Darst-Webbe Tenant Ass'n v. St. Louis Housing

• Decision Date: 08 August 2005
• Docket Number: No. 04-1614.,04-1614.
• Citation: 417 F.3d 898
• Parties: DARST-WEBBE TENANT ASSOCIATION BOARD, a Missouri non-profit corporation; Housing Comes First, a Missouri non-profit corporation; Peabody Tenant Association, a Missouri non-profit corporation, Plaintiffs-Appellants, v. ST. LOUIS HOUSING AUTHORITY, a Municipal corporation; Cheryl A. Lovell, in her official capacity as Director of the St. Louis Housing Authority; United States Department of Housing and Urban Development; Mel Martinez, in his official capacity as Secretary of United States Department of Housing and Urban Development, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

417 F.3d 898

DARST-WEBBE TENANT ASSOCIATION BOARD, a Missouri non-profit corporation; Housing Comes First, a Missouri non-profit corporation; Peabody Tenant Association, a Missouri non-profit corporation, Plaintiffs-Appellants, v. ST. LOUIS HOUSING AUTHORITY, a Municipal corporation; Cheryl A. Lovell, in her official capacity as Director of the St. Louis Housing Authority; United States Department of Housing and Urban Development; Mel Martinez, in his official capacity as Secretary of United States Department of Housing and Urban Development, Defendants-Appellees.

No. 04-1614.

United States Court of Appeals, Eighth Circuit.

Submitted: December 16, 2004.

Filed: August 8, 2005.

Ann B. Lever, argued, St. Louis, MO (Daniel K. Glazier, St. Louis, MO, on the brief), for appellant Darst-Webbe.

John J. Ammann, St. Louis University Legal Clinic, on the brief, for appellant Peabody Tenant.

Robert A. Graham, argued, Washington, D.C., for appellees St. Louis Housing Authority and Cheryl A. Lovell.

Barbara C. Biddle and August E. Flentje, U.S. Dept. of Justice, Civil Division, Washington, D.C., on the brief, for appellees U.S. Department of Housing and Urban Development, et al.

Before MELLOY, BOWMAN, and BENTON, Circuit Judges.

MELLOY, Circuit Judge.

On remand following partial summary judgment, a bench trial, and a prior appeal, the district court¹ found in favor of the defendants on six claims that relate to alleged discrimination in housing. We affirm.

I. Background

Plaintiffs-Appellants Darst-Webbe Tenant Association Board, Peabody Tenant Association, and Housing Comes First, Inc., brought this action against Defendant-Appellees the United States Department of Housing and Urban Development ("HUD") and the St. Louis Housing Authority (the "Housing Authority"). The plaintiffs' grievances arose from the defendants' funding, approval, and implementation of revitalization plans for the Darst-Webbe and Clinton Peabody public housing complexes in the Near South Side of St. Louis, Missouri. The revitalization plans employed federal HOPE VI program funds and called for the demolition of older housing projects that contained a high density of low-income, public housing rental units. The plans also called for the construction of mixed-income housing.

The proposed mix of housing for the revitalization area included: low-income, public housing rental units in which rent was a percentage of the occupants' income; low-income tax credit units in which rent was a percentage of the area median income; market rate rental units; and units built for sale at market and below-market rates. The revitalization plans called for a reduction in the total number of low-income, public housing rental units and also a reduction in the number of large, multi-bedroom units capable of comfortably housing large families.

To aid in the redevelopment, the City of St. Louis applied for and received Section 108 loan guarantees for improvements to the streets and other infrastructure around the reconstructed area. The infrastructure improvements were designed to eliminate the "superblock" model of the old projects, allow improved access for law enforcement and emergency services, reconnect the neighborhood to the street grid and the surrounding historic districts, and restore normal pedestrian and vehicle flows.

We set forth the history of this matter in Darst-Webbe Tenant Ass'n Bd. v. St. Louis Housing Auth., 339 F.3d 702 (8th Cir.2003) ("Darst-Webbe I").² There we explained that the Darst-Webbe buildings, built in the 1950s, originally contained 758 low-income, public housing rental units for families and 242 units designated for use by elderly residents. By 1995, when the Housing Authority formulated its initial revitalization plan, many of the units were dilapidated and only 220 of the family public housing rental units remained occupied. Those units were occupied almost entirely by African-American residents, resulting in a segregated development. Households with children and female-headed households were disproportionately represented among the residents. These disproportions also existed to a substantial extent among households on the waiting list for public housing and households eligible for public housing.

The Housing Authority did not proceed with demolition and reconstruction under the initial, 1995 plan. As a result, HUD placed the Housing Authority in default under the terms of the HOPE VI program. HUD then assisted the Housing Authority in the development of a new revitalization plan. The product of this collaboration was a modified, 1998 revitalization plan. Under the 1998 plan, which is currently being implemented, the existing 758 total units/220 occupied units were to be replaced with a mix of housing that included eighty low-income, public housing rental units. Of the eighty replacement low-income, public housing rental units, twelve contained four bedrooms and none contained more than four bedrooms.

The plaintiffs brought the present action against the Housing Authority requesting that an additional 120 low-income, public housing rental units be built on-or off-site and that the unit mix include a greater number of units with four or more bedrooms to accommodate large families. The plaintiffs also brought claims against HUD, alleging various infirmities with HUD's process of approving, and HUD's decision to approve and fund, the Housing Authority's plan.

The district court granted summary judgment in favor of the defendants on one count and held a bench trial to address the other counts. Following the bench trial, the district court returned a mixed verdict, ruling in favor of the plaintiffs on counts that involved the separate, Clinton Peabody housing complex, but ruling in favor of the defendants on counts related to the Darst-Webbe complex. The defendants did not appeal the adverse rulings regarding the Clinton Peabody housing complex.

In the prior appeal, Darst-Webbe I, the plaintiffs appealed the summary judgment ruling and eight of the counts related to Darst-Webbe. We affirmed the district court's grant of summary judgment in favor of the defendants. We also affirmed the district court's trial judgment in favor of the defendants on two of the eight appealed counts. On the remaining six counts, we remanded for further findings of fact and law.

The first three remanded counts were original Counts I-III against the Housing Authority. In these counts, the plaintiffs alleged disparate impact discrimination under the Fair Housing Act, 42 U.S.C. § 3604(a) & (b) ("FHA") based on race, sex, and familial status, respectively. No parties sought to augment the record on remand, and the district court considered no new evidence. The district court applied the burden shifting analysis for FHA disparate impact claims, found that the plaintiffs had failed to demonstrate a disparate impact upon a protected class, and found in the alternative that even if the plaintiffs had demonstrated a disparate impact, the Housing Authority had met its burden to prove that any disparate impact was justifiable as necessary to achieve legitimate policy objectives. See, e.g., Oti Kaga, Inc. v. South Dakota Housing Dev. Auth., 342 F.3d 871, 883 (8th Cir.2003) (applying a burden-shifting analysis to an FHA disparate impact claim and finding a public housing fund allocation decision "justifiable on the ground it is necessary to [the defendant's] exercise of its funding responsibilities."). The district court found in the further alternative that the plaintiffs had failed to offer an alternative policy that could meet the many and varied policy goals set out for the HOPE VI program and revitalization of the Near South Side without discriminatory effects. See, e.g., id. at 883 (noting that a plaintiff "may nonetheless prevail by showing another policy would accomplish [the proffered policy] objectives without the discriminatory effects"); Huntington Branch, N.A.A.C.P. v. Town of Huntington, 844 F.2d 926, 936 (2d Cir.1988) (stating that if defendants set out a legitimate, non-discriminatory justification, the burden shifts back to plaintiffs to show alternative means to achieve the legitimate goals with a less discriminatory effect).

The second three remanded counts were original Counts XIII, XVII, and XVIII against HUD. In these counts, the plaintiffs alleged that HUD did not adequately consider the impact of the Housing Authority's revitalization plan on protected classes. The plaintiffs also alleged that the revitalization plan discriminated against African-Americans, women, and children and consigned displaced Darst-Webbe family households to live in racially segregated public housing developments.³ As a result, the plaintiffs argued, HUD violated the Administrative Procedures Act, 5 U.S.C. § 701 et seq. ("APA") and the Fair Housing Act, 42 U.S.C. § 3608(e), by failing to consider impact on protected classes and failing to satisfy HUD's general statutory mandate to affirmatively further fair housing.

Count XIII focused specifically on HUD's approval of the Section 108 loan guarantee to the City of St. Louis as an objectionable action that failed to affirmatively further fair housing. In Count XVII, the plaintiffs alleged that HUD violated the APA by approving the Section 108 loan guarantee. Finally, in Count XVIII, the plaintiffs alleged that HUD violated the APA by approving the Darst-Webbe HOPE VI plan.

As to these latter three Counts, the district court found against the plaintiffs. The district court discussed the history of the specific HOPE VI plan for the Near South Side and the relationship between the HOPE VI plan and the Section 108 loan program to help the city improve infrastructure around the project. The district court also discussed the HOPE VI program in general, identified many of the numerous goals that HUD is required by statute to satisfy and noted that the plan in this case was supported by detailed studies regarding...