Sloan v. Dept. of Housing & Urban Dev.
| Decision Date | 14 November 2000 |
| Docket Number | 99-5146 |
| Parties | Leon Sloan, Sr. and Jimmie Lee Furby, Appellants v. Department of Housing & Urban Development, et al.,AppelleesUnited States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Appeal from the United States District Court for the District of Columbia(No. 97cv00764)
James K. Kearney and Joseph L. Luciana, III argued the cause for appellants. With them on the briefs were James P. Gallatin, Jr., David T. Case, and A. Thomas Morris.
Scott S. Harris, Assistant United States Attorney, argued the cause for appellees. With him on the brief were Wilma
A. Lewis, United States Attorney, and R. Craig Lawrence, Assistant United States Attorney.
Before: Edwards, Chief Judge, Henderson and Garland, Circuit Judges.
Opinion for the Court filed by Chief Judge Edwards.
Appellants Leon Sloan, Sr. and Jimmie Lee Furby were partners and owners of J&L Renovation Company ("J&L"), a small demolition contracting company specializing in interior demolition. On August 18, 1995, they received a notice from the United States Department of Housing and Urban Development ("HUD") that the agency was seeking debarment of Sloan, Furby, and J&L from government contracting for a period of five years based upon allegations of improper clean-up and disposal of waste at a public housing construction site. HUD issued suspensions pending a final determination on the debarment action. In August 1996, a HUD Administrative Law Judge ("ALJ") denied the five-year debarment and terminated the suspensions. The ALJ, however, declined to void the suspensions ab initio, and the Secretary of HUD affirmed this decision.
Sloan and Furby sought relief in the District Court, claiming that the agency's failure to void the suspensions ab initio violated the Administrative Procedure Act ("APA"), and that the actions of various HUD officials deprived them of due process. In a second complaint against individual HUD officials, Sloan and Furby sought damages under Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971). The District Court, after consolidating the cases, entered an order dismissing the consolidated complaint. In a related, unconsolidated case, Sloan and Furby brought claims pursuant to the Federal Tort Claims Act ("FTCA"). Appellants' FTCA claims are the subject of a separate appeal, Sloan v. United States Department of Housing and Urban Development, No. 99-5145, heard on the same day as this case.
Appellants raise two principal issues in the instant appeal. Appellants' first claim is that HUD's refusal to void their suspensions ab initio was arbitrary and capricious. Appellee HUD contends that there was ample evidence to support the suspensions at the time they were imposed, as well as when the case was heard by the ALJ. We disagree. HUD originally had based the issuance of the suspensions on three distinct charges. The debarment proceeding conclusively revealed that the first and third charges--relating to hazardous waste containment--were completely unsupported. Furthermore, the ALJ did not find, and HUD does not argue, that the second charge alone--relating to improper disposal of construction debris--would have supported issuance of the suspensions. Finally, the Secretary's decision is devoid of any good reason to justify the denial of the relief sought by appellants. On this record, we hold that the agency's failure to void the suspensions ab initio was arbitrary and capricious.
Appellants' second claim challenges the District Court's finding that the APA's comprehensive remedial structure precludes recognition of appellants' Bivens claims. We need not reach this issue, however, because we reject appellants' claim that individual HUD defendants violated their constitutional rights to due process in conducting and supervising the investigations and prosecution associated with the suspensions and debarment proceedings. We therefore affirm the judgment of the District Court dismissing the Bivens claims.
In 1989, the Allegheny County Housing Authority ("ACHA") received funds from HUD to perform modernization work at the Burns Heights public housing project in Duquesne, Pennsylvania. Part of the funding was intended for lead-based paint testing at the site. Because a previous x-ray fluorescence ("XRF") test for lead-based paint had proven inconclusive, ACHA prepared specifications calling for the demolition contractor to assume all existing painted surfaces contained lead-based paint.
In November 1992, Mistick Construction, PBT ("Mistick"), in conjunction with its bid for demolition work at Burns Heights, reviewed ACHA's XRF test and hired an industrial hygienist to perform a toxic characteristic leaching procedure ("TCLP") test of Burns Heights wall debris. The TCLP test established that the lead content of the wall debris was substantially less than the United States Environmental Protection Agency ("EPA") threshold for hazardous waste. ACHA subsequently hired Mistick to perform the demolition work..
In January 1993, before beginning the demolition work, Mistick conducted a test of the air inside the Burns Heights buildings to determine whether hazardous levels of lead were present. The air test results indicated that lead levels were significantly less than the Occupational Safety & Health Administration ("OSHA") limit; Mistick therefore concluded that OSHA worker protection requirements need not be followed when work was done on the site. Mistick provided the TCLP and air test results to ACHA, and ACHA confirmed that hazardous lead-based paint protocols were not required for demolition work at Burns Heights. The parties agreed, in writing, that the test results were "well within EPA guidelines" and that demolition waste from Burns Heights need not be disposed of as contaminated waste. Mistick Inc. Proposed Hazardous Materials Work Plan for the Burns Heights Project (Jan. 7, 1993), reprinted in Appendix ("App.") 416, 419.
In February 1993, Mistick subcontracted the interior demolition work at Burns Heights to J&L, the company owned by appellants Sloan and Furby. From February 1993 until May 1995, when J&L completed its demolition work, J&L disposed of most of its demolition debris in dumpsters provided by Mistick. For a period beginning in 1994, however, J&L began separating plaster from other demolition debris and delivering it to an unapproved landfill (the "Perrone site").Under the then applicable Pennsylvania regulations, plaster was defined as construction/demolition waste which had to be dumped in an approved landfill. See 25 Pa. Code s 271.1 (1999) (adopted April 8, 1988, effective April 9, 1988). Appellants were unaware of the change in state regulations. See Matter of Sloan, HUDBCA Nos. 96-C-106-D3, 96-C-107D4, 96-C-108-D5, 1996 WL 506267 (H.U.D.B.C.A. Aug. 30, 1996) (ALJ determination) ( that appellants "would not have dumped the plaster debris in an unapproved landfill if they had been aware of the change in state regulations").
Upon discovering that a rival construction group was following and taping J&L's dumping activities, Mistick requested J&L to discontinue disposing of plaster at the unapproved site, which J&L did. Mistick subsequently informed the Pennsylvania Department of Environmental Protection ("Pennsylvania DEP") of the placement of plaster at the Perrone site. The Pennsylvania DEP determined that no action was required.
In November 1994, during an unrelated HUD debarment proceeding, HUD received information that Mistick was not properly performing lead-based paint abatement at Burns Heights. Thereafter, two HUD officials, Mark Chandler, an auditor in HUD's Office of Inspector General, and Dane Narode, an attorney from HUD's Office of Public and Indian Housing, began investigating the demolition work at Burns Heights. Chandler conducted the performance audit.
Chandler and Narode visited the Perrone site, where they observed paint chips resembling those from the Burns Heights project before allegedly being chased from the site by its owner. Chandler and Narode also visited Burns Heights where they photographed J&L's failure to contain dirt, dust, and paint chips. Chandler then spoke with Furby on the telephone and also met with David McLean, Director of Maintenance and Development for ACHA. During the latter conversation, McLean mistakenly indicated that Burns Heights was an ACHA lead-based paint project. Chandler did not inquire as to whether there were hazardous levels of lead at Burns Heights nor whether lead-based paint abatement was being performed there.
Subsequent to his meeting with McLean, Chandler received from ACHA copies of the XRF test, the November 1992 TCLP test, and the January 1993 air test. These tests clearly indicated that there were no hazardous levels of lead present at Burns Heights, but Chandler was not qualified to interpret or evaluate the test results. Amazingly, Chandler did not ask either ACHA or Mistick what the test results meant and he never spoke to Mistick or J&L about whether the subcontract covered lead-based paint abatement. Chandler's final audit report, which was sent to HUD's Pittsburgh Area Office on October 18, 1995, stated, without good basis, that Mistick and J&L had failed to properly perform lead based paint abatement; on this erroneous finding, Chandler's report concluded that Mistick and J&L had not performed demolition work at Burns Heights in accordance with contractual requirements.
On August 18, 1995, three months after the demolition work at Burns Heights had been completed, Assistant Secretary for Public and Indian Housing Joseph Shuldiner notified Sloan and Furby that they were suspended from all HUD-related government contracting work and that HUD was seeking a five-year debarment from participation in HUD-funded construction work. The notice...
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