Dewakuku v. Martinez

Citation226 F.Supp.2d 1199
Decision Date17 September 2002
Docket NumberNo. CIV.A. 98-00415-PCT.,CIV.A. 98-00415-PCT.
CourtU.S. District Court — District of Arizona
PartiesSerena DEWAKUKU, Plaintiff, v. Mel R. MARTINEZ, Secretary of Housing and Urban Development,<SMALL><SUP>1</SUP></SMALL> Defendant.

Veronika Fabian, Flagstaff, AZ, Samuel D. Gollis, Albuquerque, NM, for Plaintiff.

Mark B Stern, Charles W. Scarborough, U.S. Dept. of Justice, Washington, DC, James C. Hair, Jr., U.S. Atty's Office, Phoenix, AZ, for Defendant.


YOUNG, District Judge.2


The Plaintiff, Serena Dewakuku ("Dewakuku"), a member of the Hopi Indian tribe, sued the Secretary of Housing and Urban Development, ("HUD" or "the Secretary") for various damages associated with a grossly defective house sold to her by HUD. Specifically, Dewakuku claims HUD: (1) violated the Indian Housing Act of 1988 (codified at 42 U.S.C. §§ 1437aa-1437ff (1994), repealed by Native American Housing Assistance and Self Determination Act of 1996, Pub.L. No. 104-330 (1996)), and its implementing regulations through the construction of her substandard housing; (2) breached its obligations under the Annual Contributions Contract, which it owed Dewakuku as an intended third party beneficiary of that contract; and (3) violated the Administrative Procedure Act, ("APA"), 5 U.S.C. §§ 701-706 (1996), in failing to supervise the home's construction and enforce the standards under the Indian Housing Act. Both parties moved for summary judgment on all three claims.

This Court held that, pursuant to the United States Housing Act of 1937, 42 U.S.C. § 1404a (1994), Congress had waived the Secretary's sovereign immunity from suit, and Dewakuku therefore had an implied right of action under the Indian Housing Act; further, this Court ruled that Dewakuku was an intended beneficiary of the Annual Contributions Contract and was thereby entitled to sue HUD for breach of contract under the Little Tucker Act, 28 U.S.C. § 1346 (1994), as a third party beneficiary. Accordingly, this Court granted Dewakuku's cross-motion for summary judgment with respect to the first two counts and awarded her declaratory and injunctive relief. The Court declined to address Dewakuku's APA claim because it deemed her requested relief in this count duplicative of the first two. Dewakuku v. Cuomo, 107 F.Supp.2d 1117 (D.Ariz.2000) ("Dewakuku I").

The Court of Appeals for the Federal Circuit reversed. While that court agreed that the Secretary's immunity from suit was waived by the United States Housing Act of 1937, 42 U.S.C. § 1404a, it held that Dewakuku had no private right of action under the Indian Housing Act and was not a third party beneficiary of the Annual Contributions Contract. Noticing that this Court had not considered Dewakuku's claim under the APA, the Federal Circuit remanded the case so this Court could address Dewakuku's third claim. Dewakuku v. Martinez, 271 F.3d 1031 (Fed.Cir. 2001) ("Dewakuku II").

As noted in Dewakuku I, the parties have agreed that this action could be finally decided on their cross-motions for summary judgment. Dewakuku I, 107 F.Supp.2d at 1119. Accordingly, this Court again considers Dewakuku's claim, although this time under the rubric of the APA.


For a more detailed exposition of the factual background in this action and the history of the statutes involved, see this Court's previous opinion, Dewakuku I, 107 F.Supp.2d at 1118-1125.

This case arises from the provisions of the United States Housing Act, codified at 42 U.S.C. § 1437 (1994), which was passed in order to assist needy Americans in finding decent, safe, and sanitary housing. The original United States Housing Act authorized low-rent housing on Indian reservations subsequently, the Mutual Help Homeownership Program ("Mutual Help Program") was developed to meet the housing needs of low-income Indian families on Indian lands. In 1988, the Indian Housing Act provided statutory authority for the Mutual Help Program to be carried out by HUD. Pursuant to its authority, HUD issued implementing regulations for the Mutual Help Program. 24 C.F.R. § 905 (1991). Dewakuku purchased the home at issue in this litigation through the Mutual Help Program authorized by the Indian Housing Act.

Under the Mutual Help Program, Indians who are eligible and interested in buying a family home enter into a contract, called a "Mutual Help and Occupancy Agreement," 42 U.S.C. § 1437bb(e), with the relevant Indian housing authority for that area, in this case the Hopi Tribal Housing Authority ("Hopi Housing Authority"). The tribal authority establishes the rights and duties of the individual home buyers. The home buyer makes an initial contribution of $1,500 in land, cash, labor, or materials; the home is built by the tribal authority through subcontractors, and the family then enters into a lease-purchase agreement with the tribal authority for up to twenty-five years, with the home buyers paying all bills for utilities and maintenance as well as making monthly payments based on their income. Id. §§ 1437bb(e)(2)(A)(i), 1437bb(e)(3).

Dewakuku moved into her home in 1991. She alleges that because the Secretary breached his regulatory and statutory responsibilities, she has been consigned to live in a home that is in such poor condition and so poorly constructed that it has a malfunctioning electrical system, cracking walls and floors, a leaky roof, popping nails, and is both unsafe and overly expensive to heat in the winter. The Secretary, for his part, does not contest Dewakuku's assertions. Both parties concede that the home is substandard, and was indeed "shoddy and inferior on the very day it was constructed." Dewakuku I, 107 F.Supp.2d at 1118. Given that this home was built through a program that was specifically designed to alleviate the problem of substandard housing on Indian reservations, the extremely poor construction of Dewakuku's home is a sad commentary on the efficacy of Congressional mandates. The legal question is, however, whether HUD must bear the cost of curing the egregious and inexcusable defects in this "home."

The Secretary admits Dewakuku's home is woefully substandard but insists that HUD is not responsible for these defects and that Dewakuku must instead pursue a claim against the Hopi Housing Authority. Dewakuku asks that the defects in her home be cured by HUD through either repair or reconstruction, a request that, on remand, arises only under the APA. Both parties have moved for summary judgment, and under Fed.R.Civ.P. 56(c) summary judgment can only be entered against a party who fails to show a genuine issue as to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).


This Court exercises subject matter jurisdiction over Dewakuku's claims for declaratory and injunctive relief pursuant to the APA, 5 U.S.C. §§ 702, which waives sovereign immunity with respect to such claims, and the United States Housing Act, 42 U.S.C. § 1437. Accord Katz v. Cisneros, 16 F.3d 1204, 1209 (Fed.Cir.1994) (ruling that the APA provides jurisdiction and waiver of sovereign immunity for Suit by developer against HUD under the Housing Act); Aujero v. CDA Todco, Inc., 756 F.2d 1374, 1375 (9th Cir.1985) (deciding case under the APA without ruling on the existence of an implied cause of action under the United States Housing Act).

The APA governs judicial review of agency actions and requires that a reviewing court hold unlawful and set aside agency action which, as matter of law, is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). If an agency makes a decision in an area that is "committed to agency discretion by law," no judicial review is allowed. 5 U.S.C. §§ 701(a)(2) and 702; Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971). If it is at issue in the case, the interpretation of a statute by the agency charged with its administration is granted substantial deference. Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965).


The Court must determine (a) if any agency "action" on the part of HUD took place; (b) if so, whether this action was committed to agency discretion or based on the agency's statutory interpretation; and (c) whether this action violated the APA as arbitrary, capricious, an abuse of discretion, or was otherwise not in accordance with law. 5 U.S.C. § 706(2)(A). Three factors are dispositive in answering these questions.

First, the Indian Housing Act gave HUD substantial oversight responsibilities over tribal authorities when building homes under the Mutual Help Program. Thus, HUD's failure properly to supervise the construction of Dewakuku's home by the Hopi Housing Authority can fairly be said to represent "agency action" within the meaning of 5 U.S.C. § 551(13) (definition of agency action includes "failure to act") and 5 U.S.C. § 702.

Second, as a subchapter to the United States Housing Act, the Indian Housing Act requires that all low income housing built under the Mutual Help program be "decent, safe, and sanitary." 42 U.S.C. §§ 1437a(b)(1). The terms "decent, safe, and sanitary" as applied to housing are clear on their face and not in need of any interpretation by the agency. Upon the undisputed record before this Court, Dewakuku's home did not meet this standard and HUD, remiss in its oversight duties, did not act in "accordance with law" in allowing such a home to be built under its direct supervision. Moreover, it arguably abused its discretion in approving the construction in the first place.

Third, the duty to build standard housing was absolute under the Indian Housing Act. It was only the method of doing so that was committed to agency discretion. All parties concede that this duty was not met in the case of Dewakuku's home. These factors are explored in more...

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    • United States
    • United States District Courts. 8th Circuit. United States District Courts. 8th Circuit. District of South Dakota
    • 31 Marzo 2008 legislation was that it provided statutory authority for the MHHO Program to be carried out by HUD. Dewakuku v. Martinez, 226 F.Supp.2d 1199, 1201 (D.Ariz.2002) (Dewakuku III). In response to its new statutory authority, HUD issued implementing regulations for the MHHO Program. 24 C.F.R......

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