Housing Works Suit Advances in Fed. Court

Trial warranted in claims of Giuliani administration political retaliation

A federal magistrate ruled on September 15 that Housing Works, a non-profit AIDS service agency, is entitled to a trial in a lawsuit alleging that the Giuliani administration retaliated against it for its advocacy on behalf of people with HIV/AIDS.

Magistrate Mark D. Francis denied the city’s request to throw out the case, finding that Housing Works’ allegations raised sufficient legal claims.

Housing Works relies heavily on city and state funds to operate its services. This lawsuit relates to the city’s refusal in 1997 to renew its contracts to fund various “scatter-site” housing projects, as well as the decision by the commissioner of the Human Resources Administration, Jason Turner, to withdraw support for Housing Works’ attempts to get certain state contracts to provide training services.

Housing Works maintained that various top city officials, especially former Deputy Mayor Fran Reiter, were particularly hostile to the agency and saw to it that city officials made decisions to deny certain contracts.

In addition to Giuliani, other former city officials named in the lawsuit include Deputy Mayor Randy Mastro, Beth Kaswan, the city’s chief contract compliance officer, and former heads of several agencies, including the Division of AIDS Services and Income Support (DASIS), the Human Resources Administration and the Department of Health and Mental Hygiene.

Organizations that speak out on issues of public interest are protected by the First Amendment from governmental retaliation. In addition, an organization cannot be singled out for inferior treatment compared to other similarly situated organizations without violating the “equal protection clause” of the Constitution.

However, under both kinds of constitutional claims, the government may ultimately prevail in the lawsuit if it can present sufficient justifications for its actions.

The case involving Housing Works is complicated because of the organization’s own shortcomings in administering its financial affairs. Early on in the Giuliani administration, Housing Works experienced a cash-flow crisis that led to audits of its books by government inspectors and findings that indicated accounting irregularities that required Housing Works to undertake internal reforms. Housing Works has always maintained that it has been responsive to these issues and had cooperated in uncovering the problems and correcting them.

The city argued that Housing Works had been uncooperative and that its continuing problems justified not renewing contracts.

Francis found that in most cases there were too many disputed factual issues to justify dismissing the case, as the city had sought. In particular, Francis found that Housing Works had provided considerable circumstantial evidence, including specific timing coincidences, suggesting that the contract cancellation decisions may have resulted from city officials’ determination to strike back at Housing Works for its advocacy activities.

Some of Housing Works’ advocacy took the form of lawsuits against the city and top officials, claiming that people with HIV were being deprived of various rights and benefits to which they were entitled. The agency has alleged that at least one city official told them that the city would not renew contracts with an organization that was suing the city, suggesting that the non-renewal may have been inspired by a city “policy,” which would subject the city to liability over and above the liability of any individual officials.

Housing Works also showed that other community-based AIDS service organizations that experienced difficulties in properly managing and accounting for public funds had not been treated the same way, with the main difference being that Housing Works engaged in public criticism of the administration’s policies, including filing lawsuits.

Although Giuliani has disclaimed any personal responsibility for the disputed contract decisions, Francis found that there were sufficient allegations about his awareness of the ongoing disputes and possible influence of the outcomes to require an examination of these claims at a trial.

Significantly, Francis rejected the city’s arguments that various officials should be found immune from suit, or that Housing Works’ punitive damages claim should be dismissed.

Francis’ ruling is the latest in a long string of successful litigation efforts by Housing Works, which has achieved several important rulings against the city and various city officials. Francis’ opinion, which takes the form of a recommendation to U.S. District Judge Lewis Kaplan, sets the stage for a serious engagement by city attorneys with the merits of this case, which could lead to a settlement, in light of Mayor Michael Bloomberg’s policy of attempting to settle as much city litigation as possible where protracted litigation would not be in the interest of the city.

We also publish:

More from Around NYC