330 F. Supp. 3d 14
D.C. Cir.2018Background
- HUD promulgated the 2015 "Affirmatively Furthering Fair Housing (AFFH) Rule" requiring program participants (states, localities, PHAs) to submit an Assessment of Fair Housing (AFH) using HUD-issued Assessment Tools; HUD would review and accept/reject AFHs.
- HUD issued a Local Government Assessment Tool (LG2015, updated LG2017) and began reviewing an initial set of 49 local AFHs; HUD found many submissions unacceptable or needing substantial revisions.
- On May 23, 2018 HUD published three notices: it withdrew the LG2017 Tool, directed program participants to rely on the prior Analysis of Impediments (AI) process, and announced procedural changes (including continuing applicability of several AFFH Rule provisions such as definitions, certification, recordkeeping, and community participation).
- Three nonprofit plaintiff organizations (NFHA, Texas Housers, Texas Appleseed) sued under the APA seeking injunctions to rescind the May 2018 notices, reinstate the LG2017 Tool, and require HUD to implement the AFFH Rule; New York sought to intervene.
- District court considered (1) HUD's motion to dismiss for lack of Article III standing, (2) plaintiffs' motion for preliminary injunction/expedited summary judgment, and (3) New York's motion to intervene.
- Court granted HUD's motion to dismiss (plaintiffs lacked organizational standing), denied the preliminary injunction and expedited summary judgment, and denied New York's motion to intervene for lack of standing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing of organizational plaintiffs | Plaintiffs (nonprofits) say HUD's withdrawal of LG2017 and reversion to AI perceptibly impaired their missions, forced diversion of resources, and is traceable to HUD | HUD says plaintiffs lack concrete injury; harms rest on third-party grantee conduct and are speculative; many AFFH provisions remain in force | Court: No standing — plaintiffs failed Havens test (no perceptible impairment; resource diversion was ordinary advocacy/choice) |
| Motion to intervene (State of New York) | NY: withdrawal harms State’s ability to ensure local compliance and injures parens patriae interests | HUD: NY lacks a concrete, particularized injury and parens patriae against federal government is unavailable | Court: Denied — New York lacks Article III standing |
| Whether withdrawal of LG2017 required APA notice-and-comment | Plaintiffs: withdrawing the Tool effectively suspended the AFFH Rule and thus was substantive rule change requiring APA procedure | HUD: Assessment Tools are PRA information-collection instruments (questionnaires) subject to OMB/PRA processes; even if APA applied, withdrawal did not suspend core AFFH Rule provisions | Court: Held HUD reasonably treated the Tools as PRA information collections and withdrawal did not suspend the AFFH Rule; no APA defect shown |
| Whether withdrawal of LG2017 was arbitrary and capricious under the APA | Plaintiffs: HUD failed to adequately explain withdrawal, ignored benefits of AFH implementation, and undermined FHA duties | HUD: Supported withdrawal with data (high rejection rate, unsustainable technical-assistance costs, identified tool deficiencies) and retained core AFFH obligations; resource-allocation is reasonable | Court: Held withdrawal was not arbitrary or capricious; HUD provided adequate, reasonable explanation |
Key Cases Cited
- Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982) (organizational standing where defendant's conduct "perceptibly impaired" organization's ability to provide services)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing requirements: injury-in-fact, causation, redressability)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (arbitrary-and-capricious review standard for agency action)
- Winter v. Natural Res. Def. Council, 555 U.S. 7 (2008) (four-factor preliminary injunction standard and irreparable-harm requirement)
- Auer v. Robbins, 519 U.S. 452 (1997) (deference to agency interpretations of its own regulations)
- NAACP v. Sec'y of Hous. & Urban Dev., 817 F.2d 149 (1st Cir. 1987) (HUD's AFFH obligations are judicially reviewable and require more than non-discrimination)
- PETA v. USDA, 797 F.3d 1087 (D.C. Cir. 2015) (organizational standing where agency delay in rulemaking perceptibly impaired organization's mission)
- Nat'l Wrestling Coaches Ass'n v. Dep't of Educ., 366 F.3d 930 (D.C. Cir. 2004) (standing difficult where injury depends on independent third-party decisions)
- Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117 (2016) (agency must provide adequate reasons for actions; courts should not substitute their judgment for agency's on policy choices)