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United States of America Ex Rel v. Westchester County

January 4, 2012


The opinion of the court was delivered by: Denise Cote, District Judge:


The Court exercises continued jurisdiction over this action pursuant to a consent decree between the United States ("the Government") and Westchester County, New York ("Westchester" or "the County"). The Anti-Discrimination Center of Metro New York, Inc. ("ADC") has moved to intervene, for the stated purpose of "enforcing" that consent decree. For the following reasons, ADC's motion is denied.


I. The False Claims Act Litigation ADC is a non-profit organization that advocates for policies to combat discrimination in housing, employment, education, and public accommodation. In 2006, ADC brought suit as relator for the Government against Westchester, alleging that Westchester violated the False Claims Act, 31 U.S.C. § 3729, et seq. ("FCA"), through certifications made to the Secretary of Housing and Urban Development ("HUD") between April 2000 and April 2006 to obtain over $52 million in federal funding for housing and community development. In essence, Westchester had successfully applied for HUD Community Development Block Grants ("CDBG"), and in doing so had certified to HUD that it was affirmatively furthering fair housing ("AFFH"), see 42 U.S.C. §§ 5304(b)(2), 12705(b). In order to fulfill its obligation to AFFH, however, Westchester was required to perform an analysis of impediments ("AI") to fair housing in its jurisdiction, taking into account the impact of race on housing opportunities and choice, and to take appropriate action to overcome the effects of those impediments.

On February 24, 2009, the Court granted partial summary judgment to ADC, finding that Westchester had falsely certified to HUD that it was fulfilling its commitment to AFFH while failing to analyze impediments to fair housing in the County related to race. See United States ex rel. Anti-Discrimination Center of Metro New York, Inc. v. Westchester County, 668 F.Supp.2d 548, 561-63 (S.D.N.Y. 2009). Both ADC's and Westchester's summary judgment motions were denied, however, on the issue of whether the County had knowingly submitted false certifications to HUD. Id. at 567-68. A trial date was set. On May 5, the trial date was adjourned after the Court was informed that the Government, ADC, and Westchester had memorialized the framework for a settlement of claims against the County.

On August 10, 2009, the Government exercised its statutory right, see 31 U.S.C. § 3730(c)(3), and filed its complaint in intervention. Alongside its FCA claims, the Government alleged violations of the Housing and Community Development Act ("HCDA"), 42 U.S.C. § 5301 et seq., seeking mandatory and injunctive relief against Westchester. At the same time, the Government submitted two settlement stipulations. The first, a consent decree between the Government and the County (the "Consent Decree"), dismissed the FCA claims against the County. The ADC is not a party to the Consent Decree. The second settlement stipulation, entitled "Stipulation and Order of Settlement of Relator's Share and Release" ("ADC Release"), was between the Government and the ADC. In the ADC Release, the ADC accepted a relator's award of $7.5 million, agreed that the Consent Decree was "fair, adequate, and reasonable," and released the Government from claims relating to the allegations in the ADC's FCA complaint.

II. The Consent Decree The Consent Decree established a framework for ensuring that the County would comply with its obligations under the Fair Housing Act to AFFH. This Court has retained jurisdiction over the Consent Decree and the parties to it, including any application to enforce provisions of the Consent Decree. Under the Consent Decree, the County agreed to pay $30 million to the Government to settle the monetary claims against it under the FCA. Of that amount, $21.6 million would be deposited in the County's account with HUD, to be made available to the County for the development, consistent with the terms of the Consent Decree, of new affordable housing units that will AFFH in the County. Westchester agreed to pay ADC $2.5 million as expenses, attorney's fees, and costs in full settlement of the ADC's qui tam claims against the County.

The County also undertook to allocate an additional $30 million for fiscal years 2009 through 2014 to comply with the Consent Decree. The core provision of the injunctive relief set forth in the Consent Decree is Westchester's commitment to develop at least 750 new affordable housing units in areas of the County with low black and Hispanic populations ("the Affordable AFFH units") in the seven years following the entry of the Consent Decree. The County "shall use all available means as appropriate" to develop the Affordable AFFH units, and, [i]n the event that a municipality does not take actions needed to promote the objectives of [the commitment to develop the Affordable AFFH units], or undertakes actions that hinder the[se] objectives . . . the County shall use all available means as appropriate to address such action or inaction, including . . . pursuing legal action.

The Consent Decree provides for the appointment of a monitor (the "Monitor") to review the County's progress toward the Consent Decree's benchmarks, and to take steps as necessary to ensure compliance. The Monitor's powers include the authority to review County actions for compliance with the Consent Decree, to recommend additional actions the County should take to ensure compliance, and to resolve disputes between the Government and Westchester regarding the implementation of the Consent Decree.*fn1 The Consent Decree provides for monetary sanctions against the County in the event the County does not fulfill its obligation to develop the Affordable AFFH units as specified in the Consent Decree, or fails to meet interim benchmarks. The Monitor is given discretion to waive or alter the imposition of these penalties. From August 10, 2009, James E. Johnson has served as the Monitor.

The Consent Decree requires that the County submit, within 120 days of entry of the Consent Decree, an implementation plan ("IP") detailing with specificity how the County intends to implement its commitment to develop the Affordable AFFH units. The Monitor must review the proposed IP, and "in the Monitor's discretion . . . accept or reject the proposed plan." If the IP is rejected, the Consent Decree provides for an additional period where the County must seek to cure its IP in response to the deficiencies identified by the Monitor. Then, "[i]n the event that the Monitor deems the revised plan submitted by the County insufficient to accomplish the objectives and terms set forth in [the Consent Decree], the Monitor shall specify revisions or additional items that the County shall incorporate into its [IP]." The County's IP must include a "model ordinance" that the County will promote to municipalities to advance fair housing by ensuring that new development projects include affordable units and are marketed to minority communities.

The Consent Decree also requires that the County complete an AI compliant with HUD's Fair Housing Planning Guide. The AI must be deemed acceptable by HUD. The County must then take all actions identified in its AI.

Commencing on December 31, 2011, the Monitor must complete a biennial report assessing the County's efforts and progress to meet its commitments under the Consent Decree. As part of the report's assessment of the County's record of compliance, the Monitor may consider any information appropriate to determine whether the County has taken all possible actions to meet its obligations . . . including . . . exploring all opportunities to leverage funds for the development of Affordable AFFH Units, promoting inclusionary and other appropriate zoning by municipalities by offering incentives, and, if necessary, taking legal action.

III. Implementation of the Consent Decree The County has thus far failed to develop an IP acceptable to the Monitor or submit an AI acceptable to HUD. After being granted an extension, as permitted under the Consent Decree, the County submitted its first IP to the Monitor and HUD on January 29, 2010 ("the January 2010 IP"). The Monitor found the January 2010 IP to be unacceptable, lacking "specificity with respect to accountability, timeframes, and processes." The County's revised IP, submitted on March 12, 2010, was also rejected by the Monitor. The County submitted its second revised IP on August 9, 2010 ("the August 2010 IP"). In October 2010, the Monitor approved the "model ordinance" contained in the August 2010 IP, but, pursuant to the Consent Decree, the Monitor undertook to direct revisions to the August 2010 IP to render it compliant. In late 2010, the Monitor "established an approach to develop and complete the IP's remaining components [involving] obtaining input from major Stakeholders in the [Consent Decree], not just the parties." That process remains ongoing.

The County's AI submissions have been rejected on repeated occasions by HUD.*fn2 The most recent rejection of the County's AI occurred on July 13, 2011, when HUD rejected the County's June 13 revised AI submission ("the June 2011 AI"). In particular, HUD found that the County had not passed legislation against source-of-income discrimination ("Source of Income Legislation"), as the Consent Decree required it to do, and that the ...

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