Xia v. 65 West 87th Street Housing Development Fund Corporation

Background

Eva Xia and Paul Privitera sought to buy Apartment 4 in a building owned by 65 West 87th Street Housing Development Fund Corporation. The opinion describes Xia as Chinese American and Privitera as white. They alleged that members of the corporation’s Board of Directors discriminated against them because of Xia’s race and national origin by denying their purchase application.

The plaintiffs brought claims under the Fair Housing Act, the Civil Rights Act of 1866, the New York State Human Rights Law, and the New York City Administrative Code. The defendants were the corporation and Christine Elbert, Samantha Pinkowitz, Anthony Sarmiento, and Angela Rojo.

The building was a housing development fund corporation cooperative with income limits tied to 165% of the applicable area median income. The plaintiffs submitted multiple applications. The Board requested additional forms, fees, financial information, and affidavits, and changed the application requirements during the process. The Board rejected the application on March 3, 2020, without stating a reason. The plaintiffs alleged that other, non-Asian applicants had faced a shorter process, fewer fees, and fewer application requirements.

The Motion to Dismiss

The defendants asked the court to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6). That rule tests whether a complaint alleges enough facts to make a claim plausible; it does not decide whether the plaintiff will ultimately win or resolve factual disputes.

The defendants argued that the plaintiffs were not qualified to buy the apartment because their income exceeded the applicable limit. The parties disagreed about which area-median-income limit applied, how income should be calculated, and whether proceeds from the plaintiffs’ real-estate sales should be included.

The court concluded that the plaintiffs had plausibly alleged that they met the building’s objective requirements. The application requested adjusted gross income as reported on federal tax returns, and the plaintiffs alleged that they supplied the requested information. The court found the corporation’s governing documents and application ambiguous about which income limits applied and how real-estate-sale proceeds should be treated. It stated that those issues could be addressed through discovery or at a later stage, rather than resolved on the motion to dismiss.

Alleged Discrimination

The court also found that the plaintiffs had plausibly alleged disparate treatment, meaning that they were treated differently because of a protected characteristic. The plaintiffs alleged that the defendants learned of Xia’s identity through her name, later received photographs and information stating that she was born in China, and then imposed additional requirements, fees, and delays.

The plaintiffs also relied on allegations concerning Cindy Zhou, an Asian roommate of the seller, whom a Board member allegedly called a “squatter” and “not a good fit.” They alleged that no person of Chinese or Asian descent had previously been approved to purchase an apartment in the building. The court further considered the alleged differences between the plaintiffs’ application process and the processes experienced by three recent purchasers.

At this stage, the court was required to accept the complaint’s factual allegations as true and draw reasonable inferences for the plaintiffs. It held that the alleged timing, application changes, statements, and differences in treatment were enough to support a plausible inference of discrimination. The court did not determine that discrimination occurred or finally decide whether the plaintiffs satisfied the income requirements.

Disposition

Judge Edgardo Ramos denied the defendants’ motion to dismiss. The opinion directed the parties to appear for a telephonic conference on December 16, 2020, and directed the Clerk to terminate the motion.