Paige v., 17cv7481

• Decision Date: 14 August 2018
• Docket Number: 17cv7481
• Parties: SHERRON PAIGE, et al., individually and on behalf of all others similarly situated, Plaintiffs, v. NEW YORK CITY HOUSING AUTHORITY, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

SHERRON PAIGE, et al., individually andon behalf of all others similarly situated, Plaintiffs, v. NEW YORK CITY HOUSING AUTHORITY, et al., Defendants.

17cv7481

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

August 14, 2018

OPINION & ORDER

WILLIAM H. PAULEY III, Senior United States District Judge:

Defendants New York City Housing Authority ("NYCHA"), former NYCHA Chairwoman Shola Olatoye, former NYCHA General Manager Michael Kelly, former NYCHA Senior Vice Presidents Brian Clarke and Luis Ponce, and former NYCHA Director Jay Krantz (together, the "NYCHA Defendants"), the City of New York (the "City"), Mayor Bill de Blasio, Deputy Mayors Alicia Glenn and Herminia Palacio, and NYC Commissioners Mary Travis Bassett and Maria Torres-Springer, (together, the "City Defendants") move to dismiss this putative class action arising out of the failure to inspect and remediate lead paint in NYCHA housing.

Plaintiffs bring federal claims under: (1) the Fair Housing Act ("FHA"); (2) the Residential Lead-Based Paint Hazard Reduction Act ("RLPHRA"); and (3) 42 U.S.C. § 1983. Plaintiffs also bring a negligence claim against NYCHA and a professional negligence claim against ATC Associates, Inc. and ATC Group Services, LLC (together, "ATC"), the independent contractors responsible for lead paint inspections and abatement. (See Plaintiffs' Second Amended Complaint, ECF No. 163 ("Compl.") ¶¶ 47-50, 234-254.) Plaintiffs' negligence claims are not implicated by this motion. Defendants contend that Plaintiffs' claims sound in tort and breach of contract, meaning that Plaintiffs fail to state a viable federal claim. The City Defendants also contend that they are not proper parties. For the following reasons, Defendants' motion to dismiss is granted in part and denied in part.¹

BACKGROUND

I. Plaintiffs' Allegations

The allegations in the Second Amended Complaint are accepted as true on this motion. (See Plaintiffs' Second Amended Complaint for Injunctive and Declaratory Relief, Money Damages, and Jury Demand, ECF No. 163 ("Compl.").) NYCHA is a New York state public-benefit corporation and "the largest public housing authority in the United States," managing 326 housing developments and 176,066 apartments. (Compl. ¶¶ 24-25.)

Plaintiffs are four NYCHA tenants with young children: Sherron Paige, Evelyn Gray, Taneequa Carrington, and A.P., as well as Paige's child, K.D. (Compl. ¶¶ 12-22.) Plaintiffs seek to represent a putative class of tenants with young children who resided in NYCHA housing from January 1, 2010 through the present. (Compl. ¶ 176.) Plaintiffs all have at least one child who tested positive for lead exposure. (Compl. ¶¶ 14, 17, 20, 22.)

Plaintiffs allege that since 2012, NYCHA "failed to comply with federal and New York City laws requiring annual lead paint inspections for all dwellings constructed prior to 1960 where young children reside." (Compl. ¶ 126.) In August 2012, NYCHA stopped conducting lead paint inspections. (Compl. ¶ 148.) NYCHA then "falsely certified to the United States Department of Housing and Urban Development (HUD) that it was in compliance with . . .federal law." (Compl. ¶ 127.) In October 2015, the United States Attorney's Office for the Southern District of New York served a Civil Investigative Demand on NYCHA. (Compl. ¶ 124.) In November 2017, the New York City Department of Investigations released a report detailing NYCHA's false certifications to HUD. (Compl. ¶ 127.) NYCHA subsequently admitted employing unqualified lead paint inspectors and failing to inspect common areas of NYCHA buildings. (Compl. ¶¶ 5(e), 128, 130.)

By 2015 or 2016 at the latest, senior NYCHA officials knew that NYCHA was out of compliance with federal and city lead paint laws. (See Compl. ¶¶ 153, 156, 159.) Plaintiffs assert that NYCHA's false certifications "exacerbated the crisis" by concealing it and delaying remedial measures. (Compl. ¶¶ 3, 123.)

Plaintiffs also allege that NYCHA failed to disclose lead paint to tenants as required by federal law. (Compl. ¶¶ 5(f), 69, 133.) Further, Plaintiffs allege that NYCHA's actions "expose[d] families with young children to disproportionately-higher risk of lead-paint poisoning and permanent neurological harm because young children are much more likely to touch and ingest lead paint dust and peeling, chipping paint." (Compl. ¶ 134.) Plaintiffs aver this harm "discouraged families with young children from renting [or] remaining in NYCHA housing." (Compl. ¶ 189.) Finally, Plaintiffs claim that Defendants' false statements to HUD and the public deprived them of the ability to speak out against NYCHA's actions. (Compl. ¶¶ 225-226, 229-230.)

II. Procedural History

Plaintiffs filed this action in September 2017. (See Original Complaint, ECF No. 1.) In the ensuing months, NYCHA's systemic failures erupted in near-daily revelations. In February 2018, Plaintiffs moved for a preliminary injunction, contending that they hadestablished irreparable harm and a likelihood of success on two of their claims: the FHA claim and the procedural due process claim. (See Notice of Motion for Preliminary Injunction, ECF No. 164.) In March 2018, this Court denied Plaintiffs' motion for a preliminary injunction, holding that Plaintiffs did not demonstrate a clear likelihood of success on those claims. See Paige v. N.Y.C. Hous. Auth., 2018 WL 1226024, at *2-5 (S.D.N.Y. Mar. 9, 2018).

LEGAL STANDARD

Defendants move to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). "A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it." Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). Defendants contend that this Court lacks subject-matter jurisdiction over this action because Plaintiffs' federal claims are deficient. "[I]n cases where the asserted basis for subject matter jurisdiction is also an element of the plaintiff's allegedly federal cause of action, [a court] ask[s] only whether—on its face—the complaint is drawn so as to seek recovery under federal law or the Constitution. If so, then [the court] assume[s] . . . a sufficient basis for jurisdiction, and reserve[s] further scrutiny for an inquiry on the merits." Nowak v. Ironworkers Local 6 Pension Fund, 81 F.3d 1182, 1189 (2d Cir. 1996). Plaintiffs bring causes of action under the Constitution and federal law. Therefore, Defendants' motions are properly construed not as asserting a lack of subject-matter jurisdiction, but rather that the federal claims fail on the merits.

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court todraw the reasonable inference that the defendant is liable for the misconduct alleged. . . . [I]t asks for more than a sheer possibility that a defendant has acted unlawfully." Nguyen v. New Link Genetics Corp., 297 F. Supp. 3d 472, 482 (S.D.N.Y. 2018) (citing Iqbal, 556 U.S. at 678.) "[D]etermining whether a complaint states a plausible claim for relief will be a context-specific task that requires the reviewing court to draw on its experience and common sense." Harris v. Mills, 572 F.3d 66, 72 (2d Cir. 2009) (citation and alterations omitted).

On a motion to dismiss, a court "accept[s] as true all of the factual allegations contained in the complaint, . . . draw[s] all reasonable inferences in the plaintiff's favor, . . . and constru[es] any ambiguities in the light most favorable to upholding the plaintiff's claim." Duplan v. City of New York, 888 F.3d 612, 617 (2d Cir. 2018) (citations omitted). A court may only consider the facts stated on the face of the complaint, documents attached by reference, matters of which judicial notice may be taken, and documents "the plaintiffs either possessed or knew about and upon which they relied in bringing the suit." Rothman v. Gregor, 220 F.3d 81, 88 (2d Cir. 2000); Leonard F. v. Isr. Disc. Bank of New York, 199 F.3d 99, 107 (2d Cir. 1999).

DISCUSSION

I. Fair Housing Act

Plaintiffs allege that NYCHA's failure to inspect and remediate lead paint caused or will cause a disparate impact on families with young children and "discouraged families with young children from renting [or] remaining in NYCHA housing." (Compl. ¶ 189.) The FHA makes it unlawful to "discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race, color, religion, sex, familial status, or national origin." 42 U.S.C. § 3604(b). Familial status is defined as "one or more individuals (who have not attained the age of 18 years)being domiciled with—(1) a parent or another person having legal custody of such individual or individuals; or (2) the designee of such parent or other person having such custody." 42 U.S.C. § 3602(k). In other words, familial status protects families with children under the age of eighteen, and also applies to pregnant persons. 42 U.S.C. § 3602(k).

The Supreme Court recently held that the FHA encompasses disparate impact discrimination. See Tex. Dep't of Hous. & Cmty. Affairs v. Inclusive Communities Project, Inc., 135 S. Ct. 2507, 2518 (2015). Accordingly, housing practices with a discriminatory effect may violate the FHA regardless of discriminatory motive. "A practice has a discriminatory effect where it actually or predictably results in a disparate impact on a group of persons or creates, increases, reinforces, or perpetuates segregated housing patterns . . . ." 24 C.F.R. § 100.500(a). At the pleading stage, a plaintiff must "allege facts . . . or produce statistical evidence demonstrating a causal connection"...