Case 1:06-cv-02860-DLC Document 529 Filed 07/21/15 Page 1 of 38

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK
................................................................................ x
UNITED STATES OF AMERICA ex rel.
ANTI-DISCRIMINATION CENTER OF
METRO NEW YORK, INC.,
Plaintiff,

06 Civ. 2860 (DLC) (GWG)

v.
WESTCHESTER COUNTY, NEW YORK,
Defendant.
.................................................................................x

MEMORANDUM OF LAW OF THE UNITED STATES

IN SUPPORT OF THE MONITORS REPORT AND RECOMMENDATION AND
IN OPPOSITION TO THE OBJECTIONS FILED BY WESTCHESTER COUNTY
AND FOR CONTEMPT

PREET BHARARA
United States Attorney for the
Southern District of New York
Attorney for Plaintiff

DAVID J. KENNEDY
Assistant United States Attorney
86 Chambers Street
New York, New York 10007
Telephone: (212) 637- 2733
Fax: (212) 637-0033
E-mail: david.kennedy2@usdoj.gov
- Of Counsel -

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TABLE OF CONTENTS

PRELIMINARY STATEMENT ..................................................................................................1

STATEMENT OF FACTS ............................................................................................................2
A. The False Claims Act Action and Settlement ...........................................................2
B.

Provisions of the Consent Decree Applicable to the Current Dispute ..................3

C. The Conifer Development and the Countys Role ...................................................4

1. The Monitor Approves the Conifer Development, and the
Town Board Approves a Special Permit for the Conifer Development
Subject to Variances ...................................................................................................5
2. Local Opposition Arises to the Conifer Development, and the County
Denies Funding, but the Variances Are Ultimately Approved ..............................6
3. The County Conditionally Approves Funding for the Conifer Development
in 2014, Subject to Conifers Obtaining the Necessary Variances, Which Does
Not Occur Until 2015 .................................................................................................8
4. The Delay in Approving the Variances, and in the Issuance of a Building
Permit, Leads to Litigation Over the Duration of the Special Permit for the
Conifer Development .................................................................................................9
D.

The Monitors Report and Recommendation .......................................................10

ARGUMENT ...............................................................................................................................14
POINT I

THE COUNTYS PROCEDURAL OBJECTION

TO THE MONITORS REPORT IS BASELESS ............................................15

POINT II

THE MONITOR CORRECTLY CONCLUDED THAT THE

COUNTY FAILED TO MEET THE BENCHMARKS OF THE CONSENT
DECREE ...............................................................................................................17
A. The Term Financing in Place Requires an Unreserved,
Written Commitment for the Full Amount of Funds Necessary
for the Project ..............................................................................................17
B. Because the Countys Financing for Chappaqua Station
Includes Preconditions, There Is No Financing in Place for
Chappaqua Station .....................................................................................20

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POINT III

THE MONITOR CORRECTLY CONCLUDED THAT THE COUNTY

FAILED TO USE ALL AVAILABLE MEANS AS APPROPRIATE
TO EFFECTUATE THE CONSENT DECREE ..............................................23

POINT IV

THIS COURT SHOULD FIND THE COUNTY IN CONTEMPT OF ITS

OBLIGATIONS UNDER THE CONSENT DECREE AND ORDER
APPROPRIATE REMEDIES ............................................................................28
A. The Legal Framework ..................................................................................28
B. The County Is in Contempt of Paragraph 28 of the Consent Decree,
and Should Be Required to Escrow an Amount Sufficient to
Purge Its Contempt ..............................................................................................30
C. The County Is In Contempt of Paragraph 7 of the Consent Decree,
and Should Be Required to Pay a Penalty Unless It Purges Itself
of Contempt ..........................................................................................................33

CONCLUSION ............................................................................................................................34

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Plaintiff the United States of America (the Government) respectfully submits this
memorandum of law in support of the Report and Recommendation of the Monitor, James E.
Johnson, Esq. (the Monitor), filed on May 8, 2015 (the Report, submitted as Exhibit A to the
Declaration of David J. Kennedy, dated July 21, 2015), and in opposition to the objections to the
Report filed by the County of Westchester (the County).
PRELIMINARY STATEMENT
The Monitors Report brings to light yet another violation by the County of the consent
decree into which the County entered on August 10, 2009, to avoid paying an approximately
$150 million liability under the False Claims Act. (A copy of the Stipulation and Order of
Settlement and Dismissal is attached to the Kennedy Declaration as Exhibit B (the Consent
Decree).) Since the Consent Decree was entered, the County Executive failed to promote
legislation to prohibit discrimination based on source of income, as the County had agreed; the
County has failed for years to submit to HUD an analysis of impediments to fair housing, as the
County had agreed; and the County has now both missed a benchmark for the construction of
affordable housing units under the Consent Decree as well as failed to take legal action to
address local opposition to the project violating two more provisions of the Consent Decree.
The Countys latest violation is serious and unmistakable. The Consent Decree sets
specific benchmarks for the number of units with financing in place, as an essential element of
the relief contemplated by court order. Because the Monitor correctly determined that the County
did not meet the mandatory benchmark, the conclusions of the Report should be upheld, and the
Court should impose a variety of remedial measures, including a finding that the County is in
contempt, and that remedial measures should be taken to permit the County to purge itself of
contempt.

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STATEMENT OF FACTS
A.

The False Claims Act Action and Settlement

As set forth in many prior opinions of this Court, the district court, and the Second

Circuit, this dispute originated with a qui tam suit filed under the False Claims Act. See County
of Westchester v. Dept of Housing & Urban Dev., 778 F.3d 412, 414-15 (2d Cir. 2015)
(Westchester III); United States ex rel. ADC v. Westchester County, 712 F.3d 761, 765-67 (2d
Cir. 2013) (Westchester II). The County had applied for, and received, about $50 million in
funds from HUD, a condition of which was that the County affirmatively further fair housing,
42 U.S.C. 5304(b)(2) and 12705(b)(15), and certify to HUD that it was doing so. As the
district court eventually held, these certifications were false. See United States ex rel. ADC v.
Westchester County, 495 F. Supp. 2d 375, 387-88 (S.D.N.Y. 2007); 668 F. Supp. 2d 548, 565
(S.D.N.Y. 2009) (Westchester I). The district court reserved for trial whether the Countys
false certifications were presented knowingly. Id. at 567-68.
On August 10, 2009, the Government elected to proceed with the action, filing a
complaint in intervention alleging violations of the False Claims Act and the Housing and
Community Development Act by the County. Simultaneously, the parties agreed to, and the
district court soon approved, the Consent Decree, in which the County agreed to extensive
injunctive relief instead of paying up to $150 million in potential damages. See Westchester I,
712 F.3d at 765-66. In the Consent Decree, the County agreed that a Monitor would oversee
compliance, and assess whether the County has taken all possible actions to meet its obligations
. . . including . . . promoting inclusionary and other appropriate zoning by municipalities by
offering incentives, and, if necessary, taking legal action. (Consent Decree 15.)

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Since the entry of the Consent Decree, there has been extensive litigation relating to the
Countys failure to comply. First, the Second Circuit concluded that the County Executive
breached the Consent Decrees requirement that he promote legislation that would prohibit
discrimination based on source of income when he vetoed it instead. See Westchester II, 712
F.3d at 765-67. Second, the district court rejected the Countys challenge, filed under the
Administrative Procedure Act (APA), to HUDs reallocation of FY2011 funding, based on the
Countys failure to comply with the Consent Decrees requirement that it provide an Analysis of
Impediments (AI) that was deemed acceptable by HUD. (Consent Decree 32.) The Second
Circuit ultimately affirmed the district court as to those FY2011 funds that were reallocated, on
the ground that the case was moot, but reversed and remanded with respect to funds that had not
been reallocated. See Westchester III, 778 F.3d at 414-15. Third, the district court earlier this
year denied the Countys application for a preliminary injunction enjoining HUD from
reallocating FY2013 and FY2014 funds, again based on the Countys failure to provide an
acceptable AI, see 15 Civ. 1992 (DLC); the County appealed and the Second Circuit has stayed
any reallocation pending further briefing, see 15-979 (2d Cir.). By an extensive and thorough
Opinion and Order dated July 17, 2015, however, the district court dismissed the Countys APA
suits relating to the FY2011, FY2013, and FY2014 funds; the County has appealed yet again, for
the fourth time.
B.

Provisions of the Consent Decree Applicable to the Current Dispute

This new dispute addressed by the Report concerns a particularly important provision of

the Consent Decree. Paragraph 7 of the Consent Decree requires that the County ensure the
development of at least 750 new affordable housing units (Consent Decree 7), and paragraph
23 sets forth the timeline, with interim benchmarks, for the development of such units:
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By end of
calendar year

Sites with financing

in place
(number of units)

2010
2011
2012
2013
2014
2015
2016

Units with
building permits

100
200
300
450
600
750

50
125
225
350
525
750

(Consent Decree 23.) The County has further obligations to ensure the development of these
units. Specifically, paragraph 7 of the Consent Decree further provides that:
(i)
The County shall use all available means as appropriate to
achieve the objectives set forth in this paragraph, including, but not
limited to, developing financial or other incentives for other entities to
take steps to promote the objectives of this paragraph, and conditioning
or withholding the provision of County funds on actions that promote
the objectives of this paragraph. . . .
( j ) In the event that a municipality does not take actions needed to
promote the objectives of this paragraph, or undertakes actions that
hinder the objectives of this paragraph, the County shall use all available
means as appropriate to address such action or inaction, including, but
not limited to, pursuing legal action. The County shall initiate such legal
action as appropriate to accomplish the purpose of this Stipulation and
Order to AFFH.
(Consent Decree 7(i)-(j).) As detailed further below, the Monitor correctly concluded that the
County failed to comply with these provisions.
C.

The Conifer Development and the Countys Role

The current dispute arises from the proposed development of a 28-unit property by

Conifer Realty LLC (Conifer).

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1.

The Monitor Approves the Conifer Development, and the Town Board
Approves a Special Permit for the Conifer Development Subject to Variances

In 2010, Conifer LLC proposed an affordable housing development to be located at 54

Hunts Place, in the Village of Chappaqua, Town of New Castle, known as Chappaqua Station
(Chappaqua Station). Chappaqua Station would be east of the Saw Mill River Parkway, west
of downtown Chappaqua, and immediately north of the Metro-North Rail station at Chappaqua,
providing access into New York City. Families in Chappaqua Station would be able to send their
children to the Chappaqua public school system. (Kennedy Decl. Exh. C (Excerpts of Monitor
2014 Report, at 10 (filed Apr. 1, 2015).) The location would be eligible to be counted under the
Consent Decree, as the project would create affordable housing in Chappaqua, which is located
in the overwhelmingly white Town of New Castle. According to the 2010 Census, New Castle is
4% Hispanic and 1.6% black, well below the Westchester County averages of 21.8% Hispanic
and 14.6% black. (Kennedy Decl. Exh. D.)
Both the Monitor and the Town Board raised concerns about the location and design of
Chappaqua Station, which Conifer ultimately addressed. The Monitor raised concerns about the
location of Chappaqua Station and its configuration, and Conifer made what the Monitor called
significant changes to the project in response. (Kennedy Decl. Exh. C, at 11.) By letter dated
September 7, 2012, the Monitor advised that in his view Chappaqua Station furthers the goals
of the consent decree and praised Conifer for its willingness to make appropriate changes. (Id.)
The Monitor further stated that Chappaqua Station would be eligible to be counted toward the
benchmarks of the Consent Decree. (Id.) Notwithstanding these developments, the County states
that [t]he Monitor admitted to having concerns about the developments site location and
configuration in 2012 (County Br. at 2), apparently to lend credence to the Towns efforts to
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delay the project. As the Monitor made very clear well before the County filed its latest brief, his
prior concerns, now addressed, should not be used to lead the public to believe that the Monitor
continues to harbor concerns about the development. He doesnt. (Kennedy Decl. Exh. C, at
12.) To the contrary, according to the Monitor, Conifer has addressed the Monitors concerns
adequately and admirably. (Id. at 17.)
On September 10, 2013, the Town Board granted Conifer a special permit for Chappaqua
Station. (Kennedy Decl. Exh. E.) The special permit, however, identified certain variances that
Chappaqua Station would have to obtain from the New York State Hudson Valley Regional
Board of Review (Regional Board) before the Town Building Inspector could issue a building
permit. (Id. 2.8.6.) The special permit further provided that [o]ther variances may be required
upon further review, upon receipt of a complete Building Permit application, and/or upon final
design. (Id. 2.8.6.1.)
2.

Local Opposition Arises to the Conifer Development, and the County Denies
Funding, but the Variances Are Ultimately Approved

Once the special permit was granted in September 2013, the prospect of Chappaqua
Station aroused local opposition. One slate of candidates running for the New Castle Town
Board, including Robert J. Greenstein for Town Supervisor, made Chappaqua Station the subject
of a campaign flyer, titled Welcome to the neighborhood! depicting the empty field along the
Metro-North rails upon which Chappaqua Station would be located, and stating:
The Town Board voted to approve the affordable housing project on Hunts
Lane. The property is situated between a highway, railroad, and a busy
bridge. There will be no yard. Is this a suitable location for 28 families to
live?
Our guest speakers will discuss how we can stop this travesty, and adhere
to a policy of responsible affordable housing with locations that are
worthy of human habitation.
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(Kennedy Decl. Exh. F.) Among the guest speakers at the community meetings advertised in the
flyer are a founding member of Chappaqua for Responsible Affordable Housing, and County
Executive Robert Astorino. (Id.) The slate of candidates opposed to Chappaqua Station won the
November 2013 town election. Incoming Town Supervisor Greenstein spoke at a December 10,
2013, meeting of the Regional Board in opposition to Chappaqua Station:
[B]y the way, when I ran for Supervisor one of the things I ran on is against this
proposal. And the elephant in the room not mentioned yet is this affordable
housing project and there are people here, advocates for affordable housing. This
whole side of the room are people either for the developer, other affordable
housing proponents, the people that work for companies to build as much as is
possible. This side of the room is people from New Castle.
(Drummond Decl. Exh. K, at 83.)
On December 16, 2013, the Westchester County Board of Legislators rejected a bill that
would have provided funding for Chappaqua Station. See Elizabeth Ganga, Westchester
legislators vote down financing for Chappaqua affordable housing, Lohud Westchester Blog,
Dec. 17, 2013 (Kennedy Decl. Exh. G). Members of the Board reportedly cited the concerns
about the project from the newly elected Town Supervisor, and agreed to reconsider the funding
proposal at a future date. (Id.)
During this period, in which local opposition threatened to thwart the project entirely, the
County did little to encourage the development of Chappaqua Station. Although Deputy County
Commissioner Norma Drummond asserts that she attended all of the Regional Board meetings
(see Drummond Decl. 17-18), she is identified only once and speaks only once, on December
10, 2013, and the transcript of her remarks in support of Chappaqua Station take up less than a
page and a half. (Drummond Decl. Exh. K, at 127-29.)

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3.

The County Conditionally Approves Funding for the Conifer Development in

2014, Subject to Conifers Obtaining the Necessary Variances, Which Does
Not Occur Until 2015

The process of approving Conifers variance applications before the Regional Board
lasted throughout 2014. Several sessions of the Regional Board in 2014 were devoted to hearing
and addressing concerns as to safety at Chappaqua Station. As the year and that process neared
its end, the County Board of Legislators approved a conditional funding bill for Chappaqua
Station, on November 24, 2014, to issue bonds to finance the cost of Chappaqua Stations
development. The BOLs approval of financing, however, is expressly contingent upon the
approval of state and local variance requests: The issuance of bonds or notes pursuant to this
Act is subject to the approval of all required State and Municipal variances. (Kennedy Decl.
Exhs. H (Westchester Cty. Act No. 2014-213, at 1); I (Westchester Cty. Act No. 2014-214, at
1).) The County Board of Legislators therefore expressly made the financing conditional upon
the outcome of the variance process that was still pending before the Regional Board, and
potential further variances that may subsequently imposed by the Building Inspector.
Ultimately, on January 22, 2015, the Regional Board approved the variances, over the
opposition of Town Supervisor Greenstein and Town Building Inspector William J. Maskiell.
(Kennedy Decl. Exh. J; see also Drummond Decl. Exh. O.)1 The Regional Board did not
memorialize its decision until April 27, 2015. (Kennedy Decl. Exh. K.) As of the December 31,

The County discusses and includes lengthy hearing transcripts regarding the debates in the
Regional Board over fire and safety issues at Chappaqua Station. (See, e.g., County Br. at 3-4,
22-23, 29; Drummond Decl. Exhs. K, L, M, N, O.) Given that the Regional Board has now
approved the requested variances, the County appears to reiterating these concerns primarily to
cast doubt upon the viability of Chappaqua Station, contradicting their claim that the Chappaqua
Station units should be included in determining whether the County met its Court-ordered
benchmark.
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2014 deadline in paragraph 23 of the Consent Decree, therefore, Chappaqua Station did not have
either the state or local variances that the County placed as conditions upon funding.
4.

The Delay in Approving the Variances, and in the Issuance of a Building

Permit, Leads to Litigation Over the Duration of the Special Permit for the
Conifer Development

The decision by the Regional Board to grant Conifers application for variances,
however, does not permit Chappaqua Station to proceed, because Conifer still needs a building
permit. There are two complications to Conifers obtaining a building permit.
The first complication was resolved only after extended delay and litigation. The Town
took the position that the special permit granted to Conifer expired on or about March 20, 2015;
accordingly, unless the Regional Board had memorialized its decision by that date (which it had
not) and unless Conifer obtained a building permit by that date (which it had not, and still has
not), Chappaqua Station could not proceed unless it applied for an extension request. Counsel for
Conifer interpreted the provisions of the special permit differently, and filed suit in New York
State Supreme Court on February 19, 2015. See Conifer Realty, LLC v. Town of New Castle,
Index No.: 52286/2015 (Sup. Ct. Westchester Cty.) (Kennedy Decl. Exh. L.) After extended
litigation, in which the County took no part, the Court granted the Towns motion to dismiss the
complaint, by decision dated May 6, 2015. (Id.) The next day, Conifer requested a two-year
extension of the duration of the special permit, and on May 26, 2015, the Town voted, with
Supervisor Greenstein abstaining, to extend the duration of the special permit for Chappaqua
Station for eighteen months from that date that is, until November 2016. (Kennedy Decl. Exh.
M.)
The second complication remains unresolved. The building permit must be issued by
Town Building Inspector Maskiell, who opposed Chappaqua Station in the past, and spoke out
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against it at the Regional Board meetings on December 10, 2013 (Drummond Decl. Exh. K, at
71-82), again on April 8, 2014 (Drummond Decl. Exh. L, at 49-56), and again on December 9,
2014 (Drummond Decl. Exh. N, at 46-54). According to a representative of Conifer, Town
officials met with Conifer on March 26, 2015, to discuss the building permit application, and
Maskiell advised that he would not perform any work on [Conifers] permit application or the
drawings until the $152,000 permit fee was paid, at which point the drawings would go all the
way to the bottom of the pile. (Report at 6 (quoting Report Exh. 12, at 1).) Maskiell has yet to
approve the building permit. Even if he does, however, it is not clear if the project could move
forward, because the special permit contains the additional condition that [o]ther variances may
be required upon further review, upon receipt of a complete Building Permit application, and/or
upon final design. (Kennedy Decl. Exh. E, 2.8.6.1.) If these other variances are required by
the Building Inspector, Conifer will not have met the requirements of the Countys funding,
which is subject to the approval of all required State and Municipal variances. (Kennedy Decl.
Exhs. H, I.) There may, therefore, be additional conditions upon funding for Chappaqua Station
of which Conifer (and everyone else, apart from the Building Inspector) is unaware.
D.

The Monitors Report and Recommendation

The Monitor and the County, and many others, have long had discussions relating to the

Conifer property; specifically, whether the County is entitled to include Chappaqua Station and
its 28 units to meet the benchmarks specified in the Consent Decree.
On September 24, 2014, the County submitted Funding Advisory No. 25 to the Monitor,
to determine whether Chappaqua Station would be eligible under paragraph 7(a) of the Consent
Decree. (Kennedy Decl. Exh. C, at 10-19.) By letter dated December 15, 2014, the Monitor
wrote to the County to express his preliminary view that the 28 units of Chappaqua Station
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may not be eligible to count toward the benchmark, because at that time the Regional Board had
not granted the necessary variances, but invited the County to provide good cause as to why the
units should be counted. (Report at 6-7, and attached exhibits.) The County responded on
December 18, 2014. (Meehan Decl. Exh. 5.)
On February 11, 2015, the Monitor wrote to the County again, reiterating his concern that
the Chappaqua Station may not be included in the count of eligible units, due to the lack of final
building permit approvals. (Report at 6-7, and attached exhibits.) And on April 1, 2015, the
Monitor wrote to the County yet again, sending similar letters to the Government and to the
Town Supervisor of New Castle, advising that he did not have sufficient information to conclude
that Chappaqua Station should be counted toward the Countys benchmark obligations. (Id.) The
Monitor noted that he had also addressed the issue in his annual report on the Countys
compliance with the Consent Decree for the calendar year 2014, filed on April 1, 2015, and that
the issue was particularly salient because if the 28 units at Chappaqua Station were not counted
as eligible AFFH units, the County would be 24 units short of its obligation to have 450 units
with financing in place as of December 31, 2014. (Id.)
The Monitor asked for the Countys input by April 15, 2015, and the County responded
by letter of that date, asserting that the Chappaqua Station units ought to be counted toward the
benchmark. (Id.) The Government also responded by letter on the same date, taking the opposite
position. The Governments letter of April 15, 2015, noted first that the County had an
affirmative duty to address efforts by the Town of New Castle to hinder the development of
Chappaqua Station, but the County had failed to do so. (Kennedy Decl. Exh. O, at 1 (quoting
Westchester I, 712 F.3d at 769).) The Governments letter further noted that Chappaqua Station
units could not be counted toward the benchmark of the Consent Decree because the County
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failed to put unreserved financing in place for the project instead, the County made financing
contingent upon an event that had not yet occurred (id. at 2), and as to the building permits and
the additional variances such approval may entail, still has not yet occurred.
In describing the background to this dispute, the County maintains that [t]he Monitors
erroneous assertions and conclusions were so incorrect that the United States could not even
support them and avers that the parties were in agreement, but the Monitor was intent upon
finding a breach. (County Br. at 9.) 2 The County complains that the Government changed its
position between its letters of December 23, 2014, and April 15, 2015. (County Br. at 11.)
The County is seeking to mislead the Court. To begin with, the Governments letter of
December 23, 2014, did indeed agree that the listing of benchmarks in paragraph 23 of the
Settlement Agreement contemplates that up to 100 units may have financing in place but no
building permits, but these units may nevertheless satisfy this interim benchmark under the
Settlement Agreement. (Kennedy Decl. Exh. N.) But that letter also went on to say:
[W]hether or not the County can receive credit for the 28 proposed
Chappaqua Station units depends in part upon the accuracy of the
statements that the County makes in its December 18, 2014 letter. If there
is a written commitment for the full amount of funds necessary for the
construction of Chappaqua Station as a result of the BOLs actions on
November 24, 2014, then the units can be counted toward the requirement
that there be at least 450 units with financing in place. The Countys letter
of December 18, 2014, does not fully answer this question.
(Id. (emphasis added).) Once the Government was provided with the financing arrangements that
the County had passed, which the County failed to include with its letter of December 18, 2014,

The County suggests that the Monitor was seeking to foment disagreement where there was
none, titling one section of its brief, The Monitor Begins to Search for Breach. (County Br. at
6.) The Countys own actions have placed it in breach. The Monitor sought to assess the
positions of the parties as part of his duties under the Consent Decree.
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the Government concluded that the County did not meet the requirements of the Consent Decree,
writing in its letter to the Monitor of April 15, 2015, that:
[Y]ou note that the Countys financing for Chappaqua Station is
contingent upon approval of the State and municipal variances, and ask if
the conditions cannot be achieved, whether the units should be credited
against the interim benchmark for units with financing in place. They
should not. As we previously noted in our letter to you of December 23,
2014, financing in place means that the project must have a written
commitment for the full amount of funds necessary for construction of the
project, including the units. Here, the County did not put unreserved
financing in place, but instead expressly made the financing contingent
upon a condition that has not occurred.
(Kennedy Decl. Exh. O (emphasis added).) Thus it is false for the County to claim that the
Government altered its position after receiving the suggestive April 1, 2015 letter from the
Monitor (County Br. at 11) to the contrary, the Government set forth its views in the letter of
December 23, 2014, thereafter received the funding documents from the County, and reiterated
those very same views and applied them to the documents in its letter of April 15, 2015.
After reviewing the submissions of the County and the Government on the dispute, the
Monitor issued his report on May 8, 2015. The Monitor concluded that, first, Chappaqua Station
and its proposed 28 units should not be credited under the benchmark provisions of the Consent
Decree requiring 450 units with financing in place by December 31, 2014; as a result, the County
has failed to meet these benchmark provisions by 24 units and is therefore in violation of
paragraph 23 of the Consent Decree. (Report at 1.) Second, the Monitor concluded that the
County had failed to meet its obligations under paragraph 7(i) and (j) of the Consent Decree to
use all available means as appropriate to address New Castles opposition to Chappaqua
Station. (Id.)
The County immediately objected, by letter dated May 8, 2015, maintaining that the
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Monitor was obliged to meet and confer with the parties prior to issuing his Report. (Meehan
Decl. Exh. 1.) The Monitor responded, by letter of the same day, noting that in addition to
soliciting the Countys views on the precise subject of the Report on three prior occasions by
letters of December 15, 2014, February 11, 2015, and April 1, 2015 he had discussed the
Chappaqua Station issue with the County, HUD, and the Government on March 13, 2015.
(Meehan Decl. Exh. 2.) The Monitor further expressed willingness to address the issue with the
County in a call with the Magistrate Judge (see id.); to the Governments knowledge, that call
never occurred. Instead, the County filed its objections to the Monitors Report on June 16, 2015.
ARGUMENT
On appeal from a Monitors Report, this Court conducts a de novo review of those
portions of the Report to which objections are filed. See 28 U.S.C. 636(b)(1) ; Fed. R. Civ. P.
72(b)(3). That said, this Court should review the Monitors analysis with deference given his
extensive experience with this matter, over nearly six years.
The Consent Decree embodies an agreement of the parties and is also an agreement
that the parties desire and expect will be reflected in, and be enforceable as, a judicial decree that
is subject to the rules generally applicable to other judgments and decrees. Rufo v. Inmates of
Suffolk County Jail, 502 U.S. 367, 378 (1992). A consent decree must be interpreted according to
the plain meaning of the language and the normal usage of the terms selected.Mastrovincenzo
v. City of New York, 435 F.3d 78, 103 (2d Cir. 2006) (quotation marks and alteration omitted).
Where, as here, the Monitor has correctly concluded that the County is in breach of its
obligations under the Consent Decree, the Court should order the County to comply. See, e.g.,
Spallone v. United States, 493 U.S. 265, 276 (1990) (courts have inherent power to enforce
compliance with their consent decrees). Until parties to such an instrument have fulfilled their
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express obligations, the court has continuing authority and discretion pursuant to its
independent, juridical interests to ensure compliance. EEOC v. Local 580, International Assn
of Bridge, Structural & Ornamental Ironworkers, 925 F.2d 588, 593 (2d Cir. 1991); see also
United States v. Local 359, United Seafood Workers, 55 F.3d 64, 69 (2d Cir. 1995) ([A] consent
decree is an order of the court and thus, by its very nature, vests the court with equitable
discretion to enforce the obligations imposed on the parties.). Directing the County to comply
with its obligations, or to pay the penalties owed under the Consent Decree, is fully appropriate
because [c]ourts have an affirmative duty to protect the integrity of a court decree where the
performance of one party threatens to frustrate the purpose of the decree. Barcia v. Sitkin, 79
Civ. 5831 (RLC), 79 Civ. 5899 (RLC), 2007 WL 222003, at*3 (S.D.N.Y. Jan. 25, 2007) (citing
Berger v. Heckler, 771 F.2d 1556, 1568 (2d Cir. 1985)).
POINT I
THE COUNTYS PROCEDURAL OBJECTION
TO THE MONITORS REPORT IS BASELESS
As a preliminary matter, the County contends that the Monitor violated paragraph 40 of
the Consent Decree, which provides that prior to the submission of reports to the Court, the
Monitor shall meet with representatives of the County and the Government to discuss
compliance issues, recommendations for corrective actions, and other matters relevant to the
reports. (Consent Decree 40.) The County asserts that the Monitor did not comply with these
provisions because the County allegedly received only a last minute advisory from a member of
the Monitors law firm that the Report was to be filed later that day. (County Br. at 13.)
The Countys objection on this point is baseless. First, there was abundant and extensive
notice and discussion of the Chappaqua Station issue between the Monitor and the County in the
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months leading up to issuance of the Report. The Monitor asked the County three times for its
views by letters dated December 15, 2014, February 11, 2015, and April 1, 2015 (Report at 67, and attached exhibits) and spoke with the County on March 13, 2015. The County strains
credulity to assert that [t]he County was never given the opportunity to have the discussion that
is expressly mandated by the Consent Decree (County Br. at 14) three rounds of letters and a
telephonic meet and confer is more than sufficient to provide the County with this opportunity.
Second, it is unclear what the County could possibly present in yet another meet and
confer session that would have provided information relevant to the dispute. The focus of the
Monitors report was the state of affairs as of December 31, 2014, and nothing that the County
could say or do in May 2015 could somehow change the situation that existed five months
earlier. The Meehan Declaration asserts that when the County was told by the Monitors staff
that the Report was going to be filed, the County had new and additional information that was
relevant to the issues being addressed and that [he] would like to discuss the matter with the
Monitor. (Meehan Decl. 2; see also County Br. at 13 (referring again to new and additional
information).) However, neither the Meehan Declaration nor the Countys brief discloses what
this new and additional information was, and the County cannot credibly prevail on its
objection by relying upon this undisclosed new and additional information.
Third, upon receiving the Countys letter raising its baseless objection that the Monitor
had not afforded the County adequate notice prior to the filing of the report, the Monitor
immediately wrote to counsel for the County and requested that the parties confer with the Court.
(Meehan Decl. Exh. 2.) The County failed to respond.
Finally, the Countys objection on this point ignores the fact that the Consent Decree
places the burden on the County, not the Monitor, to seek a meet and confer [i]f the County
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believes that market conditions or other circumstances outside of the Countys influence or
control will prevent it, or have prevented it, from meeting its obligations under this Stipulation
and Order, the County shall, as soon as possible . . . notify the Monitor in writing. (Consent
Decree 29.) The County therefore had the ability to address the problem that loomed before it
at the end of 2014 specifically, that it was in significant danger of failing to meet the
benchmark for 2014 due to the delays in Chappaqua Station. Instead of availing itself of the
mechanism that the Consent Decree arguably provided for the situation, the County instead
passed a financing arrangement contingent upon obtaining a building permit.
In any event, the Court should reject the Countys objection that the Monitors three
exchanges of letters, as well as a meet and confer by phone, somehow fails to satisfy the advance
notice and dispute resolution provisions of the Consent Decree.
POINT II
THE MONITOR CORRECTLY CONCLUDED THAT THE COUNTY FAILED
TO MEET THE BENCHMARKS OF THE CONSENT DECREE
The Monitors determination that the County breached paragraph 23 of the Consent
Decree is correct and should be sustained. As set forth above, paragraph 23 of the Consent
Decree requires that the County ensure that there is financing in place for 450 affordable
housing units by December 31, 2014; without the inclusion of the Chappaqua Station units, the
County has missed this benchmark.
A.

The Term Financing in Place Requires an Unreserved, Written

Commitment for the Full Amount of Funds Necessary for the Project
As the Monitor noted, the Consent Decree does not expressly define financing in place:

the term, however, is not uncommon in the law, wherein it is generally used to mean that a
borrower or developer has secured a loan. See, e.g., Jung Jae Lee v. Federal Street LA LLC, No.
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2:14-cv-06264-CAS-SS, 2015 WL 179787, at *4 (C.D. Cal. Jan. 12, 2015) (permitting claim for
fraud to proceed based upon defendants misrepresentation that they had financing in place);
Madison Financial, LLC v. Hunts Point Co-op. Market, Inc., Civ. No. 01-3830 (WHW), 2008
WL 724362, at *6 (D.N.J. Mar. 17, 2008) (equating financing in place with the securing of a
loan); European American Bank v. Klein, No. 89 CV 2162, 1990 WL 39871, at *1 (E.D.N.Y.
Mar. 30, 1990) (describing how plaintiff was asked to keep financing in place by maintaining
defendants access to a line of credit). At the very least, therefore, a party may have financing in
place by securing the funds necessary to meet the obligation.
The term financing in place further suggests an absence of contingencies or
preconditions that to be in place, the financing should be unreserved, binding, or firm. See,
e.g., Irving Capital Corp. v. Serologicals Acquisition, Inc., No. 85 Civ. 6383 (WCC), 1986 WL
2763, at *2 (S.D.N.Y. Feb. 27, 1986) (describing contract in which binding written
commitments are required for financing to be considered in place (emphasis added)). In the
contracts context, the alleged financing in place must be certain. See, e.g., Payer ex rel.
Transition Metals Technology, Inc. v. The SGL Carbon, LLC, No. 05-CV-0266E(F), 2006 WL
2714190, at *8 (W.D.N.Y. Sept. 22, 2006) (having financing in place requires something more
than attempts and efforts made to secure financing); Internet Homes, Inc. v. Vitulli, 887
N.Y.S.2d 534, 535 (N.Y. App. Div. 2004) (The plaintiff's unsubstantiated assertions that a line
of credit could be secured or that a closely-related corporation would supply the funds and the
conclusory allegation that it was ready, willing, and able to perform were insufficient to satisfy
its burden.). And in the bankruptcy context, a plan will not be confirmed unless the financing in
place is firm. See, e.g., In re Ralph C. Tyler, P.E., P.S., Inc., 156 B.R. 995, 997 (N.D. Ohio
1993) (rejecting plan because the plan [did] not indicate that there is firm financing in place
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and further noting that the source of funding must be shown to be firm . . . [in order to] meet the
feasibility requirement) (emphases added). The Governments position that the financing must
be unreserved and not contingent is thus well supported in law.
Finally, the Monitor properly considered the overall purpose of the Consent Decree in
deciding how to interpret the term financing in place. (Report at 12.) Contingent promises will
not suffice, because promises that are contingent upon a host of other conditions will not result in
the building of units, and the purpose of setting benchmarks for the development of units is to
incentivize the County to work with municipalities, developers, and other stakeholders to ensure
that legislative preconditions are satisfied as efficiently as possible. (Id. at 12-13.) Otherwise,
the County may simply make empty financing promises that it knows will never come to fruition
due to local opposition or other barriers.
For these reasons, the definition of financing in place offered by the Government and
relied upon by the Monitor is correct there must be a binding, or unreserved, written
commitment for the full amount of funds for the project. The County relies upon one case to
define financing to mean money raised from a source other than the purchaser, money other
than the money taken out of the purchasers own pocket, GPIF-I Equity Co., Ltd. v. HDG
Mansur Inv. Servs., Inc., 2013 WL 3989041, at *6 (S.D.N.Y. 2013), but does not specifically
define in place, except to argue that when Conifer needs the financing from the County,
such funds will be available. (County Br. at 16.) The Countys gloss on the words in place
does not answer the question, however: Conifer arguably needs the financing now to prove to
New Castle that Chappaqua Station can go forward, and it is not accurate to state that the funds
will be available; whether or not the funds will be available depends upon several as-yetunsatisfied contingencies, as described below.
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B.

Because the Countys Financing for Chappaqua Station Includes

Preconditions, There Is No Financing in Place for Chappaqua Station
Because the Countys legislation to authorize the issuance of bonds to finance Chappaqua

Station was made expressly contingent upon the approval of all required State and Municipal
variances (Kennedy Decl. Exhs. H, I), it was not financing in place within the meaning of the
Consent Decree. Not only were the required State variances not in place until April 2015, the
conditions of the special permit granted to New Castle are open-ended, and permit the Building
Inspector to require additional municipal variances.
As the Monitors Report explains, it is a basic principle of New York law that a
conditional variance does not become effective until the conditions are fulfilled. (Report at
14 (quoting Tracy Bateman Farrell et al., New York Jurisprudence: Buildings, Zoning, and Land
Controls 401); see also id. at 14-15 (citing La Sala v. Garcia, 70 N.Y.S.2d 833, 834 (N.Y. Sup.
Ct.), affd, 75 N.Y.S.2d 295 (App. Div. 1947)). In the words of one leading case, conditional
statutes such as the legislation passed by the County, sleep until the contingency contemplated
sets them in motion. (Report at 13 (quoting State v. Strong Oil Co., Inc., 433 N.Y.S.2d 345,
348 (N.Y. Sup. Ct. 1980).) The County does not dispute these basic principles of New York law.
The contingencies in the Countys financing are particularly problematic where, as here, there
have been numerous roadblocks to Chappaqua Station and even the approvals for the project are
all hedged with conditions as of this writing, Chappaqua Station can only obtain financing if
the building permits are approved without the imposition of additional municipal variances, as
authorized in the initial legislation by New Castle for the project. And even if the building
permits were approved now, in July 2015, without the imposition of additional municipal
variances, there is no dispute that as of December 31, 2014, Chappaqua Station had secured
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neither the necessary State variances (granted by decision of January 2015 and eventually issued
in April 2015) nor the potential municipal variances (which still have not been granted). Thus,
neither of the two financing conditions in the Countys legislation the approval of all
required States and Municipal variances was met as of December 31, 2014.
The conditions placed upon the funding for Chappaqua Station, moreover, differ from
those placed upon the funding for other projects under the Consent Decree. The paragraph
authorizing the issuance of bonds for the Chappaqua Station project states as follows:
The County is hereby authorized to contract to pay an amount not to
exceed ONE MILLION TWO HUNDRED SEVENTY FIVE
THOUSAND ($1,275,000.00) DOLLARS for the purchase of the
Property to be financed using County bond funds provided through
capital project BPL50. The expenditure of funds pursuant to this Act shall
be subject to the approval of all required State and Municipal variances.
(Kennedy Decl. Exh. H, I, (Act. No. 212-2014, 2 (emphasis added).) By contrast, the relevant
funding language in section 1 of the bond act legislation for the Waterwheel project in Ardsley,
New York, counted under the Consent Decree, provides that pursuant to state and local law:
bonds of the County in the aggregate amount of $935,000, or so much
thereof as many be necessary, are hereby authorized to be issued to
finance a portion of the cost of the acquisition of approximately 2.06 acres
of real property located at 867 Saw Mill River Road in the Village of
Ardsley . . . the foregoing in support of the Affirmatively Furthering Fair
Housing (AFFH) Development to be constructed on such site, at the
total estimates maximum cost, including closing soft costs, of $1,210,000.
(Kennedy Decl. Exh. P (Act No. 152-2012, 1).) Unlike the Chappaqua Station funding
legislation, there is no similar subject to the approval provision.3

The statutory language is thus inconsistent with the Countys claim that in every case that the
County has identified a unit as one with financing in place, the ultimate provision of the funds
toward the development has been contingent on many things, including the need for required
approvals to be in place and a closing to occur. Drummond Decl. 35.
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In response to the Monitors analysis, the County offers the strange assertion that if the
alleged conditional language of the Bond Acts had been stripped, there would be no practical
difference in the manner in which the development will receive funds from the County. (County
Br. at 19.) But the County has thereby conceded the argument. The statutory language being
what it is, the County cannot pretend that the language can be simply ignored or stripped,
because to do so would violate a fundamental tenet of statutory construction. See, e.g., Leocal v.
Ashcroft, 543 U.S. 1, 12 (2004) (we must give effect to every word of a statute wherever
possible); Collazos v. United States, 368 F.3d 190, 199 (2d Cir. 2004) (We are . . . obliged to
give effect, if possible, to every clause and word of a statute, and to render none superfluous.)
(internal quotations and citation omitted); Perry v. Dowling, 95 F.3d 231, 238 (2d Cir. 1996)
(statutes must be interpreted to give meaning to all of their terms); Andrew Crispo Gallery,
Inc. v. C.I.R., 86 F.3d 42, 44 (2d Cir. 1996) (Where possible, effect must be given to every
word.). The County cannot ask this Court to strip from its own legislative enactments
conditions that it now finds inconvenient.
Next, the County argues that, based upon a comparison of the benchmarks in the Consent
Decree, one would expect the number of units with building permits to lag behind the number of
units with financing in place. (County Br. at 15.) The Government does not disagree with that
observation, but it does not help the County here, because the County made the financing
contingent upon the permit. The special permit issued by New Castle provides that [o]ther
variances may be required upon further review, upon receipt of a complete Building Permit
application, and/or upon final design. (Kennedy Decl. Exh. E, 2.8.6.1 (emphasis added).) As
of this writing, the New Castle Building Inspector has yet to approve the building permit, or even
advise Conifer what additional variances may be require. Thus the Court need not decide
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whether the absence of a building permit, by itself, disqualifies a unit from being counted toward
the benchmarks of the Consent Decree, because in this case the municipality expressly reserved
the open-ended possibility that additional variances may be required in connection with the
projects application for a building permit. If Conifer does not even know what, if any, additional
variances will be required for Chappaqua Station and it is now July 2015, it is impossible to say
that Conifer obtained the approval of all required State and Municipal variances over six
months ago, by December 31, 2014.
In sum, the County passed legislation that permitted financing Chappaqua Station to go
forward only it if obtained certain state and municipal variances. The state variances were not
obtained until April 2015. There may be municipal variances still outstanding as of this date. As
a result, the County did not have financing in place for Chappaqua Station by December 31,
2014, and the units cannot be counted toward the benchmark.
POINT III
THE MONITOR CORRECTLY CONCLUDED THAT THE COUNTY
FAILED TO USE ALL AVAILABLE MEANS AS APPROPRIATE
TO EFFECTUATE THE CONSENT DECREE
The County also failed to comply with paragraph 7 of the Consent Decree, which
required it to use all available means as appropriate to address municipal resistance to the
development of Chappaqua Station. Instead, the County initially offered some early
encouragement, but then vitiated those efforts by rejecting funding in 2013. Once Chappaqua
Station experienced local opposition, the County merely stood on the sidelines; and when
Conifer was forced to resort to litigation to preserve its ability to develop the project, the County
literally did nothing.
In Westchester II, the Second Circuit made clear that the Countys responsibilities under
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the Consent Decree constitute affirmative dut[ies]. See Westchester II, 712 F.3d at 769-70.
When a municipality fails to take action to promote the objectives of the Consent Decree with
respect to the development of affordable housing units, or undertakes actions to hinder the
objectives of the Consent Decree, the County is obliged to use all available means as
appropriate to address such action or inaction, including, but not limited to, pursuing legal
action and developing financial or other incentives for other entities to take steps to promote
the objectives of the consent decree, and conditioning or withholding the provision of County
funds on actions that promote the objectives of the Consent Decree. (Consent Decree 7.)
To begin with, New Castle did indeed hinder the development of units of affordable
housing, after the County first derailed the project by disapproving funding on December 13,
2013. The County claims that it was an early supporter of the development, publicly indicating
as early as February 2011 that it would provide millions of dollars in financing (County Br. at
2), but then rejected legislation that would have provided the millions of dollars in financing it
promised. Similarly, the County claims that it made extensive efforts to ensure that the
Chappaqua Station development proceeded (County Br. at 4), but these extensive efforts
consist primarily of a handful of letters, akin to the handful of letters sent by the County
Executive in support of the source-of-income legislation which, the Second Circuit ruled in
Westchester II, was vitiated by the County Executives subsequent veto. See Westchester II, 712
F.3d at 771. The County also points to the fact that Deputy Commissioner Drummond testified in
support of the project but only once, only in brief, and only three days before the County Board
of Legislators voted to disapprove funding for Chappaqua Station, thereby eliminating whatever
support Drummonds testimony would have provided.
In terms of New Castles opposition to the project, the County dwells at some length on
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alleged fire and safety concerns raised in connection with the variances requested by Chappaqua
Station (County Br. at 22-24), but all of these variances were approved (after a long delay) by the
Regional Board that Board, not the County, is the final word on fire and safety, and the County
has no basis to cast aspersions on the safety of the project now. Even after the variances were
approved, however, the Town of New Castle continued to try to delay the project, first, by
seeking reconsideration of the approvals on February 17, 2015 (Kennedy Decl. Exh. Q); second,
by advising Conifer that the special permit had expired, thereby requiring Conifer to engage in
litigation, which was ultimately dismissed but resulted in an extension of time for the special
permit;4 and third, by taking Conifers $152,000 building permit fee and then placing the
application all the way to the bottom of the pile. (Report at 6 (quoting Report Exh. 12, at 1.).)
Neither the effort to reconsider, the refusal to extend the special permit, or the promise to bury
the application were based upon legitimate fire or safety concerns, and the County has continued
to do nothing since the Regional Board approved the variances on April 22, 2015.5
Just as important as what the County did deny funding for the project and then let it
twist in the wind until an impending deadline in the Consent Decree, when it passed highly
contingent legislation was what it did not do. First, as the Monitor noted, the County failed to
use its discretionary funding policy to address New Castles opposition. Indeed, the County
4

The County maintains that [i]t is illogical for the Monitor to fault the Town for
defending itself in a litigation brought against it. (County Br. at 24.) The County is wrong.
Conifer filed suit because New Castle would not extend the terms of its special permit, which,
after prevailing in the litigation, New Castle did anyway. It was illogical for New Castle to spend
time and money in litigation to defend against a request that it was prepared to grant anyway.
5
The County points to a letter sent to New Castle on May 11, 2015, encouraging the town
to grant Conifer the extension of the special permit. (County Br. at 27 (citing Drummond Decl.
Exh. X.).) This letter is entitled to little weight, however, because it was sent only after the
Monitor issued his Report on May 8, 2015, concluding that the County had done little to
encourage the project, and is merely an attempt to lay the foundation for the Countys objections
rather than comply with the Consent Decree.
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conceded that it had not considered offering incentives to New Castle to encourage it to grant
the necessary approvals to Conifer, and when the Monitor asked whether the County considered
using its discretionary funding policy, the County simply responded, [t]he County cannot use its
Discretionary Policy in such a manner, without any further explanation. (Report at 18 (citing
Feb. 27, 2015 letter from the County).) In its brief raising objections to the Report, which
specifically criticized the Countys failure to use its discretionary funding policy (Report at 18),
the County does not mention its discretionary funding policy at all, let alone explain why it
supposedly cannot use the policy in such a manner. The County has therefore offered
nothing to explain why using discretionary funding was not among the all available means as
appropriate that it was obliged to use.
Second, while Deputy Commissioner Drummond testified in support of Chappaqua
Station, she did so only once, and shortly before the County Board of Legislators denied funding
for the project, erasing whatever momentum her testimony might have created. Drummond did
not testify at any subsequent hearing. Moreover, Drummonds testimony was very short,
occupying barely a page and a half of transcript, and it does not appear that the County ever
followed up to supply the basis of Drummonds testimony to New Castle. Drummonds main
point was that [m]ulti-family residential development happens along train tracks, along
highways, all over Westchester County. I wont go into the Bronx and New York City. It
happens enough in Westchester County that its not a new situation. (Drummond Decl. Exh. K,
at 128.) This is a potentially helpful point for Chappaqua Station, but there is no indication that
Drummond or anyone else from the County ever followed up to substantiate these assertions in a
way that would help the project move forward; instead, the Countys objection to the Report
spends extensive time rehashing the fire and safety concerns upon which the Regional Board has
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already opined, undermining Drummonds useful, if limited, contribution. Certainly among the
all available means as appropriate that the County should have used was to provide additional
testimony, or information supporting that testimony. Cf. Westchester II, 2012 WL 1574819, at
*7-8 (upholding Monitors suggestion that the County Executive be required to provide
information regarding proposed source-of-income legislation).
Third and finally, as the Monitor noted, the County chose to be a spectator to the
litigation between Conifer and New Castle; the County filed no amicus briefs, nor sought to
intervene in the case. (Report at 19-20.) This failure was directly contrary to paragraph 7(j) the
Consent Decree, which requires that, where a municipality fails to undertake actions or takes
actions to hinder the development of affordable housing units, the County shall use all
available means as appropriate to address such action or inaction, including, but not limited
to, pursuing legal action. The County shall initiate such legal action as appropriate to
accomplish the purpose of this Stipulation and Order to AFFH. (Consent Decree 7(j).) The
County, however, did nothing of the sort it neither pursued nor initiated legal action relating
to Chappaqua Station. The County complains that the Monitor did not set forth a basis under
New York law that would explain how the County could have proceeded (County Br. at 26), but
the Consent Decree does not impose upon the Monitor a duty to articulate a legal strategy that
the County may, at its option, elect to adopt; the Consent Decree squarely places upon the
County the obligation to pursu[e] and initiate legal action. Certainly at this juncture, the
County could initiate or join a legal action to compel New Castle to compel municipal action that
has been unreasonably delayed, given the amount of time Conifers building permit has been
under review. The Countys failure to take legal action of any kind relating to New Castles
delays, whether by joining or participating in Conifers suit or filing its own, demonstrates that
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the County failed to use all available means as appropriate as it was required to do.
POINT IV
THIS COURT SHOULD FIND THE COUNTY IN CONTEMPT OF ITS OBLIGATIONS
UNDER THE CONSENT DECREE AND ORDER APPROPRIATE REMEDIES
A.

The Legal Framework

It is well settled that district courts enjoy inherent authority and considerable discretion to

enter reasonable orders designed to ensure compliance with a consent decree. United States v.
Local 359, United Seafood Workers, 55 F.3d 64, 69 (2d Cir. 1995); EEOC v. Local 580, Int=l
Ass=n of Ironworkers, 925 F.2d 588, 593 (2d Cir. 1991); Berger v. Heckler, 771 F.2d 1556, 156869 (2d Cir. 1985); Picon v. Morris, 933 F.2d 660, 662 (8th Cir. 1991). A consent decree is an
order of the court and thus, by its very nature, vests the court with equitable discretion to enforce
the obligations imposed on the parties. Local 359, 55 F.3d at 69. Accordingly, [c]onsent
decrees are subject to continuing supervision and enforcement by the court. A court has an
affirmative duty to protect the integrity of its decree. This duty arises where the performance of
one party threatens to frustrate the purpose of the decree. Berger, 771 F.2d at 1568 (internal
quotation marks and alterations omitted).6
In exercising this power and duty to enforce a consent decree, the Court is not rigidly
confined to its terms. Juan F. v. Weicker, 37 F.3d 874, 878 (2d Cir. 1994). Rather,
the court has inherent power to enforce consent judgments, beyond the
remedial contractual terms agreed upon by the parties. Unlike a private
6

Although the cases cited herein discuss only orders denominated as consent decrees, the
same logic, and the same power and duty of the Court to enforce the orders, applies to the
Stipulation and Order in this action, which specifically provides for this Courts continuing
jurisdiction to enforce it (Consent Decree & 58). See Ferrell v. HUD, 186 F.3d 805, 814 (7th
Cir. 1999) (courts power to modify decree applied to stipulation); Jenkins ex rel. Jenkins v.
Missouri, 103 F.3d 731, 741 (8th Cir. 1997) (same).
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agreement, a consent judgment contemplates judicial interests apart from

those of the litigants. Until parties to such an instrument have fulfilled
their express obligations, the court has continuing authority and discretion
pursuant to its independent, juridical interest to ensure compliance.
Local 580, 925 F.2d at 593; see also Westchester II, 2012 WL 1574819, at *7 (quoting Local
580); United States v. Dist. Council of N.Y.C. and Vicinity of the United Bd. of Carpenters, 972
F. Supp. 756, 762 (S.D.N.Y. 1997) (same). Thus, though a court cannot randomly expand or
contract the terms agreed upon in a consent decree, judicial discretion in flexing its supervisory
and enforcement muscles is broad. Local 580, 925 F.2d at 593.
The Monitors Report referred the Countys noncompliance with the Consent Decree to
the Justice Department for a potential contempt application (Report at 11, 21), and the
Department, as a signatory to the Consent Decree, would be entitled to seek civil contempt in
any event.7 To establish contempt, the Government must show that (1) the order the contemnor
failed to comply with is clear and unambiguous, (2) the proof of noncompliance is clear and
convincing, and (3) the contemnor has not diligently attempted to comply in a reasonable
manner. Latino Officers Assn of the City of New York v. City of New York, 558 F.3d 159, 164
(2d Cir. 2009). Because the Government now seeks civil contempt to compel the County to
comply with the Consent Decree, rather than impose criminal punishment, the proposed remedial
relief should permit the County to purge the contempt and obtain [ ] release by committing an
affirmative act, and thus carr[y] the keys of his prison in his own pocket. See New York State
Natl Org. for Women v. Terry, 159 F.3d 86, 93 (2d Cir. 1998) (internal quotations and citations
omitted); see also Spotnana Inc. v. Am. Talent Agency, Inc., 09 Civ. 3698 (LAP), 2014 WL
7191400, at *6 (S.D.N.Y. Dec. 3, 2014) (Civil contempt is a coercive measure that is intended
7

This Court has the authority to exercise the contempt authority of the district court
pursuant to 28 U.S.C. 636(e)(4).
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to spur action, rather than penalize.) (citation omitted). In NOW v. Terry, for example, the
Second Circuit approved certain remedial measures as civil contempt sanctions because they
permitted the defendants to cure the violations that led to contempt, see id. at 94, as the
Government proposes here.
B.

The County Is in Contempt of Paragraph 28 of the Consent Decree, and Should Be

Required to Escrow an Amount Sufficient to Purge Its Contempt
As set forth supra, the County failed to meet the mandatory benchmarks for the

development of affordable housing units in paragraph 28 of the Consent Decree. That obligation
is clear and unambiguous: the County must have financing in place for 450 units. (Consent
Decree 28.) The proof of the Countys noncompliance is clear and convincing: for the
reasons set forth above, the Chappaqua Station units do not count toward the total, and thus the
County only has 426 units with financing in place. Finally, the County has not diligently
attempted to comply in a reasonable manner with the requirement: the County initially voted
against any funding for Chappaqua Station in 2013, then in 2014 voted only for conditional
funding. As a result, the County is short of the requirement by 24 units. A diligent party would
have had other projects sufficiently advanced to count toward the requirement, in the event that
not all of the proposed units were found to count toward the deadline, or built in a larger margin
of error, either by seeking to exceed the deadline by more than four units, or by passing funding
before November of the year in which financing was due, in the event problems arose. Instead,
the County made only a last-minute, highly contingent effort to barely qualify. Under the criteria
established by Latino Officers Assn, 558 F.3d at 164, the County is in contempt of paragraph 23
of the Consent Decree.
The Government proposes that, for the County to purge itself of contempt, the Court
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order the County to create an escrow account in the amount of $1,651,200 (one million, six
hundred fifty-one thousand, two hundred dollars). The Consent Decree makes $51.6 million
available for affordable housing (see Consent Decree 2, 5); with the requirement that the
County develop 750 affordable housing units, the per unit cost is $68,800.8 As the County has
fallen short of the deadline by 24 units, the amount payable into escrow is 24 times $68,800, or
$1,651,200. The County may be entitled to recover this entire amount if, by the arrival of the
next benchmark date set in paragraph 28 of the Consent Decree (December 31, 2015), the
County achieves the benchmark of 600 units with financing in place; if the County fails to reach
this benchmark, then the County should forfeit $68,800, multiplied by the number of units by
which it has fallen short.9
This proposed order is appropriate because one purpose of a civil contempt sanction may
be to coerce the contemnor into future compliance with the courts order. Terry, 886 F.2d at
1352; see also King v. Allied Vision, Ltd., 65 F.3d 1051, 1062 (2d Cir. 1995) (quoting Terry).
Merely imposing a one-time monetary sanction on the County will not necessarily compel it to
meet the deadline set forth in the Consent Decree as to the construction of units; the County may
elect to bear the penalty rather than comply, which would result in a permanent shortfall or
standstill in the number of affordable housing units required under the Consent Decree. This
proposed sanction will incentivize the County to catch up to the benchmarks set forth in the
Consent Decree.
8

The per unit cost of $68,800 is also the approximate amount of the Countys budgeted
subsidy for each of the 750 affordable housing units ($68,814 per unit), as noted in the Monitors
biennial assessment filed June 26, 2014 (See ECF Dkt. No. 478, at 35).
9
The Government does not suggest at this time that the forfeited funds be directed to a specific
use, but if the County forfeits funds, the Government would request that the Monitor be provided
notice and an opportunity to be heard as to the purpose to which the funds should be directed by
the Court.
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This proposed contempt sanction, however, is in addition to the monetary penalties

prescribed by the Consent Decree, which are $30,000 from the first day of non-compliance and
$60,000 for each month of continued noncompliance. (Consent Decree 38.) The Monitors
determination that these penalties were appropriate should be sustained, based upon the analysis
set forth above, and the County should be ordered to pay penalties, beginning with $30,000 for
the month of January 2015, then $60,000 for each month thereafter, until such time as all
preconditions to the funding of Chappaqua Station are met. (Report at 16.)
The Monitor further noted that, in the event of non-compliance, paragraph 38 of the
Consent Decree requires that the County develop additional affordable housing units. (Consent
Decree 38.) The Monitor requested that the parties prepare submissions setting the factors that
the Monitor should consider in determining the formula for calculating additional units. (Report
at 16.) Consistent with the analysis above, the Government is proposing to the Monitor,
contemporaneous with the filing of this brief, that the County be required to develop one
Additional AFFH Unit for each month of noncompliance after the first month, noting that the
amount of the penalty in paragraph 38, which is $60,000 for each month of noncompliance
following the first month, is comparable to the per unit amount established by the Consent
Decree in paragraphs 2 and 5 (750 units divided by a funding commitment of $51.6 million is
$68,800). Because the Monitor is only now receiving submissions from the parties on this point,
the Government provides this statement to the Court for informational purposes.
Accordingly, at this juncture the Government respectfully proposes that to remedy the
Countys violation of paragraph 38 of the Consent Decree, (i) the County be found in contempt,
and directed to pay $1,651,200, to be held in escrow pending the development of the 24 unit
shortfall under the Consent Decree; and (ii) that the County pay the penalty amounts established
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by the Monitor in the Report, of $30,000 for January 2015, and $60,000 for each month
thereafter until the County cures its contempt, to go toward the development of Additional AFFH
Units in an amount of units to be set by the Monitor.
C.

The County Is In Contempt of Paragraph 7 of the Consent Decree, and Should Be

Required to Pay a Penalty Unless It Purges Itself of Contempt
The County is also in contempt of paragraphs 7(i) and (j) of the Consent Decree due to its

failure to take action to address New Castles resistance to Chappaqua Station. For the reasons
stated above, the Countys obligations under the Consent Decree are clear and unambiguous,
particularly with respect to the Countys obligation to pursue or initiate legal action, which it
failed to do. The proof of the Countys failure to act is also clear and convincing; as detailed
above, the County discouraged the development of Chappaqua Station by voting against funding
in December 2013, thereby vitiating the minor overtures in support of the project prior to that
time; then did little to encourage the project in 2014. Finally, the County has not diligently
attempted to comply in a reasonable manner with its obligation to encourage the affordable
housing development at Chappaqua Station. Throughout the process, including the state court
litigation, the County has been, as the Monitor aptly put it, merely a spectator. (Report at 20.)
Since the Regional Board approved the variances relating to the project, the County has done
nothing more than send one short letter in support of the project. Under the criteria established
by Latino Officers Assn, 558 F.3d at 164, the County is in contempt of paragraph 7(i) and (j) of
the Consent Decree.
The Government proposes that the penalty for the Countys failure to pursue or initiate
litigation relating to Chappaqua Station is that, unless all necessary state and municipal variances
as well as the building permits are granted before December 31, 2015, the County pay to Conifer
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the amount of $30,000, consistent with the penalty structure of the Consent Decree set forth in
paragraph 38 for a first violation. To help ensure that the project does move forward, the Court
should further order the County to do the following: (i) within 30 days the County shall publish
the May 11, 2015 letter on its website, as well as pay for the printing of the letter in a Sunday
edition of the Journal News, to ensure that its commitment to Chappaqua Station is well known;
(ii) to write followup letters to New Castle once per month inquiring of the status of the
approvals, and ask why the approvals have not been granted; (iii) commit to providing any
information useful to New Castle in making its determinations with respect to Chappaqua
Station; and (iv) attend all public hearings, if any, in connection with the approval process of
Chappaqua Station.
The proposed relief both increases the likelihood that the provisions of the Consent
Decree will be met, and provides with the County with an opportunity and incentive to avoid
paying the penalty amount. The proposed relief is therefore consistent with the Second Circuits
instruction that in ordering civil contempt, the Court should fashion relief that ensures that the
contemnor carries the keys of his prison in his own pocket. NOW v. Terry, 159 F.3d at 93.
CONCLUSION
The Countys objections to the Monitors Report should be overruled, the Court should
find the County in contempt of its obligations under the Consent Decree, and order the County to
purge itself of contempt by: (1) establishing an escrow in the amount of $1,651,200, pending the
development of the 24 unit shortfall under the Consent Decree, with the County forfeiting
$68,800 of that amount per unit for every unit it falls short of the financing in place benchmark
for December 31, 2015; (2) that the County pay the penalty amounts established by the Monitor
in the Report, of $30,000 for January 2015, and $60,000 for each month thereafter until the
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County cures its contempt, to go toward the development of Additional AFFH Units in an
amount of units to be set by the Monitor; (3) that (i) unless all necessary state and municipal
variances as well as the building permits for Chappaqua Station are granted before December 31,
2015, the County pay to Conifer a penalty amount of $30,000, and to promote the development
of Chappaqua Station the County be ordered to: (ii) within 30 days the County shall publish the
May 11, 2015 letter on its website, as well as pay for the printing of the letter in a Sunday edition
of the Journal News, to ensure that its commitment to Chappaqua Station is well known; (iii) to
write followup letters to New Castle once per month inquiring of the status of the approvals, and
ask why the approvals have not been granted; (iv) commit to providing any information useful to
New Castle in making its determinations with respect to Chappaqua Station; and (v) attend all
public hearings, if any, in connection with the approval process of Chappaqua Station.

Dated: New York, New York

July 21, 2015
Respectfully submitted,
PREET BHARARA
United States Attorney for the
Southern District of New York
By: /s/ David J. Kennedy
DAVID J. KENNEDY
Assistant United States Attorney
86 Chambers Street, 3rd Floor
New York, NY 10007
Telephone: (212) 637-2733
E-mail: david.kennedy2@usdoj.gov

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