The Seventh Circuit Court of Appeals has upheld the dismissal of a Fair Housing Act (FHA) lawsuit brought by a Palestinian American tenant, Manal Farhan, who was evicted after refusing to remove a Palestinian flag from her apartment window. The appellate court ruled that Farhan’s complaint, focusing on the landlord’s enforcement of a “neutrality” policy regarding the Israel-Palestine conflict, failed to plausibly allege intentional discrimination based on national origin.
The decision hinges on the specific legal arguments Farhan pursued in the lower court and on appeal, which the majority found insufficient to meet the required pleading standards for intentional discrimination or disparate impact under the FHA.
The Core Dispute: Neutrality vs. Discrimination
Manal Farhan, a first-generation Palestinian American, displayed a handmade Palestinian flag outside her apartment window in solidarity with the Palestinian people starting in October 2023. The building owner and operator, NMA LLC and M. Fishman & Company, instructed her to remove it, citing a building policy requiring tenants to remain “neutral” amid the ongoing conflict in Gaza.
When Farhan explained she was Palestinian and displaying the flag out of “love and pride in her heritage,” the property manager reportedly deemed this unacceptable and warned of eviction if she did not comply. Nine days later, Farhan received a notice to terminate her tenancy, ostensibly for violating the lease regarding how the flag was displayed. Farhan claimed this was pretextual, as she had been told the flag itself was the issue, regardless of its exact placement.
Farhan sued under the FHA and several state laws, alleging discrimination based on national origin. The district court dismissed the federal claims, concluding Farhan had not plausibly alleged discrimination based on her national origin rather than her political expression.
The Majority’s Rationale: Focus on Intent and Legal Theory
The Seventh Circuit majority affirmed the dismissal, emphasizing that the ruling was based “on narrow grounds,” specifically the arguments Farhan chose to present.
The court addressed Farhan’s claim of disparate treatment (intentional discrimination). To succeed, the plaintiff must show the adverse action occurred *because of* her protected status (national origin). The majority noted that Farhan’s complaint lacked facts suggesting the “neutrality” policy was motivated by discriminatory intent against Palestinians. While Farhan argued that the policy targeted expression related to the Israel-Palestine conflict, the court found she did not allege that the policy was applied unevenly—for instance, by allowing non-Palestinian tenants to fly Israeli flags or other politically charged symbols without consequence.
Crucially, the court stated that Farhan’s assertion that she was punished for her political expression supporting the Palestinian cause does not automatically transform into national origin discrimination unless there is evidence that the enforcement was *because of* her identity, not just *in spite of* it. Furthermore, the court pointed out that Farhan only mentioned her Palestinian heritage *after* being told to remove the flag, making it difficult to infer the landlords knew her national origin prior to enforcing the policy.
The court also rejected the disparate impact claim. This theory requires showing a policy, though facially neutral, has a disproportionate negative effect on a protected class. The Supreme Court, in *Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc.*, cautioned that such claims must allege a causal connection between the policy and the impact, often requiring statistical evidence or comparisons.
The majority found Farhan’s disparate impact argument lacking because she failed to plead facts showing how many Palestinian tenants were affected compared to non-Palestinians. Her assertion that the policy “negatively impacts Palestinians” was deemed insufficient without comparative data showing a disproportionate effect.
Finally, the claim of interference under Section 3617 of the FHA also failed because it requires showing a “pattern of harassment” motivated by discriminatory intent, which a single enforcement action does not meet.
The appellate panel stressed that while Farhan’s allegations *might* state a claim if presented differently—perhaps arguing she was evicted *because* she was Palestinian after the initial warning—she instead maintained a theory based on viewpoint discrimination against her political expression, a theory the FHA does not cover.
The Dissent: Pleading Standards Should Remain Low
Judge Jackson-Akiwumi issued a sharp dissent, arguing that the majority improperly imposed heightened pleading standards derived from summary judgment cases (*Bloch* and *Inclusive Communities*) onto a Rule 12(b)(6) motion to dismiss.
The dissent maintained that Farhan only needed to meet the standard set forth in *Iqbal* and *Swanson*: presenting a plausible story detailing the type of discrimination, who committed it, and when. Farhan alleged discrimination based on national origin (Palestinian), by the landlords, when they evicted her after she refused to stop displaying the flag following the conflict escalation.
The dissent argued that Farhan’s allegation that she was told her expression of “love and pride” in her heritage was “unacceptable” provided a plausible basis to infer discriminatory animus at the pleading stage. Furthermore, the dissent cited Supreme Court precedent suggesting that conduct “closely correlated” with a protected status, like displaying a national flag, can support an inference of animus against that status.
By requiring Farhan to plead specific evidence of unequal application (like showing what other tenants displayed), the dissent argued, the majority was effectively asking for evidence typically required at summary judgment, thereby closing the courtroom door prematurely to plaintiffs with plausible claims.
Ultimately, the majority’s adherence to the arguments Farhan presented below resulted in an affirmation of the district court’s dismissal of the federal claims, with state law claims dismissed without prejudice.