HENRY H. KENNEDY, JR., District Judge.
Greater New Orleans Fair Housing Action Center, the National Fair Housing Alliance, and five individuals who own homes in New Orleans (collectively "plaintiffs")
In 2005, Hurricanes Katrina and Rita caused catastrophic damage to much of the Gulf Coast, including New Orleans, Louisiana. In response, Congress created a block grant program to assist in recovery of the region, which it funded through three appropriations statutes. See Pub. L. No. 109-148, 119 Stat. 2680, 2779-81 (Dec. 30, 2005); Pub. L. No. 109-234, 120 Stat. 418, 472-73 (June 15, 2006); Pub. L. No. 110-116, 121 Stat. 1295, 1343-44 (Nov. 13, 2007). Pursuant to these statutes and HUD regulations, the State of Louisiana was to receive $13.4 billion. See 121 Stat. at 1343-44 (authorizing spending $3 billion on supplemental grants to Louisiana); 71 Fed. Reg. 7666, 7666 (Feb. 13, 2006) (allocating $6.2 billion from the first appropriation to Louisiana); 71 Fed. Reg. 63,337, 63,338 (Oct. 30, 2006) (allocating $4.2 billion from the second appropriation to Louisiana).
Louisiana designated approximately $11 billion of those funds for the Road Home Program. The LRA, in consultation with HUD, developed the Road Home program; HUD approved it and disburses the money Congress has appropriated for it to the LRA; and the LRA administers it. Under a portion of the Program called Option 1, an individual whose house was damaged by the hurricanes may choose to receive a grant to repair or rebuild her home.
Since the Road Home Program's inception, the LRA has distributed Option 1 awards to tens of thousands of homeowners. At this time, a relatively small number of Option 1 applicants have yet to receive their awards.
Individual plaintiffs Gloria Burns, Rhonda Dents, Almarie Ford, Daphne Jones, and Edward Randolph are African Americans who own homes in New Orleans that were severely damaged by Hurricane Katrina, and subsequent flooding, in 2005.
Plaintiffs initiated this action in November 2008. In their complaint, they allege that the reliance on home values in calculating Option 1 awards "has a discriminatory disparate impact on African Americans living in historically segregated communities." Compl. ¶ 52. Specifically, they argue that because "African American homeowners in New Orleans are more likely than white homeowners in New Orleans to own homes with lower values," African-American recipients of Option 1 grants are more likely than white recipients to receive only the amount of the pre-storm value of their homes. Compl. ¶¶ 54-57. Consequently, plaintiffs allege, African-American homeowners are likely to have a larger gap than white recipients between the amount of their awards and the cost of rebuilding. Id.
Plaintiffs assert that the discriminatory effects of the Option 1 formula violate the FHA and the HCDA. Specifically, Count I of their complaint alleges that defendants have (1) "made unavailable or denied housing to African American homeowners because of their race in violation of" section 3604(a) of the FHA; (2) "discriminated against African Americans because of their race in the availability of, and in the terms of conditions of, real estate-related transactions in violation of" section 3605(a) of the FHA; (3) "failed to administer housing-related programs and activities in a manner that affirmatively furthers fair housing, in violation of" sections 3608(d) and 3608(e)(5) of the FHA. Compl. ¶¶ 74-76. Count II alleges that defendants "failed to administer the Community Development Block Grant Program in a manner that affirmatively furthers fair housing, in violation of Title I of [the HCDA], 42 U.S.C. § 5304(b)(2)." Id. ¶ 77. Plaintiffs seek injunctive relief, "including but not limited to ordering Defendants to cease immediately their violation of Plaintiffs' rights, and to remedy the invidious effects of their violations by recalculating Road Home homeowner grants in a nondiscriminatory manner." Compl. at 17.
Keegan and HUD both filed motions to dismiss this case.
Although the Court addressed in its opinions some of the issues crucial to ruling on Keegan's motion to dismiss, it has not resolved all of the issues Keegan raises nor has it ruled on Keegan's motion to transfer. It now turns to these motions.
Keegan seeks dismissal of plaintiffs' claims as against her on the ground that the Eleventh Amendment bars them. In the alternative, she argues that the complaint fails to state a claim on which relief can be granted as to Count I, the FHA claims and may not be brought by a private plaintiff as to Count II, the HCDA claim. The Court concludes that some of these arguments have merit but others do not.
Keegan argues that plaintiffs' claims against her are barred by sovereign immunity.
Plaintiffs respond that the Eleventh Amendment does not bar their claims. They argue that the Ex parte Young exception to sovereign immunity applies because (1) that the suit is effectively against the state does not bar it; (2) the relief plaintiffs seek is prospective and would require the expenditure of only federal, not state, funds; and (3) the principles articulated in Coeur d'Alene are inapplicable here.
The Court addresses each argument in turn but first describes the well established underlying legal principles. The Eleventh Amendment
First, the Court rejects Keegan's argument that because it is the LRA, not herself, who is responsible for the actions at issue and because the LRA must obtain approval for its actions, Ex parte Young does not apply. Cases analyzing and applying the doctrine established in Ex parte Young do not inquire into the state officer's personal actions or responsibility for the alleged violation of federal law by an agency, and, by extension, a state. See, e.g., Verizon Md., Inc. v. Pub. Serv. Comm'n of Md., 535 U.S. 635, 645, 122 S.Ct. 1753, 152 L.Ed.2d 871 (2002) (holding that "the doctrine of Ex parte Young avoids an Eleventh Amendment bar to suit" against the individual commissioners of a state commission without discussing the responsibilities or authority of a commissioner). Nor has Keegan cited to any authority supporting the contention that the requirement that a state official consult with other entities before taking action negates the ability of a private party to sue that official for violations of federal law.
The Court next addresses Keegan's third argument. Coeur d'Alene, the case on which Keegan relies, barred the Coeur D'Alene Tribe and some of its members from suing the State of Idaho where they sought a declaration that the Tribe owned certain land submerged by water and that Idaho's regulation of that land was invalid. Coeur d'Alene, 521 U.S. at 265, 282, 117 S.Ct. 2028. The Supreme Court held that these remedies would so significantly infringe on the state's "sovereign authority and its standing in the Union" as to not properly be before a federal court. Id.
Keegan's second argument raises more difficult questions. Suits brought under the Ex parte Young doctrine are only proper if they seek prospective, as opposed to retrospective, relief. Vann, 534 F.3d at 750 ("In determining whether the doctrine of Ex parte Young avoids an Eleventh Amendment bar to suit, a court need only conduct a straightforward inquiry into whether [the] complaint alleges an ongoing violation of federal law and seeks relief properly characterized as prospective." (quoting Verizon Md., Inc., 535 U.S. at 645, 122 S.Ct. 1753) (internal quotation marks omitted)). A request for relief that would require payment from the state treasury, rather than that a state officer "conform [her] future conduct to the requirement of" a federal law, is barred by the Eleventh Amendment. Edelman v. Jordan, 415 U.S. 651, 664, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974) (holding that an order "which requires the payment of a very substantial amount of money which. . . should have been paid, but was not" by the state to citizens eligible for a federal aid program was improper because such a retrospective award violated sovereign immunity).
It is the application of this principle of law to the facts of this case that has occupied the parties and the Court in significant part in the two motions for TROs and preliminary injunctions, the oppositions to those motions, and the Court's opinions ruling on them. Accordingly, the Court will not repeat here its understanding of how the doctrine controls under these circumstances. Based on the reasoning in the Court's Clarification and its opinions denying the first motion for a TRO and preliminary injunction and granting the second, the Court concludes that dismissal in part is warranted on this ground. The Court does not have subject-matter jurisdiction over any portion of this case seeking retroactive relief; in other words, to the extent plaintiffs seek correction of awards already distributed in accordance with an allegedly discriminatory formula, their case must be dismissed. As to any individuals who have not yet received initial awards of Option 1 grants, the case may go forward and plaintiffs may seek a permanent injunction that, like the preliminary injunction now in place, prohibits Keegan from calculating Option 1 grants based on the pre-storm value of a home.
Because each of the five individual plaintiffs has already received an Option 1 award, none have a claim over which the Court has jurisdiction. Accordingly, Burns, Dents, Ford, Jones, and Randolph may not remain parties to this case.
Keegan next argues that plaintiffs' FHA claim as to her should be dismissed for
Plaintiffs respond that Keegan is obligated by the terms of the block grant program pursuant to which the Road Home program was created to comply with the FHA. They also assert that she agreed to comply with the FHA as a condition of receiving funds to disperse through the Road Home program. Finally, plaintiffs argue that because they allege that they have been unable to repair their homes, and in some cases have been unable to live in their homes at all, their complaint sufficiently makes out a claim under section 3604(a). They contend, relying on different cases than Keegan cites, that the provision's language prohibiting "mak[ing] unavailable or deny[ing]" housing on the basis of race should be construed broadly to encompass "any conduct that hinders access to housing on the basis of race." Pls.' Opp'n at 28.
The Court will not dismiss plaintiff's FHA claim on this ground. Section 3604(a) of the FHA provides:
42 U.S.C. § 3604(a) (emphasis added). The scope of the "otherwise make unavailable or deny" language is not entirely clear. Keegan asserts, and plaintiffs do not dispute, that the question raised here—whether a grant program for disaster recovery with an alleged racially discriminatory impact falls within the text's meaning—has not been addressed by any other federal court. But courts have discussed the "broad purpose of the FHA," Nat'l Cmty. Reinvestment Coal. v. Accredited Home Lenders Holding Co., 573 F.Supp.2d 70, 77 (D.D.C.2008), which is to "promote integrated housing patterns and to discourage discrimination in access to housing," Nat'l Fair Housing Alliance v. Prudential Ins. Co., 208 F.Supp.2d 46, 57 (D.D.C.2002) (citing Trafficante v. Metro. Life Ins. Co., 409 U.S. 205, 211-12, 93 S.Ct. 364, 34 L.Ed.2d 415 (1972)). And the D.C. Circuit has made clear that "make unavailable" means not just preventing access to new housing by prospective buyers and renters but also the loss of housing to
The cases on which Keegan relies do not persuade the Court that section 3604(a) is inapplicable here. In each opinion, the relevant Circuit Court concluded that an action farther removed from the statutory language than the one alleged here did not fall under the FHA. See Cox v. City of Dallas, Tex., 430 F.3d 734, 740 (5th Cir. 2005) (concluding that a challenge to a city's placement of a dump near a residential area, which reduced the value of existing homes, "is not a claim of `unavailability' or `den[ial]' of housing under a proper reading of the FHA" (alteration in original)); Jersey Heights Neighborhood Ass'n v. Glendening, 174 F.3d 180, 192 (4th Cir. 1999) (holding that the construction of a bypass road, which would "clos[e] off expansion" of an African-American neighborhood, does not have a sufficient "causal link" to the denial of housing to state a claim under section 3604(a)); Southend Neighborhood Improvement Ass'n v. County of St. Clair, 743 F.2d 1207, 1210 (7th Cir.1984) (holding that allegations that "the County's discriminatory refusal to properly manage the properties it owns damaged [plaintiffs'] interests in neighboring properties" do not implicate section 3604(a)). Each of these cases acknowledges the broad reach of the text of section 3604(a) to actions other than sales and rentals that are tied to housing. Cox, 430 F.3d at 741-42 & n. 18 (including a string cite of citations to cases applying section 3604(a), distinguishing the facts before it, and noting that the court's holding "is not to say that a current owner or renter evicted or constructively evicted from [her] house does not have a claim"); Jersey Heights, 174 F.3d at 192 (listing examples of "housing-related" policies, such as "racial steering by real estate agents," that fall under section 3604(a)'s prohibition of discrimination); Southend Neighborhood, 743 F.2d at 1209-10 & n. 3 (same, and including examples such as "mortgage `redlining,' insurance redlining, . . . [and] exclusionary zoning decisions"). The claim here rests not on a reduction in property values or a limit on the growth of a residential area but on the inability of homeowners to inhabit their houses because of a Road Home Program formula.
As noted above, Count I of plaintiffs' complaint also states causes of action under 42 U.S.C. §§ 3605(a) and 3608(d), (e)(5). These claims may not go forward against Keegan.
Section 3605(a) prohibits "any person or other entity whose business includes engaging in residential real estate-related transactions [from] discriminat[ing] against any person in making available such a transaction, or in the terms or conditions of such a transaction, because of race" or other enumerated categories. 42 U.S.C. § 3605(a). Keegan makes two arguments as to this provision. First, she contends that Road Home Program recipients "were allowed to use the funds . . . in any way they chose, and were not required to use the funds to rebuild or repair their homes," Keegan Mot. to Dismiss at 31, so Program awards cannot be said to be "for purchasing, constructing, improving, repairing, or maintaining a dwelling," 42 U.S.C. § 3605(b)(1)(a) (defining "residential real estate transaction"). Second, she asserts that she was not engaged in the type of financial practices contemplated by section 3605, such as providing information about or administering policies regarding loans for the purchase of homes. Plaintiffs do not respond to either of these points; their opposition to the arguments in Keegan's motion to dismiss does not mention section 3605(a) at all. Accordingly, the Court considers the arguments to be conceded. See Buggs v. Powell, 293 F.Supp.2d 135, 141 (D.D.C.2003) ("It is understood in this Circuit that when a plaintiff files an opposition to a dispositive motion and addresses only certain arguments raised by the defendant, a court may treat those arguments that the plaintiff failed to address as conceded." (citing FDIC v. Bender, 127 F.3d 58, 67-68 (D.C.Cir.1997); Stephenson v. Cox, 223 F.Supp.2d 119, 121 (D.D.C.2002))).
Despite moving for dismissal of plaintiff's entire complaint as to her, Keegan makes no argument directly addressing section 3608, which provides in relevant part that "[a]ll executive departments and agencies shall administer their programs and activities relating to housing and urban development . . . in a manner affirmatively to further the purposes of this subchapter," 42 U.S.C. § 3608(d), and the Secretary of HUD shall "administer the programs and activities relating to housing and urban development in a manner affirmatively to further the policies of this subchapter," id. § 3608(e)(5). The Court will nevertheless dismiss plaintiffs' claims against Keegan pursuant to this provision because Keegan, a state officer, is neither an executive department or agency nor the Secretary of HUD; therefore, these provisions do not mandate or prohibit any action by her.
Count II of plaintiffs' complaint alleges that Keegan and HUD have violated 42 U.S.C. § 5304(b)(2), a provision of the HCDA, which requires:
42 U.S.C. § 5304(b)(2). Specifically, plaintiffs allege that defendants have "failed to administer the [Road Home Program] in a manner that affirmatively furthers fair housing." Compl. ¶ 77. No party disputes
Keegan has moved for dismissal of this claim as against her, however, on the ground that there is no private right of action under this provision.
Plaintiffs disagree. They argue first that Congress plainly intended to allow for private rights of action under the HCDA, relying on legislative history and Montgomery Improvement Ass'n v. HUD, 645 F.2d 291 (5th Cir.1981), a Fifth Circuit case permitting such a suit. Second, they argue that even if their first argument is incorrect, they may go forward with their claim under 42 U.S.C. § 1983.
The Court cannot agree with either of plaintiffs' contentions. Although "whether a statutory violation may be enforced through § 1983 `is a different inquiry than that involved in determining whether a private right of action can be implied from a particular statute,'" Gonzaga Univ. v. Doe, 536 U.S. 273, 283, 122 S.Ct. 2268, 153 L.Ed.2d 309 (2002) (quoting Wilder v. Va. Hosp. Ass'n, 496 U.S. 498, 508 n. 9, 110 S.Ct. 2510, 110 L.Ed.2d 455 (1990)), both "require a determination as to whether or not Congress intended to confer individual rights upon a class of beneficiaries," id. at 285, 122 S.Ct. 2268. Courts have found that some provisions of the HCDA do indicate such an intent. See Price v. City of Stockton, 390 F.3d 1105, 1111 (9th Cir.2004) (concluding that 42 U.S.C. § 5304(k) "evinces a clear intent to create a federal right" because it "requires that benefits be provided to particular persons displaced by federally funded redevelopment activities"); Chan v. City of New York, 1 F.3d 96, 104 (2d Cir.1993) (concluding that plaintiffs could bring a section 1983 action for a violation of 42 U.S.C. § 5310, "the provision for payment of a certain minimum wage" to workers employed with funds from grants under the HCDA, because that provision "confers its principal benefit on the wage earners," who are "clearly specified" as "laborers and mechanics").
Keegan moves for transfer of this case to the Middle District of Louisiana, in which Baton Rouge, the capital of Louisiana, is located, pursuant to 28 U.S.C. § 1404(a).
Plaintiffs respond that their choice of forum should be given significant weight. They also note that HUD's assistance in developing and approval of the Road Home Program occurred in, and plaintiff National Fair Housing Alliance is based in, the District of Columbia. As to the public interest factors, they note that the Middle District of Louisiana has no special expertise in the legal questions this case raises. Furthermore, they contend that the District of Columbia, as the seat of the federal government, has an interest in the enforcement of federal statutes as well as adherence to those statutes by federal agencies, such as HUD.
Although several factors do weigh in favor of Keegan's request, the Court will not exercise its discretion to transfer this case. At this point, this Court is familiar with the facts and legal issues raised, and two of its opinions in this action are on appeal to the D.C. Circuit. Therefore, the interests of justice—in particular, in judicial efficiency—weigh strongly on the side of keeping the Court in this district. Cf. Navajo Nation v. Peabody Holding Co., Inc., 209 F.Supp.2d 269, 280 (D.D.C.2002) (denying a motion to transfer in part because where "th[e] case has been pending in this Court for almost three years, during which time the Court has considered and resolved a variety of potentially dispositive motions and discovery disputes," the "interests of judicial efficiency" would not have been served by transfer). Accordingly, the Court will not grant this motion.
For the foregoing reasons, it is this 7th day of September 2010 hereby