The judge issued a preliminary injunction preventing the city from ending the program with effect from May 31.
Originally, the city had planned to stop providing assistance to 196 families of Sandy evacuees from April 30. However, all 488 households still under the program at the time brought a putative class action against the city. The lawsuit alleged the intended actions of the city where wrongful, because the city sought to stop assistance while failing to provide adequate options for the families still in the program.
The court had earlier issued a temporary restraining order on May 1 preventing the city from stopping assistance to the Sandy victims. That order expired on Wednesday, and the city raised its arguments once again.
The city, which has already spent more than $60 million on rooms to shelter those displaced by Sandy claimed the hotel program was unaffordable for the city, and it was not possible to continue the program.
However, the judge rejected claims made by the city and found the evacuees had a constitutionally protected property interest in the program. According to the court, the city had led them to believe that they will continue to receive assistance until they found proper housing.
Citing a new federal grant provided to the city to help Sandy evacuees, the judge rejected arguments that the program to provide hotel rent for Sandy evacuees was too costly.
The judge observed, “To terminate the hotel program just when the (federal) funding became available does not seem reasonable.”
The judge also pointed out that there was a fund of $9 million for rental assistance programs, besides the federal grant. She also mentioned that the city has already made an application to FEMA for reimbursement of expenses it incurred for paying hotel rent of Sandy victims.
Though the judge did not grant class certification to the lawsuit, her act of denying class certification automatically extended the benefit of her ruling to all households still in the program, but beyond the class that had been proposed.