Van Cleef Realty, Inc. v. New York State Division of Human Rights: New York Appellate Court Affirms Damages Award Against Realty Company for Racial Steering in Violation of State Statute

In addressing state fair housing violations, the New York Supreme Court, Appellate Division, affirmed the Division of Human Rights (DHR) finding of liability for racial steering, left the $10,000 punitive damages award intact, and remitted the case to DHR to reduce the compensatory award from $30,000 to no more than $5,000. Van Cleef Realty (VCR) was alleged to have engaged in racial steering by two black clients seeking a rental unit. A hearing was held before the DHR, which found VCR liable for racial discrimination. The DHR awarded $30,000 in compensatory damages for mental anguish and $ 10,000 in punitive damages. VCR appealed the liability and damages portions of the suit.

Regarding the liability portion, the New York Supreme Court, Appellate Division, noted that "when a rational basis for the conclusion approved by the DHR is found, the judicial function is exhausted." The court found that the DHR’s determination was supported by substantial evidence, so it could not overrule the finding of liability.

Regarding the compensatory damages award, the appellate division found that $30,000 was excessive. It stated that "in order to sustain an award of damages for mental anguish, there must be evidence that the mental anguish was caused by the discriminatory practice, and evidence of the magnitude of the injury." The court noted that the couple in question, while experiencing a form of racial steering in the rental process, were not subjected to prolonged discrimination. Their contact with VCR was limited to a one-time encounter, and VCR's conduct did not affect their ability to find housing, as they were able to find another apartment on the same day. Further, they were not subjected to rude or egregious racial epithets, nor did they produce evidence as to the duration or magnitude of their mental anguish. The court remitted this matter for redetermination of damages, in an amount not to exceed $5,000.

Van Cleef Realty, Inc. v. New York State Division of Human Rights, 216 A.D.2d 306, 627 N.Y.S.2d 744 (1995).

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