United States of America (ex rel), et al v. Westchester County, New York

Filing 402

OPINION AND ORDER: The Governments objection to the Magistrate Judges March 16 Opinion is sustained. The Court adopts those sections of the Monitors Report dealing with the Countys obligation to promote source-of-income legislation. The remaining sections of the March 16 Opinion are adopted. (Signed by Judge Denise L. Cote on 5/3/2012) (jfe)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
UNITED STATES OF AMERICA ex rel., ANTI- :
DISCRIMINATION CENTER OF METRO NEW
:
YORK, INC.
:
Plaintiff/Relator, :
:
-v:
:
WESTCHESTER COUNTY, NEW YORK,
:
Defendant.
:
:
----------------------------------------X

06 Civ. 2860 (DLC)
OPINION & ORDER

APPEARANCES:
For the Government:
David J. Kennedy
Benjamin H. Torrance
United States Attorney’s Office
86 Chambers Street
New York, NY 10007
For Westchester County, New York:
Robert F. Meehan
James F. Castro-Blanco
Carol F. Arcuri
Linda Trentacoste
Shannon S. Brady
Adam Rodriguez
Westchester County Attorney’s Office
138 Martine Avenue, 6th Floor
White Plains, NY 10601
DENISE COTE, District Judge:
The United States (“Government”) has objected to the
Opinion of March 16, 2012 (“Opinion”) issued by the Honorable
Gabriel Gorenstein insofar as it sustained the objection of
1

Westchester County (“County”) to one portion of the Report and
Recommendation of the Monitor James E. Johnson (“Monitor”) dated
November 14, 2011 (“Report”).

At its essence, this dispute

concerns whether the veto of legislation breached the duty to
promote the legislation.

For the following reasons, the

Government’s objection to the Opinion is well-founded, and the
Monitor’s Report is upheld in its entirety.

BACKGROUND
This litigation began six years ago.

In 2006, the Anti-

Discrimination Center of Metro New York, Inc., acting as a qui
tam relator, sued the County for violation of the False Claims
Act (“FCA”).

The lawsuit asserted that the County had received

money from the federal government after falsely certifying that
it was affirmatively furthering fair housing.

As described in

the pertinent federal regulations, the task of affirmatively
furthering fair housing (“AFFH”) required the County to conduct
an analysis of the impediments to fair housing choice and to
take appropriate actions to overcome the effects of any such
impediments.
Following the completion of discovery, partial summary
judgment was entered against the County.

United States ex rel.

Anti-Discrimination Ctr. v. Westchester County, New York, 668
2

F.Supp.2d 548 (S.D.N.Y. 2009).

This Court found, inter alia,

that the County had not analyzed race in conducting its Analysis
of Impediments (“AI”), and had thereby submitted false
certifications to the Department of Housing and Urban
Development (“HUD”).

Id. at 561-63.

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.
On August 10, 2009, the Government intervened and elected
to proceed with this action, filing its own complaint.

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
(“Settlement”).
The Settlement provided for the County to pay the
Government $30 million, with $21.6 million of that amount
credited to the County’s account with HUD for development of
housing in accordance with the Stipulation.

The County was also

required to secure $30 million in additional funding for such
housing development over six years.

3

The Settlement also provided for injunctive relief.

Among

other things, a Monitor was appointed and given authority, inter
alia, to resolve disputes between the Government and the County,
and to assess every two years, starting on December 31, 2011,
the County’s progress in fulfilling its obligations under the
Settlement.
In the Settlement, the Country agreed to affirmatively
further fair housing in a variety of ways.

These included the

development of 750 units of new affordable housing (“Affordable
AFFH Units”) over the course of seven years in areas with low
black and Hispanic populations.

Of particular significance to

this dispute, the Settlement required the County to “promote,
through the County Executive, legislation currently before the
[County’s] Board of Legislators to ban ‘source–of-income’
discrimination in housing,” and to “incorporate” that
undertaking in the Country’s AI, which the County was required
to submit to HUD.

As the Monitor noted in his December 31, 2011

biennial report, legislation to ban source of income
discrimination in housing (herein “source-of-income
legislation”) “if it were to become law, would prevent landlords
from refusing to rent to tenants solely on the grounds that a
person’s income is derived from government programs such as
Section 8, Social Security, or disability benefits.”
4

The County

itself has noted that “Section 8 vouchers are a major source of
assistance for low and very low income families and that
reluctance by landlords to accept Section 8 continues to be a
challenge.”

Westchester, 668 F.Supp.2d at 558 (quoting County’s

2004 AI).
In addition, the Settlement required the Country to
identify specific zoning practices within the County that hinder
the development of Affordable AFFH Units.

The Country agreed to

establish a process for notifying the implicated municipalities
of changes that must be made to such zoning practices and the
consequences for a failure to make those changes.
At the time of the Settlement, the Country’s Board of
Legislators (“Board”) had legislation before it that prohibited
housing discrimination by landlords based on source of income.
While the Board approved the Settlement, it did not approve the
legislation before the end of its session in December 2009.
Nonetheless, County Executive Andrew J. Spano (“Spano”) had
written to the Board in October 2009 urging the passage of the
legislation and in November had written letters to five housing
advocacy organizations urging them to advocate for passage of
the legislation.
On January 19, 2010, source-of-income legislation was
reintroduced in the Board’s new legislative session.
5

The Board

held at least eight meetings on the proposed legislation, as
well as public hearings.

Spano’s successor, County Executive

Robert Astorino (“Astorino”), who took office on January 1, did
not participate in any of the meetings or hearings.

The Board’s

Committee on Legislation (“the Committee”) submitted an amended
version of the legislation to the Board on May 10.

In a May 10

memorandum accompanying the proposed legislation, the Committee
stated that source-of-income legislation “would prevent the
growing trend of discrimination based upon a person’s source of
income, which creates an extreme hardship for individuals with
lower incomes, including the disabled and the elderly, and for
families transitioning from welfare to work.”

The Committee

further stated that the proposed legislation “complies with the
County’s obligations in its fair housing contract with [HUD].”
On June 14, the Board passed the source-of-income
legislation.

Astorino vetoed it on June 25.

That veto is at

the heart of the dispute before this Court.
Through a letter of July 13, 2011, HUD notified the County
that the County’s revised AI did not meet the requirements of
the Settlement since it did not incorporate the corrective
actions which HUD had specified in a May 13 letter regarding
“promotion of source-of-income legislation or plans to overcome
exclusionary zoning practices.”

HUD therefore rejected the
6

County’s certification that it would affirmatively further fair
housing, as well as the County’s FY 2011 Annual Action Plan (“FY
2011 Plan”).

As a consequence of HUD’s disapproval of the FY

2011 Plan, the County ceased being a grantee of federal
Community Planning and Development programs covered by the
County’s AI, effective May 1, 2011.1
In response to the federal funding cut-off, the County
invoked the dispute-resolution procedures in the Settlement and
sought the Monitor’s assistance on July 20 in resolving its
dispute with HUD.

The Government also invoked the dispute-

resolution procedures of the Settlement in an August 18 letter.
It identified two relevant issues as the Country’s failure to
promote legislation prohibiting discrimination on the basis of
source-of-income and its failure to establish a process for
addressing exclusionary zoning practices.
With respect to the County’s obligation to promote sourceof-income legislation, the Government requested in its August 18
letter that the Monitor resolve the following dispute between
the parties:
Whether [the County] has fully complied with
paragraph[s] 33(g) and 33(i) of the [Settlement],
1

In a July 20, 2011 letter to the Monitor, the County stated
that the funding cut-off would force the County to lay off
housing staff and would hinder its ability to comply with its
obligation to develop the Affordable AFFH Units.
7

requiring the County, as part of its additional
obligations to affirmatively further fair housing, to
“promote, through the County Executive, legislation
currently before the [BOL] to ban ‘source-of-income’
discrimination in housing,” and to ‘incorporate’ that
undertaking in the County’s analysis of impediments to
fair housing choice within its jurisdiction. If not,
what actions the County must take to satisfy this
obligation.
On November 14, the Monitor issued his Report responding to
the parties’ requests.

Among other things, he found that the

County was in breach of its obligation to promote source-ofincome legislation, and that by February 29, 2012, it should
analyze zoning ordinances in connection with the required
Analysis of Impediments.
The Report explained in detail the legal and factual bases
for its finding that the County was in breach of its obligation
to promote source-of-income legislation.

It identified the key

questions for resolution as “(a) what does it mean to ‘promote’
the Source of Income legislation through the County Executive;
(b) over what period of time did that duty exist; and (c) did
the County Executive discharge that duty.”

The Monitor

concluded that while the “Settlement does not mandate the
ultimate adoption of Source of Income legislation,” the acts
undertaken by the County Executive were insufficient to
constitute promotion.

The Report reviewed definitions of

promotion that included “to help or encourage to exist or
8

flourish,” “to bring or help bring into being,” and “to
contribute to the growth, enlargement, or prosperity of.”

Using

these and similar definitions of the term “promote”, the Report
found that “[n]either the single letter [sent by Spano] to the
[Board], nor the five letters to advocacy organizations, taken
separately or together, can be credibly considered as acts
sufficient” to constitute promotion, and that the veto by
Astorino “vitiated any prior act of promotion and placed the
County in breach of the Settlement.”
The County appealed these and other determinations to the
Magistrate Judge.

In a March 16, 2012 Opinion, the Magistrate

Judge sustained the County’s objection to the Monitor’s finding
that the Settlement required the County Executive to sign the
source-of-income legislation.
The Government has filed an objection seeking review by
this Court of the portion of the Opinion that concluded that the
County Executive’s veto of source-of-income legislation passed
by the Board did not violate the Settlement.

No party has filed

objections to the remainder of the Opinion, which sustained
other portions of the Monitor’s Report.

The briefing on the

Government’s objection was fully submitted on April 13.2

2

On April 16, the Government submitted an additional letter in
response to the County’s April 13 opposition, addressing
9

DISCUSSION
A district court “may accept, reject, or modify, in whole
or in part, the findings or recommendations made by the
magistrate judge.”

28 U.S.C. § 636(b)(1)(C).

The court shall

conduct a de novo review of those sections of a report to which
a party timely objects.

Id.

To accept those portions of the

report to which no timely objection has been made, a district
court “need only satisfy itself that there is no clear error on
the face of the record.”

Fed. R. Civ. P. 72(b), Advisory

Committee Notes.

I.

The County’s Jurisdictional Argument
As an initial matter, the parties dispute whether this Court

has jurisdiction over the Government’s objection to the Opinion.
The County argues that the parties consented in ¶ 14 of the
Settlement to the Magistrate Judge issuing a final order
resolving any dispute between them, pursuant to 28 U.S.C.
§ 636(c).
Upon the consent of the parties, a [magistrate judge] may
conduct any or all proceedings in a jury or nonjury civil matter
and order the entry of judgment in the case[.]”

28 U.S.C.

jurisdictional and constitutional arguments raised in the
County’s opposition.
10

§ 636(c).

The consent of each party to the magistrate judge

exercising plenary jurisdiction under § 636(c) must be “clear
and express.”

New York Chinese TV Programs, Inc. v. U.E.

Enterprises, Inc., 996 F.2d 21, 24 (2d Cir. 1993).
Paragraph 14(d) of the Settlement does not constitute the
parties’ consent to the magistrate judge’s plenary jurisdiction.
To the contrary, the Settlement provides in ¶ 14(d) that should
a party to the Settlement seek review of the Monitor’s report
and recommendation from the magistrate judge, “the relevant
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.”

Under

those provisions, a timely objection from a party to the
magistrate judge’s report and a recommendation must be resolved
de novo by the district court.

Fed. R. Civ. P. 72(b)(3).

Moreover, the County’s argument that the parties consented to
the magistrate judge’s plenary jurisdiction is entirely
inconsistent with ¶ 58 of the Settlement, through which this
Court “retain[s] exclusive jurisdiction over [the Settlement],
including, but not limited to, any application to enforce or
interpret its provisions, and over each party to the extent its
obligations remain unsatisfied.”

The Court will therefore

decide the Government’s objection on the merits.
11

II. The Scope of the County’s Obligation to “Promote” Sourceof-Income Legislation
Resolving the Government’s objection requires
interpretation of the Settlement, a consent decree between the
Government and the County.

Consent decrees “reflect a contract

between the parties (as well as a judicial pronouncement), and
ordinary rules of contract interpretation are generally
applicable.”

Doe v. Pataki, 481 F.3d 69, 75 (2d Cir. 2007).

“[D]eference is to be paid to the plain meaning of the language
of a decree and the normal usage of the terms selected.”

United

States v. Broadcast Music, Inc., 275 F.3d 168, 175 (2d Cir.
2001) (citation omitted).

In interpreting a consent decree, as

when interpreting a contract, “the court is to consider its
particular words not in isolation but in the light of the
obligation as a whole and the intention of the parties as
manifested thereby.”

JA Apparel Corp. v. Abboud, 568 F.3d 390,

397 (2d Cir. 2009) (citation omitted).
“[W]hen faced with unclear language in a consent decree, a
court of equity may, in construing the provision, consider the
purpose of the provision in the overall context of the judgment
at the time the judgment was entered.”
F.3d at 175.

Broadcast Music, 275

“[A] consent decree is an order of the court and

thus, by its very nature, vests the court with equitable
12

discretion to enforce the obligations imposed on the parties.”
United States v. Local 359, United Seafood Workers, 55 F.3d 64,
69 (2d Cir. 1995).

While “the factual findings of an

administrator [of a consent decree] are entitled to great
deference,” id. at 68 (citation omitted), an administrator’s
conclusions of law are not entitled to deference.

See N.L.R.B.

v. J.P. Stevens & Co., Inc., 563 F.2d 8, 14 (2d Cir. 1977) (Fed.
R. Civ. P. 53 Master’s report and recommendation).
Paragraph 33(g) of the Settlement provides:

“As part of

its additional obligations to [affirmatively further fair
housing], the County shall . . . promote, through the County
Executive, legislation currently before the Board of Legislators
to ban ‘source-of-income’ discrimination in housing.”

As the

Monitor noted, “the key questions” for resolving whether the
County has breached the Settlement by failing to fulfill this
obligation are:
(a) what does it mean to “promote” the Source of
Income legislation through the County Executive; (b)
over what period of time did that duty exist; and (c)
did the County Executives discharge that duty.
The parties effectively agree that the County’s obligation
to “promote” source-of-income legislation must be understood in
accordance with the plain meaning and normal, everyday usage of
the term.

As the Second Circuit has recently observed, “[t]he

ordinary meaning of ‘promote’ includes ‘to bring or help bring
13

into being,’ to ‘contribute to the growth, enlargement, or
prosperity of,’ or to ‘encourage’ or ‘further’.”

United States

v. Awan, 607 F.3d 306, 314 (2d Cir. 2010) (citing Webster’s
Third New Int’l Dictionary 1815 (2002)).

See also

Dictionary.com, “Promote”, http://dictionary.reference.com
/browse/promote?s=t (last visited April 22, 2012) (“to help or
encourage to exist or flourish; further”).
Thus, the answer to the first “key” question is
straightforward.

The County’s obligation to “promote” source-

of-income legislation required the County Executive to take
active steps to foster and facilitate passage of the
legislation.

Those obligations are not limited to hortatory

steps.
The answer to the second question is also easy to discern
from the structure and terms of the Settlement itself.

The

County’s obligation to promote source-of-income legislation is
an ongoing obligation, and did not terminate upon the expiration
of the 2009 legislative session.

Paragraph 33, the paragraph

that requires the County to promote source-of-income
legislation, does not contain any time limitation.

In contrast,

the parties were careful to set forth specific time limitations
and deadlines for other obligations imposed by the Settlement,
and to provide mechanisms by which the County might seek an
14

extension of those deadlines, for example, in connection with
the implementation plan mandated by ¶ 18 of the Settlement.3
Any other interpretation of the County’s obligation to
promote source-of-income legislation would also be inconsistent
with the structure of the County’s obligations under the
Settlement as a whole, and thus is disfavored.

The Settlement

requires the County to “incorporate each undertaking set forth
in [¶ 33] in the the County’s AI.”

Settlement ¶ 33(i).

The

County was originally required to submit its AI to HUD 120 days
after the Settlement was entered.

The Settlement provided a

mechanism by which the County could seek an extension of that
deadline.

At the earliest, therefore, the Settlement

contemplated an AI submission deadline of December 9, 2009, only
weeks before the end of the 2009 BOL session.

The County took

advantage of the opportunity for an extension, however, and did
not submit its AI to HUD until July 23, 2010.

As noted, the

Settlement required the County to address at that time within
its AI, its obligation to promote, through the County Executive,
the legislation currently before the Board to ban source-ofincome discrimination in housing.
3

Thus, the settlement

Paragraph 18 of the Settlement requires that the County submit
an implementation plan to the Monitor and the Government within
120 days of entry of the Settlement. It further provides that
if “the Government, in its sole discretion, provides written
consent, the Monitor may extend the deadline once for the
submission of the implementation plan.”
15

contemplated a continuing duty to advise HUD of the County’s
efforts to promote source-of-income legislation.
Finally, the County breached its obligation to promote
source-of-income legislation.

The County does not dispute that

County Executive Spano’s single letter to the Board and five
letters to advocacy organizations during the fall or 2009 do not
constitute efforts sufficient to discharge the County’s
obligation to promote, through the County Executive, source-ofincome legislation.

It is also undisputed that the sole action

the County Executive has taken since December 2009 in relation
to the legislation he is obligated to promote is to veto it.

It

is unnecessary to decide the precise contours of the duty to
promote that the Settlement imposed on the County.

Under no

reasonable understanding of the term can the County Executive be
said to have discharged the obligation to promote source-ofincome legislation when he vetoed the legislation.

The veto was

an unambiguous breach of the duty to promote.
Paragraph 13(c) of the Settlement grants the Monitor
authority to “[i]dentify, recommend, and monitor implementation
of additional actions by the County needed to ensure compliance
with [the Settlement].”

The Monitor has recommended, pursuant

to ¶ 13(c), that
a reasonable interpretation of “promotion” of
legislation could encompass, at a minimum, requesting
16

that the legislature reintroduce the prior
legislation, providing information to assist in
analyzing the impact of the legislation, and signing
the legislation passed.
“Until parties to [a consent decree] have fulfilled their
express obligations, the court has continuing authority and
discretion -- pursuant to its independent, juridical interests - to ensure compliance.”

E.E.O.C. v. Local 580, Int’l Ass'n of

Bridge, Structural and Ornamental Ironworkers, Joint ApprenticeJourneyman Educ. Fund, 925 F.2d 588, 593 (2d Cir. 1991).

The

Monitor’s recommendation properly describes the steps the County
must take to comply with its obligation to promote source-ofincome legislation, and the Court adopts it.
The County raises disputes at each stage of the analysis
above.

First, the County argues that actions of promotion

encompass acts of persuasion or advocacy only.

While the County

points to the Awan court’s reasoning, the Court of Appeals’
decision cannot be read so narrowly.
In Awan, the Second Circuit interpreted a sentencing
enhancement for terrorism, which applies where the defendant’s
offense “involved, or was intended to promote, a federal crime
of terrorism[.]”

U.S.S.G. § 3A1.4 (emphasis added).

Noting the

disjunctive phrasing of § 3A1.4, the court held that since the
enhancement “must be interpreted to avoid redundancy, the
‘intended to promote’ prong must be applicable in some
17

circumstances in which the ‘involved’ prong is not, i.e., where
the defendant’s offense or relevant conduct does not include a
federal crime of terrorism.”

Awan, 607 F.3d at 314.

It

reasoned that a person “promoting” an act or event takes an
active role in bringing that act or event to fruition.

In the

terrorism context, “an offense is ‘intended to promote’ a
federal crime of terrorism when the offense is intended to bring
about, encourage, or contribute to a federal crime of
terrorism[.]”

Id. (emphasis supplied).

Awan does not stand for the proposition that there is a
“dichotomy” between promoting a goal and the actual
accomplishment of the goal, as the County would have it, or that
the two concepts are mutually exclusive.

While the Awan court

held that a defendant who intends to promote a crime of
terrorism has “not necessarily” completed the crime, it did not
suggest the converse.

Id. at 315.

It did not suggest that a

person who completes a crime cannot be said to have promoted it.
The phrase “intended to promote” is differentiated from the word
“involved” by being broader, not by being exclusive.

The Awan

court’s discussion of the import of the term “promote” is
therefore entirely consistent with a finding that the County
breached its obligation to promote the source-of-income
legislation when the County Executive exercised his veto.
18

The County also argues that other obligations it assumed in
¶ 33 of the Settlement indicate its obligation under ¶ 33(g) to
promote source-of-income legislation is limited to acts of
persuasion.

It argues that the other tasks and actions set

forth in ¶ 33 require it only to undertake acts of persuasion.4
But, several of the County’s obligations under the remaining
subsections of ¶ 33 require it to act, rather than merely to
attempt to persuade others to act.

For example, the County is

required to “affirmatively market affordable housing within the
County”, and to include legal language in all agreements with
developers that developers will affirmatively market affordable
housing.

Settlement ¶ 33(e).

The County must also “centralize

the intake of potential home buyers for affordable housing that
AFFH”.

Settlement ¶ 33(f).

The collective obligations under ¶

33 of the Settlement, therefore, include actions for the County
to do by itself and with others.

Together, these activities

would materially enhance the County’s efforts to desegregate
housing within the County.
Next, the County contends that ¶ 33(g) applies only to
legislation before the BOL during its 2009 session.
4

The County

For example, the County is obligated under ¶ 33(b) to
“advertise the rights of all persons to fair housing and avenues
to redress allegations of housing discrimination . . . .” Under
¶ 33(h), the County is obligated to “pay for consultants and
public education, outreach, and advertising to AFFH . . . out of
County resources . . . .”
19

emphasizes that the phrase “currently before the [BOL]” is not
set off by commas.

When ¶ 33(g) is read not in isolation, but

in the context of the County’s Settlement obligations as a
whole, it is clear that the obligation did not terminate with
the end of the 2009 legislative session.

Such a reading would

frustrate the clear intention of the parties that the County’s
commitment to promote source-of-income legislation be
incorporated as an ongoing obligation into its AI.

The more

reasonable reading of “currently before the [BOL]” is as a
description of the type of legislation the County has an
obligation to promote: the bill then pending before the BOL or
legislation sufficiently similar to it.

The County has not

pointed to any material differences between the source-of-income
legislation pending before the Board in August 2009 and the
amended version passed by the Board in June 2010.
With respect to the question of whether the County breached
the Settlement, the County argues that the Settlement did not
obligate the County Executive to sign source-of-income
legislation.

As a preliminary matter, this is an overly narrow

characterization of the parties’ dispute.

The scope of the

dispute addressed by the Monitor is whether the County has fully
complied with its obligation under ¶ 33(g) of the Settlement to
promote source-of-income legislation, or whether the County has
20

breached that obligation.

Paragraph 33(g) of the Settlement

vests the County’s obligation to promote source-of-income
legislation in the County Executive, and it is sufficient for
purposes of finding a breach of that obligation to note that the
only actions a County Executive has taken towards furthering
such legislation or bringing it into being are Spano’s letters
prior to December 2009.

Since that time, the sole action a

County Executive has taken in relation to source-of-income
legislation is Astorino’s June 25, 2010 veto of the June 14 bill
passed by the Board.

These actions are insufficient to

constitute promotion.
The Monitor also correctly found that Astorino’s veto
constituted, by itself, a breach of the County’s obligation
under ¶ 33(g) of the Settlement.

The County is correct that the

term “promote” has a different meaning from the term “enact”.
While the Settlement did not require the County to guarantee
passage of the legislation, it required the County Executive to
promote that passage.

As already discussed, the terms “promote”

and “enact” are not mutually exclusive; failing to take an
action which is necessary to enact legislation -- particularly
when it is the final act -- may also constitute a failure to
promote that legislation, i.e. to “bring [the legislation] into
being.”

Awan, 607 F.3d at 304.

To the extent the Magistrate
21

Judge found otherwise, it was through reliance on an overly
narrow definition of the term “promote”, encompassing only
hortatory acts, and his failure to consider the definition in
Awan, id.

Astorino’s veto effectively killed source-of-income

legislation in Westchester.5

The County Executive’s action

constituted the very opposite of what was required under the
Settlement, and placed the County in breach.

III.

The County’s Remaining Arguments
The County claims that constitutional principles would be

violated if the Monitor’s interpretation and application of
¶ 33(g) is upheld.

None of these arguments has merit.6

The County cites to dicta in Horne v. Flores, 557 U.S. 433,
129 S.Ct. 2579 (2009), to argue that ¶ 33(g) of the Settlement

5

The fact that the Board might have overridden Astorino’s veto
by a supermajority vote is irrelevant to the question of whether
or not the County complied with its obligation to promote,
through the County Executive, source-of-income legislation.
6

The Government argues that the County forfeited several of
these arguments by failing to raise them before the Monitor. It
is true that the County did not present its reserved powers,
unmistakability, and Guarantee Clause arguments to the Monitor.
The County was on notice that the Monitor might interpret the
Settlement to find the County in breach based upon the County
Executive’s veto, and in fact argued that such an interpretation
would raise federalism concerns. It is unnecessary to decide
whether the County forfeited its other constitutional arguments
by “fail[ing] to make the timely assertion of a right,” United
States v. Olano, 507 U.S. 725, 733 (1993), as these arguments
fail on the merits regardless.
22

“improperly deprive[s] future officials of their designated
legislative and executive powers.”
S.Ct. at 2594 (citation omitted).

Horne, 557 U.S. at ___, 129
In Horne, the Supreme Court

found that a lower court had “strayed” from the correct legal
standard when it evaluated a state’s Fed. R. Civ. P. 60(b)(5)
motion for relief from a final judgment based on changed
circumstances.

Id. at 2595.

Federalism concerns played a large

role in the Court’s discussion of the proper standard to apply
to a state’s Rule 60(b)(5) motion for relief from a remedial
order.

Id. at 2595-98.

But Horne is inapposite here, where the

County has not sought modification of a consent decree but has
instead flouted one of its provisions.

As the Monitor aptly

noted, “[n]othing in Horne suggests that any party has the right
to undertake an extra-judicial change of a consent decree’s
terms.”
The County raises two related arguments that proceed from
the assumption that an interpretation of ¶ 33(g) of the
Settlement obliging the County Executive to sign source-ofincome legislation passed by the Board involves a surrender of
“sovereign power.”

The County argues that such an

interpretation would violate the “reserved powers doctrine.”
The County also argues that the “unmistakability doctrine”
should be applied to construe the Settlement so as not to oblige
23

the County Executive to sign source-of-income legislation passed
by the Board.

These arguments will be addressed in turn.

The reserved powers doctrine “describe[s] the
uncontroversial proposition that a state may not enter a
contract that ‘surrenders an essential attribute of its
sovereignty’ and that, as a consequence, the Contracts Clause
may not be used to compel a state to adhere to a contract that
purports to achieve such a result.”

Matsuda v. City and County

of Honolulu, 512 F.3d 1148, 1153 (9th Cir. 2008) (citing U.S.
Trust Co. v. New Jersey, 431 U.S. 1, 23 (1977)).

State powers

constituting “essential attributes of sovereignty” include the
police power and the power of eminent domain.

Matsuda, 512 F.3d

at 1153.
The County is incorrect that this dispute implicates the
reserved powers doctrine.

First, the County has failed to point

to a case supporting the proposition that the reserved powers
doctrine applies to an agreement entered into by a county, as
opposed to a state.

Second, even if the doctrine applies to a

consent decree entered into by a county, the County Executive’s
exercise of his veto is not an “essential attribute of
sovereignty”, akin to the police power or the power of eminent
domain.

Rather, it is a prerogative of the County Executive

within Westchester’s system of governance, established by local
24

code.7

See Westchester County, N.Y. Code, § 110.11 (11).

Finally, the reserved powers doctrine does not apply where an
agreement binds a sovereign to exercise its powers, rather than
to refrain from using them.

See Matsuda, 512 F.3d at 1154.

As

the Supreme Court has noted, “a State is without power to enter
into binding contracts not to exercise its police power in the
future.”

U.S. Trust Co., 431 U.S. at 23 n.20 (emphasis added).

In short, ¶ 33(g) of the Settlement does not mandate that the
County refrain from using its police powers or any other power
that could be deemed an “essential attribute of sovereignty.”
The unmistakability doctrine is a rule of contract
construction which provides that in “a contract with a sovereign
government . . . an ambiguous term of a grant or contract [will
not] be construed as a conveyance or surrender of sovereign
power.”

United States v. Winstar Corp., 518 U.S. 839, 878

(1996).

“[A] clear statement of intent to surrender a state’s

legislative authority is even more appropriate when the alleged
7

The County also seeks to argue that the Settlement cannot be
interpreted to require the County Executive not to veto sourceof-income legislation, because the County Executive’s veto power
may only be altered by local referendum. But the Settlement
does not alter the County Executive’s veto power. Indeed, the
County Executive did veto the source-of-income legislation. The
Settlement instead governs the legal consequences of that veto,
consequences that arise out of the litigation the Settlement
brought to a conclusion. In consenting to the Settlement, a
consent decree that allowed the County to evade potentially
enormous damages, the County agreed to comply with its
provisions or face the sanctions described therein.
25

restrictions on future law-making power are part of an agreement
authorized and enforced by a federal court.”
at 79.

Pataki, 481 F.3d

As discussed, an interpretation of ¶ 33(g) of the

Settlement that obliges the County Executive to sign source-ofincome legislation passed by the Board does not require
surrender of any “sovereign power” that may be possessed by the
County.

Equally significant, the obligation addressed herein

does not arise from an ambiguous term of the Settlement.

The

unmistakability doctrine is therefore inapposite.
Finally, the County argues that the interpretation of
¶ 33(g) of the Settlement adopted here violates the
Constitution’s Guarantee Clause.

See U.S. Const. art IV, § 4

(“The United States shall guarantee to every State in this Union
a Republican Form of Government.”).

The courts have

traditionally held that arguments premised upon the Guarantee
Clause present nonjusticiable political questions.
v. United States, 82 F.3d 23, 28 (2d Cir. 1996).

See Padavan
Even if the

County’s Guarantee Clause challenge to the Settlement were
justiciable, it would fail.
U.S. 144, 185 (1992).

Cf. New York v. United States, 505

The County cannot show the denial to any

state of a republican form of government.

Finding a breach of

the Settlement simply enforces an agreement which the County

26

voluntarily entered to avoid liability of approximately $150
million.

IV.

Additional Disputes
The Magistrate Judge’s Opinion overruled the County’s

objections to several other portions of the Monitor’s Report.
The Opinion agreed with the Report that the County must specify
its strategy for overcoming exclusionary zoning practices, and
that the Monitor may require the County to identify the types of
municipal zoning practices that would, if not remedied by the
municipality, cause the County to pursue legal action.

The

Opinion also overruled the County’s objections to the Monitor’s
refusal to rule on the propriety of HUD’s rejection of the
County’s AI.

Neither party has objected to these portions of

the Opinion, and the Magistrate Judge’s findings with respect to
these three issues are not clearly erroneous.

The Court

therefore adopts these sections of the Opinion.

Conclusion
The Government’s objection to the Magistrate Judge’s March
16 Opinion is sustained.

The Court adopts those sections of the

Monitor’s Report dealing with the County’s obligation to promote

27

source-of-income legislation.

The remaining sections of the

March 16 Opinion are adopted.

SO ORDERED:
Dated:

New York, New York
May 3, 2012

United

28

Judge