The Inclusive Communities Project Inc v. The United States Department of Housing and Urban Development

Filing 22

FINDINGS AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE re 8 MOTION to Dismiss for Lack of Jurisdiction filed by The United States Department of Housing and Urban Development. Defendant's motion to dismiss for lack of subject matter jurisdiction [Doc. #8] should be granted in part and denied in part. The motion should be granted on the ground of sovereign immunity with respect to plaintiffs claims for alleged violations of the NHA. (see order) (Ordered by Magistrate Judge Jeff Kaplan on 07/20/09) (lmp)

IN THE LINITED STATESDISTRICTCOURT NORTHERNDISTRICTOF TEXAS D A L L A S DIVISION T H E INCLUSIVECOMMLTNITIES PROJECT,INC. Plaintiff VS. U . S .DEPARTMENTOF HOUSING AND URBAN DEVELOPMENT
Defendant.

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NO.3-07-CV-0945-O

F I N D I N G S AND RECOMMENDATION OF THE U N I T E D STATES MAGISTRATE JUDGE filedamotion andUrbanDevelopment("HUD")has DepartmentofHousing DefendantU.S. Act t o dismissthis actionfor injunctivereliefbroughtundertheAdministrativeProcedures ("APA"), herein,the motion shouldbe grantedin part anddenied stated 5 U.S.C. $ 701, et seq. For the reasons in part. I. Plaintiff The Inclusive Communities Project, Inc. ("ICP") is a non-profit organization that provides assistance minority families participating in the Housing ChoiceVoucher Programunder to 42 et HousingAct of 1937("NHA"), asamended, U.S.C.$ 1437, seq. S e c t i o n8 of the United States ( , S e e Compl. at l, !f 2 &9,n3D. Plf. is The mission of the organization to "breakdown barriersto

the creation of racially and economically inclusive communiti es." (Id. at 1, fl 2). To further this to goal, plaintiff provides mobility and financial assistance low-income African-American families who want to obtain rental housing in predominantly Caucasianareasin and around Dallas. (ld. at with landlordsto obtain Section8 housing includesnegotiating 9 - 1 0 ,tT33).The mobility assistance

provided by plaintiff to its clients in eligible areasat affordablerents. (Id.). The financial assistance and utility deposits. (1d.). i n c l u d e sthe paymentof applicationfees,securitydeposits, and Under the Section8 voucherprogftlm, HUD contractswith local public housing agencies private landlords to pay the difference betweena fair market rent for the areaand the amount paid b y the low-income tenant.r See generally, 42 U.S.C. $ 1a37(o). HUD is responsiblefor establishing fair market rents, or FMRs, for the rental housing market area. See id. 5 1437f(c)(l). The HUD regulations explain how theseFMRs are calculated: Fair Market Rents (FMRs) are estimates of rent plus the cost of u t i l i t i e s , excepttelephone.FMRs arehousingmarket-wideestimates of rents that provide opportunities to rent standard quality housing throughout the geographicarea in which rental housing units are in c o m p e t i t i o n . The level at which FMRs are set is expressedas a percentilepoint within the rent distribution of standardquality rental housing units in the FMR area. FMRs are set at the 40th or 50th percentile rent--the dollar amount below which the rent for 40 or 50 percent of standardquality rental housing units falls. The 40th or 5Othpercentilerent is drawn from the distribution of rents of all units that are occupiedby recentmovers. Adjustmentsaremadeto exclude units. public housing units, newly built units and substandard and current that HUD "usesthe most accurate 2 4 C.F.R. $ 883.1l3(a). The regulationsemphasize data available to develop the FMR estimates," including census data and random digit dialing FMRs for Using this method,HUD annuallyestimates t e l e p h o n esurveys.Seeid. $ 8SS.113(eX1). approximately 350 metropolitan areasand 2,300 non-metropolitan countiesthroughout the United S t a t e s . Seegenerally,Franconia Assoc.v. United States,6l Fed. Cl. 718,760 (2004). The issue in this case involves the geographic area used by HUD to determine FMRs in the Dallas rental h o u s i n gmarket.

I A tenant family may be required to pay up to 40Yoof its monthly adjusted income for rent. See 42 U.S.C.

& (o)(3). $ la37f(o)(2XAXD

The Dallas, TX HUD Metro FMR areais comprisedof eight counties,which are carved out of a larger Dallas-Fort Worth-Arlington metropolitan statistical area defined by the Office of and Budget("OMB"). (SeePlf. Compl. at3-4,flfl 9 & l3). Accordingto plaintiff, this Management practice of using a large multi-county region asthe startingpoint for determining FMR violates both the NHA, which requires HUD to baseFMRs on "market area,"and the Fair Housing Act of 1968 ( " F H A " ) , 42 U.S.C. $ 3601, et seq.,which imposesan affirmative duty on HUD to promote fair h o u s i n g policies. (Seeid. at 11, fl 37). Succinctlystated,plaintiff contendsthat HUD's practice incorporatesrents from predominatelyminority housingmarkets,where many ofthe neighborhoods public andprivate servicesand facilities, andresultsin lower FMRs areblighted and haveinadequate for the Dallas rental housing market area,thereby precluding Section 8 program participants from obtaining rental housing in more affluent Caucasianareas. (Seeid. at 3, tf l0). Instead,plaintiff argues that HUD should use smaller geographic areasto determine FMRs, which would more neighborhoodsand give low-income minority families accuratelyreflect the rent levels in Caucasian (Seeid. at6-7,fl l9). In this lawsuit,plaintiff to e q u a laccess rentalhousingin thoseneighborhoods. seeksbroad equitable relief, including an injunction: (1) compelling HUD to use smaller rental h o u s i n gmarket areas,insteadof large multi-countyregions,as a basisfor determiningFMRs; (2) requiring HUD to establish separateSection 8 program rent levels for separaterental housing markets; and (3) compelling HUD to "considerand further fair housing opportunities" for minority 39). p a r t i c i p a n t sin the Section8 programwhen it setsrent levels. (Seeid. at ll-12, 'lT The case is before the court on defendant'smotion to dismiss for lack of subject matter jurisdiction. As groundsfor its motion, defendantcontendsthat plaintiff lacks standingto bring this suit and that HUD has not waived sovereignimmunity. The issueshave been fully briefed by the p a r t i e sand the motion is ripe for determination.

il. The gravamenof defendant'sstandingargumentis that the remediessoughtby plaintiff will Becausestanding not redressits injuries and amount to nothing more than generalizedgrievances.2 is a prerequisiteto the exerciseof federaljurisdiction, the court considersthis issuefirst, SeeCole v . GeneralMotors Corp.,484 F.3d 717,721(5th Cir. 2007). A. the "The doctrine of standing addresses question of who may properly bring suit in federal court." The Inclusive CommunitiesProject, Inc. v. TexasDept, of Housing & Comm.Affairs,No. at WL 5191935 *2 (N.D. Tex. Dec. 11,2008). To satisfythecase-or3-08-CV-0549-D,2008 controversy requirement of Article III of the Constitution, the plaintiff must establish that it has and that " s u f f e r e d'injury in fact,'that the injury is'fairly traceable'tothe actionsof the defendant, by t h e injury will likely be redressed a favorabledecision." [d.,2008 WL 5191935 at*2, quoting A L 1 1. . B e n n e t t v . S p e a r , 5 2 0 U . S 5 4 , t 6 2 , 1 1 7 S . C t1 1 5 4 , 1 6 1 , 1 3 7 . E d . 2 d 2 8 l ( 1 9 9 7 ) . n i n j u r y i n fact must be "concrete and . . . actual or imminent, not conjectural or hypothetical." Id., quoting of L u j a n v. Defenders Wildlife,504U.S. 555, 560-61,112 S.Ct.2130,2136, 119 L.Ed.2d351 ( 1 9 9 2 ) . Moreover, "the injury must affect the plaintiff in a personaland individual way." Id., q u o t i n g Lujan,ll2 S.Ct.at 2136n.1. Stateddifferently, aparty must assertits own legalrights and interests,and cannot rest its claim to relief on the legal rights or interestsof third parties. See Warth the v . Seldin,422 U.S. 490, 500, 95 S.Ct. 2197,2206,45 L.Ed.2d 343 (1975). For injunctions, plaintiff must also show that it is likely to suffer future injury as a result of the challengedconduct,
2 Defendant also arguesthat plaintiff lacks standing to sue on behalf of its clients, that plaintiff cannot obtain injunctive relief for past injuries, and that any claims basedon FMRs, other than the FMRs currently in effect, are moot. ( S e eDef. Mot. Br. at 10-12, I 5). In its response, plaintiff makesclear that it seeksrelief only for its own injuries and only with respectto HUD's current practice of determining FMRs. (SeePlf. Resp. Br. at20-21). The court therefore declines to addressthese other grounds for dismissal. However, in order to clarify its claims and the nature of relief sought, plaintiff should amend its complaint before this caseproceedsfurther.

will preventthat future injury. SeeJamesv. City of Dallas,254F.3d and that the relief requested v. 5 5 1 ,563 (5th Cir. 2001),cert.denied,l22S.Ct.9l9 (2002),citing City of LosAngeles Lyons,46l However,"iftheinju.yisaccompanied U . S . 9 5 , 102,103S.Ct.1660,1665,75L.F,d.zd675(1983). by any continuing, presentadverseeffects,standingfor injunctive relief can be found." Id., quoting L y o n s , l 0 3 S.Ct. at 1665(internal quotationsomitted). As the party seekingto invoke federaljurisdiction, plaintiff bearsthe burden of proving its Project,2008WL 5191935at*2, citing Lujan,l 12 S.Ct.at s t a n d i n g .SeeInclusiveCommunities 2 1 3 6 . A defendantmay challengestanding by filing a Rule 12(bX1) motion to dismiss. If the a defendant merely brings a Rule 12(bX1)motion, it is considered facial attack,and the court looks them to be true. SeePatersonv. in o n l y to the sufficiencyof the allegations the pleading,assuming 521,523(5th Cir. 1981). The courtmust denythe motion if the allegations Weinberger,644F.2d Project,2008 WL 5191935at *3. a r e sufficient to allegejurisdiction. SeeInclusive Communities A defendantmay also make a factual attack on subject matterjurisdiction by submitting evidence, such as affidavits and testimony. SeeMiddle South Energy, Inc. v. City of New Orleans,800 F.2d providesevidencefactually attackingsubjectmatter 4 8 8 , 490 (5th Cir. 1986). When a defendant jurisdiction, the plaintiff must submit evidenceand prove by a preponderance the evidencethat of the court hasjurisdiction. Id. In the instant case,HUD has submitted an affidavit in support of its any factual mattersnecessary R u l e l2(b)(l) motion. However, nothing in the affidavit challenges to the determinationof standing. The court thereforetreatsthe motion as a facial attack,rather than SeeEstateofMerkelv.UnitedStafes,No.3-06-CV-1891-D,2008 afactualattack,onjurisdiction. W L 5378183at*2 n.2 (N.D. Tex. Dec. 23,2008) (treatingRule l2(b)(l) motion as facial attack did where affidavits submittedby defendant not challengeany factual matterbearingonjurisdiction);

2006 WL No. 3-06-CV-0038-D, Health & Bene/itFund v. Winstel, IBEW-NECA Southwestern (same). 9 5 4 0 1 0 *l (N.D.Tex. Apr.12,2006) at
B. Defendantcontendsthat plaintiff lacks standingto challengeHUD's practice of determining the FMRs for the Dallas rental housing market because injunctive relief it seekswill not redressits injuries. Under the third requirement of Article III standing,plaintiff must show that it is "'likely,' by the to a s opposed merely'speculative,'that irju.y will be redressed a favorabledecision." Luian, plaintiffs allegedinjuries at the doesnot directly challenge 1 1 2 S.Ct. at2736. Although defendant to pleading stage,(see Def. Reply at2), it is necessary briefly discussthe nature of those injuries b e f o r e examiningredressability. l. A non-profit fair housin gorganization,suchasplaintiff, canestablishinjury by showing that the challengedunlawful conduct frustratesits mission and requiresit to devote significant resources to counteractingthe discriminatory effects of that conduct. SeeHavens Realty Corp. v. Coleman , 4 5 5 U.S. 363,379,102 S.Ct. lll4, ll24-25,71L.8d.2d214 (1989). Here,plaintiff allegesthat

HUD's practice of using a large multi-county region as the starting point for determining FMRs in resultsin racial segregation the Dallas rentalhousingmarket,therebyfrustratingplaintiffs mission of promoting equal housing opportunities and requiring the expenditure of more time and more 35). In particular,plaintiff alleges m o n e y to achieveits goals. (SeePlf. Compl. at7,\26 & 10,'lT that HUD's rent setting policy directly and adverselyaffects its interestsby: . reducing the number of units that plaintiff can use to help its clients find housing in non-minority concentrated market afeas:

increasing amountof time per client that plaintiff must the in in spend orderto helpits clientsfind housing non-minority concentratemarketareas; d that the increasing amountof frnancialassistance plaintiff in in m u s tspend orderto help its clientsfind housing nonand marketareas: minoritv concentrated
discouragingfamilies who work with plaintiff from choosing dwelling units in market areasthat offer racially integrated of h o u s i n gbecause the costfactorsinvolved in sucha choice. ( S e e Plf. Compl. at 10, 'll 35). Similar allegations of harm suffered by non-profit housing organ\zationshave been held sufficient to establishinjury for standingpurposes. See,e.g. Havens Project,2008 WL 5191935at *4. R e a l t y , 102 S.Ct. at ll23-25; Inclusive Communities 2. by The issueraisedby defendantis whetherthe remedyrequested plaintiff is likely to redress its injuries. The court haslittle difficulty concludingthat an injunction requiring HUD to usesmaller insteadof alargemulti-countyregion,asabasisfor determiningFMRs r e n t a lhousingmarketareas, would result in higher rental rates in predominantly Caucasianareasof Dallas, thereby expanding o p p o r t u n i t i e sfor low-incomeAfrican Americanfamiliesto obtain Section8 housingin thoseareas. plaintiff likely will haveto availablein non-minorityareas, W i t h more rentalhousingopportunities neighborhoods.At housingin desegregated s p e n dlesstime and lessmoney helping clients secure least at the pleading stage,plaintiff has sufficiently demonstratedthat it is likely, as opposedto by m e r e l y speculative,that its injuries will be redressed a favorable decision in this case. See Project,2008WL 5191935at*6.3 I n c l u s i v eCommunities
3 This conclusion is bolsteredifthe courttreats defendant's Rule 12(bXl) motion as a factual attack,ratherthan jurisdiction. In an attempt to counter defendanfs argumentthat the relief requestedin this lawsuit a facial attack, on areas,plaintiffrelies on the affidavit expandhousingopportunitiesin predominantlyCaucasian w o u l d not necessarily McGee, who states: Director, Stephanie o f its Mobilify Assistance

c.
Defendant further contendsthat plaintiffs requestfor a broad injunction eliminating racial disparities in the Dallas rental housing market areais nothing more than a "generalizedgrievance." A t issueis plaintiffs requestfor: Section8 program rent an injunction compelling HUD to set separate rental housing markets at dollar amountsthat levels for the separate provide DHA's Black Section I voucher program participants equal accessto rental housing in the White rental housing markets. Equal a c c e s sis achievedby setting rent levels using the 50th percentile basis for each of the rental housing markets and eliminating the disparities between the number and percent of dwelling units made available in predominately White rental housing markets and the number and percent of dwelling units made available in predominantly minority rental housing markets. ( S e eDef. Mot. Br. at l0 & Def. Reply at2, citing Plf. Compl. at 12,fl 39D). Relying on the Fifth that the argues C i r c u i t ' s decisioninJamesv. City af Dallas,254 F.3d 551 (5th Cir. 2001),defendant i n j u n c t i o n soughtby plaintiff is too generalto supportArticle III standing.

During the period from May 2007 through September2007 ICP negotiatedwith 44 landlords in predominantly white areason behalf of African American Section 8 voucher participants concerning the issuesraised by the rent being higher than the the Section 8 rent as set by HUD Fair Market Rent level. In 20 instances, landlord to rent the unit. In refused to lower the rent even though the tenant was eligible these cases,but for the fact that rents set by the HUD Fair Market Rent levels were lower than the rent chargedby the landlord, the Section 8 participant would have rented that specific unit in a predominately white area' During that sameperiod ICP was able to negotiate with 24 landlords who agreed to lower the contract rent for the dwelling unit in order for an African American Section 8 participant to rent the unit. In thesecases,ICP was only able to obtain the rent reduction by paying the landlord a bonus. The bonuswas high enoughin these instancesfor the landlord to forego its usual rent and lower the rent chargedto the during S e c t i o n8 participant. ICP has spent$23,686.50for thesebonuspayments period. this (SeePlf. Resp. App. at 3). This evidence,if consideredby the court, supportsthe conclusion that the injury alleged by plaintiff--the increasedtime and costs associatedwith helping minority families obtain rental housing in non-minority by ireas-likely would be redressed an injunction requiring HUD to use smaller rental housing market areasas the basis for determining FMRs.

Jameswas a classaction brought by two African-American homeownersagainstthe City of Dallas and HUD challenging the demolition of repairable single-family homes in predominately minority neighborhoods without proper notice or a walrant, and charging that the "no-notice" d e m o l i t i o n programwas the result of intentionalracediscrimination. James,254 F.3d at 558. In their complaint, the plaintiffs sought, inter alia, "a permanent injunction requiring HUD to administer all of its housing programs in a manner that will eradicate the effects of HUD's discriminatory demolition practicesf.f" Id. at56l. The Fifth Circuit held that this broad requestfor injunctive relief was not sufficiently targeted to remedy plaintiffs' specific injuries. Id. at 568. T h e r e f o r e ,the plaintiffs lacked standingto seek such relief. Id., citing Warth,95 S.Ct. at2205 (recognizing that a "generalizedgrievance" sharedin substantially equal measureby all or most c i t i z e n s cannotprovide standingto requestinjunctive relief. the U n l i k e the injunction requestedinJames, relief soughtby plaintiff in the instantcaseis not a "sweepingrequestto generallyeradicatethe effectsof discrimination." Cf, id. Instead,plaintiff rental asks the court to require HUD to "set separateSection 8 program rent levels for the separate housing marketsat dollar amountsthat provide DHA's Black Section8 voucherprogramparticipants to e q u a laccess rentalhousingin the White rentalhousingmarkets." (SeePlf. Compl. at 12,fl 39D). is P l a i n t i f f goes on to suggestthat "[e]qual access achievedby settingrent levels using the 50th percentile basis for each of the rental housing markets and eliminating the disparities betweenthe number and percentofdwelling units madeavailableinpredominately White rental housingmarkets and the number and percent of dwelling units made available in predominantly minority rental h o u s i n gmarkets." (/d ). Readin its entirety,it is clearthat plaintiff doesnot seeka broadinjunction arguesin its motion. (See as t o "eliminat[e] racial disparitiesin housingopportunities," defendant D e f . Mot. Br. at 10). By enjoining HUD from using a large multi-county region as a basis for

rental housing rent levels for separate determining FMRs and requiring the agencyto set separate markets defined by smaller geographicareas,plaintiff is attemptingto further its mission of helping to low-income minority families gain access the rental housing market in predominantly Caucasian areasof Dallas. Such relief is targetedto remedyplaintiffs specific inj,rry of having to spendmore grievance. a" its " t i m e andmore moneyto accomplish goals,anddoesnot seekto redress generalized Thus, plaintiff has demonstratedArticle III standingto prosecutethis claim for injunctive relief.

m.
The court next considerswhether plaintiffs claims under the APA, through which it seeks redressfor alleged violations of the NHA and the FHA, are barred by the doctrine of sovereign i m m u n i t y . While recognizingthat the APA allows a personto seekjudicial review for an alleged legal wrong committed by a federal agency,see5 U.S.C. g 702, defendantarguesthat this statutory w a i v e r of sovereignimmunity doesnot apply to plaintiffs claims because:(l) HUD's rent-setting remedies. practices are committed to agencydiscretion by law; and (2) plaintiff has other adequate A. "The basic rule of federal sovereignimmunity is that the United Statescannot be suedat all without the consentof Congress."S/. TammanyParishv. Federal EmergencyManagementAgency, 5 5 6 F.3d 307,316 (5th Cir. 2009),quotingBlockv. North Dakota ex rel. Board of University& S. S s c h o o l L a n d s , 4 6 I t J . s . 2 7 3 , 2 8 7 , l 0 3. C t .l 8 l l , 1 8 1 9 , 7 5 L . 8 d . 2 d 8 4 0 ( 1 9 8 3 ) e c t i o n T 0 2 o f t h e APA authorizessuits againstthe United Statesthrough a limited waiver of sovereignimmunity for relief other than monetary damagesrelated to an agency'sregulatory action. Id. at 317, citing 5 U . S . C . S 702. However,the waiver doesnot apply to agencyactionsthat are committedto agency d i s c r e t i o n by law. Id., citing 5 U.S.C. $ 701(a)(2). This exceptionto judicial review is "very narrow" and applies only "in those rare instanceswhere 'statutesare drawn in suchbroad terms that

in a given casethere is no law to apply."' Ellison v. Connor 153 F.3d 247, 251 (5th Cir. 1998), q u o t i n g Citizensto PreserveOvertonPark, Inc. v. Volpe,401U.S. 402,410,91 S.Ct. 814,821,28 L . E d . 2 d 136(1971);seealso SuntexDairy v. Block, 666 F .2d 158, 163 (5th Cir.), cert. denied,103 S . C t . 5 9 ( 1 9 8 2 ) .Stateddifferently,judicialreviewisunavailableonly"ifthestatuteisdrawnsothat a court would have no meaningful standard against which to judge the agency's exercise of 84 U.S. 821,830, 105S.Ct.1649,1655, L.Ed.2d714 (1985). Hecklerv. Chaney,470 discretion." l. Defendant contendsthat its rent-settingpractices are committed to agency discretion and, the t h e r e f o r enot subjectto judicial review, because NHA doesnot provide meaningful standards againstwhich the court can review HUD's determinationof what constitutesa "market area." (See Def. Br. at 19). Plaintiff countersthat the "law to apply" can be found in the text of the statuteitself, materials.(SeePlf. Resp.Br. at 13the H U D ' s own regulations, legislativehistory,andotheragency 15 ) . Initially, the court observesthat the NHA does not define the term "market area." Section housing choice voucher a la37f(o)(1)(B), which establishes payment standardfor the tenant-based p r o g r a m ,merely provides: [T]he payment standardfor each size of dwelling unit in a market area shallnot exceed110percentof the fair market rental established (c) u n d e r subsection of this sectionfor the samesizeof dwelling unit in the same market area and shall be not less than 90 percent of that fair market rental. with the added).SectionA37f (c)(l), which dealsgenerally 4 2 U.S.C.g 1a37f(o)(1XB)(emphasis provides: payments, a m o u n t and scopeof assistance The maximum monthly rent shall not exceedby more than l0 per periodically by centumthe fair market rental established the Secretary but not less than annually for existing or newly constructed rental

dwelling units of various sizesand types in the market area suitable underthis section[.] by f o r occupancy personsassisted usetheterm "market area," added).Althoughthesestatutoryprovisions I d . 51437t(c)(l) (emphasis neither sets forth any guidelines for determining how a "market area" should be established. own regulations can alsoprovidethe requisite"law to apply." SeeEllison,153 A n agency's F . 3 d at 251. The HUD regulationcited by plaintiff explainsthat "FMRs are housingmarket-wide estimates of rents that provide opportunities to rent standard quality housing throughout the g e o g r a p h i c area in which rental housing units are in competition." See24 C.F.R. $ 888.113(a) (emphasisadded). However, this regulation does not provide any guidance for determining what constitutesa "geographicarea." Certainly it doesnot support plaintiffs argumentthat large multicounty regions should not be the starting point for determining FMRs. If anything, a fair reading of just t h e entireregulationsuggests the opposite. Section888.113(d) states: FMR areas are metropolitan areas and nonmetropolitan counties (nonmetropolitanpartsof countiesin the New England States). With s e v e r a l exceptions,the most current Office of Managementand Budget (OMB) metropolitan qrea definitions of Metropolitan Statistical Areas (MSAs)and Primary Metropolitan Statistical Areas (PMSA) are used becauseof their generally close correspondence with housing market area definitions. HUD may make exceptionsto areasthat are O M B definitions if the MSAs or PMSAs encompass larger than housing market areas. The counties deleted from the HUD-defined FMR areasin those casesare establishedas separate metropolitan county FMR areas. l3(d) (emphasis added). Still, nothing in the HUD regulationsetsforth any identifiable 1 d $ S8S.1 factors by which a court could review the agency'sdetermination of what constitutes a specific housing market area. N o r is any of the legislative history cited by plaintiff useful in establishingmeaningful standardsfor judicial review of the agency'saction. SenateReport No. 93-693, which anticipated

that HUD would "define the'areas'for which fair market rents are to be determinedin such a way as not to include in a single areacommunities which are characterizedby significant differencesin housing,"seeSen.Rep.No. 93-693,1974U.S.C.C.A.N. costsfor comparable r e n t a l sor construction 4 2 7 3 , 4 3 1 5 (1974), is not part of the legislativehistory of the bill that was ultimately passedby passed Houseversionofthe bill, which requiredHUD "to establish the Congress C o n g r e s s .Instead, fair market rentals in eachhousing market areafor new and existing units of various sizesand types suitable for occupancy for low-income families," but did not further define "market area." See (1974). Plaintiff alsorelieson a report U.S.C.C.A.N.4449,4465 H . Conf. Rep.No. 93-1279,1974 preparedfor HUD by an outside consulting firm, which recognizesthat: An important issue [in determining the demand and supply of affordablerental housing] is what constitutesarental housingmarket, that is, within what group of propertiesare price adjustmentsmade. Clearly, there is no single national rental housing market. Entire metropolitan areas (particularly the larger ones) also do not constitute single housing markets' (See Plf. Resp. App. at 26) (emphasisadded). However, this report relates to the Rural Housing S e r v i c e ("RHS") Section 515 program, which provides direct loans for the construction and m a i n t e n a n c eof multi-family rental projects that serve low-income families, not the Section 8 voucher program. (Seeid. at25), In sum, the court concludesthat there are no meaningful standardsagainstwhich to review HUD's determination of what constitutes a "market area" under section 1437f of the NHA. Consequently,sovereignimmunity bars any claims predicatedon allegedviolations of that statute. 2. The court reaches a different conclusion with respect to alleged violations of section 3 6 0 S ( e ) ( 5 )of the FHA, which imposesan affirmative duty on HUD to "administerthe [housing]

programs. . . in a manneraffirmatively to furtherthe policiesof [the Act]." 42 U.S.C. $3608(eX5). HUD under subjectmatterjurisdictionover claimsbroughtagainst N u m e r o u scourtshaveexercised s e c t i o n 3 6 0 8See,e.g.N.A.A.C.P.v.SecretaryofHousingandUrbanDevelopment,SlTF.2dl49, . (1stCir. 1987);Darst-WebbeTenant Assoc. Boardv. St.LouisHousingAuthority,417 F.3d 160-61 06-3298,2007WL 458232at *2 (E.D. 8 9 8 , 907 (8th Cir. 2005); seealso Andersonv. Jaclcson,No. L a . Feb. 6,2007) (citing cases). In its complaint,plaintiff allegesthat HUD violated its duty to f u i t h e r the fair housing policies of the FHA by failing to considerthe effects of its rent-setting practiceson the racialcomposition of the areasaffectedand the integratedhousing choicesavailable t o minority Section8 participantsin and aroundDallas. (SeePlf. Compl. at 11, fl 37). This claim is similar to other claims brought againstHUD that were held to be reviewableunder the APA. See, F.Supp.2d398,464 (D. Md. e . g . Thompsonv.U.S.Dept. of Housing and Urban Development,34S 20A, (suit alleging that HUD failed to fulfill its statutory duty under the FHA to consider the policies in regardto city's public housing);M&T Mortgage r e g i o n a l effects of its desegregation WL 47467at *10 (E.D.N.Y.Jan.9,2006)(suit No. 04-CV-4775-NGGVVP,2006 C o r p . v. White, alleging that HUD's actions in approving mortgageinsuranceapplicationswithout consideringthe r a c i a l impact of the programviolated the FHA).4

B. judicial reviewunderthe APA because that argues plaintiff cannotseek Finally, defendant judicial reviewof final at remedies law. See5 U.S.C.$ 704 (authorizing i t hasotheradequate
4 The court rejects defendant's argument that the Supreme Court's decision in Norton v. Southern Utqh judicial review of I ( i l d e r n e s sAlliance,542 U.S. 55, 124 s.Ct.2373, 159 L.Ed.2d 137(2004) (SUWA"), precludes ns p l a i n t i f f s c l a i m s f o r a l l e g e d v i o l a t i o n s o f t h e F HlA . U W A , t h e S u p r e m e C o u t h e l d t h a t " a c l a i m u n d e r $ 7 0 6 ( l ) [ o f the APAI can proceed only where a plaintiff assertsthat an agency failed to take a discrete agencyaction that it is r e q u i r e d to take." STJWA,124 S.Ct. at2379 (emphasisin original). However, that requirementdoes not apply in situations where, as here, a court is askedto review whether HUD has met its statutory duty to affirmatively further fair h o u s i n g p o l i c i e sSeeDarst-l(ebbe,4l7F.3dat907;Thompsonv.U.s.Dept.ofHousingandUrbanDevelopment,No, . 2006 WL 581260at*4-5 (D. Md. Jan.10, 2006). MJG-95-309,

agency actions "for which there is no other adequateremedy in a court").

The two alternative

in by r e m e d i e ssuggested defendant are: (l) a suit for moneydamages the Court of FederalClaims the u n d e rthe Tucker Act,28 U.S.C. $ 1a9l (a)(l); or (2) an actionagainst DallasHousingAuthority ("DHA"). (See Def. Mot. Br. at20-22). However, plaintiff does not seekmoney damagesin this case. It requestsonly injunctive relief. Defendant wholly fails to explain how a suit for money damageswould be an adequatesubstitutefor the relief sought by plaintiff--an injunction requiring HUD to considerthe effectsof its rent-settingpracticeson the racial composition of the Dallas rental housing market andto affirmatively further fair housing opportunitiesfor African-American Section 8 participantsin the Dallas area. Nor doesdefendantexplain how a suit againstDHA would change no remedy is available,plaintiff may seek H U D ' s rent-settingpractices. Because other adequate i n j u n c t i v e relief againstHUD underthe APA for allegedviolations of the FHA. RECOMMENDATION motion to dismissfor lack of subjectmatterjurisdiction [Doc. #8] should be Defendant's granted in part and denied in part. The motion should be granted on the ground of sovereign i m m u n i t y with respectto plaintiffs claims for allegedviolationsof the NHA. In all other respects, t h e motion should be denied. A copy of this report and recommendation shall be served on all parties in the manner provided by law. Any parfy may file written objectionsto the recommendationwithin 10 daysafter b e i n g servedwith a copy. See28 U.S.C. $ 636(bxl); Fpn. R. Clv. P.72(b). The failure to file written objections will bar the aggrieved party from appealing the factual findings and legal judge that are accepted adoptedby the district court, exceptupon or c o n c l u s i o n sof the magistrate (Sth g r o u n d s o f p l a i n enor. SeeDouglassv.UnitedServicesAutomobileAss'n,79F.3d1415,1417 C i r . 1996).

DATED: July20,2009.

MACISTRATEJUDGE S'I'ATES