On February 20, the U.S. Court of Appeals for the 2nd Circuit vacated in part, affirmed in part, and reversed in part a lower court’s ruling in a case involving allegations of housing discrimination under the Fair Housing Act (FHA) and violations of the FCRA. According to the opinion, the dispute arose when a housing provider used the defendant’s criminal history screening platform for a rental application submitted by the plaintiff’s son, who was disabled and under a court-appointed conservatorship, resulting in an adverse decision based on records identified by the provider’s chosen criteria.

The plaintiff sought details of the report to challenge the denial but was purportedly told she needed a notarized power of attorney and instead provided a conservatorship certificate lacking a required visible seal, which was deemed facially invalid under Connecticut law. She claimed these actions produced a disparate impact on minority and disabled applicants under the FHA and made it impossible to obtain her son’s consumer file in violation of the FCRA. The district court rejected the plaintiff’s FHA disparate-impact and handicap discrimination claims, found an advocacy organization had standing to sue, and held the defendant liable under the FCRA for requiring a power of attorney for four months before releasing a consumer file, awarding statutory and punitive damages. Both sides appealed.

On appeal, the 2nd Circuit affirmed the absence of FHA liability under the handicap discrimination and failure-to-accommodate claims. The court emphasized that federal law permits reporting criminal records and certain non-conviction records less than seven years old, and that liability under the FHA requires a direct causal link between the challenged conduct and the alleged harm. The court found the housing provider’s independent decisions on screening parameters and application outcomes broke the chain of causation. The panel also agreed that the plaintiff failed to establish a prima facie case of disparate-impact discrimination under the FHA, finding that the defendant did not proximately cause the denial of housing at issue. Further, the court held that the advocacy organization lacked standing to sue under the FHA because it did not suffer a concrete injury caused by the defendant’s actions, noting that an entity cannot manufacture standing simply by expending resources to oppose those actions.

However, the court reversed the lower court’s finding of liability under the FCRA, concluding that the plaintiff did not submit proper identification despite “clear instructions” on documentation requirements. The court determined that requiring a facially valid conservatorship certificate was reasonable under the FCRA’s mandate for proper identification and that any delay in providing it did not amount to a constructive denial given the applicant’s role in the delay.