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August 11, 1999


The opinion of the court was delivered by: Sweet, District Judge.


Once again before the Court, this time on remand, is the motion by Pauline Davis, et al (the "Davis Plaintiffs") to enjoin the defendant New York City Housing Authority ("NYCHA" or the "Authority") from implementing the Working Family Preference ("WFP") contained in its proposed changes to its Tenant Selection and Assignment Plan ("TSAP") incorporated by reference in the Consent Decree in this action. In addition, NYCHA has moved to lift the preliminary injunction previously issued. Upon the findings and conclusions set forth below, the motion of the Davis Plaintiffs is granted, and the preliminary injunction is made permanent. The NYCHA's motion is denied.

As will appear in greater detail below, this action from its inception has been hard fought, and the issues have been difficult and complicated. As the Consent Decree approaches its sunset,*fn1 the Davis Plaintiffs seek to employ its provisions to achieve remediation of the conditions which gave rise to the action, while NYCHA contends that the Consent Decree has achieved its purpose. While there clearly are conflicting contentions concerning the proposed changes in the TSAP, the underlying questions during this phase of the litigation concern the continued viability and scope of the Consent Decree. The resolution of those issues overshadow and underlie the specifies of the WFP controversy.

Prior Proceedings

The description of the prior proceedings contained in the opinion of the Court of July 18, 1997 (the "July 18 Opinion") remain relevant but need not be repeated. Prior decisions include Davis v. New York City Housing Authority, 1992 WL 420923 (S.D.N.Y. Dec.31, 1992) (Davis I); Davis v. New York City Housing Authority, 1997 WL 407250 (S.D.N.Y. July 18, 1997) (Davis II); Davis v. New York City Housing Authority, 1997 WL 711360 (S.D.N.Y. Nov.13, 1994) (Davis III); Davis v. New York City Housing Authority, 166 F.3d 432 (2d Cir. 1999) (Davis IV), familiarity with which is assumed. Those facts and prior proceedings relevant to the instant motion are set forth below.

The July 18 Opinion held that while the proposed WFP did not have an "adverse impact" on minority applicants, it would perpetuate past segregation in predominantly white projects and granted the Davis Plaintiffs a preliminary injunction prohibiting the adoption of the proposed WFP. The Court also granted NYCHA leave to apply for a modification of the injunction "upon a showing that the Working Family Preference will be implemented in a manner that will not affect desegregation in projects with a disproportionately high rate of white occupancy." Davis II, 1997 WL 407250 at *18.

The NYCHA filed a notice of appeal and moved for reconsideration. The motion for reconsideration was denied on November 13, 1997 on the grounds that on a motion to reconsider, the NYCHA "may not advance new facts, issues or arguments not previously presented to the court." Davis III, 1997 WL 711360 at *3 (internal quotations and citations omitted). However, the injunction was modified to permit NYCHA to implement the WFP "as proposed in any project where white families do not constitute more than 30 percent of the families at the project."*fn2 Id. at *5. NYCHA filed another notice of appeal.

On January 22, 1999, the Court of Appeals filed its opinion by Chief Judge Morey L. Sear, sitting by designation, vacating the July 18 Opinion, but leaving the preliminary injunction intact, "until the district court has had the opportunity to address these matters on remand." Davis IV, 166 F.3d at 438. In particular, the Second Circuit noted that paragraph 13 of plaintiffs' expert Dr. Cupingood's ("Dr.Cupingood") Second Affidavit,*fn3 and the July 18 Opinion, were deficient because:

  (a) "it is unclear to which proposed change — project
  choice or working family preference, or both —
  plaintiffs' expert attributes the perpetuation of
  segregation." Davis IV, 166 F.3d at 437;
  (b) the time period during which the purported impact
  of the proposed TSAP changes will allegedly occur is
  not specified. See id. at 436;
  (c) there is no discussion of, or data reflecting,
  the so-called "existing trends" allegedly showing
  that additional white families admitted under the WFP
  will concentrate in predominantly white developments.
  (d) the subsidiary facts and methodology underlying
  the ultimate finding are not adequately explained.
  See id.;
  (e) plaintiffs' expert does not identify the precise
  numerical data underlying his opinion. See id. at
  (f) the names of the developments at which the WFP
  will allegedly perpetuate segregation is not
  identified. See id. at 436;
  (g) plaintiffs' expert expressed no opinion as to
  whether the WFP will perpetuate segregation at ten of
  the developments covered by the injunction. See
  id.; and
  (h) the number, fraction, or percentage of additional
  white families who will be admitted to each of the 21
  developments as a result of the WFP is not stated.
  See id.

The remand was filed on February 18, 1999, a pretrial conference was held, and a hearing was held on June 18, 1999. Additional affidavits, memoranda and arguments were received through July 27, 1999, at which time which the matter was deemed fully submitted. Although offered, neither party sought to examine or cross-examine any of the witnesses, expert or otherwise.

The Scope of the Remand

Initially the Court of Appeals stated: "we consider Judge Sweet's findings on the issue of perpetuation of segregation insufficient under Rule 52(a). While not entirely devoid of detail, Judge Sweet failed to adequately explain the subsidiary facts and methodology underlying the ultimate finding." Davis IV, 166 F.3d at 436. In particular, the number of white families projected to be admitted to the projects at issue was found wanting.

The Court of Appeals was also unable to determine whether paragraph 13 of the affidavit of Dr. Cupingood, which was adopted by the district court as a finding, reflected changes discussed were attributable to which proposed change — project choice, the WFP, or both.

The Court of Appeals also had difficulty in determining the source of statistics underlying Dr. Cupingood's ultimate finding that the proposed WFP would perpetuate segregation at certain NYCHA developments. For these reasons, the Court concluded Dr. Cupingood's affidavit was so "vague and conclusory" as to permit the discovery of relevant matters from the record and required remand "for proceedings consistent with this opinion."

Although the Authority did not appeal on the basis of a failure to conduct an evidentiary hearing, the Court pointed out "when a factual issue is disputed, oral testimony is preferable to affidavits."

The Court recognized that NYCHA's position that the effect of the TSAP on segregation was de minimis was advanced after the filing of the notice of appeal and had not been dealt with by the district court, but noted that on remand the proper standard to be applied is "whether the proposed working family preference will significantly perpetuate segregation at the relevant NYCHA developments." Davis IV, 166 F.3d at 438 (emphasis in original).

The Facts

Based upon the hearing, the facts set forth in the affidavits of Dr. Cupingood and Dr. David W. Peterson (N.Y.CHA's expert witness) ("Dr.Peterson") are supported by the data cited and are credible, although certain of the conclusions drawn from these facts remain in contention. The facts as set forth below are found on the basis of the prior proceedings and the affidavits of the parties and the experts. Neither of the parties sought a hearing to challenge the process by which the following facts were established.

A. The Consent Decree

In 1992, NYCHA, the Davis Plaintiffs and the United States entered into a Consent Decree permanently enjoining various racially discriminatory tenant selection and assignment practices at NYCHA's public housing projects. (Consent Decree ¶ 4(a) -(h)). The Consent Decree provided inter alia for: (1) injunctive relief barring future housing discrimination on the basis of race, color or national origin, (Consent Decree ¶ 4); (2) the implementation of a new TSAP which substantially revised NYCHA's tenant selection and assignment systems, and which prohibits further discrimination, (Consent Decree ¶¶ 5-9); (3) remedial relief for 2,190 claimants of NYCHA's past discrimination,*fn4 (Consent Decree ¶¶ 10-39); and (4) significant record keeping and reporting by NYCHA regarding tenant selection and assignment practices. (Consent Decree ¶¶ 43-48).

The Consent Decree also requires NYCHA to "adopt and implement the TSAP . . . to prevent any unlawful discrimination on the basis of race, color, or national origin, in compliance with the Housing Authority's obligations therewith under Title VI, the Fair Housing Act and the implementing regulations and requirements of HUD." (Consent Decree ¶ 5). In adopting and implementing the TSAP with "respect to existing projects and new projects to be opened in the future," NYCHA agreed that it would use "no racial quota system, or other practice technique or device to house Applicants in particular projects, buildings, or apartments, or to otherwise limit the availability of housing, on account of race, color, or national origin." (Consent Decree ¶ 7(a)).*fn5

Under the Consent Decree, NYCHA's TSAP must remain in effect for at least five years (Consent Decree ¶ 6(a)) and during that time, the Plaintiffs may not challenge actions by NYCHA that comply with the TSAP as racially discriminatory. Id. However, the Consent Decree permits challenges to any amendments to the TSAP adopted or proposed by NYCHA during the five year period (¶ 6(b)).

B. The Working Family Preference

In July 1995, NYCHA proposed to change the TSAP by adopting the WFP. The essential difference between the original TSAP and the WFP is the WFP's elimination of the "applicant's need for housing" as a priority. Instead, the WFP gives preference to families based on income. Thus, under the original TSAP, priority was afforded to families who needed housing the most. Under the WFP, in contrast, priority is afforded to families who can pay the most, regardless of their housing need.

In Davis II, this Court described the operation of the WFP as follows:

  NYCHA would establish new local priorities as part of
  the applicant selection process. The highest local
  priority would be assigned to the highest income,
  Tier III applicants. The second priority is given to
  Tier II families. The lowest priority is given to
  Tier I families, but only to those who are working or
  are disabled. Tier I families receiving public
  assistance would receive no local priority. In
  addition, the proposed TSAP would categorize federal
  preference holders as working (including the
  disabled) or "non-working." The federal preference
  holders who are working or disabled would receive a
  priority over those who are not. NYCHA also proposes
  to increase to 50% the proportion of new rentals to
  local preference holders and to reduce the proportion
  of rentals to federal preference holders to 50%

Davis II, 1997 WL 407250, at *4.

As set forth in Davis II, 1997 WL 407250 at *14, local preferences favoring working families are permitted, see 24 C.F.R. § 960.205(a) (1995), and such preferences do not require approval by the Department of Housing and Urban Development ("HUD"). The Davis Plaintiffs concede the proposed objectives of the WFP, namely, income integration in public housing and increasing the number of working families in public housing, are legitimate, but contend that the NYCHA has not sustained its burden of demonstrating that there is no less discriminatory means of advancing the same interests. Plaintiffs proposed an alternative method of increasing the representation of upper income families that would have a less racially discriminatory effect than the proposed WFP, a method which NYCHA has rejected.

C. The Effect of the Working Family Preference

According to NYCHA's computer tapes, 5,885 families moved into NYCHA apartments during 1995. The racial breakdown of those families, along with the racial breakdown that would have occurred if the WFP had been in effect during that year, are summarized in the following table:

Table 1

Race Distribution of 1995 Rentals Under Original TSAP and WFP

                       African-American  Puerto   Other
                White                    Rican   Hispanic  Other  Total
  TSAP           250         2703         1768      860     340    5885
  WFP            580         2594         1339      835     537    5885
  Difference     330         -109         -429      -25     233       0

For future projections, Dr. Cupingood assumed that families of each race will make decisions about which projects to choose in the same manner, and with the same probabilities, as families of that race have done in the past.

NYCHA records move-outs and move-ins by race for each project in a report entitled, "Tenant Statistics by Race." NYCHA's expert, Dr. Peterson, annexed such reports as Exhibit E to his January 7, 1999 affidavit. Dr. Cupingood relied on these reports in his original affidavit and in this report in calculating expected move-out and move-in rates.

To calculate the probable number of white move-outs at each Disproportionate Project, Dr. Cupingood began by selecting a period for historical reference. Since Davis claimants began moving into Affected Developments in August 1995, the last year that is free of distortion by Davis move-ins is 1994. Additionally, since the bulk of NYCHA's discriminatory practices ended in 1990, the first year that is free of distortion caused by NYCHA's own discrimination was 1991. Thus, Dr. Cupingood selected the years 1991 through 1994 as a period for historical reference.

For each Disproportionate Project, Dr. Cupingood then calculated move-out rates based on NYCHA's Tenant Statistics by Race for the period 1991 through 1994. For example, if the population of a project at the beginning of 1991 was 100, and if 5 families moved out during 1991, then the move-out rate for 1991 at that project was 5 percent (Cupingood Report, ¶ 8). Based on calculations like these for each Disproportionate Project for each year from 1991 to 1994, Dr. Cupingood determined the average move-out rate for each project. As a further refinement, Dr. Cupingood also calculated race-specific move-out rates for each Disproportionate Project (Id.). He then determined the probable number of white move-outs at each project in a given year by applying the appropriate turnover percentage to the population at the end of the year. (Cupingood Report, ¶ 9).

Using the historical period 1991-1994, Dr. Cupingood determined the total number of move-ins of each race into each project. He then determined the percentage of the total for white and non-whites who moved into each Disproportionate Project.*fn6 For example, there were 1,775 white move-ins during the four year period, 67 of whom moved into New Lane. The relative likelihood of a white family ...

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