1 17-2867 Felicia Palmer v. Fannie Mae 

### UNITED STATES COURT OF APPEALS FOR THE SECO ND CIRCUIT SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROC EDURE 32.1 AND THIS COURT = S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMEN T FILED WITH THIS CO URT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATA BASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPR ESENTED BY COUNSEL. At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Fole y Square, in the City of New York, on the 7 th day of November, two thousand eighteen.
Present: J OHN M. W ALKER , J R

. G UIDO C ALABRESI , D EBRA A NN L IVINGSTON Circuit Judges ,

_____________________________________ F ELICIA P ALMER , FKA F ELICIA D UDLEY , Plaintiff-Appellant , v. 17-2867
F ANNIE M AE , A/K/A F EDERAL N ATIONAL M ORTGAGE A SSOCIATION , Defendant-Appellee

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_____________________________________ For Plaintiff-Appellant: J ESSICA E NGLE , Rule 46.1(e) Law Student, (Michael Martin, Ian Weinstein, on the brief ) Lincoln Square Legal Services, Inc., Fordham Law School, New York, NY For Defendant-Appellee: J OHN A. D I C ARO , Shapiro DiCaro & Barak, LLC, Rochester, NY2 Appeal from a judgment of the United States Di strict Court for the Eastern District of New York (Bianco, J .). UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED in part and VACATED in part. Plaintiff-Appellant Felicia Palmer appeals fr om the July 28, 2017 decision and order of the district court dismissing her sec ond amended complaint (“Palmer’s complaint”) with prejudice for failure to state a claim. Palmer’s complaint alleges that the defendant, the Federal National Mortgage Association (“Fannie Mae”), violated the Fair Housing Act of 1968 (“FHA”), 42 U.S.C. §3601 et seq ., in rejecting her offers to purchase a property located in Amityville, New York. We assume the parties’ familiarity with the underlying facts, the proc edural history of the case, and the issues on appeal. “We review the grant of a moti on to dismiss under Rule 12(b)(6) de novo , construing the complaint liberally, accepting all factual allegati ons in the complaint as true, and drawing all reasonable inferences in the plaintiff's favor.” Elias v. Rolling Stone LLC , 872 F.3d 97, 104 (2d Cir. 2017) (internal quotations omitted). Palmer’s pro se complaint is “entitled to special solitude” by reading the “pleadings to raise the st rongest arguments that they suggest.” Fowlkes v. Ironworkers Local 40 , 790 F.3d 378, 387 (2d. Cir. 2015). “At the same time, a pro se complaint must allege ‘enough facts to state a claim to relief that is plausible on its face.’” Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “The plausibility standa rd is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibi lity that a defendant has acted unlawfully.” Hayden v. Paterson , 594 F. 3d 150, 161 (2010) (citing Iqbal v. Ashcroft , 556 U.S. 662, 678 (2009)).3 In a disparate-treatment case, such as this one , a “plaintiff must establish that the defendant had a discriminatory intent or motive.” Texas Dep't of Hous. & Cmty. Affairs v. Inclusive Communities Project, Inc ., 135 S. Ct. 2507, 2513 (2015). “Because discriminatory intent is rarely susceptible to direct proof, litigants may make a sensitive inquiry into such circumstantial and direct evidence of intent as may be available.” Hayden , 594 F.3d at 163. A ccordingly, when adjudicating FHA claims, in the absence of “dir ect proof” we apply the burden-shifting standard supplied by the Supreme Court in McDonnell Douglas Corp. v. Green , 411 U.S. 792, 802 (1973). See Boykin v. KeyCorp , 521 F.3d 202, 213 (2d Cir. 2008) (applying McDonnell Douglas to an FHA claim). Pursuant to this framework, once a plaintiff has established a prima facie case of discrimination, the burden shifts to the defendant to assert a legitimate, nondiscriminatory rationale for the challenged decision. See Mitchell v. Shane , 350 F.3d 39, 47 (2d Cir. 2003). At the pleading stage, however, “a pl aintiff is not required to plead a prima facie case under McDonnell Douglas at least as the test was originally formulated, to defeat a motion to dismiss.” Vega v. Hempstead Union Free Sch. Dist. , 801 F.3d 72, 84 (2d Cir. 2015). Instead, a plaintiff can survive a motion to dismiss if the plaintiff can a llege facts that support a plausible claim that the plaintiff was “a member of a protected class,” suffered relevant “adverse” treatment, and “can sustain a minimal burden of showing facts sugg esting an inference of discriminatory motivation.” Littlejohn v. City of New York , 795 F.3d 297, 311 (2d Cir. 2015). 1 In other words, “because a temporary presumption of discriminatory motiv ation is created under the first prong of the

1 Though Littlejohn and its progeny concerned the pleading st andard for employment discrimination claims, Littlejohn addressed the effects of the Supreme Court’s decisions in Twombly and Iqbal on the McDonnell Douglas framework and is thus relevant to the cons ideration of pleading FHA claims, a context in which we utilize this framework. Indeed, Littlejohn and Vega relied on the Supreme Court’s decision in Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002), a decision we have stated “applies with equal force to any claim . . . that the McDonnell Douglas framework covers.” Williams v. N.Y. City Hous. Auth., 458 F.3d 67, 72 (2d Cir. 2006) (applying Swierkiewicz to an FHA claim).4 McDonnell Douglas analysis, a plaintiff need only give pl ausible support to a minimal inference of discriminatory motivati on” at the pleading stage. Vega , 801 F.3d at 84 (internal quotations omitted). Here, we agree with the district court that, at this juncture, Palmer has failed to provide facts that could plausibly support even a minimal inference of disc riminatory motivation. Palmer’s complaint merely raises conclusory allegations that Fannie Mae “discriminated against [her], a pregnant woman,” but fails to offer any facts to support such allegations. See Iqbal , 556 U.S. at 681 (noting that “conclusory” allegations are “not entitled to be assumed true”). Palmer’s complaint alleges that between September and December 2012, a period late in her pregnancy, she made three offers to purchase th e Amityville property for $105,000, $102,000 and $125,000 respectively. Fannie Mae rejected each of Palm er’s three offers, making counteroffers each time of sales prices of over $280,000. Standing alone, however, Fannie Mae’s mere awareness of Palmer’s pregnancy and refusal of Palmer’s o ffers to purchase the property does not provide sufficient support for her allegati on of discriminatory intent. Palmer also appeals the distri ct court’s refusal to grant her leave to amend her complaint on futility grounds. Rule 15(a) of the Federal Rules of Civil Procedure instructs that leave to amend “shall be freely given when justice so requires. ” Fed. R. Civ. P. 15(a). “This relaxed standard applies with particular force to pro se litigants.” Pangburn v. Culbertson , 200 F.3d 65, 70 (2d Cir. 1999). Accordingly, “[a] pro se plaintiff's proposed amended co mplaint should be construed to raise the strongest arguments it suggests.” Grullon v. City of New Haven , 720 F.3d 133, 140 (2d Cir. 2013). “[W]hile ‘futil ity’ is a valid reason for denying a mo tion to amend, this is true only where it is beyond doubt that the plaintiff can prove no set of f acts in support of his amended claims.” Id. (internal quotations omitted). “We review a di strict court’s decision to permit or deny5 leave to amend for abuse of discretion, but we re view the denial of leave to amend based on futility de novo .” Balintulo v. Ford Motor Co. , 796 F.3d 160, 164 (2d Cir. 2015). Here, we agree with Palmer that the district court erred in denying her leave to amend her complaint. Although Palmer has not proffered a formal proposed amended complaint, Palmer has highlighted facts before this Cour t that, if properly pled in an amended complaint, could plausibly support a minimal inference of discrimination. Fo r example, Palmer alleges that Fannie Mae rejected her market rate offers in favor of a lesser offer, and that Fannie Mae changed its negotiating position upon learning of her pregnancy. At the pleading stage, “a retaliatory purpose can be shown indirectly by timi ng: protected activity followed cl osely in time by adverse . . . action.” Vega , 801 F.3d at 90. Similarly, Palmer suggest ed at oral argument that Fannie Mae determined she was not a qualified buyer on account of her pregnancy, perhaps concluding that her relationship with her then-fiancé was more serious or lasting because she was pregnant. Moreover, to make out a case of discrimination of th is sort, a plaintiff may not need to prove that her protected status was a but-for cause of th e adverse action she suffered, but only a motivating factor. See, e.g. , id. at 86; MHANY Management Inc. v. Incor porated Village of Garden City , 985 F. Supp. 2d 390, 420-423 (E.D.N.Y. 2013) . Construing Palmer’s propos ed changes to “raise the strongest arguments” they suggest, Grullon , 720 F.3d at 140, we cannot determine that her proposed amendment would be futile. We accordingly remand the case to the district court to allow Palmer to amend her complaint. 2
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2 We commend the Fordham Law School clinic for its fi ne advocacy in this case, and believe it would be beneficial for counsel to continue representi ng Palmer at the district court level.6 For the foregoing reasons, we VACATE the judgment below to the extent that it dismissed with prejudice Palmer’s FHA claim. We REMAND to the district court so that Palmer may be provided the opportunity to amend the co mplaint. In all other respects, we AFFIRM the judgment of the district court.

FOR THE COURT: Catherine O’Hagan Wolfe, Clerk