Baez v. New York City Housing Authority

Decision Date12 April 2021
Docket Number13cv8916
Citation533 F.Supp.3d 135
Parties Maribel BAEZ, et al., Plaintiffs, v. NEW YORK CITY HOUSING AUTHORITY, Defendant.
CourtU.S. District Court — Southern District of New York

David A. Picon, Jennifer Tarr, Erin Marie Meyer, Dominique Kilmartin, Zachary Willis Chalett, Proskauer Rose LLP, Albert Huang, Mitchell S. Bernard, Nancy Sharman Marks, Natural Resources Defense Council, Inc., Gregory Lee Bass, Henry A. Freedman, Marc Cohan, Petra T. Tasheff, National Center for Law and Economic Justice, Steven M. Edwards, Quinn Emanuel Urquhart & Sullivan, New York, NY, for Plaintiff Maribel Baez.

David A. Picon, Jennifer Tarr, Erin Marie Meyer, Dominique Kilmartin, Zachary Willis Chalett, Proskauer Rose LLP, Albert Huang, Mitchell S. Bernard, Nancy Sharman Marks, Natural Resources Defense Council, Inc., Henry A. Freedman, Marc Cohan, Petra T. Tasheff, National Center for Law and Economic Justice, Steven M. Edwards, Quinn Emanuel Urquhart & Sullivan, New York, NY, for Plaintiffs Felipe Cruz, R.D.

Dominique Kilmartin, Zachary Willis Chalett, Erin Marie Meyer, Proskauer Rose LLP, Albert Huang, Mitchell S. Bernard, Nancy Sharman Marks, Natural Resources Defense Council, Inc., Steven M. Edwards, Quinn Emanuel Urquhart & Sullivan, New York, NY, for Plaintiffs Upper Manhattan Together, Inc., South Bronx Churches Sponsoring Committee, Inc.

Miriam Skolnik, Wendy L. Prince, Herzfeld & Rubin, P.C., New York, NY, for Defendant.


WILLIAM H. PAULEY III, Senior United States District Judge:

This class action concerns mold and excessive moisture in New York City Housing Authority ("NYCHA") apartments. Various residents and community organizations move to enforce the operative consent decree under which NYCHA agreed to eliminate these hazardous conditions. NYCHA opposes the motion. The dispute boils down to the parties’ disagreement over whether housing developments that NYCHA has transferred to private management remain within the scope of units NYCHA agreed to remediate.

For the reasons that follow, this Court concludes that—as a matter of contract interpretation—the answer is no, and Plaintiffsmotion to enforce the consent decree is denied. While literally consistent with the letter of the law, this result is nonetheless inconsistent with the spirit of the remedial relief this Court endorsed (and to which NYCHA agreed). That gives rise to an inescapable problem: a portion of the class this Court certified is no longer covered by the consent decree. This is an urgent issue the parties must address.

I. This Action

On December 17, 2013, a putative class of NYCHA residents who suffer from asthma

filed this action under the Americans with Disabilities Act of 1990, Section 504 of the Rehabilitation Act of 1973, the Fair Housing Amendments Act of 1988, and Article 15 of the New York State Executive Law for NYCHA's alleged failure to remove mold and excessive moisture in their apartments. (See ECF No. 1.) Three days later, the parties submitted a proposed settlement agreement. (ECF No. 11.) On February 5, 2014, the parties resolved Plaintiffsmotion for class certification, (ECF No. 4), and agreed on language defining the proposed class as "[c]urrent and future residents of NYCHA who have asthma that substantially limits a major life activity and who have mold and/or excessive moisture in their NYCHA housing." (ECF Nos. 15, 15-1.) Six days later, this Court adopted the parties’ class definition and certified a class of Plaintiffs. (ECF No. 17.) Following a fairness hearing pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, this Court approved the Stipulation and Order of Settlement (the "Original Consent Decree") and "so-ordered" the Original Consent Decree on April 17, 2014. (See ECF Nos. 21, 22.) In addition to setting forth time parameters for NYCHA to fulfill its mold abatement obligations, the Original Consent Decree included a standard procedure for remediation of mold and excessive moisture. (See ECF No. 22 ¶ 9.)

Almost immediately after entry of the Original Consent Decree, NYCHA fell out of compliance. See Baez v. N.Y.C. Hous. Auth., 2015 WL 9809872, at *2 (S.D.N.Y. Dec. 15, 2015). On April 22, 2015, Plaintiffs moved to enforce the Original Consent Decree, (ECF No. 35), and in December 2015, this Court granted that motion and appointed a Special Master, see Baez, 2015 WL 9809872, at *4. Over the next two years, the parties worked with the Special Master to create, inter alia, the "Mold Busters" program which promulgated new procedures and protocols for remediating mold and excessive moisture and reducing mold reoccurrence rates.

However, in February 2018, NYCHA informed Plaintiffs that it could not fully implement the "Mold Busters" program until 2020—long after the Original Consent Decree's scheduled expiration on April 17, 2018. (See ECF No. 170.) Faced with NYCHA's continuing non-compliance and the prospect that NYCHA would simply wait until the Original Consent Decree expired without taking remedial action, Plaintiffs announced their intent to move for injunctive relief unless NYCHA agreed to an amended consent decree.

On April 6, 2018, the parties filed a proposed amended consent decree for this Court's consideration. (See ECF No. 166.) This Court rejected the proposal and ordered modifications because "the amended consent decree smack[ed] of a slapdash effort to present ... a temporary truce that allow[ed] Plaintiffs to claim a victory in name and NYCHA to maintain a facade of action without any definite obligations apart from the status quo." Baez v. N.Y.C. Hous. Auth., 2018 WL 11304189, at *2 (S.D.N.Y. Apr. 16, 2018). Among other issues, the proposed amended consent decree contained the same unworkable time parameters that NYCHA had already demonstrated it could not meet. As this Court observed at the time, "the consent decree's treatment of these time parameters [was] amorphous and fertile ground for future disputes," which left this Court to "wonder[ ] why, after two years, workable time parameters ha[d] yet to be developed." Baez, 2018 WL 11304189, at *1. The proposal also conferred authority on the Special Master to appoint an independent data analyst, independent mold analyst, and an ombudsperson without further judicial approval. Baez, 2018 WL 11304189, at *1. In response to this Court's concerns, the parties submitted a further amended proposed consent decree on July 24, 2018. (ECF No. 193.)

During an extraordinary hearing on September 26, 2018, this Court heard from scores of NYCHA tenants, elected officials, and representatives of community organizations concerning the fairness of the further amended proposed consent decree. During that hearing, this Court also considered a sweeping proposed consent decree in a parallel action brought by the United States addressing NYCHA's systemic failure to provide any semblance of adequate housing. See generally United States v. N.Y.C. Hous. Auth., 18-cv-5213. Witnesses, "[o]ne after another, ... rendered harrowing accounts of the squalid conditions in their apartments and the indifference of NYCHA management, called for the firing or prosecution of NYCHA officials, and urged greater tenant participation in the negotiation and enforcement of the proposed consent decree." United States v. N.Y.C. Hous. Auth., 347 F. Supp. 3d 182, 187–88 (S.D.N.Y. 2018). Prior to the hearing, this Court also reviewed "more than 700 written comments from the public that ... underscore[d] the concrete and heart-breaking human element of these cases." (Sept. 26, 2018 Hearing Tr., at 5.)

On November 29, 2018, this Court "so ordered" the revised consent decree,1 (ECF No. 220 ("Revised Consent Decree")). See Baez v. N.Y.C. Hous. Auth., 2018 WL 6242224, at *5 (S.D.N.Y. Nov. 29, 2018). In addition to the Revised Consent Decree, the parties submitted a revised standard procedure, (NYCHA Standard Procedure Manual, ECF No. 222 ("Standard Procedure")). The Standard Procedure "establishes responsive measures to [remediate] mold and its root causes in [NYCHA] public housing locations and creates protocols to protect the health of residents and staff when remediating mold and identifying and correcting its root causes." (Standard Procedure, at 1.)

II. Section 8 vs. Section 9 Housing

The United States Department of Housing and Urban Development ("HUD") administers two major low-income housing programs that fund NYCHA: Section 8 and Section 9. (Decl. of Gregory Russ in Opp'n to Mot. to Enforce, ECF No. 305 ("Russ Decl."), ¶ 5.) The Housing Act of 1937, 42 U.S.C. § 1437 et seq., provides Section 9 federal funding for publicly owned and operated housing units. (See Russ Decl. ¶ 6.) The Housing and Community Development Act of 1974, 42 U.S.C. § 5301 et seq., provides Section 8 federal funding in the form of vouchers to low-income families who may subsidize their rent in privately owned and operated housing units. (See Russ Decl. ¶ 7.)

In 2012, HUD launched the Rental Assistance Demonstration program ("RAD") funded by Section 8. (Russ Decl. ¶ 18.) Instead of a voucher system for tenants, RAD disburses funding to public housing authorities to enter into long-term leases with private developers. Under RAD, HUD still subsidizes the tenants’ rent payments and the local housing authority provides a subsidy to the developer. Developers renovate housing authority-owned properties with their own capital, and retain private property management companies to operate the developments. (See Russ Decl. ¶ 18.) To utilize RAD funds, NYCHA launched the Permanent Affordability Commitment Together ("PACT") program in May 2015. (Russ Decl. ¶ 25.) Under the PACT program, NYCHA continues to own its housing portfolio but leases its buildings to private developers, who in turn renovate them and manage day-to-day operations.

III. Transfer to PACT

On May 19, 2015, NYCHA announced its first PACT project. (Russ Decl. ¶ 28.) As part of that project, NYCHA converted its Ocean Bay Apartments in Far Rockaway,...

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