Normandy Apartments v. U.S. Dept. of Housing

• Decision Date: 09 February 2009
• Docket Number: No. 08-6004.,08-6004.
• Citation: 554 F.3d 1290
• Parties: NORMANDY APARTMENTS, LTD., Plaintiff-Appellant, v. U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, Kimberly K. Waits, in her capacity as Supervisory Project Manager of the Multifamily Program Center in the Tulsa Field Office for the U.S. Department of Housing and Urban Development, and Herman S. Ransom, in his capacity as Director of the Kansas City Multifamily Hub for the U.S. Department of Housing and Urban Development, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

554 F.3d 1290

NORMANDY APARTMENTS, LTD., Plaintiff-Appellant, v. U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, Kimberly K. Waits, in her capacity as Supervisory Project Manager of the Multifamily Program Center in the Tulsa Field Office for the U.S. Department of Housing and Urban Development, and Herman S. Ransom, in his capacity as Director of the Kansas City Multifamily Hub for the U.S. Department of Housing and Urban Development, Defendants-Appellees.

No. 08-6004.

United States Court of Appeals, Tenth Circuit.

February 9, 2009.

Clyde A. Muchmore, Crowe & Dunlevy, Oklahoma City, OK (Mark S. Grossman and Nkem A. Housworth, Crowe & Dunlevy, Oklahoma City, OK, with him on the briefs) for Plaintiff-Appellant.

R.D. Evans, Jr., Assistant United States Attorney for the Western District of Oklahoma (John C. Richter, United States Attorney, Oklahoma City, OK, with him on the briefs) for Defendant-Appellee.

Before KELLY, BALDOCK, and McCONNELL, Circuit Judges.

McCONNELL, Circuit Judge.

In 2007, the United States Department of Housing and Urban Development ("HUD") terminated its contractual relationship with Normandy Apartments. Pursuant to this contract, Normandy had received financial subsidies for making housing available to low-income tenants who were qualified to receive assistance under the Section 8 federal housing program. Normandy sought injunctive and declaratory relief against HUD in the United States District Court for the Western District of Oklahoma, seeking to prevent HUD from abating its subsidy payments. It alleged that HUD had violated its regulations and breached its contractual obligations by the manner in which it terminated its payments to Normandy. The district court construed Normandy's claim as one for specific performance of a contract, and concluded that only the Court of Federal Claims had jurisdiction. Because we conclude, however, that the district court should have exercised jurisdiction over Normandy's claim that HUD violated its own regulations by terminating the Section 8 payments, we reverse and remand for consideration on the merits.

I. Background

Normandy Apartments has contracted with HUD since 1968 to provide Section 8 rental housing for qualified low-income tenants at its Tulsa apartment project. Under Section 8's project-based assistance program, tenants pay a portion of their rent, according to their means, but the bulk of the rent is paid by HUD. The district court determined that the value of the funds paid out by HUD to Normandy amounted to roughly $110,000 per month. Normandy Apartments, Ltd. v. United States Dep't of Hous. and Urban Dev., No. CIV-07-1161-R, 2007 WL 3232610, at *2 (W.D.Okla. Nov.1, 2007).

Under HUD regulations and Normandy's contract with HUD, Normandy was required to maintain the units it makes available for Section 8 tenants in "decent, safe, and sanitary" condition. 24 C.F.R. § 886.323; Aplt.App. 394 § 6(b). About once a year, HUD's Real Estate Assessment Center ("REAC") conducted a physical inspection of the property to ensure compliance with HUD standards, and issued a numerical score on a 100-point scale. A facility fails to meet HUD standards when it receives a score below sixty.

In November 2004, REAC inspected Normandy's complex and issued a failing score of fifty-nine. Although the parties contest Normandy's efforts to correct deficiencies at the complex following this initial inspection, it is undisputed that Normandy failed an August 2006 inspection, receiving an even lower score of fifty-four. This was the sixth time in eight inspections that Normandy's complex received a failing score.

In June 2007, HUD informed Normandy that it was in default of its obligation to maintain the complex in "decent, safe, and sanitary condition" and indicated that all Section 8 subsidy payments would be terminated. See Aplt.App. 236-39. Normandy sought reconsideration of this determination to no avail. After receiving notice on September 28, 2007 that all subsidy payments would be "suspended and abated" effective November 1, 2007, Normandy filed the instant suit, seeking injunctive and declaratory relief in the United States District Court for the Western District of Oklahoma. In particular, it sought a preliminary and permanent injunction preventing HUD from following through on its decision to terminate assistance payments.

Normandy asserted that, in terminating their relationship, HUD had violated both its regulations and the terms of its contract. Count I of Normandy's complaint alleged that HUD had "violat[ed] [its] regulations" by, among other things, "fail[ing] to consider Normandy's request for an adjustment of its REAC physical condition score" and failing to give Normandy a "reasonable amount of time in which to cure the default." Complaint ¶¶ 48-49 (citing 24 C.F.R. § 200.857(c)(3) and 24 C.F.R. § 886.320). Count II averred that HUD had breached its contract for similar reasons (e.g., by failing to allow it to implement corrective actions within a reasonable time following its default (Complaint ¶ 55)).

The district court heard oral argument both on the question of whether it had jurisdiction to issue a preliminary injunction against HUD and on the merits of Normandy's claims. The court first concluded that it was without subject-matter jurisdiction to issue a preliminary injunction. Construing Normandy's claim as an action against the government seeking specific performance of a monetary contract, the value of which exceeded $10,000, the court determined that the Tucker Act, 28 U.S.C. § 1491, endowed the United States Court of Federal Claims with exclusive jurisdiction to entertain Normandy's claims. Normandy Apartments, Ltd., 2007 WL 3232610, at *3. It therefore concluded that the United States had not waived its sovereign immunity to suit in federal district court. See id. at 2. Because the district court recognized the jurisdictional issues to be "complex," however it also proceeded to address the merits of a preliminary injunction. Id. at 3. Although it found that Normandy had not made a sufficient showing of irreparable injury in order to justify a preliminary injunction, it noted that "[t]he evidence was likely sufficient to establish the other elements" necessary, id. at *4, including a substantial likelihood of success on the merits. Id. at *3.

Normandy subsequently filed a motion to set aside the district court's dismissal of its motion for preliminary injunction. This too was denied on December 5, 2007. This appeal followed.¹

II. Discussion

Sovereign immunity generally shields the United States, its agencies, and its officers acting in their official capacity from suit. Wyoming v. United States, 279 F.3d 1214, 1225 (10th Cir.2002). The defense of sovereign immunity is jurisdictional in nature, depriving courts of subject-matter jurisdiction where applicable. Robbins v. U.S. Bureau of Land Mgmt., 438 F.3d 1074, 1080 (10th Cir.2006). Because general jurisdictional statutes, such as 28 U.S.C. § 1331, do not waive the Government's sovereign immunity, a party seeking to assert a claim against the government under such a statute must also point to a specific waiver of immunity in order to establish jurisdiction. See Lonsdale v. United States, 919 F.2d 1440, 1443-44 (10th Cir.1990). Here, neither party disputes the existence of a federal issue sufficient to confer jurisdiction under the general federal question statute, 28 U.S.C. § 1331; at issue is only whether Normandy can demonstrate that the government has waived sovereign immunity to suit in federal district court.²

On appeal, Normandy primarily asserts that the government has waived sovereign immunity by virtue of the Administrative Procedure Act ("APA"), which provides that, in most circumstances, "[a]n action in a court of the United States seeking relief other than money damages ... shall not be dismissed nor relief therein be denied on the ground that it is against the United States." 5 U.S.C. § 702; see also Robbins, 438 F.3d at 1080. We have noted, however, that "this waiver does not apply where any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought." Robbins, 438 F.3d at 1080 (internal quotations omitted). As the district court correctly recognized, we have found the Tucker Act to "impliedly forbid" certain relief in district court, such that the APA's waiver of sovereign immunity does not apply. The Tucker Act "vests exclusive jurisdiction with the Court of Federal Claims for claims against the United States founded upon the Constitution, Acts of Congress, executive regulations, or contracts and seeking amounts greater than $10,000." Burkins v. United States, 112 F.3d 444, 449 (10th Cir.1997). In Robbins, we joined several other circuits in concluding that the Tucker Act "`impliedly forbid[s]' federal courts from ordering declaratory or injunctive relief, at least in the form of specific performance, for contract claims against the government, and that the APA does not waive sovereign immunity for such claims." 438 F.3d at 1082 (emphasis added).

The district court understood Normandy's claim to fall within the ambit of this proscription. See Normandy Apartments, Ltd., 2007 WL 3232610, at *2-3. As a result, it concluded that the United States had waived sovereign immunity to suit only in the Court of Federal Claims, leaving federal district courts without jurisdiction. We review its conclusion that it lacked subject matter jurisdiction de novo. U.S. West, Inc. v. Tristani, 182 F.3d 1202, 1206 (10th Cir.1999). In so doing, we must resolve two questions. First, does Normandy's claim seek "relief other than money damages," such that the APA's general waiver of sovereign immunity is even implicated? Second, does the Tucker Act expressly or impliedly forbid the relief that Normandy seeks, such that the APA's waiver does not apply? These questions require us to characterize the nature both of Normandy's claim and...