Court Opinion

ID: 9472597
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:05:19.432355+00
Date Added: 2024-06-11T17:43:02.146964
License: Public Domain

*467COFFEY, Circuit Judge,
dissenting.
The issue is this case is whether the defendant, the United States Department of Housing and Urban Development (“HUD”), may modify the 1979 “Amended Stipulation” between HUD and the plaintiff class, to provide that “[n]othing in this Amended Stipulation affects or interferes with [HUD’s] implementation of the TMAP program,” as enacted by Congress in 1980. The district court denied HUD’s motion to modify the “Amended Stipulation” and enjoined HUD from implementing its proposed TMAP regulations. See Ferrell v. Pierce, 560 F.Supp. 1344 (N.D.Ill.1983). In addition, the district court awarded attorney’s fees to the plaintiff class, finding that HUD had no “substantial justification” for modifying the “Amended Stipulation.” The majority upholds the district court’s decision, reasoning that HUD’s proposed TMAP regulations violate “the plain language” of the 1979 “Amended Stipulation” and also the congressional intent in enacting the TMAP program. A thorough review of the record reveals, however, that the majority’s holding directly contravenes the intent of Congress to implement the cost-saving TMAP program. The majority improperly engages in social legislation, substituting its views on the procedure that HUD must follow when providing temporary foreclosure avoidance relief, for those of Congress. I dissent.
The plaintiff class, as certified by the district court, consists of persons who purchased homes with FHA insured mortgages and “are currently or will in the future be in default on [such] mortgages.” In 1973, the plaintiff class filed this lawsuit alleging that HUD had failed to promulgate and enforce an effective foreclosure avoidance relief program in accord with 12 U.S.C. § 1715m (1976), which provided:
“Upon receiving notice of the default of any mortgage covering a one-, two-, three-, or four-family residence heretofore or hereafter insured under this chapter, the Secretary, in his discretion and for the purpose of avoiding foreclosure of the mortgage ... may acquire the loan and security therefor upon payment of the insurance benefits in an amount equal to the unpaid principal balance of the loan plus any unpaid mortgage interest plus reimbursement for such costs and attorney’s fees as the Secretary finds were properly incurred in connection with the defaulted mortgage and its assignment to the Secretary.”
In response to the plaintiffs’ allegations, HUD revised its Handbook for the Administration of the Home Mortgage Assignment Programs, setting forth new procedures for HUD officials to follow when acquiring a mortgage under 12 U.S.C. § 1715m. The Handbook basically provided that if a mortgagor in default satisfied certain eligibility requirements, HUD would accept an assignment of the mortgage, pay the mortgage in full at that time, and negotiate a relief plan with the mortgagor. In August 1979, the plaintiff class and HUD entered into an “Amended Stipulation,” approved by the district court as a consent decree in November 1979, providing in pertinent part:1
“3. HUD Handbook 4191.2, attached hereto as Appendix A, shall constitute binding instructions for implementation of the assignment program subsequent to entry of this order____ The provisions of the Handbook may be modified in accordance with the Department’s usual procedures. However, during the term of this Amended Stipulation the Department will not make any modification which would curtail the basic rights of mortgagors under the program now in existence. The Department will give notice to plaintiffs’ counsel prior to final action on any modification.”
In September 1980, Congress amended the foreclosure avoidance relief program of 12 U.S.C. § 1715m, to include the TMAP *468program. See Housing and Community Development Act, Pub.L. No. 96-399, § 341, 94 Stat. 1614 (1980) (The TMAP program was included in H.R. 7262 and codified in Pub.L. No. 96-399, with minor changes. See H.R.Conf.Rep. No. 96-1420, 96th Cong., 2d Sess., reprinted in 1980 U.S.Code Cong. & Ad.News 3617, 3668.). The clear intent of Congress in enacting the TMAP program was to implement a cost-saving alternative to the mortgage assignment program. The TMAP program, as designed by Congress, allows HUD to “make all or part of the monthly payments due under the mortgage” and thereby provide temporary foreclosure avoidance relief without acquiring the entire mortgage. According to the House Committee on Banking, Finance and Urban Affairs:
“Under existing law, the Secretary has the authority to assist homeowners who are in default on their insured mortgages to cure the default and thereby to avoid foreclosure. However, before the Secretary can provide assistance (which is typically in the form of forebearance on a portion of the mortgage payments), the Secretary must first acquire the mortgage from the lender. The acquisition of the mortgage involves a large outlay on the part of the Federal Government. In fiscal year 1981 it is estimated that as much as $55 million will be spent to acquire these mortgages. The Committee believes that, in many instances, the acquisition of the mortgage could be avoided if the Department had the authority to make payments to the mortgagee in an amount sufficient to cure the default and once the default was cured to have the homeowner repay the amounts advanced by the Department. This, in essence, is the theory of the new Temporary Mortgage Assistance Program (TMAP) being authorized in this ball [sic].”
H.R.Rep. No. 96-979, 96th Cong., 2d Sess. at 51-52 (1980). The ranking minority member of the House Committee on Banking, Finance, and Urban Affairs, and cosponsor of the TMAP legislation, Rep. Stanton (R.-Ohio), further stated that “[u]nder TMAP, the Secretary would be authorized, as an alternative to acquisition under the existing assignment program, to make monthly mortgage payments directly to the mortgagee on behalf of owners of FHA-insured, single family dwellings whose monthly mortgage payments are in default.” 126 Cong.Rec. 21,797 (1980).
The hearings before the Senate Subcommittee on Housing and Urban Affairs reveal that Congress had full knowledge of the “Amended Stipulation” between HUD and the plaintiff class when.it enacted the TMAP program. See Housing and Community Development Act: Hearings on S. 2383 Before the Subcomm. on Housing and Urban Affairs of the Senate Comm. on Banking, Housing, and Urban Affairs, 96th Cong., 2d Sess. 673, 674-77 (1980). Nonetheless, Congress made no mention of the “Amended Stipulation” in the TMAP legislation or the committee reports. The House Committee on Banking, Finance, and Urban Affairs simply stated that:
“In designing TMAP the Committee has attempted to conform as closely as possible to the existing requirements of the assignment program. What the Committee has sought to do is to assure that the assistance accorded to homeowners under both programs will be virtually the same. In essence the two approaches differ only in who actually holds the mortgage — under asignment [sic] it is the Secretary and under TMAP it is the private lender. The Committee has taken care to assure that the current structure, requirements and approach of the assignment program will not be altered by this legislation.”
H.R.Rep. No. 96-979, 96th Cong., 2d Sess. at 53-54 (1980). The conference committee merely added that:
“It is the intent of the conferees that the TMAP Program be developed as a possibly lower cost alternative to the existing assignment program____ [T]he conferees direct that the [HUD] Secretary implement TMAP in a manner that will assure that assistance under Section 230 [the foreclosure avoidance relief pro*469vision] will not become less accessible to deserving homeowners who are in default.”
H.R.Conf.Rep. No. 96-1420, 96th Cong., 2d Sess., reprinted in 1980 U.S.Code Cong. & Ad.News 3617, 3668.
Pursuant to Congress’ directive in 12 U.S.C. § 1715m to prescribe regulations for the foreclosure avoidance relief program, HUD proposed regulations implementing the TMAP program, see 47 Fed.Reg. 14,-495-500 (1982), received public comments, and published final regulations governing the TMAP program, see 47 Fed.Reg. 33,-252-58 (1982). Before codifying these final regulations, HUD notified the district court of the change in law and submitted a motion to modify the “Amended Stipulation,” clarifying that:
“Nothing in this Amended Stipulation affects or interferes in any way with the Department’s implementation of the TMAP Program as authorized by Public Law 96-399.”
Following an evidentiary hearing, the district court ruled that HUD’s “motion to modify the Amended Stipulation is ... denied and [HUD is] enjoined from implementing the proposed regulations published at 47 Fed.Reg. 33,252 (1982).” Ferrell v. Pierce, 560 F.Supp. at 1372. According to the district court, “what HUD sought ... by this attempt to modify its agreement with the plaintiff class and its commitment to the Court so as to exempt the TMAP regulations from the requirements of the Amended Stipulation, is to scuttle that agreement and the commitment embodied in the Amended Stipulation — ” Id. The district court concluded that the implementation of HUD’s TMAP regulations would “derogate the intent of Congress and the rights of mortgagors under the Amended Stipulation.” Id. The majority affirms the district court’s flawed reasoning and in so doing directly contravenes the intent of Congress to implement the cost-saving TMAP program.
It is well-settled that the decision to grant or deny a motion to modify a court approved stipulation (consent decree) lies within the discretion of the district court. System Federation v. Wright, 364 U.S. 642, 646-47, 81 S.Ct. 368, 370-71, 5 L.Ed.2d 349 (1961); Instrumentalist Co. v. Marine Corps League, 694 F.2d 145, 151 (7th Cir.1982); Environmental Defense Fund, Inc. v. Costle, 636 F.2d 1229, 1240 (D.C.Cir.1980). It is equally clear that “sound judicial discretion may call for modification of the terms of [a] ... decree if the circumstances, whether of law or fact, obtaining at the time of its issuance have changed, or new ones have since arisen.” System Federation v. Wright, 364 U.S. at 647, 81 S.Ct. at 371. In the instant case, the record reveals that HUD and the plaintiff class entered into their “Amended Stipulation” in August 1979. Some thirteen months later, in September 1980, Congress amended the foreclosure avoidance relief program, 12 U.S.C. § 1715m, to include the cost-saving TMAP program. In compliance with Congress’ directive in 12 U.S.C. § 1715m to promulgate regulations implementing the TMAP program, HUD compiled proposed regulations, received public comment, and, in August 1982, published final regulations. Before codifying these regulations, HUD sought to modify the 1979 “Amended Stipulation” in order to clarify that HUD’s agreement with the plaintiff class did not affect or interfere with implementation of the subsequently enacted TMAP program. The 1979 “Amended Stipulation” clearly contained no reference to the TMAP program. Moreover, Congress had full knowledge of the “Amended Stipulation” entered into between HUD and the plaintiff class, but made no mention of the parties’ agreement in the TMAP legislation or the committee reports. Despite this evidence, the district court denied HUD’s motion to modify, ruling that implementation of the regulations would “derogate the intent of Congress and the rights of mortgagors under the Amended Stipulation.” Ferrell v. Pierce, 560 F.Supp. at 1372.
The facts in this case establish that as a result of the subsequently enacted TMAP program, new circumstances have arisen to warrant modification of the 1979 “Amended Stipulation.” Under the cost-*470saving TMAP program, HUD is authorized to provide mortgagors in default with temporary foreclosure avoidance relief without acquiring the entire mortgage. Congress intended that the TMAP program be offered as an alternative to the assignment program already existing under 12 U.S.C. § 1715m and the HUD Handbook. See H.R.Conf.Rep. No. 96-1420, 96th Cong., 2d Sess., reprinted in 1980 U.S.Code Cong. & Ad.News 3668; 126 Cong.Rec. 21,797 (1980). Furthermore, Congress mandated that HUD promulgate regulations implementing the separate, cost-saving TMAP program. See 12 U.S.C. § 1715m. The pivotal issue is whether Congress intended that HUD implement the separate, cost-saving TMAP program in accord with the “Amended Stipulation” and the HUD Handbook governing the mortgage assignment program.
The majority asserts that the TMAP regulations promulgated by HUD derogate congressional intent and thus HUD’s motion to modify the “Amended Stipulation” must be denied. According to the majority, “Congress’s intent quite clearly was for HUD to offer TMAP only in a manner consistent with the operation of the assignment program and not in derogation of the rights protected by the Amended Stipulation.” Contrary to the majority’s position, Congress never expressly stated or intended that the regulations implementing the separate, cost-saving TMAP program be in accord with the “Amended Stipulation.” The only evidence of congressional intent concerning the TMAP regulations is found in the conference committee report, where Congress instructs HUD to “implement TMAP in a manner that will assure that assistance under section 230 will not become less accessible to deserving homeowners who are in default.” H.R.Conf.Rep. No. 96-1420, 96th Cong., 2d Sess., reprinted in 1980 U.S.Code Cong. & Ad. News 3617, 3668 (emphasis added). Certainly it is logical that if Congress intended for the TMAP regulations to be implemented in accord with the “Amended Stipulation,” Congress would have so stated in the TMAP legislation or the committee reports. Instead, Congress, with full knowledge of the “Amended Stipulation,” simply intended that HUD implement the TMAP program to assure that foreclosure avoidance relief would not become less accessible to deserving homeowners in default. Congress granted HUD broad discretionary authority to establish eligibility requirements and to define the term “deserving homeowners.” Accordingly, I defer to HUD’s expertise in interpreting the newly enacted TMAP program and in promulgating regulations to implement the cost-saving program. See, e.g., FEC v. Democratic Senatorial Campaign Comm., 454 U.S. 27, 31-32, 102 S.Ct. 38, 42, 70 L.Ed.2d 23 (1981); Andrus v. Shell Oil Co., 446 U.S. 657, 667-68, 100 S.Ct. 1932, 1938-39, 64 L.Ed.2d 593 (1980); Miller v. Youakim, 440 U.S. 125, 144, 99 S.Ct. 957, 968, 59 L.Ed.2d 194 (1979); Udall v. Tollman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965); Illinois Cent. Gulf R. Co. v. I.C.C., 702 F.2d 111, 114 (7th Cir.1983); St. Mary of Nazareth v. Dept. of Health & Human Services, 698 F.2d 1337, 1346-47 (7th Cir.), cert. denied, — U.S.-, 104 S.Ct. 107, 78 L.Ed.2d 110 (1983); Production Tool v. Employment & Training Admin., 688 F.2d 1161, 1167 (7th Cir.1982); Foulkes v. C.I.R., 638 F.2d 1105, 1110 n. 17 (7th Cir.1981); McElrath v. Califano, 615 F.2d 434, 439 (7th Cir.1980).
In footnote 16, the majority targets testimony by HUD officials to support its belief that Congress did not intend to “make foreclosure assistance less accessible or advantageous.” Contrary to the majority’s position, I note that Congress fully expected differences to exist between the mortgage assignment program and the TMAP program, as implemented by HUD. According to Rep. Lundine (D.-N.Y.), a member of the House Committee on Banking, Finance, and Urban Affairs, and a co-sponsor of an amendment to the TMAP legislation, the TMAP program:
“provide[s] HUD with the authority to impose less restrictive interest rates and provide[s] a means by which a homeowner receiving assistance can be shifted *471into the assignment program if the higher debt burden under the TMAP is likely to cause a new default.
sk * * * * *

If the TMAP program is used, as intended, to replace the current assignment program, I think we will see an increasing number of foreclosures among low-income homeowners.”

126 Cong.Rec. 21,803 (1980) (emphasis added). Even assuming that foreclosure avoidance relief is less accessible under the district court’s interpretation of the TMAP regulations, members of Congress, such as Rep. Lundine, certainly realized that the discretion given to the Secretary of HUD in implementing the cost-saving TMAP program could have such an effect. Moreover, I note that the 1983 Congress, despite the district court’s order preventing HUD from implementing the cost-saving TMAP program, approved the TMAP regulations as representing the intent of Congress. Although “the view of a later Congress does not establish definitively the meaning of an earlier enactment, ... it does have persuasive value.” Bell v. New Jersey and Pennsylvania, 461 U.S. 773, 103 S.Ct. 2187, 2194, 76 L.Ed.2d 313 (1983) (citing Bowsher v. Merck, 460 U.S. 824, 103 S.Ct. 1587, 1595 n. 12, 75 L.Ed.2d 580 (1983)). See also Atchison T. & S. F. Ry. Co. v. Blanchette, 628 F.2d 1011, 1014 (7th Cir. 1980). According to the House Committee on Appropriations:
“The committee has learned that implementation of the TMAP program has been blocked by the District Court of Chicago on the basis that the regulations are inconsistent with the authorizing legislation. The Department’s regulations of last August implementing the TMAP program are in substantial agreement with all relevant Federal housing laws and represent the intent of Congress.”
H. R.Rep. No. 98-223, 98th Cong., 1st Sess. I, 11 (1983) (emphasis added).
The persuasive language of the 98th Congress solidifies my position that HUD promulgated TMAP regulations in full accord with congressional intent. The legislative history reveals that Congress enacted the TMAP program as a separate, cost-saving alternative to the mortgage assignment program. HUD has acted prudently and wisely to implement this cost-saving program in an expeditious manner. Sound judicial discretion dictates that in light of the subsequently enacted TMAP program and the HUD regulations promulgated to implement the cost-saving program, new circumstances have arisen requiring the “Amended Stipulation” to be modified. Instead, the majority denies the motion to modify and enjoins HUD from implementing the cost-saving TMAP program, thereby negating the very intent of Congress. The majority’s apparent predisposition to rewrite our nation’s housing laws, see, e.g., Hope v. County of Du Page, 738 F.2d 797 at 825 (7th Cir.1984) (Cudahy, J., dissenting) (“without coming to grips with housing, it is difficult to come to grips with anything else”), is an unprecedented infringement upon the legislative process. I dissent from the majority’s unwarranted attempt to engage in social legislation, usurping HUD’s authority to promulgate TMAP regulations and thereby imposing the majority’s will for that of Congress.2 Moreover, I find absolutely no basis for the award of attorney’s fees under the Equal Access to Justice Act, 28 U.S.C. § 2412(d), in this case. In my view, HUD was not only “substantially justified” in seeking a modification of the consent decree, it was furthering the intent of Congress to implement the cost-saving TMAP program.

. In July 1976 the plaintiffs and HUD entered into a Stipulation, approved by the district court in August 1976, whereby HUD agreed to operate an assignment program as authorized by 12 U.S.C. § 1715n. In August 1979, the parties entered into the “Amended Stipulation,” which was approved by the district court in November 1979.

. The majority opinion prevents HUD from implementing the proposed TMAP regulations only for the period of the "Amended Stipulation.” Majority opinion at n. 17. Note that the “Amended Stipulation" expires August 2, 1984, and thereafter the parties are not bound by the majority opinion.