In the spotlight again is Francis v. KINGS PARK MANOR, INC., Court of Appeals, 2nd Circuit March 25, 2021.
Last year, a panel court held: “Just over fifty years ago, spurred by the assassination of Dr. Martin Luther King, Jr., Congress enacted Title VIII of the Civil Rights Act of 1968, commonly referred to as the Fair Housing Act of 1968 (“FHA” or “Act”), 42 U.S.C. § 3601 et seq., a landmark piece of civil rights legislation that accompanied the Civil Rights Act of 1964 and the Voting Rights Act of 1965. The main question before us is whether a landlord may be liable under the FHA for failing to take prompt action to address a racially hostile housing environment created by one tenant targeting another, where the landlord knew of the discriminatory conduct and had the power to correct it. In holding that a landlord may be liable in those limited circumstances, we adhere to the FHA’s broad language and remedial scope and agree with the views of the United States Department of Housing and Urban Development (“HUD”), the agency tasked with administering the FHA. ”
After ordering a rehearing en banc, the court now holds:
“The FHA makes it unlawful “[t]o discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race . . . .”[16] When, as here, a plaintiff brings a claim under the FHA that does not rest on direct evidence of landlord discrimination, we analyze the claim under the familiar McDonnell Douglas burden-shifting framework first developed in Title VII cases.[17] Plaintiffs have specific, “reduced” pleading burdens in cases subject to the McDonnell Douglas analysis.[18] For a plaintiff’s claim to survive a motion to dismiss in a McDonnell Douglas case, he must plausibly allege that he “[1] is a member of a protected class, . . . [2] suffered an adverse . . . action, and [3] has at least minimal support for the proposition that the [housing provider] was motivated by discriminatory intent.”[19]
We conclude that the factual allegations in Francis’s Complaint do not suffice to carry his modest burden.[20] Although Francis has claimed that he is a member of a protected class, his Complaint lacks even “minimal support for the proposition” that the KPM Defendants were motivated by discriminatory intent.[21] The Complaint alleges, in a conclusory fashion, only that the “KPM Defendants have intervened against other tenants at Kings Park Manor regarding non-race-related violations of their leases or of the law.”[22] But because the Complaint does not provide enough information to compare the events of which Francis complains to the KPM Defendants’ responses to other violations, there is no factual basis to plausibly infer that the KPM Defendants’ conduct with regard to Francis was motivated by racial animus.[23]
To hold that Francis has plausibly pleaded discriminatory intent on these facts would be to indulge the speculative inference that “because the KPM Defendants did something with regard to some incident involving some tenant at some past point,” racial animus explains the failure to intervene here.[24] Francis does not allege that the KPM Defendants regularly intervened in other disputes among tenants, much less that it had a practice of addressing tenant-on-tenant harassment when the matter did not involve an African American victim and a white harasser. Francis’s vague allegation that the “KPM Defendants have intervened against other tenants . . . regarding non-race-related violations of their leases” could refer to efforts to collect rent, stop unauthorized subletting, or remedy improper alterations to the rental premises. Only untethered speculation supports an inference of racial animus on the part of the KPM Defendants. We decline to engage in such speculation.[25]
In an apparent attempt to avoid the obligation to plead facts that plausibly support an inference that the KPM Defendants were motivated by racial animus, Francis asserts that his allegations establish that the KPM Defendants intentionally discriminated against him under a deliberate indifference theory of liability. This theory of liability has been applied almost exclusively in custodial environments such as public schools and prisons, where it is clear that the defendant has both “substantial control over the context in which harassment occurs” and “a custodial [power over the harasser] . . . permitting a degree of supervision and control that could not be exercised over free adults.”[26] Francis argues that a landlord may be held liable for intentional discrimination if the landlord “ignore[d] the known discriminatory harassment of a third party.”[27]
We assume, for purposes of this appeal, that deliberate indifference may be used to establish liability under the FHA when a plaintiff plausibly alleges that the defendant exercised substantial control over the context in which the harassment occurs and over the harasser.[28] Nevertheless, we hold that Francis has failed to state a claim because his Complaint provides no factual basis to infer that the KPM Defendants had “substantial control over [Endres] and the context in which the known harassment occur[red].”[29] Nor can such control be reasonably presumed to exist in the typically arms-length relationship between landlord and tenant, unlike the custodial environments of schools and prisons.[30] The typical powers of a landlord over a tenant— such as the power to evict—do not establish the substantial control necessary to state a deliberate indifference claim under the FHA.[31]
Francis’s appeal to the employment context to support his theory of liability for landlords under the FHA is also unavailing. He argues that since employers are responsible for employee-on-employee harassment under Title VII, landlords must be responsible for tenant-on-tenant harassment under similarly worded provisions of the FHA.[32] But the employer-employee relationship differs from the landlord-tenant relationship in important ways. Employees are considered agents of their employer. And a landlord’s control over tenants and their premises is typically far less than an employer’s control over “free adult[]” employees and their workspaces.[33] We are hard-pressed to presume that an employer’s manner and degree of control over its agent-employees is equivalent to that of a landlord over its tenants.[34]
To hold the KPM Defendants liable for Endres’s conduct on the facts alleged would also be inconsistent with the background tort principles against which the FHA was enacted. The Supreme Court has been clear that when Congress creates “a species of tort liability,”[35] as it did in enacting the FHA, Congress “legislates against a legal background of ordinary tort-related . . . liability rules” which it presumptively “intends its legislation to incorporate.”[36]
Under New York law, landlords have a duty “to take reasonable precautionary measures to protect members of the public from the reasonably foreseeable criminal acts of third persons . . . on the premises.”[37] But New York tort law has long been clear that a landlord has no general duty to protect tenants even from “the criminal acts of yet another tenant, since it cannot be said that [a] landlord ha[s] the ability or a reasonable opportunity to control [the offending tenant]” and the “power to evict cannot be said to . . . furnish” such control.[38]
It is true that the Seventh Circuit, in Wetzel v. Glen St. Andrew Living Cmty., LLC, 901 F.3d 856 (7th Cir. 2018), has recognized a deliberate indifference theory of liability for a claim of discrimination under the FHA.[39] But, unlike in this case, the plaintiff’s allegations in Wetzel gave rise to the plausible inference that the defendant-landlord had unusual supervisory control over both the premises and the harassing tenants.[40] Moreover, as the panel dissenter observed, the landlord in Wetzel, unlike the KPM Defendants, was alleged to have affirmatively acted against the plaintiff.[41] In the absence of any factual allegations suggesting that the KPM Defendants had a similarly unusual degree of control over the premises and tenants, or actively facilitated or compounded harm to Francis, the Seventh Circuit’s decision in Wetzel does not suggest, much less compel, a different outcome here.[42]
As a final matter, we note that even if Francis had plausibly pleaded that the KPM Defendants had substantial control over Endres, he would still have failed to state an FHA claim for discrimination under a deliberate indifference theory. To state a deliberate indifference claim, a plaintiff must plausibly plead that the defendant’s response to harassment by a third party was “clearly unreasonable in light of the known circumstances.”[43] It cannot be said that the KPM Defendants’ inaction was “clearly unreasonable” in light of the circumstances described in Francis’s Complaint. The KPM Defendants were aware that the police were involved, and indeed, the police conducted an investigation that ultimately led to Endres’s arrest and prosecution.[44] We therefore have no factual basis to infer that the KPM Defendants clearly acted unreasonably.[45]
We think that our decision today coheres with the aims of those who are concerned about mounting housing costs for renters and increasing risks of housing loss for some of the most vulnerable among us.[46] The alternative pleading standard proposed by Francis would generate considerable uncertainty about the scope of a landlord’s responsibility for tenant behavior. The prophylactic measures by which landlords would manage the ensuing uncertainty would come at a cost, one that would almost certainly be borne, in one form or another, by current and prospective renters.[47]
Finally, we note that laws making landlords legally responsible for discriminatory tenant misbehavior are conspicuously absent from the abundant and exemplary history of New York legislation designed to proscribe discrimination in housing.[48] If the legislative bodies of New York have not seen fit to impose such landlord liability, there is good reason to doubt that it is a suitable tool for promoting fair housing. Contrary to the suggestions of a dissenting colleague, such observations do not indicate that our interpretation of the FHA improperly “puts a policy concern ahead of a legal mandate.”[49] Rather, we stress the potentially dramatic and arguably undesirable implications of the panel’s faulty interpretation of the FHA because it is improbable that such implications could have gone unnoticed for over fifty years after the passage of that much-discussed and much-litigated legislation.”