Boyd v. Lefrak Organization

509 F.2d 1110
CourtCourt of Appeals for the Second Circuit
DecidedJanuary 22, 1975
DocketNo. 201, Docket 74-1660
StatusPublished
Cited by23 cases

This text of 509 F.2d 1110 (Boyd v. Lefrak Organization) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Boyd v. Lefrak Organization, 509 F.2d 1110 (2d Cir. 1975).

Opinions

HAYS, Circuit Judge:

Plaintiffs commenced this action seeking injunctive and declaratory relief on the ground that the use by The Lefrak Organization (“Lefrak”) and Life Realty, Inc. (“rental office”) of certain financial criteria to determine eligibility for tenancy in their apartments violated the Civil Rights Act of 1968, 42 U.S.C. § 3601 et seq. (1970) (“Fair Housing Act”) and the Civil Rights Act of 1866, 42 U.S.C. § 1982 (1970) (“Cijdl Rights Act”). The named plaintiffs, black recipients of public assistance in New York City, whose applications to rent apartments were rejected by defendants, sue on behalf of “all public assistance recipients within the New York Metropolitan Area who have sought or may seek to rent accommodations in the residential buildings owned or operated by the Lefrak interests.” Defendants are operators of 119 buildings within the City of New York, containing 15,484 apartments, with rental ranges running from $140 to $400 per month. The financial standard challenged herein is the requirement, applied by defendants in the rental of all their apartments, that an applicant, or applicant and spouse, have a weekly net income1 equal to at least 90% of the monthly rental of the apartment applied for (“the 90% rule”) or, alternatively, obtain a co-signer of the lease whose weekly net income is equal to 110% of a month’s rent (“co-signer requirement”).2 The rental office and Lefrak appeal from a judgment entered in the United States District Court for the Eastern District of New York, after a trial before the Honorable Tom C. Clark, Associate Justice of the United States Supreme Court, retired (sitting by designation), without a jury. The court below declared the financial criteria used by the rental office and Lefrak to be in violation of the Fair Housing Act and the Civil Rights Act of 1866, and enjoined defendants from applying the 90% rule and co-signer requirement to plain[1112]*1112tiffs and members of the class they represent. We reverse.

On August 6, 1970, the United States of America, by the Attorney General, commenced an action under the Fair Housing Act, 42 U.S.C. § 3601 et seq., to prevent defendants from continuing an alleged pattern and practice of resistance to that statute. United States of America v. Life Realty, Inc., Civ. No. 70 — 964 (E.D.N.Y.). Appellants denied the allegations of the complaint. The Government’s suit was concluded on January 28, 1971, without an adjudication on the merits, by a consent decree under which the rental office and Lefrak agreed to comply with the Fair Housing Act, to accept applications for apartments regardless of the race of the applicant, to maintain records of applicants for apartments in Brooklyn by race, and to apply to all applicants an eligibility requirement that an applicant’s net weekly income be equal to 90% of a month’s rent (the 90% rule).3 The consent decree remained in effect until March 2, 1973, at which time the court (Weinstein, J.) on motion of defendants, unopposed by the Government, dissolved the consent decree and dismissed the action with prejudice.

In July of 1971, appellee Dorothy Boyd attempted to rent one of appellants’ apartments and was refused.4 Mrs. Boyd thereupon moved to intervene in the original action commenced by the Department of Justice. That motion was denied by the court (Weinstein, J.) which directed that Mrs. Boyd’s application for intervention be treated as commencing a separate action. With leave of court, Mrs. Boyd filed an amended complaint on January 3, 1972.5

In March, 1972, Inez Stoney attempted to rent one of appellants’ apartments and was denied an apartment because she did not meet the 90% rule and did not have an acceptable guarantor. On March 18, 1972, Mrs. Boyd moved to have this action declared a class action and Miss Stoney moved to intervene. Judge Weinstein granted both motions, and the case was subsequently heard by Mr. Justice Clark who found in favor of plaintiffs.

The Fair Housing Act prohibits discrimination in housing because of “race, color, religion, or national origin.” 42 U.S.C. § 3604 (1970). Plaintiffs argue that defendants by utilizing the 90% rule have violated this prohibition. They reason that the 90% rule excludes all public assistance recipients except for the very small number who can obtain an acceptable co-signer, that a large majority of public assistance recipients in New York City are black or Puerto Rican, and that therefore the use of the 90% rule is racially discriminatory. The premise of plaintiffs’ argument is that “[wjelfare recipiency . . . must be seen as the ‘functional equivalent’ of race.” Appellee’s brief at 36. Such an equivalency between race and income has been rejected by the Supreme Court in James v. Valtierra, 402 U.S. 137, 91 S.Ct. 1331, 28 L.Ed.2d 678 (1971). Plaintiffs in that case, relying on a line of reasoning simi[1113]*1113lar to that advanced by plaintiffs here, challenged an article of the California state constitution which provided that no low-rent housing projects should be developed, constructed or acquired by a state public body until the project was approved by the majority of those voting at a community election. Despite implicit recognition of the correlation between racial minority and low income, the Court refused to equate the two. factors. The Court, in upholding the validity of the provision, said: “The Article requires referendum approval for any low-rent public housing project, not only for projects which will be occupied by a racial minority.” Id. at 141, 91 S.Ct. at 1333.

As in Valtierra, supra, the rule under consideration here cannot be said to rest on distinctions based on race. See 402 U.S. at 141, 91 S.Ct. 1331. While blacks and Puerto Ricans do not have the same access to Lefrak apartments as do whites, the reason for this inequality is not racial discrimination but rather the disparity in economic level among these groups. While a showing of a disproportionate effect on nonwhites is sufficient to require application of the compelling state interest standard in the context of an equal protection challenge to’ government action, see, e.g., Hunter v. Erickson, 393 U.S. 385, 391— 392, 89 S.Ct. 557, 21 L.Ed.2d 616 (1969), such an analysis is inappropriate in the context of a purely private action asserting a claim of racial discrimination. A businessman’s differential treatment of different economic groups is not necessarily racial discrimination and is not made so because minorities are statistically overrepresented in the poorer economic groups. The fact that differentiation in eligibility rates for defendants’ apartments is correlated with . race proves merely that minorities tend to be poorer than is the general population. In order to utilize this correlation to establish a violation of the Fair Housing Act on the part of a private landlord, plaintiffs would have to show that there existed some demonstrable prejudicial treatment of minorities over and above that which is the inevitable result of disparity in income. Cf. James v. Valtierra; supra.

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Bluebook (online)
509 F.2d 1110, Counsel Stack Legal Research, https://law.counselstack.com/opinion/boyd-v-lefrak-organization-ca2-1975.