United States ex rel. Anti-Discrimination Ctr. of Metro N.Y., Inc. v. Westchester Cnty.

UNITED STATES OF AMERICA ex rel. ANTI-DISCRIMINATION CENTER OF METRO NEW YORK, INC., Plaintiff, v. WESTCHESTER COUNTY, NEW YORK, Defendant.

06 Civ. 2860 (DLC)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

June 27, 2016

OPINION AND ORDER

APPEARANCES:

For the U.S. Government:

David J. Kennedy

United States Attorney's Office

86 Chambers Street

New York, NY 10007

For Westchester County, New York:

Robert F. Meehan

Westchester County Attorney's Office

138 Martine Avenue, 6th Floor

White Plains, NY 10601

DENISE COTE, District Judge:

This dispute arises from a report of James E. Johnson ("Monitor") of March 17, 2016 ("Report"). That Report found that Westchester County, New York ("County") has violated ¶ 33(c) of the August 10, 2009 Consent Decree ("Consent Decree" or "Settlement") between the County and the United States Department of Justice ("DOJ" or "Government"). The Monitor attached to the Report transcripts of depositions of several County witnesses that were taken in 2015. The Government and the Monitor seek to make the videotapes of those depositions publicly available, and the County opposes their doing so. As described below, the County has breached ¶ 33(c) of the Settlement. The Government and the Monitor's application to release the videotapes of the depositions to the public is granted. The County's application for a stay of this Order pending appeal is also granted.

Background

The procedural history giving rise to this dispute has been described in several previous opinions issued by this Court and the Second Circuit Court of Appeals. See, e.g., United States ex rel. Anti-Discrimination Ctr. of Metro N.Y., Inc. v. Westchester Cnty., 495 F. Supp. 2d 375 (S.D.N.Y. 2007) (denying motion to dismiss False Claims Act lawsuit against the County); United States ex rel. Anti-Discrimination Ctr. of Metro N.Y., Inc. v. Westchester Cnty., 668 F. Supp. 2d 548 (S.D.N.Y. 2009) ("2009 Opinion") (finding that County's Certifications to obtain CPD Funds were false but reserving on County's scienter); U.S. ex rel. Anti-Discrimination Ctr. of Metro New York, Inc. v. Westchester Cnty., N.Y., No. 06cv2860 (DLC), 2012 WL 1574819 (S.D.N.Y. May 3, 2012) (adopting Monitor's conclusions in part and Magistrate Judge's opinions in part); United States ex rel. Anti-Discrimination Ctr. of Metro N.Y., Inc. v. Westchester Cnty., 712 F.3d 761 (2d Cir. 2013) ("2013 Appeal Opinion")(affirming holding that the County had breached promotion requirement); Cnty. of Westchester v. U.S. Dep't of Hous. & Urban Dev., No. 13cv2741 (DLC), 2013 WL 4400843 (S.D.N.Y. Aug. 14, 2013) (dismissing APA claims for lack of jurisdiction and statutory claim for pleading deficiency); Westchester v. U.S. Dep't of Hous. & Urban Dev., 778 F.3d 412 (2d Cir. 2015) (vacating in part 2013 Opinion and remanding on issue of jurisdiction); Cty. of Westchester v. U.S. Dep't of Hous. & Urban Dev., 116 F. Supp. 3d 251 (S.D.N.Y. 2015) ("2015 Opinion") (holding that HUD's administration of grant programs at issue was lawful); Cty. of Westchester v. U.S. Dep't of Hous. & Urban Dev., 802 F.3d 413, 418 (2d Cir. 2015) ("2015 Appeal Opinion") (affirming this Court's finding that HUD did not violate federal administrative law); United States ex rel. Anti-Discrimination Ctr. of Metro New York, Inc. v. Westchester Cty., No. 06cv2860 (DLC), 2016 WL 3004662 (S.D.N.Y. May 24, 2016) ("2016 Opinion") (finding principally that the County met its 2014 "financing in place" benchmark and that the County breached ¶ 7(i)-(j) of the Settlement). The Court assumes familiarity with those Opinions. Only the facts necessary to resolve the present dispute are described below.

A. False Claims Act Litigation and the 2009 Consent Decree

This litigation began in 2006 when the Anti-Discrimination Center of Metro New York, Inc. ("ADC") sued the County as a quitam relator under the False Claims Act ("FCA"), 31 U.S.C. § 3729 et seq. ADC claimed that the County received more than $52 million from the federal government for housing and community development after falsely certifying that it affirmatively furthered fair housing ("AFFH"). In the 2009 Opinion, the Court ruled that the County's certifications to HUD were false as a matter of law. 668 F. Supp. 2d at 571. The Government intervened after the 2009 Opinion was issued but before the remaining issues in the case were tried, and the County entered into a Consent Decree with the United States Department of Housing and Urban Development ("HUD") on August 10, 2009.

The Consent Decree consists of thirty-eight pages. In executing the Settlement, the County assumed many obligations. The County is required to spend approximately $51,600,000 as a remedy for violating the False Claims Act. As described in detail in the 2016 Opinion, the Consent Decree also requires the County to ensure the development of 750 new affordable housing units. Settlement ¶¶ 7, 23. Paragraph 7 makes it clear that the 750 new units are meant both to increase access to affordable housing and to improve racial diversity in the County. To that end, ¶ 7 requires that the units meet certain locational criteria. For example, ¶ 7(a)(i) requires that 630 units be in municipalities that have a "single race African-American only" population of less than 3% and a Hispanicpopulation of less than 7%. See 2016 Opinion, 2016 WL 3004662, at *2. Thus, most of the affordable units must be developed in areas with populations that are overwhelmingly white, signifying that a key goal of the Settlement is to increase the County's racial diversity.¹ The Consent Decree further provides that a Monitor be appointed to ensure the County's compliance with its terms. Settlement ¶¶ 9-10.

Three other provisions of the Settlement are particularly pertinent to the current dispute. The Consent Decree requires that the County submit to HUD an acceptable analysis of impediments to fair housing choice ("AI"). Paragraph 32 of the Settlement provides that the "County shall complete, within one hundred twenty (120) calendar days of the entry of this [ConsentDecree], an AI within its jurisdiction that complies with the guidance in HUD's Fair Housing Planning Guide." Further, the "AI must be deemed acceptable by HUD. The County shall take all actions identified in the AI." Settlement ¶ 32. The County was required to include the following in the AI:

(1) A commitment "to collecting data and undertaking other actions necessary to facilitate the implementation of this [Consent Decree]" (¶ 32(a));

(2) Identify and analyze, inter alia:

a. "the impediments to fair housing within its jurisdiction, including impediments based on race or municipal resistance to the development of affordable housing" (¶ 32(b)(i));

b. "the appropriate actions the County will take to address and overcome the effects of those impediments" (¶ 32(b)(ii)); and

c. "the potential need for mobility counseling, and the steps the County will take to provide such counseling as needed." (32(b)(iii)).

Second, ¶ 33 of the Settlement requires the County to undertake a series of specific activities addressed to public opinion about affordable housing and racial diversity as well as marketing of affordable housing units. Specifically, ¶ 33(c) of the Settlement provides that:

As part of its additional obligations to AFFH, the County also shall . . . (c) create and fund campaigns to broaden support for fair housing and to promote the fair and equitable distribution of affordable housing in all communities, including public outreach specifically addressing the benefits of mixed-income housing and racially and ethnically integrated communities.

Paragraph 33(h) provides that the County must "pay for consultants and public education, outreach, and advertising toAFFH, as described in this paragraph, out of County resources and [Community Development Block Grant ("CDBG")] funds over five years . . . in an amount not less than [$400,000]."²

Third, there are provisions of the Consent Decree that require the County to take legal action against municipalities under certain circumstances. As discussed in detail in the 2016 Opinion, 2016 WL 3004662, at *3, *16-*18, ¶ 7(j) of the Consent Decree imposes on the County certain obligations that are triggered by municipal inaction or resistance to developing new affordable housing units that are part of the 750-unit requirement. In circumstances where a municipality "does not take actions needed to promote the objectives of this paragraph, or undertakes actions that hinder the objectives of this paragraph, the County shall use all available means as appropriate to address such action or inaction." This may include "pursuing legal action." Paragraph 7(j) also provides that the "County shall initiate such legal action as appropriate to accomplish the purpose of this [Settlement] to AFFH."³Similarly, ¶ 15 of the Settlement governs the Monitor's biennial assessments of the County's compliance with the Settlement. In making these assessments, the "Monitor may consider any information appropriate to determine whether the County has taken all possible actions to meet its obligations . . . including, but not limited to, . . . if necessary, taking legal action."⁴

It has been nearly seven years since the County agreed to submit an acceptable AI to HUD, and it failed to fulfill this obligation. The 2011, 2013, and 2015 litigation surrounding the County's series of attempts to submit an acceptable AI is chronicled in detail in the 2015 Appeal Opinion, 802 F.3d at 420-27. For the purposes of this Opinion, it is sufficient to emphasize that the County failed to comply with HUD's requirements for a successful AI, in part by relying on "inaccurate data, conduct[ing] flawed analysis concerning whether zoning laws within the County were exclusionary, and fail[ing] to propose strategies for overcoming exclusionary zoning laws in certain municipalities." Id. at 425. As aresult, the County has already lost access to approximately $25 million in funding from various...