NYC landlord asks Second Circuit to revive challenge to Section 8 law

MANHATTAN (CN) — A panel of federal appeals judges on Tuesday appeared hesitant to overturn the dismissal of a New York City landlord’s constitutional challenge against a city law it claims compels it to participate in the voluntary federal Section 8 subsidized housing voucher program and contractually subjects it to waive its Fourth Amendment right against unlawful search and seizure.

Represented by Bond, Schoeneck & King attorney Curtis Johnson, 216 East 29th Street Trust — the owner of a six-story residential building in Manhattan’s Kips Bay neighborhood — asked the Second Circuit court of appeals to revive its declaratory judgment complaint that sought to have New York City Local Law 10 — which gives the New York City Commission on Human Rights the ability to fine landlords for source of income discrimination and order landlords to accept tenants with Section 8 vouchers — declared unconstitutional because the housing contracts grant the local agencies and the federal government access to apartment buildings for inspection purposes and to the landlord’s computerized records and cellphones to determine reasonable rent.

The New York City local law “unabashedly mandates participation,” Johnson said during oral arguments on Tuesday, asking the Second Circuit to reverse a lower court’s judgment dismissing the landlord’s 2024 civil case.

The landlord argues on appeal that it will face civil penalties and civil and criminal contempt orders when it refuses to comply with the mandate from the city’s Commission on Human Rights to participate in Section 8.

“The trust’s claims are based on more than the threat of a warrantless search; they are based on the near certainty that they will be found liable for discrimination under Local Law 10 as a result of their civil disobedience in the name of protecting their Fourth Amendment rights,” the landlord wrote in an appellant brief.

The three-judge panel did not appear inclined on Tuesday to find the landlord’s constitutional claims ripe for litigation because the purported violations have not yet occurred.

“You’re asking us to say something about searches and seizures without knowing what the search and seizures is,” Senior U.S. District Judge Guido Calabresi said, noting that “reasonable” searches do exist under the Fourth Amendment.

“Why shouldn’t we assume that what you are signing, if you sign, is only to permit searches that are consistent with the Fourth Amendment, and why should we step in until we see any indication that the state needs it to push it beyond it?” the Bill Clinton appointee asked the landlord’s lawyer. “How are we in a position to decide the case?”

U.S. District Judge Eunice Lee also questioned the viability of the landlord’s claims in the case where the trust has not yet even had a Section 8 tenant and has thus never executed a Housing Assistance Payment contract or been subject to any impingement on its privacy.

“The way you framed a lot of your arguments are that you’re going to be subject to unlawful search, and I don’t see how you get to that when you haven’t signed a contract, events have not happened where a search is either imminent or likely.”

U.S. District Judge Robert D. Sack, also a Clinton appointee, questioned whether the appellant is qualified to be a party in this challenge.

“It’s a complicated case,” he said. “But at the outset is an easy question: Is a trust — in this case, the trust — the proper plaintiff in this case? Can trusts, as opposed to the trustee or a beneficiary, can the trust itself bring this case?”

Johnson responded that the trust itself is a party in a related prosecution by the New York State Division of Human Rights, so that would likely qualify it as a party in this proceeding, but also said the trustee or beneficiary could easily be substituted in for the trust.

New York City argues the case’s dismissal in the lower court should be affirmed because the landlord’s Fourth Amendment claim hinges on hypothetical future events that may never occur.

“The trust will have an ample opportunity to litigate its Fourth Amendment and preemption claims before an administrative tribunal and then in state court in connection with the pending civil enforcement proceeding that the New York City Commission on Human Rights brought against it,” the city wrote in an appellee brief.

The city also argues the housing authority inspections are already framed to be limited in scope and that underlying pleadings found the landlord “faces no realistic prospect of suffering any concrete injury.”

New York was joined by nonprofit housing group Safe Horizon as an intervenor in the case.

Represented by Legal Aid Society attorney Evan Henley, Safe Horizon argued that signing the Section 8 subsidy contract opens the landlord up to “reasonable searches within the meaning of the Fourth Amendment" but is not a waiver of its constitutional rights against unreasonable search and seizure.

The three-judge panel did not immediately rule from the bench on the appeal Tuesday.

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