Court Reverses Itself on Liability for Racial Discrimination

In a mystifying reversal, the U.S. Court of Appeals for the Second Circuit has “withdrawn” its recent decision decreeing that landlords – including co-op and condo boards – face liability under the Fair Housing Act if they fail to address racial discrimination between residents. One attorney described that decision as a “big deal,” with as-yet unknowable consequences for co-op and condo boards.

That May 4 decision was the culmination of Francis vs. Kings Park Manor Inc., in which a black tenant at a Long Island rental property was subjected to “a brazen and relentless campaign” of racial abuse by a fellow white tenant, including harassment, repeated use of the N-word, and at least one death threat. The black resident, fearing for his personal safety, contacted the police and the landlord several times. The landlord and management did nothing other than advising him to continue calling the police. The court’s ruling said, in effect, that landlords and boards cannot ignore such behavior and must take steps to put an end to it.

One month later, on April 5, the court issued this terse statement: “It is hereby ORDERED that this Court’s decision and opinions, issued on March 4, 2019, are WITHDRAWN.”

The decision left many in the legal community scratching their heads. “I’ve never seen a court call something back without someone asking them to do it, either through a motion or an appeal,” says Eric Goidel, a senior partner at the law firm Borah Goldstein Altschuler Nahins & Goidel. “I disagreed with the original decision, but the court can’t just ignore it.”

Reversal or no reversal, Goidel reminds co-op boards that they need to be vigilant about offensive behavior by residents. “A co-op board wants to be proactive with shareholders who are acting offensively,” Goidel says. “I would encourage boards to take action – possibly terminating the proprietary lease and seeking to evict the offender.” Condo boards don’t have such potent weapons.

As for the court’s possible motives behind the sudden reversal, Goidel could only speculate. “No one knows why they pulled it back,” he says. “We have to try to divine why they did this.”