United States of America (ex rel), et al v. Westchester County, New York
OPINION AND ORDER......The Governments December 30, 2016 motions to remove the fee cap and appoint Stephen C. Robinson as Monitor are granted. The Countys January 20, 2017 motion to eliminate the monitorship is denied. (Signed by Judge Denise L. Cote on 2/23/2017) (gr)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
UNITED STATES OF AMERICA ex rel. ANTI- :
DISCRIMINATION CENTER OF METRO NEW
WESTCHESTER COUNTY, NEW YORK,
06 Civ. 2860 (DLC)
OPINION AND ORDER
For the U.S. Government:
David J. Kennedy
Assistant United States Attorney
United States Attorney
for the Southern District of New York
86 Chambers Street
New York, NY 10007
For Westchester County, New York:
Robert F. Meehan
Westchester County Attorney
Westchester County Attorney’s Office
148 Martine Avenue, 6th Floor
White Plains, NY 10601
DENISE COTE, District Judge:
On December 30, 2016, the Government filed an application
for appointment of a replacement monitor and an amendment of the
August 10, 2009 Stipulation and Order of Settlement and
Dismissal (the “Consent Decree”) to remove the $175,000 annual
fee cap on the monitorship pursuant to Fed. R. Civ. P. 60(b).
On January 20, 2017, Westchester County (the “County”) opposed
the motion and cross-moved to amend the Consent Decree to
eliminate the monitorship.
on February 10, 2017.
These motions were fully submitted
For the reasons that follow, the
Government’s motions are granted and the County’s motion is
The Government and the County are parties to the Consent
The Consent Decree 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 background facts of this case, with
which familiarity is presumed, are set forth in United States ex
rel. Anti-Discrimination Ctr. of Metro N.Y. v. Westchester Cty.,
668 F. Supp. 2d 548 (S.D.N.Y. 2009).
See also United States ex
rel. Anti–Discrimination Ctr. of Metro N.Y. v. Westchester Cty.,
712 F.3d 761 (2d Cir. 2013).
The Consent Decree consists of thirty-eight pages and
imposes many obligations on the County.
Central to this
dispute, the Consent Decree provides for the appointment of a
Monitor in order “to achieve the . . . purposes of this
Stipulation and Order.”
As the County acknowledges in its
motion papers, the monitoring provisions in the Consent Decree
“are fairly extensive and intertwined with” the obligations
imposed by the Consent Decree.
Among other things, the Monitor
has the authority to “review all County programs, policies, and
procedures to ensure compliance” with the Consent Decree, and to
“resolve disputes between the County and the Government.”
Monitor is required to make reports to the Court addressing,
inter alia, the County’s compliance with the Consent Decree, the
adequacy of the County’s implementation plan and efforts, and
recommendations to improve the County’s performance.
The Consent Decree provides the following regarding the
appointment and replacement of the Monitor:
The Government, in its sole discretion but with input
from the County, shall select a monitor to be
appointed by the Court (the “Monitor”). The
Government shall submit the name of the Monitor to the
Court for approval within sixty (60) calendar days of
the Court’s entry of this Stipulation and Order.
The Monitor shall serve for so long as the County’s
obligations set forth in this Stipulation and Order
remain unsatisfied. Upon the County’s satisfaction of
its obligations set forth in this Stipulation and
Order, the Monitor shall inform the Court, the
Government, and the County that the services of the
Monitor are no longer needed.
If the Monitor is unable to complete the Monitor’s
term of office, the Government shall submit, after
consultation with the County, another candidate to
serve as Monitor for the Court’s review and approval.
The Consent Decree provides that the County shall “pay for
the Monitor and all necessary personnel and consultants retained
by the Monitor.”
The Monitor shall receive “reasonable
compensation comparable to that received by personnel and
consultants of similar skill and experience, as well as
reimbursement for any reasonable expenses necessary to the
performance of the Monitor’s role.”
The Monitor is required to
submit itemized invoices to the County to which the County may
A magistrate judge is designated to resolve any
disputes the parties cannot resolve.
The Consent Decree also sets the following limits on
compensation of the Monitor:
During the first two years following the entry of this
Stipulation and Order, the Monitor shall incur no more
than $250,000 in annual fees and expenses for which
the County is responsible, and no more than $175,000
in such fees and expenses annually thereafter,
provided that the Monitor may make an application to
the magistrate judge to incur fees and expenses for
which the County shall be responsible beyond those
amounts upon a showing by the Monitor that such fees
are appropriate to fulfill the obligations set forth
in this Stipulation and Order.
On August 10, 2009, James E. Johnson, a partner at
Debevoise & Plimpton LLP, was appointed as Monitor.
worked diligently and creatively with the County, local
government officials, organizations within Westchester County,
and experts to assist the County to fulfill its obligations
under the Consent Decree.
Because of the County’s
recalcitrance, which is well documented in Opinions of the
Second Circuit and this Court, the Monitor was also required to
report the County’s failure to comply with the Consent Decree.
See, e.g., United States ex rel. Anti-Discrimination Ctr. Of
Metro N.Y., Inc. v. Westchester Cty., No. 06cv2860 (DLC), 2016
WL 3566236 (S.D.N.Y. June 27, 2016), aff’d sub nom. United
States v. Westchester Cty., No. 16-2272-cv, 2017 WL 78458 (2d
Cir. Jan. 9, 2017) (public education provisions); United States
ex rel. Anti-Discrimination Ctr. of Metro N.Y., Inc. v.
Westchester Cty., No. 06cv2860 (DLC), 2016 WL 3004662 (S.D.N.Y.
May 24, 2016) (appeal filed July 22, 2016) (requirement to use
“all available means” to ensure development of 750 housing
units); Cty. of Westchester v. U.S. Dep’t of Hous. & Urb an
Dev., 116 F. Supp. 3d 251 (S.D.N.Y.), aff’d, 802 F.3d 413 (2d
Cir. 2015) (requirement to submit analysis of impediments
“deemed acceptable by HUD”); United States ex rel. AntiDiscrimination Ctr. of Metro N.Y., Inc. v. Westchester Cty., No.
06cv2860 (DLC), 2012 WL 1574819 (S.D.N.Y. May 3, 2012), aff’d,
712 F.3d 761 (2d Cir. 2013) (failure to promote source-of-income
Among the most significant and expensive tasks the Monitor
undertook was his work with experts to prepare reports on the
exclusionary impact of local zoning ordinances in an effort to
help the County prepare an Analysis of Impediments (“AI”) that
would be “deemed acceptable by HUD.”
“The County declined to
adopt the monitor’s reports or to incorporate any of the
findings of the reports into its own future AIs,” which were
subsequently rejected by HUD.
Cty. Of Westchester, 802 F.3d at
The Second Circuit concluded that “HUD reasonably relied
on detailed reports from the monitor, which examined the
relevant laws and analyzed the empirical data, and which refuted
the County’s conclusion that no municipality had ordinances that
were exclusionary under state or federal law.”
Id. at 424-427,
Pursuant to the schedule set forth in the Settlement, the
County’s Settlement-compliant AI was due December 8, 2009.
granted multiple extensions, pursuant to which the County
submitted a “late and incomplete” AI on July 23, 2010.
Westchester, 116 F. Supp. 3d at 263.
submissions, the County still has not submitted an AI “deemed
acceptable by HUD.”
In 2016, the Monitor notified the Court of his retirement
and resignation after seven years of service.
estimated his work over the past seven years amounted to fees
and expenses of approximately $11 million.
But, because of the
presumptive annual fee cap of $175,000 imposed by the Consent
Decree, his firm had born the majority of this cost.
Johnson observed that the County made tactical choices regarding
compliance with the Consent Decree because it did not bear the
brunt of the costs, and advised that the economic incentives
should be realigned to encourage compliance with the Consent
Decree by requiring the County to pay his replacement
“commercial rates and reasonable costs.”
The Government posted a notice for a replacement monitor on
July 22, 2016, and received six applicants.
Three of the
applicants were former judges, each of whom expressed a concern
about the fee cap.
The Government moved on December 30, 2016,
for the appointment of Stephen C. Robinson, a former United
States District Court Judge for the Southern District of New
York, and current partner at Skadden, Arps, Slate, Meagher &
During his tenure on the bench, Mr. Robinson sat in the
White Plains courthouse in Westchester County.
avers that Skadden is prepared to charge significantly
discounted rates in accord with its commitment to public
service, but “a fee cap of $175,000 would likely fall far short
of any reasonable compensation for work on this matter, even at
sharply discounted rates.”
He asserts that “Skadden has
indicated that it will not consent to my service if the fee cap
remains in place.”
The chief tasks imposed by the Consent Decree that remain
outstanding for a Monitor to perform include the following:
Monitor will complete at least one more Biennial Assessment and
evaluate whether the County met its December 31, 2016 benchmark
to have financing in place and building permits for 750
affordable housing units.
The Monitor must evaluate the
County’s public information campaign to “broaden support for
fair housing,” which it is obliged to undertake pursuant to the
Consent Decree, and to counteract the misleading statements by
the County Executive about this litigation.
2016 WL 3566236, at *6.
The Monitor may also be needed by the
parties and the Court in the event the County fails to submit an
AI “deemed acceptable by HUD” by the current and final deadline,
April 10, 2017.
Both parties seek a modification of the Consent Decree
pursuant to Rule 60(b), Fed. R. Civ. P.
remove the Monitor’s fee cap.
The Government seeks to
The County seeks to eliminate the
monitorship, identifying thirteen paragraphs in the Consent
Decree, some with many subsections, that would need to be
modified if its application were granted.
The parties agree on the legal standard that governs these
Rule 60(b) provides in relevant part that “the
court may relieve a party or its legal representative from a
final judgment, order, or proceeding” when “applying it
prospectively is no longer equitable.”
An application to alter
or amend the judgment under Rule 60(b)(5) must be made “within a
Fed. R. Civ. P. 60(c).
“When moving the court to modify a consent decree pursuant
to Rule 60(b), the party seeking an alteration bears the initial
burden of establishing that a significant change in
circumstances warrants the modification.
This burden may be met
by showing that there has been a significant change either in
factual conditions or in law.”
Barcia v. Sitkin, 367 F.3d 87,
99 (2d Cir. 2004) (citation omitted).
“[O]nce a party carries
this burden, a court abuses its discretion when it refuses to
modify an injunction or consent decree in light of such
Horne v. Flores, 557 U.S. 433, 447 (2009) (citation
Ultimately, if a party “establishes reason to modify
the decree, the court should make the necessary changes; where
it has not done so, however, the decree should be enforced
according to its terms.”
Cty. Of Westchester, 802 F.3d at 436
n.118 (quoting Rufo v. Inmates of Suffolk Cty. Jail, 502 U.S.
367, 393 (1992)).
The “changed circumstances” doctrine is particularly
pertinent where the injunction at issue “remain[s] in force for
many years,” because “the passage of time frequently brings
about changed circumstances -- changes in the nature of the
underlying problem, changes in governing law or its
interpretation by the courts, and new policy insights,” which
“warrant reexamination of the original judgment.”
U.S. at 447-48 (citation omitted).
In general, “courts should
apply a flexible standard” when “deciding whether a significant
change in facts or law warrants revision of a consent decree.”
Cty. of Westchester, 802 F.3d at 436 (citation omitted); see
Rufo, 502 U.S. at 381.
Where a party resists the provisions of
Consent Decree, or has been untimely in complying with it,
modification of the Consent Decree is particularly appropriate.
United States v. Sec’y of Housing & Urban Dev., 239 F.3d 211,
217-18 (2d Cir. 2001); Juan F. By & Through Lynch v. Weicker, 37
F.3d 874, 879 (2d Cir. 1994).
County’s Motion To Eliminate The Monitor
The County argues that it should be relieved from the
monitoring provisions of the Consent Decree because the County’s
“list of outstanding obligations has narrowed considerably.”
argues that the Government and the Court can perform the tasks
assigned by the Consent Decree to the Monitor and do so more
quickly and with no cost imposed on the County.
The Consent Decree states that a Monitor shall serve “for
so long as the County’s obligations set forth in this
Stipulation and Order remain unsatisfied.”
obligations that the County assumed when it executed the Consent
Decree remain unsatisfied, and the Monitor is therefore still
The County’s completion of some of its obligations
under the Consent Decree does not, therefore, warrant the change
in the Consent Decree the County seeks.
As described above, the monitorship is an essential
component of the Consent Decree.
The Monitor is charged with
performing important work to assist the County in reaching the
goals of the Consent Decree and in assessing the County’s
efforts to do so.
The Monitor’s work to date has been of
invaluable assistance to the parties and the Court and there is
no reason to anticipate that the Monitor’s work will not be as
critical in the final stages of the Consent Decree.
neither the Government nor the Court are in a position to
perform many of the tasks the Consent Decree assigns to the
It is in the interest of the parties, the Court, and the
citizens of Westchester County to achieve the objectives of the
Consent Decree as expeditiously as possible and to bring this
litigation to a close.
A Monitor will be of enormous assistance
in achieving this shared goal.
Government’s Motion To Remove the Fee Cap
The Government moves to amend the Consent Decree to remove
the presumption that the Monitor’s annual fees and expenses will
be capped at $175,000 annually, and requiring an application to
the magistrate judge to incur fees and expenses beyond that
The Government proposes that paragraph 17(b) be amended
in the following way:
(b) During the first two years following the entry of
this Stipulation and Order, the Monitor shall incur no
more than $250,000 in annual fees and expenses for
which the County is responsible;, and no more than
$175,000 in such fees and expenses annually
thereafter, provided that the Monitor may make an
application to the magistrate judge to incur fees and
expenses for which the County shall be responsible
beyond those amounts upon a showing by the Monitor
that such fees are appropriate to fulfill the
obligations set forth in this Stipulation and Order.
The Government has demonstrated that this modification is
not only warranted but necessary to the successful, expeditious
completion of the Consent Decree.
The County’s resistance to
the Consent Decree it entered in 2009 is well documented in the
Opinions issued by the Second Circuit and this Court.
resistance exponentially increased the size and complexity of
the work imposed by the Consent Decree on the Monitor.
scale of this resistance was certainly unexpected, since the
County was obligated not only to fulfill the obligations it
assumed under the Consent Decree it negotiated, but to do so in
Sec. Plans, Inc. v. CUNA Mut. Ins. Soc., 769 F.3d
807, 817 (2d Cir. 2014).
The Consent Decree provides that the Monitor shall be paid
“reasonable compensation comparable to that received by
personnel and consultants of similar skill and experience.”
Johnson’s work over the past seven years amounted to fees and
expenses of approximately $11 million, more than five times
higher than the maximum amount under the fee cap over seven
The Monitor’s firm bore the brunt of these expenses.
The mismatch of the fee cap with actual fees and expenses
was problematic in the search to find a replacement Monitor.
The three qualified candidates with prior state or federal
judicial experience all indicated that the fee cap posed
problems for them and/or their firms.
The Government moved to
modify the Consent Decree a few months after the former
Monitor’s resignation, and after having conducted a search for
This application is therefore brought within a
The Government’s proposed modification is narrowly tailored
to address the change in facts.
The seven-year history of the
County’s noncompliance and the Monitor’s fees and expenses
demonstrates that a presumption of $175,000 in annual fees and
expenses is unrealistic and counter-productive.
cap will add to the County’s incentives to work cooperatively
and speedily to comply with its outstanding obligations and
bring the Consent Decree to an end.
modification protects the County against excessive fees as the
Monitor must make an application to the Magistrate Judge to
incur fees and expenses and demonstrate that such fees are
appropriate to fulfill the obligations of the Consent Decree.
The County argues that there has been no material change
in facts because the Monitor has not performed any more work
than contemplated in the Consent Decree.
This is demonstrably
As noted by the Government, “it requires less work to
report on compliance than to detail and describe noncompliance.”
The County’s breaches of the Decree significantly increased the
workload for the Monitor.
The County argues that the Government’s motion to remove
the fee cap is improper because it only seeks relief for a third
party to the Consent Decree, the Monitor.
This is incorrect.
The Government has a duty to appoint a replacement Monitor in
its “sole discretion,” in consultation with the County.
the Government moves for relief from the Consent Decree so that
it may discharge its duties and ensure that a qualified Monitor
III. Motion To Appoint A New Monitor
The Government moves to appoint Stephen C. Robinson as the
new Monitor under paragraph 11 of the Consent Decree.
Government’s selection of a Monitor is in its “sole discretion
but with input from the County.”
The Government conducted a search for a new Monitor,
consulted with the County, and identified the candidate it
believes should replace Mr. Johnson.
The County does not argue
that Mr. Robinson is not well qualified for the position of
Indeed, the County has no objection to the appointment
of Mr. Robinson other than its objection to any monitor.
The Government’s December 30, 2016 motions to remove the
fee cap and appoint Stephen C. Robinson as Monitor are granted.
The County’s January 20, 2017 motion to eliminate the
monitorship is denied.
New York, New York
February 23, 2017
United States District Judge
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