United States of America v. 111 East 88th Partners

Filing 30

MEMORANDUM AND ORDER granting 20 Motion to Amend/Correct. For the foregoing reasons, the Government's motion to amend the complaint (Docket no. 20) is granted. Within seven days of the date of this Order the Government shall file its Amended Complaint. SO ORDERED. (Signed by Magistrate Judge James C. Francis on 9/19/2017) Copies Transmitted this Date By Chambers. (anc)

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conditions, including depression, chronic kidney disease. a personality (Complaint, ¶ 15). disorder, and In 1997, he adopted a dog, Orion, apparently in violation of his lease, which prohibits tenants from permission. keeping dogs without the (Complaint, ¶¶ 16, 18). defendant’s written In 1998, the defendant commenced an eviction action, which was dismissed because the landlord failed to take action within three months of learning of the pet’s presence. (Complaint, ¶ 18). Orion died in 2006, and Mr. Reich soon adopted another dog, Maddy, from an animal shelter. (Complaint, ¶ 19). In response to the defendant’s notice of termination of his tenancy, Mr. Reich asked that he be able to keep the animal as a reasonable accommodation, after which the defendant commenced an eviction action. (Complaint, ¶ 21). Department of Housing and Mr. Reich filed a complaint with the Urban Development (“HUD”), and ultimately the New York State Department of Human Rights filed a discrimination action on his behalf in state court. ¶ 22). (Complaint, In September 2015, the state court ruled that, because Mr. Reich’s therapist had found that as of March 2014 he no longer met the criteria for his previous diagnoses, Mr. Reich could not present evidence of psychological impairment. 2 (Complaint, ¶ 23). The action was later dismissed. 1 (Complaint, ¶ 23). In March 2015, Mr. Reich was diagnosed with End-Stage Renal Disease, leading to deterioration (Complaint, ¶¶ 15, 27-28). of his mental health. In June 2015, Mr. Reich asked for an accommodation to keep an emotional support dog in his apartment. (Complaint, ¶ 26). The defendant thereafter requested that Mr. Reich provide copies of his therapist’s session notes as well as medical records and history. (Complaint, ¶ 29). Mr. Reich filed a complaint with HUD, reasoning that the defendant’s requests for medical information were so burdensome as to constitute a denial of his request. complaint and defendant. (Complaint, issued a Charge (Complaint, ¶ 13). ¶ 31). of HUD investigated Discrimination against the the In October 2016, the Government filed this action pursuant to 42 U.S.C. § 3612(o)(1). (Complaint, ¶ 14). The proposed Amended Complaint alleges the following facts. Maddy died 1 in April 2017. (Proposed Complaint, ¶ 33). The original complaint asserts that the action was dismissed without prejudice. (Complaint, ¶ 23). The proposed Amended Complaint states that the state court later clarified that the dismissal was with prejudice. ([Proposed] Amended Complaint (“Proposed Complaint”), attached as App. A to Plaintiff’s Memorandum of Law in Support of Its Motion to Amend the Complaint (“Pl. Memo.”), ¶ 23). 3 Approximately one and one-half months later, Mr. Reich asked to be allowed to adopt another dog for emotional support. Complaint, ¶ 34). (Proposed The defendant then sought (1) copies of Mr. Reich’s “medical records and medical history, including but not limited to medical management provided, tests conducted with their results, glomerular filtration rate, MRI, CT scan, ultrasound or contrast x-ray, for the period of time Dara Huang MD, Shuchita Sharma, MD, and Kidney & Hypertension Specialists of New York, P.C. have been seeing/treating [him],” (2) copies of “medical records relating to the claimed ongoing and continuing medical problems regarding his ability to receive dialysis,” and (3) the “exact breed wished to adopt. (Proposed Complaint, ¶ 35). to “supplement” Complaint, ¶ 35). its of the dog” that Mr. Reich The defendant also reserved its right requests in various ways. 2 (Proposed The Government seeks to amend its complaint to add these allegations, asserting that the defendant’s responses to the 2017 accommodation request, like its responses to the 2015 accommodation request, were intended to discourage Mr. Reich from pursuing 2 his rights under the FHA and reflect an intent to These requests are very similar to the requests that the defendant made in connection with Mr. Reich’s 2015 request for accommodation. (Determination of Reasonable Cause and No Reasonable Cause (“HUD Determination”), attached as part of Exh. A to Declaration of Sharanya Mohan dated Aug. 31, 2017, at 5). 4 discriminate against him based on his disability. (Proposed Complaint, ¶ 39). Discussion A. Legal Standard Rule 15 of the Federal Rules of Civil Procedure provides that courts should requires.” “freely give” leave to amend “when justice so Fed. R. Civ. P. 15(a)(2); accord Foman v. Davis, 371 U.S. 178, 182 (1962); Aetna Casualty & Surety Co. v. Aniero Concrete Co., 404 F.3d 566, 603 (2d Cir. 2005). standard is consistent with [the Second “This permissive Circuit’s] preference for resolving disputes on the merits.’” ‘strong Williams v. Citigroup Inc., 659 F.3d 208, 212–13 (2d Cir. 2011) (quoting New York v. Green, 420 F.3d 99, 104 (2d Cir. 2005)). The district court has broad discretion over motions to amend, see McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 200 (2d Cir. 2007), and may deny such a motion for any of the following reasons: (1) undue prejudice to the non-moving party, (2) futility, (3) bad faith or dilatory motive, (4) repeated failure to cure deficiencies by previous amendments, or (5) undue delay, United States ex rel. Ladas v. Exelis, Inc., 824 F.3d 16, 28 (2d Cir. 2016). B. Futility Leave to amend should be denied as futile when the amended 5 pleading would not survive a motion to dismiss under Rule 12(b). IBEW Local Union No. 58 Pension Trust Fund & Annuity Fund v. Royal Bank of Scotland Group, PLC, 783 F.3d 383, 389 (2d Cir. 2015). Thus, the standard governing leave to amend is whether the amended pleading states a claim on which relief can be granted when all facts pled are accepted as true and construed in the light most favorable to the plaintiff. See Panther Partners Inc. v. Ikanos Communications, Inc., 681 F.3d 114, 119 (2d Cir. 2012) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678-80 (2009)). The non-moving party bears the burden of demonstrating that the proposed amendment is futile. See Allison v. Clos-ette Too, LLC, No. 14 Civ. 1618, 2015 WL 136102, at *2 (S.D.N.Y. Jan. 9, 2015). The defendant argues that the Government “seeks to circumvent the administrative framework . . . of the [FHA], which mandates . . . that enforcement actions initiated by . . . [HUD] proceed pursuant to a prescribed administrative process.” (Defendant’s Memorandum of Law in Opposition to the Government’s Motion to Amend the Complaint (“Def. Memo.”) at 1). The FHA establishes certain procedures to follow upon the filing of an administrative complaint with HUD alleging a discriminatory housing practice. These include notice to the respondent, an investigation of the claim, a conciliation process, and a determination of whether reasonable 6 cause exists to believe that a discriminatory housing practice has occurred. 42 U.S.C. § 3610(a)-(b), (g). Because the Government did not engage in a new round of investigation, conciliation, and determination in connection with Mr. Reich’s most recent complaint, the defendant asserts it lacks “standing to maintain this action.” 3 (Def. Memo. at 9). But “it is well-settled that a plaintiff is not required to exhaust administrative remedies before commencing an FHA . . . claim in federal court.” Sinisgallo v. Town of Islip Housing Authority, 865 F. Supp. 2d 307, 320–21 (E.D.N.Y. 2012) (collecting cases); see also 42 U.S.C. § 3613 (a)(2) (allowing aggrieved persons to commence civil actions without filing administrative complaints); Hart v. Murphy, No. 3 Generally, when a litigant fails to engage in statutorilyprescribed administrative procedures the question is whether that failure deprives the court of jurisdiction, rather than whether the non-compliant litigant lacks standing. See, e.g., Fowlkes v. Ironworkers Local 40, 790 F.3d 378, 384 (2d Cir. 2015) (holding that “administrative exhaustion is not a jurisdictional requirement [for a Title VII action]; rather, it is merely a precondition of suit and, accordingly, it is subject to equitable defenses”); Paese v. Hartford Life & Accident Insurance Co., 449 F.3d 435, 439, 446 (2d Cir. 2006) (clarifying in context of ERISA that failure to exhaust administrative remedies “does not mean we lack subject matter jurisdiction, but rather is an affirmative defense, subject to waiver, estoppel, futility, and similar equitable considerations”); Lyons v. Litton Loan Servicing LP, 158 F. Supp. 3d 211, 218 (S.D.N.Y. 2016) (discussing lack of standing and failure to exhaust as separate bases for motion under Federal Rule of Civil Procedure 12(b)(1)). 7 8:12-CIV-2020, 2013 WL 1278161, at *1 (M.D. Fla. March 28, 2013) (“Unlike other remedial federal civil rights legislation, most notably employment discrimination, neither the Fair Housing Act nor Section 1982 require that a victim of a discriminatory housing practice first exhaust his administrative remedies as a precondition to filing suit.” (quoting 28 Am. Jur. Trials § 7 (1981)); United States v. Pacific Northwest Electric, Inc., No. CV-01-019, 2003 WL 24573548, at *21 (D. Idaho March 21, 2003) (collecting cases) (“Several courts have held that a plaintiff is not required to pursue conciliation or exhaust any administrative remedies before filing an action under the Fair Housing Act . . . .”); United States v. Sea Winds of Marco, Inc., 893 F. Supp. 1051, 1054 (M.D. Fla. 1995) (failure to engage in administrative procedures is not “detrimental to subsequent actions to enforce the Fair Housing Act”). Lynch noted in United Indeed, as then-District Judge Gerard States v. Hillman Housing Corp., “[d]epriv[ing] [] victims [of housing discrimination] access to judicial remedies because of administrative errors on the part of the agency assigned to assist them would defeat th[e] purpose [of the FHA]. Nor would [it] further Congress’ goal of conciliating those disputes that can be resolved short of litigation” since complainants are allowed to “skip[] the HUD process (and potential 8 administrative conciliation efforts) altogether.” 212 F. Supp. 2d 252, 254-55 (S.D.N.Y. 2002). For this reason, the Government’s reliance on Rhode Island Commission for Human Rights v. Graul, 120 F. Supp. 3d 110 (D.R.I. 2015), is unnecessary. (Pl. Memo. at 7-8). In that FHA case, the defendants argued that the “administrative process leading up to the filing of the complaint was flawed” because the plaintiff “did not give sufficient notice of the reliance on discriminatory impact” and because its “efforts at conciliation were inadequate.” Graul, 120 F. Supp. 3d at 118 (emphasis omitted). analogized to Title VII cases, in which “[t]he The court exhaustion requirement serves to give a potential defendant ‘prompt notice of the claim and to create an opportunity for early conciliation.’” Id. (quoting Lattimore v. Polaroid Corp., 99 F.3d 456, 464 (1st Cir. 1996)). The notice requirement “serves to limit the scope of any subsequent complaint to ‘the charge filed . . . and the investigation which can reasonably be expected to grow out of that charge.’” Id. (quoting Lattimore, 99 F.3d at 464). Relying on those principles, the court held that the plaintiff could allege claims reasonably related to the charge that the complainant had filed with the administrative agency. Id. at 120. However, as noted above, the FHA does not require a plaintiff to engage in the 9 administrative process, see, e.g., Sinisgallo, 865 F. Supp. 2d at 320–21; Pacific Northwest Electric, 2003 WL 24573548, at *21, or even to file a complaint with an administrative agency, see, e.g., Hart, 2013 WL 1278161, at *1 (“Although the Fair Housing Act provides that an aggrieved person may file a complaint with HUD, more immediate and meaningful relief is more likely obtainable if the complainant bypasses the administrative complaint process entirely and immediately files suit in federal district court.” (quoting 28 Am. Jur. Trials § 7 (1981)). Where there is no requirement that a plaintiff file an administrative complaint at all, I cannot see why such a document, if filed, should serve to limit the allegations in an action in federal court. Therefore, the Government’s failure to complete the administrative procedures outlined in the FHA after Mr. Reich’s 2017 administrative complaint does not render the proposed amendment futile. B. Prejudice The defendant prejudice if the also contends amendment is that allowed it will because suffer “the undue proposed amendment will deprive [the] [d]efendant of administrative rights and remedies otherwise afforded under [the FHA].” 2). (Def. Memo. at This is particularly important here, it asserts, because Mr. 10 Reich litigated a similar accommodation claim in state court and lost. (Def. Memo. at 2-3). This argument also fails. First, the defendant does not have a right to attempt to “have the complaint dismissed at the administrative level and to create an administrative record” (Def. Memo. at 11) for the simple reason, discussed above, that engaging in the administrative adjudication process is not mandated under the FHA. what benefit the defendant would Moreover, it is not clear garner from administrative proceedings in connection with the 2017 complaint, as litigation is already pending. Additionally, as the Government points out, in its review of Mr. Reich’s 2015 administrative complaint, HUD already analyzed the effect of the prior adjudication on the 2015 claim. (Plaintiff’s Reply Memorandum in Further Support of Its Motion to Amend the Complaint (“Reply”) at 5; HUD Determination at 2-4, 7). As the 2017 complaint is eerily similar to the 2015 complaint -- the major difference is merely that Mr. Reich asked for an accommodation allowing a different dog than Maddy to occupy his apartment -- “there is no basis to think that HUD would resolve this new complaint differently.” (Reply at 5). Finally, to the extent that the defendant wants an opportunity to resolve this action without further litigation, “this Court’s mediation program is available . . . by simple request to the Court, as are [] 11

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