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WHEATLEY HTS. NEIGHBORHOOD COALITION v. JENNA RESA

April 5, 1977

WHEATLEY HEIGHTS NEIGHBORHOOD COALITION, et al., Plaintiffs,
v.
JENNA RESALES CO., et al., Defendants



The opinion of the court was delivered by: NEAHER

MEMORANDUM AND ORDER

 NEAHER, District Judge.

 This is a class action brought by the Wheatley Heights Neighborhood Coalition ("the Coalition"), an association of residents of the Wheatley Heights section of the Town of Babylon, New York, and by individual white and black homeowners in that neighborhood. Plaintiffs claim that defendant real estate companies and their employees are engaging in "racial steering" and "blockbusting" in violation of section 804 of the Fair Housing Act of 1968, 42 U.S.C. § 3604; 42 U.S.C. §§ 1981 and 1982; and the Thirteenth Amendment. Jurisdiction is based on 42 U.S.C. § 3612 and 28 U.S.C. § 1343. The complaint alleges that defendants are promoting racial segregation by, inter alia, steering white prospective home buyers away from the Wheatley Heights neighborhood and to predominantly white areas in Babylon, while directing blacks to Wheatley Heights and away from the surrounding areas. Defendants have moved to dismiss the complaint for failure to state a claim upon which relief can be granted. *fn1"

 Wheatley Heights consists primarily of single-family houses built since the early 1960's. Originally a white neighborhood, it is now in a transition period with increasing numbers of minority people purchasing homes in the area. As the rate of sales by whites and purchases by blacks picked up in the mid-1970's, Wheatley Heights residents began to suspect that real estate brokers were fostering these changes by means of racial steering and blockbusting. This led in July 1975 to the formation of the Coalition, with the avowed purpose of halting the discriminatory housing practices of the real estate brokers and promoting a stable, racially integrated community in Wheatley Heights.

 In late 1975 the Coalition undertook a "testing program" of defendants Jenna Resales Co. and Jenna Realty Corp. (collectively, "Jenna") and Easton Home Sales Co. ("Easton"), which were the major real estate companies engaged in selling houses in Wheatley Heights. Several black and white members of the Coalition and volunteers working with Suffolk Housing Services, a civil rights organization, pretended to be interested in homes in Babylon. Allegedly, the black testers were steered to the Wheatley Heights neighborhood while the white testers were shown homes in the surrounding white areas.

 With this evidence in hand, the Coalition and 47 of its members filed the present class action on March 1, 1976. On April 26, 1976 the court granted leave to 54 individuals to intervene as additional plaintiffs, and on September 8, 1976 the court certified this as a class action with the class defined as "all residents within the area of the United States sub-postal zone known as Wheatley Heights in the Town of Babylon. . . ."

 In their motions, defendants do not contest that racial steering violates the Fair Housing Act. Courts previously addressing this question have held that § 3604(a), which makes it unlawful to "refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex or national origin," outlaws racial steering. Zuch v. Hussey, 394 F. Supp. 1028 (E.D. Mich. 1975); Fair Housing Council of Bergen County, Inc. v. Eastern Bergen County Multiple Listing Service, Inc., 422 F. Supp. 1071 (D.N.J. 1976). Even if testers cannot properly claim a violation of § 3604(a) because they are not actually seeking to purchase a home, it is clear they can claim that racial steering as applied to them violates the broader language of § 3604(b), which 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, or national origin." 42 U.S.C. § 3604(b) (emphasis supplied). See Note, Racial Steering: The Real Estate Broker and Title VIII, 85 Yale L.J. 808, 821 n. 48 (1976).

 Rather, defendants' motions are aimed primarily at plaintiffs' assertion that 42 U.S.C. § 3612 confers jurisdiction on this court over the present action. Defendants' argument, in brief, runs as follows. Section 3612 provides the basis for a cause of action only for those plaintiffs who are the direct victims of the alleged discrimination. Indirect victims must sue under § 3610, which mandates that certain administrative remedies be pursued prior to suit. Since plaintiffs in this action are homeowners, none of whom sought to purchase a home, they are merely indirect victims of the alleged discrimination and they therefore fail to state a claim under § 3612.

 Although not framed in such terms, defendants' motion actually challenges plaintiffs' standing to prosecute this action. "In essence the question of standing is whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues." Warth v. Seldin, 422 U.S. 490, 498, 45 L. Ed. 2d 343, 95 S. Ct. 2197 (1975).

 Standing has properly been called "one of 'the most amorphous [concepts] in the entire domain of public law.'" Flast v. Cohen, 392 U.S. 83, 99, 20 L. Ed. 2d 947, 88 S. Ct. 1942 (1968). Consistency in the case law is difficult to find.

 Nevertheless, courts have developed a two-part test by which they purport to decide standing cases. Plaintiffs must demonstrate that (1) they have suffered an "injury in fact" as a result of defendants' actions, and (2) the interest sought to be protected must arguably be within the zone of interests to be protected by the statute in question. Data Processing Service v. Camp, 397 U.S. 150, 25 L. Ed. 2d 184, 90 S. Ct. 827 (1970).

 The first component stems from Article III of the Constitution. Jurisdictional in nature, it is a "threshold requirement" which must be satisfied in order to maintain an action in federal court. O'Shea v. Littleton, 414 U.S. 488, 493, 38 L. Ed. 2d 674, 94 S. Ct. 669 (1974); Evans v. Lynn, 537 F.2d 571 (2 Cir. 1976) (en banc). A plaintiff "must allege specific, concrete facts demonstrating that the challenged practices harm him, and that he personally would benefit in a tangible way from the courts' intervention." Warth v. Seldin, supra, 422 U.S. at 508.

 In an effort to meet this "injury in fact" requirement, one plaintiff on behalf of the others submitted an affidavit in which he alleges that plaintiffs suffer the following injuries as a result of defendants' discriminatory practices: they do not reside in a racially stable community, they find it more difficult to sell their homes because defendants steer prospective white purchasers away from Wheatley Heights, and their property values will decline should these practices continue. In other words, the affidavit concludes, their "homes and lives are threatened." *fn2"

 These allegations satisfy the Warth standards. The alleged harm is concrete and particularized, and a court order enjoining the alleged racial steering would relieve this injury by terminating a major disruptive influence on the racial and financial stability of Wheatley Heights. The alleged harm is surely as great, if not greater, than the "loss of important benefits from interracial associations" which was found to be an adequate allegation of injury in ...


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