216 East 29th Street Trust v. City of New York

• Court: Court of Appeals for the Second Circuit
• Decided: November 24, 2025
• Docket: 25-465
• Status: Unpublished

Opinion

25-465-cv 216 East 29th Street Trust v. City of New York

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 24th day of November, two thousand twenty-five.

Present:

GUIDO CALABRESI, ROBERT D. SACK, EUNICE C. LEE, Circuit Judges. _____________________________________

216 EAST 29TH STREET TRUST,

Plaintiff-Appellant,

v. No. 25-465-cv

CITY OF NEW YORK,

Defendant-Appellee,

SAFE HORIZON, INC.,

Intervenor-Defendant-Appellee. *

_____________________________________

* The Clerk of Court is respectfully directed to amend the official caption as set forth above. For Plaintiff-Appellant: CURTIS A. JOHNSON, Bond, Schoeneck & King, PLLC, Rochester, NY.

For Defendant-Appellee: ELISA DRUKER (Richard Dearing, Rebecca L. Visgaitis, on the brief), for Muriel Goode-Trufant, Corporation Counsel of the City of New York, New York, NY.

For Intervenor-Defendant-Appellee: EVAN HENLEY (Edward Josephson, on the brief), The Legal Aid Society, New York, NY.

Appeal from a January 29, 2022, judgment of the United States District Court for the

Southern District of New York (Ramos, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the judgment of the district court is AFFIRMED.

Plaintiff-Appellant 216 East 29th Street Trust (the “Trust”) brought the underlying action

against the City of New York, seeking a declaratory judgment invalidating Local Law 10, a city

law banning income-source discrimination, as unconstitutional in violation of the Fourth

Amendment and/or preempted by federal law. See N.Y.C. Local Law 10/2008; N.Y.C. Admin.

Code § 8-107(5). Safe Horizon, Inc., a non-profit organization serving housing-insecure New

Yorkers, intervened. The City and Safe Horizon each moved to dismiss the Trust’s complaint

for lack of jurisdiction and for failure to state a claim. The Trust cross-moved for summary

judgment. The Trust now appeals from the district court’s decision granting the motions to

dismiss for lack of jurisdiction on Younger abstention, standing, and ripeness grounds, and

dismissing the Trust’s cross-motion for summary judgment as moot. We assume the parties’

familiarity with the remaining underlying facts, the procedural history, and the issues on appeal,

2 to which we refer only as necessary to explain our decision to affirm.

BACKGROUND

In 2008, the City Council of New York City (the “City”) passed a law amending the New

York City Human Rights Law (“NYCHRL”) to ban income-source discrimination in housing.

See N.Y.C. Local Law 10/2008; N.Y.C. Admin. Code § 8-107(5). The law aims to prevent

landlords from discriminating against prospective tenants who intend to use government subsidies

to pay some or all of their rent. The Emergency Housing Voucher program is one type of

government housing subsidy and is administered through the federal program commonly known

as Section 8. The U.S. Department of Housing and Urban Development (“HUD”) provides

funding to local public housing authorities (“PHAs”), who then administer Section 8 programs,

such as the Emergency Housing Voucher program. 24 C.F.R. § 982.1. When an individual

receives a Section 8 voucher, they must locate their own housing within a certain timeframe, or

else their voucher may expire. Id. §§ 982.1(a)(2), 982.302, 982.303.

When a voucher recipient signs a lease, the landlord is required to enter into a Housing

Assistance Payment (“HAP”) contract with the relevant PHA. Id. §§ 982.1(b), 982.451. HAP

contracts must be on HUD’s required form. Id. § 982.451(a)(1); see also App’x at 115–26. The

form contract requires that the unit owner maintain the housing unit according to Section 8’s

Housing Quality Standards (“HQS”), which in turn require the housing unit to meet certain criteria,

such as having a functioning smoke detector and appliances, a properly equipped kitchen, proper

ventilation, fire exits, and more. See 24 C.F.R. §§ 5.703, 982.1(a)(2); App’x at 120. Before a

lease term begins for a voucher holder, the PHA must inspect the unit in question to determine that

it satisfies the HQS. 24 C.F.R. § 982.305(b).

3 In addition, pursuant to the HAP contract, unit owners “must provide any information

pertinent to the HAP contract that the PHA or HUD may reasonably require.” App’x at 120.

The HAP contract also requires that “[t]he PHA, HUD and the [federal] Comptroller General . . .

have full and free access to the contract unit and the premises, and to all accounts and other records

of the owner that are relevant to the HAP contract.” Id. Further, unit owners “must grant such

access to computerized or other electronic records, and to any computers, equipment or facilities

containing such [relevant] records, and must provide any information or assistance needed to

access the records.” Id.

Relevant here, any person who believes they have experienced income-source

discrimination in violation of Local Law 10 may file a complaint with the New York City Human

Rights Commission (the “Commission”), which enforces the NYCHRL. N.Y.C. Admin. Code

§§ 8-101, 8-109. After an individual files a complaint, the respondent files an answer, and the

Commission investigates the complaint’s allegations to determine if there is probable cause. Id.

§§ 8-111, 8-114, 8-116. If there is, the case is transferred to an administrative law judge at the

Office of Administrative Trials and Hearings (“OATH”) for adjudication. Id. At OATH, the

parties can seek discovery and engage in motion practice before the administrative law judge, who

ultimately issues a report and recommendation that includes findings of fact and conclusions of

law. Id. §§ 8-117, 8-119, 8-120. The Commission then reviews the administrative law judge’s

report and issues an order, which can include relief and civil penalties for the victim if the

Commission determines that unlawful discrimination has occurred. Id. §§ 8-120, 8-126.

Judicial review of Commission orders is available through an Article 78 proceeding in the state

court system. Id. § 8-123; see Marine Holdings, LLC v. N.Y.C. Comm’n on Hum. Rts., 31 N.Y.3d

4 1045, 1046 (2018).

In this case, on July 26, 2023, Emergency Housing Voucher recipient Dmitri Derodel

contacted the Trust’s property manager seeking to rent an apartment in the building owned by the

Trust. The property manager was not familiar with Local Law 10 and told Derodel via email that

the Trust “d[id] not accept vouchers.” App’x at 54. Derodel reported the refusal to the

Commission, which in turn informed the property manager that its refusal to rent to Derodel based

on his source of income violated the City’s anti-discrimination law. The Trust’s property

manager then agreed to move forward with Derodel’s application. Because the owner of the unit

was required to sign certain documents to participate in Section 8, the Commission reached out to

the Trust for signature.

Upon learning that the Emergency Housing Voucher program was governed by Section 8,

however, the Trust declined to execute the documents; instead, according to the Commission, the

Trust “made various excuses for failing to . . . provide the necessary signatures.” App’x at 55.

After several months of back-and-forth between the Trust and the Commission, the Commission

informed the Trust that Derodel’s Section 8 voucher was in jeopardy of cancellation if the Trust

did not submit the required documentation by January 26, 2024. The Commission further

informed the Trust that it would proceed with filing an administrative complaint against the Trust

for lawful source of income discrimination if it did not complete the forms by the deadline.

The Trust did not complete the necessary paperwork by the January 26 deadline. Instead,

on January 26, before any complaint was filed with the Commission, the Trust filed this lawsuit.

Ten days later, Derodel signed and filed the administrative complaint before the Commission.

5 DISCUSSION

On appeal, the Trust argues that Local Law 10 is unconstitutional because it coerces

landlords to consent to searches of their rental properties and their books and records through the

Section 8 program. It further argues that Local Law 10 is preempted by the federal law provisions

of Section 8 and its implementing regulations. For the reasons described below, however, we

agree with the district court that dismissal of the Trust’s complaint on the basis of Younger

abstention is proper here. See Younger v. Harris, 401 U.S. 37 (1971). Because dismissal is

appropriate on Younger grounds, we do not address the merits of the Trust’s claims.

“We review de novo the essentially legal determination of whether the requirements for

abstention have been met.” Disability Rts. N.Y. v. New York, 916 F.3d 129, 133 (2d Cir. 2019)

(internal quotation marks omitted). When a “defendant moves for dismissal under Rule 12(b)(1)

. . . as well as on other grounds, the court should consider the Rule 12(b)(1) challenge first since if

it must dismiss the complaint for lack of subject matter jurisdiction, the accompanying defenses

and objections become moot and do not need to be determined.” United States ex rel. Kreindler

& Kreindler v. United Techs. Corp., 985 F.2d 1148, 1155–56 (2d Cir. 1993) (internal quotation

marks omitted).

“In general, ‘federal courts are obliged to decide cases within the scope of federal

jurisdiction.’” Disability Rts. N.Y., 916 F.3d at 133 (quoting Sprint Commc’ns, Inc. v. Jacobs,

571 U.S. 69, 72 (2013)). That said, under the doctrine of Younger abstention, there are “certain

instances in which the prospect of undue interference with state proceedings counsels against

federal relief.” Id. Thus, federal courts “should abstain from exercising jurisdiction only in three

‘exceptional circumstances’ involving (1) ‘ongoing state criminal prosecutions,’ (2) ‘certain civil

6 enforcement proceedings,’ and (3) ‘civil proceedings involving certain orders uniquely in

furtherance of the state courts’ ability to perform their judicial functions.’” Falco v. Justs. of the

Matrimonial Parts of Supreme Ct. of Suffolk Cnty., 805 F.3d 425, 427 (2d Cir. 2015) (quoting

Sprint Commc’ns, Inc., 571 U.S. at 78)). If one of those three “exceptional circumstances” is

present, courts then consider whether the pending state proceeding “implicates an important state

interest” and whether “the state proceeding affords the federal plaintiff an adequate opportunity

for judicial review of his or her federal constitutional claims.” Id.

The Trust first argues that Younger is inapplicable because, according to the Trust, Younger

abstention cannot apply to facial challenges, and it brings a facial challenge to Local Law 10. We

assume arguendo that the Trust’s challenge is facial. But, contrary to the Trust’s assertion, there

is no rule that Younger abstention cannot apply to facial challenges. Indeed, Younger itself

involved a facial challenge. See Younger, 401 U.S. at 40, 49–53 (abstaining even though the case

presented the issue of whether the underlying state law was “constitutional on its face”); see also

Lawson v. City of Buffalo, 52 F. App’x 562, 563 (2d Cir. 2002) (affirming dismissal of facial

challenge on Younger grounds). As a result, assuming arguendo that the Trust brings a facial

challenge, Younger may still apply.

The question, then, is whether Younger abstention in fact applies here. The Trust does not

dispute that there is a pending state enforcement proceeding that implicates an important state

interest. See Falco, 805 F.3d at 427. Thus, the only remaining factor for determining abstention

is whether the pending state proceeding affords the Trust adequate opportunity for judicial review

of its constitutional claims. See id. The Trust argues that it does not. We disagree.

As explained above, judicial review of Commission orders is available through Article 78

7 proceedings in the state court system. See N.Y.C. Admin. Code § 8-123; Marine Holdings, LLC,

31 N.Y.3d at 1046 (2018). When a plaintiff brings an Article 78 proceeding for review of an

administrative action and seeks to include a facial constitutional challenge, the state court can

convert the proceeding to a hybrid Article 78/declaratory judgment proceeding in which it can

adjudicate facial constitutional challenges. Indeed, the New York state courts regularly do so.

See, e.g., Pilarz v. Helfer, 148 A.D.3d 1714, 1715–16 (4th Dep’t 2017) (adjudicating a facial

challenge through such a proceeding); MHC Greenwood Village NY, LLC v. County of Suffolk, 58

A.D.3d 735, 738–39 (2d Dep’t 2009) (same). The Trust, then, has the opportunity to seek judicial

review of its facial claims through a hybrid Article 78/declaratory judgment proceeding after the

conclusion of the Commission proceeding. As a result, the Trust has adequate opportunity for

judicial review of its facial constitutional claims.

The same is true if the Trust’s claims are more appropriately deemed as-applied challenges.

As-applied challenges can be adjudicated through the OATH process, and OATH’s determination

can be reviewed through Article 78 proceedings. See Memorandum Decision at 22–27, Dep’t of

Sanitation v. Ponzio, OATH Index. No. 265/05 (OATH Mar. 22, 2005), as modified by Comm'r

Dec. (Apr. 11, 2005), https://nyc-acc.mindbreeze.com/search/apps/cityadmin/documents/oath/05-

265.pdf [https://perma.cc/EEA8-97ET] (adjudicating the constitutionality of a search); Univ. Club

v. City of New York, 842 F.2d 37, 40 (2d Cir. 1988) (“New York case law abundantly supports the

conclusion that constitutional claims arising from the application of a statute may be raised in an

Article 78 petition.”); cf. Hudson Shore Assocs. Ltd. P’ship v. New York, 139 F.4th 99, 110 (2d

Cir. 2025) (“Article 78 has been used for decades to challenge the reasonableness of regulatory

searches under the Fourth Amendment.”) (collecting cases).

8 The same is true for the Trust’s preemption challenge, which can be addressed through the

OATH proceeding in the first instance, and then reviewed in the state courts through Article 78.

See Memorandum Decision at 4–5, Comm’n on Hum. Rts. ex rel. Shmushkina v. New Brooklyn

Realty, OATH Index Nos. 2541/08, 2542/08, 2543/08 (OATH Jan. 2, 2009),

https://archive.citylaw.org/wp-content/uploads/sites/17/oath/08_Cases/08-2541md.pdf

[https://perma.cc/V7GJ-UN2Q] (adjudicating a preemption challenge to Local Law 10); Univ.

Club, 842 F.2d at 40. Thus, the district court correctly concluded that “the state proceeding

affords the federal plaintiff an adequate opportunity for judicial review of [its] federal

constitutional claims,” and abstention is therefore appropriate. Falco, 805 F.3d at 427.

* * *

For the reasons set forth above, we conclude that abstention is proper in this case.

Because we affirm on Younger grounds, we do not reach the other grounds that the district court

relied on for dismissal—namely, ripeness and standing. See M.O. v. N.Y.C. Dep’t of Educ., 793

F.3d 236, 245 (2d Cir. 2015) (“[W]e are entitled to affirm the judgment on any basis that is

supported by the record.” (quotation marks omitted)). Moreover, because we affirm the district

court’s dismissal on Rule 12(b)(1) grounds, we do not reach the parties’ arguments on the merits

of this case. Daly v. Citigroup Inc., 939 F.3d 415, 426 (2d Cir. 2019). Accordingly, we

AFFIRM the judgment of the district court.

FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Court