1. Whether the housing policy of Defendant Albert Einstein College of Medicine (AECOM) discriminated facially on the basis of marital status.

2. Whether the Appellate Division erred in holding that Plaintiffs' complaint did not sufficiently plead that Defendant's AECOM housing policy had a disparate impact on the basis of sexual orientation.

1. No. Since Defendant's AECOM housing policy is restricted to those in legally recognized family relationships with a student and not to the student's marital status, Defendant's policy did not facially discriminate on the basis of marital status.

2. Yes. Because the Appellate Division excluded married students, which comprised a significant portion of the benefited group, from its disparate impact analysis, it erred as a matter of law.

Plaintiffs were enrolled at Yeshiva University's Albert Einstein College of Medicine (AECOM). Defendant's university housing policy restricted university-owned housing, which is more affordable than surrounding housing, to medical students, their spouses, and children. To receive housing priority, married couples had to provide the housing office with acceptable proof of marriage. Unable to produce proof of marriage, Plaintiffs, both unmarried lesbians in committed, long-term relationships, were denied university housing with their respective partners.

Plaintiffs sued Defendant, claiming that its university housing policy discriminated against Plaintiffs based on marital status in violation of the New York State and City Human Rights Laws and that the policy had a disparate impact against lesbians and gays in violation of the City Human Rights Law (NYC Admin. Code § 8-107[5] and [17]). Defendant moved to dismiss Plaintiffs' complaint pursuant to CPLR 3211(a)(7). The Supreme Court granted Defendant's motion and dismissed Plaintiffs' complaint in its entirety. The Appellate Division affirmed, holding that there was no discrimination or disparate impact on homosexuals since Defendant's housing policy "had the same impact on non-married heterosexual medical students as it had on non-married homosexual medical students." Because Plaintiffs pleaded allegations sufficient to raise an issue of fact as to whether Defendant's housing policy had a disparate impact on the basis of sexual orientation under New York law, the Court of Appeals modified the order of the Appellate Division and remitted the case to the Supreme Court for further proceedings.

A claim of discrimination based on sexual orientation may be stated where a facially neutral policy or practice has a disparate impact on a protected group (NYC Admin. Code § 8-107[17][a][1]-[2]). Under this section, a claim is established where a plaintiff demonstrates that a defendant's policy or practice "results in a disparate impact to the detriment of any group protected under the City Human Rights Law." The Court of Appeals stated that in order to determine whether Defendant's AECOM housing policy had a disparate impact based on sexual orientation, there must be a comparison which includes consideration of the full composition of classes actually benefited under the challenged policy. The Court of Appeals reasoned that the exclusion of married students from the necessary comparison group conflicted with controlling disparate impact analysis and methodology. Married students constitute a significant portion of the class of eligible persons under Defendant's policy for the substantial economic and social benefits of cohabiting with non-students in university-owned housing. No present authoritative precedent precludes a plaintiff in a disparate impact discrimination case from pointing out the class of persons eligible for benefits under the challenged AECOM policy.

To exclude from the disparate impact comparison group a large portion of the class benefited by the AECOM policy would render meaningless the disparate impact analysis of the United States Supreme Court's ruling in Griggs v. Duke Power Co., 401 U.S. 424 (1971). In that decision, the Supreme Court held that under the Civil Rights Act, "practices, procedures, or tests neutral on their face, and even neutral in terms of intent, cannot be maintained if they operate to freeze the status quo of prior discriminatory employment practices." Looking beyond facial neutrality, the Supreme Court stated that the Civil Rights Act prohibits not only overt discrimination but also practices which are fair in form but discriminatory in operation. Under Griggs, a prima facie case of disparate impact is established where it is demonstrated that a test or policy "selects applicants for hire or promotion in a racial pattern significantly different from that of the pool of applicants." Since the Appellate Division, as a matter of law, excluded from consideration married students, who constituted a significant portion of the benefited group, the Court of Appeals held that the Appellate Division improperly dismissed Plaintiffs' complaint and reinstated and remitted the complaint to the Supreme Court for further proceedings. Upon remittal, if Plaintiffs establish that Defendant's housing policy disproportionately burdens lesbians and gays, the City Administrative Code requires Defendant to justify its policy as bearing a "significant relationship to a significant business objective" (NYC Admin. Code § 8-107[17][a][2]).