Cornell Village Tower Condo. v. DEPT. OF HUD, No. 88 C 10099.

CourtUnited States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
Writing for the CourtAnton Valukas, U.S. Atty., Gillum Ferguson, Asst. U.S. Atty., Chicago, Ill., for defendants
Citation750 F. Supp. 909
PartiesCORNELL VILLAGE TOWER CONDOMINIUM, Harold R. Metcalf, Karlyn A. Metcalf, Imre G. Hidvegi, Denise F. Hidgevi, Thomas Roby, Mary Roby, David Z. Feuer, and Joyce H. Feuer, Plaintiffs, v. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, Samuel Pierce, Secretary of Housing and Urban Development, and Gertrude Jordan, Regional Administrator of Chicago Area Housing and Urban Development Office, Defendants.
Decision Date09 October 1990
Docket NumberNo. 88 C 10099.

750 F. Supp. 909

CORNELL VILLAGE TOWER CONDOMINIUM, Harold R. Metcalf, Karlyn A. Metcalf, Imre G. Hidvegi, Denise F. Hidgevi, Thomas Roby, Mary Roby, David Z. Feuer, and Joyce H. Feuer, Plaintiffs,
v.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, Samuel Pierce, Secretary of Housing and Urban Development, and Gertrude Jordan, Regional Administrator of Chicago Area Housing and Urban Development Office, Defendants.

No. 88 C 10099.

United States District Court, N.D. Illinois, E.D.

October 9, 1990.


750 F. Supp. 910
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750 F. Supp. 911
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750 F. Supp. 912
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750 F. Supp. 913
Robert W. Fioretti, Donnie Rudd, Donnie Rudd & Associates, Schaumburg, Ill., Jerome Wiener, Glenn Sechen, Donnie Rudd & Associates, Chicago, Ill., for plaintiffs

Anton Valukas, U.S. Atty., Gillum Ferguson, Asst. U.S. Atty., Chicago, Ill., for defendants.

MEMORANDUM AND ORDER

MORAN, Chief Judge.

Seeking to prevent the construction of a 21-story apartment building in their neighborhood, plaintiffs, a condominium association and several of its members (collectively "Cornell"), have filed this action against the United States Department of Housing and Urban Development and two of its officials (collectively "HUD"), alleging that HUD's decision to award this project a Housing Development Grant was arbitrary, capricious, and an abuse of discretion. Before this court is HUD's motion to dismiss or for summary judgment. For the following reasons, that motion is granted in part and denied in part.

FACTS

The Housing Development Grant Program, authorized by § 17(d) of the U.S. Housing Act of 1937, 42 U.S.C. § 1437o (d) (1988), provides federal funds for the rehabilitation and development of privately owned property that will be used for primarily residential rental purposes and that is located in areas experiencing severe rental housing shortages. To be eligible for a grant under this program, a developer must reserve at least 20 percent of the project's units for lower income families. The Secretary of Housing and Urban Development has awarded a Housing Development Grant to the City of Chicago ("the City") for the development of the Park Tower Apartment building, the project at issue here, and Cornell is attempting, through this suit, to enjoin the release of funds. In its two-count complaint, Cornell points to several violations of HUD regulations that allegedly render HUD's decision to award the grant "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" under the Administrative Procedure Act ("APA"), 5 U.S.C. § 706(2)(A) (1988). Count I asserts that HUD failed to ensure that the City's application met two of the threshold requirements set forth in 24 C.F.R. § 850.37, and Count II claims that HUD's erred in accepting the City's finding that the project would have no significant impact on the environment. We consider these allegations in turn.

DISCUSSION

A. Count I: HUD's Threshold Requirements for Housing Development Grant Applications

Pursuant to the Housing Development Grant Program of the United States Housing Act of 1937, 42 U.S.C. § 1437o (1988), the Department of Housing and Urban Development has promulgated a series of regulations that sets forth the eligibility and application requirements and award procedures for Housing Development Grants. 24 C.F.R. Pt. 850 (1989). These regulations require, as part of the application procedure, that a potential grantee fulfill certain threshold requirements before an application will be considered by HUD. 24 C.F.R. § 850.37. According to Cornell, HUD's initial approval and subsequent failure to rescind the grant in this case violates two of § 850.37's threshold requirements: § 850.37(i), which forbids consideration of applications where the applicant is not able to ensure that "the project will be started within 24 months of notice of HUD preliminary funding approval and will be completed in a timely manner"; and § 850.37(m), which limits consideration to those applications "determined not to have a negative effect on neighborhood development or cause undue relocation hardship."

750 F. Supp. 914

1. Sovereign Immunity

In urging dismissal of Count I of Cornell's complaint, HUD asserts that judicial review of the alleged violations of § 850.37 is barred by sovereign immunity, arguing that agency action taken pursuant to these regulations is "committed to agency discretion by law," 5 U.S.C. § 701(a)(2), and that as a result, the waiver of sovereign immunity found in the Administrative Procedure Act does not extend to the allegations in Count I. Cornell, in turn, points to 42 U.S.C. § 1404a (1988) as an alternative waiver of sovereign immunity; that section provides, inter alia:

The Secretary of Housing and Urban Development may sue and be sued only with respect to its functions under the United States Housing Act of 1937, as amended 42 U.S.C. 1437 et seq., and title II of Public Law 671, Seventy-sixth Congress, approved June 28, 1940, as amended 42 U.S.C. 1501 et seq..

HUD attempts to disclaim the applicability of § 1404a by arguing that Cornell has asserted a violation of regulation rather than of statute, and therefore only the APA can provide the waiver of sovereign immunity necessary to permit review of the alleged violations. This argument, however, misconstrues the nature and applicability of the Administrative Procedure Act. The APA broadly subjects agency action of all kind to judicial review; it is not restricted to action claimed to transgress an agency regulation. See, e.g., Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971) (APA invoked to review an alleged violation of § 4(f) of the Department of Transportation Act of 1966). Similarly, judicial review of regulatory irregularities is available under non-APA auspices. See, e.g., Grant v. Schweiker, 699 F.2d 189 (4th Cir.1983) (review of alleged violation of a Social Security Regulation pursuant to § 405 of the Social Security Act). Review in this case, then, could be predicated on a sovereign immunity waiver found in § 1404a. And that section, which applies to suits relating to the functions of the Secretary of Housing and Urban Development under, inter alia, the Housing Act of 1937, does appear to extend to an action for equitable damages alleging a violation of a regulation promulgated by HUD to implement § 17 of this Act. See United States v. Yonkers Board of Education, 594 F.Supp. 466, 470 (S.D.N.Y.1984) (§ 1404a waives sovereign immunity "for claims alleging direct violations by HUD of the substantive provisions of the Housing Acts"); Little Earth of United Tribes, Inc. v. United States Dep't of Housing & Urban Dev., 584 F.Supp. 1292, 1299 (D.Minn. 1983); cf. Batterton v. Francis, 432 U.S. 416, 425 n. 9, 97 S.Ct. 2399, 2405 n. 9, 53 L.Ed.2d 448 (1977) (quoting U.S. Dep't of Justice, Attorney General's Manual on the Administrative Procedure Act 30 n. 3 (1947)) (suggesting that substantive regulations issued pursuant to statutory authority are part of the statutory scheme and "`have the force and effect of law'").1

That sovereign immunity may be waived by a non-APA provision, however, does not mean that the exceptions to judicial review contained in the APA can be ignored. Section 701(a) of the APA excludes judicial review of agency action in two situations: where a statute precludes review and where agency action is committed to agency discretion by law. 5 U.S.C. § 701(a). These limitations on review do not represent, as HUD and Cornell seem to think, exceptions to the APA's comprehensive waiver of sovereign immunity contained in § 702; rather, they constitute distinct inquiries that therefore must be pursued even in the presence of an alternative waiver. See Saferstein, Nonreviewability: A Functional Analysis of "Committed to Agency Discretion", 82 Harv.L.Rev. 367, 368-69; Scanwell Laboratories, Inc. v. Shaffer, 424 F.2d 859, 873-74 (D.C.Cir. 1970).2

750 F. Supp. 915

HUD does not assert, nor do we believe, that Congress intended to preclude review of agency action in this area;3 indeed, § 1404a indicates a clear intent to make HUD's actions under the Housing Act of 1937 reviewable. Instead, HUD's argument focuses on the second prong of § 701(a), claiming that the agency action at issue is nonreviewable because of its discretionary nature. Although frequently discussed, this exception is quite narrow in scope; the Supreme Court, in its first exploration of this doctrine, announced that § 701(a)(2) precluded review only "in those rare instances where `statutes are drawn in such broad terms that in a given case there is no law to apply.'" Overton Park, 401 U.S. at 410, 91 S.Ct. at 820 (quoting S.Rep. No. 752, 79th Cong., 1st Sess. 26 (1945) (legislative history of the Administrative Procedure Act)). Though criticized, see Cardoza v. Commodity Futures Trading Commission, 768 F.2d 1542, 1548-49 & n. 5 (7th Cir.1985), the "no law to apply" standard appears to enjoy continued vitality. See Heckler v. Chaney, 470 U.S. 821, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985); Turner v. United States Parole Commission, 810 F.2d 612, 614 (7th Cir.1987) ("judicial review will ... be presumed unless the statutory scheme provides no meaningful guideline by which to define the limits of the agency's discretion"); Robbins v. Reagan, 780 F.2d 37, 45 (D.C.Cir.1985). Where agency action is of a sort that is inherently unsuitable for judicial review, a presumption of nonreviewability is imposed, which can be defeated by a showing that Congress intended to circumscribe agency discretion by "providing meaningful standards for defining the limits of that discretion." Heckler, 470 U.S. at 834, 105 S.Ct. at 1657; Cardoza, 768 F.2d at 1549; Robbins, 780 F.2d at 44. This requirement necessarily imposes a greater burden on the party seeking review than the test for presumptively reviewable cases even though the...

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5 practice notes
  • Castenson v. City of Harcourt, No. C 99-3031-MWB.
    • United States
    • United States District Courts. 8th Circuit. Northern District of Iowa
    • March 8, 2000
    ..."known to be interested" in activities covered by a FONSI is Cornell Village Tower Condominium v. Department of Housing and Urban Dev., 750 F.Supp. 909 (N.D.Ill.1990). In Cornell Village, HUD awarded a Housing Development Grant to the City of Chicago for the development of the Park Tower Ap......
  • Cnty. of Cook v. HSBC N. Am. Holdings Inc., 14-cv-2031
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • September 30, 2015
    ...F.2d 1158 (7th Cir.1987), explicitly abrogated this aspect of Alschuler. See Cornell Vill. Tower Condo. v. Dep't of Hous. & Urban Dev., 750 F.Supp. 909, 919 (N.D.Ill.1990). This leaves Defendants' reliance on several cases from other districts, principally City of Miami v. Bank of Am. Corp.......
  • McWaters v. Federal Emergency Management Agency, No. CIV.A.05-5488.
    • United States
    • United States District Courts. 5th Circuit. United States District Court (Eastern District of Louisiana)
    • December 12, 2005
    ...from all judicial review. See 42 U.S.C. § 5121. In Cornell Village Tower Condominium v. Department of Housing and Urban Development, 750 F.Supp. 909, 915 (N.D.Ill. 1990), the court, in discussing the second prong of § 701(a) (the agency discretion exception), commented on its narrow scope, ......
  • Winchester Coalition v. U.S. Dept. of Hud, No. C2-98-00165.
    • United States
    • United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
    • March 27, 1998
    ...present case is factually similar to the situation in Cornell Village Tower Condominium v. Department of Hous. and Urban Page 1062 Dev., 750 F.Supp. 909 (N.D.Ill.1990). There, a condo association brought suit under the APA against HUD alleging that HUD's decision to place low-income housing......
  • Request a trial to view additional results
5 cases
  • Castenson v. City of Harcourt, No. C 99-3031-MWB.
    • United States
    • United States District Courts. 8th Circuit. Northern District of Iowa
    • March 8, 2000
    ...to be interested" in activities covered by a FONSI is Cornell Village Tower Condominium v. Department of Housing and Urban Dev., 750 F.Supp. 909 (N.D.Ill.1990). In Cornell Village, HUD awarded a Housing Development Grant to the City of Chicago for the development of the Park Tower Apar......
  • Cnty. of Cook v. HSBC N. Am. Holdings Inc., 14-cv-2031
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • September 30, 2015
    ...1158 (7th Cir.1987), explicitly abrogated this aspect of Alschuler. See Cornell Vill. Tower Condo. v. Dep't of Hous. & Urban Dev., 750 F.Supp. 909, 919 (N.D.Ill.1990). This leaves Defendants' reliance on several cases from other districts, principally City of Miami v. Bank of Am. Corp.,......
  • McWaters v. Federal Emergency Management Agency, No. CIV.A.05-5488.
    • United States
    • United States District Courts. 5th Circuit. United States District Court (Eastern District of Louisiana)
    • December 12, 2005
    ...from all judicial review. See 42 U.S.C. § 5121. In Cornell Village Tower Condominium v. Department of Housing and Urban Development, 750 F.Supp. 909, 915 (N.D.Ill. 1990), the court, in discussing the second prong of § 701(a) (the agency discretion exception), commented on its narrow scope, ......
  • Winchester Coalition v. U.S. Dept. of Hud, No. C2-98-00165.
    • United States
    • United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
    • March 27, 1998
    ...present case is factually similar to the situation in Cornell Village Tower Condominium v. Department of Hous. and Urban Page 1062 Dev., 750 F.Supp. 909 (N.D.Ill.1990). There, a condo association brought suit under the APA against HUD alleging that HUD's decision to place low-income housing......
  • Request a trial to view additional results

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