Wallace v. Chicago Housing Authority

298 F.Supp.2d 710

Diane Link WALLACE, Angela Maples, Lisa Taylor, Mary E. Sistrunk, Pandora Meadors, Annie R. Smith, and Nichelle Hart, on behalf of themselves and all others similarly situated, Plaintiffs, v. The CHICAGO HOUSING AUTHORITY, an Illinois Municipal Corporation, and Terry Peterson, in his official capacity as Chief Executive officer of the CHA, Defendants.

No. 03 C 0491.

United States District Court, N.D. Illinois, Eastern Division.

December 23, 2003.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Michael Keith Fridkin, Sharon Kay Legenza, Clyde E. Murphy, Charles Robert Petrof, Chicago Lawyers' Committee for

Civil Rights, Alexander L. Polikoff, Julie Elena Brown, Edward Gross, Business & Professional People for the Public Interest, William Paul Wilen, Katherine Elizabeth Walz, National Center on Poverty Law, Adam Geoffrey James Heeren, Illinois Appellate Defender, Chicago, IL, for plaintiffs.

Donald Hubert, Stephanie L. Stewart, Philip John Fowler, Hubert & Fowler, Christina M. Tchen, Lee Price Garner, Amy M. Gardner, Skadden Arps Slate Meagher & Flom, LLP, Chicago, IL, for defendants.

MEMORANDUM OPINION AND ORDER

CASTILLO, District Judge.

Defendants the Chicago Housing Authority ("CHA") and Terry Peterson, Chief Executive Officer of CHA, move to dismiss Plaintiffs' First Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, Defendants' motion is granted in part and denied in part. (R. 17-1.)

RELEVANT FACTS

Plaintiffs sued on behalf of a class of current and former residents of CHA who were, or will be, relocated from public housing during CHA's process of demolishing its high-rise apartment complexes in lieu of new, mixed-income communities. (R. 14-1, Am.Compl. ¶¶ 1, 3.) During that time until the present, Plaintiffs claim, CHA knowingly failed to provide adequate relocation services to them or provided relocation services that either: (1) discouraged Plaintiffs from renting in white or integrated neighborhoods; or (2) steered Plaintiffs to predominantly African-American neighborhoods. (Id. ¶ 3.) According to the complaint, as a result of CHA's practices, Plaintiffs became segregated in African-American communities "characterized by high poverty, high crime, poor schools and poor municipal services." (Id.)

During the demolition of CHA high-rises, Defendants provided relocation services under a government program called the Housing Choice Voucher ("HCV") Program, which is one of several federal rental subsidy programs ultimately administered by the United States Department of Housing and Urban Development ("HUD"). (Id. ¶¶ 34-35.) Under the HCV Program HUD funds and regulates state or local governmental entities called public housing agencies ("PHAs"). (Id. ¶ 35.) In Chicago, CHA is the PHA responsible for administering the HCV program, but CHA has contracted with other consulting companies to directly administer the program. (Id. ¶ 36.) Families participating in the HCV program rent units that meet program quality standards. (Id. ¶ 37.) Under the HCV Program, CHA is prohibited by federal law from restricting the resident's choice of location, and thus CHA residents may select a rental unit anywhere in the private market that lies within CHA's jurisdiction or even anywhere in the United States that administers a voucher program. 42 U.S.C. § 1437f(r)(1)(A).

According to the complaint, CHA's relocation policies have had the effect of discouraging Plaintiffs from inspecting or renting in predominantly white or racially integrated neighborhoods because: (1) at first, CHA failed to provide any relocation services whatsoever; (2) when CHA did begin offering relocation services, its agents failed to inform Plaintiffs of the desirable features of white or racially integrated neighborhoods; (3) CHA or its agents actively steered Plaintiffs to predominantly African-American neighborhoods; and (4) CHA failed to effectively and affirmatively assist families in moving to integrated neighborhoods. (R. 14, Am. Compl.¶ 70.)

From 1995 through 1997, CHA offered no relocation services, (id. ¶ 95), but did offer some relocation services from 1997 until 1999, (id. ¶ 96). In January 2000 CHA submitted a 10-year Plan for Transformation to HUD. (Id. ¶ 86.) The Plan called for demolition of all CHA high-rise developments, as well as redevelopment of enough units to accommodate all qualified families residing in CHA housing as of October 1, 1999. (Id. ¶ 87.) In February 2000 HUD approved the Plan and entered into the Moving to Work Agreement with CHA. (Id. ¶ 88.) The Moving to Work Agreement contained several provisions related to the demolition, replacement and rehabilitation of thousands of public housing units, and promised substantial federal funds to accomplish these goals. (Id.) Additionally, the Moving to Work Agreement incorporated a Resident Protection Agreement that required CHA to negotiate with the Central Advisory Council of the CHA tenants (the "CAC") a legally enforceable lease amendment outlining the rights of CHA residents relocated under the Plan for Transformation. (Id., Ex. B, Moving to Work Agreement at 9.)

On January 16, 2001, CHA entered into the Relocation Rights Contract with the CAC on behalf of all CHA tenants. (Id. ¶ 90.) The contract applied retroactively to all CHA tenants as of October 1, 1999-the effective date of the Plan for Transformation. (Id., Ex. C, Relocation Rights Contract.) This contract establishes the temporary and permanent housing relocation choices for CHA tenants whose buildings were slated for demolition. (Id.) Tenants choosing permanent vouchers forfeit their right to return to public housing in the future, whereas those choosing temporary vouchers retain the right to return. (Id. ¶ 91.) In addition, under the terms of the contract CHA must provide counseling on transition and moving to "opportunity areas," (id. Ex. C, ¶ 6(a)), public transportation stipends and moving assistance, (id., Ex. C, ¶ 6(f)), and must assure access to existing social services for CHA residents, (id., Ex. C, ¶ 6(j)). Each of the named Plaintiffs moved from or within CHA buildings sometime between 1995 and the present. Each Plaintiff alleges that she was denied adequate relocation services, was relocated to substandard, racially segregated housing or was otherwise subjected to housing discrimination by CHA's practices.

LEGAL STANDARDS

In deciding a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), we treat the complaint allegations as true, and view all well-pleaded facts and inferences drawn therefrom in the light most favorable to the plaintiff. Marshall-Mosby v. Corp. Receivables, Inc., 205 F.3d 323, 326 (7th Cir.2000). A Rule 12(b)(6) motion should be granted only if it appears beyond doubt that Plaintiffs can prove no set of facts in support of their claims that would ultimately entitle them to relief. Id.

ANALYSIS

Plaintiffs filed a thirteen-count amended complaint, raising claims of racial steering, perpetuation of segregation, breach of contract and various violations of the Fair Housing Act, 42 U.S.C. §§ 3601, et seq., Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d, the Quality Housing and Work Responsibility Act of 1988 ("QHWRA"), 42 U.S.C. § 1437c-1(d)(15), the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 ("URA"), 42 U.S.C. § 4601, et seq., and two Executive Orders issued by Presidents Kennedy and Clinton. Plaintiffs bring these federal statutory claims against CHA pursuant to 42 U.S.C. § 1983.

I. Statute of Limitations

Before reaching the question of whether Plaintiffs have stated a claim under these statutes and § 1983, we must address Defendants' threshold argument that several of the plaintiffs or members of the plaintiff class are barred by the two-year statute of limitations applicable to claims under § 1983 and the Fair Housing Act. Plaintiffs respond that each of their claims survives under the "continuing violations doctrine" because they have alleged a continual practice or policy by Defendants to place CHA residents into segregated neighborhoods by failing to provide appropriate relocation services. Plaintiffs argue that because CHA has continually failed since 1995 to provide adequate relocation services to them, or any member of the putative class, they each have suffered an injury within the statutory period.

Defendants reject Plaintiffs' "continuing violation" theory on a number of grounds. First, Defendants argue that the continuing violations doctrine applies only to continuing wrongs, as opposed to a series of discrete but related acts, which is the case here. Nat'l R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 102, 113, 122 S.Ct. 2061, 153 L.Ed.2d 106 (2002); CSC Holdings, Inc. v. Redisi, 309 F.3d 988, 992 (7th Cir. 2002). Furthermore, Defendants argue that, even if this Court accepts a continuing violations theory, at a minimum any claims by Plaintiffs who were relocated prior to the execution of the Relocation Rights Contract in October 1999 are time-barred because that contract was an intervening event that interrupted the continuum of CHA conduct.

We believe that Morgan controls our inquiry here and that the continuing violations theory does not toll the time-barred Plaintiffs' claims. The Supreme Court in Morgan drew a distinction between "discrete discriminatory acts" such as termination, failure to promote or failure to hire, and those acts contributing to a hostile work environment. The Court noted that "[h]ostile environment claims are different in kind from discrete acts" in that such claims "are based on the cumulative effect of individual acts." Morgan, 536 U.S. at 115, 122 S.Ct. 2061. Thus the Court held that the former "are not actionable if time-barred, even when they are related to acts alleged in timely filed charges," id. at 113, 122 S.Ct. 2061, but that the latter may be deemed timely so long as the employee...