Nat'l Fair Hous. Alliance v. Carson, Civil Action No. (BAH) 18-1076

• Decision Date: 17 August 2018
• Docket Number: Civil Action No. (BAH) 18-1076
• Citation: 330 F.Supp.3d 14
• Parties: NATIONAL FAIR HOUSING ALLIANCE, et al., Plaintiffs, v. Benjamin C. CARSON, Sr., M.D., in his official capacity as Secretary of Housing and Urban Development, et al., Defendants.
• Court: U.S. District Court — District of Columbia

330 F.Supp.3d 14

NATIONAL FAIR HOUSING ALLIANCE, et al., Plaintiffs,

v.Benjamin C. CARSON, Sr., M.D., in his official capacity as Secretary of Housing and Urban Development, et al., Defendants.

Civil Action No. (BAH) 18-1076

United States District Court, District of Columbia.

Signed August 17, 2018

Ajmel A. Quereshi, NAACP Legal Defense and Educational Fund, Inc., Allison Marcy Zieve, Public Citizen Litigation Group, Arthur B. Spitzer, American Civil Liberties Union of the District of Columbia, Jon M. Greenbaum, Thomas Silverstein, Lawyers' Committee for Civil Rights, Michael Gerhart Allen, Sara K. Pratt, Sasha Samberg-Champion, Relman, Dane & Colfax PLLC, Morgan Whitney Williams, National Fair Housing Alliance, Washington, DC, for Plaintiffs.

Daniel J. Halainen, U.S. Department of Justice, Washington, DC, for Defendants.

MEMORANDUM OPINION

BERYL A. HOWELL, Chief Judge

The Fair Housing Act, 42 U.S.C. §§ 3601, et seq. , enacted in 1968, requires the U.S. Department of Housing and Urban Development ("HUD") to "administer the programs and activities relating to housing and urban development in a manner affirmatively to further the policies of" fair housing, id. § 3608(e)(5). HUD acknowledges that the agency has not always administered programs in a manner to ensure that this long-standing statutory requirement affirmatively to further fair housing ("AFFH") is met "as effective[ly] as had been envisioned." HUD Proposed Rule, Affirmatively Furthering Fair Housing ("Proposed AFFH Rule"), 78 Fed. Reg. 43,710, 43,710 (July 19, 2013). In 2015, HUD promulgated a rule, by notice-and-comment rulemaking, to "provide[ ] HUD program participants with an approach to more effectively and efficiently incorporate into their planning processes the duty to affirmatively further the purposes and policies of the Fair Housing Act," including the AFFH requirement. HUD Final Rule, Affirmatively Furthering Fair Housing ("AFFH Rule"), 80 Fed. Reg. 42,272, 42,272 (July 16, 2015). Among the "[m]ajor [p]rovisions" in this new Rule, id. at 42,273, is a "standardized Assessment of Fair Housing (AFH)" process, id. , to be rolled out along with an Assessment Tool customized for different types of program participants, id. at 42,277, 42,339, 42,347, such as States, local government agencies and Public Housing Authorities ("PHAs"). To date, HUD has fully issued an Assessment Tool only for use by local government agencies. See generally HUD Notice, Affirmatively Furthering Fair Housing Assessment Tool: Announcement of Final Approved Document ("LG2015 Tool Announcement"), 80 Fed. Reg. 81,840 (Dec. 31, 2015) ; HUD Notice, Affirmatively Furthering Fair Housing: Announcement of Renewal of Approval of the Assessment Tool for Local Governments ("LG2017 Tool Announcement"), 82 Fed. Reg. 4,388 (Jan. 13, 2017) (discussing issues with the LG2015 Tool and describing changes in the LG2017 Tool).

This case is about two of HUD's notices, issued in May 2018, one of which withdraws the only extant Assessment Tool that was intended to help local government agencies measure progress in meeting the AFFH requirement. See generally HUD Notice, Affirmatively Furthering Fair Housing: Withdrawal of the Assessment Tool for Local Governments ("LG2017 Withdrawal Notice"), 83 Fed. Reg. 23,922 (May 23, 2018). As a result, "currently no type of program participant has an Assessment Tool available for use." HUD Notice, Affirmatively Furthering Fair Housing (AFFH): Responsibility to Conduct Analysis of Impediments ("AI Reliance Notice"), 83 Fed. Reg. 23,927, 23,927 (May 23, 2018). The other HUD notice at issue directs program participants to revert to prior HUD guidance that they "will conduct an analysis of impediments (AI) to fair housing choice within the jurisdiction." Id.

HUD concedes that use of the LG2017 Tool and the AFH process laid out in the AFFH Rule is "superior" to the prior AI process in aiding program participants in meeting the AFFH requirement. Tr. Motions Hr'g (Aug. 9, 2018) ("Mot. Hr'g") at 68:25–69:4, ECF No. 44; see also id. at 63:7–13 (responding to Court's query whether HUD concedes "the AI process [ ] was so terribly flawed," HUD's counsel stated "We've developed a record of that, certainly .... You're right"). Nevertheless, in HUD's view, the LG2017 Assessment Tool was "unworkable," warranting its withdrawal. LG2017 Withdrawal Notice, 83 Fed. Reg. at 23,923 ; see also Defs.' Mem. Opp. Pls.' Mot. Preliminary Injunction & Expedited Summ. J. ("Defs.' Opp'n PI") at 12–13, ECF No. 33. The plaintiffs contend otherwise, viewing the withdrawal of the LG2017 Tool as impeding the progress made over the last few years to fulfill the statutory promise of furthering fair housing policies. See Am. Compl. ¶¶ 6, 11–12, ECF No. 18.

The plaintiffs, three non-profit organizations "with purposes that include promoting fair housing," id. ¶¶ 13, seek preliminary and permanent injunctive relief under the Administrative Procedure Act ("APA"), 5 U.S.C. § 706(2), against HUD and Secretary Benjamin Carson in his official capacity (collectively, "HUD" or "defendants"), Am. Compl. ¶¶ 14, 19–20, 154–73, contending that the two May 2018 notices—one of which withdraws the LG2017 Tool and the other of which directs local government program participants "to revert to" the earlier AI assessment method, "effectively suspend[ ] the AFFH Rule indefinitely," id. ¶ 9. In the plaintiffs' view, these two notices "constitute unlawful agency action," Am. Compl. ¶ 14, because they suspend the AFFH Rule without notice-and-comment procedures and because the withdrawal of the LG2017 Tool was arbitrary and capricious, id. ¶¶ 10–14.¹

Pending before this Court are three motions. First, the plaintiffs have moved, pursuant to Federal Rule of Civil Procedure 65 and Local Rule 65.1, for a preliminary injunction ordering HUD "to (1) rescind [the] May 23, 2018 Notices," referring to the LG2017 Withdrawal Notice and the AI Reliance Notice; "(2) reinstate the Assessment Tool for Local Governments"; and "(3) take all other necessary steps to ensure prompt implementation of the AFFH Rule." Pls.' Mot. Preliminary Injunction & Expedited Summ. J. ("Pls.' Mot. PI") at 1, ECF No. 19. Second, the defendants have moved to dismiss the Amended Complaint, pursuant to Federal Rule of Civil Procedure 12(b)(1), arguing that the plaintiffs lack standing. See generally Defs.' Mot. Dismiss Pls.' Am. Compl. ("Defs.' MTD"), ECF No. 38. Third, the State of New York seeks to intervene on behalf of the plaintiffs pursuant to Federal Rule of Civil Procedure 24(a) or (b). NYS's Mot. Intervene Supp. Pls. ("NYS's Mot. Intervene") at 1, ECF No. 24.

For the reasons provided below, the defendants' motion to dismiss is granted and the remaining two motions for preliminary injunctive relief and to intervene are therefore denied.²

I. BACKGROUND

The relevant statutory and regulatory framework, as well as the facts from which this litigation arises, are presented below.³

A. Statutory and Regulatory Framework

Since 1968, it has been "the policy of the United States to provide, within constitutional limitations, for fair housing throughout the United States." 42 U.S.C. § 3601. HUD's general obligation to affirmatively further fair housing in line with this policy is discussed first, followed by a summary of HUD's generally inadequate efforts to fulfill this obligation when administering housing block grant programs and ensuring compliance with statutory and regulatory requirements by program participants.

1. Overview of the AFFH Requirement

Congress enacted the Fair Housing Act as Title VIII of the Civil Rights Act of 1968, Pub. L. No. 90-284, 82 Stat. 81 ("FHA" or the "Act"), over fifty years ago in an effort to achieve "truly integrated and balanced living patterns." 114 CONG. REC. 3421, 3422 (1968) (statement of Sen. Mondale); see also Trafficante v. Metro. Life Ins. Co. , 409 U.S. 205, 211, 93 S.Ct. 364, 34 L.Ed.2d 415 (1972) ("[A]s Senator Mondale who drafted § 810(a) [‘Enforcement’ by HUD] said, the reach of the proposed law was to replace the ghettos ‘by truly integrated and balanced living patterns.’ " (quoting 114 CONG. REC. at 3422) ). The FHA was, in large part, a response to the heightened racial tensions and riots erupting in the United States throughout the 1960s, and the FHA's passage reflected an understanding that "fair housing legislation" was "the best way for [ ] Congress" at that time "to start on the true road to integration." 114 CONG. REC. at 3422 (statement of Sen. Mondale); see also Tex. Dep't of Hous. & Cmty. Affairs v. Inclusive Communities Project, Inc. , ––– U.S. ––––, 135 S.Ct. 2507, 2516, 192 L.Ed.2d 514 (2015) (explaining the FHA was passed in response to the assassination of Dr. Martin Luther King and the "new urgency" "the Nation faced ... to resolve the social unrest in the inner cities"). The FHA thus prohibits discrimination based on "race, color, religion, sex, familial status, or national origin" in the sale and rental of housing and other residential real estate–related transactions. 42 U.S.C. §§ 3604 – 05. Accordingly, the Act requires HUD to "administer [ ] programs and activities relating to housing and urban development in a manner affirmatively to further the policies of" fair housing, id. § 3608(e)(5), a requirement known as the "affirmatively further fair housing," or "AFFH," requirement.

Courts have recognized that the Act "imposes upon HUD an obligation to do more than simply refrain from discriminating (and from purposely aiding discrimination by others)." NAACP v. Sec'y of Hous. & Urban Dev. , 817 F.2d 149, 155 (1st Cir. 1987) (Breyer, J.) (noting that Congress's goal in passing the FHA "reflects the desire to have HUD use its grant programs to assist in ending discrimination and segregation, to the point where the supply of genuinely open housing increases"); see also Shannon v. U.S. Dep't of Hous. & Urban Dev. , 436 F.2d 809, 821 (3d Cir. 1970) (remanding HUD decision about a proposed project change...