Read our article on this lawsuit from the December 2010 issue of Tenant/Inquilino:

Fighting the Housing Court Blacklist

By Steve Dobkin and James Fishman

Tenant/Inquilino, December 2010

“Whether you are a landlord or a tenant, the Civil Court is dedicated to providing access to fair and efficient justice.” states the Web site of the New York City Civil Court’s Housing Part, commonly known as Housing Court.

These words ring hollow in light of the “Housing Court blacklist,” the result of the New York State Office of Code Administration (OCA) selling access to internal court reports containing minimal details of pending Housing Court cases to tenant screening bureaus (TSBs). The TSBs convert the data into misleading reports, which they sell to real-estate agencies and individual landlords that use them to screen potential tenants.

Met Council and the Housing Committee of the New York City chapter of the National Lawyers Guild are joining forces to bring a federal civil-rights suit against the state court system’s chief administrative judge. It seeks a declaration that the sale of Housing Court data violates tenants’ constitutional rights to access to the courts and due process of law, and an injunction to end those sales.

The court data sold is transmitted electronically from OCA’s computer system to the TSBs. It includes coded information about the initial filing of each case (names and addresses of the parties; type of case, i.e. nonpayment or holdover; amount sued for; docket number; and county) and a single-word code for the disposition (judgment, settled, warrant of eviction issued, dismissed, discontinued, etc.).

Unlike the reports from of the “big three” credit reporting agencies, (TransUnion, Equifax and Experian), tenant-screening reports include pending proceedings in which no judgment has been entered. Hence a stigma is attached to merely being named in a court proceeding, regardless of its merits.

This places a tremendous chilling effect on the exercise of the many rights New York state and city law give tenants to defend themselves in eviction proceedings. It forces tenants to choose between Scylla and Charybdis: Give up their legal rights, or find themselves on the Housing Court blacklist, effectively barred from renting another apartment or purchasing a cooperative unit almost anywhere in the country.

Tenants, who in the past were able to exercise their legal rights to withhold their rent and organize rent strikes when, for example, landlords failed to provide heat in winter, now face the all but certain consequence that such actions will immediately land them on a blacklist. Those who dare to defend themselves against even the most frivolous eviction proceedings, or simply seek additional time from a Housing Court judge to vacate in a no-fault eviction proceeding, are among the many innocent people who will appear on the blacklist and be deemed undesirable troublemakers by most prospective landlords. Even tenants who face eviction by a bank solely because their landlords failed to pay their mortgages can be blacklisted.

The planned action under 42 USC §1983 will argue that this places an extreme burden upon tenants who invoke laws designed to protect them from eviction, and thus, under color of state law, deprives them of their constitutional right to access to the courts. Although the U.S. Supreme Court has constructed numerous barriers to suits against courts, these do not apply when a judge is sued for actions taken in an administrative, rather than a judicial, capacity.

The plan is to assemble two sets of plaintiffs: people who have already been denied housing because of their names being on a blacklist, and tenants who are concerned about asserting their legal rights against an eviction proceeding, out of fear of the blacklists.

Efforts to reform tenant blacklisting through litigation and legislation have often proved to resemble efforts to put lipstick on a pig, to quote a comparison popular in the 2008 election.

Previous lawsuits against various blacklisting agencies, filed under federal and state fair-credit disclosure acts, have focused on their failure to fully disclose the details of the Housing Court litigation, including favorable dispositions to tenants.

Under a 2006 settlement in a federal class-action suit brought by James Fishman, among others, entitled White v. First Advantage SafeRentAmerican Registry, the tenant screening agency agreed to pay as much as $2 million to as many as 35,000 tenants who could demonstrate that information was missing from their screening reports. The defendant also agreed to accurately report the outcome of the Housing Court cases and expunge a case from its files if a judge determined that it had no merit, or if a landlord agreed that it had been brought by mistake.

The fundamental problem, however, is that most prospective landlords couldn’t care less about whether a tenant has a legitimate defense to eviction. The mere presence of a tenant’s name on the Housing Court computer list spells “troublemaker,” and people who went to court to vindicate their legal rights are seen as the least desirable potential renters.

In November 2006, a New York Times article quoted the president of a California tenant screening company who noted that “It is the policy of 99 percent of our customers in New York to flat-out reject anybody with a landlord-tenant record, no matter what the reason is and no matter what the outcome is, because if their dispute has escalated to going to court, an owner will view them as a pain.”

In March, Mayor Michael Bloomberg signed into law the Tenant Fair Chance Act, which requires landlords to inform prospective tenants whether they are using a tenant-screening service, and to provide contact information for the company so that tenants can clear records that are erroneous.

The fact that the City Council passed this law unanimously, with no opposition from the real-estate industry, hints at its effectiveness. By the time that the tenant clears his or her name, the apartment will have been rented to someone else. Clearing their name with one tenant-screening company will not take a tenant off any other blacklists. And the only way this procedure will get a tenant off the blacklist will be if they can prove they were erroneously confused with someone else; otherwise, they might as well be in Salem, Massachusetts, in 1692, trying to explain away their presence on a list of witches.

Although the new city law will not eviscerate the shadow cast by OCA’s selling out of any tenant who dares to go to court to fight for his apartment, tenants who are rejected should request an “adverse action” notice from the landlord. They are entitled to one under federal and state fair credit reporting acts. These notices inform the tenant of his or her right to contact the screening company, review the entire contents of the report, and correct inaccuracies, at no cost.

We are seeking plaintiffs for the action against OCA who have received adverse action notices informing them that they were rejected because of the tenant screening report.

Why is the court system, supposedly an honest broker in disputes between litigants, literally selling out tenants? In 2007, an internal legal memo to the chief administrative judge argued that OCA has no choice but to sell the computer lists (although they are not available to the public through Freedom of Information Law requests). In an argument out of Through the Looking Glass, the memo expressed concern that refusing to sell the lists would violate the TSBs’ constitutional rights.

However, it appears that the only law that deals with the provision of computerized court information is one that specifies the New York Law Journal as the official publisher of court calendars. Otherwise, as tenant advocates know, access to court files is available at Housing Court five files at a time. It is questionable whether the tenant-screening companies would be able to conduct viable businesses in New York City if they were forced, like everyone else, to go to the Housing Court clerk’s office and copy information by hand, or line up to make copies for 15 cents per page at the venerable copying machine at the clerk’s office.

The more believable reason for the sales is money, although the profits appear to go to the state’s general treasury and are not earmarked for the Housing Court. A chart produced by OCA in White v. First National Registry disclosed that from April 2005 through March 2008, it had garnered well over a half million dollars from at least nine tenant-screening companies. We don’t yet know how many tenant-screening companies are buying these lists, but there are hundreds of TSBs nationwide.

Cynics have observed that discouraging tenants from asserting legal defenses is consistent with Housing Court’s emphasis on the rapid resolution of cases and a view of the court as a glorified rent-collection agency. Housing Court judges, who are reappointed for five-year terms by the administrative judge of the Civil Court, are rated for their efficiency in dealing with the voluminous caseload. If one thinks of Housing Court as an eviction factory, the blacklist, which roots out much time-consuming litigation, is certainly consistent with concepts of mass production.

Ironically, the OCA now excludes from the data it supplies nonpayment proceedings which are filed by a landlord, but remain unanswered and never appear on the court calendar. While this move dramatically reduces the number of cases reported, it encourages tenants to resolve issues of unpaid rent out of court, thereby risking default, but avoiding the services of a Housing Court judge. Once a tenant answers the petition in court, he or she is automatically blacklisted.

We are hopeful that the federal court will view this system for what it is; a constitutionally defective mechanism for depriving tenants of their ability to enforce their rights.