According to HUD, it will be difficult or impossible for the PHAs to demonstrate what subsidy decisions they would have made, had it not been for the implementation of the TII program.
The Court has concluded that this should not be an insurmountable problem. The PHAs may submit proposals to HUD of what they would have estimated based on their past experience,
and HUD could then evaluate on the basis of these, as well as any other documents, what the PHAs would have included in the prior subsidy evaluation process. HUD could also compare these estimates to those fiscal submissions shortly preceding the implementation of the TII program.
HUD also argues that the remedy plaintiffs have sought is inappropriate because it will apply to what is now past conduct, and it will therefore involve the transfer of funds to the PHAs rather than the barring of future deductions. This argument must fail.
It should be noted that HUD had not recaptured all of these sums as of February 7, 1987 when plaintiffs filed suit after settlement negotiations failed. The failure of HUD to recapture the amount outstanding since that date is due to delays generated in part by it and in part due to the long pendency of this case. It would be inequitable to penalize plaintiffs for delays not of their creation.
More important, for those sums recaptured prior to the time when plaintiffs filed suit, the Court finds that the injunctive relief and rescission of the recapture plaintiffs seek are necessary if plaintiffs' rights are to be vindicated.
And there is no sound reason why the return of the funds should not be granted.
The Court will remand the case to HUD for a determination of the financial consequences to the PHAs of the application of the Target Investment Income program and the Retroactive Recapture Program. The PHAs may submit their computations on this issue to HUD before July 31, 1992, and HUD will then have sixty days following the submission to submit its final computation to the Court.
For the foregoing reasons, the Court is granting plaintiffs' motion for partial summary judgment with respect to the notice and comment claim on the calculation of investment, rental and other income; and an injunction prohibiting HUD from recapturing any additional funds with respect to the years prior to the adoption of a valid rule pursuant to the investment and recapture programs; and it remands the case to the Secretary of Housing and Urban Development for calculation of the subsidy that should have been granted under the Performance Funding System that was used before HUD implemented the program challenged in this lawsuit.
An Order to that effect, and otherwise denying the parties' cross-motions for summary judgment, and granting HUD's motion to dismiss the County of King PHA on res judicata grounds is being issued contemporaneously herewith.
May 7, 1992
HAROLD H. GREENE
United States District Judge
ORDER - May 7, 1992, Filed
Upon consideration of the motions for summary judgment and partial summary judgment, the memoranda in support thereof, the opposition and replies thereto, and the entire record herein, and consistent with the Opinion being issued contemporaneously, it is this 7th day of May, 1992
ORDERED that plaintiffs' motion for partial summary judgment in reliance on the Administrative Procedure Act be and it is hereby granted; and it is further
ORDERED that plaintiffs' claim for partial summary judgment regarding the use of federal subsidy funds for litigation against HUD be and it is hereby denied as moot; and, it is further
ORDERED that in other respects plaintiffs' motion for summary judgment be and it is hereby denied; and it is further
ORDERED that defendant's motion to dismiss claims of the Public Housing Authority of the County of King, State of Washington, on res judicata grounds be and it is hereby granted; and it is further
ORDERED that defendant's motion to dismiss or in the alternative for summary judgment be and it is hereby denied; and it is further
ORDERED that defendant be and he is hereby enjoined from recapturing any additional funds with respect to the years prior to the adoption of a valid rule pursuant to the investment and recapture programs; and it is further
ORDERED that the affected Public Housing Authorities shall submit to defendant by July 31, 1992, their computations of the financial consequences to them of the application of the Target Investment Income program and the Retroactive Recapture Program prior to its valid adoption, and defendant shall submit his final computation of such financial consequences to the Court within sixty days following those submissions.
HAROLD H. GREENE
United States District Judge