Texas Low Income Housing Information Service v. Carson ( 2019 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
TEXAS LOW INCOME HOUSING
INFORMATION SERVICE,
Plaintiff,
v.
Civil Action No. 18-644 (TJK)
BEN CARSON, Secretary of Housing and
Urban Development, in his official capacity,
and U.S. DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT,
Defendants.
MEMORANDUM OPINION
Texas Housers, a nonprofit dedicated to promoting affordable housing, brings this case
against the Department of Housing and Urban Development (HUD) and its Secretary for their
alleged failure to enforce federal civil rights laws against the City of Houston. Defendants have
moved to dismiss the complaint, arguing that Texas Housers lacks standing because, among
other reasons, (1) it lacks a legally cognizable injury, and (2) any injury it did suffer is not
redressable because it was caused by Houston, as opposed to HUD. For the reasons discussed
below, the Court agrees that Texas Housers lacks standing. The Court will therefore grant
Defendants’ motion and dismiss the complaint.
I. Background
A. Statutory and Regulatory Background
1. Title VI of the Civil Rights Act of 1964
Under Title VI of the Civil Rights Act of 1964, “[n]o person in the United States shall, on
the ground of race, color, or national origin, be excluded from participation in, be denied the
benefits of, or be subjected to discrimination under any program or activity receiving Federal
financial assistance.” 42 U.S.C. § 2000d. An agency empowered to provide financial assistance
as part of a federal program or activity, such as HUD, must enforce this dictate “with respect to
such program or activity by issuing rules, regulations, or orders of general applicability” and may
terminate or refuse to grant financial assistance “to any recipient as to whom there has been an
express finding on the record, after an opportunity for a hearing, of a failure to comply with such
requirement[s].” 42 U.S.C. § 2000d-1. Even so, “no such action shall be taken until the
department or agency concerned has advised the appropriate person or persons of the failure to
comply with the requirement and has determined that compliance cannot be secured by voluntary
means.” Id.
Under HUD’s regulations, if an investigation reveals a failure to comply with
nondiscrimination requirements, “the matter will be resolved by informal means whenever
possible.” 24 C.F.R. § 1.7. Only if “noncompliance cannot be corrected by informal means”
may HUD effect compliance “by the suspension or termination of or refusal to grant or to
continue Federal financial assistance.” 24 C.F.R. § 1.8.
2. Title VIII of the Civil Rights Act of 1968 (Fair Housing Act)
Title VIII of the Civil Rights Act of 1968, commonly known as the Fair Housing Act, 42
U.S.C. §§ 3601 et seq., prohibits discrimination in housing on the basis of race, color, religion,
sex, national origin, familial status, or disability. The Act provides that “[a]ll executive
departments and agencies shall administer their programs and activities relating to housing and
urban development . . . in a manner affirmatively to further the purposes of this subchapter.” 42
U.S.C. § 3608(d). The Act also provides that HUD must “administer the programs and activities
relating to housing and urban development in a manner affirmatively to further the policies of
this subchapter,” 42 U.S.C. § 3608(e)(5), “a requirement known as the ‘affirmatively further fair
housing,’ or ‘AFFH,’ requirement.” Nat’l Fair Hous. All. v. Carson, 330 F. Supp. 3d 14, 24–25
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(D.D.C. 2018). The Act provides a right to sue in federal courts for any “aggrieved person”
alleging a “[d]iscriminatory housing practice,” 42 U.S.C. § 3613(a). The Act does not provide a
cause of action to enforce § 3608, but federal courts have the power to review claims that HUD
has failed to administer its programs in a manner that affirmatively furthers fair housing, Nat’l
Fair Hous. All., 330 F. Supp. 3d at 25.
3. Housing and Community Development Act of 1974 and Community
Development Block Grant Disaster Recovery Funds
The Housing and Community Development Act of 1974 (HCDA), as amended, 42 U.S.C.
§ 5301 et seq., established a program through which HUD provides community development
block grants to state and local governments. The Community Development Block Grant
Program (CDBG), 42 U.S.C. § 5301 et seq., awards annual grants to provide housing and
“expand[] economic opportunities, principally for persons of low and moderate income.” 42
U.S.C. § 5301(c). To receive certain funds, including CDBG funds, a jurisdiction must regularly
submit a consolidated plan to HUD that describes an assessment of housing needs in the
jurisdiction, the strategic plan to address those needs, and how the funds will be used. 24 C.F.R.
§§ 91.2(a), 91.15. In each plan, block grant recipients must also certify that they will comply
with the requirements of the program, including the obligation to affirmatively further fair
housing. 42 U.S.C. §§ 5304(b)(2), 12705(b). Along with annual block grants, HUD oversees
the distribution of Community Development Block Grant Disaster Recovery (CDBG-DR)
funding to restore infrastructure and housing and provide other long-term recovery needs to
jurisdictions struck by major disasters. See, e.g., 81 Fed. Reg. 39,687, 36,692 (June 17, 2016).
As part of its certification, between 1995 and 2015, Houston had to “conduct an analysis
to identify impediments to fair housing choice within the jurisdiction [referred to as an ‘AI’],
take appropriate actions to overcome the effects of any impediments identified through that
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analysis, and maintain records reflecting the analysis and actions in this regard.” 24 C.F.R.
§ 91.225 (2014). In 2015, HUD promulgated a regulation requiring that Houston and other
jurisdictions complete an Assessment of Fair Housing instead of an AI, which also required the
jurisdictions to certify that they will “take no action that is materially inconsistent with its
obligation to affirmatively further fair housing.” 24 C.F.R. § 91.225(a)(1).
B. Factual Background
1. Texas Low Income Housing Information Service
The Court accepts as true the allegations in the complaint. Texas Low Income Housing
Information Service (“Texas Housers”) is a nonprofit organization dedicated to promoting safe,
affordable housing in quality neighborhoods for families of color in Houston and the State of
Texas. ECF No. 1 (“Compl.”) ¶¶ 2, 118. “Texas Housers carries out its mission by researching
and evaluating low-income housing and community development programs, needs, and issues
throughout Texas to discover solutions; promoting public understanding of and support for the
same; and organizing and empowering low-income people and communities to take the initiative
to solve their own housing and community development problems.” Id. ¶ 119. Over the last
decade, Texas Housers has engaged in several projects in Houston, including working “on
permanent housing solutions for victims of recent hurricanes, and on the development of quality
new, affordable housing outside areas that have historically been segregated on the basis of race,
national origin, and/or poverty.” Id. ¶¶ 120–23. Texas Housers also “actively promotes the
equitable distribution of housing and community development resources.” Id. ¶ 125.
2. Houston’s Alleged Failures and Receipt of Block Grant Funding
Despite Houston’s racial and ethnic diversity, id. ¶ 37, Texas Housers alleges that the city
remains “one of the most segregated large cities in the country” and has failed to affirmatively
further fair housing in several ways. Id. ¶ 1. First, Texas Housers alleges that Houston has
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refused “to permit affordable housing complexes in predominantly white neighborhoods even as
the City permits such developments in predominantly minority neighborhoods.” Id. ¶ 6.
Second, Texas Housers alleges that Houston “has failed to address the water drainage needs of
most of Houston’s racially- and ethnically-segregated neighborhoods, thereby subjecting them to
repeated and prolonged flooding in the wake of hurricanes, tropical storms, and other natural
disasters.” Id. ¶ 11. As a result, these neighborhoods are subject to “repeated and prolonged
flooding in the wake of hurricanes, tropical storms, and other natural disasters.” Id.
Texas Housers contends that from 2011 until the time it filed this action, Houston
submitted AIs and other annual grant submissions that included false certifications that it would
affirmatively further fair housing. Id. ¶¶ 42–68. And in fact, HUD reviewed the AI that Houston
submitted in 2010 and identified in an October 2011 letter certain deficiencies on Houston’s part,
including evidence that the city failed to address “the issue of segregated housing or to take any
actions to overcome the effects of segregation.” Id. ¶ 48. HUD then rejected the 2010 AI in a
November 2011 letter, concluding that Houston did not “identify actions to address patterns of
existing segregation” and that its “placement of affordable housing may have served to
promulgate racial segregation.” Id. ¶ 49. In 2014, Houston submitted a revised 2010 AI to
HUD, which the agency accepted. Id. ¶ 51. In the intervening years, Houston continued to
submit certifications that it was affirmatively furthering fair housing and, in turn, continued to
receive more than $230 million in block grant funding. Id. ¶¶ 52–53. HUD also accepted and
approved Houston’s 2014 and 2015 AIs despite Texas Housers’ objections that they “contained
no programs or funding to address the concentration of affordable housing in high-poverty and
minority concentrated neighborhoods, or to provide affordable housing in high-opportunity
areas.” Id. ¶ 61; see id. ¶¶ 57–66. And Houston received tens of millions of dollars in CDBG-
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DR funds following natural disasters in 2008 and 2015, which required Houston to certify to
HUD its compliance with Title VI and the Fair Housing Act. Id. ¶ 68.
3. HUD’s Investigations of Houston
In August 2016, HUD began to investigate whether Houston engaged in race- or national-
origin based discrimination in its handling of a proposed affordable housing complex known as
Fountain View Apartments, as well as its procedures for approving Low Income Housing Tax
Credit applications. See Compl., Ex. 1. In January 2017, HUD informed Houston that it had
concluded, based on its investigation, that the City’s failure to bring the approval of the Fountain
View Apartments to a vote was “motivated either in whole or in part by the race, color, or
national origin of the likely tenants.” Id. at 1. HUD informed Houston that it could take certain
corrective actions to reach a voluntary resolution to the investigation. But HUD further noted
that “[i]f a voluntary resolution cannot be obtained, [it] may initiate administrative proceedings
or refer this matter to the United States Department of Justice for judicial enforcement.” Id. at
14.
Houston entered into a Voluntary Compliance Agreement with HUD to resolve the
matter in March 2018. See ECF No. 13-1, Declaration of Garry Sweeney (“Sweeney Decl.”)
¶ 11, Ex. F at 1–18. In that agreement, HUD acknowledged that Houston disputed its findings in
the January 2017 letter. ECF No. 13-1, Ex. F at 1. Still, HUD and Houston agreed that, to avoid
a “time-consuming” dispute, all the “issues, findings, concerns, and questions” raised in that
letter would be “fully and finally resolved” by the agreement. Id. Under the Agreement,
Houston committed to: (1) implementing a “Voucher Mobility Pilot program to encourage
landlords in all areas of the City to rent to qualified families regardless of source of income,” id.
at 3; (2) seeking to provide additional funding for the Houston Housing Authority, id.; (3)
certifying that it developed clear minimum standards for approving new housing tax credit
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developments, id. at 3–4; and (4) receiving technical assistance to identify opportunities to
affirmatively further fair housing through the deployment of disaster recovery funding, id. at 4.
In October 2017, Texas Housers filed an administrative complaint with HUD, alleging
that Houston’s “failure to provide equal levels of flood protection to African-American and
Latino-segregated neighborhoods harms people of color directly, by depressing the economic
value of their homes and subjecting them to disproportionate physical hazards and property
damage from flooding.” Compl. ¶ 115. In November 2017, HUD acknowledged receipt of the
letter. Sweeney Decl. ¶ 9. And in April 2018, a month after this suit was filed, HUD notified
Houston that it was processing the complaint and investigating its claims. Id. ¶ 12.
II. This Action
In March 2018, Texas Housers filed the instant complaint with three causes of action
under the Administrative Procedure Act (APA), 5 U.S.C. § 706. First, the complaint alleges that
HUD “unlawfully withheld or unreasonably delayed” taking enforcement action against Houston
to bring it into compliance with Title VI and the grant requirements of the HCDA. Compl.
¶¶ 133–36. Second, it alleges that HUD acted arbitrarily and capriciously by approving
Houston’s access to various federal block grant programs and CDBG-DR funds “despite false
certifications of civil rights compliance for which it has offered no justification.” Id. ¶¶ 137–41.
Third, it alleges that HUD failed to ensure that Houston affirmatively distributes federal housing
funds “in a manner that furthers racial desegregation” as required by Title VI and the AFFH
requirement. Id. ¶¶ 142–45.
HUD moved to dismiss the complaint. ECF No. 13 (“MTD”). Texas Housers opposed
the motion, ECF No. 16 (“Opp’n”), and HUD replied, ECF No. 17 (“Reply”). The Court held a
hearing on the motion in July 2019. ECF No. 19 (“Hr’g Tr.”).
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III. Legal Standard
A motion to dismiss under Rule 12(b)(1) tests whether a federal court has subject-matter
jurisdiction over a case. Courts “have an affirmative obligation ‘to consider whether the
constitutional and statutory authority exist for us to hear each dispute.’” James Madison Ltd. by
Hecht v. Ludwig, 82 F.3d 1085, 1092 (D.C. Cir. 1996) (quoting Herbert v. Nat’l Acad. of Scis.,
974 F.2d 192, 196 (D.C. Cir. 1992)). If the Court “concludes that it lacks subject-matter
jurisdiction, [it] must dismiss the complaint in its entirety.” Arbaugh v. Y & H Corp., 546 U.S.
500, 514 (2006). Because federal law presumes that a cause lies outside a federal court’s
jurisdiction, the plaintiff bears the burden of establishing the factual predicates of jurisdiction.
See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).
“The court must accept as true all well-pleaded factual contentions and draw all
reasonable inferences therefrom, but it need not accept thread-bare recitals of the elements of
standing or legal conclusions couched as an assertion of fact.” Marouf v. Azar, 391 F. Supp. 3d
23, 29 (D.D.C. 2019). Additionally, “[t]he court must give the plaintiff’s factual allegations
closer scrutiny when resolving a Rule 12(b)(1) motion than would be required for a Rule
12(b)(6) motion because subject-matter jurisdiction focuses on the court’s power to hear the
claim.” Adams v. U.S. Capitol Police Bd., 564 F. Supp. 2d 37, 40 (D.D.C. 2008). And when
considering a motion under Rule 12(b)(1), “[a] court may consider the complaint supplemented
by undisputed facts evidenced in the record, or the complaint supplemented by undisputed facts
plus the court’s resolution of disputed facts.” Herbert, 974 F.2d at 197.
IV. Analysis
An organization may assert standing “on its own behalf, on behalf of its members or
both.” People for the Ethical Treatment of Animals v. U.S. Dep’t of Agric., 797 F.3d 1087, 1093
(D.C. Cir. 2015) (“PETA”) (quoting Equal Rights Ctr. v. Post Props., Inc., 633 F.3d 1136, 1138
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(D.C. Cir. 2011)). Texas Housers argues that it has standing based on its own cognizable injury
resulting from HUD’s alleged failure to enforce Houston’s civil rights obligations. Opp’n at 13.
The Court must therefore consider whether it has shown an “actual or threatened injury in fact
that is fairly traceable to the alleged illegal action and likely to be redressed by a favorable court
decision.” PETA, 797 F.3d at 1093 (quoting Equal Rights Ctr., 633 F.3d at 1138).
A. Injury in Fact
To satisfy the injury-in-fact requirement, an organization must allege that it suffered a
“concrete and demonstratable injury to [its] activities—with the consequent drain on [its]
resources—[that] constitutes far more than simply a setback to the organization’s abstract social
interests.” Havens Realty Corp. v. Coleman, 455 U.S. 363, 379 (1982). The D.C. Circuit has
articulated a two-prong test for determining whether an organization meets this standard.
First, the organization must plausibly allege “that the defendant’s ‘action or omission to
act injured the organization’s interest.” Elec. Privacy Info. Ctr. v. Presidential Advisory Comm’n
on Election Integrity, 878 F.3d 371, 378 (D.C. Cir. 2017) (quoting PETA, 797 F.3d at 1094). To
make such a showing, the organization must plausibly allege that the challenged conduct
“perceptibly impaired [its] ability to provide services” by causing an “inhibition of [the
organization’s] daily operations.” Food & Water Watch, Inc. v. Vilsack, 808 F.3d 905, 919 (D.C
Cir. 2015) (second alteration in original) (quoting in first part Turlock Irrigation Dist. v.
F.E.R.C., 786 F.3d 18, 24 (D.C. Cir. 2015) and in second part PETA, 797 F.3d at 1094). In
defining this requirement, the D.C. Circuit has “distinguished between organizations that allege
that their activities have been impeded from those that merely allege that their mission has been
compromised.” Abigail All. for Better Access to Dev. Drugs v. Eschenbach, 469 F.3d 129, 133
(D.C. Cir. 2006). As such, “an organization’s abstract interest in a problem is insufficient to
establish standing, ‘no matter how longstanding the interest and no matter how qualified the
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organization is in evaluating the problem.’” Am. Soc’y For Prevention of Cruelty to Animals v.
Feld Entm’t, Inc., 659 F.3d 13, 24 (D.C. Cir. 2011) (quoting Sierra Club v. Morton, 405 U.S.
727, 739 (1972)). Additionally, the organization must plausibly allege the existence of a “direct
conflict between the defendant’s conduct and the organization’s mission.” Nat’l Treasury Emps.
Union v. United States, 101 F.3d 1423, 1430 (D.C. Cir. 1996) (emphasis omitted) (holding that
such a conflict “is necessary—though not alone sufficient—to establish standing”).
Second, the organization must plausibly allege that it “used its resources to counteract
[the alleged] harm.” Food & Water Watch, 808 F.3d at 919 (quoting PETA, 797 F.3d at 1094).
Relying on “use of resources for litigation, investigation in anticipation of litigation, or
advocacy” does not suffice. Id. Nor does “‘expend[ing] resources to educate [an organization’s]
members and others’ unless doing so subjects the organization to ‘operational costs beyond those
normally expended.’” Id. at 920 (quoting Nat’l Taxpayers Union v. United States, 68 F.3d 1428,
1434 (D.C. Cir. 1995)). Rather, an organization must allege that it used its resources “in
response to, and to counteract, the effects of the defendant[’s]” challenged conduct, Equal Rights
Ctr., 633 F.3d at 1140, and for a purpose other than advocacy or litigation, Turlock Irrigation
Dist., 786 F.3d at 24 (“This is true whether the advocacy takes place through litigation or
administrative proceedings.”).
In its complaint, Texas Housers asserts that it “carries out its mission by researching and
evaluating low-income housing and community development programs, needs, and issues
throughout Texas to discover solutions; promoting public understanding of and support for the
same; and organizing and empowering low-income people and communities to take the initiative
to solve their own housing and community development problems.” Compl. ¶ 119. Texas
Housers pleads that it has “been wrongly deprived of HUD’s enforcement to require Houston to
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comply with its federal civil rights obligations.” Id. ¶ 16. HUD’s “prolonged failure or refusal
to insist on compliance by Houston,” it alleges, has caused “persistent segregation” in the city,
“which makes it more difficult for Texas Housers to accomplish its mission in Houston.” Id.
¶ 126.
Texas Housers further alleges that it “has been required to divert its scarce resources
away from advocacy for low-income Texans in other regions of the state to document and
repeatedly challenge HUD’s failure to abide by its own civil rights obligations with respect to
Houston.” Id. ¶ 2. It pleads that it “has been required to interrupt, delay, or scale back its
research, analysis, policy development, and community education work” in other parts of Texas.
Id. ¶ 127. For example, Texas Housers contends that it has been forced to curtail “its research
and analysis of Harris County’s discriminatory treatment of affordable housing development
proposals; its review of the Low Income Housing Tax Credit competition for 2017 . . . ; and its
research and analysis of the impact of a 2015 Texas statute prohibiting local governments from
passing ordinances to expand housing choice for low-income Texans using rental subsidies.” Id.
¶ 128. And if HUD is not required to act against Houston, Texas Housers alleges that it “will
have to divert much of its time and other resources to projects that, in various ways, counteract
the damage that HUD’s action is doing to [Texas Housers’] ability to further its mission.” Id.
¶ 129.
Texas Housers does not plausibly allege a sufficient injury to its interest under the law of
this Circuit. For that reason, it never gets past the first step of the Havens organizational
standing test. Texas Housers asserts a few broad injuries to its overall “mission.” Id. ¶ 126
(alleging that HUD’s inaction has led to “persistent segregation [that] operates as a substantial
barrier to fair housing choice and equitable distribution of infrastructure and community
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development resources, which makes it more difficult for Texas Housers to accomplish its
mission in Houston”). These allegations are plainly insufficient. “An organization must allege
more than a frustration of its purpose because frustration of an organization’s objectives ‘is the
type of abstract concern that does not impart standing.’” Food & Water Watch, 808 F.3d at 919
(quoting Nat’l Taxpayers Union, 68 F.3d at 1433). In other words, standing must be based on
more than an allegation that an agency’s actions, or lack thereof, have put more distance between
an organization and the ends it seeks. Moreover, that the ends Texas Housers seeks ultimately
depend on the subsequent action of a third party—Houston—makes its purported injury even
more nebulous. When a plaintiff asserts a chain of allegations for standing purposes, a court may
“reject as overly speculative those links which are predictions of future events (especially future
actions to be taken by third parties).” Id. at 913 (quoting Arpaio v. Obama, 797 F.3d 11, 21
(D.C. Cir. 2015)).
Texas Housers also references the advocacy efforts it undertakes to advance its mission:
“researching and evaluating low-income housing and community development programs, needs,
and issues throughout Texas to discover solutions; promoting public understanding of and
support for the same; and organizing and empowering low-income people and communities to
take the initiative to solve their own housing and community development problems.” Compl.
¶ 119. But Texas Housers does not allege that HUD’s inaction has directly impeded its ability to
engage in advocacy: it remains able to research and evaluate housing programs, needs, and issues
throughout Texas. Id. ¶¶ 127–28. And more fundamentally, injury to an organization’s
advocacy efforts does not count for standing purposes. The key inquiry is whether the plaintiff
has alleged that “the defendant’s conduct ‘perceptibly impaired’ the organization’s ability to
provide services.” Turlock Irrigation Dist., 786 F.3d at 24 (emphasis added) (quoting Equal
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Rights Ctr., 633 F.3d at 1138–39). An organization has not stated an injury in fact if it “does not
allege impairment of its ability to provide services, [but] only impairment of its advocacy.” Id.;
see also Int’l Acad. of Oral Med. & Toxicology v. The U.S. Food & Drug Admin., 195
F. Supp. 3d 243, 256 (D.D.C. 2016) (considering “whether the injury relates to the organization’s
mere advocacy objectives or if, instead, it undermines the organization’s direct, non-advocacy
services”). The complaint does not allege that HUD has impaired Texas Housers’ ability to
provide any non-advocacy services. See Ctr. for Law & Educ. v. Dep’t of Educ., 396 F.3d 1152,
1162 (D.C. Cir. 2005) (rejecting standing where “the only ‘service’ impaired is pure issue-
advocacy”). Therefore, it has not plausibly alleged a cognizable injury in fact.
In response, Texas Housers argues, first, that all its work is not fairly characterized as
advocacy. Opp’n at 16. It points to allegations that it conducts “research, analysis, policy
development, and community education work” in other parts of Texas. Compl. ¶ 127. And
second, it asserts that it was injured because it has had “to interrupt, delay, or scale back” that
work to focus on HUD’s inaction. Id. For example, because it had to “divert its limited
resources to secure HUD’s enforcement of Houston’s civil rights obligations,” it claims that it
was “unable to commence” other projects, such as an analysis of a Texas county’s discriminatory
treatment of affordable housing development proposals and a review of a Low Income Housing
Tax Credit competition. Id. ¶ 128.
This Texas two-step does not an create an injury in fact. Admittedly, the line between
advocacy and non-advocacy services can be blurry. See Am. Soc’y for Prevention of Cruelty to
Animals, 659 F.3d at 27 (“[M]any of our cases finding [organizational] standing involved
activities that could just as easily be characterized as advocacy—and, indeed, sometimes are.”).
In the Court’s view, however, Texas Housers’ activities are more accurately described as
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advocacy. But no matter how its activities are characterized, Texas Housers must plausibly
allege that HUD’s inaction “perceptibly impaired” its ability to provide services or that its “daily
operations” were impeded, Food & Water Watch, 808 F.3d at 919 (quoting in second part PETA,
797 F.3d at 1094). It has not done so. As noted above, Texas Housers does not assert that
HUD’s inaction directly impaired its ability to research, analyze, or perform work on these other
projects. See Compl. ¶¶ 127–28. Rather, it alleges it could not undertake these projects because
it has chosen, at least at this point, “to divert its limited resources to secure HUD’s enforcement
of Houston’s civil rights obligations.” Id. ¶ 128; see also Opp’n at 13. But at step one of the
Havens standing test, the “pivotal inquiry is . . . not whether the organization has diverted
resources from one priority to another, but whether its activities have been directly impeded by
defendant’s activities, thus necessitating the diversion of resources.” Long Term Care Pharmacy
All. v. UnitedHealth Grp., Inc., 498 F. Supp. 2d 187, 192 (D.D.C. 2007) (emphasis added).
Texas Housers’ has not alleged that its activities—advocacy or not—have been so directly
impeded. Rather, the injuries it complains of merely reflect budgetary choices based only on the
“frustration of an organization’s objectives.” Ctr. for Law & Educ. v. Dep’t of Educ., 396 F.3d
1152, 1161 (D.C. Cir. 2005) (quoting Nat’l Treasury Emps. Union, 101 F.3d at 1429). This is
precisely the sort of harm that does not confer organizational standing. Id. at 1161–62. Texas
Housers has effectively alleged that it has more work to do because of HUD’s inaction. But that
does not mean it has suffered an injury in fact sufficient for organization standing. See Elec.
Privacy Info. Ctr. v. U.S. Dep’t of Educ., 48 F. Supp. 3d 1, 23 (D.D.C. 2014) (noting that “the
expenditures that [a privacy-focused public interest organization] has made in response to [an
allegedly unlawful rule] have not kept it from pursuing its true purpose as an organization but
have contributed to its pursuit of its purpose”).
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This case is easily distinguishable from others in which organizations promoting fair
housing adequately pleaded injuries in fact. In Havens Realty Corp. v. Coleman, for example,
the Supreme Court held that a nonprofit organization pleaded a cognizable injury by alleging that
the defendant’s “racial steering” practices—where it incorrectly advised black individuals that
apartments in certain areas were unavailable—perceptibly impaired the organization’s “ability to
provide counseling and referral services for low-and moderate-income homeseekers.” 455 U.S.
at 379. Texas Housers has not alleged that it provides such direct services, nor has it alleged that
HUD’s inaction caused any particular impairment to any non-advocacy services it does provide
beyond general frustration of its mission.
For this reason, the injury it alleges resembles that discussed in National Fair Housing
Alliance v. Carson, 330 F. Supp. 3d 14 (D.D.C. 2018). In that case, Texas Housers and other
plaintiffs alleged that HUD and Secretary Carson unlawfully withdrew a fair housing assessment
tool that purportedly “ma[de] it far easier to develop and promote local policies that affirmatively
further fair housing.” Id. at 44. In holding that the plaintiff organizations had not adequately
alleged an injury, Chief Judge Howell noted that “the plaintiffs are largely engaged in the same
kinds of activities now that they were undertaking before the withdrawal of the [assessment tool]
. . . namely, education, research, advocacy, and counseling,” even if “withdrawal of the [t]ool
merely makes their efforts less ‘efficient[ ].’” Id. at 49 (last alteration in original). As discussed
above, Texas Housers has not alleged that HUD’s inaction has impaired its ability to research,
analyze, or educate; indeed, the complaint itself incorporates research and analysis that Texas
Housers has undertaken to support its claims in this very case. Compl. ¶¶ 12, 106. Nor has
Texas Housers, like the plaintiffs in National Fair Housing Alliance, pleaded a “dollar figure to
show an increase in its operational costs” that it will have to endure because of HUD’s inaction,
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which in any event was insufficient to show injury in that case. See 330 F. Supp. 3d at 50; see
generally Compl.
None of the other cases cited by Texas Housers save its claims. In Open Communities
Alliance v. Carson, the plaintiff organization provided direct services to individuals and families
with housing vouchers, permitting them to move to higher-opportunity areas. 286 F. Supp. 3d
148, 177–78 (D.D.C. 2017). There, Chief Judge Howell found, on a motion for preliminary
injunction, that an organization had shown that an agency’s delay of a rule “frustrate[d] [the
organization’s] ability to assist voucher holders gain access to greater opportunity.” Id. at 178.
The agency’s inaction in that case directly affected the value of housing vouchers; that, in turn,
hampered the organization’s work with developers to build affordable housing and forced the
organization to abandon plans to launch a “web portal” built around the anticipated rule’s effects.
Id. But as Defendants point out, Texas Housers has not alleged that it provides similar services
and suffered similar injuries to its daily activities. Reply at 5.
Similarly, in League of Women Voters of the United States v. Newby, the D.C. Circuit
concluded that a change to the instructions on a voter registration form caused an injury to an
organization that had been registering voters sufficient to confer standing. 838 F.3d 1, 13 (D.C.
Cir. 2016). The specific injury in that case was the impairment of the organization’s ability to
register voters, while its increased expenditures were “merely a symptom of that programmatic
injury.” Id. at 9. Texas Housers’ allegations that it has had to focus its research, education and
policy development efforts on Houston at the expense of other areas in Texas is a far cry from
the direct impairment of day-to-day services that courts recognized as sufficient for standing
purposes in these cases.
16
Texas Housers also argues that organizations may suffer cognizable harm if an agency
deprives them of “‘access to information and avenues of redress they wish to use in their routine’
activities in furtherance of their missions.” Opp’n at 17 (quoting Action All. of Senior Citizens of
Greater Phila. v. Heckler, 789 F.2d 931, 937–38 (D.C. Cir. 1986)). At the hearing on its motion,
Texas Housers doubled down on this contention, emphasizing that if HUD had been properly
enforcing the law, then Houston would be providing assessments of its housing market to HUD
that would contain information of value to Texas Housers. See, e.g., Hr’g Tr. 12:1–7. But Texas
Housers failed to plead an injury stemming from a lack of information in its complaint, relying
instead on the “frustration of its mission and the drain on its resources.” Compl. ¶ 127. 1 It also
did not plausibly allege that it has been denied “a means by which to seek redress.” PETA, 797
F.3d at 1095. Nor did it allege the basic elements of an informational injury. See Friends of
Animals v. Jewell, 828 F.3d 989, 992 (D.C. Cir. 2016) (outlining the basic requirements when
pleading an informational injury). And even if it had included its arguments at the hearing in its
complaint, Texas Housers has not explained with any specificity how a lack of information from
Houston has perceptibly impaired its ability to provide services or has otherwise injured it. See
generally Compl. Its allegations at the hearing about a purported informational injury are
therefore dissimilar to those in Action Alliance, where the plaintiff pleaded that the denial of its
1
“It is axiomatic that a complaint may not be amended by the briefs in opposition to a motion to
dismiss.” Arbitraje Casa de Cambio, S.A. de C.V. v. U.S. Postal Serv., 297 F. Supp. 2d 165, 170
(D.D.C. 2003) (quoting Coleman v. Pension Benefit Guar. Corp., 94 F. Supp. 2d 18, 24 n.8
(D.D.C. 2000)). Even if this were not fatal to the claim, Texas Housers has not shown that it has
informational standing, which “arises ‘only in very specific statutory contexts’ where a statutory
provision has ‘explicitly created a right to information.’” Am. Farm Bureau v. EPA, 121
F. Supp. 2d 84, 97 (D.D.C. 2000) (quoting Animal Legal Def. Fund, Inc. v. Espy, 23 F.3d 496,
502 (D.C. Cir. 1994)).
17
access to information directly impaired its “routine information-dispensing, counseling, and
referral activities.” 789 F.2d at 938. 2
B. Redressability
Besides an injury in fact, organizations must meet the other two requirements for
standing: causation and redressability. Causation, or traceability, requires that the asserted injury
be “fairly traceable to the defendant’s allegedly unlawful conduct,” Am. Soc’y for Prevention of
Cruelty to Animals, 659 F.3d at 24, as opposed to an injury “that results from the independent
action of some third party not before the court,” Simon v. E. Ky. Welfare Rights Org., 426 U.S.
26, 42 (1976). And redressability requires “it [to] be ‘likely,’ as opposed to merely ‘speculative,’
that the injury will be ‘redressed by a favorable decision.’” Lujan v. Defs. of Wildlife, 504 U.S.
555, 561 (1992) (quoting E. Ky. Welfare Rights Org., 426 U.S. at 38, 43). If the “plaintiff’s
asserted injury arises from the government’s allegedly unlawful regulation (or lack of regulation)
or someone else, much more is needed [to establish causation and redressability].” Id. at 562. In
that circumstance, “it becomes the burden of the plaintiff to adduce facts showing that [the]
choices [of those third parties] have been or will be made in such a manner as to produce
causation and permit redressability of injury.” Id.
The D.C. Circuit has “identified two categories of cases where standing exists to
challenge government action though the direct cause of injury is the action of a third party.”
2
In its complaint, Texas Housers also alleged, as part of its APA claims, that HUD failed to act
in response to Texas Housers’ October 2017 administrative complaint about Houston’s storm
water infrastructure. Compl. ¶¶ 131, 136(c). But HUD began to investigate that complaint in
April 2018. See Sweeney Decl. ¶ 12. As a result, Texas Housers conceded at the hearing that, to
the extent that HUD’s failure to investigate that complaint constituted a standalone APA claim,
the claim is now moot. See Hr’g Tr. 60:4–61:17. Similarly, Texas Housers conceded that any
standalone allegation under the APA that HUD’s decision to enter into what Texas Housers
contends was an insufficiently-demanding voluntary compliance agreement is also moot. See
Hr’g Tr. 61:19–62:14.
18
Renal Physicians Ass’n v. U.S. Dep’t of Health & Human Servs., 489 F.3d 1267, 1275 (D.C. Cir.
2007). The first category covers situations in which “the challenged government action
authorized conduct that would otherwise have been illegal.” Id.; see also Clark Cty., Nev. v.
F.A.A., 522 F.3d 437, 440 (D.C. Cir. 2008) (finding redressability where a contrary decision by
an agency would prevent third-party construction to which the plaintiff objected). The second
category covers situations “where the record presented substantial evidence of a causal
relationship between the government policy and the third-party conduct, leaving little doubt as to
causation and the likelihood of redress.” Renal Physicians Ass’n. 489 F.3d at 1275 (quoting
Nat’l Wrestling Coaches Ass’n v. Dep’t of Educ., 366 F.3d 930, 941 (D.C. Cir. 2004), abrogated
on other grounds by Perry Capital LLC v. Mnuchin, 864 F.3d 591 (D.C. Cir. 2017)). 3 In either
case, the Circuit held, “to establish redressability at the pleading stage, [it] required more than a
bald allegation; [it] required that the facts alleged be sufficient to demonstrate a substantial
likelihood that the third party directly injuring the plaintiff would cease doing so as a result of
the relief the plaintiff sought.” Id.
Even assuming it suffered a sufficient injury, Texas Housers still lacks standing because
it has failed to adequately plead that those injuries are redressable. As discussed above, a
plaintiff whose theory of redressability requires the subsequent action of a third party faces a
considerably tougher row to hoe. Lujan, 504 U.S. at 562. Although Texas Housers has asked
3
Although it does not explicitly say so, Texas Housers’ theory of redressability falls in the
second category. While the complaint alleges that both Houston and HUD are engaging in
unlawful conduct, it does not seek a change in any law or regulation that would render illegal
what is currently legal. See Nat’l Wrestling, 366 F.3d at 940. Moreover, as Texas Housers
acknowledges, Houston is presumably free to reject federal housing funds and their attendant
conditions. See MTD at 26; Opp’n at 26.
19
this Court to compel HUD to act, the harm it seeks to remedy flows more directly from
Houston’s alleged inaction. For example, according to the complaint:
As a result of HUD’s prolonged failure or refusal to insist on compliance by
Houston, the city remains the most segregated cities in Texas, and one of the most
segregated large cities in the United States. That persistent segregation operates
as a substantial barrier to fair housing choice and equitable distribution of
infrastructure and community development resources, which makes it more
difficult for Texas Housers to accomplish its mission in Houston.
Compl. ¶ 126. The complaint is replete with other examples. E.g., id. ¶ 16 (“HUD has refused
to use its immense leverage under federal funding programs to ensure adequate desegregated
housing in Houston.”); id. ¶ 40 (“[HUD] has refused to take effective actions to compel Houston
to adjust its housing policies and practices” through administration of federally financed housing
programs); id. ¶ 42 (pleading that, despite knowing of Houston’s violations, “HUD has done
nothing about it”); id. ¶ 69 (“HUD let Houston off with a slap on the wrist that will do nothing to
change Houston’s conduct”); id. ¶ 132 (“HUD has demonstrated that, absent injunctive relief, it
will not conform its conduct to its own obligations under federal law, and will not require
Houston to meet the obligations that come as a consequence of accepting federal housing
funds.”). Indeed, the injunctive relief Texas Housers seeks further buttresses the indirect nature
of the harm of which it complains:
(b) issue temporary and permanent injunctions requiring HUD to enforce Title VI,
AFFH, and related obligations against Houston, to withhold further disbursements
of . . . HUD funding to Houston until such time as it comes into compliance with
those obligations . . . ;
(c) direct HUD to take all affirmative steps necessary to remedy the effects of the
illegal conduct described herein and to prevent similar occurrences in the future.
20
Id., Prayer for Relief at 36. In sum, Texas Housers’ theory of harm relies on HUD as an
instrument for altering Houston’s behavior. See Opp’n at 13 (observing that for Texas Housers
to “carry out [its] mission effectively, it needs HUD to be a willing partner”). 4
Texas Housers has not plausibly alleged that relief from the Court would redress these
harms. National Wrestling is instructive. In that case, the plaintiffs challenged an interpretive
rule that the Department of Education issued that outlined a three-part test to assess “[w]hether
the selection of sports and levels of competition effectively accommodate the interests and
abilities of members of both sexes.” 366 F.3d at 934 (alteration in original) (quoting 34 C.F.R.
§ 106.41(c)(1)). The plaintiffs alleged that they were hurt indirectly by institutions that chose “to
eliminate or reduce the size of men’s wrestling teams.” Id. at 937. The court found that the
plaintiffs had failed to show that the relevant institutions would behave any differently if the
court ruled in their favor. Id. at 940 (“[N]othing but speculation suggests that schools would act
any differently than they do with the Three-Part Test in place.”). Similarly, Texas Housers has
pleaded no facts that allow the Court to reasonably infer that Houston would act differently in
4
Texas Housers argues in passing that “[a] plaintiff asserting procedural injury never has to
prove that if he had received the procedure the substantive result would have been altered.”
Opp’n at 26 (quoting City of Dania Beach, Fla. v. F.A.A., 485 F.3d 1181, 1186 (D.C. Circ.
2007)). But, as Defendants correctly point out, these cases are inapposite because Texas Housers
has not alleged a procedural injury. Reply at 9; see generally Compl. Additionally, to the extent
that Texas Housers now seeks to characterize its allegations about HUD’s failure to investigate
as procedural, it conceded at the hearing that they are moot. See Hr’g Tr. 60:4–61:17, 61:19–
62:14. The Supreme Court has instructed that “deprivation of a procedural right without some
concrete interest that is affected by the deprivation—a procedural right in vacuo—is insufficient
to create Article III standing.” Summers v. Earth Island Inst., 555 U.S. 488, 496 (2009).
21
some way in the face of additional scrutiny from HUD. 5 Texas Housers’ own arguments in
favor of redressability reflect the speculative nature of its theory of relief:
Were HUD to carry out its legal obligations—or this Court to order it to begin
doing so—that would directly benefit Texas Housers by removing an impediment
(long-standing municipal interference with efforts at desegregation) to its ability
to accomplish its mission. . . . Likewise, if HUD were ordered to condition
Houston’s continued receipt of HUD funding on the city’s demonstrating actual
compliance with the law, the result would be to make it far easier for Texas
Housers to advocate for affordable housing in high-opportunity neighborhoods.
Opp’n at 25 (emphasis added); see also id. at 27 (arguing that HUD’s failure to “make Houston
comply with civil rights laws and advance [affordable housing] projects” is an “impediment to
Texas Housers’ ability to accomplish its mission,” the removal of which “is a tangible benefit,
regardless of what occurs thereafter”). This is precisely the kind of conjecture that the D.C.
Circuit rejected in National Wrestling. See 366 F.3d at 939 (concluding that “a quest for ill-
defined ‘better odds’ is not close to what is required to satisfy the redressability prong of Article
III”) (quoting oral argument). 6 By contrast, plaintiffs who have successfully pleaded contingent
relief have supported their allegations with “substantial evidence” that left “little doubt as to
causation and the likelihood of redress.” Renal Physicians, 489 F.3d at 1275 (quoting Nat’l
5
Texas Housers dismisses Defendants’ “unsupported (and far-fetched) hypothesis that Houston
could reject . . . federal funding in the future to avoid civil rights compliance.” Opp’n at 26
(emphasis in original). But Defendants do not bear the burden here; Texas Housers does. Lujan,
504 U.S. at 561.
6
Indeed, it is not even clear what Texas Housers would like the Court to do other than to order
HUD to more effectively enforce certain laws against Houston. See generally Compl., Prayer for
Relief at 36; Opp’n at 35 (asking the Court “to order HUD to end its policy of overlooking
Houston’s proven failures and to do something in accordance with the agency’s own findings”).
And as Defendants correctly point out, the Supreme Court’s decision in Heckler v. Chaney
generally precludes judicial review of an agency’s discrete enforcement decisions. MTD at 30;
Heckler v. Chaney, 470 U.S. 821, 831 (1985) (“[A]n agency’s decision not to prosecute or
enforce, whether through civil or criminal process, is a decision generally committed to an
agency’s absolute discretion.”).
22
Wrestling, 366 F.3d at 941); see also Tozzi v. U.S. Dep’t of Health & Human Servs., 271 F.3d
301, 307–310 (D.C. Cir. 2001) (plaintiff introduced record evidence to support his claim that
cities and organizations followed the government’s lead); Block v. Meese, 793 F.2d 1303, 1308
(D.C. Cir. 1986) (plaintiff supported his “otherwise conclusory allegation” that a government
classification was causing lost film sales by including “affidavits of potential customers”).
V. Conclusion
For all these reasons, in a separate order, Defendant’s Motion to Dismiss, ECF No. 13,
will be granted and the Court will dismiss the complaint, ECF No. 1, for lack of subject-matter
jurisdiction.
/s/ Timothy J. Kelly
TIMOTHY J. KELLY
United States District Judge
Date: December 3, 2019
23