Court Opinion

ID: 6336228
Source: CourtListenerOpinion
Date Created: 2022-04-29 00:00:28.001614+00
Date Added: 2024-06-11T09:24:09.385234
License: Public Domain

Case: 20-20281     Document: 00516299452         Page: 1     Date Filed: 04/28/2022

              United States Court of Appeals
                   for the Fifth Circuit                       United States Court of Appeals
                                                                        Fifth Circuit

                                                                      FILED
                                                                  April 28, 2022
                                  No. 20-20281
                                                                 Lyle W. Cayce
                                                                      Clerk

   Kenneth Wayne Hawkins; Cheryl Brown Potts;
   Kimanisha Myles; Reba Curren Jeffery; Stephanie Winn;
   Loretta Gulley; Jeannie Ware; Jamie Wasicek;
   Shealisha Adams,

                                                           Plaintiffs—Appellants,

                                       versus

   The United States Department of Housing and Urban
   Development,

                                                           Defendant—Appellee.

                  Appeal from the United States District Court
                      for the Southern District of Texas
                           USDC No. 2:18-CV-3052

                    ON PETITION FOR REHEARING

   Before Wiener, Dennis, and Duncan, Circuit Judges.
   Wiener, Circuit Judge:*

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 20-20281     Document: 00516299452        Page: 2     Date Filed: 04/28/2022

         IT IS ORDERED that the petition for rehearing is DENIED. The
   opinion, filed October 13, 2021, is WITHDRAWN, and the following is
   SUBSTITUTED:
         Plaintiffs-Appellants (“Tenants”) alleged that they were living in
   substandard conditions in a Houston, Texas “Section 8” housing project.
   They sought relocation assistance from the Department of Housing and
   Urban Development (“HUD”), insisting that HUD was obliged under
   federal law to provide such assistance. When HUD chose to continue its
   contract with the housing project and declined to offer Tenants relocation
   assistance, they sued HUD to obtain it. Tenants also alleged intentional
   discrimination under the Fifth Amendment’s equal protection component.
         We agree with the district court that we lack jurisdiction for Tenants’
   Administrative Procedure Act (“APA”) and Fair Housing Act (“FHA”)
   claims because Tenants have not alleged a final agency action that is
   reviewable. We also agree on the merits that Tenants have failed to state a
   claim for which relief can be granted on their Fifth Amendment equal
   protection claim.
                                        I.
                                  Background
         Tenants are African-Americans who rent apartments in Coppertree
   Village, a privately owned complex in Houston. HUD’s relationship with
   Coppertree dates back to the early 1980s, when the agency first signed a
   housing assistant program (“HAP”) contract with Coppertree’s then-
   owner. HUD’s most recent renewal of its contract relationship with
   Coppertree was in 2013. HUD approved assignment of the contract to
   Coppertree’s current owner in 2015. The current owner was originally a
   named defendant in this lawsuit but has been dismissed voluntarily.
         The HAP contract requires the owner to maintain the rental units in
   a “decent, safe, and sanitary” condition. HUD regulations provide that the
Case: 20-20281          Document: 00516299452      Page: 3     Date Filed: 04/28/2022

   agency “will inspect” Section 8 housing “at least annually” and “at such
   other times as HUD may determine to be necessary to assure that the owner
   is meeting his or her obligation to maintain the units and the related facilities
   in decent, safe, and sanitary condition.”1
          Two HUD inspections (in June and September 2018) revealed
   “serious deficiencies” in many of Coppertree’s rental units and in the
   property’s common features. These wide-ranging problems included
   infestations of cockroaches and spiders, leaky roofs that spawned colonies of
   mold, widespread lack of operable locks, and missing or nonfunctioning
   smoke detectors. As a result, HUD issued two Notices of Default (“NOD”)
   to Coppertree’s owner. The NODs instructed the owner to take corrective
   action and warned that failure to comply could result in HUD exercising
   “any and all available remedies.” In response, Coppertree’s owner
   submitted a survey of the property and began to undertake repairs. The
   parties disagree about whether the repair efforts have resolved the many
   issues identified in the 2018 inspections.
          Tenants criticized HUD’s decision to maintain the HAP contract
   with Coppertree and the agency’s focus on correcting the deficiencies
   revealed by the inspections. Tenants also contended that, because
   Coppertree remained in a state of disrepair, HUD was obligated to provide
   “assistance for relocation” that would help them move elsewhere. They
   specifically alleged that HUD’s failure to issue vouchers to them was
   arbitrary and capricious under the APA.2 Tenants further alleged that
   HUD’s inaction amounted to race-based discrimination in violation of the
   Fair Housing Act3 and the equal protection component of the Fifth

          1
              8 C.F.R. § 886.323(d).
          2
              5 U.S.C. § 701 et seq.
          3
              42 U.S.C. § 3601 et seq.
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                                            No. 20-20281

   Amendment.4 Contrasting Coppertree with Section 8 properties elsewhere
   in Houston, Tenants alleged that HUD’s failure to provide Tenant
   Protection Vouchers was done with the discriminatory motive of
   “maintain[ing] racial segregation and . . . disadvantag[ing] a group of
   minority households.”
           HUD moved to dismiss Tenants’ claims under Rules 12(b)(1) and
   12(b)(6) of the Federal Rules of Civil Procedure. The district court granted
   HUD’s motion and dismissed the Tenants’ claims. We affirm.
                                                  II.
                                        Standard of Review
           We review a district court’s grant of a motion to dismiss de novo.5 “To
   survive a motion to dismiss, a complaint must contain sufficient factual
   matter which, when taken as true, states a claim to relief that is plausible on
   its face.”6 “A claim has facial plausibility when the plaintiff pleads factual
   content that allows the court to draw the reasonable inference that the
   defendant is liable for the misconduct alleged.”7
           A motion to dismiss that contests jurisdiction should be granted if
   “the court lacks the statutory or constitutional power to adjudicate the
   case.”8 The burden lies with the party asserting jurisdiction to establish “that
   jurisdiction does in fact exist.”9

           4
               See Washington v. Davis, 426 U.S. 229 (1976).
           5
               Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001).
           6
               Cicalese v. Univ. of Tex. Med. Branch, 924 F.3d 762, 765 (5th Cir. 2019) (cleaned
   up).
           7
               Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).
           8
             Home Builders Ass’n of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir.
   1998) (cleaned up).
           9
               Ramming, 281 F.3d at 161.

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                                               No. 20-20281

                                                   III.
                                        Final Agency Action
            The APA provides judicial review of “final agency action” only. 10 The
   Act defines “agency action” to include the “denial of relief,” a “failure to
   act,” and a “sanction,” which includes “withholding of relief.” 11 The FHA
   has no provision for review of agency action, so Tenants’ FHA claim depends
   on the APA’s judicial-review provisions.12 Our jurisdictional analysis
   therefore pertains equally to Tenants’ claims under the APA13 and the
   FHA.14
            As a general matter, two conditions must be satisfied for agency
            action to be ‘final’: First, the action must mark the
            ‘consummation’ of the agency’s decisionmaking process—it
            must not be of a merely tentative or interlocutory nature. And
            second, the action must be one by which ‘rights or obligations
            have been determined,’ or from which ‘legal consequences will
            flow.’15
            Tenants have not adequately alleged a specific HUD action that this
   court can review. They only contend that there is nothing further HUD
   would have to do to issue relocation assistance, yet the agency has not done
   so. HUD’s continued work to salvage its contract with Coppertree Village

            10
                 5 U.S.C. § 704; see, e.g., Veldhoen v. U.S. Coast Guard, 35 F.3d 222, 225 (5th Cir.
   1994).
            11
              5 U.S.C. § 551(10)(B), (13); see also id. § 701(b)(2) (incorporating these
   definitions into the judicial review chapter).
            12
            See Godwin v. Sec’y of Hous. & Urb. Dev., 356 F.3d 310, 312 (D.C. Cir. 2004)
   (FHA confers no cause of action against HUD); see also McCardell v. U.S. Dep’t of Hous. &
   Urb. Dev., 794 F.3d 510, 522 (5th Cir. 2015) (FHA does not waive state sovereign
   immunity).
            13
                 See 5 U.S.C. § 706(2)(A).
            14
                 See 42 U.S.C. § 3608(e)(5).
            15
                 Bennett v. Spear, 520 U.S. 154, 177–78 (1997) (citations omitted).

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                                             No. 20-20281

   does not prevent the agency from issuing relocation assistance. There is,
   therefore, no “‘consummation’ of the agency’s decisionmaking process”
   that this court can review. The district court correctly determined that it
   lacked jurisdiction over Tenants’ APA and FHA claims.
                                                  IV.
                               Racial and Ethnic Discrimination
           Tenants also claim that HUD’s withholding of assistance constitutes
   intentional discrimination on the basis of race and ethnicity, in violation of
   the Fifth Amendment to the Constitution. “[T]he Due Process Clause of the
   Fifth Amendment contains an equal protection component prohibiting the
   United States from invidiously discriminating between individuals or
   groups.”16 HUD concedes that the APA’s review provisions do not foreclose
   review of this constitutional claim.17
           “Proof of racially discriminatory intent or purpose is required” to
   show an equal protection violation.18 Discriminatory purpose “implies that
   the decisionmaker . . . selected or reaffirmed a particular course of action at
   least in part ‘because of,’ not merely ‘in spite of,’ its adverse effects upon an
   identifiable group.”19 Tenants may rely on circumstantial evidence (or
   allegations of such, at the pleading stage) to show discriminatory purpose.
   “Determining whether invidious discriminatory purpose was a motivating
   factor demands a sensitive inquiry into such circumstantial and direct
   evidence of intent as may be available.”20

           16
                Washington, 426 U.S. at 239.
           17
              See Webster v. Doe, 486 U.S. 592, 603–05 (1988) (holding § 701(a)(2) barred
   statutory but not constitutional claims of discrimination).
           18
                Vill. of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 265 (1977).
           19
                Pers. Adm’r of Mass. v. Feeney, 442 U.S. 256, 279 (1979).
           20
              Arlington Heights, 429 U.S. at 266; see also Veasey v. Abbott, 830 F.3d 216, 231
   (5th Cir. 2016) (listing types of evidence that may support discrimination claim).

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                                              No. 20-20281

          Tenants’ allegations of intentional discrimination rely on the fact that
   the housing units HUD subsidizes at Coppertree are in worse condition than
   HUD-subsidized units elsewhere in the Houston area. They allege that
   “Coppertree Village is located in a 0% White non-Hispanic census tract.
   Coppertree Village’ [sic] units are 87% occupied by Black or African
   American households.” Tenants further allege that HUD subsidizes housing
   in disproportionately white areas that does meet minimum standards, with
   comparable rent but vastly higher quality. Tenants reference as comparators
   several projects restricted to elderly tenants: six in the Woodlands, outside
   Houston, and two within the city limits—the only two out of forty-four
   located, in majority-white census districts. HUD does not own or operate
   those projects, but subsidizes tenants living there.
          HUD allegedly knows about these disparities but continues to make
   decisions that Tenants claim denies them relocation assistance to which they
   are entitled. Tenants characterize this disparate treatment as a “substantive
   departure” from HUD’s mission,21 and thus probative of discriminatory
   intent. We disagree.
          These allegations by Tenants fail to state a plausible claim of
   intentional racial discrimination. Even when taken as true, they show at most
   that HUD is aware of varying conditions in the numerous housing projects
   that it subsidizes in the Houston area. In no way, however, do these
   allegations support an inference that HUD has made any decision “‘because
   of,’ not merely ‘in spite of,’” different conditions.22 Tenants do not allege
   any procedural irregularities in HUD’s enforcement actions at Coppertree
   nor in its consideration of relocation vouchers for Coppertree residents.
   Tenants also fail to allege that HUD has provided relocation assistance to any
   similarly situated non-minority occupants. Tenants have failed to raise a

          21
               Cf. Veasey, 830 F.3d at 231.
          22
               Feeney, 442 U.S. at 279.

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                                   No. 20-20281

   plausible inference of discriminatory purpose, so the district court correctly
   dismissed their Fifth Amendment claim.
          AFFIRMED.

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