Southern District Upholds City’s Use Of Technology Assisted Review in Disparate Impact and Racial Discrimination Fair Housing Act Case

Three African American residents of New York City seeking affording housing (“Plaintiffs”) challenged the City’s Community Preference Policy as having a disparate impact on African-American and Latino. Under the Community Preference Policy, 50% of affordable housing units are set aside and distributed through a lottery for qualifying individuals living in the “community district” where the housing is located. Plaintiffs, who are all qualifying individuals, applied for housing via the lotteries, but were not selected to be interviewed for affordable housing developments. Plaintiffs claimed that the Community Preference Policy had a disparate impact on African-American and Latino applicants in “neighborhoods of opportunity,” which they alleged were predominantly white. Plaintiffs also contended that the Community Preference Policy perpetuated racial segregation in the City and constituted intentional discrimination in violation of the federal Fair Housing Act and the New York City Human Rights Law.

The instant post focuses on one of the numerous discovery disputes in the case, which is common given the extensive discovery sought in many Fair Housing cases. Here, Plaintiffs sought an order directing the City to provide samples of non-privileged documents collected from the Department of Housing Preservation & Development (“HPD”) and 50 other custodians designated as “non-responsive”. Plaintiffs also gave 665 additional search terms to be applied. The City agreed to the supplemental search despite requiring review of 90,000 additional documents at a cost of approximately $248,000, saying it would use all of Plaintiffs’ proposed search terms and use Technology Assisted Review (“TAR”). AR allows parties to prioritize and/or categorize documents for purposes of document review and has been shown to produce more accurate results than manual review. Plaintiffs objected, contending that the City’s TAR processes were flawed and resulted in the over-designation of documents as non-responsive.

Ultimately, the Court found no evidence of gross negligence or unreasonableness in the City’s TAR training or review processes. Plaintiffs failed to identify anything in the TAR process that was inherently defective, and attributed the categorization of a small subset of documents as responsive or non-responsive to human error. The court further noted that the City had produced over 12,500 documents designated as responsive. Moreover, the City’s validation process, described to the Court in the City’s in camera submission, supported the conclusion that the errors identified by Plaintiffs would not have meaningfully affected the City’s TAR processes. Despite the Court rejecting Plaintiffs’ assertions that the TAR process overall was defective, it did find that Plaintiffs presented sufficient evidence to justify their request for sample sets of non-privileged documents from the documents.

The case was Winfield v City of New York,  2017 WL 5664852 (S.D.N.Y. November 27, 2017).


Trump Administration Delays Submission Date For Affirmatively Furthering Fair Housing Rule

In a continuation of its year-long effort to dismantle the previous administration’s regulatory agenda, the Trump administration’s Department of Housing and Urban Development (“HUD”) announced that it would be postponing the submission deadline for reports due under the Affirmatively Furthering Fair Housing (“AFFH”) rule until 2020.  While there has not been any comparable announcement about the long-term fate of the controversial rule, it is widely believed that HUD will move to repeal or, as HUD Secretary Ben Carson said, “reinterpret,” the rule.

The AFFH rule, published by the Obama administration in 2015, was seen by many housing and anti-discrimination advocates as the biggest step forward in fair housing laws since the passage of the 1968 Fair Housing Act itself.  As the name implies, the rule requires communities to “affirmatively further” fair housing, i.e. to not only prohibit discrimination, but actively promote desegregation.  Communities are required to prepare and submit to HUD reports on the status of housing in their jurisdiction, as well as impediments to desegregation and the steps they will be taking to promote fair housing going forward.  Notably, this was not limited to racial or ethnic minorities, but included other disadvantaged groups such as the disabled, the poor, etc.

In delaying the submission date of these reports, HUD noted that the rule has not been without its struggles.  Many communities have complained that the requirement is burdensome or unclear, or that they lack the technical tools necessary to accurately measure their housing situation.  There is also philosophical argument against the rule, in that it is seen as an intrusion by the federal government into local decisions about where people live and the character of the community.  However, fair housing advocates note that desegregation efforts have stalled in most of the country, and existing gains have even been reversed in some areas.

Ultimately, the two-year delay could portend significant changes to how communities address fair housing.  Until then, jurisdictions have two years to prepare their reports, and for those who have already made their submissions, HUD has indicated that it will not review reports already received.


Second Circuit Holds That Civil Rights Act Of 1964 Bars Discrimination Based On Sexual Orientation

Earlier today, the Second Circuit Court of Appeals held that workplace discrimination on the basis of sexual orientation violates Title VII of the Civil Rights Act of 1964 (“Title VII”). The plaintiff, skydiving instructor Donald Zarda (“Zarda”), alleged that he was fired because he was gay in violation of Title VII, which bars workplace discrimination on the basis of sex, race, color, national origin and religion.  The Eastern District of New York granted summary judgment to the Defendants.  Plaintiff then moved to reinstate the claim, based on the subsequent Equal Employment Opportunity Commission (“EEOC”) ruling that sex discrimination includes sexual orientation discrimination.  The Eastern District declined to do so, and Plaintiff appealed.  A three-judge panel of the Second Circuit Court of Appeals affirmed the denial, and the full Second Circuit agreed to a rare en banc rehearing.

After rehearing the case, the full Second Circuit reversed the lower court and three judge panel.  In an extensive, 163-page opinion, the Court ruled that "sexual orientation discrimination -- which is motivated by an employer’s opposition to romantic association between particular sexes -- is discrimination based on the employee’s own sex."  Accordingly, the Court held that it was impossible to discriminate on the basis of sexual orientation and without considering the employee’s sex.

One of the most fascinating facets of this case was the dueling positions of the United States government.  On one side, the EEOC argued on behalf of the Plaintiff, noting that the EEOC itself had recently ruled that sexual orientation discrimination was a subset of sex discrimination.  Conversely, the Justice Department argued for the employer, going so far as to claim that the EEOC was “not speaking for the United States.”

Looking ahead, the Second Circuits decision in Zarda puts it in conflict with the 11th Circuit Court of Appeals, which ruled in March 2017 that Title VII did not extend to sexual orientation.  Though the U.S. Supreme Court declined to hear the appeal in that case, the subsequent circuit split makes it increasingly that the Supreme Court will grant certiorari on the issue in the near future. 

The case was Zarda v. Altitude Express, Inc., Index No. 15-3775.  The full opinion can be found here.


Governor Cuomo Signs Bill On Backyard Privacy

Earlier this month, Governor Cuomo signed new homeowner privacy protections into law.  The law, often referred to as the “backyard surveillance bill,” allows a homeowner to sue a neighbor or third-party who has invaded the homeowner’s privacy by taking pictures or filming the homeowner’s backyard without their knowledge or consent.  However, the scope of this law is far more narrow than one might expect, or may even have been intended.

The goal of the law is to close the “peeping tom” loophole, which refers to the absence of any provision to stop or seek damages for being recorded by a neighbor or other party without permission.  This was prompted by incidents in which homeowners using their pools, among others, were filmed without their knowledge by their neighbors.  Moreover, the law is not limited to the owner of the property, tenants are also able to avail themselves of the law’s new protections.  Notably, the law does not prohibit lawful surveillance by law enforcement agencies, or other forms of legally authorized surveillance. 

Despite the apparent intent to be broad in scope, the reality is that the new law’s application is fairly limited.  The legislative history stated that “[a] person is guilty of this action if he or she intentionally uses or installs, or permits to be, used, or installed, a video imaging system that allows the unwarranted video imaging of an adjoining residential property owner’s backyard premise without the property owner’s written consent.”  Yet the actual law lacks this language, and is limited to devices installed or affixed on an adjoining property.  Moreover, it only covers filming activity in a homeowner’s backyards, not a front or side yard (though the impact may be minimal, given that front yards are often visible from the street).

As a result, the new law makes no provision for portable recording devices like cell phones or hand-held cameras.  The law would also appear inapplicable to cameras placed on drones, making it unclear how the law might impact that new and increasingly contentious issue in homeowner privacy.  As a result, there is a strongly likelihood that this law will need to be amended in the years to come.  Even so, it represents a step forward for privacy advocates and homeowners who wish for their private life to remain private.


Firm Obtains Complete Dismissal of Two Federal Lawsuits Against The County Of Suffolk

The firm served as counsel to the County of Suffolk in two federal lawsuits against the Suffolk County Traffic and Parking Violations Agency ("SCTPVA"). The lawsuits, which sought class action certification, claimed a wide variety of unconstitutional conduct by the SCTPVA.  These allegedly unconstitutional acts included, among other things, discrimination against minority motorists, denying due process when suspending drivers licenses, the imposition of excessive fines, and illegally issuing arrest warrants for motorists who failed to appear at their court dates.  However, these allegations were completely unfounded.

In both lawsuits, the firm argued that there was no evidence of any discriminatory or otherwise unconstitutional conduct by the SCTPVA or its officials. Moreover, the plaintiffs could not point to any official policy or customary practice of the County that led to these so-called violations. The firm also argued that the named defendants were immune from suit because at all relevant times they were acting in their official capacities as SCTPVA prosecutors or judicial hearing officers.

As a result, U.S. Magistrate Judge Arlene Lindsay issued two Report and Recommendations ("R&Rs") advising that the motions to dismiss be granted in their entirety.  Shortly thereafter, U.S. District Court Judge Joan Azrackby orders dated March 3, 2017 and June 12, 2017, adopted the R&Rs as the decisions of the Court, and granted the motions to dismiss all claims against the SCTPVA and its officials in both cases.

PDF copies of the the full Magistrate's Report and Recommendation for the two cases, 15-cv-3097 and 15-cv-3411, can be found here and here, respectively.

 


Federal Court In Illinois Holds First Amendment Not Implicated By Chicago’s Short-Term Rental Ordinance

Last month, the federal District Court for the Northern District of Illinois denied a request for a preliminary injunction against the City of Chicago’s new short-term rental ordinance.  The Court determined that the ordinance, which regulates how individuals list units for rent on Internet-based, “home sharing” services such as Airbnb, VRBO, or HomeAway, did not affect the plaintiffs’ First Amendment rights to free speech.  As municipalities across the country continue to grapple with how to regulate such companies and the disruptive effect they have on the short-term rental and housing markets, this decision marks an interesting step forward in developing the legal basis for allowing such regulations.

The case centers on the so-called “shared housing ordinance” (the “SHO”) enacted by the City of Chicago (“City”) on June 22, 2016 and amended February 22, 2017.  The SHO requires hosts making housing units available for short-term rent to register the units with the City before listing the units on online services, and also requires services such as Airbnb, VRBO, HomeAway to register with the City.  As applied to individuals, the SHO imposes requirements on the services provided, such as requiring that hosts provide soap and clean linens and notify police of any illegal activity. It also requires individuals to maintain guest registries, and post their licensing information at the unit.

The plaintiffs, including a pro-short-term rental advocacy group and individuals that rent units using Airbnb, VRBO, HomeAway, and/or other platforms, challenged the SHO as an unconstitutional prior restraint on speech, and alleged that the regulations constituted compelled speech and was a content-based restriction on speech in violation of the First Amendment.  The plaintiffs moved for a preliminary injunction blocking the law from taking effect, and the challenged provisions were stayed pending a decision on the motion.

The Court ultimately denied the application for a preliminary injunction and rejected the plaintiffs’ First Amendment claims, noting the difference between First Amendment-protected speech and commercial activity.  Relying upon the Supreme Court’s decision in Sorrell v. IMS Health, the Court noted that:

restrictions on protected expression are distinct from restrictions on economic activity or, more generally, on nonexpressive conduct.  The First Amendment does not prevent restrictions directed at commerce or conduct from imposing incidental burdens on speech.

Here, the Court found plaintiffs had not established that their activities non-commercial activity or that the short-term rental business had an expressive component.  Rejecting the plaintiffs’ argument that their activities constituted speech, or a mix of commercial activity and speech, because online platforms created opportunities to “meet new friends, learn about different cultures, and show off” their home city, the Court found that a short-term rental arrangement is a commercial transaction, writing that the fact “some hosts or licensees also derive a social benefit from home sharing makes no difference to the dispositive question of whether the SHO regulates economic activity.”  It went on to state that if such a transaction was First Amendment-protected speech, than any other commercial transaction that involves interpersonal interaction would have to similarly be protected.

It should be noted that as this was a motion for a preliminary injunction, the Court’s finding was merely that the plaintiffs were unlikely to succeed on the merits, and not a final determination on their claims. Even so, it suggests that the First Amendment argument is unlikely to find much success as the case proceeds, and that the City’s ordinance will likely be upheld as constitutional, at least insofar as First Amendment concerns are implicated.

The case was Keep Chicago Livable v. City of Chicago, No. 16 C 10371, 2017 WL 955421 (N.D. Ill. Mar. 13, 2017).


EEOC Issues New Guidance On Retaliation Claims, Part 9: Promising Practices and Conclusion

On August 25, 2016, the U.S. Equal Employment Opportunity Commission (“EEOC”) issued the Enforcement Guidance on Retaliation and Related Issues (“Guidance”).  This Guidance updates EEOC’s 1998 positions on retaliation claims relating to alleged equal employment opportunity violations, and was effective upon issuance.  This is the ninth and final post in our series, and it examines the EEOC’s five categories of “promising practices” for helping businesses comply with anti-retaliation laws.

 The first recommendation is that “Employers should maintain a written, plain-language anti-retaliation policy, and provide practical guidance on the employer's expectations with user-friendly examples of what to do and not to do.”  This includes examples of what constitutes protected acts and actionable conduct, and guidelines on how to avoid actual or perceived violations.  It also encourages creating reporting and informal resolution mechanisms for retaliation claims, while reviewing existing policies to remove any potentially illegal policies.  In particular, the Guidance notes that policies that deter employees from making pay inquiries may violate state or federal law.

The second recommendation is to create training programs for all employees, including managers and supervisors.  Such training should include a discussion of the written anti-retaliation policy, as well as the standards of conduct that are expected.  Managers and supervisors in particular should be advised on managing their emotions in decision-making and ways to be proactive in handling discrimination allegations.  The Guidance also advises periodic refresher courses.

The third recommendation suggests that an employer's response to claims of an EEO violation should automatically include giving information to all parties and witnesses on the anti-retaliation policy, how to report alleged retaliation, and how to avoid engaging in it. Managers and supervisors alleged to have engaged in discrimination should be provided with guidance on how to handle any personal feelings about the allegations when carrying out management duties or interacting in the workplace, so as to avoid potential retaliatory actions. On a related note, the fourth recommendation suggests employers follow up on pending EEO matters.

Finally, the Guidance suggests that employers “consider ensuring that a human resources or EEO specialist, a designated management official, in-house counsel, or other resource individual reviews proposed employment actions of consequence to ensure they are based on legitimate non-discriminatory, non-retaliatory reasons.”  These reviewers should require decision makers to identify their reasons for taking an action and document them appropriately, scrutinize performance evaluations to ensure they do not reflect bias, and when retaliation is found, advise of remedial measures to prevent future occurrences.  

By following these recommended practices, employers can significantly reduce the likelihood that an employee will experience, or bring a claim alleging, retaliation following a discrimination allegation.  

The full Guidance can be found here: https://www.eeoc.gov/laws/guidance/retaliation-guidance.cfm


EEOC Issues New Guidance On Retaliation Claims, Part 8: Remedies

On August 25, 2016, the U.S. Equal Employment Opportunity Commission (“EEOC”) issued the Enforcement Guidance on Retaliation and Related Issues (“Guidance”).  This Guidance updates EEOC’s 1998 positions on retaliation claims relating to alleged equal employment opportunity violations, and was effective upon issuance.  This is the eighth post in our series and it examines remedies for a successful retaliation claim.  Generally, remedies for a retaliation claim fall into two categories: injunctive relief and damages. 

Temporary or preliminary injunctions allow a court to stop retaliation before it occurs or continues where there is a substantial likelihood that the challenged action will be found to constitute unlawful retaliation and the employee and/or the public interest will likely suffer irreparable harm.  Although courts have ruled financial hardships are not irreparable, other harms that accompany job loss may be sufficient.  For example, employees who were forced into retirement showed irreparable harm where they lost work and future prospects for work, suffering emotional distress, depression, a contracted social life, etc.  A temporary injunction is also appropriate if the retaliation will likely cause irreparable harm to the EEOC’s ability to investigate the original charge of discrimination, such as by discouraging others from providing testimony or from filing additional charges based on the same or other alleged unlawful acts. The EEOC has the authority to seek temporary injunctive relief when a preliminary investigation shows that prompt judicial action is necessary to carry out the purposes of Title VII, and the ADA and GINA incorporate this provision.  In contrast, the ADEA and the EPA do not authorize interim relief pending resolution of an EEOC charge, however the EEOC can seek such relief as part of a lawsuit for permanent relief pursuant to Rule 65 of the Federal Rules of Civil Procedure.  

The other main form of relief in a retaliation claim is damages, which can be either compensatory or punitive (though punitive damages are not available against government entities).  However, the extent to which damages are allowed varies depending on the statute being invoked:

- Title VII and GINA allow for both compensatory and punitive damages, with a combined cap that scales based upon employer size.  This cap ranges from $50k for employers with 15-100 employees to $300k for employers with more than 500 employees.  Punitive damages require showing the employer acted "with malice or with reckless indifference to the federally protected rights of an aggrieved individual."

-ADEA and EPA retaliation claims also allow for both compensatory and punitive damages, even though such relief is not available for non-retaliation claims under those statutes.  These statutes do not impose a statutory cap on damages.

-The ADA, while including both anti-retaliation and interference provisions, does not include a remedy and instead references 42 U.S.C. § 12117, which in turn references Title VII.  Moreover, courts have split on the scope and type of damages available.  Accordingly, this will vary by jurisdiction.

Other forms of relief include back pay if the retaliation resulted in termination, constructive discharge, or non-selection, as well as front pay or reinstatement. Equitable relief also frequently sought by the Commission includes changes in employer policies and procedures, managerial training, reporting to the Commission, and other measures designed to prevent violations and promote future compliance with the law.  These are mirrored in the Guidance’s “promising practices,” which will be the topic of our next and final post on the Guidance.

The full Guidance can be found here: https://www.eeoc.gov/laws/guidance/retaliation-guidance.cfm


EEOC Issues New Guidance On Retaliation Claims, Part 7: ADA Interference Claims

On August 25, 2016, the U.S. Equal Employment Opportunity Commission (“EEOC”) issued the Enforcement Guidance on Retaliation and Related Issues (“Guidance”).  This Guidance updates EEOC’s 1998 positions on retaliation claims relating to alleged equal employment opportunity violations, and was effective upon issuance.  This is the seventh post in our series, and it examines Americans with Disabilities Act (“ADA”) interference claims, a relatively distinct subsection of the Guidance.

The ADA interference provision is distinct from the ADA’s anti-retaliation provision, creating a broader prohibition on “interference” with the exercise or enjoyment of ADA rights.  The relevant provision, 42 U.S.C. § 12203(b), protects any individual who is subject to coercion, threats, intimidation, or interference with respect to ADA rights.  Moreover, an applicant or employee need not establish that he is an "individual with a disability" or "qualified" in order to prove interference under the ADA.

Due to the substantial overlap between the interference and anti-retaliation provisions, many of the actions that constitute interference, such as denial of accommodation, discrimination, or retaliation, are actionable under the ADA’s anti-retaliation provision.  However, the broader interference provision covers actions that would not be considered “materially adverse,” such as coercing an individual to forgo an accommodation to which he or she is entitled, threatening adverse treatment unless an employee “voluntarily” submits to an otherwise prohibited medical examination, policies that purport to limit employees ADA rights (ex: a fixed leave policy that states "no exceptions will be made for any reason"), or subjecting an employee to adverse treatment for assisting a coworker in requesting reasonable accommodation. 

Ultimately, the fact an employee found a statement or certain conduct intimidating is insufficient for an ADA interference claim.  The standard articulated in the Guidance, is that the interference provision “only prohibits conduct that is reasonably likely to interfere with the exercise or enjoyment of ADA rights.”  Additional examples of interference, with detailed hypotheticals, can be found in the Guidance itself, provided online at:  https://www.eeoc.gov/laws/guidance/retaliation-guidance.cfm


EEOC Issues New Guidance On Retaliation Claims, Part 6: Overcoming Retaliation Claims

On August 25, 2016, the U.S. Equal Employment Opportunity Commission (“EEOC”) issued the Enforcement Guidance on Retaliation and Related Issues (“Guidance”).  This Guidance updates EEOC’s 1998 positions on retaliation claims relating to alleged equal employment opportunity violations, and was effective upon issuance.  Though not binding, Courts have treated EEOC’s views as being persuasive authority, suggesting these rules will significantly impact how retaliation claims unfold. This is the sixth post in our series, and it examines how employers can overcome claims of retaliation by employees.

The Guidance provides three circumstances under which an employer can defeat a retaliation claim brought by an employee, even where a protected activity and materially adverse action occurred.  The first and most basic defense is that the employer was unaware of the protected activity.  As causation for retaliation requires showing that the materially adverse action was taken in response to the protected activity, the employer (or relevant decision maker) must have known of the prior protected activity.  Absent such knowledge, there can be no retaliatory intent.

The second basis for defeating a retaliation claim is to show that there were legitimate, non-retaliatory reasons for the challenged action.  The Guidance provides several examples of what such reasons may be.  These include, but are not limited to: (1) poor performance by the employee, (2) in cases of alleged hiring or promotion discrimination, inadequate qualifications for the position sought, (3) inferior qualifications or interview performance relative to the selected individual, (4) misconduct, ranging from theft to insubordination to repeated tardiness, and (5) reduction in workforce or downsizing.  These facts are not defenses or attempts to disprove retaliation, as proving retaliation remains the employee’s burden.  Rather, these facts can serve to support the employer’s proffered explanation for its actions.

Finally, in cases being decided under a “but-for” standard of causation, the employer may defeat the retaliation claim if it can show that the adverse action would have occurred regardless of any retaliatory motive.  The provided example describes a circumstance where the employer admits to being “mad” at the terminated employee, but the employee also admits that she was fired for repeated violations of worker safety rules and had been warned prior to filing her claim that continued violations could result in termination.  Thus, even where there may be evidence of retaliatory motive, but-for causation had not been demonstrated.

The full Guidance can be found here: https://www.eeoc.gov/laws/guidance/retaliation-guidance.cfm



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