Mary's House, Inc. v. State, No. 1:12cv169.

• Court: United States District Courts. 4th Circuit. Middle District of North Carolina
• Writing for the Court: THOMAS D. SCHROEDER
• Citation: 976 F.Supp.2d 691
• Parties: MARY'S HOUSE, INC., Jane Doe 1 through 8, Plaintiffs, v. State of NORTH CAROLINA; North Carolina Department of Health and Human Resources; North Carolina Division of Aging and Adult Services; North Carolina Office of Economic Opportunity; Beverly Perdue, Governor of the State of North Carolina (in her official capacity); Albert Delia, Acting Secretary, North Carolina Department of Health and Human Services (in his official capacity); Dennis Streets, Director, North Carolina Division of Aging and Adult Services (in his official capacity); Martha Are, Homeless Policy Specialist, North Carolina Division of Aging and Adult Services (in her official capacity); Verna Best, Director, Office of Economic Opportunity (in her official capacity); and Michael Leach, Homeless Programs Coordinator, Adult Services Section, North Carolina Division of Aging and Adult Services (in his official capacity), Defendants.
• Docket Number: No. 1:12cv169.
• Decision Date: 30 September 2013

976 F.Supp.2d 691

MARY'S HOUSE, INC., Jane Doe 1 through 8, Plaintiffs,
v.
State of NORTH CAROLINA; North Carolina Department of Health and Human Resources; North Carolina Division of Aging and Adult Services; North Carolina Office of Economic Opportunity; Beverly Perdue, Governor of the State of North Carolina (in her official capacity); Albert Delia, Acting Secretary, North Carolina Department of Health and Human Services (in his official capacity); Dennis Streets, Director, North Carolina Division of Aging and Adult Services (in his official capacity); Martha Are, Homeless Policy Specialist, North Carolina Division of Aging and Adult Services (in her official capacity); Verna Best, Director, Office of Economic Opportunity (in her official capacity); and Michael Leach, Homeless Programs Coordinator, Adult Services Section, North Carolina Division of Aging and Adult Services (in his official capacity), Defendants.

No. 1:12cv169.

United States District Court,
M.D. North Carolina.

Sept. 30, 2013.

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Edward R. Sharp, Miriam Delaney Heard, Janet McAuley Blue, Legal Aid of North Carolina, Inc., Nicole A. Crawford, Brooks Pierce McLendon Humphrey & Leonard, Greensboro, NC, for Plaintiffs.

June S. Ferrell, Brenda Eaddy, Lisa Granberry Corbett, N.C. Department of Justice, Raleigh, NC, for Defendants.

MEMORANDUM OPINION AND ORDER
THOMAS D. SCHROEDER, District Judge.

Plaintiffs Mary's House, Inc. (“Mary's House”), a non-profit organization providing housing and treatment to homeless women recovering from substance abuse, and eight Jane Does who are former or current residents of Mary's House challenge the State of North Carolina's decision to eliminate funding to them. Plaintiffs seek declaratory and injunctive relief, as well as damages, pursuant to 42 U.S.C. § 1983 and the doctrine of Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), and allege violations of the Americans with Disabilities Act, 42 U.S.C. §§ 12101 et seq. (“ADA”), the Fair Housing Act, 42 U.S.C. §§ 3601 et seq. (“FHA”), section 504 of the Rehabilitation Act, 29 U.S. § 794 (“RA”), and the U.S. Constitution, including the Supremacy Clause and the Equal Protection and Due Process Clauses of the Fourteenth Amendment. Defendants are the State of North Carolina, the North Carolina Department of Health and Human Services (“DHHS”), the North Carolina Division of Aging and Adult Services of DHHS (“DAAS”), and the North Carolina Office of Economic Opportunity (“OEO”), as well as several state officials in their official capacities: Beverly Perdue, Governor; Albert Delia, Acting Secretary of DHHS; Dennis Streets, Director of DAAS; Martha Are, Homeless Policy Specialist at DAAS; Verna Best,

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Director of OEO; and Michael Leach, Homeless Programs Coordinator at DAAS.

Before the court is Defendants' motion to dismiss the complaint based on lack of subject matter jurisdiction and failure to state a claim, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), respectively. (Doc. 21.) For the reasons set forth below, the motion will be granted in part and denied in part.

I. BACKGROUND

Mary's House is a homeless shelter and licensed substance abuse rehabilitation center (“SARC”) serving women and their children in Greensboro, North Carolina. It has applied for and received funding through the Emergency Shelter Grant (“ESG”) program every year since 2005. Under the ESG program, states apply to the federal Department of Housing and Urban Development (“HUD”) for funding by submitting a consolidated plan. HUD distributes the ESG funds to states, who then distribute the ESG funds to grantees such as Mary's House. Defendants are responsible for distributing the ESG funds in North Carolina, which is done through a non-competitive process in which any qualified homeless shelter may participate.

In December 2009, Mary's House was notified by letter that Defendants had decided to change the definition of “shelter” for the ESG program, specifically to exclude licensed SARCs. Exactly when Defendants began implementing the new definition is disputed, but it is undisputed that Defendants had to go through an amendment process to the State consolidated plan, which included public notice and comment. In 2010, Mary's House's application for ESG funding was denied because it was no longer a qualified shelter under the State's revised definition. In 2011, Mary's House's application was again denied. According to Plaintiffs, Mary's House had to cut back on services offered to its residents, reduce staff, change thermostats to lower utility bills, and delay or forego maintenance of its facilities as a result of the denial of ESG funding.

Plaintiffs allege that Defendants' redefinition of “shelter” impermissibly discriminates on the basis of disability or handicap. Defendants assert several defenses in return, including sovereign immunity and the statute of limitations, and contend both that Plaintiffs have failed to allege sufficient facts to state a claim for relief and that Defendants' action did not discriminate impermissibly.

II. ANALYSISA. 12(b)(1) Motion to Dismiss

The plaintiff bears the burden of proving this court's subject matter jurisdiction. Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir.1991). When assessing a challenge to subject matter jurisdiction, the court may look beyond the face of the complaint and consider other evidence outside the pleadings without converting the motion into one for summary judgment. Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir.1982). A court should dismiss for lack of federal subject matter jurisdiction “only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law.” Richmond, 945 F.2d at 768 (citation omitted). Defendants move to dismiss on three grounds: Eleventh Amendment sovereign immunity, the statute of limitations, and lack of standing. Each will be addressed in turn.

1. Eleventh Amendment

Defendants assert they enjoy sovereign immunity under the Eleventh Amendment. (Doc. 22 at 3–4, Doc. 28 at 2–3.) The Fourth Circuit has not conclusively established

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whether a dismissal based on Eleventh Amendment immunity is a dismissal for lack of subject matter jurisdiction under Rule 12(b)(1) or for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. See Andrews v. Daw, 201 F.3d 521, 524–25 n. 2 (4th Cir.2000). However, Defendants characterize their Eleventh Amendment argument as jurisdictional, so the court will treat it as such. See Johnson v. N.C. Dep't of Health and Human Servs., 454 F.Supp.2d 467, 471 (M.D.N.C.2006).

The Eleventh Amendment bars suits against states and any state instrumentality properly characterized as an “arm of the state.” Regents of the Univ. of Cal. v. Doe, 519 U.S. 425, 429–30, 117 S.Ct. 900, 137 L.Ed.2d 55 (1997). Eleventh Amendment immunity is not absolute, however. To ensure the enforcement of federal law, “the Eleventh Amendment permits suits for prospective injunctive relief against state officials acting in violation of federal law.” Frew ex rel. Frew v. Hawkins, 540 U.S. 431, 437, 124 S.Ct. 899, 157 L.Ed.2d 855 (2004) (citing Ex parte Young, 209 U.S. at 123, 28 S.Ct. 441). Federal courts are thus allowed to order prospective relief, including ancillary measures, but cannot order retrospective relief, such as damages, unless the state waives its immunity or Congress abrogates the state's immunity in exercising its powers under the Fourteenth Amendment. Id.;Coll. Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 670, 119 S.Ct. 2219, 144 L.Ed.2d 605 (1999). A plaintiff may properly invoke the doctrine of Ex parte Young when a “straightforward inquiry” reveals that the plaintiff has alleged an “ongoing violation” of federal law. Verizon Md., Inc. v. Pub. Serv. Comm'n of Md., 535 U.S. 635, 645, 122 S.Ct. 1753, 152 L.Ed.2d 871 (2002) (citation omitted).

Plaintiffs do not clearly delineate in the complaint which of their claims they assert against which Defendants. To the extent the complaint seeks relief against the State of North Carolina, DHHS, DAAS, or OEO for violations of the FHA or U.S. Constitution pursuant to 42 U.S.C. § 1983, such claims are barred by Defendants' assertion of sovereign immunity. The FHA does not abrogate states' sovereign immunity under the Eleventh Amendment, see, e.g., Gregory v. S.C. Dep't. of Transp., 289 F.Supp.2d 721, 724–25 (D.S.C.2003), and Defendants have not waived their immunity. Similarly, “[i]t is now well settled that a state cannot be sued under [42 U.S.C.] § 1983.” Kelly v. Maryland, 267 Fed.Appx. 209, 210 (4th Cir.2008) (citing Will v. Mich. Dep't of State Police, 491 U.S. 58, 71, 109 S.Ct. 2304, 105 L.Ed.2d 45 (1989)).¹ Thus, any claims against those defendants for violations of the FHA or section 1983 are barred; Defendants' motion to dismiss those claims is granted.

However, Plaintiffs' claims against those Defendants for violations of the RA and ADA stand on a different footing. Congress has validly abrogated states' immunity for violations of the RA through 42 U.S.C. § 2000d–7: “A State shall not be immune under the Eleventh Amendment of the Constitution of the United States from suit in Federal court for a violation of section 504 of the [RA.]” The Fourth Circuit has held section 2000d–7 to be “an unambiguous and unequivocal condition requiring

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waiver of Eleventh Amendment immunity” that “does not violate any other constitutional command.” Constantine v. Rectors & Visitors of George Mason Univ., 411 F.3d 474, 492 (4th Cir.2005). Title II of the ADA may also validly abrogate states' sovereign immunity.²Constantine, 411 F.3d at 490. Insofar as Plaintiffs also allege a Fourteenth Amendment violation, the court will permit the ADA claim to proceed at this stage. United States v. Georgia, 546 U.S. 151, 159, 126 S.Ct. 877, ...