Opinion
Civil Action No. 01-3820, Section "T" (4)
February 19, 2002
Before this Court come Marc H. Morial, Mayor of the City of New Orleans, The City of New Orleans, Christopher Horton, Terry Kendrick, Trudy Connelly, Marion Jordan, Mary McCledon, Sandra Faulk, Letha Richardson, and Shener Allen who have filed a Motion for Breach of Contract, Declaratory Judgment, Writ of Mandamus and Application for Injunction. The Court heard oral arguments on January 14, 2002. The Court, having heard the arguments in court and having considered the record. the evidence, the applicable law, and the memoranda submitted by the parties, is fully advised on the premises and ready to rule.
ORDER AND REASONS
I. BACKGROUND
In February 1996, the United States Department of Housing and Urban Development ("HUD") assumed operation and control over the Housing Authority of New Orleans ("HANO"). This takeover occurred because HANO was in breach of its Annual Contributions Contract ("ACC"). This breach of the ACC was a substantial default as defined in § 6(j) of the United States Housing Act of 1937 and 24 C.F.R. § 901.05(y), and therefore gave HUD the right to take control of HANO.
On February 8, 1996, then-Secretary of HUD Henry Cisneros and Marc Morial, Mayor of the City of New Orleans ("City"), entered into a "Cooperative Endeavor Agreement" ("CEA"). In the CEA, both parties acknowledged that HANO was "in substantial default of its Annual Contribution Contract," and that HUD had the authority "to assume possession of and operational responsibility for [HANO] public housing." Since the original execution of the CEA, HUD and HANO have annually extended the CEA. The most recent amendment to the CEA was executed in December 2000 by then-Secretary of HUD Andrew Cuomo and Mayor Morial. In the Amended CEA of 2000 ("ACEA"). both the City and HUD recognize that HANG is still in substantial default of its ACC with HUD. The ACEA is effective until December 31, 2003.
Paragraph A.3 of the Cooperative Endeavor Agreement.
Paragraph A.4 of the Cooperative Endeavor Agreement.
The CEA provided the structure for HUD's possession of HANO's projects and programs. The Assistant Secretary for Public and Indian Housing, or his designee, serves as the Secretary of HUD's designee to act in the place of the Board of HANO. The CEA also created the position of Executive Monitor. The Executive Monitor's duties were not specified in the CEA, but were instead enumerated in a separate "Executive Monitor Services Agreement" between HANG and the Administrators of Tulane University, under whose auspices the Executive Monitor operates. The duties of the Executive Monitor involve the exercise of oversight over a range of HANG activities, including operation, development, modernization, and demolition of HANG housing. The Executive Monitor is also to hold regular meetings with the Mayor to provide him with status updates on the progress of HANO's operations.
On December 31, 2000, HUD entered into a contract with Mitchell and Titus to fulfill the duties of the HANG Board during HUD's possession. No HUD official was ever designated to provide close supervision of Mitchell and Titus in carrying out its Board functions, and the duties that Mitchell and Titus were obligated to perform under the contract overlapped with the duties of the Executive Monitor. The Mitchell and Titus contract was allowed to expire on December 31, 2001.
The Plaintiffs filed this Motion on December 20, 2001. Through this Motion, the Plaintiffs are requesting that the Court restrain HUD from putting HANG into administrative receivership.
II. LAW AND ANALYSIS
A. STANDING:
Article III of the Constitution confines the jurisdiction of the federal courts to actual "cases" and "controversies." and "the doctrine of standing serves to identify those disputes which are appropriately resolved through the judicial process." Whitmore v. Arkansas, 495 U.S. 149, 155 (1990). In order to establish Article III standing, a plaintiff must, as an "irreducible constitutional minimum," show three things: 1) an injury in fact, one which is both "concrete and particularized;" 2) causation. i.e. a "fairly traceable" connection between the alleged injury in fact and the alleged conduct of the defendants; and 3) redressability, or the likelihood that the requested relief will remedy the alleged injury. Lujan v. Defenders of Wildlife, et al., 504 U.S. 555, 560-61 (1992).
1. The Tenants
The individuals named in this Complaint, not including the Mayor of New Orleans, are tenants of HANG housing facilities. In order to satisfy the constitutional test for standing, these plaintiffs must have suffered an "injury in fact," which has been defined by the Supreme Court as "an invasion of a legally protected interest." Lujan v. Defenders of Wildlife, et al., 504 U.S. 555, 560-61 (1992). The above-named Plaintiffs allege that this action arises out of 42 U.S.C. § 1437 and 42 U.S.C. § 1983.
Based on the recent Fifth Circuit opinion in Banks v. Dallas Housing Authority, 271 F.3d 605 (5th Cir. 2001), the individual tenants in this matter do not have standing to sue under 42 U.S.C. § 1437 because there is no implied right of action for tenants under the sections of 42 U.S.C. § 1437 that impose conditions upon the receipt of government monies for housing purposes.
The individual tenants allege that even if they do not have standing under 42 U.S.C. § 1437, they alternatively have standing because they are third-party beneficiaries of the contracts at issue, that being the various CEAs. The tenants allege that the CEAs were executed primarily for the tenants' benefit, and based on Holbrook v. Pitt, 643 F.2d 1261 (7th Cir. 1981), they have standing to bring suit based on the contracts.
In Holbrook, the tenants of housing projects, who were beneficiaries of contracts between HUD and individual housing project owners, filed suit against HUD. Under the statutes at issue in Holbrook, the tenants received a direct benefit from the contracts because HUD made rental payments to the housing project owners on behalf of the tenants. The Court in Holbrook determined that because the tenants received a direct benefit from the contracts (the actual payment of monies on their behalf), the tenants had standing to sue under those contracts.
In the case at bar, the actual benefits that the tenants received from the execution of the CEAs are much less tangible than the payment of monies on behalf of the tenants in Holbrook. However, For the purposes of this Order, the Court determines that the individual tenants have standing to bring suit based on the CEAs because the CEAs were executed for the benefit of the tenants.
2. The Mayor of the City of New Orleans and the City of New Orleans
The Mayor of the City of New Orleans and the City of New Orleans do not have standing as parens patriae for the citizens of New Orleans because the citizens of New Orleans are also citizens of the United States, and the United States is the ultimate parens patriae with respect to federal legislation. South Carolina v. Katzenbach, 383 U.S. 301, 324 (1966). When the Federal Government has invoked federal law to protect citizens of a state or municipality, that state or municipality may not act as parens patriae against the Federal Government. Arizona State Dep't of Pub. Welfare v. Dep't of Health. Educ. And Welfare, 449 F.2d 456, 478-79 (9th Cir. 1971).
The Mayor of the City of New Orleans and the City of New Orleans also allege that if they do not have standing as parens patriae, they alternatively have standing as parties to the various CEAs. As a party to a contract, one usually has standing when a dispute arises out of that contract. For purposes of this Order. the Court finds that the Mayor of the City of New Orleans and the City of New Orleans meet the standing requirements set out in Lujan v. Defenders of Wildlife, et al., supra because the City and the Mayor are parties to the contracts at issue.
3. Conclusion
The individual tenants do not have standing under 42 U.S.C. § 1437 because there is no implied right of action for tenants under the sections of 42 U.S.C. § 1437 that impose conditions upon the receipt of government monies for housing purposes. The Mayor of the City of New Orleans and the City of New Orleans do not have standing as parens patriae for the citizens of New Orleans in a suit against the United States because the United States is the ultimate parens patriae for the Citizens of the United States. The Plaintiffs in this action only have standing based on the contracts at issue, whether it is as parties to the contracts, or as beneficiaries of the contracts.
B. JURISDICTION:
The United States cannot be sued absent an express waiver of its immunity as sovereign. Block v. North Dakota. ex rel. Bd. of Univ. and School Lands, 461 U.S. 273, 287 (1983). Absent a waiver of sovereign immunity, courts are totally lacking in jurisdiction to entertain actions against the United States. United States v. Sherwood, 312 U.S. 584, 586 (1941). "A suit is against the sovereign itself if the judgment sought would expend itself on the public treasury or domain, or interfere with the public administration . . . or if the effect of the judgment would be to restrain the government from acting, or to compel it to act." Dugan v. Rank, 372 U.S. 609, 620 (1963) (internal quotes omitted).
Because the relief prayed for in the present Motion is an injunction against a Federal Agency, this matter is against the sovereign. The Administrative Procedure Act ("APA") waives sovereign immunity in suits against the United States seeking relief "other than money damages." 5 U.S.C. § 702. However, § 702 is inapplicable "if any other statute that grants consent to suit expressly or impledly Forbids the relief which is sought." Id.
The Tucker Act gives the United States Court of Federal Claims exclusive jurisdiction over contract claims in excess of $10,000 against the United States. 28 U.S.C. § 1346, 1491. While the Tucker Act waives sovereign immunity for all contract claims in excess of $10,000 and allows those suits to be brought in the United States Court of Claims, if the Tucker Act forbids relief, it renders the APA waiver of sovereign immunity inapplicable.
§ 702 is inapplicable "if any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought."
The Tucker Act impliedly forbids declaratory and injunctive relief and precludes a § 702 waiver of sovereign immunity. Tuscon Airport Authority v. General Dynamics Corp., 136 F.3d 641, 646 (9th Cir. 1998). "The only remedy to which the United States has consented in cases of breach of contract is to the payment of money damages in either the Court of Claims, if the amount claimed is in excess of $10,000 . . . or the district courts, where the amount in controversy is $10,000 or less."Coggeshall Development Corp. v. Diamond, 884 F.2d 1, 3 (5th Cir. 1989). Federal Courts do not have the power to order specific performance by the United States of its contractual obligations. Florida Dept. of State v. Treasure Salvors. Inc., 458 U.S. 670, 689.
Because the United States has not consented to suits that request declaratory or injunctive relief based on a contract with the United States, the United States has not waived sovereign immunity anthis Court does not have jurisdiction over the contractual claims made by the Plaintiffs in this action.
C. CONCLUSION
The Plaintiffs in this action have standing to contest the contracts with the United States because they either are parties to those contracts or receive direct benefits from those contracts. Otherwise. the Plaintiffs do not have standing. However, the United States has not waived its sovereign immunity in contractual cases which pray for injunctive or declaratory relief. Because this request is for declaratory and injunctive relief based on contract, and the Plaintiffs only have standing in this matter based on their contractual relationship to the Defendant. this Court does not have jurisdiction to hear this matter.
For the foregoing reasons, the Court DENIES Plaintiffs' Motion for Breach of Contract, Declaratory Judgment, Writ of Mandamus and Application for Injunction.
Accordingly.
IT IS ORDERED that the Motion for Breach of Contract, Declaratory Judgment, Writ of Mandamus and Application for Injunction filed by the Plaintiffs be, and is hereby, DENIED.