weissman and/or E & M immediately denied Fortune’s request to lease any more apartments at The Sand Castle. In doing so, Weissman and/or E & M explicitly and unequivocally told Fortune’s staff that The Sand Castle’s apartments are not available to people with criminal records.
64. The first of these discussions with Weissman took place in the summer of 2013 when a Fortune staff member spoke with Melissa Gursky, a Weissman employee, who was working in a Sand Castle management capacity. Fortune explained the organization’s mission and programs. In response, Ms. Gursky articulated The Sand Castle’s blanket ban policy, explicitly telling the Fortune staff member that The Sand Castle “does not house ex-offenders” (or similar words to that effect).
65. Also in the summer of 2013, a different Fortune staff member called Weissman and/or E & M. The Fortune employee explained that he worked for Fortune, that Fortune helps formerly incarcerated people find housing, and that Fortune was interested in leasing additional apartments at The Sand Castle. In response, Weissman and/or E & M stated that, “we don’t allow ex-offenders on the property and we do not rent to programs” (or similar words to that
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effect). The assertion that The Sand Castle does not rent to programs was demonstrably false because Defendants had leased apartments to Fortune in the spring knowing that it was a “program” (but not knowing the nature of the program).
66. In this same conversation, Fortune explained that the stated ban on the formerly incarcerated “appears to be discriminatory” (or similar words to that effect). Weissman and/or E & M responded by repeating that The Sand Castle does not accept formerly incarcerated individuals as residents. Fortune asked when the exclusionary policy was adopted, but Weissman refused to answer.
67. Although Weissman and/or E & M made clear that The Sand Castle does not permit residents with criminal records, Defendants agreed to honor the leases that Defendant Sarasota Gold had entered into with Fortune when it was unaware that Fortune’s clients were formerly incarcerated individuals.
68. Fortune again contacted The Sand Castle in early 2014 to determine whether Defendants had rescinded their blanket ban against people with criminal records and whether Fortune could lease additional apartments for its clients. Fortune’s employee spoke with E & M’s employee, Sruly Tress.
69. Fortune first confirmed that The Sand Castle had vacant apartments available for rent. Fortune told Mr. Tress that its clients have criminal backgrounds and reminded Mr. Tress that Fortune had clients who had been living in the building without incident. Mr. Tress explicitly acknowledged that The Sand Castle had not experienced any problems with those residents. Fortune made clear that it was willing to provide Defendants with any information they reasonably required regarding the backgrounds of individual tenants who would occupy the apartments that Fortune wanted to rent.
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70. Mr. Tress responded by telling Fortune that tenants with criminal histories “scare” management and that criminal records are a “red flag.” He did, however, state that he would check with Defendants’ upper-level management about whether Fortune would be permitted to rent additional units.
71. Mr. Tress contacted Fortune shortly thereafter and told Fortune it would not be allowed to lease additional units in The Sand Castle. Mr. Tress told Fortune that The Sand Castle did not wish to conduct any further business with Fortune. II. DEFENDANTS’ REJECTION OF FORTUNE ON THE BASIS OF THEIR
BLANKET BAN AGAINST RESIDENTS WITH CRIMINAL RECORDS CONSTITUTES UNLAWFUL DISCRIMINATION 72. Facially neutral housing practices that have a disparate impact on the basis of race or color are prohibited by the Fair Housing Act unless they are necessary to achieve a legitimate business purpose that cannot be satisfied through a less discriminatory alternative practice. Blanket bans that automatically deny housing to people with criminal records, including the blanket ban maintained and enforced by Defendants at The Sand Castle, are unlawful under this standard. Such bans have a severe disparate impact on African Americans and Latinos, and any legitimate safety concerns can be satisfied through the less discriminatory alternative of giving individualized consideration to each potential resident’s circumstances and desirability as a tenant. 73. Moreover, the disparate impact of a facially neutral housing practice may be so stark and foreseeable that it demonstrates an unlawful intent to discriminate. That is also the case here. Because of well-known racial disparities regarding people with criminal records, Defendants’ blanket ban operates to disqualify otherwise qualified African Americans and Latinos from living at The Sand Castle at a rate at least three to four and one-half times the rate
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at which whites are disqualified. By implementing and maintaining their blanket ban at The Sand Castle, Defendants have been and continue to be engaged in intentional discrimination. Defendants’ ban is consistent with a policy of limiting the number of new minority tenants in the building.
74. Defendants have also made concerted efforts to change The Sand Castle’s image and to present it as more “upscale,” including through its print and online advertising, which prominently feature young, white men and women. These efforts are consistent with a policy of purposefully attracting white tenants and dissuading others from applying.
A. Blanket Bans in General Disproportionately and Severely Impact African Americans and Latinos at the National, State, and City Levels
75. Seven-hundred thousand inmates are released from confinement each year and become new targets of blanket bans.7 They are disproportionately African-American and Latino because the inmate population as a whole is disproportionately African-American and Latino, and 95% of inmates are eventually released.8
76. In New York State, more than 50% of the 25,060 inmates released in 2009 were African-American and over 25% were Latino.9 Yet the State’s general population is only 15.9% African-American and 17.6% Latino. Of the nearly 600,000 inmates released by the New York
7 Ann E. Carson, and William J. Sobel, U.S. Dept. of Justice, Prisoners in 2011, BJS Bulletin 1 (Dec. 2012), http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCMQFjAA&url=http%3A%2F% 2Fwww.bjs.gov%2Fcontent%2Fpub%2Fpdf%2Fp11.pdf&ei=uUNRVOy7GpHisATtwYHQAg&usg=AFQjCNF1I0 Yzt_-U9B6qCTGgbdSaYZKWvQ&sig2=RBCZAeieGV1zf4VvBijxnQ&bvm=bv.78597519,d.cWc. 8 Devah Pager, The Mark of a Criminal Record, 108.5 Am. J. of Sociology 937, 957-960 (2003). 9 See State of New York Dept. of Correction and Comm. Supervision, 2009 Inmate Releases: Three Year Post Follow-up 17 (2013), http://www.doccs.ny.gov/Research/Reports/2013/2009_releases_3yr_out.pdf.
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State Department of Correction from 1985 to 2009, over half were African-American and nearly one-third were Latino.10
77. Most of those released from New York State prisons – nearly two-thirds since 1985 – go to New York City to live.11 In 2011, New York City’s own Department of Correction released 88,000 people from its disproportionately African-American and Latino inmate population.12 The reentering population in New York City is therefore very large as well as disproportionately minority.
78. Unlike African Americans and Latinos, whites are incarcerated, and therefore released from jails and prisons, at rates significantly lower than their representation in the general population at the national, New York State, and New York City levels.
79. In addition to the large number of prisoners already being released, more than 46,000 additional federal prisoners are expected to become eligible for early release over the next several years. In April 2014, the United States Sentencing Commission voted unanimously to retroactively apply lower sentencing ranges for certain drug offenses. This will permit prisoners currently serving under these offenses to apply for early release. Approximately 75% of the prisoners eligible to apply are African-American or Latino.13
10 Id. 11 Id. 12 New York City Dept. of Correction, 2nd Quarter Fiscal Year 2012, Oct.-Dec. Report 2 (2012), http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCAQFjAA&url=http%3A%2F% 2Fwww.nyc.gov%2Fhtml%2Fdoc%2Fdownloads%2Fpdf%2Fdoc_at_a_glance.pdf&ei=_TRRVLsxp9qwBMnjgjg& usg=AFQjCNH34hX9wdSCxjAlRM1pqa72P6EWRg&sig2=cDD3q9NfHnhJ9kjSgD8rg&bvm=bv.78597519,d.cWc. 13 See supra note 6.
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80. The sheer number of people released from prison every year has skyrocketed largely because the incarcerated population in the United States has grown from 300,000 in 1980 to more than 2.3 million today. Approximately 10 million misdemeanor cases are filed every year.14 An additional 12 million people across the country have at least one felony conviction.15 At the same time, it has become much easier and common for housing providers to identify and ban people with criminal records because of the growth of companies that provide inexpensive background checks via the Internet.
81. The dramatic increase in the number of incarcerated people over these years is due largely to the widespread policy of pursuing non-violent drug offenders. Non-violent drug offenses alone account for two-thirds of the rise in the federal inmate population and more than half of the rise in state prisoners between 1985 and 2000.
82. The national prison population is now comprised overwhelmingly of individuals convicted of non-violent crimes. As of 2010, less than 10% of the federal prison population had been convicted of a violent crime.16
83. The massive increase in incarceration and in the number of people with criminal convictions has hit African Americans and Latinos especially hard. They are incarcerated at rates significantly disproportionate to their numbers in the United States general population.
14 Alexandra Natapoff, Misdemeanors, 85 S. CAL. L. REV. 1313 (2012). 15 See supra note 8 at 938. 16 Paul Guerino, Paige M. Harrison, and William J. Sabol, U.S. Dept. of Justice, Prisoners in 2010, BJS Bulletin 1 (Dec. 2011), http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCMQFjAA&url=http%3A%2F% 2Fwww.bjs.gov%2Fcontent%2Fpub%2Fpdf%2Fp10.pdf&ei=sjZRVPOEK_8sASRg4GACA&usg=AFQjCNEPKwaNRy9ORMlSwxCPr3ax_dIvGA&sig2=NCZDIUCD69T-y2raD44NA&bvm=bv.78597519,d.cWc
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Together, African Americans and Latinos comprise approximately 58% of all prisoners.17 However, they only make up 30% of the U.S. population.18
84. Men overwhelmingly comprise the nation’s inmate population and the disparities by race are especially stark among the male population. African Americans represent 13% of the United States male population but over 40% of the more than two million men currently incarcerated. Based on national incarceration data, the U.S. Department of Justice estimates that 1 in 3 African-American men will go to prison at some point in their lifetime. For Latino men, the rate of expected incarceration is 1 in 6. For white men, the figure is only 1 in 17.19 That is, African-American men are six times more likely to be incarcerated than white men, and Latino men are almost three times more likely to be incarcerated than white men.20
85. The above-referenced disparities persist across categories of crime, such as drug possession.
86. New York State and New York City race and incarceration statistics mirror the national data. Of the 54,235 inmates under State custody on January 1, 2013, 49.5% were
17 See generally NAACP, Criminal Justice Factsheet (2009), http://www.naacp.org/pages/criminal-justice-factsheet. 18 See U.S. Census Bureau, Statistical Abstract of the United States: 2012, Table 6 (2012), http://www.census.gov/compendia/statab/2012edition.html. 19 The Sentencing Project, Report of the Sentencing Project to the United Nations Human Rights Committee: Regarding Racial Disparties in the United States Criminal Justice System 1 (Aug. 2013), http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCMQFjAA&url=http%3A%2F% 2Fsentencingproject.org%2Fdoc%2Fpublications%2Frd_ICCPR%2520Race%2520and%2520Justice%2520Shadow %2520Report.pdf&ei=3zdRVLmII-nasATY64AI&v6u=https%3A%2F%2Fs-v6exp1ds.metric.gstatic.com%2Fgen_204%3Fip%3D50.242.218.113%26ts%3D1414608864553895%26auth%3Dfg6dk3vi tleto2x3z4zvhqfeu6bstw25%26rndm%3D0.46951305062984383&v6s=2&v6t=2831&usg=AFQjCNH3mh3wqJlc32 hwhRKt75FxmCBWrg&sig2=X1vmoYBfe_jMR-AbtEozqA&bvm=bv.78597519,d.cWc 20 Id.
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African-American and 24% were Latino.21 Yet the State’s general population is just 15.9% African-American and 17.6% Latino.
87. Of the 12,386 City inmates in custody on December 31, 2012, 57% were AfricanAmerican and 33% were Latino.22 The City’s general population, however, is only 25.5% African-American and 28.6% Latino.
88. Much of the disparity in New York is due to the fact that African Americans are significantly more likely than whites to be arrested for drug-possession. 23 For example, African Americans are four times as likely as whites to be arrested for marijuana possession despite research showing equivalent marijuana use; such arrests increased substantially in recent years in New York City due to stop and frisk police tactics.
89. The bottom line is clear: more people have criminal records than ever before, and those people are disproportionately African-American and Latino. In New York City, New York State, and the country as a whole, African Americans and Latinos are far more likely than whites to have a criminal record.
90. This means both that African Americans and Latinos are much likelier than whites to be barred from housing by automatic exclusions of people with records and that the absolute number of African Americans and Latinos affected is very large.
21 State of New York Dept. of Correction and Comm. Supervision, Under Custody Report: Profile of Inmate Population Under Custody on January 1, 2013 ii (Jan. 2013), http://www.doccs.ny.gov/Research/ Reports/2013/UnderCustody_Report_2013.pdf. 22 See supra note 12. 23 Ryan S. King, The Sentencing Project, Disparity By Geography: The War on Drugs in America’s Cities 15 (May 2008), http://www.sentencingproject.org/doc/publications/dp_drugarrestreport.pdf.
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91. The EEOC’s analysis of the impact of blanket bans in the employment context further confirms the disparate impact described here. The EEOC has concluded from analyzing national criminal records data that blanket bans have a disparate impact on the basis of race, and sets forth such a presumption in its Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964 (“Enforcement Guidance”).24
92. The EEOC’s conclusion applies to the disparate impact analysis here because blanket bans operate the same way in housing as they do in employment. In both contexts, applicants are uniformly and permanently excluded, whether from housing opportunities or employment. They are excluded based solely on the fact of a prior conviction, regardless of whether they pose a current risk.
B. Defendants’ Blanket Ban at The Sand Castle Disproportionately and Severely Impacts African Americans and Latinos in New York City
93. Just like blanket bans generally, Defendants’ specific blanket ban at The Sand Castle has a clear disparate impact on the basis of race. In fact, the disparate impact is even greater than a blanket ban would have at a national or statewide level because at the local level (i.e., New York City) incarceration rates for whites and minorities are even more disproportionate. Upon information and belief, The Sand Castle attracts potential tenants from all over New York City.
94. In addition to prohibiting residents with criminal records, The Sand Castle purports to require that potential tenants earn a minimum of $30,000 per year. But a stark disparate impact persists even when this purported requirement is taken into account.
24 See supra note 3. The prior version from 1990 reached the same conclusion and set forth the same presumption.
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95. Using data from the United States Census Bureau, Bureau of Justice Statistics, and Bureau of Labor Statistics, the likely racial composition of City residents who have criminal records and annual incomes near or above $30,000 can be and has been ascertained through an independent analysis.
96. The analysis shows that 12.2% of African-American men who live in New York City, and 18% of Latino men who live in the City, satisfy The Sand Castle’s income threshold but are nonetheless disqualified from living at The Sand Castle because of Defendants’ blanket ban.
97. The analysis further shows that only 4.1% of white men who live in the City satisfy the income threshold but are disqualified by the blanket ban.
98. This means that otherwise qualified African-American men are three times as likely as white men to be disqualified by Defendants’ blanket ban, and that Latino men are nearly four and one-half times as likely to be disqualified.
99. These figures, if anything, understate the disparities. Alternative statistical models indicate that the disparate impact caused by Defendants’ blanket ban may be significantly greater.
100. Defendants also purport to require potential tenants to have a credit score above 600. Because African-American and Latino City residents with incomes near or above $30,000 also typically have FICO scores over 600, credit score is not independently important for this analysis.25
101. The racially disparate impact on African Americans and Latinos of Defendants’ blanket refusal to provide housing to people with criminal records is clear from these findings.
25 Benjamin Levinger, Marques Benton, Stephan Meier, The Cost of Not Knowing the Score: Self-Estimated Credit Scores and Financial Outcomes, 32 J. Fam. Econ. 566, 569 (2011).
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102. Moreover, even if Defendants’ actions were viewed more narrowly as applying a blanket ban only against Fortune and its clients – notwithstanding Defendants’ explicit statement that the policy applies to everyone – that would still clearly have a racially disparate impact. Because Fortune’s clients are over 95% African-American and Latino and any income and credit score requirements are irrelevant since Fortune would be the actual renter, the disparate impact would be even greater than on the general population.
C. Giving Individualized Consideration to Applicants’ Circumstances Is a Less Discriminatory Alternative That Would Satisfy Any Concern About Safety at The Sand Castle
103. Defendants’ blanket ban is not necessary to achieve a legitimate nondiscriminatory business purpose. While public safety may be Defendants’ rationale for automatically excluding Fortune’s clients and all others with criminal records from housing, blanket bans are not necessary to satisfy that concern. Giving individualized consideration to each potential Sand Castle resident’s circumstances is a less discriminatory alternative to Defendants’ blanket ban and would serve public safety equally well.
104. Specifically, public safety at The Sand Castle can be protected through the use of individual assessments that consider the nature of an individual’s conviction, the amount of time since the conviction or release, and evidence of rehabilitation, among other factors. An individualized assessment allows people who have a criminal record, but who pose no realistic current or future threat to the community, to obtain housing. This more targeted and narrower approach both protects public safety and is less discriminatory and exclusionary because it reduces the number of minority applicants who are banned from The Sand Castle.
105. In the analogous employment context, the EEOC recognizes that individualized assessments are almost always required by law because they provide a less discriminatory
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alternative to blanket bans and are sufficient to protect legitimate interests like safety. The agency’s Enforcement Guidance advocates the use of “a targeted screen considering at least the nature of the crime, the time elapsed, and the nature of the job,” “notice to the individual that he has been screened out because of a criminal conviction; an opportunity for the individual to demonstrate that the exclusion should not be applied due to his particular circumstances; and consideration by the employer as to whether the additional information provided by the individual warrants an exception to the exclusion and shows that the policy as applied is not job related and consistent with business necessity.”26
106. The EEOC’s sound rationale applies equally to housing, including housing at The Sand Castle.
107. A federal court of appeals has also recognized that blanket bans violate antidiscrimination laws (specifically, in the context of employment) because their disparate impact cannot be justified by a business necessity such as safety. See Green v. Missouri Pacific Railroad, 523 F.2d 1290, 1293 (8th Cir. 1975). Green held that a company policy automatically rejecting all applicants with a conviction for an offense other than a minor traffic infraction caused a disparate impact based on race and could not be justified by business necessity. The Eighth Circuit noted that it “could not conceive of any business necessity that would automatically place every individual convicted of any offense, except a minor traffic offense, in the permanent ranks of the unemployed.” Id. at 1298.
108. Recent correspondence from HUD suggests it agrees that blanket bans in housing are not necessary to achieve a legitimate interest and constitute unlawful discrimination on the basis of race.
26 See supra note 3.
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109. In a 2011 letter to public housing authorities across the country, the HUD Secretary and the Assistant Secretary for Public and Indian Housing emphasized the importance of “helping ex-offenders gain access to one of the most fundamental building blocks of a stable life—a place to live.” The letter makes clear that beyond the very limited, categorical exclusion of individuals who were convicted of manufacturing methamphetamine on the premises of federally assisted housing and sex offenders who are subject to a lifetime registration requirement, public housing authorities enjoy “broad discretion” to “consider all relevant information, including factors which indicate a reasonable probability of favorable future conduct.” Further, the letter provides that public housing authorities “should take into consideration,” for example, evidence of rehabilitation and participation in counseling programs.
110. In making 46,000 drug offenders eligible to apply for early release from prison, the United States Sentencing Commission unanimously concluded that individual assessments of each prisoner will suffice to protect public safety. Specifically, judges will consider a range of factors when evaluating each early-release application, including the nature and circumstances of the offense, the offender’s characteristics, deterrence, and the offender’s potential threat to society.27 The Commission emphasized that this “measured approach” will “protect public safety by enabling appropriate consideration of individual petitions by judges.”28 The Commission thus has endorsed individualized assessments, rather than blanket judgments about those with criminal records, as sufficient for the protection of public safety.
27 U.S. Sentencing Comm., Frequently Asked Questions: Retroactive Application of the 2014 Drug Guidelines Amendment 2, http://www.ussc.gov/sites/default/files/pdf/amendment-process/materials-on-2014-drug-guidelinesamendment/20140724_FAQ.pdf. 28 U.S. Sentencing Comm., News Release: United States Sentencing Commission, U.S. Sentencing Commission Unanimously Votes to Allow Delayed Retroactive Reduction in Drug Trafficking Sentences (July 18, 2014), http://www.ussc.gov/news/press-releases-and-news-advisories/press-releases-and-news-advisories-archives.
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111. That several Fortune clients have lived at The Sand Castle successfully and without incident further undermines any suggestion that Defendants’ policy is necessary to serve public safety. Yet those clients would have been excluded from living at The Sand Castle had Fortune tried to lease units for them in or after the summer of 2013 when Defendants were aware that Fortune’s clients have criminal histories.
112. Indeed, under Defendants’ current policy, even formerly incarcerated individuals with exemplary post-incarceration achievements are excluded. For example, former Fortune client Stanley Richards, released from prison more than 20 years ago, is Fortune’s Senior Vice President. Hired as a counselor at Fortune in 1991, Mr. Richards steadily worked his way up, becoming manager of career development and deputy executive director. He currently oversees all of Fortune’s housing programs and has developed a wide range of skills and experience in implementing supportive reentry programs for people released from prison. Mr. Richards’ work and achievements have been recognized by the White House and the Department of Labor. Another former Fortune client, The Honorable Walter Strauss, became a Manhattan Housing Court judge after serving two prison sentences for non-violent crimes. Prior to taking the bench, Judge Strauss obtained his GED through a prison education program, attended the City University of New York at night for his bachelor’s degree, and attended Rutgers University Law School. Both Mr. Richards and Judge Strauss are examples of individuals who changed their lives for the better after incarceration, establishing careers and collecting professional accolades. Like many other Fortune clients who have led successful, crime-free lives post incarceration, neither pose any threat whatsoever to public safety. Even so, neither Mr. Richards nor Judge Strauss would be welcome at The Sand Castle.
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113. It would not compromise any legitimate concern Defendants may have to give individualized consideration to Fortune’s clients’ particular circumstances and allow those who do not threaten public safety to live at The Sand Castle. Defendants’ blanket criminal record ban at The Sand Castle nonetheless prevents any individualized consideration. Defendants’ policy of automatically excluding people with criminal records, including people like Fortune’s clients who are successfully and commendably reintegrating into society, is not necessary to achieve a legitimate business purpose.
114. Because Defendants’ blanket ban has a large discriminatory impact on the basis of race and is not necessary to achieve a legitimate business purpose, it is unlawfully discriminatory.
115. Had Defendants enforced any lawful and appropriate nondiscriminatory policy regarding the consideration of criminal records, including performing in good faith an individualized assessment, they would have had no valid basis to deny housing at The Sand Castle to most of Fortune’s clients. Moreover, if Defendants implement a lawful policy, they will have no valid basis to deny housing at The Sand Castle to most of Fortune’s clients in the future.
116. The discriminatory disparate impact of Defendants’ blanket ban is so large and foreseeable – and its overbreadth so unnecessary – that Defendants’ intent to discriminate against African Americans and Latinos can be inferred. Fortune contends that Defendants fully understand the unnecessary disparate impact that the blanket ban has on African-American and Latino applicants as well as the effect that such a policy has on the racial make-up of The Sand Castle. Defendants nonetheless intentionally implemented and continue to pursue that policy for
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the express purpose of decreasing or at least limiting the number of persons of color at the property. III. DEFENDANTS’ BLANKET BAN AND OTHERS LIKE IT PREVENT
FORMERLY INCARCERATED INDIVIDUALS FROM OBTAINING CRITICALLY IMPORTANT SAFE AND STABLE HOUSING 117. The harm inflicted by discriminatory blanket bans is great not only in terms of the sheer number of people affected, as shown above, but also in terms of the devastating consequences for each affected individual trying to reenter society. Preventing this harm, or at the very least minimizing it, is central to Fortune’s mission. 118. Individuals reentering society after time in prison confront an array of challenges. These include finding employment, securing government benefits, and reestablishing community ties. But their most immediate need is to secure safe and affordable housing. Especially in a place like New York City, where housing is extremely expensive, that is very difficult. 119. Research shows that success in finding adequate housing, though difficult, is critically important to meeting the other challenges faced by reentrants. Housing has been characterized, properly, as the “lynchpin that holds the reintegration process together.”29 120. A 2004 New York City study demonstrated that more than 30% of single adults entering shelters under the Department of Homeless Services have recently been released from city and state correctional institutions. Without stable housing, many continually cycle between incarceration and shelters.30
29 See supra note 5. 30 NYC Department of Homeless Services, Summary of DOC/DHS Data Match (Jan. 22, 2004) (draft analysis submitted for review as part of the New York City Dept. of Correction and Dept. of Homeless Services Discharge Planning Initiative).
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121. Other research has shown that reentrants who do not find stable housing in the community are more likely to recidivate than those who are able to secure permanent housing.
122. An Urban Institute study likewise found a causal connection between the inability to find permanent housing and recidivism. According to the study, reentrants often did not succeed in the community if they could not find a safe and stable place to live.31
123. The Vera Institute of Justice found that parolees released from incarceration who entered New York City homeless shelters were seven times more likely to abscond from postrelease supervision than those with more stable housing. It also found that reentrants in temporary shelter housing had more difficulty resisting drugs and finding work.32
124. This and other evidence makes plain that adequate housing is crucial to success in the reintegration process. Yet blanket bans directly prevent reentrants from obtaining such housing. By design, blanket bans do so thoughtlessly, without giving any consideration to the particular circumstances of a person trying to find a place to live. This complete disregard for individual circumstances cannot be justified under the law, and needlessly inflicts great harm on the formerly incarcerated, their communities, and organizations like Fortune seeking to help them become productive members of society.
INJURY TO THE FORTUNE SOCIETY 125. Fortune has been directly and substantially harmed by the blanket ban against providing housing to formerly incarcerated individuals and others with criminal records that Defendants have maintained since at least the summer of 2013. Defendants’ policy has diminished Fortune’s ability to perform its work, forced it to divert resources, and frustrated its
31 Jeremy Travis and Caterina G. Roman, Urban Inst., Taking Stock: Housing, Homelessness, and Prisoner Reentry 7-10 (2004), http://www.urban.org/publications/411096.html. 32 Id. at 8.
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mission of ensuring that formerly incarcerated people can successfully reenter society and obtain safe and stable housing.
126. Defendants’ policy placed Fortune at significant risk of losing grant funding and caused unnecessary costs and delay related to the grant process. As described in paragraph 54 above, Fortune received a grant from the State of New York to obtain 25 rental units in Queens for reentrants. Defendants’ denial of housing delayed Fortune’s ability to meet the terms of the grant and thereby put Fortune at risk of losing the grant altogether. Ultimately, in order to fulfill its obligation, Fortune had to hire an additional staff member to search for and secure appropriate units in other Queens apartment buildings. After Defendants’ discriminatory conduct, it took Fortune additional months to obtain the 25 units necessary to satisfy the grant’s terms.
127. Further, Fortune devoted substantial time and other resources to identify The Sand Castle as appropriate housing for its clients. Defendants’ discriminatory criminal records policy, however, prevented Fortune from placing clients there. As a result, Fortune has been forced to expend scarce and substantial additional resources to find adequate alternative housing options for clients who otherwise would have been placed at The Sand Castle. In addition to additional staff time, Fortune has spent a significant amount of money in broker fees because it has had to employ brokers and agents to assist it with finding housing for its clients in Queens.
128. Defendants’ actions also impeded Fortune’s programs in another way. When Fortune is able to place multiple clients in one geographic area, it reduces travel time and costs for Fortune’s caseworkers. This is because rather than spending time traveling to several different buildings in different neighborhoods for just a few meetings, in the same time period, a caseworker can visit with multiple clients living at the same site. Defendants’ refusal to allow Fortune clients as tenants, and Fortune’s corresponding need to place clients at multiple sites
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spread throughout Queens, has increased both the temporal and financial cost of individual caseworker visits.
129. Defendants’ discriminatory conduct has also directly impeded Fortune’s ability to operate its housing programs and frustrated its mission by disrupting its housing pipeline. As described above, many of Fortune’s clients progress from temporary to phased-permanent to permanent housing. By impeding Fortune’s ability to place its clients at The Sand Castle, Defendants have reduced the effectiveness of this model. Specifically, Defendants’ discriminatory refusal caused Fortune clients otherwise eligible to live in The Sand Castle to remain in the Fortune Academy’s temporary housing. Because these clients remained at the Academy, fewer beds were available to other individuals newly released from prison and in need of immediate assistance. But for Defendants’ discriminatory actions, Fortune staff would have been able to devote more time to locating housing for clients currently in its emergency and phased-permanent housing and Fortune would have been able to meet the needs of more clients.
130. Moreover, as a direct result of Defendants’ discriminatory conduct, Fortune has had to divert resources to engage in advocacy, community education, and outreach about the need to increase the availability of housing for formerly incarcerated individuals. Fortune has been forced to allocate limited staff time and resources to both investigate and counteract Defendants’ discriminatory conduct. As a result, Fortune has had to forgo other programmatic activities it would have engaged in.
131. Unless enjoined, Defendants will continue to engage in the unlawful practices described herein and the extent of Fortune’s injuries will increase.
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132. Defendants’ unlawful actions described herein were, and are, intentional, willful, and malicious, and/or have been, and are, implemented with callous and reckless disregard for federally protected rights.
133. Within 10 days of the commencement of this action, Plaintiffs will provide notice of this action to the New York City Commission on Human Rights and Corporation counsel, pursuant to the New York City Administrative Code § 8-502(c).
CAUSES OF ACTION Count I (Race Discrimination—42 U.S.C. § 3604) 134. Plaintiff repeats and incorporates by reference all allegations set forth in Paragraphs 1 through 133 above. 135. Defendants’ acts, policies, and practices have an adverse and disproportionate impact on African Americans and Latinos in New York City as compared to similarly situated whites. This adverse and disproportionate impact is the direct result of Defendants’ blanket policy of automatically refusing housing to all people with criminal records with no consideration of their individual characteristics and circumstances. This policy is not necessary to serve any substantial legitimate, nondiscriminatory interest, and any such interest can be satisfied by another practice – providing individualized consideration – that would have a less discriminatory effect. 136. Defendants’ acts, policies, and practices have been carried out with the intention of discriminating on the basis of race and color. Defendants have adopted and maintained an exclusionary policy regarding the use of criminal records with the intent and expectation that the policy disproportionately prevents African Americans and Latinos from obtaining housing at The Sand Castle.
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137. Defendants’ acts, policies, and practices constitute discrimination and violate the Fair Housing Act, as amended, 42 U.S.C. §§ 3604, and its implementing regulations, in that:
a. Defendants’ acts, policies, and practices have made and continue to make housing unavailable because of race and/or color, in violation of 42 U.S.C. § 3604(a); b. Defendants’ acts, as described above, provide different terms, conditions, and privileges of rental housing, as well as different services and facilities in connection therewith, on the basis of race and/or color, in violation of 42 U.S.C. § 3604(b); and c. Defendants’ notices and statements have expressed and/or continue to express a preference, limitation, and discrimination based on race and/or color, in violation of 42 U.S.C. § 3604(c).
Count II (Race Discrimination—N.Y. Exec. Law § 296 (5)) 138. Plaintiff repeats and incorporates by reference all allegations set forth in Paragraphs 1 through 133 above. 139. Defendants’ acts, policies, and practices have an adverse and disproportionate impact on African Americans and Latinos in New York City as compared to similarly situated whites. This adverse and disproportionate impact is the direct result of Defendants’ blanket policy of automatically refusing housing to all people with criminal records with no consideration of their individual characteristics and circumstances. This policy is not necessary to serve any substantial, legitimate, nondiscriminatory interest, and any such interest can be satisfied by another practice – providing individualized consideration – that would have a less discriminatory effect.
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140. Defendants’ acts, policies, and practices have been carried out with the intention of discriminating on the basis of race and color. Defendants have adopted and maintained an exclusionary policy regarding the use of criminal records with the intent and expectation that the policy disproportionately prevents African Americans and Latinos from obtaining housing at The Sand Castle.
141. Defendants’ acts, policies, and practices constitute discrimination and violate the New York State Human Rights Act, NY Executive Code § 296(5), in that:
a. Defendants’ acts, policies, and practices have made and continue to make housing unavailable because of race and/or color, in violation of NY Executive Code § 296(5)(a)(1); b. Defendants’ acts, as described above, provide different terms, conditions, and privileges of rental housing, as well as different services and facilities in connection therewith, on the basis of race and/or color, in violation of NY Executive Code § 296(5)(a)(2); c. Defendants’ notices and statements have expressed and/or continue to express a preference, limitation, and discrimination based on race and/or color, in violation of NY Executive Code § 296(5)(a)(3); and d. To the extent that any Defendant acted in its capacity as a real estate broker or agent, its actions also violate NY Executive Code § 296(5)(c)(1)-(2). Count III (Race Discrimination—Admin. Code of City of NY § 8-107(5)) 142. Plaintiff repeats and incorporates by reference all allegations set forth in Paragraphs 1 through 133 above.
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143. Defendants’ acts, policies, and practices have an adverse and disproportionate impact on African Americans and Latinos in New York City as compared to similarly situated whites. This adverse and disproportionate impact is the direct result of Defendants’ blanket policy of automatically refusing housing to all people with criminal records with no consideration of their individual characteristics and circumstances. This policy is not necessary to serve any substantial, legitimate, nondiscriminatory interest, and any such interest can be satisfied by another practice – providing individualized consideration – that would have a less discriminatory effect.
144. Defendants’ acts, policies, and practices have been carried out with the intention of discriminating on the basis of race and color. Defendants have adopted and maintained an exclusionary policy regarding the use of criminal records with the intent and expectation that the policy disproportionately prevents African Americans and Latinos from obtaining housing at The Sand Castle.
145. Defendants’ acts, policies, and practices constitute discrimination and violate the New York City Human Rights Act, Administrative Code of City of NY § 8-107(5), in that:
a. Defendants’ acts, policies, and practices have made and continue to make housing unavailable because of race and/or color, in violation of Administrative Code of City of NY § 8-107(5)(a)(1); b. Defendants’ acts, as described above, provide different terms, conditions, and privileges of rental housing, as well as different services and facilities in connection therewith, on the basis of race and/or color, in violation of Administrative Code of City of NY § 8-107(5)(a)(2);
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c. Defendants’ notices and statements have expressed and/or continue to express a preference, limitation, and discrimination based on race and/or color, in violation of Administrative Code of City of NY § 8-107(5)(a)(3); and d. To the extent that any Defendant acted in its capacity as a real estate broker or agent, its actions also violate Administrative Code of City of NY § 8107(5)(c)(1)-(2). Count IV (Source of Income Discrimination—Admin. Code of City of NY §
8-107(5)) 146. Plaintiff repeats and incorporates by reference all allegations set forth in Paragraphs 1 through 133 above. 147. Defendants’ acts, policies, and practices, by refusing to rent apartments to Plaintiff, discriminated because of source of income. Specifically, Defendants refused to house individuals whose rent was subsidized by Fortune’s housing programs, and made a clear statement that The Sand Castle does not allow residents whose rent is subsidized by programs. 148. Defendants’ acts, policies, and practices constitute discrimination and violate the New York City Human Rights Act, Administrative Code of City of NY § 8-107(5), in that:
a. Defendants’ acts, policies, and practices have made and continue to make housing unavailable because of source of income, in violation of Administrative Code of City of NY § 8-107(5)(a)(1); b. Defendants’ acts, as described above, provide different terms, conditions, and privileges of rental housing, as well as different services and facilities in connection therewith, on the basis of source of income, in violation of Administrative Code of City of NY § 8-107(5)(a)(2);
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c. Defendants’ notices and statements have expressed and/or continue to express a preference based on source of income, in violation of Administrative Code of City of NY § 8-107(5)(a)(3); and d. To the extent that any Defendant acted in its capacity as a real estate broker or agent, its actions also violate Administrative Code of City of NY § 8107(5)(c)(1)-(2).
DEMAND FOR JURY TRIAL 149. Pursuant to Fed. R. Civ. P. 38(b), Plaintiff demands a trial by jury on all issues triable as of right.
PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully prays that the Court grant it the following relief:
(1) Enter a declaratory judgment finding that the foregoing actions of Defendants violate 42 U.S.C. § 3604, New York Executive Law § 296(5), and Administrative Code of City of NY § 8-107(5);
(2) Enter an injunction enjoining Defendants and their directors, officers, agents and employees from continuing to publish, implement, and enforce the illegal, discriminatory conduct described herein and directing Defendants and their directors, officers, agents and employees to take all affirmative steps necessary to remedy the effects of the illegal, discriminatory conduct described herein and to prevent additional instances of such conduct or similar conduct from occurring in the future;
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(3) Award compensatory damages to Plaintiff in an amount to be determined by the jury that would fully compensate Plaintiff for its injuries caused by the conduct of Defendants alleged herein;
(4) Award punitive damages to Plaintiff in an amount to be determined by the jury that would punish Defendants for the willful, malicious, and reckless conduct alleged herein and that would effectively deter similar conduct in the future;
(5) Award Plaintiff its reasonable attorneys’ fees and costs pursuant to 42 U.S.C. § 3613(c)(2), NY Executive Code § 297(10), and Administrative Code of City of NY § 8-502(g);
(6) Award prejudgment interest to Plaintiff; and (7) Order such other relief as this Court deems just and equitable.

May 1, 2015

Respectfully submitted,
/s/ Ryan Downer Ryan C. Downer (RD3249) John P. Relman* Glenn Schlactus* Jia Cobb* RELMAN, DANE & COLFAX, PLLC 1225 19th St., NW, Suite 600 Washington, D.C. 20036-2456 Tel: 202-728-1888 Fax: 202-728-0848 E-mail: jrelman@relmanlaw.com
rdowner@relmanlaw.com gschlactus@relmanlaw.com jcobb@relmanlaw.com
*admitted pro hac vice

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 Case 1:14-cv-06410-VMS Document 102 Filed 10/18/16 Page 1 of 25 PageID #: 7945

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

THE FORTUNE SOCIETY, INC., Plaintiff, v.
SANDCASTLE TOWERS HOUSING DEVELOPMENT FUND CORP., et al.,
Defendants.

) ) ) ) ) Civil Action No. CV-14-6410 (VMS) ) ) ) ) ) )

UNITED STATES OF AMERICA’S STATEMENT OF INTEREST

Case 1:14-cv-06410-VMS Document 102 Filed 10/18/16 Page 2 of 25 PageID #: 7946
TABLE OF CONTENTS I. INTEREST OF THE UNITED STATES ...................................................................................1 II. BACKGROUND........................................................................................................................2
A. Barriers to Housing for Individuals with Criminal Records ..........................................2 B. The Sandcastle’s Use of Criminal Records in its Application Process .........................3 III. ARGUMENT ............................................................................................................................5 A. Challenges to the Discriminatory Effects of Bans on Criminal Records Are
Evaluated Based on the FHA’s Three-Step Framework................................................6 B. Blanket Bans on Tenants with Criminal Records May Have a Disparate Impact .........8 C. Blanket Bans on Tenants with Criminal Records Cannot be Justified by
Generalizations about Safety and Security ..................................................................14 D. An Individualized Review of Tenants with Criminal Records May Provide a Less
Discriminatory Alternative to Blanket Bans................................................................18 IV. CONCLUSION.......................................................................................................................19
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CASES

TABLE OF AUTHORITIES

Alexander v. Edgewood Mgmt. Corp., No. 1:15-cv-1140-RCL, 2016 WL 5957673 (D.D.C. July 25, 2016) ..................................... 12

Artisan/Am. Corp. v. City of Alvin, 588 F.3d 291 (5th Cir. 2009) .................................................................................................... 9

Betsey v. Turtle Creek Assocs., 736 F.2d 983 (4th Cir. 1984) .................................................................................................. 12

Bischoff v. Brittain, No. 2:14-1970, 2014 WL 5106991 (E.D. Cal. Oct. 10, 2014)................................................ 12

Brown v. Omaha Hous. Auth., No. 8:05-cv-423, 2007 WL 2123750 (D. Neb. July 20, 2007) ............................................... 10

Bryant Woods Inn, Inc. v. Howard Cty., 911 F. Supp. 918 (D. Md. 1996) ............................................................................................. 12

Connecticut v. Teal, 457 U.S. 440 (1982)................................................................................................................ 12

Doe v. United States, __ F.3d __, 2016 WL 4245425 (2d Cir. Aug. 11, 2016) .......................................................... 2

Dothard v. Rawlinson, 433 U.S. 321 (1977).......................................................................................................... 10, 11

Easterling v. Connecticut, 783 F. Supp. 2d 323 (D. Conn. 2011) ..................................................................................... 11

EEOC v. Joint Apprenticeship Comm. of Joint Indus. Bd. of Elec. Indus., 186 F.3d 110 (2d Cir. 1998).................................................................................................... 11

El v. Se. Pa. Transp. Auth., 1479 F.3d 232 (3d Cir. 2007)...................................................................................... 14, 16, 18

Fair Hous. Cong. v. Weber, 993 F. Supp. 1286 (C.D. Cal. 1997) ....................................................................................... 12

Field v. Orkin Extermination Co., No. 00-5913, 2002 WL 32345739 (E.D. Pa. Feb. 21, 2002) .................................................. 16

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Gashi v. Grubb & Ellis Prop. Mgmt. Servs., Inc., 801 F. Supp. 2d 12 (D. Conn. 2011) ....................................................................................... 10
Green v. Mo. Pac. R.R. Co., 523 F.2d 1290 (8th Cir. 1975) ......................................................................................... passim
Green v. Mo. Pac. R.R. Co., 549 F.2d 1158 (8th Cir. 1977) ................................................................................................ 16
Griggs v. Duke Power Co., 401 U.S. 424 (1971)................................................................................................................ 14
MHANY Mgmt., Inc. v. Cty. of Nassau, 819 F.3d 581 (2d Cir. 2016)...................................................................................... 6, 7, 14, 17
Mountain Side Mobile Estates P’ship v. Sec’y of HUD, 56 F.3d 1243 (10th Cir. 1995) ................................................................................................ 10
Mt. Holly Gardens Citizen in Action, Inc. v. Twp. of Mt. Holly, 658 F.3d 375 (3d Cir. 2011)...................................................................................................... 7
R.I. Comm’n for Human Rights v. Graul, 120 F. Supp. 3d 110 (D.R.I. 2015).......................................................................................... 10
Richardson v. Hotel Corp. of Am., 332 F. Supp. 519 (E.D. La. 1971) ........................................................................................... 13
Tex. Dep’t of Hous. & Cmty. Affairs v. Inclusive Communities Project, Inc., 135 S. Ct. 2507 (2015) .............................................................................................. 6, 7, 13, 15
TRW Inc. v. Andrews, 534 U.S. 19 (2001).................................................................................................................... 8
Tsombanidis v. W. Haven Fire Dep’t, 352 F.3d 565 (2d Cir. 2003)...................................................................................................... 9
United States v. Garden Homes Mgmt., Corp., 156 F. Supp. 2d 413 (D.N.J. 2001) ......................................................................................... 13
Utah v. Strieff, 136 S. Ct. 2056 (2016) .............................................................................................................. 2
Waldon v. Cincinnati Pub. Sch., 941 F. Supp. 2d 884 (S.D. Ohio 2013) ................................................................................... 16
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STATUTES AND REGULATIONS
28 U.S.C. § 517............................................................................................................................. 1
42 U.S.C. § 3604........................................................................................................................... 1
42 U.S.C. § 3607........................................................................................................................... 7
42 U.S.C. § 3610........................................................................................................................... 1
42 U.S.C. § 3612........................................................................................................................... 1
42 U.S.C. § 3613........................................................................................................................... 1
42 U.S.C. § 3614........................................................................................................................... 1
24 C.F.R. § 100.500 ............................................................................................................. passim
LEGISLATIVE AND REGULATORY MATERIALS
HUD, Implementation of the Fair Housing Act’s Discriminatory Effects Standard, 78 Fed. Reg. 11,460 (Feb. 15, 2013) .................................................................................. 7, 15
HUD, Office of Gen. Counsel Guidance on Application of Fair Hous. Act Standards to the Use of Criminal Records by Providers of Hous. & Real Estate-Related Transactions (Apr. 4, 2016), available at http://portal.hud.gov/hudportal/documents/ huddoc?id=HUD_OGCGuidAppFHAStandCR.pdf ........................................................ passim
HUD, Office of Pub. & Indian Hous., Guidance for Public Hous. Agencies (PHAs) and Owners of Federally-Assisted Hous. on Excluding the Use of Arrest Records in Hous. Decisions (Nov. 2, 2015), available at http://portal.hud.gov/hudportal/documents/ huddoc?id=PIH2015-19.pdf ..................................................................................................... 2
OTHER AUTHORITIES
DOJ, Federal Interagency Reentry Council, https://www.justice.gov/reentry/ federal-interagency-reentry-council.......................................................................................... 1
DOJ, Roadmap to Reentry: Reducing Recidivism Through Improved Reentry Outcomes at the Fed. Bureau of Prisons (Apr. 2016), available at https://www.justice.gov/reentry/file/ 844356/download.................................................................................................................. 1, 2
Exec. Office of the President, Econ. Perspectives on Incarceration and the Criminal Justice System (Apr. 2016), available at https://www.whitehouse.gov/sites/default/files/page/files/ 20160423_cea_incarceration_criminal_justice.pdf .............................................................. 8, 9
iv

Case 1:14-cv-06410-VMS Document 102 Filed 10/18/16 Page 6 of 25 PageID #: 7950 Exec. Office of the President, Nat’l Drug Control Strategy (2011), available at
https://www.whitehouse.gov/ondcp/2011-national-drug-control-strategy ............................... 3 Megan C. Kurlychek et al., Scarlet Letters and Recidivism: Does an Old Criminal Record
Predict Future Offending?, 5 Criminology & Pub. Pol’y 483 (2006).................................... 16 Attorney General Loretta E. Lynch, Remarks at Nat’l Reentry Week Event in Philadelphia
(Apr. 25, 2016), available at https://www.justice.gov/opa/speech/attorney-general-loretta-elynch-delivers-remarks-national-reentry-week-event............................................................... 3 SEARCH, Report of the National Task Force on the Commercial Sale of Criminal Justice Record Information (2005), available at http://www.search.org/files/pdf/ RNTFCSCJRI.pdf ................................................................................................................... 18 The White House & DOJ, The Federal Interagency Reentry Council: A Record of Progress and a Roadmap for the Future (Aug. 2016), available at https://csgjusticecenter.org/ wp-content/uploads/2016/08/FIRC-Reentry-Report.pdf ...................................................... 1, 3
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I. INTEREST OF THE UNITED STATES The United States respectfully submits this Statement of Interest, pursuant to 28 U.S.C. § 517, to address the application of disparate-impact liability under the Fair Housing Act (“FHA”), 42 U.S.C. § 3604(a), (b), in challenges to tenant-screening policies that ban persons who have criminal convictions. The United States Department of Justice (“DOJ”) and the United States Department of Housing and Urban Development (“HUD”) share enforcement authority under the FHA. See 42 U.S.C. §§ 3610; 3612(a), (b), (o); 3613(e); 3614. Additionally, the DOJ and its federal partners have taken steps in recent years to help formerly incarcerated individuals return to their communities. In 2011, DOJ convened the Federal Interagency Reentry Council to discuss and implement strategies to remove barriers to successful reentry of formerly incarcerated individuals so that they can compete for jobs, attain stable housing, support their children and families, and contribute to their communities.1 As part of these efforts, HUD released guidance concerning how the FHA applies to the use of criminal records by providers or operators of housing and real-estate related transactions. See HUD, Office of Gen. Counsel Guidance on Application of Fair Hous. Act Standards to the Use of Criminal Records by Providers of Hous. & Real Estate-Related Transactions (Apr. 4, 2016) (“HUD Guidance”),
1 See DOJ, Roadmap to Reentry: Reducing Recidivism Through Improved Reentry Outcomes at the Fed. Bureau of Prisons 2 (Apr. 2016), available at https://www.justice.gov/reentry/file/ 844356/download; DOJ, Federal Interagency Reentry Council, https://www.justice.gov/reentry/ federal-interagency-reentry-council (last visited Sept. 17, 2016); see also The White House & DOJ, The Federal Interagency Reentry Council: A Record of Progress and a Roadmap for the Future 50-52 (Aug. 2016) (discussing the Federal Interagency Reentry Council’s accomplishments and actions in the context of housing), available at https://csgjusticecenter.org/ wp-content/uploads/2016/08/FIRC-Reentry-Report.pdf.
1

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available at http://portal.hud.gov/hudportal/documents/ huddoc?id=HUD_OGCGuidAppFHAStandCR.pdf.2
The United States thus has a strong interest in ensuring the correct interpretation and application of the FHA in this case, thereby promoting the dismantling of unlawful barriers to housing for formerly incarcerated individuals.
II. BACKGROUND A. Barriers to Housing for Individuals with Criminal Records Each year in America, more than 600,000 citizens are released from federal and state prisons, and 11.4 million individuals are released from local jails.3 Upon release, these individuals face the potential “experience [of] the ‘civil death’ of discrimination by employers, landlords, and whoever else conducts a background check.” Utah v. Strieff, 136 S. Ct. 2056, 2070 (2016) (Sotomayor, J., dissenting); see also Doe v. United States, __ F.3d __, 2016 WL 4245425, at *5 (2d Cir. Aug. 11, 2016) (observing “the unfortunate lifelong toll that . . . convictions often impose on low-level criminal offenders” including the inability to obtain rental housing). One of the greatest potential barriers to successful reentry for those released from incarceration relates to housing, as “[s]table housing is particularly critical for people returning from prison and jail, who face a myriad of challenges while reestablishing themselves in their
2 Previously, HUD had issued guidance directed at the use of arrest records in housing decisions by public housing agencies and owners of federally-assisted housing. See HUD, Office of Pub. & Indian Hous., Guidance for Public Hous. Agencies (PHAs) and Owners of Federally-Assisted Hous. on Excluding the Use of Arrest Records in Hous. Decisions (Nov. 2, 2015), available at http://portal.hud.gov/hudportal/documents/huddoc?id=PIH2015-19.pdf. 3 See Roadmap to Reentry: Reducing Recidivism Through Improved Reentry Outcomes at the Fed. Bureau of Prisons, supra note 1, at 1.
2

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communities.”4 However, “[m]any individuals leaving the criminal justice system are unable to obtain access to housing and as many as 45 percent return to homelessness.”5 This is not just coincidence; as the Attorney General recently remarked, it is “an unfortunately common practice” that landlords deny housing to re-entering individuals based on their criminal records.6
B. The Sandcastle’s Use of Criminal Records in its Application Process The Sandcastle is an affordable rental apartment complex with 917 units in Far Rockaway, Queens. Plaintiff filed suit in October 2014, alleging among other things that the Sandcastle has a policy of categorically excluding applicants who have felony or non-traffic misdemeanor convictions from tenancy, which causes an unjustified disparate impact on African-American and Hispanic applicants in violation of FHA. After discovery, both parties moved for summary judgment on this disparate-impact claim. Plaintiff has presented evidence that Sandcastle publicized its policy of excluding tenants with criminal convictions, including through online advertisements and dozens of e-mail responses to prospective applicants stating that applicants must have “no criminal history” or “no criminal background” to be approved. Pl. Mem. in Supp. of Mot. for Summ. J. (Doc. 94-1) at 10-11. The advertisements and e-mails that plaintiff introduced did not specify any exceptions to the “no criminal history” policy. Id. Plaintiff also analyzed the Sandcastle’s accepted
4 The Federal Interagency Reentry Council: A Record of Progress and a Roadmap for the Future, supra note 1, at 49. 5 Exec. Office of the President, Nat’l Drug Control Strategy 42 (2011) (footnote omitted), available at https://www.whitehouse.gov/ondcp/2011-national-drug-control-strategy. 6 Attorney General Loretta E. Lynch, Remarks at Nat’l Reentry Week Event in Philadelphia (Apr. 25, 2016), available at https://www.justice.gov/opa/speech/attorney-general-loretta-elynch-delivers-remarks-national-reentry-week-event, quoted in Doe, 2016 WL 4245425, at *5.
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application files and found evidence of no more than six accepted tenants with non-traffic-related criminal convictions in the past decade. Pl. Opp’n to Defs. Mot. for Summ. J. (Doc. 98) at 7.
Defendants dispute that they employ a categorical ban. Defs. Mem. in Supp. of Mot. for Summ. J. (Doc. 97-1) at 12. They respond that there are examples of tenants who have criminal convictions living at the property and that defendants’ employees state that they sometimes accepted applicants with non-serious misdemeanor convictions. Id. at 15-16, 19-22. Defendants justify what they say is their policy of conducting a case-by-case analysis of criminal records by invoking a duty to secure the rental premises and provide for the safety of their tenants. Id. at 31-32; Defs. Opp’n to Pl. Mot. for Summ. J. (Doc. 95) at 11, 29-30.
Defendants have retained 1,145 application files for individuals they accepted as tenants between 2006 and June 2015. Pl. Mem. in Supp. of Mot. for Summ. J. (Doc. 94-1) at 11. Defendants admit that Sandcastle does not systematically retain records related to applicants who have been denied. Defs. Resp. to Pl. R. 56.1 Statement (Doc. 95-1) ¶134. The experts for both plaintiff and defendants agree that no meaningful statistical analysis can be done with respect to the denied applications because not all denied applications were retained, and there is no way to determine whether those that were kept amount to a representative sample of denied applicants. Parnell Suppl. Report (Doc. 94-10 Ex. 24) at 4-5; Welsch Suppl. Report (Doc. 101-5 Ex. KK) at 2.
Plaintiff retained Dr. Christopher Wildeman to provide expert testimony about demographic analysis and incarceration risk rates. Based on reported periods of incarceration for participants in the National Longitudinal Survey of Youth 1979 (“NLSY79”), Dr. Wildeman calculated incarceration risk rates for non-Hispanic whites, African Americans, and Hispanics broken down by income bands. Wildeman Report (Doc. 94-12 Ex. 27) at 8-9 & tbl. A1. For
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example, Dr. Wildeman found that the incarceration risk rate within the $30,000 to $70,000 income band is 1.37% for non-Hispanic whites, 4.76% for African Americans, and 3.00% for Hispanics. Id. at tbl. A1. According to plaintiff, this income band aligns with the population eligible to rent under Sandcastle’s affordable rental programs. Pl. Mem. in Supp. of Mot. for Summ. J. (Doc. 94-1) at 19. Dr. Wildeman also explained why NLSY79 is an appropriate data set to use to measure incarceration risk rates and why incarceration risk rates are an appropriate proxy for likelihood of a conviction history. Wildeman Report (Doc. 94-12 Ex. 27) at 2, 5-6. In addition to the analysis of the NLSY79 data, Dr. Wildeman calculated incarceration risk rates for non-Hispanic whites, African Americans, and Hispanics from various sources that provide data about incarceration in New York State. Id. at 7-9, 11-12 & tbl. 2. Based on these two sets of incarceration risk rates, he determined that “the disproportionalities reported at the national level, at all income levels, can be expected to be significantly greater at the New York State and [New York] City level.” Wildeman Declaration (Doc. 94-7 Ex. 21) ¶14. Plaintiff’s statistical expert, Dr. Allan Parnell, determined that the disparities in incarceration risks rates for the income bands relevant to the Sandcastle, if applied to various housing markets relevant to the Sandcastle, result in statistically significant disparities in who is excluded by a ban of tenants with felony or nontraffic misdemeanor convictions. Parnell Report (Doc. 94-9 Ex. 23) at 10.
Defendants argue that these analyses are not relevant. Instead, they argue that the proper comparators are the tenants currently in the complex, which defendants say is close to 70% African American and Hispanic. Defs. Opp’n to Pl. Mot. for Summ. J. (Doc. 95) at 18, 20.
III. ARGUMENT Although the FHA does not forbid housing providers from considering applicants’ criminal records, it does require that providers do so in a way to avoid overbroad generalizations
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that disproportionately disqualify people based on a characteristic protected by the statute, such as race or national origin. To that end, the FHA bars criminal records bans that have a disparate impact on applicants based on race or national origin unless they are supported by a legally sufficient justification. Analysis of the lawfulness of such bans proceeds according to the threestep framework that HUD has established to evaluate discriminatory effects liability under the FHA. At the first step, a plaintiff must establish a prima facie case of discrimination by showing that a ban on tenants with criminal records causes a disparate impact based on race or national origin. Once a plaintiff challenging such a ban introduces reliable evidence proving a prima facie case, the burden shifts to the housing provider to prove with evidence – and not just by invoking generalized concerns about safety – that the ban is necessary to actually accomplish the provider’s substantial, legitimate, nondiscriminatory interest. Even if this showing is made, the ban will nevertheless be unlawful if a plaintiff proves a less discriminatory alternative, such as that an individualized review of applicants’ criminal records could serve the defendant’s needs.
A. Challenges to the Discriminatory Effects of Bans on Criminal Records Are Evaluated Based on the FHA’s Three-Step Framework
Disparate impact claims under the FHA are evaluated based on the burden-shifting framework set out at 24 C.F.R. § 100.500. MHANY Mgmt., Inc. v. Cty. of Nassau, 819 F.3d 581, 619 (2d Cir. 2016).7 At the first step of that regulation’s burden-shifting framework, the plaintiff bears the burden of establishing a prima face case by proving that the “challenged practice caused or predictably will cause a discriminatory effect” on a protected class. 24 C.F.R. § 100.500(c)(1). Making such a showing “is a fact-specific inquiry.” HUD, Implementation of
7 The HUD regulation is consistent with the Supreme Court’s decision in Texas Department of Housing & Community Affairs v. Inclusive Communities Project, Inc., 135 S. Ct. 2507 (2015), which confirmed the availability of disparate-impact liability under the FHA and discussed limiting principles for such claims. See MHANY Mgmt., 819 F.3d at 618 (“The Supreme Court implicitly adopted HUD’s approach . . . .”).
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the Fair Housing Act’s Discriminatory Effects Standard, 78 Fed. Reg. 11,460, 11,468 (Feb. 15, 2013). “No single test controls in measuring disparate impact, but the [plaintiff] must offer proof of disproportionate impact, measured in a plausible way.” Mt. Holly Gardens Citizen in Action, Inc. v. Twp. of Mt. Holly, 658 F.3d 375, 382 (3d Cir. 2011) (alteration and internal quotation marks omitted), cert. dismissed, 134 S. Ct. 636 (2013).8
If the plaintiff proves its prima facie case, the regulation specifies that the practice may still be lawful if there is a “legally sufficient justification” for it. 24 C.F.R. § 100.500. A legally sufficient justification can be established if, at step two, the defendant meets its “burden of proving that the challenged practice is necessary to achieve one or more [of its] substantial, legitimate, nondiscriminatory interests,” id. § 100.500(c)(2), and the plaintiff fails to prove, at step three, that the interests “could be served by another practice that has a less discriminatory effect,” id. § 100.500(c)(3).
With one exception, this framework applies to evaluating whether housing providers’ policies that consider criminal records in an application process produce unlawful discriminatory effects.9 The FHA does not impose disparate-impact liability for policies that deny housing because a person is “convicted . . . of the illegal manufacture or distribution of a controlled substance.” 42 U.S.C. § 3607(b)(4); see also Tex. Dep’t of Hous. & Cmty. Affairs v. Inclusive Cmtys. Project, Inc., 135 S. Ct. 2507, 2520-21 (2015) (holding that this provision is a defense to disparate-impact liability). All other criminal records bans must comply with the disparate
8 When consistent with the regulation, preexisting FHA case law and legal sources analyzing disparate impact claims brought under Title VII of the Civil Rights Act of 1964 (“Title VII”) remain relevant to evaluating FHA disparate impact claims. See MHANY Mgmt., 819 F.3d at 618-19; see also Inclusive Cmtys., 135 S. Ct. at 2522-23 (relying upon interpretations of Title VII to interpret the FHA). 9 Such bans may also be subject to intentional discrimination liability. See HUD Guidance at 810.
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impact standards of the FHA. The fact that Congress created an exemption to disparate-impact liability only for convictions for certain drug offenses supports the availability of disparate impact challenges to housing providers’ exclusions of tenants who were convicted of other types of offenses. As the Supreme Court has explained, “[w]here Congress explicitly enumerates certain exceptions to a general prohibition, additional exceptions are not to be implied, in the absence of evidence of a contrary legislative intent.” TRW Inc. v. Andrews, 534 U.S. 19, 28 (2001).
Consistent with the above discussion, HUD issued Guidance in April 2016 on the application of FHA standards to the use of criminal records by housing providers. See HUD Guidance, supra, p. 2. The Guidance specifies that the standard three-step framework applies to claims that a housing provider’s consideration of criminal records has a discriminatory effect violating the FHA. The Guidance also provides detail about how the analysis proceeds at each step.
B. Blanket Bans on Tenants with Criminal Records May Have a Disparate Impact Blanket bans on tenants with criminal records – i.e., categorical prohibitions that do not consider “when the conviction occurred, what the underlying conduct entailed, or what the convicted person has done since then,” HUD Guidance at 6 – run a substantial risk of having a disparate impact based on race or national origin. African-American and Hispanic individuals, and African-American and Hispanic men in particular, make up a disproportionate number of individuals with arrest and convictions records in the United States.10
10 See, e.g., Exec. Office of the President, Econ. Perspectives on Incarceration and the Criminal Justice System 28-32 & fig.25-28 (Apr. 2016), available at https://www.whitehouse.gov/sites/ default/files/page/files/20160423_cea_incarceration_criminal_justice.pdf. As one recent report on such disparities notes, “rigorous academic research . . . finds that racial disparities persist in
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When assessing the impact of a criminal records policy, the relevant question is the policy’s effect on individuals screened out by the policy versus individuals not affected by it. See Tsombanidis v. W. Haven Fire Dep’t, 352 F.3d 565, 575 (2d Cir. 2003), superseded on other grounds as recognized by MHANY Mgmt., 819 F.3d at 619. To establish a discriminatory effect at the first step of the disparate impact analysis, a comparison of the two groups must reveal that the tenant-screening policy “actually or predictably results in a disparate impact” on a protected group of individuals. 24 C.F.R. § 100.500(a); see also Tsombanidis, 352 F.3d at 575. Such comparisons will normally be based on statistical evidence. See Tsombanidis, 352 F.3d at 57576. A plaintiff can thus establish a prima facie case by introducing reliable statistical analyses proving that a ban on tenants with criminal records will predictably have a disproportionate adverse effect on members of a protected group compared to other individuals.
Many of the statistics available to prove racial and ethnic disparities in criminal records11 – especially statistics that account for additional demographic characteristics like income12 – are derived from nationwide survey data. It is not necessary for a plaintiff challenging a criminal records policy to obtain data on incarceration risk rates specific to the population that lives in a geographic housing market, so long as a plaintiff provides sufficient foundation to support the
police interactions, arrests, and sentencing, even after controlling for defendant and offense characteristics.” Id. at 29. 11 In this case, plaintiff’s expert, Dr. Wildeman, explained why incarceration data is a sound way to measure the risk of having been convicted of a felony or misdemeanor. Wildeman Report (Doc. 94-12 Ex. 27) at 5-6. In light of the fact-specific inquiry necessary to determine whether a plaintiff has satisfied the prima facie case, this Court need only find that plaintiff’s method was at least one valid option for proving racial disparities in criminal records. 12 Outside the context of challenges to criminal records policies, courts evaluating FHA disparate impact challenges related to affordable housing have sometimes sought disparity data specific to “the relevant income pool” of prospective tenants. See, e.g., Artisan/Am. Corp. v. City of Alvin, 588 F.3d 291, 298 (5th Cir. 2009).
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reliance on national data for the disparities present in the geography relevant to its case.13 See Dothard v. Rawlinson, 433 U.S. 321, 330 (1977) (approving, in a Title VII disparate impact case, “reliance on general population demographic data . . . where there was no reason to suppose” that the relevant demographic data for the geography at issue “differ markedly from those of the national population”); Brown v. Omaha Hous. Auth., No. 8:05-cv-423, 2007 WL 2123750, at *2 (D. Neb. July 20, 2007) (noting the possible permissible use of national statistics in an FHA disparate impact challenge to a policy denying government housing assistance vouchers to individuals with criminal backgrounds); HUD Guidance at 3-4.14
When complete data for the actual applicants processed according to the policy is not available, or when potential applicants may have been discouraged by the policy, measuring a screening policy’s impact may appropriately be based on all individuals in the housing market served by the complex at issue. See R.I. Comm’n for Human Rights v. Graul, 120 F. Supp. 3d 110, 125-26 (D.R.I. 2015) (using statewide census data to evaluate a disparate impact challenge to a landlord’s policy rejecting applicants seeking to house more than two persons per bedroom); Gashi v. Grubb & Ellis Prop. Mgmt. Servs., Inc., 801 F. Supp. 2d 12, 16-17 (D. Conn. 2011) (using citywide census data to evaluate a disparate impact challenge to a condominium association’s policy rejecting applicants seeking to house more than two persons per bedroom);
13 In this case, Dr. Wildeman explained why the incarceration risk rates that account for income, which he calculated based on the NLSY79’s national sample, is representative of disparities found in New York State and New York City. Wildeman Declaration (Doc. 94-7 Ex. 21) ¶14; Wildeman Report (Doc. 94-12 Ex. 27) at 2, 11. 14 In contrast, courts have not always accepted the use of national statistics by FHA plaintiffs who do not provide evidence affirmatively justifying the national statistics’ relevance to a more localized housing market. See, e.g., Mountain Side Mobile Estates P’ship v. Sec’y of HUD, 56 F.3d 1243, 1253 (10th Cir. 1995); see also id. at 1257-58 (Henry, J., dissenting) (noting the record lacked evidence “conclusively showing” that the local market differed from the national statistics).
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see also Easterling v. Connecticut, 783 F. Supp. 2d 323, 333-34 (D. Conn. 2011) (“The eligible labor pool may also be used in lieu of the actual applicant pool if lack of information as to an applicant pool would render it impossible to establish a prima facie disparate impact.”) (internal alterations and quotation marks omitted) (quoting Malave v. Potter, 320 F.3d 321, 327 (2d Cir. 2003)). Accordingly, when only incomplete records exist of actual applicants to a complex, or a complex advertised its use of a criminal background check thereby discouraging people with criminal records from applying (as plaintiff alleges here),15 it is appropriate to evaluate the disparities caused by the policy by reference to its impact on the relevant housing market served by the complex rather than by analyzing the actual applicant pool. See Dothard, 433 U.S. at 330 (“There is no requirement . . . that a statistical showing of disproportionate impact must always be based on analysis of the characteristics of actual applicants.”); EEOC v. Joint Apprenticeship Comm. of Joint Indus. Bd. of Elec. Indus., 186 F.3d 110, 119 (2d Cir. 1998).
Although the United States takes no position on whether there are sufficient undisputed facts necessary to prove plaintiff’s prima facie case at the summary judgment stage of this case, we note that defendants have put forward several specious arguments in challenging plaintiff’s satisfaction of the prima facie case. First, defendants wrongly rely on an analysis about the demographics of the tenants currently in the complex. See Defs. Opp’n to Pl. Mot. for Summ. J. (Doc. 95) at 18, 20. Contrary to defendants’ argument, the claim that the complex at issue currently has a predominately African-American and Hispanic population does not preclude plaintiff from establishing a prima facie case. It is blackletter law under both Title VII and the FHA that the absence of racial disparities in the final results of a multi-step process – at the
15 In this case, both plaintiff’s expert and defendants’ expert agree that the incomplete data on denied applicants precludes meaningful statistical analyses of the applicant pool. Parnell Suppl. Report (Doc. 94-10 Ex. 24) at 4-5; Welsch Suppl. Report (Doc. 101-5 Ex. KK) at 2.
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bottom line – does not excuse discrimination at a particular step of the process. See Connecticut v. Teal, 457 U.S. 440, 456 (1982); Betsey v. Turtle Creek Assocs., 736 F.2d 983, 987-88 (4th Cir. 1984). A criminal records policy that disproportionately disqualifies African Americans and Hispanics from the opportunity to advance in the residency screening process is discriminatory in the absence of a legally sufficient justification. See Teal, 457 U.S. at 451 (“The suggestion that disparate impact should be measured only at the bottom line ignores the fact that Title VII guarantees these individual respondents the opportunity to compete equally with white workers on the basis of job-related criteria.”). Based on just such reasoning, a federal district court recently rejected an attempt to defend against an FHA disparate impact challenge to a criminal records policy based on the fact that the tenants at the complexes at issue were predominately (and, in one case, exclusively) African-American. See Alexander v. Edgewood Mgmt. Corp., No. 1:15-cv-1140-RCL, 2016 WL 5957673, at *3 (D.D.C. July 25, 2016).
Second, defendants wrongly state that plaintiff needs to demonstrate that defendants applied their criminal records ban in every instance in order to prove a blanket ban. See, e.g., Defs. Opp’n to Pl. Mot. for Summ. J. (Doc. 95) at 8 (“The presence of tenants with felonies and misdemeanors proves that a blanket ban does not exist . . . .”) But even setting aside the evidence that defendants described their policy in categorical terms in advertisements and communications with applicants, evidence that a defendant did not always apply its policy of excluding tenants with certain criminal records does not refute the existence of the policy.16 Establishing the existence of a discriminatory policy does not require showing that none of the
16 The existence of a policy is also not refuted by it being informal or unwritten. See, e.g., Bischoff v. Brittain, No. 2:14-1970, 2014 WL 5106991, at *6 (E.D. Cal. Oct. 10, 2014) (unwritten policy); Fair Hous. Cong. v. Weber, 993 F. Supp. 1286, 1293 (C.D. Cal. 1997) (informal policy); Bryant Woods Inn, Inc. v. Howard Cty., 911 F. Supp. 918, 939 (D. Md. 1996) (custom as policy), aff’d, 124 F.3d 597 (4th Cir. 1997).
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individuals living at the property has a criminal record. See United States v. Garden Homes Mgmt., Corp., 156 F. Supp. 2d 413, 423 (D.N.J. 2001) (holding, for a claim brought under the Attorney General’s authority to take action against a “pattern or practice” of discrimination violating the FHA, that “a defendant might on occasion make exceptions to its discriminatory norm, but that such exceptions do not bar liability”). Even the most stringent ban may permit occasional exceptions. For example, in the Title VII context, the Eighth Circuit sustained a disparate impact challenge to a policy that disqualified for employment any individual with a criminal (non-traffic-related) conviction, even though the employer’s “stringent policy occasionally ha[d] been relaxed.” Green v. Mo. Pac. R.R. Co., 523 F.2d 1290, 1293 & n.6 (8th Cir. 1975); see also Richardson v. Hotel Corp. of Am., 332 F. Supp. 519, 520 (E.D. La. 1971) (noting that a categorical ban for people with criminal convictions excluded minor traffic violations and that the plaintiff was hired, even though he had been convicted of two crimes other than minor traffic violations, as a result of “a clerical error made in processing the . . . application[]”), aff’d, 468 F.2d 951 (5th Cir. 1972).
Third, contrary to defendants’ misguided assertions, plaintiff does not impermissibly seek to hold defendants liable for racial disparities in the criminal justice system. See Defs. Opp’n to Pl. Mot. for Summ. J. (Doc. 95) at 13-15. Instead, liability would be based on plaintiff proving that defendants themselves imposed a policy of considering criminal records in a nonindividualized manner and that the policy had an unjustified discriminatory impact on African Americans and Hispanics. It is common that the disparities underlying policies found to have a disparate impact are rooted in past discriminatory practices. See Inclusive Cmyts., 135 S. Ct. at 2515-16 (summarizing twentieth century practices that gave rise to segregated housing patterns and explaining that “[d]e jure residential segregation by race was declared unconstitutional
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almost a century ago, but its vestiges remain today, intertwined with the country’s economic and social life”) (citation omitted). For example, the Supreme Court first recognized disparateimpact liability in a case that held an employer responsible for the disparate impact of its policy requiring applicants to have a high school diploma. See Griggs v. Duke Power Co., 401 U.S. 424, 431-32 (1971). The Court explicitly recognized that the reason for such a policy having a discriminatory effect was the inferior segregated schooling historically provided by the State of North Carolina to African Americans, see id. at 430, but that did not immunize the employer from liability for its own decision to impose the diploma requirement.
C. Blanket Bans on Tenants with Criminal Records Cannot be Justified by Generalizations about Safety and Security
Once a plaintiff establishes that a challenged policy predictably will result in a disparate impact, a defendant must prove its policy “is necessary to achieve one or more of its substantial, legitimate, nondiscriminatory interests.” See 24 C.F.R. § 100.500(c)(2). The defendant’s claim of necessity “must be supported by evidence and may not be hypothetical or speculative.” Id. § 100.500(b)(2); see MHANY Mgmt., 819 F.3d at 617 (noting that the defendant must “prove that its actions furthered, in theory and in practice, a legitimate, bona fide governmental interest”) (emphasis added) (internal quotation marks and citations omitted). Courts of appeals addressing disparate impact challenges to the use of criminal background checks in the employment context have held that Title VII requires demonstrable proof to support a defendant’s justification. See El v. Se. Pa. Transp. Auth., 479 F.3d 232, 244 (3d Cir. 2007) (citing Dothard, 433 U.S. at 334); Green, 523 F.2d at 1296. In light of this legal authority, defendants are flatly wrong to claim that they face only a burden of production – not proof – at this step. See Defs. Opp’n to Pl. Mot. for Summ. J. (Doc. 95) at 30.
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While the FHA does not require individualized assessment of housing applicants’ criminal history in all circumstances, “[a] housing provider that imposes a blanket prohibition on any person with any conviction record – no matter when the conviction occurred, what the underlying conduct entailed, or what the convicted person has done since then – will be unable to meet [its] burden” of proving necessity. HUD Guidance at 6. Defendants thus correctly “concede that a blanket ban would not be narrowly tailored to balance the safety of the building and other tenants with the rights of a potential applicant.” Defs. Mem. in Supp. of Mot. for Summ. J. (Doc. 97-1) at 32. The Eighth Circuit’s decision in Green illustrates well why a defendant generally will be unable to prove the necessity of a blanket ban. Green considered a Title VII challenge to an employer’s policy of refusing to hire individuals with a criminal conviction other than a minor traffic offense. See 523 F.2d at 1292. After determining that the plaintiffs had established a prima facie statistical case of discrimination, see id. at 1293-95, Green held such a “sweeping disqualification . . . resting solely on past behavior” could not meet the requirements of the business necessity test without considering whether the “conduct . . . may be remote in time or . . . significantly bear[s] upon the particular job requirements,” id. at 1296, 1298.17 Green noted that, although the employer had proffered seven reasons for the policy, ranging from fear of theft to possible impeachment as a witness, “they in no way justify an absolute policy which sweeps so broadly.” Id. at 1298. Instead, the Eighth Circuit observed, “[w]e cannot conceive of any business necessity that would automatically place every individual convicted of any offense, except a minor traffic offense, in the permanent ranks of the
17 Title VII’s “business necessity defense” is analogous to the FHA’s “legally sufficient justification.” See 78 Fed. Reg. at 11,472 (noting 24 C.F.R. § 100.500(b)(1) is “consistent with Congress’s 1991 enactment of legislation codifying that, in the employment context, a practice that has a disparate impact must be consistent with ‘business necessity’”); see also Inclusive Cmtys., 135 S. Ct. at 2522 (observing that the legally sufficient justification “step of the [FHA] analysis is analogous to the business necessity standard under Title VII”).
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unemployed.” Id. (emphasis added); see also Field v. Orkin Extermination Co., No. 00-5913, 2002 WL 32345739, at *1 (E.D. Pa. Feb. 21, 2002) (“[A] blanket policy of denying employment to any person having a criminal conviction is a violation of Title VII.”).
Although maintaining safety and security at a property is an important duty for housing providers, simply invoking the need to ensure “safety” or “security” cannot justify a screening policy that categorically excludes any tenant who has a criminal conviction. A ban on tenants with convictions without consideration of factors like the conviction’s nature, severity, and recency is over-inclusive and lacks any principled way to assess who, if anyone, poses a risk to safety or security in the property. For example, the Eighth Circuit affirmed an injunction that required an employer to consider “the nature and gravity of the offense or offenses, the time that has passed since the conviction and/or completion of sentence, and the nature of the job for which the applicant has applied” if it wanted to consider an applicant’s criminal record. Green v. Mo. Pac. R.R. Co., 549 F.2d 1158, 1160 (8th Cir. 1977); see also Waldon v. Cincinnati Pub. Sch., 941 F. Supp. 2d 884, 889 (S.D. Ohio 2013) (finding that, while a policy barring employment for people with specified convictions is justified for “serious recent crimes” “due to the nature of its employees’ proximity to children[,]” an individualized approach is still necessary so as not to bar employment people who have offenses that are remote in time, insubstantial, or followed by “demonstrated decades of good performance”); HUD Guidance at 7.18
18 Studies have shown that rates of recidivism decline for older convictions. See, e.g., Megan C. Kurlychek et al., Scarlet Letters and Recidivism: Does an Old Criminal Record Predict Future Offending?, 5 Criminology & Pub. Pol’y 483 (2006) (noting rates of recidivism, even for violent crime, reduce for convictions older than seven years), cited in HUD Guidance at 7 & n.34; cf. El, 479 F.3d at 247 (“Had [plaintiff], for example, hired an expert who testified that there is time at which a former criminal is no longer any more likely to recidivate than the average person, then there would be a factual question for the jury to resolve.”).
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Even if a defendant adopts a more narrowly tailored policy that prohibits renting to tenants with only certain types of convictions, that housing provider must still prove that the more limited ban is necessary to serve its “substantial, legitimate, non-discriminatory interests.” 24 C.F.R. § 100.500(c)(2). Merely claiming that the policy is necessary to promote safety and security is not enough. The housing provider must produce evidence proving the necessity of the policy to achieve those interests and cannot simply rely on speculation or hypotheticals. See id. § 100.500(b)(2).
Assuming that the plaintiff here has established a prima facie case, defendants have not satisfied that burden. Here, without providing any evidence that would allow the Court to assess their justifications, defendants make the conclusory assertion that their criminal records policy is “necessary to protect the health, safety and welfare of residents who already reside in the Sandcastle.” Defs. Mem. in Supp. of Mot. for Summ. J. (Doc. 97-1) at 31 (capitalization altered). Defendants further claim, without more, that their policy “serves valid business and security functions of protecting tenants and the property from former convicted criminals.” Id. at 32 (quoting Defs. Answer); see also Defs. Opp’n to Pl.’s Mot. for Summ. J. (Doc. 95) at 11 (noting, in passing, “Sandcastle’s obligation to other building residents to maintain a safe building”); id. at 29-30 (quoting their Answer for additional, conclusory, unsupported statements related to safety). Such sweeping and unsupported assertions do not amount to proof that defendants’ exclusion of tenants with criminal convictions is necessary to further their interest in promoting safety and security. See MHANY Mgmt., 819 F.3d at 617. Defendants must prove their assertions with evidence.
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D. An Individualized Review of Tenants with Criminal Records May Provide a Less Discriminatory Alternative to Blanket Bans
If a defendant satisfies its burden of proving the necessity of its criminal records policy, the burden shifts back to the plaintiff to show that an alternative policy with a “less discriminatory effect” could serve the “substantial, legitimate, nondiscriminatory interests” that the defendant invoked in support of its challenged practice. 24 C.F.R. § 100.500(c)(3). As explained above, a housing provider cannot meet its burden of proving the necessity of imposing a blanket ban on renting to any tenant who has been convicted of any crime, regardless of its nature, the age of the conviction, or a person’s rehabilitation. But even if a defendant could meet its burden of proof to support a prohibition of tenants with some or all types of convictions, an individualized review of an applicant’s criminal record would likely provide a less discriminatory alternative method of satisfying the housing provider’s interests. See Green, 523 F.2d at 1298 (noting that the justifications proffered by the employer, which did not justify a categorical ban, “can serve as relevant considerations in making individual hiring decisions”).
An individualized assessment of applicants’ criminal convictions might include consideration of issues such as the circumstances, severity, and recency of any conviction, along with the individual’s age at the time of conviction, age now, frequency of criminal convictions, any evidence of rehabilitation, and evidence that the individual has maintained a good tenant history before and/or after the conviction.19 See HUD Guidance at 7. Such a review is likely to more “accurately distinguish between applicants [who] pose an unacceptable level of risk and those [who] do not.” El, 479 F.3d at 245.
19 An individualized review may also determine that the conviction record obtained by the housing provider is wrong. See SEARCH, Report of the National Task Force on the Commercial Sale of Criminal Justice Record Information (2005), available at http://www.search.org/files/pdf/ RNTFCSCJRI.pdf, cited in HUD Guidance at 6 n.29.
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IV. CONCLUSION

The Court should apply the three-step framework set forth in the HUD regulation, the

HUD Guidance, and this Statement of Interest to evaluate whether defendants’ criminal records

policy has unjustified discriminatory effects on African Americans and Hispanics in violation of

the FHA.

Respectfully submitted,

LORETTA E. LYNCH Attorney General

ROBERT L. CAPERS United States Attorney Eastern District of New York

/s/ Vanita Gupta VANITA GUPTA Principal Deputy Assistant Attorney General, Civil Rights Division

/s/ Michael J. Goldberger Michael J. Goldberger Chief of Civil Rights, Civil Division 271 Cadman Plaza East Brooklyn, New York 11201 Phone: (718) 254-6052 michael.goldberger@usdoj.gov

/s/ Sameena Shina Majeed SAMEENA SHINA MAJEED Chief Housing & Civil Enforcement Section
/s/ R. Tamar Hagler R. TAMAR HAGLER Deputy Chief Housing & Civil Enforcement Section

/s/ Daniel P. Mosteller DANIEL P. MOSTELLER Acting Special Litigation Counsel for Fair Lending Housing & Civil Enforcement Section

/s/ Abigail A. Nurse ABIGAIL A. NURSE New York Bar No. 5244512 Trial Attorney Civil Rights Division U.S. Department of Justice 950 Pennsylvania Avenue, NW Northwestern Building, 7th Floor Washington, D.C. 20530 Phone: (202) 353-9732 / Fax: (202) 514-1116 abigail.nurse@usdoj.gov

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 Case 1:14-cv-06410-VMS Document 141 Filed 07/03/19 Page 1 of 49 PageID #: 8771

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

------------------------------------------------------------ X

THE FORTUNE SOCIETY,

:

:

Plaintiff,

:

:

-against-

:

:

SANDCASTLE TOWERS HOUSING

:

DEVELOPMENT FUND CORP., SARASOTA :

GOLD LLC, WEISSMAN REALTY GROUP :

LLC, E & M ASSOCIATES LLC,

:

:

Defendants.

----------------------------------------------------------- X

Vera M. Scanlon, United States Magistrate Judge:

MEMORANDUM & ORDER 14 Civ. 6410 (VMS)

Plaintiff The Fortune Society (“Plaintiff” or “Fortune”) brings this action against

Sandcastle Towers Housing Development Fund Corp., Sarasota Gold, LLC, E & M Associates,

LLC and Weissman Realty Group, LLC (collectively, “Defendants”) for injunctive, monetary

and declarative relief. Am. Compl. ¶ 1, ECF No. 30. Plaintiff alleges that, in violation of the

Fair Housing Act, Defendants’ housing policy has the purpose or effect of discriminating against

African-American and Latino persons, including Fortune’s clients. Id. Before the Court is

Plaintiff’s partial motion for summary judgment,1 ECF No. 94, and Defendants’ motion for

summary judgment, ECF No. 97, both brought pursuant to Federal Rule of Civil Procedure

(“Rule”) 56. Defendants also move to dismiss for lack of standing pursuant to Rule 12. ECF

No. 115. Each side moves to exclude the other side’s expert testimony. ECF Nos. 94-1 at 32-33;

1 Plaintiff does not move for summary judgment with respect to Defendant Weissman Realty Group, LLC. Pl.’s Mot., ECF No. 94-1 at 7 n.1. This exclusion does not change the Court’s analysis. Plaintiff also does not move for summary judgment with respect to its disparate treatment claim.
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97-1 at 7-18; 98 at 35-38.2 For the reasons stated herein, the Court: (i) denies Plaintiff’s partial motion for summary judgment; (ii) denies in part and grants in part Defendants’ cross motion for summary judgment; (iii) denies Defendants’ motion to dismiss for lack of standing; (iv) denies Defendants’ motion to exclude the expert testimony of Dr. Allan McMillan Parnell; and (v) denies as moot Plaintiff’s motion to exclude the expert testimony of Donald Welsch, with leave to renew in a pretrial motion.
I. BACKGROUND a. Procedural History
Plaintiff commenced this action by filing a complaint alleging that Defendants have a housing policy of automatically excluding any person with a record of a criminal conviction from renting or living3 in an apartment at the Sand Castle apartment complex in Queens, New York (the “Sand Castle”), and that this policy has the purpose or effect of discriminating against African-American and Latino persons, including Fortune’s clients, in violation of the Fair Housing Act (“FHA”) and New York State and City law. Compl. ¶ 1, ECF No. 1. Plaintiff alleges that the policy resulted in the denial of housing at the Sand Castle for twenty of Fortune’s clients and cost Plaintiff $65,000 in additional rent, as well as an unspecified additional amount in brokers’ fees. ECF No. 116 at 7. The Parties consented to this Court’s jurisdiction in accordance with 28 U.S.C. § 636(c) and Rule 73. ECF No. 26. Plaintiff submitted an amended complaint, ECF No. 30, to add Defendant E & M Associates, LLC, and to add perfecting
2 For ease of reference, all citations use ECF pagination. 3 The evidence discussed herein focuses on the primary tenants and leaseholders (or any individual whose income is considered to meet the Sand Castle’s income requirements, Ex. 60, ECF No. 94-15 at 6), but not on family or friends who may also reside in an apartment. The only issue raised as to “living” in an apartment, as distinct from renting, is raised when a corporate entity rented or sought to rent an apartment on behalf of an individual.
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citations, ECF No. 27. Defendants filed an amended answer. ECF No. 37. The Parties subsequently cross-moved for summary judgment, ECF Nos. 94, 97, which was followed by supplemental motion practice relating to standing, ECF Nos. 115-17, 119, 122, 125, and submission of supplemental authority, ECF Nos. 126, 129.
b. Relevant Facts After reviewing both Plaintiff’s and Defendants’ Rule 56.1 statements and the responses thereto, together with the exhibits and submissions of both sides, the Court finds that the following relevant facts are undisputed, unless otherwise indicated.
i. The Sand Castle, Acquisition And Staffing The Sand Castle is a four-building apartment complex with 917 rental units located at 711 Seagirt Avenue in Far Rockaway, Queens. Pl.’s 56.1 Stmt. ¶ 11, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 11, ECF No. 131. In 2006, Defendant Sarasota Gold LLC (“Sarasota Gold”), a New York corporation, acquired the Sand Castle buildings and has since held all equitable interest in the property. Pl.’s 56.1 Stmt. ¶ 12, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 12, ECF No. 131. Sarasota Gold is owned by, among others, Aryeh Ginzberg and Irving Langer, with Mr. Ginzberg as both the corporation’s largest shareowner and its managing member. Pl.’s 56.1 Stmt. ¶ 13, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 13, ECF No. 131. Prior to its acquisition by Sarasota Gold, the Sand Castle predominantly provided senior housing. Defs.’ 56.1 Stmt. ¶ 12, ECF No. 97-2; Pl.’s Resp. to Defs.’ 56.1 Stmt. ¶ 12, ECF No. 98-2. Sarasota Gold, however, made renovations to the building, and, as apartments became available, began to accept residents who paid their rent in whole or in part with governmental rent subsidies, such as Hurricane Sandy victims with FEMA funding. Pl.’s 56.1 Stmt. ¶¶ 14-15, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶¶ 14-15, ECF No. 131.
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Shortly after acquiring the Sand Castle, Sarasota Gold entered an agreement with Defendant E & M Associates LLC (“E&M”) to serve as the Sand Castle’s management company, and E&M has since directed and controlled the complex’s staff. Pl.’s 56.1 Stmt. ¶¶ 23-24, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶¶ 23-24, ECF No. 131. E&M is owned by Mr. Langer, and Mr. Ginzberg is Senior Vice President (each is an owner of Sarasota Gold). Pl.’s 56.1 Stmt. ¶ 25, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 25, ECF No. 131. Since 2009, Defendant Weissman Realty Group, LLC (“Weissman”) provided brokerage services for the Sand Castle, and two of Weissman’s employees, Melissa Gursky and Heidi Hershkowitz, worked on-site (from 2009-2012 and 2013-present, respectively). Pl.’s 56.1 Stmt. ¶¶ 26-27, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶¶ 26-27, ECF No. 131. These on-site employees were under the direction and control of Sarasota Gold and E&M, and later Defendant Sandcastle Towers Housing Development Fund Corporation (“Sandcastle Towers”). Pl.’s 56.1 Stmt. ¶ 29, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 29, ECF No. 131.
The Parties agree that Sarasota Gold’s and E&M’s senior leadership have minimal-to-no involvement in the day-to-day operations of the Sand Castle. Pl.’s 56.1 Stmt. ¶ 30, ECF No. 942; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 30, ECF No. 131. Three members of E&M – Phil Goldstein, Meyer Brecher and Sruly Tress – helped manage the Sand Castle during the period relevant to this litigation. Pl.’s 56.1 Stmt. ¶¶ 36-37, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶¶ 3637, ECF No. 131. Mr. Tress has managed the Sand Castle since January 2014, is under the direction and control of E&M, and is on-site once per-week. Pl.’s 56.1 Stmt. ¶¶ 45-46, 48, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶¶ 45-46, 48, ECF No. 131.
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ii. The Regulatory Agreement In 2013, Sarasota Gold entered into an agreement with the New York City Housing Development Corporation to become a provider of affordable housing (the “Regulatory Agreement”). Pl.’s 56.1 Stmt. ¶ 16, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 16, ECF No. 131. The Regulatory Agreement requires that 90% of Sand Castle residents earn no more than 125% of the Area Median Income and that 10% of residents earn no more than 135% of the Area Median Income. Pl.’s 56.1 Stmt. ¶ 90, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 90, ECF No. 131. As applied by the Sand Castle staff, this typically means that applicants cannot earn more than $70,000 annually. Pl.’s 56.1 Stmt. ¶ 91, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 91, ECF No. 131. For the sole purpose of facilitating the Regulatory Agreement, the members of Sarasota Gold created Sandcastle Towers, with Mr. Ginzberg as president. Pl.’s 56.1 Stmt. ¶¶ 17-18, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶¶ 17-18, ECF No. 131.
iii. Racial Makeup Of The Sand Castle And Surrounding Areas The Parties dispute the current relevant racial makeup of the Sand Castle and its surrounding area.4 Defendants assert that based on the United States Census Bureau, 2010-2014 American Community Survey, the area around the Sand Castle is approximately “50% Black.” Defs.’ 56.1 Stmt. ¶ 13, ECF No. 97-2. Relying on a tenant roster on which Defendants’ employees Rose Campbell and Sonia Forrest assigned a race to each tenant based largely on their own personal assessment (the “Tenant Roster”), Defendants allege that 70% of the Sand Castle’s tenants are “Black” – significantly more than the 50% Defendants assign to the surrounding area.5 Defs.’ 56.1 Stmt. ¶ 14, ECF No. 97-2; Tenant Roster, Ex. E, ECF No. 97-8; Campbell
4 The Parties also disagree as to what is the relevant area to be considered for FHA purposes. 5 The Tenant Roster lacks the requisite degree of trustworthiness essential to be considered as evidence. See Romano v. Howarth, 998 F.2d 101, 108 (2d Cir. 1993) (excluding business
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Decl., Ex. Y, ECF No. 97-29; Forrest Decl., Ex. Z, ECF No. 97-30. Plaintiff controverts these
numbers by citing to the same Census Survey, which reports that the area surrounding the Sand
Castle is 44.3% Black or African-American, 28.3% Hispanic or Latino and 22.1% White, while
the Census Block made up entirely of the Sand Castle is 37.4% Black or African-American,
14.9% Hispanic or Latino and 42.6% White. Pl.’s Resp. to Defs.’ 56.1 Stmt. ¶ 13, ECF No. 98-
2; Ex. D, ECF No. 97-7 at 1-2; Ex. 8, ECF No. 94-5 at 340-42, 347. Neither side provided any
information about the current or historical rate of tenant turnover in the Sand Castle, the Census
Block or the Census Survey.
iv. The Sand Castle Rental Application Process
Since 2006, the year of acquisition, Sarasota Gold employees Ms. Silvera and Ms.
Campbell have been primarily responsible for reviewing Sand Castle rental applications. Pl.’s
records that lacked “the requisite degree of trustworthiness essential to the business record exception”). Defendants’ employees assigned a race to each tenant in part based on their best guesses regarding the race of each tenant. Campbell Decl., Ex. Y, ECF No. 97-29; Forrest Decl., Ex. Z, ECF No. 97-30. They do not report that they had any input from the individuals whose race they described in the annotated Tenant Roster. The Tenant Roster, as well as any portion of expert testimony based on the Tenant Roster, is inadmissible and will not be considered on these motions. See Romano, 998 F.2d at 108. On this point, Defendants’ opposition does not directly respond to Plaintiff’s claim that the key demographic is the potential pool of applicants, and not the actual accepted tenants. The bottomline number with respect to racial diversity is not a defense to allegations of disparate impact as to the applicant pool. See Connecticut v. Teal, 457 U.S. 440, 455 (1982) (“It is clear that Congress never intended to give an employer license to discriminate against some employees on the basis of race or sex merely because he favorably treats other members of the employees’ group.”); Dist. Council 37, Am. Fed’n of State, Cty. & Mun. Emp., AFL-CIO v. NYC Dep’t of Parks & Recreation, 113 F.3d 347, 352 (2d Cir. 1997) (holding that a “nondiscriminatory bottom line was no defense” to a Title VII disparate impact claim); Waisome v. Port Authority of NY & NJ, 948 F.2d 1370, 1378 (2d Cir. 1991) (“An employer may not rely on a bottom-line defense, by that we mean that though parts of the employer’s hiring or promotion procedures adversely affected members of a protected group, it may not successfully argue that a sufficient number of protected group members were nevertheless hired or promoted so as to refute proof of disparate impact.”); see also Quad Enters. Co. v. Town of Southold, 369 F. App’x 202, 205-06 (2d Cir. 2010) (stating that claims for disparate impact under the FHA are analyzed under a modified version of the Title VII burden shifting analysis).
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56.1 Stmt. ¶ 35, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 35, ECF No. 131. Ms. Silvera’s tenure ran from 2006 to early 2014, and in December 2013, Ms. Campbell succeeded her. Pl.’s 56.1 Stmt. ¶¶ 38, 56-57, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶¶ 38, 56-57, ECF No. 131. Both were under the direction and control of E&M. Pl.’s 56.1 Stmt. ¶¶ 38, 58, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶¶ 38, 58, ECF No. 131. Since January 2014, Ms. Campbell has reported to Mr. Tress. Pl.’s 56.1 Stmt. ¶ 45, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 45, ECF No. 131.
Prospective applicants learn about the Sand Castle through, inter alia, online advertisements, broker advertising, housing agencies or by calling or walking into the office onsite. Pl.’s 56.1 Stmt. ¶ 78, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 78, ECF No. 131. Applicants must submit to a review of their creditworthiness, criminal backgrounds and landlord-tenant litigation histories. Pl.’s 56.1 Stmt. ¶ 80, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 80, ECF No. 131. Since Sarasota Gold acquired the Sand Castle in 2006, Defendants have used Weimark Credit Information Services (“Weimark”) to conduct background checks on prospective tenants. Pl.’s 56.1 Stmt. ¶¶ 81-82, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶¶ 81-82, ECF No. 131. The Weimark background checks list a person’s criminal charges, including the nature, class, disposition and sentence. Pl.’s 56.1 Stmt. ¶ 86, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 86, ECF No.131. Neither Ms. Campbell nor Mr. Tress can determine from the Weimark reports when a crime or conviction occurred. Pl.’s 56.1 Stmt. ¶ 120, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 120, ECF No. 131.
Defendants do not maintain any written policies on the Sand Castle’s rental application process. Pl.’s 56.1 Stmt. ¶ 95, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 95, ECF No. 131. The usual application process is for Ms. Campbell to field in-person, telephone and email
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rental inquiries. Pl.’s 56.1 Stmt. ¶ 42, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 42, ECF No. 131. She has the authority to explain the Sand Castle’s applicant criteria to prospective applicants, and she does so on a regular basis. Pl.’s 56.1 Stmt. ¶ 44, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 44, ECF No. 131. When applications are submitted to Ms. Campbell, she determines whether the applicant satisfies the Sand Castle’s rental criteria, and she has the authority to reject an application without prior approval from anyone else at the Sand Castle. Pl.’s 56.1 Stmt. ¶ 41, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 41, ECF No. 131. Although the Parties disagree about the precise scope, both Plaintiff and Defendants agree that Mr. Tress plays a more limited, supervisory role in the tenant application review than does Ms. Campbell. Pl.’s 56.1 Stmt. ¶ 52, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 52, ECF No. 131; compare Ex. 39, ECF No. 94-13 at 176 (Defendants’ Supplemental Responses to Plaintiff’s First Set of Interrogatories, stating that Mr. Tress is involved in the decision-making process with respect to accepting or rejecting tenants “if there is concern or question about the applications which Rose Campbell doesn’t know how to address or determine”); Ex. 2, ECF No. 94-4 at 29293; Ex. 10, ECF No. 94-5 at 640-43; Ex. 14, ECF No. 94-5 at 1262-63, with Ex. 10, ECF No. 945 at 698-99 (Mr. Tress’s testimony stating that Ms. Campbell would at times contact him for approval if an applicant had a criminal history).
Ms. Campbell has full authority on her own to decide whether to forward an application to the New York City Housing Development Corporation (“HDC”) for approval. Pl.’s 56.1 Stmt. ¶ 92, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 92, ECF No. 131. Only those applications passing Ms. Campbell’s initial screening are sent to HDC; any application rejected by Ms. Campbell is not forwarded. Pl.’s 56.1 Stmt. ¶ 92, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 92, ECF No. 131. HDC and the Regulatory Agreement are exclusively concerned
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with applicants’ income, and income has been the only reason that HDC has rejected an applicant approved by the Sand Castle staff. Pl.’s 56.1 Stmt. ¶¶ 93-94, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶¶ 93-94, ECF No. 131. Other than the Regulatory Agreement’s income requirements, Defendants assert (and Plaintiff agrees, with the exception of the criminal history criteria) that they provide their employees discretion as to each of the Sand Castle’s eligibility requirements. Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 164, ECF No. 131.
v. The Alleged Sand Castle Policy Regarding Criminal Records Defendants do not maintain any written policies on the Sand Castle’s applicant criteria, including with respect to treatment of applicants with criminal backgrounds. Pl.’s 56.1 Stmt. ¶ 95, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 95, ECF No. 131. The Parties present contravening facts regarding the existence or nonexistence of Defendants’ alleged policy of excluding potential tenants with criminal convictions (other than traffic violations). See Pl.’s 56.1 Stmt. ¶¶ 96-114, 124-147, ECF No. 94-2; see also Pl.’s Resp. to Defs.’ 56.1 Stmt. ¶ 59, ECF No. 98-2 (noting that traffic-related convictions are not at issue).
1. Written Communications Stating “No Criminal Background”
Plaintiff submits several communications in support of its assertion that the alleged policy exists, relying heavily on correspondence surrounding a Craigslist advertisement. In January 2014, during the first month of his employment as the manager, Mr. Tress requested via email to a broker that a Craigslist advertisement be placed for the Sand Castle (the “Craigslist Email”). Pl.’s 56.1 Stmt. ¶ 96, ECF No. 94-2; Ex. 46, ECF No. 94-13 at 202-03.6 This email
6 Defendants object to the consideration of this document – an email dated January 30, 2014, from Mr. Tress to the broker, Annette Strasser, regarding the posting of a Craigslist advertisement – (and several other correspondence from Defendants’ employees or agents) they produced in discovery, arguing that the document is unauthenticated and hearsay. Defs.’ Resp.
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request stated that the advertisement should include the criteria for residency as, “[a]ccept
section 8 . . . good credit needed[;] no criminal history.” Id. Ms. Campbell reposted or renewed
the Craigslist advertisement for two to four months. Pl.’s 56.1 Stmt. ¶ 102, ECF No. 94-2;
Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 102, ECF No. 131. The Craigslist advertisement included Ms.
Campbell’s email address, and Ms. Campbell replied to email inquiries about rentals from at
least March 2014 to October 2014 (the “Craigslist Response Emails”). Pl.’s 56.1 Stmt. ¶¶ 104-
05, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶¶ 104-05, ECF No. 131. The summary
judgment record contains dozens of these Craigslist Response Emails reiterating the statement
“no criminal background” (or variations thereof, such as “no criminal”). Pl.’s 56.1 Stmt. ¶ 105,
ECF No. 94-2; Ex. 38, ECF No. 94-13 at 132-71.
Plaintiff also offers Sand Castle email exchanges with real estate agents and brokers
expressing a similar restriction. Ms. Campbell sent two emails to Program Rentals, a real estate
agency that refers many applicants to the Sand Castle, stating in one that an “applicant cannot
have [a] landlord/tenant record nor criminal background,” and in the other, “no criminal.” Pl.’s
56.1 Stmt. ¶¶ 110-12, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 112, ECF No. 131; Exs.
to Pl.’s 56.1 Stmt. ¶ 96, ECF No. 131; see, e.g., id. ¶¶ 97, 113. “The bar for authentication is not high” and, where as here, the documents are produced by the party challenging authentication, and there is no reason to question the authenticity of the document, the court may consider the document on summary judgment. See AT Engine Controls Ltd. v. Goodrich Pump & Engine Control Sys., Inc., 673 F. App’x 645, 649 n.7 (2d Cir. 2016); see also Fed. R. Evid. 901(a); United States v. Moayad, 545 F.3d 139, 162 (2d Cir. 2008) (“Rule 901 is satisfied if sufficient proof has been introduced so that a reasonable juror could find in favor of authenticity or identification.” (internal quotation marks & citation omitted)). To the extent that the document (and others like it) contains party admissions, it is not barred by the hearsay rules. See Innovative Biodefense, Inc. v. VSP Tech., Inc., 176 F. Supp. 3d 305, 323 n.10 (S.D.N.Y. 2016) (considering a party’s employees’ emails on summary judgment because they were likely to be admitted at trial as party admissions and “hearsay evidence is admissible at the summary judgment stage if the contents would otherwise be admissible at trial” (internal quotation marks & citation omitted)).
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48-49, ECF No. 94-13 at 209-12. There is also an email from Weissman broker Ms. Hershkowitz to Mr. Tress stating that she denied an applicant an interview because “he can absolutely not live in the sandcastle with a criminal history.” Pl.’s 56.1 Stmt. ¶ 113, ECF No. 94-2; Ex. 50, ECF No. 94-13 at 214.
2. Testimony Regarding The Written Communications The Parties present contravening facts regarding whether the written “no criminal background” statements contained in the above discussed communications reflect the actual policy of the Sand Castle. Pl.’s 56.1 Stmt. ¶¶ 105, 107, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶¶ 105, 107, ECF No. 131. Plaintiff directs the Court to Mr. Tress’s statements that the language in the Craigslist Email was “a standard form of renting an apartment,” and that he had been informed of the criteria therein through discussions of the review process with Ms. Silvera, Ms. Campbell and Ms. Hershkowitz. Ex. 10, ECF No. 94-5 at 725-31; Pl.’s 56.1 Stmt. ¶ 99, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 99, ECF No. 131. Mr. Tress submitted the criteria set forth in the Craigslist Email to Mr. Ginzberg, Mr. Brecher and Mr. Goldstein for review. Pl.’s 56.1 Stmt. ¶ 97, ECF No. 94-2; Ex. 47, ECF No. 94-13 at 205. Mr. Tress also stated in his deposition that he would approve Ms. Campbell’s Craigslist Response Emails if she submitted them to him today. Pl.’s 56.1 Stmt. ¶ 107, ECF No. 94-2; Ex. 10, ECF No. 94-5 at 711. Ms. Campbell testified at her deposition that the Craigslist Response Emails were her standard response for the Craigslist inquiries. Pl.’s 56.1 Stmt. ¶ 105, ECF No. 94-2; Ex. 2, ECF No. 94-4 at 319-20, 33840. Defendants present contravening facts supporting their position that the written statements do not reflect Defendants’ actual policy. Defendants direct the Court to Ms.
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Campbell’s deposition testimony wherein she states individuals can appeal rental application denials based on criminal history and that applications of potential tenants with certain criminal backgrounds are sent to Mr. Tress for review. Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 105, ECF No. 131; Ex. 2, ECF No. 94-4 at 319-24. She testified that the language in her Craigslist Response Emails was merely a way to avoid “get[ting] into the details as far as what kind of background is accepted or not.” Ex. 2, ECF No. 94-4 at 340.
Mr. Tress stated in his deposition that the language in the Craigslist Email and the Craigslist Response Emails are not reflective of Defendants’ policy. Rather the language simply provides “the most basic information you could write.” Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 107, ECF No. 131; Ex. 10, ECF No. 94-5 at 710-11. He testified that this language was intended only to inform potential applicants about the information Defendants would consider and alert them that “[t]heir criminal background shouldn’t be a bad criminal background.” Ex. 10, ECF No. 945 at 731. He further testified that a criminal record did not result in an applicant’s automatic rejection, and applications would be reviewed case-by-case, noting that a number of current tenants have criminal backgrounds. Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 107, ECF No. 131; Ex. 10, ECF No. 94-5 at 710-11.
3. Felony Convictions The Parties also present contravening facts regarding whether Defendants applied a more limited scope ban, rejecting applicants with felony convictions. (The alleged felony ban is a revision of Plaintiff’s original theory.) Plaintiff points to Ms. Campbell’s statement during her deposition that the landlord criteria denied applicants with felony convictions. Pl.’s 56.1 Stmt. ¶ 105, ECF No. 94-2; Ex. 2, ECF No. 94-4 at 319-20, 338-40. However, in at least one instance, Ms. Campbell stated that
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she would escalate an application with a robbery conviction (a felony) to Mr. Tress for review. See Ex. 2, ECF No. 94-4 at 262, 323, 328.7 Plaintiff also relies on Weissman broker Ms. Gursky’s deposition testimony that Mr. Brecher told her the Sand Castle “does not want people with criminal backgrounds.” Pl.’s 56.1 Stmt. ¶ 114, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 114, ECF No. 131. Based on her understanding of the Sand Castle policy, Ms. Gursky did not in the past, and would not today, knowingly refer a person with a felony conviction. Pl.’s 56.1 Stmt. ¶ 131, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 131, ECF No. 131. Defendants deny that this assertion accurately reflects Defendants’ policy, noting that there are Sand Castle tenants with felony convictions. Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 124-27, ECF No. 94-2; Ex. 2, ECF No. 94-4 at 260-63, 325-30;8 Defs.’ 56.1 Stmt. ¶ 32, ECF No. 97-2; Pl.’s Resp. to Defs.’ 56.1 Stmt. ¶ 32, ECF No. 98-2.
vi. The Sand Castle’s Rental Applicant Files Defendants did not regularly retain rejected rental applications, so comprehensive data on rejected applicants are not available. Pl.’s 56.1 Stmt. ¶ 134, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 134, ECF No. 131. Nonetheless, discovery revealed 1,277 applicant/tenant files, including 1,145 accepted applications, 116 rejected applications and 16 applications of unknown status. Pl.’s 56.1 Stmt. ¶ 135, ECF No. 94-2; ECF No. 94-6 at 24-76.9 Plaintiff’s expert opined
7 It is unclear whether Ms. Campbell believes robbery to be a misdemeanor or knows that it is a felony. See N.Y. Penal Law §§ 160.05-.15. 8 Although Defendants rely on Ms. Campbell’s testimony to rebut the assertion that Defendants’ policy prohibited individuals with felony convictions, the testimony referenced addresses misdemeanors. 9 Defendants object to the consideration of this data because it relies on a spreadsheet created by Plaintiff’s counsel based on files obtained from the Sand Castle. The spreadsheet is attached to a declaration detailing how the document was compiled and from where each piece of information originated. Under Rule 1006, a party may use a summary or chart “to prove the content of voluminous writings, recordings, or photographs that cannot be conveniently examined in court.” Fed. R. Civ. P. 1006. Given that Defendants were free to present their own analysis of the files
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that this incomplete data does not provide a reliable depiction of the rejected applicants as it is unclear how many applications are missing. Supplemental Parnell Report, Ex. 24, ECF No. 9410 at 7. The Court considers this data with respect to rejected applications, but recognizes the weight it may be given may be limited based on its seeming lack of completeness. It is also unclear on the present record how incomplete the accepted applicant files are as there are more accepted applications than apartments. Without historical data about turnover or stability, it is not evident how many accepted applications are missing from Defendants’ files.
Of the accepted application files that included a Weimark background check, two reflect a felonious criminal history and eight indicate misdemeanor criminal histories. Pl.’s 56.1 Stmt. ¶¶ 136, 143, ECF No. 94-2. Of the eight misdemeanors, five were traffic offenses. Id. ¶ 144. Of the three non-traffic offenses, one was part of an application file for someone who was potentially a tenant before initiation of this litigation in 2014. Id. Ten other applications reflect criminal arrest histories, but the history files are incomplete and fail to indicate, inter alia, whether a conviction was obtained, the charge class or the offense level. Id. ¶ 145.
vii. Fortune’s Attempts To Rent Apartments 1. Fortune’s Mission
Plaintiff Fortune Society is a New York not-for-profit organization that provides reentry and reintegration services to formerly incarcerated individuals in New York City. Pl.’s 56.1 Stmt. ¶ 1, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 1, ECF No. 131. One of Fortune’s services is to secure housing for its clients and their families. Pl.’s 56.1 Stmt. ¶ 5, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 5, ECF No. 131. In Fortune’s scattered-site programs, Fortune
and they did not identify any serious errors, there is no prejudice to Defendants in the Court considering the summary presentation of the evidence.
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often leases apartments and pays the rent on its clients’ behalf. Pl.’s 56.1 Stmt. ¶ 8, ECF No. 942; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 8, ECF No. 131. According to Fortune President and CEO JoAnne Page, of Fortune’s 350 active housing program participants, ninety percent are Black and/or Latino. Ex. 20, ECF No. 94-7 at 10.
In 2013, New York State awarded Fortune a grant providing funds to rent twenty-five residential units to be located in Queens. Pl.’s 56.1 Stmt. ¶ 278, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 278, ECF No. 131. In May 2013, Fortune contacted the Sand Castle and leased four units in its own name through a broker. Pl.’s 56.1 Stmt. ¶¶ 280-81, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶¶ 280-81, ECF No. 131. The Sand Castle did not know or ask for the identities of Fortune’s clients who moved into the complex, and it did not conduct criminal background checks on these individuals. Pl.’s 56.1 Stmt. ¶ 282, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 282, ECF No. 131.
One month after this initial placement, in or around June 2013, Fortune attempted to rent additional apartments from the Sand Castle for twenty of its clients under Fortune’s grant (the “Twenty Clients”). Pl.’s 56.1 Stmt. ¶¶ 290-300, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶¶ 290-300, ECF No. 131. In furtherance of this effort, Fortune employees engaged in three telephone conversations with Defendants’ employees.
2. Telephone Communications Between Fortune And Defendants
In or around June 2013, Fortune’s employee Camille Morrison contacted Ms. Gursky (Weissman), to inquire about rentals. Pl.’s 56.1 Stmt. ¶ 290, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 290, ECF No. 131; Ex. 19, ECF No. 94-7 at 3-4. Plaintiff submits Ms. Morrison’s declaration in which she states that, following a description of Fortune’s clientele, Ms. Gursky “emphatically” explained that the Sand Castle does not rent to ex-offenders. Pl.’s 56.1 Stmt.
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¶ 291, ECF No. 94-2; Ex. 19, ECF No. 94-7 at 3-4. According to a declaration by Fortune’s housing specialist, Kevin Carter, one month later, Mr. Carter again inquired about renting additional rooms. Pl.’s 56.1 Stmt. ¶ 292, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 292, ECF No. 131; Ex. 17, ECF No. 94-5 at 1706-07. Mr. Carter states in his declaration that he too gave a description of Fortune’s clientele, after which the individual with whom he spoke responded that the Sand Castle did not rent to “ex-offenders.” Pl.’s 56.1 Stmt. ¶ 293, ECF No. 94-2; Ex. 17, ECF No. 94-5 at 1706-07. He further states that he told the person with whom he spoke that excluding individuals with felony convictions appeared discriminatory, to which the person repeated that the Sand Castle did not accept individuals with felony convictions as residents. Pl.’s 56.1 Stmt. ¶ 294, ECF No. 94-2; Ex. 17, ECF No. 94-5 at 1707.
Defendants deny these facts, referring the Court to the transcript of a recording of a July 2014 telephone call among Ms. Page, Mr. Carter and Mr. Tress, in which Fortune’s employees ask about renting additional apartments (the “2014 Phone Call”). Pl.’s 56.1 Stmt. ¶¶ 295-300, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶¶ 290-300, ECF No. 131; Ex. W, ECF No. 9727. The transcript reflects that Ms. Page and Mr. Carter explained to Mr. Tress that all of Fortune’s clients were formerly incarcerated. Pl.’s 56.1 Stmt. ¶ 296, ECF No. 94-2; Ex. W, ECF No. 97-27 at 8. Mr. Tress responded, “that scares us a little,” but he went on to point out that none of Fortune’s current Sand Castle residents had caused any issues. Pl.’s 56.1 Stmt. ¶ 297, ECF No. 94-2; Ex. W, ECF 97-27 at 8-9. Mr. Tress stated, “we try” with applicants with “a criminal history,” but that it is “a red flag.” Pl.’s 56.1 Stmt. ¶ 297, ECF No. 94-2; Ex. W, ECF No. 97-27 at 11. Mr. Tress stated, “due to the fact you have 5 people in here obviously then (inaudible) maybe trusted you.” Ex. W, ECF No. 97-27 at 12. Towards the end of the
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conversation, Mr. Tress stated that he would need to speak with Mr. Goldstein, whom he
identified as “his boss.” Pl.’s 56.1 Stmt. ¶ 298, ECF No. 94-2; Ex. W, ECF No. 97-27 at 10.
Upon calling Mr. Carter back, Mr. Tress stated his boss was not interested in renting to
Fortune. Pl.’s 56.1 Stmt. ¶ 299, ECF No. 94-2; Ex. W, ECF No. 97-27 at 14. The transcript
reflects Mr. Tress’s statements as “you know were [sic] not (inaudible) any vacancies or
anything like that,” and “he’d rather leave some open and something like that.” Pl.’s 56.1 Stmt.
¶ 300, ECF No. 94-2; Ex. W, ECF No. 97-27 at 14. After Mr. Carter expressed some concern
about renewing the apartments Fortune already leased, Mr. Tress stated he did not believe
renewing would be a problem. Ex. W, ECF No. 97-27 at 15.
3. Fortune’s Expenditures
Following Fortune’s conversations with Defendants, Fortune asserts that its employees
expended substantial additional time and money to locate alternative housing for the Twenty Clients.10 Pl.’s 56.1 Stmt. ¶ 312, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 312, ECF No.
131. Fortune alleges that its housing specialist, Mr. Carter, spent nearly fifty hours per month for
10 Defendants deny that Fortune expended substantial additional time and money locating alternative housing, arguing that the affidavits supporting this assertion are hearsay and that Plaintiff failed to provide evidence of this expenditure. Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 312, ECF No. 131. As a preliminary matter, the affidavits are admissible evidence to the extent they provide the affiant’s personal knowledge and set out facts that would be admissible in evidence. Fed. R. Civ. P. 56(c)(4). The evidence submitted by Plaintiff on this issue is sufficient to survive summary judgment. It is for the fact-finder to determine what weight to give to the testimony of Fortune’s employees regarding the time they allegedly expended in connection with Defendants’ policy. See Helena Assocs., LLC v. EFCO Corp., No. 06 Civ. 0861 (PKL), 2008 WL 2117621, at *6 (S.D.N.Y. May 15, 2008) (finding that the trier of fact is to determine the weight of lay witness testimony, so long as the testimony is based on first-hand knowledge). Moreover, Plaintiff provides additional evidence with respect to some of its expenditures, including the brokers’ fees for subsequent housing placements of the Twenty Clients, Ex. 97, ECF No. 116-8, and documentation of salary and expenses for an employee hired by Fortune to find housing for the Twenty Clients. Ex. 98, ECF No. 116-9.
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more than one year to find housing for the Twenty Clients who Fortune would otherwise have placed at the Sand Castle. Pl.’s 56.1 Stmt. ¶ 312, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 312, ECF No. 131. Fortune’s CEO, Ms. Page, alleges that she personally spent multiple hours discussing the Sand Castle’s refusal to accept the Twenty Clients with her staff, Pl.’s 56.1 Stmt. ¶ 314, ECF No. 94-2, and Fortune hired an additional staff member for the specific purpose of finding housing for those clients, Id. ¶ 312. Upon finding housing for the Twenty Clients, Fortune asserts that it expended rent in excess of what would have been paid at the Sand Castle and incurred otherwise avoidable brokers’ fees. Id.
II. STANDING The threshold question in every federal case, which determines the power of the court to entertain the suit, is “whether the plaintiff has made out a ‘case or controversy’ between himself and the defendant within the meaning of Art[icle] III.” Warth v. Seldin, 422 U.S. 490, 498 (1975). “Standing to sue is a doctrine rooted in the traditional understanding of a case or controversy. The doctrine developed in our case law to ensure that federal courts do not exceed their authority as it has been traditionally understood.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016). “The Art[icle] III judicial power exists only to redress or otherwise to protect against injury to the complaining party, even though the court’s judgment may benefit others collaterally.” Warth, 422 U.S. at 499. Thus, a federal court’s jurisdiction can be invoked only when the plaintiff itself has suffered “some threatened or actual injury resulting from the putatively illegal action . . . .” Linda R.S. v. Richard D., 410 U.S. 614, 617 (1973). The Supreme Court has established that the “irreducible constitutional minimum” of standing consists of three elements. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). “The
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plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, 136 S. Ct. at 1547. The plaintiff, as the party invoking federal jurisdiction, bears the burden of establishing these elements and, on summary judgment, “must set forth by affidavit or other evidence specific facts which for purposes of the summary judgment motion will be taken as true.” Lujan, 504 U.S. at 561 (internal quotation marks & citation omitted).
Although the Supreme Court has also articulated “prudential” requirements for standing,11 “‘Congress intended standing under . . . [the Fair Housing Act, 42 U.S.C. § 3601 et seq.] to extend to the full limits of Art[icle] III’ and . . . courts accordingly lack the authority to create prudential barriers to standing in suits brought under that section.” Havens Realty Corp. v. Coleman, 455 U.S. 363, 372 (1982) (quoting Gladstone, Realtors v. Vill. of Bellwood, 441 U.S. 91, 103 n.9 (1979)); see Anderson Grp., LLC v. City of Saratoga Springs, 805 F.3d 34, 44 (2d Cir. 2015) (“Th[e] FHA definition of ‘aggrieved person’ extends as broadly as permitted by Article III of the Constitution. As such, there are no prudential barriers to plaintiff’s standing under the FHA.”). Thus, the only requirement for standing to sue under the FHA “is the Art[icle] III minima of injury in fact: that the plaintiff allege that as a result of the defendant’s actions he has suffered ‘a distinct and palpable injury.’” Havens, 455 U.S. at 372 (quoting Warth, 422 U.S. at 501).
11 Prudential requirements for standing include “the general prohibition on a litigant’s raising another person’s legal rights, the rule barring adjudication of generalized grievances more appropriately addressed in the representative branches, and the requirement that a plaintiff’s complaint fall within the zone of interests protected by the law invoked.” NYCLU v. NYC Transit Auth., 675 F. Supp. 2d 411, 424 (S.D.N.Y. 2009) (“NYCLU I”), aff’d, 652 F.3d 247 (2d Cir. 2011), opinion amended & superseded, 684 F.3d 286 (2d Cir. 2012) (internal quotation marks & citation omitted).
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a. Organizational Vs. Associational Standing
“[I]t is well established that the limitation on raising the rights of a third party does not
preclude an organization from establishing standing. Specifically, an organization may establish
standing in two ways” – by demonstrating a harm to the organization itself (“organizational
standing”) or to its members (“associational standing”). NYCLU I, 675 F. Supp. 2d at 425
(citing Irish Lesbian & Gay Org. v. Giuliani, 143 F.3d 638, 649 (2d Cir. 1998)).
Organizational and associational standing are separate bases on which an organization
may assert standing, each having distinct requirements. Although only organizational standing is
asserted in this case, the Parties’ briefing demonstrates some confusion over the distinct
requirements. Accordingly, the Court briefly addresses the differences between the two types of
standing.12
With respect to organizational standing – at issue here – “an association may have
standing in its own right to seek judicial relief from injury to itself and to vindicate whatever
12 Defendants argue that to assert standing in a disparate impact case, the plaintiff must itself be an organization whose mission it is to represent members of a protected class. Defendants have not cited any authority supporting this proposition, and there is authority to the contrary. For example, in National Community Reinvestment Coalition v. Accredited Home Lenders Holding Co., 573 F. Supp. 2d 70, 73, 75 (D.D.C. 2008), a national nonprofit organization whose mission was to “increase fair and equal access to credit, capital and banking services and products for all Americans, regardless of race,” and whose members included community development corporations, civil rights groups, community reinvestment advocates, local and state government agencies and churches, had standing to sue under the FHA for disparate impact. See, e.g., LuxuryBeachfrontGetaway.com, Inc. v. Town of Riverhead, New York, No. 17 Civ. 4783 (SJF) (SIL), 2018 WL 4635736, at *5 (June 25, 2018) (finding a short-term rental business had standing under the FHA where it alleged economic harm as a result of an ordinance that allegedly disparately impacted its ability to rent to families with children), R & R adopted in relevant part, 2018 WL 3617947 (E.D.N.Y. July 27, 2018). Further, Fortune is a not-for-profit whose mission is to help formerly incarcerated individuals reintegrate into society through, inter alia, housing placement services. Page Decl. ¶ 13, Ex. 20, ECF No. 94-7 at 10. Although Fortune’s mission is not specifically to help Black and/or Latino individuals find housing, because ninety percent of Fortune’s 350 clients are Black and/or Latino, the effect is substantially the same. Id.
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rights and immunities the association itself may enjoy.” Warth, 422 U.S. at 511. Under the “organizational” standing rubric, the organization “must meet the same standing test that applies to individuals by showing actual or threatened injury in fact that is fairly traceable to the alleged illegal action and likely to be redressed by a favorable court decision.” Irish Lesbian & Gay Org., 143 F.3d at 649 (alterations, citations, & internal quotation marks omitted). In an organizational standing case, the plaintiff need not identify the individuals allegedly injured by the defendant’s actions because the organization itself is seeking to vindicate whatever rights and immunities it may enjoy. See NYCLU v. NYC Transit Auth., 684 F.3d 286, 295 (2d Cir. 2012) (“NYCLU II”). “Accordingly, the question becomes whether Plaintiff, as an organization, has met its burden of demonstrating an ‘injury in fact–an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical.’” NYCLU I, 675 F. Supp. 2d at 425 (citing Lujan, 504 U.S. at 560).
“[A]n organization may also assert ‘associational’ standing, that is, standing to bring suit on behalf of its members.” NYCLU I, 675 F. Supp. 2d at 425 (citing Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 342-43 (1977)). To bring a claim by way of “associational” standing, a plaintiff must show that: “(a) [the organization’s] members would otherwise have standing to sue in their own right; (b) the interests [the organization] seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” Hunt, 432 U.S. at 343. It is in the context of associational standing, as opposed to organizational standing, that an “argument that the persons allegedly injured must be identified by name might have some validity . . . at the summary judgment stage.” Bldg. & Const. Trades Council of Buffalo, NY & Vicinity v. Downtown Dev., Inc., 448 F.3d 138, 144-45 (2d Cir. 2006).
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b. Analysis13 i. Plaintiff Has Alleged Injury Sufficient To Establish Standing To Bring Its FHA Claims
Plaintiff asserts that Defendants’ alleged policy of prohibiting tenants with certain criminal convictions has a disparate impact on racial minorities and caused Fortune, as an organization, concrete and particularized injury. Under the FHA, the “only injury which need be shown to confer standing . . . is deflection of the [organization’s] time and money from counseling to legal efforts directed against discrimination.” Ragin v. Harry Macklowe Real Estate Co., 6 F.3d 898, 905 (2d Cir. 1993) (holding that where “the Defendants’ advertising practices detracted the attention of [the housing organization’s] staff members from their regular tasks at the [organization],” the organization had standing to sue under the FHA because there need only be a “perceptible impairment” of an organization’s activities and resources for there to be an “injury in fact”); see Mhany Mgmt., Inc. v. Cty. of Nassau, 819 F.3d 581, 600 (2d Cir. 2016) (“Standing under the [FHA] is as broad as Article III permits.”); Nnebe v. Daus, 644 F.3d 147, 157 (2d Cir. 2011) (holding that even “if only a few suspended drivers are counseled by [the plaintiff organization] in a year, there is some perceptible opportunity cost expended by the [organization], because the expenditure of resources that could be spent on other activities ‘constitutes far more than simply a setback to [the organization’s] abstract social interests’” (quoting Havens, 455 U.S. at 379)). “Such concrete and demonstrable injury to the organization’s activities – with the consequent drain on the organization’s resources – constitutes
13 The Court’s analysis focuses on the federal law claims as the state and city laws are similar and at least as protective of prospective or potential applicants to the Sand Castle such that the disparate impact claims will proceed to trial for the reasons discussed below. Defendants’ motion for summary judgment on Plaintiff’s state and city disparate treatment claims is granted for the reasons discussed in Section VI below. See infra Section VI.
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far more than simply a setback to the organization’s abstract social interests.” Havens, 455 U.S. at 379; see also Nat’l Cmty. Reinvestment Coal., 573 F. Supp. 2d at 75 (“[P]laintiff’s statement [that] they have expended resources on counteracting defendants’ policies are [sic] sufficient to state an injury in fact caused by defendant’s conduct.”).
In Havens, the Supreme Court found organizational standing to sue under the FHA existed where an apartment owner’s racial steering practices impaired the organization’s ability to provide counseling and referral services for low-and-moderate-income home seekers, resulting in the organization suffering an injury in fact. 455 U.S. at 379. “Furthermore, the Supreme Court has stated that so long as the economic effect on an organization is real, the organization does not lose standing simply because the proximate cause of that economic injury is ‘the organization’s noneconomic interest in encouraging [a particular policy preference].’” Nnebe, 644 F.3d at 157 (alternations in original) (quoting Havens, 455 U.S. at 379 n.20). Thus, an alleged drain on or diversion of an organization’s resources alone may suffice to constitute an injury in fact.
Plaintiff alleges an economic loss and drain on its resources specifically resulting from its inability to place the Twenty Clients in the Sand Castle and creates an issue of material fact as to whether it suffered a loss attributable to Defendants’ conduct.14 Specifically, Plaintiff demonstrates that, in addition to its employee, Mr. Carter, expending substantial time trying to find alternative housing for the Twenty Clients, Plaintiff hired a new employee, Joseph
14 Of the Twenty Clients who Plaintiff claims were harmed by Defendants’ policy, five were identified by first name: Andrew, Sam, Wilfredo, Eric and Kevin. Carter Supp. Decl. ¶¶ 16-17, Ex. 92, ECF No. 116-3. After being rejected by the Sand Castle, Kevin moved twice for which Plaintiff incurred $400 in moving expenses. Id. ¶ 16. Andrew, Sam and Wilfredo moved into apartments that rented for $1,215 per month and Eric moved into an apartment that rented for $1,300 per month, all more than the rent Plaintiff was expected to pay to rent apartments for its clients at the Sand Castle. Id. ¶ 17.
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Blumberg, specifically to assist with placing the Twenty Clients. Page Supp. Decl. ¶ 7, Ex. 91,
ECF No. 116-2; Carter Decl. ¶¶ 7, 11-15, Ex. 92, ECF No. 116-3; Page Decl. ¶ 12, Ex. 20, ECF
No. 94-7 at 10; Ex. 98, ECF No. 116-9. Plaintiff also shows through affidavits and other
supporting documentation, that placing the Twenty Clients elsewhere required additional
expenditures for brokers’ fees and higher rents – costing Plaintiff an additional $65,000 in rent
alone. Page Supp. Decl. ¶ 8, Ex. 91, ECF No. 116-2; Carter Supp. Decl. ¶¶ 16-18, Ex. 92, ECF
No. 116-3; Ex. 97, ECF No. 116-8. This is the type of economic injury held to be sufficient by
the Supreme Court in Havens and by the Second Circuit in Ragin to demonstrate the injury
element of organizational standing. See Fair Hous. Justice Coop., Inc. v. Edgewater Park
Owners Co-op., No. 10 Civ. 912 (RPP), 2012 WL 762323, at *5 (S.D.N.Y. Mar. 9, 2012);
NYCLU I, 675 F. Supp. 2d at 425 (citing Lujan, 504 U.S. at 560) (“[T]he paradigmatic injury
pertains to a financial or property interest.”).15
15 Plaintiff has offered evidence through affidavits of a reallocation of its resources to educate about and combat the alleged discriminatory practices at the Sand Castle. Plaintiff has shown that it redirected staff efforts and resource to increase its advocacy efforts relating to criminal records discrimination in housing as a result of its experience with the Sand Castle. Plaintiff’s CEO and President stated that “[a]s a result of the discrimination [Fortune] encountered at Sand Castle, Fortune stepped up its advocacy efforts on criminal records discrimination in housing.” Page Supp. Decl. ¶ 16, Ex. 91, ECF No. 116-2. Ms. Page stated that she herself spent at least fifty hours “on anti-discrimination advocacy efforts, including participating in a criminal records working group with other non-profit leaders; educating other advocates through public-speaking engagements at conferences and convenings; and communicating with [her] staff about what to do when they encounter discrimination.” Id. ¶ 17. These allegations are sufficient to demonstrate injury-in-fact to the organization itself. See Centro De La Comunidad Hispana De Locust Valley v. Town of Oyster Bay, 868 F.3d 104, 110-11 (2d Cir. 2017) (“[Plaintiff organization] offered unrebutted testimony that it has already had to devote attention, time, and personnel to prepare its response to the [alleged discriminatory] Ordinance. And where an organization diverts it resources away from its current activities, it has suffered an injury that has been repeatedly held to be independently sufficient to confer organizational standing.”); Ragin, 6 F.3d at 905 (finding organization’s provision of information at community seminars about how to fight housing discrimination and devotion of time “to investigating and attempting to remedy the defendant’s [alleged discriminatory] advertisements” sufficient to establish standing); LC v. LeFrak Org., 987 F. Supp. 2d 391, 397 (S.D.N.Y. 2013) (finding organization’s assertion that it
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A plaintiff’s economic injury must also be “fairly traceable to the challenged conduct.”
Nat’l Cmty. Reinvestment Coal., 573 F. Supp. 2d at 75. In order to meet this requirement with
respect to injuries relating to placement of the Twenty Clients, Plaintiff must demonstrate that
the Twenty Clients were otherwise qualified applicants. If the Twenty Clients were not
otherwise qualified applicants, Defendants’ alleged policy could not have caused the alleged economic injury.16 Plaintiff has demonstrated that the Twenty Clients were otherwise qualified
by showing through affidavit testimony that they met the Sand Castle’s income requirements
under the Regulatory Agreement. Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 91, ECF No. 131; Carter
Decl. ¶ 9, Ex. 92, ECF No. 116-3. Accordingly, Plaintiff has met this burden and adequately
created an issue of material fact that it expended staff time and resources in finding alternative
housing for its otherwise qualified members who were deterred from submitting applications to
the Sand Castle housing complex because of Defendants’ alleged policy.
Defendants’ argument that Plaintiff has failed to demonstrate that any of its members
(including, as is relevant here, the Twenty Clients) met the Sand Castle’s other criteria relating to
credit score or landlord tenant litigation history is unavailing. Defendants’ have “den[ied] the
“expended staff time and other resources to investigate and respond to Defendants’ discriminatory rental practices, which diverted resources away from other [organization] activities” sufficient to plead injury-in-fact). Ms. Page also stated that she spent at least fifteen hours investigating Defendants’ alleged conduct prior to the litigation and assisting with the litigation after it commenced. Page Supp. Decl. ¶ 18, Ex. 91, ECF No. 116-2; see also Page Decl. ¶ 12, Ex. 20, ECF No. 94-7 at 10. 16 Plaintiff is not required for the purposes of standing to show that its members would have ultimately been selected as tenants. See Winfield v. City of New York, No. 15 Civ. 5236 (LTS) (DCF), 2016 WL 6208564, at *4 (S.D.N.Y. Oct. 24, 2016) (“Plaintiffs’ claimed injury relates to denial of the opportunity to compete on an equal footing for fair housing in their desired neighborhoods, rather than from the failure to achieve a successful result.”); Huntington Branch, N.A.A.C.P. v. Town of Huntington, 689 F.2d 391, 394 (2d Cir. 1982) (stating that because of the uncertainties inherent in the housing market, housing discrimination plaintiffs have been permitted to proceed based on “a realistic opportunity to proceed with construction”).
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Sand Castle ‘enforces’ strict ‘cut-off[s]’ for applicant criteria, as evidence demonstrates all tenant applications are considered on a case-by-case basis.” Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶¶ 148, 150, 161, 172, ECF No. 131; Defs.’ Jurisdictional Mot., ECF No. 115 at 17-18; see also Ex. 2, ECF No. 94-4 at 294-96 (criteria regarding landlord-tenant history flexible), 346 (criteria regarding credit score flexible). Rather, Defendants assert that the only criteria for which they do not exercise discretion is an applicant’s maximum income and Plaintiff has adequately shown that the Twenty Clients met the income requirements. Pl.’s 56.1 Stmt. ¶ 91, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 91 (income requirement under the Regulatory Agreement was approximately $70,000 per year or less), ECF No. 131; Carter Decl. ¶ 9, Ex. 92, ECF No. 116-3 (each of the Twenty Clients earned less than $40,000 per year); see also Ex. 2, ECF No. 94-4 at 256-57.
There are material issues of fact as to Defendants’ defense that, under the Regulatory Agreement, the Sand Castle could not accept tenants with an organization. First, there is a fact question as to whether the Regulatory Agreement prohibited contracting with organizations (provided the underlying tenant met the income requirements set forth under the Regulatory Agreement), as the Sand Castle was able to renew organizational contracts and, in fact, entered into a new organizational contract while a party to the Regulatory Agreement.17 Second, Plaintiff has offered evidence that, if believed, shows that had the Sand Castle declined to enter into a lease with Plaintiff due to its organizational status, Plaintiff could and would have had its clients sign leases in their own names, backed by Plaintiff’s financial support. Carter Decl. ¶ 10,
17 Defendants’ counsel Loretta Gastwirth submits a declaration asserting that this new organizational contract was entered into in error. Gastwirth Reply Decl. ¶ 7, ECF 117-1. Ms. Gastwirth’s statement is the only evidence offered that the contract was entered into mistakenly. Whether credible testimony can be offered on this issue is to be seen at trial and is a question for the fact-finder, not the Court on summary judgment.
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Ex. 92, ECF No. 116-3. Plaintiff has adequately created a material issue of fact as to whether an injury in fact was caused by Defendants’ alleged policy. Defendants’ motion to dismiss for lack of standing is denied.
III. LEGAL STANDARD FOR SUMMARY JUDGMENT Summary judgment is proper only when, construing the evidence in the light most favorable to the non-movant, “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); Kwong v. Bloomberg, 723 F.3d 160, 164-65 (2d Cir. 2013); Redd v. NY Div. of Parole, 678 F.3d 166, 174 (2d Cir. 2012). The role of the Court is not “to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Cioffi v. Averill Park Cent. Sch. Dist. Bd. of Educ., 444 F.3d 158, 162 (2d Cir. 2006) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)). The “mere existence of a scintilla of evidence” is not enough to defeat summary judgment; “there must be evidence on which the jury could reasonably find for the [non-moving party].” Jeffreys v. City of New York, 426 F.3d 549, 554 (2d Cir. 2005) (internal quotation marks omitted); see Anderson, 477 U.S. at 252. The Court’s function is to decide “whether, after resolving all ambiguities and drawing all inferences in favor of the non-moving party, a rational juror could find in favor of that party. . . .” Pinto v. Allstate Ins. Co., 221 F.3d 394, 398 (2d Cir. 2000). After examining the voluminous record, the Court finds that as to the merits, the Parties have raised genuine issues of material fact as to: (i) whether the Sand Castle had a ban on applicants with criminal histories, and, if so, what were the contours of that ban; and (ii) what weight should be given to Plaintiff’s expert testimony and whether that testimony proves that any criminal record ban, as applied at the Sand Castle, disparately impacts a protected class.
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IV. DAUBERT MOTIONS In connection with Defendants’ motion for summary judgment, Defendants moved to preclude the testimony and reports of Plaintiff’s expert, Dr. Allan McMillan Parnell, Ph.D. See ECF No. 97. In connection with Plaintiff’s motion for partial summary judgment, Plaintiff moved to preclude the testimony and reports of Defendants’ expert, Donald Welsch. See ECF No. 94. For the reasons stated herein, Defendants’ motion to preclude the testimony of Dr. Parnell is denied. Given the Court’s decision on the summary judgment motions, which would be the same with or without the testimony of Mr. Welsch, Plaintiff’s motion to preclude the testimony of Mr. Welsch is moot but may be renewed without prejudice in pre-trial motions.
a. Legal Standards A “party seeking to introduce expert testimony ‘bears the burden of establishing its admissibility by a preponderance of the evidence.’” Qube Films Ltd. v. Padell, No. 13 Civ. 8405 (AJN), 2016 WL 888791, at *1 (S.D.N.Y. Mar. 1, 2016) (quoting Baker v. Urban Outfitters, Inc., 254 F. Supp. 2d 346, 353 (S.D.N.Y. 2003)). Federal Rule of Evidence (“Evidence Rule”) 702 sets forth two prerequisites that must be satisfied before a witness is allowed to provide expert testimony. “First, the witness must be properly qualified as an expert to testify on scientific, technical, or specialized matters.” Ramos v. SimplexGrinnell LP, 796 F. Supp. 2d 346, 372 (E.D.N.Y. 2011) (citing Stagl v. Delta Air Lines, Inc., 117 F.3d 76, 81-82 (2d Cir. 1997)). “Second, the court must determine whether the expert testimony is both relevant and reliable.” Id. (citing Kumho Tire Co. v. Carmichael, 526 U.S. 137, 152 (1999)). In Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 597 (1993), the Supreme Court held that the Federal Rules of Evidence “assign to the trial judge the task of ensuring that an expert’s testimony both rests on a reliable foundation and is relevant to the task at hand.” The
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Supreme Court further explained, that the objective of the “gatekeeping” requirement of Daubert and Evidence Rule 702 is “to make certain that an expert, whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field.” Kumho Tire, 526 U.S. at 152. “[T]he trial judge’s gatekeeping obligation applies not only to testimony based on ‘scientific’ knowledge, as in Daubert, but also to testimony based on ‘technical’ or ‘other specialized’ knowledge.” Zaremba v. GMC, 360 F.3d 355, 358 (2d Cir. 2004) (quoting Kumho Tire, 526 U.S. at 141). The trial court ultimately has “broad discretion” in determining the admissibility of expert testimony. Brown v. Mermaid Plaza Assocs., LLC, No. 13 Civ. 760 (AMD) (CLP), 2016 WL 5802779, at *6 (July 20, 2016), R & R adopted, 2016 WL 5716414 (E.D.N.Y. Sept. 30, 2016).
In order to assess whether expert testimony is sufficiently reliable, the court engages in a flexible inquiry under which it may consider the following factors: (i) whether a theory or technique can be or has been tested; (ii) whether the theory or technique has been subjected to peer review; (iii) the known or potential rate of error and the existence of standards controlling the technique’s operation; and (iv) whether the theory or technique has gained general acceptance in the relevant scientific community. See Daubert, 509 U.S. at 593-94; see Zaremba, 360 F.3d at 358. “A district court should consider the Daubert factors ‘where they are reasonable measures of the reliability of expert testimony,’ [but] the list of factors ‘neither necessarily nor exclusively applies to all experts or in every case.’” Zaremba, 360 F.3d at 358 (quoting Kumho Tire, 526 U.S. at 141, 152); Qube Films, 2016 WL 888791, at *1 (explaining that the Daubert factors “do not constitute a definitive checklist or test” (citing Kumho Tire, 526 U.S. at 150)). Indeed, the trial court enjoys “the same kind of latitude in deciding how to test an expert’s
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reliability . . . as it enjoys when it decides whether or not that expert’s relevant testimony is reliable.” Kumho Tire, 526 U.S. at 152 (emphasis omitted).
b. Dr. Parnell In order to prove its claim that the Sand Castle employs a policy that disparately impacts racial minorities, Plaintiff seeks to offer the testimony of demographer Dr. Parnell. Dr. Parnell submitted an expert report summarizing his analysis and conclusions. See Parnell Report, Ex. 23, ECF No. 94-9. Dr. Parnell later submitted a supplemental report in which he examined “the tenant information provided by the Defendants and . . . one of Sandcastle Apartment’s real estate brokers” that was not available when Dr. Parnell prepared his initial report, and incorporated Defendants’ responses to Plaintiff’s first interrogatories into his analysis. See Supplemental Parnell Report, Ex. 24, ECF No. 94-10 (together with the Parnell Report, the “Parnell Reports”) at 3-4. In connection with Defendants’ motion for summary judgment, Defendants move to preclude the expert testimony of Dr. Parnell. See ECF No. 97.
i. Qualifications Attached to Dr. Parnell’s report is his curriculum vitae, which lists his qualifications to serve as an expert in this case. Parnell Report, Ex. 23, ECF No. 94-9 at 17-24. In addition, Dr. Parnell testified regarding his qualifications at his deposition. See, e.g., ECF No. 97-19 at 20-24, 95-96. Defendants do not challenge Dr. Parnell’s expertise in demography or housing discrimination generally. To the extent Defendants suggest that Dr. Parnell lacks qualifications to provide expert testimony with respect to the New York City metropolitan area housing market, ECF No. 97-1 at 14, the Court disagrees. A court may rely on expert testimony based on demographic data without reference to the expert’s personal knowledge of the geographic area to
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which the data relates. See, e.g., Mt. Holly Gardens Citizens in Action, Inc. v. Township of
Mount Holly, 658 F.3d 375, 382-83, 386-87 (3d Cir. 2011).
ii. Reliability/Relevance
The stated purpose of the Parnell Report is to “assess[] if a history of criminal conviction
disproportionately affects the ability of African-Americans and Latinos relative to Whites to
qualify to rent at Sandcastle Apartment.” Parnell Report, Ex. 23, ECF No. 94-9 at 4. To accomplish this task, Dr. Parnell evaluates whether the “exclusion18 of those who have been
incarcerated from the opportunity to rent at Sandcastle Apartments disproportionately affects
African Americans and Latinos relative to Whites in the New York City housing market.” Id. at
6. He relies in part on the Report prepared by Dr. Christopher Wildeman regarding risks of
conviction based on risks of incarceration for different races at different income levels. Id. Dr.
Parnell looks to three geographic areas in the Parnell Report – (i) Queens; (ii) New York City;
and (iii) New York, N.Y. HUD Metro Fair Market Rent Area (which includes Bronx County,
Kings County, Putnam County, Queens County, New York County, Richmond County,
Rockland County and Westchester County), the HUD-specified rental market for New York
18 Defendants argue that Dr. Parnell’s “role, expertise, and analysis” radically changed between the Parnell Reports and his declaration in support of those reports, including a change from referencing a “blanket ban” on criminal background to a “screening out” of applicants with criminal records. Defs.’ Mot., ECF No. 97-1 at 9, 14. First, the Parnell Reports do not use the term “blanket ban.” See generally, Parnell Report, Ex. 23, ECF No. 94-9; Supplemental Parnell Report, Ex. 24, ECF No. 94-10. Rather, Dr. Parnell describes his analysis as relating to the “exclusion” of individuals with criminal backgrounds. Parnell Report, Ex. 23, ECF No. 94-9 at 6. Dr. Parnell’s declaration describes the policy as “screening out” applicants with criminal records. Parnell Decl., ECF No. 94-13 at 217. Although the Court does not consider this change in language to require the rejection of Dr. Parnell’s testimony, Defendants may use it on crossexamination before a fact-finder. See R.F.M.A.S., Inc. v. So, 748 F. Supp. 2d 244, 252 (S.D.N.Y. 2010) (“Minor flaws in an expert’s analysis . . . can be probed through crossexamination and generally go to the weight to be accorded to the expert’s testimony rather than admissibility.”).
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City. Id. at 6. Dr. Parnell states in his supplemental report that he confirmed that these housing markets are the appropriate selection by looking at the zip codes for over 1,000 Sand Castle applicant files.19 Supplemental Parnell Report, Ex. 24, ECF No. 94-10 at 6, 8. Dr. Parnell also found that there were enough applicants from Nassau County to warrant consideration and added Nassau County to the New York, N.Y. HUD Metro Fair Market Rent Area as a fourth housing market for consideration. Id. at 9. He examines these areas with respect to four income levels: (i) incomes of $30,000 or more; (ii) incomes of $40,000 or more; (iii) incomes between $30,000 and $70,000; and (iv) incomes between $40,000 and $70,000. Parnell Report, Ex. 23, ECF No. 94-9 at 6. Relying on Dr. Wildeman’s findings, which provided proportions of cumulative risk of incarceration for Whites, African-Americans and Latinos, Dr. Parnell used a “Z test” to assess whether, within the above-referenced housing markets, the differences in incarceration rates among each racial group are statistically significant – in other words, whether the differences are meaningful and not due to random chance. Id. at 7-8. The Z test calculation is based on the proportions of the two populations’ lifetime risk of incarceration – based on Dr. Wildeman’s findings – and the size of the two populations in the relevant housing market – determined from the 2009-2013 American Community Survey measures of household income, which was designed and collected by the U.S. Census Bureau. Id. at 8. Defendants do not challenge the use of the Z test. Each of Dr. Parnell’s Z tests comparing Whites and African-Americans and Whites and Latinos in each selected housing market and each selected income range were statistically
19 Mr. Welsch opines that “the partial zip code data was statistically insufficient to support the conclusion that the available data was sufficient to determine the applicant pool of prospective Sandcastle tenants.” Welsch Decl. ¶ 14, Ex. T, ECF No. 97-23. Should the Court ultimately find the Welsch Declaration admissible, this would be a question for the fact-finder. The Court does not consider this assertion on the Parties’ motions for summary judgment, however, because it does not change the outcome of the motions.
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significant. Id. at 12-15; Supplemental Parnell Report, Ex. 24, ECF No. 94-10 at 10, 16. The Court finds Dr. Parnell’s analysis sufficiently relevant, reliable and reasoned to be
admissible as evidence of a possible disparate impact. Defendants’ primary challenges are that: (i) Dr. Parnell does not address data specific to the Sand Castle, and, in fact, stated that the Sand Castle’s demographics were not relevant for a disparate impact analysis, Defs.’ Mot., ECF No. 97-1 at 10, 12-13; (ii) Dr. Parnell used an improper applicant pool in his analysis – using market rent units without giving weight to income limitations posed by the Regulatory Agreement; including wealthy New York City neighborhoods in his applicant pool; and disregarding the fact that the Sand Castle participates in Section 8 and other government programs providing rent subsidies, id. at 14-15; and (iii) Dr. Parnell’s analysis is based on inadequate or unreliable data, id. at 8, 11, 15, 17. These are questions regarding the weight that should be afforded Dr. Parnell’s testimony, if any, rather than its admissibility. For the reasons set forth below, none of these arguments is sufficient to warrant preclusion of Dr. Parnell’s testimony.
First, with respect to Dr. Parnell’s decision to look at a pool of potential applicants, rather than data specific to the Sand Castle, the Court finds that this decision was reasoned and the results relevant to this litigation. The Second Circuit has recognized that statistics considering the potential applicant pool, rather than the actual applicant pool are often appropriate where “the actual applicant pool might not reflect the potential applicant pool, due to a self-recognized inability on the part of potential applicants to meet the very standards challenged as being discriminatory.” E.E.O.C. v. Joint Apprenticeship Comm. of the Joint Industry Bd. of the Electrical Indus., 164 F.3d 89, 97 (2d Cir. 1998). Where, as here, a defendant is alleged to have informed the potential applicant pool – here through advertising and external communications with brokers and potential tenants – of the policy, an expert may properly account for potential
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applicants that may have been discouraged from applying due to an awareness of the policy in question. Id.; see Int’l Bhd. of Teamsters v. United States, 431 U.S. 324, 365 (1977) (“If an employer should announce his policy of discrimination . . . his victims would not be limited to the few who ignored the sign and subjected themselves to personal rebuffs.”); Malave v. Potter, 320 F.3d 321, 327 n.4 (2d Cir. 2003) (finding that the application process might not adequately reflect the actual potential applicant pool); Anderson v. Douglas & Lomason Co., 26 F.3d 1277, 1305 (5th Cir. 1994) (“[P]ractices which deter qualified minorities from applying for jobs impermissibly taint[] any analysis which employs the use of actual applicant-flow data.”). Further, Dr. Parnell provides a plausible rationale for relying on the potential applicant pool rather than the actual applications, noting that the information available relating to actual applicants was inadequate to conduct a reliable statistical analysis because Defendants did not retain rejected rental applications. Supplemental Parnell Report, Ex. 24, ECF No. 94-10 at 7.
Second, Defendants’ argument that Dr. Parnell fails to give weight to income limitations of the Regulatory Agreement is incorrect. Dr. Parnell analyzed data sets for a variety of income ranges, including an income restriction of $70,000, which Defendants indicated was the approximate cap under the Regulatory Agreement. See Pl.’s 56.1 Stmt. ¶ 91, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 91, ECF No. 131.
Third, none of Dr. Parnell’s opinions proffered or methodology used falls “outside the range where experts might reasonably differ . . . .” Kumho Tire, 526 U.S. at 153. Defendants’ argument that Dr. Parnell relies on “cherry picked” data provided by Plaintiff’s counsel (specifically, that Plaintiff did not provide Dr. Parnell with information regarding tenants with criminal records) confuses Dr. Parnell’s role and suggests that he is opining on the existence of a criminal record ban. Although the language in the Parnell Reports could be clearer on this point,
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the tests Dr. Parnell conducted (which are unrelated to the determination of whether a ban exists)
make clear that his role is to assess the impact, not the existence, of such a ban if it exists.20 See
generally, Parnell Report, Ex. 23, ECF No. 94-9. Accordingly, whether he was aware of
information that suggests there is or is not a criminal record ban does not bear on the reliability
of his disparate impact analysis.21 Further, the Court will not preclude Dr. Parnell’s testimony
based on Defendants’ arguments that Dr. Parnell did not independently review the data
underlying the other expert report (by Dr. Wildeman) on which his reports relied, or because the
underlying report uses inferential data (including incarceration data rather than conviction data,
and certain national data rather than New York City specific data).22 Defs.’ Mot., ECF No. 97-1
at 8, 11, 15, 17. It is entirely appropriate for an expert to base his or her assumptions on facts
provided by other experts. See Verizon Directories Corp. v. Yellow Book USA, Inc., 331 F.
Supp. 2d 134, 136 (E.D.N.Y. 2004). Defendants’ concerns regarding the inferences drawn in
Plaintiff’s experts’ reports go to the weight of Dr. Parnell’s analysis, not its admissibility. See
20 Defendants also argue that Dr. Parnell’s testimony should be excluded because Dr. Parnell mistakenly believed there was a ban excluding tenants with criminal convictions – both felonies and misdemeanors. Defs.’ Mot., ECF No. 97-1 at 10-11. Experts may rely on factual assumptions as they prepare their reports. See Lee Valley Tools, Ltd. v. Indus. Blade Co., 288 F.R.D. 254, 267 (W.D.N.Y. 2013) (finding that an “expert opinion is not per se unreliable” even if it “relies upon some unverified or inaccurate information provided by the expert’s client”). One party’s belief that one of these assumptions is incorrect, when that assumption is a key undecided fact in the litigation, is not a basis to preclude expert testimony. At trial, Defendants may cross-examine Dr. Parnell in light of evidence that may undermine his assumption. 21 To the extent Dr. Parnell seeks to opine on the existence of a criminal record ban at the Sand Castle, that factual testimony would likely be precluded as unrelated to Dr. Parnell’s expertise. 22 Defendants do not expressly move to exclude Dr. Wildeman’s testimony, but, through their challenge of Dr. Parnell discussed above, Defendants raise certain concerns about the data on which Dr. Wildeman relies – namely, his use of incarceration data as a proxy for conviction and his use of national data. To the extent Defendants intended to move to exclude Dr. Wildeman’s testimony, such motion is denied for the same reasons Defendants’ challenges to Dr. Parnell’s testimony are rejected. Again, at trial, Defendants may cross-examine the experts as to those evidentiary assumptions.
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Anderson Grp., 805 F.3d at 50 (stating that contentions that an expert’s assumptions are unfounded go to weight, not admissibility); Danley v. Bayer (In re Mirena IUD Prods. Liab. Litig.), 169 F. Supp. 3d 396, 432 n.23 (S.D.N.Y. 2016) (“Extrapolation from studies to support an expert’s conclusions . . . may at times go to the weight and not the admissibility of expert testimony.”).
For the foregoing reasons, Defendants’ motion to exclude Dr. Parnell’s testimony is denied.
c. Mr. Welsch Defendants seek to offer the testimony of Donald Welsch, a labor economist with forty years’ experience in economic analysis and econometric and financial modeling. Welsch Report, Ex. 25, ECF No. 94-11 at 6. Mr. Welsch submitted two reports – the first (the “Welsch Report”) and the second (the “Supplemental Welsch Report,” collectively the “Welsch Reports”) – and a supporting declaration (the “Welsch Declaration”). Decision on the admissibility of the Welsch Reports and the Welsch Declaration is not necessary at this time as consideration of these reports would not change the outcome of the Parties’ respective summary judgment motions. The Court notes that Plaintiff has raised serious concerns about the utility of the Welsch Reports and their admissibility pursuant to Evidence Rule 702 and Daubert. See Brown, 2016 WL 5802779, at *5 (“The standards governing the admissibility of expert testimony are set forth in Rule 702 of the Federal Rules of Evidence, and are further clarified in Daubert v. Merrell Dow Pharmaceutical Inc. . . . .”). The Welsch Reports provide conclusions with limited-to-no analysis, and Mr. Welsch indicates that he did not look at the documents relied on by Plaintiff’s experts despite opining on the reliability of Plaintiff’s experts’ analyses. See Welsch Reports, Exs. 25 & 26, ECF No. 94-11. See Highland Capital Mgmt., L.P. v. Schneider, 379 F. Supp. 2d
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461, 473 n.2 (S.D.N.Y. 2005) (“[A]n expert basing his opinion solely on experience must do more than aver conclusorily that his experience led to his opinion . . . .”). The Welsch Declaration has greater indicia of reliability, but it is insufficient to sustain Defendants’ motion for summary judgment and relies in part on at least one significant piece of inadmissible evidence (the Tenant Roster, see supra note 5).
V. DISPARATE IMPACT ANALYSIS “A disparate impact analysis examines a facially-neutral policy or practice . . . for its differential impact or effect on a particular group.” Huntington Branch, NAACP v. Town of Huntington, 844 F.2d 926, 933 (2d Cir. 1988). Claims of disparate impact under the FHA are analyzed “under a modified version of the burden-shifting analysis usually applied to employment discrimination cases under Title VII of the Civil Rights Act of 1964.” Quad Enters., 369 F. App’x at 205-06; see McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). In order make out a prima facie case of disparate impact, Plaintiff must show: “(1) the occurrence of certain outwardly neutral practices, and (2) a significantly adverse or disproportionate impact on persons of a particular type produced by the defendant’s facially neutral acts or practices.” Rivera v. Inc. Vill. of Farmingdale, 784 F. Supp. 2d 133, 142 (E.D.N.Y. 2011) (citations omitted). Plaintiff “need not show [Defendants’] action was based on any discriminatory intent,” but Plaintiff must “prove that the [challenged] practice ‘actually or predictably results in . . . discrimination.’” Id. at 142 (quoting Hack v. President & Fellows of Yale Coll., 237 F.3d 81, 90 (2d Cir. 2000)). Plaintiff must also “show a causal connection between the facially neutral policy and the alleged discriminatory effect.” Id. (citations omitted). If Plaintiff successfully makes this showing, the burden shifts to Defendants to prove that the policy furthered a legitimate, bona fide and nondiscriminatory interest. Mhany Mgmt., 819 F.3d
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at 617. If Defendants meet their burden, the burden shifts back to Plaintiff to show that the legitimate, bona fide and nondiscriminatory interest “supporting the challenged practice could be served by another practice that has a less discriminatory effect.” Id. at 617-18.
a. There Is A Question Of Fact Whether Defendants Applied A Criminal Record Ban
The Court finds that, at the outset, there is a threshold issue of fact as to whether Defendants applied a blanket ban against individuals with criminal convictions.
Plaintiff presents sufficient evidence that Defendants exclude tenants with criminal records to defeat Defendants’ motion for summary judgment on this issue. Plaintiff provides testimony regarding and transcripts of conversations between Fortune’s employees and Defendants’ employees in which Defendants’ employees indicated that the Sand Castle would not rent to ex-offenders, and that a criminal record was a red flag. See, e.g., Ex. 17, ECF No. 945 at 1706-07; Ex. 19, ECF No. 94-7 at 3-4; Ex. 58, ECF No. 94-14 at 11, 13. Plaintiff also points to the Craigslist Email, the Craigslist Response Emails and other correspondence with brokers and real estate agents that state some variation of “no criminal record” as a tenant criterion. See, e.g., Ex. 38, ECF No. 94-13 at 133-71; Ex. 47, ECF No. 94-13 at 205; Ex. 48, ECF No. 94-13 at 209; Ex. 49, ECF No. 94-13 at 212; Ex. 50, ECF No. 94-13 at 214. The testimony of some of Defendants’ agents further supports the assertion that such criteria exists. See, e.g., Ex. 2, ECF No. 94-4 at 319-20; Ex. 6, ECF No. 94-4 at 936-38; Pl.’s 56.1 Stmt. ¶ 114, ECF No. 94-2; Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 114, ECF No. 131.
On the other hand, Defendants present sufficient evidence to avoid a finding as a matter of law that such a ban exists, or, if it does, to dispute the scope of that ban. First, there are
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multiple tenants with criminal backgrounds currently living in the Sand Castle.23 Defs.’ 56.1
Stmt. ¶ 32, ECF No. 97-2; Pl.’s Resp. to Defs.’ 56.1 Stmt. ¶ 32, ECF No. 98-2. Second, prior to
this litigation, Fortune placed at least four of its clients at the Sand Castle without issue and
without background checks. Pl.’s Opp’n 56.1 Stmt. ¶¶ 295-297, ECF No. 98-1. Although
Defendants admit that background checks are standard, this deviation from that practice and
admission of four tenants with criminal history undercuts Plaintiff’s argument that a ban exists.
Defendants’ employees also testified that Defendants do not bar individuals with criminal history
and instead conduct a case-by-case analysis.24 Ex. 2, ECF No. 94-4 at 260-63, 330; Ex. 10, ECF
No. 94-5 at 701.
23 Although Plaintiff discounts these individuals from its analysis by excluding individuals with traffic offenses from its argument and stating that certain of these individuals were admitted in error or admitted after this litigation began, even Plaintiff acknowledges that some number of individuals remain after its exclusions. Pl.’s Opp’n 56.1 Stmt. ¶¶ 113, 121-226, ECF No. 98-1. 24 Plaintiff offers stronger evidence of a felony ban than a ban encompassing felonies and misdemeanors, but the Court finds there still remains a question of fact on this narrower issue. Despite her testimony regarding the existence of a felony ban, Ms. Campbell also testified that she would escalate an applicant’s file if the applicant had a record of robbery (a felony) for her manager’s consideration. Ex. 2, ECF No. 94-4 at 262-63, 319-20, 323, 328. Her supervisor, Mr. Tress testified that a felony conviction did not result in an applicant’s automatic rejection and that the application would be reviewed case-by-case. Ex. 10, ECF No. 94-5 at 698; see also id. at 701. It is undisputed that there are Sand Castle tenants who have felony convictions. Defs.’ 56.1 Stmt. ¶ 32, ECF No. 97-2; Pl.’s Resp. to Defs.’ 56.1 Stmt. ¶ 32, ECF No. 98-2. Regardless, as discussed below in Section V(b), the Court does not find Plaintiff’s expert testimony conclusive enough to sustain a finding of a disparate impact on summary judgment – particularly with respect to a more limited felony-only ban on which Plaintiff’s experts do not specifically opine. See Wildeman Report, Ex. 27, ECF No. 94-12 at 4 (noting that disparities in conviction and incarceration are substantial across a range of offense types and “it is incredibly unlikely that removing only a handful of specific offense types from the analysis, which is not possible with the data at hand for a number of reasons, would change the conclusion of [the] report in any substantial way”); Parnell Report, Ex. 23, ECF No. 94-9 at 7 (relying on Dr. Wildeman’s cumulative proportions). Accordingly, the Court need not parse whether there is a more limited scope ban as that determination would not alter its conclusions with respect to summary judgment and the scope of any ban is a determination better left to the fact-finders.
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With respect to the written statements and advertisements stating “no criminal background,” Ms. Campbell stated during her deposition that this language was merely a “broad prospective [sic]” and a way to avoid “get[ting] into the details as far as what kind of background is accepted or not.” Ex. 2, ECF No. 94-4 at 340. Mr. Tress stated during his deposition that the language in the advertisement was a way of letting potential applicants know what information Defendants would be looking at and that “[t]heir criminal background shouldn’t be a bad criminal background.” Ex. 10, ECF No. 94-5 at 731. Mr. Tress also stated in his deposition that this language was not an accurate reflection of the Sand Castle’s requirements, noting that not all tenants met the credit score, landlord tenant or criminal background criteria set forth in the communications. Ex. 10, ECF No. 94-5 at 710-11. Notably, these same written communications also state that an applicant must have a credit score of 600+ and no landlord tenant court record, Ex. 38, ECF No. 94-13 at 133-71, but both sides agree that these “criteria” were flexible and not strictly enforced. Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶ 172, ECF No. 131; Pl.’s 56.1 Stmt. ¶¶ 15978, ECF No. 94-2.
For the foregoing reasons, a question of fact remains as to whether Defendants implemented a criminal record ban and, if so, the scope of such ban. Accordingly, summary judgment for Plaintiff is denied as Plaintiff cannot meet its burden without this initial showing that a ban exists.
b. There Is Conflicting Expert Testimony Regarding The Impact Of Any Blanket Ban
In addition to the material question of fact regarding whether Defendants implemented a criminal record ban and, if so, the scope of that ban, there also remains a question of material fact regarding the impact of any such ban. “The basis for a successful disparate impact claim involves a comparison between two groups–those affected and those unaffected by the facially
40

Case 1:14-cv-06410-VMS Document 141 Filed 07/03/19 Page 41 of 49 PageID #: 8811
neutral policy.” Rivera, 784 F. Supp. 2d at 142-43 (citations omitted). “This comparison must
reveal that although neutral, the policy in question imposes a ‘significantly adverse or
disproportionate impact’ on a protected group of individuals.” Id. (citations omitted). “Often[],
disproportionate impact is demonstrated through the use of statistics.” Valdez v. Town of
Brookhaven, No. 05 Civ. 4323 (JS), 2005 WL 3454708, at *13 (E.D.N.Y. Dec. 15, 2005). Plaintiff relies on the expert testimony of Dr. Parnell and Dr. Wildeman25 to provide a
statistical analysis establishing the alleged disparate impact of the alleged criminal record ban.26
Dr. Wildeman estimates “the degree of racial disparity in the lifetime risk of being convicted of a
crime.” Wildeman Report, Ex. 27, ECF No. 94-12 at 3. In doing so, Dr. Wildeman relies on
certain inferences, including relying on incarceration data as a proxy for conviction data and
using national and state data rather than New York City-specific data. Id. at 3, 13-14. Dr.
Parnell relies on Dr. Wildeman’s findings based on national data to, as described in more detail
in Section IV(b) above, assess the statistical significance of any impact a policy excluding
individuals with criminal backgrounds from the Sand Castle would have on individuals of
different races in specified housing markets. See supra Section IV(b). Dr. Parnell looks to the
25 Defendants object to Plaintiff’s experts’ reports as hearsay because they are purportedly unsworn. Defs.’ Resp. to Pl.’s 56.1 Stmt. ¶¶ 179, 192, 219, 260, ECF No. 131. This objection lacks merit as each of Plaintiff’s experts provided a sworn declaration in support of their reports (with the exception of Dr. Kazemian, whose report was sworn). Ex. 21, ECF No. 94-7; Ex. 51, ECF No. 94-13; Ex. 22, ECF No. 94-8 at 8. 26 The Supreme Court recently made clear that disparate impact in the context of the FHA is not to be interpreted too broadly, stating that the “FHA is not an instrument to force housing authorities to reorder their priorities,” and a “robust causality requirement is important.” Tex. Dep’t of Hous. & Cmty. Affairs v. Inclusive Communities Project, Inc. (“ICP”), 135 S. Ct. 2507, 2512, 2522 (2015). This area of law is evolving as the circuit courts interpret this new language, with circuit courts conflicting in their understanding and the future of disparate impact law under the FHA uncertain. Compare Inclusive Communities Project, Inc. v. Lincoln Prop. Co., 920 F.3d 890 (5th Cir. 2019), with Reyes v. Waples Mobile Home Park Ltd., 903 F.3d 415 (4th Cir. 2018).
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potential applicant pool for the Sand Castle by considering a variety of surrounding housing markets and analyzing several potential income ranges. Parnell Report, Ex. 23, ECF No. 94-9; Supplemental Parnell Report, Ex. 24, ECF No. 94-10. He concludes that for each income range and each housing market considered, the higher proportions of African-American and Latino individuals compared to White individuals that would be adversely affected by a criminal record ban is statistically significant. Parnell Report, Ex. 23, ECF No. 94-9 at 12; Supplemental Parnell Report, Ex. 24, ECF No. 94-10 at 10. In other words, Dr. Parnell opines that the disparity between those who would be impacted by such a ban who are African-American or Latino compared to those who are White is not due to random chance. Dr. Parnell does not analyze data specific to the Sand Castle.
Although a reasonable fact-finder could credit Plaintiff’s experts’ testimony and other evidence to find Plaintiff proved a ban creates a disparate impact, Defendants raise sufficient challenges regarding the underlying methodology and conclusions to make summary judgment inappropriate on this issue. See Brown v. Cty. of Nassau, 736 F. Supp. 2d 602, 620 (E.D.N.Y. 2010) (finding that where defendant challenged the methodology and conclusions of plaintiff’s unopposed expert, defendant was entitled to have the fact-finder evaluate the testimony and credibility of the plaintiff’s expert); see also Penree v. City of Utica, No. 13 Civ. 1323 (MAD), 2016 WL 915252, at *23 (N.D.N.Y. Mar. 4, 2016) (finding that a “jury is free to refuse to credit an expert’s opinion even when there is no expert rebuttal”). Although the decisions of Plaintiff’s experts to rely on a broader potential applicant pool outside of the actual pool of Sand Castle applicants is reasoned, adequately based in law and sufficient for the Court to find the testimony admissible, the more tangential nature of the analysis may diminish the weight a fact-finder would afford the conclusions. See Deutsch v. Novartis Pharms. Corp., 768 F. Supp. 2d 420, 433-
42

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34 (E.D.N.Y. 2011) (“[I]t is not the role of the district court to make ultimate conclusions as to the persuasiveness of the proffered evidence.”); see also In re Mirena, 169 F. Supp. 3d at 432 n.23. In the same vein, the experts’ decisions to rely on incarceration data as a proxy for conviction, and the application of national statistics to the New York housing market, are appropriate decisions within the scope of an expert’s discretion, but they could decrease the weight a fact-finder would afford the experts’ conclusions as applied to the Sand Castle. “[W]hile the threshold issue of whether a particular witness qualifies as an expert is one for the judge to determine, it is for the jury to decide what weight should be given to the testimony.” Hilaire v. DeWalt Indus. Tool Co., 54 F. Supp. 3d 223, 235 (E.D.N.Y. 2014); see Brown, 736 F. Supp. at 620 (“Courts have recognized that the grant of a motion for summary judgment is often inappropriate where the evidence bearing on crucial issues of fact is in the form of expert opinion testimony.” (internal quotation marks omitted)). Thus, even assuming the Sand Castle implements some type of criminal record ban – a question of fact that remains open – Plaintiff has not demonstrated as a matter of law that such a ban has a disparate impact on AfricanAmerican and Latino persons, and Plaintiff’s motion for partial summary judgment on this issue is denied.
c. The Record Is Underdeveloped Regarding Remaining Issues For the reasons discussed above, the Court finds a question of fact remains as to the first prong of the burden-shifting framework – whether the Sand Castle has the policy in question and, if so, whether that policy has a disparate impact on African-American and Latino persons. In light of that determination, the Court cannot grant summary judgment on the disparate impact claim in Plaintiff’s favor. Although this finding does not prohibit the Court from finding summary judgment in Defendants’ favor on this claim should the Court find for
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Defendants on the second prong of the burden-shifting test, such a finding would be inappropriate at this stage because the record with respect to the second prong is underdeveloped.
In order to find summary judgment for Defendants on Plaintiff’s disparate impact claim, the Court would have to assume there was a ban, but find that Defendants had carried their burden on the second prong, showing a legitimate business reason for the ban. Defendants have not argued that they have a legitimate business reason for a criminal record ban and, in fact, they “concede that a blanket ban would not be narrowly tailored to balance the safety of the building and other tenants with the rights of a potential applicant.” Defs.’ Mot., ECF No. 97-1 at 38; see id. at 25; HUD Guidance, ECF No. 97-35 at 6 (“A housing provider that imposes a blanket prohibition on any person with any conviction record – no matter when the conviction occurred, what the underlying conduct entailed, or what the convicted person has done since then – will be unable to meet this burden [of showing the policy or practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest].”). Defendants instead argue that they have a legitimate business reason for using the case-by-case review of applicants with criminal convictions they claim to use. Defs.’ Mot., ECF No. 97-1 at 38. Because the Court has not determined as a matter of law that the type of review on which Defendants’ argument is based is applied, it cannot grant Defendants’ motion for summary judgment with respect to Plaintiff’s disparate impact claim. There must first be a factual determination of whether a ban exists and the scope of any such ban.
The Court notes that the record is similarly underdeveloped with respect to the third prong of the burden-shifting framework. The Supreme Court stated that “disparate-impact liability must be limited so employers and other regulated entities are able to make the practical
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business choices and profit-related decisions that sustain a vibrant and dynamic free-enterprise system. And before rejecting a business justification . . . a court must determine that a plaintiff has shown that there is an available alternative practice that has a less disparate impact and serves the entity’s legitimate needs.” ICP, 135 S. Ct. at 2518 (alterations omitted). Although Plaintiff argues that the Sand Castle could do a case-by-case assessment of each applicant’s criminal history, it has not addressed the practicalities of its proposal in the context of the real estate industry. Plaintiff itself notes that Mr. Tress did not know the difference between a misdemeanor and a felony conviction, and neither Mr. Tress nor Ms. Campbell know how to determine the age of an applicant’s conviction or sentence. Pl.’s 56.1 Stmt. ¶¶ 120, 130, ECF No. 94-2. Yet it expects these same employees to make informed and thoughtful case-by-case assessments of an individual’s likelihood of recidivism and danger to the community. Plaintiff does not explain where Defendants should obtain adequate information to conduct this in-depth analysis or how Defendants should train their employees (or the costs and resources necessary for such trainings), such that their employees could make considered and appropriate, rather than arbitrary, determinations based on an applicant’s criminal background.
For all of the reasons set forth above, summary judgment is denied for both Plaintiff and Defendants as to the disparate impact claim.
VI. DISPARATE TREATMENT DISCUSSION “A plaintiff can establish a prima facie case of disparate treatment by showing that animus against the protected group was a significant factor in the position taken by the . . . decision-makers themselves or by those to whom the decision-makers were knowingly responsive.” Mhany Mgmt., 819 F.3d at 606 (internal quotation marks omitted). “[A] district court facing a question of discriminatory intent must make ‘a sensitive inquiry into such
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circumstantial and direct evidence of intent as may be available. The impact of the official action whether it bears more heavily on one race than another may provide an important starting point.’” Id. (quoting Arlington Heights, 429 U.S. 252, 267 (1977)). “[U]nless a clear pattern, unexplainable on grounds other than race, emerges, impact alone is not determinative and the Court must look to other evidence.” Id. (internal quotation marks & citation omitted). This other evidence includes whether the historical background of the policy reveals a series of actions taken for invidious purposes, departures from normal procedure and contemporary statements or information (the “Arlington factors”). Id. Here, Plaintiff has not offered evidence to suggest discriminatory intent.
Plaintiff’s assertion that Defendants’ building renovations and improvements demonstrate that Defendants sought to attract higher income tenants, likely to skew white, Pl.’s Opp’n Mot., ECF No. 98 at 41, is contradicted by the Regulatory Agreement, which restricts the complex to primarily low-income tenants, Defs.’ 56.1 Stmt. ¶¶ 4-8, ECF No. 97-2; Pl.’s Resp. to Defs.’ 56.1 Stmt. ¶¶ 4-8, ECF No. 98-2. The only other evidence Plaintiff offers in support of its allegations of intentional discrimination is its “strong evidence of disparate impact.” Pl.’s Opp’n Mot., ECF No. 98 at 41. Whether the impact of an action bears more heavily on one race than another is a relevant factor in assessing discriminatory intent, but any such impact standing alone is insufficient to sustain a disparate treatment claim.27 Mhany Mgmt., 819 F.3d at 606 (stating that
27 Plaintiff relies on Teamsters, 431 U.S. at 335 n.15, for the proposition that it need only show a statistical disparity to support a disparate treatment claim. “Outside the class context, however, private plaintiffs may not invoke the Teamsters method of proof as an independent and distinct method of establishing liability.” Chin v. Port Auth. of NY & NJ, 685 F.3d 135, 150 (2d Cir. 2012).
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“impact alone is not determinative” of intent and “the Court must look to other evidence” (internal quotation marks & citations omitted)); see Arlington Heights, 429 U.S. at 265 (“[D]isproportionate impact is not irrelevant, but it is not the sole touchstone of an invidious racial discrimination. Proof of racially discriminatory intent or purpose is required to show a violation of the Equal Protection Clause.” (internal quotation marks & citation omitted)). The Court must consider the totality of the circumstances, and may look to the Arlington factors for guidance. Rivera, 784 F. Supp. 2d at 147.
Plaintiff offers and the Court sees no evidence that any of the other Arlington factors suggests discriminatory intent. Plaintiff provides no evidence that the alleged decision by Defendants to exclude individuals with criminal histories was unusual or a departure from normal procedure, nor does it offer any statements by Defendants or their agents suggesting discriminatory animus toward African-American or Latino persons. Considering the totality of circumstances in light of the Arlington factors, no reasonable fact-finder could find on the record before the Court that Defendants acted with discriminatory intent. Accordingly, Defendants’ motion for summary judgment with respect to Plaintiff’s claim of disparate treatment under the FHA, ECF No. 97-1 at 38-39, is granted.
Defendants’ motion for summary judgment with respect to Plaintiff’s state and city claims for disparate treatment (NYSHRL, NY Executive Code § 296(5) & NYCHRL, Administrative Code of City of NY § 8-107(5)) is also granted. “NYSHRL, and NYCHRL housing discrimination claims are analyzed under the same standard as claims made under the FHA” because they contain language that is substantively identical to that of the FHA, differing in that the NYSHRL and NYCHRL cover a broader range of protected classes. Haber v. ASN
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Case 1:14-cv-06410-VMS Document 141 Filed 07/03/19 Page 48 of 49 PageID #: 8818 50th St. LLC, 847 F. Supp. 2d 578, 588 & n.5 (S.D.N.Y. 2012).28 “Because Plaintiff’s claims of alleged discriminatory treatment under the FHA fail for lack of discriminatory animus, a requisite element under the McDonnell Douglas test, Plaintiff’s state [and city] law discriminatory treatment claims also fail.” Favourite v. 55 Halley St., Inc., No. 16 Civ. 4285 (NSR), 2019 WL 2226762, at *12 (S.D.N.Y. May 23, 2019); see Haber, 847 F. Supp. 2d at 588 & n.5.
28 For the same reason, Plaintiff’s state and city law claims based on alleged disparate impact survive summary judgment. See id.; Jackson v. Tryon Park Apartments, Inc., No. 18 Civ. 6238 (EAW), 2019 WL 331635, at *5 (W.D.N.Y. Jan. 25, 2019) (“We have consistently held that the standards for recovery under the New York Human Rights Law are in nearly all instances identical to federal law.” (internal quotation marks, citations, & alterations omitted)); Williams v. NYCHA, 879 F. Supp. 2d 328 (E.D.N.Y. 2012) (dismissing state and city disparate impact claims because they were “analogs” of the FHA disparate impact claim, which had been dismissed).
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VII. CONCLUSION For the reasons stated above, Plaintiff’s motion for partial summary judgment is denied; Defendants’ cross-motion for summary judgment is denied with respect to Plaintiff’s disparate impact claim and granted with respect to Plaintiff’s disparate treatment claim; Defendants’ motion for dismissal based on lack of standing is denied. Defendants’ motion to exclude the testimony of Dr. Parnell is denied, and Plaintiff’s motion to exclude the testimony of Mr. Welsch is denied as moot, but may be renewed without prejudice for pre-trial motions. At the upcoming Status Conference, the Parties should be prepared to discuss the underdeveloped areas referenced above, a timeline for submission of a joint pre-trial order, trial scheduling and any potential for settlement. The Parties are to read and consider the Court’s alternative dispute resolution program information available on the Court’s website and discuss whether they wish the Court to provide a referral. The program information is available at: https://www.nyed.uscourts.gov/alternative-dispute-resolution.

Dated: Brooklyn, New York July 3, 2019

Vera M. Scanlon
VERA M. SCANLON United States Magistrate Judge

49

 
 U.S. District Court Eastern District of New York (Brooklyn) CIVIL DOCKET FOR CASE #: 1:14-cv-06410-VMS

The Fortune Society v. Sandcastle Towers Housing Development Fund Corp. et al Assigned to: Magistrate Judge Vera M. Scanlon Cause: 42:405 Fair Housing Act

Date Filed: 10/30/2014 Date Terminated: 10/17/2019 Jury Demand: Plaintiff Nature of Suit: 443 Civil Rights: Accomodations Jurisdiction: Federal Question

Plaintiff The Fortune Society

represented by Glenn Schlactus Relman & Dane, PLLC 1225 19th, St., NW Suite 600 Washington, DC 20036 202-728-1888 Fax: 202-728-0848 Email: gschlactus@relmanlaw.com ATTORNEY TO BE NOTICED

Jia Cobb Relman, Dane & Colfax PLLC 1225 19th Street, Nw Suite 600 Washington, DC 20036 202-728-1888 Fax: 202-728-0848 Email: jcobb@relmanlaw.com ATTORNEY TO BE NOTICED

John P. Relman Relman, Dane & Colfax PLLC For Civil Rights and Urban Affairs 1225 19th Street NW Suite 600 Washington, DC 20036 202-728-1888 Fax: 202-728-0848 Email: jrelman@relmanlaw.com ATTORNEY TO BE NOTICED

Margaret Burgess

V.
Defendant
Sandcastle Towers Housing Development Fund Corp.

Relman, Dane & Colfax PLLC 1225 19th Street NW Suite 600 Washington, DC 20036-2456 202-728-1888 Fax: 202-728-0848 TERMINATED: 09/16/2016 PRO HAC VICE ATTORNEY TO BE NOTICED
Sasha Minh Samberg-Champion Relman Danet Colfax 1225 19th Street Nw Suite 600 Washington, DC 20036 202-728-1888 Fax: 202-728-0848 Email: ssambergchampion@relmanlaw.com ATTORNEY TO BE NOTICED
Ryan Chasce Downer Relman, Dane & Colfax 1225 19th Street Nw Suite 600 Washington, DC 20036 (202)728-1888 Fax: (202)728-0848 Email: rdowner@relmanlaw.com TERMINATED: 09/17/2018 ATTORNEY TO BE NOTICED
represented by Richard T. Walsh Horing Welikson & Rosen, P.C. 11 Hillside Avenue Williston Park, NY 11596 516-535-1700 Fax: 516-535-1701 Email: rtwalsh@optonline.net TERMINATED: 01/26/2017 LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jann S. Brent Horing Welikson & Rosen, P.C. 11 Hillside Avenue Williston Park, NY 11596 516-535-1700 Fax: 516-535-1701 Email: jbrent@hwrpc.com TERMINATED: 01/26/2017 ATTORNEY TO BE NOTICED
Larry R. Martinez Meltzer Lippe Goldstein & Breitstone LLP 190 Willis Avenue Mineola, NY 11501 516-747-0300 Email: lmartinez@meltzerlippe.com ATTORNEY TO BE NOTICED
Loretta M. Gastwirth Meltzer, Lippe, Goldstein & Breitstone, LLP 190 Willis Avenue Mineola, NY 11501 (516)747-0300 Fax: (516)747-0653 Email: lgastwirth@meltzerlippe.com ATTORNEY TO BE NOTICED
Stephanie Marie Suarez Meltzer Lippe Goldstein & Breitstone LLP 190 Willis Avenue Mineola, NY 11501 516-747-0300 Fax: 516-237-2893 Email: ssuarez@meltzerlippe.com ATTORNEY TO BE NOTICED
Thomas D. Shanahan Thomas D. Shanahan 551 Fifth Avenue, Suite 616 New York, NY 10176 (212)867-1100 Fax: (212)972-1787

Defendant Sarasota Gold LLC
Defendant Weissman Realty Group LLC

Email: tom@shanahanlaw.com ATTORNEY TO BE NOTICED
represented by Richard T. Walsh (See above for address) TERMINATED: 01/26/2017 LEAD ATTORNEY ATTORNEY TO BE NOTICED
Jann S. Brent (See above for address) TERMINATED: 01/26/2017 ATTORNEY TO BE NOTICED
Larry R. Martinez (See above for address) ATTORNEY TO BE NOTICED
Loretta M. Gastwirth (See above for address) ATTORNEY TO BE NOTICED
Stephanie Marie Suarez (See above for address) ATTORNEY TO BE NOTICED
Thomas D. Shanahan (See above for address) ATTORNEY TO BE NOTICED
represented by Richard T. Walsh (See above for address) TERMINATED: 01/26/2017 LEAD ATTORNEY ATTORNEY TO BE NOTICED
Jann S. Brent (See above for address) TERMINATED: 01/26/2017 ATTORNEY TO BE NOTICED
Larry R. Martinez (See above for address)

Defendant E & M Associates LLC
Interested Party United States of America Office of the U. S. Attorney - EDNY

ATTORNEY TO BE NOTICED
Loretta M. Gastwirth (See above for address) ATTORNEY TO BE NOTICED
Stephanie Marie Suarez (See above for address) ATTORNEY TO BE NOTICED
Thomas D. Shanahan (See above for address) ATTORNEY TO BE NOTICED
represented by Richard T. Walsh (See above for address) TERMINATED: 01/26/2017 LEAD ATTORNEY ATTORNEY TO BE NOTICED
Jann S. Brent (See above for address) TERMINATED: 01/26/2017 ATTORNEY TO BE NOTICED
Larry R. Martinez (See above for address) ATTORNEY TO BE NOTICED
Loretta M. Gastwirth (See above for address) ATTORNEY TO BE NOTICED
Stephanie Marie Suarez (See above for address) ATTORNEY TO BE NOTICED
Thomas D. Shanahan (See above for address) ATTORNEY TO BE NOTICED
represented by Michael J. Goldberger United States Attorneys Office

Michael Goldberger 271 Cadman Plaza East Brooklyn, NY 11201 718 254-6052

Eastern District of New York 271 Cadman Plaza East Brooklyn, NY 11201-1820 (718)254-6052 Fax: (718)254-6083 Email: Michael.Goldberger@usdoj.gov ATTORNEY TO BE NOTICED

Date Filed 10/30/2014
10/30/2014 10/30/2014 10/31/2014
10/31/2014 10/31/2014

# Docket Text
1 COMPLAINT against Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC filing fee $ 400, receipt number 0207-7301007 Was the Disclosure Statement on Civil Cover Sheet completed -YES,, filed by The Fortune Society. (Attachments: # 1 Civil Cover Sheet, # 2 Proposed Summons, # 3 Proposed Summons, # 4 Proposed Summons) (Downer, Ryan) (Entered: 10/30/2014)
Case assigned to Judge Brian M. Cogan. (Bowens, Priscilla) (Entered: 10/31/2014)
2 Summons Issued as to All Defendants. (Attachments: # 1 Sarasota summons, # 2 Weissman summons) (Bowens, Priscilla) (Entered: 10/31/2014)
3 In accordance with Rule 73 of the Federal Rules of Civil Procedure and Local Rule 73.1, the parties are notified that if all parties consent a United States magistrate judge of this court is available to conduct all proceedings in this civil action including a (jury or nonjury) trial and to order the entry of a final judgment. Attached to the Notice is a blank copy of the consent form that should be filled out, signed and filed electronically only if all parties wish to consent. The form may also be accessed at the following link:http://www.uscourts.gov/uscourts/FormsAndFees/Forms/AO085.pdf. You may withhold your consent without adverse substantive consequences. Do NOT return or file the consent unless all parties have signed the consent. (Bowens, Priscilla) (Entered: 10/31/2014)
4 This attorney case opening filing has been checked for quality control. See the attachment for corrections that were made, if any. (Bowens, Priscilla) (Entered: 10/31/2014)
SCHEDULING ORDER: Counsel for all parties are directed to appear before the Honorable Brian M. Cogan for an Initial Status Conference on

12/11/2014 at 11:30 am in Chambers 704S. Principal trial counsel must appear at this and all subsequent conferences. Plaintiff's counsel is directed to notify all attorneys in this action of the conference schedule in writing. Defendants' counsel is Ordered to ECF file a pre-conference letter that explains their anticipated legal and factual bases for defending this action.

Counsel is directed to review Judge Cogan's Individual Practices, which may be obtained on the Court's website at https://www.nyed.uscourts.gov/content/judge-brian-m-cogan. Requests for adjournment of the conference will be considered only if made in writing and otherwise in accordance with Judge Cogan's Rules. Ordered by Judge Brian M. Cogan on 10/31/2014. (Weisberg, Peggy)

11/13/2014 11/13/2014

(Entered: 10/31/2014)
5 SUMMONS Returned Executed by The Fortune Society. Sarasota Gold LLC served on 11/13/2014, answer due 12/4/2014. (Downer, Ryan) (Entered: 11/13/2014)
6 SUMMONS Returned Executed by The Fortune Society. Sandcastle Towers Housing Development Fund Corp. served on 11/13/2014, answer due 12/4/2014. (Downer, Ryan) (Entered: 11/13/2014)

11/13/2014

7 SUMMONS Returned Executed by The Fortune Society. Weissman Realty Group LLC served on 11/13/2014, answer due 12/4/2014. (Downer, Ryan) (Entered: 11/13/2014)

11/13/2014 11/14/2014
11/24/2014 12/04/2014

8 Letter Regarding Treatment As a Related Case by The Fortune Society (Attachments: # 1 Certificate of Service) (Downer, Ryan) (Entered: 11/13/2014)
ORDER REASSIGNING CASE. Case reassigned to Judge Margo K. Brodie and Magistrate Judge Vera M. Scanlon as related to 14cv5716 for all further proceedings. Judge Brian M. Cogan no longer assigned to case. Ordered by Chief Judge Carol Bagley Amon on 11/14/2014. (Bowens, Priscilla) (Entered: 11/14/2014)
9 NOTICE of Appearance by Richard T. Walsh on behalf of Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC (aty to be noticed) (Walsh, Richard) (Entered: 11/24/2014)
10 MOTION for Leave to Appear Pro Hac Vice by Jia Cobb Filing fee $ 25, receipt number 0207-7376083. by The Fortune Society. (Attachments: # 1 Affidavit Affidavit of Jia Cobb in Support of Motion to Admit Counsel Pro Hac Vice, # 2 Supplement Certificate of Good Standing for Jia Cobb, # 3 Certificate of Service Certificate of Service, # 4 Proposed

Order Proposed Order Granting Pro Hac Vice Application) (Downer, Ryan) (Entered: 12/04/2014)

12/04/2014

11 MOTION for Leave to Appear Pro Hac Vice by John P. Relman Filing fee $ 25, receipt number 0207-7376172. by The Fortune Society. (Attachments: # 1 Affidavit Affidavit of John Relman in Support of Motion to Admit Counsel Pro Hac Vice, # 2 Supplement Certificate of Good Standing for John Relman, # 3 Certificate of Service Certificate of Service, # 4 Proposed Order Proposed Order Granting Pro Hac Vice Application) (Downer, Ryan) (Entered: 12/04/2014)

12/05/2014

ORDER granting 10 Motion for Leave to Appear Pro Hac Vice. Ordered by Magistrate Judge Vera M. Scanlon on 12/5/2014. (Priftakis, Tina) (Entered: 12/05/2014)

12/05/2014

ORDER granting 11 Motion for Leave to Appear Pro Hac Vice. Ordered by Magistrate Judge Vera M. Scanlon on 12/5/2014. (Priftakis, Tina) (Entered: 12/05/2014)

12/11/2014

12 MOTION for Leave to Appear Pro Hac Vice Filing fee $ 25, receipt number 0207-7391375. by The Fortune Society. (Attachments: # 1 Affidavit Affidavit of Glenn Schlactus in Support of Motion to Admit Counsel Pro Hac Vice, # 2 Supplement Certificate of Good Standing for Glenn Schlactus from the District Court of Columbia Court of Appeals, # 3 Supplement Certificate of Good Standing for Glenn Schlactus from the California State Bar, # 4 Certificate of Service Certificate of Service, # 5 Proposed Order Proposed Order Granting Pro Hac Vice Application for Glenn Schlactus) (Downer, Ryan) (Entered: 12/11/2014)

12/13/2014

13 First MOTION for Extension of Time to File Answer per stipulation on consent by Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC. (Walsh, Richard) (Entered: 12/13/2014)

12/15/2014

ORDER granting 12 Motion for Leave to Appear Pro Hac Vice. Ordered by Magistrate Judge Vera M. Scanlon on 12/15/2014. (Priftakis, Tina) (Entered: 12/15/2014)

12/15/2014

ORDER granting 13 Motion for Extension of Time to Answer. All Defendants must answer or otherwise respond to the Plaintiff's complaint on or before 12/18/2014. Ordered by Magistrate Judge Vera M. Scanlon on 12/15/2014. (Priftakis, Tina) (Entered: 12/15/2014)

12/18/2014 14 ANSWER to 1 Complaint, by All Defendants. (Walsh, Richard) (Entered: 12/18/2014)

12/18/2014 15 ANSWER to 1 Complaint, by All Defendants. (Walsh, Richard) (Entered: 12/18/2014)

12/23/2014

16 SCHEDULING ORDER: Initial Conference set for 1/19/2015 03:30 PM in Courtroom 504 North before Magistrate Judge Vera M. Scanlon. The parties must review the attached initial conference order and complete the proposed initial scheduling order before coming to the initial conference. Ordered by Magistrate Judge Vera M. Scanlon on 12/23/2014. (Priftakis, Tina) (Entered: 12/23/2014)

12/29/2014

Scheduling Order: Set/Reset Hearings: The 1/19/2015 Initial Conference is adjourned to a later date due to the fact that the Court is closed on 1/19/2015 for the Martin Luther King, Jr. Birthday holiday. Initial Conference reset for 1/21/2015 05:00 PM in Courtroom 504 North before Magistrate Judge Vera M. Scanlon. (Priftakis, Tina) (Entered: 12/29/2014)

01/06/2015 17 Consent MOTION to Adjourn Conference by The Fortune Society. (Downer, Ryan) (Entered: 01/06/2015)

01/07/2015

Scheduling Order: Set/Reset Hearings: The 1/21/2015 Initial Conference is adjourned to a later date at Plaintiff's request with consent from defendants. Initial Conference reset for 2/5/2015 10:00 AM in Courtroom 504 North before Magistrate Judge Vera M. Scanlon. (Priftakis, Tina) (Entered: 01/07/2015)

02/04/2015

18 Emergency MOTION to Adjourn Conference on 02/05/2015 by Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC. (Walsh, Richard) (Entered: 02/04/2015)

02/04/2015

ORDER granting in part and denying in part 18 Motion to Adjourn Conference. On consent, defendants' counsel's request to adjourn the 2/5/2015 Initial Conference is granted. Initial Conference reset for 2/12/2015 at 09:00 AM in Courtroom 504 North before Magistrate Judge Vera M. Scanlon. Ordered by Magistrate Judge Vera M. Scanlon on 2/4/2015. (Priftakis, Tina) (Entered: 02/04/2015)

02/06/2015

ORDER: Defendants' counsel requested an adjournment of the 2/5/15 conference in light of a family medical emergency. The request was granted, and the conference was rescheduled at counsel's request to 2/12/15. The Court notes, however, that counsel's request asked that the conference be scheduled at a time before or after counsel's conference with District Judge Feuerstein. It is unclear from the correspondence whether counsel is aware that District Judge Feuerstein sits in the EDNY courthouse in Central Islip while the Magistrate Judge sits in the EDNY courthouse in Brooklyn. On or before 2/10/2015, counsel should confirm that he wishes the 2/12/2015 conference in Brooklyn to proceed. If there is a conflict in the conferences, counsel may request an additional adjournment of the Brooklyn conference. Ordered by Magistrate Judge Vera M. Scanlon on 2/6/2015. (Scanlon, Vera) (Entered: 02/06/2015)

02/09/2015

SCHEDULING ORDER: The Initial Conference set for 2/12/2015 is rescheduled to 2/18/2015 at 02:30 PM before Magistrate Judge Vera M. Scanlon. Ordered by Magistrate Judge Vera M. Scanlon on 2/9/2015. (Rice, Liane) (Entered: 02/09/2015)

02/09/2015 19 NOTICE of Appearance by Jann S. Brent on behalf of All Defendants (aty to be noticed) (Brent, Jann) (Entered: 02/09/2015)

02/18/2015

20 Minute Entry for proceedings held before Magistrate Judge Vera M. Scanlon:Initial Conference Hearing held on 2/18/2015. Please see attached for appearances. (Tape #2:50-3:43.) (Priftakis, Tina) (Entered: 02/19/2015)

02/18/2015

21 SCHEDULING ORDER: Having held an initial conference as noted in the separate minute entry, the Court has made certain scheduling decisions in this action. The attached Scheduling Order must be reviewed and complied with by all counsel and/or any pro se parties participating in this action. On or before 4/23/2015, the parties must file a joint status letter of no more than 3 pages describing the status of discovery and any outstanding discovery disputes. Telephone Conference set for 4/30/2015 02:15 PM before Magistrate Judge Vera M. Scanlon. Plaintiff's counsel is to initiate a conference call with counsel then call Chambers at (718) 6132300 at the designated time. On or before 9/24/2015, the parties must file on ECF a joint letter confirming that discovery is concluded. Ordered by Magistrate Judge Vera M. Scanlon on 2/18/2015. (Priftakis, Tina) (Entered: 02/19/2015)

02/24/2015

22 TRANSCRIPT of Proceedings held on February 18, 2015, before Judge Scanlon. Court Transcriber: ARIA SERVICES, INC, Telephone number 845-260-1377. Transcript may be viewed at the court public terminal or purchased through the Court Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER.File redaction request using event "Redaction Request Transcript" located under "Other Filings - Other Documents". Redaction Request due 3/17/2015. Redacted Transcript Deadline set for 3/27/2015. Release of Transcript Restriction set for 5/25/2015. (Rocco, Christine) (Entered: 02/24/2015)

02/25/2015

23 CONSENT to Jurisdiction by US Magistrate Judge by Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC. (Brent, Jann) (Entered: 02/25/2015)

03/31/2015

24 Joint MOTION for Protective Order by The Fortune Society. (Attachments: # 1 Proposed Order) (Downer, Ryan) (Entered: 03/31/2015)

04/02/2015

25 ORDER granting as modified 24 Motion for Protective Order. Please see attached for the document with modifications. Ordered by Magistrate Judge Vera M. Scanlon on 4/2/2015. (Lozar, Ryan) (Entered: 04/02/2015)

04/15/2015

26 CONSENT to Jurisdiction by US Magistrate Judge Scanlon for all purposes including judgment. Case reassigned to Magistrate Magistrate Judge Vera M. Scanlon. Judge Brodie no longer assigned. (Guzzi, Roseann) (Entered: 04/15/2015)

04/17/2015

27 Letter MOTION to Amend/Correct/Supplement 1 Complaint, by The Fortune Society. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Certificate of Service) (Downer, Ryan) (Entered: 04/17/2015)

04/20/2015

ORDER. On or before 4/23/2015, Defendants must respond to Plaintiff's motion to amend with a letter indicating the extent to which they consent or oppose the motion. A 4/30/2015 conference is already scheduled with the Court and the Parties should expect to discuss the complaint amendment issue on that date. Once Defendants file their response on 4/23/2015, the Parties should meet and confer about any points of opposition and alert the Court if any disputed issues have been resolved with a filing on ECF on or before the close of business on 4/28/2015. Ordered by Magistrate Judge Vera M. Scanlon on 4/20/2015. (Lozar, Ryan) (Entered: 04/20/2015)

04/23/2015 28 Letter re: Status of Discovery by The Fortune Society (Attachments: # 1 Certificate of Service) (Downer, Ryan) (Entered: 04/23/2015)

04/24/2015

ORDER. Defendants failed to comply with the Court's Order that they file a letter by 4/23/2015 indicating their position relative to Plaintiff's motion to amend at 27 . At present the Court assumes that the motion is unopposed. Ordered by Magistrate Judge Vera M. Scanlon on 4/24/2015. (Lozar, Ryan) (Entered: 04/24/2015)

05/01/2015

Minute Entry for proceedings held before Magistrate Judge Vera M. Scanlon: Telephone Conference held on 4/30/2015. Appearances by Ryan Downer and Glenn Schlactus for Plaintiff and Richard Walsh for Defendants. Mr. Schlactus must file a notice of appearance. See separate docket entry for Order issuing from this proceeding. (Tape #2:18-2:40.) (Rice, Liane) (Entered: 05/01/2015)

05/01/2015

29 ORDER granting 27 Motion to Amend/Correct/Supplement; SCHEDULING ORDER: As discussed during the 4/30/2015 conference (see attached order for additional detail), the 27 motion is granted on consent. Plaintiff to file an amended complaint. A Telephone Conference is set for 7/30/2015 at 09:30 AM before Magistrate Judge Vera M. Scanlon. Defendants' counsel is to organize a conference call, then phone Chambers at (718) 613-2300 with all counsel on the line. Ordered by

Magistrate Judge Vera M. Scanlon on 4/30/2015. (Rice, Liane) (Entered: 05/01/2015)

05/01/2015

30 AMENDED COMPLAINT against All Defendants, filed by The Fortune Society. (Attachments: # 1 Proposed Summons, # 2 Certificate of Service) (Downer, Ryan) (Entered: 05/01/2015)

05/04/2015

31 NOTICE of Appearance by John P. Relman on behalf of The Fortune Society (aty to be noticed) (Attachments: # 1 Certificate of Service) (Relman, John) (Entered: 05/04/2015)

05/04/2015

32 NOTICE of Appearance by Glenn Schlactus on behalf of The Fortune Society (aty to be noticed) (Attachments: # 1 Certificate of Service) (Schlactus, Glenn) (Entered: 05/04/2015)

05/04/2015

33 NOTICE of Appearance by Jia Cobb on behalf of The Fortune Society (aty to be noticed) (Attachments: # 1 Certificate of Service) (Cobb, Jia) (Entered: 05/04/2015)

05/06/2015

34 TRANSCRIPT of Proceedings held on April 30, 2015, before Judge SCANLON. Court Reporter/Transcriber Transcriptions Plus II, Inc.. Email address: laferrara44@gmail.com. Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER.File redaction request using event "Redaction Request - Transcript" located under "Other Filings - Other Documents". Redaction Request due 5/27/2015. Redacted Transcript Deadline set for 6/8/2015. Release of Transcript Restriction set for 8/4/2015. (Hong, Loan) (Entered: 05/06/2015)

05/12/2015 35 Amended Summons Issued as to E & M Associates LLC. (Brucella, Michelle) (Entered: 05/12/2015)

05/18/2015

36 SUMMONS Returned Executed by The Fortune Society. E & M Associates LLC served on 5/14/2015, answer due 6/4/2015. (Downer, Ryan) (Entered: 05/18/2015)

05/21/2015

37 ANSWER to 30 Amended Complaint by All Defendants. (Attachments: # 1 Affidavit of Service of Answer) (Walsh, Richard) (Entered: 05/21/2015)

05/26/2015

38 Corporate Disclosure Statement by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC (Walsh, Richard) (Entered: 05/26/2015)

06/25/2015

ORDER: During the 7/30/2015 conference, counsel should be prepared to discuss the impact on the strength of their respective positions, their settlement positions and the scope of discovery of today's United States Supreme Court decision, Texas Dep't of Housing & Community Affairs v. Inclusive Communities Project, Inc. (13-1371). Ordered by Magistrate Judge Vera M. Scanlon on 6/25/2015. (Scanlon, Vera) (Entered: 06/25/2015)

06/30/2015

39 Letter MOTION to Compel Discovery Responses by The Fortune Society. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Certificate of Service) (Downer, Ryan) (Entered: 06/30/2015)

07/10/2015

40 Consent MOTION for Hearing on Discovery in Person by The Fortune Society. (Attachments: # 1 Certificate of Service) (Downer, Ryan) (Entered: 07/10/2015)

07/10/2015

41 Letter MOTION for Extension of Time to File Response/Reply as to 39 Letter MOTION to Compel Discovery Responses by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC. (Attachments: # 1 Exhibit) (Brent, Jann) (Entered: 07/10/2015)

07/13/2015

ORDER granting 40 Motion for Hearing and granting 41 Motion for Extension of Time to File Response/Reply. The 7/30/2015 conference will now take in person in Room 504 North as requested by the Parties. Ordered by Magistrate Judge Vera M. Scanlon on 7/13/2015. (Lozar, Ryan) (Entered: 07/13/2015)

07/13/2015 42 RESPONSE in Opposition re 39 Letter MOTION to Compel Discovery Responses filed by All Defendants. (Brent, Jann) (Entered: 07/13/2015)

07/13/2015

43 Joint MOTION for Protective Order by The Fortune Society. (Attachments: # 1 Proposed Order, # 2 Proposed Order, # 3 Certificate of Service) (Downer, Ryan) (Entered: 07/13/2015)

07/13/2015

44 Letter to Supplement Plaintiff's Motion to Compel by The Fortune Society (Attachments: # 1 Exhibit 6, # 2 Exhibit 7, # 3 Certificate of Service) (Downer, Ryan) (Entered: 07/13/2015)

07/28/2015

45 Letter MOTION to Compel Discovery Responses by The Fortune Society. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Certificate of Service) (Downer, Ryan) (Entered: 07/28/2015)

07/30/2015

Minute Entry for proceedings held before Magistrate Judge Vera M. Scanlon:Telephone Conference held on 7/30/2015 in Room 504 North.

Glenn Schlactus, John Relman, Ryan Downer appearing for Plaintiff. Richard Walsh and Jann Brent appearing for Defendants. See separate docket entry for Order issuing from this proceeding. (Tape #9:33-10:27.) (Quinlan, Krista) (Entered: 07/30/2015)

07/30/2015

46 ORDER granting 39 Motion to Compel; granting 43 Motion for Protective Order; STATUS REPORT ORDER: As discussed during the 7/30/2015 conference (see attached order for additional detail and deadlines), Plaintiff's motion for discovery at 39 is granted. Plaintiff have established that based on the temporal history of the policies development of Defendant entities, documents from 2006 forward may contain relevant policy information. Defendants will respond to the motion at 45 by 8/3/2015. No reply needed. The order at 43 is granted. By 8/7/2015, counsel will submit a letter with a proposed detailed discovery plan. Counsel are strongly encouraged to discuss settlement possibilities. Ordered by Magistrate Judge Vera M. Scanlon on 7/30/2015. (Quinlan, Krista) (Entered: 07/30/2015)

07/31/2015

47 First MOTION for Extension of Time to Complete Discovery to extend time to seek expert witness by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC. (Attachments: # 1 Appendix, # 2 Appendix) (Walsh, Richard) (Entered: 07/31/2015)

08/03/2015 48 Letter re Intent to File Opposition by The Fortune Society (Downer, Ryan) (Entered: 08/03/2015)

08/03/2015

49 First MOTION for Protective Order concerning financial information, First MOTION for Extension of Time to File and serve answers to interrogatories and request to produce served on Defendant E&M by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC. (Attachments: # 1 Declaration of service) (Walsh, Richard) (Entered: 08/03/2015)

08/03/2015

50 RESPONSE to Motion re 45 Letter MOTION to Compel Discovery Responses filed by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC. (Attachments: # 1 Declaration of service) (Walsh, Richard) (Entered: 08/03/2015)

08/03/2015

51 AFFIDAVIT/DECLARATION in Support re 45 Letter MOTION to Compel Discovery Responses Corercted Declaration of Service of opposition to motion filed by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC. (Walsh, Richard) (Entered: 08/03/2015)

08/05/2015

52 RESPONSE in Opposition re 47 First MOTION for Extension of Time to Complete Discovery to extend time to seek expert witness filed by The Fortune Society. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Certificate of Service) (Downer, Ryan) (Entered: 08/05/2015)

08/07/2015

53 Joint MOTION for Extension of Time to Complete Discovery by The Fortune Society. (Attachments: # 1 Exhibit A) (Downer, Ryan) (Entered: 08/07/2015)

08/10/2015

ORDER granting 47 Motion for Extension of Time to Complete Expert discovery. On or before 8/26/2015, Defendants should serve their rebuttal expert report. Expert discovery will be extended in general as per the Parties' motion at 53 (see separate docket entry). Ordered by Magistrate Judge Vera M. Scanlon on 8/10/2015. (Lozar, Ryan) Modified on 8/17/2015 (Lozar, Ryan). (Entered: 08/10/2015)

08/10/2015

ORDER granting 53 Motion for Extension of Time to Complete Discovery. The Parties' proposed modified pretrial schedule at [53-1] is so ordered. Ordered by Magistrate Judge Vera M. Scanlon on 8/10/2015. (Lozar, Ryan) (Entered: 08/10/2015)

08/14/2015

54 MOTION to Amend/Correct/Supplement Order on Motion for Extension of Time to Complete Discovery, (Unopposed Motion for Clarification) by The Fortune Society. (Attachments: # 1 Certificate of Service) (Downer, Ryan) (Entered: 08/14/2015)

08/17/2015

ORDER granting 54 Motion to Amend/Correct/Supplement. The typographical error in the 8/10/2015 Docket Entry is now corrected to state that Defendants made the motion at 47 . In light of the Parties' need for clarification of that entry, Defendants may have an additional week to comply with the order contained therein, and must now file their expert rebuttal report on or before 9/4/2015. As previously ordered, expert discovery remains set to close on 12/11/2015. Ordered by Magistrate Judge Vera M. Scanlon on 8/17/2015. (Lozar, Ryan) (Entered: 08/17/2015)

08/27/2015

ORDER granting 45 Motion to Compel; denying 49 Motion for Protective Order; granting 49 Motion for Extension of Time to File. As better supported by the federal cases cited by Plaintiff in its motion, the Court's preferred practice is that all discovery be completed during the discovery period, including discovery relating to punitive damages, which could conceivably be awarded in this case were Plaintiff to be successful on its causes of action for housing discrimination. Defendants must produce information and documentation related to their net worth by 9/8/2015. If Defendants object to a particular request, they must confer with Plaintiff, and only raise the dispute with the Court if they cannot

resolve it among themselves.//Defendants may have the additional time requested to respond to the outstanding requests. Ordered by Magistrate Judge Vera M. Scanlon on 8/27/2015. (Scanlon, Vera) (Entered: 08/27/2015)

09/02/2015

55 Letter MOTION for Extension of Time to Complete Discovery to provide Rebuttal Expert Witness Report by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC. (Attachments: # 1 Affidavit of Service Declaration of Service) (Walsh, Richard) (Entered: 09/02/2015)

09/06/2015

56 RESPONSE in Opposition re 55 Letter MOTION for Extension of Time to Complete Discovery to provide Rebuttal Expert Witness Report filed by The Fortune Society. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Certificate of Service) (Downer, Ryan) (Entered: 09/06/2015)

09/21/2015

ORDER granting 55 Motion for Extension of Time to Complete Discovery. The requested extension is so ordered. Ordered by Magistrate Judge Vera M. Scanlon on 9/21/2015. (Quinlan, Krista) (Entered: 09/21/2015)

09/21/2015

57 NOTICE of Appearance by Thomas D. Shanahan on behalf of All Defendants (aty to be noticed) (Shanahan, Thomas) (Entered: 09/21/2015)

10/08/2015

58 MOTION to Compel to Enforce Court's August 10 and August 27 Orders by The Fortune Society. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Certificate of Service) (Downer, Ryan) (Entered: 10/08/2015)

10/09/2015

SCHEDULING ORDER: A Telephone Conference is set for 10/15/2015 at 2:15 PM before Magistrate Judge Vera M. Scanlon. The Court will address Plaintiff's motion at 58 . Ordered by Magistrate Judge Vera M. Scanlon on 10/9/2015. (Quinlan, Krista) (Entered: 10/09/2015)

10/15/2015

Minute Entry for proceedings held before Magistrate Judge Vera M. Scanlon:Telephone Conference held on 10/15/2015 in Room 504 North. Glenn Schlactus, Jia Cobb and Ryan Downer appearing for Plaintiff. Richard Walsh, Jann Brent and Thomas Shanahan appearing for Defendants. See separate docket entry for Order issuing from this proceeding. (Tape #2:28-2:58.) (Quinlan, Krista) (Entered: 10/16/2015)

10/15/2015

59 ORDER granting in part and denying in part 58 Motion to Compel as noted in the attchment; SCHEDULING ORDER: As discussed during the 10/15/2015 conference (see attached order for additional detail and deadlines), a Telephone Conference is set for 11/23/2015 at 10:00 AM

before Magistrate Judge Vera M. Scanlon. Plaintiff's counsel is to organize a conference call, then phone Chambers at (718) 613-2300 with all counsel on the line. Defendants must meet deadlines or force sanctions, including possible monetary sanctions, for failure to comply with the Court's deadlines. Ordered by Magistrate Judge Vera M. Scanlon on 10/15/2015. (Quinlan, Krista) (Entered: 10/16/2015)

10/26/2015

60 MOTION for Sanctions and to Enforce the Court's Order by The Fortune Society. (Attachments: # 1 Certificate of Service) (Downer, Ryan) (Entered: 10/26/2015)

10/27/2015

ORDER: Defendants are directed to respond to Plaintiff's 10/26/2015 letter at 60 by 10/29/2015. Ordered by Magistrate Judge Vera M. Scanlon on 10/27/2015. (Weingarten, Richard) (Entered: 10/27/2015)

10/29/2015

61 RESPONSE in Opposition re 60 MOTION for Sanctions and to Enforce the Court's Order filed by All Defendants. (Brent, Jann) (Entered: 10/29/2015)

10/30/2015

ORDER denying 60 Motion for Sanctions. In light of defense counsel's representation at 61 that all discovery due as per the Court's 10/15/2015 Order has been produced, Plaintiff's request for sanctions is denied. Defendants, however, are reminded that, as per the Court's 10/15/2015 Order, defendants must comply with their discovery obligations or risk monetary sanctions. Ordered by Magistrate Judge Vera M. Scanlon on 10/30/2015. (Weingarten, Richard) (Entered: 10/30/2015)

11/05/2015

RE-SCHEDULING ORDER: Due to a scheduling conflict, the Telephone Conference set for 11/23/2015 has been rescheduled to 11/16/2015 at 9:30 AM before Magistrate Judge Vera M. Scanlon. Counsel are to confirm amongst themselves that all are aware of this change. Ordered by Magistrate Judge Vera M. Scanlon on 11/5/2015. (Quinlan, Krista) (Entered: 11/05/2015)

11/16/2015

Minute Entry for proceedings held before Magistrate Judge Vera M. Scanlon:Telephone Conference held on 11/16/2015 in Room 504 North. John Relman and Ryan Downer appearing for Plaintiff. Richard Walsh appearing for Defendants. See separate docket entry for Order issuing from this proceeding. (Tape #9:53-10:10 (sealed); 10:11-10:25.) (Quinlan, Krista) (Entered: 11/17/2015)

11/16/2015

62 STATUS REPORT ORDER: As discussed during the 11/16/2015 conference (see attached order for additional detail and deadlines), counsel are at an impasse with regard to settlement discussions. Counsel are encouraged to discuss with their clients as to their respective risks, attorneys' fees, exposure and business considerations. Counsel are also encouraged to consider alternative structures to any settlement, including

whether one or more party could settle individually. Counsel are proceeding with discovery. Counsel are to discuss their summary judgment motions briefing and submit a proposed scheduled by 12/18/2015. Ordered by Magistrate Judge Vera M. Scanlon on 11/16/2015. (Quinlan, Krista) (Entered: 11/17/2015)

11/23/2015

63 MOTION for Leave to Appear Pro Hac Vice by Margaret Burgess Filing fee $ 150, receipt number 0207-8188976. by The Fortune Society. (Attachments: # 1 Affidavit, # 2 Supplement Certificate of Good Standing for Margaret Burgess, # 3 Certificate of Service, # 4 Proposed Order) (Downer, Ryan) (Entered: 11/23/2015)

11/30/2015

ORDER granting 63 Motion for Leave to Appear Pro Hac Vice. Ms. Burgess may appear in this action pro hac vice. Ordered by Magistrate Judge Vera M. Scanlon on 11/30/2015. (Quinlan, Krista) (Entered: 11/30/2015)

12/01/2015

64 NOTICE of Appearance by Margaret Burgess on behalf of The Fortune Society (notification declined or already on case) (Attachments: # 1 Certificate of Service) (Burgess, Margaret) (Entered: 12/01/2015)

12/18/2015 65 Letter (Joint) re: Discovery Deadlines and Summary Judgment Briefing Schedule by The Fortune Society (Downer, Ryan) (Entered: 12/18/2015)

12/23/2015

SCHEDULING ORDER: The parties proposed discovery schedule at 65 in So-Ordered. However, while the parties are free to modify interim deadlines amongst themselves, all discovery, including expert discovery, must be completed by 2/5/2016. No extensions of the 2/5/2016 deadline are permitted without leave of the Court. Discovery due by 2/5/2016. Ordered by Magistrate Judge Vera M. Scanlon on 12/23/2015. (Weingarten, Richard) (Entered: 12/23/2015)

12/29/2015

66 TRANSCRIPT of Proceedings held on July 30, 2015, before Judge SCANLON. Court Reporter/Transcriber TypeWrite Word Processing Service, Telephone number 718-966-1401. Email address: transcripts@typewp.com. Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER.File redaction request using event "Redaction Request - Transcript" located under "Other Filings - Other Documents". Redaction Request due 1/19/2016. Redacted Transcript Deadline set for 1/29/2016. Release of Transcript Restriction set for 3/28/2016. (Hong, Loan) (Entered: 12/29/2015)

01/14/2016 67 Letter MOTION to Compel Discovery Responses by The Fortune Society. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3,

# 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Certificate of Service) (Burgess, Margaret) (Entered: 01/14/2016)

01/15/2016

ORDER: In light of Plaintiff's motion at 67 , Defendants must file a response, if any, by 1/18/2016. A telephone conference to discuss the issues raised therein will be held on 1/20/2016 at 3:30 p.m. Plaintiff's counsel is to organize a conference call, then phone Chambers at (718) 613-2300 with all counsel on the line. The parties are also reminded of the upcoming discovery deadline on 2/5/2016 and are encouraged to confer and work out the issues raised in 67 amongst themselves. (Telephone Conference set for 1/20/2016 03:30 PM before Magistrate Judge Vera M. Scanlon). Ordered by Magistrate Judge Vera M. Scanlon on 1/15/2016. (Weingarten, Richard) (Entered: 01/15/2016)

01/18/2016

68 RESPONSE in Opposition re 67 Letter MOTION to Compel Discovery Responses filed by All Defendants. (Attachments: # 1 Exhibit, # 2 Exhibit, # 3 Declaration of service) (Walsh, Richard) (Entered: 01/18/2016)

01/20/2016

Minute Entry for proceedings held before Magistrate Judge Vera M. Scanlon:Telephone Conference held on 1/20/2016 in Room 504 North. Glenn Schlactus appearing for Plaintiff. Richard Walsh and Thomas Shanahan appearing for Defendants. See separate docket entry for Order issuing from this proceeding. (Tape #3:40-4:00.) (Quinlan, Krista) (Entered: 01/20/2016)

01/20/2016

69 ORDER granting 67 Motion to Compel in part and moot in part. As discussed during the 1/20/2016 conference (see attached order for additional detail and deadlines), as to the briefing schedule in the 12/18/2015 letter, only fully briefed motions should be submitted. The dates in the letter are to be treated as service dates. Ordered by Magistrate Judge Vera M. Scanlon on 1/20/2016. (Quinlan, Krista) (Entered: 01/20/2016)

01/26/2016

70 TRANSCRIPT of Proceedings held on January 20, 2016, before Judge Scanlon. Court Transcriber: TypeWrite Word Processing Service, Telephone number 718-966-1401. Transcript may be viewed at the court public terminal or purchased through the Court Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER.File redaction request using event "Redaction Request - Transcript" located under "Other Filings - Other Documents". Redaction Request due 2/16/2016. Redacted Transcript Deadline set for 2/26/2016. Release of Transcript Restriction set for 4/25/2016. (Rocco, Christine) (Entered: 01/26/2016)

02/02/2016 71 Letter MOTION for Extension of Time to Complete Discovery by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp.,

02/03/2016 02/05/2016 02/16/2016

Sarasota Gold LLC, Weissman Realty Group LLC. (Attachments: # 1 Exhibit Expert Witness Notices, # 2 Exhibit Fact Witness Notices, # 3 Exhibit Email Correspondence, # 4 Exhibit Withdrawal of Notices, # 5 Exhibit Third Party Subpoenas, # 6 Exhibit HRA Responsive Docs, # 7 Exhibit Dept. of Planning Responsive Docs) (Brent, Jann) (Entered: 02/02/2016)
ORDER: To the extent Plaintiff intends to respond to Defendants' motion at 71 , it must do so by 2/5/2016. Ordered by Magistrate Judge Vera M. Scanlon on 2/3/2016. (Weingarten, Richard) (Entered: 02/03/2016)
72 RESPONSE in Opposition re 71 Letter MOTION for Extension of Time to Complete Discovery filed by The Fortune Society. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Certificate of Service) (Burgess, Margaret) (Entered: 02/05/2016)
ORDER granting in part and denying in part 71 Motion for Extension of Time to Complete Discovery. At 71 , Defendants request a discovery extension in order to permit them to depose two expert witnesses and three fact witnesses. Defendants' motion is granted insofar as they seek to depose Plaintiff's two expert witnesses, but is denied in all other respects.

Fed. R. Civ. P. 16 allows a party to obtain a modification of a scheduling order "only for good cause and with the judge's consent." Fed. R. Civ. P. 16(b)(4). It is the movant's burden to establish good cause. See Parker v. Columbia Pictures Indus., 204 F.3d 326, 340 (2d Cir. 2000); Nairobi Holdings Ltd. v. Brown Bros. Harriman & Co., 02 Civ. 1230 (LMM), 2006 U.S. Dist. LEXIS 54171, at *9 (S.D.N.Y. Aug. 3, 2006). "Whether good cause exists turns on the diligence of the moving party." Holmes v. Grubman, 568 F.3d 329, 335 (2d Cir. 2009) (internal quotations and citations omitted). "With respect to a request to extend discovery, the moving party must show why it could not have completed the necessary discovery within the time frame established under the existing scheduling order." Kintetsu World Express (USA), Inc. v. Johnson Controls Inc., 14 Civ. 4947 (KAM), 2015 U.S. Dist. LEXIS 169190, at *6 (E.D.N.Y. Dec. 17, 2015).

As per the Court's 12/23/2015 Order, depositions of fact witnesses were to be noticed by 12/31/2015, depositions of expert witnesses were to be noticed by 1/22/2016, and all discovery, including depositions, was to be completed by 2/5/2016. Defendants noticed the five requested depositions on 1/29/2016. According to Defendants' counsel, notice was provided at such a late stage because: (1) deposition testimony of their own clients and witnesses provided a sudden need to depose the three fact witnesses; and (2) documents belatedly received via subpoena from third-parties

provided a need to depose Plaintiff's two expert witnesses. Plaintiff counters that the three fact witnesses Defendants seek to depose were identified long ago in Plaintiff's Fed. R. Civ. P. 26(a) disclosures and that the documents just recently received by Defendants are irrelevant to the assertions made by their experts.

Defendants have not shown good cause to allow them to belatedly depose the three fact witnesses. Plaintiff identified these three fact witnesses in its Fed. R. Civ. P. 26(a) disclosures and, to the extent deposition testimony from Defendants or witnesses on their behalf provided some type of amorphous reason to depose these three fact witnesses, Defendants' counsel otherwise knew, or should have known, of this information prior to said depositions. This Court, however, will credit Defendants' counsel's claim that the documents just recently received via subpoena had an effect on their decision to depose Plaintiff's experts, thus triggering good cause to extend the discovery schedule only in that regard.

03/17/2016 03/18/2016

In light of the foregoing, Defendants may depose Plaintiff's two experts by or before 3/11/2016. The parties' briefing schedule, as previously Ordered by the Court on 12/23/2015, is modified as follows: opening summary judgment briefs, including the statement of material facts, must besubmitted to the party in opposition by 4/11/2016. Briefs in opposition to summary judgment must be submitted by 5/9/2016. Reply briefs, if any, must be submitted by 5/23/2016. On the due date prescribed, briefs will be submitted to the party in opposition only. No brief will be filed with the Court until the close of the briefing period on 5/23/2016. At the close of the briefing period, any party who filed affirmatively for summary judgment will file its opening brief, the brief in opposition, and its reply brief. Ordered by Magistrate Judge Vera M. Scanlon on 2/16/2016. (Weingarten, Richard) (Entered: 02/16/2016)
73 First MOTION for Leave to File Excess Pages of ten in total on proposed discovery motion by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC. (Shanahan, Thomas) (Entered: 03/17/2016)
ORDER granting 73 Motion for Leave to File Excess Pages. Defendants are encouraged to be as succinct as possible in their motion papers. Plaintiffs may oppose with a submission of up to ten pages. No reply permitted. Ordered by Magistrate Judge Vera M. Scanlon on 3/18/2016. (Scanlon, Vera) (Entered: 03/18/2016)

03/18/2016

74 MEMORANDUM in Opposition re Order on Motion for Leave to File Excess Pages, , REPLY in Opposition , RESPONSE in Opposition re 73 First MOTION for Leave to File Excess Pages of ten in total on

proposed discovery motion filed by The Fortune Society. (Attachments: # 1 Certificate of Service) (Downer, Ryan) (Entered: 03/18/2016)

03/18/2016

75 First MOTION to Take Deposition from Dr. Parnell, John and Jane Doe's, agents of Relman who participated in the creation of the Spreadsheet at Issue in the Motion by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC. (Attachments: # 1 Exhibit Good-Faith Attempt to Resolve Dispute, # 2 Exhibit Prior Ordering Permitting Depositions of Experts, # 3 Exhibit Deposition Transcript of Dr. Parnell, # 4 Exhibit Supplemental Report of Dr. Parnell, # 5 Exhibit Spread Sheet - Parnell Exhibit D at Deposition of Dr. Parnell, # 6 Exhibit Email of Attorney Downer Transmitting Dr. Parnell's Report and the Spreadsheet, # 7 Exhibit Sandcastle Application for Prospective Tenants, # 8 Exhibit Email of Attorney Cole Correcting Mathematical Error by Dr. Parnell, # 9 Exhibit Census Block Data for Sandcastle Provided Pursuant to Subpoena by NYC Planning Department) (Shanahan, Thomas) (Entered: 03/18/2016)

03/18/2016 76 Letter MOTION for Extension of Time to File Response/Reply by The Fortune Society. (Burgess, Margaret) (Entered: 03/18/2016)

03/18/2016

ORDER granting 76 Motion for Extension of Time to File Response/Reply. Ordered by Magistrate Judge Vera M. Scanlon on 3/18/2016. (Scanlon, Vera) (Entered: 03/18/2016)

03/21/2016

SCHEDULING ORDER: An in person Status Conference is set for 4/15/2016 at 12:00 PM in Courtroom 504 North before Magistrate Judge Vera M. Scanlon. Ordered by Magistrate Judge Vera M. Scanlon on 3/21/2016. (Quinlan, Krista) (Entered: 03/21/2016)

03/24/2016

77 MEMORANDUM in Opposition re 75 First MOTION to Take Deposition from Dr. Parnell, John and Jane Doe's, agents of Relman who participated in the creation of the Spreadsheet at Issue in the Motion filed by The Fortune Society. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Certificate of Service Certificate of Service) (Downer, Ryan) (Entered: 03/24/2016)

03/25/2016

78 Consent MOTION to Adjourn Conference and Advance Conference Date by The Fortune Society. (Attachments: # 1 Certificate of Service) (Downer, Ryan) (Entered: 03/25/2016)

03/25/2016

79 EXHIBIT 1 Corrected by The Fortune Society. Related document: 77 Memorandum in Opposition, filed by The Fortune Society. (Attachments: # 1 Certificate of Service) (Downer, Ryan) (Entered: 03/25/2016)

03/25/2016

ORDER granting 78 Motion to Adjourn Conference. The in person status conference previously scheduled for 4/15/2015 is rescheduled for 4/4/2016 at 4:30 p.m. The parties should be prepared to discuss the motion at 75 as well as the possibility of altering the parties' current dispositive motion briefing schedule. (Status Conference set for 4/4/2016 04:30 PM before Magistrate Judge Vera M. Scanlon.) Ordered by Magistrate Judge Vera M. Scanlon on 3/25/2016. (Weingarten, Richard) (Entered: 03/25/2016)

04/04/2016

Minute Entry for proceedings held before Magistrate Judge Vera M. Scanlon:Status Conference held on 4/4/2016 in Room 504 North. John Relman appearing for Plaintiff. Ryan Downer, Richard Walsh, Jann Brent and Thomas Shanahan appearing for Defendants. See separate docket entry for Order issuing from this proceeding. (Tape #4:30-6:05.) (Gillespie, Saudia) (Entered: 04/25/2016)

04/07/2016

80 First MOTION to Adjourn Conference and to Adjourn Submissions on Dispositive Motions currently due on April 11, 2016 by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC. (Shanahan, Thomas) (Entered: 04/07/2016)

04/08/2016

ORDER granting in part and denying in part 80 Motion to Adjourn Conference. The conference previously scheduled for 4/15/2016 was already rescheduled for, and held on, 4/4/2016, see 3/25/2016 Order, and thus, there is no currently scheduled conference to adjourn. The parties' summary judgment briefing schedule as previously ordered, see 2/16/2016 Order, is held in abeyance pending a decision on Defendants' motion at 75 . Ordered by Magistrate Judge Vera M. Scanlon on 4/8/2016. (Weingarten, Richard) (Entered: 04/08/2016)

04/25/2016

81 ORDER granting in part and denying in part 75 Motion to Take Deposition. Ordered by Magistrate Judge Vera M. Scanlon on 4/25/2016. (Quinlan, Krista) (Entered: 04/25/2016)

06/01/2016

ORDER: The Court previously ordered dispositive briefing to commence by 6/24/16. The parties are to file a joint letter with their proposed complete briefing schedule by 6/8/16. If the parties would like a referral to Court-annexed mediation, they should so request a referral by letter. Ordered by Magistrate Judge Vera M. Scanlon on 6/1/2016. (Scanlon, Vera) (Entered: 06/01/2016)

06/06/2016 82 Joint MOTION for Extension of Time to File Summary Judgment Briefs by The Fortune Society. (Cobb, Jia) (Entered: 06/06/2016)

06/07/2016

ORDER granting 82 Motion for Extension of Time to File. The briefing schedule proposed by the Parties in 82 is So-Ordered. Opening briefs

must be served by 7/15/2016; oppositions must be served by 8/15/2016; reply briefs must be served by 9/6/2016. At the close of the briefing period, any party who filed affirmatively for summary judgment will file its opening brief, the brief in opposition, and its reply brief by 9/7/2016. In addition, any party who filed affirmatively for summary judgment must provide the Court with a courtesy copy of the bundled motion papers as soon as practicable after filing. Ordered by Magistrate Judge Vera M. Scanlon on 6/7/2016. (Weingarten, Richard) (Entered: 06/07/2016)

07/05/2016

83 Joint MOTION for Leave to File Excess Pages by The Fortune Society. (Attachments: # 1 Certificate of Service) (Downer, Ryan) (Entered: 07/05/2016)

07/06/2016

ORDER granting in part and denying in part 83 Motion for Leave to File Excess Pages. The Parties may file opening briefs of up to 35 pages. Ordered by Magistrate Judge Vera M. Scanlon on 7/6/2016. (Weingarten, Richard) (Entered: 07/06/2016)

07/27/2016

84 First MOTION to Strike Improper Portions of Plaintiff's Notice of Motion, Entire Defective Rule 56.1 Statement and Summary judgment Brief by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC. (Attachments: # 1 Exhibit Email to Plaintiff's Counsel Requesting Voluntarily Withdrawal of Plaintiff's Improper Notice of Motion, Rule 56.1 Statement and Portions of Summary Judgment Brief, # 2 Exhibit Email of Plaintiff's Counsel Rejecting Request by Defendants, # 3 Exhibit Improper Plaintiff's Notice of Motion of Plaintiff's Counsel, # 4 Exhibit Improper Plaintiff's Rule 56.1 Statement, # 5 Exhibit Plaintiff's Summary Judgement Brief with Citations to Defective and Fatally Flawed Rule 56.1 Statement) (Shanahan, Thomas) (Entered: 07/27/2016)

07/28/2016

85 REPLY in Opposition to Defendants' Motion to Strike Plaintiff's Opening Summary Judgment Papers filed by The Fortune Society. (Attachments: # 1 Exhibit Email correspondence) (Schlactus, Glenn) (Entered: 07/28/2016)

07/29/2016

86 REPLY to Response to Motion re 84 First MOTION to Strike Improper Portions of Plaintiff's Notice of Motion, Entire Defective Rule 56.1 Statement and Summary judgment Brief filed by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC. (Attachments: # 1 Exhibit Excerpt, Rose Campbell Deposition) (Shanahan, Thomas) (Entered: 07/29/2016)

07/29/2016

87 MOTION to Strike 86 Reply to Response to Motion, by The Fortune Society. (Attachments: # 1 Exhibit 1, # 2 Certificate of Service) (Schlactus, Glenn) (Entered: 07/29/2016)

07/29/2016

SCHEDULING ORDER: A telephone conference is scheduled for 8/1/2016 at 4:30 p.m. in order to discuss the motion at 84 . All counsel are directed to thoroughly review the entirety of Local Rule 56.1 prior to the conference. Counsel are to confirm amongst themselves that all parties are aware of the conference. Defendants' counsel is to initiate a conference call with counsel then call Chambers at (718) 613-2300 at the designated time. Telephone Conference set for 8/1/2016 04:30 PM before Magistrate Judge Vera M. Scanlon. Ordered by Magistrate Judge Vera M. Scanlon on 7/29/2016. (Weingarten, Richard) (Entered: 07/29/2016)

08/01/2016

Minute Entry for proceedings held before Magistrate Judge Vera M. Scanlon:Telephone Conference held on 8/1/2016 in Room 504 North. Glenn Schlactus, Margaret Burgess and Ryan Downer appearing for Plaintiff. Richard Walsh and Thomas Shanahan appearing for Defendants. See separate docket entry for Order issuing from this proceeding (Tape #4:40-5:07.) (Gillespie, Saudia) Modified attorney appearances on 8/5/2016 (Gillespie, Saudia). (Entered: 08/04/2016)

08/01/2016

89 ORDER: As discussed during the 8/1/2016 conference (see attached order for additional detail and deadlines), 84 & 87 Motion to Strike is DENIED. The revised briefing schedule is Motion: 8/12/2016, Opposition: 9/7/2016, Reply: 9/21/2016 and filing: 9/22/2016. Ordered by Magistrate Judge Vera M. Scanlon on 8/1/2016. (Gillespie, Saudia) (Entered: 08/04/2016)

08/04/2016

88 TRANSCRIPT of Proceedings held on August 1, 2016, before Judge SCANLON. Court Reporter/Transcriber ARIA SERVICES, INC., Telephone number 845-260-1377. Email address: aria@leinen.net. Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER.File redaction request using event "Redaction Request Transcript" located under "Other Filings - Other Documents". Redaction Request due 8/25/2016. Redacted Transcript Deadline set for 9/5/2016. Release of Transcript Restriction set for 11/2/2016. (Hong, Loan) (Entered: 08/04/2016)

08/22/2016

90 Joint MOTION for Extension of Time to File Response/Reply to Motions for Summary Judgement, Joint MOTION for Leave to File Excess Pages for Summary Judgment Opposition Briefs by The Fortune Society. (Schlactus, Glenn) (Entered: 08/22/2016)

08/23/2016

ORDER granting 90 Motion for Extension of Time to File Response/Reply; granting 90 Motion for Leave to File Excess Pages. The revised briefing schedule is as follows: opposition papers to served by 9/14/2016; reply papers to be served by 9/28/2016; and all motion papers

to be filed by 9/30/2016. In addition, opposition papers may be up to 35 pages in length. Ordered by Magistrate Judge Vera M. Scanlon on 8/23/2016. (Weingarten, Richard) (Entered: 08/23/2016)

08/29/2016

91 TRANSCRIPT of Proceedings held on April 4, 2016, before Judge SCANLON. Court Reporter/Transcriber TypeWrite Word Processing Service, Telephone number 718-966-1401. Email address: transcripts@typewp.com. Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER.File redaction request using event "Redaction Request - Transcript" located under "Other Filings - Other Documents". Redaction Request due 9/19/2016. Redacted Transcript Deadline set for 9/29/2016. Release of Transcript Restriction set for 11/28/2016. (Hong, Loan) (Entered: 08/29/2016)

09/01/2016

92 Letter of Thomas D. Shanahan Advising the Court of Decision of the Northern District of Texas by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC (Attachments: # 1 Exhibit Dec. of Northern District of Texas dated August 26, 2016) (Shanahan, Thomas) (Entered: 09/01/2016)

09/15/2016

93 MOTION to Withdraw as Attorney Margaret Burgess by The Fortune Society. (Attachments: # 1 Certificate of Service) (Downer, Ryan) (Entered: 09/15/2016)

09/16/2016

ORDER granting 93 Motion to Withdraw as Attorney. As Mr. Downer notes at 93 , this does not constitute a change in representation. Attorney Margaret Burgess terminated. Ordered by Magistrate Judge Vera M. Scanlon on 9/16/2016. (Quinlan, Krista) (Entered: 09/16/2016)

09/30/2016

94 MOTION for Partial Summary Judgment and to Exclude Expert Reports by The Fortune Society. (Attachments: # 1 Memorandum in Support, # 2 Rule 56.1 Statement of Material Facts, # 3 Declaration of Ryan C. Downer, # 4 Exhibit Exs. 1-7, # 5 Exhibit Exs. 8-17, # 6 Exhibit Ex. 18, # 7 Exhibit Exs. 19-21, # 8 Exhibit Ex. 22, # 9 Exhibit Ex. 23, # 10 Exhibit Ex. 24, # 11 Exhibit Exs. 25-26, # 12 Exhibit Ex. 27, # 13 Exhibit Exs. 28-57, # 14 Exhibit Ex. 58, # 15 Exhibit Exs. 59-77, # 16 Exhibit Exs. 78-83, # 17 Exhibit Exs. 84-86, # 18 Exhibit Exs. 8790, # 19 Certificate of Service) (Downer, Ryan). (Entered: 09/30/2016)

09/30/2016

95 RESPONSE in Opposition re 94 MOTION for Partial Summary Judgment and to Exclude Expert Reports (Defendants) filed by The Fortune Society. (Attachments: # 1 Rule 56.1 Statement Response to Plaintiff's Rule 56.1 Statement) (Downer, Ryan) (Entered: 09/30/2016)

09/30/2016

96 REPLY in Support re 95 Response in Opposition to Motion, for Partial Summary Judgment and to Exclude Expert Reports filed by The Fortune Society. (Attachments: # 1 Declaration of Ryan C. Downer, # 2 Certificate of Service) (Downer, Ryan) (Entered: 09/30/2016)

09/30/2016

97 MOTION for Summary Judgment (Defendants) by The Fortune Society. (Attachments: # 1 Memorandum in Support, # 2 Rule 56.1 Statement of Material Facts, # 3 Declaration of Thomas D. Shanahan, # 4 Exhibit A, # 5 Exhibit B, # 6 Exhibit C, # 7 Exhibit D, # 8 Exhibit E, # 9 Exhibit F, # 10 Exhibit G, # 11 Exhibit H, # 12 Exhibit I, # 13 Exhibit J, # 14 Exhibit K, # 15 Exhibit L, # 16 Exhibit M, # 17 Exhibit N, # 18 Exhibit O, # 19 Exhibit P, # 20 Exhibit Q, # 21 Exhibit R, # 22 Exhibit S, # 23 Exhibit T, # 24 Exhibit U, # 25 Exhibit V, # 26 Exhibit V, # 27 Exhibit W, # 28 Exhibit X, # 29 Exhibit Y, # 30 Exhibit Z, # 31 Exhibit AA, # 32 Exhibit CC, # 33 Exhibit DD, # 34 Exhibit EE, # 35 Exhibit GG, # 36 Exhibit HH, # 37 Certificate of Service) (Downer, Ryan) (Entered: 09/30/2016)

09/30/2016

98 RESPONSE in Opposition re 97 MOTION for Summary Judgment filed by The Fortune Society. (Attachments: # 1 Rule 56.1 Statement of Material Facts, # 2 Rule 56.1 Statement in Response to Defendants' Statement of Material Facts, # 3 Declaration of Ryan C. Downer, # 4 Certificate of Service) (Downer, Ryan) (Entered: 09/30/2016)

09/30/2016

99 REPLY in Support re 98 Response in Opposition to Motion, (Defendants) filed by The Fortune Society. (Attachments: # 1 Declaration of Thomas D. Shanahan, # 2 Certificate of Service) (Downer, Ryan) (Entered: 09/30/2016)

09/30/2016 100 Letter Regarding Summary Judgment Motions by The Fortune Society (Downer, Ryan) (Entered: 09/30/2016)

10/07/2016

101 Consent MOTION to Amend/Correct/Supplement Defendant's Reply Brief and Exhibits by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC. (Attachments: # 1 Memorandum in Support Modified Reply Memorandum of Defendants, # 2 Exhibit Exhibit CC, # 3 Exhibit Exhibit DD, # 4 Exhibit Exhibit JJ, # 5 Exhibit Exhibit KK) (Shanahan, Thomas) (Entered: 10/07/2016)

10/12/2016

ORDER granting 101 Motion to Amend/Correct/Supplement. The record is deemed amended. Ordered by Magistrate Judge Vera M. Scanlon on 10/12/2016. (Stackhouse, Noreen) (Entered: 10/12/2016)

10/18/2016 102 Amicus Curiae APPEARANCE entered by Michael J. Goldberger on behalf of United States of America (Goldberger, Michael) (Entered: 10/18/2016)

10/20/2016

103 First MOTION to Amend/Correct/Supplement in Response to Statement of Interest of the United States of America by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC. (Shanahan, Thomas) (Entered: 10/20/2016)

10/21/2016

104 RESPONSE in Opposition re 103 First MOTION to Amend/Correct/Supplement in Response to Statement of Interest of the United States of America filed by The Fortune Society. (Attachments: # 1 Certificate of Service) (Downer, Ryan) (Entered: 10/21/2016)

10/24/2016

ORDER granting 103 Motion to Amend/Correct/Supplement. The Parties may respond to the Statement of Interest filed by the United States of America on or before 10/31/2016. The Parties' responses shall be limited to five double-spaced pages. Ordered by Magistrate Judge Vera M. Scanlon on 10/24/2016. (Stackhouse, Noreen) (Entered: 10/24/2016)

10/31/2016 105 REPLY in Support re 102 Amicus Curiae Appearance of the United States of America filed by The Fortune Society. (Attachments: # 1 Certificate of Service) (Downer, Ryan) (Entered: 10/31/2016)

11/01/2016

106 REPLY in Opposition to Amicus of the United States of America filed by All Defendants. (Attachments: # 1 Declaration Declaration of Service, # 2 Exhibit Washington Post Article, # 3 Exhibit Texas District Court Decision, # 4 Exhibit Accepted Applicants with Criminal Records, # 5 Exhibit Partial List of Rejected Applicants, # 6 Exhibit Spreadsheet Containing Rejected Applicants) (Shanahan, Thomas) (Entered: 11/01/2016)

01/25/2017 107 NOTICE of Appearance by Larry R. Martinez on behalf of All Defendants (aty to be noticed) (Martinez, Larry) (Entered: 01/25/2017)

01/25/2017 108 NOTICE of Appearance by Loretta M. Gastwirth on behalf of All Defendants (aty to be noticed) (Gastwirth, Loretta) (Entered: 01/25/2017)

01/25/2017 109 NOTICE of Appearance by Stephanie Marie Suarez on behalf of All Defendants (aty to be noticed) (Suarez, Stephanie) (Entered: 01/25/2017)

01/25/2017

110 MOTION to Substitute Attorney Meltzer, Lippe, Goldstein & Breitstone, LLP and its attorneys, Loretta M. Gastwirth, Larry R. Martinez and Stephanie Suarez in place of Horing, Welikson & Rosen, P.C. and its attorneys, Richard T. Walsh and Jann S. Brent by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC. (Gastwirth, Loretta) (Entered: 01/25/2017)

01/25/2017 111 Letter MOTION for pre motion conference re 30 Amended Complaint by E & M Associates LLC, Sandcastle Towers Housing Development Fund

Corp., Sarasota Gold LLC, Weissman Realty Group LLC. (Gastwirth, Loretta) (Entered: 01/25/2017)

01/26/2017

ORDER granting 110 Motion to Substitute Attorney. Attorneys Jann S. Brent and Richard T. Walsh terminated. Ordered by Magistrate Judge Vera M. Scanlon on 1/26/2017. (Stackhouse, Noreen) (Entered: 01/26/2017)

01/26/2017

ORDER denying 111 Motion for Pre Motion Conference. This case has been litigated for over two years and there is a fully-briefed summary judgment motion pending. The Parties may supplement their summary judgment briefing in accordance with the following schedule: Defendants are to file any supplemental briefing by 2/9/2017; Plaintiffs are to respond by 3/2/2017; and Defendants may file a reply, if any, by 3/9/2017. Interested Party United States of America may file a supplemental Statement of Interest by 3/2/2017. Ordered by Magistrate Judge Vera M. Scanlon on 1/26/2017. (Stackhouse, Noreen) (Entered: 01/26/2017)

02/09/2017

112 Letter Confirming Timely Service of Supplemental Brief by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC (Gastwirth, Loretta) (Entered: 02/09/2017)

03/03/2017 113 Letter Confirming Timely Service of Brief in Opposition to Defendants' Supplemental Brief by The Fortune Society (Downer, Ryan) (Entered: 03/03/2017)

03/06/2017

114 Letter MOTION for Extension of Time to File Response/Reply on consent requesting an extension of time to complete the supplemental briefing pursuant to the Order dated January 26, 2017 by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC. (Suarez, Stephanie) (Entered: 03/06/2017)

03/07/2017

ORDER granting 114 Motion for Extension of Time to File Response/Reply. Defendants must file supplemental briefing on or before 3/16/2017. Ordered by Magistrate Judge Vera M. Scanlon on 3/7/2017. (Gersovitz, Ryan) (Entered: 03/07/2017)

03/16/2017

115 REPLY in Support re 97 MOTION for Summary Judgment (Defendants) Defendants' Supplemental Brief in Support of Dismissal of the Action for Lack of Subject Matter Jurisdiction filed by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC. (Suarez, Stephanie) (Entered: 03/16/2017)

03/16/2017

116 REPLY in Opposition re 115 Reply in Support, Plaintiffs Brief in Opposition to Defendants Supplemental Brief in Support of Dismissal of the Action for Lack of Subject Matter Jurisdiction filed by All Defendants. (Attachments: # 1 Declaration of Ryan Downer, Esq., # 2 Exhibit 91-Supplemental Declaration of Joanne Page, # 3 Exhibit 92Second Supplemental Declaration of Kevin Carter, # 4 Exhibit 93-Email Exchange bearing Bates-stamps PL000843-44, # 5 Exhibit 94-Lease Agreements bearing Bates-stamps SJ0300-15, # 6 Exhibit 95-Email Exchange bearing Bates-stamps SJ0316-24, # 7 Exhibit 96-Lease Agreements of Fortune clients, # 8 Exhibit 97-Documents related to Fortune brokerage fees, # 9 Exhibit 98-Documents related to salary and expenses of Fortune employee Joseph Blumberg, # 10 Exhibit 99-New Tenant Roster bearing Bates-stamps SJ0382-88, # 11 Exhibit 100Defendants First Set of Interrogatories to Plaintiff) (Suarez, Stephanie) (Modified: Attachment # 6 replaced on 3/17/2017.) (Entered: 03/16/2017)

03/16/2017

117 REPLY in Support re 115 Reply in Support, Defendants Reply Supplemental Brief in Further Support of Dismissal of the Action for Lack of Subject Matter Jurisdiction filed by All Defendants. (Attachments: # 1 Reply Declaration of Loretta Gastwirth) (Suarez, Stephanie) (Entered: 03/16/2017)

03/16/2017

118 Letter confirming service of courtesy copies by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC (Suarez, Stephanie) (Entered: 03/16/2017)

03/17/2017

119 REPLY in Support re 115 Reply in Support, Defendants Reply Supplemental Brief in Further Support of Dismissal of the Action for Lack of Subject Matter Jurisdiction filed by All Defendants. (Attachments: # 1 Declaration of Loretta Gastwirth) (Suarez, Stephanie) (Entered: 03/17/2017)

03/21/2017 120 MOTION for Leave to File Sur-Reply in Response to Defendants' Reply Supplemental Brief, Dkt. 119 by The Fortune Society. (Attachments: # 1 Certificate of Service) (Downer, Ryan) (Entered: 03/21/2017)

03/22/2017

121 REPLY in Opposition re 120 MOTION for Leave to File Sur-Reply in Response to Defendants' Reply Supplemental Brief, Dkt. 119 filed by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC. (Suarez, Stephanie) (Entered: 03/22/2017)

03/27/2017

ORDER granting 120 Motion for Leave to File. Plaintiff is granted leave to file a sur-reply in response to Defendants' Reply Supplemental Brief, not to exceed 10 pages, by 4/7/2017. Defendants' request to file a

response to Plaintiff's sur-reply is denied without prejudice to renewal once Plaintiff's sur-reply has been filed. Ordered by Magistrate Judge Vera M. Scanlon on 3/27/2017. (Stackhouse, Noreen) (Entered: 03/27/2017)

04/07/2017

122 REPLY in Opposition re 115 Reply in Support, Plaintiff's Sur-Reply in Opposition to Defendants' Supplemental Brief in Support of Dismissal of the Action for Lack of Subject Matter Jurisdiction filed by The Fortune Society. (Downer, Ryan) (Entered: 04/07/2017)

04/12/2017

123 Letter MOTION to Strike 122 Reply in Opposition, or, in the alternative for leave to file a response by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC. (Attachments: # 1 Exhibit A- March 22, 2017 Correspondence) (Gastwirth, Loretta) (Entered: 04/12/2017)

04/14/2017

124 RESPONSE in Opposition re 123 Letter MOTION to Strike 122 Reply in Opposition, or, in the alternative for leave to file a response filed by The Fortune Society. (Attachments: # 1 Certificate of Service) (Downer, Ryan) (Entered: 04/14/2017)

04/21/2017

ORDER granting in part and denying in part 123 Motion to Strike. Defendants' request to strike Plaintiff's sur-reply is denied. Defendants are granted leave to file a response to Plaintiff's sur-reply, limited to the 24 cases in Plaintiff's sur-reply not previously cited, by 5/1/2017. As set forth in Defendants' request at 123 , Defendants' response will be no longer than 10 pages. Ordered by Magistrate Judge Vera M. Scanlon on 4/21/2017. (Stackhouse, Noreen) (Entered: 04/21/2017)

05/01/2017

125 REPLY in Opposition re 122 Reply in Opposition, Defendants' Brief in Response to Plaintiff's Sur-Reply Brief Submitted in Further Support of Dismissal of the Action for Lack of Subject Matter Jurisdiction filed by All Defendants. (Gastwirth, Loretta) (Entered: 05/01/2017)

08/24/2017 126 NOTICE by The Fortune Society re 116 Reply in Opposition,,,, of Supplemental Authority (Attachments: # 1 Exhibit A) (Downer, Ryan) (Entered: 08/24/2017)

08/29/2017

127 Letter MOTION to Strike 126 Notice(Other) by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC. (Gastwirth, Loretta) (Entered: 08/29/2017)

08/29/2017 128 RESPONSE in Opposition re 127 Letter MOTION to Strike 126 Notice(Other) filed by The Fortune Society. (Downer, Ryan) (Entered: 08/29/2017)

08/31/2017

ORDER denying 127 Motion to Strike. Defendants are granted leave to file a response to Plaintiff's submission at 126 , not to exceed 3 pages, by 9/8/2017. Ordered by Magistrate Judge Vera M. Scanlon on 8/31/2017. (Stackhouse, Noreen) (Entered: 08/31/2017)

09/08/2017

129 REPLY in Opposition re 126 Notice(Other) Defendants' Brief in Response to Plaintiff's Notice of Supplemental Authority filed by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC. (Gastwirth, Loretta) (Entered: 09/08/2017)

03/19/2018

130 ORDER: Defendants are ordered to supplement their responses to Pl.'s 56.1 Stmt. to comply with Local Rule 56.1(d) by March 28, 2018 at noon. Ordered by Magistrate Judge Vera M. Scanlon on 3/16/2018. (Pearce, Jessica) Modified on 3/20/2018 (Pearce, Jessica). (Entered: 03/19/2018)

03/28/2018

131 RULE 56.1 STATEMENT re 130 Order, Amended Response to Plaintiff's Revised Rule 56.1 Statement filed by All Defendants. (Attachments: # 1 Exhibit Redline Reflecting Changes Made) (Gastwirth, Loretta) (Entered: 03/28/2018)

04/04/2018

132 REPLY in Support re 94 MOTION for Partial Summary Judgment and to Exclude Expert Reports filed by The Fortune Society. (Attachments: # 1 Declaration of Ryan C. Downer, # 2 Exhibit 101, # 3 Exhibit 102, # 4 Exhibit 103) (Downer, Ryan) (Entered: 04/04/2018)

09/14/2018 133 NOTICE of Appearance by Sasha Minh Samberg-Champion on behalf of All Plaintiffs (aty to be noticed) (Attachments: # 1 Certificate of Service) (Samberg-Champion, Sasha) (Entered: 09/14/2018)

09/14/2018 134 MOTION to Withdraw as Attorney by The Fortune Society. (Attachments: # 1 Certificate of Service) (Downer, Ryan) (Entered: 09/14/2018)

09/17/2018

ORDER granting 134 Motion to Withdraw as Attorney. Attorney Ryan Chasce Downer terminated. Ordered by Magistrate Judge Vera M. Scanlon on 9/17/2018. (Quinlan, Krista) (Entered: 09/17/2018)

11/02/2018 135 Letter Regarding Dispositive Motions by The Fortune Society (Relman, John) (Entered: 11/02/2018)

01/11/2019 136 Letter MOTION for Hearing Status Conference by The Fortune Society. (Schlactus, Glenn) (Entered: 01/11/2019)

02/01/2019 137 NOTICE by The Fortune Society re 97 MOTION for Summary Judgment (Defendants), 94 MOTION for Partial Summary Judgment and to Exclude Expert Reports , NOTICE OF SUPPLEMENTAL

AUTHORITY (Attachments: # 1 Exhibit) (Schlactus, Glenn) (Entered: 02/01/2019)

02/04/2019

138 Letter MOTION to Strike 137 Notice(Other), by E & M Associates LLC, Sandcastle Towers Housing Development Fund Corp., Sarasota Gold LLC, Weissman Realty Group LLC. (Gastwirth, Loretta) (Entered: 02/04/2019)

02/05/2019 139 RESPONSE in Opposition re 138 Letter MOTION to Strike 137 Notice(Other), filed by The Fortune Society. (Schlactus, Glenn) (Entered: 02/05/2019)

03/01/2019

ORDER denying 138 Motion to Strike. The Court will consider the submission at 136 to the extent the proposed authority is relevant. Ordered by Magistrate Judge Vera M. Scanlon on 3/1/2019. (Quinlan, Krista) (Entered: 03/01/2019)

06/11/2019 140 Letter MOTION for Hearing (Status Conference) by The Fortune Society. (Schlactus, Glenn) (Entered: 06/11/2019)

06/12/2019

ORDER granting 136 and 140 Motions for Hearing. A Status Conference is set for 8/20/2019 at 3:00 PM in Courtroom 13A South before Magistrate Judge Vera M. Scanlon. Ordered by Magistrate Judge Vera M. Scanlon on 6/12/2019. (Shanies, Rachel) (Entered: 06/12/2019)

07/03/2019

141 ORDER denying 94 Plaintiff's Motion for Partial Summary Judgment and granting in part and denying in part 97 Defendants' Motion for Summary Judgment. For the reasons set forth in the attached Order, Plaintiff's motion for partial summary judgment is denied; Defendants' cross-motion for summary judgment is denied with respect to Plaintiff's disparate impact claim and granted with respect to Plaintiff's disparate treatment claim; Defendants' motion for dismissal based on lack of standing is denied. Defendants' motion to exclude the testimony of Dr. Parnell is denied, and Plaintiff's motion to exclude the testimony of Mr. Welsch is denied as moot, but may be renewed without prejudice for pre-trial motions. At the upcoming Status Conference, the Parties should be prepared to discuss the underdeveloped areas referenced in the attached Order, a timeline for submission of a joint pre-trial order, trial scheduling and any potential for settlement. The Parties are to read and consider the Court's alternative dispute resolution program information available on the Court's website and discuss whether they wish the Court to provide a referral. The program information is available at: https://www.nyed.uscourts.gov/alternative-dispute-resolution. Ordered by Magistrate Judge Vera M. Scanlon on 7/3/2019. (Shanies, Rachel) (Entered: 07/03/2019)

08/20/2019

Minute Entry for proceedings held before Magistrate Judge Vera M. Scanlon:Status Conference held on 8/20/2019 in Courtroom 13A South. Glenn Schlactus and John Relman appearing for Plaintiff. Loretta Gastwirth appearing for Defendants. See separate docket entry for Order issuing from this proceeding. (FTR Log #3:25-4:18.) (Quinlan, Krista) (Entered: 08/20/2019)

08/20/2019

142 SCHEDULING ORDER: As discussed during the 8/20/2019 conference (see attached order for additional detail and deadlines), On or before 9/27/2019, the Parties will file a joint status report letter. The Court will set a date to review the JPTO. Counsel are engaged in settlement discussions. Counsel will update the Court by 9/27/2019. Trial to start on 2/18/2020 is estimated to last two weeks. By 11/15/2019, Plaintiff/Defendant to supplement the record as to the outstanding underdeveloped issues. By 12/13/2019, counsel to either move in limine or conduct agreed upon discovery. By 1/17/2020, counsel will submit a JPTO with motions in limine. By 1/31/2020, proposed voir dire and draft jury instructions. Counsel will confer to confirm whether injunctive relief is in play after the sale of Sandcastle in 2017. Ordered by Magistrate Judge Vera M. Scanlon on 8/20/2019. (Quinlan, Krista) (Entered: 08/20/2019)

09/09/2019

143 TRANSCRIPT of Proceedings held on August 20, 2019, before Judge Scanlon. Court Transcriber: Typewrite Word Processing Service, Telephone number 518-581-8973. Email address: transcripts@typewp.com. Transcript may be viewed at the court public terminal or purchased through the Court Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER.File redaction request using event "Redaction Request Transcript" located under "Other Filings - Other Documents". Redaction Request due 9/30/2019. Redacted Transcript Deadline set for 10/10/2019. Release of Transcript Restriction set for 12/9/2019. (Rocco, Christine) (Entered: 09/09/2019)

09/27/2019 144 STATUS REPORT (Joint Status Letter) by The Fortune Society (Schlactus, Glenn) (Entered: 09/27/2019)

10/02/2019

STATUS REPORT ORDER: On or before 10/16/2019, the Parties shall file a joint status report letter. Ordered by Magistrate Judge Vera M. Scanlon on 10/2/2019. (Shanies, Rachel) (Entered: 10/02/2019)

10/11/2019 145 STIPULATION of Dismissal (Joint) by The Fortune Society (Schlactus, Glenn) (Entered: 10/11/2019)

10/16/2019 146 STATUS REPORT (Joint Status Letter) by The Fortune Society (Schlactus, Glenn) (Entered: 10/16/2019)

10/17/2019

The Stipulation of dismissal at 145 is so ordered. Ordered by Magistrate Judge Vera M. Scanlon on 10/17/2019. (Quinlan, Krista) (Entered: 10/17/2019)