For Immediate Release
Contact: Craig Gurian, 212-655-5790
Westchester Countys Attempt to Dismiss False Claim Act Case Denied by Federal Judge
In a decisive ruling, U.S. Federal District Court Judge Denise Cote has denied Westchester Countys motion to dismiss a False Claims Act (FCA) lawsuit brought by the Anti-Discrimination Center. The decision is the first in the country to hold that an advocacy group can use the FCA to challenge a local governments certification that it has affirmatively furthered fair housing. According to the Centers lawsuit, Westchester received at least $45 million through false certifications that it was meeting its obligations to affirmatively further fair housing. The case will now proceed through discovery. If found liable at trial, Westchester could be assessed treble damages and civil penalties.
The Court found that, [b]ecause the Fair Housing Act and its implementing regulations do require a grantee to identify impediments to nondiscriminatory housing choice within its jurisdiction and to take appropriate steps to overcome any such identified effects, the complaint does state a claim for a violation of the FCA. (Decision, page 20).
The Court stated that, in identifying impediments to fair housing choice, a grant recipient must consider impediments erected by race discrimination, and if such impediments exist, it must take appropriate action to overcome the effects of those impediments. (Decision, page 29).
The Court rejected Westchesters attempt to justify its failure to do so: In the face of the clear legislative purpose of the Fair Housing Act an interpretation of affirmatively further fair housing that excludes consideration of race would be an absurd result. (Decision, pages 29-30).
The decision concluded that the Center had adequately alleged fraud on the part of Westchester County: Since receipt of the [federal] funds was tied to its certifications, there is strong inference of fraudulent intent. The admissions from [the Countys Deputy Commissioner for Planning] recited in the complaint are further strong evidence of a knowing violation. (Decision, pages 34-35).
Craig Gurian, Executive Director of the Anti-Discrimination Center and a Scholar-in-Residence at Fordham Law Schools Stein Center for Law and Ethics, stated: Coming just weeks after Supreme Court Justice Kennedy observed that neighborhoods in our communities do not reflect the diversity of our Nation as a whole, this decision makes clear that fair housing advocates have a tool by which to hold recipients of federal funding to their promise of taking steps appropriate to the circumstances in order to undo the residential segregation that continues to plague this country. I hope that other county and local governments will now realize that a failure to take seriously their obligation to affirmatively further fair housing will expose them to liability under the False Claims Act and the Fair Housing Act.
Michael Allen, an attorney at the Washington firm of Relman & Dane (the Centers co-counsel in the case) said: Westchester told the Court that racial segregation and discrimination were not among the most challenging impediments in the County, and asked the Court to relieve it of its obligation to consider race and to respond to those impediments. The Court properly rejected this approach as one that would lead to an absurd result of federal money being used to perpetuate those very conditions.
The decision is available in full at http://www.antibiaslaw.com/motiondenied.pdf. The Centers complaint is available in full at http://www.antibiaslaw.com/falseclaimscomplaint.pdf.