C i r cui tJ udg e R i char d D
. C udahy of the U ni t ed S t at es C our tof A p p e a ls f

orthe * S ev enth C i r cui t , s i t t i ng by des i g nat i on. 0 9
- 2 3 4 1
- cv S a nd ers v. G rena dier R ea lty, Inc. UNI TED S TATES CO URT O F AP PEALS F O R T H E S E C O N D C IR C U IT S UM M ARY OR DER RU L I N GS B Y S U MMA RY ORD E R D O N OT H AV E P RE C E D E N T I AL E F F E C T . C I T A T I ONT O A S U M M A RY O RD E R F I L E D O N O R A F T E R JAN UA RY 1 , 2 0 0 7 , I S P E RM I T T E D AN D I S G O V E RN E D BY F ED ER A L RU LE OFA P P ELL A TE P R OCE D U RE 32 .1 AN D THI S C OURT’ S LOC A L RU LE 32 .1.1. WHEN C I TI N G A S U MM A RY ORD ER I N A D OCU MENT F I LED WI TH THI S C OURT, APA R TY M U S T C I TE E I T HE R T HE F E D E RA L A P P E N D IXOR ANE L E C T R ON I C D A T A B A S E (WI T H T HE N OT A T I ON “SU M M AR

Y ORDER”). A P ARTY CI TIN G A SU M M AR Y ORDER MUST SER

VE ACOP Y OF I T ON ANY P A R TY NOT R

EP RES EN TED B Y C OUN S EL. A t a s tate d ter m o f th e U n ited State s C o u rt o f A p p e a ls fo r th e Se c o n d C irc u it, h e ld atthe D ani el Patr i ckM oyni han U ni t ed S t at es C our thous e, 500 Pear l S tr eet , i n the C i t y of N ew Y or k , on the 22 day of February, tw o thous and t en. nd P R E S E N T : G U ID O C A L A B R E S I,

R E E N A R A G G I, RI CH A RD D. CU DA HY, *

C i r cui tJudges
.

-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- L A VER N S A ND ERS , QU EEN H OL T, Pla in tif fs-Ap p e lla n ts , v . N o. 09- 2341- cv GR E NA DI E R R E A L T Y, INC
. , S T E VE NS ON C O M M O N S , IN C
. , D O E S #1- 10, i ncl us i v e, D ef endant s -Appel l ees .

-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- A P P E A R IN G F O R A P P E L L A N T S: N K E R E U W E M U M O H , B ro o kly n , N e w Y o rk. APPE AR IN G FO R APPE L L E E S : J O S H U A D
. L IN D Y , B r ody , B e n a rd & B r anch LLP , N ew Y o rk , N ew Y o rk , f or G r enadi er R eal t y, I nc .Pl ai nt i f f s ’ or i g i nal compl ai nt al s o al l eg ed v i ol at i ons of 42 U
. S
. C
. §§ 1981 and 1983, 1 T i t l e V I I of

the C i v i l R i g ht s Actof 1964, 42 U
. S
. C
. § 2000e ets eq. , a n d th e Fi f th and F o u rte e n th A m e n d m e n ts. P lain tiffs w ith d re w th e se c laim s b e fo re th e d istric t co u rt. 2 W I LLI AM G . B ALLA IN E (M eli ssa K atz, on the br i ef ) , L andman Cors i B al l ai ne & For d P.C., N ew Y o rk , N ew Y o rk , f

orSt eve ns on C om m ons , I nc . Ap p ea l f rom the U n it ed St ates D istri ct C o u rtfor the Sou thern D istri ct o f N ew Y o rk (W il li am H . P au ley I I I , Judge ). UP ON DUE CO NS I DE RA T I ON, I T I S HE RE BY OR DE RE D, A DJ UDGE D, A ND D E C R E E D t hatthe j udg mentent er ed on M ay 6, 2009, i s A F F I RMED
. Pl ai nt i f f s L av ern S ander s and Q ueen H ol t , w ho s erv ed r es pect i v el y as the pr es i dent and v i ce pr es i dent of thei r hous i ng pr oj ect ’ s t enant s ’ as s oci at i on, s ued def endant s S t ev ens on C o m m o n s, th e h o u s i n g p r o j e c t , a n d Gr e n a d i e rRe a l ty , I n c . , f o rv i o l a t i o n s o f

4 2 U.S.C
. § 1982, the Fai rH ous i ng Act( “ FH A”) , 42 U
. S
. C
. § 3601 ets eq. , the Fi r s t Amendment , and N e w Y o rk sta t e law
. T h e y n o w a p p e a l fro m th e d ism iss a l o f th e ir c o m p lain t p u rsu a n t to 1 F e de r a l Rul e of

Ci v i l Pr oc e du r e 12 ( b) ( 6) , a rul i ng w e r e v i e w de no v o, a c c e pt i ng a ll all egati o n s in the co m p lai n t as tru e an d d raw ing all rea so n ab le inferen ce s in p lai n ti ffs’ f avor,
s ee V i etnam As s ’ n f

orV i ct i ms of Ag ent O r ang e v . D ow C hem. C o. , 517 F.3d 104, 115 ( 2d C i r . 2008) , and f

r om the deni al of

l eav e t o amend, w hi ch w e r ev i ew f orabus e of

di s cr et i on,
s ee A T S I C ommc’ ns , I nc. v . S haar Fund, L t d. , 493 F.3d 87, 108 ( 2d C i r . 2007)
. I n doi ng s o,
we a s s u m e th e p a r t i e s ’ f a m i l i a r i ty wi th th e f

a c t s a n d r e c o r d o f

p r i o rp r o c e e d i n g s , wh i c h we
r e f e r e nc e on l y a s ne c e s s a r y t o e xp l a i n o urde c i s i on t o a f f i r m.3

1
. Se c tio n 1 9 8 2 C laim T i t l e 42 U
. S
. C
. § 1982 s t at es that“ [ a] l l ci t i zens of the U ni te d S t at es s hal l hav e the
sa m e righ t, in e very State a n d T e r r ito ry , a s is e n jo y e d b y w h ite c iti z e n s th e re o f to in h e rit, pur chas e, l eas e, s el l , hol d, and conv ey r eal and per s onal pr operty. ” S ect i on 1982 has been in terp re ted to p ro h ib it “ in ten tio n a l d isc rim in a tio n ” b a se d o n ra c e . S h a a re T e fila C o n grega tio n v. C o b b , 4 8 1 U .S. 6 1 5 , 6 1 7 (1 9 8 7 ) (q u o tin g Sa in t F ra n c is C o ll. v. A l-K h a z ra ji, 4 8 1 U .S. 6 0 4 , 6 1 3 (1 9 8 7 )). P lain tiffs s u b m it th a t th e fo llo w in g alle gatio n s a d e q u a tely sta te thatdef endant s i nt ent i onal l y di s cr i mi nat ed ag ai ns tth em bas ed on r ace : ( 1) “ U pon i nf or mat i on and bel i ef

, non- bl ackr es i dent s hav e been g r ant ed s ubs i di es and r e- cert i f i cat i ons
w hi l e pl ai nt i f

f s hav e bee n deni ed the s ame i n the s ame per i od, ” Am. C ompl
. ¶17; and ( 2)

“ I n l i g htof

the f or eg oi ng ther ef

or e, the def

endant s di s cr i mi nat ed ag ai ns tpl ai nt i f f s on acc ount of thei rr ace and nat i onal or i g i n i n v i ol at i on of T i t l e V I I I , and s ect i ons 1982 and 1981, ” i d. ¶26. T o su rviv e a m o tio n to d ism iss , p lain tiffs m u st “‘sta te a c laim to re lief th a t is p lau sib le
o n its fa c e . ’” A s h c r o f

t v . Iq b a l, 1 2 9 S. C t. 1 9 3 7 , 1 9 4 9 (2 0 0 9 ) ( q u o tin g B e ll A tl. C o rp . v. T w ombl y, 550 U
. S
. 544, 570 ( 2007) )
. I n cons i der i ng w hether a cl ai m i s f aci al l y pl aus i bl e,
w e do notacc eptl eg al concl us i ons as true. S ee A s hcr oft v. I q b a l, 1 2 9 S
. C t . at1949- 50 (“ T h rea d b are rec it als o f th e e lem en t s o f a c au se o f ac ti o n , su p p o rt ed b y m ere co n clus o ry st at eme nts , do n ot s uff

i ce.”) . T hu s, the con cl usi on that “ defend ants dis cri minat ed agai nst pl ai nt i f f s on acc ount of thei r r ace and nat i onal or i g i n i n v i ol at i on of
. . . s ect i on[ ] 1982” doesF u rth e r, p lain tiffs a llege n o b a sis fo r t h e “ in fo rm a tio n a n d b e lief” o n w h ich th e ir 2 as s ert i on thatnon- bl ackr es i dent s w er e g r ant ed s ubs i di es r es t s . “ [ P] l eadi ng on i nf or mat i on and bel i ef

i s notan appr opr i at e f or m of pl eadi ng i f

th e m a tte r i s w i thi n the per s onal kn o w ledg e of

the pl eade ror‘ pr es umpt i v el y’ w i thi n hi s know l edg e, unl es s he r ebut s t hat p re su m p tio n . T h u s, m a tters o f p u b lic re c o rd o r m a tters gen e ra lly kn o w n in th e c o m m u n ity s houl d notbe al l eg ed on i nf or ma ti on and bel i ef

i nas much as ev eryone i s hel d t o be conv er s antw i th them. ” 5 C har l es Al an W r i g ht& A rt h u r R
. M i l l er , Feder al Pr act i ce a nd Pr ocedur e § 1224, at300- 01 ( 3d ed. 2004)
. B eca us e the compl ai nt does noti l l umi nat e the n a tu re o f th e c h a llen ged re -c e rtifica tio n p ro c e ss , w e d o n o t kno w w h e th e r th is a ss e rtio n is a m a tter o f p u b lic re c o rd w h ich p lain tiffs sh o u ld p lea d o n p e rso n a l kno w led ge. I n a n y e ven t, w hi l e pl eadi ng s may be ba s ed on “ the bes tof the [ att orney’ s ] know l edg e, i nf or mat i on, and bel i ef , ” thati nf

or mat i on and bel i ef

mustbe “ f

or med af t eran i nqui ry r eas onabl e undert he ci r cums t ance s . ” Fed. R
. C i v . P. 11. 4 nots t at e a pl aus i bl e cl ai m t o r el i ef
. W hi l e par ag r aph 17 does al l eg e f act s cons i s t entw i th a dis cri mi n a t i on cl ai m, i .e. , that non-blackres i den t s w ere g rant ed sub si dies , i tnev ertheles s

“ s t ops s hor t o f t he l i ne betw een pos s i bi l i ty and pl aus i bi l i ty of ent i t l ementt o r el i ef

, ” i d. at 1 9 4 9 (q u o t i n g B e ll A tl. C o rp . v. T w o m b ly , 5 5 0 U
. S. a t 5 5 7 (i n te rn a l q u o ta tio n m a rks
om i t t ed)) , because plai nti ff s do no tal l eg e any fact s suppo rt i ng an inf erence of r aci al animus. 2 Ac c or di ng l y, w e c on c l ud e tha tthe di s tr i c tc ou r tpr op e r l y d i s mi s s e d the § 1 98 2 c l a i m. 2
. F H A C laim T h e F H A m a ke s it u n la w fu l “[t] o r e f u s e to s e ll o r r e n t . . . o r o th e rw is e m a ke

u n avail ab le o r d en y , a d w ell ing to an y p erso n b ec au se o f race ,” 4 2 U .S.C . § 3 6 0 4 (a), o r “ [t ]o d iscri m inate against an y p erso n in the terms, co n d it ion s, o r p ri v il eges o f sale o r ren tal o f a dw el l i ng . . . be c a u s e o f ra c e , ” i d. § 3604( b)
. Pl ai nt i f f s al l eg ed thatthey w er e “ r ef us ed a

r ece r t i f i cat i on thatw oul d [ hav e] g r ant ed [ them] much neede d r ents ubs i di es ” i n v i ol at i on of th e F H A
. A m . C o m p l. ¶ 1 1
. T h e y n o w a p p e a l th e d istric t c o u rt’s d e ter m in a tio n th a t th e ir5

F H A c laim is d e fic ien t b e c a u se th e y d id n o t a d e q u a tely p lea d (1 ) th a t th e n a m e d d e fe n d a n ts deni ed them the s ubs i di es at i s s ue, or ( 2) thatthey w er e qual i f i ed t o r ent . W e ag r ee w i t h the d istric t co u rt. T he compl ai ntf

ai l s ad e q u a te ly t o pl ead thatpl ai nt i f f s “ w er e qual i f

i ed t o r entor pur chas e the hous i ng . ” M i t chel l v . S hane, 350 F.3d 39, 47 ( 2d C i r . 2003)
. T he compl ai nt
m a kes o n ly th e fo llo w in g co n c lu so ry a ss e rtio n s: (1 ) “San d e rs w a s . . . d e n ied th e righ t to
su b sidies tha t she is en titl ed to,” A m . C o m p l. ¶1 2 , an d (2) “ At all ti m es p lai n ti ffs w ere compet entand abl e t o pay thei r r ent under the s ubs i di es of f er ed t o [ them] under the N at i onal H o u sing Act,” id. ¶ 1 5 . B u t a ne ce ssary p rec o n d it ion to ren t sub s i d i e s i s a re side n t’ s
s ubmi s s i on of

r equi r ed r eport s as t o her i ncome and hous ehol d compos i t i on w i thi n t en days
o f th e lan d lo rd ’s w ritten re q u e st. B e c a u s e p lain tiffs h a ve n o t alle ged sa tisfa c tio n o f th is

r equi r ementf

orthe yea ra ti s s ue, w e ca nnotconcl ude thatthe compl ai ntpl aus i bl y al l eg es p lain tiffs’ e n tit lem e n t to th e su b sid i e s t h a t q u a lify th e m to p a y th e ir re n t. I n lig h t o f th is omi s s i on and pl ai nt i f

f s ’ f ai l ur e t o al l eg e w hatdef endant s di d ordi d notdo t o deny them
s ubs i di es , w e i dent i f

y no err ori n the di s tr i ctcourt ’ s di s mi s s al of pl ai nt i f f s ’ FH A cl ai m. S ee As hcr of tv . I qbal , 1 2 9 S. C t. at1949 ( “ T hr eadba r e r eci t al s of the el ement s of

a ca us e of
ac ti o n , su p p o rt ed b y m ere co n clus o ry statem en ts, do n o t suffi ce .”). 3
. F irst A m e n d m e n t C laim Pl ai nt i f f s next s ubmi t that the di s tr i ct court err ed i n di s mi s s i ng thei rFi r s tAmendment claim b ec au se th ey d id n o t ade q u ately p lead t h a t d e f en d an ts w ere stat e a ctors. See , e.g.,6

C i ambrie ll o v . C ount y of N as s au, 292 F.3d 307, 323 ( 2d C i r . 2002) ( hol di ng thatl i t i g ant cl ai mi ng v i ol at i on of cons t i tut i onal r i g ht s “ must f i r s t es t abl i s h that the chal l eng ed conduc t
con st i tutes ‘s t at e act i on ’” ( qu oti ng U nit ed St at es v . I nt’ l B h d
. of T eam st ers , C hau ff eurs, W ar ehous emen & H el per s of Am. , 941 F.2d 1292, 1295 ( 2d C i r . 1991) ( i nt ernal quot at i on
mark s omi t t ed) )
. Pl ai nt i f f s as s ert that the f

act s al l eg ed “ eas i l y permi tthe i nf er ence that[ the D epart men tof H ou si ng and U rban D ev el op men t ] , in c o njunct i on w i th the defendan t s, d eterm ined w h o rec eiv ed su b sidies p u rsua n t t o Secti o n 2 3 6 o f th e N ati o n al H o u sing Act.” Appel l ant ’ s B r . at 11. W e di s ag r ee. As not ed abov e, the compl ai nti s ambi g uous r eg ar di ng the r el a t i o n s h ip b e twe e nd e f endant s ’ chal l eng ed conduc tand dec i s i ons r eg ar di ng g ov ernment
s ubs i di es . Pl ai nt i f

f s ’ al l eg at i on that“ they hav e al s o been thre a te n e d w it h ev i ct i on and

r e f us e d a r e c e r t i f

i c a t i on tha t w ou l d [ ha v e ] g r a nt e d [ the m] muc h ne e de d r e nt s ub s i di e s , ” Am
. C ompl
. ¶11, i s i ns uf

f i ci entt o s uppor tan i nf er ence of

s t at e ac t i on beca us e i tdoes not d e m o n stra te s tate re sp o n sib ili ty fo r ten a n ts’ re -c e rtifica tio n . Se e B lu m v. Y a re tsky , 4 5 7 U .S. 991, 1008- 09 ( 1982) ( hol di ng thatdi s char g e deci s i on f r om st at e- s ubs i di zed nur s i ng homes

w as nots ta te a c tio n ); s ee a l s o U ni t ed S t at es v . S t ei n, 541 F.3d 130, 149 ( 2d C i r . 2008) ( obs erv i ng that s t at e act i on i s l ack i ng w hen “ the g ov ernment w as not di ct at i ng the out comes
o f p a rticu lar c a se s” ). N o r c a n t h e f a c t o f go vern m e n t su b sid y , b y itse lf, e sta b lish sta te act i on. S ee S an Fr anci s co Ar t s & Athl et i cs , I nc. v . U
. S
. O l ympi c C omm., 483 U
. S
. 522, 544 ( 1987) ( “ T he G ov ernmentmay s ubs i di ze pr i v at e ent i t i es w i thoutas s umi ng cons t i tut i onal

r es pons i bi l i ty f

or thei r act i ons . ”) ; H us ai n v . S pr i ng er , 494 F.3d 108, 134 ( 2d C ir
. 2 0 07)7

(“ E x tens iv e re g u lat ion an d p u b li c fu n d ing, ei ther a lon e o r t aken togeth er, w il l no t tran sform

a p r i v a t e a c t o r i n t o a s t a t e a c t o r . . . . ” ( i n t e rn a l q u o t a t i o n m a r k s o m i t t e d ) )
. A c c o r d i n g l y , we
c on c l ud e tha tthe di s tr i c tc ou r tpr op e r l y d i s mi s s e d p l a i nt i f f s ’ Fi r s tAm e nd me ntc l a i m. 4. L eav e To Amend Pl ai nt i f f s s ubmi t that the di s tr i ctcourtabus ed i t s di s cr et i on i n denyi ng l eav e t o amend. W e di s ag r ee. “ A di s tr i ctcourthas d is c ret i on t o deny l eav e f org ood r eas on, i ncl udi ng fu tilit y , b a d fa ith , u n d u e d e la y , o r u n d u e p re ju d ic e to th e o p p o s in g p a rt y . ” H o lm e s v. G rubman, 568 F.3d 329, 334 ( 2d C i r. 2 0 0 9 ) (i nt ernal quot at i on mark s and al t er at i on omi t t ed) ; s ee a l s o 6 C har l es Al an W r i g ht , Ar thurR
. M i l l er & M ary K ay K ane, Feder al Pr act i ce a nd Pr ocedur e § 1484, at598- 600 ( 2d ed. 1990) ( “ [ A] n abus e of di s cr et i on may be fou n d if the co u rt simp ly d en ies the m o ti o n to am en d w ith o u t offeri n g an y ex p lana ti o n .”). H er e, p l a i n t i f

f s we r e a f

f o r d e d two o p p o r tu n i t i e s t o a m e n d b e f o r e th e i r c o m p l a i n t w as di s mi s s ed. M or eov er , the di s tr i ct court r eas onabl y concl uded that l eav e t o amend w oul d be f ut i l e b e c a u s e the af

f i dav i t s pl ai nt i f

f s s ubmi t t ed i n s uppor tof thei rpr opos ed addi t i onal
c laim s c o n tain e d th e sa m e d e fic ien t, c o n c lu s o r y a l lega tio n s th a t led th e d istric t co u rt to dis mis s the co mp l ai nt. W e, theref ore, conclude t hat the d enial of l eav e t o a men d w as a
r eas onabl e dec i s i on w el l w i thi n the di s tr i ctcourt ’ s di s cr et i on. W e hav e cons i der ed pl ai nt i f f s ’ other ar g ument s on appea l and conc l ude thatthey l ack8

m e rit. A c c o rd in gly, w e A F F I R M th e ju d gm e n t o f th e d istric t co u rt. FOR TH E CO UR T: C AT H E R IN E O ’H AG AN W O LF E , C lerko f C o u rt