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May 5, 1978

NEW YORK CITY HOUSING AUTHORITY, et al., Defendants, and UNITED JEWISH ORGANIZATIONS OF WILLIAMSBURG, INC., et al., Intervenor-Defendants. UNITED JEWISH ORGANIZATIONS OF WILLIAMSBURG, INC., et al., Third-Party Plaintiffs, v. KENT VILLAGE HOUSING CO., INC., et al., Third-Party Defendants

The opinion of the court was delivered by: TENNEY



 This two-year old litigation concerning discrimination in housing in the Brooklyn community of Williamsburg now stands at a critical juncture. The conciliation and negotiation efforts of the parties, particularly the community groups, have resulted in the production of a decree consented in by all but one of the groups of parties in this action. This decree resolves virtually all issues in the case and represents a most commendable resolution of a dispute which might never have been otherwise resolved in any satisfactory manner. At the same time, however, the parties who have not signed the consent decree -- Kraus Management, Inc. and Ross-Rodney Housing Corp., manager and owner respectively of the Bedford Gardens development ("Bedford Gardens defendants") -- now oppose this Court's approval of the decree even as against those parties who have consented to it and strenuously resist the imposition upon them of any injunctive relief to correct past illegal discriminatory acts in the renting of Bedford Gardens. For the reasons stated below, the consent decree submitted to the Court is approved as against those parties that have noted their consent.

 History of the Litigation

 The action was commenced in May 1976 by two associations and by individuals seeking to represent non-white persons denied dwelling units or housing subsidies in five housing developments in Williamsburg -- Jonathan Williams Plaza, Independence Towers, Taylor-Wythe Houses, 115-123 Division Avenue and Bedford Gardens. The action was initially commenced against the New York City Housing Authority ("NYCHA") and its chairman, who were allegedly responsible in whole or in part for the renting of apartments at these five developments. Later that same month the plaintiffs filed an amended complaint which added the Bedford Gardens defendants. During this initial stage of the litigation, the United Jewish Organizations of Williamsburg ("UJO") and individuals seeking to represent white families who have valid, existing leases at Bedford Gardens and who have priority under NYCHA's existing rules for rentals in the developments intervened in the action as defendants. UJO and one of the individual intervenor defendants also commenced a third-party action against Kent Village Housing Co., Inc. and Los Sures Management Co., Inc., the owner/sponsor and manager of a sixth development, Roberto Clemente Plaza ("Clemente Plaza"); the third-party plaintiffs also claimed against the United States Department of Housing and Urban Development and its Secretary and the Housing and Development Administration of the City of New York, now denominated the Department of Housing Preservation and Development ("HPD"), alleged to have discriminated in the rental of Clemente Plaza. By Memorandum and Order dated December 10, 1976, this Court approved the third-party action, consolidated it with the main action, and joined HUD and its Secretary as defendants in the main action. By Memorandum and Order dated December 20, 1976, the Court ratified the joinder of the Bedford Gardens defendants.

 At the commencement of the action, temporary restraining orders were issued preventing the renting of units in the developments pending a hearing. Orders of May 11 and May 26, 1976. Those orders were vacated by this Court on June 7, 1976, in the expectation that mediation under the supervision of the Community Relations Service of the United States Department of Justice would enable the parties and the community "to reach some accord on the issues involved herein without unnecessary financial loss to the City or the private interests involved." Memorandum of June 7, 1976, at 3. That mediation continued throughout the latter part of 1976.

 In December 1976 the first buildings in Clemente Plaza, the last of the six developments to be completed, received their certificates of occupancy. Intervenor defendants/third-party plaintiffs then sought a temporary restraining order and preliminary injunction against the tenanting of Clemente Plaza in a discriminatory fashion. The Court entered such a temporary restraining order on December 6, 1976, and then held six days of hearings on a preliminary injunction during which some 800 pages of testimony was taken and evidence was introduced concerning the Williamsburg community, focusing primarily on Clemente Plaza. There was testimony about the Marketing Plan for Clemente Plaza and the understanding both of community groups and of public officials that the development would be rented 75% to non-white tenants and 25% to white in order to compensate for rental patterns at Bedford Gardens and Taylor-Wythe Houses, where white families made up between 60% and 75% of the tenants. There was also evidence that the white community in Williamsburg, primarily Hasidic Jews, understood that Clemente Plaza would be rented according to the 75/25 ratio and that this situation would both inhibit whites from moving into Clemente Plaza and increase the danger of a white exodus from the neighborhood in general.

 The Court concluded that attempts at conciliation, adjourned during the preliminary injunction hearings, still presented the best hope for satisfactory resolution of the various disputes but that an interim solution needed to be achieved at Clemente Plaza. Accordingly, on December 23, 1976, the Court adjourned the hearings on the preliminary injunction until January and entered an Interim Order directing that the 157 Clemente Plaza leases already granted to non-white families be honored but that actual occupancy of the available buildings at the development by these non-white families not exceed 50% of the available buildings during this interim period.

 Thereafter the parties, with the exception of the Bedford Gardens defendants, see Affidavit of Herman I. Kraus, sworn to March 17, 1978, para. 6, continued their efforts at negotiation of a settlement. By the summer, agreement had been reached and was embodied in the form of a consent decree. On August 9, 1977, the Court, upon consent of the parties, lifted the Interim Order which had frozen the renting of Clemente Plaza and directed that rental proceed in accordance with the terms of the proposed consent decree. It was noted at that time, however, that the Bedford Gardens defendants, notwithstanding their earlier representations that they did not "intend to take an active role as to the substantive issues in this litigation, but [desired] only to follow whatever decision and lawful orders are ultimately rendered by this Court," Affidavit of Harlan J. Funk, sworn to June 2, 1976, para. 8, and notwithstanding the fact that they did not participate in the negotiations which produced the consent decree, would not consent to participation in the consent decree. The Bedford Gardens defendants were requested by the Court to draw up a version of the proposed consent decree which would be acceptable to them. This document was submitted to the Court and to the other parties on September 12, 1977 ("Amended Proposed Consent Decree"). In October the community parties responded, indicating they could not accept the modifications suggested by the Bedford Gardens defendants. On November 28, 1977, the parties appeared in court on an application by the plaintiffs for approval of the proposed consent decree as to the parties who had agreed to it and for a preliminary injunction and temporary restraining order with respect to rental at Bedford Gardens. On December 1, 1977, this Court entered an order directing compliance with the terms of the consent decree by all parties except the Bedford Gardens defendants and noting that each of the Bedford Gardens defendants had "represented to this Court that it would, pending the return date of this order to show cause, observe the requirements and provisions of the Amended Proposed Consent Decree insofar as such Decree describes actions to be taken by or things to be observed by it."

 A further order, entered on February 14, 1978, (1) certified the plaintiff class for purposes of declaratory and injunctive relief but not for purposes of ancillary monetary relief, (2) restated the earlier order mandating interim compliance with the consent decree, (3) directed that notice of the consent decree be published, and (4) established a date for a hearing on the approval of the consent decree and on the preliminary injunction requested against the Bedford Gardens defendants.

 The hearing on approval of the consent decree was held on April 18, 1978, pursuant to the published notice. No one appeared in opposition to approval of the decree save the Bedford Gardens defendants, who filed a brief. The hearing on the request for a preliminary injunction against the Bedford Gardens defendants was adjourned until May 4, 1978.

 Consent Decree

 The Consent Decree now presented to this Court for approval is the "result of many long, intense negotiations" during which the community parties, "in order to resolve, short of a plenary hearing, the potentially bitter and divisive dispute which had led to the filing of the various consolidated actions, . . . made many compromises." Memorandum of Community Parties, dated October 31, 1977, at 1. The resolution of these disputes by means of negotiation, conciliation and compromise is particularly appropriate in this litigation. In the first instance, the Fair Housing Act of 1968, upon which this action is in part based, recognizes a preference for this type of solution. Thus, the Act requires that once the Secretary of HUD has decided to resolve a complaint under the Act, she "shall proceed to try to eliminate or correct the alleged discriminatory housing practice by informal methods of conference, conciliation, and persuasion." 42 U.S.C. ยง 3610(a). Furthermore, once the complaint has come into court as a civil action to enforce the Act, the statute specifically provides:

That the court shall continue such civil case . . . from time to time before bringing it to trial if the court believes that the conciliation efforts of the Secretary or a State or local agency are likely to result in satisfactory settlement of the ...

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