Opinion ID: 792455
Heading Depth: 2
Heading Rank: 1

Heading: The Section 804(c) Claims

Text: 34 The first issue is whether the rule against discriminatory statements found in FHA section 804(c) applies only to dwelling owners and their agents. We reject so crabbed a reading. 35 We review de novo the grant of a motion to dismiss for failure to state a claim. Bernheim v. Litt, 79 F.3d 318, 321 (2d Cir.1996). In so doing, we accept all of plaintiff's factual allegations in the complaint as true and draw inferences from those allegations in the light most favorable to the plaintiff. Desiderio v. Nat'l Ass'n of Sec. Dealers, Inc., 191 F.3d 198, 202 (2d Cir.1999). 36 Section 804(c) of the FHA makes it unlawful 37 [t]o make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or an intention to make any such preference, limitation, or discrimination. 38 42 U.S.C. § 3604(c). 39 In this case, the district court held that section 804(c) — specifically, the phrase with respect to the sale or rental of a dwelling — applies only to dwelling owners or their agents. It reached this conclusion by relying on what it said to be the purpose of the statute: to prevent expressions that result in the denial of housing, not to prevent all discriminatory expression. Because it found that defendants are neither owners nor agents and that applying section 804(c) to them would not further the purpose of the statute, the district court dismissed Claims Three and Seven. We disagree with this interpretation. 40 The district court's assessment of the purpose of section 804(c) is inconsistent with the statute's plain language, which applies broadly to  any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates a discriminatory preference on prohibited grounds. 42 U.S.C. § 3604(c) (emphasis added). Nothing in this language limits the statute's reach to owners or agents or to statements that directly effect a housing transaction. Indeed, this language does not provide any specific exemptions or designate the persons covered, but rather . . . applies on its face to anyone who makes prohibited statements. United States v. Hunter, 459 F.2d 205, 210 (4th Cir.1972) (internal quotation marks omitted); see also Ragin v. N.Y. Times Co., 923 F.2d 995, 999 (2d Cir.1991) (Congress used broad language in [section 804(c), and there is no cogent reason to narrow the meaning of that language.]). 5 41 Moreover, the district court's view that section 804(c)'s purpose is to prevent expressions that result in the denial of housing is too narrow. The statute also protect[s] against [the] psychic injury caused by discriminatory statements made in connection with the housing market. Robert G. Schwemm, Discriminatory Housing Statements and § 3604(c): A New Look at the Fair Housing Act's Most Intriguing Provision, 29 Fordham Urb. L.J. 187, 250 (2001); see also HUD ex rel. Stover v. Gruzdaitis, No. 02-96-0377-8, 1998 WL 482759, at  (HUD ALJ Aug. 14, 1998) (stating that section 804(c) protects the right to inquire about the availability of housing without being subjected to racially discriminatory statements). If that were not so, Congress likely would not have made section 804(c) applicable to dwellings that are otherwise exempt from section 804's prohibition on discrimination. See 42 U.S.C. § 3603(b). In fact, we have permitted plaintiffs to recover for discriminatory advertising even when the plaintiffs were not in the market for housing. See Ragin v. Harry Macklowe Real Estate Co., 6 F.3d 898, 903-04 (2d Cir.1993). 42 Defendants attempt to evade the sweep of section 804(c) by invoking the First Amendment. Specifically, defendants claim that [u]nder the Government's expansive reading of [section 804(c)] anyone who `make[s]' a statement indicating discrimination in race, religion, family status, etc. would be liable, including private individuals who may state they do not like children living on their block. Defs.' Br. at 42. Defendants are wrong. 43 While there may indeed be some cases in which the breadth of section 804(c) encroaches upon the First Amendment, this is not one of those cases. This case (unlike defendants' hypothetical) unmistakably involves commercial speech, a subset of speech for which the First Amendment `accords a lesser protection. . . than to other constitutionally guaranteed expression.' Ragin, 923 F.2d at 1002 (quoting Cent. Hudson Gas & Elec. v. Pub. Serv. Comm'n, 447 U.S. 557, 562-63, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980)). Courts have consistently found that commercial speech that violates section 804(c) is not protected by the First Amendment. See, e.g., id. at 1002-03; Hunter, 459 F.2d at 211-13. 44 For these reasons, we hold that the district court erred in limiting the application of section 804(c) to owners and their agents and should not have dismissed Claims Three and Seven.