UNITED STATES DISTRICT COURT FOR THEEASTERN DISTRICT OF NEW YORK

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x:ASSOCIATION OF COMMUNITY:Civil Action No.ORGANIZATIONS FOR REFORM :09-CV-4888 (NG) NOW, et al.,::Plaintiffs,::(Gershon, J.)vs.:(Bloom, M.J.):UNITED STATES OF AMERICA, et al.,::Defendants.:- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

MOTION AND SUPPORTING MEMORANDUM TO STAY DECLARATORYJUDGMENT AND PERMANENT INJUNCTION PENDING APPEAL OR, IN THEALTERNATIVE, FOR A TEMPORARY ADMINISTRATIVE STAY PENDING THECOURT OF APPEALS’ RESOLUTION OF DEFENDANTS’ MOTION PURSUANT TOFEDERAL RULE OF APPELLATE PROCEDURE 8INTRODUCTION

This Court has enjoined Defendants from enforcing a number of statutes that the Court itself recognized “enjoy a high presumption of legitimacy.” March 10, 2010 Opinion and Order (Dock  No. 50) at 2 (“Opinion”). Neither the Court of Appeals for the Second Circuit, nor the SupremeCourt, has ever held that the withholding of a corporate entity’s opportunity to apply for discretionary government funds is “punitive” within the meaning of the bill of attainder clause. Enforcement of the declaratory judgment and injunction prior to review by the Court of Appeals isat odds with the presumption of constitutionality that attaches to every Act of Congress. Asexplained below, Defendants have a substantial likelihood of success on appeal. Moreover, giventhe harm to the government from enjoining a presumptively valid Act of Congress prior to appellatereview, the specific effects of the injunction on HUD and other agencies, and the likely possibility1

Case 1:09-cv-04888-NG -LB Document 53 Filed 03/17/10 Page 1 of 15

 

that funds will be disbursed to Plaintiffs for which Defendants will be unable to recover, the balanceof hardships weigh in Defendants’ favor.

 STANDARD OF REVIEW

Defendants seek a stay of the permanent injunction pending appeal pursuant to Fed. R. Civ.P. 62(c) which provides that “[w]hen an appeal is taken from an interlocutory or final judgmentgranting, dissolving, or denying an injunction, the court in its discretion may suspend, modify,restore, or grant an injunction during the pendency of the appeal ...” In this Circuit, four factorsmust considered before staying the actions of a lower court including: (1) whether the movant hasdemonstrated a substantial possibility, although less than a likelihood of success, on appeal; (2)whether the movant will suffer irreparable injury absent a stay; (3) whether another party will suffer irreparable injury if a stay is issued; and (4) the public interests that may be affected. See Hirschfeld v. Bd. of Elections, 984 F.2d 35, 39 (2d Cir.1993); see also In re World Trade Center Disaster SiteLitigation, 503 F.3d 167, 170-71 (2d Cir. 2007).In Mohammed v. Reno, 309 F.3d 95 (2d Cir. 2002), the Second Circuit surveyed howdifferent courts have analyzed the likelihood of success necessary for issuing a stay, ultimatelyagreeing with the District of Columbia Circuit’s approach, whereby “[t]he necessary ‘level’ or ‘degree’ of possibility of success will vary according to the court’s assessment of the other [stay]factors.” Id. at 101 (

quoting

 Washington Metro. Area Transit Comm’n v. Holiday Tours, Inc., 559F.2d 841, 843 (D.C. Cir. 1977)). The Court observed: “[t]he probability of success that must bedemonstrated is inversely proportional to the amount of irreparable injury plaintiff will suffer absentthe stay. Simply stated, more of one excuses less of the other.” Mohammed, 309 F.3d at 101 (citingWashington Metro. Area Transit Comm’n, 559 F.2d at 843)).2

Case 1:09-cv-04888-NG -LB Document 53 Filed 03/17/10 Page 2 of 15

 

ARGUMENTA.Defendants Have a Substantial Likelihood of Prevailing on their Appeal

The three-part test articulated by the Supreme Court to determine whether an act of Congressis “punishment” within the meaning of the Bill of Attainder Clause derives from (1) whether thechallenged statute “falls within the meaning of legislative punishment;” (2) whether “viewed in termsof the type and severity of burdens imposed, [the statute] reasonably can be said to further nonpunitive legislative purposes;” and (3) whether the legislative record “evinces a congressionalintent to punish.” Selective Serv. Sys. v. Minn. Public Interest Research Group, 468 U.S. 841, 852(1984); see also Nixon v. Adm’r of Gen. Servs., 433 U.S. 425, 473, 475-76, 478 (1977); Consol.Edison Co. of New York v. Pataki, 292 F.3d 338, 350 (2d Cir. 2002) (“The party challenging thestatute has the burden of establishing that the legislature’s action constituted punishment . . . .”)(citation omitted). When applied here, these principles confirm that the temporary fundingsuspensions at issue are not “punishment,” but instead valid exercises of the Congressional power-of-the-purse to protect the public fisc.First, it is altogether unclear whether the decision not to appropriate discretionary funds toa corporate entity such as ACORN or its affiliates constitutes punishment within the historicalmeaning of the bill of attainder clause. As this Court readily acknowledges, the “idea that thedeprivation of the opportunity to apply for discretionary federal funds is ‘punitive’ within themeaning of the attainder clause at first blush seems implausible.” Opinion at 12. Noting the lack of guidance from either the Supreme Court or Second Circuit, this Court relies upon the reasoning of an unpublished district court decision in another Circuit regarding a state law. Id. See Fla. YouthConservation Corps., Inc. v. Stutler, 2006 WL 1835967, at *2 (N.D. Fla. June 30, 2006). 3

Case 1:09-cv-04888-NG -LB Document 53 Filed 03/17/10 Page 3 of 15