S Case 3:07-cv-00945 Document 1 Filed 05/29/2007 Page 1 of 14

IN THE UNITED STATES DISTRICT CO'

NORTHERN DISTRICT OF TEXAS

ORIGINAL

DALLASDIVISION

The Inclusive Communities Project, Inc., *

Plaintiff,

*

\\ )/

The United States Departmentof

*

Housing and Urban Development,

*

Defendant.

*

3 0 7 CV 0 945

COMPLAINT

1. This Court has jurisdiction pursuant to 28 U.S.C. § 1331.

2. The plaintiff Inclusive Communities Project ("ICP") is a fair housing focused non-

profit organization which works with families seeking to obtain and retain housing in

predominately non-minority areas of the Dallas metropolitan area. This is part of ICP's work to

break down barriers to the creation of racially and economically inclusive communities.

Specifically, ICP works with Black families participating in the Section 8 Housing Choice

Voucher program (the "Section 8 program") administered by the U.S. Department of Housing

and Urban Development ("HUD") and Dallas Housing Authority ("DHA"). ICP assists DHA

Section 8 program families who choose to lease dwelling units in non-minority areas with

counseling and financial assistance. ICP's office is located in the City of Dallas, Dallas County,

Texas.

3. The defendant is the United States Department of Housing and Urban Development

[HUD]. HUD is an executive agency of the United States of America. HUD is the federal

administrator of the Section 8 program.

4. The Section 8 program is the federal government's major program for assisting very

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low-income families to find and pay for decent, safe, and sanitary housing in the private housing market. The Section 8 families pay at least 30% of their income for the gross rent for a unit. Gross rent includes both the contract rent and the cost of the utilities for the unit. The Section 8 subsidy for the portion of the rent not paid by the Section 8 family is paid directly to the landlord. HUD is the federal agency responsible for administering the Section 8 program using federal funds. DHA is a local agency responsible for administering the Section 8 voucher program.
5. The Section 8 program legislation requires HUD to establish the fair market rents for existing or newly constructed rental dwelling units of various sizes and types in rental housing market areas. The market rents must be for units suitable for occupancy by persons assisted under the program. 42 U.S.C. § 1437f(o)(l)(B) incorporating 42 u.s.c. § 1437f(c)(1). The units suitable for occupancy by persons assisted by Section 8 are referred to as "standard quality, nonluxury housing." The fair market rental for standard quality, non-luxury housing is used to determine:
A. whether or not a unit is eligible for any subsidy assistance, and B. if the unit is eligible for subsidy, the amount of the rent paid by the participant and the amount of federal subsidy that can be paid on behalf of a Section 8 participant. 42 U.S.C. § 1437f(o)(2), (3). 6. DHA's Section 8 population is 86% Black and 6% White. 7. The Section 8 families participating in DHA's Section 8 program are not restricted to units in either the City of Dallas or Dallas County. As of October 1, 2006, DHA Section 8 households.were living in the non-Dallas County cities or towns of Allen, Flower Mound, Frisco, Heath, Highland Village, McKinney, and Plano. As of October 1, 2006 there were 443 DHA

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Section 8 households in Collin County and 270 DHA Section 8 households in Denton County. 8. DHA is required to administer the Section 8 program for any eligible unit located by a
DHA Section 8 participant in Collin, Dallas, Denton, Kaufman, Rockwall, Ellis, or Tarrant counties.
9. HUD is violating its obligation to set market area fair market rentals for the Dallas area Section 8 programs. Rather than use market areas to establish the fair market rental, HUD uses U.S. Census data for a 12 county region that is not a market area. The twelve counties are Collin, Dallas, Delta, Denton, Ellis, Hunt, Kaufman, Johnson, Parker, Rockwall, Tarrant, and Wise.
10. By selecting this multi-county region instead of the actual market areas, HUD is able to apply a formula that calculates the maximum rent for the Section 8 program in the Dallas area based on the lower rents in predominantly minority markets where many of the neighborhoods are blighted and have inadequate public and private services and facilities. This ghetto area rent is then applied by HUD to establish the maximum rent that can be paid under the Section 8 program in the higher rent predominantly White markets where there are few if any blighted neighborhoods and the public and private services and facilities are better than those in the minority blighted neighborhoods.
11. The 12 county area is not a single rental housing market area. The 12 county area consists of 8,990 square miles of land with 5,161,544 people. In fact, HUD sets three separate fair market rents for the area. Only the rent for the Dallas area is set using the 12 county region data. HUD sets separate rent levels in the four counties of Johnson, Parker, Tarrant, and Wise because of its determination that those counties are two separate rent setting areas. Johnson, Parker, and Tarrant counties are in one HUD rent setting area and Wise County is in a separate

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rent setting area. Despite HUD' s determination that these four counties are separate rent setting areas, forty percent (40%) of the units that HUD uses to calculate its rent levels for the Dallas area Section 8 program are in those four counties -Johnson, Parker, Tarrant, and Wise.
12. HUD does not calculate the rent levels for Johnson, Parker, Tarrant, and Wise counties using the rental units in the 12 county area. The FY 2007 Section 8 program rent levels for the HUD Fort Worth rent area is calculated using only the units in Johnson, Parker, and Tarrant County. The FY 2007 two-bedroom rent for these three counties in the Fort Worth rent Area is $745. The FY 2007 two-bedroom rent level for the HUD Wise County rent area is calculated using only the units in Wise County. That rent is $546. The FY 2007 rent levels for the eight county HUD Dallas rent area were calculated using the units in all twelve counties. The FY 2007 two-bedroom rent for the Dallas area is $798.
13. HUD applies the rent levels calculated using the 12 county region to the eight county HUD Dallas rent area. The eight counties are Collin, Dallas, Delta, Denton, Ellis, Hunt, Kaufman, and Rockwall. The eight county HUD Dallas rent area has 5,589 square miles of land with a population of 3,451,226. It is larger in land area than Rhode Island, Connecticut, or Delaware. It has more people than New Hampshire, Rhode Island, Connecticut, Delaware, or Vermont.
14. HUD publishes quarterly housing market studies that do not rely on either the 12 county or the eight county region for HUD's rental housing market analysis. HUD's quarterly housing market reports analyze the Dallas area and the Fort Worth area as separate housing market areas. U.S. Department of Housing and Urban Development Office of Policy Development and Research, "U.S. Housing Market Conditions." HUD's most recent report

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focusing on the housing market conditions in the Dallas area states that the Dallas Housing Market Area includes only Collin, Dallas, and Denton Counties. The report treats each individual county as a separate market. U.S. Department of Housing and Urban Development Office of Policy Development and Research, "Comprehensive Housing Market Analysis Dallas, Texas As of April 1, 2006," 2007.
15. The HUD Dallas rent area, the eight county area, includes five counties that are not included in the HUD "Dallas Housing Market Area" - Delta, Ellis, Hunt, Kaufman, and Rockwall counties. The eight county area includes three counties that are treated as separate housing markets in HUD's housing market analysis - Collin, Dallas, and Denton. U.S. Deparment of Housing and Urban Development Office of Policy Development and Research, "Comprehensive Housing Market Analysis Dallas, Texas As of April 1, 2006," 2007.
16. HUD's own criteria for inclusion or exclusion of an area from a broader geographical area for rent determinations for the Section 8 program show that the eight counties in the HUD Dallas rent area (Collin, Dallas, Delta, Denton, Ellis, Hunt, Kaufman, Rockwall) are not a single rental housing market. HUD states that the criteria for inclusion of a county or other area within a given HUD rent area is based on similarities of rent levels and median family income. A deviation of more than five percent (5%) for either of these characteristics is the HUD criterion for the exclusion of an area from a broader geographical region for its rent determinations.
17. Under HUD' s criteria, the median family incomes for seven of the eight counties deviate widely from the median family income for the HUD Dallas rent area. The median family income for the Dallas rent area is $56,325. The median family income for each of the eight counties except for Ellis deviates more than five percentage points from the rent area median

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family income. The Collin County $81,856 median family income deviates by +45 percentage points. The Dallas County $49,062 median family income deviates by - 13 percentage points. The Delta County $37,925 median family income deviates by - 33 percentage points. The Denton County $69,292 median family income deviates by + 23 percentage points. The Hunt County $44,388 median family income deviates by - 21 percentage points. The Kaufman County $50,354 median family income deviates by - 11 percentage points. The Rockwall County $71,448 median family income deviates by + 27 percentage points. Only the Ellis County $55,358 median family income which deviates by - 2 percentage points falls within the 5 percentage point HUD criterion for inclusion in the HUD Dallas rent area.
18. The widely disparate two-bedroom recent mover rents for each of the eight counties also contradict HUD's claim that the counties are a single rental housing market. The 2000 U.s. Census median rent for two-bedroom recent movers for each of the counties is: Collin County $880, Denton County $799, Rockwall County $763, Dallas County $738, Ellis County $616, Kaufman County $526, Hunt County $493, and Delta County $443. HUD's 2000 U.S. Census Base Rent for the Dallas rent area is $731. Only the $763 Rockwall County median rent and the $738 Dallas County median rent fall within 5% of HUD's $731 Base fair market rent for the Dallas area. The $880 Collin County median rent deviates by + 20%. The $799 Denton County median rent deviates by + 9%. The median rents in Ellis, Kaufman, Hunt, and Delta counties
deviate between - 16% and - 39%.
19. The use of market areas to establish fair market rentals would result in approximately the same percentage of units available in predominantly White markets as is available in predominantly minority markets. HUD's use of the 12 county area causes a disproportionately
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high number of units to be available in predominantly minority markets and a disproportionately low number of units to be available in predominantly White markets.
20. HUD's stated policy is that the Section 8 program fair rent levels for the Dallas area should make 50% of the rental dwelling units in the Dallas area available for Section 8 use.
21. HUD's Section 8 program rent setting policy and decisions do not make 50% of the rental dwelling units in the Dallas area housing markets available.
22. HUD's policy and decisions make only 30% of the rental units in predominantly White areas available for occupancy by persons assisted under Section 8.
23. HUD's policy and decisions make approximately 70% of the rental units in predominantly minority areas available for occupancy by persons assisted under Section 8.
24.The disparity between the percent of units made available by the HUD rents in White areas compared to the percent in minority areas is greater for specific markets. In the City of Piano only 13% of the two bedroom units are avaiiable. Piano is 73% White. In contrast, 56% of the two-bedroom units in the City of Dallas are available for Section 8 based on HUD's caicuiations. Dallas is 35% White.
25. HUD's rent setting formula and its application to the Dallas area Section 8 program steers Biack DHA Section 8 participants into the predominantly minority areas of the City of Dallas. HUD's rent setting formula and its application to the Dallas area Section 8 program steers Black Section 8 participants away from and out of the predominantly White suburban cities in the Dallas area.
26. HUD's racial steering makes dwelling units unavailable to Black DHA Section 8 participants and perpetuates racial segregation in the City of Dallas and in the Dallas area.

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27. HUD had many opportunities to revise its Section 8 program rent setting policy by using actual market areas instead of multi-county regions. HUD continuously chose not to make the revision but continued to use the multi-county regions.
28. In 1977, the U.S. Comptroller General notified HUD that HUD's decision to use metropolitan areas and other multi-county regions to set rent levels for the Section 8 program was questionable because it ignored important distinctions between metropolitan central cities and suburban areas as well as among suburban areas. The Comptroller General recommended the development of separate rent schedules for individual housing submarket areas instead of one rent schedule for an entire SMSA or county group. "Major Changes are Needed in the New Leased Housing Program," U.S. Comptroller General Report to Congress, January 28, 1977, pp. 21, 29. Nevertheless, HUD has continued to use multi-county regions to set Section 8 program rent levels.
29. In 1994, the U.S. Government Accounting Office found that the use of fair market rents for the Section 8 program based on smaller geographic areas rather than the multi-county region rent levels would better reflect the rent levels typically prevailing within those smaller areas. U.S. GAO, "Rental Housing Use of Smaller Market areas to Set Rent Subsidy Levels Has Drawbacks" June 1994, p.5. Nevertheless, HUD has continued to use multi-county regions to set FMR levels.
30. HUD's administrative record for the choice of the 12 county area and the policy guiding that choice is available through the HUD Policy Development and Research internet site. That record contains no facts showing that HUD considered the effects of its policy and decisions on the racial composition of the City of Dallas and the suburbs in the Dallas area. That record

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contains no facts showing that HUD considered the effects of its policy and decisions on the availability of dwellings in predominantly White areas for the Black DHA Section 8 voucher program participants. The HUD administrative record shows that HUD did not consider the effect of its policy and decisions on fair housing opportunities in the Dallas area nor did HUD use its choice of rent setting areas to further fair housing opportunities for DHA' s Black Section 8 voucher program participants in the Dallas area.
31. HUD first used the 12 county region as the basis for setting Section 8 maximum rents in the Dallas area on February 1, 2006.
ICP's standing
32. ICP seeks to create and obtain affordable housing opportunities in non-minority concentrated areas for persons eligible for low rent public housing and to provide the counseling and other forms of assistance to Black families seeking to use their DHA Section 8 voucher to move into low-poverty, non-minority concentrated areas throughout the Dallas metropolitan area. ICP provides mobility counseling and mobility assistance to Black Section 8 families seeking housing opportunities in non-minority concentrated and non-poverty concentrated parts of the Dallas Metropolitan area, the eligible areas.
33. The counseling assistance provided by ICP to Black DHA Section 8 participants includes pre-move family counseling and related financial assistance to assist the families who want to make and sustain a desegregative housing move. The mobility assistance includes negotiating with landlords as necessary to obtain units in the eligible areas at rents that are affordable by the Section 8 families and eligible for the Section 8 subsidy. The financial assistance provided to these families includes the payment of application fees, security deposits

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and utility deposits to assist families moving into housing that provides desegregative housing opportunities in non-minority, non-poverty concentrated areas, where such assistance is necessary to make the desegregative move possible. ICP also makes landlord incentive bonus payments to landlords in areas that provide desegregative housing opportunities in non-minority, non-poverty concentrated areas who agree to participate in DHA's Section 8 program when such incentives are necessary to secure housing for the Section 8 families. Section 8 families may also receive ICP assistance in the form of a contribution to their reasonable moving expenses in order to make a move in an eligible area.
34. ICP's clients are Black or African American families participating in the DHA's Section 8 Housing Choice Voucher Program.
Direct effects of the HUD rent setting policy on ICP 35. By making standard quality, non-luxury rental housing unavailable in non-minority market areas, HUD's rent setting policy directly and adversely affects ICP by: A. reducing the number of units that ICP can use to help its clients find housing in nonminority concentrated market areas, B. increasing the amount of time per client that ICP must spend in order to help its clients find and retain modest rental housing in non-minority concentrated areas, C. increasing the amount of financial assistance that ICP must spend in order to help its clients find and retain modest rental housing in non-minority concentrated market areas, and D. discouraging families with which ICP works from choosing dwelling units in market areas that offer racially integrated housing because of the cost factors involved in such a choice.

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Claims for Relief 36. The Section 8 program legislation requires HUD to use market areas when it establishes the fair market rents for the program. 42 U.S.C. § 1437f(o)(1)(B) incorporating 42 U.S.C. § 1437f(c)(1). HUD's actions using the multi-county regions to establish fair market rents violates HUD's legal obligations under that legislation. HUD's refusal to use market areas to establish fair market rents is arbitrary, capricious, an abuse of discretion, in excess of statutory authority, short of statutory right, and unwarranted by the facts. 37. 42 U.S.C. § 3608(e)(5) requires HUD to administer the rent setting activity in a maimer to affirmatively further the fair housing policies of the Fair Housing Act, 42 U.S.C. § 3601, et seq. HUD' s failure to consider the effects of its decisions on the racial composition of the areas affected and on the integrated housing choices available to Black DHA Section 8 program participants violates 42 U.S.C. § 3608(e)(5). 38. Plaintiff has a claim for relief for HUD's violations of 42 U.S.C. § 3608(e)(5), and 42 U.S.C. § 1437f(o)(1)(B) incorporating 42 U.S.C. § 1437f(c)(1) pursuant to 5 U.S.C. § § 702, 706. Sovereign immunity is waived by 5 U.S.C. § 702 for the injunctive relief requested in this
complaint.
Prayer for relief
39. Plaintiff requests the following relief: A. an injunction setting aside HUD's actions adopting the FY 2006 and FY 2007 Section 8 program rent levels for the HUD Dallas rent area and ordering HUD to implement the FY 2005 Dallas area Section 8 program rent levels for the non-Black and non-poverty concentrated areas in Collin, Dallas, and Denton counties until the additional relief set out below is implemented;

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B. an injunction prohibiting HUD from using multi-county regions as the basis for setting Section 8 program rent levels for the separate rental housing markets in the Dallas metropolitan area;
C. an injunction compelling HUD to use rental housing market areas instead of the multicounty regions when setting Section 8 program rent levels in the Dallas area;
D. an injunction compelling HUD to set separate Section 8 program rent levels for the separate rental housing markets at dollar amounts that provide DHA' s Black Section 8 voucher program participants equal access to rental housing in the White rental housing markets. Equal access is achieved by setting rent levels using the 50th percentile basis for each of the rental housing markets and eliminating the disparities between the number and percent of dwelling units made available in predominantly White rental housing markets and the number and percent of dwelling units made available in predominantly minority rental housing markets;
E. an injunction compelling HUD to consider and further fair housing opportunities for DHA's Black Section 8 voucher program participants when it sets Section 8 program rent levels;
F. an award of attorney fees, litigation expenses, and court costs, and G. any other appropriate injunctive relief.

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k Respectfully Submitted,
Michael M. Daniel State Bar No. 05360500 DANIEL & BESHARA, P.C. 3301 Elm Street Dallas, Texas 75226-1637 214-939-9230 Fax 214-741-3596
E-mail: daniel.michael@att.net
Attorney for Plaintiff
Laura B. Beshara State Bar No. 02261750 DANIEL & BESHARA, P.C. 3301 Elm Street Dallas, Texas 75226-1637 214-939-9230 Fax 214-741-3596 E-mail: laurabeshara@swbell.net Attorney for Plaintiff

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JS44 lIHI
¶0'3'9j)1JtJ tY292O97 _) CIVIL COVER SHEET

bylaw, eicept 4 pd Lw4ourL The JS—44 cMj cover sheet and the Informtion ntained herein neither replace nor supplement the filing and service of pleadings or other papers as required his form, approved by the Judicial Conference of the United States in September 1974, is required for the use

of the clEt.(
I. (a) PLAINTIFFS
-1_Y IQuSv

o{ - )j S 'typ O e civil docket sheet. (SEE INSTRUCTIONS ONTHE REVERSE OF THE FORM.) DEFENDANTS

(b) COUNTY OF RESIDENCE OF FiRST USTED PLAINTIFF
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COUNTY OF RESIDENCE OF FIRST US1tD DEFENDANT _______________________

NOTE

(IN US. PLAIN11FF CASES ONLY)
IN LAND CONDEMNATION CASES, USE THE LOCATION OF THE TRACT OF LAND INVOLVEI

(c) ATTORNE (FIRM NAME, ADDRESS, AND TEI.EPHONE NUMBER)
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II. BASIS OF JURISDICTION (PLACEANXINONEBOXONLY) III. CITIZENSHIP OF PRINCIPAL PARTIES CPtACEANXINONEBOXFORPtJJNTIFF

(For Diversity Cases Only)
PIE DEF

AND ONE BOX FOR DEFENDAN1)
PTF DEF

i U.S. Government

03 Federal Question

Citizen of This State 0 1 0 I Incorporated or Principal Place 04 04

Plaintiff

(U.S. Government Not a Party)

of Business In This State

U.S. Government
' Defendant

04 DiversIty
(Indicate Citizenship of Parties in Rem Ill)

Citizen of Another State 02 02 Incorporated and PrincipalPlace 05 05
of Business In Another State

Citizen or Subject of a 03 03 Foreign Nation

06 06

ForeIgn Country

IV. NATURE OF SUIT (PLACEAN 'XIN ONE BOX ONL)9

CONTRACT
0 iie ln.aanc.
0 120 Mann. 0 130 MNer Act O 140 NegotIable IflSthil)eflt
& EJdQfltUflt O 150 Recovery of Overpayment
0151 Medlca'. Act o 152 Recovery of Delarited
Student (EXd. Veten.i5)
0153 Recovery of Overpayment of Veterans Benefits
Q 160 Stodtholders' Stats 0 190 Other Contract o 195 CorlIract Product LiabSty
REAL PROPERTY
0210 Land Condemnation O 620 Forectoewe 0230 Rent Le55. & 3)eclmflt 0240 Toils to Laid C)215 Tort product Liability 029042 Other Real Property

TORTS

FORFEITURE/PENALTY

PERSONAL INJURY
0310 Airplane 0 815 Aliptete oduct
LIbiJItY
0320 Ma.it. Libel & SIiiid&
0330 Federal Employers' LiabilIty
see Mailne a ses Marine Product
LiabilitY
a 350 Motor Vel*ie 0355 Motor Vehicle
Product Liability
0300 Other personal Inpay

PERSONAl. INJURY
0362 Personal Iriiy — Med. Pprectice
0355 PersOnal Injtxy — PrOdUCt Liability
0 308 Asbeetos Per5cnei Ir*ay PrOdUCt LiabilIty
PERSONAl. PROPERTY a 370 Other Fraud 0371 Tnih In Lending
o eo ooer Personsi
a u Dwe Properly a'9 Product Liability

CIVIL RIGHTS PRISONER PETITIONS

0441 Adng
,C) 442 Employment
t443 HoAucsminmgo!dedons
D 444 y/efa'9 0440 Other CIvil Rights

0 810 MotIons to Vacate Sentence
HABEAS CORPUS: 0830 General
0 835 Death & Penalty ier
0550 ClvilRIghtz O 555 PrIson Condition

0 lIe Agtksitwe
0620 Other Food & Diug 0 825 Drug Related 5.12w.
Of PIOPMY 21 USC 681
0630 Liquor L..s 0 040 RB. & Truck 0050 AIrline Reg 0 850 Oooijp.tlonel
SelelyjHaeith
o s.o oeisr
LABOR
0710 Felr Labor Standards ACt
0720 Labor'Mgmt RelatIons
0730 LabcrlMgmt Reporting & Disdoewe Act -
0740 Rallew
9790 Other Labor Uligellori
0191 EmpLRet.Inc. Sec*zlty Act

BANKRUPTCY
C 462 Appeal 28 USC 158
0 423 'Mlhdrawal 28 USC 157
PROPERTY RIGHTS
0820 Copytlghte
0063°0 PTeteentm
SOCIAL SECURITY
0581 HLA (1396Sf) 0862 Black Lizig (923) 0863 Di%C/DiWW (406(9))
0.54 SSIDe XVI
0055 RSI (406(9))
FEDERAL TAX SUITS
a 810 Toatre. D(US.'.—PI.1ntIff
0571 IRS —ThirdParty
26 USC 7009

OTHER STATUTES
0 400 State Reappoitionmslt 0410 AiitiUuot 0 430 Banks and Banking a 4s0 Comm.rceIICC BaSes/etc.
0430 DepOrtation 470 Racketeer Iniluenced and
Corrupt OrganiZations
810 Selective Service
••9• 0 550 S.cudlieeommodities/
0 875 Ciattomer Challenge 12USD 3410
0 591 ioiatwel Acts a e92 Economic Stabilization Act D3 Environmental Mailers a ese Energy Allocation Act OiiS Freedom of
IratITnMk., Act 0 500 Appeal of Fee Detemehallon
a' Equal Access to Justice
950 Coratfiullonality of State Statilee
0 690 Other S00.*ory Actions

V. ORIGIN

(PLACEM)C'INONEBOXONLY)

AppealtoDistrict

iOriPgrionceaeldIng

ozRemovedfrom State Court

sRemandedfrom oReinstatedor

Appellate Court

Reopened

Transferred from
Osanotherdistrict
(speCify)

eMUttidiStriCt Litigation

Judge from
oiMaIStrate
Judgment

VI. CAUSE OF ACTION (CITE THE U.S. CIVIL STATUTE UNDER WHICH YOU ARE FlUNG AND WRITE BRIEF STATEMENT OF CAUSE

DO NOT CITE .PJRISDICTIONAI. STATUTES UNI.ESS DIVERSITY)

JFiOtvcs&. ki-41oczc,. Ci4i TAA' cP—'--i.\.c-I-R . -t (LCc,hoL.41s'"2 37PCc") J4 ,

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VII. REQUESTED IN COMPLAINT:

CHECK IF ThIS ISA CLASS ACTION a UNDER F.R.C.P. 23

DEMAND $

CHECK YES only if demanded in complaint
JURY DEMAND: 0 YES NO

VIILRELATED CASE(S) (See instructions): IF ANY
DATE

SIGNATURE OF ATORNEYOF RECORD

DOCKETNUMBER

FOR OFFICE Uet ONlY
RECEIPT 0 ___________ AMOUNT ____________APPL'VING IFP ____________ JUDGE ___________________ MAG. JUDGE

 
 Case 3:07-cv-00945 Document 8 Filed 10/02/2007 Page 1 of 34

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

THE INCLUSIVE COMMUNITIES PROJECT, INC.,

Plaintiff, v.

07-CV-945-L

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT,

Defendant.

DEFENDANT’S MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION; ACCOMPANYING
BRIEF; CERTIFICATE OF INTERESTED PERSONS

For the reasons set forth in the accompanying brief, defendant, the United States Department of

Housing and Urban Development, hereby respectfully moves this Court, pursuant to Fed. R. Civ. P.

12(b)(1) and Local Rule 7.1, to dismiss this action for lack of subject matter jurisdiction. Pursuant to

Local Rule 7.4, a Certificate of Interested Persons is attached.

Dated: October 2, 2007

Respectfully submitted,

PETER D. KEISLER Assistant Attorney General

RICHARD B. ROPER United States Attorney

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 james.todd@usdoj.gov Attorneys for Defendant

Case 3:07-cv-00945 Document 8 Filed 10/02/2007 Page 2 of 34

TABLE OF CONTENTS

INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

STATUTORY BACKGROUND.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1. Owner Selection of Tenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2. Fair Market Rents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

3. Fair Market Rents in the Dallas Area. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

4. Plaintiff’s Complaint.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

STANDARD OF REVIEW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

A. Justiciability of Plaintiff’s Claims Against HUD. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

1. Article III Standing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

2. Mootness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

B. Standard of Review under the Administrative Procedure Act.. . . . . . . . . . . . . . . . . . 9

ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

I.

PLAINTIFF’S CLAIMS AGAINST HUD ARE NOT JUSTICIABLE. . . . . . . . . . . . . . . . 10

A. Plaintiff Lacks Standing to Enjoin Past Injuries, Assert General Grievances, Pursue Claims of Third Parties, or Assert Speculative Claims. . . . . . . . . . . . . . . . . 10

1. Plaintiff Lacks Standing to Obtain Injunctive Relief for Past Injuries. . . . . . 10

2. Plaintiff Lacks Standing to Assert Generalized Grievances. . . . . . . . . . . . . 10

3. Plaintiff Lacks Standing to Bring Claims on Behalf on Its Clients. . . . . . . . 11

4. Plaintiff’s Proposed Remedies Will Not Redress Its Injuries. . . . . . . . . . . . 12

B. Plaintiff’s Challenges to HUD’s Past Fair Market Rents Are Moot. . . . . . . . . . . . . 15

II. THIS COURT HAS NO JURISDICTION OVER PLAINTIFF’S CLAIMS BECAUSE THE APA PROVIDES NO WAIVER OF SOVEREIGN IMMUNITY HERE. . . . . . . . . . 16

A. HUD’s Determination of the Dallas Market Area Is Committed to Agency Discretion and is Unreviewable by this Court.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

B. The Court Lacks Jurisdiction Over Plaintiff’s Claims Against HUD Because Plaintiff Has Another Remedy in a Court. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

C. The Court Should Dismiss Plaintiff’s Section 3608(e)(5) Claims Because HUD Has Neither Failed to Act Nor Wrongfully Withheld Action . . . . . . . . . . . . . 23

CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

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TABLE OF AUTHORITIES CASES
Allen v. Wright, 468 U.S. 737 (1984). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Arizonans for Official English v. Arizona,
520 U.S. 43 (1997). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Association for Retarded Citizens v. Dallas County Mental Health & Mental Retardation
Center Board of Trustees, 19 F.3d 241 (5th Cir. 1994).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Brazos Electric Power Co-operative v. Federal Energy Regulatory Commission,
205 F.3d 235 (5th Cir. 2000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Bullard v. Webster, 623 F.2d 1042 (5th Cir.1980).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 19 Burton v. Central Interstate Low-Level Radioactive Waste Compact Commission,
23 F.3d 208 (8th Cir. 1994). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 15 Christopher Village, Ltd. Partnership v. Retsinas, 190 F.3d 310 (5th Cir. 1999). . . . . . . . . . . . 16, 17, 19 Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971). . . . . . . . . . . . . . . . . . . . . . . . . . 17 City of Abilene v. Environmental Protection Agency, 325 F.3d 657 (5th Cir. 2003). . . . . . . . . . . . . . . . . 9 City of Los Angeles v. Lyons, 461 U.S. 95 (1983).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Cole v. General Motors Corp., 484 F.3d 717 (5th Cir. 2007).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Cramer v. Skinner, 931 F.2d 1020 (5th Cir. 1991). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Ellison v. Connor, 153 F.3d 247 (5th Cir. 1998). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 18, 19 Godwin v. Secretary of the United States Department of Housing and Urban Development,
356 F.3d 310 (D.C. Cir. 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21, 22 Haile v. Town of Addison, 264 F. Supp. 2d 464 (N.D. Tex. 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Hainze v. Richards, 207 F.3d 795 (5th Cir. 2000).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Harris v. City of Houston, 151 F.3d 186 (5th Cir. 1998)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Heckler v. Chaney, 470 U.S. 821 (1985).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 16, 25 Hercules Inc. v. United States, 516 U.S. 417 (1996).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Hill v. Group Three Housing Development Corp., 799 F.2d 385 (8th Cir. 1986). . . . . . . . . . . . . . . . . . 13 James v. City of Dallas, 254 F.3d 551 (5th Cir. 2001). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 11, 12
Kowalski v. Tesmer, 543 U.S. 125 (2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Case 3:07-cv-00945 Document 8 Filed 10/02/2007 Page 4 of 34
Lane v. Peòa, 518 U.S. 187 (1996). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Larson v. Valente, 456 U.S. 228 (1982). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Lincoln v. Vigil, 508 U.S. 182 (1993). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 19 Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 9, 11, 12 Marinoff v. United States Department of Housing and Urban Development,
892 F. Supp. 493 (S.D.N.Y. 1995), affirmed, 78 F.3d 64 (2d Cir.1996). . . . . . . . . . . . . . . . 21, 22 Marsh v. Oregon Natural Resources Council, 490 U.S. 360 (1989). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Martinez v. United States,
333 F.3d 1295 (Fed. Cir. 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21, 22 NAACP v. Secretary of the United States Department of Housing and Urban Development,
817 F.2d 149 (1st Cir. 1987). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Norton v. Southern Utah Wilderness Alliance, 542 U.S. 55 (2004). . . . . . . . . . . . . . . . . . . . . . . . . passim Pelican Chapter, Associated Builders & Contractors, Inc. v. Edwards,
128 F.3d 910 (5th Cir. 1997). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Plumley v. Landmark Chevrolet, Inc., 122 F.3d 308 (5th Cir. 1997). . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Powers v. Ohio, 499 U.S. 400 (1991). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Preiser v. Newkirk, 422 U.S. 395 (1975).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 11, 13 Project B.A.S.I.C. v. Kemp, 947 F.2d 11 (1st Cir. 1991). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Resident Council of Allen Parkway Village v. United States Department of Housing
and Urban Development, 980 F.2d 1043 (5th Cir. 1993). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Richland Park Homeowners Association, Inc. v. Pierce, 671 F.2d 935 (5th Cir. 1982). . . . . . . . . . . . . 15 Rothe Development Corp. v. United States Department of Defense, 194 F.3d 622 (5th Cir. 1999). . . . . 9 Sable Communications of California., Inc. v. Federal Communications Commission,
827 F.2d 640 (9th Cir. 1987). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21, 22 Schlesinger v. Reservists Committee to Stop the War, 418 U.S. 208 (1974). . . . . . . . . . . . . . . . . . . . . . 11 Seafarers International Union of North America v. National Marine Services, Inc.,
820 F.2d 148 (5th Cir. 1987). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26 (1976). . . . . . . . . . . . 8, 12, 15, 16 Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998).. . . . . . . . . . . . . . . . . . . . . . . . . . 8, 12 Suntex Dairy v. Block, 666 F.2d 158 (5th Cir. 1982). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 18, 19, 25

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Thompson v. United States Department of Housing and Urban Development, 348 F. Supp. 2d 398 (D. Md. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Town of Sanford v. United States, 140 F.3d 20 (1st Cir. 1998). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21, 22 Transohio Savings Bank v. Director, Office of Thrift Supervision,
967 F.2d 598 (D.C. Cir. 1992). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Turner v. Secretary of the United States Department of Housing and Urban Development,
449 F.3d 536 (3d Cir. 2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 21, 22 United States v. Sherwood, 312 U.S. 584 (1941). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Veldheon v. United States Coast Guard, 35 F.3d 222 (5th Cir. 1994). . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Walker v. United States Department of Housing and Urban Development,
No. 85-1210 (N.D. Tex. Jan. 20, 1987).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Warner v. Cox, 487 F.2d 1301 (5th Cir. 1974). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 20 Warth v. Seldin, 422 U.S. 490 (1975). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Webster v. Doe, 486 U.S. 592 (1988). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Williams v. Hanover Housing Authority, 871 F. Supp. 527 (D. Mass. 1994).. . . . . . . . . . . . . . . . . . . . . 14
STATUTES
5 U.S.C. §§ 701 et seq. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim 28 U.S.C. § 1491(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 42 U.S.C. § 1437f. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim 42 U.S.C. § 3608(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 23, 24, 25 42 U.S.C. § 3613(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 43 U.S.C. § 1782(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Pub. L. No. 105-276, § 545, 112 Stat. 2461, 2596.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
REGULATIONS 24 C.F.R. § 888. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 4, 19 24 C.F.R. § 982.307. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 14 24 C.F.R. § 982.503. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
FEDERAL REGISTER NOTICES
70 Fed. Reg. 50138 (Aug. 25, 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

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70 Fed. Reg. 57654 (Oct. 3, 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 70 Fed. Reg. 9778 (Feb. 28, 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 70 Fed. Reg. 32402 (June 2, 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 71 Fed. Reg. 7382 (Feb. 14, 2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
LEGISLATIVE HISTORY S. Rep. No. 752, 79th Cong., 1st Sess., 26 (1945). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

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INTRODUCTION In what they characterize as an effort to “break down barriers to the creation of racially and economically inclusive communities,” Compl. ¶ 2, plaintiff has sued the U.S. Department of Housing and Urban Development (“HUD”) on account of HUD’s role in setting Section 8 payment levels in the Dallas area. Plaintiff brings suit under the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701 et seq., alleging violations of Section 8 of the U.S. Housing Act, 42 U.S.C. § 1437f(o) (the “voucher program”), and the Fair Housing Act, 42 U.S.C. § 3608(e)(5). However, as set forth below, this Court lacks subject matter jurisdiction over plaintiff’s claims because plaintiff cannot satisfy the case or controversy requirement of Article III of the U.S. Constitution, and because no waiver of sovereign immunity encompasses its claims. First, plaintiff lacks Article III standing to challenge HUD’s actions because plaintiff: (i) seeks injunctive relief for past injuries, (ii) asserts generalized grievances, (iii) asserts injuries on behalf of third parties, and (iv) requests relief that will not redress its injuries or relies on mere speculation about what private landlords, who are not before this Court, might do if this Court were to enjoin HUD’s activities. In addition, plaintiff’s challenge is, at least in part, now moot. Second, even if plaintiff had standing to assert any of its claims, this Court would still lack subject matter jurisdiction because Congress has not waived sovereign immunity under APA for these claims. Rather, the APA provides no waiver of immunity over plaintiff’s Section 8 claims against HUD because Congress has committed HUD’s rent-setting activities to the agency’s discretion and has set no standards by which this Court could review those actions. Moreover, the APA bars suit because plaintiff has another adequate remedy at law, namely, suit against the Dallas area housing authorities over their rent setting role in the Dallas area. Finally, the APA bars suit for plaintiff’s Fair Housing Act claims against HUD because that Act provides no discrete mandate for HUD to follow in carrying out its role in the Section 8 program.
STATUTORY BACKGROUND In 1974, Congress amended the United States Housing Act of 1937 (“Housing Act”) to create what is known as the Section 8 program. Through Section 8’s housing choice voucher program, Congress hoped to “ai[d] low-income families in obtaining a decent place to live,” 42 U.S.C.

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§ 1437f(a), by subsidizing private landlords who rent to low-income tenants. Under the program, tenants make rental payments based on their income and ability to pay; and public housing authorities (“PHAs”), funded by HUD, make “assistance payments” to the private owners in an amount calculated to make up the difference between the tenant’s contribution and a “contract rent” agreed upon by the owner and the PHA. The subsidy is implemented through Housing Assistance Payment (“HAP”) contracts entered into between the PHA and a property owner which extensively regulate an owner’s management of the property. 42 U.S.C. § 1437f(o)(7). HAP contracts set the maximum allowable rent an owner may charge and the subsidy amount the PHA pays, and require owners to maintain the property in a safe and sanitary condition. Id. §§ 1437f(c)(1), 1437f(o)(2), (8).
1. Owner Selection of Tenants The voucher program reflects Congress’s desire to encourage the participation of the private sector in providing low-income housing by leaving management decisions (which includes the selection of tenants) to the private owner. In that regard, the Housing Act mandates that contracts between a PHA and a private owner “shall provide that the . . . selection of families . . . shall be the function of the owner.” Id. § 1437f(o)(6)(B).1 HUD’s regulations for the voucher program also recognize the private owner’s discretion in the selection of tenants. See, e.g., 24 C.F.R. §§ 982.307(a)(2) (“The owner is responsible for . . . selection of the family to occupy the owner’s unit. At or before PHA approval of the tenancy, the PHA must inform the owner that . . . selection for tenancy is the responsibility of the owner.”). See also id. § 982.452 (same). Thus, the language used in the regulations clearly makes a distinction between a tenant’s “eligibility” to participate in the voucher program, cf. id. § 982.201(a) (“The PHA may only admit an eligible family to the program”), and the owner’s “selection” of that tenant. Thus, an owner generally has no obligation to participate in the Section 8 program and can refuse to accept a voucher, even if that means an otherwise acceptable family is unable to lease the unit.
1 Previously, Section 8 contained a “take-one, take-all requirement” under § 8(t) of Act, providing that once an owner accepted a certificate or voucher holder in any multifamily project, that owner could not reject other eligible tenants. However, Congress suspended § 8(t) from 1996 through 1998 by appropriations acts, and permanently repealed the provision by the Quality Housing & Work Responsibility Act, Pub. L. No. 105-276, § 545, 112 Stat. 2461, 2596 (1998).
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Put another way, a landlord is free to take as many or as few Section 8 tenants as he may choose, just as he is free to take no Section 8 tenants at all.
2. Fair Market Rents Section 8 requires HUD to set the “fair market rent[] . . . annually for existing . . . units of various sizes . . . in the market area.” 42 U.S.C. § 1437f(c)(1). While Congress has established standards for HUD’s determination of FMRs, see, e.g., id. (requiring FMRs to be adjusted annually on October 1 of each year (hereafter the “fiscal year”) based on the “most recent data”), it has provided no standards or guidance defining the term “market area.” See id. See also Decl. of Kurt G. Usowski in Supp. of Def. Mot. to Dismiss (“Usowski Decl.”) ¶ 4 [submitted herewith]. Accordingly, HUD has used the discretion provided to it by Congress to establish multi-county metropolitan areas as defined by the Office of Management and Budget (“OMB”) as the principal basis for determining the market area, or “FMR Area,” while reserving the authority to make limited exceptions. Id. See 24 C.F.R. § 888.113(d). Congress has had the opportunity to direct HUD to use something other than multi-county Metropolitan Areas as the basis for FMR computations, or otherwise to provide standards for determining FMR Areas with each annual HUD appropriations bill, during the periodic process of generally reauthorizing HUD’s programs, and in multiple other pieces of incidental legislation affecting HUD programs. Usowski Decl. ¶ 4. However, with the exception of specific statutory direction to establish FMRs for Westchester County, New York, and for Monroe County, Pennsylvania, Congress has not done so. Id. See 42 U.S.C. § 1437f(c)(1). HUD generally bases FMRs on the fortieth percentile of standard quality rental units occupied by “recent movers” in the market, or “FMR” area. 24 C.F.R. § 888.113(b). A fortieth percentile rent means that forty percent of units in the FMR Area rent for the FMR or less, while sixty percent rent for the FMR or more. Usowski Decl. ¶ 9. However, in the late 1990s, HUD became concerned about the ability of voucher tenants to access all parts of large metropolitan housing markets, especially in markets where affordable housing was concentrated in high poverty areas. Id. Accordingly, in 2000, HUD issued an interim rule establishing criteria for setting the FMR at the fiftieth percentile rent in large metropolitan FMR Areas that met specific criteria for size, concentration of housing renting at or below the fortieth percentile FMR, and concentration of voucher tenants in particular neighborhoods.
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See 24 C.F.R. § 888.113(c). In the voucher program, the FMR that HUD sets for each Metropolitan Area forms the basis for
determining a PHA’s “payment standard amount,” which the PHA uses to calculate the maximum monthly subsidy for an assisted family to rent a particular unit. Id. § 1437f(o)(1)(B); 24 C.F.R. § 982.503(b). The voucher program allows a PHA to vary the payment standard amount between 90 and 110 percent of HUD’s published FMR for the area, id. § 1437f(o)(1)(B); 24 C.F.R. § 982.503(b), and with HUD approval, the PHA can also vary the payment standard amount above 110 percent for certain high rent areas. Id. § 1437f(o)(1)(D); 24 C.F.R. § 982.503(c) (“exception payment standards”). See also Usowski Decl. ¶ 6.
From the inception of the Section 8 voucher program up until fiscal year (“FY”) 2004, Congress funded the voucher program based on a number of vouchers that were allocated among PHAs by formula established by HUD. Usowski Decl. ¶ 5. Under this funding mechanism, if HUD increased the FMR or a PHA increased its payment standard, additional HUD funds went to affected PHAs to cover the increased rent subsidies. Id. In FY2004 and through to the present, Congress changed the funding mechanism for vouchers to a dollar-based budget. Id. Now, increases in FMRs or payment standards may mean that a PHA has to serve fewer tenants because paying higher rent subsidies per voucher means fewer vouchers can be supported by a given annual funding allocation. Id. Accordingly, PHAs face a tradeoff between the number of vouchers than can be supported and the amount of the subsidy its Section 8 vouchers can provide. Id. ¶ 6.2
3. Fair Market Rents in the Dallas Area HUD’s FY2005 Dallas two-bedroom FMR, based on the fiftieth percentile rent, as plaintiff
2 In the current eight-county Dallas FMR Area, the Housing Choice Voucher program is operated by fourteen local PHAs, each of which, because vouchers are portable, has more than ninety percent of its tenants living throughout the Dallas FMR Area, plus the Texas Department of Community Affairs, which has about 39 percent of its tenants throughout the Dallas FMR Area. Id. ¶ 7. The local PHAs in the Dallas area are associated with particular cities or counties, but their charters may allow for wider jurisdictions. Under the Consent Decree entered in Walker v. HUD, No. 85-1210 (N.D. Tex. Jan. 20, 1987), for example, the Housing Authority of the City of Dallas (“Dallas Housing Authority,” or “DHA”) has wide jurisdiction to assist tenants with finding housing throughout the Dallas and Fort Worth metropolitan areas.
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correctly alleges, was $868. See 70 Fed. Reg. 9778 (Feb. 28, 2005).3 In FY 2006, HUD’s FMRs
implemented new OMB-defined Metropolitan Statistical Areas (“MSA’s”) as the basis for HUD’s
FMR Areas, see 70 Fed. Reg. 32402 (June 2, 2005), although with some exceptions to the new
OMB-defined areas. Id. See also Usowski Decl. ¶ 13. HUD defined these exceptions in a way to
minimize FMR changes due to altered geography, primarily because of the combination of OMB’s old
metropolitan areas into larger MSAs. 70 Fed. Reg. at 32403; Usowski Decl. ¶ 13. In general, HUD
decided to use the new OMB-defined area as the basis for FMR Areas, but used subareas following the
lines of its FY2005 FMR Areas when sub-area base fortieth percentile rents from the 2000 Census
differed by more than five percent from the base fortieth percentile rent of the OMB-defined area. Usowski Decl. ¶ 13.4 Essentially, HUD divided OMB-defined MSAs that had combined HUD’s
FY2005 FMR Areas when they had substantially different FMRs. Id.
In Dallas, OMB’s new principal definition of the Metropolitan Area is a combined Dallas-Fort
Worth-Arlington Metropolitan Statistical Area (the “Dallas MSA”). Id. ¶ 12. OMB’s Dallas MSA
consists of 12 counties: Collin, Dallas, Delta, Denton, Ellis, Hunt, Johnson, Kaufman, Parker,
Rockwall, Tarrant, and Wise. Id. ¶ 14. Based on FY 2005 FMR Area definitions, HUD divided the
Dallas MSA into three “HUD Metro FMR Areas” because two of the candidate sub-areas, which were
separate FMR Areas in FY2005, had 2000 Census base rents that differed by more than five percent from the 2000 census base rent of the twelve-county area. Id.5 Because the remaining eight-county
3 HUD’s FY 2005 FMR for the Dallas area was the result of changes to the Dallas FMR that began in FY 2001, when HUD, after determining that the Dallas FMR Area qualified under HUD’s new fiftieth percentile FMR regulations, set the Dallas two-bedroom FMR at $830, up from $749 in FY2000, which had been based on the fortieth percentile rent. Id. ¶ 9. HUD continued to use fiftieth percentile rents in FY 2002, FY 2003, and FY 2004, which set the Dallas area FMR at $810, $850, and $871, respectively. Id. ¶ 10.
4 Prior to FY 2006, HUD’s Dallas FMR Area was based on the OMB-defined Dallas Primary Metropolitan Statistical Area. Usowski Decl. ¶ 8.
5 One new FMR Area was Wise County, which under the old OMB Metropolitan Area definitions and HUD’s FMR Area definitions in FY2005, was a non-metropolitan county. Id. ¶ 15. Since it had sufficient 2000 Census data to compute a 2000 Census base rent, and the base rent differed by more than five percent from the twelve-county area base rent, HUD made Wise County a separate FMR Area. Id. Because the other formerly non-metropolitan county added by OMB, Delta County, did not have a sufficient 2000 Census count of two-bedroom, standard-quality, recent-mover, rental units to compute a census base rent of its own, HUD kept it as part of the Dallas FMR Area. Id.
HUD also made the three counties in the new OMB-defined area that were in the old Fort Worth FMR Area (Johnson, Parker, and Tarrant) a separate FMR Area because, again, the 2000 Census base rent for
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area (Collin, Dallas, Delta, Denton, Ellis, Hunt, Kaufman, and Rockwall) did not have a 2000 Census fortieth percentile base rent that differed by more than five percent from the twelve-county area, HUD used the twelve-county area to set the base rent for the Dallas FMR Area for FY2006. Id. ¶ 17. Based on the fiftieth percentile rent, the two-bedroom FY 2006 FMR for the Dallas area would have been $824. Id. However, two other events unrelated to HUD’s use of new FMR Areas occurred that had the effect of reducing the revised final FY2006 two-bedroom FMR to $733. Id.
First, as part of the development of the proposed FY2006 FMRs, HUD conducted another survey of the Dallas area. Id. ¶ 18. The survey covered the higher-rent, eight-county area only, not the twelve-county area. The result reduced the fiftieth percentile two-bedroom FMR to $777, as published in the unrevised final FMRs on October 3, 2005. See 70 Fed. Reg. 57654 (Oct. 3, 2005). The decline in rent for the Dallas FMR Area, as measured by the survey, directly reflects the very soft rental housing market that existed in Dallas at the time. Usowski Decl. ¶ 18.
Second, on August 25, 2005, HUD determined, after a review required under HUD regulations that govern fiftieth percentile FMR determinations, that the Dallas FMR Area was no longer eligible to remain a fiftieth percentile FMR Area because the Dallas area PHAs’ reporting rates on the location of voucher tenants was too low to be considered reliable. See 70 Fed. Reg. 50138 (Aug. 25, 2005). See also Usowski Decl. ¶ 19. Accordingly, on February 14, 2006, HUD reduced the FMR in the Dallas FMR Area to $733, based on the fortieth percentile rent, for the remainder of FY 2006. See 71 Fed. Reg. 7832 (Feb. 14, 2006); Usowski Decl. ¶ 19.6
HUD’s current FY2008 FMRs, which became effective yesterday, October 1, 2007, not only uses the fiftieth percentile rent but also employ data from the new American Community Survey (“ACS”), a continuously administered survey operated by the Census Bureau. Id. ¶ 21. In evaluating the ACS data, HUD compared fiftieth percentile, standard-quality, recent-mover rents for the twelve-county OMB-defined area, and the eight-county Dallas FMR Area. Id. The number for the
the three counties differed by more than five percent from the twelve-county area base rent. Id. ¶ 16. 6 Although HUD based FY 2006 Dallas Area FMR on the fortieth percentile rent, by the time HUD
was developing the FY2007 FMRs, Dallas-area PHAs had improved their reporting on voucher tenant locations sufficiently to be eligible again for a fiftieth percentile FMR. Usowski Decl. ¶ 20. HUD’s FY2007 Dallas Area two-bedroom FMR, based on the fiftieth percentile rent, was $798. Id.
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smaller area was only 1.8 percent higher than the data for the larger area, and as such, was not different by more than was likely to be accounted for by sampling error. Id. In other words, the two-bedroom fiftieth percentile rent for the OMB-defined twelve-county Dallas MSA is statistically equivalent to the two-bedroom fiftieth percentile rent for HUD’s eight-county Dallas FMR Area as measured by 2005 ACS data. Id. Accordingly, HUD’s final FY2008 Dallas Area two-bedroom FMR, based on the fiftieth percentile rent, is currently $871. Id.
4. Plaintiff’s Complaint Plaintiff alleges that HUD’s use of the Dallas MSA to calculate the FMR for FY 2005 and FY 2006 has made “standard quality, non-luxury rental housing unavailable in non-minority market areas.” Compl. ¶ 35. Plaintiff further alleges that this injures it by “reducing the number of units that ICP can use to help its clients find housing,” and increasing the amount of “time” and “financial assistance” that it must spend “to help its clients find and retain modest rental housing in non-minority concentrated market areas.” Id. ¶ 35A-C. Further, plaintiff alleges that this injures its clients, who are not before this Court, by “discouraging [them] from choosing . . . units in market areas that offer racially integrated housing . . .” Id. ¶ 35D. To redress its alleged injuries, plaintiff seeks an injunction: (i) first, setting aside FMRs for fiscal years 2006 and 2007 for all of the Dallas FMR Area and instead using HUD’s FY 2005 FMR in certain non-minority parts of the Dallas FMR Area, id. ¶ 39A, and then (ii) requiring HUD to use undefined “rental housing market areas” as the basis for its FMR determinations that provide black DHA housing voucher participants “equal access” to “White rental housing markets,” id. ¶ 39C, D, (iii) requiring HUD to use the “[fiftieth] percentile basis” for its FMR calculations, id. ¶ 39D, and (iv) “eliminating the disparities between the number and percent of dwelling units made available in predominantly White rental markets and the number and percent of . . . units made available in predominantly minority rental . . . markets,” and providing “fair housing opportunities.” Id. ¶ 39D, E.
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STANDARD OF REVIEW A. Justiciability of Plaintiff’s Claims Against HUD
1. Article III Standing Plaintiff’s 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. Cole v. Gen. Motors Corp., 484 F.3d 717, 721 (5th Cir. 2007). 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 not before the court,” 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)). Accord Ass’n for Retarded Citizens v. Dallas Cty. Mental Health & Mental Retardation Ctr. Bd. of Trustees, 19 F.3d 241, 243 (5th Cir. 1994). “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). See also Pelican Ch., Assoc. Builders & Contractors, Inc. v. Edwards, 128 F.3d 910, 916 (5th Cir. 1997). Moreover, these three core requirements of standing are substantially more difficult to establish where, as here, plaintiff is not itself the direct object of the particular government action or inaction challenged in the lawsuit. Lujan, 504 U.S. at 562.
2. Mootness “To qualify as a case fit for federal-court adjudication, ‘an actual controversy must be extant at all stages of review, not merely at the time the complaint is filed.’” Arizonans for Official English v. Ariz., 520 U.S. 43, 67 (1997) (quoting Preiser v. Newkirk, 422 U.S. 395, 401 (1975)). A request for injunctive relief generally becomes moot upon the happening of the event sought to be enjoined. Seafarers Int'l Union of N. Am. v. Nat’l Marine Servs., Inc., 820 F.2d 148, 151-52 (5th Cir. 1987). At that point, no order of the court can affect the rights of the parties with regard to the requested relief. DeFunis v. Odegaard, 416 U.S. 312, 316 (1974).
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B. Standard of Review under the Administrative Procedure Act A party may not bring suit against the United States absent an explicit waiver of sovereign immunity by Congress. U.S. v. Sherwood, 312 U.S. 584, 586 (1941); Drake v. Panama Canal Com’n, 907 F.2d 532, 535 (5th Cir. 1990). Such waiver “must be unequivocally expressed in statutory text . . . [and] will be strictly construed, in terms of its scope, in favor of the sovereign.” Lane v. Peña, 518 U.S. 187, 192 (1996). See also Rothe Dev. Corp. v. U.S. Dep’t of Defense, 194 F.3d 622, 624 (5th Cir. 1999). Accordingly, plaintiff cannot maintain any claims against HUD absent a waiver of sovereign immunity that covers those claims, and plaintiff is 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). The only sovereign immunity waiver that could apply to plaintiff’s claims appears in the APA. 5 U.S.C. §§ 701 et seq. See Rothe Dev. Corp., 194 F.3d at 624. The APA allows for limited judicial review of “[a]gency action made reviewable by statute and final agency action,” 5 U.S.C. § 704, but precludes such review when agency actions are “committed to agency discretion by law,” id. § 701(a)(2); Heckler v. Chaney, 470 U.S. 821, 830 (1985), or when there is another “adequate remedy in a court.” Id. § 704; Warner v. Cox, 487 F.2d 1301, 1304 (5th Cir. 1974). Thus, for example, an APA action that might otherwise be properly brought against a federal agency is barred if the plaintiff can obtain its remedy against a non-federal party. Turner v. Sec’y of HUD, 449 F.3d 536, 539-41 (3d Cir. 2006). When judicial review is available, a reviewing court must uphold the agency’s action unless it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). See also Marsh v. Ore. Natural Res. Council, 490 U.S. 360, 375 n.21 (1989); City of Abilene v. EPA, 325 F.3d 657, 664 (5th Cir. 2003). This standard is narrow and deferential, and only requires that the agency articulate a rational relationship between the facts found and the decision made. City of Abilene, 325 F.3d at 664. The Court’s only role is to determine “whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.” Brazos Elec. Power Co-op. v. FERC, 205 F.3d 235, 240 (5th Cir. 2000) (citation and internal punctuation omitted). The APA also permits a reviewing court to “compel agency action unlawfully withheld or
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unreasonably delayed.” 5 U.S.C. § 706(1). However, review of agency inaction “can proceed only where a plaintiff asserts that an agency failed to take a discrete agency action that it is required to take.” Norton v. So. Utah Wilderness Alliance (“SUWA”), 542 U.S. 55, 64 (2004) (emphasis in original). 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.” Id. (emphasis in original).
ARGUMENT I. PLAINTIFF’S CLAIMS AGAINST HUD ARE NOT JUSTICIABLE
A. Plaintiff Lacks Standing to Enjoin Past Injuries, Assert Generalized Grievances, Pursue Claims of Third Parties, or Assert Speculative Claims 1. Plaintiff Lacks Standing to Obtain Injunctive Relief for Past Injuries
Plaintiff lacks standing to request an injunction requiring HUD to set FMRs “using the [fiftieth] percentile basis.” Compl. ¶ 39D. To obtain injunctive relief such as plaintiff seeks under the APA, plaintiff must show that it is likely to suffer future injury by the defendant and that the sought after relief will prevent that future injury. City of Los Angeles v. Lyons, 461 U.S. 95, 102 (1983) (“Past exposure to illegal conduct does not in itself show a present case or controversy.”) (citation and quotation marks omitted). See also James v. City of Dallas, 254 F.3d 551, 563 (5th Cir. 2001) . In this case, HUD has set both the FY 2007 and FY 2008 FMR for the Dallas Area based on the fiftieth percentile rent. Usowski Decl. ¶¶ 20-21. Plaintiff has not only failed to make any allegations about HUD’s use of the fortieth percentile rent to set the FY 2006 Dallas Area FMR but also has failed to even allege that HUD is likely to set future Dallas Area FMR based on anything other than the fiftieth percentile rent. See Compl. passim. Accordingly, plaintiff cannot invoke this Court’s remedial powers to enjoin HUD’s past actions. Accord Lyons, 461 U.S. at 102; James, 254 F.3d at 563.
2. Plaintiff Lacks Standing to Assert Generalized Grievances Plaintiff also lacks standing to request an injunction “eliminating the disparities between the number and percent of dwelling units made available in predominantly White rental housing markets and the number and percent of . . . units made available in predominantly minority rental housing markets.” Compl. ¶ 39D. Since plaintiff itself obviously does not allege that it holds or has applied for
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a Section 8 voucher, this request cannot be construed as anything other than an improper “sweeping request to generally eradicate the effects of discrimination.” James, 254 F.3d at 568. 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.”). Because such a request “is not specifically targeted to remedy [plaintiff’s] personal injuries,” James, 254 F.3d at 568, plaintiff does not have standing to pursue this claim. In James, the Fifth Circuit addressed plaintiffs’ request that HUD be ordered “to remedy ‘the loss of housing units caused by the HUD funded housing code enforcement and housing code enforcement related demolitions of repairable family units as well as the resulting blight.’” Id. In dismissing the claim against HUD for lack of jurisdiction, the Fifth Circuit found this claim was “‘a generalized grievance shared in substantially equal measure by all or most citizens,’” and, as such, “cannot provide standing to request injunctive relief.” Id. (quoting Warth v. Seldin, 422 U.S. 490, 499 (1975)). Like the James plaintiffs, plaintiff’s request here to eliminate racial disparities in housing opportunities is nothing more than a generalized grievance, which is insufficient to confer standing.
3. Plaintiff Lacks Standing to Bring Claims on Behalf on Its Clients Plaintiff does not have standing to assert claims on behalf of its clients, that HUD’s actions “discourag[e] families with which ICP works from choosing . . . units in market areas that offer racially integrated housing . . .” Compl. ¶ 35D. Generally, a party “‘must assert his own rights, and cannot rest his claim to relief on the legal rights of third parties.’” Kowalski v. Tesmer, 543 U.S. 125, 129 (2004) (quoting Warth, 422 U.S. at 499). Moreover, a party seeking third-party standing to assert the rights of another may do so only when it demonstrates a “‘close’ relationship with the person who possesses the right, and when it shows a “‘hindrance’ to the possessor’s ability to protect his own right.” Id. at 130 (quoting Powers v. Ohio, 499 U.S. 400, 411 (1991). In this case, plaintiff has not even alleged that it has a “close relation” with its clients, or that they have been “hindered” from raising claims themselves. See Compl. passim. Accordingly, plaintiff fails to establish that it has standing to assert claims on
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behalf of its clients. See Kowalski, 542 U.S. at 131-32 (2004).7 4. Plaintiff’s Proposed Remedies Will Not Redress Its Injuries
Plaintiff lacks standing to challenge HUD’s actions because it cannot establish that the judgment it seeks would redress the injuries it has identified. “[A] plaintiff satisfies the redressability requirement when he shows that a favorable decision will relieve a discrete injury to himself.” Cramer v. Skinner, 931 F.2d 1020, 1027 (5th Cir. 1991) (quoting Larson v. Valente, 456 U.S. 228, 243 n. 15 (1982)). To satisfy the redressability component of standing, plaintiff would have to allege (and ultimately prove) that it is “‘likely, as opposed to merely speculative,’” James, 254 F.3d at 564 (quoting Lujan, 504 U.S. at 561), that a judgment invalidating HUD’s FY 2006 and FY 2007 Dallas FMRs, or requiring it to use new and varying FMRs within the Dallas area, would redress its injuries. See Compl. ¶ 39 Prayer for Relief. This plaintiff cannot do.
First, plaintiff’s request that this Court “order[] HUD to implement the FY 2005 Dallas area Section 8 program rent levels for the non-Black and non-poverty concentrated areas in Collin, Dallas, and Denton counties,” Compl. ¶ 39A, will not redress plaintiff’s alleged injuries simply because HUD’s FMR for the Dallas area for fiscal year 2008, now in effect, is $871, Usowski Decl. ¶ 21, and is higher than the FY 2005 FMR of $868, id., that plaintiff has requested. Compl. ¶ 39A. “To obtain standing for injunctive relief, a plaintiff must show that there is reason to believe that he would directly benefit from the equitable relief sought.” Plumley v. Landmark Chevrolet, Inc., 122 F.3d 308, 312 (5th Cir. 1997). Since plaintiff cannot make this showing here, it lacks of standing. Accord Steel Co., 523 U.S. at 107.
Second, plaintiff cannot establish that, were this Court to order HUD to establish separate FMR Areas for predominately White areas of the Dallas Metropolitan Division, Compl. ¶ 39B-D, a likelihood that its clients would be able to obtain housing in those areas. Plaintiff’s allegation of injury is an indirect one because HUD, by plaintiff’s own admission, through the voucher program, “assist[s] very-low income families [with] find[ing] and pay[ing] for . . . housing in the private housing market,
7 Nor is it the case that plaintiff may assert associational standing to raise the claims of its client. See Juvenile Matters Trial Lawyers Ass’n v. Judicial Dep’t, 363 F. Supp. 2d 239, 247 (D. Conn. 2005) (association cannot claims on behalf of its clients but only its members).
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Compl. ¶ 4 (emphasis added), rather than directly providing housing to these families. Thus, if plaintiff’s clients are unable to find housing with a Section 8 voucher, it would be because the private owners of the apartments, and not defendant, had not selected them. See 42 U.S.C. § 1437f(o)(6)(B); 24 C.F.R. § 982.307(a)(2).
“[I]ndirectness 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 defendant[’s] actions, or that prospective relief will remove the harm.’” Simon, 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 – and perhaps on the response of others as well. The existence of one or more of the essential elements of standing 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 to control or to predict. . . . 504 U.S. at 562 (emphasis by court) (quotation and citation omitted). Because the PHAs set the payment standard amount, and because it is the private landlords in predominantly White areas who directly cause plaintiff’s alleged injury, presumably because they lowered their participation rates in the Section 8 program, plaintiff’s burden to establish standing is “substantially more difficult.” Simon, 426 U.S. at 44-45. In this case, nothing in Section 8 program requires a landlord in a predominately White area to accept plaintiff’s clients as renters, regardless of the FMR set by HUD or the payment standard amount set by the PHA for Section 8 vouchers holders. In order to encourage owner participation in the housing voucher program, nothing in the Housing Act nor in its implementing regulations requires an apartment owner to select an eligible tenant. 42 U.S.C. § 1437f(d)(1)(A); id. § 1437f(o)(6)(B). See also 24 C.F.R. § 982.307(a)(2); id. § 982.452. As the Eighth Circuit has noted about the Section 8 program, “the tenant-selection process is subtle and depends on an amalgam of elements, some of which are factual but many of which are purely subjective appraisals by the [private owners] based upon their experience with the difficult and sensitive task of evaluating the [responsibility of tenant
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applicants]. . . . [T]here is no set of facts which, if shown, mandate a decision favorable to the individual.” Hill v. Group Three Hous. Dev. Corp., 799 F.2d 385, 393 (8th Cir. 1986). Further, nowhere in the Section 8 nor in its regulations is it specified that a PHA must even enter into contracts with owners to participate in the program in every part of its jurisdictional area. Williams v. Hanover Hous. Auth., 871 F. Supp. 527, 532 (D. Mass. 1994). Nor does HUD delineate precisely how a PHA should determine its jurisdictional area. Id. Thus, plaintiff cannot make the “substantially more difficult showing” of a likelihood that a favorable judgment will result in more apartment owners in predominantly White areas participating in the Section 8 program, or that owners in predominantly White areas already participating in the Section 8 program will increase their participation, in such a way as to allow one of plaintiff’s clients to move into such an area, or move into such an area at less cost of time and financial resources to plaintiff. Simon, 426 U.S. at 44-45.
To be clear, the ability of the remainder of plaintiff’s requested relief to remedy its injuries is dependent on plaintiff’s mere speculation regarding what private owners “might” do if HUD’s determination of the Dallas FMR Area is enjoined, and constitutes exactly the type of impermissible speculation the courts have held insufficient to establish standing. For example, in Allen v. Wright, 468 U.S. 737, 751, 758 (1984), the Supreme Court held that it was overly speculative as to whether requiring the IRS to enforce its rules which prohibited tax breaks to racially discriminatory private schools, would prevent segregated schools, because 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. Similarly, in Simon, 426 U.S. at 43-44 (1976), 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. Id.
Further, Burton v. Cent. Interstate Low-Level Radioactive Waste Compact Com’n, 23 F.3d 208 (8th Cir. 1994), 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.
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(emphasis added) The Court explained that: [a]lthough 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, which is not a party to this action, 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). See also Haile v. Town of Addison, 264 F. Supp. 2d 464, 467 (N.D. Tex. 2003) (“Plaintiff has made no showing that if the Court found the tax to be illegal, that the [thirdparty] fuel providers, who are not subject to this action, would decrease the price of fuel by $0.12.”). Like the Allen, Simon, Burton and Haile plaintiffs, even if plaintiff here could establish that private owners in predominantly White areas have reduced their participation in the Dallas area PHAs’ voucher programs because of HUD’s use of the Dallas MSA to calculate the FMR, it remains merely speculative whether those same owners would increase their participation in the Dallas area PHAs’ voucher programs if this Court were to set aside HUD’s determination.
In sum, plaintiff cannot obtain injunctive relief for past injuries, cannot assert generalized grievances, and cannot assert claims on behalf of its clients. Moreover, none of the redress sought by plaintiff for its remaining claims would likely redress any of plaintiff’s injuries. Accordingly, plaintiff lacks standing to pursue its claims, and this action must be dismissed against HUD for lack of subject matter jurisdiction.
B. Plaintiff’s Challenges to HUD’s Past Fair Market Rents Are Moot Plaintiff’s challenges to HUD’s FMR for the Dallas area for both FY 2006 and FY 2007, Compl. ¶¶ 12, 39A, are moot. “A precondition to asserting a claim for a declaratory judgment is that a viable case or controversy exist.” Hainze v. Richards, 207 F.3d 795, 802 (5th Cir. 2000). Plaintiff has requested this Court set aside HUD’s Dallas area FMRs for both FY 2006 and FY 2007. However, because HUD’s fiscal year ends on September 30 of the calendar year, 42 U.S.C. § 1437f(c)(1); Usowski Decl. ¶ 3, its FY 2008 FMR is now in effect. Id. ¶ 21. Accordingly, no case or controversy remains before this Court concerning HUD’s FY 2006 and 2007 FMRs. See Richland Park Homeowners Ass’n, Inc. v. Pierce, 671 F.2d 935, 942 (5th Cir. 1982) (“In view of the fact that the
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complex has been built and the construction company has been paid, we see no way that HUD’s already-satisfied construction financing commitments can now be ‘set aside.’ . . . Thus, at least with respect to this aspect of the plaintiffs’ claim for relief, the claim is now moot.”).
To be clear, this is not a case in which plaintiff has sought a declaration that HUD’s past practices violated the Housing Act or Fair Housing Act. Cf. Christopher Vill., Ltd. v. Retsinas, 190 F.3d 210, 315 (5th Cir. 1999). Rather, by seeking only prospective relief for past actions, Compl. ¶ 39, plaintiff’s claims concerning HUD’s FY 2006 and FY 2007 FMRs for the Dallas area are moot, and this Court cannot “read into [plaintiff’s] complaint additional requests for relief and then proceed to an adjudication on the merits.” Harris v. City of Houston, 151 F.3d 186, 191 (5th Cir. 1998)) (quotation marks omitted). Accordingly, this Court should dismiss plaintiff’s challenges to HUD’s past rent setting policies as moot. II. THIS COURT HAS NO JURISDICTION OVER PLAINTIFF’S CLAIMS BECAUSE
THE APA PROVIDES NO WAIVER OF SOVEREIGN IMMUNITY HERE A. HUD’s Determination of the Dallas Market Area Is Committed to Agency
Discretion and is Unreviewable by this Court Even without regard to plaintiff’s standing problems, plaintiff cannot obtain relief under the APA because its waiver of sovereign immunity is unavailable to plaintiff. The APA’s waiver of sovereign immunity allows any person “adversely affected or aggrieved by agency action within the meaning of a relevant statute” to obtain “judicial review thereof,” 5 U.S.C. § 702, but the Act precludes judicial review when the “agency action is committed to agency discretion by law.” Id. § 701(a)(2). An action is committed to agency discretion when “no judicially manageable standards are available for judging how and when an agency should exercise its discretion. . . .” Heckler, 470 U.S. at 830. In Heckler, the Court explained the exception’s limitation on the judicial review available under the APA: [E]ven where Congress has not affirmatively precluded review, review is not to be had if the statute is drawn so that a court would have no meaningful standard against which to judge the agency’s exercise of discretion. In such a case, the statute (“law”) can be taken to have “committed” the decisionmaking to the agency’s judgment absolutely. This construction avoids conflict with the “abuse of discretion” standard of review in § 706–if no judicially manageable standards are available for judging how and when an agency should exercise its discretion, then it is impossible to evaluate agency action for “abuse of discretion.” 470 U.S. at 830. Thus, only if Congress “has provided meaningful standards for defining the limits of
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[agency] discretion” is there “law to apply” under § 701(a)(2). Heckler, 470 U.S. at 834. Accordingly, the Court has “emphasized that § 701(a)(2) requires careful examination of the statute on which the claim of agency illegality is based.” Webster v. Doe, 486 U.S. 592, 600 (1988).
Although the APA’s exception to judicial review is “very narrow,” it applies “in those rare instances where ‘statutes are drawn in such broad terms that in a given case there is no law to apply.’” Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410 (1971) (citing S. Rep. No. 752, 79th Cong., 1st Sess., 26 (1945)). See also Suntex Dairy v. Block, 666 F.2d 158, 163-64 (5th Cir. 1982). Of course, an agency’s own regulations may provide the requisite “law to apply,” if those regulations provide standards for a court to apply or require an evidentiary record. Ellison v. Connor, 153 F.3d 247, 251, 253 (5th Cir. 1998) (citing cases). By contrast, “statements issued by an agency to advise the public prospectively of the manner in which the agency proposes to exercise a discretionary power,” Lincoln v. Vigil, 508 U.S. 182, 197 (1993) (quotation marks and citation omitted), are unreviewable. In addition, the Fifth Circuit has determined that practical policy issues also should be considered. See Bullard v. Webster, 623 F.2d 1042, 1046 (5th Cir. 1980) (“[t]here must be a weighing of the need for, and feasibility of, judicial review versus the potential for disruption of the administrative process.”).
In addressing Section 8’s project-based assistance program, the Fifth Circuit has noted that the circuit courts have unanimously held that Congress has committed to HUD full discretion in determining whether to grant or deny a rent increase in its administration of the Section 8 program and that the decision on the amount of any increase is unreviewable. See Christopher Vill., Ltd. P’ship, 190 F.3d at 315. The court further noted that, in determining rent increase requests, HUD must delicately balance the competing interests of the property owner, the tenants, and the federal government as payor of the Section 8 subsidy. Id. Because of the lack of judicially manageable standards, the Fifth Circuit concluded that courts should generally refuse to review HUD’s substantive decisions regarding a rent increase. Id. (citation omitted). In addition, the court found that HUD must also take into account factors that bear on rental rates such as property taxes, utility rates, and the average rental rate in the area, see 42 U.S.C. § 1437f (c)(2)(B), which the courts are ill-equipped to second guess. Christopher Vill., 190 F.3d at 315.
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Moreover, the Fifth Circuit has expressly held agency actions unreviewable in situations like the present dispute. In Suntex Dairy, the court addressed a statute that required USDA to decide whether issuance of an order would “tend to effectuate the declared policy” of the relevant Act, which was, inter alia, to regulate milk marketing. Suntex Dairy, 666 F.2d at 160-61. The court found that, even though one statutory provision did not grant complete discretion to the agency, because it also required the agency to hold a public hearing and imposed “rigorous obligations on the [agency] to develop an evidentiary record” to support its determination, id. at 164, another provision of the same law only required the agency to determine whether a proposed order was “‘the only practical means of advancing the interests of the producers.’” Id. at 161 (quoting regulations). The court held that this second provision gave the agency unreviewable discretion because it did not require the consideration of specific factors, the making of findings, or the development of any additional evidentiary record. Id. at 164-65. In so holding, the court found that without required findings or an evidentiary record, the judiciary was in no position to gainsay the agency’s determination as arbitrary, capricious, or an abuse of discretion. Id. at 166.
In Ellison, 153 F.3d 247, the Fifth Circuit addressed an Army Corps of Engineers’ refusal to issue permits allowing plaintiffs to build camp-homes on their property in the Atchafalaya floodway. Id. at 249. Examining both the authorizing statute and the agency’s regulations, the court found, first, that the authorizing statute did not contain any standards or evidentiary requirements governing the issuance of regulations and, second, that the regulation itself did not contain any standards governing the agency’s decisionmaking. Id. at 253. Rather, the regulation simply required the agency to determine whether the property in question will be “‘required for public use’” during the period of the contemplated grant and “‘whether the requested grant will interfere with any operations of the United States.’” Id. (quoting regulations). Because these standards were so general, and because the regulation did not require the agency to develop any factual record to support its determination, the court held that the agency’s refusal to issue permits was committed to agency discretion and thus unreviewable. Id.
In this case, Section 8 of the Housing Act sets out HUD’s authority to enter into HAP contracts with public housing agencies, and sets out the standards for maximum rents, rent adjustments, monthly
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assistance payments, the selection of tenants, inspections, and the like. See 42 U.S.C. § 1437f(c)(1)(2); id. § 1437f(o). Apart from authorizing HUD to set and adjust maximum monthly rents “in the market area suitable for occupancy by persons assisted under this section,” id. § 1437f(c)(1) (emphasis added), the statute provides absolutely no standards and requires no evidentiary findings on which a court could base its review of the rationality of HUD’s determination of what constitutes such a “market area.” Cf. Christopher Vill., 190 F.3d at 315; Suntex Dairy, 666 F.2d at 164-65. Indeed, the statute does not even define what a market area is, and the circuit courts, as noted above, have unanimously held that HUD’s rent adjustments are unreviewable determinations that are committed to agency discretion. Christopher Vill., 190 F.3d at 315. Thus, the Housing Act commits the determination of what constitutes a market area to HUD’s discretion.
Similarly, HUD’s Section 8 implementing regulations set out HUD’s procedures for setting and adjusting FMRs, see 24 C.F.R. § 888, and govern the rest of the Section 8 program. See id. § 982. Again, however, apart from simply defining an FMR Area as an OMB Metropolitan Statistical Area, id. § 888.113(d), and granting HUD the authority make exceptions to it (which it has done here in creating the Dallas FMR Area), see id., HUD’s regulations provide absolutely no standards and requires no evidentiary findings on which this Court could base its review of HUD’s determination of what constitutes a particular FMR Area. Id. Thus, like the Housing Act, HUD’s implementing regulations commit to the agency’s discretion the determination of what constitutes an FMR Area. Thus, that determination is unreviewable by a court. Accord Ellison, 153 F.3d at 253.
Further, HUD’s policy statement that “Metropolitan subparts of new areas that had previously had separate FMRs were assigned their own FMRs if their 2000 Census Base Rents differed by more than five percent from the new OMB area 2000 Census Base Rent,” 70 Fed. Reg. 32401, 32403 (June 2, 2005); see Usowski Decl. ¶ 13, is just that, a policy statement–a “statement[] issued by an agency to advise the public prospectively of the manner in which the agency proposes to exercise a discretionary power.” Lincoln, 508 U.S. at 197. It is not a binding regulation, Ellison, 153 F.3d at 253, and it does not require any evidentiary record. Id. Thus, it does not provide a sufficient standard on which a court could review the rationality of HUD’s determination of what constitutes the Dallas FMR Area.
Finally, the same policy considerations that make review of HUD’s rent setting impractical -19-

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apply with equal, if not greater, force to its determination of FMR Areas. Accord Bullard, 623 F.2d at 1046. Accordingly, HUD’s determination of what constitutes the Dallas FMR Area is committed to agency discretion and is unreviewable by this Court. Thus, the APA provides no waiver of sovereign immunity in this instance.
B. The Court Lacks Jurisdiction Over Plaintiff’s Claims Against HUD Because Plaintiff Has Another Remedy in a Court
As noted above, the APA’s waiver of sovereign immunity applies only if there is “final agency action for which there is no other remedy in a court.” 5 U.S.C. § 704 (emphasis added). 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.”); Warner, 487 F.2d at 1304 (“Specifically exempted from [APA] review is agency action for which there is some ‘other adequate remedy in a court.’”) (quoting 5 U.S.C. § 704). Because plaintiff has other adequate remedies at law for each of its alleged injuries, the APA provides no waiver of sovereign immunity here.
First, plaintiff alleges that HUD’s past FMR for fiscal years 2006 and 2007 have injured it by “increasing the amount of time per client that ICP must spend,” and “increasing the amount of financial assistance that ICP must spend,” “in order to help its clients find and retain modest rental housing in non-minority concentrated market areas.” Compl. ¶ 35B-C. The APA does not provide a waiver of sovereign immunity for these injuries because plaintiff has another adequate remedy in court, namely, a suit for money damages in the Court of Federal Claims. See Warner, 487 F.2d at 1304. Congress has provided the Court of Federal Claims with jurisdiction to “render judgment upon any claim against the United States founded . . . upon . . . any Act of Congress or any regulation of an executive department, . . . for liquidated or unliquidated damages in cases not sounding in tort.” 28 U.S.C. § 1491(a)(1) (“Tucker Act”). There can be no question that plaintiff’s alleged past losses of “time” and “financial assistance,” were it to prevail, would be fully compensable in the form of money damages. See Warner, 487 F.2d at 1304. Further, plaintiff can make no argument that these are continuing losses, because its requested relief is an order for “HUD to implement the FY 2005 Dallas area Section 8
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program rent levels,” Compl. ¶ 39A, which are lower than the current fiscal year 2008 Dallas area rent levels. Usowski Decl. ¶ 21. Accordingly, the APA provides no waiver of sovereign immunity here.
Second, § 704 bars the remainder of plaintiff’s allegations against HUD’s rent setting policy because plaintiff can maintain an action directly against Dallas area Housing Authorities, alleging many of same facts and seeking many of the same remedies. Numerous circuits have held that § 704 bars suit against HUD under the APA when a plaintiff has the ability to pursue a remedy against a private party for discriminatory practices under § 813 of the Fair Housing Act, 42 U.S.C. § 3613(a)(2). See Turner, 449 F.3d at 540; Godwin v. Sec’y of HUD, 356 F.3d 310, 312 (D.C. Cir. 2004); Marinoff v. HUD, 892 F. Supp. 493, 497 (S.D.N.Y. 1995), aff’d, 78 F.3d 64 (2d Cir.1996). Moreover, “[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 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’ns of Cal., Inc. v. FCC, 827 F.2d 640, 642 (9th Cir. 1987).
Here, HUD’s regulations implementing the voucher program provide the Dallas area PHAs with several options to increase or decrease area rents in order to increase housing opportunities in nonminority areas. Usowski Decl. ¶ 6. First, the PHAs have the discretion to vary rents between 90 and 110 percent of HUD’s published FMR (the “basic range”), see 24 C.F.R. § 982.503(b)(1)(i), and the discretion to establish separate payment standard amounts within the basic range for a designated part of an FMR Area. Id. § 982.503(b)(1)(ii). HUD approval is not required to establish a payment standard amount in the basic range. Id. Second, the PHAs have the discretion, with approval from HUD’s regional field office, to vary rents between 110 to 120 percent of HUD’s published FMR in an “exception area” if the PHAs can show that median rents in those areas are that much higher. Id. § 982.503(c)(2)(ii). Any PHA with jurisdiction in the exception area may use the HUD-approved exception payment standard amount. Id. § 982.503(c)(1). Third, the PHAs, with approval from HUD’s Assistant Secretary for Public and Indian Housing, may set rents in an exception area that could
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include up to an entire county above 120 percent of HUD’s published FMR to help families find housing outside areas of high poverty, id. § 982.503(c)(3)-(4)(i)(A), again if the PHA can show median rents in those areas are that much higher. Id. Each of these payment exceptions provide the Dallas area PHAs, and not HUD, discretion to vary rents appropriately across an FMR Area.
To be clear, the roles and authority of HUD and of PHAs in this regard are entirely distinct. Project B.A.S.I.C. v. Kemp, 947 F.2d 11, 20 (1st Cir. 1991). In Project B.A.S.I.C., the First Circuit explained that:
HUD and [the PHA] are distinct entities, each representative of a separate sovereign and each with its own mission. That these missions may occasionally coincide is not enough to erase their separateness. Furthermore, HUD’s ability to direct [the PHA]’s disbursements is limited by a network of specific contractual and regulatory provisions. Limited powers of this kind, without more, are hardly the stuff of legal identification. 947 F.2d at 20.8 Here, because Congressional appropriations for Section 8 subsidies provide a fixed sum to each Dallas area PHA, rather than a set contribution for each Section 8 participant, Usowski Decl. ¶ 5, the PHAs must decide for themselves how to allocate those funds, as increasing payments for rental units must either be offset by decreasing payments for units in other areas, or must be offset by maintaining fewer Section 8 program participants. Id. Thus, the decision whether to vary the rent within HUD’s Dallas FMR Area pursuant to this regulatory scheme only lies with the PHAs. If plaintiff believes, as it alleges in its complaint, that there is a basis for varying rents above HUD’s published FMR for the Dallas area, and it believes that the Dallas area PHAs are unreasonably refusing to do so, plaintiff can bring suit directly under Section 8 against the PHAs to compel them to implement these variances. Because this would provide an adequate remedy to plaintiff for the nonmonetary injuries identified in its complaint, see Compl ¶ 35, APA § 704 bars suit against HUD, accord Turner, 449 F.3d at 540; Godwin, 356 F.3d at 312; Marinoff, 892 F. Supp. at 497, regardless of whether plaintiff ultimately would succeed in its suit against the PHAs. Town of Sanford, 140 F.3d at 23; Martinez, 333 F.3d at 1320; Sable Commc’ns of Cal., Inc., 827 F.2d at 642.
8 To be clear, the remaining holdings in Project B.A.S.I.C. are no longer good law in light of SUWA, 542 U.S. at 64, discussed infra.
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C. The Court Should Dismiss Plaintiff’s Section 3608(e)(5) Claims Because HUD Has Neither Failed to Act Nor Wrongfully Withheld Action
Plaintiff is not entitled to relief on its claims arising under 42 U.S.C. § 3608(e)(5). Because this Fair Housing Act provision requires the agency to “administer the programs and activities relating to housing and urban development in a manner affirmatively to further [its fair housing ] policies,” id., the APA does not provide for review of the HUD’s alleged failure to follow this provision. 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 to be taken. SUWA, 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:
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
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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 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). For the same reason, plaintiff here is not entitled to an order compelling compliance with the broad statutory mandate that HUD affirmatively further the goals of fair housing. In the present case, as in SUWA, the statute under which plaintiff have filed suit “is mandatory as to the object to be achieved, but it leaves [the agency] a great deal of discretion in deciding how to achieve it.” Id. at 66. Plaintiff does not identify a circumscribed, discrete agency action that 42 U.S.C. § 3608(e)(5) requires HUD to take. Accordingly, plaintiff cannot maintain a claim for agency inaction under § 3608(e)(5). Before the Supreme Court decided SUWA in 2004, some courts reviewing claims of agency inaction permitted claims under 42 U.S.C. § 3608 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. Sec’y of HUD, 817 F.2d 149, 160-61 (1st Cir. 1987) (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.9 The Supreme Court in SUWA explained that if the relevant statutory provision provides the agency with discretion regarding the actions it may take, an
9 For this reason, defendant respectfully submits that Thompson v. HUD, 348 F. Supp. 2d 398 (D. Md. 2005), is not persuasive. Thompson did not even acknowledge, must less address, SUWA.
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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).
Finally, even assuming arguendo that § 3608(e)(5) contained a mandatory directive that HUD facilitate fair housing opportunities in its Section 8 program, for the reasons set forth in Section B of this brief, supra, it still would not provide the Court with any “law to apply” or a meaningful standard against which to judge HUD’s exercise of discretion. See Heckler, 470 U.S. at 830 (“review [under the APA] is not to be had if the statute is drawn so that a court would have no meaningful standard against which to judge the agency’s exercise of discretion. In such a case, the statute (‘law’) can be taken to have ‘committed’ the decisionmaking to the agency’s judgment absolutely.”). In this case, § 3608(e)(5) requires HUD to “administer the programs and activities relating to housing and urban development in a manner affirmatively to further the policies of [fair housing].” As drafted, this section does not require the consideration of specific factors, the makings of findings, or the development of an evidentiary record; it is therefore unreviewable. Suntex Dairy, 666 F.2d at 164-65. See also Resident Council of Allen Parkway Vill. v. HUD, 980 F.2d 1043, 1056 n.6 (5th Cir. 1993) (no action under the APA could lie for plaintiffs’ complaint about HUD’s refusal to spend discretionary funds in a particular way because there is no law to apply). Accordingly, § 3608(e)(5) does not provide any meaningful standards to rebut the presumption of unreviewability of agency inaction or upon which to base any assertion that HUD, under 5 U.S.C. § 706(1), must take some specific action.
Thus, the APA precludes review of plaintiff’s claims that § 3608(e)(5) requires HUD to create separate FMR Areas within the Dallas FMR Area or take any other affirmative action.
CONCLUSION For the foregoing reasons, this Court should grant defendant’s motion to dismiss for lack of subject matter jurisdiction.
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Dated: October 2, 2007

Respectfully submitted,
PETER D. KEISLER Assistant Attorney General
RICHARD B. ROPER United States Attorney
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 james.todd@usdoj.gov Attorneys for Defendant

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CERTIFICATE OF INTERESTED PERSONS Pursuant to Local Rule 7.4, the following contains a complete list of all persons, associations of persons, firms, partnerships, corporations, guarantors, insurers, affiliates, parent or subsidiary corporations, or other legal entities who or which are financially interested in the outcome of the case:

Plaintiff: The Inclusive Communities Project, Inc. Plaintiff’s Attorneys: Michael M. Daniel, Esq., Laura B. Beshara, Esq., Daniel & Bashara, P.C. Defendant: The United States Department of Housing and Urban Development

Dated: October 2, 2007

Respectfully submitted,
PETER D. KEISLER Assistant Attorney General
RICHARD B. ROPER United States Attorney
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 james.todd@usdoj.gov Attorneys for Defendant

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CERTIFICATE OF SERVICE I hereby certify that on October 2, 2007, I electronically transmitted the attached document to the Clerk’s Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants:
MICHAEL M. DANIEL, Esq. Law Office of Michael M Daniel
3301 Elm Street Dallas TX 75226 LAURA BETH BESHARA, Esq. Daniel & Beshara 3301 Elm Street Dallas TX 75226
s/ James D. Todd Jr JAMES D. TODD JR
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 Case 3:07-cv-00945 Document 11 Filed 10/22/2007 Page 1 of 30

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

The Inclusive Communities Project, Inc., *

Plaintiff,

*

v.

*

The United States Department of

*

Housing and Urban Development,

*

Defendant.

*

Civil Action No. 07-CV-945-L ECF

PLAINTIFF’S BRIEF IN OPPOSITION TO MOTION TO DISMISS

Table of contents

page

Table of authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Introduction and summary of argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Despite the declaration filed by HUD, most of the facts in ICP’s complaint remain undisputed for the purpose of deciding HUD’s motion to dismiss . . . . . . . . . . . . . . . . . . 3

HUD’s agency action at issue in this case is subject to judicial review under the APA . . . . . . . 10

5 U.S.C. § 702 waives sovereign immunity whether or not the Complaint states a claim for relief under the APA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

HUD’s refusal to use the statutorily required market areas to set Fair Market Rents is arbitrary, capricious, an abuse of discretion and not in accordance with those statutes . . . . . 12

HUD’s own standards for separate Fair Market Rent areas are met by the separate markets in the Dallas area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

42 U.S.C. § 3608(e)(5) imposes a reviewable duty upon HUD . . . . . . . . . . . . . . . . . . . . . . . . . 16

No other adequate remedy exists that would strip this court of jurisdiction . . . . . . . . . . . . . . . . 18

Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

HUD’s argument about standing for past injuries elevates a mention of the 50th percentile into a separate request for relief that it now claims is moot . . . . . . . . . . . . . . . . . . . . 21

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Case 3:07-cv-00945 Document 11 Filed 10/22/2007 Page 2 of 30 HUD’s use of the 12 county region is not a past action. The 2008 FMRs were based on the 12 county region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 HUD incorrectly characterizes ICP’s claim as based on a “general abstract injury.” ICP’s suit challenges specific HUD actions that inflict specific injuries and adverse effects upon ICP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 The need for private landlords in the Section 8 program does not eliminate traceability or redressability since the failure to use market areas has a determinative or coercive effect upon those landlords - if the Fair Market Rents are too low to afford units in White areas, the landlords will not rent those units to Section 8 families . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Certificate of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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Table of authorities Cases Adarand Constructors, Inc. v. Pena, 515 U.S. 200 (1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Allen v. Wright, 468 U.S. 737 (1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Anderson v. Jackson, 2007 WL 458232 (E.D.La. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 18 Barrera-Montenegro v. U.S., 74 F.3d 657 (5th Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Bennett v. Spear, 520 U.S. 154 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 20, 23, 24 Bowen v. Massachusetts, 487 U.S. 879 (1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 18, 20 CCA Associates v. U.S., 75 Fed.Cl. 170 (Fed.Cl. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Christopher Village, Ltd. Partnership v. Retsinas, 190 F.3d 310 (5th Cir. 1999) . . . . . . . . . 12, 16 Darst-Webbe Tenant Ass’n Bd. v. St. Louis Housing Authority, 417 F.3d 898 (8th Cir. 2005) 3, 17 Delta Kappa Epsilon (DKE) Alumni Corp. v. Colgate University, 492 F.Supp.2d 106 (N.D.N.Y.2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Federal Election Commission v. Akins, 524 U.S. 11 (1998) . . . . . . . . . . . . . . . . . . . . . . . . . 2, 23 Gladstone Realtors v. Village of Bellwood, 441 U.S. 91 (1979) . . . . . . . . . . . . . . . . . . . . . . . . 22 Godwin v. Secretary of Housing and Urban Development, 356 F.3d 310 (D.C. Cir. 2004) . 18, 19 Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Latinos Unidos De Chelsea En Accion (Lucha) v. Secretary of Housing and Urban Development, 799 F.2d 774 (1st Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 MCG, Inc. v. Great Western Energy Corp., 896 F.2d 170 (5th Cir. 1990) . . . . . . . . . . . . . . . . . . 3 Menchaca v. Chrysler Credit Corp., 613 F.2d 507 (5th Cir.1980) . . . . . . . . . . . . . . . . . . . . . . . . 4 N.A.A.C.P. v. Secretary of Housing and Urban Development, 817 F.2d 149 (1st Cir.1987) . . . 17 National Credit Union Admin. V. First National Bank & Trust Co., 522 U.S. 479 (1998) . . . . 23 National Leased Housing Ass'n v. U.S. Dept. of Housing and Urban Development, 2007 WL 148829 (D.D.C.2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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Norton v. Southern Utah Wilderness Alliance, 542 U.S. 55 (2004) . . . . . . . . . . . . . . . . . . . 11, 17 Panchakarla v. Gonzales, 2007 WL 2325213 (N.D.Tex. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . 3 Paterson v. Weinberger 644 F.2d 521 (5th Cir. 1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 10 Rapanos v. U.S., ___ U.S. ___, 126 S.Ct. 2208 (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Shannon v. HUD, 436 F.2d 809 (3rd Cir.1970) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Simon v. E. Ky. Welfare Rts. Org., 426 U.S. 26 (1976) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Transohio Savings Bank v. Director, OTS, 967 F.2d 598 (D.C. Cir. 1992) . . . . . . . . . . . . . . . . 18 Thompson v. HUD, 348 F.Supp.2d 398 (D. Md. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Trafficante v. Metropolitan Life Ins. Co., 409 U.S. 205 (1972) . . . . . . . . . . . . . . . . . . . . . . . . . 22 Trudeau v. Federal Trade Com’n., 456 F.3d 178 (D.C. Cir. 2006) . . . . . . . . . . . . . . . . . . . . 2, 12 Warner v. Cox, 487 F.2d 1201 (5th Cir. 1974) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Williamson v. Tucker, 645 F.2d 404 (5th Cir. 1981) . . . . . . . . . . . . . . . . . . . . . . 3, 4, 7, 10, 13, 22 Statutes 5 U.S.C. § 551 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 5 U.S.C. § 551(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 5 U.S.C. § 551(13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 5 U.S.C. § 701(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 5 U.S.C. § 702 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 11, 12, 23 5 U.S.C. § 704 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 5 U.S.C. § 706 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 42 U.S.C. § 1437f(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 3, 5, 10, 11, 13 42 U.S.C. § 1437f(o)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 3, 4, 11, 13 42 U.S.C. § 3608(e)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 16, 17, 18 Regulations
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24 C.F.R. § 570.601(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 24 C.F.R. § 888.111 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 24 C.F.R. § 888.113(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 10, 15 24 C.F.R. § 888.115 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 24 C.F.R. § 982.503(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Other authority 72 Fed. Reg. 38398, July 12, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 72 Fed. Reg. 55940, October 1, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Fed. R. Civ. P. 12(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 23 HOUSE CONFERENCE REPORT NO. 93-1279 1974 U.S.C.C.A.N. 4449 (1974) . . . . . . . . . 14 SENATE REPORT NO. 93-693 1974 U.S.C.C.A.N. 4273, 4315 (1974) . . . . . . . . . . . . . . . 2, 14
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Introduction and summary of argument HUD’s motion should be denied. HUD must use market areas as the basis for setting the rents in the Section 8 program. 42 U.S.C. § 1437f(o)(1)(B) incorporating 42 U.S.C. § 1437f(c)(1). Complaint ¶ ¶ 5, 36. Instead, HUD uses the Dallas metropolitan area, a region of 12 counties, or a subset of the metropolitan area, a region of 8 counties. Complaint ¶¶ 9, The metropolitan area is not a market area. Complaint, 9, 11-18. HUD’s own research concludes that “Entire metropolitan areas (particularly the larger ones) also do not constitute single housing markets.” Appendix page 26. By selecting this multi-county region instead of the actual market areas, HUD is able to apply a formula that calculates the maximum rent for the Section 8 program in the Dallas area based on the lower rents in predominantly minority markets where many of the neighborhoods are blighted and have inadequate public and private services and facilities. These market area rents are then applied by HUD to establish the maximum rent that can be paid under the Section 8 program in the higher rent predominantly White markets where there are few if any blighted neighborhoods and the public and private services and facilities are better than those in the minority blighted neighborhoods. Complaint ¶ 10.1 The disparity between the percent of units made available by the HUD rents in White areas compared to the percent in minority areas is large. In the City of Plano only 13% of the two bedroom units are available. Plano is 73% White. In contrast, 56% of the two-bedroom units in the City of Dallas are available for Section 8 based on HUD’s calculations. Dallas is 35% White. Complaint ¶ 24.
1 HUD calls the maximum rent the “Fair Market Rent” or “FMR.” The rent is neither fair nor market as alleged in ICP’s complaint.
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HUD’s rent-setting policy directly and adversely affects ICP by making it more expensive and more time consuming for ICP to help its clients find and retain rental housing in nonminority market areas. Complaint ¶ 35; Appendix pages 3, 5, 8. ICP claims that HUD’s action violates the obligation in the Section 8 statutes to use market areas in setting the FMR and violates HUD’s obligation under the Fair Housing Act to affirmatively further fair housing. Complaint ¶¶ 1-39. The Administrative Procedure Act provides ICP’s claim for relief and waives sovereign immunity for the injunctive relief in the complaint. 5 U.S.C. § 702.
HUD’s suggestion that the APA does not waive sovereign immunity is based on an argument that has already been rejected and is contradicted by the plain text of 5 U.S.C. § 702. Trudeau v. Federal Trade Com’n., 456 F.3d 178, 183-87 (D.C. Cir. 2006). ICP’s injuries satisfy the standing requirement for injury in fact. Bennett v. Spear, 520 U.S. 154, 167-68 (1997). Landlords who will not rent to a potential tenant who is unable pay the landlord’s market rent are much more likely to rent to a potential tenant who can pay the market rent. ICP’s declaration and HUD’s documents establish the causal link between the amount of rent and landlord’s willingness to rent. Appendix pages 2-4, 5-6, 7-8. The presence of third parties such as private landlords whose actions are directly affected by the rent levels set by HUD’s Fair Market Rent levels do not eliminate the causation and redressability factors for ICP’s standing. Id. at 168-69.
HUD’s argument that Congress has not mandated the use of market areas in the setting of Fair Market Rents is contradicted by the legislative history, the text of the statutes, and HUD’s own regulation. SENATE REPORT NO. 93-693 1974 U.S.C.C.A.N. 4273, 4315 (1974);2 42
2 “It is intended that HUD will define the ‘areas’ for which fair market rents are to be determined in such a way as not to include in a single area communities which are characterized by significant differences in rentals or construction costs for comparable housing.” SENATE REPORT NO. 93-693 1974 U.S.C.C.A.N. 4273, 4315 (1974).
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U.S.C. § 1437f(o)(1)(B); 42 U.S.C. § 1437f(c)(1); 24 C.F.R. § 888.113(a). These sources and others provide the Court with law to apply in the judicial review of HUD’s action failing to use market areas when setting Fair Market Rents. HUD’s argument that its obligation to affirmatively further fair housing is not subject to judicial review under the APA is not the law and has been rejected in other HUD cases. Darst-Webbe Tenant Ass’n Bd. v. St. Louis Housing Authority, 417 F.3d 898, 906-909 (8th Cir. 2005). Damage suits against the federal governmentand local suits against private landlords and public housing agencies cannot provide the relief requested in this case - requiring HUD to use market areas in the setting of Fair Market Rents for the Dallas area. These alternatives do not strip the Court of its jurisdiction to hear the APA claims. Bowen v. Massachusetts, 487 U.S. 879, 904-905 (1988). This brief also responds to HUD’s other arguments.
Argument Despite the declaration filed by HUD, most of the facts in ICP’s complaint remain undisputed for the purpose of deciding HUD’s motion to dismiss. Motions brought pursuant to Fed. R. Civ. P. 12(b)(1) address the jurisdiction of the court over the subject matter of the complaint. When deciding a Rule 12(b)(1) motion the district court may look at (1) the complaint alone, presuming the allegations to be true; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court’s resolution of disputed facts. Barrera-Montenegro v. U.S., 74 F.3d 657, 659 (5th Cir. 1996); MCG, Inc. v. Great Western Energy Corp., 896 F.2d 170, 176 (5th Cir. 1990), citing Williamson v. Tucker, 645 F.2d 404, 413-14 (5th Cir. 1981); Panchakarla v. Gonzales, 2007 WL 2325213, *2 (N.D.Tex. 2007). The Fifth Circuit distinguishes between Rule 12(b)(1) motions to dismiss that are “facial
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attacks” and “factual attacks” to the sufficiency of the jurisdiction for the complaint. “Facial attacks” go to the sufficiency of the pleadings and in deciding such motions, courts take the allegations in the complaint as true. In “factual attacks,” evidence outside the complaint is raised and the court may decide the motion on the basis of undisputed and disputed facts. Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir. 1981). When the defendant’s Rule 12(b)(1) motion to dismiss raises factual issues, the plaintiff must have an opportunity to develop and argue the facts in a manner that is adequate in the context of the disputed issues and evidence. Id. at 414; Paterson v. Weinberger, 644 F.2d 521, 523 (5th Cir. 1981). This may include a hearing, affidavits, and testimony. Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir.1980).
In this case most of the facts set forth in the complaint are not disputed by HUD’s declaration. Mr. Usowski describes himself in ¶ 1 and the Section 8 program in ¶ ¶ 2-3, 5-6. In ¶ 4 he makes conclusions of law about whether or not the Section 8 statutes establish a general standard requiring the use of market areas. Mr. Usowski claims that Congress has not done so. The plain text of the law shows that Congress has established a standard requiring the use of market areas.
Except as provided under subparagraph (D), the payment standard for each size of dwelling unit in a market area shall not exceed 110 percent of the fair market rental established under subsection (c) of this section for the same size of dwelling unit in the same market area and shall be not less than 90 percent of that fair market rental. 42 U.S.C. § 1437f(o)(1)(B). (emphasis added).
The maximum monthly rent shall not exceed by more than 10 per centum the fair market rental established by the Secretary periodically but not less than annually for existing or newly constructed rental dwelling units of various sizes and types in the market area suitable for occupancy by persons assisted under this section . . . . 42 U.S.C. § 1437f(c)(1).(emphasis added). This is a dispute of law, not facts.
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Mr. Usowski gives his version of HUD’s history of setting Fair Market Rents in the Dallas area in paragraphs 7 through 21. While he glosses over the use of the 12 county area to set the Fair Market Rent levels for the Dallas area, he does not contradict ICP’s statement that
“Rather than use market areas to establish the fair market rental, HUD uses U.S. Census data for a 12 county region that is not a market area. The twelve counties are Collin, Dallas, Delta, Denton, Ellis, Hunt, Kaufman, Johnson, Parker, Rockwall, Tarrant, and Wise.” Complaint ¶ ¶ 9-13. Nor does he contradict ICP’s statement that the eight county region used in the Fair Market Rent determination is not a market area. Complaint ¶ 14. Nowhere in his declaration does Mr. Usowski make the claim that HUD does use market areas to determine the Fair Market Rent levels for the Dallas area. Mr. Usowski does not mention that the 2008 FY Fair Market Rent levels for the three ($1,156) and four ($1,401) bedroom units are still below the FY 2003 Fair Market Rent for the three ($1,176) bedroom units and below the FY 2004 Fair Market Rent four ($1,425) bedroom units. Appendix pages 9-12. Mr. Usowski implies that there is little difference between using the 12 county region and the eight county region to compute Fair Market Rents. Declaration ¶ 21. The implication is based on a 1.8% difference in one set of data used in the calculations. Mr. Usowski does not calculate the difference in the actual Fair Market Rents using the different regions. But even if he had done so, it would be irrelevant. The issue in this lawsuit is not the amount of the single Fair Market Rent level that is used throughout the eight county area. Rather, the issue is there should be separate Fair Market Rent levels for each rental housing market in that area. Some of the resulting Fair Market Rent levels for the separate rental housing markets will be higher than the eight county FMR and some will be lower. But the levels will better reflect the market rents in market areas. This was the conclusion of both the U.S. Comptroller General and the U.S.
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Government Accounting Office when they studied HUD’s Fair Market Rent setting process in
1977 and in 1994. Complaint ¶¶ 28-29.
Mr. Usowski discusses the Office of Management and Budget (OMB) designated
metropolitan areas as if it were just understood that these areas should be used in setting Fair
Market Rents. He does not disclose OMB’s strong warning against using the areas it has
determined are solely appropriate for statistical analysis for program purposes.
Nonstatistical Program Uses of the Statistical Area Definitions. In periodically reviewing and revising the definitions of these areas, OMB does not take into account or attempt to anticipate any nonstatistical uses that may be made of the definitions, nor will OMB modify the definitions to meet the requirements of any nonstatistical program. Thus, OMB cautions that Metropolitan Statistical Area and Micropolitan Statistical Area definitions should not be used to develop and implement Federal, state, and local nonstatistical programs and policies without full consideration of the effects of using these definitions for such purposes. These areas are not intended to serve as a general-purpose geographic framework for nonstatistical activities, and they may or may not be suitable for use in program funding formulas. Appendix page 13.
Mr. Usowski mentions the controversy concerning the proposed 2004 changes in Fair
Market Rent area designations. He does not mention that the U.S. Senators for Connecticut
protested HUD’s proposal to use countywide instead of city based Fair Market Rent areas in
Connecticut. Appendix pages 16-18. Mr. Usowski does note that the changes were not
implemented. Connecticut still has Fair Market Rent areas based on cities, not the MSA or
county-wide areas. Appendix pages 19-20.
HUD bases its argument that granting ICP’s requested relief would result in fewer
vouchers and fewer families housed on Mr. Usowski’s statement this would be the result of
higher Fair Market Rents. ICP is not seeking higher Fair Market Rents but is seeking Fair Market
Rents that are based on market areas, not statistical areas. The General Accounting Office found
that the use of market areas would result in some higher and some lower rent levels with no net -6-

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effect on the number of households served. For those smaller areas where FMR levels increase as a result of the change, either program costs would rise or the number of assisted households served at current budget levels would diminish. Conversely, for those smaller areas where FMR levels decreased, program costs would decrease or, given a steady budget level, the number of households being served would rise. Overall, these cost increases and decreases could tend to net out and have little impact on the total amount of assistance payments. U.S. GAO, “Rental Housing Use of Smaller Market areas to Set Rent Subsidy Levels Has Drawbacks” June 1994, p.28, Appendix page 22. (Emphasis added.)
The following facts from ICP’s complaint are not disputed by HUD. As such, those facts should be taken as true by the Court in deciding the motion to dismiss. Williamson v. Tucker, 645 F.2d at 413-14.
ICP assists DHA Section 8 families who choose to lease dwellings in non-minority areas with counseling and financial assistance. Complaint ¶ 1. DHA’s Section 8 population is 86% Black and 6% White. There are DHA Section 8 households in Collin and Denton Counties. Complaint ¶¶ 6, 7.
HUD uses twelve counties to establish a single FMR for the eight county Dallas FMR area. HUD does not dispute that the twelve county area is not a single market area. HUD does not dispute that the eight county Dallas FMR area is not a single market area. Complaint ¶¶ 9, 11, 1218.
By selecting this multi-county region instead of the actual market areas, HUD is able to calculate the maximum rent for the Section 8 program in the Dallas area based on the lower rents in predominantly minority markets where many of the neighborhoods are blighted and have inadequate public and private services and facilities. This rent is then applied by HUD to establish a single FMR that covers the eight county Dallas area and is applied in the higher rent predominantly White markets where there are few if any blighted neighborhoods and the public
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and private services and facilities are better than those in the minority blighted neighborhoods. Complaint ¶ 10.
HUD’s policy and decisions make approximately 70% of the rental units in predominantly minority areas available for occupancy by persons assisted under Section 8. Complaint ¶ 23. HUD’s policy and decisions make only 30% of the rental units in predominantly White areas available for occupancy by persons assisted under Section 8. Complaint ¶ 22.
HUD’s rent setting formula and its application to the Dallas area Section 8 program steers Black DHA Section 8 participants into the predominantly minority areas of the City of Dallas and away from and out of the predominantly White suburban cities. Complaint ¶ 25. HUD’s racial steering makes dwelling units unavailable to Black DHA Section 8 participants and perpetuates racial segregation in the City of Dallas and in the Dallas area. Complaint ¶ 26.
In 1977, the U.S. Comptroller General disapproved HUD’s decision to use metropolitan areas and other multi-county regions to set rent levels for the Section 8 program because it ignored important distinctions between metropolitan central cities and suburban areas as well as among suburban areas. The Comptroller General recommended the development of separate rent schedules for individual housing submarket areas instead of one rent schedule for an entire SMSA or county group. Complaint ¶ 28.
In 1994, the U.S. Government Accounting Office found that if fair market rents for the Section 8 program were based on smaller geographic areas rather than the multi-county region then rent levels would better reflect the rent levels typically prevailing in thouse smaller areas. Complaint ¶ 29.
HUD’s record of its FMR decision on HUD’s website contains no facts showing that HUD has ever considered the effects of its policy and decisions selecting the multi-county areas
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instead of market areas on the availability of dwellings in predominantly White areas for the Black DHA Section 8 voucher program participants. Complaint ¶ 30.
HUD does not dispute that it first used the 12 county region as the basis for setting Section 8 maximum rents in the Dallas area on Feb. 1, 2006. Complaint ¶ 31.
HUD does not contest the facts setting forth ICP’s standing showing that ICP seeks to create and obtain affordable housing opportunities in non-minority concentrated areas for Section 8 families. ¶ 32. ICP provides financial assistance to assist Section 8 voucher holders to find housing in non-minority areas of the Dallas region. The mobility assistance includes negotiating with landlords as necessary to obtain units in eligible areas at rents that are affordable by Section 8 families and eligible for the Section 8 subsidy. Complaint ¶¶ 33, 34. By making standard quality, non-luxury rental housing unavailable in non-minority areas, HUD’s rent setting policy directly and adversely affects ICP. The policy reduces the number of units that ICP can use to help its clients find housing in non-minority concentrated market areas, increasing the amount of time per client that ICP must spend in order to help its clients find and retain modest rental housing in non-minority areas. It increases the amount of financial assistance that ICP must spend in order to help its clients find and retain modest rental housing in non-minority areas. The policy discourages families with which ICP works from choosing dwelling units in market areas that offer racially integrated housing because of the cost factors involved in such a choice. Complaint ¶ 35.
The statements in HUD’s brief that “plaintiff cannot show...” a fact or set of facts does not make the issue a disputed fact if HUD has provided no evidence in contradiction. Since HUD has not disputed the majority of the facts in ICP’s complaint, the Court should accept those facts as true for purposes of deciding the motion to dismiss. The Court should consider the evidence submitted by ICP on the few facts that are in dispute. Williamson v. Tucker, 645 F.2d at 414;
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Paterson v. Weinberger, 644 F.2d at 523. HUD’s agency action at issue in this case is subject to judicial review under the
APA. The APA makes “agency action” or failure to act judicially reviewable. 5 U.S.C. § § 704,
706. HUD implements the rent setting obligations in the Section 8 program statute through statements of general applicability thus meeting the definition of “rule” as a type of “agency action.” 5 U.S.C. § 551.
The Section 8 statute requires HUD to set Fair Market Rents using the publication and public comment procedures in the Federal Register on an annual basis. 42 U.S.C. § 1437f(c)(1). HUD proceeds under specific regulations setting out the methodology for determination of Fair Market Rents. 24 C.F.R. §§ 888.111, 888.113, 888.115. The regulatory method requires the use of market areas defined as “the geographic area in which rental housing units are in competition.” 24 C.F.R. § 888.113(a). HUD’s publication of proposed and final rents states it is doing agency action. The most recent publication of the proposed Fair Market Rents is labeled as “ACTION: Notice of Proposed Fiscal Year (FY) 2008 Fair Market Rents (FMRs).” 72 Fed. Reg. 3839838403, July 12, 2007. The most recent publication of the final Fair Market Rents is labeled as “ACTION: Notice of Final Fiscal Year (FY) 2008 Fair Market Rents (FMRs).” 72 Fed. Reg. 55940-55945, October 1, 2007.
The final notices of Fair Market Rents are HUD’s statement of its approval of the Fair Market Rents for the operation of the Section 8 program throughout the entire United States. The notices are given to implement the specific statutory mandates to set annual fair market rents and to use the Federal Register publication and comment procedures in setting the annual fair market rents. 42 U.S.C. § 1437f(o)(1)(B); 42 U.S.C. § 1437f(c)(1). The final notice is HUD’s approval
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for the prices that can be paid for housing using the subsidy provided by Section 8 vouchers. Under the APA, the definition of “agency action” includes the whole or part of an agency
rule. 5 U.S.C. § 551(13). “Rule” means an agency statement of general applicability and future effect designed to implement law or policy and includes the approval of future prices. 5 U.S.C. § 551(4). ICP claims that HUD has taken agency action through its determination of and approval of Fair Market Rents in annual statements published in the Federal Register. ICP claims that this agency action was arbitrary, capricious, an abuse of discretion and not in accordance with two specific laws. ICP claims that the action was not in accordance with the obligation to use market areas when setting Fair Market Rents set out in 42 U.S.C. § 1437f(o)(1)(B) standing alone and as it incorporates 42 U.S.C. § 1437f(c)(1). ICP also claims that the action was not in accordance with the 42 U.S.C. § 3608(e)(5) obligation to affirmatively further fair housing. ICP is asking the Court to set aside the agency action not in accordance with law and compel the agency action using the market areas and affirmatively furthering fair housing. Complaint ¶¶ 38, 39. The agency action and the allegation of agency action taken in violation of the law and the refusal to take the agency action provided for by law in this case supply the elements that were missing in Norton v. Southern Utah Wilderness Alliance, 542 U.S. 55, 61-63 (2004).
The issue of whether there is law to enforce under the APA is addressed below. 5 U.S.C. § 702 waives sovereign immunity whether or not the Complaint states a claim for relief under the APA. The waiver of sovereign immunity in 5 U.S.C. § 702 is general in its scope and is not even limited to suits that state a claim under the other provisions of the APA.
. . . An action in a court of the United States seeking relief other than money damages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal authority shall not be dismissed nor relief therein be denied on the ground that it is against the United
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States or that the United States is an indispensable party. The United States may be named as a defendant in any such action, and a judgment or decree may be entered against the United States. . . .5 U.S.C. § 702. ICP’s complaint is just such an action claiming that an agency, HUD, acted and failed to act in an official capacity as the official agency charged with the duty to use market areas to determine fair market rents. Sovereign immunity has been waived for ICP’s complaint. Whether or not there is an APA claim is a different issue that is subject to different arguments and authorities. HUD’s argument combining the question of whether an APA claim is present and the waiver of sovereign immunity is the same argument that has consistently been rejected by the courts. Trudeau, 456 F.3d at 183-187. HUD’s brief gave no reason why this same argument in this case should receive different treatment. HUD’s refusal to use the statutorily required market areas to set Fair Market Rents is arbitrary, capricious, an abuse of discretion and not in accordance with those statutes. ICP is not asking the Court to set a Fair Market Rent for the Dallas area Section 8 programs.3 Rather, ICP is asking the Court to order HUD to use market areas as required by statute when it sets fair market rents for the numerous markets in the Dallas area. That issue is within the scope of judicial review under the APA. Christopher Village, Ltd. Partnership v. Retsinas, 190 F.3d 310, 315-16 (5th Cir. 1999). Judicial review is available when “HUD ignores a plain statutory duty . . . .” Id. at 315-16. HUD is ignoring a plain statutory duty to use market areas when setting the Fair Market Rents. That issue is subject to judicial review just as the duty
3 ICP’s complaint asks for injunctive relief prohibiting HUD from using non-market areas for rent setting, compelling HUD to use market areas for rent setting, compelling HUD to set separate rent levels for separate rental markets in order to provide equal access to predominantly White rental housing markets and compelling HUD to consider fair housing opportunities when it sets Section 8 rent levels. Complaint ¶¶ 39B-39D. None of the relief asks the Court to set fair market rents. Complaint ¶¶ 39A-39G.
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to consider a request for a rent increase was subject to judicial review in Christopher even though the request to determine the lawfulness of a particular rent was not subject to judicial review.
HUD does not dispute, for purposes of its 12(b)(1) motion, ICP’s allegations that the 12 county and eight county regions that HUD uses to set Fair Market Rents are not market areas. Complaint ¶¶ 9-11, 16.4 The issue at this stage is whether the HUD determination of the area to use to set Fair Market Rents is so committed to agency discretion as to preclude judicial review under 5 U.S.C. § 701(a)(2). The statute at issue does not leave HUD any discretion. It must use market areas in its fair market rent determinations. The Section 8 voucher statute provides not only that HUD must use a market area, but that the rent standard must apply to units in the same market area.
Except as provided under subparagraph (D), the payment standard for each size of dwelling unit in a market area shall not exceed 110 percent of the fair market rental established under subsection (c) of this section for the same size of dwelling unit in the same market area and shall be not less than 90 percent of that fair market rental. 42 U.S.C. § 1437f(o)(1)(B). (emphasis added). The subsection (c) referred also requires the use of the market area. The maximum monthly rent shall not exceed by more than 10 per centum the fair market rental established by the Secretary periodically but not less than annually for existing or newly constructed rental dwelling units of various sizes and types in the market area suitable for occupancy by persons assisted under this section . . . . 42 U.S.C. § 1437f(c)(1).(emphasis added). When Congress passed the fair market rent statute, it stated that its intent was for HUD to avoid using in a single fair market rent area communities which were significantly different in rental and construction costs.
4 The undisputed allegations should be accepted as true for purposes of determining this motion. Williamson v. Tucker, 645 F.2d at 413-14.
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It is intended that HUD will define the ‘areas’ for which fair market rents are to be determined in such a way as not to include in a single area communities which are characterized by significant differences in rentals or construction costs for comparable housing. SENATE REPORT NO. 93-693 1974 U.S.C.C.A.N. 4273, 4315 (1974).
The undisputed allegations in the complaint show that HUD’s 12 county and eight county
FMR regions include in a single area communities that are characterized by significant
differences in rentals. Complaint ¶¶ 11-13, 18.
Congress was clear that “each housing market” was to have its own fair market rentals.
The Senate bill required HUD to determine fair market rentals in each housing market area required to obtain adequately maintained and managed private existing and new rental housing; and on the basis of such determinations, public housing agencies or HUD would establish fair market rentals for assisted units. The House amendment required HUD to establish fair market rentals in each housing market area for new and existing units of various sizes and types suitable for occupancy for low-income families. The conference report contains the House provisions. The conferees believe that the establishment of realistic fair market rentals will be a prime factor in the success or failure of the new housing assistance program. In establishing such rentals, the HUD Secretary is expected to take into account factual data, analyses, and recommendations from community sources familiar with prevailing rents and costs in various market areas; and he should take into account the need to provide housing with suitable amenities and sound architectural design. HOUSE CONFERENCE REPORT NO. 93-1279 1974 U.S.C.C.A.N. 4449, 4465 (1974).5
The undisputed allegations of the complaint make it clear that the 12 county and eight
county areas are separate and various housing markets that do not have their own fair market rent
determinations. Complaint ¶¶ 14-15.
HUD’s own regulations further define “market areas” for purposes of fair market rent
determinations. “FMRs are housing market-wide estimates of rents that provide opportunities to
5 This and the other legislative history, the text of the statutes, and HUD’s failure to show the necessary evidence of acquiescence prevent any inferences from Congressional inactivity. Rapanos v. U.S., ___ U.S. ___, 126 S.Ct. 2208, 2230-2232 (2006).
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rent standard quality housing throughout the geographic area in which rental housing units are in competition.” 24 C.F.R. § 888.113(a).
HUD’s own analysis states that large metropolitan areas are not housing markets. An important issue is what constitutes a rental housing market, that is, within what group of properties are price adjustments made. Clearly, there is no single national rental housing market. Entire metropolitan areas (particularly the larger ones) also do not constitute single housing markets. U.S. Department of Housing and Urban Development, Office of Policy Development and Research, “Targeting Housing Production Subsidies Literature Review,” page 6, 2003. (Emphasis added). Appendix page 26.
It is undisputed that HUD’s own market studies of the Dallas area make it clear that neither the 12 county nor the eight county metropolitan wide areas used by HUD for fair market rent determinations are market areas. Complaint ¶¶ 14-15.
The U.S. Comptroller General and the U.S. Government Accounting Office have criticized HUD’s use of multi-county regions on the grounds that the rents set for those regions do not correspond to the fair market rents for the separate market areas in those regions. Complaint ¶¶ 28, 29.
The determination of housing market areas is a subject familiar to courts in a variety of contexts, including claims against the government and claims arising under anti-trust laws. CCA Associates v. U.S., 75 Fed.Cl. 170, 202-203 (Fed.Cl. 2007); Delta Kappa Epsilon (DKE) Alumni Corp. v. Colgate University, 492 F.Supp.2d 106, 113-14 (N.D.N.Y.2007). HUD’s determination that it has the discretion to chose non-market areas when the statute requires using market areas is no more removed from judicial review that HUD’s determination that “fiscal year” meant “calendar year.” National Leased Housing Ass'n v. U.S. Dept. of Housing and Urban Development , 2007 WL 148829, *18 (D.D.C.2007). HUD has chosen to depart from the statute and withhold action legally required - the use of market areas to determine fair market rents. The
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HUD action is subject to judicial review and relief. Christopher Village, Ltd. Partnership, 190 F.3d at 315-16.
HUD’s own standards for separate Fair Market Rent areas are met by the separate markets in the Dallas area.
HUD argues that ICP cannot enforce the 5% difference standard that HUD uses when it wants to split an area off into another Fair Market Rent Area. HUD brief page 19. ICP is not citing the standard to enforce it, only to show that by HUD’s own standards, the 12 county and eight county regions include several market areas, not just one. Complaint ¶¶ 15-18. HUD does not dispute these facts.
42 U.S.C. § 3608(e)(5) imposes a reviewable duty upon HUD. ICP’s complaint alleges that HUD has breached its specific duty to use “market areas” in its Fair Market Rent determinations. Complaint ¶¶ 36, 38. ICP’s complaint further alleges that HUD has breached the specific duty to consider the effects of its decisions on those Fair Market Rent determinations on the racial composition of the areas affected by those determinations and on the housing choices available to Black DHA Section 8 voucher program participants. The complaint alleges that HUD did not consider those effects. Complaint ¶ ¶ 30, 37, 38. ICP seeks specific relief for HUD’s violation of its duty to consider the effects of its Fair Market Rent market area determinations on racial composition and integrated housing choices - the use of market areas and consideration of fair housing when setting the maximum rents. Complaint ¶ 39. The source of HUD’s duty to consider the racial effects of its actions is 42 U.S.C. § 3608(e)(5).6 A wide variety of federal courts have held that HUD’s implementation of this duty is
6 “The Secretary of Housing and Urban Development shall– . . . (5) 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.A. § 3608(e)(5).”
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subject to judicial review. Latinos Unidos De Chelsea En Accion (Lucha) v. Secretary of Housing and Urban Development, 799 F.2d 774, 791-792 (1st Cir. 1986)(cases collected); Thompson v. HUD, 348 F.Supp.2d 398, 422 (D. Md. 2005).7 The line of cases begins with Shannon v. HUD, 436 F.2d 809 (3rd Cir.1970). The most recent case is Anderson v. Jackson, 2007 WL 458232, *2 (E.D.La. 2007). The leading case is N.A.A.C.P. v. Secretary of Housing and Urban Development, 817 F.2d 149, 157-160 (1st Cir.1987)(Judge Breyer).
The HUD brief does not identify a single case specifically holding that HUD’s duty to affirmatively further fair housing is not subject to judicial review under the APA. HUD instead relies on an argument by analogy from a case in which the U.S. Supreme Court held that the Administrative Procedure Act did not provide for judicial review of the government’s decision to allow off road vehicles into wilderness areas. HUD brief, pages 21-23 citing Norton v. Southern Utah Wilderness Alliance, 542 U.S. 55 (2004). Nor does HUD’s brief identify the cases in which the same arguments made here were rejected. Darst-Webbe, 417 F.3d at 906-909; Anderson v. Jackson, 2007 WL 458232, *2 (E.D.La. 2007).
The opinions cited above show there is law to apply in the judicial review of HUD’s duty to affirmatively further fair housing. In addition, HUD itself has set out the meaning of affirmatively furthering fair housing in its own regulations. Affirmatively furthering fair housing means at least that a government must look for barriers to fair housing in its jurisdiction and take appropriate actions to overcome the effects of those barriers. 24 C.F.R. § 570.601(a)(2). In this case ICP alleges that a very specific action was unlawfully withheld. HUD did not take into
7 HUD admitted liability under 42 U.S.C. § 3608(e)(5) in the Walker v. HUD litigation involving DHA’s public housing and Section 8 program. Findings of Fact and Conclusions of Law: HUD Motion to Modify Remedial Order Affecting HUD, page 3 ¶ 2, filed June 12, 1996 Civil Action 3:85-CV-1210-R (N.D. Tex.). Appendix page 29.
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consideration the effects of its Fair Market Rent market area determinations on racial composition and integrated housing choices before it selected the multi-county region to use as a single “market area” for determining fair market rents for the Section 8 program for the Dallas area. These factors distinguish 42 U.S.C. § 3608(e)(5) from the non-reviewable decision to allow off road vehicles into wilderness areas. Darst-Webbe, 417 F.3d at 906-909.
No other adequate remedy exists that would strip this court of jurisdiction. There must be a “special and adequate review procedure” available before a district court loses its jurisdiction under the APA. Bowen, 487 U.S. at 904-905. HUD’s proposed lawsuits by ICP against HUD for money damages in the Claims Court are the same remedy rejected by the U.S. Supreme Court in Bowen. Id. at 904-905. Whether or not there would be Tucker Act or other money claims for past damages, no court would have jurisdiction under the Tucker Act to provide the requested injunctive relief. Id. at 904-905. The Tucker Act waives sovereign immunity only for damages in contract. Transohio Savings Bank v. Director, OTS, 967 F.2d 598, 607 (D.C. Cir. 1992).Unlike the defense contractor in Warner v. Cox, 487 F.2d 1201 (5th Cir. 1974), ICP is not suing to require the United States to pay vast sums of money to ICP in advance of the date set by a contract between ICP and the United States. HUD argues that the local public housing authorities can be sued under the Fair Housing Act for HUD’s failure to use market areas when setting Fair Market Rents and for HUD’s failure to affirmatively further fair housing in its determination of what areas to use in setting those rents citing Godwin v. Secretary of Housing and Urban Development, 356 F.3d 310, 312-13 (D.C. Cir. 2004) and similar cases. The cited opinions do not apply to this case. For example, in Godwin, the plaintiff had filed an administrative complaint with HUD and against a private party for a Fair Housing Act violation. When HUD held that the administrative complaint did not have merit, the
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plaintiff sued HUD under the APA for review of the decision not to pursue the administrative case. The courts quite reasonably held that suing HUD would not remedy the discrimination alleged to have been caused by the private party. The availability of a Fair Housing Act case against the party causing the discrimination was an adequate remedy that precluded APA review. Godwin, 356 F.3d at 312-13.
The local public housing authorities do not cause the discrimination nor do they have the authority to provide a remedy. They have the discretion to set rents at up to 110% of HUD’s Fair Market Rents. The PHAs must have HUD approval for rents above 110% up to 120%. 24 C.F.R. § 982.503(c). HUD has not granted this approval for DHA’s regular Section 8 Voucher program. Appendix pages 31-33, 34, 35-40. But even if HUD approved rents more than 110% of the HUD Fair Market Rents, it would not provide a remedy because the rents in the various parts of the HUD FMR area vary by more than 20%. The two bedroom recent mover rent in the 2000 U.S. Census is the underlying basis for HUD Fair Market Rent calculations. Appendix pages 41, 45, 51-52. The median two bedroom recent mover rent in the 2000 U.S. Census for Plano is 23% higher than the PMSA rent. The median two bedroom rent for Coppell is 27% higher than the PMSA rent. Appendix pages 56-59, 60, 63, 67. 8
No local public housing authority has the either the duty or the obligations assigned to HUD under the statutes involved in this case. Lawsuits against the Dallas Housing Authority, the McKinney Housing Authority, the Garland Housing Agency, the Mesquite Housing Agency, the Fort Worth Housing Authority, and the myriad other public housing agencies in the area will do nothing to require HUD to follow its statutory mandate to use market areas when determining the
8 HUD did grant a 125% increase for 3,200 Walker Settlement vouchers as part of the settlement in the Walker v. HUD case. Appendix page 5.
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Fair Market Rents that are used by those local agencies. A lawsuit against one of these agencies claiming that it had the power to set its own Fair Market Rents using the market areas within its area of operation would be dismissed as frivolous. These suits are not the special and adequate review procedure that can cause a district court to lose its jurisdiction under the APA. Bowen, 487 U.S. at 904-905.
ICP is not charging private landlords with discrimination. It is not discriminatory to refuse to rent a dwelling unit for less than the market rent being charged to other tenants. The private landlords do not have the duty or authority to set Fair Market Rents. The private landlords do not have the obligation to affirmatively further fair housing. A suit against an entity that has not been the cause of the injury is not an adequate remedy that would deprive this Court of its jurisdiction. Bowen, 487 U.S. at 904-905.
Standing. HUD’s refusal to use market areas directly and adversely affects ICP by A) reducing the number of units that ICP can use to help its clients find housing in non-minority concentrated market areas, B) increasing the amount of time per client that ICP must spend in order to help its clients find and retain modest rental housing in non-minority concentrated areas, C) increasing the amount of financial assistance that ICP must spend in order to help its clients find and retain modest rental housing in non-minority concentrated market areas, and D) discouraging families with which ICP works from choosing dwelling units in market areas that offer racially integrated housing because of the cost factors involved in such a choice. Complaint ¶ 35. ICP’s complaint, ¶ 35, alleges the requisite injury in fact. Bennett, 520 U.S. at 167-68. ICP is not seeking to establish standing based on the claims of its clients.
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HUD’s argument about standing for past injuries elevates a mention of the 50th percentile into a separate request for relief that it now claims is moot.
HUD’s argument that ICP’s request for the Court to order HUD to use the 50th percentile standard is moot is not directed at any actual relief sought by ICP. While the 50th percentile standard is mentioned in the prayer for relief, Complaint ¶ 39D, it is in the context of requesting relief that will give DHA’s Black Section 8 voucher program participants equal access to rental housing in the White rental housing markets.9 The issue of the 50th percentile standard is not moot. The issue has not yet been raised in the case.
HUD’s use of the 12 county region is not a past action. The 2008 FMRs were based on the 12 county region.
HUD’s use of the 12 county region as the basis for setting Fair Market Rents in the eight county region continues. The calculation for the Fiscal Year 2008 Fair Market Rents states:
Therefore, HUD assigns Dallas, TX HUD Metro FMR Area the 2000 Census Base Rent of Dallas-Fort Worth-Arlington, TX MSA for purposes of computing the Proposed FY 2008 FMRs. Appendix page 67. Although Mr. Usowsky’s declaration does not highlight the continued use of the 12 county region, it does not deny it. ICP is not asking for relief from solely past actions. HUD continues to use the 12 county region as the basis for setting Fair Market Rents. HUD incorrectly characterizes ICP’s claim as based on a “general abstract injury.” ICP’s suit challenges specific HUD actions that inflict specific injuries and adverse effects upon ICP. HUD’s argument divides the set of possible claims related to HUD’s into only two categories. One category is claims by holders of or applicants for Section 8 vouchers. The other
9 The request for HUD to use the 50th percentile as a standard for setting rents in the different rental markets merely keeps the status quo because this is the percentile that HUD currently uses in the Dallas area when setting the FMR.
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category is a “sweeping request to generally eradicate the effects of discrimination” which does not confer standing. The set of claims is not so simple. ICP claims that HUD’s refusal to use market areas when HUD sets Fair Market Rents injures ICP in very specific ways. HUD’s refusal to use market areas directly and adversely affects ICP by A) reducing the number of units that ICP can use to help its clients find housing in non-minority concentrated market areas, B) increasing the amount of time per client that ICP must spend in order to help its clients find and retain modest rental housing in non-minority concentrated areas, C) increasing the amount of financial assistance that ICP must spend in order to help its clients find and retain modest rental housing in non-minority concentrated market areas, and D) discouraging families with which ICP works from choosing dwelling units in market areas that offer racially integrated housing because of the cost factors involved in such a choice. Complaint ¶ 35. Since HUD has not contested these facts, then for purposes of this motion, these facts must be taken as true. Williamson v. Tucker, 645 F.2d at 413-14.10
These injuries are not abstract injuries all citizens share. These injuries are just as direct and just as specific as the injuries that serve to satisfy the constitutional standing requirement for fair housing organizations. Havens Realty Corp. v. Coleman, 455 U.S. 363, 378 (1982); Gladstone Realtors v. Village of Bellwood, 441 U.S. 91, 110-13 (1979); Trafficante v. Metropolitan Life Ins. Co., 409 U.S. 205, 208, 211-12 (1972). The APA has similar language giving effect to Congressional intent to include all who have constitutional standing within the statutory standing for the APA. Congress gave the right to APA judicial review to every person
10 HUD has done nothing to put these facts in dispute for purposes of the Rule 12(b)(1) motion. The statement in the brief that ICP cannot show these facts is the opinion of HUD’s attorney and is not enough to erase the presumption of truth that otherwise attaches for a facial attack by a 12(b)(1) motion. Williamson v. Tucker, 645 F.2d at 413-414.
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“adversely affected or aggrieved by agency action . . . .” 5 U.S.C. § 702. The U.S. Supreme Court gives this provision a generous interpretation given the obvious intent of Congress. Federal Election Commission, 524 U.S. at 19-20 (1998); National Credit Union Admin. V. First National Bank & Trust Co., 522 U.S. 479, 488 (1998). ICP’s complaint, ¶ 35, alleges the requisite injury in fact. Bennett, 520 U.S. at 167-68. HUD has not challenged ICP’s status as within the zone of interests of both the Section 8 statutes and the Fair Housing Act provision involved in this lawsuit. ICP has standing.
The need for private landlords in the Section 8 program does not eliminate traceability or redressability since the failure to use market areas has a determinative or coercive effect upon those landlords - if the Fair Market Rents are too low to afford units in White areas, the landlords will not rent those units to Section 8 families.
HUD argues that since landlords have the last word on whether to rent to a Section 8 family and since there is no obligation to lease to a Section 8 family, there is no traceability or redressability for ICP’s standing. Even if the rent is raised for units in White areas, HUD argues that ICP cannot be guaranteed that its clients will be able to rent those units. HUD’s argument imposes a requirement of certainty of results that is not required for standing.
For example, a contractor who wants to bid for government contracts but will be disadvantaged by minority and gender based preferences still has standing to challenge those preferences. The fact that the contractor may not be the low bidder or otherwise qualify for contracts even if the challenged preferences are removed does not eliminate standing for injunctive relief. Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 211 (1995). Similarly, the fact that a challenged biological opinion was advisory and not conclusive did not eliminate the traceability and redressability standing elements for those who stood to be injured if the opinion was adopted. In so holding, the U.S. Supreme Court made the distinction between injury that is
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the result of third parties not before the court and injury produced by determinative or coercive effect upon the action of such third parties. Bennett v. Spear, 520 U.S. 154, 168-69 (1997).
In this case, ICP has plead that HUD’s action has just such a determinative or coercive effect upon landlords in predominantly White areas. Complaint ¶ 35. HUD has already found that the effect of rent levels facilitates the placement of Section 8 families into predominantly White areas by making those families more competitive in the Dallas rental market. Appendix page 5. HUD’s Section 8 Manual recognizes that the effect of rents being too low for a given market is that families may have a hard time finding acceptable units in more desirable areas, housing choices will be narrowed, and “the PHA’s effort to affirmatively further fair housing will be undermined.” Appendix page 8. ICP’s experience shows that if the relief is granted and the Section 8 rents in White areas are based on the market rents for those areas, the success rate for ICP’s placement of Section 8 families will increase. The absence of such market rents is a cause of the inability to place Section 8 families with landlords in those areas. ICP states that in at least 20 instances over the past few months, the only factor that kept its clients from obtaining a specific unit in a predominantly White area was the amount of rent that could be paid under the existing Fair Market Rent scheme. Appendix page 3.
The effect of setting Fair Market Rents on market rents in market areas on the probability of Section 8 families being able to obtain housing in those areas is not speculative. HUD knows and states that it is not speculative. ICP knows and states that it is not speculative. The facts based on the experience of landlord behavior when confronted with a possible tenant who can pay the rent and with a possible tenant who cannot pay the rent are not speculative. HUD’s cases are those finding the possible effects of judicial action suspending tax benefits to hospitals and withdrawing tax breaks to racially discriminatory schools were too speculative to support
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standing. See Allen v. Wright, 468 U.S. 737 (1984); Simon v. E. Ky. Welfare Rts. Org., 426 U.S.
26 (1976). Those cases do not show that the effect of offering market rent to a landlord instead of
offering less than market rent deprives ICP of standing.
Conclusion
HUD’s motion should be denied. The Court has jurisdiction to decide HUD’s duty to use
market areas for rent setting and to affirmatively further housing.
Respectfully Submitted,
s/ Michael M. Daniel State Bar No. 05360500 DANIEL & BESHARA, P.C. 3301 Elm Street Dallas, Texas 75226-1637 214-939-9230 Fax 214-741-3596 E-mail: daniel.michael@att.net Attorney for Plaintiffs
Laura B. Beshara State Bar No. 02261750 DANIEL & BESHARA, P.C. 3301 Elm Street Dallas, Texas 75226-1637 214-939-9230 Fax 214-741-3596 E-mail: laurabeshara@swbell.net Attorneys for Plaintiffs
Certificate of Service
I hereby certify that on October 22, 2007 I electronically submitted the foregoing document with the clerk of the court for the U.S. District Court, Northern District of Texas, using the electronic case files system of the court. The electronic case files system sent a “Notice of Electronic Filing” to the following individual who has consented in writing to accept this Notice as service of this document by electronic means: James D. Todd Jr.
s/ Michael M. Daniel
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 Case 3:07-cv-00945 Document 16 Filed 11/13/2007 Page 1 of 12

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

THE INCLUSIVE COMMUNITIES PROJECT, INC.,

Plaintiff, v.

3:07-CV-945-L

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT,

Defendant.

DEFENDANT’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION

INTRODUCTION

Notwithstanding plaintiff’s efforts to make the U.S. Department of Housing and Urban

Development (“HUD”)’s role in setting Section 8 payment levels in the Dallas area appear

unreasonable, this Court lacks subject matter jurisdiction over plaintiff’s claims against HUD because

plaintiff has failed to satisfy the case or controversy requirement of Article III of the U.S. Constitution,

and because no waiver of sovereign immunity encompasses its claims.

First, plaintiff lacks standing because it cannot obtain an injunction to preserve the status quo, it

improperly seeks to redress a generalized grievance, and it cannot establish a likelihood that the relief it

requests will redress its injuries.

Second, the APA bars suit because this Court has no standards by which it could judge the

reasonableness of HUD’s interpretation of the U.S. Housing Act, because plaintiff could bring suit

against the Dallas area housing authorities over their rent setting role in the Dallas area, and because

the Fair Housing Act provides no discrete mandate for HUD to follow in carrying out its role in the

Section 8 program.

ARGUMENT

I. PLAINTIFF CANNOT ENJOIN THE STATUS QUO, IMPROPERLY SEEKS REDRESS FOR GENERALIZED GRIEVANCES, AND IMPROPERLY ASSERTS SPECULATIVE CLAIMS

A. Plaintiff Cannot Obtain Injunctive Relief to Preserve the Status Quo

In an effort to avoid improperly requesting an injunction to prevent past actions, City of Los

Case 3:07-cv-00945 Document 16 Filed 11/13/2007 Page 2 of 12
Angeles v. Lyons, 461 U.S. 95, 102 (1983); James v. City of Dallas, 254 F.3d 551, 563 (5th Cir. 2001), plaintiff now claims that its seeking of an injunction requiring HUD to use the fiftieth percentile rents “merely keeps the status quo.” Pl. Op. at 21 n.9. Nevertheless, absent moving for a preliminary injunction and making all required showings for such a “extraordinary and drastic remedy,” Mazurek v. Armstrong, 520 U.S. 968, 972 (1997), plaintiff cannot obtain an injunction to maintain the status quo. Accord Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981). Moreover, as HUD demonstrated in its opening brief, nowhere in plaintiff’s Complaint has it alleged that HUD is likely to set future Dallas Area FMR based on anything other than the fiftieth percentile rent. See Compl. passim. Accordingly, plaintiff cannot invoke this Court’s remedial powers to enjoin HUD’s past or present actions. Accord Lyons, 461 U.S. at 102; James, 254 F.3d at 563. See also Univ of Tex., 451 U.S. at 395.
B. Plaintiff’s Request for an Injunction Eliminating Racial Disparities In Rental Markets Is Nothing More Than a Generalized Grievance
Plaintiff lacks standing to request an injunction “eliminating the disparities between the number and percent of dwelling units made available in predominantly White rental housing markets and the number and percent of . . . units made available in predominantly minority rental housing markets” Compl. ¶ 39D, not because it has failed to allege injuries that might otherwise be sufficient to maintain an action alleging violations of the Fair Housing Act, see Havens Realty Corp v. Coleman, 455 U.S. 363 (1979), but because its requested relief cannot be construed as anything other than an improper “sweeping request to generally eradicate the effects of discrimination.” James, 254 F.3d at 568. As demonstrated in our opening brief, James expressly rejected plaintiffs’ request that HUD be ordered “to remedy ‘the loss of housing units caused by the HUD funded housing code enforcement and housing code enforcement related demolitions of repairable family units as well as the resulting blight,’” id., because that was “‘a generalized grievance shared in substantially equal measure by all or most citizens,’” and, as such, “cannot provide standing to request injunctive relief.” Id. (quoting Warth v. Seldin, 422 U.S. 490, 499 (1975)). James controls resolution of this case. Whether plaintiff, as a fair housing organization can meet the injury-in-fact requirements set out in Havens and similar cases is beside the point–defendant does not challenge plaintiff’s alleged injuries at this time. The Havens fair
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housing plaintiff sought to enjoin a building owner’s discriminatory steering practices, and had
standing to do so. Havens, 455 U.S. at 369. By contrast, plaintiff’s request here to eliminate racial
disparities in housing opportunities is nothing more than a request to redress generalized grievance
shared in substantially equal measure by all or most citizens, and is insufficient to confer standing.
C. Plaintiff’s Proposed Remedies Are Not Likely to Redress Its Alleged Injuries
Plaintiff’s failure to demonstrate that it is “‘likely, as opposed to merely speculative,’” James,
254 F.3d at 564 (quoting Lujan, 504 U.S. at 561), that a judgment invalidating HUD’s FY 2006 and
FY 2007 Dallas FMRs, or requiring HUD to create and use new and varying FMRs within the Dallas
area, would redress its injuries, see Compl. ¶ 39 Prayer for Relief, is fatal to its entire case.
First, plaintiff’s request that this Court “order[] HUD to implement the FY 2005 Dallas area
Section 8 program rent levels for the non-Black and non-poverty concentrated areas in Collin, Dallas,
and Denton counties,” Compl. ¶ 39A, will not redress plaintiff’s alleged injuries simply because
HUD’s FMR for the Dallas area for fiscal year 2008, now in effect, is $871, Decl. of Kurt G. Usowski
in Supp. of Def. Mot. to Dismiss (“Usowski Decl.”) ¶ 21, and is higher than the FY 2005 FMR of $868, id., that plaintiff has requested. Compl. ¶ 39A.1 Because plaintiff cannot demonstrate that it
“would directly benefit from the equitable relief sought,” Plumley v. Landmark Chevrolet, Inc., 122
F.3d 308, 312 (5th Cir. 1997), it lacks standing. Accord Steel Co., 523 U.S. at 107.
Second, regardless of whether plaintiff can trace its injuries to HUD’s actions, as it has
1 Plaintiff’s assertions in its opposition brief, Pl. Op. at 5, that FY 2008 FMRs for three- and fourbedroom units are lower than FY 2003 FMR for three-bedroom units or FY 2004 FMR for four-bedrooms does not solve its standing problem. First, the complaint requests that the Court implement FY 2005 FMRs in certain non-minority areas, not FY 2003 or FY 2004 FMRs. Compl. ¶ 39A. Second, the complaint makes no allegations that any of its clients rent, or seek to rent, three- or-four bedroom units, see id. passim, and thus fails to plead a particularized injury about three- or four-bedroom rents. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 103-104 (1998). Third, plaintiff’s attempt to raise this issue for the first time in its opposition brief in an attempt to create standing is too late to do so now. “It is axiomatic that the complaint may not be amended by the briefs in opposition to a motion to dismiss.” Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1107 (7th Cir. 1984) (improper for “district court to have relied on the plaintiffs’ briefs to embellish the conclusory allegations of the complaint.”).
By contrast, to the extent that plaintiff suggests defendant’s declaration is improper or that plaintiff should be given the benefit of the doubt in a Rule 12(b)(1) motion, Pl. Op. at 4-5, it is mistaken. Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir. 1980) (defendant may challenge the existence of subject matter jurisdiction in fact, irrespective of the pleadings, and matters outside the pleadings, such as affidavits, are considered. Moreover, plaintiff bears the burden of proof that jurisdiction does in fact exist.).
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unsuccessfully attempted to do, Pl. Op. at 24, plaintiff has failed to establish that, were this Court to order HUD to establish separate FMR Areas for predominately White areas of the Dallas Metropolitan Division, Compl. ¶ 39B-D, it is likely that its clients would be able to obtain housing in those areas. In focusing on traceability, plaintiff ignores its burden to establish that it is likely that the relief it seeks will redress its injuries. Accordingly, plaintiff’s reliance on a declaration of its Mobility Assistance Director does nothing to alleviate its reliance on impermissible speculation about what landlords in predominantly White areas might do if HUD set higher FMRs. Cf. Allen v. Wright, 468 U.S. 737, 751, 758 (1984) (overly speculative as to whether requiring the IRS to enforce its rules which prohibited tax breaks to racially discriminatory private schools, would prevent segregated schools, because withdrawal of tax breaks would not necessarily convince these private schools to change policies, or convince parents to transfer their children to nonsegregated schools); Simon, 426 U.S. 26, 43-44 (1976) (overly speculative to conclude that suspending tax benefits to private hospitals would force those hospitals to take on more indigent patients).2
In this regard, Burton v. Cent. Interstate Low-Level Radioactive Waste Compact Com’n, 23 F.3d 208 (8th Cir. 1994), exposes plaintiff’s failure in establish a likelihood of favorable redress. As defendant explained in its opening brief, the Burton court acknowledged that plaintiffs, might be 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].” Id. at 209-10. Nevertheless, the court held that establishing traceability was still insufficient because, as is the case here, it required the court to “take it on faith that LES, which is not a party to this action, would adjust its rates if the district court enjoined the [defendant’s] taxes on LLRW.” Id. at 210. Thus, in Burton, as here, it was “merely speculative” whether a favorable decision would affect plaintiffs. Id. This Court has already applied the holding of Burton before to hold that plaintiffs lacked standing because they could not establish a likelihood of favorable redress, Haile v. Town of Addison, 264 F. Supp. 2d
2 Plaintiff’s reliance on Adarand Constructors, Inc. v. Peòa, 515 U.S. 200, 211 (1995), and Bennett v. Spear, 520 U.S. 154, 168-69 (1997), Pl. Op. At 23-34, is inapposite. Adarand did not concern redressability. 515 U.S. at 211. Bennett did not concern a private party, but two different branches of the federal government, one of which, the Court held, was bound to follow the other. 520 U.S. at 168-69.
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464, 467 (N.D. Tex. 2003), and should do so again here. As in Allen, Simon, Burton and Haile, even if
this plaintiff could establish that private owners in predominantly White areas have reduced their
participation in the Dallas area PHAs’ voucher programs because of HUD’s use of the Dallas MSA to
calculate the FMR, it remains merely speculative whether private owners in such areas would increase
their participation in the Dallas area PHAs’ voucher programs if this Court were to set aside HUD’s determination.3
II. THIS COURT HAS NO JURISDICTION OVER PLAINTIFF’S CLAIMS BECAUSE THE APA PROVIDES NO WAIVER OF SOVEREIGN IMMUNITY HERE
A. Congress’s Use of the Term “Market Area” In the Housing Act Does Not Define That Term Nor Provide This Court With Any Standards To Evaluate Its Meaning
Because the APA precludes judicial review of agency actions “committed to agency discretion by law,” 5 U.S.C. § 701(a)(2), its waiver of sovereign immunity is unavailable to plaintiff.4 As
defendant demonstrated in its opening brief, Congress’s use of the term “market area” in the Housing
Act provides no “meaningful standards for defining the limits of [agency] discretion,” and accordingly,
there is no “law to apply” under § 701(a)(2). See Def. Mot. to Dismiss at 16-20 (citing Heckler, 470
U.S. at 834; Suntex Dairy v. Block, 666 F.2d 158, 163-64 (5th Cir. 1982)).
In attempting to inject some standard into the meaning of the term “market area” by which this
Court could review the reasonableness of HUD’s interpretation, plaintiff offers the plain language of
the statute, legislative history, HUD and other government documents, and caselaw. None advances
plaintiff’s case.
3 Defendant notes that nowhere in plaintiff’s opposition does it oppose defendant’s contention that plaintiff’s challenges to HUD’s FMR for the Dallas area for both FY 2006 and FY 2007, Compl. ¶¶ 12, 39A, are moot. See Pl. Op. passim. Accordingly, this Court should treat this part of plaintiff’s claim as conceded. Defendant also notes plaintiff makes no mention of the FY 2008 FMR in its complaint, only its opposition. Pl. Op. at 21.
4 Plaintiff devotes several pages of its opposition to arguing that HUD’s determination of the FMR area constitutes “final agency action,” Pl. Op. 10-11, and arguing that 5 U.S.C. § 702 waives sovereign immunity in non-APA cases, id. at 11-12, even though neither point is at issue in this case. See Compl. passim; Def. Mot. passim. In this regard, plaintiff’s reliance on Trudeau v. FTC, 456 F.3d 178, 183-187 (D.C. Cir. 2006), is completely inapposite. Trudeau held only that the waiver of sovereign immunity in 5 U.S.C. § 702 extends beyond APA actions and is not confined to a court’s power to review final agency actions. Trudeau is inapposite here because plaintiff brings its case directly under the APA and because it seeks review of HUD’s final actions in setting FMRs for the Dallas area.
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First, plaintiff simply quotes the language of the statute itself, emphasizing that it uses the term “market area.” Pl. Op. at 13 (quoting 42 U.S.C. §§ 1437f(o)(1)B) and 1437f(c)(1)). But the issue is not whether “market area” is a term used in the statute. Rather the issue is whether the Housing Act includes any standard by which a court could judge the reasonableness of HUD’s interpretation of that term. As demonstrated in our opening brief, Def. Mot. at 18-19, because the Act does not do so, interpretation of that term is committed to agency discretion. Suntex Dairy, 666 F.2d at 163-64.5
Second, plaintiff offers a quotation from the Senate version of a bill to suggest that a reasonable geographic area for a housing market could not have any significant variance in rent, Pl. Op. at 13-14 (quoting S. Rep. No. 93-693 (reprinted in 1974 U.S.C.C.A.N. 4273, 4315)). The problem with plaintiff’s argument is that, with respect to this statutory provision, Congress passed the House version. H. Conf. Rep. No. 93-1279 (“The House amendment requires HUD to establish fair market rental in each housing market area. . . . The conference report contains the House provisions.”) (reprinted in 1974 U.S.C.C.A.N. 4449, 4465 (1974) (emphasis added)). Moreover, the language of the Conference Report, which is what Congress ultimately passed, does not resolve the meaning of “market area.” Id. (stating only that “the HUD Secretary is expected to take into account factual data, analyses, and recommendations . . . in various market areas.”) (emphasis added).
In a case such as this, legislative history provides this Court with no guidance, because “[l]ike other extrinsic aids to construction, the use of legislative history is to solve, but not to create, an ambiguity.” H. Wetter Mfg. Co. v. U.S., 458 F.2d 1033, 1035 (6th Cir. 1972). See also Blanchard v. Bergeron, 489 U.S. 87, 99 (1989) (Scalia, J. concurring) (“It is neither compatible with our judicial responsibility of assuring reasoned, consistent, and effective application of the statutes of the United States, nor conducive to a genuine effectuation of congressional intent, to give legislative force to each snippet of analysis . . . in committee reports that are increasingly unreliable evidence of what the voting Members of Congress actually had in mind.”). Accordingly, in deciding whether HUD’s interpretation of the term “market area” is subject to judicial review, this Court should focus on the language of the
5 Contrary to plaintiff’s contention that defendant has conceded that the Dallas FMR Area is not a market area, Pl. Op. at 13, defendant has defined the term “market area” to include the Dallas FMR Area.
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statute, for “it is ultimately the provisions of our laws rather than the principal concerns of our legislators by which we are governed.’” Cooper Indus., Inc. v. Aviall Services, Inc., 543 U.S. 157, 168 (2004) (quotation marks and citation omitted).
Moreover, where, as here, “Congress revisits a statute giving rise to a longstanding administrative interpretation without pertinent change, the ‘congressional failure to revise or repeal the agency’s interpretation is persuasive evidence that the interpretation is the one intended by Congress.’” Commodity Futures Trading Comm’n v. Schor, 478 U.S. 833, 846, (1986) (quoting NLRB v. Bell Aerospace Co., 416 U.S. 267, 274-75 (1974)). See also Peyote Way Church of God, Inc., v. Meese, 698 F. Supp. 1342, 1346 (N.D. Tex. 1986) (same). In this case, since passing the 1974 Amendments to the U.S. Housing Act that created the Section 8 program, Congress has amended 42 U.S.C. § 1437f some 36 times and has twice expressly amended § 1437f(c)(1) to create separate fair market rental areas for Westchester County, New York, Pub. L. 100-242, Title I § 142(c)(1), 101 Stat. 1849 - 1853, 1878, 1890 (Feb. 5, 1988), and Monroe County, Pennsylvania, Pub. L. 102-139, Title II, 105 Stat. 756 (Oct. 28, 1991), but has otherwise left the term “market area,” and HUD’s interpretation of it, unchanged. Usowski Decl. ¶ 4. Indeed, despite repeated amendments to the Section 8 program generally and the express additions to § 1437f(c)(1) of specific fair market rent areas, Congress’s acceptance of HUD’s interpretation provides “an unusually strong case of legislative acquiescence in and ratification by implication.” Bob Jones Univ. v. U.S., 461 U.S. 574, 599 (1982).
Third, plaintiff points to a HUD report, not on the Section 8 program, but on housing production subsidies in the U.S. Department of Agriculture’s Rural Housing Service Section 515 program, Pl. Op. at 15 (citing Targeting Housing Production Subsidies (2003)). The report states that “there is no single national rental housing market,” and that large metropolitan areas “do not constitute single housing markets.” Targeting Production Subsidies, at 7. Whatever the value of these statements about a program operated by a different Department, the fact that HUD not only sets FMRs in about 2,500 market areas, Usowski Decl. ¶ 3, but has also divided the Dallas-Ft. Worth-Arlington Metropolitan area into different FMR areas in administering the housing choice voucher program, id. ¶¶ 11, 14-17, demonstrates that HUD’s actions are not inconsistent with the report’s statements. More
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to the point, the report does nothing to provide this Court with the standards necessary to determine whether HUD’s interpretation of the term “market area” is reasonable.
Lastly, plaintiff cites two district court cases that merely mention, but do not define, the term “market area” and have nothing whatsoever to do with the U.S. Housing Act. Pl. Op. at 15 (citing CCA Assocs. v. U.S., 75 Fed. Cl. 170, 202-03 (2007); DKE Alumni Corp. v. Colgate Univ., 492 F. Supp. 2d 106, 113-14 (N.D.N.Y. 2007)). Neither case provides this Court with any standards by which to review HUD’s actions. In CCA Assocs., the court addressed expert testimony concerning “fair market value,” not market areas, in a case that concerned takings, not the housing choice voucher program. 75 Fed. Cl. at 20-3. DKE Alumni Corp. was an antitrust case, and, in fact, expressly rejected the plaintiff’s efforts to define the relevant housing market as contiguous with the borders of a town, finding a much larger area, perhaps even a national one, was appropriate for that analysis. 492 F. Supp. 2d at 115-18. The fact that plaintiff is forced to rely on these cases demonstrates the complete dearth of any judicial standards by which this Court could judge the reasonableness of HUD’s actions.6
B. Because Suit Against Dallas Area Public Housing Authorities Provides Plaintiff With Another Adequate Remedy in a Court, the APA Does Not Waive Immunity
Because plaintiff’s ability to bring suit against Dallas area PHAs for unreasonably refusing to vary rents above HUD’s published FMR for the Dallas area provides it with “an adequate remedy in a court,” 5 U.S.C. § 704, the APA’s waiver of sovereign immunity does not apply to any of plaintiff’s
6 In an effort to focus the Court’s attention of the reasonableness of HUD’s interpretation, rather than whether any such interpretation is even reviewable, plaintiff claims that OMB has issued a “strong warning” against use of its metropolitan area definitions in non-statistical programs, Pl. Op. at 6 (citing Pl. App. at 13). However, unless and until this Court resolves defendant’s motion to dismiss, the reasonableness of HUD’s interpretation is not properly before this Court. Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583 (1999). In any event, plaintiff fails to mention that OMB expressly states that the use of its metropolitan area definition may or may not be suitable for use in program funding formulas,” and that OMB acknowledges that each agency has discretion to determine if such use is appropriate. See Pl. App. at 13. In fact, HUD economists and demographers were not only involved in drafting the new OMB definitions, but also determined that they “better reflect how local housing markets should be evaluated” because they “placed increased weight on commuting patterns.” 70 Fed. Reg. 32401, 32403 (June 2, 2005). Plaintiff’s insinuation also ignores the fact that, where appropriate, HUD modified these definitions, as it did in the Dallas-Ft. Worth-Arlington Metro Area, if, for example, “2000 Census Base Rents differed by more than [five] percent from the new OMB area 2000 Census Base Rent.” Id.
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claims against HUD.7 Notwithstanding plaintiff’s mischaracterization of HUD’s exception payment standards, Pl. Op. at 19, each Dallas area PHA retains the authority not only to vary rents between 90 and 120 percent of HUD’s published FMR (with HUD approval above 110 percent), see 24 C.F.R. §§ 982.503(b)-(c), but also, with HUD approval,8 to vary them in “an exception area” above 120 percent of HUD’s published FMR to help families find housing outside areas of high poverty. Id. § 982.503(c)(3)-(4)(i)(A). Thus, if, as plaintiff asserts, Pl. Op. at 19, the median rent in Coppell, TX is 27 percent higher than HUD’s published FMR for the Dallas area, any Dallas area PHA could, with HUD approval, vary the rent in Coppell above 120 percent. 24 C.F.R. § 982.503(c)(3)-(4)(i)(A). Thus, suit against the Dallas area PHAs to compel them to follow through on their initial attempts to vary rents could provide plaintiff with the remedy it seeks – “provid[ing] black DHA housing voucher participants “equal access” to “White rental housing markets,” Compl. ¶ 39C, D, and “eliminating the disparities between the number and percent of dwelling units made available in predominantly White rental markets and the number and percent of . . . units made available in predominantly minority rental . . . markets.” Id. ¶ 39D. Because this remedy is available to plaintiff, the APA provides no waiver of sovereign immunity here. Turner v. Sec’y of HUD, 449 F.3d 536, 540 (3d Cir. 2006).
C. The Court Should Dismiss Plaintiff’s Section 3608(e)(5) Claims Because HUD Has Neither Failed to Act Nor Wrongfully Withheld Action
Because plaintiff does not, and could not, identify a circumscribed, discrete agency action that 42 U.S.C. § 3608(e)(5) requires HUD to take, Norton v. So. Utah Wilderness Alliance (“SUWA”), 542 U.S. 55 (2004), requires dismissal of plaintiff’s § 3608(e)(5) claims. SUWA held that “pervasive
7 Because the Tucker Act does not create a substantive right enforceable against the United States for monetary damages, e.g., Mients v. U.S., 50 Fed. Cl. 665, 671 (2001), and because plaintiff’s complaint has not alleged a right to monetary damages under a statute or regulation, Compl. passim, defendant withdraws its argument that APA § 704 bars jurisdiction over plaintiff’s claims because it could have pursued an action in the Court of Claims for monetary damages.
8 Plaintiff’s assertion, Pl. Op. at 19, that HUD has not approved DHA’s exception payment request is disingenuous. Although the Dallas Housing Authority submitted an initial request, Pl. App. at 31-33, HUD’s explained that DHA need to provide additional information. Id. at 34. Although DHA provided some additional information, id. at 35, it was unable to provide HUD with specific apartments or census tracts where rents were too high. Id. Thus, it was DHA, and not HUD, that failed to follow through in seeking exception payments in 2002, but again, in 2006. See Decl. of Donald L. Darling [submitted herewith].
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oversight by federal courts over the manner and pace of agency compliance with [broad] congressional directives is not contemplated by the APA.” Id. at 66-67.
Contrary to plaintiff’s assertions, Pl. Op. at 17, the only case plaintiff cites which does not either pre-date SUWA or ignore it,9 Darst-Webbe Tenant Ass’n Bd. v. St. Louis Hous. Auth., 417 F.3d 898 (8th Cir. 2005), affirmed the dismissal of an action alleging violations of § 3608(e)(5). 417 F.3d at 909. It did not, as plaintiff suggests, reject application of SUWA to § 3608 claims. See generally id. Of course, to the extent Darst-Webbe is in any way inconsistent with SUWA, this Court should simply disregard the decision. In any event, 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 predated SUWA, its finding is sui generis, and has no precedential value.10
Accordingly, because SUWA, and not Darst-Webbe, controls resolution of plaintiff’s § 3608(e)(5) claims, the APA precludes review of these claims.
CONCLUSION This Court should grant defendant’s motion to dismiss for lack of subject matter jurisdiction.
9 Anderson v. Jackson, 2007 WL 458232 (E.D. La. Feb. 6, 2007), did not even acknowledge SUWA. 10 Even if Darst-Webbe had any persuasive authority after SUWA, which it does not, HUD’s efforts to increase fair housing opportunities in the administration of its housing choice voucher program would easily satisfy the Darst-Webbe standard. First, as noted in HUD’s opening brief, in order to increase the ability of voucher tenants to access all parts of large metropolitan housing markets, especially in markets where affordable housing was concentrated in high poverty areas, HUD has issued an interim rule establishing criteria for setting the FMR at the fiftieth percentile rent (instead of the fortieth percentile) in large metropolitan FMR areas that meet specific criteria for size, concentration of housing renting at or below the fiftieth percentile FMR, and concentration of voucher tenants in particular neighborhoods. Usowski Decl. ¶ 9; 24 C.F.R. § 888.113(c). Second, as set out above and in HUD’s opening brief, HUD’s regulations implementing the voucher program provide PHAs with options to increase or decrease area rents in order to increase housing opportunities in non-minority areas. Usowski Decl. ¶ 6; 24 C.F.R. §§ 982.503(b)-(c). Both these efforts easily demonstrate HUD’s consideration of and efforts to achieve, fair housing opportunities.
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Dated: November 13, 2007

Respectfully submitted,
PETER D. KEISLER Assistant Attorney General
RICHARD B. ROPER United States Attorney
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 james.todd@usdoj.gov Attorneys for Defendant

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CERTIFICATE OF SERVICE I hereby certify that on November 13, 2007, I electronically transmitted the attached document to the Clerk’s Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants:
MICHAEL M. DANIEL, Esq. Law Office of Michael M Daniel
3301 Elm Street Dallas TX 75226 LAURA BETH BESHARA, Esq. Daniel & Beshara 3301 Elm Street Dallas TX 75226
s/ James D. Todd Jr JAMES D. TODD JR
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 Case 3:07-cv-00945-O-BD Document 28 Filed 08/10/2009 Page 1 of 5

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

The Inclusive Communities Project, Inc., *

Plaintiff,

*

v.

*

The United States Department of

*

Housing and Urban Development,

*

Defendant.

*

Civil Action No. 07-CV-945-O ECF

PLAINTIFF’S BRIEF IN OPPOSITION TO HUD OBJECTIONS AND MOTION TO STAY

Plaintiff opposes HUD’s objections to and motion to stay the U.S. Magistrate’s July 20,

2009 order requiring HUD to provide plaintiff with the administrative record in the case. HUD

cites some unspecified burden as the reason for the objections and the stay. There is no such

burden. HUD’s attorney has admitted that the administrative record is already compiled. HUD

cites numerous cases in support of its motion. Not one of the cases involves a decision on a

motion to stay the filing of an administrative record by a federal agency. HUD has not met its

burden for overturning or staying the order to provide the administrative record. Since HUD has

already used the administrative record - as set out in self-serving affidavits by HUD employees -

in its favor on the motion to dismiss and since HUD is clearly going to continue its efforts to

dismiss the case, plaintiff will be prejudiced by an order staying the order to produce. HUD can

continue to dip into the record at its convenience while plaintiff will have no access to the record

for the continuing dispute on the motion to dismiss.

HUD could not specify a burden because there is none.

HUD’s argument that an unspecified “burden” on it justifies its objections to and its

request for a stay of the order requiring it to provide plaintiff with the administrative record upon

which HUD relied by August 19, 2009. Defendant’s Objections, page 2. HUD does not state

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what this burden might be. If HUD was seeking to prevent discovery by asserting such an undue burden, it would have to provide more than such a “mere statement.” S.E.C. v. Brady, 238 F.R.D. 429, 437 - 438 (N.D. Tex. 2006). HUD did not do so but rather rests its motion on the nonspecific objection that provides no basis for either a detailed response or for an order granting relief based on the general objection.
HUD cannot show that the order will impose any burden much less an undue burden. When HUD’s attorney first called plaintiff’s attorney after the U.S. Magistrate’s recommendation and accompanying orders were filed, the HUD attorney confirmed that the HUD administrative record had been compiled. Placing postage on a package or emailing electronic records is not an undue burden that would justify the exceptional relief of a stay of a order that HUD must admit is clearly within the discretion of the Court.
HUD’s cases provide no basis for the stay other than the discretion of the Court. The order to provide the plaintiff with the administrative record violates no statute, regulation, or court made principle. HUD’s objections and motion provide no such authority. The cases HUD cites do not involve the question of whether the provision of the administrative record should be stayed pending the final decision on a motion to dismiss. The Court of Claims routinely decides motions to dismiss along with decisions based on the administrative record. Flowers v. U.S., 80 Fed.Cl. 201, 202, 227 (Fed. Cl. 2008); Barnick v. U.S., 80 Fed.Cl. 545, 546547 (Fed.Cl. 2008). There is no legal requirement for the requested stay. In addition to HUD not meeting its burden to show a stay is justified, such an order would prejudice plaintiff by continuing HUD’s unilateral access to the administrative record. If the analogy to discovery is followed, then the onus is on HUD to show that it is entitled
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to the requested stay. HUD has shown neither legal authority nor factual grounds for the stay. An additional ground for denial of the motion is the prejudice to plaintiff caused by allowing HUD to continue to enjoy unilateral access to the administrative record even on the motion to dismiss.
HUD’s objections to providing the Court and the plaintiff with the administrative record have not kept HUD from using the administrative record on its own behalf. Although the documents in the record have not been filed or served, HUD has already filed two affidavits discussing the contents of the administrative record. HUD used the affidavits to support its motion to dismiss.
The first affidavit citing to and relying upon the administrative record was the Declaration of Kurt G. Usowski in Support of Defendant’s Motion to Dismiss for Lack of Subject Matter Jurisdiction, Document 9 filed 10/02/2007 (Usowski). Mr. Usowski was the Assistant Deputy Assistant Secretary for Economic Affairs responsible for supervising the development of the Section 8 voucher program fair market rents. Usowski, page 1. His declaration described HUD’s process for establishing fair market rent areas in general and in the Dallas area. Usowski pages 2 - 4. Mr. Usowski discussed HUD’s findings, HUD’s phone survey, HUD’s use of Census data, HUD’s use of the Consumer Price Index data, the basis for some changes to the fair market rent areas, HUD’s use of American Community Survey data, and HUD’s record for implementation of the market area for the determination of fair market rents in the Dallas area. Usowski, throughout. HUD cited Usowski on HUD’s record for establishing fair market rent areas and fair market rents 21 times in its brief in support of its motion to dismiss. Defendant’s Motion to Dismiss for Lack of Subject Matter Jurisdiction; Accompanying Brief; Certificate of Interested Persons, 4 cites on each of pages 9, 11, 12; 2 cites on each of pages 10 and 27, one cite on each
-3-

Case 3:07-cv-00945-O-BD Document 28 Filed 08/10/2009 Page 4 of 5
of pages 16, 18, 21, 25, and 28. Plaintiff had no access to the same administrative record used by HUD and Mr. Usowski.
The second affidavit citing to and relying upon the administrative record was the Declaration of Donald L. Darling In Support of Defendant’s Motion to Dismiss for Lack of Subject Matter Jurisdiction, Document 17 filed 11/13/2007 (Darling). Mr. Darling was the HUD Regional Economist and had a role in setting Section 8 Fair Market Rents. Darling, page 1. Mr. Darling’s affidavit discussed meetings with Dallas Housing Authority, data submitted by the Dallas Housing Authority, a HUD spreadsheet identifying racial composition and median rents for census tracts in Dallas, Collin, Denton, and Tarrant Counties, and his records concerning contacts with the Dallas Housing Authority. Darling pages 1 - 3. None of the records were produced. HUD used the Darling declaration to deny that it was responsible for setting rents that did not provide access to predominantly White areas. Defendant’s Reply In Support of Its Motion to Dismiss for Lack of Subject Matter Jurisdiction, page 9 n.8.
HUD asked for and received an extension of time to file its objections to the U.S. Magistrate’s Recommendation on the HUD motion to dismiss. The District Judge’s decision on those objections will be de novo. Fed. R. Civ. P. 72(b)(3). Even if HUD does not submit additional material concerning the administrative record to the District Judge, it will be using its previous record and arguments. Plaintiff will still have no access to the underlying administrative record upon which HUD relies for its motion to dismiss if the Court grants the stay.
Conclusion HUD has not shown that it is entitled to the stay on either the law or the facts. There is no law requiring the stay and HUD will suffer no burden in complying with the order. Without such
-4-

Case 3:07-cv-00945-O-BD Document 28 Filed 08/10/2009 Page 5 of 5
a showing, there is no basis to prejudice plaintiff by supporting HUD’s unilateral access to the
administrative record. Plaintiff asks the Court to exercise its discretion and deny the motion for a
stay of the order requiring HUD to provide plaintiff with a copy of the administrative order by
August 19, 2009 as ordered.
Respectfully Submitted,
s/ Michael M. Daniel Michael M. Daniel State Bar No. 05360500 DANIEL & BESHARA, P.C. 3301 Elm Street Dallas, Texas 75226-1637 214-939-9230 Fax 214-741-3596 E-mail: daniel.michael@att.net Attorney for Plaintiff
Laura B. Beshara State Bar No. 02261750 DANIEL & BESHARA, P.C. 3301 Elm Street Dallas, Texas 75226-1637 214-939-9230 Fax 214-741-3596 E-mail: laurabeshara@swbell.net Attorney for Plaintiff
Certificate of Service
I hereby certify that on August 10, 2009 I electronically submitted the foregoing document with the clerk of the court for the U.S. District Court, Northern District of Texas, using the electronic case files system of the court. The electronic case files system sent a “Notice of Electronic Filing” to the following individual who has consented in writing to accept this Notice as service of this document by electronic means: James D. Todd Jr.
s/ Michael M. Daniel
-5-

 
 Case 3:07-cv-00945-O-BD Document 35 Filed 09/29/09 Page 1 of 2 PageID 300

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

THE INCLUSIVE COMMUNITIES

§

PROJECT, INC.,

§

§

Plaintiff,

§

§

vs.

§

§

U.S. DEPARTMENT OF HOUSING

§

AND URBAN DEVELOPMENT

§

§

Defendant.

§

NO. 3:07‐CV‐0945‐O

ORDER ADOPTING FINDINGS AND RECOMMENDATIONS OF THE UNITED STATES MAGISTRATE JUDGE
Under authority of 28 U.S.C. § 636(b), t his case was referred to Magistrate Judge Jeff Kaplan for pretrial management on October 1, 2008. Doc. # 20. Among the matters then before the Magistrate Judge was a pending Motion to Dismiss for Lack of Jurisdiction filed by Defendant on October 2, 2007, Doc. # 8, together with Plaintiff’s Response, and atten‐ dant documents from both parties. See Doc. # # 9, 11 ‐ 14, 16, 17. On July 20, 2009, Magi‐ strate Judge Kaplan issued his Findings and Recommendations set out in a thorough writ‐ ten opinion. See Doc. # 22. He recommended that Defendant's Motion to Dismiss should be granted on the ground of sovereign immunity with respect to Plaintiff’s claims for alleged violations of the United States Housing Act of 1937, 42 U.S.C. § 1437, but denied on all other grounds argued.

1

Case 3:07-cv-00945-O-BD Document 35 Filed 09/29/09 Page 2 of 2 PageID 301 The Court now has it before the foregoing documents and records of proceedings, as
well as Defendant’s Objections to Magistrate Judge Kaplan’s Findings and Recommenda‐ tions, Doc. # 33, and Plaintiff’s Response, Doc. # 34. After conducting a review de novo, in accordance with 28 U.S.C. § 636(b)(1)(C), of the pleadings, files and records in this case, the Findings and Recommendations of the Magistrate Judge, and the objections thereto, the Court is of the opinion that the findings, conclusions and recommendations of the Magi‐ strate Judge as set out in his opinion are correct. They are accepted as the findings and con‐ clusions of the Court.
SO ORDERED this 29th day of September, 2009.
_____________________________________ Reed O’Connor UNITED STATES DISTRICT JUDGE
2

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 1 of 16

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

THE INCLUSIVE COMMUNITIES

§

PROJECT, INC.

§

§

Plaintiff,

§

§

VS.

§

NO.3-07-CV-094S-0

§

U.S. DEPARTMENT OF HOUSING

§

AND URBAN DEVELOPMENT

§

§

Defendant.

§

FINDINGS AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
Defendant U.S. Department ofHousing and Urban Development ("HUD") has fi led a motion to dismiss this action for injunctive reliefbrought under the Administrative Procedures Act ("APA"), 5 U.S.C. § 70 I, el seq. Forthe reasons stated herein, the motion should be granted in part and denied in part.
I. Plaintiff The Inclusive Communities Project, Inc. ("ICP") is a non-profit organization that provides assistance to minority families participating in the Housing Choice Voucher Program under
Section 8 of the United States Housing Act of 1937 ("NHA"l, as amended, 42 U.S.c. § 1437, el seq.
(See Plf. CompI. at I, '112 & 9, 'II 32). The mission of the organization is to "break down barriers to
the creation of racially and economically inclusive communities," (ld. at I, 2). To further this goal, plaintiff provides mobility and financial assistance to low-income African-American families who want to obtain rental housing in predominantly Caucasian areas in and around Dallas. (Jd. at 9-10, '1133). The mobility assistance includes negotiating with landlords to obtain Section 8 housing

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 2 of 16
in eligible areas at affordable rents. (Id). The financial assistance provided by plaintitfto its clients
includes the payment of application fees, security deposits, and utility deposits. (Id).
Under the Section 8 voucher program, HUn contracts with local public housing agencies and
private landlords to pay the difference between a fair market rent for the area and the amount paid by the low-income tenant. l See generally, 42 U.s.C. § I437f(0). HUD is responsible for establishing fair market rents, or FMRs, for the rental housing market area. See id. § 1437f(c)(I).
The HUn regulations explain how these FMRs are calculated:
Fair Market Rents (FMRs) are estimates of rent plus the cost of utilities, except telephone. FMRs are housing market-wide estimates of rents that provide opportunities to rent standard quality housing throughout the geographic area in which rental housing units are in competition. The level at which FMRs are set is expressed as a percentile point within the rent distribution ofstandard quality rental housing units in the FMR area. FMRs are set at the 40th or 50th percentile rent--the dollar amount below which the rent for 40 or 50 percent of standard quality rental housing units falls. The 40th or 50th percentile rent is drawn from the distribution of rents of all units that are occupied by recent movers. Adjustments are made to exclude public housing units, newly built units and substandard units.
24 C.F.R. § 888.113(a). The regulations emphasize that HUn "uses the most accurate and current data available to develop the FMR estimates," including census data and random digit dialing
telephone surveys. See id. § 888. II3 (e)(I). Using this method, HUD annually estimates FMRs for
approximately 350 metropolitan areas and 2,300 non-metropolitan counties throughout the United
States. See generally. Franconia Assoc. v. United Slales, 61 Fed. CI. 718, 760 (2004). The issue in this case involves the geographic area used by HUD to detennine FMRs in the Dallas rental
housing market.
I A tenant family may be required to pay up to 40% of its monthly adjusted income for rent. See 42 U.S.C. § 1437~oX2XAX;) & (oX3).

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 3 of 16
The Dallas, TX HUD Metro FMR area is comprised of eight counties, which are carved out of a larger Dallas-Fort Worth-Arlington metropolitan statistical area defined by the Office of Management and Budget ("OMB"). (See Plf. Compl. at 3-4, ~~ 9 & 13). According to plaintiff, this practice of using a large multi-county region as the starting point for detennining FMR violates both the NHA, which requires HUD to base FMRs on "market area," and the Fair Housing Act of 1968 ("FHA"), 42 U.S.C. § 3601, et seq., which imposes an affinnative duty on HUD to promote fair housi ng policies. (See id. at II, ~ 37). Succinctly stated, plaintitfcontends that HUD's practice incorporates rents from predominately minority housing markets, where many ofthe neighborhoods are blighted and have inadequate public and private services and facilities, and results in lower FMRs for the Dallas rental housing market area, thereby precluding Section 8 program participants from obtaining rental housing in more amuent Caucasian areas. (See id. at 3, , 10). Instead, plaintiff argues that HUD should use smaller geographic areas to determine FMRs, which would more accurately reflect the rent levels in Caucasian neighborhoods and give low-income minority families equal access to rental housing in those neighborhoods. (See id. at 6-7, 19). In this lawsuit, plaintiff seeks broad equitable relief, including an injunction : (1) compelling HUD to use smaller rental housing market areas, instead of large multi-county regions, as a basis for delennining FMRs; (2) requiring HUD to establish separate Section 8 program rent level s for separate rental housing markets; and (3) compelling HUD to "consider and further fair housing opportunities" for minority participants in the Section 8 program when it sets rent levels. (See id. at 11-12, 39).
The case is before the court on defendant's motion to dismiss for lack of subject matter jurisdiction. As grounds for its motion, defendant contends that plaintiff lacks standing to bring thi s suit and that HUD has not waived sovereign immunity. The issues have been fully briefed by the panies and the motion is ripe for detennination.

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 4 of 16
II.
The gravamen of defendant's standing argument is that the remedies sought by plaintifTwill not redress its injuries and amount to nothing more than generalized grievances.2 Because standing is a prerequisite to the exercise of federal jurisdiction, the court considers this issue first. See Cole v. General Motors Corp., 484 F.3d 717, 721 (5th Cir. 2007).
A. "The doctrine of standing addresses the question of who may properly bring suit in federal
court." The inclusive Communities Project, Inc. v. Texas Dept. 0/Housing & Comm. Affairs, No.
3-08-CV-0549-D, 2008 WL 5191935 at +2 (N.D. Tex. Dec. 11 ,2008). To satisfy the case-orcontroversy requirement of Article HI of the Constitution, the plaintiff must establish that it has "suffered 'injury in fact,' that the injury is 'fairly traceable' to the actions of the defendant, and that the injury will likely he redressed by a favorable decision." Id., 2008 WL 5191935 at +2, quoting Bennett v. Spear, 520 U.S. 154, 162, 117 S.Ct. 1154, 1161 , 137 L.Ed.2d 281 (1997). An injury in fact must be "concrete and ... actual or imminent, not conjectural or hypothetical." Id , quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61,112 S.Ct. 2130,2136,119 L.Ed.2d 351 (1992). Moreover, "the injury must affect the plaintiff in a personal and individual way," Id. quoting Lujan, 112 S.Ct. at 2136 n.1. Stated differently. a party must assert its own legal rights and interests, and cannot rest its claim to relief on the legal rights or interests of third parties. See Warth v. Seldin, 422 U.S. 490, 500, 95 S.Ct. 2197,2206,45 L.Ed.2d 343 (1975). For injunctions, the plaintiff must also show that it is likely to suffer future injury as a result of the challenged conduct,
1 Defendant also argues that plaintiff lacks standing to sue on behalf of its clients. that plaintiff cannot obtain injunctive relief for past injuries, and that any claims based on FMRs, other than the FMRs currently in effect, are moot. (See Der. Mot. Br. at 10-12, 15). In its response, plaintiff makes clear that it seeks re lief only for its own injuries and only with respect to HUD's current practice of determining FMRs. (See Plf. Resp. 8r. at 20-21). The court therefore declines to address these other grounds for dismissal. However, in order to clarity its claims and the nature of relief sough t, plaintiff should amend its complaint before this case proceeds further.

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 5 of 16
and that the reliefrequested will prevent that future injury. See James v. City ofDallas, 254 F.3d 551,563 (5th CiT. 2001), cerl. denied, 122 S.Ct. 919 (2002), citing CityoJLos Angelesv. Lyons, 461 U.S. 95, 102, 103 S.Ct. 1660, 1665,75 L.Ed.2d 675 (1983). However, "if the injury is accompanied by any continuing, present adverse effects, standing for injunctive relief can be found." Id, quoting Lyons, 103 S.Ct. at 1665 (internal quotations omitted).
As the party seeking to invoke federal jurisdiction, plaintiff bears the burden of proving its standing. See Inclusive Communities Project, 2008 WL 5191935 at "'2, citing Lujan, 112 S.Ct. at 2136. A defendant may challenge standing by filing a Rule 12(b)(I) motion to dismiss. If the defendant merely brings a Rule 12(b)(I) motion, it is considered a facial attack, and the court looks only to the sufficiency of the allegations in the pleading, assuming them to be true. See Paterson v. Weinberger, 644 F.2d 521, 523 (5th CiT. 1981). The court must deny the motion if the allegations are sufficient to allege jurisdiction. See Inclusive Communities Project, 2008 WL 5191935 at .3. A defendant may also make a factual attack on subject matter jurisdiction by submitting evidence, such as affidavits and testimony. See Middle South Energy, Inc. v. City o/New Orleans, 800 F.2d 488, 490 (5th Cir. 1986), When a defendant provides evidence factually attacking subject matter jurisdiction, the plaintiff must submit evidence and prove by a preponderance of the evidence that the court has jurisdiction. Id In the instant case, HUD has submitted an affidavit in support of its Rule 12(b)(I) motion. However, nothing in the affidavit challenges any factual matters necessary to the detennination ofstanding. The court therefore treats the motion as a facial attack, rather than a factual attack, on jurisdiction. See Estate o/Merkel v. United Siales, No. 3-06-CV-1891-D, 2008 WL 5378183 at '2 n.2 (N.D. Tex. Dec. 23,2008) (treating Rule 12(b)(1) motion as facial attack where affidavits submitted by defendant did not challenge any factual matter bearing on jurisdiction);

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 6 of 16

IBEW-NECA Southwestern Health & Benefit Fund v. WinsleI, No. 3-06-CV-0038-D, 2006 WL

954010 at '1 (N.D. Tex. Apr. 12,2006) (same).

B.

Defendant contends that plaintifflacks standing to challenge HUD's practice ofdetermining

FMRs for the Dallas rental housing market because the injunctive relief it seeks wi ll not redress its

injuries. Under the third requirement of Article 1II standing, plaintiff must show that it is '''likely,'

as opposed to merely 'speculative; that the injury will be redressed by a favorable decision." Lujan,

112 S.Ct. at 2136. Although defendant does not directly challenge plaintiffs alleged injuries at the

pleading stage, (see Def. Reply at 2), it is necessary to briefly discuss the nature of those injuries

before examining redressability.

I.

A non-profit fair housing organization, such as plaintiff, can establish injury by showing that

the challenged unlawful conduct frustrates its mission and requires it to devote significant resources

to counteracting the discriminatory effects of that conduct. See Havens Realty Corp. v. Coleman ,

455 U.S. 363, 379,102 S.Ct. 1114, 1124-25,7 1 L.Ed.2d 214 (1989). Here, plaintiff alleges that

HUO's practice of using a large multi-county region as the starting point for determining FMRs

results in racial segregation in the Dallas rental housing market, thereby frustrating plaintiffs mission

of promoting equal housing opportunities and requiring the expenditure of more time and more

money to achieve its goals. (See Plf. Compl. at 7, ~ 26 & 10, 'i\35). In particular, plaintiff alleges

that HUD's rent setting policy directly and adversely affects its interests by:

•

reducing the number of units that plaintiff can use to help its

clients find housing in non-minority concentrated market

areas;

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 7 of 16

•

increasing the amount of time per client that plaintiff must

spend in order to help its clients find housing in non-minority

concentrated market areas;

•

increasing the amount of financial assistance that plaintiff

must spend in order to help its clients find housing in 000-

minority concentrated market areas; and

•

discouraging fami lies who work with plaintifffrom choosing

dwelling units in market areas that offer racially integrated

housing because of the cost fac tors involved in such a choice.

(See Plf. CampI. at 10, ~ 35). Similar allegations of hann suffered by non-profit housing

organizations have been held sufficient to establish injury for standing purposes. See, e.g. Havens

Realty, 102 S.Ct. at 1123-25; Inclusive Communities Project, 2008 WL 5191935 at '4.

2.

The issue raised by defendant is whether the remedy requested by plaintifTis likely to redress

its injuries. The court has little difficulty concluding that an injunction requiring HUn to use smaller

rental housing market areas, instead of a large multi.county region, as a basis for determining FMRs

would result in higher rental rates in predominantly Caucasian areas of Dallas, thereby expanding

opportunities for low·income African American fam ilies to obtain Section 8 housing in those areas.

Wi th more rental housing opportunities available in non·minority areas, plaintiff likely will have to

spend less time and less money helping clients secure housing in desegregated neighborhoods. At

least at the pleading stage. plaintiff has sufficiently demonstrated that it is likely, as opposed to

merely speculative, that its injuries will be redressed by a favorable decision in this case. See Inclusive Communities Project, 2008 WL 5191 935 at .6.3

) This conclusion is bolstered ifthe court treats defendant's Rule 12(bX I) motion as a factual anack, rather than a facia l attack, on jurisd iction. In an anempt to counter defendant's argument that the relief requested in this lawsuit would not necessarily expand housing opportunities in predom inantly Caucasian areas, plaintiff relies on the affidavit of its Mobility Assistance Director, Stephanie McGee, who states:

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 8 of 16
C.
Defendant further contends that plaintiffs request for a broad injunction eliminating racial
disparities in the Dallas rental housing market area is nothing more than a "generalized grievance."
At issue is plaintiffs request for:
an injunction compelling HUD to set separate Section 8 program rent levels for the separate rental housing markets at dollar amounts that provide DHA's Black Section 8 voucher program participants equal access to rental housing in the White rental housing markets. Equal access is achieved by setting rent levels using the 50th percentile basis for each of the rental housing markets and eliminating the disparities between the nwnber and percent of dwelling units made available in predominately White rental housing markets and the number and percent of dwelling units made available in predominantly minority rental housing markets.
(See Def. Mot. Br. at 10 & Def. Reply at 2, citing Plf. Compl. at 12, ~ 39D). Relying on the Fifth
Circuit's decision in James v. City ofDallas, 254 F.3d 551 (5th Cir. 200 I), defendant argues that the
injunction sought by plaintiff is too general to support Article III standing.
During the period from May 2007 through September 2007 ICP negotiated with 44 landlords in predominantly white areas on behalf of African American Section 8 voucher participants concerning the issues raised by the rent being higher than the Section 8 rent as set by HUD Fair Market Rent level. In 20 instances, the landlord refused to lower the rem even though the tenant was e lig ible !O rent the unit. In these cases, but for the fact that rents set by the HUD Fair Market Rent levels were lower than the rent charged by the landlord, the Seclion 8 participant would have rented that specific unit in a predominately while area.
During that same period ICP was able to negotiate with 24 landlords who agreed to lower the contract rent for the dwelling unit in order for an African American Section 8 participant to rent the unit. In these cases, ICP was only able to obtain the rent reduction by paying the landlord a bonus. The bonus was high enough in these instances for the landlord to forego its usual rent and lower the rent charged to the Section 8 participam. ICP has spent 523 ,686.50 for these bonus payments during this period.
(See Plf. Resp. App. at 3). This evidence, ifconsidered by the court, supports the conclusion that the injury alleged by plaintiIT-·the increased time and costs associated with helping minority families obtain rental housing in non-minority areas--likely would be redressed by an injunction requiring HUO to use smaller rental housing market areas as the basis for detennining FMRs.

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 9 of 16
James was a class action brought by two African-American homeowners against the City of Dallas and HUD challenging the demolition of repairable si ngle-family homes in predominately minority neighborhoods without proper notice or a warrant, and charging that the "no-notice" demolition program was the result of intentional race discrimination. James, 254 FJd at 558. In their compl aint, the plaintiffs sought, inter alia, "a pennanent injunction requiring HUD to administer all of its housing programs in a manner that wi ll eradicate the effects of HUD's discriminatory demolition practices[.]" Jd. at 561. The Fifth Circuit held that this broad request for injunctive relief was not sufficiently targeted to remedy plaintiffs' specific injuries. ld. at 568. Therefore, the plaintiffs lacked standing to seek such relief. ld., citing Warth, 95 S.Ct. at 2205 (recognizing that a "generalized grievance" shared in substantially equal measure by all or most citizens cannot provide standing to request injunctive relief).
Unlike the injunction requested in James, the relief sought by plaintiff in the instant case is not a "sweeping request to generally eradicate the effects ofdiscrimination." Cf id. Instead, plaintiff asks the court to require HUD to "set separate Section 8 program rent levels for the separate rental housing markets at dollar amounts that provide DHA's Black Section 8 voucher program participants equal access to rental housing in the White rental housing markets. " (See Plf. Compl. at 12, ~ 390). Plaintiff goes on to suggest that "(e]qual access is achieved by setting rent levels using the 50th percentile basis for each of the rental housing markets and eliminating the disparities between the number and percent of dwelling units made available in predominately White rental housing markets and the number and percent of dwelling units made avai lable in predominantly minori ty rental housing markets." (Id.). Read in its entirety, it is clear that plaintiffdoes not seek a broad injunction to "eliminat[e] racial di sparities in housing opportunities," 8S defendant argues in its motion. (See Def. Mot. Br. at 10). By enj oining HUD from using a large multi-county region as a basis for

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 10 of 16
determining FMRs and requiring the agency to set separate fent level s for separate rental housing markets defined by smaller geographic areas, plaintiffis attempting to further its mission of helping low-income minority families gain access to the rental housing market in predominantly Caucasian areas of DaJlas, Such relief is targeted to remedy plaintiffs specific injury of having to spend more time and more money to accomplish its goals, and does not seek to redress a "generalized grievance." Thus, plaintifThas demonstrated Article III standing to prosecute this claim for injunctive relief.
Ill. The court next considers whether plaintiff's claims under the APA, through which it seeks redress for alleged violations of the N HA and the FHA, are barred by the doctrine of sovereign immunity. While recognizing that the APA allows a person to seek judicial review for an alleged legal wrong committed by a federal agency, see 5 U.S.C. § 702, defendant argues that this statutory waiver of sovereign immunity does not apply to plaintiff's claims because: ( I) HUD's rent-setting practices are committed to agency discretion by law; and (2) plaintiff has other adequate remedies.
A. "The basic rule of federal sovereign immunity is that the United States cannot be sued at all
without the consent ofCongress. " St. Tammany Parish v. Federal Emergency Management Agency, 556 F.3d 307, 316 (5th Cir. 2009), quoting Block v. North Dakota ex rei. Board a! University & SchoolLands, 461 U.S. 273, 287, 103 S.Ct. 1811 , 1819,75 L.Ed.2d 840 ( 1983). Section 702 of the
APA authorizes suits against th e United States through a limi ted waiver of sovereign immunity for relief other than monetary damages related to an agency's regulatory action. Id. at 3 17, citing 5 U.S.C . § 702. However. the waiver does not apply to agency actions that are committed to agency discret ion by law. /d, ciling 5 U.S.C. § 70 I(a)(2). This exception to judicial review is "very narrow" and applies only "in those rare instances where 'statutes are drawn in such broad tenns that

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 11 of 16
in a given case there is no law to apply.'" Ellison v. Connor IS3 F.3d 247, 2S1 (Sth Cir. 1998), quoting Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410, 91 S.Ct. 814, 821, 28 L.Ed.2d 136 (1971); see also Sun/ex Dairy v. Block, 666 F.2d IS8, 163 (Sth Cir.), cert. denied, 103
S.Ct. 59 (1982). Stated differently, judicial review is unavailable only "ifthe statute is drawn so that a court would have no meaningful standard against which to judge the agency's exercise of
discretion." Heckler v. Chaney. 470 U.S. 821 , 830, lOS S.Ct. 1649, 16SS , 84 L.Ed.2d 714 (198S). I.
Defendant contends that its rent-setting practices are committed to agency discretion and,
therefore not subject to judicial review, because the NHA does not provide meaningful standards against which the court can review HUD's detennination of what constitutes a "market area." (See Def. Br. at 19). Plaintiffcounters that the "law to apply" can be found in the text of the statute itself, HUD's own regulations, the legislative history, and other agency materials. (See Plf. Resp. Sr. at 13-
IS). Initially, the court observes that the NHA does not define the tenn "market area." Section
1437f(0)( I)(8), which establishes a payment standard for the tenant-based housing choice voucher program, merely provides:
[T]he payment standard for each size of dwelling unit in a market area shall not exceed 110 percent of the fair market rental established under subsection (c) of this section for the same size ofdwelling unit in the same market area and shall be not less than 90 percent of that fair market rental. 42 U.S.C. § 1437f(o)(I )(B) (emphasis added). Section 1437f(c)(I), which deals generally with the amount and scope of assistance payments, provides: The maximum monthly rent shall not exceed by more than to per centum the fair market rental established by the Secretary periodically but not less than annually for existing or newly constructed rental

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 12 of 16
dwelling units of various sizes and types in the market area suitable for occupancy by persons assisted under this section[.]
Id. § I437f(c)( I) (emphasis added). Although these statutory provisions use the tenn "market area,"
neither sets forth any guidelines for determining how a "market area" should be established.
An agency's own regulations can also provide the requisite "law to apply." See Ellison, 153
F.3d at 251. The HUD regulation cited by plaintiff explains that "FMRs are housing market-wide
estimates of rents that provide opportunities to rent standard quality housing throughout the
geographic area in which rental housing units are in competition." See 24 C.F.R. § 888.113(a)
(emphasis added). However, this regulation does not provide any guidance for determining what
constitutes a "geographic area." Certainly it does not support plaintiff's argument that large multi-
county regions should not be the starting point for determining FMRs. If anything, a fair reading of
the entire regulation suggests just the opposite. Section 888.113(d) states:
FMR areas are metropolitan areas and nonmetropolitan counties (nonmelropolitan parts of counties in the New England States). With several exceptions, the most current Office of Management and Budget (OMB) metropolitan area definitions of Metropolitan Statistical Areas (MSAs) and Primary Metropolitan Statistical Areas (PMSAs) are used because oftheir generally close correspondence with housing market area definitions. HUn may make exceptions to OMB definitions if the MSAs or PMSAs encompass areas that are larger than housing market areas. The counties deleted from the HUD-defined FMR areas in those cases are established as separate metropolitan county FMR areas.
Id. § 888. J l3(d) (emphasis added). Still, nothing in the HUD regulation sets forth any identifiable
factors by which a court could review the agency's determination of what constitutes a specific
housing market area.
Nor is any of the legislative history cited by plaintiff useful in establishing meaningful
standards for judicial review of the agency's action. Senate Report No. 93-693. which anticipated

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 13 of 16
that HUD would "define the 'areas' for which fair market rents are to he determined in such a way
as not to include in a single area communities which are characterized by significant differences in rentals or construction costs for comparable housing," see Sen. Rep. No. 93 -693,1974 U.S.C.C.A.N.
4273,4315 (1974), is not part of the legi slative history of the bill that was ultimately passed by Congress. Instead, Congress passed the House version ofthe bill, which required HUD "to establish fair market rentals in each housing market area for new and existing units of various sizes and types suitable for occupancy for low-income families," but did not further define "market area." See H. Conf. Rep. No. 93-1279, 1974 V.S.C.C.A.N. 4449, 4465 (1974). Plaintiffalso relies on a report prepared for HUD by an outside consulting finn, which recognizes that :
An important issue [in determining the demand and supply of affordable rental housing] is what constitutes a rental housing market, that is, within what group of properties are price adjustments made.
Clearly, there is no single national rental housing market. Entire metropolitan areas (particularly the larger ones) also do not constitute single housing markets. (See Plf. Resp. App. at 26) (emphasis added). However, this report relates to the Rural Housing
Service ("RHS") Section 515 program, which provides direct loans for the construction and maintenance of multi -family rental projects that serve low-income families, not the Section 8
voucher program. (See id. at 25).
In sum, the court concludes that there are no meaningful standards against which to review HUD's detennination of what constitutes a "market area" under section 1437f of the NHA. Consequently, sovereign immunity bars any claims predicated on alleged violations of that statute.
2.
The court reaches a different conclusion with respect to alleged violations of section 3608(e)(5) of the FHA, which imposes an affinnative duty on HUD to "administer the [housing]

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 14 of 16
programs ... in a manner affi rmatively to further the policies of[the Act)." 42 U.S.C. §3608(e)(5). Numerous courts have exercised subject matter jurisdiction over claims brought against HUD under section 3608. See, e.g. N.A.A.C. P. v. Secretary o/Housing and Urban Development, 817 F.2d 149,
160-61 ( Ist Cir. 1987); Darst-Webbe Tenant Assoc. Boardv. St. Louis Housing Authority. 41 7 FJd 898,907 (8th Cir. 2005); see also Anderson v. Jackson , No. 06-3298, 2007 WL 458232 at *2 (E.D. La. Feb. 6, 2007) (citi ng cases). In its complaint, plaintiff alleges that HUD violated its duty to further the fair housing policies of the FHA by fai ling to consider the effects of its rent-setting practices on the racial composition ofthe areas affected and the integrated housing choices avai lable to minority Section 8 participants in and around Dallas. (See Plf. Compl. at t I, 37). This claim is similar to other claims brought against HUD that were held to be reviewable under the APA. See,
u.s. e.g. Thompson v. Dept. ojHousing and Urban Development, 348 F.Supp.2d 398, 464 (D. Md.
2005) (suit alleging that HUD failed to fulfill its statutory duty under the FHA to consider the regional effects of its desegregation policies in regard to city's public housing); M&T Mortgage Corp. v. White. No. 04-CV-4775-NGGVVP , 2006 WL 47467 at *10 (E.D.N.Y. Jan. 9, 2006) (suit alleging that HUD's actions in approving mortgage insurance applications without considering the racial impact of the program violated the FHA).4
B. Finally, defendant argues that plaintiff cannot seek judicial review under the APA because it has other adequate remedies at law. See 5 U.S.C. § 704 (authorizing judicial review of final
~ The court rejects defendant's argument that the Supreme Court's decision in Norton v. Southern Utah Wildern ess Alliance, 542 U.S. 55, 124 S.Ct. 2373, 159 L.Ed.2d 137 (2004) ("SUWA"), precludes judicial review of plaiOlitrs claims for alleged violations ofthe FHA. In SUWA, the Supreme Court held that "a claim under § 706(1) [of the APA) can proceed only where a plaintiff asserts that an agency failed to take a discrete agency action that it is required to talce." SUWA, 124 S.Ct. at 2379 (emphasis in original). However, that requirement does not apply in situations where, as here, a court is asked to review whether HUD has met its statutory duty to affinnatively further rair housing policies. See Darst~Webbe, 417 F.3d at 907; Thompson v. U.S. Dept. a/Housing and Urban Development, No. MJG·95·309, 2006 WL 581260 at · 4·5 (D. Md. Jan . 10,2006).

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agency actions "for which there is no other adequate remedy in a court"). The two alternative remed ies suggested by defendant are: (1) a suit for money damages in the Court of Federal Claims under the Tucker Act, 28 U.S.C. § 1491 (a)(I); or (2) an action against the Dallas Housing Authority ("DHA"). (See Def. Mot. Br. at 20-22). However, plaintiff does not seek money damages in this case, It requests only injunctive relief, Defendant wholly fails to explain how a suit for money damages would be an adequate substitute for the relief sought by plaintitT--an injunction requiring HUD to consider the effects of its rent-setting practices on the racial composition ofthe Dallas rental housing market and to affirmatively further fair housing opportunities for African-American Section 8 participants in the Dallas area. Nor does defendant explain how a suit against DHA would change HUD' s rent-setti ng practices. Because no other adequate remedy is available, plaintiff may seek injunctive relief against HUD under the APA for alleged violations of the FHA.
RECOMMENDAnON Defendant's motion to dismiss for lack of subject matter jurisdiction [Doc. #8] should be granted in part and denied in part. The motion should be granted on the ground of sovereign immunity with respect to plaintiffs claims for alleged violations of the NHA. In all other respects, the motion should be denied. A copy of this report and recommendation shall be served on all parties in the manner provided by law. Any party may file written objections to the recommendation within 10 days after being served with a copy. See 28 U.S.C. § 636(b)(I); FED. R. Cty. P. 72(b). The failure to file written objections will bar the aggrieved party from appealing the factual findings and legal conclusions of the magistrate judge that are accepted or adopted by the district court, except upon grounds of plain error. See Douglass v. United Services Automobile Ass'n, 79 F.3d 1415, 1417 (5th Cir. 1996).

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 16 of 16
DATED: July 20, 2009.
LAN STATES MAG ISTRATE JUDGE

 
 Case 3:07-cv-00945-O-BD Document 42 Filed 10/26/2009 Page 1 of 22

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

The Inclusive Communities Project, Inc., *

Plaintiff,

*

v.

*

The United States Department of

*

Housing and Urban Development,

*

Defendant.

*

No. 3:07-CV-945-O

FIRST AMENDED COMPLAINT

Introduction

1. HUD is the federal administrator of the Section 8 program. HUD sets the maximum

ceiling rent for the Section 8 program without regard for market rents in rental housing markets

in the Dallas area but instead uses the rents in predominantly minority and low income

concentrated areas to set the maximum rents for use in predominantly White and non-low income

concentrated areas. HUD uses this manipulated maximum ceiling rent to steer Black DHA

Section 8 participants away from dwellings that should be available for use by Section 8 families

in modest but decent units in predominantly White Dallas metropolitan area rental housing

markets. HUD’s steering puts many Black Section 8 families into racially segregated areas

marked by conditions of slum and blight. HUD’s action selecting the areas for use in setting

maximum rents affects the operation of the entire Section 8 program. The suit seeks an end to the

HUD action.

2. ICP, the Inclusive Communities Project, Inc., helps Black Section 8 participants obtain

and keep dwelling units in predominantly White areas. HUD’s actions choosing non-market

areas as the basis for setting Section 8 maximum rents directly interferes with ICP’s function by

reducing the number of units in White areas available for use by Section 8 participants. Section 8

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participants already residing in predominantly White areas may have to pay more rent or move from their current dwelling. Section 8 participants seeking units in predominantly White areas may have to pay more rent and will have fewer units available to them. This suit seeks injunctive relief against the HUD rent setting policies and practices that are perpetuating racial segregation in the Dallas metropolitan area.
Jurisdiction 3. This Court has jurisdiction pursuant to 28 U.S.C. §§ 1331, 1343(4), and 42 U.S.C. § 3613(a). Plaintiff 4. The plaintiff is ICP. ICP is a Texas non-profit corporation which works for the creation and maintenance of racially and economically inclusive communities, the expansion of fair and affordable housing opportunities for low income families, and redress for policies and practices that perpetuate the harmful effects of discrimination and segregation. Specifically, in furtherance of this mission, ICP seeks to create and obtain affordable housing opportunities in non-minority concentrated areas for persons eligible for low rent public housing and to provide the counseling and other forms of assistance to Black families seeking to use their DHA Section 8 voucher to move into low-poverty, non-minority concentrated areas throughout the Dallas metropolitan area. ICP’s office is located in the City of Dallas, Dallas County, Texas. Defendant 6. The defendant is the United States Department of Housing and Urban Development [HUD]. HUD is an executive agency of the United States of America. The Section 8 program 7. The Section 8 program is the federal government's major program for assisting very
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low-income families to find and pay for decent, safe, and sanitary housing in the private housing market. The Section 8 families pay at least 30% of their income for the gross rent for a unit. Gross rent includes both the contract rent and the cost of the utilities for the unit. The Section 8 subsidy for the portion of the rent not paid by the Section 8 family is paid directly to the landlord. HUD is the federal agency responsible for administering the Section 8 program using federal funds. DHA is a local agency responsible for administering the Section 8 voucher program.
8.The Section 8 program legislation requires HUD to establish the fair market rents for existing or newly constructed rental dwelling units of various sizes and types in the market area suitable for occupancy by persons assisted under the program. 42 U.S.C. § 1437f(o)(1)(B) incorporating 42 U.S.C. § 1437f(c)(1). The units suitable for occupancy by persons assisted by Section 8 are referred to as “standard quality, non-luxury housing.” The fair market rental for standard quality, non-luxury housing is used to determine:
A. whether or not a unit is eligible for any subsidy assistance, and B. if the unit is eligible for subsidy, the amount of the rent paid by the participant and the amount of federal subsidy that can be paid on behalf of a Section 8 participant. 42 U.S.C. § 1437f(o)(2), (3). 9. Rather than actually determine fair market rents using rental housing markets, HUD sets a maximum or ceiling rent for the Section 8 voucher subsidy. HUD sets a different maximum or ceiling rent for specific geographic regions. HUD calls the maximum rent for a geographic area the Fair Market Rent or FMR even if it was set without regard to market areas. HUD sets a different FMR for 0, 1, 2, 3, 4, 5, and 6 bedroom units. 10. In metropolitan areas that include multiple counties such as Dallas, HUD will set a single FMR that applies to the entire group of counties. In metropolitan areas that include only
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one county, HUD may set a single FMR for that county. In non-metropolitan areas, HUD generally sets FMRs for each separate county. But in some metropolitan areas HUD has subdivided a number of predominantly White counties into more than one FMR areas with different FMRs for each portion of the county.
11. The amount of subsidy as determined by the FMR level that is available for the lease of a unit determines the areas within which dwelling units will be made available to Section 8 Housing Choice Voucher tenants.
12. DHA’s September 24, 2009 CrystalReportViewerWS(1) 092409.xls report contains information showing that its Section 8 population is 88% Black and approximately 6% White.
13. The Section 8 families participating in DHA’s Section 8 program are not legally restricted to units in either the City of Dallas or Dallas County. DHA is required to administer the Section 8 program for any eligible unit located by a DHA Section 8 participant in Dallas or any of the six adjoining counties - Collin, Denton, Kaufman, Rockwall, Ellis, or Tarrant County. But the FMR for the Dallas area has an effect equivalent to a legal restriction. Out of 16,848 DHA Section 8 households, there were only 540 DHA Section 8 households in Collin County and only 319 DHA Section 8 households in Denton County according to DHA’s September 24, 2009 CrystalReportViewerWS(1) 092409.xls report.
HUD calculates the Dallas FMRs using a 12 county region instead of housing markets.
14. HUD uses the data for rental dwelling units in a 12 county region to set the FMR levels for the eight county HUD Dallas FMR area. For example, the two-bedroom Dallas area FMR is based on a set of 2000 U.S. Census rents for two bedroom units in Collin, Dallas, Delta, Denton, Ellis, Hunt, Kaufman, Rockwall, Johnson, Parker, Tarrant, and Wise counties. There are
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approximately 114,000 two bedroom rental units in these 12 counties. The HUD 2000 Census
base two-bedroom FMR, $731, is the least amount of rent that makes 57,000 of the 114,000,
50%, of the units available. The rents for these units range from $204 to $731. HUD then updates
this 2000 Census Base FMR by various factors to arrive at the current Fiscal Year FMR. The
two-bedroom FMR is also used to set the rents for 0, 1, 3, 4, 5, and 6 bedroom units. The two-
bedroom FMR is multiplied by various ratios to arrive at the FMR for the other bedroom sizes.
16. HUD claims that the use of the 12 county region and the use of the eight count region
to set Dallas area FMRs are justified because those regions are the metropolitan statistical areas
set by the Federal Office of Management and Budget for use in administering the Section 8
program. HUD’s claim that the use of the multi-county FMR for Dallas area Section 8 FMRs is
justified by or required by the federal Office of Management and Budget (OMB) requirements is
false and is a pretext for discrimination. OMB specifically warns against the use of the
metropolitan statistical areas in the administration of programs.
17. OMB BULLETIN NO. 04-03, February 18, 2004 states:
Nonstatistical Program Uses of the Statistical Area Definitions. In periodically reviewing and revising the definitions of these areas, OMB does not take into account or attempt to anticipate any nonstatistical uses that may be made of the definitions, nor will OMB modify the definitions to meet the requirements of any nonstatistical program. Thus, OMB cautions that Metropolitan Statistical Area and Micropolitan Statistical Area definitions should not be used to develop and implement Federal, state, and local nonstatistical programs and policies without full consideration of the effects of using these definitions for such purposes. These areas are not intended to serve as a general-purpose geographic framework for nonstatistical activities, and they may or may not be suitable for use in program funding formulas.
OMB recognizes that some legislation specifies the use of Metropolitan Statistical Areas for program purposes, including the allocation of Federal funds, and will continue to work with the Congress to clarify the foundations of these definitions and the resultant, often unintended consequences of their use for nonstatistical purposes.
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In cases where there is no statutory requirement and an agency elects to use the Metropolitan, Micropolitan, or Combined Statistical Area definitions in nonstatistical programs, it is the sponsoring agency's responsibility to ensure that the definitions are appropriate for such use. When an agency is publishing for comment a proposed regulation that would use the definitions for a nonstatistical purpose, the agency should seek public comment on the proposed use. 18. The 12 county area is not a single rental housing market area. The 12 county area consists of 8,990 square miles of land with 5,161,544 people. In fact, HUD sets three separate FMRs for use in different parts of the 12 county area. But only the FMR for the Dallas area is set using the data for all 12 counties. HUD sets separate FMR levels in the four counties of Johnson, Parker, Tarrant, and Wise because of its determination that those counties are two separate FMR areas. Johnson, Parker, and Tarrant counties are in one HUD FMR area and that FMR is set using data only for those three counties. Wise County is in a separate FMR area and that FMR is set using data only for Wise County. Despite HUD’s determination that these four counties are separate FMR areas, forty percent (40%) of the units that HUD uses to calculate its FMR levels for the Dallas area FMR are in those four counties - Johnson, Parker, Tarrant, and Wise. 19. HUD publishes quarterly housing market studies that do not rely on either the 12 county or the eight county region for HUD’s rental housing market analysis. HUD’s quarterly housing market reports analyze the Dallas area and the Fort Worth area as separate housing market areas. U.S. Deparment of Housing and Urban Development Office of Policy Development and Research, “U.S. Housing Market Conditions.” HUD’s 2007 report focusing on the housing market conditions in the Dallas area states that the Dallas Housing Market Area includes only Collin, Dallas, and Denton Counties. The report treats each individual county as a separate market. U.S. Department of Housing and Urban Development Office of Policy Development and Research, “Comprehensive Housing Market Analysis Dallas, Texas As of
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April 1, 2006.” 20. The use of the multicounty region to determine Section 8 FMRs for the Dallas area
violates HUD’s own guidance for determining market areas within metropolitan areas with a central city and a suburban area. Administrative Record pages 5090 - 5091.
The eight county HUD Dallas FMR Area is not a single rental housing market. 21. HUD applies the FMRs calculated using the 12 county region to the eight county HUD Dallas FMR Area. The eight county HUD Dallas FMR Area has 5,589 square miles of land with a population of 3,451,226. It is larger in land area than Rhode Island, Connecticut, or Delaware. It has more people than New Hampshire, Rhode Island, Connecticut, Delaware, or Vermont. The eight county area includes five counties that are not included in the HUD “Dallas Housing Market Area” - Delta, Ellis, Hunt, Kaufman, and Rockwall counties. The eight county area includes three counties that are treated as separate housing markets in HUD’s housing market analysis - Collin, Dallas, and Denton. U.S. Deparment of Housing and Urban Development Office of Policy Development and Research, “Comprehensive Housing Market Analysis Dallas, Texas As of April 1, 2006,” 2007. 22. HUD’s own criteria for inclusion or exclusion of an area from a broader geographical area for FMR determinations show that the eight counties in the HUD Dallas FMR Area (Collin, Dallas, Delta, Denton, Ellis, Hunt, Kaufman, Rockwall) are not a single rental housing market. HUD states that the criteria for inclusion of a county or other area within a given FMR Area is based on similarities of rent levels and median family income. A deviation of more than five percent (5%) for either of these characteristics is the HUD criterion for the exclusion of an area from a broader geographical region for FMR determinations. 23. Under HUD’s criteria, the median family incomes for seven of the eight counties
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deviate widely from the median family income for the HUD Dallas FMR Area. The median family income for the Dallas FMR Area is $56,325. The median family income for each of the eight counties except for Ellis deviates more than five percentage points from the FMR Area median family income. The Collin County $81,856 median family income deviates by + 45 percentage points. The Dallas County $49,062 median family income deviates by - 13 percentage points. The Delta County $37,925 median family income deviates by - 33 percentage points. The Denton County $69,292 median family income deviates by + 23 percentage points. The Hunt County $44,388 median family income deviates by - 21 percentage points. The Kaufman County $50,354 median family income deviates by - 11 percentage points. The Rockwall County $71,448 median family income deviates by + 27 percentage points. Only the Ellis County $55,358 median family income which deviates by - 2 percentage points falls within the 5 percentage point HUD criterion for inclusion in the HUD Dallas FMR Area.
24. The widely disparate two-bedroom recent mover rents for each of the eight counties also contradict HUD’s claim that the counties are a single rental housing market. The 2000 U.S. Census median rent for two-bedroom recent movers for each of the counties is: Collin County $880, Denton County $799, Rockwall County $763, Dallas County $738, Ellis County $616, Kaufman County $526, Hunt County $493, and Delta County $443. HUD’s 2000 U.S. Census Base Rent for the Dallas ,FMR Area is $731. Only the $763 Rockwall County median rent and the $738 Dallas County median rent fall within 5% of HUD’s $731 Base FMR rent for the Dallas FMR Area. The $880 Collin County median rent deviates by + 20%. The $799 Denton County median rent deviates by + 9%. The median rents in Ellis, Kaufman, Hunt, and Delta counties deviate between - 16% and - 39%.
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HUD’s FMR area determination policy and decisions are made because of race in violation of the laws and Constitution.
25. HUD’s use of the multi-county region to set Dallas area FMRs instead of using market areas to set the fair market rents for Section 8 is done with a racially discriminatory purpose. There are rental units in predominantly White areas that are standard quality, nonluxury housing suitable for occupancy by persons assisted under Section 8. HUD’s use of the multi-county region to set FMRs either makes many of these dwellings in the predominantly White areas unavailable to Black DHA Section 8 participants or makes those units available only at a higher cost to those participants.
26. HUD’s stated policy is that the FMR levels for the Dallas area should make either 40% or 50% of the rental dwelling units in the Dallas area housing markets available for Section 8 use. HUD has used the 50th percentile for some FMRs in the Dallas area and the 40th percentile for some FMRs in the Dallas area.
27. HUD’s FMR setting policy and decisions do not make 40 % or 50% of the rental dwelling units in the Dallas area housing markets available but instead make a disproportionate number of units available in predominantly minority areas. But the same HUD FMR setting policy and decisions make a disproportionate number of units in predominantly White areas unavailable. HUD’s policy and decisions make approximately 70% of the rental units in predominantly minority areas available for occupancy by persons assisted under Section 8. The same HUD policy and decisions make only 30% of the rental units in predominantly White areas available for occupancy by persons assisted under Section 8. The disparity is greater for specific market areas. In the City of Plano, which is 73% White, only 13% of the two bedroom units are available. In contrast, 56% of the two-bedroom units in the City of Dallas, which is 35% White,
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are available for Section 8 based on HUD’s FMR calculations using the 2000 U.S. Census data for the HUD base FMRs.
28. Twenty nine percent (29%) of the two-bedroom units in the 70% to 100% White population census tracts in the Dallas FMR Area have rents equal to or less than the HUD base FMR. Seventy percent (70%) of the two-bedroom units in 700% to 100% minority census tracts have such rents.
29. HUD had many opportunities to revise its FMR setting policy and decisions to eliminate the disparities between the number and percent of units available in White compared to the number and percent of units available in minority areas. HUD continuously chose not to make the revision but continued to set FMR levels that made a disproportionate number of units in White areas unavailable for use in the Section 8 program. HUD chose to continue to set FMR levels that made a disproportionate number of units in minority areas available for use in the Section 8 program.
30. HUD received a July 31, 2006 comment filed by the attorneys for the plaintiff class in Walker v HUD, Civil Action No. 85-1210-H (N.D. Tex.) on the use of the 12 county region as the basis for setting the FY 2006 Section 8 maximum rents in the Dallas area that pointed out the racially discriminatory effects of HUD’s policy. HUD’s Fort Worth Office of General Counsel responded to a request for information on the comment by stating they did not question the calculations upon which the allegations of racially discriminatory effects were based and that HUD would have to justify its willingness to modify its definitions of metro areas in other urban districts but not in Dallas. Administrative Record pages 5047 - 5048.
31. Despite the statements of the Office of General Counsel representatives giving credibility to the allegation of racial discrimination in the setting of the Dallas area Section 8
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FMRs, HUD’s administrative record for this cases shows that it took no action to investigate whether or not its methods caused either a disproportionate adverse effect on non-Whites or contributed to the perpetuation of racial segregation in the Dallas area by making dwelling units in predominantly White areas unavailable to Section 8 Housing Choice Voucher program participants.
32. In 1977, the U.S. Comptroller General notified HUD that HUD’s decision to use metropolitan areas and other multi-county regions to set FMR levels for the Section 8 program was questionable because it ignored important distinctions between metropolitan central cities and suburban areas as well as among suburban areas. The Comptroller General recommended the development of “separate FMR schedules for individual housing submarket areas instead of one FMR schedule for an entire SMSA or county group.” “Major Changes are Needed in the New Leased Housing Program,” U.S. Comptroller General Report to Congress, January 28, 1977, pp. 21, 29. Nevertheless, HUD has continued to use multi-county regions to set FMR levels.
33. In 1994, the U.S. Government Accounting Office found that the use of fair market rents based on smaller geographic areas rather than the multi-county region FMRs would better reflect the rent levels typically prevailing within those smaller areas. U.S. GAO, “Rental Housing Use of Smaller Market areas to Set Rent Subsidy Levels Has Drawbacks” June 1994, p.5. Nevertheless, HUD has continued to use multi-county regions to set FMR levels.
34. HUD’s calculation of FMRs using multi-county regions instead of housing markets perpetuates racial segregation of Black DHA Section 8 participants and perpetuates racial segregation in the Dallas area.
35. HUD has, in effect, tagged the Section 8 participants with the ghetto rents found in the minority areas in the cities of Dallas and Fort Worth. Those ghetto rents apply to Black
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Section 8 participants no matter where they look for housing. HUD uses units with low rents that are in high poverty, high minority concentrated areas to set FMRs for units in the entire eight county Dallas FMR Area. Almost half of the units HUD used to set the FMRs for the Dallas FMR area are in the predominantly minority cities of Dallas and Fort Worth. Fifty percent (50%) of the units within the FMR levels in the Dallas FMR area are in 60% to 100% minority Dallas County census tracts.
36. The HUD FMRs limit Black DHA Section 8 participants’ access to the higher rent, lower poverty, predominantly White areas in Dallas, Collin and Denton counties. These areas have newer housing and superior public and private services. These predominantly White areas include suburban cities such as Plano, McKinney, Frisco, Allen, Coppell, Denton, and Lewisville.
37. The racial disparity in units made available for Section 8 is shown by census tract data. Only 31% of the two-bedroom units in 90% to 100% White population tracts located in the Dallas FMR Area have rents equal to or less than the HUD base FMR for two bedroom units. Seventy five percent (75%) of the two-bedroom units in 0% to 9% White tracts have such rents. The base HUD FMR is the amount calculated by HUD using 2000 U.S. Census data. The base FMR is then updated for the current year FMR.
38. Forty four percent (44%) of the Dallas area two-bedroom units are in 60% to 100% White census tracts. But only 30% of the two-bedroom units available using HUD’s FMR levels are in those predominantly White census tracts.
39. Only 37% of the Dallas area two-bedroom units are in 100% to 60% minority census tracts. But 52% of all two-bedroom units with rents equal to or less than the HUD 2000 Census base FMR are in those 100% to 60% minority tracts.
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40. The units available for the Section 8 program in predominantly minority areas are located in areas with neighborhoods with public and private services and facilities that are not equal to the services and facilities provided to predominantly White neighborhoods. The unequal services and facilities subject the Section 8 families renting in these neighborhoods to a higher probability of exposure to criminal victimization, adverse environmental conditions, industrial nuisance conditions, and lower performing schools than exists in predominantly White areas.
41. HUD’s calculation of the FMR level for the Dallas FMR Area uses the existence of the racially separate rental housing markets to perpetuate racial segregation. In these segregated markets, standard quality, non-luxury housing in White areas costs more than standard quality, non-luxury rental housing in minority areas. HUD’s Dallas Area FMRs are below the median rent for standard quality, non-luxury rental housing in White areas and above the median rent for standard quality, non-luxury rental housing in minority areas.
42. The smaller number of units in White market areas resulting from HUD’s FMR policies and decisions steers Black DHA Section 8 participants away from units in White areas because of the likelihood that:
A. they will have to spend more time and more money attempting to obtain modest rental housing in predominantly White areas;
B. the housing in predominantly White areas will cost more requiring them to pay a premium to live in those areas, and
C. despite their search efforts, they will not find housing in the predominantly White areas within the limited time available for the housing search.
43. HUD’s Dallas FMRs make more units available in minority market areas. The larger number of units in minority areas encourages racial segregation by steering Black DHA Section 8
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participants to find rental housing in the minority market areas or to remain in minority market areas. Black DHA Section 8 participants are steered into minority market areas by the higher probability of finding a unit at an affordable rent.
44. HUD’s conduct restricts and attempts to restrict the choices of Black Section 8 program participants in connection with seeking, negotiating for, and renting dwellings so as to perpetuate, or tend to perpetuate, segregated housing patterns, and to discourage or obstruct choices in predominantly White communities, neighborhoods, and developments. HUD’s conduct is because of the race or color of the Black Section 8 program participants and because of the race or color of the persons residing in the racially and ethnically segregated communities, neighborhoods, and developments in the Dallas area.
45. HUD uses single county or smaller areas to determine FMRs in non-metropolitan areas and in metropolitan areas with only one county in other parts of the country. These single county areas are disproportionately White and contain a disproportionate percent of the nation’s White population compared to the metropolitan FMR areas that contain more than one county. The Section 8 participants in the single county FMR areas are disproportionately White compared to the total Section 8 population.
46. HUD sets two or more FMRs based on parts of 19 counties. All of these counties are more than 73% White. Eight are 80% to 89% White and nine are more than 90% White. The combined population of these 19 counties is 85% White, 4% Black, and 6% Hispanic. The Section 8 participants in these counties are disproportionately White compared to the total Section 8 population.
47. HUD uses multi-county regions to determine FMRs only in metropolitan areas that
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contain more than one county. These multi-county regions are disproportionately occupied by Black residents, 15% compared to 12% of the Nation. A disproportionate percentage of the Black population resides in these multi-county FMR areas - 72% of the Black population compared to approximately 58% of the Nation’s population. The Section 8 participants in these multi-county FMR areas are disproportionately Black compared to the total Section 8 population.
The discriminatory effects of HUD’s FMR setting policy can be avoided by using a less discriminatory alternative that would accomplish the legitimate interests of a fair market rent setting policy.
48. HUD’s FMR policy has a disproportionate and discriminatory effect on the predominantly Black DHA Section 8 participant population. The discriminatory effects are those set out above. These effects and the use of the multi-county regions to set FMRs are not necessary elements of a legitimate fair market rent setting policy.
49. HUD’s actions in other parts of the United States demonstrate the existence of a less discriminatory alternative to HUD’s use of the multi-county FMR regions. For one example, HUD has created three separate Fair Market Rent areas in Fairfield County, Connecticut. Each of the HUD Fairfield County FMR areas consists of a larger city surrounded by a core of smaller towns. The FY 2007 two bedroom FMRs for the three separate FMR areas in Fairfield County are $1,024 in the Bridgeport, Connecticut HUD FMR Area, $1,267 in the Danbury, Connecticut HUD FMR Area, and $1,592 in the Stamford-Norwalk HUD FMR Area. Rather than being restricted by a single FMR set using a multicounty region, the Section 8 households in Fairfield County, Connecticut have access to units in the three separate FMR areas for each of the larger cities in the county.
50. A similar use of market areas would provide desegregated and non-discriminatory
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access to locations in all three of the larger, urban counties in the Dallas area, Dallas, Denton, and Collin counties. For example, HUD’s own rental data shows that the approximate 50th percentile 2000 Census Base Rent FMR for the smaller White areas is 10% to 30% higher than HUD Dallas area 2000 Census Base Rent FMR of $731. The 2000 Census Base Rent FMR for Plano is $924, for Richardson is $839, and for Coppell is $952. Similarly, the 2000 Census Base Rent FMR for Collin County is $879 and $800 for Denton County.
51. The use of market areas would not increase HUD’s administrative costs for setting the FMRs. The data is already available and the calculations are simply done on a spreadsheet.
52. The use of market areas would not increase the total amount of federal funds used for the Section 8 program in the Dallas area. That funding is determined without regard to current FMR levels.
53. The use of market areas does not decrease the total number of Section 8 units available in the Dallas area. The higher subsidies that could be paid in the higher FMR White areas will be offset by the lower subsidies in the lower FMR minority areas.
54. There is no legitimate, bona fide, good faith governmental justification for the use of the multi-county region to set fair market rents for the Section 8 program in the Dallas area.
The discriminatory effects of the FMR decreases resulting from HUD’s FMR setting policy can be avoided by using a less discriminatory alternative that would accomplish the legitimate interests of a fair market rent setting policy.
55. HUD uses multi-county regions instead of rental housing markets to set the FMR levels for the Dallas area. The discriminatory effects of the FMR policy are set out above. These effects and the use of the multi-county regions to set FMRs are not necessary elements of a legitimate fair market rent setting policy.
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56. The less discriminatory alternative using rental housing markets to determine fair market rents for the use of Section 8 vouchers in the Dallas area achieves the legitimate objectives of a Fair Market Rent policy without increasing HUD’s administrative costs for setting the FMRs. The data is already available and the calculations are simply done on a spreadsheet.
57. The use of market areas would not increase the total amount of federal funds used for the Section 8 program in the Dallas area. That funding is determined without regard to FMR levels.
58. The use of market areas would not decrease the total number of Section 8 units available in the Dallas area. The higher subsidies that could be paid in the higher FMR, White, areas will be offset by the lower subsidies in the lower FMR, minority, areas leaving approximately the same total number of Section 8 vouchers in use.
59. There is no legitimate, bona fide, good faith governmental justification for the FMR decreases or the use of the multi-county region to set fair market rents for the Section 8 program in the Dallas area.
The HUD FMR decision making record contains no facts to show that HUD considered the effects of its decisions in light of its obligations to affirmatively further fair housing and to avoid racial discrimination.
60. HUD’s public administrative record for its choice of the geographic areas to be used in its FMR decisions is available through the HUD Policy Development and Research internet site. That record shows that HUD did nothing to consider the effects of its choice of the geographic areas to be used in its FMR policy and decisions on the racial composition of the areas covered by the FMRs or on the housing choices of minority Section 8 Housing Choice Voucher participants. That record shows that HUD did nothing to consider the effects of its
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Case 3:07-cv-00945-O-BD Document 42 Filed 10/26/2009 Page 18 of 22
choice of the geographic areas to be used in its FMR decisions on the availability of dwellings in predominantly White areas for the Black DHA Section 8 voucher program participants. The FMR administrative record shows that HUD did not consider the effect of its choice of the geographic areas to be used in its FMR policies and decisions on fair housing opportunities in the Dallas area nor did HUD use its FMR policies and decisions to further fair housing opportunities for DHA’s Black Section 8 voucher program participants in the Dallas area.
61. HUD has also produced another administrative record that consists of 5,108 pages that was served on August 19, 2009. This record shows that HUD did nothing to consider the effects of its choice of the geographic areas to be used in its FMR policy and decisions on the racial composition of the areas covered by the FMRs or on the housing choices of minority Section 8 Housing Choice Voucher participants. This record shows that HUD did nothing to consider the effects of its choice of the geographic areas to be used in its FMR decisions on the availability of dwellings in predominantly White areas for the Black DHA Section 8 voucher program participants. This FMR administrative record shows that HUD did not consider the effect of its choice of the geographic areas to be used in its FMR policies and decisions on fair housing opportunities in the Dallas area nor did HUD use its FMR policies and decisions to further fair housing opportunities for DHA’s Black Section 8 voucher program participants in the Dallas area.
ICP standing. 62. The Inclusive Communities Project, Inc. is a Texas non-profit corporation which works for the creation and maintenance of thriving racially and economically inclusive communities, expansion of fair and affordable housing opportunities for low income families,
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Case 3:07-cv-00945-O-BD Document 42 Filed 10/26/2009 Page 19 of 22
and redress for policies and practices that perpetuate the harmful effects of discrimination and segregation.
63. ICP seeks to create and obtain affordable housing opportunities in non-minority concentrated areas for persons eligible for low rent public housing and to provide the counseling and other forms of assistance to Black families seeking to use their DHA Section 8 voucher to move into low-poverty, non-minority concentrated areas throughout the Dallas metropolitan area. ICP provides mobility counseling and mobility assistance to Black Section 8 families seeking housing opportunities in non-minority concentrated and non-poverty concentrated parts of the Dallas Metropolitan area, the eligible areas.
64. The counseling assistance provided by ICP to Black DHA Section 8 participants includes pre-move family counseling and related financial assistance to assist the families who want to make and sustain a desegregative housing move. The mobility assistance includes negotiating with landlords as necessary to obtain units in the eligible areas at rents that are affordable by the Section 8 families and eligible for the Section 8 subsidy. The financial assistance provided to these families includes the payment of application fees, security deposits and utility deposits to assist families moving into housing that provides desegregative housing opportunities in non-minority, non-poverty concentrated areas, where such assistance is necessary to make the desegregative move possible. ICP also makes landlord incentive bonus payments to landlords in areas that provide desegregative housing opportunities in non-minority, non-poverty concentrated areas who agree to participate in DHA’s Section 8 program when such incentives are necessary to secure housing for the Section 8 families. Section 8 families may also receive ICP assistance in the form of a contribution to their reasonable moving expenses in order
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to make a move in an eligible area. 65. ICP’s clients are Black or African American families participating in the DHA’s
Section 8 Housing Choice Voucher Program. Direct effects of the HUD FMR policy on ICP 66. By making standard quality, non-luxury rental housing unavailable in non-minority
market areas, HUD’s FMR policy directly and adversely affects ICP by: A. reducing the number of units that ICP can use to help its clients find housing in non-
minority concentrated market areas, B. increasing the amount of time per client that ICP must spend in order to help its clients
find and retain modest rental housing in non-minority concentrated areas, C. increasing the amount of financial assistance that ICP must spend in order to help its
clients find and retain modest rental housing in non-minority concentrated market areas, 67. ICP bases its standing on its own injuries incurred as a result of HUD’s decisions
selecting the areas to use in HUD’s rent setting policy. Claims for Relief 68. HUD’s actions choosing the geographic area to use in setting the Fair Market Rent
amounts for the Section 8 Housing Choice Program in the Dallas, TX area are agency actions. These agency action are not in accordance with the following laws: the equal protection principle incorporated in the Fifth Amendment to the U.S. Constitution; 42 U.S.C. § 3604(a); and 42 U.S.C. § 3608(e)(5). HUD’s agency actions choosing the geographic area to use in setting the Fair Market Rent amounts are not in accordance with these laws because the actions make dwelling units unavailable in predominantly White areas because of race and color and
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perpetuate racial segregation in the Dallas area. 69. 42 U.S.C. § 3608(e)(5) requires HUD to administer the FMR setting activity in a
manner affirmatively to further the fair housing policies of the Fair Housing Act, 42 U.S.C. § 3601, et seq. HUD’s failure to consider the effects of its decisions on the racial composition of the areas affected and on the integrated housing choices available to Black DHA Section 8 program participants violates 42 U.S.C. § 3608(e)(5).
70. Plaintiff has a claim for relief for HUD’s actions that were not and are not in accordance with the specified laws pursuant to 5 U.S.C. § § 702, 706. Sovereign immunity for the injunctive relief requested in this complaint as the remedy for ICP’s claims is waived by 5 U.S.C. § 702 .
Prayer for relief 71. Plaintiff requests the following relief: A. an injunction prohibiting HUD from using multi-county regions as the basis for setting FMR levels for the separate rental housing markets in the Dallas metropolitan area; B. an injunction compelling HUD to consider and further fair housing opportunities for DHA’s Black Section 8 voucher program participants when it chooses the geographic areas to use in setting FMRs in the Dallas area; C. an award of attorney fees, litigation expenses, and court costs, and D. any other appropriate injunctive relief.
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Respectfully Submitted, s/ Michael M. Daniel Michael M. Daniel State Bar No. 05360500 DANIEL & BESHARA, P.C. 3301 Elm Street Dallas, Texas 75226-1637 214-939-9230 Fax 214-741-3596 E-mail: daniel.michael@att.net Attorney for Plaintiff Laura B. Beshara State Bar No. 02261750 DANIEL & BESHARA, P.C. 3301 Elm Street Dallas, Texas 75226-1637 214-939-9230 Fax 214-741-3596 E-mail: laurabeshara@swbell.net Attorney for Plaintiff Certificate of Service I hereby certify that on October 15, 2009 I electronically submitted the foregoing document with the clerk of the court for the U.S. District Court, Northern District of Texas, using the electronic case files system of the court. The electronic case files system sent a “Notice of Electronic Filing” to the following individual who has consented in writing to accept this Notice as service of this document by electronic means: James D. Todd Jr. s/ Michael M. Daniel
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 Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 1 of 16

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

THE INCLUSIVE COMMUNITIES

§

PROJECT, INC.

§

§

Plaintiff,

§

§

VS.

§

NO.3-07-CV-094S-0

§

U.S. DEPARTMENT OF HOUSING

§

AND URBAN DEVELOPMENT

§

§

Defendant.

§

FINDINGS AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
Defendant U.S. Department ofHousing and Urban Development ("HUD") has fi led a motion to dismiss this action for injunctive reliefbrought under the Administrative Procedures Act ("APA"), 5 U.S.C. § 70 I, el seq. Forthe reasons stated herein, the motion should be granted in part and denied in part.
I. Plaintiff The Inclusive Communities Project, Inc. ("ICP") is a non-profit organization that provides assistance to minority families participating in the Housing Choice Voucher Program under
Section 8 of the United States Housing Act of 1937 ("NHA"l, as amended, 42 U.S.c. § 1437, el seq.
(See Plf. CompI. at I, '112 & 9, 'II 32). The mission of the organization is to "break down barriers to
the creation of racially and economically inclusive communities," (ld. at I, 2). To further this goal, plaintiff provides mobility and financial assistance to low-income African-American families who want to obtain rental housing in predominantly Caucasian areas in and around Dallas. (Jd. at 9-10, '1133). The mobility assistance includes negotiating with landlords to obtain Section 8 housing

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 2 of 16
in eligible areas at affordable rents. (Id). The financial assistance provided by plaintitfto its clients
includes the payment of application fees, security deposits, and utility deposits. (Id).
Under the Section 8 voucher program, HUn contracts with local public housing agencies and
private landlords to pay the difference between a fair market rent for the area and the amount paid by the low-income tenant. l See generally, 42 U.s.C. § I437f(0). HUD is responsible for establishing fair market rents, or FMRs, for the rental housing market area. See id. § 1437f(c)(I).
The HUn regulations explain how these FMRs are calculated:
Fair Market Rents (FMRs) are estimates of rent plus the cost of utilities, except telephone. FMRs are housing market-wide estimates of rents that provide opportunities to rent standard quality housing throughout the geographic area in which rental housing units are in competition. The level at which FMRs are set is expressed as a percentile point within the rent distribution ofstandard quality rental housing units in the FMR area. FMRs are set at the 40th or 50th percentile rent--the dollar amount below which the rent for 40 or 50 percent of standard quality rental housing units falls. The 40th or 50th percentile rent is drawn from the distribution of rents of all units that are occupied by recent movers. Adjustments are made to exclude public housing units, newly built units and substandard units.
24 C.F.R. § 888.113(a). The regulations emphasize that HUn "uses the most accurate and current
data available to develop the FMR estimates," including census data and random digit dialing
telephone surveys. See id. § 888. II3 (e)(I). Using this method, HUD annually estimates FMRs for
approximately 350 metropolitan areas and 2,300 non-metropolitan counties throughout the United States. See generally. Franconia Assoc. v. United Slales, 61 Fed. CI. 718, 760 (2004). The issue in this case involves the geographic area used by HUD to detennine FMRs in the Dallas rental
housing market.
I A tenant family may be required to pay up to 40% of its monthly adjusted income for rent. See 42 U.S.C. § 1437~oX2XAX;) & (oX3).

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 3 of 16
The Dallas, TX HUD Metro FMR area is comprised of eight counties, which are carved out of a larger Dallas-Fort Worth-Arlington metropolitan statistical area defined by the Office of Management and Budget ("OMB"). (See Plf. Compl. at 3-4, ~~ 9 & 13). According to plaintiff, this practice of using a large multi-county region as the starting point for detennining FMR violates both the NHA, which requires HUD to base FMRs on "market area," and the Fair Housing Act of 1968 ("FHA"), 42 U.S.C. § 3601, et seq., which imposes an affinnative duty on HUD to promote fair housi ng policies. (See id. at II, ~ 37). Succinctly stated, plaintitfcontends that HUD's practice incorporates rents from predominately minority housing markets, where many ofthe neighborhoods are blighted and have inadequate public and private services and facilities, and results in lower FMRs for the Dallas rental housing market area, thereby precluding Section 8 program participants from obtaining rental housing in more amuent Caucasian areas. (See id. at 3, , 10). Instead, plaintiff argues that HUD should use smaller geographic areas to determine FMRs, which would more accurately reflect the rent levels in Caucasian neighborhoods and give low-income minority families equal access to rental housing in those neighborhoods. (See id. at 6-7, 19). In this lawsuit, plaintiff seeks broad equitable relief, including an injunction : (1) compelling HUD to use smaller rental housing market areas, instead of large multi-county regions, as a basis for delennining FMRs; (2) requiring HUD to establish separate Section 8 program rent level s for separate rental housing markets; and (3) compelling HUD to "consider and further fair housing opportunities" for minority participants in the Section 8 program when it sets rent levels. (See id. at 11-12, 39).
The case is before the court on defendant's motion to dismiss for lack of subject matter jurisdiction. As grounds for its motion, defendant contends that plaintiff lacks standing to bring thi s suit and that HUD has not waived sovereign immunity. The issues have been fully briefed by the panies and the motion is ripe for detennination.

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 4 of 16
II.
The gravamen of defendant's standing argument is that the remedies sought by plaintifTwill not redress its injuries and amount to nothing more than generalized grievances.2 Because standing is a prerequisite to the exercise of federal jurisdiction, the court considers this issue first. See Cole v. General Motors Corp., 484 F.3d 717, 721 (5th Cir. 2007).
A. "The doctrine of standing addresses the question of who may properly bring suit in federal
court." The inclusive Communities Project, Inc. v. Texas Dept. 0/Housing & Comm. Affairs, No.
3-08-CV-0549-D, 2008 WL 5191935 at +2 (N.D. Tex. Dec. 11 ,2008). To satisfy the case-orcontroversy requirement of Article HI of the Constitution, the plaintiff must establish that it has "suffered 'injury in fact,' that the injury is 'fairly traceable' to the actions of the defendant, and that the injury will likely he redressed by a favorable decision." Id., 2008 WL 5191935 at +2, quoting Bennett v. Spear, 520 U.S. 154, 162, 117 S.Ct. 1154, 1161 , 137 L.Ed.2d 281 (1997). An injury in fact must be "concrete and ... actual or imminent, not conjectural or hypothetical." Id , quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61,112 S.Ct. 2130,2136,119 L.Ed.2d 351 (1992). Moreover, "the injury must affect the plaintiff in a personal and individual way," Id. quoting Lujan, 112 S.Ct. at 2136 n.1. Stated differently. a party must assert its own legal rights and interests, and cannot rest its claim to relief on the legal rights or interests of third parties. See Warth v. Seldin, 422 U.S. 490, 500, 95 S.Ct. 2197,2206,45 L.Ed.2d 343 (1975). For injunctions, the plaintiff must also show that it is likely to suffer future injury as a result of the challenged conduct,
1 Defendant also argues that plaintiff lacks standing to sue on behalf of its clients. that plaintiff cannot obtain injunctive relief for past injuries, and that any claims based on FMRs, other than the FMRs currently in effect, are moot. (See Der. Mot. Br. at 10-12, 15). In its response, plaintiff makes clear that it seeks re lief only for its own injuries and only with respect to HUD's current practice of determining FMRs. (See Plf. Resp. 8r. at 20-21). The court therefore declines to address these other grounds for dismissal. However, in order to clarity its claims and the nature of relief sough t, plaintiff should amend its complaint before this case proceeds further.

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 5 of 16
and that the reliefrequested will prevent that future injury. See James v. City ofDallas, 254 F.3d 551,563 (5th CiT. 2001), cerl. denied, 122 S.Ct. 919 (2002), citing CityoJLos Angelesv. Lyons, 461 U.S. 95, 102, 103 S.Ct. 1660, 1665,75 L.Ed.2d 675 (1983). However, "if the injury is accompanied by any continuing, present adverse effects, standing for injunctive relief can be found." Id, quoting Lyons, 103 S.Ct. at 1665 (internal quotations omitted).
As the party seeking to invoke federal jurisdiction, plaintiff bears the burden of proving its standing. See Inclusive Communities Project, 2008 WL 5191935 at "'2, citing Lujan, 112 S.Ct. at 2136. A defendant may challenge standing by filing a Rule 12(b)(I) motion to dismiss. If the defendant merely brings a Rule 12(b)(I) motion, it is considered a facial attack, and the court looks only to the sufficiency of the allegations in the pleading, assuming them to be true. See Paterson v. Weinberger, 644 F.2d 521, 523 (5th CiT. 1981). The court must deny the motion if the allegations are sufficient to allege jurisdiction. See Inclusive Communities Project, 2008 WL 5191935 at .3. A defendant may also make a factual attack on subject matter jurisdiction by submitting evidence, such as affidavits and testimony. See Middle South Energy, Inc. v. City o/New Orleans, 800 F.2d 488, 490 (5th Cir. 1986), When a defendant provides evidence factually attacking subject matter jurisdiction, the plaintiff must submit evidence and prove by a preponderance of the evidence that the court has jurisdiction. Id In the instant case, HUD has submitted an affidavit in support of its Rule 12(b)(I) motion. However, nothing in the affidavit challenges any factual matters necessary to the detennination ofstanding. The court therefore treats the motion as a facial attack, rather than a factual attack, on jurisdiction. See Estate o/Merkel v. United Siales, No. 3-06-CV-1891-D, 2008 WL 5378183 at '2 n.2 (N.D. Tex. Dec. 23,2008) (treating Rule 12(b)(1) motion as facial attack where affidavits submitted by defendant did not challenge any factual matter bearing on jurisdiction);

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 6 of 16

IBEW-NECA Southwestern Health & Benefit Fund v. WinsleI, No. 3-06-CV-0038-D, 2006 WL

954010 at '1 (N.D. Tex. Apr. 12,2006) (same).

B.

Defendant contends that plaintifflacks standing to challenge HUD's practice ofdetermining

FMRs for the Dallas rental housing market because the injunctive relief it seeks wi ll not redress its

injuries. Under the third requirement of Article 1II standing, plaintiff must show that it is '''likely,'

as opposed to merely 'speculative; that the injury will be redressed by a favorable decision." Lujan,

112 S.Ct. at 2136. Although defendant does not directly challenge plaintiffs alleged injuries at the

pleading stage, (see Def. Reply at 2), it is necessary to briefly discuss the nature of those injuries

before examining redressability.

I.

A non-profit fair housing organization, such as plaintiff, can establish injury by showing that

the challenged unlawful conduct frustrates its mission and requires it to devote significant resources

to counteracting the discriminatory effects of that conduct. See Havens Realty Corp. v. Coleman ,

455 U.S. 363, 379,102 S.Ct. 1114, 1124-25,7 1 L.Ed.2d 214 (1989). Here, plaintiff alleges that

HUO's practice of using a large multi-county region as the starting point for determining FMRs

results in racial segregation in the Dallas rental housing market, thereby frustrating plaintiffs mission

of promoting equal housing opportunities and requiring the expenditure of more time and more

money to achieve its goals. (See Plf. Compl. at 7, ~ 26 & 10, 'i\35). In particular, plaintiff alleges

that HUD's rent setting policy directly and adversely affects its interests by:

•

reducing the number of units that plaintiff can use to help its

clients find housing in non-minority concentrated market

areas;

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 7 of 16

•

increasing the amount of time per client that plaintiff must

spend in order to help its clients find housing in non-minority

concentrated market areas;

•

increasing the amount of financial assistance that plaintiff

must spend in order to help its clients find housing in 000-

minority concentrated market areas; and

•

discouraging fami lies who work with plaintifffrom choosing

dwelling units in market areas that offer racially integrated

housing because of the cost fac tors involved in such a choice.

(See Plf. CampI. at 10, ~ 35). Similar allegations of hann suffered by non-profit housing

organizations have been held sufficient to establish injury for standing purposes. See, e.g. Havens

Realty, 102 S.Ct. at 1123-25; Inclusive Communities Project, 2008 WL 5191935 at '4.

2.

The issue raised by defendant is whether the remedy requested by plaintifTis likely to redress

its injuries. The court has little difficulty concluding that an injunction requiring HUn to use smaller

rental housing market areas, instead of a large multi.county region, as a basis for determining FMRs

would result in higher rental rates in predominantly Caucasian areas of Dallas, thereby expanding

opportunities for low·income African American fam ilies to obtain Section 8 housing in those areas.

Wi th more rental housing opportunities available in non·minority areas, plaintiff likely will have to

spend less time and less money helping clients secure housing in desegregated neighborhoods. At

least at the pleading stage. plaintiff has sufficiently demonstrated that it is likely, as opposed to

merely speculative, that its injuries will be redressed by a favorable decision in this case. See Inclusive Communities Project, 2008 WL 5191 935 at .6.3

) This conclusion is bolstered ifthe court treats defendant's Rule 12(bX I) motion as a factual anack, rather than a facia l attack, on jurisd iction. In an anempt to counter defendant's argument that the relief requested in this lawsuit would not necessarily expand housing opportunities in predom inantly Caucasian areas, plaintiff relies on the affidavit of its Mobility Assistance Director, Stephanie McGee, who states:

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 8 of 16
C.
Defendant further contends that plaintiffs request for a broad injunction eliminating racial
disparities in the Dallas rental housing market area is nothing more than a "generalized grievance."
At issue is plaintiffs request for:
an injunction compelling HUD to set separate Section 8 program rent levels for the separate rental housing markets at dollar amounts that provide DHA's Black Section 8 voucher program participants equal access to rental housing in the White rental housing markets. Equal access is achieved by setting rent levels using the 50th percentile basis for each of the rental housing markets and eliminating the disparities between the nwnber and percent of dwelling units made available in predominately White rental housing markets and the number and percent of dwelling units made available in predominantly minority rental housing markets.
(See Def. Mot. Br. at 10 & Def. Reply at 2, citing Plf. Compl. at 12, ~ 39D). Relying on the Fifth
Circuit's decision in James v. City ofDallas, 254 F.3d 551 (5th Cir. 200 I), defendant argues that the
injunction sought by plaintiff is too general to support Article III standing.
During the period from May 2007 through September 2007 ICP negotiated with 44 landlords in predominantly white areas on behalf of African American Section 8 voucher participants concerning the issues raised by the rent being higher than the Section 8 rent as set by HUD Fair Market Rent level. In 20 instances, the landlord refused to lower the rem even though the tenant was e lig ible !O rent the unit. In these cases, but for the fact that rents set by the HUD Fair Market Rent levels were lower than the rent charged by the landlord, the Seclion 8 participant would have rented that specific unit in a predominately while area.
During that same period ICP was able to negotiate with 24 landlords who agreed to lower the contract rent for the dwelling unit in order for an African American Section 8 participant to rent the unit. In these cases, ICP was only able to obtain the rent reduction by paying the landlord a bonus. The bonus was high enough in these instances for the landlord to forego its usual rent and lower the rent charged to the Section 8 participam. ICP has spent 523 ,686.50 for these bonus payments during this period.
(See Plf. Resp. App. at 3). This evidence, ifconsidered by the court, supports the conclusion that the injury alleged by plaintiIT-·the increased time and costs associated with helping minority families obtain rental housing in non-minority areas--likely would be redressed by an injunction requiring HUO to use smaller rental housing market areas as the basis for detennining FMRs.

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 9 of 16
James was a class action brought by two African-American homeowners against the City of Dallas and HUD challenging the demolition of repairable si ngle-family homes in predominately minority neighborhoods without proper notice or a warrant, and charging that the "no-notice" demolition program was the result of intentional race discrimination. James, 254 FJd at 558. In their compl aint, the plaintiffs sought, inter alia, "a pennanent injunction requiring HUD to administer all of its housing programs in a manner that wi ll eradicate the effects of HUD's discriminatory demolition practices[.]" Jd. at 561. The Fifth Circuit held that this broad request for injunctive relief was not sufficiently targeted to remedy plaintiffs' specific injuries. ld. at 568. Therefore, the plaintiffs lacked standing to seek such relief. ld., citing Warth, 95 S.Ct. at 2205 (recognizing that a "generalized grievance" shared in substantially equal measure by all or most citizens cannot provide standing to request injunctive relief).
Unlike the injunction requested in James, the relief sought by plaintiff in the instant case is not a "sweeping request to generally eradicate the effects ofdiscrimination." Cf id. Instead, plaintiff asks the court to require HUD to "set separate Section 8 program rent levels for the separate rental housing markets at dollar amounts that provide DHA's Black Section 8 voucher program participants equal access to rental housing in the White rental housing markets. " (See Plf. Compl. at 12, ~ 390). Plaintiff goes on to suggest that "(e]qual access is achieved by setting rent levels using the 50th percentile basis for each of the rental housing markets and eliminating the disparities between the number and percent of dwelling units made available in predominately White rental housing markets and the number and percent of dwelling units made avai lable in predominantly minori ty rental housing markets." (Id.). Read in its entirety, it is clear that plaintiffdoes not seek a broad injunction to "eliminat[e] racial di sparities in housing opportunities," 8S defendant argues in its motion. (See Def. Mot. Br. at 10). By enj oining HUD from using a large multi-county region as a basis for

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 10 of 16
determining FMRs and requiring the agency to set separate fent level s for separate rental housing markets defined by smaller geographic areas, plaintiffis attempting to further its mission of helping low-income minority families gain access to the rental housing market in predominantly Caucasian areas of DaJlas, Such relief is targeted to remedy plaintiffs specific injury of having to spend more time and more money to accomplish its goals, and does not seek to redress a "generalized grievance." Thus, plaintifThas demonstrated Article III standing to prosecute this claim for injunctive relief.
Ill. The court next considers whether plaintiff's claims under the APA, through which it seeks redress for alleged violations of the N HA and the FHA, are barred by the doctrine of sovereign immunity. While recognizing that the APA allows a person to seek judicial review for an alleged legal wrong committed by a federal agency, see 5 U.S.C. § 702, defendant argues that this statutory waiver of sovereign immunity does not apply to plaintiff's claims because: ( I) HUD's rent-setting practices are committed to agency discretion by law; and (2) plaintiff has other adequate remedies.
A. "The basic rule of federal sovereign immunity is that the United States cannot be sued at all
without the consent ofCongress. " St. Tammany Parish v. Federal Emergency Management Agency, 556 F.3d 307, 316 (5th Cir. 2009), quoting Block v. North Dakota ex rei. Board a! University & SchoolLands, 461 U.S. 273, 287, 103 S.Ct. 1811 , 1819,75 L.Ed.2d 840 ( 1983). Section 702 of the
APA authorizes suits against th e United States through a limi ted waiver of sovereign immunity for relief other than monetary damages related to an agency's regulatory action. Id. at 3 17, citing 5 U.S.C . § 702. However. the waiver does not apply to agency actions that are committed to agency discret ion by law. /d, ciling 5 U.S.C. § 70 I(a)(2). This exception to judicial review is "very narrow" and applies only "in those rare instances where 'statutes are drawn in such broad tenns that

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 11 of 16
in a given case there is no law to apply.'" Ellison v. Connor IS3 F.3d 247, 2S1 (Sth Cir. 1998), quoting Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410, 91 S.Ct. 814, 821, 28 L.Ed.2d 136 (1971); see also Sun/ex Dairy v. Block, 666 F.2d IS8, 163 (Sth Cir.), cert. denied, 103
S.Ct. 59 (1982). Stated differently, judicial review is unavailable only "ifthe statute is drawn so that a court would have no meaningful standard against which to judge the agency's exercise of
discretion." Heckler v. Chaney. 470 U.S. 821 , 830, lOS S.Ct. 1649, 16SS , 84 L.Ed.2d 714 (198S). I.
Defendant contends that its rent-setting practices are committed to agency discretion and,
therefore not subject to judicial review, because the NHA does not provide meaningful standards against which the court can review HUD's detennination of what constitutes a "market area." (See Def. Br. at 19). Plaintiffcounters that the "law to apply" can be found in the text of the statute itself, HUD's own regulations, the legislative history, and other agency materials. (See Plf. Resp. Sr. at 13-
IS). Initially, the court observes that the NHA does not define the tenn "market area." Section
1437f(0)( I)(8), which establishes a payment standard for the tenant-based housing choice voucher program, merely provides:
[T]he payment standard for each size of dwelling unit in a market area shall not exceed 110 percent of the fair market rental established under subsection (c) of this section for the same size ofdwelling unit in the same market area and shall be not less than 90 percent of that fair market rental. 42 U.S.C. § 1437f(o)(I )(B) (emphasis added). Section 1437f(c)(I), which deals generally with the amount and scope of assistance payments, provides: The maximum monthly rent shall not exceed by more than to per centum the fair market rental established by the Secretary periodically but not less than annually for existing or newly constructed rental

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 12 of 16
dwelling units of various sizes and types in the market area suitable for occupancy by persons assisted under this section[.]
Id. § I437f(c)( I) (emphasis added). Although these statutory provisions use the tenn "market area,"
neither sets forth any guidelines for determining how a "market area" should be established.
An agency's own regulations can also provide the requisite "law to apply." See Ellison, 153
F.3d at 251. The HUD regulation cited by plaintiff explains that "FMRs are housing market-wide
estimates of rents that provide opportunities to rent standard quality housing throughout the
geographic area in which rental housing units are in competition." See 24 C.F.R. § 888.113(a)
(emphasis added). However, this regulation does not provide any guidance for determining what
constitutes a "geographic area." Certainly it does not support plaintiff's argument that large multi-
county regions should not be the starting point for determining FMRs. If anything, a fair reading of
the entire regulation suggests just the opposite. Section 888.113(d) states:
FMR areas are metropolitan areas and nonmetropolitan counties (nonmelropolitan parts of counties in the New England States). With several exceptions, the most current Office of Management and Budget (OMB) metropolitan area definitions of Metropolitan Statistical Areas (MSAs) and Primary Metropolitan Statistical Areas (PMSAs) are used because oftheir generally close correspondence with housing market area definitions. HUn may make exceptions to OMB definitions if the MSAs or PMSAs encompass areas that are larger than housing market areas. The counties deleted from the HUD-defined FMR areas in those cases are established as separate metropolitan county FMR areas.
Id. § 888. J l3(d) (emphasis added). Still, nothing in the HUD regulation sets forth any identifiable
factors by which a court could review the agency's determination of what constitutes a specific
housing market area.
Nor is any of the legislative history cited by plaintiff useful in establishing meaningful
standards for judicial review of the agency's action. Senate Report No. 93-693. which anticipated

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 13 of 16
that HUD would "define the 'areas' for which fair market rents are to he determined in such a way
as not to include in a single area communities which are characterized by significant differences in rentals or construction costs for comparable housing," see Sen. Rep. No. 93 -693,1974 U.S.C.C.A.N.
4273,4315 (1974), is not part of the legi slative history of the bill that was ultimately passed by Congress. Instead, Congress passed the House version ofthe bill, which required HUD "to establish fair market rentals in each housing market area for new and existing units of various sizes and types suitable for occupancy for low-income families," but did not further define "market area." See H. Conf. Rep. No. 93-1279, 1974 V.S.C.C.A.N. 4449, 4465 (1974). Plaintiffalso relies on a report prepared for HUD by an outside consulting finn, which recognizes that :
An important issue [in determining the demand and supply of affordable rental housing] is what constitutes a rental housing market, that is, within what group of properties are price adjustments made.
Clearly, there is no single national rental housing market. Entire metropolitan areas (particularly the larger ones) also do not constitute single housing markets. (See Plf. Resp. App. at 26) (emphasis added). However, this report relates to the Rural Housing
Service ("RHS") Section 515 program, which provides direct loans for the construction and maintenance of multi -family rental projects that serve low-income families, not the Section 8
voucher program. (See id. at 25).
In sum, the court concludes that there are no meaningful standards against which to review HUD's detennination of what constitutes a "market area" under section 1437f of the NHA. Consequently, sovereign immunity bars any claims predicated on alleged violations of that statute.
2.
The court reaches a different conclusion with respect to alleged violations of section 3608(e)(5) of the FHA, which imposes an affinnative duty on HUD to "administer the [housing]

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 14 of 16
programs ... in a manner affi rmatively to further the policies of[the Act)." 42 U.S.C. §3608(e)(5). Numerous courts have exercised subject matter jurisdiction over claims brought against HUD under section 3608. See, e.g. N.A.A.C. P. v. Secretary o/Housing and Urban Development, 817 F.2d 149,
160-61 ( Ist Cir. 1987); Darst-Webbe Tenant Assoc. Boardv. St. Louis Housing Authority. 41 7 FJd 898,907 (8th Cir. 2005); see also Anderson v. Jackson , No. 06-3298, 2007 WL 458232 at *2 (E.D. La. Feb. 6, 2007) (citi ng cases). In its complaint, plaintiff alleges that HUD violated its duty to further the fair housing policies of the FHA by fai ling to consider the effects of its rent-setting practices on the racial composition ofthe areas affected and the integrated housing choices avai lable to minority Section 8 participants in and around Dallas. (See Plf. Compl. at t I, 37). This claim is similar to other claims brought against HUD that were held to be reviewable under the APA. See,
u.s. e.g. Thompson v. Dept. ojHousing and Urban Development, 348 F.Supp.2d 398, 464 (D. Md.
2005) (suit alleging that HUD failed to fulfill its statutory duty under the FHA to consider the regional effects of its desegregation policies in regard to city's public housing); M&T Mortgage Corp. v. White. No. 04-CV-4775-NGGVVP , 2006 WL 47467 at *10 (E.D.N.Y. Jan. 9, 2006) (suit alleging that HUD's actions in approving mortgage insurance applications without considering the racial impact of the program violated the FHA).4
B. Finally, defendant argues that plaintiff cannot seek judicial review under the APA because it has other adequate remedies at law. See 5 U.S.C. § 704 (authorizing judicial review of final
~ The court rejects defendant's argument that the Supreme Court's decision in Norton v. Southern Utah Wildern ess Alliance, 542 U.S. 55, 124 S.Ct. 2373, 159 L.Ed.2d 137 (2004) ("SUWA"), precludes judicial review of plaiOlitrs claims for alleged violations ofthe FHA. In SUWA, the Supreme Court held that "a claim under § 706(1) [of the APA) can proceed only where a plaintiff asserts that an agency failed to take a discrete agency action that it is required to talce." SUWA, 124 S.Ct. at 2379 (emphasis in original). However, that requirement does not apply in situations where, as here, a court is asked to review whether HUD has met its statutory duty to affinnatively further rair housing policies. See Darst~Webbe, 417 F.3d at 907; Thompson v. U.S. Dept. a/Housing and Urban Development, No. MJG·95·309, 2006 WL 581260 at · 4·5 (D. Md. Jan . 10,2006).

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 15 of 16
agency actions "for which there is no other adequate remedy in a court"). The two alternative remed ies suggested by defendant are: (1) a suit for money damages in the Court of Federal Claims under the Tucker Act, 28 U.S.C. § 1491 (a)(I); or (2) an action against the Dallas Housing Authority ("DHA"). (See Def. Mot. Br. at 20-22). However, plaintiff does not seek money damages in this case, It requests only injunctive relief, Defendant wholly fails to explain how a suit for money damages would be an adequate substitute for the relief sought by plaintitT--an injunction requiring HUD to consider the effects of its rent-setting practices on the racial composition ofthe Dallas rental housing market and to affirmatively further fair housing opportunities for African-American Section 8 participants in the Dallas area. Nor does defendant explain how a suit against DHA would change HUD' s rent-setti ng practices. Because no other adequate remedy is available, plaintiff may seek injunctive relief against HUD under the APA for alleged violations of the FHA.
RECOMMENDAnON Defendant's motion to dismiss for lack of subject matter jurisdiction [Doc. #8] should be granted in part and denied in part. The motion should be granted on the ground of sovereign immunity with respect to plaintiffs claims for alleged violations of the NHA. In all other respects, the motion should be denied. A copy of this report and recommendation shall be served on all parties in the manner provided by law. Any party may file written objections to the recommendation within 10 days after being served with a copy. See 28 U.S.C. § 636(b)(I); FED. R. Cty. P. 72(b). The failure to file written objections will bar the aggrieved party from appealing the factual findings and legal conclusions of the magistrate judge that are accepted or adopted by the district court, except upon grounds of plain error. See Douglass v. United Services Automobile Ass'n, 79 F.3d 1415, 1417 (5th Cir. 1996).

Case 3:07-cv-00945-O-BD Document 22 Filed 07/20/2009 Page 16 of 16
DATED: July 20, 2009.
LAN STATES MAG ISTRATE JUDGE

 
 Case 3:07-cv-00945-O Document 46 Filed 11/23/09 Page 1 of 10 PageID 404

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

THE INCLUSIVE COMMUNITIES PROJECT, INC.,

Plaintiff,

3:07-cv-945-O-BD

v.

UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT,

Defendant.

DEFENDANT’S ANSWER

Defendant United States Department of Housing and Urban Development (“Defendant” or

“HUD”), by and through the undersigned counsel, hereby Answers plaintiff’s First Amended

Complaint (“Complaint”) as follows:

FIRST AFFIRMATIVE DEFENSE

Plaintiff’s Complaint fails to state a claim upon which relief can be granted.

In addition, defendant hereby responds to each allegation in the numbered paragraphs in plaintiff’s Complaint as follows:1

1. First sentence: defendant admits that it administers the Housing Choice Voucher

Program (“Voucher Program”) pursuant to 42 U.S.C. § 1437f(o), and regulations codified at 24

C.F.R. Parts 888 and 982, which speak for themselves and to which the Court is respectfully

referred for a full and accurate statement of their contents. The remainder of Paragraph 1 of the

Complaint contains plaintiff’s characterization of this action and conclusions of law, to which no

response is required; to the extent a response is deemed required, defendant denies the allegations.

1 Plaintiff’s Complaint omits Paragraphs 5 and 15. Defendant’s Answer follows the numbering used in plaintiff’s Complaint.

Case 3:07-cv-00945-O Document 46 Filed 11/23/09 Page 2 of 10 PageID 405
2. Defendant is without knowledge or information sufficient to admit or deny the allegations contained in the first sentence of Paragraph 2 of the Complaint. Second, third, fourth, and fifth sentences: defendant denies the allegations.
3. Paragraph 3 contains conclusions of law, to which no response is required. 4. Defendant admits that the Inclusive Communities Project is the plaintiff in the present case. Defendant is without knowledge or information sufficient to admit or deny the remaining allegations contained in Paragraph 4 of the Complaint. 6. Defendant admits that it is an executive agency in the United States government. 7. Paragraph 7 contains plaintiff’s characterizations of federal law and regulations, to which no response is required. 8. The first and second sentences contain plaintiff’s characterizations of federal law and regulations, to which no response is required. Third sentence, including Subparagraphs A and B: defendant denies the allegations. 9. First, second, and third sentences: defendant denies the allegations. Fourth sentence: defendant admits. 10. First, second, and third sentences: defendant admits the allegations. Fourth sentence: defendant denies the allegations. 11. Defendant denies the allegations. 12. Defendant is currently without knowledge or information sufficient to admit or deny the information in the cited report, but further avers that, according to the website of the Dallas Housing Authority (“DHA”), DHA serves approximately 86 percent African Americans, 6 percent Hispanics, 7 percent Anglo Americans, and 1 percent Asian Americans. See Dallas Housing Authority, DHA Fact Sheet, http://www.dhadal.com/GI/facts.html. 13. First sentence: defendant admits. Second and third sentences: defendant denies
2

Case 3:07-cv-00945-O Document 46 Filed 11/23/09 Page 3 of 10 PageID 406
the allegations. Fourth sentence: defendant is currently without knowledge or information sufficient to admit or deny the information in the cited report, but denies that the cited data is relevant to defendant’s obligations in its administration of the Voucher Program under 42 U.S.C. § 1437f(o).
14. First, second, third, fourth, fifth and sixth sentences: defendant denies the allegations. Seventh and eighth sentences: defe ndant admits the allegations. Defendant avers that the method by which it sets the Fair Market Rents (“FMR”) for the Dallas HUD Metro FMR Area is set forth in its Final Fair Market Rents for Fiscal Year 2010 for the Housing Choice Voucher Program and Moderate Rehabilitation Single Room Occupancy Program, 74 Fed. Reg. 50,552, 50,552–664 (Sept. 30, 2009), which speaks for itselfand to which the Court is referred for a full and accurate statement of its contents.
16. Defendant denies the allegations. 17. Defendant admits the existence of OMB Bulletin No. 04-03, which speaks for itself and to which the Court is respectfully referred for a full and accurate statement of its contents. See Office of Mgmt. & Budget, Executive Office of the President, OMB Bull. No. 04-03, Update of Statistical Area Definitions and Guidance on Their Uses (2004). 18. First sentence: defendant denies the allegations. Defendant avers that plaintiff has not defined its use of the term “rental housing market.” Second and third sentences: defendant admits. Fourth sentence: defendant denies the allegations. Fifth and sixth sentences: defendant admits. Se venth sentence: defendant denies the allegations. 19. Paragraph 19 contains plaintiff’s characterization of the report “U.S. Housing Market Conditions,” which speaks for itself and to which the Court is respectfully referred for a full and accurate description of its contents. See U.S. Dep’t of Hous. & Urban Dev., Office of Policy Dev. & Research, “U.S. Housing Market Conditions” (2007). Defendant denies that the
3

Case 3:07-cv-00945-O Document 46 Filed 11/23/09 Page 4 of 10 PageID 407
Comprehensive Housing Analysis identifies the relevant market area that defendant must use to determine FMR under the U.S. Housing Act. See 42 U.S.C. § 1437f(o).
20. Defendant denies the allegations. 21. First sentence: defendant denies the allegations. Second, third, and fourth sentences: defendant admits. Fifth sentence: defendant denies the allegations. Sixth sentence: defendant denies that the Comprehensive Housing Analysis identifies the relevant market area that HUD must use to determine FMR under the U.S. Housing Act, 42 U.S.C. § 1437f(o). 22. First sentence: defendant denies the allegations. The second and third sentence contains plaintiff’s characterization of HUD’s criteria for identifying a “market area” under the U.S. Housing Act, 42 U.S.C. § 1437f(o), and HUD regulations, 24 C.F.R. Part 888, which speak for themselves and to which the Court is respectfully referred for a full and accurate statement of their contents; to the extent a response is deemed required, the defendant denies the allegations. 23. First and second sentences: defendant denies the allegations. Sentences three through ten: defendant denies the relevance of median income to the determination of the Dallas HUD Metro FMR Area but admits the accuracy of the median family incomes in each listed county according to the 2000 Decennial Census. 24. First sentence: defendant denies the allegations. Second sentence: defendant admits the allegations. Third through sixth sentences: defendant denies the allegations. 25. First sentence: defendant denies the allegations. Defendant avers that plaintiff has not defined its use of the term “market areas.” Second sentence: defendant admits. Third sentence: defendant denies the allegations. 26. First sentence: defendant denies the allegations. Defendant avers that plaintiff has not defined its use of the term “housing markets.” Sentence sentence: defendant admits. 27. Defendant denies the allegations. Defendant avers that plaintiff has not defined its
4

Case 3:07-cv-00945-O Document 46 Filed 11/23/09 Page 5 of 10 PageID 408
use of the terms “housing markets” or “market areas.” 28. Defendant denies the allegations. 29. Defendant denies the allegations. 30. Defendant admits the existence of a comment from Michael M. Daniel, dated July
31, 2006, regarding a proposed FMR. See Administrative Record at 5055–66. Defendant also admits the existence of correspondence between its officials concerning a comment on a proposed FMR. See Administrative Record at 5047–48. The remainder of Paragraph 30 contains plaintiff’s characterizations of this correspondence, not allegationsof facts, and thus no response is required; to the extent a response is deemed required, defendant denies the allegations and respectfully directs the Court’s attention to the correspondence for a full and accurate statement of their contents.
31. Defendant denies the allegations. 32. The first and second sentences contain plaintiff’s characterization of the cited report, “Major Changes are Needed in the New Leased Housing Program,” U.S. Comptroller General Report to Congress, January 28, 1977, to which the Court is respectfully directed for a full and accurate statement of its contents. Defendant denies that the 1977 report identified the relevant criteria that defendant must use to set the “market area” in determining FMR under the U.S. Housing Act. See 42 U.S.C. 1437f(o). Last sentence: defendant denies the allegations. 33. The first, second and third sentences contains plaintiff’s characterization of the cited report, U.S. Gen. Accounting Office, Rental Housing: Use of Smaller Market Areas to Set Rent Subsidy Levels Has Drawbacks (1994), to which the Court is respectfully directed for a full and accurate statement of its contents. Defendant denies that the report identified the relevant criteria that defendant must use to set the “market area” in determining Fair Market Rents under the U.S. Housing Act. See 42 U.S.C. 1437f(o). Last sentence: defendant denies the
5

Case 3:07-cv-00945-O Document 46 Filed 11/23/09 Page 6 of 10 PageID 409
allegations. 34. Defendant denies the allegations. Defendant avers that plaintiff has not defined its
use of the term “housing markets.” 35. Defendant denies the allegations. 36. Defendant denies the allegations, except to admit that Dallas, Collin, and Denton
counties include the suburban cities of Plan, McKinney, Frisco, Allen, Coppell, Denton, and Lewisville.
37. Defendant denies the allegations. 38. Defendant denies the allegations. 39. Defendant denies the allegations. 40. Defendant denies the allegations. 41. Defendant denies the allegations. Defendant avers that plaintiff has not defined its use of the term “rental housing markets.” 42. Defendant denies the allegations. Defendant avers that plaintiff has not defined its use of the term “market areas.” 43. Defendant denies the allegations. Defendant avers that plaintiff has not defined its use of the term “market areas.” 44. Defendant denies the allegations. 45. Paragraph 45 contains plaintiff’s characterizations of the Voucher Program, to which no response is required. 46. Defendant denies the allegations. 47. Defendant denies the allegations. 48. Defendant denies the allegations. 49. First sentence: defendant denies the allegations. Second sentence: defendant
6

Case 3:07-cv-00945-O Document 46 Filed 11/23/09 Page 7 of 10 PageID 410
admits. Third sentence: defendant denies the allegations. Fourth sentence: defendant admits. Fifth sentence: defendant denies the allegations.
50. Defendant denies the allegations. Defendant avers that plaintiff has not defined its use of the term “market areas.”
51. Defendant denies the allegations. Defendant avers that plaintiff has not defined its use of the term “market areas.”
52. Defendant denies the allegations. Defendant avers that plaintiff has not defined its use of the term “market area.”
53. Defendant denies the allegations. Defendant avers that plaintiff has not defined its use of the term “market area.”
54. Defendant denies the allegations. 55. Defendant denies the allegations. Defendant avers that plaintiff has not defined its use of the term “rental housing markets.” 56. Defendant denies the allegations. Defendant avers that plaintiff has not defined its use of the term “rental housing markets.” 57. Defendant denies the allegations. Defendant avers that plaintiff has not defined its use of the term “market areas.” 58. Defendant denies the allegations. Defendant avers that plaintiff has not defined its use of the term “market areas.” 59. Defendant denies the allegations. 60. Defendant denies the allegations. Defendant avers that it served the Administrative Record on plaintiff on August 19, 2009, which speaks for itself and to which the Court is respectfully referred for a full and accurate representation of its contents. 61. Defendant admits that, on August 19, 2009,it served on plaintiff the Administrative
7

Case 3:07-cv-00945-O Document 46 Filed 11/23/09 Page 8 of 10 PageID 411
Record, which speaks for itself and to which the Court is referred for a full and accurate statement of its contents. Defendant denies the remainder of the allegations in this paragraph.
62. Defendant is without knowledge or information sufficient to admit or deny the allegations contained in Paragraph 62 of the Complaint.
63. Defendant is without knowledge or information sufficient to admit or deny the allegations contained in Paragraph 63 of the Complaint.
64. Defendant is without knowledge or information sufficient to admit or deny the allegations contained in Paragraph 64 of the Complaint.
65. Defendant is without knowledge or information sufficient to admit or deny the allegations contained in Paragraph 65 of the Complaint.
66. Defendant denies the allegations, including those in Subparagraphs A–C. 67. Paragraph 67 contains conclusions of law, to which no response is required; to the extent a response is deemed required, defendant denies the allegations 68. Paragraph 68 contains conclusions of law, to which no response is required; to the extent a response is deemed required, defendant denies the allegations 69. Paragraph 69 contains conclusions of law, to which no response is required; to the extent a response is deemed required, defendant denies the allegations 70. Paragraph 70 contains conclusions of law, to which no response is required; to the extent a response is deemed required, defendant denies the allegations 71. Paragraph 71 contains plaintiff’s characterizations of the legal relief available to it on the claims filed, to which no response is required; to the extent a response is deemed required, defendant denies that plaintiff is eligible for the relief requested in Subparagraphs A–D. Defendant specifically denies all allegations in plaintiff’s Complaint not otherwise admitted or denied herein. In addition, defendant denies that plaintiff is entitled to the relief
8

Case 3:07-cv-00945-O Document 46 Filed 11/23/09 Page 9 of 10 PageID 412
requested, or to any relief whatsoever. WHEREFORE, defendant demands judgment dismissing the complaint in its entirety with
prejudice, and that this Court grant such other and further relief as it deems proper, including costs and disbursements. Dated: Novem ber 23, 2009
Respectfully submitted, TONY WEST Assistant Attorney General JAMES T. JACKS United States Attorney s/ James D. Todd, Jr. MICHAEL SITCOV Assistant Branch Director JAMES D. TODD, JR. Senior Counsel KIMBERLY L. HERB Trial Attorney U.S. DEPARTMENT OF JUSTICE Civil Division, Federal Programs Branch 20 Massachusetts Avenue, N.W. Washington, DC 20001 (202) 514-3378 (202) 305-8356 james.todd@usdoj.gov kimberly.l.herb@usdoj.gov Attorneys for Defendant
9

Case 3:07-cv-00945-O Document 46 Filed 11/23/09 Page 10 of 10 PageID 413 CERTIFICATE OF SERVICE
I hereby certify that on November 23, 2009, I electronically transmitted the attached document to the Clerk’s Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants:
MICHAEL M. DANIEL, Esq. LAURA BETH BESHARA, Esq.
Daniel & Beshara 3301 Elm Street Dallas TX 75226
/s/ James D. Todd, Jr. JAMES D. TODD, JR.
10

 
 Case: 3:07-cv-945 As of: 07/18/2012 02:20 PM CDT 1 of 5
U.S. District Court Northern District of Texas (Dallas) CIVIL DOCKET FOR CASE #: 3:07−cv−00945−O

CLOSED,ECF

The Inclusive Communities Project Inc v. The United States Department of Housing and Urban Development Assigned to: Judge Reed C O'Connor Cause: 42:405 Fair Housing Act
Plaintiff

Date Filed: 05/29/2007 Date Terminated: 07/05/2012 Jury Demand: None Nature of Suit: 443 Civil Rights: Accommodations Jurisdiction: U.S. Government Defendant

The Inclusive Communities Project Inc

represented by Michael M Daniel Law Office of Michael M Daniel 3301 Elm St Dallas, TX 75226 214/939−9230 Fax: 214/939−9229 FAX Email: daniel.michael@att.net LEAD ATTORNEY ATTORNEY TO BE NOTICED Bar Status: Admitted/In Good Standing

Laura Beth Beshara Daniel &Beshara 3301 Elm St Dallas, TX 75226 214/939−9230 Fax: 214/939−9229 FAX Email: laurabeshara@swbell.net ATTORNEY TO BE NOTICED Bar Status: Admitted/In Good Standing

V.
Defendant
The United States Department of Housing and Urban Development

represented by James D Todd , Jr US Department of Justice − Civil Division 20 Massachusetts Ave NW Washington, DC 20001 202/514−3378 Fax: 202/616−8202 Email: james.todd@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED Bar Status: Government Attorney
Justin Michael Sandberg Grippo &Elden LLC 111 S Wacker Dr Chicago, IL 60606 312−704−7700 Fax: 312−558−1195 Email: docket@grippoelden.com TERMINATED: 08/30/2007 Bar Status: Government Attorney
Kimberly Lynn Herb US Department of Justice 20 Massachusetts Ave NW Washington, DC 20530

Case: 3:07-cv-945 As of: 07/18/2012 02:20 PM CDT 2 of 5
202/305−8356 Fax: 202/616−8470 Email: kimberly.l.herb@usdoj.gov ATTORNEY TO BE NOTICED Bar Status: Government Attorney

Date Filed 05/29/2007 05/29/2007 05/29/2007 05/29/2007 05/29/2007 07/30/2007 07/31/2007
08/30/2007 10/02/2007
10/02/2007 10/02/2007
10/02/2007 10/22/2007 10/22/2007 11/01/2007 11/05/2007

# Docket Text
1 COMPLAINT against The United States Department of Housing and Urban Development filed by The Inclusive Communities Project Inc. (Filing fee $350; Receipt number 11733) (axm) (Entered: 05/29/2007)
***Magistrate Judge Kaplan chosen by random selection to handle matters that may be referred in this case. (axm) (Entered: 05/29/2007)
2 Summons Issued as to The United States Department of Housing and Urban Development, U.S. Attorney and U.S. Attorney General. (ISS−3) (axm) (Entered: 05/29/2007)
3 PLAINTIFF'S CERTIFICATE OF INTERESTED PERSONS by The Inclusive Communities Project Inc. (axm) (Entered: 05/29/2007)
4 Standing Order Designating Case for ECF − see order for specifics. (Signed by Judge Sam A Lindsay on 05/29/2007) (axm) (Entered: 05/29/2007)
5 Motion for Extension of Time to File Answer by The United States Department of Housing and Urban Development (Sandberg, Justin) (Entered: 07/30/2007)
6 ORDER granting 5 Motion for Extension of Time to File Answer re 1 Complaint. The United States Department of Housing and Urban Development answer due 10/2/2007 by 5:00 p.m. (Signed by Judge Sam A Lindsay on 7/31/07) (skt) (Entered: 08/01/2007)
7 NOTICE by The United States Department of Housing and Urban Development of Substitution of Counsel (Todd, James) (Entered: 08/30/2007)
8 MOTION to Dismiss for Lack of Subject Matter Jurisdiction Accompanying Brief; Certificate of Interested Persons by The United States Department of Housing and Urban Development (Attachments: # 1 Text of Proposed Order) (Todd, James) Modified on 10/4/2007 (skt). (Entered: 10/02/2007)
9 AFFIDAVIT re 8 MOTION to Dismiss for Lack of Jurisdiction Accompanying Brief; Certificate of Interested Persons by The United States Department of Housing and Urban Development. (Todd, James) (Entered: 10/02/2007)
10 ORDER REQUIRING ATTORNEY CONFERENCE AND STATUS REPORT: This conference shall take place no later than October 17, 2007. Status Report due by 11/1/2007. (see order for specifics) (Signed by Judge Sam A Lindsay on 10/2/2007) (tln) (Entered: 10/03/2007)
CERTIFICATE OF INTERESTED PERSONS by The United States Department of Housing and Urban Development. (See document #8 for image.) (skt) (Entered: 10/04/2007)
11 Brief in Opposition filed by The Inclusive Communities Project Inc to 8 MOTION to Dismiss for Lack of Subject Matter Jurisdiction. (Daniel, Michael) Modified on 10/23/2007 (jb). (Entered: 10/22/2007)
12 Appendix in Support filed by The Inclusive Communities Project Inc re 11 Response in Opposition to Motion to Dismiss (Daniel, Michael) (Entered: 10/22/2007)
13 NOTICE by The Inclusive Communities Project Inc Confirmation of Informal Leave of Court (Daniel, Michael) (Entered: 11/01/2007)
14 NOTICE by The United States Department of Housing and Urban Development of Confirmation of Informal Leave of Court to Extend Time to File Defendant's Reply Brief Until November 13, 2007 (Todd, James) (Entered: 11/05/2007)

Case: 3:07-cv-945 As of: 07/18/2012 02:20 PM CDT 3 of 5

11/06/2007 11/13/2007 11/13/2007 12/04/2007 12/13/2007 10/01/2008 10/07/2008 07/20/2009
07/20/2009
07/20/2009
08/05/2009 08/06/2009 08/06/2009 08/07/2009

15 STATUS REPORT by The Inclusive Communities Project Inc. and the United States Department of Housing and Urban Development. (Daniel, Michael) Modified party on 11/7/2007 (klm). (Entered: 11/06/2007)
16 REPLY filed by The United States Department of Housing and Urban Development re 8 MOTION to Dismiss for Lack of Jurisdiction Accompanying Brief; Certificate of Interested Persons (Todd, James) (Entered: 11/13/2007)
17 AFFIDAVIT re 16 Reply to Response to Motion of Donald L. Darling by The United States Department of Housing and Urban Development. (Todd, James) (Entered: 11/13/2007)
18 ORDER REASSIGNING CASE. Case reassigned to Judge Reed O'Connor for all further proceedings. Judge Sam A Lindsay no longer assigned to case. (Signed by Judge Sidney A Fitzwater on 12/4/07) (jrb) (Entered: 12/04/2007)
19 ORDER REGARDING TRANSITION. (Signed by Judge Reed C O'Connor on 12/13/07) (npk) (Entered: 12/14/2007)
20 ORDER REFERRING CASE to Magistrate Judge Jeff Kaplan for pretrial management. Motion(s) referred to Magistrate Judge Jeff Kaplan. (Signed by Judge Reed C O'Connor on 10/1/08) (jrb) (Entered: 10/01/2008)
21 NOTICE OF OPTION TO CONSENT TO PROCEED BEFORE THE MAGISTRATE JUDGE: A consent form is attached for your convenience. Please complete this form and return it to the district clerk by October 22, 2008. (Signed by Magistrate Judge Jeff Kaplan on 10/7/08) (skt) . (Entered: 10/07/2008)
22 FINDINGS AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE re 8 MOTION to Dismiss for Lack of Jurisdiction filed by The United States Department of Housing and Urban Development. Defendant's motion to dismiss for lack of subject matter jurisdiction [Doc. #8] should be granted in part and denied in part. The motion should be granted on the ground of sovereign immunity with respect to plaintiffs claims for alleged violations of the NHA. (see order) (Ordered by Magistrate Judge Jeff Kaplan on 07/20/09) (lmp) (Entered: 07/21/2009)
23 ORDER: In a letter to the attorneys dated October 28,2008, the court indicated that defendant would be required to produce the administrative record to opposing counsel within 30 days after the magistrate judge filed his recommendation on the pending motion to dismiss. That recommendation was filed today. Accordingly, defendant shall produce the administrative record to counsel for plaintiff by August 19, 2009. (Ordered by Magistrate Judge Jeff Kaplan on 07/20/09) (lmp) (Entered: 07/21/2009)
24 Order. In order to assist the court in establishing pretrial deadlines for the prompt and efficient disposition of this case, counsel for plaintiff and defendant are directed to hold another Rule 26(f) conference by August 3, 2009. The parties shall submit a joint status report and proposed scheduling plan by August 17, 2009. (see order) (Ordered by Magistrate Judge Jeff Kaplan on 07/20/09) (lmp) (Entered: 07/21/2009)
25 Unopposed MOTION for Extension of Time to File Defendant's Objections to Report and Recommendation of Magistrate Judge filed by The United States Department of Housing and Urban Development (Todd, James) (Entered: 08/05/2009)
26 ORDER: The deadlne for defendant to file any objections to the July 30, 2009 recommendation is extended until August 21, 2009. No further extensions will be granted absent exceptional circumstances. (Ordered by Magistrate Judge Jeff Kaplan on 8/6/2009) (jca) (Entered: 08/06/2009)
Set/Reset Deadlines as to 25 Motion for Extension of Time to File. Objections to FRdue by 8/6/2009 per 26 Order. (twd) (Entered: 08/07/2009)
27 Defendant's Objections and MOTION to Stay 7/20/2009 23 Order of Magistrate Judge to Produce the Administrative Record filed by The United States Department of Housing and Urban Development. (Todd, James) Modified on 8/10/2009 (skt).

Case: 3:07-cv-945 As of: 07/18/2012 02:20 PM CDT 4 of 5

08/10/2009 08/10/2009 08/11/2009
08/17/2009 08/18/2009
08/20/2009 08/24/2009 09/29/2009
10/15/2009 10/16/2009 10/16/2009 10/21/2009 10/23/2009 10/26/2009

(Entered: 08/07/2009)
28 RESPONSE in Opposition filed by The Inclusive Communities Project Inc re 27 Defendant's Objections and MOTION to Stay 7/20/2009 23 Order of Magistrate Judge to Produce the Administrative Record (Daniel, Michael) (Entered: 08/10/2009)
30 ORDER denying 27 Defendant's Objections to, and Motion to Stay. (Ordered by Judge Reed C O'Connor on 8/10/2009) (klm) (Entered: 08/12/2009)
29 REPLY re: 27 Defendant's Objections and MOTION to Stay 7/20/2009 23 Order of Magistrate Judge to Produce the Administrative Record filed by The United States Department of Housing and Urban Development (Attachments: # 1 Exhibit 1: Ltr. from Magistrate Judge Kaplan (Oct. 29, 2008)) (Todd, James) (Entered: 08/11/2009)
31 Joint STATUS REPORT and Proposed Scheduling Plan filed by The Inclusive Communities Project Inc, The United States Department of Housing and Urban Development. (Daniel, Michael) (Entered: 08/17/2009)
32 SCHEDULING ORDER: Motion for Summary Judgment due by 12/18/2009; Response and Cross−Motion for Summary Judgment due by 1/19/10; Reply Brief and Response due by 2/19/10; Motions for Leave to Amend due by 10/15/2009; Motions for Leave to Conduct Discovery due by 11/13/2009. (See Order) (Ordered by Magistrate Judge Jeff Kaplan on 8/18/2009) (skt) (Entered: 08/19/2009)
33 OBJECTION to 22 Findings and Recommendations. (Todd, James) (Entered: 08/20/2009)
34 RESPONSE in Opposition filed by The Inclusive Communities Project Inc re 33 Objection to Findings and Recommendations (Daniel, Michael) (Entered: 08/24/2009)
35 ORDER ADOPTING 22 FINDINGS AND RECOMMENDATIONS OF THE UNITED STATES MAGISTRATE JUDGE: 8 Motion to Dismiss is granted on the ground of sovereign immunity with respect to Plaintiff's claims for alleged violations of the United States Housing Act, but denied on all other grounds argued. (See Order.) (Ordered by Judge Reed C O'Connor on 9/29/2009) (twd) (Entered: 09/29/2009)
36 MOTION for Leave to File First Amended Complaint filed by The Inclusive Communities Project Inc with Brief/Memorandum in Support. (Attachments: # 1 Exhibit First Amended Complaint) (Daniel, Michael) (Entered: 10/15/2009)
37 STANDING ORDER ON NON−DISPOSITIVE MOTIONS: This order governs the filing and disposition of all discovery−related motions, pleading disputes, and other non−dispositive motions in this case. (See order for specifics). (Ordered by Magistrate Judge Jeff Kaplan on 11/15/09) (jca) (Entered: 10/16/2009)
38 ORDER denying 36 Motion for Leave to File. Plaintiff may refile its motion, if necessary, after the parties comply with the Standing Order on Non−Dispositive Motions filed today. (Ordered by Magistrate Judge Jeff Kaplan on 10/15/09) (jca) (Entered: 10/16/2009)
39 NOTICE of Attorney Appearance by Kimberly Lynn Herb on behalf of The United States Department of Housing and Urban Development. (Herb, Kimberly) (Entered: 10/21/2009)
40 MOTION for Leave to File First Amended Complaint filed by The Inclusive Communities Project Inc with Brief/Memorandum in Support. (Attachments: # 1 Exhibit First Amended Complaint, # 2 Exhibit Joint Status Report) (Daniel, Michael) (Entered: 10/23/2009)
41 Memorandum Order granting 40 MOTION for Leave to File First Amended Complaint filed by The Inclusive Communities Project Inc. Counsel granted leave to file an amended pleading under LR 15.1 is reminded to electronically file the amended pleading. (see order) (Ordered by Magistrate Judge Jeff Kaplan on 10/26/2009) (mfw) Modified on 10/26/2009 (twd). (Entered: 10/26/2009)

Case: 3:07-cv-945 As of: 07/18/2012 02:20 PM CDT 5 of 5

10/26/2009 11/03/2009 11/03/2009 11/04/2009 11/23/2009 11/24/2009 11/25/2009
12/30/2009
01/27/2010 05/04/2010 06/07/2010 07/02/2012 07/02/2012 07/05/2012 07/05/2012

42 AMENDED COMPLAINT First Amended Complaint against The United States Department of Housing and Urban Development filed by The Inclusive Communities Project Inc. (Daniel, Michael) (Entered: 10/26/2009)
43 Unopposed Motion for Extension of Time to File Answer filed by The United States Department of Housing and Urban Development with Brief/Memorandum in Support. (Attachments: # 1 Text of Proposed Order) (Todd, James) (Entered: 11/03/2009)
44 Unopposed MOTION to Amend/Correct 43 Unopposed Motion for Extension of Time to File Answer with Corrected Proposed Order filed by The United States Department of Housing and Urban Development (Attachments: # 1 Text of Proposed Order) (Todd, James) (Entered: 11/03/2009)
45 ORDER granting 43 Motion for Extension of Time to File Answer re 42 Amended Complaint. The United States Department of Housing and Urban Development answer due 11/23/2009. (Ordered by Magistrate Judge Jeff Kaplan on 11/4/2009) (mfw) (Entered: 11/04/2009)
46 ANSWER to 42 Amended Complaint filed by The United States Department of Housing and Urban Development (Todd, James) (Entered: 11/23/2009)
47 Unopposed MOTION to Modify 32 Scheduling Order filed by The United States Department of Housing and Urban Development with Brief/Memorandum in Support. (Attachments: # 1 Text of Proposed Order) (Todd, James) (Entered: 11/24/2009)
48 ORDER granting 47 Motion to modify scheduling order. Plaintiff will file its motion for summary judgment and supporting brief by January 4, 2010. Defendant will file its cross motion for summary judgment and combined brief in support by February 26, 2010. (See order for specifics). (Ordered by Magistrate Judge Jeff Kaplan on 11/24/09) (jca) (Entered: 11/25/2009)
49 ORDER: The scheduling order dated 8/18/2009, as modified on 11/25/2009, is further modified. Deadline for plaintiff's motion for summary judgment is 2/5/10; deadline for defendant's opposition and cross−motion for summary judgment is 3/29/10; deadline for plaintiff's reply and opposition to cross−motion is 4/29/10; deadline for defendant's reply is 5/28/10. (See Order for specifics) (Ordered by Magistrate Judge Jeff Kaplan on 12/30/2009) (skt) Modified on 12/31/2009 (caw). (Entered: 12/30/2009)
50 ORDER: A stipulation of dismissal shall be submitted to the court by 5/3/2010. (see order) (Ordered by Magistrate Judge Jeff Kaplan on 1/27/2010) (axm) (Entered: 01/28/2010)
51 ORDER: At the request of the parties, the deadline for finalizing a settlement in this case is extended to June 4, 2010. No further extensions will be granted. (See order). (Ordered by Magistrate Judge Jeff Kaplan on 5/4/2010) (chmb) (Entered: 05/04/2010)
52 Order Directing Administrative Closure. (See Order) (Ordered by Magistrate Judge Jeff Kaplan on 6/7/2010) (dnc) (Entered: 06/08/2010)
53 Unopposed MOTION to Reopen Case for the Filing of a Stipulation of Dismissal filed by The Inclusive Communities Project Inc (Attachments: # 1 Proposed Order Proposed Agreed Order) (Daniel, Michael) (Entered: 07/02/2012)
54 NOTICE Stipulation of Dismissal re: 53 Unopposed MOTION to Reopen Case for the Filing of a Stipulation of Dismissal filed by The Inclusive Communities Project Inc (Daniel, Michael) (Entered: 07/02/2012)
55 Order Granting 53 Unopposed MOTION to Reopen Case for the Filing of a Stipulation of Dismissal filed by The Inclusive Communities Project Inc. (Ordered by Judge Reed C O'Connor on 7/5/2012) (cea) (Entered: 07/05/2012)
***Civil Case Terminated Per Stipulation at Docket 54 . (cea) (Entered: 07/05/2012)