Tlingit-Haida Regional Housing Authority v. United States Department of Housing and Urban Development
United States District Court, D. Colorado
August 21, 2018
TLINGIT-HAIDA REGIONAL HOUSING AUTHORITY, Plaintiff,
v.
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; BEN CARSON, Secretary of Housing and Urban Development; DEBORAH A. HERNANDEZ, General Deputy Assistant Secretary for Public and Indian Housing; GLENDA GREEN, Director, Office of Grants Management, Office of Native American Programs, Defendants. NAVAJO HOUSING AUTHORITY, Plaintiff,
v.
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; BEN CARSON, Secretary of Housing and Urban Development, DEBORAH A. HERNANDEZ, General Deputy Assistant Secretary for Public and Indian Housing, GLENDA GREEN, Director, Office of Grants Management, Office of Native American Programs, Defendants. MODOC LASSEN INDIAN HOUSING AUTHORITY, the tribally designated housing entity for the Grindstone Indian Rancheria of Wintun-Wailaki Indians of California, Plaintiff,
v.
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; BEN CARSON, Secretary of Housing and Urban Development; DEBORAH A. HERNANDEZ, General Deputy Assistant Secretary for Public and Indian Housing; GLENDA GREEN, Director, Office of Grants Management, Office of Native American Programs, Defendants. CHOCTAW NATION OF OKLAHOMA; HOUSING AUTHORITY OF THE CHOCTAW NATION OF OKLAHOMA, Plaintiffs,
v.
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; BEN CARSON, Secretary of Housing and Urban Development; DEBORAH A. HERNANDEZ, General Deputy Assistant Secretary for Public and Indian Housing; GLENDA GREEN, Director, Office of Grants Management, Office of Native American Programs, Defendants. SICANGU WICOTI AWANYAKAPI CORPORATION, OGLALA SIOUX (LAKOTA) HOUSING, TURTLE MOUNTAIN HOUSING AUTHORITY, WINNEBAGO HOUSING AND DEVELOPMENT COMMISSION, LOWER BRULE HOUSING AUTHORITY, SPIRIT LAKE HOUSING CORPORATION, and TRENTON INDIAN HOUSING AUTHORITY, Plaintiffs,
v.
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD), SHAUN DONOVAN, Secretary of Housing and Urban Development, DEBORAH A. HERNANDEZ, General Deputy Assistant Secretary for Public and Indian Housing, and GLENDA GREEN, Director, Office of Grants Management, Office of Native American Programs, Defendants.
ORDER DENYING DEFENDANTS' MOTION FOR
RESTITUTION
Richard P. Matsch, Senior Judge.
In
Defendants' Motion for Restitution filed May 14, 2018,
[1] the
defendants (“HUD”) ask this Court to amend the
judgments entered in favor of the Tribes to those amounts
that can be considered specific relief from the 2008 grant in
compliance with the mandate from the United States Court of
Appeals for the Tenth Circuit to the extent that the
appellate court reversed this Court's rulings that were
the bases for those judgments. See Modoc Lassen Indian
Housing Authority v. HUD, 881 F.3d 1181 (10th Cir.
2017).
The
Tenth Circuit panel issued three opinions. All three judges
agreed that the agency did not recapture funds pursuant to a
statute or regulation that imposed a hearing requirement,
reversing this Court's holding to the contrary. They
disagreed about the agency's authority to recapture the
funds by administrative offset. Judge Moritz and Judge
Matheson agreed that neither the statute nor the regulations
authorized HUD to recoup the overpayments by offset. They
also agreed than no common law precedent gave HUD such
authority.
There
was disagreement in characterizing this Court's authority
to enter the judgments for recovery of funds. Judge Moritz
and Judge Bacharach ruled that these awards were money
damages which this Court had no jurisdiction to order because
the APA, 5 U.S.C. § 702, does not expressly waive
sovereign immunity from such relief. Judge Matheson
disagreed, opining that the Tribes were seeking specific
relief by enforcing NAHASDA's mandate, making the waiver
of sovereign immunity in the APA applicable. He added that
payment of the funds may be barred by the Appropriations
Clause because HUD can disburse funds only according to the
terms of the appropriations it receives from Congress. Since
this Court did not determine whether HUD has appropriations
available to satisfy the Tribes he suggested remand to
address the appropriations issue. Judge Moritz, writing for
the majority, said remand was required for “factual
findings regarding whether, at the time of the district
court's order [to pay the judgments], HUD had the
relevant funds at its disposal.” 881 F.3d at 1198-99.
In a
footnote Judge Moritz informed that in post-opinion briefing
the parties said that HUD had already complied with the
repayment orders. 881 F.3d at 1186-87, n.3. That was accepted
but the only comment was that the Tribes never suggested that
this compliance implicates HUD's right to appeal. In
another footnote Judge Moritz wrote that HUD's argument
that it didn't act arbitrarily and capriciously in
concluding that the Tribes misreported the number of eligible
housing units in their possession was not addressed because
HUD lacked authority to recapture the alleged overpayments.
881 F.3d at 1187, n. 4.
This
Court did in fact find that HUD's actions were arbitrary
and capricious within the meaning of the APA and that ruling
has not been reversed.
There
is no basis for inferring or implying any view from these
appellate judges on the question now before this Court -
whether equity favors either the Tribes or HUD on the
question of restoration of HUD's payments of the
judgments during the appeal. There is agreement that this
question of restitution is to be decided under the principles
of equitable jurisprudence.
To
apply those principles it is necessary to review this
litigation from inception.
The
dispute giving rise to this protracted litigation began in
2001 when HUD's Office of Inspector General (OIG) did a
nationwide audit of the NAHASDA program
implementation.[2]That statute enacted in 1996, effective
October 1, 1997, changed the manner in which HUD had been
providing funds to Indian housing authorities through
programs under the Housing Act of 1937 through Annual
Contributions Contracts. In sum the United States Congress
provided annual appropriations to be allocated to Tribes
under a formula which relied on the Tribes' submission of
information regarding (1) Formula Current Assisted Stock
(“FCAS”) and (2) need.
The
audit report contained a conclusion that HUD had not properly
allocated funds because grant awards had been based on FCAS
counts that included units that ought not qualify for
assistance. Particularly, the OIG faulted HUD for failing to
enforce compliance with 24 C.F.R. § 1000.318 by
accepting inclusion of units that should no longer be
considered owned or operated by the Tribes. Emphasis was on
units that were under rent-to-buy contracts whereby the
occupant could obtain conveyance of title after paying for 25
years.
In
September 2001, HUD notified Fort Peck Housing Authority
(“Fort Peck” or “FPHA”) that it may
have received grant overpayments because 238 homeownership
units had been included in its FCAS for years 1998, 1999,
2000, and 2001. Letters were exchanged resulting in HUD's
claim that Fort Peck had received overfunding for fiscal
years 1998 through 2002 for a total of $1, 767, 276.00. Fort
Peck paid $513, 354.00 in 2002.
On
October 3, 2002, counsel for Fort Peck challenged the claim
of overpayment and requested a hearing. By letter of January
3, 2003 the Deputy Assistant Secretary for Native American
Programs advised counsel that the procedures being followed
by regulation do not provide for a hearing. After a site
visit, HUD reduced the amount claimed to be owed to $786,
996.00. The position taken by HUD was that after 25 years,
the rent-to-own units should be conveyed and refused to allow
Fort Peck to retain units on its inventory without showing
good cause.
After
written protests from Fort Peck's counsel, the Assistant
Secretary for Public and Indian Housing issued a letter
denying counsel's arguments. That letter was taken to be
a final agency decision for which Fort Peck sought judicial
review under the APA by filing Civil Action No.
05-cv-00018-RPM.
By
Memorandum Opinion and Order on May 25, 2006, this Court held
that the regulation 1000.318 under which HUD acted conflicted
with the statute, 25 U.S. § 4152(b)(1), and was
therefore invalid. HUD's calculation ...