Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-04-02620/USCOURTS-ca8-04-02620-0/pdf.json

Parties Involved:
Charleston Housing Authority
Appellant
Yolanda Clark
Not Party
Department of Housing and Urban Development
Not Party
Danny Hines
Not Party
Frances Hines
Not Party
Housing Comes First
Appellee
Priscilla Johnson
Appellee
Mel Martinez
Not Party
Essie McCatrey
Appellee
Angela Moore
Not Party
Timothy Owens
Appellee
Paul Page
Appellant
Tisha Smith
Not Party
UNITED STATES DEPARTMENT OF AGRICULTURE
Not Party
Ann M. Veneman
Not Party

Document Text:

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

__________

No. 04-1884

__________

Charleston Housing Authority, a *

municipal corporation, *

*

Plaintiff - Appellant, *

* Appeals from the United States

v. * District Court for the Eastern

* District of Missouri.

United States Department of *

Agriculture; Ann M. Veneman, in her *

official capacity as Secretary of the *

United States Department of *

Agriculture, *

*

Defendants - Appellees, *

*

Frances Hines, Timothy Owens, Priscilla *

Johnson, Essie McCatrey, Danny Hines, *

Tisha Smith, Yolanda Clark, Housing *

Comes First, a Missouri non-profit *

corporation, *

*

Movants Below. *

__________

No. 04-2620

__________

Frances Hines, *

*

Plaintiff, *

Appellate Case: 04-2620 Page: 1 Date Filed: 08/18/2005 Entry ID: 1941711
*

Timothy Owens, Priscilla Johnson, Essie *

McCatrey, *

*

Plaintiffs - Appellees, *

*

Danny Hines, *

*

Plaintiff, *

*

Housing Comes First, a Missouri non- *

profit corporation, *

*

Plaintiff - Appellee *

*

Angela Moore, Tisha Smith, Yolanda *

Clark, *

*

Plaintiffs, *

*

v. *

*

Charleston Housing Authority, a *

municipal corporation, Paul Page, in his *

official capacity and as Executive *

Director of the Charleston Housing *

Authority, *

*

Defendants - Appellants, *

*

Department of Housing and Urban *

Development, Mel Martinez, in his *

official capacity and as Secretary of the *

United States Department of Housing *

and Urban Development, United States *

Department of Agriculture, Ann M. *

Veneman, in her official capacity as *

Secretary of the United States *

Department of Agriculture, *

Appellate Case: 04-2620 Page: 2 Date Filed: 08/18/2005 Entry ID: 1941711
-3-

*

Defendants. *

___________

Submitted: April 11, 2005

 Filed: August 18, 2005 (Corrected 8/30/05) 

___________

Before MURPHY, BRIGHT, and MELLOY, Circuit Judges

____________

MELLOY, Circuit Judge.

In 2001, a local housing authority in Charleston, Missouri, the Charleston

Housing Authority (the “Housing Authority”), sought to implement a revitalization

plan that involved the demolition of selected public housing units. The housing units

at issue were the Charleston Apartments, fifty low-income rental units in a cluster of

twenty-two separate buildings. At the time that the Housing Authority adopted its

plan, forty-seven of the fifty units were occupied, forty-six by African American

tenants.

The Housing Authority had purchased and updated the Charleston Apartments

in 1981 with the help of a $740,000 Farmer’s Home Administration (“FmHA”)

Section 515 Rural Rental Housing loan under the National Housing Act of 1949, as

amended by Pub. L. No. 89-754, Section 804, 80 Stat. 1255, 1282 (1966), codified

at 42 U.S.C. § 1485. Under the terms of the loan agreement, the Housing Authority

was required to use the Charleston Apartments as public housing. Also in 1981, the

Housing Authority had signed a twenty-year contract with the Department of Housing

and Urban Development (“HUD”) to receive Section 8, project-based assistance

under the Housing Assistance Program. See 42 U.S.C. § 1437. The Section 8

contract, like the Section 515 loan agreement, required the Housing Authority to

operate the property as low-income public housing.

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1

Although the Housing Authority borrowed the $740,000 from the FmHA,

subsequent agency reorganization placed the USDA in the position of administrator

of the loan.

2

For a thorough history of the loan programs at issue in this case and the

legislation and regulations that set forth the protocol for USDA acceptance of

prepayment, see Franconia Assoc. v. United States, 61 Fed. Cl. 718, 722-25 (2004)

(on remand following Franconia Assoc. v. United States, 536 U.S. 129, 134-38

(2002)). 

-4-

In 2001, the Housing Authority elected not to renew its Section 8 Housing

Assistance Program contract. Also, the Housing Authority attempted to tender final

payment on the Section 515 loan to eliminate the Section 515 contractual restrictions

on use of the Charleston Apartments. The United States Department of Agriculture

(“USDA”)1

 refused to accept the payment. The USDA characterized the payment as

a “prepayment” as that term is defined under the Emergency Low Income Housing

Preservation Act, codified at 42 U.S.C. § 1472(c) (“Preservation Act”). As discussed

below, the Preservation Act is a statute designed to protect the nation’s stock of

public housing by requiring, inter alia, that units be offered for sale to qualifying

organizations or governmental bodies for continued use as public housing when an

owner proposes to prepay a loan and terminate use of the units for public housing.2

The Housing Authority disputed the USDA’s characterization of the tendered

payment as a prepayment, arguing that the payment was a regularly scheduled

payment. The Housing Authority also challenged the enforceability of the

Preservation Act. The Housing Authority sought a court order to quiet title and to

force the USDA to accept the payment and release the subject units from statutory

and contractual restrictions on use. Ruling on a motion for summary judgment, the

district court determined that the tendered payment was a prepayment, the

Preservation Act applied, and the Preservation Act precluded the USDA’s acceptance.

Accordingly, the district court refused to enter the Housing Authority’s requested

order. The Housing Authority appeals these rulings.

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-5-

 In addition, current and former residents of the Charleston Apartments and a

non-profit organization, Housing Comes First, brought a separate action against the

Housing Authority. These plaintiffs sought injunctive relief to prevent the Housing

Authority from implementing its revitalization plan. These plaintiffs alleged that

implementation of the plan would create a disparate impact on the basis of race. The

district court held a bench trial, ruled in favor of these plaintiffs on two claims,

enjoined implementation of the plan, and ordered the Housing Authority to lease

vacant and vacated Charleston Apartment units to eligible applicants. The Housing

Authority appeals these rulings.

We affirm in all respects other than the scope of the injunctive relief. On this

limited issue, we remand for the reasons discussed below.

I. Background

Under the terms of the promissory note, the Housing Authority was to make

588 monthly payments of $5,624.00, with the final payment due in 2031. The loan

documents permitted the Housing Authority to make prepayments on the loan. The

loan documents also required the Housing Authority to comply with all applicable

laws and regulations in effect when the parties entered the agreement as well as any

subsequent laws and regulations not inconsistent with then-existing laws and

regulations.

The Housing Authority, in fact, made substantial prepayments on the loan.

The Housing Authority did not need all of the $740,000 it initially borrowed to

purchase and repair the Charleston Apartments. As a result, the Housing Authority

returned almost $130,000 of principal during 1981. Also, between 1981 and 2000,

the Housing Authority made other prepayments, including $6,000 monthly payments

rather than the lesser amount that was actually due. Consequently, as of July 1999,

the outstanding balance was less than $50,000.

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In July 1999, the Housing Authority contacted the USDA regarding payment

of the outstanding balance of the loan. The USDA responded by sending the Housing

Authority instructions that explained prepayment procedures under the Preservation

Act. In general terms, these procedures require an owner to provide information to

enable an assessment of whether prepayment would adversely impact minorities or

leave displaced tenants without adequate, safe housing. 42 U.S.C. § 1472(c)(5)(G).

If an adverse impact is expected, statutory “safe harbor” provisions do not apply, and

the USDA is required to negotiate with the owner to retain the units as public

housing. Id. at § 1472 (c)(4)(A). If no agreement is reached, the owner must offer

the units for sale at fair market value to certain qualifying parties for continued

operation as public housing. Id. at § 1472(c)(5)(A)(i). If no qualifying buyer

purchases the property, the USDA may then accept prepayment and release the

property from use restrictions. Id. at § 1472(c)(5)(A)(ii). The Preservation Act

provides that the fair market value is a price determined by party-designated

appraisers. Id. at § 1472(c)(5)(A)(i).

Congress passed the Preservation Act as a response to a perceived crisis in the

loss of public housing due to the prepayment of Section 515 loans. Parkridge

Investors, L.P. v. Farmers Home Admin., 13 F.3d 1192, 1195 (8th Cir. 1994). The

protocol for the acceptance of prepayments and the retention of public housing did

not exist when the Housing Authority entered the agreement with the FmHA. The

parties agree that, but for the Preservation Act, the contract grants the Housing

Authority an unconditional right to prepay the loan. Accordingly, the prepayment

protocol demanded by the USDA is in direct conflict with the Section 515 loan

agreement’s prepayment provisions.

In November 1999, the Housing Authority adopted a de-concentration policy,

and in December 1999, decided not to rent units at the Charleston Apartments as they

became vacant. In February 2000, the Housing Authority adopted Resolution 604 in

which it resolved not to seek renewal of the Section 8 contract. Through Resolution

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-7-

604, the Housing Authority also resolved to pay off the loan and demolish the

Charleston Apartments. 

In April 2000, the Housing Authority notified HUD of the decision not to

renew the Section 8 agreement, effective April 2001. As of April 2000, the amount

of principal on the Section 515 loan had been reduced to about $112. Accordingly,

payment of an amount substantially less than a regularly scheduled installment

payment would have paid the loan in full. 

In December 2000, the Housing Authority submitted a prepayment request to

the USDA, in compliance with the Preservation Act instructions that the USDA had

sent in July 1999. In April 2001, HUD offered to extend the Section 8 contract for

four months. Also in April 2001,the USDA responded to the Housing Authority’s

prepayment request by asking for additional information. The Housing Authority did

not provide the additional information, but rather, in May 2001, tendered a check to

the USDA which would have paid the loan in full. The USDA returned the check the

next day. About one week later, the USDA sent a letter to the Housing Authority

demanding that the Housing Authority continue to operate the Charleston Apartments

in accordance with the loan documents and applicable regulations until the USDA

completed its impact determination as required under the Preservation Act

prepayment approval process. At the end of May, the Housing Authority refused to

sign a Section 8 contract extension with HUD. Also at the end of May, the Housing

Authority tendered payment for a second time. The USDA again returned the check.

On June 11, 2001, the Housing Authority adopted Resolution 639 which

rescinded Resolution 604 (regarding demolition of the Charleston Apartments). On

June 22, the USDA informed the Housing Authority that it had determined

prepayment of the loan would have an impact on minorities such that the Housing

Authority would have to advertise the Charleston Apartments for sale to an eligible

non-profit organization or public body. The USDA informed the Housing Authority

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-8-

of its right to appeal the impact determination. The Housing Authority did not appeal

the impact determination, but rather, on June 27, notified the USDA that it was

withdrawing “what it erroneously termed a request to prepay.” As of the date of the

district court’s opinion, there was no pending request for prepayment.

II. Procedural History

In late June 2001, the Housing Authority brought a Complaint for Declaratory

Judgment seeking to have the promissory note marked paid and a deed of trust

released. The Housing Authority later added a request to obtain quiet title. We refer

to this complaint and the claims therein as the Housing Authority’s Complaint and

the Housing Authority’s Claims. 

Housing Comes First, the two remaining Charleston Apartment tenants, and

certain former tenants filed a separate, multi-count action against the Housing

Authority, HUD, and the USDA. We refer to these plaintiffs collectively as the

Tenants and their complaint and the claims therein as the Tenants’ Complaint and the

Tenants’ Claims.

Relevant to this appeal are summary judgment rulings on the Housing

Authority’s Claims and trial rulings on the Tenants’ Claims. The Housing Authority

and the Tenants filed cross motions for summary judgment on the Housing

Authority’s Claims against the USDA. The USDA did not file its own motion for

summary judgment, but asked in its response to the Housing Authority’s motion that

the district court grant summary judgment against the Housing Authority. The district

court questioned the Tenants’ ability to seek summary judgment on the USDA’s

behalf. Accordingly, the district court treated the request in the USDA’s responsive

filing as a motion for summary judgment and treated the Tenants’ arguments as

supplemental arguments by the USDA. The district court then determined that the

Preservation Act applied, the final payment on the loan was a prepayment under

Appellate Case: 04-2620 Page: 8 Date Filed: 08/18/2005 Entry ID: 1941711
-9-

Preservation Act, and the USDA was not able to accept the prepayment unless the

Housing Authority first followed the protocol for preservation of public housing as

set forth in Preservation Act. The district court granted summary judgment against

the Housing Authority on all of the Housing Authority’s Claims.

The district court disposed of Counts I and II of the Tenants’ Complaint via

summary judgment in favor of the Housing Authority. The district court then held

a bench trial on Counts III-XIII of the Tenants’ Complaint and entered judgment

against the Tenants as to Counts III-VIII and XII-XIII. The Tenants’ do not appeal

these rulings. The district court entered judgment against HUD as to Count XI, and

HUD has not appealed that ruling.

The only counts from the Tenants’ Complaint relevant to the present appeals

are Counts IX and X against the Housing Authority. Count IX is a claim under the

Quality Housing and Work Responsibility Act of 1998, 42 U.S.C. § 1437c-1(d)(15),

in which the Tenants allege that the Housing Authority failed to affirmatively further

fair housing in relation to its refusal to rent and planned demolition of the Charleston

Apartments. Count X is a claim under the Fair Housing Act, 42 U.S.C. § 3604(a), in

which the Tenants allege disparate impact discrimination based on race. The district

court found in favor of the Tenants as to the disparate impact claim, finding a

disparate impact and also finding that the Housing Authority proffered only

pretextual explanations for its actions. The district court then found, as to Count IX,

that there was an absence of evidence to show that the Housing Authority had

considered the impact of its planned action upon African-Americans. The district

court concluded that this absence of evidence, coupled with the disparate impact

violation of the Fair Housing Act, demonstrated that the Housing Authority had failed

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3

The district court noted that the Housing Authority had not raised the issue of

whether the duty to affirmatively further fair housing as set forth in the Quality

Housing and Work Responsibility Act was privately enforceable. Because the

Housing Authority did not raise this issue, and because the question of whether a

statute creates a private right of action is not a question of subject matter jurisdiction,

we need not determine whether such a right exists. See MM&S Financial, Inc. v.

National Ass'n of Securities Dealers, Inc., 364 F.3d 908, 909-10 (8th Cir. 2004)

(analyzing whether a statute created a private enforcement right under Fed. R. Civ.

P. 12(b)(6)).

-10-

to affirmatively further fair housing.3

 Consequently, the district court entered

judgment against the Housing Authority as to Counts IX and X. 

Following the bench trial, the district court ordered the Housing Authority not

to discriminate on the basis of race. The district court declined, however, to order the

Housing Authority to “rent-up” the Charleston Apartments. The district court found

instead that because the Preservation Act applied, the Housing Authority would have

to comply with Preservation Act’s protocol for the retention of public housing before

the Charleston Apartments could be demolished or used for purposes other than

public housing. Accordingly, the district court ordered the USDA to refuse to accept

payment and to refuse to remove restrictions on use unless and until the Housing

Authority complied with the multi-step protocol of the Preservation Act.

The Tenants then filed a motion asking the district court to reconsider the form

of relief. In ruling on the motion to reconsider, the district court determined that its

initial relief was inadequate. Consequently, the district court ordered the Housing

Authority to reopen the Charleston Apartments and give priority to former residents

who wished to return. The district court did not specify that complete occupancy was

required nor that the Housing Authority had to achieve a certain percentage of

occupancy.

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On appeal, the Housing Authority presents a series of arguments in support of

its theory that the terms of the agreement rather than the requirements of the

Preservation Act control on the present facts and that the USDA must unconditionally

accept the tendered payment. The Housing Authority also argues that the Tenants

failed to demonstrate an adverse impact, and that even if the Tenants had

demonstrated an adverse impact, the Housing Authority’s proffered rationale for the

proposed action was legitimate and non-pretextual. The Housing Authority also

argues that its recision of Resolution 604 makes the present discrimination claims

moot. Finally, the Housing Authority challenges the district court’s remedy, namely,

the forced occupancy of the Charleston Apartments.

III. Discussion – Housing Authority’s Claims

We review a grant of summary judgment de novo. Summary judgment is

particularly appropriate where the dispute revolves around arguments that are purely

legal and where there are no disputes of material fact. Here, the facts surrounding

loan payments and performance under the Section 515 agreement are undisputed.

The dispute concerns only the impact of subsequent legislation, the Preservation Act,

upon a previously established contract.

The Housing Authority and the FmHA entered into the Section 515 agreement

in 1981. Like the Supreme Court in Franconia Assoc. v. United States, 536 U.S. 129

(2002), and our court in Parkridge Investors, L.P. v. Farmers Home Admin., 13 F.3d

1192 (8th Cir. 1994), we assume that the loan agreement granted the Housing

Authority an unconditional right to prepay the loan and imposed on the USDA a

concomitant obligation to accept prepayment.

Congress passed the Preservation Act in 1987. The prepayment protocol of the

Preservation Act is in direct conflict with the Housing Authority’s 1981 contractual

right of prepayment. The Housing Authority argues that the contractual provisions

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-12-

prevail over the subsequent legislation because: (1) the government clearly waived

its right to pass legislation such as the Preservation Act when it entered into the 1981

agreement such that the Preservation Act is unenforceable against the Housing

Authority; (2) the final payment is not a prepayment under the Preservation Act; and

(3) the USDA is equitably estopped from refusing acceptance in light of its course of

performance under the contract which included the ongoing acceptance of

prepayments. We address these arguments in turn.

We reject the first argument based on Parkridge Investors. As explained by the

district court below, our court in Parkridge Investors:

interpreted a loan agreement identical to the one at issue in this case and

held that the government did not contract away its sovereign power to

alter the loan agreement through subsequent legislation merely by

agreeing to an absolute prepayment right. [We] further held that the

government did not effectuate a taking or otherwise unconstitutionally

alter the terms of a loan agreement by requiring the borrower to comply

with the provisions of the [Preservation Act]. 

In Parkridge Investors, our court analyzed the enforceability of the Preservation Act

as applied to a Section 515 contract under the standard set forth in Merrion v. Jicarilla

Apache Tribe, 455 U.S. 130, 147 (1982). “In Merrion, the Supreme Court observed

that ‘sovereign power . . . is an enduring presence that governs all contracts subject

to the sovereign's jurisdiction, and will remain intact unless surrendered in

unmistakable terms.’” Parkridge Investors, 13 F.3d at 1198 (quoting Merrion, 455

U.S. at 148). Our court concluded, “The United States cannot be said to have

unmistakeably waived one of its most vital powers, that of enacting legislation, by

virtue of this contract language.” Id. The district court correctly recognized that

Parkridge Investors, involving the same law applied to a Section 515 agreement,

controls on the present facts.

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4

The Department of Agriculture recently reorganized some of its regulations,

including those relevant to rural housing, Section 515 loans, and prepayment

requests. See Reinvention of the Sections 514, 515, 516, and 521 Multi-Family

Housing Programs, 69 FR 69032 (Interim final rule, Nov. 26, 2004, effective in

relevant part on February 24, 2005). Section 1964.224 does not appear in the

renumbered and amended regulations now codified under 7 C.F.R. § 3560. The

definition of prepayment remains effectively unchanged. See 7 C.F.R. § 3560.11.

-13-

The Housing Authority's second argument, that the tendered payment was not

a prepayment, also fails. This technical argument is contrary to the goals of the

Preservation Act and contrary to the Preservation Act's implementing regulations. As

already noted, Congress passed the Preservation Act to prevent exactly the activity

that the Housing Authority proposed in this case, namely, the removal of public

housing units through the retirement of Section 515 loans and the elimination of

accompanying restrictions on use. The applicable regulations at 7 C.F.R. § 1965.224

(2002)4

 provide that a final payment accelerated from the original maturity date due

to earlier prepayments or refunds from the borrower is to be treated as a prepayment.

Id. (“If the loan on a project . . . reaches or falls below six remaining payments due

to borrower voluntary advance payments . . . the borrower will be notified that the

final payment on the account cannot be accepted unless a pre-payment request is

made.”). Further, the regulations define “prepayment” as payment before the loan

maturity date. 7 C.F.R. § 1964.202 (2002).

The original maturity date for the loan was 2031. The Housing Authority's

prepayments did not alter the maturity date. Through the initial refund of almost

$130,000, the Housing Authority prepaid a substantial portion of principal. Also,

each additional payment included prepayments on principal. Permitting a Section

515 debtor who has made substantial prepayments to label a final payment thirty

years prior to the original maturity date as anything other than a prepayment would

be to elevate technical form over substance. To hold otherwise would create a

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5

The issue presented in this case is limited. The Housing Authority seeks

specific performance of the contract’s prepayment provisions–in effect, a court order

forcing the USDA to violate the Preservation Act. Although we may not grant the

requested relief, the Housing Authority is not necessarily without a remedy. The

Supreme Court in Franconia Assoc., 536 U.S. at 142-144, addressed the impact of

the Preservation Act upon a Section 515 contract. To resolve a question regarding

the applicable statute of limitations on a Section 515 debtor’s Tucker Act claim, the

Court stated that passage of the Preservation Act comprised a repudiation of the

contract and the government’s refusal to accept prepayment comprised breach.

Although the Court addressed only a statute of limitations issue, the Court’s

reasoning strongly suggests that damages may be available under the Tucker Act for

some Section 515 debtors. 

6

Like the district court, we note that the Housing Authority in this case sought

only equitable relief and did not seek damages as may be available under the Tucker

Act, 28 U.S.C. § 1491. See Franconia Assoc's v. United States, 536 U.S. 129 (2002)

(addressing a statute of limitations issue surrounding a Tucker Act claim by a Section

515 borrower based on alleged breach of a Section 515 contract related to application

of the Preservation Act).

-14-

loophole in the Preservation Act's prepayment restrictions large enough swallow all

of Congress's clearly expressed intent.5

 

The Housing Authority's final argument, that equitable estoppel applies based

on the USDA's past acceptance of prepayments, also fails. To succeed on a claim of

equitable estoppel against the government, a plaintiff must not only prove all the

elements of equitable estoppel, but also that the government committed affirmative

misconduct. See Rutten v. United States, 299 F.3d 993, 995 (8th Cir. 2002) (“In

addition to proving the traditional elements of estoppel, the plaintiff must first

establish that the government committed affirmative misconduct.”). The Housing

Authority made no such showing in the present case. Because the district court

correctly rejected all of the Housing Authority's arguments against application of the

Preservation Act, summary judgment was appropriate and we affirm.6

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-15-

IV. Discussion – Disparate Impact Discrimination and the Quality Housing and

Work Responsibility Act

Following a bench trial, “we review the trial court’s findings of fact for clear

error.” Cooper Tire & Rubber Co. v. St. Paul Fire & Marine Ins. Co., et al., 48 F.3d

365, 369 (8th Cir. 1995); see also Fed. R. Civ. Pro. 52(a). The district court’s

determinations under the disparate impact burden-shifting analysis are factual

determinations that we review for clear error. See Chambers v. Omaha Girls Club,

Inc., 834 F.2d 697 (8th Cir. 1987) (stating in the context of a disparate impact

employment discrimination claim that determinations under the burden shifting

analysis “are reviewed under the clearly erroneous standard of review applied to

factual findings”). Questions of mootness are matters of subject matter jurisdiction

that we review de novo.

We first address the Housing Authority’s mootness argument. The Housing

Authority argues that because it rescinded Resolution 604 when it passed Resolution

639, there is no longer a pending plan to demolish the Charleston Apartments. The

Housing Authority also claims that it is considering a plan proposed by a group of

citizens to demolish only nine of the Charleston Apartment fourplex units and replace

those units with low-income, for-sale units. Notwithstanding these claims, the record

demonstrates that the Housing Authority has continued its practice of leaving the

Charleston Apartments vacant, as per Resolution 604. Further, the Housing Authority

continues to seek reversal of the district court’s ruling under the Preservation Act.

Defendants who argue mootness due to changed circumstances based on their

own behavior face a heavy burden. This is because, in general, “a defendant’s

voluntary cessation of a challenged practice does not deprive a federal court of its

power to determine the legality of the practice.” Friends of the Earth, Inc. v. Laidlaw

Envtl. Serv. (TOC), Inc., 528 U.S. 167, 189 (2000) (“A case might become moot if

subsequent events made it absolutely clear that the allegedly wrongful behavior could

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7

To the extent that the particular facts surrounding any proposed, alternative

plan or options for revitalization of the area deviate from the original plan, such

details are best addressed by the district court upon reconsideration of the scope of

its injunctive relief. Limiting our examination only to the issue of mootness, we find

the likelihood of recurrence sufficiently certain to vest jurisdiction in our court. 

8

Again, we note that the Housing Authority did not challenge the Tenants’

ability to privately enforce this provision against a municipal housing authority.

-16-

not reasonably be expected to recur.”). We think it is clear that the Housing

Authority has not demonstrated mootness in this instance. Instead, the present case

fits the well-established exception for situations that are capable of being repeated,

yet escape review. Id. 

Here, the Housing Authority’s continued attempts to obtain quiet title belie its

claim that it no longer intends to convert the property to other uses. Further, the

timing of Resolution 639 and the withdrawal of the request for prepayment were such

that they appear more akin to strategic, litigation-related acts rather than elements of

long-range planning. Accordingly, it is reasonable to expect that the discrimination

claim plaintiffs will be subject to the same action in the future, even if under a slightly

different plan. The possibility of this recurrence is not so remote or speculative that

our jurisdiction is lacking. See, e.g., Van Bergen v. Minnesota, 59 F.3d 1541, 1547

(8th Cir. 1995).7

Turning to the merits of Counts IX and X of the Tenants’ complaint, we find

no arguments specific to Count IX, the Quality Housing and Work Responsibility Act

claim. Consequently, we assume that the Housing Authority accepts the district

court’s reasoning—the absence of evidence to demonstrate consideration of an impact

upon African Americans means that an adverse ruling on the disparate impact

discrimination claim also resolves the Quality Housing and Work Responsibility Act,

“affirmatively further fair housing” claim.8

 Accordingly, we address in detail only

Count X, the Fair Housing Act claim.

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To establish a prima facie, Fair Housing Act, disparate impact claim under Oti

Kaga, Inc. v. South Dakota Housing Dev. Auth., 342 F.3d 871, 883 (8th Cir. 2003),

the plaintiffs must demonstrate that the objected-to action results in, or can be

predicted to result in, a disparate impact upon a protected class compared to a

relevant population as a whole. Id. (stating that plaintiffs “must show a facially

neutral policy has a significant adverse impact on members of a protected minority

group”). The Tenants made this showing. The Housing Authority argues on appeal

that the Tenants’ disparate impact claims fail because they did not offer evidence of

purposeful discrimination and did not demonstrate that similarly situated nonmembers of the class were subject to disparate treatment. The Tenants, however, did

not allege disparate treatment, they alleged disparate impact. Under United States v.

City of Black Jack, 508 F.2d 1179, 1184 (8th Cir. 1974), the Tenants “need prove no

more than that the conduct of the defendant actually or predictably results in

discrimination; in other words, that it has a discriminatory effect.” 

The Housing Authority also attacks the Tenants’ statistical proof as to disparate

impact. In doing so, the Housing Authority discusses the goal of reducing the density

of low income housing. This issue, however, is more appropriately considered under

the subsequent steps of the disparate impact claim burden shifting analysis. Focusing

only on arguments material to the Tenants' prima facie case, we believe that the

Housing Authority has failed to demonstrate clear error. The Tenant's proof

established a disproportionate impact upon minority class members whether we

examine the relevant waiting list population, the income-eligible population, or the

actual Charleston Apartment Tenants. The district court did not clearly err in finding

that the Tenants established a prima facie case.

Under the second step of the disparate impact burden shifting analysis, the

Housing Authority must demonstrate that the proposed action has a “manifest

relationship” to the legitimate non-discriminatory policy objectives and “is justifiable

on the ground it is necessary to” the attainment of these objectives. Oti Kaga, 342

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F.3d at 883. Here, the Housing Authority sought to justify its actions based upon a

need for low income housing density reduction, a need to eliminate a housing design

that contributed to a concentration of criminal activity and drug use, and a lack of

funding to make improvements. 

The district court determined as a matter of fact that these justifications were

pretextual because they were unsupported by evidence. Regarding low-income

population density, the district court found that the Housing Authority had

mischaracterized the density by overstating the number of low-income rental units

contained within the area under examination. Regarding crime and drug abuse at the

Charleston Apartments, the district court stated:

The evidence showed that the Housing Authority has had a one strike

policy for a number of years, that it has the right to evict and/or refuse

to rent to people involved in criminal activity, and that it can ban people

it considers troublemakers. [The Housing Authority] has rigorously

enforced these measures. [The Housing Authority] has also benefitted

from various crime reduction programs such as weed and seed and

community policing. The evidence showed that [the Housing Authority]

had taken numerous effective measures to control crime and drug

trafficking in the Charleston Apartments. The statistical evidence did

not support [the Housing Authority’s] assertion that crime was a

particular problem at the apartments.

Regarding funding, the district court noted that the Housing Authority’s records

demonstrated that the Charleston Apartments were financially stable, the Housing

Authority had multiple sources of untapped funding, and the Housing Authority’s

ability and election to pay down the loan belied its claim of severe financial

constraints.

On appeal, the Housing Authority offers little evidence to attack these findings.

It does not address the issues of crime and drug use. Regarding low income

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concentration, the Housing Authority argues that the district court failed to recognize

density reduction as a legitimate and Congressionally recognized goal. The Housing

Authority is correct that, in the abstract, a reduction in the concentration of low

income housing is a legitimate goal that has been recognized by Congress. See, e.g.,

42 U.S.C. § 1437p(d) (implementing the goal of reducing the concentration of lowincome public housing by providing that replacement housing is permitted on-site

following the demolition of obsolete housing “if the number of replacement public

housing units is significantly fewer than the number of units demolished”) (emphasis

added); id. at § 1437v (calling for “housing that will avoid or decrease the

concentration of very low-income families”). However, the Housing Authority

mischaracterizes the district court’s decision. The district court did not critique the

general goal of deconcentration. Rather, the district court found that the Housing

Authority had not shown a need for deconcentration in this instance, and in fact, had

falsely represented the density at the location in question in an attempt to do so.

These findings were not clearly erroneous.

Finally, the Housing Authority presents a general attack upon the district

court’s disparate impact decision, calling it impermissible interference by the judicial

branch in a legitimate, legislative, decision-making process carried out by the

Housing Authority. General separation of powers arguments such as this, presented

in the context of disparate impact claims, are misplaced. They ignore the fact that the

burden-shifting analysis and the judicial scrutiny commensurate in scope with the

rights alleged to have been infringed drove the creation of the burden shifting

framework and define the deference owed to legislative decisionmakers. However,

even if we were to find it appropriate to address this general argument outside the

scope of the burden-shifting analysis, the argument is without merit on the present

facts. Our treatment of the claims related to the loan agreement and the Preservation

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Act demonstrate that the proposed action in this case was not, in fact, a legitimate

legislative action.

We affirm the district court as to Counts IX and X the Tenants’ Complaint.

VI. Injunctive Relief.

In sum, we affirm all of the district court decision, with the exception that we

believe that the Housing Authority, as well as the tenants, should be given an

opportunity to present additional evidence as to the appropriate relief to be granted

in this case. We do not imply that the district court should not reimpose the same

injunction that was previously granted. However, it is an unfortunate fact of litigation

that the passage of time can often materially change circumstances that may have

existed at the time the original relief was granted. This may be such a case. 

On remand, the district court may accept evidence of current conditions at the

apartments and evidence regarding proposals for redevelopment. Further, alternative

proposals for revitalization of the Charleston Apartments may present opportunities

that will affirmatively further fair housing in a more positive fashion than

reoccupancy of the existing apartments. Accordingly, we remand to the district court

for reconsideration of its order of injunctive relief.

We affirm in part and remand for further proceedings consistent with this

opinion.

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