Yonkers Branch-Nat'l Ass'n Adv. v. Yonkers City

Page 31

251 F.3d 31 (2nd Cir. 2001)

YONKERS BRANCH-NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF COLORED PEOPLE, ET AL., PLAINTIFFS-INTERVENORS-APPELLEES, v. CITY OF YONKERS, YONKERS BOARD OF EDUCATION, DEFENDANTS-APPELLEES-CROSS-APPELLANTS, THE STATE OF NEW YORK, ET AL., DEFENDANTS-APPELLANTS-CROSS-APPELLEES.

Docket Nos. 98-6190L, 99-6128CON, 98-6199XAP, 99-6132CON, 99-6074CON, 00-6158CON.

August Term 2000

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

Argued March 21, 2001

Decided May 9, 2001

Consolidated appeal and cross-appeal from several orders of the United States District Court for the Southern District of New York (Leonard B. Sand, District Judge, allocating costs between New York State and the City of Yonkers with respect to a school desegregation remedy.

Affirmed in part and dismissed in part.

Denise A. Hartman, Asst. Solicitor Gen., Albany, N.Y. (Eliot Spitzer, NY State Atty. Gen., Nancy A. Spiegel, Asst. Solicitor Gen., Peter H. Schiff, Albany, N.Y., on the brief), for defendants-appellants-cross-appellees.

Raymond P. Fitzpatrick, Jr., Birmingham, Ala. (R. Scott Clark, Fitzpatrick, Cooper & Clark, on the brief), for defendant-appellee-cross-appellant City of Yonkers.

Stephen Bergstein, Goshen, N.Y. (Michael H. Sussman, Goshen, N.Y., on the brief), for plaintiff-intervenor-appellee Yonkers Branch-NAACP.

Steven J. Routh, John Borkowski, John J. Clasby, Hogan & Hartson, Washington, D.C.; Lawrence W. Thomas, Donoghue, Thomas, Auslander & Drohan, Yonkers, N.Y., submitted a brief for defendant-appellee-cross-appellant Yonkers Board of Education.

Before: Newman, Parker, and Sack, Circuit Judges.

Jon O. Newman, Circuit Judge.

This appeal concerns the proper allocation between New York State and the City of Yonkers ("City") of expenses of complying with court orders for the desegregation of public schools in Yonkers. Also at issue is the proper allocation of revenues received from the federal government and whether certain aspects of the District Court's recent remedial orders exceed the Court's discretion. The State of New York appeals from several orders of the District Court for the Southern District of New York (Leonard B. Sand, District Judge). The City and the Yonkers Board of Education ("YBE") cross-appeal. We affirm in part and dismiss in part.

Background

I. Procedural History

In 1980, the United States commenced this action in the Southern District of New York against the YBE and the City, alleging unconstitutional segregation of the Yonkers schools. The NAACP later intervened as a plaintiff. In 1985, Judge Sand found that the schools were segregated, and that the segregation was the result of intentional segregation. See United States v. Yonkers Board of Education, 624 F. Supp. 1276 (S.D.N.Y. 1985) ("Yonkers I").¹ In 1986, Judge Sand approved the "Educational Improvement Plan" ("EIP I") recommended to him by the judicially-appointed Monitor. See Yonkers II, 635 F. Supp. 1538 (S.D.N.Y. 1986). Yonkers I and Yonkers II were affirmed. See Yonkers III, 837 F.2d 1181 (2d Cir. 1987). EIP I recommended school closings, magnet schools, voluntary busing, and student and staff reassignment. The City and the YBE immediately began implementing this plan.

In 1987, the YBE amended its answer to add the State as a defendant and cross-claimed against the State, alleging the State's complicity in the segregation. After extensive motion practice, the District Court began holding a trial in 1993 in three parts to decide (1) whether vestiges of segregation remained after implementation of EIP I; (2) whether the State was liable for these vestiges; and (3) what remedy, if any, would be appropriate, in addition to EIP I. First, in 1993, the District Court found that desegregation had been achieved with respect to enrollments, but that "vestiges" of segregation remained, and required a remedy. See Yonkers IV, 833 F. Supp. 214 (S.D.N.Y. 1993).² Second, in 1995, the District Court decided that the State knew about segregation and failed to take corrective measures but that this nonfeasance was an insufficient basis for liability; the claims against the State were dismissed. Yonkers (unnumbered), 880 F. Supp. 212 (S.D.N.Y. 1995). We reversed, ruling that the State could be held liable for nonfeasance, but we did not review the propriety of the vestiges finding itself. See Yonkers V, 96 F.3d 600 (2d Cir. 1996). This reversal led to the third part of the inquiry Judge Sand had contemplated in 1993.

In 1997, the District Court held a trial on remedy for the State's liability, with an updated inquiry into the 1993 vestiges finding. Judge Sand found that vestiges of segregation persisted, in the form of low teacher expectations and insufficiently multi-cultural teaching techniques and curriculum. He then approved the Monitor's "EIP II" programs as a remedy for these vestiges. See Yonkers VI, 984 F. Supp. 687, 695-98 (S.D.N.Y. 1997) ("Yonkers VI"). ³ Yonkers VI also approved a 50-50 split between the City and the State for EIP I costs for FY 1997 (ending June 30, 1997), and determined that the State should receive only partial credit against its FY 1997 liability for its magnet school aid to Yonkers. See id. at 695. The State appealed Yonkers VI, seeking review of the vestiges finding, the EIP II remedy, and the denial of full credit to the State for State magnet school aid in FY 1997. During the pendency of that appeal (adjudicated in Yonkers VII), the State did not seek a stay, and EIP II was implemented.

Between the District Court's decision in Yonkers VI and this Court's decision in Yonkers VII, the District Court took five actions, reflected in separate opinions and orders that are among the subjects of the pending appeals now consolidated before this panel. These opinions and orders created a general framework for dividing costs between the City and the State through 2006, assessed the City and the State the costs for EIP I and EIP II for FY 1998 and FY 1999, and disallowed the State's claims for certain credits. The five actions are:

First, a June 15, 1998, opinion and an implementing July 27, 1998, order. Judge Sand captioned this order the "EIP Funding Order," but the parties refer to it (and the opinion on which it is based) as the "Formulaic Funding Order" (or "FFO"), and we will use their terminology. The FFO maintains the 50-50 cost-sharing principle (provisionally implemented for FY 1997 in Yonkers VI) for the nine- year interval from 1997 to 2006. However, in recognition of the City's current financial difficulties, the FFO requires the State to pay higher percentages in the early years and the City to pay higher percentage in the later years, achieving the 50-50 split on a cumulative basis. This opinion and order are appealed in No. 98- 6190 and cross-appealed in No. 98-6199.

Second, a November 25, 1998, order, which approved the Monitor's October 29, 1998, recommendation to deny the State partial credit for a federal magnet school grant for FY 1997. This order and similar rejections of a partial credit for federal magnet school grants for subsequent years are appealed in Nos. 98-6190, 99-6128, 99-6132, and 00-6158.

Third, a February 25, 1999, order, the "EIP II Modification Order," which approved certain modifications to EIP II sought by the YBE, adding certain programs and removing others. This order is appealed in No. 99-6074.

Fourth, an April 5, 1999, order, the "FY 1998 Funding Order," which directed the State to pay $11,632,453⁴ to cover EIP I costs for FY 1998 (EIP II had not yet started). Although Yonkers VI had given the State a partial credit for its annual magnet school aid against its EIP I liability for FY 1997, this order denied the State any credit for State magnet school aid for FY 1998, a practice that has been repeated in subsequent fiscal years. The State also received no credit for any of Yonkers' federal magnet school aid. This order is appealed in No. 99-6128.

Fifth, an April 15, 1999, order, the "FY 1999 Funding Order," which directed the State to pay $69,108,227 as its share of anticipated unpaid EIP costs for FY 1999. Because EIP II was launched in FY 1999, these costs included EIP II costs for the first time, in addition to ongoing EIP I costs. As in FY 1998, the State received no credit for state or federal magnet school aid. This order is appealed in No. 99-6132.

After these opinions and orders were entered, this Court on June 22, 1999, decided Yonkers VII, initially reported at 181 F.3d 301. Notwithstanding the intervening orders dealing mainly with FY 1998 and beyond (which are the principal subjects of the pending appeal), the review in Yonkers VII was limited to issues raised by Yonkers VI, including Judge Sand's vestiges finding, his EIP II remedy, and his apportionment of FY 1997 EIP costs. Yonkers VII held that the finding of vestiges was erroneous and vacated the EIP II remedy. See id. at 309-18. We upheld the decision to apportion EIP I costs evenly between the parties for FY 1997 and to deny full credit for State magnet school aid for FY 1997. See id. at 320. The NAACP petitioned for rehearing, and at this point the State sought for the first time, and obtained on August 5, 1999, a stay of implementation of the EIP II remedy. On rehearing, on November 16, 1999, we vacated our original opinion in Yonkers VII and remanded the case to afford Judge Sand the opportunity to identify specific "vestiges" of segregation that might justify the EIP II remedy. See Yonkers VII, 197 F.3d 41 (amended opinion). We also vacated EIP II, noting that

there has been no adequate showing that [EIP II] is responsive to the only ill that counts for purposes of this litigation: de jure segregation and its after-effects. Measures such as networked computers in classrooms and full-day pre-kindergarten are more properly characterized as general educational enrichments rather than remedies for prior segregation.

Id. at 56. The amended opinion reconfirmed the allocation...