Opinion
15-cv-05236 (LTS) (KHP)
03-29-2018
JANELL WINFIELD, TRACEY STEWART, and SHAUNA NOEL, Plaintiffs, v. CITY OF NEW YORK, Defendant.
OPINION AND ORDER KATHARINE H. PARKER, UNITED STATES MAGISTRATE JUDGE
In this longstanding case, filed on July 7, 2015, Plaintiffs challenge a New York City policy regarding affordable housing lotteries. The City's policy, referred to herein as the "Community Preference Policy," allocates 50% of units in affordable housing lotteries to individuals who already reside in the Community District where the new affordable housing units are located. Plaintiffs allege that the Community Preference Policy violates the federal Fair Housing Act ("FHA"), 42 U.S.C. § 3604 et seq., and the New York City Human Rights Law ("NYCHRL"), NYC Admin. Code § 8-107, et seq., because it perpetuates racial segregation and disparately impacts racial minorities. They also claim that the City's decision to establish, expand, and maintain the policy constitutes intentional discrimination.
After phasing discovery and resolving numerous discovery disputes, this Court set July 31, 2018 for the close of fact discovery and August 31, 2018 for service of expert reports. Expert discovery will be completed in January 2019, after which the parties will file dispositive motions and/or proceed to trial.
Plaintiffs have moved for supplementation of certain data that they seek to use in expert analyses. (Doc. No. 279.) Defendant objects to the supplementation on the ground that the additional discovery is not proportional to the needs of the case, unduly burdensome, and will likely require another extension of the discovery schedule. For the reasons discussed below, Plaintiffs' motion is DENIED.
BACKGROUND
The facts pertaining to the underlying action have been set forth in the Court's prior decisions. See Winfield v. City of New York, No. 15-cv-5236 (LTS) (DCF), 2016 WL 6208564, at *1-3 (S.D.N.Y. Oct. 24, 2016); Winfield v. City of New York, No. 15-cv-5236 (LTS) (KHP), 2017 WL 5664852, at *1-6 (S.D.N.Y. Nov. 27, 2017); see also Winfield v. City of New York, No. 15-cv-5236 (LTS) (KHP), 2017 WL 2880556, at *1-2 (S.D.N.Y. July 5, 2017), objections overruled by 2017 WL 5054727, at *1-2 (S.D.N.Y. Nov. 2, 2017). Only the facts relevant to this motion are set forth below. I. Affordable Housing In New York City
New York City has a housing emergency - there is an overall shortage of housing, particularly for low- and moderate-income residents. (See Doc. No. 297 ("Murphy Decl.") ¶ 3.) In light of this crisis, the City has pursued an ambitious housing program to build and preserve 300,000 affordable housing units by 2026. (Id.)
The City's Department of Housing Preservation and Development ("HPD") and the New York City Housing Development Corporation ("HDC") work together to support the City's affordable housing goals and programs. HPD is the largest municipal housing preservation and development agency in the nation. (Id. ¶ 2.) "The agency's mission is to promote the construction and preservation of affordable, high quality housing for low- and moderate-income families in thriving and diverse neighborhoods in every borough by enforcing housing quality standards, financing affordable housing development and preservation, and ensuring sound management of the City's affordable housing stock." (Id.) "HPD works together with a variety of public and private partners to achieve the City's affordable housing goals of supporting New Yorkers with a range of incomes, from the very lowest to those in the middle class. HPD accomplishes these goals through a combination of loan programs, tax incentives, disposition of City-owned land, tax credits, and other development incentives." Development Process, NYC Housing Preservation & Development, http://www1.nyc.gov/site/hpd/developers/process.page (last visited March 27, 2018). HDC is a housing finance agency that helps to fund affordable housing projects. HDC: A Brief History, NYC HDC, http://www.nychdc.com/HDC_A_Brief_History (last visited March 27, 2018). It also oversees distribution of affordable units it finances, all awarded through a lottery.
Since 2012, New Yorkers looking for affordable housing apply through a website called "NYC Housing Connect." Once the application period for a particular affordable housing project closes, Housing Connect randomly generates a log number for each applicant for purposes of the lottery administration. Once a log is generated, applicants are considered and interviewed by the developer (or its agent) beginning with the lowest log numbers, and any preference that may be applicable, including the Community Preference Policy. HPD or HDC, as applicable based on the project, ultimately reviews and confirms the eligibility of applicants which the developer has preliminarily determined are eligible to be offered a unit. NYC Housing Connect, https://a806-housingconnect.nyc.gov/nyclottery/lottery.html#home (last visited March 27, 2018).
The Community Preference Policy provides eligible applicants residing in the Community District in which a qualifying affordable housing project is located with priority for up to 50% of the affordable units in the project after set-asides for specified groups, including individuals with disabilities. Only a portion of City-assisted affordable units are subject to the Community Preference Policy. II. Disparate Impact Allegations And Data Produced
Plaintiffs allege that the City's Community Preference Policy disparately impacts African-Americans and Latinos (Doc. No. 16 ("Am. Compl.") ¶¶ 184-86), by "bar[ring] City residents living outside of the community district from competing on an equal basis for all available units." (Am. Compl. ¶ 7.) Plaintiffs further assert that, as a result of the Community Preference Policy, "access to [neighborhoods of opportunity] is effectively prioritized for white residents who already live there and limited for African-American and Latino New Yorkers who do not." (Am. Compl. ¶ 7.) Plaintiffs additionally claim that the Community Preference Policy perpetuates existing racial segregation in majority-minority community districts. (See Am. Compl. ¶ 48.)
Plaintiffs define "neighborhoods of opportunity" as neighborhoods in New York City with "high quality schools, health care access, and employment opportunities; well-maintained parks and other amenities; and relatively low crime rates." (Am. Compl. ¶ 7.)
To prove their disparate impact claim, Plaintiffs must show: "(1) the occurrence of certain outwardly neutral practices, and (2) a significantly adverse or disproportionate impact on persons of a particular type produced by the defendant's facially neutral acts or practices.'" Mhany Mgmt., Inc. v. County of Nassau, 819 F.3d 581, 617 (2d Cir. 2016) (quoting Reg'l Econ. Cmty. Action Program, Inc. v. City of Middletown, 294 F.3d 35, 52-53 (2d Cir. 2002)). Plaintiffs must present a statistical analysis to meet the second prong of their prima facie case. Further, their expert analysis must link the policy at issue - in this case, the Community Preference Policy - to the disparity shown. "A robust causality requirement ensures that '[r]acial imbalance . . . does not, without more, establish a prima facie case of disparate impact' and thus protects defendants from being held liable for racial disparities they did not create." Tex. Dep't of Hous. & Cmty. Affairs v. Inclusive Cmtys. Project, Inc., 135 S. Ct. 2507, 2523 (2015) (citing Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 653 (1989)).
Similarly, to prove disparate impact based on the perpetuation of segregation, a plaintiff must provide statistical evidence concerning the degree of residential segregation in the area and the likely effect that the disputed policy has on the racial and ethnic demographics of the area. See Metro. Hous. Dev. Corp. v. Vill. of Arlington Heights, 558 F.2d 1283 (7th Cir. 1977); In re Malone, 592 F. Supp. 1135, 1166 (E.D. Mo. 1984).
In order to meet their legal burdens, Plaintiffs sought discovery of various data and documents concerning the housing lotteries where the Community Preference Policy applied so that their expert could analyze it. This Court ordered the City to produce data from two databases: the "Housing Connect" database and the "Access" database. These databases contain information about affordable housing lotteries and their outcomes going back to 2012. This Court also ordered production of certain additional documents concerning the lotteries to ensure that Plaintiffs received complete information.
Over the course of discovery, Plaintiffs requested and were granted supplementation of information about the lotteries, including updated interim logs through July 31, 2017 or final logs for affordable housing projects that had completed lease up by July 31, 2017. This Court set July 31, 2017 as a cut-off for data so that the parties could verify and reconcile data and begin working with their experts with the understanding that expert analysis would take substantial time and that additional fact discovery and data witness depositions would need to be conducted for expert reports to be completed.
In the end, the City produced data and information on approximately 206 affordable housing projects for which the application period had closed. The lottery process and award of units was not complete for all of these projects as of July 31, 2017; but, there are approximately 147 projects where full information is available and well over 5 million applicants for these projects whose applications can be analyzed. According to Plaintiffs' statistical expert, the data provided is a "good representation of ways the lottery process has operated." (Doc. No. 316 ("Beveridge Decl.") ¶ 7.)
On September 14, 2017, based on the completion of data production and reconciliation of data for expert analysis, this Court directed that the parties meet and attempt to come to an agreement on a final data set that would be used by the experts for analysis so that both sides were working with the same data set. (Doc. No. 296 ("Sadok Decl."), Ex. C.) On October 2, 2017, the City produced to Plaintiffs four documents detailing the dataset the City intends to use in its analyses. (Sadok Decl. ¶ 11.) The City has stated that it intends to conduct an analysis on 121 of the projects and believes that this data set is robust and accurate enough for statistical analysis. III. Costs And Burdens Of Discovery Conducted Thus Far
Discovery in this case has been extensive. Emails from over 50 custodians were collected and reviewed and well over 40,000 documents produced. There have been multiple depositions conducted. Motion practice over discovery issues has been extensive. The cost of discovery has been substantial on the City - it represents that it has spent nearly $550,000 on discovery.
These costs do not include the burden on the staff of HPD and impact on the public of producing data. In connection with production and reconciliation of the data and information on the lotteries, three staff members of HPD's Division of Research & Evaluation (which currently has only twelve team members) and one member of HPD's Marketing Department spent approximately 27.5 hours per week from April through August, 2017 verifying and reconciling the data that would be produced for expert analysis. (Murphy Decl. ¶ 23.) This was time in which they were unable to work on the many other projects that the Division of Research & Evaluation is responsible for completing. (Id.) For instance, in order to undertake the data organization and reconciliation necessary for the discovery in this case, the Division of Research & Evaluation had to reprioritize and often postpone work on fair housing initiatives, including data analysis in preparation for community engagement required under new fair housing rules; a survey of Superstorm Sandy affected households to determine income status; development of a compliance report on tax benefits and rent stabilization; findings related to outcomes of the rezoning of the East New York neighborhood; and cost analysis for the J-51 tax abatement and exemption and its relation to energy efficiency upgrades, which is a tax benefit related to rent stabilized housing efforts. (Id. ¶ 24.) Members of the Marketing Department also spent significant time collecting information on the lotteries. It took staff from that area an estimated 400 hours to collect logs and status sheets. (Id. ¶ 12.)
DISCUSSION
Discovery is "probably the single greatest source of cost and delay in civil litigation." William W. Schwarzer & Alan Hirsch, The Elements of Case Management: A Pocket Guide for Judges 10 (Federal Judicial Center, 2d ed. 2006). This has certainly been true in this litigation, which has more than 300 docket entries, the majority of which concern hotly contested discovery. This Court has presided over numerous case management conferences and issued multiple decisions regarding discovery. Discovery also has been extensive, as noted above - with both sides committing significant resources to the case. Consequently, fact discovery, which initially was scheduled to end on January 2, 2018, had to be extended seven months to July 31, 2018. It is now time for discovery to come to an end.
Rule 1 of the Federal Rules of Civil Procedure requires the Court and the parties to construe, administer, and employ the rules to secure the just, speedy, and inexpensive determination of every action and proceeding. This Court takes Rule 1's dictate seriously. This case, filed in 2015, is not scheduled to end until 2019. While speed is relative, four years is a significant amount of time for a case to be pending. Likewise, this Court estimates that costs of discovery (more than $500,000 for the City) plus attorney time on this case exceed $1 million. Although $1 million is not a surprising amount to spend on a complex litigation, it can hardly be deemed "inexpensive." Last, but certainly not least, the procedural rules must be employed to ensure just determination of a case. As discussed below, sufficient data has been produced to present reasoned analyses of it to the Court for just resolution.
Rule 26(b)(1) restricts discovery to the extent it is disproportionate to the needs of the case, taking into account the "importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit." Rule 26(b)(2)(C)(iii) allows the Court to "limit or modify the extent of otherwise allowable discovery if the burdens outweigh the likely benefit." Manual for Complex Litigation, Fourth 79 (Hon. Stanley Marcus et al. eds., Federal Judicial Center 2004); Fed. R. Civ. P. 26(b)(2)(C)(iii); see also Fed. R. Civ. P. 26(c)(1).
Amendments to Rule 26 were "intended to encourage judges to be more aggressive in identifying and discouraging discovery overuse." Fed. R. Civ. P. 26 advisory committee's note to 2015 Amendment. Even relevant discovery should be limited if it is disproportionate to the needs of the case. Id. "The court's responsibility, using all the information provided by the parties, is to consider these and all the other factors in reaching a case-specific determination of the appropriate scope of discovery." Id.
Plaintiffs seek additional data and information concerning the lottery for a number of reasons, including: (1) they want to "maximize" the data for "optimal analysis" because it is "sound practice;" (2) they speculate that the additional information "may" provide information to perform additional analysis regarding rates of ineligibility for housing; (3) they necessarily will need to discard some of the data already produced and thus seek "additional margin or reserve" data; and (4) they are concerned the City may argue that Plaintiffs do not have a sufficient universe of data to permit their conclusions to be valid. (Beveridge Decl. ¶¶ 10, 12- 14, 18-22.) These reasons are insufficient to justify the additional, supplemental discovery Plaintiffs seek.
There is no question that the lottery-related data that Plaintiffs seek is relevant to the case. Indeed, that is the reason this Court required the parties to focus on data production early in this action. Analysis of the data is a critical component of the disparate impact case. Additionally, there is no question that this case involves important issues and that Plaintiffs have no access to the data from any source but the City. But discovery cannot continue ad infinitum. There comes a point in time when better is the enemy of the good. At this juncture, when discovery is nearing an end, the Court must balance whether the likely benefit of production of the additional data outweighs the burden associated with its production and further delay of discovery.
For readers who are interested in the origin of this phrase, Voltaire used "better is the enemy of the good" in his 1770 article "Art Dramatique," which appeared in the Dictionnaire philosophique. Concise Oxford Dictionary of Quotations 389 (Susan Ratcliffe ed., Oxford University Press 6th ed. 2011). The English usage of the phrase has been traced back to Shakespeare. In King Lear, the Duke of Albany warns that "striving to better, oft we mar what's well." Robert Allen, Allen's Dictionary of English Phrases 242-43 (Penguin Books 2008). It is apt for the balancing analysis required by Rules 1 and 26. --------
Many lotteries have occurred during the pendency of this case, and more will continue to occur this year and each year thereafter. If the Community Preference Policy does have a disparate impact or perpetuate segregation, as Plaintiffs contend, it must be addressed as soon as possible. And, while Plaintiffs contend that their request for supplemental data will not delay discovery or will delay it only slightly, this Court is not so convinced. The City has provided sworn declarations from individuals who assisted previously and would be assisting with production of the supplemental discovery. They state that an extension of the data cut-off date will result in more than 600 additional hours of work by HPD (Murphy Decl. ¶ 29) over a five month period, as well as additional costs of at least $8,000. (Sadok Decl. ¶ 14-15.) The City also states that if the new data production were to go forward, its staff would yet again be pulled away from several important and time sensitive projects that have already been postponed by the previously completed verification and reconciliation process. (Murphy Decl. ¶ 30.) Based on this Court's knowledge of the complexity of the data and analyses that will be conducted, the parties' history in discovery, and the credible declarations submitted by the City detailing the burden and time required to produce the supplemental data, it is clear that granting Plaintiffs' request will indeed further delay the resolution of this case. See Fed. R. Civ. P. 26 advisory committee's note to 2015 Amendment ("A party claiming undue burden or expense ordinarily has far better information . . . with respect to that part of the determination."). At its current pace, this case may not be resolved until the end of 2019. This Court does not believe justice is served by further delays.
Additionally, when evaluating the benefits of the additional data as compared with the burdens on the City associated with production, it is clear that the burdens outweigh the benefits. Plaintiffs do not and cannot claim that they have an insufficient sample of data to evaluate. There are numerous lotteries and millions of applications they can analyze. Even Plaintiffs' expert concedes the data provides a good picture of the lottery process and that the additional data is sought only to "optimize" his analysis. In this Court's experience, data experts always want more data. It is a thirst that cannot be quenched. The City has expended hundreds of hours on data production and reconciliation to get to a point where there is a reliable and large sample to analyze. It has put aside other important public projects to meet Plaintiffs' demands. For example, the City has had to postpone work on fair housing initiatives, including data analysis in preparation for community engagement required under new fair housing rules; a survey of Superstorm Sandy affected households to determine income status; development of a compliance report on tax benefits and rent stabilization; and cost analysis for the J-51 tax abatement and exemption and its relation to energy efficiency upgrades in order to gather, reconcile and produce data requested by Plaintiffs in this case. Thus, it is unduly burdensome not just with respect to the City's resources, but also to the public it serves to require it to continue to prioritize data production in this case over other public-related projects when both sides have sufficient data to analyze and present to the Court.
CONCLUSION
For all of the foregoing reasons, Plaintiffs' motion is DENIED.
SO ORDERED.
Dated: March 29, 2018
New York, New York
/s/_________
KATHARINE H. PARKER
United States Magistrate Judge