City of Austin v. Paxton

325 F. Supp. 3d 749
CourtDistrict Court, W.D. Texas
DecidedJuly 12, 2018
DocketCAUSE NO.: AU-17-CA-00843-SS
StatusPublished
Cited by1 cases

This text of 325 F. Supp. 3d 749 (City of Austin v. Paxton) is published on Counsel Stack Legal Research, covering District Court, W.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Austin v. Paxton, 325 F. Supp. 3d 749 (W.D. Tex. 2018).

Opinion

SAM SPARKS, SENIOR JUDGE

BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and specifically Defendants Attorney General Ken Paxton and Texas Workforce Commission (collectively, the State)'s Motion to Dismiss for Lack of Subject Matter Jurisdiction and Failure to State a Claim [# 21], the City of Austin (the City)'s Response [# 24] in opposition, and the State's Reply [# 27] in support. Having reviewed the documents, the governing law, the arguments of counsel, and the file as a whole, the Court now enters the following opinion and order.

Background

The question in this case is whether federal law preempts a state law-Texas Local Government Code § 250.007(c) -that allows landlords to decline to rent to tenants who seek to pay their rent using federal housing vouchers.

The Federal Housing Choice Voucher Program

Congress created the Housing Choice Voucher Program to "aid[ ] low-income families in obtaining a decent place to live" and to "promot[e] economically mixed housing." 42 U.S.C. § 1437f(a). The voucher program is funded by the United States Department of Housing and Urban Development *753(HUD) and administered by state and local public housing authorities in accord with regulations promulgated by HUD.

Once admitted to the voucher program, program participants are responsible for finding a landlord in the private rental market willing to rent to them. 24 C.F.R. § 982.302(a). Landlords who participate in the program may screen prospective tenants and reject them if screening reveals red flags in terms of paying rent and utility bills, caring for rental housing, respecting neighbors, criminal activity, and the like. Id. § 982.307(a). And even after potential tenants locate a willing landlord and negotiate the terms of the lease, both the landlord and the tenant must meet numerous administrative requirements imposed by both federal and state law. See generally Austin Apartment Ass'n v. City of Austin , 89 F. Supp. 3d 886, 890-91 (W.D. Tex. 2015) (outlining administrative requirements).

The City Ordinance

In December 2014, the City adopted a housing ordinance (the Ordinance) prohibiting landlords from refusing to rent to tenants who wish to pay for their housing using federal vouchers. Am. Compl. [# 16] at 5. The City enacted the Ordinance because to prevent landlords from discriminating against potential tenants who sought to pay their rent using federal housing vouchers. Id. at 3-5. According to the City, such discrimination relegates voucher holders to lower opportunity areas of the City and disproportionately impacts minority residents, children, and the disabled. Id. at 4.

The State Law

In response to enactment of the City's Ordinance, the State enacted Texas Local Government Code § 250.007(c) to preserve the right of landlords to decline to accept federal housing vouchers. Id. at 7. Section 250.007(c) bars municipalities and counties from adopting or enforcing any ordinance or regulation that prohibits a landlord "from refusing to lease or rent ... to a person because the person's lawful source of income to pay rent includes funding from a federal housing assistance program." Id.

Procedural Posture

In August 2017, the City filed this suit seeking to enjoin § 250.007(c) as preempted by federal law. Compl. [# 1]. The State now files a motion to dismiss which is ripe for review.

Analysis

The State argues the City's complaint must be dismissed because this Court lacks jurisdiction to entertain the City's claims and because, in the alternative, the City has failed to plead sufficient facts to state a plausible preemption claim. The Court first considers whether it has jurisdiction to hear the City's claims. As the Court finds it has jurisdiction, it then considers whether the City's complaint should be dismissed for failure to state a claim.

I. Motion to Dismiss for Lack of Jurisdiction

A. Legal Standard

A motion under Rule 12(b)(1) asks a court to dismiss a complaint for lack of subject matter jurisdiction. FED. R. CIV. P. 12(b)(1). "A case is properly dismissed for lack of subject matter jurisdiction when the court lacks the statutory or constitutional power to adjudicate the case." Home Builders Ass'n of Miss., Inc. v. City of Madison, Miss. , 143 F.3d 1006, 1010 (5th Cir. 1998) (internal quotation marks omitted). Motions to dismiss under Rule 12(b)(1) challenge a court's "very power to hear the case," and the court may therefore "weigh the evidence and satisfy itself"

*754subject matter jurisdiction exists. MDPhysicians & Assocs., Inc. v. State Bd. of Ins. , 957 F.2d 178, 181 (5th Cir. 1992) (internal quotation marks omitted).

B. Application

The State argues this Court lacks jurisdiction to hear the City's suit because (1) the City lacks standing and (2) the State is entitled to immunity under the Eleventh Amendment. Mot. Dismiss [# 21] at 7-12. The Court addresses these arguments in turn.

1. Standing

Article III of the Constitution limits the jurisdiction of federal courts to cases and controversies, and, in order to state a case or controversy, plaintiffs must establish they have standing to sue. U.S. Parole Comm'n v. Geraghty , 445 U.S. 388, 395, 100 S.Ct. 1202, 63 L.Ed.2d 479 (1980) ; Raines v. Byrd , 521 U.S. 811, 818, 117 S.Ct. 2312, 138 L.Ed.2d 849 (1997).

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Related

City of Austin v. Abbott
385 F. Supp. 3d 537 (W.D. Texas, 2019)

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Bluebook (online)
325 F. Supp. 3d 749, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-austin-v-paxton-txwd-2018.