Jean Massie, et al v. Dept Housing, et al

Filing 920100908

Opinion

PRECEDENTIAL U N IT E D STATES COURT OF APPEALS F O R THE THIRD CIRCUIT

N o . 09-1087

J E A N MASSIE; SHIRLEY SOWELL; A L I N E REID; YUGONDA ALICE; T H IR D EAST HILLS PARK, INC.; LOUISE BRANDON

v. U N IT E D STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; ALPHONSO JACKSON, Secretary

Jean Massie, Appellant

O n Appeal from the District Court for the W e ste rn District of Pennsylvania (C iv . A. No. 06-cv-01004) D is tr ic t Judge: Donetta W. Ambrose

A rg u e d May 18, 2010 B e f o re : FUENTES, HARDIMAN, and NYGAARD, Circuit Judg es. (O p in io n Filed: September 8, 2010) D o n a ld Driscoll, Esq. Kevin L. Quisenberry, Esq. C o m m u n ity Justice Project 4 2 9 Forbes Avenue 1 7 0 5 Allegheny Building P itts b u rg h , PA 15219 C o u n se l for Appellants

(A R G U E D )

R o b e rt L. Eberhardt, Esq. (A R G U E D ) M e g a n E. Farrell, Esq. O f f ic e of the United States Attorney 7 0 0 Grant Street S u ite 4000 P itts b u rg h , PA 15219 C o u n s e l for Appellees J a m e s R. Grow, Esq. H o u s in g Preservation Project N a tio n a l Housing Law Project 6 1 4 Grand Avenue S u ite 320 O a k la n d , CA 94610 A m ici Curiae - Appellants 2

O P IN I O N OF THE COURT

F U E N T E S , Circuit Judge: P la in t if f s are a class of former residents of Third East H ills Park ("Third East Hills Park" or "the property"), an a p artm en t development in Pittsburgh, Pennsylvania, who formed a co-op known as Third East Hills Park, Inc. (the "Co-op").1 T h e Co-op entered into a project-based Section 8 Housing A s s is ta n c e Payments ("HAP") contract with the United States D ep artm en t of Housing and Urban Development ("HUD").2

The District Court certified a class consisting of " re sid e n ts with fully-paid memberships (in the Co-op) as of the n o tice of foreclosure on November 10, 2004." (District Court D o c k e t No. 82.) The parties agreed to a list identifying fifty-two p u ta tiv e class members, which was submitted to the Court. The federal Section 8 rental assistance program p ro v id e s "rent subsidies for low- and moderate-income p a rtic ip a n ts so that they can afford to leave privately owned h o u s in g units." Turner v. Crawford Square Apartments III, L .P ., 449 F.3d 542, 544 n.4 (3d Cir. 2006) (citation omitted). It w a s established under the United States Housing Act of 1937, 4 2 U.S.C. § 1437 et seq. Project-based Section 8 assistance, su c h as that at issue in this case, is linked to a particular unit. T r u e s d e ll v. Phila. Hous. Auth., 290 F.3d 159, 162 n.2 (3d Cir. 2002). In contrast, tenant-based assistance provides a 3
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P u r s u a n t to the HAP contract, HUD would pay a portion of the m o n th l y rent on behalf of eligible low-income tenants. P la in tif f s filed this class action lawsuit seeking to compel action th a t they claim was unlawfully withheld by HUD. First, they s e e k an order compelling HUD to maintain the HAP contract at th e property following foreclosure (and purchase and re h a b ilita tio n by a new owner). They argue that this course of a c tio n is required by Pub. L. No 109-115, § 311, 119 Stat. 2396 (2 0 0 5 ) ("Section 311").3 Second, Plaintiffs seek an order c o m p e llin g HUD to provide class members with relocation a ss is ta n c e at Uniform Relocation Act ("URA") levels, pursuant to 24 C.F.R. § 290.17(d), rather than the lesser amount that H U D provided under 24 C.F.R. § 290.17(c). O u r analysis begins with a threshold issue of the scope of th is appeal. We find that the appeal of all class members is p ro p e rly before us. Turning to the substantive issues, we hold th a t Section 311 did apply to HUD's management and d isp o sitio n of the property at issue in this case. HUD failed to m a k e a determination that the property was not feasible for

participant with a voucher which may be used at any eligible u n it. Id. Section 311, which we discuss at length in Part III.B of th is opinion, requires HUD, during fiscal year 2006, to take c e rta in actions in the course of "managing and disposing of any m u ltif a m ily property" that it owns or holds and that has "rental a s s i s t a n c e payments under Section 8 . . . attached to any d w e llin g units in the property." Pub. L. No 109-115, § 311, 119 S ta t. 2396. 4
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c o n tin u e d assistance and therefore failed to comply with the te rm s of Section 311. Accordingly, we reverse the District C o u r t' s grant of summary judgment and hold that HUD must re in s ta te the HAP contract at the property. We also conclude th a t the grant of summary judgment on the issue of relocation a ss is ta n c e was improper and remand for additional fact-finding o n the issues of whether the tenants were displaced due to a f e d era lly financed project and, if so, whether the tenants who w e re entitled to relocation assistance at URA levels received s u c h assistance. I. A . HUD Inspections and Foreclosure Recommendation E a c h resident of Third East Hills Park had an opportunity to become a shareholder in the Co-op by paying a membership f e e. When the Co-op was established in 1974, the fee was $350; th is amount has varied over the years. In 1976, the Co-op e n te re d into a Section 8 HAP contract with HUD. The contract w a s renewed in 2001 for a twenty-year term. Under the HAP c o n tra c t, HUD pays a portion of each eligible tenant's monthly r e n t, so long as the Co-op meets certain contractual obligations. A m o n g these, the HAP contract requires the Co-op to lease units o n the property to eligible low-income families and to maintain a n d operate the housing units and related facilities to provide " d e c e n t, safe, and sanitary housing." (App. at 707.) T h e contract also provides that, if HUD determines that th e Co-op has failed to comply with the contract, [H U D ] shall notify the [Co-op] of (1) the nature o f the non-compliance, (2) the actions required to 5

b e taken and the remedies to be applied on a c co u n t of the non-compliance (including actions b y the Owner to cure the non-compliance and, w h e re appropriate, abatement of housing a ss i s ta n c e payments in whole or in part and re c o v e ry of overpayments), and (3) the time w ith in which the [Co-op] shall respond with a s h o w in g that it has taken all the actions required o f [it]. If the [Co-op] fails to respond or take a c tio n to the satisfaction of [HUD], [HUD] shall h a v e the right to terminate the Contract in whole o r in part or take other corrective action to a c h ie v e compliance. (Id . at 723.) H U D inspected the property, to ensure compliance, th ro u g h its Real Estate Assessment Center ("REAC"). Annual in s p e c tio n s , with the purpose of ensuring that units were in a d e c e n t, safe, and sanitary condition, were performed in a c co rd a n c e with HUD regulations. The regulations provide for u s e of a 100-point scale. They also allow for inspection of "a s ta tis tic a lly valid sample of the units in [a Public Housing A u th o rity's] public housing portfolio." 24 C.F.R. § 9 0 2 .2 0 (b )(1 ). Although the property at issue here was not o w n e d by a public housing authority, this same sampling p ro c e ss was applied. R E A C inspected Third East Hills Park on October 9, 2 0 0 2 ; December 5, 2003; and September 22, 2004. The October 2 0 0 2 inspection resulted in a score of 53. A May 2003 letter id e n tifie d the deficiencies and gave the Co-op sixty days to 6

co rrect them. The December 2003 inspection resulted in a score o f 55. A June 2004 follow-up by HUD's Departmental E n f o rc e m e n t Center noted numerous deficiencies, many of w h ic h had been found in prior inspections. HUD issued a w ritten notice on July 12, 2004, giving the Co-op thirty days to c o rre c t deficiencies and certify compliance and stating that f a ilu re to do so would cause HUD to pursue any and all re m e d ie s , including abatement or suspension of the HAP c o n tra c t and possibly foreclosure. The September 2004 r e i n s p e c tio n resulted in a score of 43 points. Plaintiffs c o n te n d e d before the District Court that all exigent deficiencies w e re corrected within three business days of the inspection and th a t they disputed many of the non-exigent deficiencies. H U D sent a "notice of abatement" to the Co-op President o n November 10, 2004, explaining that the Co-op had failed to a d d re ss the deficiencies outlined in prior letters and was th e re f o re in default on the HAP contract. (App. at 745.) The n o tice stated that HUD would abate payments on all of the units in the property and forbid the Co-op from accepting new Section 8 tenants. On the same day, HUD sent a separate letter to the C o -o p President. It stated that HUD would initiate foreclosure p ro c e ed in g s on the property's mortgage, which was in technical d e f a u l t due to the failure to correct the physical deficiencies. H U D would provide an opportunity to show legal reasons why a foreclosure should not occur and allow twenty days for the Coo p to submit its position in writing. The letter also stated that, a t the Co-op's request (within seven days), a meeting would be s c h e d u le d ­ at the Atlanta, Georgia office of HUD ­ to hear any le g a l reasons why HUD should not foreclose upon the property. (Id . at 780-81.) 7

T h e local HUD office sent a memorandum, also on N o v e m b e r 10, 2004, to HUD's Atlanta Multifamily Property D is trib u tio n Center, recommending foreclosure on the property. T h e memo included the prior inspection reports and other d o c u m e n tatio n . It also included a document entitled "Field O f f ic e Foreclosure Recommendation," which described the p ro p erty. The Recommendation noted that the property adjoined tw o other affordable housing developments, which had both b e e n sold to developers, who were awarded low-income tax c re d its and would be improving those properties. According to th e Recommendation, Third East Hills Park, in its current c o n d itio n , would negatively affect the success of the other p ro p e rtie s. The area was described in the Recommendation as " h e av ily impacted with subsidized housing." (Id. at 748.) The R e c o m m e n d a tio n also noted many over-housed units at the p ro p e rty, meaning that the occupants were living in larger units th a n necessary for their household size. It concluded that the p ro p e rty should be sold to the City of Pittsburgh and the number o f units reduced. In response, the Atlanta office requested additional in f o rm atio n regarding the property's fiscal condition. On F e b ru a ry 9, 2005, an architecture firm retained by HUD issued a Comprehensive Repair Survey and estimated the total cost of re p a irs at the property to be $2,497,098. (Id. at 822.) HUD d e te rm in e d that the repair costs and operating expenses at the p ro p e rty exceeded the potential property income and "as-is v a lu e ." Plaintiffs dispute this analysis. As they note, a question a t the bottom of HUD's Sales Analysis form ­ which analyzed re p a ir costs, operating expenses, and potential income ­ s p e c if ic a lly asks whether the project is financially viable after 8

re p a irs , and the answer given is "yes." (Id. at 822.) The form a ls o states that the project would produce an annual "net o p e ra tin g income" of $343,934. (Id.) B . Displacement of Residents In November 2004, during the same period that it sent the C o -o p a "notice of abatement" and recommended foreclosure on th e property, HUD also sent a "notice of displacement" to re sid e n ts informing them of its intent to relocate them for " h e alth , safety, and security reasons." (Id. at 784.) Residents w ith executed leases would receive moving expenses, and in c o m e - elig ib le tenants would receive a voucher for Section 8 te n a n t-b a se d rental assistance. The letter also announced a D e c e m b e r 2, 2004 meeting to discuss relocation benefits.4 H U D sent another letter on February 10, 2005 to all residents, a d v isin g them of HUD's intent to foreclose on the property " w ith in the next few months." (Id. at 813.) It stated that tenants re c eiv in g project-based rental assistance would receive Section 8 voucher assistance if such assistance was available and the te n a n t was eligible. It also provided some of the tentative terms a n d conditions of the foreclosure sale and gave residents a

The organization that HUD contracted with to provide th e relocation assistance, Lord and Dominion Investments M a n a g em e n t, sent a letter to residents on or about December 8, 2 0 0 4 . The letter informed the residents that the Co-op Board P r e sid e n t had requested that Lord and Dominion no longer use a meeting room on the property to provide relocation assistance a n d that, as a result, it would be moving off the property. 9

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n u m b e r to call with questions or to offer input regarding the process. O n June 20, 2005, HUD issued a notice to residents, in f o r m in g them that relocation assistance would end at the close o f business on July 31, 2005. Residents were required to have m o v e d out by that date in order to receive assistance. Those w h o moved out after that date and were certified as eligible for a Section 8 voucher could still receive one, but would not obtain r e lo c a tio n assistance. HUD terminated the HAP contract on M a rc h 10, 2006. The majority of residents moved out with r e lo c a t i o n assistance, but the parties agree that as of at least O c to b e r 26, 2006, fourteen residents remained. C . Sale and Purchase of the Property In March 2005, shortly after HUD had informed residents o f its intent to foreclose, the Urban Redevelopment Authority of P itts b u rg h ("URAP") informed HUD that it might be interested in purchasing the property. (Supp. App. at 27.) It requested that H U D consider maintaining project-based Section 8 assistance fo r residents who had not moved at the time of foreclosure. In a n April 2005 response, HUD said it would consider selling the p ro p e rty to URAP, but that the project-based HAP contract w o u ld not be renewed, as such continuation is "contrary to c u rre n t HUD policy." (Id. at 29.) O n June 9, 2006, HUD authorized payment to URAP of a $3,400,000 "up-front grant" contingent on HUD acquiring the p ro p e rty through the foreclosure sale. HUD notified remaining re sid e n ts on June 22, 2006 that it intended to sell the property to U R A P immediately if it acquired it at auction. (App. at 877.) T h is June 2006 notice included a copy of HUD's disposition 10

p la n , with details regarding the transfer of title. (Id. at 878-80.) It asked for written comments within thirty days. The d is p o s itio n plan provided that URAP would, within twelve m o n th s of taking title, relocate any remaining residents, either o n or off site, in order to facilitate redevelopment. URAP would a lso reimburse residents for moving expenses and "endeavor to p ro v id e an opportunity to apply for readmission to the re d e v elo p e d property to all current and relocated residents who d e sire to return." (Id. at 879.) HUD received no comments on th is initial disposition plan within the thirty-day period. It f in a liz e d and approved the plan on July 25, 2006. (Supp. App. a t 32-35.) H U D and URAP entered into a contract for sale of the p ro p erty, conditioned on HUD obtaining title at the foreclosure s a le . (App. at 883.) The contract included a rider requiring U R A P to relocate remaining residents within twelve months, c o m p l y with relevant statutes and regulations, reimburse re sid e n ts for moving expenses, and provide notice of any e x p e c te d displacement. (Id. at 904-05.) HUD purchased the p ro p e rty at foreclosure on October 6, 2006 and immediately tran sfe rred it to URAP through a deed that included this rider. U R A P subsequently entered into a Memorandum of U n d e rsta n d in g with Third East Hills Limited Partnership (" T E H L P " ) and sold the property to TEHLP, which was to d e m o l i s h existing units and renovate the property. A p p ro x im a te ly thirty three-bedroom units were to be created, w ith special mortgages and subsidies to make them affordable to most former residents of the property. First priority was to be g iv e n to those residing on the property on or after October 26, 2 0 0 6 . Second priority would be given to Co-op members living 11

a t the property on or after November 10, 2004. Anyone else liv in g at the property on or after November 10, 2004 would re c e iv e third priority. D . Procedural History P la in tif f s filed an "emergency complaint" in this matter a n d sought a Temporary Restraining Order ("TRO") on July 26, 2 0 0 6 . The District Court granted the TRO on July 27, 2006. A f te r receiving written submissions and holding a hearing on the m a tte r, the Court denied a preliminary injunction request on A u g u s t 9, 2006. On January 19, 2007, the District Court granted D e f en d a n ts ' motion to dismiss, dismissing all but one claim for la c k of subject matter jurisdiction and the remaining claim ­ a lle g in g the violation of Section 311 ­ for failing to state a c la im . The case was closed. P la in tif f s promptly filed a motion for reconsideration, w h ich the Court granted, reopening the case. The District Court f o u n d that its prior opinion was based in part on the Defendants' m is s ta te m e n t of "HUD's position regarding the applicability of § 311 to the disposition of HUD held mortgages." Massie v. U .S . Dep't of Hous. and Urban Dev., No. 06-1004, 2007 WL 6 7 4 5 9 7 , at *2 (W.D. Pa. Mar. 1, 2007). HUD's counsel a c k n o w le d g e d that, at the time its prior brief was drafted, c o u n se l "did not know that HUD Office of Multifamily Housing P ro g ra m s had determined that it would comply with § 311 in its d isp o sitio n of both multifamily properties that the Secretary o w n s and multifamily mortgages that the Secretary holds." Id. T h e District Court also found, contrary to its prior ruling, that it d id have jurisdiction to review a claim that HUD failed to c o m p l y with its own regulations as well as the Plaintiffs' due 12

p ro c e ss claims. The Court issued an order clarifying that three c la im s remained: (1) the alleged violation of Section 311; (2) H U D ' s alleged violation of Plaintiffs' procedural due process rig h ts , for failing to provide Plaintiffs with an opportunity at the f o re c lo su re hearing to present factual (and not just legal) o b jec tio n s to the foreclosure; and (3) HUD's failure to comply w ith its own regulations for management and disposition of the H U D -h e ld mortgage at Third East Hill Park. T h e re a f ter , the Court denied Plaintiffs' request for merits d isco v e ry under the Administrative Procedures Act ("APA"). T h e parties filed cross-motions for summary judgment, and the D is tric t Court granted Defendants' summary judgment motion o n all claims. We discuss the District Court's reasoning in d e tail infra. The Court then denied Plaintiffs' motion for re c o n sid e ra tio n , which it found merely rehashed prior a rg u m e n ts . This appeal, from the denial of reconsideration, f o ll o w e d .5 P lain tiff s raise three issues in their brief on appeal. First, th e y contend that HUD violated Section 311 and accordingly th e y seek an order compelling HUD to maintain the project-

The Plaintiffs entered a Stipulation of Non-Interference o n December 4, 2007. In this stipulation they acknowledged th a t the property had been conveyed to HUD, from HUD to U R A P , and then from URAP to TEHLP. Under the terms of the stip u latio n , no members of the Plaintiff class would seek to re v e rs e the foreclosure sale or seek any equitable relief that c o u ld jeopardize the right of TEHLP to redevelop the property. 13

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b a se d Section 8 rental assistance at the property. Second, they c la im that the District Court erred in finding that HUD was not re q u ire d to provide a higher level of relocation assistance, in a c c o rd a n c e with 24 C.F.R. § 290.17(d). Third, in response to o u r request for supplemental briefing, they argue that the entire P la in tif f class, and not Jean Massie alone, filed a proper notice o f appeal from the District Court's decision. Because this final iss u e shapes the scope of our review, we will address it first. II. O u r review of the District Court's grant of summary ju d g m e n t is de novo. Nova Chems., Inc. v. Sekisui Plastics Co., 5 7 9 F.3d 319, 323 (3d Cir. 2009). We construe the facts in the lig h t most favorable to the nonmoving party. TKR Cable Co. v. C a b le City Corp., 267 F.3d 196, 199 (3d Cir. 2001). Summary ju d g m e n t is appropriate if there are no genuine issues of m a te r ia l fact and the moving party is entitled to judgment as a m atter of law. Fed. R. Civ. P. 56(c). P la in tif f s bring claims pursuant to the Administrative P r o c e d u re Act ("APA"), seeking to "compel agency action u n la w f u lly withheld." 5 U.S.C. § 706(1). As one of our sister c irc u its has held, this provision "does not give us license to `c o m p e l agency action' whenever the agency is withholding or d e layin g an action we think it should take. Instead, our ability to `c o m p e l agency action' is carefully circumscribed to situations w h e re an agency has ignored a specific legislative command." H e lls Canyon Pres. Council v. U.S. Forest Serv., 593 F.3d 923, 9 3 2 (9th Cir. 2010). In Norton v. Southern Utah Wilderness Alliance, 542 U .S . 55, 61 (2004), the Supreme Court reviewed the scope of 14

ju d ic ia l review of agency inaction. It held that review of an a g e n cy's "failure to act" is limited to a discrete action. Id. at 63. T h e Court reviewed five categories of agency actions, with the c a te g o ry of "relief" including, inter alia, a "grant of money [or] a ss is ta n c e," which would encompass the HAP contract at issue in this case. Id. at 62. "[T]he only agency action that can be c o m p e lle d under the APA is action legally required," as § 7 0 6 (1 ) authorizes courts to compel agency action that is " u n la w fu lly withheld." Id. at 63. The Supreme Court concluded in Norton that "a claim under § 706(1) can proceed only where a plaintiff asserts that an agency failed to take a discrete agency a c tio n that it is required to take." Id. at 64; see also Oil, Chem. & Atomic Workers Union v. Occupational Safety & Health A d m in ., 145 F.3d 120, 124 (3d Cir. 1998) (describing our review u n d e r § 706(1) to include "inaction that is . . . contrary to a sp ec ific Congressional mandate"). Hence, we review HUD's a c tio n s in this case to determine if it "failed to take a discrete . . . action that it is required to take." Norton, 542 U.S. at 64. I I I. A. W e directed the parties to brief the issue of who is, or are, th e proper appellant or appellants in this case. The initial notice o f appeal filed in the case listed "Jean Massie" as the named p a r ty appealing the District Court's order. The notice also in c lu d e d a caption of "Jean Massie, et. al. v. U.S. Department of H o u s in g and Urban Development, et. al." (App. at 1.) An a m e n d e d notice of appeal was subsequently filed and separately d o c k e te d under a distinct case number; it included as the named p a rtie s five plaintiffs, followed by the phrase "on behalf of 15

th e m s e lv e s and all others similarly situated (certified class)." (Id . at 2.) Since this second appeal was untimely, the parties w e re directed by the Clerk to address the attempt to add a d d itio n a l appellants to this case. Plaintiffs stated in response th a t, because the only claims were those asserted by the class as a whole and the class had been certified under Rule 23(b)(2), th e y did not realize that each nominal Plaintiff needed to be lis te d on the notice. HUD argued that we are without ju r is d ic tio n to add parties to the notice of appeal because F e d e ra l Rule of Appellate Procedure 3, which outlines the re q u ire m e n ts for a notice of appeal, is jurisdictional and, a c c o rd in g to HUD, the original notice failed to satisfy Rule 3 ( c ) .6

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Federal Rule of Appellate Procedure 3(c)(1) provides:

(1 ) The notice of appeal must: (A ) specify the party or parties taking the appeal b y naming each one in the caption or body of the n o tic e , but an attorney representing more than one p a rty may describe those parties with such terms a s "all plaintiffs," "the defendants," "the plaintiffs A , B, et al.," or "all defendants except X"; (B ) designate the judgment, order, or part thereof b e in g appealed; and (C ) name the court to which the appeal is taken. A separate provision, in Rule 3(c)(3), specifically deals with c la s s actions. It states: 16

T h e Supreme Court has held that Rule 3(c) is ju risd ictio n a l in nature and that a court may not waive its ju ris d ic tio n a l requirements, even for good cause, if it finds that th e y have not been satisfied. Torres v. Oakland Scavenger Co., 4 8 7 U.S. 312, 317 (1988). We conclude that Massie complied w ith Rule 3(c) by using the District Court's caption (which in c lu d e d "et. al.") and naming the lead plaintiff in the blank on th e Notice of Appeal form. Rule 3(c)(1)(A) permits specifying " th e party or parties taking the appeal by naming each one in the c a p tio n or body of the notice." The caption on the notice of a p p e a l included "Jean Massie et. al." W e also find that the notice of appeal satisfied Rule 3 (c )(3 ), which states that the notice of appeal in a class action " is sufficient if it names one person qualified to bring the appeal a s representative of the class." HUD relies on the Seventh C irc u it's decision in Marrs v. Motorola, Inc., 547 F.3d 839, 840 (7 th Cir. 2008) (per curiam), which held that Rule 3(c)(3) r e q u ir e s the notice of appeal to specify that the class re p re se n ta tiv e is appealing in a representative capacity. The M a r r s opinion does not provide detail regarding the nature of th e notice filed in the case, but states that the notice contained n o indication that the appeal was intended to be in a re p re se n tativ e capacity and "does not mention other claimants o r a class." Id. Although the notice specified the judgment b e in g appealed, there is no discussion in Marrs of the (3) In a class action, whether or not the class has b e e n certified, the notice of appeal is sufficient if it names one person qualified to bring the appeal a s representative of the class. 17

a p p lic a tio n of Rule 3(c)(1) and whether a caption with "et. al." w a s included in the notice, as is the case here. Regardless of th e se potential factual distinctions, we disagree with the Seventh C irc u it' s interpretation of Rule 3(c)(3) and find that it merely re q u ire s that a person who is "qualified to bring the appeal as re p re se n ta tiv e of the class" be named in the notice of appeal and n o t that the notice expressly state that the individual is in fact a p p e a lin g in a representative capacity. As noted, we also find th a t the class was named in the caption of the notice of appeal, satisfyin g Rule 3(c)(1)(A). O u r decision accords with those of circuit courts that h a v e faced similar situations. In Olenhouse v. Commodity C r e d it Corp., the Tenth Circuit stated that "[w]hile we d is c o u ra g e use of the phrase `et al.' to identify any group of a p p e lla n t s, we agree where a class has been certified, the phrase p ro v id e s sufficient notice of who is taking the appeal to satisfy th e requirements of Fed. R. App. P. 3(c)." 42 F.3d 1560, 1572 (1 0 th Cir. 1994). Here, the phrase "et al." had been used in the c a p t io n of the Notice of Appeal, and the singular "plaintiff's" a p p e are d in the body. In Ford v. Elsbury, 32 F.3d 931, 934 (5th C ir . 1994), the Fifth Circuit found that Rule 3(c), which had just b e e n amended in 1993 with the intent of "liberaliz[ing] the p le a d in g requirements for a notice of appeal," was satisfied. " T h e style of the notice identified the plaintiffs as `Undray D. F o r d , et al.,' and the body of the notice identified the appealing p a rtie s as the ``Ford' plaintiffs.'" Id. at 933. The court deemed th i s sufficient as to all the plaintiffs in the uncertified class a c tio n on appeal. A c c o r d in g ly, we find that an appeal on behalf of all class m e m b e r s is properly before us. 18

B. P la in tif f s argue that HUD failed to comply with Section 3 1 1 when it terminated the HAP contract at Third East Hills P a rk . They contend that the District Court erred when it d e f erre d to HUD's interpretation of the applicability of Section 311. S e c tio n 311 provides: N o tw ith sta n d in g any other provision of law, in f is c a l year 2006,7 in managing and disposing of a n y multifamily property that is owned or held by t h e Secretary of Housing and U r b a n D e v e lo p m e n t, the Secretary shall maintain any re n ta l assistance payments under Section 8 of the U n ite d States Housing Act of 1937 that are a tta c h e d to any dwelling units in the property. To th e extent the Secretary determines that such a m u ltif a m ily property owned or held by the S e c re ta ry is not feasible for continued rental a ss is ta n c e payments under such section 8, based o n consideration of the costs of maintaining such p a ym e n ts for that property or other factors, the S e c re ta ry may, in consultation with the tenants of th a t property, contract for project-based rental a ss i s ta n c e payments with an owner or owners of o th e r existing housing properties, or provide other re n ta l assistance. Fiscal year 2006 ran from October 1, 2005 through S e p te m b e r 30, 2006. 19
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T h e text of this provision presents three questions that will s tru c tu re our analysis: (1) what does it mean for a "rental a ss is ta n c e payment" to be "attached to any dwelling units in the p ro p e rt y" ; (2) what is the test for whether continued rental a ss is ta n c e is feasible; and (3) what is the nature of the c o n su lta ti o n required between HUD and the tenants? This p ro p e rty clearly satisfied the "owned or held" element of S e c tio n 311, as HUD held the mortgage, a point that the parties d o not dispute. 1. In order for Section 311 to apply to HUD's disposition of th e property, the rental assistance payments must have been " a tta c h e d to . . . dwelling units in the property" during fiscal yea r 2006. Noting that the statute does not define the term " a tta c h ed ," nor did the parties provide any case law interpreting th e term, the District Court drew on a dictionary definition, "to f a st or affix; join; connect." (App. at 20.) The Court concluded th at, since all rental assistance payments on the units were a b a te d as of November 10, 2004, ­ no rental assistance p a ym e n ts were attached to any of the units in fiscal year 2006 a n d hence Section 311 did not apply. Plaintiffs and their amicus a rg u e that instead the crucial date is March 10, 2006, when the H A P contract was terminated. On this argument, the housing a ss is ta n c e payments, which were only suspended during the a b a te m e n t period, remained attached to the property, for the p u rp o s e s of Section 311, so long as the HAP contract had not b e e n terminated. H U D contends that the crucial date is the date of f o re c lo s u re , October 26, 2006, which came after the end of 20

f is c a l year 2006, rendering Section 311 inapplicable. HUD c la im s this date is important as the statute refers to "managing a n d disposing" of property. The foreclosure, according to HUD, is the act of disposing. Plaintiffs reject this and contend that " m a n a g in g and disposing" must be read to include activities in fu rth era n ce of disposing of the property that began long before th e foreclosure sale itself. The act of terminating the HAP c o n tra c t, they contend, is part of this process of managing and d is p o s in g of the property. We agree with Plaintiffs and find the n a t u ra l reading of "managing and disposing" is that this phrase re f ers to a process, which would include, among other steps, the te rm in a tio n of the HAP contract. "Managing and disposing" d o e s not, as HUD argues, refer solely to the precise moment of f o re c lo s u re . See 12 U.S.C. § 1701z-11 (outlining manner in w h ic h HUD is to manage and dispose of a multifamily housing p ro jec t). Moreover, HUD adopted this same interpretation in its o w n memorandum entitled "Fiscal Year 2006 Property D is p o s itio n Program" ("HUD Memorandum"), which was iss u e d by the Deputy Assistant Secretary for Multifamily H o u s in g Programs to "provide instructions . . . regarding p ro p e rty disposition requirements for the [Fiscal Year] 2006." (A p p . at 83.) The memorandum expressly states that Section 3 1 1 applies to properties "for which the Secretary holds the m o r tg a g e and is in the process of disposing [of] the property at f o re c lo s u re ." (Id. at 86) (emphasis added).8
8

The HUD Memorandum provided, in relevant part, that:

[ T ] h e Secretary is required to maintain the p ro je c t-b a se d Section 8 HAP contract in any m u ltif a m ily property that the Secretary owns or 21

for which the Secretary holds the mortgage and is in the process of disposing [sic] the property at f o r e c lo s u re . To the extent that the Secretary d e te rm in e s that it is not feasible to continue such a ss is ta n c e for the property, based on the cost of m a in ta in in g such assistance or other factors, the S e c re ta ry, in consultation with the residents, may p ro v id e project-based Section 8 rental assistance a t another existing property (or properties) or p ro v id e "other rental assistance." (See below u n d e r the Feasibility Analysis Section, if it is re c o m m e n d e d that the Section 8 HAP contract s h o u ld be terminated after the foreclosure sale.) N o te : for properties where assistance under the p ro je c t-b a se d Section 8 HAP contract has been a b a te d and the HAP contract has been or will be te rm in a te d upon completion of the relocation of a ll the residents, the Department will not offer the p ro p erty with a HAP contract at the foreclosure s a le . (A p p . at 86.) W e note that HUD's Memorandum is not the type of a g e n cy interpretation of a statute to which we afford deference u n d er Chevron, U.S.A., Inc. v. Natural Resource Defense C o u n c il, Inc., 467 U.S. 837 (1984). Therefore, we do not deem i t an authoritative interpretation of Section 311. In United S ta te s v. Mead Corp., 533 U.S. 218, 226-27 (2001), the Supreme C o u rt held that "administrative implementation of a particular 22

statutory provision qualifies for Chevron deference when it a p p e ars that Congress delegated authority to the agency g e n e ra l ly to make rules carrying the force of law, and that the a g e n cy interpretation claiming deference was promulgated in the e x e rc is e of that authority." Although administrative agency in te rp re ta tio n s entitled to Chevron deference are typically p ro d u c t s of "notice-and-comment rulemaking or formal a d ju d ic a tio n [ ,]" such procedures are not always required. Id. at 2 3 0 -3 1 . However, the Court has held that "interpretations c o n ta in e d in policy statements, agency manuals, and e n f o rc e m e n t guidelines" are not entitled to Chevron deference. Id . at 234 (quoting Christensen v. Harris County, 529 U.S. 576, 5 8 7 (2000)). H U D 's Memorandum, from the Deputy Assistant S e c re ta ry for Multifamily Housing Programs to the directors of th o se programs, is most akin to an agency manual and clearly " lac k [ s] the force of law" and does not "warrant Chevron-style d e f ere n c e." Christensen, 529 U.S. at 587. While this type of i n f o rm a l interpretation could be eligible for lesser deference u n d er Skidmore v. Swift & Co., depending on "the thoroughness e v id e n t in its consideration, the validity of its reasoning, [and] its consistency with earlier and later pronouncements," HUD has n o t argued that the Memorandum is entitled to deference under S k i d m o r e . 323 U.S. 134, 140 (1944); Lawrence v. City of P h ila ., 527 F.3d 299, 316 n.6 (2008). M o re o v e r, we find that HUD's actions in disposing of the p ro p e rty did not even accord with the interpretation of Section 3 1 1 provided by the Memorandum. If anything, as we note, 23

H a v in g rejected HUD's contention that it did not manage o r dispose of the property during the relevant period, we return to the issue of whether housing assistance payments were " a tta c h ed to any dwelling units in the property" during fiscal ye a r 2006. The District Court concluded that due to the a b a te m e n t of housing assistance payments, according to which H U D suspended making payments, the payments were no longer " a tta c h ed to any dwelling units." Plaintiffs emphasize that the H A P contract remained in place at the property until it was ter m in a ted in March 2006, within fiscal year 2006. This d is tin c tio n has practical importance, because so long as the HAP c o n tra c t was not terminated, payments that had been abated or su sp en d ed could be restored if the deficient conditions were re m e d ied , nullifying the reason or reasons for the abatement. A c c o rd in g to Plaintiffs, so long as the HAP contract was not ter m in a ted , payments remained "attached to . . . dwelling units in the property" for the purposes of Section 311. On this reading, the phrase "attached to any dwelling u n its" serves primarily to indicate that Section 311 applies to " p ro jec t-b a se d " Section 8 rental assistance, like that at issue in th is case, rather than "tenant-based" assistance. Hence the issue is not whether units were still receiving payments at the time in q u estio n , which the District Court focused on, but whether a v a lid HAP contract existed at, or was attached to, the property. T h is interpretation accords with the use of the term "attached" i n related portions of Section 8 of the Housing Act. S p e c if ic a lly, the Act provides that "the term `project-based portions of the Memorandum provide support for the Plaintiffs' in te rp re ta tio n of Section 311. 24

a ss ista n c e ' means rental assistance under subsection (b) of this s e c tio n that is attached to the structure pursuant to subsection ( d )(2 ) or (o)(13) of this section." 42 U.S.C. § 1437f(f)(6) (e m p h a sis added); see also Truesdell, 290 F.3d at 162 n.2 (" P ro je c t-b a se d assistance differs from tenant-based assistance i n that the former is tied to a particular unit, whereas the latter e n tails a voucher entitling the participant to select a unit a n yw h e r e in [the relevant] jurisdiction."). Section 1 4 3 7 f ( o )( 1 3 ) (A ) states that "[a] public housing agency may use a m o u n t s provided under an annual contributions contract under th is subsection to enter into a housing assistance payment c o n tra c t with respect to an existing, newly constructed, or re h a b ilita te d structure, that is attached to the structure, subject to the limitations and requirements of this paragraph." (em p h asis added). A lth o u g h the text of Section 311 uses the phrase "rental a s s is ta n c e payments" and does not include the word "contract," w e find, in light of the nature of project-based Section 8 h o u s in g , that the statute should be read to refer to any dwelling u n its for which a HAP contract remains in effect. Therefore, the im p o rta n t issue is whether there was an existing HAP contract a t the property, not whether payments were actually being made o n individual units. In addition, we note that HUD endorsed this in te rp re ta tio n in its Memorandum regarding the "Fiscal Year 2 0 0 6 Property Disposition Program," which interprets Section 3 1 1 . The HUD Memorandum states that "[i]n accordance with S e c tio n 311 . . . the Secretary is required to maintain the projectb a se d Section 8 HAP contract in any multifamily property that th e Secretary owns or for which the Secretary holds the m o rtg a g e and is in the process of disposing [of] the property at 25

f o re c lo su re ." (App. at 86.) The HUD Memorandum expressly re f e re n c e s the HAP contract and not individual payments. It is p e rh a p s for this reason that HUD, in its brief on appeal, focuses o n the foreclosure date and not the District Court's analysis of th e phrase "attached to any dwelling units." W e find the District Court's interpretation problematic f o r another reason. If Section 311 only requires HUD to m a in tain the rental assistance payment amounts that are actively b e i n g made at the time in question, rather than the payments a tt a c h ed to the property through the HAP contract, then much w o u ld depend on the determination of a precise moment of " m a n a g in g and disposing." The HAP contract provides for f lu c t u a tio n s in the payments being made based on vacant units, c h a n g e s in family income or composition, and other factors. (A p p . at 709.) It cannot be that Congress intended for HUD to m a in tain only the precise payments being made at a moment in tim e , without regard for the contract terms that determine and a d ju st the amount of housing assistance payments to be made to a n owner. Nor do we find it reasonable to conclude that C o n g ress would want the determination of whether an entire H A P contract should be maintained at a property to potentially h in g e on whether, at a moment in time or even during a period o f "managing and disposing" of the property, a single unit is or is not actively receiving payments. Although such a situation m a y seem far-fetched, it gives us further reason to reject this re a d in g of the statute, particularly when another interpretation is reasonable, is clearly supported by the use of similar statutory la n g u a g e in related provisions, and, as discussed below, accords w ith the legislative intent. See United States v. Turkette, 452 U .S . 576, 580 (1981) ("[A]bsurd results are to be avoided."). 26

T h e conclusion that Section 311 does not apply to a p ro p e rty when rental assistance payments have been abated w o u ld also effectively render Section 311 inoperative in certain c a se s in which, by its terms, it is clearly intended to apply. This w o u ld violate a core tenet of statutory interpretation, "that no p ro v is io n `shall be superfluous, void, or insignificant.'" In re P h ila . Newspapers, LLC, 599 F.3d 298, 330 (3d Cir. 2010) (c itatio n omitted); see also Mountain States Tel. & Tel. Co. v. P u e b lo of Santa Ana, 472 U.S. 237, 249 (1985) (discussing " e l em e n ta ry canon of construction that a statute should be in te rp r e t e d so as not to render one part inoperative") (citation o m itte d ). Whenever HUD is in the process of managing and d is p o s in g of a multifamily property it abates housing assistance p a ym e n ts . This process is outlined in HUD's agency handbook e n title d "Multifamily Property Disposition ­ Management ( 4 3 1 5 .1 ) ." HUD Handbook 4315.1. The Handbook expressly p ro v id e s that when HUD takes ownership of a multifamily p ro je c t with a HAP contract, the HAP contract "must not be c a n c e le d ." Id. § 5-21. At the same time, the Handbook's A p p e n d i x includes a form for notifying HUD's Regional A c c o u n tin g Division of HUD's acquisition of a property. Id. at A p p e n d i x 5-4. This form notifies the Regional Accounting D iv is io n that, since HUD has assumed ownership of the subject p ro je c t, Section 8 payments to the former owner should be a b a ted , but the "Section 8 Contract and Budget authority re m a in in g on this project must not be recaptured." Id. Hence, a b a te m e n t always occurs when HUD assumes ownership during th e process of managing and disposing of a multifamily p ro p e rty. To find that this abatement process renders Section 3 1 1 inapplicable would cause Section 311 to not apply in s itu a tio n s when the statute's text specifically states that it does 27

a p p ly, when the property "is owned or held" by HUD and HUD is in the process of "managing and disposing" of the property.9 T h e legislative history of Section 311 also supports our re a d in g of the statute. It reveals strong support for project-based S ec tio n 8 housing and statements of concern regarding HUD's c o m m itm e n t to maintaining project-based assistance. In the S e n a te Report, the Senate Appropriations Committee expressed c o n c ern : th a t HUD is not committed to maintaining section 8 project-based housing and may be encouraging o w n e rs to opt out of the program. This would be

We recognize that the HUD Memorandum states, at the c o n c lu s io n of a section analyzing the application of Section 311, th a t "for properties where assistance under the project-based S e c tio n 8 HAP contract has been abated and the HAP contract h a s been or will be terminated upon completion of the relocation o f all the residents, the Department will not offer the property w ith a HAP contract at the foreclosure sale." (App. at 86.) G iv e n our analysis, this passage must be read with the u n d e rs ta n d in g that the "HAP contract has been or will be te rm in a te d " in accordance with the terms of Section 311. We do n o t read this passage as allowing for "exceptional cases" where H U D may simply ignore the requirements of Section 311 when it first abates the contract. (See Appellee's Br. at 17.) To the e x te n t HUD contends that it has the authority to terminate a H A P contract through this method, without having to comply w ith the terms of Section 311, we reject that position as clearly in violation of the terms of Section 311. 28

9

a tremendous mistake since affordable housing n e e d s are growing while the stock of affordable lo w -in co m e housing is shrinking. HUD is directed to report no later than June 30, 2006 on the status o f HUD's efforts to retain section 8 project-based h o u s in g , including a 5-year analysis of units lost a n d retained, by year, State, and locality. HUD is a lso directed to provide an analysis of all efforts m a d e by HUD to preserve low-income section 8 u n its . The Committee also directs GAO to assess H U D 's efforts and success in preserving H U D -a s s is te d low-income housing, especially s e c tio n 8 project-based housing, including re c o m m e n d a tio n s on how better to preserve this h o u s in g . S . Rep. No. 109-109, at 103, reprinted in 2006 U.S.C.C.A.N. 1 2 6 0 (2006) (emphasis added). The District Court, in its own a n a lys is , relied substantially upon a misreading of the legislative h is to ry. The Court analyzed the relevant legislative history and c o n c lu d e d that both houses of Congress intended for HUD to s h if t from a "unit-based" to a "budget-based" program. The C o u rt interpreted "unit-based" as a reference to "project based" S e c tio n 8 assistance and "budget-based" as a reference to " te n a n t based" Section 8 assistance. T h e se terms appear in sections of the Congressional R e p o rt entitled "Tenant Based Rental Assistance." S. Rep. No. 1 0 9 -1 0 9 , at 142; H. Rep. No. 109-153, at 71-74 (2005), 2005 W L 6406124. In this context, the phrases refer to two different w a ys of funding the tenant-based, or voucher, Section 8 p ro g ra m , either a unit-based method (funding a certain number 29

o f vouchers, equivalent to a certain number of units, and a d ju s tin g accordingly each year for changes in rent and other v a ria b le s), or a budget-based method (which would focus on the to ta l budget). The House Report makes this clear, as it notes th a t in the prior year "Congress estimated the costs of the T e n a n t-b a se d program based on units under lease during the th re e -m o n th period that immediately preceded passage of the A c t." H. Rep. No. 109-153, at 72. Similarly, in the Senate R e p o rt the Committee "directs HUD to report no later than June 3 0 , 2006 on the effectiveness of this budget-based approach to v o u c h e r s ." S. Rep. No. 109-109, at 144 (emphasis added). A c c o rd in g ly, we believe that the District Court erred when it in te rp re te d Section 311 as "an attempt to complete the phase-out o f a unit-based program," which it deemed "the overall point b e h in d 109 P.L. 115." Massie, 2008 WL 4443830, at *10. In ste a d , the legislative history reveals Congress's concern with " m a in ta in i n g section 8 project-based housing." S. Rep. No. 1 0 9 -1 0 9 , at 103. Clear statements of the intent behind Section 3 1 1 reinforce our interpretation of the statutory language and o u r conclusion that Section 311 applied to HUD's management a n d disposition of Third East Hills Park. 2. H av in g concluded that Section 311 did apply to HUD's d is p o s itio n of the property, we must determine whether HUD c o m p l ie d with the requirements outlined in the second sentence o f Section 311.1 0 This provision permits HUD to "contract for
10

The relevant portion of Section 311 provides:

30

p ro je c t-b a s e d rental assistance payments with an owner or o w n e rs of other existing housing properties, or provide other r e n ta l assistance," provided that it has determined that the p ro p e rty "is not feasible for continued rental assistance p a ym e n t s." Hence, HUD must first make this infeasibility d e te rm in a tio n before deciding to provide either project-based re n ta l assistance at another location or some other form of rental a ss is ta n c e.1 1 Section 311 further requires that HUD "consult[]

To the extent the Secretary determines that such a multifamily property owned or held by the S e c re ta ry is not feasible for continued rental a ss is ta n c e payments under such section 8, based o n consideration of the costs of maintaining such p a ym e n ts for that property or other factors, the S e c re ta ry may, in consultation with the tenants of th a t property, contract for project-based rental a ss is ta n c e payments with an owner or owners of o th e r existing housing properties, or provide other re n ta l assistance. P u b . L. 109-115, 119 Stat. at 2462. At argument, HUD contended that the feasibility d eterm in atio n was discretionary, noting the presence of the word " m a y." We reject this position as completely unsupported by the s ta tu to ry language. The language makes clear that HUD may p ro v id e other forms of rental assistance only "[t]o the extent the S e c re ta ry determines that [the property] is not feasible for c o n tin u e d rental assistance payments." Pub. L. No. 109-115, § 3 1 1 , 119 Stat. at 2462. Absent such a determination, HUD 31
11

w ith the tenants" before providing another form of rental a ss is ta n c e. Plaintiffs argue that HUD neither determined that th e property was not feasible for continued assistance nor did it p ro p e rly consult with tenants before deciding to provide voucher a s s is ta n c e for use at other properties. We address each of these c o n te n tio n s in turn. In support of their contention that HUD did not determine th a t the property at issue was "not feasible for continued rental a ss ista n c e payments," Plaintiffs cite HUD's own economic f e as ib i lity analysis, including a survey of needed repairs and a " S a le s Analysis," which assessed whether the project would be f in a n c ia lly viable after the repairs were made. The Sales A n a lys is , which considered repair costs, annual expenses, and re n tal income, among other factors, concluded that the property w o u ld produce an annual "Net Operating Income" of $343,933. (A p p . at 821-22.) At the bottom of the analysis, a section e n title d "Project viability after repairs" asked whether the p ro je c t was "Financially viable?" and the answer given was " ye s." (Id. at 822.) H U D failed in its briefing and at oral argument to address th e import of the determination, in its own Sales Analysis, that

"shall maintain any rental assistance payments." Id. Moreover, th is interpretation is expressly contradicted by HUD's own m e m o r a n d u m , which states that "[i]n the event the re c o m m e n d a tio n is not to continue with the project-based S e c tio n 8 HAP contract for all units, the Property Disposition C e n t e r is required to conduct a feasibility analysis." (App. at 88 (e m p h a s is added).) 32

th e project was financially viable. This determination would a p p e ar to foreclose a conclusion that continued rental assistance is "not feasible." HUD contends, however, that the repair su rv e y it commissioned "demonstrated that needed repairs w o u ld cost almost twice the amount of the current mortgage on th e Property." (Appellee's Br. at 40.) It also notes that the Sales A n a lysis , which it also refers to as a "Peer Analysis," d e m o n s tra te d "that repair costs and operating expenses for the p r o je c t far exceeded potential property income and `as-is' v a lu e ." (Id.) Absent, however, from both HUD's analyses d u rin g the period in which it managed and disposed of the p r o p e r ty and its briefs on appeal is any explanation of why these a ss e rtio n s indicate that the property is "not feasible for c o n tin u e d rental assistance payments." Repairs may well have c o st more than the current mortgage, but this does not indicate th a t once repairs are made that it is not feasible to continue to p ro v id e rental assistance payments. This is particularly true w h e re , as here, the analysis expressly concludes that the p ro p e rty will produce a net operating income. H U D further contends that Section 311 does not specify th e standards for a feasibility determination. Section 311 allows H U D to make a feasibility determination "based on c o n sid e ra tio n of maintaining such payments for that property or o th e r factors." Pub. L. No. 109-115, § 311, 119 Stat. at 2462. H U D claims, relying on Chevron, 467 U.S. at 843, that it p o ss e ss e s discretion regarding the form of the feasibility d e te rm in a tio n . Accordingly, it argues that it conformed with the s ta n d a rd s outlined in its memorandum on the "Fiscal Year 2006 P r o p e rty Disposition Program," which includes a section entitled " F e a sib ility Analysis." (App. at 88.) The memorandum states 33

th a t HUD's Property Disposition Center must make a re c o m m e n d a tio n regarding the feasibility of continuing with the S e c tio n 8 contract and must conduct a Peer Analysis and C o m p r e h e n s iv e Repair Survey as part of this process. T h e HUD Memorandum also provides a list of criteria, o n e of which must be satisfied to warrant a determination of n o n -f e a s ib ility. The economic criteria requires a showing that " [ t]h e costs to rehabilitate the property make it economically in f e as ib le to pay the monthly debt service needed to amortize th e cost of rehabilitation and pay the expenses of operating the p ro p e r ty on a monthly basis at current Section 8 HAP contract re n ts ." (Id. at 88.) The rehabilitation costs are to be determined b y the Comprehensive Repair Survey, and the operating costs a r e drawn from the Peer Analysis. As noted, the Peer Analysis, w h i c h considered both the rehabilitation and the operating costs, c o n c lu d e d that an annual net operating income of $343,934 w o u ld be produced and expressly stated that the project was f in a n c i a l l y viable after repairs. (Id. at 822.) As previously n o te d , HUD's memorandum is not entitled to Chevron d ef ere n ce . However, even if we accept and apply the standard e s p o u s e d by HUD for making the feasibility determination, we f in d no basis to accept HUD's position that the property was not f e a s ib le for continued rental assistance. In fact, HUD's own a n a lys is clearly indicates the contrary. Having found that HUD d id not make a proper determination that the property was not f e as ib le for continued assistance, we necessarily conclude that H U D failed to comply with the terms of Section 311 and th e re f o re must reinstate the HAP contract at the property. Even if HUD had properly made a determination that the p ro p e rty was not feasible for continued rental assistance, the 34

re c o rd indicates that HUD failed to consult with tenants in the c o u rse of providing other rental assistance. According to S e c tio n 311, if a determination is made that a property is not f e a sib le for continued rental assistance, "the Secretary may, in c o n su lta tio n with the tenants of that property, contract for p ro je c t- b a s e d rental assistance payments with an owner or o w n e rs of other existing housing properties, or provide other re n ta l assistance." Pub. L. No. 109-115, § 311, 119 Stat. at 2 4 6 2 . This provision requires HUD to consult with tenants re g a rd in g what form of rental assistance it will provide f o ll o w in g termination of a HAP contract. HUD argues that it sa tisf ie d this consultation requirement through the notice it p ro v id e d to tenants of the foreclosure. The notice included a c o p y of the initial disposition plan for the property and gave te n a n ts thirty days to offer written comments regarding the plan. (A p p . at 550.) HUD emphasizes that it even waited until after th is thirty-day comment period, during which no comments were rec eiv e d , before finalizing the disposition plan. (Appellee's Br. a t 40.) A c c o rd i n g to HUD, its consultation process conformed w ith the procedure outlined in the HUD Memorandum. S p e c if ica lly, the memorandum provides: "[i]f a determination is m a d e to offer the property for sale without the current projectb a se d Section 8 HAP contract, the Property Disposition Center w ill request through the appropriate Program Center Director, S e c tio n 8 Tenant Protection vouchers to assist all eligible c u rre n t residents of the property." (App. at 90.) Hence, a c c o rd in g to the process outlined in the memorandum, HUD m a k e s a determination of what form of future assistance to p r o v i d e prior to any actual consultation with the tenants. 35

S e c tio n 311 does not outline the form this consultation m u s t take nor does it define the term. We therefore turn to a d ictio n a r y, the proper starting place for ascertaining the plain m e a n in g of words. The term "consultation" is defined as "a c o u n c il or conference (as between two or more persons) usually to consider a special matter" or "deliberation of two or more p e rs o n s on some matter." Webster's Third New International D ic tio n a r y 490 (1993). In light of this definition, we find that m e re notice of a foreclosure, accompanied by a copy of the i n itia l disposition plan and a request for comments, does not c o n s t itu te consultation. Moreover, the letter providing notice d id not make any reference to the possibility of contracting for c o n tin u e d project-based assistance. HUD's process of d e v e lo p in g an initial disposition plan, without any input from th e tenants, and then providing that plan to the tenants with a re q u e st for written comments simply fails to satisfy the plain m e a n in g of the term "consultation." 1 2 Accordingly, we conclude th a t HUD also failed to comply with Section 311 by not c o n su ltin g with the tenants at the property when deciding what f o r m of assistance to offer. This failure to consult constitutes a

To the extent that HUD would argue that the m e m o r a n d u m 's notice provision provides an interpretation of S e c tio n 311's consultation requirement that is entitled to C h e v ro n deference, this position must be rejected. As already n o te d , the HUD Memorandum is not the type of agency s ta te m e n t entitled to such deference. Moreover, for the reasons n o ted , the process outlined in the memorandum is simply not a p e rm is s ib le construction of the statutory requirement of " c o n s u lta tio n ." 36

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s e p a ra te basis for our conclusion that HUD violated Section 311 a n d therefore must reinstate the HAP contract at the property. C. P la in tif f s raise a second issue on appeal, contending that th e District Court erred when it concluded that 24 C.F.R. § 2 9 0 .1 7 (c ) governs the provision of relocation assistance in this c a se , rather than 24 C.F.R. § 290.17(d). Section 290.17 p ro v id e s for relocation assistance when tenants are displaced f ro m either HUD-owned multifamily properties or such p ro p e rtie s that are subject to HUD-held mortgages. The District C o u rt rejected Plaintiffs' argument that HUD was required, p u rs u a n t to 24 C.F.R. § 290.17(d), to provide relocation a ss is ta n c e at Uniform Relocation Act ("URA") levels.1 3 The C o u rt found that the case clearly fell within subsection (c), and n o t (d), and therefore Plaintiffs were only entitled to relocation assistan ce at the lower levels provided for in subsection (c). S p e c if ic a l ly, the Court held that Plaintiffs did not satisfy the d e f in itio n of "displaced person" in subsection (d), that is, "any p e rs o n (family, individual, business, or nonprofit organization) th a t moves from the real property, or moves personal property f ro m the real property, permanently, as a direct result of a c q u is itio n , rehabilitation or demolition for a federally assisted

The purpose of the URA is to establish "a uniform p o lic y for the fair and equitable treatment of persons displaced a s a direct result of programs or projects undertaken by a F e d e ra l agency or with Federal financial assistance." 42 U.S.C. § 4621(b). 37

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p ro je c t." 1 4 The Court found that HUD's November 10 and 17, 2 0 0 4 notices to Plaintiffs were issued because of indecent c o n d itio n s at the property, and not to further a federally assisted p ro je c t. 1 5 The Court also emphasized that HUD abated rental p a ym e n ts and terminated the contract before HUD published its d is p o s it i o n plan and entered into any contract with URAP.

Federal regulations define a "program or project," w ith in the context of Uniform Relocation Act assistance, as " a n y activity or series of activities undertaken by a Federal A g e n c y or with Federal financial assistance received or a n ticip a ted in any phase of an undertaking in accordance with th e Federal funding Agency guidelines." 49 C.F.R. § 2 4 .2 (a )( 2 2 ). The District Court also found that the November 17, 2 0 0 4 notice (which it incorrectly identifies as November 14), in f o rm e d residents that relocation was necessary due to health, s a f ety, and security concerns and expressed HUD's hope that te n a n ts would relocate. The Court concluded that these in d iv id u a ls were not "displaced" because they were not " re q u ire d to relocate," but instead were given a choice. It is not c le a r how the Court reached this conclusion. The November 17, 2 0 0 4 Notice was entitled "Notice of Displacement." (App. at 7 8 4 .) We cannot agree with the District Court's conclusion that re lo c a tio n was a voluntary choice. The tenor of the letter, read a s a whole, clearly indicates that relocation was presented as n e c e ss a ry and required, not as an option, and that HUD merely w is h e d that tenants would make the process as smooth as p o s s ib le . 38
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P la in tif f s , in their Reply brief, identify record evidence in d ic a tin g that HUD had developed its redevelopment plan b e fo r e "it declared the conditions default or began relocating re s id e n ts ." (Reply Br. at 23.) P lain tiff s argue that, because HUD conveyed the property a t foreclosure to the URAP and provided a grant of $3,400,000 f o r demolition and development, this case falls within the p a ra m e te rs of 24 C.F.R. § 290.17(d), since federal financial a ss is ta n c e was provided.1 6 We agree that the rehabilitation of t h e property was a "federally assisted project." The question th a t remains, however, is whether the tenants were displaced due to this project or instead, as the District Court found, due to c o n d itio n s at the property. We understand Plaintiffs' argument, a t its core, to be that HUD was driven by its intent to redevelop th e property and only used deficient conditions, which it could f e a s ib ly have repaired, as an excuse to foreclose on the property. W ith o u t foreclosing, it would have been unable to transfer o w n ersh ip . HUD does concede that it "has additional regulatory o b lig a t io n s under 24 C.F.R. § 290.17(d) with regard to those r e sid e n t s that declined to exercise their right to relocate as a resu lt of HUD's abatement of the HAP contract." (Appellee's B r. at 46.) Hence, HUD appears to acknowledge that the project w a s federally financed and that these final fourteen residents w e re displaced due to the project (rather than the conditions that

HUD's Handbook on Multifamily Property Disposition p ro v id e s for assistance at URA levels whenever a "project sale is subsidized" and persons are displaced. HUD Handbook 4 3 1 5 .1 , Chap. 13, § 13-5(B)