Comm N on Human Rights Ex Rel.Shmushkina V. New Brooklyn Realty

1

Comm’n on Human Rights ex rel.Shmushkina v. New Brooklyn Realty

OATH Index Nos. 2541/08, 2542/08 & 2543/08, mem. dec. (Jan. 2, 2009)

Undisputed facts established that landlord refused to accept Section 8 voucher from tenant. Landlord’s challenges to discrimination law rejected and Commission’s motion for summary judgment granted as to liability.

______

NEW YORK CITY OFFICE OF

ADMINISTRATIVE TRIALS AND HEARINGS

In the Matter of

COMMISSION ON HUMAN RIGHTS

EX REL.

ZOYA SHMUSHKINA

Petitioner

- against -

NEW BROOKLYN REALTY, LLC,

JOHN ILIBASSI & JOHN MIKLO

Respondent

______

MEMORANDUMDECISION

JOHN B. SPOONER,Administrative Law Judge

This is a complaint brought by the Commission on Human Rights on behalf of the complainant, Ms. Zoya Shmushkina, pursuant to the Administrative Code. Respondent New Brooklyn Realty, LLC owns the building where complainant has resided since 2004. Respondent John Ilibassi is the principal shareholder of New Brooklyn and John Miklo is New Brooklyn’s managing agent. The complaint alleges that respondents refused to accept complainant’s section 8 voucher in payment for her monthly, rent, in violation of section 8-107(5) of the Administrative Code.

On October 1, 2008, petitioners moved for summary judgment, contending that section 8-107(5) of the Administrative Code prohibits respondents from refusing to accept Section 8 vouchers as a source of payment for rent. Respondents opposed this motion, arguing that section 8-107(5) applies to prospective tenants rather than existing tenants and that the statute is preempted by both federal and state law.

For the reasons explained below, petitioner’s motion for summary judgment is granted as to liability.

ANALYSIS

The relevant facts are not in dispute. On February 1, 2004, the complainant moved into an apartment at 115 Brightwater Court,Brooklyn, New York, a building owned by respondent New Brooklyn (Pet. Ex. A: Complainant’s Affidavit). The one-bedroom apartment is rent-stabilized. Complainant’s current lease began on February 1, 2008, and extends through January 31, 2010. Complainant is a tenant in good standing and there are currently no arrears of rent. On May 31, 2007, complainant received a Section 8 voucher from the New York City Housing Authority (“NYCHA”) (Pet. Ex. B). The voucher was issued for a one-bedroom apartment, without utilities. On or about April 2008, complainant requested that respondent John Ilibassi, complainant’s landlord and a shareholder in New Brooklyn, accept her section 8 voucher as part payment for her monthly rent and respondents refused (Pet. Ex. A). Complainant’s voucher remains valid (Pet. Ex. C: NYCHA letter).

A motion for summary judgment will be granted where there are no disputed issues of
material fact and the moving party is entitled to relief as a matter of law. Zuckerman v. City of New York, 49 N.Y.2d 557, 427 N.Y.S.2d 595 (1980); Tankard v. Abate, 213 A.D.2d 320, 624 N.Y.S.2d 161 (1st Dep’t 1995). In the absence of a material factual dispute, as is the case here, there is no need for an evidentiary hearing. See, e.g., Dep’t of Correction v. Wilson, OATH Index No. 810/94, mem. dec. at 2 (Mar. 28, 1994). In this case, while admitting complainant’s factual allegations, respondents opposedsummary judgment on three legal issues, one involving an interpretation of the relevant statute and the other two issues involving preemption by federal and state laws.

Section 8-107(5)(a)(1) makes it an unlawful discriminatory practice “[t]o refuse to . . . rent, lease, approve the . . . rental or lease or otherwise deny to or withhold from any person or group of persons such a housing accommodation or an interest therein because of the actual or perceived . . . lawful source of income of such person or persons . . . .” Section 8-107(5)(a)(2) prohibits discrimination “against any person . . . because of any lawful source of income of such person . . . in the terms, conditions or privileges of the sale, rental or lease of any such housing accommodation or an interest therein or in the furnishing of facilities or services in connection therewith.”

Respondentsfirst argue that these sections apply to new tenants but not to tenants already in possession. Respondents contend that, because an existing tenant is already renting the premises, this tenant cannot be denied the accommodation. Resolution of this argument involves construing the legislative intent of the words used in the statute. SeeAgioritis v. Saytanides, 52 A.D.2d 128, 135, 383 N.Y.S.2d 304, 309 (1st Dep’t 1976) (“A statute should not be extended by construction beyond its express terms or reasonable implications of its language.”).

Local Law 10 amended the above sections of the Administrative Code in March 2008, adding “lawful source of income” as a protected class. Section 8-102(25) defines “lawful source of income” as “income derived from . . . any form of federal, state, or local public assistance or housing assistance including section [sic] 8 vouchers.” This law thus makes it illegal to discriminate against or refuse housing to “any person” on the basis of that person’s lawful source of income. Since the law expressly protects any person on the basis of lawful source of income, it covers current and prospective tenants alike. There is thus no logical basis to exclude existing tenants from the law’s protections. Because the complainant is a Section 8 voucher recipient, any refusal by respondents to accept complainant’s voucher as payment for her rent would amount to discrimination and denial of a housing accommodation under sections 8-107(5)(a)(1) and (2).

At least one New York court has concluded that Local Law 10 requires landlords to accept Section 8 vouchers from both prospective and existing tenants. In Rizzuti v. Hazel Towers Co., 2008 N.Y. Misc. Lexis 2176 (Sup. Ct. N.Y. Co. Mar. 27, 2008),tenants, after becoming disabled and unemployed, were unable to pay the rent for their apartment, which they had occupied for decades, and sought to utilize Section 8 vouchers. Rejecting the “questionable logic” of the propositionthat section 8-107 applied only to prospective tenants rather than existing tenants, the court noted that the legislature amended the section after finding that “some landlords refuse to offer available units because of the source of income tenants, including current tenants, plan to use to pay the rent.” The court thus concluded that the protections afforded against income discrimination “expressly” applied to both prospective and current tenants. Rizzuti, 2008 N.Y. Misc. Lexis 2176, at *5. See also Rosario v. Diagonal Realty, 8 N.Y.3d 755 (2007)(landlord required to accept an existing tenant’s Section 8 voucher).

Accordingly, respondents’ contention that the law was not intended to include existing tenants must be rejected.

Respondents next argue that Local Law 10 is preempted by federal law. Respondents cite to Congress’s 1996 repeal of two Section 8 provisions, “take one take all” and “endless lease,” for the proposition that Congress’s intent was to make the Section 8 program voluntary for landlords. Accordingly, respondent argues, because Local Law 10 mandates landlord participation, the local law “directly conflicts and interferes with the methods Congress designed for Section 8” (Resp. Brief at 12).

In deciding whether local law is preempted by federal law, the “sole task is to ascertain the intent of Congress.” California Federal Savings & Loan Association v. Guerra, 479 U.S. 272, 280 (1987); see also Guice v Charles Schwab & Co., 89 N.Y.2d 31, 39 (1996). Congressional preemptive intent may be discerned in three ways: “(1) by express language in a federal statute, (2) implicitly, where the federal legislation is so comprehensive in scope that it fully occupies the field of its subject matter jurisdiction (field preemption), or (3) implicitly, where the state or local law actuallyconflicts with the federal law (conflict preemption). Mother Zion Tenant Association v. Donovan, 865 N.Y.S.2d 64, 66-67 (1st Dep’t 2008); Barnett Bank of Marion City, N. A. v Nelson, 517 U.S. 25, 31 (1996).

In this case, respondents’ assertion of a conflict between the federal law and local law has been rejected by numerous courts, including Maryland, Massachusetts, and New Jersey. MontgomeryCounty v. Glenmont Hill Associates, 402 M.D. 250, 268 (2007); Attorney General v. Brown, 400 Mass. 826 (1987); FranklinTower One, LLC v. N.M., 157 N.J. 602 (1999). As explained in Montgomery, in order to find conflict preemption, one would have to derive an intent to cast aside the stated goal of increasing low income housing in favor of voluntary participation by landlords—an intent “belied by the Federal law itself and . . . unsupported by logic, any rational notion of public policy, and existing case law.” 402 M.D. at 268-69.

In Brown, the Supreme Judicial Court of Massachusetts found that a local law similar to the one at issue here, far from conflicting with the federal law, shared the common goal of providing “affordable, decent housing for those of low income.” 400 Mass. at 829-30. Similarly, in FranklinTower, the New Jersey Supreme Court explained that “the voluntary nature of the Section 8 program is not at the heart of the federal scheme.” 157 N.J. at 619.

Although the New York courts have not addressed the precise federal preemption argument raised by respondents, decisions on parallel laws suggest that no preemption would be found here. In Rosario v. Diagonal Realty, LLC, 8 N.Y.3d 755, 763 (2007), the Court of Appeals explained that the Senate’s intent in repealing the “take one take all” and “endless lease” provisions “was to remove federal obstacles to landlords’ participation in the Section 8 program.” The Senate did not anticipate adversely affecting low income households, as “‘protections [would] be continued under State, tribal, and local tenant laws.’” Id.(quoting S. Rep. No. 104-195, at 32; S. Rep. No. 105-21, at 36).

In Mother Zion, the First Department considered a local law, which required that owners of Section 8 housing provide tenants with the opportunity to purchase the property at an appraised value should the owner choose to withdraw from the assisted housing program. The court held that this law conflicted with, and was therefore preempted by federal law. However, as petitioner notes, respondents’reliance on Mother Zion is flawed. First, Mother Zion applied to project-based Section 8 programs rather than the tenant-based vouchers implicated by Local Law 10. Additionally, the Mother Zion court distinguished its holding from the Court of Appeals’ holding in Rosario:

Congress's repeal of the “endless lease” provision of Section 8 did not preempt application of state rent regulation laws of general applicability requiring owners to renew stabilized leases on the same terms as the expiring contracts, because legislative and regulatory language expressly contemplated that state and local laws would continue such protections.

55 A.D.3d 333, 865 N.Y.S.2d at 67. Finally, the First Department explained that the law it struck down was also distinguishable from anti-discrimination laws, such as the one here, that had been upheld as not preempted by the high courts of other jurisdictions. Id.; see, e.g., Commission on Human Rights & Opportunities v. Sullivan Association, 250 Conn. 763, 739 A.2d 238 (1999); Brown, 400 Mass. 826; Franklin Tower One, 157 N.J. 602.

Respondents’ assertion, therefore, that Local Law 10 is preempted by federal law runs contrary to both case law and the stated purpose of Section 8, which “has always been to assist in providing housing to low-income families.” FranklinTower, 157 N.J. at 620. Prohibiting landlords from refusing to accept tenants’—whether existing or prospective—Section 8 vouchers as a means to pay their rent in whole or in part neither conflicts with nor frustrates the objectives of Congress in enacting the Section 8 program.

Respondents next assert that, because Local Law 10 creates new rent controls that are “more stringent and restrictive” than those previously in effect, the Law would violate the New York State Urstadt Law. The Urstadt Law provides, in relevant part:

[N]o local law or ordinance shall hereafter provide for the regulation and control of residential rents and eviction in respect of any housing accommodations which are (1) presently exempt from such regulation and control or (2) hereafter decontrolled either by operation of law or by a city housing rent agency, by order or otherwise. No housing accommodations presently subject to regulation and control pursuant to local laws or ordinances adopted or amended under authority of this subdivision shall hereafter be by local law or ordinance or by rule or regulation which has not been theretofore approved by the state commissioner of housing and community renewal subjected to more stringent or restrictive provisions of regulation and control than those presently in effect.

Unconsol. Law § 8605 (2006). Respondents argue that implicit in requiring it to accept section 8 vouchers from tenants would be the requirement that it enter into HAP contracts with the Housing Authority—contracts which impose additional obligations, including restrictions on rent and the termination of the lease should the tenant lose Section 8 benefits.

Respondents’ Urstadt argumentignores the plain language and legislative history of the statute, as well as case law addressing this issue. The Urstadt Law was intended to check New York City attempts, whether by local law or regulation, to expand the set of buildings subject to rent control or stabilization. City of New York v. New YorkState Division of Housing & Community Renewal, 97 N.Y.2d 216, 739 N.Y.S.2d 333 (2001). However, the legislature’s intent in adopting the Urstadt Law was not to prevent municipalities from enacting legislation or regulations for purposes besides rent regulation, even if such legislation or regulations were more stringent than those in effect at the time of its enactment or affected rent controlled housing. See Bryant Westchester Realty Corp. v. Board of Health of the City of New York, 91 Misc.2d 56, 59 (Sup. Ct. N.Y. Co. 1977); see also RoseTowers Realty v. Aviv, 121 Misc. 2d 1016, 1021 (Civ. Ct. Queens Co. 1983) (“the intent of [the Urstadt provisions] was to prevent more stringent economic restrictions from being imposed on owners and not just any restrictions”).

Accordingly, because the objective of Local Law 10 is not to regulate rent, but rather to prohibit landlords from discriminating against tenants on the basis of their source of rent payment, respondent’s claim that Local Law 10 is volative of the Urstadt Law is without merit. See Proposed Int. No. 61-A, § 1 Legislative Intent (making it “illegal to discriminate” “against holders of section 8 vouchers because of prejudices [landlords] hold about voucher holders”).

Conclusion

Since section 8-107(5) of the Administrative Code prohibits respondents from refusing to accept Section 8 vouchers as a source of payment for rent and there are no factual issues in dispute, petitioner’s summary judgment motion as to liability is granted. As agreed at the pretrial conference, the parties are directed to contact the OATH calendar unit within five business days to schedule a trial on the issue of damages.

John B. Spooner

Administrative Law Judge

January 2, 2009

APPEARANCES:

OLIVIA CUGGY, ESQ.

Attorney for Petitioner

HORING WELIKSON & ROSEN

Attorneys for Respondents

BY: NILES C. WELIKSON, ESQ.