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Barbosa v. United States Department of Homeland Security

United States District Court, District of Columbia

July 11, 2017

DANIEL BARBOSA, et al., Plaintiffs,
v.
UNITED STATES DEPARTMENT OF HOMELAND SECURITY, et al., Defendants.

          MEMORANDUM OPINION

          Amit P. Mehta United States District Judge.

         I. INTRODUCTION

         In late 2015 and early 2016, a series of massive storms devastated the State of Texas, causing millions of dollars in property damage and, tragically, dozens of casualties. In response, the Federal Emergency Management Agency (“FEMA”)-the agency charged with administering federal disaster relief-mobilized efforts to provide assistance to the affected individuals. This case arises out of those efforts.

         The President and, correspondingly, FEMA, derives the statutory authority to provide disaster relief from the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. §§ 5121-5206 (“Stafford Act”). In 2000, Congress amended the Stafford Act to enable FEMA to, among other things, provide direct assistance to individuals under the Individuals and Households Program (“IHP”), including financial assistance for home repairs. Under the IHP, FEMA may directly provide federal grants to qualified applicants, rather than require those individuals to seek those grants through federally subsidized, state-run disaster relief funds. The IHP amendments tasked FEMA with designing and implementing the federal grant program, in part, by issuing rules and regulations governing the program. FEMA subsequently issued a set of rules and regulations purporting to do just that.

         Plaintiffs include 26 individuals whose homes were severely damaged during the 2015- 2016 storms, and applied to FEMA for home repair assistance under the IHP, but had their applications denied, in whole or in part. Plaintiffs claim that FEMA violated federal law when it chose to disclose neither the legal standards it used to evaluate their applications nor the reasons for denying them full relief. So, Plaintiffs filed this suit to compel FEMA to articulate those standards, to shed light on the IHP process, and to reconsider their applications. Specifically, Plaintiffs charge FEMA with (1) failing to comply with its congressional mandate under the Stafford Act to promulgate regulations that “carry out” the IHP, 42 U.S.C. § 5174(j), and (2) relying on “secret rules” in non-public documents to deny their IHP applications in violation of 5 U.S.C. § 552(a)(1). For relief, Plaintiffs ask the court to order FEMA to promulgate regulations that (1) define the eligibility criteria for home repair assistance relief under the IHP, (2) detail the process for appealing application denials, and (3) insure the equitable and impartial administration of the IHP. Additionally, Plaintiffs ask the court to order FEMA to reconsider their applications under these new regulations.

         Before the court is Defendants' Motion to Dismiss and Plaintiffs' Motion for Summary Judgment. Defendants move to dismiss the Complaint on the ground that the court lacks subject matter jurisdiction, because the United States has not waived its sovereign immunity from suit. Defendants point to the Stafford Act's “discretionary function exception, ” which bars federal courts from reviewing FEMA's discretionary decisions. Defendants contend that the agency's decisions concerning the content and specificity of its regulations are discretionary and, therefore, cannot be the subject of judicial review. See 42 U.S.C. § 5148. Further, Defendants argue that, even if the court has jurisdiction, Plaintiffs have failed to state a claim for relief because its IHP rules and regulations, as currently constituted, do exactly what Congress commanded. Expectedly, Plaintiffs view FEMA's actions, or inaction, differently. They contend that the court has jurisdiction because FEMA's regulations are not covered by the Act's discretionary function exception. They also assert that FEMA has not, as Congress directed, promulgated the necessary regulations to implement the IHP. On that basis, Plaintiffs move for summary judgment on Counts I-III of their Complaint, seeking a judgment in their favor that FEMA violated federal law by issuing deficient regulations.

         Having given careful consideration to the parties' arguments, the court agrees with Defendants that the Stafford Act's discretionary function exception bars Plaintiffs' challenge to FEMA's IHP rulemaking. Accordingly, the court grants Defendants' Motion to Dismiss and denies Plaintiffs' Motion for Summary Judgment.

         II. BACKGROUND

         A. Statutory and Regulatory Background

         Congress passed the Stafford Act (“the Act”), originally known as the Disaster Relief Act of 1974, to provide federal assistance when disaster strikes. See 42 U.S.C. § 5121 et seq. The Act authorizes the President to declare a major disaster and, where appropriate, direct “[f]ederal agencies . . . [to] provide assistance essential to meeting immediate threats to life and property resulting from [the] major disaster.” Id. § 5170b(a). The President is authorized to delegate his authority under the Act to a federal agency, see id. § 5164, which President George H.W. Bush did in 1989, delegating most of that authority to the Federal Emergency Management Agency (“FEMA”), which is now part of the Department of Homeland Security (collectively, “Defendants”). Exec. Order No. 12, 673: Delegation of Disaster Relief and Emergency Assistance Functions, 54 Fed. Reg. 12, 571, § 1 (Mar. 23, 1989). FEMA, in turn, is responsible for promulgating the regulations necessary to implement the Act's provisions, including those regulations that Plaintiffs challenge in their Complaint.

         Plaintiffs' lawsuit concerns FEMA's “Individuals and Households Program” (“IHP”). The IHP authorizes the President, through FEMA, to provide direct federal assistance to disaster-affected individuals, as opposed to indirect assistance through federally subsidized state disaster relief funds. 42 U.S.C. § 5174. The Act includes three general eligibility requirements to receive IHP aid: (1) the affected home must be owner-occupied, (2) the damages must be disaster-related, and (3) the repairs must be necessary to return the affected home to sanitary and safe living conditions. Congress said no more about eligibility criteria. Instead, it directed FEMA to “prescribe rules and regulations to carry out [the IHP], including criteria, standards, and procedures for determining eligibility.” Id.[1]

         The Stafford Act and its amendments direct FEMA to fill in specifics concerning two other statutory provisions that implicate the IHP. First, the Act requires FEMA to “issue . . . . such regulations as may be necessary . . . for insuring that the” IHP is “accomplished in an equitable and impartial manner, without discrimination on the grounds of race, color, religion, nationality, sex, age, disability, English proficiency, or economic status.” Id. § 5151(a). Second, it directs FEMA to “issue rules which provide for the fair and impartial consideration of appeals” from any denial of disaster relief, including under the IHP. Id. § 5189a(c).

         1.Regulations Promulgated to “Carry Out” the IHP

         FEMA has issued rules and regulations intended to “carry out” the IHP, which are contained in sections 206.110 through 206.120 of Chapter 44 of the Code of Federal Regulations. See 44 C.F.R. §§ 206.110-120. The court here focuses on those sections relevant to the provision of housing assistance. Section 206.110, among other things, sets the maximum amount of assistance a qualified individual may receive, identifies the types of assistance available, fixes the date of eligibility, defines the period of assistance, and places certain limitations and conditions on assistance recipients. Id. § 206.110. Section 206.111 provides definitions of terms used in the relevant regulations. Id. § 206.111. Section 206.112 sets application deadlines following a disaster declaration, including provisions governing extensions of time and late applications. Id. § 206.112.

         Section 206.113, entitled “Eligibility Factors, ” lists both qualifying and disqualifying factors for disaster assistance under the IHP. Subsection (a) lists nine “conditions of eligibility, ” five of which address when assistance is available to an applicant who has insurance. Id. § 206.113(a)(2)-(6). Two other factors specifically address that housing assistance is available (1) when “the primary residence has been destroyed, is uninhabitable, or is inaccessible, ” or (2) when “a renter's primary residence is no longer available as a result of the disaster.” Id. § 206.113(a)(8)-(9). Subsection (b) lists ten “conditions of ineligibility, ” the first five of which address housing assistance. For instance, individua ls do not qualify if they are displaced from properties other than their pre-disaster primary residence (e.g., a vacation home). Id. § 206.113(b)(1). Additionally, those individuals who have “adequate rent-free housing accommodations, ” a “secondary or vacation residence within reasonable commuting distance to the disaster area, ” or a “rental property that meets their temporary housing needs, ” likewise are ineligible to receive housing assistance. See Id. §§ 206.113(b)(2), (b)(3). Lastly, individuals who have adequate insurance coverage, and receive timely compensation for their damage from their insurer, do not qualify for housing assistance. Id. § 206.113(b)(6).

         Section 206.117 addresses the types of housing assistance available under the IHP. Qualified applicants may receive financial assistance for temporary housing, direct assistance in the form of purchased or leased temporary housing, and financial assistance for the repair or replacement of real property. Id. § 206.117(b)(1)-(3). As to each of those types of assistance, Section 206.117 outlines additional requirements or eligibility factors, see, e.g., id. §§ 206.117(b)(1)(i), (b)(2)(i), (b)(3)(i), and identifies the component parts of applicants' homes that, if damaged, qualify for repair assistance. See id. § 206.117(b)(2)(ii).

         2. Regulations Concerning Appeals from Adverse Decisions

         Pursuant to congressional directive, see 42 U.S.C. § 5189a, FEMA also has “issue[d] rules which provide for the fair and impartial consideration of appeals[.]” Section 206.115 sets forth instructions and procedures for appealing assistance decisions made under the IHP. The section provides that an appeal must be filed within 60 days and enumerates the types of decisions that can be appealed. 44 C.F.R. § 206.115(a). It further instructs what an appeal petition must include, identifies to whom an appeal should be directed, and sets a 90-day deadline for FEMA or the State to provide a written disposition of an appeal. Id. at §§ 206.115(b), (c), (f). The regulation also permits an applicant to “ask for a copy of information in his or her file by writing to FEMA or the State as appropriate.” Id. at § 206.115(d). Lastly, the regulation declares that the “decision of the appellate authority is final.” Id. at § 206.115(f).

         3. Regulations Concerning Nondiscrimination in Disaster Assistance

         Finally, Section 206.11 addresses Congress' direction to “issue . . . such regulations as may be necessary” to provide disaster assistance in a nondiscriminatory manner. See 42 U.S.C. § 5151. That regulation requires that “[a]ll personnel carrying out Federal major disaster or emergency assistance functions . . . shall perform their work in an equitable and impartial manner, without discrimination on the grounds of race, color, religion, nationality, sex, age, or economic status.” 44 C.F.R. § 206.11(b). It also requires “government bodies and other organizations [to] provide a written assurance of their intent to comply with regulations relating to nondiscrimination.” Id. § 206.11(c).

         B. Factual and Procedural Background

         Plaintiffs include 26 Texas residents whose homes were damaged in a series of severe storms in 2015 and 2016 (“Individual Plaintiffs”) and whose IHP applications FEMA denied either in whole or in part. Compl., ECF No. 1 [hereinafter Compl.], ¶¶ 9, 75. Also bringing suit against FEMA is La Union del Pueblo Entero, a non-profit organization dedicated to assisting low-income families apply for government assistance. See Id. ¶ 10.

         Plaintiffs filed this matter on September 15, 2016, seeking judicial review of FEMA's IHP rulemaking under the Administrative Procedure Act (“APA”). Id. ¶ 79. Plaintiffs' first three claims allege that FEMA has violated congressional directives by (1) “failing to adopt regulations needed to carry out [the IHP], including criteria, standards, and procedures for determining eligibility for assistance, ” as required under 42 U.S.C. § 5174(j) (Count I), id. ¶¶ 81-85; (2) “failing to adopt regulations that insure equitable and impartial IHP administration, ” as required under § 5151(a) (Count II), id. ¶¶ 86-88; and (3) “failing to adopt regulations that provide for fair and impartial consideration of appeals, ” as required under § 5189a(c) (Count III), id. ¶¶ 89-90. Plaintiffs also assert that FEMA uses “unpublished rules that adversely affect applicants” in violation of 5 U.S.C. § 552(a)(1) (Count IV). Id. ¶¶ 91-95. Plaintiffs seek an order compelling Defendants to (1) promulgate more detailed regulations concerning how FEMA makes IHP eligibility and award decisions, (2) cease from using unpublished rules in making such decisions, and (3) reconsider Plaintiffs' disaster relief applications without the use of rules that were unpublished at the time FEMA denied their applications. Id. ¶ 96.

         Defendants move to dismiss the Complaint. They contend that (1) the court lacks subject matter jurisdiction to hear Plaintiffs' claims under Rule 12(b)(1) of the Federal Rules of Civil Procedure and (2) Plaintiffs failed to state a claim for relief under Rule 12(b)(6). See Defs.' Mot. to Dismiss, ECF No. 4, Mem. in Supp., ECF No. 4-1 [hereinafter Defs.' Mot]. Defendants assert that the court lacks subject matter jurisdiction because the United States has not waived its sovereign immunity in this context. To support that position, Defendants point to the Stafford Act's “discretionary function exception, ” which provides that the federal government “shall not be liable for any claim based upon the exercise or performance of or the failure to exercise or perform a discretionary function or duty on the part of a Federal agency or an employee of the Federal Government in carrying out the provisions of this chapter.” Id. at 7-13; 42 U.S.C. § 5148. Additionally, Defendants argue that Plaintiffs have failed to state a claim under the APA because the challenged regulations are permissible interpretations of the Stafford Act's directives. Defs.' Mot. at 16-21.[2]

         Plaintiffs both oppose Defendants' Motion, see Pls.' Opp'n to Defs.' Mot., ECF No. 5 [hereinafter Pls.' Opp'n], and move for partial summary judgment, see Pls.' Mot. for Partial Summ. J., ECF No. 8 [hereinafter Pls.' Mot.]. Taking both motions together, Plaintiffs argue that the “regulations” FEMA has promulgated do not satisfy the congressional directive to issue or prescribe rules or regulations to implement the IHP. Compl. ¶¶ 82, 87, 90. Moreover, because Congress commanded FEMA to act, its failure to do so ...


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