## Facts

- Haven Plaza was a moderate- and low-income housing development in New York City owned and operated by Tompkins Square Neighbors, Inc., a private nonprofit.
- The project was financed and regulated under New York’s Limited-Profit Housing Companies Law (Mitchell-Lama) and received public benefits such as financing, tax abatements, and regulatory supervision by city entities.
- Tompkins maintained a policy of refusing to rent to welfare recipients, asserting they were poor credit risks and unreliable rent payers.
- Plaintiffs, welfare recipients and applicants, alleged they were otherwise qualified but excluded solely due to welfare status.
- Plaintiffs also alleged defendants failed to publish and apply consistent, objective tenant-eligibility standards, enabling arbitrary or discriminatory admissions decisions.
- Plaintiffs sued for declaratory and injunctive relief under 42 U.S.C. § 1983, asserting Fourteenth Amendment violations.
- After prior procedural rulings, defendants renewed a motion to dismiss the reinstated non-racial claims, arguing lack of § 1983 jurisdiction/state action, failure to state a claim, and deference to administrative agencies; defendants also sought certification for interlocutory appeal.

## Issues

1. Whether the complaint plausibly alleged “state action” sufficient to invoke 42 U.S.C. § 1983 and the Fourteenth Amendment against a nominally private, publicly assisted housing operator.
2. Whether a categorical refusal to rent to otherwise qualified applicants solely because they receive welfare states a substantial equal protection claim.
3. Whether the alleged failure to publish and apply objective, ascertainable tenant-eligibility standards in a publicly supported housing project states a constitutional claim.
4. Whether the court should defer under primary jurisdiction/abstention principles, or certify an interlocutory appeal under 28 U.S.C. § 1292(b).

## Decision

- The court denied defendants’ motion to dismiss.
- The court held the complaint sufficiently alleged state action at the pleading stage based on extensive public financing, tax benefits, and governmental regulation and supervision.
- The court held plaintiffs stated substantial constitutional claims regarding (a) exclusion of welfare recipients and (b) lack of published, objective eligibility standards, making dismissal under Rule 12(b)(6) improper.
- The court rejected primary jurisdiction/abstention because plaintiffs raised constitutional questions appropriate for judicial resolution.
- The court denied certification for interlocutory appeal under 28 U.S.C. § 1292(b), finding the dispute fact-dependent and not suited for immediate appellate review.

## Legal Principles

- A private entity operating a housing project may be treated as a state actor for Fourteenth Amendment and § 1983 purposes when governmental involvement is extensive, including public financing, tax benefits, and detailed regulatory control.
- A blanket policy excluding welfare recipients from publicly supported housing can present a substantial equal protection question, particularly when based on generalized assumptions rather than individualized assessment.
- In publicly supported housing with public purposes and oversight, the absence of published, objective tenant-selection standards may raise due process and equal protection concerns by permitting arbitrary decision-making.
- Primary jurisdiction generally does not displace federal adjudication of constitutional claims, even where administrative bodies regulate the underlying subject matter.
- Interlocutory appeal under 28 U.S.C. § 1292(b) is disfavored where resolution turns on factual development rather than a controlling, purely legal issue.

## Conclusion

The court allowed plaintiffs’ § 1983 suit to proceed, holding that the publicly assisted and regulated nature of the housing project plausibly made the operator’s tenant-selection practices state action and that the alleged categorical exclusion of welfare recipients and use of unpublished eligibility criteria stated substantial constitutional claims not subject to dismissal at the pleading stage.


Colon v. Tompkins Square Neighbors, Inc., 294 F. Supp. 134 (S.D.N.Y. 1968)