Regional Economic Community v. City of Middletown

Decision Date05 February 2002
Docket NumberDocket No. 00-6318.,Docket No. 00-6354.
Citation281 F.3d 333
PartiesREGIONAL ECONOMIC COMMUNITY ACTION PROGRAM, INC., Plaintiff-Appellant, and UNITED STATES of America, Intervenor-Plaintiff-Appellant, v. CITY OF MIDDLETOWN, City of Middletown Planning Board, and Joseph DeStefano, Defendants-Appellees.
CourtU.S. Court of Appeals — Second Circuit

Leslie A. Lupert, Orans, Elsen & Lupert, LLP (Simeon Goldman, Disability Advocates, Inc., of counsel), New York, NY, for Plaintiff-Appellant.

Jeffrey Oestericher, Assistant United States Attorney for the Southern District of New York (Mary Jo White, United States Attorney, and Neil M. Corwin and Sara L. Shudofsky, Assistant United States Attorneys, of counsel), for Intervenor-Plaintiff-Appellant.

Alex Smith (Robert N. Isseks, of counsel), Middletown, NY, for Defendants-Appellees.

Before: KEARSE, STRAUB and SACK, Circuit Judges.

SACK, Circuit Judge.

The plaintiff, Regional Economic Community Action Program, Inc. ("RECAP"), and the intervenor-plaintiff, the United States of America, brought this action under the Fair Housing Act, 42 U.S.C. § 3601 et seq. ("FHA"), the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq. ("ADA"), and the Rehabilitation Act, 29 U.S.C. § 701 et seq. They alleged that the defendants — the City of Middletown ("Middletown" or "the City"), located in Orange County, New York, the City of Middletown Planning Board ("Planning Board"), and Joseph DeStefano, the mayor of Middletown — discriminated against RECAP on the basis of its clients' disabilities by refusing to grant RECAP a special-use permit authorizing it to establish two halfway houses for recovering alcoholics. The United States District Court for the Southern District of New York (Charles L. Brieant, Judge) granted summary judgment to the defendants on all of the plaintiffs' claims. Because we find sufficient evidence from which a reasonable juror could infer disparate treatment by the City and the Planning Board and retaliation by the City and DeStefano, we vacate the district court's grant of summary judgment as to those claims. But we affirm the court's grant of summary judgment on the disparate impact claim against all three defendants and the discrimination claims against DeStefano.

BACKGROUND
I. The RECAP Project

Because the plaintiffs appeal from the grant of a summary judgment against them, we recite the relevant facts in the light most favorable to them. See Holtz v. Rockefeller & Co., 258 F.3d 62, 69 (2d Cir.2001).

RECAP, a not-for-profit corporation founded in 1965, provides education, housing, social services, and other forms of assistance to low income individuals in Orange County, New York. In 1994, RECAP sought to create a "family support community" in the City by consolidating the operation of several proposed and existing assistance programs on two parcels of land near its existing outpatient clinic for recovering alcoholics. RECAP's plan involved three properties: (1) its existing facility located at 40 Smith Street; (2) a parcel of land directly across the street owned by Gary Formisano (the "Formisano property"); and (3) the lot adjacent and to the north of the Formisano property, owned by Richard Rowley (the "Rowley property").

A railroad track once owned by the Ontario & Western Railroad ("O & W") runs along the eastern borders of both the Rowley and Formisano properties. A rail spur on the Rowley property connects it to the O & W track. RECAP intended to use the Rowley property for "Head Start" classes, daycare for infants, and pediatric medical and dental services. It planned to convert an existing building on the Formisano property into a halfway house for twenty-four men recovering from alcoholism. Finally, RECAP's plan contemplated the construction of a new building located partly on the Rowley property and partly on the Formisano property to house twenty recovering alcoholic mothers and their children. Full-time staff would supervise both halfway houses twenty-four hours a day.

In 1994, Middletown's zoning ordinances applicable to these properties authorized "cumulative zoning," which allows both residential and commercial uses in an industrial zone. The Rowley property was zoned "I-2," or heavy industrial; the Formisano property was zoned "I-1," or light industrial. Both the childcare facility proposed for the Rowley property and the halfway houses proposed for the Formisano and Rowley properties were permitted uses under these zoning ordinances, but each required a special-use permit from the Planning Board. All zones, both residential and industrial, require special-use permits for the construction of multi-family housing units. The purpose of a special-use permit is to allow the Planning Board to determine whether a proposed project will have an unduly adverse effect on the neighborhood. See Pacer, Inc. v. Planning Bd., 217 A.D.2d 47, 50-51, 635 N.Y.S.2d 704, 705-06 (3d Dep't 1995).

Although both properties were part of a single project, RECAP had to apply to the Planning Board separately for a special-use permit for each property. The Planning Board considered RECAP's application regarding the Rowley property, where RECAP planned to establish the childcare center, during two hearings held in August and September 1994. It unanimously approved the special-use permit for that property at the September hearing, subject to negotiation of a specific agreement for the payment of taxes and confirmation that the project would not adversely affect the environment.

The Planning Board first considered RECAP's application for a special-use permit for the Formisano property — the parcel where RECAP intended to establish one halfway house for recovering alcoholics, and part of the home for recovering alcoholic mothers and their children — at the August 1994 hearing. This and subsequent hearings about the Formisano property became, unlike the discussions about the Rowley property, contentious. The Planning Board debated RECAP's application at four hearings held between August 1994 and December 1994. At the final meeting in December, the members of the Planning Board denied RECAP's application by a vote of four to two.

Shortly thereafter, RECAP requested that the Planning Board reconvene to consider providing a reasonable accommodation for RECAP's clients' disabilities and to reconsider its decision to deny RECAP a special-use permit for the halfway houses that it proposed to establish on the Formisano property. The City did not respond to that request until June 1995. By then, RECAP, having lost a prospective grant, could no longer finance the project. Further details with respect to the Planning Board's deliberations on whether to issue the special-use permit for the Formisano property are set forth below in the "Discussion" section of this opinion.

II. Events Leading to RECAP's Retaliation Claim

In the early 1990s, RECAP acquired a building at 208 North Street, also in Middletown, where it planned to create a facility for the homeless. By letter dated June 23, 1993, the City's Office of Community and Economic Development informed RECAP that it would be "pleased to provide [a] commitment of $53,139 for the purchase of furnishings for the [North Street] project...." Antonio Figueroa, now RECAP's Director of Special Projects/Facilities, subsequently spoke several times with Neil Novesky, Director of the Office of Economic and Community Development, updating him on the progress of the project. Novesky told Figueroa that once RECAP notified him that the construction was complete, RECAP could draw down the committed funds.

On December 5, 1994, four days after the Planning Board denied RECAP the Formisano permit, counsel for RECAP wrote to defendant DeStefano alleging that the permit denial violated the FHA and the ADA. He threatened legal action unless the Board rescinded its decision. Three days later, on December 8, RECAP completed construction of the North Street project and requested release of the promised funds. The City responded in a letter the same day by requesting that RECAP submit certain forms required for withdrawal of the funds, and telling RECAP that it would forward these forms.

RECAP never received them. Instead, Figueroa called the assistant as recommended in the letter. She referred him back to Novesky, who in turn told Figueroa that he would have to speak to Alex Smith, assistant corporation counsel to the City. Smith then informed Figueroa that the funds the City had promised to RECAP would be in the form of a loan rather than a grant.

On December 20, 1994, Smith telephoned Figueroa to tell him that Mayor DeStefano was worried about RECAP's ability to secure this loan. Smith said, according to Figueroa's affidavit, that "if RECAP had not pursued legal action against the Mayor, he would be much more cooperative" and that "RECAP has to learn not to bite the hand that feeds it." On December 31, RECAP filed a complaint regarding the denial of the Formisano permit with United States Department of Housing and Urban Development ("HUD"). In April 1995, RECAP received a letter from DeStefano raising financial and labor concerns about the North Street project. RECAP responded on April 13 with a letter seeking to allay DeStefano's concerns, but received no reply. RECAP heard nothing further until early 1996, when DeStefano informed RECAP that the City had withdrawn its funding commitment.

III. Proceedings in the District Court

In November 1997, RECAP brought this action alleging that the defendants unlawfully denied RECAP a special-use permit for the Formisano property. RECAP alleged that the defendants acted with a "discriminatory motive to prevent persons with disabilities from obtaining suitable housing in Middletown," Compl. ¶ 68, and intentionally failed "to...

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