Court Opinion

ID: 9476338
Source: CourtListenerOpinion
Date Created: 2023-08-05 05:53:25.980699+00
Date Added: 2024-06-11T17:45:15.588664
License: Public Domain

WILL, Senior District Judge,
dissenting:
The plaintiffs are residents of the Fort Dupont Housing Project in southeast Washington, D.C. Their complaint, the allegations of which, as the majority acknowledges, we must accept as true, states that the District of Columbia’s local public housing authority (PHA) has deliberately engaged in a systematic practice of vacating units and refusing to maintain Fort Dupont so as to create a fait accompli and thereafter to obtain HUD’s approval to demolish an abandoned and uninhabitable project. The complaint further alleges that HUD has failed to hold the District to the statutory prerequisites for demolishing public housing property. The only question presented is whether these allegations state a cause of action against the District under 42 U.S.C. § 1983 for violating the Housing Act of 1937, 42 U.S.C. § 1437p, and against HUD under the Administrative Procedure Act, 5 U.S.C. § 706, for unlawfully withholding agency action.
The majority holds that the district court properly dismissed the complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim. Because I believe the Housing Act clearly requires a local housing authority to obtain HUD approval before it may constructively demolish a public housing project by evacuating the tenants and abandoning the project, I dissent.
I.
Section 1437p of the Housing Act provides that the Secretary “may not approve” a PHA’s application for demolition of a public housing project or portion thereof unless the Secretary has determined that the project or the portion “is obsolete as to physical condition, location, or other factors, making it unusable for housing purposes, or no reasonable program of modifications is feasible to return the project or portion ... to useful life.” 42 U.S.C. § 1437p(a)(1). The Act further provides that the Secretary “may not approve” *666a demolition application unless the PHA has developed the application “in consultation with tenants and tenant councils, if any, who will be affected by the demolition,” 42 U.S.C. § 1437p(b)(1), and will give assistance to “all tenants to be displaced as a result of the demolition or disposition.” Such assistance is to include seeing that displaced tenants are “relocated to other decent, safe, sanitary, and affordable housing, which is, to the maximum extent practicable, housing of their choice.” 42 U.S.C. § 1437p(b)(2).
All three members of this panel agree that § 1437p establishes preconditions to HUD approval of a PHA’s demolition application. I further agree with Chief Judge Wald that § 1437p provides a private cause of action against PHAs that engage in actual demolition without obtaining prior HUD approval. I would go one step further, however, and hold that § 1437p, if it is to be meaningful and effective, also prohibits a PHA, acting without prior HUD authorization, from condemning a project to death as effectively as if it were physically demolished by abandoning and neglecting it.
It is undisputed that the District PHA’s actions in vacating more and more units and refusing to maintain the remainder is resulting in the slow death of the Fort Dupont project without HUD approval. Chief Judge Wald concludes that nothing can be done about it until physical demolition actually commences. Judge Williams apparently believes that even then no one but HUD could do anything about it. I, on the other hand, believe § 1437p creates rights enforceable through 42 U.S.C. § 1983, and that the scope of the rights ereated necessarily extends to de facto demolitions. If it does not, the statutory scheme established by Congress requiring prior HUD approval and setting conditions for such approval can easily be avoided and is meaningless.
The plaintiffs’ allegations include the following: In 1977, HUD approved nearly half a million dollars in modernization funds for 28 units at Fort Dupont. The District PHA, rather than using these funds to rehabilitate the 28 units, waited four years and then applied for HUD approval to demolish them. By 1983, the District had revised its application to request demolition of 112 units. No one disputes that in filing these applications the District and its PHA did not comply with the statutory prerequisites of tenant consultation and relocation.1 HUD informally so advised them although it has not in the intervening five years formally rejected the applications. The applications are theoretically still pending although all involved recognize that they are defective.
By January 1984, the District had vacated 74 of the 112 units for which it was nominally seeking HUD demolition approval. A year later the District, through its PHA, began to relocate the remaining 38 families. Families that refused to move were threatened with eviction. Some received notices to quit. On May 30, 1985, District officials told 47 more Fort Dupont families to leave their homes. This brought the vacancy rate at Fort Dupont’s 300 units to 159, over fifty percent.
The record shows that the District’s failure to rent and maintain the vacant, units has led to increased vandalism and a gener*667al deterioration of all the properties. One expert observer commented that “conditions of the abandoned buildings are so deplorable that it is hard to imagine that a private owner could escape fines or imprisonment for the unrectified violations that exist.” Affidavit of Donald F. Humphrey, supra n. 1.
The plaintiffs allege more, however, than an unwise District policy disadvantaging them. They contend that the District has pursued a deliberate policy of evacuation and neglect that will lead inevitably to the obsolescence, abandonment and physical demolition of Fort Dupont. Cf. Cole v. Lynn, 389 F.Supp. 99, 105 (D.D.C.1975) (in action challenging HUD demolition approval, agency required to keep project in good repair pendente lite to prevent vacancies and vandalism from “effectively accomplishpng] demolition by a process of erosion"), aff'd, 571 F.2d 590 (D.C.Cir.1977), rev’d on other grounds, 441 U.S. 39, 99 S.Ct. 1572, 60 L.Ed.2d 28 (1979). In the plaintiffs’ view, the failure to maintain and the evacuation of Fort Dupont tenants reflect a systematic policy designed to render this federally funded housing project “unusable for housing purposes.” 42 U.S.C. § 1437p(a)(1). The purpose of the District’s policy, the plaintiffs allege, is to clear the way for the ultimate actual demolition of an abandoned Fort Dupont.
From our review of the plaintiffs’ allegations — which I again point out we are constrained to accept as true in reviewing a dismissal for failure to state a claim — it should be clear that this is not a run-of-the-mill landlord-tenant dispute. As I believe the following sections demonstrate, this case involves a deprivation of rights secured by federal law and has implications going to the heart of the Housing Act and the public housing program across the nation.
II.
To determine whether § 1437p creates rights enforceable through a lawsuit under § 1983, we need look no further than the Supreme Court’s recent decision in Wright v. City of Roanoke,- U.S.-, 107 S.Ct. 766, 93 L.Ed.2d 781 (1987). In Wright, the Court considered whether a separate provision of the same Housing Act could be enforced through § 1983. Section 1437a of the Act provides that a low-income family “shall pay as rent” a specified portion of its income. HUD had consistently considered “rent” to include a reasonable utilities allowance. When the City of Roanoke’s PHA imposed a utilities charge that was not reduced according to the statutory formula, the tenants sued under § 1983.
The Supreme Court began its analysis by reciting the general rule of Maine v. Thibotout, 448 U.S. 1, 100 S.Ct. 2502, 65 L.Ed.2d 555 (1980), that § 1983 is available to remedy violations of federal statutes. It then reviewed the two exceptions to Thibotout: (1) “where Congress has foreclosed [§ 1983] enforcement of the statute in the enactment itself,” 107 S.Ct. at 770 (citing Smith v. Robinson, 468 U.S. 992, 104 S.Ct. 3457, 82 L.Ed.2d 746 (1984); Middlesex Cty. Sewerage Auth. v. National Sea Clammers Ass’n, 453 U.S. 1, 101 S.Ct. 2615, 69 L.Ed.2d 435 (1981)); and (2) “where the statute did not create enforceable rights, privileges or immunities within the meaning of § 1983.” Id. (citing Pennhurst State School and Hosp. v. Halderman, 451 U.S. 1, 101 S.Ct. 1531, 67 L.Ed.2 694 (1981)). The Court held that neither of these exceptions was applicable to § 1437a. While the statutes at issue in Sea Clammers and Smith v. Robinson provided specifically for private judicial remedies, indicating a congressional intent to displace the § 1983 remedy, the Court found “nothing of that kind [in § 1437a] or elsewhere in the Housing Act.” 107 S.Ct. at 773 (emphasis added). On the question of enforceability, the Court noted that § 1437a spoke in mandatory language and that any vagueness in its terms was cured by the implementing regulations. “In our view,” the Court concluded, “the benefits Congress intended to confer on tenants are sufficiently specific and definite to qualify as enforceable rights under Pennhurst and § 1983, rights that are not, as respondents *668suggest, beyond the competence of the judiciary to enforce.” Id. at 775.2
Wright removes any doubt that the Housing Act itself does not foreclose resort to § 1983, a point on which Chief Judge Wald agrees. Ante, at 654 n. 3. More important, Wright rejects the method of statutory interpretation .employed by today’s majority in determining whether § 1437p creates enforceable rights.
The majority puts heavy reliance on dicta in Pennhurst declaring that states partid1 pating in federal grant-in-aid programs must be given adequate notice of the obligations they assume by signing up. Finding that § 1437p establishes “conditions precedent” rather than “independent duties,” ante, at 659, the majority concludes that the statute is insufficiently specific to put states on notice of any obligations they may owe to public housing tenants. Significantly, Wright contains no mention of this supposed notice requirement. The reason is that there is no such requirement when the statute at issue uses mandatory, rather than merely precatory, language. See School Bd. of Nassau Cty. v. Arline, — U.S. -, 107 S.Ct. 1123, 1130 n. 15, 94 L.Ed.2d 307 (1987) (distinguishing Pennhurst on similar grounds). Unlike the statute in Pennhurst which stated mere congressional “findings,” the statute in Wright sets forth specific obligations. In such circumstances, there is no risk that a state could be lulled into believing that it is getting something for nothing. Cf. Pennhurst, 451 U.S. at 25, 101 S.Ct. at 1544.
Like the Wright statute and unlike the Pennhurst statute, § 1437p speaks in mandatory terms. Its directive cannot be interpreted as being merely advisory or precatory. As in Wright, “[t]he intent to benefit tenants is undeniable.” 107 S.Ct. at 774. By virtue of the statute and the applicable regulations, the District and its PHA were on notice that their acceptance of federal funds would limit their authority to abandon Fort Dupont and cause its destruction without prior HUD approval. Nothing in the statute, the legislative history or the applicable regulations would warrant a PHA in believing it could take all the steps in a demolition plan such as withholding maintenance, evicting all the tenants, permitting the units to become uninhabitable, and allowing vandalism, without HUD approval, so long as no physical demolition took place.
Rather than searching for indicia of “notice,” the Wright Court asked whether § 1437a conferred benefits that were “beyond the competence of the judiciary to enforce.” 107 S.Ct. at 775. To determine enforceability, the Court examined the implications of the statutory language and HUD’s implementing regulations. The Court concluded that the benefits conferred by § 1437a as supplemented by the regulations were “sufficiently specific and definite to qualify as enforceable rights under Pennhurst and § 1983.” Id.
The Wright Court’s analysis is fully applicable to this case. Section 1437p speaks in terms of restricting the Secretary's discretion, but it obviously does more than that. At a minimum § 1437p also requires PHAs to comply with the obsolescence, tenant consultation, and relocation provisions of the Act before engaging in demolition. Any other interpretation would mean that as long as a PHA did not make the mistake of asking HUD for its approval in advance, it could do whatever it pleased, including displacing tenants pursuant to a demolition plan without providing for appropriate relocation. That would be an outlandish interpretation of the Act. It would create a loophole in the statutory scheme that would effectively repeal it.
While the statute itself plainly contemplates that PHAs will obtain prior HUD approval, the implementing regulations make the requirement explicit. In particu*669lar, 24 C.F.R. § 970.8, provides that “Written approval by HUD shall be required before the PHA may undertake any transaction involving demolition or disposition.” Another section, 24 C.F.R. § 970.5(a), states that “Tenants who are to be displaced as a result of demolition ... shall be replaced to other decent, safe, sanitary and affordable housing.” To dismiss these provisions as “basically tracking] the statutory terms,” as does the majority, ante, at 661 n. 13, is to concede that the statute does what the regulation does; that is, it imposes an affirmative duty on PHAs not to abandon public housing projects unless (1) they are obsolete, (2) the PHA has consulted with tenants, (3) the PHA has made appropriate arrangements for tenants’ relocation, and (4) HUD has given its approval. Correspondingly, the statute creates in tenants a right to keep their public housing tenancies so long as the PHA has failed to comply with these statutory prerequisites. Since that right is specific, definite, and unambiguous, it is fully amenable to judicial enforcement. Wright, 107 S.Ct. at 775.
Judge Williams is not bothered by an interpretation of the Act that would impose conditions on HUD’s demolition approval authority while permitting PHAs to avoid the conditions by not asking for HUD approval. According to Judge Williams, Congress must have “intended that HUD would secure a promise from the PHAs not to demolish” without prior HUD approval. Ante, at 664 (Williams, J., concurring). With all due respect, this bit of congressional mind-reading is not supported by anything in the statute, the legislative history, or the regulations. Nor does HUD’s standard form Annual Contributions Contract (“ACC”), used in thousands of HUD agreements with PHAs, contain such a provision. The ACC provision Judge Williams relies on — requiring PHAs to abide by all HUD regulations — adds nothing to his analysis, since the regulations are every bit as effective with or without the contractual provision.
Moreover, Judge Williams’ conclusion does not follow from his premises. If it was indeed the “congressional will” that PHAs obtain HUD approval before engaging in demolitions, ante, at 665 (Williams, J., concurring), then it simply does not matter whether the regulations, rather than the statute itself, are the immediate source of the obligation. Wright teaches that regulations promulgated under the Act may provide the requisite specificity for enforcement under § 1983.
After Wright, there can no longer be any question that the Housing Act, including § 1437p, secures federal rights. Since the exceptions of neither Pennhurst nor Sea Clammers apply, the general rule of Thibotout is controlling and § 1437p is actionable through § 1983.
III.
If § 1437p creates an enforceable federal right, we must next consider whether de facto demolitions fall within the scope of the right created. "De facto demolition,” as the plaintiffs use it, is simply a shorthand form denoting the deliberate abandonment of public housing units to render them uninhabitable and therefore subject to demolition. The phrase itself should not scare us off.
Chief Judge Wald, conceding that an actual demolition would be actionable, draws the line at the moment when the wrecking ball begins to swing. Ante, at 658 n. 7, 659-660 & n. 12. I find nothing in the congressional plan to support a distinction between actual and de facto demolitions. On the contrary, I find an unequivocal congressional preference for preserving and maintaining existing housing units whenever and wherever possible. See, e.g., S.Rep. No. 142, 98th Cong., 1st Sess. 38, reprinted in 1983 U.S.Code Cong. & Ad.News 1768, 1809 (“As long as a shortage of low rent housing persists, the Committee believes that every effort should be made to retain the present stock of public housing.”); Subcommittee on Housing and Community Development of the Committee on Banking, Finance and Urban Affairs, 98th Cong., 2d Sess., Compilation of the Domestic Housing and International Recovery and Financial Stability Act of 1983, at 319 (Comm. Print 1984) (“The demolition or disposition of *670these extremely vital housing units should only be undertaken as a last resort and only if each and every condition for such transactions have been met.”).
Particularly worth noting is the following passage from the House Report on the bill that became § 1437p:
In deciding whether a project is substantially unoccupied, the Secretary should make a determination that the PHA has not engaged in a policy or practice of vacating the units or project to meet this requirement, to avoid paying relocation benefits or to avoid involving tenants in the disposition plan.
H.R.Rep. No. 123, 98th Cong., 1st Sess., at 37 (1983). Though Chief Judge Wald correctly points out that the “substantially unoccupied” requirement did not make it into the final version of the bill, ante at 659 n. 10, this observation does not undermine the above passage’s continuing authority as a statement of congressional intent. The Senate version made the demolition requirements more demanding, not less. While deleting the “substantially unoccupied” language of the House bill, the Senate version added provisions that are considerably more protective of tenants’ rights. Ordinarily, projects which are “unusable for housing purposes,” S. 1338, 98th Cong., 1st Sess. § 307 (1983) (enacted as 42 U.S.C. § 1437p) — as well as “obsolete as to physical conditions, location or other factors” such that “no program of modification is feasible to return [them] to useful life,” id. — are “substantially unoccupied” as well. The Senate modifications in the House bill in no way denigrate Congress' concern with PHAs deliberately manipulating or ignoring the Act’s demolition approval requirements. They certainly should not be read as authorizing PHAs to avoid the statutory obligation to secure HUD approval before destroying a housing project.
The reasonable implications of the Act itself are equally compelling. When Congress prohibits a result — such as the destruction of a housing project without prior approval — we should not assume that it would distinguish between different methods by which the same prohibited result is achieved. It seems clear to me that it would not. Whether a housing project is demolished swiftly by bulldozers or slowly by abandonment and neglect, the result is the same. In each instance, the available supply of low-income housing is diminished and the plight of our nation’s homeless and impoverished citizens is made more dismal. Actual demolitions at least have the virtue of being efficient. De facto demolitions have nothing to recommend them — nothing that is, except for those whom the law evasion advantages. Because I find no indication that Congress would distinguish between actual and de facto demolitions, prohibiting one and permitting the other without HUD approval even though both achieve the same result, I conclude that § 1437p requires a PHA to obtain HUD approval before it may engage in a concerted course of conduct designed to destroy public housing units whether by actual demolition or by rendering them uninhabitable.
IV.
The district court’s dismissal of the HUD defendants for failure to state a claim was also erroneous in my estimation. The gist of the plaintiffs’ claim against the HUD defendants is that they have “failed to prevent the District from engaging in de facto demolition at the project.” If the plaintiffs can prove that Fort Dupont is being evacuated and abandoned for the purpose of finally demolishing the project, as they may be able to do, I believe they may also have a claim under the Administrative Procedure Act against HUD for declining to prevent the de facto demolition.
Section 706(1) of the APA directs a reviewing court to “compel agency action unlawfully withheld.” Though HUD of course has a broad measure of enforcement authority, this authority has its limits. See, e.g., NAACP v. Secretary of Housing and Urban Development, 817 F.2d 149 (1st Cir.1987) (Secretary’s failure to administer Fair Housing Act in accordance with its basic policies held subject to judicial review under APA). For HUD to base its decision not to act on impermissi*671ble considerations, for example, would be an abuse of discretion. On the present record, we cannot say whether HUD’s reasons for standing idle for five years were legally permissible. Given the seriousness of the plaintiffs’ allegations against the District, however, I doubt that HUD could justify its inaction in the face of full knowledge that a de facto demolition was taking place without its approval. I therefore conclude that the dismissal of the HUD defendants was premature.
V.
Finding a cause of action for de facto demolitions would not open the door of the federal courts to all varieties of public housing disputes, as the majority seems to fear. On the contrary, I am concerned that the majority’s holding will open the door to PHAs across the country embarking on similar programs to eliminate public housing projects by failing to maintain them, evacuating or evicting the tenants, permitting units to be vandalized and, after the projects are clearly uninhabitable, applying to HUD for formal permission to knock them down. Under Judge Williams’ approach the results would be even worse: PHAs could actually demolish housing projects and no private person, only HUD, could prevent them. I find nothing in the Housing Act, its legislative history, the applicable regulations, or the decided cases which warrants much less compels such a tragic conclusion. If Congress wants to repeal the Housing Act, it can do so. Until it does, I believe judges and the courts have a duty to uphold it and not permit it to be scuttled by maneuvers such as those allegedly taking place here.
So far as this case is concerned, the plaintiffs, if permitted to proceed in district court, would face a difficult evidentiary burden. It is not easy to prove that a local government has engaged in a deliberate scheme to evade federal law. Nor is it easily proven that a federal agency abused its discretion. Even on the incomplete record before us, however, it is clear that the plaintiffs’ evidence far exceeds the minimum necessary for surviving a motion to dismiss. More important, the question before us is not whether the plaintiffs can prove their case; it is whether they should have an opportunity to do so. I would reverse and remand to give them that opportunity.
I would not hold, as the majority in effect does, that PHAs can embark on programs to get rid of public housing projects by a course of conduct similar to that of the District PHA here and if HUD, as here does nothing about it, no one else can until, if at all, their demolition is under way. This draconian result is inconsistent with the clear intent of Congress in enacting the Housing Act and establishing a public housing program.

. The plaintiffs also produced evidence indicating that the District could not comply with the Act’s obsolescence requirement. Donald F. Humphrey, former Director of the District of Columbia Housing Development Corporation, testified:
Based upon this consultant’s initial observation, Fort Dupont Dwellings including the 112 units do not appear obsolete as to physical condition, location, or other factors, making them unusable for housing purposes____
The damage done to these structures has been caused by owner, not resident, neglect. Because of the quality of the original construction used at Fort Dupont, it would be unreasonable to demolish the units. Had even reasonable protection been afforded the dwellings, as required by law, major structural damage probably would not have occurred. However, based upon my initial observations, even given the lack of maintenance, Fort Dupont including the 112 units which [the local PHA] has asked to demolish can be rehabilitated at much less cost than that of building comparable replacement housing.
Affidavit of Donald F. Humphrey, Exhibit VII to Plaintiffs’ Memorandum in Opposition to Defendants’ Motion to Dismiss.

. The Court further observed:
Lastly, it is said that tenants may sue on their lease in state courts and enforce their [§ 1437a] rights in that litigation. Perhaps they could, but the state-court remedy is hardly a reason to bar an action under § 1983, which was adopted to provide a federal remedy for the enforcement of federal rights.
107 S.Ct. at 774. This passage refutes the majority’s rather perfunctory dismissal of the plaintiffs' lease-based claim under 42 U.S.C. § 1437d(l), ante, at 653 n. 2.