LEGAL CORNER: The 2nd Circuit Reverses Course: Landlord is Not Found Liable Under Fair Housing Laws

John Dolgetta, Esq. | April 12, 2021

John Dolgetta, Esq., Dolgetta Law, PLLC.

Two years ago, on March 4, 2019, the 2nd Circuit Court of Appeals in New York in Francis v. Kings Park Manor, Inc. (see https://bit.ly/2Kd38bo) (“Kings Park Manor I”) held that a landlord could be liable under the Federal Fair Housing Act (see https://bit.ly/2WBzEdH) and the New York State Human Rights Law (see https://dhr.ny.gov/law) for failing to protect a tenant from harassment and discrimination by another tenant. At the time, it was an important decision as it was only the second time a court imposed an obligation on a landlord to take affirmative steps to curtail tenant-on-tenant discrimination.

More than two years later, the 2nd Circuit Court of Appeals reversed course and, in a decision issued on March 25, 2021 (see https://bit.ly/2Ov4rpX) (“Kings Park Manor II”), held that “…landlords cannot be presumed to have the degree of control over tenants that would be necessary to impose liability under the FHA for tenant-on-tenant misconduct.” This decision now limits the exposure that landlords and property managers have under the FHA and NYSHRL.

Revisiting the Facts in Francis

Donahue Francis (the “Plaintiff”), an African American individual, signed a lease with Kings Park Manor, Inc. (the “Landlord”) for the rental of his apartment in 2010. In February, 2012, another tenant, Plaintiff’s next-door neighbor, Raymond Endres (the “Tenant-Defendant”), engaged in racially discriminatory and threatening behavior and harassment toward the Plaintiff. The Tenant-Defendant used extreme profanity and made racially inflammatory remarks. The Plaintiff was continuously harassed and threatened while in his apartment, in the building, and in the parking lot of the complex. The behavior continued for nearly one year.

The Plaintiff called the police several times about the behavior. On one occasion an officer in the Police Department’s Hate Crimes Division visited the apartment complex and warned the next-door neighbor to stop his behavior. The officer also informed the Landlord and the property manager about what had occurred. The Plaintiff filed a formal police report. The Landlord did not address the situation. The behavior continued, and in May, 2012, the Plaintiff called the police once again and filed another police report. This time, he wrote a formal letter to the Landlord regarding the Tenant-Defendant’s conduct. Again, the Landlord and the Landlord’s property manager did not respond to the Plaintiff’s letter. The behavior became even more aggressive, and, in August, 2012, the Tenant-Defendant was arrested for aggravated harassment. The Tenant eventually filed a lawsuit against the Landlord and the Landlord’s management agent (collectively, the “Landlord Defendants”), as well as the Tenant-Defendant for discrimination and violations under the FHA and NYSHRL.

Kings Park Manor I

In Kings Park Manor I, a panel of three judges from the 2nd Circuit Court of Appeals heard the initial appeal from the District Court case. The central issue involved “…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.” The three-judge panel relied on the broad interpretation of the language of the FHA and rules issued by the United States Department of Housing and Urban Development and held that landlords may be held liable under certain circumstances for violating the FHA and other fair housing laws due to certain discriminatory behavior of tenants toward other tenants.

The Court of Appeals’ three-judge panel, in reversing the decision of the District Court, held that a landlord may be held liable, in certain instances, for failing to affirmatively act and protect another tenant by utilizing certain rights and remedies the landlord may have under the terms of a lease agreement with the tenant in question or which may be available to a landlord at law. As part of the panel’s decision, it remanded the case back to the District Court for a retrial. The Defendants, however, appealed the panel’s decision and requested a rehearing “en banc,” whereby all of the judges of the 2nd Circuit Court of Appeals would rehear the appeal. A majority of the judges of the 2nd Circuit ultimately agreed to grant the Landlord Defendants an en banc rehearing, which took place in September 2020.

Kings Park Manor II

In Kings Park Manor II, all of the 2nd Circuit Court of Appeals judges reviewed the three-judge panel’s dismissal of the District Court’s decision on a de novo basis. The Court Appeals explained that the FHA makes it unlawful “to 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…” and that “when…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.” The McDonnell Douglas analysis requires a plaintiff to establish the following in order to avoid the case from being dismissed:

[1] the plaintiff is a member of a protected class,

[2] the plaintiff suffered an adverse action, and

[3] the plaintiff has at least minimal support for the proposition that the housing provider was motivated by discriminatory intent.

The court held that while the Plaintiff was a member of a protected class, the Plaintiff did not establish that the landlord’s action, or in this case inaction, was motivated by a discriminatory intent. The court points out that the Plaintiff did not present sufficient evidence establishing that the Landlord Defendants were acting with a discriminatory intent toward the Plaintiff simply by not evicting or dealing with the Tenant-Defendant directly.

The Deliberate Indifference Theory of Liability, Substantial Control Over Tenant

The Plaintiff also attempted to establish that the Landlord Defendants engaged in intentional discrimination under a deliberate indifference theory of liability. The court explained that “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.’” The court held that the landlord-tenant relationship between the Plaintiff and Defendant did not rise to the level of “substantial control” nor was there “a custodial power” over the person engaging in the harassment.

The Court of Appeals in Kings Park Manor II ultimately held that the Plaintiff failed to state a claim because the complaint did not provide any factual basis establishing that the Landlord Defendants had “…substantial control over [Tenant-Defendant] and the context in which the known harassment occurred.” The court held that no such “…control [could] be reasonably presumed to exist in the typically arms-length relationship between landlord and tenant, unlike the custodial environments of schools and prisons.” The court stated that “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.”

The court also noted that even if the Plaintiff did establish that there was substantial control, in order establish a “deliberate indifference” claim, a plaintiff must show that the Defendant’s response to the “…harassment by a third party was clearly unreasonable in light of the known circumstances.” The court ultimately held that the Landlord Defendants’ inaction was not “clearly unreasonable” under the circumstances because the Landlord Defendants were aware of the police involvement and, ultimately, the Tenant-Defendant was arrested.

Landlord’s Obligations Under New York Law

The Court of Appeals in Kings Park Manor II explained that under New York law, landlords do 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.” However, the court goes to explain that generally under New York tort law “…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 has the ability or a reasonable opportunity to control [the offending tenant]’ and the ‘power to evict cannot be said to . . . furnish’ such control.” New York similarly does not impose liability on a landlord for the acts of a tenant.

The Court’s Reversal Does Not Lessen The Importance of Fair Housing

The decision in Kings Park Manor II has alleviated some of the burden placed on landlords and management agents with respect to added liability under fair housing laws and their relationship with tenants. And, while the Court of Appeals has made clear that the liability of landlords has been lessened, the decision does not completely let landlords off the hook. A closer reading of the decision does leave open the potential of liability in the event “substantial control” is able to be established—although the burden of proof on a plaintiff is still high. Nevertheless, it is important that agents, landlords, management agents, and other real estate professionals be aware of the fair housing laws and the liability that exists when there is a violation.

John Dolgetta, Esq.
Legal Corner author John Dolgetta, Esq. is the principal of the law firm of Dolgetta Law, PLLC. For information about Dolgetta Law, PLLC, please visit http://www.dolgettalaw.com. The foregoing article is for informational purposes only and does not confer an attorney-client relationship.”