Abstract

Excerpted From: Armen H. Merjian, Housing Discrimination Is as Dangerous as Defective Stairs: The Nondelegable Duty to Obey State and Local Housing Discrimination Laws, 85 Ohio State Law Journal 145 (2024) (303 Footnotes) (Full Document)

The vast majority of housing sales and rentals involve agents. These range from management companies to real estate salespersons, lawyers to escrow agents. They also include receptionists, security guards, office managers, and building superintendents, who may be called upon to provide information regarding available apartments, to give tours of the property, and to distribute housing applications. Agents are thus the gatekeepers of housing in the United States, distancing owners from potential buyers and renters while implementing the owners' policies, screening applicants, and deciding who is permitted to view and ultimately apply for the property in question.

Litigants seeking redress from these owners (principals) for the discriminatory acts of their agents face two perennial roadblocks to securing justice. First, when sued, these gatekeepers are unlikely to inculpate their principals, whose directives they follow, but upon whom they rely for business. In Short v. Manhattan Apts., for example, a real estate salesperson for Manhattan Apartments, Inc. (MA) informed Mr. Short, a homeless man with a full housing subsidy, that “the landlords with whom MA worked did not accept programs,” a blatant violation of New York City's source of income law. During discovery, Mr. Short's counsel sought screenshots from MA's database that included “'directions and directives' from landlords revealing discriminatory practices.” Despite three court orders to produce the documents, MA refused. Instead, MA merely produced a spreadsheet indicating that various unnamed landlords had instructed that an applicant “MUST BE ESTABLISHED WORKING PERSON,” or “MUST HAVE GREAT JOB,” thereby excluding homeless, unemployed applicants with full housing subsidies such as Mr. Short.

MAexplained to the court that it refused to produce the documents “because landlords or clients [would] 'take their business elsewhere’ if MA were to disclose the relevant documents,” forcing MA “to choose between following the Court's orders or going out of business.” The court imposed sanctions upon MA, and Mr. Short ultimately prevailed at trial. Ironically, however, MA went out of business after all, depriving Mr. Short and his counsel of hundreds of thousands of dollars in compensatory damages and attorneys' fees.

Absent a willingness by agents to bite the hand that feeds them, then, it is exceedingly difficult to prove principal wrongdoing in housing discrimination. And if owners have no fear of liability for the actions of their gatekeepers, they have no incentive to cease their discriminatory instructions, or to prevent discrimination through careful selection, training, and oversight of agents. In addition, liability will fall upon those--from individual salespersons to building superintendents--who are unlikely to have deep pockets or valuable property upon which to compensate plaintiffs for the significant emotional distress and loss of housing opportunities they suffer, as the Short example illustrates.

Second, housing discrimination sounds in tort, and although vicarious liability normally attaches for an agent's acts within the scope of authority, where the individual in question is deemed an independent contractor, vicarious liability may not apply. Given that owners and real estate brokers commonly employ individuals classified as independent contractors for tax or employment purposes, they routinely seek to invoke this exception. While courts have repeatedly rejected this argument in the context of housing discrimination, owners and brokers continue to argue the point, forcing courts and litigants to address this misplaced contention. Even worse, courts still get it wrong, ignoring or simply unaware of established precedent, as a recent decision of the Connecticut Supreme Court illustrates.

There is, however, a largely untapped, applicable tort doctrine that would obviate the need to engage in an elusive search for proof of principal culpability, or a time-consuming, fact-intensive agency analysis: the doctrine of nondelegable duty. Under established tort principles, where the activity in question is of great societal importance, and/or where it poses a danger to the public absent precautions, the duty to prevent harm is nondelegable. Accordingly, principals are directly liable for the discriminatory actions of those they enlist, including independent contractors, even absent proof of principal involvement.

Before the Supreme Court decision in Meyer v. Holley, refusing to find a nondelegable duty under the Fair Housing Act (FHA), numerous courts ruled that the duty not to discriminate in housing is nondelegable. Since Meyer, courts and advocates have largely abandoned this doctrine, even under state and local law. This step backwards in housing discrimination jurisprudence is disconcerting given that, if anything, the trend nationwide is toward expanding rather than contracting vicarious liability and nondelegable duties. This Article argues, moreover, that Meyer is in no way controlling, or even persuasive, under state and local law, to which litigants often turn for protection of their civil rights. (All states--save Mississippi--and myriad localities have housing discrimination laws.)

Meyer was not only flawed, but based upon the unique (and often inapposite) language of the FHA. In addition, the nondelegable duty doctrine is a common law doctrine, which requires courts to undertake their own sui generis policy analysis to determine whether the duty in question is so important to the community that compliance should not be delegated to others. The Supreme Court erroneously eschewed this analysis, yet there is ample basis for determining that the crushing harm caused by housing discrimination triggers the duty. Indeed, housing transactions are as potentially dangerous, and foreseeably so, as many other transactions for which courts have established a nondelegable duty.

Part II sets forth the relevant principles of agency law and discusses the history and the rationale of the nondelegable duty doctrine. Part III demonstrates that housing discrimination is as potentially dangerous as defective stairs--for which courts impose a nondelegable duty of safe repair-- and that its prevention and deterrence are just as important to the community as stair safety. Part IV examines the Supreme Court's decision in Meyer, flagging several issues that cast doubt upon the Court's analysis of the duty, and that distinguish it from any analysis under state and local law. Part V examines the recent decision of the Connecticut Supreme Court in Lopez v. William Raveis Real Est., Inc., a case that highlights the difficulties for courts, practitioners, and aggrieved parties in establishing the vicarious liability of owners in housing discrimination cases. Part VI examines the continued vitality of the nondelegable duty doctrine under state and local law, providing an in-depth analysis of New York City's housing discrimination law as an exemplar. This analysis suggests that notwithstanding the Supreme Court's decision under the FHA, the doctrine provides a viable alternative theory of liability in state and local forums. A brief Conclusion follows.

[. . .]

Where a court stands on this issue may well depend upon where it sits, or indeed where it sleeps. But it should not. Those who have not experienced housing discrimination need only consult the overwhelming evidence, which reveals that the entirely foreseeable consequences of housing discrimination are devastating, and even lethal. Preventing housing discrimination is thus an axiomatic example of a responsibility “so important to the community that the employer [or owner] should not be permitted to transfer it to another.”

This social importance is the established basis for finding a nondelegable duty. Yet, in rejecting the duty, the Supreme Court in Meyer refused to even undertake the requisite policy inquiry. As the foregoing indicates, the Court's flawed ruling under the FHA is in no way binding upon state courts examining state and local law. Those courts have a duty to their citizens to undertake this inquiry and to explain precisely why housing discrimination is not as inherently dangerous, and of equal social importance, as the many grounds upon which courts have already imposed the duty. They will be hard-pressed to identify a principled basis upon which to do so.

Member, New York and Connecticut Bars. B.A. Yale University 1986; J.D. Columbia University 1990. The author is a civil rights and poverty lawyer at Housing Works, Inc., in New York.