Gautreaux v. Pierce, 66 C 1459

• Decision Date: 11 May 1982
• Docket Number: 66 C 1460.,No. 66 C 1459,66 C 1459
• Citation: 538 F. Supp. 1009
• Parties: Dorothy GAUTREAUX, et al., Plaintiffs, v. Samuel R. PIERCE, Secretary of Department of Housing and Urban Development, et al., Defendants.
• Court: U.S. District Court — Northern District of Illinois

538 F. Supp. 1009

Dorothy GAUTREAUX, et al., Plaintiffs, v. Samuel R. PIERCE, Secretary of Department of Housing and Urban Development, et al., Defendants.

Nos. 66 C 1459, 66 C 1460.

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

May 11, 1982.

Alexander Polikoff, Howard A. Learner, Chicago, Ill., for plaintiffs.

United States Attorney's Office, Chicago, Ill., Robert M. Grossman, Roan & Grossman, Patrick W. O'Brien, Mayer, Brown & Platt, Richard J. Flando, Acting Regional Counsel, Dept. of Housing and Urban Development, Stanley J. Garber, Corp. Counsel, Calvin H. Hall, Gen. Counsel, Chicago Housing Authority, Earl L. Neal, Sp. Asst. Corp. Counsel, Chicago, Ill., Gershon M. Ratner, Associate Gen. Counsel, Carolyn B. Lieberman, Asst. Gen. Counsel, John W. Herold, Edward G. Weil, Jane McGrew, Gen. Counsel, Dept. of Housing and Urban Development, Washington, D. C., Gerald D. Skoning, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, Ill., for defendants.

MEMORANDUM OPINION AND ORDER

ASPEN, District Judge:

On January 25, 1982, this Court denied plaintiffs' motion to modify the consent decree previously entered in this case so as to require that the Department of Housing and Urban Development ("HUD") set aside approximately $324 million of the Government National Mortgage Association's ("GNMA") fiscal 1982 Tandem financing appropriation for section 8 new construction projects in the Chicago area ("Gautreaux projects"). Such extraordinary relief was sought in view of the Reagan Administration's announced intention to ask Congress to abolish the Tandem program in fiscal 1983. At that time, the Court found that there had not been a significant change in circumstances with respect to the viability of the GNMA Tandem program since the entry of the decree in June of 1981 so as to satisfy the threshold requirement for the relief plaintiffs sought and, moreover, that the balance of the equities did not require modification in order to fulfill the purpose of the decree. Gautreaux v. Pierce, 535 F.Supp. 423 (N.D.Ill.1982).¹ The Court did leave open the question whether actual termination of the GNMA Tandem program by Congress, which was only a possibility at the time the decree was entered and when we initially considered the question in January of 1982, would constitute a sufficient change in circumstances to justify a new inquiry into possible modification of the decree and a re-evaluation of the equities involved. Id., mem. op. at 428, n.14.

This matter is now before the Court on plaintiff's renewed motion to modify the consent decree in light of HUD's recent administrative decision² to not extend Federal Housing Administration ("FHA") commitments or section 8 reservations for any proposed housing projects that did not receive GNMA Tandem financing in the lottery held on March 9, 1982, and that did not receive alternative financing 60 days thereafter. HUD's refusal to extend the FHA commitments and section 8 reservations for projects that could be completed but for the lack of financing would effectively obviate the need for future GNMA Tandem funding from Congress by eliminating the potential beneficiaries of the program. Plaintiffs therefore contend that HUD's administrative action places this case in the posture contemplated by footnote 14 of our earlier opinion and order. During oral argument on plaintiffs' renewed motion on March 8, 1982, plaintiffs' counsel advanced an alternative motion that the enforcement of the HUD directive be enjoined and that FHA commitments and section 8 reservations for the Gautreaux projects be extended until such time as Congress decides whether to make GNMA Tandem available in fiscal 1983. By minute order dated March 8, 1982, the Court denied plaintiffs' initial motion for modification of the decree but granted their alternative motion to prevent the enforcement of the HUD directive. We now set forth the rationale for our earlier ruling.

HUD concedes that its administrative directive issued in February, 1982, constitutes a change in circumstances compared to the situation in June, 1981, or January, 1982, but it argues that modification of the decree in light of that change is not required, particularly if plaintiffs' alternative motion to enjoin enforcement of the directive vis-a-vis the Gautreaux projects is allowed. By its administrative directive, HUD has attempted to clear its "pipeline"³ of projects eligible for GNMA Tandem, but which as yet have not received financing, in anticipation of positive Congressional action on the Administration's proposal to eliminate Tandem from the fiscal 1983 budget. HUD contends that this will enable it to recapture moneys already allocated to these projects by prior reservations and commitments so that such funds might be re-allocated to other section 8 projects in need of assistance. The future of the Tandem program itself is still uncertain, however. Apparently, certain bills have been introduced in the House of Representatives that would provide the same $1.9 billion level of funding for the Tandem program in fiscal 1983 as in fiscal 1982, and there is some measure of support for such a continued appropriation. The Administration, however, continues to advocate total elimination of the Tandem program from next year's budget.

Regardless of whether HUD's decision to clear the pipeline without waiting for Congressional action constitutes a change of circumstances sufficient to meet the threshold requirement for modification of the consent decree, see, e.g., United States v. City of Chicago and Fraternal Order of Police, note 1, supra, the balance of the equities does not favor the Court's intervention at this time nor is such intervention necessary to achieve the purposes of the decree so soon in the implementation process. As we discussed at some length in our earlier opinion in this matter, the parties negotiated the consent decree that plaintiffs now seek to modify during...