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August 10, 2009 6:18 PM

Epstein Becker on Landmark Westchester Housing Settlement

Posted by Zach Lowe

Epstein Becker & Green received $3 million from Westchester County for defending the county against a lawsuit alleging that it didn't do enough to desegregate neighborhoods or analyze how race impacts access to housing in various Westchester communities, court and county records show. 

The county settled the suit on Monday by agreeing to spend $50 million to build affordable housing in overwhelmingly white communities and to market that housing to minority tenants and buyers, according to the settlement agreement and The New York Times

Stuart Gerson, a member of Epstein Becker and former acting U.S. attorney general during the Clinton administration, served as the county's lead counsel on the deal.

The firm began working on the case in 2006, when the Anti-Discrimination Center filed suit accusing the county of failing to fully comply with various requirements in applying for federal housing funds--a violation of the federal False Claims Act.

Those requirements included a duty to investigate housing segregation and whether a person's race limits their access to housing, according to the Associated Press and Craig Gurian, the Anti-Discrimination Center's executive director.

At first the county claimed that it was in full compliance with housing rules, and had sufficiently analyzed the impact of race on housing--a legal strategy Gurian called a "disaster" during an interview Monday with The Am Law Daily.

Prefacing his statement by saying he didn't know whether county attorneys or Epstein Becker were driving the county's legal strategy, Gurian said the "the county's legal strategy from the beginning was disastrous." 

Gerson dismissed Gurian's claims, saying he was not privy to internal discussions, especially the talks leading to Monday's settlement.

"I doubt he had the remotest idea about our strategy," says Gerson, adding that he worked his connections in Washington, D.C., to get the federal government to intervene in the case and broker a settlement, which it did yesterday.

Gerson also noted that federal officials, including high-ranking members of the U.S. Department of Housing and Urban Development, appeared alongside Westchester County officials to announce the settlement Monday.

Under the terms of the settlement, the county will spend more than $50 million to develop 750 affordable housing units; of those, 630 must be built in communities where blacks make up less than 3 percent of the population and Hispanics less than 7 percent.

The county will pay the Anti-Discrimination Center $7.5 million and an additional $2.5 million to the center's outside lawyers at Relman & Associates in Washington, D.C., according to the settlement. 

Epstein Becker has done outside work for Westchester before, with a focus on employment litigation. Gerson is an expert on the federal False Claims Act, under which the Anti-Discrimination Center filed its suit. "I believe that's one reason they picked us," he says.

The settlement is a signal that the Obama administration is going to move more aggressively than its predecessors to desegregate communities, Gerson says.

"The truth is that there are a lot of communities that are de facto segregated," he says. "This administration is going to do more to have minorities take up residence in areas where there aren't many minorities. The question is: How much demand will there be among minorities for this housing?"

The Westchester county legislature still has to approve the settlement. 

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