The firm’s clients, Tamara Stalker and Alexandre Maia, entered into a contract to sell their cooperative apartment to Herman and Barbara Lederberg, elderly purchasers who primarily resided in Florida. Although the purchasers were financially qualified, the co-op board rejected their application, claiming that the purchasers did not satisfy a purported requirement that the apartment be used as their primary residence. The plaintiffs alleged that no such requirement existed in the co-op’s bylaws and that the stated reason for rejecting the sale was a pretext for discrimination based on the purchasers’ age and Maia’s Brazilian national origin.

The rejection of the sale caused substantial financial harm to the sellers. After the co-op refused to approve the transaction, the sellers were forced to locate another purchaser after the financial crisis had caused the real estate market to deteriorate, resulting in significant damages.

Adam Leitman Bailey, P.C. challenged the co-op’s attempt to dismiss the case, arguing that the New York State Human Rights Law was sufficiently broad to protect sellers who were themselves adversely affected by discriminatory conduct directed at prospective purchasers. The trial court agreed that the sellers had standing to pursue their age-discrimination claim under the New York State Human Rights Law. On appeal, the Appellate Division, First Department affirmed and held that the statute’s expansive language provides a remedy for a person adversely affected by discrimination in the provision of housing.

The appellate court further held that the plaintiffs had stated a valid claim under the Federal Fair Housing Act arising from alleged national-origin discrimination. The decision recognized the substantial similarity between New York’s Human Rights Law and the federal Fair Housing Act and established an important precedent concerning who may bring a housing-discrimination claim.

The case presented an especially difficult legal challenge because the individuals allegedly subjected to discriminatory treatment—the prospective purchasers—were not the plaintiffs seeking damages. The firm therefore had to establish a legal pathway for sellers, who were not themselves members of the protected class at issue, to seek redress for the economic injuries caused by discrimination against the prospective buyers. This required the firm to advance a novel interpretation of the statute and persuade both the trial court and the Appellate Division to adopt that interpretation.

Adam Leitman Bailey, P.C. also conducted extensive discovery to establish that the co-op’s stated primary-residence requirement was merely a pretext for discriminatory conduct. The firm obtained documents and elicited testimony designed to demonstrate the board’s actual motivations and the circumstances surrounding its rejection of the sale.

Following the successful appellate ruling and the conclusion of discovery, the matter was resolved through settlement prior to trial.

The decision in Stalker v. Stewart Tenants Corp., 93 A.D.3d 550, 940 N.Y.S.2d 600 (1st Dep’t 2012), established an important new precedent in New York housing-discrimination law. The ruling confirmed that the New York State Human Rights Law’s broad prohibition against discrimination can protect individuals who are adversely affected by discriminatory conduct in the sale of housing, even when they are not the prospective purchasers who were the direct targets of the discrimination.

The decision has continued to be cited by courts addressing the scope of housing-discrimination protections under New York law, underscoring the lasting significance of the precedent established by Adam Leitman Bailey, P.C. in this case.