III. Motions to Certify
Standards for Reviewing Request to Certify
In order for Freddie Mac or the City to bring an issue to the Court of Appeals at this time, this Court must certify, pursuant to 28 U.S.C. § 1292(b), that rulings within the May 8 Opinion: (1) involve a controlling question of law (2) as to which there are substantial grounds for difference of opinion, and (3) that an immediate appeal from the order may materially advance the ultimate termination of the litigation. 28 U.S.C. § 1292(b); see also Klinghoffer v. S.N.C. Achille Lauro Ed Altri- Gestione Motonave Achille Lauro In Amministrazione Straordinaria, 921 F.2d 21, 23 (2d Cir. 1990).
The Second Circuit has repeatedly "urged the district courts to exercise great care in making a § 1292(b) certification." Westwood Pharmaceuticals, Inc. v. National Fuel Gas Dist. Corp., 964 F.2d 85, 89 (2d Cir. 1992). Certification is limited to extraordinary cases where appellate review might avoid protracted and expensive litigation. It is not intended as a vehicle to provide early review of difficult rulings in hard cases. Sadowski v. Technical Career Insts., Inc., 1995 U.S. Dist. LEXIS 3184, *7; Abortion Rights Mobilization, Inc. v. Regan, 552 F. Supp. 364, 366 (S.D.N.Y. 1982).
This standard is not met here. While there is no doubt that a ruling on appeal in favor of the City or Freddie Mac would reduce the discovery each would be required to produce, it would not end the litigation as to either of them, nor would it substantially reduce the unresolved issues in this case, as there are numerous claims and other defendants who would be unaffected by a favorable ruling on these issues. As described below, in the motion to sever the individual defendants, the Court would likely be reluctant to sever the non-class defendants at this time since the named plaintiffs' claims involve all of the defendants and overlapping issues of law and fact.
Regardless, however, of the effect that a successful appeal might have, the test for certifying an issue is a three part test. Each prong must be satisfied. Even assuming that the Second Circuit's answer would control the outcome and advance the termination of this litigation, there are not "substantial grounds for difference of opinion" as to this Court's resolution of the mootness question in the case of Freddie Mac or of the right of the plaintiffs to sue the City under the federal statutes.
A. The City's Motion is Denied
There is no reason to certify the question of whether or not the Germans have standing to sue the City in its capacity as a PHA. This is an issue which will be resolved once the factual question is resolved. It cannot be resolved until there is evidence on the question of whether or not the City administered CDGB funds to the Montgomery Avenue building at the time the complaint was filed.
As to the question of whether or not the LPPPA or CDBG gives rise to a cause of action under 42 U.S.C. § 1983, the parties agree that the precise question at issue in this case has not yet been directly addressed by either the Supreme Court or the Second Circuit. Simply because a question of law has not been authoritatively addressed, however, does not make the question grounds for a substantial difference of opinion. Hubbell v. Pass & Seymour, 883 F. supp. 955, 1995 WL 464906 at *2; Chamarac Properties, Inc. v. Pike, 1994 U.S. Dist. LEXIS 10748, 1994 WL 410902, *2 (S.D.N.Y. 1994); American Tel. & Tel. Co. v. North American Industries, Inc., 783 F. Supp. 810, 814 (S.D.N.Y. 1992). Nor, for that matter, does the fact that the parties themselves disagree as to the interpretation of persuasive authority constitute a "difference of opinion" sufficient to warrant certification. See Hubbell v. Pass & Seymour, at *2.
In Chan v. City of New York, 1 F.3d 96, 102-106 (2d Cir.), cert. denied, 126 L. Ed. 2d 423, 114 S. Ct. 472 (1993), a case decided after the Supreme Court decided Suter v. Artist M., 503 U.S. 347, 118 L. Ed. 2d 1, 112 S. Ct. 1360 (1992), the Court of Appeals articulated a test for determining whether or not a federal statute created an enforceable right under § 1983. The Court of Appeals applied the Supreme Court test in Wilder v. Virginia Hospital Ass'n., 496 U.S. 498, 110 L. Ed. 2d 455, 110 S. Ct. 2510 (1990), "or to the extent that it differs) the Suter analysis..." Following the procedures mandated in Chan, the May Opinion found a cause of action against the City as a PHA.
The City does not believe that the Opinion is correct although it describes the question as "a difficult and close one." The City has not shown that there is substantial ground for differences of opinion. In fact there is no opinion other than this one on this exact question of whether a PHA can be sued for violations of the LPPPA by a person living in housing that receives CDBG funds. On the other hand, there is no "substantial ground for difference of opinion" as to the methodology that should be used to determine whether or not a particular statute confers a right to sue pursuant to § 1983. Chan described the standard and this Court applied it.
Finding no substantial ground for a difference of opinion, the use of interlocutory appeal would be inappropriate in this instance and the motion, is therefore denied.
3. Freddie Mac's Motion to Certify is Denied
Freddie Mac has moved to certify two issues to the Court of Appeals: 1) whether the fact that the Goffins' injunctive claims against Freddie Mac were moot prior to the filing of the class certification motion makes them improper class representatives and 2) whether plaintiffs met their burden of establishing the prerequisites of Rule 23 and are entitled to proceed against Freddie Mac in this action.
As discussed above, in the motion to reargue section, the original ruling on mootness does present the sort of controversial ruling that requires interlocutory review. Freddie Mac has not presented substantial grounds for difference of opinion, and for this reason as well as those described above, the motion will be denied.
While the Third Circuit held in Lusardi v. Xerox Corp., 975 F.2d 964 (3rd Cir. 1992)
that the class representative's claim must be live at the time that the motion to certify is filed, the Second Circuit has rendered no such decision and has reaffirmed twice in the last few years and since the Lusardi decision that in class actions the relation back can be to the filing of the complaint.
See Comer v. Cisneros, 37 F.3d 775 (2d Cir. 1994); Robidoux v. Celani, 987 F.2d 931, 938-39 (2d Cir. 1993). Because there is no difference of opinion among controlling cases in this Circuit and, as discussed above, this would only resolve one piece of this litigation, the motion as to this question, is denied.
The motion to certify the class certification is also denied. The Second Circuit has directed district courts to apply Rule 23 according to a liberal rather than a restrictive interpretation, see Korn v. Franchard Corp., 456 F.2d 1206, 1208-09 (2d Cir. 1972); Green v. Wolf Corp., 406 F.2d 291, 298, 301 (2d Cir. 1968), cert. denied, 395 U.S. 977, 23 L. Ed. 2d 766, 89 S. Ct. 2131 (1969), and has explicitly noted its preference for class certification in suits involving public housing because of the fluid composition of the public housing population. See Comer v. Cisneros, 37 F.3d 775, 797 (2d Cir. 1994).
However, despite the liberal interpretation that this Court must give to Rule 23, it may certify this as a class action only after undertaking "rigorous analysis" to assure that the requirements of the Rule are satisfied. General Tel. Co. of Southwest v. Falcon, 457 U.S. 147, 161, 72 L. Ed. 2d 740, 102 S. Ct. 2364 (1982).
The Court conducted a rigorous and lengthy review of the Rule 23 requirements for class certification and held in its May Opinion that certification was proper. It is the role of the District Court to determine what is manageable. Freddie Mac presented no basis for substantial grounds for differences of opinion, except by reciting the same cases it argued supported denial of certification in the first instance. Those cases were considered fully in the May Opinion and did not mandate a different outcome then. For this reason, and those described above, certification of the decision to certify the class would be improper.
Under the Opinion, three classes were certified: one of children less than seven years living in housing owned by Freddie Mac, a second of same living in housing to which the City administers CDBG funds and the third of same to which NYCHA administers Section 8 funds. Each of these three classes has subclasses that were defined by plaintiffs.
IV. The Claims Against the 1710 Defendants will Not Be Severed
The 1710 Defendants have moved the Court to sever the German Plaintiffs' claims against them from the Plaintiffs' claims against the other defendants pursuant to Federal Rule of Civil Procedure 21
Rule 21 permits a court to add or drop parties to an action when doing so would serve the ends of justice and further the prompt and efficient disposition of the litigation.
E.I. Du Pont de Nemours & Co. v. Fine Arts Reproduction Co., 1995 U.S. Dist. LEXIS 7040, *4-5 (S.D.N.Y. May 22, 1995); Levine v. Federal Deposit Ins. Corp., 136 F.R.D. 544, 550 (1991).
The decision whether to sever a party or claim from an action is within the broad discretion of the district court. Id., quoting New York v. Hendrickson Bros., Inc., 840 F.2d 1065 (2d Cir.), cert. denied, 488 U.S. 848, 102 L. Ed. 2d 101, 109 S. Ct. 128 (1988); 7 Wright, Miller & Kane, Federal Practice and Procedure: Civil 2d § 1689 (1988). In deciding whether severance is appropriate, courts generally consider (1) whether the issues sought to be tried separately are significantly different from one another, (2) whether the separable issues require the testimony of different witnesses and different documentary proof, (3) whether the party opposing the severance will be prejudiced if it is granted and (4) whether the party requesting the severance will be prejudiced if it is not granted. See Hal Leonard Publ. Corp. v. Future Generations, Inc., 1994 U.S. Dist. LEXIS 5195, *4-5 (S.D.N.Y. April 22, 1994), citing cases.
At this point, severing the Plaintiffs' claims against the 1710 Defendants would neither serve the interests of justice nor further the prompt and efficient resolution of this litigation. There are numerous questions of law and fact common to the German Plaintiffs' claims against the 1710 Defendants and against the other defendants. For example, at any trial in this matter the German Plaintiffs will be required to prove, inter alia, that their apartment was painted with a paint having a lead content greater than the maximum allowable under § 27-2013(h), that the children who ingested the paint were under the age of seven, that the injuries suffered by the German children were caused by their ingestion of the lead paint, that the Germans were not warned of the presence of the lead paint, at what level of lead is there harm, and other elements of the state law claims.
Proof of many of these points as they pertain to the 1710 Defendants likely will in significant part require the testimony of the same witnesses and presentation of the same evidence as will be required in proving them against the other defendants. To require the German Plaintiffs to prove these points at separate trials, one against the 1710 Defendants, and another against the City, Freddie Mac, Caisi and Tebec as prior owners and managers of the same building, would be repetitious, prolong the ultimate termination of this litigation, and place an unnecessary burden on the German Plaintiffs. In addition, severance of the claims against the 1710 Defendants would pose a significant danger of inconsistent judgments in the separate actions.
Balanced against these concerns, the danger that the 1710 Defendants will be prejudiced by having the German Plaintiffs' claims against them litigated in the same action as the claims against the other defendants is relatively insubstantial. Moreover, whatever minimal degree of prejudice might inhere in a joint trial can be eliminated by careful instructions to the jury.
For the foregoing reasons, the 1710 Defendants' motion for severance will be denied.
For the reasons stated above, Defendants' motions are denied, Plaintiffs' motion to reargue is granted and the motion to intervene is granted.
It is so ordered.
New York, N. Y.
August 21, 1995
ROBERT W. SWEET