Dean v. Martinez

• Decision Date: 21 September 2004
• Docket Number: No. CIV. CCB-03-1381.,CIV. CCB-03-1381.
• Citation: 336 F.Supp.2d 477
• Parties: Colatta DEAN, et al. v. Mel MARTINEZ, et al.
• Court: U.S. District Court — District of Maryland

336 F.Supp.2d 477

Colatta DEAN, et al. v. Mel MARTINEZ, et al.

No. CIV. CCB-03-1381.

United States District Court, D. Maryland.

September 21, 2004.

COPYRIGHT MATERIAL OMITTED

Gregory Leo Countess, Hannah E. M. Lieberman, Legal Aid Bureau Inc, Baltimore, MD, for Plaintiffs.

Allen F. Loucks, Office of the United States Attorney, David E. Ralph, Kurt A. Heinrich, Baltimore City Law Department, Baltimore, MD, for Defendants.

MEMORANDUM

BLAKE, District Judge.

In this litigation, a group of former tenants are challenging plans to redevelop the Uplands Apartments, a 979-unit public housing project in Western Baltimore. The United States Department of Housing and Urban Development ("HUD") became the "Mortgagee in Possession" ("MIP") of the Uplands on January 1, 2001 and then acquired the property in a foreclosure sale on June 2, 2003. On about January 5, 2004, HUD sold the Uplands to the City of Baltimore for $10. The City plans to demolish the existing structures and replace them with a mix of market-rate and "affordable" housing — a plan that HUD not only authorized, but supported with a pledge of up to $36 million in grants. The plaintiffs allege that this disposition of the property was unlawful. Accordingly, they have sued HUD, HUD's Secretary, Mel Martinez, the Mayor of Baltimore, Baltimore's Department of Housing and Community Development ("DHCD"), and the DHCD's Commissioner, Paul Graziano.

This Memorandum addresses cross-motions for partial summary judgment with respect to the federal defendants, that is, HUD and HUD's Secretary (collectively, "HUD").¹ According to the plaintiffs, HUD committed several legal errors in disposing of the Uplands property: first, it failed to follow procedures mandated by the Multifamily Housing Property Disposition Act (the "Disposition Act"), 12 U.S.C. § 1701z-11 (Compl. Count 10); second, it imposed affordability criteria that failed to "further fair housing" as required by the Fair Housing Act ("FHA"), 42 U.S.C. §§ 3601, 3608(e)(5) (Count 8); and third, it provided relocation services to ousted Uplands tenants that fell short of the requirements of the FHA (also Count 8) and the Uniform Relocation Act ("URA"), id. §§ 4601, 4625 (Counts 1 & 2). All these violations, the plaintiffs say, entitle them to relief under the Administrative Procedures Act ("APA"), 5 U.S.C. §§ 702.² HUD seeks summary judgment on all these claims except insofar as the plaintiffs allege that the relocation of tenants into "racially impacted areas" violated HUD's obligations. (See Def.'s Mot. for Summ. J., Proposed Order at 2.) The plaintiffs oppose HUD's motion and seek summary judgment for themselves on the Disposition Act claim. All the motions have been fully briefed and oral argument was heard September 17, 2004. For the reasons that follow, the court will grant in part and deny in part both parties' motions.

BACKGROUND

Because this case is before the court in a summary judgment posture, the court must "view the evidence in the light most favorable to ... the nonmovant, and draw all reasonable inferences in her favor without weighing the evidence or assessing the witness' credibility." Dennis v. Columbia Colleton Med. Ctr., Inc., 290 F.3d 639, 644-45 (4th Cir.2002); see also Fed.R.Civ.P. 56. There is also, however, an "affirmative obligation of the trial judge to prevent factually unsupported claims and defenses from proceeding to trial." Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 526 (4th Cir.2003) (internal quotation marks omitted) (quoting Drewitt v. Pratt, 999 F.2d 774, 778-79 (4th Cir.1993), and citing Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). "A party opposing a properly supported motion for summary judgment `may not rest upon the mere allegations or denials of [his] pleadings,' but rather must `set forth specific facts showing that there is a genuine issue for trial.'" Id. at 525 (alteration in original) (quoting Fed.R.Civ.P. 56(e)).

Applying this standard to the record in this case, the facts appear as follows. HUD acquired control of the Uplands on January 1, 2001 when it became the MIP for the property. The property was in serious disrepair at the time; indeed, it was the previous owner's "failure to maintain the property in a decent, safe and sanitary condition" that caused HUD to declare a default and assume control of the property. (Iber Aff. ¶ 3, Def.'s Reply Ex. 41.) Faced with operations and maintenance costs exceeding $343,000 per month (see id. ¶¶ 3, 12), HUD hired a contractor to conduct a "Comprehensive Repair Survey," which determined that rehabilitating the property to HUD's standards would cost approximately $30 million (id. ¶¶ 3-4). Accordingly, HUD began to explore the option of relocating the Uplands tenants and disposing of the property. Because the Disposition Act gives state and local governments a 90-day right of first refusal in any sale of a multifamily housing project acquired by HUD, see 12 U.S.C. § 1701z-11(i), HUD gave notice to state and city officials on September 13, 2001 that it intended to foreclose on the Uplands property. (Def.'s Mem. in Supp. of Mot. for Partial Summ. J. Ex. 21.)

Though HUD maintains that it worked to "establish lines of communication with tenants" even before it became the MIP, the earliest notices of a possible tenant relocation in the record are dated November 7-8, 2001. (Def.'s Mem. in Supp. of Mot. for Partial Summ. J. Ex. 1-2.) These notices advised tenants that HUD was planning a foreclosure "within the next few months." The notices also assured tenants that the property would be "maintained as affordable housing for 20 years," that eligible tenants would receive Section 8 housing vouchers, and that HUD would provide relocation services in the event repairs by the new owner required tenants to move. The notices provided a contact number for tenants wishing to ask questions or "provide input." On November 29, 2001, the City of Baltimore informed HUD that it was interested in acquiring the Uplands. (Pl.'s Opp'n Ex. 4.)

On February 11, 2002, HUD notified the Uplands tenants that it had "decided to relocate the residents of the complex in the near future." (Def.'s Mem. in Supp. of Mot. for Partial Summ. J. Ex. 3.) "This is being done," the notice explained, "to safeguard the health, safety and security of the residents." The notice again explained that HUD would provide housing vouchers to eligible tenants and "relocation benefits to aid in [the tenants'] search for suitable housing and for the moving process." On February 28, 2002, representatives of HUD and the HUD contractor managing the Uplands held meetings with tenants to provide information about the relocation. (Def.'s Mem. in Supp. of Mot. for Partial Summ. J. Ex. 4.) The contractor then followed up on March 1, 2002 with a newsletter providing more detailed information, including answers to "frequently asked questions." (Def.'s Mem. in Supp. of Mot. for Partial Summ. J. Ex. 5.) Another meeting was held on May 20, 2002 (see Def.'s Mem. in Supp. of Mot. for Partial Summ. J. Ex. 9), and on June 25, 2002, representatives from apartment complexes with vacancies attended a housing fair at the Uplands relocation office (see Def.'s Mem. in Supp. of Mot. for Partial Summ. J. Ex. 7). Though HUD had initially set a deadline of September 1, 2002 for tenants to vacate the property, HUD extended the deadline and held yet another meeting for remaining tenants on September 23, 2002. (See Def.'s Mem. in Supp. of Mot. for Partial Summ. J. Ex. 8.) In "urgent notice[s]" dated October 18, 2002, November 18, 2002, and January 23, 2003, HUD advised tenants that foreclosure was expected in January 2003 or the "Winter-Spring of 2003" and that relocation services would not be available following the foreclosure. (Def.'s Mem. in Supp. of Mot. for Partial Summ. J. Ex. 9, 10, 13.)

On June 2, 2003, HUD finally conducted the foreclosure sale and, having unsuccessfully sought other buyers, acquired ownership of the property. The plaintiffs had sought a preliminary injunction to prevent the sale, but on May 30, 2003 I denied the motion. (Tr. of Hr'g on 5/30/2003, docket no. 57.) On June 26, 2003, HUD issued an "Initial Disposition Plan" indicating that HUD planned to sell the Uplands to the City for $10 and provide grant assistance to facilitate the redevelopment of the property. (Def.'s Mem. in Supp. of Mot. for Partial Summ. J. Ex. 17.) The Plan stipulated that for 25 years the City would be required to maintain at least 74% of the redeveloped units as "affordable" housing, which the Plan defined as housing for families earning no more than 80% of the area median income. The remaining 26% could be sold or rented at market rates, and up to 31% of the affordable units could be targeted at families earning up to 115% of the area median income. Former Uplands tenants were to be given first option on the new units, and the new development was to be barred from discriminating against holders of Section 8 vouchers. "Due to the poor and deteriorated condition of the properties," the Plan observed, "HUD began relocation of all residents in February 2002." Responsibility for relocating the "small number of families" still on the property would shift to the City when the property was sold.

It appears HUD distributed the Plan to all remaining Uplands tenants with a cover letter indicating that comments could be sent to HUD for thirty days after June 26, 2003. (See id.) HUD did not, however, instruct tenants that the full disposition recommendation, analysis, and supporting documentation was available for inspection and copying, as the plaintiffs argue HUD was required to do under 24 C.F.R. § 290.11(d). (Pl.'s Opp'n at 8.) The address for sending comments was also incomplete in the body of the letter, though the full address was printed on the letterhead. In addition to comments from individual tenants, HUD received a nine-page letter...