United States v. N.Y.C. Hous. Auth.

Citation347 F.Supp.3d 182
Decision Date14 November 2018
Docket Number18cv5213
Parties UNITED STATES of America, Plaintiff, v. NEW YORK CITY HOUSING AUTHORITY, Defendant.
CourtU.S. District Court — Southern District of New York

Jacob Thomas Lillywhite, Jeffrey Stuart Oestericher, Monica Pilar Folch, Sharanya Mohan, Talia Kraemer, Geoffrey Steven Berman, Robert William Yalen, U.S. Attorney's Office, New York, NY, for Plaintiff.

Alan Schoenfeld, Debo Patrick Adegbile, Wilmer Cutler Pickering Hale & Dorr LLP, New York, NY, Saurabh Sanghvi, Wilmer Cutler Pickering Hale & Dorr L.L.P., Washington, DC, for Defendant.


WILLIAM H. PAULEY III, Senior United States District Judge:

The United States of America (the "Government") moves for approval of a proposed consent decree touted by the parties to bring organizational reform to the New York City Housing Authority ("NYCHA") and correct its systemic violations of federal health and safety regulations. On September 26, 2018, scores of NYCHA tenants, elected officials, and representatives of community organizations appeared for a fairness hearing to assist this Court in assessing the proposed decree. One after another, they rendered harrowing accounts of the squalid conditions in their apartments and the indifference of NYCHA management, called for the firing or prosecution of NYCHA officials, and urged greater tenant participation in the negotiation and enforcement of the proposed consent decree. Two of these community organizations, the City-Wide Council of Presidents and At-Risk Community Services (the "Intervenors"), also filed formal opposition briefs.

This human dimension cannot be ignored despite the parties' attempts to limit the Court to a perfunctory review of the validity and form of the settlement. For decades, Congress has addressed the importance of ensuring that public housing residents live in decent, safe, and sanitary conditions. Congress vested the U.S. Department of Housing and Urban Development ("HUD") with broad authority and responsibility to monitor the performance of public housing agencies receiving federal funds and to aggressively reform those agencies that misuse them. But the parties' proposed decree sidelines HUD and displaces the congressional framework for remedying public housing failures with a parallel framework to be managed by the judiciary. And aside from general directives to comply with applicable statutes and regulations, the proposed decree does not offer any specificity as to NYCHA's required or enjoined conduct. Rather, it contemplates the future elaboration of the terms of the injunction through the development of performance requirements and plans. These performance requirements and plans are not subject to this Court's approval, but will be developed by a monitor, approved by the Government, and subject to judicial review only under an arbitrary and capricious standard.

Because the record reveals a substantial basis to conclude that this proposed decree is not fair, reasonable, or consistent with the public interest, the Government's motion to approve the consent decree is denied.


This case is about the disastrous human toll resulting from a complete bureaucratic breakdown of the largest public housing agency in the United States. NYCHA's stated mission is to provide safe, decent, and affordable housing for the 400,000 or more low-and moderate-income New Yorkers who live in approximately 175,000 apartments in 326 housing developments. NYCHA's reported population alone places it within the fifty most populous cities in the Nation. But NYCHA's size is paralleled by its organizational disarray in providing any semblance of adequate housing for some of the most vulnerable members of society and its systemic cover-up of a host of fundamental health and safety issues.1 More than two years ago, the Government began investigating NYCHA's violations of federal health and safety requirements and its deception of federal regulators as to its compliance with those requirements. The breathtaking scope of NYCHA's deficiencies came into public focus through the accretion of media scrutiny, the high-profile departures of some of NYCHA's top leadership, and federal and state court class actions by NYCHA's own tenants to remedy some of the same housing conditions at issue in this action.

On June 11, 2018, the Government's investigation culminated in the filing of a complaint and proposed settlement (the "Complaint" and "Proposed Consent Decree"). The Complaint, which seeks the appointment of a monitor and other injunctive relief, asserts three claims against NYCHA. First, the Government claims that NYCHA substantially defaulted on its covenants and obligations under its "Annual Contributions Contract" with HUD, which incorporates federal lead-paint safety regulations and NYCHA's obligation under 24 C.F.R. § 5.703 to provide "decent, safe, and sanitary housing." (Compl., ECF No. 11, ¶¶ 268-271 (citing 42 U.S.C. § 1437d(j)(3) ).) Second, it asserts a claim under the federal Anti-Fraud Injunction Act to enjoin NYCHA's ongoing or imminent false statements to federal regulators about its housing conditions and its compliance with federal law in violation of 18 U.S.C. § 1001. (Compl. ¶¶ 272-276 (citing 18 U.S.C. § 1345 ).) Finally, the Government brings a claim under the Toxic Substances Control Act of 1976 to restrain NYCHA's failure to comply with federal lead-based paint regulations. (Compl. ¶¶ 277-282.)

Because the determination of whether the Proposed Consent Decree should be approved requires an examination of the terms of the settlement and the claims brought in this action, a brief overview is warranted.

I. The Complaint

This action may present the rare instance in which the allegations in the complaint are understated. As the Complaint alleges, and as numerous tenants testified from first-hand knowledge, NYCHA's apartments and buildings are literally falling apart—and NYCHA knows it. In March 2018, the New York State Department of Public Health found that 83% of inspected units contained some condition that could pose a health hazard to tenants. (Compl. ¶ 161.) Somewhat reminiscent of the biblical plagues of Egypt, these conditions include toxic lead paint, asthma-inducing mold, lack of heat, frequent elevator outages, and vermin infestations.

A. Lead Paint

Contrary to NYCHA's public assurances that lead paint was not widely used in NYCHA and that the vast majority of its developments did not have lead paint, the Government alleges that NYCHA's own documents reveal that more than half of NYCHA's developments contain lead paint somewhere. (Compl. ¶¶ 54-56.) At minimum, NYCHA's assertions indicate that roughly 51,000 apartments in at least 1,200 buildings in at least 92 developments have lead paint on their walls, floors, ceilings, windows, doors, radiators, or pipes.2 (Compl. ¶¶ 54, 57.) Approximately 173,000 residents, of which 11,500 are children under 6, live in these 92 developments. (Compl. ¶ 57.) But these numbers are only the tip of the iceberg—City and New York State health inspections have identified lead paint in developments that NYCHA previously declared to be lead free. (Compl. ¶ 56.)

Despite the prevalence of lead paint in NYCHA's apartments, NYCHA inexplicably failed to conduct required inspections and evaluations for years. For instance, NYCHA conducted less than 25% of the biennial risk assessment evaluations it should have conducted in the 92 developments with lead paint between 2010 and 2017. (Compl. ¶ 60.) For 50 of these 92 developments, NYCHA failed to conduct a single evaluation during that period. (Compl. ¶ 60.) NYCHA's senior management knew that these evaluations were not being conducted as early as 2011. (Compl. ¶ 95.) Even where NYCHA found a child with elevated blood lead levels who lived in a development previously determined to be lead free, it still—in defiance of all common sense—did not conduct risk assessments of that development. (Compl. ¶¶ 78-79.) Further, NYCHA simply stopped performing legally required annual visual assessments for lead paint hazards in 2012. (Compl. ¶¶ 64-67.) NYCHA's senior management allegedly knew that these assessments were not being conducted as early as 2013. (Compl. ¶ 96.) Although NYCHA partially restarted inspections in May 2016, the 4,000 visual assessments it conducted generated 3,900 work orders to abate lead paint hazards. (Compl. ¶¶ 66-67.) When extrapolated, this rate of work orders underscores the prevalence of lead paint hazards in NYCHA housing. (See Compl. ¶ 68 (alleging that more than 80% of the 9,000 apartments inspected in 2017 contained potential lead paint hazards).) And when NYCHA did perform maintenance work, the majority of that work was performed by employees who did not have proper training in lead-safe work practices and did not safely abate lead paint hazards. (Compl. ¶¶ 70-75, 80.) This, too, was known to NYCHA's management. (Compl. ¶¶ 99-100.)

Importantly, these statistics underscore the tangible impact of NYCHA's apathy on residents. Lead is toxic to all humans. (Compl. ¶¶ 31-32.) Even small amounts of lead may lead to cancer

, hypertension, kidney failure, and other serious health conditions. (Compl. ¶ 32.) Young children who unwittingly ingest even small amounts of lead paint flakes and lead dust may suffer irreversible neurological problems.3 (Compl. ¶ 32.) The Government alleges that between 2010 and 2016, the City's Department of Health confirmed that at least 19 children had elevated blood lead levels while living in lead-riddled apartments. (Compl. ¶¶ 82-85.) Despite senior management's knowledge, NYCHA refused to provide any information or report these cases to HUD. (Compl. ¶¶ 76-77, 101.) Moreover, as the Complaint alleges, this number massively understates the actual number of children afflicted with elevated blood lead levels for at least two reasons.4 (See Compl. ¶ 82.) First, NYCHA employed an obstructionist and counterintuitive policy of immediately contesting every...

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