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National Fair Housing Alliance v. Carson

United States District Court, District of Columbia

August 26, 2019

NATIONAL FAIR HOUSING ALLIANCE, et al., Plaintiffs,
v.
BENJAMIN C. CARSON, SR., M.D., in his official capacity as Secretary of Housing and Urban Development, et al., Defendants.

          MEMORANDUM OPINION

          BERYL A. HOWELL CHIEF JUDGE.

         The three plaintiffs, an alliance of nonprofit organizations dedicated to promoting fair housing opportunities plus two organizations focused on housing opportunities in Texas, previously sought a preliminary injunction and expedited motion for summary judgment to require the defendant, the U.S. Department of Housing and Urban Development (“HUD”), to rescind administrative action taken on May 23, 2018 suspending the use of an “Assessment Tool, ” a version of which was first adopted by the agency in December 2015. See Pls.' Mot. Prelim. Injunc. & Exped. Summ. J., ECF No. 19; see also HUD Notice, Affirmatively Furthering Fair Housing: Withdrawal of the Assessment Tool for Local Governments (“LG2017 Withdrawal Notice”), 83 Fed. Reg. 23, 922 (May 23, 2018); HUD Notice, Affirmatively Furthering Fair Housing (AFFH): Responsibility to Conduct Analysis of Impediments (“AI Reliance Notice”), 83 Fed. Reg. 23, 927 (May 23, 2018). HUD had taken these steps after concluding, based on operational experience, that the Assessment Tool was unsustainably costly, see LG2017 Withdrawal Notice, 83 Fed. Reg. at 23, 925, and ultimately ineffective for its purpose, namely: ensuring HUD grantees were affirmatively furthering fair housing, id. at 23, 923-25. In this litigation, HUD both opposed the plaintiffs' motions, see Defs.' Opp'n Pls.' Mot. Summ. J., ECF No. 33, and moved to dismiss the action for lack of subject matter jurisdiction because no plaintiff had standing, see Defs.' Mot. Dismiss Pls.' Am. Compl. (“Defs.' MTD”), ECF No. 38. The Court granted HUD's motion to dismiss for lack of subject matter jurisdiction and further held that the plaintiffs would not have been entitled to the injunctive relief they sought, even if they had standing. See Nat'l Fair Hous. All. v. Carson (“NFHA”), 330 F.Supp.3d 14 (D.D.C. 2018).

         Now, with a proposed second amended complaint that would add to the first amended complaint 46 new paragraphs and three new sections, respectively titled “How the Consolidated Plan Differs from the Assessment of Fair Housing, ” Proposed Second Am. Compl., ¶¶ 79-85, ECF No. 48-1, “The AI Process Under HUD's Notices, ” id. ¶¶ 112-117, and “Significant Provisions of the Rule That Are No. Longer in Effect, ” id. ¶¶ 118-128, the plaintiffs seek, pursuant to Federal Rules of Civil Procedure 59(e) and 15(a)(2), to set aside the prior decision and restart this litigation. See Pls.' Mot. Am. J. & Leave Am. Compl. (“Pls.' Mot.”), ECF No. 48; Pls.' Mem. Supp. Mot. Am. J. & Leave Am. Compl. (“Pls.' Mem.”), ECF No. 48. This time around, rather than seeking expedited summary judgment, the plaintiffs want to follow the regular course in an Administrative Procedure Act case by requiring “submission of HUD's entire administrative record, ” Pls.' Reply Supp. Mot. Am. J. & Leave Am. Compl. (“Pls.' Reply”) at 6, ECF No. 51, so that the claims may be resolved on “a fuller record, ” id. at 1. Thus, the plaintiffs' motion asks the Court to amend its decision only with respect to whether the plaintiffs have standing, but without challenging the “denial of Plaintiffs' motion for a preliminary injunction or expedited summary judgment.” See Pls.' Mem. at 1 n.1. For the reasons set forth below, the plaintiffs' motion is denied.

         I. BACKGROUND

         The statutory, regulatory, and factual background for this case were accounted for in the Court's opinion granting the defendants' motion to dismiss. See NFHA, 330 F.Supp.3d at 24- 37. Still, the background bears repeating here to some degree as context for why the plaintiffs' Rule 59(e) motion is denied.

         A. Statutory and Regulatory Framework

         The Fair Housing Act (“FHA”), 42 U.S.C. § 3601, et seq., prohibits discrimination based on “race, color, religion, sex, familial status, or national origin” in the sale and rental of housing and other residential real estate-related transactions. Id. §§ 3604-05. That statute also requires HUD to “administer the programs and activities relating to housing and urban development in a manner affirmatively to further the policies of” fair housing, id. § 3608(e)(5), known as the “affirmatively further fair housing, ” or “AFFH, ” requirement. The AFFH requirement imposes duties on HUD, Otero v. N.Y. City Hous. Auth., 484 F.2d 1122, 1134 (2d Cir. 1973), which HUD meets, in part, through grants to State and local governments.

         To qualify for funds under the largest of these grants, “a grantee must submit a consolidated plan.” 24 C.F.R. § 570.302. A Consolidated Plan operates as (1) “[a] planning document for the jurisdiction, which builds on a participatory process among citizens, organizations, businesses, and other stakeholders”; (2) “[a] submission for federal funds under HUD's formula grant programs for jurisdictions”; (3) “[a] strategy to be followed in carrying out HUD programs”; and (4) “[a] management tool for assessing performance and tracking results.” Id. § 91.1(b). Moreover, grantees, also known as program participants, must certify that the grant will be administered to comply with the AFFH requirement. 42 U.S.C. § 5304(b)(2) (local government grantees); id. § 5306(d)(7)(B) (State grantees); id. § 12705(b)(15) (State and local grantees); id. § 1437c-1(d)(16) (public housing agency grantees).

         Beginning in the 1990s, HUD required grantees certifying compliance with the AFFH requirement to undergo a process called Analysis of Impediments in Fair Housing (“AI”). See 24 C.F.R. § 91.225(a)(1) (1995). That process called for grantees to analyze impediments to fair housing within the relevant jurisdiction, respond appropriately to those impediments, and maintain relevant records. Id. Experience proved, however, that the AI process failed to ensure compliance with the AFFH requirement. See U.S. Gov't Accountability Office, Rpt. No. GAO-10-905, Housing and Community Grants: HUD Needs to Enhance Its Requirements and Oversight of Jurisdictions' Fair Housing Plans (2010), available at https://www.gao.gov/assets/320/311065.pdf; U.S. Dep't of Housing and Urban Development, Office of Policy Development and Research, Analysis of Impediments Study (2009), available at http://www.documentcloud.org/documents/365748-hud-reporting-compliance-report.html.

         In 2013, HUD took a significant step toward overhauling the ineffectual AI process by proposing a rule that would revamp how HUD enforced grantees' compliance with the AFFH requirement. See HUD Proposed Rule, Affirmatively Furthering Fair Housing, 78 Fed. Reg. 43, 710 (July 19, 2013). By July 2015, HUD finalized the new rule, realizing many of the proposed changes. See HUD Final Rule, Affirmatively Furthering Fair Housing (“AFFH Rule”), 80 Fed. Reg. 42, 272 (July 16, 2015).

         First, the AFFH Rule defined “affirmatively further fair housing” to mean “taking meaningful actions, in addition to combating discrimination, that overcome patterns of segregation and foster inclusive communities free from barriers that restrict access to opportunity based on protected characteristics.” 24 C.F.R. § 5.152. More specifically, HUD defined that phrase to mean “taking meaningful actions that, taken together, address significant disparities in housing needs and in access to opportunity, replacing segregated living patterns with truly integrated and balanced living patterns, transforming racially and ethnically concentrated areas of poverty into areas of opportunity, and fostering and maintaining compliance with civil rights and fair housing laws.” Id.

         Second, the AFFH Rule required grantees to integrate an Assessment of Fair Housing (“AFH”) into the planning documents, such as a Consolidated Plan, required by a grant. Id. § 5.154(a). AFHs were to be conducted “[u]sing the Assessment Tool prescribed by HUD, ” id. § 5.154(d), which were the “forms or templates and the accompanying instructions provided by HUD that program participants must use to conduct and submit an AFH, ” id. § 5.152. AFHs were intended to compel grantees to study local fair housing concerns, compliance with fair housing laws and regulations, and disparities with respect to, among other things, poverty and housing opportunities based on any protected characteristic. Id. § 5.154(d)(1)-(2). Additionally, grantees were to determine the factors contributing to, and goals to overcome, any identified fair housing disparities. Id. § 5.154(d)(3)-(4). That accumulated information would then inform the planning documents a grantee submitted to HUD. Id. § 5.154(d)(5). The rule obligated HUD to review completed AFHs for compliance with the regulations, id. § 5.162(a)(1), and to return any AFH that the agency deemed “inconsistent with fair housing or civil rights requirements, ” id. § 5.162(b)(1), or that was “developed without the required community participation or the required consultation, ” id. § 5.162(b)(1)(ii)(A). For any rejected AFH, HUD committed to providing program participants with reasons for non-acceptance and an opportunity to revise the AFH. Id. § 5.162(a)(1), (c). Approval of a Consolidated Plan would be contingent upon an approved AFH. Id. § 5.162(d). The AFFH Rule set deadlines for program participants to complete initial AFHs that depended on the type of the program participant. Id. § 5.160(a). All deadlines were triggered by HUD's publication of an Assessment Tool for use by that type of program participant. Id. § 5.160(a)(1)(ii). Grantees facing a distant initial deadline were, in the meantime, obligated to certify compliance with the AFFH requirement through the AI process. Id. § 5.151.

         Third, the AFFH Rule enhanced the role of community participation in the development of both AFHs and Consolidated Plans. Id. § 5.158(a). To ensure “meaningful community participation” in each, program participants were instructed to “employ communications means designed to reach the broadest audience, ” which could be accomplished through posting summaries of the relevant documents in “newspapers of general circulation, ” and uploading them to the program participant's website. Id. The AFFH Rule also reinvigorated the community participation requirements set out in 24 C.F.R. § § 91.105, 91.115, and 91.401, which required grantees, among other things, to consult with organizations, and to create a “citizen participation plan, ” while preparing a Consolidated Plan and, following the AFFH Rule, an AFH. Id. § 91.105.

         Fourth, the AFFH Rule tightened program participants' record keeping duties. Id. § 5.168. For example, the rule compelled grantees to maintain records documenting “compliance with the consultation and community participation requirements” and “the actions the program participant has taken to affirmatively further fair housing.” Id. ยง 5.168(a)(2), (3). Inadequate ...


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