On Monday, August 10, 2009, U.S. District Court Judge Denise Cote approved an historic $62.5 million settlement agreement in U.S. ex rel. Anti-Discrimination Center v. Westchester County. The ground-breaking litigation is the first to employ the federal False Claims Act ("FCA") to enforce a County's obligation to "affirmatively further fair housing." The landmark settlement combines FCA remedies with those traditionally used in housing desegregation litigation. With close oversight by a federal monitor, Westchester was required to appropriate and spend nearly $52 million in County funds to develop at least 750 affordable housing units in Westchester neighborhoods with very small African-American and Latino populations.

The Anti-Discrimination Center ("ADC") filed its complaint, under seal, in April 2006, alleging that Westchester had, over a period of 6 years, received $52 million in HUD and other government funds under false pretenses. ADC alleged that during this period, Westchester falsely certified that it had complied with its obligation under the federal Fair Housing Act to affirmatively further fair housing ("AFFH") in order to obtain the funds. Specifically, ADC alleged that the County failed to consider race-based impediments to fair housing choice; failed to identify and take steps to overcome impediments; and failed to meet its obligation to maintain records concerning its efforts. The U.S. Department of Justice ("DOJ") initially declined to intervene in the litigation, and the complaint was unsealed and served on Westchester in January 2007. Judge Cote denied the County's motion to dismiss in a published ruling on July 13, 2007. In that ruling, Judge Cote found that an interpretation of "affirmatively further fair housing" that excludes consideration of race would be an "absurd result." 

After extensive discovery, in February of 2009, Judge Cote granted partial summary judgment for ADC, holding that the County had made false certifications on seven annual AFFH certifications and on more than a thousand implied certifications of compliance when it requested a drawdown of HUD funds. Judge Cote found that the AFFH certification was not a mere boilerplate formality, but rather was a substantive requirement, rooted in the history and purpose of the fair housing laws and regulations, requiring the County to conduct an analysis of impediments, take appropriate actions in response, and to document its analysis and actions.

Following the summary judgment decision, the Obama Administration took a new look at the case and decided to intervene for the purpose of assisting the parties in negotiating a settlement. In addition to the $52 million in funds that the County must spend to develop new affordable housing in white municipalities of the County, the agreement required the County to pay $7.5 million as a relator's share under the FCA to the ADC, and $2.5 million in attorney's fees.

Case Citation

United States of America ex rel. Anti-Discrimination Center of Metro New York, Inc. v. Westchester County, New York, No. 06 Civ. 2860 (DLC) (S.D.N.Y.)

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