Anderson Grp., LLC v. City of Saratoga Springs

• Citation: 805 F.3d 34
• Decision Date: 19 October 2015
• Docket Number: Nos. 12–3775–cv L,12–4485–cv XAP.,s. 12–3775–cv L
• Parties: The ANDERSON GROUP, LLC and Gail Anderson, Plaintiffs–Appellants–Cross–Appellees, v. CITY OF SARATOGA SPRINGS, Defendant–Appellee–Cross–Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

805 F.3d 34

The ANDERSON GROUP, LLC and Gail Anderson, Plaintiffs–Appellants–Cross–Appellees

v.CITY OF SARATOGA SPRINGS, Defendant–Appellee–Cross–Appellant.^*

Nos. 12–3775–cv L

12–4485–cv XAP.

United States Court of Appeals, Second Circuit.

Argued: Apr. 21, 2014.

Decided: Oct. 19, 2015.

Reed N. Colfax (Jamie L. Crook, Tara K. Ramchandani, on the brief), Relman, Dane & Colfax PLLC, Washington, D.C., for Plaintiffs–Appellants–Cross–Appellees The Anderson Group, LLC and Gail Anderson.

Gregg T. Johnson, Lemire Johnson LLC, Malta, N.Y., for Defendant–Appellee–Cross–Appellant

City of Saratoga Springs.

Before: PARKER and HALL, Circuit Judges, and MATSUMOTO, District Judge.^**

Opinion

HALL, Circuit Judge:

The long-running litigation underlying these appeals stems from the efforts of The Anderson Group, LLC (“TAG”) to develop a high-density residential project called Spring Run Village on a parcel of land owned by Gail Anderson in the City of Saratoga Springs, New York. As envisioned, some 20% of the rental units in Spring Run Village were to be designated “workforce affordable,” meaning that they would be rented at affordable rates to low-to-moderate income households. Before TAG could break ground on the project, the City of Saratoga Springs rezoned the underlying property to preclude the construction of high-density developments. TAG and Gail Anderson filed suit, arguing that the City's zoning policies perpetuated racial segregation and had a disparate impact on African Americans and families with children, thereby violating the Fair Housing Act (“FHA”), 42 U.S.C. § 3604. In July 2010, in the Northern District of New York, a jury returned a verdict in favor of TAG only as to its disparate impact claim. The district court (Sharpe, J. ) granted the City's motion for a new trial, nearly one year later, on the ground that the jury's verdict for TAG on its disparate impact claim was irreconcilable with its verdict against TAG on its perpetuation of segregation claim. The district court further stated that if its decision to order a new trial did not withstand appeal, it would order a conditional remittitur of the jury's $1,000,000 damages award to $81,000 because the evidence of harm to TAG's business reputation and loss of a developer's fee was impermissibly speculative. In 2012, a second jury returned a verdict in favor of the City on both of TAG's claims. TAG and the City both appealed the resulting judgment.

On appeal, TAG primarily attacks the district court's decision to order a new trial, arguing that the City waived any challenge to inconsistencies in the 2010 verdict by failing to raise its objection before the jury was discharged. It also challenges the propriety of the district court's alternative ruling as to remittitur. The City argues on cross-appeal that TAG lacks standing to bring its FHA claims and that the district court erred when it denied its motion to preclude the testimony of TAG's two expert witnesses. For the reasons that follow, we: (1) VACATE the district court's judgments entered on August 10, 2012, August 30, 2012, and January 15, 2013; (2) REVERSE the district court's June 21, 2011 memorandum decision and order to the extent it directed a new trial on TAG's disparate impact and perpetuation of segregation claims; (3) REINSTATE the July 2, 2010 jury verdict to the extent it found the City liable on TAG's disparate impact claim; and (4) REMAND for a new trial solely on the issue of damages unless TAG agrees to accept remittitur of the jury's $1 million damages award to $100,000.

BACKGROUND

I. Saratoga Springs & its Affordable Housing Shortage

Saratoga Springs is a city of approximately 26,000 year-round residents located some forty miles north of Albany, New York. The City relies heavily on seasonal tourism, and much of its history has been “linked to the affluent and powerful” who continue to visit the City to enjoy its renowned horse racing track, performing arts center, and curative baths. J.A. 1542. Despite the seasonal influx of tourists, however, the City's year-round residents have long faced a well-documented shortage of affordable housing. In 2000, for example, over 40% of the City's total households were of low-to-moderate income, meaning that they earned less than 80% of the area's median income. Yet only half of those households resided in affordable housing units.¹ The shortage was especially hard on large low-to-moderate income families, 80% of whom could not find affordable housing. In 1999, 2000, and 2004, the City identified “affordability,” and particularly “the shortage of affordable rental units,” as one of its most urgent housing needs. J.A. 1544, 1548–49, 1615. Saratoga Springs also experienced a concentration of low-to-moderate income residents in certain areas of the City, particularly in the downtown neighborhoods of Westside and Northside, where most of the City's high-density subsidized rental housing opportunities were located.²

Despite its acknowledged affordable housing shortage, the City's land use policies overwhelmingly favored the construction of “upscale single-family detached housing.” J.A. 1330, 1342. Between 1990 and 2004, for instance, 94% of the permits issued for new residential units were for single-family homes that the City acknowledged were prohibitively expensive for use as affordable housing. J.A. 1542–43, 1614. Of the mere 152 new residential units located in multi-family buildings approved by the City during this fourteen-year period, 85% were also prohibitively expensive for use as affordable housing options. Id. In official reports submitted to the City Council and to the United States Department of Housing and Urban Development (“HUD”), the City repeatedly acknowledged that its land use zoning polices were among the factors that presented “hurdles” and “obstacles” to the development of affordable housing. J.A. 1354, 1549. To alleviate this problem, the City's Affordable Housing Task Force recommended in 2003 that the City conduct a “comprehensive review of [its] existing zoning regulations” to allow for “more housing development and greater density where appropriate.” J.A. 1353–54.

II. TAG's Proposed Development Project & the City's Zoning Changes

TAG is a for-profit commercial real estate development company based in Albany, New York; it is owned by Gail Anderson and her three children—Susan Anderson Touhey, Willard Anderson, and Gregory Anderson. In 2002, the company began pursuing plans to develop a 44–acre residential project called Spring Run Village on an undeveloped tract of land owned by Gail Anderson on the outskirts of the City. The proposed development, billed as a “Village within the City,” was to contain 250 to 300 housing units spread between condominiums, townhouse-style apartments, and small buildings with multiple apartments. One of TAG's stated goals in developing Spring Run Village was to help alleviate the City's affordable housing shortage. To that end, at least 20% the rental housing units were to be designated “workforce affordable,” meaning they would be rented at affordable rates only to low-to-moderate income households. Until it began planning Spring Run Village, TAG had never before been involved with any residential or affordable housing development projects.

Gail Anderson's property was located within a City zoning district known as the Southern Weibel Avenue District (the “SWAD”). The SWAD originally was designated as a “high impact area,” which allowed for the development of high-density commercial and residential projects like Spring Run Village. In 2001, however, the City Council adopted a new comprehensive zoning plan that established a “unified set of policies for guiding the physical development of the City of Saratoga Springs.” J.A. 1533. This new plan reflected a “City–in–the–Country” vision that called for a “city with an intensively developed urban core ... with well-defined urban edges and an outlying area comprised of open lands, a landscape or rural character and low density residential development.” Id . The comprehensive plan proposed that the SWAD be redesignated as part of the City's new Conservation Development District, which would limit the permissible density of residential development in the area. Consistent with this plan, the City Council voted in May 2003 to rezone the SWAD as a low-density “rural-residential” area, which permitted no more than one structure per every two acres. A New York state court set aside that decision in May 2004 on the ground that the rezoning did not comply with New York State's Environmental Quality Review Act (“SEQRA”).

Following the New York state court's decision, TAG moved forward with its plans for Spring Run Village, retaining an architect and consulting with an affordable housing expert. In the fall of 2004, Gail Anderson and TAG filed with the City Planning Board a number of applications for special use permits that would allow TAG to construct the development consistent with the SWAD's original zoning. While the Planning Board considered these applications, the City received a favorable environmental report that brought it into compliance with SEQRA and permitted the SWAD rezoning. On February 1, 2005, the day before the Planning Board was scheduled to vote on TAG's special use permit, the City Council again voted to reclassify the SWAD zoning as low-density “rural-residential,” thus precluding development of Spring Run Village. The Planning Board thereafter determined that TAG's special use permit application “had to be considered withdrawn” because the proposal was “no longer consistent with the new zoning.” J.A. 1531.

III. Pretrial Proceedings & 2010 Trial

TAG and Gail Anderson filed this action in October 2005, claiming that the City's February 2005 rezoning and denial of the special use permit violated the Fair Housing Act. Pointing to the City's affordable housing shortage, which was especially hard on large families, and to the clustering of minorities in the...