Seventh Circuit Rejects Claim That Eviction for Flying Palestinian Flag Violated Discrimination Law

The apartment building owner told plaintiff "to take the flag down pursuant to a policy that the building would stay 'neutral' amidst the Israel-Palestine conflict."

Some short excerpts from yesterday's long decision by Seventh Circuit Judge Joshua Kolar, joined by Chief Judge Michael Brennan, in Farhan v. 2715 NMA LLC:

Manal Farhan is a Palestinian American who flew a Palestinian flag in her apartment window. Defendants, the owner and operator of her apartment building, told her to take the flag down pursuant to a policy that the building would stay "neutral" amidst the Israel-Palestine conflict. Farhan refused and defendants terminated her tenancy. She then sued under the Fair Housing Act ("FHA") and several state laws, alleging discrimination based on national origin….

Farhan pursued a novel and unsupported theory of liability under the FHA: that defendants' application of a "neutrality" policy requiring her, a Palestinian American, to remove a Palestinian flag was national origin discrimination prohibited by the FHA. She further asserted, erroneously, that a showing of discriminatory intent was not required at the pleading stage for her intentional discrimination claims, contrary to precedent. While we stress that the allegations in Farhan's complaint could perhaps, presented or defended differently, state a claim for discrimination under the FHA, we affirm the district court's dismissal….

Farhan asserts that other tenants in the building displayed flags and artwork in their windows in the same or a substantially similar manner as the Palestinian flag in Farhan's window. And on information and belief, none of those tenants received notices of termination. She does not, however, claim that other tenants were able to display flags or symbols relating to the Israel-Palestine conflict….

In opposing defendants' motion, Farhan pursued a theory that "requiring tenants to stay neutral in a conflict concerning their home countries is national origin discrimination." She argued that because defendants' "neutrality" policy related only to the Israel-Palestine conflict, and did not ban, for example, Ukrainian or Russian flags in tenant windows, "this would not be happening if she flew a Ukrainian flag in her window instead of a Palestinian one." …

The Fair Housing Act prohibits discrimination in the provision and maintenance of housing … based on race, color, religion, sex, familial status, or national origin…. Farhan argues that her complaint plausibly alleges that defendants, by enforcing their "neutrality" policy, intentionally discriminated against her based on national origin….

But the district court properly observed that her complaint lacks any allegation relating to a discriminatory intent motivating defendants' "neutrality" policy. The complaint does not allege, for example, that the policy only applies to Palestinian flags, as opposed to Israeli flags or other expressive signage. It does not allege that other non-Palestinian tenants were able to fly Israeli or Palestinian flags, or that the policy was only enforced against Palestinian tenants.

Indeed, the complaint strongly implies the opposite, stating that the policy was "that tenants of Defendants," with no qualification, "are required to remain neutral in the so-called 'Israeli-Palestinian conflict.'" And while the complaint alleges that "other tenants also publicly display flags and artwork in their windows" and "display Christmas or holiday decorations," Farhan makes no claim that such artwork and decorations plausibly related to the Israel-Palestine conflict and would come under the ambit of the "neutrality" policy….

[W]hile we draw all inferences in favor of Farhan, we cannot draw inferences from facts that are not alleged. Had Farhan alleged, for example, that a non-Palestinian tenant had flown a Palestinian or Israeli flag without defendants' intervention, we could perhaps infer a discriminatory intent in her favor. So too if she asserted that the purported "neutrality" policy only prohibited Palestinian flags in practice. But Farhan makes no allegations relating to the national origin of other tenants or the application (or non-application) of the "neutrality" policy to them. Simply put, Farhan has not alleged any facts from which we can infer defendants' intent in applying the "neutrality" policy….

Farhan must plausibly allege that defendants created the "neutrality" policy, or applied it against her, "'because of' and not merely 'in spite of'" her national origin. The complaint makes no such allegation….

The implications from Farhan's position are clear: she was punished for her political views and actions in support of the Palestinian cause. But the FHA's protections simply do not extend to discrimination based on political expression. That the political expression in question implicates Farhan's heritage does not, without more, automatically transform viewpoint discrimination into intentional national origin discrimination. Accepting Farhan's own reading of her complaint, her noncompliance with the neutrality policy—not her protected status—was the reason for her eviction.

{The dissent cites to Christian Legal Soc. v. Martinez (2010) for the suggestion that viewpoint or political expression may be the basis of a discrimination claim if the viewpoint or conduct is "closely correlated" to identity. But that case involved a First Amendment challenge to a law school's nondiscrimination policy requiring Christian student groups to admit homosexual members—a context in which viewpoint discrimination is actionable. In applying rational basis review to the policy, the Court noted only in dicta that "[o]ur decisions have declined to distinguish between status and conduct in th[e] context" of bans on homosexual conduct. We do not read Christian Legal Society to shed much light on FHA discrimination claims.} …

[A] plaintiff may bring a § 3604 discrimination claim without a showing of discriminatory intent under the "modified disparate impact theory" …. Under this analysis, we balance the disparate impact of a policy or action, along with any evidence of discriminatory intent, against the defendant's interest in the challenged policy or action, and the scope of relief sought by the plaintiff…. The [Supreme Court has instructed] courts to "examine with care whether a plaintiff has made a prima facie showing of disparate impact," and clarified that housing policies "are not contrary to the disparate-impact requirement unless they are artificial, arbitrary, and unnecessary barriers."

Of course, a plaintiff need not meet all the elements of a prima facie showing at the pleading stage. Nevertheless, … for an FHA disparate impact claim a plaintiff must plead facts alleging a causal connection between a policy or action and a disparate impact on a protected class. As we have said in the Title VII context, "[d]isparate-impact plaintiffs are permitted to rely on a variety of statistical methods and comparisons to support their claims," and "[a]t the pleading stage, some basic allegations of this sort will suffice."

But Farhan's complaint provides no such comparisons, and she devotes little effort to developing a disparate impact theory in her briefs before us. There is no allegation, for example, about how many tenants are or may be impacted by this rule—much less how many Palestinian tenants—or even if the policy has been enforced beyond just her case. And while Farhan states that other tenants keep flags, artwork, and decorations in their windows, she makes no factual allegations about their national origins from which a comparison can be made. It is not enough that Farhan claims that the policy "negatively impacts Palestinians"—she must plead that the policy negatively impacts Palestinians more by proportion than non-Palestinians. Without any indications of how many Palestinians are or may be affected by the policy, compared to non-Palestinians, the complaint provides no basis from which we can infer a disparate impact.

Farhan's only suggestion of a disparate impact is that, because defendants' "neutrality" policy applied only to the Israel-Palestinian conflict, Palestinian tenants "by definition" were not allowed to express national pride in the same way as other tenants. But this is a non-starter; to the extent that the policy can be said to facially impact Palestinians more than other groups—i.e. the policy is facially discriminatory—"disparate treatment is the proper theory for analyzing the facts of th[e] case, not disparate impact." Disparate impact requires us to look beyond the text of the policy and to its actual effects, but Farhan alleges none that could support her claim.

Again, we do not hold that the kind of policy described in Farhan's complaint could never give rise to a disparate impact theory under the FHA. Given the specific arguments before us, however, Farhan has not claimed a plausible disparate impact theory under § 3604….

Judge Candace Jackson-Akiwumi dissented:

Manal Farhan … alleges facts that allow the plausible inference that the owner and operator of her apartment building ("Defendants") violated the Fair Housing Act ("FHA") by discriminating against her because of her Palestinian national origin….

Farhan's … complaint identifies the "type of discrimination that she thinks occur[red]" (national origin); "by whom" (Defendants); "and when" (in connection with Defendants' eviction of her after she refused to remove a Palestinian flag from her window following the October 2023 escalation of conflict between Israel and Palestine). Granted, the facts she pleads, even taken as true, do not conclusively show Defendants violated the FHA. But they don't need to. Her allegations, theory of the case, and the reasonable inferences therefrom make her claim of discrimination plausible. That's enough to survive a motion to dismiss….

The majority … incorrectly assert[s] that Farhan needed to plead "facts from which we can infer defendants' intent." According to the majority, Farhan might have survived a motion to dismiss had she pleaded "that a non-Palestinian tenant had flown a Palestinian or Israeli flag without defendants' intervention" or that the neutrality policy "only prohibited Palestinian flags in practice." But imposing that burden on Farhan is inconsistent with our case law: a plaintiff need not plead "circumstances that support an inference of discrimination" to survive a motion to dismiss her discrimination claim.

The majority's assertion that Farhan alleged mere "viewpoint discrimination" based on her "conduct, not identity" also does not hold water. As the Supreme Court has explained in the First Amendment context—citing discrimination cases—conduct or viewpoint discrimination can support an inference of animus against a protected group where the targeted conduct or viewpoint is "closely correlated with" that group. CLS v. Martinez. So even if it were true that Farhan only alleged discrimination against a "viewpoint" declaring support for the Palestinian cause, that viewpoint is so "closely correlated with" her being Palestinian that it is plausible to infer—at least at the pleading stage—animus against Palestinians themselves….

Jonathan M. Cyrluk (Carpenter Lipps LLP) represents defendants.