Younger Abstention and State-Court Review as Adequate Forums for Constitutional and Preemption Challenges to NYC’s Source-of-Income Law

1. Introduction

This commentary analyzes the Second Circuit’s summary order in 216 East 29th Street Trust v. City of New York, a case lying at the intersection of:

• New York City’s prohibition on source-of-income discrimination in housing (Local Law 10/2008);
• The federal Section 8 housing voucher framework, particularly Emergency Housing Vouchers; and
• The federal abstention doctrine under Younger v. Harris.

The plaintiff, 216 East 29th Street Trust (the “Trust”), owns an apartment building in New York City. It was approached by a prospective tenant, Dmitri Derodel, who held an Emergency Housing Voucher administered under the federal Section 8 program. After the Trust initially refused to accept vouchers and later resisted signing required Section 8 documentation, Derodel filed an administrative complaint with the New York City Commission on Human Rights (the “Commission”) alleging lawful source-of-income discrimination under Local Law 10 (codified in N.Y.C. Admin. Code § 8‑107(5)).

Before the Commission formally initiated its enforcement case at the Office of Administrative Trials and Hearings (“OATH”), the Trust sued the City of New York in federal district court. The Trust sought a declaration that Local Law 10 is:

• Unconstitutional under the Fourth Amendment because it allegedly coerces landlords into consenting to searches and inspections tied to participation in Section 8; and
• Preempted by federal law governing the Section 8 program and its implementing regulations.

The City, supported by intervenor Safe Horizon, Inc. (a non-profit that serves housing‑insecure New Yorkers), moved to dismiss on jurisdictional and merits grounds. The district court (Ramos, J.) dismissed the case, primarily relying on Younger abstention, and treated the Trust’s cross-motion for summary judgment as moot.

On appeal, the Second Circuit affirmed, holding that the federal courts must abstain under Younger because:

• There is an ongoing state administrative enforcement proceeding (the Commission/OATH case);
• That proceeding implicates an important state interest (enforcement of anti-discrimination and housing laws); and
• The Trust has an adequate opportunity to raise both constitutional and preemption challenges in the state system, via OATH and subsequent Article 78 review (including “hybrid” Article 78/declaratory judgment proceedings for facial challenges).

Although issued as a summary order without precedential effect (under FRAP 32.1 and Second Circuit Local Rule 32.1.1), the decision is important as persuasive authority. It consolidates several strands of doctrine:

• The narrowed but still potent Younger abstention framework after Sprint Communications, Inc. v. Jacobs;
• The robust capacity of New York’s Article 78 procedure (and hybrid Article 78/declaratory actions) to adjudicate both facial and as‑applied federal constitutional claims and preemption defenses; and
• The federal courts’ reluctance to preempt ongoing state or local enforcement of civil-rights and housing regulations, even when landlords frame their attacks as facial constitutional or preemption challenges.

2. Summary of the Opinion

2.1 Procedural Posture

The Trust filed a federal suit against the City of New York seeking:

• A declaration that Local Law 10 is unconstitutional under the Fourth Amendment; and
• A declaration that Local Law 10 is preempted by the federal Section 8 statute and HUD regulations.

The City and Safe Horizon moved to dismiss on several grounds, including:

• Lack of jurisdiction (standing, ripeness, and Younger abstention); and
• Failure to state a claim.

The district court granted the motions to dismiss primarily on Younger abstention, and declined to reach the merits. The Trust appealed.

2.2 The Second Circuit’s Holding

The Second Circuit:

• Affirmed the district court’s dismissal under Rule 12(b)(1) on Younger abstention grounds;
• Did not reach:
  • Alternative jurisdictional issues (standing and ripeness); or
  • The merits (constitutional and preemption claims).
• Confirmed that:
  • Younger abstention can apply even to facial challenges to a statute; and
  • New York’s Article 78 procedure, including its conversion to a hybrid Article 78/declaratory judgment proceeding, offers an adequate opportunity to litigate both:
    • Facial constitutional challenges; and
    • As‑applied constitutional and preemption claims arising from enforcement by the Commission and OATH.

As to the specific facts, the court concluded that:

• The Commission proceeding (filed by Derodel after the Trust sued in federal court) is an “ongoing state civil enforcement proceeding” within Sprint’s categories;
• That proceeding undeniably involves an important state interest—combatting housing discrimination, including source‑of‑income discrimination, under the NYCHRL; and
• The Trust can raise its Fourth Amendment and preemption arguments:
  • Initially before OATH; and
  • On review in state court via Article 78, which New York courts can and do convert to a hybrid Article 78/declaratory judgment proceeding for facial challenges.

Because these conditions for Younger were satisfied, the court held abstention mandatory and therefore affirmed dismissal of the federal action.

3. Analysis

3.1 Precedents Cited and Their Role in the Decision

3.1.1 Younger v. Harris, 401 U.S. 37 (1971)

Younger is the foundational abstention case. The Supreme Court held that federal courts must not enjoin ongoing state criminal prosecutions except in extraordinary circumstances. The rationale: respect for comity and federalism—federal courts should not unduly interfere with state judicial processes.

The Second Circuit highlights a key feature of Younger that directly counters the Trust’s argument:

• Younger involved a facial challenge to the constitutionality of a state statute, yet abstention still applied.

The court uses this to reject the Trust’s assertion that facial challenges lie outside the reach of Younger. The opinion explicitly notes that Younger “presented the issue of whether the underlying state law was ‘constitutional on its face’” and yet abstention was ordered.

3.1.2 Sprint Communications, Inc. v. Jacobs, 571 U.S. 69 (2013)

Sprint sharply narrowed the scope of Younger abstention, clarifying that it is appropriate only in three “exceptional” categories:

1. Ongoing state criminal prosecutions;
2. Certain “quasi‑criminal” or civil enforcement proceedings; and
3. Civil proceedings that uniquely further the state courts’ ability to perform their judicial functions.

The panel, through its citation to Falco v. Justices of the Matrimonial Parts, uses Sprint as the doctrinal anchor for the “exceptional circumstances” test. The Commission/OATH enforcement action against the Trust falls into the second category: a civil enforcement proceeding akin to a criminal prosecution, where a governmental entity investigates and prosecutes violations of law (here, the NYCHRL).

3.1.3 Falco v. Justices of the Matrimonial Parts of Supreme Court of Suffolk County, 805 F.3d 425 (2d Cir. 2015)

Falco interprets Sprint in the Second Circuit. It sets out the operative Younger test:

• First, determine if the state proceeding fits within one of the three Sprint categories;
• If so, abstention is required if:
  • The state proceeding implicates an important state interest; and
  • The state proceeding affords the federal plaintiff an adequate opportunity for judicial review of federal constitutional claims.

The Second Circuit essentially walks through this framework:

• The Trust concedes there is a pending civil enforcement proceeding (Commission/OATH) and an important state interest (anti-discrimination enforcement). Thus, only the “adequate opportunity” prong is contested.

3.1.4 Disability Rights N.Y. v. New York, 916 F.3d 129 (2d Cir. 2019)

Disability Rights is cited for:

• The principle that federal courts are generally “obliged to decide cases within the scope of federal jurisdiction,” highlighting that abstention is an exception; and
• The standard of review—whether the requirements for abstention have been met is an “essentially legal determination” subject to de novo review.

This frames the appellate posture: the Second Circuit independently evaluates whether Younger criteria are satisfied, not merely deferring to the district court’s judgment.

3.1.5 Lawson v. City of Buffalo, 52 F. App’x 562 (2d Cir. 2002)

Lawson is a Second Circuit summary order in which the court affirmed dismissal on Younger grounds of a facial challenge to a law. The panel uses Lawson, in combination with Younger itself, to refute the Trust’s attempted categorical distinction between facial and as‑applied challenges for abstention purposes.

3.1.6 United States ex rel. Kreindler & Kreindler v. United Techs. Corp., 985 F.2d 1148 (2d Cir. 1993)

Kreindler is cited to reiterate a basic procedural rule:

• When a party moves to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) as well as on other grounds, the court must address the 12(b)(1) challenge first.

By invoking this principle, the Second Circuit justifies its decision to resolve the case entirely on abstention (treated as a jurisdictional bar in this context), without reaching standing, ripeness, or merits.

3.1.7 New York City Human Rights Commission Review & Article 78: Marine Holdings, LLC v. NYC Comm’n on Human Rights, 31 N.Y.3d 1045 (2018)

Marine Holdings is invoked to demonstrate that New York courts provide judicial review of Commission decisions through:

• An Article 78 proceeding in state court, which allows a party to challenge final agency determinations for arbitrariness, errors of law, or constitutional infirmities.

This is central to the court’s conclusion that the Trust has an “adequate opportunity” for judicial review in the state system.

3.1.8 Hybrid Article 78/Declaratory Judgment Cases: Pilarz & MHC Greenwood Village

• Pilarz v. Helfer, 148 A.D.3d 1714 (4th Dep’t 2017);
• MHC Greenwood Village NY, LLC v. County of Suffolk, 58 A.D.3d 735 (2d Dep’t 2009).

These cases exemplify how New York courts often:

• “Convert” or treat an Article 78 proceeding as a hybrid Article 78/declaratory judgment action when the petitioner raises facial constitutional challenges.

The Second Circuit invokes these cases to demonstrate that:

• Facial challenges like the Trust’s can be fully adjudicated in state court following an administrative proceeding; and
• The supposed “inadequacy” of Article 78 to handle facial challenges is simply incorrect.

3.1.9 Article 78 and Constitutional Claims: University Club and Hudson Shore Associates

• University Club v. City of New York, 842 F.2d 37 (2d Cir. 1988)

University Club establishes that constitutional claims arising from the application of a statute can be raised via Article 78. The Second Circuit quotes it for the proposition that New York case law “abundantly” supports Article 78 as a vehicle for constitutional review of agency actions.

• Hudson Shore Assocs. Ltd. P’ship v. New York, 139 F.4th 99 (2d Cir. 2025)

The opinion quotes Hudson Shore for a specific point highly relevant to the Trust’s Fourth Amendment theory: Article 78 has been used “for decades” to challenge the reasonableness of regulatory searches under the Fourth Amendment. That directly undercuts the Trust’s claim that it lacks an adequate state forum for its Fourth Amendment objections to the Section 8 inspection regime.

3.1.10 OATH Decisions: Ponzio and Shmushkina

The Second Circuit also cites two OATH memorandum decisions:

• Dep’t of Sanitation v. Ponzio, OATH Index No. 265/05 (Mar. 22, 2005), as modified by Comm’r Dec. (Apr. 11, 2005):
  • An OATH decision where the constitutionality of a search was adjudicated.
• Comm’n on Human Rights ex rel. Shmushkina v. New Brooklyn Realty, OATH Index Nos. 2541/08, 2542/08, 2543/08 (Jan. 2, 2009):
  • An OATH case adjudicating a preemption challenge to Local Law 10 itself.

These citations serve a crucial evidentiary role: they show that OATH routinely entertains constitutional and preemption arguments in the first instance, undermining any claim that the administrative process is structurally incapable of hearing such defenses.

3.1.11 Procedural Disposition: M.O. and Daly

• M.O. v. N.Y.C. Dep’t of Educ., 793 F.3d 236 (2d Cir. 2015):
  • Affirms that an appellate court can affirm a lower court’s judgment on any ground supported by the record.
• Daly v. Citigroup Inc., 939 F.3d 415 (2d Cir. 2019):
  • Emphasizes that when a court dismisses on Rule 12(b)(1) grounds (lack of jurisdiction), it does not reach the merits.

These cases are cited to explain:

• Why the Second Circuit is focusing solely on abstention (a jurisdictional ground) and not addressing ripeness, standing, or the substantive claims of unconstitutionality and preemption.

3.2 The Court’s Legal Reasoning

3.2.1 The Younger Framework as Applied

The court’s reasoning follows the Sprint/Falco template:

1. Is there an ongoing state proceeding in one of the three Sprint categories?
   Yes. The Commission, after Derodel’s complaint, initiates a civil enforcement process against the Trust. That process includes:
   • Investigation by the Commission;
   • Possible referral to OATH for an adjudicatory hearing; and
   • Issuance of an order by the Commission that may impose relief and civil penalties.
   This is paradigmatically a “civil enforcement proceeding.”
2. Does the proceeding implicate an important state interest?
   Yes, and this is essentially undisputed. Combating:
   • Housing discrimination; and
   • Lawful source-of-income discrimination
   under the NYCHRL is a core municipal and state policy. The Commission’s enforcement of Local Law 10 is central to that policy.
3. Does the proceeding afford an adequate opportunity to raise federal claims?
   This is the only contested element, and the crux of the court’s analysis. The Trust argued that state procedures could not adequately entertain its:
   • Fourth Amendment challenge (alleged coerced consent to inspections and access to records under Section 8’s HAP contract requirements); and
   • Federal preemption claim (arguing that federal Section 8 law precludes New York City from mandating landlord participation through an anti-discrimination rule).
   The court rejects this, pointing to:
   • OATH’s demonstrated willingness to adjudicate constitutional and preemption defenses (e.g., Ponzio, Shmushkina);
   • The availability of Article 78 review of Commission orders in state courts (Marine Holdings, University Club); and
   • New York courts’ practice of converting Article 78 cases into hybrid Article 78/declaratory actions for facial constitutional challenges (Pilarz, MHC Greenwood Village).

Because all three elements are satisfied, the Second Circuit holds that abstention is required.

3.2.2 Facial vs As‑Applied Challenges Under Younger

A notable aspect of the ruling is the explicit rejection of a supposed carve‑out from Younger for facial challenges. The Trust tried to avoid abstention by labeling its claims as a facial constitutional attack on Local Law 10 and on the Commission’s authority to compel landlords into Section 8. The court responds in two steps:

1. No categorical exception for facial challenges:
   • Younger itself involved a facial challenge to a criminal statute and still applied abstention.
   • Lawson reaffirms, in the Second Circuit, that a facial challenge can be dismissed on Younger grounds.
2. Facial challenges are in fact reviewable in the state system:
   • Article 78 proceedings can be converted into hybrid Article 78/declaratory actions for exactly such facial challenges.
   • Thus, even if the Trust’s attack is best characterized as facial, the state courts remain competent and open fora.

The court therefore “assumes arguendo” that the Trust’s challenge is facial, but holds that even then, Younger abstention is still applicable and appropriate.

3.2.3 As‑Applied Challenges and OATH’s Role

If the Trust’s claims are more accurately characterized as as‑applied challenges—i.e., that Local Law 10, as applied to the Trust’s particular situation (being forced into a Section 8 HAP contract with attendant inspection and records‑access obligations) is unconstitutional or preempted—the route is even clearer:

• OATH can adjudicate such as‑applied federal defenses, as indicated by the cited OATH decisions;
• The Commission can then adopt, modify, or reject OATH recommendations; and
• Any adverse outcome can be challenged in state court under Article 78, which, as University Club and Hudson Shore illustrate, has long been used to raise constitutional objections and challenge regulatory searches under the Fourth Amendment.

Thus, whether framed as facial or as-applied, the Trust’s objections find a suitable forum in the state process. This forecloses the argument that federal intervention is necessary to protect federal rights.

3.2.4 The Preemption Claim and Adequate State Remedies

The Trust argued that Local Law 10 is preempted by the federal Section 8 scheme. In many contexts, federal preemption claims can, in theory, justify federal court intervention, especially where:

• State enforcement is alleged to contravene federal supremacy; and
• No adequate state remedy exists or the federal interest is uniquely strong.

The Second Circuit, however, points out that:

• OATH has previously addressed preemption challenges to Local Law 10 (as in Shmushkina); and
• State courts can review those determinations under Article 78, including considering federal preemption arguments.

In short, state administrative and judicial mechanisms are not “hostile” to federal law; they are recognized vehicles for asserting preemption claims. That undercuts any case for a special federal – as opposed to state – forum for resolving the Trust’s preemption argument.

3.2.5 Abstention as a Rule 12(b)(1) Dismissal

The court, echoing Kreindler and Daly, characterizes abstention as a subject‑matter jurisdiction issue for purposes of procedural ordering. Once it finds that abstention is proper:

• The federal court dismisses on Rule 12(b)(1) grounds, without reaching:
  • Ripeness;
  • Standing; or
  • The substantive contentions about the Fourth Amendment or preemption.

This procedural characterization has two practical consequences:

• The district court’s dismissal on abstention grounds is treated as a jurisdictional dismissal, not an adjudication on the merits; and
• The Trust remains free to pursue its claims in the state administrative and judicial processes without issue preclusion from federal merits findings (since there are none).

3.3 Impact on Future Cases and the Relevant Area of Law

3.3.1 Impact on Landlord Challenges to Local Law 10 and Section 8

While non-precedential, this summary order sends a clear signal to similarly situated landlords:

• Federal courts will not entertain pre‑emptive declaratory challenges to Local Law 10 when an enforcement proceeding is underway (or imminently underway) before the Commission/OATH.
• Landlords who object to:
  • The inspection obligations and records‑access rules associated with Section 8 HAP contracts; or
  • The alleged coercion inherent in being forced to accept vouchers;
  must first litigate these disputes in the city administrative forum and then in state court via Article 78.

This effectively channels challenges to Local Law 10’s application to voucher-holders into the state system and discourages “race to the courthouse” strategies aimed at federal preemption of ongoing city enforcement.

3.3.2 Reinforcing the Breadth of “Adequate Opportunity” Under Younger

The decision robustly affirms the principle that:

• An administrative scheme followed by state judicial review can provide an adequate opportunity to litigate federal constitutional and preemption claims, even if:
  • The initial hearing is before a non‑Article III tribunal (e.g., OATH); and
  • The complete panoply of declaratory relief is not available in the first instance.

For future litigants in the Second Circuit, it will be hard to argue that:

• New York’s Article 78 process is inadequate to hear federal claims; or
• Facial constitutional challenges are exempt from the Younger regime when associated with an ongoing enforcement action.

3.3.3 Implications for Section 8 and Local Human Rights Laws

Substantively, the core issues—whether:

• Local Law 10 unconstitutionally coerces participation in a federal program under the Fourth Amendment;
• The Section 8 scheme’s inspection and access provisions implicate the doctrine of “unconstitutional conditions”; and
• Federal Section 8 law preempts municipal requirements prohibiting voucher discrimination;

remain unresolved by this decision. However, the opinion implicitly recognizes:

• That local anti‑discrimination laws can interact with federal subsidy regimes without automatically raising preemption concerns so acute as to justify bypassing state processes;
• That questions about the constitutionality of Section 8‑related inspections and records access are not “off limits” for local tribunals and state courts, which have a long history of handling Fourth Amendment and preemption issues.

Thus, the order:

• Does not insulate Local Law 10 from constitutional or federal scrutiny; rather, it channels that scrutiny into state forums.

3.3.4 Strategic Lessons for Constitutional Litigants

For litigants seeking to challenge state or municipal regulatory schemes:

• Labeling a claim as a “facial” constitutional challenge is not enough to defeat Younger where there is an active enforcement proceeding;
• Arguments that an administrative forum is “inadequate” will be closely scrutinized against:
  • The actual practice of administrative bodies (like OATH) in hearing federal defenses; and
  • The availability and breadth of state‑court review (here, hybrid Article 78/declaratory proceedings).
• Efforts to preempt state enforcement by filing first in federal court are likely to fail where the state-created process is robust and longstanding.

4. Complex Concepts Simplified

4.1 Younger Abstention in Plain Terms

What is Younger abstention?
It is a doctrine that says: if a state is already pursuing a case (criminal or certain civil/enforcement matters), federal courts generally must stay out and let the state process run its course, including review in state appellate courts. Federal courts avoid “interfering” with ongoing state proceedings out of respect for state sovereignty and efficiency.

When does it apply?
After Sprint, it applies in three categories only:

1. Ongoing state criminal prosecutions;
2. “Civil enforcement” actions that look like criminal prosecutions (e.g., the state enforcing its laws against a particular actor); and
3. Special civil proceedings tightly connected to a state court’s core functions (e.g., contempt proceedings).

Even if a case fits one category, the federal court will abstain only if:

• The state proceeding involves an important state interest (e.g., enforcing anti-discrimination laws); and
• The person being sued has an adequate chance in the state system to raise federal constitutional issues.

4.2 Facial vs As‑Applied Challenges

Facial challenge:

• The plaintiff claims a law is invalid “on its face,” i.e., in all or nearly all of its applications, not just in their particular situation. Example: “Local Law 10 is always unconstitutional because it coerces all landlords into illegal searches.”

As‑applied challenge:

• The plaintiff concedes the law might be valid in general, but claims it is unconstitutional in the way it is applied to them. Example: “Local Law 10, as applied to my particular Section 8 situation, violates my Fourth Amendment rights.”

This decision emphasizes that Younger abstention can apply to both kinds of challenges when there is an ongoing enforcement action.

4.3 Article 78 and Hybrid Proceedings

Article 78 proceeding (New York practice):

• A special type of lawsuit in New York state court used to challenge actions and decisions by state or local agencies (like the Commission on Human Rights). A party can argue that the agency acted arbitrarily, unlawfully, or unconstitutionally.

Hybrid Article 78/declaratory judgment proceeding:

• New York courts often “convert” an Article 78 case into a hybrid that both:
  • Reviews the agency action; and
  • Issues a broader declaration about the facial constitutionality or legality of the underlying law.

This flexibility is what allows New York courts to hear facial constitutional challenges in the same posture as an agency-review proceeding.

4.4 The Section 8 Program and Fourth Amendment Concerns

Section 8 / Housing Choice Voucher Program:

• A federal program administered by HUD and local public housing authorities (PHAs).
• Voucher holders find private rental units and use a voucher to help pay rent.
• Landlords who participate must sign a Housing Assistance Payment (HAP) contract with the PHA.

The HAP contract requires:

• Compliance with Housing Quality Standards (HQS), including safety and habitability rules (smoke detectors, proper ventilation, etc.);
• Pre‑lease inspections and possibly later inspections to ensure compliance;
• Access by the PHA, HUD, and the Comptroller General to:
  • The premises; and
  • Relevant financial and other records.

The Trust frames these requirements as effectively coerced searches and argues that, because Local Law 10 forces landlords to accept Section 8 voucher holders, the law compels them to submit to unconstitutional searches and records‑access obligations.

Unconstitutional conditions theory (simplified):

• The government cannot condition a benefit (e.g., ability to rent to certain tenants without penalties) on surrendering a constitutional right (e.g., the right to be free from unreasonable searches) in a coercive way.

The Second Circuit does not decide whether this theory is correct in the Section 8/local anti-discrimination context. Instead, it says that this is precisely the type of question that can and should be tested in the state administrative and judicial system first.

5. Conclusion

216 East 29th Street Trust v. City of New York is formally a non‑precedential summary order, but it offers a clear and structured articulation of several important principles:

1. Scope of Younger Abstention:
   • Younger applies not only to criminal and quasi‑criminal cases, but also to certain civil enforcement actions like Commission/OATH enforcement of the NYCHRL;
   • Younger does not distinguish between facial and as‑applied challenges—both can be subject to abstention where the other criteria are met.
2. Adequacy of State Forums:
   • New York’s administrative and judicial machinery—OATH and Article 78 (including hybrid Article 78/declaratory actions)—is an adequate forum for litigating:
     • Fourth Amendment claims related to regulatory inspections and searches;
     • Facial and as‑applied constitutional attacks on local laws; and
     • Federal preemption defenses.
3. Channeling of Local Law 10 Challenges:
   • Landlords wishing to contest Local Law 10, especially in the context of Section 8 voucher acceptance, must do so through the Commission/OATH process and then in state courts, rather than seeking early declaratory relief in federal court.
4. Preservation of Merits for State Adjudication:
   • The federal courts in this case purposely abstain from deciding:
     • Whether Local Law 10 is an unconstitutional “coercive” condition on participation in Section 8; or
     • Whether federal Section 8 law preempts aspects of New York City’s source‑of‑income discrimination ban.
   • Those questions remain open for determination in state fora, reinforcing the cooperative federalism model rather than displacing it.

In the broader legal context, this decision strengthens a consistent message in Second Circuit jurisprudence post‑Sprint:

• Abstention is narrowly confined to specific categories but remains potent within those categories;
• Where robust state mechanisms exist to vindicate federal rights, federal courts will not lightly intrude upon ongoing state enforcement actions, even in civil rights and constitutional contexts; and
• Labeling a challenge as “facial” or “preemptive” does not suffice to bypass a well‑functioning state adjudicatory system.

For practitioners, policymakers, and landlords, 216 East 29th Street Trust underscores that the front lines for contesting the interplay between federal housing programs and local anti-discrimination regimes in New York City will, as a practical matter, be the Commission, OATH, and the New York state courts—not federal district court.