The Town of Oyster Bay created two zone districts that benefited the elderly and first-time home buyers alike. Preference for housing in these districts was given to Town residents and their children and parents. The New York State Division of Human Rights (hereinafter “SDHR”) filed an administrative complaint against the Town, alleging these zone districts discriminated based on race and national origin, as only 1.6% of the Town’s population was black. While the SDHR was determining whether they had jurisdiction, the Town filed an action against the SDHR. The action was dismissed by the Supreme Court, Nassau County, and the Appellate Division, Second Department affirmed. The Town then appealed one issue to the Court of appeals; whether the SDHR was engaging in reverse discrimination.
Before the Court of Appeals could address the Town’s claim, it first had to determine whether the claim required the Town to exhaust administrative remedies. A plaintiff is required to exhaust administrative remedies when challenging an action of an administrative agency, as is the case here. However, this rule is not inflexible, as an exception may apply where an administrative complaint would prove futile, or where the plaintiff alleges the administrative body acted unconstitutionally. However, claiming a constitutional violation will not always be sufficient to remove the matter from administrative review. In some cases, the court explained, the complaint may need to be initially filed with the administrative agency for resolution of factual issues, providing the courts with a record for review.
In reviewing the allegations of the parties and the factual issues inherent in the case, the Court of Appeals determined that the Town was not excused from first filing a complaint with the SDHR. The court stated that before the Town’s claim would be ready for judicial review, factual issues had to be resolved. These issues included the effect of the Town’s resident preference and the impact that would result from the removal of the preference. In addition, the court noted that the administrative law judge could make a finding on the factual record that the Town’s resident preference is nondiscriminatory, and, thus, filing an administrative complaint may not be futile.
Town of Oster Bay v. Kirkland, 2012 WL 4932666 (N.Y., Oct. 18, 2012).
The opinion can be accessed here.