Appeals from orders of the District Court for the Southern District of New York (Leonard B. Sand, Judge) adjudicating the City of Yonkers and four council members in civil contempt and imposing coercive monetary sanctions for failure to comply with a court order implementing a consent judgment.
Newman, Miner, and Mahoney, Circuit Judges.
JON O. NEWMAN, Circuit Judge:
This appeal presents important issues concerning the enforcement of orders of a United States District Court requiring action by a municipality to remedy violations of the Constitution and statutes of the United States. The principal issues are whether members of the Yonkers City Council may be required to vote to implement remedies contained in a consent judgment agreed to by the City and approved by the City Council, and whether the City, in addition to the council members, may be subjected to the coercive sanctions of civil contempt when the agreed upon legislative action has not been taken. The issues arise on appeals by the City of Yonkers and four members of the Yonkers City Council from orders of the District Court for the Southern District of New York (Leonard B. Sand, Judge) adjudicating the City and the council members in civil contempt and imposing coercive sanctions. We conclude that under the circumstances of this case the recalcitrant council members may be required to vote to implement the consent judgment and that the City, in addition to the council members, may be adjudicated in contempt and subjected to coercive sanctions for failure to abide by the consent judgment and subsequent implementing orders of the District Court. We also conclude that the amount of the monetary sanctions imposed on the City, though properly substantial, should be somewhat reduced. We therefore affirm the order adjudicating the council members in contempt and affirm, as modified, the order adjudicating the City in contempt.
1. The Underlying Lawsuit
The United States filed the underlying lawsuit on December 1, 1980, against the City of Yonkers, the Yonkers Community Development Agency, and the Yonkers Board of Education. The complaint made two basic allegations: (a) that the City and the Community Development Agency had "intentionally . . . perpetuated and seriously aggravated residential racial segregation" in violation of the Constitution and Title VIII of the Civil Rights Act of 1968, 42 U.S.C. §§ 3601-3619 (1982), and (b) that the racial segregation in the City's public schools had been "caused in substantial part by intentional, racially discriminatory acts and omissions" of the City and the Board of Education in violation of the Constitution. The National Association for the Advancement of Colored People (NAACP) was granted leave to intervene, and the suit was subsequently certified as a class action on behalf of all Black residents of Yonkers who currently reside in or are eligible to reside in publicly assisted housing or who are parents of children attending Yonkers public schools.
After a bench trial lasting ninety days over the course of fourteen months in 1983 and 1984, the District Court found the City and the Community Development Agency liable for intentional housing segregation and found the City and the Board of Education liable for intentional school segregation. United States v. Yonkers Board of Education, 624 F. Supp. 1276-1553 (S.D.N.Y. 1985). With respect to the housing violations, with which we are concerned on this appeal, the District Court found that the City had deliberately concentrated virtually all of its public and other subsidized housing in the southwest quadrant of Yonkers and had done so to maintain residential segregation. Id. at 1372-76. After conducting a six-day hearing as to appropriate remedies, the District Court issued a Housing Remedy Order on May 28, 1986. United States v. Yonkers Board of Education, 635 F. Supp. 1577 (S.D.N.Y. 1986).*fn1
The Housing Remedy Order included provisions for the construction of 200 units of public housing and for the planning of additional units of subsidized housing. The City had previously agreed to provide acceptable sites for the 200 units of public housing as a condition of receiving its 1983 Community Development Block Grant from the United States Department of Housing and Urban Development (HUD). Part IV of the Housing Remedy Order established a precise timetable within which the City was required to furnish HUD with necessary documents to secure HUD's approval of funds for the 200 units. Id. at 1580-81. The City was required to propose sites for 140 units within thirty days and sites for the remaining 60 units within ninety days.
Part VI of the Housing Remedy Order accorded the City broad discretion to make its own determinations concerning additional units of subsidized housing. The District Court did not specify the number of units to be built, the time by which they must be built, or the degree of subsidization. Part VI contained essentially two requirements. First, the additional units must be located in existing residential areas in east or northwest Yonkers. Second, the City must prepare a plan specifying, among other things, the number of subsidized units to be constructed or acquired, their location, and the rent levels or degree of subsidization. Id. at 1582. The City was given until November 15, 1986, nearly six months, to present its plan.
This Court affirmed the liability and remedy rulings of the District Court on December 28, 1987. United States v. Yonkers Board of Education, 837 F.2d 1181 (2d Cir. 1987), and the Supreme Court denied the City's petition for a writ of certiorari. 486 U.S. 1055, 100 L. Ed. 2d 922, 108 S. Ct. 2821 (1988). None of the requirements of the Housing Remedy Order was stayed during the course of appellate review.
2. Attempts to Implement the Housing Remedy Order
With respect to the requirement to propose sites for the 200 units of public housing within thirty and ninety days, the City totally defaulted. No site was proposed. With respect to the requirement to submit a plan within six months for additional subsidized housing, the City again totally defaulted. On the appointed day, November 15, 1986, the City informed the District Court that it would not comply. The United States and the NAACP then moved for an adjudication of civil contempt and the imposition of coercive sanctions. Rather than proceed immediately to consideration of contempt sanctions, the District Court patiently endeavored to secure voluntary compliance. In February 1987, the City Council agreed to the appointment of an Outside Housing Advisor to identify sites for the 200 units of public housing and to draft a long-term plan for the additional units of subsidized housing. Throughout the rest of 1987 attention was focused primarily on the requirement for proceeding with the 200 units of public housing. The Advisor recommended placing the 200 units in small clusters on scattered sites. In April 1987, the City Council proposed to place the 200 units on twelve sites but rendered the proposal illusory by conditioning it on the patently unacceptable right of local civic associations to select the tenants. By the end of 1987 the City had taken no significant action to comply with the 1986 Housing Remedy Order.
In January 1988, following this Court's affirmance of the liability and remedy decisions and with the District Court contemplating designation of sites for the 200 units, the parties began negotiations to settle the compliance issues. On January 19, when prospects for agreement appeared bleak, the District Court pointed out to the City that the Court could proceed either by "deeming things to have been done which it was the obligation of Yonkers to do, or it can order Yonkers to do those things." On January 25, counsel for the City informed the Court that the City was contemplating a consent judgment and that the City was prepared to designate seven sites for the 200 units of public housing and to implement a long-term plan to achieve the goal of 800 units of subsidized housing that had been recommended by the plaintiffs. A consent decree was agreed to by the parties that same day, approved by the City Council on January 27, and entered as a consent judgment of the District Court on January 28 ("the Consent Judgment").
With respect to the 200 units of public housing, the Consent Judgment renewed the City's commitment to build the units and identified seven specific sites. The judgment also committed the City to take specific steps within a prescribed timetable to have the 200 units built. Finally, the City pledged that it would not seek further review of the District Court's 1986 decision or any subsequently entered decree to the extent that such decrees relate to the 200 units.
With respect to the 800 units of subsidized housing, the Consent Judgment included several provisions, which are at the core of the pending appeal. First, the City acknowledged that the goal of 800 units was "an appropriate target in fulfilling its obligations pursuant to Part VI" of the Housing Remedy Order. Consent Judgment § 12. Next, the City pledged to make good-faith efforts to achieve 600 of the units in annual installments of 200 units within each of the next three years. Id. Next, and of special significance, the City agreed to adopt "legislation" on a number of topics to facilitate meeting the goal of 800 units of subsidized housing. Id. § 17. Among other things, the City agreed to adopt legislation granting necessary tax abatements, providing for zoning changes, and establishing, within ninety days, a package of incentives for local development. Id. § 17(b), (d), (e). Finally, the City agreed with the other parties to work diligently to agree on various unresolved matters primarily concerning financial aspects of the 800 units and to submit a second consent decree to the Court by February 15, 1988. Id. § 18.
Rather than abide by the terms of the Consent Judgment, the City promptly attempted to disavow it. Citing intense community opposition to the Consent Judgment, especially the public housing provisions, the City moved on March 21, 1988, to delete the provision in which it had agreed not to seek further appellate review concerning the obligation to build the 200 units. To demonstrate the lengths to which it was prepared to go to be relieved of its public housing commitment, the City offered to return approximately $30 million of federal funds in the event the Supreme Court should set aside the public housing provisions of the Housing Remedy Order. The City's motion to amend the Consent Judgment was denied on March 31, and that ruling has not been appealed.
On April 12, at a chambers conference with the District Court, the City announced that it was "not interested" in completing negotiations on the terms of a long-term plan for the 800 units of subsidized housing, as required by section 18 of the Consent Judgment. In light of this development, the United States and the NAACP submitted to the Court on May 2 a proposed Long Term Plan Order based largely on a draft that had been prepared by the City's lawyers during the negotiations that had ensued prior to April 12. The City opposed the proposed order and noted specific objections. The District Court directed the plaintiffs to revise their proposed Long Term Plan Order in light of the City's objections. On June 13, following a hearing and further changes, the District Court entered the Long Term Plan Order. As revised by the parties and by the Court, the Long Term Plan Order accommodated most of the City's objections. The Order provided considerable detail for the legislation that the City had committed itself to adopt in section 17 of the Consent Judgment.
By the time the Long Term Plan Order was entered, the City was one month in default on the obligation, agreed to in the Consent Judgment, to adopt implementing legislation. The United States therefore asked the Court to set a timetable for enactment of the legislation. On June 21 counsel for the City informed the Court that a consulting firm had been retained to draft the legislation and that City Council action could be anticipated at the next council meeting, perhaps in August. Concerned about the prospect of delay, a concern heightened by the City Council's adoption on June 14 of a resolution declaring a moratorium on all public housing in Yonkers, the District Court requested that the City Council pass a resolution adopting the provisions of the Long Term Plan Order. On June 28 the City Council voted against a resolution "indicating [the Council's] commitment to the implementation of" the Housing Remedy Order, the Consent Judgment, and the Long Term Plan Order.
The following day the District Court directed the plaintiffs to submit an order requiring the City to take "specific implementing action" under a prescribed timetable, violation of which would subject the City to contempt sanctions. In response to the plaintiffs' proposed order setting forth such a timetable, the City argued that the defeat of the resolution on June 28 indicated that the City would not voluntarily adopt legislation contemplated by the Long Term Plan Order and suggested that the Court itself should enter an order adopting the necessary legislation. At a hearing on the proposed timetable on July 12, the District Court invited the parties' comments on the possible creation by the Court of an Affordable Housing Commission to exercise the City Council's functions concerning implementation of the housing remedy orders. The City opposed creation of the Commission because it would divest the Council of its "core legislative as well as executive functions."
3. The Prospect of Contempt
Prior to this point in the litigation, the District Court had on at least two occasions warned the City that it would face a contempt adjudication and coercive sanctions if it failed to abide by the Consent Judgment. On July 26 the District Court issued an order that gave the City one final opportunity to comply and detailed the precise consequences of continued noncompliance. The July 26 order required the City to enact by August 1 "the legislative package relating to the long-term plan as described in Section 17 of the [Consent Judgment] and the Long Term Plan Order." The "legislative package" was set forth in a detailed Affordable Housing Ordinance, which had been drafted by the City's consultants and marked as an exhibit at the July 26 hearing.
The July 26 order also established the schedule and consequences of civil contempt proceedings to occur in the event that the legislation was not adopted by August 1. If that occurred, the City and the council members were to show cause at 10:00 a.m., August 2, why they should not be adjudged in contempt. If such cause was not shown, each council member failing to vote for such legislation would be fined $500 per day, and, if the legislation was not passed by August 10, such council member would be imprisoned on August 11. The contempt sanction against the City would be daily fines starting at $100 on August 2 and doubling in amount each day of continued noncompliance. The cumulative total of the fines against the City would exceed $10,000 by day 7, exceed $1 million by day 14, exceed $200 million by day 21, and exceed $26 billion by day 28. The order provided that a council member could be purged of contempt by voting in favor of the legislation or by enactment of the legislation. The City could be purged of contempt by enactment of the legislation. The order further provided that all fines would be paid into the Treasury of the United States and would not be refundable, that the Council would meet at least once a week to vote on the legislative package, and that any incarcerated council member would be released to attend such meetings.
On July 28, the District Court informed all counsel by letter that the July 26 order "will be satisfied if the City Council, on or before August 1st, adopts a resolution committing itself to enact the Affordable Housing Ordinance within the minimum time prescribed for notice pursuant to state law." This letter responded to the City's expressed concern that state law specified notice and public hearing requirements in connection with enactment of zoning ordinances.
On August 1, the City Council met to consider a resolution expressing the Council's intent to adopt the Affordable Housing Ordinance within the minimum time prescribed by state law. The Council ...