Judge Denis Hurley

Plaintiffs, low-income Latinos, lived in allegedly unfit apartments in a building in defendant village. The surrounding area, primarily Latino, is the only area in the village that is not majority white. The landlord and agent (Secatogue Defendants) were dismissed from plaintiffs’ complaint asserting Fair Housing Act (FHA) violations. The court denied the complaint’s amendment to add an FHA "exploitation" claim against the Secatogue Defendants under 42 USC §3604. Plaintiffs offered no authority that Second Circuit recognizes the "exploitation theory" of liability recognized by the Seventh Circuit in Clark v. Universal Builders. Further, the proposed amendment insufficiently alleged that dual housing markets existed due to racial segregation, and that the Secatogue Defendants took advantage thereof by demanding prices and terms unreasonably exceeding those available to whites for comparable housing. Plaintiffs’ claim that the village’s threat of eminent domain, and inadequate code enforcement, created a distorted market went to the existence of dual housing markets, but did not explain how the Secatogue Defendants could have charged higher prices or demanded more restrictive terms than their competitors at that location.