Galveston Open Government Project et al v. United States Department of Housing and Urban Development et al
Filing
147
MEMORANDUM AND ORDER granting 141 MOTION for Summary Judgment , denying 139 MOTION for Reconsideration.(Signed by Judge Gregg Costa) Parties notified.(arrivera, 3)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
GALVESTON DIVISION
TRYSHATEL MCCARDELL,
§
§
Plaintiff,
§
VS.
§ CIVIL ACTION NO. 3:13-CV-439
§
UNITED STATES DEPARTMENT OF §
§
HOUSING AND URBAN
§
DEVELOPMENT, et al,
§
§
Defendants.
§
MEMORANDUM AND ORDER
One of the last major laws enacted during the Civil Rights Era, the Fair
Housing Act has played a critical role in combating housing discrimination since
its enactment in 1968. Courts have applied the Act not only in cases involving
individual “refus[als] to sell or rent” on the basis of race or other protected classes,
42 U.S.C. § 3604(a), but also in cases challenging broader practices such as
“mortgage ‘redlining,’ insurance redlining, racial steering, exclusionary zoning
decisions, and other actions by individuals or governmental units which directly
affect the availability of housing to minorities.”
Southend Neighborhood
Improvement Ass’n v. Cnty. of St. Clair, 743 F.2d 1207, 1209 (7th Cir. 1984).
That final category includes challenges to public housing decisions. Yet
despite the robust body of case law in this area, this case involves a section of the
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Act concerning public housing that no court has previously addressed. A statute
enacted as part of the Quality Housing and Work Responsibility Act of 1998
provides that:
Notwithstanding any other provision of law, replacement public
housing units for public housing units demolished in accordance with
this section may be built on the original public housing location or in
the same neighborhood as the original public housing location if the
number of the replacement public housing units is significantly fewer
than the number of units demolished.
42 U.S.C. § 1437p(d). Defendants contend that this “notwithstanding any other
provision of law” clause bars a Fair Housing Act claim challenging plans to rebuild
public housing on sites in Galveston where longstanding housing units were
demolished in the aftermath of Hurricane Ike.
I.
BACKGROUND
A. The Demolition
The novel issue concerning application of this statute arises, as novel issues
often do, from unusual facts. In 2008, Hurricane Ike wreaked havoc on Galveston,
causing substantial damage to public housing on the island. The next year, the
City of Galveston issued Notices of Unsafe Conditions finding that the public
housing was “unfit for human occupancy.” That prompted the Galveston Housing
Authority (GHA) to send a letter to HUD announcing its intent to demolish two
public housing sites (Oleander Homes and Palm Terrace) without following
HUD’s full regulatory process.
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Lone Star Legal Aid, a nonprofit legal
organization that represents low-income individuals, filed a complaint with HUD
opposing the plan to demolish the units outside of the ordinary process. This
concern was soon resolved when Lone Star and the GHA entered into a settlement
agreement in March 2009.
As part of that settlement, GHA agreed to build
replacement housing at the same sites.
With Lone Star’s concerns resolved, GHA underwent the regulatory process
by submitting to HUD an application for the demolition of 136 units at Cedar
Terrace and 133 units at Magnolia Homes. In letters dated April 14, 2010 and June
17, 2010, HUD approved the demolition. Docket Entry No. 144-1 at 5–16. The
April letter stated that “[b]ased upon our review, and finding that the requirements
of 24 C.F.R., Part 970 and Section 18 of the Act have been met, the proposed
demolition . . . is hereby approved.”1 Id. at 15.
B. The Plan To Rebuild
In the years following the demolition, the plan to rebuild public housing in
Galveston generated much controversy. GHA’s development proposal—for which
HUD has not yet granted final approval—seeks to develop 49 public housing units
at Cedar Terrace, along with 60 market-rate units and 13 project-based voucher
units. At the Magnolia Homes site, the plan is to rebuild 64 public housing units,
along with 78 market-rate units and 18 project-based units.
1
These letters refer to Magnolia Homes, but Cedar Terrace was included as part of Magnolia
Homes for administrative purposes.
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C. This Lawsuit
After efforts to persuade local government to not rebuild public housing in
Galveston failed, individuals and the Galveston Open Government Project filed
this lawsuit seeking to enjoin the rebuilding. A wave of motions to dismiss and
amended complaints pared down the lawsuit. The defendants that remain are the
GHA, City of Galveston, HUD and its Secretary.2 The sole plaintiff whom the
Court found had standing to sue is Tryshatel McCardell. Docket Entry No. 105.
And only one claim remains.
This Court dismissed the Administrative
Procedure Act claim asserted against HUD because it did not challenge a final
agency action.
Docket Entry No. 129.
McCardell voluntary dismissed her
constitutional claims after concluding that there was insufficient evidence of
intentional discrimination.
Docket Entry No. 135 ¶2.
That leaves the claim
asserted under what is generally referred to as the “Fair Housing Act,” but
technically is Title VIII of the Civil Rights Act. The Third Amended Complaint
alleges that the plan to rebuild public housing on the Cedar Terrace and Magnolia
Home sites perpetuates “racial segregation in the City of Galveston and Galveston
County and fail[s] to . . . affirmatively . . . further fair housing opportunities in
violation of Plaintiffs’ rights under the Fair Housing Act.” Docket Entry No. 118
at ¶38.
2
Shaun Donovan was HUD Secretary when the case was filed and remains listed as a defendant.
Recently, however, Julian Castro was appointed to that position.
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McCardell filed a motion for a preliminary injunction. After reviewing the
briefing and applicable law and prior to the hearing on that motion, the Court
notified the parties that section 1437p(d)’s “notwithstanding” provision prevented
McCardell from establishing a substantial likelihood of success on her Fair
Housing Act claim.
Docket Entry No. 130.
McCardell then dismissed her
constitutional claim, making a hearing on the injunction motion unnecessary.
Docket Entry No. 135. After a conference call in which McCardell’s counsel
expressed her desire for a definitive ruling on the application of section 1437p(d)
in order to facilitate an appeal, the Court set a schedule for the Defendants to file a
motion for summary judgment, which is now fully briefed.3
3
The Federal Defendants had raised the section 1437p(d) issue in response to McCardell’s
motion for preliminary injunction. It was not squarely raised in their Rule 12(b) motion to
dismiss, which is why the Court requested summary judgment briefing on the issue.
The Federal Defendants’ Rule 12 motion does seek dismissal of the Federal Defendants
on sovereign immunity grounds. Because this suit only seeks injunctive relief (sovereign
immunity would bar a claim against the United States for damages under the Fair Housing Act),
section 702 of the Administrative Procedure Act waives sovereign immunity. See 5 U.S.C. §
702; Trudeau v. Fed. Trade Comm’n, 456 F.3d 178, 186 (D.C. Cir. 2006) (“There is nothing in
the language of the second sentence of § 702 that restricts its waiver to suits brought under the
APA. The sentence waives sovereign immunity for ‘[a]n action in a court of the United States
seeking relief other than money damages,’ not for an action brought under the APA.”); Vander
Zee v. Reno, 73 F.3d 1365, 1371 (5th Cir. 1996) (“Section 702 of the APA provides for judicial
review of ‘agency action,’ and waives sovereign immunity for claims ‘seeking relief other than
money damages.’”); Chamber of Commerce v. Reich, 74 F.3d 1322, 1328 (D.C. Cir. 1996)
(“APA’s waiver of sovereign immunity applies to any suit [for injunctive relief] whether under
the APA or not.”); see also Bowen v. Massachusetts, 487 U.S. 879, 899 (1988) (“Moreover,
while reiterating that Congress intended ‘suits for damages’ to be barred, both Reports go on to
say that ‘the time [has] now come to eliminate the sovereign immunity defense in all equitable
actions for specific relief against a Federal agency or officer acting in an official capacity.’”
(quoting Maryland Dep’t of Human Res. v. Dep’t of Health & Human Servs., 763 F.2d 1441,
1447 (D.C. Cir. 1985) (quoting the APA’s legislative history)) (emphasis in original)).
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II.
ANALYSIS
Defendants argue that summary judgment is warranted because section
1437p(d)’s “notwithstanding any other provision of law” clause precludes a claim
under Title VIII of the Civil Rights Act that challenges the rebuilding of
“significantly fewer” public housing units than existed on a site prior to a HUDapproved demolition. McCardell challenges the application the “notwithstanding”
provision on two levels. First, she contends the requirements for section 1437p(d)
are not satisfied because the demolition was not approved pursuant to that statute.
Second, she argues that even if its conditions are met, the “notwithstanding”
provision “should not be read to render the Fair Housing Act meaningless.”
Docket Entry No. 110 at 2.
A. Does Section 1437p(d) Apply?
Section 1437p(d) applies to public housing rebuilt on a demolished site
when (1) the demolition was “in accordance with this section” and (2) “if the
number of the replacement public housing units is significantly fewer than the
number of units demolished.” 42 U.S.C. § 1437p(d).
In an argument not raised until she filed a motion to reconsider the Court’s
preliminary injunction ruling, McCardell contends that the demolition was not
Of course, even if the Federal Defendants enjoy sovereign immunity from this suit, the
claims against the City of Galveston and GHA would require the Court to address the section
1437p(d) issue.
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pursuant to section 1437p, but instead was accomplished pursuant to section
1437v. Section 1437v allows HUD to award grants to “carry out revitalization
programs for severely distressed public housing.” 42 U.S.C. § 1437v(d)(1). If it
governed the demolition process, it might help McCardell avoid the
“notwithstanding” defense because it states that “[s]everely distressed public
housing demolished pursuant to a revitalization plan shall not be subject to the
provisions of section 1437p of this title.” 42 U.S.C. § 1437v(g).
But McCardell offers no evidence indicating that the demolition of Cedar
Terrace and Magnolia Homes was undertaken pursuant to section 1437v. Section
1437v involves the awarding of grants, and nothing in the approval letters indicates
that approval of the demolition plan was associated with the awarding of a grant.
In addition, a HUD official who administers section 1437v programs states that
GHA’s demolition was not pursuant to a competitive bidding process administered
under that statute. Docket Entry No. 144-2 ¶¶12–15. Finally, despite section
1437v’s requirement that both HUD and the funding recipient publicly disclose
projects awarded under that statute, see 42 U.S.C. §§ 1437v(k–l), McCardell has
not identified any such disclosures.
This discussion about the lack of any evidence implicating section 1437v is
unnecessary, however. The HUD demolition approval letters leave no doubt that
the demolition was approved pursuant to section 1437p. The April 15, 2010 letter
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first states that HUD has “reviewed the application and find it to be consistent with
Section 18 of the Act.” Docket Entry No. 144-1 at 15. It then states “[b]ased upon
our review, and finding that the requirements of 24 CFR, Party 970 and Section 18
of the Act have been met, the proposed demolition . . . is hereby approved.” Id.
(italics added).
The June 17, 2010 letter again refers to Section 18: “The
Department further acknowledges that GHA submitted the above referenced
applications to formalize this demolition and to evidence that the demolition was in
compliance with Section 18 of the Act and 24 CFR Part 970.” Docket Entry No.
144-1 at 8 (italics added).
Where is Section 18 of the United States Housing Act codified? At Title 42
United States Code, Section 1437p(d).
See Veterans Affairs and HUD
Appropriations Act, Pub. L. No. 105-276, 112 Stat. 2461, 2573 (1998) (including
as part(d) under “Sec. 18. Demolition and Disposition of Public Housing” the same
language that appears at 42 U.S.C. § 1437p(d)); see also, e.g., 24 C.F.R. § 906.35
(“The provisions of section 18 of the 1937 Act (42 U.S.C. 1437p) . . .”). The
record thus indisputably establishes that the demolition of Cedar Terrace and
Magnolia Homes was approved pursuant to section 1437p.4
4
Because the approval letters unambiguously state that approval of the demolition was granted
pursuant to “Section 18,” which is codified as section 1437p, any discovery on this issue would
be futile. Moreover, McCardell’s request for that discovery in her motion for reconsideration is
at odds with her earlier recommendation that the Court issue a final ruling on the effect of 42
U.S.C. § 1437p in order to facilitate an appeal. The Court and parties relied on that
representation in setting a schedule for summary judgment briefing.
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McCardell does not contest the other condition of the “notwithstanding”
statute: whether the rebuilding will result in “significantly fewer” new public
housing units “than the number of units demolished.” 42 U.S.C. § 1437p. HUD
regulations defining the ambiguous term “significantly fewer” provide that the
standard is satisfied if the new public housing units are not more than 50 percent of
the number of public housing units in the original development. 24 C.F.R. §
905.602(d)(5)(i).
McCardell does not challenge the reasonableness of this
regulation in defining “significantly fewer” or dispute that the number of public
housing units in the proposed redevelopment falls under its 50 percent threshold.
Section 1437p(d) thus applies in this case, and the Court will turn to what
has been McCardell’s primary argument, which challenges the preemptive force of
the “notwithstanding” language.
B. Does Section 1437p(d)’s “notwithstanding any other provision of law”
language supersede other Housing Act statutes?
McCardell argues that section 1437p(d) “should not be interpreted to allow
Defendants to avoid their responsibilities under the Fair Housing Act.” Docket
Entry No. 110 at 2.
Whatever merit that argument may have from a policy
perspective, the question before the Court is one of congressional intent.
That intent is evident from the statute’s broad language that public housing
can be rebuilt on a demolished site if it results in significantly fewer units than the
number of units demolished “notwithstanding any other provision of law.” The
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Supreme Court has explained that “the use of such a ‘notwithstanding’ clause
clearly signals the drafter’s intention that the provisions of the ‘notwithstanding’
section override conflicting provisions of any other section.” Cisneros v. Alpine
Ridge Grp., 508 U.S. 10, 18 (1993) (citation omitted). It also noted that “Courts of
Appeals generally have ‘interpreted similar “notwithstanding” language . . . to
supersede all other laws, stating that ‘[a] clearer statement is difficult to imagine.’”
Id. (quoting Liberty Mar. Corp. v. United States, 928 F.2d 413, 416 (D.C. Cir.
1991) (internal citations omitted)); see also United States v. DeCay, 620 F.3d 534,
540 (5th Cir. 2010) (“[T]he Supreme Court has recognized that the use of a
‘notwithstanding’ clause signals Congressional intent to supersede conflicting
provisions of any other statute.”).
Two difficult issues that sometimes arise with “notwithstanding” statutes are
absent here.
The “notwithstanding” statute is not being asserted against a
subsequently enacted provision of the Housing Act, but one that was on the books
more than a quarter century before Congress added the language in section
1437p(d). Compare New Jersey Air Nat. Guard v. Fed. Labor Relations Auth., 677
F.2d 276, 283 (3d Cir. 1982) (“‘Notwithstanding any other provision of law . . .’A
clearer statement is difficult to imagine: section 709(e) must be read to override
any conflicting provision of law in existence at the time that the Technician Act
was enacted. Application of this statement is less certain, however, with respect to
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a statute such as the Labor–Management Act, adopted after the Technician Act.”
(italics in original)). And it is being asserted against a core provision of federal
housing law of which Congress would have undoubtedly been aware when it
enacted the “notwithstanding” provision, not against a statute outside of the
housing context. Compare Oregon Natural Res. Council v. Thomas, 92 F.3d 792,
796 (9th Cir. 1996) (holding that “notwithstanding” provision in federal statute
involving timber sales “is best interpreted as requiring the disregard only of
environmental laws”). The argument that the “notwithstanding” provision applied
outside of the Housing Act to bar McCardell’s constitutional claims asserted under
sections 1981, 1982, and 1983 had concerned the Court for precisely this reason,5
but McCardell’s voluntary dismissal of those claims avoids that issue.
The plain language of the broad “notwithstanding” provision thus warrants
summary judgment in favor of Defendants on the Fair Housing Act claim.
Recourse to legislative history is not warranted in light of the unambiguous text,
but the Court will mention it only to provide a possible answer to the policy
concerns that McCardell raises. A Senate Committee Report on the bill that led to
the enactment of the original, temporary version of section 1437p(d) explained as
follows:
5
Congress cannot, of course, supersede the Constitution. The defense argument, however, was
that it could override these statutory enactments that enable the assertion of constitutional claims
in federal court.
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The Committee recognizes that site and neighborhood standards
are an outgrowth of fair housing laws that seek to prevent PHAs
[Public Housing Authorities] or localities from concentrating public
housing units in areas with already high numbers of minority or
impoverished families. This provision would only permit replacement
housing to be built in minority or low-income neighborhoods when
the overall effect would be to reduce the number of public housing
units in such neighborhoods. The provision would also reverse a
troubling side effect of regulatory policy; redirecting development
through impaction standards limits federal investment in desperately
poor and minority neighborhoods.
S. Rep. 103-174, at 28 (Nov. 9, 1993), reprinted in 1994 U.S.C.C.A.N. 232, 261.
It is important to note that the “notwithstanding” provision applies only to
the decision for units “to be built,” which happens to be what is challenged in this
case.
The housing policies that are adopted after the new units are rebuilt and
residents move in would be subject to Title VIII challenges like any other public
housing decisions.
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III.
CONCLUSION
For the reasons discussed above, Defendants’ Joint Motion for Summary
Judgment (Docket Entry No. 141) is GRANTED and McCardell’s Motion for
Reconsideration of the denial of the motion for preliminary injunction (Docket
Entry No. 139) is DENIED. The Title VIII claim asserted in Count Two of the
Third Amended Complaint will be DISMISSED WITH PREJUDICE.
A
separate final judgment will enter.
SIGNED this 5th day of August, 2014.
___________________________________
Gregg Costa
United States Circuit Judge*
*
Sitting by designation.
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