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United States of America, Ex Rel. v. Westchester County

March 16, 2012


The opinion of the court was delivered by: Gabriel W. Gorenstein, United States Magistrate Judge


Westchester County ("the County") and the Government presented certain disputes to a special master appointed to oversee the implementation of the settlement that resolved this action. The special master issued a report and recommendation regarding the disputes. See Monitor's Report and Recommendation Regarding Dispute Resolution, filed Nov. 14, 2011 (Docket # 383) ("Report"). The County now objects to the special master's Report.*fn1 For the reasons stated below, the County's objections are sustained in part and overruled in part.


In 2006, the Anti-Discrimination Center of Metro New York, Inc. filed this lawsuit under the False Claims Act, 31 U.S.C. § 3729, as a qui tam relator to the United States alleging that the County had made false statements to obtain funding from the United States Department of Housing and Urban Development ("HUD"). Eventually, the United States intervened in the action, see Complaint-in-Intervention of the United States of America, filed Aug. 10, 2009 (Docket # 324), and submitted a stipulation settling the case, which the district court entered on August 9, 2009, see Stipulation and Order of Settlement and Dismissal, filed Aug. 10, 2009 (Docket # 320) (the "Settlement").

The Settlement obligates the County to take a number of actions that "affirmatively further fair housing" within the County, including the construction of affordable housing units. Settlement ¶¶ 7--8. It also authorizes a court-appointed special master -- referred to as the "Monitor" -- to, inter alia, review the parties' compliance with the consent decree and make recommendations that will ensure compliance. Id. ¶¶ 9-13. The Monitor's powers include the authority to resolve any disputes between the County and the Government relating to the Settlement. See id. ¶ 14. The Monitor's report and recommendation as to a given dispute is a final determination of the matter unless a party seeks additional review by presenting objections within ten business days to the magistrate judge assigned to this case. See id. ¶¶ 14(c)--(d).

The issues before this Court concern (1) the County's obligation to "promote . . . legislation . . . to ban 'source-of-income' discrimination in housing," id. ¶ 33(g); (2) the County's obligations with respect to zoning practices of municipalities within the County; and (3) whether the Monitor erred in refusing to resolve a dispute between the County and HUD. The Settlement provides that this Court's review of a report and recommendation of the Monitor is governed by "the relevant provisions of the Federal Rules of Civil Procedure, the Local Rules and the Court's Individual Rules." Id. ¶ 14(d). The parties agree that the standard of review is de novo. See Gov. Mem. at 7; Cnty. Mem. at 2; 28 U.S.C. § 636(b)(1).


Courts construe consent decrees, such as the Settlement here, "according to the general interpretive principles of contract law." Mastrovincenzo v. City of New York, 435 F.3d 78, 103 (2d Cir. 2006) (citation omitted). The primary objective of a court interpreting such agreements is to "give effect to the intent of the parties as revealed by the language they chose to use." Seiden Assocs., Inc. v. ANC Holdings, Inc., 959 F.2d 425, 428 (2d Cir. 1992) (citing Slatt v. Slatt, 64 N.Y.2d 966, 967 (1985)).

"The threshold question in a dispute over the meaning of a contract is whether the contract terms are ambiguous." Revson v. Cinque & Cinque, P.C., 221 F.3d 59, 66 (2d Cir. 2000); accord Parks Real Estate Purchasing Grp. v. St. Paul Fire & Marine Ins. Co., 472 F.3d 33, 42 (2d Cir. 2006) ("Whether a contract is ambiguous, however, is a 'threshold question of law to be determined by the court.'") (quoting Duane Reade, Inc. v. St. Paul Fire & Marine Ins. Co., 411 F.3d 384, 390 (2d Cir. 2005)). The meaning of an unambiguous settlement agreement "is a question of law for the court to decide," Revson, 221 F.3d at 66 (citing K. Bell & Assocs. v. Lloyd's Underwriters, 97 F.3d 632, 637 (2d Cir. 1996)), and is determined solely by reference to the "four corners of the agreement," Abundance Partners LP v. Quamtel, Inc., 2012 WL 32350, at *8 (S.D.N.Y. Jan. 5, 2012). The meaning of an ambiguous agreement is a question of fact to be determined by the factfinder where extrinsic evidence exists to guide the interpretation of the parties' intentions. Revson, 221 F.3d at 66 (citing cases). However, the meaning of an ambiguous agreement as to which no extrinsic evidence exists is a question of law to be determined solely by the court. Id. (citing cases).

A court interpreting a consent decree must read the language selected for its "plain meaning" and according to the chosen words' "normal usage." Mastrovincenzo, 435 F.3d at 103 (quoting City of Hartford v. Chase, 942 F.2d 130, 134--35 (2d Cir. 1991)). Where possible, a consent decree's terms should be read so as not to render any provision superfluous or meaningless. See Galli v. Metz, 973 F.2d 145, 149 (2d Cir. 1992). Additionally, "the language of a consent decree must dictate what a party is required to do and what it must refrain from doing." Perez v. Danbury Hosp., 347 F.3d 419, 424 (2d Cir. 2003) (citing United States v. O'Rourke, 943 F.2d 180, 187 (2d Cir. 1991)). The scope of the obligations a consent decree imposes on its signatories should be given a "narrow construction," id., and "must be discerned within its four corners, . . . not by reference to what might satisfy the purposes of one of the parties to it," id. (quoting United States v. Armour & Co., 402 U.S. 673, 682 (1971)). Therefore, "courts must abide by the express terms of a consent decree and may not impose supplementary obligations on the parties even to fulfill the purposes of the decree more effectively." Id. (citing cases). This prohibition on imposing additional obligations applies "no matter how much of an improvement it would make in effectuating the decree's goals." Id. (quoting United States v. Int'l Bhd. of Teamsters, 998 F.2d 1101, 1107 (2d Cir. 1993)).


Three issues have been presented to this Court for resolution: (1) whether the Settlement obligated the County Executive to sign legislation banning housing discrimination on the basis of a tenant's source of income; (2) whether the Monitor could properly require the County to state its intentions with respect to the potential need to challenge zoning policies of municipalities in Westchester; and (3) whether the Monitor erred by refusing to resolve a dispute between the County and HUD. We address each separately.

A. Source-of-Income Legislation

1. Background

To interpret the language of the Consent Decree, we begin by reviewing the decree overall, as it provides some context for the specific language at issue. The Settlement requires the County to pay $30 million to the United States, of which the United States agreed to credit $21.6 million into the County's account with HUD for the development of new affordable housing units. Settlement ¶¶ 2--3. The Settlement also requires the County to "ensure the development of" 750 new affordable housing units, id. ¶ 7; to develop an implementation plan for doing so, id. ¶ 18; to amend its "Long Range Land Use Planning Policies," id. ¶ 27; to adopt a policy statement favoring fair housing, id. ¶ 31; and to complete an "analysis of the impediments to fair housing choice" ("AI") acceptable to HUD and take all actions identified in the AI, id. ¶ 32.

Paragraph 33 of the Settlement contains the obligation with respect to source-of-income legislation. That paragraph imposes a number of additional obligations on the County, including the obligation to solicit proposals from community leaders and public interest groups for community development block grants that would further fair housing, id. ¶ 33(a); to advertise fair housing rights, id. ¶ 33(b); to create and fund pro-fair housing campaigns, id. ¶ 33(c); to educate realtors and others regarding fair housing, id. ¶ 33(d); to affirmatively market affordable housing, id. ¶ 33(e); and to pay for consultants and public education, outreach, and advertising regarding fair housing, id. ¶ 33(h). Included in paragraph 33 is the following obligation:

As part of its additional obligations to [affirmatively further fair housing], the County also shall . . . promote, through the County Executive, legislation currently before the Board of Legislators to ban "source-of-income" discrimination in housing.

Id. ¶ 33(g).

On the date the Settlement was entered by the district court, August 10, 2009, legislation to ban source-of-income discrimination in housing was pending before the County's Board of Legislators ("BOL"). See Report at 2--3. In October 2009, the County Executive at that time, Andrew J. Spano, wrote to the leadership of the BOL urging passage. Id. at 3. In November 2009, he also wrote letters to five housing advocacy organizations urging them to support and advocate for the legislation. Id. Although the 2009 bill failed to pass and expired at the close of the 2009 legislative session, the bill was reintroduced in the subsequent legislative session on January 19, 2010. Id. On June 14, 2010, the BOL passed legislation banning source-of-income discrimination in housing, the terms of which differed from the bill that had been introduced in 2009. See id. at 4. County Executive ...

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