Opinion
Civil Action No. MJG-95-309.
January 10, 2006
MEMORANDUM AND ORDER
The Court has before it the Federal Defendants' Motion for Summary Judgment [Paper 693] and the materials filed in regard thereto. The Court has also had the benefit of arguments by counsel.
I. BACKGROUND
In the instant lawsuit, the Plaintiff class, including certain African-American residents of Baltimore City public housing, presented various constitutional and statutory claims against the City of Baltimore, the Housing Authority of Baltimore City ("HABC" or "Local Defendants") and the United States Department of Housing and Urban Development ("HUD" or "The Federal Defendants").
On June 25, 1996, the parties entered into a Partial Consent Decree [Paper 55]. The remaining issues, plus those inevitably raised by the Partial Consent Decree, proceeded to a liability phase trial.
On January 6, 2005 the Court issued its Memorandum of Decision [Paper 739] ("the Liability Decision"), published as Thompson v. HUD, 348 F. Supp. 2d 398 (D. Md. 2005).
Page references to the Liability Decision herein shall refer to the published decision, Thompson v. HUD, 348 F. Supp. 2d 398 (D. Md. 2005).
In the Liability Decision, the Court held that:
1. The Local Defendants had no liability.
2. The Federal Defendants were liable for violations of the Fair Housing Action of 1968, 42 U.S.C. § 3608(e)(5) ("FHA").
3. A decision on Plaintiffs' equal protection claim against the Federal Defendants was deferred until after the remedial phase trial.
The Court also stated that during the remedial phase trial it would "hear evidence regarding the appropriate action to take to insure that HUD shall, in the future, adequately consider a regional approach to the desegregation of public housing in the Baltimore Region." Thompson, 348 F. Supp. 2d at 409.
The Federal Defendants seek summary judgement with regard to remedial phase issues. They contend, in essence, that the Court erred in finding them liable and, even if the Court's finding that HUD violated the FHA is correct, there is no possible remedial action for the Court to take.
II. DISCUSSION
In the Liability Decision, the Court held HUD liable under § 3608(e)(5) of the FHA. This section requires HUD to "administer [housing] programs . . . in a manner affirmatively to further the policies of this title," including the Act's broad policy "to provide, within constitutional limits, for fair housing throughout the United States." 42 U.S.C. § 3608(e)(5) (2005); 42 U.S.C. § 3601 (2005). In this context, "fair housing" means the provision of housing free from discrimination.
The Court held the Federal Defendants liable because of their failure to adequately, if at all, consider a regional approach to the provision of fair housing to the Plaintiff class in the Baltimore Region.
The Court did not, as contended by the Federal Defendants, base liability upon HUD's failure to "provide enough public housing in the counties surrounding the City to meet its statutory, and perhaps constitutional, obligations." Fed. Defs.' Mot. for Summ. J. [Paper 693] at 1. Nor did the Court hold that HUD violated "the duty, to further fair housing by taking affirmative action to create housing opportunities outside the City of Baltimore." Id. at 17.
Section 3608 of the FHA prescribes an affirmative duty. NAACP v. HUD, 817 F.2d 149, 155 (1st Cir. 1987). Thus, HUD must take action to fulfill "the goal of open, integrated residential housing patterns to prevent the increase of segregation. . . ."Otero v. N.Y. City Hous. Auth., 484 F.2d 1122, 1134 (2nd Cir. 1973). In the Liability Decision, the Court found that HUD excessively focused its policies upon desegregative actions within Baltimore City, rather than within the Baltimore Region as a whole. Thompson, 348 F. Supp. 2d at 458-459. The Court recognized in the Liability Decision and, again recognizes, that HUD's policy decisions are entitled to great deference. However, "[a] court's deference to an agency's decision-making process `does not require it to countenance the agency's failure to consider an important aspect of the problem. . . .'" Id. at 457 (citing Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).
A. The FHA Violation
The Federal Defendants contend that HUD cannot be liable because of its limited role in regard to public housing. They also argue that they did not receive adequate notice of the nature of the claim upon which they were held liable. These contentions shall be addressed in turn.
1. HUD's Role
The Federal Defendants argue that because HUD does not build public housing it has no obligation or opportunity to develop and/or site public housing in any particular location in the Baltimore Region. Fed. Defs.' Mot. for Summ. J. at 7. They contend that Congress assigned this role to state and local instrumentalities, and not to the federal government. Id. at 8. Therefore, the Federal Defendants argue, HUD cannot be faulted for its failure to perform a role it was never prescribed.
The Court's holding of liability was not based on a finding that HUD itself could have built or sited public housing outside of Baltimore City. Rather, the Court found that HUD controlled the flow of federal housing resources to the Baltimore Region and had authority to set terms under which funds were allocated. Furthermore, under 24 C.F.R. § 941.202, HUD has authority to approve public housing sites selected by a public housing authority and, under 24 C.F.R. § 941.612, HUD approves development proposals that direct the use of development funds and plans for specific sites. Moreover, as detailed by Plaintiffs in their papers, HUD's supervision over its programs in the Baltimore Region means it controls funding and reserves the power to make significant programmatic decisions. See generally, Pls.' Opp. to Fed. Defs.' Mot. for Summ. J. at 6-9 (discussing HUD's control over federal programs such as CDBA and HOME HOPE VI).
In light of the agency's powers, the Court concluded that the Fair Housing Act required HUD to at least consider regional approaches in exercising its considerable leverage over public housing in a manner that does not perpetuate segregation patterns that resulted from de jure segregation in public housing in Baltimore City. HUD can fulfill this mandate without building or siting public housing itself. What HUD must do is consider, in good faith, regional approaches to desegregation in public housing in the Baltimore Region.
2. Adequate Notice of the Claim
With respect to the FHA violation, the Federal Defendants contend that the theories of liability presented by Plaintiffs at trial focused on the liability of the Baltimore City Defendants, rather than on HUD's liability. HUD argues that it did not receive sufficient notice of the § 3608(e)(5) claim upon which the Court based its liability holding.
In particular, the Federal Defendants contend that the Plaintiffs' Pretrial Memorandum did not assert § 3608(e)(5) liability and therefore, they were not able to adequately defend against such a claim. Fed. Defs.' Mot. for Summ. J. at 11. However, in the Pretrial Memorandum Plaintiffs alleged that Defendants violated 42 U.S.C. § 3608(e)(5) by failing to affirmatively further fair housing, which is the precise basis upon which the Court ultimately found the Defendants' liable. Moreover, Plaintiffs' Pretrial Memorandum referred to the regionalization issue. The Federal Defendants never objected to consideration of regional approaches during trial and, in fact, engaged the issue on its merits by arguing that Plaintiffs' evidence was insufficient to prove the claim. Liability Trial Tr. at 4240.
The Plaintiffs' Pretrial Memorandum stated "the record shows that, by failing to dismantle the segregation that has plagued public housing in Baltimore since before Brown, defendants have failed to perform their affirmative duties under the Fair Housing Act and have plainly violated section 3608." Pls.' Pretrial Mem. at 42. See Thompson, 348 F. Supp. 2d at 462 (holding: "[i]n effectively wearing blinders that limited their vision beyond Baltimore City, Federal Defendants, at best, abused their discretion and failed to meet their obligations under the Fair Housing Act to promote fair housing affirmatively.")
For example, the Plaintiffs' Pretrial Memorandum states: "HUD and local officials are repeating the mistake of investing scarce housing resources on the same failed sites and the surrounding neighborhoods, and avoiding the development of areas of the region that would offer opportunities for desegregation and greater economic activity." Pls.' Pretrial Mem. at 3 (emphasis added).
During the trial the Court stated that some evidence had been produced on the question of regionalization. Liability Trial Tr. at 4222-23.
Trial courts have discretion to consider a claim where the plaintiff made "at least a brief reference" to the claim at trial without objection by the defendant, even if a specific claim was not included in the pretrial order. See, e.g., Perfection-Cobey Co., Div. of Harsco Corp. v. City Tank Corp., 597 F.2d 419, 420-421 (4th Cir. 1979) ("Pretrial orders are designed to expedite litigation and eliminate surprise by framing the issues remaining for trial. If the parties actually litigate without objection issues not raised in the order, there is little reason to enforce pretrial elimination of the issues. The trial court can treat the pretrial order as amended by the consent of the parties"). See also Bucky v. Sebo, 208 F.2d 304, 305 (2d Cir. 1953) (holding that a trial judge properly considered an issue that was not included in the Plaintiffs' pre-trial order, but was briefly mentioned at trial without objection). The decision to consider a claim is within the discretion of the district court and a court abuses its discretion only when its decision "constitutes clear error of judgment." Rasbury v. I.R.S., 24 F.3d 159, 168 (11th Cir. 1994). The Court does not find, as the Federal Defendants contend, that the Plaintiffs' Pretrial Order precluded the Court's § 3608 holding.
The Court concludes that there was no procedural impediment to its holding for the Plaintiffs, as it did, on the § 3608 claim. Nevertheless, to insure that the Court is fully informed on the issues presented, the Court shall permit the Federal Defendants to reopen the record and present evidence and arguments regarding the § 3608 claim. The Court will, after hearing any such supplemental evidence and arguments, reconsider its decision as may be appropriate.
B. Administrative Procedure Act Remedy Preclusion
The Federal Defendants contend that no remedy is available under the Administrative Procedures Act (APA) because:
1. There was no challenge to a discrete agency action that HUD was required to take, and
2. There was no final agency action.
Furthermore, they argue that the only cause of action for the Plaintiffs' constitutional claim arises under the APA and is therefore subject to the same APA limitations.
1. Scope of Review
Federal courts may award two types of relief pursuant to the APA. Under section 706(1), a court may "compel agency action unlawfully withheld or unreasonably delayed." 5 U.S.C. § 706(1) (2005). A court may also proceed under section 706(2) to "hold unlawful and set aside agency action, findings, and conclusions found to be [unlawful]." 5 U.S.C. § 706(2) (2005).
The Government argues that the Supreme Court's decision inNorton v. S. Utah Wilderness Alliance, 542 U.S. 55 (2004) ("SUWA") precludes review of § 3608 violations under § 706(1) and § 706(2) of the APA. In SUWA, the Supreme Court held that "a claim under § 706(1) can proceed only where a plaintiff asserts that an agency failed to take a discrete agency action that it is required to take." SUWA, 542 U.S. at 64. If an agency fails to act, that failure may be reviewed under section 706(1) (the APA provision at issue in SUWA). However, a Court may also proceed under 706(2).
Review under APA section 706(2) is appropriate in the instant case because HUD's liability under § 3608(e)(5) was based on HUD's actions and long-term patterns. While it is true that HUD's "long-term practice" and "excessive focus" on actions within Baltimore City can be described as a "failure to act" in the Baltimore Region as a whole, this label would not be determinative. See Thompson, 348 F. Supp. 2d at 459. The Court's decision that HUD's actions fell short of its affirmative obligation to further fair housing was based on evidence of a pattern of actions that perpetuated Region-wide segregation. See generally id. at 456-64. Consequently, a remedy under § 706(2) of the APA may be appropriate because the Plaintiffs' claim against HUD is based upon a pattern or practice of HUD decision-making without adequate consideration of a regional approach to desegregation. NAACP v. HUD, 817 F.2d 149, 160 (1st Cir. 1987) ("An interpretation of § 706(2)(A) that does not include an agency's practice within action, findings, and conclusions, . . . would prevent a court from setting aside those unlawful acts and practices that reveal themselves only over time — that emerge from a pattern — the very sort of unlawfulness that courts . . . often find themselves best suited to handle") (quotations omitted).
Including making decisions choosing among possible courses of action.
The instant lawsuit is, in essence, one to "set aside" HUD's practice in regard to decision making, a practice that constituted an abuse of HUD's discretion. This conclusion accords with the APA, which defines "agency action" to include a "failure to act." 5 U.S.C. § 551(13) (2005). Courts have held that agency failure to act can be reviewed pursuant to the § 706(2) standard. Furthermore, the words "set aside" need not be interpreted narrowly. NAACP, 817 F.2d at 160. The purpose of § 706(2)(A) is to provide for judicial review of agency action and inaction that falls outside the agency's statutory powers. Id.
For example, in J.L. v. Soc. Sec. Admin., 971 F.2d 260, 267-68 (9th Cir. 1992), the court noted that the question of "whether agency action or inaction violates a substantive law" may be reviewed pursuant to § 706(2)(A) (C), and held that "[p]laintiffs who present proof that an agency has violated a statute [whether through agency action or inaction] have perforce shown that it has acted `not in accordance with law' and `in excess of statutory jurisdiction, authority, or limitation.'"Id. (quoting 5 U.S.C. § 706(2)). See also NAACP, 817 F.2d at 160 (noting that "[t]he APA defines `agency action' to include `failure to act,'" and explaining that "[t]he purpose of § 706(2)(A) is to provide for judicial review of agency action and inaction that falls outside its statutory powers" (emphasis added) (quoting 5 U.S.C. § 551(13)); Am. Horse Prot. Ass'n v. Lyng, 812 F.2d 1, 4 (D.C. Cir. 1987) ("[T]his case requires a determination of whether the Secretary's failure to act was `arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law' under 5 U.S.C. § 706(2)(A)" (emphasis added) (quoting 5 U.S.C. § 706(2)).
Review under section 706(2) was not at issue in SUWA; however, the Court mentioned that the "discrete agency action" limitation precluded the kind of broad programmatic attack [it] rejected in Lujan v. Nat'l Wildlife Fed'n. SUWA, 542 U.S. at 64. The instant case involves HUD's "duty to affirmatively further fair housing," which was also at issue inDarst-Webbe Tenant Association Board v. St. Louis Housing Authority. InDarst-Webbe, the Eighth Circuit examined the impact of theSUWA decision on a review of HUD's duty to affirmatively further fair housing, a duty the court concluded involved a broad, general statutory mandate. Darst-Webbe Tenant Association Board v. St. Louis Housing Authority, 417 F.3d 898, 907 (8th Cir. 2005). The Eighth Circuit stated that SUWA "makes clear that our review of HUD's action is not a review to determine whether HUD has, in fact achieved tangible results in the form of furthering opportunities for fair housing. Rather, our review is to assess whether HUD exercised its broad authority in a manner that demonstrates consideration of, and an effort to achieve, such results." Id.
The Plaintiffs in Lujan challenged the land withdrawal review program, which the court concluded was not an "agency action." Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 890-91 (1990).
As held in Darst-Webbe, SUWA does not prevent the Court from reviewing whether HUD has met its statutory duty to affirmatively further fair housing. A remedy may, thus, be proper based upon a conclusion that HUD failed to consider regional approaches in connection with its obligation to further fair housing and is unlikely to do so in the foreseeable future absent judicial compulsion. Thompson, 348 F. Supp. 2d at 464.
2. Final Agency Action
The Federal Defendants contend that the Plaintiffs do not challenge a final agency action and, therefore, the APA precludes review. Fed. Defs.' Mot. for Summ. J. at 19. Section 704 of 5 U.S.C. provides that an APA claim must challenge a "final agency action," a term that includes an agency's failure to act. 5 U.S.C. § 551(13) (2005). Under the final agency action limitation, courts may not supervise an agency's "continuing (and thus constantly changing) operations," but instead may only intervene to correct agency actions or inactions that have "an actual or immediately threatened effect." Lujan, 497 U.S. at 890-94.
Plaintiffs have challenged specific agency decisions and actions taken by HUD in violation of its statutory duty. In finding liability for a violation of § 3608(e)(5), the Court noted that its determination was based on review of many affirmative HUD actions and patterns of activity. See, e.g. Thompson, 348 F. Supp. 2d at 457 (noting the Court's review, with respect to § 3608(e)(5) compliance, of (1) HUD's public housing siting decisions, (2) HUD's use of its resources in Baltimore, and (3) HUD's grant administration); id. at 459 ("In regard to public housing, to the extent that there have been desegregative steps, . . . these efforts have consisted overwhelmingly in placing African-American low-income housing residents in public housing units located in Baltimore City"). Furthermore, the Court concluded that the pattern and practice of HUD's actions in violation of § 3608(e)(5) have had operative effects. Id. at 461 ("[t]he statistical evidence demonstrates that HUD's various housing programs, as implemented, failed to achieve significant desegregation in Baltimore City"). See also id. at 460 ("if HUD had, in fact, fulfilled [its] duty [to affirmatively further fair housing], HUD's actions would have tended to increase, or at least not significantly decrease, the supply of open housing").
The Federal Defendants contend that the Plaintiffs' contentions resemble a challenge rejected by the Third Circuit for lack of final agency action in ADAPT v. U.S. Dep't of Housing and Urban Development, 170 F.3d 381 (3d Cir. 1999). Fed. Defs.' Mot. for Summ. J. at 21. Defendants claim that the Third Circuit's finding was based on what it found to be a "generalized dissatisfaction with the way HUD decides to pay attention to fair housing issues." Therefore, in ADAPT there was no final action for which APA review was available. Id.
However, the ADAPT court concluded that there was no final judgment because the plaintiff had argued that HUD "completely abdicated enforcement of the FHA and regulations . . . but [did] not point to any HUD action demonstrating this." ADAPT, 170 F.3d at 389. Rather, the ADAPT Plaintiffs asked for "broad-based review of general policies regarding investigation [of whether funding recipients continued to follow the HUD requirements] and enforcement [of those requirements]." Id. Accordingly, the instant case does not present the situation before theADAPT court.
The Plaintiffs' claims in ADAPT were barred based primarily on Heckler v. Chaney, 470 U.S. 821 (1985).
Even if the HUD's failure to properly consider a regional approach to public housing in Baltimore City were labeled as a failure to act, a remedy would be possible. HUD's failure to consider regional approaches resulted in actions having meaningful consequences. See, e.g., Thompson, 348 F. Supp. 2d at 461 ("The statistical evidence demonstrates that HUD's various housing programs, as implemented, failed to achieve significant desegregation in Baltimore City"). See also ADAPT, 170 F.3d at 389-90.
HUD is legally required to fulfill its statutory obligations. Yet, the evidence demonstrates HUD's long-standing failure to meet those obligations. Such an abdication of statutory responsibility is precisely the kind of agency failure to act that meets the jurisdictional requirement of a final agency action. Accordingly, the Plaintiffs have challenged final agency action by HUD and the APA does not preclude review.
"HUD has failed adequately to consider regionalization over the past half-century and, absent judicial compulsion, appears most unlikely to do so in the foreseeable future."Thompson, 348 F. Supp. 2d at 464.
See, e.g., Sierra Club v. Thomas, 828 F.2d 783, 793 (D.C. Cir. 1987) ("[I]f an agency is under an unequivocal statutory duty to act, failure so to act constitutes, in effect, an affirmative act that triggers `final agency action' review").
3. Plaintiffs' Constitutional Claim Is Not Constrained by the Limitations of the APA
The Federal Defendants contend that the only cause of action for Plaintiffs' constitutional claim arises under the APA. Thus, that potential constitutional claim would be subject to the same APA limitations described previously. In particular, they argue that (a) Plaintiffs do not have a non-statutory basis for asserting their constitutional claim; (b) sovereign immunity bars any independent constitutional claim; and (c) because Plaintiffs have alternative remedies available, the APA prohibits the assertion of direct constitutional claims.
a. Independent Constitutional Claim
The Federal Defendants contend that the APA is the only source of any cause of action the Plaintiffs might assert with respect to a constitutional violation. Therefore, they argue, the APA limitations discussed previously apply to both the statutory claim and to any constitutional claim. However, the Plaintiffs have presented a potentially valid constitutional claim under the Fifth Amendment, independent of the APA.
"No authority squarely holds that agency action allegedly violative of the Fifth Amendment is reviewable only under the APA." Little Earth of United Tribes, Inc. v. HUD, 675 F. Supp. 497, 531 (D. Minn. 1987), aff'd, 878 F.2d 236 (8th Cir. 1989),cert. denied, 494 U.S. 1078 (1990). Furthermore, it appears that neither the APA or Title VIII preclude an independent constitutional claim against HUD. Rather, case law suggests that the Court may find a violation of Title VIII of the Fair Housing Act as well as an independent Fifth Amendment violation. See Clients' Council v. Pierce, 711 F.2d 1406, 1425 (8th Cir. 1983) (finding HUD liable for both a violation of the Fifth Amendment and of Title VIII of the Civil Rights Act of 1968); Gautreaux v. Romney, 448 F.2d 731, 740 (7th Cir. 1971) (holding that HUD violated the Due Process Clause of the Fifth Amendment and also violated Section 601 of the Civil Rights Act of 1964). Therefore, HUD may be held liable both for a statutory and constitutional violation.
An action under the Fifth Amendment may be brought by an individual alleging racial segregation on the part of a federal agency. Bolling v. Sharpe, 347 U.S. 497, 499-500 (1954) (racial segregation is a denial of the due process of law guaranteed by the Fifth Amendment). Constitutional liability may arise from purposeful, pervasive discrimination that confers upon governments an affirmative duty to remedy past wrongs. See Brown v. Bd. of Educ. of Topeka, Kan., 349 U.S. 294, 299-300 (1955) ("Brown II"). As the Court stated in the Liability Decision, "Brown II certainly imposes upon formerly discriminating government entities obligations to disestablish segregation in good faith, fairly and equitably, with due consideration of `local conditions' and with `practical flexibility,' `reconciling public and private needs' yet acting promptly and reasonably, to eliminate the vestiges of discrimination and segregation. Brown II, 349 U.S. at 299-301."Thompson, 348 F. Supp. 2d at 414.
"There appears to be no basis to limit the disestablishment and non-obstruction duties . . . to the context of public schools. Indeed, as is the case with public schools, the vestiges of public housing segregation can adversely impact numerous members of a disadvantaged class for prolonged periods of time, thus warranting the imposition on offending state actors of obligations to alleviate such burdens." Thompson, 348 F. Supp. 2d at 413-14 (quotations omitted).
Liability based upon the duty to eliminate the vestiges ofpast de jure discrimination differs from liability based upon a present discriminatory action. "While an affirmative discriminatory act must be purposeful, there is no similar "intent" element concerning the abdication of duties stemming from past discriminatory acts. See Dayton Bd. of Educ. v. Brinkman, 443 U.S. 526, 538 (1979) ("the measure of the post-Brown I conduct of a school board under an unsatisfied duty . . . is the effectiveness, not the purpose, of [its] actions")."Thompson, 348 F. Supp. 2d at 413. Therefore, Plaintiffs may assert an independent cause of action under the Fifth Amendment. If HUD failed to meet its constitutional obligation to remove vestiges of prior de jure segregation from the Baltimore Region there could be liability even without a present discriminatory intent.
In the remedial phase trial, the question of the Federal Defendants' intent will be considered. Plaintiffs may present evidence as to HUD's participation in purposeful and pervasive discrimination prior to the Open Period. It is this prior intentional discrimination that created the duty for HUD to remove vestiges of that prior discrimination during the Open Period.
The term "Open Period" refers to that period which is open for limitations purposes. Thompson, 348 F. Supp. 2d at 424. "The Federal Defendants can be held liable for action or inaction within a six year period from January 31, 1989 to January 31, 1995." Id.
b. Sovereign Immunity Does Not Bar Independent Constitutional Claims
The Federal Defendants state that in the Liability Decision the Court cited Larson v. Domestic Foreign Commerce Corp., 337 U.S. 682 (1949) and Bivens v. Six Unknown Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971) as support for the idea that Plaintiffs could sue directly under the Constitution. Fed. Defs.' Mot. for Summ. J. at 27. Plaintiffs have conceded that they do not have a constitutional claim based on Bivens. With respect to Larson, the Federal Defendants contend that Larson merely created a legal fiction that was superseded when the APA was amended by section 702. Id. Further, they argue that the Larson exception did not give a right to sue directly under the Constitution. Id.
"It is settled that provisions of the U.S. Constitution setting forth individual rights generally also empower individuals to sue Federal officers and agencies for violations of these rights, particularly if (as here) the relief sought is injunctive. Larson v. Domestic Foreign Commerce Corp., 337 U.S. 682, 93 L. Ed. 1628, 69 S. Ct. 1457 (1949). See also, Bivens v. Six Unknown Agents of the Federal Bureau of Narcotics, 403 U.S. 388, 29 L. Ed. 2d 619, 91 S. Ct. 1999 (1971)." Thompson, 348 F. Supp. 2d at 420.
"Plaintiffs are not seeking to expand Bivens. But rather, the Plaintiffs have an independent constitutional cause of action directly against the Federal Defendants apart fromBivens." Pls.' Resp. to Fed. Defs.' Mot. for Summ. J. at 28.
The Court cited Larson for the proposition that federal agencies and their officers could be sued for unconstitutional acts. The key to Larson is its effect on sovereign immunity. While Larson created an exception to sovereign immunity when federal officers acted ultra vires, Section 702 of the APA provides a general waiver of sovereign immunity for all unconstitutional acts where injunctive relief is requested. See id. at 689 (stating that where an officer's acts "are ultra vires his authority" he "may be made the object of specific relief"). See also Schnapper Public Affairs Press v. Foley, 667 F.2d 102, 107 (D.C. Cir. 1981) (quoting the legislative history of 5 U.S.C. § 702 (1976) which stated that the statute was intended "to eliminate the defense of sovereign immunity with respect to any action in a court of the United States seeking relief other than money damages and based on the assertion of unlawful official action by a Federal officer . . .") (quoting S. Rep. No. 996, 94th Cong., 2d Sess. at 2 (1976)). Accordingly, the Section 702 waiver eliminates the need for reliance upon the Larson exceptions to sovereign immunity by waiving sovereign immunity in its entirety for unconstitutional acts. However, the fact that Section 702 makes the Larson sovereign immunity exceptions no longer necessary does not mean that all constitutional challenges must take the form of APA claims.
"The question presented to the courts below was whether such an injunction was barred by the sovereign's immunity from suit." Larson, 337 U.S. at 686.
In fact, as held in the Memorandum and Order issued August 31, 2001, a majority of courts considering the matter have concluded that the waiver of sovereign immunity in Section 702 of the APA applies to all actions for non-monetary relief brought against agencies. Mem. and Order or Aug. 31, 2001 [Paper 277] at 8-12. The waiver is not confined only to actions brought specifically under the APA. See, e.g., Rothe Dev. Corp. v. U.S. Dep't of Defense, 194 F.3d 622, 624 (5th Cir. 1999) (§ 702 waives immunity for declaratory and injunctive claims); A.E. Finley Assoc. v. United States, 898 F.2d 1165, 1167 (6th Cir. 1990) (general waiver under § 702 applies to all actions for non-monetary relief); Presbyterian Church (U.S.A.) V. United States, 870 F.2d 518, 524 (9th Cir. 1989) (holding that § 702 waives sovereign immunity for a church's non-monetary claims arising out of the Constitution); Hodges v. Shalala, 121 F. Supp. 2d 854, 866 (D.S.C. 2000) ("Congress has expressly waived federal immunity. At least one member of the Supreme Court has observed that 5 U.S.C. § 702 . . . waives the immunity of the United States in actions for relief other than money damages." . . . The waiver is not limited to those suits that are brought under the Administrative Procedure Act ("APA")").
Section 702 of the APA provides that:
A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof. An action in a court of the United States seeking relief other than money damages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity under color of legal authority shall not be dismissed nor relief therein be denied on the ground that it is against the United States or that the United States is an indispensable party . . . [Section 702 does not] (1) affect other limitations on judicial review or the power or duty of the court to dismiss any action or deny relief on any other appropriate legal or equitable ground; or (2) confer authority to grant relief if any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought.5 U.S.C. § 702 (2005).
Accordingly, there is a basis for Plaintiffs' potential Fifth Amendment claim independent of the APA, since the remedy Plaintiffs seek is injunctive and sovereign immunity does not bar their claim.
The Federal Defendants also argue that Plaintiffs are foreclosed from seeking injunctive relief that "restrain[s] the Government from acting, or compel[s] it to act." Fed. Defs.' Mot. for Summ. J. at 29. However, as discussed in this opinion, the Court is required to "tailor the scope of the remedy to fit the nature and extent of the constitutional violation." Hills v. Gautreaux, 425 U.S. 284, 293 (1976) (quotations omitted) (authorizing a remedial decree).
c. Alternative Remedies
The Federal Defendants contend that Plaintiffs' constitutional claims are barred because alternative remedies are available. Fed. Defs.' Mot. for Summ. J. at 30-31. However, the Federal "Defendants cite no authority for the proposition that . . . the APA [was] exclusively intended to be [an] exclusive remed[y], and this Court does not find that statutory text or case law supports Defendants' assertions." Mem. and Order of Aug. 31, 2001 [Paper 277] at 22 n. 22.
Defendants further argue that HUD action to fulfill the mandate to affirmatively further fair housing is an unreviewable act of agency discretion according to Heckler v. Chaney, 470 U.S. 821 (1985). Fed. Defs.' Mot. for Summ. J. at 30-31. WhileHeckler sets forth the general rule that an agency has absolute discretion over whether and how to exercise its enforcement authority, the Court has already determined that Heckler is "inapposite" as to Plaintiffs' statutory claims. Thompson, 348 F. Supp. 2d at 421. See also Heckler, 470 U.S. at 832. The Court's conclusion was based on the fact that HUD, whether acting alone or in conjunction with local housing authorities, has an affirmative role in local housing policy and if HUD's actions violate Federal civil rights laws they "threaten individual liberties." Id. at 422. Furthermore, the presumption in favor of judicial review is particularly strong with respect to constitutional claims. Regional Mgmt. Corp. v. Legal Servs. Corp., 186 F.3d 457, 461 n. 3 (4th Cir. 1999) (citing Heckler, 470 U.S. at 838). Accordingly, Heckler does not bar the Court from reviewing Plaintiffs' potential Fifth Amendment claim.
In Heckler v. Chaney, the Supreme Court precluded APA scrutiny of the Food and Drug Administration's failure to take investigatory and enforcement measures to prevent perceived drug use violations. The court held that an agency's decision not to take enforcement action should be presumed immune from judicial review under the APA. Heckler v. Chaney, 470 U.S. 821, 832 (1985).
C. Available Remedies
The Federal Defendants argue that no remedy other than a remand of the case to HUD is available to Plaintiffs because this case was brought to challenge administrative decision-making by the federal government. Fed. Defs.' Mot. for Summ. J. at 31. It is difficult to understand precisely what the Federal Defendants mean by referring to a "remand" because the instant case did not originate as a HUD administrative proceeding. There is nothing to "remand" to HUD. The Court will assume that the Federal Defendants are contending that there is no judicial power to compel HUD to do, or consider, anything at all.
Nothing in the APA or Fair Housing Act suggests that a federal court is powerless to remedy a violation of the Fair Housing Act. Rather, Section 706(2) of the APA specifically empowers the Court to "hold unlawful and set aside" agency action that is arbitrary, capricious, or in excess of statutory jurisdiction. 5 U.S.C. § 706(2)(A) (2005). As the Court has recognized, "in devising an appropriate remedy, the words `set aside' need not be interpreted narrowly." Thompson, 348 F. Supp. 2d at 464. See also NAACP, 817 F.2d at 160. Furthermore, once a court concludes that an agency failed to remedy past wrongs, the court is required to fashion a remedy that ensures future compliance with the Constitution.Gautreaux, 425 U.S. at 293-94 ("Once a constitutional violation is found, a federal court is required to tailor the scope of the remedy to fit the nature and extent of the constitutional violation") (quotations omitted).
The APA provides for "any applicable form of legal action, including actions for declaratory judgments or writs of prohibitory or mandatory injunction." 5 U.S.C. § 703 (2005).
Federal agencies are not immune from the federal court's traditional equitable powers. "While the court must act within the bounds of the statute and without intruding upon the administrative province, it may adjust its relief to the exigencies of the case in accordance with the equitable principles governing judicial action." Ford Motor Co. v. NLRB, 305 U.S. 364, 373 (1939). The Court has concluded that HUD failed to fulfill its duty to affirmatively further fair housing and that it has the power to provide an appropriate remedy. See Darst-Webbe Tenant Ass'n Bd. v. St. Louis Housing Auth., 339 F.3d 702, 713-14 (8th Cir. 2003) ("If the district court determines that HUD abused its discretion, the district court has the authority to enjoin the use of HOPE VI grand funds or Section 108 loan guarantees until HUD satisfies the court that it has taken appropriate steps to affirmatively further fair housing"). A mere precatory statement expressing the hope that HUD would make future decisions in light of the Court's opinion is hardly adequate when "HUD has failed to consider regionalization over the past half-century," and seems likely to continue to ignore its statutory obligations "absent judicial compulsion."Thompson, 348 F. Supp. 2d at 464. Accordingly, the Court concludes that it has discretion to exercise its equitable powers to tailor a remedy in the instant case.
Many courts have provided similar injunctive relief as a remedy for statutory and constitutional violations. For example, in NAACP v. Kemp, the district court "compell[ed] HUD to require private landlords of HUD-assisted housing throughout the metropolitan area to participate in an affirmative marketing program targeting low income minorities." 721 F. Supp. 361, 368 (D. Mass. 1989). The court also ordered HUD to "impose a series of Fair Housing Conditions" on recipients of federal funding.Id. Similarly, in Young v. Pierce, the district court refused to commit any remedies solely to HUD's judgment and discretion and instead issued an Interim Injunction ordering "HUD to use its power, authority, and discretion in a manner consistent with, and supportive of, established federal housing policy." Young, 685 F. Supp. 975, 981 (E.D. Tex. 1988); see also Young v. Pierce, 685 F. Supp. 986 (E.D. Tex. 1988) (Interim Injunction published separately) (directing HUD, inter alia, to create and develop desegregative housing alternatives through its housing programs, to comply with various reporting and monitoring requirements, and to require that each local PHA adopt a specific tenant selection and assignment plan).
D. System-Wide Injunctive Relief as a Constitutional Remedy
The Federal Defendants argue that there is no appropriate remedy for the Plaintiffs' constitutional claim that their constitutional rights were violated because HUD failed to eliminate vestiges of prior de jure segregation in the public housing system. This constitutional violation occurred, in part, because "HUD failed adequately to consider policy options whereby low-income African-American families from Baltimore City might be afforded housing opportunities beyond the City limits." Id. at 443. See also United States v. Fordice, 505 U.S. 717, 731-32 (1992) (discussing how a governmental actor's responsibility for segregation will remain in violation of the Equal Protection Clause until the affirmative duty to eliminate the vestiges of discrimination in a prior de jure segregated system have been discharged).
In Thompson, the Court stated that:
Federal Defendants failed to take adequate action to disestablish the vestiges of the discrimination they had participated in imposing. Specifically, in administering its housing policies during the Open Period, HUD failed adequately to consider policy options whereby low-income African-American families from Baltimore City might be afforded housing opportunities beyond the City limits. Indeed, The Federal Defendants did not improve, and may have worsened, the racially discriminatory situation by making no more than token efforts to take a regional, rather than merely a city limited, approach to the siting of housing for members of the Plaintiff class. . . . [T]he failure adequately to take a regional approach to the desegregation of public housing in the region that included Baltimore City violated the Fair Housing Act and requires consideration of appropriate remedial action by the Court.Thompson, 348 F. Supp. 2d at 443.
The Federal Defendants contend that the remedy for such a constitutional claim must be limited to dismantling the vestiges of prior discrimination; thus, the Plaintiffs must show a link between those vestiges and the place where the prior de jure segregation occurred. Essentially, the Federal Defendants argue that the remedy cannot be broader than the original segregation. They contend, therefore, that since there was no showing that the original segregation existed outside of Baltimore City, the remedy can only involve actions within Baltimore City. Accordingly, they argue, the Court could not compel HUD to consider the regional impact of its public housing decisions.
Defendants argue that Missouri v. Jenkins forecloses the possibility of a system-wide remedy because "[a] district court seeking to remedy an intradistrict violation that has `directly caused' significant interdistrict effects exceeds its remedial authority if it orders a remedy with an interdistrict purpose." Fed. Defs.' Mot. for Summ. J. at 37 (quoting Jenkins, 515 U.S. 70, 97 (1995)).
The Federal Defendants' argument is based upon the false premise that the original segregation was limited to Baltimore City. Indeed, the essence of the segregation was to keep African-American residents of public housing in the Baltimore Region concentrated in black ghettos within Baltimore City and out of white neighborhoods in the city and the counties. The absence of a substantial number of African-American public housing residents in the counties is an indication of the presence, not the absence, of race based segregation in the Baltimore Region.
If the Court finds that HUD failed to meet a constitutional obligation to remove vestiges of prior segregation of African Americans in areas of Baltimore City, it is distinctly possible that relief extending beyond the city borders would be warranted. See Hills v. Gautreaux, 425 U.S. 284 (1976) (stating that a metropolitan-wide remedy is permissible even if it extends beyond the municipal boundaries of the jurisdiction where the unconstitutionally segregated public housing is located). In the instant case, a remedy that has effects beyond the Baltimore City border may be appropriate considering HUD's authority and jurisdiction include the entire Baltimore Region.
Both Gautreaux and Jenkins acknowledged that imposing system-wide remedies on federal agencies like HUD does not implicate the same federalism concerns that arise when a court issues an order against a state in school desegregation cases.See Jenkins, 515 U.S. at 98; Gautreaux, 425 U.S. at 28 n. 13.
HUD itself has defined the housing market to include metropolitan areas. Jenkins, 515 U.S. at 96-97 (the "relevant geographic area" is the entire regional housing market). See also Gautreaux, 425 U.S. at 299 (noting that HUD itself defines a housing market area as "the geographic area within which all dwelling units . . . are in competition with one another as alternatives for the users of housing" (internal citations omitted)).
E. The "Unitary Status" Theory
In school desegregation cases courts have referred to a "unitary status" concept whereby, if such status has been achieved, there may be no further vestiges of prior discrimination. See, e.g., Green v. County School Bd. of New Kent County, 391 U.S. 430 (1968); Riddick by Riddick v. School Bd. of City of Norfolk, 784 F.2d 521 (4th Cir. 1986). A school system has reached "unitary status" when "the [school] Board has complied in good faith with the desegregation decree . . ., and the vestiges of past discrimination have been eliminated to the extent practicable." See Board of Educ. v. Dowell, 498 U.S. 237, 249-50 (1991). While the Supreme Court has not defined the term "unitary status," the Fourth Circuit stated that "a school system must be declared unitary when it no longer discriminates between children on the basis of race." Belk v. Charlotte-Mecklenburg Bd. of Educ., 269 F.3d 305, 318 (4th Cir. 2001).
The word "unitary" denotes a desegregated school system, contrasting the dual, segregated systems that "Brown I held unconstitutional and a year later Brown II held must be abolished." Green, 391 U.S. at 435.
The Supreme Court warned that "we must be cautious not to attribute to the term ["unitary"] a utility it does not have. The term `unitary' does not confine the discretion and authority of the District Court in a way that departs from traditional equitable principles." Freeman v. Pitts, 503 U.S. 467, 487 (1992).
The Court will assume, without deciding, that the "unitary status" concept is applicable in the instant housing discrimination case. Even so, there are genuine issues of fact with regard to the question of whether HUD's functioning vis-a-vis public housing in the Baltimore Region has achieved "unitary status" or, in other words, whether HUD has done all it could to eliminate the vestiges of prior race based segregation.
The Federal Defendants characterize this Court's findings in the Liability Decision as "tantamount to a `unitary status' determination." Defs.' Mot. for Summ. J. at 36. However, the Court made no such finding and reached an opposite conclusion in regard to HUD's actions in the Baltimore Region as a whole. A system in "unitary status" means that vestiges of past discrimination have been eliminated to the extent practicable.See Dowell, 498 U.S. at 249-50. This is by no means the situation in what HUD itself defines as the Baltimore Region. Courts evaluate whether the affirmative duty to disestablish segregation has been discharged by examining whether the governmental actor has met its duty with good faith and eliminated the vestiges of discrimination to the "extent practicable." Belk, 269 F.3d at 318; Dowell, 498 U.S. at 249.See also Keyes v. School District, 413 U.S. 189, 240 (1973) ("Where desegregative steps are possible . . . school authorities must pursue them."); Green, 391 U.S. at 439 (in determining whether a governmental actor has discharged the duty to disestablish, courts must consider the efficacy of actions taken in light of feasible and effective alternatives). A finding that the Local Defendants may have done all that they could to effect desegregation is not a finding that HUD has met the same standard.
The Federal Defendants are not entitled to summary judgment on a "unitary status" theory.
III. CONCLUSION
For the foregoing reasons:
1. The Federal Defendants' Motion for Summary Judgment [Paper 693] is DENIED.
2. The Federal Defendants shall be permitted to reopen the record to present evidence and arguments pertaining to liability under § 3608(e)(5) of the Fair Housing Act pursuant to further Order.
SO ORDERED.