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

Filing 409

MEMORANDUM OPINION AND ORDER: The County's May 15 motion for a stay of the Court's May 3 Opinion pending appeal is denied. (Signed by Judge Denise L. Cote on 5/17/2012) (djc)

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.
:
:
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06 Civ. 2860 (DLC)
MEMORANDUM OPINION
& ORDER

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
Justin R. Adin
Westchester County Attorney’s Office
138 Martine Avenue, 6th Floor
White Plains, NY 10601
DENISE COTE, District Judge:
In a May 3, 2012 Opinion (the “May 3 Opinion”) the Court
sustained the Government’s objections to certain sections of the
Honorable Gabriel Gorenstein’s March 16 Opinion (the “Magistrate
Judge’s Opinion”) and adopted the recommendations in the

November 14, 2011 Report and Recommendation (the “Report”) of
James E. Johnson (the “Monitor”) relating to the obligation of
Westchester County (the “County”) to promote source-of-income
legislation.

On May 15, the County moved for a stay of

enforcement of the May 3 Opinion pending appeal.1

The County’s

motion is denied.2

BACKGROUND
The facts giving rise to this dispute are set forth in the
May 3 Opinion, familiarity with which is assumed.

See United

States ex rel. Anti-Discrimination Ctr. v. Westchester County,
New York, No. 06 Civ. 2860 (DLC), 2012 WL 1574819 (S.D.N.Y. May
3, 2012).

The Government and the County are parties to an

August 10, 2009 consent decree (the “Settlement”).

The

Settlement resolved False Claims Act litigation based upon false
certifications made by the County to federal housing officials,
which exposed the County to over $150 million in potential
liability.

The Settlement required the County to take numerous

1

The County also seeks a stay of the Court’s April 17 Order
denying the County’s jurisdictional argument. The basis for the
April 17 Order is set forth in the May 3 Opinion. For
simplicity of reference, this Opinion will refer to the County’s
motion as a motion to stay the May 3 Opinion pending appeal.
2

The County also moved for an interim stay pending decision on
its motion for a stay pending appeal. That request is denied as
moot.

2

steps to affirmatively further fair housing.

As one of its

“additional obligations” to affirmatively further fair housing,
the County is required under ¶ 33(g) of the Settlement to
“promote, through the County Executive, legislation currently
before the [County’s] Board of Legislators to ban ‘source-ofincome’ discrimination in housing.”
On June 14, 2010, the Board of Legislators (the “Board”)
passed source-of-income legislation.

County Executive Robert

Astorino vetoed the legislation on June 25.
The Settlement requires the County to submit an Analysis of
Impediments (“AI”) to fair housing acceptable to the Department
of Housing and Urban Development (“HUD”).

On July 13, 2011, HUD

rejected a revised AI submitted by the County because the County
had failed to incorporate corrective actions previously
specified by HUD regarding “promotion of source-of-income
legislation [and] plans to overcome exclusionary zoning
practices.”

As a consequence, the County lost access to federal

funding controlled by HUD.
The County invoked the Settlement’s dispute resolution
procedures on July 20.

In response, the Government in an August

18 letter asked the Monitor to resolve whether the County was in

3

compliance with its Settlement obligation to promote source-ofincome legislation.3
After receiving briefing from the parties, the Monitor in
his November 14 Report found the County in breach of its
Settlement obligation to promote source-of-income legislation.
The Monitor recommended, pursuant to ¶ 13(c) of the Settlement,
that “a reasonable interpretation of ‘promotion’ of legislation
could encompass, at a minimum, requesting that the legislature
reintroduce the prior legislation, providing information to
assist in analyzing the impact of the legislation, and signing
the legislation passed.”
The County filed objections to the Monitor’s Report with
the Magistrate Judge.

On March 16, 2012, the Magistrate Judge

found that the County had not breached its obligation to promote
source-of-income legislation, and sustained the County’s
objections to those sections of the Monitor’s Report.

3

The Government also requested that the Monitor resolve a
dispute relating to the County’s failure to establish a process
for addressing exclusionary zoning practices. The Monitor’s
Report directed the County to analyze zoning ordinances in
connection with its AI by February 29, 2012. The Magistrate
Judge’s Opinion overruled the County’s objections to that
portion of the Report, and the May 3 Opinion adopted those
sections of the Magistrate Judge’s Opinion relating to zoning.
The County did not object to the Magistrate Judge’s Opinion, and
does not appear to seek a stay of the May 3 Opinion to the
extent it adopted the zoning sections of the Magistrate Judge’s
Opinion.
4

The Government then filed objections to the Magistrate
Judge’s Opinion with this Court.

Ruling, inter alia, on the

definition of the word “promote” in ¶ 33(g) of the Settlement,
the Court sustained the Government’s objections.
1574819, at *5-*6.

2012 WL

The Court adopted those sections of the

Monitor’s Report, finding that the County had breached its
obligation to promote source-of-income legislation, and set
forth steps necessary for the County to return to compliance
with the Settlement.

Id. at *6-*7.

The County filed its notice of appeal on May 15, and on the
same day moved for a stay pending appeal.

Accommodating the

Court’s request for expedited briefing of its response to the
motion, the Government opposed the application for a stay on May
16.

DISCUSSION
“[T]he party requesting a stay bears the burden of showing
that the circumstances justify an exercise of the Court's
discretion.”

Maldonado-Padilla v. Holder, 651 F.3d 325, 328 (2d

Cir. 2011) (citation omitted).

Courts consider the following

factors in determining whether to grant a stay pending appeal:
(1) whether the stay applicant has made a strong
showing that he is likely to succeed on the merits;
(2) whether the applicant will be irreparably injured
absent a stay; (3) whether the issuance of the stay
will substantially injure the other parties interested

5

in the proceeding; and (4) where the public interest
lies.
S.E.C. v. Citigroup Global Markets Inc., 673 F.3d 158, 162 (2d
Cir. 2012) (per curiam) (citation omitted).

“[T]he degree to

which a factor must be present varies with the strength of the
other factors, meaning that more of one factor excuses less of
another.”

In re World Trade Center Disaster Site Litigation,

503 F.3d 167, 170 (2d Cir. 2007) (citation omitted).
None of the four stay factors favors the County.

The

factors are addressed in turn.
The County has failed to show that it is likely to succeed
on the merits on appeal.

Each of the arguments it raises in its

May 15 motion was considered and rejected in the May 3 Opinion.
Indeed, the May 3 Opinion found “an unambiguous breach of the
[County’s] duty to promote” source-of-income legislation.
WL 1574819, at *6.

2012

The County also argues that the Magistrate

Judge’s Opinion provides a sufficient basis to find a likelihood
of success on the merits for purposes of granting a stay.

But,

as discussed in the May 3 Opinion, the Magistrate Judge’s
Opinion relied on an overly narrow definition of the term
“promote” and failed to consider the Second Circuit precedent on
the term’s plain meaning.
306, 314 (2d Cir. 2010).

See United States v. Awan, 607 F.3d
The May 15 motion ignores Awan and

this Court’s use of Awan to interpret the term “promote”.

6

The County has also failed to demonstrate that it will
suffer irreparable injury absent a stay.

An irreparable injury

is “an injury that is neither remote nor speculative, but actual
and imminent,” Grand River Enterprise Six Nations, Ltd. v.
Pryor, 481 F.3d 60, 66 (2d Cir. 2007) (citation omitted)
(preliminary injunction), and “one that that cannot be remedied”
if the party seeking the stay is granted relief on appeal.

Id.

The May 3 Opinion adopted the Monitor’s finding that the County
is in breach of its obligation to promote source-of-income
legislation, pursuant to ¶ 33(g) of the parties’ the Settlement,
and the Monitor’s recommendation, pursuant to ¶ 13(c) of the
Settlement, concerning the steps the County must take to remedy
its breach.

The County argues that the May 3 Order “may”

subject it to monetary fines if the Government ever pursues a
contempt sanction for the County’s failure to comply with the
Settlement.

But the Government has not moved for sanctions, and

if it does so the County will have a full and fair opportunity
to litigate the issue.
The County also argues that a stay is necessary to preserve
the status quo, and that if a stay is not granted pending appeal
the parties’ dispute may be mooted because the County Executive
may be forced to sign source-of-income legislation.

Again, the

County has failed to identify a harm that is actual or imminent.
Neither party has pointed to evidence in the record indicating

7

that source-of-income legislation is currently pending before
the Board.

As significantly, the Monitor identified several

steps the County must take to remedy its breach beyond signing
the legislation, including reintroducing source-of-income
legislation and assisting the Board in analyzing the
legislation’s impact.

In none of its submissions before the

Magistrate Judge or this Court, including the May 15 motion, did
the County argue that these steps would constitute improper
relief if the County were found to be in violation of its duty
to promote source-of-income legislation.
Finally, the County has not demonstrated that the public
interest supports issuance of a stay, or that issuance of a stay
would not substantially injure other interested parties.

“[T]he

traditional stay inquiry calls for assessing the harm to the
opposing party and weighing the public interest.
merge when the Government is the opposing party.”
Holder, 556 U.S. 418, 435 (2009).

These factors
Nken v.

There is a substantial public

interest in ensuring that the County lives up to its obligations
to affirmatively further fair housing, as set forth in the
Settlement.

These obligations include the “additional

obligation” to promote source-of-income legislation that would
prevent landlords from discriminating against tenants whose
income is derived in whole or in part from government benefits,
including Section 8 vouchers.

The public interest lies,

8

breaches

moreover, in prompt relief
and renewed ef

S

the Settlement

to promote legislation significant to

firmatively furthering fair housing in Westchester County.
Conversely, the constitutional concerns identified by the County
have been found to lack merit, and the County's attempt to argue
that these concerns place the public interest on the side

a

stay are equally meritless.

CONCLUSION
The County's May 15 motion

a stay

Court's May 3

Opinion pending appeal is denied.

SO ORDERED:
Dated:

New York, New York
May 17, 2012

United S

9

strict Judge