United States Ex Rel. Anti-Discrimination Center of Metro New York, Inc. v. Westchester County

712 F.3d 761, 2013 WL 1352537, 2013 U.S. App. LEXIS 6965
CourtCourt of Appeals for the Second Circuit
DecidedApril 5, 2013
DocketDocket 12-2047-cv
StatusPublished
Cited by25 cases

This text of 712 F.3d 761 (United States Ex Rel. Anti-Discrimination Center of Metro New York, Inc. v. Westchester County) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Ex Rel. Anti-Discrimination Center of Metro New York, Inc. v. Westchester County, 712 F.3d 761, 2013 WL 1352537, 2013 U.S. App. LEXIS 6965 (2d Cir. 2013).

Opinion

POOLER, Circuit Judge:

Westchester County (“the County”) appeals from a judgment of the United States District Court for the Southern District of New York (Denise Cote, J.) finding the County in violation of its duty to promote source-of-income legislation under a Stipulation and Order of Settlement and Dismissal (“consent decree”) entered into by the County with the United States to resolve a qui tam action initially brought by relator, the Anti-Discrimination Center of Metro New York, Inc. (“ADC”), under the False Claims Act alleging the submis *765 sion of false claims by the County to the United States Department of Housing and Urban Development (“HUD”) in order to obtain federal grant monies for fair housing. We hold that the district court indeed had jurisdiction to review the decision of the reviewing magistrate judge under the consent decree. We further hold that the County violated the terms of the consent decree.

BACKGROUND

I.

In April 2006, the ADC brought a qui tam action against the County under the False Claims Act, 31 U.S.C. §§ 3729-33. The action charged that from 2000 through 2006, the County submitted false claims to HUD in order to obtain millions of dollars in funds that were required, under 42 U.S.C. § 5304(b)(2), to be used to “affirmatively further fair housing.” HUD regulations require grantees, as part of the requirement to affirmatively further fair housing, to consider the existence and impact of racial discrimination in analyzing the barriers to housing opportunities in their areas as a condition to receive these federal funds. See 24 C.F.R. §§ 91.425, 570.601; 1 Office of Fair Hous. & Equal Opportunity, U.S. Dep’t of Hous. & Urban Dev., Fair Housing Planning Guide 2-7 to -8; 2-16 to -17 (1996), available at www.hud.gov/offices/fheo/images/fhpg.pdf; see also Exec. Order No. 11,063, 27 Fed. Reg. 11,527 (Nov. 20, 1962). The ADC contended that the County failed to comply with HUD regulations but nonetheless certified its compliance with the grant requirements. In initial proceedings before the district court, the court ruled that the County was obligated to consider race in connection with its certification to HUD, United States ex rel. Anti-Discrimination Ctr. of Metro N.Y., Inc. v. Westchester Cnty., 495 F.Supp.2d 375, 376 (S.D.N.Y. 2007), and that the County’s certifications to HUD were false as a matter of law, United States ex rel. Anti-Discrimination Ctr. of Metro N.Y., Inc. v. Westchester Cnty., 668 F.Supp.2d 548, 562-65 (S.D.N.Y.2009).

In August 2009, the United States intervened and, on the same day, presented the court with a consent decree to which all the parties had agreed. The consent decree obligated the County to pay $30 million to the United States, $21.6 million of which would be credited to the County’s HUD account to fund fair housing, and pay $2.5 million to the ADC as relator. The County also made various commitments to affirmatively further fair housing and to eliminate discrimination in housing opportunities. The County’s exposure under the False Claims Act would have been $156 million — treble damages based on $52 million in false claims. See 31 U.S.C. § 3729(a)(1). In order to ensure compliance with the consent decree, the district court appointed James E. Johnson of De-bevoise & Plimpton to serve as Monitor, authorized to oversee the steps taken by the County to affirmatively further fair housing as contemplated by the consent decree. The Monitor was charged with reviewing the County’s actions, recommending additional actions needed to ensure compliance, and to resolve disputes between the United States and the County. The dispute resolution provision of the consent decree reads:

Within ten (10) business days of receipt of the Monitor’s report and recommendation, the County or the Government may seek additional review from the magistrate judge assigned to this case; otherwise, the Monitor’s resolution shall be final, binding and non-appealable. Should the County or the Government seek such additional review from the assigned magistrate judge, the relevant *766 provisions of the Federal Rules of Civil Procedure, the Local Rules and the Court’s Individual Rules governing reports and recommendations from a magistrate judge shall apply.

As part of the County’s obligation to affirmatively further fair housing, the County agreed to, among other things, “promote, through the County Executive, legislation currently before the Board of Legislators to ban ‘source-of-income’ discrimination in housing.” Source-of-income legislation bans housing discrimination based upon an individual’s source of income, primarily whether an individual’s lawful income comes in the form of Social Security benefits or any form of state or federal public assistance, including Section 8 vouchers.

In 2009, as recognized by the consent decree, the County Board of Legislators was considering the passage of source-of-income legislation. Following the County’s commitment to the consent decree, the County Executive at the time, Andrew Spano, sent five brief letters to advocacy organizations expressing his hope that they would continue the work in which they were already engaged in advocating for the legislation. Spano also sent a letter to the leadership of the Board of Legislators encouraging enactment of the legislation. The legislation was not approved by the Board by the end of the 2009 legislative session, but it was reintroduced in 2010 in a form identical to the legislation pending when the consent decree was ratified at the Board of Legislators. The Board passed the source-of-income legislation in June 2010. The version passed by the Board contained three alterations made throughout the legislative process that rendered the passed legislation less protective against source-of-income discrimination than the initial version had been: It (1) removed “court-ordered payments” and “inheritance, annuities, pensions, and child and spousal support” from the definition of source of income, (2) set a monetary penalty of $50,000 for wanton, willful or malicious discrimination, while previous versions set the penalty at $50,000 for discrimination and $100,000 for wanton, willful or malicious discrimination, and (3) exempted cooperative apartments and condominiums. It is undisputed that, at the reintroduction of the legislation in January 2010, newly elected County Executive Robert Astorino took no steps to promote the legislation and subsequently vetoed the amended version on June 25, 2010.

Per the consent decree, on July 11, 2011, the County submitted its revised Analysis of Impediments (“AI”) plan to HUD.

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712 F.3d 761, 2013 WL 1352537, 2013 U.S. App. LEXIS 6965, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-ex-rel-anti-discrimination-center-of-metro-new-york-inc-v-ca2-2013.