UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, et al.
Plaintiffs,
v.
UNITED STATES DEPARTMENT OF Civil Action 08-01938 (HHK) HOUSING AND URBAN DEVELOPMENT
and
ROBIN KEEGAN, Executive Director of the Louisiana Recovery Authority,
Defendants.
MEMORANDUM OPINION
Greater New Orleans Fair Housing Action Center, the National Fair Housing Alliance,
and five individuals who own homes in New Orleans (collectively “plaintiffs”)1 bring this action
against Robin Keegan, in her official capacity as Executive Director of the Louisiana Recovery
Authority (“LRA”), and the U.S. Department of Housing and Urban Development (“HUD”),
asserting that defendants have violated the Fair Housing Act (“FHA”), 42 U.S.C. § 3601 et seq.2
This case arises from the alleged racially discriminatory effect of a formula used to distribute
1 Plaintiffs intend to represent a class of individual homeowners but, in accordance with a deadline set in an order proposed by the parties and entered by the Court on February 9, 2009, they have not yet filed for class certification. 2 Plaintiffs’ complaint also includes a claim under the Housing and Community Development Act, 42 U.S.C. § 5301 et seq. In the briefing currently before the Court, plaintiffs focus only on their FHA claim, so this memorandum opinion similarly does not discuss this second claim. grants as part of the Road Home Homeowner Assistance Program (“Road Home Program” or
“Program”), a housing redevelopment initiative designed to help homeowners affected by
Hurricanes Katrina and Rita. Plaintiffs seek an injunction requiring recalculation of Program
awards to homeowners in New Orleans using a formula that does not have a disparate impact on
African Americans.
On June 29, 2010, the Court issued an order that denied plaintiffs’ motion for a temporary
restraining order and a preliminary injunction [#50] which sought to enjoin Keegan from
spending surplus funds that remain available to the Road Home Program, or seeking any
additional Program funds from HUD, while this case is pending. This opinion explains the
reasoning on which that order was based.
I. BACKGROUND
In 2005, Hurricanes Katrina and Rita caused catastrophic damage to New Orleans,
Louisiana, and other nearby places. In response, Congress created a block grant program to assist
in recovery of the region, which it funded through three appropriations statutes. See Pub. L. No.
109-148, 119 Stat. 2680, 2779-81 (Dec. 30, 2005); Pub. L. No. 109-234, 120 Stat. 418, 472-73
(June 15, 2006); Pub. L. No. 110-116, 121 Stat. 1295, 1343-44 (Nov. 13, 2007). Pursuant to
these statutes and HUD regulations, the State of Louisiana was to receive $13.4 billion. See 71
Fed. Reg. 7666, 7666 (Feb. 13, 2006) (allocating $6.2 billion from the first appropriation to
Louisiana); 71 Fed. Reg. 63,337, 63,338 (Oct. 30, 2006) (allocating $4.2 billion from the second
appropriation to Louisiana); 121 Stat. at 1343-44 (appropriating $3 billion for supplemental
grants to Louisiana).
2 Louisiana designated approximately $11 billion of those funds for the Road Home
Program. The LRA, in consultation with HUD, developed the Program; HUD approved it and
disburses the money Congress has appropriated for it to the LRA; and the LRA administers it.
Under a portion of the Program called Option 1, an individual whose house was damaged by the
hurricanes may choose to receive a grant to repair or rebuild her home.3 Each beneficiary of an
Option 1 grant receives an award in the amount of either the value of her home before the storms
or the cost of repairing her home, whichever is less, but not in excess of $150,000. Since
plaintiffs initiated their suit, the LRA has created Additional Compensation Grants (“ACGs”),
supplemental awards available to Option 1 beneficiaries whose incomes are at or below eighty
percent of the median in their areas. Regardless of the pre-storm values of their homes, these
individuals may receive ACGs such that their total awards from the Road Home Program reach
the cost of repairs to their homes, still subject to the $150,000 cap.
Since the Road Home Program’s inception, the LRA has distributed Option 1 awards to
tens of thousands of homeowners. As of the time of the briefing regarding plaintiffs’ current
motion, only 179 individuals who applied for Option 1 grants had yet to receive their awards.
The LRA has money set aside to fund grants for those individuals, to continue to distribute ACGs
to eligible individuals, and for other projects within the Road Home Program. The LRA is
currently seeking approval to use much of the Program money not yet designated to a specific use
for “Action Plan Amendment 43,” a construction lending program designed to assist Road Home
3 The Program also permits homeowners to instead opt to receive smaller grants to obtain housing elsewhere in Louisiana or outside the state. The design and implementation of those aspects of the Program are not at issue here.
3 Program beneficiaries who have not been able to complete repairs to their homes. Keegan
estimates that she has $554.5 million remaining in the Program budget.
Individual plaintiffs Gloria Burns, Rhonda Dents, Almarie Ford, Daphne Jones, and
Edward Randolph are African Americans who own homes in New Orleans that were severely
damaged by Hurricane Katrina, and subsequent flooding, in 2005.4 Each applied for a Road
Home Program grant under Option 1, and each received an award based on the pre-storm value
of her or his home rather than the cost of repairing that home.5 Since receiving their initial
grants, Burns and Jones have been deemed eligible to receive ACGs such that their total awards
will amount to $150,000.
In their complaint, plaintiffs allege that the LRA’s reliance on home values in calculating
awards “has a discriminatory disparate impact on African Americans living in historically
segregated communities.” Compl. ¶ 52. Specifically, they argue that because “African American
homeowners in New Orleans are more likely than white homeowners in New Orleans to own
4 The other plaintiffs, Greater New Orleans Fair Housing Action Center, a non- profit organization based in Louisiana, and the National Fair Housing Alliance, a non-profit organization based in Washington, D.C., are advocacy groups that, inter alia, oppose housing discrimination. 5 According to the complaint, Burns received $106,500, which was $89,000 less than the cost of damage to her home and $43,500 less than the maximum she could have received; Dents received $88,534, which was $58,730 less than the cost of damage to her home; Ford received $3,468, which was $156,073 less than the cost of damage to her home and $146,532 less than the maximum she could have received; Jones received $61,000, which was $45,262 less than the cost of damage to her home; and Randolph received $16,650, which was $173,193 less than the cost of damage to his home and $133,350 less than the maximum he could have received. Compl. ¶¶ 61-65. Some of the awards are in amounts less than the pre-storm value of the home because the LRA deducts from each grant any amount of money the homeowner has received as compensation for storm damage from her insurance company or another source, such as the Federal Emergency Management Agency.
4 homes with lower values,” African-American recipients of Road Home Program grants are more
likely than white recipients to receive only the amount of the pre-storm value of their homes and,
consequently, to have a larger gap than white recipients between the amount of the grant and the
cost of rebuilding. Compl. ¶¶ 54-57. This effect, plaintiffs assert, constitutes a violation of the
Fair Housing Act.6 Ultimately, plaintiffs seek injunctive relief, “including but not limited to
ordering Defendants to cease immediately their violation of Plaintiffs’ rights, and to remedy the
invidious effects of their violations by recalculating Road Home homeowner grants in a
nondiscriminatory manner.” Compl. at 17.
At this time, plaintiffs seek a preliminary injunction enjoining Keegan from spending any
surplus funds—that is, Program funds not already designated for the remaining 179 Option 1
awards, ACGs, or any other specific use—until the merits of their case are resolved. They make
this request because Keegan will only be able to distribute recalculated awards, should plaintiffs
prevail on the merits, if sufficient Road Home Program funds remain available for that purpose.
Plaintiffs’ motion for a preliminary injunction is accompanied by evidence they allege
supports their allegation that the Option 1 formula has a discriminatory effect. Specifically, they
point to statistics from the U.S. Census showing that in New Orleans, homes owned by African
Americans have lower values, on average, than homes owned by whites. Pls.’ Mot. for TRO, Ex.
P. They attached to their motion a study by PolicyLink, “a national independent research
6 Specifically, Count I of the complaint alleges that defendants have (1) “made unavailable or denied housing to African American homeowners because of their race in violation of” section 3604(a) of the FHA; (2) “discriminated against African Americans because of their race in the availability of, and in the terms and conditions of, real estate-related transactions in violation of” section 3605(a) of the FHA; and (3) “failed to administer housing- related programs and activities in a manner that affirmatively furthers fair housing, in violation of” sections 3608(d) and 3608(e)(5) of the FHA. Compl. ¶¶ 74-76.
5 organization,” which concludes that on average, African-American applicants to the Road Home
Program received funds in amounts further below the costs to rebuild their homes than white
applicants. Id. at 11-12; id., Ex. S. They also assert that Paul Rainwater, Keegan’s predecessor
at the LRA, told a subcommittee of the U.S. House of Representatives that home values in
African-American neighborhoods tend to be lower than in white neighborhoods and that he was
“sure” that African-American homeowners were more likely than whites to receive awards based
on the value of their homes than the cost of repairs. Id. at 15-16; id., Ex. N at 23-24. Finally,
they attach to their motion the declaration of Carol Johnson, president of a Louisiana mortgage
company, who asserts she has expertise in the mortgage industry and that she has “observed that
because of the formula employed, Road Home Program grant calculations result in homeowners
in predominantly African American areas received lower grant awards than homeowners in
predominantly White areas.” Id., Ex. T ¶ 7.7
II. ANALYSIS
This court may issue a preliminary injunction only when the movant demonstrates: (1) “a
substantial likelihood of success on the merits”; (2) “that it would suffer irreparable injury if the
injunction is not granted”; (3) “that an injunction would not substantially injure other interested
parties”; and (4) “that the public interest would be furthered by the injunction.” Mova Pharm.
Corp. v. Shalala, 140 F.3d 1060, 1066 (D.C. Cir. 1998) (quoting CityFed Fin. Corp. v. Office of
7 Keegan has moved to strike this declaration because Johnson is “not an expert economist or statistician.” Keegan Opp’n to Pls.’ Mot. for TRO (“Keegan Opp’n”) at 29 n.20. Plaintiffs oppose this motion, arguing that Johnson has relevant expertise regarding home values in New Orleans. The parties have made these arguments in less detail than is necessary for the Court to rule on the motion. Furthermore, the Court’s ruling on plaintiffs’ motion does not depend on whether it considers this evidence.
6 Thrift Supervision, 58 F.3d 738, 746 (D.C. Cir. 1995)). “These factors interrelate on a sliding
scale and must be balanced against each other.” Serono Labs., Inc. v. Shalala, 158 F.3d 1313,
1318 (D.C. Cir. 1998). Because preliminary injunctions are “extraordinary and drastic” forms of
judicial relief, district courts should not grant them “unless the movant, by a clear showing,
carries the burden of persuasion.” Mazurek v. Armstrong, 520 U.S. 968, 972 (1997) (quoting
11A C. WRIGHT , A. MILLER, & M. KANE , FEDERAL PRACTICE AND PROCEDURE § 2948, pp.
129-130 (2d ed.1995)) (emphasis in Mazurek).
A. Plaintiffs Have Not Shown a Likelihood of Success on the Merits.
1. Plaintiffs have demonstrated that they could likely make out a prima facie case of discrimination in violation of the Fair Housing Act.
For the reasons explained below, the Court concludes that it may not provide the ultimate
relief plaintiffs seek and therefore should not grant the preliminary relief they currently request.
But the Court notes first that plaintiffs’ disparate impact claim under the Fair Housing Act
appears to have merit. Although full analysis of the issues raised here is unnecessary, the Court
feels compelled nevertheless to briefly explain its reasoning.
Although the D.C. Circuit did not determine in 2922 Sherman Avenue Tenants’
Association v. District of Columbia, 444 F.3d 673 (D.C. Cir. 2006), which of two possible
standards courts in this Circuit are to apply in assessing disparate impact claims under the FHA,
see id. at 680, the Court believes that the appropriate approach is the burden-shifting framework
adopted by several other Circuits. Under this framework, “once the plaintiff demonstrates that
the challenged practice has a disproportionate impact, the burden shifts to the defendant to ‘prove
that its actions furthered, in theory and in practice, a legitimate, bona fide governmental interest
7 and that no alternative would serve that interest with less discriminatory effect.’” Id. (quoting
Huntington Branch, NAACP v. Town of Huntington, 844 F.2d 926, 935-36 (2d Cir. 1988)).
Plaintiffs have demonstrated that they would likely be able to make out this prima facie
case after discovery. The statistical and anecdotal evidence they submit to the Court leads to a
strong inference that, on average, African-American homeowners received awards that fell
farther short of the cost of repairing their homes than did white recipients. Keegan’s attacks on
that evidence are unpersuasive. Plaintiffs need not make a showing at this stage of the
proceedings, before discovery and when briefing is necessarily rushed, sufficient to prove the
merits of their case. Keegan neither demonstrates that plaintiffs’ statistics or logic is flawed nor
provides data about the administration of the Program that would show what effect the Option 1
formula has had. Cf. Berger v. Iron Workers Reinforced Rodmen Local 201, 843 F.2d 1395,
1412 (D.C. Cir. 1988) (“Defendants may also attempt to undermine plaintiffs’ prima facie case
by attacking the validity of plaintiffs’ statistical evidence, or by introducing statistical evidence
of their own showing that the challenged practice did not have racially disproportionate results.”
(citation omitted)). She has also offered no legitimate reason for taking pre-storm home values
into account in calculating Program awards. The Court does not take lightly that some African-
American homeowners received lower awards than they would have if their homes were in
predominantly white neighborhoods. And, although the Court appreciates that all of the parties
are committed to the rebuilding of a city that has suffered greatly, it is regrettable that this effort
to do so appears to have proceeded in a manner that disadvantaged African-American
homeowners who wish to repair their homes.
8 2. Plaintiffs cannot prevail on the merits because this Court does not have the authority to grant the ultimate relief they seek.
Keegan argues that regardless of the merit of plaintiffs’ discrimination claim, the Court
lacks subject matter jurisdiction over this case because the Eleventh Amendment to the U.S.
Constitution bars the Court from providing the relief plaintiffs seek. Her primary argument8 is
based on a legal premise the Court explained in some detail in a Clarification [#52] to an order it
entered regarding a motion to dismiss Keegan filed before plaintiffs submitted their motion. For
clarity, the Court again describes the legal background before addressing plaintiffs’ response.
The Eleventh Amendment bars suits against states absent the relevant state’s consent to
be sued. See Papasan v. Allain, 478 U.S. 265, 276 (1986).9 But in Ex parte Young, 209 U.S.
123 (1908), the Supreme Court held that “[a] federal court is not barred by the Eleventh
Amendment from enjoining state officers from acting unconstitutionally, either because their
action is alleged to violate the Constitution directly or because it is contrary to a federal statute or
regulation that is the supreme law of the land.” Vann v. Kempthorne, 534 F.3d 741, 749 (D.C.
Cir. 2008) (quoting CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 4232
8 Keegan also argues that Eleventh Amendment immunity bars this action because the LRA, and therefore the State of Louisiana, “not Keegan, is the real party in interest in this suit.” Keegan Opp’n at 13. But the Ex parte Young exception to sovereign immunity permits suits against state officers by relying on “the fiction that the suit [goes] against the officer and not the State,” Vann v. Kempthorne, 534 F.3d 741, 749 (D.C. Cir. 2008) (citing Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 114 n.25 (1984)), and the Court disagrees with Keegan’s contention that this fiction does not operate here. 9 The Eleventh Amendment provides that “[t]he Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.” U.S. CONST . amend. XI. The Supreme Court “long ago held that the Amendment bars suits against a State by citizens of that same State as well.” Papasan, 478 U.S. at 276 (citing Hans v. Louisiana, 134 U.S. 1 (1890)).
9 (3d ed. 2007)). The Supreme Court has directed that “[i]n determining whether the doctrine of
Ex parte Young avoids an Eleventh Amendment bar to suit, a court need only conduct a
‘straightforward inquiry into whether [the] complaint alleges an ongoing violation of federal law
and seeks relief properly characterized as prospective.’” Verizon Md. Inc. v. Public Serv.
Comm’n, 535 U.S. 635, 645 (2002) (quoting Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S.
261, 296 (1997) (O’Connor, J., concurring)). In this context, the distinction between retroactive
and prospective relief is significant because the Eleventh Amendment bars “a suit by private
parties seeking to impose a liability which must be paid from public funds in the state treasury.”
Edelman v. Jordan, 415 U.S. 651, 663 (1974) (citations omitted); see also Verizon Md. Inc., 535
U.S. at 645 (making clear that relief that “impose[s] upon the State ‘a monetary loss resulting
from a past breach of a legal duty on the part of the defendant state officials’” is not permissible
(quoting Edelman, 415 U.S. at 668) (emphasis removed)). In other words, this Court cannot
order the payment of damages to correct a prior unlawful act by a state official. See Edelman,
415 U.S. at 663 (holding that a federal court may not issue an order that requires a state to spend
money that “should have been paid, but was not”).
Based on these principles of law, the Court suggested in its Clarification, and now holds,
that it may not grant plaintiffs’ request for an order mandating that LRA make payments to Road
Home Program beneficiaries who have already received funds in amounts calculated using an
allegedly discriminatory formula. An order requiring Keegan to correct Road Home Program
payments that have already been made would not provide prospective relief; it would require
payment of state funds rather than prohibit certain actions in the future. Plaintiffs do not dispute
the Court’s reliance on these fundamental principles, but they contest the Court’s understanding
10 of the facts underlying this case and, therefore, its application of those principles to the situation
at hand. The Court cannot agree with their arguments.
a. The relief plaintiffs seek would require the expenditure of state, not federal, funds.
First, plaintiffs argue that the Court may enter the injunction they seek because such an
order would require the expenditure of federal funds, not state funds. To demonstrate that this
distinction is legally significant, plaintiffs rely primarily on Edelman v. Jordan, 415 U.S. 651
(1974), quoting the many instances in that opinion in which the Supreme Court discussed the
significance for an Eleventh Amendment analysis of requiring the payment of “state funds,” and
they repeat language from other cases relying on Edelman for the proposition that it is
impermissible for a federal court to impose a liability to be paid from the “state treasury.” Pls.’
Resp. to Clarification at 8-9.10 They assert that because the LRA spends money that comes
directly from HUD at Congress’s direction, the funds they wish the Court to order Keegan to use
to correct award amounts do not belong to the state.
The Court does not find that the funds the LRA spends are federal. It simply cannot be
said that an injunction preventing a state official from disbursing money according to a program
administered by her state agency controls only the flow of federal funds. Furthermore, a careful
reading of Edelman reveals that the Supreme Court has made no distinction between money that
comes to a state account from the federal government as opposed to from some other source. In
10 Plaintiffs note in their reply to Keegan’s opposition to their motion that Keegan has failed to address this point and argue Keegan has therefore conceded it. The parties have each made a multitude of arguments in addressing the various complicated issues raised in this case, and neither has directly addressed each point made by the other. The Court will not assume that any arguments are conceded.
11 Edelman, the plaintiffs had successfully demonstrated that Illinois’s administration of a welfare
program, which was “funded by the State and the Federal Governments” and administered by
state agencies, the directors of which were the named defendants, violated certain federal
regulations. Edelman, 415 U.S. at 653-56. The opinion held that the district court had properly
enjoined the state officers from continuing to administer the program in a manner that violated
those regulations but had improperly ordered that individuals who received less than they were
owed because of past violations be compensated. Id. at 664-65. The Supreme Court referred
throughout to state funds and the state treasury, generating the quotes to which plaintiffs have
pointed, but nowhere did it distinguish funds that the federal government gave to the state for the
welfare program from those the state contributed from its own resources. In other words, the
opinion did not address the issue plaintiffs have raised and does not support plaintiffs’
arguments; the best inference to draw is that the Supreme Court considered federal money given
to the state for administration of the relevant program to be state funds.11 For purposes of this
analysis, the money the LRA uses to make awards to Road Home Program beneficiaries are
properly considered state funds.
11 None of the other cases plaintiffs cite contribute to an analysis of this issue. See Verizon Md. Inc., 535 U.S. at 646 (distinguishing between an injunction that would require payment from a state treasury and one that imposed a financial liability on private parties); Quern v. Jordan, 440 U.S. 332, 337 (1979) (repeating language from Edelman but addressing only the question of whether ordering that a particular notice be sent to individuals who might have claims against Illinois constitutes retroactive relief); Fla. Dep’t of State v. Treasure Salvors, Inc., 458 U.S. 670, 689-90 (1982) (reciting language from Edelman but addressing the propriety of a suit against Florida based on the discovery of a sunken ship); Travelers Indem. Co. v. Sch. Bd. of Dade County, Fla., 666 F.2d 505, 509 (11th Cir. 1982) (reciting language from Edelman but addressing whether the Florida board of education has Eleventh Amendment immunity under certain circumstances not analogous to those here).
12 b. An injunction requiring the correction of Option 1 awards would impermissibly provide retroactive relief.
Second, plaintiffs argue that the relief they seek is prospective because the Road Home
Program is “continuing and open,” Pls.’ Resp. to Clarification at 11, and they therefore request
“an end to [] present violation[s] of federal law,” id. (quoting Papasan v. Allain, 478 U.S. 265,
278 (1986)) (alterations and emphasis in brief). They argue that in contrast to Edelman, in which
the defendant state officers had failed to pay benefits that correlated to discrete past time periods,
the Road Home Program “has an ever-changing current balance sheet for an incomplete
program.” Id. Keegan asserts that correction of Road Home Program awards previously
disbursed would constitute retroactive relief.
The fundamental premise here, explained above, is not in dispute:
Relief that in essence serves to compensate a party injured in the past by an action of a state official in his official capacity that was illegal under federal law is barred even when the state official is the named defendant. . . . On the other hand, relief that serves directly to bring an end to a present violation of federal law is not barred by the Eleventh Amendment even though accompanied by a substantial ancillary effect on the state treasury.
Papasan, 478 U.S. at 278 (citations omitted). The Supreme Court has acknowledged that “the
line between permitted and prohibited suits will often be indistinct,” id., but here, the outcome is
unavoidable.
Plaintiffs’ characterization of the Road Home Program as ongoing does not persuade the
Court that an injunction requiring the recalculation of Option 1 awards would constitute
prospective relief. It is true that the Road Home Program as a whole is not complete. But all but
13 179 Option 1 grants have been distributed.12 It is also true that some Road Home Program
recipients have received funds in addition to their initial awards under Option 1. But those
supplemental grants were not based on any change to the formula for, nor did they constitute a
recalculation of, Option 1 awards. The allegedly discriminatory award amounts have, as to
almost all applicants, already been calculated and disbursed. Correcting them, even by entry of
an injunction, would effectively constitute an award of damages. Cf. Papasan, 478 U.S. at 279
(advising that “[i]n discerning on which side of the line [between prospective and retroactive
relief] a particular case falls,” a court is to “look to the substance rather than to the form of the
relief sought”). As was the case in Edelman, the program at issue here distributes discrete
awards; it does not provide any ongoing service such that a “present violation” of law can be said
to exist. Id. at 278; cf. Milliken v. Bradley, 433 U.S. 267, 289 (1977) (holding that a court-
ordered program to remedy inequalities resulting from school segregation “fits squarely within
the prospective-compliance exception reaffirmed by Edelman” because it “enjoin[s] state
officials to conform their conduct to requirements of federal law” in the future operation of
schools).
Were the Court to order, as plaintiffs request, that Keegan recalculate awards that have
already been distributed and make supplemental payments to homeowners whose awards would
have been greater had they not been based on home values, it would impermissibly be requiring
the state to disburse money that “should have been paid, but was not.” Edelman, 415 U.S. at
12 The Court asked plaintiffs during oral argument on this motion whether they would wish to go forward with their request for a preliminary injunction if the Court were to hold that the ultimate relief they seek is only available to those 179 individuals. Plaintiffs did not express a desire to limit their case to such a narrow group of Road Home Program beneficiaries.
14 664. It would impermissibly be doing more than “enjoining state officers from acting
unconstitutionally.” Vann, 534 F.3d at 749. Although, as explained, the Court suspects that the
Option 1 formula did violate the Fair Housing Act, this Court has no authority to remedy it in the
way plaintiffs ask. Accordingly, the Court cannot find that plaintiffs are likely to succeed on the
merits of their case.
2. Plaintiffs have not shown that they will face irreparable injury absent the entry of an injunction.
Plaintiffs argue that without an injunction, the LRA will be able to spend any or all Road
Home Program funds and an insufficient amount of money would remain available to provide the
ultimate relief they seek. This reasoning relies on, among other assumptions, the premise that the
LRA must hold approximately $516 million in order to comply with a future order from this
Court mandating the correction of the disparate impact of the Option 1 formula. Keegan
responds that the LRA has sufficient funds to comply with an order from this Court enjoining her
from using the existing Option 1 formula in calculating the awards owed to the 179 remaining
Option 1 applicants.
As explained above, the Court may not order the relief plaintiffs seek. There is no risk,
therefore, that any spending by the LRA will cause the irreparable harm plaintiffs foresee.13
3. The injury to third parties that would result from the preliminary injunction plaintiffs seek weighs strongly against granting plaintiffs’ motion.
Plaintiffs argue that other parties would not be harmed by the entry of the preliminary
injunction they seek. They note that non-class members whose Road Home Program benefits
13 As noted, plaintiffs’ counsel have declined to indicate that they wish to represent the 179 applicants who have not yet received awards.
15 might be delayed by such an injunction would benefit overall if the LRA is ultimately made to
calculate future awards considering only the cost of repairs.
The Court will not find that third parties would not be harmed by the entry of an
injunction of the sort plaintiffs seek. Even though the preliminary injunction plaintiffs seek
would permit Keegan to disburse some Road Home Program funds, it would restrict her
spending significantly. Each dollar the Court enjoined her from spending would be a dollar
withheld from a Louisiana resident who wants to repair or rebuild her home and who has been
unable to do so in the five years since the storm damaged it. The Court notes that plaintiffs could
have initiated this case and sought preliminary relief long ago, before the Road Home Program
was almost complete and the funds almost depleted. And the Court will not ignore the fact that
the delay a preliminary injunction would cause is significant; discovery and a resolution on the
merits of this case could, and likely would, take years.
4. The public interest in an injunction does not weigh in favor of either party.
Plaintiffs argue that it is in the public interest to remedy housing discrimination. Keegan
argues that the public interest would not be served by delaying the distribution of funds under the
Road Home Program and that Louisiana citizens “continue to need and rely upon funding from
the Road Home” Program. Keegan Opp’n to Pls.’ Mot. for TRO at 35.
Because both parties’ positions have merit, the Court finds that this factor does not weigh
in favor of either party. Plaintiffs are correct that there is a strong public interest in preventing
discrimination on the basis of race, and the Court takes seriously Congress’s intent to do so by
enacting the Fair Housing Act. But Keegan is correct that there is a strong public interest in
going forward with a program designed to repair a devastated area. As noted above, a
16 preliminary injunction would cause significant delay in the distribution of Program funds to
people who have suffered long enough.
5. Conclusion
The Court must balance these four factors against each other. Serono Labs., Inc. v.
Shalala, 158 F.3d 1313, 1318 (D.C. Cir. 1998). In sum, the Court has found that plaintiffs’ Fair
Housing Act claim likely has merit but that plaintiffs do not have a strong likelihood of success
in this action because the Court cannot grant the relief they seek. Furthermore, delaying the
administration of the Road Home Program would be harmful to Louisiana homeowners who still
need assistance. Although the Court is not unsympathetic to the ways in which the law operates
in this instance to preclude the possibility of correcting what may well be a discriminatory
formula, it is bound to apply the law as it stands and it must consider the effect its ruling here
could have on individuals who are not represented. For these reasons, the Court will not grant
the preliminary injunction plaintiff seek.
III. CONCLUSION
For the foregoing reasons, on June 29, 2010, the Court entered an order denying
plaintiffs’ motion for a preliminary injunction [#50].
Henry H. Kennedy, Jr. United States District Judge