Hawkins v. HUD ( 2022 )

Case: 20-20281 Document: 00516299452 Page: 1 Date Filed: 04/28/2022
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
April 28, 2022
No. 20-20281
Lyle W. Cayce
Clerk
Kenneth Wayne Hawkins; Cheryl Brown Potts;
Kimanisha Myles; Reba Curren Jeffery; Stephanie Winn;
Loretta Gulley; Jeannie Ware; Jamie Wasicek;
Shealisha Adams,
Plaintiffs—Appellants,
versus
The United States Department of Housing and Urban
Development,
Defendant—Appellee.
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 2:18-CV-3052
ON PETITION FOR REHEARING
Before Wiener, Dennis, and Duncan, Circuit Judges.
Wiener, Circuit Judge:*
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 20-20281 Document: 00516299452 Page: 2 Date Filed: 04/28/2022
IT IS ORDERED that the petition for rehearing is DENIED. The
opinion, filed October 13, 2021, is WITHDRAWN, and the following is
SUBSTITUTED:
Plaintiffs-Appellants (“Tenants”) alleged that they were living in
substandard conditions in a Houston, Texas “Section 8” housing project.
They sought relocation assistance from the Department of Housing and
Urban Development (“HUD”), insisting that HUD was obliged under
federal law to provide such assistance. When HUD chose to continue its
contract with the housing project and declined to offer Tenants relocation
assistance, they sued HUD to obtain it. Tenants also alleged intentional
discrimination under the Fifth Amendment’s equal protection component.
We agree with the district court that we lack jurisdiction for Tenants’
Administrative Procedure Act (“APA”) and Fair Housing Act (“FHA”)
claims because Tenants have not alleged a final agency action that is
reviewable. We also agree on the merits that Tenants have failed to state a
claim for which relief can be granted on their Fifth Amendment equal
protection claim.
I.
Background
Tenants are African-Americans who rent apartments in Coppertree
Village, a privately owned complex in Houston. HUD’s relationship with
Coppertree dates back to the early 1980s, when the agency first signed a
housing assistant program (“HAP”) contract with Coppertree’s then-
owner. HUD’s most recent renewal of its contract relationship with
Coppertree was in 2013. HUD approved assignment of the contract to
Coppertree’s current owner in 2015. The current owner was originally a
named defendant in this lawsuit but has been dismissed voluntarily.
The HAP contract requires the owner to maintain the rental units in
a “decent, safe, and sanitary” condition. HUD regulations provide that the
Case: 20-20281 Document: 00516299452 Page: 3 Date Filed: 04/28/2022
agency “will inspect” Section 8 housing “at least annually” and “at such
other times as HUD may determine to be necessary to assure that the owner
is meeting his or her obligation to maintain the units and the related facilities
in decent, safe, and sanitary condition.”1
Two HUD inspections (in June and September 2018) revealed
“serious deficiencies” in many of Coppertree’s rental units and in the
property’s common features. These wide-ranging problems included
infestations of cockroaches and spiders, leaky roofs that spawned colonies of
mold, widespread lack of operable locks, and missing or nonfunctioning
smoke detectors. As a result, HUD issued two Notices of Default (“NOD”)
to Coppertree’s owner. The NODs instructed the owner to take corrective
action and warned that failure to comply could result in HUD exercising
“any and all available remedies.” In response, Coppertree’s owner
submitted a survey of the property and began to undertake repairs. The
parties disagree about whether the repair efforts have resolved the many
issues identified in the 2018 inspections.
Tenants criticized HUD’s decision to maintain the HAP contract
with Coppertree and the agency’s focus on correcting the deficiencies
revealed by the inspections. Tenants also contended that, because
Coppertree remained in a state of disrepair, HUD was obligated to provide
“assistance for relocation” that would help them move elsewhere. They
specifically alleged that HUD’s failure to issue vouchers to them was
arbitrary and capricious under the APA.2 Tenants further alleged that
HUD’s inaction amounted to race-based discrimination in violation of the
Fair Housing Act3 and the equal protection component of the Fifth
1
8 C.F.R. § 886.323(d).
2
5 U.S.C. § 701 et seq.
3
42 U.S.C. § 3601 et seq.
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No. 20-20281
Amendment.4 Contrasting Coppertree with Section 8 properties elsewhere
in Houston, Tenants alleged that HUD’s failure to provide Tenant
Protection Vouchers was done with the discriminatory motive of
“maintain[ing] racial segregation and . . . disadvantag[ing] a group of
minority households.”
HUD moved to dismiss Tenants’ claims under Rules 12(b)(1) and
12(b)(6) of the Federal Rules of Civil Procedure. The district court granted
HUD’s motion and dismissed the Tenants’ claims. We affirm.
II.
Standard of Review
We review a district court’s grant of a motion to dismiss de novo.5 “To
survive a motion to dismiss, a complaint must contain sufficient factual
matter which, when taken as true, states a claim to relief that is plausible on
its face.”6 “A claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”7
A motion to dismiss that contests jurisdiction should be granted if
“the court lacks the statutory or constitutional power to adjudicate the
case.”8 The burden lies with the party asserting jurisdiction to establish “that
jurisdiction does in fact exist.”9
4
See Washington v. Davis, 426 U.S. 229 (1976).
5
Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001).
6
Cicalese v. Univ. of Tex. Med. Branch, 924 F.3d 762, 765 (5th Cir. 2019) (cleaned
up).
7
Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).
8
Home Builders Ass’n of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir.
1998) (cleaned up).
9
Ramming, 281 F.3d at 161.
4
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III.
Final Agency Action
The APA provides judicial review of “final agency action” only. 10 The
Act defines “agency action” to include the “denial of relief,” a “failure to
act,” and a “sanction,” which includes “withholding of relief.” 11 The FHA
has no provision for review of agency action, so Tenants’ FHA claim depends
on the APA’s judicial-review provisions.12 Our jurisdictional analysis
therefore pertains equally to Tenants’ claims under the APA13 and the
FHA.14
As a general matter, two conditions must be satisfied for agency
action to be ‘final’: First, the action must mark the
‘consummation’ of the agency’s decisionmaking process—it
must not be of a merely tentative or interlocutory nature. And
second, the action must be one by which ‘rights or obligations
have been determined,’ or from which ‘legal consequences will
flow.’15
Tenants have not adequately alleged a specific HUD action that this
court can review. They only contend that there is nothing further HUD
would have to do to issue relocation assistance, yet the agency has not done
so. HUD’s continued work to salvage its contract with Coppertree Village
10
5 U.S.C. § 704; see, e.g., Veldhoen v. U.S. Coast Guard, 35 F.3d 222, 225 (5th Cir.
1994).
11
5 U.S.C. § 551(10)(B), (13); see also id. § 701(b)(2) (incorporating these
definitions into the judicial review chapter).
12
See Godwin v. Sec’y of Hous. & Urb. Dev., 356 F.3d 310, 312 (D.C. Cir. 2004)
(FHA confers no cause of action against HUD); see also McCardell v. U.S. Dep’t of Hous. &
Urb. Dev., 794 F.3d 510, 522 (5th Cir. 2015) (FHA does not waive state sovereign
immunity).
13
See 5 U.S.C. § 706(2)(A).
14
See 42 U.S.C. § 3608(e)(5).
15
Bennett v. Spear, 520 U.S. 154, 177–78 (1997) (citations omitted).
5
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does not prevent the agency from issuing relocation assistance. There is,
therefore, no “‘consummation’ of the agency’s decisionmaking process”
that this court can review. The district court correctly determined that it
lacked jurisdiction over Tenants’ APA and FHA claims.
IV.
Racial and Ethnic Discrimination
Tenants also claim that HUD’s withholding of assistance constitutes
intentional discrimination on the basis of race and ethnicity, in violation of
the Fifth Amendment to the Constitution. “[T]he Due Process Clause of the
Fifth Amendment contains an equal protection component prohibiting the
United States from invidiously discriminating between individuals or
groups.”16 HUD concedes that the APA’s review provisions do not foreclose
review of this constitutional claim.17
“Proof of racially discriminatory intent or purpose is required” to
show an equal protection violation.18 Discriminatory purpose “implies that
the decisionmaker . . . selected or reaffirmed a particular course of action at
least in part ‘because of,’ not merely ‘in spite of,’ its adverse effects upon an
identifiable group.”19 Tenants may rely on circumstantial evidence (or
allegations of such, at the pleading stage) to show discriminatory purpose.
“Determining whether invidious discriminatory purpose was a motivating
factor demands a sensitive inquiry into such circumstantial and direct
evidence of intent as may be available.”20
16
Washington, 426 U.S. at 239.
17
See Webster v. Doe, 486 U.S. 592, 603–05 (1988) (holding § 701(a)(2) barred
statutory but not constitutional claims of discrimination).
18
Vill. of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 265 (1977).
19
Pers. Adm’r of Mass. v. Feeney, 442 U.S. 256, 279 (1979).
20
Arlington Heights, 429 U.S. at 266; see also Veasey v. Abbott, 830 F.3d 216, 231
(5th Cir. 2016) (listing types of evidence that may support discrimination claim).
6
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Tenants’ allegations of intentional discrimination rely on the fact that
the housing units HUD subsidizes at Coppertree are in worse condition than
HUD-subsidized units elsewhere in the Houston area. They allege that
“Coppertree Village is located in a 0% White non-Hispanic census tract.
Coppertree Village’ [sic] units are 87% occupied by Black or African
American households.” Tenants further allege that HUD subsidizes housing
in disproportionately white areas that does meet minimum standards, with
comparable rent but vastly higher quality. Tenants reference as comparators
several projects restricted to elderly tenants: six in the Woodlands, outside
Houston, and two within the city limits—the only two out of forty-four
located, in majority-white census districts. HUD does not own or operate
those projects, but subsidizes tenants living there.
HUD allegedly knows about these disparities but continues to make
decisions that Tenants claim denies them relocation assistance to which they
are entitled. Tenants characterize this disparate treatment as a “substantive
departure” from HUD’s mission,21 and thus probative of discriminatory
intent. We disagree.
These allegations by Tenants fail to state a plausible claim of
intentional racial discrimination. Even when taken as true, they show at most
that HUD is aware of varying conditions in the numerous housing projects
that it subsidizes in the Houston area. In no way, however, do these
allegations support an inference that HUD has made any decision “‘because
of,’ not merely ‘in spite of,’” different conditions.22 Tenants do not allege
any procedural irregularities in HUD’s enforcement actions at Coppertree
nor in its consideration of relocation vouchers for Coppertree residents.
Tenants also fail to allege that HUD has provided relocation assistance to any
similarly situated non-minority occupants. Tenants have failed to raise a
21
Cf. Veasey, 830 F.3d at 231.
22
Feeney, 442 U.S. at 279.
7
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plausible inference of discriminatory purpose, so the district court correctly
dismissed their Fifth Amendment claim.
AFFIRMED.
8