Case: Walker v. U.S. Department of Housing and Urban Development (HUD)

On June 25, 1985, the plaintiffs, several thousand black clients of low-income housing programs in the West Dallas Projects, brought this class action lawsuit against nine Dallas metropolitan suburbs, the Dallas Housing Authority ("DHA"), and the United States Department of Housing and Urban Development ("HUD"). The plaintiffs, represented by North Central Texas Legal Services, brought the action against the defendants for violations of 42 U.S.C. §§ 1983 and 3604. The case was filed in the U.S. District Court for the Northern District of Texas and assigned to Judge Jerry Buchmeyer.

Background

The plaintiffs alleged that the Dallas suburbs refused to participate in DHA's section 8 Existing Housing Program. The section 8 program was designed to desegregate the Dallas projects. Residents of the West Dallas Project were given vouchers or certificates that enabled them to find rental housing in various Dallas metropolitan areas for which they paid a portion of the rental value and DHA paid the remainder. The plaintiffs claimed that the defendant suburbs refused to participate in the program entirely and DHA administered the voucher program in a racially discriminatory fashion when suburbs did participate, gathering all black families who received section 8 vouchers in the West Dallas projects while allowing white families who received section 8 vouchers to move to Dallas suburbs.

From 1985 through 1987, the Court dismissed all nine defendant suburbs from the case after they agreed to participate in the Section 8 program. After the suburb defendants were dismissed, only the plaintiffs, DHA, and HUD remained as parties. On November 5, 1986, those parties agreed to a consent decree, which was approved by the Court on January 20, 1987.

Consent Decree

The Consent Decree recognized that 1/3 of the 3,500 West Dallas Project housing units were vacant and unfit for human habitation due to lead contamination and deterioration. It further recognized that DHA had operated its program to enforce racial segregation and prevent black individuals from moving into predominately white areas. DHA agreed to develop a revitalization plan for the West Dallas projects and submit the plan to HUD. The Plan would modernize 900 units in the West Dallas project using $18,000,000 of federal funds and demolish the remaining 2,600 units over the following five-year period. In accordance with the demolition efforts, DHA would issue Section 8 certificates and vouchers to replace the demolished units. HUD approved of the plan and also agreed to provide 1,000 units of additional housing, through the construction of 100 new units, 450 certificates, and 450 vouchers. Though we don't have a copy of the consent decree, it seems a class was certified for the purpose of the decree, as the District Court begins referring the plaintiffs as a class.

By the end of July 1988, HUD reduced the subsidy it provided to DHA to maintain the vacant West Dallas project units scheduled for demolition by 60% without the court's approval. The Court ordered HUD pay $1.8 million to DHA to make up for that loss. HUD appealed the Court order, and on appeal, the Fifth Circuit ordered the Court give reasoning for its determination.

In August 1989, in response to the Fifth Circuit's remand, the District Court issued 3 different opinions, known as Walker I, II, and III. Walker I focused on DHA's violations of the consent decree. DHA was found to have violated the consent decree by:

(1) failing to implement the non-discriminatory tenant assignment & selection plan;

(2) failing to provide tenant mobility services;

(3) failing to implement the 120% Fair Market Rent Exception in order to reduce segregation;

(4) failing to hit its goal of having 15% of Section 8 units established in non-minority areas;

(5) failing to ensure Section 8 units met the Housing Qualified Standards;

(6) failing to select a site, begin construction, or begin occupancy of any new public housing.

Because of these failures, the Court ordered the appointment a special master to monitor the compliance of DHA, as well as the other parties. 734 F. Supp. 1231.

Walker II focused on two laws that were passed in December 1987. The Frost Amendment was passed as part of the 1988 HUD Appropriations Act, and prohibited the use of HUD funds for the demolition of any of the three West Dallas Apartment complexes. The second statute was called the Anti-Demolition statute, which in effect required that DHA and HUD's Section 8 certificates remain available for at least fifteen years in order for demolition of existing project units to occur. The Statute also prohibited the use of Section 8 vouchers as replacement units. Both statutes delayed the demolition of the West Dallas housing units. The Court found the Frost amendment unconstitutional because it violated the separation of doctrine powers, as it was a deliberate attempt to interfere with the consent decree. However, the Court found the Anti-Demolition statute constitutional, and applying the law retroactively, ordered no housing that was replaced by Section 8 vouchers alone be demolished. 734 F. Supp. 1272.

Walker III focused on the joinder of the city of Dallas as a defendant subject to the consent decree. The Court joined the City based on several findings that demonstrated the City of Dallas was a cause of the racial segregation in Dallas public housing through its own activities and its indifference to DHA's actions. 734 F. Supp. 1289.

HUD appealed both the court-ordered $1.8 million and Walker II. On September 27, 1990, The Fifth Circuit (Circuit Judges Jerry E. Smith, Samuel D. Johnson, and Homer Thornberry) vacated the order that HUD pay $1.8 million to DHA, finding that the District Court had no authority under the Consent Decree to compel HUD's payment for demolition. The Fifth Circuit then reversed Walker II. The Appeals Court found the Frost Amendment constitutional because it did not outright ban the demolition of the West Dallas Project Housing, and merely removed federal funding for the purpose of the project's demolition. Finally, the Fifth Circuit reversed the Court's holding that the Anti-Demolition Statute applies retroactively. 912 F. 2d 819.

The Court appointed a special master, and the parties continued efforts to comply with the consent decree. In April 1991, Dallas was found in violation for failing to make payments to the special master in preparation for an equalization survey. On March 30, 1992, the Consent Decree was modified to include an obligation on the City of Dallas to oppose any proposals to deny federal funding for West Dallas Project demolition or replacement. (Docket #674). On the same day, the Court also granted in part a motion for emergency relief based on hazardous substances in West Dallas. The Court denied injunctive relief but requested DHA to not assign additional families to the West Dallas projects during the EPA's soil testing for environmental health issues-specifically lead poisoning. (Docket #677) Finally, the Court granted the plaintiffs' motion to vacate the 1987 consent decree between the plaintiffs and HUD, placing the parties back to their positions prior to the agreement (Docket #680).

At this point, the active parties were the plaintiffs, HUD, Dallas, and DHA. The plaintiffs maintained a consent decree with only DHA and the City of Dallas. During 1992, HUD developed a plan for West Dallas. The plaintiffs opposed the plan, arguing that it presented a variety of environmental issues. In September 1992, the Court ordered that Dallas reimburse DHA for the cost of demolishing housing units in the West Dallas projects, Dallas would remain the primary source of funds related to development.

On January 12, 1993, the plaintiffs moved for partial summary judgment on the issue of DHA and HUD's liability to the plaintiff class for injunctive relief, seemingly related to a variety of environmental claims related to the project housing. Parties then entered into a period of discovery that continued through May 1994. During this time, The Department of Justice was added as a defendant. The Court found DHA and HUD liable on May 27, 1994, and the Court ordered the Department of Justice respond to allegations of improper conduct.

The parties engaged in discovery and development plan creation throughout the next year. The Court approved three housing development proposals in the summer of 1995 (See Docket Entries #1213-29). In August, The Court also ordered payment of attorneys' fees for the plaintiffs' attorneys on August 9, 1995 of $910,228 related to their expenditures on monitoring the consent decree (see Docket #1232). Dallas appealed these payments. On appeal, the Fifth Circuit (Circuit Judges Patrick E. Higginbotham, Jerry E. Smith, Fortunato P. Benavides) affirmed and reversed in part, reducing the amount of fees awarded to plaintiffs as they related to the monitoring of the consent decree, but leaving litigation expenses unmodified. The expenses for monitoring were reduced to approximately $500,000. 99 F.3d 761.

Throughout 1996 and 1997, DHA and the City of Dallas continued to develop as required by the Consent Decree. On October 6, 1997, the Court ruled on the plaintiffs and DHA's motion for declaratory relief that the site and tenant selection portion of DHA's Section 8 program was constitutional. This action was brought against homeowner's associations who opposed the program and sought to enjoin the development of public housing near their neighborhoods. The homeowner's associations argued that the order violated equal protection because it specifically required development of project housing in white neighborhoods. The Court found it was constitutional because such race-conscious building was required to reduce segregation. 1997 WL 3317746.

The homeowners appealed. From 1997 through 1999, development in the neighborhoods at issue was stayed. On March 16, 1999, the Fifth Circuit (Circuit Judges Edith H. Jones, Jerry E. Smith, and District Judge John M. Shaw) reversed the District Court, finding that the remedial order violated the equal protection clause because it was not narrowly tailored. The Court then stayed construction of the sites relevant to the Court Order until the District Court modified its order. 169 F. 3d 973. On remand, the Court modified the remedial order to render it constitutional. As a result of the remand, the Homeowners sought attorneys' fees exceeding $250,000. The District Court denied the fees, finding that the Homeowners were not the prevailing parties and that it would be unjust to impose fees on the DHA. 2001 WL 1148109. The Fifth Circuit (Circuit Judges Emilio M. Garza, Edith B. Clement, and District Judge Harry L. Hudspeth) reversed this on November 19, 2002 and ordered payment to the homeowners for attorneys' fees. 313 F. 3d 246.

DHA's work continued on development and demolition in the areas not impacted by the above stay. On October 2, 1998, seven named plaintiffs reached an agreed judgment with DHA for damages of $25,000 for each plaintiff. Monitoring of consent decree compliance continued for several years, during which time, the DHA developed race-blind standards for selecting public housing locations.

Settlements

On March 8, 2001, the Court approved a settlement between plaintiffs, HUD, and the Department of Justice. HUD agreed to provide 3,205 additional Section 8 vouchers to DHA, agreed to a pay up to 125% of the Fair Market Rent for each voucher, agreed to provide $4.8 million in mobility counseling to class members and $1.9 million for regional opportunity counseling funds, and $1,000 in administrative feeds for each of the 3,205 vouchers. In exchange, the plaintiffs agreed to release all claims against HUD. The remaining parties were the plaintiffs, DHA, and the City of Dallas.

On May 14, 2002, DHA moved for approval of a new public housing site. The Court granted approval on May 18, 2004, finding DHA satisfied their suitability criteria without using a race-based analysis. 326 F. Supp. 2d 780. Homeowner's associations appealed, and on March 4, 2005, the Fifth Circuit (Circuit Judges Patrick E. Higginbotham, Jerry E. Smith, Fortunato P. Benavides) affirmed. 402 F. 3d 532.

In September 2002, Plaintiffs sought to enjoin DHA from only providing public facility financial assistance for housing located in Dallas and expand its financial assistance beyond city limits. Plaintiffs identified that black families receiving Section 8 assistance were becoming more concentrated in several Dallas cities while white and Latinx families were becoming less concentrated in the same cities. The Court granted the requested injunction on March 18, 2004. In the same order, the Court denied joinder of the Attorney General to enjoin the Attorney General from denying DHA's application for bond issuance by a public facility corporation in a suburban area. 326 F. Supp. 2d 773.

Development continued under monitoring by the special master. On August 6, 2003, the plaintiffs and Dallas reached a settlement. Dallas was enjoined from unlawfully inhibiting the development of public housing. Dallas agreed to provide two officer squads to patrol the development sites without charge to the DHA, police neighborhood assistance, bi-monthly reports of criminal activity, provide $75,000 annually to DHA to provide as bonuses to landlords located in non-minority concentrated areas, provide $5,000 annually to DHA for the cost of monitoring marketing rent levels throughout the Dallas metropolitan area, and attorneys' fees of $175,000 to plaintiffs' counsel. Plaintiffs agreed to dismiss the city with prejudice. The remaining parties were the plaintiffs and DHA.

On December 21, 2004, the plaintiffs reached an agreed final judgment with DHA. The plaintiffs agreed that the actions taken by DHA through December 21, the appointment of ICP as the Housing Fund Administer, and the following actions constituted all necessary actions DHA was required to take to eliminate racial segregation in DHA's public housing. DHA was required to:

(1) complete the remaining housing development;

(2) see that the 55 remaining settlement vouchers granted from the HUD settlement be used;

(3) continue to maintain the mobility counseling expenditure provided by the HUD settlement;

(4) complete the required audits for the settlement Voucher program for 2002 and 2003;

(5) maintain at least 119 Project-based Section 8 units for at least 15 years following the judgment;

(6) construct forty additional units, limit the West Dallas project site to 950 units;

(7) monitor criminal drug-related activity within the Section 8 apartment projects;

(8) provide monthly reports to the plaintiffs' counsel about Section 8 project activities until all of its obligations are completed;

(9) And provide an annual report to the court reporting its compliance with this final order.

The Court maintained jurisdiction to rule on issues of non-compliance and attorneys' fees.

Development continued for several years. In June 2007, the Plaintiffs and DHA reached another settlement on the implementation and budget for 1,000 vouchers received by DHA from HUD in 2006 (HUD had previously delivered 2,105 of the required vouchers). The settlement detailed that DHA was to continue using the funds provided by HUD to service the plaintiff class. DHA agreed to a 125% Fair Market Rent coverage, establishing outreach programs, post-move services, monthly and annual reporting, annual auditing, and annual surveys.

Over the next several years, DHA continued to work on completing its obligations pursuant to the consent decree and various settlements under supervision of the court and special master. In 2009, Judge Jerry Buchmeyer passed away and the case was transferred to Judge Reed C. O'Connor. DHA continued to provide status reports on its progress with the Consent Decree. In October 2013, the parties agreed to amend their settlement agreement in order to adjust locations of eligible housing because 946 voucher households were determined no longer eligible by the 2010 census. DHA agreed to notify all relevant participants that they would lose access to the Walker settlement vouchers unless they opted to move to a new eligible location.

Current Status

On April 17, 2014, the Court ordered DHA to recalculate and correct the Walker Settlement Voucher payment standard for all households based on several claims that the payments were incorrect. By December 13, 2016, DHA and the plaintiffs' counsel had agreed to the reimbursements calculated for voucher holders for which DHA paid the incorrect amount, the reimbursement totaled $512,187 and were distributed to 410 voucher holders.

The case remains open. DHA continues to work on complying with the consent decree and settlement agreements. The docket was last updated on February 2, 2018 with an amended status report filed by DHA.