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The backdrop for the present litigation is well-documented in numerous decisions of this court, see, e.g., United States v. Yonkers Bd. of Educ., 837 F.2d 1181 (2d Cir. 1987), cert. denied, 486 U.S. 1055, 108 S.Ct. 2821, 100 L.Ed.2d 922 (1988); Yonkers Racing Corp. v. City of Yonkers, 858 F.2d 855 (2d Cir.1988), cert. denied, 489 U.S. 1077, 109 S.Ct. 1527, 103 L.Ed.2d 833 (1989), and need not be repeated here. This appeal involves a contention by the City of Yonkers ("City") that the district judge and his housing advisor, Oscar Newman (the "OHA"), created an appearance of partiality by excluding the City from certain discussions and engaging in ex parte communications with opposing counsel and non-parties and by commenting to the media about the case. The OHA was employed to provide expert advice and assistance to the district court in the implementation of the Housing Remedy Order ("HRO") and the January 1988 Consent Decree ("Decree") and to coordinate the activities of various parties, including the United States, the Department of Housing and Urban Development ("HUD") and non-parties, including the Yonkers Municipal 182*182 Housing Authority ("MHA") and representatives of Deluxe Development of New York, Inc. ("Deluxe"), the developer selected to build the public housing required by court order.

Although the City alleges that the OHA engaged in numerous improper communications during the period he has served as court-appointed housing advisor, the City focuses primarily on communications occurring prior to and at the time of entry of certain indemnification orders. On November 8, 1990, the district court ordered that the City indemnify HUD, the MHA and Deluxe for all expenses that may arise by virtue of title defects in City-owned property on which public housing was to be constructed. The City alleges that the OHA had conversations with Brian Heffernan and John Herold, counsel for the United States and HUD, respectively, and that an ex parte meeting took place between the OHA, representatives of Deluxe, the MHA and HUD during a recess of a hearing held on November 8. The ex parte communications allegedly pertained to negotiations over the contract of sale ("Turnkey Contract") of City-owned property to Deluxe and, specifically, the concerns about potential litigation expenses arising as a result of defects in title of that property.

On November 16, 1990, the City filed a motion to vacate and modify the November 8, 1990 indemnification order. A hearing on the motion was scheduled for November 29, 1990, but the City maintains that ex parte communications between the OHA and Heffernan and representatives of Deluxe and HUD continued on a daily basis from November 8, 1990. The City claims that the OHA held another ex parte conference with attorneys for Deluxe, the MHA and other opposing parties in the hallways of the courthouse on November 16, 1990. On December 19, 1990, the district court issued a modified indemnification order requiring the City to indemnify HUD and the MHA, but not Deluxe, as against any losses sustained as a result of title defects. Deluxe was relegated to the pursuit of remedies against HUD and the MHA.

Other alleged improper communications include ex parte meetings between Judge Sand, Heffernan, representatives of Deluxe and others, but not the City, on November 14 and December 7, 1990. The City also contends that the judge engaged in an off-the-record evidentiary investigation through ex parte communications with Karen Hill, the Executive Director of the Fair Housing Implementation Office ("FHIO"), an agency created by the court for the specific purpose of implementing the Long Term Plan ("Plan"). The Plan, which is a part of the Decree, obligates the City to make good faith efforts to build 800 units of housing by June 1992. The City contends that the transcript of the November 8, 1990 hearing evidences that the court had formed an opinion, based on communications with Hill, that the Plan should be modified to require the City to transfer additional City-owned properties for the construction of housing.

The City also argues that disqualification is warranted because of public comments made by Judge Sand and by the OHA. These public comments include an interview given by Judge Sand, which was published in the Herald Statesman, and an interview published in the Gannett Westchester newspaper involving the OHA. The OHA also was involved in another incident in which his criticisms of a bank that reneged on its promise to finance the construction of housing because of pressure from customers residing in Yonkers were printed in newspaper articles.

On February 19, 1991, the City filed a motion to disqualify Judge Sand and the OHA pursuant to 28 U.S.C. § 455(a) & (b)(1) (1988). The City requested, on March 4, 1991, discovery of memoranda exchanged by the OHA and the district judge and diaries maintained by the OHA. It also sought to depose the OHA, Heffernan, Herold and Hill. After a hearing on March 14, the district court denied the recusal motion. The court found that "[t]here has been no impropriety whatsoever in the Court's dealings with the [OHA], with whom I consult often, as I do with my law clerks, as a confidential advisor or in my or his discussions with others concerning the 183*183 contract to which the City is not a party." Judge Sand also denied the motion to compel discovery and granted the government's motion for a protective order prohibiting the requested depositions.


946 F.2d 180 (1991)

UNITED STATES of America, Plaintiff-Appellee, Yonkers Branch-National Association for the Advancement of Colored People; Regina Ryer, a Minor, by her mother and next friend, Charlotte Ryer, on behalf of themselves and all individuals similarly situated, Plaintiffs-Intervenors-Appellees,


YONKERS BOARD OF EDUCATION, Defendant-Appellee, City of Yonkers and Yonkers Community Development Agency, Defendants, City of Yonkers, Defendant-Appellant, United States Department of Housing and Urban Development and Samuel R. Pierce, Secretary, Added-Defendants-Appellees, State of New York, Mario Cuomo, as Governor of the State of New York, the Board of Regents of the State of New York, Martin C. Barell, R. Carlos Carballada, Adelaide L. Sanford, Willard A. Genrich, Emlyn I. Griffith, Jorge L. Battista, Lora Bradley Chodos, Louise P. Matteoni, Edward Meyer, Floyd S. Linton, Salvatore Sclafini, Mimi Levin Lieber, Shirley C. Brown, Norma Gluck, Thomas Frey, James McCabe, Sr., in their official capacities as members of the State Board of Regents, Department of Education of the State of New York, Thomas Sobol, as Commissioner of Education in the State of New York, Urban Development Corporation of the State of New York, Vincent Tese, as Director of the Urban Development Corporation, Added-Defendants-Defendants-Appellees.

No. 1828, Docket 91-6098. United States Court of Appeals, Second Circuit.

Argued August 12, 1991.

Decided October 7, 1991.

New York Law School location: File #1270, Box #128