Dewakuku v. Martinez

Decision Date15 November 2001
Docket NumberNo. 00-1587,00-1587
Citation271 F.3d 1031
Parties(Fed. Cir. 2001) SERENA DEWAKUKU, Plaintiff-Appellee, v. MEL R. MARTINEZ, Secretary of Housing and Urban Development, Defendant-Appellant
CourtU.S. Court of Appeals — Federal Circuit

Samuel D. Gollis, Williams, Janov & Conney, P.C., of Albuquerque, New Mexico, argued for plaintiff-appellee.

Charles W. Scarborough, Attorney, Appellate Staff, Civil Division, Department of Justice, of Washington, DC, argued for defendant-appellant. With him on the brief was Mark B. Stern, Attorney.

Before MAYER, Chief Judge, RADER, and LINN, Circuit Judges.

LINN, Circuit Judge.

The Secretary of Housing and Urban Development ("HUD" or the "Secretary") appeals the decision of the United States District Court for the District of Arizona granting Serena Dewakuku's ("Dewakuku") summary judgment motion that HUD (1) violated the Indian Housing Act of 1988 ("IHA") (codified at 42 U.S.C. 1437aa-1437ff (1994), repealed by Native American Housing Assistance and Self-Determination Act of 1996, Pub. L. No. 104-330, 501(a), 110 Stat. 4016, 4041 (1996)), and its implementing regulations and (2) breached its obligations under the Annual Contributions Contract ("ACC") to Dewakuku as an intended third party beneficiary of that contract. Dewakuku v. Cuomo, 107 F. Supp. 1117, 2000 U.S. Dist. LEXIS 15618, (D. Ariz. July 11, 2000). The first issue turns on whether Dewakuku has an implied private right of action against the Secretary under the IHA. The second issue turns on whether Dewakuku is an intended beneficiary of the ACC. While we agree that Congress waived the Secretary's sovereign immunity under 42 U.S.C. 1404a (1994), we nevertheless conclude that the IHA does not create an implied right of action against the Secretary. We also conclude that Dewakuku is not a third party beneficiary of the ACC. Therefore, we reverse the district court on both issues and remand.


A brief description of the regulatory setting of this case provides the backdrop for the discussion that follows. In 1962, the Public Housing Administration, the precursor to HUD, determined that the United States Housing Act of 1937, codified at 42 U.S.C. 1437-1437x (1994) (the "Housing Act"), which was developed to help Americans find decent, safe, and sanitary living conditions, authorized low-rent housing programs on Indian lands. This determination led to the development of the Mutual Help Homeownership Program ("MHH Program")--designed to meet the homeownership needs of low-income Indian families on Indian reservations and other Indian areas.

Prior to 1988, the MHH Program was operated through administrative directives and regulations rather than through any specific statutory provisions. The operations changed with the passing of the IHA, which provided statutory authority for the MHH Program to be carried out by HUD. Pursuant to its statutory authority, HUD issued implementing regulations for the MHH Program. 24 C.F.R. 905 (1991).

Under the MHH Program, eligible Indian family homebuyers desiring to take advantage of the program enter into a contract (called a "Mutual Help and Occupancy Agreement," 42 U.S.C. 1437bb(e)), with the relevant Indian housing authority establishing the rights and duties of individual homebuyers. The homebuyer makes an initial contribution of at least $ 1500 in land, cash, labor, or materials. 42 U.S.C. 1437bb(e)(1) (1994). The family then enters into what is, in essence, a lease-purchase agreement, for a period of up to twenty-five years. During this time, the homebuyer makes monthly payments based on income and pays for all utility costs and maintenance. Id. 1437bb(e)(2)(A)(i), 1437bb(e)(3).

To overcome impediments encountered in previous years, Congress also required that HUD's property standards permit the use of traditional Indian designs "so long as the products produced are cost-effective and structurally sound." H.R. Rep. No. 100-604 (1988), reprinted in 1988 U.S.C.C.A.N. 791, 794 ("House Report"). In addition, Congress insisted that the construction designs include "energy conservation and performance standards" so that homeowners did not incur "exorbitant utility costs as already has occurred causing many families to fall behind in their payments." Id. Finally, because the IHA is a subchapter of the Housing Act, the IHA requires that all low-income housing built under the MHH Program be "decent, safe, and sanitary." 42 U.S.C. 1437a(b)(1), 1437aa(a) (1994).

To get housing built on tribal lands under the MHH Program, HUD's regulations "permit" a tribal government to create an Indian Housing Authority. 24 C.F.R. 905.108(a), 905.109 (1990). HUD would then make grants to, and enter into ACCs with Indian public housing authorities "to provide financial assistance for the development, acquisition, operation and improvement of [public] housing projects." 42 U.S.C. 1437bb(b) (1994). HUD would not enter into an ACC unless the tribal ordinance creating the housing authority is submitted to and approved by HUD. 24 C.F.R. 905.109 (1990). The Indian public housing authorities in turn were to develop, own, and operate the housing projects under HUD's supervision and in accordance with HUD regulations.

Dewakuku, a member of the Hopi Indian Tribe, purchased a home built by the Hopi Tribal Housing Authority ("HTHA") between September 1990 and August 1991 under a contract with HUD. Dewakuku and her family moved into the home in September 1991. It is undisputed that there are serious defects in Dewakuku's home, resulting from structural and design problems, shoddy workmanship, and the use of poor quality building materials. Dewakuku reported these defects to the HTHA, who did not make any of the requested repairs. Dewakuku then filed suit against HUD. Dewakuku alleged in her suit that HUD (1) violated the IHA and its implementing regulations; (2) breached its obligations to Dewakuku under the ACC as its intended beneficiary; and (3) violated the Administrative Procedure Act ("APA") by failing to enforce the standards and perform its duties.

The district court granted summary judgment for Dewakuku concluding that section 1404a of the Housing Act extended to the Secretary's functions under the MHH Program and that to the extent that a private cause of action existed with respect to those functions, section 1404a waived the Secretary's immunity from suit. The district court then concluded that Dewakuku was entitled to bring a private right of action against HUD under the IHA and that she was entitled to sue HUD for breach of contract under the Little Tucker Act, 28 U.S.C. 1346 (1994), as a third party beneficiary of the ACC. The district court declined to address Dewakuku's APA claim because it determined that such request for relief was duplicative of her other claims. The district court awarded Dewakuku the declaratory and injunctive relief she sought regarding HUD's statutory and regulatory responsibilities as to the development, design, and construction of her home, but denied her claim for money damages against HUD for breach of the ACC.

The Secretary appeals to this court. We have jurisdiction over the Secretary's appeal from the district court's final decision pursuant to 28 U.S.C. 1295(a)(2) (1994).

A. Standard of Review

This court has exclusive appellate review of federal district court cases where jurisdiction is "based in whole or in part" on 28 U.S.C. 1346 (1994), which gives the district courts concurrent jurisdiction with the Court of Federal Claims over Tucker Act claims not exceeding $ 10,000. Ysasi v. Rivkind, 856 F.2d 1520, 1525 (Fed. Cir. 1988). We review the district court's determination on the Little Tucker Act claim, that Dewakuku was an intended third party beneficiary of the ACC, under the law of this circuit. This court "employs complete and independent review over an appeal of the propriety of summary judgment [on a third party contract claim], construing the facts in a light most favorable to the non-movant." Montana v. United States, 124 F.3d 1269, 1273 (Fed. Cir. 1997). Contract interpretation is a question of law, which we review de novo. Cienega Gardens v. United States, 194 F.3d 1231, 1239 (Fed. Cir. 1998).

B. Analysis
I. Sovereign Immunity

Before this court considers the substantive claims of error asserted by the Secretary, we address the Secretary's contention that HUD cannot be sued under the IHA because the MHH Program was repealed in 1996. According to the Secretary, because the MHH Program was repealed, there are no appropriated funds to pay out on any claims having to do with this program. Thus, argues the government, Dewakuku has no avenue for recovery in this case.

It is well-established that the United States may not be sued without its express consent and that the existence of such consent is a prerequisite for jurisdiction of federal courts. United States v. Mitchell, 463 U.S. 206, 212, 77 L. Ed. 2d 580, 103 S. Ct. 2961 (1983). The district court found in 42 U.S.C. 1404a an unequivocal waiver of the Secretary's sovereign immunity regarding Dewakuku's claim. The district court also found that section 1404a limits the government's liability to funds appropriated to HUD and does not reach the general funds of the Treasury.

Section 1404a provides that "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 . . . ." As the district court recognized, this section demonstrates that Congress intended to waive the Secretary's sovereign immunity for those portions of the Housing Act for which a private cause of action may exist. Moreover, because the IHA amended Title II of the Housing Act, 24 C.F.R. 905.101(a) (1991), HUD's administration of the MHH Program is a function under the Housing Act within the section 1404a waiver. The next...

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