Opinion
00 Civ. 1781 (RCC)
August 23, 2001
OPINION ORDER
INTRODUCTION
Plaintiff, United States of America ("Plaintiff"), brought this action under the Fair Housing Act of 1968 ("FHA"), which prohibits all public and private discrimination in the housing market based on race, color, religion or national origin. 42 U.S.C. § 3601 et seq. Plaintiff's first claim for relief alleges that Defendants, Space Hunters, Inc. ("Space Hunters"), a New York corporation that provides lists of rentals to prospective tenants for compensation, see Affidavit of John McDermott, ¶ 6 [dated August 31, 2000] ("McDermott Aff."), and its president and owner, John McDermott ("McDermott") (collectively "Defendants"), discriminated against Keith Toto ("Mr. Toto") in the rental of a dwelling because he is deaf. Plaintiff's second claim alleges that Defendants refused to provide Mr. Toto with an equal opportunity to use and enjoy a dwelling by refusing to make reasonable accommodations in rules, policies, practices, or services. Plaintiff's third claim alleges that Defendants made statements to Mr. Toto with respect to a dwelling that indicated a preference, limitation, or discrimination based on a handicap. Plaintiff's fourth claim alleges that Defendants denied Mr. Toto access to a service relating to the business of rental dwellings because he is deaf. Plaintiffs fifth claim alleges that Defendants made unavailable or denied a dwelling to Fair Housing Council testers because of race or color. Plaintiffs sixth claim alleges that Defendants discriminated against Fair Housing Council testers in the rental of a dwelling, or in the provision of services in connection with the rental of a dwelling, because of race or color. Plaintiffs seventh claim alleges that Defendants made statements to Fair Housing Council testers with respect to the rental of a dwelling that indicated a preference, limitation, or discrimination based on race or color. Plaintiff seeks declaratory relief, injunctive relief, and compensatory and punitive damages under the FHA.
Defendants move to dismiss the complaint pursuant to both Rule 12(b)(1) of the Federal Rules of Civil Procedure ("Rule 12(b)(1)"), arguing that the Court lacks subject matter jurisdiction over their alleged wrongful acts because their activities are exempt from the FHA pursuant to Title 42 of the United States Code, Section 3603(b)(2), and Rule 12(b)(6) of the Federal Rules of Civil Procedure ("Rule 12(b)(6)"), arguing in the alternative that Plaintiff fails to state a cause of action for which relief can be granted. For the reasons stated herein, Defendants' motion is granted in part and denied in part.
FACTS
On January 15, 1999, Mr. Toto placed a call to Space Hunters through a relay service operator in response to a newspaper advertisement that Space Hunters had placed concerning rooms available for rent. Compl. ¶ 14. McDermott informed Mr. Toto, through the relay operator, that Space Hunters does not service the disabled. Id. Although Mr. Toto persisted in his effort to inquire about rental properties, McDermott refused to deal with him on account of his disability, telling him to "[e]at shit" and hanging up the phone. Id.
Mr. Toto communicates by telephone to parties who do not have a Telephone Device for the Deaf only through the services of a relay operator. A relay operator acts as an interpreter for the deaf party. The operator receives a typed message from the deaf party and then reads it to the other party. The operator then types back responses from the other party to the deaf party.
On February 24, 1999, Mr. Toto filed a claim with the United States Department of Housing and Urban Development ("HUD") alleging housing discrimination on the basis of physical disability. Compl. ¶ 15. In March 1999, two testers for the Fair Housing Council conducted separate telephone tests to determine how Space Hunters treats individuals who are deaf. Id. ¶ 14. On both occasions, the individual who answered the telephone at Space Hunters refused to deal with the tester through the relay service operator, stating "[g]ive me shit about Jesus Christ Almighty" and "[n]ot interested, take a hike." Id. ¶¶ 17, 18. On March 31, 1999, an investigator assigned by HUD to investigate Mr. Toto's allegations telephoned Space Hunters and asked to speak with the manager. Id. ¶ 19. The manager stated that he was not required to deal with deaf persons. Id. When the investigator, who is African American, told the manager about the investigation, the manager said "[f]uck you nigger." Id.
On April 1, 1999, HUD requested that the Fair Housing Council conduct tests to determine whether Space Hunters engaged in racial discrimination. Id. Plaintiff further alleges that Defendant made statements to the Fair Housing Council during a series of tests conducted between April 2, 1999 and April 17, 1999 that indicated that Defendants treated black and white prospective tenants differently. Id. ¶ 22.
During one investigative visit, a Caucasian tester reported that McDermott used the word "nigger" six or seven times. Comp. ¶ 23. McDermott allegedly told a Caucasian tester that he was the "Donald Trump" of people who usually come to Space Hunters, explaining that he "get[s] a lot of lowlife, scumbag niggers that come in." Id. After an African-American couple left his office, McDermott stated to the white tester, "Now there is a couple of dumb niggers." Id.
On April 3, 1999, a Caucasian and a black tester visited Space Hunters, expressing interest in rooms available in the Bronx. Compl. ¶ 25. The black tester offered to pay the fee by credit card or check, however, McDermott insisted upon payment in cash and told the black tester that he was one of the "lucky ones" who had a credit card or checking account. Id. McDermott told the white tester that the office was open until 6:00 p.m., while telling the black tester that the office was only open until 4:45 p.m.. He also told the black tester that he was leaving the office for the day, and that it would take too long for the black tester to obtain cash from an automated teller machine in order to pay for the fee. See id. McDermott allegedly only provided an alternate telephone number to call about apartment inquiries to Caucasian testers, and omitted such information when dealing with black testers.
Mr. Toto and the Fair Housing Council both filed complaints with the HUD. Pursuant to Title 42 of the United States Code, Section 3610(a) and (b), the Secretary of the HUD conducted and completed investigations and investigative reports of the complaints, and determined that reasonable cause exists to issue a Charge of Discrimination, pursuant to Title 42 of the United States Code, Section 3610(g). Defendants responded to the charges in writing in letters from McDermott, dated April 22, 26 and May 11, 1999. On February 7, 2000, Defendants elected to have the charges litigated in federal court, pursuant to Title 42 of the United States Code, Section 3612(a). The Attorney General has the authority to commence such action on behalf of Mr. Toto and the Fair Housing Council pursuant to Title 42 of the United States Code, Section 3612(o).
JURISDICTION
Jurisdiction in this Court is proper pursuant to Title 42 of the United States Code, Section 3612(o), and pursuant to Title 28 of the United States Code, Sections 1331 and 1345.
STANDARD
In order for a party to succeed on a motion to dismiss under Rule 12(b)(6), it must be clear that the non-moving party can prove no set of facts that would establish his or her claim for relief. Conley v. Gibson, 355 U.S. 41, 45-46(1957); Cohen v. Koenig, 25 F.3d 1168, 1172 (2d Cir. 1994). When making a determination of whether a non-moving party can prove any set of facts which would entitle him or her to relief, a court must assume that the allegations of the nonmoving party are true and draw all reasonable inferences in the such party's favor. Cooper v. Pate, 378 U.S. 546, 546(1964); Kaluczky v. City of White Plains, 57 F.3d 202, 206 (2d Cir. 1995). Vague and conclusory allegations, however, are not sufficient to withstand a motion to dismiss.
Rule 12(b)(1) provides for the dismissal of a claim when the federal court "lacks jurisdiction over the subject matter." Fed.R.Civ.P. 12(b)(1). In most cases, a court will consider a 12(b)(1) motion before ruling on any other motions to dismiss, since dismissal of an action for lack of subject matter jurisdiction will render all other accompanying defenses and motions moot. See United States ex rel Kreindler Kreindler v. United Techs. Corp., 985 F.2d 1148, 1155-56 (2d Cu. 1993), cert. denied sub nom. Kreindler Kreindler v. United Techs. Corp., 508 U.S. 973(1993); see also Rhulen Agency, Inc. v. Alabama Ins. Guar. Ass'n, 896 F.2d 674, 678 (2d Cir. 1990). Accordingly, a court confronted with a motion to dismiss pursuant to both Rules 12(b)(1) and 12(b)(6) must decide the jurisdictional question first because "a disposition of a Rule 12(b)(6) motion is a decision on the merits, and therefore, an exercise of jurisdiction." Magee v. Nassau County Medical Center, 27 F. Supp.2d 154, 158 (E.D.N.Y. 1998); see Rhulen, 896 F.2d at 678.
In considering a 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, a court must assume as true factual allegations of the non-moving party. Shipping Financial Servs. Corp. v. Drakos, 140 F.3d 129, 131 (2d Cir. 1998) (citing Scheuer v. Rhodes, 416 U.S. 232, 236 (1974));Serrano v. 900 5th Ave. Corp., 4 F. Supp.2d 315, 316 (S.D.N.Y. 1998). Where jurisdictional issues are in dispute, the court may look to "evidence outside the pleadings, such as affidavits." Filetech S.A. v. France Telecom, S.A., 157 F.3d 922, 932 (2d Cir. 1998) (citation omitted). Accordingly, the Court will rule on Plaintiffs' Rule 12(b)(1) motion first.
DISCUSSION
Plaintiff's first, second, fifth, and sixth claims for relief are based on the proscriptions found in Title 42 of the United States Code, Section 3604. While Section 3604 makes it unlawful to discriminate in the sale or rental of housing, Section 3603(b) provides exemptions from the provisions of Section 3604, other than subsection (c). The exemption in Section 3603(b)(1) is not applicable to Defendants because Congress expressly limited this subsection solely to the activities of an owner who does not employ the services of any real estate broker, agent, salesman, or any person in the business of selling or renting dwellings, and Defendants are not owners of any dwellings at issue. However, Defendants argue that they are covered by the exemption contained in Section 3603(b)(2), which is not expressly limited to owners.
Section 3603(b)(2) of the FHA provides that:
nothing in § 3604 (other than subsection c) shall apply to . . . rooms or units in dwellings containing living quarters occupied or intended to be occupied by no more than four families living independently of each other, if owner actually maintains and occupies one such living quarters as his residence.42 U.S.C. § 3603(b)(2) (emphasis supplied).
The express language of Section 3603(b)(2) refers only to the type of accommodation that is exempt from the coverage of Section 3604. Nowhere in the statute is the scope of the exemption limited to the actual owners of the property. See Fred v. Kokinohas, 347 F. Supp. 942, 944 (E.D.N.Y. 1972)). Rather, Section 3603(b)(2) only requires that the owner actually maintain and occupy one of the living quarters in the dwelling at issue as his residence. Thus, while the exemption of Section 3603(b)(1) only prohibits the application of Section 3604 to the owners of single family houses, Section 3603(b)(2) prohibits the application of Section 3604 torooms in owner-occupied buildings.
Furthermore, it is a well-established principle of statutory construction that when a statute contains express specific terms in one portion of the statute, but does not contain similar express language in another portion, that language does not apply to the portion from which it is omitted. See United States v. McClure, 305 U.S. 472, 478(1939) (quoting United States v. Morrow, 266 U.S. 531, 535(1925). Because Congress did not expressly limit who can invoke Section 3603(b)(2), as it did in Section 3603(b)(1), the Court concludes that the exemption relied upon by defendants in Section 3603(b)(2) applies to the rental of rooms in owner-occupied buildings, regardless of whether the party invoking the exemption is the owner.
Defendant's publication only lists rooms in owner-occupied buildings where less than four families live independently of each other; therefore, the exemption in Section 3603(b)(2) deprives the Court of subject matter jurisdiction over such claims. Accordingly, Plaintiff's first, second, fifth, and sixth claims for relief are dismissed.
Plaintiff brings claims three and seven pursuant to Section 3604(c), which prohibits the making, printing, or publishing of discriminatory notices, statements, or advertisements. Plaintiff contends that Defendants' statements to Mr. Toto indicated a preference, limitation, or discrimination based on a handicap and violated Section 3604(c). Plaintiff also alleges that Defendants' statements to the Fair Housing Council testers indicated a preference, limitation, or discrimination based on race or color and also violated Section 3604(c).
Specifically, Section 3604(c) of the Fair Housing Act provides that it shall be unlawful:
To make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin.42 U.S.C. § 3604(c). Defendants argue that these claims should be dismissed because coverage of Section 3604(c) extends only to dwelling owners and their agents.
The FHA broadly declares the above housing practices "unlawful" without specifying categories of persons who may be found responsible for these practices. Therefore, the Court must determine how broadly to construe the phrase "with respect to the sale or rental of a dwelling." If interpreted broadly, such phrase could mean that the speaker covered by the statue would only need to make a statement about a dwelling that is being sold or rented, without having any connection to the transaction. See Michigan Protection and Advocacy Service, Inc., et al. v. Peggy Babin, 799 F. Supp. 695, 716 ((E.D. Mich. 1992). If interpreted less broadly, it could be read as limiting the application of Section 3604(c) to only Statements made by the owner or his agent. Id. The Court finds that an interpretation of Section 3604(c) that would include Defendants would be overly broad, because "only the discriminatory comments of a person selling/renting his dwelling, or an agent acting on behalf of that person, would have a direct influence on the disposition of the property."Id. "The purpose of [Section] 3604(c) is to prevent expressions that result in the denial of housing, not to prevent all discriminatory expression." Id. The Court finds further support for this conclusion in a regulation, promulgated under the authority of Section 3604(c), which provides that the prohibitions of such section apply to all written or oral notices or statements "by a person engaged in the sale or rental of a dwelling." See 24 C.F.R. § 100.75(b). The Court finds that applying Section 3604(c) to Defendants would not further the purpose of the statute. Accordingly, Defendants' motion to dismiss Plaintiff's third and seventh claims for relief is hereby granted.
Plaintiff's fourth claim for relief is based on Section 3606, which prohibits discrimination in the provision of brokerage services, providing that "it shall be unlawful to deny any person access to . . . any other service . . . relating to the business of selling or renting dwellings, or to discriminate against him in the terms or conditions of such access . . . on account of handicap." 42 U.S.C. § 3606. Defendants argue that their alleged wrongful activities do not violate this provision because they are not a "multiple listing service." However, Section 3606 is not limited to such "multiple listing services." See Brogan v. United States, 522 U.S. 398, 403(1998).
Defendants admit that they advertise the availability of rooms for rent in owner-occupied housing and provide prospective tenants with access to a list of those rooms for a small fee. McDermott Aff. ¶ 2. Although Defendants characterize the nature of their business as a publication," it is clear to the Court that, construing the FHA broadly and in accordance with Congress' intent, Defendants provide services to subscribers that "relate[s] to the business of selling or renting dwellings" within the meaning of Section 360. 42 U.S.C. § 3606; see Singleton v. Gendason, 545 F.2d 1224, 1228 (9th Cir. 1976). The Court declines to hold as a matter of law that Section 3606 does not apply to Defendants. Accordingly, the Court denies Defendants' motion to dismiss Plaintiff's fourth claim against Defendants.
CONCLUSION
For the reasons stated above, the Court grants Defendants' motion to dismiss claims one, two, three, five, and six and seven of the complaint. The Court denies Defendants' motion to dismiss claim four of the complaint.