On April 12, 2006, the Anti-Discrimination Center of Metro New York ("ADC") filed this lawsuit under the False Claims Act against Westchester County in the United States District Court, Southern District of New York. In False Claims Act cases, sometimes called "qui tam" actions, the private instigator of the case is called the "relator"; the plaintiff is technically the United States, and the relator seeks damages because of harm caused to the United States; by statute, those damages go mostly the federal government with the relator keeping a share. Represented by the law firm Relman & Dane, ADC asked the Court for monetary and injunctive relief, claiming that Westchester County, in violation of the False Claims Act, falsely certified that it was in compliance with certain provisions of the Fair Housing and Community Development Acts, resulting in over $45 million in damages to the United States. As normally occurs in False Claims Act cases, the complaint was filed under seal, to give the U.S. time to review it and decide whether to join in the litigation. This was the first case ever in which fair housing litigation was conducted via a False Claims Act case. The U.S. initially declined to intervene, and the complaint was unsealed and served on Westchester in January 2007.
ADC claimed that between 2000 and 2006, the County falsely certified that the County had affirmatively furthered fair housing. The suit alleged that the County failed to analyze impediments to fair housing choice based on race or municipal resistance, and chose not to take appropriate steps to overcome such impediments.
The County moved to dismiss, but the Court (Judge Denise L. Cote) rejected that motion in July 2007. 495 F.Supp.2d 375 (S.D.N.Y. 2007). After discovery, in February 2009, Judge Cote granted partial summary judgment for ADC, 668 F.Supp.2d 548 (S.D.N.Y. 2009). The Court found that the County had not analyzed the racial impact of various practices as it claimed it had, and had thereby submitted false certifications to the Department of Housing and Urban Development ("HUD"). Since the County had submitted false certifications to receive approximately $52 million from HUD, it was liable for over $150 million in damages pursuant to the treble damages provision of the FCA. A trial was scheduled to determine whether the violation had been willful.
In April 2009 (under the new Obama administration) the U.S. changed its mind as to intervention. It intervened and elected to proceed with this action, filing its own complaint on August 10, 2009. The Government's complaint alleged violations of the FCA and of the Housing and Community Development Act. Simultaneously, the Government submitted an executed settlement of the litigation, agreeable to all parties. Under the settlement, the County agreed to spend $52 million to develop new affordable housing in white municipalities of the County, and also to pay $7.5 million as a relator's share to the ADC, and $2.5 million in attorney's fees.
In addition, the settlement required Westchester to: 1) adopt as its policy the elimination of residential segregation, and to implement the settlement in a way that develops housing on those Census blocks that currently have the lowest concentrations of African‐Americans and Latinos, 2) take legal action against resistant municipalities where needed to fulfill the affirmatively furthering fair housing purposes of the settlement, and 3) conduct a new analysis of impediments to fair housing choice that examines barriers based on race or on municipal resistance. The agreement included penalty provisions for non‐compliance. In addition, performance of the obligations was to be done by an independent monitor, and the parties agreed that the Court would retain jurisdiction over the case.
On July 13, 2011, HUD notified the County that it had failed to meet a consent decree requirement when the County Executive vetoed legislation to incorporate corrective actions which promote source-of-income legislation and plans to overcome exclusionary zoning practices. On November 17, 2011, the Monitor submitted a report stating that Defendant breached its obligation in the consent decree. The County formally objected this determination to Magistrate Judge Gabriel W. Gorenstein on December 7, 2011. Magistrate Judge Gorenstein sustained the County's objection, concluding that it did not violate its duty to promote source-of-income legislation. The U.S. then filed an objection with the district court, seeking review of the Magistrate Judge's decision.
On May 3, 2012, the District Court Judge Cote overruled the Magistrate Judge's opinion, and adopted all sections of the Monitor's original report. 2012 WL 1574819 (S.D.N.Y. 2012). On May 15, 2012, the County filed a Notice of Appeal with the United States Court of Appeals. Defendant moved for a stay during appeal, but Judge Cote denied that motion on May 17, 2012. On May 29, 2013, the Court of Appeals (Judge Rosemary S. Pooler) affirmed the District Court decision, agreeing that the defendant violated the terms of the consent decree, and allowing the full adoption of the Monitor's Report. 712 F.3d 761 (2nd Cir. 2013).
This case is still ongoing and the monitor continues to file reports regarding compliance with the consent decree. Dan Osher - 06/28/2013
Asma Husain - 02/14/2016