Tenants Can't Claim Discrimination Based on Exploitation

Former building tenants, all low-income Latinos, sued the Nassau County Village of Farmingdale and landlord for housing discrimination. Between 1999 and 2004 the village expressed interest in redeveloping the area where the building was located. In 2000 landlord received notice from the village threatening to take title to the building by eminent domain. Although this never happened, tenants claimed that landlord stopped making improvements to the building and charged excessive rents, that the buildings became unfit for human habitation, and that the village issued few housing violations despite knowledge of these conditions. Tenants claimed that the village and landlord violated the Fair Housing Act and the NY Human Rights Law. While the case was pending, tenants asked the court for permission to amend their complaint to add a claim for discrimination based on exploitation because the village and landlord had taken unfair advantage of members of a protected class in a racially segregated housing market by assessing charges for services and conditions that were in excess of the fair market value.

The court ruled against tenants. Although generally courts should freely permit amendment of pleadings when justice requires, it would be futile to do so in this case because tenants didn't state a claim upon which relief could be granted. The exploitation theory of discrimination applied to claims made under 42 U.S.C. Section 1982 but not under the Fair Housing Act. Also, the exploitation theory of discrimination was applied in other parts of the country, but wasn't recognized in the Second Circuit. And even if the court accepted the claim that Latinos were completely restricted to the geographical housing market where landlord operated its building, they must allege how landlord and the village could have in fact charged higher prices or demanded more restrictive terms than their competitors in that location.  They failed to do so in their complaint.

Rivera v. Village of Farmingdale: 06 CV 2613, NYLJ 1202589224554 (EDNY; 2/19/13; Hurley, DJ)