Housing Rights Initiative v. Compass, Inc.

Background

GIM Realty LLC asked the court to reconsider its February 14, 2023 order denying various defendants’ motions to dismiss and motions for judgment on the pleadings. GIM also asked, in the alternative, for certification of an interlocutory appeal, which is an appeal before the case reaches a final judgment. Several other defendants attempted to join GIM’s motion.

The underlying claims alleged that defendants maintained “no-voucher policies” that had a disparate impact on disabled, Black, and Hispanic New York City residents. The earlier order had found that Housing Rights Initiative adequately pleaded those claims.

Motion for Reconsideration

The court explained that reconsideration is limited to situations in which the court overlooked controlling law or factual matters presented earlier, or when there has been a change in controlling law, new evidence, clear error, or manifest injustice.

GIM argued that the court overlooked the requirement of “robust causality” and incorrectly found that Housing Rights Initiative adequately pleaded a disparate-impact claim. GIM also argued that the court failed to follow Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. and Salute v. Stratford Greens Garden Apartments.

The court rejected those arguments. It said it had applied Second Circuit precedent requiring a plaintiff to allege facts supporting a plausible inference that a facially neutral policy actually or predictably creates a disparate impact on a protected group or affects segregated housing patterns. Housing Rights Initiative had adequately alleged that defendants’ no-voucher policies produced actual or predictable adverse effects on disabled, Black, and Hispanic residents. The court also stated that GIM’s small size did not prevent a finding of the required causal connection.

Joining Defendants’ Arguments

The defendants seeking to join GIM’s motion filed their requests on March 1 and March 2, 2023. The court said they missed the February 28 deadline under Local Rule 6.3, which generally requires a reconsideration motion to be served within fourteen days of the challenged order.

The court added that their standing argument would fail even if their requests had been timely. It had already considered whether Housing Rights Initiative needed to assign an injury to each defendant at the pleading stage and had determined that it did not. The court also noted that damages would be determined at trial and that the disparate-impact claims could proceed because Housing Rights Initiative sought injunctive relief against each defendant.

Interlocutory Appeal

The court declined to certify an interlocutory appeal under 28 U.S.C. § 1292(b). Certification requires a controlling legal question, substantial ground for disagreement about that question, and a showing that an immediate appeal could materially advance the litigation. The court found that the defendants met none of those requirements. It concluded that their objections to the disparate-impact ruling and Article III standing did not present controlling legal questions, did not substantially cast doubt on the order’s accuracy, and would not materially advance the litigation.

Disposition

Judge Sidney H. Stein denied GIM’s motion for reconsideration of the February 14, 2023 Opinion and Order. The court also declined to certify an interlocutory appeal under 28 U.S.C. § 1292(b).