Case 1:08-cv-01938-HHK Document 1 Filed 11/12/2008 Page 1 of 18

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, 228 St. Charles Avenue, Suite 1035, New Orleans, Louisiana, 70130; NATIONAL FAIR HOUSING ALLIANCE, 1101 Vermont Avenue NW, Suite 710, Washington, D.C., 20005; and GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, DAPHNE JONES, and EDWARD RANDOLPH, on behalf of themselves and all others similarly situated;
Plaintiffs,
v.
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, 451 Seventh Street SW, Washington, D.C., 20410; and PAUL RAINWATER, IN HIS OFFICIAL CAPACITY AS EXECUTIVE DIRECTOR OF THE LOUISIANA RECOVERY AUTHORITY, 150 Third Street, Suite 200, Baton Rouge, Louisiana, 70801;
Defendants.

Case: 1:08-cv-01938 Assigned To: Kennedy, Henry H. Assign. Date: 11/12/2008 Description: Civil Rights - Non. Employ.

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF INTRODUCTORY STATEMENT
I. This is a civil rights case brought by fair housing organizations and African American homeowners in New Orleans, Louisiana, on behalf of themselves and more than 20,000 similarly situated families, to redress the harm caused by Defendants' discriminatory design and operation of the Road Home program, the largest housing redevelopment program in United States history. This case is brought to enforce the Fair Housing Act of 1968, as amended

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(42 U.S.c. § 3601 et seq.), and Title I of the Housing and Community Development Act of 1974, as amended (42 U.S.C. § 5301 et seq.).
2. This action arises out of Defendants' design and operation of the Road Home program, an $11 billion housing redevelopment program that provides grants to homeowners in Louisiana who were affected by Hurricanes Katrina and Rita in 2005. The purpose of the Road Home program is to restore communities by helping families rebuild and return to their.homes.
3. Road Home grants are calculated using the lower of two baseline values: the prestorm value of the home, or the cost ofdilmage to the home. The Road Home formula has a
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discriminatory disparate impact on African American homeowners because home values in predominantly African American communities are generally lower than home values for similar homes in predominantly white communities.
4. As a result, African American homeowners are more likely to receive Road Home grants based on the pre-storm value of their home than are white homeowners, and African American families therefore face larger gaps than white families between the grant amount and the cost to rebuild. Because of this disparity, an African American family is less likely to be able to rebuild its home and remain in its community than a white family with a comparable home that suffered similar damage.
5. The Road Home program is funded by the CDBG Disaster Recovery Grant program, a $19.7 billion Community Development Block Grant program allocated by Congress for necessary expenses related to disaster relief, long-term recovery, and rebuilding expenses in those areas most affected by Hurricanes Katrina and Rita.
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6. Defendant United States Department of Housing and Urban Development administers the CDBG Disaster Recovery Grant program. Defendant Paul Rainwater, Executive Director of the Louisiana Recovery Authority, administers the Road Home program.
7. Plaintiffs seek a judgment declaring that Defendants have violated the Fair Housing Act of 1968 and Title I of the Housing and Community Development Act of 1974, and an injunction ordering Defendants to recalculate Road Home homeowner grants in a nondiscriminatory manner.
JURISDICTION AND VENUE \
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8. Jurisdiction is conferred on this Court by 28 U.S.C. § 1331 because this action arises under the Constitution and laws of the United States; by 28 U.S.C. § 1343(a)(3) because Plaintiffs seek to redress the deprivation of rights secured by the Constitution and Acts of Congress providing for equal rights; by 28 U.S.C. § 1343(a)(4) because Plaintiffs seek to secure equitable and other relief under Acts of Congress protecting civil rights; and by 42 U.S.c. § 3613(a) because Plaintiffs seek relief with respect to discriminatory housing practices in violation of the Fair Housing Act.
9. Declaratory and injunctive relief is sought as authorized by 28 U.S.c. §§ 2201 and 2202.
10. Venue is proper in the United States District Court for the District of Columbia under 28 U.S.C.§§ 1391(b) and 1391(e).
PARTIES 11. Plaintiff Greater New Orleans Fair Housing Action Center, Inc. (GNOFHAC) is a non-profit fair housing organization incorporated under the laws of the State of Louisiana and located at 228 St. Charles Avenue, Suite 1035, New Orleans, Louisiana, 70130. GNOFHAC's
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mission is to eradicate housing discrimination and segregation throughout the New Orleans metropolitan area. It engages in education, investigation, and enforcement activities with respect to fair housing laws.
12. PlaintiffNational Fair Housing Alliance, Inc. (NFHA) is a national non-profit public service organization incorporated under the laws of the Commonwealth of Virginia with its principal place of business at 1101 Vermont Avenue NW, Suite 710, Washington, D.C., 20005. NFHA is a nationwide alliance of private, non-profit fair housing organizations. NFHA works to eliminate housing discrimimitiol1 and to ensure equal opportunity for all people through
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leadership, education and outreach, membership services, public policy initiatives, advocacy, and enforcement. NFHA established GNOFHAC in 1995, and GNOFHAC is now a NFHA member and receives a variety of training and technical assistance from NFHA. Following Hurricanes Katrina and Rita, NFHA raised funds to promote fair housing in the redevelopment and reconstruction of New Orleans, and diverted resources to staff that effort.
13. Plaintiff Gloria Burns is African American and currently resides temporarily in Baton Rouge, Louisiana. Ms. Burns has lived in New Orleans her entire life, and has owned a home in the St. Roch neighborhood in New Orleans since 1993. Her home was catastrophically damaged by Hurricane Katrina and the subsequent flooding.
14. Plaintiff Rhonda Dents is African American and resides in New Orleans, Louisiana. Ms. Dents has lived in New Orleans since 1985, and has owned a home in the Gentilly neighborhood in New Orleans since 1993. Her home was catastrophically damaged by Hurricane Katrina and the subsequent flooding.
15. Plaintiff Almarie Ford is African American and resides in New Orleans, Louisiana. Ms. Ford has lived in New Orleans since 1971, and has owned a home in the New
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Orleans East neighborhood ofNew Orleans since 1988. Her home was catastrophically damaged by Hurricane Katrina and the subsequent flooding.
16. Plaintiff Daphne Jones is African American and resides in New Orleans, Louisiana. Ms. Jones has lived in New Orleans her entire life, and has owned a home in the Lower Ninth Ward in New Orleans since approximately 1999. Her home was catastrophically damaged by Hurricane Katrina and the subsequent flooding.
17. Plaintiff Edward Randolph is African American and currently resides temporarily in Luling, Louisiana. Mr. Randolph hasliyed in New Orleans his entire life, and has owned a
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home in the New Orleans East neighborhooc! of New Orleans since 2000. His home was catastrophically damaged by Hurricane Katrina and the subsequent flooding.
18. Defendant United States Department of Housing and Urban Development (HUD) is a Department of the Executive Branch of the United States Government. HUD was created by Congress pursuant to 42 U.S.c. § 3532. HUD is responsible for the administration, funding, and supervision offederal low-income housing programs, including the Community Development Block Grant program.
19. Defendant Paul Rainwater is the Executive Director of the Louisiana Recovery Authority (LRA). The LRA is a Louisiana state agency created to coordinate and administer programs and funds from federal, state, local, and private sources for recovery from Hurricanes Katrina and Rita, including CDBG Disaster Recovery Grant funds. See La. Rev. Stat. §§ 36:4(H), 49:220.1 - 49:220.7.
CLASS ACTION ALLEGATIONS 20. The individual Plaintiffs bring this action on behalf of themselves and all others similarly situated pursuant to Rule 23 of the Federal Rules of Civil Procedure.
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21. The class consists of all African American homeowners in New Orleans who have participated in the Road Home program or who will participate by the first day oftrial, whose grant amount was calculated or will be calculated based on the pre-stonn value of their homes, and who have selected or will select the program's option of using the funds to repair or rebuild their homes. The challenged formula was applied to each member of the proposed class.
22. This action is properly maintainable as a class action because the requirements of Rule 23(a) and Rule 23(b) of the Federal Rules of Civil Procedure are met.
23. The class is so numeroiisthatjoinder of all members is impracticable. Upon \
information and belief, more than 20,000 A"frican American homeowners in New Orleans are
membersofthe proposed class. 24. The claims alleged on behalf of the named Plaintiffs as class representatives raise
questions oflaw or fact common to the class. These common questions include, but are not limited to, whether the decision to consider the pre-storm value of the home in determining the grant amount has had an adverse impact upon the class; whether the decision to use the pre-storm value ofthe home can be justified in terms of the program's goals; whether HUD acted lawfully in approving the Road Home grant formula; and whether the class may obtain injunctive relief and other equitable remedies.
25. The claims of the class representatives are typical of the class they seek to represent.
26. The class representatives will fairly and adequately protect the interests of other class members. Plaintiffs' counsel are experienced in federal court class-action litigation, including fair housing and civil rights litigation.
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27. This action is properly maintainable as a class action under Rule 23(b)(2) of the Federal Rules of Civil Procedure because the Defendants have acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole.
28. This action is also properly maintainable as a class action under Rule 23(b)(3) of the Federal Rules of Civil Procedure because the questions of law and fact common to members of the class predominate over questions affecting only individual members and a class action is superior to other available methods for'the fair and efficient resolution ofthis controversy.
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'FACTS I. Hurricanes Katrina and Rita.
29. Hurricane Katrina made landfall in southeast Louisiana on the morning of August 29,2005. As the eye of the storm passed over the city of New Orleans, high rainfall amounts and the intense storm surge from the Gulf of Mexico and Lake Pontchartrain compromised the city's flood protection levees along canals and other bodies of water. Within hours, approximately 80% ofthe city was flooded,
30. Hurricane Rita made landfall near the Texas-Louisiana border on September 24, 2005, causing additional flooding and damage to the city of New Orleans.
31. As a result ofHurricanes Katrina and Rita, more than half a million New Orleans residents were displaced and more than 53,000 homes in New Orleans were damaged or destroyed. In total, approximately 71 % of occupied housing units in New Orleans were damaged by the storms. Hurricane Katrina alone caused an estimated $81.2 billion in damage, making it the costliest hurricane in United States history.
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32. Many families that left New Orleans because of Hurricanes Katrina and Rita have not yet been able to return; more than three years after the storms,. New Orleans has recovered
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only 72% of its pre-Katrina population. II. The CDBG Disaster Recovery Grant program.
33. In response to the historic damage caused by Hurricanes Katrina and Rita, Co.ngress created the CDBG Disaster Recovery Grant program and funded it through three appropriatio.ns statutes. See Pub. L. No.. 109-148, 119 Stat. 2680, 2779-81 (Dec. 30, 2005) (the 2005 Act); Pub. L. No.. 109-234, 120 Slat, 418, 472-73 (June 15, 2006) (the 2006 Act); Pub. L.
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No. 110-116, 121 Stat. 1295, 1343-44 (Nov: 13, 2007) (the 2007 Act). 34. Congress passed the first two appropriations statutes to address disaster relief,
long-term recovery, and rebuilding expenses in those areas in the Gulf of Mexico that were most impacted by Hurricanes Katrina and Rita in 2005. See 2005 Act, 119 Stat. at 2779-81 (appropriating $11.5 billion to Louisiana, Mississippi, Texas, Florida, and Alabama); 2006 Act, 120 Stat. at 472-73 (appropriating an additional $5.2 billion to the same states).
35. Of the total $16.7 billion appropriation in the 2005 and 2006 Acts, HUD allocated $10.41 billion to Louisiana for disaster recovery expenses. See 71 Fed. Reg. 7666, 7666 (Feb. 13,2006); 71 Fed. Reg. 63,337, 63,338 (Oct. 30, 2006).
36. Congress passed the third appropriations statute in 2007, authorizing an additio.nal $3 billion for supplemental CDBG grants to Louisiana specifically to cover costs associated with eligible Road Home claims. .See 2007 Act, 121.Stat. at 1343-44. Louisiana's total disaster. recovery allocation from the three appropriations statutes is $13.41 billion.
37. The appropriations statutes creating the CDBG Disaster Recovery Grant program adopt the general framework that governs the regular CDBG program, although HUD may waive
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standard CDBG requirements - except for those relating to fair housing, nondiscrimination, labor standards, and the environment - when requested by a state. See 2005 Act, 119 Stat. at 2779-80; 2006 Act, 120 Stat. at 472-73.
38. The appropriations statutes also require each state to submit an action plan in advance ofthe receipt of grant funds that details the state's intended uses of those funds, and to submit a quarterly report to the Senate and House Committees on Appropriations reporting on all awards and uses of funds. See 119 Stat. at 2780; 120 Stat. at 473.
39. Pursuant to these statutorY:r.equirements, the LRA draws down Disaster Recovery
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Grant funds from HUD as the state's plans for the use of those funds are approved. 40. The most recent data show that as of June 30, 2008, the LRA has drawn down
approximately $4.4 billion ofthe $6.2 appropriated to HUD and allocated to the state pursuant to the 2005 Act. See Second Quarter 2008 Performance Report (First Appropriation), at http://www.doa.louisiana.gov/cdbgIDRl2ndQuarter0f2008Grantl.htm.As of the same date, the LRA had drawn down approximately $3 billion of the $4.21 appropriated to HUD and allocated to the state pursuant to the 2006 Act. See Second Quarter 2008 Performance Report (Second Appropriation), at http://www.doa.louisiana.gov/cdbgIDRl2ndQuarter0f2008Grant2.htm. III. The Road Home program.
41. Of the $13.41 billion in CDBG Disaster Recovery Grant funds allocated by HUD to Louisiana pursuant to the three appropriations statutes, the state has designated approximately $11 billion for housing programs known collectively as the Road Home program.
42. With an $11 billion budget, the Road Home program is the largest housing recovery program in United States history. See The Road Home Program, "About Us," at http://www.road2Ia.org/about-us.
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43. The Road Home Homeowner Assistance Program offers relief to the approximately 150,000 owner-occupied homes that were destroyed or suffered major damage as a result of Hurricanes Katrina and Rita. Eligible homeowners are those who owned and occupied a home in a single-unit or double-unit structure at the time of the hurricanes, registered for FEMA Individual Assistance, and had FEMA categorize their home as destroyed or having suffered major damage.
44. The stated purpose of the Road Home program is to rebuild communities in Louisiana affected by Hurricanes KatrTl1a.~nd Rita. See Louisiana Recovery Authority, Action
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Plan Amendment 14 (First Allocation) - Rob.d Home Homeowner Compensation Plan 2 (2007); Louisiana Recovery Authority, The Road Home Housing Programs, Action Plan Amendment for Disaster Recovery Funds 5 (2006).
45. Homeowners who receive Road Home grants are given a choice of promising to use the funds to rebuild or repair their homes or of receiving a reduced grant that may be used to obtain housing outside oftheir home parish or outside the state of Louisiana.
46. The maximum Road Home grant that a homeowner may receive is $150,000. 47. Road Home grants are calculated using the lower of two baseline values: the prestorm value of the home, or the cost of damage to the home. 48. Low- and moderate-income families (those whose income is 80% or less of the area median income) that intend to remain homeowners in Louisiana may be eligible for an "Additional Compensation Grant" of up to $50,000, although in no case may the total Road Home grant exceed the $150,000 limit. 49. The LRA, in consultation with HUD, proposed and developed the Road Home grant formula and the details of the Road Home program.
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, 50. HUD approved the Road Home grant formula and the details of the Road Home program as a condition of the distribution ofCDBG Disaster Recovery Grant funds. 51. The LRA administers the Road Home program subject to ongoing oversight and continuing approval by HUD.
IV. The effect of the Road Home grant formula on African American homeowners and the refusal to adopt less discriminatory alternatives. 52. The requirement that Road Home grant awards not exceed the pre-storm value of
the home (where pre-storm value is less than the cost of damage) has a discriminatory disparate impact on African Americans living in hist'orically segregated communities.
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53. Comparable homes have lower values in predominantly African American communities than in predominantly white communities.
54. Census data demonstrate that African American homeowners in New Orleans are more likely than white homeowners in New Orleans to own homes with lower values. Data from the 2000 census show that nearly 80% of homes owned by African Americans in New Orleans were valued at less than $100,000, while only about 33% of homes owned by white homeowners in New Orleans were valued at less than $100,000. Data from the 2000 census further show that approximately 93% of homes owned by African Americans in New Orleans were valued at less than $150,000, compared to 55% of homes owned by white homeowners.
55. African Americans whose property received substantial damage and who qualify for Road Home grants are more likely than white applicants to receive a grant that is based on the pre-storm value of their home.
56. Because the Road Home formula limits grant awards to the pre-storm value of the home where that amount is less than the cost of damage, African American recipients of Road
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Home grants are more likely than white grantees to have a gap between their rebuilding

resources and the cost to rebuild.

57. Among all applicants who have a gap between their rebuilding resources and the

cost to rebuild, the average gap for African American applicants is far larger than the average

gap for white applicants.

58. The Road Home formula design disproportionately burdens African American

homeowners and hinders their ability to return to their homes compared to white families.

59. The Additional Compeiisation Grant available for certain eligible low- and

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moderate-income families does not elimina!'t\ the discriminatory disparities in grant amounts

between African American and white homeowners.

60. The discriminatory disparities in the application of the Road Home formula are

not justified by legitimate interests of the Defendants, and alternative courses of action are

available to accomplish the goals of the program without imposing a disproportionate burden on

African American homeowners. In particular, Road Home grants could be calculated based on

the cost of damage to the home, which would permit the program to achieve its goal of restoring

communities and permitting homeowners to rebuild their homes.

V. Injnry to the individnal Plaintiffs.

61. Plaintiff Gloria Burns applied for a Road Home grant to help finance repairs to

her home, which was heavily damaged by Hurricane Katrina and the subsequent flooding. Ms.

Burns has been approved for a Road Home grant of $1 06,500 based on the pre-storm value of

her home, including the Additional Compensation Grant. She has been unable to complete

repairs to her home because the total amount she received from all sources, including the Road

Home program, fell short of her home's cost of damage by $89,000. Had her Road Home grant

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been calculated based on the cost of damage to her home, she would have received a grant of $150,000.
62. Plaintiff Rhonda Dents applied for a Road Home grant to help finance repairs to her home, which was heavily damaged by Hurricane Katrina and the subsequent flooding. She has been approved for a Road Home grant of$88,534 based on the pre-storm value of her home. Because her Road Home grant fell short of her home's cost of damage by $58,730, she is now living in a modular home of poorer construction quality and smaller size on the same property. Had her Road Home grant been calculated based on the cost of damage to her home, she would
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have received a grant of$147,264.33. \, 63. Plaintiff Almarie Ford applied for a Road Home grant to help finance repairs to
her home, which was heavily damaged by Hurricane Katrina and the subsequent flooding. She received a Road Home grant of$3,468 based on the pre-storm value of her home. She has been unable to complete repairs to her home because the total amount she received from all sources, including the Road Home program, fell short of her home's cost of damage by $156,073. Had her Road Home grant been calculated based on the cost of damage to her home, she would have received a gran!of$150,000.
64. Plaintiff Daphne Jones applied for a Road Home grant to help finance repairs to her home, which was destroyed by Hurricane Katrina and the subsequent flooding. She received a Road Home grant of$61,000 based on the pre-storm value of her home, including the Additional Compensation Grant. The total rebuilding assistance she received from all sources, including the Road Home program, fell short of her home's cost of damage by $45,261.65. She has not been able to complete all needed repairs to her home, and has had to utilize personal savings and volunteer labor to make the home livable. Had her Road Home grant been
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calculated based on the cost of damage to her home, she would have received a grant of $106,261.65.
65. Plaintiff Edward Randolph applied for a Road Home grant to help finance repairs to his home, which was heavily damaged by Hurricane Katrina and the subsequent flooding. He received a Road Home grant of$16,649.92 based on the pre-stonn value of his home. He has been unable to complete repairs to his home because the total amount he received from all sources, including the Road Home program, fell short of his home's cost of damage by $173,193. Had his Road Home grant bee,n calculated based on the cost of damage to his home,
\ he would have received a grant of$150,000'),
VI. Injury to the organizational Plaintiffs. 66. Plaintiffs GNOFHAC and NFHA established a collaborative program known as
the Hurricane Relief Project after Hurricanes Katrina and Rita. GNOFHAC and NFHA have raised funds from charitable sources to support the Hurricane Relief Project. NFHA has provided financial and technical support and training to GNOFHAC and others of its members in the Gulf Coast region.
67. The goals of the Hurricane Relief Project include increasing residential integration and eliminating residential segregation in New Orleans and other communities in the Gulfby facilitating rebuilding and promoting a broad range of housing options to past and future residents of the region. The Hurricane Relief Project also assists hurricane-affected homeowners in negotiating equitable settlements with their mortgage servicers and insurance companies, to ensure their ability to remain in their homes and their communities.
68. Since the Road Home program began operating in the fall of2006, Hurricane Relief Project staff have expended a substantial amount of time and resources representing the
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interests of homeowners, home seekers, and other parties who need assistance enforcing their

rights to equal housing. In the course of this work, Hurricane Relief Project staff have found it

more difficult to ensure that homeowners could remain in their homes and in their communities

because of the Road Home program's rule that grants may not exceed the pre-storm value of the

home.

69. As a result of Defendants' discriminatory policies and practices, as alleged above,

GNOFHAC has been directly and substantially injured and frustrated in its mission to promote

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fair housing throughout the greater New .Orleans area by guaranteeing all people equal access to

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housing opportunities and by creating and maintaining integrated housing patterns.

70. As a result of Defendants' discriminatory policies and practices, as alleged above,

NFHA has been substantially injured and frustrated in its mission to eradicate housing

discrimination and eliminate segregation in housing, and in its efforts to carry out the programs

and services that it provides, including but not limited to assisting hurricane-affected

homeowners in New Orleans to rebuild their homes and remain in their communities.

71. GNOFHAC and NFHA have also been damaged by the Defendants'

discriminatory policies and practices by being forced to devote scarce resources to identifying

and counteracting Defendants' unlawful housing practices. GNOFHAC and NFHA have been

required to, among other things, devote time, resources, and money to educating public officials

in Louisiana, including the Governor and offi<;ials of the Louisiana Recovery Authority;

educating other public officials as well as HUD regarding the racially discriminatory impact of

the Road Home grant formula; and identifying, assisting, and educating local homeowners in

New Orleans.

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72. Further, as a result of the practices alleged above, GNOFHAC and NFHA will . continue to have their resources diverted in the future, and their missions further frustrated,
because of the need to continue to seek non-discriminatory and desegregative measures in the New Orleans area and the need to continue to educate the public about the discriminatory and illegal nature of the Road Home program that has the effect oflimiting minorities' ability to return and rebuild.
73. Had GNOFHAC and NFHA not been required by Defendants' discriminatory grant policies and practices to divert their resources and utilize continuing resources to remedy
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the effects of these discriminatory actions, C5NOFHAC and NFHA would have devoted their resources to their other activities and services such as expanding equal housing opportunities; furthering the Congressional purpose of eliminating segregated housing patterns throughout the United States; providing counseling and referral services to the public with respect to housing discrimination matters; educating the public about housing discrimination laws; promoting racial and ethnic integration and furthering compliance with fair housing laws; working with community groups to stabilize neighborhoods, through grant and loan programs, counseling, and education; and assisting residents of the Gulf Coast region affected by Hurricanes Katrina and Rita, including residents of New Orleans, to negotiate mortgage loan modifications and equitable insurance settlements in order to be able to rebuild their homes and remain in their communities.
CLAIMS FOR RELIEF COUNT ONE: Violations of the Fair Housing Act of 1968.
74. Defendants have, as described above, made unavailable or denied housing to African American homeowners because of their race in violation of the Fair HousingAct, 42 U.S.C. § 3604(a).
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75. Defendants have, as described above, discriminated against African Americans

because of their race in the availability of, and in the terms and conditions of, real estate-related

transactions in violation of the Fair Housing Act, 42 U.S.c. § 3605(a).

76. Defendants have, as described above, failed to administer housing-related

programs and activities in a manner that affirmatively furthers fair housing, in violation of the

Fair Housing Act, 42 U.S.C. §§ 3608(d), (e)(5).

COUNT TWO: Violations of the Honsing and Community Development Act of 1974.

77. Defendants have, as described above, failed to administer the Community

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Development Block Grant program in a manner that affirmatively furthers fair housing, in

violation of Title I ofthe Housing and Community Development Act of 1974, 42 U.S.c.

§ 5304(b)(2).

REQUEST FOR RELIEF

WHEREFORE, Plaintiffs respectfully request that this Court:

a) CertifY this action as a class action on behalf ofthe proposed class pursuant to Rules

23(a) and 23(b) of the Federal Rules of Civil Procedure;

b) Declare that Defendants' acts, practices, policies, and omissions have deprived Plaintiffs

of their rights under the Fair Housing Act of 1968 and Title I ofthe Housing and

Community Development Act of 1974;

c) Order all appropriate injunctive relief as warranted, 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;

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d) Order reasonable attorneys' fees and costs to be paid by Defendants pursuant to 28 U.S.C. § 2412 and 42 U.S.C. §§ 1988,3613; and
e) Grant such other and further relief as the Court deems just and equitable.

Dated: November 12,2008
Respectfully submitted,
John P on, President Direct (D.C. Bar No. 282699)
Debo P. Adegbile Matthew Colangelo Damon T. Hewitt ReNika C. Moore NAACP LEGAL DEFENSE AND
EDUCATIONAL FUND, INC. 99 Hudson Street, 16th Floor New York, NY 10013 (212) 965-2200

~~~~(~

Jos

. S lIers .C. Bar No. 318410)

L1ezlie 1. Green (D.C. Bar No. 484051)

Daniel Tenny (D.C. Bar No. 981312)

COHEN MILSTEIN

1100 New York Avenue, NW, Suite 500

Washington, D.C. 20005

(202) 408-4600

I//L f?r / / ~dtct
M. Lucia Blacks er

~~/y'/,~-

GREATERNEWORLEANSFAlR ~

HOUSING ACTION CENTER, INC.

228 St. Charles Avenue, Suite 1035

New Orleans, LA 70130

(504) 596-2100

Attorneys for Plaintiffs

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 Case 1:08-cv-01938-HHK Document 72 Filed 08/16/10 Page 1 of 6

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, et al.
Plaintiffs,
v.
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
and
ROBIN KEEGAN, Executive Director of the Louisiana Recovery Authority,
Defendants.

Civil Action 08-01938 (HHK)

MEMORANDUM OPINION AND ORDER Before the Court are plaintiffs’ “Second Motion for a Temporary Restraining Order and Preliminary Injunction” [#62] and the “Motion to Stay Proceedings Pending Appeal” of defendant Robin Keegan, Executive Director of the Louisiana Recovery Authority [#70]. Upon consideration of the motions, the oppositions thereto, and the record of this case, the Court concludes that Keegan’s motion should be denied and plaintiffs’ motion should be granted.
I The background of this case is set out in the Court’s memorandum opinion explaining the reasons for its denial of plaintiffs’ first motion for a temporary restraining order (“TRO”) and preliminary injunction. See Greater New Orleans Fair Hous. Action Ctr. v. U.S. Dep’t of Hous. and Urban Dev., — F. Supp. 2d —, 2010 WL 2718164, at *1-2 (July 6, 2010). The Court will not repeat that background here except to briefly summarize that Keegan’s agency is tasked with distributing funds appropriated by Congress to individuals whose homes were damaged by

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Hurricanes Rita and Katrina. Plaintiffs assert that the formula by which she does so under a portion of the program called Option 1 has a discriminatory impact on African-American homeowners in New Orleans, in violation of the Fair Housing Act, 42 U.S.C. § 3601 et seq. After the Court denied plaintiffs’ motion for a TRO and preliminary injunction, plaintiffs filed an interlocutory appeal to the Court of Appeals for the D.C. Circuit. That appeal is pending. On July 21, 2010, plaintiffs filed a second motion for a TRO, seeking to enjoin Keegan from disbursing initial Road Home Program awards to Option 1 applicants using a formula that takes into account the pre-storm value of an individual’s home. Keegan opposes this motion and also seeks a stay of this case pending appellate review.
II A. Motion to Stay
The Court first addresses Keegan’s motion to stay. Keegan seeks a stay because, she asserts, the issues raised in plaintiffs’ second motion for a TRO are identical to those now before the D.C. Circuit on appeal. The Court disagrees. Although the two motions are closely related, the second motion seeks different relief than did the first. Accordingly, the D.C. Circuit will review the Court’s resolution of whether the broad relief plaintiffs initially sought was warranted; the Court here addresses whether the narrow relief they seek now is appropriate. Therefore, the Court will not stay this case. B. Second Motion for a TRO and Preliminary Injunction
This court may issue a preliminary injunction only when the movant demonstrates: (1) “a substantial likelihood of success on the merits”; (2) “that it would suffer irreparable injury if the injunction is not granted”; (3) “that an injunction would not substantially injure other interested
2

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parties”; and (4) “that the public interest would be furthered by the injunction.” Mova Pharm. Corp. v. Shalala, 140 F.3d 1060, 1066 (D.C. Cir. 1998) (quoting CityFed Fin. Corp. v. Office of Thrift Supervision, 58 F.3d 738, 746 (D.C. Cir. 1995)). “These factors interrelate on a sliding scale and must be balanced against each other.” Serono Labs., Inc. v. Shalala, 158 F.3d 1313, 1318 (D.C. Cir. 1998).
1. Likelihood of Success on the Merits The Court explained in its previous opinion that plaintiffs are likely able to make out a prima facie case that the formula used to calculate awards under Option 1 of the Road Home Program violates the Fair Housing Act. See Greater New Orleans, 2010 WL 2718164, at *3. Nevertheless, the Court determined that plaintiffs did not have a likelihood of success on the merits of their case because, under a line of cases expanding upon Ex parte Young, 209 U.S. 123 (1908), the Court does not have jurisdiction to provide the retroactive relief—specifically, correction of awards already disbursed—plaintiffs ultimately sought. See id. at *4-6. Plaintiffs’ current motion, however, only seeks an injunction that would allow them ultimately to obtain the limited relief the Court explained in a Clarification of an earlier order, issued June 4, 2010 [#52], it has jurisdiction to provide. Specifically, they ask that Keegan be enjoined from disbursing future, initial Road Home Program awards under Option 1 based on a formula that takes into account the pre-storm value of the applicant’s home. In this way, plaintiffs seek to preserve the claims of those individuals who have not yet received awards. Keegan disputes the Court’s determination that plaintiffs have submitted evidence sufficient to show that they would likely be able to make out a prima facie case of racially discriminatory impact. But the Court finds no reason to reconsider its ruling as to that issue, especially where Keegan has still provided neither
3

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evidence contradicting plaintiffs’ contentions nor an explanation of the reason for taking prestorm home values into account. Because plaintiffs will likely be able to show after discovery that the Option 1 formula is unlawful and in the absence of an impediment to success where plaintiffs ultimately seek only prospective relief, the Court concludes that plaintiffs have a likelihood of prevailing on the merits of their Fair Housing Act claim as to Option 1 awards that have not yet been distributed.
2. Irreparable injury For the reasons explained in this Court’s prior rulings and as referenced above, only individuals who are entitled to but have not yet received initial Option 1 grants may bring suit on the theories plaintiffs advance. As Keegan continues to distribute awards, homeowners who receive them lose their ability to challenge what plaintiffs allege is a racially discriminatory formula. Accordingly, the Court finds that prospective Road Home Program recipients would face irreparable injury were it not to grant the injunction sought. 3. Substantial injury to other parties The Court acknowledges that granting plaintiffs’ motion may delay the distribution of awards to some homeowners, and for that reason, this factor weighs against doing so. The Court notes, however, that plaintiffs seek narrow relief—their proposed order specifically provides that Keegan “may continue to calculate and disburse grant awards in a manner that does not utilize the pre-storm value of the beneficiary’s home as a criterion,” Pls.’ 2d Mot. for TRO, Proposed Order at 1—so the injunction need not delay all Option 1 awards and will not interfere with the administration of any other portion of the Road Home Program.
4

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4. Public interest As noted in the Court’s previous opinion, it is in the public interest to remedy housing discrimination as well as to promptly disburse funds for the purpose of helping those severely harmed by hurricanes that occurred years ago. This factor therefore does not weigh strongly on the side of either party’s position. 5. Conclusion Having weighed the factors that must be considered when determining whether to grant injunctive relief, the Court concludes that it is appropriate to grant the injunction plaintiffs seek here. Plaintiffs are likely to succeed on the merits of their Fair Housing Act claim as to the Option 1 awards not yet disbursed, individuals who have not received awards will suffer irreparable injury to their ability to bring such claims if they receive awards based on the allegedly discriminatory formula, and neither the interests of third parties nor the public interest outweigh the reasons to grant the injunction.
III For the foregoing reasons, it is this 16th day of August 2010, hereby ORDERED that Keegan’s motion for a stay pending appellate review [#70] is DENIED; and it is further ORDERED that plaintiffs’ motion for a second TRO and preliminary injunction [#62] is GRANTED. Accordingly, Keegan, or any successor officer, is prohibited from disbursing any award under the Road Home Program using the pre-storm value of the home as a criterion for calculating the amount of such award. Under the terms of this order, Keegan may continue to calculate and disburse Road Home Program funds in a manner that does not take into account the
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Case 1:08-cv-01938-HHK Document 72 Filed 08/16/10 Page 6 of 6 pre-storm value of the recipient’s home. This injunction shall remain in effect until the Court issues a decision on the merits or orders otherwise.
Henry H. Kennedy, Jr. United States District Judge
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 Case 1:08-cv-01938-HHK Document 77 Filed 09/07/10 Page 1 of 21

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, et al.
Plaintiffs,
v.
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
and
ROBIN KEEGAN, Executive Director of the Louisiana Recovery Authority,
Defendants.

Civil Action 08-01938 (HHK)

MEMORANDUM OPINION AND ORDER Greater New Orleans Fair Housing Action Center, the National Fair Housing Alliance, and five individuals who own homes in New Orleans (collectively “plaintiffs”)1 bring this action against Robin Keegan, in her official capacity as Executive Director of the Louisiana Recovery Authority (“LRA”),2 and the U.S. Department of Housing and Urban Development (“HUD”), asserting that defendants have violated the Fair Housing Act (“FHA”), 42 U.S.C. § 3601 et seq., and the Housing and Community Development Act (“HCDA”), 42 U.S.C. § 5301 et seq. This

1

Plaintiffs seek to certify of a class of individual homeowners but, in accordance

with a deadline set in an order proposed by the parties and entered by the Court on February 9,

2009, they have not yet filed for class certification.

2

At the times plaintiffs filed their complaint and the state official filed the motion

to dismiss resolved herein, Paul Rainwater was the Executive Director of the LRA. Pursuant to

Rule 25(d) of the Federal Rules of Civil Procedure, his replacement, Robin Keegan, became the

named defendant when she took on Rainwater’s title. Since that time, the LRA has ceased to

exist, and Keegan has become the Executive Director of the Louisiana Office of Community

Development (“OCD”), the LRA’s successor agency. No party has moved to correct the caption

to reflect this change. The Court will continue to refer to the LRA as the relevant state agency.

Case 1:08-cv-01938-HHK Document 77 Filed 09/07/10 Page 2 of 21
case arises from the alleged racially discriminatory effect of a formula used to distribute grants as part of the Road Home Homeowner Assistance Program (“Road Home Program” or “Program”), a housing redevelopment initiative designed to help homeowners affected by Hurricanes Katrina and Rita. Plaintiffs seek an injunction requiring recalculation of Program awards to homeowners in New Orleans using a formula that does not have a disparate impact on African Americans. Before the Court is Keegan’s motion to dismiss and for a transfer of venue [#28]. Upon consideration of the motion, the opposition thereto, and the record of this case, the Court concludes that the motion to dismiss should be granted in part and denied in part and the motion to transfer should be denied.
I. BACKGROUND A. Factual Background
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).
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Case 1:08-cv-01938-HHK Document 77 Filed 09/07/10 Page 3 of 21

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.3 Each beneficiary of an Option 1 grant receives an award in the amount of either the value of her home before the storms or the cost of repairing her home, whichever is less, but not in excess of $150,000. Since plaintiffs initiated their suit, the LRA has created Additional Compensation Grants (“ACGs”), supplemental awards available to Option 1 beneficiaries whose incomes are at or below eighty percent of the median in their areas. Regardless of the pre-storm values of their homes, these individuals may receive ACGs such that their total awards from the Road Home Program reach the cost of repairs to their homes, still subject to the $150,000 cap.
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 2005.4 Each applied for a Road

3

The Program also permits homeowners to instead opt to receive smaller grants to

obtain housing elsewhere in Louisiana or outside the state. The design and implementation of

those aspects of the Program are not at issue here.

4

The other plaintiffs, Greater New Orleans Fair Housing Action Center and the

National Fair Housing Alliance, non-profit organizations based in Louisiana and Washington,

D.C., respectively, are advocacy groups that, inter alia, oppose housing discrimination.

3

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Home Program grant under Option 1, and each received an award based on the pre-storm value of her or his home rather than the cost of repairing that home. Since receiving their initial grants, Burns and Jones have been deemed eligible to receive ACGs such that their total awards will amount to $150,000. B. Procedural History
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, AfricanAmerican 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
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“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.5 On May 24, 2010, the Court issued an order scheduling a hearing on those motions [#45], indicating that the parties should address legal and factual issues regarding the application of Ex parte Young, 209 U.S. 123 (1908), to this case; in particular, the Court was concerned—as explained in some detail in a Clarification filed on June 4, 2010 [#52]—that the plaintiffs sought, in large part, retroactive relief that would impermissibly call on this Court to order payment from the state treasury. In response, plaintiffs filed a motion for a temporary restraining order (“TRO”) and preliminary injunction. They sought to have Keegan enjoined from spending any surplus funds—that is, Program funds not already designated for any specific use—until the merits of their case were resolved. The Court denied the motion largely for the reasons explained in the Clarification, see Greater New Orleans Fair Hous. Action Ctr. v. U.S. Dep’t of Hous. & Urban Dev., — F. Supp. 2d —, 2010 WL 2718164 (July 6, 2010), which are also relevant to the resolution of Keegan’s motion to dismiss. Plaintiffs then filed a second motion for a TRO and preliminary injunction, which sought only to enjoin Keegan from disbursing initial Road Home Program awards to

5

This opinion addresses only Keegan’s motion to dismiss. The Court will issue a

separate opinion resolving the distinct legal issues raised in HUD’s motion.

5

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Option 1 applicants using a formula that takes into account the pre-storm value of an individual’s home. The Court granted that motion. See Greater New Orleans Fair Hous. Action Ctr. v. U.S. Dep’t of Hous. & Urban Dev., — F. Supp. 2d —, 2010 WL 3221968 (August 16, 2010). Both of the Court’s opinions are currently on appeal to the D.C. Circuit.
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.
II. ANALYSIS A. Motion to Dismiss
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.
1. Sovereign immunity bars part of plaintiffs’ suit against Keegan. Keegan argues that plaintiffs’ claims against her are barred by sovereign immunity.6 She asserts that the exception to the Eleventh Amendment created by Ex parte Young, 209 U.S. 123 (1908), does not apply because (1) the LRA, not Keegan as its Executive Director, is responsible for the challenged provisions of the Road Home Program, and furthermore the LRA must obtain the approval of several other entities in order to take action; (2) plaintiffs seek retrospective

6

This portion of Keegan’s motion is based on Rule 12(b)(1) of the Federal Rules of

Civil Procedure, which provides for dismissal based on lack of subject-matter jurisdiction. Fed.

R. Civ. P. 12(b)(1).

6

Case 1:08-cv-01938-HHK Document 77 Filed 09/07/10 Page 7 of 21

relief; and (3) this case implicates “special sovereign interests” and therefore is barred according to the reasoning of Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261 (1997).7
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 Amendment8 bars suits against states absent a state’s consent to be sued. See Papasan v. Allain, 478 U.S. 265, 276 (1986).9 But Ex parte Young held that “[a] federal court is not barred by the Eleventh Amendment from enjoining state officers from acting unconstitutionally, either because their action is alleged to violate the Constitution directly or because it is contrary to a federal statute or regulation that is the supreme law of the land.” Vann v. Kempthorne, 534 F.3d 741, 749 (D.C. Cir. 2008) (quoting CHARLES ALAN

7

Keegan also asserts that plaintiffs’ “fail[ure] to address the issue of sovereign

immunity in their Complaint,” in particular by not “invok[ing] Ex parte Young,” is “fatal.”

Keegan Mot. to Dismiss at 7. She cites no authority for the proposition that a plaintiff must

plead the application of the doctrine established in that case in order to rely upon it.

8

The Eleventh Amendment provides that “[t]he Judicial power of the United States

shall not be construed to extend to any suit in law or equity, commenced or prosecuted against

one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign

State.” U.S. CONST. amend. XI.

9

HUD, which filed a response to Keegan’s motion, argues that Louisiana has

consented to suits alleging violations of federal law by accepting federal funds under HCDA.

Because the Court concludes that the Ex parte Young exception to sovereign immunity applies,

this opinion need not address this alternative argument.

7

Case 1:08-cv-01938-HHK Document 77 Filed 09/07/10 Page 8 of 21
WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 4232 (3d ed. 2007)). This doctrine relies on “the fiction that the suit [goes] against the officer and not the State, thereby avoiding sovereign immunity’s bar.” Id. (citing Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 114 n.25 (1984)).10
i. Keegan is not an improper defendant. 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 (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.11
10 In addition to the arguments described above and addressed below, Keegan contends that because Louisiana, rather than herself or the LRA, is the “real party in interest,” she may invoke sovereign immunity as a bar to this suit. Keegan Mot. to Dismiss at 4. It should be clear from the Court’s brief explanation of Ex parte Young that this contention does not have merit. Furthermore, the Supreme Court has so noted. See Coeur D’Alene, 521 U.S. at 269 (observing that “[w]hen suit is commenced against state officials, even if they are named and served as individuals, the State itself will have a continuing interest in the litigation whenever state policies or procedures are at stake” but continuing to follow Ex parte Young).
11 Furthermore, Keegan’s underlying premise regarding her responsibilities appears to be incorrect. As HUD notes in the response it filed to Keegan’s motion, the Louisiana statute
8

Case 1:08-cv-01938-HHK Document 77 Filed 09/07/10 Page 9 of 21
ii. The exception to Ex parte Young established in Coeur D’Alene does not apply.
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. 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. The opinion focused on the total inability to “exercis[e] . . . governmental powers” the relief the Tribe sought would effect and discussed at length the significance of a state’s control of submerged lands and navigable waters. Id. at 282, 283-88. No such significant state interest is implicated here. The relief plaintiffs seek would not prevent Louisiana from acting as a sovereign over any land, nor would it even take full control of the Road Home Program. Because “[a]n allegation of an ongoing violation of federal law where the requested relief is prospective is ordinarily sufficient to invoke the Young fiction,” id. at 281, and the Court finds nothing extraordinary about the case before it, Keegan’s argument fails.
iii. Plaintiffs’ claims may go forward only insofar as they seek prospective relief.
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
governing the LRA provides that the agency’s Executive Director’s “powers, duties, and functions” include “[t]o discharge all operational, administrative, and executive functions of the authority.” La. Rev. Stat. Ann. § 49:220.5(D)(2).
9

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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) (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 (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.
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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.
2. Count I of plaintiffs’ complaint may go forward, but only as to section 3604(a).
i. Keegan’s argument that plaintiffs fail to state a claim under 42 U.S.C. § 3604(a) does not have merit.
Keegan next argues that plaintiffs’ FHA claim as to her should be dismissed for failure to state a claim.12 She asserts that because Option 1 is “solely a compensation program,” section
3604(a) of the FHA does not apply. Keegan Mot. to Dismiss at 20. Citing a variety of cases
dismissing FHA claims, Keegan reasons that section 3604(a) of the FHA, which provides that “it
shall be unlawful . . . to . . . make unavailable or deny[] a dwelling to any person because of
race,” 42 U.S.C. § 3604(a), applies only to situations in which a prospective homeowner or renter
is unable to acquire housing.
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
12 Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a court may dismiss a complaint, or any portion of it, for failure to state a claim upon which relief may be granted. Fed. R. Civ. P. 12(b)(6). Federal Rule of Civil Procedure 8 requires that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). The Supreme Court has explained that “the pleading standard Rule 8 announces does not require ‘detailed factual allegations,’ but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation. A pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’” Ashcroft v. Iqbal, — U.S. —, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)) (internal citation omitted). A court considering a motion to dismiss pursuant to Rule 12(b)(6) must assume that all factual allegations in the complaint are true, even if they are doubtful. Twombly, 550 U.S. at 555.
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Case 1:08-cv-01938-HHK Document 77 Filed 09/07/10 Page 12 of 21
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:
It shall be unlawful . . . [t]o refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin. 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 (1972)). And the D.C. Circuit has made clear that “make unavailable” means not just preventing access to new
12

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housing by prospective buyers and renters but also the loss of housing to those who already occupy it. 2922 Sherman Ave. Tenants’ Ass’n v. Dist. of Columbia, 444 F.3d 673, 685 (D.C. Cir. 2006) (“Telling the tenants either that their ‘occupancy . . . is . . . prohibited’ or that they must ‘seek alternative housing’ certainly qualifies as making the buildings ‘unavailable’ under the FHA.”); see also Hargraves v. Capital City Mortg. Corp., 140 F. Supp. 2d 7, 20 (D.D.C. 2000) (holding that section 3604(a) applies to “predatory practices” in lending because those practices “can make housing unavailable by putting borrowers at risk of losing the property which secures their loans”).
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
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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.13 Consequently, the Court shall not dismiss plaintiffs’ FHA claim pursuant to section 3604(a) against Keegan.
ii. Plaintiffs’ claims under sections 3605(a) and 3608(d), (e)(5) of the FHA may not go forward as to Keegan.
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.
13 The complaint does not directly allege that homeowners who have applied for but not yet received Option 1 grants are unable to live in their homes. But because this case is before the Court on a motion to dismiss, the Court must “accept[] as true all of the factual allegations contained in the complaint and draw[] all inferences in favor of” plaintiffs. City of Harper Woods Emps. Ret. Sys. v. Olver, 589 F.3d 1292, 1298 (D.C. Cir. 2009) (citing Ctr. for Law & Educ. v. Dep’t of Educ., 396 F.3d 1152, 1156 (D.C. Cir. 2005)). The Court finds that it is a reasonable inference from the devastating effects of Hurricanes Katrina and Rita, Compl. ¶ 31 (“As a result of Hurricanes Katrina and Rita, more than half a million New Orleans residents were displaced and more than 53,000 homes in New Orleans were damaged or destroyed.”), and the eligibility requirements for the Road Home Program, Compl. ¶ 43 (“Eligible homeowners are those who . . . had FEMA catagorize their home as destroyed or having suffered major damage.”), that many prospective Option 1 beneficiaries cannot live in their homes.
14

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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
15

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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.
3. Count II of plaintiffs’ complaint must be dismissed as against Keegan because plaintiffs cannot sue her under 42 U.S.C. § 5304(b)(2).
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:
Any grant under section 5306 of this title shall be made only if the grantee certifies to the satisfaction of the Secretary [of HUD] that . . . the grant will be conducted and administered in conformity with the Civil Rights Act of 1964 and the Fair Housing Act, and the grantee will affirmatively further fair housing. 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 that the grants to Louisiana for purposes of administering the Road Home Program are subject to this provision. 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.14 First, she asserts that the remedies for any violation of section 5304(b)(2) are those described in the 42 U.S.C. § 5311, which provides
14 Keegan also argues that there is no basis for this cause of action because she complied with the requirements of section 5304(b)(2) by making the necessary certifications described therein. But plaintiffs do not argue that she failed to make these certifications; they argue that she failed to adhere to the promise to affirmatively further fair housing.
16

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that the Secretary of HUD may, if a grant recipient has failed to comply with the HCDA, terminate grant payments or refer the matter to the U.S. Attorney General to initiate a civil action. Second, she contends that this Court should follow others that have held that Congress did not intend to allow private suits under the HCDA.
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 (2002) (quoting Wilder v. Va. Hosp. Ass’n, 496 U.S. 498, 508 n.9 (1990)), both “require a determination as to whether or not Congress intended to confer individual rights upon a class of beneficiaries,” id. at 285. 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
17

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the wage earners,” who are “clearly specified” as “laborers and mechanics”).15 But the provision
under which plaintiffs seek to sue is distinct from those that are “phrased with an unmistakable
focus on the benefitted class.” Gonzaga Univ., 536 U.S. at 284 (quoting Cannon v. Univ. of
Chicago, 441 U.S. 677, 692 (1979)). It does not identify any class of people who will benefit
from the grantee’s certification that it will further fair housing. And the broad statement in the
HCDA’s declaration of purpose that Congress sought, among other goals, to promote “[d]ecent
housing, suitable living environment, and economic opportunities for persons of low and
moderate income,” 42 U.S.C. § 5301(c), is not specific enough to confer rights. This conclusion
is especially correct here, where homeowners with viable claims are not low- and moderate-
income individuals; those beneficiaries of the Road Home Program are eligible for ACGs
supplementing their Option 1 grants and so are not subject to the alleged discriminatory effect of
15 Precedent is split as to 42 U.S.C. § 5309, which provides: “No person in the United States shall on the ground of race, color, national origin, religion, or sex be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity funded in whole or in part with funds made available under [the HCDA].” 42 U.S.C. § 5309(a). Compare Montgomery Improvement Ass’n, 645 F.2d at 296 (relying on “the fact that the district court in this case found plaintiffs to be members of the class Congress intended to be especially benefitted” in “concluding that the anti-discrimination provisions of the [HCDA] permit the bringing of a private cause of action”), with Latinos Unidos de Chelsea v. Sec’y of Hous., 799 F.2d 774, 794 (1st Cir. 1986) (concluding, as to a claim under 42 U.S.C. § 5309 by individuals who were allegedly discriminated against, that Title I of HCDA was not “enacted for their ‘especial benefit’ in the sense required for finding a private right of action”); see also Freeman v. Fahey, 374 F.3d 663, 665 (8th Cir. 2004) (holding that 42 U.S.C. § 5309 does not confer a private right of action because Congress did not intend to create a private remedy where other methods of enforcement exist, but not addressing whether a section 1983 action could have survived based on the intent to benefit a particular class of individuals). Because plaintiffs have not stated a claim under 42 U.S.C. § 5309, the Court need not address the question of whether they could have done so.
18

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the Option 1 formula.16 Consequently, the Court will grant Keegan’s request to dismiss Count II
as to her.
B. Motion to Transfer
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).17 That statute
provides that “[f]or the convenience of parties and witnesses, in the interest of justice, a district
court may transfer any civil action to any other district or division where it might have been brought.” 28 U.S.C. § 1404(a).18 To assess whether transfer pursuant to section 1404(a) is
appropriate, the court will “balance a number of case-specific factors which include the private
interests of the parties as well as public interests such as efficiency and fairness.” Wilderness
Soc’y v. Babbitt, 104 F. Supp. 2d 10, 12 (D.D.C. 2000) (citing Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 30 (1988)).19
16 Plaintiffs made explicit in a filing submitted in the course of briefing their first motion for a TRO that they now seek relief only as to “middle class African American homeowners who received grants based on pre-storm value [of their homes, rather than the cost of repair] and did not receive an Additional Compensation Grant of any amount.” Pls.’ Reply to Keegan Opp’n to Pls.’ First Mot. for TRO at 3. As explained above, lower-income homeowners could receive ACGs such that their total Option 1 awards were either the amount of the cost of repair or $150,000, whichever was less, so they are no longer subject to the allegedly discriminatory practice of taking home value into account in calculating grants.
17 Keegan asks in the alternative that the Court transfer the case to the Eastern District of Louisiana, in which New Orleans is located.
18 Plaintiffs concede that this case could have been brought in the Middle District of Louisiana.
19 The private interest factors include: (1) plaintiff’s choice of forum, (2) defendant’s choice of forum, (3) whether the claim arose elsewhere, (4) convenience of the parties, (5) convenience of the witnesses, and (6) ease of access to sources of proof. Wilderness Soc’y, 104 F. Supp. 2d at 12 (quoting Trout Unlimited v. U.S. Dep’t of Agric., 944 F. Supp. 13, 16
19

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Keegan argues that both the private and public interests weigh in favor of transferring this case. She asserts that plaintiffs’ choice of forum should be afforded little deference because none of the individual plaintiffs reside in the District of Columbia. She further asserts that the claims arose in Baton Rouge, because that is where the LRA sits and where it developed and now administers the Road Home Program. Moreover, Keegan contends that the Middle District of Louisiana has a strong interest in the case, which revolves around the damage from storms that occurred in Louisiana and a program designed to assist people who live there. On the other hand, according to Keegan, the District of Columbia has no direct ties to or interest in this case.
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
(D.D.C. 1996)). The public interest factors include: (1) the transferee district’s familiarity with the governing laws, (2) the relative congestion of both the transferor and transferee courts’ calendars, and (3) the local interest in deciding local controversies at home. Id. (quoting Trout Unlimited, 944 F. Supp. at 16).
20

Case 1:08-cv-01938-HHK Document 77 Filed 09/07/10 Page 21 of 21 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.
III. CONCLUSION For the foregoing reasons, it is this 7th day of September 2010 hereby ORDERED that Keegan’s motion to dismiss [#28] is GRANTED in part and DENIED in part; and it is further ORDERED that Keegan’s motion to transfer [#28] is DENIED.
Henry H. Kennedy, Jr. United States District Judge
21

 
 Case 1:08-cv-01938-HHK Document 22 Filed 03/06/09 Page 1 of 57

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING )

ACTION CENTER, et al.,

)

)

Plaintiffs,

)

)

v.

)

)

U.S. DEPARTMENT OF HOUSING AND

)

URBAN DEVELOPMENT, et al.,

)

)

Defendants.

)

No. 1:08-cv-1938-HHK

DEFENDANT U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT’S MOTION TO DISMISS

Pursuant to Fed. R. Civ. P. 12(b)(1), (6) and LCvR 7.1, defendant, the U.S. Department

of Housing and Urban Development, hereby moves to dismiss plaintiffs’ complaint for lack of

jurisdiction and for failure to state a claim on which relief can be granted. A statement of points

and authorities, supporting declaration, and proposed order are attached.

Case 1:08-cv-01938-HHK Document 22 Filed 03/06/09 Page 2 of 57

Dated: March 6, 2009

Respectfully submitted,
MICHAEL F. HERTZ Acting Assistant Attorney General, Civil Division
JEFFREY A. TAYLOR U.S. Attorney for the District of Columbia
/s/ James D. Todd, Jr. MICHAEL SITCOV Assistant Branch Director JAMES D. TODD, JR. Senior Counsel U.S. DEPARTMENT OF JUSTICE Civil Division, Federal Programs Branch 20 Massachusetts Avenue N.W. Washington, DC 20001 (202) 514-3378 (202) 616-8470 (fax) james.todd@usdoj.gov Attorneys for Defendant U.S. Department of Housing and Urban Development

- 2 -

Case 1:08-cv-01938-HHK Document 22 Filed 03/06/09 Page 3 of 57

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING )

ACTION CENTER, et al.,

)

)

Plaintiffs,

)

)

v.

)

)

U.S. DEPARTMENT OF HOUSING AND

)

URBAN DEVELOPMENT, et al.,

)

)

Defendants.

)

No. 1:08-cv-1938-HHK

DEFENDANT U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT’S MEMORANDUM IN SUPPORT OF ITS MOTION TO DISMISS

TABLE OF CONTENTS
TABLE OF AUTHORITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
I. PRELIMINARY STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
II. BACKGROUND. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 A. The Housing and Community Development Act of 1974 and the Community Development Block Grant Program.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 B. Pub. L. Nos. 109-148, 109-234, and 110-116. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 C. HUD Waivers of Community Development Block Grant Program Requirements and Louisiana’s Action Plan for Disaster Recovery Funds. . . . . . . . . . . . . . . . . . . 8 D. Louisiana’s Road Home Program and HUD’s Role in Reviewing, Approving and Monitoring the Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 E. Plaintiffs’ Complaint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
III. STANDARD OF REVIEW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
IV. ARGUMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 A. Plaintiffs Lack Standing to Maintain Their Claims Against HUD Because They Cannot Satisfy the Redress Prong of Article III’s Standing Requirement. . 20 B. Plaintiffs’ Challenge to HUD’s Approval and Oversight of the Road Home Program is Mostly Moot. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 C. Plaintiffs Fail to Allege a Waiver of Sovereign Immunity By the United States.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Case 1:08-cv-01938-HHK Document 22 Filed 03/06/09 Page 4 of 57 D. Plaintiffs Could Not Maintain Suit Under the Administrative Procedure Act,
Which Provides the Only Possible Waiver of Sovereign Immunity for Their Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 1. The APA would not waive sovereign immunity for plaintiffs’ claims
because there is another adequate remedy at law.. . . . . . . . . . . . . . . . . . . 32 2. Plaintiffs’ claims for relief under 42 U.S.C. §§ 3608(d) and (e)(5) and
42 U.S.C. § 5304(b)(2) are not reviewable under the APA. . . . . . . . . . . . 36 E. The Complaint Should Be Dismissed Because Plaintiffs Fail to State a Claim on
Which Relief May Be Granted.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 1. Plaintiffs’ Disparate Impact Claims Against HUD Should Be Dismissed
Because No Prohibited Discrimination Is Alleged. . . . . . . . . . . . . . . . . . 40 2. Plaintiffs’ Remaining Claims Against HUD Should Be Dismissed. . . . . 43 V. CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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Case 1:08-cv-01938-HHK Document 22 Filed 03/06/09 Page 5 of 57
TABLE OF AUTHORITIES FEDERAL CASES
2922 Sherman Avenue Tenants’ Association v. District of Columbia, 444 F.3d 673 (D.C. Cir. 2006). ........................................................................................... 41
*Alexander v. Sandoval, 532 U.S. 275 (2001)................................................................................ 33 *Allen v. Wright, 468 U.S. 737 (1984)...................................................................................... 20, 24 Alliance to Save Mattaponi v. United States Army Corps of Engineers,
515 F. Supp. 2d 1 (D.D.C. 2007). ....................................................................................... 39 *Alschuler v. United States Department of Housing and Urban Development,
686 F.2d 472 (7th Cir. 1982). ............................................................................................. 30 *America Disabled for Attendant Programs Today v. United States Department of
Housing and Urban Development, 170 F.3d 381 (3d Cir. 1999)........................................ 34 America Library Association v. Federal Communication Commission,
401 F.3d 489 (D.C. Cir. 2005). ........................................................................................... 17 America’s Community Bankers v. Federal Deposit Insurance Corp.,
200 F.3d 822 (D.C. Cir. 2000). ........................................................................................... 27 *Amalgamated Sugar Co. v. Bergland, 664 F.2d 818 (10th Cir. 1981). ........................................ 30 Ambach v. Bell, 686 F.2d 974 (D.C. Cir. 1982).............................................................................. 28 *Anderson v. City of Alpharetta, 737 F.2d 1530 (11th Cir. 1984). ................................................ 30 Animal Legal Defense Fund v. Glickman, 154 F.3d 426 (D.C. Cir. 1998)..................................... 27 *Ballistrieri v. United States, 303 F.2d 617 (7th Cir. 1962)........................................................... 30 *Beale v. Blount, 461 F.2d 1133 (5th Cir. 1972). ........................................................................... 30 Better Government Association v. Department of State, 780 F.2d 86 (D.C. Cir. 1986)................. 18 Boyd v. Browner, 897 F. Supp. 590 (D.D.C.1995). ........................................................................ 30 Brandon v. Pierce, 725 F.2d 555 (10th Cir. 1984). .......................................................................... 4 *Brian v. Gugin, 853 F. Supp. 358 (D. Idaho 1994), aff’d, 46 F.3d 1138 (9th Cir.1995). ............. 30 Bristol-Myers Squibb Co. v. Shalala, 91 F.3d 1493 (D.C. Cir. 1996). ........................................... 27
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Case 1:08-cv-01938-HHK Document 22 Filed 03/06/09 Page 6 of 57
*Burton v. Central Interstate Low-Level Radioactive Waste Compact Commission, 23 F.3d 208 (8th Cir. 1994). ............................................................................................... 26
*Business Association of University City v. Landrieu, 660 F.2d 867 (3d Cir. 1981). .................... 30 *Byrd v. Smith, 693 F. Supp. 1199 (D.D.C.1986). ......................................................................... 30 City of Erie v. Pap’s A.M., 529 U.S. 277 (2000). ........................................................................... 18 *City of Houston, Texas v. United States Department of Housing and Urban Development,
24 F.3d 1421 (D.C. Cir. 1994). ............................................................................... 27, 28, 39 *Coker v. Sullivan, 902 F.2d 84 (D.C. Cir. 1990). ......................................................................... 35 Competitive Enterprise Institute v. National Highway Transportation Safety Administration,
901 F.2d 107 (D.C. Cir. 1990). ........................................................................................... 20 *County of Los Angeles v. Shalala, 192 F.3d 1005 (D.C. Cir. 1999) ............................................ 19 Center for Law & Education v. Department of Education, 396 F.3d 1152 (D.C. Cir. 2005)......... 39 Darst-Webbe Tenant Association Board v. St. Louis Housing Authority,
417 F.3d 898 (8th Cir. 2005). ............................................................................................. 38 Department of Army v. Blue Fox, Inc., 525 U.S. 255 (1999).................................................... 18, 31 Dixson v. United States, 465 U.S. 482 (1984). ............................................................................. 4, 6 Eastern Transport Co. v. United States, 272 U.S. 675 (1927). ...................................................... 29 Federal Deposit Insurance Corp. v. Meyer, 510 U.S. 471 (1994).................................................. 18 Florida Audubon Society v. Bentsen, 94 F.3d 658 (D.C. Cir. 1996). ............................................. 19 Fornaro v. James, 416 F.3d 63 (D.C. Cir. 2005)............................................................................ 31 *Freedom Republicans, Inc. v. Federal Election Commission, 13 F.3d 412 (D.C. Cir. 1994). 20, 25 Friends of the Earth, Inc. v. Laidlaw Environmental Services, Inc., 528 U.S. 167 (2000). ........... 20 Goonewardena v. New York, 475 F. Supp. 2d 310 (S.D.N.Y. 2007). ............................................ 33 Graham v. Federal Emergency Management Agency, 149 F.3d 997 (9th Cir. 1998). ................... 18 Grand Lodge of the Fraternal Order of Police v. Ashcroft, 185 F. Supp. 2d 9 (D.D.C. 2001)...... 17
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Case 1:08-cv-01938-HHK Document 22 Filed 03/06/09 Page 7 of 57
*Graoch Associate v. Louisville/Jefferson County Metropolitan Human Relations Committee, 508 F.3d 366 (6th Cir. 2007). ............................................................................................. 41
Heckler v. Redbud Hospital District, 473 U.S. 1308 (1985). ......................................................... 19 *Hercules Inc. v. United States, 516 U.S. 417 (1996). ................................................................... 29 *High Plains Community Development Corp. v. Schaefer, 2007 WL 4180707 (D. Neb. 2007).... 33 Huntington Branch, NAACP v. Town of Huntington, 844 F.2d 926 (2d Cir. 1988)........... 35, 38, 41 Independent Petroleum Association of America v. Babbitt, 235 F.3d 588 (D.C. Cir. 2001).......... 39 James Madison Ltd. v. Ludwig, 82 F.3d 1085 (D.C. Cir. 1996)..................................................... 19 James v. United States, 970 F.2d 750 (10th Cir. 1992). ................................................................. 18 *Jersey Heights Neighborhood Association v. Glendening, 174 F.3d 180 (4th Cir. 1999)...... 34, 35 Jones v. Executive Office of the Preservation, 167 F. Supp. 2d 10 (D.D.C. 2001). ....................... 17 Kansas City v. United States Department of Housing and Urban Development,
861 F.2d 739 (D.C. Cir. 1988). ............................................................................................. 6 *Kester v. Campbell, 652 F.2d 13 (9th Cir. 1981).......................................................................... 30 *Linda R.S. v. Richard D., 410 U.S. 614 (1973). ........................................................................... 24 Lipsman v. Secretary of the Army, 257 F. Supp. 2d 3 (D.D.C. 2003)............................................. 17 *Lonsdale v. United States, 919 F.2d 1440 (10th Cir. 1990).......................................................... 30 *Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992)........................................................ 17, 18, 21 M&T Mortgage Corp. v. White, 2006 WL 47467 (E.D.N.Y. 2006). .............................................. 38 *Marinoff v. United States Department of Housing and Urban Development,
892 F. Supp. 493 (S.D.N.Y. 1995), aff’d, 78 F.3d 64 (2nd Cir. 1996). .............................. 30 Martinez v. United States, 333 F.3d 1295 (Fed. Cir. 2003). ........................................................... 34 McGrath v. United States Department of Housing and Urban Development,
722 F. Supp. 902 (D. Mass. 1989). ..................................................................................... 44 McMahon v. United States, 342 U.S. 25 (1951). ............................................................................ 29
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Case 1:08-cv-01938-HHK Document 22 Filed 03/06/09 Page 8 of 57
Mejia v. United States Department of Housing and Urban Development, 688 F.2d 529 (7th Cir. 1982). ................................................................................... 7, 22, 24
Michigan Protection & Advocacy Service, Inc. v. Babin, 18 F.3d 337 (6th Cir. 1994).................. 43 *Mountain Side Mobile Estates Partnership v. United States Department
of Housing and Urban Development, 56 F.3d 1243 (10th Cir. 1995). ............................... 42 NAACP v. United States Department of Housing and Urban Development,
817 F.2d 149 (1st Cir. 1987)............................................................................................... 38 *Nabke v. United States Department of Housing and Urban Development,
520 F. Supp. 5 (W.D. Mich. 1981). .................................................................................... 31 *Norton v. Southern Utah Wilderness Alliance, 542 U.S. 55 (2004). ..................................... passim *Pleune v. Pierce, 697 F. Supp. 113 (E.D.N.Y. 1988). ............................................................ 31, 45 Population Institute v. McPherson, 797 F.2d 1062 (D.C. Cir. 1986)............................................. 28 Reynolds v. Army & Air Force Exchange Service, 846 F.2d 746 (Fed. Cir. 1988)......................... 18 *Rubin v. City of Santa Monica, 308 F.3d 1008 (9th Cir. 2002). ................................................... 26 Ruckelshaus v. Sierra Club, 463 U.S. 680 (1983). ......................................................................... 29 *Sabhari v. Reno, 197 F.3d 938 (8th Cir. 1999)............................................................................. 30 Sable Communications of California, Inc. v. Federal Communications Commission,
827 F.2d 640 (9th Cir. 1987). ............................................................................................. 35 Salazar v. Heckler, 787 F.2d 527 (10th Cir. 1986)......................................................................... 30 Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996). ............................................................ 33 *Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26 (1976)...................... 21, 24 *Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667 (1950).................................................... 30 Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998)......................................... 17, 21 In re Swine Flu Immunization Products Liability Litigation, 880 F.2d 1439 (D.C. Cir. 1989). .... 16 *TTEA v. Ysleta del Surety Pueblo, 181 F.3d 676 (5th Cir. 1999). ................................................ 30 *Town of Sanford v. United States, 140 F.3d 20 (1st Cir. 1998). ................................................... 34
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Transohio Savings Bank v. Director, Office of Thrift Supervision, 967 F.2d 598 (D.C. Cir. 1992). ........................................................................................... 32
*Turner v. Secretary of United States Department of Housing and Urban Development, 449 F.3d 536 (3d Cir. 2006)................................................................................................ 31
*University Medical Center of Southern Nevada v. Shalala, 173 F.3d 438 (D.C. Cir. 1999).. 25, 26 United States v. City of Black Jack, 508 F.2d 1179 (8th Cir. 1975). .............................................. 41 United States v. King, 395 U.S. 1 (1969)........................................................................................ 29 United States v. Sherwood, 312 U.S. 584 (1941)............................................................................ 18 *US Ecology, Inc. v. United States Department of the Interior, 231 F.3d 20 (D.C. Cir. 2000). .... 25 Veldheon v. United States Coast Guard, 35 F.3d 222 (5th Cir. 1994). .......................................... 29 *Verizon Maryland, Inc. v. Public Service Commission of Maryland,
535 U.S. 635 (2002)............................................................................................................ 32 West Virginia Health Center v. Heckler, 734 F.2d 1570 (D.C. Cir. 1984)............................... 27, 28 *Warth v. Seldin, 422 U.S. 490 (1975). .................................................................................... 17, 21 Washington Legal Foundation v. Alexander, 984 F.2d 483 (D.C. Cir. 1993). ............................... 33 Women’s Equity Action League v. Cavazos, 906 F.2d 742 (D.C. Cir. 1990). ................................ 34 *Zhu v. Gonzales, 2006 WL 1274767 (D.D.C. 2006). ................................................................... 30 *Zhu v. United States, 2005 WL 1378914 (D.D.C. 2005).............................................................. 30
FEDERAL STATUTES Pub. L. No. 109-148, 119 Stat. 2779 (Dec. 30, 2005). ............................................................ passim Pub. L. No. 109-234, 120 Stat. 418 (June 15, 2006). .............................................................. passim Pub. L. No. 110-116, 121 Stat. 1343 (Nov. 13, 2007). ............................................................ passim 5 U.S.C. § 701....................................................................................................................... 2, 18, 31 5 U.S.C. § 702 .......................................................................................................................... 18, 39 5 U.S.C. § 704 .............................................................................................................. 31, 32, 33, 35
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5 U.S.C. § 706(1), (2)(A).............................................................................................. 19, 36, 37, 39 25 U.S.C. § 2710............................................................................................................................. 33 28 U.S.C. § 1331....................................................................................................................... 15, 30 28 U.S.C. § 1343(a)(3)-(4)........................................................................................................ 15, 29 28 U.S.C. § 2201....................................................................................................................... 15, 29 28 U.S.C. § 2202....................................................................................................................... 15, 30 33 U.S.C. § 1344(c). ....................................................................................................................... 40 42 U.S.C. § 2000d................................................................................................................. 2, 32, 33 42 U.S.C. § 3601............................................................................................................................... 1 42 U.S.C. § 3613(a). ................................................................................................................. 15, 29 42 U.S.C. § 3604(a). ................................................................................................................. 16, 40 42 U.S.C. § 3608(d), (e)(5). ..................................................................................................... passim 42 U.S.C. § 3605(a). ................................................................................................................ passim 42 U.S.C. § 5301....................................................................................................................... 1, 3, 4 42 U.S.C. § 5302(a)(20)(A). ............................................................................................................. 4 42 U.S.C. § 5304(a). ................................................................................................................ passim 42 U.S.C. § 5311(b)(2). ................................................................................................................ 6, 7 43 U.S.C. § 1782(c). ....................................................................................................................... 37
FEDERAL REGULATIONS
71 Fed. Reg. 34451 (June 14, 2006). ........................................................................................ 13, 14 71 Fed. Reg. 7666 (Feb. 13, 2006)................................................................................................ 8, 9 72 Fed. Reg. 10014 (Mar. 6, 2007)................................................................................................. 14 24 C.F.R. § 91.115. ........................................................................................................................... 6
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Case 1:08-cv-01938-HHK Document 22 Filed 03/06/09 Page 11 of 57 24 C.F.R. § 91.500. ........................................................................................................................... 6 24 C.F.R. § 570.480(c)...................................................................................................................... 4 24 C.F.R. § 570.483. ......................................................................................................................... 5 24 C.F.R. § 570.485. ......................................................................................................................... 5 24 C.F.R. § 570.496(b). ................................................................................................................ 6, 7
LEGISLATIVE HISTORY Conf. Rep. No. 1279, 93d Cong., 2d Sess., reprinted in 1974 U.S.C.C.A.N. 4449. ........................ 4 S. Rep. No. 93-693, 93d Cong., 2d Sess. 56, reprinted in 1974 U.S.C.C.A.N. 4273....................... 4
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I. PRELIMINARY STATEMENT Plaintiffs’ claims against defendant, the U.S. Department of Housing and Urban
Development (“HUD”), should be dismissed for lack of jurisdiction and for failure to state a claim on which relief can be granted. Plaintiffs, five home-owners and two non-profit fair housing organizations, challenge HUD’s informal consultation, approval, and continuing oversight of the State of Louisiana’s Road Home program, a program designed and administered by the Louisiana Recovery Authority (“LRA”) and funded by three special appropriations from Congress to provide federal disaster recovery assistance. Plaintiffs claim that the state’s compensation and incentives grants to homeowners whose homes were damaged or destroyed by Hurricane Katrina impose a disparate impact on African Americans in violation of the Fair Housing Act (“FHA”), 42 U.S.C. § 3601 et seq., and the Housing and Community Development Act of 1974 (“HCDA”), 42 U.S.C. § 5301 et seq. Plaintiffs claim that this discriminatory effect arises from the fact that Louisiana has chosen to limit Road Home compensation and incentive grant awards of up to $150,000 to the lesser of the cost of storm damage or the pre-storm value of the home.
This Court lacks jurisdiction because plaintiffs lack standing under Article III of the U.S. Constitution to maintain this action against HUD. Plaintiffs have failed to allege, and cannot show, that there is a substantial likelihood that the relief they seek from this Court against HUD will redress their injuries even if awarded. Neither the special appropriations that funded the Road Home program, nor any other authority, placed any responsibility on HUD to design or implement the challenged program. Nor do the special appropriations or any other authority require Louisiana to provide any disaster recovery assistance to homeowners, let alone dictate how the compensation and incentives grants should be calculated. Thus, plaintiffs cannot show that an order of this Court setting aside HUD’s approval of Louisiana’s Road Home program will

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provide plaintiffs with Road Home grants awards that are based solely on the cost of storm damage to a home, which is the relief that plaintiffs seek. Accordingly, plaintiffs do not have standing to maintain their claims against HUD.
Even if plaintiffs had standing to maintain this action, this Court would lack jurisdiction with respect to most of the funds at issue. HUD obligated most of the disaster recovery funds to Louisiana, which, in turn, has drawn down those funds as it has implemented the program. Thus, plaintiffs’ challenge to the LRA’s use of funds HUD has already obligated is moot.
In addition, this Court lacks jurisdiction over plaintiffs’ claims against HUD because plaintiffs fail to even allege a waiver of sovereign immunity by the United States that encompasses their claims. Plaintiffs’ invocation of this Court’s jurisdiction under general federal jurisdiction and civil rights jurisdiction statutes do not provide a waiver of sovereign immunity. Nor do the FHA or the HCDA, which plaintiffs allege HUD has violated, provide any waiver of immunity by the United States. Absent such a waiver, this Court lacks jurisdiction over plaintiffs’ claims against HUD.
Nor would the Administrative Procedure Act (“APA”), 5 U.S.C. § 701 et seq., provide a waiver by the United States in this case even if plaintiffs asserted their claims under that statute. First, the APA would not provide a waiver because plaintiffs have an adequate remedy at law inasmuch as they can maintain these exact claims for injunctive relief directly against Louisiana state officials under the FHA and the HCDA and directly against the State of Louisiana under Title VI of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000d. Second, the APA would not provide a waiver for plaintiffs’ claims that HUD failed to affirmatively further fair housing in violation of the FHA and the HCDA. Neither statute requires HUD to take a discrete action that it failed to take in continuing to approve and oversee the Road Home program. Accordingly, the APA would not provide a waiver of sovereign immunity in this instance.
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Finally, even if this Court had jurisdiction over plaintiffs’ claims against HUD, plaintiffs have failed to state a cause of action under the FHA and the HCDA. Plaintiffs’ claim that the Road Home grant awards impose a disparate impact on African Americans fails to allege that the program imposes a disparate impact on African Americans homeowners as compared to similarly-situated white homeowners. Additionally, plaintiffs fail to make any allegations to support a claim that HUD violated its duty to affirmatively further fair housing. Plaintiffs’ allegations that the LRA proposed and developed the Road Home program in consultation with HUD, that HUD approved the Road Home program, and that the LRA administers the Road Home program subject to ongoing oversight and continuing approval of HUD, do not plead a violation of HUD’s fair housing obligations. Accordingly, plaintiffs fail to state a claim under which relief may be granted. II. BACKGROUND
A. The Housing and Community Development Act of 1974 and the Community Development Block Grant Program
The Housing and Community Development Act of 1974 (“HCDA” or “Act”), as amended, 42 U.S.C. § 5301 et seq., seeks to develop viable urban communities by providing decent housing, a suitable living environment, and expanding economic opportunities, principally for persons of low and moderate income. Id. § 5301(c). The statute authorizes HUD to make grants, known as Community Development Block Grants (“CDBG”) to states, tribes, and local governments to carry out activities in accordance with provisions of the Act, id. § 5303, and sets out 25 broad categories of activities for which grantees may use funds. Id. §§ 5305, 5305(a). The Act requires that not less than 70 percent of grant funds be used for the benefit of low- and
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moderate-income persons. Id. § 5301(c).1 Congress enacted the legislation as a federal block grant statute, under which the day-to-day administration of the federal program, including the actual expenditure of federal funds, is delegated to state and local authorities. Dixson v. U.S., 465 U.S. 482, 486 (1984).
The HCDA distributes funds appropriated by Congress through recipients outside the federal government. Id. at 486-87. To that end, the statute provides for a straight-forward application and approval process for federal assistance, see id. §§ 5301(b)(3), 5301(d)(1), 5304(b), and shifts the responsibility from the federal government to state and local authorities for the implementation of federally assisted projects. Brandon v. Pierce, 725 F.2d 555, 559 (10th Cir. 1984) (citing Conf. Rep. No. 1279, 93d Cong., 2d Sess., reprinted in 1974 U.S.C.C.A.N. 4449 et seq.,), overruled on other grounds by, Village of Los Ranchos De Albuquerque v. Marsh, 956 F.2d 970 (10th Cir. 1992). Accordingly, it is the grant recipients, rather than HUD, that design programs, within the federal constraints, to address local needs. Dixson, 465 U.S. at 487. Further, HUD’s role is confined to ensuring that the state’s interpretation of the statutory and regulatory requirements “are not plainly inconsistent with the Act,” 24 C.F.R. § 570.480(c) (giving “maximum feasible deference” to a state’s interpretation of these requirements), in order to avoid “unnecessary ‘second-guessing by Washington.’” S. Rep. No. 93-693, 93d Cong., 2d Sess. 56, reprinted in 1974 U.S.C.C.A.N. at 4273, 4325.
To obtain federal funds, state or local authorities must develop a five-year consolidated plan that assesses housing and homeless needs, analyzes the jurisdiction’s housing markets, sets forth strategic plans for meeting priority needs, and sets out action plans. Action plans, in turn, must include required certifications that the applicants will comply with the requirements of the
1 The statute defines low- and moderate- income persons as individuals whose incomes do not exceed 80 percent of the median income of the area involved. 42 U.S.C. § 5302(a)(20)(A).
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program. 42 U.S.C. § 5304(a); id. § 12705; 24 C.F.R. § 570.485, id. Part 91, Subparts C & D. HUD’s regulations implementing the HCDA require grantees to certify that their
projected use of funds “will give maximum feasible priority to activities . . .[(i)] of benefit to low- and moderate-income families, . . .[(ii) that seek] elimination of slums and blight, [or (iii) that seek] to meet other community development needs having a particular urgency because existing conditions pose a serious threat to health and welfare.” 24 C.F.R. § 570.483. The regulations provide that an activity generally will be considered to meet the national objective of benefit to low and moderate income persons if: (i) the activity benefits an area that is at least 51 percent low and moderate income; (ii) the activity benefits a limited low- and moderate-income clientele, including services or facilities for the homeless, abused children, the elderly, or migrant farm workers; (iii) the activity provides or improves permanent housing to be occupied by a lowor moderate-income person; or (iv) the activity is designed to create permanent jobs where at least 51 percent of the jobs will be held by or made available to low- and moderate-income persons. Id.
A CDBG grantee is also responsible for meeting all program requirements. 42 U.S.C. § 5304(b)(6); 24 C.F.R. § 91.325(b)(7); id. § 570.489(a). See also Declaration of Jessie Handforth Kome Submitted in Supp. of Def. Mot. to Dismiss (“Kome Decl.”) ¶ 6. Each activity must be an eligible one as defined by the statute, meet a national objective, and have been through citizen participation as part of the action plan development and submission process. 42 U.S.C. §§ 5304(b)(3), 5305(a), (c). Grantees must be able to account for all grant funds, comply with all reporting requirements, perform required environmental reviews, and meet all applicable relocation, fair housing, equal opportunity, and labor standards. 42 U.S.C. § 5304(b)(2), (d), (e), (g); 24 C.F.R. § 570.487-491.
After developing proposed plans, the applicants must publish the plan for citizen
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comment. 24 C.F.R. § 91.115; id. § 91.320. The applicants then submit the plan, summaries of citizen comments, and signed certifications to HUD. Id.; see also id. § 91.325.
A grantee may request and receive technical assistance from HUD program staff at any time. Kome Decl. ¶ 8. HUD’s technical assistance typically involves consultation with the grantee to determine the grantee’s objectives and its proposed program designs. Id. HUD then provides advice, training, or program models that will ensure the grantee will be able to comply with CDBG program requirements while carrying out the grantee’s purposes and implementing its programs. Id.
HUD’s review of the applicant’s plan is limited. 24 C.F.R. § 91.500. HUD has 45 days to review the plan, and the plan is deemed approved unless HUD notifies the jurisdiction within the 45-day period that the plan is disapproved. Id. § 91.500(a). HUD may disapprove a plan only if it is inconsistent with the purposes of the Act, it is substantially incomplete, the certifications are not acceptable, or if HUD determines that the applicant has not complied with the CDBG requirements. Id. § 91.500(b). The regulations do not permit HUD to disapprove an application based on the grantee’s choice of eligible activities. Id.; Kome Decl. ¶ 9.
In order to ensure that CDBG funds are not misused, the HCDA authorizes HUD to audit the records of HCDA programs, 42 U.S.C. § 5304(e), and to recover improperly expended funds. Id. § 5311(b)(2); Dixson, 465 U.S. at 487. HUD may take corrective actions ranging from issuing a warning letter to instituting collections procedures to recover improperly expended funds. 42 U.S.C. § 5311(b)(2); 24 C.F.R. § 570.495. After reasonable notice and opportunity for a hearing, HUD may terminate, reduce, or limit the availability of payments to a grant recipient for failure to substantially comply with the provisions of the Act. 42 U.S.C. § 5311(a); 24 C.F.R. § 570.496(b), (d). See also Kansas City v. HUD, 861 F.2d 739 (D.C. Cir. 1988). The statute further authorizes the Department of Justice, upon a referral from HUD, to bring a civil action to
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recover misspent or misused CDBG funds. 42 U.S.C. § 5311(b); 24 C.F.R. § 570.496(c). B. Pub. L. Nos. 109-148, 109-234, and 110-116 In response to the 2005 Hurricanes Katrina, Rita, and Wilma, Congress passed three
special appropriations to provide disaster recovery CDBG funds to affected areas in five states, including Louisiana. See Pub. L. No. 109-148, 119 Stat. 2779 (Dec. 30, 2005) (the “first appropriation”); Pub. L. No. 109-234, 120 Stat. 418 (June 15, 2006) (the “second appropriation”); and Pub. L. No. 110-116, 121 Stat. 1343 (Nov. 13, 2007) (the “third appropriation”). The first appropriation provided $11,500,000,000 in CDBG funds to the affected states, which Congress directed to “be administered through an entity . . . designated by . . . each State.” Pub. L. 109-148. This appropriation required HUD to “waive, or specify alternative requirements for, any provision of any statute or regulation[, including the HCDA and its implementing regulations] that [HUD] administers in connection with the obligation by [HUD] or the use by the recipient of these funds or guarantees,” except for requirements related to fair housing, nondiscrimination, labor standards, and the environment, “upon a request by the State that such waiver is required to facilitate the use of such funds or guarantees, and a finding by the Secretary that such waiver would not be inconsistent with the overall purpose of the statute, as modified.” Id. (emphasis added). The first appropriation also authorized HUD to “waive the requirement [of the HCDA] that activities benefit persons of low and moderate income, except that at least 50 percent of the funds made available under this heading must benefit primarily persons of low and moderate income unless [HUD] otherwise makes a finding of compelling need.” Id. (emphasis added). The appropriation required HUD to “publish in the Federal Register any waiver of any statute or regulation.” Id.2 Finally, the appropriation required, prior to the obligation of these funds to each state, that the state submit a plan to HUD
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“detailing the proposed use of all funds, including criteria for eligibility and how the use of these funds will address long-term recovery and restoration of infrastructure.” Id.
The second appropriation provided an additional $5,200,000,000 in CDBG funds to the affected states and authorized (although it did not require) HUD to make these same statutory and regulatory waivers authorized by the first appropriation. Pub. L. No. 109-234. This appropriation earmarked $1,112,650,000 for affordable rental housing programs. Id.; Kome Decl. ¶ 11. The remainder of the second appropriation was substantially identical to the first. Pub. L. No. 109-234; Kome Decl. ¶ 11. The third appropriation provided an additional $3,000,000,000 “solely for the purpose of covering costs associated with otherwise uncompensated but eligible claims that were filed on or before July 31, 2007, under the Road Home program administered by the State [of Louisiana] in accordance with plans approved by [HUD].” Pub. L. No. 110-116.
C. HUD Waivers of CDBG Program Requirements and Louisiana’s Action Plan for CDBG Disaster Recovery Funds
On February 13, 2006, HUD published a Federal Register notice implementing the requirements of the first appropriation. 71 Fed. Reg. 7666 (Feb. 13, 2006). HUD allocated $6,210,000,000 of the first appropriation to Louisiana. Id. As directed by Congress in the first appropriation, HUD waived many standard certifications of the CDBG program, including the requirement that 70 percent of funds be used for activities that benefit low- and moderate-income persons, in order “to give grantees even greater flexibility to carry out recovery activities within the confines of the CDBG program national objectives.” 71 Fed. Reg. at 7667. In their place, HUD substituted alternative certifications. Id. Pursuant to the first appropriation, HUD required the states to certify that activities funded “be for necessary expenses related to disaster relief, long-term recovery, and restoration of infrastructure in the most impacted and distressed areas
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related to the consequences of the hurricanes.” Id. at 7670. As also directed by the first appropriation, HUD required that, overall, at least 50 percent of disaster recovery grant funds be used for activities that principally benefit low- and moderate-income persons. Id. at 7667; see also id. at 7668. As further directed by the first appropriation, HUD still required the state to certify that it will affirmatively further fair housing, “which means that it will conduct an analysis to identify impediments to fair housing choice within the state, take appropriate actions to overcome the effects of any impediments identified through that analysis, and maintain records reflecting the analysis and actions in this regard.” Id. at 7671. HUD did not waive the CDBG program’s financial accountability requirements. Kome Decl. ¶ 13.
Louisiana submitted its first action plan in early 2006 and made all required alternative certifications at that time, including the certification that the state would affirmatively further fair housing. Kome Decl. ¶ 14.3 As is required by the CDBG program, the state already had produced a pre-storm Analysis and Impediments (“AI”) to fair housing. Id. HUD advised Louisiana to review its AI post-storm and make any updates the state deemed necessary. Id.
D. Louisiana’s Road Home Program and HUD’s Role in Reviewing, Approving and Monitoring the Program
On May 12, 2006, Louisiana submitted Amendment 1 to its original action plan, known as the Road Home Program. Kome Decl. ¶ 15. The program consists of: (i) homeowner compensation and incentives programs; (ii) workforce and affordable rental housing programs; (iii) homeless housing programs; and, (iv) developer incentive programs. Id. The Road Home program is administered by the State of Louisiana through the Louisiana Office of Community Development and the Louisiana Recovery Authority, and is funded by HUD through the CDBG program. Id. The State of Louisiana is responsible for the implementation, design, and
3 The state later made these same certifications in order to obtain funds from the second and third appropriations. Kome Decl. ¶ 14.
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administration of the Road Home program in conformance with the applicable CDBG program requirements set by HUD. Id.
1. Technical Assistance Provided by HUD In designing the Road Home homeowner compensation and incentives program, Louisiana requested, and HUD provided, some technical assistance. Kome Decl. ¶ 16. The state evaluated the relative costs of implementing a housing rehabilitation and reconstruction program as compared to implementing a homeowner compensation and incentives program. Id. State staff called HUD staff several times a week throughout 2006 regarding the details of the homeowner program design. Id. HUD’s guidance focused on how the activity could meet CDBG national objectives and how the state could manage the program to account for all program funds while meeting the disaster recovery purpose of the supplemental appropriations. Id. HUD did not make any of the state’s program decisions or set any funding strategies in the Road Home Program. Id. Most of HUD’s technical assistance was provided by telephone. Id. Part of the technical assistance HUD provided to state staff concerned sound financial management principles. Kome Decl. ¶ 17. Financial management principles guide the grantee in the design of a program that provides the smallest amount of resources necessary to achieve a desired result. Id. HUD explained to state staff that, for example, the compensation and incentives program launched by the state of New York following September 11, 2001, provided no more than $14,500 to any household and achieved success in meeting its goals. Id. HUD also explained that the city of Grand Forks, North Dakota, provided $5,000 loan payments as incentives to homeowners who remained in the city for disaster recovery after floods in 1997 caused significant damage to the city and its residences. Id.
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2. Road Home homeowner compensation and incentives grant As it developed the Road Home program, Louisiana ultimately chose to provide compensation and incentives grants to eligible homeowners affected by Hurricanes Rita or Katrina of up to $150,000. Kome Decl. ¶ 18. Louisiana decided to base the amount of the compensation and incentives grant on the lower of the pre-storm, fair-market value of the home, or the cost to repair the home. Id. The state chose to provide homeowners with three compensation and incentive grant options: (i) stay in their home; (ii) purchase another home in Louisiana; or (iii) sell their home and choose not to remain a homeowner in the state. See LRA http://www.road2la.org/homeowner/default.htm.4 The last day to apply to the Road Home program was July 31, 2007, and the last day to complete an initial appointment was December 15, 2007. Id. In developing the Road Home program, the state considered basing the compensation and incentives payment amounts on the tax valuations of homes. Kome Decl. ¶ 19. As part of the technical assistance HUD provided to the state, HUD stated its concern about using tax values as part of the basis for the calculation of the homeowner payment amount because the tax valuation system(s) in Louisiana, and in New Orleans Parish in particular, were unreliable, resulting in vastly different values for similar homes, with no rational basis. Id. The state ultimately chose not to use tax values as a basis for providing compensation and incentives grants. Id. To determine the pre-storm value of a home, Louisiana chose to rely instead on pre-storm
4 If the homeowner chooses to relocate within Louisiana, the compensation grant depends on the extent of damage to the home. Id. If damage to the home is estimated at less than 51% of the pre-storm value of the home, the compensation grant is the lesser of either (a) the pre-storm value minus other assistance provided or (b) the estimated cost of damage minus other assistance. Id. If damage to the home is estimated at 51% or more of the pre-storm value of the home, the compensation grant is the pre-storm value minus other assistance provided. Id. If the homeowner chooses to relocate outside Louisiana, the compensation grant will be 60% of the in-state relocation option, unless the homeowner is over age 65. Id.
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appraisals provided by the homeowner-applicants, the repositories of federal mortgage servicers, and the archives of Louisiana appraisal firms. See http://www.road2la.org/homeowner/default.htm. Louisiana also chose to allow homeowners to provide a post-storm appraisal from a licensed and certified Louisiana appraiser setting out the property’s pre-storm value. Id.
Although the state chose to base the calculation of the payment it would make to each homeowner on one of several measures of pre-storm property value or storm damage, compensation and incentives under the Road Home program are not actually for storm damage. Kome Decl. ¶ 20. Rather, the Road Home program provides compensation and incentives for the homeowner’s agreement to meet certain recovery conditions, such as remaining in a certain geographic area, maintaining flood insurance on a dwelling, and meeting modern building codes within a set period of time. Id.
3. Additional Compensation Grants, Individual Mitigation Measures, and Elevation Allowances
Louisiana also chose to provide Additional Compensation Grants of up to $50,000 for certain homeowners. Kome Decl. ¶ 21. Louisiana provides the Additional Compensation Grants to bridge any gap between the estimated cost of damage and the amount(s) the homeowner receives from other assistance (insurance, FEMA, etc.) and the basic compensation and incentives grant, still subject to the $150,000 limit on the grant. See http://www.road2la.org/homeowner/default.htm. Louisiana decided to offer Additional Compensation and incentives Grant to applicants with household incomes at or less than 80 percent of the median income in the parish where the house was located. Id. In addition to the Additional Compensation Grants, Louisiana chose to provide compensation and incentives grants to homeowners via Individual Mitigation Measures and Elevation Incentives. Id. Individual
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Mitigation Measures provide incentive grants to homeowners to install home “hardening” features that will protect homes from future storm damage, including storm shutters and roof tie downs. Id. Elevation Incentives are grants to elevate site-built homes and mobile homes to meet FEMA’s current Advisory Base Flood Elevation or Base Flood Elevation levels to protect against future floods. Id.
4. HUD review and approval of the Road Home homeowner program As part of the technical assistance HUD provided to Louisiana, HUD reviewed the Road Home program’s ability to help Louisiana meet the overall benefit requirements of the special appropriations. Kome Decl. ¶ 22. As noted above, the special appropriations’ overall benefit requirement is that 50 percent of the state’s disaster recovery CDBG expenditures will support activities that benefit low- and moderate-income persons. Id. To meet that requirement, Louisiana can count homeowner payments to low- and moderate-income households and rental projects that house low- and moderate-income tenants toward the overall requirement, but it cannot count payments to above-income homeowners, or for above-income rental projects. Id. HUD determined that Louisiana’s inclusion of the Additional Compensation Grant, Individual Mitigation Measures, and Elevation Allowances could help the state meet the overall benefit requirement. Id. On June 14, 2006, HUD published a Federal Register notice granting additional waivers to Louisiana and approving Louisiana’s Road Home program. 71 Fed. Reg. 34451 (June 14, 2006). Finding that additional waivers and alternative requirements are not inconsistent with the overall purpose of the HCDA, HUD waived statutory and regulatory requirements to allow Louisiana to provide compensation to homeowners whose homes were damaged, “if the homeowners agree to meet the stipulations of the published program design.” Id. HUD also allowed Louisiana to “offer disaster recovery or mitigation housing incentives to promote
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housing development or resettlement in particular geographic areas.” Id. at 34453.5 In addition, HUD approved Louisiana’s use of disaster recovery CDBG funds for, among other things, (i) government buildings; (ii) special economic development job-retention activities; (iii) down payment assistance for new construction; (iv) support of the tourism industry; (v) relocation assistance; and (vi) the one-for-one replacement requirement of housing units damaged by disaster. Id. at 34452-53.
On March 6, 2007, HUD provided additional waivers that allowed Louisiana to use CDBG disaster recovery funds for, among other things, (i) research, commercialization, and educational enhancement; (ii) operating subsidies for affordable rental housing; and (iii) rental and utility payment assistance. 72 Fed. Reg. 10014 (Mar. 6, 2007). Kome Decl. ¶ 24.
To date, HUD has obligated $12,400,000,000 to Louisiana to administer the Road Home program. Kome Decl. ¶ 25. As of February 22, 2009, Louisiana had provided approximately $7,800,000,000 in compensation and incentive grants to 140,083 homeowner applicants through the Road Home homeowners program, for an average award of $63,517. See http://www.road2la.org/default.htm. In addition to its homeowner compensation and incentives program, Louisiana has devoted approximately $1,540,000,000 CDBG disaster recovery funds to affordable rental housing programs. Kome Decl. ¶ 25. Rental housing assistance programs funded by the grants include the Low-Income Housing Tax Credit (“LIHTC”) Piggyback Program, Gulf Opportunity Zone (“GO Zone”) tax credits, public housing projects and developer incentives. Id. Louisiana also has devoted funds for homeless shelters and homelessness cessation services. Id.
5 HUD also noted that, under the HCDA and implementing regulations, states “have the discretion to pay pre-flood or post-flood values for the acquisition of properties located in a flood way or floodplain.” Id. at 34456. HUD noted that “[i]n using CDBG disaster recovery funds for such acquisitions, the grantee must uniformly apply whichever valuation method it chooses.” Id.
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E. Plaintiffs’ Complaint Plaintiffs brought suit against HUD and Paul Rainwater, Executive Director of the LRA, on November 12, 2008. Compl. ¶ 6 (Doc. 1). Plaintiffs assert jurisdiction under 28 U.S.C. § 1331, 28 U.S.C. § 1343(a)(3)-(4), 42 U.S.C. § 3613, and seek declaratory and injunctive relief under 28 U.S.C. §§ 2201-02. Compl. ¶¶ 8-9. Plaintiffs consist of five homeowners, who allege that they lived in New Orleans and that their homes were destroyed by Hurricane Katrina, and two non-profit fair housing organizations. Id. ¶¶ 11-17. Plaintiff homeowners allege that they received Road Home grant awards that were less than the cost of storm damage to their homes and that they have been unable to complete repairs on their homes. Id. ¶¶ 61-65. The organizational plaintiffs claim that, because of the Road Home program, they have been “substantially injured and frustrated in their mission to promote fair housing,” and “have been forced to devote scarce resources to identifying and counteracting defendants’ housing practices . . . [and] to educat[ing] the public about the . . . nature of the Road Home program.” Id. ¶¶ 6671. The organizational plaintiffs also claim that they “would have devoted their resources to their other activities and services such as expanding equal housing opportunities; . . . providing counseling and referral services to the public . . . ; and assisting residents . . . affected by [the] [h]urricanes, . . . to negotiate mortgage loan modifications and equitable insurance settlements.” Id. ¶ 73. The individual plaintiffs bring this action “on behalf of themselves and all similarlysituated . . . African American homeowners in New Orleans who have participated in Louisiana’s Road Home program or will participate by the first day of trial, whose grant amount was calculated or will be calculated based on the pre-storm value of their homes, and who have selected or will select the program’s option of using funds to repair or rebuild their homes.” Id. ¶¶ 20-21. Plaintiffs claim that the requirement that the Road Home grant awards not exceed the pre-
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storm value of the home (where the pre-storm value is less than the cost of damage) has a discriminatory impact on African Americans. Compl. ¶ 52. Plaintiffs further allege that African American recipients of Road Home grants are more likely than white grantees to have a gap in their rebuilding resources and the cost to rebuild. Id. ¶¶ 56, 58. The entirety of plaintiffs allegations against HUD are that: (i) the LRA “proposed and developed” the Road Home program, “in consultation with HUD,” (ii) HUD “approved the Road Home grant formula,” and (iii) the LRA administers the Road Home program “subject to ongoing oversight and continuing approval of HUD.” Id. ¶¶ 49-51. As a result of these alleged actions, plaintiffs allege that HUD has: (i) made housing unavailable or denied housing to African American homeowners, in violation of 42 U.S.C. § 3604(a); (ii) discriminated against African Americans in the availability, terms and conditions of real-estate related transactions, in violation of 42 U.S.C. § 3605(a); and (iii) failed to administer housing programs in a manner that affirmatively furthers fair housing, in violation of 42 U.S.C. § 3608(d), (e)(5). Id. ¶¶ 74-76. Plaintiffs also allege that HUD “failed to administer the CDBG program in a manner that affirmatively furthers fair housing,” in violation of 42 U.S.C. § 5304(b)(2) (requiring “grantees” to affirmatively further fair housing). Id. ¶ 77. Plaintiffs seek a declaration that HUD has deprived plaintiffs of their rights under the FHA and the HCDA and seek an injunction that would require HUD to “cease violating plaintiffs’ rights” and to “recalculat[e] Road Home homeowners grants in a non-discriminatory manner.” Compl., Request for Relief. III. STANDARD OF REVIEW
To prevail on a motion to dismiss for lack of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1), it is the plaintiffs’ burden to establish that the court has subject matter jurisdiction to hear the case. In re Swine Flu Immunization Prods. Liab. Litig., 880 F.2d 1439, 1442-43 (D.C. Cir. 1989); Jones v. Exec. Ofc. of the Pres., 167 F. Supp. 2d 10, 13 (D.D.C. 2001).
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Moreover, “plaintiff[s’] factual allegations in the complaint . . . will bear closer scrutiny in resolving a 12(b)(1) motion than in resolving a 12(b)(6) motion for failure to state a claim” because the plaintiffs bear the burden of proof. Grand Lodge of the Fraternal Order of Police v. Ashcroft, 185 F. Supp. 2d 9, 13-14 (D.D.C. 2001) (internal quotation marks omitted). In making its determination regarding the existence of subject matter jurisdiction, the court may consider matters outside the pleadings, such as a declaration submitted by an agency official. Lipsman v. Sec’y of the Army, 257 F. Supp. 2d 3, 6 (D.D.C. 2003).
Plaintiffs’ standing under Article III of the U.S. Constitution to maintain this action in federal court is a threshold jurisdictional matter that must be decided prior to other issues involved in the case. Warth v. Seldin, 422 U.S. 490, 500 (1975) (standing is a threshold inquiry that “in no way depends on the merits of the plaintiff’s contention that particular conduct is illegal”); Am. Library Ass’n v. F.C.C., 401 F.3d 489, 492 (D.C. Cir. 2005). The “irreducible constitutional minimum of standing” requires that plaintiffs demonstrate (a) an “injury in fact” which is “concrete and particularized,” (b) that the injury is “fairly . . . trace[able] to the challenged action of the defendant, and not . . . th[e] result [of] the independent action of some third party,” and (c) that it is “‘likely,’ as opposed to merely ‘speculative,’ that the injury will be ‘redressed by a favorable decision.’” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-561 (1992) (emphasis added) (quoting in part Simon v. E. Ky. Welfare Rts. Org., 426 U.S. 26, 38, 41-42, 43 (1976)). “This triad . . . constitutes the core of Article III’s case-or-controversy requirement, and the party invoking federal jurisdiction bears the burden of establishing its existence.” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 103-104 (1998). Moreover, these three core requirements of standing are substantially more difficult to establish where, as here, plaintiffs are not themselves the direct object of the particular federal government action or inaction challenged in the lawsuit. Lujan, 504 U.S. at 562.
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“The doctrine of mootness is a logical corollary of the case or controversy requirement[.]” Better Gov’t Ass’n v. Dep’t of State, 780 F.2d 86, 90 (D.C. Cir. 1986). In cases where challenged conduct ceases, “it becomes impossible for the court to grant any effectual relief whatever to the prevailing party, and any opinion as to the legality of the challenged action would be advisory.” City of Erie v. Pap’s A.M., 529 U.S. 277, 287 (2000). Accordingly, a court may not rule on the merits of a case in which the claim for relief is moot.
Absent an express statutory waiver, the doctrine of sovereign immunity shields the federal government from suit. FDIC v. Meyer, 510 U.S. 471, 475 (1994); see also U.S. v. Sherwood, 312 U.S. 584, 586 (1941). Because sovereign immunity is jurisdictional in nature, Meyer, 510 U.S. at 475, “the terms of [the government’s] consent to be sued in any court define that court’s jurisdiction to entertain the suit.” Sherwood, 312 U.S. at 586. As the Supreme Court has often observed, a waiver of sovereign immunity must be “unequivocally expressed in the statutory text” and “strictly construed, in terms of its scope, in favor of the sovereign.” Dep’t of Army v. Blue Fox, Inc., 525 U.S. 255, 261 (1999) (internal quotations omitted). A party bringing suit against the United States bears the burden of proving that the government has unequivocally waived its immunity. See, e.g., Graham v. Fed. Emergency Mgt. Agency, 149 F.3d 997, 1005 (9th Cir. 1998); James v. U.S., 970 F.2d 750, 753 (10th Cir. 1992); Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988).
Although plaintiffs have not invoked the Court’s jurisdiction under the Administrative Procedure Act (“APA”), 5 U.S.C. § 701 et seq., the APA provides, in certain circumstances, a limited waiver of sovereign immunity for suits seeking non-monetary relief against the United States and its agencies. 5 U.S.C. § 702. Under the APA, however, a court may overturn agency action, or compel agency inaction, only if the action or inaction was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” or in excess of its statutory
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jurisdiction or authority. 5 U.S.C. § 706(1), (2)(A), (C). The question of whether an agency has properly exercised its discretion does not “rais[e] issues of fact,” but “primarily raise[s] issues of law.” James Madison Ltd. v. Ludwig, 82 F.3d 1085, 1096 (D.C. Cir. 1996).
Further, when a court has jurisdiction to review an agency action under the APA, it sits as an appellate tribunal—its only function is to determine whether the agency committed legal error, not to supervise future regulatory action by the agency. Heckler v. Redbud Hosp. Dist., 473 U.S. 1308, 1313 (1985). Thus, in the event the Court were to find jurisdiction and rule in favor of plaintiffs, the Court would be empowered only to set aside the agency’s action, or order the agency to act, and leave it to the agency to take appropriate further action; the Court would not be empowered to compel specific remedial or affirmative action, or prohibit other future action by the agency. County of Los Angeles v. Shalala, 192 F.3d 1005, 1011 (D.C. Cir. 1999) (“[W]hen a court reviewing agency action determines that an agency made an error of law, the court’s inquiry is at an end: the case must be remanded to the agency for further action consistent with the corrected legal standards.”) (quoting PPG Indus., Inc. v. U.S., 52 F.3d 363, 365 (D.C. Cir. 1995)); id. at 1011–12 (holding that the district court erred in retaining jurisdiction to devise a specific remedy for the agency to follow). IV. ARGUMENT
A. Plaintiffs Lack Standing to Maintain Their Claims Against HUD Because They Cannot Satisfy the Redress Prong of Article III’s Standing Requirement
Plaintiffs lack standing to challenge HUD’s actions because they cannot establish that the judgment they seek would redress the injuries they have identified. “Redressability examines whether the relief sought, assuming that the court chooses to grant it, will likely alleviate the particularized injury alleged by the plaintiff.” Fla. Audubon Soc’y v. Bentsen, 94 F.3d 658,
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663-64 (D.C. Cir. 1996) (en banc).6 In this action, plaintiffs seek a declaratory judgment that HUD’s “acts, practices, policies, and omissions have deprived [p]laintiffs of their rights under the [FHA] and the [HCDA],” and seek injunctive relief ordering HUD “to cease immediately [its] violation of [p]laintiffs’ rights.” Compl., Request for Relief ¶¶ (b) - (c). Plaintiffs also seek an injunction “recalculating Road Home homeowner grants in a nondiscriminatory manner.” Id. ¶ (c). To satisfy the redressability component of standing, plaintiffs would have to allege (and ultimately prove) that it is “likely,” as opposed to merely “speculative,” Friends of the Earth, Inc. v. Laidlaw Env’tl Srvs., Inc., 528 U.S. 167, 181 (2000)), that a judgment setting aside HUD’s approval of Louisiana’s Road Home program, and finding HUD’s continuing approval and oversight was arbitrary and capricious, would redress their injuries. See Compl., Prayer for Relief. This plaintiffs cannot do.
An “adequate examination” of redressability requires that the court first “identify the components of [plaintiffs’] alleged harm.” Freedom Republicans, Inc. v. FEC, 13 F.3d 412, 416 (D.C. Cir. 1994). Here, plaintiffs identify as a harm to them only that Louisiana’s “Road Home grant awards are calculated using the lower of two baseline values: the pre-storm value of the home, or the cost of damage to the home,” Compl. ¶ 47, which in turn, allegedly has a disparate impact on African Americans. Id. ¶ 52. Plaintiffs’ complaint is not that HUD directly imposed these requirements. See id. ¶ 49 (alleging that the LRA proposed and developed the Road Home
6 The D.C. Circuit has explained that when, as is true in this case, “plaintiffs’ claim hinges on the failure of [the federal] government to prevent another party’s injurious behavior, the “fairly traceable” and redressability inquiries appear to merge. See Competitive Enter. Inst. v. NHTSA, 901 F.2d 107, 113 (D.C. Cir. 1990). In such cases, both prongs of the standing analysis can be said to focus on principles of causation: fair traceability turns on the causal nexus between the agency action and the asserted injury, while redressability centers on the causal connection between the asserted injury and judicial relief. See Allen v. Wright, 468 U.S. 737, 753 n.19 (1984). Despite these similarities, however, each inquiry has its own emphasis. Causation remains inherently historical; redressability quintessentially predictive. See id.
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Program); id. ¶ 51 (alleging that the LRA administers the Road Home Program). Instead, they allege only that HUD’s initial and continuing approval and oversight of the Road Home grant formula, id. at ¶¶ 50-51, is allegedly the cause of their injuries.
However, “indirectness of injury, while not necessarily fatal to standing, ‘may make it substantially more difficult to meet the minimum requirement of Art. III: To establish that, in fact, the asserted injury was the consequence of the defendants’ actions, or that prospective relief will remove the harm.”’ Simon v. E. Ky. Welfare Rights Org., 426 U.S. at 44-45 (emphasis added) (quoting in part Warth, 422 U.S. at 505). As the Supreme Court explained in Lujan v. Defenders of Wildlife:
When . . . a plaintiff’s asserted injury arises from the government’s allegedly unlawful regulation (or lack of regulation) of someone else, much more is needed. In that circumstance, causation and redressability ordinarily hinge on the response of the regulated (or regulable) third party to the government action or inaction . . . . The existence of one or more of the essential elements of standing depends on the unfettered choices made by independent actors . . . whose exercise of broad and legitimate discretion the courts cannot presume to control or to predict. 504 U.S. at 562 (emphasis by court) (quotation and citation omitted). Thus, to satisfy the minimum requirements of Article III, plaintiffs must demonstrate that it is “likely,” and not merely “speculative,” that the prospective relief they seek (invalidation of HUD’s approval of Louisiana’s Road Home grant formula, see Compl., Prayer for Relief) will result in the removal of the harm they have identified (Road Home grants . . . calculated based on the pre-storm value of the home), Compl. ¶ 60). If plaintiffs are unable to do so, then their injuries would not be redressed by a favorable judgment and their claims must be dismissed for lack of standing. Steel Co., 523 U.S. at 107 (“Relief that does not remedy the injury suffered cannot bootstrap a plaintiff into federal court; that is the very essence of the redressability requirement.”). Here, plaintiffs have not and cannot demonstrate a likelihood that a favorable judgment in
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this action against HUD would have any substantial impact on decisions by LRA regarding how to use disaster recovery CDBG funds provided by the special appropriations. Consequently, even if this Court were to declare HUD’s approval of Louisiana’s Road Home grant awards to be invalid, and HUD’s continuing oversight of the program to be arbitrary and capricious, plaintiffs have not even alleged, and cannot establish a likelihood, that the LRA would necessarily create a disaster recovery program that provided something resembling the repair cost reimbursement structure that plaintiffs seek. To be clear, plaintiffs challenge is to HUD’s approval and continuing oversight of third-party conduct – Louisiana’s decision about how to use disaster recovery funds under the special appropriations. Under these circumstances, invalidation of HUD’s approval of the Road Home grant awards and finding its oversight arbitrary and capricious would not necessarily alter Louisiana’s use of disaster recovery funds in a way that favors plaintiffs.
Even assuming arguendo that “the Road Home formula design disproportionately burdens African American homeowners and hinders their ability to return home compared to white families,” as plaintiffs allege, Compl. ¶ 58, both the CDBG program in general, and the special appropriations in particular, vest Louisiana, and not HUD, with the authority to decide how to use these disaster recovery funds consistent with the requirements of the CDBG program as modified by the special appropriations. Kome Decl. ¶¶ 3, 6, 9. Courts have recognized HUD’s limited role in approving CDBG funds. See, e.g., Mejia v. HUD, 688 F.2d 529, 535 (7th Cir. 1982) (noting HUD’s limited power to review applications for CDBG funds). In this case, moreover, the special appropriations required HUD to waive its normal statutory and regulatory program requirements of the HCDA at the request of the states and on HUD’s finding that such waiver would not be inconsistent with the purposes of the Act. Kome Decl. ¶ 13. Pub. L. 109148 provided that HUD “shall waive, or specify alternative requirements for, any provision of
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any statute or regulation that [HUD] administers in connection with the obligation by [HUD] or the use by the recipient of these funds or guarantees,” except for requirements related to fair housing, nondiscrimination, labor standards, and the environment. Id. (emphasis added). Pub. L. 109-234 also authorized HUD to waive these same requirements, see id., which HUD waived (and the waiver of which plaintiffs do not challenge). Compl. passim. See Kome Decl. ¶ 23. Moreover, the special appropriations cannot be reasonably read to preclude Louisiana from using the pre-storm value of the house as a basis for providing disaster relief. Pub. L. 109-148; Pub. L. 109-234. Nor, if the Court were to set aside HUD’s approval of Louisiana’s homeowner program, or find its oversight to be arbitrary and capricious, would there be anything in the special appropriations that requires the State to provide compensation and incentive grants of up to $150,000, see id., which plaintiffs allege is necessary to allow them to complete repairs and return to their homes. Compl. ¶¶ 60-65. By contrast, New York’s use of CDBG disaster recovery funds for a homeowner compensation program following September 11, 2001 provided no more than $14,500 to any household and achieved success in meeting its goals. Kome Decl. ¶ 17. Similarly, the city of Grand Forks, North Dakota, used CDBG disaster recovery funds to provide $5,000 loan payments as incentives to homeowners who remained in the city after flooding. See id. Neither of these programs was designed to provide compensation for the cost of damage to a home, yet both satisfied the requirement of HUD’s disaster recovery CDBG program. Indeed, there is nothing in these specially-appropriated disaster relief authorizations that would require Louisiana to provide any assistance to homeowners of any income level at all. Pub. L. 109-148; Pub. L. 109-234.7 Rather, Louisiana had to obtain a waiver from HUD of the
7 Of the $5,200,000,000 provided in the second appropriation, Congress required the five states affected by the hurricanes to collectively devote at least $1,000,000,000 for the “repair, rehabilitation, and reconstruction (including demolition, site clearance and remediation) of the affordable rental housing stock (including public and other HUD-assisted housing) in the
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normal CDBG program requirements just to allow the state to provide compensation and incentive grants to homeowners in the first place. Kome Decl. ¶ 23. In sum, in light of the discretion that the CDBG program and the special appropriations vest with Louisiana, plaintiffs cannot establish that an injunction against HUD would force Louisiana to provide them with the relief they seek.
Moreover, plaintiffs’ speculation regarding what Louisiana “might” do if HUD’s approval or oversight are enjoined is exactly the type of speculation the courts have held insufficient to establish standing. See Compl. ¶ 60 (“Road Home grants could be calculated based [solely] on the cost of damage to the home.”) (emphasis added). For example, in Allen v. Wright, the Supreme Court held that it was overly speculative whether requiring the IRS to enforce its rules, which prohibited tax breaks to racially discriminatory private schools, would prevent segregated schools, as plaintiff in that case alleged. Allen, 468 U.S. at 751. The Court held that even the court-ordered withdrawal of tax breaks would not necessarily convince these private schools to change policies, or convince parents to transfer their children to nonsegregated schools. Id. at 758. Similarly, in Simon, the Court held that it was overly speculative to conclude that suspending tax benefits to private hospitals would force those hospitals to take on more indigent patients, as plaintiff in that case had sought. See Simon, 426 U.S. at 43-44 (1976). See also Linda R.S. v. Richard D., 410 U.S. 614, 618 (1973) (finding no standing based on lack of redressability because the prospect that prosecuting deadbeat dads would result in payment of child support was only speculative).
The D.C. Circuit has also dismissed claims like plaintiffs’ for lack of standing on
impacted areas.” Pub. L. 148-109 (emphasis added). Congress made no such requirement that any funds be used for homeowners in any of the appropriations. See, e.g., id.
Even the third special appropriation merely provided funds to the Road Home program. Pub. L. No. 110–116. It did not require that these funds be used to assist homeowners. See id.
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redressability grounds because the remedy sought was purely speculative. In Freedom Republicans, supra, the court of appeals dismissed for lack of standing a challenge to the Federal Election Commission’s alleged failure to enforce Title VI of the Civil Rights Act of 1964 against the Republican Party and its delegate allocation system. See Freedom Republicans, 13 F.3d at 417. The court held that the plaintiffs had not established that a possible judicial response would redress their injuries because it would have been “pure speculation” to attempt to predict the potential impact of the threat of withdrawal of all federal funding (which according to the complaint was in excess of $10,000,000) on the Republican Party’s decision-making. See id. at 418-19 & n.6.
Similarly, in US Ecology, Inc., v. U.S. Dep’t of the Interior, a private company sued the U.S. Department of Interior for its allegedly unlawful rescission of a decision to approve the transfer of a plot of land to the State of California, which would enable the company to develop a facility on the site as a licensee for the state. The D.C. Circuit held that the injury of the private company was not redressable by a favorable court decision because the company could not demonstrate that the state would accept title to the land from the federal government, let alone that it would proceed with the plaintiff’s development contract. See US Ecology, Inc. v. U.S. Dep’t of the Interior, 231 F.3d 20, 21, 24-25 (D.C. Cir. 2000).
Finally, in Univ. Med. Ctr. of S. Nev. v. Shalala, 173 F.3d 438 (D.C. Cir. 1999), a hospital challenged its allegedly unlawful exclusion by the Secretary of Health and Human Services from a list of entities eligible for discounts from drug manufacturers. The D.C. Circuit held that the plaintiff’s injury in losing drug discounts was not redressable by a favorable court decision where, even if the court granted declaratory relief that the government unlawfully delayed in placing the hospital on the list of entities eligible for discounts, retroactive discounts would actually be available only if third party manufacturers could be persuaded to pay them. See Univ.
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Med. Ctr. of S. Nev., 173 F.3d at 441.8
In each of these cases, the plaintiffs had not established, nor could the courts predict,
how non-federal parties would respond to a favorable decision for the plaintiffs, and thus
plaintiffs failed to demonstrate that the requested relief against the federal defendants would
redress plaintiffs’ injuries. This fatal flaw is also present in this action because neither plaintiffs
nor the Court can predict what effect, if any, a favorable court ruling in this case setting aside
HUD’s approval of the Road Home program, or ordering HUD to exercise its oversight authority
over the program, would have on decisions by Louisiana about whether to even continue the
program or how to administer the program, let alone on the state’s decisions regarding how to
8 Other circuits have dismissed similar challenges. For example, in Rubin v. City of Santa Monica, 308 F.3d 1008 (9th Cir. 2002), the Ninth Circuit dismissed for lack of standing a challenge to the California Secretary of State’s administration of the state’s election regulations because of the City of Santa Monica’s interpretation of those regulations. The Ninth Circuit held that plaintiff could not establish that “enjoining the Secretary of State from enforcing the election regulations would stop the City of Santa Monica from following them in the future.” Id. In so holding, the Ninth Circuit found that a “purely speculative” favorable outcome will not suffice to establish the redressability prong. Id. at 1020.
Similarly, in Burton v. Cent. Interstate Low-Level Radioactive Waste Compact Comm’n, 23 F.3d 208 (8th Cir. 1994), the court addressed claims by plaintiffs seeking an injunction against a government’s taxation of public power entities. Id. 209-10. In holding that plaintiffs lacked standing, the Eighth Circuit held that, even though plaintiffs might by able to establish the traceability prong of standing, by showing that “LES [a third party] increased electricity rates in response to the [defendant’s] taxes on LLRW [another third party],” it was still “not by itself enough to confer standing on [plaintiffs].” Id. (emphasis added) The Court explained that:
[although increased rates may constitute an injury that is traceable to the [defendant’s] conduct, [plaintiff has] not alleged that the injury is likely to be redressed by a favorable decision. The complaint asks the court to ‘redress [plaintiff’s] injuries’ by declaring the [defendant’s] policies illegal and issuing an injunction preventing the [defendant] ‘from any further and future perversion of its legal duties.’ [Plaintiff] apparently would have us take it on faith that LES, . . . would adjust its rates if the district court enjoined the [defendant’s] taxes on LLRW . . . Thus, it is “merely speculative” here whether a favorable decision would affect the electricity rate that [plaintiff] pays. Id. at 210 (emphasis in original).
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use disaster recovery funds provided by the special appropriations.9 Certainly a favorable judgment of this Court would not make it likely that Louisiana would provide compensation and incentive grants of up to $150,000 based solely on the cost of damage to a home, as plaintiffs seek.
In sum, the judgment sought by plaintiffs against HUD in this case would not and could not likely redress plaintiffs’ injuries caused by Louisiana. Accordingly, plaintiffs lack standing to pursue their claims against HUD, and this action should be dismissed against HUD for lack of subject matter jurisdiction.
B. Plaintiffs’ Claims About HUD’s Approval and Oversight of the LRA’s Road Home Program are Mostly Moot
Plaintiffs challenge HUD’s “approval” and “continuing approval and oversight” of the LRA’s Road Home program. Compl. ¶¶ 50-51. Because HUD has already obligated $12,400,000,000 in disaster recovery CDBG funds provided by the special appropriations to Louisiana to implement the Road Home program, plaintiffs’ challenge to HUD’s approval and continuing oversight of Louisiana’s use of these funds is now moot. The D.C. Circuit’s case law “unequivocally provides that once the relevant funds have been obligated, a court cannot reach them in order to award relief.” City of Houston, Tex. v. HUD, 24 F.3d 1421, 1426 (D.C. Cir. 1994). In W. Va. Health Ctr. v. Heckler, 734 F.2d 1570 (D.C. Cir. 1984), for example, the court
9 To be clear, plaintiffs’ claims here are plainly distinguishable from a challenge to a government action which authorizes or permits “third party conduct that allegedly caused a plaintiff injury, when that conduct would otherwise have been illegal.” E.g., Animal Legal Defense Fund v. Glickman, 154 F.3d 426, 442 (D.C. Cir. 1998) (en banc) (emphasis added); Am.’s Community Bankers v. FDIC, 200 F.3d 822, 827 (D.C. Cir. 2000); Bristol-Myers Squibb Co. v. Shalala, 91 F.3d 1493, 1499 (D.C. Cir. 1996). In that type of case, invalidation of the federal government’s action would redress a plaintiff’s injury by rendering the third party’s conduct illegal again. In this case, plaintiffs do not allege that HUD’s approval is what legalized the LRA’s ability to provide “Road Home grants [that] are calculated using the lower of two baseline values: the pre-storm value of the home or the court of damage to the home.” Compl. ¶ 47. HUD merely provided the funding for the program.
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acknowledged the equitable doctrine permitting courts to award funds after an appropriation has lapsed, if a suit is timely filed (as that case was), but held that no relief was available for one of the fiscal years in question because “all of these funds ha[d] been awarded by the Secretary to various recipients.” 734 F.2d at 1577. The D.C. Circuit has relied on similar reasoning in at least two other cases. See Ambach v. Bell, 686 F.2d 974, 986 (D.C. Cir. 1982) (“Once the chapter 1 funds are distributed to the States and obligated, they cannot be recouped. It will be impossible in the absence of a preliminary injunction to award the plaintiffs the relief they request if they should eventually prevail on the merits.”); Population Inst. v. McPherson, 797 F.2d 1062, 1081 (D.C. Cir. 1986) (quoting Ambach and W. Va. Health Ctr., and noting that “if the government in the instant case is permitted to distribute the $10 million to other organizations, the appeal will become moot.”). Thus, to avoid having its case mooted, a plaintiff must seek a preliminary injunction preventing the agency from disbursing those funds. City of Houston, Tex. v. HUD, 24 F.3d at 1427.
In City of Houston, the court held that the case was moot on two independent grounds, including the fact that HUD had contractually obligated the CDBG funds at issue more than six months before plaintiff filed its complaint. Id.10 In this case, HUD had already obligated $12,400,000,000 in disaster recovery CDBG funds to Louisiana provided by each of the special appropriations before plaintiffs brought suit. Kome Decl. ¶ 25. Accordingly, plaintiffs’ claims against HUD for its approval and continuing oversight of the LRA’s use of these funds for its Road Home homeowners program are now moot.11
10 The other independent ground was that the appropriation had lapsed. Id. In this case, Congress provided that the disaster recovery CDBG funds committed by the special appropriations do not lapse. Pub. L. 109-148.
11 To be clear, HUD does not take the position that plaintiffs’ challenge to HUD’s continuing approval and oversight concerning funds not yet obligated, Kome Decl. ¶ 25, is moot.
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C. Plaintiffs Fail to Allege a Waiver of Sovereign Immunity By the United States Even if plaintiffs’ lack of standing and the mootness of most of their claims were not a bar to this action against HUD, sovereign immunity is also a bar plaintiffs’ action against HUD. “The United States, as sovereign, is immune from suit save as it consents to be sued and the terms of its consent to be sued in any court define that court’s jurisdiction to entertain the suit.” Hercules Inc. v. U.S., 516 U.S. 417, 422 (1996) (citations and internal punctuation omitted). A waiver of sovereign immunity “cannot be implied but must be unequivocally expressed” in the text of the statute on which the claimed waiver is based. U.S. v. King, 395 U.S. 1, 4 (1969). Therefore, in analyzing whether Congress has waived the immunity of the United States, waivers must be construed strictly in favor of the sovereign, and not enlarged beyond what the statutory language requires. McMahon v. U.S., 342 U.S. 25, 27 (1951). See also Ruckelshaus v. Sierra Club, 463 U.S. 680, 685-86 (1983); E. Transp. Co. v. U.S., 272 U.S. 675, 686 (1927). Accordingly, plaintiffs may not maintain any claims against HUD absent a waiver of sovereign immunity that covers those claims, and plaintiffs are bound by any limitations, substantive or procedural, that any such waiver imposes. Veldheon v. U.S. Coast Guard, 35 F.3d 222, 225 (5th Cir. 1994) (“Federal courts are courts of limited jurisdiction. Absent jurisdiction conferred by statute, district courts lack power to consider claims. This limitation is doubly significant for suits against the federal government, which, absent express waiver, are barred by the doctrine of sovereign immunity.”). Plaintiffs invoke this Court’s jurisdiction under 28 U.S.C. § 1331, 28 U.S.C. §§ 1343(a)(3)-(4), and 28 U.S.C. §§ 2201, 2202. Compl. ¶¶ 8-9. Plaintiffs also invoke the Court’s jurisdiction under the FHA, 42 U.S.C. §§ 3601, 3613(a), Compl. ¶ 8, and allege violations of 42 U.S.C. § 3604(a), 42 U.S.C. § 3605(a), 42 U.S.C. § 3608(d), (e)(5). Compl. ¶¶ 74-76. Finally, plaintiffs allege a violation of the HCDA, 42 U.S.C. § 5304(b)(2). Compl.
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¶ 77. Although many of these statues may provide the Court with jurisdiction in appropriate circumstances, none of them waives the sovereign immunity of the United States, and thus none provides this Court with jurisdiction over plaintiffs’ claims against HUD.
Federal question jurisdiction under 28 U.S.C. § 1331 does not by itself operate as a waiver of sovereign immunity by the United States. See Sabhari v. Reno, 197 F.3d 938, 943 (8th Cir. 1999); Lonsdale v. U.S., 919 F.2d 1440, 1443-44 (10th Cir. 1990); Kester v. Campbell, 652 F.2d 13, 15 (9th Cir. 1981). Moreover, federal courts have repeatedly and uniformly held that § 1343(a) does not constitute a waiver of the United States’ sovereign immunity. See, e.g., Salazar v. Heckler, 787 F.2d 527, 528 (10th Cir. 1986); Beale v. Blount, 461 F.2d 1133, 1138 (5th Cir. 1972); Zhu v. U.S., 2005 WL 1378914, *3 (D.D.C. 2005); Byrd v. Smith, 693 F. Supp. 1199, 1201 (D.D.C.1986). See also Brian v. Gugin, 853 F. Supp. 358, 363 (D. Idaho 1994), aff’d, 46 F.3d 1138 (9th Cir.1995). In addition, 28 U.S.C. §§ 2201-02 allows for declaratory judgments; it does not confer jurisdiction, nor does it contain a waiver of sovereign immunity by the United States. Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671 (1950); TTEA v. Ysleta del Sur Pueblo, 181 F.3d 676, 681 (5th Cir. 1999); Amalgamated Sugar Co. v. Bergland, 664 F.2d 818, 822 (10th Cir. 1981); Ballistrieri v. U.S., 303 F.2d 617, 619 (7th Cir. 1962).
Nor is there any express waiver of the United States’ sovereign immunity in the Fair Housing Act or the Housing and Community Development Act of 1974. “[T]he Fair Housing Act does not waive sovereign immunity to permit suits against the federal government.” Zhu v. Gonzales, 2006 WL 1274767, *5 (D.D.C. May 8, 2006); Boyd v. Browner, 897 F. Supp. 590, 595 (D.D.C.1995) (“[T]he Fair Housing Act does not ‘unambiguously waive’ the government’s sovereign immunity defense.”). Accord Anderson v. City of Alpharetta, 737 F.2d 1530, 1534 (11th Cir. 1984); Alschuler v. HUD, 686 F.2d 472, 476, 477-78 (7th Cir. 1982); Bus. Ass’n of Univ. City v. Landrieu, 660 F.2d 867, 873 (3d Cir. 1981). See also Marinoff v. HUD, 892 F.
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Supp. 493, 496 (S.D.N.Y. 1995), aff’d, 78 F.3d 64 (2nd Cir. 1996). Lastly, the Housing and Community Development Act of 1974 does not waive the federal government’s immunity from suit. Pleune v. Pierce, 697 F. Supp. 113, 119 (E.D.N.Y. 1988); Nabke v. HUD, 520 F. Supp. 5, 8-9 (W.D. Mich. 1981).
In light of plaintiffs’ failure to even allege a waiver of sovereign immunity by the United States, HUD remains immune from suit, and this Court lacks jurisdiction over HUD. Accordingly, plaintiffs’ claims against HUD should be dismissed on sovereign immunity grounds.
D. Plaintiffs Could Not Maintain Suit Under the Administrative Procedure Act, Which Provides the Only Possible Waiver of Sovereign Immunity For Their Claims
The only sovereign immunity waiver that could conceivably apply to plaintiffs’ claims appears in the Administrative Procedure Act (“APA”). 5 U.S.C. §§ 701 et seq. The APA provides a limited waiver of sovereign immunity for “[a] person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute.” Id. § 702.12 However, in 5 U.S.C. § 704, “the APA excludes from its waiver of sovereign immunity claims for which an adequate remedy is available elsewhere.” Fornaro v. James, 416 F.3d 63, 66 (D.C. Cir. 2005). See also Turner v. Sec’y of HUD, 449 F.3d 536, 53941 (3d Cir. 2006) (an APA action that might otherwise be properly brought against HUD is barred because plaintiffs can obtain their remedy against a non-federal party). The statute also precludes review when the underlying statute does not require the agency to take a discrete action which it failed to take. Norton v. S. Utah Wilderness Alliance (“SUWA”), 542 U.S. 55, 64 (2004).
12 The APA does not waive sovereign immunity for suits seeking monetary damages. Dep’t of the Army v. Blue Fox, Inc., 525 U.S. 255, 260-63 (1999).
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In this case, even if plaintiffs were to allege a waiver of immunity under the APA, judicial review of the claims asserted would still be precluded because plaintiffs: (i) have an adequate remedy at law directly against Louisiana state officials and the State of Louisiana; and (ii) have failed to identify specific, discrete actions that the relevant statutes required HUD to take.
1. The APA would not waive sovereign immunity for plaintiffs’ claims because there is another adequate remedy at law
Suit against federal agencies can be maintained under the APA only if there is a “final agency action for which there is no other adequate remedy in a court.” 5 U.S.C. § 704. See also Transohio Sav. Bank v. Dir., Ofc. of Thrift Supervision, 967 F.2d 598, 607 (D.C. Cir. 1992) (“Whether § 702 of the APA justifies . . . jurisdiction over [plaintiffs’] case depends on whether [their] claims fall under any of the . . . limitations on the APA’s waiver of sovereign immunity. The APA excludes from its waiver . . . claims for which an adequate remedy is available elsewhere.”). Here, such an adequate remedy exists because plaintiffs can maintain their discrimination claims — to the extent that any of them are cognizable — directly against the Louisiana state officials under the FHA and the HCDA, and directly against the State of Louisiana under Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d, alleging the same facts and seeking the same remedies.
Plaintiffs can maintain their claims for declaratory and injunctive relief under the FHA and the HCDA directly against defendant Paul Rainwater, as Executive Director of the LRA, under the doctrine of Ex Parte Young. See Verizon Md., Inc. v. Pub. Serv. Com’n of Md., 535 U.S. 635, 646 (2002) (“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.”) (quotation marks and citation omitted). Neither the FHA nor the
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HCDA display any intent to foreclose jurisdiction under Ex parte Young. Accord High Plains Cmty. Devel. Corp. v. Schaefer, 2007 WL 4180707, *2 (D. Neb. 2007) (FHA doesn’t foreclose jurisdiction for suits against states ). Cf. Seminole Tribe of Fla. v. Fla., 517 U.S. 44, 74 (1996) (suit under Ex parte Young would be inconsistent with the “detailed remedial scheme” set out in the Indian Regulatory Gaming Act, 25 U.S.C. § 2710).
In addition, in Section 1003 of the Rehabilitation Act Amendments of 1986, 100 Stat. 1845, 42 U.S.C. § 2000d-7, Congress expressly abrogated the states’ sovereign immunity against suits brought in federal court to enforce Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d, and provided that, in a suit against a state, “remedies (including remedies both at law and in equity) are available . . . to the same extent as such remedies are available . . . in the suit against any public or private entity other than a State.” 42 U.S.C. § 2000d-7(a)(2). Alexander v. Sandoval, 532 U.S. 275, 280 (2001); Goonewardena v. NY, 475 F. Supp. 2d 310, 328 (S.D.N.Y. 2007). Accordingly, plaintiffs can bring suit directly against the State of Louisiana under Title VI.
Because there is an adequate remedy at law here for plaintiffs’ claims, § 704 bars this action against HUD. In cases similar to this one, the D.C., Third, and Fourth Circuits found that suits directly against an allegedly discriminating non-federal entity provided an adequate alternative to APA review, and therefore suit under the APA was precluded under § 704. In Wash. Legal Found. v. Alexander, 984 F.2d 483 (D.C. Cir. 1993), the D.C. Circuit considered a challenge under the APA to the alleged failure of the Department of Education to enforce the non-discrimination provisions of Title VI against educational institutions that offered some scholarships only to minority students. Id. at 484. The court held that because plaintiffs had “an implied right of action under Title VI against the individual colleges and law schools to redress any discrimination they have allegedly suffered, . . .that alternative remedy . . . preclude[d] a
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remedy under the APA.” Id. at 486. See also Jersey Heights Neighborhood Ass’n v. Glendening, 174 F.3d 180, 191-92 (4th Cir. 1999) (dismissing APA claim against federal defendants because court found that a Title VI claim pursued directly against the state, as a recipient of federal funding, provided adequate alternative remedy). Similarly, in Women’s Equity Action League (“WEAL”) v. Cavazos, 906 F.2d 742 (D.C. Cir. 1990), the D.C. Circuit considered a broad challenge to the alleged failure of the Departments of Education and Labor to enforce various civil rights statutes against educational institutions receiving federal funds. The court upheld the district court’s dismissal of the complaint, finding that no right of action was available to the plaintiffs under the APA because of the existence of “implied rights of action against federally-funded institutions to redress discrimination proscribed by Titles VI and IX and express rights of action against federally-funded discriminators under . . . the Rehabilitation Act.” Id. at 750 (citation omitted).
In Am. Disabled for Attendant Programs Today (“ADAPT”) v. HUD, 170 F.3d 381 (3d Cir. 1999), the Third Circuit addressed an APA suit against HUD brought by organizations representing disabled individuals alleging that HUD had abdicated its duty under the FHA and violated its own regulations under the Rehabilitation Act of 1973. Id. at 382. The court dismissed the claims, finding that “a private right of action against individual housing providers that receive federal funding is provided for in the text of the [FHA]. This remedy is clearly ‘adequate’ in the section 704 sense, and so judicial review is inappropriate on all counts.” Id. at 390. These direct statutory remedies against the entity alleged to be engaging in discrimination were held to be “‘adequate,’ therefore preclusive of a default remedy under the APA.” Id.
Moreover, it is well settled that “[a] legal remedy is not inadequate for purposes of [preclusion of review under] the APA because it is procedurally inconvenient for a given plaintiff, or because plaintiffs have inadvertently deprived themselves of an opportunity to pursue
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that remedy.” Town of Sanford v. U.S., 140 F.3d 20, 23 (1st Cir. 1998). See also Martinez v. U.S., 333 F.3d 1295, 1320 (Fed. Cir. 2003) (“The fact that the complaint was untimely filed . . . does not mean that that court could not offer a full and adequate remedy; it merely means that [plaintiff] did not file his complaint in time to take advantage of that remedy.”); Sable Commc’n of Cal., Inc. v. FCC, 827 F.2d 640, 642 (9th Cir. 1987). Indeed, the D.C. Circuit has held that the APA “bar[s] suits where a plaintiff’s injury may be remedied in another action, even if that remedy would have no effect upon the challenged agency action.” Coker v. Sullivan, 902 F.2d 84, 90 n.5 (D.C. Cir. 1990) (citation omitted). In Coker, the court held that “[a]ctions directly against the states are not merely adequate; they are also more suitable avenues for plaintiffs to pursue the relief they seek. The states are the immediate cause of the injuries of which the Cokers and the Porters complain; these plaintiffs ask [the federal defendant] not to refrain from harming them but rather to cure their state-created injuries.” Id. at 90.
The courts’ holdings in Wash. Legal Found., WEAL, and Coker control here, and the principles of Jersey Heights, and ADAPT apply as well. Congress has provided plaintiffs with a fully adequate alternative remedy for their claimed injuries in the form of a cause of action directly against Louisiana state officials with respect to plaintiffs’ claims of discrimination under the FHA and the HCDA, and directly against the state under Title VI. Inasmuch as maintaining suit directly against Louisiana state officials and the state provides an adequate legal remedy for all of plaintiffs’ claims (to the extent that they are cognizable at all), § 704 precludes plaintiffs from maintaining suit against HUD under the APA. Thus, the APA would not provide a waiver of sovereign immunity by the United States in this instance.
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2. Plaintiffs’ claims for relief under 42 U.S.C. §§ 3608(d) and (e)(5) and 42 U.S.C. § 5304(b)(2) are not reviewable under the APA
The APA also does not provide a waiver of immunity to review plaintiffs’ claims for relief arising under 42 U.S.C. §§ 3608(d) and (e)(5) and 5304(b)(2) in this instance. Sections 3608(d) and (e)(5) require HUD to “administer [its] programs and activities relating to housing and urban development . . . in a manner affirmatively to further the purposes of this subchapter” and to “administer the programs and activities relating to housing and urban development in a manner affirmatively to further [its fair housing ] policies.” Id. §§ 3608(d) and (e)(5). Similarly, the § 5304(b)(2) requires that “grantees will affirmatively further fair housing.” Id. § 5304(b)(2) (emphasis added).13 However, because the APA does not provide for review of HUD’s alleged failure to follow these provisions, it does not provide a waiver of sovereign immunity. Although the APA allows reviewing courts to “compel agency action unlawfully withheld or unreasonably delayed,” 5 U.S.C. § 706(1), the Supreme Court has unanimously held that a plaintiff cannot maintain a § 706(1) claim absent a mandatory statutory obligation that an agency take the specific, discrete action that the plaintiff wants it to take. SUWA, supra, 542 U.S. at 64.
In SUWA, the Supreme Court dismissed an APA claim that sought to compel the Interior Department to ban off-road vehicles in a wilderness area, because the statute at issue simply directed the agency to preserve the character of wilderness areas. Id. at 65-67. The Court began its analysis by noting that the term “agency action,” although including “a failure to act,” is defined in the first instance by reference to “a list of five categories of decisions made or outcomes implemented by an agency–‘agency rule, order, license, sanction [or] relief.’” Id. at 62 (quoting 5 U.S.C. § 551(13)). The Court explained that:
13 Although plaintiffs’ complaint alleges that both HUD and the LRA have violated 42 U.S.C. § 5304(b)(2) in Count Two of their complaint, plaintiffs may have intended to allege only that the LRA, as the grantee, has violated that provision, because it requires only that “grantees will affirmatively further fair housing.” Id.
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All of those categories involve circumscribed, discrete agency actions, as their definitions make clear: “an agency statement of . . . future effect designed to implement, interpret, or prescribe law or policy” (rule); a “final disposition . . . in a matter other than rule making” (order); a “permit . . . or other form of permission” (license); a “prohibition . . . or taking [of] other compulsory or restrictive action” (sanction); or a “grant of money, assistance, license, authority,” etc., or “taking of other action on the application or petition of, and beneficial to, a person” (relief).
Id. (quoting 5 U.S.C. § 551(4), (6), (8), (10), (11)) (emphasis added). The Court then construed
the phrase “failure to act” as a failure to take one of the five agency actions earlier defined in
§ 551(13), emphasizing that “[t]he important point is that a ‘failure to act’ is properly understood
to be limited, as are the other items in § 551(13), to a discrete action.” Id. at 62-63 (emphasis in
original).
The Court then explained that “the only agency action that can be compelled under the
APA is action legally required.” Id. at 63 (emphasis in original). Therefore, “a claim under
§ 706(1) can proceed only where a plaintiff asserts that an agency failed to take a discrete agency
action that it is required to take.” Id. at 64 (emphasis in original). This limitation “rules out
judicial direction of even discrete agency action that is not demanded by law.” Id. at 65.
In SUWA, as in the present case, the plaintiffs alleged that an agency had failed to comply
with a broad statutory mandate. The SUWA plaintiffs claimed that a statute requiring the Bureau
of Land Management to “continue to manage [wilderness areas] in a manner so as not to impair
the suitability of such areas for preservation as wilderness,” 43 U.S.C. § 1782(c), forbade the
agency from taking a particular action–permitting the use of off-road vehicles in certain
wilderness areas. Id. at 65. The Supreme Court rejected the plaintiffs’ assertion, explaining:
If courts were empowered to enter general orders compelling compliance with broad statutory mandates, they would necessarily be empowered, as well, to determine whether compliance was achieved–which would mean that it would ultimately become the task of the supervising court, rather than the agency, to work out compliance with the broad statutory mandate, injecting the judge into day-to-day agency management. . . . The prospect of pervasive oversight by
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federal courts over the manner and pace of agency compliance with such congressional directives is not contemplated by the APA.
Id. at 66-67 (citations and internal punctuation omitted).
Before the Supreme Court decided SUWA in 2004, some courts reviewing claims of
agency inaction permitted claims under 42 U.S.C. § 3608(e)(5) to proceed even if a plaintiff did
not identify a discrete agency action that the agency was explicitly required to take. See, e.g.,
NAACP v. HUD, 817 F.2d 149, 160-61 (1st Cir. 1987) (Breyer, J.) (asserting that a court
applying APA § 706(1) “can compel an official to exercise his discretion where he has obviously
failed or refused to do so”) (citation omitted). This position is no longer tenable. As noted
above, the unanimous Supreme Court opinion in SUWA (which Justice Breyer joined), explained
that if the relevant statutory provision provides the agency with discretion regarding the range of
actions it may take, an APA claim cannot lie for agency inaction. Rather, “§ 706(1) [of the APA]
empowers a court only to compel an agency to perform a ministerial or non-discretionary act, or
to take action upon a matter, without directing how it shall act.” SUWA, 542 U.S. at 64 (emphasis added).14
As noted above, plaintiffs do not allege that HUD has failed to perform a particular
ministerial act. Plaintiffs’ only allegations against HUD are that: (i) the LRA “proposed and
14 For this reason, the unpublished decision in M&T Mortgage Corp. v. White, 2006 WL 47467 (E.D.N.Y. 2006), in which the Court relied on the First Circuit’s NAACP opinion, is not persuasive. Moreover, Darst-Webbe Tenant Ass’n Bd. v. St. Louis Hous. Auth., 417 F.3d 898, 909 (8th Cir. 2005) (affirming the dismissal of an action alleging violations of § 3608(e)(5)), does not have any precedential value. The Darst-Webbe panel merely addressed its earlier order (which pre-dated SUWA) that the district court, on remand, determine whether HUD had assessed “those aspects of its proposed course of action that would further limit the supply of genuinely open housing” and assessed “those aspects of the proposed course of action that would increase that supply.” Id. at 907. In so doing, the court found that its standard of review was merely “to assess whether HUD exercised its broad authority in a manner that demonstrates consideration of, and an effort to achieve, fair housing opportunities.” Id. However, because the court’s holding addressed an order that pre-dated SUWA, its finding is sui generis. To the extent DarstWebbe is in any way inconsistent with SUWA, this Court should simply disregard the decision.
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developed” the Road Home program, “in consultation with HUD,” (ii) HUD “approved the Road Home grant formula,” and (iii) the LRA administers the Road Home program “subject to ongoing oversight and continuing approval of HUD.” Compl. ¶¶ 49-51. However:
a. Plaintiffs’ challenge to HUD’s informal consultation is not final agency action. Plaintiffs do not allege and could not show, that HUD’s “consultation” with Louisiana constituted final agency action reviewable under the APA. 5 U.S.C.§ 702. See Ctr. for Law & Educ. v. Dep’t of Educ., 396 F.3d 1152, 1165 (D.C. Cir. 2005) (“APA . . . bars review prior to final agency action.”); Indep. Petroleum Ass’n of Am. v. Babbitt, 235 F.3d 588, 594 (D.C. Cir. 2001) (“If the agency action is not final, the court . . . cannot reach the merits of the dispute.”)
b. Plaintiffs’ challenge to HUD’s approval of Louisiana’s Road Home program is moot. For the reasons set forth above in Section IV(B), supra, plaintiffs cannot maintain their challenge to HUD’s approval and continuing oversight of Louisiana’s use of disaster recovery CDBG funds that HUD had already obligated to the state to administer the Road Home homeowners program, as that challenge is moot. City of Houston, 24 F.3d at 1427.
c. HUD’s oversight of unobligated funds for the Road Home program is not reviewable under APA § 706(1). Plaintiffs’ remaining claims potentially subject to review under the APA are that, in light of its statutory obligations to further fair housing, HUD should not approve the obligation of remaining funds to the LRA. Compl. ¶¶ 50-51. These challenges would fall under 5 U.S.C. § 706(1), because all they allege is that HUD is failing to exercise its statutory authority. However, in alleging that HUD is violating §§ 3608(d) and (e)(5) and § 5304(b)(2), plaintiffs are making almost the identical claims that the Supreme Court rejected in SUWA. Like the plaintiffs in SUWA, plaintiffs here are claiming that HUD’s duties under §§ 3608(d) and (e)(5) and § 5304(b)(2) require HUD, in exercising its authority to obligate the remaining funds, to stop the LRA’s Road Home compensation and incentives grants for homeowners in its current form. But
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in making these allegations, plaintiffs here, just like the plaintiffs in SUWA, do not identify a circumscribed, discrete agency action that §§ 3608(d) and (e)(5) and § 5304(b)(2) require HUD to take. Cf. Alliance to Save Mattaponi v. U.S. Army Corps of Eng’rs, 515 F. Supp. 2d 1, 9-10 (D.D.C. 2007) (finding that, because 33 U.S.C. § 1344(c) grants the EPA a discrete, discretionary power to veto Army Corps Clean Water Act permitting decisions, EPA’s alleged failure to exercise that veto power was reviewable under the APA). Rather, plaintiffs’ complaint makes only the vaguest allegations that, in continuing to oversee Louisiana’s Road Home program, HUD has failed to affirmatively further its fair housing obligations under §§ 3608(d) and (e)(5) and § 5304(b)(2). Compl. ¶¶ 76-77. Accordingly, in the present case, as in SUWA, the statutes under which plaintiffs have filed suit are “mandatory as to the object to be achieved, but [they] leave[ the agency] a great deal of discretion in deciding how to achieve it.” Id. at 66. So much discretion, in fact, that HUD’s actions are unreviewable by a court, and the APA does not provide a waiver of immunity in this instance. In sum, plaintiffs cannot maintain their claims that HUD violated its obligations under §§ 3608(d) and (e)(5) or § 5304(b)(2). Because APA relief would not be available here under APA § 706(1), these claims should be dismissed against HUD.
E. The Complaint Should Be Dismissed Because Plaintiffs Fail to State a Claim on Which Relief May Be Granted 1. Plaintiffs’ Disparate Impact Against HUD Should Be Dismissed Because No Prohibited Discrimination Is Alleged
Count One, ¶¶ 74-75, alleges that defendants violated 42 U.S.C. § 3604(a), and 42 U.S.C. § 3605(a). But plaintiffs fail to plead facts that would establish a violation of these provisions. Section 3604(a) provides, in relevant part, that it is unlawful:
To refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or
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national origin. 42 U.S.C. § 3604(a). Section 3605 provides, in relevant part, that it is unlawful:
for any person or other entity whose business includes engaging in residential real estate transactions to discriminate against any person in making available such a transaction, or in the terms of conditions of such transaction, because or race, color, religion, sex, handicap, familial statute, or national origin. 42 U.S.C. § 3605(a) (emphasis added). To establish a prima facie case of a violation of these provisions, plaintiffs must allege facts showing that HUD’s actions produced a discriminatory effect against a protected class. 2922 Sherman Ave. Tenants’ Ass’n v. DC, 444 F.3d 673, 680 (D.C. Cir. 2006). See, e.g., Huntington Branch, NAACP v. Town of Huntington, 844 F.2d 926, 934 (2d Cir. 1988) (“Under disparate impact analysis, as other circuits have recognized, a prima facie case is established by showing that the challenged practice of the defendant actually or predictably results in racial discrimination; in other words that it has a discriminatory effect.”). See also U.S. v. City of Black Jack, 508 F.2d 1179, 1184 (8th Cir. 1975) (same). At the motion to dismiss stage, plaintiffs can establish a prima facie case of disparate impact by alleging “that a challenged housing practice or policy has caused a statistically significant disparate effect on a protected class.” Graoch Assoc. v. Louisville/Jefferson Cty. Metro Human Relations Comm., 508 F.3d 366, 390 (6th Cir. 2007). Count One alleges that HUD’s approval of the LRA’s Road Home program disparately impacted African-Americans in violation of the FHA. See Compl. ¶¶ 74-75. However, plaintiffs fail to allege a prima facie case for disparate impact discrimination on the basis of race or color. Plaintiffs allege that “[t]he requirement that Road Home grant awards not exceed the pre-storm value of the home (where the pre-storm value is less than the cost of damage) has a discriminatory disparate impact on African Americans.” Compl. ¶ 52. Plaintiffs further allege that “nearly 80% of homes owned by African Americans in New Orleans were valued at less than
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$100,000, while only about 33% of homes owned by whites were valued at less than $100,000.” Id. ¶ 54. Plaintiffs also allege that “approximately 93% of homes owned by African Americans in New Orleans were valued at less than $150,000, compared to 55% of homes owned by white homeowners.” Id.
However, plaintiffs fail to allege that African American homeowners experience a disparate impact in the amount they allegedly received under the Road Home grant award as compared to white homeowners. Compl. passim. Although the program, to date, has served more 140,000 homeowners, plaintiffs fail to allege statistically-significant disparities in the amounts of the Road Home grant awards that they have received. Thus, plaintiffs fail to allege a violation of the FHA. Cf. Mountain Side Mobile Estates P’ship v. HUD, 56 F.3d 1243, 1253 (10th Cir. 1995) (“Although discriminatory effect is generally shown by statistical evidence, any statistical analysis must involve the appropriate comparables.”).
Plaintiffs also allege that “comparable” homes have lower values in African American communities than in white communities. Compl. ¶ 53. However, plaintiffs do not allege any statistical disparity in support of this allegation. Id. passim. Nor do they allege that the appraisals for their home values are the result of different methods used for different races or different neighborhoods. Id. To the contrary, Louisiana allows homeowners to provide their own pre-storm appraisals or to provide a post-storm appraisal from a licensed and certified Louisiana appraiser setting out the property’s pre-storm value. See http://www.road2la.org/homeowner/default.htm. Not surprisingly, plaintiffs have not alleged that any lower value of their homes is the result of HUD’s actions in approving or overseeing the LRA’s Road Home program. Thus, this allegation fails to allege a violation of the FHA against HUD.
Plaintiffs also allege that African American recipients of Road Home grants are more
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Case 1:08-cv-01938-HHK Document 22 Filed 03/06/09 Page 54 of 57
likely than white grantees to have a gap between their rebuilding resources and the cost to rebuild. Compl. ¶¶ 56, 58. Again, plaintiffs fail to allege any statistical disparity to support this allegation. Compl. passim. Moreover, for the reasons just stated, plaintiffs’ allegations belie the claim that this gap produces a disparate impact based on race. Nor do plaintiffs allege statistically-significant disparities in the awarding of the Additional Compensation Grants of up to $50,000 for low- and moderate-income homeowners, the Individual Mitigation Measures, or the Elevation Allowances to African American homeowners. Id.
Finally, plaintiffs fail to allege that HUD, as opposed to the LRA, violated § 3605. In order to state a prima facie claim under this section, plaintiffs must plead that they attempted to engage in real estate-related transactions, that defendant refused to transact business with them despite their qualifications, and that defendant continued to engage in that type of transaction with other parties with similar qualifications. Mich. Protection & Advocacy Serv., Inc. v. Babin, 18 F.3d 337 (6th Cir. 1994). Plaintiffs do not allege, nor could they allege, that HUD engaged in residential real estate transactions with anyone. See Compl. passim. Thus, plaintiffs fail to state a claim for relief under 42 U.S.C. § 3605 against HUD.
2. Plaintiffs’ Remaining Claims Against HUD Should Be Dismissed Count One, ¶ 76, and Count Two allege that HUD failed to affirmatively further fair housing in violation of 42 U.S.C. §§ 3608(d) and (e)(5) and in violation of 42 U.S.C. § 5304(b)(2). Compl. ¶¶ 76-77. However, plaintiffs fail to plead facts that allege HUD has violated these provisions. As noted above, sections 3608(d) and (e)(5) requires HUD to “administer [its] programs and activities relating to housing and urban development . . . in a manner affirmatively to further the purposes of this subchapter” and to “administer the programs and activities relating to housing and urban development in a manner affirmatively to further [its fair housing] policies.”
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42 U.S.C. §§ 3608(d) and (e)(5). By contrast, § 5304(b)(2) provides that a grant “shall be made only if the grantee certifies to the satisfaction of [HUD] that . . . the grantee will affirmatively further fair housing.” Id. § 5304(b)(2). First, for the reasons set forth above in Section IV(D)(2), supra, plaintiffs do not allege that HUD failed to take a discrete action that either §§ 3608(d) and (e)(5) or § 5304(b)(2) required HUD to take. Compl. passim. See McGrath v. HUD, 722 F. Supp. 902, 908 (D. Mass. 1989) (Section 3608(e)(5) “does not mandate specific actions or remedial plans which HUD should undertake”). Accordingly, for the reasons set forth above, plaintiffs have failed to state a claim under Count One, ¶ 76, of the Complaint.
Second, as noted above, § 3608(d) and (e)(5) require HUD to affirmatively further fair housing. Id. Plaintiffs only allegations about HUD are that: (i) the LRA “proposed and developed” the Road Home program, “in consultation with HUD,” (ii) HUD “approved the Road Home grant formula,” and (iii) the LRA administers the Road Home program “subject to ongoing oversight and continuing approval of HUD.” Compl. ¶¶ 49-51. Because, for the reasons set forth above in Section IV(D), supra, plaintiffs fail to state a claim that HUD violated any other provision of the FHA, plaintiffs have failed to make sufficient allegations that HUD failed to further fair housing. Plaintiffs have not alleged that HUD failed to consider the racial impact of the LRA’s Road Home program. Compl. passim. Cf. Pleune, 765 F. Supp. at 47. Rather, the HCDA requires the grantee to certify that it will affirmatively further fair housing in order to obtain federal funds. 42 U.S.C. § 5304(b)(2). Plaintiffs do not allege that Louisiana failed to submit such a certification. Compl. passim. Accordingly, plaintiffs have failed to state a claim that HUD has violated § 3608(d) and (e)(5).
Third, plaintiffs have failed to allege that HUD violated § 5304(b)(2). As noted above, this section provides that a grant “shall be made only if the grantee certifies to the satisfaction of [HUD] that . . . the grantee will affirmatively further fair housing.” Id. § 5304(b)(2). As just
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explained, plaintiffs do not allege that the LRA failed to certify that it would affirmatively further fair housing. See Compl. passim.
In sum, plaintiffs fail to state a claim on which relief may be granted against HUD. V. CONCLUSION
For the reasons set forth above, this Court should grant HUD’s Motion to Dismiss for Lack of Jurisdiction and for Failure to State a Claim Upon Which Relief May be Granted. Dated: March 6, 2009
Respectfully submitted, MICHAEL F. HERTZ Acting Assistant Attorney General, Civil Division JEFFREY A. TAYLOR U.S. Attorney for the District of Columbia /s/ James D. Todd, Jr. MICHAEL SITCOV Assistant Branch Director JAMES D. TODD, JR. Senior Counsel U.S. DEPARTMENT OF JUSTICE Civil Division, Federal Programs Branch 20 Massachusetts Avenue N.W. Washington, DC 20001 (202) 514-3378 (202) 616-8470 (fax) james.todd@usdoj.gov Attorneys for Defendant U.S. Department of Housing and Urban Development
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Case 1:08-cv-01938-HHK Document 22 Filed 03/06/09 Page 57 of 57

CERTIFICATE OF SERVICE

I hereby certify that on March 6, 2009, a copy of the foregoing document was filed

electronically via the Court’s ECF system, through which a notice of the filing will be sent to:

Joseph Marc Sellers, Esq. Daniel Tenny, Esq.
Llezlie Lloren Green, Esq. COHEN MILSTEIN SELLERS & TOLL PLLC
1100 New York Avenue, NW, Suite 500 Washington , DC 20005-3934 (202) 408-4600 jsellers@cohenmilstein.com dtenny@cohenmilstein.com lgreen@cohenmilstein.com
Damon T. Hewitt, Esq. Debo P. Adegbile, Esq. Matthew Colangelo, Esq. ReNika C. Moore, Esq. NAACP LEGAL DEFENSE & EDUCATIONAL FUND, INC. 99 Hudson Street, 16th Floor New York , NY 10013
(212) 965-2200 dhewitt@naacpldf.org dadegbile@naacpldf.org mcolangelo@naacpldf.org rmoore@naacpldf.org

Timothy E. Heffernan, Esq. WATT, TIEDER, HOFFAR &
FITZGERALD, L.L.P. 8405 Greensboro Drive, Suite 100
McLean, Virginia 22102 (703) 749-1000
theffern@WTHF.com
A.J. Krouse, Esq. Renee Culotta, Esq. Suzanne M. Risey, Esq.
FRILOT L.L.C. 1100 Poydras St., 36th Floor
New Orleans, LA 70163 (504) 599-8016
akrouse@frilot.com rculotta@frilot.com srisey@frilot.com
Attorneys for Defendant, Paul Rainwater, Executive Director of the Louisiana Recovery Authority

M. Lucia Blacksher, Esq. GREATER NEW ORLEANS FAIR HOUSING
ACTION CENTER 228 St. Charles Avenue, Suite 1035
New Orleans , LA 70130 (504) 208-5050
lblacksher@gnofairhousing.org

Attorneys for Plaintiffs

/s/ James D. Todd, Jr. JAMES D. TODD, JR.

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Case 1:08-cv-01938-HHK Document 22-1 Filed 03/06/09 Page 1 of 11

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING )

ACTION CENTER, et al.,

)

)

Plaintiffs,

)

)

v.

)

)

U.S. DEPARTMENT OF HOUSING AND

)

URBAN DEVELOPMENT, et al.,

)

)

Defendants.

)

No. 1:08-cv-1938-HHK

DECLARATION OF JESSIE HANDFORTH KOME SUBMITTED IN SUPPORT OF DEFENDANT U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

I, Jessie Handforth Kome, hereby declare the following: 1. I am the Deputy Director, Office of Block Grant Assistance (“OBGA”), Office of
Community Planning and Development (“CPD”), U.S. Department of Housing and Urban Development (“HUD”). I have held this position since February 2009. From August 2007 to February 2009, I was the Director, Disaster Recovery and Special Issues Division (“DRSI”), in the OBGA. In my DRSI capacity, my duties included general oversight responsibility for grants made from emergency supplemental appropriations of Community Development Block Grant (“CDBG”) funds for recovery from certain Presidentially-declared disasters. Prior to this, I was a Community Planning and Development Specialist in DRSI. In that capacity, I was responsible for drafting program technical information and requirements, training grantees, and administering the reporting system for disaster recovery grants. I submit this declaration in support of Defendant HUD’s Motion to Dismiss for Lack of Jurisdiction in the above-captioned action. I base this declaration on personal knowledge and on information obtained in my official

Case 1:08-cv-01938-HHK Document 22-1 Filed 03/06/09 Page 2 of 11
capacities as Director of the DRSI and as a Community Planning and Development Specialist at DRSI.
The Housing and Community Development Act of 1974 2. The Housing and Community Development Act of 1974 (“HCDA” or “Act”), as amended, 42 U.S.C. § 5301 et seq., seeks to develop viable urban communities by providing decent housing, a suitable living environment, and expanding economic opportunities, principally for persons of low and moderate income. The statute authorizes HUD to make grants, known as Community Development Block Grants (“CDBG”) to states, tribes, and local governments to carry out activities in accordance with provisions of the Act, and sets out 25 broad categories of activities for which grantees may use funds. The Act requires that not less than 70 percent of grant funds be used for the benefit of low- and moderate-income persons. The Act is a federal block grant statute, under which the day-to-day administration of the federal program, including the actual expenditure of federal funds, is delegated to state and local authorities. 3. The HCDA distributes funds appropriated by Congress through recipients outside the federal government. HUD’s role is confined to ensuring that the state’s interpretation of the statutory and regulatory requirements “are not plainly inconsistent with the Act.” 24 C.F.R. § 570.480(c) (giving “maximum feasible deference” to a state’s interpretation of these requirements). 4. To obtain federal funds, state or local authorities must develop a five-year consolidated plan that assesses housing and homeless needs, analyzes the states’ or local authorities’ housing markets, sets forth their strategic plans for meeting priority needs, and sets out action plans. The action plans, in turn, must include required certifications that the
2

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applicants will comply with the requirements of the program. 24 C.F.R. § 570.485, id. Part 91, Subparts C & D.
5. HUD’s regulations implementing the HCDA require grantees to certify that their projected use of funds “will give maximum feasible priority to activities . . .[(i)] of benefit to low- and moderate-income families, . . .[(ii) that seek] elimination of slums and blight, [or (iii) that seek] to meet other community development needs having a particular urgency because existing conditions pose a serious threat to health and welfare.” 24 C.F.R. § 570.483. The regulations provide that an activity generally will be considered to meet the national objective of benefit to low and moderate income persons if: (i) the activity benefits an area that is at least 51 percent low and moderate income; (ii) the activity benefits a limited low-and moderate-income clientele, including services or facilities for the homeless, abused children, the elderly, or migrant farm workers; (iii) the activity provides or improves permanent housing to be occupied by a low- or moderate-income person; or (iv) the activity is designed to create permanent jobs where at least 51 percent of the jobs will be held by or made available to low- and moderateincome persons. Id.
6. A CDBG grantee is also responsible for meeting all program requirements. Each activity must be an eligible one as defined by the statute, meet a national objective, and have been through citizen participation as part of the action plan development and submission process. Grantees must be able to account for all grant funds, comply with all reporting requirements, perform environmental reviews, and meet all applicable relocation, fair housing, equal opportunity, and labor standards. 24 C.F.R. § 570.487-491.
7. After developing proposed plans, the applicants must publish the plans for citizen comment. 24 C.F.R. § 91.115; id. § 91.320. The applicants then submit the plan, summaries of citizen comments, and signed certifications to HUD. Id; see also id. § 91.325.
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8. A grantee may request and receive technical assistance from HUD program staff at any time. HUD’s technical assistance typically involves consultation with the grantee to determine the grantee’s objectives and its proposed program designs. HUD then provides advice, training, or program models that will ensure the grantee will be able to comply with CDBG program requirements while carrying out its purposes and implementing its programs.
9. HUD’s review of the applicant’s plan is limited. 24 C.F.R. § 91.500. HUD has 45 days to review the plan, and the plan is deemed approved unless HUD notifies the jurisdiction within the 45-day period that the plan is disapproved. Id. § 91.500(a). HUD only may disapprove a plan if it is inconsistent with the purposes of the Act, is substantially incomplete, the certifications are not acceptable, or if HUD determines that the applicant has not complied with the CDBG requirements. Id. § 91.500(b). The regulations do not permit HUD to disapprove an application based on the grantee’s choice of eligible activities. Id.
10. In order to ensure that CDBG funds are not misused, the HCDA authorizes HUD to audit the records of HCDA programs, and to recover improperly expended funds. HUD may take corrective actions ranging from issuing a warning letter to instituting collections procedures to recover improperly expended funds. 24 C.F.R. § 570.495. After reasonable notice and opportunity for a hearing, HUD may terminate, reduce, or limit the availability of payments to a grant recipient for failure to substantially comply with the provisions of the Act. 24 C.F.R. § 570.496(b), (d). The statute further authorizes the Department of Justice, upon a referral from HUD, to bring a civil action to recover misspent or misused CDBG funds. 24 C.F.R. § 570.496(c).
Pub. L. Nos. 109-148, 109-234, and 110-116 11. In response to the 2005 Hurricanes Katrina, Rita, and Wilma, Congress passed three special appropriations to provide disaster recovery CDBG funds to affected areas in five
4

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states, including Louisiana. See Pub. L. No. 109-148, 119 Stat. 2779 (Dec. 30, 2005) (the “first appropriation”); Pub. L. No. 109-234, 120 Stat. 418 (June 15, 2006) (the “second appropriation”); and Pub. L. No. 110-116, 121 Stat. 1343 (Nov. 13, 2007) (the “third appropriation”). The first appropriation provided $11,500,000,000 in CDBG funds to the affected states, which Congress directed to “be administered through an entity . . . designated by . . . each State.” Pub. L. 109-148. This appropriation required HUD to “waive, or specify alternative requirements for, any provision of any statute or regulation[, including the HCDA and its implementing regulations] that [HUD] administers in connection with the obligation by [HUD] or the use by the recipient of these funds or guarantees,” except for requirements related to fair housing, nondiscrimination, labor standards, and the environment, “upon a request by the State that such waiver is required to facilitate the use of such funds or guarantees, and a finding by the Secretary that such waiver would not be inconsistent with the overall purpose of the statute, as modified.” Id. The first appropriation also authorized HUD to “waive the requirement [of the HCDA] that activities benefit persons of low and moderate income, except that at least 50 percent of the funds made available under this heading must benefit primarily persons of low and moderate income unless [HUD] otherwise makes a finding of compelling need.” Id. The appropriation required HUD to “publish in the Federal Register any waiver of any statute or regulation.” Id. The appropriation also provided that it would not lapse. Id. (providing that the funds will “remain available until expended.”). Finally, the appropriation required, prior to the obligation of these funds to each state, that the state submit a plan to HUD “detailing the proposed use of all funds, including criteria for eligibility and how the use of these funds will address long-term recovery and restoration of infrastructure.” Id.
12. The second appropriation provided an additional $5,200,000,000 in CDBG funds to the affected states and authorized (although it did not require) HUD to make these same
5

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statutory and regulatory waivers authorized by the first appropriation. Pub. L. No. 109-234. This appropriation earmarked $1,112,650,000 for affordable rental housing programs. Id. The remainder of the second appropriation was substantially identical to the first. The third appropriation provided an additional $3,000,000,000 “solely for the purpose of covering costs associated with otherwise uncompensated but eligible claims that were filed on or before July 31, 2007, under the Road Home program administered by the State in accordance with plans approved by the Secretary.” Pub. L. No. 110-116.
HUD Waivers of CDBG Program Requirements and Louisiana’s Action Plan for CDBG Disaster Recovery Funds 13. On February 13, 2006, HUD published a Federal Register notice implementing the requirements of the first appropriation. 71 Fed. Reg. 7666 (Feb. 13, 2006). HUD allocated $6,210,000,000 of the first appropriation to Louisiana. As directed by Congress in the first appropriation, HUD waived many standard certifications of the CDBG program, including the requirement that 70 percent of funds be used for activities that benefit low- and moderate-income persons, in order “to give grantees even greater flexibility to carry out recovery activities within the confines of the CDBG program national objectives.” 71 Fed. Reg. at 7667. In their place, HUD substituted alternative certifications. Pursuant to the first appropriation, HUD required the states to certify that activities funded “be for necessary expenses related to disaster relief, longterm recovery, and restoration of infrastructure in the most impacted and distressed areas related to the consequences of the hurricanes.” Id. at 7670. As also directed by the first appropriation, HUD required that, overall, at least 50 percent of disaster recovery grant funds be used for activities that principally benefit low- and moderate-income persons. Id. at 7667; see also id. at 7668. As further directed by the first appropriation, HUD still required the state to certify that it will affirmatively further fair housing, “which means that it will conduct an analysis to identify
6

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impediments to fair housing choice within the state, take appropriate actions to overcome the effects of any impediments identified through that analysis, and maintain records reflecting the analysis and actions in this regard.” Id. at 7671. HUD did not waive the CDBG program’s financial accountability requirements.
14. Louisiana submitted its first action plan in early 2006 and made all required alternative certifications at that time, including the certification that the state would affirmatively further fair housing. As is required by the CDBG program, the state already had produced a prestorm Analysis and Impediments (“AI”) to fair housing. HUD advised Louisiana to review its AI post-storm and make any updates the state deemed necessary. Louisiana later made these same certifications to obtain funds from the second and third appropriations.
Louisiana’s Road Home Program and HUD’s Role in Reviewing, Approving and Monitoring the Program 15. On May 12, 2006, Louisiana submitted Amendment 1 to its original action plan, known as the Road Home Program. The program consists of: (i) homeowner compensation and incentives programs; (ii) workforce and affordable rental housing programs; (iii) homeless housing programs; and, (iv) developer incentive programs. The Road Home program is administered by the State of Louisiana through the Louisiana Office of Community Development and the Louisiana Recovery Authority and is funded by HUD through the CDBG program. The State of Louisiana is responsible for the implementation, design, and administration of the Road Home program in conformance with the applicable CDBG program requirements set by HUD. 16. In designing the Road Home homeowner compensation and incentives program, Louisiana requested, and HUD provided, some technical assistance. The state evaluated the relative costs of implementing a housing rehabilitation and reconstruction program as compared to implementing a homeowner compensation and incentives program. State staff called HUD
7

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staff several times a week throughout 2006 regarding the details of the homeowner program design. HUD’s guidance focused on how the activity could meet CDBG national objectives and how the state could manage the program to account for all program funds while meeting the disaster recovery purpose of the supplemental appropriations. HUD did not make any of the state’s program decisions or set any funding strategies in the Road Home Program. Most of HUD’s technical assistance was provided by telephone.
17. Part of the technical assistance HUD provided to state staff concerned sound financial management principles. Financial management principles guide the grantee in the design of a program that provides the smallest amount of resources necessary to achieve a desired result. HUD explained to state staff that, for example, the compensation and incentives program launched by the state of New York following September 11, 2001, provided no more than $14,500 to any household and achieved success in meeting its goals. The city of Grand Forks, North Dakota, provided $5,000 loan payments as incentives to homeowners who remained in the city for disaster recovery after floods in 1997 caused significant damage to the city and its residences.
18. As it developed the Road Home program, Louisiana ultimately chose to provide compensation and incentive grants to eligible homeowners affected by Hurricanes Rita or Katrina of up to $150,000. Louisiana decided to base the amount of the compensation and incentives grant on the lower of the pre-storm, fair-market value of the home, or the cost to repair the home.
19. In developing the Road Home program, the state considered basing the compensation and incentives payment amounts on the tax valuations of homes. As part of the technical assistance HUD provided to the state, HUD stated its concern about using tax values as part of the basis for the calculation of the homeowner payment amount because the tax valuation
8

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system(s) in Louisiana, and in New Orleans Parish in particular, were unreliable, resulting in vastly different values for similar homes, with no rational basis. The state ultimately chose not to use tax values as a basis for providing compensation and incentives grants.
20. Although the state chose to base the calculation of the homeowner compensation and incentives grant on either the pre-storm property value or the cost of storm damage, compensation and incentives under the Road Home program are not actually for storm damage. The Road Home program provides compensation and incentives for the homeowner’s agreement to meet certain recovery conditions, such as remaining in a certain geographic area, maintaining flood insurance on a dwelling, and meeting modern building codes within a prescribed period of time.
21. Louisiana also provides Additional Compensation Grants of up to $50,000 for certain homeowners. Total compensation and incentive grants are still capped at $150,000. Louisiana offers Additional Compensation and incentives Grant to applicants with household incomes 80 percent and below the median income in the parish where the house was located. In addition to the Additional Compensation Grants, Louisiana provides compensation and incentives grants to homeowners via Individual Mitigation Measures and Elevation Incentives. Individual Mitigation Measures provide incentive grants to homeowners to install home “hardening” features that will protect homes from future storm damage, including storm shutters and roof tie downs. Elevation Incentives are grants to elevate site-built homes and mobile homes to meet FEMA’s current Advisory Base Flood Elevation or Base Flood Elevation levels to protect against future floods.
22. As part of the technical assistance HUD provided to Louisiana, HUD reviewed the Road Home program’s ability to help Louisiana meet the overall benefit requirements of the special appropriations. As noted above, the special appropriations’ overall benefit requirement is
9

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that 50 percent of the state’s disaster recovery CDBG expenditures will support activities that benefit low- and moderate-income persons. To meet that requirement, Louisiana can count homeowner payments to low- and moderate-income households and rental projects that house low- and moderate-income tenants toward the overall requirement, but it cannot count payments to above-income homeowners or for above-income rental projects. HUD determined that Louisiana’s inclusion of the Additional Compensation Grant, Individual Mitigation Measures, and Elevation Allowances could help the state meet the overall benefit requirement.
23. On June 14, 2006, HUD published a Federal Register notice granting additional waivers to Louisiana and approving Louisiana’s Road Home program. 71 Fed. Reg. 34451 (June 14, 2006). Finding that additional waivers and alternative requirements are not inconsistent with the overall purpose of the HCDA, HUD waived statutory and regulatory requirements to allow Louisiana to provide compensation to homeowners whose homes were damaged, “if the homeowners agree to meet the stipulations of the published program design.” Id. HUD also allowed Louisiana to “offer disaster recovery or mitigation housing incentives to promote housing development or resettlement in particular geographic areas.” Id. at 34453. In addition, HUD approved Louisiana’s use of disaster recovery CDBG funds for, among other things, (i) government buildings; (ii) special economic development job-retention activities; (iii) down payment assistance for new construction; (iv) support of the tourism industry; (v) relocation assistance; and (vi) the one-for-one replacement requirement of housing units damaged by disaster. Id. at 34452-53.
24. On March 6, 2007, HUD provided additional waivers that allowed Louisiana to use CDBG disaster recovery funds for, among other things, (i) research, commercialization, and educational enhancement; (ii) operating subsidies for affordable rental housing; and (iii) rental and utility payment assistance. 72 Fed. Reg. 10014 (Mar. 6, 2007).
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Case 1:08-cv-01938-HHK Document 22-2 Filed 03/06/09 Page 1 of 1

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING )

ACTION CENTER, et al.,

)

)

Plaintiffs,

)

)

v.

)

)

U.S. DEPARTMENT OF HOUSING AND

)

URBAN DEVELOPMENT, et al.,

)

)

Defendants.

)

No. 1:08-cv-1938-HHK

ORDER GRANTING DEFENDANT U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT’S MOTION TO DISMISS

Before this Court is the motion to dismiss for lack of jurisdiction and for failure to state a

claim on which relief can be granted of defendant, the U.S. Department of Housing and Urban

Development (“HUD”). For the reasons set forth in HUD’s statement of points and authorities

submitted along with its motion, and the entire record herein, it is hereby ORDERED that

HUD’s Motion is GRANTED. It is FURTHER ORDERED that plaintiffs’ complaint against

HUD is DISMISSED for lack of jurisdiction.

Dated: _______________

/s/ Henry H. Kennedy HENRY H. KENNEDY United States District Court Judge

 
 Case 1:08-cv-01938-HHK Document 28 Filed 05/05/09 Page 1 of 4

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING )

ACTION CENTER, et al.

)

)

Plaintiffs,

)

)

v.

)

)

U.S. DEPARTMENT OF HOUSING AND

)

URBAN DEVELOPMENT, et al.

)

)

Defendants.

)

No. 1:08-cv-1938-HHK

DEFENDANT PAUL RAINWATER’S MOTION TO DISMISS AND MOTION TO TRANSFER

Pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6) and Local Rule 7, Defendant, Paul

Rainwater, moves this Court to dismiss with prejudice Plaintiffs’ Complaint for lack of subject

matter jurisdiction and for failure to state a claim upon which relief can be granted.

In addition, pursuant to 28 U.S.C. § 1404(a), Defendant, Paul Rainwater, moves this

Court to transfer of this matter to the United States District Court for the Middle District of

Louisiana, located in Baton Rouge, Louisiana, or alternatively, the United States District Court

for the Eastern District of Louisiana, located in New Orleans, Louisiana. In accordance with

Local Rule 7(m), counsel for Defendant has discussed the motion to transfer with opposing

counsel by telephone. Accordingly, Plaintiffs do not consent to the motion to transfer and U.S.

Department of Housing and Urban Development takes no position regarding the motion to

transfer at this time.

A memorandum in support setting forth Defendant’s statement of points and authorities

in support of Defendant’s Motion to Dismiss and Motion to Transfer is attached. Defendant has

also attached a proposed order for each motion presented herein.

190370-1

Case 1:08-cv-01938-HHK Document 28 Filed 05/05/09 Page 2 of 4
Respectfully submitted, /s/Renee Culotta A.J. KROUSE (La. Bar #14426) RENEE CULOTTA (La. Bar #24436) SUZANNE M. RISEY (La. Bar #25488) FRILOT L.L.C. 1100 Poydras Street, 37th Floor New Orleans, LA 70163 Telephone: (504) 599-8016 Facsimile: (504) 599-8116 akrouse@frilot.com rculotta@frilot.com srisey@frilot.com And TIMOTHY E. HEFFERNAN (D.C. Bar #422923) WATT, TIEDER, HOFFAR & FITZGERALD, L.L.P. 8405 Greensboro Drive, Suite 100 McLean, Virginia 22102 Telephone: (703) 749-1000 Facsimile: (703) 893-8028 theffern@WTHF.com
ATTORNEYS FOR PAUL RAINWATER, EXECUTIVE DIRECTOR OF THE LOUISIANA RECOVERY AUTHORITY
190370-1

Case 1:08-cv-01938-HHK Document 28 Filed 05/05/09 Page 3 of 4
CERTIFICATE OF SERVICE
I hereby certify that on May 5, 2009, a copy of the foregoing document was filed
electronically via the Court’s ECF system, through which a notice of the filing will be sent to:
Joseph Marc Sellers, Esq. Daniel Tenny, Esq.
Llezlie Lloren Green, Esq. Cohen Milstein Sellers & Toll, PLLC 1100 New York Avenue, NW, Suite 500
Washington, DC 20005-3934 (202) 408-4600
jsellers@cmht.com dtenny@cmht.com lgreen@cohenmilstein.com
Damon T. Hewitt, Esq. Debo P. Adegbile, Esq. Matthew Colangelo, Esq. ReNika C. Moore, Esq. NAACP Legal Defense & Educational Fund, Inc. 99 Hudson Street, 16th Floor New York, NY 10013
(212) 965-2200 dhewitt@naacpldf.org dadegbile@naacpldf.org mcolangelo@naacpldf.org rmoore@naacpldf.org
M. Lucia Blacksher, Esq. Greater New Orleans Fair Housing Action Center
228 St. Charles Avenue, Suite 1035 New Orleans, LA 70130 (504) 208-5050
lblacksher@gnofairhousing.org
Attorneys for Plaintiff
(continued)
190370-1

Case 1:08-cv-01938-HHK Document 28 Filed 05/05/09 Page 4 of 4 James D. Todd
U.S. Department of Justice 20 Massachusetts Ave., N.W.
Washington, D.C. 20001 (202) 514-3378
james.todd@usdoj.gov Attorney for U.S. Department of Housing and Urban Development
/s/ Renee Culotta
190370-1

Case 1:08-cv-01938-HHK Document 28-1 Filed 05/05/09 Page 1 of 54

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING )

ACTION CENTER, et al.

)

)

Plaintiffs,

)

)

v.

)

)

U.S. DEPARTMENT OF HOUSING AND

)

URBAN DEVELOPMENT, et al.

)

)

Defendants.

)

No. 1:08-cv-1938-HHK

DEFENDANT PAUL RAINWATER’S MEMORANDUM IN SUPPORT OF HIS MOTION TO DISMISS AND MOTION TO TRANSFER
TABLE OF CONTENTS
TABLE OF AUTHORITIES...................................................................................................iii
I. PRELIMINARY STATEMENT................................................................................... 1
II. THIS CASE AGAINST PAUL RAINWATER, IN HIS OFFICIAL CAPACITY AS THE EXECUTIVE DIRECTOR OF THE LOUISIANA RECOVERY AUTHORITY, IS BARRED BY THE ELEVENTH AMENDMENT.............................................................................................................. 3
A. Standard of Review for a Motion to Dismiss Under Fed.R.Civ.P. 12(b)(1) ............................................................................................................... 3
B. The State of Louisiana and The Louisiana Recovery Authority Are the Real Parties in Interest, Not Paul Rainwater.............................................. 4
C. Plaintiffs Fail to Allege a Waiver of Sovereign Immunity by Rainwater, the Louisiana Recovery Authority or the State of Louisiana ............................................................................................................ 7
D. The Ex parte Young Exception Is Inapplicable ............................................... 10
E. The Coeur d’Alene Exception Is Applicable.................................................... 16

i

Case 1:08-cv-01938-HHK Document 28-1 Filed 05/05/09 Page 2 of 54
III. PLAINTIFFS FAIL TO STATE A CLAIM UNDER THE FAIR HOUSING ACT.............................................................................................................................. 18 A. Standard for Motion to Dismiss Under Fed.R.Civ. P. 12(b)(6) ...................... 18 B. Option 1 of The Road Home’s Homeowner Assistance Program Provides Compensation Grants to Eligible Homeowners .............................. 19 C. Plaintiffs’ Claims Under the Fair Housing Act............................................... 24 D. The Fair Housing Act Does Not Apply to The Road Home Compensation Grant Program to Eligible Homeowners ............................... 25 E. Option 1 of the Homeowners Assistance Program Does Not Involve Residential Real Estate Transactions.............................................................. 30 F. Plaintiffs Fail to State a Claim Under the Fair Housing Act Because They Have Not Alleged Proper Comparators................................................ 31
IV. PLAINTIFFS HAVE NO CLAIM FOR REMEDIES UNDER THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974......................... 33
V. THIS CASE SHOULD BE TRANSFERRED TO LOUISIANA ............................... 38 A. Standard for Change of Venue Under 28 U.S.C. § 1404(a) ............................ 38 B. The Middle District of Louisiana is a More Convenient and Appropriate Venue for This Suit..................................................................... 39 C. This Action Could Have Been Brought in the Middle District of Louisiana .......................................................................................................... 40 D. Private Interests Favor Transfer of This Case to the Middle District of Louisiana .......................................................................................................... 41 E. Public Interests Favor Transfer to the Middle District of Louisiana ............ 43
ii

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TABLE OF AUTHORITIES
Federal Cases
2922 Sherman Avenue Tenants’ Assoc. v. District of Columbia, 444 F.3d 673 (D.C. Cir. 2006)................................................................................................... 32
Abusadeh v. Chertoff, 2007 WL 2111036 at *8 (D.D.C., July 23, 2007) ...................................................................... 43
Al-Ahmed v. Chertoff, 564 F.Supp.2d 16 (D.D.C. 2008)............................................................................................... 39
Anderson v. Zubieta, 180 F.3d 329 (D.C. Cir. 1999)................................................................................................... 32 *Atfab v. Gonzalez, 597 F.Supp.2d 76 (D.D.C. 2009)........................................................................38, 39, 41, 42, 43
Barr v. Clinton, 370 F.3d 1196 (D.C. Cir. 2004)................................................................................................. 19
Barton v. Summers, 293 F.3d 944 (6th Cir. 2002)...................................................................................................... 17
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ........................................................18-19
Board of Trustees of the University of Alabama v. Garrett, 531 U.S. 356, 121 S.Ct. 955, 148 L.Ed.2d 866 (2001)................................. ................................ 9
Botany Worsted Mills v. United States, 278 U.S. 282, 49 S.Ct. 129, 73 L.Ed. 379 (1929)....................................................................... 36
Brady Campaign to Prevent Gun Violence United with the Million Mom March v. Ashcroft, 339 F.Supp.2d 68 (D.C. Cir. 2004)...........................................................................................3-4
Cameron v. Thornburgh, 983 F.2d 253 (D.C. Cir. 1993)................................................................................................... 39
Chan v. City of New York, 1 F.3d 96 (2nd Cir. 1993) ........................................................................................................... 37 City of Kenosha v. Bruno, 412 U.S. 507, 93 S.Ct. 2222, 37 L. Ed. 2d 109 (1973)................................................................. 3
iii

Case 1:08-cv-01938-HHK Document 28-1 Filed 05/05/09 Page 4 of 54
*Clifton Terrace Associates, Ltd. v. United Technologies Corporation, 929 F.2d 714 (D.C. Cir. 1991)................................................................................................... 26
*Cox v. City of Dallas, 430 F.3d 734 (5th Cir. 2005), cert. denied, 547 U.S. 1130, 126 S.Ct. 2039, 164 L.Ed.2d 783 (2006)........................... 26, 27, 29
Cox v. City of Dallas, 2004 WL 370242, 6 (N.D. Tex. 2004)....................................................................................... 27
Cozzo v. Tangipahoa Parish Council-President Government, 279 F.3d 273 (5th Cir. 2002)........................................................................................................ 9
*Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974).......................................................... passim
Edwards v. Johnston County Health Dept., 885 F.2d 1215 (4th Cir. 1989) .................................................................................................... 27
*Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908)........................................ 5, 7, 10, 11, 13, 14, 18
Ficken v. Golden, 2005 WL 692019 at *5 (D.D.C. March 24, 2005)...................................................................... 26
Ford Motor Co. v. Department of the Treasury, 323 U.S. 459, 65 S.Ct. 347, 89 L.Ed 389 (1945), overruled on other grounds by, Lapides v. Board of Regents of the University System of South Georgia, 555 U.S. 613, 122 S.Ct. 1640, 152 L.Ed.2d 806 (2002)………………………...........5, 8
Gregory v. South Carolina Dept. of Transportation, 289 F.Supp.2d 721 (D.S.C. 2003), aff’d, 114 Fed. Appx. 87 (4th Cir. 2004), cert. denied, 544 U.S. 999, 125 S.Ct. 1932, 161 L.Ed.2d 773 (2005)........................................... 9
Groby v. Davis, 575 F.Supp.2d 762 (E.D. La. 2008)........................................................................................... 19
Guilford County Community Action Program, Inc. v. Wilson, 348 F.Supp.2d 548 (M.D.N.C. 2004) ........................................................................................ 37
Halprin v. The Prairie Single Family Homes of Dearborn Park Association, 388 F.3d 327 (7th Cir. 2004)................................................................................................ 28, 29
Hans v. Louisiana, 134 U.S. 1, 10 S. Ct. 504, 33 L.Ed. 842 (1890) ........................................................................... 8
iv

Case 1:08-cv-01938-HHK Document 28-1 Filed 05/05/09 Page 5 of 54
Hawaii v. Gordon, 373 U.S. 57, 83 S.Ct. 1052, 10 L.Ed.2d 191 (1963)..................................................................... 8
Herbert v. Nat’l. Acad. of Sciences, 974 F.2d 192 (D.C. Cir. 1992)..................................................................................................... 4
Hopkins v. Clemson Agricultural College of South Carolina, 221 U.S. 636, 31 S.Ct. 654, 55 L.Ed. 890 (1911)......................................................................... 5
Hunter v. Johanns, 517 F.Supp.2d 340 (D.D.C. 2007)............................................................................................. 42
*Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261, 117 S.Ct. 2028, 138 L.Ed.2d 438 (1997) ................................................. 11, 16, 17
In re Katrina Canal Breaches Consolidated Litigation, 2009 WL 546660, at *1 (E.D. La. March 5, 2009)..................................................................... 19
In re: Swine Flu Immunization Prods. Liab. Litig., 880 F.2d 1439 (D.C. Cir. 1989)................................................................................................... 4
Islamic Republic of Iran v. Boeing Co., 477 F.Supp. 142 (D.D.C. 1979)................................................................................................. 42
Jerome Stevens Pharmaceuticals, Inc. v. Food and Drug Admin., 402 F.3d 1249 (D.C. Cir. 2005)................................................................................................... 4
Jersey Heights Neighborhood Assn. v. Glendening, 174 F.3d 180 (4th Cir. 1999)................................................................................................ 27, 28
Kafack v. Primerica Life Ins. Co., 934 F.Supp. 3 (D.D.C. 1996) .................................................................................................... 42
Kelly v. Metropolitan County Bd. Of Education of Nashville and Davidson County, Tenn., 836 F.2d 986 (6th Cir. 1987)...................................................................................................... 17
Kowal v. MCI Communications Corp., 16 F.3d 1271 (D.C. Cir. 1994)................................................................................................... 19
Liban v. Churchey Group II, L.L.C., 305 F.Supp.2d 136 (D.D.C. 2004)............................................................................................. 43
Loughlin v. United States, 393 F.3d 155 (D.C. Cir. 2004)..................................................................................................... 3
Milliken v. Bradley,
v

Case 1:08-cv-01938-HHK Document 28-1 Filed 05/05/09 Page 6 of 54
433 U.S. 267, 97 S.Ct. 2749, 53 L.Ed.2d 745 (1977)................................................................. 12
Montgomery v. STG Int'l, Inc., 532 F.Supp.2d 29 (D.D.C. 2008)............................................................................................... 41
National Railroad Passenger Corp.v. National Ass’n of Railroad Passengers, 414 U.S. 453, 94 S.Ct. 690, 38 L.Ed.2d 646 (1974)................................................................... 35
Otay Mesa Property L.P. v. U.S. Department of Interior, 584 F.Supp.2d 122 (D.D.C. 2008)............................................................................................. 43
Papasan v. Allain, 478 U.S. 265, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986).................................................. 13, 14, 15
Payne v. United States Department of Housing and Urban Development, 551 F.Supp. 1113 (S.D. Ohio 1982) .......................................................................................... 36
Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984)......................................................8, 12, 18, 37
Pennsylvania Fed’n of Sportsmen’s Clubs, Inc. v. Hess, 297 F.3d 310 (3d Cir. 2002) ........................................................................................................ 9
*People’s Housing Development Corporation v. City of Poughkeepsie, 425 F.Supp. 482 (S.D. N.Y. 1976) ...........................................................................35, 36, 37, 38
Piper Aircraft Co. v. Reyno, 454 U.S. 235, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981)................................................................. 38
Quern v. Jordan, 440 U.S. 332, 99 S.Ct. 1139, 59 L.Ed.2d 358 (1979)................................................................. 12
Seminole Tribe of Florida v. Florida, 517 U.S. 44, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996)......................................................... 11, 18
Sinochem Int’l Co., Ltd. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 127 S.Ct. 1184, 167 L.Ed.2d 15 (2007)............................................................... 38
Southend Neighborhood Improvement Association v. St. Clair County, 743 F.2d 1207 (7th Cir. 1984) .................................................................................................... 28
Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988)................................................................. 38
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Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 100 S.Ct. 242, 62 L.Ed.2d 146 (1979)q................................................................. 38 United States v. Gaubert, 499 U.S. 315, 111 S.Ct. 1267, 113 L.Ed.2d 335 (1991) ............................................................... 4 United States v. United Mine Workers of America, 330 U.S. 258, 67 S.Ct. 677, 91 L.Ed. 884 (1947)......................................................................... 4 Van Dusen v. Barrack, 84 S.Ct. 805, 376 U.S. 612, 11 L.Ed.2d 945 (1964).................................................................. .38 Verizon Maryland, Inc. v. Public Service Commission of Maryland, 535 U.S. 635, 122 S.Ct. 1753, 152 L.Ed.2d 871 (2002) ............................................................. 11
United States Constitution
U.S. Const. amend. XI ....................................................................................................... passim
Federal Statutes 28 U.S.C. § 1331......................................................................................................................... 2 28 U.S.C. § 1343......................................................................................................................... 2 28 U.S.C. § 1391................................................................................................................. 40, 41 28 U.S.C. § 1404........................................................................................................3, 38, 39, 44 28 U.S.C. § 2201......................................................................................................................... 2 28 U.S.C. § 2202......................................................................................................................... 2 28 U.S.C. § 2412....................................................................................................................... 15 42 U.S.C. § 1988....................................................................................................................... 15 42 U.S.C. § 3601................................................................................................................ passim 42 U.S.C. § 3604................................................................................................................ passim 42 U.S.C. § 3605......................................................................................................25, 26, 30, 31
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42 U.S.C. § 3608....................................................................................................................... 25 42 U.S.C. § 3613................................................................................................................... 2, 15 42 U.S.C. § 5301................................................................................................................ passim 42 U.S.C. § 5304................................................................................................................. 33, 34 42 U.S.C. § 5311..................................................................................................3, 34, 35, 36, 37 42 U.S.C.A. § 2000, et seq ....................................................................................................... .34 Fed. R. Civ. P. 12.............................................................................................................. 3, 4, 18 Fed. R. Civ. P. 23.................................................................................................................. 1, 14 Federal Regulations 24 CFR § 100.115 et seq. .................................................................................................... 30, 31 24 CFR § 100.120.....................................................................................................................31 24 CFR § 100.130.....................................................................................................................31 State Statutes La. Civil Code art. 2046............................................................................................................24 La. Rev. Stat. Ann. § 13:5106 .....................................................................................................9 La. Rev. Stat. Ann. § 49:220 ............................................................................................. 6, 7, 39
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I. PRELIMINARY STATEMENT Plaintiffs’ claims against Defendant, Paul Rainwater, Executive Director of the Louisiana
Recovery Authority, (hereinafter “Rainwater”), should be dismissed for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted.
Plaintiffs have filed this civil action against Defendants, U.S. Department of Housing and Urban Development (hereinafter “HUD”)1 and Rainwater on November 12, 2008. (Complaint, ¶¶ 18-19.) Neither the State of Louisiana nor the Louisiana Recovery Authority (“LRA”), the Louisiana state agency responsible for designing and administering the Road Home, are named as Defendants. Plaintiffs filed this suit as a class action pursuant to Fed. R. Civ. P. 23 and propose a class that consists of “all African American homeowners in New Orleans who participated in the Road Home Program or who will participate by the first day of trial, whose grant amounts were calculated or will be calculated based on the pre-storm value of their homes, and who have selected or will select the program’s option of using the funds to repair or rebuild their homes.” (Complaint, ¶ 21.) Plaintiffs allege that more than twenty thousand (20,000) African American homeowners in New Orleans are members of the putative class. (Complaint, ¶ 1.)
Plaintiffs contend that the formula developed and used by the LRA and the Road Home program2 in determining and awarding compensation and incentive grants to homeowners whose homes were damaged or destroyed by Hurricanes Katrina and/or Rita and who chose to receive grant awards under “Option 1,” imposes a disparate impact on African Americans in violation of the Fair Housing Act (“FHA”), 42 U.S.C. § 3601, et seq., and the Housing and Community
1 Rainwater adopts and incorporates by reference HUD’s statement of facts contained in the Background, Section II (D)(1-4). (HUD’s Memorandum in Support of Motion to Dismiss, Rec. Doc.22, pp. 9-14.)
2 Plaintiffs do not allege Rainwater, as Executive Director, designed or administered the Road Home Program or the challenged formula for receiving Option 1 grants.
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Development Act of 1974 (“HCDA”), 42 U.S.C. § 5301, et seq. (Complaint, ¶¶ 1, 74-77.) The challenged formula is criticized by Plaintiffs as it begins with the pre-storm value of the home as the basis for the formula, unless the estimated cost of damage or estimated cost to replace the home is less than the pre-storm value, in which case the formula uses the lower of these figures as the basis of the calculation. (Complaint, ¶ 3.) Plaintiffs seek this Court to declare the Defendants’ acts and policy discriminatory, order all appropriate injunctive relief, and to remedy the effects of Defendants’ violations, including “recalculating Road Home homeowner grants” in a non-discriminatory manner. (Complaint, Request for Relief, p. 17.)(emphasis added).
Plaintiffs allege subject matter jurisdiction under 28 U.S.C. § 1331, 28 U.S.C. § 1343(a)(3-4) and 42 U.S.C. § 3613(a). (Complaint, ¶ 8.) Plaintiffs also seek declaratory and injunctive relief under 28 U.S.C. §§ 2201 and 2202. (Complaint, ¶ 9.) Rainwater contends that this Court lacks subject matter jurisdiction over Plaintiffs’ claims against him because he is entitled to immunity under the Eleventh Amendment to the United States Constitution. Rainwater asserts that the doctrine of Ex parte Young, 209 U.S. 123, 28 S. Ct. 441, 52 L. Ed. 714 (1908) (allowing suits for prospective injunctive relief against state officials in their official capacity), is not applicable in this case and does not permit the retrospective declaratory and injunctive relief requested by Plaintiffs.
Further, Plaintiffs have failed to state a claim upon which relief can be granted against Rainwater under the FHA and/or HCDA. The Road Home program was designed and intended to serve as a compensation program, not a housing program, to those Louisiana homeowners impacted by Hurricanes Katrina and Rita. Therefore, because Option 1 of the Road Home program is a compensation program to provide unrestricted funds to citizens who are already homeowners, the Fair Housing Act does not apply. Further, the HCDA does not apply as the
2

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exclusive remedy under the HCDA is through HUD’s enforcement mechanisms as specifically outlined by Congress in 42 U.S.C. § 5311. Indeed, HUD approved LRA’s action plans and, thus assured that LRA’s policies were in compliance with all applicable rules and regulations for receiving Community Development Block Grants. Simply stated, HUD has not deemed that Louisiana is in violation of any provision of the HCDA, and Plaintiffs have no private right of action against Defendant Rainwater under the HCDA.
Nevertheless, this Court need not reach these substantive issues as Defendant, Rainwater, moves this Honorable Court to transfer this matter pursuant to 28 U.S.C. § 1404 to the Middle District of Louisiana or, alternatively, to the Eastern District of Louisiana, for further resolution. Mr. Rainwater and the Louisiana Recovery Authority are located in Baton Rouge, Louisiana. Most of the witnesses and documents will be located in Baton Rouge, Louisiana. Moreover, the five named Plaintiffs, twenty thousand putative class members and the Greater New Orleans Fair Housing Action Center are located in New Orleans, Louisiana. Therefore, for the convenience of the parties and witnesses and in the interest of justice, Rainwater requests this case be transferred to Louisiana. II. THIS CASE AGAINST PAUL RAINWATER, IN HIS OFFICIAL
CAPACITY AS THE EXECUTIVE DIRECTOR OF THE LOUISIANA RECOVERY AUTHORITY, IS BARRED BY THE ELEVENTH AMENDMENT A. Standard of Review for a Motion to Dismiss Under Fed.R.Civ.P. 12(b)(1) Federal courts have limited jurisdiction. They may hear only those cases entrusted to them by a grant of power contained in either the Constitution on in an Act of Congress. City of Kenosha v. Bruno, 412 U.S. 507, 511, 93 S. Ct. 2222, 37 L. Ed. 2d 109 (1973); Loughlin v. United States, 393 F.3d 155, 170 (D.C. Cir. 2004). It is the plaintiffs’ burden of proof to establish that the court has subject matter jurisdiction to hear the case. Brady Campaign to
3

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Prevent Gun Violence United with the Million Mom March v. Ashcroft, 339 F.Supp.2d 68, 72 (D.C. Cir. 2004); In re: Swine Flu Immunization Prods. Liab. Litig., 880 F.2d 1439, 1442-43 (D.C. Cir. 1989). A court may accept all of the factual allegations in the complaint as true when evaluating a motion to dismiss for lack of subject matter jurisdiction, United States v. Gaubert, 499 U.S. 315, 322, 111 S.Ct. 1267, 113 L.Ed. 2d 335 (1991), it may also consider certain materials beyond the pleadings in considering a motion to dismiss under Rule 12(b)(1). See Jerome Stevens Pharmaceuticals, Inc. v. Food and Drug Admin., 402 F.3d 1249, 1253-54 (D.C. Cir. 2005). For example, “[t]he court may consider the complaint supplemented by undisputed facts evidenced in the record, or the complaint supplemented by undisputed facts plus the court’s resolution of disputed facts.” Herbert v. Nat’l. Acad. of Sciences, 974 F.2d 192, 197 (D.C. Cir. 1992).
B. The State of Louisiana and The Louisiana Recovery Authority Are the Real Parties in Interest, Not Paul Rainwater
The question of whether federal jurisdiction exists is not always free from doubt, and a federal court may have to examine and determine the facts and the law before concluding whether jurisdiction is appropriate. “Thus, it follows that a court has jurisdiction to determine its own jurisdiction. United States v. United Mine Workers of America, 330 U.S. 258, 292, 67 S.Ct. 677, 91 L.Ed. 884 (1947).
The essential inquiry in an Eleventh Amendment challenge is whether the state, although not named in the action, is the real party in interest. Edelman v. Jordan, 415 U.S. 651, 663, 94 S. Ct. 1347, 39 L.Ed.2d 662 (1974). A state may be the party with a substantiated interest when enforcement of the court’s decree would effect the state’s political or property rights. Hopkins v. Clemson Agricultural College of South Carolina, 221 U.S. 636, 642, 31 S. Ct. 654, 55 L.Ed. 890 (1911). In order to safeguard such rights, sovereign immunity bars suits whose direct outcome
4

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will diminish the public treasury through the award of retroactive damages. Ford Motor Co. v. Dept of Treasury, 323 U.S. 459, 464, 65 S. Ct. 347, 89 L.Ed. 389 (1945) (“…[W]hen the action is in essence one for the recovery of money from the state, the state is the real, substantial party in interest and is entitled to invoke its sovereign immunity from suit even though individual officials are nominal defendants.”), overruled on other grounds by, Lapides v. Board of Regents of the University System of Georgia, 555 U.S. 613, 122 S.Ct, 1640, 152 L.Ed.2d 806 (2002). Such suits involve compensatory or deterrent’s interest that are insufficient to overcome the compelling justifications for a state’s sovereign immunity.
Plaintiffs in this case challenge the Road Home formula design, claiming it “disproportionately burdens African American homeowners and hinders their ability to return to their homes compared to white families.” (Complaint, ¶ 58.) However, this Court needs to look no further than paragraphs 49 and 51 of Plaintiffs’ Complaint to ascertain that the LRA, and not its Executive Director, Paul Rainwater, is responsible for the Road Home design and grant formula. Plaintiffs admit the following facts:
49. The LRA, in consultation with HUD, proposed and developed the Road Home grant formula and the details of the Road Home Program. 51. The LRA administers the Road Home Program subject to ongoing oversight and continuing approval by HUD. (Complaint, ¶¶ 49, 51.) Thus, Plaintiffs have named Paul Rainwater, in his official capacity as Executive Director of the Louisiana Recovery Authority, as a nominal defendant in an attempt to avail themselves of the legal fiction of Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908). Although cited in the Complaint, Plaintiffs ignore the express statutory provisions which created the LRA in 2006, by the Louisiana legislature in the wake of Hurricanes Katrina and Rita. This Louisiana
5

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statute provides that the LRA, not its Executive Director, has the authority to establish a “clear
and effective process for the implementation of action plans for the CDBG program.” All of the
action plans must be approved by the Joint Legislative Committee on the Budget, a majority of
the elected members of each house of the Louisiana legislature, the Governor, and HUD.
La. Rev. Stat. Ann. § 49:220.4 provides in pertinent part:
A. (1) The Louisiana Recovery Authority is hereby created as a state agency within the office of the governor, division of administration. The authority shall be a body corporate with power to sue and be sued. The domicile of the authority shall be in the parish of East Baton Rouge. The purpose of the authority shall be to recommend policy, planning and resource allocation affecting programs and services for the recovery, to implement programs and provide services to the recovery, and to identify duplication of services relative to the recovery where appropriate. The authority shall carry out its functions to support the most efficient and effective use of resources for the recovery.
(2) The board shall provide leadership and oversight for the activities of the authority.
(3) The authority shall have an executive director who shall be appointed by the governor and subject to confirmation by the Senate. The executive director shall serve at the pleasure of the governor and shall be paid a salary which shall be fixed by the governor. The executive director shall be responsible to the governor and the board.
La. Rev. Stat. Ann. § 49:220.4.
La. Rev. Stat. Ann. § 49:220.5 outlines the powers, duties and functions of the LRA and
its Executive Director, and provides a comprehensive approval process for adopting policies and
procedures for receiving Community Development Block Grants (CDBG). Under this statutory
scheme, the LRA has the initial authority and responsibility to develop proposals related to
Louisiana’s recovery from Hurricanes Katrina and Rita, including CDBG proposals, action
plans, partial action plans, amendments to action plans or partial action plans. La. Rev. Stat. Ann.
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§ 44:220.5(C)(1)(a). After developing and approving a proposal or action plan, the LRA then sends the it to the Louisiana Governor for approval. Id. If the Governor approves the proposal or action plan, it is then submitted to the Joint Legislative Committee on the Budget for review and approval, and, simultaneously submitted for review to the appropriate oversight committees of the Louisiana House of Representatives and the Senate. Id. If a proposal amounts to ten million dollars ($10,000,000.00) or more, the proposal or action plan must also be approved by a majority of elected members of each house of the legislature. La. Rev. Stat. Ann. § 49:220.5(C)(1)(b). Once these steps are taken, the Louisiana Governor then submits the proposal or action plan to HUD for approval. La. Rev. Stat. Ann. § 49:220.5(C)(1)(c). Action plans and other policies and procedures for procuring CDBG funds undergo rigorous, multi-step processes, with multiple avenues of input and review, before they are finally approved by the State and HUD. In other words, Paul Rainwater, as the Executive Director of the LRA, does not have the sole or final authority to develop policies and procedures as related to action plans; instead, this is a collaborative process with multiple layers of review.
C. Plaintiffs Fail to Allege a Waiver of Sovereign Immunity by Rainwater, the Louisiana Recovery Authority or the State of Louisiana
Plaintiffs fail to address the issue of sovereign immunity in their Complaint. Further, Plaintiffs fail to invoke the doctrine of Ex parte Young, 209 U.S. 123, 28 S. Ct. 441, 52 L.Ed 714 (1908), in their Complaint. These fatal omissions can only lead this Court to conclude that the Eleventh Amendment bars Plaintiffs from pursuing their claims against Rainwater in federal court.
The Eleventh Amendment to the United States Constitution provides: The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted
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against on the United States by Citizens of another State, or by Citizens or subjects of any Foreign State. U.S. Const. amend. XI. The Eleventh Amendment not only bars suits against the state by citizens of another state, but also applies equally to suits against a state initiated by that state’s own citizens. Edelman v. Jordan, 414 U.S. 651, 663, 94 S. Ct. 1347, 39 L.Ed.2d 662 (1974); Hans v. Louisiana, 134 U.S. 1, 13-15, 10 S. Ct. 504, 33 L.Ed. 842 (1890). For example, if a lawsuit seeks to order the state officer to pay funds directly from the state treasury for the wrongful acts of the state, then the state is the real party in interests and the Eleventh Amendment bars the suit. Edelman, 415 U.S. at 663. Moreover, the Eleventh Amendment prohibits suits against states officials where the state is, in fact, the real party in interest. See Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 101-02, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984). The Court in Pennhurst noted: When the suit is brought only against state officials, a question arises as to whether that suit is a suit against the State itself. Although prior decisions of this Court have not been entirely consistent on this issue, certain principles are well established. The Eleventh Amendment bars a suit against state officials when “the state is the real, substantial party in interest.” Ford Motor Co. v. Department of the Treasury, 323 U.S. 459, 464, 65 S.Ct. 347, 350, 89 L.Ed 389 (1945). Thus, “[t]he general rule is that relief sought nominally against an officer is, in fact, against the sovereign if the decree would operate against the latter.” Hawaii v. Gordon, 373 U.S. 57, 58. 83 S.Ct. 1052, 1053, 10 L.Ed2d 191 (1693)(per curiam). And, when the state itself is named as the defendant, a suit against state officials that is in fact a suit against the State is barred regardless of whether it seeks damages or injunctive relief. Pennhurst, 465 U.S. at 101-102. Eleventh Amendment immunity is, however, subject to three primary exceptions:
(1) Congressional abrogation;
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(2) Waiver by the state; and, (3) Suits against individual state officers for prospective
injunctive and declaratory relief to end an ongoing violation of federal law. Pennsylvania Fed’n of Sportsmen’s Clubs, Inc. v. Hess, 297 F.3d 310, 323 (3d Cir. 2002). Under the first prong of the abrogation test, in order for Congress to abrogate the state’s sovereign immunity as granted by the Eleventh Amendment, Congress must (1) intend to do so unequivocally and (2) act under a validate grant under of Congressional authority. Board of Trustees of the University of Alabama v. Garrett, 531 U.S. 356, 363-64, 121 S.Ct. 955, 148 L.Ed.2d 866 (2001). The Supreme Court in Edelman held that a court will find waiver only where it is stated “by the most express language or by such overwhelming implications from the text as [will] leave no room for any other reasonable construction.” Edelman, 415 U.S. at 673. Plaintiffs in this case brought suit under the Fair Housing Act, 42 U.S.C. § 3601, et seq., and the Housing and Community Development Act of 1974, 42 U.S.C. § 5301, et seq. There is no express waiver of the State of Louisiana’s sovereign immunity in the Fair Housing Act or in the Housing and Community Development Act. See Gregory v. South Carolina Dept. of Transportation, 289 F.Supp.2d 721 (D.S.C. 2003), aff’d, 114 Fed. Appx. 87 (4th Cir. 2004), cert. denied, 544 U.S. 999, 125 S.Ct. 1932, 161 L.Ed.2d 773 (2005). As for the second prong, the State of Louisiana has in no way waived its Eleventh Amendment immunity in this case. By statute, Louisiana has refused any such waiver of its Eleventh Amendment sovereign immunity regarding suits in federal courts. La. Rev. Stat. Ann. § 13:5106(A); Cozzo v. Tangipahoa Parish Council-President Government, 279 F.3d 273, 280-81 (5th Cir. 2002). Moreover, the State of Louisiana has not consented to be sued in federal court.
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Instead, in the instant case, Plaintiffs are presumably proceeding under the third prong. However, it is important to note that this lawsuit does not challenge the constitutionality of Mr. Rainwater’s actions as Executive Director of the LRA. Instead, Plaintiffs have focused only on the alleged disparate impact of LRA’s formula for calculating Road Home benefits under Option 1 for African American homeowners in New Orleans.
D. The Ex parte Young Exception Is Inapplicable In the landmark case of Ex parte Young, 209 U.S. 123, 28, S.Ct. 441, 52 L.Ed 714, 932 (1908), the U.S. Supreme Court reviewed the jailing of the Minnesota Attorney General who had been enjoined by a federal court for imposing what stockholders of a railroad believed onerous rates on railroads in that state. The plaintiff argued that the state law constituted a confiscation of property without due process and, therefore, was unconstitutional. Obviously, if the court issued the injunction it would have the effect of stopping the state from enforcing its statute. That would constitute a judgment against the state, and arguably it would run afoul of the Eleventh Amendment. The Supreme Court concluded that the Eleventh Amendment did not bar an action against a state officer to restrain unconstitutional conduct on his part under color of state law. Accordingly, the case could proceed in federal court. The Court noted that a state could not instruct its officer to act in an illegal way. If an officer acted illegally, as the Attorney General of Minnesota was alleged to have done, he would be stripped of any representative character and of the constitutional immunity that otherwise would protect that conduct. In other words, when the officer acts illegally, he is no longer acting for the state and is thus not entitled to the state’s Eleventh Amendment immunity. Ex parte Young, 209 U.S. at 159-60. “The Young doctrine recognizes that if a state official violates federal law, he is stripped of his official or
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representative character and may be personally liable for his conduct; the state cannot cloak the officer in its sovereign immunity.” Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261, 288, 117 S.Ct. 2028, 2043, 138 L.Ed.2d 438 (1997) (O’Connor, J. joined by Scalia and Thomas, J.J., concurring in part and concurring in judgment).
Whether a litigant’s claim falls under the Ex parte Young exception to the Eleventh Amendment which bars against suing a state is a “straightforward inquiry” that “asks whether [the] complaint alleges an ongoing violation of federal law and seeks relief properly characterized as prospective.” Verizon Maryland, Inc. v. Public Service Commission of Maryland, 535 U.S. 635, 645, 122 S. Ct. 1753, 152 L.Ed. 2d 871 (2002). The court has also identified other relevant considerations. In Seminole Tribe of Florida v. Florida, 517 U.S. 44, 76, 116 S.Ct. 1114, 1133, 134 L.Ed.2d 252 (1996), for example, the Supreme Court has held that Ex parte Young is inapplicable where Congress has devised a comprehensive remedial scheme that prevents the federal courts from fashioning an appropriate equitable remedy. More recently, the court concluded in Coeur d’Alene that the Ex parte Young fiction cannot be employed where certain sovereignty interests are present, as they are when the administration and ownership of state land is threatened. See, Coeur d’Alene, 521 U.S. at 281, 287.
In the instant case, the Ex parte Young exception does not apply since Plaintiffs, by their own admission in the Complaint, acknowledge the LRA, and not Paul Rainwater in his official capacity as Executive Director of the LRA, was responsible for proposing, developing and designing the Road Home Option 1 grant formula3. (Complaint, ¶¶ 49, 51.) Thus, the facts of
3Rainwater specifically rejects HUD’s argument that Plaintiffs can maintain their claims for declaratory and injunctive relief under the FHA and HCDA directly against Rainwater under the doctrine of Ex parte Young. (HUD’s Memorandum in Support of Motion to Dismiss, Rec. Doc. 22, pp. 32-33.)
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the instant case can easily be distinguished from the facts of Ex parte Young where a state official allegedly violated state law.
The Supreme Court has subsequently applied this principle in several cases allowing federal courts to give injunctive or “prospective” relief against state officers, even in instances where compliance with the injunction would require expenditures from the state treasury. See, Edelman, supra, (articulating a prospective-retroactive relief distinction and allowing federal courts to order future compliance by state officials while forbidding those courts from ordering those courts payment of compensatory damages for past harms); see also, Quern v. Jordan, 440 U.S. 332, 99 S.Ct. 1139, 59 L.Ed.2d 358 (1979); Milliken v. Bradley, 433 U.S. 267, 97 S.Ct. 2749, 53 L.Ed.2d 745 (1977). In Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 104 S. Ct. 900, 79 L.Ed. 2d 67 (1984), the U.S. Supreme Court summarized,
When a plaintiff sues a state official alleging a violation of federal law, the federal court may award an injunction that governs the official’s future conduct but not one that awards retroactive monetary relief. Under the theory of Young, such a suit would not be one against the state since the federal-law allegation would strip the state officer of his official authority. Pennhurst, 465 U.S. at 102-103. In Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974), the plaintiff brought a class action for injunctive and declaratory relief against Illinois officials administering the federal-state benefit program of aid to the aged, blind and disabled. Federal regulations required eligibility determinations to be made by states within thirty days of receipt of application for benefits to the aged and blind and within forty-five days within receipt of the application for benefits to the disabled. The complaint charged that Illinois officials were not processing applications within these requirements and were authorizing benefits to commence within the month the application was approved and not including prior months of eligibility
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during which an applicant was entitled to benefits. The district court granted a permanent injunction requiring compliance with the federal time limits and ordering the officials to pay the benefits wrongfully withheld. The Court of Appeals affirmed.
The U.S. Supreme Court, however, reversed that portion of the court of appeals’ decision affirming the district court’s ordering requiring the payment of benefits. Edelman, 415 U.S. at 658-59. The Court held that Ex parte Young “does not extend so far as to permit a suit which seeks the award of an accrued monetary liability which must be met from the general revenues of a State.…” Edelman, 415 U.S. at 664. The Court held that the district court’s order requiring the payment of money which should have been paid, but was not,
. . . [I]s in practical effect indistinguishable in many aspects from an award of damages against the State. It will to a virtual certainty be paid from state funds, and not from the pockets of the individual state officials who were the defendants in this action. It is measured in terms of a monetary loss resulting from a past breach of a legal duty on the part of the defendant state officials. Edelman, 415 U.S. at 668. The fact that the relief requested was an injunction rather than damages was irrelevant because the Court did “not read Ex parte Young . . . to indicate that any form of relief may be awarded against a state officer, no matter how closely it may in practice resemble a money judgment payable out of the state treasury, so long as the relief may be labeled ‘equitable’ in nature.” Edelman, 415 U.S. at 666. In Papasan v. Allain, 478 U.S. 265, 278, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986), school children and local schools brought suit against Mississippi officials claiming the sale of federal school land grants had violated the state’s reported trust obligation to hold the land for the benefit of school children in perpetuity. The plaintiffs sought a declaration that the sale of the land was void and an order requiring the establishment of a fund be held in trust for their benefit. The plaintiffs argued that this relief was permissible under Ex parte Young because they only
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sought to enforce the officials’ continuing obligation to make appropriate payments for the benefit of the school children. The district court dismissed the plaintiffs’ trust claim, which the Supreme Court found was identical to their impairment of contractual obligation claim, as barred by the Eleventh Amendment. Papasan, 478 U.S. at 274, n.8. The Court of Appeals affirmed and the Supreme Court upheld this part of the district court’s decision.
In describing the types of relief allowed by Ex parte Young, the Supreme Court in Papasan stated:
Relief that in essence serves to compensate a party injured in the past by an action of a state official in his official capacity that was illegal under federal law is barred even when the state official is the named defendant. This is true if the relief is expressly denominated as damages. It is also true if the relief is tantamount to an award of damages for a past violation of federal law, even though styled as something else. Papasan, 478 U.S. at 278. The Court in Papasan held that the plaintiffs “distinction between a continuing obligation on the part of the trustee and an ongoing liability for the breach of trust is essentially a formal distinction of the sort we rejected in Edelman.” Papasan, 478 U.S. at 280. The Court reasoned that the plaintiffs’ requested relief for the officials’ breach of their continuing obligation to comply with the trust payment obligations was “in substance the award, as continuing income rather than as a lump sum, of an ‘accrued monetary liability’.” Papasan, 478 U.S. at 281. In this case, Defendant Rainwater is a state official within the ambit of the Eleventh Amendment, and is being sued in his official capacity. Moreover, the Complaint purports to seek only retrospective, injunctive relief, requesting this Court in the Request for Relief to: a) Certify this action as a class action on behalf of the proposed class
pursuant to Rules 23(a) and 23(b) of the Federal Rules of Civil Procedure;
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b) Declare that Defendant’s acts, practices, policies and omissions have deprived Plaintiffs of their rights under the Fair Housing Act of 1968 and Title I of the Housing and Community Development Act of 1974;
c) Order all appropriate injunctive relief as warranted, including but not limited to ordering Defendants to cease immediately their violations of Plaintiffs’ rights, and to remedy the invidious effects of their violations by recalculating Road Home homeowner grants in a non-discriminatory manner;
d) Order reasonable attorneys’ fees and costs to be paid by Defendants pursuant to 28 U.S.C. § 2412 and 42 U.S.C. §§ 1988, 3613; and
e. Grant such other and further relief as the Court deems just and equitable.
(Complaint, Request for Relief, pp. 17-18.) The last day to apply to the Road Home Program was July 31, 2007, and the last day to
complete an interview appointment was December 15, 2007. See www.road2la.org/homeowner/overview:htm. The injunctive relief sought by the plaintiffs that is “. . . recalculating Road Home homeowner grants” is a thinly-veiled attempt to recover retrospective relief in the form of money damages and, therefore, barred under the Eleventh Amendment.
In distinguishing between permissible prospective and impermissible retrospective relief, “attempts to seize upon a state’s ‘continuing income’ by means of an prospective injunction have been held by the Supreme Court to be attempts to obtain compensation for an ‘accrued monetary liability.’” Papasan, 478 U.S. at 281.
What the plaintiffs were seeking in Edelman was a “reparation for the past,” which would be “measured in terms of a monetary loss resulting from a past breach of a legal duty on the part of the defendant state officials.” Edelman, 414 U.S. at 665, 668. The retroactive award that so
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concerned the Edelman court was compensation intended to repair harm caused by past acts is the same relief requested by the plaintiffs in this case, and is identical to that sought in Edelman.
For purposes of the Eleventh Amendment, this Court must decide whether the relief being sought by Plaintiffs is prospective or retrospective, and the fact that Plaintiffs seek to recalculate grants after the deadline to apply for compensation grants has expired nearly two years ago should be dispositive of this issue.
E. The Coeur d’Alene Exception Is Applicable There is also a final layer of sovereign immunity analysis that also blocks Plaintiffs’ suit. The Supreme Court in Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261, 117 S. Ct. 2028, 138 L.Ed.2d 438 (1997) held that even prospective relief (in Coeur d’Alene declaratory judgment) would be barred if the relief sought is the functional equivalent of relief otherwise barred by the Eleventh Amendment and “special sovereignty interests” are implicated. Coeur d’Alene, 521 U.S. at 281. In Coeur d’Alene, the plaintiffs sought a declaratory judgment establishing their rights to certain lands. The court found that the suit was a “functional equivalent of a quiet title action which implicated special sovereign interests.” Coeur d’Alene, 521 U.S. at 281-82. In this case, as it developed the Road Home program, the State of Louisiana ultimately chose to provide compensation and incentive grants to eligible homeowners affected by Hurricanes Katrina or Rita of up to $150,000. Louisiana decided to base the amount of compensation and incentives grants on the lower of the pre-storm, fair-market value of the home or the cost to repair or replace the home. (Declaration of Jesse Handforth Kome, Rec. Doc. 22-2, ¶ 18.)
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The State of Louisiana also provides additional compensation grants of up to $50,000 for certain homeowners. Total compensation and incentive grants are still capped at $150,000. Louisiana offers additional compensation and incentive grants to applicants with household incomes 80% and below the medium income in the parish where the house was located. In addition to the additional compensation, Louisiana also provides compensation and incentive grants to homeowners via individual mitigation measures and elevation incentives. Individual mitigation measures provide incentive grants to homeowners to install home “hardening” features that will protect homes from future storm damage, including storm shutters and roof tiedowns. Elevations incentives are grants to elevate site-built homes and mobile to meet FEMA’s current advisory base flood elevation or base flood elevation levels to protect against future floods. (Kome Declaration, Rec. Doc. 22-2, ¶ 21.)
In this case, the allocation of state funds by the State of Louisiana to provide compensation and incentive grants to those citizens damaged by Hurricanes Katrina and Rita is an important state interest. Plaintiffs’ attempts to compel the recalculation of homeowner grants is an interference with a ‘special sovereign interest’ under Coeur d’Alene thus barring Plaintiffs’ claims under the Eleventh Amendment against Rainwater.
The Sixth Circuit in Barton v. Summers, 293 F.3d 944 (6th Cir. 2002), rejected an attempt by Medicaid recipients with tobacco-related illnesses to intercept tobacco settlement money due to Kentucky and Tennessee under a Master Settlement Agreement. The court held that “. . . the interest of a sovereign in allocating state funds is a ‘very serious’ one.” Barton, 293 F.3d at 951, citing Kelly v. Metropolitan County Bd. Of Education of Nashville and Davidson County, Tenn., 836 F.2d 986, 995 (6th Cir. 1987). “Interference with the allocation of state funds, where
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Congress has expressly enacted that states may allocate such funds as they please, is an
interference with a ‘special sovereign interest’ under Coeur d’Alene.” Id.
Further, in Coeur d’Alene, the Court noted that questions will arise as to the proper scope
and application of Ex parte Young. The Court cautioned against an expanded scope of the Young
exception as suggested in this case.
To interpret Young to permit a federal-court action to proceed in every case where prospective declaratory and injunctive relief is sought against an officer, named in his individual capacity, would be to adhere to empty formalism and to undermine the principle, reaffirmed just last term, in Seminole Tribe, that Eleventh Amendment immunity represents a real limitation on the federal court’s federal-question jurisdiction. The real interests served by the Eleventh Amendment are not to be sacrificed to elementary mechanics of captions and pleadings. Application of the Young exception must reflect a proper understanding of its role in our federal system and respect for state courts instead of reflexive reliance on an obvious fiction. See, e.g. Pennhurst, supra at 102103, 114, n. 25, 104 S.Ct. at 909, 915 n. 25 (explaining that the limitation in Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974), of Young to prospective relief representing a refusal to apply the fiction in every conceivable circumstance).
Coeur d’Alene, 521 U.S. at 270.
Plaintiffs’ claims against Rainwater are barred by the Eleventh Amendment and do not
fall within the Ex parte Young exception to immunity. Therefore, Rainwater’s Motion to
Dismiss pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure should be granted
accordingly.
III. PLAINTIFFS FAIL TO STATE A CLAIM UNDER THE FAIR HOUSING ACT
A. Standard for Motion to Dismiss Under Fed.R.Civ. P. 12(b)(6)
On a motion to dismiss for failure to state a claim upon which relief can be granted
pursuant to Rule 12(b)(6), this Court must dismiss a claim if the plaintiff fails to plead “enough
facts to state a claim for relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550
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U.S. 544, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007). The Court will construe the allegations and facts in the complaint in the light most favorable to the plaintiff and must grant the plaintiff the benefit of all inferences that can be derived from the facts alleged. Barr v. Clinton, 370 F.3d 1196, 1199 (D.C. Cir. 2004); Kowal v. MCI Communications Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). However, the Court need not accept asserted inferences or conclusory allegations that are unsupported by the facts set forth in the complaint. Kowal, 16 F.3d at 1276.
B. Option 1 of The Road Home’s Homeowner Assistance Program Provides Compensation Grants to Eligible Homeowners
The Louisiana Road Home program is a grant program created by the Louisiana legislature, funded by Community Development Block Grants provided by the HUD, and operated by the LRA to provide compensation to those who sustained unreimbursed damage to their homes during Hurricanes Katrina and Rita. Groby v. Davis, 575 F.Supp.2d 762 (E.D. La. 2008). In the wake of Hurricanes Katrina and Rita, Congress appropriated funds for disaster relief to be administered through HUD’s Community Development Block Grant Program. HUD distributed some of these funds to Louisiana, which in turn created the Road Home program to distribute these funds as grants to homeowners in thirty-seven (37) parishes (counties)4. See In re Katrina Canal Breaches Consolidated Litigation, 2009 WL 546660, at *1 (E.D. La. March 5, 2009). Road Home grants are designed to compensate homeowners up to $150,000 for structural damage, exclusive of contents damages, cause by Hurricanes Katrina or Rita. Id.
In the Complaint, Plaintiffs Gloria Burns, Rhonda Dents, Almarie Ford, Daphne Jones and Edward Randolph all stipulate that they were homeowners as of August 29, 2005, and thus
4 The thirty-seven (37) parishes (counties) are: Acadia, Allen, Ascension, Assumption, Calcasieu, Cameron, Beauregard, East Baton Rouge, East Feliciana, Evangeline, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Pointe Coupee, Plaquemines, Sabine, St. Bernard, St. Charles, St. Helena, St. James, St. John, St. Landry, St. Mary, St. Martin, St. Tammany, Tangipahoa, Terrebone, Vermillion, Vernon, Washington, West Baton Rouge and West Feliciana.
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were eligible to receive compensation grants pursuant to the Road Home requirements; all five named Plaintiffs likewise chose Option 1, i.e., to remain in the homes. (Complaint, ¶¶ 13-17, 21.) Plaintiffs are contesting only one aspect of the Road Home Program—the formula used to calculate grants to homeowners who choose Option 1 under the homeowner’s program, entitled “Option 1: Stay” or, alternatively, “Option 1: Homeowner Staying in Home.” (Complaint, ¶ 21: Action Plan, Seventh Amendment, attached Ex. A, §§ 2.4.2, 2.4.4, pp. 8,10.) In particular, Plaintiffs allege that the formula, which requires using the lesser of either the pre-storm value of the home or the estimated cost to repair or replace the home, creates a discriminatory disparate impact for African American homeowners in Orleans Parish. (Complaint, ¶ 3; Ex. A, §2.4.4, p. 10)
In fact, the Road Home program at issue (Option 1) is not a housing program and in no way involves residential real estate transactions. Instead, the challenged Road Home program is solely a compensation program. (Kome Declaration, Rec. Doc. 22-2, ¶ 18.) (“As it developed the Road Home program, Louisiana ultimately chose to provide compensation and incentive grants to eligible homeowners . . ..”) (emphasis added). In fact, as Kome testifies and attests, the LRA considered implementing a traditional housing rehabilitation and reconstruction program, but due to costs and technical requirements associated with a housing program, the LRA opted instead for a compensation and grant program. (Kome Declaration, Rec. Doc. 22-2, ¶ 16.)
The Road Home compensation program is fully explained and defined in the LRA’s Action Plan, Seventh Amendment, dated November 30, 2006, which is referred to by Plaintiffs in their Complaint. (Complaint, ¶ 44; Ex. A.) This Action Plan clearly and unequivocally designates the program as a compensation program. (Exhibit A.) Option 1 of compensation program does not provide housing or otherwise engage in residential real estate transactions. (Ex.
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A, §2.2, p. 5.) Section 1.1 of the Action Plan outlines the goals of the Road Home Housing
Programs, including to:
• Provide compensation to homeowners for damages to their homes related to Hurricane Katrina and Hurricane Rita
(Ex. A, §1.1, p. 3)(emphasis added). In summarizing the various programs, the Action Plan
states:
The homeowner assistance activities consist of the following:
• Funds provided to homeowners as (i) compensation grants for hurricane damage to their home, without limitations with respect to income, and additional compensation in the form of affordable compensation loans for eligible homeowners (i.e., those whose household income are less than are [sic] equal to 80% of median income for the affected area) . . ..Homeowners can elect to receive their assistance (i.e., as compensation for losses if they elect to retain their home . . .). After certain deductions, the homeowner has complete discretion as to the use of the compensation grant funds received, as allowable by State and Federal law, as they work through their personal disaster recovery situation.
(Ex. A, § 2.1, pp. 4-5)(emphasis added). This provision clearly provides that the compensation
funds do not necessarily need to be spent on housing and/or housing repairs; instead, the
homeowners have “complete discretion as to the use of the compensation grants.” (Ex. A, § 2.1,
p.5; see also § 2.1, p.5, “The covenants do not require program funds to be used to meet these
conditions.”) The Action Plan also explains that the compensation grants are not designed to cover
100% of the rebuilding costs for each homeowner. (Ex. A, § 2.4.1, p. 8.) Likewise, the
compensation grants are not annually funded entitlement programs, and thus cannot go over
budget. (Ex. A, § 2.4.1, p. 8.)
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Though it is the intent of the program that homeowners have sufficient resources to get back in to a home, not every homeowner is necessarily entitled to the maximum amount of financial assistance. In many cases, the Road Home will not provide 100% of the resources the homeowner needs to recover from the losses suffered as a result of Hurricane Rita or Hurricane Katrina. This is true for many reasons, such as the fact that assistance is capped at $150,000, labor and material costs in Louisiana are very high, and assistance is reduced by any hazard insurance, flood insurance, FEMA benefits and other compensation payments received by the homeowner for the losses due to Hurricane Katrina and Hurricane Rita.
Note that Road Home is not an annually funded entitlement program and cannot go over budget. If costs exceed budgeted projections, grant assistance to homeowners may have to be reduced and the Program may be required to pro-rate remaining benefits for homeowners who have not received funds from the program.
(Ex. A, § 2.4.1, p. 8.)
The Action Plan also explains the formula under Option 1 of the homeowners assistance
program:
Figure 1- COMPENSATION GRANT FOR OPTION 1: STAY
Equals the following up to $150,000
Pre-Storm value* (Minus) other Compensation [FEMA, Insurance, other funds](Minus) 30% Penalty for failure to have insurance if applicable
*Note: If the Estimated Cost of Damage or Estimated Cost to Replace Home is less than the Pre-Store value, the Estimated Cost of Damage/Estimated Cost to Replace Home will be used instead of PSV in the calculation.
(Ex. A, § 2.4.4, p. 10.) In other words, the Action Plan presumes that the pre-storm value of the
home will be the basis for the grant calculation, unless the estimated cost of damage or estimated
cost to replace the home is less than the pre-storm value of the home, in which case the estimated
cost of damage/ estimated cost to replace will be used as the basis for the formula. (Ex. A, §
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2.4.4, p. 10.) Appendix 1 to the Action Plan provides examples of how hypothetical households might be assisted under Option 1 and how the formula would be applied. (Ex.A, Appendix 1, pp. 16-21.)
Further, Action Plan Amendment 14 dated May 17, 2007, clarifies the previous action plans to clearly and unequivocally designate the program as a compensation program. Indeed, the Introduction5 states: “These changes are being submitted to resolve HUD’s concern that Louisiana’s program did not comply with the requirements of a true compensation program.” (Action Plan Amendment 14, Ex. B, § 1, p. 1.)(emphasis added). In other words, in case there was any doubt or confusion, the LRA clarified that its program was and is a “true compensation program.” (Ex. B, §1, p. 1.)
Although Amendment 14 does not substantively change the program, it adds provisions to clarify the intent of the LRA that the program be a true compensation program. For instance, § 2.4.2 adds the four types of benefits available for under Option 1, including:
1. Compensation grants—To cover uninsured, uncompensated damages incurred by the homeowner as a result of Hurricane Katrina or Hurricane Rita.
2. Elevation Assistance • Elevation Compensation for those homeowners who select Option 1 and whose property is subject to the latest available FEMA guidance for base flood elevations . . .;
* ** 3. Additional Compensation Grant—Funding of up to $50,000 for
homeowners with income at or below 80% of area median income.
5The Introduction also explains that Amendment 14 “is to be considered current policy upon its publication” and supercedes all other Action Plans.
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4. Mitigation Grants of up to $7,500 may be available to complete other mitigating measures. Funding of this program is dependent on other available funding.
Finally, at the time the Plaintiffs received their compensation grants from the Road Home program, they each signed the Road Home Program Grant Agreement6. (Ex. C.) The Grant Agreement provides that the purpose of the grant is “to provide compensation for damages incurred by the Homeowner(s) due to Hurricanes Katrina in August 2005 and/or Rita in September 2005.” (Ex. C.)(emphasis added).
C. Plaintiffs’ Claims Under the Fair Housing Act In the Complaint, Plaintiffs characterize the Road Home program and the compensation grants awarded to homeowners under Option 1 as a “housing redevelopment program.” (Complaint, ¶¶ 1, 2, 42, 44, 45.) Again, as the action plans and Declaration of Jessie Handforth Kome clearly demonstrate, the homeowner assistance program at issue is not a housing program, does not provide housing to anyone, does not involve real estate transactions, and instead only awards compensation grants to homeowners. (Exs. A-C; Kome Declaration, Rec.Doc. 22-2, ¶18). As for Plaintiffs’ claims under the Fair Housing Act (FHA), they allege (1) Defendants “denied housing” to African American homeowners because of their race in violation of the Fair Housing Act, 42 U.S.C. § 3604(a); (2) Defendants discriminated against African American homeowners because of their race “in the availability of, and in the terms and conditions of, real estate-related
6Plaintiffs also signed a waiver of rights and liability contained in the Grant Agreement. (Grant Agreements for Gloria Burns, Rhonda Dents, Almarie Ford, Daphne Jones and Edward Randolph, attached as Ex. C in globo.) The Grant Agreement was drafted and executed in Louisiana, and thus Louisiana law applies. The waiver in the Grant Agreement clearly, unequivocally and unambiguously provides that grant recipients will not “hold the State of Louisiana, United States or any other branch or agency of the state or federal government liable for their actions relating to this Grant.” (Ex.C.) Instead, recipients agree to participate and resolve their disputes through the resolution and appeal process provided by the Road Home program and Office of Community Development. (Ex. C.) Finally, the Grant Agreement provides if the homeowners attempt to take legal action, the State will have the right to recover attorneys’ fees and expenses. (Ex.C.) Therefore, the named Plaintiffs are barred from suing the State, its agents or agencies as they have waived their right to sue. (Ex. C.) See La. Civ. Code Ann. art. 2046.
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transactions” in violation of the Fair Housing Act, 42 U.S.C. § 3605(a); and, (3) Defendants
“failed to administer housing-related programs and activities in a manner that affirmatively furthers fair housing” in violation of the Fair Housing Act, 42 U.S.C. § 3608(d), (e)(5)7.
(Complaint, ¶¶ 74-76.)
D. The Fair Housing Act Does Not Apply to The Road Home Compensation Grant Program to Eligible Homeowners
Section 3604(a) of the FHA provides that it shall be unlawful:
To refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or other make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.
Likewise, § 3605(a) of the FHA also provides:
It shall be unlawful for any person or other entity whose business includes engaging in residential real estate-related transactions to discriminate against any person in making available such a transaction, or in the terms of conditions of such a transaction, because of race, color, religion, sex, handicap, familial status, or national origin.
The issue of whether the FHA, and in particular §§ 3604(a) and 3605(a) of the FHA,
applies to a compensation grant program falling under the auspices of HUD, seems to be one of
first impression. Although HUD has funded other compensation programs using Community
Development Block Grants (i.e., the compensation and incentive grants following September 11,
2001, and loan payments to homeowners in Grand Forks, North Dakota after flooding in 1997),
no court has ever been called upon to determine whether plaintiffs can state a claim under the
FHA for alleged disparate impact discrimination as a result of the formula used to determine the
amount of compensation grants awarded to eligible individuals. (See Kome Declaration, Rec.
Doc. 22-2, ¶ 17.) In addition, no Court has ever determined whether compensation grants
7Sections 3608(d) and 3608(e)(5) apply exclusively to HUD’s duties under the FHA, and thus do not apply to Defendant Rainwater.
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provided by a state to a homeowner has any effect on the “availability of housing” or is considered a “residential real estate transaction” under the FHA.
Generally, in order to state a claim under the FHA, “the alleged illegal actions must lead to discriminatory effects on the availability of housing.” Ficken v. Golden, 2005 WL 692019 at *5 (D.D.C. March 24, 2005) (holding plaintiff failed to state a claim under FHA §§ 3604(a) or 3605(a) because defendants did not have the ability to refuse to sell or rent a dwelling and were not in the real estate-related business as contemplated by the FHA). This has been a basic and longstanding requirement of this and other courts. For instance, in Clifton Terrace Associates, Ltd. v. United Technologies Corporation, 929 F.2d 714, 719 (D.C. Cir. 1991), this Court held that by the plain terms of § 3604(a), the FHA reaches only “discrimination that adversely affects the availability of housing.” Therefore, it is fundamental that in order for the FHA to apply, the challenged conduct must impact the “availability of housing.”
Although the language of § 3604(a) seems all encompassing, its scope is not limitless. Cox v. City of Dallas, 430 F.3d 734, 740 (5th Cir. 2005), cert. denied, 547 U.S. 1130, 126 S.Ct. 2039, 164 L.Ed.2d 783 (2006). The Cox court noted that although the FHA is meant to have a broad reach, failing to enforce the clear language of the statute “pushes the FHA into a general anti-discrimination pose, creating rights for any discriminatory act which impacts property values....” Cox, 430 F.3d at 746. Instead, “while sweeping widely, the FHA does so in the housing field and remains a housing statute—the focus of congressional concern. That the corrosive bite of racial discrimination may soak into all facets of black lives cannot be gainsaid, but [the FHA] targets only housing.” Cox, 430 F.3d at 746 (emphasis added).
In fact, in Cox, the plaintiffs complained that the City of Dallas violated § 3604(a) because it allowed the construction of a dump near the plaintiffs’ homes, which made it more
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difficult for the plaintiffs to sell their homes and lowered the property values of their homes. Id. The Fifth Circuit rejected the plaintiffs claims holding § 3604(a) affords no right of action to current homeowners claiming that the value or “habitability” of their property has decreased due to discrimination in the delivery of protective city services. Cox, 430 F.3d at 742-43. The court stated: “To affect the availability of housing within the meaning of the FHA, the discriminatory actions must have a direct impact on plaintiffs’ ability, as potential homebuyers or renters, to locate in a particular area or to secure housing.“ Cox, 430 F.3d at 740, citing Cox v. City of Dallas, 2004 WL 370242 at *6 (N.D. Tex. Feb. 24, 2004). Indeed, to recover under § 3604(a), the plaintiffs must prove that the defendant has made unavailable or denied them dwellings; section 3604(a) protects the right of individuals to live where they choose, it does not protect intangible interest in already-owned property, such as habitability or value. Id. Therefore, the Fifth Circuit held that because the plaintiffs were already homeowners and were not denied housing, the FHA did not apply to their claims. Id.
The Cox case is not an anomaly; courts have consistently held that not every act or conduct tangentially related to housing is actionable under the Fair Housing Act. Jersey Heights Neighborhood Assn. v. Glendening, 174 F.3d 180,192 (4th Cir. 1999)(holding the State’s decision in selecting a location for a new highway through predominately African-American neighborhood did not otherwise make housing unavailable); see also Edwards v. Johnston County Health Dept., 885 F.2d 1215, 1221 (4th Cir. 1989)(holding the county’s actions in issuing permits for establishment of substandard housing for predominately non-white migrant farm workers did not make housing unavailable).
For instance, the court in Jersey Heights dismissed a plaintiff neighborhood association’s claim that the State of Maryland’s process and decision to build a new highway just south of its
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borders had a disparate adverse impact on their African American community. Jersey Heights, 174 F.3d at 184-85. Among other things, the court reasoned that the process and eventual site selection was too remotely related to the housing interests protected by the FHA. Jersey Heights, 174 F.3d at 192. The court stated that situations involving racial steering by real estate agents provided a closer causal link between housing and a disputed action than the highway selection site process. Id. Likewise, the court also found that the highway site selection did not make housing “unavailable” and did not deny a dwelling to anyone. Jersey Heights, 174 F.3d 192-93. The Plaintiff neighborhood association, thus, did not state a claim under the Fair Housing Act. Id.
The Seventh Circuit reached the same result in the case of Southend Neighborhood Improvement Assoc. v. St. Clair County, 743 F.2d 1207, 1210 (7th Cir. 1984). The court considered plaintiff’s claim that the county’s discriminatory refusal to properly manage the properties it owned damaged their interests in neighboring properties. Id. The court noted plaintiff’s claim was “quite different from most of the practices that courts have deemed illegal under § 3604(a).” Id. The court held that since plaintiffs failed to allege that they had been hindered in an effort to “acquire a dwelling,” they did not state a claim under the FHA. Specifically, the court reasoned:
We hold that the County’s actions here could not have affected the availability of housing in a manner implicating Section 3604(a) of the Fair Housing Act. Section 3604(a) is designed to ensure that no one is denied the right to live where they choose for discriminatory reasons, but it does not protect the intangible interests in the already-owned property raised by the plaintiffs allegations. Southend, 743 F.2d at 1210. The Seventh Circuit revisited the issue in Halprin v. The Prairie Single Family Homes of Dearborn Park Assoc., 388 F.3d 327 (7th Cir. 2004), in which the plaintiff, a Jewish homeowner,
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filed suit against the homeowners’ association and others claiming they harassed him because of his religion, by, among other things, writing an obscenity on and vandalizing his property. Halprin, 388 F.3d at 328. The Court noted that the plaintiffs were complaining not about being prevented from acquiring property, but about being harassed by other property owners in the same subdivision. Halprin, 388 F.3d at 329. The court held that the plaintiff failed to state a claim under § 3604(a) of the FHA, reasoning:
Title VII protects the job holder as well as the job applicant, so an employer who resorts to harassment to force an employee to quit is engaged in job discrimination within the meaning of the Act. The Fair Housing Act contains no hint either in its language or its legislative history of a concern with anything but access to housing. . . . Since the focus [of Congress] was on [minority’s] exclusion, the problem of how they were treated when they were included, that is, when they were allowed to own or rent homes in such areas, was not at the forefront of congressional thinking. Halprin, 388 F.3d at 329. Finally, as these cases illustrate, discriminatory practices alleged by current homeowners who are plaintiffs are quite unlike the discriminatory practices in other cases allowed under the FHA-- for example, “racial steering,” locking out of owners of one race but not another, mortgage redlining, insurance redlining, exclusionary zoning-- where the availability of housing for prospective owners or tenants is implicated. See Cox, 430 F.3d 734 at 741-42. The same is true in the case at bar. In this case, the challenged Road Home compensation grants were only available to homeowners as of the date of Hurricane Katrina, August 29, 2005 and/or Hurricane Rita, September 24, 2005. In fact, each named Plaintiff owned their home at the time of Hurricane Katrina and continued to own their homes at the time of their application and award of compensation grants under the Road Home program. (Complaint, ¶¶ 13-17.) Thus, Paul Rainwater and/or the LRA did not deny Plaintiffs access to housing and Plaintiffs have not
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in any way been hindered in acquiring a dwelling. Again, home ownership was a pre-requisite to participate in the Road Home program. (Exs. A, B.)
Further, Option 1 of the Road Home Program was not and is not a housing program in that it did not and does not place or assist citizens in housing; instead, it simply gave citizens compensation grants based on either the pre-store value of their homes or the cost to repair or rebuild their homes. (Exs. A, B.) Utilizing home values in the formula to determine the amount of grant awards is simply not enough to equate or convert Option 1 of the Road Home Program to a housing program. Further, the LRA acknowledged that the compensation grants would not designed to provide 100% of the resources the homeowner may need to recover from the losses suffered as a result of the hurricanes. (Exs. A, B.) In addition, grant recipients are not required to use the Road Home compensation grant funds to repair their houses; instead, the homeowners are free to use the compensation grants in any way they choose. (Exs. A, B.) Therefore, Plaintiffs cannot assert that the lack of funding or their inability to receive larger grants denied them the ability to access their houses. In truth, the compensation grants did not guarantee any homeowner that they would be able to resume living in their house as a result of receiving the funds.
E. Option 1 of the Homeowners Assistance Program Does Not Involve Residential Real Estate Transactions
In addition, the challenged formula for grants under Option 1 of the Road Home program has nothing to do with “residential real estate-related transactions“ as defined in § 3605(a) or HUD regulations interpreting § 3605(a), 24 CFR § 100.115, et seq. In fact, even if the Option 1 grants constitute “other financial assistance,” the compensation grants were not solely designated for “purchasing, constructing, improving, repairing, or maintaining a dwelling” and the grants were not “secured by residential real estate.” 24 CFR § 110.115(a)(1), (a)(2). Again,
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compensation grant recipients were allowed to use the funds from the compensation grants in any way they chose, and were not required to use the funds to rebuild or repair their homes. (Exs. A, B.) In addition, Paul Rainwater, the LRA and/or the Road Home were not in the business of engaging in residential real estate, especially as it concerned Option 1 grants. Indeed, Plaintiffs have not alleged Rainwater, the LRA or the Road Home sold, brokered, or appraised residential real estate property. See 24 CFR § 100.115(b).
Likewise, the list of prohibited practices under § 3605(a) include such acts such as failing or refusing to provide to any person, in connection with a residential real estate-related transaction, information regarding the availability of loans or financial assistance, application requirements, procedures or standard for the review and approval of loans or financial assistance, or providing information which is inaccurate or different from that provided to others because of race. 24 CFR § 100.120(b). Other prohibited practices include using different policies, practices or procedures in evaluating or determining creditworthiness or determining the type of loan or financial assistance, interest rate, duration or other term of the loan/ financial assistance because of race. 24 CFR § 100.130(b)(1), (b)(2). Plaintiffs have not alleged that Rainwater engaged in any of these prohibited practices. In fact, as these prohibited practices demonstrate, neither Rainwater, the LRA and/or the Road Home were engaged the type of activities considered and contemplated as being a part of residential real estate transactions under §3605(a). Instead, the formula for determining Option 1 compensation grants did not involve any real estate transactions. Thus, Plaintiffs fail to state a claim for relief under this section.
F. Plaintiffs Fail to State a Claim Under the Fair Housing Act Because They Have Not Alleged Proper Comparators
Finally, Plaintiffs have failed to state a claim under the FHA, not only because the FHA does not apply to a true compensation program for people who are already homeowners and
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because the compensation program did not involve real estate-related transactions, but also because Plaintiffs failed to allege sufficient facts to maintain a discrimination claim under the FHA. Importantly, Plaintiffs have utterly failed to allege that they have treated differently than comparable or substantially similar white homeowners.8 See e.g., 2922 Sherman Avenue Tenants’ Assoc. v. District of Columbia, 444 F.3d 673 (D.C. Cir. 2006); Anderson v. Zubieta, 180 F.3d 329, 342 (D.C. Cir. 1999)(holding plaintiffs in Title VII disparate impact case must demonstrate that they were treated less well than other employees who were similarly situated)(emphasis added). In other words, Plaintiffs failed to allege that they were treated differently than white homeowners with the same or substantially the same pre-storm value and/or estimated costs of damage for their homes. In fact, Plaintiffs do not contest that the formula at issue applied the same to all applicants having the same valuation of property, i.e., applicants who were similarly situated.
For instance, as a hypothetical, if a plaintiff’s pre-storm value of his or her home was $127,000 and estimated cost of damage to the home was $212,730, in order to maintain a discrimination claim, plaintiffs must allege that a similarly situated white homeowner (i.e., a white homeowner with a pre-storm value of $127,00 and/or an estimated cost of damage of $212,730) was treated more favorably, presumably because of their race. Specifically in order to maintain a disparate impact discrimination claim under the FHA, plaintiffs must allege that a neutral policy caused African American homeowners to be treated less favorably than similarly situated white homeowners; again, however, the pre-storm value and/or the estimated cost of damage for both white and African American homeowners must be substantially the same in order to make a meaningful and accurate comparison.
8Rainwater also adopts by reference HUD’s argument on this issue. (HUD’s Memorandum in Support of its Motion to Dismiss, Rec. Doc. 22, pp. 42-43.)
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In this case, Plaintiffs have not and cannot allege that African American and white homeowners with substantially similar home values were treated differently or suffered a significantly discriminatory impact because of the application of the Option 1 formula. Instead, in a convoluted and strained argument, Plaintiffs allege that African American homeowners and white homeowners with the same square footage (but not the same home values) were treated differently. (Complaint, ¶¶ 53-60.) Plaintiffs argue that “comparable homes” (meaning homes with the same amount of square footage) have lower values in African American communities than in predominantly white communities. (Complaint, ¶ 53.) However, Paul Rainwater, the LRA and/or the Road Home are not to blame and cannot be held liable or at fault for different valuation of homes with the same square footage based on location; there are many reasons and factors which determine home values, none of which were developed or determined by Rainwater, the LRA or the Road Home and not all of which are discriminatory. However, that is beyond the scope of this lawsuit. Instead, in order to state a cognizable claim, Plaintiffs must allege that there was a disparate impact in the granting of compensation awards for African American homeowners as compared to white homeowners who owned substantially similar homes (meaning homes with substantially the same property value). Plaintiffs have utterly failed to allege this, and, therefore, their claims should be dismissed. IV. PLAINTIFFS HAVE NO CLAIM FOR REMEDIES UNDER THE
HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974 In Count Two of the their Complaint, Plaintiffs allege Defendants failed to administer the CDBG program in a manner that affirmatively furthers fair housing, in violation of Title I of the Housing and Community Development Act of 1974, 42 U.S.C. § 5304 (b)(2), (HCDA). Section 5304(b)(2) reads:
(b) Certification of enumerated criteria by grantee to Secretary
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Any grant under section 5306 of this title shall be made only if the grantee certifies to the satisfaction of the Secretary that—
* ** (2) the grant will be conducted and administered in conformity with the Civil Rights Act of 1964 [42 U.S.C.A. § 2000a et seq.] and the Fair Housing Act [42 U.S.C.A. § 3601 et seq.] and the grantee will affirmatively further fair housing. First, § 5304(b)(2) of the HCDA requires that a grantee make certifications that, among other things, the grant will be conducted in conformity with the Civil Rights Act and Fair Housing Act. Plaintiffs have not alleged that Paul Rainwater, the LRA or the Road Home failed to make these certifications. In fact, the LRA did comply with § 5304(b)(2) by making the certifications to the satisfaction of HUD in the action plans. (Kome Declaration, Rec. Doc. 22-2, ¶ 14.)(“Louisiana submitted its first action plan in early 2006 and made all required alternative certifications at that time, including the certification that the state would affirmatively further fair housing. . . . Louisiana later made the same certifications to obtain funds from the second and third appropriations.”) HUD deemed the LRA to be fully in compliance with § 5304(b)(2), and released the funds accordingly. In fact, neither the LRA nor any other state agency, entity or person involved with the grants at issue in this suit has never been cited or deemed in violation by HUD of these certifications. HUD has taken no adverse action toward the State, its agencies or employees, in connection with the CDBG funds. In any event, the sole remedies for breach of § 5304(b)(2) are contained in 42 U.S.C. § 5311. Section 5311 of the HCDA provides that if the Secretary of HUD finds a recipient of assistance failed to comply with, among other things, § 5304(b)(2), then the Secretary has the authority to terminate, reduce, or limit the availability of the grant payments. 42 U.S.C. § 5311 (a). In addition, the Secretary may also refer the matter to the Attorney General of the United States with a recommendation that civil action be instituted. 42 U.S.C. §5311(b)(1). Thereafter,
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the Attorney General may bring a civil action in any United States district court having venue, including an action to recover the amount of grant previously distributed and/or for injunctive relief. 42 U.S.C. § 5311(b)(2). However, these are the sole remedies for violation of the HCDA. In other words, the HCDA does not provide for a private cause of action for Plaintiffs to seek remedies against Paul Rainwater, the LRA or the Road Home for violations under this chapter.
The court in People’s Housing Development Corporation v. City of Poughkeepsie, 425 F.Supp. 482 (S.D. N.Y. 1976), considered the issue of whether the HCDA allows a private cause of action and reached the conclusion that the HCDA did not allow such a private right of action. In People’s, the plaintiff, a not-for-profit corporation, sued a municipality under the HCDA for cancelling its contract to establish and administer a program of acquisition, rehabilitation, and home ownership grants concerning properties within the municipality. People’s, 425 F.Supp. at 484. The court dismissed the suit holding the HCDA did not allow plaintiff to maintain a private claim. The court noted that there is nothing in either the legislative history of the HCDA, nor in the language of legislation itself which would militate towards a finding of congressional intent to supply anyone, whether a principal or secondary beneficiary, a private cause of action under the Act. People’s, 425 F.Supp. at 484. Instead, the plain language of the statute itself speaks only of the procedures and remedies which the Secretary of HUD may pursue. Id. Therefore, the court presumes that Congress did to some degree consider the enforcement of terms and conditions of the Act, and obviously felt that the administrative agency should have the major, if not exclusive, responsibility for compliance under the Act. Id. The Court concluded that the case came into the directive of National Railroad Passenger Corp.v. National Ass’n of Railroad Passengers, 414 U.S. 453, 94 S.Ct. 690, 38 L.Ed.2d 646 (1974):
[W]hen legislation expressly provides a particular remedy or remedies, courts should not expand the coverage of the statute to
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subsume other remedies. ‘When a statute limits a thing to be done in a particular mode, it includes the negative of any other mode.’ Botany Worsted Mills v. United States, 278 U.S. 282, 289, 49 S.Ct. 129, 132, 73 L.Ed. 379 (1929).
People’s, 425 F. Supp. at 484.
The court also reasoned that when Congress vests enforcement responsibilities in the
government agency with expertise in the particular area, agency enforcement should be regarded
as exclusive. In addition, the court noted that it disfavors the fragmented approaches to the
problems in question which may result when the lower federal courts, lacking the agency’s
expertise, respond to private actions. People’s, 425 F.Supp. at 492. Ultimately, the court
concluded that HUD has a wide variety of sanctions to invoke against a recipient of Act-
generated funds, and there was no basis for the court to assume that the agency would not apply
them in an appropriate case. People’s, 425 F.Supp. at 493. The Court noted:
[T]he federal grants which sponsor these urban redevelopment programs are based on detailed and comprehensive plans, which, when fully implemented over the entire course of the program may entail substantial alterations . . .. To view, as courts responding to individual cases must, each alleged incident of discrimination in its own isolated context could lead to faulty conclusions. Because HUD has studied and approved each community’s long-term plan, it should be better equipped than the courts to determine whether the alteration or termination of a single segment of that plan will hinder realization of its long-range goals as set by the comprehensive plan. Again, because the agency is well acquainted with said plan, it should have a high degree of competence in discerning whether, within the context of the overall program, an individual incident represents the existence of . . . discrimination.
People’s, 425 F.Supp. at 493. Therefore, the court concluded that the HCDA did not endow
plaintiff with a private remedy. See also Payne v. United States Department of Housing and
Urban Development, 551 F.Supp. 1113 (S.D. Ohio 1982)(holding a plaintiff’s sole remedy is
through the procedures outlined in 42 U.S.C. § 5311).
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Indeed, the Supreme Court has been especially reluctant to imply private rights in cases enacted under Congress’ spending powers. See Guilford County Community Action Program, Inc. v. Wilson, 348 F.Supp.2d 548, 554-55 (M.D.N.C. 2004). In Pennhurst State School & Hosp. v. Halderman, supra, the court explained that “[i]n legislation enacted pursuant to the spending power, the typical remedy for state noncompliance with federally imposed conditions is not a private cause of action for noncompliance but rather action by the Federal Government to terminate funds to the State.” Pennhurst State School & Hosp. v. Halderman, 451 U.S. 1, 28, 101 S.Ct. 1531, 1545, 67 L.Ed.2d 694 (1981). Since Pennhurst, the Court has remained reluctant to find that spending legislation gave a private right of action. Guilford, 348 F.Supp.2d at 555. In fact, no court has found that the HCDA affords a private cause of action; instead, the exclusive remedy for violation of the HCDA’s provision rests with the statutory remedies contained in 42 U.S.C. § 5311.
This case presents no reason to abrogate from the generally accepted premise that the there is no private cause of action for violations of the HCDA. In fact, the same analysis and conclusions are true for this suit as was the People’s case. See also Chan v. City of New York, 1 F.3d 96, 101-102 (2nd Cir. 1993) (holding the HCDA did not create a private right of action to the plaintiffs and, further, stating, “The mere fact that plaintiffs are intended beneficiaries of the statute does not mean that Congress intended the statute to grant them a private right of action to secure that benefit.”)
Indeed, it has been over thirty years since the People’s case announced a prohibition of private suits under the HCDA, and Congress has done nothing to amend the HCDA to allow for a private cause of action. Again, there is nothing in the legislative history or HCDA itself which would indicate in any way that Congress intended private citizens to pursue claims individually
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under the Act. See Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 100 S.Ct. 242, 62 L.Ed.2d 146 (1979). Finally, as the People’s court aptly noted, HUD is in the superior position to enforce the provisions of the HCDA, as HUD has hands-one, intimate knowledge of the grants and Action Plans at issue in this case. Therefore, because there is no private cause of action under the HCDA, Plaintiffs claims against Rainwater for violating the HCDA must be dismissed. V. THIS CASE SHOULD BE TRANSFERRED TO LOUISIANA
Pursuant to 28 U.S.C. § 1404(a), Defendant seeks transfer of this matter to the United States District Court for the Middle District of Louisiana, located in Baton Rouge, Louisiana, or alternatively, the United States District Court for the Eastern District of Louisiana, located in New Orleans, Louisiana. The Court can consider this issue at any time, including before ruling on Rainwater’s motions to dismiss. Atfab v. Gonzalez, 597 F.Supp.2d 76 (D.D.C. 2009), citing Sinochem Int’l Co., Ltd. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 127 S.Ct. 1184, 167 L.Ed.2d 15 (2007).
A. Standard for Change of Venue Under 28 U.S.C. § 1404(a) Section 1404(a) of Title 28 of the U.S. Code permits the Court to transfer this case to “any other district or division where it might have been brought” for the “convenience of parties and witnesses, in the interest of justice.” 28 U.S.C. § 1404(a); Piper Aircraft Co. v. Reyno, 454 U.S. 235, 253, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981). In analyzing a motion to transfer, a court must first determine whether the action could have been brought in the district to which transfer is sought. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988), citing Van Dusen v. Barrack, 84 S.Ct. 805, 376 U.S. 612, 613, 11 L.Ed.2d 945 (1964). The Court must conduct a case-by-case analysis, balancing the private interests of the parties and
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public interests such as efficiency and fairness. Id. at 29; Atfab v. Gonzalez, 597 F.Supp.2d 76 (D.D.C. 2009).
In conducting its interests analysis, when, as here, the plaintiffs’ choice of venue appears to relate solely on the federal agency defendant’s (HUD) presence in Washington D.C., a court should carefully consider whether venue is proper. Cameron v. Thornburgh, 983 F.2d 253, 256 (D.C. Cir. 1993) (holding “[c]ourts in this circuit must examine challenges to . . . venue carefully to guard against the danger that a plaintiff might manufacture venue in the District of Columbia. By naming high government officials as defendants, a plaintiff could bring a suit here that properly should be pursued elsewhere.”). This standard of close scrutiny has resulted in courts in the District of Columbia invoking their transfer authority under § 1404(a) and transferring cases to a district having a closer connection to the parties’ dispute. See Al-Ahmed v. Chertoff, 564 F.Supp.2d 16, 19 (D.D.C. 2008)(“[W]hen the only real connection [the] lawsuit has to the District of Columbia is that a federal agency headquartered here is charged with generally regulating and overseeing the [administrative] process, venue is not appropriate in the District of Columbia.”).
B. The Middle District of Louisiana is a More Convenient and Appropriate Venue for This Suit
This case should be transferred pursuant to 28 U.S.C. §1404 to the Middle District of Louisiana. The LRA is domiciled by statute and located in Parish of East Baton Rouge, located within the United States District Court for the Middle District of Louisiana (“Middle District”). La. Rev. Stat. Ann. § 49:220.4. Defendant Paul Rainwater’s office and residence is in Baton Rouge, Louisiana. Further, most, if not all, of LRA’s witnesses and documents are located in Baton Rouge, Louisiana, in the Middle District. The challenged formula was designed in Baton
39

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Rouge. Of the five named Plaintiffs, one currently resides in Baton Rouge, Louisiana. (Complaint, ¶ 13.)
The only link between this action and the District of Columbia is that the offices of codefendant, HUD, are located in the District of Columbia, along with the offices for Plaintiffs’ lead counsel. There are no other ties to this District. The events giving rise to Plaintiffs’ Complaint, such as the processing of their Road Home grant applications, the creation of the formula used in awarding the Road Home grants, and the disbursing and calculating of funds relative to the Plaintiffs’ grant applications, all occurred in the State of Louisiana, principally in Baton Rouge, Louisiana, located in the Middle District. The Middle District is a far more appropriate forum for this case than the District of Columbia, and the interests of justice support transfer at this initial stage of this action.
C. This Action Could Have Been Brought in the Middle District of Louisiana This case is governed by the general venue statute, 28 U.S.C. § 1391, which establishes default rules for venue that apply to federal lawsuits where underlying statutes do not specify venue rules. Under § 1391, there are three possible bases for venue for claims against federal government officials and/or or agencies. They include: (1) where a defendant in the action resides; (2) the district where a substantial part of the events (or omissions) giving rise to the claim occurred; or, (3) where “the plaintiff resides, if no real property is involved in the action.” See 28 U.S.C. § 1391(e). As a threshold matter, under § 1391, Plaintiffs clearly could have brought this case in the Middle District or the Eastern District of Louisiana. Defendant Paul Rainwater and the LRA reside and are domiciled in Baton Rouge, Louisiana, in the Middle District of Louisiana. Second, a substantial part, if not all, of the events giving rise to the Plaintiffs’ claims occurred in the
40

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Middle District of Louisiana at the offices of the LRA. The LRA was created by Louisiana government and statutory law. The challenged LRA action plan and formula were created in Baton Rouge, Louisiana. The Road Home program was created and implemented in Louisiana. Plaintiffs’ Road Home grant applications were processed in Baton Rouge, Louisiana, in the Middle District.9 The funds were distributed by the LRA in Baton Rouge, Louisiana, in the Middle District. The approval and/or denials and/or appeal decisions for Plaintiff’s Road Home grant applications were made in Baton Rouge, Louisiana, in the Middle District. In sum, the Road Home grant program and the adjudication of Plaintiffs’ Road Home grant applications at issue in this action all took place in Baton Rouge, Louisiana within the Middle District. Finally, one of five named Plaintiffs the plaintiffs reside in the Parish of Baton Rouge, located in the Middle District. No Plaintiffs reside outside the State of Louisiana, or specifically in the District of Columbia. Accordingly, under 28 U.S.C. § 1391 venue is proper in the Middle District of Louisiana, or alternatively in the Eastern District of Louisiana.
D. Private Interests Favor Transfer of This Case to the Middle District of Louisiana
Private interests favor transfer of this case to the Middle District of Louisiana. Such interest factors typically include: (1) the parties’ choice of forum; (2) where the claim arose; (3) the convenience of the parties; (4) the convenience of the witnesses, particularly if important witnesses may be unavailable to give live testimony in one of the trial districts; and, (5) the ease of access to sources of proof.” Atfab, supra, 597 F.Supp.2d at 80, citing, Montgomery v. STG Int'l, Inc., 532 F.Supp.2d 29, 32-33 (D.D.C. 2008). Each of these factors weighs in favor of transferring this case to the Middle District, or alternatively, the Eastern District of Louisiana.
9The properties for which the grants were sought are all located in the Parish of Orleans, within the Eastern District of Louisiana.
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In this case, Plaintiffs’ choice of forum deserves little deference. Although courts generally accord deference to a plaintiff’s choice of forum, such deference is weakened when the forum chosen is not the plaintiff’s home forum and most of the relevant events occurred elsewhere. Id. citing Hunter v. Johanns, 517 F.Supp.2d 340, 344 (D.D.C. 2007); see also Kafack v. Primerica Life Ins. Co., 934 F.Supp. 3, 6-7 (D.D.C. 1996) (granting transfer when “the material events that constitute the factual predicate for the plaintiff's claims occurred” in the transferee district); See also, Islamic Republic of Iran v. Boeing Co., 477 F.Supp. 142, 144 (D.D.C. 1979) (holding plaintiff's choice of forum is accorded “diminished consideration” where the forum “has no meaningful ties to the controversy and no particular interest in the parties or subject matter.”). In this case, none of the named Plaintiffs reside in the District of Columbia. In fact, all five Plaintiffs reside in the State of Louisiana, either the Middle District or Eastern District of Louisiana.10 Defendant Rainwater and the LRA are located in the Middle District. Most, if not all, of the relevant events concerning Plaintiffs’ Road Home grant applications and grant awards took place in Baton Rouge, Louisiana. The only “residential” link in this litigation to the District of Columbia is the office location of HUD and Plaintiffs’ counsel. This is insufficient to support litigation of this case in the District of Columbia.
Additionally, the Middle District has strong connections to Plaintiffs’ case. Primarily, Plaintiffs’ claim arose from alleged acts occurring in the Middle District. The LRA was created and is located in the Middle District, the Road Home grant program was implemented in the Middle District and Plaintiffs’ Road Home applications were processed in the Middle District.
Finally, the Middle District (or the Eastern District of Louisiana) is more convenient that the District of Columbia. Again, the Plaintiffs are located in Louisiana. Defendant, the LRA, and
10Plaintiff Gloria Burns resides in Baton Rouge, Louisiana; Plaintiff Rhonda Dents resides in New Orleans, Louisiana; Plaintiff Almarie Ford resides in New Orleans, Louisiana; Plaintiff Daphne Jones resides in New Orleans, Louisiana; Plaintiff Edward Randolph resides in Luling, Louisiana. (See Complaint, ¶¶13-17.)
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its employees are all located in Baton Rouge, Louisiana. Documents and materials concerning Plaintiff’s Road Home grant applications are located in Baton Rouge, Louisiana, in the Middle District.
E. Public Interests Favor Transfer to the Middle District of Louisiana Public interests also favor transfer of this case to the Middle District, or alternatively, the Eastern District of Louisiana. Public interest considerations include: the transferee district’s familiarity with governing laws, relative congestion of the calendars of the potential transferee and transferor courts, and local interests in deciding local controversies at home. Atfab, supra. 597 F.Supp.2d at 83, citing Liban v. Churchey Group II, L.L.C., 305 F.Supp.2d 136, 143 (D.D.C. 2004). The Middle District of Louisiana is presumed to be equally familiar with the federal laws governing the Plaintiffs’ claims. Atfab, 597 F.Supp.2d at 83. There is no evidence Plaintiffs’ case would proceed more quickly in the District of Columbia. Finally, the Middle District has a stronger local interest in resolving this matter.11 Plaintiffs are challenging the LRA’s formula and action plan, both created in Louisiana; the LRA’s alleged decisions affected all Louisiana citizens - no citizens of the District of Columbia were involved; the controversy stems from the impact of Hurricanes Katrina and Rita on the State of Louisiana; and the controversy relates to the valuation of properties all of which are located in the State of Louisiana. Simply stated, there are no significant ties to the District of Columbia and this District has no local interest in resolving this case. See Abusadeh v. Chertoff, 2007 WL 2111036, at *8 (D.D.C., July 23, 2007) (“[T]here is a local interest in having localized controversies decided at home.”) The case
11To determine whether a controversy is local in nature, courts can consider a “wide variety” of factors, including, but not limited to, where the challenged decision was made, whether the decision directly affected citizens of the transferee state; the location of the controversy; whether the issue involved federal constitutional issues or local property laws; whether the controversy involved state law issues, whether the controversy has national significance and whether there was personal involvement by a District of Columbia official. Atfab, supra at 84, citing Otay Mesa Property L.P. v U.S. Department of Interior, 584 F.Supp.2d 122, 126 (D.D.C. 2008).
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involves Louisiana residents and parties. It involves Louisiana Recovery Authority and the
Louisiana Road Home Program. It involves Louisiana properties. It is a Louisiana controversy
that would be better resolved by a court in the State of Louisiana. Accordingly, Defendant’s
motion to transfer this action to the United States District Court for the Middle District of
Louisiana (or alternatively, the United States District Court for the Eastern District of Louisiana)
pursuant to 28 U.S.C. § 1404(a) should be granted.
Respectfully submitted,
/s/ Renee Culotta A.J. KROUSE (La. Bar #14426) RENEE CULOTTA (La. Bar #24436) SUZANNE M. RISEY (La. Bar #25488) FRILOT L.L.C. 1100 Poydras Street, 37th Floor New Orleans, LA 70163 Telephone: (504) 599-8016 Facsimile: (504) 599-8116 akrouse@frilot.com rculotta@frilot.com srisey@frilot.com
And
TIMOTHY E. HEFFERNAN (D.C. Bar #422923) WATT, TIEDER, HOFFAR & FITZGERALD, L.L.P. 8405 Greensboro Drive, Suite 100 McLean, Virginia 22102 Telephone: (703) 749-1000 Facsimile: (703) 893-8028 theffern@WTHF.com
ATTORNEYS FOR PAUL RAINWATER, EXECUTIVE DIRECTOR OF THE LOUISIANA RECOVERY AUTHORITY
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CERTIFICATE OF SERVICE
I hereby certify that on May 5 , 2009, a copy of the foregoing document was filed
electronically via the Court’s ECF system, through which a notice of the filing will be sent to:
Joseph Marc Sellers, Esq. Daniel Tenny, Esq.
Llezlie Lloren Green, Esq. Cohen Milstein Sellers & Toll, PLLC 1100 New York Avenue, NW, Suite 500
Washington, DC 20005-3934 (202) 408-4600
jsellers@cmht.com dtenny@cmht.com lgreen@cohenmilstein.com
Damon T. Hewitt, Esq. Debo P. Adegbile, Esq. Matthew Colangelo, Esq. ReNika C. Moore, Esq. NAACP Legal Defense & Educational Fund, Inc. 99 Hudson Street, 16th Floor New York, NY 10013
(212) 965-2200 dhewitt@naacpldf.org dadegbile@naacpldf.org mcolangelo@naacpldf.org rmoore@naacpldf.org
M. Lucia Blacksher, Esq. Greater New Orleans Fair Housing Action Center
228 St. Charles Avenue, Suite 1035 New Orleans, LA 70130 (504) 208-5050
lblacksher@gnofairhousing.org
Attorneys for Plaintiff
(continued)
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Case 1:08-cv-01938-HHK Document 28-1 Filed 05/05/09 Page 54 of 54 James D. Todd
U.S. Department of Justice 20 Massachusetts Ave., N.W.
Washington, D.C. 20001 (202) 514-3378
james.todd@usdoj.gov Attorney for U.S. Department of Housing and Urban Development
/s/ Renee Culotta
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Case 1:08-cv-01938-HHK Document 28-5 Filed 05/05/09 Page 1 of 1

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING )

ACTION CENTER, et al.

)

)

Plaintiffs,

)

)

v.

)

)

U.S. DEPARTMENT OF HOUSING AND

)

URBAN DEVELOPMENT, et al.,

)

)

Defendants.

)

No. 1:08-cv-1938-HHK

ORDER GRANTING DEFENDANT PAUL RAINWATER’S MOTION TO DISMISS Before this Court is the Motion to Dismiss for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted filed by Defendant, Paul Rainwater. After considering Defendant’s motion, statement of points and authorities in support thereof, and the entire record herein, it is hereby ordered that the Motion to Dismiss filed by Defendant, Paul Rainwater, is GRANTED. IT IS FURTHER ORDERED that Plaintiffs’ Complaint against Defendant, Paul Rainwater, is hereby DISMISSED with prejudice.

Dated: ____________________

HENRY H. KENNEDY United States District Court Judge

190375-1

Case 1:08-cv-01938-HHK Document 28-6 Filed 05/05/09 Page 1 of 1

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING )

ACTION CENTER, et al.

)

)

Plaintiffs,

)

)

v.

)

)

U.S. DEPARTMENT OF HOUSING AND

)

URBAN DEVELOPMENT, et al.,

)

)

Defendants.

)

No. 1:08-cv-1938-HHK

ORDER GRANTING DEFENDANT PAUL RAINWATER’S MOTION TO TRANSFER Before this Court is the Motion to Transfer venue filed by Defendant, Paul Rainwater.
After considering Defendant’s motion, statement of points and authorities in support thereof, and the entire record herein, it is hereby ordered that the Motion to Transfer filed by Defendant, Paul Rainwater, is GRANTED.
IT IS FURTHER ORDERED that this matter is hereby transferred to the United States District Court for the Middle District of Louisiana, located in Baton Rouge, Louisiana.
Dated: ____________________

HENRY H. KENNEDY United States District Court Judge

190376-1

 
 Case 1:08-cv-01938-HHK Document 33 Filed 06/05/09 Page 1 of 24

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING )

ACTION CENTER, et al.,

)

)

Plaintiffs,

)

)

v.

)

)

U.S. OF HOUSING AND

)

URBAN DEVELOPMENT, et al.,

)

)

Defendants.

)

No. 1:08-cv-1938-HHK

DEFENDANT U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT’S RESPONSE TO MOTION TO DISMISS AND MOTION TO TRANSFER BY DEFENDANT PAUL RAINWATER IN HIS OFFICIAL CAPACITY AS EXECUTIVE DIRECTOR, LOUISIANA RECOVERY AUTHORITY

The motion to dismiss of defendant U.S. Department of Housing and Urban Development

(“HUD”) (Doc. No. 22) demonstrated that the limited waiver of sovereign immunity extended by

Congress in § 702 of the Administrative Procedure Act (“APA”), 5 U.S.C. § 701 et seq., would

not apply in this case because Congress has provided plaintiffs with a fully adequate alternative remedy for their discrimination claims against HUD.1 HUD demonstrated that plaintiffs could

bring a cause of action directly against Defendant Paul Rainwater (“Rainwater”), in his official

capacity as Executive Director of the Louisiana Recovery Authority (“LRA”) with respect to

plaintiffs’ claims of race discrimination in the administration of Hurricane Katrina disaster

recovery Community Development Block Grant (“CDBG”) funds under the Fair Housing Act

(“FHA”), 42 U.S.C. § 3601 et seq., and the Housing and Community Development Act of 1974

(“HCDA”), 42 U.S.C. § 5301 et seq., and directly against the State of Louisiana under Title VI of

1 To be clear, HUD’s motion to dismiss demonstrated that plaintiffs failed to allege a waiver of sovereign immunity by the United States in any form, and also argued that the APA would not provide a waiver of sovereign immunity in this instance. See HUD Mot. to Dismiss at 27-29, 29-39.

Case 1:08-cv-01938-HHK Document 33 Filed 06/05/09 Page 2 of 24
the Civil Rights Act of 1964, 42 U.S.C. § 2000d-7. Defendant Rainwater’s motion to dismiss challenges, on behalf of the LRA, plaintiffs
ability to bring their race discrimination claims directly against the state agency and also challenges the ability of plaintiffs to seek judicial enforcement of the FHA and the HCDA against him under the doctrine of Ex Parte Young, 209 U.S. 123 (1908). See Rainwater Mot. to Dismiss and Mot. to Transfer (Doc. No. 28-2). HUD, both on its own and through the Department of Justice, has authority to enforce Title VI, the FHA, and the HCDA to ensure compliance with their terms. 42 U.S.C. § 2000d-1; 42 U.S.C. § 3612; 42 U.S.C. § 5311. However, because of the inherent limitations on the litigation resources of the United States, HUD has an interest in ensuring that the non-discrimination requirements of Title VI, the FHA, and the HCDA can be enforced by private parties to the extent permitted by the statutes and the Constitution.
Rainwater’s claim, on behalf of the LRA, that the Eleventh Amendment to the U.S. Constitution bars plaintiffs’ suit because the LRA is the real party at interest, ignores both the applicability of Title VI of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000d, and the Louisiana state legislature’s waiver of the LRA’s immunity and consent to suit, at least in state court. See La. Rev. Stat. § 49:220.4. Title VI not only prohibits race discrimination by recipients of federal funds but also unambiguously waives a state’s immunity from suit in federal court as a condition of accepting that financial assistance. Moreover, Congress has authorized a private cause of action under the FHA enforceable in state court. Because plaintiffs can bring suit directly against Louisiana in federal court to enforce Title VI, and because plaintiffs can bring suit directly against the LRA to enforce the FHA in state court, plaintiffs have an adequate remedy at law. Moreover, plaintiffs’ ability to pursue claims under Title VI and the FHA provides an adequate remedy to any discrimination claims they may have under the HCDA.
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Similarly meritless is Rainwater’s claim that the Eleventh Amendment bars plaintiffs’ suit against him in his official capacity as Executive Director of the LRA, despite the long-settled exception to this immunity established by Ex parte Young, 209 U.S. 123 (1908). It is well settled that Ex parte Young permits private parties to bring suit against state officials to require them to conform their conduct with federal law. Rainwater also errs in his contention that his use of federal disaster recovery CDBG funds under the HCDA implicate the “special sovereignty interests” recognized in Coeur d’Alene Tribe of Idaho v. Idaho, 521 U.S. 261 (1997). Courts have repeatedly found that the disbursal of federal funds consistent with applicable federal law does not implicate matters essential to state sovereignty.
Finally, this Court should not consider Rainwater’s motion to transfer venue to the Middle District of Louisiana, unless and until it determines it has subject matter jurisdiction over plaintiffs’ claims against HUD. If the court were to consider the motion, neither the private factors nor the public factors governing transfer motions support Rainwater’s motion. Accordingly, Rainwater’s motion to transfer should be denied. II. ARGUMENT
A. The Administrative Procedure Act Would Not Waive Sovereign Immunity of the United States for Plaintiffs’ Claims Against HUD Because There Are Other Adequate Remedies at Law
HUD’s motion to dismiss demonstrated that suit against a federal agency can be maintained under the APA only if there is a “final agency action for which there is no other adequate remedy in a court.” 5 U.S.C. § 704 (emphasis added). See HUD Mot. to Dismiss at 32-35. The D.C. Circuit has repeatedly found that suit against a federal agency under the APA is precluded whenever suit could be maintained against an allegedly discriminating non-federal entity that has accepted federal funds. See, e.g., Wash. Legal Found. v. Alexander, 984 F.2d 483 (D.C. Cir. 1993) (finding no waiver of immunity under the APA in suit against the Department of
- 3 -

Case 1:08-cv-01938-HHK Document 33 Filed 06/05/09 Page 4 of 24
Education for Title VI violations because plaintiffs had an implied right of action against individual educational institutions); Women’s Equity Action League v. Cavazos, 906 F.2d 742 (D.C. Cir. 1990) (no waiver of immunity under the APA in suit against the Departments of Education and Labor because implied rights of action existed against federally funded institutions).
In this case, plaintiffs bring race discrimination claims under the FHA and the HCDA against HUD for its “consultation,” “approval,” and “continuing oversight” of the LRA’s Road Home program. Compl. ¶¶ 49-51, 74-77. However, contrary to Rainwater’s assertion, plaintiffs can maintain these race discrimination claims under Title VI against the State of Louisiana in federal court, under the FHA directly against the LRA in state court, or, against Rainwater (or any other necessary Louisiana state officials), to the extent that plaintiffs raise valid claims for prospective injunctive relief,2 under the doctrine of Ex parte Young. Thus, because Congress has provided plaintiffs with an adequate remedy against the State of Louisiana, the LRA, and Rainwater, the APA does not provide a waiver of immunity by the United States in this instance.
1. The State of Louisiana Waived its Immunity from Suit in Federal Court Under Title VI Because it Accepted Federal Funds under the HCDA
Contrary to Rainwater’s contention, see Rainwater Mot. at 7, neither the state nor the LRA has immunity under the Eleventh Amendment in this instance. The Eleventh Amendment bars private suits against a State sued in its own name, absent a valid abrogation by Congress or waiver by the State. See Alden v. Maine, 527 U.S. 706, 755-756 (1999). “Although by its terms the Amendment applies only to suits against a State by citizens of another State,” the Supreme Court has “extended the Amendment’s applicability to suits by citizens against their own states.”
2 HUD emphasizes that it takes no position as to whether the claims alleged against Rainwater constitute valid claims for prospective injunctive relief.
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Univ. of Ala. v. Garrett, 531 U.S. 356, 362 (2001). However, Congress may exercise its enforcement power under § 5 of the Fourteenth Amendment to abrogate a state’s immunity without its consent, or a state may waive its immunity and consent to suit in federal court. College Savings Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 670 (1999); Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 238 (1985).
One way that a state may waive its immunity and consent to suit is by accepting certain federal grants. Congress “may, in the exercise of its spending power, condition its grants of funds to the States upon their taking certain actions that Congress could not require them to take, and . . . acceptance of the funds entails an agreement to the actions.” Id. at 686. Accord South Dakota v. Dole, 483 U.S. 203, 207-08 (1987). Nevertheless, Congress must exercise its waiver power explicitly: a congressional waiver provision is constitutional only if it manifests “a clear intent to condition participation in the programs funded under the Act on a State’s consent to waive its constitutional immunity.” Atascadero, 473 U.S. at 247.3
Title VI of the Civil Rights Act of 1964 provides that “[n]o person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.” 42 U.S.C. § 2000d. It is beyond question that Title VI provides a private cause of action against race discrimination. Alexander v. Sandoval, 532 U.S. 275, 279 (2001) (“private individuals may sue to enforce § 601 of Title VI and obtain both injunctive relief and damages.); Cannon v. Univ. of Chicago, 441 U.S. 677, 702 (1979) (“We have no doubt that Congress . . . understood Title VI as authorizing an implied private cause of action for victims of
3 Although it is true that an effective waiver must be “knowing,” accepting federal funds on a clear condition constitutes an objective manifestation of knowledge. As the Court said in College Savings, when the condition is explicit, “acceptance of the funds entails an agreement to the actions.” College Savings, 527 U.S. at 686.
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the prohibited discrimination.”). Moreover, Title VI further provides that “[a] State shall not be immune under the
Eleventh Amendment of the Constitution of the United States from suit in Federal court for a violation of . . . Title VI of the Civil Rights Act of 1964 or the provisions of any other Federal statute prohibiting discrimination by recipients of Federal financial assistance.” 42 U.S.C. § 2000d-7(1). Every circuit that has considered the question has held that the language of this provision of Title VI unambiguously conditions a state agency’s acceptance of federal funds on its waiver of Eleventh Amendment immunity. See, e.g., Barbour v. Wash. Metro. Area Trans. Auth., 374 F.3d. 1161, 1164 (D.C. Cir. 2004) (“the simple choice offered to states [is]: if they accept federal funds, they will lose their immunity.”). Albeit in dictum, the Supreme Court has said so as well. Lane v. Peòa, 518 U.S. 187, 200 (1986) (declaring that “Congress responded to our decision in Atascadero by crafting an unambiguous waiver of the States’ Eleventh Amendment immunity”) (emphasis added).
In this case, Rainwater does not challenge the fact that Louisiana received federal financial assistance under the HCDA in the form of disaster recovery CDBG funds. See Rainwater Mot. at 6-7. The HCDA contains several non-discrimination provisions. For example, it requires grant recipients “to certify that the grant will be conducted and administered in conformity with the Civil Rights Act of 1964 and the Fair Housing Act.” 42 U.S.C. § 5304(b)(2). In addition, the act provides that “[n]o person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity funded in whole or in part with funds made available under this chapter.” Id. § 5309(a). By accepting federal financial assistance in the form of disaster recovery CDBG funds under the HCDA, the State of Louisiana has waived its immunity and has consented to suit in federal court by private plaintiffs for
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violations of Title VI. 2. Plaintiffs Can Maintain Their FHA Claims Directly Against the LRA
Although Rainwater fails to acknowledge it, the Louisiana state legislature has expressly waived the immunity of the LRA from suit, at least in state court. The Louisiana State Constitution provides that “[t]he legislature may authorize other suits against the state, a state agency, or a political subdivision. A measure authorizing suit shall waive immunity from suit and liability.” La. Const. Art. 12, § 10. In authorizing the LRA, the Louisiana legislature provided that the LRA “shall be a body corporate with power to sue and be sued.” La. Rev. Stat. § 49:220.4(A)(1) (emphasis added). Louisiana state courts have made clear that the legislature’s grant of authority to an entity such as the LRA to “sue and be sued,” at least in state court, “amounts to a full Legislative waiver of governmental immunity from suit and liability effective and valid for all purposes.” Warfield v. Fink & McDaniel Plumbing & Heating, 203 So.2d 827, 829 (La. App. 1967). See also, e.g., Bd. of Com’rs of Port of New Orleans v. Splendour, 273 So.2d 19, 25 (La. 1973) (“Since the legislature had granted the City of Shreveport the power to sue and be sued, there was a waiver of whatever immunity the city enjoyed from suit and liability.”). Accordingly, the State of Louisiana has waived the immunity of the LRA and has consented to suit against it by private parties against the LRA, at least in state court.
Moreover, Congress has expressly authorized a private cause of action to enforce the FHA in either federal or state court. Specifically, the FHA provides that “an aggrieved person may commence a civil action in an appropriate United States district court or State court . . . to obtain appropriate relief with respect to such discriminatory housing practice or breach.” 42 U.S.C. § 3613(a) (emphasis added). In light of the Louisiana legislature’s waiver of the LRA’s immunity and consent to suit, at least in state court, plaintiffs can, at the very least, maintain their
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FHA claims, to the extent they are cognizable at all, directly against the LRA in state court.4
In addition, plaintiffs can use Title VI and the FHA to challenge the LRA’s use of disaster
recovery CDBG funds under the HCDA. See Latinos Unidos De Chelsea En Accion v. HUD,
799 F.2d 774, 794 (1st Cir. 1986) (“Title[] VI and [the FHA] may still be used to challenge any
action of discrimination by recipients of HCDA funds.”), even though § 5304 of HCDA may not
provide private parties with a direct cause of action against grant recipients such as the LRA. See
id. (finding that, although Congress’s stated intention in the HCDA was to revitalize the nation’s
cities through increased housing and economic opportunities, “principally for persons of low and
moderate income,” the statute was not enacted for “especial benefit” of minorities in the sense
required for finding a private right of action). But see Montgomery Imp. Ass’n, Inc. v.HUD, 645
F.2d 291, 297 (5th Cir. 1981) (finding private right of action to enforce non-discrimination
provision of the HCDA against grant recipients).5 Accordingly, plaintiffs’ ability to bring their
4 Rainwater argues that the discriminatory denials of grant monies under the Road Home program cannot constitute a violation of the FHA because plaintiffs already owned their homes and were not “hindered in acquiring a dwelling.” Rainwater Mot. at 30. Rainwater’s claim that the Act does not cover post-acquisition discrimination is erroneous. The broad language of § 3604(a) of the FHA encompasses post-acquisition actions that prevent residents from using and occupying their dwellings and includes no restriction to offenses related to sales or rental transactions. See 42 U.S.C. § 3604(a). Courts in this circuit have recognized that the FHA prohibits discrimination that prevents residents from occupying the housing they have already acquired. See, e.g., 2922 Sherman Ave. Tenants’ Ass’n v. Dist. of Columbia, 444 F.3d 673, 682 (D.C. Cir. 2006) (city’s alleged targeting for closure of buildings in disproportionately Hispanic neighborhoods stated claim under 3604(a)); Wai v. Allstate Ins. Co., 75 F. Supp. 2d 1, 6 (D.D.C. 1999) (alleged refusal to provide standard homeowners insurance at ordinary rates to housing provider who rented house to disabled persons states claim of making housing unavailable). We note also that Rainwater’s reliance on Clifton Terrace Assoc. v United Technologies Corp., 929 F.2d 714 (D.C. Cir. 1991), is misplaced because that case involved habitability rather than a denial of housing. See id. at 719.
To be clear, HUD’s motion to dismiss demonstrated that the FHA does not provide a waiver of sovereign immunity by the United States and that plaintiffs failed to state a claim for relief under § 3604(a) for other reasons. See HUD Mot. to Dismiss at 28-29, 40-43.
5 In any event, plaintiffs’ sole claim for relief under the HCDA is for a “fail[ure] to administer the [CDBG] program in a manner that affirmatively furthers fair housing.” Compl.
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race discrimination claims under Title VI against Louisiana and under the FHA against the LRA provides an adequate remedy to their HCDA claims. Latinos Unidos De Chelsea En Accion, 799 F.2d at 794. In sum, plaintiffs’ ability to maintain their race discrimination claims under Title VI directly against the State of Louisiana and under the FHA directly against the LRA provides an adequate remedy at law to both plaintiffs’ FHA and HCDA claims against HUD. As a result, the APA would not provide a waiver of sovereign immunity for plaintiffs’ claims against HUD in this instance.
3. Eleventh Amendment Immunity Does Not Allow States to Violate Federal Law
Contrary to Rainwater’s suggestion, even if Louisiana had not waived its immunity from suit for claims brought under Title VI by accepting funds under the HCDA, and even if the Louisiana state legislature had not waived the LRA’s immunity from suit for claims brought under the FHA, it would not mean that Rainwater, in his official capacity as Executive Director of the LRA, would be free to ignore the non-discrimination requirements of the FHA, or that if he did, private parties would not have a remedy against him in federal court. In Univ. of Alabama v. Garrett, 531 U.S. 356 (2001), the Supreme Court reaffirmed that Eleventh Amendment immunity does not authorize states to violate federal law. Rather, the Court held that even if “Congress did not validly abrogate the States’ sovereign immunity from suit by private individuals for money damages . . . [it would] not mean that [private] persons [would]
¶ 77 (citing 42 U.S.C. § 5304(b)(2)). This claim is identical to that alleged by the plaintiffs under the FHA: “Defendants have . . . failed to administer housing-related programs and activities in a manner that affirmatively furthers fair housing.” Compl. ¶ 76 (citing 42 U.S.C. § 3608(d), (e)(5)). HUD’s motion to dismiss demonstrated that these claims against HUD are not reviewable because they do not identify a circumscribed, discrete agency action that HUD is required to take. HUD’s Motion to Dismiss at 36-40 (citing Norton v. S. Utah Wilderness Alliance, 542 U.S. 55, 64 (2004)). Accordingly, the possibility that the HCDA claim may not be enforceable against the LRA would not mean that plaintiffs can maintain this claim against HUD.
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have no federal recourse against discrimination.” Id. at 374 n.9; see also Alden, 527 U.S. at 754-755 (“The constitutional privilege of a State to assert its sovereign immunity . . . does not confer upon the State a concomitant right to disregard the Constitution or valid federal law.”).
a. Rainwater Must Conform His Conduct with the Requirements of the FHA and the HCDA under the Doctrine of Ex parte Young
To reconcile these very principles — that States have Eleventh Amendment immunity from many private suits, but that they are still bound by federal law — the Supreme Court adopted the doctrine of Ex parte Young, 209 U.S. 123 (1908). See Alden, 527 U.S. at 756. In Ex parte Young, the Court held that, when a state official acts in violation of the Constitution or federal law (which the Constitution’s Supremacy Clause makes the “supreme Law of the Land”), he is deemed to be acting ultra vires and is no longer entitled to the state’s immunity from suit. More recently, the Court has unanimously reiterated that Ex parte Young permits suits against state officials in their official capacities as long as the “complaint alleges an ongoing violation of federal law and seeks relief properly characterized as prospective.” Verizon Md. v. Pub. Serv. Com’n of Md., 535 U.S. 635, 646 (2002). See also Edelman v. Jordan, 415 U.S. 651, 664, 667-668 (1974); Kentucky v. Graham, 473 U.S. 159, 167 n.14 (1985). By limiting relief to prospective injunctions against officials, the doctrine of Ex parte Young avoids courts entering judgments directly against the state but, at the same time, prevents the state (through its officials) from continuing illegal action.
In this case, HUD takes no position as to whether the plaintiffs have stated a claim against Rainwater for prospective injunctive relief under the FHA or the HCDA. To the extent that the plaintiffs have met this requirement, however, Rainwater’s contention that Ex parte Young does not apply is without merit. Rainwater claims that plaintiffs acknowledge that “the LRA, and not Paul Rainwater in his official capacity as Executive Director of the LRA[,] was responsible for
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. . . the Road Home . . . grant formula.” Rainwater Mot. at 11. He further claims that the Louisiana statute authorizing the LRA “provides that the LRA, not its Executive Director, has the authority to establish ‘a clear and effective process for the implementation of action plans for the CDBG.’” Rainwater Mot. at 5-6 (citing La. Rev. Stat. § 49:220.5). But that same statute mandates that “[t]he executive director shall have the . . . power[] . . . to discharge all operational, administrative and executive functions of the [LRA].” La. Rev. Stat. § 49:220.5(D) (emphasis added). Because Louisiana state law makes Rainwater responsible for “all . . . functions” of the LRA, the doctrine of Ex Parte Young permits suit against him to the extent those actions constitute an ongoing violation of federal law.
Rainwater further attempts to disclaim responsibility for the Road Home program by alleging that the actions of the LRA pass through “multiple layers of review” beyond the agency, including an oversight board and the state legislature itself. Rainwater Mot. at 6-7. However, the federal special appropriations at issue in this case conditioned receipts of the disaster recovery CDBG funds on each governor’s designation of an entity that the funds would be “administered through.” Pub. L. 109-148. The Governor of Louisiana designated the LRA to be that entity. See La. Exec. Order KBB 2005-63 (Oct. 17, 2005). Because the LRA has been designated as the entity responsible for administering the CDBG funds, and because Louisiana state law gives Rainwater power over the administrative functions of the LRA, the suit against Rainwater falls squarely within the Ex parte Young exception to Eleventh Amendment immunity, to the extent the plaintiffs’ request for relief is properly characterized as one for prospective injunctive relief for an ongoing violation of federal law. Accord Verizon Md., 535 U.S. at 646.
Even if Rainwater were correct that he alone does not control the use of disaster recovery CDBG funds or the Road Home program at issue in this case, it would not mean, as Rainwater suggests, that Ex parte Young is inapplicable. Rainwater Mot. at 11. Rather, it would mean only
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that, in order to ensure compliance with the requirements of the FHA, plaintiffs would have to bring suit against additional Louisiana state officials in their official capacities under the doctrine of Ex parte Young.
b. Coeur d’Alene Tribe of Idaho v. Idaho Does Not Apply Rainwater contends that the receipt and disbursal of federal disaster recovery funds under the HCDA implicates special sovereignty interests of the state, and therefore invokes the exception to the Ex parte Young doctrine that the Supreme Court articulated in Coeur d’Alene Tribe of Idaho v. Idaho, 521 U.S. 261 (1997). See Rainwater Mot. at 16-17. However, this assertion ignores the narrow limits of Coeur d’Alene and runs contrary to the weight of circuit court precedent declining to extend Coeur d’Alene to cases concerning the administration of federally funded programs. In Coeur d’Alene, a plurality of the Court found that in the “particular and special circumstances” of the case, the sovereign interests of the state were so pressing as to permit an exception to Ex parte Young. Coeur d’Alene, 521 U.S. at 287 (1997). These interests were sufficiently pressing because the dispute concerned Idaho’s control of its submerged lands in the face of a suit that was the “functional equivalent” of a quiet title action. Id. at 281. Five years later, the Court confirmed the narrow reach of Coeur d’Alene in Verizon Md., 535 U.S. at 646. In Verizon, a unanimous Court did not undertake any inquiry into whether the suit at hand might implicate special state sovereignty concerns. The Court relied instead on the concurrence and dissent in Coeur d’Alene in holding that, to determine whether Ex parte Young applies, “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” Id. at 646 (quoting Coeur d’Alene, 521 US at 296 (O’Connor, J., concurring), and citing id. at 288-89 (Souter, J., dissenting)). Similarly, the D.C. Circuit has declined to “extend Coeur d’Alene
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beyond its “‘particular and special circumstance,’ which involved the protection of a State’s land.” Vann v. Kempthorne, 534 F.3d 741, 756 (D.C. Cir. 2008) (quoting Coeur d’Alene, 521 U.S. at 287). Accord Tarrant Regional Water District v. Seven Oaks, 545 F.3d 906, 912 (10th Cir. 2008) (finding no Eleventh Amendment bar to a suit concerning a state’s right to use and sell surface waters because the Supreme Court “limited the reach of Coeur d’Alene” in Verizon Md.). Accordingly, the narrow reach of Coeur d’Alene does not encompass the suit against Rainwater in this instance, and Ex parte Young should apply to the extent the plaintiffs allege a valid claim for prospective injunctive relief.
Rainwater cites only a single case to support his claim that Coeur d’Alene applies. Rainwater Mot. at 17 (citing Barton v. Summers, 293 F.3d 944 (6th Cir. 2002)). In that case, the Sixth Circuit found that Coeur d’Alene would apply to a suit by Medicaid recipients to intercept tobacco settlement money due to Kentucky and Tennessee. Barton 293 F.3d at 951. However, the court rested its decision in large part on Congress’s explicit mandate that “ the states are specifically allowed to allocate the [settlement] proceeds as they see fit.” Id. By contrast, Congress has given no such blanket discretion to the states in conjunction with the disaster recovery CDBG funds at issue in this case, but has instead delineated the eligible activities and other requirements for use of the funds. Indeed, unlike the tobacco funds at issue in Barton, Rainwater cannot dispute that the funds at issue in this case come directly from the Federal treasury, pursuant to the non-discrimination requirements of the HCDA, rather than from the proceeds of a settlement brought by the states against private companies.6
6 Of the eight other circuits addressing near-identical challenges to the Medicaid tobacco settlement, none has found Coeur d’Alene applicable. See Cardenas v. Anzai, 311 F.3d 929 (9th Cir. 2002); Strawser v. Atkins, 290 F.3d 720 (4th Cir. 2002); Greenless v. Almond, 277 F.3d 601 (1st Cir. 2002); Harris v. Owens, 264 F.3d 1282 (10th Cir. 2001); Watson v. Texas, 261 F.3d 601 (5th Cir. 2001); McClendon v. Georgia Dep’t of Cmty. Health, 261 F.3d. 1252 (11th Cir. 2001); Tyler v. Douglas, 280 F.3d 116 (2d Cir. 2001); Floyd v. Thompson, 227 F.3d 1029 (7th Cir.
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Indeed, courts have consistently found that no special sovereignty interests are at stake in an Ex parte Young action, like the one at hand, seeking to require state officials to follow the requirements of federal law. See, e.g., Fla. Ass’n of Rehab. Facilities v. Fla. Dep’t of Health & Rehab. Servs., 225 F.3d 1208, 1218-19 (11th Cir. 2000) (finding “no important sovereignty interests” in “a suit ... seeking to enforce compliance with the federal program under which [the state] ha[s] accepted funds.”); Marie O. v. Edgar, 131 F.3d 610, 617 & n.13 (7th Cir. 1997) (permitting a Young-based suit for provision of early intervention services required under the Individuals with Disabilities Education Act). In the Medicaid context, the Fourth, Ninth, and Eleventh Circuits have all permitted such suits even when the outcome had the potential to increase state expenses. Antrican v. Odom, 290 F.3d 178, 189 (4th Cir. 2004) (finding no Eleventh Amendment bar to a suit against state officials alleging inadequacies in the provision of Medicaid dental services); Children’s Hosp. & Health Ctr. v. Belshe, 188 F.3d 1090, 1095 (9th Cir. 1999) (finding a Young exception for a challenge to Medicaid reimbursement rates); Doe v. Chiles, 136 F.3d 709, 719-20 (11th Cir. 1998) (permitting a Young action for “reasonable promptness” under the Medicaid Act). The weight of precedent, then, dictates that the Coeur d’Alene exception does not apply in this matter.
Accordingly, because plaintiffs can maintain suit under the doctrine of Ex parte Young against Rainwater (and any other Louisiana State officials who administer the disaster recovery
2000). The majority of the circuits resolved these challenges on other grounds, but the two circuits that did consider Ex parte Young held that it should apply and explicitly found that Coeur d’Alene was not controlling. Cardenas, 311 F.3d at 938 (“We also reject the defendants’ efforts to bring the plaintiffs’ claims within the Coeur d’Alene.”); Harris, 264 F.3d at 1293 (“the Eleventh Amendment does not ‘extend to every situation where a state property interest is at issue;’ Coeur d’Alene represents an ‘extreme and unusual case.’”) (quoting Elephant Butte, 160 F.3d 602, 612 (10th Cir. 1998)). In light of the D.C. Circuit’s finding in Vann v. Kempthorne concerning the narrow reach of Coeur d’Alene, this Court should adopt the reasoning of the Cardenas and Harris courts and reject that of the Sixth Circuit in Barton.
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CDBG funds and the Road Home program at issue in this case), plaintiffs have an adequate remedy at law. Here again, the existence of an adequate alternative remedy available to plaintiffs means that the APA would not provide a waiver of sovereign immunity by the United States for plaintiffs’ claims against HUD.
B. Rainwater’s Motion to Transfer Is Without Merit Rainwater errs when he asserts that this suit should be transferred to the Middle or Eastern District of Louisiana, and that this court can consider such a transfer “at any time.” Rainwater Mot. at 38. In fact, a court generally cannot address a motion to transfer until it has established its subject-matter jurisdiction, which is a “fundamentally preliminary” inquiry. Leroy v. Great W. United Corp., 443 U.S. 173, 180 (1979). Only after this court has determined whether plaintiffs have standing and whether they have overcome the sovereign immunity of defendants HUD and Rainwater can it reach the issue of venue. At that point, if this court has not dismissed the suit against HUD, it should find that transfer under Section 1404(a) is inappropriate. The plaintiff’s choice of forum deserves “considerable weight,” Pain v. United Techs. Corp., 637 F.2d 775, 783 (D.C. Cir. 1980), and the private and public factors relevant in a transfer determination weigh against disturbing plaintiff’s choice to file this suit in the District of Columbia. 1. This Court Should Determine Whether It Has Subject Matter Jurisdiction
Over Plaintiffs’ Claims Against HUD Before It Considers Rainwater’s Motion to Transfer Contrary to Rainwater’s contention, Rainwater Mot. at 38, it would not be appropriate for this Court to consider his transfer motion before determining its subject-matter jurisdiction. As noted above, the Supreme Court has long recognized that the issue of subject-matter jurisdiction is “fundamentally preliminary.” Leroy, 443 U.S. at 180. Courts consistently refuse to consider transfer motions before resolving questions of subject-matter jurisdiction. See, e.g.,
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DiPilato v. Commonwealth Ass’n of School Administrators, Local 502, 588 F. Supp. 2d 631, 634 (E.D. Pa. 2008) (finding that because “no federal question jurisdiction exists . . . this court lacks the power to transfer this case”); Marotta Gund Budd & Dzera LLC v. Costa, 340 B.R. 661, 663 n.2 (D.N.H. 2006) (“Transfer under § 1404(a) is possible only if venue is proper in the original forum and federal jurisdiction existed there. If subject-matter jurisdiction is lacking, there is no power to do anything with the case except dismiss”) (quoting 15 Charles A. Wright, et al., Fed. Practice and Procedure § 3844 (2005)). Accord Morongo Band of Mission Indians v. Cal. State Bd. of Equalization, 858 F.2d 1376, 1380 (9th Cir. 1988) (“If jurisdiction is lacking at the outset, the district court has “no power to do anything with the case except dismiss.”) (quoting 15 Fed. Practice and Procedure § 3844); Atlantic Ship Rigging Co. v. McLellan, 288 F.2d 589, 591 (3d Cir. 1961) (“Where, as here, the court lacks jurisdiction over the subject-matter, [a defect that] precludes it from acting at all, a fortiori a court lacks power to transfer.”); O’Quinn v. CNH America, LLC, 457 F. Supp. 2d 678, 683 n.7 (E.D. Va. 2006) (declining to consider motion to transfer because court found it lacked subject-matter jurisdiction).
The Supreme Court’s recent decision in Sinochem Intern. Co. Ltd. v. Malaysia Intern. Shipping Corp, 549 U.S. 422 (2007), is not to the contrary. The Sinochem Court reiterated that when “a court can readily determine that it lacks jurisdiction over the cause or the defendant, the proper course [is] to dismiss on that ground.” Id. at 436. In Sinochem, however, jurisdictional questions posed an exceptional burden because “the district court’s subject-matter jurisdiction presented an issue of first impression” and discovery concerning personal jurisdiction would have been both expensive and time consuming. Id. at 435. In this limited circumstance, the Court found that a preliminary dismissal on the grounds of forum non conveniens was appropriate without consideration of jurisdiction because such an approach clearly represented “the less burdensome course.” Id. at 436. The Court emphasized, however, that “[i]n the mine
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run of cases jurisdiction ‘will involve no arduous inquiry’ and both judicial economy and the consideration ordinarily accorded the plaintiff’s choice of forum ‘should impel the federal court to dispose of [those] issue[s] first.’” Id. at 436 (quoting Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 587-88 (1999)).
Here, both as a matter of law and practicality, this court should first determine whether it has subject-matter jurisdiction over plaintiffs’ claims against HUD before considering the motion to transfer. This matter falls squarely within the “mine run of cases” in which establishing jurisdiction first will represent the “less burdensome course.” Sinochem, 549 U.S. at 436. No further discovery is required for the court to assess whether it has subject-matter jurisdiction over plaintiffs’ claims against HUD. In contrast, considering Rainwater’s motion to transfer first would interfere both with “judicial economy and the consideration ordinarily afforded plaintiff’s choice of forum.” Id. Plaintiffs’ decision to file this complaint in the District of Columbia was almost certainly prompted in part by the recognition that HUD’s offices are in the District of Columbia and that all of the challenged HUD actions occurred here. If, however, HUD is not an appropriate party to this suit because subject-matter jurisdiction is lacking, then plaintiffs’ interest in this court hearing the suit may be diminished. Therefore, a determination of subjectmatter jurisdiction is a necessary precursor to an accurate evaluation of the motion to transfer.
Indeed, while Rainwater notes that in this district one court has ordered a transfer before assessing subject-matter jurisdiction, that court was prompted to do so by “adjudicative efficiency” concerns that are not present here. See Rainwater Mot. at 38 (citing Aftab v. Gonzalez, 597 F. Supp. 2d 76 (D.D.C. 2009)). In Aftab, the court found that venue in the District of Columbia was appropriate because federal officials had been named as defendants. However, unlike in the matter at hand, the alleged involvement of the officials located in the District of Columbia was so “attenuated and insignificant,” that even if the officials were proper parties to
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the suit, their presence presented no obstacle to a transfer to the alternate venue. Id. at 82. In the present case, by contrast, plaintiffs challenge HUD’s consultation, approval, and continuing oversight of Louisiana’s Road Home program. Compl. ¶¶ 49-51. To the extent plaintiffs’ claims against HUD are cognizable, the official actions are not obviously “attenuated” or “insignificant” to the suit. Thus, the court must resolve whether HUD is an appropriate party before it can properly evaluate the motion to transfer.7
2. If HUD is to Remain in this Suit, Transfer Is Not Appropriate Even if the court determines that it has jurisdiction over plaintiffs’ claims against HUD, transfer to another venue is inappropriate. The statute authorizing motions to transfer permits a court to transfer a suit to another district where the action could have been brought if such a transfer accommodates “the convenience of parties and witnesses” and is “in the interest of justice.” 28 U.S.C. §1404(a). The moving party has the burden of establishing that transfer is proper under this statute. Trout Unlimited v. Dep’t of Agric., 944 F. Supp. 13, 16 (D.D.C. 1996). Rainwater has not met this burden. Before ordering transfer to another district in which venue is proper, a district court “must weigh several private and public interest factors to determine whether transfer would, indeed, be ‘in the interest of justice.’” Elemary v. Holzmann, 533 F. Supp. 2d 144, 149 (D.D.C. 2008). The private interest factors that must be weighed include: (1) the plaintiffs choice of forum, unless the balance of convenience is strongly in favor of the defendants; (2) the defendants’ choice of forum; (3) whether the claim arose elsewhere; (4) the convenience of the parties; (5) the convenience of the witnesses, but only to the extent that the witnesses may actually be unavailable for trial in one of the fora; and (6) the ease of access to sources of proof.
7 If, however, this court determines that subject-matter jurisdiction with respect to HUD is improper and dismisses HUD from the suit, HUD takes no position on whether the transfer motion should be approved.
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Otay Mesa Property, L.P. v. U.S. Dep’t of Interior, 584 F. Supp. 2d 122, 124-25 (D.D.C. 2008). In the present case, none of these factors weigh in favor of transfer.
The first factor, the plaintiffs’ choice of forum, strongly supports retaining this suit in the District of Columbia. The D.C. Circuit has expressed a “strong presumption against disturbing plaintiffs’ initial forum choice.” Pain v. United Techs. Corp, 637 F.2d 775, 784 (D.C. Cir. 1980). Rainwater errs in his contention that in this case, plaintiffs’ “choice of forum deserves little deference” because plaintiffs supposedly lack sufficient connection to the District of Columbia. Rainwater ignores that the National Fair Housing Alliance, one of the the associational plaintiffs who brings this action, is headquartered in Washington, D.C. Rainwater also errs in his contention that the plaintiffs’ choice of forum is entitled to less deference because “most of the relevant events occurred elsewhere.” Rainwater Mot. at 42. To the extent plaintiffs’ claims against HUD are cognizable, the events relevant to those claims occurred almost exclusively within the District of Columbia. HUD’s “consultation,” “approval,” and “continuing oversight” occurred and occurs in Washington, D.C. HUD Mot. to Dismiss at 1314.
For the same reason, Rainwater errs in his suggestion that the D.C. Circuit’s warnings in Cameron v. Thornburgh, 983 F.2d 253, 256 (D.C. Cir. 1993), apply here. In that case, the court cautioned that district courts should “guard against the danger that . . . . [b]y naming high government officials as defendants, a plaintiff could bring suit here that properly should be pursued elsewhere.” Id. But in Cameron, the court demonstrated that its true concern was frivolous suits against high officials: it not only transferred the case, but dismissed the action against the federal officials whose presence in the action had justified venue in the District of Columbia. Id. at 257. As HUD’s motion to dismiss demonstrated, dismissal of plaintiffs’ claims against HUD in the proper course of action here. See HUD Mot. to Dismiss passim. But to the
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extent the Court determines that it has subject matter jurisdiction over plaintiffs’ claims against HUD, the events material to those claims occurred in the District of Columbia and the plaintiffs’ choice to lodge suit here deserves “considerable . . . weight.”8 Pain, 637 F.2d at 783. Indeed, another court in this district has found that even when “the nexus between the present controversy and the [proposed alternate venue] is marginally stronger than the nexus between the controversy and the District of Columbia,” and even when plaintiff’s choice is accorded diminished deference, this decreased deference is still enough to “tip[] the balance in [the plaintiffs’] favor.” Otay Mesa, 584 F. Supp. 2d at 125. When, as in this case, the nexus between the controversy and the District of Columbia is itself strong, and and the deference is undiminished, the balance should be decidedly in favor of respecting plaintiffs’ chosen venue.
The other private factors do not serve to shift this balance. It is true that Rainwater supports a motion to transfer, but HUD opposes such a motion. Thus, the second factor – the defendants’ choice of forum – does not favor Rainwater’s motion. The third factor – the location where the claims arose – similarly fails to support a transfer. Although Rainwater argues that claims against him arose in the Middle District of Louisiana, the claims against HUD, to the extent they are even cognizable, arose in the District of Columbia. And while Rainwater has claimed that the fourth factor, the convenience of the parties, weighs in his favor, Rainwater Mot. at 42-43, the plaintiffs clearly view Washington, D.C. as the more convenient forum. HUD would also be inconvenienced by a transfer to Louisiana because HUD’s record of decision making is located in the District of Columbia.
8 Rainwater’s citation to Al-Ahmed v. Chertoff, 564 F. Supp. 2d 16 (D.D.C. 2008), a recent district case approving a transfer motion in part because of the heightened scrutiny of venue suggested by Cameron, is inapposite. The Al-Ahmed Court specifically found that the challenged federal actions – the adjudications of the plaintiff’s immigration applications – would occur in the local immigration offices, not, as in the matter at hand, in the agency headquarters located in the District of Columbia. Id. at 18.
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The last two private factors, the “convenience to the witnesses” and the “ease of access to sources of proof,” also weigh against transferring this case to the Middle District of Louisiana. Plaintiffs have suggested that their case against HUD is not one to be judged solely on the administrative record, a contention HUD strongly disputes. But if this were the case, all key HUD witnesses and documents are located in the District of Columbia. To the extent, though, that this matter will be tried solely on the administrative record, that record is located in Washington, D.C. Courts have found that in a case involving review of an agency action “the location of the administrative record . . . . carries some weight.” Sierra Club v. Flowers, 276 F. Supp. 2d 62, 68 (D.D.C. 2003). Thus, none of the private interest factors act to displace the “considerable . . . weight” given to the plaintiffs’ choice of venue. Pain, 637 F.2d at 783.
Nor do the public interest factors favor a transfer. Two of the public interest factors that courts typically consider – the familiarity of each district with the relevant laws, and the relative congestion of the districts’ calendars, Trout Unlimited, 944 F. Supp. at 16 – are irrelevant here. All federal courts are presumed to have familiarity with federal laws, In re Korean Air Lines Disaster of Sept. 1, 1983, 829 F.2d 1171, 1175 (D.C. Cir. 1987), and the relative congestion of the courts’ dockets is not decisive. Rainwater therefore relies primarily on the third public interest factor: the interest in deciding local controversies at home. Rainwater Mot. at 43-44. But many of the considerations courts have identified as significant in determining whether a controversy is local in nature counsel against such a determination in this case. These factors include:
where the challenged decision was made; whether the decision directly affected the citizens of the transferee state; the location of the controversy; whether the controversy involved issues of state law, whether the controversy has some national significance; and whether there was personal involvement by a District of Columbia official. Otay Mesa, 584 F. Supp. 2d at 126. While it is true that the decisions in the matter at hand will
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Case 1:08-cv-01938-HHK Document 33 Filed 06/05/09 Page 22 of 24
directly affect the citizens of Louisiana, the challenged HUD decisions were made in the District of Columbia, and the claims all charge violations of federal, rather than state, law. Moreover, if HUD remains a defendant, the controversy – involving what constitutes discriminatory oversight and administration of federal housing grant programs – could significantly affect HUD’s administration of the CDBG program in the future. The local interests in this case, then, are not strong enough to outweigh the private interests and the customary deference afforded to the plaintiffs’ choice of forum. See id. at 126-28 (finding that local interests did not support transferring a case concerning the protection of a San Diego endangered fairy shrimp habitat from the District of Columbia because federal government actors, federal law, and national interests were involved).
In sum, Rainwater has not met his burden of proving that a transfer of this case to the Middle or Eastern District of Louisiana will accommodate “the convenience of parties and witnesses.” 28 U.S.C. § 1404(a). Nor has he demonstrated that such a transfer is “in the interest of justice.” Id. If the HUD remains a party to the suit, then both convenience and justice are best served by hearing the case in the District of Columbia. III. CONCLUSION
For the reasons set forth above, this Court should deny the Motion to Dismiss and Motion to Transfer of defendant Rainwater.
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Case 1:08-cv-01938-HHK Document 33 Filed 06/05/09 Page 23 of 24

Dated: June 5, 2009

Respectfully submitted,
TONY WEST Assistant Attorney General, Civil Division
CHANNING D. PHILLIPS Acting U.S. Attorney for the District of Columbia
/s/ James D. Todd, Jr. MICHAEL SITCOV Assistant Branch Director JAMES D. TODD, JR. Senior Counsel U.S. DEPARTMENT OF JUSTICE9 Civil Division, Federal Programs Branch 20 Massachusetts Avenue N.W. Washington, DC 20001 (202) 514-3378 (202) 616-8470 (fax) james.todd@usdoj.gov Attorneys for Defendant U.S. Department of Housing and Urban Development

9 Colleen Roh, a Summer Legal Intern at the Department of Justice, contributed substantially to the drafting of this brief.
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Case 1:08-cv-01938-HHK Document 33 Filed 06/05/09 Page 24 of 24

CERTIFICATE OF SERVICE I hereby certify that on June 5, 2009, a copy of the foregoing document was filed electronically via the Court’s ECF system, through which a notice of the filing will be sent to:

Joseph Marc Sellers, Esq. Daniel Tenny, Esq.
Llezlie Lloren Green, Esq. COHEN MILSTEIN SELLERS & TOLL PLLC
1100 New York Avenue, NW, Suite 500 Washington , DC 20005-3934 (202) 408-4600 jsellers@cohenmilstein.com dtenny@cohenmilstein.com lgreen@cohenmilstein.com
Damon T. Hewitt, Esq. Debo P. Adegbile, Esq. Matthew Colangelo, Esq. ReNika C. Moore, Esq. NAACP LEGAL DEFENSE & EDUCATIONAL FUND, INC. 99 Hudson Street, 16th Floor New York , NY 10013
(212) 965-2200 dhewitt@naacpldf.org dadegbile@naacpldf.org mcolangelo@naacpldf.org rmoore@naacpldf.org

Timothy E. Heffernan, Esq. WATT, TIEDER, HOFFAR &
FITZGERALD, L.L.P. 8405 Greensboro Drive, Suite 100
McLean, Virginia 22102 (703) 749-1000
theffern@WTHF.com
A.J. Krouse, Esq. Renee Culotta, Esq. Suzanne M. Risey, Esq.
FRILOT L.L.C. 1100 Poydras St., 36th Floor
New Orleans, LA 70163 (504) 599-8016
akrouse@frilot.com rculotta@frilot.com srisey@frilot.com
Attorneys for Defendant, Paul Rainwater, Executive Director of the Louisiana Recovery Authority

M. Lucia Blacksher, Esq. GREATER NEW ORLEANS FAIR HOUSING
ACTION CENTER 228 St. Charles Avenue, Suite 1035
New Orleans , LA 70130 (504) 208-5050
lblacksher@gnofairhousing.org

Attorneys for Plaintiffs

/s/ James D. Todd, Jr. JAMES D. TODD, JR.

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Case 1:08-cv-01938-HHK Document 33-1 Filed 06/05/09 Page 1 of 1

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING )

ACTION CENTER, et al.,

)

)

Plaintiffs,

)

)

v.

)

)

U.S. DEPARTMENT OF HOUSING AND

)

URBAN DEVELOPMENT, et al.,

)

)

Defendants.

)

No. 1:08-cv-1938-HHK

ORDER DENYING MOTION TO DISMISS AND MOTION TO TRANSFER BY DEFENDANT PAUL RAINWATER, IN HIS OFFICIAL CAPACITY AS EXECUTIVE DIRECTOR, LOUISIANA RECOVERY AUTHORITY

Before this Court is the motion to dismiss for lack of jurisdiction and for failure to state a

claim on which relief can be granted and motion to transfer of defendant, Paul Rainwater, in his

official capacity as Executive Director of the Louisiana Recovery Authority. For the reasons set

forth in opposition by defendant U.S. Department of Housing and Urban Development to

Rainwater’s motion to dismiss and motion to transfer, and the entire record herein, it is hereby

ORDERED that Rainwater’s Motion to Dismiss and Motion to Transfer are DENIED.

Dated: _______________

/s/ Henry H. Kennedy HENRY H. KENNEDY United States District Court Judge

 
 Case 1:08-cv-01938-HHK Document 34 Filed 06/05/09 Page 1 of 77

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, et al.,

Plaintiffs,

v.

No. 1:08-cv-1938-HHK

UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, et al.,

Defendants.

PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTIONS TO DISMISS AND MOTION TO TRANSFER
Plaintiffs Greater New Orleans Fair Housing Action Center et al. respectfully submit this memorandum of law opposing (1) the U.S. Department of Housing and Urban Development’s motion to dismiss (Dkt. 22); (2) Paul Rainwater’s motion to dismiss (Dkt. 28); and (3) Paul Rainwater’s motion to transfer pursuant to 28 U.S.C. § 1404(a) (Dkt. 28).

Case 1:08-cv-01938-HHK Document 34 Filed 06/05/09 Page 2 of 77
TABLE OF CONTENTS
INTRODUCTION ......................................................................................................................... 1 BACKGROUND ........................................................................................................................... 1 ARGUMENT................................................................................................................................. 6 I. Defendants’ motions to dismiss for lack of subject-matter jurisdiction should be
denied................................................................................................................................. 6 A. Plaintiffs have standing to challenge HUD’s unlawful conduct............................ 6 B. The case is not moot. ........................................................................................... 12 C. Neither the sovereign immunity of the United States nor the Eleventh
Amendment immunity of Louisiana bars this suit............................................... 15 1. Congress has waived the immunity of the United States in actions,
like this one, that seek relief other than money damages. ....................... 16 2. This Court has subject-matter jurisdiction over Plaintiffs’ claims
against Rainwater because they are claims against a state officer for prospective relief from unlawful acts................................................. 19 a. Ex parte Young applies because Plaintiffs seek no funds
from the state treasury.................................................................. 20 b. The decision in Coeur d’Alene is inapplicable. ........................... 23 c. There can be no Eleventh Amendment immunity for
violations of the HCDA. .............................................................. 25 II. Defendants’ motions to dismiss for failure to state a claim should be denied................. 25
A. Rainwater is subject to the requirements of both the Fair Housing Act and the HCDA. ........................................................................................................... 26 1. This Court must reject Rainwater’s disingenuous argument that the Road Home program is beyond the reach of the Fair Housing Act......... 26 2. Plaintiffs may enforce 42 U.S.C. § 5304(b) against Rainwater through a direct right of action or under 42 U.S.C. § 1983. .................... 30 a. Congress intended the HCDA to be directly enforceable through an implied right of action. .............................................. 30 b. Plaintiffs may enforce the HCDA against Rainwater under 42 U.S.C. § 1983.......................................................................... 34
B. The Administrative Procedure Act does not preclude Plaintiffs’ claims against HUD......................................................................................................... 36 1. Title VIII and the HCDA directly confer a right of action to challenge HUD’s discriminatory conduct................................................ 37
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TABLE OF CONTENTS (continued)

Page

2. Plaintiffs’ claims against HUD are reviewable under 5 U.S.C. § 704......................................................................................................... 39
a. Plaintiffs have no adequate remedy for HUD’s discriminatory conduct other than a remedy from HUD. ............ 39
b. Plaintiffs challenge final agency action. ...................................... 44
3. The “discrete agency action” requirement does not preclude review of HUD’s actions in this case................................................................... 44
a. HUD’s conduct is properly reviewed pursuant to § 706(2)......... 45
b. Even if HUD’s actions can only be reviewed pursuant to § 706(1), the “discrete agency action” requirement is met here............................................................................................... 47
C. Plaintiffs’ Complaint alleges sufficient facts to state a claim against both HUD and Rainwater for violations of Title VIII and the HCDA. ....................... 50
1. HUD’s motion to dismiss must be denied because Plaintiffs allege sufficient facts to establish violations of Title VIII and the HCDA. ....... 51
2. Rainwater’s motion to dismiss must be denied because Plaintiffs have alleged sufficient facts to state a Title VIII disparate impact claim......................................................................................................... 56
D. The individual Plaintiffs did not waive their right to sue. ................................... 58
III. Rainwater’s motion to transfer should be denied because Rainwater has failed to carry his heavy burden of establishing that this Court should disturb Plaintiffs’ choice of forum. ............................................................................................................... 60
A. Rainwater has not demonstrated that the private interests of the parties and witnesses weigh in favor of transferring this case. .............................................. 60
B. Rainwater has not demonstrated that public interests weigh in favor of transferring this case. ........................................................................................... 63
CONCLUSION............................................................................................................................ 65

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TABLE OF AUTHORITIES

CASES

Page(s)

2922 Sherman Ave. Tenants’ Ass’n v. Dist. of Columbia, 444 F.3d 673 (D.C. Cir. 2006) .....................................................................................29, 51, 57

*Action Alliance of Senior Citizens of Greater Phila. v. Heckler, 789 F.2d 931 (D.C. Cir. 1986) .............................................................................................9, 10

Aktieselskabet AF 21 Nov. 2001 v. Fame Jeans Inc., 525 F.3d 8 (D.C. Cir. 2008).................51, 53

Al-Ahmed v. Chertoff, 564 F. Supp. 2d 16 (D.D.C. 2008).............................................................62

Allen v. Wright, 468 U.S. 737 (1984) ........................................................................................9, 10

*Alliance to Save the Mattaponi v. U.S. Army Corps of Eng’rs, 515 F. Supp. 2d 1 (D.D.C. 2007) .............................................................................................46

Alvarez v. Hill, 518 F.3d 1152 (9th Cir. 2008) ..............................................................................17

Am. Fed’n of Gov’t Employees v. Hawley, 543 F. Supp. 2d 44 (D.D.C. 2008).............................31

Am. Horse Prot. Ass’n v. Lyng, 812 F.2d 1 (D.C. Cir. 1987) ........................................................46

*America’s Cmty. Bankers v. FDIC, 200 F.3d 822 (D.C. Cir. 2000)....................................7, 8, 18

American Disabled for Attendant Programs Today (ADAPT) v. HUD, 170 F.3d 381 (3d Cir. 1999).....................................................................................................43

Anderson v. Jackson, No. 06-3298, 2007 WL 458232 (E.D. La. Feb. 6, 2007)............................35

Anderson v. Zubieta, 180 F.3d 329 (D.C. Cir. 1999).....................................................................58

Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) ................................................................................53, 54

Barton v. Summers, 293 F.3d 944 (6th Cir. 2002).........................................................................24

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ..........................................................................17

Blessing v. Freestone, 520 U.S. 329 (1997) ............................................................................34, 35

*Bowen v. Massachusetts, 487 U.S. 879 (1988)..........................................................17, 18, 40, 42

Califano v. Sanders, 430 U.S. 99 (1977) .......................................................................................16

Cardenas v. Anzai, 311 F.3d 929 (9th Cir. 2002) ..........................................................................24 iii

Case 1:08-cv-01938-HHK Document 34 Filed 06/05/09 Page 5 of 77
CC Distribs., Inc. v. United States, 883 F.2d 146 (D.C. Cir. 1989) ..............................................12 Chan v. City of N.Y., 803 F. Supp. 710 (S.D.N.Y. 1992) ............................................................. 35 *Chan v. City of N.Y., 1 F.3d 96 (2d Cir. 1993) ......................................................................31, 34 Charleston Hous. Auth. v. USDA, 419 F.3d 729 (8th Cir. 2005)...................................................57 City of Edmonds v. Oxford House, Inc., 514 U.S. 725 (1995).......................................................39 *City of Houston v. HUD, 24 F.3d 1421 (D.C. Cir. 1994) ..........................................12, 13, 14, 15 Colony Fed. Sav. & Loan Ass’n v. Harris, 482 F. Supp. 296 (W.D. Pa. 1980) ............................42 Cort v. Ash, 422 U.S. 66 (1975).........................................................................................30, 32, 33 Ctr. for Auto Safety v. Nat’l Highway Traffic Safety Admin.,
793 F.2d 1322 (D.C. Cir. 1986) ...........................................................................................8, 10 *Darst-Webbe Tenant Ass’n Bd. v. St. Louis Hous. Auth., 417 F.3d 898 (8th Cir. 2005).......50, 56 Davis v. HUD, 627 F.2d 942 (9th Cir. 1980)...........................................................................14, 42 Dean v. Martinez, 336 F. Supp. 2d 477 (D. Md. 2004) .................................................................41 Dynalantic Corp. v. Dep’t of Defense, 115 F.3d 1012 (D.C. Cir. 1997) .......................................15 Edelman v. Jordan, 415 U.S. 651 (1974) ..........................................................................21, 22, 24 Esch v. Yeutter, 876 F.2d 976 (D.C. Cir. 1989).............................................................................18 *Ex parte Young, 209 U.S. 123 (1908)..................................................................19, 20, 21, 22, 25 Fla. Audubon Soc’y v. Bentsen, 94 F.3d 658 (D.C. Cir. 1996) (en banc)........................................7 Freedom Republicans v. FEC, 13 F.3d 412 (D.C. Cir. 1994) .........................................................9 Freeman v. Fahey, 374 F.3d 663 (8th Cir. 2004) ..........................................................................31 Gettman v. Drug Enforcement Admin., 290 F.3d 430 (D.C. Cir. 2002) ..........................................9 Golden State Transit Corp. v. City of L.A., 493 U.S. 103 (1989) ..................................................34 Gonzaga Univ. v. Doe, 536 U.S. 273 (2002) .................................................................................34 *Greater Yellowstone Coal. v. Bosworth, 180 F. Supp. 2d 124 (D.D.C. 2001) ............................61 Hargraves v. Capital City Mortgage Corp., 140 F. Supp. 2d 7 (D.D.C. 2000) ............................29
iv

Case 1:08-cv-01938-HHK Document 34 Filed 06/05/09 Page 6 of 77
Hawksbill Sea Turtle v. FEMA, 939 F. Supp. 1 (D.D.C. 1996).....................................................62 Hegna v. Snow, No. 03-01479, 2005 WL 3276307 (D.D.C. Sept. 27, 2005)................................15 Henry Horner Mothers Guild v. Chi. Hous. Auth., 824 F. Supp. 808 (N.D. Ill. 1993) .................42 Herbert v. Nat’l Acad. of Scis., 974 F.2d 192 (D.C. Cir. 1992).................................................6, 11 Hill v. Kemp, 478 F.3d 1236 (10th Cir. 2007) ...............................................................................24 *Hills v. Gautreaux, 425 U.S. 284 (1976) .....................................................................................10 Hous. Opportunities Made Equal, Inc. v. Cincinnati Enquirer, Inc.,
943 F.2d 644 (6th Cir. 1991) ...................................................................................................38 Hubbard v. Administrator, EPA, 982 F.2d 531 (D.C. Cir. 1992) (en banc) ..................................18 Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261 (1997) .................................................22, 23 Ingram v. Eli Lilly & Co., 251 F. Supp. 2d 1 (D.D.C. 2003).........................................................62 Initiative & Referendum Inst. v. U.S. Postal Serv., 154 F. Supp. 2d 10 (D.D.C. 2001) ................61 Johnson v. Hous. Auth. of Jefferson Parish, 442 F.3d 356 (5th Cir. 2006)...................................36 Jones v. Office of the Comptroller of the Currency, 983 F. Supp. 197 (D.D.C. 1997) .................38 Jones v. Office of the Comptroller of the Currency,
No. 97-5341, 1998 WL 315581 (D.C. Cir. May 12, 1998) .....................................................38 Langlois v. Abington Hous. Auth., 234 F. Supp. 2d 33 (D. Mass. 2002).................................29, 35 Latinos Unidos De Chelsea En Accion v. HUD, 799 F.2d 774 (1st Cir. 1986).............................31 Lattimore v. Nw. Coop. Homes Ass’n,
No. 90-0049, 1992 WL 118383 (D.D.C. May 19, 1992).........................................................43 Lee v. Pierce, 698 F. Supp. 332 (D.D.C. 1988) .......................................................................40, 56 Linda R. S. v. Richard D., 410 U.S. 614 (1973) ..............................................................................9 Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871 (1990) ................................................................48, 49 M&T Mortgage Corp. v. White,
No. 04-cv-4775, 2006 WL 47467 (E.D.N.Y. Jan. 9, 2006).....................................................46 Maryland. Dep’t of Human Res. v. Dep’t of Health & Human Servs.,
763 F.2d 1441 (D.C. Cir. 1985) ...............................................................................................17 v

Case 1:08-cv-01938-HHK Document 34 Filed 06/05/09 Page 7 of 77
Mejia v. HUD, 518 F. Supp. 935 (N.D. Ill. 1981) .........................................................................42 Miller v. Insulation Contractors,
No. 08-1556, 2009 WL 1066263 (D.D.C. Apr. 21, 2009).......................................................64 *Milliken v. Bradley, 433 U.S. 267 (1977) ..............................................................................21, 22 *Montgomery Improvement Ass’n v. HUD, 645 F.2d 291 (5th Cir. 1981)........................31, 32, 39 Motor & Equip. Mfrs. Ass’n v. Nichols, 142 F.3d 449 (D.C. Cir. 1998).........................................8 *NAACP, Boston Chapter v. Kemp, 721 F. Supp. 361 (D. Mass. 1989) .......................................11 *NAACP v. HUD, 817 F.2d 149 (1st Cir. 1987)..........................................................46, 47, 49, 56 Nat’l Ass’n of Counties v. Baker, 842 F.2d 369 (D.C. Cir. 1988) .................................................18 *Nat’l Cmty. Reinvestment Coal. v. Accredited Home Lenders Holding Co.,
573 F. Supp. 2d 70 (D.D.C. 2008) ...........................................................................................29 Nat’l Cmty. Reinvestment Coal. v. Novastar Fin., Inc.,
No. 07-0861, 2008 WL 977351 (D.D.C. Mar. 31, 2008) ........................................................29 Nat’l Ctr. for Mfg. Scis. v. Dep’t of Defense, 199 F.3d 507 (D.C. Cir. 2000) ...............................15 *Nat’l Fair Hous. Alliance, Inc. v. Prudential Ins. Co., 208 F. Supp. 2d 46 (D.D.C. 2002) ........28 Nat’l Postal Prof’l Nurses v. U.S. Postal Serv., 461 F. Supp. 2d 24 (D.D.C. 2006)...............31, 32 Natural Res. Def. Council v. Patterson, 333 F. Supp. 2d 906 (E.D. Cal. 2004)............................49 Northcoast Envtl. Ctr. v. Glickman, 136 F.3d 660 (9th Cir. 1998) ...............................................50 Norton v. Southern Utah Wilderness Alliance, 542 U.S. 55 (2004) (“SUWA”) ............................44 *Otero v. N.Y. City Hous. Auth., 484 F.2d 1122 (2d Cir. 1973)........................................29, 30, 56 Pain v. United Tech. Corp., 637 F.2d 775 (D.C. Cir. 1980)..........................................................60 Papasan v. Allain, 478 U.S. 265 (1986) ..................................................................................21, 22 Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89 (1984) ................................................21 Pennhurst State School & Hospital v. Halderman, 451 U.S. 1 (1981)..........................................32 People’s Hous. Dev. Corp. v. City of Poughkeepsie, 425 F. Supp. 482 (S.D.N.Y. 1976).............33 Population Inst. v. McPherson, 797 F.2d 1062 (D.C. Cir. 1986) ..................................................12
vi

Case 1:08-cv-01938-HHK Document 34 Filed 06/05/09 Page 8 of 77
*Price v. City of Stockton, 390 F.3d 1105 (9th Cir. 2004) ......................................................34, 36 Quern v. Jordan, 440 U.S. 332 (1979) ..........................................................................................21 Resident Advisory Bd. v. Rizzo, 425 F. Supp. 987 (E.D. Pa. 1976) ...............................................30 Robinson v. Eli Lilly & Co., 535 F. Supp. 2d 49 (D.D.C. 2008) ...................................................63 S. Utah Wilderness Alliance v. Babbitt,
No. 99-852, 2000 WL 33347722 (D. Utah Dec. 22, 2000) .....................................................47 Santiago v. N.Y. State Dep’t of Corr. Servs., 945 F.2d 25 (2d Cir. 1991) .....................................23 Schnapper v. Foley, 667 F.2d 102 (D.C. Cir. 1981) ......................................................................37 SEC v. Savoy Indus., Inc., 587 F.2d 1149 (D.C. Cir. 1978)...........................................................64 Seminole Tribe of Fla. v. Florida, 517 U.S. 44 (1996)..................................................................21 Shannon v. HUD, 436 F.2d 809 (3d Cir. 1970) .............................................................................11 Shenandoah Assocs. Ltd. P’ship v. Tirana,182 F. Supp. 2d 14 (D.D.C. 2001).............................60 *Sierra Club v. Van Antwerp, 523 F. Supp. 2d 5 (D.D.C. 2007) ............................................61, 65 Simon v. Eastern Ky. Welfare Rights Org., 426 U.S. 26 (1976)......................................................9 *Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002)...............................................................51, 52 Tax Analysts v. IRS, 214 F.3d 179 (D.C. Cir. 2000)......................................................................30 Tcherepnin v. Knight, 389 U.S. 332 (1967)...................................................................................38 *Thompson v. HUD, 348 F. Supp. 2d 398 (D. Md. 2005).............................................................41 *Thompson v. HUD, No. 95-309, 2006 WL 581260 (D. Md. Jan. 10, 2006)....................44, 46, 50 *Tinsley v. Kemp, 750 F. Supp. 1001 (W.D. Mo. 1990)................................................................42 Trout Unlimited v. USDA, 944 F. Supp. 13 (D.D.C. 1996) ...............................................61, 62, 64 United States ex rel. Anti-Discrimination Ctr. of Metro N.Y., Inc., v. Westchester County,
No. 06-2860, 2009 WL 455269 (S.D.N.Y. Feb. 24, 2009)......................................................28 United States v. Mass. Indus. Fin. Agency, 910 F. Supp. 21 (D. Mass. 1996) ..............................55 Univ. Med. Ctr. of S. Nev. v. Shalala, 173 F.3d 438 (D.C. Cir. 1999) ............................................9
vii

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US Ecology, Inc. v. U.S. Dep’t of the Interior, 231 F.3d 20 (D.C. Cir. 2000).................................9 Vann v. Kempthorne, 534 F.3d 741 (D.C. Cir. 2008) ........................................................19, 20, 24 Vanover v. Hantman, 77 F. Supp. 2d 91 (D.D.C. 1999)..................................................................6 Vaughn v. Consumer Home Mortgage, Inc., 293 F. Supp. 2d 206 (E.D.N.Y. 2003) ....................43 Verizon Md., Inc. v. Pub. Serv. Comm’n of Md., 535 U.S. 635 (2002) .............................21, 23, 24 *W. Va. Ass’n of Cmty. Health Ctrs., Inc. v. Heckler,
734 F.2d 1570 (D.C. Cir. 1984) .....................................................................................7, 12, 15 Wallace v. Chi. Hous. Auth., 298 F. Supp. 2d 710 (N.D. Ill. 2003) ..............................................35 Washington Legal Found. v. Alexander, 984 F.2d 483 (D.C. Cir. 1993) ......................................43 Wilder v. Va. Hosp. Ass’n, 496 U.S. 498 (1990) ...........................................................................32 *Wilderness Soc’y v. Babbitt, 104 F. Supp. 2d 10 (D.D.C. 2000)...............................60, 61, 63, 64 Women’s Equity Action League v. Cavazos, 906 F.2d 742 (D.C. Cir. 1990) ................................43 Wright v. City of Roanoke Redevelopment & Hous. Auth., 479 U.S. 418 (1987)..........................33 *Young v. Pierce, 544 F. Supp. 1010 (E.D. Tex. 1982) ................................................................38 STATUTES 5 U.S.C. § 551(13) .........................................................................................................................46 5 U.S.C. § 702........................................................................................................................ passim 5 U.S.C. § 704........................................................................................................................ passim 5 U.S.C. § 706..............................................................................................................36, 45, 46, 47 28 U.S.C. § 1331......................................................................................................................16, 37 28 U.S.C. § 1343(a) .......................................................................................................................16 28 U.S.C. § 1391(e) .......................................................................................................................60 28 U.S.C. § 1404(a) .......................................................................................................................60 42 U.S.C. § 1983................................................................................................................30, 34, 36 42 U.S.C. § 2000d-7 ......................................................................................................................25
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42 U.S.C. § 3601......................................................................................................................48, 65 42 U.S.C. § 3602(f)........................................................................................................................37 *42 U.S.C. §§ 3604................................................................................................................ passim *42 U.S.C. § 3605.................................................................................................................. passim 42 U.S.C. § 3608(d) .........................................................................................................................5 *42 U.S.C. § 3608(e)(5)......................................................................................................... passim 42 U.S.C. § 3613(a) .................................................................................................................16, 37 42 U.S.C. § 5301............................................................................................................3, 27, 35, 65 *42 U.S.C. § 5304.................................................................................................................. passim 42 U.S.C. § 5306............................................................................................................................25 42 U.S.C. § 5309............................................................................................................................25 42 U.S.C. § 5311................................................................................................................14, 33, 36 Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006, Pub. L. No. 109-148, 119 Stat. 2680, 2779-81 (Dec. 30, 2005) (the “2005 Act”) .................................................................. passim Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006, Pub. L. No. 109-234, 120 Stat. 418 (June 15, 2006) (the “2006 Act”)............................................................................................................................ passim Department of Defense Appropriations Act, 2008, Pub. L. No. 110-116, 121 Stat. 1295, 1343-44 (Nov. 13, 2007) (the “2007 Act”)............................................................................ passim OTHER AUTHORITIES 24 C.F.R. § 91.5 ...............................................................................................................................3 71 Fed. Reg. 7666 (Feb. 13, 2006) ........................................................................................ passim 71 Fed. Reg. 63,337 (Oct. 30, 2006)...................................................................................... passim 72 Fed. Reg. 70,472 (Dec. 11, 2007) ..................................................................................... passim 73 Fed. Reg. 46,312 (Aug. 8, 2008)....................................................................................... passim 114 Cong. Rec. 3422......................................................................................................................48
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114 Cong. Rec. 9563......................................................................................................................48 Br. for the Pet’r, Hills v. Gautreaux, No. 74-1047 (filed Nov. 8, 1975) .......................................10 D.C. Circuit Rule 32.1(b)(1)(A) ....................................................................................................38 Fallon, Meltzer, & Shapiro, Hart & Wechsler’s The Federal Courts & The Federal
System 968-69 (5th ed. 2003)...................................................................................................37 Fed. R. Civ. P. 8(a) ................................................................................................................ passim Fed. R. Civ. P. 8(e) ........................................................................................................................17 Fed. R. Civ. P. 12(b)(1)..............................................................................................................6, 25 Fed. R. Civ. P. 12(b)(6).......................................................................................................... passim Fed. R. Civ. P. 15(a)(1)(A) ............................................................................................................17 H.R. Rep. No. 100-122(I), (1987), as reprinted in 1987 U.S.C.C.A.N. 3317...............................31 U.S. Const. art. III, § 2.....................................................................................................................6 2 Moore’s Federal Practice §§ 8.03[3] n.19, 8.04[3] n.13 (3d ed. 1997 & Supp. 2009)..............17 Wright & Miller, Federal Practice & Procedure § 1483..............................................................17 Wright & Miller, Federal Practice & Procedure § 3659 (3d ed. 1998 & Supp. 2009) ................16 Wright & Miller, Federal Practice & Procedure § 4232..............................................................24 *Authorities chiefly relied upon
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INTRODUCTION This case involves claims of racial discrimination in the design and operation of the Road Home program, an $11 billion recovery program designed to help homeowners affected by Hurricanes Katrina and Rita. The Road Home program is the largest single housing redevelopment plan in United States history. The Plaintiffs—two fair housing organizations and a proposed class of approximately 20,000 African American homeowners—allege that the Road Home program awards smaller grants to African American families than to white families with comparable homes that suffered similar damage. This disparity leaves African American families with a larger gap between the grant amount and the cost to rebuild their homes, disproportionately harming African Americans who seek to return to their homes in New Orleans. Plaintiffs allege that by developing, implementing, and overseeing the Road Home program, both the U.S. Department of Housing and Urban Development (“HUD”) and Paul Rainwater, Executive Director of the Louisiana Recovery Authority (“LRA”), have violated the nondiscrimination and affirmative fair housing provisions of Title VIII of the Civil Rights Act of 1968, see 42 U.S.C. §§ 3604, 3605, and 3608 (the “Fair Housing Act” or “Title VIII”), and the Housing and Community Development Act of 1974, see 42 U.S.C. § 5304 (the “HCDA”). HUD and Rainwater have moved to dismiss the Complaint for lack of subject-matter jurisdiction and failure to state a claim; and Rainwater also moves to transfer this action from this Court to the United States District Court for the Middle District of Louisiana. For the reasons stated herein, defendants’ motions should be denied.
BACKGROUND The CDBG Disaster Recovery Grant program is a $19.7 billion program for which Congress allocated Community Development Block Grant (“CDBG”) funds for necessary
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expenses related to disaster relief, long-term recovery, and rebuilding in the areas in the Gulf of Mexico most affected by Hurricanes Katrina and Rita in 2005. Compl. ¶¶ 5, 33-36, Dkt. 1 (Nov. 12, 2008). Congress created and funded the Disaster Recovery Grant program through three appropriations statutes passed in 2005, 2006, and 2007. See Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006, Pub. L. No. 109-148, 119 Stat. 2680, 2779-81 (Dec. 30, 2005) (the “2005 Act”) (Ex. A); Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006, Pub. L. No. 109-234, 120 Stat. 418, 472-73 (June 15, 2006) (the “2006 Act”) (Ex. B); Department of Defense Appropriations Act, 2008, Pub. L. No. 110-116, 121 Stat. 1295, 1343-44 (Nov. 13, 2007) (the “2007 Act”) (Ex. C).1
The first two statutes appropriated a combined $16.7 billion to the five affected states— Louisiana, Mississippi, Texas, Florida, and Alabama—for activities authorized under the CDBG statute. See 2005 Act, 119 Stat. at 2779-81 ($11.5 billion appropriation); 2006 Act, 120 Stat. at 472-73 ($5.2 billion appropriation). From the overall $16.7 billion appropriation in the 2005 and 2006 Acts, HUD allocated $10.41 billion to Louisiana for disaster recovery expenses. See 71 Fed. Reg. 7666, 7666 (Feb. 13, 2006) (Ex. D) (allocating $6.21 billion of the $11.5 billion from the 2005 Act to Louisiana); 71 Fed. Reg. 63,337, 63,338 (Oct. 30, 2006) (Ex. E) (allocating $4.2 billion of the $5.2 billion from the 2006 Act to Louisiana). Congress passed the third appropriations statute in late 2007, authorizing an additional $3 billion for supplemental CDBG grants to Louisiana. See 2007 Act, 121 Stat. at 1343-44. Accordingly, $13.41 billion of the total amount appropriated by Congress for the CDBG Disaster Recovery Grant program has been allocated to Louisiana.
1 For the Court’s convenience, the relevant CDBG Disaster Recovery Grant statutes and regulations are attached as exhibits A through G.
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The Disaster Recovery Grant program is governed by the general statutory and regulatory framework that governs regular CDBG funds.2 See 2005 Act, 119 Stat. at 2779-80; 2006 Act, 120 Stat. at 472-73. In administering the Disaster Recovery Grant program, HUD may waive certain CDBG program requirements if requested by a state, but may not waive requirements relating to fair housing, nondiscrimination, labor standards, and the environment. See 2005 Act, 119 Stat. at 2780; 2006 Act, 120 Stat. at 472-73.
The appropriations statutes include a reporting and monitoring framework that supplements the regular CDBG program requirements. The 2005 Act and 2006 Act provide that “prior to the obligation of funds each State shall submit a plan to the Secretary [of HUD] detailing the proposed use of all funds, including criteria for eligibility and how the proposed use of all funds . . . will address long-term recovery and restoration of infrastructure.” 2005 Act, 119 Stat. at 2780; 2006 Act, 120 Stat. at 473; see also 42 U.S.C. § 5304(a)(1). HUD’s implementing regulations require that grantees submit an “action plan” to fulfill this obligation. See 71 Fed. Reg. at 7669; 71 Fed. Reg. at 63,338-39; 72 Fed. Reg. 70,472, 70,472-73 (Dec. 11, 2007) (Ex. F). In addition to detailing the intended uses of all grant funds, the action plan must include a number of certifications,3 including assurances that the grantee will comply with the Fair Housing Act and will affirmatively further fair housing. 71 Fed. Reg. at 7671; 71 Fed. Reg. at
2 The regular CDBG program provides annual block grants to local and state governments for housing and housing-related development activities. 42 U.S.C. § 5301. The primary objective of the CDBG program is to develop “viable urban communities[] by providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low and moderate income.” Id. § 5301(c). The statutory requirements for the regular CDBG program are established in Title I of the HCDA. Id. §§ 5301-5318.
3 “Certification” is defined in HUD regulations to mean: “A written assertion, based on supporting evidence, that must be kept available for inspection by HUD, by the Inspector General of HUD, and by the public.” 24 C.F.R. § 91.5.
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63,339; 72 Fed. Reg. at 70,472. HUD is required to review and approve these certifications before it obligates any grant funds. 42 U.S.C. § 5304(b).
The Louisiana Recovery Authority (“LRA”) is a Louisiana state agency created to administer funds for recovery from Hurricanes Katrina and Rita, including CDBG Disaster Recovery Grant funds. Defendant Paul Rainwater is the LRA’s Executive Director. Compl. ¶ 19. From its total of $13.41 billion in Disaster Recovery Grant funds, the LRA designated approximately $11 billion for housing programs known collectively as the Road Home program. Id. ¶ 41. The largest Road Home component is the Homeowner Assistance Program,4 which provides rebuilding assistance to homeowners whose homes were destroyed or suffered major damage as a result of Hurricanes Katrina and Rita. Id. ¶¶ 43-44.
Homeowners who agree to use Road Home funds to rebuild or repair their homes are eligible for grants of up to $150,000. Id. ¶¶ 45-46. The grant amount is calculated using the lower of two baseline values: the home’s pre-storm or the cost of damage to the home. Id. ¶ 47. Consistent with the statutory and regulatory framework described above, the LRA proposed and developed the Road Home grant formula and the details of the Road Home program in consultation with HUD and subject to HUD’s ongoing approval and oversight. Id. ¶¶ 49-51.
The requirement that Road Home grant awards not exceed the pre-storm value of the home has a discriminatory disparate impact on African Americans. Id. ¶¶ 52-60. Homes in predominantly African American communities had lower values than those in white communities, even when the condition, style, and quality of the homes are comparable. Id. ¶¶ 53-54. As a result, African American homeowners have been more likely than whites to receive a Road Home grant that is based on the pre-storm value of their home rather than on the
4 This memorandum will refer to the Road Home Homeowner Assistance Program as the “Road Home” program for brevity.
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cost of damage and are, therefore, more likely than white homeowners to have a gap between their rebuilding resources and the cost to rebuild. Id. ¶¶ 55-60.
Accordingly, the operation of this program violates both Title VIII (42 U.S.C. §§ 3604, 3605, and 3608) and the HCDA (42 U.S.C. § 5304). Id. ¶ 74-77. Section 3604(a) of Title VIII makes it unlawful to “make unavailable or deny” housing to any person because of race. 42 U.S.C. § 3604(a). Section 3605(a) of Title VIII makes it unlawful to discriminate on the basis of race in the availability, terms, or conditions of residential real estate-related transactions. Id. § 3605(a). And § 3608(e)(5) of Title VIII requires HUD and recipients of federal funds to “administer the programs and activities relating to housing and urban development in a manner affirmatively to further” fair housing.5 Id. § 3608(e)(5). Finally, § 5304(b)(2) of the HCDA requires that the use of all CDBG funds be conducted in a manner that “affirmatively further[s] fair housing.” Id. § 5304(b)(2). Plaintiffs allege that by designing, implementing, and overseeing a program that has a disparate impact on African American families as compared to white families, both HUD and Rainwater violated the anti-discrimination provisions of § 3604(a) and § 3605(a), and failed to fulfill their affirmative obligations under § 3608(e)(5) and § 5304(b)(2).
The discriminatory disparities in the application of the Road Home formula give rise to this action for declaratory and injunctive relief to end the discriminatory operation of the Road
5 Plaintiffs’ Complaint alleges that the defendants violated § 3608(d) in addition to § 3608(e)(5) of the Fair Housing Act. Compl. ¶ 76. As HUD notes, § 3608(d) and § 3608(e)(5) impose an identical obligation to administer housing programs “in a manner affirmatively to further” fair housing policies. Defendant HUD’s Motion to Dismiss 36, Dkt. 22 (Mar. 6, 2009) (“HUD Br.”). This memorandum will refer only to § 3608(e)(5) in discussing Plaintiffs’ allegations that the defendants violated their affirmative obligations under both § 3608(d) and § 3608(e)(5) of the Fair Housing Act.
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Home program and to direct the Defendants to develop and apply a new nondiscriminatory grant formula.
ARGUMENT I. Defendants’ motions to dismiss for lack of subject-matter jurisdiction should be
denied. HUD and Rainwater each move to dismiss Plaintiffs’ claims under Rule 12(b)(1) for lack of subject-matter jurisdiction. HUD argues (1) that Plaintiffs do not have standing to challenge the Road Home formula because Plaintiffs’ injuries will not be redressed by a favorable judgment; (2) that Plaintiffs’ claims are moot as to those Disaster Recovery Grant funds that HUD has already obligated to Louisiana; and (3) that Plaintiffs’ Complaint fails to allege a waiver of sovereign immunity. Defendant HUD’s Motion to Dismiss 20-31, Dkt. 22 (Mar. 6, 2009) (“HUD Br.”). Rainwater separately argues that this Court lacks subject-matter jurisdiction because the Eleventh Amendment bars Plaintiffs’ claims against Rainwater. Defendant Paul Rainwater’s Motion to Dismiss and Motion to Transfer 3-18, Dkt. 28 (May 5, 2009) (“Rainwater Br.”). None of these arguments has merit and each should be rejected. In evaluating a motion to dismiss for lack of subject-matter jurisdiction, this Court must construe all reasonable inferences in favor of the plaintiff. Vanover v. Hantman, 77 F. Supp. 2d 91, 98 (D.D.C. 1999). The Court may rely on matters outside the pleadings only if the facts are undisputed or if the Court provides Plaintiffs an opportunity to discover the facts necessary to establish jurisdiction. Herbert v. Nat’l Acad. of Scis., 974 F.2d 192, 198 (D.C. Cir. 1992). A. Plaintiffs have standing to challenge HUD’s unlawful conduct. The jurisdiction of federal courts is limited to actual cases or controversies between proper litigants. U.S. Const. art. III, § 2. Constitutional standing requires that a party have suffered an actual or threatened injury, which may be fairly traced to the challenged action and
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which is “likely to be redressed by a favorable decision” of the court. Fla. Audubon Soc’y v. Bentsen, 94 F.3d 658, 661 (D.C. Cir. 1996) (en banc) (quoting Valley Forge Christian Coll. v. Am. United for Separation of Church & State, Inc., 454 U.S. 464, 472 (1982)). HUD argues that Plaintiffs cannot show that a favorable judgment would redress the harm caused by HUD’s approval and continued oversight of the discriminatory Road Home grant formula. See HUD Br. 19-27. The Court should reject this argument, because Plaintiffs’ Complaint easily establishes that the alleged harms would be redressed by a favorable judgment.
In order to satisfy the redressability requirement, Plaintiffs must establish that it is likely, as opposed to merely speculative, that a favorable decision by this Court will redress the injury suffered. America’s Cmty. Bankers v. FDIC, 200 F.3d 822, 827 (D.C. Cir. 2000); Fla. Audubon Soc’y, 94 F.3d at 663-64 (“Redressability examines whether the relief sought, assuming that the court chooses to grant it, will likely alleviate the particularized injury alleged by the plaintiff.”). Plaintiffs are not required to prove to a certainty that the alleged injuries will be redressed by a favorable decision. See W. Va. Ass’n of Cmty. Health Ctrs., Inc. v. Heckler, 734 F.2d 1570, 1575 (D.C. Cir. 1984) (“[O]nce appellants demonstrated that they would qualify to receive . . . funds, they need not shoulder the additional burden of demonstrating that they are certain to receive funding.”).
Here, Plaintiffs have alleged sufficient facts to demonstrate that a favorable ruling would likely redress the injuries alleged in this suit. Any order from this Court that invalidates the Road Home grant formula would compel Rainwater to develop, and HUD to evaluate and approve, a new housing recovery formula that would treat African American homeowners fairly in the New Orleans redevelopment process. HUD disputes that such an order would remedy Plaintiffs’ injuries by downplaying its role in the Road Home program. But the Complaint
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alleges, and the statutory scheme provides, that HUD is responsible for the administration, funding, and supervision of federal low-income housing programs, including the regular CDBG program and the CDBG Disaster Recovery Grant program. Compl. ¶¶ 18, 33-37. All grantees, including Rainwater, must submit an action plan to HUD that explains the intended uses of the funds and promises to comply with the Fair Housing Act. HUD must approve this action plan before disbursing any funds. Id. ¶¶ 37-38; 42 U.S.C. § 5304(b); 71 Fed. Reg. at 7671; 71 Fed. Reg. at 63,339; 72 Fed. Reg. at 70,472; 73 Fed. Reg. 46,312, 46,314 (Aug. 8, 2008) (Ex. G). The existing Road Home grant formula was proposed and developed in consultation with HUD, was approved by HUD as a condition of the distribution of grant funds, and is subject to HUD’s continuing oversight and approval. Compl. ¶¶ 49-51.
Plaintiffs therefore seek an order setting aside HUD’s approval of the discriminatory formula and requiring HUD to oversee the development of a new, nondiscriminatory formula. The D.C. Circuit has found in the analogous context of agency rule promulgation that a court order requiring an agency to vacate a rule and develop a new one would redress the claims of plaintiffs who had challenged that rule. See, e.g., America’s Cmty. Bankers, 200 F.3d at 828-29 (“Where an agency rule causes the injury, the redressability requirement may be satisfied . . . by vacating the challenged rule and giving the aggrieved party the opportunity to participate in a new rulemaking, the results of which might be more favorable to it.”); Motor & Equip. Mfrs. Ass’n v. Nichols, 142 F.3d 449, 457-58 (D.C. Cir. 1998); cf. Ctr. for Auto Safety v. Nat’l Highway Traffic Safety Admin., 793 F.2d 1322, 1334 (D.C. Cir. 1986) (redressability prong satisfied where a favorable decision could trigger a series of penalties that would force third parties to take specific actions). Plaintiffs’ claims are therefore sufficient to establish standing.
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HUD relies on Allen v. Wright, 468 U.S. 737 (1984), and Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26 (1976), to argue that Plaintiffs’ likelihood of obtaining redress is speculative. The plaintiffs in Allen and Simon, however, requested relief that could not be ordered by the court, because the relief depended upon the independent actions of third parties that were not parties to the litigation. See Allen, 468 U.S. at 743-46; Simon, 426 U.S. at 41-42. In particular, both cases involved challenges to favorable tax treatment that was alleged to affect the third party’s incentives. See Allen, 468 U.S. at 743-36; Simon, 426 U.S. at 33. The D.C. Circuit has explained that both cases establish the principle that “speculative claims dependent upon the actions of third parties do not create standing for the purposes of establishing a case or controversy under Article III.” Gettman v. Drug Enforcement Admin., 290 F.3d 430, 435 (D.C. Cir. 2002) (discussing Allen and Simon); see also Action Alliance of Senior Citizens of Greater Phila. v. Heckler, 789 F.2d 931, 938 (D.C. Cir. 1986) (“In the [Simon] line of cases, causality and remediability were doubtful because the plaintiffs’ injury resulted from the action of third parties not before the court . . . .”).6 No such problem arises in this case, as Plaintiffs need not rely on any indirect effect on a third party. All of the parties necessary to accord the relief that Plaintiffs seek—HUD and Rainwater—are defendants before this Court.
6 The lower court decisions relied upon by HUD feature complainants with similarly flawed arguments. See US Ecology, Inc. v. U.S. Dep’t of the Interior, 231 F.3d 20, 24-25 (D.C. Cir. 2000) (action challenging decision of federal agency to rescind the sale of land to third party not before the court); Univ. Med. Ctr. of S. Nev. v. Shalala, 173 F.3d 438, 439-40 (D.C. Cir. 1999) (holding that the plaintiff did not have standing where relief depended upon whether third parties not involved in the litigation would opt to make retroactive payments to appellants); Freedom Republicans v. FEC, 13 F.3d 412, 414, 417-19 (D.C. Cir. 1994) (action against the FEC to block funding for the Republican National Convention because of alleged discrimination by the Republican Party); see also Linda R. S. v. Richard D., 410 U.S. 614, 614-16 (1973) (action by mother seeking to challenge a local prosecutor’s decision to decline prosecution of a “deadbeat” father who failed to pay child support).
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In addition, HUD’s authority over Rainwater through HUD’s direct grant-making and regulatory authority distinguishes this case from the more attenuated remedial proposals at issue in Allen and Simon. The D.C. Circuit has consistently upheld plaintiffs’ standing to challenge federal agency decisions in similar circumstances. See, e.g., Ctr. for Auto Safety, 793 F.2d at 1334 (holding that consumer organizations had standing to challenge automobile fuel economy standards because the claimed injury—the lack of fuel-efficient vehicles—would be redressed by a ruling that required the agency to adopt regulations mandating increased fuel efficiency); Action Alliance, 789 F.2d at 936-39 (holding that plaintiffs had standing where the requested relief—a court order requiring that agency-specific regulations be modified to be compatible with government-wide regulations—would redress the alleged injury of organizational plaintiffs).
HUD contends that it does not in fact have authority to impose fair housing conditions on grant recipients, arguing that it has a “limited role in approving CDBG funds.” HUD Br. 22-23 (citing Declaration of Jessie Handforth Kome Submitted in Support of Defendant HUD’s Motion to Dismiss ¶¶ 3, 9, 13, Dkt. 22, Attachment (Mar. 3, 2009), (“Kome Decl.”)). This argument not only is foreclosed by the mandatory statutory and regulatory scheme described above, but also was rejected unanimously by the Supreme Court over thirty years ago in Hills v. Gautreaux, 425 U.S. 284 (1976). In Gautreaux, HUD argued that no remedy could be ordered for HUD’s approval of discriminatory local housing practices in Chicago on the ground that the “practical operation” of many HUD-funded programs is “in a significant degree under local control.” See Br. for the Pet’r 29-34, Hills v. Gautreaux, No. 74-1047 (filed Nov. 8, 1975), available at 1975 WL 173594. The Supreme Court rejected this argument, holding that the district court could order a remedy requiring HUD to impose and enforce civil rights conditions on the use of federal
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housing funds. Gautreaux, 425 U.S. at 301-06 (“[A] metropolitan area relief order directed to HUD . . . would have the same effect on the suburban governments as a discretionary decision by HUD to use its statutory powers to provide the respondents with alternatives to the racially segregated Chicago public housing system . . . .”); see also, e.g., NAACP v. HUD, 817 F.2d 149, 155, 157 (1st Cir. 1987) (Breyer, J.) (“Clearly, HUD possesses broad discretionary powers to develop, award, and administer its grants and to decide the degree to which they can be shaped to help achieve Title VIII’s goals.”); Shannon v. HUD, 436 F.2d 809, 820-23 (3d Cir. 1970); NAACP, Boston Chapter v. Kemp, 721 F. Supp. 361, 367 (D. Mass. 1989) (“[HUD’s] control of current and future [CDBG] grant funds gives the agency leverage to remedy past and current noncompliance with fair housing goals.”).7
HUD also argues that the possibility a favorable judgment will result in replacing the discriminatory formula with a particular alternative—a cost-of-damage formula—is too speculative to establish standing. HUD Br. 24. But the relief Plaintiffs seek does not depend on the Court’s ordering use of a particular formula. Rather, Plaintiffs simply ask the Court to direct HUD to rescind approval of the discriminatory formula currently in use and replace it with a nondiscriminatory one. See Compl. p.17 (requesting that the Court order HUD and Rainwater “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”). The Complaint’s reference to the cost-of-damage calculation is simply an illustration of one way of recalculating grant awards to remedy racial disparities in the existing formula. See id. ¶ 60. This claim suffices to establish standing, because Plaintiffs need only show that a favorable
7 Should the Court be inclined to credit the assertions in the Kome Declaration regarding the nature of HUD’s authority over Rainwater and other state grantees, see Kome Decl. ¶¶ 3, 9, 13, Plaintiffs reserve the right to seek expedited discovery regarding those jurisdictional facts. See Herbert, 974 F.2d at 198.
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judgment would compel HUD to devise an alternative, nondiscriminatory calculation. See CC Distribs., Inc. v. United States, 883 F.2d 146, 151 (D.C. Cir. 1989) (holding that plaintiff had standing to challenge a Department of Defense contracting decision because the requested relief—requiring the defendant to conduct re-competitions and cost comparison studies—would redress plaintiffs’ claims, not by guaranteeing that they would be awarded the contracts, but by giving them the opportunity to compete for the contracts); W. Va. Ass’n., 734 F.2d at 1574 (holding that plaintiff community health centers who challenged a federal grant decision “need not demonstrate that they would actually receive the additional funding” in order to show redressability, and instead it sufficed that plaintiffs alleged the denial of the “opportunity to compete for . . . increased funding”).
Because a favorable judgment will likely redress Plaintiffs’ injuries, this Court should deny HUD’s motion to dismiss for lack of standing.
B. The case is not moot. HUD next asserts that the Court lacks subject-matter jurisdiction because Plaintiffs’ claims are moot. HUD Br. 27-28. This assertion ignores that Plaintiffs’ claims can be satisfied without requiring HUD to reallocate or obligate any additional federal funds. Plaintiffs need not ask the Court to order the expenditure of federal funds that were previously dedicated to homeowners other than Plaintiffs, or the reallocation of funds already obligated to other states. See City of Houston v. HUD, 24 F.3d 1421, 1424-27 (D.C. Cir. 1994); W. Va. Ass’n, 734 F.2d at 1577 & n.8; cf. Population Inst. v. McPherson, 797 F.2d 1062, 1081 (D.C. Cir. 1986). Rather, Plaintiffs ask the Court to order HUD to use its existing authority to force Rainwater to conform the Road Home program with federal law. Thus, no part of this action is moot. Contrary to HUD’s assertion, the mootness principles of City of Houston and West Virginia have no relevance in this action. See HUD Br. 27-28. In City of Houston, HUD had
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reduced Houston’s CDBG grant for fiscal year 1986 by $2.6 million and reallocated the $2.6 million to other grantees. 24 F.3d at 1424-25. Houston claimed its grant could not be reduced without a hearing and sought a court order compelling HUD to increase its grant by $2.6 million. Id. But because HUD had already contractually obligated all of its 1986 CDBG appropriations before the action was filed, the court lacked the power to order the further expenditure of those funds. Id. at 1426-27. As the D.C. Circuit explained, “when an appropriation has lapsed or has been fully obligated, federal courts cannot order the expenditure of funds that were covered by that appropriation.” Id. at 1424; see id. at 1428 (rejecting the city’s assertion that its grant could be increased from funds recouped from other grantees).
Similarly, in West Virginia, an association of community health centers challenged a federal agency’s allocation formula for the federal Primary Care Block Grant and sought an order compelling the agency to increase West Virginia’s 1983 block grant. 734 F.2d at 1572-73. The action was deemed moot, however, because plaintiffs “concede[d] that all FY83 PCBG funds have been awarded by the Secretary to various recipients.” Id. at 1577. Thus, in both City of Houston and West Virginia, plaintiffs’ injuries could only be redressed by a court order compelling a federal agency to increase a state’s grant from a source of funds that had already been fully obligated. See City of Houston, 24 F.3d at 1426.
Here, Plaintiffs’ claims can be redressed without a court order compelling HUD to spend any additional CDBG “funds that were covered” by the 2005, 2006, and 2007 Acts, because the court may order HUD to exercise its extant authority to impose fair housing conditions on Rainwater’s continued operation of the Road Home program. Id. at 1424, 1426. In particular, HUD has the authority to require Rainwater to use the funds that HUD has already disbursed and obligated to LRA (though not yet awarded to particular homeowners), to (1) award Road Home
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grants based on a nondiscriminatory formula to homeowners who have not yet received grants, and (2) recalculate awards for homeowners who previously received grants under the discriminatory formula. 42 U.S.C. §§ 5304, 5311; see also Kemp, 721 F. Supp. at 367 (“[T]he fact that the 1977-81 funds have been disbursed does not deprive HUD of all leverage over its grantees. Its control of current and future grant funds gives the agency leverage to remedy past and current noncompliance with fair housing goals.”) (citing 42 U.S.C. §§ 5304, 5311 and Davis v. HUD, 627 F.2d 942, 945 (9th Cir. 1980) (Kennedy, J.) (rejecting HUD’s contention that an action under the HCDA was “moot because block grant funds have been disbursed to the City which has already expended most of them”)). Thus, each class plaintiff can obtain relief in the absence of a court ordering the expenditure of additional federal funds. Accordingly, the “fully obligated” standard of City of Houston does not apply here. See 24 F.3d at 1424.8
Even if the Court were to apply City of Houston, it still could not conclude that Plaintiffs’ action is moot. Under City of Houston, an action seeking the expenditure of appropriated funds may become moot “when an appropriation has lapsed or has been fully obligated.” Id. (emphasis added). Here, the relevant appropriations have neither lapsed nor been fully obligated. As HUD concedes, Congress expressly stated that the CDBG funds at issue here shall not lapse. HUD Br. 28 n.10; 2005 Act, 119 Stat. at 2779-80; 2006 Act, 120 Stat. at 472; 2007 Act, 121 Stat. at 1343. And because HUD has obligated only a portion of the relevant CDBG funds to the Road Home program, with $1 billion yet to be obligated to Louisiana, HUD clearly has not fully obligated all of the relevant funds. Compare City of Houston, 24 F.3d at 1427 (granting summary judgment to HUD where it was undisputed that funds had been contractually obligated in their entirety at
8 Because the relief Plaintiffs seek does not require the expenditure of additional federal funds, Plaintiffs need not, as HUD suggests, “seek a preliminary injunction preventing the agency from disbursing those funds.” HUD Br. 28.
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least six months prior to initiation of suit), with Kome Decl. ¶ 25 (“Of the remaining funds that Congress has appropriated for disaster recovery, HUD has not yet obligated $1,000,000,000 to Louisiana.”). Until all of the relevant appropriated funds have been obligated, this Court retains the authority to “order the expenditure of funds covered by that appropriation.” City of Houston, 24 F.3d at 1424; see also Nat’l Ctr. for Mfg. Scis. v. Dep’t of Defense, 199 F.3d 507, 509-10 (D.C. Cir. 2000) (holding that an action was not moot where the plaintiff’s claim could be satisfied with unobligated funds from the same appropriations act as the challenged provision); cf. W. Va. Ass’n, 734 F.2d at 1577 (holding an action moot since all funds had already been obligated); Hegna v. Snow, No. 03-01479, 2005 WL 3276307, at *3 (D.D.C. Sept. 27, 2005) (Kennedy, J.) (same).9 Therefore, even if City of Houston applies, this action is not moot.10
Finally, even if, arguendo, the Court were to accept HUD’s flawed argument—supported by not a single case in this Circuit or elsewhere—that Plaintiffs’ action is moot because a portion of the relevant funds has been obligated already, Plaintiffs’ challenge to HUD’s continuing approval and oversight of LRA’s discriminatory policies in the Road Home program is clearly not moot, as HUD itself concedes. HUD Br. 28 n.11; see also Dynalantic Corp. v. Dep’t of Defense, 115 F.3d 1012, 1015 (D.C. Cir. 1997) (citing City of Houston, 24 F.3d at 1428).
C. Neither the sovereign immunity of the United States nor the Eleventh Amendment immunity of Louisiana bars this suit.
Both HUD and Rainwater move to dismiss this action for lack of subject-matter jurisdiction on sovereign immunity grounds. HUD argues that Plaintiffs’ claims should be
9 Should the Court deem City of Houston applicable, Plaintiffs reserve the right to seek expedited discovery to support a possible motion for a preliminary injunction to preserve the remaining unobligated funds.
10 Because these unobligated funds originated from the same source that HUD used to fund the Road Home program, there can be no concern that an injunction ordering HUD to use these funds would “constitute monetary damages rather than specific relief” under the waiver of sovereign immunity in 5 U.S.C. § 702. See City of Houston, 24 F.3d at 1428; infra Part I.C.1.
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dismissed, because Plaintiffs did not allege a waiver of sovereign immunity in the Complaint. HUD Br. 29-31. Rainwater argues that Plaintiffs’ suit is barred by the Eleventh Amendment to the Constitution. Rainwater Br. 3-18. For the reasons discussed below, neither argument provides a basis for dismissal here.
1. Congress has waived the immunity of the United States in actions, like this one, that seek relief other than money damages.
HUD argues that the Court lacks jurisdiction because the Complaint does not expressly allege a waiver of sovereign immunity by the United States. See HUD Br. 29-31. Plaintiffs have properly invoked sufficient bases for this Court’s subject-matter jurisdiction, and HUD’s motion to dismiss on this ground should therefore be denied.
HUD acknowledges that Congress has waived the immunity of the United States in any action “seeking relief other than money damages.” 5 U.S.C. § 702; see HUD Br. 29-31. HUD nonetheless argues that because Plaintiffs do not specifically cite § 702 in the Complaint, the Complaint should be dismissed for lack of subject-matter jurisdiction. See HUD Br. 29-31. But § 702 is not an independent grant of jurisdiction. Califano v. Sanders, 430 U.S. 99, 105-07 & n.6 (1977). Rather, subject-matter jurisdiction is conferred on this Court by 28 U.S.C. §§ 1331, 1343(a)(3), 1343(a)(4), and 42 U.S.C. § 3613(a), as Plaintiffs’ Complaint properly states. See Compl. ¶ 8; see also 14A Wright & Miller, Federal Practice & Procedure § 3659, at 51 (3d ed. 1998 & Supp. 2009) (“[I]t is now quite clear that plaintiffs seeking specific relief are given the right to sue the government in federal court by the Administrative Procedure Act but the subject matter jurisdiction basis is the general federal question statute.”). Plaintiffs’ Complaint thus meets the requirement that a pleading contain “a short and plain statement of the grounds for the court’s jurisdiction.” Fed. R. Civ. P. 8(a)(1).
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Nor is it necessary for Plaintiffs’ Complaint to specifically invoke the right of judicial review provided by § 702. A complaint is simply required to give the defendant fair notice of the plaintiff’s claim and the grounds on which it rests, and HUD’s response makes clear that it is on notice of Plaintiffs’ claims. See Alvarez v. Hill, 518 F.3d 1152, 1157 (9th Cir. 2008) (“The contention that his complaint’s omission of a citation to RLUIPA precludes [the plaintiff] from advancing legal arguments based on that statute is entirely meritless. . . . [The plaintiffs’] complaint and subsequent filings provided appellees with ‘fair notice’ of that claim, even though the statute was not cited in the complaint itself.” (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 562 (2007))); 2 Moore’s Federal Practice §§ 8.03[3] n.19, 8.04[3] n.13 (3d ed. 1997 & Supp. 2009) (citing cases); see also Fed. R. Civ. P. 8(e) (“Pleadings must be construed so as to do justice.”).11
Plaintiffs have brought this action seeking declaratory and injunctive relief to enforce HUD’s statutory mandate to ensure its grantees comply with federal anti-discrimination laws. See Compl. ¶¶ 7, 9. Accordingly, on its face, this action seeks “relief other than money damages” that squarely fits within the § 702 waiver of sovereign immunity. Plaintiffs’ action seeks specific relief in the form of an order setting aside HUD’s approval of the discriminatory formula and requiring HUD to oversee the development of a new, nondiscriminatory formula. See Compl. ¶ 17. Binding precedent has long recognized that actions for specific relief, even where they would result in the payment of money due, fall within the sovereign immunity waiver of§ 702. See, e.g., Bowen v. Massachusetts, 487 U.S. 879, 893-901 (1988) (adopting reasoning in Maryland. Dep’t of Human Res. v. Dep’t of Health & Human Servs., 763 F.2d 1441 (D.C. Cir.
11 If this Court believes that the lack of specific citation to § 702 in the Complaint deprives the Court of subject-matter jurisdiction, Plaintiffs will amend the Complaint to so plead. See Fed. R. Civ. P. 15(a)(1)(A); see also 6 Wright & Miller, Federal Practice & Procedure § 1483 & n.15, at 587-88.
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1985)). These decisions have explained that “money damages represent compensatory relief, an award given to a plaintiff as a substitute for that which has been lost; specific relief in contrast represents an attempt to restore to the plaintiff that to which it was entitled from the beginning.” America’s Cmty. Bankers, 200 F.3d at 829; see Bowen, 487 U.S. at 893-901. As the D.C. Circuit has emphasized, “[w]here a plaintiff seeks an award of funds to which it claims entitlement under a statute, the plaintiff seeks specific relief, not damages.” America’s Cmty. Bankers, 200 F.3d at 829; Nat’l Ass’n of Counties v. Baker, 842 F.2d 369, 373 (D.C. Cir. 1988) (release of sequestered funds was not money damages as plaintiffs “are seeking funds to which a statute allegedly entitles them rather than money in compensation for the losses they may have suffered by virtue of the withholding of those funds”); see also Esch v. Yeutter, 876 F.2d 976, 983-85 (D.C. Cir. 1989) (finding farmers’ claim for a redetermination of their entitlement to a federal subsidy in compliance with the subsidy statutes did not seek “money damages”).12
In Bowen, the state of Massachusetts sought to enjoin the Department of Health and Human Services from refusing to reimburse the state for Medicaid expenditures under an improper interpretation of its statutory mandate. Bowen, 487 U.S. at 889. The Court explained that the relief Plaintiffs sought—a reversal of the decision to disallow the reimbursements—was not “damages” but rather an adjustment in the size of the federal grant due. Id. at 893. The Court held that § 702’s waiver of sovereign immunity permitted the action, because the suit sought “to enforce the statutory mandate itself, which happens to be one for the payment of
12 Hubbard v. Administrator, EPA, 982 F.2d 531 (D.C. Cir. 1992) (en banc), similarly recognized this distinction between specific relief and monetary damages. The court held that a suit for back pay as compensation for the refusal to hire constituted “money damages,” as the harm suffered was the lost opportunity to perform the job and, thus, the specific relief sought was instatement. Id. at 532, 534. The court observed that back pay might well be properly categorized as specific relief where a plaintiff had been hired and worked for a year without being paid, as in that circumstance the money he had “a right to receive in exchange for his labor might well be the very thing that was taken from him.” Id. at 534 n.4.
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money.” Id. at 900. Thus, the plaintiff sought the “very thing” to which the state was entitled. Id. at 910.
Here, Plaintiffs seek to obtain relief in the form of an order setting aside HUD’s approval of the discriminatory formula and requiring HUD to oversee the development of a new, nondiscriminatory formula. This would provide to Plaintiffs the specific thing to which they were originally entitled. HUD apparently concedes as much, characterizing the relief Plaintiffs seek as “prospective relief,” not money damages. See HUD Br. 21. Accordingly, this action is authorized to proceed under the United States’s waiver of sovereign immunity in § 702.
Because § 702 waives the sovereign immunity of the United States in this action and because Plaintiffs’ Complaint gives HUD ample notice of the basis of Plaintiffs’ claims, the motion to dismiss on sovereign immunity grounds should be denied.
2. This Court has subject-matter jurisdiction over Plaintiffs’ claims against Rainwater because they are claims against a state officer for prospective relief from unlawful acts.
Rainwater moves to dismiss Plaintiffs’ claims for lack of subject-matter jurisdiction on the ground that the Eleventh Amendment bars Plaintiffs’ suit. See Rainwater Br. 3-18. The Eleventh Amendment poses no obstacle to the relief sought here. As the Supreme Court held in Ex parte Young, 209 U.S. 123 (1908), “[a] federal court is not barred by the Eleventh Amendment from enjoining state officers from acting unconstitutionally, either because their action is alleged to violate the Constitution directly or because it is contrary to a federal statute or regulation that is the supreme law of the land.” Vann v. Kempthorne, 534 F.3d 741, 749 (D.C. Cir. 2008) (quoting 17A Wright & Miller, Federal Practice & Procedure § 4232). This case is a
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straightforward application of that doctrine: Plaintiffs seek an injunction against a state officer, Rainwater, alleging that his actions violate several federal statutes.13
a. Ex parte Young applies because Plaintiffs seek no funds from the state treasury.
Rainwater’s leading argument against application of Ex parte Young rests on the
irrelevant and undisputed fact that the LRA as an entity—and not Rainwater alone—designed the
formula at issue and administers the Road Home Program. Rainwater Br. 5-7, 11-12. According
to Rainwater, this means that the state “is the real party in interest.” Id. at 4. But the Supreme
Court rejected this very argument in Ex parte Young. There, Young was the attorney general of
Minnesota and, notwithstanding that the policy in question was set out by the state legislature,
the Court held that if Young’s actions violated federal law, “[t]he state has no power to impart to
him any immunity from responsibility to the supreme authority of the United States.” Ex parte
Young, 209 U.S. at 159-60. The D.C. Circuit rejected this very argument just last year, as it
explained: “the Cherokee Nation argues that tribal sovereign immunity bars the suit against its
officers because the requested relief really runs against the tribe itself. This is reminiscent of the
losing argument in Ex parte Young. The argument is no more persuasive a century later.” Vann, 534 F.3d at 750 (citation omitted).14
13 To the extent that Rainwater suggests, without any authority, that Plaintiffs must “address the issue of sovereign immunity in their Complaint” and “invoke the doctrine of Ex parte Young in their Complaint,” to invoke the subject-matter jurisdiction of this Court, see Rainwater Br. 7 (citation omitted), the Court should reject this argument for the same reasons given above. See supra Part I.C.1. The basis for federal jurisdiction is the same against Rainwater as against HUD, and adequately pleaded in the Complaint.
14 Rainwater further misinterprets Ex parte Young by arguing that “the instant case can easily be distinguished from the facts of Ex parte Young where a state official allegedly violated state law.” Rainwater Br. 12. Ex parte Young involved no violation of state law, but rather an injunction preventing the attorney general from enforcing a state law alleged to contravene federal law. Ex parte Young, 209 U.S. at 132. Here, as in Ex Parte Young, the Plaintiffs seek to enjoin a state officer from violating federal law.
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As even Rainwater ultimately acknowledges, the immunity provided by the Eleventh Amendment is limited to protection against remedies requiring payment of state funds. Rainwater Br. 4-5 (admitting that the Eleventh Amendment’s “sovereign immunity bars suits whose direct outcome will diminish the public treasury through the award of retroactive damages” (citing Ford Motor Co. v. Dep’t of Treasury, 323 U.S. 459, 464 (1945))). Put another way, if the relief the Plaintiffs sought required payment from funds in the state treasury, the Eleventh Amendment would apply regardless of whether Rainwater or the state was named as the defendant. As the relief the Plaintiffs seek here relates to the use of federal funds and will not require payment of any state monies, there is no basis to invoke the immunity provided by the Eleventh Amendment.
In his argument that Ex parte Young is inapplicable, Rainwater cites only two cases in which the relief sought was unavailable under Ex parte Young, and in each case the plaintiffs sought payment of money from the state treasury. See Rainwater Br. 10-16 (citing Edelman v. Jordan, 415 U.S. 651 (1974); Papasan v. Allain, 478 U.S. 265 (1986)).15 This is no coincidence. In Edelman, relied on heavily by Rainwater, the Supreme Court noted repeatedly that the plaintiffs sought an expenditure of state funds to compensate them for a past loss. The Court emphasized that the requested relief “in practice resemble[d] a money judgment payable out of the state treasury,” id. at 666, and that it “require[d] payment of state funds, not as a necessary consequence of compliance in the future with a substantive federal question determination, but as
15 In three of the other cases Rainwater cites in that section, the plaintiffs were permitted to rely on Ex parte Young. Verizon Md., Inc. v. Pub. Serv. Comm’n of Md., 535 U.S. 635, 645-48 (2002); Quern v. Jordan, 440 U.S. 332, 347-49 (1979); Milliken v. Bradley, 433 U.S. 267, 28890 (1977). In two others, the case turned not on the relief sought but on other issues not relevant here. Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 73-76 (1996) (comprehensive remedial scheme); Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 106 (1984) (Ex parte Young inapplicable to violations of state law).
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a form of compensation.” Id. at 668. Similarly, in Papasan, on which Rainwater also heavily relies, the Court stressed that the state would be required “to use its own resources to take the place of the [lost trust] corpus or the lost income from the corpus.”16 Papasan, 478 U.S. at 281.
In an effort to invoke the Eleventh Amendment, Rainwater seeks to characterize the relief the Plaintiffs seek as retrospective merely because Plaintiffs seek to correct decisions that were made in the past. Rainwater Br. 15-16. But that is not nearly enough to invoke the Eleventh Amendment’s immunity. In Milliken v. Bradley, 433 U.S. 267 (1977), the Supreme Court affirmed an award of compensatory and remedial education programs to remedy past de jure school segregation. Although the segregation had originated in the past, the relief sought was not tantamount to an award of damages from the state treasury and was therefore labeled prospective: “That the programs are . . . ‘compensatory’ in nature does not change the fact that they are part of a plan that operates prospectively.” Id. at 290. In fact, even if the order had “a direct and substantial impact on the state treasury,” id. at 289—something Rainwater has not shown here—it was nonetheless permissible because of its prospective nature.
Milliken thus reinforces the distinction between the various types of prospective relief Ex parte Young authorizes and the raids on state treasuries Edelman prohibits. As one court put it, in Milliken the Supreme Court “solidified the distinction it has drawn between prospective and retroactive relief in setting the boundaries of the Eleventh Amendment’s bar on suits against a state in federal court. The distinction accommodates an individual’s right to obtain relief in federal court from state officials’ unconstitutional actions with the states’ right not to have their
16 Even Rainwater’s own argument based on Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261 (1997), though misguided in several ways as discussed below, see infra Part I.C.2.b, recognizes the importance of a direct impact on state funds as a critical part of the analysis. See Rainwater Br. 17-18.
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public coffers depleted with large retroactive damage awards.” Santiago v. N.Y. State Dep’t of Corr. Servs., 945 F.2d 25, 29 (2d Cir. 1991).17
This case falls comfortably on the “prospective” side of that line. Plaintiffs seek to correct grant calculations awarded pursuant to a formula that relies upon discriminatory housing conditions and to ensure any future use of federal funds will not promote such discrimination. Louisiana’s public coffers face no risk of a retroactive damage award, because the relief can be awarded entirely through grants of federal funds. See 2005 Act, 119 Stat. at 2779-81; 2006 Act, 120 Stat. at 472-73; 2007 Act, 121 Stat. at 1343-44; 71 Fed. Reg. at 7666 (allocating funds from the 2005 Act to Louisiana); 71 Fed. Reg. at 63,337 (allocating funds from the 2006 Act to Louisiana). Should Plaintiffs prevail on the merits, a remedial order would therefore be not a raid on the Louisiana state treasury but instead a directive to correct the Road Home program’s discriminatory formula using only federal funds. Such relief is unequivocally prospective.
b. The decision in Coeur d’Alene is inapplicable. Perhaps recognizing that Plaintiffs here seek prospective relief, Rainwater argues that “even prospective relief . . . [is] barred if the relief sought is the functional equivalent of relief otherwise barred by the Eleventh Amendment and ‘special sovereignty interests’ are implicated.” Rainwater Br. 16 (citing Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261, 281 (1997)). Rainwater nowhere describes, however, what form of relief barred by the Eleventh Amendment is the “functional equivalent” of the relief sought here. Nor is Rainwater’s analogy to Coeur d’Alene availing. In Coeur d’Alene, the plaintiffs sought to tread on the state’s core sovereign
17 If Rainwater’s statement that “this lawsuit does not challenge the constitutionality of Mr. Rainwater’s actions,” Rainwater Br. 10, seeks to distinguish between statutory and constitutional claims, it is misguided. Ex parte Young applies equally to statutory and constitutional claims. See, e.g., Verizon Md., 535 U.S. at 645 (applying Ex parte Young to a claim that state officers violated the Telecommunications Act of 1996 and a Federal Communications Commission ruling).
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power: the power to exercise control over the lands and waters of the state. As the Supreme Court described it, “[t]he requested injunctive relief would bar the State’s principal officers from exercising their governmental powers and authority over the disputed lands and waters,” and “diminish, even extinguish, the State’s control over a vast reach of lands and waters long deemed by the State to be an integral part of its territory.” Coeur d’Alene, 521 U.S. at 282. Requiring Road Home grants to be administered in a way that is fair to African American homeowners is a far cry from extinguishing a state’s control over its own sovereign territory.
Nor can Coeur d’Alene be stretched to apply to this case. The D.C. Circuit has declined to “extend Coeur d’Alene beyond its ‘particular and special circumstances,’ which involved the protection of a State’s land.” Vann, 534 F.3d at 756 (citation omitted). Instead, it “le[ft] it for the Supreme Court to decide whether to add additional sovereign interests to the core concerns discussed in Coeur d’Alene.” Id.18 Against this controlling precedent, the best authority Rainwater can muster for his tortured analogy is a single case in which the plaintiffs sought to exercise control over state funds “where Congress has expressly enacted that states may allocate such funds as they please.” Barton v. Summers, 293 F.3d 944, 951 (6th Cir. 2002). But Barton simply echoes the point highlighted above: the Eleventh Amendment acts as a bar when the relief sought constitutes a raid on the state’s general revenues. Put simply, Coeur d’Alene affords the same protection to a state’s land that Edelman provides to its treasury. See Vann, 534
18 See also 17A Wright & Miller, Federal Practice & Procedure § 4232 & n.41 (“Lower courts have been reluctant to use the special state sovereignty interest rationale to limit Ex Parte Young relief.”) (collecting cases); Hill v. Kemp, 478 F.3d 1236, 1259 (10th Cir. 2007) (recognizing that “the Supreme Court in Verizon Maryland clarified that the courts of appeals need not (and should not) linger over the question whether ‘special’ or other sorts of sovereign interests are at stake before analyzing the nature of the relief sought.”); Cardenas v. Anzai, 311 F.3d 929, 938 (9th Cir. 2002) (“Applying the Coeur d’Alene exception to bar this action because it affects the state’s interest in providing for the public health and welfare would allow the Coeur d’Alene exception to swallow the Ex parte Young rule.”).
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F.3d at 756 (“Coeur d’Alene closely aligns with earlier decisions holding that Ex parte Young cannot be used to gain access to the State’s treasury.”).
In short, this case fits comfortably within the Ex parte Young doctrine, and Rainwater’s Eleventh Amendment argument is meritless.
c. There can be no Eleventh Amendment immunity for violations of the HCDA.
In addition, as to Plaintiffs’ claims arising under the HCDA, Rainwater can assert no Eleventh Amendment immunity at all. Under 42 U.S.C. § 2000d-7, “A State shall not be immune under the Eleventh Amendment . . . for a violation of . . . the provisions of any . . . Federal statute prohibiting discrimination by recipients of Federal financial assistance.” As discussed in more detail infra Part II.A.1, the HCDA prohibits discrimination by recipients of CDBG grants. See 42 U.S.C. §§ 5304(b)(2), 5306, 5309(a). Rainwater can therefore assert no immunity for claims under that section.
* * * Neither defendant has raised a persuasive argument that this Court lacks subject-matter jurisdiction to hear Plaintiffs’ claims. The motions to dismiss for lack of subject-matter jurisdiction under Rule 12(b)(1) should be denied. II. Defendants’ motions to dismiss for failure to state a claim should be denied. Both Defendants also move to dismiss the Complaint under Rule 12(b)(6) for failure to state a claim. Rainwater argues that the Fair Housing Act does not apply to the Road Home program, and that Plaintiffs may not enforce the HCDA in court. Rainwater Br. 25-31, 33-38. HUD argues that its conduct is unreviewable under the Administrative Procedure Act. HUD Br. 31-40. In addition, both Defendants argue that Plaintiffs have not alleged sufficient facts to state a violation of Title VIII. Rainwater Br. 31-33; HUD Br. 40-45.
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For the reasons discussed below, Plaintiffs’ claims are reviewable by this Court and are adequately pleaded.
A. Rainwater is subject to the requirements of both the Fair Housing Act and the HCDA.
Rainwater moves to dismiss for failure to state a claim under Rule 12(b)(6) on the grounds that (1) the Road Home program is not subject to the requirements of the Fair Housing Act, and (2) Plaintiffs cannot enforce the requirements of the HCDA. Rainwater Br. 25-31, 3336. Rainwater’s first argument is frivolous: his own certifications demonstrate the applicability of the Fair Housing Act to the Road Home program, and Plaintiffs have alleged an effect on the availability of housing sufficient to establish the applicability of Title VIII in any event. Rainwater’s second argument must likewise be rejected, because Plaintiffs have a clear right to enforce the HCDA in this action.
1. This Court must reject Rainwater’s disingenuous argument that the Road Home program is beyond the reach of the Fair Housing Act.
Rainwater first argues that the Fair Housing Act does not apply to the Road Home program because it is a “compensation grant program,” and not a “housing program.” Rainwater Br. 19-30. This is an astonishing argument for Rainwater to make, given that he was required to certify to HUD—before receiving any CDBG Disaster Recovery Grant funds under the appropriations acts—that all of those funds would be administered in compliance with the Fair Housing Act. Even apart from Rainwater’s certification, the case law makes clear that the Road Home program is subject to the requirements of the Fair Housing Act.
The statutes that funded the CDBG Disaster Recovery Grant program authorized appropriations “for activities authorized under title I of the Housing and Community Development Act of 1974.” 2005 Act, 119 Stat. at 2779-80; see also 2006 Act, 120 Stat. at 472 (same). The HCDA provides block grants to state and local governments for housing and
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housing-related development activities. 42 U.S.C. §§ 5301, 5305(a) (enumerating a list of eligible housing and housing-related activities). The HCDA further specifies that the use of grant funds “will be conducted and administered in conformity with . . . the Fair Housing Act . . . .” Id. § 5304(b)(2). Because the appropriations acts expressly limited the use of Disaster Recovery Grant funds to housing-related activities authorized under the HCDA, and because the HCDA requires that all funds be spent in conformity with the Fair Housing Act, it is hard to conceive how Rainwater can claim the Road Home program is not subject to the Fair Housing Act.
Rainwater’s argument is made even more incredible by the requirement that he agree to comply with the Fair Housing Act as a condition of receiving the funds. The HCDA provides that prior to the receipt of grant funds, grantees must (among other requirements) certify that the grantee will comply with the Fair Housing Act and will affirmatively further fair housing. Id. § 5304(b)(2). To effectuate these statutory requirements, HUD has promulgated a detailed regulatory framework governing a grantee’s use of CDBG Disaster Recovery Grant funds. That framework requires any state receiving Disaster Recovery Grant funds to certify both that the state “will affirmatively further fair housing,” and that “the grant will be conducted and administered in conformity with . . . the Fair Housing Act . . . and implementing regulations.” 71 Fed. Reg. at 7671 (regulations applying to the 2005 Act); see also 71 Fed. Reg. at 63,339 (providing that all regulations that apply to the 2005 Act will also apply to the 2006 Act); 72 Fed. Reg. at 70,472 (providing that all program requirements that apply to the 2005 and 2006 Acts will also apply to the 2007 Act); 73 Fed. Reg. at 46,314 (reconsidering and reauthorizing the certification requirements applicable to all three appropriations).
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In other words, as a condition of receiving the CDBG Disaster Recovery Grant funds that Rainwater used to establish the Road Home program, Rainwater was required to certify to HUD that all uses of the funds would be conducted in conformity with the Fair Housing Act. For Rainwater now to contend that the Fair Housing Act does not apply is hard to reconcile with, and indeed calls into question, Rainwater’s prior certifications that he would comply with this law. See United States ex rel. Anti-Discrimination Ctr. of Metro N.Y., Inc., v. Westchester County, No. 06-2860, 2009 WL 455269, at *2, *13-16 (S.D.N.Y. Feb. 24, 2009) (rejecting Westchester County’s motion for summary judgment in a qui tam action in which the relators alleged that the County falsely certified that it would use CDBG grant funds in compliance with the Fair Housing Act).
In any event, Rainwater’s assertion that the Fair Housing Act does not apply to the Road Home program because it is a “compensation program” is incorrect. The stated purpose of the Road Home program is to rebuild hurricane-affected communities, and the challenged Road Home formula provides grants to homeowners who agree to use the funds to rebuild or repair their homes. Compl. ¶¶ 44-46. Each of the individual Plaintiffs alleges that he or she has been unable to complete home repairs, and in some cases has been unable to return to the dwelling at all, because of the discriminatory disparate impact of the Road Home formula. Compl. ¶¶ 61-65. These allegations are sufficient to state a claim that Rainwater has “ma[de] unavailable or den[ied]” housing to African American homeowners in violation of § 3604(a). This Court has held that § 3604(a) must be read broadly to reach any conduct that hinders access to housing on the basis of race. See, e.g., Nat’l Fair Hous. Alliance, Inc. v. Prudential Ins. Co., 208 F. Supp. 2d 46, 56 (D.D.C. 2002) (“[T]he broad, general language—reflected in phrases such as ‘otherwise make unavailable or deny’—was intended to be flexible enough to cover multiple
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types of housing-related transactions.”); see also Nat’l Cmty. Reinvestment Coal. v. Accredited Home Lenders Holding Co., 573 F. Supp. 2d 70, 76-77 (D.D.C. 2008) (“NCRC”); Nat’l Cmty. Reinvestment Coal. v. Novastar Fin., Inc., No. 07-0861, 2008 WL 977351, at *2-3 (D.D.C. Mar. 31, 2008). Because the Road Home formula operates to deny black families sufficient rebuilding assistance compared to white families, it hinders access to housing on the basis of race and is comfortably within the scope of conduct prohibited by § 3604(a).
Rainwater argues that § 3604(a) applies only to prospective homeowners, and does not apply to Plaintiffs here because they were already homeowners before Hurricane Katrina. This argument is incorrect. This Court has held that § 3604(a) applies to conduct that puts existing homeowners at risk of losing their property. See 2922 Sherman Ave., 444 F.3d at 682; Hargraves v. Capital City Mortgage Corp., 140 F. Supp. 2d 7, 20 (D.D.C. 2000). Rainwater also argues that § 3604(a) does not prohibit conduct, unrelated to housing, that may diminish home values on the basis of race. Rainwater Br. 26-29 (citing Jersey Heights Neighborhood Ass’n v. Glendening, 174 F.3d 180, 192 (4th Cir. 1999), and Cox v. City of Dallas, 430 F.3d 734, 740 (5th Cir. 2005)). Even assuming this to be correct, Plaintiffs do not allege that the Road Home program diminishes the value of their homes—they allege that the grant formula has made housing unavailable to them because of their race. Compl. ¶¶ 44-46, 61-65.
Finally, Rainwater asserts in a footnote that the requirement to affirmatively further fair housing in 42 U.S.C. § 3608(e)(5) applies only to HUD and not to state grantees. See Rainwater Br. 25 n.7. This argument is foreclosed by the terms of the HCDA as well as more than three decades of case law. See Otero v. N.Y. City Hous. Auth., 484 F.2d 1122, 1133-34 (2d Cir. 1973) (describing “the affirmative duty placed on the Secretary of HUD by [§ 3608(e)(5)] and through him on other agencies administering federally-assisted housing programs”); Langlois v. Abington
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Hous. Auth., 234 F. Supp. 2d 33, 73 (D. Mass. 2002) (“When viewed in the larger context of Title VIII, the legislative history, and the case law, there is no way—at least, none that makes sense—to construe the boundary of the duty to affirmatively further fair housing as ending with the Secretary [of HUD].” (citing Otero, 484 F.2d at 1133-34)); Resident Advisory Bd. v. Rizzo, 425 F. Supp. 987, 1015-17 (E.D. Pa. 1976) (holding that the affirmative obligation to promote fair housing in § 3608(e)(5) “applies not only to HUD but applies as well to other governmental agencies administering federally financed housing programs”).
Accordingly, this Court should reject Rainwater’s attempt -- after certifying to HUD that he would administer the Road Home program in compliance with the Fair Housing Act -- to evade his obligation to comply with that statute.
2. Plaintiffs may enforce 42 U.S.C. § 5304(b) against Rainwater through a direct right of action or under 42 U.S.C. § 1983.
Rainwater concedes that the Road Home program is subject to the HCDA, but contends that Plaintiffs have no right of action to enforce § 5304(b). See Rainwater Br. 33-38. This argument should be rejected, because Plaintiffs may enforce § 5304(b) directly through an implied right of action or, in the alternative, under 42 U.S.C. § 1983.
a. Congress intended the HCDA to be directly enforceable through an implied right of action.
Courts weigh four factors in determining whether plaintiffs have an implied right of action to enforce a statute: (1) whether the plaintiff is part of the class for whose benefit the statute was enacted; (2) whether the legislature intended to create a private remedy; (3) whether a private remedy is consistent with the purposes of the legislation; and (4) whether the cause of action is not founded on an area traditionally relegated to state law. Tax Analysts v. IRS, 214 F.3d 179, 185-86 (D.C. Cir. 2000) (citing Cort v. Ash, 422 U.S. 66, 78 (1975)). This Court has explained that of these factors, “the most important consideration is whether the legislature
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intended to create a private right of action.” Am. Fed’n of Gov’t Employees v. Hawley, 543 F. Supp. 2d 44, 47 (D.D.C. 2008) (quoting Dial A Car, Inc. v. Transp., Inc., 132 F.3d 743, 744 (D.C. Cir. 1998)). Moreover, “there is no need for [the Court] to ‘trudge through all four of the factors when the dispositive question of legislative intent has been resolved.’” Nat’l Postal Prof’l Nurses v. U.S. Postal Serv., 461 F. Supp. 2d 24, 32 n.1 (D.D.C. 2006) (quoting Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Curran, 456 U.S. 353, 388 (1982)).
Here, Congress’s intent to provide a remedy for violations of the HCDA is apparent from the legislative history. The House Report to the 1987 amendments to the HCDA expressly states this intent:
The assisted housing programs have been created specifically to assure lower income households have greater access to decent and affordable housing than their limited incomes would otherwise permit. The Committee intends, and has always intended, that applicants and tenants who are adversely affected by violations of these statutory provisions should have a cause of action to enforce the statute in federal court. . . . [T]he Committee wishes to clarify its long-standing intention in favor of private enforcement. H.R. Rep. No. 100-122(I), at 53 (1987), as reprinted in 1987 U.S.C.C.A.N. 3317, 3369 (emphasis added). Rainwater’s assertion that there is nothing in the legislative history to demonstrate Congress’s intent to provide a right to sue, Rainwater Br. 35, is therefore false. Also false is Rainwater’s assertion that “no court has found that the HCDA affords a private cause of action.” Rainwater Br. 37. The Fifth Circuit has specifically held that the HCDA provides plaintiffs with a right of action to enforce anti-discrimination provisions of the statute.19 Montgomery Improvement Ass’n v. HUD, 645 F.2d 291, 295 (5th Cir. 1981) (“[W]here
19 But cf. Latinos Unidos De Chelsea En Accion (LUCHA) v. HUD, 799 F.2d 774, 795 (1st Cir. 1986) (finding no private right of action to enforce certain provisions of the HCDA); Chan v. City of N.Y., 1 F.3d 96, 102 (2d Cir. 1993) (same); Freeman v. Fahey, 374 F.3d 663 (8th Cir.
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Congress enacts legislation for a particular purpose and forbids the expenditure of federal funds
in a manner that will discriminate against members of designated classes in the execution of that
purpose . . . [m]embers of those groups . . . may bring an action in federal court to seek redress
for such discrimination.”). The Fifth Circuit specifically concluded, as Plaintiffs contend here,
that Congress intended to create a private right of action to enforce the nondiscrimination
provisions of the HCDA. See id. at 296-97 (“It is clear from the [HCDA] that Congress granted
‘persons of low and moderate income’ certain rights and expressly forbad discrimination or
exclusion from benefits based on race, color, national origin, or sex. There is nothing in the Act to suggest any congressional purpose to deny a private cause of action.”).20
In light of the clear legislative history, this Court’s analysis could end here. Nat’l Postal
Prof’l Nurses, 461 F. Supp. 2d at 32 n.1. However, Plaintiffs’ argument that the HCDA may be
enforced through an implied right of action is further supported by examination of additional
factors. Like the plaintiffs in Montgomery, Plaintiffs here—low- and moderate-income
beneficiaries of a federal housing program—are clearly part of the “class for whose especial
benefit the statute was enacted.” Cort, 422 U.S. at 78. Indeed, even in the principal case upon
which Rainwater relies to support his argument that the HCDA does not provide plaintiffs with a
2004) (same). The D.C. Circuit has not yet addressed the issue of whether the HCDA provides an implied right of action.
20 Rainwater relies on Pennhurst State School & Hospital v. Halderman, 451 U.S. 1 (1981), to claim that because the HCDA was enacted pursuant to Congress’s spending clause authority, there is no private right of action. See Rainwater Br. 37. But in Pennhurst, the Court concluded that the statute at issue did not create a private right of action because it was merely a funding statute, and the language in “no way suggests that the grant of federal funds is ‘conditioned.’” 451 U.S. at 23. By contrast, the grant of CDBG funds is specifically and unequivocally conditioned upon the grantee’s compliance with the statute’s mandates. See 42 U.S.C. § 5304(b)(2); see also Wilder v. Va. Hosp. Ass’n, 496 U.S. 498, 509 (1990) (concluding that a provision of the Medicaid Act provided an enforceable private right and distinguishing Pennhurst on the ground that “neither the statute nor the corresponding regulations made compliance with the provision a condition of receipt of federal funding”).
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private right of action, the court concluded that low- and moderate-income individuals, as the “intended occupants of the contemplated housing,” are “within the primary protection of the [HCDA].” People’s Hous. Dev. Corp. v. City of Poughkeepsie, 425 F. Supp. 482, 491 (S.D.N.Y. 1976). Although the court ultimately concluded that the HCDA did not provide the plaintiff with a private right of action, it did so primarily because the only plaintiff was an organization, which could not “be characterized as ‘one of the class for whose especial benefit’ the [HCDA] was enacted.” Id. (citing Cort, 422 U.S. at 78). By contrast, Plaintiffs here include a class of lowand moderate-income individuals who are the “intended occupants of the contemplated housing.” Id.
Given Congress’s clear intent to protect persons of low and moderate income, a private remedy is also consistent with the purposes of the HCDA. Rainwater’s argument that the “sole remedies” for violations of the HCDA are contained in 42 U.S.C. § 5311 is without merit. See Rainwater Br. 34-35. Although § 5311 does provide for certain enforcement measures to be undertaken by the Secretary of HUD or the Attorney General, these federal enforcement options cannot be read to preclude private enforcement in light of the clear congressional intent to the contrary. See People’s Hous. Dev. Corp., 425 F. Supp. at 491 (holding that the § 5311 enforcement measures “do not necessarily preclude private rights of action”); Wright v. City of Roanoke Redevelopment & Hous. Auth., 479 U.S. 418, 424 (1987) (rejecting argument that enforcement scheme in Housing Act of 1937 demonstrated Congress’s intent to foreclose a private action because the Act and its “legislative history [were] devoid of any express indication that exclusive enforcement authority was vested in HUD”).
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b. Plaintiffs may enforce the HCDA against Rainwater under 42 U.S.C. § 1983.
Even if this Court concludes that Plaintiffs do not have an implied right of action under the HCDA, Plaintiffs’ § 5304(b) claim is enforceable against Rainwater under 42 U.S.C. § 1983. See Price v. City of Stockton, 390 F.3d 1105, 1114-15 (9th Cir. 2004) (holding that plaintiffs’ claims under § 5304(d)(2)(A)(iii) and (iv) of the HCDA were enforceable under § 1983); Chan v. City of N.Y., 1 F.3d 96, 106 (2d Cir. 1993) (holding that plaintiffs’ claims under § 5310 of the HCDA were enforceable under § 1983).
The central inquiry in determining whether a statutory provision is enforceable under § 1983 is “whether or not Congress intended to confer individual rights upon a class of beneficiaries.” Gonzaga Univ. v. Doe, 536 U.S. 273, 285 (2002). To determine whether, in enacting a particular statutory provision, Congress intended to create rights enforceable by private parties pursuant to § 1983, courts consider “(1) whether Congress intended the provision in question to benefit the plaintiff; (2) whether the plaintiff has demonstrated that the asserted right ‘is not so vague and amorphous that its enforcement would strain judicial competence’; and (3) whether the provision giving rise to the right is ‘couched in mandatory, rather than precatory, terms.’” Price, 390 F.3d at 1109 (quoting Blessing v. Freestone, 520 U.S. 329, 340-41 (1997)). The § 1983 inquiry “begins with a presumption in favor of the right to bring suit, for the ‘general rule’ is that § 1983 provides a remedy for violations of federal statutory rights unless ‘Congress has affirmatively withdrawn the remedy.’” Chan, 1 F.3d at 103 (quoting Wilder v. Virginia Hosp. Ass’n, 496 U.S. 498, 509 n. 9 (1990)); see also Golden State Transit Corp. v. City of L.A., 493 U.S. 103, 106 (1989) (“[T]he coverage of [§ 1983] must be broadly construed.”).
All elements of the congressional-intent inquiry are met here. First, it is beyond question that Congress intended the HCDA to benefit low- and moderate-income individuals, such as
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Plaintiffs, who are beneficiaries of federal housing programs. See 42 U.S.C. § 5301(c) (“The primary objective of [the HCDA] is the development of viable urban communities, by providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low and moderate income.”); see also Chan, 1 F.3d at 104 (holding that the plaintiffs were the intended beneficiaries of one provision of the HCDA).
Second, it does not “strain judicial competence” for a court to determine whether a grantee has administered federal funds in a discriminatory manner, or has failed to affirmatively further fair housing. See, e.g., NAACP, 817 F.2d at 158-59 (holding that courts are capable of determining whether “HUD’s pattern of activity reveals a failure to live up to is obligation . . . to affirmatively further the policies of fair housing,” and noting that this determination is not “any more difficult than other civil rights cases in which courts have judged the lawfulness of agency behavior against roughly analogous standards”); Anderson v. Jackson, No. 06-3298, 2007 WL 458232, at *3 (E.D. La. Feb. 6, 2007) (holding that the duty to affirmatively further fair housing is not “too vague and amorphous for the courts to enforce” (quoting Langlois, 234 F. Supp. 2d at 72)); Wallace v. Chi. Hous. Auth., 298 F. Supp. 2d 710, 719 (N.D. Ill. 2003) (noting that the “parties [cannot] seriously contend” that a claim under § 3608(e)(5) “strains judicial competence”).
Third, § 5304(b)(2) of the HCDA is “couched in mandatory, rather than precatory, terms.” Blessing, 520 U.S. at 341. The statute provides that “[a]ny grant . . . shall be made only if the grantee certifies” that the nondiscrimination and fair housing certification requirements will be met. 42 U.S.C. § 5304(b)(2) (emphasis added). This language unambiguously imposes a binding obligation on grantees. See Chan v. City of N.Y., 803 F. Supp. 710, 725 (S.D.N.Y. 1992)
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(holding that the use of the term “shall” in § 5310 of the HCDA “indicates that Congress sought to create a binding obligation on the governmental unit”), aff’d, 1 F.3d at 104.
Although, as noted above, the HCDA does provide for limited HUD enforcement, see 42 U.S.C. § 5311, these enforcement provisions are not sufficiently comprehensive to indicate that Congress intended for HUD enforcement to be the exclusive remedy. See Wright, 479 U.S. at 428 (“HUD’s authority to audit, enforce annual contributions contracts, and cut off federal funds . . . are generalized powers [that] are insufficient to indicate a congressional intent to foreclose § 1983 remedies.”); Johnson v. Hous. Auth. of Jefferson Parish, 442 F.3d 356, 366 (5th Cir. 2006) (noting that “[b]oth methods of enforcement, i.e., HUD oversight and private actions under § 1983, may coexist if Congress so intends”); Price, 390 F.3d at 1114 (“The [HCDA] does not expressly preclude suits under Section 1983, nor does it provide a comprehensive remedial scheme incompatible with private enforcement.”); Chan, 803 F. Supp. at 728.
Because Plaintiffs are among the intended beneficiaries of the § 5304(b)(2) requirement that Disaster Recovery Grant funds be administered to affirmatively further fair housing, the statute may be enforced under § 1983.
B. The Administrative Procedure Act does not preclude Plaintiffs’ claims against HUD.
HUD argues that §§ 704 and 706 of the APA bar Plaintiffs’ claims because (1) Plaintiffs have an adequate remedy in court against HUD’s co-defendant Rainwater, see HUD Br. 32-35; (2) Plaintiffs have failed to allege a final agency action, see id. at 39; and (3) HUD’s statutory obligation to affirmatively further fair housing does not entail any discrete agency action that HUD is required to undertake, see id. at 36-40.
As an initial matter, HUD’s arguments erroneously assume that Plaintiffs’ claims must be assessed under the APA. But the express waiver of sovereign immunity in 5 U.S.C. § 702
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applies to all actions brought against federal agencies for relief other than money damages, and does not constrain Plaintiffs to proceed under the APA. Schnapper v. Foley, 667 F.2d 102, 107 (D.C. Cir. 1981) (citing the legislative history of § 702); see also Fallon, Meltzer, & Shapiro, Hart & Wechsler’s The Federal Courts & The Federal System 968-69 (5th ed. 2003) (“Though codified in the APA, the [§ 702] waiver applies to any suit, whether under the APA, § 1331, . . . or any other statute.”). Thus, because both Title VIII and the HCDA provide Plaintiffs with a direct right of action to challenge HUD’s discriminatory conduct, Plaintiffs need not proceed under the APA at all, and HUD’s motion to dismiss based on various APA requirements should be denied.
Even if Plaintiffs’ claims for relief may only be brought under the APA, the motion to dismiss should be denied because Plaintiffs’ claims against Rainwater are not an adequate alternative to a remedy for HUD’s distinct discriminatory conduct, and because the “discrete agency action” requirement does not preclude review of HUD’s actions in this case.
1. Title VIII and the HCDA directly confer a right of action to challenge HUD’s discriminatory conduct.
As noted, Plaintiffs allege that HUD violated the anti-discrimination provisions of Title VIII, 42 U.S.C. §§ 3604(a) and 3605(a), and that HUD has failed to fulfill its affirmative obligations under § 3608(e)(5) of Title VIII and § 5304(b)(2) of the HCDA. Compl. ¶¶ 74-77.
Plaintiffs’ claims under 42 U.S.C. §§ 3604(a) and 3605(a) are directly enforceable against HUD by the express terms of Title VIII. Section 3613 of Title VIII provides a right of action in federal court to redress “an alleged discriminatory housing practice.” 42 U.S.C. § 3613(a)(1)(A). The statute further defines discriminatory housing practice to include “an act that is unlawful under section 3604 [or] 3605 . . . of this title.” 42 U.S.C. § 3602(f). Because
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Plaintiffs specifically allege that HUD engaged in discriminatory activity in violation of §§ 3604
and 3605, they may raise such claims under the express grant of jurisdiction pursuant to § 3613.
Plaintiffs’ claims under § 3608(e)(5) are also directly enforceable against HUD under
§ 3613. See Young v. Pierce, 544 F. Supp. 1010, 1017-18 (E.D. Tex. 1982). In Young, the
district court held that § 3608(e)(5) was directly enforceable against HUD because the nature of
the § 3608(e)(5) obligation made HUD’s failure to meet that obligation a “discriminatory
housing practice” enforceable under § 3613:
[I]t seems axiomatic that violations of [§ 3608(e)(5)] through inaction or indolence must be actionable. Failure of HUD “affirmatively to further the policies of [Title VIII]” is illegal in a fundamental sense. . . . Viewed another way, the failure of HUD to perform its legal duties mandated by [§ 3608(e)(5)] constitutes a discriminatory housing practice, in itself. Id. at 1018.21 In reaching this conclusion, the court noted the scope and breadth of HUD’s
obligations under Title VIII, and reasoned that the statute’s enforcement provisions must also be
construed expansively. Id. at 1017 (“The scope of the Civil Rights Act of 1968 is majestic, and
its enforcement provisions are commensurately broad.”). A broad reading of Title VIII’s
enforcement provisions is consistent with the “familiar canon of statutory construction that
remedial legislation should be construed broadly to effectuate its purposes.” Tcherepnin v.
Knight, 389 U.S. 332, 336 (1967); see also Hous. Opportunities Made Equal, Inc. v. Cincinnati
Enquirer, Inc., 943 F.2d 644, 646 (6th Cir. 1991) (“Courts have given a broad reading to the
21 Plaintiffs recognize that a different judge of this Court has held that § 3608(e)(5) may only be enforced through the APA and cannot be enforced through § 3613. See Jones v. Office of the Comptroller of the Currency, 983 F. Supp. 197, 202-03 & n.8 (D.D.C. 1997) (Friedman, J.). Jones was affirmed after a pro se appeal to the D.C. Circuit in an unpublished, per curiam order “substantially for the reasons stated by the district court.” Jones v. Office of the Comptroller of the Currency, No. 97-5341, 1998 WL 315581, at *1 (D.C. Cir. May 12, 1998). Under the rules of the D.C. Circuit, the unpublished affirmance of Jones does not have precedential effect on this or any Court, see Circuit Rule 32.1(b)(1)(A), and Plaintiffs respectfully submit that the better reading of Title VIII is that applied by the Eastern District of Texas in Young.
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[Fair Housing Act] in order to fulfill its remedial purpose.”); cf. City of Edmonds v. Oxford House, Inc., 514 U.S. 725, 731 (1995) (“We also note precedent recognizing the [Fair Housing Act’s] ‘broad and inclusive’ compass, and therefore according a ‘generous construction’ to the Act’s complaint-filing provision.” (quoting Trafficante v. Metro. Life Ins. Co., 409 U.S. 205, 209, 212 (1972))).
In addition, as demonstrated supra Part II.A.2.a, Plaintiffs can enforce 42 U.S.C. § 5304(b)(2) directly against HUD through an implied right of action. See Montgomery, 645 F.2d at 293-97.
2. Plaintiffs’ claims against HUD are reviewable under 5 U.S.C. § 704. If Plaintiffs’ § 3608(e)(5) and § 5304(b)(2) claims may only be reviewed under the APA, 5 U.S.C. § 704 permits those claims to proceed against HUD because Plaintiffs have no other adequate remedy in a court. Section 704 provides, in pertinent part, that “final agency action for which there is no other adequate remedy in a court [is] subject to judicial review.” 5 U.S.C. § 704. HUD contends that Plaintiffs’ § 3608(e)(5) and § 5304(b)(2) claims are not reviewable, both because Plaintiffs could have an adequate alternative remedy by asserting discrimination claims against the responsible Louisiana state officials and because Plaintiffs do not challenge a final agency action. HUD Br. 32-35. Both arguments are incorrect.
a. Plaintiffs have no adequate remedy for HUD’s discriminatory conduct other than a remedy from HUD.
HUD first argues that its conduct is unreviewable under § 704 because Plaintiffs have an adequate remedy against Louisiana state officials. HUD Br. 32-35. But even if Plaintiffs prevail on their discrimination claims against Rainwater, any remedy fashioned against Rainwater alone would be ineffective without a judgment against HUD. Put simply, because HUD and the state
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of Louisiana are jointly responsible for the program’s implementation, proper remedial action may be ensured only by a court order applicable to both entities.
Congress’s purposes in enacting § 704 were (1) to codify the “proposition that ‘[o]ne need not exhaust administrative remedies that are inadequate,’” and (2) to make clear that “Congress did not intend the general grant of review in the APA to duplicate existing procedures for review of agency action.” Bowen, 487 U.S. at 902-03 (quoting Davis, Administrative Law § 26:11, at 464 (2d ed. 1983)). Plaintiffs’ remedies against Rainwater are not an adequate substitute for redress from HUD’s violation of the unique obligation that it is required to fulfill under federal fair housing law, and this Court’s review of HUD’s compliance with its fair housing obligations will not “duplicate existing procedures” for review of agency action. Id.
Section 3608(e)(5) of the Fair Housing Act requires the Secretary of HUD to affirmatively further fair housing. 42 U.S.C. § 3608(e)(5). It is well-established that this statutory mandate requires HUD to take active, affirmative steps—steps beyond its obligation to avoid discrimination—to promote fair housing and desegregation in its programs and activities. See NAACP, 817 F.2d at 155; Lee v. Pierce, 698 F. Supp. 332, 342 (D.D.C. 1988) (noting that under § 3608(e)(5), “HUD is obliged to do more than simply refrain from discriminating”). Similarly, the HCDA imposes an affirmative duty on HUD that is distinct from the obligations of HUD’s grantees. Under § 5304(b)(2), HUD must ensure that block grants distributed under the HCDA “will be conducted and administered in conformity” with Title VI and Title VIII, and that “the grantee will affirmatively further fair housing.” 42 U.S.C. § 5304(b)(2).
In accordance with these requirements, HUD has promulgated a detailed regulatory framework to oversee the administration of regular CDBG and Disaster Recovery Grant funds. See 24 C.F.R. Parts 91 and 570; 71 Fed. Reg. at 7666-72; 71 Fed. Reg. at 63,337-40; 72 Fed.
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Reg. at 70,472-74; 73 Fed. Reg. at 46,312-22. The regulatory scheme recognizes HUD’s expertise and obligation to monitor grant recipients for compliance with civil rights and other program requirements, as the Kome Declaration submitted with HUD’s motion to dismiss acknowledges. See, e.g., 71 Fed. Reg. at 7668, 7670 (describing HUD’s oversight process and role in providing “technical assistance” to grantees); Kome Decl. ¶¶ 16-17, 19, 22 (describing Louisiana’s reliance on technical assistance from HUD, based on HUD’s expertise in monitoring the administration of CDBG funds in other jurisdictions). HUD’s supervisory role thus is not only essential but required to ensure that grantees such as Rainwater comply with their affirmative anti-discrimination obligations.
In light of HUD’s role in ensuring that Rainwater’s use of Disaster Recovery Grant funds complies with fair housing law, Plaintiffs’ claims against Rainwater alone cannot provide an adequate remedy to redress the harm caused by HUD’s failure to comply with its own obligations to further fair housing. A complete remedy would require both that Rainwater develop a nondiscriminatory formula, and that HUD approve and oversee the administration of that formula. See 2005 Act, 119 Stat. at 2780 (requiring grantees to submit and HUD to approve a plan detailing the proposed use and criteria for eligibility of all Disaster Recovery Grant funds); 2006 Act, 120 Stat. at 473 (same); see also 42 U.S.C. § 5304(a)(1); 71 Fed. Reg. at 7669, 7671; 71 Fed. Reg. at 63,339; 72 Fed. Reg. at 70,472.
For this reason, several courts applying § 3608(e)(5) have expressly rejected HUD’s argument that relief from a HUD grantee is an adequate substitute for relief against HUD. Thompson v. HUD, 348 F. Supp. 2d 398, 422 (D. Md. 2005) (“[T]he Court does not construe § 704 to foreclose Plaintiffs’ access to the APA with respect to HUD’s alleged Title VIII violations.”); Dean v. Martinez, 336 F. Supp. 2d 477, 487 (D. Md. 2004) (“Because APA review
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of HUD’s [Fair Housing Act] compliance . . . addresses a different harm from the plaintiffs’
claims against the City . . . such claims are within the court’s jurisdiction.”); cf. Henry Horner
Mothers Guild v. Chi. Hous. Auth., 824 F. Supp. 808, 819-20 (N.D. Ill. 1993); Tinsley v. Kemp, 750 F. Supp. 1001, 1009 (W.D. Mo. 1990).22 The district court’s analysis in Tinsley is
particularly instructive. In that case, public housing residents sued both HUD and their local
public housing authority (the Housing Authority of Kansas City, or HAKC) under the Housing
Act, claiming that the defendants were permitting deterioration of residential units amounting to
illegal demolition. Tinsley, 750 F. Supp. at 1003. HUD argued in Tinsley, as here, that § 704
barred review of HUD’s actions because an adequate remedy was available by proceeding
against the housing authority alone. Id. at 1009. The court flatly rejected this argument, holding:
The pervasive regulation, the frequent and close oversight, and the funding provided by HUD to HAKC illustrates that HAKC could not correct alleged problems to any significant degree without HUD cooperation, supervision, approval and funding. A remedy directed only at HAKC could be nearly worthless in these circumstances. Any meaningful remedy could be achieved only with HUD’s involvement, so Section 704 does not preclude judicial review here.
Tinsley, 750 F. Supp. at 1009; see also Henry Horner Mothers Guild, 824 F. Supp. at 819-20.
The approach of these courts is consistent with the Supreme Court’s direction that § 704 “should
not be construed to defeat the central purpose of providing a broad spectrum of judicial review of
agency action.” Bowen, 487 U.S. at 903-04 (noting that the APA’s “‘generous review
provisions’ must be given a ‘hospitable’ interpretation” (quoting Abbott Labs. v. Gardner, 387
U.S. 136, 140-41 (1967))).
22 Numerous other courts have implicitly rejected HUD’s § 704 argument by adjudicating claims against HUD for § 3608(e)(5) and § 5304(b) violations even though the plaintiffs in those cases also sued HUD grantees. See, e.g., Davis v. HUD, 627 F.2d 942, 945 (9th Cir. 1980); Mejia v. HUD, 518 F. Supp. 935, 937 (N.D. Ill. 1981); Colony Fed. Sav. & Loan Ass’n v. Harris, 482 F. Supp. 296, 304 (W.D. Pa. 1980).
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HUD cites the following cases as being to the contrary: American Disabled for Attendant Programs Today (ADAPT) v. HUD, 170 F.3d 381 (3d Cir. 1999), Washington Legal Foundation v. Alexander, 984 F.2d 483 (D.C. Cir. 1993), and Women’s Equity Action League v. Cavazos, 906 F.2d 742 (D.C. Cir. 1990). See HUD Br. 33-34. Each of the cited cases involved a plaintiff’s allegation that HUD violated the law by failing to enforce compliance by federalfunding recipients with nondiscrimination requirements. See ADAPT, 170 F.3d at 384-85; Washington Legal, 984 F.2d at 484; Women’s Equity, 906 F.2d at 748. The court in each case held that because the plaintiffs had a right of action against the third parties to redress the claims of discrimination, there was a judicial alternative to a suit against HUD and review was therefore barred by § 704. See ADAPT, 170 F.3d at 390; Washington Legal, 984 F.2d at 487-88; Women’s Equity, 906 F.2d at 750. But the instant case does not seek to compel HUD to investigate another party’s fair housing violations. Rather, Plaintiffs seek declaratory and mandatory injunctive relief to redress HUD’s own conduct in which it failed to perform its affirmative obligations under fair housing law. See, e.g., Vaughn v. Consumer Home Mortgage, Inc., 293 F. Supp. 2d 206, 213 (E.D.N.Y. 2003) (distinguishing ADAPT and Washington Legal, and holding that relief against federal-funding recipients is not an adequate alternative under § 704 to review of HUD’s compliance with its own obligations); Lattimore v. Nw. Coop. Homes Ass’n, No. 900049, 1992 WL 118383, at *7 (D.D.C. May 19, 1992) (concluding that the plaintiff’s claims against private defendants did not provide her with an “adequate remedy” where “Defendant HUD has not identified any other mechanism that would insure that plaintiff could obtain appropriate relief against the government”).
Plaintiffs’ claims against Rainwater are distinct from the claims against HUD, and relief against Rainwater would not redress the specific harm that the Plaintiffs have incurred because
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of HUD’s own conduct. HUD’s participation is necessary to remedy the unlawful conduct at issue in this case. Plaintiffs’ claims against HUD for violations of § 3608(e)(5) and § 5304(b) are therefore reviewable under the APA, because “there is no other adequate remedy in a court.” 5 U.S.C. § 704.
b. Plaintiffs challenge final agency action. HUD argues in a single paragraph that review is barred by § 704 because Plaintiffs have not alleged any final agency action. HUD Br. 39. This argument is also incorrect. The final agency action limitation is intended to ensure that courts are not asked to supervise an agency’s “continuing (and thus constantly changing) operations,” but instead to intervene only to correct agency actions or inactions that have “an actual or immediately threatened effect.” Nat’l Wildlife Fed’n, 497 U.S. at 890, 894. Plaintiffs’ Complaint alleges that HUD assisted in developing, and then approved, the racially discriminatory Road Home grant formula. Compl. ¶ 50. Plaintiffs also allege actual effects from these final actions, including that African American homeowners in New Orleans are burdened by a discriminatory disparity in access to rebuilding resources compared to white homeowners. Id. ¶¶ 52-60. HUD does not suggest that its approval of the discriminatory Road Home grant formula is likely to change, and Plaintiffs have therefore stated a challenge to a final agency action. See Nat’l Wildlife Fed’n, 497 U.S. at 890, 894; Thompson v. HUD, No. 95-309, 2006 WL 581260, at *5-6 (D. Md. Jan. 10, 2006).
3. The “discrete agency action” requirement does not preclude review of HUD’s actions in this case.
HUD argues that its compliance with § 3608(e)(5) and § 5304(b)(2) may not be reviewed under the APA, because there is no discrete agency action that HUD was required to take. HUD cites Norton v. Southern Utah Wilderness Alliance, 542 U.S. 55 (2004) (“SUWA”), for the
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proposition that § 706(1) of the APA precludes review of HUD’s actions in this case. See HUD Br. 36. This argument should be rejected because HUD’s conduct is properly reviewed under § 706(2), not § 706(1), and SUWA therefore does not apply. Moreover, even if this Court were to evaluate HUD’s actions under the § 706(1) scope of review framework, the SUWA standard is met here.
a. HUD’s conduct is properly reviewed pursuant to § 706(2). The APA provides that federal courts may review agency action pursuant to two distinct scope of review provisions. Where agency action is otherwise reviewable:
The reviewing court shall— (1) compel agency action unlawfully withheld or unreasonably delayed; and (2) hold unlawful and set aside agency action, findings, and conclusions found to be—
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; [or] . . . (C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right . . . . 5 U.S.C. § 706. HUD assumes without discussion that Plaintiffs’ claims should be reviewed under § 706(1). Plaintiffs’ claims are properly reviewed under § 706(2), not § 706(1), because Plaintiffs ask the Court to set aside agency action that is arbitrary and capricious or that is in excess of HUD’s statutory authority. Plaintiffs specifically allege that certain HUD actions have violated § 3608(e)(5) and § 5304(b)(2). Compl. ¶¶ 74-77. Plaintiffs allege that HUD is responsible for the administration, funding, and supervision of federal low-income housing programs, including the CDBG Disaster Recovery Grant program, and that HUD may not waive fair housing or nondiscrimination requirements in its administration of the Disaster Recovery Grant program. Id. ¶¶ 6, 18, 37. Plaintiffs allege that HUD consulted with the LRA on the design and development of the Road
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Home grant formula; that HUD approved the grant formula and other Road Home program details; and that HUD is engaged in continuing oversight and approval of the Road Home program. Id. ¶¶ 49-51. Plaintiffs further allege that because of these actions by HUD, the individual and organizational plaintiffs have suffered illegal racial discrimination in violation of Title VIII and the HCDA. Id. ¶¶ 52-73.
Properly considered, then, Plaintiffs’ claims are based on affirmative decisions and actions undertaken by HUD that have violated § 3608(e)(5) and § 5304(b), and are therefore reviewable under § 706(2). See, e.g., NAACP, 817 F.2d at 160-61; Thompson, 2006 WL 581260, at *3-4; M&T Mortgage Corp. v. White, No. 04-cv-4775, 2006 WL 47467, at *11-14 (E.D.N.Y. Jan. 9, 2006).
HUD repeatedly suggests that Plaintiffs have only alleged agency inaction. See HUD Br. 37-38. As noted, the Complaint clearly alleges unlawful action and decisions by HUD. Compl. ¶¶ 6, 18, 37, 49-73. And in any event, agency inaction is reviewable under § 706(2) as well when, as here, Congress has imposed affirmative statutory obligations. See, e.g., NAACP, 817 F.2d at 160 (explaining that “[t]he purpose of § 706(2)(A) is to provide for judicial review of agency action and inaction that falls outside its statutory powers” (emphasis added)); Am. Horse Prot. Ass’n v. Lyng, 812 F.2d 1, 4 (D.C. Cir. 1987) (“[T]his case requires a determination of whether the Secretary’s failure to act was ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law’ under 5 U.S.C. § 706(2)(A).” (emphasis added)); see also 5 U.S.C. § 551(13) (“For the purpose of this subchapter . . . ‘agency action’ includes . . . failure to act.”).
Because Plaintiffs’ claims are reviewable under § 706(2), HUD’s discussion of SUWA should be disregarded. Alliance to Save the Mattaponi v. U.S. Army Corps of Eng’rs, 515 F.
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Supp. 2d 1, 9-10 (D.D.C. 2007) (Kennedy, J.) (“SUWA addresses only attempts to ‘compel
agency action’ pursuant to § 706(1) and does not reach claims encompassed within § 706(2), which merely seek to ‘hold unlawful and set aside’ arbitrary or capricious ‘agency action[s].’”).23
Indeed, SUWA could not reach claims brought under the § 706(2) scope of review provision,
because the plaintiffs in SUWA only sought § 706(1) review. See S. Utah Wilderness Alliance v.
Babbitt, No. 99-852, 2000 WL 33347722, at *2 (D. Utah Dec. 22, 2000) (“Plaintiffs’ claims are
all brought under section 706(1) of the Administrative Procedure Act . . . .”). HUD’s effort to extend the SUWA analysis to this case should therefore be rejected.24
b. Even if HUD’s actions can only be reviewed pursuant to § 706(1), the “discrete agency action” requirement is met here.
Even if HUD is correct that § 706(1) provides the proper scope of review of HUD’s
conduct in this case, Plaintiffs meet the standard established in SUWA.
In SUWA, the plaintiffs alleged that the Bureau of Land Management (“BLM”) violated a
statute requiring that certain wilderness study areas be managed “so as not to impair their
suitability for preservation as wilderness,” by failing to act to protect public lands in Utah from
environmental damage caused by off-road vehicles. SUWA, 542 U.S. at 58-59 (quoting 43
U.S.C. § 1782(c)). The Supreme Court held that “a claim under § 706(1) can proceed only
where a plaintiff asserts that an agency failed to take a discrete agency action that it is required
to take.” Id. at 64. Because banning off-road vehicles from wilderness study areas was not an
23 For the same reason, HUD’s argument that the First Circuit’s NAACP decision was implicitly overruled by SUWA, see HUD Br. 38, should be rejected. The First Circuit held in NAACP that review of HUD’s compliance with its § 3608(e)(5) obligations was proper under both § 706(1) and § 706(2). NAACP, 817 F.2d at 160-61. Because SUWA only addressed the § 706(1) scope of review provision, NAACP is still good law.
24 Despite HUD’s suggestion to the contrary, Plaintiffs are not seeking a court order telling HUD how to exercise its discretion in awarding unobligated funds. See HUD Br. 39. Instead, Plaintiffs seek an injunction providing, inter alia, that HUD must exercise its mandatory fair housing obligation with respect to funds that it obligates—or has already obligated—to LRA.
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action that BLM was specifically required to take in order to meet its statutory obligation, the Supreme Court rejected the plaintiffs’ claim. Id. at 65-67. SUWA thus limits justiciable challenges under § 706(1) to those in which an agency is under a non-general legal duty to act.
The purpose of the discrete-agency-action limitation is to “protect agencies from undue judicial interference with their lawful discretion, and to avoid judicial entanglement in abstract policy disagreements which courts lack both expertise and information to resolve.” Id. at 66. The limitation thus precludes “the kind of broad programmatic attack we rejected in Lujan v. National Wildlife Federation.” Id. at 64 (internal citation omitted).
HUD argues that its obligations under § 3608(e)(5) and § 5304(b) are too general to be enforced under the APA. However, in light of the purposes of the discrete-agency-action limitation, Plaintiffs have properly alleged that HUD failed to take discrete actions it is required to take, and are not seeking to bring an impermissibly broad programmatic attack.
First, the Fair Housing Act establishes a specific legal duty on HUD to act affirmatively to promote fair housing. As noted, § 3608(e)(5) provides that “[t]he Secretary of Housing and Urban Development shall . . . administer the programs and activities relating to housing and urban development in a manner affirmatively to further the policies of this subchapter.” 42 U.S.C. § 3608(e)(5). The policies of the Fair Housing Act are not abstract or imprecise, but rather are specific and categorical. They include “to provide . . . for fair housing throughout the United States,” 42 U.S.C. § 3601; to replace concentrated African American ghettos with “truly integrated and balanced living patterns,” 114 Cong. Rec. 3422 (statement of Sen. Mondale); and to “remove the walls of discrimination which enclose minority groups,” 114 Cong. Rec. 9563 (statement of Rep. Celler). Thus, HUD has, “at a minimum, an obligation to assess negatively those aspects of a proposed course of action that would further limit the supply of genuinely
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open housing.” NAACP, 817 F.2d at 156. Put simply, “the Act’s fair housing policy requires something more of HUD than simply to refrain from discriminating itself or purposely aiding the discrimination of others.” Id. at 154.
HUD’s obligations pursuant to § 3608(e)(5) are therefore simply not comparable to the statute at issue in SUWA. Unlike the challenge in SUWA, where the Supreme Court held that imposing on BLM an obligation to ban off-road vehicles would interfere with its discretion in meeting its wilderness-preservation mandate, Plaintiffs’ effort to require HUD to promote fair housing as required by § 3608(e)(5) does not require undue judicial interference with HUD’s lawful discretion. Rather, remedies may be devised that take account of the nature of HUD’s statutory violations while acknowledging agency discretion in day-to-day management. Although HUD has discretion to determine precisely how it will meet its fair housing and nondiscrimination mandate, it does not have discretion, as HUD seems to assert, to decide not to meet that mandate by allowing federal funds to be used in a way that works against fair housing goals. Plaintiffs have thus properly alleged that (in addition to the improper actions described above) HUD failed to take acts that it was specifically required to take. Cf. Natural Res. Def. Council v. Patterson, 333 F. Supp. 2d 906, 916 (E.D. Cal. 2004) (distinguishing SUWA and holding that an agency’s statutory obligation to “reestablish and maintain” the historic fisheries in certain California waterways was a “specific legal duty [that was] a far cry from the general statutory directive that the government endeavor to manage certain of its lands ‘so as not to impair their suitability for preservation as wilderness.’” (quoting 43 U.S.C. § 1782(c))).
Second, Plaintiffs have not raised an impermissibly broad programmatic attack that would entangle this Court in abstract policy disagreements. See SUWA, 542 U.S. at 64; Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 890-94 (1990). Courts have read National Wildlife
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Federation to foreclose challenges to “broad ill-defined programs that do not cause concrete effects.” Northcoast Envtl. Ctr. v. Glickman, 136 F.3d 660, 669 (9th Cir. 1998). Plaintiffs here have not challenged an ill-defined program without concrete effects, but rather have challenged a specific set of HUD decisions with regard to the Road Home program that has resulted in the concrete effect of disproportionately burdening African American families in their efforts to repair and return to their homes. See Compl. ¶¶ 52-60.
Several courts have held, subsequent to the Supreme Court’s decision in SUWA, that § 3608(e)(5) imposes enforceable obligations on HUD that may be reviewed under the APA. In Darst-Webbe Tenant Association Board v. St. Louis Housing Authority, 417 F.3d 898, 907 (8th Cir. 2005), for example, the Eighth Circuit held that SUWA permits review of whether “HUD exercised its broad authority in a manner that demonstrates consideration of, and an effort to achieve, . . . results” by furthering opportunities for fair housing.25 See also Thompson, 2006 WL 581260, at *4-5 (“As held in Darst-Webbe, SUWA does not prevent the Court from reviewing whether HUD has met its statutory duty to affirmatively further fair housing.”).
This Court should accordingly hold that review of HUD’s compliance with its obligation to affirmatively further fair housing is proper under the APA.
C. Plaintiffs’ Complaint alleges sufficient facts to state a claim against both HUD and Rainwater for violations of Title VIII and the HCDA.
HUD and Rainwater raise various arguments regarding the sufficiency of the facts alleged in Plaintiffs’ Complaint. See HUD Br. 40-45; Rainwater Br. 18-33. In considering the sufficiency of a plaintiff’s factual allegations, this Court accepts a plaintiff’s allegations as true
25 While the Eighth Circuit without analysis equated § 3608(e)(5) with the general landmanagement statute at issue in SUWA, a comparison with which Plaintiffs disagree, the court nonetheless went on to identify a specific legal obligation that is enforceable against HUD— namely, the obligation to “demonstrate[] consideration of, and an effort to achieve, . . . results” in the form of furthering fair housing opportunities. Darst-Webbe, 417 F.3d at 907.
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and draws all reasonable inferences in the plaintiff’s favor. Aktieselskabet AF 21 Nov. 2001 v. Fame Jeans Inc., 525 F.3d 8, 15 (D.C. Cir. 2008). The plaintiff’s allegations must “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555.
1. HUD’s motion to dismiss must be denied because Plaintiffs allege sufficient facts to establish violations of Title VIII and the HCDA.
HUD asserts that Plaintiffs’ Complaint fails to satisfy the pleading standard in Rule 8(a) for its causes of action against HUD under Title VIII and the HCDA. HUD Br. 40-45. But Plaintiffs’ Complaint clearly satisfies Rule 8(a) by providing ample notice to HUD of the factual basis for the claims of disparate impact discrimination under § 3604(a) and § 3605, and for the claims that HUD failed to affirmatively further fair housing under § 3608(e)(5) and § 5304(b)(2).
HUD first argues that Plaintiffs have failed to state a claim for disparate impact discrimination under § 3604(a) and § 3605(a). HUD rests this argument on the uniformly rejected theory that Plaintiffs must plead a prima facie case in their Complaint and, consequently, that Plaintiffs must allege statistically significant statistics about racial disparities caused by HUD’s policies. See HUD Br. 41-43. It is well-accepted that statistics showing a policy had a disparate impact on a protected class satisfy a plaintiff’s prima facie case in a Title VIII disparate impact action. See 2922 Sherman Ave. Tenants’ Ass’n v. Dist. of Columbia, 444 F.3d 673, 67981 (D.C. Cir. 2006). But uniform authority makes it clear that plaintiffs need not establish a prima facie case at the pleading stage, because “[t]he prima facie case . . . is an evidentiary standard, not a pleading requirement.” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 510, 515 (2002); see also Twombly, 550 U.S. at 569-70 (reaffirming Swierkiewicz and reiterating that a heightened pleading requirement does not apply to discrimination claims). Thus, while Plaintiffs may need to produce statistics on racial disparities to prove their case at trial, or to defeat a
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summary judgment motion by HUD, they cannot be required to plead such statistics to survive a motion to dismiss. See, e.g., NCRC, 573 F. Supp. 2d at 79.
In NCRC, this Court rejected a defendant’s identical argument that to survive a motion to dismiss under Rule 12(b)(6), plaintiffs in a Title VIII disparate impact action were required to plead facts showing that the defendant’s mortgage underwriting policies caused a disproportionate impact on African American homeowners, including statistics comparing how African American and white homeowners fared when the policy was applied to them. Id. (following Swierkiewicz and reiterating that “‘the requirements for establishing a prima facie case’” do not “‘apply to the pleading standard that plaintiffs must satisfy in order to survive a motion to dismiss.’”) (quoting Swierkiewicz, 534 U.S. at 511); NCRC Dkt., No. 07-1357.
Tellingly, HUD relies exclusively and inappropriately on cases involving summary judgment motions or trials (where showing the prima facie case is necessary), and cites not a single case involving a Rule 12(b)(6) motion (where showing the prima facie case is unnecessary).26 This Court should disregard these wholly inapposite cases and, as in NCRC, reaffirm that at this stage “the ordinary rules for assessing the sufficiency of a complaint apply,” and not a heightened pleading standard. Id. (quoting Swierkiewicz, 534 U.S. at 511).
Plaintiffs’ Complaint easily satisfies the proper pleading standard. “Rule 8 requires not a specific quantity of facts, but simply ‘a short and plain statement of the claim showing that the
26 See HUD Br. 41 (citing Graoch Assocs. v. Louisville/Jefferson County Metro Human Relations Comm’n, 508 F.3d 366, 369 (6th Cir. 2007) (affirming an appeal from the grant of summary judgment in favor of an apartment owner); 2922 Sherman Ave., 444 F.3d at 676 (reversing a judgment after a jury trial on a disparate impact claim and ordering a new trial on plaintiffs intentional discrimination claim); Huntington Branch, NAACP v. Town of Huntington, 844 F.2d 926, 928 (2d Cir. 1988) (reversing an appeal from a judgment following a bench trial); United States v. City of Black Jack, 508 F.2d 1179, 1187-88 (8th Cir. 1974) (reversing a district court’s refusal to grant a permanent injunction and remanding for the district court to enter an order enjoining the enforcement of a discriminatory ordinance)).
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pleader is entitled to relief.’” Aktieselskabet, 525 F.3d at 16 (quoting Fed. R. Civ. P. 8(a)(2)). As the Supreme Court recently explained, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570). This “plausibility” standard is not a “probability requirement,” and instead merely requires a plaintiff to allege facts that allow the court to “draw the reasonable inference that the defendant is liable for the misconduct alleged” or, in other words, that there is “more than a sheer possibility that a defendant has acted unlawfully.” Id. (citing Twombly, 550 U.S. at 556-57).
Plaintiffs’ Complaint alleges more than enough facts to create a reasonable inference that HUD’s approval of the Road Home grant formula (and other actions) have caused a disparate impact on African American homeowners in New Orleans in violation of §§ 3604(a) and 3605(a). The Complaint offers an explicit, clear, and logical explanation of how the Road Home formula has caused a disproportionate impact on African Americans in receiving grants to rebuild, repair and return to their homes. In particular, plaintiffs allege that:
• U.S. Census data show that African Americans are more likely than whites to own homes with lower property values, including comparable homes, and are more likely to receive grants under the Road Home program based on the pre-storm value of their homes. See Compl. ¶¶ 3-4, 53-55;
• Nearly 80% of homes owned by African Americans in New Orleans were valued at less than $100,000, compared to only about 33% homes owned by whites. Compl. ¶ 54.
• The Road Home formula disadvantages African American homeowners whose home property values are lower (when the cost of repair exceeds the pre-storm value), because the formula awards grants based on the lower of the pre-storm value of the home or the cost of damage to the home. Compl. ¶¶ 3-4, 45-53, 55.
• Because of the formula, African American homeowners are more likely than white homeowners to have a gap between the cost of rebuilding and their rebuilding resources (including grants), and the average gap for African American applicants is far larger than the average gap for white applicants. Compl. ¶¶ 56-57.
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These factual allegations, which the “court must accept as true,” create far more than a
“reasonable inference” or a “sheer possibility” that HUD’s formula has disproportionately impacted African Americans. Iqbal, 129 S. Ct. at 1949.27 Accepting as true Plaintiffs’ factual
allegations that African Americans own homes with lower property values than whites (including
when their homes are comparable); that the Road Home formula provides smaller awards to
homeowners whose property values are lower (when the cost of repair is higher than the pre-
storm value); and that this formula causes African Americans to have more frequent and larger
shortfalls in funding needed to rebuild their homes than whites, the most logical conclusion—not
only a reasonable conclusion—is that the formula has caused a disparate impact on African
Americans, as Plaintiffs explicitly allege. See Compl. ¶¶ 3-4, 52-59. Thus, Plaintiffs have
alleged facts that far surpass those necessary to satisfy Rule 8(a)’s pleading requirements.
Moreover, contrary to HUD’s contention that Plaintiffs “fail to allege that African American
homeowners experience a disparate impact in the amount they allegedly received under the Road
Home grant award as compared to white homeowners,” HUD Br. 42, these facts clearly allege
that the formula caused African American homeowners to receive smaller grant awards than
white homeowners under the Road Home program, causing more frequent and larger gaps in the cost to rebuild. See Compl. ¶¶ 3-4, 52-58.28
27 The Court’s discussion in Iqbal about what factual allegations a plaintiff must make in order to sufficiently plead a Bivens claim of intentional discrimination under the Fifth Amendment, Iqbal, 129 S. Ct. at 1948-49, 1951-52, is obviously inapplicable to Plaintiffs’ disparate impact claim under Title VIII. Plaintiffs need not allege or ultimately prove at trial that HUD acted with discriminatory intent or purpose. See 2922 Sherman Ave., 444 F.3d at 681.
28 Contrary to HUD’s unsupported assertion, Plaintiffs need not allege discrimination in the method of home appraisals or the Road Home policy that allows grantees to use their own appraisers. See HUD Br. 42-43. Plaintiffs can adequately plead their claim without making these two allegations, as detailed above. In any event, it is common knowledge that racial disparities in home values can occur without a biased appraiser or method of appraisal, because an appraisal compares a particular home to similar homes in the same area that have been sold at
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In addition, HUD contends that Plaintiffs have failed to state a claim for a violation of § 3605(a) of Title VIII because “Plaintiffs do not allege, nor could they allege, that HUD engaged in residential real estate transactions with anyone.” HUD Br. 43. HUD’s argument is misguided. The statute defines the term “residential real estate-related transaction” to include “[t]he making or purchasing of loans or providing other financial assistance . . . for purchasing, constructing, improving, repairing, or maintaining a dwelling.” 42 U.S.C. § 3605(b)(1)(A). Not surprisingly, HUD provides no authority for its apparent claim that HUD’s approval of the disbursement of federal funds to homeowners who seek to repair damage caused by Hurricanes Katrina and Rita does not constitute “providing . . . financial assistance” for “constructing, improving, repairing, or maintaining a dwelling.” Id. In fact, the case law requires a far less direct connection between the defendant’s financial assistance and the homeowner than HUD wishes to impose. See Nat’l Fair Hous. Alliance, 208 F. Supp. 2d at 58 (holding that property insurance is covered by § 3605 because “insurance provides the financial assistance necessary to maintain a dwelling”); United States v. Mass. Indus. Fin. Agency, 910 F. Supp. 21, 29 (D. Mass. 1996) (“Defendant’s argument that it does not provide ‘financial assistance’ because it does not provide funds directly to applicants is unconvincing.”).
Finally, HUD argues that Plaintiffs have failed to state a claim that HUD violated its affirmative obligations under § 3608(e)(5) of Title VIII and § 5304(b)(2) of the HCDA. See HUD Br. 44-45. This argument rests on the contention that § 3608(e)(5) and § 5304(b)(2) require only that HUD consider the effect of its decisions on fair housing. HUD Br. 44. But
a market rate, and market rates are influenced by racial discrimination in our broader society. Similarly meritless is HUD’s assertion that Plaintiffs must allege the Additional Compensation Grants create statistical disparities in the award of grants. HUD Br. 43. Plaintiffs allege that the Additional Compensation Grant “does not eliminate the discriminatory disparities in grant amounts” that are caused by the general grant formula. Compl. ¶ 59. No more is required.
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HUD’s affirmative obligation goes beyond mere consideration of the effect of its decisions on fair housing, and is instead an “affirmative duty to consider the impact of publicly assisted housing programs on racial concentration and to act affirmatively to promote the policy of fair, integrated housing.” Otero, 484 F.2d at 1134 (emphasis added); see also Darst-Webbe, 417 F.3d at 907; NAACP, 817 F.2d at 155 (“HUD [must] use its grant programs to assist in ending discrimination and segregation, to the point where the supply of genuinely open housing increases.”); Lee, 698 F. Supp. at 342. Plaintiffs’ Complaint adequately alleges that HUD participated in the development and administration of a grant formula that disproportionately prevents African American families from being able to rebuild their homes and remain in their communities. Compl. ¶¶ 3-4, 45-56. These facts are sufficient to state a claim that HUD failed to act affirmatively to promote open housing in New Orleans.
2. Rainwater’s motion to dismiss must be denied because Plaintiffs have alleged sufficient facts to state a Title VIII disparate impact claim.
Rainwater also contends that Plaintiffs’ Title VIII claims must be dismissed under Rule 12(b)(6) for failure to state a claim. Rainwater first argues that Plaintiffs have not alleged a violation of § 3605(a) because Rainwater has not engaged in any residential real estate-related transactions. Rainwater Br. 31. This argument must be rejected for the same reasons discussed supra Part II.C.1. The statute specifically defines real estate-related transactions to include financial assistance “for improving, repairing, or maintaining a dwelling.” 42 U.S.C. § 3605(b)(1)(A). The Complaint plainly alleges that the Road Home program provides financial assistance for home improvement and repair, and that Rainwater’s design and implementation of that program has a disparate impact on African Americans. Compl. ¶¶ 43-60.
Rainwater also argues that Plaintiffs’ Title VIII claims must be dismissed because Plaintiffs “have not and cannot allege that African American and white homeowners with
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substantially similar home values were treated differently” due to the application of the Road Home formula.29 Rainwater Br. 32-33. This argument fundamentally misunderstands the appropriate legal standard.
In order to allege a disparate impact violation under Title VIII, a plaintiff need only allege facts sufficient to demonstrate that a facially-neutral policy has a significant adverse impact on members of a protected group. See NCRC, 573 F. Supp. 2d at 79. Plaintiffs therefore need only allege facts to show that application of the Road Home formula has had a discriminatory effect on African American homeowners—Plaintiffs do not need to allege that a similarly-situated group was treated differently under the Road Home program. See id. (expressly rejecting the defendant’s argument in a Title VIII disparate impact claim that the plaintiff failed to allege the existence of a similarly-situated class); see also Charleston Hous. Auth. v. USDA, 419 F.3d 729, 741 (8th Cir. 2005) (rejecting housing authority’s argument that the plaintiffs’ disparate impact claims fail because they did not demonstrate that similarlysituated individuals were treated differently, and noting that plaintiffs “need prove no more than that the conduct of the defendant actually or predictably results in discrimination”).
Rainwater asserts that 2922 Sherman Avenue is to the contrary, see Rainwater Br. 32, but that case specifically declined to consider the defendant’s argument that plaintiffs needed to provide evidence of a relevant comparison group. See 2922 Sherman Ave., 444 F.3d at 681.30 But Rainwater makes an even more fundamental error. According to Rainwater, Plaintiffs must
29 While HUD appears to make a version of this argument in its Preliminary Statement, see HUD Br. 3, HUD never makes this point in its Argument. See HUD Br. 42. In any event, as discussed in this section, this argument is meritless.
30 The court in 2922 Sherman Avenue did vacate a jury verdict in favor of the plaintiffs on their disparate impact claim, but that reversal was based on the plaintiffs’ failure, at trial, to prove statistically significant disparities that adversely affected Hispanics. 2922 Sherman Ave., 444 F.3d at 681. Of course, as discussed above, this case is not yet at the stage of determining the sufficiency of evidence presented at trial. See supra Part II.C.1.
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find white and African American homeowners with “substantially the same property value” and demonstrate that the white homeowners were treated more favorably. Rainwater Br. 33. But the use of property value in the Road Home formula is the very practice alleged to be discriminatory, so it would be nonsensical to compare homeowners on whom the practice has no differentiating effect. As the D.C. Circuit put it in the very case Rainwater cites, “[i]f we were to require that the very factor that causes disparate impact be included in the comparison . . . , we would effectively define disparate impact analysis out of existence.” Anderson v. Zubieta, 180 F.3d 329, 342 (D.C. Cir. 1999), cited in Rainwater Br. 32.
Because, as noted supra Part II.C.1, Plaintiffs have adequately alleged that the Road Home program has a disproportionate adverse effect on African American homeowners, Rainwater’s argument must be rejected. Compl. ¶¶ 3-4, 45-60, 74-76; see NCRC, 573 F. Supp. 2d at 79.
D. The individual Plaintiffs did not waive their right to sue. Rainwater finally contends in a footnote that by signing a Grant Agreement and accepting grant awards, the individual Plaintiffs are required to raise any disputes through a state-level administrative appeals process. See Rainwater Br. 24 n.6. But that administrative review process is expressly limited to reviewing homeowner challenges to grant awards and eligibility. See The Road Home, Appeals and Second Disbursements 1 (Ex. H) (“You have the right to appeal . . . [the] award decision. You can appeal: Eligibility decisions; amount of benefit compensation . . .; [d]enial of Additional Compensation Grant.”); The Road Home, Filing an Appeal 1 (Ex. I) (“If you believe the program’s determination of your funding award calculation or your eligibility status is incorrect . . . you can file a formal appeal . . . .”). Plaintiffs do not argue that their grant was incorrectly calculated or that they were improperly found to be ineligible. Plaintiffs argue instead that the program, as designed and operated, had the illegal
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effect of discriminating against them because they are African American. Compl. ¶¶ 3-4, 45-60. This is a challenge that the appeals process expressly disclaims any authority to resolve: “The Appeals Office will not change policies or laws set forth by the State of Louisiana or the federal government.” The Road Home, Filing an Appeal 1 (Ex. I). Rainwater cannot plausibly contend that Plaintiffs’ only remedy for racial discrimination is through an administrative review process that claims no ability to redress or even consider those claims.
Even if the Grant Agreement were read to waive the individual Plaintiffs’ right to sue, that waiver would be invalid under the appropriations statutes that created the CDBG Disaster Recovery Grant program (and that funded the Road Home program). Those Acts provide that the use of disaster recovery funds is subject to the requirements that govern the regular CDBG program, and that HUD can waive “any provision of any statute or regulation that the Secretary administers . . . except for requirements related to fair housing, nondiscrimination, labor standards, and the environment.” 2005 Act, 119 Stat. at 2780 (emphasis added); see also 2006 Act, 120 Stat. at 472-73 (same). A requirement that purported to force Plaintiffs to raise fair housing and nondiscrimination claims exclusively in a state administrative proceeding so illsuited for that purpose would violate this term of the federal appropriations acts and, thus, would be unenforceable.
Each of the individual Plaintiffs is therefore properly before this Court, because the Grant Agreement does not waive the right to sue for Rainwater’s violation of Title VIII and the HCDA, and because reading the Grant Agreement to constitute such a waiver would violate the federal statutes establishing the CDBG Disaster Recovery Grant program.
* * *
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Plaintiffs’ claims that HUD and Rainwater violated Title VIII and the HCDA are enforceable against both Defendants and reviewable by this Court, and Plaintiffs have alleged sufficient facts to state a claim. The motions to dismiss for failure to state a claim under Rule 12(b)(6) should be denied. III. Rainwater’s motion to transfer should be denied because Rainwater has failed to
carry his heavy burden of establishing that this Court should disturb Plaintiffs’ choice of forum. Pursuant to 28 U.S.C. § 1404(a), this Court may transfer this action out of the District of Columbia only if Rainwater establishes that plaintiffs initially could have brought this action in the Middle District of Louisiana, and considerations of convenience and the interests of justice weigh in favor of transfer to that district. See Shenandoah Assocs. Ltd. P’ship v. Tirana, 182 F. Supp. 2d 14, 25 (D.D.C. 2001). A court should not transfer a case from a plaintiff’s chosen forum “simply because another forum, in the court’s view, may be superior to that chosen by the plaintiff.” Pain v. United Tech. Corp., 637 F.2d 775, 783 (D.C. Cir. 1980). Instead, courts should weigh a number of case-specific factors, including the private interests of the parties and witnesses, and public interests such as efficiency and fairness. Wilderness Soc’y v. Babbitt, 104 F. Supp. 2d 10, 12 (D.D.C. 2000). Although Plaintiffs agree that this action could have been filed in the Middle District of Louisiana or the Eastern District of Louisiana, see 28 U.S.C. § 1391(e), Rainwater has failed to meet his heavy burden of demonstrating that the balance of interests favors transfer. Pain, 637 F.2d at 784. Accordingly, Plaintiffs’ choice of forum should not be disturbed. A. Rainwater has not demonstrated that the private interests of the parties and
witnesses weigh in favor of transferring this case. District courts weigh a number of private-interest factors in determining whether transfer is warranted, including the plaintiffs’ choice of forum, the defendants’ choice of forum, the
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forum in which the claim arose, the convenience of the parties and witnesses, and the ease of access to sources of proof. See Wilderness Soc’y, 104 F. Supp. 2d at 12; Trout Unlimited v. USDA, 944 F. Supp. 13, 16 (D.D.C. 1996)).
The first of these factors—the plaintiffs’ choice of forum—is often dispositive. It is well established that a plaintiff’s choice of forum “should be afforded substantial deference unless that forum has no substantial connection with the parties or subject matter at issue.” Initiative & Referendum Inst. v. U.S. Postal Serv., 154 F. Supp. 2d 10, 14 (D.D.C. 2001); see also Wilderness Soc’y, 104 F. Supp. 2d at 12-13 (collecting cases). Rainwater argues that Plaintiffs’ choice of forum “deserves little deference” because “none of the named Plaintiffs reside in the District of Columbia.” Rainwater Br. 42. This assertion is false. Plaintiff National Fair Housing Alliance (“NFHA”) has its principal place of business in the District of Columbia, and is thus a resident of the District of Columbia. Compl. ¶ 12. This Court has held that even when only one plaintiff is a resident of the chosen forum, the court should afford substantial deference to the plaintiffs’ choice of forum. See Sierra Club v. Van Antwerp, 523 F. Supp. 2d 5, 11 (D.D.C. 2007).
Rainwater further contends that Plaintiffs’ choice of forum should be given little deference, because “most, if not all, of the relevant events concerning Plaintiffs’ Road Home grant applications” took place in Louisiana. Rainwater Br. 42. This argument is also incorrect. Plaintiffs’ Complaint alleges relevant events that occurred in the District of Columbia, including HUD’s assisting LRA in designing the Road Home grant formula and HUD’s review, approval, and continuing oversight. Compl. ¶¶ 49-51; see also Kome Decl. ¶¶ 1, 13-24.
This Court’s decision in Greater Yellowstone Coalition v. Bosworth, 180 F. Supp. 2d 124 (D.D.C. 2001) is instructive. In Bosworth, several environmental groups alleged that the United States Forest Service failed to comply with certain federal statutes when it renewed a cattle-
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grazing permit for forest land in Montana without assessing the environmental impact of the renewal. Id. at 126. The defendants moved to transfer the action to the District of Montana on the ground that the decision to issue the permit and the effects of such a decision are inherently related to Montana, not the District of Columbia. Id. at 128. This Court denied the defendants’ motion, concluding that because federal government officials in the District of Columbia were involved in the decision to reissue the permit and two of the five plaintiffs had offices in the District of Columbia, the action had a sufficient nexus to this forum. Id. at 128-29. The Court distinguished other cases involving federal agencies that had been transferred out of the District of Columbia, noting that in those cases, “none of the plaintiffs resided in the District of Columbia and none of the decisionmaking occurred in the District of Columbia.” Id. at 129 (discussing Trout Unlimited and Hawksbill Sea Turtle v. FEMA, 939 F. Supp. 1 (D.D.C. 1996)).
Rainwater’s reliance on Al-Ahmed v. Chertoff, 564 F. Supp. 2d 16 (D.D.C. 2008), is misplaced. See Rainwater Br. 39. Al-Ahmed granted the defendants’ motion to transfer because the plaintiff was a Virginia resident, all of the administrative decisions at issue were made in Virginia, and the “only real connection [the] lawsuit has to the District of Columbia is that a federal agency headquartered here is charged with generally regulating and overseeing the [administrative] process . . . .” Al-Ahmed, 564 F. Supp. 2d at 19 (citations omitted). Plaintiffs here have alleged not that HUD is generally charged with regulating the administrative process, but rather that HUD officials in the District of Columbia made specific decisions in the design and approval of the Road Home program that have resulted in a discriminatory disparate impact.
Despite Rainwater’s contention to the contrary, the fact that this litigation also has a connection to Louisiana does not compel a transfer to the Middle District of Louisiana. Cf. Ingram v. Eli Lilly & Co., 251 F. Supp. 2d 1, 7 (D.D.C. 2003) (holding that although litigation
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“admittedly has a greater connection to Washington [state],” plaintiff’s choice of the District of Columbia as its forum should not be disturbed).
None of the other private interest factors weighs in favor of transferring this case to the Middle District of Louisiana. Although Rainwater asserts that such a transfer will be “more convenient” for the parties, Rainwater Br. 42, Plaintiff NFHA and Defendant HUD are in the District of Columbia, and many of the relevant documents and witnesses are therefore located in this forum. While some of the plaintiffs do reside in Louisiana, this Court should defer to their judgment regarding where to file their lawsuit. See Wilderness Soc’y, 104 F. Supp. 2d at 15 (noting that although some of the plaintiffs were located in Alaska, they “presumably do not consider the District of Columbia to be an inconvenient forum or else they would not have sued here”). And although Rainwater is located in Baton Rouge, he has failed to proffer any evidence to demonstrate that it would be an undue hardship for him to litigate this case in the District of Columbia. See Robinson v. Eli Lilly & Co., 535 F. Supp. 2d 49, 52 (D.D.C. 2008) (denying transfer motion where the defendant “neither articulated nor demonstrated hardship for it as a corporate party to have to travel to this district for these proceedings”). Nor has Rainwater shown that “any lay or expert witnesses will refuse to appear in this district for trial or cannot have their testimony preserved by videotaped deposition.” Id. Moreover, although Rainwater vaguely asserts that “documents and materials concerning Plaintiffs’ Road Home grant applications are located in Baton Rouge,” it is uncontested that—in light of Plaintiffs’ claims against HUD—other documents relevant to this litigation are located in the District of Columbia.
B. Rainwater has not demonstrated that public interests weigh in favor of transferring this case.
Transfer is also unwarranted in light of the public interests at issue in this action. District courts review a number of public-interest factors in considering a motion to transfer, including
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the transferee court’s familiarity with the governing laws, the relative congestion of the transferor and transferee courts’ calendars, and any local interests in deciding local controversies. Trout Unlimited, 944 F. Supp. at 16. Rainwater has failed to demonstrate that any of these interests weigh in favor of transferring this action to the Middle District of Louisiana.
First, Rainwater’s contention that the Middle District of Louisiana is “equally familiar with the federal laws governing Plaintiffs’ claims” is of no moment. Rainwater Br. 43. The applicable standard is not whether the transferee court is “equally familiar” with the governing laws, but whether the transferee court has some sort of expertise that the transferor court does not, such that there is an advantage to having the transferee court resolve the dispute. See Wilderness Soc’y, 104 F. Supp. 2d at 16; Trout Unlimited, 944 F. Supp. at 19. Here, none of Plaintiffs’ claims involves an issue of Louisiana state law, and there is thus “no advantage to having a federal court ‘thoroughly familiar and experienced’ in the state law of [Louisiana] adjudicate this suit.” Wilderness Soc’y, 104 F. Supp. 2d at 16 (quoting Trout Unlimited, 944 F. Supp. at 19). It is axiomatic that the Middle District of Louisiana is no better suited than this Court to resolve Plaintiffs’ federal statutory claims. See Miller v. Insulation Contractors, No. 08-1556, 2009 WL 1066263, at *3 (D.D.C. Apr. 21, 2009) (“[A]ll federal courts are presumed to be equally familiar with the law governing federal statutory claims.”).
Second, Rainwater’s assertion that there is “no evidence that Plaintiffs’ case would proceed more quickly in the District of Columbia,” Rainwater Br. 43, improperly shifts the burden of proof to Plaintiffs to demonstrate that the District of Columbia is the most appropriate forum. This simply is not the law. It is Rainwater’s burden to demonstrate that public interests, such as the relative congestion of the courts, favor transferring the case. See SEC v. Savoy
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Indus., Inc., 587 F.2d 1149, 1154 (D.C. Cir. 1978). Rainwater has not established that this Court’s docket is significantly heavier than the docket in the Middle District of Louisiana.
Finally, Rainwater contends that the Middle District of Louisiana has a stronger local interest in resolving this case because the litigation involves “Louisiana properties” and “Louisiana residents.” Rainwater Br. 43-44. But, as noted, this litigation also has significant ties to the District of Columbia. In addition, all of Plaintiffs’ claims are based on violations of federal law, and this Court has held that where one issue in the suit is “whether federal agencies complied with federal law,” the case cannot have a “purely local impact” in another forum. Sierra Club, 523 F. Supp. 2d at 13. This is especially true because both Title VIII and the HCDA reflect national policies. See id.; see also 42 U.S.C. § 3601 (“It is the policy of the United States to provide, within constitutional limitations, for fair housing throughout the United States.”); 42 U.S.C. § 5301(b) (“The Congress . . . finds and declares that the future welfare of the Nation and the well-being of its citizens depend on the establishment and maintenance of viable urban communities as social, economic, and political entities . . . .”).
Because Rainwater has failed to demonstrate that the balance of private and public interests favors a transfer of this action to the Middle District of Louisiana, the motion to transfer should be denied.
CONCLUSION For the reasons stated herein, the Court should deny HUD’s motion to dismiss (Dkt. 22), Rainwater’s motion to dismiss (Dkt. 28), and Rainwater’s motion to transfer (Dkt. 28).
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Dated: June 5, 2009.

Respectfully submitted,

/s/ John Payton John Payton, Director-Counsel (D.C. Bar No. 282699) Matthew Colangelo Damon T. Hewitt ReNika C. Moore Danielle Y. Conley NAACP LEGAL DEFENSE & EDUCATIONAL FUND, INC. 99 Hudson Street, 16th Floor New York, NY 10013 (p) 212-965-2200 / (fax) 212-226-7592 jpayton@naacpldf.org

/s/ Joseph M. Sellers Joseph M. Sellers (D.C. Bar No. 318410) Jenny R. Yang (D.C. Bar No. 484874) Llezlie Green Coleman (D.C. Bar No. 484051) Daniel Tenny (D.C. Bar No. 981312) COHEN MILSTEIN SELLERS & TOLL PLLC 1100 New York Avenue, NW, Suite 500 Washington, D.C. 20005 (p) 202-408-4600 / (fax) 202-408-4699 jsellers@cohenmilstein.com
Attorneys for Plaintiffs

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, et al.,
Plaintiffs,
v.
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, et al.,
Defendants.

Civil Action No. 1:08-cv-01938 (HHK)

PROPOSED ORDER Upon consideration of Defendant U.S. Department of Housing and Urban Development’s Motion to Dismiss, Docket No. 22, Defendant Paul Rainwater’s Motion to Dismiss and Motion to Transfer, Docket No. 28, Plaintiffs’ Memorandum in Opposition, the Defendants’ replies, and the entire record herein, it is, this ____ day of ______________, hereby ORDERED that Defendants’ Motions Are DENIED.
_________________________________ Henry H. Kennedy United States District Judge

Case 1:08-cv-01938-HHK Document 34-2 Filed 06/05/09 Page 1 of 1
PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTIONS TO DISMISS AND MOTION TO TRANSFER
LIST OF EXHIBITS
Exhibit A. Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006, Pub. L. No. 109-148, 119 Stat. 2680 (Dec. 30, 2005) (“2005 Act”).
Exhibit B. Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006, Pub. L. No. 109-234, 120 Stat. 418 (June 15, 2006) (“2006 Act”).
Exhibit C. Department of Defense Appropriations Act, 2008, Pub. L. No. 110-116, 121 Stat. 1295 (Nov. 13, 2007) (“2007 Act”).
Exhibit D. Allocations and Common Application and Reporting Waivers Granted to and Alternative Requirements for CDBG Disaster Recovery Grantees Under the Department of Defense Appropriations Act, 2006, 71 Fed. Reg. 7666 (Feb. 13, 2006).
Exhibit E. Allocations and Waivers Granted to and Alternative Requirements for CDBG Disaster Recovery Grantees Under Chapter 9 of Title II of the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006, 71 Fed. Reg. 63,337 (Oct. 30, 2006).
Exhibit F. Allocations and Requirements for the Supplemental Grant to the State of Louisiana Under Division B of the Department of Defense Appropriations Act, 2008, 72 Fed. Reg. 70,472 (Dec. 11, 2007).
Exhibit G. Reconsideration of Waivers Granted to and Alternative Requirements for Community Development Block Grant Disaster Recovery Grantees Under Public Laws 109–148 and 109–234,73 Fed. Reg. 46,312 (Aug. 8, 2008).
Exhibit H. The Road Home, Appeals and Second Disbursements.
Exhibit I. The Road Home, Filing an Appeal.

Case 1:08-cv-01938-HHK Document 34-3 Filed 06/05/09 Page 1 of 6
Exhibit A
The 2005 Act Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006, Pub. L. No. 109-148, 119 Stat. 2680 (Dec. 30, 2005).

Case 1:08-cv-01938-HHK Document 34-3 Filed 06/05/09 Page 2 of 6 PUBLIC LAW 109–148—DEC. 30, 2005
DEPARTMENT OF DEFENSE, EMERGENCY SUPPLEMENTAL APPROPRIATIONS TO ADDRESS HURRICANES IN THE GULF OF MEXICO, AND PANDEMIC INFLUENZA ACT, 2006
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Case 1:08-cv-01938-HHK Document 34-3 Filed 06/05/09 Page 3 of 6

119 STAT. 2680

PUBLIC LAW 109–148—DEC. 30, 2005

Public Law 109–148 109th Congress

An Act

Dec. 30, 2005
[H.R. 2863]
Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006. Department of Defense Appropriations Act, 2006.

Making appropriations for the Department of Defense for the fiscal year ending September 30, 2006, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
DIVISION A
DEPARTMENT OF DEFENSE APPROPRIATIONS ACT, 2006
That the following sums are appropriated, out of any money in the Treasury not otherwise appropriated, for the fiscal year ending September 30, 2006, for military functions administered by the Department of Defense and for other purposes, namely:
TITLE I

MILITARY PERSONNEL

MILITARY PERSONNEL, ARMY
For pay, allowances, individual clothing, subsistence, interest on deposits, gratuities, permanent change of station travel (including all expenses thereof for organizational movements), and expenses of temporary duty travel between permanent duty stations, for members of the Army on active duty, (except members of reserve components provided for elsewhere), cadets, and aviation cadets; for members of the Reserve Officers’ Training Corps; and for payments pursuant to section 156 of Public Law 97–377, as amended (42 U.S.C. 402 note), and to the Department of Defense Military Retirement Fund, $28,191,287,000.

MILITARY PERSONNEL, NAVY
For pay, allowances, individual clothing, subsistence, interest on deposits, gratuities, permanent change of station travel (including all expenses thereof for organizational movements), and expenses of temporary duty travel between permanent duty stations, for members of the Navy on active duty (except members of the Reserve provided for elsewhere), midshipmen, and aviation cadets; for members of the Reserve Officers’ Training Corps; and for payments pursuant to section 156 of Public Law 97–377, as amended (42 U.S.C. 402 note), and to the Department of Defense Military Retirement Fund, $22,788,101,000.

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PUBLIC LAW 109–148—DEC. 30, 2005

119 STAT. 2779

MARITIME ADMINISTRATION

OPERATIONS AND TRAINING

For an additional amount for ‘‘Operations and training’’, $7,500,000, to remain available until September 30, 2007, for necessary expenses related to the consequences of hurricanes in the Gulf of Mexico during calendar year 2005: Provided, That the amount provided under this heading is designated as an emergency requirement pursuant to section 402 of H. Con. Res. 95 (109th Congress), the concurrent resolution on the budget for fiscal year 2006.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

PUBLIC AND INDIAN HOUSING TENANT-BASED RENTAL ASSISTANCE

For an additional amount for housing vouchers for households within the area declared a major disaster under the Robert T. Stafford Disaster Relief and Emergency Act (42 U.S.C. 5121 et seq.) resulting from hurricanes in the Gulf of Mexico during calendar year 2005, $390,299,500, to remain available until September 30, 2007: Provided, That such households shall be limited to those which, prior to Hurricanes Katrina or Rita, received assistance under section 8 or 9 of the United States Housing Act of 1937 (Public Law 93–383), section 801 or 811 of the Cranston-Gonzalez National Affordable Housing Act (Public Law 101–625), the AIDS Housing Opportunity Act (Public Law 101–625), or the Stewart B. McKinney Homeless Assistance Act (Public Law 100–77); or those which were homeless or in emergency shelters in the declared disaster area prior to Hurricanes Katrina or Rita: Provided further, That these funds are available for assistance, under section 8(o) of the United States Housing Act of 1937: Provided further, That in administering assistance under this heading the Secretary of Housing and Urban Development may waive requirements for income eligibility and tenant contribution under section 8 of such Act for up to 18 months: Provided further, That all households receiving housing vouchers under this heading shall be eligible to reoccupy their previous assisted housing, if and when it becomes available: Provided further, That the amount provided under this heading is designated as an emergency requirement pursuant to section 402 of H. Con. Res. 95 (109th Congress), the concurrent resolution on the budget for fiscal year 2006.

Vouchers.

COMMUNITY PLANNING AND DEVELOPMENT

COMMUNITY DEVELOPMENT FUND

For an additional amount for the ‘‘Community development fund’’, for necessary expenses related to disaster relief, long-term recovery, and restoration of infrastructure in the most impacted and distressed areas related to the consequences of hurricanes in the Gulf of Mexico in 2005 in States for which the President declared a major disaster under title IV of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.) in conjunction with Hurricane Katrina, Rita, or Wilma, $11,500,000,000, to remain available until expended, for activities

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119 STAT. 2780

PUBLIC LAW 109–148—DEC. 30, 2005

Federal Register, publication. Deadline.
Reports. Notification.

authorized under title I of the Housing and Community Development Act of 1974 (Public Law 93–383): Provided, That no State shall receive more than 54 percent of the amount provided under this heading: Provided further, That funds provided under this heading shall be administered through an entity or entities designated by the Governor of each State: Provided further, That such funds may not be used for activities reimbursable by or for which funds are made available by the Federal Emergency Management Agency or the Army Corps of Engineers: Provided further, That funds allocated under this heading shall not adversely affect the amount of any formula assistance received by a State under this heading: Provided further, That each State may use up to five percent of its allocation for administrative costs: Provided further, That Louisiana and Mississippi may each use up to $20,000,000 (with up to $400,000 each for technical assistance) from funds made available under this heading for LISC and the Enterprise Foundation for activities authorized by section 4 of the HUD Demonstration Act of 1993 (42 U.S.C. 9816 note), as in effect immediately before June 12, 1997, and for activities authorized under section 11 of the Housing Opportunity Program Extension Act of 1996, including demolition, site clearance and remediation, and program administration: Provided further, That in administering the funds under this heading, the Secretary of Housing and Urban Development shall waive, or specify alternative requirements for, any provision of any statute or regulation that the Secretary administers in connection with the obligation by the Secretary or the use by the recipient of these funds or guarantees (except for requirements related to fair housing, nondiscrimination, labor standards, and the environment), upon a request by the State that such waiver is required to facilitate the use of such funds or guarantees, and a finding by the Secretary that such waiver would not be inconsistent with the overall purpose of the statute, as modified: Provided further, That the Secretary may waive the requirement that activities benefit persons of low and moderate income, except that at least 50 percent of the funds made available under this heading must benefit primarily persons of low and moderate income unless the Secretary otherwise makes a finding of compelling need: Provided further, That the Secretary shall publish in the Federal Register any waiver of any statute or regulation that the Secretary administers pursuant to title I of the Housing and Community Development Act of 1974 no later than 5 days before the effective date of such waiver: Provided further, That every waiver made by the Secretary must be reconsidered according to the three previous provisos on the two-year anniversary of the day the Secretary published the waiver in the Federal Register: Provided further, That prior to the obligation of funds each State shall submit a plan to the Secretary detailing the proposed use of all funds, including criteria for eligibility and how the use of these funds will address long-term recovery and restoration of infrastructure: Provided further, That each State will report quarterly to the Committees on Appropriations on all awards and uses of funds made available under this heading, including specifically identifying all awards of sole-source contracts and the rationale for making the award on a sole-source basis: Provided further, That the Secretary shall notify the Committees on Appropriations on any proposed allocation of any funds and any related waivers made pursuant to these provisions under this

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PUBLIC LAW 109–148—DEC. 30, 2005

119 STAT. 2781

heading no later than 5 days before such waiver is made: Provided further, That the Secretary shall establish procedures to prevent recipients from receiving any duplication of benefits and report quarterly to the Committees on Appropriations with regard to all steps taken to prevent fraud and abuse of funds made available under this heading including duplication of benefits: Provided further, That the amounts provided under this heading are designated as an emergency requirement pursuant to section 402 of H. Con. Res. 95 (109th Congress), the concurrent resolution on the budget for fiscal year 2006.

Reports.

ADMINISTRATIVE PROVISIONS

SEC. 901. Notwithstanding provisions of the United States Housing Act of 1937 (Public Law 93–383), in order to assist public housing agencies located within the most heavily impacted areas of Louisiana and Mississippi that are subject to a declaration by the President of a major disaster under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.) in connection with Hurricane Katrina or Rita, the Secretary for calendar year 2006 may authorize a public housing agency to combine assistance provided under sections 9(d) and (e) of the United States Housing Act of 1937 and assistance provided under section 8(o) of such Act, for the purpose of facilitating the prompt, flexible and efficient use of funds provided under these sections of the Act to assist families who were receiving housing assistance under the Act immediately prior to Hurricane Katrina or Rita and were displaced from their housing by the hurricanes.
SEC. 902. To the extent feasible the Secretary of Housing and Urban Development shall preserve all housing within the area declared a major disaster under the Robert T. Stafford Disaster Relief and Emergency Act (42 U.S.C. 5121 et seq.) resulting from Hurricane Katrina or Rita that received project-based assistance under section 8 or 9 of the United States Housing Act of 1937, section 801 or 811 of the Cranston-Gonzalez National Affordable Housing Act, the AIDS Housing Opportunity Act, or the Stewart B. McKinney Homeless Assistance Act: Provided, That the Secretary shall report to the Committees on Appropriations on the status of all such housing, including costs associated with any repair or rehabilitation, within 120 days of enactment of this Act.

Reports. Deadline.

THE JUDICIARY

COURTS OF APPEALS, DISTRICT COURTS, AND OTHER JUDICIAL SERVICES

SALARIES AND EXPENSES
For an additional amount for ‘‘Salaries and expenses, Courts of Appeals, District Courts, and Other Judicial Services’’, $18,000,000, to remain available until expended, for necessary expenses related to the consequences of hurricanes in the Gulf of Mexico during calendar year 2005: Provided, That notwithstanding any other provision of law such sums shall be available for transfer to accounts within the Judiciary subject to approval of the Judiciary operating plan: Provided further, That the amount

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Case 1:08-cv-01938-HHK Document 34-4 Filed 06/05/09 Page 1 of 5
Exhibit B
The 2006 Act Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006, Pub. L. No. 109-234, 120 Stat. 418 (June 15, 2006).

Case 1:08-cv-01938-HHK Document 34-4 Filed 06/05/09 Page 2 of 5 PUBLIC LAW 109–234—JUNE 15, 2006
EMERGENCY SUPPLEMENTAL APPROPRIATIONS ACT FOR DEFENSE, THE GLOBAL WAR ON TERROR, AND HURRICANE
RECOVERY, 2006
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120 STAT. 418

PUBLIC LAW 109–234—JUNE 15, 2006

June 15, 2006
[H.R. 4939]
Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006.

Public Law 109–234 109th Congress

An Act

Making emergency supplemental appropriations for the fiscal year ending September 30, 2006, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the following sums are appropriated, out of any money in the Treasury not otherwise appropriated, for the fiscal year ending September 30, 2006, and for other purposes, namely:

TITLE I

GLOBAL WAR ON TERROR SUPPLEMENTAL APPROPRIATIONS

CHAPTER 1

DEPARTMENT OF AGRICULTURE

FOREIGN AGRICULTURAL SERVICE
PUBLIC LAW 480 TITLE II GRANTS
For an additional amount for ‘‘Public Law 480 Title II Grants’’, during the current fiscal year, not otherwise recoverable, and unrecovered prior years’ costs, including interest thereon, under the Agricultural Trade Development and Assistance Act of 1954, for commodities supplied in connection with dispositions abroad under title II of said Act, $350,000,000, to remain available until expended: Provided, That from this amount, to the maximum extent possible, funding shall be used to support the previously approved fiscal year 2006 programs under section 204(a)(2) of the Agricultural Trade Development and Assistance Act of 1954: Provided further, That the amount provided under this heading is designated as an emergency requirement pursuant to section 402 of H. Con. Res. 95 (109th Congress), the concurrent resolution on the budget for fiscal year 2006.

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120 STAT. 472

PUBLIC LAW 109–234—JUNE 15, 2006

and the 2004–2005 winter storms in the State of California: Provided further, That any amounts in excess of those necessary for emergency expenses relating to the eligible projects cited in the first sentence of this paragraph may be used for other projects authorized under 23 U.S.C. 125: Provided further, That the amounts provided under this heading are designated as an emergency requirement pursuant to section 402 of H. Con. Res. 95 (109th Congress), the concurrent resolution on the budget for fiscal year 2006.
(HIGHWAY TRUST FUND)
(RESCISSION)
Of the unobligated balances of funds apportioned to each State under chapter 1 of title 23, United States Code, $702,362,500 are rescinded: Provided, That such rescission shall not apply to the funds distributed in accordance with 23 U.S.C. 130(f), 23 U.S.C. 133(d)(1) as in effect prior to the date of enactment of Public Law 109–59, the first sentence of 23 U.S.C. 133(d)(3)(A), 23 U.S.C. 104(b)(5), or 23 U.S.C. 163 as in effect prior to the enactment of Public Law 109–59.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
COMMUNITY PLANNING AND DEVELOPMENT
COMMUNITY DEVELOPMENT FUND
(INCLUDING TRANSFER OF FUNDS)
For an additional amount for the ‘‘Community development fund’’, for necessary expenses related to disaster relief, long-term recovery, and restoration of infrastructure in the most impacted and distressed areas related to the consequences of Hurricanes Katrina, Rita, or Wilma in States for which the President declared a major disaster under title IV of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.), $5,200,000,000, to remain available until expended, for activities authorized under title I of the Housing and Community Development Act of 1974 (Public Law 93–383): Provided, That funds provided under this heading shall be administered through an entity or entities designated by the Governor of each State: Provided further, That such funds may not be used for activities reimbursable by or for which funds are made available by the Federal Emergency Management Agency or the Army Corps of Engineers: Provided further, That funds allocated under this heading shall not adversely affect the amount of any formula assistance received by a State under this heading: Provided further, That each State may use up to five percent of its allocation for administrative costs: Provided further, That not less than $1,000,000,000 from funds made available on a pro-rata basis according to the allocation made to each State under this heading shall be used for repair, rehabilitation, and reconstruction (including demolition, site clearance and remediation) of the affordable rental housing stock (including public and other HUD-assisted housing) in the impacted areas: Provided further, That no State shall receive more than $4,200,000,000: Provided further, That in administering the funds under this heading, the Secretary of Housing and Urban Development may waive, or specify

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PUBLIC LAW 109–234—JUNE 15, 2006

120 STAT. 473

alternative requirements for, any provision of any statute or regulation that the Secretary administers in connection with the obligation by the Secretary or the use by the recipient of these funds or guarantees (except for requirements related to fair housing, nondiscrimination, labor standards, and the environment), upon a request by the State that such waiver is required to facilitate the use of such funds or guarantees, and a finding by the Secretary that such waiver would not be inconsistent with the overall purpose of the statute: Provided further, That the Secretary may waive the requirement that activities benefit persons of low and moderate income, except that at least 50 percent of the funds made available under this heading must benefit primarily persons of low and moderate income unless the Secretary otherwise makes a finding of compelling need: Provided further, That the Secretary shall publish in the Federal Register any waiver of any statute or regulation that the Secretary administers pursuant to title I of the Housing and Community Development Act of 1974 no later than 5 days before the effective date of such waiver: Provided further, That every waiver made by the Secretary must be reconsidered according to the three previous provisos on the two-year anniversary of the day the Secretary published the waiver in the Federal Register: Provided further, That prior to the obligation of funds each State shall submit a plan to the Secretary detailing the proposed use of all funds, including criteria for eligibility and how the use of these funds will address long-term recovery and restoration of infrastructure: Provided further, That prior to the obligation of funds to each State, the Secretary shall ensure that such plan gives priority to infrastructure development and rehabilitation and the rehabilitation and reconstruction of the affordable rental housing stock including public and other HUD-assisted housing: Provided further, That each State will report quarterly to the Committees on Appropriations on all awards and uses of funds made available under this heading, including specifically identifying all awards of sole-source contracts and the rationale for making the award on a sole-source basis: Provided further, That the Secretary shall notify the Committees on Appropriations on any proposed allocation of any funds and any related waivers made pursuant to these provisions under this heading no later than 5 days before such waiver is made: Provided further, That the Secretary shall establish procedures to prevent recipients from receiving any duplication of benefits and report quarterly to the Committees on Appropriations with regard to all steps taken to prevent fraud and abuse of funds made available under this heading including duplication of benefits: Provided further, That of the amounts made available under this heading, $12,000,000 shall be transferred to ‘‘Management and Administration, Salaries and Expenses’’, of which $7,000,000 is for the administrative costs, including IT costs, of the KDHAP/DVP voucher program; $9,000,000 shall be transferred to the Office of Inspector General; and $6,000,000 shall be transferred to HUD’s Working Capital Fund: Provided further, That none of the funds provided under this heading may be used by a State or locality as a matching requirement, share, or contribution for any other Federal program: Provided further, That the amounts provided under this heading are designated as an emergency requirement pursuant to section 402 of H. Con. Res. 95 (109th Congress), the concurrent resolution on the budget for fiscal year 2006.

Federal Register, publication. Deadline.
Reports. Contracts. Notification. Deadline. Procedures. Reports. Fraud.

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Case 1:08-cv-01938-HHK Document 34-5 Filed 06/05/09 Page 1 of 4
Exhibit C
The 2007 Act Department of Defense Appropriations Act, 2008, Pub. L. No. 110-116, 121 Stat. 1295 (Nov. 13, 2007).

Case 1:08-cv-01938-HHK Document 34-5 Filed 06/05/09 Page 2 of 4

PUBLIC LAW 110–116—NOV. 13, 2007

121 STAT. 1295

Public Law 110–116 110th Congress

An Act

Making appropriations for the Department of Defense for the fiscal year ending September 30, 2008, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Table of contents. Sec. 2. References.
DIVISION A—DEPARTMENT OF DEFENSE, 2008
Title I—Military Personnel Title II—Operation and Maintenance Title III—Procurement Title IV—Research, Development, Test and Evaluation Title V—Revolving and Management Funds Title VI—Other Department of Defense Programs Title VII—Related Agencies Title VIII—General Provisions
DIVISION B—FURTHER CONTINUING APPROPRIATIONS, 2008
SEC. 2. REFERENCES.
Except as expressly provided otherwise, any reference to ‘‘this Act’’ contained in any division of this Act shall be treated as referencing only to the provisions of that division.

Nov. 13, 2007 [H.R. 3222]
1 USC 1 note.

DIVISION A—DEPARTMENT OF DEFENSE
That the following sums are appropriated, out of any money in the Treasury not otherwise appropriated, for the fiscal year ending September 30, 2008, for military functions administered by the Department of Defense and for other purposes, namely:

Department of Defense Appropriations Act, 2008.

TITLE I

MILITARY PERSONNEL

MILITARY PERSONNEL, ARMY
For pay, allowances, individual clothing, subsistence, interest on deposits, gratuities, permanent change of station travel (including all expenses thereof for organizational movements), and expenses of temporary duty travel between permanent duty stations, for members of the Army on active duty, (except members of reserve components provided for elsewhere), cadets, and aviation cadets; for members of the Reserve Officers’ Training Corps; and

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PUBLIC LAW 110–116—NOV. 13, 2007

121 STAT. 1343

is available for work on State and private lands using all the authorities available to the Forest Service;
‘‘(4) $25,000,000 shall be available for rehabilitation and restoration of Federal lands; and
‘‘(5) $14,000,000 shall be available for reconstruction and construction of Federal facilities and may be transferred to and merged with ‘Forest Service—Capital Improvement and Maintenance’. ‘‘(b) Notwithstanding any other provision of this joint resolution, and in addition to amounts otherwise available by this joint resolution, there is appropriated $171,000,000 for ‘Department of the Interior—Bureau of Land Management—Wildland Fire Management’, to remain available until expended. Of such funds—
‘‘(1) $40,000,000 shall be available for emergency wildfire suppression;
‘‘(2) $115,000,000 shall be used within 30 days of enactment of this section for repayment to other accounts from which such funds were transferred in fiscal year 2007 for wildfire suppression so that all such transfers for fiscal year 2007 are fully repaid;
‘‘(3) $10,000,000 shall be available for hazardous fuels reduction activities; and
‘‘(4) $6,000,000 shall be available for rehabilitation and restoration of Federal lands. ‘‘(c) Each amount provided by this section is designated as an emergency requirement and necessary to meet emergency needs pursuant to subsections (a) and (b) of section 204 of S. Con. Res. 21 (110th Congress), the concurrent resolution on the budget for fiscal year 2008. ‘‘SEC. 158. (a) Notwithstanding any other provision of this joint resolution, and in addition to amounts otherwise made available by this joint resolution, there is appropriated $2,900,000,000 for ‘Department of Homeland Security—Federal Emergency Management Agency—Disaster Relief’, to remain available until expended. ‘‘(b) The amount provided by this section is designated as an emergency requirement and necessary to meet emergency needs pursuant to subsections (a) and (b) of section 204 of S. Con. Res. 21 (110th Congress), the concurrent resolution on the budget for fiscal year 2008. ‘‘SEC. 159. (a) Notwithstanding any other provision of this joint resolution, and in addition to amounts otherwise made available by this joint resolution, there is appropriated $3,000,000,000 for ‘Department of Housing and Urban Development—Community Planning and Development—Community Development Fund’, to remain available until expended, to enable the Secretary of Housing and Urban Development to make a grant or grants to the State of Louisiana solely for the purpose of covering costs associated with otherwise uncompensated but eligible claims that were filed on or before July 31, 2007, under the Road Home program administered by the State in accordance with plans approved by the Secretary. ‘‘(b) In allocating funds under this section, the Secretary of Housing and Urban Development shall ensure that such funds serve only to supplement and not supplant any other State or Federal resources committed to the Road Home program. No funds shall be drawn from the Treasury under this section beyond those necessary to fulfill the exclusive purpose of this section.

Deadline.
Grants. Louisiana.

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121 STAT. 1344

PUBLIC LAW 110–116—NOV. 13, 2007

‘‘(c) The amount provided by this section is designated as an emergency requirement and necessary to meet emergency needs pursuant to subsections (a) and (b) of section 204 of S. Con. Res. 21 (110th Congress), the concurrent resolution on the budget for fiscal year 2008.’’.

Approved November 13, 2007.

LEGISLATIVE HISTORY—H.R. 3222: HOUSE REPORTS: Nos. 110–279 (Comm. on Appropriations) and 110–434
(Comm. of Conference). SENATE REPORTS: No. 110–155 (Comm. on Appropriations). CONGRESSIONAL RECORD, Vol. 153 (2007):
Aug. 4, considered and passed House. Oct. 2, 3, considered and passed Senate, amended. Nov. 8, House and Senate agreed to conference report.
Æ
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Case 1:08-cv-01938-HHK Document 34-6 Filed 06/05/09 Page 1 of 9
Exhibit D
February 13, 2006 HUD Notice of Allocations and Waivers Allocations and Common Application and Reporting Waivers Granted to and Alternative Requirements for CDBG Disaster Recovery Grantees Under the Department of Defense Appropriations Act, 2006, 71 Fed. Reg. 7666 (Feb. 13, 2006).

Case 1:08-cv-01938-HHK Document 34-6 Filed 06/05/09 Page 2 of 9 Monday, February 13, 2006
Part IV
Department of Housing and Urban Development
Allocations and Common Application and Reporting Waivers Granted to and Alternative Requirements for CDBG Disaster Recovery Grantees Under the Department of Defense Appropriations Act, 2006; Notice
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7666

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Federal Register / Vol. 71, No. 29 / Monday, February 13, 2006 / Notices

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR–5051–N–01]
Allocations and Common Application and Reporting Waivers Granted to and Alternative Requirements for CDBG Disaster Recovery Grantees Under the Department of Defense Appropriations Act, 2006
AGENCY: Office of the Secretary, HUD.
ACTION: Notice of allocations, waivers, and alternative requirements.
SUMMARY: This Notice advises the public of the allocations for grant funds for Community Development Block Grant (CDBG) disaster recovery grants for the purpose of assisting in the recovery in the most impacted and distressed areas related to the consequences of Hurricanes Katrina, Rita, and Wilma in the Gulf of Mexico in 2005. As described in the SUPPLEMENTARY INFORMATION section of this Notice, HUD is authorized by statute to waive statutory and regulatory requirements and specify alternative requirements for this purpose, upon the request of the state grantees. This Notice also describes the common application and reporting waivers and the common alternative requirements for the grants. Each State receiving an allocation may request additional waivers from the Department as needed to address the specific needs related to that State’s recovery activities.
DATES: Effective Date: February 13, 2006.
FOR FURTHER INFORMATION CONTACT: Jan C. Opper, Director, Disaster Recovery and Special Issues Division, Office of Block Grant Assistance, Department of Housing and Urban Development, Room 7286, 451 Seventh Street, SW., Washington, DC 20410, telephone number (202) 708–3587. Persons with hearing or speech impairments may access this number via TTY by calling the Federal Information Relay Service at (800) 877–8339. FAX inquiries may be sent to Mr. Opper at (202) 401–2044. (Except for the ‘‘800’’ number, these telephone numbers are not toll-free.)
SUPPLEMENTARY INFORMATION:

Authority To Grant Waivers
The Department of Defense Appropriations Act, 2006 (Public Law 109–148, approved December 30, 2005) (Appropriations Act) appropriates $11.5 billion in Community Development Block Grant funds for necessary expenses related to disaster relief, longterm recovery, and restoration of infrastructure directly related to the consequences of the covered disasters. The Appropriations Act authorizes the Secretary to waive, or specify alternative requirements for, any provision of any statute or regulation that the Secretary administers in connection with the obligation by the Secretary or use by the recipient of these funds and guarantees, except for requirements related to fair housing, nondiscrimination, labor standards, and the environment, upon a request by the State and a finding by the Secretary that such a waiver would not be inconsistent with the overall purpose of the statute. The following application and reporting waivers and alternative requirements are in response to requests from each of the States receiving an allocation under this Notice.
The Secretary finds that the following waivers and alternative requirements, as described below, are not inconsistent with the overall purpose of Title I of the Housing and Community Development Act of 1974, as amended, or the Cranston-Gonzalez National Affordable Housing Act, as amended.
Under the requirements of the Department of Housing and Urban Development Reform Act of 1989 (the HUD Reform Act), regulatory waivers must be justified and published in the Federal Register.
Except as described in this Notice, statutory and regulatory provisions governing the Community Development Block Grant program for states, including those at 24 CFR part 570, shall apply to the use of these funds. In accordance with the appropriations act, HUD will reconsider every waiver in this Notice on the two-year anniversary of the day this Notice is published.
Additional Waivers
The Department will respond separately to each State’s requests for waivers of provisions not covered in

this Notice, after working with the State to tailor the program to best meet the unique disaster recovery needs in its impacted areas.
Allocations
Public Law 109–148 (effective December 30, 2005) provides $11.5 billion of supplemental appropriation for the CDBG program for:
Necessary expenses related to disaster relief, long-term recovery, and restoration of infrastructure in the most impacted and distressed areas related to the consequences of hurricanes in the Gulf of Mexico in 2005.
The conference report (H.R. Rep. No. 109–359) echoes and expands on this direction, stating:
The conference agreement includes $11,500,000,000 for necessary expenses related to disaster relief, long-term recovery, restoration of infrastructure and mitigation in communities in any declared disaster area in Louisiana, Mississippi, Alabama, Florida, and Texas related to Hurricanes Katrina, Rita or Wilma. * * * The conference agreement emphasizes the requirement that the States with the most impacted and distressed areas in connection with the Gulf of Mexico hurricanes receive priority consideration in the allocation of funds by HUD.
The law further notes:
That funds provided under this heading shall be administered through an entity or entities designated by the Governor of each State. And that: No state shall receive more than 54 percent of the amount provided under this heading.
Funds allocated are intended by HUD to be used toward meeting unmet housing needs in areas of concentrated distress. ‘‘Unmet housing needs’’ is defined to include, but not be limited to, those of uninsured homeowners whose homes had major or severe damage. ‘‘Concentrated distress’’ is defined as the total number of housing units with major or severe housing damage in counties where 50 percent or more of units had major or severe damage. As provided for in Public Law 109–148, the funds may not be used for activities reimbursable by or for which funds are made available by the Federal Emergency Management Agency or the Army Corps of Engineers.
The allocations are as follows:

State

Disaster

Amount

Alabama .................................................. Florida ...................................................... Louisiana ................................................. Mississippi ............................................... Texas .......................................................

Hurricane Katrina (FEMA–1605–DR) ...................................................................... Hurricane Katrina (FEMA–1602–DR), Hurricane Wilma (FEMA–1609–DR) .......... Hurricane Katrina (FEMA–1603–DR), Hurricane Rita (FEMA–1607–DR) .............. Hurricane Katrina (FEMA–1604–DR) ...................................................................... Hurricane Rita (FEMA–1606–DR) ...........................................................................

$74,388,000 82,904,000
6,210,000,000 5,058,185,000
74,523,000

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HUD will invite each grantee named above to submit an Action Plan for Disaster Recovery in accordance with this Notice.
The appropriations statute requires funds be used only for disaster relief, long-term recovery, and restoration of infrastructure in the most impacted and distressed areas related to the consequences of hurricanes in the Gulf of Mexico in 2005. The statute directs that each grantee will describe in its Action Plan for Disaster Recovery how the use of the grant funds will address long-term recovery and infrastructure restoration. HUD will monitor compliance with this direction and may be compelled to disallow expenditures if it finds uses of funds are not disasterrelated, or funds allocated duplicate other benefits. HUD encourages grantees to contact their assigned HUD offices for guidance in complying with these requirements during development of their Action Plans for Disaster Recovery or if they have any questions regarding meeting these requirements.
Prevention of Fraud, Abuse, and Duplication of Benefits
The statute also directs the Secretary to:
Establish procedures to prevent recipients from receiving any duplication of benefits and report quarterly to the Committees on Appropriations with regard to all steps taken to prevent fraud and abuse of funds made available under this heading including duplication of benefits.
To meet this directive, HUD is pursuing four courses of action. First, this Notice includes specific reporting, written procedures, monitoring, and internal audit requirements for grantees. Second, to the extent its resources allow, HUD will institute risk analysis and on-site monitoring of grantee management of the grants and of the specific uses of funds. Third, HUD will be extremely cautious in considering any waiver related to basic financial management requirements. The standard, time-tested CDBG financial requirements will continue to apply. Fourth, HUD is collaborating with the HUD Office of Inspector General to plan and implement oversight of these funds.
Waiver Justification
This section of the Notice briefly describes the basis for each waiver and related alternative requirements, if any.
The waivers, alternative requirements, and statutory changes described in this Notice apply only to the CDBG supplemental disaster recovery funds appropriated in Public Law 109–148, not to funds provided under the regular CDBG program. These actions provide

additional flexibility in program design and implementation and implement statutory requirements unique to this appropriation.
Application for Allocation
These waivers and alternative requirements streamline the pre-grant process and set the guidelines for the State’s application for its allocation. HUD encourages each of the five eligible grantees to submit an Action Plan for Disaster Recovery to HUD within 60 days of the publication date of this Notice.
Overall benefit to low- and moderateincome persons. Pursuant to explicit authority in the appropriations act, HUD is granting an overall benefit waiver that allows for up to 50 percent of the grant to assist activities under the urgent need or prevention or elimination of slums and blight national objectives, rather than the 30 percent allowed in the annual State CDBG program. The primary objective of Title I of the Housing and Community Development Act and of the funding program of each grantee is ‘‘development of viable urban communities, by providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low and moderate income.’’ The statute goes on to set the standard of performance for this primary objective at 70 percent of the aggregate of the funds used for support of activities producing benefit to low- and moderateincome persons. Since extensive damage to community development and housing affected those with varying incomes, and income-producing jobs are often lost for a period of time following a disaster, HUD is waiving the 70 percent overall benefit requirement, leaving the 50 percent requirement, to give grantees even greater flexibility to carry out recovery activities within the confines of the CDBG program national objectives. HUD may only provide additional waivers of this requirement if it makes a finding of compelling need. The requirement that each activity meet one of the three national objectives is not waived.
Expanded distribution and direct action. The waivers and alternative requirements allowing distribution of funds by a state to entitlement communities and Indian tribes, and to allow a state to carry out activities directly rather than distribute all funds to units of local government are consistent with waivers granted for previous similar disaster recovery cases. HUD believes that, in recommending the Lower Manhattan Development Corporation (LMDC) as a model and in

increasing the administrative cap, Congress is signaling its intent that the States under this appropriation also be able to carry out activities directly. Therefore, HUD is waiving program requirements to support this. HUD is also including in this Notice the necessary complementary waivers and alternative requirements related to subrecipients to ensure proper management and disposition of funds during the grant execution and at closeout.
Consistency with the consolidated plan. HUD is waiving the requirement for consistency with the consolidated plan because the effects of a major disaster usually alter a grantee’s priorities for meeting housing, employment, and infrastructure needs. To emphasize that uses of grant funds must be consistent with the overall purposes of the Housing and Community Development Act of 1974, HUD is limiting the scope of the waiver for consistency with the consolidated plan; it applies only until the grantee first updates its consolidated plan priorities following the disaster.
Action Plan for Disaster Recovery. HUD is waiving the CDBG action plan requirements and substituting an Action Plan for Disaster Recovery. This will allow rapid implementation of disaster recovery grant programs and ensure conformance with provisions of the Appropriations Act. Where possible, the Action Plan for Disaster Recovery, including certifications, does not repeat common action plan elements the grantee has already committed to carry out as part of its annual CDBG submission. Although a State as the grantee may designate an entity or entities to administer the funds, the State is responsible for compliance with Federal requirements. During the course of the grant, HUD will monitor the State’s use of funds and its actions for consistency with the Action Plan. The State may submit an initial partial Action Plan and amend it one or more times subsequently until the Action Plan describes uses for the total grant amount. The State may also amend activities in its Action Plan.
Citizen participation. The citizen participation waiver and alternative requirements will permit a more streamlined public process, but one that still provides for reasonable public notice, appraisal, examination, and comment on the activities proposed for the use of CDBG disaster recovery grant funds. The waiver removes the requirement at both the grantee and state grant recipient levels for public hearings or meetings as the method for disseminating information or collecting

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citizen comments. Instead, grantees are encouraged to employ innovative methods to communicate with citizens and solicit their views on proposed uses of disaster recovery funds, and to indicate in the Action Plan how it has addressed these views.
Administration limitation. State program administration requirements must be modified to be consistent with the appropriations act, which allows up to five percent of the grant to be used for the State’s administrative costs. The provisions at 42 U.S.C. 5306(d) and 24 CFR 570.489(a)(1)(i) and (iii) will not apply to the extent that they cap State administration expenditures and require a dollar for dollar match of State funds for administrative costs exceeding $100,000. HUD does not waive 24 CFR 570.489(a)(3) to allow the State to exceed the overall planning, management and administrative cap of 20 percent.
Use of Subrecipients
The State CDBG program rule does not make specific provision for the treatment of the entities called ‘‘subrecipients’’ in the CDBG entitlement program. The waiver allowing the state to carry out activities directly creates a situation in which the state may use subrecipients to carry out activities in a manner similar to entitlement communities. HUD and its Office of Inspector General have long identified the use of subrecipients as a practice that increases the risk of abuse of funds. HUD’s experience is that this risk can be successfully managed by following the CDBG entitlement requirements and related guidance. Therefore, HUD is requiring that a state taking advantage of the waiver allowing it to carry out activities directly must follow the alternative requirements drawn from the CDBG entitlement rule and specified in this Notice when using subrecipients.
Reporting
HUD is waiving the annual reporting requirement because the Congress requires quarterly reports from the grantees and from HUD on various aspects of the uses of funds and of the activities funded with these grants. Many of the data elements the grantees will report to Congress quarterly are the same as those that HUD will use to exercise oversight for compliance with the requirements of this Notice and for prevention of fraud, abuse of funds, and duplication of benefits. To collect these data elements and to meet its reporting requirements, HUD is requiring each grantee to report to HUD quarterly using the online Disaster Recovery Grant

Reporting system, which has just converted to a streamlined, reengineered, Internet-based format. HUD will use grantee reports to monitor for anomalies or performance problems that suggest fraud, abuse of funds, and duplication of benefits; to reconcile budgets, obligations, fund draws, and expenditures; and to calculate applicable administrative and public service limitations and the overall percent of benefit to low- and moderateincome persons, and as a basis for risk analysis in determining a monitoring plan.
After HUD reviews each report and accepts a report, the grantee must post the report on a Web site for its citizens. If a grantee chooses, it may use this report, together with a statement regarding any sole source procurements, as its required quarterly submission to the Committees on Appropriations. Each quarter, HUD will submit to the Committees a summary description of its report reviews, other HUD monitoring and technical assistance activities undertaken during the quarter, and any significant conclusions related to fraud or abuse of funds or duplication of benefits.
Certifications
HUD is waiving the standard certifications and substituting alternative certifications. The alternative certifications are tailored to CDBG disaster recovery grants and remove certifications and references that are redundant or appropriate to the annual CDBG formula program.
Applicable Rules, Statutes, Waivers, and Alternative Requirements
Pre-Grant Process
1. General note. Prerequisites to a grantee’s receipt of CDBG disaster recovery assistance include adoption of a citizen participation plan; publication of its proposed Action Plan for Disaster Recovery; public notice and comment; and submission to HUD of an Action Plan for Disaster Recovery, including certifications. Except as described in this Notice, statutory and regulatory provisions governing the Community Development Block Grant program for states, including those at 42 U.S.C. 5301 et seq. and 24 CFR part 570, shall apply to the use of these funds.
2. Overall benefit waiver and alternative requirement. The requirements at 42 U.S.C. 5301(c), 42 U.S.C. 5304(b)(3)(A), and 24 CFR 570.484 that 70 percent of funds are for activities that benefit low- and moderate-income persons are waived to stipulate that at least 50 percent of

disaster recovery grant funds are for activities that principally benefit lowand moderate-income persons.
3. Direct grant administration by States and means of carrying out eligible activities. Requirements at 42 U.S.C. 5306 are waived to the extent necessary to allow the State to use its disaster recovery grant allocation directly to carry out state-administered activities eligible under this Notice. Activities eligible under this Notice may be undertaken, subject to State law, by the recipient through its employees, or through procurement contracts, or through loans or grants under agreements with subrecipients, or by one or more entities that are designated by the chief executive officer of the State. Activities made eligible under section 105(a)(15) of the Housing and Community Development Act of 1974, as amended, may only be undertaken by entities specified in that section, whether the assistance is provided to such an entity from the State or from a unit of general local government.
4. Consolidated Plan waiver. Requirements at 42 U.S.C. 12706 and 24 CFR 91.325(a)(6), that housing activities undertaken with CDBG funds be consistent with the strategic plan, are waived. Further, 42 U.S.C. 5304(e), to the extent that it would require HUD to annually review grantee performance under the consistency criteria, is also waived. These waivers apply only until the time that the grantee first updates the consolidated plan priorities following the disaster.
5. Citizen participation waiver and alternative requirement. Provisions of 42 U.S.C. 5304(a)(2) and (3), 42 U.S.C. 12707, 24 CFR 570.486, and 24 CFR 91.115(b) with respect to citizen participation requirements are waived and replaced by the requirements below. The streamlined requirements do not mandate public hearings at either the state or local government level, but do require providing a reasonable opportunity for citizen comment and ongoing citizen access to information about the use of grant funds. The streamlined citizen participation requirements for this grant are:
a. Before the grantee adopts the action plan for this grant or any substantial amendment to this grant, the grantee will publish the proposed plan or amendment (including the information required in this Notice for an Action Plan for Disaster Recovery). The manner of publication (including prominent posting on the state, local, or other relevant website) must afford citizens, affected local governments and other interested parties a reasonable opportunity to examine the plan or

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amendment’s contents. Subsequent to publication, the grantee must provide a reasonable time period and method(s) (including electronic submission) for receiving comments on the plan or substantial amendment. The grantee’s plans to minimize displacement of persons or entities and to assist any persons or entities displaced must be published with the action plan.
b. In the action plan, each grantee will specify its criteria for determining what changes in the grantee’s activities constitute a substantial amendment to the plan. At a minimum, adding or deleting an activity or changing the planned beneficiaries of an activity will constitute a substantial change. The grantee may modify or substantially amend the action plan if it follows the same procedures required in this Notice for the preparation and submission of an Action Plan for Disaster Recovery. The grantee must notify HUD, but is not required to notify the public, when it makes any plan amendment that is not substantial.
c. The grantee must consider all comments received on the action plan or any substantial amendment and submit to HUD a summary of those comments and the grantee’s response with the action plan or substantial amendment.
d. The grantee must make the action plan, any substantial amendments, and all performance reports available to the public. HUD recommends posting them on the Internet. In addition, the grantee must make these documents available in a form accessible to persons with disabilities and non-English-speaking persons. During the term of this grant, the grantee will provide citizens, affected local governments, and other interested parties reasonable and timely access to information and records relating to the action plan and the grantee’s use of this grant.
e. The grantee will provide a timely written response to every citizen complaint. Such response will be provided within 15 working days of the receipt of the complaint, if practicable.
6. Modify requirement for consultation with local governments. Currently, the statute and regulations require consultation with affected units of local government in the nonentitlement area of the State regarding the State’s proposed method of distribution. HUD is waiving 42 U.S.C. 5306(d)(2)(C)(iv), 24 CFR 91.325(b), and 24 CFR 91.110, with the alternative requirement that the State consult with all disaster-affected units of general local government, including any CDBG entitlement communities, in determining the use of funds.

7. Action Plan waiver and alternative requirement. The requirements at 42 U.S.C. 12705(a)(2), 42 U.S.C. 5304(a)(1), 42 U.S.C. 5304(m), 42 U.S.C. 5306(d)(2)(C)(iii), 24 CFR 1003.604, and 24 CFR 91.320 are waived for these disaster recovery grants. Each State must submit to HUD an Action Plan for Disaster Recovery that describes:
a. The effects of the covered disaster, especially in the most impacted areas and populations, and the greatest recovery needs resulting from the covered disaster that have not been addressed by insurance proceeds, other federal assistance or any other funding source;
b. The grantee’s overall plan for disaster recovery including:
(i) How the State will promote sound short and long-term recovery planning at the state and local levels, especially land use decisions that reflect responsible flood plain management, removal of regulatory barriers to reconstruction, and prior coordination with planning requirements of other State and Federal programs and entities;
(ii) How the State will encourage construction methods that emphasize high quality, durability, energy efficiency, and mold resistance including how the State will promote enactment and enforcement of modern building codes and mitigation of flood risk where appropriate;
(iii) How the State will provide or encourage provision of adequate, floodresistant housing for all income groups that lived in the disaster impacted areas prior to the incident date(s) of the applicable disaster(s), including a description of the activities it plans to undertake to address emergency shelter and transitional housing needs of homeless individuals and families (including subpopulations), to prevent low-income individuals and families with children (especially those with incomes below 30 percent of median) from becoming homeless, to help homeless persons make the transition to permanent housing and independent living, and to address the special needs of persons who are not homeless identified in accordance with 24 CFR 91.315(d);
c. Monitoring standards and procedures that are sufficient to ensure program requirements, including nonduplication of benefits, are met and that provide for continual quality assurance, investigation, and internal audit functions, with responsible staff reporting independently to the Governor of the State or, at a minimum, to the chief officer of the governing body of any designated administering entity;

d. A description of the steps the State will take to avoid or mitigate occurrences of fraud, abuse, and mismanagement, especially with respect to accounting, procurement, and accountability, with a description of how the State will provide for increasing the capacity for implementation and compliance of local governments, subrecipients, subgrantees, contractors, and any other entity responsible for administering activities under this grant; and
e. The state’s method of distribution. The method of distribution shall include descriptions of the method of allocating funds to units of local government and of specific projects the state will carry out directly, as applicable. The descriptions will include:
(i) When funds are to be allocated to units of local government, all criteria used to select applications from local governments for funding, including the relative importance of each criterion, and including a description of how the disaster recovery grant resources will be allocated among all funding categories and the threshold factors and grant size limits that are to be applied; and
(ii) When the State will carry out activities directly, the projected uses for the CDBG disaster recovery funds by responsible entity, activity, and geographic area;
(iii) How the method of distribution or use of funds described in accordance with the above subparagraphs will result in eligible uses of grant funds related to long-term recovery from specific effects of the disaster(s) or restoration of infrastructure; and
(iv) Sufficient information so that citizens, units of general local government and other eligible subgrantees or subrecipients will be able to understand and comment on the action plan and, if applicable, be able to prepare responsive applications to the State.
f. Required certifications (see the applicable Certifications section of this Notice); and
g. A completed and executed Federal form SF–424.
8. Allow reimbursement for preagreement costs. The provisions of 24 CFR 570.489(b) are applied to permit a grantee to reimburse itself for otherwise allowable costs incurred on or after the incident date of the covered disaster.
9. Clarifying note on the process for environmental release of funds when a State carries out activities directly. Usually, a State distributes CDBG funds to units of local government and takes on HUD’s role in receiving environmental certifications from the

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grant recipients and approving releases of funds. For this grant, HUD will allow a State grantee to also carry out activities directly instead of distributing them to other governments. According to the environmental regulations at 24 CFR 58.4, when a State carries out activities directly, the State must submit the certification and request for release of funds to HUD for approval.
10. Duplication of benefits. In general, 42 U.S.C. 5155 (section 312 of the Robert T. Stafford Disaster Assistance and Emergency Relief Act, as amended) prohibits any person, business concern, or other entity from receiving financial assistance with respect to any part of a loss resulting from a major disaster as to which he has received financial assistance under any other program or from insurance or any other source. The Appropriations Act stipulates that funds may not be used for activities reimbursable by or for which funds have been made available by the Federal Emergency Management Agency or by the Army Corps of Engineers.
11. Waiver and alternative requirement for distribution to CDBG metropolitan cities and urban counties.
a. Section 5302(a)(7) of title 42, U.S.C. (definition of ‘‘nonentitlement area’’) and provisions of 24 CFR part 570 that would prohibit a state from distributing CDBG funds to units of general local government in entitlement communities and to Indian tribes, are waived, including 24 CFR 570.480(a), to the extent that such provisions limit the distribution of funds to units of general local government located in entitlement areas and to State or Federally recognized Indian tribes. The state is required instead to distribute funds to the most affected and impacted areas related to the consequences of the covered disaster(s) without regard to a local government or Indian tribe status under any other CDBG program.
b. Additionally, because a State grantee under this appropriation may carry out activities directly, HUD is applying the regulations at 24 CFR 570.480(c) with respect to the basis for HUD determining whether the State has failed to carry out its certifications so that such basis shall be that the State has failed to carry out its certifications in compliance with applicable program requirements. Also, 24 CFR 570.494 regarding timely distribution of funds is waived. However, HUD expects each State grantee to expeditiously obligate and expend all funds, including any recaptured funds or program income, and to carry out activities in a timely manner.
12. Note that use of grant funds must relate to the covered disaster(s). In

addition to being eligible under 42 U.S.C. 5305(a) or this Notice and meeting a CDBG national objective, the Appropriations Act requires that activities funded under this Notice must also be for necessary expenses related to disaster relief, long-term recovery, and restoration of infrastructure in the most impacted and distressed areas related to the consequences of the hurricanes in communities included in Presidential disaster declarations.
13. Note on change to administration limitation. Up to five percent of the grant amount may be used for the State’s administrative costs. The provisions of 42 U.S.C. 5306(d) and 24 CFR 570.489(a)(1)(i) and (iii) will not apply to the extent that they cap State administration expenditures and require a dollar for dollar match of State funds for administrative costs exceeding $100,000. HUD does not waive 24 CFR 570.489(a)(3) to allow the State to exceed the overall planning, management and administrative cap of 20 percent.
Reporting
14. Waiver of performance report and alternative requirement. The requirements for submission of a Performance Evaluation Report (PER) pursuant to 42 U.S.C.12708 and 24 CFR 91.520 are waived. The alternative requirement is that—
a. Each grantee must submit its Action Plan for Disaster Recovery, including performance measures, into HUD’s Webbased Disaster Recovery Grant Reporting (DRGR) system. (The signed certfications and the SF–424 must be submitted in hard copy.) As additional detail about uses of funds becomes available to the grantee, the grantee must enter this detail into DRGR, in sufficient detail to serve as the basis for acceptable performance reports.
b. Each grantee must submit a quarterly performance report, as HUD prescribes, no later than 30 days following each calendar quarter, beginning after the first full calendar quarter after grant award and continuing until all funds have been expended and all expenditures reported. Each quarterly report will include information about the uses of funds during the applicable quarter including (but not limited to) the project name, activity, location, and national objective, funds budgeted, obligated, drawn down, and expended; the funding source and total amount of any non-CDBG disaster funds; beginning and ending dates of activities; and performance measures such as numbers of low- and moderate-income persons or households benefiting. Quarterly reports

to HUD must be submitted using HUD’s Web-based DRGR system.
15. Use of subrecipients. The following alternative requirement applies for any activity that a state carries out directly by funding a subrecipient:
a. 24 CFR 570.503, except that specific references to 24 CFR parts 84 and 85 need not be included in subrecipient agreements.
b. 570.502(b). 16. Recordkeeping. Recognizing that the State may carry out activities directly, 24 CFR 570.490(b) is waived in such a case and the following alternative provision shall apply: State records. The State shall establish and maintain such records as may be necessary to facilitate review and audit by HUD of the State’s administration of CDBG disaster recovery funds under 24 CFR 570.493. Consistent with applicable statutes, regulations, waivers and alternative requirements, and other Federal requirements, the content of records maintained by the State shall be sufficient to: enable HUD to make the applicable determinations described at 24 CFR 570.493; make compliance determinations for activities carried out directly by the state; and show how activities funded are consistent with the descriptions of activities proposed for funding in the action plan. For fair housing and equal opportunity purposes, and as applicable, such records shall include data on the racial, ethnic, and gender characteristics of persons who are applicants for, participants in, or beneficiaries of the program. 17. Change of use of real property. This waiver conforms the change of use of real property rule to the waiver allowing a State to carry out activities directly. For purposes of this program, in 24 CFR 570.489(j), (j)(1), and the last sentence of (j)(2), ‘‘unit of general local government’’ shall be read as ‘‘’unit of general local government or State.’’ 18. Responsibility for State review and handling of noncompliance. This change conforms the rule with the waiver allowing the State to carry out activities directly. 24 CFR 570.492 is waived and the following alternative requirement applies: The State shall make reviews and audits including onsite reviews of any subrecipients, designated public agencies, and units of general local government as may be necessary or appropriate to meet the requirements of section 104(e)(2) of the Housing and Community Development Act of 1974, as amended, as modified by this Notice. In the case of noncompliance with these requirements, the State shall take such

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actions as may be appropriate to prevent a continuance of the deficiency, mitigate any adverse effects or consequences and prevent a recurrence. The State shall establish remedies for noncompliance by any designated public agencies or units of general local governments and for its subrecipients.
19. Information collection approval note. HUD has approval for information collection requirements in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520) under OMB control number 2506–0165, which expires August 31, 2007. In accordance with the Paperwork Reduction Act, HUD may not conduct or sponsor, nor is a person required to respond to, a collection of information unless the collection displays a valid control number.
Certifications
20. Certifications for state governments, waiver and alternative requirement. Section 91.325 of title 24 Code of Federal Regulations is waived. Each state must make the following certifications prior to receiving a CDBG disaster recovery grant:
a. The state certifies that it will affirmatively further fair housing, which means that it will conduct an analysis to identify impediments to fair housing choice within the state, take appropriate actions to overcome the effects of any impediments identified through that analysis, and maintain records reflecting the analysis and actions in this regard. (See 24 CFR 570.487(b)(2)(ii).)
b. The state certifies that it has in effect and is following a residential antidisplacement and relocation assistance plan in connection with any activity assisted with funding under the CDBG program.
c. The state certifies its compliance with restrictions on lobbying required by 24 CFR part 87, together with disclosure forms, if required by that part.
d. The state certifies that the Action Plan for Disaster Recovery is authorized under state law and that the state, and any entity or entities designated by the State, possesses the legal authority to carry out the program for which it is seeking funding, in accordance with applicable HUD regulations and this Notice.
e. The state certifies that it will comply with the acquisition and relocation requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, and implementing regulations at 49 CFR part 24, except where waivers or alternative requirements are provided for this grant.

f. The state certifies that it will comply with section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u), and implementing regulations at 24 CFR part 135.
g. The state certifies that it is following a detailed citizen participation plan that satisfies the requirements of 24 CFR 91.115 (except as provided for in notices providing waivers and alternative requirements for this grant), and that each unit of general local government that is receiving assistance from the state is following a detailed citizen participation plan that satisfies the requirements of 24 CFR 570.486 (except as provided for in notices providing waivers and alternative requirements for this grant).
h. The state certifies that it has consulted with affected units of local government in counties designated in covered major disaster declarations in the nonentitlement, entitlement and tribal areas of the state in determining the method of distribution of funding;
i. The state certifies that it is complying with each of the following criteria:
(1) Funds will be used solely for necessary expenses related to disaster relief, long-term recovery, and restoration of infrastructure in the most impacted and distressed areas related to the consequences of the Gulf Coast hurricanes of 2005 in communities included in Presidential disaster declarations.
(2) With respect to activities expected to be assisted with CDBG disaster recovery funds, the action plan has been developed so as to give the maximum feasible priority to activities that will benefit low- and moderate-income families.
(3) The aggregate use of CDBG disaster recovery funds shall principally benefit low- and moderate-income families in a manner that ensures that at least 50 percent of the amount is expended for activities that benefit such persons during the designated period.
(4) The state will not attempt to recover any capital costs of public improvements assisted with CDBG disaster recovery grant funds, by assessing any amount against properties owned and occupied by persons of lowand moderate-income, including any fee charged or assessment made as a condition of obtaining access to such public improvements, unless (A) disaster recovery grant funds are used to pay the proportion of such fee or assessment that relates to the capital costs of such public improvements that are financed from revenue sources other than under this title; or (B) for purposes of assessing any amount against

properties owned and occupied by persons of moderate income, the grantee certifies to the Secretary that it lacks sufficient CDBG funds (in any form) to comply with the requirements of clause (A).
j. The state certifies that the grant will be conducted and administered in conformity with title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) and the Fair Housing Act (42 U.S.C. 3601–3619) and implementing regulations.
k. The state certifies that it has and that it will require units of general local government that receive grant funds to certify that they have adopted and are enforcing:
(1) A policy prohibiting the use of excessive force by law enforcement agencies within its jurisdiction against any individuals engaged in non-violent civil rights demonstrations; and
(2) A policy of enforcing applicable state and local laws against physically barring entrance to or exit from a facility or location that is the subject of such non-violent civil rights demonstrations within its jurisdiction.
l. The state certifies that each state grant recipient or administering entity has the capacity to carry out disaster recovery activities in a timely manner, or the state has a plan to increase the capacity of any state grant recipient or administering entity who lacks such capacity.
m. The state certifies that it will not use CDBG disaster recovery funds for any activity in an area delineated as a special flood hazard area in FEMA’s most current flood advisory maps unless it also ensures that the action is designed or modified to minimize harm to or within the floodplain in accordance with Executive Order 11988 and 24 CFR part 55.
n. The state certifies that it will comply with applicable laws.
Duration of Funding
Availability of funds provisions in 31 U.S.C. 1551–1557, added by section 1405 of the National Defense Authorization Act for Fiscal Year 1991 (Public Law 101–510), limit the availability of certain appropriations for expenditure. This limitation may not be waived. However, the Appropriations Act for these grants directs that these funds be available until expended unless, in accordance with 31 U.S.C. 1555, the Department determines that the purposes for which the appropriation has been made have been carried out and no disbursement has been made against the appropriation for two consecutive fiscal years. In such

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case, the Department shall close out the grant prior to expenditure of all funds.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance numbers for the disaster recovery grants under this Notice are as follows: 14.219; 14.228.

Finding of No Significant Impact
A Finding of No Significant Impact (FONSI) with respect to the environment has been made in accordance with HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332). The FONSI is available for public inspection between 8 a.m. and 5 p.m. weekdays in the Office of the Rules Docket Clerk,

Office of General Counsel, Department of Housing and Urban Development, Room 10276, 451 Seventh Street, SW., Washington, DC 20410–0500.
Dated: February 3, 2006. Pamela H. Patenaude, Assistant Secretary for Community Planning and Development. [FR Doc. 06–1357 Filed 2–9–06; 2:51 pm]
BILLING CODE 4210–67–P

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Exhibit E
October 30, 2006 HUD Notice of Allocations and Waivers Allocations and Waivers Granted to and Alternative Requirements for CDBG Disaster Recovery Grantees Under Chapter 9 of Title II of the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006, 71 Fed. Reg. 63,337 (Oct. 30, 2006).

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Capital Advance: $1,499,500 Five-year rental subsidy: $188,500 Number of units 15
Texas
Dallas, TX Non-Profit Sponsor: CC Young Memorial
Home Inc Capital Advance: $4,216,500 Five-year rental subsidy: $806,000 Number of units 54
Houston, TX Five-year rental subsidy: $1,012,000 Number of units 67
San Antonio, TX Non-Profit Sponsor: Retirement Housing
Foundation Capital Advance: $4,065,300 Five-year rental subsidy: $753,500 Number of units 55
Waco, TX Non-Profit Sponsor: Mercy Housing Inc Co-Sponsor: Mercy Housing Colorado Capital Advance: $4,208,400 Five-year rental subsidy: $821,500 Number of units 55
Utah
Price, UT Non-Profit Sponsor: Comm Hsg Ser Inc Capital Advance: $3,516,000 Five-year rental subsidy: $466,000 Number of units 33 Project Description:
The funds will be used for the new construction of two buildings for the very low-income elderly consisting of a total of 33 units. Some of the supportive services that will be provided are meals-on-wheels, housekeeping assistance, social activities and transportation.
Virginia
Kilmarnock, VA Non-Profit Sponsor: Bay Aging Capital Advance: $1,515,900 Five-year rental subsidy: $299,500 Number of units 19
Vinton, VA Non-Profit Sponsor: Metropolitan Housing
and CDC, Inc. Capital Advance: $5,824,400 Five-year rental subsidy: $1,150,500 Number of units 73
Washington
Buckley, WA Non-Profit Sponsor: Enumclaw Community
Hospital Capital Advance: $2,042,700 Five-year rental subsidy: $318,500 Number of units 20
Kennewick, WA Non-Profit Sponsor: Shalom Ecumenical
Center Capital Advance: $4,008,900 Five-year rental subsidy: $722,000 Number of units 45
Spokane, WA Non-Profit Sponsor: East Central Community
Organization Capital Advance: $2,157,200 Five-year rental subsidy: $394,000 Number of units 25
Vancouver, WA Non-Profit Sponsor: Columbia Non-Profit
Housing

Capital Advance: $5,479,700 Five-year rental subsidy: $866,500 Number of units 56
Yakima, WA Non-Profit Sponsor: Diocese of Yakima
Housing Services Capital Advance: $3,544,700 Five-year rental subsidy: $640,000 Number of units 40
Wisconsin
Milwaukee, WI Non-Profit Sponsor: Eternal Life Church of
God in Christ Capital Advance: $2,799,900 Five-year rental subsidy: $380,000 Number of units 24
Town of Russell, WI Non-Profit Sponsor: Impact Seven INC Capital Advance: $1,255,300 Five-year rental subsidy: $198,500 Number of units 12
[FR Doc. E6–18071 Filed 10–27–06; 8:45 am]
BILLING CODE 4210–67–P
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR–5089–N–01]
Allocations and Waivers Granted to and Alternative Requirements for CDBG Disaster Recovery Grantees Under Chapter 9 of Title II of the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006
AGENCY: Office of the Secretary, HUD. ACTION: Notice of allocation, waivers, and alternative requirements.
SUMMARY: This Notice advises the public of the allocations for grant funds for Community Development Block Grant (CDBG) disaster recovery grants for the purpose of assisting in the recovery in the most impacted and distressed areas related to the consequences of Hurricanes Katrina, Rita, and Wilma in the Gulf of Mexico in 2005. As described in the Supplementary Information section of this notice, HUD is authorized by statute to waive statutory and regulatory requirements and specify alternative requirements for this purpose, upon the request of the State grantees. This notice also describes the application and reporting waivers and the common alternative requirements for the grants made under the subject appropriations act. DATES: Effective Date: November 6, 2006.
FOR FURTHER INFORMATION CONTACT: Jan C. Opper, Director, Disaster Recovery and Special Issues Division, Office of Block Grant Assistance, Department of Housing and Urban Development, 451

Seventh Street, SW., Room 7286, Washington, DC 20410, telephone number (202) 708–3587. Persons with hearing or speech impairments may access this number via TTY by calling the Federal Information Relay Service at (800) 877–8339. FAX inquiries may be sent to Mr. Opper at (202) 401–2044. (Except for the ‘‘800’’ number, these telephone numbers are not toll-free.)
SUPPLEMENTARY INFORMATION:
Authority To Grant Waivers
Chapter 9 of Title II of the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006 (Pub. L. 109– 234, approved June 15, 2006) (Public Law 109–234) appropriates $5.2 billion in Community Development Block Grant funds for necessary expenses related to disaster relief, long-term recovery, and restoration of infrastructure directly related to the consequences of the covered disasters. Public Law 109–234 authorizes the Secretary to waive, or specify alternative requirements for, any provision of any statute or regulation that the Secretary administers in connection with the obligation by the Secretary or use by the recipient of these funds and guarantees, except for requirements related to fair housing, nondiscrimination, labor standards, and the environment, upon a request by the State and a finding by the Secretary that such a waiver would not be inconsistent with the overall purpose of the statute. The following application and reporting waivers and alternative requirements are in response to requests from the States receiving an allocation under this notice.
The Secretary finds that the following waivers and alternative requirements, as described below, are not inconsistent with the overall purpose of Title I of the Housing and Community Development Act of 1974, as amended, or the Cranston-Gonzalez National Affordable Housing Act, as amended.
Under the requirements of the Department of Housing and Urban Development Act, as amended (42 U.S.C. 3535(q)), regulatory waivers must be published in the Federal Register.
Except as described in this and other notices applicable to this grant, statutory and regulatory provisions governing the Community Development Block Grant program for States, including those at 24 CFR part 570, shall apply to the use of these funds. In accordance with Public Law 109–234, HUD will reconsider every waiver in this notice on the two-year anniversary of the day this notice is published.

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Allocations
Public Law 109–234 (effective June 15, 2006) provides $5.2 billion of supplemental appropriation for the CDBG program for:
necessary expenses related to disaster relief, long-term recovery, and restoration of infrastructure in the most impacted and distressed areas related to the consequences of Hurricanes Katrina, Rita, or Wilma.
The law further notes:
That funds provided under this heading shall be administered through an entity or entities designated by the Governor of

each State. And that: No State shall receive more than $4.2 billion of the amount provided under this heading.
As provided for in Public Law 109– 234, the funds may not be used for activities reimbursable by or for which funds are made available by the Federal Emergency Management Agency or the Army Corps of Engineers. Further, none of the funds made available under this heading may be used by a State or locality as a matching requirement, share, or contribution for any other Federal program.
Also as required by the law, not less than $1.0 billion of the $5.2 billion

appropriation less $27.0 million in administrative set-asides (which computes to 19.3311 percent of any State’s allocation) shall be used for repair, rehabilitation, and reconstruction (including demolition, site clearance and remediation) of the affordable rental housing stock (including public and other HUDassisted housing) in the impacted areas. Therefore, HUD is requiring that not less than 19.3311 percent of each State’s grant be used for these activities.
From this supplemental appropriation, the Secretary is allocating funds as follows.

State

Disaster

Allocation amount ($)

Alabama ................................. Florida .................................... Louisiana ................................ Mississippi .............................. Texas ......................................

Hurricane Katrina (FEMA–1605–DR) ................................................................................. Hurricane Katrina (FEMA–1602–DR), Hurricane Wilma (FEMA–1609–DR) ..................... Hurricane Katrina (FEMA–1603–DR), Hurricane Rita (FEMA–1607–DR) ......................... Hurricane Katrina (FEMA–1604–DR) ................................................................................. Hurricane Rita (FEMA–1606–DR) ......................................................................................

$21,225,574 100,066,518 4,200,000,000 423,036,059 428,671,849

State

Minimum amount for affordable rental housing ($)

Alabama ............................ Florida ............................... Louisiana .......................... Mississippi ........................ Texas ................................

$4,103,146 19,344,001 811,907,984 81,777,703 82,867,166

The amounts in the table directly above are the minimum required for each State to use of its allocation from Public Law 109–234 for repair, rehabilitation, and reconstruction (including demolition, site clearance and remediation) of the affordable rental housing stock (including public and other HUD-assisted housing) in the impacted areas.
In Louisiana, the Department has reviewed data chronicling the massive impact of the disasters on affordable rental housing, including public housing, in the areas of the State most affected by disasters. In light of the unprecedented housing needs resulting from the disasters, the Secretary is carrying out his statutory duty to ensure that priority has been given to identified affordable rental housing by providing an alternative requirement. HUD is requiring that, before the State of Louisiana expends any funds to meet the minimum requirement for affordable rental housing under this notice (see table above), the Governor of Louisiana shall demonstrate to the Secretary’s satisfaction that the State will provide funds or has identified dedicated resources sufficient to meet the key disaster recovery needs for repair, rehabilitation, and reconstruction of

affordable rental housing stock, including public housing, in the most impacted areas of the State.
HUD invites each State receiving an allocation to submit an Action Plan for Disaster Recovery in accordance with this notice.
The appropriations statute requires funds be used only for disaster relief, long-term recovery, and restoration of infrastructure in the most impacted and distressed areas related to the consequences of hurricanes in the Gulf of Mexico in 2005. The statute directs that each grantee will describe in its Action Plan for Disaster Recovery how the use of the grant funds gives priority to infrastructure development and rehabilitation and the rehabilitation and reconstruction of the affordable rental housing stock including public and other HUD-assisted housing. HUD will monitor compliance with this direction and may be compelled to disallow expenditures if it finds uses of funds are not disaster-related, or funds allocated duplicate other benefits.
For the State of Louisiana, which suffered major impacts from two different hurricanes, HUD estimates that over 85 percent of the major and severe damage due to those storms is in the New Orleans-Metairie-Bogalusa Metropolitan Area (Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. John the Baptist, and St. Tammany Parishes). HUD therefore expects that the State will target a substantial majority of its disaster recovery funds under Pub. L. 109–234 toward the disaster recovery needs in the New Orleans-Metairie-Bogalusa Metropolitan

Area, and has included an alternative requirement to that effect.
Prevention of Fraud, Abuse, and Duplication of Benefits
The statute also directs the Secretary to:
Establish procedures to prevent recipients from receiving any duplication of benefits and report quarterly to the Committees on Appropriations with regard to all steps taken to prevent fraud and abuse of funds made available under this heading including duplication of benefits.
To meet this directive, HUD is pursuing five courses of action. First, this notice makes applicable specific reporting, written procedures, monitoring, and internal audit requirements for grantees. Second, to the extent its resources allow, HUD will institute risk analysis and on-site monitoring of grantee management of the grants and of the specific uses of funds. Third, HUD will be extremely cautious in considering any waiver related to basic financial management requirements. The standard, time-tested CDBG financial requirements will continue to apply. Fourth, HUD is collaborating with the HUD Office of Inspector General to plan and implement oversight of these funds. Fifth, HUD will follow the direction of the conference report, 109–494, and apply $6 million of funds appropriated for the Working Capital Fund for ‘‘immediate enhancement of the capabilities of the Disaster Recovery Grant Reporting system by building

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additional electronic controls that will increase accountability while further decreasing the risk of fraud, waste, or abuse.’’
Waiver Justification
In general, waivers already granted to the States and alternative requirements already specified for CDBG disaster recovery grant funds provided under the Department of Defense Appropriations Act, 2006 (Pub. L. 109–148, approved December 30, 2005) (Appropriations Act) will also apply to grant funds provided under Public Law 109–234. This eliminates unnecessary inconsistencies in administration of the two grants and thus reduces the opportunities for technical errors. The notices in which these prior waivers and alternative requirements appear are 71 FR 7666, published February 13, 2006 (all five States); 71 FR 34448 (for Alabama), 71 FR 34451 (for Mississippi), and 71 FR 34457 (for Louisiana), all published June 14, 2006; 71 FR 43622, published August 1, 2006 (for Texas); 71 FR 51678 (for Florida), published August 30, 2006; and 71 FR 62372 (for Mississippi), published October 24, 2006, except that the provisions of paragraph four of the latter notice do not apply to the funds allocated under Pub. L. 109–234.
In addition to making applicable the requirements cited above, this notice specifies and provides for differences in program rules, waivers, or alternative requirements that are necessary due to the provisions of Public Law 109–234.
The provisions of this notice do not apply to funds provided under the regular CDBG program. The provisions provide additional flexibility in program design and implementation and implement statutory requirements unique to this appropriation.
Application for Allocation
The waivers and alternative requirements related to a State’s application for its allocation are those delineated in a notice entitled, ‘‘Allocations and Common Application and Reporting Waivers Granted to and Alternative Requirements for CDBG Disaster Recovery Grantees Under the Department of Defense Appropriations Act, 2006,’’ published February 13, 2006 71 (FR 7666), with the changes noted below. HUD encourages each State receiving an allocation to submit an Action Plan for Disaster Recovery to HUD within 60 days of the publication date of this notice.
New elements added to the State’s Action Plan for Disaster Recovery include a description of how the State will give priority to infrastructure

development and rehabilitation and how the State will give priority to the rehabilitation and reconstruction of the affordable rental housing stock including public and other HUDassisted housing. The State must also explain how its choices for fund use will result in the State meeting the requirement to use not less than 19.3311 percent of its allocation for repair, rehabilitation, and reconstruction (including demolition, site clearance and remediation) of the affordable rental housing stock (including public and other HUD-assisted housing) in the impacted areas. The explanation should include how the State has considered the unique challenges that individuals with disabilities face in finding accessible and affordable housing.
Applicable Rules, Statutes, Waivers, and Alternative Requirements
1. General note. Except as described in this notice, the statutory, regulatory, and notice provisions that shall apply to the use of these funds are:
a. Those governing the funds appropriated under the Appropriations Act and already published in the Federal Register, including those in notices 71 FR 7666, published February 13, 2006 (for all five States); 71 FR 34448 (for Alabama), 71 FR 34451 (for Mississippi), and 71 FR 34457 (for Louisiana), all published June 14, 2006; 71 FR 43622 for Texas, published August 1, 2006; 71 FR 51678 (for Florida), published on August 30, 2006; and 71 FR 62372 (for Mississippi), published October 24, 2006, except that the provisions of paragraph four of the latter notice do not apply to the funds allocated under Public Law 109–234; and
b. Those governing the Community Development Block Grant program for States, including those at 42 U.S.C. 5301 et seq. and 24 CFR part 570.
2. Action Plan additional elements. a. In addition to the waivers and alternative requirements published in the ‘‘Allocations and Common Application and Reporting Waivers Granted to and Alternative Requirements for CDBG Disaster Recovery Grantees Under the Department of Defense Appropriations Act, 2006’’ notice published February 13, 2006, the disaster recovery grantees receiving funding under Public Law 109–234 must add the items in paragraph b below to those described in paragraph number 7 on page 7669 of that notice regarding the information required in the State’s overall plan for disaster recovery for use of funds under Public Law 109–234.

b. The grantee’s overall plan for disaster recovery will also include:
(i) An explanation of how the State will give priority to the rehabilitation and reconstruction of the affordable rental housing stock including public and other HUD-assisted housing, a description of the activities the State plans to undertake with grant funds under this priority, and a description of the unique challenges that individuals with disabilities face in finding accessible and affordable housing;
(ii) An explanation of how the State will give priority to infrastructure development and rehabilitation, and a description of the infrastructure activities it plans to undertake with grant funds; and
(iii) An explanation of how the method of distribution or use of funds described in accordance with the applicable notices will result in the State meeting the requirement that at least 19.3311 percent of its allocation under this notice shall be used for repair, rehabilitation, and reconstruction (including demolition, site clearance and remediation) of the affordable rental housing stock (including public and other HUDassisted housing) in the impacted areas.
3. Note that use of grant funds must relate to the covered disaster(s). In addition to being eligible under 42 U.S.C. 5305(a) of this notice and meeting a CDBG national objective under the penultimate paragraph of 42 U.S.C. 5304(b)(3), Public Law 109–234 requires that activities funded under this notice must also be for necessary expenses related to disaster relief, longterm recovery, and restoration of infrastructure in the most impacted and distressed areas related to the consequences of Hurricanes Katrina, Rita, and Wilma in communities included in Presidential disaster declarations.
4. Alternative Requirements Regarding Targeting in Louisiana. a. The State of Louisiana will target 70 percent of its disaster recovery funds under Pub. L. 109–234 towards the disaster recovery needs in the New OrleansMetairie-Bogalusa Metropolitan Area; and
b. Before the State of Louisiana expends any funds to meet the minimum requirement for affordable rental housing under this notice, the Governor of Louisiana shall demonstrate to the Secretary’s satisfaction that the State will provide funds or has identified dedicated resources sufficient to meet the key disaster recovery needs for repair, rehabilitation, and reconstruction of affordable rental housing stock, including public housing

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disaster recovery in the most impacted areas of the State.
5. Information collection approval note. HUD has approval for information collection requirements in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520) under OMB control number 2506–0165, which expires August 31, 2007. In accordance with the Paperwork Reduction Act, HUD may not conduct or sponsor, nor is a person required to respond to, a collection of information unless the collection displays a valid control number.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance numbers for the disaster recovery grants under this notice are as follows: 14.219; 14.228.
Finding of No Significant Impact
A Finding of No Significant Impact (FONSI) with respect to the environment has been made in accordance with HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332). The FONSI is available for public inspection between 8 a.m. and 5 p.m. weekdays in the Office of the Rules Docket Clerk, Office of General Counsel, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 10276, Washington, DC 20410–0500. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the finding by calling the Regulations Division at (202) 708–3055 (this is not a toll-free number).
Dated: October 25, 2006. Roy A. Bernardi, Deputy Secretary. [FR Doc. 06–8978 Filed 10–26–06; 1:56 pm]
BILLING CODE 4210–67–P
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR–5067–N–02]
Extension of Period of Submission for Notices of Intent and Fungibility Plans in Accordance With HUD’s Implementation Guidance for Section 901 of the Emergency Supplemental Appropriations To Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006
AGENCY: Office of the Assistant Secretary for Public and Indian Housing, HUD. ACTION: Notice.

SUMMARY: On July 28, 2006, HUD published a notice entitled, ‘‘Implementation Guidance for Section 901 of the Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006.’’ This notice extends the period for eligible public housing agencies (PHAs) located within the most heavily impacted areas of Louisiana and Mississippi that are subject to a declaration by the President of a major disaster under the Robert T. Stafford Disaster Relief and Emergency Assistance Act in connection with Hurricanes Katrina or Rita to submit Notices of Intent and Fungibility Plans in accordance with the July 28, 2006, notice. Section 901 of the supplemental appropriations act authorizes PHAs to combine assistance provided under sections 9(d) and (e) of the United States Housing Act of 1937 (Act) and assistance provided under section 8(o) of the Act, for the purpose of facilitating the prompt, flexible, and efficient use of funds provided under these sections of the Act to assist families who were receiving housing assistance under the Act immediately prior to Hurricane Katrina or Rita and were displaced from their housing by the hurricanes. In addition to extending the PHA submission deadline, this notice removes the restriction that the combined funding may not be spent for uses under the housing choice voucher (HCV) program. If approved by HUD, the combined funding may now be used for eligible purposes under the HCV program. Any use of combined funds under the HCV program must also be in accordance with the requirement to assist those families who were receiving housing assistance under the public housing or HCV program immediately prior to Hurricane Katrina or Rita and were displaced from their housing by the hurricane. A PHA that already has an approved Fungibility Plan may request HUD approval to change the Plan in order to use the combined funds for HCV program eligible purposes. As provided in the July 28, 2006 Federal Register notice, PHAs must submit to HUD requests for approval of any substantial deviations from the approved Fungibility Plan, and HUD will respond to such requests within 10 calendar days.
DATES: Eligible PHAs must submit their Notices of Intent and Fungibility Plans no later than November 21, 2006.
FOR FURTHER INFORMATION CONTACT: For technical assistance and other questions concerning the Notice of Intent and Section 901 Fungibility Plan, PHAs should contact their local HUD Public

Housing Hub in New Orleans, Louisiana, or Jackson, Mississippi; or Bessy Kong, Deputy Assistant Secretary for Policy, Program, and Legislative Initiatives, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 4216, Washington, DC 20410–5000, telephone (202) 708–0614 or 708–0713, extension 2548 (this is not a toll-free number). Persons with hearing or speech impairments may access this number via TTY by calling the toll-free Federal Information Relay Service at (800) 877–8339.
SUPPLEMENTARY INFORMATION:
I. Background
On July 28, 2006 (71 FR 42996), HUD published a notice entitled, ‘‘Implementation Guidance for Section 901 of the Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006.’’ Section V.A. of the July 28, 2006, notice, entitled, ‘‘General Procedures for Combining Public Housing and Voucher Funds Under Section 901,’’ instructs that PHAs interested in implementing the flexibility authorized in Section 901 should submit, in writing for HUD review and approval, no later than 45 days from the date of the notice or September 11, 2006: (1) A Notice of Intent to invoke Section 901 flexibility and (2) a detailed Section 901 Fungibility Plan describing the total amount under Section 901, and the source of those funds by account (HCV, Operating Fund, Capital Fund).
Some eligible PHAs are facing circumstances that precluded submission of their Notices of Intent and Fungibility plans by September 11, 2006, and require additional time to determine whether program funds are available to combine for other program uses. Therefore, HUD has extended the period during which eligible PHAs may submit their Notices of Intent and Fungibility Plans to no later than November 21, 2006, in order to allow sufficient time for HUD to review and approve the plans. HUD strongly recommends earlier submission, if possible, in the event resubmission of plans is required because of HUD’s review determinations. HUD must approve all plans, including those that must be resubmitted, no later than December 31, 2006.
In addition to extending the PHA submission deadline, this notice removes the restriction that the combined funding may not be spent for uses under the housing choice voucher (HCV) program. If approved by HUD, the combined funding may now be used

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Exhibit F
December 11, 2007 HUD Notice of Allocations and Requirements Allocations and Requirements for the Supplemental Grant to the State of Louisiana Under Division B of the Department of Defense Appropriations Act, 2008, 72 Fed. Reg. 70,472 (Dec. 11, 2007).

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR–5183–N–01]
Allocations and Requirements for the Supplemental Grant to the State of Louisiana Under Division B of the Department of Defense Appropriations Act, 2008
AGENCY: Office of the Secretary, HUD.
ACTION: Notice of allocation and requirements.
SUMMARY: This Notice advises the public of the allocation of a $3 billion Community Development Block Grant (CDBG) disaster recovery grant to the State of Louisiana solely for the purpose of covering costs associated with otherwise uncompensated but eligible claims that were filed on or before July 31, 2007, under the Road Home homeowner compensation program administered by the State in accordance with plans approved by the Secretary. As described in the Supplementary Information section of this notice, HUD has determined that the State shall follow the requirements applicable to the other CDBG disaster recovery grants funding the Road Home homeowner compensation program, unless those requirements conflict with the requirements of section 159 of Public Law 110–116, in which case the requirements of that law apply.
DATES: Effective Date: December 11, 2007.
FOR FURTHER INFORMATION CONTACT: Jessie Handforth Kome, Director, Disaster Recovery and Special Issues Division, Office of Block Grant Assistance, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 7286, Washington, DC 20410, telephone number (202) 708– 3587. Persons with hearing or speech impairments may access this number via TTY by calling the Federal Information Relay Service at (800) 877– 8339. Fax inquiries may be sent to Ms. Kome at (202) 401–2044. (Except for the ‘‘800’’ number, these telephone numbers are not toll-free.)
SUPPLEMENTARY INFORMATION:
Program Requirements
Except as described in Public Law 110–116 and in this and other notices applicable to this grant, statutory and regulatory provisions governing the Community Development Block Grant program for states, including those at 24 CFR part 570, shall apply to the use of these funds.
The stated purpose of the supplemental appropriation is:

* * * solely for the purpose of covering costs associated with otherwise uncompensated but eligible claims that were filed on or before July 31, 2007, under the Road Home program administered by the State in accordance with plans approved by the Secretary.
The conference report clarifies that these funds are for costs associated with the Road Home homeowner compensation program and not for any other Road Home program. Public Law 110–116 further stipulates that the funds must ‘‘serve only to supplement and not supplant any other State or Federal resources committed to the Road Home program.’’
On review of Public Law 110–116, HUD has determined these funds must be used in accordance with the same CDBG disaster recovery program requirements that apply to the Road Home homeowner compensation program under law, regulation, and Notice unless those requirements conflict with the requirements of Public Law 110–116, in which case the stipulations of that supplemental law shall apply. This means, for example, that:
• The State must only use the funds for costs eligible under the Road Home homeowner compensation program under the Action Plans for Disaster Recovery (Action Plans) for the grants made under Public Laws 109–148 and 109–234, as those plans have been amended and accepted by HUD and in accordance with Public Law 110–116;
• The State may assume the responsibility for environmental review related to this grant in accordance with 24 CFR part 58;
• Because this grant is additional funding for activities included in approved Action Plans, this Notice requires that the amount of CDBG disaster recovery and State funds must remain at or above the allocations for the homeowner compensation program as of the date the law is effective until funds for the costs associated with the last eligible homeowner compensation claim are assigned by the State;
• On a quarterly basis, the State must report to HUD on the grant in the disaster recovery grant reporting system;
• The same CDBG disaster recovery financial standards and requirements apply to this grant as applied to the two preceding CDBG disaster recovery grants to the State;
• The same CDBG property disposition requirements apply to properties assisted or acquired with this grant; and
• HUD will apply the same actions to prevent fraud, waste, and abuse of funds related to this grant as it is applying to

the previous CDBG disaster recovery grants.
As noted, in general, CDBG waivers already granted to the State and alternative requirements already specified for CDBG disaster recovery grant funds provided under Public Law 109–148 and under Public Law 109–234 also apply to grant funds provided under Public Law 110–116. This eliminates unnecessary inconsistencies in administration of the three grants and, thus, reduces the opportunities for technical errors. The notices in which these prior waivers and alternative requirements appear are 71 FR 7666, published February 13, 2006 (all five states); 71 FR 34451 (for Louisiana), published June 14, 2006; 71 FR 63337, published October 30, 2006 (all five states); 72 FR 10014, published March 6, 2007 (for Louisiana); and 72 FR 48804, published August 24, 2007 (all five states). In addition to the requirements imposed by HUD, all other requirements of the Road Home homeowner compensation program shall apply to the use of these funds. Specifically, it is HUD’s understanding that the State set a deadline of December 1, 2007, for those homeowners who applied by July 31, 2007, to schedule an appointment with the Road Home program to complete the application and begin the verification process. HUD expects the State to adhere to this deadline. The State may not extend this deadline without prior HUD approval.
The Road Home homeowner compensation program includes an elevation component, which is eligible under CDBG, but was intended by the program designers to be funded primarily through a Federal Emergency Management Agency (FEMA) program. Therefore, HUD expects the State of Louisiana to continue to work constructively with FEMA to access the available Hazard Mitigation Grant Program funding for elevation activities.
The provisions of this notice do not apply to funds provided to the states under the regular CDBG program.
Allocations
Public Law 110–116 (effective November 13, 2007) provides $3 billion of supplemental appropriation for the State of Louisiana CDBG program solely for:
the purpose of covering costs associated with otherwise uncompensated but eligible claims that were filed on or before July 31, 2007, under the Road Home program administered by the State in accordance with plans approved by the Secretary.
As further provided for in Public Law 110–116, the funds may only be used to supplement and not supplant any other

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State or federal resources committed to the Road Home homeowner compensation program. No funds shall be drawn from the U.S. Treasury beyond those necessary to fulfill this exclusive purpose. To ensure compliance with this limitation, the Department will make the grant under this Notice, but will restrict the use of the grant funds in the State’s line of credit until the State has certified to HUD that all CDBG funds approved for the same purposes in the Action Plans for Disaster Recovery under each preceding CDBG disaster recovery grant (as of November 13, 2007, amounts budgeted from the grant under Public Law 109–148 equal $4,035,090,868 and those under the Public Law 109–234 grant equal $2,955,361,750), along with the $372.5 million of additional state-appropriated funds pledged to the Road Home homeowner compensation program, have already been assigned by the State for eligible costs under that program. The State will demonstrate this assignment by documenting payment requests from its contractor for costs associated with Option 1 claims that have already closed or for costs associated with Option 2 or 3 claims that are scheduled for closing. The payment requests must document costs associated with homeowner compensation claims that are sufficient to exhaust funds budgeted for homeowner compensation in the Public Law 109–148 and Public Law 109–234 grants and the $372.5 million in cash budgeted by the State. On receiving the signed certification from the State, HUD will permit drawdowns under this grant to commence. This assignment and certification process will allow HUD and the State to comply with the law without slowing the flow of funds to homeowners and without undue burden to the State program administrators. HUD will monitor compliance with this direction and may be compelled to disallow expenditures if it finds uses of funds are not in compliance with this provision.
Prevention of Fraud, Abuse, and Duplication of Benefits
The previous supplemental appropriations statutes (Public Laws 109–148 and 109–234) also directed the Secretary to:
Establish procedures to prevent recipients from receiving any duplication of benefits and report quarterly to the Committees on Appropriations with regard to all steps taken to prevent fraud and abuse of funds made available under this heading including duplication of benefits.
The grant under this Notice will be subject to the courses of action HUD is

already undertaking for the two previous grants to the State. To meet this directive, HUD is pursuing five courses of action. First, this Notice makes applicable specific reporting, written procedures, monitoring, and internal audit requirements for grantees. Second, to the extent its resources allow, HUD will institute risk analysis and on-site monitoring of grantee management of the grants and of the specific uses of funds. Third, HUD will be extremely cautious in considering any waiver related to basic financial management requirements. HUD’s standard, time-tested CDBG financial requirements will continue to apply. Fourth, HUD is collaborating with the HUD Office of Inspector General to plan and implement oversight of these funds. Fifth, HUD is applying $6 million for immediate enhancement of the capabilities of the Disaster Recovery Grant Reporting system by building additional electronic controls to increase accountability while further decreasing the risk of fraud, waste, or abuse of funds.
Application for Allocation
The general requirements related to a state’s application for its allocation are those delineated in a notice entitled, ‘‘Allocations and Common Application and Reporting Waivers Granted to and Alternative Requirements for CDBG Disaster Recovery Grantees Under the Department of Defense Appropriations Act, 2006,’’ published February 13, 2006, at 71 FR 7666. HUD invites the State of Louisiana to submit an application, including a Standard Form 424 and the appropriate CDBG disaster recovery certifications as listed in that Notice. Public Law 110–116 stipulates that this grant is governed by the State’s Action Plans for the Road Home homeowner compensation program. Adding the additional program funding constitutes an amendment to the program covered by these plans, but because of the specificity of the law regarding the uses of funds, HUD has determined that the Action Plans taken together are drafted so that this funding increase, large as it is, does not meet the substantial amendment definition in the Notice cited above.
Applicable Rules, Statutes, Waivers, and Alternative Requirements
1. General requirements. Except as described in this Notice, the statutory, regulatory, and notice provisions that shall apply to the use of these funds are:
a. Those governing the funds appropriated under the Appropriations Act and already published in the Federal Register, including those in

notices 71 FR 7666, published February 13, 2006 (for all five states); 71 FR 34451 (for Louisiana), published June 14, 2006; 71 FR 63337, published October 30, 2006 (all five states); 72 FR 10014, published March 6, 2007 (for Louisiana); and 72 FR 48804, published August 24, 2007 (all five states); and
b. Those governing the CDBG program for states, including those at 42 U.S.C. 5301 et seq. and 24 CFR part 570.
c. In addition to the requirements imposed by HUD, all other requirements of the Road Home homeowner compensation program shall apply to the use of these funds. Specifically, it is HUD’s understanding that the State set a deadline of December 1, 2007, for those homeowners who applied by July 31, 2007, to schedule an appointment with the Road Home program to complete the application and begin the verification process. HUD expects the State to adhere to this deadline. The State may not extend this deadline without prior HUD approval.
2. Use of grant funds. a. Public Law 110–116 requires that activities funded under this Notice be used solely for the purpose of covering costs associated with otherwise uncompensated but eligible claims that were filed on or before July 31, 2007 under the Road Home homeowner compensation program administered by the State in accordance with its CDBG Action Plans. To the extent that the requirements of Public Law 110–116 conflict with the requirements listed in paragraph 1 of this Notice, the requirements of Public Law 110–116 will apply. b. Further, grant funds must serve only to supplement and not supplant any other state or federal resources committed to the Road Home program. Before the Department will permit the State to draw down grant funds, the State must certify to HUD, in writing, that all CDBG funds approved for the same purposes in the Action Plans under the grants made under Public Laws 109–148 and 109–234 and the $372.5 million in additional state funds pledged to the Road Home homeowner compensation program already have been assigned or expended by the State for costs associated with the homeowner compensation program. The State will demonstrate the assignment of funds by documenting payment requests from the contractor for costs associated with Option 1 claims that have already closed or for costs associated with Option 2 or 3 claims that are scheduled for closing. The payment requests must document total costs associated with homeowner compensation claims that are sufficient to exhaust funds budgeted

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for homeowner compensation in the Public Law 109–148 and Public Law 109–234 grants and the $372.5 million in cash budgeted by the State. On receiving the signed certification from the State, HUD will permit the State to begin making draw downs under this grant.
c. The amount of CDBG disaster recovery funds budgeted for the homeowner compensation program must remain at or above the current Actions Plan allocations for the homeowner compensation program as of the date the law is effective until the costs associated with the last eligible homeowner compensation claim are assigned.
3. De-obligation of unused grant funds. If grant funds under Public Law 110–116 remain after all costs associated with Road Home homeowner compensation claims that were filed on or before July 31, 2007, have been paid,

those remaining funds shall be deobligated by HUD.
4. Information collection approval note. HUD has approval for information collection requirements in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520) under Office of Management and Budget (OMB) control number 2506–0165 . In accordance with the Paperwork Reduction Act, HUD may not conduct or sponsor, nor is a person required to respond to, a collection of information unless the collection displays a valid control number.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance numbers for the disaster recovery grants under this Notice are as follows: 14.219; 14.228.
Finding of No Significant Impact
A Finding of No Significant Impact (FONSI) with respect to the

environment has been made in accordance with HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332). The FONSI is available for public inspection between 8 a.m. and 5 p.m. weekdays in the Office of the Rules Docket Clerk, Office of General Counsel, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 10276, Washington, DC 20410–0500. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the finding by calling the Regulations Division at (202) 708–3055 (this is not a toll-free number).
Dated: December 5, 2007.
Roy A. Bernardi,
Deputy Secretary.
[FR Doc. E7–24002 Filed 12–10–07; 8:45 am]
BILLING CODE 4210–67–P

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Exhibit G
August 8, 2008 HUD Notice of Reconsideration of Waivers Reconsideration of Waivers Granted to and Alternative Requirements for Community Development Block Grant Disaster Recovery Grantees Under Public Laws 109–148 and 109–234,73 Fed. Reg. 46,312 (Aug. 8, 2008).

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Naval Base Point Loma CA Landholding Agency: Navy Property Number: 77200830012 Status: Unutilized Reasons: Secured Area
New York
Bldg. 913T Brookhaven Natl Laboratory Upton NY 11973 Landholding Agency: Energy Property Number: 41200830001 Status: Unutilized Reasons: Extensive deterioration; Secured
Area; Within 2000 ft. of flammable or explosive material
Ohio
National Guard Facility 1512 Oak Harbor Rd. Fremont OH 43420 Landholding Agency: GSA Property Number: 54200830006 Status: Excess GSA Number: 1–D–OH–834 Reasons: Within 2000 ft. of flammable or
explosive material
Unsuitable Properties
Building
Utah
Bldg. 00143 Tooele Army Depot Tooele UT 84074 Landholding Agency: Army Property Number: 21200830002 Status: Unutilized Reasons: Extensive deterioration
Virginia
Bldgs. NH–18, NH–21 Naval Support Activity Norfolk VA 23551 Landholding Agency: Navy Property Number: 77200830014 Status: Excess Reasons: Extensive deterioration; Secured
Area
Bldg. 100 Naval Support Activity Lafayette River Annex Norfolk VA 23551 Landholding Agency: Navy Property Number: 77200830015 Status: Excess Reasons: Extensive deterioration; Secured
Area
Unsuitable Properties
Land
North Carolina
0.23 acres Marine Corps Base Camp Lejeune NC Landholding Agency: Navy Property Number: 77200830013 Status: Unutilized Reasons: Secured Area [FR Doc. E8–18181 Filed 8–7–08; 8:45 am]
BILLING CODE 4210–67–P

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR–5224–N–01]
Reconsideration of Waivers Granted to and Alternative Requirements for Community Development Block Grant Disaster Recovery Grantees Under Public Laws 109–148 and 109–234
AGENCY: Office of the Secretary, HUD. ACTION: Notice.
SUMMARY: This Notice reconsiders and generally affirms the waivers made under the three ‘‘common’’ Notices governing grant funds for Community Development Block Grant (CDBG) disaster recovery grants for the purpose of assisting in the recovery in the most impacted and distressed areas related to the consequences of Hurricanes Katrina, Rita, and Wilma in the Gulf of Mexico in 2005. These prior notices were published in the Federal Register on February 13, 2006, October 30, 2006, and August 24, 2007. The Notice published today addresses the purpose and use of these funds, while highlighting unique components of the three notices and noting any changes made by HUD as the result of the required reconsideration of the waivers. For the most part, HUD is repeating or restating the original explanatory text so that grantees and program administrators may continue to have the explanation of a changed requirement and the requirement itself in a single document.
DATES: Effective Date: August 8, 2008. FOR FURTHER INFORMATION CONTACT: Jessie Handforth Kome, Director, Disaster Recovery and Special Issues Division, Office of Block Grant Assistance, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 7286, Washington, DC 20410, telephone number 202–708– 3587. Persons with hearing or speech impairments may access this number via TTY by calling the Federal Information Relay Service at 800–877– 8339. Fax inquiries may be sent to Ms. Kome at 202–401–2044. (Except for the 800 number, these telephone numbers are not toll-free.) SUPPLEMENTARY INFORMATION:
Authority To Grant Waivers
The Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006 (Pub. L. 109–148, approved December 30, 2005) (Appropriations Act) appropriated $11.5 billion, and Chapter 9 of Title II of the

Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006 (Pub. L. 109–234, approved June 15, 2006), appropriated $5.2 billion for a combined total of $16.7 billion in CDBG funds for necessary expenses related to disaster relief, long-term recovery, and restoration of infrastructure directly related to the consequences of the covered disasters. These 2006 Acts (collectively ‘‘the supplemental Acts’’) authorize the Secretary to waive, or specify alternative requirements for, any provision of any statute or regulation that the Secretary administers in connection with the obligation by the Secretary or by the five eligible states’ use of these funds, except for requirements related to fair housing, nondiscrimination, labor standards, and the environment, upon a request by one of the five states and a finding by the Secretary that such a waiver would not be inconsistent with the overall purpose of the statute. The difference between the waiver authorizations in the supplemental Acts is that Public Law 109–148 directs that the Secretary ‘‘shall’’ make the waivers in response to a state’s request and a consistency finding, while Public Law 109–234 states that the Secretary ‘‘may’’ make such waivers.
This Notice reconsiders and generally affirms the waivers made under the three ‘‘common’’ Notices governing grant funds for CDBG disaster recovery grants for the purpose of assisting in the recovery in the most impacted and distressed areas related to the consequences of Hurricanes Katrina, Rita, and Wilma in the Gulf of Mexico in 2005. These prior notices were published in the Federal Register on February 13, 2006 (71 FR 7666), October 30, 2006 (71 FR 63337), and August 24, 2007 (72 FR 48804). The reconsideration of the February 13, 2006, Notice is required at this time. HUD is reconsidering the October 30, 2006, and August 24, 2007, Notices earlier than required by statute because publication of all common waivers and alternative requirements in a single Notice will produce a more sensible administrative and regulatory result.
The following waivers and alternative requirements for funds provided under either 2006 Act are in response to requests from all five states receiving CDBG disaster recovery grants under those Acts. In accordance with the states’ earlier requests for administrative consistency to the extent feasible (noted in 71 FR 63337, published October 30, 2006), each waiver or alternative requirement will apply to assistance

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provided under either Act wherever appropriate and possible.
After reconsideration, the Secretary affirms that the following waivers and alternative requirements, as described below, are not inconsistent with the overall purpose of Title I of the Housing and Community Development Act of 1974, as amended, or the CranstonGonzalez National Affordable Housing Act, as amended.
Under the requirements of the Department of Housing and Urban Development Reform Act of 1989 (the HUD Reform Act), as amended 42 U.S.C. 3535(q), regulatory waivers must be justified and published in the Federal Register.
Further, the supplemental Acts direct the Secretary to publish in the Federal Register any waiver (or reconsideration thereof) of any statute or regulation that the Secretary administers pursuant to Title I of the Housing and Community Development Act of 1974, no later than 5 days before the effective date of such waiver.
Except as described in this and other notices applicable to these grants, statutory and regulatory provisions governing the CDBG program for states, including those at 24 CFR part 570, shall apply to the use of these funds. In accordance with the supplemental Acts, HUD is reconsidering every published waiver 2 years from its date of publication.

Allocations
The supplemental Acts provide a combined total of $16.7 billion for the CDBG program for:
Necessary expenses related to disaster relief, long-term recovery, and restoration of infrastructure in the most impacted and distressed areas related to the consequences of Hurricanes Katrina, Rita, or Wilma in the Gulf of Mexico in 2005.
The $11.5 billion allocation appropriated under Public Law 109–148 is also discussed and expanded upon in the conference report (H.R. Rep. No. 109–359). The conference agreement included $11.5 billion for necessary expenses related to disaster relief, longterm recovery, restoration of infrastructure, and mitigation in communities in any declared disaster area in Louisiana, Mississippi, Alabama, Florida, and Texas related to Hurricanes Katrina, Rita, or Wilma. The conference agreement emphasizes the requirement that the states with the most impacted and distressed areas in connection with the Gulf of Mexico hurricanes receive priority consideration in the allocation of funds by HUD.
Public Law 109–148 further states: That funds provided under this heading shall be administered through an entity or entities designated by the Governor of each state. And that no state shall receive more than 54 percent of the amount provided under this heading. Public Law 109–234 also states:

That funds provided under this heading shall be administered through an entity or entities designated by the Governor of each state. And that no state shall receive more than $4.2 billion of the amount provided under this heading.
As provided for in Public Law 109– 148 and Public Law 109–234, the funds may not be used for activities reimbursable by or for which funds are made available by the Federal Emergency Management Agency (FEMA) or the Army Corps of Engineers. Further, none of the funds made available under Public Law 109–234 may be used by a state or locality as a matching requirement, share, or contribution for any other federal program.
Also as required by Public Law 109– 234, not less than $1.0 billion of the $5.2 billion appropriation (which computes to 19.3311 percent of any state’s allocation, excluding $27.0 million in administrative set-asides) shall be used for repair, rehabilitation, and reconstruction (including demolition, site clearance, and remediation) of the affordable rental housing stock (including public and other HUD-assisted housing) in the impacted areas. Therefore, HUD requires that not less than 19.3311 percent of each state’s grant under Public Law 109–234 be used for these activities.
The allocations from Public Law 109– 148 are as follows:

TABLE 1—FEBRUARY 13, 2006, DISASTER RECOVERY ALLOCATION

State

Disaster

Allocation amount
($)

Alabama ..................... Florida ........................ Louisiana .................... Mississippi .................. Texas .........................

Hurricane Katrina (FEMA–1605–DR) ..................................................................................................... Hurricane Katrina (FEMA–1602–DR), Hurricane Wilma (FEMA–1609–DR) .......................................... Hurricane Katrina (FEMA–1603–DR), Hurricane Rita (FEMA–1607–DR) ............................................. Hurricane Katrina (FEMA–1604–DR) ..................................................................................................... Hurricane Rita (FEMA–1606–DR) ..........................................................................................................

74,388,000 82,904,000 6,210,000,000 5,058,185,000 74,523,000

The allocations from the supplemental appropriation, as

provided for in Public Law 109–234, are as follows:

TABLE 2—OCTOBER 30, 2006, DISASTER RECOVERY SUPPLEMENTAL ALLOCATION

State

Disaster

Allocation amount
($)

Minimum amount for affordable rental housing ($)

Alabama .................... Florida ........................ Louisiana ................... Mississippi ................. Texas .........................

Hurricane Katrina (FEMA–1605–DR) ...................................................................... Hurricane Katrina (FEMA–1602–DR), Hurricane Wilma (FEMA–1609–DR) .......... Hurricane Katrina (FEMA–1603–DR), Hurricane Rita (FEMA–1607–DR) .............. Hurricane Katrina (FEMA–1604–DR) ...................................................................... Hurricane Rita (FEMA–1606–DR) ...........................................................................

21,225,574 100,066,518 4,200,000,000 423,036,059 428,671,849

4,103,146 19,344,001 811,907,984 81,777,703 82,867,166

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The amounts in Table 2 include the minimum amount of the allocations each state is required to use, pursuant to Public Law 109–234, for repair, rehabilitation, and reconstruction (including demolition, site clearance, and remediation) of the affordable rental housing stock (including public and other HUD-assisted housing) in the impacted areas.
In the case of Louisiana, the Department reviewed data chronicling the massive impact of the disasters on affordable rental housing, including public housing, in the areas of the state most affected by the disasters. In light of the state’s unprecedented housing needs resulting from the disasters, the Secretary gave priority to affordable rental housing through an alternative requirement on the grant under Public Law 109–234. Under a prior Notice, HUD required that before the state of Louisiana expended any funds to meet the minimum requirement for affordable rental housing (see table above), the Governor of Louisiana had to demonstrate to the Secretary’s satisfaction that the state will provide funds or has identified dedicated resources sufficient to meet the key disaster recovery needs for repair, rehabilitation, and reconstruction of affordable rental housing stock, including public housing, in the most impacted areas of the state. This notice continues the requirement to ensure that any fund reprogramming continues to prioritize such housing.
Pursuant to this Notice, HUD continues to invite each of the five states to submit an Action Plan for Disaster Recovery in accordance with prior Notices.
The supplemental Acts require that funds be used only for disaster relief, long-term recovery, and restoration of infrastructure in the most impacted and

distressed areas related to the consequences of hurricanes in the Gulf of Mexico in 2005. The supplemental Acts direct that each grantee describe in its Action Plan for Disaster Recovery how the use of the grant funds gives priority to infrastructure development and the rehabilitation and reconstruction of the affordable rental housing stock, including public and other HUD-assisted housing. HUD monitors compliance with this direction and may be compelled to disallow expenditures if it finds that uses of funds are not disaster-related, or that funds allocated duplicate other benefits. HUD encourages grantees to contact their assigned HUD offices for guidance in complying with these requirements during development of their Action Plans for Disaster Recovery and any amendments or if they have any questions regarding meeting these requirements.
For the state of Louisiana, which suffered major impacts from two of the hurricanes, HUD estimated that more than 85 percent of the major and severe damage due to those storms was in the New Orleans-Metairie-Bogalusa Metropolitan Area (Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. John the Baptist, and St. Tammany parishes). HUD, therefore, expects the state to target a substantial majority of its disaster recovery funds under Public Law 109–234 toward the disaster recovery needs in the New OrleansMetairie-Bogalusa Metropolitan Area, and included an alternative requirement to that effect.
Prevention of Fraud, Abuse, and Duplication of Benefits
The supplemental Acts also directed the Secretary to: Establish procedures to prevent recipients from receiving any duplication of benefits and report quarterly to the

Committees on Appropriations with regard to all steps taken to prevent fraud and abuse of funds made available under this heading, including duplication of benefits.
To meet this directive, HUD has taken five courses of action. First, HUD established by Notice specific reporting, written procedures, monitoring, and internal audit requirements for grantees. Second, to the extent that its resources allowed, HUD instituted risk analysis and on-site monitoring of grantee management of the grants and of the specific uses of funds. Third, HUD has been extremely cautious in considering any waiver related to basic financial management requirements. The standard, time-tested CDBG financial requirements will continue to apply to future waiver requests. Fourth, HUD collaborated with the HUD Office of Inspector General to plan and implement oversight of these funds. Fifth, HUD followed the direction of the conference report for Public Law 109– 494 and applied $6 million of funds appropriated for the Working Capital Fund for ‘‘immediate enhancement of the capabilities of the Disaster Recovery Grant Reporting system by building additional electronic controls that are intended to increase accountability while further decreasing the risk of fraud, waste, or abuse.’’
Waiver Justification
In general, waivers already granted to the states of Alabama, Florida, Louisiana, Mississippi, and Texas and alternative requirements already specified for CDBG disaster recovery grant funds provided under the supplemental Acts apply unless determined to be excepted or limited under this Notice. The notices in which these prior waivers and alternative requirements appear are shown in the table below.

Notice

Date

Applicability

71 FR 7666, FR–5051–N–01 ................... 71 FR 34448, FR–5051–N–02 ................. 71 FR 34451, FR–5051–N–04 ................. 71 FR 34457, FR–5051–N–03 ................. 71 FR 43622, FR–5051–N–05 ................. 71 FR 51678, FR–5051–N–06 ................. 71 FR 62372, FR 5051–N–07 .................. 71 FR 63337, FR–5089–N–01 ................. 72 FR 10014, FR–5089–N–03 ................. 72 FR 10020, FR–5089–N–04 ................. 72 FR 48804, FR–5089–N–05 ................. 72 FR 48808, FR–5051–N–08 ................. 72 FR 61788, FR–5051–N–09 ................. 72 FR 70472, FR–5183–N–01 .................

02/13/2006 06/14/2006 06/14/2006 06/14/2006 08/01/2006 08/30/2006 10/24/2006 10/30/2006 03/06/2007 03/06/2007 08/24/2007 08/24/2007 10/31/2007 12/11/2007

Common Allocation/Application for $11.5 billion. State of Alabama. State of Louisiana. State of Mississippi. State of Texas. State of Florida. State of Mississippi. Common Allocation/Application, and Applicability of Prior Waivers for $5.2 billion. State of Louisiana. State of Mississippi. Common waiver of Section 414 of the Stafford Act and alternative requirements. State of Mississippi. State of Mississippi. State of Louisiana for $3 billion.

The provisions of this Notice do not apply to funds provided under the

regular CDBG program or other HUD or provisions provide additional flexibility

federally funded programs. The

in program design and implementation

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and implement statutory requirements unique to these appropriations.
Section 414 of the Stafford Act
The states requested and were granted a waiver of Section 414 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, as amended, for all their disaster recovery programs. Section 414 requires special measures that are designed to assist the efforts of the five states in expediting the rendering of aid and emergency services and in the reconstruction and rehabilitation of devastated areas, as necessary. In addition, the Secretary provided alternative requirements more consistent with the purpose of the supplemental Acts, which have assisted and supported disaster recovery in the areas most impacted by the effects of the three 2005 Gulf hurricanes. Hurricanes Katrina, Rita, and Wilma resulted in unprecedented destruction in the Gulf states, which will continue to require reconstruction for many years (and possibly decades) to come. The Department surveyed other federal agencies’ administration of Section 414 and found varying interpretations for long-term, post-disaster projects involving the acquisition, rehabilitation, or demolition of disaster-damaged housing. The five states have also launched programs, such as rental rehabilitation, that could be affected by this statute if a clear direction to restore affordable rental housing to the devastated areas is not realized. Therefore, to avoid possible risk to the recovery effort by further delay in providing the states with a definitive answer, the Department issued a partial statutory waiver and specified alternative requirements. HUD is continuing this statutory waiver by this Notice because affordable housing programs are under way in all five of the states that rely on this waiver and alternative requirements. For programs or projects covered by this waiver (‘‘covered programs or projects’’) that are initiated within 3 years after the applicable disaster, an affected state must select one of the two alternative requirements specified in 72 FR 48804 and restated in this Notice.
Alternative One
The state may provide relocation assistance to a former residential occupant whose former dwelling is acquired, rehabilitated, or demolished for a covered program or project initiated within 3 years after the disaster, even though the actual displacements were caused by the effects of the disaster. To the extent practicable, such relocation assistance

must be offered in a manner consistent with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, (URA) and its implementing regulations, except as modified by applicable waivers and alternative requirements.
Alternative Two
If the state determines that the first alternative would substantially conflict with meeting the disaster recovery purposes of the supplemental Acts, the state may establish a re-housing plan for a covered program or project initiated within 3 years after the disaster. Such determinations must be made on a program or project basis (not person or household). The re-housing plan must include, at minimum, the following:
1. A description of the class(es) of persons eligible for assistance, including all persons displaced from their residences by particular enumerated, or all, effects of the disaster, and including all persons still receiving temporary housing assistance from FEMA for the covered disaster(s);
2. A description of the types and amount of financial assistance to be offered, if any;
3. A description of other services to be made available, including, at minimum, outreach efforts to eligible persons and housing counseling providing information about available housing resources. Outreach efforts and housing counseling information should be provided in languages other than English to persons with limited English proficiency; and
4. Contact information and a description of any applicable application process, including any deadlines.
5. If the program or project involves rental housing, the re-housing plan must also include the following:
(i) Placement services for former and prospective tenants;
(ii) A public registry of available rental units assisted with CDBG disaster recovery and/or other funds; and
(iii) A description of application materials, award letters, and operating procedures requiring property owners to make reasonable attempts to contact their former residential tenants and offer them a unit upon completion if they meet the program’s eligibility requirements.
Justification for Waiver
This section of the Notice describes the basis for granting the section 414 waivers represented by the states in their requests. The principal reasons are highlighted here:

• Hurricanes Katrina, Rita, and Wilma caused unprecedented destruction in the Gulf Coast region. The magnitude of destruction resulted in massive displacements and decimated the region’s affordable housing stock. Continued ambiguity on Section 414’s applicability may cause substantial delays in long-term recovery along the Gulf Coast, particularly in Louisiana, Mississippi, and Texas;
• URA assistance may duplicate insurance proceeds and federal, state, or local housing assistance that has already been disbursed; and
• The opportunity to simplify the administration of disaster recovery projects or programs initiated years following the disaster.
Persons in physical occupancy who are displaced by a HUD-assisted disaster recovery project will continue to be eligible for URA assistance. Persons displaced by the effects of the disaster may continue to apply for assistance under the states’ approved disaster recovery programs, which are designed to bring affordable housing to the affected areas. This waiver does not address programs or projects receiving other HUD funding, or funding from other federal sources.
A state may already be performing some elements of a re-housing plan, such as providing a public rental registry or undertaking outreach and placement services to those former residents still receiving FEMA housing assistance. Description in the re-housing plan of how those existing efforts will be available for covered programs or projects may be used in satisfying the requirements of this Notice. These waivers and alternative requirements streamline the pre-grant process and set the guidelines for a state’s application for allocations.
Application for Allocations Under Public Laws 109–148 and 109–234
Overall benefit to low- and moderateincome persons. Pursuant to explicit authority in the supplemental Acts, HUD granted an overall benefit waiver that allows for up to 50 percent of the grants to assist activities under the urgent need or under the prevention or elimination of slums and blight national objectives, rather than the 30 percent allowed in the annual state CDBG program. The primary objective of Title I of the Housing and Community Development Act of 1974 and of the funding program of each grantee is ‘‘development of viable urban communities, by providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of

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low and moderate income.’’ The statute goes on to set the standard of performance for this primary objective for the annual CDBG program at 70 percent of the aggregate of the funds used for support of activities producing benefit to low- and moderate-income persons. Because extensive damage to community development and housing affected those with varying incomes, and the hardest-hit grantees have designed their programs to take advantage of this waiver, HUD is retaining the waiver of the 70 percent overall benefit requirement and leaving the 50 percent requirement, in order to give grantees continued flexibility to carry out recovery activities within the confines of the CDBG program national objectives. HUD may provide additional waivers of this requirement only if it makes a finding of compelling need. The requirement that each activity meet one of the three national objectives is not waived. HUD did reconsider, but is not altering this waiver. The states have already budgeted the vast majority of the funds under the terms of the initial waiver. Changing the waiver and alternative requirement now might be counter-productive to the recovery efforts across the Gulf Coast and, most particularly, in Louisiana. The state of Mississippi has been granted additional overall benefit waivers and alternative requirements as published in Notices other than the three under reconsideration in the current Notice. The first of Mississippi’s other Notices is scheduled for reconsideration in June 2008.
Expanded distribution and direct action. The waivers and alternative requirements allowing distribution of funds by a state to entitlement communities and Indian tribes, and to allow a state to carry out activities directly rather than distribute all funds to units of local government, are consistent with waivers granted for previous similar disaster recovery cases. HUD believes that, in recommending the Lower Manhattan Development Corporation (LMDC) as a model and in increasing the administrative cap, Congress is signaling its intent that the states under this appropriation also be able to carry out activities directly. Therefore, HUD waived and continues its waiver of certain program requirements to support direct implementation of activities by the states. HUD stated in prior Notices and restates in this Notice the necessary complementary waivers and alternative requirements related to subrecipients to ensure proper management and

disposition of funds during the grant execution and at closeout.
Consistency with the consolidated plan. HUD waived the requirement for consistency with the consolidated plan priorities because the effects of a major disaster usually alter a grantee’s priorities for meeting housing, employment, and infrastructure needs. To emphasize that uses of grant funds must be consistent with the overall purposes of the Housing and Community Development Act of 1974, HUD requires the scope of the waiver to be consistent with the consolidated plan; the waiver applies only until the grantee first updates its consolidated plan priorities following the disaster. Because of limited data availability or staff resources, not all grantees have completely updated their consolidated plans. Therefore, HUD is continuing this waiver.
Action Plan for Disaster Recovery. HUD waived the CDBG action plan requirements and substituted an Action Plan for Disaster Recovery. HUD is continuing this waiver and restates the Action Plan for Disaster Recovery requirements under this Notice. This waiver allowed for rapid implementation of disaster recovery grant programs and ensured conformance with provisions of the supplemental Acts. Where possible, the Action Plan for Disaster Recovery, including certifications, does not repeat common action plan elements that the grantee already committed to carry out as part of its annual CDBG submission. Although a state as the grantee may designate an entity or entities to administer the funds, the state is responsible for compliance with federal requirements. During the course of these grants, HUD is monitoring the states’ uses of funds and their actions for consistency with the Action Plan. A state may submit an initial, partial Action Plan and amend it one or more times subsequently until the Action Plan describes uses for the combined total grant amount. A state may also amend activities in its Action Plan.
The following new elements to a state’s Action Plan for Disaster Recovery apply only to the supplemental funds allocated under Public Law 109–234:
These elements include a description of how the state gives priority to infrastructure development and rehabilitation and how the state gives priority to the rehabilitation and reconstruction of the affordable rental housing stock, including public and other HUD-assisted housing. The state must explain how its choices for the use of funds will result in the state meeting the requirement to use not less than

19.3311 percent of its allocation under Public Law 109–234 for repair, rehabilitation, and reconstruction (including demolition, site clearance, and remediation) of the affordable rental housing stock (including public and other HUD-assisted housing) in the impacted areas. The explanation should include how the state has considered the unique challenges that individuals with disabilities face in finding accessible and affordable housing.
Citizen participation. The citizen participation waiver and alternative requirements permit a more streamlined public process, but one that still provides for reasonable public notice, appraisal, examination, and comment on the CDBG disaster recovery grant fund activities. The waiver removes the requirement at both the grantee and state grant recipient levels for public hearings or meetings as the method for disseminating information or collecting citizen comments. Instead, grantees are encouraged to employ innovative methods to communicate with citizens and solicit their views on proposed uses of disaster recovery funds, and to indicate in the Action Plan how the grantee has addressed these views. After reconsidering this waiver, HUD decided to leave it in place because the need for speedy decision-making is still necessary in some of the states. However, HUD is providing guidance that, as time since the hurricanes elapses, HUD expects grantees to provide for increased time for public comments and for provision of public hearings related to amendments to the Action Plan whenever hearings are administratively feasible. HUD notes that most grantees are making good use of the Internet to provide disaster recovery information on plan amendments and resources for their citizens, and HUD expects this practice will continue.
Administration limitation. State program administration requirements must be modified to be consistent with the Appropriations Act, which allows up to 5 percent of the grant to be used for the state’s administrative costs. The provisions at 42 U.S.C. 5306(d) and 24 CFR 570.489(a)(1)(i) and (iii) will not apply to the extent that they cap state administration expenditures and require a dollar-for-dollar match of state funds for administrative costs exceeding $100,000. HUD does not waive 24 CFR 570.489(a)(3) to allow the state to exceed the overall planning, management, and administrative cap of 20 percent.

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Use of Subrecipients
The state CDBG program rule does not make specific provision for the treatment of the entities called ‘‘subrecipients’’ in the CDBG entitlement program. The waiver allowing a state to carry out activities directly creates a situation in which the state may use subrecipients to carry out activities in a manner similar to entitlement communities. HUD and its Office of Inspector General have long identified the use of subrecipients as a practice that increases the risk of abuse of funds. HUD’s experience is that this risk can be successfully managed by adhering to the CDBG entitlement requirements and related guidance. Therefore, HUD requires that a state taking advantage of the waiver allowing it to carry out activities directly must follow the alternative requirements that are drawn from the CDBG entitlement rule and specified in this Notice, when using subrecipients.
Reporting
HUD waives the annual reporting requirement because Congress requires quarterly reports from the grantees and from HUD on various aspects of the uses of funds and of the activities funded with these grants. Many of the data elements the grantees will report to Congress quarterly are the same as those that HUD uses to exercise oversight for compliance with the requirements of this Notice and for prevention of fraud, abuse of funds, and duplication of benefits. To collect these data elements and to meet its reporting requirements, HUD requires each grantee to report to HUD quarterly using the online Disaster Recovery Grant Reporting system. HUD uses grantee reports to monitor for anomalies or performance problems that suggest fraud, abuse of funds, and duplication of benefits; to reconcile budgets, obligations, fund draws, and expenditures; to calculate applicable administrative and public service limitations and the overall percent of benefit to low- and moderate-income persons; and to establish a basis for risk analysis in determining a monitoring plan.
Originally, HUD’s guidance was that after HUD reviews each report and accepts a report, the grantee must post the report on an Internet site with public access for its citizens. On reconsideration, HUD is requiring grantees to post each report as it is submitted. After HUD reviews the report, the grantee may also post the reviewed version, if HUD makes any changes. If a grantee chooses, it may use its report, together with a statement

regarding any sole source procurements, as its required quarterly submission to the Committees on Appropriations. Each quarter, HUD will submit to the Committees a summary description of its report reviews, of other HUD monitoring and technical assistance activities undertaken during the quarter, and of any significant conclusions related to fraud, abuse of funds, or duplication of benefits.
Certifications
HUD waived the standard certifications and substituted alternative certifications. The alternative certifications are tailored to CDBG disaster recovery grants and remove certifications and references that are redundant or appropriate to the annual CDBG formula program.
Applicable Rules, Statutes, Waivers, and Alternative Requirements
The following discussion is comprised of two parts: a common section that applies to Federal Register notices 71 FR 7666, 71 FR 63337, and 72 FR 48804, and a unique section that highlights components of these three notices that are different.
Common Section
1. General note. Prerequisites to a grantee’s receipt of CDBG disaster recovery assistance include adoption of a citizen participation plan; publication of its proposed Action Plan for Disaster Recovery; public notice and comment; and submission to HUD of an Action Plan for Disaster Recovery, including certifications. Except as described in this Notice, the statutory, regulatory, and notice provisions that shall apply to the use of these funds are:
a. The state-specific Notices governing the funds appropriated under Public Law 109–148 and Public Law 109–234 (the supplemental Acts) and already published in the Federal Register;
b. Those governing the CDBG program for states, including those at 42 U.S.C. 5301 et seq. and 24 CFR part 570.
2. Overall benefit waiver and alternative requirement. The requirements at 42 U.S.C. 5301(c), 42 U.S.C. 5304(b)(3)(A), and 24 CFR 570.484 that at least 70 percent of funds are for activities that benefit low- and moderate-income persons are waived to stipulate that at least 50 percent of disaster recovery grant funds from each grant must assist activities that principally benefit low- and moderateincome persons.
3. Section 414 of the Stafford Act waiver and alternative requirements.
a. Section 414 of the Stafford Act, 42 U.S.C. 5181 (including its implementing

regulation at 49 CFR 24.403(d)), is waived to the extent that it would apply to CDBG disaster recovery-funded programs or projects initiated at least one year after the incident-date of Hurricane Katrina, Rita, or Wilma (as applicable) by the states of Alabama, Florida, Louisiana, Mississippi, and Texas under an approved Action Plan for Disaster Recovery for its grants under Public Law 109–148 or Public Law 109–234; provided that such program or project was not planned, approved, or otherwise under way prior to the disaster.
b. For all programs or projects covered by this waiver (‘‘covered programs or projects’’) that are initiated at least one year after but within no more than 3 years after the applicable disaster, the states of Alabama, Florida, Louisiana, Mississippi, and Texas must comply with one of the following two alternative requirements (for programs or projects initiated after the 3-year period, the alternative requirements would not apply; only the waiver would be applicable):
1. Relocation Assistance. The state may provide relocation assistance to a former residential occupant whose former dwelling is acquired, rehabilitated, or demolished for a covered program or project initiated within 3 years after the disaster, even though the actual displacements were caused by the effects of the disaster. To the extent practicable, such relocation assistance must be offered in a manner consistent with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, and its implementing regulations, except as modified by prior waivers and alternative requirements granted to the states.
2. Re-housing Plan. If the state determines that the first alternative would substantially conflict with meeting the disaster recovery purposes of the supplemental Acts, the grantee may establish a re-housing plan for a covered program or project initiated at least one year after, but within no more than 3 years after, the disaster. Such a determination must be made on a program or project basis (not person or household). The re-housing plan must include, at minimum, the following:
i. A description of the class(es) of persons eligible for assistance, including all residents displaced from their residences by either certain enumerated or all effects of the covered disaster, and including all disaster-displaced residents still receiving temporary housing assistance from FEMA for the covered disasters;

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ii. A description of the types and amount of financial assistance to be provided, if any;
iii. A description of other services to be made available, including, at a minimum, outreach efforts to eligible persons and housing counseling that provide information about available housing resources;
iv. Contact information for additional program information;
v. A description of any applicable application process, including any deadlines; and
vi. If the program or project covered by this waiver involves rental housing, the grantee shall establish procedures for the following:
A. Application materials, award letters, and operating procedures that require property owners to make reasonable attempts to contact their former tenants and to offer a unit, upon completion, to those tenants meeting the program’s eligibility requirements;
B. Placement services for former and prospective tenants; and
C. A public registry of available rental units assisted with CDBG disaster recovery and/or other funds.
c. Eligible Project Costs. The cost of relocation assistance and the reoccupancy plan are eligible project costs in the same manner and to the same extent as other project costs authorized under the supplemental Acts. For covered programs or projects involving affordable rental housing, the relocation and planning costs required by this Notice may be paid from funds reserved for the affordable rental housing stock in the impacted areas under Public Law 109–234.
4. Direct grant administration by states and means of carrying out eligible activities. Requirements at 42 U.S.C. 5306 are waived to the extent necessary to allow the state to use its disaster recovery grant allocation directly to carry out state-administered activities eligible under this Notice. Activities eligible under this Notice may be undertaken, subject to state law, by the recipient through its employees or through procurement contracts, through loans or grants under agreements with subrecipients, or by one or more entities that are designated by the chief executive officer of the state. Activities made eligible under section 105(a)(15) of the Housing and Community Development Act of 1974, as amended, may be undertaken only by entities specified in that section, regardless of whether the assistance is provided to such an entity from the state or from a unit of general local government.
5. Consolidated Plan waiver. Requirements at 42 U.S.C. 12706 and 24

CFR 91.325(a)(6), that housing activities undertaken with CDBG funds be consistent with the strategic plan, are waived. Further, the requirement at 42 U.S.C. 5304(e), to the extent that it would require HUD to annually review grantee performance under the consistency criteria, is also waived. These waivers apply only until the time that the grantee first updates its consolidated plan priorities following the hurricane.
6. Citizen participation waiver and alternative requirement. Provisions of 42 U.S.C. 5304(a)(2) and (3), 42 U.S.C. 12707, 24 CFR 570.486, and 24 CFR 91.115(b), with respect to citizen participation requirements, are waived and replaced by the requirements below. The streamlined requirements do not mandate public hearings at either the state or local government level, but do require providing a reasonable opportunity for citizen comment and ongoing citizen access to information about the use of grant funds. The streamlined citizen participation requirements for this grant are:
a. Before the grantee adopts the action plan for this grant or any substantial amendment to this grant, the grantee will publish the proposed plan or amendment (including the information required in this Notice for an Action Plan for Disaster Recovery). The manner of publication (including prominent posting on the state, local, or other relevant Web site) must afford citizens, affected local governments, and other interested parties a reasonable opportunity to examine the plan or amendment’s contents. Subsequent to publication, the grantee must provide a reasonable time period and method(s) (including electronic submission) for receiving comments on the plan or on any substantial amendment to it. The grantee’s plans to minimize displacement of persons or entities and to assist any persons or entities displaced must be published with the action plan. HUD expects the grantee to hold a public hearing on a proposed plan amendment unless doing so would hinder the provision of expedient disaster recovery.
b. In the action plan, each grantee will specify its criteria for determining what changes in the grantee’s activities constitute a substantial amendment to the plan. At a minimum, adding or deleting an activity or changing the planned beneficiaries of an activity will constitute a substantial change. The grantee may modify or substantially amend the action plan if it follows the same procedures required in this Notice for the preparation and submission of an Action Plan for Disaster Recovery. The

grantee must notify HUD, but is not required to notify the public, when it makes any plan amendment that is not substantial.
c. The grantee must consider all comments received on the action plan or any substantial amendment and submit to HUD a summary of those comments and the grantee’s response with the action plan or substantial amendment.
d. The grantee must make the action plan, any substantial amendments, and all performance reports available to the public. HUD recommends posting them on the Internet. In addition, the grantee must make these documents available in a form accessible to persons with disabilities and non-English-speaking persons. During the term of this grant, the grantee will provide citizens, affected local governments, and other interested parties with reasonable and timely access to information and records relating to the action plan and to the grantee’s use of this grant.
e. The grantee will provide a timely written response to every citizen complaint. Such response will be provided within 15 working days of the receipt of the complaint, if practicable.
7. Modify requirement for consultation with local governments. Currently, the statute and regulations require consultation with affected units of local government in the nonentitlement area of the state regarding the state’s proposed method of distribution. HUD is waiving 42 U.S.C. 5306(d)(2)(C)(iv), 24 CFR 91.325(b), and 24 CFR 91.110, with the alternative requirement that the state consult with all disaster-affected units of general local government, including any CDBG entitlement communities, in determining the use of funds.
8. Action Plan waiver and alternative requirement. The requirements at 42 U.S.C. 12705(a)(2), 42 U.S.C. 5304(a)(1), 42 U.S.C. 5304(m), 42 U.S.C. 5306(d)(2)(C)(iii), 24 CFR 1003.604, and 24 CFR 91.320 are waived for these disaster recovery grants. Each state must submit to HUD an Action Plan for Disaster Recovery that describes:
a. The effects of the covered disaster, especially in the most impacted areas and populations, and the greatest recovery needs resulting from the covered disaster that have not been addressed by insurance proceeds, other federal assistance, or any other funding source;
b. The grantee’s overall plan for disaster recovery, including:
1. How the state will promote sound short- and long-term recovery planning at the state and local levels, especially land use decisions that reflect

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responsible flood plain management, removal of regulatory barriers to reconstruction, and prior coordination with planning requirements of other state and federal programs and entities;
2. How the state will encourage construction methods that emphasize high quality, durability, energy efficiency, and mold resistance, including how the state will promote enactment and enforcement of modern building codes and mitigation of flood risk, where appropriate;
3. How the state will provide or encourage provision of adequate, floodresistant housing for all income groups that lived in the disaster-impacted areas prior to the incident date(s) of the applicable disaster(s), including a description of the activities it plans to undertake to address emergency shelter and transitional housing needs of homeless individuals and families (including subpopulations), to prevent low-income individuals and families with children (especially those with incomes below 30 percent of median) from becoming homeless, to help homeless persons make the transition to permanent housing and independent living, and to address the special needs of persons who are not homelessidentified, in accordance with 24 CFR 91.315(d);
c. Monitoring standards and procedures that are sufficient to ensure that program requirements, including non-duplication of benefits, are met and that provide for continual quality assurance, investigation, and internal audit functions, with responsible staff reporting independently to the Governor of the state or, at a minimum, to the chief officer of the governing body of any designated administering entity;
d. A description of the steps the state will take to avoid or mitigate occurrences of fraud, abuse, and mismanagement, especially with respect to accounting, procurement, and accountability, with a description of how the state will provide for increasing the capacity for implementation and compliance of local governments, subrecipients, subgrantees, contractors, and any other entity responsible for administering activities under this grant; and
e. The state’s method of distribution. The method of distribution shall include descriptions of the method of allocating funds to units of local government and of specific projects the state will carry out directly, as applicable. The descriptions will include:
1. When funds are to be allocated to units of local government; and all criteria used to select applications from

local governments for funding, including the relative importance of each criterion, and including a description of how the disaster recovery grant resources will be allocated among all funding categories, plus the threshold factors and grant size limits that are to be applied; and
2. In cases where the state will carry out activities directly, the projected uses for the CDBG disaster recovery funds broken down by responsible entity, activity, and geographic area;
3. How the method of distribution or use of funds described in accordance with the above subparagraphs will result in eligible uses of grant funds related to long-term recovery from specific effects of the disaster(s) or restoration of infrastructure; and
4. Sufficient information so that citizens, units of general local government, and other eligible subgrantees or subrecipients will be able to understand and comment on the action plan and, if applicable, be able to prepare responsive applications to the state.
f. Required certifications (see the applicable Certifications section of this Notice); and
g. A completed and executed federal form SF–424.
9. Allow reimbursement for preagreement costs. The provisions of 24 CFR 570.489(b) are applied to permit a grantee to reimburse itself for otherwise allowable costs incurred on or after the incident date of the covered disaster.
10. Clarifying note on the process for environmental release of funds when a state carries out activities directly. Usually, a state distributes CDBG funds to units of local government and takes on HUD’s role in receiving environmental certifications from the grant recipients and approving releases of funds. For this grant, HUD will allow a state grantee to also carry out activities directly instead of distributing all funds to other governments. According to the environmental regulations at 24 CFR 58.4, when a state carries out activities directly, the state must submit the certification and request for release of funds to HUD for approval.
11. Duplication of benefits. In general, 42 U.S.C. 5155 (section 312 of the Robert T. Stafford Disaster Assistance and Emergency Relief Act, as amended) prohibits any person, business concern, or other entity from receiving financial assistance with respect to any part of a loss resulting from a major disaster as to which such person/business/entity has received financial assistance under any other program or from insurance or any other source. The appropriations acts stipulate that funds may not be used for

activities reimbursable by, or for which funds have been made available by, the Federal Emergency Management Agency or by the Army Corps of Engineers.
12. Waiver and alternative requirement for distribution to CDBG metropolitan cities and urban counties.
a. Section 5302(a)(7) of title 42, U.S.C. (definition of ‘‘non-entitlement area’’), and provisions of 24 CFR part 570 that would prohibit a state from distributing CDBG funds to units of general local government in entitlement communities and to Indian tribes, are waived, including 24 CFR 570.480(a), to the extent that such provisions limit the distribution of funds to units of general local government located in entitlement areas and to state or federally recognized Indian tribes. The state is required instead to distribute funds to the most adversely affected and impacted areas related to the consequences of the covered disaster(s) without regard to a local government or Indian tribe status under any other CDBG program.
b. Additionally, because a state grantee under this appropriation may carry out activities directly, HUD is applying the regulations at 24 CFR 570.480(c) with respect to the basis under which HUD determines whether the state has failed to carry out its certifications; the basis shall be that the state has failed to carry out its certifications in compliance with applicable program requirements. Also, HUD is waiving 24 CFR 570.494, regarding timely distribution of funds. However, HUD expects each state grantee to expeditiously obligate and expend all funds, including any recaptured funds or program income, and to carry out activities in a timely manner.
13. Note that use of grant funds must relate to the covered disaster(s). The supplemental Acts impose fundability criteria in addition to the annual CDBG requirement that each activity must be eligible under 42 U.S.C. 5305(a) or this Notice and meet a CDBG national objective under the penultimate paragraph of 42 U.S.C. 5304(b)(3). Public Laws 109–148 and 109–234 require that each activity assisted must be related to disaster relief, long-term recovery, and restoration of infrastructure in the most impacted and distressed areas related to the consequences of Hurricanes Katrina, Rita, and Wilma in communities included in Presidential disaster declarations.
14. Note on the change to the administration limitation. Up to 5 percent of the grant amount may be used for the state’s administrative costs.

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The provisions of 42 U.S.C. 5306(d) and 24 CFR 570.489(a)(1)(i) and (iii) will not apply to the extent that they cap state administration expenditures and require a dollar-for-dollar match of state funds for administrative costs exceeding $100,000. HUD does not waive 24 CFR 570.489(a)(3) to allow a state to exceed the overall planning, management, and administrative cap of 20 percent.
Reporting
15. Waiver of performance report and alternative requirement. The requirements for submission of a Performance Evaluation Report (PER) pursuant to 42 U.S.C. 12708 and 24 CFR 91.520 are waived. The alternative requirement is that:
a. Each grantee must submit its Action Plan for Disaster Recovery, including performance measures, into HUD’s Webbased Disaster Recovery Grant Reporting (DRGR) system. (The signed certifications and the form SF–424 must be submitted in hard copy.) As additional detail about uses of funds becomes available to the grantee, the grantee must enter this detail into DRGR, in sufficient detail to serve as the basis for acceptable performance reports.
b. Each grantee must submit a quarterly performance report, as HUD prescribes, no later than 30 days following each calendar quarter, beginning after the first full calendar quarter, after grant award and continuing until all funds have been expended and all expenditures reported. Each quarterly report will include information about the uses of funds during the applicable quarter, including (but not limited to) the project name, activity, location, and national objective, funds budgeted, obligated, drawn down, and expended; the funding source and total amount of any non-CDBG disaster funds; beginning and ending dates of activities; and performance measures such as numbers of low- and moderate-income persons or households benefiting. Quarterly reports to HUD must be submitted using HUD’s Web-based DRGR system.
16. Use of subrecipients. The following alternative requirement applies for any activity that a state carries out directly by funding a subrecipient:
a. 24 CFR 570.503, except that specific references to 24 CFR parts 84 and 85 need not be included in subrecipient agreements.
b. 570.502(b), except to the extent that it mandates compliance with Office of Management and Budget (OMB) Circular A–110 (implemented at 24 CFR part 84, ‘‘Uniform Administrative

Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals and Other NonProfit Organizations’’). HUD recommends application of 24 CFR part 84, but does not require it.
17. Recordkeeping. Recognizing that the state may carry out activities directly, 24 CFR 570.490(b) is waived in such a case and the following alternative provision shall then apply: state records. The state shall establish and maintain such records as may be necessary to facilitate review and audit by HUD of the state’s administration of CDBG disaster recovery funds under 24 CFR 570.493. Consistent with applicable statutes, regulations, waivers and alternative requirements, and other federal requirements, the content of records maintained by the state shall be sufficient to: enable HUD to make the applicable determinations described at 24 CFR 570.493; make compliance determinations for activities carried out directly by the state; and show how activities funded are consistent with the descriptions of activities proposed for funding in the action plan. For fair housing and equal opportunity purposes and, as applicable, such records shall include data on the racial, ethnic, and gender characteristics of persons who are applicants for, participants in, or beneficiaries of the program.
18. Change of use of real property. This waiver conforms the change of use of real property rule to the waiver allowing a state to carry out activities directly. For purposes of this program, in 24 CFR 570.489(j), (j)(1), and the last sentence of (j)(2), ‘‘unit of general local government’’ shall be read as ‘‘unit of general local government or state.’’
19. Responsibility for state review and handling of noncompliance. This change conforms the rule with the waiver allowing the state to carry out activities directly. 24 CFR 570.492 is waived and the following alternative requirement applies: The state shall make reviews and audits, including onsite reviews of any subrecipients, designated public agencies, and units of general local government as may be necessary or appropriate to meet the requirements of section 104(e)(2) of the Housing and Community Development Act of 1974, as amended, and modified by this Notice. In the case of noncompliance with these requirements, the state shall take such actions as may be appropriate to prevent a continuance of the deficiency, to mitigate any adverse effects or consequences, and to prevent a recurrence. The state shall establish remedies for noncompliance by any designated public agencies or units of

general local governments and for its subrecipients.
20. Information collection approval note. HUD has approval for information collection requirements in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520) under OMB control number 2506–0165. In accordance with the Paperwork Reduction Act, HUD may not conduct or sponsor, nor is a person required to respond to, a collection of information, unless the collection displays a valid control number.
Certifications
21. Certifications for state governments, waiver, and alternative requirement. Section 91.325 of title 24 of the Code of Federal Regulations is waived. Each state must make the following certifications prior to receiving a CDBG disaster recovery grant:
a. The state certifies that it will affirmatively further fair housing, which means that it will conduct an analysis to identify impediments to fair housing choice within the state, take appropriate actions to overcome the effects of any impediments identified through that analysis, and maintain records reflecting the analysis and actions in this regard. (See 24 CFR 570.487(b)(2).)
b. The state certifies that it has in effect and is following a residential antidisplacement and relocation assistance plan in connection with any activity assisted with funding under the CDBG program.
c. The state certifies its compliance with restrictions on lobbying required by 24 CFR part 87, together with disclosure forms, if required by that part.
d. The state certifies that the Action Plan for Disaster Recovery is authorized under state law and that the state, and any entity or entities designated by the state, possesses the legal authority to carry out the program for which it is seeking funding, in accordance with applicable HUD regulations and this Notice.
e. The state certifies that it will comply with the acquisition and relocation requirements of the URA, as amended, and implementing regulations at 49 CFR part 24, except where waivers or alternative requirements are provided for this grant.
f. The state certifies that it will comply with section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u), and implementing regulations at 24 CFR part 135.
g. The state certifies that it is following a detailed citizen participation plan that satisfies the

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requirements of 24 CFR 91.115 (except as provided for in notices providing waivers and alternative requirements for this grant), and that each unit of general local government that is receiving assistance from the state is following a detailed citizen participation plan that satisfies the requirements of 24 CFR 570.486 (except as provided for in notices providing waivers and alternative requirements for this grant).
h. The state certifies that it has consulted with affected units of local government in counties designated in covered major disaster declarations in the non-entitlement, entitlement, and tribal areas of the state in determining the method of distribution of funding;
i. The state certifies that it is complying with each of the following criteria:
1. Funds will be used solely for necessary expenses related to disaster relief, long-term recovery, and restoration of infrastructure in the most impacted and distressed areas related to the consequences of the Gulf Coast hurricanes of 2005 in communities included in Presidential disaster declarations.
2. With respect to activities expected to be assisted with CDBG disaster recovery funds, the action plan has been developed so as to give the maximum feasible priority to activities that will benefit low- and moderate-income families.
3. The aggregate use of CDBG disaster recovery funds shall principally benefit low- and moderate-income families in a manner that ensures that at least 50 percent of the amount is expended for activities that benefit such persons during the designated period.
4. The state will not attempt to recover any capital costs of public improvements assisted with CDBG disaster recovery grant funds, by assessing any amount against properties owned and occupied by persons of lowand moderate-income, including any fee charged or assessment made as a condition of obtaining access to such public improvements, unless: (A) disaster recovery grant funds are used to pay the proportion of such fee or assessment that relates to the capital costs of such public improvements that are financed from revenue sources other than under this title; or (B) for purposes of assessing any amount against properties owned and occupied by persons of moderate income, the grantee certifies to the Secretary that it lacks sufficient CDBG funds (in any form) to comply with the requirements of clause (A).
j. The state certifies that the grant will be conducted and administered in

conformity with title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) and the Fair Housing Act (42 U.S.C. 3601–3619) and implementing regulations.
k. The state certifies that it has and that it will require units of general local government that receive grant funds to certify that they have adopted and are enforcing:
1. A policy prohibiting the use of excessive force by law enforcement agencies within its jurisdiction against any individuals engaged in non-violent civil rights demonstrations; and
2. A policy of enforcing applicable state and local laws against physically barring entrance to or exit from a facility or location that is the subject of such non-violent civil rights demonstrations within its jurisdiction.
l. The state certifies that each state grant recipient or administering entity has the capacity to carry out disaster recovery activities in a timely manner, or that the state has a plan to increase the capacity of any state grant recipient or administering entity that lacks such capacity.
m. The state certifies that it will not use CDBG disaster recovery funds for any activity in an area delineated as a special flood hazard area in FEMA’s most current flood advisory maps, unless it also ensures that the action is designed or modified to minimize harm to or within the floodplain in accordance with Executive Order 11988 and 24 CFR part 55.
n. The state certifies that it will comply with applicable laws.
22. Duration of funding. Availability of funds provisions in 31 U.S.C. 1551– 1557, added by section 1405 of the National Defense Authorization Act for Fiscal Year 1991 (Public Law 101–510), limit the availability of certain appropriations for expenditure. This limitation may not be waived. However, the appropriations acts for these grants direct that these funds be available until expended unless, in accordance with 31 U.S.C. 1555, the Department determines that the purposes for which the appropriation has been made have been carried out and that no disbursement has been made against the appropriation for 2 consecutive fiscal years. In such a case, the Department shall close out the grant prior to expenditure of all funds.
Provisions Unique to Grants Under Public Law 109–234
23. Action Plan additional elements. The disaster recovery grantees receiving funding under Public Law 109–234 must provide the following elements as part of the overall plan for disaster recovery:

a. An explanation of how the state will give priority to the rehabilitation and reconstruction of the affordable rental housing stock, including public and other HUD-assisted housing, a description of the activities the state plans to undertake with grant funds under this priority, and a description of the unique challenges that individuals with disabilities face in finding accessible and affordable housing;
b. An explanation of how the state will give priority to infrastructure development and rehabilitation, and a description of the infrastructure activities it plans to undertake with grant funds; and
c. An explanation of how the method of distribution or use of funds described in accordance with the applicable notices will result in the state meeting the requirement that at least 19.3311 percent of its allocation under this notice shall be used for repair, rehabilitation, and reconstruction (including demolition, site clearance, and remediation) of the affordable rental housing stock (including public and other HUD-assisted housing) in the impacted areas.
24. Alternative requirements regarding targeting in Louisiana.
a. The State of Louisiana will target 70 percent of its disaster recovery funds under Public Law 109–234 toward the disaster recovery needs in the New Orleans-Metairie-Bogalusa Metropolitan Area; and
b. Before Louisiana expends any funds to meet the minimum requirement for affordable rental housing under this notice, the Governor of Louisiana shall demonstrate to the Secretary’s satisfaction that the state will provide funds or has identified dedicated resources sufficient to meet the key disaster recovery needs for repair, rehabilitation, and reconstruction of affordable rental housing stock, including public housing disaster recovery in the most impacted areas of the state.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance numbers for the disaster recovery grants under this Notice are as follows: 14.219; 14.228.
Finding of No Significant Impact
A Finding of No Significant Impact (FONSI) with respect to the environment has been made in accordance with HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is available for public inspection between 8 a.m. and 5

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Case 1:08-cv-01938-HHK Document 34-9 Filed 06/05/09 Page 12 of 12
Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Notices

p.m. weekdays in the Office of the Rules Docket Clerk, Office of General Counsel, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 10276, Washington, DC 20410– 0500. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the finding by calling the Regulations Division at 202–402–3055 (this is not a toll-free number).
Dated: July 28, 2008. Roy A. Bernardi, Deputy Secretary. [FR Doc. E8–18281 Filed 8–7–08; 8:45 am]
BILLING CODE 4210–67–P
DEPARTMENT OF THE INTERIOR
Office of the Secretary
Exxon Valdez Oil Spill Trustee Council; Notice of Meeting
AGENCY: Office of the Secretary, Department of the Interior.
ACTION: Notice of meeting.
SUMMARY: The Department of the Interior, Office of the Secretary is announcing a public meeting of the Exxon Valdez Oil Spill Public Advisory Committee.
DATES: September 3, 2008, at 9 a.m.
ADDRESSES: Exxon Valdez Oil Spill Trustee Council Office, 441 West 5th Avenue, Suite 500, Anchorage, Alaska.
FOR FURTHER INFORMATION CONTACT: Douglas Mutter, Department of the Interior, Office of Environmental Policy and Compliance, 1689 ‘‘C’’ Street, Suite 119, Anchorage, Alaska, 99501, (907) 271–5011.
SUPPLEMENTARY INFORMATION: The Public Advisory Committee was created by Paragraph V.A.4 of the Memorandum of Agreement and Consent Decree entered into by the United States of America and the State of Alaska on August 27, 1991, and approved by the United States District Court for the District of Alaska in settlement of United States of America v. State of Alaska, Civil Action No. A91–081 CV. The meeting agenda will include review of the draft fiscal year 2009 program development and implementation budget, and invitation; 2008 update to the Injured Resources and Services List; Integrated Herring Restoration Program;

fiscal year 2008 projects requesting extensions; and personnel changes.
Willie R. Taylor,
Director, Office of Environmental Policy and Compliance.
[FR Doc. E8–18341 Filed 8–7–08; 8:45 am]
BILLING CODE 4310–RG–P
DEPARTMENT OF THE INTERIOR
Fish and Wildlife Service
[FWS-R7-R-2008-NO182] [70138-1263-00004A]
Information Collection Sent to the Office of Management and Budget (OMB) for Approval; Alaska Guide Service Evaluation
AGENCY: Fish and Wildlife Service, Interior. ACTION: Notice; request for comments.
SUMMARY: We (Fish and Wildlife Service) have sent an Information Collection Request (ICR) to OMB for review and approval. The ICR, which is summarized below, describes the nature of the collection and the estimated burden and cost. We may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. DATES: You must submit comments on or before September 8, 2008. ADDRESSES: Send your comments and suggestions on this ICR to the Desk Officer for the Department of the Interior at OMB-OIRA at (202) 395-6566 (fax) or OIRA_DOCKET@OMB.eop.gov (e-mail). Please provide a copy of your comments to Hope Grey, Information Collection Clearance Officer, Fish and Wildlife Service, MS 222-ARLSQ, 4401 North Fairfax Drive, Arlington, VA 22203 (mail); (703) 358-2269 (fax); or hope_grey@fws.gov (e-mail). FOR FURTHER INFORMATION CONTACT: To request additional information about this ICR, contact Hope Grey by mail, fax, or e-mail (see ADDRESSES) or by telephone at (703) 358–2482. SUPPLEMENTARY INFORMATION:
OMB Control Number: None. This is a new collection.
Title: Alaska Guide Service Evaluation.
Service Form Number(s): 3-2349. Type of Request: New collection. Affected Public: Clients of permitted commercial guide service providers. Respondent’s Obligation: Voluntary. Frequency of Collection: One time following use of commercial guide services. Estimated Annual Number of Respondents: 396.

Estimated Total Annual Responses: 396.
Estimated Time Per Response: 15 minutes.
Estimated Total Annual Burden Hours: 99.
Abstract: We are proposing to collect information to help us evaluate commercial guide services on our national wildlife refuges in the State of Alaska (State). The National Wildlife Refuge Administration Act of 1966, as amended (16 U.S.C. 668dd-ee), authorizes us to permit uses, including commercial visitor services, on national wildlife refuges when we find the activity to be compatible with the purposes for which the refuge was established. With the objective of making available a variety of quality visitor services for wildlife-dependent recreation on National Wildlife Refuge System lands, we issue permits for commercial guide services, including big game hunting, sport fishing, wildlife viewing, river trips, and other guided activities. We plan to use FWS Form 32349 (Alaska Guide Service Evaluation) as a method to:
(1) Monitor the quality of services provided by commercial guides.
(2) Gauge client satisfaction with the services.
(3) Assess the impacts of the activity on refuge resources.
The client is the best source of information on the quality of commercial guiding services. We plan to collect:
(1) Client name. (2) Guide name(s). (3) Type of guided activity. (4) Dates and location of guided activity. (5) Information on the services received such as the client’s expectations, safety, environmental impacts, and client’s overall satisfaction. We will encourage respondents to provide any additional comments that they wish regarding the guide service or refuge experience, and ask whether or not they wish to be contacted for additional information. The above information, in combination with State-required guide activity reports and contacts with guides and clients in the field, will provide a comprehensive method for monitoring permitted commercial guide activities. A regular program of client evaluation will help refuge managers detect potential problems with guide services so that we can take corrective actions promptly. In addition, we will use this information during the competitive selection process for big game and sport fishing guides to evaluate an applicant’s

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Exhibit H
The Road Home, Appeals and Second Disbursements

Case 1:08-cv-01938-HHK Document 34-10 Filed 06/05/09 Page 2 of 4

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Case 1:08-cv-01938-HHK Document 34-11 Filed 06/05/09 Page 1 of 4
Exhibit I
The Road Home, Filing an Appeal

Case 1:08-cv-01938-HHK Document 34-11 Filed 06/05/09 Page 2 of 4

Case 1:08-cv-01938-HHK Document 34-11 Filed 06/05/09 Page 3 of 4

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 Case 1:08-cv-01938-HHK Document 38 Filed 07/08/09 Page 1 of 38

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING )

ACTION CENTER, et al.,

)

)

Plaintiffs,

)

)

v.

)

)

U.S. DEPARTMENT OF HOUSING AND

)

URBAN DEVELOPMENT, et al.,

)

)

Defendants.

)

No. 1:08-cv-1938-HHK

REPLY OF DEFENDANT U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT IN SUPPORT OF ITS MOTION TO DISMISS

TABLE OF CONTENTS

TABLE OF AUTHORITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

I. PRELIMINARY STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

II. PLAINTIFFS’ CLAIMS ARE NOT JUSTICIABLE AGAINST HUD. . . . . . . . . . . . . . . . . 2
A. Neither the FHA Nor the HCDA Provide Plaintiffs With a Private Right of Action Against HUD, and Plaintiffs Cannot Proceed Against HUD under the APA Because Plaintiffs Have An Adequate Remedy in Suit Directly Against the LRA . . . . . . . . . . 2
1. There is no private right of action against HUD under the FHA or the HCDA.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. The APA waiver of sovereign immunity does not apply to HUD because other adequate remedies exist for plaintiffs’ grievances. . . . . . . . . . . . . . . . . . . . . . 6
B. Plaintiffs Cannot Satisfy the Redress Prong of Article III’s Standing Requirement. . 11
C. HUD’s Approval of Louisiana’s Road Home Program is Moot. . . . . . . . . . . . . . . . 19
D. Plaintiffs’ Claims Under 42 U.S.C. §§ 3608(d), (e)(5), and 5304(b)(2) Are Unreviewable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

III. PLAINTIFFS HAVE FAILED TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
A. Plaintiffs Have Failed to State a Claim Under 42 U.S.C. §§ 3604, 3605 and 3608 Against HUD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
B. Plaintiffs Have Failed to Allege the Elements of a Violation of 42 U.S.C. § 5304(b)(2) Against HUD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

IV. CONCLUSION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Case 1:08-cv-01938-HHK Document 38 Filed 07/08/09 Page 2 of 38
TABLE OF AUTHORITIES FEDERAL CASES
Action Alliance of Senior Citizens of Greater Philadelphia v. Heckler, 789 F.2d 931 (D.C. Cir. 1986). ..................................................................................... 15, 17
Aktieselskabet v. Fame Jeans Inc., 525 F.3d. 8 (D.C. Cir. 2008). .................................................. 27 *Alexander v. Sandoval, 532 U.S. 275 (2001).......................................................................... 4, 5, 6 *Allen v. Wright, 468 U.S. 737 (1984)............................................................................................ 17 America’s Community Bankers v. Federal Deposit Insurance Corp.,
200 F.3d 822 (D.C. Cir. 2007). ............................................................................... 13, 16, 17 Americans Disabled for Attendant Programs Today v. United States Department of Housing
and Urban Development, 170 F.3d 381 (3rd Cir. 1999)....................................................... 8 *Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) . ................................................................. 26, 27, 29, 30 *Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). ............................................... 26, 27, 28, 29 CC Distributors, Inc. v. U.S., 883 F.2d 146 (D.C. Cir. 1989). ....................................................... 18 Cannon v. University of Chicago, 441 U.S. 677 (1979). .................................................................. 8 *Crutchfield v. U.S. Army Corps. of Enginees, 230 F. Supp. 2d 687 (E.D. Va. 2002). 10, 14, 15, 16 Davis v. United States Department of Housing and Urban Development,
627 F.2d 942 (9th Cir. 1980). ............................................................................................ 21 *City of Erie v. Pap’s A.M., 529 U.S. 277 (2000). ......................................................................... 23 *Coker v. Sullivan, 902 F.2d 84 (D.C. Cir. 1990). ........................................................................... 8 Conley v. Gibson, 55 U.S. 41 (1957). ............................................................................................. 27 Cort v. Ash, 422 U.S. 66 (1975).................................................................................................... 4, 5 *Council for the Blind v. Regan, 709 F.2d 1521 (1983)................................................................... 8 Center for Automobile Safety v. National Highway Transportation Safety Administration,
793 F.2d 1322 (D.C. Cir. 1986). ............................................................................. 13, 16, 17 City of Houston, Texas v. United States Department of Housing and Urban Development,
24 F.3d 1421 (D.C. Cir. 1994). ............................................................................... 19, 20, 21 -ii-

Case 1:08-cv-01938-HHK Document 38 Filed 07/08/09 Page 3 of 38
County of Los Angeles v. Shalala, 192 F.3d 1005 (D.C. Cir. 1999)......................................... 14, 15 Darst-Webbe Tenant Association Board v. St. Louis Housing Authority,
417 F.3d 898 (8th Cir. 2005). ....................................................................................... 25, 29 Dean v. Martinez, 337 F. Supp. 2d 477 (D. Md. 2004). ................................................................... 9 *Freedom Republicans, Inc. v. Federal Election Commission, 13 F.3d 412 (D.C. Cir. 1994). ..... 11 *Garcia v. Vilsack, 563 F.3d 519 (D.C. Cir. 2009). ..................................................................... 7, 8 Heckler v. Chaney, 470 U.S. 821 (1985). ................................................................................. 15, 25 Henry Horner Mothers Guild v. Chicago Housing Authority,
824 F. Supp. 808 (N.D. Ill. 1993). ................................................................................. 9, 10 *James v. City of Dallas, Texas, 254 F.3d 551 (5th Cir. 2001). ............................................... 18, 19 Jersey Heights Neighborhood Association v. Glendening, 174 F.3d 180 (4th Cir. 1999)................ 8 *Jones v. Office of Comptroller of the Currency, 983 F. Supp. 197 (D.D.C. 1997), affd,
1998 WL 315581 (D.C. Cir. 1998). .............................................................................. 3, 4, 5 *Latinos Unidos de Chelsea En Accion v. United States Department of Housing and Urban
Development, 799 F.2d 774 (1st Cir. 1986)...................................................................... 5, 6 Lattimore v. Northwest Cooperative, 1992 WL 118383 (D.D.C. 1992). ....................................... 10 Lee v. Pierce, 698 F. Supp. 332 (D.D.C. 1988). ......................................................................... 5, 29 *Linda R.S. v. Richard D., 410 U.S. 614 (1973). ........................................................................... 17 *Marinoff v. United States Department of Housing and Urban Development,
892 F. Supp. 493 (S.D.N.Y 1995), aff’d, 78 F.3d 64 (2nd Cir. 1996). ................................. 5 Montgomery Improvement Association v. United States Department of Housing and Urban
Development, 645 F.2d 291 (5th Cir. 1981). ........................................................................ 6 Motor and Equipment Manufacturers Association v. Nichols,
142 F.3d 449 (D.C. Cir. 1998). ............................................................................... 13, 16, 17 NAACP v. United States Department of Housing and Urban Development,
817 F. 2d 149 (1st Cir. 1987).............................................................................. 5, 15, 25, 29 NAACP v. Kemp, 721 F. Supp. 361 (D. Mass. 1989). ........................................................ 15, 21, 25
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Case 1:08-cv-01938-HHK Document 38 Filed 07/08/09 Page 4 of 38
Nabke v. United States Department of Housing and Urban Development, 520 F. Supp. 5 (W.D. Mich 1981). ....................................................................................... 6
*National Endowment for the Arts v. Finley, 524 U.S. 569 (1998) ................................................. 4 *National Wrestling Coaches Association v. Department of Education,
366 F.3d 930 (D.C. Cir. 2004). ............................................................................... 14, 17, 18 *Norton v. So. Utah Wilderness Alliance, 542 U.S. 55 (2004)................................................ passim Otero v. New York City Housing Authority, 484 F. 2d 1122 (2d Cir. 1973). ................................. 29 *PPG Industries, Inc. v. United States, 52 F.3d 363 (D.C. Cir. 1995). .......................................... 14 Puerto Rico Public Housing Administration v. United States Department of Housing and
Urban Development, 59 F. Supp. 2d 310 (D.P.R 1999). ...................................................... 5 Payne v. United States Department of Housing and Urban Development,
551 F. Supp. 1113 (S.D. Ohio 1982). ................................................................................... 6 People’s Housing Development Corp. v. City of Poughkeepsie,
425 F. Supp. 482 (S.D.N.Y. 1976)........................................................................................ 6 *Rubin v. City of Santa Monica, 308 F.3d 1008 (9th Cir. 2002). ................................................... 17 *Southeast Lake View Neighbors v. United States Department of Housing and
Urban Development, 685 F.2d 1027 (7th Cir. 1982). ................................................... 21, 22 Schlesinger v. Reservists Committee to Stop the War, 418 U.S. 208 (1974).................................. 19 Schnapper v. Foley, 667 F.2d 102 (D.C. Cir. 1981). ........................................................................ 3 Shannon v. United States Department of Housing and Urban Development,
436 F.2d 809 (3d Cir. 1970)................................................................................................ 15 *Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 256 (1976).......................... 17 *Steel Co. v. Citizens Concerned for a Better Environment,
523 U.S. 83 (1998)........................................................................................................ 18, 19 Thompson v. United States Department of Housing and Urban Development,
348 F. Supp. 2d 398 (D. Md. 2005). ............................................................................... 9, 26 Thompson v. United States Department of Housing and Urban Development,
2006 WL 581260 (D. Md. 2006). ....................................................................................... 26 Tinsley v. Kemp, 750 F. Supp. 1001 (W.D. Mo. 1990)............................................................... 9, 10
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Case 1:08-cv-01938-HHK Document 38 Filed 07/08/09 Page 5 of 38
United States v. Gautreaux, 425 U.S. 284 (1976). ......................................................................... 15 West Virginia Association of Community Health Centers v. Heckler,
734 F.2d 1570 (D.C. Cir. 1984). ......................................................................................... 18 *Washington Legal Foundation v. Alexander, 984 F.2d 483 (D.C. Cir. 1993). ............................... 7 *Women’s Equity Action League v. Cavazos, 906 F.2d 742 (D.C. Cir. 1990). ........................ 7, 8, 9 Young v. Pierce, 544 F. Supp. 1010 (E.D. Tex. 1982). .................................................................... 5
FEDERAL STATUTES Pub. L. No. 109-148.................................................................................................................. 13, 20 Pub. L. No. 109-234.................................................................................................................. 13, 20 Pub. L. No. 110-116.................................................................................................................... 2, 21 5 U.S.C. § 701 et seq................................................................................................................ passim 5 U.S.C. § 702 .................................................................................................................... 2, 3, 6, 11 5 U.S.C. § 704 ......................................................................................................................... passim 5 U.S.C. § 706(1). ........................................................................................................... 2, 23, 24, 26 5 U.S.C. § 706(2). ............................................................................................................... 23, 24, 26 20 U.S.C. § 1681 et seq................................................................................................................... 14 42 U.S.C. § 2000d............................................................................................................................. 8 42 U.S.C. § 3601 et seq......................................................................................................... 1, 11, 24 42 U.S.C. § 3604(a). ................................................................................................................ passim 42 U.S.C. § 3605(a). ......................................................................................................................... 4 42 U.S.C. § 3608(d), (e)(5). ..................................................................................................... passim 42 U.S.C. § 3610............................................................................................................................... 7 42 U.S.C. § 3613........................................................................................................................... 3, 5 42 U.S.C. § 5301 et seq..................................................................................................................... 1
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42 U.S.C. § 5304(b)(2). ...................................................................................................... 1, 2, 5, 30 42 U.S.C. § 5305(a). ....................................................................................................................... 13 43 U.S.C. § 1701(a)(8).................................................................................................................... 24 43 U.S.C. § 1782(c). ....................................................................................................................... 24
FEDERAL REGULATIONS 24 C.F.R. § 6.10-.11 ......................................................................................................................... 7 24 C.F.R. § 91.500(b). .............................................................................................................. 10, 15 24 C.F.R. § 570.482(a).................................................................................................................... 13 24 C.F.R. § 570.485(c).................................................................................................................... 30 71 Fed. Reg. 7666 (Feb. 13, 2006).................................................................................................. 20 71 Fed. Reg. 63337 (Oct. 30, 2006)................................................................................................ 20
LEGISLATIVE HISTORY 1974 U.S.C.C.A.N. 4273. ............................................................................................................... 13
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I. PRELIMINARY STATEMENT Plaintiffs’ attempt to invoke this Court’s jurisdiction to review the “approval” and oversee the
“oversight” by the U.S. Department of Housing and Urban Development (“HUD”) of the Louisiana Recovery Authority’s (“LRA”) Road Home compensation and incentive grant program is not justiciable. First, neither the Fair Housing Act (“FHA”), 42 U.S.C. § 3601 et seq., nor the Housing and Community Development Act of 1974 (“HCDA”), 42 U.S.C. § 5301 et seq., provide a cause of action for plaintiffs to bring their claims against HUD. Nor can plaintiffs demonstrate a waiver of sovereign immunity by the United States under the Administrative Procedure Act (“APA”), 5 U.S.C. § 701 et seq., that is applicable to their claims because suit against defendant Paul Rainwater, Executive Director of the LRA, or the LRA itself, would provide an adequate remedy to their claims pursuant to § 704 of that Act.
Second, plaintiffs fail to satisfy the redress prong of Article III’s standing requirement. Plaintiffs’ claimed injuries are that they unable to complete repairs on and return to their homes. Such injuries are redressable only by the LRA, the only entity capable of implementing the specific changes to the homeowners program upon which plaintiffs’ requested relief depends. Nevertheless, plaintiffs seek redress through HUD, but do not challenge the HCDA, the three special appropriations authorizing the disaster recovery CDBG program at issue in this case, or HUD’s regulations implementing the disaster recovery program. Because these legal restraints governing HUD’s interactions with the LRA will remain in place regardless of the outcome of this suit, the prospect of redress is far too speculative. And because review under the APA would only permit the Court to set aside HUD’s approval of the LRA’s program, it would not permit the Court to order HUD to compel the specific relief plaintiffs need to redress their injuries.
Third, plaintiffs’ challenge to HUD’s approval of the Road Home Program is moot. HUD has fully obligated the first two special appropriations, meaning that the LRA is now in full control of those

Case 1:08-cv-01938-HHK Document 38 Filed 07/08/09 Page 8 of 38
funds. Moreover, if this Court were to set aside HUD’s approval of the Road Home program, neither the Court, nor HUD, nor the LRA could reach the funds of the third special appropriation because Congress has directed that they may be used only for “otherwise uncompensated but eligible claims . . . under the Road Home program.” Pub. L. No. 110-116. Further, plaintiffs concede that this Court could not reach the more than $8.2 billion in funds that the LRA has already awarded under the Road Home program. Because the challenge to HUD’s approval is moot, the only live controversy before this Court is plaintiffs’ challenge to HUD’s enforcement failures in its “oversight and continuing approval” of the Road Home program. However, this claimed failure to act would be unreviewable under § 706(1) of the APA as construed in Norton v. So. Utah Wilderness Alliance (“SUWA”), 542 U.S. 55 (2004).
Finally, plaintiffs’ claims against HUD should be dismissed because plaintiffs have failed to state a claim for relief under §§3604(a), 3605(a), 3608(d) or (e)(5) of the FHA, or under § 5304(b)(2) of the HCDA. Plaintiffs have not alleged facts sufficient to sustain any of their claims against HUD. Moreover, plaintiffs cannot show that §§ 3604 or 3605 of the FHA apply to HUD’s actions, and they have not alleged a pattern of behavior by HUD that would be reviewable under §§ 3608(d) or (e)(5) of the FHA.
Accordingly, this Court should grant HUD’s motion to dismiss. II. PLAINTIFFS’ CLAIMS ARE NOT JUSTICIABLE AGAINST HUD
A. Neither the FHA Nor the HCDA Provide Plaintiffs With a Private Right of Action Against HUD, and Plaintiffs Cannot Proceed Against HUD under the APA Because Plaintiffs Have An Adequate Remedy in Suit Directly Against the LRA
Contrary to plaintiffs’ contention, they cannot avail themselves of the limited waiver of sovereign immunity found in 5 U.S.C. § 702. Pl. Opp’n at 16-19. Because neither the FHA nor the HCDA supply a private right of action against HUD, the only cause of action plaintiffs can invoke to proceed against HUD is the APA. However, the APA’s limited waiver of sovereign immunity does
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not apply when an adequate alternate remedy to suit under the APA exists. 5 U.S.C. § 704. Plaintiffs have alleged no claims against HUD that they have not (or could not have) also alleged against Rainwater and the LRA. Thus, the APA’s limited waiver of sovereign immunity does not apply in this instance, and the suit against HUD should be dismissed.
1. There is no private right of action against HUD under the FHA or the HCDA
Plaintiffs assert that they may avail themselves of the waiver of sovereign immunity found in 5 U.S.C. § 702 without proceeding under the APA. Pl. Opp’n at 37 (citing Schnapper v. Foley, 667 F.2d 102 (D.C. Cir. 1981)). However, plaintiffs concede that they can only proceed under alternate statutes if those statutes provide for a private right of action against HUD. Pl. Opp’n at 37 (“because both [the FHA] and the HCDA provide Plaintiffs with a direct right of action to challenge HUD’s discriminatory conduct, Plaintiffs need not proceed under the APA.”). The only case plaintiffs cite for the proposition that they may bring claims under alternate statutes using the waiver in 5 U.S.C. § 702 held that, despite this waiver of sovereign immunity, suit against the FCC could not proceed under the Public Broadcasting Act because it “provides no private right of action” against that agency. Schnapper, 667 F.2d at 107, 116. In this case, contrary to plaintiffs’ assertions, neither the FHA nor the HCDA supplies the requisite private right of action for plaintiffs to pursue their claims against HUD.
Plaintiffs cite no precedent for their claim that the private right of action found in § 3613 of the FHA allows them to bring this suit against HUD for violations of §§ 3604 or 3605. Pl. Opp’n at 36-37. Nor is this surprising as §§ 3604 nor 3605 do not apply to HUD’s challenged actions in this case. Plaintiffs cannot sustain their claim that HUD has “otherwise ma[d]e [housing] unavailable,” 42 U.S.C. § 3604(a), because they do not allege, nor could they allege, that HUD “has provided . . . housing []or housing-related services to consumers.” Jones v. Ofc. of Comptroller of the Currency, 983 F. Supp. 197, 202 (D.D.C. 1997), aff’d, 1998 WL 315581 (D.C. Cir. 1998). Accordingly, as in Jones, this Court
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should find that HUD “could not have denied housing or made it unavailable to anyone. The impact of alleged discriminatory practices by the institutions [a federal agency] supervises cannot be attributed to [the agency] itself. The [the agency]’s activities thus cannot fall within the strictures of Section 3604.” Id. For the same reason, this Court should find that § 3605 does not apply to HUD’s actions here because plaintiffs have not alleged, nor could they allege, that HUD has “engag[ed] in residential real estate-related transactions,” with consumers. 42 U.S.C. § 3605. Indeed, the HUD action plaintiffs challenge–oversight of a state government’s grant program–is explicitly regulated by § 3608, which requires the Secretary to “administer the programs and activities relating to housing . . . in a manner to affirmatively further fair housing.” Id. at § 3608(e)(5). Therefore, if, as plaintiffs urge, §§ 3604 and 3605 are interpreted to apply to HUD’s actions here, such an interpretation would impermissibly render § 3608 superfluous. See, e.g., NEA v. Finley, 524 U.S. 569, 609 (1998) (“Statutory interpretations that render superfluous other provisions in the same enactment are strongly disfavored.”) (citation omitted). Moreover, as demonstrated below, Congress chose not to create a private cause of action to enforce § 3608, and plaintiffs should not be permitted to override this congressional choice by extending §§ 3604 and 3605 beyond their boundaries. Thus, this Court should follow Jones and hold that neither §§ 3604 nor 3605 applies to HUD’s supervision of the LRA’s Road Home program, and so the private right of action in § 3613 cannot be used to bring this suit against HUD.
Plaintiffs’ remaining assertions that they have an implied right of action under the FHA and the HCDA to pursue violations of §§ 3608(d) or (e)(5) and 5304(b)(2) against HUD are similarly unfounded. In Alexander v. Sandoval, 532 U.S. 275 (2001), the Court held that there is a high bar that must be surmounted before a judge can find an implied right of action within a statute. Id. at 286. “[P]rivate rights of action to enforce federal law must be created by Congress . . . . Statutory intent . . . is determinative. Without it, a cause of action does not exist and courts may not create one, no matter how desirable that might be as a policy matter, or how compatible with the statute.” Id. at 286-87
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(emphasis added). Sandoval thereby clarified that statutory intent was the true lynchpin of the multifactor “implied private-cause-of-action” inquiry that the Court had earlier articulated in Cort v. Ash, 422 U.S. 66 (1975). Plaintiffs ignore this important clarification: in attempting to prove the HCDA supplies an implied right of action against HUD, they review the Cort factors without even mentioning Sandoval. Pl. Opp’n at 30-33. Further, in their parallel discussion concerning an implied right of action in the FHA, plaintiffs do not even reference Cort, let alone the more recent Sandoval. Pl. Opp’n at 38. As neither the FHA nor the HCDA demonstrates the requisite statutory intent to create an implied right of action against HUD, plaintiffs may proceed with claims against HUD, if at all, only under the APA.
Plaintiffs’ attempt to demonstrate that the FHA supplies an implied right of action against HUD is unconvincing. HUD does not contest that § 3608(d) and (e)(5), unlike §§ 3604 or 3605, apply to HUD, but while Congress created a cause of action to enforce other FHA provisions, see, e.g., § 3613, it did not create a private cause of action to enforce § 3608. Nor is there any other evidence that Congress intended a private right of action for the enforcement of § 3608. Jones, 983 F. Supp. at 203. For this reason, even prior to the Supreme Court’s holding in Sandoval, “[t]he majority of courts that . . . considered this issue . . . concluded that there is no implied private right of action under [§ 3608], and that an aggrieved person . . . must seek relief not under the FHA, but under the APA.” Id. at 202 (citing NAACP v. HUD, 817 F. 2d 149, 154 (1st Cir. 1987); Latinos Unidos de Chelsea En Accion v. HUD, 799 F.2d 774 (1st Cir. 1986); Lee v. Pierce, 698 F. Supp. 332, 334 (D.D.C. 1988)). See also Marinoff v. HUD, 78 F.3d 64 (2nd Cir. 1996), aff’ing 892 F. Supp. 493, 495 (S.D.N.Y 1995) (“the FHA provides no express or implied right of action against HUD”); PR Pub. Hsg. Admin. v. HUD, 59 F. Supp. 2d 310 (D.P.R 1999) (“In view of [other provisions crafting remedies under the FHA], it is unlikely that Congress absentmindedly forgot to mention an intended private action against HUD under section 3608(d).”). But see Young v. Pierce, 544 F. Supp. 1010 (E.D. Tex. 1982) (failing
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to apply Cort v. Ash factors but finding an implied private right of action to enforce § 3608(e)(5)). Similarly, while plaintiffs suggest the existence of an implied cause of action under § 5304,
courts that have considered the issue have reached exactly the opposite conclusion. See, e.g., Latinos Unidos, 799 F.2d 774, at 795 (“we hold that Congress did not intend to create a private right of action under the HCDA”); Payne v. HUD, 551 F. Supp. 1113 (S.D. Ohio 1982); Nabke v. HUD, 520 F. Supp. 5 (W.D. Mich 1981); People’s Hsg. Devel. Corp. v. City of Poughkeepsie, 425 F. Supp. 482 (S.D.N.Y. 1976). Cf. Montgomery Improvement Ass’n v. HUD, 645 F.2d 291, 295 (5th Cir. 1981) (finding a private right of action to enforce § 5309, the HCDA’s nondiscrimination provision). It is again notable that each court reached its conclusion before the Sandoval Court’s holding that “private rights of action to enforce federal law must be created by Congress.” Sandoval, 532 U.S. at 286. In light of the Supreme Court’s holding in Sandoval and the weight of precedent finding no private right of action to enforce §§ 3608(d) or (e)(5), 5304(b)(2), this court should find that no private right of action is available against HUD under these statutes.1
2. The APA waiver of sovereign immunity does not apply to HUD because other adequate remedies exist for plaintiffs’ grievances
Plaintiffs only potential cause of action against HUD would be under the APA, but the limited waiver of sovereign immunity found in § 702 applies only if “there is no other adequate remedy in a court.” 5 U.S.C. § 704. HUD’s motion to dismiss demonstrated that plaintiffs’ ability to bring claims against Rainwater (or the LRA) provides them an adequate remedy. HUD Mot. to Dismiss at 32-35. Plaintiffs allege, however, that remedies against Rainwater are not sufficient because they do not redress “HUD’s violation of the unique obligation that it is required to fulfill under federal fair housing
1 HUD reiterates that it takes no position as to whether the HCDA contains a private right of action against Rainwater or the LRA. Because plaintiffs may vindicate their HCDA claims against the state through other means, HUD Opp’n to Rainwater Mot. to Dismiss at 8-9, the availability of an HCDA claim against state defendants does not bear upon the existence of adequate alternate remedies through which plaintiffs can find relief.
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law.” Pl. Opp’n at 40 (emphasis in original). Yet plaintiffs never articulate what HUD’s unique obligation is.
Plaintiffs fail to allege any discriminatory behavior on the part of HUD that is separate or distinct from the behavior of Rainwater and the LRA. The entirety of plaintiffs allegations against HUD are that: (i) the LRA “proposed and developed” the Road Home program, “in consultation with HUD,” (ii) HUD “approved the Road Home grant formula,” and (iii) the LRA administers the Road Home program “subject to ongoing oversight and continuing approval of HUD.” Compl. ¶¶ 49-51. Each of these actions can only be considered discriminatory if, in fact, Rainwater (or the LRA) has discriminated in the design and implementation of the Road Home Program. Any remedy that would relieve the alleged harm caused by Rainwater’s actions would therefore be an “adequate remedy” for plaintiffs’ claims against HUD.2
Moreover, plaintiffs concede that D.C. Circuit precedent establishes § 704 as a bar to suit against a federal agency when the claim is for “fail[ure] to enforce compliance by federal-funding recipients with nondiscrimination requirements.” Pl. Opp’n at 43 (citing Wash. Legal Found. v. Alexander, 984 F.2d 483 (D.C. Cir. 1993), and Women’s Equity Action League v. Cavazos, 906 F.2d 742 (D.C. Cir. 1990)). Indeed, the D.C. Circuit has recently reaffirmed that “a plaintiff [can]not maintain an action under the APA directly against a federal agency for failure to investigate and rectify
2 Further, plaintiffs’ Complaint fails to make any allegation that HUD approved the Road Home Program despite actual knowledge – or even constructive knowledge – of its alleged discriminatory impact. Compl. passim. Both the FHA and HUD’s regulations implementing the disaster recovery CDBG program at issue in this case provide ample opportunities for members of the public, including plaintiffs, to comment on the grant programs and to lodge administrative complaints with the LRA and HUD. See, e.g., 42 U.S.C. § 3610; 24 C.F.R. § 6.10 et seq. Despite these opportunities for public involvement, plaintiffs make no allegation that they, or anyone else, put HUD on notice of the alleged discrimination by filing any comments or complaints about the design of LRA’s Road Home program. Compl. passim. Nor do they make any allegation that HUD otherwise had constructive notice that the Road Home program might impose a disparate impact. See id.
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the wrongdoing of a third party where Congress ha[s] provided the plaintiff with a private right of action against the third party.” Garcia v. Vilsack, 563 F.3d 519, 524-25 (D.C. Cir. 2009) (citing Council for the Blind v. Regan, 709 F.2d 1521, 1531-33 (1983) (en banc); Coker v. Sullivan, 902 F.2d 84, 89-90 (D.C. Cir. 1990); Women’s Equity, 906 F.2d at 750-51). See also Am. Disabled for Attendant Programs Today v. HUD, 170 F.3d 381 (3rd Cir. 1999); Jersey Heights Neighborhood Ass’n v. Glendening, 174 F.3d 180 (4th Cir. 1999). The Garcia court further emphasized that “a direct action against a regulated private party [is] an adequate remedy at law for whatever additional injury a plaintiff suffer[s] as a result of a federal agency’s failure to remedy that violation administratively.” Id. at 525. This understanding arises in part from the D.C. Circuit’s reading of Supreme Court precedent in Cannon v. Univ. of Chicago, 441 U.S. 677 (1979). As the court has explained, “Cannon suggests that Congress considered private suits to end discrimination not merely adequate but in fact the proper means for individuals to enforce Title VI [of the Civil Right Act of 1964, as amended 42 U.S.C. § 2000d] and its sister antidiscrimination statutes.” Women’s Equity, 906 F.2d at 751 (citing Canon, 441 U.S. at 704). Thus, because “other remedies are adequate, federal courts will not oversee the overseer.” Coker, 902 F.2d at 89.
In attempting to explain why redress against Rainwater is insufficient in this case, plaintiffs point exclusively to HUD’s oversight role, noting its “expertise and obligation to monitor grant recipients for compliance with civil rights and other program requirements.” Pl. Opp’n at 41. Similarly, in arguing that their claims against HUD are not moot despite the overwhelming majority of the CDBG funds having already been obligated to the state, plaintiffs suggest that “HUD has the authority to require Rainwater to use the funds that HUD has already disbursed and obligated to LRA.” Pl. Opp’n at 13. Thus, by their own concessions, plaintiffs are lodging suit “against a federal agency for failure to investigate and rectify the wrongdoing of a third party,” which is exactly the sort of claim that the D.C. Circuit has foreclosed. Garcia, 563 F.3d at 524-25.
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Plaintiffs argue, however, that the suit against HUD should be allowed because several district courts in other circuits have permitted claims against HUD to proceed in suits in which allegedly discriminating parties were also defendants. Pl. Opp’n at 41 (citing Thompson v. HUD, 348 F. Supp. 2d 398 (D. Md. 2005); Dean v. Martinez, 337 F. Supp. 2d 477 (D. Md. 2004)). However, Thompson itself acknowledged that its holding would be foreclosed if it were bound by D.C. Circuit precedent. See Thompson, 348 F. Supp. 2d at 422 (citing Women’s Equity, supra, 906 F.2d 742, as contrary precedent for the court’s contention that “tenants may present APA claims against HUD for discrimination grievances”). Moreover, both Thompson and Dean are distinguishable because plaintiffs in those cases alleged injuries against federal defendants that could not be remedied through claims against non-federal parties. In Thompson, plaintiffs claimed that HUD violated § 3608(e)(5) through its “failure adequately to consider a regional approach to desegregation of public housing.” 348 F. Supp. 2d at 408. Such a claim could not, by its very nature, be brought against the allegedly discriminating local government: it was HUD’s responsibility, the court opined, to consider a regional remedy. Similarly, in Dean, the plaintiffs challenged HUD’s sale of an apartment building, also a claim that could only be remedied directly by HUD. Dean, 336 F. Supp. 2d at 487 (finding that APA review is permissible because the suit against HUD “addresse[d] a different harm”). In the present case, by contrast, plaintiffs allege no distinct claims against HUD that they do not allege against Rainwater. Compl. ¶¶ 74-77 (alleging that all defendants have violated §§ 3604, 3605, 3608, and 5304).
Plaintiffs’ analogies to two, out-of-circuit, district court opinions, Henry Horner Mothers Guild v. Chi. Hsg. Auth., 824 F. Supp. 808, 819-20 (N.D. Ill. 1993), and Tinsley v. Kemp, 750 F. Supp. 1001, 1009 (W.D. Mo. 1990), get them nowhere because in both cases a complete remedy was impossible without new allocations of funds from HUD. Pl. Opp’n at 42. The plaintiffs in those cases alleged that housing authorities and HUD allowed residential units to deteriorate to the point that they were
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effectively illegally demolished. The claims against HUD were permitted because without HUD cooperation and funding, the housing authorities “could not correct alleged problems to any significant degree.” Tinsley, 750 F. Supp. at 1009 (emphasis added); Henry Horner, 824 F. Supp at 819 (quoting same). The housing authorities were so constrained in part because HUD provided the annual operating subsidies for the housing units, which are “determined by the difference between the housing authorities projected expenses and projected operating income.” Id. at 811. Thus, to resolve the complaints in Tinsley and Henry Horner, HUD would have had to provide new funding for any courtordered remedy. In this regard, these cases are similar to Lattimore v. NW Coop., 1992 WL 118383 (D.D.C. 1992), a case in which another court in this district permitted claims against HUD to go forward because, to bring about the relief plaintiffs sought, private defendants would have to “seek reimbursement from HUD.” Id. at *7. Here, plaintiffs do not allege that any new funds or reimbursements from HUD would be necessary to effectuate their desired remedy. Compl. passim. Thus, the analogy to these cases is unpersuasive, and they do not stand in the way of the dismissal of HUD from this suit.
Plaintiffs nevertheless attempt to align their claims with these decisions by contending that “a complete remedy would require both that Rainwater develop a nondiscriminatory formula, and that HUD approve and oversee the administration of the formula.” Pl. Opp’n at 41. But if this court orders Rainwater to develop a new homeowners compensation and incentives program that satisfies the requirements of the CDBG grant program, then HUD would already be obligated to approve and oversee the administration of that formula. See, e.g., 24 C.F.R. § 91.500(b) (allowing HUD to disapprove a plan only if it is inconsistent with the purposes of the Act, it is substantially incomplete, the certifications are not acceptable, or if HUD determines that the applicant has not complied with the CDBG requirements). No separate court order would be required. Cf. Crutchfield v. U.S. Army Corps. of Eng’rs, 230 F. Supp. 2d 687, 700 (E.D. Va. 2002) (holding that, because “the Corp is obligated to
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apply all of its regulations in considering the County’s revised permit application . . . whether or not this Court revokes [the] permit,” the court did not have power to order the agency to simply follow the law). And plaintiffs certainly have not made any allegation that HUD would flaunt its regulatory obligations by refusing to approve or oversee any revised compensation and incentives program. Compl. passim.
Thus, while plaintiffs put forth a range of non-precedential and inapposite district court opinions in an attempt to cloud the issue, they have not, because they cannot, overcome the clear mandate of § 704: the waiver of sovereign immunity in § 702 is available only if “there is no other adequate remedy.” In this case, plaintiffs’ complaint repeatedly emphasizes that the remedy they seek is recalculation of the Road Home grant awards. Such a remedy can only be effectuated by Rainwater and the LRA. Applying § 704 and the D.C. Circuit’s own clearly established precedent prohibiting APA claims against a federal agency when direct suit against a discriminating party is possible, this court should dismiss plaintiffs’ claims against HUD.
B. Plaintiffs Cannot Satisfy the Redress Prong of Article III’s Standing Requirement Plaintiffs’ claims against HUD concerning the LRA’s Road Home program are not redressable against HUD because plaintiffs cannot demonstrate a likelihood that an order “setting aside HUD’s approval of the [Road Home program] and requiring HUD to oversee the development of a new, nondiscriminatory,” program would likely remedy their claimed injuries. Pl. Opp’n at 8. Plaintiffs do not contest that an “adequate examination” of redressability requires that the court “identify the components of [plaintiffs’] alleged harm.” Freedom Republicans, Inc. v. Fed. Election Com’n, 13 F.3d 412, 416 (D.C. Cir. 1994). Here, the precise harm alleged by the individual plaintiffs is that they were “unable to complete repairs” to their homes because the “amount received from . . . the Road Home grants . . . fell short” of their homes’ “cost of damage.” Compl. ¶ 61 (emphasis added). See also id. ¶¶ 62-65 (same). Moreover, the individual plaintiffs allege that “[h]ad [their]
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Road Home grant[s] been calculated based on the cost of damage” to their homes, they would have received grants up to $150,000. See id. ¶¶ 61-65. Similarly, the precise harm alleged by organizational plaintiffs is that, “because of the Road Home program’s rule that grants may not exceed the pre-storm value of the home,” they have diverted resources “to ensure that homeowners could remain in their homes” or “rebuild their homes.” Id. ¶¶ 68, 70 (emphasis added). Indeed, the only conceivable basis to plaintiffs’ allegations that HUD has violated the Fair Housing Act by making housing “unavailable” to plaintiffs, that HUD has discriminated“in the terms and conditions of real estate-related transactions,” or that it did not “affirmatively further[] fair housing,” is that plaintiffs did not obtain compensation and incentive grants based on the cost of damage to their homes. See id. ¶¶ 74-77 (citing 42 U.S.C. §§ 3604(a), 3605(a), 3608(d), (e)(5), 5304(b)(2)). Thus, while plaintiffs contend that they can obtain relief merely through the replacement of the Road Home program with any nondiscriminatory alternative, the only remedy that would redress plaintiffs’ alleged harms would be for the LRA to develop a compensation and incentive grant “based on the cost of damage to the home.” Id. ¶ 60.
However, the prospect of such relief is far too speculative to support standing against HUD. Plaintiffs do not challenge the constitutionality of the HCDA or the special appropriations authorizing the disaster recovery CDBG programs. Compl. passim. Nor do they challenge HUD’s implementing regulations for the regular CDBG program or the disaster recovery CDBG program. See id. Thus, the legal regime governing the roles of HUD and the LRA in designing and administering the disaster recovery CDBG programs will remain in place regardless of the outcome of this litigation. Contrary to plaintiffs’ contention that “HUD and the state of Louisiana are jointly responsible for the [Road Home] program’s implementation,” Pl. Opp’n at 39-40 (emphasis added), this governing regime not only gives the LRA, as the CDBG grant recipient, the choice and the duties to design and administer the disaster recovery CDBG programs, but, more to the point, constrains the remedies that this Court could
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order against HUD.3 Thus, this Court would not be empowered to order HUD to dictate the terms of
the LRA’s use of disaster recovery CDBG to remedy plaintiffs’ alleged inability to rebuild their homes.
Contrary to plaintiffs claims, they cannot satisfy the redress requirement simply by obtaining an
order “vacating” HUD’s approval of the LRA’s program so that they can be afforded “‘the opportunity
to participate in’” the development of a new program, “‘the results of which might be more favorable to
[them].’” Pl. Opp’n at 8 (quoting dicta about the redress standard for procedural rights cases from Am.
Cmty. Bankers v. FDIC, 200 F.3d 822, 828-29 (D.C. Cir. 2007) (emphasis added)).4 Rather, where, as
here, a remedy to a plaintiffs’ injuries would depend not only on setting aside the current rule, but on
3 Congress made clear more than 30 years ago that the purpose of the HCDA is “to expand the role and responsibility of local governments in implementing community development programs,” and that HUD’s “review should be limited in its scope.” S. Rep. No. 93-693, reprinted in 1974 U.S.C.C.A.N. 4273, 4324, 4325 (emphasis added). See also id. at 4318 (purpose of the Act is “to expand State and local responsibility for planning and executing development activities.”) (emphasis added). Accordingly, the HCDA sets out more than 25 categories of eligible uses of funds by grantees. 42 U.S.C. § 5305(a). And the special appropriations providing disaster relief did not upset that balance. Pub. L. No. 109-148 (providing “[t]hat funds provided under this heading shall be administered through an entity or entities designated by the Governor of each State.”) (emphasis added); id. (providing that “each State shall submit a plan to [HUD] detailing the proposed use of all funds, including criteria for eligibility and how the use of these funds will address long-term recovery and restoration of infrastructure.’) (emphasis added); Pub. L. No. 109-234 (same).
In turn, HUD regulations provide that “[t]he choice of activities on which block grant funds are expended represents the determination by state and local participants, developed in accordance with the state’s program design and procedures, as to which approach or approaches will best serve these interests.” 24 C.F.R. § 570.482(a) (emphasis added). The regulations further make the state “responsible for the administration of all CDBG funds.” Id. § 570.489(a)(1) (emphasis added). HUD’s role is confined to ensuring that the state’s interpretation of the statutory and regulatory requirements “are not plainly inconsistent with the Act.” Id. § 570.480(c). To ensure the state’s role remains the primary one, HUD regulations give “maximum feasible deference” to the state’s interpretation of these requirements. Id. (emphasis added). Further, HUD may disapprove a state’s plan to use CDBG funds only if it is inconsistent with the purposes of the Act, it is substantially incomplete, the certifications are not acceptable, or if HUD determines that the applicant has not complied with the CDBG requirements. Id. § 91.500(b). However, as noted in the text, HUD regulations provide that “the certifications required therein are satisfactory to [HUD] . . . unless [HUD] has determined pursuant to [HUD’s review and audit functions set out in] § 570.493 that the State has not complied with the requirements of this subpart.” Id. § 570.485(c) (emphasis added).
4 See also id. (citing Motor & Equip. Mfrs. Ass’n v. Nichols, 142 F.3d 449, 457-58 (D.C. Cir. 1998); Ctr. for Auto Safety v. Nat’l Hwy. Trans. Safety Admin., 793 F.2d 1322, 1334 (D.C. Cir. 1986)).
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the selection of a particular course of action based on an unchallenged legal regime, the D.C. Circuit has held that “a quest for ill-defined ‘better odds’” in hopefully obtaining that result, “is not close to what is required to satisfy the redressability prong of Article III.” Nat’l Wrestling Coaches Ass’n v. Dep’t of Educ., 366 F.3d 930, 939 (D.C. Cir. 2004). In National Wrestling Coaches, the plaintiffs challenged the federal agency’s policy interpretations of Title IX of the Education Act Amendments of 1972, see 20 U.S.C. § 1681 et seq., and its implementing regulations. Id. The court held that even if the plaintiffs prevailed in setting aside the policy interpretation, the underlying statute and regulations would still be in place and would still define the grant recipients’ behavior. Id. at. 940. Accordingly, the court held that plaintiffs failed to demonstrate that a favorable ruling against the federal agency would alter the grant recipient’s conduct in a way that would redress plaintiffs’ injuries. Id. at 944.
Moreover, in light of the limited nature of plaintiffs’ challenge, plaintiffs’ request that this Court issue an order “requiring HUD to oversee the development of Road Home grants,” Pl. Opp’n at 8, that actually remedy plaintiffs’ claimed injury would fall well beyond the scope of the Court’s authority in this action. As demonstrated in HUD’s motion to dismiss and above, supra at 3-6, the only cause of action against HUD and the only possible waiver of sovereign immunity by the United States potentially available to plaintiffs is found in the APA. Under the APA, even if the Court were to find in favor of plaintiffs, it would be empowered only to set aside the agency’s action, or to order the agency to act, and leave to the agency the determination of appropriate action to take; the Court would not be empowered to compel specific remedial or affirmative action, or even to prohibit other future action by the agency. Thus, as the D.C. Circuit has explained, “when a court reviewing agency action determines that an agency made an error of law, the court’s inquiry is at an end: the case must be remanded to the agency for further action consistent with the corrected legal standards.” Cty. of Los Angeles v. Shalala, 192 F.3d 1005, 1011 (D.C. Cir. 1999) (quoting PPG Indus., Inc. v. U.S., 52 F.3d 363, 365 (D.C. Cir. 1995)). See also Crutchfield, 230 F. Supp. 2d at 699 (“This limited scope of
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judicial review [under the APA] bears directly on the issue of redressability.”). Moreover, the D.C.
Circuit has held that it is reversible error for a district court to attempt to retain jurisdiction to devise a
specific remedy for the agency to follow. See Cty. of Los Angeles, 192 F.3d at 1011–12. Thus,
contrary to plaintiffs’ contention, it is entirely speculative that an order setting aside HUD’s approval of
the LRA’s Road Home program or requiring it to oversee the program would force HUD to force the
LRA to develop a program that provides plaintiffs with grants based on the cost of damage to their
home.5
Additionally, there is no basis to plaintiffs’ claim that HUD is a “necessary” party to obtain
relief. Pl. Opp’n at 9. As demonstrated above, supra, if the Court were to order the LRA to propose a
revised program to remedy plaintiffs’ injuries, the existing implementing regulations would require
HUD to approve it, so long as it was for disaster recovery, “not plainly inconsistent with the Act,” and
otherwise in keeping with the requirements of the CDBG program. 24 C.F.R. § 91.500. Plaintiffs
have made no allegations that HUD would evade these requirements. Compl. passim. In such a
5 Plaintiffs’ cite a number of cases for the proposition that a court can force HUD to use its power to impose fair housing conditions on grant recipients. Pl. Opp’n at 10-11 (citing U.S. v. Gautreaux, 425 U.S. 284 (1976); NAACP v. HUD, 817 F.2d 149 (1st Cir. 1987); Shannon v. HUD, 436 F.2d 809 (3d Cir. 1970); NAACP v. Kemp, 721 F. Supp. 361 (D. Mass. 1989)). However, none of these cases are redress cases, and none advances plaintiffs’ claim. First, Gautreaux concerned only the physical scope of the remedy that a court could impose once HUD was found to have violated the Constitution. 425 U.S. at 296 (“The question presented in this case concerns only the authority of the District Court to order HUD to take remedial action outside the city limits of Chicago. HUD does not dispute the Court of Appeals’ determination that it violated the Fifth Amendment.”). Second, NAACP v. HUD found only that HUD’s alleged pattern, as opposed to a single instance (which is all that is alleged here), of alleged failure to affirmatively further fair housing, was reviewable under the APA. 817 F.2d at 158 (expressly distinguishing Heckler v. Chaney, 470 U.S. 821, (1985), and noting that Heckler held unreviewable an FDA decision not to investigate a particular alleged violation). Third, Shannon stands only for the non-controversial proposition that “[w]hen an administrative decision is made without consideration of relevant factors[,] it must be set aside.” 436 F.2d at 819. Plaintiffs makes no such allegation against HUD in this case. Compl. passim. Finally, NAACP v. Kemp merely applied, on remand, the holding of NAACP v. Boston concerning an alleged pattern of a failure by HUD to affirmatively further fair housing, which, again, is not an allegation that plaintiffs make here. 721 F. Supp. at 367. Moreover, apart from Gatreaux, each of these cases has been called into doubt by Norton v. South Utah Wilderness Alliance (“SUWA”), 542 U.S. 55 (2004). See infra, at 23-26.
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situation, plaintiffs cannot demonstrate that their claims are redressable against HUD. See Crutchfield, 230 F. Supp. 2d 687. In Crutchfield, the plaintiffs sought to enjoin the Corps from issuing a Clean Water Act permit for a sewer line. Id. at 689. The court held that “the Corp is obligated to apply all of its regulations in considering the County’s revised permit application . . . whether or not this Court revokes [the] permit.” Id. at 700. Accordingly, the court found that plaintiffs’ claim was not redressable against the Corps. Id. Thus when, as here, a court order would merely require an agency to do that which its own regulations already mandate, the claim cannot properly be considered redressable.
None of the cases cited by plaintiffs undermine the conclusion that plaintiffs’ claims are not redressable, as none are relevant to the case at hand. In America’s Community Bankers, plaintiffs challenged a rulemaking that assessed a fee on the plaintiffs’ member banks. 200 F.3d at 828. The court held the claim was redresssable because setting the rule aside “would redress the alleged injury by giving Bankers’s members their money back.” Id. Similarly, in Motor & Equipment Mfrs. Ass’n, the plaintiffs sought to set aside the EPA’s approval of the State of California’s anti-tampering regulations in violation the Clean Air Act. 142 F.3d at 457. The court held that plaintiffs’ claim was redressable because finding a Clean Air Act violation would make it unlikely that the EPA could re-enact the same rule. Id. In the present case, by contrast, plaintiffs cannot show that an order setting aside HUD’s approval of the LRA’s Road Home program would likely result in the LRA creating a new program that provided compensation and incentive grants to plaintiffs based on the cost of damage to their homes. In Center for Auto Safety, the plaintiffs claimed the agency’s rule lowering fuel-efficiency standards for certain model years of vehicles violated the Energy, Policy, and Conservation Act and lowered plaintiffs’ options for purchasing fuel-efficient vehicles. 793 F.2d at 1323. The court found plaintiffs’ claims redressable because the agency could make use of the statute’s system of penalties and credits to force the vehicle manufacturers to make improvements in the future if they failed to
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make them in the present. Id. at 1334. Unlike the present dispute, however, in none of these cases did the remedy to the plaintiffs’ injuries depend on the replacement of a challenged rule with a particular new rule that would require a specific outcome.6 Cf. Am. Cmty. Bankers, 200 F.3d at 828-29; Motor & Equip. Mfrs. Assn’n, 142 F.3d at 457-58; Ctr. for Auto Safety Hwy. v. Nat’l Hwy. Safety Traffic Admin., 793 F.2d at 1334.
Plaintiffs’ attempt to distinguish Allen v. Wright, 468 U.S. 737 (1984); Simon v. E. Ky. Welfare Rts. Org., 426 U.S. 256 (1976); Linda R.S. v. Richard D., 410 U.S. 614 (1973), and myriad circuit court cases applying the redress standard is similarly unavailing. Pl. Opp’n at 9. Plaintiffs claim that the sole basis for finding that plaintiffs in those cases could not establish the redress-prong of Article III’s standing requirement was the fact that the claimed harms arose from “third parties not before the court.” Id. However, the Ninth Circuit’s application of this line of cases in Rubin v. City of Santa Monica, 308 F.3d 1008 (9th Cir. 2002), demonstrates the lack of merit in plaintiffs’ claim. In Rubin, plaintiff brought suit against both the California Secretary of State and the City of Santa Monica challenging the city’s interpretation of the state’s election regulations. Id. at 1011-12. The Ninth Circuit affirmed the district court’s dismissal of the California Secretary of State, holding that plaintiff could not establish that “enjoining the Secretary of State from enforcing the election regulations would stop the City of Santa Monica from following them.” Id. at 1019. Similarly, in National Wrestling Coaches, supra, the D.C. Circuit focused its inquiry not on the fact that the third parties were not before the court, but on the fact that even if plaintiffs prevailed on the merits in their challenge to the federal agency decision at issue in the litigation, the underlying statute and regulations “would still be in place,” and under that statute and regulations, neither the federally funded entities, nor the federal
6 For the same reason, plaintiffs’ reliance on Action Alliance of Senior Citizens of Greater Phila. (“AASC”) v. Heckler, 789 F.2d 931 (D.C. Cir. 1986), see Pl. Opp’n at 20, is also without merit. The plaintiffs in AASC simply sought an order vacating the agency’s rule, and did not require a particular outcome to redress their injuries. See 789 F.2d at 938.
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agency, would be required to provide any remedy to plaintiffs’ claimed injuries. 366 F.3d at 939-40. The same is true in the present dispute.
Similarly unpersuasive is plaintiffs’ reliance on the “unequal footing” line of cases. Pl. Opp’n at 12 (citing CC Distribs., Inc. v. U.S., 883 F.2d 146 (D.C. Cir. 1989); W Va. Ass’n of Cmty. Health Ctrs. v. Heckler, 734 F.2d 1570 (D.C. Cir. 1984)). Under the holdings of these decisions, when a plaintiff challenges a competitive process, such as contract bidding, on the grounds that discrimination in the process prevents the plaintiff from competing on equal footing, the plaintiff need not demonstrate that, but for the discrimination, he would have won the contract. Rather, because the harm to the plaintiff is the exclusion from the initial decision process, mere inclusion in the new process is sufficient redress. See CC Distribs., Inc., 883 F.3d at 151. But these “unequal footing” cases are inapposite here. Cf. National Wrestling Coaches Ass’n, 366 F.3d at 944. Plaintiffs are not alleging an unequal ability to participate in the initial grant formula development process, and so they cannot claim that a mere opportunity to participate in the development of the new process is sufficient redress. Rather, they allege a disparate impact in the LRA’s administration of its Road Home program, and the only remedy that would redress their claimed injuries is not, as plaintiffs’ unconvincingly and belatedly suggest in their opposition, the chance that the LRA might come up with a new program, Pl. Opp’n at 11, but rather that the LRA specifically creates a program that provides a compensation grant “based on the cost of damage” to their homes. Compl. ¶ 60; see also id. ¶¶ 61-65, 68, 70.
In an effort to disclaim the overly speculative nature of the relief sought, plaintiffs suggest that they would be satisfied with any “nondiscriminatory” assistance program. Pl. Opp’n at 11. However, plaintiffs cannot maintain standing to pursue their claims against HUD by seeking anything less than a remedy to their claimed injuries. See Steel Co. v. Citizens Concerned for a Better Envt., 523 U.S. 83,107 (1998) (“Relief that does not remedy the injury suffered cannot bootstrap a plaintiff into federal court; that is the very essence of the redressability requirement.”). Rather, such a request would not be
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sufficiently targeted to remedy the plaintiffs’ personal injuries. See James v. City of Dallas, Tex., 254 F.3d 551, 568 (5th Cir. 2001). In James, plaintiffs alleged that they were injured because the City of Dallas and HUD had engaged in a practice of housing demolition in their neighborhood without proper notice that was allegedly racially discriminatory. Id. at 565. As in the suit at hand, plaintiffs requested that HUD be ordered “to remedy ‘the loss of housing . . . as well as the resulting blight.’” Id. at 568 (citation omitted). The court held plaintiffs could not meet the redress prong because of “the narrowness of the named [p]laintiffs’ claimed . . . [notice] injury, and the broad relief requested that does not address the particular injury suffered by these . . . [p]laintiffs.” Id. at 567. The Fifth Circuit found this claim amounted to nothing more than “‘a generalized grievance shared in substantially equal measure by all or most citizens,’” and, as such, “c[ould ]not provide standing to request injunctive relief.” Id. at 568 (quoting Warth v. Seldin, 422 U.S. 490, 499 (1975)). As in James plaintiffs, if plaintiffs’ request here is read to seek anything less than a remedy to their claimed injuries, and is construed instead solely as a request to eliminate racial disparities in the administration of the LRA’s disaster recovery CDBG program, it would become nothing more than a generalized grievance, which is insufficient to confer standing. See Steel Co., 523 U.S. at 107. See also Schlesinger v. Reservists Comm. to Stop the War, 418 U.S. 208, 220 (1974) (“standing to sue may not be predicated upon an interest of the kind alleged here which is held in common by all members of the public, because of the necessarily abstract nature of the injury all citizens share.”).
C. HUD’s Approval of Louisiana’s Road Home Program is Moot Plaintiffs challenge to HUD’s approval of the LRA’s Road Home compensation and incentive program is moot, and the only live part of this controversy concerns HUD’s alleged “continued approval and oversight” of the state’s disaster recovery program. First, City of Houston, Tex. v. HUD, 24 F.3d 1421 (D.C. Cir. 1994), disposes of plaintiffs’ challenge to HUD’s approval of Louisiana’s Road Home program because HUD has fully obligated the
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disaster recovery CDBG funds provided by the first and second special appropriations at issue in this case. HUD has fully obligated the $6,210,000,000 that HUD allocated to Louisiana pursuant to Pub. L. No. 109-148. See 71 Fed. Reg. 7666, 7666 (Feb. 13, 2006); Decl. of Jessie Kome in Support of HUD’s Mot. to Dismiss (“Kome Decl.”) ¶ 25 (noting that as of March 6, 2009, HUD has obligated $12,400,000,000 to Louisiana). Similarly, HUD has fully obligated the $4,200,000,000 allocated to Louisiana pursuant to Pub. L. No. 109-234. See 71 Fed. Reg. 63337, 63337 (Oct. 30, 2006); Kome Decl. ¶ 25. Accordingly, resolution of plaintiffs’ challenge to the first two special appropriations is controlled by the D.C. Circuit’s “unequivocal[]” holding that “once the relevant funds have been obligated, a court cannot reach them in order to award relief.” City of Houston, 24 F.3d at 1426.
Contrary to plaintiffs’ claims, Pl. Opp’n at 12-14, the principles of City of Houston are fully applicable in regard to the obligated funds in this case: the obligated funds are no longer available to redress plaintiffs claims because they have already been distributed or allocated elsewhere. Cf. City of Houston, 24 F.3d at 1425 (noting that HUD allocated the funds at issue “to hundreds of other cities across the nation”). Plaintiffs challenge Option 1 of the Road Home program, but this is not the only approved Hurricane Katrina disaster recovery CDBG program administered by the LRA for which HUD has obligated funds. The LRA also administers infrastructure, economic development, and other housing programs, including Small Rental Property, Low-Income Housing Tax Credit Piggyback, Supportive Housing, and First Time Home Buyer programs, among others. See HUD Mot. to Dismiss at 14. HUD has fully obligated funds to each of these programs from the first two appropriations, and the state has made significant expenditures in administering them. See Disaster CDBG Program Appropriations, Allocations and Expenditures - May 2009 (available at: www.doa.louisiana.gov/cdbg/drreports.htm). And while there are significant balances in several of the programs to date, the state still has major obligations it must pay for, such as reimbursing the State Land Trust for the more than 9,200 properties acquired under Options 2 and 3 of the Road Home
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program, as well as significant compliance and assurance programs. See Road Home Updates 2009 (available at: www.doa.louisiana.gov/cdbg/drreports.htm). Thus, the funds from the first two special appropriations are obligated and unavailable to HUD to satisfy plaintiffs’ claims.
Citing two cases from outside this Circuit, plaintiffs claim that City of Houston should not control in this case. Pl. Opp’n at 12-14 (citing Davis v. HUD, 627 F.2d 942 (9th Cir. 1980), and NAACP, Boston Ch. v. Kemp, 721 F. Supp. 361 (D. Mass. 1989)). Neither the facts of Davis nor Kemp are like those at issue here. In Davis, the plaintiffs challenged a community’s failure to meet the requirements of its annual housing assistance plan. 627 F.2d at 943. The court held that the case was not moot because HUD regulations applicable to the community’s grant expressly provided that “the community’s failure to meet past obligations could result in conditioning of ‘approval of a succeeding year’s application.’” Id. at 945 (quoting 24 C.F.R. §§ 570.909(e)(2), (f)(2), 570.910(b)(9), & (b)(10)) (emphasis added). Plaintiffs cannot dispute that the funds at issue in this case are the product of special appropriations and that, absent additional congressional action, there will be no further appropriations. In Kemp, moreover, the court expressly distinguished the situation it faced from the issue before this Court, finding that “this is not a case involving a single improper funding decision, for which there is no longer a viable remedy.” 721 F. Supp. at 367 (emphasis added) (citing SE Lake View Neighbors v. HUD, 685 F.2d 1027 (7th Cir. 1982)). Thus, Kemp, by its own terms does not apply to this case. Accordingly, City of Houston, rather than Davis and Kemp, control resolution of plaintiffs’ challenge to HUD’s approval of Louisiana’s use of the funds from the first two appropriations.
Further, if this Court were to set aside HUD’s approval of the LRA’s Road Home program, neither this Court, nor HUD nor the LRA, could reach the funds from the third special appropriation. The third special appropriation expressly provided an additional $3,000,000,000 solely for the LRA’s Road Home program. Pub. L. No. 110-116 (appropriating “$3,000,000,000 for [HUD] . . . to enable [it] to make . . . grants to the State of Louisiana solely for the purpose of covering costs associated with
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otherwise uncompensated but eligible claims that were filed on or before July 31, 2007, under the Road Home program administered by the State in accordance with plans approved by the Secretary.”). Because Congress has specifically directed that these funds only be used for the Road Home program, if the Court were to set aside HUD’s approval of the program, the funds could not be used for any other purpose.
Likewise, and contrary to plaintiffs’ assertion that “no part of this action is moot,” Pl. Opp’n at 12, plaintiffs themselves effectively concede that part of their challenge is moot. Plaintiffs admit that the Court would not be empowered to order the return of the disaster recovery CDBG funds already “awarded to particular homeowners” to date. Pl. Opp’n at 13. To date, funds already “awarded to particular homeowners” represent more than $7.95 billion. See www.road2la.org/newsroom/stats.htm. In light of their concession that the Court would not be empowered to seek return of these funds, plaintiffs effectively admit that is too late to maintain their challenge to HUD’s approval of Louisiana’s Road Home program. In addition, the program itself is nearing completion. See www.road2la.org/homeowner/default.htm (indicating that the last day to apply to the Road Home program was July 31, 2007, and the last day to complete an initial appointment to review the application was December 15, 2007); www.road2la.org/newsroom/stats.htm (indicating that, as of June 23, 2009, the LRA has considered 151,695 applicants, and has completed processing for 131,831 for a total of $8.2 billion). Therefore, plaintiffs’ challenge to HUD’s approval of Louisiana’s Road Home program is almost identical to the situation in SE Lake View Neighbors v. HUD, 685 F.2d 1027 (7th Cir. 1982). In that case, the Seventh Circuit held that plaintiffs could not enjoin federal funding of a disputed project because the project at issue was so far along that the relief requested by plaintiffs had become “valueless at this late stage of the proceedings.” 685 F.2d at 1037. Similarly, the Road Home program is so far along that it is no longer practical to set it aside and return the funds to HUD, even if the Court could reach the already obligated funds.
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In light of the Court’s inability to reach the first and second appropriations, and because Congress specifically directed that funds in the third appropriation be used only for the Road Home program, it would be “impossible for the court to grant ‘any effectual relief,’” for plaintiffs’ challenge to HUD’s approval of Louisiana’s Road Home Program. City of Erie v. Pap’s A.M., 529 U.S. 277, 287 (2000) (citation omitted). Thus, “any opinion as to the legality of the challenged action would be [impermissibly] advisory.” Id. For this reason, plaintiffs’ challenge to HUD’s approval of the Road Home program is moot, and, the only live controversy before this Court concerns HUD’s “continuing approval and oversight” of Louisiana’s Road Home Program. Compl. ¶ 51.
D. Plaintiffs’ Claims Under 42 U.S.C. §§ 3608(d), (e)5), 5304(b)(2) Are Unreviewable Plaintiffs’ remaining claim concerning HUD’s “continuing approval and oversight” of Louisiana’s Road Home Program, Compl. ¶ 51, is unreviewable under § 706(1) of the APA because it is exactly the sort of vague agency action the Supreme Court held unreviewable in Norton v. So. Utah Wilderness Alliance (“SUWA”), 542 U.S. 55 (2004). Contrary to plaintiffs’ contention, HUD does not claim that SUWA would–if plaintiffs’ were even proceeding under the APA–bar review under 5 U.S.C. § 706(2) of plaintiffs’ allegations that HUD’s initial approval of the Road Home program violated 42 U.S.C. §§ 3608(d), (e)(5) and 5304(b)(2). Rather, as demonstrated in HUD’s motion to dismiss and above, supra, plaintiffs’ claim that HUD violated these provisions is unreviewable for two other reasons. First, plaintiffs lack standing to challenge, among other things, HUD’s approval of the Road Home program and, second, their challenge to HUD’s approval is moot. Having established that HUD’s approval of the Road Home program is not reviewable for other reasons, HUD’s motion to dismiss demonstrated that this Court would not be able to review plaintiffs’ remaining claim that HUD’s “continuing oversight and approval,” Compl.¶ 51, violates §§ 3608(d), (e)(5) and 5304(b)(2) under § 706(1) of the APA. HUD’s alleged failure in “ongoing
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oversight and continuing approval” could not, as plaintiffs suggest, constitute final agency action reviewable under § 706(2). Rather, such a claim could not reasonably be construed as anything other than an alleged “failure to act,” which is reviewable only under § 706(1). Accordingly, plaintiffs’ §§ 3608(d), (e)(5) and 5304(b)(2) claims should be dismissed because of the Supreme Court’s controlling precedent in SUWA.
Plaintiffs’ effort to distinguish §§ 3608(d), (e)(5) and 5304(b)(2) from the statute at issue in SUWA is without merit, because the statutes are demonstrably similar in their lack of specificity, the precise attribute that the Court found determinative in SUWA. In the statute at issue in SUWA, Congress had declared that the policy of the United States is that “the public lands be managed in a manner that will protect the quality of scientific, scenic, historical, ecological, environmental, air and atmospheric, water resource, and archeological values” and “that, where appropriate, will preserve and protect certain public lands in their natural condition.” 43 U.S.C. § 1701(a)(8). The policies of the FHA are at least as non-specific. Cf. 42 U.S.C. § 3601 (declaring that “[i]t is the policy of the United States to provide . . . fair housing throughout the United States.”). Likewise, the specific statutory provision allegedly violated in SUWA provided that “the Secretary shall continue to manage such lands according to his authority under this Act and other applicable law in a manner so as not to impair the suitability of such areas for preservation as wilderness.” 43 U.S.C. § 1782(c). Again, §§ 3608(d), (e)(5) and 5304(b)(2) are at least as non-specific. Cf. 42 U.S.C. § 3608(d) (“All 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.”); id. § 3608(e)(5) (requiring HUD to “administer the programs and activities relating to housing and urban development in a manner affirmatively to further the policies of this subchapter.”); id. § 5304(b)(2) (providing that “any grant shall be made only if the grantee certifies to the satisfaction of [HUD] that . . . the grant will be conducted and administered in conformity with the Civil Rights Act of 1964 and the Fair Housing Act,
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and the grantee will affirmatively further fair housing.”). Thus, plaintiffs cannot convincingly distinguish the statute at issue in SUWA from that at issue here.
Moreover, none of the cases cited by plaintiffs advance their claims that HUD’s alleged violations of §§ 3608(d), (e)(5) and 5304(b)(2) are reviewable even without consideration of SUWA. In NAACP v. HUD, 817 F.2d 149 (1st Cir. 1987), the court addressed HUD’s “pattern . . . over time” of grant activity in Boston. Id. at 157. In such a situation, the court held that it “can compel an official to exercise his discretion where he has obviously failed or refused to do so.” 817 F.2d at 160 (citing Mastrapasqua v. Shaughnessy, 180 F.2d 999, 1002 (2d Cir.1950)). But plaintiffs here make no such allegation of a “pattern” of violations against HUD. Compl. passim. Indeed, the NAACP court expressly distinguished the situation before it from that in Heckler v. Chaney, 470 U.S. 821, (1985), where, as here, the plaintiffs challenged a single instance of a failure to act, and the Supreme Court found such a failure unreviewable. Id. at 838.
Plaintiffs also fail to acknowledge that Darst-Webbe Tenant Ass’n Bd. v. St. Louis Hsg. Auth., 417 F.3d 898, 909 (8th Cir. 2005), is sui generis and therefore does not have persuasive value. As HUD’s motion to dismiss demonstrated, the Darst-Webbe panel merely addressed its earlier order (which pre-dated SUWA) that the district court, on remand, determine whether HUD had assessed “‘those aspects of its proposed course of action that would further limit the supply of genuinely open housing and . . . assess[ed] those aspects of [the] proposed course of action that would increase that supply.’” Id. at 907 (citation omitted). In so doing, the court found that its standard of review was merely “to assess whether HUD exercised its broad authority in a manner that demonstrates consideration of, and an effort to achieve, [fair housing opportunities].” Id. Again, to the extent DarstWebbe is in any way inconsistent with SUWA, this Court should simply disregard the decision. However, even if this Court found Darst-Webbe persuasive, that court’s holding does not advance plaintiffs’ claim here, as plaintiffs do not allege that HUD failed to consider, or to make an effort to
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achieve, fair housing. Compl. passim. Finally, Thompson v. HUD, 2006 WL 581260 (D. Md.), addressed the scope of the Court’s
remedial powers after finding a constitutional violation. Plaintiffs do not allege any intentional discrimination here. Compl. passim. In any event, the court did not review the Thompson plaintiffs’ claims under § 706(1), but only under § 706(2). See id., at * 4. Thus, plaintiffs’ efforts to use inapposite precedent to distinguish the case at hand from SUWA are unavailing. Accordingly, plaintiffs’ claims are unreviewable under § 706(1). III. PLAINTIFFS HAVE FAILED TO STATE A CLAIM UPON WHICH RELIEF CAN
BE GRANTED Plaintiffs fail to allege a claim upon which relief can be granted. HUD Mot. to Dismiss at 4044. As plaintiffs concede, a complaint must “‘raise a right to relief above the speculative level.’” Pl. Opp’n at 51 (quoting Bell Atlantic v. Twombly, 550 U.S. at 555 (2007)). None of plaintiffs’ claims meet this requirement, however. Plaintiffs have failed to allege a claim under §§ 3604, 3605 and 3608 because they have not alleged that the Road Home Program, in its entirety, has a disparate impact on the African American community. Moreover, plaintiffs offer no cases in support of their contention that §§ 3604 and 3605 can be applied to HUD’s actions in this case. Similarly, plaintiffs have failed to allege that a single failure to administer a housing related program in furtherance of fair housing can constitute a violation of § 3608’s mandate that HUD “administer [its] programs and activities . . . in a manner affirmatively to further” fair housing. Finally, plaintiffs have conceded that they have failed to allege the elements of a violation under § 5304(b)(2) against HUD. Pl. Opp’n passim. A. Plaintiffs Have Failed to State a Claim Under 42 U.S.C. §§ 3604, 3605 and 3608
Against HUD As plaintiffs note, the Supreme Court recently held that “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Pl. Opp’n at 53 (quoting Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)
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(quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Plaintiffs’ claim of disparate impact discrimination under §§ 3604, 3605, and 3608 against HUD fails to meet this standard. First, plaintiffs cannot meet the requirement, which the court set out in Iqbal, that a complaint contain sufficient facts to “draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 129 S. Ct. at 1949. Plaintiffs’ complaint alleges that a funding formula that constitutes one part of the Road Home program has caused a disproportionate impact on African Americans, but it is an uncontested fact that the LRA and not HUD developed this formula – a point plaintiffs attempt to obscure by referring to it as “HUD’s formula” in the defense of their claim against HUD. Pl. Opp’n at 54. In explaining why, despite the LRA’s authorship of the formula, HUD might be “liable for the misconduct alleged,” plaintiffs point only to “HUD’s approval of the formula (and other actions).” Id. Yet, plaintiffs have alleged no facts that indicate HUD had a reason–or even the ability under existing regulations–to deny approval of the program. Supra at 7 n.2. The Twombly Court specifically rejected the validity of a claim supported by “‘no set of facts.’” Twombly, 550 U.S. at 561-63 (citation omitted). See also Aktieselskabet v. Fame Jeans Inc., 525 F.3d. 8, 15, 17 (D.C. Cir. 2008) (finding that “it has never been literally true, as Twombly noted, that a complaint is adequate unless “no set of facts” consistent with the complaint could support a claim . . . a complaint needs some information about the circumstances giving rise to the claims.”). As to the alleged “other actions,” such a vague assertion of wrongdoing has never been an acceptable allegation as it fails to provide “the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47 (1957). Plaintiffs’ Complaint gives no explanation of what specific actions HUD took or failed to take to cause the alleged disparate impact of the Road Home program, instead gesturing vaguely towards HUD’s “ongoing oversight and continuing approval” of the program. Compl. ¶ 51. HUD has not, therefore, had “fair notice” as to the misconduct alleged against it.
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for alleged defects in the Road Home formula, plaintiffs’ §§ 3604, 3605, and 3608 claims should still be dismissed because the alleged defects are not sufficient to raise a claim of disparate impact discrimination. As the Twombly Court explained, “when the allegations in a complaint, however true, could not raise a claim of entitlement to relief, ‘this basic deficiency should . . . be exposed at the point of minimum expenditure of time and money by the parties and the court.’” Twombly, 550 U.S. at 558 (quoting 5 Wright & Miller § 1216, at 233-34). Here, while plaintiffs have alleged facts that, if taken as true, might allow a reasonable inference that one part of the grant “formula” in the Road Home program–examined in isolation–has a disparate impact on African Americans, they have alleged no facts that indicate that the program in its entirety imposes a statistically significant disparate impact on African Americans. Thus, their allegations, “however true, could not raise a claim of entitlement to relief.” Id. The LRA’s Road Home program does not simply distribute funds based solely on the value of a home. The program also provides up to $50,000 in Additional Compensation Grants for homeowners with household incomes no more than 80 percent of the median income in the parish where the house was located. HUD Mot. to Dismiss at 12-13. In addition, it provides Individual Mitigation Measures and Elevation Incentives to eligible homeowners, without reference to the property value of the homes. Id. The statistics and facts that plaintiffs present to demonstrate that African-American home values are lower than those of whites are not, therefore, sufficient to create a “reasonable inference” that the Road Home program imposes a disparate impact on African Americans. See id. at 41-42. To survive this motion to dismiss, plaintiffs would need to allege some set of facts that would support the contention that, even with the potentially mitigating measures of the Additional Compensation Grants and the availability of other funds untethered to home values, the Road Home program still disparately impacts African Americans. See id. at 43. Plaintiffs have alleged no facts at all regarding the effects of the Individual Mitigation Measures and the Elevation Incentives, Compl. passim, and have simply put forth the conclusory statement in the Complaint that “[t]he
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Additional Compensation Grant . . . does not eliminate the discriminatory disparities in grant amounts.” Compl ¶ 59. But the Iqbal and Twombly Courts specifically found that if “allegations are conclusory,” they are “not entitled to be assumed true.” Iqbal, 129 S. Ct. at 1951 (citing Twombly, 550 U.S. at 554-55).
Finally, as demonstrated above, supra at 4, plaintiffs have not even shown that §§ 3604(a) and 3605(a) are applicable to HUD’s actions in this case. They have failed to cite a single case supporting their contention that §§ 3604(a) and 3605(a) are meant to govern HUD’s supervision of the LRA programs. Plaintiffs have also put forth no case law in support of their contention that HUD’s actions in connection with the development and administration of a single grant formula can constitute a violation of § 3608(d) or (e)(5). Plaintiffs only cite cases in which § 3608(d) and (e)(5) violations are claimed on the strength of allegations of a constitutional violation or a pattern and practice of discriminatory agency behavior. Pl. Opp’n at 56 (citing Otero v. NYC Hsg. Auth., 484 F. 2d 1122, 1134 (2d Cir. 1973), Darst-Webbe, 417 F. 3d at 907; NAACP, 817 F. 2d at 155; Lee v. Pierce, 698 F. Supp at 342). The Otero court looked to § 3608 to find further evidence of a constitutional mandate to “act affirmatively to achieve integration,” in the face of a constitutional violation. Otero, 484 F. 2d at 1133. Plaintiffs have alleged no such constitutional violation on the part of HUD in this case. Similarly, NAACP v. HUD found only that HUD’s alleged “pattern” of failure to affirmatively further fair housing was reviewable under the APA. 817 F.2d at 158. See also Darst-Webbe, 417 F. 3d. at 907 (finding HUD met its obligation to affirmatively further fair housing in its approval of a series of loans and housing plans over the course of “long history” of a revitalization project); Lee v. Pierce, 698 F. Supp at 342 (challenging a pattern of sales of homes to non-homeless individuals). Thus, plaintiffs have not demonstrated that the allegedly disparate impact of HUD’s actions in connection with a single grant constitutes a violation of § 3608(d) or (e)(5). As a result of this failure, and plaintiffs’ failure to allege facts sufficient to support a “reasonable inference” that HUD is liable for the disparate impact of
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Case 1:08-cv-01938-HHK Document 38 Filed 07/08/09 Page 36 of 38
the Road Home program, or even a “reasonable inference” that the program in its entirety has a disparate impact, this Court should dismiss the §§ 3604, 3605, and 3608(d) and (e)(5) claims against HUD. Iqbal, 129 S. Ct. at 1949.
B. Plaintiffs Have Failed to Allege the Elements of a Violation of 42 U.S.C. § 5304(b)(2) Against HUD
As HUD demonstrated in its motion to dismiss, plaintiffs have failed to state a claim under § 5304(b)(2) against HUD. HUD Mot. to Dismiss at 43-44. Section 5304(b)(2) states that a grant “shall be made only if the grantee certifies to the satisfaction of [HUD] that . . . the grantee will affirmatively further fair housing.” Plaintiffs do not allege that grantees failed to submit such certification. Compl. passim. HUD’s implementing regulations state that such “certification[s] . . . are satisfactory to [HUD] . . . unless [HUD] has determined pursuant to [its review and audit functions set out in] § 570.493 that the State has not complied with the requirements of this subpart.” 24 C.F.R. § 570.485(c). Plaintiffs do not allege that there was any evidence of past defects in Louisiana’s grant administration, nor any evidence of a defect in Louisiana’s certification. Compl. passim. Indeed, plaintiffs do not allege that HUD would have had any reason to know that the LRA certifications might be unsatisfactory or that the Road Home Program might have a disparate impact on AfricanAmericans. Compl. passim. IV. CONCLUSION
For the foregoing reasons, this Court should grant HUD’s motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim.
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Case 1:08-cv-01938-HHK Document 38 Filed 07/08/09 Page 37 of 38

Dated: July 8, 2009

Respectfully submitted,
MICHAEL F. HERTZ Acting Assistant Attorney General, Civil Division
CHANNING D. PHILLIPS Acting U.S. Attorney for the District of Columbia
/s/ James D. Todd, Jr. MICHAEL SITCOV Assistant Branch Director JAMES D. TODD, JR. Senior Counsel U.S. DEPARTMENT OF JUSTICE7 Civil Division, Federal Programs Branch 20 Massachusetts Avenue N.W. Washington, DC 20001 (202) 514-3378 (202) 616-8470 (fax) james.todd@usdoj.gov Attorneys for Defendant U.S. Department of Housing and Urban Development

7 Colleen Roh, a Summer Legal Intern at the Department of Justice, contributed substantially to the drafting of this brief.
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Case 1:08-cv-01938-HHK Document 38 Filed 07/08/09 Page 38 of 38

CERTIFICATE OF SERVICE

I hereby certify that on July 8, 2009, a copy of the foregoing document was filed electronically

via the Court’s ECF system, through which a notice of the filing will be sent to:

Joseph Marc Sellers, Esq. Llezlie Lloren Green, Esq. COHEN MILSTEIN SELLERS & TOLL PLLC 1100 New York Avenue, NW, Suite 500 Washington , DC 20005-3934 (202) 408-4600 jsellers@cohenmilstein.com lgreen@cohenmilstein.com
Damon T. Hewitt, Esq. Debo P. Adegbile, Esq. Matthew Colangelo, Esq. ReNika C. Moore, Esq. NAACP LEGAL DEFENSE & EDUCATIONAL FUND, INC. 99 Hudson Street, 16th Floor New York , NY 10013 (212) 965-2200 dhewitt@naacpldf.org dadegbile@naacpldf.org mcolangelo@naacpldf.org rmoore@naacpldf.org

Timothy E. Heffernan, Esq. WATT, TIEDER, HOFFAR & FITZGERALD, L.L.P. 8405 Greensboro Drive, Suite 100 McLean, Virginia 22102 (703) 749-1000 theffern@WTHF.com
A.J. Krouse, Esq. Renee Culotta, Esq. Suzanne M. Risey, Esq. FRILOT L.L.C. 1100 Poydras St., 36th Floor New Orleans, LA 70163 (504) 599-8016 akrouse@frilot.com rculotta@frilot.com srisey@frilot.com
Attorneys for Defendant, Paul Rainwater, Executive Director of the Louisiana Recovery Authority

M. Lucia Blacksher, Esq. GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER 228 St. Charles Avenue, Suite 1035 New Orleans , LA 70130 (504) 208-5050 lblacksher@gnofairhousing.org

Attorneys for Plaintiffs

/s/ James D. Todd, Jr. JAMES D. TODD, JR.

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 Case 1:08-cv-01938-HHK Document 39 Filed 07/08/09 Page 1 of 51

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING )

ACTION CENTER, et al.

)

)

Plaintiffs,

)

)

v.

)

)

U.S. DEPARTMENT OF HOUSING AND

)

URBAN DEVELOPMENT, et al.

)

)

Defendants.

)

No. 1:08-cv-1938-HHK

REPLY MEMORANDUM OF DEFENDANT PAUL RAINWATER IN SUPPORT OF HIS MOTION TO DISMISS AND MOTION TO TRANSFER

Case 1:08-cv-01938-HHK Document 39 Filed 07/08/09 Page 2 of 51
TABLE OF CONTENTS I. The Relief Sought by Plaintiffs Falls Outside the Scope of the Ex Parte Young
Exception to The Eleventh Amendment’s General Prohibition of Suits Against a State by its Own Citizens................................................................................................. 1 II. Plaintiffs’ Complaint Fails to Establish a “Case or Controversy” Against Rainwater Under Article III of the United States Constitution ......................................... 8 III. Sovereign Interests Are Implicated in this Case Through Louisiana’s Road Home Program ................................................................................. 11 IV. Louisiana Has Not Waived Its Sovereign Immunity Through its Receipt of Federal Funds or Participation in a Federal Program ................................ 13 V. “Revise” and “Recalculate” Equals Retrospective Relief............................................... 15 VI. Plaintiffs Fail to State a Claim Under the Fair Housing Act ........................................... 17 A. The Federal Appropriations Acts Do Not Restrict the Use of CDBG Funds to
Housing Programs .................................................................................................. 17 B. The State of Louisiana’s Certifications Do Not Amount to a Consent That
The Fair Housing Act Applies to the Compensation Grants ..................................... 18 C. There is No Jurisprudence Which Dictates That The Fair Housing Act Applies
to this Case .............................................................................................................. 20 1. Plaintiffs’ Claims Under § 3604(a).................................................................. 21 2. Plaintiffs’ Claims Under § 3605(a)................................................................. 24 3. Plaintiffs’ Claims Under § 3608(d)(5) ............................................................ 25
VII. Plaintiffs Cannot Maintain a Claim Against Rainwater Under the Housing and Community Development Act ...................................................................................... 26
VIII. Rainwater Has Met His Burden Under 28 U.S.C. § 1404(a)........................................... 29 A. The Threshold Inquiry is Met.................................................................................. 29 B. Venue Can be Considered Before Subject Matter Jurisdiction is Established........... 29 C. HUD’s Position is Inconsistent ............................................................................... 32
i

Case 1:08-cv-01938-HHK Document 39 Filed 07/08/09 Page 3 of 51 D. Private Interest and Public Interest Factors Favor Transfer of this Case
to the Middle District of Louisiana ......................................................................... 34 1. Private Interest Factors: Parties’ Choice of Forum; Where the Claim
Arose; Convenience of Parties/Witnesses .......................................................... 34 2. Public Interest Factors ....................................................................................... 36 3. Balance of Private and Public Interest Factors Favor Transfer of This
Litigation Involving Louisiana Properties ......................................................... 37 IX. Conclusion ................................................................................................................... 40
ii

Case 1:08-cv-01938-HHK Document 39 Filed 07/08/09 Page 4 of 51
TABLE OF AUTHORITIES Federal Cases 1st Westco Corporation v. School District of Philadelphia, 6 F.3d 108 (3d Cir. 1993) .................5 Adams v. Bell, 711 F.2d 161 (D.C.Cir. 1983) ............................................................................39 Air Line Pilots Ass'n v. Eastern Air Lines, 672 F.Supp. 525 (D.D.C. 1987) ...............................38 Akron Center for Reproductive Health v. Rosen, 633 F.Supp. 1123 (M.D. Ohio
1996), rev’d on other grounds, 497 U.S. 502 (1990)) ..............................................................7 Atasendero State Hospital v. Scanlon, 473 U.S. 234 (1985) ................................................ 14, 15 Atlantic Ship Rigging Co., Inc. v. McLellan, 288 F.2d 589 (3d Cir. 1961) .................................32 Barton v. Summers, 293 F.3d 944 (6th Cir. 2002)................................................................ 12, 16 Bowen v. Massachusetts, 487 U.S. 879 (1988) .........................................................................16 Calderon v. Ashmus, 523 U.S. 740 (1998)...................................................................................8 Cameron v. Thornburgh, 983 F.2d 253 (D.C. Cir. 1993) ...........................................................33 Canon v. The University of Chicago, 441 U.S. 677 (1979) ........................................................28 Cardenas v. ANZA, 311 F.3d 929 (9th Cir. 2002) ................................ ................................ ...... 13 Cheney v. IPD Analytics, LLC, 583 F.Supp.2d 108 (D.D.C. 2008) ............................................31 Children’s Health Care is a Legal Duty, Inc. v. Deters, 92 F.3d 1412 (6th Cir. 1996) .................5 Clifton Terrace Assoc., Ltd. v. United Technologies Corp., 929 F.2d 714 (D.C. Cir.
1991) ....................................................................................................................................22 College Savings Bank v. Florida Pre-Paid Post Secondary Education Expense
Board, 527 U.S. 666 (1999) ............................................................................................ 13, 14 Cort v. Ash, 422 U.S. 66 (1975) ................................................................................................28 County of Oneida v. Oneida Indian Nation, 470 U.S. 226 (1985). .............................................15 Demery v. Montgomery County, MD, 602 F.Supp.2d 206 (D.D.C.2009) ............................. 34, 36 DiPilato v. Commonwealth Ass'n of School Administrators Local 502, 588
F.Supp.2d 631 (E.D. Pa. 2008)..............................................................................................32
iii

Case 1:08-cv-01938-HHK Document 39 Filed 07/08/09 Page 5 of 51
Dotson v. Pacific Gas and Electric Co., 1993 WL 248644 (N.D. Cal. June 25, 1993), Aff’d, 46 F.3d 1140 (9th Cir. 1995)........................................................................................27
* Edelman v. Jordan, 415 U.S. 651 (1974)......................................................................... passim EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621 (D.C. Cir. 1997) ..............................20 * Ex Parte New York, 256 U.S. 490 (1921) ................................................................................3 Ex Parte Young, 209 U.S. 123 (1908) ................................................................................ passim Fitts v. McGhee, 172 U.S. 516 (1899) .........................................................................................6 Florida Assoc. of Rehabilitative Facilities, Inc. v. State of Florida Dept. of Health
and Rehabilitative Servs., 225 F. 3d 1208 (11th Cir. 2000)....................................................17 Florida Dept. of Health and Rehabilitative Services v. Florida Nursing Home
Assoc., 450 U.S. 147 (1981)..................................................................................................15 Focus Enterprises, Inc. v. Zassi Medical Evolutions, Inc., 2007 WL 1577844, at * 1
(D.D.C. May 31, 2007) .........................................................................................................31 Ford Motor Co. v. Dept. of Treasury, 323 U.S. 459 (1945) ................................................... 3, 11 Gourlay v. Forest Lake Estates Civic Association, 276 F.Supp. 2d 1222 (M.D. Fla.
2003) .............................................................................................................................. 21, 22 Gras v. Stevens, 415 F.Supp. 1148 (S.D.N.Y. 1976)................................................................5, 6 Great Socialist People's Libyan Arab Jamahiriya v. Miski, 496 F.Supp.2d 137
(D.D.C. 2007) .......................................................................................................................34 Green v. Mansour, 474 U.S. 64 (1985)......................................................................................16 Halprin v. Prairie Single Family Homes, 388 F.3d 327 (7th Cir. 2004) ......................................21 Hatfield v. Williams, 376 F.Supp. 212 (N.D. Iowa 1974)............................................................7 Hill v. Kemp, 478 F.3d 1236 (10th Cir. 2007) ................................ ................................ ............ 13 Hunter v. Johanns, 517 F.Supp.2d 340 (D.D.C. 2007)...............................................................34 * Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261 (1997)........................................... passim Jones v. Office of the Comptroller of the Currency, 983 F.Supp. 197 (D.D.C. 1997),
aff’d, 1998 WL 315581 (D.C. Cir. May 12, 1998) ................................ ................................ .25 Kazenercom TOO v. Turan Petroleum, Inc., 590 F.Supp.2d 153 (D.D.C. 2008) ........................30
iv

Case 1:08-cv-01938-HHK Document 39 Filed 07/08/09 Page 6 of 51
Kowal v. MCI Communcations Corp., 167 F.3d 1271 (D.C. Cir. 1994) ................................ ....19 Lane v. Peňa, 518 U.S. 187 (1986)............................................................................................15 Latinos Unidos de Chelsea v. Secretary of Housing, 799 F.2d 774 (1st Cir. 1986) .....................27 Library of Congress v. Shaw, 478 U.S. 310 (1986)................................. ................................ ...14 Litman v. George Mason University, 186 F.3d 544 (4th Cir. 1999)...........................................14 Long v. Van De Camp, 961 F.2d 151 (9th Cir. 1992)................................. ................................ ..7 Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) ....................................................... 9, 10, 11 Marotta Gund Budd & Dzera, LLC v. Costa, 340 B.R. 661 (D.N.H. 2006)................................32 Marshall County Health Care Auth. v. Shalala, 988 F.2d 1221 (D.C. Cir. 1993). ......................20 Mendez v. Heller, 530 F.2d 457 (2d Cir. 1976)............................................................................5 Meyer v. Holley, 537 U.S. 280 (2003) .......................................................................................21 Miami Bldg. & Constr. Trades Council v. Secretary of Defense, 493 F.3d 201 (D.C.
Cir. 2007) .............................................................................................................................10 Miller v. Insulation Contractors, Inc., 608 F.Supp.2d 97 (D.D.C. 2009)....................................35 Miller v. Toyota Motor Corporation, 2009 WL 1531658, at * 6-8 (D.D.C. June 2,
2009) .............................................................................................................................. 30, 36 Milsap v. HUD, 1990 WL 157516 (D. Minn. October 18, 1990), aff’d
42 F.3d 1394 (8th Cir. 1994) ................................ ................................ ................................ .27 Montgomery Improvement Association, Inc. v. HUD, 645 F.2d 291 (5th Cir. 1981) ....... 26, 27, 28 Montgomery v. STG Intern., 532 F.Supp.2d 29 (D.D.C. 2008) ..................................................36 Morongo Band of Mission Indians v. California State Board of Equalization, 858
F.2d 1376 (9th Cir. 1988).......................................................................................................32 Muskrat v. U.S., 219 U.S. 346 (1911)........................................................................................10 Nabke v. HUD, 520 F.Supp. 5 (W.D. Mich. 1981) ....................................................................27 National Fair Housing Alliance, Inc. v. Prudential Insurance Company of America,
208 F.Supp.2d 46 (D.D.C. 2002)...........................................................................................24 O’Quinn v. CNH America, LLC, 457 F.Supp.2d 678 (E.D. Va. 2006) .......................................32
v

Case 1:08-cv-01938-HHK Document 39 Filed 07/08/09 Page 7 of 51
Okpalobi v. Foster, 244 F.3d 405 (5th Cir. 2001) ........................................................................7 O'Shea v. Int'l Broth. of Teamsters, 2005 WL 486143, at *3 (D.D.C. March 2, 2005) ...............35 Otay Mesa Property L.P. v. U.S. Department of Interior, 584 F.Supp.2d 122 (D.D.C.
2008) ....................................................................................................................................36 Patsy v. Board of Regents of State of Florida, 457 U.S. 496 (1982).............................................8 Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89 (1984).................................... 1, 3, 4 People’s Housing Development Corp. v. City of Poukepsie, 425 F.Supp. 482
(S.D.N.Y. 1976).............................................................................................................. 27, 28 Pleune v. Pierce, 697 F.Supp. 113 (E.D.N.Y. 1988)..................................................................27 Raines v. Byrd, 521 U.S. 811 (1997) ...........................................................................................8 SEC v. Savoy Industries, Inc., 587 F.2d 1149 (D.C. Cir. 1978)..................................................29 Shawnee Tribe v. United States, 298 F.Supp.2d 21 (D.D.C. 2002).............................................38 Shell Oil Co. v. Noel, 608 F.2d 208 (1st Cir. 1979)..................................................................5, 6 Sherman v. Community Consol. Sch. Dist. 21, 980 F.2d 437 (7th Cir. 1992, cert.
denied, 508 U.S. 950 (1993)....................................................................................................7 Sheuer v. Rhodes, 416 U.S. 232, 237 (1974), overruled on other grounds, 468 U.S.
183 (1984) ...........................................................................................................................13 Sierra Club v. Flowers, 276 F.Supp.2d 62 (D.D.C. 2003)..........................................................39 Simon v. E. Kentucky Welfare Rights Org., 426 U.S. 26 (1976).................................................10 * Sinochem Int'l Co. Ltd. v. Malaysia Int'l Shipping Corp., 549 U.S. 422 (2007)................. 30, 31 Southend Neighborhood Improvement Assoc. v. St. Clair County, 743 F.2d 1207 (7th
Cir. 1984) .............................................................................................................................22 * Southern Utah Wilderness Alliance v. Norton, 315 F.Supp.2d 82 (D.D.C. 2004) ........ 37, 38, 39 State of Hawaii v. Gordon, 373 U.S. 57 (1963) ...........................................................................4 Stark v. Wickard, 321 U.S. 288 (1944) ......................................................................................11 Stewart Org., Inc., v. Ricoh Corp., 487 U.S. 22 (1988)..............................................................30 Thompson v. Thompson, 484 U.S. 174 (1988) ..................................................................... 28, 29
vi

Case 1:08-cv-01938-HHK Document 39 Filed 07/08/09 Page 8 of 51
* Touche Ross & Co. v. Redington, 442 U.S. 560 (1979)...........................................................28 Trout Unlimited v. U.S. Dep’t of Agriculture, 944 F.Supp. 13 (D.D.C. 1996) ........................... 39 United States v. Yonkers Bd. Of Educ., 893 F.2d 498 (2nd Cir. 1990)........................................15 Valley Forge Christian College v. Americans United for Separation of Church and
State, Inc., 454 U.S. 464 (1982). .............................................................................................9 Vann v. Kempthorne, 534 F.3d 741 (D.C. Cir. 2008)...............................................................4, 7 Verizon Maryland v. Public Service Commission of Maryland, 535 U.S. 635 (2002).................13 Weinstein v. Edgar, 826 F.Supp 1165 (N.D. Ill. 1993).................................................................5 Women’s Equity Action League v. Cavazos, 906 F.2d 742 (D.C. Cir. 1990) ..............................28 Wright v. Allen, 468 U.S. 737 (1984) .......................................................................................11 Statutes 12 U.S.C. § 1701.......................................................................................................................26 24 C.F.R. § 100.70(c)-(d)..........................................................................................................22 28 U.S.C. § 1404 .....................................................................................................................29 29 U.S.C. § 794 ........................................................................................................................15 42 U.S.C. § 2000d-7(1)................................. ................................ ................................ ...... 14, 15 42 U.S.C. § 5304................................................................................................................. 14, 26 42 U.S.C. § 3604 .......................................................................................................... 14, 21, 22 42 U.S.C. § 3605........................................................................................................... 14, 20, 24 42 U.S.C. § 3608................................................................................................................. 14, 25 Fed.R.Civ.P.12 .........................................................................................................................40 La. Rev. Stat. Ann. § 49:220.4 ....................................................................................................8 La. Rev. Stat. Ann. § 49:220.5(d)................................................................................................6
vii

Case 1:08-cv-01938-HHK Document 39 Filed 07/08/09 Page 9 of 51 Secondary Sources H.R. Rep. No. 100-122(I), (1987), as represented in 1987 U.S.C.C.A.N. § 3317 .......................27 Wright, Miller, Cooper & Amar, FEDERAL PRACTICE AND PROCEDURE, Jurisdiction
and Related Matters, 17A FPP § 4232 (2009) .......................................................................12
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Defendant Paul Rainwater respectfully submits this memorandum of law in support of his Motions to Dismiss and Motion to Transfer (Dkt. 28) and to reply to Plaintiffs’ Opposition to Defendants’ Motions to Dismiss and Motion to Transfer (Dkt. 34) and to Defendant U.S. Department of Housing and Urban Development’s Response to Motion to Dismiss and Motion to Transfer by Paul Rainwater in His Official Capacity as Executive Director, Louisiana Recovery Authority (Dkt. 33). I. The Relief Sought by Plaintiffs Falls Outside the Scope of the Ex Parte Young
Exception to The Eleventh Amendment’s General Prohibition of Suits Against a State by its Own Citizens Although Ex Parte Young, 209 U.S. 123 (1908), provides an exception to Eleventh Amendment immunity in suits involving the actions of state officials, it is well settled that “[t]he Eleventh Amendment bars a suit against state officials when the state is the real, substantial party in interest.” Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 101–02 (1984). In this case, Rainwater cannot be the real party in interest because he lacked authority over The Road Home compensation grant formula that is the alleged source of Plaintiffs’ damages. As will be demonstrated by statute and by Plaintiffs’ own admissions, the Louisiana Recovery Authority (“LRA”) was solely responsible for the development and implementation of The Road Home compensation grant formula at issue in this litigation. As such, Ex Parte Young cannot permit Plaintiffs to circumvent the Eleventh Amendment. Plaintiffs, in their Opposition Memorandum, concede the LRA is the real party in interest in this action and not Rainwater, stating:
The Louisiana Recovery Authority (“LRA”) is a Louisiana state agency created to administer funds for recovery from Hurricanes Katrina and Rita, including CDBG Disaster Recovery Grant Funds. Defendant, Paul Rainwater, is the LRA’s Executive Director. (Complaint, Dkt. 1, ¶ 19; Plaintiffs’ Opposition, Dkt. 34, p. 4.)
1

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Plaintiffs further concede the LRA, and not Rainwater, is responsible for proposing and
developing the Road Home grant formula and details of The Road Home program that is at issue
in this lawsuit. Plaintiffs admit “the LRA proposed and developed the Road Home grant formula
and details the Road Home program in consultation with HUD and subject to HUD’s on-going approval and oversight.” (Complaint, Dkt. 1, ¶¶ 49-51, Plaintiffs’ Opposition, Dkt.. 34, p. 4.)1
Finally, Plaintiffs again ignore the language contained in their Exhibit A to the Opposition
Memorandum, which provides that “[t]he Louisiana Recovery Authority (“LRA”) has been
charged by the Governor and Louisiana legislature with statutory responsibility for developing policy and the required actions.” (Plaintiffs’ Opposition, Dkt. 34-3, p. 3.)2
The declaration of Jesse Handforth Kome submitted in support of the Defendant HUD’s
Motion to Dismiss further bolsters Rainwater’s contention that the LRA is solely responsible for
the development and implementation of the Road Home grant formula. (Kome Declaration, Dkt.
22-2.) Ms. Kome is the Deputy Director, Office of Block Grant Assistance (“OBGA”), Office of
Community Planning and Development (“CPD”), U.S. Department of Housing and Urban
Development (“HUD”). (Kome Declaration, Dkt. 22-2, ¶1.) Ms. Kome submits the following:
The Road Home Program is administered by the State of Louisiana through the Louisiana Office of Community Development and the Louisiana Recovery Authority and is funded by HUD through the CDBG Program. The State of Louisiana is responsible for the implementation, design, and administration of the Road Home Program in conformance with the applicable CDBG Program requirements set by HUD.
1 “Homeowners who agree to use Road Home funds to rebuild or repair their homes are eligible for grants of up to $150,000.” (Complaint, Dkt. 1, ¶¶ 45-46.) “The grant amount is calculated using the lower of two baseline values: the home’s pre-storm or the cost of damage to the home.” (Complaint, Dkt. 1, ¶ 47.) 2 “Governor Kathleen Babineaux Blanco has prioritized housing redevelopment, infrastructure rehabilitation, and economic development as the primary uses of the two supplemental appropriations. The supplement CDBG recovery funds are available to the state subject to HUD approval of action plans, which describe how the funds will be used … Louisiana Office of Community Development, the agency that administers the state’s annual CDBG program, would administer the supplemental CDBG recovery program.” (Plaintiffs’ Opposition, Dkt. 34-3, p. 3.)
2

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As it developed, the Road Home Program, Louisiana ultimately chose to provide compensation and incentive grants to eligible homeowners affected by Hurricanes Katrina or Rita, of up to $150,000. Louisiana decided to base the amount of the compensation and incentive grants on the lower of the pre-storm, fair market value of the home, or the cost to repair the home. (Kome Declaration, Dkt. 22-2, ¶18.) (emphasis added). The fact that a senior government official with HUD has confirmed that “[t]he State of Louisiana is responsible for the implementation, design, and administration of the Road Home program,” and not Rainwater, further corroborates that Rainwater had no authority in the creation and implementation of the Road Home grant formula. (Kome Declaration, Dkt. 22-2, ¶15.) Thus, Plaintiffs’ claims are only against Rainwater in name and against the LRA and the State of Louisiana in actuality. Plaintiffs cannot pierce the shield of the Eleventh Amendment immunity simply by naming as defendant a party other than the State. Looking to substance rather than form, the Supreme Court has decided that such immunity should not depend on “the mere names of the titular parties but (on) the essential nature and effect of the proceeding, as it appears from the entire record.” Sheuer v. Rhodes, 416 U.S. 232, 237 (1974), overruled on other grounds, Davis v. Scherer, 468 U.S. 183 (1984)(citing Ex Parte New York, 256 U.S. 490, 500 (1921)). “The Eleventh Amendment bars a suit against state officials when “the state is the real, substantial party in interest.” Pennhurst State Sch. & Hosp., 465 U.S. at 101–02 (citing Ford Motor Co. v. Department of Treasury, 323 U.S. 459, 464 (1945). The United States Supreme Court has “previously held that the nature of a suit as one against the state is to be determined by the essential nature and effect of the proceeding.” Ford Motor Co., 323 U.S. at 463–64. The LRA, not Rainwater, is the real, substantial party in interest in this case.
3

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"The general rule is that relief sought nominally against an officer is in fact against the sovereign if the decree would operate against the latter.” Vann v. Kempthorne, 534 F.3d 741, 754–55 n.5 (D.C. Cir. 2008) (citing State of Hawaii v. Gordon, 373 U.S. 57, 58 (1963)). “[A] suit is against the sovereign if the judgment sought would expend itself on the public treasury or domain, or interfere with the public administration, or if the effect of the judgment would be 'to restrain the Government from acting, or to compel it to act.” Id. (citing Pennhurst State Sch. & Hosp., 465 U.S. at 101 n. 11). Plaintiffs’ claims against Rainwater create analogous concerns.
The relief Plaintiffs seek would clearly operate against the State of Louisiana through the LRA. The Federal Government provided Louisiana with Community Development Block Grant (CDBG) funds. These funds were distributed by the LRA to hurricane affected residents of Louisiana. Plaintiffs’ lawsuit will significantly interfere with Louisiana’s administration of the funds provided by the Federal Government to aid its residents. Further, the effect of a judgment in favor of Plaintiffs would be to compel the state government, through the LRA, to act because it is the statutory responsibility of the LRA, not Rainwater, to administer Road Home grant funds.
Plaintiffs contend that Ex Parte Young provides no shield for a state official confronted by a claim that he deprived another of a federal right under the color of state law. However, the instant case is distinguishable from Ex Parte Young, where the Supreme Court observed:
In making an officer of the state a party defendant in a suit to enjoin the enforcement of an act alleged to be unconstitutional, it is plain that such officer must have some connection with the enforcement of the act, or else it is merely making him a party as a representative of the state and, thereby attempting to make the state a party.
* * * The fact that the state officer, by virtue of his office, has some connection with the enforcement of the act, is the important and material fact, and whether it arises out of the general law, or is
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specially created by the act itself, is not material so long as it exists. Ex Parte Young, 209 U.S. at 157 (emphasis added). Therefore, unless the state officer has some responsibility to enforce the statute or provision at issue, the “fiction” of Ex Parte Young cannot operate. In Children’s Health Care is a Legal Duty, Inc. v. Deters, 92 F.3d 1412, 1422 (6th Cir. 1996), the Sixth Circuit held that absent enforcement or threatened enforcement by the Attorney General, an action against the Attorney General was precluded by the Eleventh Amendment. The court held: Consistent with the Young requirement of action on the part of the state official, we note that the phrase “some connection with the enforcement of the act” does not diminish the requirement that the official threatened and be about to commence proceedings. Children’s Health Care, 92 F3d at 1416 (citing Ex Parte Young, 209 U.S. at 155-56). “General authority to enforce the laws of the state is not sufficient to make government officials the proper parties to litigation challenging the law.” 1st Westco Corporation v. School District of Philadelphia, 6 F.3d 108, 113 (3d Cir. 1993)(citations omitted). Holding that a state official’s obligation to execute the laws is sufficient connection to the enforcement of a challenged statute would extend Ex Parte Young beyond what the Supreme Court has intended and held. See Weinstein v. Edgar, 826 F.Supp. 1165, 1167 (N.D. Ill. 1993); Mendez v. Heller, 530 F.2d 457, 460 (2d Cir. 1976) (holding an attorney general’s duty to support the constitutionality of challenged state statutes and his duty to defend actions in which the state is interested do not constitute enforcement of the statute in question); see also, Shell Oil Co. v. Noel, 608 F.2d 208, 211 (1st Cir. 1979) (citing Gras v. Stevens, 415 F.Supp. 1148, 1152 (S.D.NY 1976))(holding the
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mere fact that a governor is under a general duty to enforce state law does not make him a proper party defendant in every action attacking the constitutionality of a state statute).
“Of critical importance are the nature of the statute and the state officer’s connection with that statute.” Shell Oil Co. v. Noel, 608 F.2d 208, 212 (1st Cir. 1979). In the instant case, Plaintiffs seek an injunction against a state officer, Rainwater, alleging that his actions violate several federal statutes. (Plaintiffs’ Opposition, Dkt. 34, p. 31.) However, Rainwater did not have any responsibility or authority for the development and implementation of The Road Home compensation grant formula at issue. To the contrary, Plaintiffs admit this was the sole responsibility of the LRA. (Complaint, Dkt. 1, ¶¶ 49-51, Plaintiffs’ Opposition, Dkt. 34, p. 4.) Moreover, unlike the Minnesota Attorney General in Ex Parte Young, Rainwater did not threaten to commence, and was not about to commence, proceedings against Plaintiffs much less proceedings to enforce an allegedly unconstitutional act. Plaintiffs allege that The Road Home’s grant formula is discriminatory. But Rainwater is not the proper party to answer to this alleged discrimination because he was not responsible for the development or implementation of the formula.3 Plaintiffs have “manufactured” a cause of action against Rainwater in a direct attempt to circumvent the Eleventh Amendment of the Constitution.
Rainwater’s only connection to the development of the grant formula is derived from his general obligation as Executive Director of the Louisiana Recovery Authority. La. Rev. Stat. Ann. § 49:220.5(d). However, the U.S. Supreme Court in Fitts v. McGhee, 172 U.S. 516 (1899), rejected a threat of liability predicated on a governor’s general obligations as a executive of the state and held this was insufficient to avoid the consequences of the Eleventh Amendment. See
3 Paul Rainwater assumed the position of the Executive Director of the LRA in January 2008, after the design and implementation of The Road Home compensation grant program at issue had been completed. Further, Rainwater did not sign any applications or certifications for the receipt of CDBG funds; instead, all contracts with HUD were authorized and signed by the Division of Administration, an agency of the State of Louisiana.
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also Akron Center for Reproductive Health v. Rosen, 633 F.Supp. 1123, 1129–30 (M.D. Ohio 1986), reversed on other grounds, 497 U.S. 502 (1990); Hatfield v. Williams, 376 F.Supp. 212, 214 (N.D. Iowa 1974); Sherman v. Community Consol. Sch. Dist. 21, 980 F.2d 437, 441 (7th Cir. 1992), cert. denied, 508 U.S. 950 (1993) (holding attorney general’s general supervisory power insufficient to establish the connection with enforcement required by Ex Parte Young); Long v. Van De Camp, 961 F.2d 151, 152 (9th Cir. 1992).
“[I]n Fitts, the Supreme Court articulated the requirement that there be a ‘close’ connection or a ‘special relation’ between the statute and the defendant state officer's duty before the Eleventh Amendment bar could be overcome.” Okpalobi v. Foster, 244 F.3d 405, 413 (5th Cir. 2001)(citing Fitts, 172 U.S at 529–30). “Fitts illuminated the important precept that allowing state officers to be sued in lieu of the State absent some ‘special connection’ would permit the narrow exception to swallow the fundamental, constitutionally-based rule.” Id.
The other case on which Plaintiffs rely, Vann v. Kempthorne, 534 F.3d 741 (D.C. Cir. 2008), is also distinguishable from the case at bar because the duties and responsibilities of the defendants in Vann are fundamentally different from duties and responsibilities of Rainwater. As recognized by this Court in Vann, Ex Parte Young only permits courts to “direct affirmative action where the [state] officer having some duty to perform not involving discretion, but merely ministerial in its nature, refuses or neglects to take such action.” Vann, 534 F.3d at 752 (citing Ex Parte Young, 209 U.S. at 158). Unlike the Cherokee Chief and other tribal officers in Vann, Rainwater had no authority over or responsibility for the source of the Plaintiffs’ injuries. In Vann, the plaintiff sought “an injunction preventing Chief Smith from holding further elections without a vote of all citizens, including [plaintiff].” Vann, 534 F.3d at 754. In this case, Plaintiffs seek to have The Road Home compensation grants recalculated. The duty for the
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compensation grant formula’s creation and implementation falls squarely on the LRA, not
Rainwater. La. Rev. Stat. Ann. § 49:220.4.4 Thus, Plaintiffs’ are not seeking to compel
Rainwater to act. In actuality, Plaintiffs wish to compel the LRA to act.
As Executive Director of the LRA, Rainwater did not and does not have any
responsibility for the design of The Road Home compensation grant formula. The statute
empowering the LRA to implement the Road Home program only charges the Executive
Director with general responsibility to the governor and the LRA board. See La. Rev. Stat. Ann.
§ 49:220.4. Rainwater has no special connection to the statute authorizing the LRA to create and
implement The Road Home grant formula. Absent such a special connection, this Court should
conclude that that the Ex Parte Young doctrine does not apply and find that the suit against
Rainwater is barred by the Eleventh Amendment.
II. Plaintiffs’ Complaint Fails to Establish a “Case or Controversy” Against Rainwater Under Article III of the United States Constitution
Under Article III of the Constitution, the federal courts have jurisdiction over a claim
between a plaintiff and a defendant only if it presents a “case or controversy.”5 Raines v. Byrd,
521 U.S. 811, 818 (1997). In this way, the power granted to federal courts under Article III “is
4 La. Rev. Stat. Ann. § 49:220.4 states in pertinent part: A. (1) The Louisiana Recovery Authority is hereby created as a state agency within the office of the governor, division of administration. The authority shall be a body corporate with power to sue and be sued. The domicile of the authority shall be in the parish of East Baton Rouge. The purpose of the authority shall be to recommend policy, planning, and resource allocation affecting programs and services for the recovery, to implement programs and provide services to the recovery, and to identify duplication of services relative to the recovery where appropriate. The authority shall carry out its functions to support the most efficient and effective use of resources for the recovery. (2) The board shall provide leadership and oversight for the activities of the authority. (3) The authority shall have an executive director who shall be appointed by the governor and subject to confirmation by the Senate. The executive director shall serve at the pleasure of the governor and shall be paid a salary which shall be fixed by the governor. The executive director shall be responsible to the governor and the board. 5 While the Eleventh Amendment is jurisdictional in the sense that it is a limitation on the federal court’s judicial power, and, therefore, can be raised at any stage of the proceedings, the Supreme Court has recognized that it is not coextensive with the limitations on judicial power in Article III. Calderon v. Ashmus, 523 U.S. 740 n. 2 (1998) (citing Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261, 267, (1997)); Patsy v.Board of Regents of State of Florida, 457 U.S. 496, 515 n. 19 (1982).
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not an unconditioned authority to determine the constitutionality of legislative or executive acts.” Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 471 (1982).
In order to establish a “case or controversy” sufficient to give a federal court jurisdiction over their claims, Plaintiffs must satisfy three elements, which are said to constitute the “irreducible constitutional minimum” of Article III. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). First, they must show that they have suffered or are about to suffer “an injury in fact.” Second, there must be a causal connection between the injury and the conduct complained of. Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. Id. at 561. The party invoking federal jurisdiction bears the burden of establishing these three elements. Id. “These are not mere pleading requirements but an indispensable part of the plaintiff’s case.” Id. If any one of these three elements – injury, causation, redressability – is absent, Plaintiffs have no standing in federal court under Article III of the Constitution to assert their claim.
In Lujan, environmental groups filed suit against the Secretary of the Interior challenging certain provisions of the Endangered Species Act. Id. at 559. The Supreme Court held that the plaintiffs lacked standing and focused on the redressability prong of the “case or controversy” test. Id. at 569. The Court reasoned that since the plaintiffs attacked a decision of how to implement specific government programs instead of the decision to fund the particular programs causing them harm, the Secretary of the Interior had no controlling authority to redress the plaintiffs’ injuries. Id. at 568–69.
In this case, Plaintiffs fail to satisfy the “redressability” requirement of the case or controversy analysis. Paul Rainwater as Executive Director of the LRA has no power to redress
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the asserted claims of Plaintiffs, just like the Secretary of the Interior had no authority to redress
the Lujan plaintiffs’ claims. Id. at 568-69. In fact, under Louisiana law, only the LRA has the
authority to revise the grant formula and recalculate grants, the requested relief by the plaintiffs in their Complaint.6 It is further clear that as Rainwater has no power to redress the injuries as
alleged, Plaintiffs have no case or controversy with this defendant that will permit them to
maintain this action in federal court. See Muskrat v. U.S., 219 U.S. 346 (1911); Simon v. E.
Kentucky Welfare Rights Org., 426 U.S. 26, 41 (1976)(denying standing to indigent plaintiffs
who alleged unfair hospital services but only sued Treasury officials who were not able to
redress plaintiffs’ injuries); Miami Bldg. & Const. Trades Council v. Secretary of Defense, 493
F.3d 201, 205 (D.C. Cir. 2007)(“[W]hether claims of economic injury would be redressed by a
favorable decision depends on the unfettered choices made by independent actors not before the
courts and whose exercise of broad and legitimate discretion the courts cannot presume either to
control or to predict.”).
Rainwater cannot be ordered to act in any way that is beyond his authority to act in the
first place.
When Congress passes an Act empowering administrative agencies to carry on governmental activities, the power of those agencies is circumscribed by the authority granted. This permits the courts to participate in law enforcement entrusted to administrative bodies only to the extent necessary to protect justiciable individual rights against administrative action fairly beyond the granted powers.
Lujan, 504 U.S. at 577 (quoting Stark v. Wickard, 321 U.S. 288, 309–10 (1944)). Thus, it
logically follows that since the LRA proposed and developed the Road Home grant formula in
6 This begs the question of why Rainwater, and not the LRA, is a party to this suit. See Ford Motor Co. v. Dept. of Treasury, 323 U.S. 459, 464 (1945) (holding that when the State is the real, substantial party in interest, the State is allowed to invoke sovereign immunity). Here, Rainwater is not the real party in interest, and Plaintiffs’ suit is purposefully crafted so as to avoid Eleventh Amendment immunity. Rainwater requests that this Court follow the Supreme Court’s language in Edelman v. Jordan: “It is also well established that even though a State is not named a party to the action, the suit may nonetheless be barred by the Eleventh Amendment.” Edelman v. Jordan, 415 U.S. 651, 663 (1974) (citing Ford, supra).
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consultation with HUD, those are the parties vested with power by Congress to “revise” the Road Home formula and “recalculate” the awards. Lujan, 504 U.S. at 568–69. Rainwater retains no such authority to act beyond his granted powers to alter the formula. Plaintiffs urge Rainwater not only to act outside of the scope of his statutorily-granted authority but urge this Court to overstep the boundaries explicitly drawn by the Constitution—that Congress “define injuries…that will give rise to a case or controversy” and the Judiciary interpret the Congressional language. Lujan, 504 U.S. at 580.7 III. Sovereign Interests Are Implicated In This Case Through Louisiana’s
Road Home Program Rainwater contends that the Ex Parte Young doctrine does not extend to this case because regulation of Louisiana’s Road Home program is as much a core sovereign interest of Louisiana as regulating submerged land was for Idaho in Idaho v. Coeur d’Alene Tribe, 521 U.S. 261 (1997). In Coeur d’Alene Tribe, the Supreme Court held that Ex Parte Young doctrine did not authorize injunctive relief against state officials that would “diminish, even extinguish, the State’s control over a vast reach of lands and waters long deemed by the state to be an integral part of its territory.” Id. at 282. In Coeur d’Alene Tribe, the Supreme Court reasoned that proper application of the Ex Parte Young doctrine requires a case by case analysis that carefully considers whether a state forum is available to vindicate the federal interests, the nature of the federal rights to be vindicated, and the competing sovereignty interests of the state. Id. at 270-80. Specifically, the Court “noted that even prospective relief…would be barred if the relief sought is the functional
7 As the Supreme Court comments in Lujan, “[W]e must be sensitive to the articulation of new rights of action that do not have clear analogs in our common-law tradition. In exercising [its] power, however, Congress must at the very least identify the injury it seeks to vindicate and relate the injury to the class of persons entitled to bring suit.” Lujan, 504 U.S. at 590. In our case, allowing Plaintiffs’ suit to proceed would create a new right of action, pursuant to the FHA and the HCDA, to sue a state official with no authority to redress the alleged injuries. See Wright v. Allen, 468 U.S. 737, 752 (1984) (noting that adjudication of claim was proper only when consistent with separation of powers doctrine).
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equivalent of relief otherwise barred by the Eleventh Amendment and ‘special sovereignty interests’ are implicated.” Barton v. Summers, 293 F.3d 944, 951 (6th Cir. 2002) (citing Couer d’Alene Tribe, 521 U.S. at 281).
This case does present a special sovereign interest that requires dismissal based upon Eleventh Amendment immunity. Although it involves the use of federal funds, this case, at its core, concerns a state-designed disaster recovery program implicating an important state interest.
Created in the aftermath of Hurricane Katrina and Hurricane Rita in 2005, the Louisiana Recovery Authority (LRA) is the coordinating and planning body leading the most extensive rebuilding effort in American history. The central point for hurricane recovery in Louisiana, the LRA works closely with the Governor’s office, Homeland Security and Emergency Preparedness Program (GOHSEP) and partners with state and federal agencies to oversee more than $20 billion worth of programs, speed the pace of rebuilding, remove hurdles and red tape and insures that Louisiana recovers safer and stronger than before. See http://www.lra.louisiana.gov. It is also significant that, in Coeur d’Alene Tribe, Chief Justice Rehnquist and Justice Kennedy “called for a ‘fundamental reconceptualization’ of Ex Parte Young.” Wright, Miller, Cooper & Amar, FEDERAL PRACTICE AND PROCEDURE, Jurisdiction and Related Matters, 17A FPP § 4232 (2009). These two justices “would have limited the Young ‘exception’ to Eleventh Amendment cases in which no state forum was available to decide whether federal laws entitled a plaintiff to injunctive relief.” Id. (citing Couer D’Alene Tribe, 521 U.S. at 270-80 (Kennedy, J., joined by Rehnquist, C.J.)).8
8 Rainwater recognizes that seven justices refused to join this portion of the opinion. Although Verizon Maryland v. Public Service Commission of Maryland, 535 U.S. 635 (2002), controls this issue, commentators have noted the “newly developing effect of Coeur d’Alene Tribe.” Hill v. Kemp, 478 F.3d 1236, 1257 n. 25 (10th Cir. 2007).
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Although this lawsuit does not involve state land,9 the sovereign interests of the State of Louisiana are implicated through the disaster recovery program known as The Road Home program.10 It is in Louisiana’s sovereign interests that its residents be able to return to their homes as quickly as possible and through the mechanisms designed by the state’s Road Home program. The Road Home program is certainly a sovereign interest of the State of Louisiana. Plaintiffs’ suit implicates Louisiana’s interest in administering the funds it was granted to aid of its residents. See Couer D’Alene Tribe, 521 U.S. at 282 (“Any contention that the State is not implicated by the suit in a manner having an immediate effect on jurisdictional control over important public lands is belied by the complaint itself.”). If allowed to proceed, this action will significantly affect Louisiana’s ability to rebuild its communities. Id. IV. Louisiana Has Not Waived Its Sovereign Immunity Through Its Receipt
Of Federal Funds Or Participation In A Federal Program The U.S. Supreme Court has repeatedly held that waiver of a state’s sovereign immunity requires an explicit, emphatic statement. That is, a state waives its immunity from suit in federal court only where that waiver is “stated by the most express language or by such overwhelming implications from text as will leave no room for any reasonable construction.” Edelman v. Jordan, 415 U.S. 651, 653 (1974). The purpose of this “stringent” test is to “to be certain that the state in fact consents to suit.” College Savings Bank v. Florida Pre-Paid Post Secondary Education Expense Board, 527 U.S. 666, 675, 680 (1999). Thus, we will not find “consent by implication or by use of ambiguous language.” Library of Congress v. Shaw, 478 U.S. 310, 318 (1986).
9 Although not at issue in this lawsuit, under Option 3 of the Road Home program, Louisiana homeowners can elect to sell their homes to the state of Louisiana. http://www.road2la.org/homeowner/overview.htm. In this way, the Road Home program does involve state ownership of land, although Plaintiffs in this case did not exercise option 3. The State of Louisiana owns a substantial amount of property through Option 3 of The Road Home program. 10 See e.g., Cardenas v. Anza, 311 F. 3d. 929, 941 (9th Cir. 2002) (O’Scanlain concurring) (“would hold plaintiff’s claims to be barred under the Coeur d’Alene exception to Ex Parte Young.”).
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“A state does not waive its sovereign immunity through its mere receipt of federal funds or participation in a federal program.” Atasendero State Hospital v. Scanlon, 473 U.S. 234, 246– 47 (1985). Instead, Congress must also express “a clear intent to condition participation . . . on a state’s consent to waive its constitutional immunity.” Id. at 247; Litman vs. George Mason University, 186 F.3d 544, 554 (4th Cir. 1999) (recognizing Congress must “codify a clear, unambiguous and an unequivocal condition of waiver.”)
Further, HUD’s contention that 42 U.S.C. § 2000d-7(1) operates as a waiver of Louisiana’s, and presumably Rainwater’s, sovereign immunity under the Eleventh Amendment is misguided. As HUD asserts, 42 U.S.C. § 2000(d)-7(1) provides that a State is not immune from suits in federal court involving violations of “Title VI of the Civil Rights Act of 1964 or the provisions of any other Federal statute prohibiting discrimination by recipients of Federal financial assistance.” 42 U.S.C. § 2000d-7(1).
Plaintiffs have not sued Rainwater under Title VI of the Civil Rights Act of 1964. Plaintiffs have asserted claims under Title VIII of the Civil Rights Act of 1968, 42 U.S.C. §§ 3604, 3605, and 3608 (the “Fair Housing Act” or “FHA”), and the Housing and Community Development Act of 1974, 42 U.S.C. § 5304 (the “HCDA”). (Complaint, Dkt. 1, ¶¶ 74-77; Plaintiffs’ Opposition, Dkt. 34, p. 1.) Thus, Louisiana could not have waived its immunity on this basis because Plaintiffs’ have not alleged a violation of Title VII of the Civil Rights Act of 1964.
It should also be noted that the cases on which HUD relies for the proposition that the Supreme Court has agreed that the receipt of Federal funds operates as a waiver of Eleventh Amendment immunity both involved claims under the Rehabilitation Act, 29 U.S.C. § 794, see Lane v. Peňa, 518 U.S. 187 (1986), as did the case to which Lane was a response, See
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Atascadero State Hospital v. Scanlon, 473 U.S. 234 (1985). 42 U.S.C. § 2000d-7(1) expressly lists the Rehabilitation Act as a statute under which a state waives its Eleventh Amendment immunity by the receipt of federal funds, but it does not list either the FHA or the HCDA.
In the instant case, this Court should reject HUD’s flawed argument as neither the State of Louisiana nor Rainwater has consented to the jurisdiction of this Court for these claims by Plaintiffs through the receipt of federal funds in the Road Home program.11 V. “Revise” and “Recalculate” Equals Retrospective Relief
Through a tortured and disingenuous analysis, Plaintiffs conclude their request for injunctive relief to “revise” the grant formula and “recalculate” grants “falls comfortably on the prospective side of [the damages] line.” (Plaintiffs’ Opposition, Dkt. 34, p. 23.) However, any claim for retroactive monetary relief, under any name, is barred. United States v. Yonkers Bd. Of Educ., 893 F.2d 498, 503 (2d Cir. 1990); County of Oneida v. Oneida Indian Nation, 470 U.S. 226, 251–52 (1985).
“In determining whether the doctrine of Ex Parte Young avoids an Eleventh Amendment bar to suit, a court need only conduct a ‘straight forward inquiry into whether [the] complaint alleges an ongoing violation of federal law and seeks relief properly characterized as prospective.’” Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261, 296 (1997).
Here Plaintiffs seek declaratory relief to revise an alleged discriminatory grant formula. The primary objective of Plaintiffs’ suit is to recalculate their respective Road Home compensation grants through a revision of the grant formula. Plaintiffs principally, and
11 The fact that the LRA explicitly agreed to obey federal law in administering the program can hardly been deemed as an express waiver of Eleventh Amendment immunity. This agreement merely stated a customary condition for any participation in a federal program by the state, and Edelman already established that neither such participation in itself, nor a commitment to obey federal law, is sufficient to waive the protection of the Eleventh Amendment. See Florida Dept. of Health and Rehabilitative Services v. Florida Nursing Home Assoc., 450 U.S. 147, 150 (1981)(citing Edelman, 415 U.S. at 673-674).
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incorrectly, rely on Bowen v. Massachusetts, 487 U.S. 879 (1988), for the contention that the damages they seek here are not “money damages,” but instead specific injunctive and declaratory relief. (Plaintiffs’ Opposition, Dkt. 34, pp. 17-18.) Bowen is distinguishable because it dealt with Medicaid reimbursements to which the State was already entitled, quite unlike the CDBG funds in this case which have already been appropriated. In this case, the relief sought is not a reimbursement already owed to Plaintiffs but additional money to which they are not entitled.12 See Bowen, 487 U.S. at 892-93; Green v. Mansour, 474 U.S. 64, 73 (1985)(“[I]ssuance of a declaratory judgment in these circumstances would have much the same effect as a full-fledged award of damages or restitution by the federal court, the latter kinds of relief of course being prohibited by the Eleventh Amendment.”); Barton v. Summers, 293 F.3d 944, 950 (6th Cir. 2002) (“A court may enter a prospective injunction that costs the state money, but only if the monetary impact is ancillary, i.e., not the primary purpose of the suit.”). Rainwater maintains that the relief requested by Plaintiffs is entirely retrospective rather than prospective because revisions and recalculations of The Road Home formula will inevitably lead to a retrospective monetary award to Plaintiffs.
This case is analogous to the facts in Florida Assoc. of Rehabilitative Facilities, Inc. v. State of Florida Dept. of Health and Rehabilitative Servs., 225 F. 3d 1208 (11th Cir. 2000). In that case, various operators of intermediate care facilities in Florida for developmentally disabled (ICF/DD) filed a Section 1983 action against the Florida Department of Health and Rehabilitation Services and state officials seeking injunctive and declaratory relief for alleged violations of Medicaid’s reimbursement provisions. The Eleventh Circuit reversed the district
12 Bowen is additionally distinguishable because in Bowen the plaintiffs sued the Department of Health and Human Services, a party which could adequately redress the plaintiff’s complaint for specific relief. Here, Plaintiffs have sued Rainwater, who has no authority to “revise” the Road Home formula and “recalculate” the previously allocated grants.
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court’s judgment and found that “it essentially required them to redress inequities in their past reimbursement payments from 1991 to date of final judgment (April 1999), and potentially to reimburse plaintiffs for those past deficiencies. The Eleventh Circuit found that there was “no way to distinguish the holding of Edelman which prohibits exactly this sort retroactive award.” Id. at 1219. Thus, this Court should not be misled by the Plaintiffs as they seek to circumvent the Edelman holding when the claims they actually seek are retrospective by the plain language of their complaint. VI. Plaintiffs Fail to State a Claim under the Fair Housing Act
A. The Federal Appropriations Acts Do Not Restrict the Use of CDBG funds to Housing Programs.
Plaintiffs suggest that the Federal Appropriations Acts contain provisions limiting the spending of the CDBG funds to housing-related activities which fall under the Fair Housing Act (FHA) and/or the Housing and Community Development Act of 1974 (HCDA). In fact, the Federal Appropriations Acts are clear that the CDBG funds can be used by the state for a variety of disaster recovery-related uses, and are specifically not restricted to housing or housing-related programs:
For an additional amount for the ‘Community development fund’, for necessary expenses related to disaster relief, long-term recovery, and restoration of infrastructure in the most impacted and distressed areas related to the consequences of hurricanes in the Gulf of Mexico in 2005 in States for which the President declared a major disaster under title IV of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.) in conjunction with Hurricane Katrina, Rita, or Wilma, . . .. (See Pubic Laws 109-148 and 109-234, Dkt. 34-4.) In other words, the CDBG funds are available for various disaster recovery activities. According to the Federal Appropriations Acts, Louisiana was not required to develop or implement any “housing programs” for homeowners to
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governed by the FHA. To the contrary, Louisiana was given the freedom and flexibility to design and implement whatever programs it chose to distribute the CDBG funds. (Kome Declaration, Dkt. 22-2, ¶¶ 2, 9, 13, 16, 18, 23, 24.) Indeed, HUD’s requirement was that Louisiana certify that activities funded “be for necessary expenses related to disaster relief, longterm recovery, and restoration of infrastructure in the most impacted and distressed areas related to the consequences of the hurricane;” HUD did not require Louisiana to use the CDBG funds on housing programs or programs which would fall under the FHA. See 71 Fed. Reg. 7666, 7670 (Feb. 13, 2006); (Kome Declaration, Dkt. 22-2, ¶ 13.)
B. The State of Louisiana’s Certifications Do Not Amount to a Consent that the Fair Housing Act Applies to the Compensation Grants.
Plaintiffs also argue the FHA provide them with a claim in this case because Paul Rainwater certified he would comply with the FHA in connection the State’s application and contract to receive CDGB funds. First, Paul Rainwater personally did not sign any certifications to receive the CDBG funds at issue in this case; the certifications were signed by Jean S. Vandal, the Deputy Commissioner of Louisiana, Division of Administration. (Certifications, Exhibit D.)
Nevertheless, in these certifications, the State agreed to comply with various laws, including Title I of the Housing and Community Development Act of 1974, 42 USC § 5301, Section 3 of the Housing and Urban Development Act of 1968, 12 U.S.C. § 1701u, Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d and the FHA, 42 U.S.C. § 3601-3619. Indeed, some, but not all, of LRA’s programs funded by CDBG money would arguably fall within the ambit of the FHA. For instance, Louisiana has used CDBG funds for operating subsidies for affordable rental housing and rental and utility payment expenses. (Kome Declaration, Dkt. 22-2, ¶¶ 24, 25.) In addition, the LRA established a First-Time Homeowners Program, a government subsidized mortgage program for low to moderate income, first-time homebuyers located in the
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13 storm-impacted parishes; the First Time Homebuyers Program provides mortgage financing, funds for down payments, closing costs, and construction costs to eligible homebuyers. (See www.lra.louisiana.gov.) Likewise, the LRA also administers Rental Programs, which, in some cases, provide loans and financing to property owners who operate or agree to build affordable rental property. These programs may fall under the purview of the FHA because they are directly related to housing.
Therefore, some, but not all, of LRA’s programs are governed by the FHA. Obviously, the State’s certifications apply to the LRA programs which provide housing and are subject to the FHA. However, the program at issue in this case (The Road Home Option 1) does not provide housing. This program specifically does not involve the sale or rental of housing. Instead, this program awards compensation grants to homeowners based on eligibility criteria; the amount of the grant awards are dependant on various values, which take into account home values. (Kome Declaration, Dkt. 22-2, ¶¶ 16-20.)
Importantly, despite Plaintiff’s erroneous description of the compensation grant program, the compensation grants are not restricted in their use to rebuilding or repairing housing.13 (Exhibit A, Dkt. 28-3, § 2.1, p. 5.) Instead, applicants have “complete discretion” as to the use of the funds, meaning they are able to use the compensation grant money as they choose, and are not required to use the grant money for housing and/or rebuilding costs. (Exhibit A, Dkt 28-3, § 2.1, p. 5.) In other words, contrary to Plaintiff’s unsupported allegations contained in the Complaint and opposition brief, homeowners who receive Road Home compensation grant do
13 This Court need not accept inferences drawn by Plaintiffs if unsupported by the facts. Kowal v. MCI Communications Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). In addition, this Court can consider facts contained in documents incorporated in Plaintiffs’ complaint, matters in which the Court has taken judicial notice, and matters of public record. EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir. 1997); Marshall County Health Care Auth. V. Shalala, 988 F.2d 1221, 1226 n.6 (D.C. Cir. 1993).
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not have to agree to use the grant money to rebuild or repair their homes. (Exhibit A, Dkt. 28-3, § 2.1, p. 5.)
C. There is No Jurisprudence Which Dictates That The Fair Housing Act Applies to this Case.
First, the Plaintiffs have not cited any jurisprudence holding a state officers’ certification contained in either an application for federal assistance or grant approval/ agreement is tantamount to a waiver of jurisdiction under any federal statute, including the FHA. Indeed, no such case exists. Simply put, the state’s certification that it will comply with various laws is in no way an admission or consent that the laws actually apply or that a plaintiff can state a viable claim under the law14. Cf. Edelman v. Jordan, 415 U.S. 651, 673 (1974) (rejecting the concept that Illinois “constructively consented” to suit by agreeing to administer federal funds in compliance with federal law).
In addition, neither Plaintiffs nor HUD has cited any jurisprudence holding that a compensation program like the one developed, established and run by the LRA, is subject to the provisions of the FHA. Indeed, as previously stated, in Rainwater’s Memorandum in Support of the Motion to Dismiss this is an issue of first impression.
The FHA forbids racial discrimination in respect to the sale or rental of a dwelling. 42 U.S.C. §§ 3604, 3605; Meyer v. Holley, 537 U.S. 280, 281 (2003). While the FHA is interpreted broadly, the statute is not limitless and does not pertain to any and every program merely because HUD is the appointed as the federal agency with oversight. In fact, as the court in Gourlay v. Forest Lake Estates Civic Association, 276 F.Supp. 2d 1222, 1232 (M.D. Fla.
14 In fact, at the time Louisiana signed the CDBG application and agreement, it was considering a housing rehabilitation and reconstruction program. (Kome Declaration, Dkt. 22-2, ¶ 16.) However, Louisiana opted not to establish a housing program, but instead to develop a homeowners compensation program. (Kome Declaration Dkt. 22-2, ¶ 16.)
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2003)15, noted, “. . . the FHA was passed to ensure fairness and equality in housing . . . , not to become some all purpose civility code . . ..” Further, the FHA should not be allowed to become “an all purpose cause of action, especially “when the dispute has little or no actual relation to housing discrimination.” Id. at 1236. Likewise, the Seventh Circuit in deciding Halprin v. Prairie Single Family Homes, 388 F.3d 327 (7th Cir. 2004), discussed the legislative history of the FHA and found it was geared at preventing discrimination in the context of sale or acquisition of housing only, and Congress never intended for it to become a catch all antidiscrimination law; the Court stated, “[W]e do not think that Congress wanted to covert every quarrel . . .. into a federal case.” Id. at 330.
1. Plaintiff’s Claims Under § 3604(a) Plaintiffs sued under § 3604(a) of the FHA, and Plaintiffs and HUD argue that The Road Home program Option 1 formula “otherwise make[s] unavailable or den[ies], a dwelling to any person because of race . . ..” 42 U.S.C. § 3604(a). Specifically, Plaintiffs and HUD argue the funding formula as applied to African American homeowners in Orleans Parish does not provide sufficient funds to rebuild their homes; Plaintiffs and HUD are requesting this Court to construe the phrase “otherwise make unavailable” contained in § 3604(a) broadly to fit their factual scenario. (Complaint, Dkt. 1, ¶ 4.) However, courts have uniformly concluded the “otherwise make unavailable” language in § 3604(a) only prohibits discriminatory conduct that directly impacts a plaintiff’s ability to locate in an area and/or secure housing. See Gourlay, 276 F.Supp. 2d at 1230 (holding §3604(a) applies only when a prohibited act makes a dwelling inaccessible for purchase, sale or rent); Clifton Terrace Assoc., Ltd. v. United Technologies Corp., 929 F.2d 714, 719 (D.C. Cir. 1991)
15 After the Gourlay decision was published, it was withdrawn as a condition of settlement. See Gourlay v. Forest Lake States Civil Ass’n, 2003 WL 22149660 (M.D. Fla. September 16, 2003).
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(holding the FHA addresses problems of housing availability and not problems of housing habitability); Southend Neighborhood Improvement Assoc. v. St. Clair County, 743 F.2d 1207, 1210 (7th Cir. 1984) (holding the FHA does not protect “intangible interests in . . . already owned property.”). As the court in Gourlay noted, HUD’s regulations support this interpretation. HUD’s regulations interpreting § 3604(a) include a list of examples of prohibited conduct. 24 C.F.R. § 100.70(c)-(d). While the list is not exhaustive, none of the prohibited activities listed in the regulation deals with a protected persons use or enjoyment of a dwelling after purchase. 24 C.F.R. § 100.70(c)-(d).
To be sure, Rainwater and the LRA have not made any dwelling “unavailable” for sale or rental in violation of § 3604(a). Instead, to be eligible for The Road Home program, applicants had to be homeowners within the thirty-seven (37) parish region at the time of Hurricanes Katrina and Rita. In other words, it is stipulated the Plaintiffs all owned homes at the time of the hurricanes. (Complaint, Dkt. 1, ¶¶ 13-17, 21.)
Plaintiffs argue Rainwater made their homes “unavailable,” because, without funding from The Road Home program, they are unable to complete renovations to their home. (Complaint, Dkt. 1, ¶¶ 61-65.) However, Plaintiffs’ home renovations affect the habitability not availability to purchase their homes, and, thus this Circuit’s holding in Clifton Terrace is directly on point. Clifton Terrace, 929 F.2d at 719 (holding no § 3604 violation in refusing to repair elevator as the FHA addresses problems of housing availability and not problems of housing habitability). In other words, completing renovations would make Plaintiff’s homes more habitable; but home renovations do not affect the Plaintiffs ability to become homeowners in the first place as they already owned their homes (and had to own their homes to meet eligibility requirements for the program).
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Plaintiffs’ Complaint demonstrates that their FHA claim is based on habitability instead of access to buy or rent a home. (Complaint, Dkt. 1, ¶¶ 61- 65.) For instance, Plaintiff Daphne Jones alleges because of application of The Road Home Option 1 formula, she “has not been able to complete all needed repairs to her home, and has had to utilize personal savings and volunteer labor to make the home livable.” (Complaint, Dkt. 1, ¶ 64.) Plaintiff Jones’ home is “livable,” but more CDBG funds would presumably have made her home nicer. (Complaint, Dkt. 1, ¶ 64.) Likewise, Plaintiff Rhonda Dents “is living in a modular home of poorer construction quality and smaller size on the same property.” (Complaint, Dkt. 1, ¶ 62.) Again, the LRA has not prevented Plaintiff Jones from owning a home; her complaint instead goes to the habitability, i.e., with more CDBG funds she could have owned a larger home made with better construction materials. Finally, in their opposition brief, Plaintiffs argue that the FHA applies when conduct places a plaintiff “at risk of losing their property.” However, there are no allegations in the Complaint that any of the Plaintiffs are at risk of losing their properties. Indeed, Plaintiffs in this case are not at risk of losing their property, and certainly are not at risk of losing property because of any action of Rainwater and/or the LRA. Therefore, Plaintiffs reliance on that jurisprudence is misplaced and unconvincing.
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2. Plaintiff’s Claims Under § 3605(a) Plaintiffs also sued under § 3605(a) of the FHA, which provides that it is unlawful for any person or entity whose business includes engaging in residential real estate-related transactions to discriminate against any person in making available such a transaction, or in the terms or conditions of such a transaction, because of race. Again, Plaintiffs ask this Court to read the FHA too broadly as they argue Rainwater and/or HUD violated § 3605(a) by providing “financial assistance for purchasing, constructing, improving, repairing, or maintaining a dwelling.” However, neither Rainwater or the LRA were engaged in any real estate transactions with Plaintiffs and Plaintiffs have failed to allege that Rainwater engaged in any real estate transactions with Plaintiffs in the Complaint. This Court’s prior rulings interpreting § 3605(a) make it clear that The Road Home compensation grants do not fall within the purview of § 3605(a). Indeed, in National Fair Housing Alliance, Inc. v. Prudential Insurance Company of America, 208 F.Supp. 2d 46 (D.D.C. 2002), this Court held the practice of redlining homeowners insurance products constituted “other financial assistance” under §3605(a). However, in doing so, this Court noted homeowners are typically required to have homeowners’ insurance coverage in order to qualify for a mortgage or home equity loan, and must maintain insurance as a condition of the loan. Prudential, 208 F.Supp.2d at 49. Notably, this Court stated:
It is undisputed that individuals are often unable to purchase or to maintain financing for homes without homeowners insurance. Without property insurance, most homeowners are unable to repair their homes when and if disaster should strike. For these reasons, insurance provides the financial assistance necessary to maintain a dwelling. As such, it is reasonable to conclude the Congress intended that homeowners insurance fall within the scope of 3605’s protection. Prudential, 208 F.Supp. 2d at 58.
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Unlike in the Prudential case, in this case, compensation grants awarded by the LRA to eligible homeowners are not a condition or pre-requisite to obtaining a home loan and, by extension, a home. The Road Home compensation grants are in no way tied to the financing of a dwelling, and the funds are not restricted or required to be used for the purchasing, constructing, improving, repairing or maintaining of a dwelling. Again, the eligible recipients of the grants were already homeowners and The Road Home funds can be used by the homeowners in any way they please with no accounting, documentation, oversight or certification required by the LRA or HUD. The compensation grant funds are not an entitlement, and, instead are considered a one-time benefit to homeowners affected by Hurricanes Katrina and/or Rita. (Exhibit A, Dkt. 28-3, § 2.4.1, p. 8.)
3. Plaintiff’s Claims Under §3608(d)(5) Finally, in their opposition brief, Plaintiffs clarified that they are asserting a claim against Rainwater under § 3608(d)(5) of the FHA. Plaintiffs argue § 3608(d)(5) applies to “state grantees” under “three decades of case law.” (Plaintiffs’ Opposition, Dkt. 34, p. 29.) However, there is not one case from this district holding the provisions of § 3608 apply to a state agency and/or the executive director of a state agency. By its terms and a plain reading of the statute, § 3608(d) applies only to the Secretary of Housing and Urban Development and executive departments and Federal agencies. Further, this Court has previously ruled that a plaintiff does not have an implied private right of action to enforce the provisions of § 3608(d). Jones v. Office of the Comptroller of the Currency, 983 F.Supp. 197 (D.D.C. 1997), aff’d, 1998 WL 315581 (D.C. Cir. May 12, 1998). Therefore, Plaintiffs claim against Rainwater under this provision of the FHA is not cognizable.
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VII. Plaintiffs Cannot Maintain a Claim Against Rainwater Under the Housing and Community Development Act Plaintiffs assert they have a private right of action to enforce § 5304(b)(2) of the Housing
and Community Development Act (HCDA). In support of their argument, Plaintiffs allege there is express legislative intent indicating Congress intended private citizens to pursue claims individually under the HCDA. (Plaintiffs’ Opposition, Dkt. 34, p. 31.) In order to establish Congressional intent, Plaintiffs rely on a 1987 House Report. Further, Plaintiffs rely on the case of Montgomery Improvement Association, Inc. v. HUD, 645 F.2d 291 (5th Cir. 1981). However, neither the House Report or the Montgomery case are persuasive.
First, in an attempt to establish Congressional intent, Plaintiffs cite a House Report to the 1987 amendments to the HCDA. However, Plaintiffs citation is misleading, to say the least. The quotation offered by Plaintiffs relates to a portion of the bill pertaining to rental assistance payments made pursuant to the National Housing Act, 12 U.S.C. § 1701, et seq., and rent supplemental payments pursuant to the Housing and Urban Development Act of 1965, 12 U.S.C. § 1701s, et seq. In other words, the provision cited by Plaintiffs do not relate to the HCDA. Instead, the provision cited by the Plaintiffs support a private right of action for the beneficiaries of rent subsidies under the National Housing Act and Housing and Urban Development Act. The complete quotation clarifies this:
The Committee bill provides for full funding for state financed Sec. 236 projects of additional rental assistance payments (RAP), made pursuant to Sec. 236(f)(2) of the National Housing Act, and of rent supplemental payments, made pursuant to Sec. 101(a) of the Housing and Urban Development Act of 1965, when tenant rent payments plus existing assistance payments are insufficient to cover the total rent of units occupied by low-income tenants. State projects would thus be treated in the same manner as federally insured projects which under present law receive 100% funding of the shortfall. The Committee believes that not only is the present law which limits state projects to 90% funding of the rent shortfall
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inequitable, but the absence of full funding limits the ability of those projects to accommodate the entire spectrum of low-income tenants.
The provisions of this bill are intended to benefit applicants and tenants. The assisted housing programs have been created specifically to assure lower income households have greater access to decent and affordable housing than their limited incomes would otherwise permit. The Committee intents, and has always intended, that applicants and tenants who are adversely affected by violations of these statutory provisions should have a cause of action to enforce the statute in federal court. In the past, such causes of action were not explicitly specified in the statute because program beneficiaries were thought to be able to protect their interest under the Administrative Procedure Act, Sec. 1983, and the implied cause of action doctrine. Because the courts have been somewhat unreceptive to private causes of action, the Committee wishes to clarify its long-standing intention in favor of private enforcement. This clarification is not intended to weaken any rights of program beneficiaries or the Department of Housing and Urban Development to enforce statutes previously or in the future.
H.R. Rep. No. 100-122(I), at 52–53 (1987), as reprinted in 1987 U.S.C.C.A.N. 3317, 3368–69.
Plaintiffs are mistaken and disingenuous in suggesting that this provision stands for the
proposition that Congress intended citizens to have a private right of action for enforcement of
the HCDA. This provision of the House Report does not stand for that proposition at all, and, in
fact, there is no published Congressional intent for a private right of action to enforce the HCDA.
Plaintiffs also rely on the Fifth Circuit Montgomery case. First, the Montgomery case has
not been adopted by this Circuit and appears to be an abrogation. See Latinos Unidos de Chelsea
v. Secretary of Housing, 799 F.2d 774, 795 (1st Cir. 1986) (“Congress did not intend to create a
private right of action under the HCDA.”); Dotson v. Pacific Gas and Electric Co., 1993 WL
248644 (N.D. Cal. June 25. 1993), aff’d, 46 F.3d 1140 (9th Cir. 1995); Milsap v. HUD, 1990 WL
157516 (D. Minn. October 18, 1990), aff’d, 42 F.3d 1394 (8th Cir. 1994), Pleune v. Pierce, 697
F.Supp. 113, 119 (E.D.N.Y. 1988); Nabke v. HUD, 520 F.Supp. 5 (W.D. Mich. 1981); People’s
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Housing Development Corp. v. City of Poukepsie, 425 F.Supp. 482, 491 (S.D.N.Y. 1976). Further, while this Circuit has never directly ruled on whether the HCDA provides a private cause of action, it has considered whether other federal statutes provide a private cause of action and held plaintiffs did not have a cause of action to enforce federal funds recipients’ compliance with proscriptions against discrimination. See Women’s Equity Action League v. Cavazos, 906 F.2d 742 (D.C. Cir. 1990).
Additionally, the Montgomery court relied on cases that have been effectively overruled, or if not technically overruled, at least are no longer precedent. Specifically, the Montgomery court relied heavily upon two Supreme Court cases, Canon v. The University of Chicago, 441 U.S. 677 (1979) and Cort v. Ash, 422 U.S. 66 (1975), which are no longer good law. In the same year as the Canon decision, and after the Canon decision was rendered, the Supreme Court issued its ruling in Touche Ross & Co. v. Redington, 442 U.S. 560 (1979). In Touche Ross, the Court adopted Justice Powell’s position as stated in his dissenting opinion in Cannon; specifically, in Touche Ross, the Court held federal courts will create a private right of action only if there is affirmative evidence of Congress’ intent to create a private right of action. In other words the four factor test of Cort v. Ash no longer applies; although the Supreme Court in Touche Ross did not expressly discard Cort v. Ash, it articulated an unmistakable departure in methodology. Justice Scalia, joined by Justice O’Conner, also stated Touche Ross has effectively overruled Cort in Thompson v. Thompson, 484 U.S. 174, 199 (1988). Therefore, because the Montgomery court relied on the Cort and Canon cases, its opinion now does not hold the weight of precedent. Therefore, under Touche Ross, without affirmative evidence of Congressional intent to create a private right of action, there is no private right of action. Simply put, there is no affirmative evidence, explicit or implied, that Congress intended to create a private right of
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action for the enforcement of provision in the HCDA. No congressional intent to create a private cause of action “appear[s] implicitly in the language or structure of the statute, or in the circumstances of its enactment.” Thompson, 484 U.S. at 94. Therefore, Plaintiffs should not be allowed to proceed with their claims against Rainwater under the HCDA. VIII. Rainwater Has Met His Burden Under 28 U.S.C. 1404(a)
A. The Threshold Inquiry is Met The threshold inquiry under 28 U.S.C. §1404(a) is whether this case could have been brought in Middle District of Louisiana. Plaintiffs concede the Middle District of Louisiana is a proper venue for this action. HUD offers no evidence refuting the Middle District would be a proper venue. Notwithstanding, Rainwater has satisfied this threshold inquiry. Rainwater and the LRA reside and/or are domiciled in the Middle District and a substantial part of the events giving rise to the Plaintiffs’ claims arose in the Middle District. The LRA Action Plan, its challenged formula and the Road Home program were all created and implemented in Baton Rouge, Louisiana - within the Middle District. The injuries Plaintiffs seek to redress took place in Louisiana and involve Louisiana residents. Accordingly, pursuant to § 1404(a), Plaintiffs could have brought their case in the Middle District of Louisiana. B. Venue Can be Considered Before Subject Matter Jurisdiction is Established HUD's contention this court must first decide the issue of subject matter jurisdiction before transfer is incorrect.16 There are no fixed rules on when cases should be transferred. SEC v. Savoy Industries, Inc., 587 F.2d 1149, 1154 (D.C. Cir. 1978). Instead, courts must adjudicate motions to transfer on an individualized, case-by-case basis, giving due consideration to
16 Notably, Plaintiffs have not opposed this Court considering the matter of venue before subject matter jurisdiction.
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convenience and fairness. Stewart Org., Inc., v. Ricoh Corp., 487 U.S. 22, 27 (1988). Such considerations warrant transfer of this case to the Middle District of Louisiana.
In Sinochem Int'l Co. Ltd. v. Malaysia Int'l Shipping Corp., 549 U.S. 422 (2007), the Supreme Court held that a court can immediately take up the question of forum non conveniens under § 1404(a), and need not first consider whether it has subject matter or personal jurisdiction. Courts in this District have adopted and applied Sinochem’s rationale when addressing motions to transfer under § 1404(a).
In Miller v. Toyota Motor Corporation, 2009 WL 1531658, at * 6-8 (D.D.C. June 2, 2009), the defendant filed a motion to dismiss on several grounds, including forum non conveniens and lack of personal jurisdiction. Relying on Sinochem, the court first considered the defendant’s motion to dismiss on grounds of forum non conveniens before deciding whether it had personal or subject matter jurisdiction. The court sua sponte transferred the case under § 1404(a) to the Middle District of Florida citing private and public interest factors, including, the plaintiff’s home forum, higher costs of litigating the matter in District of Columbia, conservation of judicial resources; location of evidence and witnesses; existence of companion cases; and the District of Columbia's lack of interest in the case.
Similarly, in Kazenercom TOO v. Turan Petroleum, Inc., 590 F.Supp.2d 153 (D.D.C. 2008), the defendants moved to dismiss the case on several grounds including FRCP 12(b)(1), (2), (3), (5) and (6), and alternatively, to transfer the case under §§ 1404(a), 1406(a) or 1631, and to strike certain allegations under Rule 12(f)(2). Relying on Sinochem, the court immediately took up the issue of forum non conveniens before personal and subject matter jurisdiction, and transferred the case under § 1404 to the Central District of California, citing several factors favoring transfer, including the fact that plaintiffs (sellers) resided outside the District of
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Columbia, the defendant’s (buyer) headquarters were located in California and locus of significant activities relating to the claims were in California.
In Cheney v. IPD Analytics, LLC, 583 F.Supp. 2d 108 (D.D.C. 2008), defendants filed a motion to dismiss the former employee’s action under ERISA for improper venue, or alternatively, to transfer the case. Again, relying on Sinochem, the court noted its discretion to resolve issues such as venue that do not affect the merits of the case without first deciding personal jurisdiction. The court held the interests of judicial economy and prudential concerns weighed in favor of resolving venue at the outset. Even if it were to sort through the complex personal jurisdictional issues raised by the defendants, the court would have had to address transfer under § 1404(a) given the presence of a forum selection clause in the employee’s employment agreement and the strong connection of the case to the state of Florida. Although finding the forum selection clause enforceable, the Court still addressed the balancing factors under § 1404(a). Considering the totality of the circumstances the Court transferred the case to Florida.
In Focus Enterprises, Inc. v. Zassi Medical Evolutions, Inc., 2007 WL 1577844, * 1, fn. 1 (D.D.C. May 31, 2007), relying on Sinochem, the court first considered the issue of venue and did not reach the question of personal jurisdiction. The court observed “a federal court has leeway to choose among threshold grounds for denying an audience to a case on the merits.” After considering the private and public interest factors, the court transferred the case to the Middle District of Florida. Although the plaintiff resided in the District of Columbia, most of the witnesses were located in Florida.
Under Sinochem, this Court can consider venue before subject matter jurisdiction. Although HUD cites several cases in support of its position, none of the cases are in this district,
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the majority involve removal actions,17 and all but one predates Sinochem. HUD ignores the
broad discretion given this Court by Sinochem to consider venue before any other jurisdictional
question.
C. HUD'S Position is Inconsistent
In seeking dismissal of Plaintiff's lawsuit, HUD claimed its involvement in the Road
Home program was “limited” to an advisory role and that the State of Louisiana bore “ultimate
responsibility” in implementing, designing and administrating the Road Home program.
Specifically, HUD stated in pertinent part:
…HUD’s role is confined (emphasis added) to ensuring that the state’s interpretation of the statutory and regulatory requirements “are not plainly inconsistent with the Act.” 24 C.F.R.§ 570.480(c) (giving “maximum feasible deference” to a state’s interpretation of these requirements)
…HUD’s technical assistance (emphasis added) typically involves consultation with the grantee to determine the grantee’s objectives and its proposed program designs. HUD then provides advice, training, or program models that will ensure the grantee will be able to comply with CDBG program requirements while carrying out its purposes and implementing its programs.
HUD’s review of the applicant’s plan is limited... (emphasis added)
…The Road Home program is administered by the State of Louisiana through the Louisiana Office of Community Development and the Louisiana Recovery Authority and is funded by HUD through the CDBG program. The State of Louisiana is responsible for the implementation,
17 DiPilato v. Commonwealth Ass'n of School Administrators, Local 502, 588 F.Supp.2d 631 (E.D. Pa. 2008) (remanding case when federal question jurisdiction absent on face of complaint.); Marotta Gund Budd & Dzera, LLC v. Costa, 340 B.R. 661 (D.N.H. 2006)(addressing issue of subject matter jurisdiction to determine pending motion to remand); Morongo Band of Mission Indians v. California State Board of Equalization, 858 F.2d 1376 (9th Cir. 1988) ruling district court did not have subject matter jurisdiction over original interpleader action. There were no issues of transfer involved.); Atlantic Ship Rigging Co., Inc. v. McLellan, 288 F.2d 589 (3d Cir. 1961)(reviewing compensation order under Section 921(b) of Longshoreman's and Harbor Worker's Compensation Act, court held section 921(b) was jurisdictional and not a venue provision, claim could not have been brought in New York Court under the statute.); O’Quinn v. CNH America, LLC, 457 F.Supp.2d 678 (E.D. Va. 2006)(holding in a removal action, removal statute must be strictly construed for purposes of determining remand, remanded case for lack of subject matter jurisdiction. Lower court had already addressed motion to transfer but had not yet issued order when party removed case to district court.)
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design, and administration of the Road Home program in conformance with the applicable CDBG program requirements set by HUD. …In designing the Road Home homeowner compensation and incentives program, Louisiana requested, and HUD provided, some technical assistance…. HUD did not make any of the state’s program decisions or set any funding strategies in the Road Home Program. Most of HUD’s technical assistance was provided by telephone. As it developed the Road Home Program, Louisiana ultimately chose to provide compensation and incentive grants to eligible homeowners affected by Hurricanes Rita or Katrina of up to $150,000. Louisiana decided to base the amount of the compensation and incentives grant on the lower of the pre-storm, fair-market value of the home, or the cost to repair the home. (Kome Declaration, Dkt. 22-2, ¶¶ 3, 8, 9, 15, 16, 18.) Now, in opposing Rainwater’s Motion to Transfer, HUD claims this matter must remain in the District of Columbia because all of HUD’s challenged actions occurred here, including its consultation, approval and “continuing oversight” of Louisiana’s Road Home program. Interestingly, HUD concedes, despite the presence of organizational plaintiff National Fair Housing Alliance in the District of Columbia,18 Plaintiffs' interest in this Court hearing their suit may be diminished if HUD is no longer a party to the litigation. This is precisely the type of case Cameron v. Thornburgh, 983 F.2d 253 (D.C. Cir. 1993) addressed. Plaintiffs' naming of governmental officials (such as HUD), solely to bring their suit in the District of Columbia, when the action should be pursued elsewhere (the Middle District of Louisiana), warrants transfer of this case out of this District.
18 Plaintiffs and HUD cite the location of the National Fair Housing Alliance in the District of Columbia in opposing transfer.
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D. Private Interest and Public Interest Factors Favor Transfer of this Case to the Middle District of Louisiana. 1. Private Interest Factors: Parties' Choice of Forum; Where the Claim Arose; Convenience of Parties/Witnesses
Private interest factors favor transfer of this case to the Middle District of Louisiana. While a plaintiff's choice of forum generally merits deference, “the strong presumption against disturbing plaintiff['s] initial forum of choice . . . is weakened . . . when the forum is not plaintiff's home forum and most of the relevant events occurred elsewhere.” Great Socialist People's Libyan Arab Jamahiriya v. Miski, 496 F.Supp. 2d 137, 144-45 (D.D.C. 2007); Demery v. Montgomery County, MD, 602 F.Supp. 2d 206, 210 (D.D.C. 2009) (quoting Hunter v. Johanns, 517 F.Supp. 2d 340, 344 (D.D.C. 2007)). It is undisputed that none of the named Plaintiffs, nor any potential class member, reside in this District.
Although Plaintiffs and HUD cite the presence of organizational Plaintiff, National Fair Housing Alliance (NFHA), whose main office is located in the District of Columbia, to oppose transfer, what Plaintiffs and HUD fail to address is that the Greater New Orleans Fair Housing Action Center (GNOFHAC), which maintains its main office in New Orleans, Louisiana, is a member organization of National Fair Housing Alliance. According to NFHA's website, GNOFHAC is a “full service non-profit fair housing organization providing education, outreach, and enforcement with respect to the fair housing laws in order to create equal housing opportunities in Louisiana and to combat housing discrimination.” See NFHA website: www.nationalfairhousing.org. GNOFHAC has an “Operating Membership” status within the NFHA, “a status reserved for private, non-profit, full service fair housing organizations.” Id. As a operating member, GNOFHAC receives special access to educational and training resources through the NFHA. NFHA also provides assistance to GNOFHAC with methodology
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development, public policy initiatives, education and outreach strategies, and administrative, personnel and financial functions. Id. As a member of NFHA, GNOFHAC is undoubtedly representing NFHA’s interests in this litigation. Accordingly, the location of NFHA should not be a factor precluding transfer of this case and Plaintiffs' choice of forum in this instance is diminished.
When the events at issue occur in more than one district, a court can consider which jurisdiction has the stronger factual nexus to the claims. Miller v. Insulation Contractors, Inc., 608 F.Supp.2d 97, 101–02 (D.D.C. 2009) (citing O'Shea v. Int'l Broth. of Teamsters, 2005 WL 486143, at *3 (D.D.C. March 2, 2005)). There is no dispute the “factual nexus” of this case is more closely tied to the State of Louisiana than the District of Columbia. Most of the relevant events occurred in Louisiana. The LRA was created in the Middle District. The challenged Action Plan – the centerpiece of this litigation - was created and implemented in the Middle District. The Road Home compensation grant program (Option 1) was created and implemented in the Middle District. All of the named Plaintiffs' (and the potential class members') applications were processed in the Middle District. All of the property evaluated under the Action Plan is located in Louisiana. As HUD's representative stated:
The State of Louisiana is responsible for the implementation, design, and administration of the Road Home program in conformance with the applicable CDBG program requirements set by HUD. (Kome Declaration, Dkt. 22-2, ¶ 15.) While HUD's oversight and/or involvement, regardless of the extent thereof, may have taken place in or from this District, and HUD's record may be located here, most of the relevant events underlying Plaintiffs' claims occurred in Louisiana, not the District of Columbia. Further, all of the evidence, including the LRA's record is located in the Middle District of Louisiana.
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This matter involves Louisiana property and Louisiana residents. The District of Columbia has no interest in this case and its citizens should not be burdened with this litigation. Miller v. Toyota Motor Corp., supra. Conversely, the State of Louisiana – in particular, the Middle District - has a significant interest in providing redress to the alleged injuries sustained by the named Plaintiffs (and potential class members)– all of whom are Louisiana residents.
Further, it should be noted, the parties have not agreed or stipulated at this time this case would involve solely the administrative record. Therefore, convenience of witnesses remains a relevant factor at this stage. See Demery, 602 F.Supp. 2d at 210; Montgomery v. STG Intern., 532 F.Supp. 2d 29, 33 n. 5 (D.D.C. 2008) (holding convenience of the witnesses refers to the possibility of having their live testimony at trial). There is no dispute the Middle District of Louisiana would be a more convenient forum for witnesses. The named Plaintiffs reside in Louisiana. Potential class members likely reside in the State of Louisiana. LRA officials and employees are in Louisiana. Defendant, Paul Rainwater, is a Louisiana resident. The documents relative to the Plaintiffs' Road Home grants, applications, grant amounts, disbursements are all located in Louisiana. Although HUD contends “all of its witnesses and documents” are in this District, there can be no comparison to the number of individuals from Louisiana, including Rainwater, who would be required to travel at considerable expense, hardship and inconvenience to litigate this case or for trial. Accordingly, private interest factors warrant transfer of this case to the Middle District of Louisiana.
2. Public Interest Factors In addition, public interest factors favor transfer of this case to the Middle District, or alternatively, the Eastern District of Louisiana.19 There is a presumption the Middle District of
19 See Otay Mesa Property L.P. v U.S. Department of Interior, 584 F.Supp.2d 122, 126 (D.D.C. 2008) (identifying public interest factors).
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Louisiana is equally familiar with the federal laws at issue. Although this case may not involve issues of Louisiana state law, it involves Louisiana residents and Louisiana property, factors invoking a substantially stronger local interest with the Middle District of Louisiana, rather than the District of Columbia. The challenged decision of the LRA was made in the Middle District of Louisiana. The LRA's decision concerning grant amounts directly affected citizens of Louisiana – not citizens of the District of Columbia. The underlying controversy involves Louisiana citizens suing to redress alleged injuries occurring in Louisiana. While there may be no issue concerning local property laws, it is undisputed this matter involves property located in the State of Louisiana, not the District of Columbia.
Finally, Plaintiffs have not alleged personal involvement by an individual of HUD located in the District of Columbia, but have named individually, Paul Rainwater, a citizen and resident of the State of Louisiana. Although HUD contends this controversy “could” affect its administration of the CDBG program in the “future,” such vague possibilities do not warrant litigating these particular claims in the District of Columbia.
3. Balance of Private and Public Interest Factors Favor Transfer of This Litigation Involving Louisiana Properties
In Southern Utah Wilderness Alliance v. Norton, 315 F.Supp. 2d 82 (D.D.C. 2004), plaintiffs opposed the transfer of the case to the District of Utah, contending the controversy was substantially tied to Washington D.C. (“D.C.”) because the wilderness policy changes at issue made by D.C. senior officials had a direct impact on lease sales in Utah. Plaintiffs relied on evidence establishing such ties, including an email and paper trail an employee in the Bureau of Land Management’s (BLM) Utah state office sent to its D.C. headquarters, as well as a two-day workshop BLM headquarters conducted in Utah instructing Utah BLM personnel on leasing the lands in dispute. Plaintiffs also claimed one BLM official in D.C. was “intimately involved”
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with the National Energy Policy and emailed staff in BLM's Utah office ten times regarding lease sales. Defendants argued there was no “special oversight” by D.C. of BLM's mineral leasing program - BLM's Utah office administered the public lands at issue, BLM's Utah Director had authority to issue oil and gas leases, and the lease sale occurred in Utah under the direction of BLM's Utah office. BLM's headquarters officials involvement stemmed from the wilderness policy change, and the resulting guidance to BLM's Utah state office was meant to ensure such change occurred.
This Court noted although extensive involvement by headquarters has, in some instances, justified keeping a case in the District of Columbia, “mere involvement on the part of federal agencies, or some federal officials who are located in Washington, D.C., is not determinative.” Southern Utah Wilderness Alliance, 315 F.Supp. 2d at 87 (citing Shawnee Tribe v. United States, 298 F.Supp. 2d 21, 25–26 (D.D.C. 2002). This Court further held neither party would be significantly inconvenienced by litigating the case in Utah. Although plaintiff had offices in D.C., it was headquartered in Salt Lake City and one of plaintiffs' attorneys resided in Utah. Finally, this Court observed that even if the case involved a review of the administrative record, the location of the record was afforded little weight. Southern Utah Wilderness Alliance, 315 F.Supp. 2d at 88 (citing Air Line Pilots Ass'n v. Eastern Air Lines, 672 F.Supp. 525, 527 (D.D.C. 1987) (holding location of administrative record afforded little weight). Because the issues primarily involved decisions of officials in Utah, and no relevant records or witnesses were available exclusively in the District of Columbia jurisdiction, the private interests of the parties favored transfer to the District of Utah.
This Court also found public interest factors favored transfer. The controversy was localized because it involved Utah lands – affording a strong local interest in having this case
38

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heard in Utah. Notwithstanding the national attention of the issue, the dispute was focused on 21 parcels of land in Utah. This Court noted land is a localized interest because its management directly touches local citizens. Id. citing Sierra Club v. Flowers, 276 F.Supp. 2d 62, 71 (D.D.C. 2003) (granting motion to transfer suit involving the Florida Everglades in part because of the “depth and extent of Florida's interest”); Trout Unlimited v. U.S. Dep’t of Agriculture, 944 F.Supp. 13, 17 (granting motion to transfer to Colorado a suit involving the United States Forest Service's decision to issue an easement for the operation of a dam and reservoir on public lands because of the “impact that the resolution of this action will have upon the affected lands, waters, wildlife and people of that state”). This Court further noted “it makes sense that these alleged consequences would be most particularly felt in Utah, and thus that the courts of Utah would have a clear interest in resolving the dispute.” Southern Utah Wilderness Alliance, 315 F.Supp.2d at 89 (citing, Trout Unlimited, 944 F.Supp. at 20 (it is appropriate to consider “those whose rights and interests are in fact most vitally affected by the suit”) (citing Adams v. Bell, 711 F.2d 161, 167 n. 34 (D.C. Cir. 1983)). Accordingly, this Court held Utah's interest in the case was substantial, outweighed any interest in litigating in D.C., and found transfer appropriate at the early stage of litigation because the dispute would have the greatest impact on the citizens of Utah.
The balance of private and public interest factors favor transfer of this case to the Middle District of Louisiana. The consequences of Plaintiffs' lawsuit would be most particularly felt in the State of Louisiana – not the District of Columbia. Louisiana's interest in litigating claims involving Louisiana property far outweighs any interest the District of Columbia has in adjudicating such matters. Regardless of the extent of HUD's involvement, the underlying controversy affects and involves the State of Louisiana, its residents and its property. The
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connection to the District of Columbia is too attenuated to justify using the judicial resources of
this Court. The balance of private and public interest factors weigh in favor of transferring this
case at this early stage, and Defendant, Rainwater respectfully asks this Court to transfer this
matter to the Middle District of Louisiana.
IX. Conclusion
For the foregoing reasons, this Court should grant Defendant Paul Rainwater’s Motion to
Dismiss pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6), or, alternatively, transfer this case to
federal district courts in either Baton Rouge or New Orleans, Louisiana.
Respectfully submitted,
/s/ RENEE CULOTTA A.J. KROUSE (La. Bar #14426) RENEE CULOTTA (La. Bar #24436) SUZANNE M. RISEY (La. Bar #25488) FRILOT L.L.C. 1100 Poydras Street, 37th Floor New Orleans, LA 70163 Telephone: (504) 599-8016 Facsimile: (504) 599-8116 akrouse@frilot.com rculotta@frilot.com srisey@frilot.com
and
TIMOTHY E. HEFFERNAN (D.C. Bar #422923) WATT, TIEDER, HOFFAR & FITZGERALD, L.L.P. 8405 Greensboro Drive, Suite 100 McLean, Virginia 22102 Telephone: (703) 749-1000 Facsimile: (703) 893-8028 theffern@WTHF.com
ATTORNEYS FOR PAUL RAINWATER, EXECUTIVE DIRECTOR OF THE LOUISIANA RECOVERY AUTHORITY
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CERTIFICATE OF SERVICE I hereby certify that on July 8, 2009, a copy of the foregoing document was filed electronically via the Court’s ECF system, through which a notice of the filing will be sent to:
Joseph Marc Sellers, Esq. Llezlie Green Coleman, Esq.
Jenny R. Yang, Esq. Cohen Milstein Sellers & Toll, PLLC 1100 New York Avenue, NW, Suite 500
Washington, DC 20005-3934 (202) 408-4600
jsellers@cmht.com jyang@cohenmilstein.com lgreen@cohenmilstein.com
Damon T. Hewitt, Esq. Debo P. Adegbile, Esq. Matthew Colangelo, Esq. ReNika C. Moore, Esq. NAACP Legal Defense & Educational Fund, Inc. 99 Hudson Street, 16th Floor New York, NY 10013
(212) 965-2200 dhewitt@naacpldf.org dadegbile@naacpldf.org mcolangelo@naacpldf.org rmoore@naacpldf.org Attorneys for Plaintiff
(cont’d)
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James D. Todd, Jr., Esq. Michael F. Hertz, Esq. Channing D. Phillips, Esq. Michael Sitcov, Esq. U.S. Department of Justice 20 Massachusetts Ave., N.W. Washington, D.C. 20001
(202) 514-3378 james.todd@usdoj.gov Attorneys for U.S. Department of Housing and Urban Development
/s/ RENEE CULOTTA
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 Case 1:08-cv-01938-HHK Document 50-1 Filed 06/02/10 Page 1 of 51

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, et al.,

Plaintiffs,

v.

No. 1:08-cv-1938-HHK

UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, et al.,

Defendants.

PLAINTIFFS’ MEMORANDUM AND POINTS OF AUTHORITIES IN SUPPORT OF THEIR MOTION FOR A TEMPORARY
RESTRAINING ORDER AND A PRELIMINARY INJUNCTION
Plaintiffs Greater New Orleans Fair Housing Action Center, et al., respectfully submit
this memorandum of law in support of their motion for a temporary restraining order and a
preliminary injunction against the Executive Director of the Louisiana Recovery Authority
(“LRA”), or the administrator of any successor to the LRA.

Case 1:08-cv-01938-HHK Document 50-1 Filed 06/02/10 Page 2 of 51
TABLE OF CONTENTS INTRODUCTION ......................................................................................................................... 1 PROCEDURAL BACKGROUND................................................................................................ 2 FACTUAL BACKGROUND........................................................................................................ 3
A. Congress Responded to Hurricanes Katrina and Rita by Funding the Largest Emergency Housing Program in American History, and Required States Spending the Funds to Follow Federal Non-Discrimination and Fair Housing Requirements........................................................................................... 3
B. Louisiana Has Spent Approximately $11 Billion of the Recovery Funds on the Road Home Program to Assist Homeowners With Repairing and Rebuilding Their Homes, But Applies a HUD-Approved Formula That Adversely Impacts African American Homeowners ............................................. 5
C. The Road Home Program Grant Formula Has Had a Disparate Impact on African American Home Owners .......................................................................... 8
D. The LRA Executive Director Admits That the Road Home Grant Formula Has Adversely Affected African American Homeowners................................... 15
E. More than $500 Million in Road Home Monies Are Needed to Fund the Road Home Grants Recalculated Through Use of a Non-Discriminatory Formula ................................................................................................................ 16
F. LRA Has Announced Plans That, in the Near Future, Would Deprive the Plaintiffs of Their Ability to Obtain Equitable Relief in This Action ................. 17
STANDARD OF REVIEW ......................................................................................................... 21 SUMMARY OF ARGUMENT ................................................................................................... 23 ARGUMENT............................................................................................................................... 24
The Plaintiffs Are Entitled to a Temporary Restraining Order and Preliminary Injunction Barring the Executive Director of LRA or a Successor From Obligating and/or Spending Any Funds Available for Relief in This Action, or Seeking From HUD the Further Obligation and/or Disbursement of Any Such Funds
A. The Plaintiffs Have a Substantial Likelihood of Success on the Merits.............. 24 B. Absent an Order Freezing the Assets Available to Satisfy the Equitable
Relief the Plaintiffs Seek in This Action Until the Merits of This Action Can be Adjudicated, the Plaintiffs Will Be Irreparably Harmed ......................... 30 C. A Preliminary Injunction Will Not Substantially Harm the Defendants or Other Interested Parties........................................................................................ 37 D. The Public Interest Unequivocally Favors Injunctive Relief............................... 40 CONCLUSION............................................................................................................................ 43
ii

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TABLE OF AUTHORITIES

CASES

PAGE(S)

2922 Sherman Ave. Tenants Assoc. v. District of Columbia, 444 F.3d 673 (D.C. Cir. 2006) .................................................................................................25

Ambach v. Bell, 686 F.2d 974 (D.C. Cir. 1982) .................................................................................................31

Brown v. Artery Org., Inc., 654 F. Supp. 1106 (D.D.C. 1987) ................................................................................40, 41, 42

Brown v. Artery Org., Inc., 691 F. Supp. 1459 (D.D.C. 1987) ............................................................................................40

CFTC v. Next Fin. Servs. Unlimited, Inc., No. 04-80562, 2005 U.S. Dist. LEXIS 38965 (S.D. Fla. June 7, 2005) ..................................35

*Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290 (D.C. Cir. 2006) .....................................................................................21, 22, 30

CityFed Fin. Corp. v. Office of Thrift Supervision, 58 F.3d 738 (D.C. Cir. 1995) ............................................................................................ 22-23

*City of Houston v. HUD, 24 F.3d 1421 (D.C. Cir. 1994) .....................................................................................31, 32, 37

Cook v. Billington, No. 82-0400, 1988 WL 35364 (D.D.C. Mar. 31, 1988) ..........................................................40

Darst-Webbe Tenant Ass’n Bd. v. St. Louis Hous. Auth., 417 F.3d 898 (8th Cir. 2005) ..................................................................................................25

Deckert v. Independence Shares Corp., 311 U.S. 282 (1940) ...............................................................................................................33

Davenport v. Int’l Bhd. of Teamsters, 166 F.3d 356 (D.C. Cir. 1999) ..............................................................................................22

*Ellipso, Inc., v. Mann, 480 F.3d 1153 (D.C. Cir. 2007) ......................................................................................... 32-34

Ex Parte Young, 209 U.S. 123 (1908)...................................................................................................................3

*Fair Hous. in Huntington Comm. Inc. v. Town of Huntington,
316 F.3d 357 (2d Cir. 2003).........................................................................................25, 26, 29 iii

Case 1:08-cv-01938-HHK Document 50-1 Filed 06/02/10 Page 4 of 51
*FOP Library of Cong. Labor Comm. v. Library of Cong., 639 F. Supp. 2d 20 (D.D.C. 2009) ...............................................................................22, 30, 31
Freeman v. Cavazos, 756 F. Supp. 1 (D.D.C. 1990) ..................................................................................................32
Gamble v. City of Escondido, 104 F.3d 300 (9th Cir. 1997) ...................................................................................................25
Gresham v. Windrush Partners, Ltd., 730 F.2d 1417 (11th Cir. 1984) ...............................................................................................30
Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308 (1999) ................................................................................................................33
Harris County, Tex. v. Gist, 976 F. Supp. 601 (S.D. Tex. 1996) ..........................................................................................37
*Huntington Branch, NAACP v. Town of Huntington, 844 F.2d 926 (2d Cir. 1988)......................................................................................... 24-25, 29
Indian Path Med. Ctr. v. Leavitt, No. 04-01000 (HHK), 2006 WL 1663453 (D. D.C. June 9, 2006) .........................................32
Jasperson v. Fed. Bureau of Prisons, 460 F. Supp. 2d 76 (D.D.C. 2006) .....................................................................................22, 37
Langlois v. Abington Hous. Auth., 207 F.3d 43 (1st Cir. 2000) .....................................................................................................25
Leitner v. United States, 679 F. Supp. 2d 37 (D.D.C. 2010) ...........................................................................................22
Metropolitan Housing Development Corporation v. Village of Arlington Heights, 558 F.2d 1283 (7th Cir. 1977) .................................................................................................25
Meyer v. Holley, 537 U.S. 280, 290 (2003) .......................................................................................................40
Monument Realty LLC v. Wash. Metro. Area Transit Auth., 540 F. Supp. 2d 66 (D.D.C. 2008) ...........................................................................................37
Nat’l Fair Housing Alliance v. The Prudential Ins. Co. of Am., 208 F. Supp. 2d 46 (D.D.C. 2002) ...........................................................................................24
Pan Am Flight 73 Liaison Group v. Dave, No. 10-0077 JDB, 2010 U.S. Dist. LEXIS 46623 (D.D.C. May 12, 2010).............................34 iv

Case 1:08-cv-01938-HHK Document 50-1 Filed 06/02/10 Page 5 of 51
PCTV Gold, Inc. v. SpeedNet, LLC, 508 F.3d 1137 (8th Cir. 2007) .................................................................................................37
Pelfresne v. Village of Williams Bay, 865 F.2d 877 (7th Cir. 1989) ...................................................................................................36
Pfaff v. HUD, 88 F.3d 739 (9th Cir. 1996) .....................................................................................................25
*Population Inst. v. McPherson, 797 F.2d 1062 (D.C. Cir. 1986) ...................................................................................31, 32, 41
Price v. Pelka, 690 F.2d 98 (6th Cir. 1982) ............................................................................................... 40-41
Silver Sage Partners, Ltd. v. City of Desert Hot Springs, 251 F.3d 814 (9th Cir. 2001) ...................................................................................................31
South Camden Citizens in Action v. N.J. Dep’t of Env. Prot., 145 F. Supp. 2d 446 (D.N.J. 2001) ..........................................................................................41
Trafficante v. Metro. Life Ins. Co., 409 U.S. 205 (1972) ................................................................................................................40
United Church of the Med. Ctr. v. Med. Ctr. Comm’n, 689 F.2d 693 (7th Cir. 1982) ...................................................................................................36
*United States ex rel. Rahman v. Oncology Assocs., P.C., 198 F.3d 489 (4th Cir. 1999) .......................................................................................33, 34, 35
United States v. Edward Rose & Sons, 246 F. Supp. 2d 744 .................................................................................................................41
United States v. Edward Rose & Sons, 384 F.3d 258 (6th Cir. 2004) ...................................................................................................40
United States v. First Nat’l City Bank, 379 U.S. 378 (1965) ................................................................................................................35
United States v. Puerto Rico, 764 F. Supp. 220 (D.P.R. 1991)...............................................................................................41
United States v. City of Black Jack, 508 F.2d 1179 (8th Cir. 1974) ................................................................................................25
United States v. Yonkers Bd. of Educ., 837 F.2d 1181 (2d Cir. 1987) ..................................................................................................25 v

Case 1:08-cv-01938-HHK Document 50-1 Filed 06/02/10 Page 6 of 51
Univ. of Tex. v. Camenisch, 451 U.S. 390 (1981) .......................................................................................................... 21-22
Virginian Ry. Co. v. System Fed’n No. 40, 300 U.S. 515 (1937) ................................................................................................................35
WMATC v. Holiday Tours, 559 F.2d 841 (D.C. Cir. 1977) ................................................................................................22
Winter v. Nat. Res. Def. Council, Inc., 129 S. Ct. 365 (2008)...............................................................................................................22
STATUTES 42 U.S.C. § 3601...................................................................................................................... 40-41 42 U.S.C. § 3604.......................................................................................................................... 1-2 42 U.S.C. § 3605.......................................................................................................................... 1-2 42 U.S.C. § 3608.......................................................................................................................... 1-2 42 U.S.C. § 5301..............................................................................................................................4 42 U.S.C. § 5304..........................................................................................................................2, 5 Department of Defense Appropriations Act, 2008, Pub. L. No. 110-116, 121 Stat. 1295,
1343-44 (Nov. 13, 2007) .....................................................................................................4, 21 Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and
Hurricane Recovery, 2006, Pub. L. No. 109-234, 120 Stat. 418, 472-73 (June 15, 2006) ..................................................................................................................................... 3-4 Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006, Pub. L. No. 109-148, 119 Stat. 2680, 2779-81 (Dec. 30, 2005) ...........................................................................3, 4, 5, 21 La. Rev. Stat. § 42:7(A)(1)(b)........................................................................................................21 La. Rev. Stat. § 49:220.4(C) ..........................................................................................................21 La. Rev. Stat. § 49:220.5(G)(4) .....................................................................................................20
vi

Case 1:08-cv-01938-HHK Document 50-1 Filed 06/02/10 Page 7 of 51 OTHER AUTHORITIES 24 C.F.R. § 91.5 ...............................................................................................................................5 24 C.F.R. § 91.500 .........................................................................................................................21 71 Fed. Reg. 63,337 (Oct. 30, 2006)) ..........................................................................................4, 5 71 Fed. Reg. 7666 (Feb. 13, 2006)) .............................................................................................4, 5 72 Fed. Reg. 70,472 (Dec. 11, 2007) (Ex. F)...................................................................................5 Field Hearing Before the Subcommittee on Housing and Community Opportunity of the
Committee on Financial Services, Implementation of the Road Home Program Four Years After Hurricane Katrina (Aug. 20, 2009), Ser. No. 111-70 .................................. passim 11A Wright, Miller and Kane, Federal Practice and Procedure § 2948.1 (1995)………………..30 James Wm. Moore, et al., Moore’s Federal Practice § 65.20 (2010)……………………………30 James Wm. Moore, et al., Moore’s Federal Practice at § 65.22[3] (2010)………………………40 *Authorities chiefly relied upon
vii

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INTRODUCTION In this action, the Plaintiffs—two fair housing organizations, five African American homeowners, and a proposed class of approximately 20,000 African American homeowners— challenge racial discrimination in the design and operation of the Road Home program, an $11 billion recovery program intended to help homeowners affected by Hurricanes Katrina and Rita. The Plaintiffs allege that the Defendants, Paul Rainwater (“Rainwater”), Executive Director of the Louisiana Recovery Authority (“LRA”), and the U.S. Department of Housing and Urban Development (“HUD”), are in violation of Title VIII of the Civil Rights Act of 1968, 42 U.S.C. §§ 3604, 3605, and 3608 (the “Fair Housing Act” or “Title VIII”), and the Housing and Community Development Act of 1974, 42 U.S.C. § 5304 (the “HCDA”), by implementing a grant formula that has had a disparate impact on African American homeowners in New Orleans. The formula adversely affects African American homeowners, as it ties the amount of rebuilding grants to pre-storm home values, which were far lower in predominantly African American communities than predominantly White communities, leaving African American families with more frequent and larger gaps between their rebuilding grants and the cost to rebuild their homes. In this motion, the Plaintiffs seek a temporary restraining order and, if necessary, a preliminary injunction enjoining LRA from depleting the remaining federal Road Home funds that are needed to provide the prospective equitable relief the Plaintiffs seek – the recalculation of grants based on a non-discriminatory formula. Without temporary and, if necessary, preliminary injunctive relief, the LRA will continue to commit the balance of available funds, making those funds unavailable to rectify the disparate impact that past grant awards have had on African American homeowners. Accordingly, the Plaintiffs respectfully request that this Court
1

Case 1:08-cv-01938-HHK Document 50-1 Filed 06/02/10 Page 9 of 51
preserve the status quo until it can adjudicate the merits of this action and award whatever relief is warranted.
PROCEDURAL BACKGROUND On November 12, 2008, the Greater New Orleans Fair Housing Action Center, National Fair Housing Alliance, and five African American homeowners from New Orleans (“Plaintiffs”), filed the instant action against the U.S. Department of Housing and Urban Development (“HUD”) and the Louisiana Recovery Authority’s (“LRA”) Executive Director Paul Rainwater, alleging that Defendants developed, implemented, and oversaw the Road Home program in violation of the nondiscrimination and affirmative fair housing provisions of the Fair Housing Act and the HCDA, because the program has an unlawful disparate impact on African American homeowners. Dkt. No. 1, ¶¶ 74-77.1 The Plaintiffs seek declaratory and injunctive relief to end the discriminatory operation of the Road Home program and to direct the Defendants to develop and apply a new, non-discriminatory grant formula. Id. at 17. On March 6, 2009, HUD moved to dismiss for lack of jurisdiction and for failure to state a claim on which relief can be granted. Dkt. No. 22. On May 5, 2009, Rainwater moved to dismiss for lack of jurisdiction, failure to state a claim, and a sovereign immunity defense. Dkt. No. 28. Rainwater also moved for a transfer of venue to the Middle District of Louisiana. Id. On June 5, 2009, Plaintiffs opposed the Defendants’ motions to dismiss and transfer venue. Dkt. No. 34. The same day, HUD responded to Rainwater’s motions, arguing that the Plaintiffs have
1 Section 3604(a) makes it unlawful to “make unavailable or deny” housing to any person because of race. 42 U.S.C. § 3604(a). Section 3605(a) makes it unlawful to discriminate on the basis of race in the availability, terms, or conditions of residential real estate-related transactions. Id. § 3605(a). And § 3608(e)(5) of Title VIII requires HUD and recipients of federal funds to “administer the programs and activities relating to housing and urban development in a manner affirmatively to further” fair housing. Id. § 3608(e)(5). Finally, § 5304(b)(2) of the HCDA requires that the use of all CDBG funds be conducted in a manner that “affirmatively further[s] fair housing.” Id. § 5304(b)(2).
2

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a right to sue Rainwater under the doctrine of Ex Parte Young, 209 U.S. 123 (1908), Rainwater’s sovereign immunity defense is meritless, and the action should not be transferred. Dkt. No. 33. On July 8, 2009, Rainwater and HUD filed reply briefs in support of their respective motions. Dkt. Nos. 38-40.
On March 3, 2010, the Court denied the Plaintiffs’ July 23, 2009 request for an oral hearing on the pending motions. See Minute Order of Judge Henry H. Kennedy, Jr. (Mar. 3, 2010); Dkt. No. 41. However, on May 24, 2010, the Court scheduled a hearing for June 4, 2010, at 3:00 p.m., and directed the parties to address (1) whether Ex Parte Young permits an order precluding a state officer from using funds that have not yet been released in a manner that violates federal law, and (2) how much money is available to the Road Home program but has not yet been disbursed to Louisiana for that use, and how much money Louisiana and/or the LRA have that has not yet been disbursed to Road Home recipients. Dkt. No. 45.
FACTUAL BACKGROUND A. Congress Responded to Hurricanes Katrina and Rita by Funding the Largest
Emergency Housing Program in American History, and Required States Spending the Funds to Follow Federal Non-Discrimination and Fair Housing Requirements In the aftermath of Hurricanes Katrina and Rita in 2005, Congress established a $19.7 billion Disaster Recovery Grant program. To support that program, Congress allocated Community Development Block Grant (“CDBG”) funds for necessary expenses related to disaster relief, long-term recovery, and rebuilding in the most affected areas in the Gulf of Mexico.2 Congress created and funded the Disaster Recovery Grant program through three
2 See Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006, Pub. L. No. 109-148, 119 Stat. 2680, 2779-81 (Dec. 30, 2005) (the “2005 Act”) (Ex. A); Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006, Pub. L. No. 109-234, 120 Stat. 418, 472-73 (June 15, 2006) (the “2006 Act”) (Ex. B); Department of Defense Appropriations Act, 2008, Pub. L. No. 110-116,
3

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appropriation statutes passed in 2005, 2006, and 2007. The first two statutes appropriated a combined $16.7 billion to the five affected states—Louisiana, Mississippi, Texas, Florida, and Alabama—for activities authorized under the CDBG statute. See 2005 Act, 119 Stat. at 2779-81 ($11.5 billion appropriation); 2006 Act, 120 Stat. at 472-73 ($5.2 billion appropriation).
From the overall $16.7 billion appropriation in the 2005 and 2006 Acts, HUD allocated $10.41 billion to Louisiana for disaster recovery expenses.3 Congress passed the third appropriations statute in late 2007, authorizing an additional $3 billion for supplemental CDBG grants to Louisiana “solely for the purpose of covering costs associated with otherwise compensated but eligible claims that were filed on or before July 31, 2007, under the Road Home program”—the program at issue in this litigation. 2007 Act, 121 Stat. at 1343-44. Thus, $13.41 billion of the total amount appropriated by Congress for the CDBG Disaster Recovery Grant program has been allocated to Louisiana.
The Disaster Recovery Grant program is governed by the same statutory and regulatory framework that governs regular CDBG funds.4 See 2005 Act, 119 Stat. at 2779-80; 2006 Act, 120 Stat. at 472-73. Congress granted HUD limited authority to waive certain CDBG program requirements if requested by a state, but Congress expressly retained the standard restrictions on
121 Stat. 1295, 1343-44 (Nov. 13, 2007) (the “2007 Act”) (Ex. C). For the Court’s convenience, the relevant CDBG Disaster Recovery Grant statutes and regulations are attached as exhibits A through F.
3 See 71 Fed. Reg. 7666, 7666 (Feb. 13, 2006) (Ex. D) (allocating $6.21 billion of the $11.5 billion from the 2005 Act to Louisiana); 71 Fed. Reg. 63,337, 63,338 (Oct. 30, 2006) (Ex. E) (allocating $4.2 billion of the $5.2 billion from the 2006 Act to Louisiana).
4 The regular CDBG program provides annual block grants to local and state governments for housing and housing-related development activities. 42 U.S.C. § 5301. The primary objective of the CDBG program is to develop “viable urban communities[] by providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low and moderate income.” Id. § 5301(c). The statutory requirements for the regular CDBG program are established in Title I of the HCDA. Id. §§ 5301-5318.
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the use of CDBG funds related to fair housing, nondiscrimination, labor standards, and the environment, and HUD may not waive them. See 2005 Act, 119 Stat. at 2780; 2006 Act, 120 Stat. at 472-73.
The appropriation statutes include a reporting and monitoring framework that supplements the regular CDBG program requirements. The 2005 and 2006 Acts provide that “prior to the obligation of funds each State shall submit a plan to the Secretary [of HUD] detailing the proposed use of all funds, including criteria for eligibility and how the proposed use of all funds . . . will address long-term recovery and restoration of infrastructure.” 2005 Act, 119 Stat. at 2780; 2006 Act, 120 Stat. at 473; see also 42 U.S.C. § 5304(a)(1). HUD’s implementing regulations require that grantees submit an “action plan” to fulfill this obligation. See 71 Fed. Reg. at 7669; 71 Fed. Reg. at 63,338-39; 72 Fed. Reg. 70,472, 70,472-73 (Dec. 11, 2007) (Ex. F). In addition to detailing the intended uses of all grant funds, the action plan must include a number of certifications,5 including assurances that the grantee will comply with the Fair Housing Act and will affirmatively further fair housing. 71 Fed. Reg. at 7671; 71 Fed. Reg. at 63,339; 72 Fed. Reg. at 70,472. HUD is required to review and approve these certifications before it obligates any grant funds. 42 U.S.C. § 5304(b). B. Louisiana Has Spent Approximately $11 Billion of the Recovery Funds on the Road
Home Program to Assist Homeowners With Repairing and Rebuilding Their Homes, But Applies a HUD-Approved Formula That Adversely Impacts African American Homeowners To administer the recovery funds from Hurricanes Katrina and Rita, including CDBG Disaster Recovery Grant funds, Louisiana created the LRA. LRA Strategic Plan FY 2008/2009
5 “Certification” is defined in HUD regulations to mean: “A written assertion, based on supporting evidence, that must be kept available for inspection by HUD, by the Inspector General of HUD, and by the public.” 24 C.F.R. § 91.5.
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Case 1:08-cv-01938-HHK Document 50-1 Filed 06/02/10 Page 13 of 51
at 1 (Ex. G). The LRA “was created by Executive Order in 2005 and in statute through Act 5 of the 2006 1st Extraordinary Session of the Louisiana Legislature. The organizational sunset date of the agency is July 1st, 2010, unless further extended by the Legislature.” Id. At the inception of this action, Paul Rainwater was the LRA’s Executive Director. See Compl. ¶ 19. As of January 1, 2010, Robin Keegan replaced Rainwater as the Executive Director of the LRA. See Louisiana Recovery Authority, Rainwater Joins Governor’s Staff, Keegan Named LRA Executive Director (Dec. 29, 2009) (Ex. H); Biography of Robin Keegan (Ex. I).6
From a total of over $13 billion in Disaster Recovery Grant funds, the LRA designated nearly $12 billion for housing programs known collectively as the Road Home program. See LRA Recovery Budget and Program Updates, Robin Keegan, at 1 (May 10, 2010) (“May 2010 LRA Budget Update”) (Ex. J). The largest Road Home component is the Homeowner Assistance Program,7 which provides rebuilding assistance to homeowners whose homes were destroyed or suffered major damage as a result of Hurricanes Katrina and Rita. See id. at 1-2 (stating that $10.348 billion of the total LRA budget of $13.781 billion has been obligated to the Homeowner Assistance Program, compared to $1.303 billion for rental assistance); The Road Home, Overview of the Homeowner Program (Ex. K).
Homeowners who agree to use Road Home funds to rebuild or repair their homes are eligible for rebuilding grants of up to $150,000. The Road Home Homeowner Program Policies, Version 3.4 (Mar. 15, 2007) at 12 (Ex. L). The formula for computing the grants, which was adopted by LRA and approved by HUD, provides that the grant amount is the lower of two
6 For the purposes of this Motion, the Plaintiffs will refer interchangeably to Rainwater and the LRA’s Executive Director.
7 Unless otherwise specified, this memorandum will refer to the Road Home Homeowner Assistance Program as the “Road Home” program for brevity.
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values: (1) the home’s pre-storm value (minus any other compensation the applicant received for loss to the structure, such as insurance proceeds), or (2) the cost of repairing damage to the home (minus any other compensation the applicant received for loss to the structure). Id. Hereinafter, the Plaintiffs refer interchangeably to the cost of repairing damage, the cost of damage, and the estimated cost of damage. In May 2007, individuals with incomes at or below 80 percent of the area median income became eligible for an Additional Compensation Grant of up to $50,000. LRA Action Plan Amendment 14 (First Allocation) – Road Home Homeowner Compensation Plan (May 14, 2007) at 7 (Ex. M).
Consistent with the statutory and regulatory framework described above, the LRA proposed and developed the Road Home grant formula and the details of the Road Home program in consultation with HUD and subject to HUD’s ongoing approval and oversight. See Testimony of Paul Rainwater, Executive Director of the LRA, Before the U.S. Subcommittee on Housing and Community Opportunity (Aug. 20, 2009) at 87 (Ex. N) (stating that HUD had approved “two overarching Action Plans” and “Louisiana ha[d] presented” 45 amendments to HUD “to clarify programmatic rules and outline additional uses of funds”); State of Louisiana Office of Community Development Disaster Recovery Unit (Ex. O) (listing action plans and amendments approved and rejected by HUD).
As the Plaintiffs alleged in their Complaint and document below, the requirement that the Road Home grant not exceed the pre-storm value of the home has had a disparate impact on African Americans. Pl’s Complaint ¶¶ 52-60 (Dkt. 1). Because homes in predominantly African American communities had lower pre-storm values than comparable homes in predominantly White communities, and the Road Home program provides a grant based on the lesser of the prestorm value or the cost of repairing damage, African Americans have been more likely than
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Whites to receive a Road Home grant based on the pre-storm value of their home rather than on the higher cost of repairing damage. Id. ¶¶ 52-55. As a result, African American homeowners are more likely than White homeowners to have a gap between their rebuilding resources and the cost to rebuild and, on average, their gaps are larger. Id. ¶¶ 55-57.
C. The Road Home Program Grant Formula Has Had a Disparate Impact on African American Home Owners Notwithstanding that the Plaintiffs have yet to conduct discovery in this action, evidence
from publicly-available sources reveals that the Road Home program’s grant formula has had an adverse impact on African American homeowners in New Orleans. First, homes in African American communities have lower values than homes in predominantly White communities. Second, by linking the amount of the grant award to the pre-storm home value, the Road Home formula ensures that African Americans are more likely than Whites to receive grants based on a low pre-storm home value and face larger gaps between the cost of repairing their homes and their Road Home grants.
i. Homes in Predominantly African American Communities Have Lower Values Than Homes in Predominantly White Communities
Both statistical and testimonial evidence demonstrate that African Americans in New Orleans are much more likely than Whites to own homes with lower values, even when the homes are comparable. First, U.S. Census data shows that before the storm, 80% of African American homeowners in New Orleans owned homes worth less than $100,000, compared to 33% of White homeowners; 89% of African American homeowners owned homes worth less than $125,000, compared to 44% of White homeowners; and 93% of African American homeowners owned homes worth less than $150,000, compared to 55% of White homeowners.
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Percentage of African American and White Homeowners Who Own Homes Less Than $100,000, $125,000 and $150,000 in Orleans Parish (Ex. P).

Percent of Homes Below Value

Racial Impact of of Road Home Formula in New Orleans

100

Based on Housing Values from the 2000 Census
93

89

90

80

80

70

60

55

50

44

40

33

30

20

10

0

W hite

Afric an-Am eric an

<$100,000

<$125,000

<$150,000

Second, U.S. Census data broken down by Census tract demonstrates a strong negative correlation between the pre-storm percentage of African American homeowners in a neighborhood and median home value. See African American Homeowners and Home Values by Census Tract, Orleans Parish (Ex. Q). The disparities in pre-storm home values between predominantly African American and predominantly White communities can be discerned even more clearly from a map of New Orleans reporting for each Census tract the median home value and the percentage of African American owner-occupied homes. African American Percentage of Owner Occupied Homes and Median Home Values in Orleans Parish (Ex. R) (applying the same 2000 Census data). The map paints a stark picture: almost none of the Census tracts where African Americans own 60% or more of the homes has a median home value of $150,000 or
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Case 1:08-cv-01938-HHK Document 50-1 Filed 06/02/10 Page 17 of 51 more, whereas the vast majority of Census Tracts where Whites own 80% or more of the homes have median home values between $150,000 and $300,000, or $300,000 to $500,000. Id. Similarly, while almost none of the Census tracts where Whites own 80% or more of the homes has a median home value less than $100,000, almost all Census Tracts where African Americans own 60% or more of the homes have a median home value of less than $100,000. Id.
Accord Kalima Rose, Annie Clark, & Dominique Duval-Diop, A Long Way Home: The State of Housing Recovery in Louisiana 2008 (“PolicyLink Study”), at 46, 49 (Ex. S) (reporting “average pre-storm home value by block” in “select heavily damaged neighborhoods” in New Orleans, to demonstrate how the “predominantly African-American neighborhoods” of “Gentilly, Lower 9th ward, and New Orleans East had lower pre-storm value”).
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Third, this statistical data is consistent with the first-hand observations of local real estate professionals and public officials who recognized that homes values in predominantly African American neighborhoods were typically much lower than home values in predominantly White neighborhoods. See Affidavit of Carol George Johnson, Owner and President of Johnson Mortgage Company ¶¶ 2, 5 (June 1, 2010) (Ex. T) (noting that her “chief responsibility is determining feasibility of mortgage loans based on . . . the market values of assets,” that she evaluates appraisals, and that her company “has originated more than 7,500 home mortgage loans for first time-homeowners”). Based on nearly two decades of experience as a lender and her public service as the Executive Director of the Finance Authority of New Orleans, Ms. Johnson “observed that pre-Katrina homes in predominantly African American neighborhoods were valued less than comparably sized homes in predominantly White neighborhoods.” Id. ¶ 6.
ii. As African Americans Own Homes With Lower Values, They Are More Likely Than Whites to Receive Rebuilding Grants Based on Low Pre-Storm Values and Have Larger Gaps in Their Rebuilding Resources
As a consequence of this phenomenon that homes in predominantly African American neighborhoods were worth less than homes in predominantly White neighborhoods, the Road Home grant formula adopted by LRA and approved by HUD resulted in African Americans being more likely than Whites to receive grant awards based on lower pre-storm values and, as a result, being more likely to confront costs of rebuilding their homes that exceed the size of their Road Home grants (and other resources, such as insurance proceeds). See The Road Home Homeowner Program Policies 3.4 at 12 (Ex. L).
First, the results of a study conducted in 2008 by PolicyLink, a national independent research organization, confirm that gaps between the amounts of Road Home program grants and
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the costs to rebuild homes are more frequent and larger for African American than for White home owners in Louisiana. The study reported that:
Nearly three-fourths of Road Home applicants had gaps between their rebuilding resources and the cost to rebuild. The gap was larger for African American applicants [$39,082 on average] than their white counterparts [$30,863]. . . . The grant formula had a more negative effect on those whose homes were valued less than their damage estimates. Those whose damages were greater than their prestorm home value—46.7% of all applicants rebuilding in place—experienced a gap of nearly $50,000. All the rest had a much lower gap—an average of about $14,000 (53.3% of all applicants rebuilding in place). PolicyLink Study at 42-43 (Ex. S). These disparities are most pronounced in New Orleans, where there are especially large differences in the value of homes located in predominantly African American and White neighborhoods. See id. at 42, 47, 49 (reporting large disparities in property values, grant awards, and gaps between the cost to rebuild homes and awards received for that purpose, finding “New Orleans’ Road Home applicants are more likely to have a gap than all applicants statewide,” and the average rebuilding gap was $55,000 in New Orleans compared to about $36,000 statewide). For instance, in the Lower 9th Ward, a predominantly African American neighborhood in New Orleans, the average pre-storm home value was $100,739, the average Road Home grant was $93,401, and the average gap between the cost to rebuild homes and the funds awarded for that purpose was $75,355 In the predominantly White New Orleans neighborhood of Lakeview, the average pre-storm home value was $336,064, the average Road Home grant was $109,777, and the average gap between the cost to rebuild homes and the amount of funds awarded to do so was $44,405. Id. And while 66.1% of the Lower 9th Ward applicants faced gaps of more than $40,000, only 35.2% of Lakeview applicants faced a gap of the same magnitude. Id. at 48. That Lower 9th Ward homeowners were more likely to face larger gaps in rebuilding resources than
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Lakeview homeowners is even more striking, given that the cost of repairing home damages was,

on average, $78,000 less in the Lower 9th Ward than in Lakeview.

Lower 9th Ward

Lakeview

Howeowner Demographics

Majority African American

Majority White

Average Pre-Storm Value

$100,739

$336,064

Average Damage Estimate

$203,597

$281,537

Average Road Home Grant Award

$93,401

$109,777

Gap Between Avg. Damage Estimate and Avg. Total Resources
Percentage of Homeowners Facing Gaps of $40,000 or more

$75,355 66.1%

$44,405 35.2%

Anecdotal accounts are consistent with these patterns. For example, Ms. Carol George Johnson, an owner of a mortgage company, who has handled property sales and valuations in New Orleans for nearly 20 years, attests that “because of the formula employed . . . homeowners in predominantly African American areas receive[d] lower grant awards than homeowners in predominantly White areas.” Johnson Aff. ¶¶ 5, 7.
Accounts from the named plaintiffs illustrate, in greater detail, the adverse effect of the Road Home program grant formula on African American homeowners.
Almarie Ford is an African American resident of Orleans Parish who, since 1988, has owned a home at 7071 Ridgefield Dr., New Orleans. Her home was “completely destroyed” by Hurricane Katrina, making it uninhabitable and forcing her to rent an apartment in Baton Rouge for two years while she continued to pay the mortgage on her home. Affidavit of Almarie Ford ¶¶ 1-3, 5 (May 24, 2010) (Ex. U). Although Ms. Ford received over $146,000 in insurance proceeds, she faced over $297,000 in rebuilding costs. Id. ¶¶ 4-5. Because the pre-storm value
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of her home was only $150,000 and that value was less than the cost of repairing the damage,
Ms. Ford received an award of only $3,468 ($150,000 minus her insurance proceeds), leaving a
gap in rebuilding costs of nearly $150,000. Id. ¶ 5. LRA also required Ms. Ford to assign to it
the proceeds from a small settlement with State Farm Insurance, “leaving [her] with a grant of
only $1,399.46.” Id. ¶ 5. As Ms. Ford explains:
I have been living in my property since September 2008, but repairs are not completed, because I did not receive enough money from the Road Home Program or insurance to complete repairs. The exterior of my house still requires painting, and storm shutters, and the interior requires finishing work. I had to spend $35,000 of my own funds and take out a SBA loan for $54,000 to repair the home, but the repairs are still not finished. I currently still owe $22,173.01 on the SBA loan. My mortgage company Wells Fargo Home Mortgage will not release the remaining balance of insurance funds until repairs are completed, but I cannot finish repairs because I have no money available.
Id. ¶ 6.
Edward Randolph is an African American resident of Orleans Parish who, since 2000,
has owned a “duplex” at 8851-8853 Gervais St., New Orleans, 70127, half of which he rented
out prior to Hurricane Katrina. Affidavit of Edward Randolph ¶¶ 1-2 (May 24, 2010) (Ex. V).
Mr. Randolph’s home suffered more than $308,193 in rebuilding costs. Id. ¶ 6. But because his
home’s pre-storm value was $135,000, he received a Road Home grant of only $16,649.92 --
$135,000 minus his insurance proceeds of about $107,000 and minus the $10,500 FEMA grant
he had received to fix structural damage. Id. ¶¶ 4-5. Mr. Randolph describes the consequences
of the gap between the Road Home grant award and the cost of repairing his home:
With the grant award I received from the Road Home, insurance, and FEMA, I am still short $173,193 needed to rebuild my house. . . . I was able to move back into my house in December 2009, after renting an apartment in Luling, Louisiana, 25 miles upriver of New Orleans. During this time, I had to pay rent and my mortgage, and almost lost my house twice to foreclosure because I was unable to afford both of these responsibilities. I am still unable to rent the other side of my house, and all repairs are not yet completed.
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Id. ¶¶ 6-7. If the LRA had awarded grants based on the cost of repairs, rather than on pre-storm home value, Ms. Ford and Mr. Randolph each would have received a grant of $150,000, instead of grants of $1,399 and $16,649, respectively. Ford Aff. ¶ 5; Randolph Aff. ¶ 5. D. The LRA Executive Director Admits That the Road Home Grant Formula Has
Adversely Affected African American Homeowners In August, 2009, the House Subcommittee on Housing and Community Opportunity8 held a hearing on the administration of the Road Home program and the extent to which it has operated adversely to African American home owners. At that hearing, in his capacity as Executive Director of the LRA, Rainwater admitted that the Road Home program had produced an adverse effect on African American homeowners. Field Hearing Before the Subcommittee on Housing and Community Opportunity of the Committee on Financial Services, Implementation of the Road Home Program Four Years After Hurricane Katrina (Aug. 20, 2009), Ser. No. 11170, at 23 (Ex N) (“Hearing Transcript”), at 23-24, available at http://www.house.gov/apps/list/hearing/financialsvcs_dem/hrhus_082009.shtml. In his testimony, Rainwater confirmed that the Road Home grant formula has had an adverse effect on African American homeowners. First, Rainwater agreed that “home values in predominantly African American neighborhoods tend to be lower than values in similar houses in predominantly white neighborhoods.” Id. at 23; see also id. at 18 (Rainwater stating that the additional compensation grant was created because assessments in “parts of New Orleans were
8 The House Subcommittee on Housing and Community Opportunity has jurisdiction over HUD and its implementation of the Road Home program. See House Committee on Financial Services, Committee/Subcommittee Jurisdiction: Housing and Community Opportunity (Ex. W) (“The Housing and Community Opportunity subcommittee . . . oversees the Department of Housing and Urban Development . . . . The subcommittee also handles matters related to public, affordable, and rural housing, as well as community development . . . .”).
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lower than other parts, like Lakeview”). Next, when asked whether it is “true that AfricanAmerican homeowners are more likely to receive what is called the pre-storm value for their homes by virtue of the [] methodologies that you use to compute values—is it true that they are more likely to receive the pre-storm value as opposed to the actual cost to repair value,” Rainwater agreed, “Yes sir, I am sure it is. . . . I do not deny that.” Id. at 23-24.
Rainwater also admitted that most low-income homeowners lack the resources to rebuild their damaged homes, agreeing that low-income homeowners “9 times out of 10, they cannot save the money or have the money by which to get these homes [repaired].” Id. at 17. Overall, Rainwater disclosed, the Road Home grant formula had left a gap between the cost of rebuilding homes in New Orleans and the grant funds available for that purpose. As he explained, LRA’s “analysis showed a gap in homeowner rebuilding resources available in the city of New Orleans, of between $1.6 billion and $2.3 billion. . . . Many low-to-moderate income homeowners may not have the resources to build their homes with the funds available.” See id. at 90. E. More than $500 Million in Road Home Monies Are Needed to Fund the Road Home
Grants Recalculated Through Use of a Non-Discriminatory Formula Although the Plaintiffs lack access to LRA’s current program data, publicly available information reveals that the cost of recalculating Road Home grants in Orleans Parish, based on a formula with no adverse impact, is estimated to exceed $500 million. The computation of this estimate is straightforward. The starting point is 41,419, the number of Road Home grant recipients in Orleans Parish who have received rebuilding grants under Option 1. See State of Louisiana, Office of Community Development, The Homeowner Assistance Program Week 201 Situation & Pipeline Report (May 11, 2010) at 17 (Ex. X). Next, this number is multiplied by 46.7% to reflect the percentage of recipients who received a grant
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based on pre-storm home value, resulting in 19,343 residents of Orleans Parish who are estimated to have received grants based on the pre-storm value of their homes. (These individuals would receive higher rebuilding grants under a grant formula based on the cost of repair). PolicyLink Study at 43 (Ex. N). This number is again multiplied, this time by 48.9%, the percentage of recipients who have incomes above 80% of the area median income, id. at 37, as they were ineligible for the Additional Compensation Grant, which was initially limited to $50,000 but today is limited only by the full cost of repair.9 Thus, 9,459 recipients in Orleans Parish would be expected to benefit from a recalculated grant formula. Finally, to estimate the cost of funding the difference between the old grants and the recalculated grants for 9,459 recipients in Orleans Parish, their number is multiplied by the average gap of $54, 586 between the grants awarded and the cost of repairing homes in New Orleans. Id. at 47. The ensuing estimate of the additional monies needed to fund recalculated Road Home grants for Orleans Parish residents is $516 million. F. LRA Has Announced Plans That, in the Near Future, Would Deprive the Plaintiffs
of Their Ability to Obtain Equitable Relief in This Action Since 2009, the LRA has taken action to obligate large portions of the remaining federal emergency CDBG funds that HUD has provided for the Road Home Homeowner Assistance program. And now, with less than a month before the LRA is scheduled to dissolve
9 Last year, the LRA amended its formula to remove the $50,000 cap on the Additional Compensation Grant. LRA Proposed Action Plan Amendment 39, Removal of Affordable Compensation Grant Cap (Oct. 12, 2009) at 1 (Ex. Y). As a result, Road Home grant recipients with incomes at or below 80% of the area median income should be entitled to a grant based on the full cost of repair. Accordingly, it does not appear that these low-income individuals would receive a higher grant award if the Court orders the LRA to implement a non-discriminatory formula based on the cost of repair.
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organizationally,10 the LRA has announced plans to direct how the $148 million in remaining Road Home funds it possesses should be expended by whatever organization assumes its duties. See generally Proposed Action Plan Amendment No. 43 (Third Appropriation) – Homeowner Unmet Recovery Needs Program To be Submitted for LRA Approval: May 19, 2010 (Apr. 28, 2010) (Ex. aa) (“Action Plan Amendment 43”). Equally critical, only $500 million in unobligated funds remain with HUD from the third appropriation that Congress earmarked for the Road Home program. And it isn’t even clear that, were the Court to grant the relief requested, this $500 million could be used entirely to fund the recalculated Road Home grants, as HUD may be required to direct a portion of this fund to defray expenses incurred by the LRA or Louisiana under Options 2 and 3 of the Road Home program, as well as expenses for compliance and assurance. See Affidavit of Peter Romer-Friedman ¶ 5 (June 2, 2010) (Ex. bb).
It should be clear, therefore, that in the very near future, there will be insufficient monies remaining to fund the equitable remedy the Plaintiffs seek. As the remaining funds that HUD and LRA together have in their custody are approximately $648 million, assuming none of those monies has already been committed for other purposes, there are scarcely sufficient monies remaining in the Road Home Program to permit funding of the grants to Orleans Parish residents recomputed through use of a non-discriminatory formula. Any further commitment of the remaining Road Home monies would forever deny the Plaintiffs an opportunity to obtain a full equitable remedy in this action.
i. LRA’s Recent Actions Reduced its Remaining Road Home Funds to $148 Million While the LRA has taken a number of steps to obligate its remaining Road Home funds, by far the LRA’s most significant action was removing the $50,000 cap on the Additional 10 By statute, the LRA Board will sunset on June 30, 2010. See Louisiana Recovery Authority, Resolution to Approve Strategic Allocation of Remaining Unspent Funds (May 17, 2010) at 2 (Ex. Z).
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Compensation Grants (“ACG”) given to homeowners with incomes at or below 80% of the area
median income. See LRA Proposed Action Plan Amendment 39, Removal of Affordable
Compensation Grant Cap (Oct. 12, 2009) (Ex. Y); Letter from Yolanda Chavez, Deputy
Assistant Secretary for Grant Programs, to Paul Rainwater (Oct. 14, 2009) (“HUD Letter”) (Ex.
cc) (acknowledging LRA’s action plan amendment to “remove[e] the $50,000 cap for [ACGs] to
provide these low- to moderate-income homeowners with additional resources needed to recover
from Hurricanes Katrina and Rita”). Both Rainwater and HUD described removing the ACG
cap as an effort to assist low-income homeowners who received low Road Home grants based on
pre-storm homes values and, thus, faced large gaps in rebuilding costs that prevented them from realizing the program’s benefits.11
Although removing the ACG cap provided important assistance to thousands of very low-
income homeowners, including some members of the proposed Plaintiff class, it did not address
the gaps that many moderate-income African American homeowners continue to face.
Removing the cap did nothing to supplement the grants of homeowners whose incomes exceed
80 percent of the area median income. See, e.g., LRA Plan Amendment 39, at 1-2; Ford Aff. ¶ 5
(Ex. U) (stating that she was not eligible for a ACG and received a grant of $1,399); Randolph
Aff. ¶¶ 5-6 (Ex. V) (stating that because he received a grant of $16,649 he is still “short 11 See id.; Testimony of Paul Rainwater, Hearing Transcript at 11-12 (Ex. N); Katy Reckdahl and
David Hammer, Feds sign off on Road Home change, Times Picayune (Oct. 16, 2009), at 1 (Ex. dd) (“Oct. 16, 2009 Times Picayune Article”) (stating that HUD’s approval letter would permit LRA to “give up to $34,000 in extra grant money to as many as 19,000 low- to moderate-income homeowners, Rainwater said. The aim is to help people who had homes of modest value. Because the original grants were based on a home’s pre-storm value, in many cases they did not cover the cost of rebuilding. That was especially true in poorer neighborhoods, which have lower property values.”). Accordingly, both HUD and LRA acknowledged that their formula adversely impacted residents with more modest homes, who are disproportionately African-American. Absent any recognition that HUD had approved the formula that created the disparities in the first place, HUD Secretary Shaun Donovan hailed the removal of the ACG cap as “a good example of HUD’s willingness to alter ‘barriers that hamper recovery.’” Oct. 16, 2009 Times Picayune Article, at 1 (Ex. dd) (quoting Secretary Donovan).
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$173,193 needed to rebuild”).12 Moreover, it reduced the LRA’s remaining Road Home program funds by $317 million to a total of $148 million. May 2010 LRA Budget Update at 2 (Ex. J).
ii. The LRA Intends to Obligate the $148 Million of Remaining Funds Very Soon With only $148 million remaining in unobligated Road Home Homeowner Assistance funds, id., the LRA intends to obligate most, if not all, of the remaining funds it possesses by passing a $100 million-plus Action Plan Amendment (No. 43) to transform the remainder of the Road Home program from a grant program into a “construction lending program.” Action Plan Amendment 43 at 2 (Ex. aa).13 Amendment 43 would provide loans to homeowners who already received Road Home grants, but “have not yet been able to reoccupy their pre-storm dwelling due to unmet recovery needs.” Id. Last week, the LRA informed the Plaintiffs that it intends to approve the lending program as Action Plan Amendment 43 at its final board meeting in June before LRA dissolves, and then several other state bodies would pass the Amendment before its submission to HUD for approval. Romer-Friedman Aff. ¶¶ 4-5 (Ex. bb). Once LRA’s Board approves Amendment 43 (or any other amendment), it could be presented to HUD within about 8 days, as the only waiting period for action that state law imposes is a seven day period between approval by LRA and approval by a legislative body. See La. Rev. Stat. § 49:220.5(G)(4) (2010). Therefore, if LRA approves Amendment 43 on June 24, it could seek HUD’s approval by early- to mid-July. And
12 Indeed, only 42% of Road Home applicants have incomes at or below 80 percent of the area median income to qualify for an ACG. PolicyLink Study at 37 (Ex. S). Nor did removing the ACG cap correct the discriminatory formula that created the sizable gaps in the first instance.
13 To justify no longer providing rebuilding grants that need not be repaid and instead offering loans that must be repaid to private financial institutions, the LRA states that (1) despite Road Home program assistance, “20,000 households statewide . . . will not be able to rebuild and reoccupy their homes,” and (2) there will be thousands of homeowners who require additional financial assistance, especially in the current recession where construction lending has been significantly reduced.” Id. at 1.
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while HUD has 45 days to review and approve any Action Plan Amendment, HUD can approve the amendment immediately. 24 C.F.R. § 91.500. Accordingly, based on the schedule currently in place, LRA’s lending program will be ready for HUD approval in July or, at the latest, in August and can be implemented immediately thereafter. LRA, however, has the discretion to accelerate this process by moving its Board meeting to an earlier date, as long it provides public notice 24 hours in advance,14 in which case HUD could approve this amendment as early as midJune, 2010. Once LRA proposes and HUD approves an amendment obligating LRA’s remaining Road Home funds, these monies will become unavailable to fund an equitable remedy in this action.
iii. LRA May Also Request that HUD Disburse the $500 Million That Remains from the Road Home Appropriation, Jeopardizing the Availability of These Monies to Fund Recalculated Road Home Program Grants
In addition to obligating the money it currently possesses, the LRA may also request that HUD obligate, award, and disperse the remaining $500 million that HUD has in unobligated federal Road Home funds from the third Congerssional appropriation. See 2007 Act, 121 Stat. at 1343; Romer-Friedman Aff. ¶ 5 (Ex. bb). Since the LRA can make such a request in the same timeframe as it approves and submits Amendment 43 to HUD, there is a direct and immediate threat to the remaining $500 million that would otherwise be available to fund recalculated grants, should the Plaintiffs prevail in this action.
STANDARD OF REVIEW “‘The purpose of a preliminary injunction is merely to preserve the relative positions of the parties until a trial on the merits can be held.’” Chaplaincy of Full Gospel Churches v.
14 See La. Rev. Stat. § 49:220.4(C) (stating that the LRA and its board “shall be subject to. . . the laws relative to public records and open meetings . . . applicable to state agencies”); La. Rev. Stat. § 42:7(A)(1)(b) (“All public bodies . . . shall give written public notice of any regular, special, or rescheduled meeting no later than twenty-four hours before the meeting.”).
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England, 454 F.3d 290, 297 (D.C. Cir. 2006) (“CFGC”) (quoting Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981)). “To warrant preliminary injunctive relief, the moving party must show (1) a substantial likelihood of success on the merits, (2) that it would suffer irreparable injury if the injunction were not granted, (3) that an injunction would not substantially injure other interested parties, and (4) that the public interest would be furthered by the injunction.” Id. (citations omitted).
“These factors should be balanced against one another and ‘[i]f the arguments for one factor are particularly strong, an injunction may issue even if the arguments in other areas are rather weak.’” Jasperson v. Fed. Bureau of Prisons, 460 F. Supp. 2d 76, 88 (D.D.C. 2006) (Kennedy, J.) (quoting CityFed Fin. Corp. v. Office of Thrift Supervision, 58 F.3d 738, 747 (D.C. Cir. 1995)). Thus, “[t]he Court evaluates the four factors on a ‘sliding scale.’” FOP Library of Cong. Labor Comm. v. Library of Cong., 639 F. Supp. 2d 20, 24 (D.D.C. 2009) (Kennedy, J.) (quoting Davenport v. Int’l Bhd. of Teamsters, 166 F.3d 356, 361 (D.C. Cir. 1999)). “For example, if plaintiffs make[] a strong showing of irreparable harm and there is no substantial harm to defendants, the Court applies a correspondingly lower standard for likelihood of success.” Id. (citing WMATC v. Holiday Tours, 559 F.2d 841, 843 (D.C. Cir. 1977)).
The Plaintiffs need not show that irreparable harm is certain; they must only demonstrate “some likelihood of irreparable harm in the absence of an injunction.” Leitner v. United States, 679 F. Supp. 2d 37, 42 (D.D.C. 2010) (“Both the United States Supreme Court and the Court of Appeals for the D.C. Circuit have also emphasized that a plaintiff must show at least some likelihood of irreparable harm in the absence of an injunction.” (citing Winter v. Nat. Res. Def. Council, Inc., 129 S. Ct. 365, 375 (2008) (holding that a plaintiff must “demonstrate that irreparable injury is likely in the absence of an injunction,” and not a mere “possibility”);
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CityFed, 58 F.3d at 747 (holding that a plaintiff must demonstrate “at least some injury” for a preliminary injunction to issue”) (citation and internal quotation marks omitted))).
SUMMARY OF ARGUMENT As the Plaintiffs demonstrate below, they are entitled to a temporary restraining order and, if necessary, a preliminary injunction barring the LRA from obligating and/or spending the remaining Road Home Homeowner Assistance funds that could be used to provide the Plaintiffs with an equitable remedy. In recent months the LRA has already obligated and spent hundreds of millions of dollars of the remaining Road Home Homeowner Assistance funds. And within days or weeks, the LRA will obligate most or all of the remaining $148 million it possesses and also ask HUD to obligate and disburse the remaining $500 million in Road Home funds in HUD’s custody. If even a significant portion of these funds are obligated for a purpose other than relief in this action, it will forever deny the Plaintiffs an opportunity to obtain the full equitable relief they seek – the recalculation of Road Home grant awards in Orleans Parish on a non-discriminatory basis. Under these circumstances and particularly when government funds are at stake, courts routinely freeze disputed assets in order to preserve the status quo pending resolution of the litigation. In fact, the only unique or novel aspect of the Plaintiffs’ motion is that one Defendant, the LRA’s Executive Director Paul Rainwater, has actually conceded the merits of Plaintiffs’ disparate impact claim. The Plaintiffs can easily satisfy each part of the four-part balancing test to obtain a preliminary injunction. First, it is undisputable that the Plaintiffs will lack an adequate remedy to the discrimination they suffered if the LRA is permitted to further obligate and spend the
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remaining Road Home funds. Next, there will be no harm to the Defendants by temporarily freezing the remaining Road Home funds, and other interested parties will actually benefit from the preliminary relief the Plaintiffs seek, as existing Road Home applicants would receive grants instead of loans under the LRA’s proposed lending program.
Finally, the public interest strongly supports the issuance of a preliminary relief, because an injunction will preserve the opportunity of the Plaintiffs and this Court to vindicate the civil rights of homeowners who are victims of discrimination in the nation’s largest federal emergency housing program, a program to which Congress specifically attached fair housing and non-discrimination protections.
ARGUMENT The Plaintiffs Are Entitled to a Temporary Restraining Order and Preliminary Injunction Barring the Executive Director of LRA or a Successor From Obligating and/or Spending Any Funds Available for Relief in This Action, or Seeking From HUD the Further Obligation and/or Disbursement of Any Such Funds A. The Plaintiffs Have a Substantial Likelihood of Success on the Merits As the Plaintiffs have marshaled substantial evidence about how and why the Road Home Program grant formula has had a disparate impact on African American homeowners, the Plaintiffs have a very high likelihood of succeeding in their disparate impact claim. To determine the Plaintiffs’ likelihood of success, this Court should apply the burdenshifting framework that a number of Circuits have adopted to adjudicate FHA disparate impact claims, drawing on Title VII jurisprudence. See Huntington Branch, NAACP v. Town of Huntington, 844 F.2d 926, 935-36 (2d Cir. 1988) (adopting the burden shifting framework); see also Nat’l Fair Housing Alliance v. The Prudential Ins. Co. of Am., 208 F. Supp. 2d 46, 60 (D.D.C. 2002) (“Courts have applied the basic burden-shifting scheme used to review disparate
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impact claims brought under Title VII . . . to disparate impact claims brought pursuant to the
FHA.”) (citations omitted).
The Second Circuit and “several [other] circuits have adopted this burden-shifting
framework,” 2922 Sherman Ave. Tenants Assoc. v. District of Columbia, 444 F.3d 673, 680
(D.C. Cir. 2006) (discussing competing approaches for adjudicating FHA disparate impact
claims, but declining to adopt a standard, as the plaintiffs could not satisfy either standard)
(citing Darst-Webbe Tenant Ass’n Bd. v. St. Louis Hous. Auth., 417 F.3d 898, 901-02 (8th Cir.
2005); Langlois v. Abington Hous. Auth., 207 F.3d 43, 51 (1st Cir. 2000)); see also Gamble v.
City of Escondido, 104 F.3d 300, 306 (9th Cir. 1997), which operates in the following manner:
In order to make out a prima facie case under the FHA on a theory of disparate impact, a plaintiff must demonstrate that an outwardly neutral practice actually or predictably has a discriminatory effect; that is, has a significantly adverse or disproportionate impact on minorities, or perpetuates segregation. The plaintiff need not make any showing of discriminatory intent, however. The burden then shifts to a defendant to demonstrate that “its actions furthered . . . a legitimate, bona fide governmental interest and that no alternative would serve that interest with less discriminatory effect.
Fair Hous. in Huntington Comm. Inc. v. Town of Huntington, 316 F.3d 357, 366 (2d Cir. 2003)
(citations and internal quotations omitted).15
15 In Metropolitan Housing Development Corporation v. Village of Arlington Heights, 558 F.2d 1283 (7th Cir. 1977), the Seventh Circuit adopted an alternative four-part test that would consider, inter alia, “whether any evidence indicates discriminatory intent.” Courts have vigorously rejected that test, however, as it “would place ‘too onerous a burden’ on plaintiffs to treat these four factors ‘as steps necessary to make out a prima facie case’” 2922 Sherman Ave., 444 F.3d at 680 (quoting Town of Huntington, 844 F.2d at 935-36), and it would contravene the FHA’s stated purpose of ending discrimination. See Pfaff v. HUD, 88 F.3d 739, 745-46 (9th Cir. 1996) (“we find no support for the proposition that a finding of intent is required to establish a prima facie case of disparate impact under the FHA”) (citing United States v. Yonkers Bd. of Educ., 837 F.2d 1181, 1217 (2d Cir. 1987) (“The consensus is that a plaintiff need prove only discriminatory effect, and need not show that the decision complained of was made with discriminatory intent.”); Town of Huntington, 844 F.2d at 934-35 (“The Act’s stated purpose to end discrimination requires a discriminatory effect standard; an intent requirement would strip the statute of all impact on de facto segregation.”); United States v. City of Black Jack, 508 F.2d 1179, 1185 (8th Cir. 1974) (“Effect, and not motivation, is the touchstone, in part because clever men may easily conceal their motivations, but more importantly, because . . . ‘we now firmly recognize that the
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The Plaintiffs have a strong likelihood of prevailing under this burden-shifting
framework. At the outset, the Plaintiffs can demonstrate a prima facie case under the FHA, as
the statistical, documentary, and testimonial evidence in the record shows that the LRA’s
“outwardly neutral practice” of using the pre-storm value to determine rebuilding grants,
“actually or predictably has a discriminatory effect,” on African American homeowners in New
Orleans; “that is, [it] has a significantly adverse or disproportionate impact.” Huntington
Comm., 316 F.3d at 366.
First, homes in predominantly African American neighborhoods have lower values than
homes in predominantly White neighborhoods in New Orleans, even when the homes are
comparable. African Americans are also more likely than Whites to own homes with lower
values than Whites. Indeed, the LRA’s Executive Director Paul Rainwater already conceded this
point by admitting to a Congressional panel that it is “true that home values in predominantly
African-American neighborhoods tend to be lower than values in similar houses in
predominantly white neighborhoods.” Hearing Transcript at 23 (Ex. N) (emphasis added).
The following record evidence supports his observation:
• U.S. Census Data shows nearly 80% of African American homeowners in New Orleans owned homes worth less than $100,000, compared to 33% of White homeowners, and 93% of African American homeowners own homes worth less than $150,000, compared to 55% of White homeowners. See Percentage of African American and White Homeowners Who Own Homes Less Than $100,000, $125,000 and $150,000 in Orleans Parish (Ex. P).
• U.S. Census data and an illustrative map show the median home value and percentage of African American owner occupied homes in each Census tract, and demonstrate that almost none of the Census tracts where African Americans own 60% or more of the homes have a median home value of $150,000 or more, whereas the vast majority of Census Tracts where Whites own 80% or more of the homes have a median home
arbitrary quality of thoughtlessness can be as disastrous and unfair to private rights and the public interest as the perversity of a willful scheme.’”) (citations omitted)).
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value between $150,000 and $300,000, or $300,000 and $500,000. African American Homeowners and Home Values by Census Tract, Orleans Parish (Ex. Q); African American Percentage of Owner Occupied Homes and Median Home Values in Orleans Parish (Ex. R); accord PolicyLink Study at 46, 49 (Ex. S) (reporting “average pre-storm home value by block” in “select heavily damaged neighborhoods” in New Orleans, to demonstrate how the “predominantly African American neighborhoods” of “Gentilly, Lower 9th ward, and New Orleans East had lower pre-storm value”).
• The affidavit of a veteran New Orleans real estate professional and public official with authority over housing issues, who states that “Based on my experience, I have observed that pre-Katrina homes in predominantly African American neighborhoods were valued less than comparably size homes in predominantly White neighborhoods.” Johnson Aff. ¶ 6 (Ex. T).
Second, LRA adopted and HUD approved a grant formula that determines awards based
on the lesser of the pre-storm home value or the cost of repairing damage. Road Home Policies
3.4, at 12 (Ex. L).
Third, as African American homeowners in New Orleans are more likely than White
homeowners to own homes with lower pre-storm values, and because Road Home program grant
awards are based on the lesser of pre-storm value of the home or the cost of repairing damage,
African American homeowners in New Orleans are more likely than White homeowners to
receive grants based on the pre-storm value of their homes rather than the higher cost of repair,
and experience more frequent and larger gaps in rebuilding resources than White homeowners.
The following evidence strongly supports these factual allegations:
• The PolicyLink study analyzed the LRA’s state-wide program data and found that the rebuilding gap “was larger for African American applicants [$39,082 on average] than their white counterparts [$30,863]” and that “[t]he grant formula had a more negative effect on those whose homes were valued less than their damage estimates.” PolicyLink Study at 42-43 (Ex. S).
• Because of the large racial disparities in home values in New Orleans, the disparities observed by PolicyLink are very likely to be even greater within New Orleans than statewide, as evidenced by the disparities reported for selected neighborhoods in New Orleans. See id. at 48 (finding that in the Lower 9th Ward, a predominantly African American neighborhood, the average pre-storm home value was $100,739, the
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average Road Home grant was $93,401, and the average gap in rebuilding resources was $75,355, whereas in the predominantly White neighborhood of Lakeview, the average pre-storm home value was $336,064, the average Road Home grant was $109,777, and the average gap in rebuilding resources was $44,405); see also id. (finding that 66.1% of the Lower 9th Ward applicants faced gaps of more than $40,000, while only 35.2% of Lakeview applicants faced such a substantial gap); id. at 42, 47 (stating that homeowners in New Orleans on average experienced a much larger rebuilding gap, $54,586, than homeowners statewide, $35,865).
• The affidavits of African American homeowners who received very low grant awards based on the pre-storm value of their homes and, therefore, have faced large gaps in rebuilding resources and have been unable to rebuild their homes. See Ford Aff. ¶¶ 56 (Ex. U) (stating that the damage to her home was $297,000 for which she received over $146,000 in insurance proceeds; but she received a Road Home grant of only $1,468 based on her pre-storm home value of $150,000, and as result has not finished repairing her home, despite spending $35,000 of her own money and taking out a $54,000 SBA loan); Randolph Aff. ¶¶ 5-7 (Ex. V) (stating that the damage to his home was over $308,000 for which he received about $107,000 in insurance proceeds, he received a Road Home grant of only $16,649, and as a result he is still “short $173,193 needed to rebuild [his] house” and “all repairs are not yet completed”).
• An affidavit of Carol George Johnson, the owner of a mortgage company in New Orleans that provides mortgages to thousands of New Orleans homeowners, who states that she has “observed that because of the formula employed [by LRA], Road Home Program grant awards have been issued in a manner such that homeowners in predominantly African American areas receive lower grant awards than homeowners in predominantly White areas.” Johnson Aff. ¶ 7 (Ex. T).
The LRA’s Executive Director conceded this point by telling Congress that he is “sure it
is true” and he “does not deny that” it is “true that African-American homeowners are more
likely to receive what is called the pre-storm value for their homes by virtue of the []
methodologies that [the LRA] use[s] to compute values . . . they are more likely to receive the
pre-storm value as opposed to the actual cost to repair value.” Rainwater Testimony, Hearing
Transcript at 23-24 (Ex. N).
Taken together, these key facts are more than sufficient to show that the LRA’s
“outwardly neutral” grant formula has “actually or predictably” had a “significantly adverse or
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disproportionate impact” on African American homeowners in New Orleans. Huntington Comm., 316 F.3d at 366. Accordingly, the Court should find that the Plaintiffs will be able to “make out a prima facie case under the FHA on a theory of disparate impact.” Id.
Once the Plaintiffs present a prima facie case, the burden shifts to the LRA to demonstrate that (1) it had a “bona fide governmental interest” in using the pre-storm value to determine the amount of Road Home grants, and (2) “no alternative would serve the [government’s] interest with less discriminatory effect.” Id. (quoting Town of Huntington, 844 F.2d at 936). The LRA, however, cannot satisfy either standard.
First, as the primary function of the Road Home Homeowner Assistance program is to assist homeowners in rebuilding their homes, see LRA Action Plan Amendment 14 (May 14, 2007) at 1 (Ex. M), LRA cannot assert that it has a bona fide interest in using the pre-storm value to determine Road Home grants when that formula will leave, and has left, owners of homes in areas with depressed property values without the means to complete repairs. As Rainwater has made clear and as the record evidence shows, a homeowner who receives an Option 1 Road Home grant based on a pre-storm value will typically not have adequate funds to rebuild his or her home, whereas a homeowner who receives a grant based on the cost of repairing the damage typically will be able to rebuild his or her home. See Hearing Transcript at 11, 17-20, 90; see supra at 11-14.
Second, the LRA cannot show the absence of a less discriminatory alternative. Huntington Comm., 316 F.3d at 366. Indeed, an alternative that would have had no adverse impact was readily available. LRA’s Executive Director conceded an across-the-board grant formula based on the cost of repairing damage would have been an acceptable alternative and would have reduced or eliminated the disparities faced by owners of homes in areas with low
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pre-storm values, most of whom in New Orleans were African American. See Hearing Transcript at 18-19, 23-24. Nor is there any greater likelihood that HUD could satisfy this standard. Therefore, neither the LRA nor HUD can claim that a less discriminatory alternative was unavailable.
As there is little chance the Defendants can carry their burden of rebutting the Plaintiffs’ prima facie case, the Plaintiffs have a strong likelihood of prevailing in their disparate impact claim. Accordingly, the Plaintiffs have satisfied the first part of the four-part balancing test for temporary and preliminary relief. B. Absent an Order Freezing the Assets Available to Satisfy the Equitable Relief the
Plaintiffs Seek in This Action Until the Merits of This Action Can be Adjudicated, the Plaintiffs Will Be Irreparably Harmed For an injury to constitute irreparable harm, it “must be ‘certain and great,’ ‘actual and not theoretical,’ and ‘of such imminence that there is a clear and present need for equitable relief to prevent irreparable harm.’” FOP Library of Cong. Labor Comm., 639 F. Supp. 2d at 24 (quoting CFGC, 454 F.3d at 297). In addition, it “must be ‘beyond remediation,” which means that “[t]he possibility that adequate compensatory or other corrective relief will be available at a later date, in the ordinary course of litigation weighs heavily against a claim of irreparable harm.” Id. (quoting CFGC, 454 F.3d at 297-98 (citation omitted)); see also 11A Wright, Miller and Kane, Federal Practice and Procedure § 2948.1 (1995) (“Only when the threatened harm would impair the court’s ability to grant an effective remedy is there really a need for preliminary relief.”)).16
16 In the context of the FHA, a number of courts have adopted a rebuttable presumption of irreparable harm when the court finds that the Plaintiffs have demonstrated a likelihood of success on the merits. See Gresham v. Windrush Partners, Ltd., 730 F.2d 1417, 1423 (11th Cir. 1984) (holding that “because of the subtle, pervasive, and essentially irremediable nature of racial discrimination, proof of the existence of discriminatory housing practices is sufficient to permit a court to presume irreparable
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The LRA has already obligated and spent hundreds of millions of dollars of the remaining Road Home Homeowner Assistance funds, and in the near future it will take action to obligate and spend the $148 million of remaining funds it possesses. See supra at 17-21. Similarly, the LRA or its successor could obtain from HUD within the near future an obligation and disbursement of all or part of the $500 million from Congress’ third emergency appropriation that remains unobligated. See id. at 21. As these funds taken together, which amount to $648 million, barely exceed the estimated cost of $516 million needed to fund recalculated grants for nearly 9,500 homeowners in Orleans Parish, any additional commitment of the remaining Road Home funds will likely preclude the full award of equitable relief the Plaintiffs seek in this action.
Once the LRA and HUD obligate a portion or all of the remaining Road Home funds for other purposes, the funds “cannot be recouped” and, therefore, the Plaintiffs will suffer irreparable harm, as “[i]t will be impossible in the absence of a preliminary injunction to award the plaintiffs the relief they request if they should eventually prevail on the merits.” Ambach v. Bell, 686 F.2d 974, 986 (D.C. Cir. 1982) (holding that the threat of an agency obligating its remaining appropriated funds to other recipients before the conclusion of the action supports a finding of irreparable harm) (quoted in City of Houston v. HUD, 24 F.3d 1421, 1426 (D.C. Cir. 1994)); see also Population Inst. v. McPherson, 797 F.2d 1062, 1081 (D.C. Cir. 1986).
As there is virtually no likelihood that the Plaintiffs’ claim will be adjudicated on the merits before the remaining funds are obligated and/or dispersed, the risk is great and imminent that some or all of these funds will forever be lost to the Plaintiffs, causing them irreparable
injury”); see also Silver Sage Partners, Ltd. v. City of Desert Hot Springs, 251 F.3d 814 (9th Cir. 2001). While the Court need not reach this issue to determine that the Plaintiffs will suffer irreparable harm, these cases show the importance that federal courts assign to remedying ongoing fair housing violations.
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harm. Compare Population Inst., 797 F.2d at 1081 (finding irreparable harm and granting injunction pending appeal because “this court will be unable to grant effective relief” if the agency distributes to other groups the funds plaintiff sought to enjoin the agency from withholding), with Freeman v. Cavazos, 756 F. Supp. 1, 3 (D.D.C. 1990) (finding no irreparable harm when a school challenged an agency’s decision to reduce funding the following year, but “a decision on the merits, could be in place well before the end of th[is] school year,” “[t]here is little danger” that the “funds in question will be irrevocably lost,” and the agency had “stipulated that it will not disburse these funds elsewhere pending resolution of this case.”).17
Under these circumstances, it is plain that, “to avoid having its case mooted,” a plaintiff challenging an agency’s use or allocation of funds “must . . . seek a preliminary injunction preventing the agency from disbursing those funds.” City of Houston, 24 F. 3d at 1427 (citing Population Inst., 797 F.2d at 1081 (“if the government in the instant case is permitted to distribute the $10 million to other organizations, the appeal will become moot.”)). Accordingly, the Plaintiffs seek, and the Court should award, temporary and, if necessary, preliminary relief to enjoin additional commitment and disbursement of the Road Home funds within the custody of LRA and HUD.
Nor can it be disputed that the Plaintiffs have an equitable interest in the disposition of the Road Home funds in LRA’s custody, and that the LRA’s plans to dispose of these funds will cause the Plaintiffs immediate and irreparable harm in the absence of temporary and preliminary
17 Accord Indian Path Med. Ctr. v. Leavitt, No. 04-01000 (HHK), 2006 WL 1663453, at *6 n.7 (D. D.C. June 9, 2006) (Kennedy, J.) (dismissing an action for lack of standing, but observing that without a preliminary injunction plaintiffs’ complaint challenging the allocation of Medicare funds would become moot “before a determination on the merits could be completed,” and stating that “D.C. Circuit case law makes clear that a plaintiff may only avoid having her complaint mooted by . . . ‘seek[ing] a preliminary injunction preventing the agency from disbursing the funds.’”) (quoting City of Houston, 24 F.3d at 1427).
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relief. See Ellipso, Inc., v. Mann, 480 F.3d 1153, 1160 (D.C. Cir. 2007) (holding that a District Court may issue a preliminary injunction “when a party has demonstrated an equitable claim to the assets”) (citing Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308, 332-33 (1999) (holding that a court may not enter an injunction freezing assets in action for damages where there is no equitable interest in frozen assets); Deckert v. Independence Shares Corp., 311 U.S. 282, 289-90 (1940) (permitting an injunction freezing assets because it assisted the ultimate equitable relief of rescission)); accord United States ex rel. Rahman v. Oncology Assocs., P.C., 198 F.3d 489, 496 (4th Cir. 1999) (holding that when a plaintiff “asserts a cognizable claim to specific assets of the defendant or seeks a remedy involving those assets, a court may in the interim invoke equity to preserve the status quo pending judgment where the legal remedy might prove inadequate and the preliminary relief furthers the court’s ability to grant the final relief requested.”).
In Ellipso, the D.C. Circuit affirmed a “preliminary injunction to preserve [the defendants’] assets for a potential judgment against [them],” because the plaintiff sought an “equitable remedy of an injunction” and not solely a remedy at law, and because there was evidence that the defendants were disposing of the disputed assets and would not have other significant assets from which they could satisfy a judgment. 480 F.3d at 1155, 1159-60.
Here, the identical conditions are present. The Plaintiffs have a strong equitable interest in the remaining Road Home funds, as their entire ability to obtain relief is tied directly to those funds, and the only type of relief they seek is the “equitable remedy of an injunction” requiring the LRA prospectively to implement the Road Home program in a non-discriminatory manner. Id. at 1159-60. Moreover, the record shows that LRA has already obligated and spent hundreds
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of millions of dollars in remaining Road Home funds, and in the near future the LRA and HUD will obligate and disburse the remaining funds they possess. See supra at 17-21.
Given that the Defendants currently possess about the same amount of funds as are needed to provide full equitable relief, it is clear that without an injunction the Defendants will lack sufficient funds to satisfy a judgment for the Plaintiffs, creating an imminent and concrete risk of irreparable harm. Compare Ellipso, 480 F.3d at 1155, 1159-60, with Pan Am Flight 73 Liaison Group v. Dave, No. 10-0077 JDB, 2010 U.S. Dist. LEXIS 46623, at *48-*49 (D.D.C. May 12, 2010) (finding no irreparable harm and rejecting a motion to freeze disputed assets until arbitration begins, as the plaintiff “only speculates that [the defendants] will dissipate the disputed funds – it has provided no evidence that the [defendants] intend to do so,” and “it has not demonstrated that the amount of funds [the defendants] could disperse would leave an insufficient amount to protect [the plaintiff’s] financial interests”).
Moreover, [t]he justification for a preliminary injunction [freezing the defendant’s assets] in this case is heightened by the fact that the public interest is at stake,” as thousands of African American homeowners are in jeopardy of losing the ability to enforce their federal civil rights in an action challenging discrimination in the nation’s largest emergency housing recovery program – a program for which Congress mindfully mandated non-discrimination protections and requirements affirmatively to further fair housing. Rahman, 198 F.3d at 499 (holding that in determining whether freezing the defendant’s assets is “a reasonable measure to preserve the status quo in aid of the ultimate equitable relief claimed . . . we may take into account that a court of equity has enhanced authority when the public interest is involved”); accord 13 James Wm. Moore, et al., Moore’s Federal Practice § 65.20, at 65-33 (2010) (“[A] district court may
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issue a preliminary injunction to freeze the defendant’s assets in a suit that seeks some equitable relief and involves the defendant’s assets, especially when the public interest is at stake.”).
Indeed, “when interim equitable relief is authorized and the public interest is involved, . . . ‘courts of equity may, and frequently do, go much farther both to give and withhold relief in furtherance of the public interest than they are accustomed to go when only private interests are involved.’” Rahman, 198 F.3d at 499 (quoting United States v. First Nat’l City Bank, 379 U.S. 378, 383 (1965) (quoting Virginian Ry. Co. v. System Fed’n No. 40, 300 U.S. 515, 552 (1937))); see also CFTC v. Next Fin. Servs. Unlimited, Inc., No. 04-80562, 2005 U.S. Dist. LEXIS 38965, at *31-*42, *46 (S.D. Fla. June 7, 2005) (following Rahman, 198 F.3d at 497, on the importance of the public interest, and denying a motion to vacate a TRO freezing a defendant’s disputed assets in an action brought by the federal government).
Finally, beyond the near certain loss of their opportunity to obtain equitable relief in this action, the Plaintiffs would likely face additional irreparable harm. Absent relief to enjoin commitment and disbursement of the remaining Road Home funds, many Plaintiffs will be unable to complete repairs to their homes in sufficient time to satisfy “covenants” required by LRA in every grant, that the homeowner “use the property within 3 years from the date of closing as a primary residence.” Road Home Homeowner Policies Version 7.0 at 48 (Ex. ee). LRA rules require that homeowners who fail to satisfy this covenant repay the entire grant, notwithstanding that the grant funds have been expended on repairs made to date. See id. (“Applicants who fail to meet the terms of the covenants are required to pay back the entire grant amount.”) (emphasis added).
Failure to occupy homes, because repairs couldn’t be completed without grants calibrated to the cost of repair, would likely cause most homeowners to become insolvent and risk the loss
35

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of their property altogether. See Johnson Aff. ¶ 5, 8 (Ex. T) (stating that “many of my clients [95% of whom are minority] . . . are at significant risk of losing their property because they are unable to adequately rebuild and return to their homes, and therefore they cannot comply with the Road Home Program covenant requiring them to use as their primary residence within three years from the date of their closing with the Road Home Program.”).18 The loss of property would, by its very nature, constitute irreparable harm to the Plaintiffs.
It is well settled that land is unique and its loss would cause irreparable harm. Pelfresne v. Village of Williams Bay, 865 F.2d 877, 883 (7th Cir. 1989) (“As a general rule, interference with the enjoyment or possession of land is considered ‘irreparable’ since land is viewed as a unique commodity for which monetary compensation is an inadequate substitute.”); United Church of the Med. Ctr. v. Med. Ctr. Comm’n, 689 F.2d 693, 701 (7th Cir. 1982) (uniqueness of land “settled beyond the need for citation.”). Thus, the LRA’s clawback provisions threaten many Plaintiffs’ primary asset – their homes – and poses a very real threat of irreparable harm.
For all these reasons, the Plaintiffs have shown that, absent the temporary and, if necessary, preliminary relief sought herein, they would almost assuredly, and certainly “likely,” suffer irreparable harm.
18 See also Affidavit of Seth Weingart, Homeownership Counseling Supervisor at the Greater New Orleans Fair Housing Action Center ¶ 5 (May 29, 2010) (Ex. ff) (stating that, as a housing counselor in New Orleans since 2006, he has observed that “many homeowners who received Road Home Program grant awards are at risk of losing their homes, because they are unable to satisfy the grant covenants to reoccupy their homes. They are at risk of the State of Louisiana taking their homes for failing to abide by the grant covenants, and at risk of foreclosure by their mortgage lenders for being unable to pay mortgages on homes they are unable to live in. These grantees would not have the financial capacity to repay a loan if such a program was available, due to the fact that they are already overburdened with a mortgage and other debts, lack of income, and poor credit. Many of the homeowners unable to rebuild are elderly and on fixed incomes, and will not be able to afford a loan regardless of the terms.”).
36

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C. A Preliminary Injunction Will Not Substantially Harm the Defendants or Other Interested Parties The third factor also weighs strongly in favor of granting preliminary injunctive relief.
Neither the Defendants nor any other interested third parties will suffer harm, let alone “substantial harm,” if this Court enjoins LRA from obligating or spending the remaining Road Home funds until it decides this case on its merits. See Jasperson, 460 F. Supp. 2d at 88 (“The court must consider . . . whether the issuance of injunctive relief would ‘substantially harm’ other parties”).
Unlike the immediate, certain and grave harm the Plaintiffs face, the LRA plainly will not suffer substantial harm. The delay in obligating and disbursing the remaining Road Home funds is insufficient to demonstrate substantial harm either to LRA or to HUD. Indeed, delay alone does not constitute harm to defendants or third parties sufficient to deny a request for injunctive relief. See Monument Realty LLC v. Wash. Metro. Area Transit Auth., 540 F. Supp. 2d 66, 80-81 (D.D.C. 2008) (finding that the balance of harms favored the plaintiff where it faced loss of the right to purchase unique and irreplaceable real property, while defendant transit authority merely faced delay in its ability to sell the property).19 In contrast to the temporary delay that the Defendants might experience if an injunction is granted, should the Court deny Plaintiffs’ motion for a preliminary injunction, the Plaintiffs will likely lose their opportunity forever to have the LRA recalculate their grants on a non-discriminatory basis. See City of Houston, 24 F.3d at
19 See also PCTV Gold, Inc. v. SpeedNet, LLC, 508 F.3d 1137, 1145 (8th Cir. 2007) (district court did not abuse its discretion in granting preliminary injunctive relief preventing the sale of defendant’s assets, because defendant faced only a delay in its ability to transfer the assets to a third-party purchaser, while plaintiff would forever lose its rights to purchase the assets in their current state); Harris County, Tex. v. Gist, 976 F. Supp. 601, 616-17 (S.D. Tex. 1996) (preliminary injunctive relief blocking federal distribution of funds was warranted where plaintiff county would otherwise suffer irreparable harm of losing its right to negotiate with defendant city over proper distribution of the funds, while defendant city would only face delay in receiving the grant money).
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1426-27 (to avoid having its case mooted, a plaintiff must seek injunctive relief before agency funds at issue are fully obligated or awarded); see supra at 31-32.
Moreover, no other interested parties20 will face substantial harm. First, the vast majority of individuals eligible for the LRA’s lending program – whether or not they are potential class members – will actually benefit from preliminary relief, as most individuals eligible for the LRA’s loan program would receive higher recalculated grants based on the cost of their repairs, rather than pre-storm value, should the plaintiffs prevail in this action.
There is no dispute that LRA’s lending program is limited to “Road Home recipients who are not able to get back into their homes with their current resources,” LRA Proposed Action Plan Amendment No. 43 at 3 (Ex. aa), and that homeowners who face sizeable gaps in rebuilding costs making it difficult for them to “get back into their homes” were far more likely to receive grants based on the lower pre-storm value than the cost of repairing damage. See PolicyLink Study at 43. Therefore, most of the homeowners eligible to receive a loan under the LRA’s new lending program received grants based on the lower pre-storm value. And these homeowners who received grants based on pre-storm values would receive a higher recalculated grant if this Court orders the LRA to implement a non-discriminatory formula.
The benefits of receiving a larger recalculated grant that need not be repaid undoubtedly exceed the value of receiving a loan, pursuant to LRA’s proposed Amendment 43, that must be
20 As a large portion of the Road Home grant recipients who have been unable to rebuild due to insufficient grants are actually members of the proposed plaintiff class, they cannot be considered “other interested parties.” Indeed, named Plaintiffs have affirmed that repairs to their homes remain incomplete because they still have not received sufficient funding from the Road Home Program, making them potentially eligible for the new lending program. See, e.g., Ford Aff. ¶ 6 (Ex. U) (“I have been living on my property since September 2008, but repairs are not completed, because I did not receive enough money from the Road Home Program or insurance to complete repairs.”); Randolph Aff. ¶ 6 (Ex. V) (“With the grant award I received from the Road Home, insurance and FEMA, I am still short $173,193 needed to rebuild my house.”).
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repaid in the near future. For example, a homeowner in the situation of Mr. Randolph, who received a grant of $16,649, would clearly prefer a recalculated grant of $150,000 instead of a loan of any amount. And for homeowners who have limited or fixed incomes, it is unlikely they would be able to repay a loan, making a grant the only feasible option. Moreover, for a homeowner who already has been forced to borrow funds because the Road Home grant award was insufficient to defray all rebuilding costs, offering him yet another loan – rather than a grant – will only increase his overall debt. See, e.g., Ford Aff. ¶ 6 (Ex. U).
Second, in evaluating the impact of an injunction on existing Road Home recipients, the Court must recognize that the LRA’s lending proposal will actually increase and further perpetuate discrimination against African American homeowners. Simply put, the LRA’s lending proposal will deepen the disparities between the benefits received by White and African American homeowners—Whites more often received grants based on the full cost of repairing their homes, while African Americans more often received grants based on the low pre-storm value of their homes plus a loan that must be repaid.
The balance of harms, therefore, decidedly tips in favor of granting preliminary relief, as the Plaintiffs risk the loss of any means to redress the harm giving rise to this action, whereas the Defendants, at most, face delay in implementing their programs. As most of the homeowners eligible to receive a loan under the program LRA presently contemplates would likely be eligible for higher recalculated grants and thus ultimately benefit from a delay, the balance tips even further towards granting preliminary relief.
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D. The Public Interest Unequivocally Favors Injunctive Relief The public interest plainly favors enjoining the LRA from obligating or spending the
remaining Road Home funds, and barring LRA from seeking the obligation and/or disbursement of the remaining funds HUD has, as denial of such relief will deprive the Plaintiffs of an ability to vindicate their civil and fair housing rights, and will guarantee that they will be denied an equal opportunity to benefit from the nation’s largest emergency housing program.
First, “[t]here can be no doubt that the public interest lies in terminating” such discrimination. Cook v. Billington, No. 82-0400, 1988 WL 35364, at *2 (D.D.C. Mar. 31, 1988). Indeed, the Supreme Court has recognized that the eradication of housing discrimination serves “an overriding societal priority.” United States v. Edward Rose & Sons, 384 F.3d 258, 264 (6th Cir. 2004) (quoting Meyer v. Holley, 537 U.S. 280, 290 (2003)). Moreover, eliminating housing discrimination and affirmatively promoting fair housing were the very purposes of enacting the Fair Housing Act. See 42 U.S.C. § 3601 (“It is the policy of the United States to provide, within constitutional limitations, for fair housing throughout the United States.”); see also Price v. Pelka, 690 F.2d 98, 101 (6th Cir. 1982) (“The eradication of housing discrimination is a policy that Congress considered to be of the highest priority.”) (citing Trafficante v. Metro. Life Ins. Co., 409 U.S. 205 (1972)). And, “[i]n deciding what issues are imbued with the ‘public interest,’ courts have given considerable weight to the policies of Congress[.]” James Wm. Moore, et al., Moore’s Federal Practice at § 65.22[3], at 65-58 (2010).
The importance of remedying housing discrimination is well established. Courts, including those within this Circuit, have routinely emphasized that remedying discrimination is an important public interest in cases involving violations of the Fair Housing Act. See, e.g., Brown v. Artery Org., Inc., 691 F. Supp. 1459, 1461 (D.D.C. 1987) (concluding that “the public
40

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interest would be better served by remedying any possible racial injustice” and denying defendants’ motion to stay); Brown v. Artery Org., Inc., 654 F. Supp. 1106, 1119 (D.D.C. 1987) (concluding that “the public interest will most readily be served if prevention of the spread of racial discrimination in housing is given priority weight.”); Price, 690 F.2d at 101 (“Private enforcement of the Fair Housing Act and 42 U.S.C. §§ 1981 and 1982 not only vindicates the civil rights of the individual victim of discrimination, but promotes the public interest by eradicating housing discrimination.”); United States v. Edward Rose & Sons, 246 F. Supp .2d 744, 755 (E.D. Mich. 2003) (“[W]here there has been a showing of housing discrimination, preliminary injunctive relief serves the public interest by carrying out the stated policy of the United States in 42 U.S.C. § 3601”); United States v. Puerto Rico, 764 F. Supp. 220, 225 (D.P.R. 1991) (granting injunction and emphasizing “the public interest that all citizens have in seeing vigorous enforcement of civil rights legislation like the Fair Housing Act.”).21
Second, “[t]he public has an interest in assuring that public funds are appropriated and distributed pursuant to Congressional directives.” Population Inst., 797 F.2d at 1082. As Congress specifically directed that the Road Home funds be spent pursuant to federal fair housing and anti-discrimination standards, 2005 Act, 119 Stat. at 2780; 2006 Act, 120 Stat. at 472-73, “the public interest will be frustrated” if the LRA is permitted to “distribute the funds” in direct contravention of the civil rights standards “dictated by Congress.” Population Inst., 797 F.2d at 1082; see also Letter from Rep. Maxine Waters to HUD Secretary Shaun Donovan (Apr.
21 Likewise, outside the fair housing context, courts have found that the public interest favors granting injunctive relief in the face of a discriminatory formula promulgated by a state agency. See South Camden Citizens in Action v. N.J. Dep’t of Env. Prot., 145 F. Supp. 2d 446, 502 (D.N.J. 2001) (concluding the public interest favored plaintiff, in part because “requiring the [state agency] to comply with the EPA’s Title VI implementing regulations is inherently in the public interest, insofar as it ensures the protection of civil rights”).
41

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14, 2010) at 1-2 (Ex. gg) (stating that the Road Home program “appears to contravene the fair housing protections enshrined in federal law—protections that were explicitly mandated by Congress when it funded the Road Home program.”).
Finally, if the Court preserves the status quo and the Plaintiffs are able to obtain the temporary and preliminary relief they seek, nearly 9,500 homeowners in Orleans Parish will receive additional resources that will help them finish repairing their homes. See id. at 2 (stating that the Road Home Program’s “discrimination . . . poses a major obstacle to rebuilding the great city of New Orleans and enabling its people to return home,” and that many African American families “impacted by this discriminatory policy . . . still face insurmountable barriers to rebuilding.”). Undoubtedly, completing these rebuilding efforts, especially in predominantly African American neighborhoods, will improve the lives of residents, homeowners, and communities in New Orleans in so many tangible and intangible ways.22 As this Court has expressly recognized that rehabilitating communities is in the public interest, Brown, 654 F. Supp. at 1119 (noting that the argument that rehabilitating apartment complexes is in the public interest has “obvious merit”), surely the same logic applies to rebuilding thousands of homes there were devastated by Hurricane Katrina.
In short, there is overwhelming legal authority and evidence that a preliminary injunction will further the public interest by remedying costly discrimination, ensuring that the nation’s largest federal housing program is administered according to the express fair housing mandates of Congress, and assisting thousands of homeowners to complete their repairs.

22

Relatedly, granting injunctive relief will provide an economic benefit to the New Orleans and

Louisiana governments, as such relief will make it possible for thousands of displaced residents to receive

additional assistance and properly repair their homes, which will translate into higher property values.

Higher property values, of course, will translate to higher property tax collections for the city and state

governments. Moreover, all homeowners in the City of New Orleans will benefit from the rising property

values.

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CONCLUSION For the foregoing reasons, pending this Court’s consideration of Plaintiffs’ claims on the merits, the Court should temporarily restrain and, if necessary, preliminarily enjoin the LRA from taking any action to obligate any funds that remain available in the Road Home Homeowner Assistance program, and also enjoin the LRA from taking any action to request that HUD further obligate, award or disburse Road Home funds in its custody.

Dated: June 2, 2010.

Respectfully submitted,

/s/ John Payton John Payton, Director-Counsel (D.C. Bar No. 282699) Damon T. Hewitt Renika C. Moore NAACP LEGAL DEFENSE & EDUCATIONAL FUND, INC. 99 Hudson Street, 16th Floor New York, NY 10013 (p) 212-965-2200 / (fax) 212-226-7592 jpayton@naacpldf.org
/s/ Danielle Conley WILMERHALE 1875 Pennsylvania Avenue, NW Washington DC 20006 +1 202 663 6006 (t) +1 202 663 6363 (f) Craig Goldblatt (D.C. Bar No. 449229) Danielle Conley (D.C. Bar No. 503345) danielle.conley@wilmerhale.com

/s/ Joseph M. Sellers Joseph M. Sellers (D.C. Bar No. 318410) Jenny R. Yang (D.C. Bar No. 484874) Llezlie Green Coleman (D.C. Bar No. 484051) Peter Romer-Friedman (D.C. Bar No. 993376) COHEN MILSTEIN SELLERS & TOLL PLLC 1100 New York Avenue, NW, Suite 500 Washington, D.C. 20005 (p) 202-408-4600 / (fax) 202-408-4699 jsellers@cohenmilstein.com

Attorneys for Plaintiffs 43

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CERTIFICATE OF SERVICE I hereby certify that on June 2, 2010, the foregoing document was filed electronically with the Court’s ECF system, through which a copy was served on:

Allen J. Krouse, III Renee G. Culotta Suzanne M. Risey FRILOT L.L.C. 1100 Poydras Street Suite 3600 New Orleans, LA 70163 Telephone: 504-599-8004 Facsimile: 504-599-8104 Email: akrouse@frilot.com Email: rculotta@frilot.com Email: srisey@frilot.com
Attorneys for Defendant Executive Director of the Louisiana Recovery Authority

James D. Todd U.S. DEPARTMENT OF JUSTICE 20 Massachusetts Avenue, N.W. Washington, DC 20001 Telephone: 202-514-3378 Facsimile: 202- 616-8470 Email: james.todd@usdoj.gov
Attorney for Defendant United States Dept. of Housing and Urban Development

 
 Case 1:08-cv-01938-HHK Document 59 Filed 06/29/10 Page 1 of 1

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, et al.
Plaintiffs,
v.
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
and
ROBIN KEEGAN, Executive Director of the Louisiana Recovery Authority,
Defendants.

Civil Action 08-01938 (HHK)

ORDER Before the Court is plaintiffs’ Motion for a Temporary Restraining Order and Preliminary Injunction, filed on June 2, 2010 [#50]. The parties have filed extensive briefing on this motion and appeared before the Court for lengthy oral argument as to the issues it raises on June 25, 2010. Upon consideration of the motion, the opposition thereto, the parties’ arguments at the June 25 hearing, and the record of this case, the Court concludes that the motion should be denied. Accordingly, it is this 29th day of June 2010, hereby ORDERED that plaintiffs’ motion for a temporary restraining order and a preliminary injunction [#50] is DENIED. A memorandum opinion setting forth the Court’s rationale will be forthcoming as soon as the business of the Court permits.

Henry H. Kennedy, Jr. United States District Judge

 
 Case 1:08-cv-01938-HHK Document 61 Filed 07/06/10 Page 1 of 17

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, et al.
Plaintiffs,
v.
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
and
ROBIN KEEGAN, Executive Director of the Louisiana Recovery Authority,
Defendants.

Civil Action 08-01938 (HHK)

MEMORANDUM OPINION Greater New Orleans Fair Housing Action Center, the National Fair Housing Alliance, and five individuals who own homes in New Orleans (collectively “plaintiffs”)1 bring this action against Robin Keegan, in her official capacity as Executive Director of the Louisiana Recovery Authority (“LRA”), and the U.S. Department of Housing and Urban Development (“HUD”), asserting that defendants have violated the Fair Housing Act (“FHA”), 42 U.S.C. § 3601 et seq.2 This case arises from the alleged racially discriminatory effect of a formula used to distribute

1

Plaintiffs intend to represent a class of individual homeowners but, in accordance

with a deadline set in an order proposed by the parties and entered by the Court on February 9,

2009, they have not yet filed for class certification.

2

Plaintiffs’ complaint also includes a claim under the Housing and Community

Development Act, 42 U.S.C. § 5301 et seq. In the briefing currently before the Court, plaintiffs

focus only on their FHA claim, so this memorandum opinion similarly does not discuss this

second claim.

Case 1:08-cv-01938-HHK Document 61 Filed 07/06/10 Page 2 of 17
grants as part of the Road Home Homeowner Assistance Program (“Road Home Program” or “Program”), a housing redevelopment initiative designed to help homeowners affected by Hurricanes Katrina and Rita. Plaintiffs seek an injunction requiring recalculation of Program awards to homeowners in New Orleans using a formula that does not have a disparate impact on African Americans.
On June 29, 2010, the Court issued an order that denied plaintiffs’ motion for a temporary restraining order and a preliminary injunction [#50] which sought to enjoin Keegan from spending surplus funds that remain available to the Road Home Program, or seeking any additional Program funds from HUD, while this case is pending. This opinion explains the reasoning on which that order was based.
I. BACKGROUND In 2005, Hurricanes Katrina and Rita caused catastrophic damage to New Orleans, Louisiana, and other nearby places. 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 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); 121 Stat. at 1343-44 (appropriating $3 billion for supplemental grants to Louisiana).
2

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Louisiana designated approximately $11 billion of those funds for the Road Home Program. The LRA, in consultation with HUD, developed the 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.3 Each beneficiary of an Option 1 grant receives an award in the amount of either the value of her home before the storms or the cost of repairing her home, whichever is less, but not in excess of $150,000. Since plaintiffs initiated their suit, the LRA has created Additional Compensation Grants (“ACGs”), supplemental awards available to Option 1 beneficiaries whose incomes are at or below eighty percent of the median in their areas. Regardless of the pre-storm values of their homes, these individuals may receive ACGs such that their total awards from the Road Home Program reach the cost of repairs to their homes, still subject to the $150,000 cap.
Since the Road Home Program’s inception, the LRA has distributed Option 1 awards to tens of thousands of homeowners. As of the time of the briefing regarding plaintiffs’ current motion, only 179 individuals who applied for Option 1 grants had yet to receive their awards. The LRA has money set aside to fund grants for those individuals, to continue to distribute ACGs to eligible individuals, and for other projects within the Road Home Program. The LRA is currently seeking approval to use much of the Program money not yet designated to a specific use for “Action Plan Amendment 43,” a construction lending program designed to assist Road Home

3

The Program also permits homeowners to instead opt to receive smaller grants to

obtain housing elsewhere in Louisiana or outside the state. The design and implementation of

those aspects of the Program are not at issue here.

3

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Program beneficiaries who have not been able to complete repairs to their homes. Keegan estimates that she has $554.5 million remaining in the Program budget.
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 2005.4 Each applied for a Road Home Program grant under Option 1, and each received an award based on the pre-storm value of her or his home rather than the cost of repairing that home.5 Since receiving their initial grants, Burns and Jones have been deemed eligible to receive ACGs such that their total awards will amount to $150,000.
In their complaint, plaintiffs allege that the LRA’s reliance on home values in calculating 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

4

The other plaintiffs, Greater New Orleans Fair Housing Action Center, a non-

profit organization based in Louisiana, and the National Fair Housing Alliance, a non-profit

organization based in Washington, D.C., are advocacy groups that, inter alia, oppose housing

discrimination.

5

According to the complaint, Burns received $106,500, which was $89,000 less

than the cost of damage to her home and $43,500 less than the maximum she could have

received; Dents received $88,534, which was $58,730 less than the cost of damage to her home;

Ford received $3,468, which was $156,073 less than the cost of damage to her home and

$146,532 less than the maximum she could have received; Jones received $61,000, which was

$45,262 less than the cost of damage to her home; and Randolph received $16,650, which was

$173,193 less than the cost of damage to his home and $133,350 less than the maximum he could

have received. Compl. ¶¶ 61-65. Some of the awards are in amounts less than the pre-storm

value of the home because the LRA deducts from each grant any amount of money the

homeowner has received as compensation for storm damage from her insurance company or

another source, such as the Federal Emergency Management Agency.

4

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homes with lower values,” African-American recipients of Road Home Program grants are more likely than white recipients to receive only the amount of the pre-storm value of their homes and, consequently, to have a larger gap than white recipients between the amount of the grant and the cost of rebuilding. Compl. ¶¶ 54-57. This effect, plaintiffs assert, constitutes a violation of the Fair Housing Act.6 Ultimately, 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.
At this time, plaintiffs seek a preliminary injunction enjoining Keegan from spending any surplus funds—that is, Program funds not already designated for the remaining 179 Option 1 awards, ACGs, or any other specific use—until the merits of their case are resolved. They make this request because Keegan will only be able to distribute recalculated awards, should plaintiffs prevail on the merits, if sufficient Road Home Program funds remain available for that purpose.
Plaintiffs’ motion for a preliminary injunction is accompanied by evidence they allege supports their allegation that the Option 1 formula has a discriminatory effect. Specifically, they point to statistics from the U.S. Census showing that in New Orleans, homes owned by African Americans have lower values, on average, than homes owned by whites. Pls.’ Mot. for TRO, Ex. P. They attached to their motion a study by PolicyLink, “a national independent research

6

Specifically, Count I of the 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 and conditions of, real estate-related

transactions in violation of” section 3605(a) of the FHA; and (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.

5

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organization,” which concludes that on average, African-American applicants to the Road Home Program received funds in amounts further below the costs to rebuild their homes than white applicants. Id. at 11-12; id., Ex. S. They also assert that Paul Rainwater, Keegan’s predecessor at the LRA, told a subcommittee of the U.S. House of Representatives that home values in African-American neighborhoods tend to be lower than in white neighborhoods and that he was “sure” that African-American homeowners were more likely than whites to receive awards based on the value of their homes than the cost of repairs. Id. at 15-16; id., Ex. N at 23-24. Finally, they attach to their motion the declaration of Carol Johnson, president of a Louisiana mortgage company, who asserts she has expertise in the mortgage industry and that she has “observed that because of the formula employed, Road Home Program grant calculations result in homeowners in predominantly African American areas received lower grant awards than homeowners in predominantly White areas.” Id., Ex. T ¶ 7.7
II. ANALYSIS This court may issue a preliminary injunction only when the movant demonstrates: (1) “a substantial likelihood of success on the merits”; (2) “that it would suffer irreparable injury if the injunction is not granted”; (3) “that an injunction would not substantially injure other interested parties”; and (4) “that the public interest would be furthered by the injunction.” Mova Pharm. Corp. v. Shalala, 140 F.3d 1060, 1066 (D.C. Cir. 1998) (quoting CityFed Fin. Corp. v. Office of

7

Keegan has moved to strike this declaration because Johnson is “not an expert

economist or statistician.” Keegan Opp’n to Pls.’ Mot. for TRO (“Keegan Opp’n”) at 29 n.20.

Plaintiffs oppose this motion, arguing that Johnson has relevant expertise regarding home values

in New Orleans. The parties have made these arguments in less detail than is necessary for the

Court to rule on the motion. Furthermore, the Court’s ruling on plaintiffs’ motion does not

depend on whether it considers this evidence.

6

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Thrift Supervision, 58 F.3d 738, 746 (D.C. Cir. 1995)). “These factors interrelate on a sliding scale and must be balanced against each other.” Serono Labs., Inc. v. Shalala, 158 F.3d 1313, 1318 (D.C. Cir. 1998). Because preliminary injunctions are “extraordinary and drastic” forms of judicial relief, district courts should not grant them “unless the movant, by a clear showing, carries the burden of persuasion.” Mazurek v. Armstrong, 520 U.S. 968, 972 (1997) (quoting 11A C. WRIGHT, A. MILLER, & M. KANE, FEDERAL PRACTICE AND PROCEDURE § 2948, pp. 129-130 (2d ed.1995)) (emphasis in Mazurek). A. Plaintiffs Have Not Shown a Likelihood of Success on the Merits.
1. Plaintiffs have demonstrated that they could likely make out a prima facie case of discrimination in violation of the Fair Housing Act.
For the reasons explained below, the Court concludes that it may not provide the ultimate relief plaintiffs seek and therefore should not grant the preliminary relief they currently request. But the Court notes first that plaintiffs’ disparate impact claim under the Fair Housing Act appears to have merit. Although full analysis of the issues raised here is unnecessary, the Court feels compelled nevertheless to briefly explain its reasoning.
Although the D.C. Circuit did not determine in 2922 Sherman Avenue Tenants’ Association v. District of Columbia, 444 F.3d 673 (D.C. Cir. 2006), which of two possible standards courts in this Circuit are to apply in assessing disparate impact claims under the FHA, see id. at 680, the Court believes that the appropriate approach is the burden-shifting framework adopted by several other Circuits. Under this framework, “once the plaintiff demonstrates that the challenged practice has a disproportionate impact, the burden shifts to the defendant to ‘prove that its actions furthered, in theory and in practice, a legitimate, bona fide governmental interest
7

Case 1:08-cv-01938-HHK Document 61 Filed 07/06/10 Page 8 of 17
and that no alternative would serve that interest with less discriminatory effect.’” Id. (quoting Huntington Branch, NAACP v. Town of Huntington, 844 F.2d 926, 935-36 (2d Cir. 1988)).
Plaintiffs have demonstrated that they would likely be able to make out this prima facie case after discovery. The statistical and anecdotal evidence they submit to the Court leads to a strong inference that, on average, African-American homeowners received awards that fell farther short of the cost of repairing their homes than did white recipients. Keegan’s attacks on that evidence are unpersuasive. Plaintiffs need not make a showing at this stage of the proceedings, before discovery and when briefing is necessarily rushed, sufficient to prove the merits of their case. Keegan neither demonstrates that plaintiffs’ statistics or logic is flawed nor provides data about the administration of the Program that would show what effect the Option 1 formula has had. Cf. Berger v. Iron Workers Reinforced Rodmen Local 201, 843 F.2d 1395, 1412 (D.C. Cir. 1988) (“Defendants may also attempt to undermine plaintiffs’ prima facie case by attacking the validity of plaintiffs’ statistical evidence, or by introducing statistical evidence of their own showing that the challenged practice did not have racially disproportionate results.” (citation omitted)). She has also offered no legitimate reason for taking pre-storm home values into account in calculating Program awards. The Court does not take lightly that some AfricanAmerican homeowners received lower awards than they would have if their homes were in predominantly white neighborhoods. And, although the Court appreciates that all of the parties are committed to the rebuilding of a city that has suffered greatly, it is regrettable that this effort to do so appears to have proceeded in a manner that disadvantaged African-American homeowners who wish to repair their homes.
8

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2. Plaintiffs cannot prevail on the merits because this Court does not have the authority to grant the ultimate relief they seek.
Keegan argues that regardless of the merit of plaintiffs’ discrimination claim, the Court lacks subject matter jurisdiction over this case because the Eleventh Amendment to the U.S. Constitution bars the Court from providing the relief plaintiffs seek. Her primary argument8 is based on a legal premise the Court explained in some detail in a Clarification [#52] to an order it entered regarding a motion to dismiss Keegan filed before plaintiffs submitted their motion. For clarity, the Court again describes the legal background before addressing plaintiffs’ response.
The Eleventh Amendment bars suits against states absent the relevant state’s consent to be sued. See Papasan v. Allain, 478 U.S. 265, 276 (1986).9 But in Ex parte Young, 209 U.S. 123 (1908), the Supreme Court held that “[a] federal court is not barred by the Eleventh Amendment from enjoining state officers from acting unconstitutionally, either because their action is alleged to violate the Constitution directly or because it is contrary to a federal statute or regulation that is the supreme law of the land.” Vann v. Kempthorne, 534 F.3d 741, 749 (D.C. Cir. 2008) (quoting CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 4232

8

Keegan also argues that Eleventh Amendment immunity bars this action because

the LRA, and therefore the State of Louisiana, “not Keegan, is the real party in interest in this

suit.” Keegan Opp’n at 13. But the Ex parte Young exception to sovereign immunity permits

suits against state officers by relying on “the fiction that the suit [goes] against the officer and not

the State,” Vann v. Kempthorne, 534 F.3d 741, 749 (D.C. Cir. 2008) (citing Pennhurst State Sch.

& Hosp. v. Halderman, 465 U.S. 89, 114 n.25 (1984)), and the Court disagrees with Keegan’s

contention that this fiction does not operate here.

9

The Eleventh Amendment provides that “[t]he Judicial power of the United States

shall not be construed to extend to any suit in law or equity, commenced or prosecuted against

one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign

State.” U.S. CONST. amend. XI. The Supreme Court “long ago held that the Amendment bars

suits against a State by citizens of that same State as well.” Papasan, 478 U.S. at 276 (citing

Hans v. Louisiana, 134 U.S. 1 (1890)).

9

Case 1:08-cv-01938-HHK Document 61 Filed 07/06/10 Page 10 of 17
(3d ed. 2007)). The Supreme Court has directed that “[i]n 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.’” Verizon Md. Inc. v. Public Serv. Comm’n, 535 U.S. 635, 645 (2002) (quoting Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261, 296 (1997) (O’Connor, J., concurring)). In this context, the distinction between retroactive and prospective relief is significant because the Eleventh Amendment bars “a suit by private parties seeking to impose a liability which must be paid from public funds in the state treasury.” Edelman v. Jordan, 415 U.S. 651, 663 (1974) (citations omitted); see also Verizon Md. Inc., 535 U.S. at 645 (making clear that relief that “impose[s] upon the State ‘a monetary loss resulting from a past breach of a legal duty on the part of the defendant state officials’” is not permissible (quoting Edelman, 415 U.S. at 668) (emphasis removed)). In other words, this Court cannot order the payment of damages to correct a prior unlawful act by a state official. See Edelman, 415 U.S. at 663 (holding that a federal court may not issue an order that requires a state to spend money that “should have been paid, but was not”).
Based on these principles of law, the Court suggested in its Clarification, and now holds, that it may not grant plaintiffs’ request for an order mandating that LRA make payments to Road Home Program beneficiaries who have already received funds in amounts calculated using an allegedly discriminatory formula. An order requiring Keegan to correct Road Home Program payments that have already been made would not provide prospective relief; it would require payment of state funds rather than prohibit certain actions in the future. Plaintiffs do not dispute the Court’s reliance on these fundamental principles, but they contest the Court’s understanding
10

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of the facts underlying this case and, therefore, its application of those principles to the situation at hand. The Court cannot agree with their arguments.
a. The relief plaintiffs seek would require the expenditure of state, not federal, funds.
First, plaintiffs argue that the Court may enter the injunction they seek because such an order would require the expenditure of federal funds, not state funds. To demonstrate that this distinction is legally significant, plaintiffs rely primarily on Edelman v. Jordan, 415 U.S. 651 (1974), quoting the many instances in that opinion in which the Supreme Court discussed the significance for an Eleventh Amendment analysis of requiring the payment of “state funds,” and they repeat language from other cases relying on Edelman for the proposition that it is impermissible for a federal court to impose a liability to be paid from the “state treasury.” Pls.’ Resp. to Clarification at 8-9.10 They assert that because the LRA spends money that comes directly from HUD at Congress’s direction, the funds they wish the Court to order Keegan to use to correct award amounts do not belong to the state.
The Court does not find that the funds the LRA spends are federal. It simply cannot be said that an injunction preventing a state official from disbursing money according to a program administered by her state agency controls only the flow of federal funds. Furthermore, a careful reading of Edelman reveals that the Supreme Court has made no distinction between money that comes to a state account from the federal government as opposed to from some other source. In
10 Plaintiffs note in their reply to Keegan’s opposition to their motion that Keegan has failed to address this point and argue Keegan has therefore conceded it. The parties have each made a multitude of arguments in addressing the various complicated issues raised in this case, and neither has directly addressed each point made by the other. The Court will not assume that any arguments are conceded.
11

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Edelman, the plaintiffs had successfully demonstrated that Illinois’s administration of a welfare program, which was “funded by the State and the Federal Governments” and administered by state agencies, the directors of which were the named defendants, violated certain federal regulations. Edelman, 415 U.S. at 653-56. The opinion held that the district court had properly enjoined the state officers from continuing to administer the program in a manner that violated those regulations but had improperly ordered that individuals who received less than they were owed because of past violations be compensated. Id. at 664-65. The Supreme Court referred throughout to state funds and the state treasury, generating the quotes to which plaintiffs have pointed, but nowhere did it distinguish funds that the federal government gave to the state for the welfare program from those the state contributed from its own resources. In other words, the opinion did not address the issue plaintiffs have raised and does not support plaintiffs’ arguments; the best inference to draw is that the Supreme Court considered federal money given to the state for administration of the relevant program to be state funds.11 For purposes of this analysis, the money the LRA uses to make awards to Road Home Program beneficiaries are properly considered state funds.
11 None of the other cases plaintiffs cite contribute to an analysis of this issue. See Verizon Md. Inc., 535 U.S. at 646 (distinguishing between an injunction that would require payment from a state treasury and one that imposed a financial liability on private parties); Quern v. Jordan, 440 U.S. 332, 337 (1979) (repeating language from Edelman but addressing only the question of whether ordering that a particular notice be sent to individuals who might have claims against Illinois constitutes retroactive relief); Fla. Dep’t of State v. Treasure Salvors, Inc., 458 U.S. 670, 689-90 (1982) (reciting language from Edelman but addressing the propriety of a suit against Florida based on the discovery of a sunken ship); Travelers Indem. Co. v. Sch. Bd. of Dade County, Fla., 666 F.2d 505, 509 (11th Cir. 1982) (reciting language from Edelman but addressing whether the Florida board of education has Eleventh Amendment immunity under certain circumstances not analogous to those here).
12

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b. An injunction requiring the correction of Option 1 awards would impermissibly provide retroactive relief.
Second, plaintiffs argue that the relief they seek is prospective because the Road Home Program is “continuing and open,” Pls.’ Resp. to Clarification at 11, and they therefore request “an end to [] present violation[s] of federal law,” id. (quoting Papasan v. Allain, 478 U.S. 265, 278 (1986)) (alterations and emphasis in brief). They argue that in contrast to Edelman, in which the defendant state officers had failed to pay benefits that correlated to discrete past time periods, the Road Home Program “has an ever-changing current balance sheet for an incomplete program.” Id. Keegan asserts that correction of Road Home Program awards previously disbursed would constitute retroactive relief.
The fundamental premise here, explained above, is not in dispute: Relief that in essence serves to compensate a party injured in the past by an action of a state official in his official capacity that was illegal under federal law is barred even when the state official is the named defendant. . . . On the other hand, relief that serves directly to bring an end to a present violation of federal law is not barred by the Eleventh Amendment even though accompanied by a substantial ancillary effect on the state treasury. Papasan, 478 U.S. at 278 (citations omitted). The Supreme Court has acknowledged that “the line between permitted and prohibited suits will often be indistinct,” id., but here, the outcome is unavoidable. Plaintiffs’ characterization of the Road Home Program as ongoing does not persuade the Court that an injunction requiring the recalculation of Option 1 awards would constitute prospective relief. It is true that the Road Home Program as a whole is not complete. But all but
13

Case 1:08-cv-01938-HHK Document 61 Filed 07/06/10 Page 14 of 17
179 Option 1 grants have been distributed.12 It is also true that some Road Home Program recipients have received funds in addition to their initial awards under Option 1. But those supplemental grants were not based on any change to the formula for, nor did they constitute a recalculation of, Option 1 awards. The allegedly discriminatory award amounts have, as to almost all applicants, already been calculated and disbursed. Correcting them, even by entry of an injunction, would effectively constitute an award of damages. Cf. Papasan, 478 U.S. at 279 (advising that “[i]n discerning on which side of the line [between prospective and retroactive relief] a particular case falls,” a court is to “look to the substance rather than to the form of the relief sought”). As was the case in Edelman, the program at issue here distributes discrete awards; it does not provide any ongoing service such that a “present violation” of law can be said to exist. Id. at 278; cf. Milliken v. Bradley, 433 U.S. 267, 289 (1977) (holding that a courtordered program to remedy inequalities resulting from school segregation “fits squarely within the prospective-compliance exception reaffirmed by Edelman” because it “enjoin[s] state officials to conform their conduct to requirements of federal law” in the future operation of schools).
Were the Court to order, as plaintiffs request, that Keegan recalculate awards that have already been distributed and make supplemental payments to homeowners whose awards would have been greater had they not been based on home values, it would impermissibly be requiring the state to disburse money that “should have been paid, but was not.” Edelman, 415 U.S. at
12 The Court asked plaintiffs during oral argument on this motion whether they would wish to go forward with their request for a preliminary injunction if the Court were to hold that the ultimate relief they seek is only available to those 179 individuals. Plaintiffs did not express a desire to limit their case to such a narrow group of Road Home Program beneficiaries.
14

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664. It would impermissibly be doing more than “enjoining state officers from acting unconstitutionally.” Vann, 534 F.3d at 749. Although, as explained, the Court suspects that the Option 1 formula did violate the Fair Housing Act, this Court has no authority to remedy it in the way plaintiffs ask. Accordingly, the Court cannot find that plaintiffs are likely to succeed on the merits of their case.
2. Plaintiffs have not shown that they will face irreparable injury absent the entry of an injunction.
Plaintiffs argue that without an injunction, the LRA will be able to spend any or all Road Home Program funds and an insufficient amount of money would remain available to provide the ultimate relief they seek. This reasoning relies on, among other assumptions, the premise that the LRA must hold approximately $516 million in order to comply with a future order from this Court mandating the correction of the disparate impact of the Option 1 formula. Keegan responds that the LRA has sufficient funds to comply with an order from this Court enjoining her from using the existing Option 1 formula in calculating the awards owed to the 179 remaining Option 1 applicants.
As explained above, the Court may not order the relief plaintiffs seek. There is no risk, therefore, that any spending by the LRA will cause the irreparable harm plaintiffs foresee.13
3. The injury to third parties that would result from the preliminary injunction plaintiffs seek weighs strongly against granting plaintiffs’ motion.
Plaintiffs argue that other parties would not be harmed by the entry of the preliminary injunction they seek. They note that non-class members whose Road Home Program benefits
13 As noted, plaintiffs’ counsel have declined to indicate that they wish to represent the 179 applicants who have not yet received awards.
15

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might be delayed by such an injunction would benefit overall if the LRA is ultimately made to calculate future awards considering only the cost of repairs.
The Court will not find that third parties would not be harmed by the entry of an injunction of the sort plaintiffs seek. Even though the preliminary injunction plaintiffs seek would permit Keegan to disburse some Road Home Program funds, it would restrict her spending significantly. Each dollar the Court enjoined her from spending would be a dollar withheld from a Louisiana resident who wants to repair or rebuild her home and who has been unable to do so in the five years since the storm damaged it. The Court notes that plaintiffs could have initiated this case and sought preliminary relief long ago, before the Road Home Program was almost complete and the funds almost depleted. And the Court will not ignore the fact that the delay a preliminary injunction would cause is significant; discovery and a resolution on the merits of this case could, and likely would, take years.
4. The public interest in an injunction does not weigh in favor of either party. Plaintiffs argue that it is in the public interest to remedy housing discrimination. Keegan argues that the public interest would not be served by delaying the distribution of funds under the Road Home Program and that Louisiana citizens “continue to need and rely upon funding from the Road Home” Program. Keegan Opp’n to Pls.’ Mot. for TRO at 35. Because both parties’ positions have merit, the Court finds that this factor does not weigh in favor of either party. Plaintiffs are correct that there is a strong public interest in preventing discrimination on the basis of race, and the Court takes seriously Congress’s intent to do so by enacting the Fair Housing Act. But Keegan is correct that there is a strong public interest in going forward with a program designed to repair a devastated area. As noted above, a
16

Case 1:08-cv-01938-HHK Document 61 Filed 07/06/10 Page 17 of 17
preliminary injunction would cause significant delay in the distribution of Program funds to people who have suffered long enough.
5. Conclusion The Court must balance these four factors against each other. Serono Labs., Inc. v. Shalala, 158 F.3d 1313, 1318 (D.C. Cir. 1998). In sum, the Court has found that plaintiffs’ Fair Housing Act claim likely has merit but that plaintiffs do not have a strong likelihood of success in this action because the Court cannot grant the relief they seek. Furthermore, delaying the administration of the Road Home Program would be harmful to Louisiana homeowners who still need assistance. Although the Court is not unsympathetic to the ways in which the law operates in this instance to preclude the possibility of correcting what may well be a discriminatory formula, it is bound to apply the law as it stands and it must consider the effect its ruling here could have on individuals who are not represented. For these reasons, the Court will not grant the preliminary injunction plaintiff seek.
III. CONCLUSION For the foregoing reasons, on June 29, 2010, the Court entered an order denying plaintiffs’ motion for a preliminary injunction [#50].
Henry H. Kennedy, Jr. United States District Judge
17

 
 Case 1:08-cv-01938-HHK Document 62 Filed 07/21/10 Page 1 of 4

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, et al.,

Plaintiffs,

v.

No. 1:08-cv-1938-HHK

UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, et al.,

Defendants.

PLAINTIFFS’ SECOND MOTION FOR A TEMPORARY RESTRAINING ORDER AND A PRELIMINARY INJUNCTION Plaintiffs Greater New Orleans Fair Housing Action Center, et al., respectfully file this Second Motion for a Temporary Restraining Order and a Preliminary Injunction against Defendant Robin Keegan – the former Executive Director of the Louisiana Recovery Authority (“LRA”) and current Executive Director of the LRA’s successor agency, the Louisiana Office of Community Development (“OCD”). Plaintiffs seek relief on behalf of the subset of Plaintiffs who have not yet received their initial grant awards under the Road Home Program and who are in imminent danger of receiving initial grant awards based upon a formula that this Court concluded “may well be a discriminatory.” Dkt. No. 61, at 17. Specifically, Plaintiffs seek an immediate temporary restraining order and a preliminary injunction enjoining Keegan from using a formula that takes into account pre-storm home values (which this Court has already found is likely a discriminatory criterion) to calculate and disburse any future grants until the case is adjudicated on the merits. As of the date of this filing, Keegan has refused to alter the formula for

Case 1:08-cv-01938-HHK Document 62 Filed 07/21/10 Page 2 of 4

calculating and disbursing future grant awards. At any point, Keegan may (as she has in the past) use the discriminatory formula to calculate and disburse initial grant awards to Plaintiffs who have yet to have their first closings under the Road Home Program. By virtue of the Court’s prior rulings in this case, such action may forever preclude Plaintiffs from obtaining recalculated awards.
For the reasons stated above and in Plaintiffs’ attached memorandum, they satisfy all of the requirements for this Court to issue temporary and preliminary injunctive relief. Without a temporary and preliminary injunction, Plaintiffs will suffer irreparable harm by forever losing their opportunity to obtain equitable relief for violations of federal anti-discrimination laws.
Plaintiffs respectfully request the Court to enter immediately the proposed order granting their request for temporary injunctive relief to preserve the status quo, and to schedule a hearing on Plaintiffs’ Motion for a Preliminary Injunction at the earliest possible date convenient to the Court and the parties. As Keegan may take action at any time to calculate and disburse initial grant awards by using a discriminatory formula, it is necessary for a temporary restraining order to be in place until the Court is able to rule on Plaintiffs’ Motion for a Preliminary Injunction.

Dated: July 21, 2010

Respectfully submitted,

/s/ Damon T. Hewitt John Payton, Director-Counsel (D.C. Bar No. 282699) Damon T. Hewitt ReNika C. Moore NAACP LEGAL DEFENSE & EDUCATIONAL FUND, INC. 99 Hudson Street, 16th Floor New York, NY 10013 (p) 212-965-2200 / (fax) 212-226-7592 rmoore@naacpldf.org

/s/ Joseph M. Sellers Joseph M. Sellers (D.C. Bar No. 318410) Jenny R. Yang (D.C. Bar No. 484874) Peter Romer-Friedman (D.C. Bar No. 993376) COHEN MILSTEIN SELLERS & TOLL PLLC 1100 New York Avenue, NW, Suite 500 Washington, D.C. 20005 (p) 202-408-4600 / (fax) 202-408-4699 jsellers@cohenmilstein.com
2

Case 1:08-cv-01938-HHK Document 62 Filed 07/21/10 Page 3 of 4

/s/ Danielle Conley Craig Goldblatt (D.C. Bar No. 449229) Danielle Conley (D.C. Bar No. 503345) WILMER HALE 1875 Pennsylvania Avenue, NW Washington DC 20006 (p) 202-663-6006/ (fax) 202-663-6363 danielle.conley@wilmerhale.com

/s/ Morgan Whitney Williams Morgan Whitney Williams GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER 404 S. Jefferson Davis Pkwy. New Orleans, LA 70119 (o) 504-596-2100 ext. 104/ (fax) 504-708-2476 mwilliams@gnofairhousing.org

Attorneys for Plaintiffs

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Case 1:08-cv-01938-HHK Document 62 Filed 07/21/10 Page 4 of 4

CERTIFICATE OF SERVICE I hereby certify that on July 21, 2010, the foregoing document was filed electronically via the Court’s ECF system, through which a copy was served on:

Allen J. Krouse, III Renee G. Culotta Suzanne M. Risey FRILOT L.L.C. 1100 Poydras Street, Suite 3600 New Orleans, LA 70163 Telephone: 504-599-8004 Facsimile: 504-599-8104 Email: akrouse@frilot.com Email: rculotta@frilot.com Email: srisey@frilot.com
Attorneys for Defendant Robin Keegan

James D. Todd U.S. DEPARTMENT OF JUSTICE 20 Massachusetts Avenue, N.W. Washington, DC 20001 Telephone: 202-514-3378 Facsimile: 202- 616-8470 Email: james.todd@usdoj.gov
Attorney for Defendant United States Dept. of Housing and Urban Development

/s/ Damon T. Hewitt

Case 1:08-cv-01938-HHK Document 62-1 Filed 07/21/10 Page 1 of 29

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, et al.,

Plaintiffs,

v.

No. 1:08-cv-1938-HHK

UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, et al.,

Defendants.

MEMORANDUM IN SUPPORT OF PLAINTIFFS’ SECOND MOTION FOR A TEMPORARY RESTRAINING ORDER AND A PRELIMINARY INJUNCTION
Plaintiffs Greater New Orleans Fair Housing Action Center, et al., respectfully submit this memorandum of law in support of their Second Motion for a Temporary Restraining Order and a Preliminary Injunction against Defendant Robin Keegan – the former Executive Director of the Louisiana Recovery Authority (“LRA”) and current Executive Director of the LRA’s successor agency, the Louisiana Office of Community Development (“OCD”).

Case 1:08-cv-01938-HHK Document 62-1 Filed 07/21/10 Page 2 of 29
TABLE OF CONTENTS INTRODUCTION ...............................................................................................................1 PROCEDURAL BACKGROUND......................................................................................3 FACTUAL BACKGROUND..............................................................................................4
Source of funds.........................................................................................................5 Ongoing Discrimination ..........................................................................................6 STANDARD OF REVIEW .................................................................................................7 ARGUMENT .......................................................................................................................9 A. Plaintiffs Have a Substantial Likelihood of Success on the Merits. ..........10
1. The pre-storm value criterion violates the Fair Housing Act. ..........10 2. The proposed injunctive relief does not implicate sovereign
immunity concerns............................................................................12 B. Plaintiffs Will Be Irreparably Harmed If This Court Does Not Issue a
Temporary Restraining Order and a Preliminary Injunction. ....................15 C. A Preliminary Injunction Will Not Harm Defendants or Other
Interested Parties........................................................................................16 D. Granting the Proposed Injunctive Relief is in the Public Interest..............17 CONCLUSION..................................................................................................................21
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TABLE OF AUTHORITIES
2922 Sherman Avenue Tenants’ Ass’n v. Dist. of Columbia, 444 F.3d 680 (D.C. Cir. 2006) ...............................................................................10
Berger v. Iron Workers Reinforced Rodmen Local 201, 843 F.2d 1395 (D.C. Cir. 1988) .............................................................................11
Brown v. Artery Org., Inc., 654 F. Supp. 1106 (D.D.C. 1987) ....................................................................18, 19
Brown v. Artery Org., Inc., 691 F. Supp. 1459 (D.D.C. 1987) ..........................................................................18
Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290 (D.C. Cir. 2006) ...........................................................................7, 15
CityFed Fin. Corp. v. Office of Thrift Supervision, 58 F.3d 738 (D.C. Cir. 1995) ...............................................................................7, 8
Cook v. Billington, No. 82-0400, 1988 WL 35364 (D.D.C. Mar. 31, 1988)...............................................................18
Cousins v. Bray, 297 F. Supp. 2d 1027 (S.D. Ohio 2003) ..................................................................9
Davenport v. Int’l Bhd. of Teamsters, 166 F.3d 356 (D.C. Cir. 1999) .................................................................................7
Does I through III v. District of Columbia, 593 F. Supp. 2d 115 (D.D.C. 2009) .......................................................................12
Edelman v. Jordan, 415 U.S. 651 (1974)...............................................................................................13
Ex parte Young, 209 U.S. 123 (1908).................................................................................4, 9, 12, 14
Fraternal Order of Police Library of Cong. Labor Comm. v. Library of Cong., 639 F. Supp. 2d 20 (D.D.C. 2009) .....................................................................7, 15
Gresham v. Windrush Partners, Ltd., 730 F.2d 1417 (11th Cir. 1984), cert. denied, Windrush Partners Ltd. v. Metro Fair Hous. Servs, 469 U.S. 882 (1984) ........8, 16
iii

Case 1:08-cv-01938-HHK Document 62-1 Filed 07/21/10 Page 4 of 29
Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261 (1997)...............................................................................................13
Jasperson v. Fed. Bureau of Prisons, 460 F. Supp. 2d 76 (D.D.C. 2006) .....................................................................7, 16
Kimberlin v. Quinlan, 199 F.3d 496 (D.C. Cir. 1999) ...............................................................................12
LaShawn A. v. Barry, 87 F.3d 1389 (D.C. Cir. 1996) ...............................................................................12
Leitner v. United States, 679 F. Supp. 2d 37 (D.D.C. 2010) ...........................................................................8
Meyer v. Holley, 537 U.S. 280 (2003)...............................................................................................18
Mical Commc’ns, Inc. v. Sprint Telemedia, Inc., 1 F.3d 1031 (10th Cir. 1993) ...................................................................................8
Milliken v. Bradley, 433 U.S. 267 (1977)...............................................................................................14
Papasan v. Allain, 478 U.S. 265 (1986)...............................................................................................12
Population Inst. V. McPherson, 797 F.2d 1062 (D.C. Cir. 1986) .............................................................................19
Price v. Pelka, 690 F.2d 98 (6th Cir. 1982) ...................................................................................18
Remed Recovery Care Centers v. Township of Willistown, 36 F. Supp. 2d 676 (E.D. Pa. 1999) .........................................................................9
Rogers v. Windmill Pointe Village Club Ass'n, Inc., 967 F.2d 525 (11th Cir. 1992) .................................................................................8
Silver Sage Partners, Ltd. v. City of Desert Hot Springs, 251 F.3d 814 (9th Cir. 2001) ...................................................................................8
South Camden Citizens in Action v. N.J. Dep’t of Env. Prot., 145 F. Supp. 2d 446 (D.N.J. 2001) ........................................................................19
iv

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Stewart B. McKinney Found., Inc. v. Town Plan & Zoning Comm’n of Fairfield, 790 F. Supp. 1197 (D. Conn. 1992).........................................................................9
Trafficante v. Metro. Life Ins. Co., 409 U.S. 205 (1972)...............................................................................................18
United States v. Yonkers Bd. of Educ., 893 F.2d 498 (2d Cir. 1990)...................................................................................14
United States v. Edward Rose & Sons, 246 F. Supp. 2d 744 (E.D. Mich. 2003).................................................................19
United States v. Edward Rose & Sons, 384 F.3d 258 (6th Cir. 2004) .................................................................................18
United States v. Puerto Rico, 764 F. Supp. 220 (D.P.R. 1991).............................................................................19
Vann v. Kempthorne, 534 F.3d 741 (D.C. Cir. 2008) ...............................................................................12
Verizon Md. Inc. v. Public Serv. Comm’n, 535 U.S. 635 (2002).........................................................................................13, 14
Winter v. Nat. Res. Def. Council, Inc., 129 S. Ct. 365 (2008)...............................................................................................8
Washington Metro Area Transit Comm’n v. Holiday Tours, 559 F.2d 841 (D.C. Cir. 1977) .................................................................................8
Statutes
42 U.S.C. § 3601..........................................................................................................18
42 U.S.C. § 3604............................................................................................................1
42 U.S.C. § 3605............................................................................................................1
42 U.S.C. § 3608............................................................................................................1
42 U.S.C. § 5304............................................................................................................1
Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006, Pub. L. No. 109-148, 119 Stat. 2680 (Dec. 30, 2005) ..............................................5, 19
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Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006, Pub. L. No. 109-234, 120 Stat. 418 (June 15, 2006)..................................................... 5, 19
Department of Defense Appropriations Act, 2008, Pub. L. No. 110-116, 121 Stat. 1295 (Nov. 13, 2007) ........................................................ 5
71 Fed. Reg. 7,666 (Feb. 13, 2006) ...............................................................................6 71 Fed. Reg. 63,337 (Oct. 30, 2006)..............................................................................6 72 Fed. Reg. 70,472 (Dec. 11, 2007) .............................................................................6
Other Authorities 13 James Wm. Moore, et al., Moore’s Federal Practice § 65.22[3]
(3d ed. 2009) ..........................................................................................................18 11A Wright, Miller and Kane, Federal Practice and Procedure § 2948.1
(2d ed. 1995) ..........................................................................................................15 Charles Alan Wright et al., Federal Practice and Procedure § 4232
(3d ed. 2007) ..........................................................................................................12
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INTRODUCTION This lawsuit challenges racial discrimination in the design and operation of the Road Home Program, an $11 billion recovery program designed to help homeowners affected by Hurricanes Katrina and Rita – the single largest housing recovery program in United States history. Defendants Keegan and the U.S. Department of Housing and Urban Development (“HUD”) are in violation of Title VIII of the Civil Rights Act of 1968, 42 U.S.C. §§ 3604, 3605, and 3608 (the “Fair Housing Act” or “Title VIII”),1 and the Housing and Community Development Act of 1974, 42 U.S.C. § 5304 (the “HCDA”), by developing and implementing a grant formula that has a disparate impact on African American homeowners in New Orleans.2 The formula adversely affects African-American homeowners, as it ties rebuilding grants to prestorm home values, which are much lower in predominantly African-American communities than predominantly white communities, leaving African-American families with more frequent and larger gaps between their rebuilding grants and the cost to rebuild their homes, and harming their efforts to return to their homes in New Orleans. Compl., Dkt. No. 1, ¶¶ 52-60. The Greater New Orleans Fair Housing Action Center, National Fair Housing Alliance, and five African-American homeowners from New Orleans (collectively, “Plaintiffs”), filed this lawsuit on behalf of all African-American homeowners in New Orleans who have participated in
1 Section 3604(a) makes it unlawful to “make unavailable or deny” housing to any person because of race. 42 U.S.C. § 3604(a). Section 3605(a) makes it unlawful to discriminate on the basis of race in the availability, terms, or conditions of residential real estate-related transactions. Id. § 3605(a). And § 3608(e)(5) of Title VIII requires HUD and recipients of federal funds to “administer the programs and activities relating to housing and urban development in a manner affirmatively to further” fair housing. Id. § 3608(e)(5). Finally, § 5304(b)(2) of the HCDA requires that the use of all CDBG funds be conducted in a manner that “affirmatively further[s] fair housing.” Id. § 5304(b)(2).
2 The City of New Orleans and the political subdivision Orleans Parish are coterminous. Plaintiffs refer throughout this brief to New Orleans and Orleans Parish interchangeably.
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the Road Home Program whose initial grant awards were calculated, or will be calculated, based upon the pre-storm value of their homes. Compl., Dkt. No. 1, ¶ 21.3
In denying Plaintiffs’ first Motion for a Temporary Restraining Order and a Preliminary
Injunction, Dkt. Nos. 59 and 61, this Court previously ruled that it was barred by the Eleventh
Amendment from ordering an ultimate remedy that would require the recalculation of initial
grant awards that had already been received by beneficiaries of the Road Home Program, even
though those awards were likely based upon a formula that had a discriminatory impact on
African-American homeowners. It was primarily on this basis that the prior request for preliminary relief (freezing of assets in the form of surplus funds) was denied.4
Plaintiffs now seek relief on behalf of individuals who have not yet received their initial
grant awards under the Road Home Program and who are in imminent danger of receiving initial
grant awards based upon what this Court concluded “may well be a discriminatory formula.”
Dkt. No. 61, at 17. Specifically, Plaintiffs seek a temporary restraining order and a preliminary
injunction enjoining Keegan from using a formula that takes into account pre-storm home values
(which this Court has already found is likely a discriminatory criterion, see id. at 7-8) to calculate
and disburse any future grants until the case is adjudicated on the merits. Insofar as this second
3 The Court noted in its July 7, 2010, Memorandum Opinion that Plaintiffs did not seek to circumscribe their first motion such that it would be limited to Road Home beneficiaries who had yet to receive initial grant awards, Dkt. No. 61, at 14, n. 12, and also suggested that Plaintiffs did not wish to represent those individuals, id. at 15, n. 13. However, the Complaint in this action clearly indicates that Plaintiffs seek relief on behalf of all current and future beneficiaries who had, or will have, their grants based upon the discriminatory formula. And while the first motion sought relief for all of these Plaintiffs, the instant motion seeks relief only on behalf of the subset of Plaintiffs who have not yet received their initial grant awards.
4 Plaintiffs dispute the denial of their Motion for a Temporary Restraining Order and a Preliminary Injunction (Order, Dkt. No. 59 and Memorandum Opinion, Dkt. No. 61) and reserve their right to appeal.
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motion pertains only to future grant awards, the requested relief does not disturb this Court’s ruling that any order “mandating that LRA make payments to Road Home beneficiaries who have already received funds” would violate the Eleventh Amendment. Id. at 10 (emphasis added).
Without temporary and preliminary injunctive relief, this subset of Plaintiffs may forever lose their right to obtain a remedy in this action, which seeks to vindicate the civil rights of African-American homeowners. Accordingly, Plaintiffs respectfully request an order from this Court to prevent further discrimination, thus preserving the status quo until it issues a decision on the merits.
PROCEDURAL BACKGROUND On November 12, 2008, Plaintiffs filed their Complaint, alleging that Defendants developed, implemented, and oversaw the Road Home Program in violation of the nondiscrimination and affirmative fair housing provisions of the Fair Housing Act and the HCDA, because the program has a disparate impact on African American homeowners as compared to whites. Plaintiffs sought declaratory and injunctive relief to end the discriminatory operation of the Road Home Program and to direct the Defendants to develop and apply a new, non-discriminatory grant formula. Compl., Dkt. No. 1, at 17. On March 6, 2009, HUD moved to dismiss for lack of jurisdiction and for failure to state a claim on which relief can be granted. Dkt. No. 22. On May 5, 2009, Keegan moved to dismiss based on a lack of jurisdiction, failure to state a claim, and a sovereign immunity defense. Dkt. No. 28. Keegan also moved for a transfer of venue to the Middle District of Louisiana. Id. On June 5, 2009, Plaintiffs opposed the Defendants’ motions to dismiss and transfer venue. Dkt.
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No. 34. The same day, HUD responded to Keegan’s motions, arguing that the Plaintiffs have a right to sue Keegan under the doctrine of Ex parte Young; Keegan’s sovereign immunity defense is meritless and that the action should not be transferred. Dkt. No. 33. On July 8, 2009, Keegan and HUD filed reply briefs in support of their respective motions. Dkt. Nos. 38-40.
On May 24, 2010, the Court scheduled a hearing on the motions to dismiss and directed the parties to address (1) whether Ex parte Young permits an order precluding a state officer from using funds that have not yet been released in a manner that violates federal law, and (2) how much money is available to the Road Home Program but has not yet been disbursed to Louisiana for that use, and how much money Louisiana and/or the LRA have that has not yet been disbursed to Road Home recipients. Dkt. No. 45. After conferring with HUD and Keegan, Plaintiffs filed their first Motion for Temporary Restraining Order and Preliminary Injunction. Dkt. No. 50. On June 4, 2010, the Court issued a clarification of its May 24, 2010 Order. Dkt. No. 52. After responsive briefing by the parties, Dkt. Nos. 57 and 58, the Court set a hearing on Plaintiffs’ first motion for June 25, 2010. After hearing oral argument on that date, the Court denied Plaintiffs’ motion for injunctive relief in an Order dated June 29, 2010, Dkt. No. 59, and issued a Memorandum Opinion setting forth its reasons for denying the motion on July 7, 2010, Dkt. No. 61 (“July 7 Opinion”).
FACTUAL BACKGROUND In the interest of brevity, Plaintiffs incorporate by reference the factual recitations set forth in their previous pleadings: Compl., Dkt. No. 1, ¶¶ 1-73; Plaintiffs’ Memorandum and Points of Authorities in Support of Their [First] Motion for a Temporary Restraining Order and
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A Preliminary Injunction, Dkt. No. 50-1, at 10-28; and Plaintiffs’ Supplemental Memorandum in Response to the Court’s June 4, 2010 Clarification Order, Dkt. No. 53, at 2-7. However, Plaintiffs highlight the following facts that are particularly relevant to the instant motion:
Source of funds In the aftermath of Hurricanes Katrina and Rita in 2005, Congress established a $19.7 billion Disaster Recovery Grant program. Through three separate allocations of Community Development Block Grant (“CDBG”) funds in 2005, 2006, and 2007, Congress provided funds for necessary expenses related to disaster relief, long-term recovery, and rebuilding in the most affected areas in the Gulf of Mexico.5 The first two statutes appropriated a combined $16.7 billion to five affected states—Louisiana, Mississippi, Texas, Florida, and Alabama—for activities authorized under the CDBG statute. See 2005 Act, 119 Stat. at 2779-81 ($11.5 billion appropriation); 2006 Act, 120 Stat. at 472-73 ($5.2 billion appropriation). But the final appropriation authorized an additional $3 billion of supplemental CDBG grants “solely for the purpose of covering costs associated with otherwise compensated but eligible claims that were filed on or before July 31, 2007, under the Road Home program,” which operates solely in Louisiana. 2007 Act, 121 Stat. at 1343-44. The funds that remain for this program all come from the third supplemental appropriation, as the funds for the first two appropriations have already been exhausted. Congress required that all funds be disbursed in compliance with the
5 See Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006, Pub. L. No. 109-148, 119 Stat. 2680, 2779-81 (Dec. 30, 2005) (the “2005 Act”); Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006, Pub. L. No. 109-234, 120 Stat. 418, 472-73 (June 15, 2006) (the “2006 Act”); Department of Defense Appropriations Act, 2008, Pub. L. No. 110-116, 121 Stat. 1295, 1343-44 (Nov. 13, 2007) (the “2007 Act”).
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Fair Housing Act. 71 Fed. Reg. 7,666, 7,671 (Feb. 13, 2006); 71 Fed. Reg. 63,337, 63,339 (October 30, 2006); 72 Fed. Reg. 70,472, 70,473 (Dec. 11, 2007).
Ongoing Discrimination The formula for computing the grants, which was adopted by LRA and approved by HUD, provides that the grant amount is based chiefly upon the lower of two values: (1) the home’s pre-storm value (minus any other compensation the applicant received for loss to the structure, such as insurance proceeds), or (2) the cost of repairing damage to the home (minus any other compensation the applicant received for loss to the structure). Dkt. No. 61, at 3. As this Court has noted, because homes in predominantly African-American communities have lower pre-storm values than comparable homes in predominantly white communities, and because the Road Home Program provides grants based on the lesser of the pre-storm value or the cost of repairing damage, African Americans are more likely than whites to receive a Road Home grant based on the pre-storm value of their home rather than on the much higher cost of repairing damage. Id. at 8. As a result, African-American homeowners are more likely than white homeowners to have a gap between their rebuilding resources and the cost to rebuild and, on average, their gaps are larger. Id. As of the filing of this motion, a number of Road Home Program applicants have yet to receive initial grant awards. And Keegan has thus far failed to alter the discriminatory formula for those remaining Road Home beneficiaries who have yet to receive initial grant awards. Therefore, many of them face the immediate prospect of receiving insufficient initial grant awards based upon a discriminatory formula. Plaintiffs are not able to ascertain the precise number of individuals in this situation. However, Defendant Keegan estimates that as of June
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11, 2010, 179 African-American homeowners in Orleans Parish fell into this category, see Dkt. No. 57, at 17-18.
Importantly, any of these individuals may receive initial grants at any moment, locking in discrimination in a manner that the Court has indicated may not be undone.
STANDARD OF REVIEW “To warrant preliminary injunctive relief, the moving party must show (1) a substantial likelihood of success on the merits, (2) that it would suffer irreparable injury if the injunction were not granted, (3) that an injunction would not substantially injure other interested parties, and (4) that the public interest would be furthered by the injunction.” Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290, 297 (D.C. Cir. 2006) (“CFGC”) (citations omitted). “These factors should be balanced against one another and ‘[i]f the arguments for one factor are particularly strong, an injunction may issue even if the arguments in other areas are rather weak.’” Jasperson v. Fed. Bureau of Prisons, 460 F. Supp. 2d 76, 88 (D.D.C. 2006) (Kennedy, J.) (quoting CityFed Fin. Corp. v. Office of Thrift Supervision, 58 F.3d 738, 747 (D.C. Cir. 1995)). Thus, “[t]he Court evaluates the four factors on a ‘sliding scale.’” Fraternal Order of Police Library of Cong. Labor Comm. v. Library of Cong., 639 F. Supp. 2d 20, 24 (D.D.C. 2009) (Kennedy, J.) (quoting Davenport v. Int’l Bhd. of Teamsters, 166 F.3d 356, 360-61 (D.C. Cir. 1999)). “For example, if plaintiffs make[] a strong showing of irreparable harm and there is no substantial harm to defendants, the Court applies a correspondingly lower standard for likelihood of success.” Id. (citing Washington Metro. Area Transit Comm’n v. Holiday Tours, Inc., 559 F.2d 841, 843 (D.C. Cir. 1977)).
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Plaintiffs need not show that irreparable harm is certain; they must only demonstrate “some likelihood of irreparable harm in the absence of an injunction.” Leitner v. United States, 679 F. Supp. 2d 37, 42 (D.D.C. 2010) (“Both the United States Supreme Court and the Court of Appeals for the D.C. Circuit have also emphasized that a plaintiff must show at least some likelihood of irreparable harm in the absence of an injunction.” (citing Winter v. Natural Res. Def. Council, Inc., 129 S. Ct. 365, 375 (2008) (holding that a plaintiff must “demonstrate that irreparable injury is likely in the absence of an injunction,” and not a mere “possibility”); CityFed, 58 F.3d at 747 (holding that a plaintiff must demonstrate at least some injury for a preliminary injunction to issue) (citation and internal quotation marks omitted))). Moreover, when a plaintiff has demonstrated a substantial likelihood that a defendant has violated specific fair housing statutes and regulations, the violation alone creates a rebuttable presumption of irreparable injury. See Gresham v. Windrush Partners, Ltd., 730 F.2d 1417, 1423-24 (11th Cir. 1984), cert. denied, Windrush Partners, Ltd. v. Metro Fair Hous. Servs, 469 U.S. 882 (1984) (upholding district court’s ruling that “once a plaintiff has demonstrated the likelihood of success on the merits of a claim of housing discrimination, irreparable injury must be presumed”); see also Silver Sage Partners, Ltd. v. City of Desert Hot Springs, 251 F.3d 814, 827 (9th Cir. 2001) (same); Rogers v. Windmill Pointe Village Club Ass'n, Inc., 967 F.2d 525, 528-29 (11th Cir. 1992) (same); Mical Commc’ns, Inc. v. Sprint Telemedia, Inc., 1 F.3d 1031, 1035-36 (10th Cir. 1993) (holding that irreparable injury is presumed “[w]hen the evidence shows that the defendants are engaged in, or about to be engaged in, the act or practices prohibited by a statute
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which provides for injunctive relief to prevent such violations”) (collecting cases from the 6th, 7th, and 8th Circuits).6
ARGUMENT Plaintiffs can easily satisfy each part of the four-part balancing test to obtain a preliminary injunction. First, this Court has already found that Plaintiffs have shown a likelihood of making out a prima facie case that using the pre-storm value criterion constitutes unlawful racial discrimination under the Fair Housing Act. Dkt. No. 61, at 7-8. Under the Court’s reasoning, relief on behalf of homeowners who have yet to receive grant awards is prospective, not retrospective, relief, thereby falling within the exception to Eleventh Amendment sovereign immunity recognized by the U.S. Supreme Court in Ex parte Young, 209 U.S. 123 (1908). Second, the harm will be irreparable because this Court has ruled that once initial grant awards are calculate and disbursed, requiring the recalculation of those grants constitutes impermissible retrospective relief. See Dkt. No. 61, at 13-15. Thus, Plaintiffs will lack an adequate remedy to the discrimination they will suffer if Keegan is permitted to issue discriminatory grant awards.
6 See also Cousins v. Bray, 297 F. Supp. 2d 1027, 1041 (S.D. Ohio 2003) (“[B]ecause of the strong national policy against race discrimination in housing, once a plaintiff has demonstrated a likelihood of success on the merits of a claim of housing discrimination, irreparable harm will be presumed.”); Remed Recovery Care Centers v. Township of Willistown, 36 F. Supp. 2d 676, 688 (E.D. Pa. 1999) (“[A] violation of the [FHA] creates a presumption of irreparable harm that a defendant must rebut in order for a preliminary injunction not to issue.”); Stewart B. McKinney Found., Inc. v. Town Plan and Zoning Comm’n of the Town of Fairfield, 790 F. Supp. 1197, 1208 (D. Conn. 1992) (“[I]rreparable harm may be presumed in this case because . . . the plaintiff has presented sufficient evidence to establish that its rights under the [FHA] have been violated.”).
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Third, the proposed relief—prohibiting Keegan from using the pre-storm value criterion for future grant awards—will not harm Defendants or any other interested parties.
Finally, the public interest strongly supports the issuance of the requested relief and an injunction will stop any further discrimination in the nation’s largest federal emergency housing program—a program to which Congress specifically attached fair housing and nondiscrimination protections.
A. Plaintiffs Have a Substantial Likelihood of Success on the Merits 1. The pre-storm value criterion violates the Fair Housing Act.
Though federal courts have alternately applied two possible standards to assess disparate impact claims under the Fair Housing Act, this Court adopted the burden-shifting framework favored by most courts. See Dkt. No. 61, at 7-8. Under this framework “once the plaintiff demonstrates that the challenged practice has a disproportionate impact, the burden shifts to the defendant to ‘prove and that no alternative would serve that interest with less discriminatory effect.’” Dkt. No. 61, at 7-8 (quoting 2922 Sherman Avenue Tenants’ Ass’n v. Dist. of Columbia, 444 F.3d 673, 680 (D.C. Cir. 2006)).
Plaintiffs have marshaled a considerable amount of statistical, documentary, and testimonial evidence demonstrating how and why the Road Home Program grant formula has a disparate impact on African-American homeowners.
This evidence included statistics from the U.S. Census showing that homes owned by African Americans in New Orleans have lower values, on average, than homes owned by whites, Dkt. No. 50-1, at 8-9, Ex. P; a published report from the organization Policy Link, which concludes that, on average, African-American applicants to the Road Home Program received
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funds in amounts further below the costs to rebuild their homes than white applicants, Dkt. No.
50-1, at 12-15, Ex. S; supporting declarations, Dkt. No 50-1, Ex. T; and admissions from
Keegan’s predecessor, Paul Rainwater, that home values in African-American neighborhoods
tend to be lower than in white neighborhoods and that he was “sure” that African-American
homeowners were more likely than whites to receive awards based on the value of their homes
than the cost of repairs, Dkt. No. 50-1, at 15-16, Ex. N, at 23-24.
Even in light of this overwhelming evidence, Keegan failed to articulate any bona
fide interest in using the pre-storm value criterion for some, but not all, homeowners; nor
could she point to the absence of a non-discriminatory alternative.
Based upon Plaintiffs’ unrebutted evidence, this Court applied the burden shifting
framework that the majority of Circuits have adopted to adjudicate FHA disparate impact claims
and concluded that Plaintiffs have a high likelihood of succeeding in their disparate impact
claim:
Plaintiffs have demonstrated that they would likely be able to make out this prima facie case after discovery. The statistical and anecdotal evidence they submit to the Court leads to a strong inference that, on average, African-American homeowners received awards that fell farther short of the cost of repairing their homes than did white recipients. Keegan’s attacks on that evidence are unpersuasive. Plaintiffs need not make a showing at this stage of the proceedings, before discovery and when briefing is necessarily rushed, sufficient to prove the merits of their case. Keegan neither demonstrates that plaintiffs’ statistics or logic is flawed nor provides data about the administration of the Program that would show what effect the Option 1 formula has had. Cf. Berger v. Iron Workers Reinforced Rodmen Local 201, 843 F.2d 1395, 1412 (D.C. Cir. 1988) (“Defendants may also attempt to undermine plaintiffs’ prima facie case by attacking the validity of plaintiffs’ statistical evidence, or by introducing statistical evidence of their own showing that the challenged practice did not have racially disproportionate results.” (citation omitted)). She has also offered no legitimate reason for taking pre-storm home values into account in calculating Program awards.
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Mem. Op., Dkt. No. 61, at 8. This finding constitutes the law of the case for purposes of the present motion. Kimberlin v. Quinlan, 199 F.3d 496, 500 (D.C. Cir. 1999) (“[T]he same issue presented a second time in the same case in the same court should lead to the same result.”) (quoting LaShawn A. v. Barry, 87 F.3d 1389, 1393 (D.C. Cir. 1996)); Does I through III v. District of Columbia, 593 F.Supp.2d 115, 122 (D.D.C. 2009) (Kennedy, J.) (“The [l]aw-of-the-case doctrine refers to a family of rules embodying the general concept that a court involved in later phases of a lawsuit should not re-open questions decided (i.e., established as the law of the case) by that court or a higher one in earlier phases.”) (internal quotes omitted).
2. The proposed injunctive relief does not implicate sovereign immunity concerns.
The Eleventh Amendment generally bars suits against states absent the relevant state’s consent to be sued or some abrogation of the state’s immunity by Congress, Papasan v. Allain, 478 U.S. 265, 276 (1986). However, in Ex parte Young, 209 U.S. 123 (1908), the Supreme Court announced an exception to that immunity that allows federal courts to enjoin state officials like Keegan from acting contrary to federal law, “either because their action is alleged to violate the Constitution directly or because it is contrary to a federal statute or regulation that is the supreme law of the land.” Vann v. Kempthorne, 534 F.3d 741, 749 (D.C. Cir. 2008) (quoting CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 4232 (3d ed. 2007)).
“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
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prospective.’” Verizon Md. Inc. v. Public Serv. Comm’n, 535 U.S. 635, 645 (2002) (quoting
Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261, 296 (1997) (O’Connor, J., concurring)).
This analysis typically precludes the payment of damages from the state treasury to correct a
prior unlawful act by a state official. Edelman v. Jordan, 415 U.S. 651, 663-64 (1974) (holding
that federal courts lack jurisdiction to require a state to spend money that “should have been
paid, but was not”).
The Court denied Plaintiffs’ first request for a temporary restraining order and
preliminary injunction based primarily upon its finding that part of the ultimate remedy would
require the recalculation of initial grant awards of Road Home Program beneficiaries who had
already received awards under a discriminatory formula—relief that the court found was
retrospective relief akin to money damages paid out of the state treasury. Dkt. No. 61, at 14-15.
However, the Court also indicated that it would have jurisdiction to provide a remedy for those
Road Home Program beneficiaries who had not yet received initial grant awards, as any order as
to those individuals would constitute forward-looking prospective relief:
[I]t seems to the Court that if the Road Home Program has not been completed, the Court may—if plaintiff’s arguments that Option 1 of the Road Home Program violates federal law are correct—enjoin Keegan from continuing to administer it in an unlawful manner. Were the Court to grant injunctive relief of that nature, it would not be ordering the payment of money. Instead, it would be ordering that, going forward, Keegan may not use the existing formula to disburse funds to Program beneficiaries. Such relief is the sort permitted under the doctrine of Ex parte Young. See Edelman, 415 U.S. at 664 (holding that prospective injunctive relief, such as the order issued in Ex parte Young itself in which “the Attorney General of Minnesota was enjoined to conform his future conduct of that office to the requirement of the Fourteenth Amendment,” is not barred by the Eleventh Amendment).
Dkt. No. 52, at 4-5 (emphasis added).
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As the Court made clear, the type of relief Plaintiffs’ seek in the instant motion fits squarely within the Ex parte Young exception because Plaintiffs only seek to “enjoin Keegan from continuing to administer [the Road Home Program] in an unlawful manner.” Id. The injunction sought only bars Keegan from using a discriminatory formula to calculate and distribute future grant awards until the case is adjudicated on the merits. Such relief does not run afoul of the Eleventh Amendment because it affects only future grants and prevents discrimination against beneficiaries who have not yet received initial grant awards. See Verizon, U.S. 535 at 645. This type of forward-looking injunction involves purely prospective relief.
In addition, even though compliance with the requested preliminary relief may require Keegan to issue future grants based upon the estimated cost of damage or some other nondiscriminatory alternative to pre-storm value (a change that could result in Keegan spending more money in order to comply), the relief is still properly characterized as prospective and injunctive.7 See Milliken v. Bradley, 433 U.S. 267, 289 (1977) (holding that a court-ordered school desegregation plan that required some incidental expenditure of state funds came within the Ex parte Young exception because it “enjoin[ed] state officials to conform their conduct to requirements of federal law” in the future); United States v. Yonkers Bd. of Educ., 893 F.2d 498, 503 (2d Cir. 1990) (“[E]ven where the relief requested will require the expenditure of state funds, if it is ancillary to such a prospective injunction it is not barred by the Eleventh Amendment.” ). As such, the Ex parte Young exception is plainly applicable and the Eleventh Amendment poses no bar to the requested relief.
7 In making this argument, Plaintiffs note that the Court determined that the surplus Road Home funds are state funds. Dkt. No. 61, at 11-12. However, while respectful of the law of the case, Plaintiffs do not concede this point and wish to preserve their argument that these funds are federal funds.
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B. Plaintiffs Will Be Irreparably Harmed If This Court Does Not Issue a Temporary Restraining Order and a Preliminary Injunction.
For an injury to constitute irreparable harm, it “must be ‘certain and great,’ ‘actual and not theoretical,’ and ‘of such imminence that there is a clear and present need for equitable relief to prevent irreparable harm.’” Fraternal Order of Police Library of Cong. Labor Comm., 639 F. Supp. 2d at 24 (quoting CFGC, 454 F.3d at 297). In addition, it “must be ‘beyond remediation,” which means that “[t]he possibility that adequate compensatory or other corrective relief will be available at a later date, in the ordinary course of litigation weighs heavily against a claim of irreparable harm.” Id. (quoting CFGC, 454 F.3d at 297-98 (citation omitted)); see also 11A WRIGHT, MILLER AND KANE, FEDERAL PRACTICE AND PROCEDURE § 2948.1 (2d ed. 1995) (“Only when the threatened harm would impair the court’s ability to grant an effective remedy is there really a need for preliminary relief.”)).
In its July 7, 2010 Memorandum Opinion, this Court concluded that any individual who has already received an initial Road Home grant may not obtain court-ordered relief in the form of a recalculated grant, as this would be retrospective relief akin to money damages from the state. See Dkt. No. 61, at 14-15. Consequently, Road Home Program beneficiaries who have yet to receive initial grant awards face immediate peril. If these Plaintiffs receive an initial grant award based upon the pre-storm value of their homes today, pursuant to the Court’s previous Order, the Court will be powerless to rectify the situation and order recalculation of those grants, no matter how damning the evidence of the discriminatory effect. These Plaintiffs would be locked into the same type of discrimination that now traps thousands of other African-American homeowners in New Orleans. Under these circumstances, preliminary injunctive relief is clearly appropriate in order to protect African American homeowners from discrimination before it
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happens. See Gresham, 730 F.2d at 1423 (holding that “when a plaintiff who has standing to
bring suit shows a substantial likelihood that a defendant has violated specific fair housing
statutes and regulations, that alone, if unrebutted, is sufficient to support an injunction remedying
those violations.”).
C. A Preliminary Injunction Will Not Harm Defendants or Other Interested Parties.
Neither the Defendants nor any other interested third parties will suffer harm, let alone
“substantial harm,” if this Court enjoins Keegan from using the discriminatory pre-storm value
criterion to issue future grants to Road Home beneficiaries. See Jasperson, 460 F. Supp. 2d at 88
(“The court must consider . . . whether the issuance of injunctive relief would ‘substantially
harm’ other parties.”). Keegan has already made clear in her prior court filings that she has
sufficient funds to provide non-discriminatory grants to the remaining beneficiaries who have yet
to receive initial grant awards:
The LRA has determined that under the existing formula, the amount of potential disbursements calculated for [eligible members of the Plaintiff class] is $9.224 million. . . However, the LRA has set aside and reserved a total of $126.6 million to pay pending applications for [grants for] eligible Road [H]ome applicants who have not yet had their first closing.
Dkt. No. 57, at 18.
This figure does not account for funds set aside in reserve by the LRA for other possible payments under the Road Home Program, including payments for appeals, second disbursements, additional compensation grants, individual mitigation measures, contaminated drywall and sold homes. The total about of funds in reserve is $554.5 million
Id. at 18, n.10.
[T]here is [sic] sufficient funds in reserve and set-aside to pay eligible pending grant applications. . . . This Court should find that these funds are more than sufficient to cover any future grant calculations covered by this suit.
16

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Id. at 31. As such, Keegan would not be injured by the proposed relief. Moreover, no other
interested parties will face harm, let alone substantial harm. Notably, the proposed injunction would neither stop, nor slow, the flow of funds to Louisiana homeowners who are in need. Under the terms of the proposed relief, Keegan may still offer grants to all individuals who have yet to receive an initial grant award. However, those awards simply may not be based upon prestorm value; instead, they must be based upon some other, non-discriminatory alternative, such as the estimated cost-of-damage criterion that Keegan has already used for the majority of white home owners. Moreover, the relief sought would make it more likely that Keegan would finally address the Road Home Program’s failures and discriminatory effect, at least as to some beneficiaries. And, as the passages above demonstrate, the surplus Road Home funds are ample enough to permit Keegan to continue the Road Home Program while also providing appropriate, non-discriminatory grants to Plaintiffs in the future.
In evaluating the impact of an injunction on existing Road Home recipients, the Court should note that allowing Keegan to continue using the pre-storm value criterion will actually further perpetuate discrimination against African-American homeowners. The balance of harms, therefore, decidedly tips in favor of granting preliminary relief, as the Plaintiffs risk the loss of any means to redress the harm giving rise to this action, whereas Defendants and other parties faces no danger at all.
D. Granting the Proposed Injunctive Relief is in the Public Interest. The public interest plainly favors enjoining Keegan from using the discriminatory formula to issue any further Road Home grants until the case is adjudicated on the merits. First,
17

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“[t]here can be no doubt that the public interest lies in terminating” such discrimination. Cook v. Billington, No. 82-0400, 1988 WL 35364, at *2 (D.D.C. Mar. 31, 1988). Indeed, the Supreme Court has recognized that the eradication of housing discrimination serves “an overriding societal priority.” United States v. Edward Rose & Sons, 384 F.3d 258, 264 (6th Cir. 2004) (quoting Meyer v. Holley, 537 U.S. 280, 290 (2003)). Moreover, eliminating housing discrimination and affirmatively promoting fair housing were the very purposes of enacting the Fair Housing Act. See 42 U.S.C. § 3601 (“It is the policy of the United States to provide, within constitutional limitations, for fair housing throughout the United States.”); see also Price v. Pelka, 690 F.2d 98, 101 (6th Cir. 1982) (“The eradication of housing discrimination is a policy that Congress considered to be of the highest priority.”) (citing Trafficante v. Metro. Life Ins. Co., 409 U.S. 205, 211 (1972)). And, “[i]n deciding what issues are imbued with ‘public interest,’ courts have given considerable weight to the policies of Congress[.]” 13 JAMES WM. MOORE, ET AL., MOORE’S FEDERAL PRACTICE § 65.22[3], at 65-58 (3d ed. 2009).
The importance of remedying housing discrimination is well established. Several courts, including those within this Circuit, have routinely emphasized that remedying discrimination is an important public interest in cases involving violations of the Fair Housing Act. See, e.g., Brown v. Artery Org., Inc., 691 F. Supp. 1459, 1461 (D.D.C. 1987) (concluding that “the public interest would be better served by remedying any possible racial injustice” and denying defendants’ motion to stay); Brown v. Artery Org., Inc., 654 F. Supp. 1106, 1119 (D.D.C. 1987) (concluding that “the public interest will most readily be served if prevention of the spread of racial discrimination in housing is given priority weight.”); Price, 690 F.2d at 101 (“Private enforcement of the Fair Housing Act and 42 U.S.C. §§ 1981 and 1982 not only vindicates the
18

Case 1:08-cv-01938-HHK Document 62-1 Filed 07/21/10 Page 25 of 29
civil rights of the individual victim of discrimination, but promotes the public interest by eradicating housing discrimination.”); United States v. Edward Rose & Sons, 246 F. Supp .2d 744, 755 (E.D. Mich. 2003) (“[W]here there has been a showing of housing discrimination, preliminary injunctive relief serves the public interest by carrying out the stated policy of the United States in 42 U.S.C. § 3601”); United States v. Puerto Rico, 764 F. Supp. 220, 225 (D.P.R. 1991) (granting injunction and emphasizing “the public interest that all citizens have in seeing vigorous enforcement of civil rights legislation like the Fair Housing Act.”).8
Furthermore, “[t]he public has an interest in assuring that public funds are appropriated and distributed pursuant to Congressional directives.” Population Inst. v. McPherson, 797 F.2d 1062, 1082 (D.D.C. 1986). As Congress specifically directed that the Road Home funds be spent pursuant to federal fair housing and anti-discrimination standards, 2005 Act, 119 Stat. at 2780; 2006 Act, 120 Stat. at 472-73, “the public interest will be frustrated” if the LRA is permitted to “distribute the funds” in direct contravention of the civil rights standards “dictated by Congress.” Population Inst., 797 F.2d at 1082; see also Letter from Rep. Maxine Waters to HUD Secretary Shaun Donovan (Apr. 14, 2010), Dkt. No. 50-1, Ex. gg, at 1-2 (stating that the Road Home Program “appears to contravene the fair housing protections enshrined in federal law— protections that were explicitly mandated by Congress when it funded the Road Home [P]rogram.”). Issuing the proposed preliminary injunction would further the stated purposes of the Road Home Program and Congress’ intent, as well.
8 Likewise, outside the fair housing context, courts have found that the public interest favors granting injunctive relief in the face of a discriminatory formula promulgated by a state agency. See South Camden Citizens in Action v. N.J. Dep’t of Env. Prot., 145 F. Supp. 2d 446, 502 (D.N.J. 2001) (concluding the public interest favored plaintiff, in part because “requiring the [state agency] to comply with the EPA’s Title VI implementing regulations is inherently in the public interest, insofar as it ensures the protection of civil rights”).
19

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Finally, if the Court preserves the status quo by preventing Keegan from discriminating against the prescribed subset of Plaintiffs, nearly 200 African-American homeowners in New Orleans will likely receive first-time Road Home grants that will help them finish repairing their homes. Cf. id. at 2 (stating that the Road Home Program’s “discrimination . . . poses a major obstacle to rebuilding the great city of New Orleans and enabling its people to return home,” and that many African American families “impacted by this discriminatory policy . . . still face insurmountable barriers to rebuilding.”). Undoubtedly, completing these rebuilding efforts, especially in predominantly African-American neighborhoods, will improve the lives of residents, homeowners, and communities in New Orleans in so many tangible and intangible ways.
As this court has expressly recognized, rehabilitating communities is in the public interest. Brown, 654 F. Supp. at 1119 (noting that the argument that rehabilitating apartment complexes is in the public interest has “obvious merit”). Surely the same logic applies to rebuilding thousands of homes in a historic American city that was devastated by Hurricane Katrina.
In short, overwhelming legal authority and evidence demonstrates that a preliminary injunction will further the public interest by remedying costly discrimination, ensuring that the nation’s largest federal housing program is administered according to the express fair housing mandates of Congress, and assisting thousands of homeowners to complete their repairs.
20

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CONCLUSION As the fifth anniversary of Hurricanes Katrina and Rita approaches, New Orleanians are still struggling to recover. Many plaintiffs in this action have already had their dreams undermined by having their initial Road Home grant awards based not on a realistic factor such as the actual cost to repair the damage to their homes, but rather on the pre-storm market value of their homes—a criterion that clearly leads to rank discrimination. But some have yet to receive initial grant awards at all. Ironically, as this subset of Plaintiffs clamors for funds that they desperately need to rebuild their homes five years after the storms, Keegan proposes to continue a pattern of discrimination by offering them insufficient grants based upon the discriminatory pre-storm value criterion. At any moment, Keegan may issue these initial grant awards. Under this court’s previous rulings, if these plaintiffs receive even a portion of these funds they will be forever denied an opportunity to obtain a recalculation of their grant awards on a nondiscriminatory basis. Under these circumstances, preliminary injunctive relief is clearly appropriate in order to address an ongoing violation of the law and to prevent further discrimination. For the foregoing reasons, pending this Court’s consideration of Plaintiffs’ claims on the merits, the Court should temporarily restrain and preliminarily enjoin Keegan from using the prestorm value criterion to calculate and disburse further Road Home Homeowner Assistance Program grants.
21

Case 1:08-cv-01938-HHK Document 62-1 Filed 07/21/10 Page 28 of 29

Dated: July 21, 2010

Respectfully submitted,

/s/ Damon T. Hewitt John Payton, Director-Counsel (D.C. Bar No. 282699) Damon T. Hewitt ReNika C. Moore NAACP LEGAL DEFENSE & EDUCATIONAL FUND, INC. 99 Hudson Street, 16th Floor New York, NY 10013 (p) 212-965-2200 / (fax) 212-226-7592 rmoore@naacpldf.org
/s/ Danielle Conley Craig Goldblatt (D.C. Bar No. 449229) Danielle Conley (D.C. Bar No. 503345) WILMER HALE 1875 Pennsylvania Avenue, NW Washington DC 20006 (p) 202-663-6006/ (fax) 202-663-6363 danielle.conley@wilmerhale.com

/s/ Joseph M. Sellers Joseph M. Sellers (D.C. Bar No. 318410) Jenny R. Yang (D.C. Bar No. 484874) Peter Romer-Friedman (D.C. Bar No. 993376) COHEN MILSTEIN SELLERS & TOLL PLLC 1100 New York Avenue, NW, Suite 500 Washington, D.C. 20005 (p) 202-408-4600 / (fax) 202-408-4699 jsellers@cohenmilstein.com
/s/ Morgan Whitney Williams Morgan Whitney Williams GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER 404 S. Jefferson Davis Pkwy. New Orleans, LA 70119 (o) 504-596-2100 ext. 104/ (fax) 504-708-2476 mwilliams@gnofairhousing.org

Attorneys for Plaintiffs

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Case 1:08-cv-01938-HHK Document 62-1 Filed 07/21/10 Page 29 of 29

CERTIFICATE OF SERVICE I hereby certify that on July 21, 2010, the foregoing document was filed electronically via the Court’s ECF system, through which a copy was served on:

Allen J. Krouse, III Renee G. Culotta Suzanne M. Risey FRILOT L.L.C. 1100 Poydras Street, Suite 3600 New Orleans, LA 70163 Telephone: 504-599-8004 Facsimile: 504-599-8104 Email: akrouse@frilot.com Email: rculotta@frilot.com Email: srisey@frilot.com
Attorneys for Defendant Robin Keegan

James D. Todd U.S. DEPARTMENT OF JUSTICE 20 Massachusetts Avenue, N.W. Washington, DC 20001 Telephone: 202-514-3378 Facsimile: 202- 616-8470 Email: james.todd@usdoj.gov
Attorney for Defendant United States Dept. of Housing and Urban Development

/s/ Damon T. Hewitt

Case 1:08-cv-01938-HHK Document 62-2 Filed 07/21/10 Page 1 of 1

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, et al.,

Plaintiffs,

v.

No. 1:08-cv-1938-HHK

UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, et al.,

Defendants.

ORDER Upon consideration of Plaintiffs’ Second Motion for a Temporary Restraining Order and a Preliminary Injunction, and the entire record herein, it is, this ____ day of ______________, hereby ORDERED that Plaintiffs’ Motion is GRANTED, and it is hereby FURTHER ORDERD that until such time as the Court issues a decision on the merits or provides otherwise, Defendant Robin Keegan – former Executive Director of the Louisiana Recovery Authority (“LRA”) and current Executive Director of the LRA’s successor agency, the Louisiana Office of Community Development (“OCD”) – and/or or any successor entity, are enjoined from using the pre-storm value of a beneficiary’s home as a criterion to calculate or disburse any further initial grant awards to beneficiaries of the Road Home Program, which Defendant administers. Under the terms of this Order, Defendant Keegan may continue to calculate and disburse grant awards in a manner that does not utilize the pre-storm value of the beneficiary’s home as a criterion.
_________________________________ Henry H. Kennedy United States District Judge

 
 Case 1:08-cv-01938-HHK Document 69 Filed 08/04/10 Page 1 of 33

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING )

ACTION CENTER, et al.

)

)

Plaintiffs,

)

)

v.

)

)

U.S. DEPARTMENT OF HOUSING AND

)

URBAN DEVELOPMENT, et al.

)

)

Defendants.

)

No. 1:08-cv-1938-HHK

OPPOSITION TO PLAINTIFFS’ SECOND MOTION FOR A TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION AGAINST THE EXECUTIVE DIRECTOR OF THE LOUISIANA RECOVERY AUTHORITY

Case 1:08-cv-01938-HHK Document 69 Filed 08/04/10 Page 2 of 33
TABLE OF CONTENTS
TABLE OF AUTHORITIES.................................................................................................... 3 I. Procedural History................................ ................................ ............................... 9 II. The Court Lacks Jurisdiction to Entertain Plaintiffs' Second Motion & Plaintiffs' Motion is Barred by Collateral Estoppel ........................................ 10 III. Plaintiffs Lack Standing to Seek Relief on Behalf of the Subset ......................... 14 IV. Plaintiffs' Second Request for Injunctive Relief Remains Premature .................. 16 V. Plaintiffs are not Entitled to Injunctive Relief Under Fed. R. Civ. P. 65 ............ 17 A. Standard for Injunctive Relief................................................................. 17 B. Plaintiffs Have Not Proven A Substantial Likelihood of Success on the Merits............................................................................................... 18 1. Plaintiffs' Evidence is Flawed ............................................................. 21 2. Sovereign Immuinity Concerns Exist.................................................. 25 3. There is no Risk of Irreperable Harm.................................................. 26 4. Inunctive Relief Would Injure Other Interested Parties and Would Not Further the Public Interest .................................................... 30 VI. Conclusion...................................................................................................... 31

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TABLE OF AUTHORITIES
Federal Cases
2922 Sherman Avenue Tenants’ Association v. District of Columbia, 444 F.3d 673 (D.C. Cir. 2006)........................................................................................... . 19, 20
Allen v. Wright, 468 U.S. 737, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984)...............................................................15
Allston v. Lewis, 480 F.Supp. 328 (D.S.C. 1979) .................................................................................................30
Ambach v. Bell, 686 F.2d 974 (D.C. Cir. 1982)...................................................................................................17
Am. Bankers Ass’n v. Nat’l Credit Union Admin., 38 F.Supp.2d 114 (D.D.C. 1999)...............................................................................................18
Anderson v. Zubieta, 180 F.3d 329 (D.C. Cir. 1999)............................................................................................. 19, 20
Asdourian v. Konstantin, 50 F.Supp.2d 152 (E.D.N.Y. 1999) ...........................................................................................29
Bancoult v. McNamara, 227 F.Supp.2d 144 (D.D.C. 2002).............................................................................................17
Banks v. Office of Senate Sergeant-At-Arms and Doorkeeper of the United States Senate,
471 F.3d 1341 (D.C.Cir. 2006)..................................................................................................11
Barnhardt v. District of Columbia, 2010 WL 2802646 (D.D.C. July 16, 2010)................................................................................14
Benton v. Kessler, 505 U.S. 1084, 112 S.Ct. 2929, 120 L.Ed.2d 926 (1992) ...........................................................18
Byrd v. Environmental Protection. Agency, 174 F.3d 239 (D.C.Cir. 1999) ................................ ................................ ................................ ...15
Carollo v. Herman, 84 F.Supp.2d 374 (E.D.N.Y. 2000) ...........................................................................................29
Citibank , N.A. v. Citytrust, 756 F.2d 273 (2nd Cir. 1985) ................................ ................................ ................................ ...29

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Case 1:08-cv-01938-HHK Document 69 Filed 08/04/10 Page 4 of 33

CityFed Fin. Corp. v. Office of Thrift Supervision, 58 F.3d 738 (D.C. Cir. 1995) .............................................................................................. 18, 27
Cobell v. Norton, 240 F.3d 1081 (D.C. Cir. 2001).................................................................................................17
Commer v. McEntee, 2001 WL 274125 (S.D.N.Y. March 19, 2001)...........................................................................30
Decatur Liquors, Inc., et al. v District of Columbia, et al, 2005 WL 607881 *2 (D.D.C. March 16, 2005) ................................................................... 11, 13
Doe v. Nat'l Bd. Med. Examiners, 199 F.3d 146 (3rd Cir. 1999).....................................................................................................15
Does I through III v. District of Columbia, 593 F.Supp.2d 115 (D.D.C. 2009).............................................................................................21
Fiba Leasing Company, Inc. v. Airdyne Industries, Inc., 826 F.Supp. 38 (D. Mass. 1993)................................................................................................29
Fla. Audubon Society v. Bentsen, 94 F.3d 658 (D.C.Cir. 1996) .....................................................................................................14
Gianni Cereda Favrics, Inc. v. Bazaar Fabrics, Inc., 335 F.Supp. 278 (S.D.N.Y. 1971) .............................................................................................29
Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 103 S.Ct. 400, 74 L.Ed.2d 225 (1982)...................................................................11
Hawksbill Sea Turtle v. FEMA, 126 F.3d 461 (3d Cir. 1997) ......................................................................................................14
In Re Any and All Funds or Other Assets in Brown Brothers Harriman & Co., 601 F.Supp.2d 252 (D.D.C. 2009).............................................................................................17
In re Brown, 951 F.2d 564 (3d Cir. 1991) ......................................................................................................14
In re Nangle, 274 F.3d 481 (8th Cir. 2001).....................................................................................................14
In re Sealed Case (Medical Records), 381 F.3d 1205 (D.C.Cir. 2004)..................................................................................................11

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Case 1:08-cv-01938-HHK Document 69 Filed 08/04/10 Page 5 of 33
In the Matter of Thorp, 655 F.2d 997 (9th Cir. 1981)......................................................................................................11
International Bhd. Of Teamsters v. United States, 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977).................................................................19
Johnson v. Bechtel Associates Professional Corp., 801 F.2d 412 (D.C.Cir. 1986) ................................ ................................ ................................ ...12
Kimberline v. Quinlan, 199 F.3d 496 (D.C.Cir. 1999)....................................................................................................21
Kuznich v. County of Santa Clara, 689 F.2d 1345 (9th Cir. 1983) .................................................................................................. 14
Leitner v. U.S., 679 F.Supp.2d 37 (D.D.C. 2010)...............................................................................................17
Liberty Mut. Ins. Co. v. Wetzel, 424 U.S. 737, 96 S.Ct. 1202, 47 L.Ed.2d 435 (1976)................................................................17
Long v. Robinson, 432 F.2d 977 (4th Cir. 1970)......................................................................................................29
*Lujan v. Defenders of Wildlife, 504 U.S. 555, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) .............................................................15
Majorica,, S.A. v. R.H. Macy & Co., 762 F.2d 7 (2nd Cir. 1985) .........................................................................................................29
Mazurek v. Armstrong, 520 U.S. 968, 117 S.Ct. 1865, 138 L.Ed.2d 162 (1997) .............................................................17
McKesson HBOC, Inc. v. Islamic Republic of Iran, 315 F.Supp.2d 63 (D.D.C. 2004)...............................................................................................11
Menokan v. Blair, 2006 WL 1102809 (D.D.C. April 26, 2006) ..............................................................................20
Mova Pharm. Corp. v. Shalala, 140 F.3d 1060 (D.C. Cir. 1998).................................................................................................18
National Fair Housing Alliance, Inc. v. Prudential Insurance Company of America, 208 F.Supp.2d 46 (D.D.C. 2002)...............................................................................................19

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Case 1:08-cv-01938-HHK Document 69 Filed 08/04/10 Page 6 of 33
National Wildlife Federation. v. Burford, 878 F.2d 422 (D.C.Cir. 1989)................................................................................................... 15
Nutrition Inst. v. Block, 749 F.2d 50 (D.C.Cir. 1984) .....................................................................................................21
O Centro Espirita Beneficiente Uniao Do Vegetal v. Ashcroft, 389 F.3d 973 (10th Cir. 2004), affirmed, 546 U.S. 418, 126 S.Ct. 1211, 163 L.Ed2d 1017 (2006) ...........................................................................................................18
Raytheon Co. v. Ashborn Agencies, Ltd., 372 F.3d 451 (D.C.Cir. 2004)....................................................................................................15
Sampson v. Murray, 415 U.S. 61, 94 S.Ct. 937, 39 L.Ed.2d 166 (1974).....................................................................26
* Serono Labs., Inc. v. Shalala, 158 F.3d 1313 (D.C. Cir. 1998).................................................................................................18
Sierra Club v. Environmental Protection Agency, 292 F.3d 895 (D.C.Cir. 2002)....................................................................................................15
Simon v. Eastern Ky. Welfare Rights Org., 426 U.S. 26, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976)...................................................................15
Tozzi v. Dep't of Health & Human Servs., 271 F.3d 301 (D.C.Cir. 2001)................................. ................................ ................................ ...15
Univ. of Texas v. Camenisch, 451 U.S. 390, 101 S.Ct. 1830, 68 L.Ed.2d 175 (1981)...............................................................21
United States v. DeFries, 129 F.3d 1293 (D.C.Cir. 1997)..................................................................................................11
Veitch v. Danzig, 135 F.Supp.2d 32 (D.D.C. 2001)...............................................................................................18
Winter v. Nat. Res. Def. Council, Inc., --- U.S. ----, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008) .................................................................27
Winpisinger v. Watson, 628 F.2d 133 (D.C.Cir. 1980)....................................................................................................16
Wisconsin Gas Co. v. FERC, 758 F.2d 669 (D.C.Cir. 1985)....................................................................................................27

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Case 1:08-cv-01938-HHK Document 69 Filed 08/04/10 Page 7 of 33
Federal Statutes U.S. Const. Art. III, § 2, cl. 1 ....................................................................................................14 28 U.S.C. § 1291.......................................................................................................................10 28 U.S.C. § 1292.......................................................................................................................11 42 U.S.C. § 1973(c) ..................................................................................................................19 42 U.S.C. § 3604(a)-(b) , 3605(a), 3608(d), 3608(e)(5) .............................................................19 42 U.S.C. § 5304(b)(2)..............................................................................................................19 Fed. R. Civ. P. 62......................................................................................................................12 Fed. R. Civ. P. 65.................................................................................................................. 8, 17 Other Authorities Black’s Law Dictionary 485 (8th ed. 2007) ................................................................................20 11A C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure § 2941, p. 35 (2d ed. 1995) .......................................................................................................17

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Case 1:08-cv-01938-HHK Document 69 Filed 08/04/10 Page 8 of 33
Defendant Robin Keegan, in her capacity as Executive Director of the Louisiana Recovery Authority (hereinafter referred to as “Keegan”), submits this memorandum in opposition to Plaintiffs’ second motion for a temporary restraining order and preliminary injunction under Fed. R. Civ. P. 65.
On July 26, 2010, Plaintiffs filed a notice of appeal appealing this Court’s Order denying their first motion for temporary restraining order and/or preliminary injunction. Plaintiffs’ second motion for temporary restraining order and/or preliminary injunction seeks identical relief on behalf of the same individuals for whom relief was sought by virtue of Plaintiffs’ first motion and for whom Plaintiffs’ counsel declined representing at oral argument on Plaintiffs’ first motion. Keegan submits Plaintiffs’ filing of a notice of appeal divests this Court of jurisdiction to entertain Plaintiffs’ second motion.
In addition, Keegan submits Plaintiffs’ second request for a temporary restraining order and/or preliminary injunction remains premature at this stage in the litigation since this Court has not yet decided and/or issued a ruling as to whether it has subject matter jurisdiction in this case and the proper venue for this case.1 This Court should not address Plaintiffs’ requested relief without first deciding the issue of whether it can and will exercise jurisdiction over this case.
Alternatively, Keegan maintains Plaintiffs are not entitled to a temporary restraining order and/or a preliminary injunction.2 They cannot show a likelihood of success on the merits, irreparable injury or that the injunctive relief is in the public interest. The evidence relied upon by the Court in its Memorandum Opinion dated July 6, 2010, in suggesting the Road Home

1

Keegan adopts and incorporates by reference all defenses raised in her motion to dismiss and reply

memorandum. (Rec. Doc. 28.)

2

Keegan adopts and incorporates by reference her opposition to Plaintiffs’ first motion for temporary

restraining order and preliminary injunction. (Rec. Doc. 57.)

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Case 1:08-cv-01938-HHK Document 69 Filed 08/04/10 Page 9 of 33

formula may be discriminatory3 was flawed and unreliable. In addition, it is well settled such dicta at the preliminary injunctive stage are not the law of the case. Notwithstanding, the evidence provided herein shows the Road Home formula has no discriminatory effect. Plaintiffs cannot succeed on the merits of their disparate impact claim.
In addition, it has already been established the State of Louisiana has adequately set aside and reserved sufficient funds to pay any remaining Road Home applicants who are deemed eligible. Therefore, Plaintiffs are not at risk of any irreparable injury because, even if they are successful on the merits, which is denied, the LRA has obligated sufficient funds to cover the payment of Road Home grant awards for eligible Road Home applicants who have not yet had their first closing. Injunctive relief would only harm the remaining Road Home applicants and is not in the public interest.
Plaintiffs’ second request for a temporary restraining order and preliminary relief remains overly broad, unnecessary and detrimental to the public interest and the administration of the Road Home Program. Their request should be denied. I. PROCEDURAL HISTORY
Plaintiffs filed their Complaint in this case on November 12, 2008. (Rec. Doc. 1.) Defendant filed a Motion to Dismiss Plaintiffs’ lawsuit on May 5, 2009. (Rec. Doc. 28.) Although Defendant’s motion to dismiss is potentially dispositive of all claims at issue in this litigation, it remains pending as of the date of this motion. On June 2, 2010, Plaintiffs filed a

3

Keegan strongly disagrees with the Court’s dicta concerning the discriminatory impact of the formula. The

Road Home program was never about race; it was a state wide program designed to assist low to moderate income

individuals whose homes were damaged or destroyed by Hurricanes Katrina and/or Rita in more than 37 Louisiana

parishes. It was not designed solely for Orleans Parish. Nevertheless, there has never been a showing by any expert

the Road Home formula had a discriminatory impact. The only “evidence” submitted by Plaintiffs is based on

inaccurate and flawed data. Notwithstanding, once the ACG was lifted, there is no possibility there could have been

a discriminatory impact, as Plaintiffs admit.

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Case 1:08-cv-01938-HHK Document 69 Filed 08/04/10 Page 10 of 33

Motion for a Temporary Restraining Order and Preliminary Injunction (“First Motion”). (Rec. Doc. 50.) Oral argument on Plaintiffs’ motion was heard June 25, 2010. On June 29, 2010, this Court denied Plaintiff’s motion. (Rec. Doc. 59.) On July 6, 2010, the Court issued its Memorandum Opinion setting forth the reasons for the denial. (Rec. Doc. 61.) The Court’s denial of Plaintiff’s motion was not limited to an Eleventh Amendment analysis, but included several grounds for denial, including, Plaintiffs’ failure to demonstrate a likelihood of success; the Court’s lack of authority to grant the ultimate relief sought; the involvement of state versus federal funds; Plaintiffs’ failure to show irreparable harm; likelihood of third party injury, and public interest weighing in favor of both parties.
Thereafter, on July 21, 2010, Plaintiffs filed a Second Motion for Temporary Restraining Order and Preliminary Injunction (“Second Motion”) seeking relief identical to that sought by virtue of their first motion. (Rec. Doc. 62.) On July 22, 2010, Keegan filed a Motion for Extension of Time to Respond to Plaintiff’s Second Motion. (Rec. Doc. 63.) On July 23, 2010, Plaintiffs also filed an Opposition to Keegan’s motion for additional time. (Rec. Doc. 65.) On July 23, 2010, the Court denied Keegan’s motion but provided an additional two days for Keegan to respond to Plaintiff’s First Motion. (Rec. Doc. 66.)4 On July 26, 2010, Plaintiffs filed a Notice of Appeal appealing the Court’s order denying their First Motion for preliminary injunction. (Rec. Doc. 67.) II. THE COURT LACKS JURISDICTION TO ENTERTAIN PLAINTIFF’S
SECOND MOTION & PLAINTIFFS’ MOTION IS BY COLLATERAL ESTOPPEL Under 28 U.S.C. § 1291, “all final decisions” of the district court are appealable. This Circuit strictly construes this rule, noting “a district court's decision is ordinarily not final until it

4

Keegan’s response is timely filed in accordance with the Court’s Order.

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Case 1:08-cv-01938-HHK Document 69 Filed 08/04/10 Page 11 of 33

‘ends the litigation on the merits and leaves nothing for the court to do but execute the

judgment.’” Banks v. Office of Senate Sergeant-At-Arms and Doorkeeper of the United States

Senate, 471 F.3d 1341, 1345 (D.C.Cir. 2006) (quoting In re Sealed Case (Medical Records), 381

F.3d 1205, 1209 (D.C.Cir. 2004)). One exception to the final order rule is found in 28 U.S.C. §

1292, which grants a court of appeals jurisdiction over certain interlocutory appeals. 28 U.S.C. §

1292(a)-(b). Under § 1292(a)(1), courts of appeals have jurisdiction from orders granting or otherwise relating to injunctions. 28 U.S.C. § 1292(a)(1).5

It is well-settled that the filing of a notice of appeal, including an interlocutory appeal,

confers jurisdiction on the court of appeals and divests the district court of control over those

aspects of the case involved in the appeal. United States v. DeFries, 129 F.3d 1293, 1302

(D.C.Cir. 1997) (quoting Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58, 103

S.Ct. 400, 74 L.Ed.2d 225 (1982)(“a federal district court and a federal court of appeals should

not attempt to assert jurisdiction over a case simultaneously”). The reasons for the transfer of

jurisdiction are obvious; “divestiture of district court jurisdiction avoids the ‘confusion and waste

of time that might flow from putting the same issues before two courts at the same time.’”

Decatur Liquors, Inc., et al. v District of Columbia, et al, 2005 WL 607881 *2 (D.D.C. March 16, 2005), citing, In the Matter of Thorp, 655 F.2d 997, 998 (9th Circ. 1981). The only

exceptions to this rule are when a party frivolously appeals or takes an interlocutory appeal from

a non-appealable order - neither of which is applicable in this case. United States v. DeFries,

129 F.3d. at 1302-03; McKesson HBOC, Inc. v. Islamic Republic of Iran, 315 F.Supp.2d 63, 66

5

Additionally, under § 1292(b), a district court judge may certify that “an order ‘involves a controlling

question of law as to which there is substantial ground for difference of opinion’ and further finds ‘that an

immediate appeal from the order may materially advance the ultimate termination of the litigation.’ ” Banks, 471

F.3d at 1345 (quoting 28 U.S.C. 1292(b)). If a party files an appeal upon such certification, “[t]hat application for an

appeal hereunder shall not stay proceedings in the district court unless the district judge or the Court of Appeals or a

judge thereof shall so order.” 28 U.S.C. § 1292(b). No such certification has been issued in this case. Accordingly,

§1292(b) is inapplicable.

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(D.D.C. 2004) (“[A] notice of appeal from an unappealable order does not divest the district court of jurisdiction.”). The district court does not regain jurisdiction over the issues on appeal until the court of appeals issues its mandate. Johnson v. Bechtel Associates Professional Corp., 801 F.2d 412, 415 (D.C.Cir. 1986) (per curiam). 6
Plaintiff’s Second Motion claims to seek relief on behalf of Road Home applicants who have not received their initial grant rewards under the Road Home Program. (Rec. Doc. 62, p. 8.) Plaintiffs seek a temporary restraining order and preliminary injunction enjoining Keegan from using a formula that takes into account pre-storm home values to calculate and disburse any future grants. (Id. ) By Plaintiffs’ own admission, however, the individuals for whom Plaintiffs seek relief by virtue of their Second Motion were included in Plaintiffs’ First Motion. (See Rec. Doc. 65, p. 2.) (“African American homeowners who have not yet received initial awards under the Road Home Program …have thus always been a part of this litigation and a part of the class for whom Plaintiffs sought relief in this litigation, including in Plaintiffs’ first motion for preliminary relief.”)(emphasis added.) Further, Plaintiffs admit their Second Motion “encompasses the same factual issues and largely the same legal issues” as their First Motion. (Id.) Although Plaintiffs contend their Second Motion “simply addresses a narrower subset of Plaintiffs,” it is undisputed this “subset” was included in their First Motion, which this Court denied and for which Plaintiffs have filed a notice of appeal. It is further undisputed Plaintiffs counsel declined at oral argument to limit their First Motion and the requested injunctive relief to this “narrow subset” for whom they now seek relief.

6

While a district court may retain jurisdiction to modify an injunction, Plaintiffs are not seeking a

modification of their injunctive relief. Fed.R.Civ.P. 62(c). Rather, Plaintiffs are seeking the identical relief sought

by way of their First Motion, which this Court denied and which Plaintiffs have now appealed.

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As this Court noted in its Memorandum Opinion: The Court asked plaintiffs during oral argument on this motion whether they would wish to go forward with their request for a preliminary injunction if the Court were to hold that the ultimate relief they seek is only available to those 179 individuals. Plaintiffs did not express a desire to limit their case to such a narrow group of Road Home Program beneficiaries.
* * * As noted, plaintiffs’ counsel have declined to indicate that the wish to represent the 179 applicants who have not yet received awards. (Rec. Doc. 65, pps. 14-15, fn. 12, 13.) 7 This “narrow subset” of plaintiffs was included in Plaintiff’s First Motion. It was the subject of oral argument on Plaintiffs’ First Motion. It was the subject of this Court’s Memorandum Opinion dated July 6, 2010, denying Plaintiff’s First Motion. Plaintiffs’ counsel were provided the opportunity to seek relief on behalf of this narrow subset during oral argument June 25, 2010. They declined. Their subsequent appeal of the Court’s Order denying their First Motion inherently includes an appeal of all issues before the Court by way of their First Motion. See Decatur Liquors, supra. at *3 (where party moved to dissolve a preliminary injunction but raised no new facts or argument it was inadvisable for the court to reconsider its decision particularly where the propriety of its initial determination is under review by an appeals court.) As this “narrow subset” was included in the First Motion, and Plaintiffs have now raised the same factual and legal arguments in their Second Motion, any issues related to the denial injunctive relief on this subset’s behalf is encompassed in Plaintiffs’ appeal. Accordingly, this Court is divested of jurisdiction to entertain Plaintiffs' Second Motion and their motion should be stayed pending the outcome of Plaintiffs’ appeal.

7

Keegan submits Plaintiffs’ lack standing to seek injunctive relief on behalf of this subset of individuals as

Plaintiffs’ counsel unequivocally declined representing these individuals at oral argument.

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In addition, Plaintiffs’ Second Motion is barred by collateral estoppel and/or res judicata. Traditionally, issues litigated in the context of a preliminary injunction traditionally would not form a basis for collateral estoppel. Kuznich v. County of Santa Clara, 689 F.2d 1345, 1350-51 (9th Cir. 1983). Recent decisions have relaxed this view by applying the collateral estoppel doctrine to matters resolved by preliminary rulings.” See Barnhardt v. District of Columbia, 2010 WL 2802646 (D.D.C. July 16, 2010) citing, In re Nangle, 274 F.3d 481, 484-85 (8th Cir. 2001). The doctrine may apply, where findings made in a prior proceeding are “sufficiently firm” to remove any compelling reason to permit re-litigation of the issues. Barnhardt at *9, citing, Hawksbill Sea Turtle v. FEMA, 126 F.3d 461, 474 n. 11 (3d Cir. 1997). For purposes of collateral estoppel, finality “may mean little more than that the litigation of a particular issue has reached such a stage that a court sees no really good reason for permitting it to be litigated again.” Id, citing, In re Brown, 951 F.2d 564, 569 (3d Cir. 1991). The issue of whether Plaintiffs are entitled to any injunctive relief has already been decided by this Court. Because the subset of applicants for whom Plaintiffs now seek relief were included in their First Motion and therefore, were included in the Court’s July 6, 2010, Memorandum, Plaintiffs’ requested relief is barred by collateral estoppel. Moreover, Plaintiffs have appealed the denial of their First Motion. (Rec. Doc. 67; District of Columbia Court of Appeals, Civil Action No. 10-5257). Plaintiffs should be precluded from re-litigating the very issues previously decided by this Court and issues presently on appeal. III. PLAINTIFFS LACK STANDING TO SEEK RELIEF ON BEHALF OF THE
SUBSET Article III of the Constitution limits the jurisdiction of federal courts to cases or controversies. U.S. Const. Art. III, § 2, cl. 1. “[A] showing of standing is an essential and unchanging predicate to any exercise of a court's jurisdiction.” Fla. Audubon Society v. Bentsen,

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94 F.3d 658, 663 (D.C.Cir. 1996) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). The “question of standing is whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues.” Allen v. Wright, 468 U.S. 737, 750-51, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984). Therefore, standing must be resolved as threshold matter. Raytheon Co. v. Ashborn Agencies, Ltd., 372 F.3d 451, 453 (D.C.Cir. 2004).
To demonstrate standing, a plaintiff must satisfy a three-pronged test. Sierra Club v. Environmental Protection. Agency, 292 F.3d 895, 898-99 (D.C.Cir. 2002) (citing Defenders of Wildlife, 504 U.S. at 560, 112 S.Ct. 2130). First, the plaintiff must have suffered an injury in fact which is defined as a harm that is concrete and actual and/or imminent, not one that is conjectural or hypothetical. Byrd v. Environmental Protection Agency, 174 F.3d 239, 243 (D.C.Cir. 1999). Second, there must be a fairly traceable connection between the alleged injury and the alleged conduct of the defendant. Id.; Simon v. Eastern Ky. Welfare Rights Org., 426 U.S. 26, 41, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976). Finally, it must be likely that the requested relief will redress the alleged injury. Id.
It is well settled that “[m]ere allegations will not support standing at the preliminary injunction stage.” Doe v. Nat'l Bd. Med. Examiners, 199 F.3d 146, 152 (3rd Cir. 1999); see also Nat'l Wildlife Fed. v. Burford, 878 F.2d 422, 423 (D.C.Cir. 1989), rev'd on other grounds sub non Lujan, 497 U.S. 871, 110 S.Ct. 3177 (the burden of establishing standing at preliminary injunction stage is no less than the standard for summary judgment). No standing will exist if the allegations are “purely speculative, [which is] the ultimate label for injuries too implausible to support standing.” Tozzi v. Dep't of Health & Human Servs., 271 F.3d 301, 307 (D.C.Cir. 2001). Further, no standing will exist if the court is required to accept “very speculative inferences and

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assumptions in any endeavor to connect the alleged injury with [the challenged conduct].” Winpisinger v. Watson, 628 F.2d 133, 139 (D.C.Cir. 1980).
Plaintiffs cannot demonstrate an injury-in-fact for the subset of Road Home applicants for whom they seek injunctive relief. In fact, Plaintiffs’ claim of injury on behalf of this purported subset is purely speculative. As more detailed below, there is only a possibility that any of the remaining “179” applicants (now numbering 141) are even eligible to receive Road Home grants due to various eligibility issues and an impending deadline. (See Section V, Exhibit B, infra, identifying the eligibility issues faced by the remaining 141 applicants.) In addition, because there is no injury in fact, Plaintiffs cannot establish a traceable connection between the alleged injury and the alleged conduct of Keegan. The requested relief cannot redress the subset’s alleged injury as it is purely speculative as to whether an injury has been sustained.
Finally, to the extent a number of the subset claims (38) have already been processed and grants dispersed, Plaintiffs lack standing to seek redress on their behalf, as first, they can show no injury has been suffered and second, the Court is without authority to order the recalculation of these grants.
Absent this Court accepting Plaintiffs’ speculative inferences and unsupported assumptions concerning the Road Home formula and the subset’s alleged risk of imminent harm, Plaintiffs have failed to demonstrate standing on behalf of this subset of Road Home applicants for whom they request injunctive relief. Their request should be denied. IV. PLAINTIFFS’ SECOND REQUEST FOR INJUNCTIVE RELIEF IS
PREMATURE As of the date of this Opposition, the Court has not ruled on Keegan’s Motion to Dismiss filed May 5, 2009, a motion potentially dispositive of all issues in this litigation. Accordingly,

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similar to Plaintiffs’ first request for injunctive relief, Keegan maintains their second request for injunctive relief is premature.
It is well settled that jurisdictional questions should be resolved before considering the merits of injunctive relief. See Leitner v. U.S., 679 F.Supp.2d 37, 40 (D.D.C. 2010); In Re Any and All Funds or Other Assets in Brown Brothers Harriman & Co., 601 F.Supp.2d 252, 253 (D.D.C. 2009); Bancoult v. McNamara, 227 F.Supp.2d 144 (D.D.C. 2002). Therefore, prior to deciding Plaintiff’s second motion, this Court should decide the threshold question of whether it has jurisdiction over this litigation by ruling on the outstanding Motion to Dismiss. Liberty Mut. Ins. Co. v. Wetzel, 424 U.S. 737, 740, 96 S.Ct. 1202, 47 L.Ed.2d 435 (1976); Cobell v. Norton, 240 F.3d 1081, 1094 (D.C. Cir. 2001). See 11A C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure § 2941, p. 35 (2d ed. 1995)(“[Rule 65] assumes the district court has already acquired jurisdiction and that venue is proper.”) Until such time as this Court rules on Keegan’s motion to dismiss, Plaintiffs’ repeated requests for a temporary restraining order and preliminary injunction are premature and should be denied. V. PLAINTIFFS ARE NOT ENTITLED TO INJUNCTIVE RELIEF UNDER FED. R.
CIV.P. 65 A. Standard for Injunctive Relief Plaintiffs’ Second Motion, like their First Motion, fails to satisfy the requisite showing for injunctive relief at this stage of the litigation. Injunctions are extraordinary forms of judicial relief which courts should grant sparingly. Mazurek v. Armstrong, 520 U.S. 968, 972, 117 S.Ct. 1865, 138 L.Ed.2d 162 (1997). It is not a form of relief granted lightly. Ambach v. Bell, 686 F.2d 974, 979 (D.C. Cir. 1982). Rather, only when the movant demonstrates (1) a substantial likelihood of success on the merits; (2) it would suffer irreparable injury if the injunction is not granted; (3) an injunction would not substantially injure other interested parties; and (4) the

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public interest would be furthered by the injunction should such relief be granted. Mova Pharm.

Corp. v. Shalala, 140 F.3d 1060, 1066 (D.C. Cir. 1998)(quoting CityFed Fin. Corp. v. Office of Thrift Supervision, 58 F.3d 738, 746 (D.C. Cir. 1995).8 These factors “interrelate on a sliding

scale and must be balanced against each other.” Serono Labs., Inc. v. Shalala, 158 F.3d 1313,

1318 (D.C. Cir. 1998). Of significant importance in this analysis is the requirement for the

movant to demonstrate a substantial likelihood of success on the merits. Cf. Benton v. Kessler,

505 U.S. 1084, 1085, 112 S.Ct. 2929, 120 L.Ed.2d 926 (1992)(per curiam). Absent a

“substantial indication” of likely success on the merits, “there would be no justification for the

court’s intrusion into the ordinary processes of administration and judicial review.” Am. Bankers

Ass’n v. Nat’l Credit Union Admin., 38 F.Supp.2d 114, 140 (D.D.C. 1999)(internal quotation omitted).9

B. Plaintiffs Cannot Prove A Substantial Likelihood of Success on the Merits

This Court has already found Plaintiffs cannot prove a substantial likelihood of success

on the merits. To support their claim of success on the merits, Plaintiffs rely solely on the

Court’s dicta in its Memorandum Opinion that the Road Home formula may have a disparate

8

Certain types of preliminary injunctions are disfavored: (1) preliminary injunctions that alter the status quo;

(2) mandatory preliminary injunctions; and, (3) preliminary injunctions that give the movant all the relief it would

be entitled to if it prevailed in a full trial. O Centro Espirita Beneficiente Uniao Do Vegetal v. Ashcroft, 389 F.3d 973, 975 (10th Cir. 2004), affirmed, 546 U.S. 418, 126 S.Ct. 1211, 163 L.Ed.2d 1017 (2006). In these cases, a party

seeking a preliminary injunction “must meet a higher standard than in the ordinary case by showing ‘clearly’ that he

or she is entitled to relief or that ‘extreme or very serious damage’ will result from the denial of the injunction.”

Veitch v. Danzig, 135 F.Supp.2d 32, 35 (D.D.C. 2001).

9

Similar to their First Motion, Plaintiffs’ Second Motion does not seek to maintain the status quo, rather it is

tailored to have the opposite effect. The status quo would be to allow OCD to complete the Road Home Program to

assist Louisiana homeowners by completing the processing of the Road Home grant applications and appeals

remaining, awarding and disbursing compensation grants, awarding and disbursing Additional Compensation Grants

(ACG) in an amount over the original $50,000 cap pursuant to Action Plan Amendment 39, and by proposing and

seeking HUD approval for a construction loan program as described in Action Plan Amendment 43.

It is clear from the overly broad wording of Plaintiffs’ proposed order, they are requesting a “freeze” all of

OCD’s functions at this time, thus putting an end to the flow of federal recovery money to the State of Louisiana by

asking this Court to enjoin Keegan “from using the pre-storm value of a beneficiary’s home as a criterion to

calculate or disburse any further initial grant awards to beneficiaries of the Road Home Program, which Defendant

administers.” (Rec. Doc. 62-2.) Plaintiffs should be required to meet the higher standard than in the ordinary case

by showing they are ‘clearly’ entitled to relief and/or that ‘extreme or very serious damage’ will result from the

denial of the injunction.

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impact. However, this Court has not yet ruled on Keegan’s motion to dismiss or determined that the Fair Housing Act even applies to Plaintiff’s claims.10 Moreover, Plaintiffs have not proven

their disparate impact claim with any competent evidence.

Disparate impact claims “involve. . . practices that are facially neutral in their treatment

of different groups but that in fact fall more harshly on one group than another and cannot be

justified by business necessity.” Anderson v. Zubieta, 180 F.3d 329 (D.C. Cir. 1999), citing

International Bhd. Of Teamsters v. United States, 431 U.S. 324, 336 n. 15, 97 S.Ct. 1843, 52

L.Ed.2d 396 (1977). This Court has identified four factors for determining whether conduct that

produces a disparate impact violates the FHA: (1) the strength of the plaintiffs’ showing of

discriminatory effect; (2) whether any evidence indicates discriminatory intent; (3) the

defendant’s interest on taking the challenged actions; and, (4) whether the plaintiffs seek to

compel the defendant to affirmatively provide housing to a protected class or merely to restrain

the defendant from interfering with individual property owners who wish to provide such

housing. 2922 Sherman Avenue Tenants’ Association v. District of Columbia, 444 F.3d 673, 680

(D.C. Cir. 2006). Once plaintiffs demonstrate that the challenged practice has a disproportionate

impact, the burden shifts to the defendant “to prove that its actions furthered, in theory and in

practice, a legitimate, bona fide governmental interest and that no alternative would serve that

interest with less discriminatory effect.” Id.; see also, National Fair Housing Alliance, Inc. v.

Prudential Insurance Company of America, 208 F.Supp.2d 46 (D.D.C. 2002)(“Courts have

applied the basic burden-shifting scheme used to review disparate impact clams brought under

10

Keegan renews her argument the Fair Housing Act does not supply Plaintiffs with a cognizable claim since

the Road Home Program at issue is a compensation grant program, rather than a housing program, and Keegan did

not “make unavailable or deny . . . a dwelling to any person because of race,” “discriminate against any person in

the terms, conditions or privileges of sale or rental of a dwelling, or in the provision of services or facilities in

connection therewith, because of race,” participate in any “real estate-related transactions,” or administer “housing-

related programs” as defined in the Fair Housing Act, 42 U.S.C. §§ 3604(a)-(b) , 3605(a), 3608(d), 3608(e)(5). In

addition, Plaintiffs have still not addressed their claims under the Housing and Community Development Act of

1974, 42 U.S.C. § 5304(b)(2).

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Title VII, 42 U.S.C. § 1973(c), to disparate impact claims brought pursuant to FHA.”) Under both the four-factor and burden-shifting approaches, this Court requires “proof of disproportionate impact.” 2922 Sherman Avenue Tenants’ Association, 444 F.3d at 680. “To prevail on a disparate impact claim, a plaintiff must offer sufficient evidence to support a finding that the challenged policy actually disproportionately affected a protected class.” 2922 Sherman Avenue Tenants’ Association, 444 F.3d at 681.
Typically, a showing of disparate impact is made through the submission of statistical evidence by an expert that compares the relevant populations and the effect of the practice at issue. Menokan v. Blair, 2006 WL 1102809, at *2 (D.D.C. April 26, 2006). Disparate impact discrimination is proven by showing disparities in excess of 1.96 standard deviations under a two-tailed test of statistical significance. Anderson, 108 F.3d 329 at 339-40. In support of their Second Motion, Plaintiffs failed to submit any real statistical evidence or the opinion of an expert economist or statistician that indicates the effect of the practice at issue (the formula used for Option 1 compensation grants) has a disparate impact on African American eligible homeowners in Orleans Parish as compared to Caucasian eligible homeowners in Orleans Parish.11 Further, Plaintiffs have offered no admissible or reliable evidence the alleged disparities are in excess of 1.96 standard deviations. Without such reliable statistical proof, Plaintiffs are unable to show any likelihood on the success of the merits of this case.
The Court’s dicta made in connection with Plaintiffs’ First Motion was not based upon a complete review of the merits of Plaintiffs’ disparate impact claim.12 Rather, the Court’s opinion was based upon a flawed PolicyLink report which contained incomplete and outdated data. Notwithstanding, the Court’s dicta at the preliminary injunctive stage are not binding and do not

11

Plaintiffs’ First Motion was likewise devoid of this type of statistical support.

12

Dicta is an opinion by a court on a question that is directly involved, briefed, and argued by counsel, and

even passed on by the court, but that is not essential to the decision. Black’s Law Dictionary 485 (8th ed. 2007)

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form the “law of the case” as Plaintiffs suggest.13 Univ. of Texas v. Camenisch, 451 U.S. 390, 395, 101 S.Ct. 1830, 68 L.Ed.2d 175 (1981) (“[F]indings of fact and conclusions of law made by a court granting a preliminary injunction are not binding at trial on the merits.”); Nutrition Inst. v. Block, 749 F.2d 50, 56 (D.C.Cir. 1984) (“[A] tentative assessment made to support the issuance of a preliminary injunction pending resolution of the issue ... is not even law of the case, much less res judicata in other litigation”). As of the date of Plaintiffs’ Second Motion, there is no competent evidence supporting this Court’s “finding” the Road Home formula may have a disparate impact. To the contrary, the evidence shows no disparate impact.
1. Plaintiffs’ Evidence is Flawed To support their First Motion, Plaintiffs relied on a 2008 report prepared by PolicyLink to prove disparate impact discrimination. In their Second Motion, Plaintiffs continue to rely on conclusions from the PolicyLink report, using the Court’s dicta based on the report, to support their claim the remaining 179 Road Home applicants are of risk of being discriminated against absent injunctive relief. However, as demonstrated herein, the PolicyLink is flawed in several aspects and it does not provide any direct comparisons of the outcomes for African-Americans and Caucasians who are in the higher income group, nor anything specific to the 179 AfricanAmerican homeowners who may be awarded an Option 1 grant, but who have not yet received any funds from the Road Home Program. Primarily, the PolicyLink report is based on incomplete data. (See Exhibit A, Declaration of Janet R. Thornton, Ph.D.) The PolicyLink Report is based on data for Option 1 Road Home

13

None of the cases cited by Plaintiffs involve a challenge to findings made during preliminary injunctive

proceedings. Kimberline v. Quinlan, 199 F.3d 496 (D.C.Cir. 1999)(law of the case doctrine addressed during §1983

action and appeal of denial of summary judgment); Does I through III v. District of Columbia, 593 F.Supp.2d 115

(D.D.C. 2009)(when a case is appealed and remanded the decision of the Court of Appeals establishes the law of the

case which the trial court must follow on remand).

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applicants who received a monetary grant as of June 26, 2008, and whose transactions were recorded in the database upon which the authors relied. (Exhibit A, ¶ 7.) The report shows, statewide14, the number of closed applications was 84,114 as of June 26, 2008. (Id.) As of July 15, 2010, however, there were 117,298 applicants who received Road Home Program grants under Option 1. (Id.) The PolicyLink Report failed to include approximately 30% of the Louisiana grants that have now been awarded. (Id.)
As of June 26, 2008, the number of New Orleans closed applications was 31,347. This is only 58.1% of the total number of applications citywide. (Exhibit A, ¶ 8.) The percent of New Orleans applications that closed by June 26, 2008 varied by neighborhood. (Id.) The Lower 9th Ward had the lowest percentage closed at 53.9% and Gentilly had the highest percentage closed at 66.6%. (Id.) Given that nearly 42% of the New Orleans applications are not included in the PolicyLink Report and nearly 30% of all closed applications were not included, the PolicyLink Report is not reliable to assess any validity to Plaintiffs’ allegation of race discrimination in the distribution of Road Home Option 1 grants to Orleans Parish homeowners. (Id.)
In addition, the PolicyLink Report does not even focus on the group of homeowners who are the focus of Plaintiffs’ claim. Rather, it is primarily based on grants awarded to homeowners in all income categories and is not restricted to those in the higher income category (i.e., above LMI). (Exhibit A, ¶ 9.) As a result, the 2008 report does not provide any information that can be used to determine whether African-American recipients in the higher income category, those persons for whom Plaintiffs now seek relief, were adversely impacted by the way in which the LRA distributed Option 1 funds. (Id.)

14

The Road Home program was designed as a state-wide program for thirty-seven parishes. It is not designed

solely for Orleans Parish.

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Secondly, the PolicyLink report understates the value of the grants some homeowners actually received as of mid-2010. (Exhibit A, ¶ 10.) In 2009, the LRA amended the formula and removed the $50,000 cap on the Additional Compensation Grants (ACGs) for LMI homeowners. (Id.) Effective January 2010, applicants in this income bracket became eligible for additional grant awards up to the estimated cost of damage or up to the maximum grant of $150,000, even if the applicant did not possess flood and/or hazard insurance. (Id.) These extra funds likely eliminated any gap between the estimated cost of repairing/rebuilding and the total resources available for such purposes for those whose income was at or below 80% of the area median income. (Id.) Notably, Plaintiffs concede that LMI homeowners became entitled to grants based on the full cost of repair (up to $150,000).15
As of July 2010, 42% of the Option 1 closed applications were from LMI households and, across all closings, 41% were African-American. (Exhibit A, ¶ 11.) Given that in Orleans Parish there is generally a strong correlation between LMI status and being African-American, a large portion of the African-American grant recipients are likely LMI households. (Id.) For example, in 2010, among the Orleans Parish Census Tracts severely impacted by Hurricanes Katrina and Rita, approximately 82% of the families in the LMI category are African-American. (Id.) Considering this data, a large portion of the African-American recipients included in the PolicyLink Report are not likely to be part of the subset of recipients on which Plaintiffs have now focused their claim. (Id.) Further, a substantially larger percentage of African-Americans than Caucasians in the Orleans Parish neighborhoods that suffered the greatest storm damage are in the LMI category. (Id.) Therefore, the removal of the cap on ACGs likely reduced or may have eliminated any potential adverse impact on African-American recipients as a group. (Id.)
15 See Rec. Doc. 50, p. 17, fn. 9; Rec. Doc. 58, pps. 2-3 (Plaintiffs’ admit the removal of the cap on ACGs eliminated any potential adverse impact on African-Americans whose income is 80% or less of the area median income.)

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Further, the PolicyLink report does not provide any information that can be used to the evaluate Plaintiffs’ claim of adverse impact on the subset of individuals at issue. (Exhibit A, ¶ 12.) The PolicyLink Report includes no statistical analysis of differences between the AfricanAmerican and Caucasian gaps among higher income homeowners – the category on which Plaintiffs now focus. (Id.) The PolicyLink Report shows the gap between the total resources available and the estimated cost of damage for LMI and higher income homeowners, as well as the gaps for select neighborhoods in Orleans Parish. (Id.) These June 2008 calculations reveal that, on average, the gap is larger among LMI than higher income homeowners, and is larger for homeowners in predominately African-American neighborhoods than predominately Caucasian neighborhoods. (Id.) If the PolicyLink Report included the ACGs and the additional ACGs (“AACG”) that these LMI homeowners received, the gaps shown for the LMI group, AfricanAmericans and predominately African-American low income neighborhoods, would be substantially smaller than the report suggests. (Id.)
Thirdly, even if the PolicyLink report had included complete data, the gaps between total resources to finance rebuilding and the estimated cost of repairs are likely inaccurate because the damage estimates are not based on actual repair cost. (Exhibit A, ¶ 13.) According to The Road Home’s Frequent Questions for Homeowners, the estimated cost of damage is based on modest rebuilding standards. If the dwelling sustained less than 51% damage, the cost was estimated on a component-by-component basis. If the home was torn down or sustained more than 51% damage, the estimated cost of repair was calculated by multiplying $130 by the total number of square feet in the home plus other costs. Therefore, the gaps for homeowners whose actual costs of repair were higher than the modest estimates are understated. (Id.) If higher income and Caucasian homeowners were more likely to have actual repair costs in excess of their estimated

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damage, then the PolicyLink comparisons of the gaps between income or racial groups exaggerate the disparity, if any existed. (Id.)
Finally, in order to determine whether African-American recipients as a group were adversely impacted by the LRA’s distribution of Option 1 grants, an inferential statistical analysis must be conducted. (Exhibit A, ¶ 14.) In this case, the analysis should compare the proportion of non-LMI African-American and Caucasian recipients whose grants were based on the pre-storm value of the home. (Id.) If these proportions are statistically similar, then the data indicate that the policy is neutral with respect to the race of these homeowners. (Id.) If the proportions are not statistically similar, then the analyst can determine if the gap between African-American and Caucasian recipients is statistically significant. (Exhibit A, ¶ 15.) The calculation of the gap should account for insurance payments and FEMA grants as well as the penalty for the lack of insurance. (Id.) The results of such an analysis can be used to determine whether the high income African-Americans were adversely impacted by the formula that LRA used to distribute Option 1 grants to applicants with income above the LMI threshold. (Id.)
The PolicyLink report relied upon by Plaintiffs is unequivocally incomplete, outdated, and fails to include the additional compensation grants to low/moderate income recipients. The report is devoid of any reliable information to evaluate whether the formula utilized by the LRA has an adverse impact on the African-American Option 1 recipients or 179 potential recipients with income levels above the low/moderate income threshold. (Exhibit A, ¶ 16.) The report should be disregarded in its entirety.
2. Sovereign Immunity Concerns Exists The Court did not deny Plaintiff’s First Motion solely because of sovereign immunity concerns. Several grounds formed the basis of the denial: Plaintiffs failed to demonstrate a

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Case 1:08-cv-01938-HHK Document 69 Filed 08/04/10 Page 26 of 33

likelihood of success; the Court’s lacked authority to grant the ultimate relief sought by

Plaintiffs; state funds, not federal funds were involved; Plaintiffs failed to show irreparable harm;

there was a likelihood of third party injury, and public interest weighed in favor of both parties.

(Rec. Doc. 61). Plaintiffs’ Second Motion should not change this Court’s analysis, as Plaintiffs

continue to fail to meet the requisite showing justifying injunctive relief at this stage of the

litigation.

Notably, Plaintiffs attempt to circumvent sovereign immunity concerns by citing the

Court’s suggestion it “would” have jurisdiction to enjoin Keegan from continuing to administer

the Road Home Program in an unlawful manner. However, as demonstrated above, the Court’s

dicta the formula at issue may be discriminatory was based on incomplete, outdated and flawed

data.

In addition, sovereign immunity concerns remain viable, even for the “179” remaining

applicants for whom Plaintiffs seek relief. Of the original 179 applicants, as of July 31, 2010, an

additional 38 applicants have received grants. (Exhibit B, Declaration of Lara Robertson.) Their

grants have been calculated and dispersed. Accordingly, any relief ordered by this Court for

those applicants would be retroactive and impermissible.

Therefore, while Keegan opposes any injunctive relief concerning the “179” applicants,

as the funds involved are state, not federal funds, by no means can this Court order retroactive

relief for any applicants, including, the 38 applicants identified above, whose grants have already been calculated and/or dispersed.16

3. There is no Risk of Irreparable Harm

“[T]he basis of injunctive relief in the federal courts has always been irreparable harm,”

Sampson v. Murray, 415 U.S. 61, 88, 94 S.Ct. 937, 39 L.Ed.2d 166 (1974). A court may deny a

16

See Rec. Doc. 52.

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Case 1:08-cv-01938-HHK Document 69 Filed 08/04/10 Page 27 of 33
motion for a preliminary injunction and not address the remaining three factors where a plaintiff fails to establish irreparable harm. CityFed Fin. Corp. v. Office of Thrift Supervision, 58 F.3d 738, 747 (D.C.Cir.1995). To be irreparable, an injury must be “certain and great,” “actual and not theoretical,” and “of such imminence that there is a clear and present need for equitable relief to prevent irreparable harm.” Id. A mere showing of “possible” injury is insufficient. Winter v. Nat. Res. Def. Council, Inc., --- U.S. ----, 129 S.Ct. 365, 375, 172 L.Ed.2d 249 (2008) (a plaintiff must “demonstrate that irreparable injury is likely in the absence of an injunction,” and not a mere “possibility”); Wisconsin Gas Co. v. FERC, 758 F.2d 669, 674 (D.C.Cir. 1985) (per curiam) (irreparable harm is shown only where a plaintiff's injury is “both certain and great” rather than “theoretical”).
The purported “narrow subset” of Road Home applicants for whom Plaintiffs seek relief do not face irreparable harm as there is only a mere possibility any of these applicants will ever meet eligibility requirements and/or receive Road Home grants. Of the remaining 141 applicants, 2 applicants are no longer eligible to receive a Road Home grant because they failed to meet the program deadline of November 1, 2008. (Exhibit B, ¶5(a).) Fifty-four (54) applicants have failed to maintain communications with the program staff and it is unknown whether they have a continued interest in receiving a Road Home grant. (Exhibit B, ¶5(c).) Sixty-nine (69) applicants face eligibility issues relating to documentation evidencing their ownership of the property. (Exhibit B, ¶5(d).) Thirteen (13) applicants face eligibility issues relating to documentation evidencing their occupancy of the property. (Exhibit B, ¶5(e).) Another three (3) applicants have other eligibility issues relating to either ownership and/or occupancy issues. (Exhibit B, ¶5(b).)

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Case 1:08-cv-01938-HHK Document 69 Filed 08/04/10 Page 28 of 33
The Office of Community Development has established a deadline of August 16, 2010 by which applicants must contact the program staff and provide missing documentation and schedule a closing date, which must occur prior to October 1, 2010. (Exhibit B, ¶5.) It is anticipated that a substantial portion of the remaining applicants will no longer be eligible for a Road Home grant once the August 16, 2010 deadline passes. (Id.)
In addition, it is undisputed there are sufficient funds in reserve and set-aside to pay any eligible pending grant applications. Primarily, and contrary to the position taken by the Plaintiffs in their Second Motion for Temporary Restraining Order and Preliminary Injunction, no “surplus” of monies exist from which this Court can take funds to disperse to the “subset” of applicants identified by the Plaintiffs, i.e., those individuals who comprise the approximate 141 pending Road Home applications of identified African American homeowners in Orleans Parish who opted for Option 1 and are above low-to-moderate levels of income. (Exhibit C, Declaration of Robin Keegan.)
The remaining funding of the various types of grants under the Road Home program and the expenses associated with administration and completion of the program is through an appropriation from the U.S. Congress under Public Law 110-116. (Exhibit C, ¶ 6.) Following budgeted amounts for payment of homeowner compensation grants, additional compensation grants, elevation incentive grants, “sold home” grants, payment of costs associated with rehabilitation of acquired properties, administrative expenses of the Louisiana Land Trust, among others, there remains from that appropriation approximately $150 million which is restricted by law for use in the Road Home program. (Id.) As there continue to be a number of Road Home grant recipients that, due to a variety of reasons, have unmet needs which have prevented them from completing recovery from Hurricanes Katrina and Rita, to further assist

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Case 1:08-cv-01938-HHK Document 69 Filed 08/04/10 Page 29 of 33

such Road Home grant recipients the State has prepared Action Plan Amendment 43 (APA43), which was submitted to the United States Department of Housing and Urban Development on July 1, 2010. (Id.) Through APA43, the remaining funds of the appropriation under PL110-116 shall be utilized in construction lending programs. (Id.) This proposed activity would be combined with other programs that the OCD has developed to support Option 1 families to rebuild their homes. (Id.)
Notwithstanding, as this Court has already found, Plaintiffs’ allegations of irreparable injury are a crisis of their own making as they waited more than 4 years to bring their motion. A party cannot claim irreparable harm if the “injury is of their own making.” See Carollo v. Herman, 84 F.Supp.2d 374, 378-79 (E.D.N.Y. 2000); Citibank , N.A. v. Citytrust, 756 F.2d 273, 276 (2nd Cir. 1985); Fiba Leasing Company, Inc. v. Airdyne Industries, Inc., 826 F.Supp. 38, 39 (D. Mass. 1993)(“A preliminary injunction movant does not satisfy the irreparable harm criterion when the alleged harm is self-inflicted.”) “It [is] elementary that a party may not claim equity in his own defaults.” Long v. Robinson, 432 F.2d 977, 981 (4th Cir. 1970), affirm’d, 436 F.2d 1116 (4th Cir. 1971). Plaintiffs’ lawsuit was filed on November 12, 2008. (Rec. Doc. 1.) As of November 12, 2008, there were 119,647 applications with funding disbursed and $7.3 billions dollars total funding disbursed. However, Plaintiffs waited more than 20 months to file this motion on behalf of an alleged “narrow subset” of individuals – persons they declined to represent at the hearing on their first motion. (Rec. Doc. 50.) Plaintiffs have never explained the reasons for this unreasonable delay. Such delay justifies the denial of Plaintiffs’ request for preliminary injunction.17

17

See Majorica,, S.A. v. R.H. Macy & Co., 762 F.2d 7, 8 (2nd Cir. 1985)(lack of due diligence in pursuing

injunction may, standing alone, preclude the grant of injunctive relief); Gianni Cereda Favrics, Inc. v. Bazaar

Fabrics, Inc., 335 F.Supp. 278, 280 (S.D.N.Y. 1971)(seven month delay reason to deny injunctive relief); Asdourian

v. Konstantin, 50 F.Supp.2d 152 (E.D.N.Y. 1999)(four month delay between filing suit and seeking injunction

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Case 1:08-cv-01938-HHK Document 69 Filed 08/04/10 Page 30 of 33
Plaintiffs’ argument there is a risk of irreparable harm for the “179” Road Home beneficiaries who have not received initial grants again is based entirely on this Court’s preliminary “finding” the formula may be discriminatory stemming from a flawed PolicyLink report. There is no evidence the formula has a disparate impact; as such, there is no evidence the remaining applicants face a risk of irreparable harm. Plaintiffs’ request for injunctive relief should be denied.
4. Injunctive Relief Would Injure Other Interested Parties and Would Not Further the Public Interest
Keegan has provided overwhelming evidence showing no disparate impact in the use of the Road Home formula. She has provided overwhelming evidence refuting any risk of irreparable harm. Similarly, there is no justification for injunctive relief as the final two factors, harm to other interested parties and public interest, weigh against Plaintiffs. Stopping the flow of the Road Home Program in its final stages, after nearly five years of operation, during which time these Plaintiffs took no action whatsoever, would injure those remaining parties awaiting receipt of their grants. In addition, public interest in Louisiana favors completing the Road Home grant process. It does not favor a cessation of operations or a complete overhaul of the program in the final stages, particularly, when there is no evidence of disparate impact and Plaintiffs’ request for relief is supported only by a PolicyLink report comprised of outdated and incomplete data.

undermined the plaintiffs’ claim of irreparable harm); Commer v. McEntee, 2001 WL 274125 (S.D.N.Y. March 19, 2001)(denying plaintiff’s temporary restraining order and preliminary injunction when plaintiff had been on notice of the alleged violation and failed to act for 4 months); Allston v. Lewis, 480 F.Supp. 328, 333 (D.S.C. 1979)(denying plaintiff’s motion for preliminary injunction as plaintiff waited eleven months between the complained of harm and filing suit).

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Case 1:08-cv-01938-HHK Document 69 Filed 08/04/10 Page 31 of 33
Plaintiffs’ requested relief is exceedingly broad18 and would put an abrupt stop to the
disbursement of any and all funds to the eligible homeowners under the Road Home Program
before there has been any judicial finding the formula at issue is discriminatory, and at a time
where the final stages have commenced in an effort to complete the disbursement under the
program to anyone who remains eligible. The relief Plaintiffs seek must be denied.
VI. CONCLUSION
Robin Keegan, in her capacity as Executive Director of the LRA, respectfully requests
Plaintiffs’ second motion for a temporary restraining order and preliminary injunction be denied
for the reasons stated hereinabove.
Respectfully submitted,
/s/ A.J. Krouse A.J. KROUSE (La. Bar #14426) RENEE CULOTTA (La. Bar #24436) SUZANNE M. RISEY (La. Bar #25488) FRILOT L.L.C. 1100 Poydras Street, 37th Floor New Orleans, LA 70163 Telephone: (504) 599-8016 Facsimile: (504) 599-8116 akrouse@frilot.com rculotta@frilot.com srisey@frilot.com

and TIMOTHY E. HEFFERNAN (D.C. Bar #422923)

18

The Proposed Order attached to Plaintiffs’ motion demonstrates the overly broad nature of relief they seek.

Plaintiffs are asking this Court to enjoin Keegan from using the pre-storm value of a beneficiary’s home as a

criterion to calculate or disburse any further initial grant awards to beneficiaries of the Road Home Program, which

Defendant administers. By virtue of this language, it is clear Plaintiffs are seeking relief on behalf of all

beneficiaries, not solely the “179” they now purport to represent.

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Case 1:08-cv-01938-HHK Document 69 Filed 08/04/10 Page 32 of 33

WATT, TIEDER, HOFFAR & FITZGERALD, L.L.P. 8405 Greensboro Drive, Suite 100 McLean, Virginia 22102 Telephone: (703) 749-1000 Facsimile: (703) 893-8028 theffern@WTHF.com
ATTORNEYS FOR PAUL RAINWATER, EXECUTIVE DIRECTOR OF THE LOUISIANA RECOVERY AUTHORITY CERTIFICATE OF SERVICE
I hereby certify that on August 4, 2010, a copy of the foregoing document was filed
electronically via the Court’s ECF system, through which a notice of the filing will be sent to:
Joseph Marc Sellers, Esq. Jenny R. Yang, Esq.
Cohen Milstein Sellers & Toll, PLLC 1100 New York Avenue, NW, Suite 500
Washington, DC 20005-3934 (202) 408-4600
jsellers@cmht.com jyang@cohenmilstein.com lgreen@cohenmilstein.com
Damon T. Hewitt, Esq. Debo P. Adegbile, Esq. Matthew Colangelo, Esq. ReNika C. Moore, Esq. NAACP Legal Defense & Educational Fund, Inc. 99 Hudson Street, 16th Floor New York, NY 10013
(212) 965-2200 dhewitt@naacpldf.org dadegbile@naacpldf.org mcolangelo@naacpldf.org rmoore@naacpldf.org
Attorneys for Plaintiff
James D. Todd, Jr., Esq. Michael F. Hertz, Esq. Channing D. Phillips, Esq.

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Case 1:08-cv-01938-HHK Document 69 Filed 08/04/10 Page 33 of 33
Michael Sitcov, Esq. U.S. Department of Justice 20 Massachusetts Ave., N.W. Washington, D.C. 20001
(202) 514-3378 james.todd@usdoj.gov
Attorneys for U.S. Department of Housing and Urban Development
/s/ A. J. Krouse

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33

 
 Case 1:08-cv-01938-HHK Document 85 Filed 12/30/10 Page 1 of 2

~nite!t ~tates QIourt of J\ppeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 10·5309
Greater New Orleans Fair Housing Action Center, et aI.,
Appellees
v.
United States Department of Housing & Urban Development,
Appellee Robin Keegan, in her official capacity as Executive Director of the Louisiana Recovery Authority,
Appellant

September Term 2010
1:08-cv-01938-HHK Filed On: December 29,2010

BEFORE: Ginsburg, Tatel, and Brown, Circuit Judges
ORDER
Upon consideration of the motion to dismiss, or in the alternative, to hold the case in abeyance, the response thereto, and the reply, it is
ORDERED that, to the extent appellant Keegan seeks to appeal the district court's partial denial of her motion to dismiss on the basis of Eleventh Amendment immunity, consideration of the motion to dismiss be deferred in part pending further order of the court. It is
FURTHER ORDERED that, to the extent Keegan seeks review of the district court's denial of her motion to transfer or the determination that the plaintiffs have stated a claim for relief under the Fair Housing Act, the motion to dismiss be granted in part. These issues are not proper for the court's exercise of pendent appellate jurisdiction under the standards articulated in Kilburn v. Socialist People's Libyan Arab

Case 1:08-cv-01938-HHK Document 85 Filed 12/30/10 Page 2 of 2

~nite~ ~tate5 QIourt of J\ppeal5
FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 10·5309

September Term 2010

Jamahiriya, 376 F.3d 1123, 1134-35 (D.C. Cir. 2004), or in KiSKA Construction Corp. v. WMATA, 167 F.3d 608, 611 (D.C. Cir. 1999). It is
FURTHER ORDERED that the remainder of this appeal be held in abeyance pending further order of the court. The parties are directed to file motions to govern further proceedings in this case within 30 days of this court's disposition of NO.1 05257, et aI., Greater New Orleans Fair Housing Action Center, et aI., v. HUD, et al.
Pursuant to D.C. Circuit Rule 36, this disposition will not be published. The Clerk is directed to withhold issuance of the mandate herein until resolution of the remainder of the appeal.
Per Curiam

2

 
 Case 1:08-cv-01938-HHK Document 101 Filed 07/08/11 Page 1 of 4

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, et al.,

Plaintiffs,

v.

No. 1:08-cv-1938-HHK

UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, et al.,

Defendants.

NOTICE OF DISMISSAL NOW COME Plaintiffs, Greater New Orleans Fair Housing Action Center, the National Fair Housing Alliance, Gloria Burns, Rhonda Dents, Almarie Ford, Daphne Jones, and Edward Randolph, pursuant to Fed. R. Civ. P. 41(a)(1)(A), and file this Notice of Dismissal of the abovestyled action. Plaintiffs state as follows: 1. Plaintiffs filed their Complaint on November 12, 2008, Dkt. 1., alleging racial discrimination in the “Road Home” program – the single largest housing recovery program in U.S. history – due to the use of pre-storm market value as a criterion to determine grant awards. 2. After the Complaint was filed, Defendants U.S. Department of Housing and Urban Development (“HUD”) and Robin Keegan, Executive Director of the Louisiana Office of Community Development1 (“Louisiana”) changed the Road Home program grant formula to provide full relief to over 13,000 low- and moderate-income homeowners, totaling $473 million.
1 Robin Keegan was formerly the Executive Director of the Louisiana Recovery Authority and was later named Executive Director of the Office of Community Development (“OCD”), a unit of the Division of Administration in the State of Louisiana and successor agency to the Louisiana Recovery Authority. On November 19, 2010, Keegan left her position with OCD. Pat Forbes is the interim Executive Director of OCD.

Case 1:08-cv-01938-HHK Document 101 Filed 07/08/11 Page 2 of 4
Through supplemental grants, these individuals received relief tantamount to the full relief they could have received had their initial grants been based upon the estimated cost of damage to their homes, rather than the lower pre-storm market value of their homes.
3. After additional settlement negotiations, the parties fully executed a settlement agreement to resolve this action on July 7, 2011. In the settlement agreement, HUD and the Louisiana agreed to further amend the Road Home program to (a) offer supplemental rebuilding grants totaling up to $62 million to certain non low- and moderate-income homeowners whose initial grant awards were based upon the pre-storm market value of their homes and who have been unable to rebuild their homes; and (b) grant up to a one-year extension of the deadline for homeowners to re-occupy their homes.
4. Defendants HUD and Louisiana have neither served an answer nor a motion for summary judgment in this action.
5. By virtue of this Notice, Plaintiffs dismiss their claims against Defendants HUD and Keegan with prejudice.2
WHEREFORE, in light of the Settlement Agreement reached by all parties, Plaintiffs, pursuant to Rule 41(a)(1)(A), file this Notice dismissing the instant action without need of further Order of this Court.
Dated: July 8, 2011
2 Pursuant to Stipulation by Plaintiffs and HUD, and a subsequent order of this Court, the deadline for class certification was extended until six months after the close of discovery. See Dkt Nos. 15 and 16. As the action did not mature to the class certification stage, the Settlement Agreement and Notice of Dismissal are intended to bind only the parties thereto (the named Plaintiffs in this action, Defendant HUD, and Defendant Louisiana), and does not waive, compromise, or extinguish the rights of any absent members of the putative class, including the right to bring an action against HUD or Louisiana seeking the same or different relief as the Plaintiffs did in the instant action.
2

Case 1:08-cv-01938-HHK Document 101 Filed 07/08/11 Page 3 of 4

Respectfully submitted,
/s/ Damon T. Hewitt John Payton, Director-Counsel (D.C. Bar No. 282699) Damon T. Hewitt (admitted Pro Hac Vice) ReNika C. Moore (admitted Pro Hac Vice) NAACP LEGAL DEFENSE & EDUCATIONAL FUND, INC. 99 Hudson Street, 16th Floor New York, NY 10013 (p) 212-965-2200 / (fax) 212-226-7592 jpayton@naacpldf.org
/s/ Craig Goldblatt WILMER HALE Craig Goldblatt (D.C. Bar No. 449229) Randall Weinstein (D.C. Bar No. 996192) 1875 Pennsylvania Avenue, NW Washington DC 20006 202-663-6006 (t) 202-663-6363 (f) cgoldblatt@wilmer.com
Attorneys for Plaintiffs

/s/ Joseph M. Sellers Joseph M. Sellers (D.C. Bar No. 318410) Jenny R. Yang (D.C. Bar No. 484874) Peter Romer-Friedman (D.C. Bar No. 993376) COHEN MILSTEIN SELLERS & TOLL PLLC 1100 New York Avenue, NW, Suite 500 Washington, D.C. 20005 (p) 202-408-4600 / (fax) 202-408-4699 jsellers@cohenmilstein.com
/s/ Morgan Williams Morgan Williams (admitted Pro Hac Vice) Greater New Orleans Fair Housing Action Center 404 S. Jeff Davis Pkwy New Orleans, LA 70119 (504) 596-2100, ext. 104 (t) (504) 708-2476 (f) mwilliams@gnofairhousing.org

3

Case 1:08-cv-01938-HHK Document 101 Filed 07/08/11 Page 4 of 4

CERTIFICATE OF SERVICE
I hereby certify that on July 1, 2011, the foregoing document was filed electronically with the Court’s ECF system, through which a copy was served on:

Allen J. Krouse, III

Jam

Renee G. Culotta

U.S.

Suzanne M. Risey

FRILOT L.L.C.

Washington,

1100 Poydras Street

Telephone:

Suite 3600

Facsim

New Orleans, LA 70163

Em

Telephone: 504-599-8004

Facsimile: 504-599-8104

Email: akrouse@frilot.com

Email: rculotta@frilot.com

Email: srisey@frilot.com

Attorneys for Defendant Executive Director of the Office of Community Development State of Louisiana

Attorney of

es D. Todd DEPARTMENT OF JUSTICE 20 Massachusetts Avenue, N.W.
DC 20001 202-514-3378 ile: 202- 616-8470 ail: james.todd@usdoj.gov
for Defendant United States Department
Housing and Urban Development

4

 
 Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 1 of 21
CLOSED,STAYED,TYPE−L
U.S. District Court District of Columbia (Washington, DC) CIVIL DOCKET FOR CASE #: 1:08−cv−01938−HHK

GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER et al v. UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT et al Assigned to: Judge Henry H. Kennedy Case in other court: U. S. Court of Appeals − DC Circuit,
10−05257
U. S. Court of Appeals − DC Circuit, 10−05269
USCA, 10−05309 Cause: 42:405 Fair Housing Act
Plaintiff

Date Filed: 11/12/2008 Date Terminated: 07/14/2011 Jury Demand: None Nature of Suit: 443 Civil Rights: Accommodations Jurisdiction: U.S. Government Defendant

GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER

represented by Danielle Yvette Conley WILMER CUTLER PICKERING HALE &DORR 1875 Pennsylvania Avenue, NW Washington, DC 20006 (202) 663−6006 Email: danielle.conley@wilmerhale.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jenny R. Yang COHEN MILSTEIN SELLERS &TOLL PLLC 1100 New York Avenue, NW Suite 500 West Washington, DC 20005 (202) 408−4600 Fax: (202) 408−4699 Email: jyang@cohenmilstein.com LEAD ATTORNEY

Joseph M. Sellers COHEN MILSTEIN SELLERS &TOLL PLLC 1100 New York Avenue, NW Suite 500 West Washington, DC 20005 (202) 408−4604 Fax: (202) 408−4699 Email: jsellers@cohenmilstein.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Peter Romer−Friedman COHEN, MILSTEIN, SELLERS &TOLL Suite 500 1100 New York Avenue NW Washington, DC 20005 (202) 408−3645 Email: promerfriedman@cohenmilstein.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Damon T. Hewitt NAACP LEGAL DEFENSE

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 2 of 21
&EDUCATIONAL FUND, INC. 99 Hudson Street Suite 1600 New York, NY 10013 (212) 965−2257 Fax: (212) 219−2052 Email: dhewitt@naacpldf.org PRO HAC VICE ATTORNEY TO BE NOTICED
Daniel Tenny U.S. DEPARTMENT OF JUSTICE Civil Division, Appellate Staff 950 Pennsylvania Avenue, NW Room 7215 Washington, DC 20530 (202) 514−1838 Email: daniel.tenny@usdoj.gov TERMINATED: 07/06/2009
Debo P. Adegbile NAACP LEGAL DEFENSE &EDUCATIONAL FUND, INC. 99 Hudson Street Suite 1600 New York, NY 10013 (212) 965−2249 Fax: (212) 226−7592 Email: dadegbile@naacpldf.org ATTORNEY TO BE NOTICED
Llezlie Green Coleman COHEN MILSTEIN SELLERS &TOLL PLLC 1100 New York Avenue, NW Suite 500 West Washington, DC 20005 (202) 408−4600 Fax: (202) 408−4699 Email: lgreen@cohenmilstein.com TERMINATED: 08/16/2010
M. Lucia Blacksher GREATER N EW ORLEANS FAIR HOUSING ACTION CENTER 228 St. Charles Avenue, Suite 1035 New Orleans, LA 70130 (504) 208−5050 Email: lblacksher@gnofairhousing.org TERMINATED: 05/27/2009 PRO HAC VICE ATTORNEY TO BE NOTICED
Matthew Colangelo U.S. DEPARTMENT OF JUSTICE 950 Pennsylvania Avenue, NW Room 5637 Washington, DC 20530 (202) 514−5441 Email: matthew.colangelo@usdoj.gov TERMINATED: 01/14/2010 PRO HAC VICE ATTORNEY TO BE NOTICED

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 3 of 21

ReNika C. Moore NAACP LEGAL DEFENSE &EDUCATIONAL FUND, INC. 99 Hudson Street Suite 1600 New York, NY 10013 (212) 965−2234 Fax: (212) 226−7592 Email: rmoore@naacpldf.org PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff
NATIONAL FAIR HOUSING ALLIANCE

represented by Danielle Yvette Conley (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jenny R. Yang (See above for address) LEAD ATTORNEY

Joseph M. Sellers (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Peter Romer−Friedman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Damon T. Hewitt (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Daniel Tenny (See above for address) TERMINATED: 07/06/2009

Debo P. Adegbile (See above for address) ATTORNEY TO BE NOTICED

Llezlie Green Coleman (See above for address) TERMINATED: 08/16/2010

M. Lucia Blacksher (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Matthew Colangelo (See above for address) TERMINATED: 01/14/2010 PRO HAC VICE ATTORNEY TO BE NOTICED

ReNika C. Moore (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 4 of 21

Plaintiff GLORIA BURNS
Plaintiff RHONDA DENTS

represented by Danielle Yvette Conley (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Jenny R. Yang (See above for address) LEAD ATTORNEY
Joseph M. Sellers (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Peter Romer−Friedman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Damon T. Hewitt (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Daniel Tenny (See above for address) TERMINATED: 07/06/2009
Debo P. Adegbile (See above for address) ATTORNEY TO BE NOTICED
Llezlie Green Coleman (See above for address) TERMINATED: 08/16/2010
M. Lucia Blacksher (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Matthew Colangelo (See above for address) TERMINATED: 01/14/2010 PRO HAC VICE ATTORNEY TO BE NOTICED
ReNika C. Moore (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
represented by Danielle Yvette Conley (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Jenny R. Yang (See above for address) LEAD ATTORNEY

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 5 of 21

Joseph M. Sellers (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Peter Romer−Friedman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Damon T. Hewitt (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Daniel Tenny (See above for address) TERMINATED: 07/06/2009

Debo P. Adegbile (See above for address) ATTORNEY TO BE NOTICED

Llezlie Green Coleman (See above for address) TERMINATED: 08/16/2010

M. Lucia Blacksher (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Matthew Colangelo (See above for address) TERMINATED: 01/14/2010 PRO HAC VICE ATTORNEY TO BE NOTICED

ReNika C. Moore (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff ALMARIE FORD

represented by Danielle Yvette Conley (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jenny R. Yang (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Joseph M. Sellers (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Peter Romer−Friedman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 6 of 21

Damon T. Hewitt (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Daniel Tenny (See above for address) TERMINATED: 07/06/2009

Debo P. Adegbile (See above for address) ATTORNEY TO BE NOTICED

Llezlie Green Coleman (See above for address) TERMINATED: 08/16/2010 ATTORNEY TO BE NOTICED

M. Lucia Blacksher (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Matthew Colangelo (See above for address) TERMINATED: 01/14/2010 PRO HAC VICE ATTORNEY TO BE NOTICED

ReNika C. Moore (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff DAPHNE JONES

represented by Danielle Yvette Conley (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jenny R. Yang (See above for address) LEAD ATTORNEY

Joseph M. Sellers (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Peter Romer−Friedman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Damon T. Hewitt (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Daniel Tenny (See above for address) TERMINATED: 07/06/2009

Debo P. Adegbile

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 7 of 21

(See above for address) ATTORNEY TO BE NOTICED

Llezlie Green Coleman (See above for address) TERMINATED: 08/16/2010

M. Lucia Blacksher (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Matthew Colangelo (See above for address) TERMINATED: 01/14/2010 PRO HAC VICE ATTORNEY TO BE NOTICED

ReNika C. Moore (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff
EDWARD RANDOLPH on behalf of themselves and all others similarly situated

represented by Danielle Yvette Conley (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jenny R. Yang (See above for address) LEAD ATTORNEY

Joseph M. Sellers (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Peter Romer−Friedman (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Damon T. Hewitt (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Daniel Tenny (See above for address) TERMINATED: 07/06/2009

Debo P. Adegbile (See above for address) ATTORNEY TO BE NOTICED

Llezlie Green Coleman (See above for address) TERMINATED: 08/16/2010

M. Lucia Blacksher (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 8 of 21

Matthew Colangelo (See above for address) TERMINATED: 01/14/2010 PRO HAC VICE ATTORNEY TO BE NOTICED
ReNika C. Moore (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

V. Defendant UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Defendant

represented by Allen J. Krouse , III FRILOT L.L.C. 1100 Poydras Street Suite 3600 New Orleans, LA 70163 (504) 599−8016 Fax: (504) 599−8116 Email: akrouse@frilot.com LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
James D. Todd , Jr. U.S. DEPARTMENT OF JUSTICE Civil Division, Federal Programs Branch 20 Massachusetts Avenue, N.W. Washington, DC 20001 (202) 514−3378 Fax: (202) 616−8470 Email: james.todd@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED
Renee G. Culotta FRILOT, LLC 1100 Poydras Street 36th Floor New Orleans, LA 70163 (504) 599−8085 Fax: (504) 599−8267 Email: rculotta@frilot.com LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
Suzanne M. Risey FRILOT, LLC 1100 Poydras Street 36th Floor New Orleans, LA 70163 (504) 599−8231 Fax: (504) 599−8264 Email: srisey@frilot.com LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 9 of 21

PAUL RAINWATER In his Official Capacity as Executive Director of the Louisiana Recovery Authority TERMINATED: 06/02/2010

represented by Timothy Edward Heffernan WATT, TIEDER, HOFFAR &FITZGERALD, L.L.P. 8405 Greensboro Drive Suite 100 McLean, VA 22102 (703) 749−1000 Fax: (703) 893−8029 Email: theffern@wthf.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Allen J. Krouse , III (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Renee G. Culotta (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Suzanne M. Risey (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Defendant
ROBIN KEEGAN in his official capacity as Executive Director of the Lousiana Recovery Authority

represented by Allen J. Krouse , III (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Renee G. Culotta (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Suzanne M. Risey (See above for address) ATTORNEY TO BE NOTICED

Date Filed 11/12/2008
11/12/2008 11/12/2008 11/12/2008 11/17/2008

# Docket Text
1 COMPLAINT against UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, PAUL RAINWATER ( Filing fee $ 350, receipt number 4616016220) filed by DAPHNE JONES, EDWARD RANDOLPH, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, NATIONAL FAIR HOUSING ALLIANCE, GLORIA BURNS, RHONDA DENTS, ALMARIE FORD. (Attachments: # 1 Civil Cover Sheet)(tr) (Entered: 11/13/2008)
2 Corporate Disclosure Statement by GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER. (tr) (Entered: 11/13/2008)
3 Corporate Disclosure Statement by NATIONAL FAIR HOUSING ALLIANCE. (tr) (Entered: 11/13/2008)
SUMMONS Issued(4) as to UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, PAUL RAINWATER, U.S. Attorney and U.S. Attorney General (tr) (Entered: 11/13/2008)
4 NOTICE of Appearance by Daniel Tenny on behalf of all plaintiffs (Tenny, Daniel) (Entered: 11/17/2008)

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 10 of 21

11/17/2008 11/17/2008 11/17/2008
11/18/2008
11/19/2008 11/19/2008 01/07/2009 01/07/2009 01/08/2009 01/08/2009 01/13/2009 01/13/2009

5 NOTICE of Appearance by Llezlie Lloren Green on behalf of all plaintiffs (Green, Llezlie) (Entered: 11/17/2008)
6 NOTICE of Firm Name Change by DAPHNE JONES, EDWARD RANDOLPH, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, NATIONAL FAIR HOUSING ALLIANCE, GLORIA BURNS, RHONDA DENTS, ALMARIE FORD (Tenny, Daniel) (Entered: 11/17/2008)
7 MOTION for Leave to Appear Pro Hac Vice :Attorney Name− M. Lucia Blacksher, :Firm− Greater New Orleans Fair Housing Action Center, :Address− 228 St. Charles Avenue, STE 1035, New Orleans, LA 70130. Phone No. − 504−208−5050. Motion For Pro Hac Vice Admission of M. Lucia Blacksher by DAPHNE JONES, EDWARD RANDOLPH, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, NATIONAL FAIR HOUSING ALLIANCE, GLORIA BURNS, RHONDA DENTS, ALMARIE FORD (Attachments: # 1 Declaration of M. Lucia Blacksher, # 2 Proposed Order)(Green, Llezlie) (Entered: 11/17/2008)
8 MOTION for Leave to Appear Pro Hac Vice :Attorney Name− Debo Adegbile, Matthew Colangelo, Damon T. Hewitt, Renika C. Moore, :Firm− NAACP Legal Defense and Educational Fund, Inc., :Address− 99 Hudson Street, 16th Floor, New York, NY 10013. Phone No. − 212−965−2200. Motion for Pro Hac Vice Admission by DAPHNE JONES, EDWARD RANDOLPH, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, NATIONAL FAIR HOUSING ALLIANCE, GLORIA BURNS, RHONDA DENTS, ALMARIE FORD (Attachments: # 1 DECLARATION OF DEBO ADEGBILE, # 2 DECLARATION OF MATTHEW COLANGELO, # 3 DECLARATION OF DAMON T. HEWITT, # 4 DECLARATION OF RENIKA C. MOORE, # 5 PROPOSED ORDER)(Green, Llezlie) (Entered: 11/18/2008)
MINUTE ORDER granting 7 Motion for Pro Hac Vice Admission of M. Lucia Blacksher. Ms. Blacksher is admitted pro hac vice to appear in this matter on behalf of plaintiffs. Signed by Judge Henry H. Kennedy, Jr. on November 19, 2008. (NP) (Entered: 11/19/2008)
MINUTE ORDER granting 8 Motion for Pro Hac Vice Admission. Debo P. Adegbile, Matthew Colangelo, Damon T. Hewitt, and ReNika C. Moore are admitted pro hac vice to appear in this matter on behalf of plaintiffs. Signed by Judge Henry H. Kennedy, Jr. on November 19, 2008. (NP) (Entered: 11/19/2008)
9 NOTICE of Appearance by James D. Todd on behalf of UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (Todd, James) (Entered: 01/07/2009)
10 Consent MOTION for Extension of Time to Respond to Plaintiffs' Complaint by UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (Attachments: # 1 Text of Proposed Order)(Todd, James) (Entered: 01/07/2009)
MINUTE ORDER granting 10 Consent Motion for Extension of Time for Defendant U.S. Department of Housing and Urban Development to Respond to Plaintiffs' Complaint. Accordingly, defendant's response to plaintiffs' complaint is due on February 12, 2009. Signed by Judge Henry H. Kennedy, Jr. on January 8, 2009. (NP) (Entered: 01/08/2009)
Defendant's answer is due on February 12, 2009. Signed by Judge Henry H. Kennedy, Jr. on January 8, 2009. (NP) (Entered: 01/08/2009)
11 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed on Attorney General. Date of Service Upon Attorney General 11/14/2008. (Tenny, Daniel) (Entered: 01/13/2009)
12 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed as to the US Attorney. UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT served on 11/14/2008, answer due 2/12/2009 (Tenny, Daniel) (Entered: 01/13/2009)

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 11 of 21

01/13/2009
02/06/2009 02/09/2009 02/09/2009 02/10/2009 02/11/2009 02/20/2009 02/23/2009 02/23/2009 02/24/2009
02/24/2009 03/06/2009
03/06/2009
03/06/2009

13 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed as to UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT served on served on 11/14/2008, answer due 2/12/2009(Tenny, Daniel) Modified on 1/13/2009 to include service and answer dates(tr). (Entered: 01/13/2009)
14 Consent MOTION for Extension of Time to Respond to Plaintiffs' Complaint (Second Request) by UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (Attachments: # 1 Text of Proposed Order)(Todd, James) (Entered: 02/06/2009)
MINUTE ORDER granting 14 Consent Motion for a Second Extension of Time for Defendant U.S. Department of Housing and Urban Development to Respond to Plaintiffs' Complaint. Defendant's answer is due February 20, 2009. Signed by Judge Henry H. Kennedy, Jr. on February 9, 2009. (NP) (Entered: 02/09/2009)
RESET DEADLINES. The Department of Housing and Urban Development's answer is due February 20, 2009. Signed by Judge Henry H. Kennedy, Jr. on February 9, 2009. (NP) (Entered: 02/09/2009)
15 STIPULATION To Extent Deadline To Seek Class Certification by GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER. (Attachments: # 1 Proposed Order)(Sellers, Joseph) (Entered: 02/10/2009)
16 ORDER extending deadline for seeking class certification. Signed by Judge Henry H. Kennedy, Jr. on February 11, 2009. (NP) (Entered: 02/11/2009)
17 Consent MOTION for Extension of Time to Respond to Plaintiffs' Complaint (Third Request) by UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (Attachments: # 1 Text of Proposed Order)(Todd, James) (Entered: 02/20/2009)
18 NOTICE Of Attorney Name Change by GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER (Coleman, Llezlie) (Entered: 02/23/2009)
19 NOTICE Of Firm Name Change by GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER (Coleman, Llezlie) (Entered: 02/23/2009)
MINUTE ORDER granting 17 Consent Motion for a Third Extension of Time for Defendant U.S. Department of Housing and Urban Development to Respond to Plaintiffs' Complaint. Defendant U.S. Department of Housing and Urban Development's Answer is due on March 6, 2009. Signed by Judge Henry H. Kennedy, Jr. on February 24, 2009. (NP) (Entered: 02/24/2009)
RESET DEADLINES. The Department of Housing and Urban Development's answer is due March 6, 2009. Signed by Judge Henry H. Kennedy, Jr. on February 24, 2009. (NP) (Entered: 02/24/2009)
20 MOTION for Leave to Appear Pro Hac Vice :Attorney Name− Suzanne Marie Risey, Allen J. Krouse, III, Renee Gluth Culotta, :Firm− Frilot L.L.C., :Address− 1100 Poydras Street, 36th Floor, New Orleans, LA 70163. Phone No. − 504−599−8016. Fax No. − 504−599−8116 by PAUL RAINWATER (Attachments: # 1 Declaration Declaration of Suzanne Marie Risey, # 2 Declaration Declaration of Allen J. Krouse, III, # 3 Declaration Declaration of Renee Gluth Culotta, # 4 Text of Proposed Order Proposed Order Granting Pro Hac Vice Admissions)(Heffernan, Timothy) (Entered: 03/06/2009)
21 Consent MOTION for Extension of Time to File Response/Reply by PAUL RAINWATER (Attachments: # 1 Text of Proposed Order Granting Motion for Extension of Time for Defendant Paul Rainwater, Executive Director of the Louisiana Recovery Authority to Respond to Plaintiffs' Complaint)(Heffernan, Timothy) (Entered: 03/06/2009)
MINUTE ORDER granting 20 Motion for Pro Hac Vice Admissions. Allen J. Krouse, III, Renee Gluth Culotta, and Suzanne Marie Risey are admitted pro hac vice to appear in this matter on behalf of defendants. Signed by Judge Henry H. Kennedy, Jr. on March 6, 2009. (NP) (Entered: 03/06/2009)

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 12 of 21

03/06/2009 03/06/2009 03/06/2009
03/10/2009 03/11/2009 03/11/2009 03/11/2009
03/20/2009
03/23/2009 03/25/2009 03/25/2009 05/05/2009
05/14/2009 05/18/2009

MINUTE ORDER granting 21 Consent Motion for Extension of Time for Defendant to Respond to Plaintiff's Complaint. Accordingly, defendants' answer is due April 6, 2009. Signed by Judge Henry H. Kennedy, Jr. on March 6, 2009. (NP) (Entered: 03/06/2009)
RESET DEADLINE: Defendants' answer is due April 6, 2009. Signed by Judge Henry H. Kennedy, Jr. on March 6, 2009. (NP) (Entered: 03/06/2009)
22 MOTION to Dismiss for Lack of Jurisdiction and for Failure to State a Claim by UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (Attachments: # 1 Declaration of Jessie Handforth Kome in Support of Motion to Dismiss, # 2 Text of Proposed Order)(Todd, James) (Entered: 03/06/2009)
23 ENTERED IN ERROR.....RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed. GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER served on 2/16/2009, answer due 3/9/2009 (Coleman, Llezlie) Modified on 3/11/2009 (jf, ). (Entered: 03/10/2009)
NOTICE OF CORRECTED DOCKET ENTRY: Document No. re 23 Summons Returned Executed was entered in error and counsel was instructed to refile said pleading as to the correct party served. (jf, ) (Entered: 03/11/2009)
24 ENTERED IN ERROR.....RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed. PAUL RAINWATER served on 2/16/2009, answer due 4/6/2009 (Coleman, Llezlie) Modified on 3/11/2009 (tr). (Entered: 03/11/2009)
NOTICE OF ERROR re 24 Summons Returned Executed; emailed to lgreen@cohenmilstein.com, cc'd 14 associated attorneys −− The PDF file you docketed contained errors: 1. Incorrect document/case, 2. Please refile document, 3. Counsel is advised to refile return of service with proper documentation (tr, ) (Entered: 03/11/2009)
25 STIPULATION Regarding Scheduling by DAPHNE JONES, EDWARD RANDOLPH, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, NATIONAL FAIR HOUSING ALLIANCE, GLORIA BURNS, RHONDA DENTS, ALMARIE FORD. (Attachments: # 1 Text of Proposed Order)(Tenny, Daniel) (Entered: 03/20/2009)
26 ORDER granting Stipulation Regarding Scheduling. Signed by Judge Henry H. Kennedy, Jr. on March 23, 2009. (NP) (Entered: 03/23/2009)
Reset Deadlines: Answer due by 5/6/2009; Response to Dispositive Motions due by 6/5/2009. (tj ) (Entered: 03/25/2009)
27 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed as to PAUL RAINWATER served on 2/16/2009, answer due date 4/6/2009. (Coleman, Llezlie) Modified on 3/26/2009 to correct docket text to reflect document filed (tr). (Entered: 03/25/2009)
28 MOTION to Dismiss, MOTION to Transfer Case by PAUL RAINWATER (Attachments: # 1 Memorandum in Support, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C, # 5 Text of Proposed Order regarding Motion to Dismiss, # 6 Text of Proposed Order regarding Motion to Transfer)(Culotta, Renee) (Entered: 05/05/2009)
29 Consent MOTION for Extension of Time to File Response/Reply as to 28 MOTION to Dismiss MOTION to Transfer Case by UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (Attachments: # 1 Text of Proposed Order)(Todd, James) (Entered: 05/14/2009)
MINUTE ORDER granting 29 Consent Motion for Extension of Time for Defendant U.S. Department of Housing and Urban Development to Respond to 28 Motion to Dismiss and Motion to Transfer. Defendant U.S. Department of Housing and Urban Development must file any response on or before June 12, 2009. Signed by Judge Henry H. Kennedy, Jr. on May 18, 2009. (lchhk1) (Entered: 05/18/2009)

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 13 of 21

05/19/2009 05/27/2009 06/03/2009
06/04/2009
06/05/2009 06/05/2009
06/11/2009 07/02/2009 07/02/2009 07/06/2009 07/06/2009 07/08/2009

30 NOTICE of Appearance by Jenny R. Yang on behalf of all plaintiffs (Yang, Jenny) (Entered: 05/19/2009)
31 NOTICE OF WITHDRAWAL OF APPEARANCE as to GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER. Attorney M. Lucia Blacksher terminated. (Blacksher, M.) (Entered: 05/27/2009)
32 Unopposed MOTION Leave to File Consolidated Response Not to Exceed 65 Pages re 22 MOTION to Dismiss for Lack of Jurisdiction and for Failure to State a Claim, 28 MOTION to Dismiss MOTION to Transfer Case by DAPHNE JONES, EDWARD RANDOLPH, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, NATIONAL FAIR HOUSING ALLIANCE, GLORIA BURNS, RHONDA DENTS, ALMARIE FORD (Attachments: # 1 Text of Proposed Order)(Tenny, Daniel) (Entered: 06/03/2009)
MINUTE ORDER granting 32 Unopposed Motion to File Consolidated Memorandum in Response to Motions to Dismiss and Motion to Transfer. Accordingly, plaintiffs may file a single consolidated response to 22 Defendant U.S. Department of Housing and Urban Development's Motion to Dismiss and 28 Defendant Paul Rainwater's Motion to Dismiss and Motion to Transfer, not to exceed 65 pages. Signed by Judge Henry H. Kennedy, Jr. on June 4, 2009. (lchhk1) (Entered: 06/04/2009)
33 Memorandum in opposition to re 28 MOTION to Dismiss MOTION to Transfer Case filed by UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. (Attachments: # 1 Text of Proposed Order)(Todd, James) (Entered: 06/05/2009)
34 Memorandum in opposition to re 22 MOTION to Dismiss for Lack of Jurisdiction and for Failure to State a Claim, 28 MOTION to Dismiss MOTION to Transfer Case filed by DAPHNE JONES, EDWARD RANDOLPH, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, NATIONAL FAIR HOUSING ALLIANCE, GLORIA BURNS, RHONDA DENTS, ALMARIE FORD. (Attachments: # 1 Text of Proposed Order, # 2 Exhibit List, # 3 Exhibit A 2005 Act, # 4 Exhibit B. 2006 Act, # 5 Exhibit C 2007 Act, # 6 Exhibit D Feb 13 2006 Regulation, # 7 Exhibit E Oct 30 2006 Regulation, # 8 Exhibit F Dec 11 2007 Regulation, # 9 Exhibit G Aug 8 2008 Regulation, # 10 Exhibit H Appeals and Second Disbursements, # 11 Exhibit I Filing an Appeal)(Sellers, Joseph) (Entered: 06/05/2009)
35 STIPULATION re 34 Memorandum in Opposition,, to Extend Time for Defendants' Replies by UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. (Attachments: # 1 Text of Proposed Order)(Todd, James) (Entered: 06/11/2009)
36 Unopposed MOTION for Leave to File Excess Pages by PAUL RAINWATER (Attachments: # 1 Text of Proposed Order)(Culotta, Renee) (Entered: 07/02/2009)
37 MOTION to Withdraw as Attorney (Daniel Tenny) by DAPHNE JONES, EDWARD RANDOLPH, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, NATIONAL FAIR HOUSING ALLIANCE, GLORIA BURNS, RHONDA DENTS, ALMARIE FORD (Attachments: # 1 Text of Proposed Order)(Tenny, Daniel) (Entered: 07/02/2009)
MINUTE ORDER granting 36 Unopposed Joint Motion to Exceed Page Limitation for Defendants, Paul Rainwater and U.S. Department of Housing and Urban Development (HUD). Accordingly, defendant Rainwater may exceed the page limitation of his reply brief by an additional fifteen pages and defendant HUD may exceed the page limitation of its reply brief by an additional five pages. Signed by Judge Henry H. Kennedy, Jr. on July 6, 2009. (lchhk1) (Entered: 07/06/2009)
ORDER granting 37 Motion of Withdrawal as Attorney for Daniel Tenny. Attorney Tenny is terminated from this case. Signed by Judge Henry H. Kennedy, Jr. on July 6, 2009. (lchhk1) (Entered: 07/06/2009)
38 REPLY to opposition to motion re 22 MOTION to Dismiss for Lack of Jurisdiction and for Failure to State a Claim filed by UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. (Todd, James) (Entered:

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 14 of 21

07/08/2009 07/10/2009 07/23/2009
08/06/2009
08/07/2009
08/10/2009 01/14/2010 03/03/2010 05/24/2010 05/27/2010 06/01/2010 06/01/2010

07/08/2009)
39 REPLY to opposition to motion re 28 MOTION to Dismiss MOTION to Transfer Case filed by PAUL RAINWATER. (Attachments: # 1 Exhibit D)(Culotta, Renee) (Entered: 07/08/2009)
40 ERRATA by UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 38 Reply to opposition to Motion filed by UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. (Attachments: # 1 Errata Corrected Copy of Reply)(Todd, James) (Entered: 07/10/2009)
41 MOTION for Hearing re 22 MOTION to Dismiss for Lack of Jurisdiction and for Failure to State a Claim, 28 MOTION to Dismiss MOTION to Transfer Case by DAPHNE JONES, EDWARD RANDOLPH, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, NATIONAL FAIR HOUSING ALLIANCE, GLORIA BURNS, RHONDA DENTS, ALMARIE FORD (Attachments: # 1 Text of Proposed Order)(Sellers, Joseph) (Entered: 07/23/2009)
42 Unopposed MOTION for Extension of Time to File Response/Reply as to 41 MOTION for Hearing re 22 MOTION to Dismiss for Lack of Jurisdiction and for Failure to State a Claim, 28 MOTION to Dismiss MOTION to Transfer Case MOTION for Hearing re 22 MOTION to Dismiss for Lack of Jurisdiction and for Failure to State a Claim, 28 MOTION to Dismiss MOTION to Transfer Case by UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (Attachments: # 1 Text of Proposed Order)(Todd, James) (Entered: 08/06/2009)
43 Memorandum in opposition to re 41 MOTION for Hearing re 22 MOTION to Dismiss for Lack of Jurisdiction and for Failure to State a Claim, 28 MOTION to Dismiss MOTION to Transfer Case MOTION for Hearing re 22 MOTION to Dismiss for Lack of Jurisdiction and for Failure to State a Claim, 28 MOTION to Dismiss MOTION to Transfer Case filed by UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. (Attachments: # 1 Text of Proposed Order)(Todd, James) (Entered: 08/07/2009)
MINUTE ORDER granting nunc pro tunc 42 Unopposed Motion for Extension of Time for Defendant U.S. Department of Housing and Urban Development to File Opposition to Plaintiffs' Motion for a Hearing. Signed by Judge Henry H. Kennedy, Jr. on August 10, 2009. (lchhk1) (Entered: 08/10/2009)
44 NOTICE OF WITHDRAWAL OF APPEARANCE as to GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, DAPHNE JONES, NATIONAL FAIR HOUSING ALLIANCE, EDWARD RANDOLPH. Attorney Matthew Colangelo terminated. (Colangelo, Matthew) (Entered: 01/14/2010)
MINUTE ORDER denying 41 Plaintiffs' Motion for an Oral Hearing on Defendants' Motions to Dismiss and Transfer. Signed by Judge Henry H. Kennedy, Jr. on March 3, 2010. (NP) (Entered: 03/03/2010)
45 ORDER scheduling a hearing on the parties' motions to dismiss on June 4, 2010, at 3:00 pm, to address issues specified in the Court's Order. Signed by Judge Henry H. Kennedy, Jr. on May 24, 2010. (NP) (Entered: 05/24/2010)
46 Unopposed MOTION to Continue and/or Reset Hearing by PAUL RAINWATER (Attachments: # 1 Text of Proposed Order)(Culotta, Renee) (Entered: 05/27/2010)
47 NOTICE of Appearance by Peter Romer−Friedman on behalf of GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, DAPHNE JONES, NATIONAL FAIR HOUSING ALLIANCE, EDWARD RANDOLPH (Romer−Friedman, Peter) (Entered: 06/01/2010)
48 NOTICE of Appearance by Danielle Yvette Conley on behalf of GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, DAPHNE JONES, NATIONAL FAIR HOUSING ALLIANCE, EDWARD RANDOLPH (Conley, Danielle) (Entered: 06/01/2010)

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 15 of 21

06/02/2010 06/02/2010 06/02/2010
06/03/2010
06/04/2010 06/07/2010 06/07/2010 06/09/2010 06/09/2010 06/10/2010

MINUTE ORDER granting 46 Unopposed Motion to Reset Hearing. The hearing scheduled to take place on Friday, June 4, 2010, is hereby continued and shall be rescheduled by the Court. Signed by Judge Henry H. Kennedy, Jr. on June 2, 2010. (NP) (Entered: 06/02/2010)
49 NOTICE of Substitution of Named Party (Rainwater) by GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, DAPHNE JONES, NATIONAL FAIR HOUSING ALLIANCE, EDWARD RANDOLPH (Moore, ReNika) (Entered: 06/02/2010)
50 MOTION for Temporary Restraining Order and a Preliminary Injunction by GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, DAPHNE JONES, NATIONAL FAIR HOUSING ALLIANCE, EDWARD RANDOLPH (Attachments: # 1 Memorandum in Support, # 2 Text of Proposed Order, # 3 Certificate of Counsel, # 4 List of Exhibits, # 5 Exhibit A, # 6 Exhibit B, # 7 Exhibit C, # 8 Exhibit D, # 9 Exhibit E, # 10 Exhibit F, # 11 Exhibit G, # 12 Exhibit H, # 13 Exhibit I, # 14 Exhibit J, # 15 Exhibit K, # 16 Exhibit L, # 17 Exhibit M, # 18 Exhibit N, # 19 Exhibit O, # 20 Exhibit P, # 21 Exhibit Q, # 22 Exhibit R, # 23 Exhibit S Part 1, # 24 Exhibit S Part 2, # 25 Exhibit T, # 26 Exhibit U, # 27 Exhibit V, # 28 Exhibit W, # 29 Exhibit X, # 30 Exhibit Y, # 31 Exhibit Z, # 32 Exhibit aa, # 33 Exhibit bb, # 34 Exhibit cc, # 35 Exhibit dd, # 36 Exhibit ee, # 37 Exhibit ff, # 38 Exhibit gg)(Sellers, Joseph). Added MOTION for Preliminary Injunction on 6/3/2010 (znmw, ). (Entered: 06/02/2010)
51 MOTION for Leave to Appear Pro Hac Vice :Attorney Name− Morgan Whitney Williams, :Firm− Greater New Orleans Fair Housing Action Center, :Address− 404 S. Jeff Davis Pkwy, New Orleans, LA 70119. Phone No. − (504) 596−2100, ext. 104. Fax No. − (504) 708−2476 by GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, DAPHNE JONES, NATIONAL FAIR HOUSING ALLIANCE, EDWARD RANDOLPH (Attachments: # 1 Declaration, # 2 Text of Proposed Order)(Romer−Friedman, Peter) (Entered: 06/03/2010)
52 CLARIFICATION OF THE COURT'S MAY 24, 2010 ORDER. Signed by Judge Henry H. Kennedy, Jr. on June 4, 2010. (NP) (Entered: 06/04/2010)
MINUTE ORDER granting 51 Motion for Pro Hac Vice Admission of Morgan Whitney Williams. Mr. Williams is hereby admitted pro hac vice to appear in this action on behalf of plaintiffs. Signed by Judge Henry H. Kennedy, Jr. on June 7, 2010. (NP) (Entered: 06/07/2010)
53 RESPONSE TO ORDER OF THE COURT re 52 Order Clarifying the Court's May 24, 2010 Order filed by GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, DAPHNE JONES, NATIONAL FAIR HOUSING ALLIANCE, EDWARD RANDOLPH. (Attachments: # 1 Exhibit Exhibit 1, # 2 Exhibit Exhibit 2, # 3 Exhibit Exhibit 3, # 4 Exhibit Exhibit 4)(Sellers, Joseph) (Entered: 06/07/2010)
54 MOTION for Extension of Time to File Response/Reply as to 50 MOTION for Temporary Restraining Order and a Preliminary Injunction MOTION for Preliminary Injunction by ROBIN KEEGAN (Attachments: # 1 Text of Proposed Order)(Culotta, Renee) (Entered: 06/09/2010)
55 Memorandum in opposition to re 54 MOTION for Extension of Time to File Response/Reply as to 50 MOTION for Temporary Restraining Order and a Preliminary Injunction MOTION for Preliminary Injunction filed by GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, DAPHNE JONES, NATIONAL FAIR HOUSING ALLIANCE, EDWARD RANDOLPH. (Sellers, Joseph) (Entered: 06/09/2010)
56 ORDER denying 54 Motion for Extension of Time for Defendant Robin Keegan, Executive Director of the Louisiana Recovery Authority, to respond to 50 Plaintiffs' Motion for a Temporary Restraining Order and Preliminary Injunction; setting a briefing schedule and hearing on 50 Plaintiffs' Motion for a Temporary Restraining Order and Preliminary Injunction. Signed by Judge Henry H. Kennedy,

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 16 of 21

06/14/2010 06/18/2010
06/25/2010 06/29/2010 06/30/2010 07/06/2010 07/21/2010 07/22/2010 07/23/2010 07/23/2010
07/23/2010

Jr. on June 10, 2010. (NP) (Entered: 06/10/2010)
57 Memorandum in opposition to re 50 MOTION for Temporary Restraining Order and a Preliminary Injunction MOTION for Preliminary Injunction filed by ROBIN KEEGAN. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E)(Culotta, Renee) (Entered: 06/14/2010)
58 REPLY to opposition to motion re 50 MOTION for Temporary Restraining Order and a Preliminary Injunction MOTION for Preliminary Injunction filed by GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, DAPHNE JONES, NATIONAL FAIR HOUSING ALLIANCE, EDWARD RANDOLPH. (Attachments: # 1 Affidavit Exhibit 1, # 2 Exhibit Exhibit A (Part 1) to Exhibit 1, # 3 Exhibit Exhibit A (Part 2) to Exhibit 1, # 4 Exhibit Exhibit A (Part 3) to Exhibit 1, # 5 Affidavit Exhibit A (Part 4) to Exhibit 1, # 6 Exhibit Exhibit 2)(Romer−Friedman, Peter) (Entered: 06/18/2010)
Minute Entry for proceedings held before Judge Henry H. Kennedy: Motion Hearing held on 6/25/2010 re 50 MOTION for Temporary Restraining Order and a Preliminary Injunction (Court Reporter: Annie Shaw.) (tj) (Entered: 06/28/2010)
59 ORDER denying 50 Plaintiffs' Motion for a Temporary Restraining Order and Preliminary Injunction. Signed by Judge Henry H. Kennedy, Jr. on June 29, 2010. (NP) (Entered: 06/29/2010)
60 MOTION to Withdraw as Attorney Motion Of Withdrawal As Attorney For Llezlie Green Coleman by GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER (Attachments: # 1 Proposed Order)(Coleman, Llezlie) (Entered: 06/30/2010)
61 MEMORANDUM OPINION setting forth the rationale for 59 the Court's order of June 29, 2010, which denied 50 Plaintiffs' Motion for a Temporary Restraining Order and Preliminary Injunction. Signed by Judge Henry H. Kennedy, Jr. on July 6, 2010. (NP) (Entered: 07/06/2010)
62 Second MOTION for Temporary Restraining Order, MOTION for Preliminary Injunction by GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, DAPHNE JONES, NATIONAL FAIR HOUSING ALLIANCE, EDWARD RANDOLPH (Attachments: # 1 Memorandum in Support, # 2 Text of Proposed Order)(Hewitt, Damon) (Entered: 07/21/2010)
63 MOTION for Extension of Time to File Response/Reply as to 62 Second MOTION for Temporary Restraining Order MOTION for Preliminary Injunction by ROBIN KEEGAN (Attachments: # 1 Text of Proposed Order)(Risey, Suzanne) (Entered: 07/22/2010)
64 ENTERED IN ERROR.....NOTICE of Appeal by GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, DAPHNE JONES, NATIONAL FAIR HOUSING ALLIANCE, EDWARD RANDOLPH (Moore, ReNika) Modified on 7/26/2010 (znmw, ). (Entered: 07/23/2010)
65 Memorandum in opposition to re 63 MOTION for Extension of Time to File Response/Reply as to 62 Second MOTION for Temporary Restraining Order MOTION for Preliminary Injunction filed by GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, DAPHNE JONES, NATIONAL FAIR HOUSING ALLIANCE, EDWARD RANDOLPH. (Attachments: # 1 Exhibit A (Pages from 6/25/10 hearing transcript), # 2 Exhibit B (Hewitt Aff.))(Moore, ReNika) (Entered: 07/23/2010)
66 ORDER denying 63 Defendant Robin Keegan's Motion for Extension of Time to File Response/Reply to Plaintiffs' Second Motion for a Temporary Restraining Order. Signed by Judge Henry H. Kennedy, Jr. on July 23, 2010. (lchhk1) (Entered: 07/23/2010)

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 17 of 21

07/26/2010 07/26/2010
07/27/2010 08/02/2010 08/04/2010 08/04/2010 08/11/2010 08/16/2010 08/16/2010 08/17/2010 08/18/2010 08/18/2010 08/19/2010

NOTICE OF ERROR re 64 Notice (Other); emailed to rmoore@naacpldf.org, cc'd 17 associated attorneys −− The PDF file you docketed contained errors: 1. Incorrect event used, 2. Please refile document, 3. Entered in Error; Refile as a Notice of Interlocutory Appeal (under Appeal Documents) and pay fee. (znmw, ) (Entered: 07/26/2010)
67 NOTICE OF INTERLOCUTORY APPEAL as to 61 Memorandum &Opinion, 59 Order on Motion for TRO, Order on Motion for Preliminary Injunction by GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, DAPHNE JONES, NATIONAL FAIR HOUSING ALLIANCE, EDWARD RANDOLPH. Filing fee $ 455, receipt number 0090−2247487. Fee Status: Fee Paid. Parties have been notified. (Moore, ReNika) (Entered: 07/26/2010)
68 Transmission of the Notice of Appeal, Order Appealed, and Docket Sheet to US Court of Appeals. The Court of Appeals fee was paid this date re 67 Notice of Interlocutory Appeal,. (znmw, ) (Entered: 07/27/2010)
USCA Case Number 10−5257 for 67 Notice of Interlocutory Appeal, filed by EDWARD RANDOLPH, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, NATIONAL FAIR HOUSING ALLIANCE, ALMARIE FORD, RHONDA DENTS, GLORIA BURNS, DAPHNE JONES. (znmw, ) (Entered: 08/02/2010)
69 Memorandum in opposition to re 62 Second MOTION for Temporary Restraining Order MOTION for Preliminary Injunction filed by ROBIN KEEGAN. (Attachments: # 1 Exhibit A − Declaration of Janet R. Thornton, # 2 Exhibit B − Declaration of Lara Robertson, # 3 Exhibit C − Declaration of Robin Keegan)(Krouse, Allen) (Entered: 08/04/2010)
70 MOTION to Stay Proceedings Pending Appeal by ROBIN KEEGAN (Attachments: # 1 Memorandum in Support, # 2 Text of Proposed Order)(Krouse, Allen) (Entered: 08/04/2010)
71 REPLY to opposition to motion re 62 Second MOTION for Temporary Restraining Order MOTION for Preliminary Injunction filed by GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, DAPHNE JONES, NATIONAL FAIR HOUSING ALLIANCE, EDWARD RANDOLPH. (Moore, ReNika) (Entered: 08/11/2010)
72 REVERSED PURSUANT TO USCA JUDGMENT FILED 3/29/11.....MEMORANDUM OPINION and ORDER granting 62 Second Motion for a Temporary Restraining Order and Preliminary Injunction and denying 70 Motion to Stay Proceedings Pending Appeal. Signed by Judge Henry H. Kennedy, Jr. on August 16, 2010. (NP) Modified on 3/30/2011 (smm). (Entered: 08/16/2010)
MINUTE ORDER granting 60 Motion of Withdrawal as Attorney for Llezlie Green Coleman. Attorney Llezlie Green Coleman is hereby terminated from this case. Signed by Judge Henry H. Kennedy, Jr. on August 16, 2010. (NP) (Entered: 08/16/2010)
73 ENTERED IN ERROR.....NOTICE OF APPEAL by ROBIN KEEGAN (Krouse, Allen) Modified on 8/18/2010 (znmw, ). (Entered: 08/17/2010)
NOTICE OF ERROR re 73 Notice (Other); emailed to akrouse@frilot.com, cc'd 15 associated attorneys −− The PDF file you docketed contained errors: 1. Incorrect event used, 2. Please refile document, 3. Entered in error; Please refile as a Notice of Appeal (under Appeal Documents) and pay fee. (znmw, ) (Entered: 08/18/2010)
74 NOTICE OF APPEAL as to 72 Order, Memorandum &Opinion by ROBIN KEEGAN. Filing fee $ 455, receipt number 0090−2270407. Fee Status: Fee Paid. Parties have been notified. (Krouse, Allen) (Entered: 08/18/2010)
75 Transmission of the Notice of Appeal, Order Appealed, and Docket Sheet to US Court of Appeals. The Court of Appeals fee was paid this date re 74 Notice of Appeal. (dr) (Entered: 08/19/2010)

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 18 of 21

08/20/2010 08/26/2010
09/07/2010 09/16/2010
09/20/2010 09/21/2010 09/22/2010 09/23/2010 09/27/2010 09/29/2010

USCA Case Number 10−5269 for 74 Notice of Appeal filed by ROBIN KEEGAN. (znmw, ) (Entered: 08/20/2010)
76 TRANSCRIPT OF PROCEEDINGS before Judge Henry H. Kennedy held on June 25, 2010; Page Numbers: 1−66. Court Reporter/Transcriber Annie Shaw, Telephone number 202 354−3242, Court Reporter Email Address : shawreporting@yahoo.com.<P></P>For the first 90 days after this filing date, the transcript may be viewed at the courthouse at a public terminal or purchased from the court reporter referenced above. After 90 days, the transcript may be accessed via PACER. Other transcript formats, (multi−page, condensed, CD or ASCII) may be purchased from the court reporter.<P>NOTICE RE REDACTION OF TRANSCRIPTS: The parties have twenty−one days to file with the court and the court reporter any request to redact personal identifiers from this transcript. If no such requests are filed, the transcript will be made available to the public via PACER without redaction after 90 days. The policy, which includes the five personal identifiers specifically covered, is located on our website at ww.dcd.uscourts.gov.<P></P> Redaction Request due 9/16/2010. Redacted Transcript Deadline set for 9/27/2010. Release of Transcript Restriction set for 11/24/2010.(Shaw, Annie) (Entered: 08/26/2010)
77 MEMORANDUM OPINION AND ORDER granting in part and denying in part 28 defendant Robin Keegan's motion to dismiss and denying 28 Keegan's motion to transfer. Signed by Judge Henry H. Kennedy, Jr. on September 7, 2010. (NP) (Entered: 09/07/2010)
78 MOTION for Order Clarifying the Court's August 16 Order Granting Plaintiffs' Second Motion for a Preliminary Injunction and Motion for an Immediate Entry of a Clarification Order or, in the Alternative, Expedited Briefing by GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, DAPHNE JONES, NATIONAL FAIR HOUSING ALLIANCE, EDWARD RANDOLPH (Attachments: # 1 Text of Proposed Order)(Romer−Friedman, Peter). Added MOTION to Expedite on 9/17/2010 (znmw, ). (Entered: 09/16/2010)
79 NOTICE OF APPEAL as to 77 Order, Memorandum &Opinion by ROBIN KEEGAN. Filing fee $ 455, receipt number 0090−2298098. Fee Status: Fee Paid. Parties have been notified. (Krouse, Allen) (Entered: 09/20/2010)
80 Transmission of the Notice of Appeal, Order Appealed, and Docket Sheet to US Court of Appeals. The Court of Appeals fee was paid this date re 79 Notice of Appeal. (dr) (Entered: 09/21/2010)
USCA Case Number 10−5309 for 79 Notice of Appeal filed by ROBIN KEEGAN. (rdj) (Entered: 09/22/2010)
81 ORDER setting deadlines regarding opposition to 78 Motion to Clarify the Court's August 16, 2010 Opinion and Order Granting Plaintiffs' Second Motion for a Preliminary Injunction and Plaintiffs' Motion for an Immediate Entry of Clarification Order or, in the Alternative, Expedited Briefing. Signed by Judge Henry H. Kennedy, Jr. on September 23, 2010.(lchhk1.) (Entered: 09/23/2010)
82 Memorandum in opposition to re 78 MOTION for Order Clarifying the Court's August 16 Order Granting Plaintiffs' Second Motion for a Preliminary Injunction and Motion for an Immediate Entry of a Clarification Order or, in the Alternative, Expedited Briefing MOTION to Expedite filed by ROBIN KEEGAN. (Krouse, Allen) (Entered: 09/27/2010)
83 REPLY to opposition to motion re 78 MOTION for Order Clarifying the Court's August 16 Order Granting Plaintiffs' Second Motion for a Preliminary Injunction and Motion for an Immediate Entry of a Clarification Order or, in the Alternative, Expedited Briefing MOTION to Expedite filed by GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, DAPHNE JONES, NATIONAL FAIR HOUSING ALLIANCE, EDWARD RANDOLPH. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3)(Moore, ReNika) (Entered: 09/29/2010)

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 19 of 21

10/04/2010 10/14/2010 12/30/2010
02/01/2011 02/09/2011 02/10/2011 03/28/2011 03/29/2011 03/29/2011
04/08/2011
04/13/2011

84 ORDER denying 78 Motion to Clarify the Court's August 16, 2010 Opinion and Order. Signed by Judge Henry H. Kennedy on October 4, 2010. (lchhk1.) (Entered: 10/04/2010)
Motion terminated: 78 Plaintiffs' motion to clarify the Court's August 16, 2010, Opinion and Order. (NP) (Entered: 10/14/2010)
85 ORDER of USCA as to 79 Notice of Appeal filed by ROBIN KEEGAN ; ORDERED that, to the extent appellant Keegan seeks to appeal the district court's partial denial of her motion to dismiss on the basis of Eleventh Amendment immunity. consideration of the motion to dismiss be deferred in part pending further order of the court; FURTHER ORDERED that, to the extent Keegan seeks review of the district court's denial of her motion to transfer or the determination that the plaintiffs have stated a claim for relief under the Fair Housing Act, the motion to dismiss be granted in part; FURTHER ORDERED that the remainder of this appeal be held in abeyance pending further order of the court. USCA Case Number 10−5309. (mmh) (Entered: 12/30/2010)
86 NOTICE OF SUPPLEMENTAL AUTHORITY by UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (Attachments: # 1 Exhibit City of Ft. Lauderdale v. Scott, No. 10−61122 (S.D. Fla. Jan. 19, 2009))(Todd, James) (Entered: 02/01/2011)
87 Joint MOTION for Protective Order by Plaintiffs and by UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (Attachments: # 1 Text of Proposed Order)(Todd, James) (Entered: 02/09/2011)
88 ORDER granting 87 Joint Motion for a Privacy Act Protective Order. Signed by Judge Henry H. Kennedy, Jr. on February 10, 2011. (NP) (Entered: 02/10/2011)
89 ENTERED IN ERROR.....NOTICE of Serious Settlement Negotiations to Resolve the Action by GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, DAPHNE JONES, NATIONAL FAIR HOUSING ALLIANCE (Sellers, Joseph) Modified on 3/29/2011 (znmw, ). (Entered: 03/28/2011)
NOTICE OF ERROR re 89 Notice (Other); emailed to jsellers@cohenmilstein.com, cc'd 15 associated attorneys −− The PDF file you docketed contained errors: 1. Please refile document, 2. Incorrect format; Please refile in accordance with Local Rule 5.1. (znmw, ) (Entered: 03/29/2011)
90 USCA JUDGMENT (certified copy) as to 74 Notice of Appeal filed by ROBIN KEEGAN, 67 Notice of Interlocutory Appeal, filed by EDWARD RANDOLPH, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, NATIONAL FAIR HOUSING ALLIANCE, ALMARIE FORD, RHONDA DENTS, GLORIA BURNS, DAPHNE JONES. ORDERED that the injunction pending appeal entered by this court on September 22, 2010, be vacated. FURTHER ORDERED and ADJUDGED that the order of the District Court appealed from in case No. 10−5257 be affirmed, and the order appealed from in case No. 10−5269 be reversed. (smm) (Entered: 03/30/2011)
91 USCA AMENDED JUDGMENT (certified copy) as to 74 Notice of Appeal filed by ROBIN KEEGAN, 67 Notice of Interlocutory Appeal, filed by EDWARD RANDOLPH, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, NATIONAL FAIR HOUSING ALLIANCE, ALMARIE FORD, RHONDA DENTS, GLORIA BURNS, DAPHNE JONES. ORDERED that the injunction pending appeal entered by this court on September 22, 2010, be vacated. FURTHER ORDERED and ADJUDGED that the order of the District Court appealed from in case No. 10−5257 be affirmed, and the order appealed from in case No. 10−5269 be reversed, and the case be remanded for further proceedings. (smm, ) (Entered: 04/08/2011)
92 MOTION for Leave to File Supplemental Statement of Points and Authorities in Support of Motion to Dismiss, or, in the Alternative, Notice of Recent Authority by UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (Attachments: # 1 Text of Proposed Order, # 2 Exhibit (1) Supplemental Statement of Points and Authorities in Support of Motion to Dismiss, or, in the Alternative, Notice of Recent Authority, By Defendant U.S.

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 20 of 21

05/09/2011 05/09/2011 05/10/2011 05/10/2011 05/26/2011 05/26/2011 06/01/2011
07/06/2011 07/07/2011
07/07/2011

Department of Housing and Urban Development, # 3 Exhibit (2) April 8, 2011 Opinion of U.S. Court of Appeals for the District of Columbia Circuit)(Todd, James) (Entered: 04/13/2011)
93 ORDER granting 92 U.S. Department of Housing and Urban Development's Motion for Leave to File a Supplemental Statement of Points and Authorities. Signed by Henry H. Kennedy, Jr. on May 9, 2011. (lchhk1) (Entered: 05/09/2011)
95 SUPPLEMENTAL MEMORANDUM to re 22 MOTION to Dismiss for Lack of Jurisdiction and for Failure to State a Claim filed by UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. (nmw, ) (Entered: 05/10/2011)
94 MOTION for Leave to File a Response to HUD's Supplemental Statement of Points and Authorities by GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, DAPHNE JONES, NATIONAL FAIR HOUSING ALLIANCE, EDWARD RANDOLPH (Attachments: # 1 Text of Proposed Order)(Moore, ReNika) (Entered: 05/10/2011)
MINUTE ORDER granting 94 Plaintiff's Unopposed Motion for Leave to File a Response to Defendant U.S. Department of Housing &Urban Development's Supplemental Statement of Points and Authorities. Accordingly, plaintiff's response is due on May 26, 2011. Signed by Judge Henry H. Kennedy, Jr. on May 10, 2011. (NP) (Entered: 05/10/2011)
96 Joint MOTION to Stay Litigation by GLORIA BURNS, RHONDA DENTS, ALMARIE FORD, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, DAPHNE JONES, NATIONAL FAIR HOUSING ALLIANCE, EDWARD RANDOLPH (Attachments: # 1 Text of Proposed Order)(Romer−Friedman, Peter) (Entered: 05/26/2011)
MINUTE ORDER granting 96 Joint Motion to Stay Litigation. Accordingly, this matter, including all filing deadlines, is stayed pending settlement to resolve the matter. Signed by Judge Henry H. Kennedy, Jr. on May 26, 2011. (NP) (Entered: 05/26/2011)
97 MANDATE of USCA (certified copy) as to 67 Notice of Interlocutory Appeal, filed by EDWARD RANDOLPH, GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, NATIONAL FAIR HOUSING ALLIANCE, ALMARIE FORD, RHONDA DENTS, GLORIA BURNS, DAPHNE JONES ; USCA Case Number 10−5257. ORDERED that the injunction pending appeal entered by this court on September 22, 2010, be vacated. FURTHER ORDERED and ADJUDGED that the order of the District Court appealed from in case No. 10−5257 be affirmed, and the order appealed from in case No. 10−5269 be reversed, and the case be remanded for further proceedings. (smm) (Entered: 06/02/2011)
98 Unopposed MOTION to Amend/Correct 95 Supplemental Memorandum by UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (Attachments: # 1 Text of Proposed Order, # 2 Exhibit Lodged Amended Supplemental Statement of Points and Authorities in Support of Motion to Dismiss)(Todd, James) (Entered: 07/06/2011)
MINUTE ORDER granting 98 Unopposed Motion for Leave to File Amended Supplemental Statement of Points and Authorities in Support of the Motion to Dismiss by Defendant U.S. Department of Housing and Urban Development (HUD). Accordingly, HUD's Amended Supplemental Statement of Points and Authorities in support of HUD's pending motion to dismiss, which was attached as Exhibit #2 to 98 the unopposed motion for leave to file, shall be deemed filed this same day. Signed by Judge Henry H. Kennedy, Jr. on July 7, 2011. (NP) (Entered: 07/07/2011)
99 Amended SUPPLEMENTAL MEMORANDUM to re 22 MOTION to Dismiss for Lack of Jurisdiction and for Failure to State a Claim filed by UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. (znmw, ) (Entered: 07/08/2011)

Case: 1:08-cv-01938-HHK As of: 11/16/2012 12:29 AM EST 21 of 21

07/07/2011
07/08/2011 07/08/2011 07/22/2011

100 ENTERED IN ERROR.....AMENDED SUPPLEMENTAL STATEMENT OF POINTS AND AUTHORITIES in support of the Motion to Dismiss re 95 Supplemental Memorandum filed by UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. (dr) Modified on 7/8/2011 (dr). (Entered: 07/08/2011)
NOTICE OF CORRECTED DOCKET ENTRY: re 100 Supplemental Memorandum, was entered in error because it is a duplicate filing to Docket Entry 99 . (dr) (Entered: 07/08/2011)
101 NOTICE of Voluntary Dismissal by All Plaintiffs (Hewitt, Damon) (Entered: 07/08/2011)
102 ORDER of USCA (certified copy) as to 79 Notice of Appeal filed by ROBIN KEEGAN ; ORDERED that the motion for leave to file be granted; FURTHER ORDERED that the motion for voluntary dismissal be granted and this appeal be dismissed with predjudice. USCA Case Number 10−5309. (mmh) (Entered: 07/22/2011)

 
 SETTLEMENT AGREEMENT WHEREAS, in November 2008, Plaintiffs Greater New Orleans Fair Housing Action Center, National Fair Housing Alliance, Daphne Jones, Edward Randolph, Gloria Burns, Rhonda Dents, and Almarie Ford (“Plaintiffs”) filed the instant action seeking injunctive and declaratory relief against Defendant U.S. Department of Housing and Urban Development (“HUD”) and against Defendant Paul Rainwater, in his official capacity as Executive Director of the Louisiana Recovery Authority (“the State”),1 under the Fair Housing Act of 1968 (“FHA”), as amended, 42 U.S.C. § 3613, the Declaratory Judgment Act, 28 U.S.C. §§ 2201 & 2202, 28 U.S.C. § 1331, and 28 U.S.C. § 1343(a)(4) for violations of the FHA and the Housing and Community Development Act of 1974. See Greater New Orleans Fair Hsg. Action Ctr., et al. v. HUD, et al., No. 1:081938 (D.D.C.), Dkt. No. 1, Compl. ¶¶ 8-9, interlocutory appeals docketed, Nos. 10-5257, 105269, 10-5309 (D.C. Cir.). In this action, Plaintiffs sought to ensure that Road Home Program Option 1 grant recipients receive grants based on the Estimated Cost of Damage, up to $150,000, rather than grants based on Pre-Storm Home Value; WHEREAS, on October 12, 2009, the State adopted Action Plan Amendment No. 39, which lifted the prior $50,000 cap on Additional Compensation Grants (“ACG”) for low- and moderate-income homeowners under Option 1 of the Road Home Program, as more particularly described in that amendment. As a result, low- and moderate-income homeowners were given the opportunity to receive uncapped ACGs so that eligible homeowners received Road Home awards up to the Estimated Cost of Damage to their homes, ensuring that all low- and moderateincome homeowners would receive Option 1 grants based on Estimated Cost of Damage instead of Pre-Storm Home Value. To date, the State has distributed an additional $470 million in
1 By terms of its enabling statutes, the Louisiana Recovery Authority as an agency ceased to exist, and the functions relating to design of the Road Home Program were subsumed by the Louisiana Division of Administration Office of Community Development, for which the current interim executive director is Pat Forbes.

uncapped ACG awards to 13,361 low- and moderate-income homeowners by virtue of lifting of the $50,000 cap on ACG awards. Through the implementation of Action Plan Amendment 39, the majority of the putative Plaintiff class members (African-American homeowners in Orleans Parish whose initial grants were based on Pre-Storm Value) have received Option 1 grants based on Estimated Cost of Damage;
WHEREAS, on June 13, 2011, the State submitted Action Plan Amendment No. 51 to HUD for its acceptance. [Attached hereto as Exhibit A.] Action Plan Amendment No. 51, the “Blight Reduction Grant Adjustment” (BRGA), is a substantial amendment to Option 1 of the Road Home Program. As described therein, Amendment No. 51 will provide additional payments to Option 1 Road Home program participants residing in Cameron, Orleans, Plaquemines, and St. Bernard Parishes who: (i) have not been able to repair and re-occupy their storm-damaged homes, (ii) received Road Home Option 1 grant awards that were limited by the pre-storm value of their homes, and (iii) received Road Home grant awards that fall below the 55th percentile of pre-storm value per square foot for homes within their parish. Action Plan Amendment 51 further provides that any individual receiving a BRGA shall receive a one (1) year extension in which to comply with the Road Home Covenants; and certain additional Option 1 beneficiaries whose grants were limited by pre-storm value but are ineligible for the BRGA may also receive a one-year extension upon application to the State through its covenant extension program;
WHEREAS, the State estimates that Amendment No. 51 will require up to $62 million of the funds remaining from the third and final Congressional appropriation to Louisiana for the Road Home Program. See Pub. L. No. 110-116, 121 (Nov. 13, 2007). HUD has accepted Amendment No. 51, as submitted by the State of Louisiana, on July 6, 2011; and
2

WHEREAS, through the continued administration of the Road Home Program, the State will make refined projections of the amount, if any, of the funds budgeted for the Road Home Program that will not be consumed by the close out of the Road Home Program, including the funds spent on Amendment No. 51. The State anticipates utilizing any remaining available funds in the restoration of communities impacted by Hurricanes Katrina and Rita, and will determine the use and method of spending such funds at the time the State has completed its projections. The use of such funds will be subject to the laws and regulations governing the use of those funds.
NOW, THEREFORE, 1. The parties agree that the reference in this Settlement Agreement to any action plan amendment, whether previously submitted or to be submitted in the future, does not create any new right or cause of action on behalf of the parties hereto or any other party with respect to the programs created or amended in those action plan amendments. 2. Within two (2) business days of execution of this Settlement Agreement by all parties, plaintiffs will file a notice of dismissal of this action with prejudice pursuant to Fed. R. Civ. P. 41(a)(1). 3. The parties agree that this Settlement Agreement does not represent an admission of liability by either Defendant; nor does it represent any admission of the absence of liability by the Plaintiffs. 4. The parties agree that each party shall bear its own fees and costs in this action, including any appeals of this action.
3

5. Nothing contained in this Settlement Agreement shall be deemed to be an approval or adoption by any party of any other party’s rationale or justification for entering into this Settlement Agreement.
6. This Settlement Agreement binds the Plaintiffs and the Defendants named in this action, including any appeals of this action.
7. In the event that in the continued administration of the Road Home Program the State of Louisiana determines that an amendment to the terms of Action Plan Amendment No. 51 is appropriate, this Settlement Agreement shall not restrict the State of Louisiana from submitting such amendment to HUD.
8. This Settlement Agreement does not restrict the State of Louisiana from implementing any programs or restrict the State of Louisiana’s ability to utilize any funds that have been awarded or allocated to it.
9. This Settlement Agreement is the integrated understanding of the parties and replaces and supersedes any prior agreement, understanding, or contract between them regarding settlement of this dispute.
10. This Settlement Agreement may be executed by the parties’ attorneys, in counterparts.
4

 
 United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 15, 2011

Decided April 8, 2011

No. 10-5257

GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, ET AL.,
APPELLANTS

v.

UNITED STATES DEPARTMENT OF HOUSING & URBAN DEVELOPMENT AND ROBIN KEEGAN, IN HER OFFICIAL CAPACITY AS EXECUTIVE DIRECTOR OF THE LOUISIANA
RECOVERY AUTHORITY, APPELLEES

Consolidated with 10-5269

Appeals from the United States District Court for the District of Columbia (No. 1:08-cv-01938)

A.J. Krouse argued the cause for appellee/cross appellant Robin Keegan. W ith him on the briefs were Renee Culotta, Suzanne M. Risey, and Timothy Heffernan.
Joseph M. Sellers, argued the cause fo r appellants/crossappellees. With him on the briefs were Jenny R. Yang, John

2

Payton, Debo P. Adegbile, Renika C. Moore, and Craig Goldblatt.

Before: ROGERS and KAVANAUGH, Circuit Judges, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by WILLIAMS.

Senior Circuit Judge

Opinion concurring in part and concurring in the judgment filed by Circuit Judge ROGERS.

WILLIAMS, Senior Circuit Judge : The pla intiffs in th is case are two fair housing organi zations in New Orleans and five African-American homeowners. They claim that a program to help hom eowners rebuild after hurricanes Katrin a and Rita has e mployed a grant formula that violates the antidiscrimination provisions of the Fair Housing Act, particularly 42 U.S.C. § 3604(a). The progr am is adm inistered by the Office of Comm unity Development (“OCD”) of the State of Louisiana, an entity we tre at interchangeably with its predecessor, the Louis iana Recovery Authority (“LRA”). Defendant Robin Keegan is the E xecutive Director of th e OCD. Th e U.S. Departm ent of Housing and Urban Development (“HUD”) is a defendant in the suit but has taken no part in this appeal and cross-appeal.

Plaintiffs sought prelim inary injunctive relief, which the district court initially denied on the ground that it was barred by state sovereign immunity unde r the Eleventh Amendment. Plaintiffs appealed. While the appeal was pending, the district court granted the plaintiffs ’ later request for narrowe r injunctive relief. Defendant Keegan cross-appealed. Because it is plain that there are some potential remedies not running afoul of sovereign immunity, we have jurisdiction to address the substantive merits of plaintiffs’ claim (regardless of

3
sovereign immunity’s possible ap plicability to the injun ction initially sought). Doing so, we find that the plaintiffs’ showing on those m erits is too weak to give them the likelihood of success required for a prelim inary injunction. Accordingly, we affirm the de nial of plaintiffs’ initially requested injunction and reverse the grant of their follow-up injunctive claim.1

* * *
In 2005 approximately 123,000 owner occupied homes in Louisiana were destroyed or severely damaged by hurricanes Katrina and Rita. Deferred Appendix (“D.A.”) 47. Using federal funds, Louisiana created the Road Hom e Homeowner Assistance Program to assist Louisianans dis placed by the hurricanes. The pr ogram’s principal activity has been provision of grants to hom eowners who wish to repair or rebuild and reoccupy their dam aged homes. As of March 24, 2011, it had given 117,744 Louisiana hom eowners almost $8 billion in grants for rebui lding. Office of Comm unity Development, The Homeowner Ass istance Program Weekly

1 The parties on March 28, 2011, in accord with Part II.C.2 of

the Circuit’s Handbook of Practice, filed notice that they were

engaged in serious settlement negotiations. Notice of such

negotiations is of course most useful before the court has expended

resources in drafting an opinion or opinions resolving the case. On

March 29, 2011 we issued our judg ment affirming the district

court’s judgment in No. 10-5257, reversing its judgment in No. 10-

5269, vacating the injunction we had issued on September 22, 2010,

and noting that that we did so for reasons to be explained “in

opinions to b e filed at a later date.” Greater New Orleans Fai r

Housing Action Center v. U. S. Dep’t of Housing &

Urban

Development, No. 10-5257 (D.C. Cir. March 29, 2011). These a re

those opinions.

4
Situation and Pipeline Repor t Week 247, 1 (March 29, 2011) (“Weekly Situation and Pipeline Report”), http://www.road2la.org/Docs/pipeline/week247pipeline.pdf. The program is supported by thr ee special appropriations of Community Development Block Grants by Congress in 2005, 2006, and 2007. Pub. L. No. 109-148, 119 Stat. 2680, 277981 (Dec. 30, 2005); Pub. L. No. 109- 234, 120 Stat. 418, 47273 (June 15, 2006); Pub. L. No. 110-116, 121 Stat. 1295, 1343-44 (Nov. 13, 2007) (“2007 Act”).
The program’s grants fall into three categories. Option 1 grants are available to those Louisiana homeowners who plan to repair or rebuild th eir damaged homes. Hom eowners receiving Option 1 grants m ust agree to a covenant requiring their rebuilt hom e to be owne r-occupied for at least three years (the covenant runs with the house so that any buyer of the house is bound if the grant recipient sells the house). Options 2 and 3 relate to homeowners without plans to rebuild on their original hom esites. This case concerns only grants made under Option 1.
OCD has calculated these gran ts by taking the lesser of the pre-Katrina value o f the hom e and the co st-to-rebuild, subtracting the value o f any FEMA or insurance proceed s received by the homeowner, and, if the homeowner carried no home insurance, applying a 30% penalty (i.e., 30% of the lower of value or cost-to-rebu ild, minus any FEMA grant). D.A. 110. The resulting tota l is capped at $150,000. The formula has special provision for houses m ore than half (but not fully) destroyed and for ho meowners who must raise the elevation of their ho mes in order to com ply with new regulations. Hom eowners with incomes that are no higher than 80% of the “area m edian income” may receive an Additional Compensation Grant (“ACG”) to cover a ny difference between the cost-to-rebuild and the amount of their compensation and elev ation grants. ACGs were initia lly

5

subject to a $50,000 lim it, but th at was rem oved before the district court heard p laintiffs’ motion f or a prelim inary injunction. The $150,000 cap applies to any recipient’s total grant, including any elevation grant or ACG. The various formulae used in awarding grants have been developed by the LRA and OCD and approved by HUD.

Plaintiffs brought suit against HUD and Keegan on behalf

of all African-Am erican homeowners in New Orleans who

will have participated in the Road Hom e program by the f irst

day of trial and had their grant amounts calculated on the basis

of pre-storm value of their homes. The parties agreed to defer

briefing on class certification until after comm encement of

discovery, D.A. 38-39, and ther e has been no ruling on class

certification. Plaintiffs alle ged that the Option 1 for mula

violates the Fair Housing Ac t, 42 U.S.C. §§ 3604(a), 3605(a),

3608(d), (e)(5), and the

Housing and Comm unity

Development Act of 1974, 42 U.S.C. § 5304(b)(2). Their

theory is that the formula’s use of pre-Katrina house values as

a grant ceiling had a disparate im pact on African-Am erican

homeowners, who tend to live in New Orleans neighborhoods

with lower property values than tho se in predominately white

neighborhoods.

Factually, the disparate impact claim relies primarily on a 2008 study by PolicyLink, using data on the Road Home program provided by the LRA and the Louisiana Housing Finance Agency. Plain tiffs focus on a “resource gap” found by the study, which it defined as the difference between total resources available for rebuildi ng and the cost of rebuilding. PolicyLink calculated resources for rebuilding as including all grants under the Road Hom e program, plus money receiv ed from FEMA and the hom eowner’s insurance proceeds. PolicyLink, A Long Way Hom e: the State of Housing Recovery in Louisiana 2008 (“PolicyLink”), at 39, http://policylink.info/threeyearslater/. For rebuilding costs, it

6
used the sam e formulae that LR A used in calculating grant awards.
The study found that although African-Am erican Option 1 grant recipients received larger average Road Hom e grants than white recipients, the “resource gap” was $39,082 on average for African-American grant recipients, compared with $30,863 on average for white grant recipients. PolicyLink at 42. The study suggested that m uch of the “resource gap” w as driven by the element of the for mula using home values as a ceiling on grants. Am ong homeowners who were paid under the prong of the form ula looking to pre-Katrina home values, the average resource gap was nearly $50,000, com pared to about $14,000 for homeowners who were paid under the formula’s cost-to-rebuild prong. PolicyLink at 43. The study also noted that “African American households and lowincome households had lower pre- storm home values than the average for closed [2] applicants rebuilding in place” and that “[l]ow-income households and African Americans had less insurance on average than any other dem ographic group.” PolicyLink at 38. Plaintiffs presented data from the PolicyLink study and the 2000 censu s showing that houses in predominantly African-American neighborhoods in New Orleans have significantly lower values than houses in white neighborhoods. PolicyLink at 46-51; D.A. 163, 165.
In October 2009 the state of Louisiana (with the consent of HUD) rem oved the $50,000 ceiling on A CGs for low income homeowners. D.A. 236. As a result hom eowners whose income was no higher than 80% of the median became eligible for total grants up to the lesser of the f ull cost-torebuild or $150,000. Because the new for mula made low
2 PolicyLink appears to use th e term “closed” for those who had received their Road Home grants.

7

income homeowners eligible for grants up to the cost-to-

rebuild, or $150,000, regardless of the pre-Katrina value of

their homes, it effectively removed, for low incom

e

homeowners, the part of the gr ant formula that considered

homes’ pre-Katrina value. In effect, low income homeowners

received the relief requested by plaintiffs. As of May 6, 2010,

OCD had paid 9,301 grant recipients $326 .5 million in

additional ACGs. D.A. 193.

In June 2010 plaintiffs reque sted a temporary restraining order (“TRO”) and prelim inary injunction that would enjoin Keegan “from taking an y action to obligate, reallocate and/or spend any funds that, as of J une 2, 2010, rem ain available to the LRA’s Road Hom e Homeowner Assistance program, and . . . from taking any action to submit any request to the U.S. Department of Housing and Urban Developm ent . . . t hat would result in or cause fu rther obligation, award, and/or disbursement of funds . . . .” D.A. 68. The purpose of this preliminary injunction would have been to p reserve a source of funds for the additional grants that plaintiffs (and the class of homeowners they purport to represent) would be entitled to if their law suit were to succeed. The proposed injunction would thwart LRA’s plans to use at lea st $100 million of available funds on a constructi on lending program to support loans to Road Hom e grant recipients who for various reasons had insufficient funds to rebui ld and difficulty obtaining credit. D.A. 230-31.

The district court denied pl aintiffs’ motion. Although it found that the plaintiffs were likely to be able to make a prima facie showing of disparate im pact, it conc luded that state sovereign immunity under the E leventh Amendment, as interpreted by Edelman v. Jordan , 415 U.S. 651 (1974), barred the relief. W hile Edelman finds “prosp ective” relief permissible under the Eleven th Amendment, it bars “retroactive” injunctive relief as an im pingement on state

8
sovereign immunity. See Edelman, 415 U.S. at 677. Although the injunction sought would only hold paym ents in abeyance, plaintiffs sought it in aid of their claim to hav e grant awards recalculated for Option 1 app licants who h ad already been paid, and the distri ct court ruled that a m andate of such paym ents would “effec tively constitute an award of damages” for a past b reach of a legal duty. Greater New Orleans Fair Housing Action Center v. U. S. Dep’t of Housing & Urban Development, 723 F. Supp. 2d 1, 9 (D.D.C. 2010).
Plaintiffs appealed the denial of this f irst preliminary injunction motion, arguing that th e district court erred in its analysis of the im plications of Edelman. They also filed a motion in the district court for a second TRO and prelim inary injunction. This alternative relief was to bar OCD from using the house value elem ent of the existing grant form ula in any future grants, relief that did not, under the district court’s prior ruling, run afoul of Edelman’s bar on retrosp ective relief. Little was at stake, however. In her oppositio n to this second motion, defendant Keegan pointed out that as of July 29, 2010 there were only 141 African-A merican Option 1 grant applicants in Orleans Parish who were not elig ible for an ACG and had not yet received any grants. Furtherm ore, of these 141 applications several did not meet program eligibility requirements, 54 had not replied to correspondence from OCD to indicate their contin uing interest in the p rogram for a substantial period of tim e, and over 80 had various deficiencies in their do cumentation. D.A. 356. Because the deadline for submitting initial Option 1 grant applications has already passed, there will not be any new applicants. 2007 Act, 121 Stat. at 1343, § 159(a).
The district court granted this second motion; because the second requested injunction would affect only the awards of future grantees, the relief sought would be permissible under Edelman and Ex Parte Young, 209 U.S. 123 (1908). Greater

9

New Orleans Fair Housing Action Center v. U. S. Dep’t of Housing & Urban De velopment, 723 F. Supp. 2d 11, 13 (D.D.C. 2010). As before, it found that plaintiffs had shown a likelihood of success on the m erits of their disp arate impact claim, and in addition found the other elem ents of t he conventional preliminary injunction formula tilting in plaintiffs’ favor. Id. at 13-14.

Defendant Keegan filed a cro ss-appeal of the district court’s ruling on the second motion for a TRO and preliminary injunction. She ar gues, among other things, that plaintiffs do not have standing a nd that the district court did not have jurisdiction to enter this prelim inary injunction because jurisdiction over the matter had shifted to the court o f appeals.

While the appeal and cross-appeal were pending before

us, plaintiffs filed a m otion for an injunction pending appeal.

We granted that m otion and enjoined Keegan “from

committing Road Home funds to any new projects, such as the

proposed construction lending pr ogram, pending disposition

of this appeal.” Greater New Orleans Fair Housing Action

Center v. U. S. Dep’t of Housing & Urban Development , No.

10-5257 (D.C. Cir. Sept. 22, 2010) (order granting injunction

pending appeal). This ruling, in effect, gave plaintif

fs

temporarily the relief they s ought in the first motion for a

preliminary injunction.

* * *
In ruling on a prelim inary injunction a key issue—often the dispositive one—is whethe r the m ovant has shown a substantial likelihood of su ccess on the m erits. See Munaf v. Geren, 553 U.S. 674, 690 (2008). As we’ve seen, the district court resolved that issue against plaintiffs on the ground that

10
the relief sought would viol ate Louisiana’s sovereign immunity. It ruled that requi ring Louisiana to adjust th e award of grant recipients who had already been paid under the Road Home program would be retrospective relief of the type barred by Edelman. The issue is in fact extremely complex, for several reasons: (1) Although the Road Hom e program is administered by a state agency, it is funded by the federal government; (2) Although Congress initially allowed the state agency a fairly wide discretion to deploy the funds—subject to HUD approval—in response to the Katrina and Rita disasters, the 2007 Act explicitly required them to be used “solely for the purpose of covering costs associated with otherwise uncompensated but eligible claim s that were filed on or before July 31, 2007, under the Road Hom e program.” 2007 Act, 121 Stat. at 1343, § 159(a); (3) T he OCD and defendant Keegan have changed the Road Home formula over time, giving addition al sums to prior r ecipients (leading plaintiffs to divide the grants into categories they call “initial” and “final”). And there is no precedent in our circuit applying Edelman to com parable facts. Ot her circuits have adopted greatly varying interpretations of Edelman where a state ’s discretion over the funds at issue is lim ited. Compare Vaqueria Tres Monjitas Inc. v. Irizarry , 587 F.3d 464, 478-80 (1st Cir. 2009) (holding that Edelman does not bar retroactive relief paid from special state trust fund), reh’g denied Vaqueria Tres Monjitas Inc. v. Irizarry , 600 F.3d 1 (1st Cir. 2010); Bennett v. White, 865 F.2d 1395, 1408 (3rd Cir. 1989) (permitting retrospective relief under Edelman to th e extent that any funds paid by the state will be reimbursed by the United States), and Brown v. Porcher , 660 F.2d 1001, 100607 (4th Cir. 1981) (holding that Edelman does not bar retrospective relief when the award is not paid from a state’s general revenue fund), with Paschal v. Jackson, 936 F.2d 940, 944 (7th Cir. 1991) (declining to inquire as to the source of state funds), and Esparza v. Valdez, 862 F.2d 788, 794 (10th

11

Cir. 1988) (rejecting a rule that would look to whether “relief would be paid out of a general or special revenue fund”).

By contrast, we find t he substantive merits relatively

easy. But we can reac h them only if permitted to do so by

Steel Co. v. Citizens fo r a Better Environment , 523 U.S. 83

(1998), which generally gives an absolute priority to

jurisdictional questions. We conclude that Steel Co. presents

no obstacle. We can perceive no good reason that Louisiana’s

sovereign immunity might preclude all relief. Although

defendant Keegan makes several wholly im

plausible

arguments to the effect that the second motion for a

preliminary injunction is barre d by the Eleventh Amendment,

these arguments rest on a f undamental confusion over the

significance of Ex Parte Young, and they read Idaho v. Coeur

d’Alene Tribe of Idaho , 521 U.S. 261 (1997), as if it

effectively overruled Ex Parte Young. A t a minimum, it is

clear that under Edelman the district court has jurisdiction to

order LRA to use a different form ula for future grantees.

Thus, unlike the typical jurisdictional issue, the Edelman issue

is not one th at calls into question the authority of the court to

hear plaintiffs’ claim on the m erits. So it is clear that

regardless of how the Eleven th Amendment might apply to

the first prelim inary injunction, the district court properly

exercised jurisdiction over both the case as a whole and

plaintiffs’ motion f or a prelim inary injunction, and that we

may do the same.

We note for the record that, apart from situations like this where the only jurisdictional obstacle is to particular varieties of relief, there is considerable uncertainty about sequencing in the Eleventh Amendment context. The Suprem e Court has found it permissible, “indeed appropriate,” to decide the issue of whether a statute provides for suits against the states before determining whether, if it did, th e Eleventh Amendment would permit such a suit. Vermont Agency of Natu ral

12
Resources v. United Sta tes ex rel. Stevens, 529 U.S. 765, 780 (2000). It reasoned that the statutory issue w as “logically antecedent to th e existence of th e Eleventh Amendment question,” id. (internal quotations omitted), and that the court, in resolving that issue woul d not “pronounce upon any issue, or upon the rights of any person, beyond the issues and persons that would be re ached under the Eleventh Amendment inquiry anyway” (as it m ight in resolving questions such as whether the statu te permitted private causes of action generally). Id. Thus the “com bination of logical priority and virtual coincidenc e of scope m akes it possible, and indeed appropriate, to decide the statutory issue first.” Id. at 779-80. See also United States ex rel. Long v. SCS Business & Technical Institute, In c. 173 F.3d 890, 893-98 (D.C. Cir. 1999). But at least one circuit is ready to consider merits before passing on an Eleventh Amendment issue on the grounds that state sovereign immunity, unlike ordinary subject matter jurisdiction issues such as standing, may be waived by the state and, if not raised by the state, m ay but need not be considered by the court sua sponte. Parella v. R.I. Employees’ Retirement System, 173 F.3d 46, 53-57 (1st Cir. 1999); see also Greenless v. Almo nd, 277 F.3d 601, 607-08 (1st Cir. 2002); cf. United States ex rel. Long , 173 F.3d at 893-94 (noting several S upreme Court hints that the Eleventh Amendment was no m ore than “quasi-jurisdictional”). B ut see Vermont Agency, 529 U.S. at 779 (not ing that personal jurisdiction “is an essen tial element of the jurisdiction of a district court, without which the court is powerless to proceed to an adju dication”). But because here the Eleventh Amendment is at m ost a barrier to some possible rem edies and the district court’s jurisdiction over the case as a whole is clear, we can consider the merits first, without sorting out the sequencing issue for other contexts.

13

* * *

In evaluating likelihood of success on the su bstantive merits, we review the distri ct court’s legal conclusions de novo. Davis v. PBGC, 571 F.3d 1288, 1291 (D.C. Cir. 2009). Contrary to the d istrict court, we conclude that plaintiffs’ disparate impact claim lacks merit.

Section 3604(a) of the Fa ir Housing Act m akes it unlawful “To refuse to sell or rent after the m aking of a bona fide offer, or to refuse to negotia te for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any perso n because of race, colo r, religion, sex, fam ilial status, or national origin.” 42 U.S.C. § 3604(a). We have not decided whether this permits disparate impact claims. 2922 Sherman Avenue Tenants’ Association v. District of Columbia , 444 F.3d 673, 679 (D.C. Cir. 2006). The argument that it does rests largely on the point that the language is parallel to that of Title VII of the Civ il Rights Act of 1964, 42 U.S.C. § 2000e2, under w hich a plaintiff can prevail by showing either disparate impact or disp arate treatment. See 2922 Sherman Avenue Tenants’ Association , 444 F.3d at 679. Each of the eleven circuits that have resolved the m atter has found the disparate impact theory appli cable under the Fair Housing Act. Id. As the matter has not been briefed and its resolution is unnecessary to the outcom e, however, we shall, as in 2922 Sherman Avenue Tenants’ Association , simply assume the availability of the disparate impact theory. We note, however, that no co urt has app lied disparate impact theory to th e formulae used administering a grant program.

Similarly, we need not decide as between the two leading

tests for applying disparate im pact, the four-factor balancing

test of the Seventh Circuit,

Metropolitan Housing

Development Corp. v. Villag e of Arlington Heig hts, 558 F.2d

1283, 1290 (7th Cir. 1977), or the burden-shifting test of the

14
Second Circuit, Huntington Branch, NAACP v. Town of Huntington, 844 F.2d 926, 935-36 (2nd Cir. 1988), aff’d on other grounds, 488 U.S. 15, 18 (1988). As in 2922 Sherman Avenue Tenants’ Association , the s uccess of p laintiffs’ claim doesn’t turn on the de tails of the legal test; either appro ach requires proof of disproportiona te impact, m easured in som e plausible way, 444 F.3d at 679-80 , and plaintiffs have not offered such proof.
When presenting a dis parate impact claim, a plaintiff must generally “demonstrate with statistical evidence that the practice or policy has an adve rse effect on the protected group.” Garcia v. Johanns , 444 F.3d 625, 633 (D.C. Cir. 2006) (evaluating a disparate impact claim under the Equal Credit Opportunity Act); see also Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 987 (1988). “T he correct inquiry is whether the policy in question had a disproportionate im pact on the m inorities in th e total group to which the policy was applied.” Betsey v Turtle Creek Associates, 736 F.2d 983, 987 (4th Cir. 1984); see also Darensburg v. Metropolitan Transportation Commission, No. 09-15878, --- F.3d ---, 2011 WL 540592 (9th Cir. 2011) (eva luating a disparate im pact claim alleging discriminatory allocation of mass transit funds). In this case, the polic y—the grant formula that called for using the lesser of pre-Ka trina home value and cost to repair—was applied to all applicants for Option 1 Road Home grants. The question, then, is whether the formula as a whole had a disparate impact on African-American grant applicants.
We pause to consider examples of what is precluded by a focus on the effects of the form ula as a whole. In any s tate where African-American and white hom eowners have significantly different econom ic profiles, it will presum ably be the case that particular elements of a complex formula such as that o f the Road Hom e program will hav e a disproportionate negative im pact on African-Am ericans, an

15
impact potentially offset by other elem ents of the for mula. For example, assuming that use of the pre-Katrina value of home as one element of the formula favors white homeowners on average, the PolicyLink study in voked by plaintiffs tells us that African-American homeowners received less money from insurance on average, P olicyLink at 38, so that the form ula’s deduction of insurance proceed s from the gra nt appears to favor African-Americans. Similarly, the $150,000 cap on total grants would seem to disf avor wealthier (and therefore, according to the Policy Link study, disproportio nately white) grant recipients. It seem s unlikely that an agency could fashion a grant form ula in this context without some element having a disproportionate im pact on a protected group. (For the moment we defer consideration of the consequences if, as under Title VII, whites are also acceptable plaintiffs.)
For the same reason, attention to th e formula’s effects as a whole bars our looking at the effects of the grant form ula only in Orleans Parish. If th e economic profiles of racial groups differ from parish to pari sh in the parts of Louisiana affected by hurricanes Katrina a nd Rita, then a grant form ula that has non-disparate racial effects for Louisiana as a whole can easily have a dis parate impact on African-Am erican residents in at least som e individual parishes (not to mention smaller geographic units). To allow plaintiffs to pick a special subset of th e affected localitie s to test for dis parate impact would, just like allowing them to single out of the effects of a single formula elem ent, expose almost any grant form ula to litigation. Although plaintiffs focus much of t heir case on Orleans Parish, we must consider the impact on Louisiana as a whole.
Apart from these obvious limits, it is hard to see just how one may affirmatively identify a sound benchm ark for assessing the disparateness of a grant for mula’s impact (or, to put the problem slightly di fferently, to say what a non-

16
disparate impact would look like). Plaintiffs urge us to focus on the “resource gap” facing Option 1 grant recipients, that is, the difference between the cost -to-rebuild and the “total resources” of an applicant—the latter being defined (by them and the PolicyLink stud y) as the grantees’ total receipts from insurance, FEMA and the Road Hom e program. They point to the PolicyLink finding of a “resource g ap” between African-American and white grant recipients of slightly over $8,000 ($39,082 on a verage for African-Am erican grant recipients, compared with an average of $30,863 for white grant recipients). PolicyLink at 42.
Even if we accep ted “resource gap” as the appropriate measure, which we do not, plaintiffs’ evidence is problematic at best. The PolicyLink study predates the removal of the $50,000 cap on ACGs (which in turn predated the district court injunction proceeding), creating what OCD calls the Additional ACG program. That removal has had considerable impact. By May 6, 2010 (before the district court ruled on the first motion for a TRO and prel iminary injunction), OCD had paid 9,301 grant recipients $326 .5 million in Addition al ACGs. D.A. 193. According to the m ost recent data, O CD has now disbursed $466,313,036.52 to 13,267 grant recipients. Weekly Situation and Pipeline Report at 5. This is more than 10% of Option 1 grants to low incom e recipients and represents an av erage Additional ACG of over $35,00 0. Id. We do not know the fraction of these grants received by African-Americans. But if African-American grant recipients are more likely to qualify as low incom e and are m ore likely to face a resource gap, as the PolicyLink study suggests, they would be eligible substant ially more often, and for substantially larger av erage Additional ACGs, than would white recipients. Thus rem oval of the ceiling on ACGs casts grave doubt on plaintif fs’ claim even under their “resource gap” theory.

17

At oral argum ent, plaintiffs’ counsel responded to the removal of the $50,000 cap by arguing that it would have no effect among recipients altogether ineligible f or ACGs, i.e ., those with incom es higher th an 80% of “area m edian income.” But th is sort of analytical cherry-picking seems to us no m ore valid than the sam e practice that we rejected as applied to individual elements of the formula or to geographic units.

In any event, we find the “resou rce gap” an inappropriate

benchmark. The “resource gap” m easures neither the

resources a recipient receives under the Road Hom e program,

nor a grant recipient’s ability to obtain housing, nor the extent

to which the Road Home program compensates a recipient for

hurricane-inflicted losses. It m easures only the extent to

which grant receip ts, FEMA receip ts and insurance receipts

fall short of the cost-to-rebuild a house of the size that the

grant recipient owned before the hurricanes. This is a

completely artificial metric. It represents an unprincipled

mish-mash of considerations in tension with one another. The

“resource gap” m etric gestures at m easuring need by

calculating shortfalls from the co st of rebuilding rather than

size of the total grant. But the cost-to-rebuild element rests on

the size of applicant’ s former house, rather than assum ing (as

would an egalitarian concern for need) an equal cost o

f

housing for all. And the treatm ent of insurance seems

completely anomalous. It m akes homeowners who bothered

to insure their homes appear to be the recipients of some sort

of government m unificence, while in fact their grants have

been reduced on account of their precau tions (a reductio n

presumably made because OCD’s resources were finite an d

because the justificatio ns for the “collateral so urce” rule are

absent here).

An alternative focus would be the total value of Road Home grants received, or the value of Road Home grants as a

18
proportion of a grantee’s uncom pensated losses. But on this criterion, the plaintiffs’ own evidence is fatal to their claim. It indicates that African-American grant recipients on average have received larger total awards than d id white gran t recipients. PolicyLink at 38 (“ African American and elderly households received higher av erage grants because a higher percentage of them received additional compensation grants, which were available to low-in come individuals.”). If anything, this discrepancy ha s become greater since the PolicyLink study, by virtue of removal of the $50,000 cap on ACGs.
In short, then, plaintiffs’ fact s are at best sketchy even on the implausible resource-gap theory, and do not begin to show a violation on the size-of-grant metric.
Alternative benchmarks are clearly conceiv able. In rejecting the resource-gap theory and in tentatively applying the size-of-grant theory, we do no t mean to en dorse size-ofgrant as necessarily suitable. Choice of a benchm ark is further complicated by uncertainty whether one need consider only the im pact on m inority groups. As Title VII perm its white employees to bring job discrimination claims, McDonald v. Santa Fe Trail Transportation Co. , 427 U.S. 273, 279-80 (1976), white grant recipients m ight, on the sizeof-grant standard, be able to make a prim a facie case of disparate impact. See also Jordan v. Khan, 969 F. Supp. 29, 30-31 (N.D. Ill. 1997) (perm itting white plaintiff to bring racial discrimination claim under the Fair H ousing Act); Miller v. Towne Oaks East Apartments, 797 F. Supp. 557, 561 (E.D. Tex. 1992) (same). In the f ace of this legal uncertainty, adoption of the size-of-grant benchm ark would put OCD— and other agencies trying to develop formulae for comparable grants—in a damned-if- you-do, damned-if-you-don’t quandary.

19
Thus the data offered by plai ntiffs to show a disparate impact fall short. The numbers by no means establish that the OCD formula actually in effect at the time of the district court proceeding created results am ounting to a violation even under plaintiffs’ resource-gap theory, which in any event we reject. On the less implausible size-of-grant standard, the evidence flatly contradicts their claim. As a re sult, plaintiffs have not shown a likelihood of success on the m erits. While the criteria governing grant of a prelim inary injunction include other elements (the balance of harms to the parties and the effect on the public interest), see, e.g., Davis v. PBGC, 571 F.3d at 1291, and we review the district court’s balance of factors for abuse of discretion, id., there is no need to rem and to the dis trict court. When a plaintiff has not shown a likelihood of success on the m erits, there is no need to consider the remaining factors. See Arkansas Dairy Cooperative Ass’n, Inc. v. U.S. Dep’t of Agriculture, 573 F.3d 815, 832 (D.C. Cir. 2009); Apotex, Inc. v. FDA, 449 F.3d 1249, 1253 (D.C. Cir. 2006).
We therefore affirm the dist rict court’s denial of the initially requested injunction.
* * *
We turn now to plaintiffs’ second motion for a TRO and preliminary injunction. The dist rict court granted this m otion several weeks after plaintiffs’ notice of appeal of its first injunction ruling. Defe ndants appeal this decision on several grounds, including jurisdictional ones—that plaintiffs lack standing and that their appeal of the denial of the first motion for a TRO and prelim inary injunction divested the district court of jurisdiction over the m atter. Under Steel Co. we would normally be required to address these jurisdictional questions before ruling on the substantive merits, but this case

20
fits well within an exc eption recognized by Steel Co. If the outcome on the m erits is “f oreordained” by another ruling, such that “the preterm ission of the jurisdictional question [is not used] as a dev ice for reach ing a ques tion of law tha t otherwise would have gone unaddressed,” then a court m ay turn to the m erits without considering the jurisdictional issue. Steel Co., 523 U.S. at 98. In ru ling on the first motion for a preliminary injunction, we found that plaintiffs’ likelihood of success on the m erits of their un derlying claim was slim. Although the scope of relief re quested differs, the second motion implicates the exact sam e disparate impact claim and thus shares the first motion’s fatal defect. And, as noted above, when a plaintiff has not shown a likelihoo d of success on the m erits, we need not consider the other factors. Our ruling on the first motion is therefore fully dispositive of the second motion. Accordingly, we reverse the district court’s grant of the second motion.
* * *
As set forth in our March 29, 2011 judgm ent, we affir m the district court’s denial of plaintiffs’ first motion for a TRO and preliminary injunction and reverse the dis trict court’s grant of plaintiffs’ second m otion. W e also, as previously ordered, vacate the injunction we had issued pending appeal. Finally, we remand the case for pro ceedings not inconsistent with this opinion.

Rogers, Circuit Judge, concurring in part and concurring in the judgment: Although I concur in holding that plaintiffs fail to demonstrate entitlement to injunctive relief based on a likelihood of success on the m erits of their disparate im pact claim, I write separately to identify the narrow issue this court is required to decide in disposing of these appeals.

Plaintiffs’ theory of the case is straightfor ward: The

formula used to determine grant awards of federal funds under

Option 1 of the Road Home Program1, which bases the award

on the lesser of the pre-storm value of an applicant’s home and

the cost to rebuild, ha s a discrim inatory impact on African-

American grantees living in historically

segregated

communities because generallyAfrican-Americans own homes

with pre-storm values that fall below the cost to rebuild, while

whites living in predom inantly white com munities own

comparable homes with pre-storm values that exceed the cost to

rebuild. See Compl. ¶¶ 52-60. Robin Keegan, then-Executive

Director of the Office of Community Development for the State

of Louisiana, interposed three objections to plaintiffs’ claimof

likelihood of success on the m erits: (1) The Eleventh

Amendment bars any relief; (2) The Fair Housing Act, 42

U.S.C. §§ 3601 et seq., does not afford a cognizable claim; and

(3) Plaintiffs’ evidentiary proffer does not account for the total

federal funds distributed and hence fail s to show that the pre-

storm value calculation under Option 1 of t he Road Home

Program had a disparate im pact on the proposed class of

1 Maj. Op. at 3-4, referring to the fundingof the Road Home Program by congressional appropriations of Com muniity Development Block Grants in 2005, 2006, and 2007. See generally Title I of the Housingand Community Development Act of 1974, Pub. L. No. 93-383, 88 Stat. 663 (codified as amended at 42 U.S.C. §§ 5301 et seq.).

2
African-American homeowners in Orleans Parish.2
1. The Eleventh Am endment argument is based on fundamental factual and legal misunderstandings, see Maj. Op. at 10-11, and is effectively conceded by Keegan. Pla intiffs contend that because Keegan m ust use the re maining $148 million of federal funds to suppl ement the federal grants of existing Road Hom e recipients, see An Act Making appropriations for the Department of Defense for the fiscal year ending September 30, 2008, and for other purposes, Pub. L. No. 110-116, § 159, 121 Stat. 1295, 1343-44 (2007) (“2007 Act”), any relief would remedy an ongoingviolation of federal law and have no im pact on the state’s treasury or budge t, thereby avoiding the Eleventh Amendment’s sovereign immunity bar. See Edelman v. Jordan, 415 U.S. 651 (1974); Ex parte Young, 209 U.S. 123 (1908). In response Keegan claimed that the Ex parte Young exception to the bar interposed by the Eleventh Amendment was inapplicable because the state, not Keegan, is the real party in interest inasm uch as the state’s political or property rights and its public treasury would be adversely affected were plaintiffs to prevail. This argum ent is premised on Keegan’s position that the recalculation of Option 1 grants sought by plaintiffs would “am ount to money damages to be
2 Keegan also maintained as to the second m otion for a preliminary injunction that plaintiffs lacked standing and that the district court lacked jurisdiction. See Maj. Op. at 9. Keegan acknowledges that three of the five named plaintiffs are homeowners in New Orleans whose grant amounts under the Road Home Program were calculated based on the pre-storm value of their homes and that they are ineligible to receive Additional Com pensation Grants. See Compl. ¶¶ 13-17, 21; Def.-Appellee Cross-Appellant Robin Keegan Br. at 29. Class certification, by agreement of the parties, has been postponed by the district court. The court does not reach the grounds on which Keegan argues that the disrtict court lackedjurisdiction. See Maj. Op. at 19-20.

3
paid from the State treasury,” De f.-Appellee Cross-Appellant Robin Keegan Br. at 15, and that“[t]he allocation of state funds by the State of Loui siana to com pensate homeowners after Hurricanes Katrina and Rita is an im portant sovereign state interest,” id. at 25. Even after plaintiffs pointed to the federal source of the funds, Keegan repeated in reply that “the funds in question are state rather than federal funds.” Def.-Appellee Cross-Appellant Robin Keegan Reply Br. at 23. This insistence continued during oral argum ent, where Keegan argued t hat “plaintiffs’ requested reliefis a retrospective claimfor damages to be paid from the state treasury.” Oral Arg. at 24:45-52.
Keegan has not identified any state funds that are disbursed under the Road Hom e Program, and Congress, in appropriating the disaster recovery Community Development Block Grant funds from which the $148 m illion would be drawn, mandated that “such funds serve only to supplement and not supplant any other State or Federal resources committed to the Road Home program.” 2007 Act § 159(b), 121 Stat. at 1343. As plaintiffs’ counsel confirmed to the district court and during oral argument, the $148 million remains in “the custody and control of the United Stat es” and the funds “have neve r been disbursed to Louisiana; Louisiana has no right to use them at this point.” Oral Arg. at 34:46-35:14; Clarification of the [District] Court’s May 24, 2010 Order, No. 1:08-cv-1938, at 6 (D.D.C. June 6, 2010).3 Moreover, counsel for Keegan and for plaintiffs confirmed during oral argument that any unused Road
3 See also 2007 Act § 159(b), 121 Stat. at 1343 (“No funds shall be drawn from the [United States] Treasury under this section beyond those necessary to fulfill the exclusive purpo se of this section,” namely “to enable the Secretary. . . to make a grant or grants to the State of Louisiana solely for the purpose of covering costs associated with otherwise uncompensated but eligible claims that were filed on or before July 31, 2007, under the Road Home program”).

4

Home Program funds would revert t o the United States Treasury. See Oral Arg. at 7:45-9:00, 27:52-28:35.

As legal support for the Eleventh Amendment objection,

Keegan relied on the dissenting opinion in Seminole Tribe of

Florida v. Florida , 517 U.S. 44, 78 (1996) (Stevens, J.,

dissenting), and Idaho v. Coeur d’Alene Tribe of Idaho , 521

U.S. 261 (1997). As the m

ajority notes, Keegan

“implausibl[y]” reads Coeur d’Alene to overturn Ex parte

Young. Maj. Op. at 11. Other than seeking an extension of the

“special sovereign interest” exception addressed in Coeur

d’Alene, Keegan cited no authority to suppor t an Eleventh

Amendment bar to plaintiffs’ claims where only federal funds

are involved and plaintif fs’ proposed form of relief will not

impose a m onetary loss on the state treasury. Because the

federal funds at issue remained in the United States Treasury,

Keegan failed to explain how they could be considered state

funds in any legal sense. 4 The Suprem e Court’s decision in

Edelman, 415 U.S. at 664-67 & n.11, and its progeny,see, e.g.,

Papasan v. Allain, 478 U.S. 265, 278-81 (1986), emphasize that

the Eleventh Amendm ent prohibits retroactive relief that

imposes a “monetary loss” on the state’s treasury. By f ailing

to oppose plaintiffs’ argument regarding the non-effect on the

state treasury, Keegan has effectively conceded the point

because “[t]he party asserting Eleventh Amendment immunity

bears the burden of proving its applicability.” Betts v. New

Castle Youth Dev. Ctr. , 621 F.3d 249, 254 (3d Cir . 2010)

(citation and internal quotation marks omitted).

4 OnSeptember 22, 2010, this court granted plaintiffs’ motion for a temporary injunction. Upon being advised by letter of March28, 2011 from counsel for plaintiffs and Keegan that serious settlem ent negotiations were underway, see D.C. Cir. Handbook Section II.C.2, the court vacated the injunction on March 29, 2011.

5
2. The objection that plaintiffs have no cognizable claim under the Fair Housing Act, because, according to Keegan, the Road Home Program is a com pensation grant program rather than a housing program, was a passing assertion in Keegan’s brief without legal citation. A passing reference to an unsupported narrative is insufficient to present an argument to this court. Cf., e.g., Bush v. District of Columbia, 595 F.3d 384, 388 (D.C. Cir. 2010) (citing FED. R. APP. P. 28(a)(9)(A)). Even assuming for purposes of argument that Keegan incorporated authority by referencing her m emorandum opposing plaintiffs’ motion for injunctive relief, the argument was confined to a footnote and a single cit ation involving a city’s failure to pr event dumping at a neighboring site. See Opp’n to Pls.’ Mot. for a TRO and Prelim. Inj., No. 1:08-cv1938, Doc. No. 57, at 16 n.5 (June 14, 2010) (citingCox v. City of Dallas, 430 F.3d 734, 740 (5th Cir. 2005), cert. denied, 547 U.S. 1130 (2006)). Thi s court ordinarily does not address an argument presented in a footnote. See, e.g., Am. Wildlands v. Kempthorne, 530 F.3d 991, 1001 (D.C. Cir. 2008). In any event, the cases cited by the Fifth Ci rcuit in Cox are likewise not on point. See Cox, 430 F.3d at 740 (citing Southend Neighborhood Improvement Ass’n v. County of St. Clair , 743 F.2d 1207, 1210 (7th Cir. 1984)). Plaintiffs’ content ion is different, namely that if the rem aining federal funds for the Road Home Program are not available to support the ultimate remedy in their action, then thousands of plaintiffs will forever lose the opportunity to obtaingrants for home repairs on a nondiscriminatory basis.
3. The evidentiary objection is persuasive beca use a factual premise underlying plaintiffs’ request for injunctive relief has been overtake n by e vents. In the district court, Keegan twice declined to dispute plaintiffs’ evidentiary proffer with “data about the adm inistration of the [Road Hom e] Program that would show whateffect the Option 1 formula has

6
had,” despite the district court’s finding of a prima facie case of disproportionate im pact. See Greater New Orleans Fair Hous. Action Ctr. v. U.S. Dep’t of Hous. & Urban Dev., 723 F. Supp. 2d, 1, 6 (D.D.C . 2010). The district court noted, moreover, that Keegan has not “demonstrate[d] that plaintiffs’ statistics or logic is flawed.” Id. Nonetheless, in moving for a preliminary injunction plaintiffs have the burden to demonstrate the likelihood of success on the merits of their disparate impact claim. See Gordon v. Hol der, 632 F.3d 722, 724 (D.C. Cir. 2011) (citing Winter v. Natural Res. Def. Council , 129 S. Ct. 365, 374 (2008)); Wash. Metro. Area Transit Comm’n v. Holiday Tours, Inc., 559 F.2d 841, 844 (D.C. Cir. 1977).
Keegan asserts on appeal that “the Road Home Program is a state-wide program” and thus “when [plaintiffs] do submit appropriate evidence, it will need to be on a state-wide level.” Def.-Appellee Cross-Appellant Robin Keegan Br. at 33. The majority credits this argument. Maj. Op. at 14. Keegan made the argument only cursorily and without citation to authority, and hence it is not properly presented for this court to resolve. See, e.g., Bush, 595 F.3d at 388 (citing F ED. R. APP. P. 28(a)(9)(A)).
Keegan does, however, present a persuasive argument with respect to the 2008 PolicyLink study 5 proffered by plaintiffs. As Keegan points out, the PolicyLink study does not consider the total current compensation package available to Option 1 applicants. Although the study notes the availability of Additional Com pensation Grants (“ACGs”) to low- and
5 Policy Link, A Long Way Home: The State of Housing Recovery in Louisiana 2008 (“PolicyLink”), http://policylink.info/threeyearslater/; see also affidavit of June 18, 2010, by the authors explaining the methodology.

7
moderate-income (“LMI”)6 applicants, at the time of the study ACGs were subject to a $50,000 cap. See PolicyLink at 41. Once this limitation was removed, effective January 2010, LMI applicants could receive an ACG in an amount subject only to the existing $150,000 cap for total Road Home Program grants. Keegan asserts on brief that “[s]ince minority and disabled families are more likely to be in the LMI category, the ACG grants adjust for any alleged disparity caused by the [pre-storm value] formula.” Def.-Appellee Cross-Appellant Robin Keegan Br. at 34. In other wor ds, with regard to LMI applicants, Keegan claims the rem oval of the ACG cap effect ively eliminated the average resource gap of nearly $50,000 identified by the PolicyLink study for all grant recipients whose awards were based on pre-storm value, which was larger for African-American applicants thantheir white counterparts.See PolicyLink at 42-43; see also Maj. Op. at 5-7.
During oral argum ent counsel for plaintiffs acknowledged that the removal of the $50,000 cap for ACGs resulted in LMI applicants “receiv[ing] the full amount [of their cost to rebuild] up to $150,000” under the Option 1 grant formula, making them “[in]eligible for any additional financial relief under the order that [plaintfifs] seek.” Oral Arg. at 39:0445. This leaves in plaintiffs’proposed class only those AfricanAmerican applicants or grantees who do not qualify for ACGs due to their income levels. See id. Plaintiffs claim there are 9,500 other homeowners in Orleans Parish who received initial grants based on pre-storm value but did not receive ACGs like LMI homeowners. See Pls.-Appellants’ Br. at 22. Keegan responds that only 19 applicants potentially fit into plaintiffs’ proposed class of non-LMI Af rican-American applicants in Orleans Parish whose grants were calculated using pre-storm
6 To qualify as LMI in Orleans Parish an applicant can have a maximum income of only $29,637.

8
value. See Def.-Appellee Cross-Appellant Robin Keegan Reply Br. at 30; see also Maj. Op. at 8. Regardless of which number is correct, neither the 2000 U.S. Cens us data proffered by plaintiffs, showing Afr ican-Americans in New Orleans are more likely than white hom eowners in New Orleans to own homes with lower values, nor the 2008 PolicyLink study, which groups all African-Am erican homeowners in Or leans Parish together regardless of income level, allow for disparate impact analysis as to non- LMI African-American homeowners in Orleans Parish. Plaint iffs’ anecdotal evidence, including congressional testimony, does not fill the gap. W ithout disaggregated data, the showing regarding African-Am erican applicants who are ineligible for ACGs is “too weak t o give [plaintiffs] the likelihood of success required for a preliminary injunction.” Maj. Op. at 3.
The court, as a result, need not address the other three preliminary injunction factors. See Apotex, Inc. v. FDA , 449 F.3d 1249, 1253-54 (D.C. Cir. 2006); Maj. Op. at 19. It bears noting, however, that the m ajority takes a strange turn in disposing of these appeals. In reaching Keegan’s evidentiary objection, the majority meanders into disparate impact theory – without citation to authority,e.g., Maj. Op. at 14-15, 17 – and into benchmark suppositions not briefed by the parties much less argued in the district court, id. at 17-18, and set up only to be rejected without record evidence on either side of the new constructs while ignoring support for plaintiffs’ evidentiary proffer, id. at 19. The m ajority’s statewide analysis requirement, id. at 14-15, suffers from similar flaws and, as noted, that argum ent by Ke egan is not properly before the court. Along the way, the majority even speculates that white recipients might have disparateimpact claims under a different, size-of-grant benchmark. Id. at 18. One m ight well wonder what purpose these m eanderings have other than t o posit hurdles for future disparate im pact claims. W hatever their

9
purpose, the comments by the majority are unnecessary to the resolution of these appeals. Because these issues were not argued by the parties in their briefs (Keegan’s passing assertions bare of authority fail to conform to FED. R. APP. P. 28(a)(9)(A)), and the appeals are based on a pre-discovery record inasmuch as Keegan refused to present statistical data on the Road Home Program to chal lenge plaintiffs’ evidentiary proffer in the district court, rum inations regarding disparate impact analysis and alternative statistical benchm arks are properly left for another day.