369 F. Supp. 3d 362
D. Conn.2019Background
- Carmen Arroyo sought a two‑bedroom transfer so her disabled son, Mikhail (a conservatee), could move home; WinnResidential required a tenant screening and used CoreLogic RPS (CrimSAFE) to screen him.
- CrimSAFE returned a one‑page “disqualified” result without underlying records or details; RPS provided only minimal identifiers and required a power of attorney before disclosing the consumer file to Ms. Arroyo (who submitted conservatorship documents).
- WinnResidential initially denied Mikhail tenancy based on RPS’s report; Mikhail was never convicted (a retail‑theft charge was withdrawn). After administrative complaints, WinnResidential admitted him about a year later.
- Plaintiffs (CFHC and the Arroyos) sued RPS under the Fair Housing Act (race, national origin, disability—disparate impact, disparate treatment, and failure‑to‑accommodate theories), CUTPA, and the FCRA; RPS moved to dismiss FHA and CUTPA claims.
- The district court denied the motion to dismiss Counts I, II, III (FHA claims) and VI (CUTPA), finding plaintiffs plausibly alleged RPS’s liability and causation/nexus to housing denials.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of FHA to screening companies | RPS directly/vicariously liable: its CrimSAFE product makes final eligibility decisions and it acted as WinnResidential’s agent | FHA applies only to housing providers who deal directly with tenants; screening companies are outside §3604 | RPS can be liable (directly and vicariously) under FHA given HUD regs, agency allegations, and the product’s central role in tenancy decisions |
| Nexus between RPS’s conduct and denial of housing | CrimSAFE’s automated disqualification and refusal to provide records caused denial and prevented accommodation requests | RPS’s role is too remote; WinnResidential set policies and made the housing decision | Nexus is sufficiently alleged: RPS drafted forms, made eligibility determinations, and its adverse action letter functioned as the decision-maker |
| Sufficiency of disparate treatment / disparate impact / failure‑to‑accommodate claims | Alleged disparate impact on minorities and conserved/disabled persons; pleading shows inference of discriminatory intent and need for accommodation (conservator denied access) | Plaintiffs failed to plead prima facie McDonnell Douglas elements or required statistical proof; no differential treatment alleged | Claims survive motion to dismiss: pleading standard is permissive (Swierkiewicz/Williams), plaintiffs alleged facts to plausibly infer disparate treatment/impact and stated a failure‑to‑accommodate claim |
| CUTPA: trade/commerce and proximate causation/ascertainable loss | RPS’s commercial tenant‑screening services and disclosure policy are in trade/commerce; alleged ascertainable losses (expenses, denial of rights under FCRA) proximately caused by RPS | File disclosure under FCRA is free and not in trade/commerce; WinnResidential’s decisions sever proximate causation | CUTPA claim pleaded adequately: RPS’s conduct tied to its commercial services and plaintiffs alleged ascertainable losses proximately caused by RPS |
Key Cases Cited
- Sarmiento v. U.S., 678 F.3d 147 (2d Cir.) (pleading plausibility standard discussion)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (legal standard for pleadings)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard)
- Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982) (organizational standing via diverted resources)
- Trafficante v. Metropolitan Life Ins. Co., 409 U.S. 205 (1972) (broad construction of FHA)
- Mitchell v. Shane, 350 F.3d 39 (2d Cir.) (application of McDonnell Douglas in FHA context)
- Francis v. Kings Park Manor, Inc., 917 F.3d 109 (2d Cir.) (landlord liability under FHA for failing to address discrimination; expansive reading of FHA and HUD regs)
- Texas Dept. of Housing & Community Affairs v. Inclusive Communities Project, Inc., 135 S. Ct. 2507 (2015) (FHA encompasses disparate impact claims)
- MHANY Management, Inc. v. County of Nassau, 819 F.3d 581 (2d Cir.) (prima facie disparate impact framework)