The opinion of the court was delivered by: SAND
This action was brought by the United States against the City of Yonkers, the Yonkers Community Development Agency (collectively "the City") and the Yonkers Board of Education, alleging violations of Title IV and VI of the Civil Rights Act of 1964, TItle VIII of the Civil Rights Act of 1968, and the Fourteenth Amendment, in the administration of Yonkers' public school system and public housing programs. Soon thereafter, the Yonkers Branch of the National Association for the Advancement of Colored People and Charlotte Ryer, as class representative of the black residents of Yonkers, intervened as party-plaintiffs against the City and the Board of Education, and subsequently asserted a claim against the Department of Housing and Urban Development (HUD) as well. Plaintiff-intervenors' claim against HUD was settled by a Consent Decree approved by this Court on March 19, 1984.
The terms of the Consent Decree, in broad outline, required HUD to make available 200 units of family and large family public housing to be located east of the Saw Mill River Parkway within the City of Yonkers (hereinafter "East Yonkers"), and 175 family certificates under the Section 8 Existing Housing Program, which, for the first 120 days following their receipt by eligible families, would be valid for use only in buildings in East Yonkers.
Plaintiff-intervenors contend that HUD has failed to fulfill its obligations with respect to both the public housing units and the Section 8 Existing Certificates. This Opinion addresses plaintiff-intervenors' claim with respect to the Section 8 Existing Certificates.
The Consent Decree provides that "[w]ithin 45 days of the date upon which this Consent Decree is entered by the court, HUD will invite the [Yonkers Metropolitan Housing Authority (hereinafter "MHA")] to submit an application for one hundred and seventy-five (175) family certificates under the Section 8 Existing Housing Program." Consent Decree, para. (11). The Decree further provides that as a condition of the receipt of the certificates, "HUD shall required that for the first one hundred and twenty days following the receipt by a family of a certificate, the MHA shall permit the family to use the certificate to obtain qualified housing only in buildings east of the Saw Mill River Parkway in the City of Yonkers." Id. at para. (12). After 120 days, if a certificate holder is unable to locate qualified housing in East Yonkers, the certificate can then be used anywhere in the City of Yonkers. Id. For two years following HUD's provision of the Section 8 certificates to the MHA, HUD is required to conduct and file with the plaintiff-intervenors quarterly reviews of the use of the certificates. Id. at para (13).
In addition, HUD is required to "notify the MHA that it expects that agency to make all diligent efforts to assist eligible families to find housing in East Yonkers under the Section 8 Existing Program." Id. at para (15). HUD must also "require the MHA to inform eligible applicants as to the nature of" the 175 Section 8 Existing Certificates made available under the Consent Decree, and must provide applicants with the name and telephone number of a HUD employee to whom complaints may be directed concerning any "lack of cooperation by the MHA ..." Id. HUD is to provide to plaintiff intervenors on a quarterly basis "its findings concerning the efforts of the MHA to ... utilize the Section 8 Existing Certificates and any recommendations made by HUD to the MHA to improve the utilization rates" of the certificates. Id. HUD is also to report on a quarterly basis any complaints it has received from applicants and the steps taken to resolve them. Id.
Actions Taken to Date and the Claims of the Consent Decree Parties
On May 3, 1984, forty-five days after this Court approved the Consent Decree, HUD notified the MHA that "HUD will accept an application by your Authority to administer a Section 8 Existing Housing Program in the City of Yonkers for 175 2-BR family unites." Letter of George M. Beaton, Acting Regional Administrator/Regional Housing Commissioner, New York Regional Office, HUD, to Emmett Burke, Chairman of the Board, MHA [hereinafter "Beaton Letter"], Attachment 3 to Plaintiff-intervenors' Motion for an Order Requiring HUD to Adhere to the Terms of the Consent Decree [hereinafter "Plaintiff-intervenors' Motion"].
On June 14, 1984, the MHA submitted an application for the Section 8 Existing certificates together with an application for the 200 unites of public housing also made available by the Decree. See Letter of Peter Smith, Secretary-Director, MHA, to Joseph Monticciolo, Regional Administrator-Regional Housing Commissioner, New York Regional Office, HUD, Attachment 4 to Plaintiff-intervenors' Motion.
HUD has yet to take any formal action with respect to the MHA's Section 8 application. On July 3, 1984, a passing reference to the application was made in a letter to the City Manager of Yonkers from HUD's Office of Community Planning and Development for Region II [hereinafter "the Cruise Letter"]. The letter notified the City that the approval of its application to participate in HUD's Third Round Rental Rehabilitation Demonstration Program would be conditioned on an amendment of the City's Housing Assistance Plan (hereinafter "HAP") to increase its current three-year family assisted housing goals by the number of Section 8 Existing Certificates that would be provided under the Program. The letter then went on to say:
Please be advised that a similar HAP amendment will be required in connection with Section 8 Existing Certificates to be made available by HUD under the City's regular Rental Rehabilitation Program for which an application is due by July 9, 1984 and the MHA's application for 175 Section 8 Existing Certificates made available by the Department on May 3, 1984.
Attachment 6 to Plaintiff-intervenors' Motion (emphasis added).
Neither the MHA nor counsel for plaintiff- intervenors was sent a copy of the Cruise Letter. In a letter sent the same day, George Beaton wrote to the Secretary-Director of the MHA, acknowledging receipt of the MHA's application for the 200 units of public housing and listing the additional materials to be supplied in connection therewith. No mention was made of the MHA's application for the Section 8 Certificates. See Attachment 7 to Plaintiff-intervenors' Motion. Nor apparently has there been any communication from HUD to the MHa or plaintiff-intervenors concerning the status of the MHA's application. In December of 1984, plaintiff-intervenors brought the present motion to compel HUD to comply with the terms of the Consent Decree.
Plaintiff-intervenors contend that HUD has "subverted the Consent Decree," Plaintiff-intervenors' Motion at p. 5, by conditioning provision of the Section 8 Existing Certificates upon the City's willingness to amend its current HAP. They contend that the Decree does not require or contemplate such a condition, and indeed that the Decree names the MHA as administrator of the Section 8 program precisely to avoid the need for any action on the part of the City. Plaintiff-intervenors also contend that HUD represented to them and to the Court "that it could and would waive any regulation which might have limited its ... capacity to fully and timely implement the Decree." Plaintiff-intervenors' Reply Mem. at p.6.
HUD contends that it is, at present, prohibited by statute from approving the MHA's application for 175 Section 8 Existing Certificates unless the City amends its current HAP to increase the three-year goal for assisted family housing units. The statute in question is Section 213 of the Housing and Community Development Act of 1974, 42 U.S.C. § 1439, which, in essence, conditions approval of an application for federal housing assistance upon a finding that it is consistent with the area's HAP. HUD characterizes its failure to notify the MHA of this contingency as an "oversight," HUD Mem. in Opp. to Plaintiff-intervenors' Motion (hereinafter "HUD Mem. of Dec. 21, 1984") at p. 12, n.8, and it contends that by notifying the City of the need for an amendment to the current HAP, it has taken the only action it presently can with respect to the implementation of the Decree's Section 8 Program.
HUD notes that "[w]hile a specific deadline is set for HUD's invitation to the MHA to submit an application [for] Section 8 Existing funds, the Decree is silent as to when HUD must approve that application and actually award the Certificates." HUD Mem. of Dec. 21, 1984, at p. 4. In addition, HUD contends that plaintiff-intervenors were "well aware, prior to signing the Decree," id. at p. 2, that the number of unites called for by the Decree exceeded the three-year goal in the City's HAP, and that the Decree itself reflects the "clear understanding" reached by the parties that all provisions of the Housing and Community Development Act of 1974, including the requirement of consistency with the area's current HAP, were fully applicable. Id. at p.10. Thus, HUD contends that it "did not agree, and it therefore not obligated, to make all of the housing assistance specified in the Decree available in the same year where to do so would contravene the City's HAP," id., and that this Court is without the authority to order HUD to violate a federal statute or the regulations promulgated thereunder.
The Obligations Imposed by the Terms of the Consent Decree
HUD's contention that the Consent Decree parties intended to condition approval of the MHA's Section 8 application upon a finding of consistency with the City's HAP is clearly at variance with the terms of the Decree and the explicit representations made by the Consent Decree parties to this Court in urging approval of the Decree.
HUD places primary reliance on the fact that paragraph 11 of the Decree specifies a date by which HUD must invite the MHA to apply for the Certificates, not not a date by which HUD must approve the application and award the certificates. However, the paragraphs that follow paragraph 11 contain no suggestion that there are any conditions precedent to HUD's approval of the application, or any suggestion that there may be reasons for delay in giving that approval. Instead, the paragraphs simply go on to describe the obligations of HUD in administering the certificates for a period of two years following their receipt by eligible families. The mere omission of an explicit deadline for performance does not give rise to an inference that the parties contemplated delay in, or conditions precedent to, performance. Where no deadline is specified, it is assumed that the parties intended performance within a reasonable time. See, e.g., Lee v. Joseph E. Seagram & Sons, Inc., 413 F. Supp. 693 (S.D.N.Y. 1976), aff'd, 552 F.2d 447 (2d Cir. 1977).
Moreover, comparison of the paragraphs in the Decree concerning the Section 8 Existing Certificates with those concerning the 200 unites of public housing negates any suggestion that the parties contemplated preconditions or possible delays in the approval of the MHA's Section 8 application. The Decree makes clear that participation by the City is required for construction of the public housing units, and it recites the measures which HUD can and will take to encourage that participation. See Consent Decree, paragraph (6. (The City's incentive to participate is a pre-existing contract commitment to support, funding should become available in the years governed by the City's 1982-85 HAP, the construction of 140 units of public housing for families outside areas of minority concentration.) In addition, the Decree clearly recognizes that since the City has significantly less incentive to support 60 of the 200 units of public housing, HUD's ability to provide those units expeditiously (or indeed at all) is less certain. Paragraph 7, 8 and 10 of the Decree reflect efforts to identify and, insofar as possible, provide for those contingencies. These detailed provisions stand in sharp contrast to the provisions governing the Section 8 Existing Certificates. It is, to say the least, unlikely that the Consent Decree parties believed that similar contingencies existed with respect to the Section 8 program but made no attempt to provide for them.
The parties' own description of the Consent Decree to the Court in urging its approval similarly supports the conclusion that no party viewed HUD's obligation to approve the application as being conditioned upon the occurrence of any other event, nor anticipated any significant delay between the time of application and the time of approval. At hearing held on March 1, 1984, in response to the Court's inquiry as to what would be achieved by approval of a settlement to which the City of Yonkers was not a party, and which ended only a portion of the litigation, counsel for plaintiff-intervenors replied, in relevant part, that:
... as the decree is currently written, there are certainly aspects of the decree which are not contingent upon the approval or participation for that matter of the City of Yonkers. The MHA is an independent agency under state law. OUr discussions with Mr. Bushing, the chairman of the board of that agency and with Mr. Smith, its executive director, lead us to believe that it will activity participate, accepting the Section 8 participating certificates having been available through this decree and that will provide immediate relief as the units are made available to members of the class.
HUD did not take issue with this description of the Decree's Section 8 program, nor did HUD's own references to the program (which focused primarily on the administration of the certificate by the MHA) in any way suggest that the program was dependent upon actions of the City. Similarly, the City's attorneys raised other objections to the Consent Decree but did not take issue with this representation. Thus, we fail to see how it was "obvious" either that all of the units provided for in the Decree could not be made immediately available without an amendment to the City's HAP, HUD Mem. of Dec. 21, 1984, at 6, or that "City was always in a position to block" implementation of the Section 8 program. Transcript of oral argument on Plaintiff-intervenors' Motion at p.13. Plaintiff-intervenors' description of the Decree to the Court, and HUD's acquiescence in that description, indicate that the Consent Decree parties understood precisely the opposite to be true.
HUD's actions immediately following the Decree's approval similarly belie its claim that the Consent Decree parties understood that the Section 8 Certificates could not be provided as long as the City's current HAP remained in effect and unamended. HUD's invitation to the MHA to apply for the Section 8 Certificates carefully recited the conditions imposed upon the Certificates by the Consent Decree.
Yet, it made no mention of the need for an amendment of the City's HAP. Nor did HUD notify the City, at that time, of such a requirement. It was not until two months later, in the course of reviewing the City's application to participate in a different Section 8 program, that HUD first mentioned the need for an amendment to the City's HAP before any additional Section 8 Certificates -- including those called for by the Consent Decree -- could be awarded. Significantly, HUD's single mention of the requirement was not phrased as a formal notification to the City, made pursuant to HUD's obligations under the Decree. Nor was it phrased as a reminder to plaintiff-intervenors or the MHA of a past understanding. Indeed, plaintiff-intervenors and the MHA were never notified of the requirement. The requirement was simply mentioned in passing to the City Manager in a letter on another subject, while a letter sent the same day to the MHA gave it further instruction about its application for the 200 public housing units, but was silent as tot he simultaneously submitted Section 8 application. This course of conduct suggests that any connection between the City's HAP and the Consent Decree's Section 8 program was a belated discovery for HUD, and one that it was not eager to share with the MHA or plaintiff-intervenors.
HUD nonetheless contends that "the language of the Consent Decree itself evidences the clear understanding that all provisions of the HCDA, including Section 213 [the provision requiring consistency with the area's HAP], are fully applicable." HUD Mem. of Dec. 21, 1984, at p.10. However, there is nothing in the language of the Consent Decree, or in the statement made by the Consent Decree parties or others prior to the Decree's approval, to suggest that the parties understood Section 213 to require an increase in the City's three-year HAP goals before HUD could award the Section 8 Certificates to the MHA.
In their memoranda in support of the Consent Decree, neither plaintiff-intervenors nor HUD mentioned Section 213 or the City's HAP in connection with the Section 8 Certificates. Similarly, although the City filed extensive objections to the Consent Decree, those objections did not include any to the effect that if HUD awarded the MHA 175 Section 8 Certificates, it would violate Section 213 by providing housing assistance in excess of the HAP's three-year goals. The only objection by the City which was based on its HAP related to the "proportionality" requirement set forth in 24 C.F.R. § 570.306. The City contended that "[i]n effect, this regulation requires that housing assistance must be provided in accordance with the proportionate needs of the three different household types" as set forth in the area's HAP, City Mem. at p. 19, and that by providing housing only for families, with none for the elderly, the Consent Decree was inconsistent with the City's HAP and therefore should not be approved. Id. at pp. 18-20.
In reply, HUD contended that the City misunderstood the nature of the proportionality requirement contained in the regulations. HUD maintained that the requirement governed "only the planning of the City's goals to meet its housing needs [and did] not require HUD to disburse funding in the same proportion as the goals stated in a particular community's HAP." HUD Reply Mem. of March 1, 1984, at pp. 15-16. In addition, HUD suggested in passing that even if the City's interpretation of the regulation were accurate, HUD was in any case authorized to waive the regulation. Id. at p.17, n.8. Finally, HUD emphasized that the Decree did not require the City to exceed its three-year HAP goals. Id. at pp. 17-18.
This last point, if taken in isolation, lends support to HUD's current claim that the Consent Decree did not contemplate provision of the Section 8 Certificates as long as the City's current HAP remained in effect and unamended. When the whole of HUD's explanation is reviewed, however, the effect is just the opposite. HUD treated the issue of the City's three-year HAP goals as relevant only to the 200 public housing units to be provided under the Decree. HUD explained that the City "is obligated, under the terms of its CDBG grants, to a goal of 140 family units for the period 1982-85. This is exactly the number which the Consent Decree contemplates the City will support prior to the close of the program year ending on June 30, 1985. The remaining 60 units made available under the Decree are to be accommodated in the City's three-year HAP goal beginning in the following program years." HUD Reply Mem. of March 1, 1984, at pp. 17-18. No mention was made of the 175 Section 8 Certificates that were to be provided to the MHA. The reasonable conclusion to be drawn from this omission is that HUD did not consider the Section 8 Certificates to be housing units which required the City's support and thus which were subject to the limits set by the City in its three-year goals.
In the same vein, HUD's reply to the single objection by the City that was specific to the Decree's Section 8 Program reinforces the conclusion that HUD believed the City to have not involvement or necessary participation in the program. The City's objection was that the geographic limitations which the Decree imposed upon the used of the Certificates violates HUD regulations. HUD replied that since the City did not represent prospective applicants for the Certificates, and since "the certificates made available under the decree will be administered not by [a city agency] but by the [MHA], an independent agency," HUD Reply Mem. of March 1, 1984, at 14, the City "should not be heard to complain about this provision of the settlement." Id. Going on, nonetheless, to address the merits of the City's objection, HUD suggested that the Agency had considerable discretion in structuring Section 8 programs, and once again noted that the Secretary was, in any case, authorized, "for good cause, to waive any provision of the regulations dealing with the development of subsidized housing." Id. at 15.
In sum, both the language and the history of the Consent Decree belie HUD's present contention that the parties intended the approval of the MHA's Section 8 application to be conditioned upon a finding of consistency with the City's HAP. The Decree's Section 8 Program clearly was structured and presented to the Court as relief that could be provided expeditiously, and without the need for any action on the part of the City.
HUD's Present Ability to Approve the MHA's Section 8 Application
Whether HUD has the present ability to provide the relief it agreed to in the Consent Decree is another matter. As HUD correctly, though belatedly, points out, virtually all applications for federal housing assistance are subject to the requirements of Section 213. The exceptions are specifically enumerated, see 42 U.S.C. § 1439(b), and none is applicable here. The HUD cannot approve the MHA's Section 8 application if it finds the application to be inconsistent with ...