Fair Housing Justice Center, Inc. v. JDS Development LLC

Background

Fair Housing Justice Center, Inc. sued JDS Development LLC, Property Markets Group, Inc. (PMG), and other defendants. The amended complaint alleged that the Park Slope Building, a 12-story, 51-unit rental building that opened for occupancy in 2011, contained design and construction features that did not comply with accessibility requirements under the Fair Housing Act (FHA), the New York State Human Rights Law, and the New York City Human Rights Law.

On August 29, 2018, the organization sent two testers to the building. They viewed apartments and allegedly encountered several inaccessible features, including a heavy entrance door without automatic opening capacity, improperly placed mailboxes, narrow interior doorways, a high terrace threshold, inaccessible environmental controls, insufficient kitchen space, and bathrooms lacking required clear floor space. The organization filed suit on February 7, 2019.

Motion and Parties’ Positions

PMG moved under Rule 12(b)(6), which allows dismissal for failure to state a legally sufficient claim. PMG’s motion relied solely on statutes of limitations. It argued that the FHA claims accrued when the building’s last certificate of occupancy was issued or when the last unit was sold. PMG stated that the building was sold in September 2013 and that the final certificate of occupancy was issued in December 2013, making the February 2019 lawsuit untimely under that theory.

Fair Housing Justice Center argued that a design-and-construction claim remains available until a person experiences the discrimination or the violation is remedied. The parties agreed that the event triggering the limitations period under the state and city laws was the same as under the FHA.

Court’s Analysis

The court held that an FHA design-and-construction claim accrues when a person protected by the FHA encounters the allegedly unlawful building elements and is subjected to discrimination. The court relied on the FHA’s text, which prohibits discrimination in the sale or rental of a dwelling or otherwise making it unavailable because of disability, and separately identifies failure to design or construct an accessible dwelling as prohibited conduct.

The court reasoned that an inaccessible condition by itself is not yet discrimination against a particular person. A person must encounter the condition before that person can be subjected to the alleged differential treatment. The court also found that this interpretation fit the FHA’s definition of an “aggrieved person,” because PMG’s proposed rule could cause the limitations period to expire before anyone protected by the FHA was injured.

The court also relied on tort principles, explaining that FHA damages claims are generally similar to tort claims and ordinarily accrue when the wrongful conduct causes injury. It concluded that starting the limitations period when a protected person encounters the unlawful design or construction better served the FHA’s broad remedial purpose. The court further noted that the Department of Housing and Urban Development had consistently interpreted the FHA to allow design-and-construction complaints while inaccessible features remain in place, and found that interpretation persuasive.

Application and Disposition

The testers encountered the alleged defects on August 29, 2018, and the organization filed suit roughly five months later. The court therefore held that the FHA claim against PMG was timely. It rejected PMG’s argument that the organization’s injury occurred earlier, explaining that the organization’s standing-related injury and the event starting the limitations period were different questions.

The court applied the same timing rule to the state and city claims. It stated that both had three-year limitations periods and held that those claims were timely because the alleged discriminatory act occurred when the testers visited the building.

The court denied PMG’s motion to dismiss the FHA claim and denied PMG’s motion to dismiss the New York State and New York City claims. In its conclusion, the court stated that none of the claims against PMG was barred by the statute of limitations and directed the Clerk to terminate the motion.