Conn. Fair Hous. Ctr. v. Corelogic Rental Prop. Solutions, LLC

369 F.Supp.3d 362

CONNECTICUT FAIR HOUSING CENTER et al., Plaintiffs,

v.CORELOGIC RENTAL PROPERTY SOLUTIONS, LLC, Defendant.

No. 3:18-CV-705 (VLB)

United States District Court, D. Connecticut.

Signed March 25, 2019

Eric Gregory Dunn, National Housing Law Project, Richmond, VA, Greg J. Kirschner, Salmun Kazerounian, Sarah White, Connecticut Fair Housing Center, Hartford, CT, for Plaintiffs.

Daniel Cohen, Troutman Sanders, West Simsbury, CT, for Defendant.

MEMORANDUM OF DECISION ON DEFENDANT'S MOTION TO DISMISS [DKT. 19]

Hon. Vanessa L. Bryant, United States District Judge

Plaintiffs Connecticut Fair Housing Center ("CFHC") and Carmen Arroyo, individually and as next friend for Mikhail Arroyo (collectively, "Plaintiffs") commenced this action against Defendant CoreLogic Rental Property Solutions, LLC ("Defendant" or "RPS") alleging that Defendant, through use of its criminal tenant screening product, violated the Fair Housing Act, 42 U.S.C. §§ 3601 et seq. ("FHA"), the Connecticut Unfair Trade Practice Act, Conn. Gen. Stat. §§ 42-110a et seq. ("CUTPA") and the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq. ("FCRA"). Presently before the Court is Defendant's Motion to Dismiss Plaintiffs' claims pursuant to the FHA and CUTPA only. For the foregoing reasons, Defendant's Motion to Dismiss is DENIED.

I. Background

Carmen Arroyo was a tenant in ArtSpace Windham, an apartment complex managed by WinnResidential Connecticut, LLC ("WinnResidential"). Dkt. 1 at ¶ 50. Ms. Arroyo has a son named Mikhail Arroyo who was injured in an accident in July 2015 which left him unable to speak, walk or care for himself. Id. at ¶ 5. In April 2016, Ms. Arroyo learned that Mr. Arroyo, who had been living in a nursing home where he received residential treatment, would soon be ready to be discharged. Id. at ¶ 52. Ms. Arroyo is her son's conservator and primary caregiver. Id. at ¶¶ 52-53. Ms. Arroyo requested that WinnResidential transfer her to a two-bedroom apartment and permit Mr. Arroyo to live with her. Id. at ¶ 52. Ms. Arroyo consented to a tenant screening check on her son's behalf. Id. at ¶ 53.

Defendant conducted tenant screenings for WinnResidential. Defendant is a consumer-reporting agency specializing in tenant screening. Id. at ¶ 2. It searches its database of public records and then sells consumer reports generated from the database. Id. Defendant offers two screening products, CrimCHECK and CrimSAFE. Id. at ¶ 33. CrimCHECK gives housing providers copies of criminal records to interpret on their own while CrimSAFE uses an algorithm to interpret an applicant's criminal record and provide housing providers with a decision on whether the applicant qualifies for housing. Id. Defendant marketed CrimSAFE as an "automated tool [that] processes and interprets criminal records and notifies leasing staff when criminal records are found that do not meet the criteria you establish for your community." Id. at ¶ 35. Defendant provides housing providers with a form that lists general categories of crimes for which the algorithm should screen. Id. After Defendant conducts the screen, it returns a one-page report which indicates whether disqualifying records were found. The report provides no additional information such as the underlying records, the nature of the alleged crime, the date of the offense or the outcome of the case, if any. Id. at ¶ 38. Defendant also generates an adverse action letter for the housing provider to send to the tenant when a disqualifying record is found. Id. Defendant screened Mr. Arroyo using its CrimSAFE product and informed WinnResidential that Mr. Arroyo was disqualified from tenancy based on unspecified criminal records. Id. at ¶¶ 54-55. The report listed a "CrimSAFE result" which stated that disqualifying records were found. Id. at ¶ 57. Based on these facts, the Court finds that CrimSAFE disqualifies applicants for housing if the applicant was arrested but not convicted of a crime even though many years had passed since the arrest. The only information Defendant provided to WinnResidential about Mr. Arroyo's disqualifying record is his name, date of birth and under a field labeled jurisdiction, the entry "000000033501.PA." Id. at ¶ 60. Defendant did not provide any information to WinnResidential about the nature of the underlying criminal record or the reasons for Mr. Arroyo's disqualification. Id. at ¶ 59. Defendant also did not take into consideration relevant mitigating circumstances such as the facts surrounding the criminal conduct, Mr. Arroyo's age at the time of the conduct, and the impact of Mr. Arroyo's current significant disabilities on the ability for future misconduct. Id. at ¶ 63.

In late April 2016, WinnResidential told Ms. Arroyo that Mr. Arroyo could not move in with her because he was not qualified for tenancy, but it did not provide any reasons for Mr. Arroyo's disqualification. Id. at ¶¶ 66-67. Mr. Arroyo has never been convicted of a crime. Id. at ¶ 8. He was charged with retail theft in 2014, but the charge was ultimately withdrawn. Id. Ms. Arroyo contacted Defendant, explained that she was Mr. Arroyo's conservator and asked for Mr. Arroyo's tenant screening report on his behalf. Id. at ¶¶ 71-72. Defendant mailed Ms. Arroyo a written application form and Ms. Arroyo submitted it in May 2016. Id. at ¶¶ 73-74. In September 2016, Ms. Arroyo followed up with Defendant who acknowledged that it received her completed application form but required a power of attorney from Mr. Arroyo in order to provide the tenant screening report. Id. at ¶¶ 78-81. In November 2016, Ms. Arroyo submitted another application also signed by Mr. Arroyo's co-conservator. Id. at ¶ 86. Defendant never provided the Arroyos with the tenant screening report and they still do not know with certainty the identity of the supposedly disqualifying records. Id. at ¶¶ 94-95. WinnResidential also represented to Ms. Arroyo that it does not know the details of Mr. Arroyo's disqualifying conduct. Id. at ¶ 93. In June 2017, WinnResidential allowed Mr. Arroyo to move in with Ms. Arroyo after the Arroyos filed an administrative fair housing complaint against it and ArtSpace Windham. Id. at ¶ 100. The Arroyos proved at the hearing that Mr. Arroyo's only criminal charge was retail theft and it had been withdrawn. Id. WinnResidential eventually allowed Mr. Arroyo to move in with Ms. Arroyo in June 2017, approximately one year after Ms. Arroyo's request. Id. at ¶¶ 100-102.

II. Legal Standard

" ‘To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.’ " Sarmiento v. U.S. , 678 F.3d 147, 152 (2d Cir. 2012) (quoting Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ). While Rule 8 does not require detailed factual allegations, "[a] pleading that offers ‘labels and conclusions’ or ‘formulaic recitation of the elements of a cause of action will not do.’ Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ " Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (internal citation and quotation omitted). "Where a complaint pleads facts that are ‘merely consistent with’ a defendant's liability, it ‘stops short of the line between possibility and plausibility of ‘entitlement to relief.’ " Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (internal citations omitted).

In considering a motion to dismiss for failure to state a claim, the Court should follow a "two-pronged approach" to evaluate the sufficiency of the complaint. Hayden v. Paterson , 594 F.3d 150, 161 (2d Cir. 2010). "A court ‘can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.’ " Id. (quoting Iqbal , 556 U.S. at 679, 129 S.Ct. 1937 ). "At the second step, a court should determine whether the ‘well-pleaded factual allegations,’ assumed to be true, ‘plausibly give rise to an entitlement to relief.’ " Id. (quoting Iqbal , 556 U.S. at 679, 129 S.Ct. 1937 ). "The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (internal quotations omitted).

III. Standing

Under Article III of the Constitution, federal courts have jurisdiction over cases and controversies only. SeeU.S. Const. art. III, § 2; see also Valley Forge Christian C. v. Ams. United for Separation of Church and State, Inc. , 454 U.S. 464, 471, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982). One element of this jurisdictional inquiry is standing which "focuses on whether the plaintiff is the proper party to bring this suit." See Raines v. Byrd , 521 U.S. 811, 818, 117 S.Ct. 2312, 138 L.Ed.2d 849 (1997) (citation omitted). To establish standing, "a plaintiff must show (1) it has suffered an ‘injury in fact’ that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. , 528 U.S. 167, 180–81, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000). Carmen Arroyo and Mikhail Arroyo (the "Arroyo Plaintiffs") were directly harmed by Defendant's policies and meet the requirements for constitutional standing. For example, the Arroyo Plaintiffs allege that as a result of Defendant's actions Mr. Arroyo remained in a nursing home for an additional year and the Arroyo Plaintiffs suffered emotional distress along with additional medical, travel, and housing expenses.

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