The opinion of the court was delivered by: Schiller, J.
Plaintiffs sued the Philadelphia Housing Authority ("PHA") stemming from a catastrophic respiratory incident suffered by Ebony Gage ("Ebony") that Plaintiffs believed was caused by mold in their Section 8 home. On April 20, 2010, this Court issued a memorandum and order granting in part and denying in part PHA's motion for summary judgment. A jury trial on the issue of whether the PHA had violated Ebony's constitutional right to be free of a state-created danger was scheduled to commence on Monday, May 3, 2010. Following jury selection but prior to opening arguments, the parties announced that they had reached a settlement. As part of the settlement announced to the Court, Plaintiffs agreed not to contest PHA's motion to vacate the Court's summary judgment decision. Currently before the Court is the PHA's motion to vacate.
Whether a court should accede to the parties' request that it vacate its prior opinion (or the opinion of a lower court) as a condition of settlement has been the subject of a lively debate, even in the wake of the Supreme Court's decision in U.S. Bancorp Mortgage Company v. Bonner Mall Partnership, 513 U.S. 18 (1994).*fn1 This debate at its core is largely about policy and the nature of the judicial function.
On one side of the debate is the pro-vacatur camp, which emphasizes the dispute-resolution function of courts and seeks to encourage disposition of cases upon mutual agreement of the parties. This group sees settlement as a way to preserve judicial resources and honor the parties' wishes. See, e.g., 13C CHARLES ALAN WRIGHT, ARTHUR R. MILLER, & EDWARD H. COOPER, FEDERAL PRACTICE AND PROCEDURE § 3533.10.2 (3d ed. 2008); Nestle Co., Inc. v. Chester's Market Inc., 756 F.2d 280, 283 (2d Cir. 1985) (overruled by U.S. Bancorp Mort. Co. v. Bonner Mall P'ship, 513 U.S. 18 (1994) as recognized in In re Tamoxifan Citrate Antitrust Litig., 466 F.3d 187 (2d Cir. 2006)).
On the other side is the anti-vacatur camp, which focuses on the public function courts play when deciding private disputes, such as clarifying the law for future litigants. This group believes that legal decisions issued by courts benefit the public and that "a losing party with a deep pocket should not be permitted to use a settlement to have an adverse precedent vacated." Clarendon Ltd. v. Nu-West Indus. Inc., 936 F.2d 127, 129 (3d Cir. 1991); see also In re United States, 927 F.2d 626 (D.C. Cir. 1991); Matter of Memorial Hosp. of Iowa County, Inc., 862 F.2d 1299, 1302 (7th Cir. 1988) ("[T]he judicial system ought not allow the social value of . . . precedent, created at cost to the public and other litigants, to be a bargaining chip in the process of settlement."). This group also challenges the pro-vacatur camp's notion that post-judgment settlement preserves judicial resources. According to the anti-vacatur argument, vacating a decided judgment might actually deter earlier settlements, with some litigants thinking it "worthwhile to roll the dice rather than settle [at earlier stages] if, but only if, an unfavorable outcome can be washed away by a settlement-related vacatur." Bonner Mall, 513 U.S. at 28.
As noted above, the Supreme Court in Bonner Mall decided an issue analogous to the one this Court now faces: "whether appellate courts in the federal system should vacate civil judgments of subordinate courts in cases that are settled after appeal is filed or certiorari sought." Bonner Mall, 513 U.S. at 19.*fn2 The Supreme Court's unanimous opinion was aptly summarized by the Third Circuit as "generally no." Sentinel Trust Co. v. Universal Bonding Ins. Co., 316 F.3d 213, 220 (3d Cir. 2003). According to the Bonner Mall Court, "[w]here mootness results from settlement . . . the losing party has voluntarily forfeited his legal remedy by the ordinary processes of appeal or certiorari, thereby surrendering his claim to the equitable remedy of vacatur." Bonner Mall, 513 U.S. at 25. The Court invoked the public function of the law, saying that "[j]udicial precedents are presumptively correct and valuable to the legal community as a whole. They are not merely the property of private litigants and should stand unless a court concludes that the public interest would be served by a vacatur." Id. at 26 (quoting Izumi Seimitsu Kogyo Kabushiki Kaisha v. U.S. Philips Corp., 510 U.S. 27, 40 (1993) (Stevens, J., dissenting)). The Court also described its ruling as promoting the "orderly operation of the federal judicial system," by preserving appeal as the primary route through which parties can challenge judgments. Id. at 27.
However, the Court noted an exception to the general rule: where "exceptional circumstances" call for vacatur. Id. at 29. The Court gave little clarification of what constitutes "exceptional circumstances," other than to say that they "do not include the mere fact that the settlement agreement provides for vacatur." Id. The vacatur determination is an equitable one that can be made by the District Court. Id. ("[A] court of appeals presented with a request for vacatur of a district-court judgment may remand the case with instructions that the district court consider the request, which it may do pursuant to Federal Rule of Civil Procedure 60(b).")
Considering the competing interests and giving due deference to the disfavor with which the Third Circuit and the Supreme Court view vacatur of prior decisions, this Court determines that the appropriate course is to vacate its prior judgment.
First, this Court takes note that its summary judgment opinion decided a fact-specific inquiry. It involved a claim that the PHA violated Ebony's right to be free of a state-created danger, which requires a plaintiff to show: (1) the harm caused was foreseeable and fairly direct; (2) a state actor acted with a degree of culpability that shocks the conscience; (3) some relationship existed between the state and the plaintiff that renders plaintiff a foreseeable victim; and (4) "a state actor affirmatively used his or her authority in a way that created a danger to the citizen or that rendered the citizen more vulnerable to danger than had the state not acted at all." Bright v. Westmoreland County, 443 F.3d 276, 281 (3d Cir. 2006) (citations omitted); see DeShaney v. Winnebago County Dep't of Soc. Servs., 489 U.S. 189, 201 (1989) (finding public agency not liable for failing to intervene and rescue abused boy and noting that the state "placed [the boy] in no worse position than that in which he would have been had it not acted at all."). This Court rejected PHA's arguments that Plaintiffs could not prove that it acted affirmatively in a way that shocked the conscience, pointing to evidence that PHA had (1) approved a home with numerous leaks for the Section 8 housing program, (2) paid rent for the home despite knowing about leaks, and (3) delayed Plaintiffs' ability to move out of the home. (See Appendix A.) Furthermore, this Court held that Plaintiffs had proffered sufficient evidence to present to a jury the question of whether PHA had failed to train its employees in the recognition and abatement of mold in Section 8 housing, so as to satisfy the "policy or custom" requirement of an action under 42 U.S.C. § 1983. See Monell v. Dep't of Soc. Servs., 436 U.S. 658 (1978); M.B. v. City of Phila., Civ. A. No. 00-5223, 2003 WL 733879, at *6 (E.D. Pa. Mar. 3, 2003). State-created danger cases are fact-specific and idiosyncratic. This Court's determination that particular conduct constituted "affirmative acts" and could in that context be considered deliberate indifference for purposes of state-created danger liability therefore would have only limited preclusive or precedential effect in subsequent cases. While this Court stands firmly by the reasoning and conclusion of its summary judgment decision, the vacatur of that opinion would not have a significant effect on the law. To vacate an opinion is not to vacate the ideas that animated it. Undoubtedly, those who seek out this Court's prior opinion will be able to find it, even if vacatur has diminished its future value.
Additionally, the decision to seek vacatur also represents a loss for the PHA. The Court's summary judgment opinion held that sections 1437f(o)(8) and 1437d(f) of the Housing Act (42 U.S.C. §§ 1437f(o)(8), 1437d(f)) are not privately enforceable because they do not create personal rights. In asking for vacatur, PHA is also lessening the import of that decision in its favor, thus allaying some of the concerns that it is attempting to use its money to manipulate precedent to its advantage. Like the state-created danger issue discussed above, the ideas supporting the Court's analysis of the private enforceability of the Housing Act provisions remain as persuasive (or non-persuasive) if the opinion itself is vacated as if it were not. The fact that the precedent PHA seeks to vacate today is both helpful and harmful to it is a factor the Court finds relevant in weighing the equities of this motion to vacate.
Also, the Court considers the immediate conservation of judicial resources that the present settlement of this case yields. This case was scheduled for a three-week jury trial, bifurcated on the issues of liability and damages. The parties' witness lists included nearly a hundred individuals (including over two dozen experts) and their exhibit lists topped 500 documents. Regardless of the verdict, an appeal was almost certain to follow. The parties' settlement, contingent on this Court vacating its summary judgment order, thus conserved substantial public and judicial resources. While Bonner Mall counsels that this alone does not constitute "exceptional circumstances" warranting vacatur, it is a factor for the Court to consider.
The Court also takes into account the effect that settlement at this juncture has as a practical matter on the parties. On one side, there is a young girl with a significant brain injury in need of a great deal of expensive care. To deny vacatur and thereby jeopardize the settlement agreement would be to deprive Ebony Gage of money she desperately needs for her care. On the other side, there is PHA, an arm of the state that would face years of additional uncertainty if a settlement could not be reached. Although the public's interest in precedent is great, the interests of the private parties who have lived with this litigation for years and now seek a resolution should not be discounted.
The Court understands the policy concerns behind the Supreme Court's decision in Bonner Mall: Significant judicial energy went into crafting the Court's April 20, 2010 summary judgment opinion and vacating that decision would deprive future litigants of the full benefit of that precedent, which was developed at cost to the public. Vacating the Court's judgment would remove any preclusive effect of that judgment and hence might require that future judicial resources be expended on an issue that otherwise would have been considered decided. See Seth Nesin, Note, The Benefits of Applying Issue Preclusion To Interlocutory Judgments in Cases That Settle, 76 N.Y.U. L. REV. 874, 877--78 (2001).
However, as noted above, the negative effects of vacating in this case are relatively minor and the positive effects substantial. Therefore, this Court finds that exceptional circumstances exist to warrant an order vacating the Court's memorandum and order dated April 20, 2010.
District Court judges facing motions like the one currently before this Court find themselves in a difficult situation. Everyone in the courtroom seems to benefit from the settlement: the parties get certainty and a mutually-beneficial agreement, the judge gets to devote his time to other cases requiring his attention, and the jurors get to go home and resume their normal lives. Against these immediate and recognizable benefits, the Court must weigh the silent but important interests not represented in the courtroom: future litigants, the public as a whole, the development of the law, and the integrity of the judicial system. Recognizing the collective action problems inherent in this scenario, the Supreme Court in Bonner Mall determined that in balancing the equities, there must be a finger on the scale against vacatur. However, where the loss to the public of eliminating precedent and its potential preclusive effect is slight and the benefits of settlement are great, vacatur is appropriate. That being the case here, the Court will vacate its April 20, 2010 memorandum and order. An appropriate order will be docketed separately.
The Housing Choice Voucher Program ("HCVP") is a federal subsidized housing program in which qualified low-income individuals receive vouchers that they can use to lease private housing. (PHA Mot. for Summ. J. Ex. P-5 [Housing Choice Voucher Program Desk Manual] at 1-2.) Landlords who agree to participate in the HCVP enter into a Housing Assistance Payment ("HAP") contract with a local housing authority, which in turn pays some or all of the tenant's rent directly to the landlord. (Id.) Thus, the tenant has a lease with the landlord and the landlord has a separate contract with the local housing authority. (Id. Ex. D-86 at 1-12.) The HAP contract requires the landlord to maintain the premises in accordance with the department of Housing and Urban Development's ("HUD") Housing Quality Standards ("HQS"), codified at 24 C.F.R. §982.401. (Pl.'s Resp. in Opp'n to Mot. for Summ. J. of PHA Defs. Ex. T [HAP Contract].) Federal regulations require that the local housing authority conduct inspections of homes covered by the program at least annually to ensure they comply with the HQS. 24 C.F.R. § 982.405(a).
In the present case, Plaintiffs were HCVP participants who allege that they were injured due to unsafe conditions in the HCVP-approved home in which they lived. Specifically, they allege that damp conditions and the presence of harmful substances in the home such as mold caused and/or exacerbated Plaintiffs' asthma, including a tragic respiratory incident on March 18, 2006 that resulted in Plaintiff Ebony Gage being hospitalized for months and permanently brain damaged. (Sec. Am. Compl. ¶¶ 283, 294, 297.)
Plaintiffs bring this suit against their local housing authority, the Philadelphia Housing Authority ("PHA") and several of its employees (collectively, the "PHA Defendants") under two theories: (1) that the PHA Defendants violated Plaintiffs' civil rights "pursuant to the Fifth and Fourteenth Amendments to the United States Constitution, the United States Housing Act of 1937, 42 U.S.C. § 1437, and the implementing regulations promulgated in connection therewith . . . all of which are remediable through 42 U.S.C. § 1983 . . . ."; and (2) that the PHA Defendants affirmatively exercised their authority in a manner that rendered Plaintiffs more vulnerable to danger and violated Plaintiffs' rights under the Fifth and Fourteenth Amendments to the United States Constitution. (Id. ¶¶ 315, 322--23.) Plaintiffs also are suing the owners of the property (defendants Robert Stahl, Jr. and Kathleen Stahl, or "the Stahls") and the purported managers of the property (defendants Artur Realty, Inc.; Artur Property Management; Artur Repairs; and Ernest Artur, Jr.; collectively "the Artur Defendants") under theories of negligence and negligence per se.
Currently before the Court are several motions for summary judgment filed by Defendants. For the reasons stated below, the motions are granted in part and denied in part.
A. 1998: The Stahls Purchase the Scattergood Property
On September 25, 1998, the Stahls purchased 1733 Scattergood Street, a home located in the Frankford section of Philadelphia ("the Scattergood property") from Karen A. & James T. Parisano ("the Parisanos"). (Pl.'s Resp. in Opp'n to Mot. for Summ. J. of PHA Defs. Ex. A [Agreement of Sale].) As part of the sale, the real estate broker supplied the Stahls with a Seller's Property Disclosure Statement, which revealed, among other things, that there had been water leakage in the home's kitchen, basement, and roof. (Id. Ex. B [Seller's Disclosure].) On October 9, 1998, Karen Parisano wrote a letter addressed to "Mr. Artur" stating: "In response to the question on the Disclosure Statement, there is a leak in the basement on the wall in the back of the basement on the west side of the property somewhere around or near the window (facing my next door neighbor's property). I don't know exactly where the leak is since I never had anyone come out to look at it and try to repair it." (Id. Ex. C [Parisano Letter].)
In November of 1998, the Stahls agreed to pay Artur Realty a fee for finding a tenant for the Scattergood property and for collecting rent payments. (Artur Defs.' Mot. for Summ. J. Ex. B [Listing to Rent Contract].) The agreement explicitly noted that Artur Realty lacked authority to contract for repairs to the Scattergood property at the Stahls' expense. (Id.)
B. 1999: Plaintiffs Lease the Scattergood Property
The Stahls, working with Ernest Artur and Artur Realty, sought to enroll the Scattergood property in the HCVP. In June of 1999, a PHA inspector, Defendant Mike Regan, inspected the Scattergood property for a potential HCVP tenant and failed the property, citing numerous areas in which the property failed to comply with the HQS, including a broken toilet, broken wash basin, deficient bathtub and shower, and work needed on the roof and gutters. (Pl.'s Resp. in Opp'n to Mot. for Summ. J. of PHA Defs. Ex. G [June 1999 Inspection Checklist]; Id. Ex. H [June 1999 Violations List]; Id. Ex. I [June 1999 Inspection Failure Notice].)
On July 7, 1999, Plaintiff Angelique McKinney ("McKinney") received a voucher from the HCVP. (PHA Mot. for Summ. J. Ex. D-15 [Voucher].) On July 26, 1999, McKinney applied to rent the Scattergood property for herself and her two children, Ebony Gage, age 6, and Ronald Gage, Jr., age 1. (Pl.'s Resp. in Opp'n to Mot. for Summ. J. of PHA Defs. Ex. K [Rental Application].) On July 27, 1999, McKinney signed a HUD "Request for Lease Approval" form, asking for the Scattergood property to be included in the HCVP. (Id. Ex. L [Request Form].) A PHA employee inspected the Scattergood property on September 8, 1999 and noted that it needed repairs. (Id. Ex. M [Appraisal Inspection].) That same day, PHA sent a letter to Artur Realty noting that the Scattergood property failed to meet the HQS, meaning that PHA would not enter into a HAP contract for that property until certain repairs were made. (Id. Ex. N [Sept. 8 Leasing Rental Determination].)
One day later, on September 9, 1999, the Scattergood property was inspected by PHA inspector Chuck Tomasello, who determined that the property failed. (Id. Ex. O [Tomasello Dep.] at 65.) A letter dated September 9, 1999 from PHA to Artur Realty states that "[n]notice is hereby given that an inspection was made at the [Scattergood Property] on 09/09/99 and the unit was found to be in violation of Housing Quality Standards. . . . When repairs are completed, contact V. Booth at [phone number] to request a re-inspection." (Id. Ex. Q [Sept. 1999 Inspection Failure Notice].) Records indicate that a second inspection of the home was conducted on September 9, 1999, by PHA inspector Al Fiorentino who determined that the home met the HQS. (Id. Ex. R [Sept. 1999 Inspection Pass].) On September 10, 1999, PHA sent Artur Realty a notice stating that an inspection was made at the Scattergood property on September 9, 1999 and that the unit was in compliance with the HQS. (Id. Ex. S [Sept. 1999 Inspection Pass Notice].)
PHA and the Stahls entered into a HAP contract for the Scattergood property on September 20, 1999. (Id. Ex. T [HAP Contract].) Also on September 20, 1999, Ernest Artur, Jr., acting as agent for the Stahls, signed an "Owner's Certification of Compliance of Housing Quality Standards." (Id. Ex. U [Artur Certification].) That same day, McKinney entered into a lease for rental of the property. (Id. Ex. V [Lease].) The lease, signed by PHA and a representative of Artur Realty, stated that "[t]he owner must maintain the contract unit and premises in accordance with the HQS." (Id. § 9.)
McKinney and her two children, Ebony and Ronald, moved into the Scattergood property in October of 1999. (Id. Ex. W [McKinney Dep.] at 27.)
C. 2000: Plaintiffs Complain of Leaks in Upstairs Toilet and Basement
On February 9, 2000, McKinney reported to the Artur Defendants that the toilet in the upstairs bathroom was leaking and causing the ceiling in the living room to cave in. (Id. Ex. Z [Tenant Memos].) Defendant Glenn Eric Cuff , a PHA inspector, performed an annually mandated HUD inspection on May 15, 2000, at which time he found that the Scattergood Property failed to meet the HQS. (Id. Ex. AA [May 2000 Inspection Failure].) Cuff's report specifically noted that the "ceiling areas" needed to be repaired. (Id.) PHA sent a Notice of Termination letter dated May 16, 2000 to the Artur Defendants advising that repairs were needed based on the May 15, 2000 inspection. (Id. Ex. BB [May 2000 Inspection Failure Notice].) Following a re-inspection of the home on June 20, 2000 by Defendant Anthony Toliver, another PHA inspector, PHA sent an Annual Inspection Approval Notice to the Artur Defendants on June 21, 2000 advising that the unit was in HQS compliance. (Id. Ex. CC [June 2000 Inspection Pass Notice]; PHA Mot. for Summ J. Ex. P-21 [June 2000 Inspection Pass].)
Also in 2000, the water meter in the basement of the Scattergood property began leaking. (McKinney Dep. at 37--41.) McKinney placed a bucket underneath the meter to collect the dripping water, which she had to empty every three or four days. (Id. at 40.) She complained to the Artur Defendants about the issues. (Id.) McKinney met with a PHA Service Representative to inform PHA about the leaks in the home and about letters she was getting from PWD regarding her water meter. (Id. at 41.)
D. 2001: Toilet and Water Heater Leak; Home Passes Inspection
On April 11, 2001, McKinney contacted the Artur Defendants to report that the toilet was still leaking. (Tenant Memos.) The Artur Defendants sent Breen's Cleaning Service to the home on April 20, 2001 to perform some maintenance work. (Pl.'s Resp. in Opp'n to Mot. for Summ. J. of PHA Defs. Ex. DD [Breen April 20, 2001 Invoice].) McKinney again contacted the Artur Defendants on May 16, 2001, to complain that the water heater was leaking. (Tenant Memos.) On May 19, 2001, Breen's Cleaning Service installed a new water heater. (Pl.'s Resp. in Opp'n to Mot. for Summ. J. of PHA Defs. Ex. FF [Breen May 19, 2001 Invoice].) On May 22, 2001, PHA inspector William O'Meara gave the home a passing inspection. (Id. Ex. GG [May 2001 Inspection Pass].)
E. 2002: Home Passes Inspection; Leaks from the Tub; Ronald Develops Asthma
On May 21, 2002, O'Meara gave the Scattergood property another passing inspection. (Id. Ex. II [May 2002 Inspection Pass].) About two weeks later, McKinney contacted the Artur Defendants to complain about a leak coming from her tub. (Tenant Memos.) However, the Stahls refused to make any repairs until the water bills were paid up to date. (Id.) By this time, Ronald Gage, Jr. developed asthma. (Pl.'s Resp. in Opp'n to Mot. for Summ. J. of PHA Defs. Ex. Y [Schacter report] at 12.)
F. 2003: Leaks from the Front Porch; Home Passes Inspection; Ebony Develops Asthma
On June 12, 2003, McKinney reported to the Artur Defendants continuing problems with leaks from the front porch window and front porch roof-the same as those identified in the Seller's Disclosure in 1998 and the initial PHA inspection in 1999. (Tenant Memos; Seller's Disclosure; June 1999 Inspection Failure Notice.) Notwithstanding this fact, on August 8, 2003, an inspector from PHA identified only as the "E1 Team E Floater" gave the property a passing inspection. (Pl.'s Resp. in Opp'n to Mot. for ...