USA v. Hylton et al

Filing 23

RULING denying 16 Motion to Dismiss. Signed by Judge Janet C. Hall on 6/19/2012. (Oliver, T.)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
UNITED STATES OF AMERICA,
Plaintiff,
and
TAIKA BILBO, ET AL
Interveners,
v.
CLIFTON HYLTON, ET AL,
Defendants.

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CIVIL ACTION NO.
3:11-CV-1543(JCH)

JUNE 19, 2012

RULING ON DEFENDANT’S MOTION TO DISMISS [DOC. NO. 16]
I.

INTRODUCTION
Plaintiff United States of America originally brought this action on behalf of

Jermaine Bilbo, Taika Bilbo, DeMechia Wilson, D.A. Wilson, and D.E. Wilson against
the defendants Clifton Hylton, Merline Hilton, and Hylton Real Estate Management, INC.
The government alleges that the defendants illegally discriminated against complainants
in violation of the Fair Housing Act of 1968, as amended, 42 U.S.C. §§ 3601-3631, by
making an oral statement communicating a preference for white tenants and refusing to
allow Jermaine and Taika Bilbo to sublease the defendant’s property to DeMechia
Wilson, an African American.
II.

STANDARD OF REVIEW
A.

Subject Matter Jurisdiction

A district court properly dismisses a case for lack of subject matter jurisdiction
under Rule 12(b)(1) of the Federal Rules of Civil Procedure when the court lacks the
statutory or constitutional power to adjudicate it. Makarova v. United States, 201 F.3d

110, 113 (2d Cir. 2000). In assessing a motion to dismiss for lack of subject matter
jurisdiction, the court “accept[s] as true all material allegations in the complaint.”
Shipping Fin. Serv. Corp. v. Drakos, 140 F.3d 129, 131 (2d Cir. 1998) (citing Scheuer v.
Rhodes, 416 U.S. 232, 236 (1974)). The court, however, refrains from “drawing from
the pleadings inferences favorable to the party asserting [jurisdiction].” Id. (citing Norton
v. Larney, 266 U.S. 511, 515 (1925)). On a motion to dismiss pursuant to Rule 12(b)(1),
the plaintiff must establish by a preponderance of the evidence that the court has
subject matter jurisdiction over the Complaint. Makarova, 201 F.3d at 113; see also
Malik v. Meissner, 82 F.3d 560, 562 (2d Cir. 1996); In re Joint E. & So. Dist. Asbestos
Litig., 14 F.3d 726, 730 (2d Cir. 1993). Courts evaluating Rule 12(b)(1) motions “may
resolve [] disputed jurisdictional fact issues by reference to evidence outside the
pleadings, such as affidavits.” Zappia Middle East Constr. Co. Ltd. v. Emirate of Abu
Dhabi, 215 F.3d 247, 253 (2d Cir. 2000).
B.

Failure to State a Claim

Upon a motion to dismiss pursuant to Rule 12(b)(6), the court must determine
whether the plaintiff has stated a legally cognizable claim by making allegations that, if
true, would show he is entitled to relief. See Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 557 (2007) (interpreting Rule 12(b)(6), in accordance with Rule 8(a)(2), to require
allegations with “enough heft to ‘sho[w] that the pleader is entitled to relief’”). The court
takes the factual allegations of the complaint to be true, Hemi Group, LLC v. City of New
York, 130 S. Ct. 983, 986-87 (2010), and from those allegations, draws all reasonable
inferences in the plaintiff's favor, Fulton v. Goord, 591 F.3d 37, 43 (2d Cir. 2009).

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To survive a motion pursuant to Rule 12(b)(6), “a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on
its face.’” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged. The plausibility standard is not akin to a
‘probability requirement,’ but it asks for more than a sheer possibility that a defendant
has acted unlawfully.” Iqbal, 129 S. Ct. at 1949 (2009) (quoting Twombly, 550 U.S. at
556).
The plausibility standard does not impose an across-the-board, heightened fact
pleading standard. Boykin v. KeyCorp, 521 F.3d 202, 213 (2d Cir. 2008). The
plausibility standard does not “require[] a complaint to include specific evidence [or]
factual allegations in addition to those required by Rule 8.” Arista Records, LLC v. Doe
3, 604 F.3d 110, 119 (2d Cir. 2010); see Erickson v. Pardus, 551 U.S. 89, 94
(2007) (holding that dismissal was inconsistent with the “liberal pleading standards set
forth by Rule 8(a)(2)”). However, the plausibility standard does impose some burden to
make factual allegations supporting a claim for relief. As the Iqbal Court explained, it
“does not require detailed factual allegations, but it demands more than an unadorned,
the-defendant-unlawfully-harmed-me accusation. A pleading that offers labels and
conclusions or a formulaic recitation of the elements of a cause of action will not do.
Nor does a complaint suffice if it tenders naked assertions devoid of further
factual enhancement.” Iqbal, 129 S. Ct. at 1949 (citations and internal quotations
omitted). Under the Second Circuit’s gloss, the plausibility standard is “flexible,”

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obliging the plaintiff “to amplify a claim with some factual allegations in those contexts
where such amplification is needed to render the claim plausible.” Boykin, 521 F.3d at
213 (citation omitted); accord Arista Records, 604 F.3d at 120.
III.

PROCEDURAL HISTORY
On October 7, 2011, United States of America (“USA”) filed this action on behalf

of Jermaine Bilbo (Mr. Bilbo), Taiko Bilbo (Ms. Bilbo), DeMechia Wilson (Ms. Wilson),
D.A. Wilson, and D.E. Wilson. Compl. at ¶ 1. On November 4, 2011, Mr. Bilbo, Ms.
Bilbo, Ms. Wilson, D.A. Wilson, and D.E. Wilson (“interveners”) filed a Motion to
Intervene (Doc. No. 7) under subsection 3612(o)(2) of title 42 of the United States Code
and Rule 24(a) of the Federal Rules of Civil Procedure. On December 27, 2011, this
court granted the Motion to Intervene absent objection (Order Doc. No. 15). The
Complaint alleges that defendants Clifton Hylton (Mr. Hylton), Merline Hylton (Ms.
Hylton), and Hylton Real Estate Management, INC. (“defendants”) violated subsections
3604(a), 3604(b), and 3604(c) of title 42 of the United States Code. Compl. at ¶ 20.
The Complaint alleges that interveners suffered damages and are aggrieved persons
under subsection 3602(i) of title 42 of the United States Code. Id.
On January 7, 2012, defendants filed a Motion to Dismiss (Doc. No. 16) under
Rule 12(b)(1). On January 20, 2012, USA filed a Memorandum in Opposition to the
Motion to Dismiss (Doc. No. 17).
IV.

FACTUAL BACKGROUND
Mr. Bilbo is an African American man and his wife, Ms. Bilbo, is a Caucasian

woman. Compl. at ¶ 4. Ms. Wilson is an African American woman and her two minor
children, D.E. Wilson and D.A. Wilson, are both African American. Id. Defendant Mr.

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Hylton is a black man and his wife, defendant Ms. Hylton, is a black woman.
Memorandum in Support of Motion to Dismiss (Doc. 16-1) at 8.
On approximately May 1, 2010, Mr. and Mr. Bilbo each signed a one-year lease
(“Lease”), commencing on May 1, 2010 and ending on April 30, 2011, to rent a singlefamily home located at 5 Townline Road, Windsor Locks, Connecticut (“Property”).
Compl. at ¶¶ 5, 8. Ms. Hylton owned the Property, and Mr. Hylton managed the
Property as an officer of Hylton Real Estate Management, Inc. (“HREM”).1 Id. at ¶¶ 5-6.
Mr. and Ms. Hylton lived at the Property for six years prior to leasing the Property to Mr.
and Ms. Bilbo. Mem. in Supp. at 8.
The Lease, which was written on the letterhead of HREM, provided in Paragraph
14 (“Paragraph 14”) that Mr. and Ms. Bilbo must obtain prior written consent from the
landlord before subleasing the Property. Compl. at ¶ 9. On approximately May 31,
2010, Mr. Bilbo telephoned Mr. Hylton, and informed him that he (Mr. Bilbo) would need
to terminate the Lease and would find a sub-lessee to take over the Lease. Id. at ¶ 10.
In a letter dated June 1, 2010, Mr. Bilbo reiterated to Mr. Hylton that he (Mr. Bilbo)
intended to terminate the Lease in what Mr. Bilbo hoped to be a “mutually beneficial”
manner. Id. at ¶ 11.
On June 18, 2010, Mr. and Ms. Bilbo advertised the Property on Craigslist to
search for a sub-lessee. Id. at ¶12. The advertisement stated that the Property would
be available on July 1, 2010. Id. On June, 21, 2010, Ms. Wilson responded to the
advertisement. Id. at ¶ 14. On June 22, 2010, Mr. Bilbo showed Ms. Wilson the
Property, and Ms. Wilson expressed an interest in subleasing. Id. Mr. Bilbo called Mr.

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HREM is a corporation registered with the State of Connecticut, in which Mr. Hylton is listed as
the president, secretary, and director. Compl. at ¶ 7.

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Hylton and informed him that he (Mr. Bilbo) had found a tenant to sublease the
Property. Id. at ¶ 15. Mr. Hylton told Mr. Bilbo that he (Mr. Hylton) would approve the
sublease but changed his mind after learning that Ms. Wilson was African American. Id.
Mr. Hylton told Mr. Bilbo the following: Mr. Hylton did not want “too many blacks” at the
Property; he only rented to Mr. and Ms. Bilbo’s because Ms. Bilbo was white, and it was
a good “mix”; and Mr. Bilbo would need to find “good white people that could afford the
Property, because [Wilson] is not going to be able to pay.” Id. Ms. Bilbo subsequently
telephoned Ms. Wilson to inform her that she would not be able to rent the Property due
to her race. Id. at ¶16.
Pursuant to subsections 3610(a) and (b) of title 42 of the United States Code, the
Secretary of the Department of Housing and Urban Development (“Secretary”)
conducted an investigation of the alleged Fair Housing Act (“FHA”) violations
committed by the defendants. Id. at ¶17. Pursuant to subsection 3610(g)(1) of title 42
of the United States Code, the Secretary determined that reasonable cause existed to
believe that the defendants committed illegal discriminatory housing practices in
connection with the Property. Id. On August 25, 2011, pursuant to subsection
3610(g)(2)(A) of title 42 of the United States Code, the Secretary issued a
Determination of Reasonable Cause and Charge of Discrimination, charging that the
defendants had engaged in discriminatory practices in violation of the FHA. Id. On
approximately September 7, 2011, pursuant to subsection 3612(a) of title 42 of the
United States Code, the complainants elected to resolve the charges in a federal civil
action. Id. at ¶18. Pursuant to subsection 3612(o) of title 42 of the United States Code,

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the Secretary authorized the United States Attorney General to file this action on behalf
of complainants. Id. at ¶ 19.
V.

DISCUSSION
A.

Subject Matter Jurisdiction

The defendants claim that the interveners are not “aggrieved persons” within the
definition of subsection 3602(i) of title 42 of the United States Code and therefore have
no standing. Mem. in Supp. at 3-4. An “’[a]ggrieved person’ includes any person who
(1) claims to have been injured by a discriminatory housing practice; or (2) believes that
such person will be injured by a discriminatory housing practice that is about to occur."
42 U.S.C. §3602(i). Actual injury may exist solely where a statute creates a legal right,
and that legal right was invaded. Havens Realty Corp. v. Coleman, 455 U.S. 363, 372
(1982). Furthermore, under the FHA, discriminatory remarks that a defendant merely
communicates to a person may sufficiently injure that person. See Ragin v. N.Y. Times,
923 F.2d 995, 1005 (2d Cir. 1991) (ruling that a plaintiff’s mere reading of a
discriminatory newspaper advertisement could establish standing under the FHA if that
advertisement caused substantial distress.)
The defendants cite Avalonbay Communities, Inc. v. Orange, 256 Conn. 557,
592 (2001) to support their argument that USA’s assertion that the interveners “suffered
damages” is not specific enough to satisfy the definition of an aggrieved person. Mem.
in Supp. at 4. The Avalonbay Court stated that to be an aggrieved person, a plaintiff is
required to allege “distinct and palpable injuries fairly traceable to [the defendants’]
actions.” Avalonbay, 256 Conn. at 592. The defendants, however, misread this
interpretation of an aggrieved person by construing the interpretation narrowly. The

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Avalonbay Court stated that an injury need not be economic or tangible in order to
confer standing and that the “current statutory definition of [an] aggrieved person was
meant to reaffirm the broad holdings of Havens.” Avalonbay, 256 Conn. at 592
Here, USA claims that Mr. Hylton orally communicated his preference for white
tenants to Mr. Bilbo, an African American, and prevented Mr. and Ms. Bilbo from
subleasing the Property to Ms. Wilson, an African American. See Ragin, 923 F.2d at
1005. USA claims that Ms. Bilbo communicated Mr. Hylton’s preference for white
tenants to Ms. Wilson and advised her that she would not be able to rent the Property
due to her race. See id. Although USA did not describe the damages that the
interveners suffered with great specificity within the Complaint, USA claims that the
defendants invaded the interveners’ legal rights as created by the FHA. Havens, 455
U.S at 372; see Ragin, 923 F.2d at 1005. Therefore, USA’s allegations are sufficient to
establish that the interveners are aggrieved persons under subsection 3602(i) of title 42
of the United States Code, and the defendants’ challenge of the interveners’ standing is
without merit.
B.

Failure to State a Claim
1.

USA’s Pleadings

This court will also address the defendants’ assertion that USA failed to state a
claim upon which the relief demanded can be granted.2 Motion to Dismiss (Doc. No.
16) at 1. In the Complaint, USA alleges that the defendants violated the following
subsections of title 42 of the United States Code: subsection 3604(a) for refusing to
negotiate for the rental of, or otherwise made unavailable or denied dwellings to

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Defendants do not cite to Rule 12(b)(6), but they do style part of their argument as a motion to
dismiss for failure to state a claim. Motion to Dismiss at 1.

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persons because of race; subsection 3604(b) for discriminating against any person in
the terms conditions, or privileges of rental of a dwelling because of race; and
subsection 3604(c) for making statements with respect to the rental of dwellings that
indicate a preference, limitation, or discrimination based on race, or an intention to
make any such preference, limitation, or discrimination. Compl. at ¶ 20.
In a civil action, the court may award equitable relief and monetary damages for
violations of the FHA. 42 U.S.C. § 3614(d). The FHA protects citizens against both the
denial of housing as well as psychic injury caused by discrimination in connection with
the housing market. United States v. Space Hunters, Inc., 429 F.3d 416, 424 (2d Cir.
2005).
Here, USA alleges that Mr. Hylton, an apparent agent of HREM and Ms. Hylton
regarding the rental of the Property, orally stated that he did not want “too many blacks”
at the Property and that Mr. Bilbo would need to find “good white people” to rent the
Property to. Compl. ¶ 9, 15. This allegation establishes a plausible, prima facie claim of
direct discrimination, resulting in the defendants’ violation of subsection 3604(c) of title
42 of the United States Code. See Iqbal, 129 S. Ct. at 1949. By alleging that Mr.
Hylton barred Mr. and Ms. Bilbo from subleasing the Property to Ms. Wilson due to Ms.
Wilson’s race, USA presented a plausible, prima facie claim of direct discrimination,
resulting in the defendants’ violation of subsections 3604(a) and (b) of title 42 of the
United States Code. See id. The denial of housing and psychic damages to the
interveners would be compensable upon a favorable court ruling. See Space Hunters,
429 F.3d at 424.

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2.

Defendants’ 12(b)(6) Argument

Parties to a contract cannot agree to disregard statutes that are based on
important public policy. See State v. Lynch, 287 Conn. 464, 477 (2008). . Defendants,
however, argue that Paragraph 14 of the Lease grants the defendants discretion to
approve or deny subleases and provides the defendants with an independent and
nondiscriminatory basis for refusing to accept or negotiate a sublease. Mem. in Supp.
at 2. Paragraph 14, however, does not supersede the FHA, nor does it permit the
defendants to disregard the FHA. See Lynch, 287 Conn at 477; see also 42 U.S.C. §
3615 (“[A]ny law of a State or political subdivision of a State, or of any other jurisdiction
that purports to require or permit any action that would be a discriminatory housing
practice [under the FHA] shall to that extent be invalid.”) Thus, if the failure to approve
a sublease was based on a violation of the FHA, as alleged here, the existence of
Paragraph 14 does not defeat the Complaint’s causes of action under the FHA
The defendants assert that, because Mr. and Ms. Hylton are black and had
lived in the Property prior to Mr. and Ms. Bilbo’s tenancy, any damages that the
interveners suffered were based on Paragraph 14 of the Lease, rather than on racial
animus. Mem. in Supp. at 8. For a motion to dismiss, however, the court takes the
plaintiffs’ factual allegations to be true. Hemi Group, 130 S. Ct. at 986-87. The
Complaint asserts plausible, prima facie causes of action under the FHA, and the
defendants’ factual assertions do not address the sufficiency of the Complaint.3

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Similarly, the defendants’ assertion that Mr. and Ms. Bilbo materially breached the lease prior to
the defendants’ alleged FHA violations is not an argument addressed to the sufficiency of the Complaint.
See Mem. in Supp. at 4-6.

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VI.

CONCLUSION
For the foregoing reasons, the court denies the defendant’s Motion to Dismiss

the Complaint.

SO ORDERED.
Dated at Bridgeport, Connecticut this 19th day of June, 2012.

__/s/ Janet C. Hall______
Janet C. Hall
United States District Judge

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