By David Ingram
WASHINGTON (Reuters) - A New York nonprofit that advocates for the mentally ill cannot sue on their behalf for better housing because of how the organization is structured, a court said on Friday.
The decision by a federal appeals court sweeps aside a trial judge's finding that the State of New York discriminated against thousands of people living in adult homes.
The case must now begin anew, possibly with the Justice Department taking the lead, the court said.
Disability Advocates Inc brought the case on behalf of people with mental illness, following a model that is common in U.S. courts for an association to file suit on behalf of its members or people who are closely related to its mission.
The appeals court said Disability Advocates could not do so here because it is not a traditional, member-based organization, nor does its "constituency" have the "indicia of membership."
For example, it is not clear that the mentally ill have the power to elect the directors of Disability Advocates, make budget decisions or direct litigation strategies, wrote Judge José Cabranes of the Court of Appeals for the 2nd Circuit.
The nonprofit does not have standing to sue, Cabranes wrote.
Disability Advocates called the ruling a setback and said it would continue pressing New York state officials.
"I am hopeful that the state will want to find a solution here that avoids future litigation and recognizes the rights of the residents to live in the community," said Cliff Zucker, executive director of Disability Advocates.
Zucker said he disagrees with the court's interpretation of how Disability Advocates operates. Adult-home residents with mental illness are capable of participating in the organization and the lawsuit and they have done so, he said.
No decision has been made about appealing the appellate court's ruling, either to the full 2nd Circuit or to the Supreme Court, Zucker said. His organization filed its initial complaint against the state in 2003.
The offices of New York Gov. Andrew Cuomo and Attorney General Eric Schneiderman, both Democrats, did not respond to requests for comment late on Friday.
The Justice Department, which joined the lawsuit in 2009 on the side of the mentally ill, declined to comment.
Cabranes wrote that federal government may "re-file the action and submit the same evidence at a subsequent trial," as could individual plaintiffs with standing.
"We are not unsympathetic to the concern that our disposition will delay the resolution of this controversy and impose substantial burdens and transaction costs on the parties, their counsel, and the courts," Cabranes wrote, adding that the appeals court has confidence in the trial judge to "facilitate an appropriate, efficient resolution."
District Judge Nicholas Garaufis found in 2009 that New York State violated federal disability law and discriminated against Disability Advocates' 4,300 constituents by failing to provide them with adequate housing.
The case is Disability Advocates Inc, et al, v. New York Coalition for Quality Assisted, et al, U.S. Court of Appeals for the 2nd Circuit, 10-235(L)
(Reporting by David Ingram; Editing by Lisa Shumaker)