U.S. v. Westchester County, N.Y.

• Decision Date: 24 February 2009
• Docket Number: No. 06 Civ. 2860 (DLC).,06 Civ. 2860 (DLC).
• Citation: 668 F.Supp.2d 548
• Parties: UNITED STATES of America ex rel. ANTI-DISCRIMINATION CENTER OF METRO NEW YORK, INC., Plaintiff, v. WESTCHESTER COUNTY, NEW YORK, Defendant.
• Court: U.S. District Court — Southern District of New York

668 F.Supp.2d 548

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

No. 06 Civ. 2860 (DLC).

United States District Court, S.D. New York.

February 24, 2009.

COPYRIGHT MATERIAL OMITTED

Michael Allen, Stephen M. Dane, John P. Relman, Relman & Dane, PLLC, Washington, DC, for Plaintiff/Relator.

Stuart M. Gerson, Michael A. Kalish, Carrie Corcoran, Epstein Becker & Green, P.C., New York, NY, for Defendant.

OPINION & ORDER

DENISE COTE, District Judge:

The Anti-Discrimination Center of Metro New York, Inc. ("ADC") has brought suit as relator for the United States of America against Westchester County, New York ("Westchester" or the "County"), 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. On July 13, 2007, this Court denied the County's motion to dismiss, rejecting its contention that it had no legal obligation to consider race when it analyzed impediments to fair housing in connection with its certifications. The Court held that a grantee that certifies to the federal government that it will affirmatively further fair housing as a condition to its receipt of federal funds must analyze "the existence and impact of race discrimination on housing opportunities and choice in its jurisdiction." United States ex rel. Anti-Discrimination Center of Metro New York, Inc. v. Westchester Cty., 495 F.Supp.2d 375, 376 (2007).¹

Discovery having been completed, the ADC has now brought a motion for partial summary judgment, contending that there is no genuine issue of material fact that the County knowingly submitted false certifications that it would affirmatively further fair housing ("AFFH") by, inter alia, failing to analyze impediments to fair housing choice within the County in terms of race. The County has filed a cross-motion for summary judgment, arguing that it did properly analyze race, and that even if its certifications were false in that regard, it did not make them with the requisite knowledge for liability to be imposed under the FCA. Those motions were fully submitted on November 14, 2008. For the following reasons, ADC's motion for partial summary judgment is granted in part and denied in part, and the County's motion for summary judgment is denied in full.

Before describing the evidentiary record created through this motion practice and the legal analysis of the ADC's FCA claims, a brief summary of the parties' contentions is in order. ADC contends that Westchester is a racially segregated county, and that to obtain the HUD funds at issue here the County had to analyze and record its analysis of the impediments to fair housing choice, and then take appropriate actions to overcome those impediments and also record those actions. ADC contends that, despite certifying to the federal government that it had taken each of these steps, the County did none of these things, instead focusing exclusively on obtaining federal funds to increase the stock of affordable housing within the County, and ignoring the fact that its actions were increasing patterns of segregation. ADC identifies several tactics that it contends the County could have (and should have) utilized to reduce the barriers to fair housing choice based on race within its jurisdiction.

The County has taken a variety of tacks in defending these charges. In addition to disputing that it was required to analyze race when analyzing impediments to fair housing choice, it contends principally that in any event it did analyze race, determined that racial segregation and discrimination were not significant barriers to fair housing choice, and concluded that the most pressing impediment to fair housing was the lack of affordable housing stock. It argues that it did an outstanding job in increasing the stock of affordable housing within the County, and that this litigation represents little more than a policy dispute over the most effective means for addressing local government resistance to integration and affordable housing. The County has adopted a policy of cooperation with municipalities, in light of what it terms "political reality" and due to its belief that cooperation is the most productive avenue for increasing the stock of affordable housing in the County.

BACKGROUND

The undisputed facts of record, or, where disputed, taken in the light most favorable to the County, establish the following.

A. Statutory and Regulatory Framework

Westchester County is comprised of 45 municipal entities. All of the municipalities are part of the Westchester Urban County Consortium ("Consortium"), except for the municipalities of Mount Pleasant, Mount Vernon, New Rochelle, White Plains, and Yonkers. The County applied to HUD for federal funding, including Community Development Block Grants ("CDBG"), on behalf of itself and the Consortium each year from April 1, 2000 to April 1, 2006 ("the false claims period").²

The United States grants housing and community development-related funding to state and local entities. In order to receive certain federal funding, including CDBG funds, the County was required to certify that it would meet a variety of fair housing obligations, including that the County would AFFH. Specifically, grant recipients are required to make certifications to HUD that, inter alia, "the grant will be conducted and administered in conformity with the Civil Rights Act of 1964 and the Fair Housing Act, and the grantee will affirmatively further fair housing." 42 U.S.C. § 5304(b)(2). To AFFH, the County was required to undertake three tasks: to "conduct an analysis of impediments to fair housing choice within the area, take appropriate actions to overcome the effects of any impediments identified through that analysis, and maintain records reflecting the analysis and actions in this regard." 24 C.F.R. § 91.425(a)(1)(i), see also id. § 570.601(a)(2). It is undisputed that the County was aware of its AFFH obligations during the false claims period, and that the County made claims for payments of grant funds from the United States during the period.

Westchester entered into Cooperation Agreements with municipalities participating in the Consortium. The agreements pertained to, inter alia, CDBG grants, and provided that

the County is prohibited from expending community development block grant funds for activities in or in support of any local government that does not affirmatively further fair housing within its jurisdiction or that impedes the County's action to comply with its fair housing certifications.

These Cooperation Agreements were submitted to HUD every three years.

B. The Requirement to Consider Race

As set forth more fully in Anti-Discrimination Center, 495 F.Supp.2d at 387-89, the statutory and regulatory framework set forth above—in requiring the grantee of funds to certify that the grant will be "conducted and administered" in conformity with the Civil Rights Act of 1964 and the Fair Housing Act ("FHA"), and to certify that the grantee will AFFH—requires the grantee to analyze the impact of race on housing opportunities and choice in its jurisdiction. In identifying impediments to fair housing choice, it must analyze impediments erected by race discrimination or segregation, and if such impediments exist, it must take appropriate action to overcome the effects of those impediments. Id. at 387.³

C. The County's AFFH Certifications

By the year 2000, Norma Drummond, a member of the County's Planning Department, was the person responsible for the County's administration of the grants associated with the County's affordable housing program and CDBG program. As discussed above, one of the County's duties as part of the requirement to AFFH was to conduct an analysis of impediments or AI, as it is customarily called. Two AIs were reduced to writing during the false claims period and included within the County's "Consolidated Plans" presented to HUD in 2000 and in 2004.

1. Consolidated Plans and Related Submissions

The County's Consolidated Plans addressed housing and community development goals for four federal grant programs.⁴ Consolidated Plans serve four main functions: they are "[a] planning document for the jurisdiction," "[a] submission for federal funds under HUD's formula grant programs," "[a] strategy to be followed in carrying out HUD programs," and "[a] management tool for assessing performance and tracking results." 24 C.F.R. § 91.1(b). Consolidated Plans are required to describe, inter alia, the jurisdiction's "general priorities for allocating investment geographically within the jurisdiction . . . and among different activities and needs" for the following categories: affordable housing, public housing, homelessness, other special needs (including the elderly, disabled, persons with alcohol or drug addiction, persons with HIV/AIDS and their families, and public housing residents), and nonhousing development pursuant to the CDBG program. Id. § 91.215.

As part of the Consolidated Plan process, the County was required to make Action Plan submissions to HUD. The Action Plans were annual submissions that addressed the goals and objectives for the County as they related to the categories discussed above. See id. § 91.220; id. § 91.420. The Action Plans included the County's annual applications for funding, as well as the County's annual express certification that it would AFFH. See id. § 91.225; id. § 91.425. The County also made annual submissions, called Consolidated Annual Performance and Evaluation Reports ("CAPERs"), reviewing the "progress it has made in carrying out its strategic plan and its action plan" over the previous year. Id. § 91.520(a).

During the false claims period, the...