Lummi Tribe of the Lummi Reservation v. United States
| Decision Date | 29 August 2013 |
| Docket Number | No. 08-848C,08-848C |
| Parties | LUMMI TRIBE OF THE LUMMI RESERVATION, LUMMI NATION HOUSING AUTHORITY, FORT BERTHOLD HOUSING AUTHORITY, AND HOPI TRIBAL HOUSING AUTHORITY, Plaintiffs, v. THE UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
24 C.F.R. § 1000.318, a regulation
directing the Department of Housing
and Urban Development to remove
housing units that are no longer
owned or operated by a tribe from the
Formula Current Assisted Stock
component of the tribe's funding
calculation, does not conflict with the
statutory mandate, found at
25 U.S.C. § 4152(b)(1), that the
allocation formula be based on
housing units a tribe owned or
operated as of September 30, 1997.
John Fredericks, III, Fredericks Peebles & Morgan LLP, Mandan, ND, counsel for plaintiffs.
Michael N. O'Connell, with whom were Assistant Attorney General Stuart F. Delery, Director Jeanne E. Davidson, and Assistant Director Donald E. Kinner, U.S. Department of Justice, Civil Division, Commercial Litigation Branch, Washington, DC, counsel for defendant.
This case arises under the Native American Housing Assistance and Self-Determination Act of 1996 ("NAHASDA" or "the statute"), as amended, 25 U.S.C. §§ 4101-4212 (2006). Plaintiffs sue here to recover grant funds initially paid to them under the statute but later recaptured by the Department of Housing and Urban Development ("HUD" or "the agency") when HUD determined that the allocation formula on which the grants had been based had been misapplied. Thisaction is currently before the court on the parties cross-motions for partial summary judgment.1 By direction of the court, the parties have fully briefed only those arguments addressing the issue of whether 25 U.S.C. § 4152(b)(1), as originally enacted, prohibited HUD from excluding the housing units referenced in the statute from the allocation formula, rendering 24 C.F.R. § 1000.318's removal of such units contrary to the statute and therefore invalid.2
The court heard oral argument on July 30, 2013. For the reasons set forth below, plaintiffs' motion for partial summary judgment as it relates to the alleged invalidity of 24 C.F.R. § 1000.318 is denied and defendant's cross-motion is granted.
Congress enacted NAHASDA in 1996 to consolidate then-existing public-housing assistance programs for Indian tribes and to replace them with a single block-grant program to address the tribes' affordable housing activities. See Pub. L. No. 104-330, § 107, 110 Stat. 4016 (1996); "Implementation of the Native American Housing Assistance and Self-Determination Act of1996; Final Rule," 63 Fed. Reg. 12,334, 12,334-35 (Mar. 12, 1998). Consistent with this goal, NAHASDA directed the Secretary of HUD to provide annual grants to Indian tribes or tribal housing authorities in support of their need for affordable housing.
Although NAHASDA itself did not establish a formula for allocating the annual appropriation among Indian tribes, the statute authorized HUD to do so using the negotiated rulemaking procedure set forth in 5 U.S.C. §§ 561-570. 25 U.S.C. § 4152(a).4 Congress additionally specified that such a formula must meet certain statutory requirements. In particular, 25 U.S.C. § 4152(b) directed that the allocation formula "shall be based on factors that reflect the need of the Indian tribesand the Indian areas of the tribes for assistance for affordable housing activities." The statute went on to enumerate the following three factors as reflecting such need:
25 U.S.C. § 4152(b).
Pursuant to this statutory directive, HUD engaged in a negotiated rulemaking process with 48 representatives from the various Indian tribes. 63 Fed. Reg. 12,334. The resulting regulations—set forth at 24 C.F.R. §§ 1000.304-1000.340 (1998)—included the allocation formula identified in 25 U.S.C. § 4152(a). The allocation formula contained two components: "(a) Formula Current Assisted Housing Stock (FCAS); and (b) Need." 24 C.F.R. § 1000.310. The regulations indicated that funding was to be allocated on the basis of the FCAS component first, with the remaining funds to be allocated according to need. 24 C.F.R. § 1000.324.5
The regulations went on to define FCAS as the number of housing units owned or operated by a tribe as of September 30, 1997, immediately prior to the effective date of NAHASDA. 24 C.F.R. § 1000.312. The regulations additionally provided, however, that that number would be adjusted downward to account for housing units that had reached the end of their rent-to-own terms and had been conveyed to the homeowner. Specifically, 24 C.F.R. § 1000.318 directed HUD to remove from the FCAS count any housing unit that a tribe "no longer has the legal right to own, operate, or maintain . . . whether such right is lost by conveyance, demolition, or otherwise," provided that such unit was removed from a tribe's inventory "as soon as practicable after the unit becomes eligible for conveyance." 24 C.F.R. § 1000.318(a)(1).
Despite this regulatory directive, a 2001 audit by HUD's Office of Inspector General ("OIG") revealed that HUD had improperly administered the grant program by failing to exclude from the grant calculation housing units that were no longerowned or operated by a tribe. Following the OIG's audit and at the OIG's recommendation, HUD performed audits of the program participants and concluded that the agency's failure to apply 24 C.F.R. § 1000.318 had resulted in overpayments to various tribes.6 HUD notified the tribes and moved to recover the overpayments.
A tribal housing authority no longer involved with the present litigation brought suit in district court in Colorado, arguing, inter alia, that 24 C.F.R. § 1000.318 was invalid because it conflicted with the plain language of 25 U.S.C. § 4152(b)(1). Fort Peck Housing Auth. v. HUD, 435 F. Supp. 2d 1125, 1132 (D. Colo. 2006) ("Fort Peck I").7 In particular, Fort Peck maintained that the statute required that the allocation formula include housing units owned or operated by the tribe on September 30, 1997, and consequently precluded HUD from excluding such units from the formula.
The district court agreed. Finding that "the text of the statute makes its meaning . . . clear," the court explained as follows:
Congress expressly directed that the first factor in determining a tribe's need for housing assistance is the number of dwelling units for which a tribe was receiving federal assistance when NAHASDA went into effect. The use of the phrase "the number" is definitive. The statute leaves no room for the formula to include some, but not all of the number of dwelling units that a tribe owned or operated pursuant to an [Annual Contributions Contract].
Id. The court accordingly invalidated 24 C.F.R. § 1000.318 based on a literal reading of Section 4152(b)(1).
On appeal, however, the Tenth Circuit overturned the trial court's decision.Fort Peck Housing Auth. v. HUD, 367 F. App'x 884, 890 (10th Cir. 2010) ("Fort Peck II"). In an unpublished decision, the appellate court held that the district court's interpretation of Section 4152(b)(1) as prohibiting the reduction of housing units below the September 30, 1997, level "is inconsistent with the statute's plain language and is contrary to Congress's unambiguous intent that the funding formula relate to the needs of all tribal Housing Entities." Id. at 891.
In reaching this conclusion, the Tenth Circuit focused on the phrase "based on" in Section 4152(b), finding that the language should be interpreted as requiring that the factors enumerated in Sections 4152(b)(1)-(3) "form the basis, beginning, or starting point, of the formula." Id. at 890. The Tenth Circuit reasoned that as long as HUD considered all of the housing units identified in Section 4152(b)(1) as a starting point, HUD could then go on to exclude units from the formula under the catch-all Section 4152(b)(3) (), in order to meet the statute's overarching mandate that the formula "reflect the need of the Indian tribes and the Indian areas of the tribes for assistance for affordable housing activities." Id. at 891. The court thus reversed the district court's decision and held that 24 C.F.R. § 1000.318 was valid.
Following the district court's decision in Fort Peck I, but prior to the Tenth Circuit's decision in Fort Peck II, Congress amended NAHASDA through the enactment of the Native American Housing Assistance and Self-Determination Reauthorization Act of 2008 ("Reauthorization Act" or "2008 amendments"), Pub. L. No. 110-411, § 301, 122 Stat. 4319 (2008). Particularly relevant to the pending motions, the Reauthorization Act rewrote Section 4152(b)(1) in its entirety, replacing the phrase "owned or operated at the time" (referring to the number of housing units on which the allocation formula was to be based) with "owned or operated by a recipient on the October 1 of the calendar year immediately preceding the year for which funds are provided." The amendments went on to specify that a housing unit "shall not be considered to be a low-income housing dwelling unit for purposes of this section if—(i) the recipient ceases to possess the legal right to own, operate, or maintain the unit; or (ii) the unit is lost to the recipient by conveyance, demolition, or other means," unless the unit was not conveyed to the homebuyer for reasons beyond the control of the grant recipient. 25 U.S.C. § 4152(b)(1)(A), (B). Finally, the Reauthorization Act indicated...
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