Court Opinion

ID: 2665680
Source: CourtListenerOpinion
Date Created: 2014-04-04 08:03:31.943629+00
Date Added: 2024-06-11T12:42:33.889313
License: Public Domain

UNITED STATES DISTRICT COURT
                              FOR THE DISTRICT OF COLUMBIA

   GREATER NEW ORLEANS FAIR
   HOUSING ACTION CENTER, et al.

                          Plaintiffs,

                         v.

   UNITED STATES DEPARTMENT OF                              Civil Action 08-01938 (HHK)
   HOUSING AND URBAN
   DEVELOPMENT

           and

   ROBIN KEEGAN, Executive Director of
   the Louisiana Recovery Authority,

                          Defendants.

                                  MEMORANDUM OPINION

       Greater New Orleans Fair Housing Action Center, the National Fair Housing Alliance,

and five individuals who own homes in New Orleans (collectively “plaintiffs”)1 bring this action

against Robin Keegan, in her official capacity as Executive Director of the Louisiana Recovery

Authority (“LRA”), and the U.S. Department of Housing and Urban Development (“HUD”),

asserting that defendants have violated the Fair Housing Act (“FHA”), 42 U.S.C. § 3601 et seq.2

This case arises from the alleged racially discriminatory effect of a formula used to distribute

       1
               Plaintiffs intend to represent a class of individual homeowners but, in accordance
with a deadline set in an order proposed by the parties and entered by the Court on February 9,
2009, they have not yet filed for class certification.
       2
               Plaintiffs’ complaint also includes a claim under the Housing and Community
Development Act, 42 U.S.C. § 5301 et seq. In the briefing currently before the Court, plaintiffs
focus only on their FHA claim, so this memorandum opinion similarly does not discuss this
second claim.
grants as part of the Road Home Homeowner Assistance Program (“Road Home Program” or

“Program”), a housing redevelopment initiative designed to help homeowners affected by

Hurricanes Katrina and Rita. Plaintiffs seek an injunction requiring recalculation of Program

awards to homeowners in New Orleans using a formula that does not have a disparate impact on

African Americans.

       On June 29, 2010, the Court issued an order that denied plaintiffs’ motion for a temporary

restraining order and a preliminary injunction [#50] which sought to enjoin Keegan from

spending surplus funds that remain available to the Road Home Program, or seeking any

additional Program funds from HUD, while this case is pending. This opinion explains the

reasoning on which that order was based.

                                       I. BACKGROUND

       In 2005, Hurricanes Katrina and Rita caused catastrophic damage to New Orleans,

Louisiana, and other nearby places. In response, Congress created a block grant program to assist

in recovery of the region, which it funded through three appropriations statutes. See Pub. L. No.

109-148, 119 Stat. 2680, 2779-81 (Dec. 30, 2005); Pub. L. No. 109-234, 120 Stat. 418, 472-73

(June 15, 2006); Pub. L. No. 110-116, 121 Stat. 1295, 1343-44 (Nov. 13, 2007). Pursuant to

these statutes and HUD regulations, the State of Louisiana was to receive $13.4 billion. See 71

Fed. Reg. 7666, 7666 (Feb. 13, 2006) (allocating $6.2 billion from the first appropriation to

Louisiana); 71 Fed. Reg. 63,337, 63,338 (Oct. 30, 2006) (allocating $4.2 billion from the second

appropriation to Louisiana); 121 Stat. at 1343-44 (appropriating $3 billion for supplemental

grants to Louisiana).

                                                2
       Louisiana designated approximately $11 billion of those funds for the Road Home

Program. The LRA, in consultation with HUD, developed the Program; HUD approved it and

disburses the money Congress has appropriated for it to the LRA; and the LRA administers it.

Under a portion of the Program called Option 1, an individual whose house was damaged by the

hurricanes may choose to receive a grant to repair or rebuild her home.3 Each beneficiary of an

Option 1 grant receives an award in the amount of either the value of her home before the storms

or the cost of repairing her home, whichever is less, but not in excess of $150,000. Since

plaintiffs initiated their suit, the LRA has created Additional Compensation Grants (“ACGs”),

supplemental awards available to Option 1 beneficiaries whose incomes are at or below eighty

percent of the median in their areas. Regardless of the pre-storm values of their homes, these

individuals may receive ACGs such that their total awards from the Road Home Program reach

the cost of repairs to their homes, still subject to the $150,000 cap.

       Since the Road Home Program’s inception, the LRA has distributed Option 1 awards to

tens of thousands of homeowners. As of the time of the briefing regarding plaintiffs’ current

motion, only 179 individuals who applied for Option 1 grants had yet to receive their awards.

The LRA has money set aside to fund grants for those individuals, to continue to distribute ACGs

to eligible individuals, and for other projects within the Road Home Program. The LRA is

currently seeking approval to use much of the Program money not yet designated to a specific use

for “Action Plan Amendment 43,” a construction lending program designed to assist Road Home

       3
               The Program also permits homeowners to instead opt to receive smaller grants to
obtain housing elsewhere in Louisiana or outside the state. The design and implementation of
those aspects of the Program are not at issue here.

                                                  3
Program beneficiaries who have not been able to complete repairs to their homes. Keegan

estimates that she has $554.5 million remaining in the Program budget.

       Individual plaintiffs Gloria Burns, Rhonda Dents, Almarie Ford, Daphne Jones, and

Edward Randolph are African Americans who own homes in New Orleans that were severely

damaged by Hurricane Katrina, and subsequent flooding, in 2005.4 Each applied for a Road

Home Program grant under Option 1, and each received an award based on the pre-storm value

of her or his home rather than the cost of repairing that home.5 Since receiving their initial

grants, Burns and Jones have been deemed eligible to receive ACGs such that their total awards

will amount to $150,000.

       In their complaint, plaintiffs allege that the LRA’s reliance on home values in calculating

awards “has a discriminatory disparate impact on African Americans living in historically

segregated communities.” Compl. ¶ 52. Specifically, they argue that because “African American

homeowners in New Orleans are more likely than white homeowners in New Orleans to own

       4
               The other plaintiffs, Greater New Orleans Fair Housing Action Center, a non-
profit organization based in Louisiana, and the National Fair Housing Alliance, a non-profit
organization based in Washington, D.C., are advocacy groups that, inter alia, oppose housing
discrimination.
       5
                According to the complaint, Burns received $106,500, which was $89,000 less
than the cost of damage to her home and $43,500 less than the maximum she could have
received; Dents received $88,534, which was $58,730 less than the cost of damage to her home;
Ford received $3,468, which was $156,073 less than the cost of damage to her home and
$146,532 less than the maximum she could have received; Jones received $61,000, which was
$45,262 less than the cost of damage to her home; and Randolph received $16,650, which was
$173,193 less than the cost of damage to his home and $133,350 less than the maximum he could
have received. Compl. ¶¶ 61-65. Some of the awards are in amounts less than the pre-storm
value of the home because the LRA deducts from each grant any amount of money the
homeowner has received as compensation for storm damage from her insurance company or
another source, such as the Federal Emergency Management Agency.

                                                 4
homes with lower values,” African-American recipients of Road Home Program grants are more

likely than white recipients to receive only the amount of the pre-storm value of their homes and,

consequently, to have a larger gap than white recipients between the amount of the grant and the

cost of rebuilding. Compl. ¶¶ 54-57. This effect, plaintiffs assert, constitutes a violation of the

Fair Housing Act.6 Ultimately, plaintiffs seek injunctive relief, “including but not limited to

ordering Defendants to cease immediately their violation of Plaintiffs’ rights, and to remedy the

invidious effects of their violations by recalculating Road Home homeowner grants in a

nondiscriminatory manner.” Compl. at 17.

       At this time, plaintiffs seek a preliminary injunction enjoining Keegan from spending any

surplus funds—that is, Program funds not already designated for the remaining 179 Option 1

awards, ACGs, or any other specific use—until the merits of their case are resolved. They make

this request because Keegan will only be able to distribute recalculated awards, should plaintiffs

prevail on the merits, if sufficient Road Home Program funds remain available for that purpose.

       Plaintiffs’ motion for a preliminary injunction is accompanied by evidence they allege

supports their allegation that the Option 1 formula has a discriminatory effect. Specifically, they

point to statistics from the U.S. Census showing that in New Orleans, homes owned by African

Americans have lower values, on average, than homes owned by whites. Pls.’ Mot. for TRO, Ex.

P. They attached to their motion a study by PolicyLink, “a national independent research

       6
                 Specifically, Count I of the complaint alleges that defendants have (1) “made
unavailable or denied housing to African American homeowners because of their race in
violation of” section 3604(a) of the FHA; (2) “discriminated against African Americans because
of their race in the availability of, and in the terms and conditions of, real estate-related
transactions in violation of” section 3605(a) of the FHA; and (3) “failed to administer housing-
related programs and activities in a manner that affirmatively furthers fair housing, in violation
of” sections 3608(d) and 3608(e)(5) of the FHA. Compl. ¶¶ 74-76.

                                                  5
organization,” which concludes that on average, African-American applicants to the Road Home

Program received funds in amounts further below the costs to rebuild their homes than white

applicants. Id. at 11-12; id., Ex. S. They also assert that Paul Rainwater, Keegan’s predecessor

at the LRA, told a subcommittee of the U.S. House of Representatives that home values in

African-American neighborhoods tend to be lower than in white neighborhoods and that he was

“sure” that African-American homeowners were more likely than whites to receive awards based

on the value of their homes than the cost of repairs. Id. at 15-16; id., Ex. N at 23-24. Finally,

they attach to their motion the declaration of Carol Johnson, president of a Louisiana mortgage

company, who asserts she has expertise in the mortgage industry and that she has “observed that

because of the formula employed, Road Home Program grant calculations result in homeowners

in predominantly African American areas received lower grant awards than homeowners in

predominantly White areas.” Id., Ex. T ¶ 7.7

                                           II. ANALYSIS

       This court may issue a preliminary injunction only when the movant demonstrates: (1) “a

substantial likelihood of success on the merits”; (2) “that it would suffer irreparable injury if the

injunction is not granted”; (3) “that an injunction would not substantially injure other interested

parties”; and (4) “that the public interest would be furthered by the injunction.” Mova Pharm.

Corp. v. Shalala, 140 F.3d 1060, 1066 (D.C. Cir. 1998) (quoting CityFed Fin. Corp. v. Office of

       7
               Keegan has moved to strike this declaration because Johnson is “not an expert
economist or statistician.” Keegan Opp’n to Pls.’ Mot. for TRO (“Keegan Opp’n”) at 29 n.20.
Plaintiffs oppose this motion, arguing that Johnson has relevant expertise regarding home values
in New Orleans. The parties have made these arguments in less detail than is necessary for the
Court to rule on the motion. Furthermore, the Court’s ruling on plaintiffs’ motion does not
depend on whether it considers this evidence.

                                                  6
Thrift Supervision, 58 F.3d 738, 746 (D.C. Cir. 1995)). “These factors interrelate on a sliding

scale and must be balanced against each other.” Serono Labs., Inc. v. Shalala, 158 F.3d 1313,

1318 (D.C. Cir. 1998). Because preliminary injunctions are “extraordinary and drastic” forms of

judicial relief, district courts should not grant them “unless the movant, by a clear showing,

carries the burden of persuasion.” Mazurek v. Armstrong, 520 U.S. 968, 972 (1997) (quoting

11A C. WRIGHT , A. MILLER, & M. KANE , FEDERAL PRACTICE AND PROCEDURE § 2948, pp.

129-130 (2d ed.1995)) (emphasis in Mazurek).

A.     Plaintiffs Have Not Shown a Likelihood of Success on the Merits.

       1.      Plaintiffs have demonstrated that they could likely make out a prima facie
               case of discrimination in violation of the Fair Housing Act.

       For the reasons explained below, the Court concludes that it may not provide the ultimate

relief plaintiffs seek and therefore should not grant the preliminary relief they currently request.

But the Court notes first that plaintiffs’ disparate impact claim under the Fair Housing Act

appears to have merit. Although full analysis of the issues raised here is unnecessary, the Court

feels compelled nevertheless to briefly explain its reasoning.

       Although the D.C. Circuit did not determine in 2922 Sherman Avenue Tenants’

Association v. District of Columbia, 444 F.3d 673 (D.C. Cir. 2006), which of two possible

standards courts in this Circuit are to apply in assessing disparate impact claims under the FHA,

see id. at 680, the Court believes that the appropriate approach is the burden-shifting framework

adopted by several other Circuits. Under this framework, “once the plaintiff demonstrates that

the challenged practice has a disproportionate impact, the burden shifts to the defendant to ‘prove

that its actions furthered, in theory and in practice, a legitimate, bona fide governmental interest

                                                  7
and that no alternative would serve that interest with less discriminatory effect.’” Id. (quoting

Huntington Branch, NAACP v. Town of Huntington, 844 F.2d 926, 935-36 (2d Cir. 1988)).

        Plaintiffs have demonstrated that they would likely be able to make out this prima facie

case after discovery. The statistical and anecdotal evidence they submit to the Court leads to a

strong inference that, on average, African-American homeowners received awards that fell

farther short of the cost of repairing their homes than did white recipients. Keegan’s attacks on

that evidence are unpersuasive. Plaintiffs need not make a showing at this stage of the

proceedings, before discovery and when briefing is necessarily rushed, sufficient to prove the

merits of their case. Keegan neither demonstrates that plaintiffs’ statistics or logic is flawed nor

provides data about the administration of the Program that would show what effect the Option 1

formula has had. Cf. Berger v. Iron Workers Reinforced Rodmen Local 201, 843 F.2d 1395,

1412 (D.C. Cir. 1988) (“Defendants may also attempt to undermine plaintiffs’ prima facie case

by attacking the validity of plaintiffs’ statistical evidence, or by introducing statistical evidence

of their own showing that the challenged practice did not have racially disproportionate results.”

(citation omitted)). She has also offered no legitimate reason for taking pre-storm home values

into account in calculating Program awards. The Court does not take lightly that some African-

American homeowners received lower awards than they would have if their homes were in

predominantly white neighborhoods. And, although the Court appreciates that all of the parties

are committed to the rebuilding of a city that has suffered greatly, it is regrettable that this effort

to do so appears to have proceeded in a manner that disadvantaged African-American

homeowners who wish to repair their homes.

                                                   8
        2.      Plaintiffs cannot prevail on the merits because this Court does not have the
                authority to grant the ultimate relief they seek.

        Keegan argues that regardless of the merit of plaintiffs’ discrimination claim, the Court

lacks subject matter jurisdiction over this case because the Eleventh Amendment to the U.S.

Constitution bars the Court from providing the relief plaintiffs seek. Her primary argument8 is

based on a legal premise the Court explained in some detail in a Clarification [#52] to an order it

entered regarding a motion to dismiss Keegan filed before plaintiffs submitted their motion. For

clarity, the Court again describes the legal background before addressing plaintiffs’ response.

        The Eleventh Amendment bars suits against states absent the relevant state’s consent to

be sued. See Papasan v. Allain, 478 U.S. 265, 276 (1986).9 But in Ex parte Young, 209 U.S.
123 (1908), the Supreme Court held that “[a] federal court is not barred by the Eleventh

Amendment from enjoining state officers from acting unconstitutionally, either because their

action is alleged to violate the Constitution directly or because it is contrary to a federal statute or

regulation that is the supreme law of the land.” Vann v. Kempthorne, 534 F.3d 741, 749 (D.C.

Cir. 2008) (quoting CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 4232

        8
                Keegan also argues that Eleventh Amendment immunity bars this action because
the LRA, and therefore the State of Louisiana, “not Keegan, is the real party in interest in this
suit.” Keegan Opp’n at 13. But the Ex parte Young exception to sovereign immunity permits
suits against state officers by relying on “the fiction that the suit [goes] against the officer and not
the State,” Vann v. Kempthorne, 534 F.3d 741, 749 (D.C. Cir. 2008) (citing Pennhurst State Sch.
& Hosp. v. Halderman, 465 U.S. 89, 114 n.25 (1984)), and the Court disagrees with Keegan’s
contention that this fiction does not operate here.
        9
                The Eleventh Amendment provides that “[t]he Judicial power of the United States
shall not be construed to extend to any suit in law or equity, commenced or prosecuted against
one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign
State.” U.S. CONST . amend. XI. The Supreme Court “long ago held that the Amendment bars
suits against a State by citizens of that same State as well.” Papasan, 478 U.S. at 276 (citing
Hans v. Louisiana, 134 U.S. 1 (1890)).

                                                   9
(3d ed. 2007)). The Supreme Court has directed that “[i]n determining whether the doctrine of

Ex parte Young avoids an Eleventh Amendment bar to suit, a court need only conduct a

‘straightforward inquiry into whether [the] complaint alleges an ongoing violation of federal law

and seeks relief properly characterized as prospective.’” Verizon Md. Inc. v. Public Serv.

Comm’n, 535 U.S. 635, 645 (2002) (quoting Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S.
261, 296 (1997) (O’Connor, J., concurring)). In this context, the distinction between retroactive

and prospective relief is significant because the Eleventh Amendment bars “a suit by private

parties seeking to impose a liability which must be paid from public funds in the state treasury.”

Edelman v. Jordan, 415 U.S. 651, 663 (1974) (citations omitted); see also Verizon Md. Inc., 535
U.S. at 645 (making clear that relief that “impose[s] upon the State ‘a monetary loss resulting

from a past breach of a legal duty on the part of the defendant state officials’” is not permissible

(quoting Edelman, 415 U.S. at 668) (emphasis removed)). In other words, this Court cannot

order the payment of damages to correct a prior unlawful act by a state official. See Edelman,
415 U.S. at 663 (holding that a federal court may not issue an order that requires a state to spend

money that “should have been paid, but was not”).

       Based on these principles of law, the Court suggested in its Clarification, and now holds,

that it may not grant plaintiffs’ request for an order mandating that LRA make payments to Road

Home Program beneficiaries who have already received funds in amounts calculated using an

allegedly discriminatory formula. An order requiring Keegan to correct Road Home Program

payments that have already been made would not provide prospective relief; it would require

payment of state funds rather than prohibit certain actions in the future. Plaintiffs do not dispute

the Court’s reliance on these fundamental principles, but they contest the Court’s understanding

                                                 10
of the facts underlying this case and, therefore, its application of those principles to the situation

at hand. The Court cannot agree with their arguments.

               a.      The relief plaintiffs seek would require the expenditure of state, not
                       federal, funds.

         First, plaintiffs argue that the Court may enter the injunction they seek because such an

order would require the expenditure of federal funds, not state funds. To demonstrate that this

distinction is legally significant, plaintiffs rely primarily on Edelman v. Jordan, 415 U.S. 651

(1974), quoting the many instances in that opinion in which the Supreme Court discussed the

significance for an Eleventh Amendment analysis of requiring the payment of “state funds,” and

they repeat language from other cases relying on Edelman for the proposition that it is

impermissible for a federal court to impose a liability to be paid from the “state treasury.” Pls.’

Resp. to Clarification at 8-9.10 They assert that because the LRA spends money that comes

directly from HUD at Congress’s direction, the funds they wish the Court to order Keegan to use

to correct award amounts do not belong to the state.

       The Court does not find that the funds the LRA spends are federal. It simply cannot be

said that an injunction preventing a state official from disbursing money according to a program

administered by her state agency controls only the flow of federal funds. Furthermore, a careful

reading of Edelman reveals that the Supreme Court has made no distinction between money that

comes to a state account from the federal government as opposed to from some other source. In

       10
                Plaintiffs note in their reply to Keegan’s opposition to their motion that Keegan
has failed to address this point and argue Keegan has therefore conceded it. The parties have
each made a multitude of arguments in addressing the various complicated issues raised in this
case, and neither has directly addressed each point made by the other. The Court will not assume
that any arguments are conceded.

                                                  11
Edelman, the plaintiffs had successfully demonstrated that Illinois’s administration of a welfare

program, which was “funded by the State and the Federal Governments” and administered by

state agencies, the directors of which were the named defendants, violated certain federal

regulations. Edelman, 415 U.S. at 653-56. The opinion held that the district court had properly

enjoined the state officers from continuing to administer the program in a manner that violated

those regulations but had improperly ordered that individuals who received less than they were

owed because of past violations be compensated. Id. at 664-65. The Supreme Court referred

throughout to state funds and the state treasury, generating the quotes to which plaintiffs have

pointed, but nowhere did it distinguish funds that the federal government gave to the state for the

welfare program from those the state contributed from its own resources. In other words, the

opinion did not address the issue plaintiffs have raised and does not support plaintiffs’

arguments; the best inference to draw is that the Supreme Court considered federal money given

to the state for administration of the relevant program to be state funds.11 For purposes of this

analysis, the money the LRA uses to make awards to Road Home Program beneficiaries are

properly considered state funds.

       11
                None of the other cases plaintiffs cite contribute to an analysis of this issue. See
Verizon Md. Inc., 535 U.S. at 646 (distinguishing between an injunction that would require
payment from a state treasury and one that imposed a financial liability on private parties); Quern
v. Jordan, 440 U.S. 332, 337 (1979) (repeating language from Edelman but addressing only the
question of whether ordering that a particular notice be sent to individuals who might have
claims against Illinois constitutes retroactive relief); Fla. Dep’t of State v. Treasure Salvors, Inc.,
458 U.S. 670, 689-90 (1982) (reciting language from Edelman but addressing the propriety of a
suit against Florida based on the discovery of a sunken ship); Travelers Indem. Co. v. Sch. Bd. of
Dade County, Fla., 666 F.2d 505, 509 (11th Cir. 1982) (reciting language from Edelman but
addressing whether the Florida board of education has Eleventh Amendment immunity under
certain circumstances not analogous to those here).

                                                  12
               b.      An injunction requiring the correction of Option 1 awards would
                       impermissibly provide retroactive relief.

       Second, plaintiffs argue that the relief they seek is prospective because the Road Home

Program is “continuing and open,” Pls.’ Resp. to Clarification at 11, and they therefore request

“an end to [] present violation[s] of federal law,” id. (quoting Papasan v. Allain, 478 U.S. 265,

278 (1986)) (alterations and emphasis in brief). They argue that in contrast to Edelman, in which

the defendant state officers had failed to pay benefits that correlated to discrete past time periods,

the Road Home Program “has an ever-changing current balance sheet for an incomplete

program.” Id. Keegan asserts that correction of Road Home Program awards previously

disbursed would constitute retroactive relief.

       The fundamental premise here, explained above, is not in dispute:

       Relief that in essence serves to compensate a party injured in the past by an action
       of a state official in his official capacity that was illegal under federal law is
       barred even when the state official is the named defendant. . . . On the other hand,
       relief that serves directly to bring an end to a present violation of federal law is
       not barred by the Eleventh Amendment even though accompanied by a substantial
       ancillary effect on the state treasury.

Papasan, 478 U.S. at 278 (citations omitted). The Supreme Court has acknowledged that “the

line between permitted and prohibited suits will often be indistinct,” id., but here, the outcome is

unavoidable.

       Plaintiffs’ characterization of the Road Home Program as ongoing does not persuade the

Court that an injunction requiring the recalculation of Option 1 awards would constitute

prospective relief. It is true that the Road Home Program as a whole is not complete. But all but

                                                 13
179 Option 1 grants have been distributed.12 It is also true that some Road Home Program

recipients have received funds in addition to their initial awards under Option 1. But those

supplemental grants were not based on any change to the formula for, nor did they constitute a

recalculation of, Option 1 awards. The allegedly discriminatory award amounts have, as to

almost all applicants, already been calculated and disbursed. Correcting them, even by entry of

an injunction, would effectively constitute an award of damages. Cf. Papasan, 478 U.S. at 279

(advising that “[i]n discerning on which side of the line [between prospective and retroactive

relief] a particular case falls,” a court is to “look to the substance rather than to the form of the

relief sought”). As was the case in Edelman, the program at issue here distributes discrete

awards; it does not provide any ongoing service such that a “present violation” of law can be said

to exist. Id. at 278; cf. Milliken v. Bradley, 433 U.S. 267, 289 (1977) (holding that a court-

ordered program to remedy inequalities resulting from school segregation “fits squarely within

the prospective-compliance exception reaffirmed by Edelman” because it “enjoin[s] state

officials to conform their conduct to requirements of federal law” in the future operation of

schools).

        Were the Court to order, as plaintiffs request, that Keegan recalculate awards that have

already been distributed and make supplemental payments to homeowners whose awards would

have been greater had they not been based on home values, it would impermissibly be requiring

the state to disburse money that “should have been paid, but was not.” Edelman, 415 U.S. at

        12
                The Court asked plaintiffs during oral argument on this motion whether they
would wish to go forward with their request for a preliminary injunction if the Court were to hold
that the ultimate relief they seek is only available to those 179 individuals. Plaintiffs did not
express a desire to limit their case to such a narrow group of Road Home Program beneficiaries.

                                                  14
664. It would impermissibly be doing more than “enjoining state officers from acting

unconstitutionally.” Vann, 534 F.3d at 749. Although, as explained, the Court suspects that the

Option 1 formula did violate the Fair Housing Act, this Court has no authority to remedy it in the

way plaintiffs ask. Accordingly, the Court cannot find that plaintiffs are likely to succeed on the

merits of their case.

       2.      Plaintiffs have not shown that they will face irreparable injury absent the
               entry of an injunction.

       Plaintiffs argue that without an injunction, the LRA will be able to spend any or all Road

Home Program funds and an insufficient amount of money would remain available to provide the

ultimate relief they seek. This reasoning relies on, among other assumptions, the premise that the

LRA must hold approximately $516 million in order to comply with a future order from this

Court mandating the correction of the disparate impact of the Option 1 formula. Keegan

responds that the LRA has sufficient funds to comply with an order from this Court enjoining her

from using the existing Option 1 formula in calculating the awards owed to the 179 remaining

Option 1 applicants.

       As explained above, the Court may not order the relief plaintiffs seek. There is no risk,

therefore, that any spending by the LRA will cause the irreparable harm plaintiffs foresee.13

       3.      The injury to third parties that would result from the preliminary injunction
               plaintiffs seek weighs strongly against granting plaintiffs’ motion.

       Plaintiffs argue that other parties would not be harmed by the entry of the preliminary

injunction they seek. They note that non-class members whose Road Home Program benefits

       13
               As noted, plaintiffs’ counsel have declined to indicate that they wish to represent
the 179 applicants who have not yet received awards.

                                                15
might be delayed by such an injunction would benefit overall if the LRA is ultimately made to

calculate future awards considering only the cost of repairs.

        The Court will not find that third parties would not be harmed by the entry of an

injunction of the sort plaintiffs seek. Even though the preliminary injunction plaintiffs seek

would permit Keegan to disburse some Road Home Program funds, it would restrict her

spending significantly. Each dollar the Court enjoined her from spending would be a dollar

withheld from a Louisiana resident who wants to repair or rebuild her home and who has been

unable to do so in the five years since the storm damaged it. The Court notes that plaintiffs could

have initiated this case and sought preliminary relief long ago, before the Road Home Program

was almost complete and the funds almost depleted. And the Court will not ignore the fact that

the delay a preliminary injunction would cause is significant; discovery and a resolution on the

merits of this case could, and likely would, take years.

        4.      The public interest in an injunction does not weigh in favor of either party.

        Plaintiffs argue that it is in the public interest to remedy housing discrimination. Keegan

argues that the public interest would not be served by delaying the distribution of funds under the

Road Home Program and that Louisiana citizens “continue to need and rely upon funding from

the Road Home” Program. Keegan Opp’n to Pls.’ Mot. for TRO at 35.

        Because both parties’ positions have merit, the Court finds that this factor does not weigh

in favor of either party. Plaintiffs are correct that there is a strong public interest in preventing

discrimination on the basis of race, and the Court takes seriously Congress’s intent to do so by

enacting the Fair Housing Act. But Keegan is correct that there is a strong public interest in

going forward with a program designed to repair a devastated area. As noted above, a

                                                  16
preliminary injunction would cause significant delay in the distribution of Program funds to

people who have suffered long enough.

       5.      Conclusion

       The Court must balance these four factors against each other. Serono Labs., Inc. v.

Shalala, 158 F.3d 1313, 1318 (D.C. Cir. 1998). In sum, the Court has found that plaintiffs’ Fair

Housing Act claim likely has merit but that plaintiffs do not have a strong likelihood of success

in this action because the Court cannot grant the relief they seek. Furthermore, delaying the

administration of the Road Home Program would be harmful to Louisiana homeowners who still

need assistance. Although the Court is not unsympathetic to the ways in which the law operates

in this instance to preclude the possibility of correcting what may well be a discriminatory

formula, it is bound to apply the law as it stands and it must consider the effect its ruling here

could have on individuals who are not represented. For these reasons, the Court will not grant

the preliminary injunction plaintiff seek.

                                        III. CONCLUSION

       For the foregoing reasons, on June 29, 2010, the Court entered an order denying

plaintiffs’ motion for a preliminary injunction [#50].

                                                               Henry H. Kennedy, Jr.
                                                               United States District Judge

                                                 17