Cnty. of Westchester v. U.S. Dep't of Hous. & Urban Dev.
| Citation | 778 F.3d 412 |
| Decision Date | 18 February 2015 |
| Docket Number | Docket No. 13–3087. |
| Parties | County of WESTCHESTER, Plaintiff–Appellant, v. UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, Shaun L.S. Donovan, as Secretary of HUD, Defendant–Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (2nd Circuit) |
OPINION TEXT STARTS HERE
Robert F. Meehan, Westchester County Attorney (James Castro–Blanco, Linda M. Trentacoste, Adam Rodriguez, Justin R. Adin, on the brief), White Plains, NY, for Appellant.
David J. Kennedy, Assistant United States Attorney (Benjamin H. Torrance, on the brief), for Preet Bharara, United States Attorney for the Southern District of New York, New York, NY, for Appellees.
Before: LEVAL, CHIN, and CARNEY, Circuit Judges.
The County of Westchester (“the County”) appeals from the judgment of the United States District Court for the Southern District of New York (Cote, J.) dismissing the County's suit against the U.S. Department of Housing and Urban Development (“HUD”) for lack of jurisdiction. The County sued HUD alleging that the agency acted in an arbitrary and capricious manner by rejecting the County's fiscal year (“FY”) 2011 Action Plan and certification that it would affirmatively further fair housing, which the County submitted to obtain certain HUD-administered grants. The district court ruled that HUD's rejection of the County's submissions was an act “committed to agency discretion by law,” see5 U.S.C. § 701(a)(2), and thus not subject to judicial review under the Administrative Procedure Act (“APA”).
We conclude that HUD's actions are not “committed to agency discretion by law” so as to render them unreviewable, because the statutes governing HUD's administration of the relevant grant programs provide meaningful standards against which to judge HUD's exercise of discretion. Accordingly, we vacate the judgment which dismissed the County's APA claims as not subject to judicial review under the APA. We affirm the dismissal of certain of the County's claims as moot, insofar as the County seeks relief with respect to certain grant funds that have already been reallocated to other jurisdictions.
In order to obtain certain HUD-administered grants, the County 1 is required to submit annual Action Plans detailing how the County will use the grant funding. 24 C.F.R. §§ 91.15, 91.220. Along with the Action Plan, the County must certify that the County will “affirmatively further fair housing.” 42 U.S.C. §§ 5304(b)(2), 12705(b)(15); 24 C.F.R. § 91.225(a)(1). Under HUD regulations, this means the County must “conduct an analysis to identify impediments to fair housing choice within the jurisdiction” (an “analysis of impediments,” or “AI”) and “take appropriate actions to overcome the effects of any impediments identified through that analysis.” 24 C.F.R. § 91.225(a)(1).
In 2006, the Anti–Discrimination Center of Metro New York filed a qui tam action against the County under the False Claims Act, 31 U.S.C. §§ 3729–33, alleging that the County had filed false certifications with HUD to obtain millions of dollars in grant funding. U.S. ex rel. Anti–Discrimination Ctr. of Metro N.Y., Inc. v. Westchester Cnty., 712 F.3d 761, 765 (2d Cir.2013) (“ Westchester 2013 Ct. App.”). The suit alleged that the County's certifications were false because the County had failed to conduct a meaningful analysis of impedimentsor take steps to overcome barriers to fair housing caused by racial discrimination and segregation.
In 2009, HUD intervened in the action, and HUD and the County agreed to a Stipulation and Order of Settlement and Dismissal (“the consent decree”). Under the consent decree, the County was required to pay $30 million to the United States and to take numerous steps to further fair and affordable housing within its jurisdiction. Most relevant to this appeal, the County agreed to conduct a new AI analyzing impediments to fair housing and identifying actions the County would take to overcome those impediments. The consent decree required that the AI be “deemed acceptable by HUD.” Joint App'x (“JA”) at 98. The County also agreed to “promote, through the County Executive, legislation ... to ban ‘source-of-income’ discrimination in housing.” JA at 99.2 The consent decree provided for the appointment of a monitor and established a dispute resolution process whereby the parties could submit grievances to the monitor for resolution.
In July 2010, the County submitted an AI to HUD pursuant to the consent decree. HUD rejected the AI, identifying multiple deficiencies for the County to address. In April 2011, having not yet received a revised AI, HUD notified the County that it intended to reject the County's FY 2011 certification that the County would affirmatively further fair housing (“fair housing certification”) due to the inadequate AI. In response, the County submitted a revised AI, which HUD also found deficient. HUD then formally rejected the County's fair housing certification and accordingly disapproved the County's FY 2011 Action Plan as “substantially incomplete.” JA 125. HUD identified a series of corrective actions the County could take to win HUD's approval of the AI and obtain its FY 2011 formula allocations under the relevant grant programs. Among other steps, HUD notified the County that it was required to commit to taking certain actions to promote source-of-income legislation, and that it was obligated to develop a detailed strategy to address specified restrictive zoning practices.
After the County submitted and HUD rejected yet another AI, the parties referred their dispute over the AI to the monitor for resolution. In November 2011, the monitor issued a Report and Recommendation concluding that the County was obligated under the consent decree to analyze the impact of specified restrictive zoning practices and to develop a clear strategy for overcoming exclusionary zoning within its jurisdiction. The monitor also determined that the County had breached its obligation under the consent decree to promote source-of-income legislation. The parties sought review of the monitor's decision, and the district court upheld the monitor's report. U.S. ex rel. Anti–Discrimination Ctr. of Metro N.Y., Inc. v. Westchester Cnty., No. 06 Civ. 2860(DLC), 2012 WL 1574819, at *11 (“ Westchester 2012 Dist. Ct.”).
Following the monitor's ruling, the County submitted a series of zoning analyses to HUD, all of which HUD rejected. HUD informed the County that its submissions contained flawed data analysis, failed to address whether zoning practices were exclusionary under state and federal case law, and lacked adequate strategies for bringing about change in municipalities with problematic zoning practices.
In March 2013, HUD notified the County that it intended to reallocate the approximately $7.4 million in funds that had been allocated to the County for FY 2011 under the Community Development Block Grant (“CDBG”), HOME Investment Partnership (“HOME”), and Emergency Shelter Grant (“ESG”) programs. The FY 2011 appropriation for these funds was set to expire by statute on September 30, 2013. HUD gave the County until April 25, 2013 to submit a satisfactory zoning analysis and plan to overcome exclusionary zoning. One day before the deadline, the County submitted a lengthy revised AI and also filed suit against HUD in federal court. After continuing to reject the County's submissions as inadequate, HUD ultimately reallocated the vast majority of the County's FY 2011 grant allocation.
The County filed suit against HUD in the Southern District of New York on April 24, 2013, asserting claims under the Administrative Procedure Act (“APA”) and 42 U.S.C. § 12711, which restricts HUD interference with lawful local housing policies.3 As relief, the County asked the court to enjoin the reallocation of its FY 2011 grant funds; declare that HUD's rejection of its FY 2011 Action Plan and fair housing certification violated the APA and § 12711; and order HUD to approve the County's FY 2011 grant submission.4
HUD moved to dismiss. The district court granted HUD's motion, ruling that it lacked jurisdiction over the County's APA claims.5 The court concluded that HUD's rejection of the County's fair housing certification was an act “committed to agency discretion by law” and therefore not subject to judicial review. See5 U.S.C. § 701(a)(2). The County appealed.
As a preliminary matter, HUD argues that this appeal is moot with respect to the FY 2011 funds that HUD has already reallocated to other jurisdictions. An action not moot at its inception can become moot on appeal if “an event occurs during the course of the proceedings or on appeal that makes it impossible for the court to grant any effectual relief whatever to a prevailing party.” County of Suffolk v. Sebelius, 605 F.3d 135, 140 (2d Cir.2010) (internal quotation marks omitted).
This court addressed a similar claim of mootness in County of Suffolk v. Sebelius. In County of Suffolk, the plaintiff counties filed suit against the Department of Health and Human Services (“HHS”) under the APA, arguing that HHS had improperly withheld certain grant funds from the plaintiffs in fiscal years 2007 and 2008. Id. at 138–39. While the suit was pending, HHS moved to dismiss the action as moot, on the grounds that HHS had already distributed all funds appropriated by Congress for fiscal years 2007 and 2008 to other eligible grantees. Id. at 139. This court agreed that the case was moot. Id. at 144. The court noted that the APA's limited waiver of the federal government's sovereign immunity permits only suits seeking relief “other than money damages.” Id. at 140 (citing 5 U.S.C. § 702). Thus, while the counties could sue under the APA for an order directing HHS to give them funds appropriated by Congress for the relevant grant programs in fiscal years 2007–2008, the...
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