United States v. City of New Orleans
| Decision Date | 06 December 2012 |
| Docket Number | CIVIL ACTION NO. 12-2011 |
| Parties | UNITED STATES OF AMERICA v. THE CITY OF NEW ORLEANS and THE LOUISIANA STATE BOND COMMISSION |
| Court | U.S. District Court — Eastern District of Louisiana |
Before the Court is the City of New Orleans motion to dismiss the government's complaint for lack of subject matter jurisdiction under Federal Rule 12(b)(1), and for failure to state a claim upon which relief can be granted under Rule 12(b)(6). For the reasons that follow, the motion is DENIED.
This case arises out of the proposed redevelopment of a former nursing home into an affordable apartment complex.
Beginning in 2009, the Gulf Coast Housing Partnership ("GCHP"), a nonprofit real estate development company whose principal focus is providing affordable housing, began redeveloping a building formerly used as a nursing home, located at 2535 Esplanade Avenue in New Orleans. GCHP, along with other nonprofit organizations and developers, planned to convert the Esplanade property into a forty-unit affordable housingdevelopment. Half of the proposed units would be reserved for low-income individuals, and the other half of the units would serve as "permanent supportive housing" for homeless persons with mental and physical disabilities. The Esplanade property would also include an on-site case management office, which would primarily involve assisting tenants in the transition from homelessness to independent living.
The main source of funding for the redevelopment project was to be provided by the Piggyback Program, which was created by the State of Louisiana to assist in redevelopment efforts post-Hurricane Katrina. Through the Piggyback Program, eligible projects would receive funds from a combination of sources, including state-issued bonds that require the approval of the Bond Commission. In August 2009, the Bond Commission adopted a moratorium on approving bond financing under the Piggyback Program for low-income housing projects, stating that it needed to study the housing marking in New Orleans. A final study was released in March 2011, which concluded that the New Orleans' housing market would support additional low-income affordable housing; however, the moratorium has yet to be lifted.
To date, the Esplanade project has not received Piggyback funding.1 The project has had a difficult history.
According to the local zoning ordinance, the Esplanade property is located in a RM-3 zoned district that allows for apartment complex use; however, the ordinance also requires that an apartment complex provide off-street parking for each dwelling unit. The original proposed apartment complex for the Esplanade property included forty-two dwelling units, but the existing parking lot only contained twenty-eight spaces. As a result, in January 2010, the developers applied to the Board of Zoning Adjustments for a variance to waive the additional fourteen off-street parking spots, and to allow the fourteen parking spaces to be located on the streets. Pursuant to the zoning ordinance, notice of the developers' application was provided to residents of the surrounding neighborhood. On March 8, 2010, the Boardheld a hearing on the first variance application, and neighbors vocalized opposition, the extent to which is disputed, to the proposed use of the property.2
At the end of that hearing, the Board denied the first variance application. The developers subsequently revised the plan for the Esplanade property. The number of units, it was proposed, would be reduced to forty, twenty of which would be supportive housing. A portion of the building would be demolished, and the parking lot would be reconfigured to provide the required forty parking spaces. Under the revised plan, however, some of the parking spaces would be located less than ten feet from Bell Street, the public right of way behind the property, in violation of the zoning ordinance. And so, the developers submitted still a second variance application to the Board, requesting a waiver of the setback requirement. On May 10,2010, the Board conducted a hearing on the second variance application, and voted to deny the application.3
After the denial of the second variance application, the developers again revised the plan for the Esplanade property. The plan would still provide for forty dwelling units, twenty of which would be for supportive housing, and a portion of the building would be demolished. The number of parking spaces were increased to forty-three, but some of those spaces would still be located within the required setback from Bell Street. The developers submitted a third variance application, again, asking for a waiver of the setback requirement.
On November 8, 2010, after a hearing on the third variance application, the application was denied without prejudice by an equally divided vote of the Board members. On the same day, November 8, an attorney for the Esplanade Ridge & Treme Civic Association ("ERTCA") filed a motion to dismiss the developers' variance application, alleging that the proposed use of the Esplanade property had been improperly classified as an apartment complex. ERTCA asserted that the Esplanade property should be considered a residential care center, which is not permitted in a RM-3 zoned district. The Board decided that it lacked jurisdiction to consider the argument. And the difficultiescontinued.
Paul A. May, Director of the City's Department of Safety and Permits, sent a letter to the City Planning Commission dated April 8, 2011, which stated that the proposed use of the Esplanade property did not comply with the zoning ordinance, because the proposed use involved a supportive service to the tenants (the on-site office that assisted the homeless transition into independent living), which he stated is not an allowed use for a RM-3 zoned district. The developers appealed the Paul May letter to the Board.
On November 16, 2011, approximately seven months after the letter was issued, the Board granted the appeal and rescinded the Paul May letter. On December 12, 2011, the Board, on its own motion, finally granted to the developers a variance permitting the Esplanade property to be redeveloped as low-income housing, with an on-site case management office, and without additional off-street parking spaces.
The United States Department of Justice filed suit in this Court on August 6, 2012, alleging that the City of New Orleans and the Louisiana Bond Commission violated the Fair Housing Act and Title II of the American with Disabilities Act. The United States seeks injunctive relief to stop the City from continuing to obstruct the Esplanade project, and retrospective relief for the damages incurred by the developers due to the City's delays.The City now moves for dismissal under Federal Rules 12(b)(1) and 12(b)(6), asserting that the Court lacks subject matter jurisdiction, and that the United States has failed to state a claim upon which relief can be granted.
Motions filed under Rule 12(b)(1) of the Federal Rules of Civil Procedure allow a party to challenge the Court's subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1). The burden of proof for a Rule 12(b)(1) motion to dismiss is on the party asserting jurisdiction. Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001). The Court may find a plausible set of facts to support subject matter jurisdiction by considering any of the following: "(1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts." Barrera-Montenegro v. United States, 74 F.3d 657, 659 (5th Cir. 1996).
The City's second ground for dismissal advanced here is dismissal for failure to state a claim under Rule 12(b)(6). The standard of review applicable to motions to dismiss under Rule 12(b)(6) is similar to that applicable to motions to dismiss under Rule 12(b)(1). See Williams v. Wynne, 533 F.3d 360, 364-65n.2 (5th Cir. 2008)( that the Rule 12(b)(1) and Rule 12(b)(6) standards are similar, but noting that applying the Rule 12(b)(1) standard permits the Court to consider a broader range of materials in resolving the motion).
Rule 12(b)(6) of the Federal Rules of Civil Procedure allows a party to move for dismissal of a complaint for failure to state a claim upon which relief can be granted. Such a motion is rarely granted because it is viewed with disfavor. See Lowrey v. Tex. A & M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997) (quoting Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982)). In considering a Rule 12(b)(6) motion, the Court "accepts 'all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.'" See Martin K. Eby Constr. Co. v. Dall. Area Rapid Transit, 369 F.3d 464 (5th Cir. 2004) (quoting Jones v. Greninger, 188 F.3d 322, 324 (5th Cir. 1999)). But, in deciding whether dismissal is warranted, the Court will not accept conclusory allegations in the complaint as true. Kaiser, 677 F.2d at 1050. Indeed, the Court must first identify allegations that are conclusory and, thus, not entitled to the assumption of truth. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). A corollary: legal conclusions "must be supported by factual allegations." Id. at 678. Assuming the veracity of the well-pleaded factual allegations, the Court must then determine"whether they plausibly give rise to an entitlement to relief." Id. at 679.
"'To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir. 2009)(quoting Iqbal, 556 U.S. at 678)(internal quotation marks omitted). "Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the...
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