Real Estate & Property Law

Co-Op Directors Can Be Liable for Race Bias, New York Appeals Court Rules


The Dakota, New York City. Image from Shutterstock.

Members of the board of directors of the Dakota co-op in New York City may be held liable for racial bias, a New York appeals court has ruled.

The decision (reg. req.) by the Appellate Division, First Department, allows a lawsuit by a black resident who claimed racial bias after he wasn’t allowed to buy an adjacent unit, report the New York Law Journal and Reuters. The resident, former board president and Wall Street investor Alphonse “Buddy” Fletcher Jr., also claims retaliation for his comments on behalf of minority and Jewish individuals.

The appeals court dismissed some of Fletcher’s claims, but allowed core claims under city and state human rights laws that bar discrimination in housing, the story says. The board has denied Fletcher’s allegations.

Christine Chung, a partner at Quinn Emanuel Urquhart & Sullivan represents the defendants. “We’re gratified that the appeals court rejected more of Mr. Fletcher’s claims against the Dakota and its board members and are confident that discovery will demonstrate all of plaintiffs’ claims to be baseless,” she told the New York Law Journal. “The board made a good faith judgment that Mr. Fletcher, a former two-time board president himself, was not financially qualified to purchase a second Dakota apartment.”

Fletcher’s suit attracted media attention when he alleged the board had also discriminated against minority celebrities who were identified in the press as singer Roberta Flack and actor Antonio Banderas.

Fletcher won a settlement in a previous race bias suit against his former investment firm, Reuters says. His wife, Ellen Pao, recently sued a venture capital firm where she worked for alleged sexual harassment and discrimination, Reuters adds. She is a former associate at Cravath Swaine & Moore.

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