GREATER NEW ORL EANS FA IR

HOUSING ACTION CENTER, et al.

P laintif fs, v. UNITED STAT ES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT and ROBIN KEEGA N, Executive D irec tor of the Louisi ana Recove ry Authority,

Defendan ts. UNITED STAT ES DIS TRICT COURT F OR THE DIS TRICT OF COLUM BIA

Civil Action 08-01938 (HHK )

MEMORAN DUM OP INION AND ORDER Be fore the Court are plaintiffs’ “Sec ond Motion for a Te mporary RestrainingOrde r and Preliminary

Injunction” [#62] and the “ Motion to S tay Procee dings PendingAppea l” of defe ndant Robin Keeg an, Executive Dire ctor of the L ouisiana Recove ry Authority

[#70] . Upon consideration of the motions, the opposit ions thereto, and the rec ord of this ca se, the Court conclude s that Kee g an’s motion should be denied a nd plaintiffs’ motion should be grante d. I The ba ckg round of this ca se is set out in the Court’s memorandum opinion explaining the
rea sons for its denial of plaintiffs’ first motion for a tempora ry restra ining or der ( “TRO”) and preliminary

injunction. See Greater New Orleans Fair Hous. Action Ctr. v. U.S. De p’t of Hous. and Urban Dev

. , — F. Supp. 2d —, 2010 WL2718164, at *1-2 (July 6, 2010). The Court will not repe at that bac kground her e except to brief ly summarize that Keeg an’s a g ency is tasked with distributing funds appr opriated by Congr ess to individuals whose homes wer e dama g ed byHurric anes Rita and K atrina. Plaintiffs asse rt that the for mula by which she doe s so under a portion of the program c alled Option 1 has a discriminatory

impact on Afr ican- Americ an homeowner s in New Or leans, in violation of the F air HousingAct, 42 U.S.C. § 3601 et seq . After the Court denied plaintiffs’ motion for a TRO and pr eliminary injunction, plaintiffs filed an interlocutory

appea l to the Court of Appea ls for the D.C. Circuit. That a ppeal is pending . On J uly 21, 2010, plaintiffs filed a se cond motion for a T RO, seekingto enjoin Keeg an fr om disbursing initial Road Home Program a war ds to Option 1 applicants using a formula that take s into account the pr e-storm va lue of a n individual’s home. Kee g an opposes this motion and also seeks a stay of this case pendingappellate revie w. II A. Motion to Stay The Court first addr esses Ke eg an’s motion to stay . Kee g an see ks a stay beca use, she
asser ts, the issues raised in plaintiffs’ se cond motion for a T RO are identical to those now be fore the D.C. Circuit on appea l. The Court disag ree s. Although the two motions are close ly related, the sec ond motion seeks differ ent re lief than did the fir st. Accor dingly , the D.C. Circuit will revie w the Court’s re solution of whether the broad r elief pla intiffs initi ally soug ht was wa

rra nted; the Court here addre sses whethe r the na rrow r elief the y

seek nowis appropriate. Ther efor e, the Court will not s tay

this case. B. Second Motion f or a TRO and Pre lim inary Injun ction This court may

issue a pre liminary

injunction only

when the mova

nt demonstrates: (1) “a substantial likelihood of success on the me rits”; (2) “ that it would suffer ir repa rable injury

if the injunction is notg rante d”; (3) “ that an injunction would not substantially injure other inter ested

2parties” ; and (4) “ that the public intere st would be furthe red by the injunction.” Mova Pharm

. Corp. v. Shalala , 140 F.3d 1060, 1066 ( D.C. Cir. 1998) (quoting CityFed Fin. Corp. v. Office of Thrif t Supervision , 58 F.3d 738, 746 ( D.C. Cir. 1995)). “The se fa ctors interr elate on a sliding scale and must be bala

nced a g ainst eac h other.” Serono Labs., Inc. v . Shalala , 158 F.3d 1313, 1318 (D.C. Cir. 1998). 1. Lik elihood of

Success on the Me rits The Court explained in its previous opinion that plainti ffs a re likely able to make out a prima fa cie c ase that the formula use d to calculate awa rds under Option 1 of the Road Home Prog ram violates the F air HousingAct. See Greater New Orleans , 2010 WL2718164, at *3. Neve rtheless, the Court de termined that plaintiffs did not have a likelihood of succ ess on the merits of their c ase be cause , under a line of ca ses expanding upon Ex parte Young , 209 U.S. 123 (1908), the Court doe s not have jurisdiction to provide the r etroa ctive re lief—spec ifically , corr ection of a

war ds alrea dy

disbursed—plaintiffs ultimately soug ht. See id. at *4-6. Plaintiffs’
curr ent motion, however , only seeks a n injunction that would allow them ultim ately to obtain the limit ed re lief the Court explained in a Clarifica tion of an ea

rlier or der, issued June 4, 2010 [#52] , it has jurisdiction to provide. Specifica lly , they ask that Ke eg an be e njoined from disbursing future, initial Road Home Program a war ds under Option 1 base d on a for mula that takes into
acc ount the pre- storm value of the applicant’ s home. In this way , plaintiffs seek to pr eser ve the claims of those individuals who have not y et re ceive d awa rds. Kee g an disputes the Court’s deter mination that plaintiffs have submitted evidenc e suff icient to show that they

would likely

be able to make out a prima fa cie c ase of rac ially discriminatory

impact. B ut the Court finds no
rea son to reconside r its ruling a s to that issue, especia lly wher e Ke eg an has still provided neither

3evidenc e contr adictingplaintiffs’ conte ntions nor an explanation of the re ason for takingprestorm home values into ac count. B eca use plaintiffs will likely

be able to show after

discovery that the Option 1 formula is unlawf ul and in the abse nce of

an impediment to succe ss where plaintiffs ultimately

seek only

prospec tive relief

, the Court conclude s that plaintiffs have a likelihood of preva iling on the mer its of their Fa ir HousingAct cla im as to Option 1 awards tha t have not yet bee n distributed. 2. Irre parable inju ry For the re asons explained in this C ourt’s prior r ulings a nd as re fer ence d above, only individuals who are e ntitled to but have not y et re ceive d initial Option 1 gra nts may bringsuit on the theorie s plaintiffs advanc e. As Ke eg an continues to distribute aw ards, homeowners who
rec eive them lose the ir ability to challeng e what plaintiffs alleg e is a ra cially discriminatory formula. Ac cording ly , the Court finds that prospec tive Road Home Program re cipients would fac e irre para

ble injury wer e it not to gr ant the injunction soug ht. 3. Sub stantial in jury to ot her partie s The Court ac knowledg es that g rantingplaintiffs’ motion may delay the distribution of
awa rds to some homeowne rs, and f or that re ason, this fac tor weighs ag ainst doing so. The Court notes, howeve r, that plaintiffs see k narr ow re lief—their pr oposed orde r spec ifically provides that Kee g an “ma

y continue to ca lculate a

nd disburse g rant a

war ds in a manner

that does not utiliz e the pre -storm value of

the bene ficiar

y ’s home as a

criter ion,” Pls.’ 2d Mot. for TRO, Proposed Orde r at 1—so the injunction nee d not delay all Option 1 awar ds and will not interfer e with the administration of any

other portion of the Road Home Program.

44. P ubl ic intere st

As noted in the Court’s pre vious opinion, i t is in t he public intere st to remedy housing discrimination as well as to promptly disburse funds for

the purpose of

helpingthose sever ely harme d by

hurrica nes that occ urre d y ear s ag o. This fac tor there fore does not weigh strong ly on the side of e ither par

ty ’s position. 5. Conclusion Havingweig hed the f

actor s that must be considere d when de terminingwhether to gr ant injunctive relief

, the Court conclude s that it is appropriate to grant the injunction plaintiffs see k here . Plaintiffs are likely to succe ed on the merits of their Fa ir HousingAct cla im as to the Option 1 awar ds not y et disbursed, individuals who have not rec eived a war ds will suffer irrepa rable injury

to their ability

to bringsuch cla ims if they rec eive a war ds based on the alleg edly discriminatory

formula, a

nd neither the interests of third pa rties nor the public inter est outweig h the re asons to g rant the injunction. III For the fore g oing r easons, it is this 16 day of August 2010, hereby t h ORDERED that Kee g an’s motion for a stay pendingappellate revie w [#70] is DENIED; and it is further ORDERED that plaintiffs’ motion for a se cond TRO and pr eliminary injunction [ #62] i s GR ANTED . Acc ording ly , Kee g an, or a ny succe ssor offic er, is prohibited fr om disbursing a ny
awa rd under the Road Home Program usingthe pre -storm value of the home as a

criter ion for calc ulating the amount of such a war d. Under

the terms of this orde r, Ke eg an may continue to calc ulate and disburse Road Home Program funds in a manner that does not take into ac count the

5pre- storm value of the rec ipient’s home. This injunction shall remain in eff ect until the Court issues a dec ision on the merits or order s otherwise.
Henr y H. Kenne dy , J r. United States District J udg e

6