C.C.M.S. v. Oxford Realty & Holdings LLC

Background

C.C.M.S. d/b/a Community Counseling and Mediation Services (CCMS) sued Oxford Realty & Holdings LLC, Nigel Shamash, West 27th Street Realty, Inc. (the Co-Op), and Co-Op board members Marc Paturet, Joseph Grill, Maxime Touton, F. Michael Conte, and other similarly situated board members. CCMS alleged that the defendants refused to approve its proposed sublease of the eighth floor of 129 West 27th Street in New York, New York because of race, violating 42 U.S.C. §§ 1981 and 1982.

Oxford owned the shares allocated to the eighth floor, while the Co-Op owned and operated the building through its board. CCMS sought the space for an outpatient mental-health clinic serving underrepresented racial and ethnic groups, including Black patients. CCMS’s President and Chief Executive Officer, Emory X. Brooks, is a Black man.

The proposed sublease required the Co-Op board’s approval. CCMS and Oxford negotiated the sublease, and Brooks signed it on December 18, 2019. Oxford then described CCMS to the Co-Op’s managing agent and board as a stable, low-traffic, mostly nine-to-five tenant that would use the space for administrative offices. CCMS’s later application described a licensed outpatient clinic with approximately 50 daily customers and 200 weekly customers, operating Monday through Thursday from 9 a.m. to 8 p.m. and Friday and Saturday from 9 a.m. to 5 p.m.

The board interviewed Brooks on January 14, 2020. He described the planned outpatient clinic, its psychiatrists, its approximately 300 adult patients, its hours, and its security plans. According to Brooks, a board member raised a recent incident involving a mentally ill Black man who attacked people with a machete, and another board member asked whether clients would pose a risk to the board members’ clients. The board members who attended the interview voted unanimously not to approve the sublease. Paturet was traveling overseas, did not attend the interview, and did not vote.

Prior and Current Motions

In a prior related proceeding, the court dismissed CCMS’s claims against the Oxford Defendants because CCMS had not adequately alleged that they acted with the intent required for racial discrimination. After discovery ended, the remaining Co-Op Defendants moved for summary judgment, and Paturet filed a separate summary-judgment motion.

Summary judgment is a decision entered without a trial when there is no genuine dispute about a fact that could affect the result and the moving party is entitled to judgment under the law. The court must view the evidence favorably to the party opposing the motion, but that party must present evidence from which a reasonable jury could rule in its favor.

Legal Standard

CCMS’s claims arose under 42 U.S.C. §§ 1981 and 1982. Section 1981 protects equal rights to make and enforce contracts, while Section 1982 protects equal rights to purchase, lease, sell, hold, and convey property. The court applied the burden-shifting framework commonly used in discrimination cases.

At the stage of summary judgment, CCMS had to produce enough evidence for a reasonable jury to find that the defendants intentionally discriminated against it because of race. If CCMS made that initial showing, the defendants would have to provide legitimate, nondiscriminatory reasons for their actions. CCMS would then have to show that those reasons were a pretext—meaning a false explanation used to conceal discrimination.

Co-Op Defendants’ Motion

The court held that CCMS failed to make the required initial showing of racial discrimination. CCMS relied on two comments made during the board interview, deposition statements by a board member, and the board’s requirement that CCMS submit an application and participate in an interview.

The court concluded that the interview comments did not establish racial intent. The court treated the comments as reflecting concerns about CCMS’s mentally ill patients and the possibility of behavioral or safety problems, rather than concerns based on race. The court emphasized that bias against people with mental illness is not the same as racial bias, while stating that it did not endorse such bias.

The court also rejected CCMS’s reliance on a board member’s references to clients with “criminal backgrounds” and to counseling for children of “crack addicts.” Although the court recognized that such language can be associated with racial stereotypes, it found that the statements’ context showed race-neutral concerns about the clientele Brooks had described. The court found no evidence that the board member was characterizing CCMS’s clients as having criminal backgrounds because of their race.

The court further rejected CCMS’s argument that the board had planned to approve a different subtenant but created extra requirements specifically to reject CCMS. The record showed that the board did not learn that Oxford had found a sublease applicant until December 19, 2019, and there was no evidence that the board had been prepared to approve a subtenant before learning that the applicant was CCMS. The court found that CCMS’s belief that approval was imminent came from Oxford’s assurances, not from the board.

The court also found no evidence that CCMS was treated differently from Oxford’s prior subtenants. The record indicated that a signed lease, application, meeting, and formal board approval were required for those subtenants as well. The court therefore concluded that CCMS had not established a prima facie case, meaning an initial legally sufficient showing, of racial discrimination.

The court added that even if CCMS had made that initial showing, CCMS could not prove that the Co-Op Defendants’ stated reasons were pretextual. The defendants identified four reasons for rejecting the sublease: CCMS would use the premises as a clinic rather than merely as administrative offices; its patients presented what the board viewed as an increased risk of violence; its patient volume was comparatively high; and its operating hours exceeded the building’s functional hours.

The court found that CCMS had not shown these explanations were false or a cover for racial discrimination. The court distinguished the defendants’ concerns about the number of visitors from a general ban on visitors, finding that the defendants focused on the comparatively high volume of patients. The court also found that Brooks’s testimony supported the defendants’ concerns about the clinic’s clientele. Finally, the court held that the board’s decision to interview Brooks did not establish pretext because the application differed significantly from Oxford’s earlier description of CCMS and the board had not made a decision before the interview.

The court therefore granted the Co-Op Defendants’ motion for summary judgment in full.

Paturet’s Motion

Paturet argued that he was entitled to summary judgment because he did not attend the interview or vote on the sublease application. CCMS relied on Oxford’s representations that Oxford had communicated with Paturet about the application. The court found no evidence that Oxford had contacted Paturet or other board members about CCMS before December 19, 2019.

The court further held that, even if Paturet had been involved in the decision, CCMS could not show that racial bias motivated the refusal or that the stated nondiscriminatory reasons were pretextual. The court therefore granted Paturet’s separate motion for summary judgment in full.

Disposition

The court granted both the Co-Op Defendants’ and Paturet’s motions for summary judgment, dismissed CCMS’s claims, directed the Clerk of Court to terminate the pending motions, and ordered the case closed. The opinion did not state that the dismissal was with or without prejudice.