Court Opinion

ID: 5840525
Source: CourtListenerOpinion
Date Created: 2022-01-12 23:00:58.570333+00
Date Added: 2024-06-11T08:43:45.178270
License: Public Domain

UNITED STATES DISTRICT COURT
                             FOR THE DISTRICT OF COLUMBIA

____________________________________
                                    )
IVY BROWN, et al.,                  )
                                    )
            Plaintiffs,             )
                                    )
      v.                            )                Civil Action No. 10-2250 (PLF)
                                    )
DISTRICT OF COLUMBIA,               )
                                    )
            Defendant.              )
____________________________________)

                                    OPINION AND ORDER

               Plaintiffs have offered in evidence Plaintiffs’ Exhibits 879 (“Pl. Ex. 879” or “OIG

Report”), a September 2021 report prepared by the District of Columbia Office of the Inspector

General (“Inspector General”). See Plaintiffs’ Brief Seeking the Admission of Certain Exhibits

(“Pl. Brief”) [Dkt. No. 427] at 1-6; see also Plaintiffs’ Reply in Support of Their Brief Seeking

the Admission of Certain Exhibits [Dkt. No. 431]. The District objects to the admission of the

OIG Report, arguing that it is both irrelevant and inadmissible hearsay. See District’s Response

to Plaintiffs’ Brief Seeking the Admission of Certain Exhibits [Dkt. No. 430] at 1-4. After

careful consideration of the OIG Report and the parties’ written and oral arguments, the Court

concludes that Plaintiffs’ Exhibit 879 should not be admitted in evidence.

                                      I. THE OIG REPORT

                The OIG Report at issue is entitled “Department of Housing and Community

Development [(“DHCD”)]: DHCD Did Not Effectively and Efficiently Use the Housing

Production Trust Fund [(“HPTF”)] to Produce Affordable Housing Units for Extremely
Low-Income [(“ELI”)] Households.” Pl. Ex. 879 at 1. The Inspector General issued the OIG

Report after conducting an audit to assess the “production and preservation of affordable housing

in the District of Columbia.” Id. at 3. 1 In the OIG Report, the Inspector General makes multiple

factual findings and offers twenty recommendations for DHCD to “identify and address

noncompliance and control weaknesses.” Id. at 3-4, 12-22. For example, the OIG Report notes

that “DHCD missed its statutory goals for disbursing HPTF resources to produce and preserve

affordable housing units for ELI households,” improperly allocating $81.7 million in HPTF

resources to produce and preserve affordable housing units for very-low income (“VLI”) and

low-income (“LI”) households instead of ELI households. Id. at 3-4, 14-15. 2 The OIG Report

also notes that DHCD occasionally disbursed additional resources for housing projects without

ensuring that a commensurate number of additional affordable housing units were built, that

“monthly rents for some reserved HPTF units improperly exceeded the maximum allowable rent

limits that DHCD published,” and that in some instances “reserved units set aside for one

targeted population [e.g., LI households] were utilized by a different targeted population [e.g.,

ELI households].” See id. at 4, 15, 18-20.

               Plaintiffs argue that the OIG Report is relevant to the issues before the Court

because the District of Columbia defends against plaintiffs’ claims “in part by raising housing

issues” and because the OIG Report shows “that the District has failed to carry out its mandate

requiring affordable housing for members of the Plaintiff class.” Pl. Brief at 3. To be sure, the

       1
               Page number citations to the OIG Report refer to the pages of the PDF document
provided to the Court.
       2
               “According to D.C. Code §§ 42-2802(b-1)(1)-(2), at least 50 percent of the funds
disbursed from the HPTF during a fiscal year shall be used to fund the creation and preservation
of affordable housing units for extremely low-income (ELI) households.” Pl. Ex. 879 at 3.

                                                 2
District has argued that both named plaintiffs, Ivy Brown and Larry McDonald, have been

unable to transition to the community not through any fault of the District’s but rather because

they have been unable to secure adequate, affordable housing. See District’s Trial Memorandum

(“Def. Trial Memo.”) [Dkt. No. 412] at 2-3; see also Trial Transcript at 603:22-604:10, 719:24-

720:14, 932:6-19 (testimony of Director Laura Newland, explaining that lack of suitable housing

may justify case closure for individuals receiving transition care assistance from the D.C.

Department of Aging and Community Living). And, as plaintiffs note, the District has argued

and “elicited testimony that Plaintiffs’ request for a minimum number of transitions in each of

the next four years is unreasonable due to an inadequate supply of affordable housing.” Pl. Brief

at 3; see, e.g., Trial Transcript at 3944:4-24. With that as the rationale for admitting the OIG

Report in evidence, the first – and most basic – question is whether the OIG Report is relevant to

the issues on remand.

                                         II. RELEVANCE

                                        A. Legal Standard

               “‘Relevant evidence is admissible,’ unless an applicable authority provides

otherwise, whereas ‘[i]rrelevant evidence is not admissible.’” Democracy Partners, LLC v.

Project Veritas Action Fund, Civil Action No. 17-1047, 2021 WL 4785853, at *2 (D.D.C.

Oct. 14, 2021) (alteration in original) (quoting FED. R. EVID. 402). “Evidence is relevant if: (a) it

has any tendency to make a fact more or less probable than it would be without the evidence; and

(b) the fact is of consequence in determining the action.” FED. R. EVID. 401. The proponent of

admitting an item of evidence has the initial burden of establishing relevance. See Dowling v.

United States, 493 U.S. 342, 351 n.3 (1990); United States v. Gonzalez, 507 F. Supp. 3d 137,

147 (D.D.C. 2020). A court “may exclude relevant evidence if its probative value is

                                                  3
substantially outweighed by a danger of one or more of the following: unfair prejudice,

confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting

cumulative evidence.” FED. R. EVID. 403. “[W]eighing any factors counseling against

admissibility is a matter first for the district court’s sound judgment.” Bazarian Int’l Fin.

Assocs., LLC v. Desarrollos Aerohotelco, C.A., 315 F. Supp. 3d 101, 128 (D.D.C. 2018)

(alteration in original) (quoting Spring/United Mgmt. Co. v. Mendelsohn, 552 U.S. 379, 384

(2008)). The OIG Report‘s relevance therefore turns on whether it – or any portions of it –

proves a “fact of consequence” in the action. FED. R. EVID. 401; see also FED. R. EVID. 401

advisory committee notes to 1972 proposed rules (“Relevancy is not an inherent characteristic of

any item of evidence but exists only as a relation between an item of evidence and a matter

properly provable in the case.”).

               The relevance inquiry is simplified here because the D.C. Circuit has instructed

that the availability of affordable and accessible housing is a “fact of consequence.” In

remanding the case to this Court, the court of appeals noted that “[t]he lack of housing is relevant

to whether the pace of movement from the waiting list is ‘reasonable,’ which, in turn, is relevant

to whether the District has an ‘adequate Olmstead Plan’ in place.” Brown v. District of

Columbia, 928 F.3d 1070, 1087 (D.C. Cir. 2019). And as the District noted in its pretrial brief,

see Def. Trial Memo at 14, the D.C. Circuit also provided that a finding of a lack of available

housing would likely render plaintiffs’ third provision of their proposed injunction “so costly as

to be unreasonable.” Brown v. District of Columbia, 928 F.3d at 1085 n.13; see also id. at 1078

(describing the “fundamental alteration” defense). Thus, to the extent that the OIG Report – or

any portion of it – tends to prove or disprove a lack of available housing in the District of

Columbia, it is relevant.

                                                  4
     B. Certain Portions of the OIG Report Are Plainly Irrelevant to the Issues on Remand

               A careful review of the OIG Report makes clear that the vast majority of its

findings and recommendations is wholly unrelated to the question before the Court on remand.

For example, the OIG Report faults DHCD for failing to document certain decisionmaking and

loan portfolio records, for failing to adopt policies and procedures for DHCD employees’

disclosure of potential conflicts of interest, for failing to compare proposed project cash flows to

actual cash flows, for failing to implement periodic compliance reviews of disbursed loans and

tenant income eligibility reviews, and for failing to timely collect on outstanding loans. See Pl.

Ex. 879 at 12-13, 15-21. Although these findings may relate to DHCD’s internal processes and

its proper administration of the HPTF, they do not make it more or less probable that there is a

lack of affordable housing in the District of Columbia.

               Even the OIG Report’s major finding – that “DHCD missed its statutory goals for

disbursing HPTF resources to produce and preserve affordable housing units for ELI

households,” Pl. Ex. 879 at 3, 14-15 – is only tangentially related to a lack of housing available

to class members. The HPTF is “a special revenue fund . . . that provides gap financing for

projects affordable to low and moderate income households.” Housing Production Trust Fund,

DEP’T OF HOUS. & CMTY. DEV., https://dhcd.dc.gov/page/housing-production-trust-fund (last

visited Jan. 10, 2022). DHCD administers the HPTF to develop affordable housing in the

District of Columbia. See 2021-2024 Olmstead Plan [Dkt. No. 406-1] at 11-12. Assuming that

the findings in the OIG Report are accurate, the fact that DHCD disbursed fewer funds than

statutorily required to develop housing opportunities for extremely low-income households does

not help to prove that there is a lack of affordable housing or – most relevant – that there is less

housing available to plaintiff class members. Indeed, the OIG Report does not speak to the

                                                  5
actual quantity of affordable housing in the District of Columbia at all. Moreover, as the OIG

Report notes, some ELI households may rent units that are not specifically “set aside” for ELI

households by using housing vouchers. See Pl. Ex. 879 at 18-20.

               In sum, whether DHCD’s decision to fund some housing projects over others does

not tend to establish that there is a lack of housing available to class members. Instead, the

conclusion that there is a lack of available housing depends on a chain of inferences and

assumptions, including (i) that there are no other new sources of affordable housing for class

members; (ii) that ELI households are by and large precluded from accessing LI and VLI

housing units funded by DHCD; and (iii) that the Inspector General’s audit of a limited period of

time and a single agency is demonstrative of the general availability of affordable and accessible

housing in the District of Columbia.

               Given the above, the Court will exclude without further comment the following

recommendations and their related findings because they are plainly irrelevant to the issues

before the Court: Recommendations 1, 3, 4, 7-10, 12-14, and 16-20. See FED. R. EVID. 402. The

Court now turns to those recommendations and related factual findings in the OIG Report that

were discussed at trial as being arguably relevant to the issues on remand: Recommendations 2,

5, 6, 11, and 15. See Trial Transcript at 4002:17-19, 4006:5-16.

                        C. Arguably Relevant Portions of the OIG Report

               Recommendation 2 provides: “Develop a plan to evaluate DHCD’s current

selection criteria to better align selection criteria with statutory requirements to produce and

preserve more units for extremely low-income households.” Pl. Ex. 879 at 14. This

recommendation is based on the finding that DHCD did not exclusively follow the

recommendation generated by the application of competitive selection criteria to project

                                                  6
proposals when choosing which projects to fund. See id. at 12-13 (noting that for the eight

housing proposals selected for funding by DHCD in FY 2020, “DHCD selected low-scored

proposals over higher-scored proposals” in each instance). As the OIG Report notes, this

departure from the selection criteria was made by the final decisionmaker, who treated the

“recommendations, scoring, and supporting documentation . . . [as] just some of the evaluative

factors” used to make the final decision. Id. at 13. According to the OIG Report, “[a]s a result

of DHCD not following its competitive process to select housing proposals, final housing

proposal selections were not made based on objective criteria included in the RFP process

designed to promote accountability and transparency.” Id. Rather than tending to prove a lack

of affordable housing, this section of the OIG Report merely summarizes a dispute within DHCD

about whether subjective or objective criteria are ultimately preferable to determine which

affordable housing projects should be funded. It therefore is irrelevant to the issues on remand,

and the Court will exclude Recommendation 2 and its related factual findings.

               Recommendation 5 provides: “Develop procedures to request and obtain a

required waiver from the Council [of the District of Columbia] prior to selecting and funding

projects when proposals received do not meet statutory funding requirements.” Pl. Ex. 879 at 15.

Recommendation 5 relates to the Inspector General’s major finding, namely, that DHCD did not

fulfill its statutory obligations to disburse at least 50% of the Housing Production Trust Fund to

produce housing opportunities for ELI households for four years. See id. at 14. DHCD

defended this outcome by arguing that it chose not to approve certain project proposals that

would have satisfied the statutory funding requirement because “[d]oing so would simply

recreate failed housing policy of old by concentrating deeply affordable units in certain parts of

the city.” Id. In the Court’s view, this recommendation and the factual findings upon which it is

                                                 7
based pertain to the funding of housing development projects, not to the related but attenuated

issue of the availability of affordable housing in the District of Columbia. As discussed above,

whether DHCD’s decision to fund certain development projects over others tends to prove that

there is a general lack of available housing – let alone housing for class members – requires the

Court to make several assumptions and inferences that are arguably specious. See supra

Section II.B. The Court therefore finds that Recommendation 5 and its underlying factual

findings are irrelevant.

                Even assuming that Recommendation 5 and the related findings of fact are

relevant, however, their probative value is limited and is substantially outweighed by the danger

of confusing the issues on remand in this case. See FED. R. EVID. 403. The D.C. Circuit has

instructed that the availability of housing is relevant to the extent that it is a limiting factor for

the pace of transitioning class members to the community and insofar as it would make

plaintiffs’ requested accommodations “so costly as to be unreasonable.” Brown v. District of

Columbia, 928 F.3d at 1085 n.13; see also id. at 1087. Yet plaintiffs seek to use the OIG Report

to argue a different point: that the District does not have an effectively working Olmstead plan

because the District has “fail[ed] to effectively and efficiently use the HPTF to produce

affordable housing units for extremely low-income households[,] demonstrat[ing] a lack of

commitment to utilize available resources to build or cause to be built affordable housing for the

Plaintiff class.” Pl. Brief at 3. This argument is far afield from plaintiffs’ stated claim that the

District has violated its obligations under Olmstead by failing to provide sufficient outreach and

transition care assistance – including assistance in finding suitable housing – to nursing home

residents. See Fourth Amended Complaint [Dkt. No. 162] at ¶ 135. Simply put, it would

transform plaintiffs’ claim from one about services and support provided to individuals seeking

                                                    8
to transition out of nursing homes to one about DHCD’s administration of a housing

development fund. The Court therefore will exclude Recommendation 5 and its corresponding

factual findings.

               Recommendation 6 provides: “Develop policies and procedures to ensure

additional affordable housing units are produced when project funding is increased.” Pl. Ex. 879

at 15. This recommendation is based on a finding that in some instances “DHCD substantially

increased the funding amount (after selection based on all submitted proposals) but did not

comparably increase the number of units being produced or preserved by that proposal.” Id. In

response, a DHCD official noted that the increase in cost was due to “construction cost increases

between the application and loan closing dates,” suggesting that the increase of funding was

necessary to maintain the number of affordable housing units initially proposed. Id. Thus, rather

than tending to prove a lack of available housing in the District of Columbia, Recommendation 6

instead seems to address the challenge DHCD faces to accurately estimate the costs of housing

development when granting project proposals. It therefore is irrelevant and will be excluded.

               Recommendation 11 provides: “Recoup from the landlord $114,528 per year in

unauthorized excess rents.” Pl. Ex. 879 at 19. This recommendation is based on a finding that

“monthly rents for some reserved HPTF units improperly exceeded the maximum allowable rent

limits that DHCD published.” Id. at 18 (noting, as an example, that a landlord charged and

collected higher rents on fourteen of nineteen affordable housing units in an apartment complex).

Setting aside whether this finding is accurate, see id. at 18-19 (DHCD responding that the

landlord correctly charged rent from the fourteen households, which were paying using tenant-

based housing vouchers), Recommendation 11 pertains to DHCD’s oversight of affordable

                                                9
housing landlords who have received HPTF funds, not to a lack of affordable housing. It

therefore is irrelevant and will be excluded.

               Recommendation 15 provides: “Develop procedures to ensure units are reserved

for specific targeted populations and are utilized by their intended population.” Pl. Ex. 879 at 20.

This recommendation is in response to the Inspector General’s finding that “[l]andlords did not

always follow annually published income and rent limits when approving tenant residency in

reserved [HPTF] units.” Id. On occasion, this resulted in individuals from certain income

classes using units produced for other income classes. Id. (noting instance where an ELI three-

person household resided in a unit reserved for a LI household). Again, this recommendation

addresses DHCD’s oversight of landlords who operate HPTF-funded housing; it does not

directly speak to the lack of affordable housing in the District of Columbia and therefore is

irrelevant. The Court will exclude Recommendation 15 and its underlying factual finding. 3

               In summary, having canvassed the OIG Report, the Court concludes that the

factual findings and recommendations are inadmissible under Rules 401, 402, and 403 of the

Federal Rules of Evidence. The Court also concludes that the remainder of Plaintiffs’ Exhibit

879, including the OIG Report’s executive summary, cover letter, and appendices are similarly

inadmissible. The Court therefore will exclude all of Plaintiffs’ Exhibit 879 from evidence. 4

       3
               If anything, Recommendation 15 tends to show that there is more housing
available for ELI households because they are not limited to ELI housing units. But what little
probative value Recommendation 15 may have to that end is substantially outweighed by the
danger of confusing the issues in this case. See FED. R. EVID. 403.
       4
               Because the Court finds that the OIG Report is inadmissible under Rules 401,
402, and 403 of the Federal Rules of Evidence, it need not address the plaintiffs’ argument that
the OIG Report is admissible under the hearsay exemption for party admissions or the public
records exception. See FED. R. EVID. 801(d)(2)(D), 803(8)(C).

                                                10
                                       III. CONCLUSION

               For the foregoing reasons, it is hereby

               ORDERED that Plaintiffs’ Exhibit 879 is inadmissible and shall be excluded from

evidence in this case.

               SO ORDERED.

                                                              /s/
                                                          ________________________
                                                          PAUL L. FRIEDMAN
                                                          United States District Judge

DATE: January 12, 2022

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