Philadelphia Housing v. U.S. Dept. of Housing

553 F.Supp.2d 433

PHILADELPHIA HOUSING AUTHORITY v. UNITED STATES DEPT. OF HOUSING AND URBAN DEVELOPMENT, et al.

Civ. No. 07-5434.

United States District Court, E.D. Pennsylvania.

March 31, 2008.

COPYRIGHT MATERIAL OMITTED

Abbe F. Fletman, Flaster/Greenberg PC, Andrew A. Chirls, Charles M. Hart, Maura Ellen McKenna, Wolf, Block, Schorr and Solis-Cohen LLP, Philadelphia, PA, Donna T. Urban, Flaster/Greenberg, P.C., Cherry Hill, NJ, for Plaintiff.

Joseph W. Lobue, Tamara Ulrich, U.S. Department of Justice, Stephen J. Buckingham, Susan Katharine Ullman, United States Department of Justice, Washington, DC, for Defendants.

MEMORANDUM

DIAMOND, District Judge.

The Philadelphia Housing Authority asks me to compel the Department of Housing and Urban Development to enter into a contract with PHA that HUD finds unacceptable. Because PHA has not demonstrated its entitlement to this mandatory injunctive relief, I am compelled to deny its Motion.

BACKGROUND

PHA annually receives approximately $336,489,721 in federal aid through its "Moving to Work agreement" with HUD. (Doc. No. 2 at Ex. D.) On December 17, 2007, HUD informed PHA by letter that it had found PHA in default of the MTW agreement because of PHA's failure to make its properties handicapped accessible as required by Section 504 of the Rehabilitation Act of 1973 and Title II of the American with Disabilities Act of 1990. HUD threatened to terminate MTW funding if PHA did not take corrective action in ten days. (Doc. No. 50 at Ex. V.) On December 26, 2007, PHA commenced the instant action against HUD and its Secretary, Alphonso Jackson — who announced his resignation earlier today. PHA moved for injunctive relief, contending that a termination of MTW funding was illegal and would irreparably harm PHA and its residents. (Doc. No. 2.); 28 U.S.C. § 1331. Following the Parties' participation in several telephonic and chambers conferences, HUD agreed that it would not terminate the MTW agreement before its March 31, 2008 expiration date. PHA, in turn, withdrew its request for immediate injunctive relief.

In light of the MTW agreement's imminent expiration, HUD has informed PHA that it could remain in the MTW program only if it entered into HUD's new, standardized agreement. Accordingly, since December of last year, the parties have attempted without success to negotiate a new MTW agreement. (See Doc. No. 50 at Ex. Y.) The new agreement proposed by HUD apparently continues the same level of funding as the present agreement, but imposes accounting and oversight requirements PHA finds unacceptable. Id.; Doc. No. 57; Philadelphia Housing Auth. v. HUD, No. 07-5434 (Mar. 27, 2008) ("Oral Arg. Tr.") at 27:19-29:6. See, e.g., MPHA Amended and Restated MTW Agreement, available at http://www.hud.gov/utilities/intercept.cfm?/offices/pih/programs/ph/mtw/pdfs/agreements/minnrestated.pdf. PHA has proposed changes to the standard MTW agreement that HUD apparently believes would effectively renew the existing MTW agreement. (Doc. No. 57 at Ex. A.) On March 18, 2008, PHA again moved for immediate injunctive relief, contending that HUD's refusal to renew or extend the existing MTW agreement: (1) violates PHA's equal protection rights; and (2) violates the Administrative Procedures Act. HUD responded to PHA's Motion on March 24, 2008. I conducted a hearing on March 27, 2008. For the reasons that follow, I deny PHA's Motion.

THE FORMS OF RELIEF SOUGHT

PHA seeks both a mandatory temporary restraining order and a mandatory preliminary injunction. I may grant a TRO for no more than ten days without affording the non-moving party notice or a hearing. Fed.R.Civ.P. 65. The legal prerequisites for the two forms of relief are otherwise the same. See Brown v. Diguglielmo, No. 07-3771, 2007 WL 4570717, at *1 (E.D.Pa. Dec.26, 2007) (slip copy). Because HUD has received both timely notice and a hearing with respect to PHA's Motion, I will not distinguish between the two forms of equitable relief PHA seeks. See id.

STANDARDS

The requirements for a preliminary injunction are well known. "[A] plaintiff must show both (1) that the plaintiff is reasonably likely to succeed on the merits and (2) that the plaintiff is likely to experience irreparable harm without the injunction." Conchatta, Int. v. Evanko, 83 Fed.Appx. 437, 440-41 (3d Cir.2003) (citing Adamsv. Freedom Forge Corp., 204 F.3d 475, 484 (3d Cir.2000)). If the moving party makes out these prerequisites, the court may consider the effect granting equitable relief would have on both the nonmoving party and the public interest. Id. "Furthermore, when the preliminary inunction is directed not merely at preserving the status quo but, as in this case, at providing mandatory relief, the burden on the moving party is particularly heavy." Punnett v. Carter, 621 F.2d 578, 582 (3d Cir.1980) (citing United States v. Spectro Foods Corp., 544 F.2d 1175, 1181 (3d Cir. 1976)). Because PHA has not shown either a reasonable likelihood of success on the merits or irreparable harm, I will deny its Motion without discussing the remaining factors.

CHALLENGED HUD ACTIONS

PHA asks me to enjoin two decisions made by HUD: (1) the December 17, 2007 "termination" of the existing MTW agreement; and (2) HUD's refusal to renew the existing MTW agreement.

As I have explained, HUD never acted upon its December 17th "termination," and has rescinded that decision by informing PHA that it would not terminate the existing MTW agreement. In fact, that agreement expires today — March 31, 2008 — and has not been terminated. In these circumstances, any dispute respecting HUD's December 17, 2007 letter is certainly moot. See, e.g., Rendell v. Rumsfeld, 484 F.3d 236, 240-11 (3d Cir. 2007); see also Pierre v. Bureau of Immigration and Customs Enforcement, No. 04-3759, 2008 WL 542469, at *2 (3d Cir. Feb.29, 2008). Moreover, the December 17th letter is not "final agency action" subject to judicial review because it has had no practical effect on the parties. See Bennett v. Spear, 520 U.S. 154, 177-78, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997); Star Enters, v. EPA 235 F.3d 139, 145 & n. 9 (3d Cir.2000); Hindes v. FDIC, 137 F.3d 148, 161 (3d Cir.1998); Aerosource, Inc. v. Slater, 142 F.3d 572, 579 (3d Cir.1998). Accordingly, I will consider only HUD's decision not to renew or extend the existing MTW agreement.

DISCUSSION

In the underlying litigation, PHA seeks only equitable relief: an extension of PHA's current MTW agreement with HUD for at least one year. It seeks a preliminary injunction for approximately six weeks, by which time it anticipates that the trial in this matter will have concluded and PHA will have demonstrated its entitlement to the year-long injunction. Because the current MTW agreement expires today and includes no provision for an extension, PHA effectively asks me to impose a new one year contract that HUD finds unacceptable. In explaining its legal entitlement to a one year — as opposed to a ten year — extension, PHA explained that at the end of a year "[i]t's not going to be the same cast of characters [making HUD's decisions]." (Oral Arg. Tr. at 23:18-19.) Surely this explanation underscores that there is no legal basis supporting PHA's claim for equitable relief. As I discuss at greater length below, in recent years, some thirteen housing agencies have secured renewals of their MTW agreements with HUD through legislation, not judicial intervention. As I also explain below, PHA has not demonstrated its entitlement to the equitable relief it seeks.

I. Reasonable Likelihood of Success on the Merits

A. Equal Protection

PHA contends that HUD has refused to renew or extend the existing MTW agreement to punish PHA for refusing to transfer land to a friend of HUD's Secretary. PHA believes that this refusal violates equal protection. To succeed on this claim, PHA must show: (1) that HUD treated PHA differently than other similarly situated entities; (2) that HUD did so intentionally; and (3) that there was no rational basis for the difference in treatment. See Hill v. Borough of Kutztown, 455 F.3d 225, 239 (3d Cir.2006). Under the rational basis test, government action "must be upheld against equal protection challenge if there is any reasonably conceivable state of facts that could provide a rational basis for the classification." See BellSouth Corp. v. FCC, 162 F.3d 678, 691 (D.C.Cir.1998) (quoting FCC v. Beach Commc'ns, Inc., 508 U.S. 307, 313, 113 S.Ct. 2096, 124 L.Ed.2d 211 (1993)). Indeed, as the Supreme Court has explained, administrative and legislative decision-making

inevitably requires that some persons who have an almost equally strong claim to favored treatment be placed on different sides of the line, and the fact [that] the line might have been drawn differently at some point is a matter for legislative, rather than judicial consideration.

United States R.R. Ret. Bd. v. Fritz, 449 U.S. 166, 179, 101 S.Ct. 453, 66 L.Ed.2d 368 (1980).

PHA has not shown disparate treatment. In 2005, Congress required HUD to give those housing authorities with MTW agreements set to expire before September 30, 2006 extensions of those agreements. See Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia and Independent Agencies Appropriations Act, 2006, Pub.L. No. 109-115, 119 Stat. 2396 (Nov. 30, 2005); Doc. No. 32 at Ex. 2 at 119. Accordingly, in 2006, the existing MTW agreements between HUD and housing authorities in Cambridge, Louisville, San Antonio, and ten other cities were legislatively renewed. (Doc. No, 50 at Ex. F.) PHA did not benefit from this legislation because its MTW agreement was set to expire some eighteen months after September 30, 2006.

HUD also extended the existing MTW agreements of Pittsburgh and Minneapolis. In December, 2006, Pittsburgh's agreement was extended for three years. Minneapolis' agreement was extended in August, 2007 for only eight months while HUD finished work on its...