On appeal from the Superior Court of New Jersey, Law Division, Mercer County, L-958-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Rodríguez, Reisner and Chambers.
Plaintiff Denise Bell appeals from a trial court order dismissing on the pleadings her amended complaint alleging discrimination on the bases of disability and income source, in violation of the Law Against Discrimination (LAD), N.J.S.A. 10:5-4.1, N.J.S.A. 10:5-12(g)(2) and N.J.S.A. 10:5-12(g)(4). We reverse and remand for further proceedings consistent with this opinion.
Because the trial court dismissed the complaint on the pleadings, we must consider the Supreme Court's guidance concerning the generous view we must take of the complaint on such a motion:
We approach our review of the judgment below mindful of the test for determining the adequacy of a pleading: whether a cause of action is "suggested" by the facts. In reviewing a complaint dismissed under Rule 4:6-2(e) our inquiry is limited to examining the legal sufficiency of the facts alleged on the face of the complaint. However, a reviewing court "searches the complaint in depth and with liberality to ascertain whether the fundament of a cause of action may be gleaned even from an obscure statement of claim, opportunity being given to amend if necessary." At this preliminary stage of the litigation the Court is not concerned with the ability of plaintiffs to prove the allegation contained in the complaint. For purposes of analysis plaintiffs are entitled to every reasonable inference of fact. The examination of a complaint's allegations of fact required by the aforestated principles should be one that is at once painstaking and undertaken with a generous and hospitable approach. [Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989) (emphasis added) (citations omitted).]
In addressing Bell's complaint, we decline the parties' invitation to make sweeping legal pronouncements at this stage of the case. However, we make two preliminary observations. First, we do not construe plaintiff's complaint as asserting a general theory of "economic discrimination" and we do not address such an issue. Second, in fairness to both sides, we note defendant's*fn1 vigorous denial of plaintiff's allegations of discrimination.
Those comments aside, we will not consider the extraneous facts that the parties and their various supporting amici curiae have sought to place before us. This case was decided on the pleadings, before defendant filed an answer and before any discovery was conducted. Our only concern at this point is to determine whether the complaint can possibly be read as stating one or more causes of action under the LAD. See ibid. In undertaking that task, we also consider the well-understood principle that where a case involves novel legal issues, it is desirable to allow the parties to create a record before deciding the issues. State v. Moore, 180 N.J. 459, 460 (2004) (Novel legal issue should be decided on a "full and complete record.")
Bell's amended complaint asserted two separate but related causes of action under the LAD, N.J.S.A. 10:5-1 to -49.*fn2 Bell claimed that because she is physically disabled from working, she qualifies for a State rental subsidy known as "S-RAP," which is intended to allow disabled tenants to obtain market rate housing. She further alleged that her monthly income together with her S-RAP subsidy would enable her to afford the $874 per month rent on an apartment in a building operated by defendant Tower Management Services. However, defendant rejected her as a tenant based on defendant's policy of refusing to rent to any applicant who does not have an annual income of at least $28,000.
According to her complaint, plaintiff asked defendant to waive the income limit "as a reasonable accommodation" to her disability, "because, although her disability prevented her from working and thus meeting defendants' minimum income policy, the S-RAP subsidy enabled her to satisfy the underlying reason for the policy (i.e., to ensure that tenants had sufficient income to pay their rental obligation)." Plaintiff contended that defendant's refusal to waive the minimum income policy for a disabled person proposing to pay her rent by using a government subsidy specifically intended to assist disabled persons, constituted an illegal refusal to make a reasonable accommodation to her disability, in violation of the LAD, N.J.S.A. 10:5-4.1 and -12g(2), and implementing regulations, N.J.A.C. 13:13-3.4(f)2.*fn3 See Giebeler v. M&B Assocs., 343 F.3d 1143, 1152-55 (9th Cir. 2003).
In the second count of her complaint, plaintiff contended that the minimum income policy violated a different section of the LAD, which prohibits refusal to rent to a prospective tenant "because of the source of any lawful income received by the person or the source of any lawful rent payment to be paid for the real property." N.J.S.A. 10:5-12g(4). This section is aimed at preventing landlords from refusing to rent to tenants who receive rental subsidies through the Section 8 program or through other government programs designed to assist low income persons to obtain housing. See Franklin Tower One, L.L.C. v. N.M., 157 N.J. 602 (1999) (construing N.J.S.A. 2A:42-100, the predecessor statute to N.J.S.A. 10:5-12g(4)); Pasquince v. Brighton Arms Apartments, 378 N.J. Super. 588, 593-95 (App. Div. 2005). Plaintiff's complaint asserted that defendant's income policy had a discriminatory impact on persons who pay their rent using government subsidies, and that the policy was not justified by business necessity because the policy "has little or no relationship to S-RAP voucher holders' ability to afford the rents for Defendants' housing."
Addressing the disparate impact claim first, the theory of disparate impact discrimination is well-recognized under the LAD, as well as under federal anti-discrimination law. See e.g., Gerety v. Atl. City Hilton Casino Resort, 184 N.J. 391, 399-400 (2005); Griggs v. Duke Power Co., 401 U.S. 424, 430-32, 91 S.Ct. 849, 853, 28 L.Ed. 2d 158, 164 (1971). The elements of such a claim are that the defendant enforces a policy which is neutral on its face but which has the effect of disproportionately excluding a class of persons who are protected under the anti-discrimination laws. However, the law also recognizes the defense of business necessity; that is, even if the plaintiff proves disparate impact, the landlord may defend by proving that there is a business necessity for the policy. Griggs, supra, 401 U.S. at 431, 91 S.Ct. at 853, 28 L.Ed. 2d at 164.
Our discussion need go no further at this point. The complaint clearly states a cause of action for discrimination based on the adoption of a policy that is allegedly not justified by business necessity but which allegedly has the impact of excluding almost all applicants who intend to pay their rent through an S-RAP subsidy.*fn4 Of course, merely by articulating plaintiff's ...