Shepard et al v. Rhea et al
Filing
39
OPINION AND ORDER: The '"Effective Date"' of the settlement shall be five business days after the date of this Order if no party appeals this Order. If a party appeals this Order, the "Effective Date" of the settlement shall be the day after all appeals are finally resolved. This Order shall constitute a judgment for purposes of Rule 58 of the Federal Rules of Civil Procedure. SO ORDERED. (Signed by Magistrate Judge Ronald L. Ellis on 11/07/2014) (ama)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
JONELLE SHEPARD, YVETTE (GARCIA) VELEZ,
AND SHAREMAH LAMOTTE,
on behalf of themselves and all others
similarly situated,
~I
Plaintiffs,
OPINION AND ORDER
- against 12-CV-7220 (RLE)
JOHN B. RHEA, et al.,
Defendants.
RONALD L. ELLIS, United States Magistrate .Judge:
I.
INTRODUCTION
Plaintiffs Jonelle Shepard, Yvette Garcia Velez, and Sharemah Lamotte (collectively
·'The Named Plaintiffs"), participants in the New York City Housing Authority ("NYCHA")
Section 8 Housing Choice Voucher Program ("the Program"), commenced this action on
September 25, 2013, as a putative class action under Federal Rule of Civil Procedure 23, on
behalf of themselves and as representatives of all participants in the Program who have
requested a Section 8 transfer voucher to be issued on an emergency basis and have not yet
received NYCHA's approval to move into a new apartment. (Comp!.
ii~
1, 13.) The Named
Plaintiffs claimed that NYCHA's failure to timely process Section 8 Housing Choice Voucher
Program Participants' requests to transfer apartments violated the Due Process Clause of the
Fourteenth Amendment of the United States Constitution, the United States Housing /\ct of 193 7
("the Housing Act") and its implementing regulations, and NYCI-IJ\'s own policies, and sought
injunctive and declaratory relief. (Comp!.
~iJ
1, 15.) On May 13. 2014. the Parties consented to
conduct all proceedings before the undersigned. (Docket No. 37.)
Before the Court is a request for final approval of the class action settlement.
Having considered the request for final approval of the class action settlement and the
oral argument presented at the April 21, 2014 fairness hearing, and the complete record in this
matter, for the foregoing reasons. and for good cause shown,
NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED:
The Court certifies the following class under Federal Rule of Civil Procedure 23(a) and
(b )(3 ). for settlement purposes (the "'Rule 23 Class Members"):
(I) all participants in the Program ("'Tenants") who request or have requested emergency
transfers due to either an un-remedied life-threatening or designated hazardous housing quality
standard ("HQS") violation or a holdover proceeding in Housing Court based on a landlord's
choice not to renew a lease.
II.
BACKGROUND
At issue in this action were the administrative procedures underlying NYCI Ii\ ·s Section
8 voucher program. These vouchers provide '·tenant-based" rental assistance to low-income
individuals. Section 8 voucher recipients are generally free to change apartments, and landlords
are generally free not to renew their tenancy. When recipients find a new place to live. NYCHA
is required by federal law and its own internal procedures to take steps to transfer the Section 8
assistance from the prior landlord to the new landlord. Prior to the commencement of his
proceeding, NYCHA is alleged to have delayed processing participants' emergency transfer
requests for months at a time, requested irrelevant information from participants seeking
emergency transfer vouchers, and denied requests for transfer vouchers with no notice or
opportunity to challenge the decision. Plaintiffs in this action are individuals who: I) have
requested or will request an emergency transfer voucher because of un-remedied life-threatening
2
violations; or 2) have requested or will request an emergency transfer voucher because of a
holdover proceeding in Housing Court based on a landlord's choice not to renew a kase.
After exchanging document discovery and engaging in extensive negotiations. including
negotiations mediated by the Court. the Parties reached a settlement. (Doc. No. 35 at 5.) The
terms of the settlement include new policies and procedures with respect to emergency transfer
requests to 1) un-remedied life-threatening hazardous HQS violations. or 2) holdover
proceedings in Housing Court based on a landlord·s choice not to renew a lease. The terms also
provide for a monitoring by an independent auditor. Under the terms of the settlement. a tenant
seeking an emergency transfer voucher based on a holdover action shall demonstrate eligibility
for a voucher by providing a notice of petition and petition or a 30-day termination notice. along
with the written transfer request form. A tenant seeking an emergency transfer voucher because
of an I IQS violation will not need to provide any information in addition to the written transfer
request form. NYCHA \Viii not require a tenant to establish that he or she is a tenant in good
standing in any other way as a condition of issuing an emergency transfer voucher. A tenant's
request for an emergency transfer voucher \vill not be denied or delayed for failure to complete
annual re-certification unless that tenant's subsidy has been terminated.
Within three weeks of receipt of a request for an emergency transfer voucher. NY CHA
will issue a \vritten letter either 1) scheduling an appointment for the tenant to receive the
transfer voucher; or 2) denying the tenant's request for an emergency transfer voucher: or 3)
requesting additional information. If NYCHA denies the request. the written denial shall include
the basis for denying the tenant's request. Such denial shall not be a basis
emergency transfer voucher request supported by proper documentation.
l(ff
denial of a new
Ir NYCI IA approves
the request. it will schedule the tenant to attend any briefing required to receive the voucher and
,.,
.)
transfer package within three weeks ofNYCHJ\ 's letter scheduling the briefing. If NYCI IA has
grounds for termination of the subsidy of a tenant seeking an emergency
transfer. it \\ill process
the transfer request unless and until the tenant's subsidy is terminated. If a tenant's written
request Coran emergency transfer voucher lists the name and date of birth of a person other than
those in the currently authorized household composition. and the person passes a criminal
background check. NYCHA will issue a transfer voucher with the person included in the
household composition. If the tenant seeks to remove a person from the household composition
at the time the tenant requests the transfer voucher. NYC I IA will approve the issuance of a
transfer voucher without that person included in the household composition. Once a tenant
identifies a nev, apartment. the tenant must submit a rental package. including required
documentation regarding members in the household. If the tenant fails to provide documentation
regarding a person whom the tenant wishes to be added to the household. the tenant will be
issued a voucher with a payment standard appropriate for the tenant's authorized household size.
NYCllA \Viii inspect the apartment within four weeks of receiving a request for inspection from
the landlord. lJ pon request of the landlord or the tenant to its Customer Contact Center.
NYCHA shall provide the result of the inspection. If the apartment passes inspection. NYCJ!J\
will issue a move-in letter within three weeks of the inspection. NYCI-IA will retain an
independent auditor who will issue a report every three months to counsel for both Parties as to
the degree to which NYCHJ\ complied with the new policies and procedures. The Court will
retain jurisdiction to enforce the settlement for 30-42 months alter approval of the settlement.
This time period is designed to allow the Court to determine not only whether the terms of the
settlement have been adequately implemented, but whether the changes made have been
sustained over time.
4
On January 31, 2014, this Court entered an Order preliminarily certi tying the settlement
class, preliminarily appointing the Legal Aid Society and Latham and Watkins, LLP as class
counsel, scheduling a fairness hearing for March 20, 2014. and authorizing notice of hearing to
be provided to members of the plaintiff class. (Docket No. 28.)
On March 19. 2014. Plaintiffs' counsel informed the Court that they had inadvertently
failed to post the Court-appn)\'ed Notices on their \Vcbsitcs. in Legal Aid Society"s waiting
rooms. and in Ilousing Courts in all tivc boroughs. (Docket No. :10.) The Parties appeared
before the Court on March 20. 2014. and the Court adjourned the fairness hearing to J\pri I 21.
2014 to give the Parties more time to disseminate Notice. On March 21, 2014. the Court entered
an Order preliminarily certifying the settlement class. preliminarily appointing the Legal Aid
Society and Latham and Watkins, LLP as class counsel, scheduling a fairness hearing for April
21. 2014. and authorizing notice or hearing to be provided to members or the plaintiff class.
(Docket No. 32.)
Pursuant to the Court's March 21. 2014 Order. NYCHA posted copies of the Courtapprovcd notice at its Customer Contact Centers and on its website. (Doc. No. 35 at 4.)
Plaintiffs" counsel posted copies of the Court-approved notice on their websites and in the
waiting rooms of the Legal /\id Society"s neighborhood offices. (Id) Jn addition. the notice was
posted in the Housing Courts in all tivc boroughs. (Id) No objections to the settlement \\Crc
received. (Id) The Court-approved notice informed Class Members of their rights under the
settlement. including the right to object to the settlement. No class members objected to the
settlement. (Id.) On April 16, 2014, PlaintilT<> filed a request for final approval of the
settlement. (Id) De Cendan ts took no position with respect to the motion and did not object to
the Plaintiffs· requests for attorneys· fees.
5
The Court held a fairness hearing on April 21. 2014. Defendants did not appear at the
fairness hearing. On Apri I 2 L 2014, Defendants informed the Court that they had faikd to
appear as a result of a calendaring error, amL in any event, ""agreer d] vvith plaintiffs' counsel that
the settlement is reasonable and fair to all members of the class." (Docket No. 36.) There \\ere
no objections at the fairness hearing.
Ill.
DISCUSSION
Plaintiffs meet all or the requirements for class certification under Federal Rule or Civil
Procedure 23(a) and (b)(2). Courts in the Second Circuit have consistently upheld class actions
as .. an appropriate method or ohtaining relief in benefits cases" vvhere the class seeks relief from
unreasonahle delay and/or withholding of government benefits. /v/orel
1'.
Giuliani. 927 F. Supp.
622. 634 (S.D.N.Y. 1995): see. e.g. Bame/11'. Hmren. 794 F.2d 17. 22 (2d Cir. 1986) (certifying
class seeking relief for delays in receipt of disahility henefits): Cortigiuno
1'.
Occam'ic11· Manor
!lomefor Adults. 227 F.R.D. 194, 202-05 (E.D.N.Y. 2005) (certifying class of mentally disabled
individuals seeking relief for defendant's unlawful withholding and/or conditioning the
distribution of disability henefits); Raymond'" Rmrland. 220 F.R.D. 173. 175 (D. Conn. 2004)
(certifying class of disahled individuals entitled to subsistence benefits through Food Stamps.
Medicaid. and other government programs seeking relief from delays in processing benefits and
the denial of'benefits'"): :Var'! Lm1· Ctr.
011
l!omelcssness & Fm·crty 1'..\'n1· York. 224 F.R.D.
314. 317-26 (E.D.N.Y. 2004) (certifying class of homeless children seeking relier from the
systematic failure to receive educational services that they arc entitled to under federal law).
"IT]he use of the class action device on hehalf of recipients of government benefits is a common
and necessary means of challenging unfair statutes. regulations and policies in
an area where the individual claimant is unlikely to bring suit hecause of poverty and the
6
inaccessibility ofjudicial relief as an economic matter. Mutywm·s::,ky
1'.
Hou.1. Auth. of
Hridgcporl, 226 F.R.D. 35 (D. Conn. 2005) (quoting 7 Nev/berg on Class
Actions~
23: I (4th
ed.)).
1. Numcrosity
Plaintiffs satisfy the numerosity requirement of Federal Rule of Civil Procedure 23(a)( I)
because there arc approximately 4.500 Rule 23 Class Members and, thus. joinder is
impracticable. ,\'cc Consol. Rail Co!'p.
1·.
Tmrn of Hyde Pol'k, 47 F.3d 473. 483 (2d Cir. 1995)
(.. !N!umerosity is presumed at a level of 40 members.'·). The Second Circuit has held
that a prospective class of forty members raises a presumption of numerosity. Sec ,\;ful'i.10!
,,1., 126 r.3d at 376: Robidoux. 987 F.2d 931. 936 (2d Cir. 1993) (finding numcrosity satisfied
upon a showing of 22 to 133 affected cases each month): sec also Toure
2007 U.S. Dist. LEXIS 74056. 2007 WL 2872455.
1'.
C'en/. Pal'king .\)·s
* 6 (S.D.N. Y Sept. 28. 2007) (certifying a
class of forty-six members). The Plaintiff class includes many individuals who will become
members of the class over time as they request emergency transfer vouchers. The immeasurable
number of future plaintiffs makes the class so numerous that joinder is impracticable.
2. Commonality
The proposed class also satisfies Federal Rule of Civil Procedure 23(a)(2). the
commonality requirement. The Named Plaintiffs and the Class Members share common issues
of fact and law, including whether Defendants' failure to timely process their requests to transfer
apartments violated the Due Process Clause of the Fourteenth Amendment of the United States
Constitution. the Housing Act and its implementing regulations. and NY CHA 'sown policies.
Sec Mori' is
1·.
Affinity Ilea// h Plan, Inc .. 859 F. Supp. 2d 61 L 615-16 (S.D.N. Y. 2012)
(commonality satisfied where. among other allegations, plaintiffs claimed that defendant had a
7
policy of not paying all class members overtime pay). The Plaintiffs" claims and those of the
putative class members arose out of NYC! IA"s prior policies and procedures regarding the
issuance of emergency transfer vouchers. Though there \Vere \ariations in the individual named
PlaintifTs" particular circumstances surrounding their requests for emergency transfer vouchers.
the injury alleged because or Defendant's delay manifested itself in substantially the same way.
/\s this Court recently stated, .. [w]here the question of law involves 'standardized conduct of the
defendant to the plaintiff, a common nucleus of operative fact is typically presented and the
commonality requirement is usually met. .. , Lei1·is, 2012 U.S. Dist. LEXIS at *25 (quoting
Lahate-D '//lauro '" GC Sen·s. Ud P 'ship .. 168 F.R.D. 451. 456 (E.D.N. Y. 1996) ). Factual
differences among the claims of class members do not preclude a tinding or commonality. See .
.\1arisol A .. 126 F.3d at 377 (holding that while it is true that individual circumstances of class
members may differ. the claim is ·'that their injuries derive from a unitary course of conduct by a
single system""). See also, Daniels v. City of:Ve11· York. 198 F.R.D. 409. 417
(S.D.N.Y. 2001 ).
When the plaintiff class seeks to enjoin a practice or policy. rather than individualized
relief. commonality is assumed. lv'at '! Lm1· Center on Homelessness and Pm·erty. 224 F.R.D. at
324: see. e.g .. Port A 11th. Police Benevolent Assoc., Inc. '" Port Auth. o/Ne\\' York and Neil'
Jersey, 698 F.2d 150, 154 (2d Cir. 1983) (holding that certification had been improperly denied
where plaintiffs challenged a practice or defendants. as opposed to defendants' conduct with
respect to each individual plaintirt): Daniels. 198 i:.R.D. at 418 ( .. [B]ecause the injuries
complained of by the named plaintiffs allegedly resulted from the same unconstitutional practice
or policy ... the commonality requirement is satisfied""): Raymond. 220 F.R.D. at 179 (D. Conn.
2004) (systematic practice or failing to provide reasonable accommodations in a public benefits
8
program was sufficient to establish commonality): Ruy M v. Bd of Educ.. 884 F. Supp. 696. 699
(E.D.N.Y. 1995) c·IBlecause the named plaintiffs ·are challenging apracth:e of [dclcndantsl.
and not [defendants'] conduct \'Yith respect to the individual plaintiffs. they have satisfied Ruic
23(a)'s commonality requirement") (internal citation omitted) (emphasis in the original). The
plaintiff class here sought only declaratory and injunctive relief and the stipulation of settlement
provides for changed policies: thus, compliance with Rule 23(a)(2) is presumed. Plaintiffs
challenged the Housing Authority's systematic practices in evaluating and responding to
emergency transfer requests. notifying participants of the status of such requests. and scheduling
inspections of prospective apartments. The challenged practices presented common legal and
factual questions well suited for certification under Rule 2:1.
3. Typicality
Plaintiffs satisfy Federal Ruic of Civil Procedure 23(a)(3 ), typicality, because the Named
Plaintiffs' claims arose from the same factual and legal circumstances that form the bases of the
Class Members· claims. See :'vforris. 859 F. Supp. 2d at 616: !11 re Drexel IJ11rnha111 ramhert. 960
F.2d 285. 291 (2d Cir. 1982). The named Plaintiffs' claims arose from the same conduct by the
I lousing Authority-unreasonable delay in processing emergency transfer requests and improper
requests for certification of rent payments-also directed at prospective members of the class.
Plaintiffs asserted the delay of their transfer requests violated the I lousing Act federal
regulations. and their due process rights: these claims were premised on the same legal theories
as the claims of the rest of the plaintiff class. Moreover ... , i ]n gcwernment benefit class actions.
the typicality requirement is generally satisfied when the representative plaintiff is subject to the
same statute. regulation or policy as class members."' Matya.\01·.,zky. 226 F.R.D. at 35 (D. Conn.
2005) (citing Newberg~ 23:4). See, Rohidoux. 987 F.2d at 936-37 (.. \\'hen it is alleged that the
9
same unlawful conduct was directed at or affected both the named plaintiff and the class sought
to be represented, the typicality requirement is usually met irrespective of minor variations in the
fact patterns underlying individual claims."). The named Plaintiffs challenged. and were all
subject to. the same policies and practices that were applied to the absent class members.
Plaintiffs also satisfy Federal Rule or Civil Procedure 23(a)( 4) because there is no evidence that
the Named Plaintiffs" and the Class Members' interests are at odds. Id at 616: Johnson'"
Brennan, No. 10cv4712 (CM). 2011WL4357376, at *5 (S.D.N.Y. Sept. 16. 2011).
-t. Adequacy of Representation
Plaintiffs' counsel, the Legal Aid Society and Latham and Watkins. LLP, will adequately
represent the interests of the Class. Fed. R. Civ. P. 23(a)(4). Under Ruic 23(a)(4). two factors
arc necessary to satisfy the adequacy of representation requirement: ( 1) the interests of the
named plaintiffs cannot be antagonistic to the rest of the class. and (2) plaintiffs' counsel is
competent to handle the litigation.'' Jn re Drexel Burnham Lam her/ Group. Inc .. 960 F.2d at 291.
Both requirements \Vere met in this case.
To establish the first prong of Rule 23(a)(4). the Plaintiffs must ·demonstrate that there is
no conflict of interest between the named plaintiffs and other members of the plaintiff class ....
:\'at'! Law Ctr. on Homelessness & Porerty. 224 F.R.D. at 325 (quoting Marisol A .. 126 F.3d at
378).When named plaintiffs seek broad-based relief that would improve the quality orserviees
to class members. the first prong is satisfied. See. Afarisol A .. 126 F.3d at 378. The Plaintiffs in
this action sought broad-based injunctive
relief~
to compel the Housing Authority to issue
transfer vouchers within a reasonable time. They obtained through the stipulation of settlement a
systematic improvement of the Housing Authority"s policies and procedures related to the
issuance or emergency transfer vouchers benefits. The named Plaintiffs bencfitted from these
10
changes to the same extent as the absent and future class members. Thus. named Plaintiffs'
interests are aligned \Vi th the interests of the other class members. rendering them adequate
representatives.
The class satisfies the second prong of Ruic 23(a)( 4) because the collective class
counsel have adequately represent the class. Plaintiffs arc represented by The Legal Aid
Society and Latham & Watkins LLP. The Legal Aid Society "enjoys a wide reputation for
the devotion of its staff and the quality of its service." Blum v. Stenson. 465 U.S. 886, 891
n.3 ( 1983 ). Latham & Watkins LLP is a private law firm vvith substantial resources and
with experience in litigating complex class-action claims. (Doc. No. 38)
B.
Class Action Maintenance
Plaintiffs satisf} the requirements for certification pursuant to Rule 23(b)(2). "In addition
to satist}·ing Ruic 23(a)'s prerequisites, parties seeking class certification must show that the
action is maintainable under Ruic 23(b)( 1), (2). or (3 ) ... Amchcm Prods.
i·.
Windsor. 521 U.S.
591, 614 (U.S. 1997). Rule 23(b)(2) specifically contemplates class certification of actions
seeking injunctive relief. /vfarisol A .. 126 F.3d at 378. Under Rule 23(b)(2). a class action is
appropriate where "the party opposing the class has acted or refused to act on grounds
generally applicable to the class. thereby making appropriate final injunctive relief or
corresponding declaratory relief with respect to the class as a whole". Fed. R. Ci\'. P. 23(b).
Ci\'il-rights actions are particularly appropriate for certification under Rule 23(b)(2).
See Advisory Committee's Notes on Fed. R. Civ. P. 23 ( 1966). ··cases of this nature.
alleging systemic failure of governmental bodies to properly fulfill statutory requirements.
have been held to he appropriate for class certification under Rule 23(b)(2)." Raymond.
220 F.R.D. at 181 (citing Brown, 158 F.R.D. at 269). Class certification "is
11
appropriate ... as the allegations specify conduct by Defendant directed at the class as a
whole, and injunctive rclichvould be appropriate v,ith regard to the class as a vvholc." Id
Indeed. a plaintiff class seeking ··classwide structural relief that would clearly redound to
the benefits of each class member" is the ··paradigmatic Rule 23(b )(2) class action:·
,\farcera '" C'hinlund. 595 F.2d 1231. 1240 (2d Cir. 1979). vacuted on other grounds.
Lomhard '" i\turcera. 442 lJ. S. 915 ( 1979): /vfcCoy v. ft ha ca ! lousing Authority. 5 5 9 F.
Supp. 1351(N.D.N.Y1983).
Class certification is appropriate where. as here, ··the allegations specify conduct by
Defendant directed at the class as a whole. and injunctive relief would be appropriate with
regard to the class as a \vhole."' Raymond. 220 F.R.D. at 81. Specifically. courts in this
Circuit have repeatedly certified class actions brought by low-income individuals against a
public housing authority seeking injunctive relief for policies and practices that violate
tederal law and regulations that operate to deny the class members housing assistance they are
otherwise qualified to receive. See. e.g. Maziarz, 2012 U.S. Dist. LEXIS 24791 (D.
Conn. 2012): Cason v. Rochester Hous. Auth .. 748 F. Supp. 1002. 1009-10 (W.D.N.Y.
1990): .\fc,\'eill v. Se11· fork City !lous. Auth.. 719 F. Supp. 233 (S.D.N.Y. 1989); Bruce v.
( 'hristian. 113 F.R.D. at 554: James v. 1VeH' York C'ity J-lous. Auth .. 622 F. Supp. 1356
(S.D.N. Y. 1985).
Similarly. this action is particularly well-suited for certification as a class action.
The Plaintiffs sought declaratory and injunctive relief to ensure the Housing J\uthority·s
policies and practices complied with federal and regulatory law and with its own administrative
policies. The relief in the Stipulation of Settlement includes ne\v policies for
processing all of the class-members emergency transfer requests. See. Raymond. 220
12
F.R.D. at 181. Therefore. Rule 23(b)(2) treatment is particularly appropriate in this action.
Class adjudication of this case is superior to individual adjudication because it \viii
conserve judicial resources and is more efficient for class members. particularly those who lack
the resources to bring their claims individually. See Reyes
1'.
Altamarea Grp .. LLC No.
l Ocv645L2011 WL 4599822. at *3 (S.D.N. Y. J\ug. 16. 2011 ). The Named Plaintiffs and the
Class Members have limited financial resources with which to prosecute individual actions.
Concentrating the litigation in this Court is desirable because the allegedly wrongful conduct
occurred \vithin its jurisdiction. Employing the class device here will not only achieve
economics of scale for class members. but will also conserve judicial resources and preserve
public confidence in the integrity of the system by avoiding the waste. delay. and repetitive
proceedings and by preventing inconsistent adjudications. See Hanlon v. CJ11:vsler ('mp .. 150
F.3d I 01 L 1023 (9th Cir. 1998) (class action against automobile company for defective latches
superior when individual claims would burden judiciary and when high litigation costs relati\ c
to potential relief\vould disineentivize individual plaintiffs from bringing claims): see also
/vforris. 859 F. Supp. 2d at 617: Damassia v. Duane Reade, Inc .. 250 F.R.D. 152. 161, 164
(S.D.N.Y. 2008).
C.
Approval of Settlement Agreement
Ruic 23(e) requires court approval for a class action settlement to ensure that it is
procedurally and substantively fair. reasonable. and adequate. Fed. R. Civ. P. 23(e). J\
""presumption of fairness. adequacy and reasonableness may attach to a class settlement reached
in arm's-length negotiations between experienced, capable counsel after meaningful discovery:·
Wa!-Jfart S'tores, 396 F.3cl at 116 (quoting Manual for Complex Litigation. Third.
~
30.42
(1995)); see also D Amato. 236 F.3d at 85. ""Absent fraud or collusion. Icourts! should be
13
hesitant to substitute [their] judgment for that
or the parties who negotiated the settlement.··
/17
re lcTC! Career Coils. !folding Corp. Sec. Lirig .. 2007 WL 2230177. ut *4; see also Jn re Top
Tankers, Im:. Sec. Litig .. No. 06cv13761(CM),2008 WL 2944620. at *3 (S.D.N.Y. July 31.
2008): Ingles
1'.
Toro, 438 F. Supp. 2d 203. 211 (S.D.N.Y. 2006). Courts examine procedural and
substantive fairness in light of the .. strong judicial policy favoring settlements .. of class action
suits. Wal-Mart Stores, 396 F.3d at 116; see also Jn re !:TC! Career Coifs. Holding Corp. Sec.
Litig .. No. 05cvl 0240 (CM), 2007 WL 2230177. at *4 (S.D.N. Y. July 27, 2007): Spann '" AOL
Time Warner. Inc .. No. 02cv8238 (DLC). 2005 WL 1330937,
at
*6 (S.D.N.Y. June 7, 2005).
To determine procedural fairness. courts examine the negotiating process leading to the
settlement. iYal-Marl Stores, Inc. r. Visa l/S.A. Inc .. 396 F.3d 96. 116 (2d Cir. 2005):
1'.
f)
'Amato
Deutsche !Jank. 236 F.3d 78. 85 (2d Cir. 2001 ). To determine substantive fairness. courts
determine whether the settlement's terms are fair. adequate. and reasonable according to the
factors set forth in City ofDetroit v. Grinnell Corp .. 495 F.2d 448 (2d Cir. 1974).
1.
Procedural Fairness
The settlement is procedurally fair. reasonable. adequate. and not a product of collusion.
See Fed. R. Civ. P. 23(e): Reyes, 2011 WL 4599822. at *4. The settlement was reached after the
Parties engaged in discovery and conducted extensive arms-length settlement negotiations.
(Doc. No. 35 at 6.) The negotiations were vigorously contested ··at almost every stage of the
process ... (Id) The Parties appeared before the undersigned for three settlement conferences. on
February 24. 2013. April 25. 2013. and May 20. 2013. (Minute Entry, Feb. 24. 2013: Minute
Entry. Apr. 25. 2013: Minute Entry. May 20. 2013.) The Parties· arm·s-length settlement
negotiations involved counsel. and several occurred before the undersigned. raising a
presumption that the settlement achieved meets the requirements of due process. Sec Wal-Mart
14
S'tores, 396 F.3d at 116: In re Penthouse f;,\erntive Club Comp. Utig. No. !Ocvl 145 (KMW).
2013 WL 1828598, at *2 (S.D.N. Y. Apr. 30. 2013)
CA settlement ... reached \vi th the help of
third-party neutrals enjoys a presumption that the settlement achieved meets the requirements of
due process.") (internal quotation marks and citation omitted): Reyes, 2011 WL 4599822. at *4.
In addition, courts encourage early settlement of class actions. when warrantec.L because
early settlement allows class members to recover without unnecessary delay and allmvs the
judicial system to focus resources elsewhere. See Castagna'" Afadi.1011 5:q11are Garden. L.P ..
No. 09cv1021I(LTS)(HP).2011WL2208614. at *6 (S.D.N.Y. June 7. 2011) (commending
Plaintiffs' attorneys for negotiating early settlement): Jn re Jnterpub!ic Sec. Urig., No. 02cv6527
(DLC), 2004 WL 2397190. at *12 (S.D.N.Y. Oct. 26. 2004) (early settlements should be
encouraged vvhen warranted by the circumstances of the case). The parties here acted
responsibly in reaching an early settlement. See I !ernande::, 20 I 2 WL 5862749. at *2: In re
/11terp11blic Sec. Utig., 2004 WL 2397190. at * 12.
2.
Substantive Fairness
To determine if a settlement is substantively fair. courts consider the factors set forth in
City of Detroit v. Grinnell Corp .. 495 F.2d 448 (2d Cir. I 974). The Grinnell factors are: (1) the
complexity. expense and likely duration of the litigation: (2) the reaction of the class: (3) the
stage or the proceedings and the amount of discovery completed: (4) the risks of establishing
liability: (5) the risks of establishing damages; (6) the risks of maintaining the class action
through the trial: (7) the ability of the defendants to withstand a greater judgment; (8) the range
of reasonableness of the settlement fund in light of the best possible recovery: and (9) the range
of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks
of litigation. Id at 463. Because this case does not involv·e a settlement fund. there is no need to
15
examine the last three Grinnell factors. See Ingles
1'.
Toro, 438 F. Supp. 2d 203, 211 (S.D.N.Y.
2006 ); Marison A. v. Giuliani, 185 F.R.D. 152, 162 (S.D.N. Y. 1999) ("'The Court will not
examine the last three [Grinne!IJ criteria as they are applicable only in actions for damages ...
.''). Additionally, for the fifth factor. the court \viii evaluate the risks of establishing remedies,
instead of the risks of establishing damages. Gi11liani, 185 F.R.D. at 162. For the reasons which
follow, the applicable factors set forth in Grinnell \veigh in favor of final approval.
a. Complexity, Expense, and Likely Duration of Litigation
Litigation through trial \Vould be complex, expensive and long. A trial would ha\'e
involved a class-wide examination of NYC! IJ\ 's policies and procedures and a complex set of
factual and legal issues, as well as considerable expense and time. Therc1(1re, the first Grinnell
factor weighs in favor of final approval.
b. Class Reaction to Settlement
The Class's reactions to the settlement has been positive. The Notices posted at the
I lousing Authority's Customer Contact Centers and Legal Aid Society's neighborhood offices as
well as on the Housing Authority's website and the websites of Plaintiffs' counsel included an
explanation of the settlement. (Docket No. 32, Ex. A.) The Rule 23 Notice also informed Rule
23 Class Members of their right to object to the Settlement and explained how to do so. (id)
No Class Member has objected to the Settlement. (Doc. No. 35 at 4.) This favorable response
demonstrates that the class approves of the Settlement and supports final approval. See Willi.Y
1'.
llealth/irsr. inc., No. 07cvl 143 (ENV)(RER), 2011 WL 754862, at *4 (E.D.N.Y. Feb. 18. 2011)
(approving settlement where seven of 2,025 class member submitted timely objections and two
requested exclusion): Khait
1'.
Whirlpool Corp., No. 06cv6381(ALC),2010 WL 2025106. at *5
(E.D.N.Y. Jan. 20, 2010) (the fact that no class members objected and two opted out
16
demonstrated favorable response weighing in favor of final approval); TT/right
1·.
Stern. 553 F.
Supp. 2d 337. 344-45 (S.D.N.Y. 2008) ("'[t]hc fact that the vast majority of class members
neither objected nor opted out is a strong indication" of fairness).
c. Stage of Proceedings and Discovery Completed
The Parties have completed enough discovery to recommend settlement. The pertinent
question is "'vvhcthcr counsel had an adequate appreciation of the merits
or the case bcf(Jrc
negotiating.·· In re Warfctrin Sodium Antitrnst Litig .. 391 F.3d 516. 537 (3d Cir. 2004) (internal
quotation marks omitted). The amount of discovery docs not matter as much as '"the familiarity
of counsel for all parties with the facts of the case .... ·· !feyer
1·.
Snr fork City !!ous. Auth..
80cvl 1%(RWS),05cv5286 (RWS). 2006 WL 1148689. at *3 (S.D.N.Y. Apr. 28. 2006). In this
case. the parties have a detailed understanding of the factual and legal issues involved.
Therefore. the third Grinnell factor \Veighs in favor of final approval.
d. Risks of Continuing Litigation
The fourth. fifth. and sixth factors set forth in Grine!!. the risk of establishing
liability. the risk of establishing remedies, and the risk of maintaining the
class action through trial, collectively relate to the risks and benefits to the plaintiffs of
maintaining this action through trial. See Wal-Jiart Stores, Inc .. 396 F. Jd or J 18 Padro v.
Astrue. No. l lcvl 788 (CBA). 2013 WL 5719076. at *6 (E.D.N.Y. Oct.18. 2013). On
these issues, a court should "'assess the risks of litigation against the certainty of recovery
under the proposed settlement." Jn re Global Crossing Sec. & ER!S',,1 Litig. 225 F.R.D.
436. 459 (S.D.N.Y. 2004). U.S.
1'. Ne1.1·
York. 2014 WL 1028982
(E.D.N.Y. 2014).
The risk of establishing liability and the necessary remedies weighs in favor of final
17
approval. .. Litigation inherently involves risks.·· In re PaineWehher Ud P "ships litig .. 171
F.R.D. 104. 126 (S.D.N. Y. 1997). Indeed, the primary purpose or settlement is to avoid the
uncertainty of a trial on the merits. Jn re Ira T-laupl & Co .• 304 F. Supp. 917. 934 (S.D.N.Y.
1969): see also Velez\'. Majik Cleaning Sen·., Inc .. No. 03cv8698 (SJ\S )(KNF). 2007 WL
7232783. at *6 (S.D.N.Y. June 25. 2007). I lere. Plaintiffs faced numerous risks as to both
liability and remedies. To establish a violation of thc Due Process clause. Plaintiffs had to
establish that NYCHA ·s actions resulted in termination of Plaintiffs· subsidies without prior
notice and without the opportunity for a pre- or post-termination hearing. 13/atch ex rel. ('Im·
i·.
llernandez, 360 F. Supp. 2d 595. 613 (S.D.N.Y. 2005). To establish a violation of the
Supremacy Clause, Plaintiffs had to establish that NYC! IJ\ ·s policies \\ere an obstacle to the
accomplishment and execution of the purposes and objectives of the Housing Act. Wachovia,
:\'.A. v. Burke. 414 F.3d 305, 313-14 (2d Cir. 2005).
Among other violations of the Housing Act
alleged. Plaintiffs had to establish that Defendants unlawfully terminated their subsidies. 24
C.F.R.
~
982.552. Additionally. Plaintiff'> had to establish that Defendants violated NYCI IA
policies, including NYCHA"s alleged policy of processing all emergency requests for transfer
vouchers within six weeks of the request. (Comp!." 94.) The proposed settlement eliminates
these uncertainties while addressing all of the issues Plaintiffs sought to remedy in commencing
this action. (Doc. No. 35.) Even if PlaintifTs successfully established liability. Plaintiffs would
have faced di11iculties demonstrating the necessity of the remedies sought which included
declaratory and injunctive relief. The possibility of achieving additional relief over and above
that afforded by the negotiated relief does not outweigh the benefits or the Settlement. These
factors therefore weigh in favor of final approval.
The risk of obtaining class certification and maintaining it through trial is also present.
18
Contested class certification motions would likely require extensive discovery and briefing.
Defendants might challenge class certification by arguing that individualized questions preclude
class certification. If the Court were to grant class certification, Defendants might seek to file an
appeal under Federal Ruic of Civil Procedure 23(1), the resolution of which would require an
additional round of briefing. Plaintiffs' Settlement eliminates the risk. expense. and delay
inherent in the litigation process. The sixth Grinnell factor weighs in favor of final approval.
D.
Dissemination of Notice
Pursuant to the Preliminary Approval Order, Defendants posted Court-approved Notices
in English and Spanish in the public client \vaiting areas in NYC! IA ·s Customer Contact Centers
and on NYCHA's website, and Plaintiffs posted Court-approwd Notices in English and Spanish
in Legal Aid Society's waiting rooms. on
Plaintifl~s·
counsel's vvcbsitcs. and in the Housing
Courts of each New York City borough. (Doc. No. 35 at 4.) No objections to the settlement
were received.
The Court finds that the Rule 23 Notices fairly and adequately advised Class Members
of the terms of the Settlement, as well as the right of Rule 23 Class Members to object to the
Settlement. and to appear at the fairness hearing conducted on April 21. 2014. The Class
Members were provided with the best notice practicable under the circumstances. The Court
further finds that the Notices and their distribution comported with all constitutional
requirements, including those of due process.
19
III. CONCLUSION
The '"Effective Date"' of the settlement shall be five business days after the date of this
Order if no party appeals this Order. ff a party appeals this Order. the ·'Effective Date·· of the
settlement shall be the day after all appeals arc finally resolved. This Order shall constitute a
judgment for purposes of Rule 58 of the Federal Rules of Civil Procedure.
7;
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