## Facts

- Edgewater Park Owners Cooperative, Inc. operated a cooperative residential development in the Bronx and required prospective purchasers to obtain three reference letters from existing shareholders.
- The reference-letter policy was longstanding but lacked clear standards and was inconsistently administered; board members disagreed about eligibility to give references and when exceptions applied.
- Prospective purchasers generally interacted through real-estate brokers; Edgewater owners relied heavily on broker Amelia Lewis, who derived substantial business from sales in the cooperatives.
- Fair Housing Justice Center, Inc. (FHJC), a nonprofit fair-housing organization, conducted paired testing after concerns that the community was not “open to just anyone.”
- In testing, Lewis allegedly:
  - Assisted white testers by minimizing the reference requirement and offering to help obtain letters and by showing them Edgewater homes.
  - Discouraged Black testers with comments about prejudice in the community, refused to show cooperative homes, treated the reference requirement as “impossible,” and directed them to housing outside the cooperatives.
- FHJC alleged substantial racial disparity: African Americans owned a significant share of owner-occupied housing in the Bronx, while African-American ownership in the cooperatives was alleged to be negligible.
- FHJC sued under the Fair Housing Act and parallel federal, state, and city civil-rights and fair-housing laws; other defendants settled, leaving claims against Edgewater.
- Edgewater moved for summary judgment, challenging FHJC’s standing and the merits of disparate-treatment and disparate-impact theories tied to the reference policy and its implementation.

## Issues

1. Whether FHJC established organizational standing by showing frustration of mission and diversion of resources caused by the challenged practices.
2. Whether evidence involving discriminatory conduct by an independent broker, together with Edgewater’s policies and practices, could permit an inference of intentional racial discrimination by Edgewater.
3. Whether Edgewater’s three-reference requirement could support a disparate-impact claim based on statistical disparities and the policy’s operation in a racially homogeneous community.
4. Whether Edgewater was entitled to summary judgment on FHJC’s federal, state, and city fair-housing and civil-rights claims.

## Decision

- The court denied Edgewater’s motion for summary judgment.
- The court held that FHJC produced sufficient evidence of organizational injury (mission impairment and resource diversion) to proceed.
- The court found triable fact issues on intentional discrimination, including whether Edgewater’s reliance on broker-driven sales and the operation of the reference policy connected the broker’s differential treatment to Edgewater’s practices.
- The court found triable fact issues on disparate impact, concluding that statistical evidence and the policy’s network-based structure could support a finding of substantial adverse effect on Black prospective purchasers.
- Because material fact disputes existed under the federal framework, summary judgment was also inappropriate on the corresponding state and city claims.

## Legal Principles

- A fair-housing organization has standing when discriminatory practices perceptibly impair its mission and cause it to divert resources to investigation, testing, or enforcement activity.
- At summary judgment, a housing provider is not insulated from disparate-treatment claims merely because discriminatory steering or statements were made by an independent broker; such conduct may serve as circumstantial evidence when tied to the provider’s policies and practices.
- A facially neutral admission or screening rule may violate fair-housing laws under a disparate-impact theory if it disproportionately excludes a protected class and perpetuates segregation, including when the rule depends on endorsements from an already racially skewed resident base.
- Vague, discretionary, and inconsistently applied screening policies can support an inference of discriminatory use or effect, particularly where they permit ad hoc exceptions and differential application.
- When federal fair-housing claims present triable issues, parallel state and local fair-housing claims generally survive summary judgment where they rest on the same disputed facts.

## Conclusion

The court permitted FHJC’s case to proceed because the record supported organizational standing and raised genuine disputes as to whether Edgewater’s shareholder-reference policy and its broker-mediated implementation both reflected intentional racial discrimination and produced an unlawful disparate impact under federal, state, and city fair-housing laws.


Fair Hous. Just. Ctr., Inc. v. Edgewater Park Owners Coop., Inc., No. 10 Civ. 912, 2012 WL 762323 (S.D.N.Y. Mar. 9, 2012)