Housing Works, Inc. v. Turner

179 F.Supp.2d 177

HOUSING WORKS, INC., Bruno Alicia, James Arnold, Paul Alston, Douglas Cho-Hill, Reyes Cruz, Patrick D. Dolby, Dexter C. Duskin, Earl C. Ellis, Yvette Gregory, Barry Harris, Iesha Jackson, Donile Knight, Takeasha Newton, Laverne Patent, Tatia Smith, Velisa Green Summerlin, Jan Thurman, Robert Tolbert, Roberto Valderrama, Plaintiffs, v. Jason TURNER, Human Resources Administration (HRA) Administrator/Department of Social Services Commissioner, Mark Hoover, First Deputy Commissioner of HRA, and the City of New York, Defendants.

Housing Works, Inc., Plaintiff, v. Rudolph Giuliani, Mayor, City of New York; Randy Mastro, Deputy Mayor, City of New York; Fran Reiter, Deputy Mayor, City of New York; Elizabeth Kaswan, Chief Procurement Officer, City of New York; Lou-Ellen Barkan, Chief of Staff to Deputy Mayor Randy Mastro; Lilliam Barrios-Paoli, Human Resources Administration (HRA) Commissioner; Jason Turner, HRA Commissioner; Gregory Caldwell, HRA Deputy Commissioner, Division of Aids Services and Income Support (Dasis); John A. Dereszewski, Dasis Director of Contract Services; Richard Bonamarte, HRA Agency Chief Contracting Officer; Jack McKay, HRA General Counsel; Neal L. Cohen, Department of Health

(DOH) Commissioner; Mitchell Netburn, DOH Agency Chief Contracting Officer; James Capoziello, DOH Acting Agency Chief Contracting Officer; the City of New York; and Jack Hiralall, P.C., Defendants.

Nos. 00 Civ. 1122(VM), 00 Civ. 3561(VM).

United States District Court, S.D. New York.

November 29, 2001.

COPYRIGHT MATERIAL OMITTED

Matthew D. Brinckerhoff, David H. Gans, Emery, Cuti, Brinckerhoff & Abady, P.C., New York City, for Housing Works, Inc., Bruno Alicia, James Arnold, Paul Alston, Douglas Cho-Hill, Reyes Cruz, Patrick D. Dolby, Dexter C. Duskin, Earl C. Ellis, Yvette Gregory, Barry Harris, Iesha Jackson, Donile Knight, Takeasha Newton, Laverne Patent, Tatia Smith, Velisa Green Summerlin, Jan Thurman, Robert Tolbert and Roberto Valderrama.

Bob Bailey, Michael D. Hess, Corp. Counsel of City of NY, New York City, for City of New York, Rudolph Guiliani, Fran Reiter, Lilliam Barrios-Paoli, Jason Turner, Mark Hoover, Gregory Caldwell, John A. Dereszewski, Richard Bonamarte, Neal L. Cohen, Mitchell Netburn and James Capoziello.

Nadine Rivellese, NYC Law Dept., New York City, for Randy Mastro, Elizabeth Kaswan and Lou-Ellen Barkan.

DECISION AND ORDER

MARRERO, District Judge.

TABLE OF CONTENTS
I. STANDARD OF REVIEW .......................................................182
 II. FACTS AND PROCEDURAL HISTORY .............................................183
      A. THE PARTIES ..........................................................183
      B. THE RELATIONSHIP BETWEEN THE PARTIES .................................185
         1. The Scattered Site and Ryan White Enhancement Contracts ...........185
         2. The DOH Intake Contract ...........................................186
         3. Housing Works's History of Financial Mismanagement ................186
      C. HOUSING WORKS'S CONSTITUTIONALLY PROTECTED
          ACTIVITIES ..........................................................187
      D. THE ALLEGATIONS OF RETALIATION .......................................188
         1. The City's Refusal to Renew the Scattered Site and Ryan White
             Contracts ........................................................188
         2. The Refusal to Recognize the DOH Intake Contract ..................189
      E. THE ALLEGATIONS OF CONTINUING RETALIATION ............................190
         1. HRA's New Scattered Site Contract .................................190
         2. Additional Funds under the Ryan White Care Act ....................191
         3. The 9th Street and East New York Residences .......................191
         4. Housing Works's Job Training Program and the New York State
             Welfare-to-Work Initiative .......................................191
         5. Non-Responsibility Findings .......................................192
      F. HOUSING WORKS'S CLAIMS ...............................................192
III. DISCUSSION ...............................................................193
      A. RETALIATION FOR PROTECTED FIRST AMENDMENT
          ACTIVITY ............................................................193
      B. EQUAL PROTECTION .....................................................199
      C. QUALIFIED IMMUNITY, DIRECT PARTICIPATION AND THE
          APPLICABILITY OF THE STATUTE OF LIMITATIONS AS TO
          REITER ..............................................................201
         1. Qualified Immunity ................................................201
         2. Direct Participation ..............................................202
            a. Giuliani .......................................................203

            b. Turner .........................................................203
            c. Netburn ........................................................204
            d. Hoover .........................................................204
         3. Applicability of the Statute of Limitations to the Claims Against
             Reiter ...........................................................205
      D. CLAIMS FOR DAMAGES AGAINST THE CITY ..................................205
         1. Damages Against the City for Violations of the New York State
             Constitution .....................................................205
         2. Punitive Damages against the City and the Individual Defendants ...209
      E. FRAUD AND MISREPRESENTATION ..........................................209
      F. UNJUST ENRICHMENT AND QUANTUM MERUIT .................................213
      G. ACCOUNTANT MALPRACTICE ...............................................214
      H. HOUSING WORKS'S FIFTH AND SIXTH CLAIMS ...............................221
 IV. ORDER ....................................................................221

* * * * * *

Plaintiff Housing Works, Inc., together with nineteen of its client-members (hereinafter collectively referred to as "Housing Works"), is, by its own admission, a vociferous and opinionated community-based, not-for-profit corporation, advocating on behalf of persons living with HIV and AIDS, many of whom are often homeless and drug-dependent. Housing Works initiated these actions against the City of New York (hereinafter the "City") and several high-ranking municipal officials, including the Mayor, pursuant to Title VII of the Civil Rights Act, 42 U.S.C. § 1983 for alleged violations of the First and Fourteenth Amendments to the United States Constitution. Housing Works also brought a number of claims under New York State and City law. Defendants have moved under Rule 12(c) of the Federal Rules of Civil Procedure to dismiss all claims. Because Housing Works has alleged facts sufficient to support its federal and state constitutional claims and because the present controversy raises a legal issue of first impression in this Circuit, the motions are granted in part and denied in part.

I. STANDARD OF REVIEW

When a party, after the filing of an answer, moves for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c) on the grounds of failure to state a claim, the court may employ the same standards applicable to a motion brought pursuant to Rule 12(b)(6). Nat'l Ass'n of Pharmaceutical Manufacturers, Inc. v. Ayerst Laboratories, 850 F.2d 904, 910 n. 2 (2d Cir. 1988); see also Davidson v. Flynn, 32 F.3d 27, 29 (2d Cir.1994).

Therefore, in the context of the present motion, the Court accepts the well-pleaded assertions of fact in the complaint as true and draws all reasonable inferences and resolves doubts in favor of the non-moving party. See Kaluczky v. City of White Plains, 57 F.3d 202, 206 (2d Cir.1995) (citations omitted). The focus of the Court's inquiry is not whether plaintiffs will ultimately prevail, but whether the claimants are entitled to an opportunity to offer evidence in support of their claims. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974), overruled on other grounds, Davis v. Scherer, 468 U.S. 183, 104 S.Ct. 3012, 82 L.Ed.2d 139 (1984). Therefore, a motion to dismiss under either Rules 12(c) or 12(b)(6) for failure to state a claim will be denied "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).

II. FACTS AND PROCEDURAL HISTORY

The present action, spanning a relevant time period of ten years, names as defendants the City and sixteen municipal employees or agents. The long and complex history of the case requires a thorough recitation for purposes of this motion. Accepting, as it must, the well-pleaded allegations in the complaint as true, the Court acknowledges the following factual assertions as set forth in the pleadings.¹

A. THE PARTIES

Housing Works is a leading not-for-profit organization which administers programs dedicated to serving persons living with HIV/AIDS. Its mission is to provide critical housing and support services to its clients. Housing Works claims to be unique among its peers in that it focuses on assisting persons with the most pressing problems, often so severe that other organizations regularly turn them away. Housing Works's clients are often homeless, "desperately ill, often emotionally troubled, chemically dependent, financially crippled, and socially disgraced."²

The organization's mission has a simple philosophical underpinning — supportive housing coupled with critical support services is the best prescription for fostering independent, self-sustaining lifestyles and a return to productive activities among its clients. According to Housing Works, this prescription has achieved notable success. Prior to the events leading...